EXHIBIT 10.25
EXCLUSIVE LICENSE AGREEMENT
Between
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
and
MGI PHARMA, INC.
for
METHOD OF TREATING TUMORS USING
ACYLFULVENE (ILLUDIN) ANALOGS
U.C. Case No.88-196-1,-2,-3
August 31, 1993
TABLE OF CONTENTS
BACKGROUND
1. DEFINITIONS ..........................................................3
2. GRANT ................................................................6
3. SUBLICENSES ..........................................................7
4. LICENSE ISSUE FEE, LICENSE MAINTENANCE FEES
AND MILESTONE PAYMENTS ..........................................7
5. ROYALTIES ...........................................................10
6. DILIGENCE ...........................................................13
7. PROGRESS AND ROYALTY REPORTS ........................................16
8. BOOKS AND RECORDS ...................................................18
9. TERM OF THE AGREEMENT/RESEARCH AGREEMENT ............................18
10. TERMINATION BY THE REGENTS ..........................................20
11. TERMINATION BY LICENSEE .............................................20
12. DISPOSITION UPON TERMINATION ........................................21
13. USE OF NAMES AND TRADEMARKS .........................................22
14. LIMITED WARRANTY ....................................................22
15. PATENT PROSECUTION AND MAINTENANCE ..................................24
16. PATENT MARKING ......................................................27
17. PATENT INFRINGEMENT .................................................27
18. INDEMNIFICATION .....................................................29
19. NOTICES .............................................................30
20. ASSIGNABILITY .......................................................30
21. LATE PAYMENTS .......................................................31
22. WAIVER ..............................................................31
23. FAILURE TO PERFORM ..................................................31
24. GOVERNING LAWS ......................................................32
25. PREFERENCE FOR UNITED STATES INDUSTRY ...............................32
26. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION .........................32
27. EXPORT CONTROL LAWS .................................................32
28. CONFIDENTIALITY .....................................................33
29. INFRINGEMENT UNDER DRUG PRICE COMPETITION ACT .......................34
30. MISCELLANEOUS .......................................................35
EXHIBIT A - DEVELOPMENT PLAN
EXHIBIT B - STOCK OPTION AGREEMENT
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EXCLUSIVE LICENSE AGREEMENT
---------------------------
THIS LICENSE AGREEMENT (the "Agreement") is made and is effective as of
the 31st day of August, 1993, by and between THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA, a California corporation having its statewide administrative offices
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter
referred to as "The Regents"), and MGI Pharma, Inc., a Minnesota corporation
having a principal place of business at ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter referred to as "Licensee").
BACKGROUND
----------
Certain inventions disclosed under UC Case No. 88-196-1,-2,-3,
generally characterized as METHOD OF TREATING TUMORS USING ILLUDIN ANALOGS,
hereinafter collectively referred to as the "Invention," were made in the course
of research at the University of California, San Diego by Drs. ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (hereinafter, "Inventors").
Licensee entered into a Secrecy Agreement (U.C. Control No. 93-20-0063)
with The Regents effective January 25, 1993 and terminating on January 25, 1998
for the purpose of evaluating the Invention (hereinafter referred to as the
"Secrecy Agreement").
The development of the Invention was sponsored in part by the United
States Department of Health and Human Services and as a consequence this license
is subject to overriding obligations to the Federal Government as set forth in
35 U.S.C. 200-212 and applicable governmental implementing regulations. Pursuant
to 35 U.S.C. 200-212, The Regents may elect to retain title to any invention
(including the Invention) made by it under U.S. Government funding. If The
Regents
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elects to retain title to the Invention, The Regents is required by law to grant
to the U.S. Government a nontransferable, paid up, non-exclusive, irrevocable
license to use the Invention by or on behalf of the U.S. Government throughout
the world. The Regents has elected to retain title and granted the
aforementioned licenses to the U.S. Government to the Invention.
Licensee is a "small business firm" as defined in 15 U.S.C. 632.
Licensee is desirous of obtaining certain rights from The Regents for
the commercial development, manufacture, use, and sale of the Invention, and The
Regents is willing to grant such rights on the terms and conditions set forth in
this Agreement.
Licensee's early access to Regents' Technology prior to the effective
date of this Agreement provides the consideration for Licensee's continuing
royalty obligation for use of Regents' Technology.
Both parties recognize and agree that royalties due hereunder will be
paid on both pending patent applications and issued patents as well as on
Regents' Technology (as hereinafter defined).
The Regents is desirous that the Invention be developed and utilized to
the fullest extent so that the benefits can be enjoyed by the general public.
The parties agree as follows:
1. DEFINITIONS
--------------
1.1 "Affiliate" means any corporation or other business entity which
directly or indirectly controls, is controlled by, or is under common control
with Licensee to the extent of, at least fifty percent (50%) of the outstanding
stock or other voting rights entitled to elect directors.
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1.2 "Data" means all oral and written information received by Licensee,
its Affiliates or its sublicensees from The Regents, the Inventors, or their
agents or representatives regarding the Invention or Licensed Products,
including but not be limited to Regents' Technology, technical information,
patent applications, and prosecution documents and this Agreement.
1.3 "Improvements" means any improvements to the Invention or to
Regents' Patent Rights on which a patent application may be filed now or
hereafter owned by The Regents and developed under either or both of the
Research Agreements entered into pursuant to the terms of Article 9.3 of this
Agreement by or under the supervision of one or more of the Inventors and
relating to the development of Illudin Analogs.
1.4 "Licensed Method" means any process, method, or use which is
covered by Regents' Patent Rights or whose use or practice would constitute, but
for the license granted to Licensee pursuant to this Agreement, an infringement
of any issued or pending claim within Regents' Patent Rights.
1.5 "Licensed Product" means any material or product or kit, or any
service, process or procedure that either (1) is covered by Regents' Patent
Rights or whose manufacture, use, or sale would constitute, but for the license
granted to Licensee pursuant to this Agreement, an infringement of any claim
within Regents' Patent Rights or (2) is developed, made, used, sold, registered,
or practiced using Regents' Technology or Licensed Method or which may be used
to practice the Licensed Method, in whole or in part.
1.6 "Major Market Countries" shall mean Japan, Germany, France and the
United Kingdom.
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1.7 "Net Sales" means the total of the gross invoice prices of Licensed
Products sold or transferred by Licensee, its Affiliates, and its sublicensees
plus rebates and allowances received by Licensee, its Affiliates or sublicensees
of amounts that have been deducted from gross sales less the sum of the
following actual and customary deductions included on the invoice and actually
paid: cash, trade, or quantity discounts; sales, use, tariff, or other excise
taxes imposed upon particular sales; import/export duties; and transportation
charges. Sales among Licensee, its Affiliates and its sublicensees for ultimate
third party use shall be disregarded for purposes of computing royalties.
Royalties shall be payable upon sales or transfers at arms-length consideration
between unrelated third parties.
1.8 "Regents' Patent Rights" means all pending or issued U.S. and
foreign patents and patent applications, owned by The Regents, including any
reissues, extensions, substitutions, continuations, divisions and
continuations-in-part (only to the extent, however, that claims in the
continuations-in-part are entitled to the priority filing date of the parent
patent application or are conceived and first actually reduced to practice under
the Research Agreements and which Licensee has elected to include under this
Agreement) based on the subject matter claimed in or covered by U.S. Patent
Application Serial Numbers 416,395 filed October 3, 1989 (now abandoned),
606,511 filed October 31, 1990 or 015,179 filed February 9, 1993 and patent
applications added to this Agreement pursuant to the provisions of the Research
Agreements.
