EXHIBIT 10.26
LICENSE AGREEMENT
between
LIPOSOME TECHNOLOGY, INC.
and
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
TABLE OF CONTENTS
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.
TABLE OF CONTENTS
Page
1. DEFINITIONS.................................................................................. 2
2. GRANT........................................................................................ 4
3. SUBLICENSES.................................................................................. 5
4. LICENSE ISSUE FEE............................................................................ 8
5. ROYALTIES.................................................................................... 8
6. DUE DILIGENCE................................................................................ 10
7. OUARTERLY REPORTS............................................................................ 12
8. BOOKS AND RECORDS............................................................................ 13
9. LIFE OF THE AGREEMENT........................................................................ 14
10. TERMINATION BY THE REGENTS................................................................... 15
11. TERMINATION BY THE LICENSEE.................................................................. 15
12. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION.................................... 16
13. PATENT PROSECUTION AND MAINTENANCE........................................................... 16
14. PATENT MARKING............................................................................... 17
15. USE OF NAMES. TRADE NAMES, AND TRADEMARKS.................................................... 17
16. WARRANTY BY THE REGENTS...................................................................... 17
17. INFRINGEMENT................................................................................. 18
18. WAIVER....................................................................................... 21
19. MOST FAVORED LICENSEE........................................................................ 21
20. ARBITRATION.................................................................................. 22
21. ASSIGNABILITY................................................................................ 22
22. INDEMNITY.................................................................................... 22
23. LATE PAYMENTS................................................................................ 23
24. FOREIGN LICENSE REGISTRATION................................................................. 23
25. NOTIFICATION AND AUTHORIZATION UNDER DRUG PRICE
COMPETITION AND PATENT TERM RESTORATION ACT.................................................. 23
26. NOTICES...................................................................................... 24
27. GOVERNING LAWS............................................................................... 25
28. FORCE MAJEURE................................................................................ 25
29. MISCELLANEOUS................................................................................ 25
i.
UC Case: 77-151-4 (▇▇▇▇)
040986
LICENSE AGREEMENT
-----------------
THIS LICENSE AGREEMENT is made and entered into this 1st day of August 1986
by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, having statewide
administrative offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
hereinafter referred to as "The Regents", and LIPOSOME TECHNOLOGY INC., a
corporation having a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter referred to as the "Licensee".
W I T N E S S E T H:
WHEREAS, certain inventions, generally characterized as method of producing
liposomes [*], hereinafter collectively referred to as "the Invention", were
made in the course of research at the University of California, [*] by [*] and
are covered by Regents' Patent Rights as defined below;
WHEREAS, the Invention was made in the course of research sponsored in part
by the U.S. Department of Health and Human Services, hereinafter referred to as
"DHHS", and as a consequence this license is subject to overriding obligations
to the federal government;
[*] =CONFIDENTIAL TREATMENT REQUESTED
1.
WHEREAS, The Regents have elected to retain Patent Rights in and to the
Invention and to administer the Invention according to Public Law 96-517;
WHEREAS, The Regents are desirous that the Invention be developed and
utilized to the fullest extent so that the benefits can be enjoyed by the
general public;
WHEREAS, the Licensee is desirous of obtaining certain rights from The
Regents for the commercial development, use, and sale of the Invention, and The
Regents are willing to grant such rights; and
WHEREAS, the Licensee represents that it has the manufacturing facilities,
know-how, wherewithal, intent and desire to develop the Invention in accordance
with the terms of this Agreement for commercial use and desires to acquire
certain rights to manufacture, use and sell the Invention in the Territory, as
defined below;
NOW, THEREFORE, for and in consideration of the covenants, conditions and
undertakings hereinafter set forth, it is agreed by and between the parties, as
follows:
1. DEFINITIONS
----------------
1.1 "Regents' Patent Rights", as used herein, means patent rights in and
to the Invention, including, any subject matter claimed in or covered by any of
the U.S. patents and foreign patent applications set forth in Exhibit "A",
attached hereto and made a part hereof; any continuing or corresponding
applications thereof; any patents issuing on said applications or continuing or
corresponding applications including any and all extensions, sustitutions,
renewals, reissues or additions of or to any of the aforesaid patents and patent
applications.
1.2 "Licensed Products", as used herein, means any product, apparatus, kit
or component part thereof, or other subject matter whose manufacture, use, or
sale is covered by any Valid Claim or Claims included within Regents' Patent
Rights.
[*] =CONFIDENTIAL TREATMENT REQUESTED
1.3 "Licensed Method", as used herein, means any method, procedure,
process or other subject matter whose use, or practice is covered by any Valid
Claim or Claims included within Regents' Patent Rights.
1.4 ". . . covered by . . ." as used herein, means Licensed Products that
when made, used, or sold or a Licensed Method which when practiced would
constitute, but for the license granted to the Licensee pursuant to this
Agreement, an infringement of any Valid Claim or Claims of Regents' Patent
Rights.
