Exhibit 10.56
Portions of this
document have been redacted. Redacted sections marked with
“*****.”
COLLABORATION AND LICENSE
AGREEMENT
This Collaboration and
License Agreement (the “ Agreement ”) between
AVI BioPharma, Inc. of One S.W. Columbia, Suite 1105,
Portland OR 97258 (“ AVI ”) and ERCOLE BIOTECH, INC. , of 79 TW
Alexander Dr., Bldg 4401, Suite 200, Research Triangle Park, NC
27709 (“ Ercole ”) is entered into and made
effective this 19th day of December 2006 (the “ Effective
Date ”).
OVERVIEW
Collaboration and Cross
Licenses
AVI owns or controls certain
patents related to morpholino chemistry (the “AVI
Patents”), including those licensed under that certain
Agreement between AVI and Anti-Gene Development Group effective May
19, 1993 and amended March, 2000 (the “AGDG
Agreement”).
Ercole controls certain
patents (the “Isis Splicing Patents”, as identified on
Exhibit 5 ) related to RNA splicing licensed under that
certain Collaboration and License Agreement between Ercole and Isis
Pharmaceuticals effective May 16, 2003 (the “Isis
CLA”).
Ercole controls certain
patents (the “ Ercole Splicing
Patents”) related to RNA splicing licensed under that certain
License Agreement between Ercole and The University of North
Carolina at Chapel Hill effective October 15, 2001 (the “UNC
License”).
The Parties wish to
collaborate in the areas of drug discovery and medicinal chemistry,
as further described below and in the Research Plan. Each Party
will choose a fixed pool of exclusive Gene Targets for their
research and development efforts and will receive an exclusive
license to practice under specified patents owned or controlled by
the other Party to discover and develop Products that modify such
exclusive Gene Targets (either “Ercole-AVI Exclusive
Products” or “AVI Exclusive Products,” each as
further defined below). In exchange for these exclusive licenses
and the contribution of each Party to the other Party’s
efforts to develop Splicing Modulators, each Party will pay
royalties and milestones on the development and sale of
Products.
Ercole and AVI will
design and identify morpholino and morpholino peptide conjugate
splice switching oligomers that modulate the splicing of Ercole-AVI
Exclusive Targets and the AVI Exclusive Targets. For each
Ercole-AVI Exclusive Target, AVI will provide Splicing Modulators
to be tested for their ability to modulate splicing.
Ercole will collaborate with
AVI regarding AVI Exclusive Target drug discovery and development
as requested by AVI, including but not limited to: compound
identification, mRNA binding locations, in vitro assays and
preclinical testing.
Capitalized terms used in this Agreement have
the meanings set forth in Exhibit 1 .
In consideration of the
premises and the mutual covenants contained herein, the parties
hereto agree as follows:
Article
1.
COLLABORATIVE RESEARCH PLAN
1.1 General;
Collaboration Term.
(a)
Ercole and AVI will work together under the direction of the
Steering Committee to execute the Research Plan to develop Splicing
Modulators.
(b)
The Collaboration Term will begin on the Effective Date and will
continue for three (3) years unless earlier terminated due to
termination of the Agreement under Sections 8.2 or 8.3, or unless
terminated or extended upon mutual agreement of the Parties.
Expiration or earlier termination of the Collaboration will not
affect the other provisions of this Agreement.
1.2 Targets:
General.
Ercole and AVI will each
select ***** exclusive Gene Targets (“Exclusive
Targets”) for their research and development efforts. The
Exclusive Targets selected by Ercole will be “Ercole-AVI
Exclusive Targets” hereunder and will be designated Ercole
Exclusive Targets under the Isis CLA. The Exclusive Targets
selected by AVI will be “AVI Exclusive Targets”
hereunder and will also be designated Ercole Exclusive Targets
under the Isis CLA. Exhibit 2 hereto contains a list
of the initial Ercole-AVI Exclusive Targets and, subject to the
Isis CLA, the initial AVI Exclusive Targets as of the Effective
Date. Promptly following the Effective Date, Ercole will propose
the initial AVI Exclusive Targets as “Ercole Exclusive
Targets” under the Isis CLA in accordance with the procedures
provided for in Article 1 of the Isis CLA and will cooperate with
AVI to select a replacement in the event that any such proposed
target is rejected by Isis. Gene Targets may be added to and
removed from Exhibit 2 in accordance with the terms of this
Section and Section 1.3.
