UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1 to Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934. For the Quarterly Period Ended:
March 31, 1996; or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. For the transition period from to .
--- -----
Commission File Number
0-23076
Sparta Pharmaceuticals, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 56-1755527
- ------------------------------------ -------------------------------------
(State of incorporation) (IRS Employer Identification No.)
111 Rock Rd. Horsham, PA 19044
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(215) 442-1700
---------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
As of May 10, 1996, there were outstanding 8,190,931 shares of Common Stock,
$.001 par value per share.
1
<PAGE>
This Form 10-Q/A Amendment No. 1 to the Form 10-Q of Sparta
Pharmaceuticals, Inc. (the "Company") filed for the quarterly period ended
March 31, 1996 amends and restates the information regarding Exhibit 10.70,
Exhibit 10.71 and Exhibit 10.72. The copies of Exhibit 10.70A, Exhibit 10.71A
and Exhibit 10.72A filed herewith omit portions of said exhibits for which the
Company has requested confidential treatment from the Securities and Exchange
Commission. The portions of said exhibits for which confidential treatment has
been requested are marked "[ ]" in each exhibit.
2
<PAGE>
PART II-OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The following documents are filed as Exhibits hereto.
Exhibit
Number Description
- ------ ------------
!10.70A -- Evaluation and option agreement between Lexin
Pharmaceutical Corporation and Astra Merck, Inc.
dated as of October 25, 1995. (Assigned to Registrant
pursuant to the Lexin purchase)
!10.71A -- Collaborative Research and Licensing Agreement between
Lexin Pharmaceutical Corporation and Wichita State
University dated as of April 1, 1994. (Assigned to
Registrant pursuant to the Lexin purchase)
!10.72A -- License Agreement between PI Research Corporation
(predecessor in name to Lexin Pharmaceutical
Corporation) and the Trustees of The University of
Pennsylvania dated as of January 2, 1992. (Assigned to
Registrant pursuant to the Lexin purchase)
- -----------------
! Confidential Treatment has been requested from the
Securities and Exchange Commission
3
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Sparta Pharmaceuticals, Inc.
July 16, 1996 By: /s/ Jerry B. Hook President and Chief Executive
- ------------- ------------------------ Officer (principal executive
Date Jerry B. Hook, Ph.D. officer) and Director
July 16, 1996 By: /s/ Ronald H. Spair Vice President and Chief Financial
- ------------- ------------------------- Officer (principal Financial
Date Ronald H.Spair Officer)
4
Exhibit 10.70A
SPARTA PHARMACEUTICALS, INC. HAS OMITTED FROM THIS EXHIBIT 10.70A PORTIONS OF
THE AGREEMENT FOR WHICH SPARTA PHARMACEUTICALS, INC. HAS REQUESTED CONFIDENTIAL
TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE
AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED
"[ ]" AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
EVALUATION AND OPTION AGREEMENT
-------------------------------
EVALUATION AND OPTION AGREEMENT, dated as of October 25,1995, by
and between Astra Merck Inc., a Delaware corporation ("AMI") and Lexin
Pharmaceutical Corporation, a Pennsylvania corporation ("Lexin").
IN CONSIDERATION of the respective covenants, representations,
warranties and agreements set forth herein, and intending to be legally
bound hereby, the parties hereto, hereby agree as follows:
ARTICLE I
EVALUATION AND OPTION GRANT
---------------------------
1.1. Payment by AMI. Subject to the terms and conditions hereof,
--------------
and in consideration of the evaluation and option grant set forth in
Section 1.2, AMI shall pay to Lexin the sum of [ ] within thirty days
from the date of this Agreement to be used solely for the purpose of
conducting animal studies of LEX 032 in the treatment of pancreatitis.
The studies shall be completed by Lexin within 180 days from the date
of this Agreement and, subject to the terms and conditions hereof, the
results of the studies shall be available for use by AMI.
1.2. Evaluation and Option Grant. Lexin hereby grants to AMI
---------------------------
an exclusive and irrevocable right to evaluate (i) Patents (as
hereinafter defined) and any intellectual property rights relating
thereto, and (ii) all data, information, know-how and materials,
whether existing now or in the future, relating to the
manufacture, use, stabilization, design and testing of LEX 032 for
the treatment of pancreatitis (collectively, the "Technology")
during the period commencing on the date of this Agreement and
ending [ ] year following the receipt of a written report summarizing
the data from the animal studies (the "Period"). Further, Lexin
hereby grants to AMI an exclusive and irrevocable option (the
"Option"), exercisable at any time during the Period, to obtain an
exclusive license under the Patents and
<PAGE>
the Technology for the United States of America, including its
territories, possessions, and Puerto Rico (collectively, the
"Territory"), for the human pharmaceutical treatment of pancreatitis or
other diseases of the gastrointestinal system (whether by prescription,
over-the-counter or otherwise) (the "Field"). During the Period, Lexin
shall not provide to any other party access to the Patents or the
Technology which has not already been provided prior to the date
hereof, or solicit or accept offers to negotiate or otherwise discuss
commercial opportunities regarding the Patents or the Technology for
use in the Field. The Option includes the grant by Lexin to AMI's
parent, Astra AB, of an exclusive option during the Period to negotiate
an agreement for the development and commercialization of products in
the Field and outside the Territory.
For the purposes of this Agreement, the term "Patents" means (i)
all information relating to those patent applications and any division,
continuation, or continuation-in-part thereof and unexpired United
States patents set forth on Schedule 1.1, any United States patents
granted on the basis of the patent applications set forth in Schedule
1.1 and any division, continuation or continuation-in-part thereof;
and (ii) any reissue or extension of any of the foregoing patents.
1.3. Representation and Warranty for Technology. Except as
------------------------------------------
otherwise set forth in Schedule 1.3, Lexin represents and warrants to
AMI that (i) to the best of its knowledge, the intellectual property
rights related to Patents and the Technology are subsisting and are not
invalid or unenforceable, in whole or in part; (ii) Lexin has the full
right, power and authority to grant all of the right, title and
interest in the Patents and the Technology under Section 1.2 hereof;
(iii) Lexin has not previously licensed, assigned, transferred,
conveyed or otherwise encumbered such right, title and interest; (iv)
Lexin is the sole and exclusive owner or licensee of the Patents and
the Technology, all of which is free and clear of any liens, charges
and encumbrances, and, except for the licensors listed in Schedule 1.1
hereto, to the best of its knowledge, no other person, corporate or
other private entity, or governmental entity or subdivision thereof has
or shall have any claim of ownership with respect to the Patents or the
Technology; (v) there are no claims, judgments or settlements to be
paid by
-2-
<PAGE>
the Lexin relating to the Patents or Technology or claims pending
litigation relating thereto; and (vi) Lexin knows no basis for any
claims that the Patents or Technology infringes the patents,
copyrights, trade secrets or other proprietary rights of third parties.
1.40 Evaluation by AMI. AMI shall evaluate the Patents and the
-----------------
Technology as it deems appropriate in its sole discretion during the
Period. Lexin shall cooperate with AMI by providing data, information
and reasonable assistance, including but not limited to, scientists
participating in face to face scientific meetings with AMI scientists,
as necessary, so as to enable AMI to properly evaluate the Patents and
the Technology.
1.50 Exercise of Option: Terms Of Definitive Agreement. At any time
-------------------------------------------------
during the Period, AMI may exercise the Option (and Astra AB may
exercise its option described in the last sentence of the first
paragraph of Section 1.2 hereof) by providing written notice thereof to
Lexin. Immediately following such notification, the parties shall
commence negotiations on a definitive agreement(s) and Lexin shall
grant to AMI and/or Astra AB all rights by an exclusive, sublicensable,
royalty-bearing license under all know-how and patents arising from the
Patents to make, have made, use and sell human pharmaceutical products
(i) in the Field in the Territory (for AMI), and (ii) in the Field
outside the Territory (for Astra AB), utilizing the Technology pursuant
to a definitive agreement(s). Such definitive agreement(s) shall
contain such reasonable terms and conditions which are typical in the
industry. Such terms shall include, without limitation, that AMI (or
Astra AB) may terminate the license agreement at any time for any
reason and that the term of the agreement shall be until the last to
expire patent licensed thereunder. The proposal by AMI (or Astra AB)
for the definitive agreement shall include a reasonable compensation
for the Technology, which compensation may include a reasonable
royalty. If the parties cannot agree on the terms of the agreement, the
parties shall submit the matter to arbitration in accordance with
Article II.
1.6. Additional Rights. For so long as AMI and Lexin are either in
-----------------
good faith negotiating a definitive agreement in the Field or
performing under the terms of such definitive agreement, AMI may elect,
in its sole discretion, to enter into negotiations with
-3-
<PAGE>
Lexin for exclusive rights to additional applications for compounds
with a similar mechanism of action or clinical potential as LEX 032, in
or out of the Field ("Additional Applications") on such terms and
conditions as the parties may mutually agree, if AMI notifies Lexin of
its election at any time during the Period or the term of the
definitive agreement, as the case may be. If AMI makes the foregoing
election, the parties shall determine in good faith the terms under
which AMI will have exclusive rights during the Period or the term of
the definitive agreement, as applicable, to negotiate a definitive
agreement with Lexin with respect to each such Additional Application.
If Lexin desires to actively solicit or is approached by a third party
to negotiate commercial opportunities relating to any Additional
Application during the Period or the term of the definitive agreement,
as applicable, Lexin agrees first to provide written notice of such
intention to AMI. AMI shall have a period of thirty (30) days after
receipt of such notice during which to advise Lexin as to whether it
desires to negotiate a definitive agreement with respect to such
Additional Application, and if it desires to do so, an additional sixty
(60) day period to negotiate such agreement before Lexin may actively
solicit or negotiate with another party. If AMI elects not to
negotiate, then Lexin shall be free to negotiate with third parties as
to that Additional Application.
Notwithstanding the foregoing, if AMI elects to negotiate for such
exclusive rights and the parties fail to consummate a definitive
agreement with respect thereto, for a period of one (1) year following
the expiration of AMI's negotiation period, Lexin may not grant rights
to exploit commercial opportunities with respect to such Additional
Application using the Patents or the Technology to any third party on
terms which are in the aggregate materially more favorable than those
last offered to AMI without first offering such terms to AMI, which AMI
shall have a period of 30 days to accept. Lexin's obligations under the
immediately preceding sentence shall survive the termination or
expiration of this Agreement.
-4-
<PAGE>
ARTICLE II
ARBITRATION
-----------
2.1. Arbitration. If the terms of the definitive agreement for
-----------
AMI's Option under Section 1.5 are submitted to arbitration hereunder,
the matter shall be settled by arbitration by a board of arbitrators
consisting of an arbitrator appointed by AMI, an arbitrator appointed
by Lexin and a third arbitrator chosen by the mutual agreement of AMI
and Lexin, which third arbitrator shall be unrelated either to AMI or
Lexin. Such arbitration proceedings shall be held in Philadelphia,
Pennsylvania and shall be held in accordance with the then current
rules of the American Arbitration Association. Arbitration may be
commenced at any time by either party hereto giving written notice to
the other party to a dispute that such dispute has been referred to
arbitration. The arbitrators shall determine a reasonable price, rate
and other terms based on the guidelines set forth in this Agreement and
with reasonable terms based on those typical in the industry and the
offers or proposals of each party and shall enforce the obligations of
Lexin and AMI to license the Technology on such terms pursuant to a
reasonable definitive agreement, the terms of which shall also be
subject to this arbitration provision should the parties be unable to
reach agreement. Any award rendered by the arbitrators shall be
conclusive and binding upon the parties hereto provided, however, that
any such award shall be accompanied by a written opinion of the
arbitrators giving the reasons for the award. The provision for
arbitration shall be specifically enforceable by the parties and the
decision of the arbitrators in accordance herewith shall be final and
binding and there shall be no right of appeal therefrom. Each party
shall pay its own expenses of arbitration and the expenses of the
arbitrators shall be equally shared, provided, however, that if in the
opinion of the arbitrators any claim hereunder or any defense or
objection thereto was unreasonable, the arbitrators may assess, as part
of their award, all or any part of the arbitration expenses of the
other party (including reasonable attorneys' fees) and of the
arbitrators against the party raising such unreasonable claim, defense
or objection. The arbitration proceeding shall be conducted in English.
-5-
<PAGE>
ARTICLE III
MISCELLANEOUS
-------------
3.1. Confidentiality. AMI and Lexin agree that all information
---------------
relating to the Technology and the terms of this Agreement, disclosed
by either party in accordance with this Agreement shall be maintained
by the receiving party in secrecy, and each will use all reasonable
diligence to prevent disclosure, except to necessary personnel and,
with respect to AMI, necessary personnel of its affiliates. AMI's and
Lexin's obligations under this Section 3.1 shall be limited to a period
of five years from the date of this Agreement. The parties shall not
have any obligation of confidentiality with respect to any information
that is: (a) in the public domain, other than by a breach of this
Agreement on the part of the receiving party; (b) rightfully received
from a third party without any obligation of confidentiality; (c)
rightfully known to the receiving party without any limitation on use
or disclosure prior to its receipt from the disclosing party as
documented in written records; (d) generally made available to third
parties by the disclosing party without restriction on disclosure; or
(e) independently developed by the receiving party as documented in
written records. Any and all information received by either party from
the other, upon request shall be promptly returned, except that the
receiving party may retain one copy of such information in its
confidential files, solely for record purposes.
3.2. Publication. AMI and Lexin each acknowledge the other party's
-----------
interest in publishing to obtain recognition within the scientific
community and to advance the state of scientific knowledge. Each party
also recognizes the mutual interest in obtaining valid patent
protection and in protecting business interests and trade secret
information. Consequently, a party wishing to make a publication shall
deliver to the other party a copy of the proposed written publication
or an outline of an oral disclosure at least sixty days prior to
submission for publication or presentation. The reviewing party shall
have the right to propose modifications to the publication for patent
reasons, trade secret reasons or business reasons or to request a
reasonable delay in publication or presentation in order to protect
patentable information. If a reviewing party requests a delay, the
publishing party shall delay
-6-
<PAGE>
submission or presentation for a period of ninety days to enable patent
applications protecting each party's rights in such information to be
filed. Upon expiration of such ninety days, the publishing party shall
be free to proceed with the publication or presentation. If a reviewing
party requests modifications to the publication, the publishing party
shall edit such publication to prevent disclosure of trade secret or
proprietary business information prior to submission of the publication
or presentation.
3.3. Governing Law. The interpretation and construction of this
-------------
Agreement, and all matters relating hereto, shall be governed by the
laws of the Commonwealth of Pennsylvania applicable to agreements
executed and to be performed solely within such Commonwealth without
reference to principles of conflicts of laws.
3.4. Enforcement. Each party shall have the right at all times to
-----------
enforce the provisions of this Agreement in strict accordance with the
terms hereof notwithstanding any conduct or custom on its part in
refraining from doing so at any time. The failure of any party at any
time to enforce its rights hereunder strictly in accordance with the
same shall not be construed as having created a custom contrary to the
specific provisions hereof or as having in any way modified or waived
the same.
3.5. Notices. Any notice, request, demand, waiver, consent,
-------
approval or other communication which is required or permitted
hereunder shall be in writing and shall be deemed given only if
delivered personally or sent by a telegram or telecopier (with
transmission confirmed) or by registered or certified mail, return
receipt requested and postage prepaid, or by federal express or an
equivalent overnight delivery service, addressed
-7-
<PAGE>
to the parties at their respective addresses as set forth below or to
such other addresses at which notice of change shall have been duly
given.
If to AMI, to:
Astra Merck Inc.
725 Chesterbrook Boulevard
Wayne, Pennsylvania 19087-5677
Attention: Executive Director of Licensing and Business
Development
If to Lexin, to:
Lexin Pharmaceutical Corporation
Rock Plaza III, 111 Rock Road
Horsham, Pennsylvania 19044-2310
Attention: Jerry B. Hook, Ph.D.
Such notice, request, demand, waiver, consent, approval or other
communication shall be deemed to have been given as of the date so
delivered, telegraphed, or telecopied, or on the fifth day after
deposit in the United States mail, or on the second day after the
deposit with Federal Express or an equivalent overnight delivery
service. It is understood and agreed that this Section 3.5 is not
intended to govern the day-to-day business communications necessary
between the parties in performing their duties, in due course, under
the terms of this Agreement.
3.6. Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties with respect to the subject matter hereof
and all prior agreements with respect thereto are superseded hereby and
each party confirms that it is not relying on any representations or
warranties of the other party except as specifically set forth herein,
No amendment or modifications hereof shall be binding upon the parties
unless in writing and duly executed by authorized representatives of
both parties.
3.7. Binding Effect; Assignment. This Agreement shall inure to the
--------------------------
benefit of and be binding upon the parties and their respective
successors and permitted assigns. Neither party shall assign this
Agreement or any of its rights or obligations hereunder without the
-8-
<PAGE>
prior written consent of the other party, except that Lexin may assign
its rights and obligations to any entity with which it may merge or
consolidate, or to which it may transfer substantially all of its
assets to which this Agreement relates.
3.8. Survival. The respective rights and obligations of the parties
--------
hereunder shall indefinitely survive the termination or expiration of
this Agreement to the extent necessary to the intended preservation of
such rights and obligations.
3.9. Schedules. All schedules referred to herein or referred to in
---------
any schedule hereto are intended to be, and hereby are, specifically
incorporated herein and made a part of this Agreement.
3.10. Counterparts. This Agreement may be executed in one or more
------------
counterpart copies, each of which shall be deemed an original and all
of which taken together shall be deemed to constitute one and the same
instrument. This Agreement shall become binding when one or more
counterparts taken together shall have been executed and delivered by
the parties.
3.11. Press Releases. Except as required by applicable law, neither
--------------
of the parties hereto shall give notice to any third parties or
otherwise make any public statement or releases concerning this
Agreement or the transactions contemplated hereby without obtaining the
prior written consent of the other party to this Agreement as to the
contents and manner of presentation and publication thereof, which
consent shall not be unreasonably withheld.
3.12. Severability. If any one or more provisions of this Agreement
------------
shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions hereof shall not
in any way be affected or impaired thereby. To the extent permitted by
applicable law, each party waives any provision of law which renders
any provision of this Agreement invalid, illegal or unenforceable in
any respect. In the event any provision shall be held invalid, illegal
or unenforceable the parties shall use their best efforts
-9-
<PAGE>
to substitute a valid, legal and enforceable provision which, insofar
as practical, implements the purposes hereof.
3.13. Further Assurances. Each party shall execute such other
------------------
instruments, give such further assurances and perform such acts which
are or may become necessary or appropriate to effectuate and carry out
the provisions of this Agreement.
3.14. Headings. The article and section headings herein are for
--------
reference purposes only and shall not affect the meaning or
interpretation hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their officers thereunto duly authorized as of the date
first set forth above.
LEXIN PHARMACEUTICAL CORPORATION ASTRA MERCK INC.
By: /s/ Jerry B. Hook By: /s/ Wayne P. Yetter
------------------------------- -----------------------
Jerry B. Hook Wayne P. Yetter
President and Chief President and Chief
Executive Officer Executive Officer
-10-
Exhibit 10.71A
SPARTA PHARMACEUTICALS, INC. HAS OMITTED FROM THIS EXHIBIT 10.71A PORTIONS OF
THE AGREEMENT FOR WHICH SPARTA PHARMACEUTICALS, INC. HAS REQUESTED CONFIDENTIAL
TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE
AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED
"[ ]" AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
COLLAB0RATIVE RESEARCH AND LICENSING AGREEMENT
----------------------------------------------
This Agreement, dated as of the 1st of April, 1994, between Lexin
Pharmaceutical Corporation, Pennsylvania Business Campus, Rock Plaza
III, 111 Rock Road, Horsham, PA 19044-2310 ("LEXIN") and Wichita
State University, 1845 N. Fairmount Avenue, Wichita, Kansas
67206-0007 ("UNIVERSITY").
WITNESSETH:
WHEREAS, UNIVERSITY and LEXIN possess certain know-how in the field
of small and large serine protease inhibitors for all uses and
applications (except agricultural uses and applications) and all
aspects of molecular interaction with serine proteases;
WHEREAS, UNIVERSITY, on behalf of William C. Groutas, Ph.D. ("DR.
GROUTAS"), is desirous of and prepared to conduct collaborative
research in this field which may lead to the development of
commercial products;
WHEREAS, LEXIN is prepared to provide support to UNIVERSITY for
such research by DR. GROUTAS, providing it receives certain license
rights under inventions, biological materials, and/or know-how; and
WHEREAS, UNIVERSITY represents, subject to potential rights under
Article III.D hereof, that it has full rights by assignment to such
inventions, biological materials, and/or know-how and wishes to have
such inventions, biological materials, and/or know-how perfected and
marketed in order that products resulting therefrom might be available
for public use and benefit; and
WHEREAS, UNIVERSITY represents, subject to potential rights under
Article III.D hereof, and warrants to LEXIN that: (i) it has full right
and authority to enter into this Agreement without consent or approval
of any other party; and (ii) it is not subject to any restrictions
which would prevent or impair the grant to LEXIN of the licenses.
NOW, THEREFORE, for valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and intending to be legally
bound, the parties hereto mutually agree as follows:
<PAGE>
ARTICLE I - DEFINITIONS
-----------------------
A. Research Program. The term "Research Program" shall refer to
----------------
the work outlined in Appendix A.
B. Licensed Invention. The term "Licensed Invention" shall mean
------------------
any and all technical information, trade secrets, developments,
discoveries, know-how, methods, techniques, formulae, processes and
other proprietary ideas, whether or not patentable or copyrightable,
that are discovered, developed or reduced to practice arising out of
the research performed under this Agreement, as set forth in Appendix
A.
C. Patent Rights. The term "Patent Rights" shall mean United
-------------
States or foreign patent application rights owned or controlled by
UNIVERSITY which arise under any United States or foreign patent
applications, or any patents issuing from said applications, including
any divisions, continuations, continuations-in-part, re-examinations,
or reissues thereof and patents of addition thereto, and cover the
making, using, or selling of Product.
D. Product. The term "Product" shall mean any product derived
-------
from a Licensed Invention used in the Field.
E. Net Sales. With respect to any quantity of Product subject to
---------
royalty under this Agreement that is sold by LEXIN or any of its
sublicensees to any third party, the term "Net Sales" shall mean the
gross invoice selling price for that quantity of Product, less: (a)
discounts and allowances to customers,
(b) credits for returned goods, (c) prepaid freight, (d) sales taxes or
other governmental charges paid in connection with the sale; and (e)
commissions and other fees paid to distributors and other sales
agencies for or in connection with the sale of Product.
F. Affiliate. The term "Affiliate" shall mean any corporation,
---------
company, partnership and/or firm which controls or is controlled by or
is under common control with LEXIN. For purposes of this Paragraph,
control shall mean: (a) in the case of corporate entities, direct or
indirect ownership of at least fifty per cent (50%) of the stock or
participating shares entitled to vote for the election of directors;
and (b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest or the
power to direct the management and policies of such entity.
G. Effective Date. The term "Effective Date" shall mean the date
--------------
first indicated above as the effective date of this Agreement.
2
<PAGE>
H. Field. The term "Field" shall mean use for any diagnostic,
-----
therapeutic and/or prophylactic purpose.
ARTICLE II - COLLABORATIVE RESEARCH PROGRAM
-------------------------------------------
A. For the one (1) year ending [ ] (the
"Research Term"), LEXIN agrees, as as set forth below to pay
UNIVERSITY funds to support the Research Program, and UNIVERSITY
shall supply the services of requisite personnel and to furnish
the necessary facilities to carry out such Research Program, all
according to a Plan for Research and Budget agreed upon by LEXIN
and UNIVERSITY as set forth in Paragraph B of this Article.
B. The Plan for Research and Budget for the Research Term
is set forth in Appendix A hereto. The budget for the Research
Term shall be $[ ], payable quarterly in advance.
C. The parties shall have the option to continue the Research
Program for an additional period after the Research Term, under
substantially identical terms as set forth herein; however, continued
funding shall be solely at the discretion of LEXIN.
D. The Research Program shall be under the direction of DR.
GROUTAS. In the event that the services of DR. GROUTAS become
unavailable during the course of the Research Program, LEXIN may
terminate the Research Program by giving written notice to UNIVERSITY
and reimbursing UNIVERSITY for all previously incurred and
noncancellable expenses for the Research Program.
