Exhibit 10.1
PATENT LICENSE AGREEMENT
This Patent
License Agreement (this “Agreement”) is made by and
between the Board of Regents (“Board”) of The
University of Texas System, an agency of the State of Texas, whose
address is 201 West 7th Street, Austin, Texas 78701
(“System”), through its component institution, The
University of Texas Medical Branch at Galveston, having a business
address at 301 University Blvd., Galveston, Texas 77555
(“University”) and Chrysalis Biotechnology, Inc., a
Delaware corporation (“Licensee”), having a principal
place of business located at 2200 Market, Suite 600,
Galveston, Texas 77550.
RECITALS
A. WHEREAS,
Board owns certain Patent Rights and Technology Rights related to
Licensed Subject Matter, which were developed at University, and
some of which are jointly owned with Monsanto;
B. WHEREAS,
Monsanto exclusively licensed its joint ownership in certain of the
Patent Rights to Board on May 15, 1991 pursuant to a license
agreement as set forth in Exhibit 1 attached hereto (the
“Monsanto Agreement”), Monsanto granted Board the right
to grant sublicenses to third parties pursuant to the Monsanto
Agreement, and Board has filed for recordation of the Monsanto
Agreement with the United States Patent and Trademark Office to
further associate the Monsanto Agreement with certain of the Patent
Rights jointly owned with Monsanto in the United States;
C. WHEREAS,
Board desires to have the Licensed Subject Matter developed and
used for the benefit of Licensee, Board, and the public;
D. WHEREAS,
Licensee was formed to develop and commercially exploit the
Licensed Subject Matter;
E. WHEREAS,
Licensee and Board are parties to a previous Patent License
Agreement dated November 10, 1995, (as amended on
March 30, 2000 and August 30, 2000) (“Previous
License Agreement”) which this Agreement replaces;
F. WHEREAS,
pursuant to the Previous License Agreement, Board also granted
Licensee a sublicense in the rights granted from Monsanto to Board
pursuant to the Monsanto Agreement; and
G. WHEREAS,
Licensee has represented to Board, to induce Board to enter into
this Agreement, that Licensee is contemplating the sale of
substantially all its assets to OrthoLogic Corp., a Delaware
corporation (“OLGC”), pursuant to an Asset Purchase
Agreement and Plan of Reorganization (the “Purchase
Agreement”), by and between Licensee and OLGC.
****Text has been omitted
pursuant to a confidentiality request. Omitted text has been filed
with the Securities and Exchange Commission.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants herein
contained, the adequacy and legal sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. AMENDMENT. This Agreement
amends and restates the Previous License Agreement in its entirety.
The Recitals set forth above are material to and form part of this
Agreement.
2. EFFECTIVE DATE. This Agreement
shall be effective as of the Closing Date (as defined in the
Purchase Agreement), (the “Effective Date”).
3. DEFINITIONS. As used in this
Agreement, the following terms shall have the meanings
indicated:
"
Carney ” shall mean Darrell H. Carney,
Ph.D.
"
Confidential Information ” shall mean this Agreement,
the contents of this Agreement and all non-public or proprietary
information of a party disclosed by such party or its officers,
representatives, agents, or employees to the other party in
connection with the performance of this Agreement. Subject to
exceptions set forth in Section 14.1(c) herein, such
information shall be Confidential Information if it would
ordinarily be treated as confidential by the disclosing party or
would ordinarily be considered information of a confidential nature
in the industry, whether or not specifically marked as
such.
"
Effective Date” is defined in Section 2
above.
"
Licensed Field ” shall mean all fields of
use.
"
Licensed Process ” shall mean any process which is
covered in whole or in part by an issued, unexpired valid claim
contained in the Patent Rights.
"
Licensed Product ” shall mean any product, component,
or material which is covered in whole or in part by an issued,
unexpired, valid claim contained in the Patent Rights.
"
Licensed Subject Matter ” shall mean inventions and
discoveries covered by Patent Rights or Technology Rights within
the Licensed Field.
"
Licensed Territory ” shall mean the entire
world.
"
Monsanto ” shall mean Monsanto Company, a Delaware
corporation, or the party having legal ownership (through a merger,
acquisition, or other acquisition from Monsanto) of the Monsanto
Agreement and the patent rights described therein.