1.3 Targets:
Designation, Approval and Replacement.
(a)
Number
of Exclusive Targets. Pursuant to Section 1.3(b), each Party
may increase its respective Gene Target limit beyond the initial
***** Gene Targets by paying ***** per each additional Gene Target.
Subject to the Isis CLA, if AVI desires to increase its Gene Target
limit, it will pay Ercole ***** for each additional Gene Target,
which Ercole will pay to Isis in order to designate the additional
Gene Target as an Ercole Exclusive Target under the Isis CLA. If
Ercole desires to increase its Gene Target limit, Ercole will pay
Isis as required by the Isis CLA for each additional Gene Target in
order to designate the additional Gene Target as an Ercole
Exclusive Target under the Isis CLA.
(b)
Exclusive Target Substitutions
or Additions. The Parties will designate any
additional or substitute Exclusive Targets as follows:
(1)
Target Request. The Party who wishes to designate a
new Gene Target as one of its Exclusive Targets (the
“Requesting Party”) will provide the other Party (the
“Reviewing Party”) with written notice (the
“Request Notice”) of the Gene Target it wishes to
designate as an Exclusive Target (the “Proposed Exclusive
Target”). The Request Notice will include the gene name
and the NCBI accession number, ENSEMBL number or nucleic acid
sequence for the Proposed Exclusive Target.
(2)
Target Review. Within thirty (30) days of receiving
the Request Notice, the Reviewing Party will notify the Requesting
Party in good faith and in writing regarding (A) whether the
Proposed Exclusive Target is subject to the Reviewing Party’s
own Active Program and (B) the nature of any contractual
obligations to a Third Party, including under the Isis CLA, in
effect at the time of the Request Notice that would preclude the
Reviewing Party from granting a license under Section 2 or
collaborating with the Requesting Party with respect to the
Proposed Exclusive Target (the “Review
Notice”).
(3)
Target Rejection due to Active Program. If the
Proposed Exclusive Target is subject to the Reviewing Party’s
own Active Program, the Proposed Exclusive Target will be rejected
and will not become an Exclusive Target of the Requesting Party. If
the Proposed Exclusive Target is not rejected under this subsection
(3), the Proposed Exclusive Target will become an Exclusive Target
of the Requesting Party and will be added to the Requesting
Party’s list of Exclusive Targets on Exhibit 2
.
(4)
Target Acceptance; Limitations. If the Proposed
Exclusive Target is subject to contractual limitations as
identified in the Review Notice under Section 1.3(b)(2), then
within fifteen (15) days of receiving the Review Notice, the
Requesting Party must notify the Reviewing Party whether or not it
accepts the Proposed Exclusive Target subject to the contractual
limitations set forth in the Review Notice. If the Requesting
Party accepts the Proposed Exclusive Target, then the accepted
Proposed Exclusive Target will become an Exclusive Target of the
Requesting Party and will be added to the Requesting Party’s
list of Exclusive Targets on Exhibit 2 ; provided,
however that, with respect to such accepted Exclusive Target,
the licenses granted under Section 2 below will be limited as
described in the Review Notice.
(c) Exclusive
Target Removal.
(1)
After the Effective Date, a Party may remove Gene Targets from its
list of Exclusive Targets on Exhibit 2 , by (i) providing
the other Party written notice of its election to do so and (ii)
updating the list on Exhibit 2 to remove the Gene Target;
provided, however , that each Party may only remove up to
***** Gene Targets from its list of Exclusive Targets in any six
month period. In addition, once a Party removes a Gene Target
from its list of Exclusive Targets, such Party cannot attempt to
re-designate the removed Gene Target as an Exclusive Target until
two years have passed from the date such Gene Target was removed
other than by operation of Section 1.3(b)(3).
(2)
The Parties shall use commercially reasonable efforts to develop
and commercialize Products against each of its Exclusive Targets.
If a Party is not making
such an effort, it must
provide a sufficient written justification to the other Party or
enter into discussions with the other Party, if requested,
regarding surrender of its license hereunder to such Exclusive
Targets.
1.4 Collaborative
Research Plan.
General Overview
. Ercole and AVI will identify and develop Splicing
Modulators that modulate the splicing of Ercole-AVI Exclusive
Targets and AVI Exclusive Targets, as more specifically described
in the Research Plan. All data and information generated as a
result of either Party’s identification of Splicing
Modulators that modulate the splicing of Ercole-AVI Exclusive
Targets shall be owned by Ercole. All data and information
generated as a result of either Party’s identification of
Splicing Modulators that modulate the splicing of AVI Exclusive
Targets shall be owned by AVI. Ownership of Splicing Modulators and
any resultant patents will be determined pursuant to Section
4.1(d).