1.9 "Regents' Technology" means all information and physical objects
related to the Invention or Licensed Product (other than Regents' Patent
Rights), including but not limited to formulations, data, drawings and sketches,
designs, testing and test results, regulatory information of a like nature,
whether patentable or not, owned or controlled by The Regents and which The
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Regents have the right to disclose and license to third parties and which arose
in the Inventors' laboratories under the direction of one or more of the
Inventors prior to the effective date of this Agreement or under one or more of
the Research Agreements. Upon Licensee's written request within thirty (30) days
after receipt thereof, The Regents (subject to the availability of the
Inventors) shall, if applicable, certify that the specific information provided
by The Regents arose in the Inventors' laboratories under the direction of one
or more of the Inventors prior to the effective date of this Agreement or under
one or more of the Research Agreements.
1.10 "Research Agreements" means the research agreements to be executed
between Licensee and The Regents through the San Diego campus's Contract and
Grant Office which contract will fund further research to be performed on said
campus by the Inventors in the field of Regents' Patent Rights.
1.11 "Territory" shall mean all countries of the world.
2. GRANT
--------
2.1 Subject to the limitations set forth in this Agreement, The Regents
hereby grants to Licensee, to the extent it has the legal right to do so, an
exclusive license under Regents' Patent Rights and Regents Technology to make,
have made, use, and sell Licensed Products and to practice Licensed Method in
the Territory during the term of this Agreement.
2.2 The license granted hereunder shall be subject to the overriding
obligations to the U.S. Government set forth in 35 U.S.C. 200-212 and applicable
governmental implementing regulations and to the licenses granted to the U.S.
Government which are referred to in the Background.
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2.3 The Regents expressly reserves the right to use the Invention,
Regents' Patent Rights, Regents' Technology, Licensed Products, Licensed Methods
and associated information and technology for educational and research purposes
only and to publish all or any part of the foregoing, and the results of use
thereof.
2.4 The Regents, principally through the Inventors, has provided
Regents' Technology to Licensee. It is understood that at the time of disclosure
to the Licensee some of the Regents' Technology may have been made available to
the public without restrictions. Within thirty (30) days after the date of
execution hereof the parties shall jointly prepare in good faith a specific list
of existing Regents' Technology documentation to be delivered by The Regents to
Licensee hereunder, and The Regents shall deliver such documentation to Licensee
with six months thereafter.
3. SUBLICENSES
--------------
3.1 The Regents grants to Licensee the right to grant sublicenses to
third parties under the licenses granted in Article 2 provided Licensee has
current exclusive rights thereto (subject to the rights of the U.S. Government
and The Regents) under this Agreement. To the extent applicable, such
sublicenses shall include all of the rights of and obligations due to The
Regents (and, if applicable, to the United States Government) that are contained
in this Agreement.
3.2 Within thirty (30) days after execution thereof, Licensee shall
provide The Regents with a copy of each sublicense granted hereunder, and shall
thereafter collect and guarantee payment of all royalties due The Regents from
sublicensees and summarize and deliver all reports due The Regents from
sublicensees.
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3.3 Upon termination of this Agreement for any reason, The Regents, at
its sole discretion, shall determine whether any or all sublicenses shall be
canceled or assigned to The Regents.
4. LICENSE-ISSUE FEE. LICENSE MAINTENANCE FEES
----------------------------------------------
AND MILESTONE PAYMENTS
----------------------
4.1 Within thirty (30) days after the execution of this Agreement, as a
License Issue Fee, Licensee shall pay to The Regents ***, issue to The Regents
*** shares of the common stock of Licensee, and grant to The Regents options to
purchase *** shares of common stock of Licensee. Said License Issue Fee is non-
refundable and is not an advance against royalties except to the extent that
options granted under this Section 4.1 and under the Option Agreement Attached
hereto as Exhibit A may not vest and may not become exercisable under the
provisions of the Option Agreement.
4.2 Licensee shall pay to The Regents a License Maintenance Fee of ***,
beginning on the first anniversary of execution of this Agreement and continuing
annually on each anniversary thereof until the first NDA on a Licensed Product
is submitted to the U.S. FDA. Said License Maintenance Fee is non-refundable and
is not an advance against royalties.
4.3 Licensee shall pay to The Regents Milestone Payment Fees in
accordance with the following schedule (the total Milestone Payment Fees due at
any milestone shall not exceed the total of the United States milestone due on
such date):
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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EVENT AMOUNT
================================================================================
(a) Upon filing an application US UK, FRANCE, GERMANY
for an IND with United States -- -------------------
Food and Drug Administration & JAPAN
or its equivalent in a Major -------
Market Country or July 15,
1996, whichever is earlier *** ***
--------------------------------------------------------------------------------
(b) Upon submitting an
NDA with the United States
Food and Drug Administration
or its equivalent in a Major *** ***
Market Country or ***,
whichever is earlier
--------------------------------------------------------------------------------
(c) Upon the first final
approval of an NDA by the
United States Food and
Drug Administration or its *** ***
equivalent in another
country of the Territory
================================================================================
Said Milestone Payment Fees shall be paid to The Regents within thirty (30) days
after the occurrence of the event set forth on said schedule and shall not be
refundable or creditable against royalties, except that up to *** payable under
Section 4.3(c) shall be credited in installments of up to *** per year in each
calendar year that royalties payable to The Regents on Net Sales exceed ***.
In each such year, up to the first *** of royalties payable in excess of ***
shall be withheld by Licensee as a credit, until a cumulative amount of ***
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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has been so withheld. All amounts withheld shall be reported to The Regents
under Section 7.5.
4.4 The options referred to in Article 4.1 shall be granted, shall vest
and may be exercised in accordance with a separate agreement, the "Stock Option
Agreement for Purchase of Shares of Common Stock of MGI Pharma, Inc.", between
the parties which is attached hereto as Exhibit B.
5. ROYALTIES
------------
5.1 Except as otherwise required by law, Licensee shall pay to The
Regents a royalty on Net Sales during the term of this Agreement in accordance
with the following schedule:
Annual Net Sales Royalty Rate
---------------- ------------
*** ***
*** ***
*** ***
Upon receipt by The Regents of cumulative royalties of ***, the royalty rate
shall be changed to ***. The aforementioned royalty rates in this Section 5.1
shall be reduced to the following in any country of the Territory where no
Regents' Patent Rights exist:
Annual Net Sales Royalty Rate
---------------- ------------
*** ***
*** ***
Only one royalty shall be charged on each Licensed Product sold under this
Agreement.
5.2 Royalties payable to The Regents shall be paid to The Regents
quarterly on or before the following dates of each calendar year:
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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February 28
May 31
August 31
November 30
Each such payment will be for unpaid royalties which accrued within or prior to
the most recently completed calendar quarter.
5.3 Licensee shall pay to The Regents a minimum annual royalty equal to
the amount set forth on the following schedule:
Year of Commercial Marketing 1 2 3 4 & thereafter
--- --- --- ---
Minimum Royalty *** *** *** ***
for the term of this Agreement beginning with the date of first commercial sale
of Licensed Product. Such minimum annual royalty shall be paid to The Regents by
the last day of the second month of each Year of Commercial Marketing and shall
be credited against the earned royalty due and owing for the Year of Commercial
Marketing in which the minimum payment was made. Each "Year of Commercial
Marketing" shall commence on the first day of the calendar quarter immediately
following the date of first commercial sale of Licensed Product or an
anniversary thereof.
5.4 All amounts due The Regents shall be payable in United States
Dollars in San Francisco, California. When Licensed Products are sold for monies
other than United States Dollars, the earned royalties will first be determined
in the foreign currency of the country in which such Licensed Products were sold
and then converted into equivalent United States Dollars. The exchange rate will
be the United States Dollar exchange rate determined in accordance with
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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Generally Acceptable Accounting Principles and Licensee's normal accounting
practices used by Licensee to record revenues from such country for the period
in question.
5.5 Royalties earned with respect to sales occurring in any country
outside the United States shall not be reduced by any taxes, fees, or other
charges imposed by the government of such country on the remittance of royalty
income. Licensee shall also be responsible for all bank transfer charges.