E. UNIVERSITY shall report in writing to LEXIN the results and
status of its research under this Agreement within fifteen (15) days
after the end of each six (6) month period hereunder. At the conclusion
of the Agreement, LEXIN shall receive a complete detailed report of the
work carried out and funded by this Agreement. Further, DR. GROUTAS and
the staff engaged on the Research Program shall be available at times
mutually agreed upon for the purpose of discussing the progress of the
Research Program. In the event of termination of the Research Program,
LEXIN shall receive a final summary report of all work carried out and
all inventions conceived and/or arising out of the research performed
under this Agreement.
ARTICLE III- PATENT RIGHTS
--------------------------
A. UNIVERSITY will promptly inform LEXIN of any ideas,
improvements and inventions arising out of the research performed under
this Agreement solely by UNIVERSITY personnel or by UNIVERSITY
personnel jointly with employees of LEXIN.
3
<PAGE>
Inventions, including biological materials, made solely by UNIVERSITY
personnel and any patent applications and patents thereon shall be
owned by UNIVERSITY. Inventions made jointly by UNIVERSITY personnel
with LEXIN employees and any patent applications and patents thereon
shall be jointly owned by UNIVERSITY and LEXIN.
B. UNIVERSITY shall be responsible for filing and prosecuting
United States and foreign patent applications on inventions owned
solely by UNIVERSITY. Both UNIVERSITY and LEXIN shall be mutually
responsible for making decisions regarding the scope and content of any
such applications and prosecution thereof. The expenses in connection
with filing and prosecution of any applications for University-owned
patents or patents jointly owned with LEXIN, United States and/or
foreign and the maintenance of issued patents thereon shall be borne by
LEXIN. All expenses incurred by LEXIN in applying for patent protection
relating to inventions conceived by UNIVERSITY shall be creditable
against any future royalty payments due UNIVERSITY by LEXIN; however,
royalties due UNIVERSITY in any payment period shall not be reduced to
less than 50% of what they otherwise would have been.
C. LEXIN shall be entitled to file and prosecute United States
and/or foreign patent applications on jointly owned inventions.
UNIVERSITY and LEXIN shall be jointly responsible for making decisions
regarding the scope and content of applications and prosecution thereof
on any such jointly owned inventions. UNIVERSITY will be expected to
assist in assembling inventorship information and data for filing
patent applications on jointly owned inventions. Decisions on when,
where and whether to file on jointly owned inventions will be made by
LEXIN after consulting with UNIVERSITY. The expenses in connection with
filing and prosecution of any jointly owned patent applications, United
States and/or foreign, and the maintenance of issued patents thereon
shall be borne by LEXIN. All expenses incurred by LEXIN in applying for
patent protection relating to inventions conceived jointly with
UNIVERSITY shall be creditable against any future royalty payments due
UNIVERSITY by LEXIN; however, royalties due UNIVERSITY in any payment
period shall not be reduced to less than 50% of what they otherwise
would have been.
D. LEXIN acknowledges that certain ideas, improvements and
inventions arising out of the research performed under this Agreement
by UNIVERSITY personnel may be subject to rights retained by the United
States government in accordance with P.L. 96-517, as amended by P.L.
98-620, and any regulations issued thereunder.
4
<PAGE>
ARTICLE IV - LICENSE TO LEXIN
-----------------------------
A. In consideration of LEXIN's support for research and other
consideration hereunder, UNIVERSITY hereby grants to LEXIN:
(1) an exclusive, worldwide license to make, have made, use,
sell and have sold Product derived from Licensed
Invention or deviations; and
(2) an exclusive, worldwide license under Patent Rights to
make, have made, use, sell and have sold Product.
B. The licenses granted by UNIVERSITY to LEXIN under Paragraph A
of this Article shall include the right to grant sublicenses of no
greater scope than the license granted to LEXIN hereunder.
C. During the term of this Agreement and so long as LEXIN is not
in default with respect to any payment due to UNIVERSITY hereunder,
UNIVERSITY will not assert Patent Rights or Licensed Patent to prevent
any party from using or selling any quantity of Product on which
royalty has been paid hereunder.
ARTICLE V - ROYALTIES AND OTHER CONSIDERATION
---------------------------------------------
A. In consideration of the licenses granted to LEXIN under this
Agreement, LEXIN shall pay UNIVERSITY a royalty of [
] ([ ]) on the Net Sales of Product derived from Licensed
inventions or deviations covered by a claim contained in an issued
Patent Right on a country by country basis.
B. In the event that LEXIN or a sublicense of LEXIN must pay
additional royalties to a third or additional parties to allow for
commercialization of Product developed under this Agreement, LEXIN and
the University shall agree to negotiate in good faith to consider
whether offset of royalty payments is required based upon the
circumstances and, if required, LEXIN shall have the right to reduce
royalty payments to UNIVERSITY in a manner consistent with the need to
offset such additional royalty payments.
ARTICLE VI - REPORTS, PAYMENTS AND ACCOUNTING
---------------------------------------------
A. Upon first commercial sale of Product, LEXIN shall provide to
UNIVERSITY, within ninety (90) days following each calendar quarter, a
written report setting forth the total Net Sales and the royalty due
and payable to UNIVERSITY for such quarter and LEXIN shall remit to
UNIVERSITY with such report the
5
<PAGE>
amount of royalty payments shown thereby to be due. Royalties shall be
payable from the country in which they are earned and subject to
foreign exchange rates then prevailing in such country. Royalties shall
be remitted in United States dollars. For converting any royalty that
accrued in another currency into United States dollars, there shall be
used the closing buying rates quoted by the [Morgan Guaranty Trust
Company of New York, New York] for the last business day of the
calendar quarter in which the royalties were earned.
B. LEXIN shall keep complete and accurate records for the latest
three (3) years showing the Net Sales by LEXIN of Product made under
this Agreement. Such records shall be in sufficient detail to enable
the royalties payable hereunder by LEXIN to be determined. LEXIN agrees
to permit such books and records to be examined but not more often than
once in any calendar year. The examination shall be by an independent
certified public accountant designated by UNIVERSITY and reasonably
acceptable to and approved by LEXIN. Any such audit shall be at the
expense of UNIVERSITY and conducted during business hours of LEXIN and
upon reasonable notice to LEXIN. The purpose of any such audit shall
solely be for verifying the royalties payable as provided for in this
Agreement and said accountant shall only disclose Net Sales to
UNIVERSITY and royalties due and payable thereon.
C. Any tax required to be withheld by LEXIN under the laws or
governmental regulations of any country for royalties payable to
UNIVERSITY shall be promptly paid by LEXIN for and on behalf of
UNIVERSITY to the appropriate governmental authority. LEXIN shall
furnish UNIVERSITY with proof of payment of such tax together with
official or other appropriate evidence issued by the appropriate
government authority sufficient to enable UNIVERSITY to support a claim
for any income tax credit in respect of any tax so paid.
ARTICLE VII - TERM AND TERMINATION
----------------------------------
A. This Agreement, unless terminated earlier as hereinafter
provided, shall terminate on the [ ] anniversary of its
Effective Date or the expiration of the last of the patents licensed
hereunder on a country by country basis, whichever date shall last
occur, whereupon the exclusive licenses granted hereunder shall be
fully paid and LEXIN and its sublicensees shall be free to make,
have made, use and sell Product without further duties or
responsibilities to UNIVERSITY.
B. If any of the terms or conditions of this Agreement are breached
and such breach is not corrected within sixty (60) days after written
notice thereof is given by a complaining party to the breaching party,
the complaining party shall have the option
6
<PAGE>
to terminate this Agreement by giving written notice thereof to the
breaching party.
ARTICLE VIII - ASSIGNABILITY
----------------------------
LEXIN may, without the prior written consent of UNIVERSITY, assign
this Agreement or any of its rights or obligations hereunder to an
Affiliate. Such assignee may, without the prior written consent of
UNIVERSITY, assign such Agreement or rights or obligations hereunder
back to LEXIN or to an Affiliate without the prior written consent of
UNIVERSITY. Neither this Agreement nor any of the rights or obligations
of UNIVERSITY hereunder shall be assignable or otherwise transferable
by UNIVERSITY without the prior written consent of LEXIN.
ARTICLE IX- DEVELOPMENT OF PRODUCT
----------------------------------
LEXIN shall use reasonable diligence in the development of Product
and to introduce or cause the introduction of Product in the commercial
market at a reasonable date.
ARTICLE X - PUBLICATIONS
------------------------
LEXIN reserves the right to approve publications resulting from the
research under this Agreement in advance of submission for publication
in order to protect its proprietary technology including biological
materials, information and know-how. LEXIN shall have the final
authority to determine the scope and content of any publication
materials which contain information relating to LEXIN's proprietary
technology including identification of or reference to biological
materials supplied by LEXIN to UNIVERSITY, information and know-how.
UNIVERSITY shall submit any prepublication materials to LEXIN for
review and comment at least sixty (60) days prior to planned submission
for publication. LEXIN shall notify UNIVERSITY within thirty (30) days
of receipt of the prepublication materials of its intention to approve
or withhold approval of the publication and state the reason for doing
so; provided, however, that LEXIN shall not withhold approval for more
than thirty (30) days to provide LEXIN the opportunity to file patents
to protect its technology.
Except as otherwise provided herein, LEXIN may use the results of the
Research Program for whatever purposes it may desire.
7
<PAGE>
ARTICLE XI - STATUS OF THE PARTIES
----------------------------------
For purposes of this Agreement and in connection with any activity
of UNIVERSITY hereunder, UNIVERSITY shall at all times be an
independent contractor and not an employee or agent of LEXIN.
UNIVERSITY's activities in connection with the Research Project will be
conducted by UNIVERSITY at its own risk. UNIVERSITY shall have full
authority and responsibility for its activities under the Collaborative
Research Program. People working for UNIVERSITY under the Research
Program shall be employees, agents or students of UNIVERSITY and shall
not be employees of LEXIN.
ARTICLE XII - CONFIDENTIALITY
-----------------------------
Except as is necessary for LEXIN to practice commercially under the
rights granted herein, all proprietary information disclosed by either
party to the other hereunder shall be received by the receiving party
(including all appropriate employees, agents and independent
contractors) in strictest confidence and used solely in furtherance of
this Agreement, and shall be accorded the same degree of
confidentiality and secrecy with which the receiving party holds its
own most confidential information of a similar nature, but in no event
less than reasonable care. Such confidential information, subject to
the provisions of the Kansas Open Records Act, K.S.A. 45-201 et. seq.
-- ---
(Supp. 1987), shall not be disclosed to any persons other than: (i)
employees or agents of the receiving party or independent contractors
employed by the receiving party who have reasonable need for access to
such information in connection with the receiving party's performance
under this Agreement and who are bound to the receiving party by a
written agreement of confidentiality containing terms consistent with
those contained in this Agreement; and (ii) governmental authorities,
as required, to obtain necessary regulatory clearances. Information
shall not be deemed to be proprietary information and such restrictions
shall not apply to any such information: (a) which is, or subsequently
may become, within the knowledge of the general public, without the
fault of the receiving party, (b) which is known to the receiving
party prior to the time of receipt thereof from the disclosing party,
as shown by competent written records, (c) which is proved to have
been developed by the receiving party independently and wholly
without resort to the proprietary information of the disclosing
party, as shown by competent written records; or (d) which is
subsequently rightfully obtained from sources other than the
disclosing party and without confidential restriction in favor of
the disclosing party.
8
<PAGE>
ARTICLE XIII - ABATEMENT OF INFRINGEMENT
----------------------------------------
If at any time any third party shall infringe any unexpired patent
licensed hereunder and LEXIN or UNIVERSITY shall give notice in writing
to the other of the existence of such infringement, then LEXIN may at
its election bring suit in its own name against such infringer. Should
LEXIN bring suit in its own name, UNIVERSITY shall execute such legal
papers necessary for the prosecution of such suit as may be requested
by LEXIN, and LEXIN shall be liable for all costs and expenses of such
litigation and shall be entitled to receive and retain all recoveries
therefrom, subject to payment to UNIVERSITY of five percent (5%) of the
amount by which such recovery exceeds LEXIN's out-of-pocket expenses
for such litigation. Should LEXIN not institute suit within 120 days of
notice of the infringement, UNIVERSITY shall have the right but not the
obligation to bring suit in its own name against such infringer. Should
UNIVERSITY bring suit in its own name, LEXIN shall execute such legal
papers necessary for the prosecution of such suit as may be requested
by UNIVERSITY, and UNIVERSITY shall be responsible for all costs and
expenses of such litigation and shall be entitled to receive and retain
all recoveries therefrom.
ARTICLE XIV - NOTICES
---------------------
Any notice required under this Agreement shall be considered given
upon the earlier of: (i) when actually received at the address set
forth below; or (ii) two business days after such notice, properly
addressed and shipped overnight service, is sent by either party to the
other. The proper addresses for notice are as follows:
if to UNIVERSITY:
Wichita State University
1845 N. Fairmount Avenue
Office of Research Administration
Wichita, Kansas 67206
Attention: Harry Williford
if to LEXIN:
Lexin Pharmaceutical Corporation
Pennsylvania Business Campus
Rock Plaza III
111 Rock Road
Horsham, Pennsylvania 19044-2310
Attention: Jerry B. Hook, Ph.D.
President and Chief
Executive Officer
9
<PAGE>
with a copy to:
James A. Lebovitz, Esquire
Ballard Spahr Andrews & Ingersoll
1735 Market Street
Philadelphia, Pennsylvania 19103
ARTICLE XV - MISCELLANEOUS
--------------------------
A. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Kansas. In the event
of any dispute arising hereunder, UNIVERSITY agrees that personal
jurisdiction and venue in any suit between LEXIN and UNIVERSITY shall
be exclusively in either the United States District Court for the
District of Kansas or the Court of Common Pleas of Sedgwick County,
Kansas.
B. UNIVERSITY and LEXIN agree that each party to this Agreement
is operating as an independent contractor and not as an agent of the
other. This Agreement shall not constitute a partnership or joint
venture, and neither party may be bound by the other to any contract,
arrangement or understanding except as specifically stated herein.
C. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and as such
supersedes all previous written and oral negotiations, agreements,
contracts, representations, letters of intent, understandings and
commitments with respect thereto. This Agreement may be modified,
discharged, amended, or extended only by a writing signed by a duly
authorized representative of the parties.
D. Neither LEXIN nor UNIVERSITY shall make any news release or
other public statement, whether to the press, stockholders or
otherwise, disclosing the terms of this Agreement or of any amendment
hereto, or to performance hereunder or the existence of the arrangement
between the parties shall be originated by either LEXIN or UNIVERSITY
or their employees without the prior written approval of the other
party except as required by law.
E. The provisions found in the Contractual Provisions Attachment
(Form DA-146a), which is attached hereto as Appendix B and executed by
the parties to this Agreement, are hereby incorporated in this contract
and made a part hereof.
10
<PAGE>
IN WITNESS WHEREOF, and intending to be bound hereby, the parties
have caused this Agreement to be signed by their duly authorized
representatives,
LEXIN PHARMACEUTICAL CORPORATION
By: /s/ Jerry B. Hook
---------------------------------
Name: Jerry B. Hook
---------------------------------
Title: President
---------------------------------
Date: 23 May 1994
---------------------------------
WICHITA STATE UNIVERSITY
By: /s/ Harry G. Williford
---------------------------------
Name: Harry G. Williford
---------------------------------
Title: Director, Research Administration
---------------------------------
Date: 5/27/94
---------------------------------
AGREED TO AND ACCEPTED BY:
WILLIAM C. GROUTAS, Ph. D.
By: /s/ William C. Groutas
---------------------------------
Name: William C. Groutas
---------------------------------
Title: Endowment Assn. Distinguished
---------------------------------
Professor of Chemistry
---------------------------------
Date: May 26, 1994
---------------------------------
11
<PAGE>
APPENDIX A
RESEARCH PROGRAM
----------------
12
<PAGE>
Proposed Research
-----------------
[
]
<PAGE>
Financial Plan
The project will require per year, beginning in 1994:
[
]
<PAGE>
Amendment No. 1
to Collaborative Research and Licensing Agreement
This Amendment No 1 is made this 19th day of January, 1995 between
Lexin Pharmaceutical Corporation, Pennsylvania Business Campus,
Horsham, PA 19044-2310 ("Lexin") and Wichita State University, 1845 N.
Fairmount Avenue, Wichita, Kansas 67206-0007 ("University").
RECITALS
A. Lexin and the University entered into a Collaborative Research and
Licensing Agreement ("Agreement") dated April 1, 1994.
B. The parties desire to extend the term of the Agreement for an
additional one year term.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein, and intending to be legally bound, the
parties hereto agree as follows:
1. The term of this agreement is hereby extended to cover the
period [ ]
2. Except as expressly amended herein, all other terms and conditions
of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment No. 1 as of the date first above written.
FOR WICHITA STATE
UNIVERSITY
By: /s/ Harry E. Williford
----------------------------
Name: Harry E. Williford
----------------------------
Title: Director Research
Administration
----------------------------
FOR LEXIN PHARMACEUTICAL
CORPORATION
By: /s/ Jerry B. Hook
----------------------------
Jerry B. Hook, Ph.D.
President & C.E.O.
<PAGE>
State of Kansas Agency No.___ Contract No._____
Department of Administration
Division of Accounts and Reports
DA-1162 (Rev. 9-93)
CONTRACTUAL PROVISONS ATTACHMENT
Important: This form contains mandatory contract provisions and must be
attached to or incorporated in all copies of any contractual
agreement. If it is attached to the vendor/contractor's
standard contract from, then that form must be altered to
contain the following provision:
"The provisions found in Contractual Provisions Attachment
(form DA-146a), which is attached hereto, are hereby
incorporated in this contract and made a part hereof".
The parties agree that the following provisions are hereby incorporated
into the contract to which it is attached and made a part thereof, said
contract being the ____day of ______________________, 19_____
1. TERMS HEREIN CONTROLLING PROVISIONS
-----------------------------------
It is expressly agreed that the terms of each and every provision in
this attachment shall prevail and control over the terms of any other
conflicting provision in any other document relating to and a part of
the contract in which this attachment is incorporated.
2. AGREEMENT WITH KANSAS LAW
-------------------------
All contractual agreements shall be subject to, governed by, and
construed according to the laws of State of Kansas.
3. TERMINATION DUE TO LACK OF FUNDING APPROPRIATION
------------------------------------------------
If, in the judgement of the Director of Accounts and Reports,
Department of Administration, sufficient funds are not appropriated to
continue the function performed in this agreement and for the payment
of the charges hereunder, State may terminate this agreement at the
end of its current fiscal year. State agrees to give written notice
of termination to contractor at least 30 days prior to the end of its
current fiscal year, and shall give such notice for a greater period
prior to the end of such fiscal year as may be provided in this
contract, except that such notice shall not be required prior to 90
days before the end of such fiscal year. Contractor shall have the
right, at the end of such fiscal year, to take possession of any
equipment provided State under the contract. State will pay to the
contractor all regular contractual payments incurred through the end
of such fiscal year, plus contractual charges incidental to the return
of any such equipment. Upon termination of the agreement by State,
title to any such equipment shall revert to contractor at the end of
State's current fiscal year. Ther termination of the contract
pursuant to this paragraph shall not cause any penalty to be charged
to the agency or the contractor.
4. DISCLAIMER OF LIABLILTY
-----------------------
Neither the State of Kansas nor any agency thereof shall hold harmless
or indeminfy any contractor beyond that liability incurred under the
Kansas Tort Claims Act (K.S.A. 75-6101 et seq.).
-- ---
5. ANTI-DISCRIMINATION CLAUSE
--------------------------
The contractor agrees: (a) to comply with Kansas Act Against
Discrimination (K.S.A. 44-1001 et seq.) and the Kansas Age
-- ---
Discrimination in Employment Act (K.S.A 44-1111 et seq.) and the
-- ---
applicable provisions of the Americans with Disabilities Act (42
U.S.C. 12101 et seq.) (ADA) and to not discriminate against any person
-- ---
because of race, religion, color, sex, disability, national origin or
ancestry, or age in the admission or access to, or treatment or
employment in, its programs or activities; (b) to include in all
solicitations or advertisements for employees, the phrase "equal
opportunity employer"; (c) to comply with the reporting requirements
set out at K.S.A. 44-1031 and K.S.A. 44-1116; (d) to include those
provisions in every subcontract or purchase order so that they are
binding upon such subcontractor or vendor; (e) that a fialure to
comply with the reporting requirements of (c) above or if the
contractor is found guilty of any violation of such acts by the Kansas
Human Rights Commission, such violation shall constitute a breach of
contract and the contract may be canceled, terminated or suspended, in
whole or in part, by the contracting state agency or the Kansas
Department of Administration; (f) if it is determined that the
contractor has violated applicable provisions of the ADA, such
violation shall constitute a breach of contract and the contract may
be canceled, terminated or suspended, in whole or in part, by the
contracting state agency or the Kansas Department of Administration.
Parties to this contract understand that the provisions of this
paragraph number 5 (with the exception of those provisions relating to
the ADA) are not applicable to a contractor who employs fewer than
four employees during the term of such contract or whose contracts
with the contracting state agency cumulatively total $5,000 or less
during the fiscal year of such agency.
6. ACCEPTANCE OF CONTRACT
----------------------
This contract shall not be considered accepted, approved or otherwise
effective until the statutorily required approvals and certifications
have been given.
7. ARBITRATION, DAMAGES, WARRANTIES
--------------------------------
Notwithstanding any language to the contrary, no interpretation shall
be allowed to find the State or any agency thereof has agreed to
binding arbitration, or the payment of damages or penalties upon the
occurrence of a contingency. Further, the State of Kansas shall not
agree to pay attorney fees and late payment charges beyond those
available under the Kansas Prompt Payment Act (K.S.A. 75-6403), and no
provision will be given effect which attempts to exclude, modify,
disclaim or otherwise attempt to limit implied warranties of
merchantability and fitness for a particular purpose.
8. REPRESENTATIVE'S AUTHORITY TO CONTRACT
--------------------------------------
By signing this document, the representative of the contractor thereby
represents that such person is duly authorized by the contractor to
execute this document on behalf of the contractor and that the
contractor agrees to be bound by the provisions thereof.
9. RESPONSIBILITY FOR TAXES
------------------------
The State of Kansas shall not be responsible for, nor indemnify a
contractor for, any federal, state or local taxes which may be imposed
or levied upon the subject matter of this contract.
10. INSURANCE
---------
The State of Kansas shall not be required to purchase any insurance
against loss or damage to any personal property to which this contract
relates, nor shall this contract require the State to establish a
"self-insurance" fund to protect against any such loss or damage.
Subject to the provisions of the Kansas Tort Claims Act (K.S.A. 75-
6101 et seq.), the vendor or lessor shall bear the risk of any loss or
-- ---
damage to any personal property in which vendor or lessor holds title.
11. INFORMATION
-----------
No provisions of this contract shall be construed as limiting the
Legislative Division of Post Audit from having access to information
pursuant
Exhibit 10.72A
SPARTA PHARMACEUTICALS, INC. HAS OMITTED FROM THIS EXHIBIT 10.72A PORTIONS OF
THE AGREEMENT FOR WHICH SPARTA PHARMACEUTICALS, INC. HAS REQUESTED CONFIDENTIAL
TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE
AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED
"[ ]" AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
LICENSE AGREEMENT
between
PI RESEARCH CORPORATION
and the
TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA
for
ALPHA ANTICHYMOTRYPSIN
and
C1 ESTERASE INHIBITOR
JANUARY 2, 1992
<PAGE>
License between PI Research Corporation and the Trustees of
the University of Pennsylvania
Contents
License Agreement for Alpha-1 Antichymotrypsin
and C1 Esterase Inhibitor
Attachment A: Protatek Cooperative Research Agreement
of 10/1/87 ("Protatek CRA")
Attachment B: Protatek Alpha-1 Antichymotrypsin License
Attachment C: Protatek C1 Esterase License Agreement
Attachment D: Protatek-PIRC-Penn Assignment Agreement
of 9/6/91
Attachment E: PIRC/Penn Stock Purchase Agreement; PIRC
Charter and By-Laws
Attachment F: PIRC/Penn Collaborative Research Agreement
of 3/1/91
Attachment 1: Scope of Work and
Schedule of Payments
Attachment 2: Additional Provisions
for License Agreement
Attachment 3: Confidentiality Agreement
Attachment G: Rubin Stock Agreement
Attachment H: Rubin Consultancy Agreement
Attachment I: Cooperman Stock Agreement
Attachment J: Cooperman Consultancy Agreement
Attachment K: Schechter Stock Agreement
Attachment L: Schechter Consultancy Agreement
Attachment M: Mei-Wang Stock Agreement
Attachment N: Mei-Wang Consultancy Agreement
Attachment O: Letter Agreement among Investigators and
University
<PAGE>
Signature Version
License Agreement for
Alpha-1 Antichymotrypsin and
C1 Esterase Inhibitor
This LICENSE AGREEMENT is made as of the Second day of January,
1992 by and between THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA, a
nonprofit corporation organized and existing under the laws of the
Commonwealth of Pennsylvania (the "University"), PI Research
Corporation, a corporation organized and existing under the laws of
Delaware ("Licensee" or "Company").
