PATENT AND TECHNOLOGY
LICENSE AGREEMENT
THIS thirteen (13) page AGREEMENT
("AGREEMENT") is made on this ………………….
by and between the BOARD OF REGENTS ("BOARD") of THE ...........
OF
........... YYY ("YYY"), an agency of the State
of ..........., whose address is 201
a
N.
TABLE OF CONTENTS
RECITALS
Page 2
I. EFFECTIVE
DATE
Page 2
II.
DEFINITIONS Page
2
III.
LICENSE
Page 3
IV.
CONSIDERATION, PAYMENTS AND REPORTS Page 4
V.
SPONSORED RESEARCH Page 6
VI. PATENTS
AND INVENTIONS
Page 6
VII.
INFRINGEMENT BY THIRD PARTIES Page 7
VIII. PATENT
MARKING Page 7
IX.
INDEMNIFICATION Page 7
X. USE OF
BOARD AND COMPONENT'S NAME
Page 8
XI.
CONFIDENTIAL INFORMATION Page 8
XII. ASSIGNMENT Page
8
XIII. TERMS
AND TERMINATION
Page 9
XIV.
WARRANTY: SUPERIOR-RIGHTS Page 10
XV.
GENERAL Page 11
SIGNATURES Page
12
EXHIBIT I
Page 13
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RECITALS
A. BOARD owns certain PATENT RIGHTS and TECHNOLOGY
RIGHTS related to LICENSED
SUBJECT MATTER, which were developed at
MDA, a component institution of YYY.
B. BOARD desires to have the LICENSED SUBJECT MATTER
developed in the LICENSED
FIELD and used for the benefit of LICENSEE, the
inventor, BOARD, and the public
as outlined in the Intellectual Property Policy
promulgated by the BOARD.
C. LICENSEE wishes to obtain a license from BOARD to
practice LICENSED SUBJECT
MATTER.
NOW, THEREFORE, in consideration of the mutual
covenants and premises herein
contained, the parties hereto agree as follows:
I. EFFECTIVE
DATE
1.1 Subject to approval by BOARD, this AGREEMENT shall
be effective as of the
date written herein above ("EFFECTIVE
DATE").
II.
DEFINITIONS
As used in this AGREEMENT, the following terms shall
have the meanings
indicated:
2.1 AFFILIATE shall mean any business entity more than
50% owned by LICENSEE,
any business entity which owns more than 50% of
LICENSEE, or any business entity
that is more than 50% owned by a business entity that
owns more than 50% of
LICENSEE.
2.2 LICENSED FIELD shall mean all fields of use within
the LICENSED SUBJECT
MATTER.
2.3 LICENSED PRODUCTS shall mean any product or
service SOLD by LICENSEE
comprising LICENSED SUBJECT MATTER pursuant to this
AGREEMENT.
2.4 LICENSED SUBJECT MATTER shall mean inventions and
discoveries defined herein
as PATENT RIGHTS or as TECHNOLOGY RIGHTS.
2.5 LICENSED TERRITORY shall mean all national and
international political
jurisdiction in which LICENSED PRODUCTS are sold.
2.6 NET SALES shall mean the gross revenues received
by LICENSEE from the
of LICENSED PRODUCTS less sales and/or use taxes actually
paid, import and/or
export duties actually paid, outbound transportation
prepaid or allowed, and
amounts allowed or credited due to returns (not to
exceed the original billing
or invoice amount).
2.7 PATENT RIGHTS shall only mean any and all of BOARD'S
rights in information
or
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discoveries claimed in invention disclosures, patents,
and/or patent
applications, whether domestic or foreign, and all
divisionals, continuations,
continuations-in-part, reissues, reexaminations or
extensions thereof, and any
letters patent that issue thereon as defined in
Exhibit I hereto subject to the
limitations, if any, set forth therein.
2.8
for value to a party other than LICENSEE or an AFFILIATE.
