LICENSE OPTION AGREEMENT
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THIS AGREEMENT, effective the 18th day of December, 1996, is made and entered by
and between Palatin Technologies, Inc., a New Jersey corporation, with office
214 Carnegie Center, TES 100, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. (hereinafter
"PALATIN") and Nihon Medi-Physics Co. Ltd., a corporation organized and existing
under the laws of Japan having its principal place of business at ▇-▇,
▇▇▇▇▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Hyogo Pref., JAPAN 662 (hereinafter "NMP").
PALATIN and NMP (each sometimes referred to as a "PARTY" and collectively as the
"PARTIES") agree as follows:
1. BACKGROUND
1.1 PALATIN possesses certain PATENTS, patent applications, trade secrets,
know-how, process, formulae, techniques, procedures, test data and other
technical information relating to [INFORMATION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION UNDER RULE 24b-2.] Analogues which are useful in
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.] human radionuclear diagnostic imaging of [INFORMATION OMITTED AND
FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.], and are also
useful in human diagnostic imaging of other diseases and/or lesions (the
"MIDAS TECHNOLOGIES").
1.2 PALATIN desires to grant to NMP and NMP desires to receive an exclusive
option to enter into an exclusive license agreement, subject to agreement
between the PARTIES on terms to be negotiated in good-faith pursuant to and
in accordance with this AGREEMENT.
2. DEFINITIONS
2.1 PATENTS means all letters patent (including inventor's certificates),
including any substitutions, extensions, reissues, renewals, divisions,
continuations or continuations-in-part thereof or therefor. The term
"PATENTS" does not include trademarks.
2.2 MIDAS PATENTS shall mean (a) the United States and foreign patent
applications set forth in EXHIBIT-A hereto, as it may be amended from time
to time by the PARTIES; (b) any PATENTS issuing from said pending United
States and foreign patent applications or later-filed applications based
upon any of said PATENTS and applications; and (c) any continuations,
continuations-in-part directed to subject matter described in the patent
applications listed in EXHIBIT-A, divisionals, reissues or extensions of
any of the foregoing. PALATIN represents and warrants that the MIDAS
PATENTS are free of any liens or security interests in favor of third
parties, includ-
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ing, without limitation, any liens security interest in favor of Aberlyn
Capital.
2.3 FIELD shall mean human radionuclear diagnostic imaging.
2.4 PRODUCT shall mean radiopharmaceutical products, including kit format
products, developed utilizing in whole or in part the MIDAS PATENTS for use
in the FIELD.
2.5 DEVELOPMENT PROGRAM means the STEP-1 DEVELOPMENT and the STEP-2
DEVELOPMENT.
2.6 DEVELOPMENT PROGRAM RESULTS means the data, test results, technical
information and other information (whether or not patentable) which result
from or in connection with the DEVELOPMENT PROGRAM.
2.7 STEP-1 DEVELOPMENT shall mean the preclinical compound exploration and
evaluation covered by the MIDAS PATENTS performed by PALATIN with
cooperation of NMP as stipulated and scheduled in EXHIBIT-B.
2.8 STEP-2 DEVELOPMENT shall mean the pilot clinical evaluation of candidate
compound(s) for PRODUCTS performed and/or conducted by PALATIN with
cooperation of NMP as stipulated and scheduled in EXHIBIT-C.
2.9 TERM shall mean the term of this AGREEMENT, as defined in Paragraph 6.1 of
this AGREEMENT.
3. GRANT OF OPTION
3.1 Subject to the terms and conditions in this AGREEMENT, PALATIN hereby
grants to NMP an exclusive option (the "OPTION RIGHT"), exercisable in the
manner set forth in Paragraph 5.1, below, to enter into an exclusive,
world-wide license agreement (the "LICENSE AGREEMENT") with the right to
make, have made, use and/or have used, sell and have sold any PRODUCT for
use in the FIELD, with the right to grant sublicenses; provided however,
that NMP shall remain primarily liable for performance under the LICENSE
AGREEMENT notwithstanding any such sublicensing. Notwithstanding anything
to the contrary in this AGREEMENT, the PARTIES understand and agree that
PALATIN shall have the right throughout the TERM to discuss from time to
time with any third party or parties any and all MIDAS PATENTS and
know-how, other than with respect to their uses in the FIELD.