R E C I T A L S
A. On October 1, 1987 Protatek International, Inc. ("Protatek"), a
company then based in Minneapolis, MN entered a cooperative research
agreement with the University for the development of human protease
inhibitors. This Agreement is appended as Attachment A and is referred
to as "Protatek CRA."
B. Dr. Harvey Rubin, an assistant professor of medicine at the
University, was the principal investigator under the Protatek CRA and
has assigned all rights, title and interest in and to the Licensed
Technology (as defined below) to the University.
C. On September 27, 1988, Protatek, which had moved to St. Paul, MN
in the intervening period, entered two License Agreements with the
University. One of these agreements was for the human protease
inhibitor, alpha-1 Antichymotrypsin (Attachment B). The second of these
agreements was for the human protease inhibitor, C1 Esterase Inhibitor
(Attachment C).
D. Protatek has offered, and the Company has accepted, an agreement
("Attachment D"), dated September 6, 1991, under which certain rights
held by Protatek virtue of the cooperative research and license
agreements in Attachments A, B, and C were assigned by Protatek to
Licensee in exchange for considerations to Protatek and University as
described in Attachment D and Stock Purchase Agreement
(Attachment E).
E. Company has undertaken and fulfilled the obligations of Protatek
to University under the cooperative research agreement in Attachment A,
which has terminated. Company and
<PAGE>
License Agreement between PI Research Corporation and Penn 2
January 2, 1992
University desire to continue cooperative research under a new
Collaborative Research Agreement with the University, dated March 1,
1991 ("Collaborative Research Agreement"), and appended as Attachment
F.
F. In order to clarify, update and expand the terms of the license
arrangements set forth in Attachments B and C, Company and University
hereby agree that this License Agreement ("Agreement") is in
substitution for and replaces the license agreements in Attachments B
and C, which agreements the parties agree shall be automatically
terminated upon execution of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE 1: DEFINITIONS
1.1 Definitions. This Agreement has several defined
-----------
terms in common with the Collaborative Research Agreement. The
following terms as set forth herein shall have the following meaning:
1.2 "Affiliate" means, when used with reference to Licensee,
----------
any person directly or indirectly controlling, controlled by or under
common control with Licensee. For purposes of this Agreement, "control"
means the direct or indirect ownership of over 50% of the outstanding
voting securities of an entity, or the right to receive over 50% of the
profits or earnings of a person, or the right to control the policy
decisions of a person.
1.3 "Bankruptcy Event" means the person in question becomes
----------------
insolvent, or voluntary or involuntary proceedings by or against such
person are instituted in bankruptcy or under such insolvency law, or a
receiver or custodian is appointed for such person, or proceedings are
instituted by or against such person for corporate reorganization or
the dissolution of such person, which proceedings, if voluntary, shall
not have been dismissed within sixty (60) days after the date of
filing, or such person makes an assignment for the benefit of
creditors, or substantially all of the assets of such person are seized
or attached and not released within sixty (60) days thereafter.
1.4 "Calendar Quarter" means each three-month period, or any
----------------
portion thereof, beginning on January 1, April 1, July 1 and October 1.
1.5 "Confidential Information" means (i) the Technical
------------------------
Information, (ii) any other information or material in tangible form
that is marked as confidential or proprietary by the furnishing party
at the time it is delivered to the receiving party, and (iii)
information that is furnished
<PAGE>
License Agreement between PI Research Corporation and Penn 3
January 2, 1992
orally if the furnishing party identifies such information as
confidential or proprietary when it is disclosed and confirms such
designation in writing within 30 days after such disclosure.
1.6 "Drug" means (i) an article intended for use in the
----
diagnosis, cure, mitigation, treatment, or prevention of disease in man
or other animals; or (ii) an article intended to affect the structure
of any function of the body of man or other animals that requires FDA
approval as a drug.
1.7 "Effective Date" means the first date when the University
--------------
and Licensee have executed this Agreement.
1.8 "Federal Government Interest" means the rights, if
---------------------------
applicable, of the United States Government under Public Laws 96-517,
97-256 and 98-620, codified at 35 U.S.C. Paragraphs 200-212, and any
regulations issued thereunder, as such statute or regulations may be
amended from time to time hereafter.
1.9 "Field" means Technical Information, technology and know-
-----
how relating to the protease inhibitors alpha-1 Antichymotrypsin and C-
1 Esterase Inhibitor, and improvements related thereto developed by Dr.
Harvey Rubin and/or any other Investigator, or University laboratory
personnel during the performance of the Collaborative Research
Agreement.
1.10 "Joint Patented Product" means anything which is made, made
----------------------
for, used or sold, which manufacture, use or sale is covered by any
Valid Claim of a Joint Patent in any country.
1.11 "Joint Patents" means patents and patent applications
---------------
together with any and all patents issuing thereupon, continuation,
divisional, and re-issue applications thereof and continuation-in-part
applications thereof claiming inventions within the Field and any
United States or foreign patents granted upon such applications based
upon inventions and improvements discovered or made by Principal
Investigator and/or any other Investigator jointly with one or more
inventors of Licensee, within the Field during the term of this
Agreement or the Collaborative Research Agreement.
1.12 "Licensed Patents" means United States Patent Applications,
------------------
Serial Numbers 370,704, "Alpha-1 Antichymotrypsin Analogues and Methods
of Production and any patent applications filed by the University on C1
Esterase Inhibitors, and related foreign patents and patent
applications, if any, together with any and all patents issuing
thereupon, including continuation, divisional and re-issue application
and continuation-in-part applications
<PAGE>
License Agreement between PI Research Corporation and Penn 4
January 2, 1992
thereof claiming inventions within the Field, and any United States or
foreign patents granted upon such applications based upon inventions
and improvements discovered by University through Dr. Harvey Rubin
and/or any other Investigator or University laboratory personnel within
the Field during the term of this Agreement or as a result of
performance of the Work Scope set forth in the Collaborative Research
Agreement between the parties.
1.13 "Licensed Product(s)" means and includes all products the
---------------------
manufacture, composition, use, sale or other disposition of which (i)
is subject to one or more Valid Claims of a Licensed Patent or (ii) is
subject to one or more Valid Claims of a Joint Patent.
1.14 "Licensed Technology" means the Licensed Patents and the
---------------------
Technical Information.
1.15 "Net Sales Price" means the gross amount charged by
-----------------
Licensee for the sale of a Licensed Product, net of returns and credits
for rejected goods, and after deducting (i) trade, quantity and cash
discounts actually allowed, (ii) sales, use or other similar taxes,
the legal incidence of which is on Licensee, and (iii) freight
allowances, packing charges, insurance and customs duties, to the
extent any of the foregoing are identified on the invoice for the
Licensed Product, and (iv) uncollectible receivables which are past
due 120 days or more. If a Licensed Product is sold for consideration
other than solely cash, the fair market value of such other
consideration shall be included in the Net Sales Price.
1.16 "Person" or "person" means any corporation, partnership,
-------- --------
joint venture or natural person.
1.17 "Principal Investigator" or "Investigators" refers
------------------------ ---------------
respectively to the Principal Investigator Harvey Rubin, M.D., Ph.D.,
Assistant Professor of Medicine at University, and to Investigators
Barry S. Cooperman, Ph.D., Professor of Chemistry, Norman Schechter,
Ph.D., Research Professor of Dermatology and Zai-Mei Wang, Ph.D.,
Research Associate Infectious Diseases, all at University.
1.18 "Sale," "sale" or any variation thereof means the sale,
--------------
assignment, lease or other disposition of a Licensed Product by
Licensee to a non-Affiliate. A Licensed Product shall be deemed to have
been sold for purposes of calculating royalties under Article III
hereof upon the first to occur of the following: (i) the transfer of
title in the Licensed Product from Licensee to a non-Affiliate; or (ii)
shipment of the Licensed Product from the manufacturing facilities of
Licensee to a non-Affiliate.
<PAGE>
License Agreement between PI Research Corporation and Penn 5
January 2, 1992
1.19 "Technical Information" means and includes all technical
-----------------------
information, trade secrets, developments, formulae, processes and other
information developed by Dr. Harvey Rubin and/or other Principal
Investigator that the University owns or possesses and that relates to
the use of alpha-1 Antichymotrypsin and/or C1 Esterase Inhibitor in the
Field, including by way of illustration and not limitation, designs,
data, drawings, documents, models, and other similar information.
"Technical Information" shall exclude any of the foregoing that are
included in a claim of the Licensed Patents.
1.20 "Valid Claim" means a claim of an unexpired Licensed Patent
-------------
that has not been withdrawn, cancelled or disclaimed or held invalid by
a court or governmental authority of competent jurisdiction in an
unappealed or unappealable decision, or a claim of a pending patent
application.
Article II: Grant of License
2.1 Licensed Technology Grant. University grants to Licensee
--------------------------
for the term of this Agreement an exclusive license, with right to
sublicense, to make, use, have made or sell Licensed Products and
products incorporating Technical Information throughout the world,
subject to the terms and conditions herein.
2.2 Exclusive but for Non-Profit Use. The license grant of this
---------------------------------
Article is exclusive but for the reserved right of the University to
use and permit the use of by non-profit organizations, without cost and
in confidence, the Licensed Patents, the Joint Patent Rights, and the
Technical Information solely for educational and research purposes on a
non-commercial basis, subject to the prior written consent of Licensee
for each such use, such consent not to be unreasonably withheld.
2.3 Right to Sublicense. The right to sublicense conferred upon
--------------------
Licensee under this Agreement is subject to the following conditions:
(a) Licensee shall forward to the University, promptly upon
execution, a complete and accurate written copy of each sublicense
granted hereunder.
(b) In each sublicense, the sublicensee shall be prohibited from
further sublicensing and shall acknowledge that it is subject to the
terms and conditions of the License granted to Licensee under this
Agreement.
(c) Notwithstanding any such sublicense, Licensee shall remain
primarily liable to the University for all of the Licensee's duties and
obligations contained in this
<PAGE>
License Agreement between PI Research Corporation and Penn 6
January 2, 1992
Agreement, and any act or omission of a sublicensee which would be a
breach of this Agreement if performed by Licensee shall be deemed to be
a breach by Licensee of this Agreement.
(d) If Licensee becomes subject to a Bankruptcy Event, all payments
then or thereafter due and owing to Licensee from its sublicensees
shall upon notice from the University to any such sublicensee become
payable directly to the University for the account of the Licensee;
provided however, that the University shall remit to Licensee the
amount by which such payments exceed the amounts owed by licensee to
the University.
2.4 No Riqhts by Implication. No rights or licenses with
-------------------------
respect to the Licensed Technology are granted or deemed granted
hereunder or in connection herewith, other than those rights or
licenses expressly granted in this Agreement.
2.5 Federal Government Interest. Licensee acknowledges that in
----------------------------
accordance with the Federal Government Interest, the United States
Government retains certain rights in inventions funded in whole or in
part under any contract, grant or similar agreement with a Federal
agency. The license to the Licensed Technology granted under this
Article II is expressly subject to all such rights.
Article III: Royalties
3.1 License Fee. In consideration of the Assignment Agreement
------------
in Attachment D, Licensee has issued, on the Effective Date of this
Agreement, common shares in the Licensee to the following parties:
(a) To University a grant of [ ] shares subject to the terms
and conditions described in Attachment E ("University Stock Purchase
Agreement"), such shares constituting an [ ] fully
diluted interest in the Licensee at the Effective Date of this
Agreement;
(b) To Dr. Harvey Rubin an opportunity to
purchase [ ] subject to the terms and conditions
as described in Attachment G ("Rubin Stock Agreement) and Attachment H
("Rubin Consultancy Agreement"), such shares
constituting a [ ] fully diluted interest in
the Licensee at the Effective Date of this Agreement;
(c) To Dr. Barry Cooperman, University Professor of Chemistry and
Investigator, an opportunity to purchase
[ ] shares subject to the terms and conditions described in
Attachment I ("Cooperman Stock Agreement") and Attachment
<PAGE>
License Agreement between PI Research Corporation and Penn 7
January 2, 1992
J ("Cooperman Consultancy Agreement"), such shares constituting a
[ ] fully diluted interest in the Licensee as of
the Effective Date of this Agreement;
(d) To Dr. Norman Schechter, University Research Professor of
Dermatology and Investigator, an opportunity to
purchase [ ] shares subject to the terms and conditions
described in Attachment K ("Schechter Stock Agreement") and
Attachment L ("Schechter Consultantancy Agreement") such
shares constituting a [ ] fully
diluted interest in the Licensee as of the Effective Date of this
Agreement;
(e) To Dr. Zhai-Mei Wang, University Research Associate for
Infectious Disease and Investigator an
opportunity to purchase [ ] shares subject to the terms
and conditions described in Attachment M ("Wang Stock
Agreement") and Attachment N ("Wang Consultancy Agreement"), such
shares constituting a [ ] fully diluted interest
in the Licensee as of the Effective Date of this Agreement;
(f) The provisions of this paragraph 3.1 are further accepted by
the Investigators in the letter agreement appearing in Attachment O.
(g) No additional up-front payment or fee upon execution of this
Agreement is due to the University by Licensee.
3.2 Royalties. In consideration of the exclusive Licensed
---------
Technology grant herein, Licensee shall pay royalties to the University
on the following basis:
(a) Licensee shall pay to University a royalty of [ ]
of the Net Sales Price of each Licensed Product sold by Licensee,
and, subject to Section 3.11, such royalty rate shall not be subject
to reduction by Licensee if Licensee must acquire, for any reason,
patent rights from third parties in order to practice Licensed
Technology or sell Licensed Products.
(b) Licensee shall be exempt from the payment of royalties for sale
of products that incorporate Technical Information, provided such
products do not incorporate Licensed Patents. Royalty free sales of
such products incorporating only Technical Information shall not apply
if Licensee, University, Principal Investigators and Investigators
agree in writing that Technical Information disclosed by University to
Licensee, which is otherwise patentable, shall be maintained as a trade
secret. In such
<PAGE>
License Agreement between PI Research Corporation and Penn 8
January 2, 1992
case a product incorporating such trade secret shall bear
the royal described in Section 3.2 herein for the lesser
of [ ] years following first commercial sale of
such product(s), or for as long as such Technical Information is
maintained as a trade secret.
(c) Licensee shall pay to the University the lesser of
[ ] of all royalties, license fees, advances and other
payments (however characterized) received by Licensee pursuant to a
sublicense of any rights granted Licensee hereunder, or [ ]
of such sublicensee's Net Sales for such Licensed Products sold by
such sublicenses. Any noncash consideration received by the Licensee
from sublicensees in lieu of a license fee or on account of sales of
Licensed Product shall be valued at its fair market value as of the
date of receipt. Monies paid to Licensee exclusively to fund research
and development or clinical testing are not subject to any royalty to
the University.
(d) Sales of any Licensed Product shall not be subject to more than
one assessment of the [ ] royalty due University,
regardless of the number of Licensed Patents or Joint Patents, or
uses of Technical Information treated as trade secret, that are
applicable to such Licensed Product.
3.3 Diligence Obligations of Licensee
---------------------------------
(a) In lieu of diligence fees paid to the University, Licensee
agrees to fund, until such time as minimum royalties are due under
Section 3.4 hereunder, development of Licensed Technologies in annual
amounts substantially similar to the annual budgeted amount of the
Collaborative Research Agreement. Such development work may
be funded at the University, in the facilities of the
Licensee, in the facilities of a sublicensee, or in other venue
reasonably capable of conducting such development. Licensee may
employ its own capital, or governmental or commercial contract
revenues in fulfillment of this obligation. Funds expended by a
sublicensee, and appropriately documented and reported, shall also
be applicable to this obligation of Licensee.
(b) In order to fulfill its obligations under 3.3(a) herein through
February 29, 1992, Licenses shall support research at the University
under the terms of the Collaborative Research Agreement and in such
amounts as described in the budget of the Collaborative Research
Agreement.
3.4 Minimum Royalties. Licensee shall pay to Licensor as a
-----------------
nonrefundable advance against royalties during the ensuing year,
minimum annual royalties on the following
<PAGE>
License Agreement between PI Research Corporation and Penn 9
January 2, 1992
dates in the corresponding amounts (the "Minimum Royalties"):
Minimum Royalty Fiscal Year Beginning
$ [ ] July 1, 1997
--
$ [ ] July 1, 1998
--
$ [ ] July 1, 1999
--
$ [ ] July 1 of each fiscal
year thereafter
Minimum royalties shall be available for full credit against Royalties
due under Section 3.2 during the year in which such Minimum Royalties
are paid and during subsequent years until the amount of the credit is
fully used. In any year that a minimum royalty is due, if the Licensee
sponsors research at the University in the Field under the Principal
Investigator during that year, the full amount of research funding paid
may be applied as a credit against minimum royalties due in that year
and in subsequent years until the full amount of credit is fully used.
3.5 Sales to Federal Government. To the extent required by the
---------------------------
Federal Government Interest, sales by Licensee to the United States
Government shall not be subject to royalty.
3.6 Payments. Royalties payable under Section 3.2 hereof shall
--------
be paid within (30) days following the last day of the Calendar Quarter
in which the royalties accrue. After termination of this Agreement, the
final royalty payment shall be made in accordance with the provisions
of Article 9.4 hereof. Payments may be deemed paid as of the day on
which they are received at the account designated pursuant to Article
3.8.
3.7 Reports. Licensee shall deliver to the University within
-------
thirty (30) days after the end of each Calendar Quarter a report,
certified by the chief financial officer of Licensee, setting forth in
reasonable detail the calculation of the royalties payable to the
University for such Calendar Quarter, including, without limitation,
the Licensed Product sold in each country during such Calendar Quarter,
the Net Sales Price thereof, all compensation received from
sublicensees, and the amount of Minimum Royalties available for credit
for the corresponding Calendar Quarter.
3.8 Currency, Place of Payment, Interest.
------------------------------------
(a) All dollar amounts referred to in this Agreement are expressed
in United States dollars. All payments to the University under this
Agreement shall be made in United States dollars (or other legal
currency of the United States) by check payable to "The Trustees of the
University of Pennsylvania."
<PAGE>
License Agreement between PI Research Corporation and Penn 10
January 2, 1992
(b) If Licensee receives revenues from sales of Licensed Products
in a currency other than United States dollars, royalties shall be
converted into United States dollars at the conversion rate for the
foreign currency as published in the Eastern edition of The Wall Street
---------------
Journal as of the last date of the Calendar Quarter. If at any time
--------
legal restrictions prevent the prompt remittance of part or all
royalties by Licensee or any sublicensee with respect to any country
where a Licensed Product is sold, Licensee or such sublicensee shall
have the right and option to make such payments by depositing the
amount thereof in local currency to the University's account in a bank
or other depository in such country; provided, however, that if such
legal restrictions are not removed within one (1) year after the date
such account is established, Licensee shall then remit promptly to the
University an amount in United States dollars equal to the deferred
royalties held in such account. Upon receipt of these deferred
royalties by the University, Licensee shall be entitled to transfer to
its own account all corresponding amounts held on behalf of the
University in the local bank or depository.
(c) Amounts that are not paid when due shall accrue interest from
the due date until paid, at a rate equal to then prevailing prime rate
of interest plus [ ]. The University may treat
unpaid payments as a breach of this Agreement notwithstanding the
payment of interest.
3.9 Records. Licensee will maintain and cause its sublicensees
-------
to maintain, complete and accurate books and record which enable the
royalties payable hereunder to be verified. The records for each
Calendar Quarter shall be maintained for five years after the
submission of each report under Section 3.7 hereof. Upon reasonable
prior notice to Licensee, the University and its accountants shall
have access to the books and records of Licensee and its sublicensees
to conduct a review or audit thereof. Such access shall be available
not more than once each calendar year, during normal business hours,
and for three years after the expiration or termination of this
Agreement. If the University determines that Licensee has underpaid
royalties by 10% or more, Licensee will pay the costs and expenses of
the University's accountant in connection with its review or audit.
3.10 Duration of Royalty Obligations. Except as described in
-------------------------------
Section 3.2(b) herein, Licensee's royalty obligations for a Licensed
Product shall terminate on a [
]
<PAGE>
Licenee Agreement between PI Research Corporation and Penn 11
January 2, 1992
[
]
3.11 Mandatory Licensing. In the event that Licensee is
-------------------
required by judgment, final order, or agreement with a third party to
settle litigation, to acquire one or mere royalty-bearing licenses from
a third party in order to fully exercise in a given country the rights
granted by the University hereunder, then Licensee shall be entitled to
credit an amount equal to [ ] of the royalties
actually paid to such a third party against royalties payable to the
University under Section 3.2 hereof for Licensed Products sold in
that country, provided however that for any calendar quarter such
credits do not exceed [ ] of the royalties
payable to the University in such calendar quarter.
3.12 Cumulative Credits. Under no circumstances shall Licensee
------------------
be entitled to receive credits against royalties payable to the
University under Section 3.2 hereof that, for any Calendar Quarter,
exceed in the aggregate [ ] of the
royalties payable to the University under that section in such
calendar quarter. This provision does not apply to credits under
Sections 3.4 and 7.2(e but otherwise applies to any credit Licensee
may receive without limitation, under Sections 3.11, 6.3 or 7.1(d)
hereof.
3.13 Unlicensed Sales by Third Parties. In the event that the
---------------------------------
total sales of any Licensed Product in any country by unlicensed third
parties, based on bona fide information reporting such revenue by an
unlicensed third party, equals or exceeds [ ] of
the total revenue of Licensee, its Affiliates and its
sublicensees for sale of such Licensed Product in said country,
then the royalty rate provided in Section 3.2 hereof for such
Licensed Product in such country shall be reduced to [ ]
such royalty rate for Calendar Quarters so affected. This provision
shall have no effect if Licensee fails to use reasonable efforts to
terminate such unlicensed sales.
Article IV: Certain Obligations of the Licensee
4.1 Licensee Efforts; Reporting.
---------------------------
(a) Licensee shall use its best efforts to develop
for commercial use and to market Licensed Products as soon as
practicable, consistent with sound and reasonable business practices.
In this connection, the parties acknowledge that the Licensed
Technology has only recently been invented and that substantial
additional effort, expense and time, as well as regulatory approval,
will be required before manufacture and sales of any Licensed Product
will be possible.
<PAGE>
License Agreement between PI Research Corporation and Penn 12
January 2, 1992
(b) Licensee shall provide the University on each June 1 and
December 1 with written reports, setting forth in such detail as the
University may reasonably request, the progress of the development,
evaluation, testing and commercialization of the Licensed Products.
Licensee also shall notify the University within thirty (30) days after
the first commercial sale of a Licensed Product.
4.2 Compliance with Laws.
--------------------
(a) Licensee shall comply with all prevailing
laws, rules and regulations pertaining to the development, testing,
manufacture, marketing and import or export of the Licensed Products.
Without limiting the foregoing, Licensee acknowledges that the transfer
of certain commodities and technical data is subject to United States
laws controlling the export of such commodities and technical data,
including all Export Administration Regulations of the United States
Department of Commerce. These laws and regulations, among other things,
prohibit or require a license for the export of certain types of data
to specified countries. Licensee will comply with all United States
laws and regulations controlling the export of commodities and
technical data, and will be solely responsible for any violation
thereof by License~e of its sublicensees.