2.9 Subject to the limitations, if any, set forth in
Exhibit I hereto,
TECHNOLOGY RIGHTS shall mean BOARD'S rights in any
technical information,
know-how, process, procedure, composition, device,
method, formula, protocol,
technique, software, design, drawing or data created
by the inventors listed in
Exhibit I hereto and relating to LICENSED SUBJECT
MATTER which is not claimed in
PATENT RIGHTS but which is necessary for practicing
PATENT RIGHTS regardless of
whether any patent is actually issued during the term
of this AGREEMENT.
III. LICENSE
3.1 BOARD hereby grants to LICENSEE a royalty-bearing,
exclusive license under
LICENSED SUBJECT MATTER to manufacture, have
manufactured, use and/or sell
LICENSED PRODUCTS within LICENSED TERRITORY for use
within LICENSED FIELD and,
subject to Paragraph 4.5 herein, shall extend to
BOARD's undivided interest in
any LICENSED SUBJECT MATTER developed during the term
of this AGREEMENT and
jointly owned by BOARD and LICENSEE. This grant shall
be subject to Paragraph
14.2 and 14.3, hereinbelow, the payment by LICENSEE to
BOARD of all
consideration as provided in Paragraph 4.1 of this
AGREEMENT, (as well as the
timely payment of all amounts due under any Sponsored
Research Agreement between
MDA and LICENSEE in effect during the term of this
AGREEMENT) and shall be
further subject to rights retained by BOARD and MDA
to:
(a) Publish the general scientific findings from
research related to LICENSED
SUBJECT MATTER; AND
(b) Subject to the provisions of ARTICLE XI herein
below, use any information
contained in LICENSED SUBJECT MATTER for research,
teaching, patient care, and
other educationally-related purposes.
3.2 LICENSEE shall have the right to extend the
license granted herein to any
AFFILIATE provided that such AFFILIATE consents to be
bound by all of the terms
and conditions of this AGREEMENT.
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3.3 Subject to the Paragraph 3.4 herein below,
LICENSEE shall have the right to
grant sublicenses under LICENSED SUBJECT MATTER
consistent with the terms of
this AGREEMENT provided that LICENSEE shall be
responsible for its sublicensees
relevant to this AGREEMENT, and for diligently
collecting all amounts due
LICENSEE from subicensees. In the event a sublicensee
pursuant hereto becomes
bankrupt, insolvent or is placed in the hands of a
receiver or trustee,
LICENSEE, to the extent allowed under applicable law
and in a timely manner,
agrees to use its best reasonable efforts to collect
any and all consideration
owed to LICENSEE and to have the sublicense agreement
confirmed or rejected by a
court of proper jurisdiction.
3.4 LICENSEE agrees to deliver to BOARD a true and
correct copy of each
sublicense granted by LICENSEE, and any modification
or termination thereof,
within thirty (30) days after execution, modification,
or termination.
3.5 Upon termination of this AGREEMENT, BOARD agrees
to accept as successors to
LICENSEE, existing sublicensees in good standing at
the date of termination
provided that such sublicensees consent to be bound by
all of the terms and
conditions of this AGREEMENT.