"
Net Sales ” shall mean the gross revenues received by
Licensee (and its Sublicensees) from the Sale of each Licensed
Product or Licensed Process, less sales and use taxes actually
paid, import and export duties actually paid, outbound
transportation prepaid or allowed,
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pursuant to a confidentiality request. Omitted text has been filed
with the Securities and Exchange Commission.
shipping insurance, amounts
allowed or credited due to returns (not to exceed the original
billing or invoice amount), wholesale and cash discounts actually
granted and charges and portions of charges disallowed by third
party payors or care managers; provided , that if a Licensed
Product is sold in combination with other items (whether as part of
the Sale of a combination product, package, system, kit or tray or
otherwise) at a unit price, whether formulated or packaged together
or separately, “Net Sales” shall mean the “Net
Sales” of such combination multiplied by (i) a fraction,
A/A+B, where A is the average selling price (“ASP”) of
the Licensed Product when sold separately and B is the ASP of the
other items when sold separately, or (ii) if the ASP of the
Licensed Product or the other items are not available, a fraction
determined by the mutual agreement of the parties, which represents
the proportionate economic value of the Licensed Product relative
to the proportionate economic value contributed by the other
items.
"
Patent Rights ” shall mean any and all of
Board’s rights in, to and under:
(a) the patents
and patent applications listed in Exhibit 2, as updated from
time to time pursuant to Section 5.4 hereof, and any and all
inventions and discoveries by University relating to TP508
Technology conceived or reduced to practice prior to and during the
two-year period following the Effective Date, but shall not include
any new technology rights, described in Section 5.5 hereof,
until such time as Licensee elects to add such new technology
rights pursuant to such Section 5.5;
(b) all divisions,
continuations, continuations-in-part, registrations, reissues,
reexaminations or extensions of any type and corresponding foreign
applications with respect to any of the applications and patents
described in the foregoing paragraph and which relate to the
manufacture, use or sale of TP508 Technology other than any
applications and patents in respect of new technology added to
Licensed Subject Matter pursuant to Section 5.5;
and
(c) the Monsanto
Agreement and the licensed patent rights thereunder.
"
Sale or Sold ” shall mean the sale, transfer or
disposition of a Licensed Product or royalty-bearing use of a
Licensed Process for value to a party other than Licensee or a
Subsidiary.
"
Sublicensee ” shall mean any third party to whom
Licensee has granted a sublicense under the Patent Rights to make
and sell Licensed Products or use a Licensed Process.
"
Subsidiary ” shall mean any business entity more than
fifty percent (50%) owned by Licensee, any business entity which
owns more than fifty percent (50%) of Licensee, or any business
entity that is more than fifty percent (50%) owned by a business
entity that owns more than fifty percent (50%) of
Licensee.
"
Technology Rights ” shall mean Board’s and
University’s rights in any technical information, know-how,
process, procedure, composition, method, formula, protocol,
technique, software, design, drawing or data relating to Licensed
Field, whether or not covered by Patent Rights, which relate to
TP508 Technology, which are necessary to practice the
inventions
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pursuant to a confidentiality request. Omitted text has been filed
with the Securities and Exchange Commission.
covered by the Patent Rights, and
are made or developed by Carney or any University employee working
under the supervision or direction of Carney, prior to or within
two years after the Effective Date.
"
Term ” shall have the meaning given to it in
Section 7.1 of this Agreement.
“TP508 Technology” shall mean (i) any and
all subject matter claimed in Patent Rights; and (ii) peptides
which bind to and/or stimulate a thrombin receptor, compositions
which contain such peptides, methods of producing such peptides,
detecting such peptides, and utilizing such peptides diagnostically
and/or therapeutically, including, but not limited to, thrombin
derived polypeptides, agonists or antagonists of the
proteolytically or non-proteolytically activated thrombin receptor
or receptors or agonists and antagonists of other cellular effects
activated by proteolytic or non-proteolytic thrombin interactions
and which are made or developed by Carney or any University
employee working under the supervision or direction of
Carney.
"
University ” is defined in the first paragraph of this
Agreement.
4. WARRANTIES; SUPERIOR-RIGHTS;
COVENANTS
4.1
Except for the rights, if any, of the Government of the United
States, as set forth in Section 4.2, Board represents and
warrants that it is the owner of the entire right, title, and
interest in and to the Licensed Subject Matter, subject only to
Monsanto’s rights under the Monsanto Agreement, and that it
has the exclusive right to grant licenses thereunder and has not
granted licenses thereunder to any other entity other than
Licensee. The representations and warranties of this
Section 4.1 apply only to Patent Rights and Technology Rights,
but shall not apply to (i) any subject matter independently
developed by or rights of third parties who have no affiliation
with or obligation to assign rights or subject matter to the Board
or University or (ii) any purported assignment by Carney (or
other named inventor) in violation of his/her obligations under the
University intellectual property policies.
4.2
Licensee understands, acknowledges and agrees that: (i) the
Licensed Subject Matter may have been developed under a funding
agreement with the Government of the United States of America and,
if so, that the Government may have certain rights relative
thereto; (ii) THIS AGREEMENT IS EXPLICITLY MADE SUBJECT TO THE
GOVERNMENT’S RIGHTS UNDER ANY SUCH AGREEMENT AND ANY
APPLICABLE LAW OR REGULATION; and (iii) to the extent that
there is a conflict between any such agreement, applicable law or
regulation and this Agreement, the terms of such Government
agreement, applicable law or regulation shall prevail.