1.5 "Net Selling Price", as used herein, means the gross invoice price of
Licensed Products sold for cash or any other consideration to unaffiliated
customers by Licensee, less the sum of the following deductions where
applicable: cash, trade or quantity discounts, if any; sales, use, tariff,
import/export duties or other excise taxes imposed upon particular sales;
transportation charges; and allowances or. credits to customers because of
rejections, returns, retroactive price deductions, and all other invoiced
allowances and adjustments actually credited to customers, whether during the
specific royalty period or not.
1.6 "Valid Claim", as used herein, means either (a) a claim of an issued
and unexpired patent included within Regents' Patent Rights which has not been
held unenforceable, unpatentable or invalid by a decision of a court or
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer; or (b) a claim of a pending patent
application included within Regents' Patent Rights.
1.7 "Affiliate", as used herein, means any corporation which controls, is
controlled by, or is under common control with, a party to this Agreement. A
corporation shall be regarded
[*] =CONFIDENTIAL TREATMENT REQUESTED
as in control of another corporation if it owns or directly or indirectly
controls at least 40% of the voting stock of the other corporation.
1.8 "Primary Applications", as used herein, means the use or intended use
of Licensed Products or Licensed Methods within or upon a living human body for
the purpose of preventing or treating a medical condition, where the means of
administering Licensed Products or of using Licensed Method involves either [*].
1.9 "Secondary Applications", as used herein, means the use or intended
use of Licensed Products or Licensed Methods other than those uses which
constitute Primary Applications.
1.10 "Essential Patent", as used herein, means any patent owned by
Licensee, the claims of which read on a Licensed Product and the utilization of
which is essential to either the successful manufacture of said Licensed Product
or the successful therapeutic use of said Licensed Product.
2. GRANT
-- -----
2.1 Except as otherwise provided herein, The Regents hereby grant to the
Licensee a license under Regents' Patent Rights to make, have made, use, and
sell Licensed Products and to practice Licensed Method throughout the world
where The Regents may lawfully grant such a license.
2.2 Subject to the possibility of extension as specified in paragraph 2.3,
the license granted in paragraph 2.1 shall, with regard to Primary Applications,
be exclusive from the effective date of this Agreement until the first to occur
of the following two dates: (a) five (5) years after the first commercial sale
of Licensed Product, or (b) eight (8) years after the effective date of this
Agreement. After the exclusivity period described in this paragraph 2.2, the
license as to Primary Applications will be identical to the license for
Secondary Applications.
[*] =CONFIDENTIAL TREATMENT REQUESTED
2.3 The Regents agree to make all reasonable efforts, with the assistance
of Licensee, to successfully petition DHHS for an extension to the exclusive
period specified in paragraph 2.2, as provided for in Public Law 96-517.
2.4 The license granted in paragraph 2.1 shall, with regard to Secondary
Applications, be exclusive until the expiration date of the-last to expire
patent included within Regents' Patent Rights, but with a mandatory obligation
on the part of Licensee to issue sub-licenses to interested parties, according
to the provisions of Section 3 of this Agreement.
2.5 The license granted in paragraph 2.1 shall be subject to all
applicable provisions of DHHS regulations governing licenses to inventions
funded by DHHS, and to Public Law 96-517, as amended.
2.6 The Regents expressly reserve the right to use and license others' use
of the Invention and associated technology for noncommercial educational and
research purposes.
3. SUBLICENSES
----------------
3.1 The Regents also grant to Licensee the right to issue sublicenses with
respect to the license granted in paragraph 2.1. The issuance of such
sublicenses shall be discretionary with Licensee in the case of Primary
Applications during the period of exclusivity specified in paragraph 2.2. In the
case of Secondary Applications, and Primary Applications after the period of
exclusivity, it shall be obligatory on the part of Licensee to issue sublicenses
in accordance with the provisions of this Section 3.
3.2 The Licensee agrees that it will enter into good-faith bargaining with
any responsible party which expresses interest in a non-exclusive license to the
Secondary Applications of the invention, and to Primary Applications of the
invention after the period of exclusivity for Licensee's rights to such Primary
Applications. The terms of such sublicenses
[*] =CONFIDENTIAL TREATMENT REQUESTED
shall be reasonable and substantially similar among each other. Licensee agrees
that, regarding such expressions of interest from third parties, it will:
(3.2a) Report the fact of all such inquiries to The Regents on a
quarterly basis;
(3.2b) Respond to all such inquiries with a statement to the
inquiring party to the effect that Licensee is required by The
Regents to enter into such sublicenses on reasonable terms,
and that the potential sub-licensee has a right to arbitration
should a sublicense on reasonable terms not be consummated;
and
(3.2c) Report to The Regents on a quarterly basis the progress of all
such negotiations, specifically noting each case where a
sublicense does not result.
3.3 In the event Licensee and a potential sublicensee are unable to agree
on terms for such a sublicense, then the potential sublicensee shall be offered
the opportunity to refer the reasonableness of such terms to arbitration, in
accordance with the provisions of paragraph 20.1
3.4 The Licensee shall provide The Regents with a copy of each sublicense
issued hereunder, and shall guarantee the availability of sufficient information
from such sublicensee to determine that obligations of the Licensee to The
Regents are being met.
