NON-EXCLUSIVE PATENT LICENSE AGREEMENT by and between PACIFIC BEACH BIOSCIENCES, INC and MERCK SHARP & DOHME CORP.

Exhibit 10.4

Execution version

 

 

 

NON-EXCLUSIVE PATENT LICENSE AGREEMENT

by and between

PACIFIC BEACH BIOSCIENCES, INC

and

MERCK SHARP & DOHME CORP.

 

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NON-EXCLUSIVE PATENT LICENSE AGREEMENT

THIS AGREEMENT, effective as of November 4, 2009 (the “Effective Date”), by and between Pacific Beach Biosciences, Inc, a corporation organized and existing under the laws of Delaware with its principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ (“PBBio”) and Merck Sharp & Dohme Corp. (“Merck”).

 

BACKGROUND:

In consideration of the mutual promises and covenants contained in this Agreement, PBBio and Merck agree as follows:

 

Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective meanings set forth below:

 

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stock or general partnership interest are owned, controlled or held, directly or indirectly, by a corporation or business entity described in (i) or (ii).

PBBio hereby grants to Merck a non-exclusive worldwide license, sublicensable only to Merck Affiliates and Related Parties, to practice under the Patent Rights in the Field to make, have made, use and import the Technology to research, develop, make, have made, use, import, offer for sale and sell Product

 

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(the “License”). Any Related Party to whom a sublicense is to be granted under the Patent Rights must agree in writing to be bound by terms and conditions consistent with those in this Agreement.

Except as specifically set forth in this Agreement, neither Party shall acquire any license or other intellectual property interest, by implication or otherwise, in any information disclosed to it under this Agreement or under any patents or patent applications owned or controlled by the other Party (or in the case of Merck, any Merck Affiliates).

In consideration for the License, and subject to the terms and conditions contained in this Agreement, Merck shall pay to PBBio Four Hundred Eighty Thousand Dollars ($480,000.00) no later than thirty (30) days after the Effective Date.

Subject to the terms and conditions of this Agreement, Merck shall pay to PBBio the following amounts (each a “Milestone Payment”) with respect to each of the following events (each, a “Milestone”), if Merck achieves the Milestone related to a Milestone Payment.

 

            Each Milestone Payment is payable only once on the first occurrence on the specified Milestone. Merck shall notify PBBio in writing within [*] ([*]) days following the achievement of each Milestone, and make such Milestone Payment within [*] ([*]) days after such notice.

All payments by Merck under this Agreement are deemed “Non-Royalty Sublicensing Revenue” pursuant Section 4.2 (c) of the UCB Celltech License Agreement, and not “Royalty Sublicensing Income” (as such terms are defined in the UCB Celltech License Agreement).

PBBio shall be liable for all income and similar taxes (including interest) (“Taxes”) imposed upon any payments made by Merck to PBBio under this Article 3 (“Agreement Payments”). If applicable laws,

 

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rules or regulations require the withholding of Taxes, Merck shall make such withholding payments and shall subtract the amount thereof from the Agreement Payments. Merck shall submit to PBBio appropriate proof of payment of the withheld Taxes as well as the official receipts within a reasonable period of time. Merck shall provide PBBio reasonable assistance in order to allow PBBio to obtain the benefit of any present or future treaty against double taxation which may apply to the Agreement Payments.

(a)        to the best of PBBio’s knowledge, the Patent Rights exist and are not invalid or unenforceable, in whole or in part;

(b)       to the best of PBBio’s knowledge, it has the full right, power and authority to enter into this Agreement and grant the License;

(c)        to the best of PBBio’s knowledge, it has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in Patent Rights in any manner that is inconsistent with the rights granted under this Agreement;

(d)       to the best of PBBio’s knowledge, it is the sole and exclusive owner and/or licensee of the Patent Rights; and

 

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EXCEPT AS EXPRESSLY PROVIDED IN SECTION 4.1 OR 4.2, PBBIO MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, RELATING TO THE PATENT RIGHTS, AND HEREBY DISCLAIMS ANY AND ALL OTHER WARRANTIES THAT MAY ARISE BY OPERATION OF LAW, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSES.

PBBio shall give notice to Merck of the lapse, revocation, surrender, invalidation or abandonment of any Patent Rights licensed to Merck promptly after PBBio becomes aware of any such event or action.

This Agreement is effective as of the Effective Date and unless terminated earlier pursuant to Sections 5.2 or 5.3, this Agreement shall continue in effect on a country-by-country until upon expiration of the last to expire Patent Rights in such country. Expiration or termination of this Agreement shall not relieve the Parties of any obligation, and is without prejudice to the rights of either Party against the other, accrued or accruing under this Agreement prior to expiration or termination, including any such Milestone Payment obligations that have accrued prior to the expiration or termination date.

Merck has the right to terminate this Agreement at any time in its sole discretion by giving thirty (30) days’ advance written notice to PBBio. If Merck terminates this Agreement before the achievement of the Milestone 1 and payment of the Milestone Payment 1 specified in Section 3.2, then Merck shall make Milestone Payment 1 to PBBio within 30 days of the effective date of such termination. Merck shall not be obligated to make such payment if Merck terminates this Agreement as a result of the uncured breach of this Agreement by PBBio.

 

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PBBio has the right to terminate this Agreement at any time upon written notice if Merck is in material breach of this Agreement and has not cured such material breach within ninety (90) days after written notice from PBBio requesting cure of the breach.

Expiration or termination of this Agreement shall not relieve the Parties of any obligation, and is without prejudice to the rights of either Party against the other, accrued or accruing under this Agreement prior to expiration or termination. The provisions of Articles 1, 3.2, 4 and 6, and any and all rights and obligations of the Parties thereunder, as well as any other provision hereunder which by its nature is intended to survive, survive any expiration or termination of this Agreement.

Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent that such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including, but not limited to, embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party. The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances.

Except as provided in this Section 6.2, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by Merck without the consent of PBBio; provided, however, that Merck may, without such consent, assign this Agreement and its rights and obligations hereunder to a Merck Affiliate, or in connection with the transfer or sale of all or substantially all of its assets related to the subject matter of this Agreement, or in the event of its merger or consolidation or change in control or similar transaction. Any attempted assignment not in accordance with this Section 6.2 shall be void. Any permitted assignee shall assume all assigned obligations under this Agreement.

If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

 

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All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or express courier), sent by internationally-recognized express courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

 

or to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.

The Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to principals of conflicts of law thereof, without reference to any rules of conflict of laws or renvoi.

 

This Agreement, together with the Exhibit 4.2 letter from UCB Celltech, contains the entire understanding of the Parties with respect to the License. Any other express or implied agreements and understandings, either oral or written, with regard to the License are superseded by the terms of this

 

[*] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

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Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties.

No disclosure of the existence, or the terms, of this Agreement may be made by either Party, and neither Party shall use the name, trademark, trade name or logo of the other Party, its Affiliates or their respective employees in any publicity, promotion, news release or disclosure relating to this Agreement or its subject matter, without the prior express written permission of the other Party, except as may be required by law.

The captions to the several Articles and Sections are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections.

It is expressly agreed that PBBio and Merck shall be independent contractors and that the relationship between the Parties shall not constitute a partnership, joint venture or agency. Neither PBBio nor Merck shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

The waiver by either Party hereto of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party, whether of a similar nature or otherwise.

No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

This Agreement may be executed in two or more counterparts (facsimile and electronic transmission included), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. After facsimile or electronic transmission, the Parties agree to execute and exchange documents with original signatures.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

 

 

 

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Schedule A :

PMTi-3

[*]

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UCB Letter Exhibit 4.2

 

 

 

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