Exhibit 10.1
EXCLUSIVE LICENSE
AGREEMENT
This Exclusive License Agreement
(“Agreement”) is entered into by and between VALENTIS,
INC. (“Licensor”), a Delaware corporation having a
principal place of business at 533 Airport Blvd., Suite 400,
Burlingame, California, and ACACIA PATENT ACQUISITION CORPORATION
(“APAC”), a Delaware corporation having a principal
place of business at 500 Newport Center Drive, Suite 700, Newport
Beach, CA 92660 (collectively referred to herein as the
“Parties” and individually, a “Party”). The
effective date of this Agreement shall be the date on which the
last Party executes this Agreement below (the “Effective
Date”).
BACKGROUND
Whereas, Licensor is the sole and
exclusive owner of (i) U.S. Patent No(s). 6011148 and 7026468; (ii)
U.S. Patent Application No(s). 09/121,798 11/327,987 and
10/527,618; and (iii) all related patent applications,
corresponding foreign patents and foreign patent applications, and
all continuations, continuations in part, divisions, extensions,
renewals, reissues and re-examinations of the U.S. Patents and U.S.
Patent Applications relating to all inventions thereof, which are
collectively referred to as the “Patents” (the
“Patents”); and
Whereas, Licensor is willing to
grant worldwide exclusive license rights in the Patents to APAC and
APAC in turn, desires to license and enforce the Patents and to
provide Licensor a certain percentage of the net proceeds arising
from such licensing and enforcement as provided herein.
NOW, THEREFORE
, in consideration of the promises
and mutual covenants contained herein and for other good and
valuable consideration, Licensor and APAC agree as
follows:
1.
GRANT
1.1.
Subject to the terms and conditions
of this Agreement, Licensor grants to APAC the worldwide, exclusive
right and license under the Patents to make, have made, use,
import, offer to sell or sell products or services covered by the
Patents, including the exclusive right to grant sublicenses
(“Sublicense”), to sue for and collect past, present
and future damages and to seek and obtain injunctive or any other
relief for infringement of the Patents. Notwithstanding anything to
the contrary, the grant to APAC of the exclusive right and license
under the Patents herein shall be exclusive, even as to Licensor,
with respect to any and all Exclusive Parties (as defined below)
and APAC shall have the sole and exclusive right under the Patents
to deal with one or more Exclusive Parties in any and all matters
relating to the Patents, including without limitation any and all
direct and indirect offers for sale and sales of products and
services, in whole or in part, covered by the Patents to such
Exclusive Parties. The term “Exclusive Party” shall
mean: (a) a declaratory judgment plaintiff or an infringement
defendant under any of the Patents; or (b) a party with which APAC
has initiated or undertaken licensing communications, discussions
and/or negotiations or otherwise asserted any of the Patents
against, provided that an Exclusive Party shall be deemed to
include any and all of its affiliates. Licensor expressly retains
no rights in or to the Patents, including without limitation, the
right to sue for infringement of the Patents prior to any
termination of this Agreement and specifically grants APAC all such
rights prior to any termination. The exclusive right and license
granted
herein shall exist for the life of
the Patents, or as otherwise provided in Section 6
below.
1.2.
Notwithstanding anything herein to
the contrary, this Agreement shall terminate immediately, without
further notice, if APAC files a claim asserting in any way that any
of the Patents or any portion thereof is invalid or unenforceable
where the filing is by APAC or a third party on behalf of
APAC.
1.3.
Upon request by Licensor, APAC shall
keep Licensor reasonably informed as to the status of APAC’s
licensing efforts and provide a copy of each Sublicense to
Licensor.
1.4.
Notwithstanding anything herein to
the contrary, subject to Licensor’s marking of each of its
products in a conspicuous manner so as to identify each of the
applicable Patents embodied in such Product (e.g., U.S. Patent No.
6011148), APAC hereby grants to Licensor a limited, non-exclusive,
non-transferable, royalty-free, perpetual, irrevocable, personal
right and license under the Patents to make, have made, use,
import, offer to sell or sell products or services of Licensor (the
“License”). Upon prior written approval by APAC, such
approval not to be unreasonably withheld or delayed, Licensor may
grant to Licensor’s wholly owned subsidiaries a limited,
non-exclusive, non-transferable, royalty-free, perpetual, personal
right and license under the Patents to make, use, import, offer to
sell or sell products or services of the subsidiary provided (i)
the subsidiary marks of each of its products in a conspicuous
manner so as to identify each of the applicable Patents embodied in
such product or service; (ii) the subsidiary is not an Exclusive
Party; and (iii) the subsidiary agrees to be bound by the
applicable terms of this Agreement in writing.