3.5 As consideration for this right to issue sublicenses, Licensee agrees
to pay The Regents as follows:
(3.5a) [*] of all gross royalty income payable to Licensee by the
terms of each such sublicense. Such payment to The Regents
shall be made quarterly on or before the following dates each
year:
January 31
[*] =CONFIDENTIAL TREATMENT REQUESTED
April 30
July 31
October 31
Each such payment will be for royalties accruing to The
Regents within Licensee's most recently completed fiscal
quarter.
(3.5b) In the case that Licensed Products are covered by Essential
Patents, then for each such Essential Patent the Percentage
specified in paragraph (3.5a) shall be reduced by [*]
percentage points [e.g. for one Essential Patent, the
percentage of royalty income due to The Regents drops from [*]
to [*], provided however that in no case shall the percentage
of royalty income due to The Regents be below [*].
(3.5c) The sum of [*] for each sublicense issued, the payment of
which shall become due when and if a New Drug Application is
filed with the US Food and Drug Administration (FDA) by or on
behalf of such sublicensee for a Licensed Product. This
payment shall be creditable by Licensee toward royalties due
to The Regents on account of such sublicense.
(3.5d) In the event that The Regents and the Licensee are unable to
agree on whether any particular patent falls within the
definition of Essential Patent, then either party may submit
such dispute to arbitration, in accordance with the provisions
of paragraph 20.1.
3.6 Upon termination of this Agreement for any reason, The Regents, at
their sole discretion, shall determine whether any or all sublicenses shall be
cancelled or assigned to The Regents.
[*] =CONFIDENTIAL TREATMENT REQUESTED
4. LICENSE ISSUE FEE
----------------------
4.1 For the license acquired hereunder, the Licensee shall pay to The
Regents a License Issue Fee of [*] upon execution of this Agreement.
4.2 This fee is non-refundable and not an advance against earned
royalties.
5. ROYALTIES
--------------
5.1 As consideration for the license granted hereunder, the Licensee shall
pay to The Regents an earned royalty on sales by it of Licensed Products,
according to the following schedule:
(5.1a) [*] of the Net Selling Price for Licensed Products not covered
by patent claims of unaffiliated third parties to whom
Licensee is paying an ad valorum royalty based on Net Selling
-- -------
Price of such Licensed Products.
(5.1b) In all cases where Licensed Product is covered by patent
claims of unaffiliated third parties to whom Licensee is
paying an ad valorum royalty, then the royalty due The Regents
-- -------
specified in paragraph (▇.▇▇) shall be multiplied by a
fraction, the numerator of which shall be [*] and the
denominator of which shall be the sum of all royalties payable
by Licensee to unaffiliated third parties, including The
Regents, expressed as a percentage of the Net Selling Price of
Licensed Products, provided however that in no event shall the
royalty due to The Regents be reduced below [*] of Net Selling
Price.
5.2 Licensed Products shall be considered sold when used by the Licensee
or invoiced, and if not invoiced, when delivered to a non-affiliated third party
by Licensee.
5.3 Royalties accruing to The Regents shall be paid to The Regents
quarterly on or before the following dates each year:
[*] =CONFIDENTIAL TREATMENT REQUESTED
January 31
April 30
July 31
October 31
Each such payment will be for royalties accruing to The Regents within
Licensee's most recently completed fiscal quarter.
5.4 Commencing with the first January 1 occurring more than six (6) months
after the date of first commercial sale of Licensed Products, or with the first
January 1 occurring more than five (5) years after the effective date of this
Agreement, whichever is sooner, the Licensee shall pay to The Regents a minimum
annual royalty for the life of Regents' Patent Rights, according to the schedule
below:
1st January 1 [*]
2nd January 1 [*]
3rd January 1 [*]
4th and subsequent
January l's [*]
Such minimum annual royalties shall be paid through the life of the last to
expire of Regents' Patent Rights, and each payment shall be fully creditable
against total earned royalties with respect to the year in which the advance
payment is made.
5.5 Except as hereinafter provided in this paragraph 5.5, all monies due
The Regents shall be payable in United States funds collectible at par in San
Francisco, California. If at any time legal restrictions prevent the prompt
remittance of part or all royalties by the Licensee or any sublicensee with
respect to any country where a Licensed Product is sold, the Licensee or
[*] =CONFIDENTIAL TREATMENT REQUESTED
such sublicensee shall have the right and option to make such payments by
depositing the amount thereof in local currency to The Regents' account in a
bank or other depository in such country.
5.6 No royalties shall be collected or paid hereunder on Licensed Products
made, used and/or sold to the U.S. Government.
5.7 All expenses incurred by the Licensee in the payment of government
imposed maintenance fees or taxes on patent applications or patents included in
Regents' Patent Rights in any country shall be credited against royalties due to
The Regents in respect to sales of Licensed Products within such country.
5.8 In the event that any patent or any claim thereof included within
Regents' Patent Rights under which Licensee is selling a Licensed Product shall
be held invalid or unenforceable in a decision by a court of competent
jurisdiction, whether or not there is a conflicting decision by another court of
competent jurisdiction in the same country, Licensee shall not be obligated to
make further royalty payments on sales covered by such claims until such
decision shall be finally reversed by an unappealed or unappealable decree of a
court of competent jurisdiction of higher dignity, in which event royalty
payments shall be resumed and the payments not theretofore made shall become due
and payable. Notwithstanding the foregoing, Licensee shall not be relieved from
paying royalties that accrued before such decision.