IV. CONSIDERATION, PAYMENTS AND REPORTS
4.1 In consideration of rights granted by BOARD to
LICENSEE under this
AGREEMENT, LICENSEE agrees to pay MDA the following:
(a) Reimbursement for all out-of-pocket expenses paid
by MDA through May 31,
1996 in filing, prosecuting, enforcing and maintaining
PATENT RIGHTS licensed
hereunder as follows: (i) $53,125.00 due
paid by MDA, for so long as, and in such countries as, this AGREEMENT
remains in
effect. MDA will invoice LICENSEE in accordance with
the schedule herein, and
upon a quarterly basis thereafter beginning
MDA after
LICENSEE within thirty (30) days thereafter; AND
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(b) A running royalty equal to six percent (6%) of
LICENSEE's NET SALES of
LICENSED PRODUCTS in national political jurisdictions
in the LICENSED TERRITORY
where LICENSED SUBJECT MATTER is covered by one (1) or
more issued patents or
pending patent applications and three percent (3%) of
LICENSEE'S NET SALES of
LICENSED PRODUCTS in national political jurisdictions
in the LICENSED TERRITORY
where LICENSED SUBJECT MATTER is NOT covered by one
(1) or more issued patents
or pending patent applications, and fifty percent
(50%) (or forty percent (40%)
when LICENSEE has expended or committed to expend and
is current in its
obligations to expend Two Million Dollars
($2,000,000.00) on research and
development of the LICENSED SUBJECT MATTER) of all
consideration other than
Research and Development ("R&D") money
received by LICENSEE from (i) any
sublicensee pursuant to Paragraphs 3.3 and 3.4 herein
above, and (ii) any
assignee pursuant to Paragraph 12.1 hereinbelow
including but not limited to
royalties, up-front payments, marketing, distribution,
franchise, option,
license, or documentation fees, bonus and milestone payments
and equity
securities, all payable within thirty (30) days after
March 31, June 30,
September 30, and December 31 of each year during the
term of this AGREEMENT, at
which time LICENSEE shall also deliver to BOARD and
MDA a true and accurate
report, giving such particulars of the business
conducted by LICENSEE and its
sublicensees, if any exist, during the preceding three
(3) calendar months under
this AGREEMENT as necessary for BOARD are to account
for LICENSEE's payments
hereunder. Such report shall include all pertinent
data, including, but not
limited to: (a) the total quantities of LICENSED
PRODUCTS produced; (b) the
total SALES, (c) the calculation of royalties thereon;
(d) the total royalties
(or minimum royalties) so computed and due MDA; and
(e) all other amounts
covered and due herein. Simultaneously with the
delivery of each such report,
LICENSEE shall pay to MDA the amount, if any, due for
the period of such report.
If no payments are due, it shall be so reported.
Should LICENSEE be obligated to
pay running royalties to third parties to avoid
infringing such third parties'
patent rights which dominate BOARD'S PATENT RIGHTS,
LICENSEE may reduce the
running royalty due MDA by such running royalties to
such third parties,
provided, however, the running royalty due MDA shall
in no case be less than
one-half the rates stated herein.
4.2 During the Term of this AGREEMENT and for one (1)
year thereafter, LICENSEE
shall keep complete and accurate records of its and
its sublicensees' SALES and
NET SALES of LICENSED PRODUCTS to enable the royalties
payable hereunder to be
determined. LICENSEE shall permit MDA or its
representatives, at MDA's expense,
to periodically examine its books, ledgers, and
records during regular business
hours for the purpose of and to the extent necessary
to verify any report
required under this AGREEMENT. In the event that the
amounts due to MDA are
determined to have been underpaid in an amount equal
to or greater than five
percent (5%) of the total amount due during the period
of time so examined,
LICENSEE shall pay the cost of such examination, and
accrued interest at the
highest allowable rate.
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4.3 Upon the request of BOARD or MDA but not more
often than once per calendar
year, LICENSEE shall deliver to BOARD and MDA a
written report as to LICENSEE'S
(and sublicensees') efforts and accomplishments during
the preceding year in
diligently commercializing LICENSED SUBJECT MATTER in
the LICENSED TERRITORY and
LICENSEE'S (and sublicensees') commercialization plans
for the upcoming year.
4.4 All amounts payable hereunder by LICENSEE shall be
payable in
funds without deductions for taxes, assessments, fees,
or charges of any kind.
Checks shall be made payable to The
........... of ........... M. D. Anderson
Cancer
Center and mailed by U.S. Mail to
Manager, Sponsored Programs.
4.5 No payments due or royalty rates under this
AGREEMENT shall be reduced as
the result of co-ownership of LICENSED SUBJECT MATTER
by BOARD and another
party, including LICENSEE.
V. SPONSORED
RESEARCH
5.1 If LICENSEE desires to fund sponsored research
within the LICENSED SUBJECT
MATTER, and particularly where LICENSEE receives money
for sponsored research
payments pursuant to a sublicense under this
AGREEMENT, LICENSEE shall notify
MDA in writing of all opportunities to conduct such
sponsored research
(including clinical trials, if applicable), shall
solicit research and/or
clinical proposals from MDA for such purpose, and
shall give good faith
consideration to funding such proposals at MDA.