(b) To the extent required by the Federal Government Interest, all
Licensed Products to be used or sold in the United States shall be
manufactured substantially in the United States, and Licensee shall
take such actions necessary to assure that it and its sublicensees
comply with the obligations imposed by this Section 4.2(b).
4.3 Government Approvals. Licensee will be responsible for
--------------------
obtaining at its cost and expense, all governmental approval required
to commercially market the Licensed Products.
4.4 Patent Notices, etc. Licensee shall mark the Licensed
-------------------
Products sold in the United States with all applicable patent numbers.
All Licensed Products shipped to and sold/or sold in other countries
shall be marked and labeled in such a manner as to conform with all
applicable laws of the country where the Licensed Products are sold.
4.5 Security Interest. In consideration of the license and
-----------------
other rights granted in this Agreement, Licensee hereby grants to the
University a security interest in any interest Licensee may have in the
Licensed Technology to secure performance of Licensee's obligations
under this Agreement. Upon default by Licensee or if Licensee becomes
subject to a Bankruptcy Event, the University shall have all the rights
and remedies of a secured party under the Uniform Commercial Code.
Licensee shall execute any such instruments
<PAGE>
License Agreement between PI Research Corporation and Penn 13
January 2, 1992
or documents as shall be required to evidence and perfect such security
interest in any jurisdiction.
Article V: Warranties and Representations
5.1 Representations and Warranties of the University. The
------------------------------------------------
University represents and warrants to the Licensee that: (a) this
Agreement, when executed and delivered by the University, will be the
legal, valid and binding obligation of the University, enforceable
against the University in accordance with its terms; (b) the University
has not granted rights in or to the Licensed Technology to any person
other than the Licensee, except to the extent provided by Federal
Government Interest; (c) the University does not have any knowledge
that the Licensed Technology infringes the proprietary rights of any
third party; and (d) the University does not have any knowledge of any
patent or other proprietary technology of the University other than the
Licensed Patents and the Technical Information which would be required
to make, have made, use and sell the Licensed Products and to practice
under the Licensed Technology in connection therewith. However, the
University gives no representation or warranty that any patent within
the Licensed Patents will be granted or, if granted, that any such
patent will be valid. The representations and warranties in clauses
(b), (c), and (d) hereof are to the knowledge of the University, based
upon conversations with certain officials of the University. The
University has made no independent investigation, examination or review
of the matters which are subject to the foregoing representations.
5.2 Representations and Warranties of Licensee.
------------------------------------------
Licensee represents and warrants to the University as follows:
(a) Licensee is a corporation duly organized, validly existing and
in good standing under the laws of Delaware, and has all requisite
corporate power and authority to execute, deliver and perform this
Agreement;
(b) this Agreement, when executed and delivered by Licensee, will
be the legal, valid and binding obligation of Licensee, enforceable
against Licensee in accordance with its terms; and,
(c) the execution, delivery and performance of this Agreement by
Licensee does not conflict with, or constitute a breach or default
under, (i) the charter documents of Licensee, (ii) any law, order,
judgment or governmental rule or regulation applicable to Licensee, or
(iii) any provision of any material agreement, contract, commitment or
instrument to which Licensee is a party; and the execution, delivery
and performance of this Agreement by Licensee does not require the
consent, approval or
<PAGE>
License Agreement between PI Research Corporation and Penn 14
January 2, 1992
authorization of, or notice, declaration, filing or registration with,
any governmental or regulatory authority.
Article VI:Limitation on Liability and Indemnification
6.1 No Warranties; Limitation on Liability. EXCEPT AS
--------------------------------------
EXPLICITLY SET FORTH IN SECTION 5.1 HEREOF, THE LICENSED TECHNOLOGY IS
PROVIDED ON AN "AS IS" BASIS AND THE UNIVERSITY MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE
LICENSED TECHNOLOGY OR THE LICENSED PRODUCTS. BY WAY OF EXAMPLE BUT NOT
OF LIMITATION, THE UNIVERSITY MAKES NO REPRESENTATIONS OR WARRANTIES
(i) OF COMMERCIAL UTILITY, (ii) OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR (iii) THAT THE USE OF THE LICENSED TECHNOLOGY
WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER
PROPRIETARY RIGHT OR PROPERTY RIGHTS OF OTHERS. THE UNIVERSITY SHALL
NOT BE LIABLE TO LICENSEE, LICENSEE'S SUCCESSORS OR ASSIGNS OR ANY
THIRD PARTY WITH RESPECT TO ANY CLAIM ON ACCOUNT OF, OR ARISING FROM,
THE USE OF INFORMATION IN CONNECTION WITH THE LICENSED TECHNOLOGY
SUPPLIED HEREUNDER OR THE MANUFACTURE, USE OR SALE OF LICENSED PRODUCTS
OR ANY OTHER MATERIAL DERIVED THEREFROM. THE UNIVERSITY SHALL NOT BE
LIABLE TO LICENSEE OR ANY OTHER PERSON FOR ANY LOSS OF PROFITS, LOSS OF
BUSINESS OR INTERRUPTION OF BUSINESS, OR FROM ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND INCURRED BY LICENSEE OR ANY OTHER
PERSON WHETHER UNDER THIS AGREEMENT OR OTHERWISE, EVEN IF THE
UNIVERSITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS.
6.2 Licensee Indemnification. Licensee will defend, indemnify
------------------------
and hold harmless the University, its trustees, officers, faculty,
agents and employees, and students (collectively, the "Indemnified
Parties") from and against any and all liability, loss, damage, action,
claim or expense suffered or incurred by the Indemnified Parties
(including reasonable attorney's fees) (individually, a "Liability"
and collectively, the "Liabilities") which results from or arises out
of (a) the development, use, manufacture, promotion, sale, or other
disposition of the Licensed Technology and any Licensed Products, or
information, results or inventions arising from the Collaborative
Research Agreement by Licensee, its Affiliates, assignees,
sublicenses, vendors or other third parties; (b) breach by Licensee
of any covenant or agreement contained in this Agreement or the
Collaborative Research Agreement; (c) Licensee's use of the Research
Inventions or any results of the Collaborative Research conducted
under the Collaborative Research Agreement and (d) the successful
enforcement by an Indemnified Party of its rights under this Section
6.2. Without limiting the foregoing, Licensee will indemnify and hold
harmless the Indemnified Parties from and against any Liabilities
resulting from:
<PAGE>
License Agreement between PI Research Corporation and Penn 15
January 2, 1992
(i) any product liability or other claim of any kind related to the
use by a third party of a Licensed Product that was manufactured, sold
or otherwise disposed of by Licensee, its Affiliates, assignees,
sublicensees, vendors or other third parties;
(ii) a claim by a third party that the Licensed Technology or the
design, composition, manufacture, use, sale or other disposition of any
Licensed Product infringes or violates any patent, copyright, trademark
or other intellectual property rights of such third party; and
(iii) clinical trials or studies conducted by or on behalf of
Licensee relating to the Licensed Products, including, without
limitation, any claim by or on behalf of a human subject of any such
clinical trial or study, any claim arising from the procedures
specified in any protocol used in any such clinical trial or study, any
claim or deviation, authorized or unauthorized, from the protocols of
any such clinical trial or study, and any claim resulting from or
arising out of the manufacture or quality control by a third party of
any substance administered in any clinical trial or study.
6.3 Procedures. The Indemnified Party shall promptly notify
----------
Licensee of any claim or action giving rise to a Liability subject to
the provisions of Section 6.2. Licensee shall have the right to defend
any such claim or action, at its cost and expense. Licensee shall not
settle or compromise any such claim or action in a manner that imposes
any restrictions or obligations on the University or grants any rights
to the Licensed Technology, without the University's written consent
which consent shall not be unreasonably withheld. If Licensee fails or
declines to assume the defense of any such claim or action within
thirty (30) days after notice thereof, the University may assume the
defense of such claim or action for the account and at the risk of the
Licensee. Licensee shall pay promptly to the Indemnified Party any
Liabilities to which the foregoing indemnity relates, as incurred. The
indemnification rights of the University or other Indemnified Party
contained herein are in addition to all other rights which such
Indemnified Party may have at law or in equity or otherwise.
Notwithstanding the foregoing, in the event of settlement, judgment or
other final resolution of a claim by a third party under Section 6.2
(ii) hereof requiring Licensee to pay royalties to such third party for
Licensed Products sold in a given country, Licensee shall have the
right to credit the full amount of such payment against the royalties
payable to the University under Section 3.2 for sales of Licensed
Products in such country, provided however, that for any calendar
quarter such credits do not exceed fifty percent (50%) of the royalties
payable to the University in
<PAGE>
License Agreement between PI Research Corporation and Penn 16
January 2, 1992
such Calendar Quarter. Unused credits may be applied in subsequent
quarters until the credit is fully used.
6.4 Product Liability Insurance. Beginning with the
---------------------------
commencement of human clinical trials and, for ten (10) years after
Licensee ceases manufacturing and marketing the Licensed Products,
Licensee shall maintain general and product liability insurance in
amounts not less than $2,000,000 per incident and $2,000,000 in the
aggregate, issued by an insurance company rated A or better and naming
the University as an additional insured. The minimum insurance amounts
specified herein shall not be deemed a limitation on Licensee's
indemnification liability under this Agreement. Licensee shall provide
the University with copies of the endorsements to such policies, upon
request of the University. Licensee shall notify the University at
least thirty (30) days prior to cancellation of any such coverage. The
University shall receive a royalty on any insurance award constituting
compensation to Licensee for lost profits on the sale of Licensed
Products.
Article VII: Patents and Infringement
7.1 Prosecution of Patents.
----------------------
(a) The University shall be responsible for and
shall control the preparation, prosecution and maintenance, both
domestic and foreign, of the Licensed Patents and any other rights
included in the Licensed Technology. Licensee shall have the right, at
its own expense, to review and comment upon all patent filings, office
actions and related submissions within such time limits as University
shall reasonably impose in any given instance. Licensee shall reimburse
the University for all documented expenses (including legal fees,
filing and maintenance fees or other governmental charges) incurred
subsequent to the Effective Date of this Agreement in connection with
the filing, prosecution and maintenance of the Licensed Patents or
other Licensed Technology.
(b) Licensee and the University shall mutually determine the
countries, both domestic and foreign, where the Licensed Patents will
be prosecuted and maintained. If Licensee declines to pay for patent
preparation and filing, prosecution and maintenance costs in any
jurisdiction, the University may do so at its cost and expense but such
patents shall be excluded from the definition of Licensed Patents.
(c) If the University elects not to file, prosecute or maintain any
patent or patent application included in the Licensed Patents, it shall
notify Licensee at least sixty (60) days prior to taking, or not
taking, any action which would result in abandonment, withdrawal, or
lapse of such patent or patent application. Licensee shall
<PAGE>
License Agreement between PI Research Corporation and Penn 17
January 2, 1992
then have the right to file, prosecute or maintain the patent or patent
application.
(d) Licensee may credit against running royalty payments due under
Section 3.2 herein one hundred percent (100%) of any amount reimbursed
to University or paid directly by Licensee for the filing, prosecution
or maintenance of Licensed Patents in the United States or other
foreign jurisdictions. Such credits are subject to the limitations of
Section 3.12, but Licensee may apply unused credits from quarter to
quarter until such credits are used.
(e) Each party shall cooperate with the other party to execute all
lawful papers and instruments and to make all rightful oaths and
declarations as may be necessary in the preparation and prosecution of
all such patents and other applications and protections referred to in
this Section 7.1.
7.2 Ownership. The University shall retain all right, title and
---------
interest in and to the Licensed Patents or other Licensed Technology.
Licensee shall have the right, but not the obligation, to enforce the
Licensed Patents and to prosecute any infringement of the Licensed
Patents at its own expense. In such an event, the University shall
cooperate with Licensee, at Licensee's expense. Licensee shall not
settle or compromise any such suit in a manner that imposes any
obligations or restrictions on the University or grants any rights to
the Licensed Technology, without the University's written consent which
consent shall not be unreasonably withheld.
(b) If Licensee fails to prosecute such infringement within ninety
(90) days after receiving notice thereof, the University shall have the
right, but not the
-
obligation, to prosecute such infringement at its own expense. In such
event, Licensee shall cooperate with the University, at the
University's expense.
(c) Any recovery obtained by the prosecuting party as a result of
such proceeding, by settlement or otherwise, shall be applied first to
reimburse the expenses of the litigation, dollar for dollar, incurred
by each of the Licensee or the University, if the University has
incurred such expenses as prosecuting party or has been subject to
royalty credits under 7.2(e) herein. Three-fourths of any remaining
funds shall be paid to the prosecuting party, and one-fourth to the
other party, be it the Licensee or the University as the case may be.
(d) In the event that a claim or suit is asserted or brought
against Licensee that the manufacture or sale of the Licensed Product
by Licensee or its Affiliates,
<PAGE>
License Agreement between PI Research Corporation and Penn 18
January 2, 1992
subsidiaries, or sublicensees, or the use of the Licensed Product by
any customer of the foregoing entities infringes a patent or patents of
a third party, Licensee shall give written notice of such claim or suit
to the University. Licensee may in its sole discretion decide to change
or modify the Licensed Product to avoid such infringement or, if no
such change is made, to settle on terms that Licensee deems in its sole
discretion right and proper, subject to subsection (g) below.
Otherwise, Licensee shall have the right, but not the obligation, to
defend any such claims or suit for infringement brought against it by
the third party and if required by law or if requested by University,
to join University as a party defendant. In the event Licensee elects
not to defend such claim or suit, the University shall have the option
to defend such claim or suit.
(e) In the event Licensee (i) initiates an action to enforce
Licensed Patents or (ii) defends a suit for infringement, Licensee may
credit against royalties due under this Agreement an amount equal to up
to fifty percent(50%) of expenses incurred but not recovered in
bringing such action or defending such suit. Licensee will make an
accounting of all such expenses as part of its reporting obligations
under Article 3. The limitations on the use of royalty credits as
described in Paragraph 3.12 shall not apply to credits granted under
7.2(e) herein. Unused credits in any given Calendar Quarter may be
carried into subsequent quarters until all credits are used.
(f) Licensee shall have the sole right in accordance with the terms
and conditions herein to sublicense any alleged infringer of the
Licensed Patents to prevent future infringements. Amounts received from
any such sublicensee constituting retroactive royalties shall be
considered amounts received in settlement and accounted for under
Section 7.2(c) above. Otherwise, amounts received from such sublicensee
shall be treated as sublicense revenues under Section 3.2(c) above.
(g) Licensee shall not compromise or settle any claim or action in
any manner that would affect the rights of the University without the
consent of the University. The University shall not compromise or
settle any claim or action in any manner that would affect the right of
the Licensee without the consent of Licensee.
(h) Nothing contained in this Section 7.2 shall be deemed to limit
in any way Licensee's indemnification obligations under Sections 6.2
and 6.3 of this Agreement.
7.3 Certain Notices. Licensee shall notify the University at
---------------
least sixty (60) days before the Licensee uses or exports the Licensed
Technology or any Licensed Product in or to any country outside of the
United States, to allow
<PAGE>
License Agreement between PI Research Corporation and Penn 19
January 2, 1992
the University to make any patent filings or to take other actions
necessary to protect the Licensed Technology.
Article VIII: Confidentiality
Confidentiality.
---------------
(a) During the term of this Agreement and for a
period of [ ] thereafter, Licensee and its
sublicensees shall maintain in confidence and shall not disclose to
any third party the Confidential Information received pursuant to the
Agreement, without the prior written consent of the University. The
foregoing obligation shall not apply to:
(i) information that is known to Licensee or independently
developed by Licensee prior to the time of disclosure, in each case, to
the extent evidenced by written records promptly disclosed to the
University upon receipt of the Confidential Information;
(ii) information disclosed to Licensee by a third party that has a
right to make such disclosure;
(iii) information that becomes patented, published or otherwise
part of the public domain as a result of acts by the University or a
third person obtaining such information as a matter of right; or
(iv) information that is required to be disclosed by order of the
U.S. Food and Drug Administration or similar authority or a court of
competent jurisdiction; provided that the parties shall use their best
efforts to obtain confidential treatment of such information by the
agency or court.
(b) Licensee will take all reasonable steps to protect the
Confidential Information of the University with the same degree of care
Licensee uses to protect its own confidential or proprietary
information. Without limiting the foregoing, Licensee shall ensure that
all of its employees having access to the Confidential Information of
the University are obligated to abide by Licensee's obligations
hereunder.
(c) The University shall not be obligated to accept any
Confidential Information of the Licensee. If Licensee desires to
furnish any such Confidential Information to any University personnel,
Licensee may request such individual to sign a confidentiality
agreement with Licensee in the form of Attachment 3 to Attachment F
hereto. The University bears no institutional responsibility
<PAGE>
License Agreement between PI Research Corporation and Penn 20
January 2, 1992
for maintaining the confidentiality of any Confidential Information of
Licensee.
8.2 Publication.
-----------
(a) Licensee acknowledges that the basic
objective of research and development activities of the University is
the generation of new knowledge and its expeditious dissemination. To
further that objective, the University retains the right, at its
discretion, to demonstrate, publish or publicize a description of the
Licensed Technology and any results of research conducted by the
University with the Licensed Technology, subject to the provisions of
clauses (b) and (c) below.
(b) Should the University desire to disclose publicly, in writing
or by oral presentation, Confidential Information related to the
Licensed Technology for which a patent application has not been filed,
the University shall notify Licensee in writing of its intention at
least thirty (30) days before submission of such material that would
make such disclosure. The University shall include with such notice a
description of the oral presentation or, in the case of a manuscript or
other proposed written disclosure, a current draft of such written
disclosure. Licensee may request the University, no later than thirty
(30) days following the receipt of the University's notice, to file a
patent application, copyright or other appropriate form of intellectual
property protection related to the information to be disclosed. All
such filings shall be subject to the provisions of Section 7.1 of this
Agreement. Upon receipt of such request, the University shall arrange
for a short delay in publication, not to exceed sixty (60) days, to
permit filing of a patent or other application by the University, or if
the University declines to file such application, to permit Licensee to
make such a filing. If University receives no such request from
Licensee to delay submission of material making such disclosure,
University may submit such material for publication or presentation
provided that University first confirms in a reasonable way that
Licensee has received and reviewed such materials.
(c) If the University desires to demonstrate, publish or publicize
Confidential Information related to the Licensed Technology that is not
patentable in the United States, and Licensee objects to such proposed
disclosure within the time period specified in clause (b) above, the
parties will negotiate in good faith to determine whether the proposed
disclosure can be modified or withheld, consistent with the objectives
of each party. In no event shall the University be prohibited from
proceeding with any such publication.
Use of Name. Nothing contained in this Agreement shall be construed
-----------
as conferring any right to use any name,
<PAGE>
License Agreement between PI Research Corporation and Penn 21
~
January 2, 1992
trade name, trademark, or other designation of either party hereto
(including any contraction, abbreviation or simulation of any of the
foregoing), or the name of any trustee, director, officer or employee
thereof, without the express prior written approval of the affected
party, except where, upon advice of counsel, such use is required to
comply with any law or regulation of a governing body having
jurisdiction over a party or over the making, using or selling of a
Licensed Product. Each party hereto further agrees not to use or refer
to this Agreement or any license granted hereunder in any promotional
activity associated with Licensed Products, without the express prior
written approval of the other party.
Article IX: Term and Termination
9.1 Term. This Agreement and the license granted herein shall
----
commence on the date first set forth above and shall continue, subject
to earlier termination under Sections 9.2 or 9.3 hereof, [ ]
9.2 Termination by the University.
-----------------------------
(a) Upon the occurrence of any of the events set
forth below ("Events of Default"), the University shall have the right
to terminate this Agreement by giving written notice of termination,
such termination effective as described in each event:
(i) nonpayment of any amount payable to the
University that is continuing [ ] calendar days
after the University gives licensee written notice of such
nonpayment;
(ii) breach by Licensee of any covenant (other than a payment
breach referred to in clause (i) above) or any representation or
warranty contained in this Agreement that is continuing [ ] calendar
days after the University gives Licensee written notice of such breach;
notwithstanding the foregoing, if Licensee violates the laws,
regulations or other legal authority in any jurisdiction relating to
the development, use, storage, or marketing of the Licensed Products in
a way that the University deems in its reasonable judgment to
constitute a public safety or health hazard, the University may
immediately terminate the license hereunder in the applicable
jurisdiction, but the remainder of the Agreement shall continue in all
other jurisdictions.
(iii) Licensee fails to comply with the terms of the license
granted under Section 2.1 hereof and such noncompliance is continuing
[ ] calendar days
<PAGE>
License Agreement between PI Research Corporation and Penn 22
January 2, 1992
after the University gives Licensee notice of such noncompliance;
(iv) Licensee becomes subject to a Bankruptcy Event;
(v) the dissolution or cessation of operations by Licensee.
(b) No exercise by the University of any right of termination shall
constitute a waiver of any right of the University for recovery of any
monies then due to it hereunder or any other right or remedy the
University may have at law or under this Agreement.
9.3 Termination by Licensee. Licensee shall have the right to
-----------------------
terminate this Agreement, at any time and with or
without cause, [ ] written notice to the University.
9.4 Rights and Duties Upon Termination. Within thirty (30) days
----------------------------------
after termination of this Agreement, each party shall return to the
other party any Confidential Information of the other party. Licensee
shall provide the University with a written inventory of all Licensed
Products in process of manufacture or in stock, and Licensee (and its
Affiliates and sublicensees) shall have the privilege of disposing of
such Licensed Products in process of manufacture or in stock at the
time notice of termination is served, provided, however, that Licensee
shall pay royalties on any Net Sales of such Licensed Products at the
rate and at the time herein provided and shall render reports thereon
in the manner herein provided.
9.5 Sublicenses. Any sublicense granted by Licensee under
-----------
Sections 2.1 and 2.3 of this Agreement may survive termination in
accordance with the terms of such sublicense, provided however, that
such sublicensee becomes the direct licensee of the University.
9.6 Provisions Surviving Termination. Licensee's obligation to
--------------------------------
pay any royalties accrued but unpaid prior to termination of this
Agreement shall survive such termination. In addition, Sections 2.5,
3.8, 3.9, 7.1, 7.2, 8.1. 8.3, 9.4, 9.5, 9.6, 9.7, 10.1, 10.5 and
Articles 5 and 6 and any other provisions required to interpret the
rights and obligations of the parties arising prior to the termination
date shall survive expiration or termination of this Agreement.
9.7 Notification and Authorization under Drug Price Competition
-----------------------------------------------------------
and Patent Term Restoration.
---------------------------
(a) The University shall notify Licensee of (i) the issuance of
each U.S. patent included within the
<PAGE>
License Agreement between PI Research Corporation and Penn 23
~a January 2, 1992
Licensed Patents, giving the date of issue and patent number for each
such patent, and (ii) each notice pertaining to any patent included
within the Licensed Patents which it receives as patent owner pursuant
to the Drug Price Competition and Patent Term Restoration Act (the
"Act"), including but not necessarily limited to notices pursuant to
section 101 and 103 of the Act from persons who have filed an
abbreviated NDA or a "paper" NDA. Such notices shall be given promptly,
but in any event within ten (10) days of each such patent's date of
issue or receipt of each such notice pursuant to the Act, whichever is
applicable.
(b) The University hereby authorizes Licensee to include in any NDA
for a Licensed Product, as Licensee may deem appropriate under the Act,
a list of patents included within the Licensed Patents identifying the
University as patent owner that relate to such Licensed Product and
such other information as is required to be filed pursuant to the Act.
The University agrees as patent owner under the Act to apply for an
extension of the term of any patent included within the Licensed
Patents, as patent owner under the Act, upon request by and at the
expense of Licensee. The University also agrees to execute such
documents and take such additional action as the U.S. Patent and
Trademark Office or U.S. Food and Drug Administration may require in
connection therewith; provided however, that the University's costs in
connection with this Section 9.7 are reimbursed by Licensee.
Article X: Additional Provisions
10.1 Arbitration.
-----------
(a) All disputes arising between the University
and Licensee under this Agreement shall be settled by arbitration
conducted in the English language in accordance with the Commercial
Arbitration Rules of the American Arbitration Association relating to
voluntary arbitrations with a panel of three arbitrators. The parties
will cooperate with each other in causing the arbitration to be held in
as efficient and expeditious a manner as practicable. Any arbitration
proceeding instituted by either party under this Agreement shall be
brought in Philadelphia, Pennsylvania.