4.3
Licensee understands, acknowledges and agrees that: (i) Board,
by this Agreement, makes no representation as to the operability or
fitness for any use, safety, efficacy, ability to obtain regulatory
approval, patentability, and/or breadth of the Licensed Subject
Matter; and (ii) Board, by this Agreement, also makes no
representation as to whether there are any patents now held, or
which will be held, by others or by Board in the Licensed Field,
nor does Board make any representation that the inventions,
products, processes, or machines
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pursuant to a confidentiality request. Omitted text has been filed
with the Securities and Exchange Commission.
contained in Patent Rights do not
infringe any other patents now held or that will be held by others
or by Board.
4.4
Licensee, by execution hereof, acknowledges, covenants and agrees
that it has not been induced in any way by Board, System,
University or its employees to enter into this Agreement, and
further warrants and represents that (i) it has conducted
sufficient due diligence with respect to all items and issues
pertaining to this Article 4 and all other matters pertaining
to this Agreement; and (ii) Licensee has adequate knowledge
and expertise, or has utilized knowledgeable and expert
consultants, to adequately conduct the due diligence and evaluate
the risks inherent herein.
4.5
Each of Board, acting by and through University, and University
represents, warrants and covenants that:
(a) the Monsanto
Agreement is in full force and effect and has not been amended or
modified and (i) to the knowledge of Board and University,
Board is in compliance with all its obligations thereunder in
respect of all obligations to be performed by Board and Board shall
remain in compliance with all its obligations thereunder to be
performed by Board prior to the potential assignment thereof to
Licensee in accordance with Section 6.2(c) hereof and;
(ii) to the knowledge of Board and University, each party
other than Board and University is in compliance with all its
obligations thereunder and does not presently plan to terminate or
have the right to terminate such agreement; (iii) such agreement is
enforceable against Board in accordance with its terms and, to the
knowledge of Board and University, against each other party; and
(iv) Board and University shall take such action within the
power of Board and University as may be necessary to keep such
agreement in full force and effect; and
(b) it has the
power and actual authority to enter into and perform its
obligations under this Agreement, and this Agreement has been duly
authorized, executed and delivered by it and is enforceable against
it in accordance with its terms.
4.6
The Board acknowledges that all material conditions of the Previous
License Agreement have been either satisfied by Licensee or are
waived by Board and that Licensee is not in breach of any term
therein. Licensee acknowledges that all material conditions of the
Previous License Agreement have been either satisfied by Board or
are waived by Licensee and that Board is not in breach of any term
therein. Notwithstanding the foregoing, nothing in this
Section 4.4 shall be construed as a waiver or modification by
any party of any conditions, rights or obligations set forth in
this Agreement.
4.7
Upon written request by either party, Licensee and Board shall
promptly update Exhibit 2 attached hereto to include all
patent applications and patents that are then within the Patent
Rights.
5. LICENSE
5
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pursuant to a confidentiality request. Omitted text has been filed
with the Securities and Exchange Commission.
5.1
Board hereby grants and agrees to grant to Licensee a
royalty-bearing, exclusive license under Licensed Subject Matter to
manufacture, have manufactured, sell, offer for Sale, import and
use Licensed Product and Licensed Process within the Licensed
Territory within the Licensed Field; provided, however:
(a) Board and
University and their respective employees, agents and
representatives may publish their own scientific findings from
research related to Licensed Subject Matter, but only in accordance
with the procedures set forth in Section 14.2; and
(b) Board may use
any information contained in the Licensed Subject Matter generated
by the University, other than Confidential Information, for
non-commercial research, including care of University patients,
teaching, applying for funding and other educational
purposes.
5.2
Licensee shall have the right to extend the license granted herein
to any Subsidiary provided that such Subsidiary consents to be
bound by this Agreement to the same extent as Licensee, including,
but not limited to, the provisions set forth under Article 6
hereof, and Licensee provides notification to the Board of any such
extension of the license herein to a Subsidiary. Any such extension
shall not be deemed to be a sublicense hereunder and shall not be
subject to the sublicense royalty payment obligations under
Section 6.1(b).
5.3
Licensee shall have the right to grant sublicenses consistent with
this Agreement provided that Licensee shall at all times be
responsible for the operations of its Sublicensees pursuant to such
sublicense as if such operations were carried out by Licensee,
including the timely payment of royalties to Board whether or not
Sublicensee has timely paid royalties owed to Licensee pursuant to
such sublicense. Within thirty (30) days of execution,
modification, or termination of a sublicense by Licensee, Licensee
further agrees to deliver to Board a true and correct copy of such
sublicense granted by Licensee, and any modification or termination
thereof.