5.6 If at any time legal restrictions prevent the acquisition or prompt
remittance of United States Dollars by Licensee with respect to any country
where a Licensed Product is sold, Licensee shall pay royalties due to The
Regents from Licensee's other sources of United States Dollars.
5.7 In the event that any patent or any claim thereof included with
Regents' Patent Rights shall be held invalid in a final decision by a court of
competent jurisdiction and last resort and from which no appeal has or can be
taken, all obligation to pay royalties based on such patent or claim or any
claim patentably indistinct therefrom shall cease as of the date of such final
decision. Licensee shall not, however, be relieved from paying any royalties
that accrued before such decision or that are based on another patent or claim
not involved in such decision, or that are based on Regents' Technology.
5.8 If a license to the Invention has been granted to the United States
Government, no royalties shall be payable hereunder on Licensed Products sold to
the U.S. Government. Licensee and its sublicensees shall reduce the amount
charged for Licensed Products sold to the United States Government by an amount
equal to the royalty for such Licensed Products otherwise due The Regents as
provided herein.
6. DILIGENCE
------------
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6.1 Licensee, upon execution of this Agreement, shall use all
reasonable efforts to develop, test, obtain regulatory approval, manufacture,
and sell Licensed Products in all countries of the Territory and shall use all
reasonable efforts to market Licensed Products in all such countries within a
reasonable time after execution of this Agreement and in quantities sufficient
to meet the market demands therefor. Licensee shall begin pharmacology and
toxicology testing of test material, which testing need not comply with good
laboratory practices, in several animal model systems within one hundred twenty
(120) days after receipt of such material (of a reasonably acceptable quality to
Licensee) from the Inventors in accordance with the Research Agreements. If such
material is not acceptable to Licensee, Licensee shall so notify The Regents in
writing within sixty (60) days after receipt of such material.
6.2 Licensee shall be entitled to exercise prudent and reasonable
business judgment in meeting its diligence obligations hereunder.
6.3 Licensee shall endeavor to obtain all necessary governmental
approvals for the manufacture, use, and sale of Licensed Products.
6.4 If Licensee fails to perform any of the following:
(6.4.1) proceed with development of Licensed Products
substantially in accordance with the plan set forth
on Exhibit B hereto; or
(6.4.2) submit an IND application on Licensed Product to the
United States Food and Drug Administration prior to
July 15, 1996; or
(6.4.3) submit an NDA application to the United States Food
and Drug Administration prior to *** and foreign
counterparts thereof to comparable agencies in Major
Market Countries other than Japan prior to
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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*** and in any other countries (including Japan)
prior to ***; or
(6.4.4) commence commercial marketing of Licensed Products in
each country of the Territory within the later of six
(6) months after receiving final marketing approval
of such Licensed Product in such country, or sixty
(60) days after receiving written notice from
Licensor requiring commencement of commercial
marketing; or
(6.4.5) diligently fill the market demand for Licensed
Products in each country following commencement of
marketing in such country at all times during the
exclusive period of this Agreement;
(6.4.6) spend an aggregate of not less than $250,000 for the
development and marketing of Licensed Products during
each year of this Agreement commencing August 15,
1995 and ending on the date of NDA submission and an
aggregate of $300,000 during the first two (2) years
of this Agreement;
(6.4.7) continue to support research under the Research
Agreements at the levels and for the term provided
for in the Research Agreements so long as the
Research Agreements have not been terminated due to
breach by The Regents;
then The Regents shall have the right and option, upon sixty (60) days written
notice, either to terminate this Agreement or to reduce Licensee's exclusive
license to a nonexclusive license as to both Regents' Patent Rights and Regents'
Technology. If such termination or reduction is based on failure of diligence as
to a particular country (including but not limited to each Major Market
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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Country), such termination or reduction shall be effective only as to such
country or countries; in addition, at Licensee's request, The Regents shall
consider Licensee's reasons for failure of diligence and shall negotiate in good
faith during said sixty (60) day period for possible modification of royalty
rates and/or diligence obligations in lieu of termination. Should Licensee fail
to fulfill the diligence requirements or reach agreement with The Regents within
said sixty (60) day period, the notice shall be effective at the end of said
period. Funding paid under the Research Agreements may be counted in fulfilling
the obligations in Section 6.4.6.
(6.5) Upon Licensee's written request made within sixty (60) days after
completion of Licensee's initial Phase II Clinical Trials for Licensed Product
in the United States, and provided that such trials have been completed by
September 1, 1998, the parties agree to negotiate in good faith for the possible
revision of the submission dates as set forth in Section 6.4.3 for submitting
marketing applications for Licensed Product in countries other than the United
States. During such negotiations, the parties shall consider, among other
things, regulatory requirements for such countries (including any need for
additional or supplemental preclinical or clinical trials), standard industry
practice, the remaining term of Regents' Patent Rights in such countries and the
effect that revision of the submission dates would have on royalties due to The
Regents hereunder.
(6.6) In the event The Regents has terminated this Agreement under
Section 6.4.3 as to a country other than the United States or a Major Market
Country, and The Regents wishes to grant a license for Licensed Products for
such country to another licensee, The Regents shall first offer to relicense
Licensed Products to Licensee on the more favorable (to The Regents) of (a) the
terms and conditions in this Agreement or (b) the terms and conditions offered
by the other potential licensee. Licensee shall have thirty (30) days after said
offer to accept such offer in writing. If such offer is
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accepted, Licensee shall also pay to The Regents with such written acceptance a
relicensing fee of Twenty Thousand Dollars ($20,000) per country.
7. PROGRESS AND ROYALTY REPORTS
-------------------------------
7.1 Beginning February 28, 1994 and semi-annually thereafter, Licensee
shall submit to The Regents, for the purpose only of allowing The Regents to
follow the progress of development, a brief progress report in a form reasonably
satisfactory to The Regents covering the activities of Licensee and its
sublicensees related to the development and testing of all Licensed Products and
the obtaining of the governmental approvals necessary for marketing. Such
progress reports shall be made for each Licensed Product in each country of the
Territory until the first commercial sale of such Licensed Product occurs in
such country and thereafter (no more often than annually) if reasonably
requested by The Regents.
7.2 The progress reports submitted under section 7.1 shall include
sufficient information to enable The Regents to determine Licensee's progress in
fulfilling its obligations under Article 6 including, but not be limited to, the
following topics:
- summary of work completed
- key scientific discoveries
- summary of work in progress
- current schedule of anticipated events or milestones
- market plans for introduction of Licensed Products in countries of
the Territory in which Licensed Product has not been introduced
- a summary of resources (dollar value) spent in the reporting
period for research, development and marketing of Licensed Product
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- activities in obtaining sublicensees and activities of sublicensees
- progress under the Research Agreements
7.3 Licensee shall have a continuing responsibility to keep The Regents
informed of the large/small entity status (as defined by the United States
Patent and Trademark Office) of itself and its sublicensees.
7.4 Licensee shall report to The Regents in its immediately subsequent
progress and royalty report the date of first commercial sale of a Licensed
Product in each country.
7.5 After the first commercial sale of a Licensed Product anywhere in
the world, Licensee shall make quarterly royalty reports to The Regents on or
before each February 28, May 31, August 31 and November 30 of each year. Each
such royalty report shall show (a) the units and gross sales and Net Sales
through the end of the most recent calendar quarter of each type of Licensed
Products on which royalties have not been paid; (b) the royalties, in U.S.
dollars, payable hereunder with respect to such sales; (c) the method used to
calculate the royalty; and (d) the exchange rates used, if any.
7.6 If no sales of Licensed Products have been made during any
reporting period, a statement to this effect shall be made by Licensee.
8. BOOKS AND RECORDS
--------------------
8.1 Licensee shall keep books and records accurately showing all
Licensed Products manufactured, used, and/or sold under the terms of this
Agreement. Such books and records shall be preserved for at least (5) years from
the date of the royalty payment to which they pertain and shall be open to
inspection by representatives or agents of The Regents at reasonable times upon
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reasonable notice. Licensee shall not be required to retain books and records
showing transactions required to calculate royalties for more than five (5)
years.