(b) Any award rendered by the arbitrators shall be final and
binding upon the parties hereto. Judgment upon the award may be entered
in any court of record of competent jurisdiction. Each party shall pay
its own expenses of arbitration and the expenses of the arbitrators
shall be equal shared unless the arbitrators assess as part of their
award all or any part of the arbitration expenses of one party
(including reasonable attorneys' fees) against the other party.
<PAGE>
License Agreement between PI Research Corporation and Penn 24
January 2, 1992
10.2 Assignment. No rights hereunder may be assigned by the
----------
Licensee directly, unless by merger or acquisition of Licensee, without
the express written consent of the University; provided, however, that
Licensee may assign the same to an Affiliate that assumes all
obligations of Licensee under this Agreement or to any entity in
connection with any merger, acquisition or sale of all or
substantially all of its business relating to the Licensed
Products. Any prohibited assignment of this Agreement or rights
hereunder shall be null and void. No assignment shall relieve
Licensee of-responsibility for the performance of any accrued
obligations which it has prior to such assignment less the
University consents in writing to the release of such accrued
obligations. This agreement shall inure to the benefit of
permitted assigns of Licensee.
10.3 No Waiver. A waiver by either party of a breach or
---------
violation of any provision of this Agreement will not constitute or be
construed as a waiver of any subsequent breach or violation of that
provision or as a waiver of any breach or violation of any other
provision of this Agreement.
10.4 Independent Contractor. Nothing herein shall be deemed to
----------------------
establish a relationship of principal and agent between the University
and Licensee, nor any of their agents or employees for any purpose
whatsoever. This Agreement shall not be construed as constituting the
University and Licensee as partners, or as creating any other form of
legal association or arrangement which could impose liability upon one
party for the act or failure to the act of the other party.
10.5 Notices. Any notice under this Agreement shall be
-------
sufficiently given if sent in writing by prepaid, first class,
certified or registered mail, return receipt requested, addressed as
follows:
if to the University, to:
University of Pennsylvania Center for Technology
Transfer 133 South 36th Street, Suite 419
Philadelphia, PA 19104
Attn: Director
with copy to:
Office of the General Counsel University of Pennsylvania
110 College Hall
Philadelphia, PA 19104
Attn: General Counsel
<PAGE>
License Agreement between PI Research Corporation and Penn 25
January 2, 1992
if to Licensee, to:
PI Research Corporation c/o Mr. Robert Kunze
Hambrecht & Quist Life Science
Venture Partners One Bush Street
San Francisco, CA 94104
Attn: Chief Executive Officer
with copy to:
Hambrecht & Quist Life Science
Venture Partners One Bush Street
San Francisco, CA 94104
Attn: Mr. Robert Kunze
with copy to:
Cooley Godward Castro Huddleson & Tatum One Maritime
Plaza, 20th Floor San Francisco, CA 94111
Attn: Kenneth L.Guernsey, Esq.
or to such other addresses as may be designated from time to time by
Notice given in accordance with the terms of this Section.
10.6 Entire Agreement. This Agreement embodies the entire
----------------
understanding between the parties relating to the subject matter hereof
and supersedes all prior understandings and agreements, whether written
or oral. This Agreement may not be varied except by a written document
signed by duly authorized representatives of both parties.
10.7 Severability. Any of the provisions of this
------------
Agreement which are determined to be invalid or unenforceable in any
jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability in such jurisdiction, without rendering invalid or
unenforceable the remaining provisions hereof or affecting the validity
or unenforceability of any of the terms of this Agreement in any other
jurisdiction.
10.8 Headings. Any headings and captions used in this Agreement
--------
are for convenience or reference only and shall not affect its
construction or interpretation.
10.9 No Third Party Benefits. Nothing in this Agreement, express
-----------------------
or implied, is intended to confer on any person other than the parties
hereto or their permitted assigns, any benefits, rights or remedies.
<PAGE>
License Agreement between PI Research Corporation and Penn 26
January 2, 1992
10.10 Governing Law. This Agreement shall be construed,
-------------
governed, interpreted and applied in accordance with the laws of the
State of Delaware, without giving effect to conflict of law provisions.
10.11 Counterparts. This Agreement shall become binding
------------
when any one or more counterparts hereof, individually or taken
together, shall bear the signatures of each of the parties hereto. This
Agreement may be executed in any number of counterparts, each of which
shall be deemed as original as against the party whose signature
appears thereon, but all of which taken together shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
License Agreement as of the date first above written.
For The Trustees of the For PI Research Corporation
University of Pennsylvania
/s/ Stephen M. Sammut /s/ Robert Kunze
--------------------------- ---------------------------
Stephen M.Sammut Robert Kunze
Director, Center for Chairman
Technology Transfer
Agreed to and Acknowledged:
/s/ Harvey Rubin /s/ Barry Cooperman
------------------------- -----------------------
Dr. Harvey Rubin Dr. Barry Coopenman
Principal Investigator Investigator
/s/ Norman Schechter /s/ Zhai-Mei Wang
------------------------- ------------------------
Dr. Norman Schechter ~Dr. Zhai-Mei Wang
Investigator Investigator
<PAGE>
Attachment A: Protatek Cooperative Research Agreement
of 10/1/87 ("Protatek CRA")
<PAGE>
Cooperative Research
Agreement Between
University of Pennsylvania
and Protatek International
<PAGE>
Table of Contents
Article 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Field of the Agreement . . . . . . . . . . . . . . . . . . . 1
1.2 Sponsored Research . . . . . . . . . . . . . . . . . . . . . 1
1.3 The General Research . . . . . . . . . . . . . . . . . . . . 1
1.4 Specific Research . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Proprietary Information . . . . . . . . . . . . . . . . . . . 1
1.6 Confidential Information . . . . . . . . . . . . . . . . . . 1
1.7 Invention . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Patent Expenses . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Principal Investigators . . . . . . . . . . . . . . . . . . . 2
Article 2. Sponsored Research . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Sponsored Research will consist of both the General
Research protocol and Specific Research projects . . . . . . . 2
Article 3. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Protatek agrees to pay to PENN . . . . . . . . . . . . . . . 2
3.2 PENN is under no obligation to fund . . . . . . . . . . . . . 2
3.3 When three or more Research Projects . . . . . . . . . . . . 2
Article 4. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Article 5. Publication . . . . . . . . . . . . . . . . . . . . . . . . . 3
5.1 PENN retains the right to publish the results. . . . . . . . . 3
5.2 All publications will be treated as invention disclosures. . . 3
5.3 PENN agrees to use its best efforts in its publications not
to jeopardize . . . . . . . . . . . . . . . . . . . . . . . . 3
Article 6. Handling of Confidential Information . . . . . . . . . . . . 3
6.1 Each party to this agreement will handle . . . . . . . . . . 3
6.2 In order to minimize the potential . . . . . . . . . . . . . 3
6.3 Such obligations of confidentiality and limited use . . . . . 3
Article 7. Title to Inventions ..........................................
Article 8. Patent Applications and Expenses . . . . . . . . . . . . . . 4
. 8.1 Control of the preparation. . . . . . . . . . . . . . . . . 4
8.2 All expenses . . . . . . . . . . . . . . . . . . . . . . . . 4
Article 9. Transfer of Rights to Commercialize Intellectual Property
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
9.1 From time 10 time, the results of the General
Research . . . . . . . . . . . . . . . .. . . . . . . . . 4
9.1.1 The Research Results are of no interest to
Protatek . . . . . . . . . . . . . . . . . . . . 4
9.1.2 The Research Results are insufficient to
support a viable patent . . . . . . . . . . . . . . . . . . 4
9.1.3 The Research Results can be demonstrated
to have been previously known . . . . . . . . . . . . . . . 4
<PAGE>
9.1.4 The Research Results are of commercial
interest to Protatek . . . . . . . . . . . . 5
9.2 If the Research Results are insufficiently described or
incomplete . . . . . . . . . . . . . . . . . . . . . . 5
9.3 If Protatek should elect not to file a patent application 5
9.4 PENN hereby grants and Protatek hereby accepts . . . . . .5
9.5 Should Protatek and PENN fail to reach agreement
regarding the terms . . . . . . . . . . . . . . . . . . 5
Article 10. Term and Termination . . . . . . . . . . . . . . . . . 6
10.1 The intent of the parties . . . . . . . . . . . . . . . 6
10.2 Should either party to this agreement be at fault. . . . 6
10.3 Protatek may terminate this agreement . . . . . . . . . 6
10.4 PENN may terminate this Agreement . . . . . . . . . . . 6
10.5 Surviving termination . . . . . . . . . . . . . . . . . 6
Article 11. Miscellaneous . . . . . . . . . . . . . . . . . . . . 6
11.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . 6
------
11.2 Use of name . . . . . . . . . . . . . . . . . . . . . . 7
-----------
11.3 Scope . . . . . . . . . . . . . . . . . . . . . . . . 7
-----
11.4 Assignability . . . . . . . . . . . . . . . . . . . . . 7
-------------
11.5 Venue . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----
IN WITNESS WHEREOF . . . . . . . . . . . . . . . . . . 7
<PAGE>
THIS AGREEMENT, effective the 1st day of August 1988, is by and
between The Trustees of The University of Pennsylvania, with offices at
133 South 361h Street Philadelphia, PA 19104 ("PENN"), and Protatek
International, Inc with offices in Minneapolis, MN 55108 ("Protatek").
WHEREAS, Dr. Harvey Rubin and Dr. Barry S. Cooperman, faculty
members of the PENN are interested in studying Protease Inhibitors, and
WHEREAS, Protatek is interested in such research and wishes to
commercially develop and exploit the results of such research for the
good of mankind; and
WHEREAS, PENN has determined that the research program contemplated
by this Agreement furthers the educational, scholarship and research
objectives of PENN as a nonprofit tax-exempt educational institution;
NOW, THEREFORE be it agreed among the parties as follows:
Article 1. Definitions.
1.1 Field of the Agreement means research related to, the production
of, or any application of Protease Inhibitors derived from
peptides or compounds, methods, know-how, or improvements
derived therefrom.
1.2 Sponsored Research means research performed at PENN with the
support of Protatek in one or both of two categories: (1)
General Research in the Field of the Agreement; and (2) Specific
Research directed at potential products and applications of
compounds and their derivatives in the Field of the Agreement
which may result from General Research.
1.3 The General Research protocol and budget is described in
Attachment A and is included herein by reference.
1.4 Specific Research projects may be defined and included in this
document as addendum labeled "Addendure SRP - n" (where n is the
number of the addendum).
1.5 Proprietary Information means any information, idea or concept
which has been learned or developed by one party without the aid
of the other party and which is not generally available to the
public.
1.6 Confidential Information means Proprietary lnformation or
information developed as unpublished results of Sponsored
Research and is marked as such. Excluded from Confidential
Information is any information which:
1.6.1 is within or comes within the public knowledge (but
only when it so becomes), or
1
<PAGE>
1.6.2 developed independently by either party to this
agreement outside of the scope of this Agreement,
or
1.6.3 revealed to either party by third parties authorized to
reveal such information and under no obligation of
confidentiality to either party to this agreement.
1.7 Invention means any idea, improvement, or enhancement, whether
patentable or not, which results from Sponsored Research.
1.8 Patent Expenses means all out-of-pocket expenses directly related
to the preparation, filing, prosecution and issuance of any
domestic or foreign patent application(s) covering Inventions.
1.9 Principal Investigators means-Dr. Rubin and/or Dr. Cooperman or
should the services of either of these two not be available to
PENN for any reason, any replacement whom PENN can offer who is
acceptable to Protatek as indicated in writing, within sixty
(60) days after the unavailability of either original Principal
Investigator.
Article 2. Sponsored Research.
2.1 Sponsored Research will consist of both the General Research
protocol and Specific Research projects as dictated by General
and/or Specific Research results and as agreed to between the
parties in writing. Once executed by both parties in writing,
such Specific Research Project Addenda will be included as
integral parts of this document. The Specific Research protocols
and budgets as outlined in the Addenda may draw funds and
research time away from the General Research protocol, or they
may involve additional resources in terms of time and funding as
agreed to by the parties.
Article 3. Payment.
3.1 Protatek agrees to pay to PENN certain moneys in order to
partially defray the cost to PENN of the Sponsored Research.
The schedule of payments for moneys to be paid by Protatek to
PENN are contained in the Attachment B to this document which
is included herein by reference and which may be amended from
time to time by mutual written agreement between the parties.
3.2 PENN is under no obligation to fund any of the Sponsored
Research.
3.3 When three or more Research Projects are defined and have not
been terminated, Protatek agrees to pay PENN an additional
[ ] per year for administration of intellectual property
rights.
2
<PAGE>
Article 4. Reports.
4.1 Principal Investigators will generally administer and supervise
the Sponsored- Research, and will submit annual written
scientific reports.
Article 5. Publication.
5.1 PENN retains the right to publish the results of Sponsored
Research in scholarly journals and meetings, subject to the
provisions of this Article and Article 6.
5.2 All publications will be treated as invention disclosures for the
purposes of review by Protatek for the potential disclosure of
patentable inventions. Copies of all proposed publications or
abstracts which result from Sponsored Research will be sent to
Protatek at least forty-five (45) days in advance of the expected
publication or presentation date. Should Protatek believe that
such publication or abstract would constitute the disclosure of
patentable material, Protatek will promptly notify PENN in writing
of the relevant material, and PENN will delay publication or
presentation of such article or abstract until either (a) a U.S.
patent application has been filed, or (b) the relevant material
has been sufficiently deleted from the proposed publication or
abstract so as not to present an obvious public disclosure of
patentable material. However, in no event will the requirements of
(a) or (b) above be allowed to take longer than one hundred twenty
(120) days.
5.3 PENN agrees to use its best efforts in its publications not to
jeopardize the commercial value of the results of Sponsored
Research and will bear in mind the editorial comments of
Protatek regarding disclosure of non-patentable material and
potential trade secrets.
Article 6. Handling of Confidential Information.
6.1 Each party to this agreement will handle the other party's
confidential information with the same degree of security and
confidentiality with which it maintains its own confidential
information, and will not use such information for any commercial
purpose without first obtaining license from the owning party.
6.2 In order to minimize the potential for accidental disclosure of
Confidential Information, neither party will give the other party
any Confidential Information which is not essential to the
performance of the Supported Research. Further, any party
receiving Confidential Information retains the right to refuse to
accept Confidential Information which it feels is not essential to
the Supported Research.
6.3 Such obligations of confidentiality and limited use of
information shall be maintained for a minimum of [ ] from the
date of receipt of any Confidential Information by either party.
3
<PAGE>
Article 7. Title to Inventions.
7.1 Title to any Inventions made by personnel employed by Protatek
will belong to Protatek. Title to any Inventions made by
personnel employed by PENN will belong to PENN. Title to
Inventions made jointly by personnel employed by Protatek and
personnel employed by PENN will belong jointly to Protatek and
PENN.
Article 8. Patent Applications and Expenses.
8.1 Control of the preparation, filing and prosecution of all patent
applications will reside with the party to whom the covered
Invention belongs. In the case of joint ownership, control will be
joint. However, both parties will cooperate as necessary in the
preparation, filing and prosecution of all patent. applications
covering Inventions.
8.2 All expenses related to the preparation, filing or prosecution of
patent applications covering Inventions which belong either
jointly or solely to Protatek will be borne by Protatek. All
expenses related to the preparation, filing or prosecution of
patent applications covering Inventions which belong solely to
PENN, but which Protatek wishes to make subject to the grant of
the following section will be borne by Protatek. All patent
expenses related to applications covering Inventions not subject
to the grant of the following section will be borne by the party
to whom the Invention belongs.
Article 9. Transfer of Rights to Commercialize Intellectual Property.
9.1 From time to time. the results of the General Research or the
Specific Research protocols may produce results which may be
patentable and which may become the basis for a (further)
Specific Research Protocol. If at any time either party believes
that any research results (from either General Research or
Specific Research) should become the subject of applications
for letters patent, that party will promptly notify the other
party in writing, giving the details of such results.
Within thirty (30) days of receipt of notice by Protatek from
PENN, or concurrent with delivery of notice by Protatek to PENN,
Protatek will inform PENN as to which of the following
categories such research results belong:
9.1.1 The Research Results are of no interest to Protatek and
shall not be subject to the Grant of Article 9.4, and related
patent expenses shall not be borne by Protatek.
9.1.2 The Research Results are insufficient to support a
viable patent application, but Protatek elects to
retain commercial rights to the research results.
9.1.3 The Research Results can be demonstrated to have been
previously known by Protatck and developed independently by
Protatek and are not therefore
4
<PAGE>
subject to this Agreement.
9.1.4 The Research Results are of commercial interest to
Protatek, are subject to the grant of Paragraph 9.4 of
this article and Protatek agrees to bear Patent
Expenses. Such Research Results may be of two types as
further elected by Protatek:
9.1.4.1 The subject of a new Specific Research Addendum; or
9.1.4.2 The subject of either a previous Specific Research
Addendum or to remain as part of the General
Research Protocol.
9.2 If the Research Results are insufficiently described or
incomplete so that it becomes impossible for Protatek to make
the above election without further description or
consultation by PENN Protatek may hold such election in abeyance
until either:
PENN provides sufficient detail; or additional research results
are obtained. In no event however, will such delay exceed ninety
(90) days from the receipt of notice by Protatek from PENN
unless specifically agreed to in writing by the parties.
9.3 If Protatek should elect not to file a patent application under
the provisions of sub-paragraph 9.1.2 for a particular research
result, and PENN files, prosecutes and is issued a U.S. patent
covering these same research results at its own expense, then
any license to Protatek from PENN under such patent will be
subject to an additional [ ] on end-products covered by such
patent.
9.4 PENN hereby grants and Protatek hereby accepts the exclusive
first right to negotiate in good faith for exclusive world-wide
license(s) (such license(s) may be non-exclusive
at Protatek's sole discretion) under any patent for which it has
borne or will bear Patent Expenses. Such grant for any specific
patent application will automatically terminate six (6) months
from the official date of receipt by the U.S. Patent and
Trademark Office of the relevant patent application unless said
grant is exercised as evidenced by: (i) both beginning good faith
negotiations and (2) agreement to pay any related Patent Expenses.
The details of each license agreement will vary from
technology to technology but will generally follow the format of
the License Agreement attached hereto as Attachment C and
included herein by reference. The earned royalties on net sales
of end-products in such license agreements will generally be
between [ ] unless either party can provide compelling as to
why appropriate.
9.5 Should Protatek and PENN fail to reach agreement regarding the
terms of such license, PENN will be free to negotiate license
terms with third parties. However, should third party
negotiations lead to license terms by PENN essentially similar
to those last offered by Protatek, Protatek will be given the
opportunity to take license on such terms, before any third
party.
5
<PAGE>
Article 10. Term and Termination.
10.1 The intent of the parties is that the relationship developed
herein shall continue from year to year on an on-going basis
from the date first written above unless terminated under the
provisions included below in this Article or paragraph 1.9.
10.2 Should either party to this agreement be at fault under the terms
of this agreement, the other party may terminate this agreement
by giving [ ] written notice of intent to terminate and the
nature of the fault. If such fault is not corrected within the
[ ] period, this agreement will terminate with the expiration
of the [ ] period.
10.3 Protatek may terminate this agreement upon [ ] prior written
notice to PENN.
10.4 PENN may terminate this Agreement upon [ ] prior written notice
to Protatek if PENN can demonstrate that has notit est efforts
or has substantially failed to commercialize the results of
Sponsored Research, and which failure is not corrected
during said [ ] period.
10.5 Surviving termination of this agreement are the provisions of
confidentiality and limited use of information contained in
article 9, the grant of article 8, and any licenses which may
have been negotiated between the parties.
Article 11. Miscellaneous.
11.1 Notice. Any notice required under this agreement will be
------
considered given one day after such notice, properly addressed
and shipped overnight service, is sent by either party. Proper
address for notice is as follows:
if to PENN:
Office of Corporate Programs & Technology University of
Pennsylvania Suite 300
133 South 36th Street
Philadelphia, PA 19104
6
<PAGE>
if to Protatek:
President
Protatek International, Inc.
1425 Energy Park Drive
Minneapolis, MN 55108
11.2 Use of name. Neither party will use the name, insignia or logo
-----------
of the other party for any purpose without the prior express
written consent of the other party.
11.3 Scope. This Agreement constitutes the entire agreement between the
-----
parties and it reflects and dissolves all prior agreements and
drafts related to the subject matter hereof. This agreement may
be amended truly by mutual written agreement between the parties.
11.4 Assignability. This Agreement shall be binding upon and enure to
-------------
the parties hereto, their successors and asignees, provided
however, that any such assignment by Protatek will require the
written approval of PENN. Such approval by PENN will not be
withheld by PENN except for reason of situations which might
jeopardize the policies, the good name of PENN, or its mission.
11.5 Venue. This Agreement will be interpreted in and according to the
-----
laws of the Commonwealth of Pennsylvania.
1N WITNESS WHEREOF, both parties set their hand
for Protatek:, for PENN:
/s/ /s/ George C. Sambeck
----------------------------- -------------------------
Signed Signed
Assoc. Dir.
----------------------------- -------------------------
Title Title
9/21/88
----------------------------- -------------------------
Date Date
7
<PAGE>
Attachment B: Protatek Alpha-1 Antichymotrypsin License
<PAGE>
License Agreement Between
The Trustees of The University of Pennsylvania and
Protatek International, Inc.
(alpha-1 Antichymotrypsin)
<PAGE>
Table of Contents:
Article 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Licensed Technology . . . . . . . . . . . . . . . . . . . . 1
1.2. Licensed Patent . . . . . . . . . . . . . . . . . . . . . . 1
1.3. Ultimate Consumer . . . . . . . . . . . . . . . . . . . . . 2
1.4. Licensed Product(s) . . . . . . . . . . . . . . . . . . . . 2
1.5. Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6. Protatek is understood to include all of its Affiliates. . . 2
Article 2. Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1. PENN grants to Protatek . . . . . . . . . . . . . . . . . . 2
Article 3. Compliance with Laws, Regulations and Standards . . . . . . 2
3.1. Protatek agrees to comply with .all governmental . . . . . 2
3.2. With respect to operations by the Protatek . . . . . . . . 2
Article 4. Consideration . . . . . . . . . . . . . . . . . . . . . . . 3
4.1. In consideration of the rights granted herein, License shall
pay to
PENN certain amounts . . . . . . . . . . . . . . . . . . . 3
4.2 All amounts due hereunder . . . . . . . . . . . . . . . . . 3
Article 5. Reports, Payments and Accounting . . . . . . . . . . . . . 3
5.1. Protatek agrees to make written reports to PENN . . . . . . 3
5.2. Protatek also agrees to make a similar written report to
PENN within
three months after the date of the Termination . . . . . . 3
5.3. Concurrently with the making of each report . . . . . . . . 3
5.4. Protatek agrees to keep records showing the manufacture,
sales, use,
rentals, and leasing . . . . . . . . . . . . . . . . . . . 3
Article 6. Warranties and Indemnities . . . . . . . . . . . . . . . . 3
6.1. Nothing in this Agreement shall be construed . . . . . . . 3
6.2. PENN makes no representations and extends no warranties . . 4
6.3. Protatek shall indemnify and hold harmless PENN against any
charge
or claim . . . . . . . . . . . . . . . . . . . . . . . . . 4
Article 7. Infringement by Others: Protection of Patents . . . . . . 4
7.1. Protatek shall promptly inform PENN . . . . . . . . . . . 4
7.2. Protatek and PENN shall consider whether and in what manner
litigation . . . . . . . . . . . . . . . . . . . . . . . . 5
Article 8. Commercial Application, Sublicenses . . . . . . . . . . . 5
8.1. Any sublicense granted by Protatek . . . . . . . . . . . . 5
8.2. Any such sublicense may provide for the transfer of all
rights and obligations of the sublicensee . . . . . . . . .6
<PAGE>
Article 9. Term and Termination . . . . . . . . . . . . . . . 6
9.1. The word "Termination" . . . . . . . . . . . . . . 6
9.2. If Protatek shall at any time default in the payment
6
9.3. Protatek shall have the right to Terminate this License
Agreement in
respect to any or all Licensed Patents, . . . . . . 6
Article 10. Assignment . . . . . . . . . . . . . . . . . . . . 7
Article 11. Applicable Law . . . . . . . . . . . . . . . . . . 7
Article 12. Arbitration . . . . . . . . . . . . . . . . . . . 7
Article 13. Notices . . . . . . . . . . . . . . . . . . . . . 7
Article 14. Waiver . . . . . . . . . . . . . . . . . . . . . . 8
Article 15. Scope of the Agreement and Integration . . . . . . 8
IN WITNESS WHEREOF . . . . . . . . . . . . . . . . . . . 9
<PAGE>
This Agreement is by and between The Trustees of The University of
Pennsylvania, a non-profit corporation with offices at 133 South 36th
Street, Philadelphia, PA 19104 (PENN), and Protatek International, Inc
with Offices at 1245 Energy Park Drive, Minneapolis, MN 55108
(Protatek).
