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EXHIBIT
10.1
EXCLUSIVE LICENSE
AGREEMENT
This Agreement, dated as of
September 24, 1986, is entered into by and between THE BOARD
OF REGENTS of THE UNIVERSITY OF TEXAS SYSTEM (hereinafter
“BOARD”), a governing board established under the laws
of the State of Texas, THE UNIVERSITY OF TEXAS SYSTEM CANCER CENTER
(hereinafter “UTSCC”), a component institution of The
University of Texas System (hereinafter “System”) and
THE MACROPHAGE COMPANY, INC. (hereinafter “LICENSEE”),
a Delaware corporation, whose address is 2201 Timberloch Place, The
Woodlands, Texas 77380.
WITNESSETH
:
WHEREAS, BOARD is the owner
of the BOARD Patent Rights and BOARD Technical Information, as
hereinafter defined, developed by UTSCC; and
WHEREAS, LICENSEE is desirous
of obtaining a world-wide, non-assignable (except as expressly
provided herein), royalty-bearing exclusive license, with the right
to grant sublicenses, under the BOARD Patent Rights and BOARD
Technical Information; and
WHEREAS, LICENSEE desires the
right to use the names Board of Regents, The University of Texas
System and The University of Texas System Cancer Center to the
extent necessary to enforce and protect LICENSEE’s rights
hereunder; and
WHEREAS, BOARD desires to
grant LICENSEE such a world-wide, exclusive license under the
following terms and conditions;
NOW, THEREFORE, in
consideration of the foregoing, and the covenants and promises
contained herein, the sufficiency of which are hereby acknowledged
by the parties, BOARD, UTSCC and LICENSEE hereby agree as
follows:
I.
DEFINITIONS
A. The term “BOARD
Patent Rights”, when used herein, shall mean those United
States and foreign patents and patent applications or prospective
patent applications, including any division, continuation,
continuation-in-part or reissue thereof, or substitute therefor,
and the letters patent that may be issued thereon, which relate to
the Licensed Subject Matter; together with all other Patents and
Patent Applications which claim any invention or discovery useful
in connection with the Licensed Subject Matter developed or
invented by Robert Kilbourn, M.D., Ph.D., Jim Klostergaard, Ph.D
and Gabriel Lopez-Berestein, M.D., in the case of the murine
macrophage described in the definition of Licensed Subject Matter
set out in Section I.E., and by Jim Klostergaard, Ph.D., Jim
Turpin, M.S., and Gabriel Lopez-Berestein, M.D., in the case of the
human monocyte described in the definition of Licensed
Subject Matter set out in Section I.E,
or any of them, during the life of any patents or patent
applications included within the BOARD Patent Rights, in which
BOARD now has or in the future acquires any interest. Without
limiting the generality of the preceding sentence, the term
“BOARD Patent Rights” shall include, but not be limited
to, the patents and patent applications listed on Schedule I which
is attached to this Agreement and incorporated herein by reference
for all purposes.
B. The term “BOARD
Technical Information”, when used herein, shall mean
(i) any technical information disclosed or claimed in
connection with any patent or patent application included within
the BOARD Patent Rights; and (ii) any invention, discovery,
know-how, process, procedure, method, protocol, formula, technique,
software, design, drawing, data, devices, specifications, sketches
or other technical information relating to the Licensed Subject
Matter.
C. The term “Licensed
Patented Product or Process”, when used herein, shall mean
any product, apparatus or process made, used, marketed or sold in
any country where such product, apparatus or process is covered by
the claims of an issued patent or a pending patent application
included within the BOARD Patent Rights, together with any product
made by the use of any process in a country in which such process
or apparatus is covered by the claims of an issued patent or a
pending patent application included within the BOARD Patent
Rights.