8.2 The out of pocket costs incurred by The Regents in having its
representatives perform such an examination shall be borne by The Regents.
However, if an error in royalties of more than five percent (5%) of the total
royalties due for any year is discovered, then such out of pocket costs shall be
borne by Licensee.
9. TERM OF THE AGREEMENT/RESEARCH AGREEMENTS
--------------------------------------------
9.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the provisions of this Agreement, this Agreement
shall be in force from the effective date recited on page one and shall remain
in effect in each country of the Territory until the longer of, (i) expiration
of the last-to-expire patent licensed under this Agreement in such country or,
(ii) ten years from the date of first commercial sale of Licensed Product in
such country. Upon expiration of this Agreement as to any country with respect
to which Licensee has performed all its obligations hereunder, Licensee shall
have a paid up license to Regents' Technology for such country.
9.2 Any expiration or termination of this Agreement shall not affect
the rights and obligations set forth in the following Articles:
Article 8 Books and Records
Article 12 Disposition Upon Termination
Article 13 Use of Names, Trademarks and Confidential Information
Article 18 Indemnification
Article 23 Failure to Perform
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Article 28 Confidentiality
9.3 Licensee shall enter into agreements with The Regents concerning
Research Agreements and/or an alternative, reasonably satisfactory to The
Regents, within four (4) months of execution of this Agreement for at least
Three Hundred Thousand Dollars ($300,000), plus shall arrange to fund the
production of approximately one hundred (100) grams of at least one of the two
leading candidate illudin NCE's over the next forty two (42) months by the
Inventors, at a cost of approximately Seventy Five Thousand Dollars ($75,000).
Improvements to Regents' Patent Rights or Regents' Technology conceived and
first reduced to practice under the Research Agreements shall fall within the
scope of this Agreement. If any inventions other than Improvements are conceived
and first reduced to practice under the Research Agreements, Licensee shall have
the first right to negotiate a license thereto, as provided in the Research
Agreements. If any such inventions which are not Improvements are added to this
Agreement new License Issue Fees, License Maintenance Fees, Milestone Payment
Fees, royalties, minimum royalties and diligence provisions will be negotiated
by the parties in good faith on commercially reasonable terms.
10. TERMINATION BY THE REGENTS
------------------------------
10.1 If Licensee should breach or fail to perform any material
provision of this Agreement, then The Regents may give written notice of such
default (Notice of Default) to Licensee. If Licensee should fail to cure such
default within sixty (60) days of the effective date of such notice, The Regents
shall have the right to terminate this Agreement and the licenses herein by a
second written notice (Notice of Termination) to Licensee. If a Notice of
Termination is sent to Licensee, this Agreement shall automatically terminate on
the effective date of such notice. Such termination shall not relieve Licensee
of its obligation to pay all amounts due to The Regents as of the effective
-18-
date of termination and shall not impair any accrued rights of The Regents. Such
Notices shall be subject to Article 19 (Notices).
11. TERMINATION BY LICENSEE
---------------------------
11.1 Licensee shall have the right at any time to terminate this
Agreement in whole or as to any portion of Regents' Patent Rights by giving
notice in writing to The Regents. Such notice of termination shall be subject to
Article 19 (Notices), and termination of this Agreement shall be effective
ninety (90) days from the effective date of 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 anything done by Licensee or any payments made 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 (i) Licensee
shall have the privilege of disposing of all previously made or partially made
Licensed Products, but no more, within a period of one hundred and twenty (120)
days, provided, however, that the sale of such Licensed Products shall be
subject to the terms of this Agreement including, but not limited to, the
payment of royalties at the rate and at the time provided herein and the
rendering of reports thereon; (ii) Licensee shall promptly return, and shall
cause its Affiliates and sublicensees to return to The Regents all Regents'
Technology and other property belonging to The Regents, if any, which has been
provided to Licensee or its Affiliates or sublicensees hereunder, and all copies
and facsimiles thereof and derivatives therefrom (except that Licensee may
retain one copy of written material for
-19-
record purposes only, provided such material is not used by Licensee for any
other purpose and is not disclosed to others); and (iii) upon election by The
Regents and reimbursement of Licensee's direct costs to acquire or develop such
information, Licensee shall provide The Regents with copies of all information
relating to Licensed Product or Licensed Method developed or acquired by
Licensee or its Affiliates, and The Regents shall have the worldwide
non-exclusive right to use such information in connection with its research and
in connection with the relicensing of Regents' Patent Rights and Regents'
Technology, provided, however, that the provisions of (iii) shall apply only if
this Agreement is voluntarily terminated by Licensee under the provisions of
Section 11.1. or terminated for cause by The Regents under the provisions of
Section 6.4 or 10.1.
13. USE OF NAMES AND TRADEMARKS
-------------------------------
13.1 Nothing contained in this Agreement shall be construed as
conferring any right on Licensee or its Affiliates to use in advertising,
publicity, or other promotional activities any name, trade name, trademark, or
other designation of The Regents (including contraction, abbreviation or
simulation of any of the foregoing). Unless required by law, the use by Licensee
of the name, "The Regents of the University of California" or the use by
Licensee of the name of "The University of California" or any campus of the
University of California is expressly prohibited and Licensee shall not use such
names in any manner without The Regents' prior written consent.
14. LIMITED WARRANTY
--------------------
14.1 Except as otherwise provided in this Article and except for the
licenses to the United States Government under 35 U.S.C. 200 et seq., The
Regents warrants to Licensee that it has the lawful right to grant this license
and has not granted any previous express licenses on or to The Regents' Patent
Rights. To the best of the knowledge of The Regents' Manager of Health Care
-20-
Licensing, The Regents has granted no express or implied licenses to Regents'
Patent Rights or Regents' Technology.
14.2 This license and the associated Invention are provided WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
WARRANTY, EXPRESS OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY
THAT THE LICENSED PRODUCTS OR LICENSED METHODS OR REGENTS TECHNOLOGY WILL NOT
INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.
14.3 IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL, SPECIAL
OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE
MANUFACTURE, SALE OR USE OF THE INVENTION OR LICENSED PRODUCTS OR LICENSED
METHODS OR REGENTS' TECHNOLOGY.
14.4 Nothing in this Agreement shall be construed as:
(14.4.1) a warranty or representation by The Regents as to the
validity or scope of any Regents' Patent Rights; or
(14.4.2) 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
(14.4.3) an obligation to bring or prosecute actions or suits
against third parties for patent infringement except
as provided in Article 17; or
(14.4.4) conferring by implication, estoppel or otherwise any
license or rights under any patents or other property
rights of The Regents other than Regents' Patent
Rights, Licensed Methods and Regents' Technology
-21-
as defined herein, regardless of whether such patents
are dominant or subordinate to Regents' Patent
Rights; or
(14.4.5) an obligation to furnish any information not provided
in Regents' Patent Rights or Regents' Technology (as
delivered to Licensee prior to the effective date of
this Agreement or under the Research Agreements or
pursuant to Section 2.4 of this Agreement).
15. PATENT PROSECUTION AND MAINTENANCE
--------------------------------------
15.1 The Regents shall diligently prosecute and maintain the United
States patents comprising Regents' Patent Rights using counsel of its choice.
The Regents' counsel shall take instructions only from The Regents. The Regents
shall provide Licensee with copies of all relevant documentation so that
Licensee may be informed and apprised of the continuing prosecution. Licensee
shall keep said documentation confidential in accordance with Article 28.
15.2 The Regents shall use reasonable efforts to amend any patent
application to include claims reasonably requested by Licensee to protect the
products contemplated to be sold under this Agreement.