1.5 Steering
Committee.
(a)
Members. The Parties shall establish a Steering Committee
within thirty (30) calendar days from the Effective Date. The
Steering Committee will be the key management, decision making and
liaison body in relation to the Research Plan and shall:
(i)
consist of two (2) representatives of Ercole and two (2)
representatives of AVI, as notified by such Party to the other
Party from time to time in writing. Each representative of a Party
shall have one vote;
(ii)
be chaired by a representative chosen by AVI;
(iii)
hold meetings in person or over the telephone as frequently as the
members of the Steering Committee may agree shall be necessary
during the period of the Research Program or more frequently upon
the reasonable request of either Party but in no event less than
once every six (6) months. Dates of meetings to be held in person
shall be agreed by the Parties not less than thirty (30) days
beforehand. Responsibility for arranging the meetings, including
providing notice and an agenda shall rest with the
chairman;
(iv)
appoint a secretary who shall be responsible for sending draft
minutes of each meeting without undue delay (but in no event more
than thirty (30) days after the applicable meeting).
(b)
Duties. The Steering Committee shall be in charge of the
matters described below:
(i)
managing, reviewing and/or amending the Research Plan, provided
however, that the Steering Committee shall have no authority to
decide any substantial change in the scope of the Research Plan
which would materially increase the costs thereof. Such change
shall require a written agreement between the Parties;
(ii)
managing, reviewing and/or amending the development plan for each
AVI Exclusive Product until an IND is filed, after which time the
Steering Committee will no longer have oversight responsibility for
that AVI Exclusive Product;
(iii)
managing, reviewing and/or amending the development plan for each
Ercole-AVI Exclusive Product until an IND is filed, after which
time the Steering Committee will no longer have oversight
responsibility for that Ercole-AVI Exclusive Product;
(iv)
making proposals to the Parties to review and approve regarding
amendment of the terms of this Agreement;
(v)
shall perform such other functions and responsibilities as are
given to it under the express provisions of this Agreement or as it
shall determine for the purpose of performing the duties set forth
above.
(c)
Operation.
(i)
The Steering Committee shall form a quorum when two (2)
representatives of each Party are present. Decisions of the
Steering Committee require unanimous consent. If any issue is
unresolved after formal consideration by the Steering Committee,
either Party may by written notice to the other refer that issue
for dispute resolution pursuant to Section 12.6.
(ii)
For the avoidance of doubt, notwithstanding any failure of the
Steering Committee and/or the respective officers of each Party to
reach an agreement pursuant to Section 12.6, and until such
disagreement is finally resolved, the provisions of this Agreement
shall continue to be in full force and effect and the Parties shall
be obligated to perform their respective obligations and be
entitled to their respective rights under this
Agreement.
(iii)
Each Party shall be responsible for its own expenses incurred in
connection with Steering Committee meetings. The location of the
meetings of Steering Committee shall alternate at sites selected by
each Party. Unless one Party objects in writing, the Steering
Committee may conduct their meetings via teleconference or
videoconference.
Article
2.
License Grants and Other Rights
2.1 License
Term. As used herein, “License Term”
shall begin on the Effective Date and, unless earlier terminated as
herein provided, shall end on the later of (i) the expiration of
the last to expire patent included in the Patents, or (ii) if all
the patents listed in subpart (i) are found to be either invalid or
unenforceable, ten (10) years from the Effective Date.
2.2 AVI License
Grants. Subject to the AGDG Agreement and the
limitations set forth in Section 1.3(b)(4) and termination
provisions set forth in Sections 2.2(b) below, AVI grants Ercole
the following licenses:
(a)
License Grants. AVI grants Ercole an exclusive worldwide
license to the AVI Patents solely to research, develop, offer for
sale, sell, import and export Ercole-AVI Exclusive Products.
(b)
Termination of Licenses. The licenses granted under
Section 2.2(a) shall automatically terminate with respect to any
Ercole-AVI Exclusive Target which has been removed from the
Ercole-AVI Exclusive Targets pursuant to Section 1.3(c).
2.3 Sublicenses Under
AVI Patent Rights.