D. The term “Licensed
Non-Patented Product or Process”, when used herein, shall
mean any product, apparatus or process utilizing or relating to the
Licensed Subject Matter which is manufactured, used, marketed or
sold with the use of any BOARD Technical Information (but which are
not covered by BOARD Patent Rights), together with any product
utilizing the Licensed Subject Matter which is manufactured by a
process or apparatus which uses any BOARD Technical
Information.
E. The term “Licensed
Subject Matter” shall mean the process (as defined below) to
develop human monocyte or murine macrophage—derived
cytotoxins which either kill or inhibit the proliferation of tumor
cells as developed by the researchers/ inventors named in the
definition of BOARD Patent Rights set out in Section I.A., and all
compositions, products and uses resulting therefrom, together with
any change or modification to any such process, composition,
products or uses which is developed pursuant to the research and
development agreement contemplated by Article VI.A. hereof. The
term “process” shall mean and include the isolation,
purification, manufacturing, gene expression, synthesis, and
utilization of cytotoxins for therapeutic purposes.
F. The term “Net
Sales”, when used herein, shall mean the amount received or
collected by LICENSEE from commercial sales or other use or
disposition for value (including any marketing fees paid to
LICENSEE in connection with sales of Licensed Patented
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Products or Processes and Licensed
Non-Patented Products or Processes, but not including proceeds
received from the sale of marketing rights as described in Section
IV.A.3 hereof), of Licensed Patented Products or Processes and
Licensed Non-Patented Products or Processes in bona fide
arms-length transactions, f.o.b. place of manufacture or point of
storage, less (i) cash, trade and/or quantity discounts,
(ii) amounts repaid or credited by reason of rejections,
defects or returns or because of retroactive price reductions,
(iii) freight, transportation and insurance (iv) taxes
and (v) other charges which, under generally accepted
accounting principles, are deemed to be incidental to the
sale.
G. The term
“Subsidiary” shall mean a corporation, partnership,
association, trust or other legal entity which owns, controls, is
owned or controlled by, or is under common ownership or control of,
a party to this Agreement. For purposes of this definition,
“control” shall mean the ownership of such number of
outstanding shares or other interests aggregating more than 50% of
the ordinary voting power for the election of directors or the
exercise of control of such entity.
II.
GRANT OF
RIGHTS
A. BOARD hereby grants to
LICENSEE an exclusive, worldwide license, including the right to
grant sublicenses, under the BOARD Patent Rights and the BOARD
Technical Information to manufacture, use, market and sell any
Licensed Patented Product or Process and any Licensed Non-Patented
Product or Process throughout the United States of America, its
territories and possessions and in all foreign
countries.
B. BOARD and UTSCC hereby
grant to LICENSEE the right to use the name “Board of
Regents, The University of Texas System” and “The
University of Texas System Cancer Center” to the extent
necessary to enforce and protect LICENSEE’s rights hereunder;
provided however, that LICENSEE shall not be obligated to use the
name “Board of Regents, The University of Texas System”
or “The University of Texas System Cancer Center” in
any manner.
C. BOARD and UTSCC hereby
grant to LICENSEE the right of access to, during normal business
hours, and the use of, all experimental or other data which relate
in any manner to the BOARD Patent Rights or the BOARD Technical
Information, including without limitation, all data which BOARD has
provided to the United States Patent Office, the Food and Drug
Administration (FDA) or any other state, federal, foreign or local
regulatory authority which relate in any manner to the BOARD Patent
Rights or the BOARD Technical Information, and BOARD and UTSCC
agree that they will not use, or permit the use of, such
information and data, nor do anything else which will adversely
affect LICENSEE’s rights under this Agreement in any manner.