15.3 The Regents shall cooperate with Licensee in applying for an
extension of the term of any patent included within Regents' Patent Rights if
appropriate under the Drug Price Competition and Patent Term Restoration Act of
1984. Licensee shall prepare all such documents, and The Regents agrees to
execute such documents and to take such additional action as Licensee may
reasonably request in connection therewith.
15.4 All past, present, and future costs of preparing, filing,
prosecuting, defending and maintaining all United States patent applications
and/or patents, including interferences and
-22-
opposition, and all corresponding foreign patent applications and patents
covered by Regents' Patent Rights shall be borne by Licensee. Such costs include
patent prosecution costs for this Invention incurred by The Regents prior to the
execution of this Agreement of approximately $49,652.99 based on information
currently available to The Regents, which amount shall be due within thirty (30)
days of the execution of this Agreement. Current and future costs for patent
prosecution and maintenance shall be billed to Licensee by The Regents as
incurred and shall be payable within thirty (30) days of the billing date. The
Regents shall use reasonable efforts to deliver all ▇▇▇▇▇▇▇▇ to Licensee no
later than five (5) days after the start of such thirty (30) day period.
15.5 The Regents shall, at the request of Licensee, file, prosecute,
and maintain patent applications and patents covered by Regents' Patent Rights
in foreign countries if available. Licensee consents to the filing of all PCT
and foreign patent applications that have already been filed as of the effective
date of this Agreement. Licensee shall notify The Regents within seven (7)
months of the filing of the corresponding United States application of its
decision to obtain all other foreign patents. Such notice shall be in writing,
and shall identify the countries desired. The absence of such a notice from
Licensee shall be considered by The Regents to be an election not to request
foreign rights.
15.6 The preparation, filing and prosecuting of all foreign patent
applications filed at Licensee's request, as well as the defense and maintenance
of all resulting patents, shall be at the sole expense of Licensee. Such patents
shall be held in the name of The Regents and shall be obtained using counsel of
The Regents' choice.
15.7 Licensee's obligation to underwrite and to pay patent prosecution
costs shall continue for so long as this Agreement remains in effect, provided,
however, that Licensee may terminate its
-23-
obligations with respect to any given patent application or patent upon three
(3) months written notice to The Regents. The Regents shall use its best efforts
to curtail patent cost when such a notice is received from Licensee. Licensee
shall promptly pay patent costs which cannot be so curtailed. Commencing on the
effective date of the notice, The Regents may continue prosecution and/or
maintenance of such applications(s) or patent(s) at its sole discretion and
expense, and Licensee shall have no further rights or licenses thereunder.
15.8 The Regents shall have the right to file patent applications at
its own expense in any country or countries in which Licensee has not elected to
secure patent rights or in which Licensee's patent rights hereunder have
terminated, and such applications and resultant patents shall not be subject to
this Agreement and may be freely licensed by The Regents to others together with
Regents' Technology for such country or countries. In the event The Regents has
filed a patent application at its own expense in a country hereunder other than
a Major Market Country, a member of the European Economic Community or EFTA, or
the United States, and in the event The Regents wishes to grant a license for
Licensed Products for such country to another licensee, The Regents shall first
offer to relicense Licensed Products for each country to Licensee on the more
favorable (to The Regents) of (a) the terms and conditions of this Agreement, or
(b) the terms and conditions offered by the other potential licensee. Licensee
shall have thirty (30) days to accept such offer. If such offer is accepted,
Licensee shall pay to The Regents a relicensing fee of four (4) times its cost
of obtaining patent rights in such country or Twenty Thousand Dollars ($20,000)
whichever is greater.
-24-
16. PATENT MARKING
------------------
16.1 Licensee shall ▇▇▇▇ all Licensed Products made, used or sold under
the terms of this Agreement, or their containers, in accordance with the
applicable patent marking laws.
17. PATENT INFRINGEMENT
-----------------------
17.1 In the event that Licensee shall learn of the substantial
infringement of any patent licensed under this Agreement, Licensee shall call
The Regents' attention thereto in writing and shall provide The Regents with
reasonable evidence of such infringement. Both parties to this Agreement agree
that during the period and in a jurisdiction where 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 consent of the other
party, which consent shall not be unreasonably withheld. Both parties shall use
reasonable efforts in cooperation with each other to terminate such infringement
without litigation.
17.2 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 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:
a) commence suit on its own account; or
b) refuse to participate in such suit,
and The Regents shall give notice of its election in writing to Licensee by the
end of the one hundredth (100th) day after receiving notice of such request from
Licensee. In the event The Regents elects to bring suit in accordance with this
paragraph, Licensee may thereafter join such suit at its own expense. Licensee
may thereafter bring suit-for patent infringement if and only if The Regents
-25-
elects not to commence suit and if the infringement occurred during the period
and in a jurisdiction where 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 its own expense.
17.3 Such legal action as is decided upon shall be at the expense of
the party on account of when suit is brought and all recoveries recovered
thereby shall belong to such party, provided, however, that legal action brought
jointly by The Regents and Licensee and participated in by both shall be at the
joint expense of the parties and all recoveries shall be shared jointly by them
in proportion to the share of expense paid by each party.
17.4 Each party shall 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 that either party may be represented by counsel of its choice
in any suit brought by the other party, at the expense of the party choosing
representation by separate counsel.
18. INDEMNIFICATION
-------------------
18.1 Licensee shall (and shall require its sublicensees to) indemnify,
hold harmless and defend The Regents, its officers, employees, and agents, the
sponsors of the research that led to the Invention, and the Inventors against
any and all claims, suits, losses, liabilities, damages, costs, fees, and
expenses resulting from or arising out of exercise of this license or any
sublicense. This indemnification includes, but is not limited to, all product
liability.
18.2 Licensee, at its sole cost and expense, shall insure its
activities in connection with the work under this Agreement and obtain, keep in
force and maintain Comprehensive or Commercial
-26-
Form General Liability Insurance (contractual liability included), or an
equivalent program of self insurance, with limits as follows:
(a) Each Occurrence $1,000,000
(b) Products/Completed Operations Aggregate $5,000,000
(c) Personal and Advertising Injury $1,000,000
(d) General Aggregate (commercial form only $5,000,000
It is expressly understood, however, that the coverages and limits
referred to under the above shall not in any way limit the liability of
Licensee. Licensee shall furnish The Regents with certificates of insurance
evidencing compliance with all requirements. Such certificates shall:
(18.2.1) Provide for thirty (30) day advance written notice to
The Regents of a modification.
(18.2.2) Indicate that The Regents has been endorsed as an
additional insured under the coverages referred to
under the above.
18.3 The Regents shall promptly notify Licensee in writing of any claim
or suit brought against The Regents in respect of which The Regents intends to
invoke the provisions of this Article 18. Licensee shall keep The Regents
informed on a current basis of its defense of any claims pursuant to this
Article 18.
19. NOTICES
-----------
19.1 Any notice or payment required to be given to either party shall
be deemed to have been properly given and to be effective (a) on the date of
delivery if delivered in person or (b) five (5) days after mailing if mailed by
first-class certified mail, postage paid, to the respective addresses given
below, or to such other address as it shall designate by written notice given to
the other party.
-27-
In the case of Licensee: MGI PHARMA, INC.
▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President - General Counsel
In the case of The Regents: THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant Director, Office of Technology
Transfer
Referring to: ▇▇ ▇▇▇▇ ▇▇. ▇▇-▇▇▇
▇▇. ASSIGNABILITY
-----------------
20.1 This Agreement is binding upon and shall inure to the benefit of
The Regents, its successors and assigns, but shall be personal to Licensee and
assignable by Licensee only with the written consent of The Regents, which
consent shall not be unreasonably withheld, or without the written consent of
The Regents to a purchaser of substantially all of the pharmaceutical business
of Licensee.
21. LATE PAYMENTS
-----------------
21.1 In the event royalty payments or -fees -or patent, cost
reimbursements are not received by The Regents when due, Licensee shall pay to
The Regents interest charges at a rate of ten (10) percent compounded per annum.
