SUBLICENSE AGREEMENT BY AND AMONG SEMACO, INC., A DELAWARE CORPORATION,

 

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                                                                    EXHIBIT 10.1

 

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN

FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 

 

 

                              SUBLICENSE AGREEMENT

 

                                  BY AND AMONG

 

                                  SEMACO, INC.,

                             A DELAWARE CORPORATION,

 

                                       AND

 

                            BARBARA GILCHREST, M.D.,

                                  AN INDIVIDUAL

 

                                       AND

 

                             CANCERVAX CORPORATION,

                              A DELAWARE CORPORATION

 

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                              SUBLICENSE AGREEMENT

 

         This Sublicense Agreement is entered into and made effective as of this

10th day of March, 2004 (the "Effective Date"), between SEMACO, Inc., a Delaware

corporation ("SEMACO") and Barbara Gilchrest, M.D., an individual ("Gilchrest"),

on the one hand, and CancerVax Corporation, a Delaware corporation

("CancerVax"), on the other hand.

 

                                    RECITALS

 

         A.         Gilchrest, as Chair of the Boston University School of

Medicine, Department of Dermatology, has developed, together with certain

colleagues at Boston University, certain intellectual property rights relating

to telomere homolog oligonucleotides (also referred to as T-oligonucleotides, or

T-Oligos), and such intellectual property rights are owned by Boston University,

and have been licensed to, SEMACO pursuant to a license agreement between SEMACO

and Boston University.

 

         B.        SEMACO has the exclusive right to grant a sublicense to such

intellectual property rights, subject to said license agreement with Boston

University.

 

         C.        SEMACO desires to grant to CancerVax, and CancerVax wishes to

acquire, certain exclusive, worldwide rights and sublicenses to such

intellectual property rights and to certain patent rights, property rights and

know-how of SEMACO and Gilchrest with respect thereto, subject to the terms and

conditions set forth herein and to said license agreement with Boston

University.

 

                                    AGREEMENT

 

         NOW, THEREFORE, in consideration of the mutual covenants and conditions

set forth herein, the parties hereby agree as follows:

 

         1.        Definitions. Capitalized terms shall have the meaning set

forth below.

 

                  1.1       Affiliate. The term "Affiliate" shall mean any entity

which directly or indirectly controls, is controlled by or is under common

control with CancerVax. The term "control" as used herein means the possession

of the power to direct or cause the direction of the management and the policies

of an entity, whether through the ownership of a majority of the outstanding

voting securities or by contract or otherwise.

 

                  1.2       Confidential Information. The term "Confidential

Information" shall mean any and all proprietary or confidential information of

SEMACO, Gilchrest or CancerVax which may be exchanged between the parties at any

time and from time to time during the term of this Agreement. Information shall

not be considered confidential to the extent that it:

 

                           1.2.1     Is publicly disclosed through no fault of

any party hereto, either before or after it becomes known to the receiving

party; or

 

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                           1.2.2     Was known to the receiving party prior to

the date of this Agreement, which knowledge was acquired independently and not

from another party hereto (or such party's employees); or

 

                            1.2.3     Is subsequently disclosed to the receiving

party in good faith by a third party who has a right to make such disclosure; or

 

                           1.2.4     Has been published by a third party as a

matter of right.

 

                   1.3       Field. The term "Field" shall mean the prevention,

treatment, control, prognosis or diagnosis of cancer; provided, however, that

the Field shall not include any product intended for use as a sunscreen or

sunless tanning aide, or for the treatment of skin damage (excluding Skin

Cancer, as such term is defined below) due to photoaging.

 

                  1.4       Intellectual Property Rights. The term "Intellectual

Property Rights" shall mean all intellectual property, including, without

limitation, inventions, patents and patent applications and all provisionals,

divisions, substitutes, continuations, continuations-in-part, re-examinations,

reissues, renewals, extensions, additions, corresponding foreign patents or

patent applications, and compositions of matter.

 

                  1.5       Licensed Know-How. The term "Licensed Know-How" shall

mean all data, information, know-how, technology, research results, methods of

use, manufacture, purification, testing and analysis developed and/or used by

SEMACO and/or Gilchrest in relation to the Licensed Technology.

 

                  1.6       Licensed Products. The term "Licensed Products" shall

mean any article, composition, apparatus, substance, chemical or any other

material for use in the Field that is covered by the Patent Rights or the

Property Rights, incorporates the Licensed Technology or the Licensed Know-How,

or that is discovered, derived or developed using the Licensed Technology, the

Licensed Know-How, the Patent Rights or the Property Rights.