(a)
Subject to the terms and
conditions of this Agreement and during the License Term, Ercole
will have the right to grant sublicenses under the licenses from
AVI set forth in Section 2.2 to Third Parties solely for the
purposes of enabling such Third Party to discover, develop and
commercialize Ercole-AVI Exclusive Products.
(b)
Any sublicense granted by Ercole under this Agreement is subject to
and will be consistent with the terms and conditions of this
Agreement. The grant of any such sublicense hereunder will
not relieve Ercole of its obligations under this Agreement. Ercole
will promptly notify AVI of all sublicenses granted by Ercole, as
well as sublicensee contact information.
(c)
In the event of a material
default by any sublicensee under an Ercole sublicense, Ercole will
(i) inform AVI, (ii) hold AVI harmless, and (iii) take any action
reasonably necessary to prevent such default from giving AGDG the
right to terminate the AGDG Agreement. Such actions may include,
but are not limited to, causing the sublicensee promptly to cure
the default and terminating the sublicense.
2.4 Ercole License
Grants. Subject to the UNC License and Isis CLA and the
limitation set forth in Section 1.3(b)(4), Ercole grants AVI the
following licenses:
(a)
License Grants. Ercole grants to AVI an exclusive worldwide
license to the Splicing Patents solely to research, develop, make
and have made, offer for sale, sell, import and export AVI
Exclusive Products.
(b)
Termination of Licenses. The licenses granted under
Section 2.4(a) shall automatically terminate with respect to any
AVI Exclusive Target which has been removed from the AVI Exclusive
Targets pursuant to Section 1.3(c).
2.5 Sublicenses Under
Splicing Patents.
(a)
Subject to the terms and
conditions of this Agreement and during the License Term, AVI may
grant a sublicense to a Third Party collaborator under the Splicing
Patents solely for the purposes of enabling such Third Party to
develop and commercialize AVI Exclusive Products.
(b)
Any sublicense granted by
AVI under this Agreement is subject to and will be consistent with
the terms and conditions of this Agreement, the Isis CLA and the
UNC License.
Without limiting the generality of the
foregoing, as required by the Isis CLA, AVI shall not be permitted
to grant any sublicenses to an AVI Exclusive Product until an IND
has been submitted for that AVI Exclusive Product. The grant of any
such sublicense hereunder will not relieve AVI of its obligations
under this Agreement. AVI will promptly notify Ercole of all
sublicenses granted by AVI, as well as sublicensee contact
information.
(c)
In the event of a material
default by any sublicensee under an AVI sublicense, AVI will (i)
hold Ercole harmless and (ii) take any action reasonably necessary
to prevent such default from giving UNC or Isis the right to
terminate the UNC License or the Isis CLA, as the case may be. Such
actions may include, but are not limited to, causing the
sublicensee promptly to cure the default and terminating the
sublicense.
2.6 Other
Rights .
If the sale or use
of a Product that bears a royalty payable to the other Party under
this Agreement would infringe patent rights owned or controlled by
the other Party (other than Patents expressly licensed hereunder),
the Party controlling such patents covenants not to seek an
injunction against infringement or otherwise enforce such patents
in a manner that would prevent the other Party or its Affiliates or
sublicensees from developing or commercializing the relevant
Product and will, upon request, negotiate a commercially reasonable
license to such patents.
Article
3.
ROYALTIES AND PAYMENTS
3.1 Royalties Payable to
AVI by Ercole on Sales of Products by Ercole.
(a)
Ercole-AVI Exclusive Products. The royalty payable to
AVI by Ercole for sales by Ercole, its Affiliates or sublicensees
of any Ercole-AVI Exclusive Products shall be equal to *****
percent of Net Sales plus an amount equal to the royalty payable by
AVI under the AGDG Agreement as a result of the sale of such
Ercole-AVI Exclusive Products, provided that in no event shall
Ercole be responsible for royalties payable under the AGDG
Agreement in excess of the amounts specified in this subsection
3.1(a). Royalties shall be payable on a country-by-country
basis until the later of expiration of the AVI Patents and Ercole
Invention Patents Covering a particular Ercole-AVI Exclusive
Product or the tenth anniversary of first commercial sale (the
“AVI Royalty Period”) of such Ercole-AVI Exclusive
Product. On a country-by-country basis, if the last AVI Patent and
Ercole Invention Patent Covering a particular Ercole-AVI Exclusive
Product expires prior to the tenth anniversary of first commercial
sale of such Ercole-AVI Exclusive Product, then the applicable
royalty shall be reduced by ***** percent for the remainder of the
AVI Royalty Period. As of the Effective Date, the applicable
royalty rate payable under the AGDG Agreement on Ercole-AVI
Exclusive Products is ***** percent ***** of Net Sales once
cumulative net sales of “Therapeutic Products” (as
defined in the AGDG Agreement) by AVI and its licensees exceed
***** dollars *****. Ercole’s royalty payment obligation will
be reduced by the amount of any future reduction in AVI’s
royalty obligation under the AGDG Agreement. AVI will provide
Ercole with information reasonably requested related to current and
cumulative net sales of PMO Products. This payment obligation
shall survive any expiration or earlier termination of this
Agreement or any of the licenses granted hereunder.