Such interest shall be calculated from the date payment was due until actually
received by The Regents.
-28-
22. WAIVER
----------
22.1 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.
23. FAILURE TO PERFORM
----------------------
23.1 In the even of a failure of performance due under the terms of
this Agreement and if it becomes necessary for either party to undertake legal
action against the other on account thereof, then the prevailing party shall be
entitled to reasonable attorney's fees in addition to costs and necessary
disbursements.
24. GOVERNING LAWS
------------------
24.1 THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any
patent or patent application shall be governed by the applicable laws of the
country of such patent or patent application.
25. PREFERENCE FOR UNITED STATES INDUSTRY
-----------------------------------------
25.1 Because this Agreement grants the exclusive right to use or sell
the Invention in the United States, Licensee agrees that any products embodying
this Invention or product through the use thereof, which are intended to be used
or sold in the United States, will be manufactured substantially in the United
States.
-29-
26. FOREIGN GOVERNMENT APPROVAL AND REGISTRATION
------------------------------------------------
26.1 If this Agreement or any associated transaction is required by the
law of any nation to be either approved or registered with any governmental
agency, Licensee shall assume all legal obligations to do so and the costs in
connection therewith.
27. EXPORT CONTROL LAWS
-----------------------
27.1 Licensee shall observe all applicable United States and foreign
laws with respect to the transfer of Licensed Products and related technical
data to foreign countries, including, without limitation, the International
Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.
28. CONFIDENTIALITY
-------------------
28.1 Licensee shall not use Data except for the sole purpose of
performing under the terms of this Agreement; shall safeguard Data against
disclosure to others with the same degree of care as it exercises with its own
data of a similar nature; and shall not disclose Data to others (except to its
employees, agents or consultants, Affiliates or sublicensees who are bound to
Licensee by a like obligation of confidentiality) without the express written
permission of The Regents, except that Licensee shall not be prevented from
using or disclosing any of the Data:
(28.1.1) which Licensee can demonstrate by written
records was previously known to it;
(28.1.2) which is now, or becomes in the future, information
generally available to the public in the form
supplied, other than through acts or omissions of
Licensee;
-30-
(28.1.3) which is lawfully obtained by Licensee from sources
independent of The Regents; and
(28.1.4) whose use or disclosure is required by law (including
requirements of government regulatory authorities).
The obligations of Licensee under this Section 28.1 shall continue for a period
ending the later of (i) five (5) years from the early termination of this
Agreement in its entirety or (ii) the expiration date of this Agreement in its
entirety provided The Regents has not given written notice to Licensee within
ninety (90) days after such expiration that Licensee is in default of its
obligations under this Agreement.
29. INFRINGEMENT UNDER DRUG PRICE COMPETITION ACT
-------------------------------------------------
29.1 In the event either party receives notice pertaining to any patent
included within Regents' Patent Rights pursuant to the Drug Price Competition
and Patent Term Restoration Act of 1984, (Public Law 98-417, hereinafter, "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 New Drug
Application ("ANDA") or a "paper" New Drug Application, ("paper NDA"), or in the
case of an infringement of Regents' Patent Rights as defined in Section 271(e)
of Title 35 of the United States Code, such party shall notify the other party
promptly but in no event later than ten (10) days after receipt of such notice.
29.2 If Licensee wishes action to be taken against such infringement,
as provided in the Act, Licensee shall request such action by written notice to
The Regents. Within thirty (30) days of receiving said request, The Regents will
give written notice to Licensee of its election to:
(29.2.1) commence suit on its own account; or
-31-
(29.2.2) refuse to participate in such suit.
In the event The Regents elects to bring suit in accordance with this paragraph,
Licensee may thereafter join such suit at its own expense. Licensee may
thereafter bring suit for patent infringement as provided by the Act if and only
if The Regents elects not to commence suit and if the infringement occurred
during the period that 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 its
own expense.
29.3 The provisions of paragraphs 17.3 and 17.4 shall likewise apply to
any legal action brought under this Article 29.
29.4 The Regents hereby authorizes Licensee to include in any NDA for a
Licensed Product, a list of patents included within Regents' Patent Rights
identifying The Regents as patent owner.
30. MISCELLANEOUS
-----------------
30.1 The headings of the several articles are inserted for convenience
of reference only and are not intended to a part of or to affect the meaning or
interpretation of this Agreement.
30.2 This Agreement shall not be binding upon the parties until it has
been signed below on behalf of each party, in which event, it shall be effective
as of the date recited on page one.
30.3 No amendment or modification hereof shall be valid or binding upon
the parties unless made in writing and signed on behalf of each party.
30.4 This Agreement and the option agreement referred to in Section 4.4
hereof and the Research Agreements referred to in Section 9.3 hereof embody the
entire understanding of the parties and shall supersede all previous
communications, representations or understandings, either oral or
-32-
written, between the parties relating to the subject matter hereof. The Secrecy
Agreement is hereby terminated. In the event of an inconsistency between this
Agreement and the Research Agreements, this Agreement shall prevail.
30.5 In case any of the provisions contained in this Agreement shall be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions hereof, but
this Agreement shall be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.
IN WITNESS WHEREOF, both The Regents and Licensee have executed this
Agreement (which includes Exhibits A and B attached hereto), in duplicate
originals, by their duly authorized representatives, on the day and year
hereinafter written.
MGI PHARMA, INC. THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ -----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President, Title: Associate Director
New Business Office of Technology Transfer
Date: 8/31/93 Date: 8/31/93
---------------------------- ---------------------------
-33-
EXHIBIT A
STOCK OPTION AGREEMENT
FOR THE PURCHASE OF
SHARES OF COMMON STOCK
OF
MGI PHARMA, INC.
This Agreement is made this ___ day of August, 1993, by and between MGI
PHARMA, INC., a Minnesota corporation (the "Company"), and THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA ("Optionee").
WHEREAS, the Company and Optionee have entered into an Exclusive License
Agreement for Method of Treating Tumors Using Illudin Analogs (U.C. Case No.
88-196-1,-2,-3) dated as of the date hereof (the "License Agreement"); and
WHEREAS, pursuant to the License Agreement, Optionee is entitled to receive
options to purchase shares of common stock, $.01 par value per share (the
"Common Stock"), of the Company upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants Optionee the right and option
(the "Option") to purchase all or any part of an aggregate of *** shares of
Common Stock on the terms and conditions set forth in this Agreement.
2. Vesting of Exercise Rights. Subject to the terms and conditions of this
Agreement, the Option granted hereby shall become vested and exercisable at
option exercise prices, subject to adjustments as noted below (the "option
exercise price"), as follows:
(a) Options to purchase *** shares of Common Stock will vest and
become immediately exercisable as of the date of this Agreement at an
option exercise price per share equal to the dosing price of the Common
Stock as reported on the NASDAQ National Market System on the date of this
Agreement.
(b) Options to purchase *** shares of Common Stock will vest and
become exercisable in installments of options to purchase *** shares of
Common Stock, commencing on the first anniversary of the date of this
Agreement and continuing on each anniversary thereafter until all such
options have vested. Such options will be exercisable at the option
exercise price per share equal to the sum of (i) the closing price of the
Common Stock as reported on the NASDAQ National Market System on the date
of Agreement and (ii) ***.
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
A-1
(c) Except as otherwise set forth below, options to purchase ***
shares of Common Stock will vest and become exercisable upon the earlier of
G) the date on which a new drug application is filed with the United States
Food and Drug Administration ("FDA") in accordance with the provisions of
the License Agreement or (ii) ***. Such options will be exercisable at an
option exercise price per share equal to the lesser of (i) *** or (ii) the
closing price of the Common Stock as reported on the NASDAQ National Market
System on the date which is three years after the date of this Agreement.