6. DUE DILIGENCE
------------------
6.1 The Licensee, upon execution of this Agreement, shall diligently
proceed with the development, manufacture and sale of Licensed Products.
6.2 The Licensee shall be entitled to exercise prudent and justifiable
business judgment in meeting its due diligence obligations hereunder.
[*] =CONFIDENTIAL TREATMENT REQUESTED
6.3 Subject to the provisions of paragraph 6.2, the Licensee shall
endeavor to obtain all necessary approvals for the manufacture, use and sale of
Licensed Products in the United States. Upon obtaining regulatory approval to
market a Licensed Product in a particular country, and, where applicable, a
government reimbursement price, Licensee or such Affiliate or other sublicensee
shall proceed in due course with the commercial introduction and marketing of
such Licensed Product in such country.
6.4 The Licensee shall keep The Regents informed as to the progress in the
development and testing of all Licensed Products and the preparing, filing, and
obtaining of the approvals necessary for marketing. Beginning July 1, 1986 and
semi-annually thereafter, the Licensee shall submit to The Regents a progress
report covering the Licensee's activities related to the development and the
securing of the requisite approvals. These reports shall be made until the date
of first commercial sale of Licensed Product.
6.5 Subject to the provisions of paragraph 6.2, Licensee agrees to use its
best efforts:
a) to file an NDA for a Licensed Product with the FDA within seven
(7) years after the effective date of this Agreement;
b) to market such Licensed Product in the United States within six
(6) months after receiving final approval from FDA of such Licensed
Product's NDA; and
c) following commencement of marketing, to reasonably fill the market
demands for such Licensed Products.
If Licensee shall fail to fulfill its obligations under subparagraphs (a)
through (c) above, then The Regents shall have the right and option to convert
the Licensee's exclusive license to a nonexclusive license, in addition to its
right of termination pursuant to paragraph 10.1 of this
[*] =CONFIDENTIAL TREATMENT REQUESTED
Agreement. For purposes of this Article 6, the term "best efforts"' shall mean
efforts consistent with those the Licensee would exercise on its other
commercial projects or products of comparable commercial value.
6.6 To exercise the right to terminate or to convert the license to a
nonexclusive license for lack of diligence, providing that arbitration has not
been requested, The Regents must give the Licensee written notice of any
deficiency. The Licensee thereafter shall have sixty (60) days to cure the
deficiency or to request arbitration. If The Regents have not received a written
request for arbitration or if the deficiency has not been cured by the end of
the sixty (60) day period, then The Regents may, at any time thereafter and at
their option, terminate the license or convert the Licensee's exclusive license
to a nonexclusive license by giving written notice to the Licensee.
7. QUARTERLY REPORTS
----------------------
7.1 Commencing with the quarter in which the first commercial sale of
Licensed Product takes place, Licensee will make quarterly reports to The
Regents on or before each January 31, April 30, July 31 and October 31 of each
year. Each such report will cover Licensee's most recently completed fiscal
quarter and will show (a) the gross sales and the Net Selling Price of Licensed
Products sold by the Licensee during the most recently completed fiscal quarter;
(b) the gross royalty income due to Licensee from each sublicense; (c) the
royalties, payable in U.S. dollars, which shall have accrued hereunder with
respect to such sales and such royalty accruals; (d) the exchange rates used in
determining the amount of U.S. dollars. If no sales of Licensed Products have
been made during any reporting period, a statement to this effect shall be
required.
7.2 With respect to sales of Licensed Products invoiced in U.S. dollars,
the gross sales, Net Selling Price, and royalty payable shall be expressed in
U.S. dollars. With respect to
[*] =CONFIDENTIAL TREATMENT REQUESTED
sales of Licensed Products invoiced in currency other than U.S. dollars, the
gross sales, Net Selling Price, and royalty payable shall be expressed in the
domestic currency of the party making the sale together with the U.S. dollar
equivalent of the royalty payable, calculated using the appropriate selling rate
for such currency quoted in the Continental terms method of quoting exchange
rates (local currency per U.S. $1) in New York, New York, on the last day of the
reporting period. If any sublicensee makes any sales invoiced in a currency
other than its domestic currency, the gross sales and Net Selling Price shall be
converted to its domestic currency in accordance with the sublicensee's normal
accounting practice.
7.3 The Licensee also agrees to report to The Regents the date of the
first commercial sale of Licensed Product within thirty (30) days of its
occurrence in each country.
8. BOOKS AND RECORDS
----------------------
8.1 The Licensee shall keep books and records accurately showing all
Licensed Products manufactured or sold by it under the terms of this Agreement.