3.2 Royalties Payable to
Ercole by AVI on Sales of Products by AVI.
(a)
AVI Exclusive Products. The royalty payable to Ercole
by AVI for sales by AVI, its Affiliates or sublicensees of any AVI
Exclusive Products shall be equal to ***** percent of Net Sales
plus an amount equal to the royalties payable by Ercole under the
UNC License and the Isis CLA as a result of the sale of such AVI
Exclusive Products, provided that in no event shall AVI be
responsible for royalties payable under the UNC License or the Isis
CLA in excess of the amounts specified below in this subsection
3.2(a). Royalties shall be payable on a country-by-country
basis until the later of expiration of all Splicing Patents and AVI
Invention Patents Covering a particular AVI Exclusive Product or
the tenth anniversary of first commercial sale (the “Ercole
Royalty Period”) of such AVI Exclusive Product. On a
country-by-country basis, if the last Splicing Patent and AVI
Invention Patent Covering a particular AVI Exclusive Product
expires prior to the tenth anniversary of first commercial sale of
such AVI Exclusive Product, then the applicable royalty shall be
reduced by ***** for the remainder of the Ercole Royalty
Period. As of the Effective Date, the applicable royalty rate
payable under the UNC License on AVI Exclusive Products is *****
percent ***** and the applicable royalty rate payable under the
Isis CLA on AVI Exclusive Products is ***** percent *****. This
amount will be reduced by the amount of any future reduction in
Ercole’s royalty obligation under the UNC License or the Isis
CLA. This payment obligation shall survive any expiration or
earlier termination of this Agreement or any of the licenses
granted hereunder.
3.3 Development
Milestones.
(a)
Ercole-AVI Exclusive Products. Ercole will pay or
will cause its Affiliates or sublicensees to pay to AVI the
following milestone payments for each Ercole-AVI Exclusive Product
within sixty (60) days after achievement of each of the following
events in the specified jurisdiction, or where no jurisdiction is
specified, in the first Major Market Country:
|
Milestone Event
|
|
Milestone Payment
|
|
|
Start of IND-Enabling GLP Tox
Studies
|
|
US
$*****
|
|
|
Filing of IND
|
|
US
$*****
|
|
|
First Initiation of Phase II Trial
|
|
US
$*****
|
|
|
US
NDA Approval
|
|
US
$*****
|
|
|
EC
Approval
|
|
US
$*****
|
|
|
Japanese Approval
|
|
US
$*****
|
|
(b)
AVI Exclusive Products. AVI will pay or will cause
its Affiliates or sublicensees to pay to Ercole the following
milestone payments for each AVI Exclusive Product within sixty (60)
days after achievement of each of the following events in the
specified jurisdiction, or where no jurisdiction is specified, in
the first Major Market Country:
|
Milestone Event
|
|
Milestone Payment
|
|
|
Start of IND-Enabling GLP Tox
Studies
|
|
US
$*****
|
|
|
Filing of IND
|
|
US
$*****
|
|
|
First Initiation of Phase II Trial
|
|
US
$*****
|
|
|
US
NDA Approval
|
|
US
$*****
|
|
|
EC
Approval
|
|
US
$*****
|
|
|
Japanese Approval
|
|
US
$*****
|
|
3.4 Commercial Success
Milestones.
In order to satisfy
Ercole’s obligation under the Isis CLA, AVI, its Affiliates
or sublicensees will pay Ercole a one-time milestone payment equal
to ***** dollars ***** for each AVI Exclusive Product that has Net
Sales of ***** dollars ***** or more in a Calendar Year. For
clarity, such payment shall only be due once per AVI Exclusive
Product in the first Calendar Year in which Net Sales total or
exceed ***** dollars ***** and not in any subsequent years when Net
Sales meet or exceed this amount. Any commercial success
milestone due hereunder will be payable in quarterly installments
of ***** dollars ***** over the ***** years following the year in
which the milestone was met.