 

                  1.7       Licensed Technology. The term "Licensed Technology"

shall mean T-Oligonucleotides, defined as single-stranded DNA fragments

(oligonucleotides) [***].

 

                  1.8       Net Sales. The term "Net Sales" shall mean [***].

 

*** Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.

 

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                  1.9       Patent Rights. The term "Patent Rights" shall mean

all of SEMACO and Gilchrest's Intellectual Property Rights related to the

Licensed Technology, the Licensed Know-How, the Licensed Products or the

Property Rights including, without limitation, the patents and patent

applications listed on EXHIBITS A-1 AND A-2 attached hereto.

 

                  1.10      Phosphorothioate Backbone. The term "Phosphorothioate

Backbone" shall mean an oligonucleotide backbone that is a sulpher diester (as

compared to a normal phosphorous or phosphodiester bond), which is not easily

hydrolyzable.

 

                  1.11      Prior Patent Expenses. The term "Prior Patent

Expenses" shall have the meaning set forth in Section 5.3 of - this Agreement.

 

                  1.12       Property Rights. The term "Property Rights" shall

mean all of SEMACO and Gilchrest's property rights to the biological material

described as the T-Oligonucleotides, their derivatives, variations and

modifications, including any proteins, nucleic acids and/or biomolecules

produced and/or secreted by such materials; any antibodies directed against such

materials or their targets, and any agents bound or activated by such materials,

however acquired.

 

                  1.13      Skin Cancer. The term "Skin Cancer" shall mean any

disease where cancerous cells originate in the epidermal layer of the skin,

including without limitation, basal cell carcinoma, squamous cell carcinoma,

melanoma (including uveal and mucosal melanoma), or any other malignant skin

conditions.

 

                  1.14      University. The term "University" shall mean Trustees

of Boston University.

 

                  1.15      University License Agreement. The term "University

License Agreement" shall mean the License Agreement dated as of December 11,

2001, between SEMACO and the University, as amended from time to time.

 

         2.        Sublicense Terms and Conditions; Negative Covenants.

 

                  2.1       Grant of Sublicense. Subject to the terms of this

Agreement and the University License Agreement, SEMACO hereby grants to

CancerVax:

 

                           2.1.1     an exclusive, worldwide sublicense under the

Patent Rights and Licensed Know-How, including the right to grant sublicenses,

to make, have made, use, sell, offer to sell, export and import any Licensed

Products; and

 

                           2.1.2     an exclusive, worldwide sublicense and

bailment to possess the Property Rights and the Licensed Technology, including

the right to grant sublicenses and to transfer possession, to make, have made,

use, sell, offer to sell, export and import any Licensed Products.

 

                  2.2       For the avoidance of doubt, it is understood and

agreed by the Parties the Grant of Sublicense included in this Section 2.1 shall

not include any rights for CancerVax to make, have made, use, sell, offer to

sell, export and import any article, composition, apparatus,

 

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substance, chemical or any other material intended for use outside of the Field,

nor shall it prevent SEMACO or Gilchrest from using the Licensed Know-How, the

Patent Rights, Intellectual Property and Licensed Technology to develop any

article, composition, apparatus, substance, chemical or any other material

intended for use outside the Field.

 

         3.        Right of First Refusal.

 

                  3.1       SEMACO and Gilchrest each hereby grant to CancerVax a

right of first refusal to negotiate for the acquisition or licensing of

additional technology, Intellectual Property Rights and know-how developed or

currently owned or licensed by Gilchrest and/or SEMACO, in the Field and not

subject to the grant of Paragraph 2.1, and for any dermatologic use, including

any other diagnostic or therapeutic products for use in the Field.

Nothwithstanding the foregoing, this right of first refusal shall specifically

exclude any products intended for use to induce hair growth or coloration, or to

treat Alzheimer's Disease. Once CancerVax has declined or failed to timely

exercise its right of first refusal on any of the Intellectual Property Rights

covered under this Section 3.1, CancerVax shall not be entitled to a right of

first refusal on any subsequent continuation-in-part patent applications derived

from such declined Intellectual Property Rights where such continuations-in-part

applications does not include any subject matter that is within the Field.