BOARD and UTSCC shall cooperate fully with LICENSEE, at
LICENSEE’s expense, in order to obtain the regulatory
approval of any state, federal,
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foreign or local authority which now is
or later becomes necessary to develop, manufacture, use, market or
sell any Licensed Patented Product or Process or Licensed
Non-Patented Product or Process. Such cooperation shall include,
but not be limited to, obtaining all necessary regulatory approvals
which are now required, or may in the future be required, to
manufacture, use, market or sell any Licensed Patented Product or
Process or Licensed Non-Patented Product or Process for use in any
application thereof. BOARD and UTSCC shall execute any and all
documents reasonably necessary to obtain such approvals upon
request by LICENSEE. LICENSEE shall reimburse BOARD and UTSCC for
any reasonable out-of-pocket costs, plus overhead not to exceed 50%
of out-of-pocket costs, including attorneys’ fees, incurred
by BOARD and UTSCC in connection with such cooperation. At such
time as clinical trials are commenced, LICENSEE agrees that it will
enter into an appropriate agreement with UTSCC regarding the
conduct of such trials.
D. UTSCC shall promptly
provide LICENSEE and shall continue to provide LICENSEE, during the
term of this Agreement, with all information relating to
(i) pharmacological, toxicological or clinical data,
(ii) synthetic, formulative, manufacturing or analytical data,
and (iii) such other chemical, physical or biological data
which UTSCC may now or in the future possess or control which
relates in any manner to the Licensed Subject Matter, except for
that information made confidential by law or prior
agreement.
E. The parties recognize that
LICENSEE may encounter patents held by third parties which dominate
activities covered by the BOARD Patent Rights and that
cross-licenses between the BOARD (or LICENSEE) and such third
parties may be necessary in order to enable LICENSEE to make or
market Licensed Patented Products or Processes or Licensed
Non-Patented Products or Processes. In that event, LICENSEE has the
right to enter into cross-licensing agreements with third parties
and to grant cross-licenses under any or all of the BOARD Patent
Rights, provided:
1. BOARD, through UTSCC, is
consulted beforehand and is reasonably satisfied that the third
party does in fact hold a patent that limits LICENSEE’s
competitiveness in making or marketing Licensed Patented Products
or Processes or Licensed Non-Patented Products or
Processes;
2. In BOARD’s
reasonable judgment, the rights received by LICENSEE under such
cross-licensing agreement cover only Licensed Patented Products or
Processes or Licensed Non-Patented Products or Processes and are
not directed to other products;
3. BOARD incurs no financial
or legal liabilities under the cross-licensing;
4. Any money or the value of
any equipment, including license issue fees (and not including
proceeds from sale of marketing rights as described in Section
IV.A.3.), received by LICENSEE in exchange for such cross-licensing
is treated as Net Sales for Licensed Patented Products or Processes
or Licensed Non-Patented Products or Processes.
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III.
ISSUANCE OF COMMON
STOCK AND PREFERRED STOCK
A. In consideration of the
right to use the names set forth in Section II.B. above in
connection with the grant by BOARD to LICENSEE of this license,
LICENSEE agrees that, upon execution of this Agreement by BOARD, it
shall issue BOARD 400,000 shares of its Common Stock, $.001 par
value, which shares of Common Stock shall be subject to
cancellation in accordance with the terms of Sections III.B. and
III.C. below. In addition, LICENSEE agrees to reserve a seat on its
Board of Directors for a designee selected by BOARD, until the
closing of the first public offering of equity securities by
LICENSEE. In accordance with LICENSEE’S customary practice
with respect to offerings of any securities of the LICENSEE, BOARD
hereby makes the representations, warranties and covenants to
LICENSEE contained in Exhibit A hereto, which Exhibit A is
incorporated herein for all intents and purposes.
B. In addition, LICENSEE
hereby grants BOARD an option, exercisable in its sole discretion,
to elect to purchase a total of 600,000 shares of the Series A
Preferred Stock (the “Shares”) of LICENSEE, at a
purchase price of $.50 per share, on the same general terms and
conditions as are applicable to the initial purchasers of such
Series A Preferred Stock, such purchase option to be subject to and
conditioned upon the following:
1. The BOARD shall have the
option to purchase all of the Shares, or a lesser amount in
accordance with the schedule attached hereto as Exhibit B and
incorporated herein for all purposes, by providing written notice
to LICENSEE to such effect no later than May 1, 1987, which
notice shall specify the number of Shares which BOARD desires to
purchase and the date of purchase, which date shall not be later
than May 30, 1987. Effective at 12:01 a.m., May 2, 1987,
the option hereinabove provided shall expire for any and all Shares
as to which the LICENSEE has not received such written notice, and
BOARD shall have no further right to purchase any such Shares,
unless otherwise extended by agreement of the parties.