3.5 Payment of Royalties
and Milestones; Reports.
Each Party will make r oyalty payments
to the other Party for each Product sold during a Calendar Quarter
within sixty (60) days of the last day of that Calendar
Quarter. Each royalty payment will be accompanied by a
written report for that Calendar Quarter showing the calculation of
Net Sales of the Product sold by such Party, its Affiliates and its
sublicensees worldwide during the quarterly reporting period and
the calculation of the royalties and Milestones payable under this
Agreement, all on a country-by-country and Product-by-Product
basis.
3.6 Payment Modalities;
Foreign Currency Conversion; Late Payment Charges;
Offset.
(a)
Payments . All payments by a Party under this
Agreement will be made in United States Dollars by bank wire
transfer in next day available funds to such bank account in the
United States designated in writing by Ercole or AVI, from time to
time.
(b)
Late Payments; Collections . In the event that any
payment, including royalty or milestone payments, due hereunder is
not made when due, the payment will bear interest from the date due
at the lesser of (i) one and one-half percent (1.5%) per month,
compounded monthly, or
(ii) the highest rate permitted by law. If a Party disputes
in writing the amount of an invoice presented by the other Party
within thirty (30) days of receipt of such invoice, the late fees
will only apply to the correct amount as later determined or
agreed. The payment of such interest will not limit a Party
from exercising any other rights it may have as a consequence of
the lateness of any payment. In addition, each Party agrees
to pay all costs of collection, including reasonable
attorneys’ fees, incurred by the other Party in enforcing the
payment obligations after a due date has passed under this
Agreement.
(c)
Conversion.
If a Party receives
any revenues in currency other than U.S. dollars, then for purposes
of making royalty payments required hereunder, such revenues shall
be converted into U.S. dollars at the conversion rate for the
foreign currency as published in the eastern edition of The Wall
Street Journal as of the last business day of the applicable
calendar quarter in which the corresponding sales of Products were
made.
(d)
Offset.
If a Party suffers a
loss as a result of a breach of this Agreement by the other Party,
the non-breaching Party may offset such loss against any amounts
payable hereunder.
3.7 Audits
Rights.
(a)
Upon the written request of AVI or Ercole, as the case may be, and
not more than once in each Calendar Year, AVI or Ercole will permit
the other Party’s independent certified public accountant to
have access during normal business hours to its records as may be
reasonably necessary to verify the accuracy of the royalty reports
and the Party’s compliance in other respects with this
Agreement for the current year and the preceding three years prior
to the date of such request, provided however that any given
calendar year will be subject to audit no more than once. The
accounting firm will disclose to the auditing Party only whether
the royalty reports are correct or incorrect, the specific details
concerning any discrepancies or other non-compliance, and the
corrected amount of Net Sales and royalty payments. No other
information will be provided to the auditing Party.
(b)
If such accounting firm concludes that additional royalties were
owed during such period, the delinquent Party will pay the
additional royalties within sixty (60) days of the date such Party
receives the accounting firm’s written report. The fees
charged by such accounting firm will be paid by the auditing Party
unless the additional royalties, milestones or other payments owed
by the audited Party exceed five percent (5%) of the royalties,
milestones or other payments paid for the time period subject to
the audit, in which case the audited Party will pay the reasonable
fees and expenses charged by the accounting firm.
(c)
Each Party will treat all financial information subject to review
under this Section 3.7 or under any sublicense agreement in
accordance with the confidentiality provisions of Article 5, and
will cause its accounting firm to enter into an acceptable
confidentiality agreement obligating such firm to retain all such
financial information in confidence pursuant to such
confidentiality agreement. Notwithstanding the foregoing, it is
expressly
agreed that a royalty
report provided hereunder may be provided, in whole or in pertinent
part, to UNC or Isis by Ercole to the extent required by the UNC
License or the Isis CLA, as the case may be, or to AGDG by AVI to
the extent required by the AGDG Agreement.
3.8
Taxes.
If
laws, rules or regulations require withholding of income taxes or
other taxes imposed upon payments set forth in this Article 3, each
Party will make such withholding payments as required and subtract
such withholding payments from the payments set forth in this
Article 3. Each Party will submit appropriate proof of
payment of the withholding taxes to the other Party within a
reasonable period of time.