VI. PATENTS AND
INVENTIONS
6.1 If after consultation with LICENSEE it is agreed
by BOARD and LICENSEE that
a new patent application should be filed for LICENSED
SUBJECT MATTER, BOARD will
prepare and file appropriate patent applications, and
LICENSEE will pay the cost
of searching, preparing, filing, prosecuting and maintaining
same. If LICENSEE
notifies BOARD that it does not intend to pay the cost
of an application, or if
LICENSEE does not respond or make an effort to agree
with BOARD on the
disposition of rights of the subject invention, then
BOARD may file such
application at its own expense and LICENSEE shall have
no rights to such
invention. BOARD shall provide LICENSEE with a copy of
the application for which
LICENSEE has paid the cost of filing, as well as
copies of any documents
received or filed during prosecution thereof.
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VII. INFRINGEMENT BY THIRD PARTIES
7.1 LICENSEE shall have the obligation of enforcing at
its expense any patent
exclusively licensed hereunder against infringement by
third parties and shall
be entitled to retain recovery from such enforcement.
LICENSEE shall pay MDA a
royalty on any monetary recovery to the extent that
such monetary recovery by
LICENSEE is held to be damages or a reasonable royalty
in lieu thereof. In the
event that LICENSEE does not file suit against a
substantial infringer of such
patents within six (6) months of knowledge thereof,
then BOARD shall have the
right to enforce any patent licensed hereunder on
behalf of itself and LICENSEE
(MDA retaining all recoveries from such enforcement)
and/or reduce the license
granted hereunder to non-exclusive.
7.2 In any suit or dispute involving an infringer, the
parties shall cooperate
fully, and upon the request and at the expense of the
party bringing suit, the
other party shall make available to the party bringing
suit at reasonable times
and under appropriate conditions all relevant
personnel, records, papers,
information, samples, specimens, and the like which
are in its possession.
VIII. PATENT
MARKING
8.1 LICENSEE agrees that all packaging containing
individual LICENSED
PRODUCT(S), and documentation therefor, sold by
LICENSEE, SUBSIDIARIES, and
sublicensees of LICENSEE will be marked permanently
and legibly with the number
of the applicable patent(s) licensed hereunder in
accordance with each country's
patent laws, including Title 35, United States Code.
IX.
INDEMNIFICATION
9.1 LICENSEE shall hold harmless and indemnify BOARD,
YYY, MDA, its Regents,
officers, employees, students, and agents from and
against any claims, demand,
or causes of action whatsoever, costs of suit and
reasonable attorney's fees
including without limitation those costs arising on
account of any injury or
death of persons or damage to property caused by, or
arising out of, or
resulting from, the exercise or practice of the
license granted hereunder by
LICENSEE or its officers, employees, agents or
representatives.
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X. USE OF BOARD AND COMPONENT'S NAME
10.1 LICENSEE shall not use the name of (or the name
of any employee of) MDA,
YYY or BOARD without the advance, express written
consent of BOARD secured
through:
The
........... of ...........
ATTENTION:
XI. CONFIDENTIAL
INFORMATION
11.1 BOARD and LICENSEE each agree that all information
contained in documents
marked "confidential" which are forwarded to
one by the other shall be received
in strict confidence, used only for the purposes of
this AGREEMENT, and not
disclosed by the recipient party (except as required
by law or court order), its
agents or employees without the prior written consent
of the other party, unless
such information (a) was in the public domain at the
time of disclosure, (b)
later became part of the public domain through no act
or omission of the
recipient party, its employees, agents, successors or
assigns, (c) was lawfully
disclosed to the recipient party by a third party
having the right to disclose
it, (d) was already known by the recipient party at
the time of disclosure, (e)
was independently developed or (f) is required to be
submitted to a government
agency pursuant to any preexisting obligation.