1.5.
APAC acknowledges that Licensor is a
party to an Agreement and Plan of Merger pursuant to which Urigen
N.A., Inc. (“Urigen”) shall become a subsidiary of
Licensor. Upon completion of the merger, Licensor may grant to
Urigen, N.A. a limited, non-exclusive, non-transferable,
royalty-free, perpetual, personal right and license under the
Patents to make, use, import, offer to sell or sell products or
services of Urigen provided Urigen (i) marks of each of its
products in a conspicuous manner so as to identify each of the
applicable Patents embodied in such product or service; and (ii)
agrees to be bound by the applicable terms of this Agreement in
writing.
1.6.
Other than as expressly set forth in
Section 1.4 and 1.5 above, Licensor expressly retains no rights in
or to the Patents, including without limitation no rights to sue
for and collect past, present and future damages and to seek and
obtain injunctive or any other relief for infringement of the
Patents, and no other rights or licenses under the Patents are
granted or implied.
2.
ROYALTIES AND OTHER
PAYMENTS
2.1.
APAC shall pay Licensor a continuing
royalty equal to fifty percent (50%) of the Net Proceeds, as
defined below. For purposes hereof, the following terms shall have
the following meanings:
“ Net Proceeds ”
shall mean Total Recoveries less the APAC Costs.
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“ Total Recoveries
” shall mean all amounts and other consideration actually
received by APAC from its exercise of the rights granted in the
Patents hereby, including but not limited to the licensing and
enforcement of the Patents including all licensing proceeds and
recoveries from any lawsuits or settlements. Any non-monetary
consideration received by APAC in connection with the foregoing,
including but not limited to the licensing or enforcement of the
Patents, shall be valued at fair market value.
“ APAC Costs ”
shall mean all out of pocket costs and expenses incurred with and
actually paid to third parties in connection with prosecuting,
licensing, enforcing or defending the Patents, including without
limitation (A) outside attorneys’ and paralegal fees (whether
on an hourly or contingent basis and whether for general or local
counsel), costs and disbursements; (B) the fees and costs of
consultants, experts or technical advisors (other than principals
no employees of APAC or its affiliates); (C) travel and lodging
expenses; (D) duplicating, secretarial, stenographer, postage,
courier and similar expenses; (E) filing fees and other Patent
Office fees or costs; (F) court costs; (G) legal and other costs
related to any re-examination or reissue proceeding; (H) legal and
other costs incurred in defending any action or counterclaim in
respect of the Patents; and (I) legal and other costs in
prosecuting or processing any U.S. or foreign application,
including without limitation, any continuing application or
continuation in part application (collectively, the “APAC
Costs”).
2.2.
Total Recoveries shall be applied in
the following order of priority: first to APAC in an amount equal
to the APAC Costs, then to APAC and Licensor in proportion to their
respective shares of the Net Proceeds. All Taxes (as defined below)
shall be the financial responsibility of the Party obligated to pay
such Taxes as determined by the applicable law and neither Party is
or shall be liable at any time for any of the other Party’s
Taxes incurred in connection with or related to amounts paid under
this Agreement. The term “Taxes” shall mean any
foreign, federal, state, local, municipal or other governmental
taxes, duties, levies, fees, excises or tariffs, arising as a
result of or in connection with any amounts paid under this
Agreement, including without limitation: (i) any state or local
sales or use taxes; (ii) any import, value added or consumption
tax; (iii) any business transfer tax; (iv) any taxes imposed or
based on or with respect to or measured by any net or gross income
or receipts of either Party; (v) any franchise taxes, taxes on
doing business, gross receipts taxes or capital stock taxes; or
(vi) any other tax now or hereafter imposed by any governmental or
taxing authority on any aspect of this Agreement and the
obligations hereunder. If Taxes are required to be withheld on any
amounts otherwise to be paid by one Party to the other, the paying
Party shall deduct and set off such Taxes from the amount otherwise
due and owed to the receiving Party and pay them to the appropriate
taxing authority. Each Party agrees to indemnify, defend and hold
the other Party harmless from any Taxes or claims, causes of
action, costs, expenses, reasonable attorneys’ fees,
penalties, assessments and any other liabilities of any nature
whatsoever related to such Taxes to the extent such Taxes relate to
amounts paid under this Agreement.
2.3.