Upon written request and after reasonable notice, not more often than once in
each year, Licensee shall permit a representative selected by The Regents,
except one to whom Licensee has some reasonable objection, to have access during
normal business hours to such records of Licensee as may be reasonably necessary
to determine, in respect of any Licensee fiscal year ending not more than forty-
eight (48) months prior to the date of such request, the correctness of any
report and/or payment made under this Agreement. Licensee shall include in each
sublicense granted pursuant to this Agreement a provision requiring the
sublicensee to keep and maintain records of sales made pursuant to such
sublicense and to grant access to such records by The Regents' representative.
Subject to applicable Federal and State Freedom of Information laws, The Regents
agree that all information subject to review hereunder or under any such
sublicense is confidential and that The Regents shall and shall cause their
representative to retain all such
[*] =CONFIDENTIAL TREATMENT REQUESTED
information in confidence. Upon the expiration of forty-eight (48) months
following the end of any fiscal year and absent a showing of fraud, the
calculation of royalties payable with respect to such year shall be binding and
conclusive upon The Regents; and Licensee and its sublicensees shall be released
from any liability or accountability with respect to royalties for such year.
8.2 The fees and expenses of the representatives performing such an
examination shall be borne by The Regents. However, if an error in favor of The
Regents in royalties of more than five percent (5%) of the total royalties due
hereunder for the Licensee fiscal year being reviewed is discovered by the
representatives of The Regents, then the fees and expenses of these
representatives shall be borne by the Licensee.
8.3 These books and records shall be preserved for at least forty-eight
(48) months from the end of the fiscal year to which they pertain.
9. LIFE OF THE AGREEMENT
--------------------------
9.1 Unless otherwise terminated by operation of law or by acts of the
parties pursuant to Articles 10 or 11, this Agreement shall terminate upon
expiration of the last to expire of the issued patents included in Regents'
Patent Rights.
9.2 Upon termination of this Agreement pursuant to this Article 9, Article
10 or Article 11, the rights and obligations of the parties shall cease, except
for rights, obligations and liabilities of the parties accrued prior to such
termination.
10. TERMINATION BY THE REGENTS
-------------------------------
10.1 It is expressly agreed that if the Licensee should fail to deliver to
The Regents any statement or report when due, or fail to pay any royalty at the
time that the same should be due or if the Licensee should violate or fail in
any material respect to perform any covenant, condition, or undertaking of this
Agreement on its part to be performed hereunder, then and in such event The
Regents may give written notice of such default to the Licensee. If the Licensee
should fail
[*] =CONFIDENTIAL TREATMENT REQUESTED
to repair such default within sixty (60) days of such notice, The Regents shall
have the right to terminate this Agreement and the license herein by written
notice to the Licensee. Upon such notice of termination to the Licensee, this
Agreement shall automatically terminate. Such termination shall not relieve the
Licensee of its obligation to pay any royalty or license fees due or owing at
the time of such termination and shall not impair any accrued right of The
Regents.
11. TERMINATION BY THE LICENSEE
--------------------------------
11.1 The Licensee shall have the right to terminate this Agreement, in
whole or as to any specified patent or any claim of such patent, at any time,
and from time to time, by giving notice in writing to The Regents. Such
termination may be made with respect to one or more countries without affecting
this Agreement or the licenses granted hereunder in any other country. Such
termination shall be effective ninety (90) days from such notice.
11.2 Any termination pursuant to the above paragraph shall not relieve the
Licensee of any obligation or liability accrued hereunder prior to such
termination, or rescind or give rise to any right to rescind anything done by
the Licensee or any payments made or other consideration given to The Regents
hereunder prior to the time such termination becomes effective, and such
termination shall not affect in any manner any rights of The Regents arising
under this Agreement prior to such termination.
12. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION
--------------------------------------------------------------
12.1 Upon termination of this Agreement by either party pursuant to
Articles 10 or 11, the Licensee shall provide The Regents with a written
inventory of all Licensed Products in process of manufacture, in use or in stock
and shall have the privilege of disposing of such Licensed Products within a
period of ninety (90) days, provided, however, that all such Licensed Products
shall be subject to the terms of this Agreement.
13. PATENT PROSECUTION AND MAINTENANCE
---------------------------------------
[*] =CONFIDENTIAL TREATMENT REQUESTED
13.1 The Regents shall diligently prosecute and maintain any patent
applications and patents included in Regents' Patent Rights using counsel of
their choice and after due consultation with the Licensee. The Regents shall
provide the Licensee with copies of all relevant documentation on a confidential
basis so that the Licensee may be informed and apprised of the continuing
prosecution and maintenance.
13.2 The Regents shall use their best efforts to amend any patent
application to include claims reasonably requested by the Licensee.
13.3 The preparation, filing and prosecuting of all foreign patent
applications licensed herein and set forth in Exhibit "A", as well as the
maintenance of all resulting patents, shall be at the sole expense of the
Licensee. Royalties payable under this Agreement for sale of Licensed Products
in any given country covered by such foreign patent rights may be reduced by a
credit equal to the costs of such expenses. Such patents shall be held in the
name of The Regents and shall be obtained using counsel of The Regents' choice.