Article
4.
INTELLECTUAL PROPERTY
4.1 Ownership of
Inventions.
(a)
Neither Party hereto will
be deemed by this Agreement to have been granted any license or
other rights to the other Party’s rights in any inventions,
technology, discoveries, or other proprietary property
(collectively, “Inventions”) existing as of the
Effective Date of this Agreement, except as expressly provided
herein.
(b)
Subject to Section 4.1(d),
any Inventions made under the Research Plan, either solely by
Ercole or jointly with AVI, which (i) relate to the Splicing
Patents and do not relate to the AVI Patents or (ii) are Covered by
the Splicing Patents and are not Covered by the AVI Patents, will
be assigned to Ercole. Any Inventions made under the Research
Plan, either solely by AVI or jointly with Ercole, which (x) relate
to the AVI Patents and do not relate to the Splicing Patents or (y)
are Covered by the AVI Patents and are not Covered by the Splicing
Patents, will be assigned to AVI. Such an Invention will be an
“Ercole Invention” or an “AVI Invention,”
as the case may be, and Patents claiming such Inventions will be
“Ercole Invention Patents” or “AVI Invention
Patents,” respectively.
(c)
Subject to Section 4.1(d),
AVI and Ercole will jointly hold title to all Inventions, whether
or not patentable, that are made by either or both Parties under
the Research Plan that relate to or are Covered by both the AVI
Patents and the Splicing Patents, as well as to Patents filed
thereon. Such Inventions will be “Jointly Owned
Inventions,” and Patents claiming such Jointly Owned
Inventions will be “Jointly Owned Invention
Patents.” AVI and Ercole will promptly provide each
other with notice whenever a Jointly Owned Invention is made.
The Parties agree and acknowledge that, except insofar as this
Agreement provides otherwise, the default rights conferred on joint
owners under US patent law as of the Effective Date, including the
right of each Party to independently practice, license and use a
joint patent, will apply in relation to the Jointly Owned Invention
Patents throughout the world as though US patent law applied
worldwide.
(d)
Any invention claiming the
composition of matter of a Splicing Modulator or an analog thereof
and any invention related to the use of such compounds shall be
referred to as a “Compound Invention”. All
Compound Inventions arising from activities under the Research Plan
and related to a Splicing Modulator designed to modulate the
splicing of
an Ercole-AVI Exclusive
Target shall be solely owned by Ercole and shall be designated as
Ercole Inventions. All Compound Inventions arising from
activities under the Research Plan and related to a Splicing
Modulator designed to modulate the splicing of an AVI Exclusive
Target shall be solely owned by AVI and shall be designated as AVI
Inventions.
(e)
The Parties agree, upon
reasonable request, to execute any documents reasonably necessary
to effect and perfect each other’s ownership of any
Invention.
4.2 Filing, P
rosecution, Maintenance, Enforcement and Defense of Patents Owned
or Controlled by AVI.
(a)
AVI will have the sole and exclusive right, in its sole discretion
and at its expense, to file, prosecute, maintain, enforce and
defend any Patents within the AVI Patents and the AVI Invention
Patents. Ercole shall provide such assistance, at AVI’s
expense, as AVI may reasonably request in pursuing such legal
action.
(b)
Ercole will promptly advise AVI if Ercole becomes aware of any
suspected or actual infringement of the AVI Patents and the AVI
Invention Patents by any person.
(c)
AVI will be entitled to all damages and monetary awards recovered
as a result of its enforcement of the AVI Patents and the AVI
Invention Patents. Notwithstanding the foregoing, if AVI’s
enforcement of the AVI Patents and AVI Invention Patents results
from a Third Party’s unauthorized development, sale or other
commercialization of a Splicing Modulator that targets an
Ercole-AVI Exclusive Target, then Ercole shall be entitled to
receive ***** percent of any damages or monetary awards recovered
and remaining after deduction of each Parties’ expenses
associated with the enforcement action.
4.3 Filing, P
rosecution, Maintenance, Enforcement and Defense of Patents Owned
or Controlled by Ercole.
(a)
Ercole will have the sole and exclusive right and responsibility at
its own expense, to file, prosecute, maintain, enforce and defend
the Ercole Splicing Patents and the Ercole Invention Patents.
AVI shall provide s