3.2 Except as expressly set forth in Paragraph 3.1, above, with respect to the
OPTION RIGHT, nothing in this AGREEMENT shall be construed to grant to NMP
any rights, title and/or interest
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of any kind whatsoever in or to the MIDAS PATENTS, any or all products of
PALATIN, and/or any or all MIDAS TECHNOLOGIES, including, without
limitation, any intellectual property rights in or to any of the foregoing.
Without limiting the foregoing, NMP shall have the right to use or have
used the DEVELOPMENT PROGRAM RESULTS, the MIDAS PATENTS, the MIDAS
TECHNOLOGIES and/or any intellectual property rights in any of the
foregoing, for purposes of determining whether to exercise the OPTION RIGHT
and for purposes of commercial development of PRODUCTS, including but not
limited to the governmental registration thereof, subject to consultation
with and prior written consent by PALATIN.
4. CONSIDERATION
4.1 In consideration of the grant of the OPTION RIGHT to NMP by PALATIN, NMP
shall pay to PALATIN, by wire transfer or cashier's or bank check with
same-day availability of funds:
4.1.1 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.] within thirty (30) days after the execution
of this AGREEMENT, and
4.1.2 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.] within thirty (30) days after the completion
of disclosure by PALATIN to NMP all DEVELOPMENT PROGRAM RESULTS
from the STEP-1 DEVELOPMENT, and
4.1.3 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.] after the completion of disclosure by PALATIN
TO NMP all DEVELOPMENT PROGRAM RESULTS from the STEP-2
DEVELOPMENT, and
4.1.4 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.] within thirty (30) days after NMP's exercise
of the OPTION RIGHT stipulated in Paragraph 5.1 hereof.
4.2 All the consideration stipulated in above Paragraph 4.1 shall be subject to
withholding tax in Japan. NMP will pay the foregoing so tax deducted and
furnish the certificate of tax payment to PALATIN. None of the
consideration stipulated in above Paragraph 4.1 shall be used to retire any
outstanding indebtedness of Palatin to Aberlyn Capital.
4.3 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.] of the aggregate consideration stipulated above in Paragraphs
4.1.1, 4.1.2, 4.1.3, and 4.1.4 shall be credited against Fifty Percent
(50%) of the payment stipulated in Paragraph 5.5.1 and One Hundred Percent
(100%) of the payments stipulated in Paragraphs 5.5.2 and 5.5.3.
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5. EXERCISE OF OPTION
5.1 At any time during the period commencing on the date of this AGREEMENT and
ending one hundred twenty (120) days after the completion of (a) disclosure
by PALATIN to NMP all of the DEVELOPMENT PROGRAM RESULTS, (b) confirmation
by PALATIN in writing to NMP that any continuations, continuations-in-part
directed to subject matter specifically described in the patent
applications listed in EXHIBIT A, divisionals, reissues or extensions of
any of the foregoing have been properly made in the United States covering
the technology derived from the STEP-1 DEVELOPMENT and STEP-2 DEVELOPMENT
(to the extent patentable), and (c) receipt by NMP from PALATIN of all the
copies of the PATENTS inclusive of those stipulated in item (b), above, NMP
may exercise the OPTION RIGHT by sending written notice to PALATIN (the
"EXERCISE NOTICE") of NMP's desire to exercise the OPTION RIGHT and to
commence negotiations on terms for a LICENSE AGREEMENT.
5.2 (a) Promptly following NMP's exercise of the OPTION RIGHT, PALATIN and NMP
shall enter into exclusive, good faith negotiations for a period (the
"NEGOTIATION PERIOD") of One Hundred Fifty (150) days, commencing with
the date of delivery of the EXERCISE NOTICE, to reach agreement on the
terms and conditions of, and to execute, the LICENSE AGREEMENT. It is
understood that the PARTIES can, by written agreement executed by both
of them, in their respective sole discretion, extend the NEGOTIATION
PERIOD beyond such One Hundred Fifty (150) days. If the PARTIES fail
to reach agreement during the NEGOTIATION PERIOD on the terms and
conditions of the LICENSE AGREEMENT, and to each execute and deliver
to the other prior to expiration of the NEGOTIATION PERIOD a manually
executed original of such agreed-upon LICENSE AGREEMENT, then PALATIN
shall, within Thirty (30) days after expiration of the NEGOTIATION
PERIOD pay to NMP the sum [INFORMATION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION UNDER RULE 24b-2.]. Subject to Paragraph 5.2(b),
below, and subject to payment by PALATIN to NMP of such amount,
PALATIN shall have the right at any time(s) thereafter, to enter into
a license agreement with any third party or parties.