 

                  3.2       SEMACO shall provide CancerVax with written notice of

any such new technology, or Intellectual Property Rights. CancerVax will have

thirty (30) days to express its interest in negotiating with SEMACO for such

rights. CancerVax shall be entitled to negotiate with SEMACO for a period of

ninety (90) days following SEMACO's receipt of any such notice of interest from

CancerVax.

 

                  3.3       Notwithstanding the foregoing, for any technology,

Intellectual Property Rights or know-how licensed to SEMACO under the University

License Agreement as of the Effective Date, CancerVax will have sixty (60) days

from the Effective Date to express its interest in negotiating with SEMACO for

such rights; provided, however, that, prior to the Effective Date, SEMACO shall

have provided CancerVax with the relevant patent numbers, in the case of issued

patents, or with a copy of all such patent applications or invention

disclosures, in the case of technology, Intellectual Property Rights or know-how

not covered by issued patents. CancerVax shall be entitled to negotiate with

SEMACO for a period of ninety (90) days following SEMACO's receipt of any such

notice of interest from CancerVax.

 

         4.        Consideration. SEMACO shall receive from CancerVax the

following consideration in relation to the rights and sublicenses granted to

CancerVax under this Agreement:

 

                  4.1       Milestones. CancerVax shall pay the milestone

payments set forth on EXHIBIT B to SEMACO upon the occurrence of each event

specified. Payment of the milestones shall be due within thirty (30) days of the

achievement of each event.

 

                  4.2       Research Support.

 

                           4.2.1     CancerVax shall pay [***] per calendar

quarter in advance to SEMACO for a period of three (3) years, commencing on the

Effective Date, for support of

 

*** Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.

 

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research directly related to the Licensed Technology, based upon a research and

Research Program to be mutually agreed upon between SEMACO and CancerVax within

sixty (60) days following the Effective Date (the "Research Program"). The

Research Program shall be performed by the University under the direction of

Gilchrest as Chair of the Boston University School of Medicine, Department of

Dermatology, pursuant to a sponsored research agreement between the University

and SEMACO. The sponsored research agreement shall be executed within sixty (60)

days following the Effective Date, and shall be subject to prior review and

approval by CancerVax.

 

                           4.2.2     Subject to the University's policies and

such conditions as the University may reasonably impose, SEMACO shall permit an

employee or consultant of CancerVax to work with SEMACO in SEMACO's facilities

on a full-time basis for purposes of ensuring the transfer to CancerVax of

technology developed by SEMACO in the furtherance of the Research Program. Such

employee or consultant shall be reasonably acceptable to SEMACO. SEMACO shall

have the right to request CancerVax to replace such employee or consultant if

SEMACO determines, in its sole discretion, that such employee or consultant

materially violates any of the rules, regulations or policies of SEMACO or the

University. CancerVax shall be and shall remain fully responsible for such

employee or consultant and shall indemnify, defend and hold SEMACO and the

University and their trustees, officers, directors, employees, agents and

affiliates harmless from and against any and all acts or omissions of such

employee or consultant.

 

                 4.3       Consulting Agreement.

 

                           4.3.1     As consideration for entering into a three

(3)-year consulting agreement with CancerVax, CancerVax shall pay a consulting

fee at an annualized rate of [***] per twelve-month period to Gilchrest, payable

in advance in equal monthly installments, beginning on the Effective Date, plus

reasonable travel expenses approved by CancerVax.

 

                            4.3.2     Subject to the approval of the board of

directors of CancerVax, Gilchrest shall be granted options to purchase [***]

shares of CancerVax common stock in accordance with CancerVax's 2003 Equity

Incentive Plan. One-third (1/3) of such options would vest after one (1) year,

with the balance vesting monthly over the next two (2) years of service to

CancerVax.

 

                 4.4       Royalties.

 

                           4.4.1     Percentage Royalty. Subject to the terms and

conditions of this Agreement, CancerVax shall pay to SEMACO a royalty based on

the Net Sales of all Licensed Products, as follows:

 

                                    (a)       [***] of Net Sales of the Licensed

Products that are less than or equal to [***];

 

                                    (b)       [***] of Net Sales of the Licensed

Products that are greater than [***] but less than [***]; and

 

*** Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.

 

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                                    (c)       [***] of Net Sales of the Licensed

Products that are equal to or greater than [***].

