LICENSE AGREEMENT

 

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                                                                   Exhibit 10.19

 

                                LICENSE AGREEMENT

 

            This License Agreement (the "AGREEMENT") is entered into and made

effective the 31 day of January, 2005 (the "EFFECTIVE DATE") between UNIVERSITY

OF MIAMI and its School of Medicine, whose principal place of business is at

1600 N.W. 10th Avenue, Miami, Florida 33136 (hereinafter referred to as

"LICENSOR") and Somaxon Pharmaceuticals, Inc., whose principal place of business

is at 12750 High Bluff Drive, Suite 310, San Diego, California 92130

(hereinafter referred to as "LICENSEE").

 

                                   WITNESSETH

 

            WHEREAS, LICENSOR owns United States Patent Number 5,852,032

entitled "Method of Treating Nicotine Dependence"; and

 

            WHEREAS, LICENSOR warrants that it possesses the right to license

the subject patent and the right to market the Patent Rights; and,

 

            WHEREAS, LICENSEE desires to acquire an exclusive license in the

License Territory (as defined in Section 1.7 below) for the following use: human

treatment of nicotine dependence, with the right to sublicense, under the Patent

Rights (as defined in Section 1.12 below) and Know-How (as defined in Section

1.6 below) for the purposes of making, having made, using, selling, having sold,

offering for sale, importing or otherwise commercializing products and

practicing the invention disclosed and claimed in the Patent Rights;

 

            NOW THEREFORE, for these and other valuable considerations, the

receipt of which is hereby acknowledged, the parties agree as follows:

 

            1. DEFINITIONS:

 

            1.1 "AFFILIATE" shall mean any corporation or other business entity

controlled by, controlling or under common control with LICENSOR or LICENSEE.

For this purpose, "control" shall mean direct or indirect beneficial ownership

of at least a fifty percent (50%) of the voting stock of, or at least a fifty

percent (50%) interest in the income of such corporation or other business

entity, or such other relationship as in fact, constitutes actual control.

 

 

 

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.

 

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            1.2 "FIELD OF USE" shall mean human treatment of nicotine

dependence, nicotine addiction and/or tobacco smoking.

 

            1.3 "FORCE MAJEURE EVENT" shall mean events beyond the reasonable

control of either party, including, but not limited to, war, terrorism, riot,

strikes, boycotts, seizure, allocation, requisition, or any further official

action by any department, bureau, board, administration, or other

instrumentality or agency.

 

            1.4 "GENERIC ENTRY DATE" shall mean the date of first regulatory or

marketing approval in the Net Sales Territory of a generic equivalent to any

Product, including, but not limited to, a product covered by an Abbreviated New

Drug Application (ANDA) which references the initial New Drug Application (NDA)

filed by LICENSEE or a sublicensee for such Product.

 

            1.5 "GOVERNMENT" shall mean the United States federal government.

 

            1.6 "KNOW-HOW" shall mean trade secrets, inventions, data,

processes, procedures, devices, methods, formulas, protocols, information and

other know-how, whether or not patentable, which is owned or controlled by

LICENSOR during the License Term and is necessary or useful for the commercial

exploitation of the Patent Rights.

 

            1.7 "LICENSE TERRITORY" shall mean worldwide.

 

            1.8 "METHOD" shall mean any method or process which is covered in

whole or in part by an issued or unexpired claim contained in the Patent Rights

or otherwise incorporating the Know-How.

 

            1.9 "NET SALES" shall mean the sum of all amounts invoiced on

account of sale or use of Products by LICENSEE and its Affiliates and any

Sublicensees to non-affiliated third party purchasers or users of Products, less

(a) [***], (b) [***], (c) [***], (d) [***] (e) [***].

 

            1.10 "NET SALES TERRITORY" shall mean the United States of America.

 

            1.11 "PATENT EXPIRATION DATE" shall mean the last to expire of the

Patent Rights.

 

             1.12 "PATENT RIGHTS" shall mean United States Patent Number

5,852,032 of Mason issued December 22, 1998 entitled "Method of Treating

Nicotine Dependence" and all divisions, renewals, continuations,

continuations-in-part, reissues, extensions and substitutions thereof and, to

the extent applicable, all foreign counterparts.

 

 

 

*** 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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            1.13 "PRODUCT" shall mean any product or part thereof:

 

            (a)    the manufacture, use or sale or other commercialization of

                  which is covered in whole or in part by an issued or unexpired

                  claim contained in the Patent Rights or otherwise

                  incorporating the Know-How; or

 

            (b)    which is administered by using a Method.

 

            1.14 "SUBLICENSEE" shall mean any third party to whom LICENSEE has

granted a sublicense of LICENSEE's rights hereunder, provided said third party

has agreed in writing with LICENSEE to accept the conditions and restrictions

agreed to by LICENSEE in this Agreement.

