Exhibit 10.17(a)
[********] Certain confidential information
contained in this document, marked by brackets, has been omitted
and filed separately with the Securities and Exchange Commission
pursuant to Rule 406 of the Securities Act of 1933, as
amended.
RJR Contract No. 97-773-069
VCU-L9706
LICENSE AGREEMENT
THIS AGREEMENT is made and entered into this 6th
day of October 1997, by and between
RJ Reynolds Tobacco Company
(hereinafter referred to as the “LICENSEE”), with its
principal place of business at 401 N. Main Street, Winston-Salem,
North Carolina, 27102-1487 and place of operation at Bowman Gray
Technical Center, 950 Reynolds Boulevard, Winston-Salem North
Carolina, 27102-1487; and,
VIRGINIA COMMONWEALTH UNIVERSITY
INTELLECTUAL PROPERTY FOUNDATION (hereinafter referred to as the
“LICENSOR”), and with its principal place of operation
at Virginia Commonwealth University, 1101 E. Marshall Street,
Sanger Hall, Room 1-026, Richmond, Virginia 23298-0568.
WHEREAS, LICENSOR is the owner of
all right, title, and interest in a U.S. Patent Application
entitled “Compounds and Pharmaceutical Compositions Thereof
for Eliciting Analgesic Effects” invented by Drs. Martin and
Damage at Virginia Commonwealth University (VC Invention #97-12);
and,
WHEREAS LICENSEE is desirous of
acquiring from LICENSOR certain rights set forth below, and wishes
to engage Virginia Commonwealth University in a related Sponsored
Research Agreement as defined below,
NOW, THEREFORE, in consideration of
the promises and the covenants set forth herein, LICENSOR and
LICENSEE agree as follows:
I. DEFINITIONS
The following definitions shall apply in the
interpretation of this Agreement.
1.1 “AFFILIATE” of any company means
any corporation which, directly or indirectly, controls or is
controlled by, or is under direct or indirect common control with,
such company; and for the purposes of this definition
“control” (including “control by” and
“under common control with”) as used with respect to
any corporation or company, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such corporation or company, through the
ownership of more than 50% of the voting shares.
1.2 “CALENDAR QUARTER” means the
three-month period ending March 31, June 30, September 30, or
December 31 in any year.
1.3 “TECHNOLOGY” shall mean all the
intellectual property in the FIELD OF USE including the patent
application named above as well as continuations,
continuations-in-part, divisional, reexaminations, reissues and
extensions thereof both foreign and domestic, owned or to be owned
by LICENSOR. It does not include ADDITIONAL TECHNOLOGY, discoveries
and inventions or other developments made during and under the
currently negotiated Sponsored Research Agreement between Virginia
Commonwealth University and LICENSEE) or improvements to
intellectual property developed during and under the Sponsored
Research Agreement. Such discoveries made during and under the
Sponsored Research Agreement will be subject of future
negotiation.
1.4 “LICENSED TECHNOLOGY” shall mean
the patent application cited above and all patent applications
filed from and patents issuing from said patent application in the
field which are owned or controlled by LICENSOR.
1.5 “LICENSED PRODUCTS” shall mean
any product in the FIELD OF USE that incorporates, is covered by or
is made, in whole or part, by the use of the LICENSED
TECHNOLOGY.
1.6 “ADDITIONAL TECHNOLOGY” shall
mean inventions, discoveries, information, and know-how in the
FIELD OF USE which may be developed under the Sponsored Research
Agreement.
1.7 “FIELD OF USE” shall mean
analgesia and applications related to pain control. VCU-IPF
reserves the right to make, use, or sell the LICENSED TECHNOLOGY
and LICENSED PRODUCTS in the area of smoking cessation
management.
1.8 “EFFECTIVE DATE” shall mean the
date of the Agreement set forth above.
1.9 “LICENSED TERRITORY” shall mean
worldwide.
1.91 “NET SALES” for purposes of
computing the royalty payment contemplated under the provisions
below, means [********] .