2. In the event that BOARD
does properly elect to exercise its right to purchase any of the
Shares, and completes the purchase of such Shares as required, a
proportionate amount of the Common Stock issued to Board in
connection with the execution of this License Agreement shall,
concurrent with the closing of such purchase of the Shares,
thereupon be returned to LICENSEE by BOARD, in accordance with the
schedule attached as Exhibit B hereto, whereupon such shares of
Common Stock shall be cancelled and BOARD shall no longer have any
right, title or interest therein.
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3. Effective upon the
purchase by BOARD of any or all of the Shares, the royalty
obligations of LICENSEE provided for in Section IV.A.1. and IV.A.2.
shall increase to the applicable percentage amount as provided in
the Schedule attached hereto as Exhibit B.
C. As an alternative to the
election by BOARD to purchase the Shares, BOARD may elect to make a
contribution to LICENSEE, in an aggregate amount not exceeding
$300,000, said sum to be applied to research and development
activities in accordance with the R & D Agreement (as defined
hereinafter). In exchange for such contributions, LICENSEE shall
issue BOARD up to 600,000 shares of Series A Preferred Stock of
LICENSEE, such election option to be exercised in accordance with
and subject to the following conditions:
1. BOARD shall have the right
to contribute funds, in accordance with the schedule set out on
Exhibit B hereto, for research and development activities of
LICENSEE, by providing written notice to LICENSEE no later than
May 1, 1987, which notice shall specify the amount of funds
which BOARD desires to contribute and the date of such
contribution, which date shall not be later than May 30, 1987.
Effective at 12:01 a.m. on May 2, 1987, BOARD’S option
to acquire Series A Preferred Stock shall expire for the
corresponding amount of shares for which LICENSEE has not received
written notice of BOARD’S election to fund, and BOARD shall
have no further right to acquire such shares of Series A Preferred
Stock, unless otherwise extended by agreement of the
parties.
2. In the event that BOARD
does properly elect to contribute funds to the LICENSEE’s
research and development activities, and makes the contribution as
required, a proportionate amount of Common Stock issued in
connection with the execution of this License Agreement shall,
concurrent with such funding, be returned to LICENSEE by BOARD in
accordance with the schedule set out on Exhibit B hereto, whereupon
such shares of Common Stock shall be cancelled and BOARD shall no
longer have any right, title or interest therein.
3. Effective upon the
contribution by BOARD of some or all of the funds for research and
development, as provided herein, the royalty obligations of
LICENSEE provided for in Sections IV.A.1. and 2. would increase to
the applicable percentage amount as provided in the schedule
attached hereto as Exhibit B.
D. The option to purchase
Series A Preferred Stock under Section III.B. and to acquire shares
of Series A Preferred Stock under Section III.C. are mutually
exclusive and can not be jointly exercised in any form or
fashion.
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E. In consideration of the
granting of the mutually exclusive options by LICENSEE to BOARD as
set forth in Sections III.B. and III.C., BOARD hereby consents to
the issuance of, and, upon issuance of the Common Stock to it as
provided in Section III.A. above, agrees to vote such shares, if
required, in order to authorize and issue, the following securities
to the initial round of venture capital firms:
1. 8% Convertible Notes (the
“Notes”), in the amount of $300,000, such Notes to
accrue interest at the rate of 8% per year until the Notes are
converted to Series A Preferred Stock or redeemed by LICENSEE,
whichever first occurs, interest to be payable at the closing of
the second round of venture capital financing. Such Notes may, at
LICENSEE’S option, be redeemed by LICENSEE at any time prior
to May 30, 1987, in the principal amount of all outstanding
Notes, or a portion thereof, plus accrued interest. In the event
such Notes are not redeemed in whole by LICENSEE, the Notes shall
automatically be converted into shares of Series A Preferred Stock,
equal to twice the unredeemed amount of Notes then outstanding, not
exceeding 600,000 shares (see Exhibit C attached hereto.) Such
Notes shall contain such other terms and conditions as are
customary for such transactions.