 

                            4.4.2     Royalties on Sublicenses. If CancerVax

receives a royalty or milestone payment from a third party (other than an

Affiliate of CancerVax) in relation to any sublicense agreement for the Licensed

Products or the sale of the Licensed Products, CancerVax shall pay to SEMACO the

following payments (in each case excluding, however, any research or development

support, equity or other non-monetary payments), within forty-five (45) days of

its receipt of such payment:

 

                                     (a)       [***] of any such royalty or

milestone payment received by CancerVax if CancerVax enters into a sublicense

agreement with respect to the Licensed Products prior to the filing of an IND;

 

                                    (b)        [***] of any such royalty or

milestone payment received by CancerVax if CancerVax enters into a sublicense

agreement with respect to the Licensed Products after filing an IND but prior to

the completion of a Phase I/II clinical trial; or

 

                                     (c)       if clauses (a) or (b) above are not

applicable, [***] of any such royalty or milestone payment received by

CancerVax.

 

                                    (d)       Set-Off. In the event that

CancerVax must pay royalties or other payments to any third party in relation to

the sale of the Licensed Products based upon rights dominating those of SEMACO,

the royalty payable to SEMACO shall be reduced by the amount of any such third

party payment. CancerVax shall promptly notify SEMACO, in writing, of any such

claim and shall consult with SEMACO to determine the validity of the claim and

the amount of any royalties or payments that should be paid to any third party.

 

                  4.5       Quarterly Payments.

 

                            4.5.1     Sales by CancerVax. With regard to Net Sales

made by CancerVax or its Affiliates, royalties shall be payable by CancerVax

quarterly, within forty-five (45) days after the end of each calendar quarter,

based upon the Net Sales of Licensed Products during such preceding calendar

quarter, commencing with the calendar quarter in which the first commercial sale

of any Licensed Product is made.

 

                           4.5.2     Sales by Sublicensees. With regard to Net

Sales made by sublicensees of CancerVax or its Affiliates, royalties shall be

payable by CancerVax quarterly, within sixty (60) days after the end of each

calendar quarter, based upon the Net Sales of Licensed Products by such

sublicensee during such preceding calendar quarter, commencing with the calendar

quarter in which the first commercial sale of any Licensed Product is made by

such sublicensee.

 

                  4.6       Duration of Royalty Obligations. The royalty

obligations of CancerVax as to each Licensed Product shall terminate on a

country-by-country basis concurrently with the expiration of the last to expire

of any claim of the Patent Rights utilized by or in such Licensed Product in

each such country or, with respect to Licensed Products not utilizing any Patent

 

*** Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.

 

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Rights, fifteen (15) years after the date of first commercial sale of such

Licensed Product in such country.

 

                  4.7       Reports. CancerVax will furnish to SEMACO a detailed

written report of Net Sales of the Licensed Products and the royalty due and

payable thereon, including a description of any offsets or credits deducted

therefrom, on a product-by-product and country-by-country basis, for the

calendar quarter upon which the royalty payment is based.

 

                  4.8       Records. CancerVax will keep, and cause its

Affiliates and sublicensees to keep, full, complete and proper records and

accounts of all sales of Licensed Products in sufficient detail to enable the

royalties payable on Net Sales of each Licensed Product to be determined. SEMACO

shall have the right to appoint an independent certified public accounting firm

approved by CancerVax, which approval shall not be unreasonably withheld,

conditioned or delayed to audit the records of CancerVax, its Affiliates and

sublicensees as necessary to verify the royalties payable pursuant to this

Agreement. Any auditing firm appointed by SEMACO shall execute a confidentiality

agreement with CancerVax prior to performing such audit. CancerVax, its

Affiliates and sublicensees will pay to SEMACO an amount equal to any additional

royalties to which SEMACO is entitled as disclosed by the audit, plus interest

thereon at the rate of six percent (6%) per annum. Such audit shall be at

SEMACO's expense; provided, however, that if the audit discloses that SEMACO was

underpaid royalties with respect to any Licensed Product by at least five

percent (5%) for any calendar quarter, then CancerVax, its Affiliates or

sublicensee, as the case may be, will reimburse SEMACO for any such audit costs,

plus interest thereon at the rate of six percent (6%) per annum. SEMACO may

exercise its right of audit as to each of CancerVax, its Affiliates or

sublicensees no more frequently than once in any calendar year, unless an audit

has revealed underpayments of five percent (5%) or more in which case SEMACO

shall be entitled to conduct such audits no more frequently than once in any

three-month period, upon ten (10) days prior written notice. . The accounting

firm shall disclose to SEMACO only information relating to the accuracy of the

royalty payments. CancerVax, its Affiliates and sublicensees will preserve and

maintain all such records required for audit for a period of six (6) years after

the calendar quarter to which the record applies.