1.92. “EFFECTIVE DATE shall mean the date
of the agreement set forth above.
II. GRANT
2.1 LICENSOR grants to LICENSEE a royalty
bearing, worldwide, exclusive license under LICENSED TECHNOLOGY to
make, have made, use, or sell LICENSED TECHNOLOGY and LICENSED
PRODUCT in the FIELD OF USE defined above. This grant shall be
subject to the payment by LICENSEE to LICENSOR of all consideration
as provided in this Agreement, and shall be further subject to the
rights retained by LICENSOR and Virginia Commonwealth University
to:
a. publish the scientific findings,
subject to agreed upon provisions, from research related to
LICENSED TECHNOLOGY; and,
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b. use any information contained in
the LICENSED TECHNOLOGY for research, teaching, and similar
noncommercial activities and other education-related
purposes.
c. use the LICENSED TECHNOLOGY and
LICENSED PRODUCTS for commercial purposes, including licensing, in
the area of smoking cessation management.
2.2 LICENSEE shall have the right to grant
sublicenses subject to the terms and conditions of this agreement.
LICENSEE will attach and incorporate by reference the provisions of
this Agreement pertaining to payment obligations, patent
applications, warranties, reporting requirements, and
confidentiality, to any sub-license agreements entered into by
LICENSEE. LICENSEE will provide LICENSOR with copies either (I) of
appropriate sections of sub-license agreements evidencing a third
party or AFFILIATE sublicensee’s commitment to be bound by
the terms and conditions of this Agreement and with sections
pertaining to NET SALES within one month of their being executed by
the LICENSEE with the third party or AFFILIATE sublicensee, or (ii)
other evidence of such commitment, which evidence is mutually
acceptable to LICENSOR and LICENSEE.
2.3 LICENSOR hereby grants to LICENSEE an
exclusive Option to acquire a license to any and all parts of the
ADDITIONAL TECHNOLOGY that may arise from execution of the
Sponsored Research Agreement. The Option period on any part of the
ADDITIONAL TECHNOLOGY will be for six (6) months from the date it
is disclosed to LICENSEE. The Option will be deemed exercised by
the LICENSEE when LICENSEE notifies the LICENSOR in writing that it
wishes to exercise its Option and enter into good faith negotiation
for a license on a particular portion of the ADDITIONAL TECHNOLOGY.
The LICENSEE shall retain no rights in, or options on ADDITIONAL
TECHNOLOGY OF LICENSOR developed under the Sponsored Research
Agreement if LICENSEE fails to exercise its Option.
2.4 If LICENSEE exercises its Option under
Section 2.3 of this Agreement, LICENSOR to the extent not
prohibited by law or other patents, and subject to any rights of
the U.S. Government under 37 C.F.R 401, will enter into good faith
negotiation to grant LICENSEE an exclusive license to make, have
made, use, lease, sell, import and export technology developed
under the Sponsored Research Agreement.
2.5 This Agreement shall terminate on the date
of the last patent to expire on the LICENSED TECHNOLOGY.
2.6 Nothing in this Agreement shall be construed
to confer rights upon LICENSEE by implication, estoppel, or
otherwise to any technology or intellectual property other than the
LICENSED TECHNOLOGY.
III. PAYMENT PROVISIONS
3.1 LICENSEE agrees to pay LICENSOR
[********] within 30 days of the execution of this
Agreement.
3.2 LICENSEE shall pay to LICENSOR all
documented costs for the patent filing for LICENSED TECHNOLOGY
within 30 days of the execution of this agreement.
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3.3 To maintain an exclusive license to the
LICENSED TECHNOLOGY, LICENSEE agrees to make an annual minimum
payment of [********] due each year on the anniversary of
the effective date of this Agreement. [********]
3.4 Licensee agrees to make the following
milestone payments to LICENSOR:
a. [********]
c. [********]
d. [********]
3.5 LICENSEE shall pay to LICENSOR a running
royalty of [********] based upon annual NET SALES for
LICENSED PRODUCTS, or [********] of that amount received by
LICENSEE from a third party, which ever is less.