2. Warrants to Purchase
Common Stock, at a purchase price of $.10 share, in a total amount
of 150,000 shares of Common Stock of LICENSEE, to be issued to the
holders of the LICENSEE’S 8% Convertible Notes, pro rata,
which warrants shall only be exercisable in an amount equal to
one-half of the principal amount of 8% Convertible Notes of the
LICENSEE which are redeemed by LICENSEE (see Exhibit C attached
hereto).
F. BOARD acknowledges that
The Woodlands Venture Capital Company has been issued 10,000 shares
of Common Stock of LICENSEE in consideration of the payment of
$10.00 by it and of the efforts of its employees in establishing
LICENSEE, managing it, and negotiating this Agreement. BOARD
further acknowledges that LICENSEE has, prior to the effective date
hereof, issued 300,000 shares of Class A Common Stock to each
of Gabriel Lopez-Berestein, M.D., and Jim Klostergaard, Ph.D., in
exchange for payment by them of $300.00 each, and their services in
inventing the Licensed Subject Matter.
IV.
ROYALTIES
A. In consideration of the
grant by BOARD to LICENSEE of this license, LICENSEE shall pay to
BOARD as follows:
1. An earned royalty of three
percent (3%) of the Net Sales of a Licensed Patented Product
or Process by LICENSEE or its Subsidiaries in each country where a
patent included within the BOARD Patent Rights issues, or a patent
application has been filed and is pending, with claims covering
such Licensed Patented Product or Process, until the expiration,
termination or invalidation of the patent in that country by a
Court of final jurisdiction or the determination that a patent will
not issue in that country.
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2. An earned royalty of two
percent (2%) of the Net Sales of a Licensed Non-Patented
Product or Process by LICENSEE or its Subsidiaries during the term
of this Agreement.
3. An earned royalty of forty
percent (40%) of the royalty received by the LICENSEE from Net
Sales of a Licensed Patented Product or Process and Licensed
Non-Patented Product or Process by sublicensees of LICENSEE or its
Subsidiaries, such royalty to be measured upon and based on the
actual proceeds received by LICENSEE or its Subsidiaries under the
Sublicense Agreement and not the total net sales generated by the
marketing or distribution of the Licensed Patented Products or
Processes and the Licensed Non-Patented Products or Processes by
the sublicensee. Such earned royalty shall be due for as long as
LICENSEE or its Subsidiary is receiving proceeds from the
sublicensee, but not in excess of the duration of this
Agreement.
In addition, in the event
LICENSEE transfers or sells any of the marketing rights to any
Licensed Patented Product or Process or Licensed Non-Patented
Product or Process to a non-related corporation, firm, association,
partnership, or other entity, the proceeds from such sale of
marketing rights is hereby expressly excluded from the terms of
this Article IV, and no royalty payments shall be due thereon,
provided, however, that the sales of any Licensed Patented Products
or Processes or Licensed Non-Patented Products or Processes by said
entity, association, firm, partnership or corporation shall be
subject to the royalty provided in this Section IV.A.3; and
provided further, that the total royalty under Sections IV.A.I,
IV.A.2., and IV.A.3. shall not in any event exceed that amount
which would otherwise be due and payable under Section IV.A.I. or
IV.A.2., as the case may be, had such royalties been paid on the
ultimate sale on such Licensed Patented Product or Process or
Licensed Non-Patented Product or Process in the
marketplace.