(d) Except as otherwise set forth below, options to purchase ***
shares of Common Stock will vest and become exercisable upon the date of
receipt of final marketing approval in the United States (as determined in
accordance with the License Agreement). Such options will be exercisable at
an option exercise price per share equal to the lesser of (i) *** or (ii)
the closing price of the Common Stock as reported on the NASDAQ National
Market System on the date which is five years after the date of this
Agreement.
Notwithstanding, the vesting schedule set forth in (c) and (d) above, in
the event that there are NDA equivalent submissions or final marketing approvals
in any Major Market Countries (as such terms are used in the License Agreement)
prior to an NDA submission or final marketing approval in the United States and
the Company is obligated to pay the Regents Milestone Payment Fees (as such term
is defined in the License Agreement) under the License Agreement, (i) the
options described in (c) above shall vest and become exercisable in
installments of options to purchase *** shares of Common Stock upon the
submission of an NDA equivalent in each Major Market Country, and (ii) the
options described in (d) above shall vest and become exercisable in installments
of options to purchase *** shares of Common Stock upon the receipt of final
marketing approvals in each Major Market Country; provided, however, that if at
any time there is an NDA submission or receipt of final marketing approval in
the United States all options described in (c) and (d) above shall-vest and
become exercisable in full as described in (c) and (d) above.
3. Termination of Vesting; Termination of Options.
(a) Notwithstanding the vesting provisions contained in Section 2
hereof, none of the options described in such Section 2 shall continue to
vest upon the earlier of (i) termination of the License Agreement and (ii)
fifteen (15) years from the date of this Agreement.
(b) Upon vesting in full of the respective options described in
Section 2 hereof (and subject to the provisions of Section 3(a) hereof),
Optionee agrees to exercise such options no later than the date which is
fifteen (15) years from the date of this Agreement. If Optionee shall fail
to exercise such options within the time period set forth in this Section
3(b), such options shall terminate and be of no further force and effect.
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
A-2
4. Method of Exercise of Option. Subject to the foregoing, the Option may
be exercised, in whole or in part, by written notice of exercise delivered to
the Company at least twenty (20) days prior to the intended date of exercise at
the principal office of the Company and upon payment to it by cash, certified
check or ,bank draft of the option exercise price for such shares. The shares so
purchased shall be deemed to be issued as of the later of (i) the close of
business on the date of exercise set forth in the notice of exercise or (ii) the
date of payment to the Company of the applicable option exercise price.
Certificates for the shares of stock so purchased, bearing the restrictive
legend set forth at the end of this Agreement, shall be delivered to the holder
within fifteen (15) days after options shall have been exercised.
5. Nonassessability/Reservation for Issuance. The Company covenants and
agrees that all shares that may be issued upon exercise of the Option shall,
upon issuance, be duly authorized and issued, fully paid and nonassessable
shares. The Company further covenants and agrees that the Company will at all
times have authorized, and reserved for the purpose of issue or transfer upon
exercise of the Option, a sufficient number of shares of its Common Stock.
6. Anti-Dilution Provisions. The option exercise price shall be subject to
adjustment from time to time as hereinafter provided in this Section 6.
(a) If the Company at any time divides the outstanding shares of its
Common Stock into a greater number of shares (whether pursuant to a stock
split, stock dividend or otherwise), and conversely, if the outstanding
shares of its Common Stock are combined into a smaller number of shares,
the option exercise price in effect immediately prior to such division or
combination shall be proportionately adjusted to reflect the reduction or
increase in the value of each such common share.
(b) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for such common shares, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale,
Optionee shall have the right to purchase and receive upon the basis and
upon the terms and conditions specified in this Agreement and in lieu of
the shares of the Common Stock immediately theretofore purchasable and
receivable upon the exercise of the Option, such shares of stock, other
securities or assets as would have been issued or delivered to Optionee if
it had exercised the Option and had received such shares of Common Stock
prior to such reorganization, reclassification, consolidation, merger or
sale. The Company shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument
executed and mailed to Optionee at the last address of Optionee appearing
on the books of the
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Company, the obligation to deliver to Optionee such shares of stock,
securities or assets as, in accordance with the foregoing provisions,
Optionee may be entitled to purchase.
(c) If the Company takes any other action, or if any other event
occurs, which does not come within the scope of the provisions of Section
6(a) or 6(b), but which should result in an adjustment in the option
exercise price and/or the number of shares subject to the Option in order
to fairly protect the rights of Optionee, an appropriate adjustment shall
be made by the Company.
(d) Upon each adjustment of the option exercise price, Optionee shall
thereafter be entitled to purchase, at the option exercise price resulting
from such adjustment, the number of shares obtained by multiplying the
option exercise price in effect immediately prior to such adjustment by the
number of shares purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the option exercise price
resulting from such adjustment.
(e) Upon any adjustment of the option exercise price, the Company
shall give written notice thereof, by first class mail, postage prepaid,
addressed to Optionee at the last address of Optionee as shown on the books
of the Company, which notice shall state the option exercise price
resulting from such adjustment and the increase or decrease, if any, in the
number of shares purchasable at such price upon the exercise of the Option,
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.
7. No Rights as a Shareholder. Optionee shall have no rights as a
shareholder with respect to shares covered by the Option until the date of the
issuance of a stock certificate therefor following due and proper exercise of
such Option.
8. Restrictions on Transfer.
(a) Optionee, by acceptance hereof, agrees to give written notice to
the Company before transferring this Option or transferring any shares of
the Common Stock issuable or issued upon the exercise of this Option of
Optionee's intention to do so, describing briefly the manner of any
proposed transfer of the Option represented hereby or Optionee's intention
as to the shares of Common Stock issuable upon the exercise hereof or the
intended disposition to be made of shares of Common Stock upon such
exercise. Promptly upon receiving such written notice, the Company shall
present copies thereof to counsel for the Company. If, in the opinion of
such counsel, the proposed transfer of the Option represented hereby or
disposition of shares may be effected without registration or qualification
(under any federal or state law) of the Option or the shares of Common
Stock issuable or issued upon the exercise hereof, the Company, as promptly
as practicable, shall notify Optionee of such opinion, whereupon Optionee
shall be entitled to transfer the Option, or to exercise the Option in
accordance with its terms and dispose
A-4
of the shares received upon such exercise or to dispose of shares of Common
Stock received upon the previous exercise of the Option, all in accordance
with the terms of the notice delivered by Optionee to the Company, provided
that an appropriate legend in substantially the form set forth at the end
of this Agreement respecting the foregoing restrictions on transfer and
disposition may be endorsed on this Agreement or the certificates for such
shares.
(b) Subject to the provisions of Section 8(a), this Agreement and all
rights hereunder are transferable, in whole or in part, at the principal
office of the Company by Optionee in person or by duly authorized attorney,
upon surrender of this Agreement properly endorsed to any person or entity
who represents in writing that he/it is acquiring the Option represented
hereby for investment and without any view to the sale or other
distribution thereof. Each holder of the Option represented hereby, by
taking or holding the same, consents and agrees that the bearer of this
Agreement, when endorsed, may be treated by the Company and all other
persons dealing with this Agreement as the absolute owner hereof for any
purpose and as the person entitled to exercise the Option, or to the
transfer hereof on the books of the Company, any notice to the contrary
notwithstanding; but until such transfer on such books, the Company may
treat the registered owner hereof as the owner for all purposes.
(c) Notwithstanding the provisions of Sections 8(a) and (b) hereof,
Optionee intends to transfer certain options granted hereunder to the
Inventors (as that term is defined under the License Agreement), in
accordance with Optionee's Patent Policy. The Company waives the
requirements of Sections 8(a) and (b) hereof only with respect to the
transfer of options to the Inventors as outlined in this Section 8(c).