(b) For a period of One Hundred Eighty (180) days following expiration of
the NEGOTIATION PERIOD (the "FIRST REFUSAL PERIOD"), PALATIN shall,
before entering into any license agreement with any third party or
parties on terms that are more favorable to such third party or
parties than the terms offered to NMP by PALATIN, deliver to NMP a
copy of the proposed license agreement (the "PROPOSED LICENSE"),
redacted to keep the identity of the third party or parties
confidential and to delete proprietary
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or confidential information of such third party or parties, but
including all Economic Terms in the PROPOSED LICENSE. NMP shall have
the right, exercisable for a period of thirty (30) days after receipt
of such copy of the PROPOSED LICENSE, to notify PALATIN in writing
(the "MATCH NOTICE") that NMP agrees to enter into a LICENSE AGREEMENT
on terms identical to those set forth in such copy of the PROPOSED
LICENSE. Within Thirty (30) business days following receipt of the
MATCH NOTICE, PALATIN shall deliver to NMP two copies of a LICENSE
AGREEMENT containing terms identical to those set forth in the
PROPOSED LICENSE, substituting only the identifying and/or proprietary
or confidential information of NMP for the identifying and/or
confidential information of the third party or parties. NMP shall,
within sixty (60) business days of receipt, execute both copies and
return them to PALATIN, together with any additional documents that
may be required by such LICENSE AGREEMENT to be delivered and/or paid
by NMP on execution. PALATIN shall execute both such copies within
five (5) business days of receipt and return one to NMP, together with
any additional documents that may be required by such LICENSE
AGREEMENT to be delivered by PALATIN on execution.
(c) Subsequent to the FIRST REFUSAL PERIOD, PALATIN shall have the
unrestricted right to enter into license agreement(s) with any and all
third parties without any obligation of any kind whatsoever to NMP.
5.3 In good faith negotiation of a LICENSE AGREEMENT as set forth in above
Paragraph 5.2, (a) NMP's contribution in the STEP-1 DEVELOPMENT and STEP-2
DEVELOPMENT, and then available market studies by the PARTIES shall be duly
considered and reflected; and (b) PALATIN's contribution in the STEP-1
DEVELOPMENT and STEP-2 DEVELOPMENT, and PALATIN's contribution with respect
to its research and development utilizing in whole or in part the MIDAS
PATENTS shall be duly considered and reflected.
5.4 (a) The LICENSE AGREEMENT shall include, without limitation: (i) the
obligation for payment by NMP to PALATIN of a royalty with respect to
PRODUCTS, which royalty shall [INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.] of NET SALES, as
defined below, and (ii) the obligation of NMP to use its best efforts
to commercialize the PRODUCTS and to make their benefits reasonably
available to the public. For the purpose of this Paragraph 5.4, "best
efforts" shall mean the same level of efforts as NMP applies to any of
its other development projects to commercialize radiopharmaceutical
products.
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(b) For the purpose of this Paragraph 5.4, NET SALES for any
quarterly period means gross sales proceeds due to or by reason
of the sale (including sales to resellers), distribution or use
of PRODUCTS by NMP and/or its AFFILIATES (as defined in Section
5.4(c), below), to parties other than NMP and/or its AFFILIATES,
less the total of the following:
(i) refunds, rebates, replacements or credits actually allowed by
NMP and/or such AFFILIATES in the ordinary course of business,
and actually taken by purchasers for return of products;
(ii) ordinary and customary trade, quantity and cash discounts
actually allowed and taken;
(iii) excise, value-added, and sales taxes directly imposed on
and with reference to particular sales of PRODUCTS and actually
paid by NMP,
(iv) shipping (transportation), shipping insurance, and handling
charges actually paid by NMP for PRODUCTS,
(v) product packaging costs actually paid by NMP for PRODUCTS,
and (vi) commissions paid to Japan Radioisotope Association. In
computing NET SALES, there shall be no deductions for any other
commissions paid, whether to non-AFFILIATES or AFFILIATES.
(c) For purposes of this AGREEMENT, the term "AFFILIATE" or "AFFILIATES"
of a PARTY means any corporation or other legal entity that directly
or indirectly controls, is controlled by, or is under common control
with, such PARTY, but only for so long as such control exists.