All amounts payable to Licensor
shall be due within thirty (30) days after the end of each calendar
quarter with respect to Net Proceeds, if any, in such quarter. APAC
will provide Licensor with a written report of Net Proceeds, Total
Recoveries and
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APAC Costs for each calendar quarter
hereunder whether or not Net Proceeds are due to Licensor. Such
written report shall detail the components and calculations of Net
Proceeds, Total Recoveries and APAC Costs. Licensor shall have the
right to audit such reports and APAC’s calculations of each
of Net Proceeds, Total Recoveries and/or APAC Costs in accordance
with Section 4.2 below. All other payments from one Party to the
other hereunder shall be due and payable within thirty (30) days
following receipt of the applicable invoice. All amounts paid to
Licensor shall be paid in U.S. funds. As applicable, any conversion
to Net Proceeds to U.S. funds shall be in accordance with the
exchange rate established by the Bank of America in San Francisco,
California on the last day of the calendar quarter for Net Proceeds
accrued in such calendar quarter.
2.4.
Licensor will be available from time
to time to consult with APAC or its attorneys on matters relating
to the Patents. In the event that the testimony of any employee,
director, officer, consultant or agent of Licensor is taken in any
action relating to the Patents, APAC’s attorneys will
represent such party without additional charge, and Licensor and
such party will cooperate with APAC and its attorneys reasonable
requests in preparing for such testimony. Licensor will grant
reasonable access to APAC and allow APAC to make copies, at its
expense, of all files in Licensor’s possession or control
relating to the Patents, including access to such documents as may
be necessary to conduct enforcement and licensing efforts. APAC
will pay for Licensor’s reasonable out of pocket expenses and
costs incurred at the request of APAC and any such expenses and
costs will be treated as APAC Costs.
2.5.
Licensor acknowledges and agrees
that APAC shall undertake and perform a due diligence investigation
of the Patents during the period of up to sixty (60) days following
the Effective Data (the “Investigation Period”). In
consideration of APAC’s due diligence investigation of the
Patents, Licensor agrees that, during the Investigation Period,
Licensor shall not discuss, negotiate or pursue with any third
parties any offers or proposals with respect to or otherwise
relating specifically to any of the Patents, unless Licensor has
informed APAC thereof and APAC provides written consent thereto.
Licensor agrees to cooperate with APAC and to promptly provide to
APAC, at its expense, any reasonably requested information
regarding the Patents, including prompt delivery for receipt by
APAC no later than seven (7) days following the Effective Date of a
copy of the complete prosecution history of each of the Patents
(each a “File History”) and copies of all files,
information and documents in Licensor’s possession or control
relating to the Patents. In the event that (1) any of the File
Histories or (2) any of the files, information and documents
relating to the Patents are not delivered to APAC within the seven
(7) day period following the Effective Date, the Investigation
Period shall be automatically extended by the greater of the number
of days for which (I) the last of the File Histories or (II) any
files, information and documents relating to the Patents is
delayed. Upon completion of the Investigation Period, APAC shall
provide written notice to Licensor of its conclusion regarding the
investigation of the Patents. The Investigation Period will
commence on the Effective Date and conclude on the earlier of: (a)
sixty (60) calendar days following, but not including, the
Effective Date, subject to the extensions set forth in this Section
2.5; or (b) such earlier time within the Investigation Period as
APAC transmits written notice to Licensor of its conclusion
regarding the investigation of the Patents. If APAC determines, in
its sole and
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absolute discretion, that the
Patents are satisfactory and transmits written notice to Licensor
that the Patents are satisfactory (the “Satisfactory
Completion”), then this Agreement shall continue with full
force and effect following such Satisfactory Completion of the
Investigation Period. Otherwise, if APAC determines, in its sole
and absolute discretion, that the Patents are not satisfactory,
then (i) neither Party shall have any payment obligations or
liability to the other Party hereunder, except for the
confidentiality obligation’s under Section 9.1; and (ii) this
Agreement shall automatically terminate upon completion of the
Investigation Period and APAC shall promptly return to Licensor the
File Histories and all other confidential information of Licensor
in APAC’s possession or control. Notwithstanding anything
herein to the contrary, APAC shall not exercise its license rights
in the Patents until after Satisfactory Completion.
3.
REPRESENTATIONS AND
WARRANTIES
3.1.
Licensor represents and warrants to
APAC that, to Licensor’s actual knowledge, as of the
Effective Date hereof:
3.1.1.
Licensor is the sole owner of the
Patents and has all right, title, claims, interest and privileges
arising from such ownership, free and clear of any liens, security
interests, encumbrances, rights or restrictions;
3.1.2.
Licensor has fully disclosed to the
U.S. Patent Office the identity of all inventors of the inventions
described in the Patents as required by U.S. law;
3.1.3.
the Patents and the inventions
described in the Patents are (A) not