11.2 Each party's obligation of confidence hereunder
shall be fulfilled by using
at least the same degree of care with the other
party's confidential information
as it uses to protect its own confidential
information. This obligation shall
exist while this AGREEMENT is in force and for a
period of three (3) years
thereafter.
XII.
ASSIGNMENT
12.1 Except in connection with the sale of
substantially all of the assets of
LICENSEE to a third party, this AGREEMENT may not be
assigned by LICENSEE
without the prior written consent of BOARD.
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XII. TERMS AND TERMINATION
13.1 Subject to Articles 13.2, 13.3, 13.4, and 13.5
hereinbelow, the term of
this AGREEMENT shall extend from the Effective Date
set forth hereinabove to the
full end of the term or terms for which PATENT RIGHTS
have not expired, and if
only TECHNOLOGY RIGHTS are licensed and no PATENT
RIGHTS are applicable, for a
term of fifteen (15) years.
13.2 BOARD shall have the right at any time after one
(1) year from the
EFFECTIVE DATE of this AGREEMENT to terminate the
license granted herein in any
national political jurisdiction within the LICENSED
TERRITORY if LICENSEE,
within ninety days after written notice from BOARD of
such intended termination,
fails to provide written evidence satisfactory to
BOARD that LICENSEE has
commercialized or is actively and effectively
attempting to commercialize an
invention licensed hereunder within such
jurisdiction(s). Accurate, written
evidence provided by LICENSEE to BOARD within said
ninety (90) day period that
LICENSEE has an effective, ongoing and active
research, development,
manufacturing, marketing, or sales program, as
appropriate, directed toward
obtaining regulatory approval and/or production and/or
sale of LICENSED PRODUCTS
incorporating PATENT RIGHTS or incorporating TECHNOLOGY
RIGHTS within such
jurisdiction shall be deemed satisfactory evidence.
13.3 Subject to any rights herein which survive
termination, this AGREEMENT will
earlier terminate in its entirety:
(a) automatically if LICENSEE shall become bankrupt or
insolvent and/or if the
business of LICENSEE shall be placed in the hands of a
receiver or trustee,
whether by voluntary act of LICENSEE or otherwise; or
(b) (i) upon thirty (30) days written notice by BOARD
if LICENSEE shall breach
or default on the payment obligations of ARTICLE IV,
or use of name obligations
of ARTICLE X; or (ii) upon ninety (90) days written
notice by BOARD if LICENSEE
shall breach or default on any other obligation under
this AGREEMENT; provided,
however, LICENSEE may avoid such termination if before
the end of such thirty
(30) or ninety (90) day period if LICENSEE provides
notice and accurate, written
evidence satisfactory to BOARD that such breach has
been cured and the manner of
such cure; or.
(c) at any time by mutual written agreement between
LICENSEE and BOARD, or
without cause upon one hundred eighty (180) days
written notice by LICENSEE to
BOARD, subject to any terms herein which survive
termination.
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13.4 Upon termination of this AGREEMENT for any cause:
(a) nothing herein shall be construed to release
either party of any obligation
matured prior to the effective date of such
termination.
(b) LICENSEE covenants and agrees to be bound by the
provisions of ARTICLES IX,
X AND XI of this AGREEMENT.
(c) LICENSEE may, after the effective date of such
termination, sell all
LICENSED PRODUCTS and parts therefore that it may have
on hand at the date of
termination, provided that LICENSEE pays the earned
royalty thereon and any
other amounts due pursuant to ARTICLE IV of this
AGREEMENT.
(d) LICENSEE grants to BOARD a non-exclusive royalty
bearing license with the
right to sublicense others with respect to
improvements made by LICENSEE
(including improvements licensed by LICENSEE from
third parties) in the LICENSED
SUBJECT MATTER. LICENSEE and BOARD agree to negotiate
in good faith the royalty
rate for said non-exclusive license. BOARD's right to
sublicense others
hereunder shall be solely for purposes of permitting
others to develop and
commercialize the entire technology package.