13.4 The Licensee's obligation to underwrite and to pay foreign patent
prosecution costs shall continue for so long as this Agreement remains in
effect, provided, however, that the Licensee may terminate its obligations with
respect to any foreign patent application or patent upon three (3) months'
written notice to The Regents. The Regents may continue prosecution and/or
maintenance of such application(s) or patent(s) at their sole discretion and
expense; provided, however, that the Licensee shall have no further right or
licenses thereunder.
14. PATENT MARKING
-------------------
14.1 The Licensee agrees to ▇▇▇▇ all Licensed Products made, used or sold
under the terms of this Agreement, or their containers, in accordance with the
applicable patent marking laws.
15. USE OF NAMES, TRADE NAMES, AND TRADEMARKS
----------------------------------------------
[*] =CONFIDENTIAL TREATMENT REQUESTED
15.1 Nothing contained in this Agreement shall be construed as conferring
any right to use in advertising, publicity, or other promotional activities any
name, trade name, trademark, or other designation of either party hereto
(including any contraction, abbreviation or simulation of any of the foregoing).
The use of the name, The Regents of the University of California, or the name of
any U.C. Campus or facility is expressly prohibited.
15.2 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 hereunder, without the express written
approval of the other party.
16. WARRANTY BY THE REGENTS
----------------------------
16.1 The Regents warrant that they have the lawful right to grant this
license.
16.2 The Regents make no express or implied warranties of merchantability
or fitness of the Invention for a particular purpose.
16.3 Nothing in this Agreement shall be construed as:
a) a warranty or representation by The Regents as to the validity or
scope of any Regents' Patent Rights; or
b) a warranty or representation that anything made, used, sold or
otherwise disposed of under any license granted in this Agreement
is or will be free from infringement of patents of third parties;
or
c) an obligation to bring or prosecute actions or suits against
third parties for patent infringement except as provided in
Article 17; or
d) conferring by implication, estoppel or otherwise any license or
rights under any patents of The Regents other than Regents'
Patent Rights as defined herein, regardless of whether such
patents are dominant or subordinate to Regents' Patent Rights; or
[*] =CONFIDENTIAL TREATMENT REQUESTED
e) an obligation to furnish any know-how not provided in Regents'
Patent Rights.
17. INFRINGEMENT
-----------------
17.1 In the event that the Licensee shall learn of the infringement of any
patent licensed under this Agreement, the Licensee shall call The Regents'
attention thereto in writing. Both Parties to this Agreement agree that during
the period and in a jurisdiction where the Licensee has exclusive rights under
this Agreement, neither will notify a third party of the infringement of any of
Regents' Patent Rights without first obtaining the consent of the other Party,
which consent shall not be unreasonably denied. Both Parties shall use
reasonable efforts in cooperation with each other to terminate such infringement
[*]. "Reasonable efforts", as contemplated in this paragraph 17.1, shall not be
construed as obligating the Licensee to agree to the granting of a license under
Regents' Patent Rights to a third party in order to terminate such infringement.
The obligation to use reasonable efforts to terminate an infringement shall not
be construed as limiting or restricting Licensees' right to request or bring
suit as specified in paragraphs 17.2 and 17.3.
17.2 The Licensee may request that The Regents take legal action against
the infringement of Regents' Patent Rights. Such request shall be made in
writing and shall include reasonable evidence of such infringement and damages
to the Licensee. If the infringing activity has not been abated within ninety
(90) days following the effective date of such request, The Regents shall have
the right to :
(17.2a) commence suit on their own account; or
(17.2b) refuse to participate in such suit, and The Regents shall
give notice of their election in writing to the Licensee by
the end of the one-hundredth (100th) day after receiving
notice of such request from the Licensee. The Licensee may
thereafter bring suit for patent infringement if and only if
[*] =CONFIDENTIAL TREATMENT REQUESTED
The Regents elect not to commence suit (other than as nominal
party plaintiff) and if the infringement occurred during the
period and in a jurisdiction where the Licensee had exclusive
rights under this Agreement. However, in the event Licensee
elects to bring suit in accordance with this paragraph, The
Regents may thereafter join such suit at their own expense.
17.3 In the case of an infringement of Regents' Patent Rights as defined
in Section 271(e) of Title 35 of the United States Code, the Licensee shall
provide The Regents with written notice of such occurrence and shall provide The
Regents with copies of any notice which the Licensee receives as required by the
Drug Price Competition and Patent Term Restoration Act (Public Law 98-417,
------------------------------------------------------
hereinafter, "the Act") to be given by an applicant for an abbreviated NDA or a
"paper NDA" pursuant to section 101 or 103 of the Act to a holder of an approved
NDA. If the Licensee wishes action to be taken against such infringement, as
provided in the Act, Licensee shall request such action in written notice to The
Regents. Within thirty (30) days of receiving said request, The Regents shall
give written notice to the Licensee of its election to:
(17.3a) commence suit on their own account; or
(17.3b) refuse to participate in such suit.
The Licensee may thereafter bring suit for patent infringement as provided by
the Act if and only if The Regents elect not to commence suit (other than as
nominal party plaintiff) and if the infringement occurred during the period that
the Licensee had exclusive rights in the United States under this Agreement.
However, in the event Licensee elects to bring suit in accordance with this
paragraph, The Regents may thereafter join such suit at their own expense.