(d) Shares of the Company's Common Stock are presently traded on. the
NASDAQ National Market System, and, at the time of the signing of this
Agreement, the Company satisfies the requirements of Rule 144 ("Rule 144")
of the Securities Act of 1933, as amended (the "Securities Act"), so as to
enable Common Stock of the Company to be sold under the provisions of Rule
144. The Company agrees to make all efforts to continue to meet the
requirements of Rule 144 or any successor or equivalent thereto promulgated
by the Securities and Exchange Commission (the Commission").
9. Registration Rights.
(a) If the Company receives a request signed by the holders, in the
aggregate, of at least 50% of the shares of Common Stock issued or issuable
upon exercise of the Option (all such persons making such request being
hereinafter referred to in this Section 9 as the "Requesting Holders")
stating that such Requesting Holders desire to have (i) a specified number
of the shares of Common Stock issued or issuable upon exercise of the
Option and/or (ii) except as otherwise provided below, the shares of the
Common Stock (including, without limitation, any greater number of shares
of Common Stock issued
A-5
pursuant to a stock split, stock dividend or otherwise with respect to such
shares) issued to Optionee pursuant to the License Agreement (the
"Restricted Shares" and together with the shares issued or issuable upon
exercise of the Option, the "Demand Shares") registered under the
Securities Act on Form S-3 or any successor or equivalent thereto adopted
under the Securities Act ("Form S-3"), the Company shall, as soon as
practicable (and in no event later than nine (9) months from the date that
the Company receives the request from the Requesting Holders), use its best
efforts to file a registration statement on Form S-3 under the Securities
Act covering such Demand Shares and the proposed sale or distribution
referred to in such notice and to cause such registration to become
effective under the Securities Act as soon as practicable after the filing
thereof. If the Company shall have begun the process of registering shares
of its Common Stock prior to receipt of the request of the Requesting
Holders pursuant to this Section 9, the Company, in its sole reasonable
discretion, shall determine whether such Demand Shares shall be included as
a part of such offering. If the Company determines that such Demand Shares
shall not be included in such offering, then the holders of such Demand
Shares shall not be deemed to have exercised the right to require the
Company to register the Demand Shares pursuant to this Section 9.
In the event the Company determines to include unissued shares in any
public offering pursuant to a registration statement initiated by Requesting
Holders and in the good faith judgment of the managing underwriter of such
public offering (if applicable), the inclusion of such securities would
interfere with the successful marketing of the Demand Shares or require the
exclusion of any portion of the Demand Shares to be registered, the Company
shall include first the securities of the Requesting Holders and then any
unissued shares. The Company shall be obligated to prepare and file no more than
one registration statement pursuant to this Section 9.
In the event that the holders of a majority of the Demand Shares for which
registration has been requested pursuant to this Section 9 determine for any
reason not to proceed with a public distribution or sale at any time before the
Form S-3 covering the Demand Shares to be sold publicly has been declared
effective by the Commission, and such Form S-3, if theretofore filed with the
Commission, is withdrawn with respect to the Demand Shares covered thereby, and
the holders of such Demand Shares agree to bear their own expenses incurred in
connection therewith and to reimburse the Company for the expenses incurred by
it attributable to the registration of such Demand Shares, then the holders of
such shares shall not be deemed to have exercised the right to require the
Company to register Demand Shares pursuant to this Section 9. If a registration
statement filed by the Company at the request of Requesting Holders pursuant to
this Section 9 is (i) withdrawn at the initiative of the Company or (ii) is not
declared effective by the Commission within three (3) months of the filing of
the registration statement with the Commission, then the holders of Demand
Shares shall not be deemed to have exercised the right to require the Company to
register Demand Shares pursuant to this Section 9. The right of the Requesting
Holders to request a registration of the Restricted Shares pursuant to this
Section 9 shall not apply provided that the Company shall deliver an opinion of
its counsel that
A-6
all of the Restricted Shares which such Requesting Holders proposes to sell may
lawfully be sold or distributed publicly without registration under Rule 144.
The managing underwriter, if any, of an offering registered pursuant to
this Section 9 shall be selected by the Company and shall be reasonably
acceptable to the Requesting Holders.
(b) in connection with any registration of Demand Shares under the
Securities Act pursuant to this Section 9, the Company will furnish each
Requesting Holder whose Demand Shares are registered thereunder with a copy
of the registration statement and all amendments thereto and will supply
each such Holder with copies of any prospectus included therein (including
a preliminary prospectus and all amendments and supplements thereto), in
such quantities as may be reasonably necessary for the purposes of the
proposed sale or distribution covered by such registration. In connection
with any such registration of Demand Shares, the Company will, at the
request of the managing underwriters with respect thereto (if applicable),
use its best efforts to qualify such registered shares for sale under the
securities of "blue sky" laws of such states as is reasonably required to
permit the distribution of such registered shares; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereof to qualify to do business in any state where it is not then
qualified or to take any action that would subject it to tax or to the
general service of process in any state where it is not then subject.
If at any time during the effectiveness of the registration statement, the
Company determines, after consulting with its legal counsel, that the latest
prospectus provided to the Requesting Holders fails or may fail to comply with
the requirements of the Securities Act or any rule promulgated thereunder and
such non-compliance could result in liability to the Company or the Requesting
Holders, the Company shall notify the Holders who have not then sold all of
their shares included in the registration not to use the prospectus until such
time (not later than 30 days from the date of such notice) as the Company
prepares and delivers a prospectus that is not defective (or files any document
that is incorporated by reference in the existing prospectus). During such
period, the Company shall instruct its transfer agent to impose stop-transfer
notices on the Company's Common Stock transfer books.
(c) Except as otherwise required by state securities or "blue sky"
laws or the rules and regulations promulgated thereunder, all expenses,
disbursements and fees incurred by the Company in connection with carrying
out its obligations under this Section 9 shall be borne by the Company;
provided, however, that each Requesting Holder shall pay (i) the filing fee
required to be paid under the Securities Act at the time of filing the
registration statement with respect to the Demand Shares (as of the date of
this Agreement, such fee is equal to 1/32 of 1% of the maximum aggregate
price at which the Demand Shares are proposed to be offered), (ii) all
costs and expenses of counsel for
A-7
the Holder and (iii) all underwriting discounts, commissions, as the case
may be, and all transfer fees with respect to the sale of the Demand Shares
by the Requesting Holders.
10. Waiver. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
A-8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
MGI PHARMA, INC.
By
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
its Chairman and Chief Financial
Officer
THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By
---------------------------------
▇-▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ TRANSFER
The security evidenced hereby has not been registered under the Securities
Act of 1933 or any state securities laws and may not be sold, transferred,
assigned, offered, pledged or otherwise distributed for value unless there is an
effective registration statement under such act or laws covering such security
or the Company receives an opinion of counsel for the holder of this security
(concurred in by counsel for the Company) stating that such sale, transfer,
assignment, pledge or distribution is exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933 and all
applicable state securities laws.
A-10
OPTION EXERCISE
(To be signed only upon exercise of Option)
The undersigned, the holder of the options represented by the foregoing
agreement, hereby irrevocably elects to exercise options to purchase _____ of
the shares of common stock of MGI PHARMA, INC., and herewith makes payment of
$________ therefor in cash or by check and requests that the certificates for
such shares be issued in the name of, and be delivered to ________, whose
address is set forth below the signature of the undersigned.
Dated: _____________
---------------------------------
---------------------------------
---------------------------------
(Name and Address of Transferee)
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OPTION ASSIGNMENT
(To be signed only upon transfer of Option)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________ the right represented by the foregoing Agreement to purchase the
shares of Common Stock of MGI PHARMA, INC., issuable upon the exercise of the
options to which the Agreement relates and appoints _______________________
attorney to transfer such right on the books of MGI PHARMA, INC., with full
power of substitution in the premises.
Dated: _____________
---------------------------------
---------------------------------
---------------------------------
(Name and Address of Transferee)
A-12
EXHIBIT B
[Graph of Approximate Drug Development
Schedule for Illudin Analogs ***]
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
B-1