 

                  4.9       Foreign Sales. The remittance of royalties payable on

sales outside the United States shall be payable to SEMACO in United States

Dollar equivalents at the official rate of exchange of the currency of the

country from which the royalties are payable, as quoted in the Wall Street

Journal for the last business day of the calendar quarter in which the royalties

are payable. If the transfer of or the conversion into the United States Dollar

equivalents of any such remittance in any such instance is not lawful or

possible, the payment of such part of the royalties as is necessary shall be

made by the deposit thereof, in the currency of the country where the sale was

made on which the royalty was based to the credit and account of SEMACO or its

nominee in any commercial bank or trust company of SEMACO'S choice located in

that country, written notice of which shall be given by CancerVax to SEMACO.

 

                  4.10      Foreign Taxes. Any tax required to be withheld by

CancerVax under the laws of any foreign country for the accounts of SEMACO will

be paid by CancerVax for and on behalf of SEMACO to the appropriate governmental

authority, and CancerVax will furnish SEMACO with proof of payment of such tax

together with official or other appropriate evidence issued by the applicable

government authority. Any such tax actually paid on SEMACO'S

 

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behalf shall be deducted from royalty payments due SEMACO. SEMACO and CancerVax

agree to cooperate with each other to claim any exemptions for such deductions

or withholdings under any agreement or treaty from time to time in effect.

 

                  4.11      Late Payments. Any late sublicense, research support,

consultant, milestone, royalty or other payments shall bear interest at the rate

of six percent (6%) per annum. Nothing herein is intended or shall be construed

to preclude SEMACO or Gilchrest from exercising any other rights or remedies it

may otherwise have in the event of CancerVax's failure to timely make the

payments due hereunder.

 

         5.         Patent Matters.

 

                  5.1       Patent Prosecution and Maintenance. From and after

the date of this Agreement, the provisions of this Section 5 shall control the

prosecution and maintenance of any patent included within the Patent Rights.

Subject to the requirements, limitations and conditions set forth in this

Agreement, SEMACO shall direct and control (i) the preparation, filing and

prosecution of the United States and foreign patent applications within the

Patent Rights (including any interferences and foreign oppositions) and (ii)

maintain the patents issuing therefrom. SEMACO shall select the patent attorney,

subject to CancerVax's written approval, which approval shall not be

unreasonably withheld, conditioned or delayed. CancerVax shall have full rights

of prior consultation with the patent attorney so selected on all matters

relating to SEMACO Patent Rights. SEMACO shall use its best efforts to implement

all reasonable requests made by CancerVax with regard to the preparation,

filing, prosecution and/or maintenance of the patent applications and/or patents

within the Patent Rights.

 

                  5.2       Information to CancerVax. SEMACO shall keep CancerVax

informed with regard to the patent application and maintenance processes. SEMACO

shall deliver to CancerVax copies of all patent applications and amendments at

least thirty (30) days prior to the filing thereof, unless the Parties agree in

writing, on a case-by-case basis, to a shorter period, as well as copies of all

related correspondence and other related matters.

 

                  5.3       Patent Costs. CancerVax acknowledges and agrees that

the sublicenses granted hereunder are in part in consideration for CancerVax's

assumption of patent costs and expenses as described herein, including all

reasonable actual prior maintenance and prosecution costs as of the Effective

Date (the "Prior Patent Expenses"), the total of which is [***] In addition,

CancerVax will pay for all patent expenses incurred by SEMACO pursuant to

Section 5.1 hereof. CancerVax agrees to pay all such past and future patent

expenses directly or to reimburse SEMACO for the payment of such expenses within

sixty (60) days after CancerVax receives an acceptable itemized invoice

therefore. In the event CancerVax elects to discontinue payment for the filing,

prosecution and/or maintenance of any patent application and/or patent within

the Patent Rights, any such patent application or patent shall be excluded from

the definition of the Patent Rights and from the scope of the license granted

under this Agreement, and all rights relating thereto shall revert to SEMACO.

CancerVax will give SEMACO at least thirty (30) days' prior written notice of

such election. No such notice shall have any effect on CancerVax's obligations

to pay expenses incurred up to the effective date of such election.