17.4 Any legal action as is brought shall be at the expense [*]. Any
damages or costs recovered by The Regents in connection with a lawsuit filed by
them hereunder, after first
[*] = CONFIDENTIAL TREATMENT REQUESTED
reimbursing The Regents for their costs and expenses of the lawsuit, shall be
[*]. Any damages or costs recovered in connection with any lawsuit filed by
Licensee hereunder, after reimbursing the Licensee for its costs and expenses in
connection with the lawsuit, shall be divided as follows: [*] to The Regents and
[*] to the Licensees. Nothing herein obligates The Regents or the Licensee to
enter into any litigation of any nature whatsoever with regard to Regents'
Patent Rights.
17.5 Each party agrees to cooperate with the other in litigation
proceedings instituted hereunder but at the expense of the party on account of
whom suit is brought. Such litigation shall be controlled by the party bringing
the suit, except when such suit is brought jointly, in which case The Regents
shall control. The Regents, at their own expense, may be represented by counsel
of their choice pursuant to The Regents' determination in any suit brought by
the Licensee.
17.6 In the event that The Regents refuse to participate in a suit and the
Licensee brings same, the Licensee may Withhold royalties payable to The Regents
during the pendency of the suit and until said suit has been finally concluded.
To the extent that the Licensee does not recover attorneys' fees and other out-
of-pocket costs as a result of such litigation, such withheld royalties may be
applied to the Licensee's expenses (out-of-pocket and in-house) incurred in
connection with such suit and the Balance of such withheld royalties, if any,
shall be paid to The Regents upon disposition of the suit; provided, however,
that if as a result of such suit, all claims of patents included within Regents'
Patent Rights under which Licensee is selling a Licensed Product shall be held
invalid, Licensee may retain the balance of such withheld royalties which
pertain to such Licensed Product until such decision shall be finally reversed
by an unappealed or unappealable decree of a court of competent jurisdiction and
higher dignity.
[*] = CONFIDENTIAL TREATMENT REQUESTED
18. WAIVER
-----------
18.1 It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be deemed a
waiver as to any subsequent and/or similar breach or default.
19. MOST FAVORED LICENSEE
--------------------------
19.1 Any provision of this Agreement to the contrary notwithstanding, if
when otherwise permitted by the terms of this Agreement, The Regents grant a
third party a license under Regents Patent Rights (other than the U.S.
Government License), The Regents shall forward a copy of such third party
license to Licensee. If such third party license contains royalty terms more
favorable than those contained herein, Licensee shall have the right and option
to substitute said royalty terms for the respective terms of this Agreement.
20. ARBITRATION
----------------
20.1 At the request of either party, any controversy or claim-arising out
of or relating to the provisions of this Agreement shall be settled by
arbitration in accordance with the Licensing Agreement Arbitration Rules of the
American Arbitration Association, dated May 1, 1978, and judgment upon the award
rendered by the Arbitrator(s) shall be binding on the parties and may be entered
by either party in the court or forum, state or federal, having jurisdiction.
21. ASSIGNABILITY
------------------
21.1 This Agreement is binding upon and shall inure to the benefit of The
Regents, their successors and assigns, but shall be personal to the Licensee and
assignable by the Licensee only with the written consent of The Regents, which
consent shall not be unreasonably withheld; provided, however, that the
Licensee, without such consent, may assign or sell the same in connection with
the transfer or sale of all or substantially all of its business relating to
human pharmaceuticals or in the event of merger or consolidation with another
company. No
[*] = CONFIDENTIAL TREATMENT REQUESTED
assignment shall relieve either party of responsibility for any accrued
obligation which such party has hereunder. Any permitted assignee shall assume
all obligations of its assignor under this Agreement.
22. INDEMNITY
--------------
22.1 The Licensee agrees to indemnify and hold The Regents harmless
against any and all claims and liability for personal injury, product liability,
and ▇▇▇▇▇▇▇'▇ compensation arising out of the Licensee's manufacture, use and
sale of Licensed Products. The Regents shall promptly notify the Licensee in
writing of any claim or suit brought against The Regents in respect of which The
Regents intend to invoke the provisions of this Article 21. The Regents will
permit the Licensee, at its discretion, to settle any such claim or suit and
agrees to the complete control of such defense or settlement by the Licensee.
No such claim or suit shall be settled without the prior written consent of the
Licensee and the Licensee shall not be responsible for any legal fees or other
costs incurred other than as provided herein. The Regents, their employees and
agents, shall cooperate fully with the Licensee and its legal representatives in
the investigation and defense of any claims or suits to which this Article 22
applies.
23. LATE PAYMENTS
------------------
23.1 In the event royalty payments or fees are not received by The Regents
when due, the Licensee shall pay to The Regents interest charges at the rate of
ten percent (10%) per annum on the total royalties or fees due for the reporting
period.
24. FOREIGN LICENSE REGISTRATION
---------------------------------
24.1 The Licensee agrees to register this Agreement when required by the
laws of any country in the Territory, to pay all costs and legal fees connected
therewith, and shall otherwise comply with all national laws applicable to this
Agreement.