 

            2. GRANT:

 

            2.1 In consideration for payment of royalties, LICENSOR hereby

grants to LICENSEE an exclusive (even as to LICENSOR except as specified in

Secantion 2.2 below) license, subject to any rights of the Government, in the

License Territory, for the Field of Use, with the right to sublicense, under the

Patent Rights and Know-How, to make, have made, use, sell, have sold, offer for

sale, import or otherwise commercialize the Product and to practice the Method.

 

            2.2 LICENSOR retains the right to practice such invention for its

own internal non-commercial, educational and research use.

 

            3. TERM:

 

      The license granted in this Agreement shall be Exclusive in the Field of

Use until the later of (i) the Patent Expiration Date or (ii) the date described

in Section 8.1(c)(ii) (the "LICENSE TERM"), unless terminated earlier as

provided herein, and commencing as of the Effective Date of this Agreement.

 

            4. UNITED STATES LAWS:

 

            4.1 LICENSEE understands that the Patent Rights may have been

developed under a funding agreement with the Government and, if so, that the

Government may have certain rights relative thereto. This Agreement is

explicitly made subject to the Government's rights under any

 

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agreement and any applicable law or regulation. If there is a conflict between

this Agreement and an agreement between LICENSOR and the Government, applicable

law or regulation, the terms of the agreement between LICENSOR and the

Government, applicable law or regulation, respectively, shall prevail.

Specifically, this Agreement is subject to all of the terms and conditions of

Title 35 United States Code sections 200 through 204, including an obligation

that Product sold or produced in the United States be "manufactured

substantially in the United States," and LICENSEE agrees to take all reasonable

action necessary on its part as licensee to enable LICENSOR to satisfy its

obligation thereunder, relating to the Patent Rights.

 

            4.2 It is understood that LICENSOR is subject to United States laws

and regulations controlling the export of technical data, computer software,

laboratory prototypes and other commodities (including the Arms Export Control

Act, as amended and the Export Administration Act of 1979), and that its

obligations hereunder are contingent on compliance by LICENSEE with applicable

United States export laws and regulations. The transfer of certain technical

data and commodities may require a license from the cognizant agency of the

United States Government and/or written assurances by LICENSEE that LICENSEE

shall not export data or commodities to certain foreign countries without prior

approval of such agency. LICENSOR neither represents that a license from an

agency of the Government shall not be required nor that, if required, it shall

be issued.

 

            5. PATENT PROTECTION AND INFRINGEMENT:

 

            5.1 LICENSOR, during the License Term, is responsible for the

maintenance of all Patent Rights. LICENSEE shall reimburse LICENSOR for all

payments made by LICENSOR in respect of the Patent Rights within thirty (30)

days of LICENSEE's receipt of the applicable invoice.

 

            5.2 LICENSEE shall promptly notify LICENSOR in writing of any claim

of Patent Rights infringement which, to LICENSEE's knowledge, is asserted

against LICENSEE or LICENSOR, its Affiliates and any sublicensees because of the

manufacture, use, promotion and sale of Products.

 

            5.3 Upon learning of any infringement of Patent Rights by third

parties in any country, LICENSEE and LICENSOR will promptly inform each other,

as the case may be, in writing

 

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of that fact and will supply the other with any available evidence pertaining to

the infringement. LICENSEE, at its own expense, shall have the option to take

whatever steps are necessary to stop the infringement at its expense and recover

damages therefore, and will be entitled to retain all damages so recovered. In

the event that LICENSOR and LICENSEE mutually agree to bring suit, costs and

expenses shall be shared equally and any recovery in excess of expenses shall be

shared equally. Each of the parties shall assist and cooperate with the other

party in connection with any such suit or other action relating to infringement.

In any event, no settlement, consent, judgment or other voluntary final

disposition of the suit may be entered into without the consent of LICENSOR,

which shall not be unreasonably withheld. In the event LICENSEE does not take

steps to stop the infringement within ninety days after notice from LICENSOR

specifically requesting such action and referring to this Section 5.3, LICENSOR

shall have the right to terminate the License Agreement. In connection with any

such termination, all Patent Rights and Know-How will revert to LICENSOR.

 

            6. INDEMNIFICATION:

 

            6.1 LICENSEE agrees to release, indemnify, defend and hold harmless

the LICENSOR and its Trustees, officers, faculty, employees and students against

any and all losses, expenses, claims, actions, lawsuits and judgments thereon

(including attorney's fees through the appellate levels) ("DAMAGES") which may

be brought against LICENSOR, its Trustees, officers, faculty, employees or

students as a result of or arising out of (a) any negligent act or omission of

LICENSEE or its agents or employees, (b) the use, production, manufacture, sale,

lease, consumption or advertisement by LICENSEE, its Affiliates or their

sublicensees or any third party with whom LICENSEE has or enters into an

agreement of any Patent Rights, Methods, Know-How, Product, invention or

technology licensed under this Agreement, (c) the use of LICENSEE's own

trademarks and tradenames relating to the Products, or (d) any and all third

party claims of Patent Rights infringement which may be asserted against

LICENSOR, and Affiliates because of the manufacture, use, promotion and sale of

Products; provided, however, that such indemnification right shall not apply to

any judgments and Damages to the extent directly attributable to the negligence,

reckless misconduct, or intentional misconduct of a party seeking

indemnification under this Section 6.1.