Whereas, PENN has discovered human genetic material encoding for
certain peptides which function as inhibitors of proteases; and
Whereas, Protatek has certain proprietary know-how and trade
secrets essential to the production, purification and characterization
of biological materials important to the future exploitation of these
protease inhibitors; and
Whereas, PENN and Protatek have executed a Cooperative Research
Agreement, specifying the terms and conditions for research in the
development of such peptides into useful and valuable products; and
Whereas, under the terms of such Cooperative Research Agreement,
PENN and Protatek have agreed to certain apportionment of rights and
responsibilities and the conditions of cooperation in the research and
commercial development of such research results, if any; and
Whereas, Protatek has supported, in part, the research which has
lead to the results the commercialization of which is contemplated by
this Agreement; and
Whereas, PENN wishes to develop and commercially exploit, for the
good of mankind, the results of such research; and
Whereas, PENN desires to see that the results of its research are
expeditiously and competently developed for the good of mankind;
Now Therefore, be it agreed among the parties as follows:
Article 1. Definitions
1.1. Licensed Technology means all inventions, designs and
technology related to alpha-1 Anti-Chymotrypsin encoded
for by human DNA and discovered by Dr. Harvey Rubin
and/or his coworkers at PENN whether patented or
unpatented, including all know-how for practicing such
inventions and technology related to such alpha-1 Anti-
Chymotrypsin including inventions, designs and
technology relating to the active site of said protease
inhibitor, its analogues, and their formulation(s) and
applications.
1.2. Licensed Patent means United States letters patent or
applications therefore and any corresponding foreign (to the United
States) applications and foreign patents which have issued or may
issue as a result of corresponding foreign patent application and
any continuation, continuation-in-part, division, reissue or
substitute applications based on any of the foregoing within the
Licensed Technology unless and until such patent or application
has been abandoned,
1
<PAGE>
has lapsed or has been ruled to be wholly invalid by a court
of competent jurisdiction.
1.3. Ultimate Consumer means that person or entity whose use of
the product results in its destruction or loss of activity and/or loss
of value.
1.4. Licensed Product(s) means materials (including expression
systems) which in the course of manufacture, use or sale would, in the
absence of this license, be covered by one or more claims of Licensed
Patent which have not been held invalid by a court from which no
appeal may be taken.
1.5. Net Sales means the gross sales, received by Protatek,
whether invoiced or not, less: returns and allowances
actually granted; packing, insurance, freight out, taxes or
excise duties imposed on the transaction (if separately
invoiced); wholesaler discounts; and cash discounts.
1.6. Protatek is understood to include all of its Affiliates. An
Affiliate of Protatek shall mean any corporation or other business
entity controlled by, controlling, or under common control with
Protatek. For this purpose, "control" means direct or indirect
beneficial ownership of at least fifty percent (50%) interest
in the income of such corporation or other business.
Article 2. Grant
2.1. PENN grants to Protatek a world-wide exclusive, right and
license to make, have made, use and sell Licensed Products under
Licensed Patent. Such right and license shall include the right to
sublicense under terms consistent with this Agreement but without
further right to sublicense.
Article 3. Compliance with Laws, Regulations and Standards
3.1. Protatek agrees to comply with all governmental laws and
regulations applicable to the use, production and/or sale of
Licensed Products.
With respect to operations by the Protatek in the United
States, its territories and possessions, Protatek
specifically expresses its intent to comply with the physical
and biological containment standards set forth in the NIH
Guidelines for Research Involving Recombinant DNA Molecules,
dated 21 November 1980, or any subsequent amended version of
U.S. Government guidelines or regulations pertaining to such
activities in effect during the term of this Agreement.
Protatek further agrees to cooperate with government
agency(ies) authorized to monitor compliance with such
containment standards.
Article 4. Consideration
4.1. In consideration of the rights granted herein, License shall
pay to PENN certain amounts which have been agreed to in
principle and will be embodied
2
<PAGE>
in a separate writing between the parties. Such amounts may
include consideration for: License initiation and
maintentance, minimum royalties and earned royalties.
4.2 All amounts due hereunder by Protatek to PENN shall be paid
to PENN in United States Dollars and shall be paid and
reported upon in a manner consistent with Article 5 hereof.
Article 5. Reports, Payments and Accounting
5.1 Protatek agrees to make written reports to PENN within sixty
(60) days of each June 30 and each December 31 during the
term of this License Agreement stating in each such report
the number of units and Net Sales of Licensed Product(s)
upon which consideration is payable pursuant to Article
4 hereof for the prior six month period.
5.2. Protatek also agrees to make a similar written report to PENN
within three months after the date of the Termination of
this License Agreement on Licensed Products(s) used, sold,
rented, or leased by Protatek and upon which consideration
is payable hereunder but which were not previously reported.
5.3. Concurrently with the making of each report required under
this Article, Protatek shall pay to PENN all considerations
due in connection with the transactions so reported.
5.4. Protatek agrees to keep records showing the manufacture,
sales, use, rentals, and leasing of Licensed Products in
sufficient detail to enable the considerations due and
payable hereunder by Protatek to be determined, and
further agrees to permit its books and records to be
examined from time to time, but not more than once a year,
to the extent necessary to verify reports provided for in
Paragraphs 5.1 and 5.2 of this Article. Such examination is
to be made by an independent, certified accountant
appointed by PENN, with the fees and expenses to be borne
by PENN. Only those considerations due to PENN within the
three year period immediately preceding the start of the
audit and their supporting records, files, and books of
account shall be subject to audit.
Article 6. Warranties and Indemnities
6.1. Nothing in this Agreement shall be construed as:
6.1.1. A warranty or representation by PENN as to the
validity or scope of any Licensed Patent;
6.1.2. A warranty or representation that anything
made, used, sold, rented or leased, under any
license granted by this Agreement is or will
be free from infringement of patents of third
parties;
3
<PAGE>
6.1.3. An obligation to bring or prosecute actions or suit
against third parties for infringement;
6.1.4. Conferring a right to use in advertising,
publicity, or otherwise any trademark or trade name
of either party; or
6.1.5. Granting by implication, estoppel, or otherwise any
licenses or rights under patents of PENN other than
Licensed Patents, regardless of whether such
patents dominate or are subordinate to any Licensed
Patents.
The foregoing notwithstanding, PENN hereby informs Protatek
that it knows of no patents which dominate the Licensed
Patents and under which PENN has the right to grant licenses.
6.2. PENN makes no representations and extends no warranties
of any kind, either expressed or implied. There are no
expressed or implied warranties of merchantability
or fitness for a particular purpose, or that the
use of the Licensed Products will not infringe any
patent, copyright, trademark, or other rights
of any person.
6.3. Protatek shall indemnify and hold harmless PENN against any
charge or claim made by a third party on account of the
rights and license which are objects of this License
Agreement. By way of example, but without limitation,
PENN shall be indemnified against loss due to charges of
product liability, medical malpractice and the like which may be
levied against PENN on account of licensed sales pursuant to this
License Agreement.
Article 7. Infringement by Others: Protection of Patents
7.1. Protatek shall promptly inform PENN of any suspected
infringement of any Licensed Patent by a third party. PENN
and Protatek shall consult to determine whether an
infringement exists and how best to effect its abatement.
This consultation and all related consultations shall be in
furtherance of the community of interest extant between PENN
and Protatek as exemplified by this License Agreement.
7.2. Protatek and PENN shall consider whether and in what manner
litigation or other adjudicative procedures may be brought
against an infringer. PENN and Protatek each shall have the
right to institute an action for infringement of a
Licensed Patent against such third party in accordance with
the following or such other arrangement as the parties may
agree upon:
7.2.1. If PENN and Protatek agree to institute a suit
jointly, the suit shall be brought in both their
names, the out-of pocket costs thereof shall
4
<PAGE>
be borne equally, and recoveries, if any, whether by
judgment, award, decree, or settlement, shall be shared
equally. Protatek shall exercise control over such
action provided, however, that PENN may, if it so
desires, be represented by counsel of its own selection,
the fees for which counsel shall be paid by PENN. PENN
shall have the right to approve the selection of
litigation counsel and the proposed litigation budget,
which approval shall not unreasonably be withheld. PENN
shall have the right to approve any settlement of the
litigation.
7.2.2. In the absence of agreement to institute a suit
jointly, PENN may institute suit and, at its
option, join Protatek as a plaintiff. PENN shall
bear the entire cost of such litigation and shall
be entitled to retain the entire amount of any
recovery by way of judgment or settlement. Protatek
will cooperate fully in the prosecution of any such
suit.
7.2.3. In the absence of agreement to institute a suit
jointly, and if PENN determines not to institute a
suit, Protatek may institute suit, and, and its
option, join PENN as a plaintiff. Protatek shall
bear the entire cost of such litigation and shall
be entitled to retain the entire amount of any
recovery by way of judgment, award, decree, or
settlement for past infringement. PENN will
cooperate fully in the prosecution of any such
suit.
7.2.4. Should either PENN or Protatek commence a suit
under the provisions of this Article and thereafter
elect to abandon the same, it shall give timely
notice to the other party who may, if it so
desires, continue prosecution of such suit
provided, however, that the sharing of expenses and
any recovery in such suit shall be agreed upon
between PENN and Protatek.
Article 8. Commercial Application, Sublicenses
8.1. Any sublicense granted by Protatek under this License
Agreement shall be consistent with the terms and conditions
of this License Agreement, except that sublicense terms and
conditions shall reflect that any sublicensee shall not
further sublicense.
8.2. Any such sublicense may provide for the transfer of all
rights and obligations of the sublicensee, including the
payment of considerations specified in such sublicenses,
to PENN or its designee, in the event that this License
Agreement is terminated and not promptly reinstated.
Article 9. Term and Termination
9.1. The word "Termination" and cognate words, such as "Term" and
"Terminate," as used in this License Agreement, are to be read, except
where the contrary is specifically indicated, as omitting from their
effect the following rights and
5
<PAGE>
obligations, all of which survive any Termination to the
degree necessary to permit their complete fulfillment or
discharge:
9.1.1. Protatek's obligation to supply a terminal report
as specified in Paragraph 5.2 hereof;
9.1.2. PENN's right to receive or recover and Protatek's
obligation to pay royalties, including minimum
royalties, pursuant to Articles 4 and 5 hereof, due
or accruable for payment at the time of
Termination;
9.1.3. Protatek's obligation to maintain records and PENN's
right to conduct an audit as provided in Article 5
hereof;
9.1.4. Licenses and releases running in favor of customers
of Protatek and Protatek's sublicensees with
respect to Licensed Product(s) sold or transferred
prior to any termination and on which consideration
has been paid or is payable by Protatek to PENN as
provided in Articles 4 and 8 hereof;
9.1.5. Any cause of action or claim of either party
hereto, accrued or to accrue because of any breach
or default by the other party; and
9.1.6. The provisions of Article 7.
9.2. If Protatek shall at any time default in the payment of any
consideration or in the making of any report hereunder, or
shall commit any material breach of any covenant herein
contained, or shall make any materially false report
and shall fail to remedy any such default, breach, or report
within ninety (90) days after written notice thereof by
PENN, PENN may, at its option, Terminate this License
Agreement and the licenses herein granted by notice
in writing to such effect.
9.3. Protatek shall have the right to Terminate this License
Agreement in respect to any or all Licensed Patents, upon
giving at least [ ] written notice to PENN of its
intention and desire to terminate.
Article 10. Assignment
This Agreement shall be binding upon and enure to the parties
hereto, their successors and asignees, provided, however, that any
such assignment by Protatek will require the written approval of
PENN. Such approval by PENN will not be withheld by PENN except
for reason of situations which might jeopardize the policies, the
good name of PENN, or its mission.
Article 11. Applicable Law
This License Agreement shall be construed, interpreted, and
applied in accordance with the laws of the Commonwealth of
Pennsylvania.
6
<PAGE>
Article 12. Arbitration
12.1. Any controversy arising under or related to this License
Agreement, and any disputed claim by either party
against the other under this License Agreement,
including, without limitation, disputes relating to
patent validity or infringement shall be settled by
arbitration, upon the request of either party in
accordance with the then-prevailing Patent Arbitration
Rules of the American Arbitration Association (AAA). In
the event of such controversy, the matter shall be
submitted to one arbitrator knowledgeable in the field,
who has been selected by mutual agreement of the parties
hereto or by the AAA if the parties cannot agree.
12.2. Any arbitration under Paragraph 13.1 hereof shall be held at
Philadelphia, Pennsylvania, or such other place as may be
mutually agreed upon in writing between the parties.
Judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.
Article 13. Notices
13.1. All notices, demands, or other writings provided for in this
Agreement to be given, made, or sent by either party to the
other, shall be deemed to have been fully given, made, or
sent when done in writing and deposited in the
United States mail, first class, postage prepaid, and
addressed as follows:
To PENN: University of Pennsylvania
Office of Research Administration
133 South 36th Street
Suite 300
Philadelphia, Pennsylvania 19104-3246
Attention: Associate Director
To Protatek: President
Protatek International, Inc.
1425 Energy Park Drive
Minneapolis, MN 55108
13.2. The address to which any notice, demand, or other writing
may be given or made or sent to any party may be changed
upon written notice given by such party as above provided.
Article 14. Waiver
The parties covenant and agree that, if either party hereunder
fails or neglects for any reason to take advantage of any of the
terms of this License Agreement providing for the Termination of
this License Agreement, or if a party, having the
7
<PAGE>
right to declare this License Agreement terminated, shall fail to
do so, any such failure or neglect by such party shall not be or
be deemed or be construed to be a waiver of any of the terms,
covenants, or conditions of this License Agreement or of the
performance thereof. None of the terms, covenants, and conditions
of this License Agreement can be waived except by the written
consent of the party waiving compliance.
Article 15. Scope of the Agreement and Integration
1.5.1. The article headings herein are for convenience only and in
no manner affect the rights and obligations of the parties,
nor shall they be used to interpret the provisions hereof.
1.5.2. This License Agreement and the above-identified Cooperative
Research '. Agreement constitute the entire agreement
between the parties pertaining to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this License
Agreement in duplicate originals by their officers or representatives
duly authorized as of the date executed.
The Trustees of The University For Protatek International, Inc
of Pennsylvania
/s/ /s/ George C. Sambeck
----------------------------- -------------------------
Signed Signed
President Assoc. Dir.
----------------------------- -------------------------
Title Title
9/21/88
----------------------------- -------------------------
Date Date
8
<PAGE>
Attachment C: Protatek Cl Esterase License Agreement
<PAGE>
License Agreement Between
The Trustees of The University of Pennsylvania
and
Protatek International, Inc.
(C1 Esterase Inhibitor)
<PAGE>
Table of Contents:
Article 1. Definitions . . . . . . . . . . . . . . . . . . . . . 1
1.1. Licensed Technology . . . . . . . . . . . . . . . . . 1
1.2. Licensed Patent . . . . . . . . . . . . . . . . . . . 1
1.3. Ultimate Consumer . . . . . . . . . . . . . . . . . . 2
1.4. Licensed Product(s) . . . . . . . . . . . . . . . . . 2
1.5. Net Sales . . . . . . . . . . . . . . . . . . . . . . 2
1.6. Protatek is understood to include all of its
Affiliates . . . . . . . . . . . . . . . . . . . . . 2
Article 2. Grant . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1. PENN grants to Protatek . . . . . . . . . . . . . . . 2
Article 3. Compliance with Laws, Regulations and Standards . . . 2
3.1. Protatek agrees to comply with .all governmental . . 2
3.2. With respect to operations by the Protatek . . . . . 2
Article 4. Consideration . . . . . . . . . . . . . . . . . . . . 3
4.1. In consideration of the rights granted herein,
License shall pay to PENN certain amounts . . . . 3
4.2 All amounts due hereunder . . . . . . . . . . . . . . 3
Article 5. Reports, Payments and Accounting . . . . . . . . . . 3
5.1. Protatek agrees to make written reports to PENN . . . 3
5.2. Protatek also agrees to make a similar written
report to PENN within three months after the
date of the Termination . . . . . . . . . . . . . . 3
5.3. Concurrently with the making of each report . . . . . 3
5.4. Protatek agrees to keep records showing the
manufacture, sales, use, rentals, and leasing . . . 3
Article 6. Warranties and Indemnities . . . . . . . . . . . . . 3
6.1. Nothing in this Agreement shall be construed . . . . 3
6.2. PENN makes no representations and extends no
warranties . . . . . . . . . . . . . . . . . . . . . 4
6.3. Protatek shall indemnify and hold harmless PENN
against any charge or claim . . . . . . . . . . . . 4
Article 7. Infringement by Others: Protection of Patents . . . 4
7.1. Protatek shall promptly inform PENN . . . . . . . . 4
7.2. Protatek and PENN shall consider whether and in what
manner litigation . . . . . . . . . . . . . . . . 5
Article 8. Commercial Application, Sublicenses . . . . . . . . 5
8.1. Any sublicense granted by Protatek . . . . . . . . . 5
8.2. Any such sublicense may provide for the transfer
of all rights and obligations of the sublicensee . 6
<PAGE>
Article 9. Term and Termination . . . . . . . . . . . . . . . . 6
9.1. The word "Termination" . . . . . . . . . . . . . . . 6
9.2. If Protatek shall at any time default in the payment . 6
9.3. Protatek shall have the right to Terminate this
License Agreement in respect to any or all
Licensed Patents, . . . . . . . . . . . . . . . . . 6
Article 10. Assignment ... . . . . . . . . . . . . . . . . . . . 7
Article 11. Applicable Law . . . . . . . . . . . . . . . . . . . 7
Article 12. Arbitration . . . . . . . . . . . . . . . . . . . . 7
Article 13. Notices . . . . . . . . . . . . . . . . . . . . . . 7
Article 14. Waiver . . . . . . . . . . . . . . . . . . . . . . . 8
Article 15. Scope of the Agreement and Integration . . . . . . . 8
IN WITNESS WHEREOF . . . . . . . . . . . . . . . . . . . . 9
<PAGE>
This Agreement is by and between The Trustees of The University of
Pennsylvania, a non-profit corporation with offices at 133 South 361h
Street, Philadelphia, PA 19104 (PENN), and Protatek International, Inc
with Offices at 1245 Energy Park Drive, Minneapolis, MN 55108
(Protatek).
Whereas, PENN has discovered human genetic material encoding for
certain peptides which function as inhibitors of proteases; and
Whereas, Protatek has certain proprietary know-how and trade
secrets essential to the production, purification and characterization
of biological materials important to the future exploitation of these
protease inhibitors; and
Whereas, PENN and Protatek have executed a Cooperative Research
Agreement, specifying the terms and conditions for research in the
development of such peptides into useful and valuable products; and
Whereas, under the terms of such Cooperative Research Agreement,
PENN and Protatek have agreed to certain apportionment of rights and
responsibilities and the conditions of cooperation in the research and
commercial development of such research results, if any; and
Whereas, Protatek has supported, in part, the research which has
lead to the results the commercialization of which is contemplated by
this Agreement; and
Whereas, PENN wishes to develop and commercially exploit, for the
good of mankind, the results of such research; and
Whereas, PENN desires to see that the results of its research are
expeditiously and competently developed for the good of mankind;
Now Therefore, be it agreed among the parties as follows:
Article 1. Definitions
1.1. Licensed Technology means all inventions, designs and
technology related to C1 Esterase Inhibitor encoded for
by human DNA and discovered by Dr. Harvey Rubin and/or
his coworkers at PENN whether patented or
unpatented, including all know-how for practicing such
inventions and technology related to such C1 Esterase
Inhibitor including inventions, designs and technology
relating to the active site of said protease inhibitor,
its analogues, and their formulation(s) and
applications.
1.2. Licensed Patent means United States letters patent or
applications therefore and any corresponding foreign (to the United
States) applications and foreign patents which have issued or may
issue as a result of corresponding foreign patent application and
any continuation, continuation-in-part, division, reissue
or substitute applications based on any of the foregoing within
the Licensed Technology unless and until such patent or application
has been abandoned,
1
<PAGE>
has lapsed or has been ruled to be wholly invalid by a court
of competent jurisdiction.
1.3. Ultimate Consumer means that person or entity whose use of
the product results in its destruction or loss of activity and/or loss
of value.
1.4. Licensed Product(s) means materials (including expression
systems) which in the course of manufacture, use or sale would, in the
absence of this license, be covered by one or more claims of Licensed
Patent which have not been held invalid by a court from which no appeal
may be taken.
1.5. Net Sales means the gross sales, received by Protatek,
whether invoiced or not, less: returns and allowances
actually granted; packing, insurance, freight out, taxes or
excise duties imposed on the transaction (if separately
invoiced); wholesaler discounts; and cash discounts.
1.6. Protatek is understood to include all of its Affiliates. An
Affiliate of Protatek shall mean any corporation or other business
entity controlled by, controlling, or under common control with
Protatek. For this purpose, "control" means direct or indirect
beneficial ownership of at least fifty percent (50%) interest
in the income of such corporation or other business.
Article 2. Grant
2.1. PENN grants to Protatek a world-wide exclusive, right and
license to make, have made, use and sell Licensed Products under
Licensed Patent. Such right and license shall include the right to
sublicense under terms consistent with this Agreement but without
further right to sublicense.
Article 3. Compliance with Laws, Regulations and Standards
3.1. Protatek agrees to comply with all governmental laws and
regulations applicable to the use, production and/or sale of
Licensed Products.
3.2. With respect to operations by the Protatek in the United
States, its territories and possessions, Protatek specifically
expresses its intent to comply with the physical anti biological
containment standards set forth in the NIH Guidelines
for Research Involving Recombinant DNA Molecules, dated 21
November 1980, or any subsequent amended version of U.S. Government
guidelines or regulations pertaining to such activities in effect
during the term of this
Agreement. Protatek further agrees to cooperate with
government agency(ies) authorized to monitor compliance with such
containment standards.
Article 4. Consideration
4.1. In consideration of the rights granted herein, License shall pay
to PENN certain amounts which have been agreed to in principle and will
be embodied
2
<PAGE>
in a separate writing between the parties. Such amounts may
include consideration for: License initiation and
maintenance, minimum royalties and earned royalties.
4.2 All amounts due hereunder by Protatek to PENN shall be paid
to PENN in United States Dollars and shall be paid and reported upon in
a manner consistent with Article 5 hereof.
Article 5. Reports, Payments and Accounting
5.1. Protatek agrees to make written reports to PENN within sixty
(60) days of each June 30 and each December 31 during the term of this
License Agreement stating in each such report the number of units
and Net Sales of Licensed Product(s) upon which consideration is
payable pursuant to Article 4 hereof for the prior six month period.
5.2. Protatek also agrees to make a similar written report to
PENN within three months after the date of the Termination of this
License Agreement on Licensed Products(s) used, sold, rented, or
leased by Protatek and upon which consideration is payable hereunder
but which were not previously reported.
5.3. Concurrently with the making of each report required under
this Article, Protatek shall pay to PENN all considerations
due in connection with the transactions so reported.
5.4. Protatek agrees to keep records showing the manufacture,
sales, use, rentals, and leasing of Licensed Products in sufficient
detail to enable the considerations due and payable hereunder by
Protatek to be determined, and further agrees to pertnit its books
and records to be examined from time to time, but not more than once
a year, to the extent necessary to verify reports provided for in
Paragraphs 5.1 and 5.2 of this Article. Such examination is to be
made by an independent, certified accountant appointed by PENN, with
the fees and expenses to be borne by PENN.
Only those considerations due to PENN within the three year period
immediately preceding the start of the audit anti their supporting
records, files, and books of account shall be subject to audit.