5.4
Licensee shall have sole discretion whether to file and over the
filing and prosecution of patent applications relating to the
Licensed Subject Matter, and shall be responsible for all costs
related to filing, prosecuting, and maintaining the Patent Rights.
Licensee shall update Exhibit 2 to include patent applications
relating to TP 508 technology that are filed by Licensee pursuant
to this Section 5.4 within the two-year period following the
Effective Date. In addition, with respect to any patent within the
Patent Rights, Board hereby designates Licensee or its designee as
its agent for the limited purpose of obtaining an extension of such
patent or governmental equivalent thereof which extends the
exclusivity of any of the Patent Rights where available in any
country in the world and, if reasonably necessary, Board hereby
authorizes Licensee to file in Board’s name or, at
Licensee’s option, Board shall use reasonable efforts to
obtain such extension for Licensee or its Sublicensees, at
Licensee’s expense. In the event that Licensee fails to cure
any breach in this Agreement as set forth in Section 7.4, then
such designation by Board of Licensee as its agent for the limited
purpose of obtaining any extension of such Patent Rights is hereby
revoked. Furthermore, Board and
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pursuant to a confidentiality request. Omitted text has been filed
with the Securities and Exchange Commission.
University shall provide
reasonable assistance to facilitate Licensee’s or its
Sublicensees’ efforts to obtain any such
extension.
5.5
Licensee shall have the right to add to Licensed Subject Matter
University’s rights in any new technology applications that
are not then included in Patent Rights that are developed at
University, provided that the new technology applications:
(i) whether or not Carney is named as an inventor of such new
technology applications consist of new or novel uses of (x) a
composition disclosed or claimed in a prior patent application or
(y) a new composition based on thrombin peptide technology
developed at University; or (ii) relate to TP508 Technology
after the two-year period from the Effective Date. Board may offer
a license in any such new technology rights to third parties, but
only if (i) Board gives written notice of its intent to do so
to Licensee and (ii) Licensee does not elect within
90 days of such written notice to add such new technology
rights to Licensed Subject Matter pursuant to this
Section 5.5.
5.6
Licensee and its successors in interest may record with the various
patent and trademark offices in which Patent Rights are pending or
have issued, a memorandum of exclusive license as provided in
Exhibit 3, which University on behalf of Board will sign upon
request of Licensee.
5.7
Board shall promptly, and in any event, within ten
(10) business days of any of the following occurrences,
deliver to Licensee: (i) evidence of each payment made by
Board pursuant to Article 4 of the Monsanto Agreement, unless
Licensee shall have agreed to make such payments to Monsanto
directly on Board’s behalf; and (ii) true and complete
copies of each notice, report or other document delivered or
received by Board pursuant to Articles 5 or 6 of the Monsanto
Agreement.
6. PAYMENTS AND
REPORTS
6.1
In consideration of rights granted by Board to Licensee under this
Agreement, Licensee agrees to pay Board the following:
(a) Running
royalties in an amount equal to two and a half percent (2.5%) of
Net Sales of each Licensed Product and each Licensed Process
manufactured, imported, exported, used, leased, or Sold by and/or
for Licensee and/or its Subsidiary and/or its Sublicensees,
provided, however, that the minimum annual running royalties
payable to the Board shall be $20,000 per calendar year, prorated
for the first calendar year following the Effective Date, and any
amounts paid under any section of this Agreement or the Patent
Assignment Agreement to University or Board by Licensee in a given
year after the Effective Date shall count against the minimum
annual running royalties. Notwithstanding the foregoing, (i) the
running royalty rate shall be 3.3% in respect of Net Sales of
Licensed Products and Licensed Processes to the extent that such
Licensed Products or Licensed Processes arise from new technology
rights that Licensee elects to add to Licensed Subject Matter after
the Effective Date pursuant to Section 5.5 and such royalty
rate shall not be subject to increase pursuant to Section 6.2
and (ii) to the extent that a Sale gives rise to the accrual
of a running royalty under Section 5.a of the
Patent
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pursuant to a confidentiality request. Omitted text has been filed
with the Securities and Exchange Commission.
Assignment Agreement (or, but for the second
paragraph of such Section 5.a, would have given rise to such
accrual) it shall not give rise to the accrual of a running royalty
under this 6.1(a).
It is
understood and agreed by the parties that the payment of royalties
pursuant to this Section 6.1(a) shall be made only on the
first Sale of a Licensed Product or Licensed Process by Licensee, a
Subsidiary or a Sublicensee, and that subsequent Sales of the same
Licensed Product or Licensed Process for which royalties have been
accrued pursuant to this Section 6.1(a) shall not be subject
to any additional accrual of royalties (for example, and for
illustration purposes only, if a royalty accrues due to a Sale by
Licensee