4. In no event will LICENSEE
be obligated to pay royalties under Sections IV.A.1., IV.A.2. and
IV.A.3. simultaneously for Net Sales of any particular product or
process in any given country (except as may arise in connection
with sales to a marketing entity and resales by said entity, in
accordance with Section IV.A.3. above). A single royalty will be
due on each sale of Licensed Patented Products or Processes no
matter how many items in the BOARD Patent Rights cover such
Licensed Patented Products or Processes. No royalty shall be paid
on a Licensed Patented Product or Process after the BOARD Patent
Rights covering said Licensed Patented Product or Process have
expired.
5. Earned royalties in the
amount set out in Section IV. A. 2. shall accrue in each country
only for the period that the LICENSEE is the exclusive commercial
source in that country of a Licensed Non-Patented Product or
Process. The term “exclusive commercial source” as used
above shall mean that the LICENSEE is the sole commercial source of
the Licensed
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Non-Patented Product or
Process in that country and that there is no commercial product
available in that country that is substantially equivalent in
market acceptance. If the LICENSEE believes that it is not the
exclusive commercial source of a Licensed Non-Patented Product or
Process in any designated country, then it shall so notify BOARD
and provide reasonable evidence thereto. Within 45 days of receipt
of said notice and evidence, BOARD shall notify the LICENSEE in
writing of its acceptance or rejection of the evidence as to the
existence of another commercial source. Upon acceptance by BOARD,
the LICENSEE shall, as of said date of acceptance, no longer have
any obligation to pay royalties on Net Sales in “that country
based on the amount set out in Section IV.A.2. herein. In such
event, the amount set out in Section IV.A.2. shall be reduced to an
amount equal to one-third (1/3) of the applicable amount, and
LICENSEE shall pay such reduced royalty amount.
6. BOARD agrees that in order
to successfully market products and processes covered by this
Agreement, LICENSEE must have complete freedom in marketing. Thus,
BOARD understands that LICENSEE makes no warranty that it will
market the products or processes covered by this Agreement or, if
LICENSEE does market any of such products or processes, that they
will be the exclusive means by which LICENSEE will participate in
this field. All business decisions relating to use, manufacture,
sale or marketing of products covered under this Agreement will be
within the sole discretion of LICENSEE.
7. In the event that LICENSEE
enters into a joint venture with another entity and utilizes BOARD
Technical Information in combination with the technology of such
entity, then Net Sales for purposes of calculating royalties shall
be deemed to be LICENSEE’s income received from such joint
venture. Subject to the foregoing sentence, where a Licensed
Patented Product or Process or a Licensed Non-Patented Product or
Process is not sold separately but is sold in combination with or
as part of other products, the Net Sales of the Licensed Patented
Product or Process or the Licensed Non-Patented Product or Process
so sold shall be calculated, for the purpose of computing royalties
due, by applying to the total selling price of the combination or
composite product a fractional multiplier having as its denominator
the total selling price of the combined or composite product
(determined by generally accepted accounting principles) and as its
numerator the selling price of the included Licensed Patented
Product or Process or Licensed Non-Patented Product or Process
(similarly determined).
B. Notwithstanding anything
contained in Section IV.A. to the contrary, if, by May 1,
1987, BOARD elects to exercise its rights under Section III.B. or
III.C. hereof, to acquire Series A Preferred Stock and does in fact
purchase or acquire any such shares of Series A Preferred Stock,
the royalties provided in Section IV.A.1. and IV.A.2. will increase
in accordance with the terms set forth in Sections III.B. or
III.C., as the case may be, immediately upon the closing of the
applicable investment. In such event, the BOARD shall return the
certificate(s) for Common Stock issued under Article III.A. hereof
to the LICENSEE, and such certificate(s) shall be thereupon
cancelled and of no further effect. In the event BOARD has elected
to acquire some but not all of the Series A Preferred
Sto
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