 

*** Certain information on this page has been omitted and filed separately with

the Commission. Confidential treatment has been requested with respect to the

omitted portions.

 

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                  5.4       Ownership. It is anticipated that the parties and the

University may develop and/or acquire technology or inventions in connection

with the Research Program relating to the Licensed Products. In the event such

technology or inventions result from the joint activities of CancerVax and the

University and/or SEMACO ("Joint Improvements"), such Joint Improvements shall

be jointly owned by CancerVax and the University and/or SEMACO and shall be

considered part and parcel of the Patent Rights, Property Rights, Licensed

Technology and/or Licensed Know-How (as applicable) under the terms of this

Agreement. Such technology or inventions which are solely the result of

activities of the University and/or SEMACO, or their employees or consultants,

by internal development, acquisition or licensing, and any patent or other

Intellectual Property Rights resulting therefrom, shall be solely the property

of the University and/or SEMACO ("SEMACO Improvements"); provided, however, that

all SEMACO Improvements shall be considered part and parcel of the Patent

Rights, Property Rights, Licensed Technology and/or Licensed Know-How (as

applicable) under the terms of this Agreement. Such technology or inventions

which are solely the result of activities of CancerVax's employees, consultants

or Affiliates, by internal development, acquisition or licensing, and any patent

or other Intellectual Property Rights resulting therefrom, shall be the sole

property of CancerVax.

 

                  5.5       SEMACO Right to Pursue Patent. If at any time during

the term of this Agreement, CancerVax's rights with respect to the Patent Rights

are terminated, SEMACO shall have the right to take whatever action SEMACO deems

appropriate to obtain or maintain the corresponding patent protection at its own

expense. If SEMACO pursues patents under this Section 5.5, CancerVax agrees to

cooperate fully, including by providing, at no charge to SEMACO, all appropriate

technical data and executing all necessary legal documents.

 

                  5.6       Infringement Actions.

 

                           5.6.1     Notification of Infringement. In the event a

party to this Agreement acquires information that a third party is infringing

the Patent Rights, the Property Rights, the Licensed Technology and/or the

Licensed Know-How, the party acquiring such information shall promptly notify

the other parties to the Agreement in writing of such infringement.

 

                           5.6.2     Enforcement of Infringement Actions.

 

                                    (a)       CancerVax will have the first

right, but not the obligation, to institute, prosecute and control, at its own

expense, any action or proceeding with respect to infringement or

misappropriation of the Patent Rights, the Property Rights, the Licensed

Technology and/or the Licensed Know-How, by counsel of its own choice, and will

consult with SEMACO and the University on any actions that CancerVax proposes to

take in such action or proceeding. SEMACO and the University will have the

right, at their own expense, to be jointly represented in any such action by

counsel of their own choice.

 

                                    (b)       If CancerVax fails to bring an

action or proceeding or otherwise take appropriate action in CancerVax's

discretion to abate such infringement or misappropriation within a period of

ninety (90) days of written notice by SEMACO or the University to CancerVax

requesting such action, SEMACO and the University will each have the

 

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right, but not the obligation, to bring and control, by counsel of its own

choice, any such infringement or misappropriation action or proceeding;

provided, however, that neither SEMACO nor the University will be entitled to

bring any such action or proceeding if CancerVax reasonably objects thereto on

the grounds that such action or proceeding could threaten the validity or

enforceability of the Patent Rights, the Property Rights, the Licensed

Technology or the Licensed Know-How. CancerVax will cooperate with SEMACO and

the University in any such action or proceeding brought by SEMACO and/or the

University against a third party, and will have the right to consult with SEMACO

and the University and to participate in and be represented by independent

counsel in such litigation at its own expense.

 

                                    (c)       If a party brings any action or

proceeding under this Section 5.6.2, the other parties agree, at the request and

expense of the first party, to be joined as a party plaintiff to the extent

necessary to prosecute the action or proceeding and to give the first party

reasonable assistance and authority to file and prosecute the suit, including

reasonable access to the inventors and records related to such action which are

under the control of such other party.

 

                                    (d)       The party that controls the

prosecution of a given action under this Section 5.6.2 will also have the right

to control settlement of such action; provided, however, that no settlement will

be entered into concerning or affecting the validity or enforceability of the

Patent Rights, the Property Rights, the Licensed Technology or the Licensed

Know-How or any other rights of the other parties or the University without the

written consent of the oth