Article 6. Warranties and Indemnities
6.1. Nothing in this Agreement shall be construed as:
6.1.1. A warranty or representation by PENN as to the
validity or scope of any Licensed Patent;
6.1.2. A warranty or representation that anything
made, used, sold, rented or leased, under any
license granted by this Agreement is or will
be free from infringement of patents of third
parties;
3
<PAGE>
6.1.3. An obligation to bring or prosecute actions or suit
against third parties for infringement;
6.1.4. Conferring a right to use in advertising,
publicity, or otherwise any trademark or trade name
of either party; or
6.1.5. Granting by implication, estoppel, or otherwise any
licenses or rights under patents of PENN other than
Licensed Patents, regardless of whether such
patents dominate or are subordinate to any Licensed
Patents.
The foregoing notwithstanding, PENN hereby informs Protatek
that it knows of no patents which dominate the Licensed
Patents and under which PENN has the right to grant licenses.
6.2. PENN makes no representations and extends no warranties of
any kind, either expressed or implied. There are no expressed
or implied warranties of merchantability or fitness for a
particular purpose, or that the use of the Licensed Products
will not infringe any patent, copyright, trademark, or other
rights of any person.
6.3. Protatek shall indemnify and hold harmless PENN against any
charge or claim made by a third party on account of the rights and
license which are objects of this License Agreement. By way of example,
but without limitation,
PENN shall be indemnified against loss due to charges of
product liability, medical malpractice and the like which may be
levied against PENN on account of licensed sales pursuant to this
License Agreement.
Article 7. Infringement by Others: Protection of Patents
7.1. Protatek shall promptly inform PENN of any suspected
infringement of any Licensed Patent by a third party. PENN
and Protatek shall consult to determine whether an
infringement exists and how best to effect its abatement.
This consultation and all related consultations shall be in
furtherance of the community of interest extant between PENN
and Protatek as exemplified by this License Agreement.
7.2. Protatek and PENN shall consider whether and in what manner
litigation or other adjudicative procedures may be brought
against an infringer. PENN and Protatek each shall have the
right to institute an action for infringement of a
Licensed Patent against such third party in accordance with
the following or such other arrangement as the parties may
agree upon:
7.2.1. If PENN and Protatek agreement to institute a suit
jointly, the suit shall be brought in both their
names, the out-of pocket costs thereof shall
4
<PAGE>
be borne equally, and recoveries, if any, whether by
judgment, award, decree, or settlement, shall be shared
equally. Protatek shall exercise control over such
action provided, however, that PENN may, if it so
desires, be represented by counsel of its own selection,
the fees for which counsel shall be paid by PENN. PENN
shall have the right to approve the selection of
litigation counsel and the proposed litigation budget,
which approval shall not unreasonably be withheld. PENN
shall have the right to approve any settlement of the
litigation.
7.2.2. In the absence of agreement to institute a suit
jointly, PENN may institute suit and, at its
option, join Protatek as a plaintiff. PENN shall
bear the entire cost of such litigation and shall
be entitled to retain the entire amount of any
recovery by way of judgment or settlement. Protatek
will cooperate fully in the prosecution of any such
suit.
7.2.3. In the absence of agreement to institute a suit
jointly, and if PENN determines not to institute a
suit, Protatek may institute suit, and, and its
option, join PENN as a plaintiff. Protatek shall
bear the entire cost of such litigation and shall
be entitled to retain the entire amount of any
recovery by way of judgment, award, decree, or
settlement for past infringement. PENN will
cooperate fully in the prosecution of any such
suit.
7.2.4. Should either PENN or Protatek commence a suit
under the provisions of this Article and thereafter
elect to abandon the same, it shall give timely
notice to the other party who may, if it so
desires, continue prosecution of such suit
provided, however, that the sharing of expenses and
any recovery in such suit shall be agreed upon
between PENN and Protatek.
Article 8. Commercial Application, Sublicenses
8.1. Any sublicense granted by Protatek under this License
Agreement shall be consistent with the terms and conditions
of this License Agreement, except that sublicense terms and
conditions shall reflect that any sublicensee shall not
further sublicense.
8.2. Any such sublicense may provide for the transfer of all
rights and obligations of the sublicensee, including the
payment of considerations specified in such sublicenses,
to PENN or its designee, in the event that this License
Agreement is terminated and not promptly reinstated.
Article 9. Term and Termination
9.1. The word "Termination" and cognate words, such as "Term" and
"Terminate," as used in this License Agreement, are to be read, except
where the contrary is specifically indicated, as omitting from their
effect the following rights and
5
<PAGE>
obligations, all of which survive any Termination to the
degree necessary to permit their complete fulfillment or
discharge:
9.1.1. Protatek's obligation to supply a terminal report
as specified in Paragraph 5.2 hereof;
9.1.2. PENN's right to receive or recover and Protatek's
obligation to pay royalties, including minimum
royalties, pursuant to Articles 4 and 5 hereof, due
or accruable for payment at the time of
Termination;
9.1.3. Protatek's obligation to maintain records and PENN's
right to conduct an audit as provided in Article 5
hereof;
9.1.4. Licenses and releases running in favor of customers
of Protatek and Protatek's sublicensees with
respect to Licensed Product(s) sold or transferred
prior to any termination and on which consideration
has been paid or is payable by Protatek to PENN as
provided in Articles 4 and 8 hereof;
9.1.5. Any cause of action or claim of either party
hereto, accrued or to accrue because of any breach
or default by the other party; and
9.1.6. The provisions of Article 7.
9.2. If Protatek shall at any time default in the payment of any
consideration or in the making of any report hereunder, or
shall commit any material breach of any covenant herein
contained, or shall make any materially false report
and shall fail to remedy any such default, breach, or report
within ninety (90) days after written notice thereof by
PENN, PENN may, at its option, Terminate this License
Agreement and the licenses herein granted by notice
in writing to such effect.
9.3. Protatek shall have the right to Terminate this License
Agreement in respect to any or all Licensed Patents, upon
giving at least [ ] written notice to PENN of its
intention and desire to terminate.
Article 10. Assignment
This Agreement shall be binding upon and enure to the parties
hereto, their successors and asignees, provided, however, that any
such assignment by Protatek will require the written approval of
PENN. Such approval by PENN will not be withheld by PENN except
for reason of situations which might jeopardize the policies, the
good name of PENN, or its mission.
Article 11. Applicable Law
This License Agreement shall be construed, interpreted, and
applied in accordance with the laws of the Commonwealth of
Pennsylvania.
6
<PAGE>
Article 12. Arbitration
12.1. Any controversy arising under or related to this License
Agreement, and any disputed claim by either party
against the other under this License Agreement,
including, without limitation, disputes relating to
patent validity or infringement shall be settled by
arbitration, upon the request of either party in
accordance with the then-prevailing Patent Arbitration
Rules of the American Arbitration Association (AAA). In
the event of such controversy, the matter shall be
submitted to one arbitrator knowledgeable in the field,
who has been selected by mutual agreement of the parties
hereto or by the AAA if the parties cannot agree.
12.2. Any arbitration under Paragraph 13.1 hereof shall be
held at Philadelphia, Pennsylvania, or such other place
as may be mutually agreed upon in writing between the
parties. Judgment upon the award rendered by the
arbitrator may be entered in any court having
jurisdiction thereof.
Article 13. Notices
13.1. All notices, demands, or other writings provided for in
this Agreement to be given, made, or sent by either
party to the other, shall be deemed to have been fully
given, made, or sent when done in writing and deposited
in the United States mail, first class, postage prepaid,
and addressed as follows:
To PENN: University of Pennsylvania
Office of Research Administration
133 South 36th Street
Suite 300
Philadelphia, Pennsylvania 19104-3246
Attention: Associate Director
To Protatek: President
Protatek International, Inc.
1425 Energy Park Drive
Minneapolis, MN 55108
13.2. The address to which any notice, demand, or other writing
may be given or made or sent to any party may be changed upon written
notice given by such party as above provided.
Article 14. Waiver
The parties covenant and agree that, if either party hereunder
fails or neglects for any reason to take advantage of any of the
terms of this License Agreement providing For the Termination o
this License Agreement, or if a party, having the
7
<PAGE>
right to declare this License Agreement terminated, shall fail to
do so, any such failure or neglect by such party shall not be or
be deemed or be construed to be a waiver of any of the terms,
covenants, or conditions of this License Agreement or of the
performance thereof. None of the terms, covenants, and conditions
of this License Agreement can be waived except by the written
consent of the party waiving compliance.
Article 15. Scope of the Agreement and Integration
15.1. The article headings herein are for convenience only and
in no manner affect the rights and obligations of the
parties, nor shall they be used to interpret the
provisions hereof.
15.2. This License Agreement and the above-identified
Cooperative Research Agreement constitute the entire
agreement between the parties pertaining to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this License
Agreement in duplicate originals by their officers or representatives
duly authorized as of the date executed.
The Trustees of The University For Protatek International, Inc
of Pennsylvania
/s/ /s/ George C. Sambeck
----------------------------- -------------------------
Signed Signed
President Assoc. Dir.
----------------------------- -------------------------
Title Title
9/21/88
----------------------------- -------------------------
Date Date
8
<PAGE>
Attachment D: Protatek-PIRC-Penn Assignment Agreement
of 9/6/91
<PAGE>
PI Research Corporation
Assignment Agreement
--------------------
THIS AGREEMENT is entered into as of September 6, 1991, between PI
Research Corporation, a Delaware Corporation having a place of business
at One Bush Street, San Francisco, California 94104 (hereinafter
referred to as the "Company"), Protatek International, Inc., a
Minnesota corporation, having a place of business at 1491 Energy Park
Drive, St. Paul, Minnesota 55108 (hereinafter referred to as
"Protatek"), the Trustees of the University of Pennsylvania, with
offices at 133 South 36th Street, Philadelphia, Pennsylvania 19104
(hereinafter referred to as the "University").
WHEREAS, the Company desires to acquire certain rights to
technology currently held by Protatek by virtue of certain research and
license agreements that have previously been entered into with the
University; and
WHEREAS, Protatek is willing to assign its rights under such
research and license agreements to the Company in exchange for equity
in the Company; and
WHEREAS, the University desires to consent to such assignment in
exchange for equity in the Company;
NOW THEREFORE, for and in consideration of the mutual covenants and
obligations assumed by the parties hereto, it is agreed as follows:
1. Assignment
----------
Effective as of the date of this Agreement, Protatek hereby assigns
to the Company all right, title and interest that Protatek holds as a
party to the following research and license agreements (collectively,
the Assigned Agreements"):
A. Cooperative Research Agreement between the University and
Protatek dated August 1, 1988;
B. License Agreement between the University and Protatek dated
September 27, 1988, for C1 Esterase Inhibitor; and
<PAGE>
C. License Agreement between the University and
-
Protatek dated September 27, 1988, for alpha-1 Antichymotrypsin.
This assignment by Protatek includes the assignment of any and all
rights that Protatek may have to any discoveries, technology or
inventions related to the subject matter of the Assigned Agreements,
including any and all technology derived during the performance of
Protatek's obligations under the Assigned Agreements.
2. Consideration.
A. To Protatek. In exchange for the foregoing assignment, the
Company will issue to Protatek an aggregate of 1,098,039 shares of the
Company's Common Stock which shares will initially represent twenty-
eight percent (28%) of the total capital stock of the Company
outstanding or reserved for initial issuance. Such Common Stock will be
issued pursuant to a separate Stock Purchase Agreement in customary
form to be executed by the parties as soon as reasonably possible, and
certificates representing such shares of Common Stock will be delivered
to Protatek promptly after the execution of such Stock Purchase
Agreement.
B. To the University and Certain University Faculty. In exchange
for its consent to the foregoing assignment, the Company will issue to
the University and provide an opportunity to purchase for certain
faculty of the University, an [ ] aggregate shares shall of the
Company's Common Stock, which shares will initially represent [ ]
of the total capital stock of the Company outstanding or reserved for
initial issuance. Specifically, the aforesaid aggregate shares shall be
distributed directly to the University and certain faculty of the
University as follows:
1. To the University, [ ] shares, comprising
[ ] of the total capital stock of the Company outstanding or
reserved for initial issuance;
2. To Dr. Harvey Rubin, Assistant Professor of Medicine, the
opportunity to purchase [ ] shares, comprising [ ] of the total
capital stock of the Company outstanding or reserved for initial
issuance;
3. To Dr. Barry Cooperman, Professor of Chemistry, the
opportunity to purchase [ ] shares shall, comprising [ ] of the
total capital stock of the Company outstanding or reserved for initial
issuance;
2
<PAGE>
4. To Dr. Norman Schechter, Research Professor
of Dermatology, the opportunity to purchase [ ] shares
comprising [ ] of the total capital stock of the Company
outstanding or reserved for initial issuance; and
5. To Dr. Zhai-Mei Wang, Research Associate for Infectious
Diseases, the opportunity to purchase [ ] shares comprising [ ]
of total capital stock of the Company outstanding or reserved for
initial issuance.
Such Common Stock will be issued pursuant to separate Stock Purchase
Agreements in customary form to be executed by the parties as soon as
reasonably possible, and certificates representing such shares of
Common Stock or the opportunity to purchase such Common Stock will be
delivered to the University and the faculty identified above,
respectively, promptly after the execution of such Stock Purchase
Agreements.
In further consideration to the University, Company and
University agree to renegotiate in good faith a revised License
Agreement for alpha-1 Antichotrypsin and C-1 Esterase Inhibitor to
substitute for the Agreements referenced in Paragraphs 1.B and 1.C,
and a Collaborative Research Agreement to substitute for the
agreement referenced in Paragraph 1.A.
Protatek and the UniVersity hereby agree to execute such documents
as are reasonably necessary in the opinion of counsel to the Company to
permit the Company lawfully to convey the appropriate equity of the
Company to Protatek and the University, respectively. Protatek and the
University acknowledge and agree that the shares o~ Colon Stock issued
to them will be subject to substantial restrictions on transfer and are
being acquired solely for investment purposes.
3. Acceptance and Consent of Assiqnments.
-------------------------------------
The Company hereby accepts the foregoing assignment by Protatek and
agrees to be bound to all of the provisions therein and to convey the
consideration described above to each party. The University hereby
consents to the assignment of the Assigned Agreement to the Company,
including any rights that may have arisen during the course of
Protatek's performance under the Assigned Agreements.
4. Miscellaneous Provisions.
------------------------
This Agreement shall be governed for all purposes by the law of the
State of Delaware as it applies to contracts
3
<PAGE>
between Delaware residents, made and to be performed entirely within
the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
PI RESEARCH CORPORATION PROT~~NTE~A~ONAL, INC. A .
/s/ Robert J. Runze /s/ Roger Headrick
------------------------ ----------------------------
Robert J.Kunze,President Roger Headrick, President
THE TRUSTEES OF THE UNIVERSITY
OF PENNSYLVANIA
/s/ Stephen M. Sammut
-----------------------------
Stephen M. Sammut, Director
Center for Transfer Technology
4
<PAGE>
Attachment F: PIRC/Penn Collaborative Research Agreement
of 3/1/91
<PAGE>
Signature Version
COLLABORATIVE RESEARCH AGREEMENT
--------------------------------
This COLIABORATIVE RESEARCH AGREEMENT is made as of the First day
of March, 1991 by and between THE TRUSTEES OF THE UNIVERSITY OF
PENNSYLVANIA, a nonprofit corporation organized and existing under the
laws of the Commonwealth of Pennsylvania (the "University"), and PI
Research Corporation, a corporation organized and existing under the
laws of Delaware ("Sponsor").
RECITALS
--------
A. Dr. Harvey Rubin, a faculty member and Assistant Professor of
Medicine of the University, has performed research in the field of
human protease inhibitors under a cooperative research agreement,
dated October 1, 1987, with Protatek International, Inc.("Protatek"),
a company then based in Minneapolis, MN.
B. University entered into two license agreements with University
for inventions made under the cooperative research agreement.
C. Protatek contemplates assigning its rights under the
cooperative research agreement and the two license agreements to
Sponsor.
D. University and Sponsor contemplate entering into a revised
license agreement ("License Agreement"), which will replace the two
previous license agreements referred to in recital C above.
E. Sponsor has undertaken and fulfilled the obligations of
Protatek to University under the October 1, 1987 Cooperative Research
Agreement, which has terminated.
F. Sponsor desires to support and collaborate on additional
research with Dr. Rubin, such research to be performed in accordance
with the terms and conditions of this Agreement.
G. Sponsor further desires to obtain an option to license certain
of the results of the research performed collaboratively under this
Agreement on terms substantially similar to those contained in the
License Agreement.
H. The research and development program contemplated by this
Agreement is of mutual interest to Sponsor and the University and
furthers the educational, scholarship and research objectives of the
University as a nonprofit, tax-exempt educational institution.
<PAGE>
Collaborative Research Agreement between PIRC and Penn 2
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, and intending to be legally bound hereby,
the parties hereto agree as follows:
ARTICLE 1: DEFINITIONS
1.1 The following terms as used herein shall have the following
meanings:
1.1.1 "Confidential Information, means (i) the University Inventions,
-------------------------
(ii) the Joint Inventions, (iii) Sponsor Inventions, (iv) any
information or material in tangible form that is marked as
confidential or proprietary by the furnishing party at the time it is
delivered to the receiving party, and (v) information that is
furnished orally if the furnishing party identifies such information
as confidential or proprietary when it is disclosed and promptly
confirms such designation in writing within 30 days after such
disclosure.
1.1.2 "Collaborative Research" means the research and development
-----------------------
program related to human protease inhibitors, as more fully described
in Attachment 1 to this Agreement, as such may be modified by mutual
agreement of the parties in writing.
1.1.3 "Effective Date" of this Agreement is March 1, 1991.
---------------
1.1.4 "Inventions" mean and include all technical information,
-----------
trade secrets, developments, discoveries, know-how, methods,
techniques, formulae, processes and other proprietary ideas, whether
or not patentable or copyrightable, that are discovered, developed or
reduced to practice in the performance of the Collaborative Research.
1.1.5 "Joint Inventions" mean Inventions made or conceived jointly
-----------------
by employees of the University and Sponsor.
1.1.6 "Principal Investigators" mean the individuals designated in
------------------------
accordance with Section 92.3 hereof.
1.1.7 "Research Inventions" mean the Joint Inventions, Sponsor
-------------------
Inventions and University Inventions.
1.1.8 "Sponsor Inventions" mean Inventions made or conceived
------------------
solely by employees of Sponsor.
1.1.9 "University Inventions" mean Inventions made or
----------------------
conceived solely by employees of the University.
1.1.10 ~University Principal Investigator" or "University
--------------------------------- -----------
Investigators" refers respectively to the Principal Investigator,
-------------
Harvey Rubin, M.D., Ph.D., Assistant Professor of Medicine at
University, and to Investigators, Barry S. Cooperman, Ph.D.,
Professor of Chemistry, Norman Schechter, Ph.D., Research
<PAGE>
Collaborative Research Agreement between PIRC and Penn 3
Professor of Dermatology and Zai-Mei Wang, Ph.D., Research Associate
Infectious Diseases, all at University.
ARTICLE 2: SPONSORED RESEARCH
2.1 Statement of Work. The parties hereto agree to use reasonable
-----------------
efforts to conduct the Collaborative Research with funds made
available by Sponsor. Each party shall furnish the appropriate
personnel, materials, services, facilities and equipment for the
performance of the Collaborative Research. The University is under no
obligation to fund any of the Collaborative Research.
2.2 Conduct and Supervision of Collaborative Research. The parties
-------------------------------------------------
shall cooperate fully in the conduct and supervision of the
Collaborative Research. Each party acknowledges that the other makes
no express or implied warranties, representations or guarantees with
respect to the completion, success or particular results of the
Collaborative Research.
2.3 Participation of Principal Investigators.
----------------------------------------
2.3.1 Dr. Harvey Rubin, an employee of University, and an employee
of Sponsor to be designated in the future who shall be acceptable to
University, shall serve as Principal Investigators for the
Collaborative Research and shall be responsible for the administration
and supervision of the Collaborative Research. The Principal
Investigators shall meet at reasonable intervals, in mutually
convenient locations to review the findings and the progress of the
Collaborative Research.
2.3.2 If the services of a Principal Investigator become
unavailable to a party for any reason, that party shall be entitled to
designate another member of its staff or faculty who is acceptable to
both parties to serve as a Principal Investigator of the Collaborative
Research. If a substitute Principal Investigator has not been
designated within sixty (60) days after an original Principal
Investigator ceases his or her services under this Agreement, either
party may terminate this Agreement upon written notice thereof to the
other party.
2.4 Access to Facilities
--------------------
Each party shall permit visits and inspections to its facilities,
and observation of the work being performed in connection with the
Collaborative Research program, by the employees and consultants of
the other parties engaged in the performance of Collaborative
Research. All such visiting personnel shall be subject to the health
and safety regulations of the facility in question, and to the
execution of appropriate agreements regarding non-disclosure of
Confidential Information.
<PAGE>
Collaborative Research Agreement between PIRC and Penn 4
ARTICLE 3: PERIOD OF PERFORMANCE
3.1 Period of Performance. The initial term of the Collaborative
---------------------
Research shall be for [ ] from the Effective Date of this
Agreement, unless terminated sooner pursuant to Section 7.1
hereof. This Agreement may be extended or renewed only by written
agreement of both parties.
ARTICLE 4: FUNDING, ETC.
4.1 Funding. To support the Collaborative Research of the
-------
University, Sponsor shall pay the University the amounts set forth in
Attachment 1 hereto for the initial term of the Collaborative
Research. Funding amounts for any renewal term shall be determined by
the parties if and when the determination to renew is made under
Article 3 hereof.
4.2 Payment. Sponsor shall make monthly payments on a pro rata
-------
basis in accordance with Attachment 1 by check made payable to "The
Trustees of the University of Pennsylvania," mailed to the University
at the address identified in Section 9.5 hereof.
4.3 Additional Funds. The total of the payments set forth in
----------------
Attachment A (the "Payment Ceiling") represents an estimate only and
not a guarantee of the cost to support the University's research
Activities during the initial term of the Collaborative Research. The
University may submit a request to Sponsor for additional funds at
such time as the University's share of the Collaborative Research
costs may reasonably be projected to exceed the Payment Ceiling.
Sponsor shall not be liable for, and the University shall not incur,
expenditures in excess of the Payment Ceiling unless Sponsor approves
such additional expenditure in writing and funds such additional
expenditure in advance. The University shall not be required to
complete the Collaborative Research in the event that (i) the Payment
Ceiling proves insufficient for that purpose, and (ii) Sponsor
determines not to increase the Payment Ceiling to an amount adequate
to complete the Collaborative Research. Any amounts paid by Sponsor
under this Agreement are nonrefundable, except as provided in Section
7.2 hereof. Payments made by Sponsor under this Section fulfill the
diligence obligations of the Licenses under Section3.3(a) of the
License Agreement.
4.4 University Record Keeping and Reports to Sponsor. The
------------------------------------------------
University shall keep accurate records and books of account relating
to amounts paid to it by Sponsor hereunder, which are to be available
to authorized representatives of Sponsor upon reasonable written
notice during the University's regular business hours. The parties
shall consult and render progress reports to one another quarterly
during the term of the Collaborative Research and shall render to one
another a complete final report on the results of the Collaborative
Research within
<PAGE>
Collaborative Research Agreement between PIRC and Penn 5
one hundred twenty (120) days following termination of the
Collaborative Research.
4.5 Equipment. Title to any equipment purchased, built or
---------
manufactured by the University, its Principal Investigator or
University Investigators in the performance of the Collaborative
Research shall vest in the University and any such equipment shall be
and remain the property of the University following termination of the
Collaborative Research.
ARTICLE 5: INVENTIONS, OPTION TO LICENSE, ETC.
5.1 Disclosure of Inventions. Each party shall provide promptly to
------------------------
the other a complete written disclosure of any Research Invention
reasonably considered patentable.
5.2 Prosecution of Patents.
----------------------
5.2.1 University Inventions. The University shall be responsible
---------------------
for and shall control the preparation, prosecution and maintenance of
all patents and patent applications related to a University Invention.