5.5 In connection with the LICENSE AGREEMENT, NMP shall pay to PALATIN, by wire
transfer or cashier's or bank check with same-day availability of funds:
5.5.1 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.] within thirty (30) days after the execution of
the LICENSE AGREEMENT, and
5.5.2 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.] within [INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.], and
5.5.3 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.] within thirty (30) days after [INFORMATION
OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.], and
5.5.4 [INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION
UNDER RULE 24b-2.] within thirty (30) days after [INFORMATION
OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE
24b-2.], and
The LICENSE AGREEMENT shall also provide, without limitation, that
NMP shall reimburse PALATIN for all expenses for Phase I,
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II and III clinical development and all regulatory approval costs
incurred by PALATIN in connection therewith.
5.6 All the consideration stipulated in above Paragraph 5.5 shall be subject to
withholding tax in Japan. NMP will pay the foregoing so tax deducted and
furnish the certificate of tax payment to PALATIN.
6. TERM AND TERMINATION
6.1 The term of this AGREEMENT (the "TERM") shall commence and become effective
on the date first written above and shall, unless sooner terminated
pursuant to this Paragraph 6, and shall remain effective until one hundred
and twenty (120) days after the latest to occur of:
(a) the completion of disclosure by PALATIN to NMP all of the
DEVELOPMENT PROGRAM RESULTS;
(b) confirmation by PALATIN in writing to NMP that any continuations,
continuations-in-part directed to subject matter specifically
described in the patent applications listed in EXHIBIT-A,
divisionals, reissues or extensions of any of the foregoing have
been properly made in the United States covering any MIDAS
TECHNOLOGIES derived from the STEP-1 DEVELOPMENT and STEP-2
DEVELOPMENT (to the extent patentable); and
(c) receipt by NMP from PALATIN of copies of all the MIDAS PATENTS,
inclusive of those stipulated in above item 6.1(b), above;
(d) expiration of the Exercise Period, if NMP has not delivered to PALATIN
an EXERCISE NOTICE in accordance with Paragraph 5.1, above, and paid
to PALATIN the sum of [INFORMATION OMITTED AND FILED SEPARATELY WITH
THE COMMISSION UNDER RULE 24b-2.] in accordance with Paragraph 4.1.4,
above; and
(e) if NMP has delivered to PALATIN an EXERCISE NOTICE in accordance with
Paragraph 5.1, above, and [INFORMATION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION UNDER RULE 24b-2.] in accordance with Paragraph
4.1.4, above: (i) the date PALATIN and NMP enter into the LICENSE
AGREEMENT, or (ii) expiration of the FIRST REFUSAL PERIOD.
6.2 Prior to termination, PALATIN and NMP may extend the term of this AGREEMENT
by mutual written agreement, in their respective sole discretion.
6.3 This AGREEMENT will terminate prior to expiration of the TERM:
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6.3.1 automatically, if either of the PARTIES shall enter into a
liquidating bankruptcy and/or if the business of either of the
PARTIES shall be placed in the hands of a receiver, assignee,
or trustee, whether by voluntary act or otherwise; provided
that if it is involuntary, termination shall not take place
unless the act is not reversed within ninety (90) days; or
6.3.2 upon thirty (30) days written notice if either of the PARTIES
shall be materially in breach or default of any obligation
under this AGREEMENT; provided however, the breaching or
defaulting PARTY may avoid such termination if before the end
of such period it notifies the other PARTY (1) that such
breach of default has been cured and states the manner of such
cure or (2) that it has commenced steps to cure such breach or
default and is diligently pursuing such steps, if such breach
cannot be cured within thirty (30) days, or
6.3.3 upon written agreement between the PARTIES, in their
respective sole discretion; or
6.3.4 at any time upon ninety (90) days written notice given by NMP
to PALATIN, with or without cause. Termination of this
AGREEMENT by NMP under this Paragraph 6.3.4 shall not entitle
NMP to reimbursement of any consideration then paid to
PALATIN.
6.4 Upon termination of this AGREEMENT in accordance with this Paragraph 6 for
any reason, nothing herein shall be construed to release any PARTY from any
obligation for any breach(s) of this AGREEMENT incurred prior to the date
of such termination.