[*] = CONFIDENTIAL TREATMENT REQUESTED
25. NOTIFICATION AND AUTHORIZATION UNDER DRUG PRICE
----------------------------------------------------
COMPETITION AND PATENT TERM RESTORATION ACT
-------------------------------------------
25.1 The Regents shall notify Licensee of (a) the issuance of each U.S,
patent included within Regents' Patent Rights, giving the date of issue and
patent number for each such patent, and (b) each notice pertaining to any patent
included within Regents' Patent Rights which it receives as patent owner
pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984
(hereinafter called the "Act"), including but not necessarily limited to notices
pursuant to Sections 101 and 103 of the Act from persons who have filed an
abbreviated NDA ("ANDA") or a "paper" NDA. Such notices shall be given promptly,
but in any event within ten (10) calendar days of each such patent's date of
issue or receipt of each such notice pursuant to the Act, whichever is
applicable.
25.2 The Regents hereby authorize Licensee (a) to include in any NDA for a
Licensed Product, as Licensee may deem appropriate under the Act, a list of
patents included within Regents' Patent Rights identifying The Regents as patent
owner that relate to such Licensed Product and such other information and
Licensee in its reasonable discretion believes is appropriate to be filed
pursuant to the Act; and (b) in consultation with The Regents, to exercise any
rights that may be exerciseable by an exclusive licensee and NDA holder under
The Regents' Patent Rights. The Regents agree as patent owners under the Act to
apply for an extension of the term of any patent included within Regents' Patent
Rights, as permitted by the Act, upon request Licensee. The Regents agree to
cooperate with the Licensee in the exercise of the authorizations granted
heredin, and will execute such documents and take such additional action as the
Licensee may reasonables request in connection therewith.
26. NOTICES
------------
[*] = CONFIDENTIAL TREATMENT REQUESTED
26.1 Any payment, notice or other communication required or permitted to
be given to either party hereto shall be deemed to have been properly given and
to be effective (a) upon delivery if delivered in person, or (b) upon four days
after mailing if mailed by first-class certified mail, postage paid, to the
respective address given below, or to such other address as shall designate by
written notice given to the other party as follows:
In the case of the Licensee: LIPOSOME TECHNOLOGY, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
---------
In the case of The Regents: THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director, Patent,
-----------------
Trademark & Copyright Office
----------------------------
27. GOVERNING LAWS
-------------------
27.1 This Agreement shall be interpreted and construed in accordance with
the laws of the State of California.
28. FORCE MAJEURE
------------------
28.1 The failure by either party to perform any term of this Agreement
when caused by or resulting from fire, floods, embargoes, government
regulations, prohibitions or interventions, war, acts of war (whether war be
declared or not), insurrectios, riots, civil commotions, acts of God, or any
other cause beyond the control of such party, and which is a result thereof,
shall not constitute a default or breach under any term of this Agreement.
[*] = CONFIDENTIAL TREATMENT REQUESTED
29. MISCELLANEOUS
------------------
29.1 The headings of the several sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
29.2 This Agreement will not be binding upon the parties until it has been
signed hereinbelow by or on behalf of each party, in which event, it shall be
effective as of the date first above written.
29.3 No amendment or modification hereof shall be valid or binding upon
the parties unless made in writing and signed as aforesaid.
29.4 Both parties hereby expressly agree that it is the intention of
neither party to violate any public policy, statutory or common laws, rules,
regulations, treaty or decision of any government or agency thereof of any
country or community or association of countries; that if any word, sentence,
paragraph, clause or combination thereof of this Agreement is found, by a court
or executive body with judicial powers having jurisdiction over this Agreement
or any of the parties hereto, in a final unappealed or unappealable order, to be
in violation of any such provisions in any country or community or association
of countries, such words, sentences, paragraphs, clauses or combination shall be
inoperative in such country or community or association of countries and the
remainder of this Agreement shall remain binding upon the parties hereto.
29.5 This Agreement embodies the entire understanding of the parties and
shall supersede all previous communications, representations or understandings,
either oral or written, between the parties relating to the subject matter
hereof.
[*] = CONFIDENTIAL TREATMENT REQUESTED
IN WITNESS WHEREOF, both The Regents and the Licensee have executed this
Agreement, in duplicate originals, by their respective officers hereunto duly
authorized, on the day and year hereinafter written.
LIPOSOME TECHNOLOGY, INC. THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- -----------------------------
(Signature) (Signature)
Name Arvanitidis Name ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------- ---------------------------
(Please Print) (Please Print)
Title Chairman Title Acting Director, Patent,
----------------------- -------------------------
Trademark & Copyright
_______________________ -------------------------
Office
-------------------------
Date July 27, 1986 Date July 31, 1986
----------------------- -------------------------
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT "A"
United States Patent No. [*] entitled [*], issued on [*] to [*], and assigned to
The Regents of the University of California. Corresponding foreign Patent
Applications filed in the following countries:
Belgium
Germany (West)
France
Luxembourg
Switzerland/▇▇▇▇▇▇▇▇▇▇▇▇
United Kingdom
[*] = CONFIDENTIAL TREATMENT REQUESTED
27.