 

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            6.2 LICENSOR agrees to release, indemnify, defend and hold harmless

the LICENSEE and its officers, employees and Affiliates against any and all

Damages which may be brought against LICENSEE or its officers, employees or

Affiliates as a result of or arising out of any negligent act or omission of

LICENSOR or its Trustees, officers, faculty, agents, employees or other

Affiliates, provided, however, that such indemnification right shall not apply

to any judgments and Damages to the extent directly attributable to the

negligence, reckless misconduct, or intentional misconduct of a party seeking

indemnification under this Section 6.2.

 

            6.3 Promptly after receipt by a party seeking indemnification under

this Section 6 (an "INDEMNITEE") of notice of any pending or threatened claim

against it (an "ACTION"), such Indemnitee shall give written notice to the party

to whom the Indemnitee is entitled to look for indemnification pursuant to this

Section 6 (the "INDEMNIFYING PARTY") of the commencement thereof, provided that

the failure so to notify the Indemnifying Party shall not relieve it of any

liability that it may have to any Indemnitee hereunder. In case any Action that

is subject to indemnification under this Section 6 shall be brought against an

Indemnitee and it shall give written notice to the Indemnifying Party of the

commencement thereof, the Indemnifying Party shall be entitled to participate

therein and, if it so desires, to assume the defense thereof with counsel

reasonably satisfactory to such Indemnitee and, after notice from the

Indemnifying Party to the Indemnitee of its election to assume the defense

thereof, the Indemnifying Party shall not be liable to such Indemnitee under

this Section 6 for any fees of other counsel or any other expenses, in each case

subsequently incurred by such Indemnitee in connection with the defense thereof,

other than reasonable costs of investigation. Notwithstanding an Indemnifying

Party's election to assume the defense of any such Action that is subject to

indemnification under this Section 6, the Indemnitee shall have the right to

employ separate counsel and to participate in the defense of such Action. If an

Indemnifying Party assumes the defense of such Action, no compromise or

settlement thereof may be effected by the Indemnifying Party without the

Indemnitee's written consent, which consent shall not be unreasonably withheld

or delayed, unless (A) there is no finding or admission of any violation of law

or any violation of the rights of any Person and no effect on any other claims

that may be made against the Indemnitee and (B) the sole relief provided is

monetary damages that are paid in full by the Indemnifying Party.

 

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            6.4 This Agreement to reimburse and indemnify under the

circumstances set forth above shall continue after the termination of this

Agreement.

 

            7. REPRESENTATIONS AND WARRANTIES:

 

            7.1 Mutual Representations and Warranties.

 

            (a)    Each party represents and warrants that it is duly authorized

                  to execute and deliver this Agreement and to perform its

                  obligations hereunder.

 

            (b)    Each party represents and warrants that this Agreement is a

                  legal and valid obligation binding upon it and enforceable in

                  accordance with its terms Each party represents that to the

                  best of its knowledge the execution, delivery and performance

                  of this Agreement does not conflict with any agreement,

                  instrument or understanding, oral or written, to which it is a

                  party or by which it may be bound, nor violate any law or

                  regulation of any court, governmental body or administrative

                   or other agency having jurisdiction over it.

 

            7.2 REPRESENTATIONS AND WARRANTIES OF LICENSOR.

 

            (a)    LICENSOR represents and warrants that, subject to any interest

                  of the Government, LICENSOR owns the Patent Rights and

                  Know-How and has sufficient rights and power to grant the

                  licenses to LICENSEE which LICENSOR purports to grant herein.

 

            (b)    LICENSOR represents that, to the best of its knowledge, except

                   as set forth in Section 4 above, there are no outstanding

                  liens, encumbrances, agreements or understandings of any kind,

                  either written, oral or implied, regarding the Patent Rights

                  or Know-How which are inconsistent or in conflict with any

                  provision of this Agreement.

 

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            (c)    LICENSOR represents and warrants that it has no knowledge of

                  any outstanding and unresolved claim or accusation that the

                  practice of the Patent Rights or Know-How infringes or may

                  infringe any third-party patent right(s).

 

            (d)    LICENSOR represents that, to the best of its knowledge, no

                  patent application or patent within the Patent Rights or

                  Know-How is the subject of any interference, opposition,

                  cancellation or other protest proceeding.

 

            7.3 Disclaimer of Other Warranties. Except as set forth in Sections

7.1 and 7.2 above, LICENSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND HEREBY

DISCLAIMS ALL SUCH WARRANTIES, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT

LIMITATION, THE CONDITION OF ANY