Sponsor shall advise the University, no later than thirty (30) days
after receipt of disclosure of a University Invention whether it
requests the University to file and prosecute a patent application
related to such University Invention. Sponsor shall reimburse the
University for all documented expenses (including legal fees, filing
and maintenance fees or other governmental charges) incurred in
connection with the filing, prosecution and maintenance of any patents
and patent applications that Sponsor requests the University to
prosecute hereunder. Sponsor and the University shall mutually
determine the countries where the patents and patent applications
related to University Inventions will be prosecuted and maintained. If
Sponsor declines to pay for filing, prosecution and maintenance costs
in any jurisdiction, the University may do so at its cost and expense
but such patents and patent applications shall be excluded from
Sponsor's option to license under Section 5.4 hereof. If the
University elects not to file, prosecute or maintain any patent or
patent application related to a University Invention, Sponsor shall
then have the right to file, prosecute or maintain the patent or
patent application at its own expense.
5.2.2 Joint Inventions and Sponsor Inventions. Sponsor shall be
---------------------------------------
responsible for and shall control, at its own cost, the preparation,
prosecution and maintenance of all patents and patent applications
related to a Joint Invention or a Sponsor Invention. Sponsor shall
advise the University no later than thirty (30) days after disclosure
of a Joint Invention by either party whether it intends to file and
prosecute a patent application related to the Joint Invention. If
Sponsor declines to file and prosecute a patent application for a
Joint Invention in any jurisdiction, the University may do so at its
cost and expense but such patent application and patent shall be
excluded
<PAGE>
Collaborative Research Agreement between PIRC and Penn 6
from Sponsor's option to license under Section 5.4 hereof.
5.2.3 Other Proprietary Rights. The filing and prosecution of
------------------------
copyright, trademark and other intellectual property protection
related to the Research Inventions shall be subject to the provisions
of this Section 5.2.
5.2.4 Cooperation. Each party shall cooperate with the other party
-----------
to execute all lawful papers and instruments and to make all rightful
oaths and declarations as may be necessary in the preparation and
prosecution of all patents and other filings referred to in this
Article 5.
5.3 Ownership.
---------
(a) The University shall retain all right, title and interest in
and to the University Inventions and any patent applications, patents,
copyrights and other protection related thereto, regardless of which
party prepares, prosecutes or maintains the patent applications,
patents, copyrights or other protection related to the University
Inventions.
(b) Sponsor shall retain all right, title and interest in and to
the Sponsor Inventions and any patent applications, patents,
copyrights and other protection related thereto.
(c) Sponsor and the University shall retain all right, title and
interest in and to the Joint Inventions and each shall have an equal
undivided partial interest in any such Joint Invention and any
resulting patent applications, patents, copyrights and other
protection issued or granted thereon, regardless of which party
prepares, prosecutes or maintains the patent applications, patents,
copyrights or other protection related to the Joint Inventions.
(d) Each party shall maintain policies for its employees or
agreements with all of its employees assigned to conduct Collaborative
Research, and all third party contractors engaged in connection with
the Collaborative Research project, providing for the assignment to
such party of all rights of such employee, consultant, or contractor
with respect to inventions made or other technology rights developed
in the course of such person's employment or other engagement by the
party which relate to the Collaborative Research.
5.4 Option to License. In consideration of Sponsor's funding of
-----------------
the Collaborative Research, Sponsor shall have the option to acquire
an exclusive, worldwide, royalty-bearing license to practice any
University Invention or Joint Invention and any patents or patent
applications related thereto and to make, have made, use and sell
products using or incorporating a University Invention or Joint
Invention pursuant to the terms of the License Agreement, as
supplemented or amended by the provisions of Attachment 2 hereto.
Sponsor's option must be
<PAGE>
Collaborative Research Agreement between PIRC and Penn 7
exercised by written notice to the University within three months
after the disclosure of a University Invention or Joint Invention to
Sponsor under Section 5.1 hereof. If Sponsor timely exercises its
option, Sponsor and the University will promptly execute an amendment
to the License Agreement as to each University Invention or Joint
Invention for which the Sponsor has exercised its option. If Sponsor
fails to timely exercise its option, or if Sponsor and the University
fail to execute an amendment to the License Agreement within nine (9)
months after disclosure of the University Invention or Joint Invention
to Sponsor, the University shall be free to license the University
Invention or Joint Invention to any party upon such terms as the
University deems appropriate, without any further obligation to
Sponsor.
5.5 Retained Rights of U.S. Government. Any license granted to
----------------------------------
Sponsor pursuant to Section hereof shall be subject to the rights of
the United States government reserved under Public Laws 96-517, 97-
256, and 98-620, codified at 35 U.S.C. 200-212, and any regulations
issued thereunder.
5.6 Grant of License to Sponsor Technology. Sponsor hereby grants
--------------------------------------
to the University a license, without right of sublicense, to use, but
not to make, have made or sell and solely for the limited purpose of
engaging in the Collaborative Research, any trade secrets,
information, know-how or other proprietary ideas obtained or
developed by Sponsor outside of the performance of the Collaborative
Research that Sponsor, solely in its discretion, discloses to the
University for the purpose of assisting the University in performing
the Collaborative Research.
ARTICLE 6: CONFIDENTIALITY AND PUBLICATION
6.1 Confidentiality. Sponsor shall maintain in confidence and
---------------
shall not disclose to any third party the Confidential Information of
the University received pursuant to this Agreement, without the prior
written consent of the University. The foregoing obligation shall not
apply to:
6.1.1.1 information that is known to Sponsor or
independently developed by Sponsor prior to the time
of disclosure, in each case, to the extent evidenced by
written records promptly disclosed to the University
upon receipt of the Confidential Information;
6.1.1.2 information disclosed to Sponsor by a third
party that has a right to make such disclosure;
<PAGE>
Co11aborative Research Agreement between PIRC and Penn 8
6.1.1.3 information that becomes patented, published
or otherwise part of the public domain as a result of
acts by the University or a third person obtaining such
information as a matter of right; or
6.1.1.4 information that is required to be disclosed
by order of the U.S. Food and Drug Administration or
similar authority or a court of competent jurisdiction;
provided that the parties shall use their best efforts
to obtain confidential treatment of such information by
the agency or court.
6.1.2. Sponsor will take all reasonable steps to protect the
Confidential Information of the University with the same degree of
care Sponsor uses to protect its own confidential or proprietary
information. Without limiting the foregoing. Sponsor shall ensure that
all of its employees having access to the Confidential Information of
the University are obligated to abide by Sponsor's obligations
hereunder.
6.1.3. The University shall not be obligated to accept any
Confidential Information of Sponsor. If Sponsor desires to furnish any
such Confidential Information to the Principal Investigator or other
University personnel, Sponsor may request such individual to sign a
confidentiality agreement with Sponsor in the form of Attachment 3
hereto. The University bears no institutional responsibility for
maintaining the confidentiality of any Confidential Information of
Sponsor.
6.2 Publication.
-----------
6.2.1. Sponsor acknowledges that the basic objective of research
and development activities at the University is the generation of new
knowledge and its expeditious dissemination. To further that
objective, the University retains the right, at its discretion, to
demonstrate, publish or publicize a description of the results of the
Collaborative Research or any University Invention or Joint Invention,
subject to the provisions below.
6.2.2. Should the University desire to disclose publicly, in
writing or by oral presentation, the results of the Collaborative
Research or any University Invention or Joint Invention for which a
patent application has not been filed, the University shall notify
Sponsor in writing of its intention at least thirty (30) days before
submission of such material that
<PAGE>
Collaborative Research Agreement between PIRC and Penn 9
would make such disclosure. The University shall include with such
notice a description of the oral presentation or, in the case of a
manuscript or other proposed written disclosure, a current draft of
such written disclosure.
6.2.3. With respect to University Inventions, Sponsor may request
the University, no later than thirty (30) days following the receipt
of the University's notice, to file a patent application, copyright or
other filing related to such University Invention. All such filings
shall be subject to the provisions of Section 5.2 of this Agreement.
Upon receipt of such request, the University shall arrange for a short
delay in publication, not to exceed sixty (60) days, to permit filing
of a patent or other application by the University, or if the
University declines to file such application, to permit Sponsor to
make such a filing. If University receives no such request from
Licensee to delay submission of material making such disclosure,
University may submit such material for publication or presentation
provided that University first confirms in a reasonable way that
Licensee has received and reviewed material.
6.2.4. With respect to a Joint Invention, Sponsor may request the
University, no later than thirty (30) days following the receipt of
the University's notice, to delay publication for a period not to
exceed sixty (60) days to permit filing of a patent or other
application by the Sponsor. All such filings shall be subject to the
provisions of Section 5.2 of this Agreement.
6.2.5. If the University desires to demonstrate, publish or
publicize the results of the Collaborative Research or any University
Invention of Joint Invention that is not patentable, and Sponsor
objects to such proposed disclosure within the time period specified
in Sections 6.2.3 or 6.2.4 above, the parties will negotiate in good
faith to determine whether the proposed disclosure can be modified or
withheld, consistent with the objectives of each party. In no event
shall the University be prohibited from proceeding with any such
publication.
6.3. Use of Name. Neither party hereto shall directly or
-----------
indirectly use the name of the other party, or the name of any
trustee, director, officer or employee thereof, without the others
written consent.
ARTICLE 7: TERMINATION
7.1 Termination.
-----------
7.1.1 In addition to the termination right set forth in Section
2.3.2 hereof, either party may terminate this Agreement effective upon
written notice to the other party, if the other party breaches the
terms of this Agreement and fails to cure Such breach within [ ]
after receiving notice
<PAGE>
Collaborative Research Agreement between PIRC and Penn 10
thereof.
7.1.2 This Agreement shall automatically terminate if Sponsor
becomes insolvent or voluntary or involuntary proceedings by or
against Sponsor are instituted in bankruptcy or under any insolvency
law, or a receiver or custodian is appointed for Sponsor, or
proceedings are instituted by or against Sponsor for corporate
reorganization or the dissolution of Sponsor, which proceeding, if
involuntary, shall not have been dismissed within [ ] after the
date of filing or Sponsor makes an assignment for benefit of
creditors, or substantially all of the assets of Sponsor are
seized or attached and not released within [ ] thereafter.
7.1.3 In addition, either party may terminate this Agreement for
any reason upon [ ] prior written notice to the other party.
7.2. Effect of Termination. In the event of termination of this
---------------------
Agreement prior to its stated term whether for breach or for any other
reason whatsoever, the University shall be entitled to retain from the
payments made by Sponsor prior to termination the University's
reasonable costs of concluding the work in progress. Allowable costs
include, without limitation, all costs or noncancellable commitments
incurred prior to the receipt of, or issuance by, the University of
the notice of termination, and the full cost of each student and
faculty member supported hereunder through the end of the academic
semester in which the effective date of termination fails. In the
event of termination, the University shall submit a final report of
all costs incurred and all funds received under this Agreement within
sixty (60) days after the effective termination date. The report shall
be accompanied by a check in the amount of any excess of funds
advanced over costs and allowable commitments incurred.
7.3. Survival. Termination of this Agreement shall not affect the
--------
rights and obligations of the parties accrued prior to termination
hereof. The provisions of Articles 5, 6, 8 and 9 shall survive such
termination.
ARTICLE 8: DISCLAIMERS, ETC.
8.1. No Warranties. THE UNIVERSITY MAKES NO WARRANTIES, EXPRESS OR
-------------
IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
THE CONDUCT OF THE COLLABORATIVE RESEARCH, OR THE CONDITION OF ANY
INVENTION(S) OR PRODUCT(S), WHETHER TANGIBLE OR INTANGIBLE, CONCEIVED,
DISCOVERED, OR DEVELOPED UNDER THIS AGREEMENT, OR THE OWNERSHIP,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE
COLLABORATIVE RESEARCH OR ANY SUCH INVENTION OR PRODUCT. THE
UNIVERSITY SHALL NOT BE LIABLE FOR ANY DIRECT, CONSEQUENTIAL, PUNITIVE
OR OTHER DAMAGES SUFFERED BY SPONSOR OR ANY OTHER PERSON RESULTING
FROM THE COLLABORATIVE RESEARCH OR THE USE OF ANY SUCH INVENTION OR
PRODUCT.
<PAGE>
Collaborative Research Agreement between PIRC and Penn 11
8.2 Indemnity. The indemnification or reimbursement rights and
---------
obligations of the parties hereto shall be governed by Sections 6.2
and 6.3 of the License Agreement.
ARTICLE 9: ADDITIONAL PROVISIONS
9.1 Arbitration.
-----------
9.1.1 Except as provided in Section 6.4 hereof, all disputes
arising between the University and Sponsor under this Agreement shall
be settled by arbitration conducted in the English language in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association relating to voluntary arbitrations with a
panel of three (3) arbitrators. The parties will cooperate with each
other in causing the arbitration to be held in as efficient and
expeditious a manner as practicable. Any arbitration proceeding
instituted under this Agreement shall be brought in Philadelphia,
Pennsylvania.
9.1.2 Any award rendered by the arbitrators shall be final and
binding upon the parties hereto. Judgment upon the award maybe entered
in any court of record of competent jurisdiction. Each party shall pay
its own expenses of arbitration and the expenses of the arbitrators
shall be equally shared unless the arbitrators assess as part of their
award all or any part of the arbitration expenses of one party
(including reasonable attorneys' fees) against the other party.
9.9- Assignment. No rights hereunder may be assigned by Sponsor,
----------
directly, unless by merger or acquisition of Sponsor, without the
express written consent of the University; provided, however, that
Sponsor may assign the same to an Affiliate that assumes all
obligations of Sponsor under this Agreement or to any entity in
connection with any merger, acquisition or sale of all or
substantially all of its business related to this Agreement. Any
prohibited assignment of this Agreement on the rights hereunder shall
be null and void. No assignment shall relieve Sponsor of
responsibility for the performance of any accrued obligations which it
has prior to such assignment, unless the 'University consents in
writing to release of such accrued obligations. This Agreement shall
inure to the benefit of permitted assigns of Sponsor.
9.3 No Waiver. A waiver by either party of a breach or violation
---------
of any provision of this Agreement will not constitute or be construed
as a waiver of any subsequent breach or violation of that provision or
a waiver of any breach or violation of any other provision of this
Agreement.
9.4 Independent Contractor. Nothing herein shall be deemed to
----------------------
establish relationship of principal and agent between the University
and Sponsor, nor any of their agents or employees for any purpose
whatsoever. This Agreement shall not be construed as
<PAGE>
Collaborative Research Agreement between PIRC and Penn 12
constituting the University and Sponsor as partners, or as creating
any other form of legal association or arrangement which would impose
liability upon one party for the act or failure to act of the other
party.
9.5 Notices. Any notice under this Agreement shall be sufficiently
-------
given if-sent in writing by prepaid first class, certified or
registered mail, return receipt requested, addressed as follows:
If to the University:
Center for Technology Transfer
University of Pennsylvania
133 South 36th Street
Philadelphia, PA 19104
Attn: Director
cc: Office of the General Counsel
110 College Hall
University of Pennsylvania
Philadelphia, PA 19104
Attn: General Counsel
cc: Dr. Harvey Rubin
Assistant Professor
Department of Medicine
Hospital of the University of Pennsylvania
3400 Spruce Street
Philadelphia, Pa 19104
If to Sponsor:
P I Research Corporation
c/o Mr. Robert Kunze
Hambrecht & Quist Life Science Venture Partners
One Bush Street
San Francisco, CA 94101
Attn: Chief Executive Officer
with copy to:
Hambrecht & Quist Life Science
Venture Partners
One Bush Street
San Francisco, CA 94104
Attn: Mr. Robert Kunze
with copy to:
Cooley Godward Castro Huddleson & Tatum
One Maritime Plaza, 20th Floor
San Francisco, CA 94111
Attn: Kenneth L. Guernsey, Esq.
<PAGE>
Collaborative Research Agreement between PIRC and Penn 13
9.6 Entire Agreement; Changes. This Agreement embodies the entire
-------------------------
understanding between the parties relating to the subject matter
hereof and supersedes all prior understandings and agreements, whether
written or oral. This Agreement may not be varied except by a written
document signed by duly authorized representatives of both parties.
9.7 Severability. Any of the provisions of this Agreement which
------------
are determined to be invalid or unenforceable in any jurisdiction
shall be ineffective to the extent of such invalidity or
unenforceability in such jurisdiction, without rendering invalid or
unenforceable the remaining provisions hereof or affecting the
validity or unenforceability of any of the terms of this Agreement in
any other jurisdiction.
9.8 Headings. The headings and captions used in this Agreement are
--------
for convenience of reference only and shall not affect its
constructions or interpretation.
9.9 No Third Party Benefits. Nothing in this Agreement, express or
-----------------------
implied, is intended to confer on any person other than the parties of
their permitted assigns, any benefits, rights or remedies.
9.10 Governing Law. This Agreement shall be construed and governed
-------------
in accordance with the laws of the State of Delaware, without giving
effect to conflict of law provisions.
9.11 Counterparts. This Agreement shall become binding when any
------------
one or more counterparts hereof, individually or taken together, shall
bear the signatures of the University and Sponsor. This Agreement may
be executed in any number of counterparts, each of which shall be
deemed an original as against the party whose signatures appears
thereon, but all of which taken together shall constitute but one and
the same instrument.
9.12 Independent Research. This Agreement shall not be construed
--------------------
to limit the freedom of individuals participating in the Collaborative
Research to engage in any other research.
9.13 Nondiscrimination. The University and Sponsor shall not
-----------------
discriminate against any employee or applicant for employment because
of race, color, sex, sexual or affectational preference, age,
religion, national or ethnic origin, or handicap.
9.14 Force Majeure. Neither party shall be liable for any
-------------
failure to perform as required by this Agreement to the extent
such failure to perform is due to circumstances reasonably beyond
such party's control, including, without limitation, labor
disturbances or labor disputes of any kind, accidents, failure of
any governmental approval required for full performance, civil
disorders or commotions, acts of aggression acts of God, energy
or other conservation measures imposed by law or regulation,
<PAGE>
Collaborative Research Agreement between PIRC and Penn 14
explosions, failure of utilities, mechanical breakdowns, material
shortages, disease, or other such occurrences.
IN WITNESS WHEREOF, the duly authorized representatives of the
parties hereby execute this Collaborative Research Agreement as of the
date first above written.
FOR THE TRUSTEES OF THE FOR THE SPONSOR
UNIVERSITY OF PENNSYLVANIA
/s/ Stephen M. Sammut /s/ Robert Kunze
-------------------------- --------------------------
Stephen M. Sammut Robert Kunze
Director, Center for Chairman
Technology Transfer
Agreed to and Acknowledged:
/s/ Dr. Harvey Rubin /s/ Dr. Barry Cooperman
-------------------------- --------------------------
Dr. Harvey Rubin Dr. Barry Cooperman
Principal Investigator. Investigator
/s/ Dr. Norman Schechter /s/ Dr. Zhai-Mei Wang
-------------------------- --------------------------
Dr. Norman Schechter Dr. Zhai-Mei Wang
Investigator Investigator
<PAGE>
Collaborative Research Agreement between PIRC and Penn 15
Attachment 1
Description of the Collaborative Research
-----------------------------------------
and Schedule of payments
------------------------
<PAGE>
Summary of Proposed Research
[
]
<PAGE>
Collaborative Research Agreement
PI Research Corporation/University of Pennsylvania
Budget for the period March 1, 1991 to February 29, 1992
[
]
<PAGE>
Collaborative Research Agreement between PIRC and Penn 16
Attachment 2
Additional Terms for License Agreement
--------------------------------------
B. In the event that Sponsor exercises its option
under Section 5.4 of the Agreement to obtain an exclusive license in
or to a University Invention or to the University's undivided interest
in a Joint Invention (collectively, "Additional Licensed Technology")
that are not included under the definition of Licensed Patents in the
License Agreement and/or are not related to [ ], the
parties shall execute a written addendum to the License Agreement
making Additional Licensed Technology subject to all the terms and
conditions of the License Agreement with the exception that Minimum
Royalties for Additional Licensed Technology as otherwise described in
Paragraph 3.4 of the License Agreement shall be administered according
to the following schedule:
Minimum Royalty Year Beginning
--------------- --------------
[ ] [ ] Anniversary of
Addendum
[ ] Each Anniversary of Addendum
thereafter
B. 1.2. University shall not receive an up-front payment or
additional stock for Additional Licensed Technology. Royalties will be
paid on Additional Licensed Technology to the extent that such
Additional Licensed Technologies are incorporated in the sale of
Licensed Products.
<PAGE>
Collaborative Research Agreement between PIRC and Penn 17
Attachment 3
Form of Confidentiality Agreement
-------------------------------------
<PAGE>
CONFIDENTIALITY AGREEMENT
(Acceptable Form Under Paragraph 8.1 (c) of License Agreement and
Paragraph 6.1.3 of Collaborative Research Agreement)
This Agreement is by and between ______________________ an
employee of the University of Pennsylvania ("the University" located
in Philadelphia, PA 19104 (hereinafter referred to as"Recipient"); and
PI Research Corporation, a corporation organized and existing under
the laws of Delaware (hereinafter referred to as "Company").
RECITALS
WHEREAS, a License Agreement, dated October 1, 1991 and a
Collaborative Research Agreement dated March 1, 1991 are in place
between the University and Company in the field of protease inhibitors
with Recipient serving as an Investigator or other researcher for the
University; and
WHEREAS, Company anticipates conducting research in, or working
with third parties that are conducting research in, the field of
protease inhibitors, and may develop or have access to a body of
technical, economic and business information and/or material samples
(hereinafter collectively referred to as "Information") which Company
considers proprietary; and
WHEREAS, in order for Company to conduct research under the
Collaborative Research Agreement with University, or for Company to
facilitate the transfer of technology under the License Agreement, it
may be necessary for Company to disclose to and/or provide Recipient
with Information; and
WHEREAS, the University bears no institutional responsibility to
receive or maintain in confidence such Information, but will allow
Recipient to enter this Agreement on an individual basis in connection
with the Collaborative Research Agreement and the License Agreement;
and
WHEREAS, Recipient is willing to accept as an individual
Information from Company under the terms and conditions set forth
herein in order to conduct the work contemplated by the Collaborative
Research Agreement and/or participate in the transfer of technology
from University to Company under the License Agreement (hereinafter
collectively referred to as "Program Performance").
<PAGE>
Confidentiality Agreement Page 2
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein, the parties do agree as follows:
1. When Information is clearly marked "Confidential or later
confirmed in writing to be confidential, Recipient agrees to keep the
Information in strict confidence and not to disclose or otherwise use
the Information for any purpose other than Program Performance without
the prior written consent of Company. Accordingly, Recipient agrees to
take all reasonable precautions to prevent the unauthorized disclosure
to any third party of the Information received from Company. Recipient
agrees to disclose such Information only to University employees and
solely to those University employees who:
(a) Recipient knows have entered into a confidentiality agreement
in the form of this Agreement which was signed by Company and which
concerns the Information; and
(b) need to know the Information because they are assisting
Recipient in the Program Performance.
2. The above notwithstanding, Recipient's obligation of
confidence with respect to the Information disclosed or developed
hereunder shall not include:
(a) Information which, at the time of disclosure to
Recipient, is published, known publicly or otherwise becomes part
of the public domain, through no fault of Recipient;
(b) Information which, after disclosure to Recipient, is
published or becomes known publicly or otherwise becomes part of
the public domain through no fault of Recipient;
(c) Information which, prior to the time of disclosure to
Recipient, is known to Recipient, as evidenced by Recipient's
written records; and
(d) Information which has been disclosed to Recipient in good
faith by a third party who has not, or is not, under any
obligation of confidence or secrecy to Company at the time said
third party discloses to Recipient.
3. No rights or license to use any Information disclosed
hereunder, either expressed or implied, is granted by Company.
<PAGE>
Confidentiality Agreement Page 3
4. The obligations of confidentiality and nonuse set forth
herein with respect to any particular Information shall remain in
effect for a period of five (5) years after the date of disclosure of
that Information, or for as long as Company has a documentable
confidentiality obligation to a third party for Information disclosed
to Recipient, whichever is longer.
IN WITNESS WHEREOF, the parties intending to be legally bound have
caused this Agreement to be executed by themselves or by their duly
authorized representatives as of the last date written below.
For PI Research Corporation For Recipient
By: By:
------------------------ ----------------------
Printed Printed
Name: Name:
---------------------- --------------------
Title: Date:
--------------------- --------------------
Date:
----------------------