3.6. Royalty payments shall be based on NET
SALES in any country where a valid patent covering LICENSED
TECHNOLOGY or LICENSED PRODUCT is in effect, or based on NET SALES
of export product in any country where a valid patent covering
LICENSED TECHNOLOGY is in effect and product is made for
export.
IV. Diligence and Patent Prosecution
4.1 LICENSEE shall use reasonable efforts to
bring one or more LICENSED PRODUCTS to market through diligent
efforts and to continue active, commercially reasonable research
and development, and sub-licensing efforts for one or more LICENSED
PRODUCTS.
4.2 LICENSOR, shall apply for, seek issuance or
registration of, and maintain patents and copyrights during the
term of this Agreement on the LICENSED TECHNOLOGY for subject
matter protect able by patent or copyright using counsel which is
mutually acceptable to both LICENSEE and LICENSOR. The management
of the various tasks and procedures involved shall be the primary
responsibility of LICENSOR. LICENSEE, at the request of LICENSOR,
shall assist LICENSOR in all such tasks and procedures.
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4.3 All patents, patent applications, and
copyrights on the LICENSED TECHNOLOGY shall be, assigned to
LICENSOR, and LICENSOR’s interest therein shall be recorded
in the U.S. Patent and Trademark Office, U.S. Copyright Office, and
corresponding foreign patent and copyright offices at the expense
of LICENSOR.
4.4 LICENSOR shall provide LICENSEE with copies
of all papers received from and to be filed in the U.S. Patent and
Trademark Office, U.S. Copyright Office, and corresponding foreign
patent and copyright offices.
4.5 LICENSOR shall be entitled, in its
discretion, to abandon any application or granted patent or
copyright if it considers that the ongoing costs of the same are
not justified, provided that LICENSOR notifies LICENSEE prior to
such abandonment and allows LICENSEE reasonable opportunity to
avoid such abandonment. In no event shall such reasonable
opportunity be less than one (l) month prior to abandonment. If
LICENSOR chooses to abandon an application or granted patent or
copyright under this provision and LICENSEE, at its sole expense,
continues pursuing the application, granted patent or copyright,
LICENSOR shall retain no right to exclusively use or exclusively
exploit the technology claimed in a granted patent or copyright on
the technology which LICENSEE later obtains in the country,
territory or jurisdiction which granted the patent or copyright;
however LICENSOR shall maintain a non-exclusive right, limited to
those rights enumerated in Section 2.1a, b and c.
4.6 LICENSEE may designate foreign countries in
which it desires to have filed corresponding patent applications
for LICENSED TECHNOLOGY, and LICENSEE shall be responsible for all
costs associated with filing, prosecuting and maintaining those
patent applications in the designated foreign countries. If
LICENSEE does not so designate such foreign countries, then
LICENSOR, at its own expense may file, prosecute and maintain
patent applications corresponding to LICENSED
TECHNOLOGY.
4.7 Subject to the provision of Section 4.6
LICENSEE shall pay to LICENSOR all documented costs associated with
patent prosecution and maintenance of the LICENSED TECHNOLOGY,
within 30 days of receipt of an invoice from LICENSOR. In the event
that the costs of patent prosecution and maintenance exceed
[********] during any calendar year, or in the event of a
declaration of interference or appeal beyond final rejection,
LICENSOR and LICENSEE shall negotiate in good faith toward arriving
at a mutually acceptable manner in which the costs associated with
patent prosecution and maintenance shall be borne. In any event,
the first [********] paid to LICENSOR by LICENSEE in any
calendar year, except for those costs paid in connection with
Section 3.2, shall be creditable against the annual minimum payment
due in accordance with Section 3.3 in that calendar
year.
V. Reporting Obligations
5.1 LICENSEE, within sixty (60) days after each
calendar quarter of each year, shall deliver to LICENSOR true and
accurate reports, pertaining to NET SALES of LICENSED PRODUCT which
shall include at least the following information:
a) the identity of each LICENSED
PRODUCT being