13.5 This AGREEMENT shall automatically terminate if
LICENSEE fails to deliver
to MDA by September 1, 1996 (i) payment of $53,125.00
pursuant to 4.1(a)
hereinabove and (ii) notice that LICENSEE has legally
binding funding
commitments from its investors totaling Two Million
Dollars ($2,000,000.00) or
more.
XIV. WARRANTY:
SUPERIOR-RIGHTS
14.1 Except for the rights, if any, of the Government
of the United States as
set forth hereinbelow, BOARD represents and warrants
its belief that it is the
owner of the entire right, title, and interest in and
to LICENSED SUBJECT
MATTER, and that it has the sole right to grant
licenses thereunder, and that it
has not knowingly granted licenses thereunder to any
other entity that would
restrict rights granted hereunder except as stated
herein.
14.2 LICENSEE understands that 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. This AGREEMENT is explicitly made subject to
the Government's rights
under any such agreement and any applicable law or
regulation, including P.L.
96-517 as amended by P.L. 98-620. 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.
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14.3 LICENSEE understands and agrees that BOARD, by
this AGREEMENT, makes no
representation as to the operability or fitness for
any use, safety, efficacy,
approvability by regulatory authorities, time and cost
of development,
patentability, and/or breadth of the LICENSED SUBJECT
MATTER. BOARD, by this
AGREEMENT, 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
contained in PATENT RIGHTS do
not infringe any other patents now held or that will
be held by others or by
BOARD.
14.4 LICENSEE, by execution hereof, acknowledges,
covenants and agrees that
LICENSEE has not been induced in anyway by BOARD, YYY,
MDA or employees
thereof to enter into this Agreement, and further
agrees that LICENSEE has
conducted sufficient due diligence with respect to all
items and issues
pertaining to Article XIV herein and all other matters
pertaining to this
Agreement and agrees to accept all risks inherent
herein.
XV. GENERAL
15.1 This AGREEMENT constitutes the entire and only
AGREEMENT between the
parties for LICENSED SUBJECT MATTER and all other
prior negotiations,
representations, agreements and understandings are
superseded hereby. No
agreements altering or supplementing the terms hereof
may be made except by
means of a written document signed by the duly
authorized representatives of the
parties.
15.2 Any notice required by this AGREEMENT shall be
given by prepaid, first
class, certified mail, return receipt requested, and
addressed in the case of
BOARD to:
BOARD OF REGENTS
The ........... of ........... YYY
..........., ........... 78701
ATTENTION: YYY Intellectual
Property Office
with copy to: The ........... of ...........
ATTENTION:
or in the case of LICENSEE to: XYZ,
Inc.
ATTENTION:
or such other address as may be given from time to time
under the terms
of this
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notice
provision.
15.3 LICENSEE covenants and agrees to comply with all
applicable federal, state
and local laws and regulations in connection with its
activities pursuant to
this AGREEMENT.
15.4 This AGREEMENT shall be construed and enforced in
accordance with the laws
of the
15.5 Failure of BOARD to enforce a right under this
AGREEMENT shall not act as a
waiver of that right or the ability to later assert
that right relative to the
particular situation involved.
15.6 Headings included herein are for convenience only
and shall not be used to
construe this AGREEMENT.
15.7 If any provision of this AGREEMENT shall be found
by a court to be void,
invalid or unenforceable, the same shall be reformed
to comply with applicable
law or stricken if not so conformable, so as not to
affect the validity or
enforceability of this AGREEMENT.
IN WITNESS WHEREOF, parties hereto have caused their
duly authorized
representatives to execute this AGREEMENT.
THE ........... OF ........... BOARD OF REGENTS OF THE
........... OF ........... YYY
By
/s/ By /s/
-------------------------------------- ------------------------------
Executive
Vice President Vice
Chancellor and
for
Administration and Finance
General Counsel
APPROVED AS TO CONTENT: APPROVED AS TO FORM:
By /s/ By /s/
-------------------------------------- ------------------------------
Director, Technology Development Manager, Intellectual
Property
BIOTEX,INC.
By /s/
---------------------------------------
President
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EXHIBIT I
OMISSIS
13