7. ASSIGNMENT
7.1 This AGREEMENT may be assigned by either PARTY only with the prior express
written consent of the other PARTY, such consent shall not be unreasonably
withheld; provided, however, that notwithstanding any such assignment, the
assigning PARTY shall remain directly liable for all its obligations under
this AGREEMENT, and provided the assignee agrees in writing to be bound by
the terms and conditions of this AGREEMENT.
8. GOVERNING LAW
8.1 This AGREEMENT shall be governed and construed in accordance with the laws
of the State of New York, without giving effect to the conflicts of law
principles thereof, and of United States.
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9. GENERAL
9.1 Neither PARTY shall use the other PARTY's name, or the name of any employee
thereof, in any written or oral communications to third parties without the
other PARTY's prior written consent.
9.2 Unless otherwise required by the law, neither PARTY shall disclose the
existence and/or the contents of this AGREEMENT to any other third party.
9.3 This AGREEMENT constitutes the entire and only agreement between the
PARTIES and all the other prior negotiations, representations,
understandings and agreements between the PARTIES are superseded hereby
except for the Confidentiality AGREEMENT between the PARTIES entered on
October 18, 1995, which shall survive this agreement and remain in full
force and effect. This AGREEMENT may be amended or changed only by written
document signed by the duly authorized representatives of the PARTIES.
9.4 Any notice required by this AGREEMENT shall be given by prepaid, first
class, certified mail, return receipt requested, effective upon receipt
addressed:
if to PALATIN:
Palatin Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
U.S.A.
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇, Ph.D.
Executive Vice President
Chief Technology Officer
if to NMP:
Nihon Medi-Physics Co., Ltd.
▇-▇▇-▇, ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
Attention: Manager of Research Administration Department
or such other address as may be given from time to time under the terms of
this notice provision.
9.5 The section headings included herein are for convenience only and shall not
be used to determine the construction or interpretation of this AGREEMENT
or any portion hereof.
9.6 In the event that any provision of this AGREEMENT (or portion thereof) is
determined by a court of competent jurisdiction to
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be invalid or otherwise unenforceable, such provision (or part thereof)
shall be deemed to have been amended to the extent necessary to permit
enforcement, or if not capable of such amendment, shall be deemed to be
deleted from this AGREEMENT, while the remainder of this AGREEMENT shall
continue in full force and remain in effect according to its stated terms
and conditions.
9.7 This AGREEMENT shall be fairly interpreted in accordance with its terms and
without any strict construction in favor of or against either of the
PARTIES.
IN WITNESS WHEREOF, each of the PARTIES hereto has caused this AGREEMENT to be
executed in duplicate originals by its duly authorized officer or
representative.
PALATIN TECHNOLOGIES, INC. NIHON MEDI-PHYSICS CO., LTD
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇
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(authorized representative) (authorized representative)
Typed Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Typed Name: ▇▇▇▇▇ ▇▇▇▇
Title: Chairman and CEO Title: President
Date: December 20, 1996 Date: December 24, 1996
EXHIBIT-A
INTELLECTUAL PROPERTY LIST
The following INTELLECTUAL PROPERTY LIST is part of EXHIBIT-A of the LICENSE
OPTION AGREEMENT between Nihon Medi-Physics ("NMP") and Palatin Technologies,
Inc. ("PALATIN").
I. US Patent Application No. 08/476,652
PEPTIDE-METAL ION PHARMACEUTICAL CONSTRUCTS AND APPLICATIONS
Inventor: Shubh ▇. ▇▇▇▇▇▇
Assignee: RhoMed Incorporated
II. US Patent Application No. 08/660,697
STRUCTURALLY DETERMINED METALLO-CONSTRUCT AND APPLICATIONS
Inventor: ▇▇▇▇▇ ▇▇▇▇▇▇
Assignee: RhoMed Incorporated
III. PCT Application PCT/US90/09840
STRUCTURALLY DETERMINED METALLO-CONSTRUCT AND APPLICATIONS
Inventor: ▇▇▇▇▇ ▇▇▇▇▇▇
Assignee: RhoMed Incorporated
EXHIBIT-B
STEP-1 DEVELOPMENT SCHEDULE
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]
EXHIBIT-C
STEP-2 DEVELOPMENT SCHEDULE
[INFORMATION OMITTED AND FILED SEPARATELY WITH THE COMMISSION UNDER RULE 24b-2.]