Exhibit 10.34



 






Exhibit 10.34




*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




PUBLIC HEALTH SERVICE




PATENT LICENSE AGREEMENT—EXCLUSIVE




COVER PAGE




For PHS internal use only:




     Patent License Application Number:




A-338-2004



     Serial Number(s) of Licensed Patent(s) and/or Patent Application(s):




Group I, to which Licensee is granted non-exclusive rights in the Licensed Fields of
Use::




a) DHHS technology ref. #E-385-1986/0: “Recombinant Pseudomonas
Exotoxin: Construction of an Active Immunotoxin with Low Side Effects” Issued as US
Patent 4,892,827;




b) DHHS technology ref. #E-135-1989/0: “Recombinant Antibody-Toxin Fusion Protein”
Issued as US Patents 6,051,405, 5,863,745, and 5,696,237; and




c) DHHS technology ref. #E-306-1987/0: “Methods for treating malignancy and
autoimmune disorders in humans” Issued as Canadian patent 1325591 and Japanese
patent 2581788;




d) DHHS technology ref. #E-306-1987/1: “Methods for treating malignancy and
autoimmune disorders in humans using Tac antibodies” Pending as U.S. Patent
application 08/478,748;




e) DHHS technology ref. #E-163-1993/0: “Recombinant Disulfide-Stabilized Polypeptide
Fragments Having Binding Specificity” Issued as US Patents 5,747,654, 6,147,203, and
6,558,672; and




Any related foreign filed national stage applications claiming priority to such
patent applications and patents listed in I (a)-(e) above.




Group II, to which Licensee is granted exclusive rights in the Licensed Fields of
Use::




a) DHHS technology ref. #E-146-1999/0: “Reduction of nonspecific animal toxicity of
immunotoxin by mutating framework repetitions of Fv to lower isoelectric point” (PCT
application PCT/US01/43602) Pending as U.S. Patent Application 10/416,129;




b) DHHS technology ref. #E-216-2000/2: “Pegylation of Linkers Improves Antitumor
Activity and Reduces Toxicity of Immunoconjugates” (PCT application PCT/US01/18503,
combining 60/211,331 and 60/213,804) Pending as US patent application 10/297,337;




c) DHHS technology ref. #E-129-2001/0: “Mutated anti-CD22 antibodies with increased
affinity to CD22 expressing leukemia cells” pending as PCT application
PCT/US02/30316;




d) DHHS technology ref. #E-046-2004/0: “Mutated anti-CD22 antibodies and
immunoconjugates” Pending as US patent application number 60/525,371; and
And any related foreign filed national stage applications claiming priority to such
patent applications and patents listed in II (a)-(d) above.



     Licensee:




Genencor International, Inc. and its Affiliates



     Cooperative Research and Development Agreement (CRADA) Number (if applicable):




n/a



 









 





*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




     Additional Remarks:




none



     Public Benefit(s):




Licensee agrees, after its First Commercial Sale, to make reasonable quantities of
Licensed Product(s) or materials produced through the use of Licensed Process(es)
available on a compassionate use basis to patients in the United States, either
through the patient’s physician(s) and/or the medical center treating the patient.
PHS agrees that the such a commitment by Licensee shall not create an undue
commercial burden upon Licensee, i.e., delay and/or materially affect the commercial
development of the Licensed Product(s) or Licensed Process(es); and




Licensee agrees, after its First Commercial Sale and as part of its marketing and
product promotion, to develop written educational materials (e.g., brochures,
advertisements, etc.) directed to patients and physicians in the United States
detailing the Licensed Product(s) and/or medical aspects of using the Licensed
Product(s).



This Patent License Agreement, hereinafter referred to as the “Agreement", consists of this Cover
Page, an attached Agreement, a Signature Page, Appendix A (List of Patent(s) and/or Patent
Application(s)), Appendix B (Fields of Use and Territory), Appendix C (Royalties), Appendix D
(Modifications), Appendix E (Benchmarks), and Appendix F (Commercial Development Plan). The
Parties to this Agreement are:





	 	1)  	The National Institutes of Health (“NIH”), the Centers for Disease
Control and Prevention (“CDC”), or the Food and Drug Administration (“FDA”),
hereinafter singly or collectively referred to as “PHS”, agencies of the United
States Public Health Service within the Department of Health and Human Services
(“DHHS”); and
	 
	 	2)  	The person, corporation, or institution identified above and/or on the
Signature Page, having offices at the address indicated on the Signature Page,
hereinafter referred to as “Licensee”.




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




PHS PATENT LICENSE AGREEMENT—EXCLUSIVE




PHS and Licensee (collectively referred to herein as the “Parties”) agree as follows:





	1.	BACKGROUND






	 	1.01  	In the course of conducting biomedical and behavioral research, PHS
investigators made inventions that relate to certain therapeutic compounds and
processes useful in the treatment of cancer and that may have commercial applicability.
	 
	 	1.02  	PHS represents that by assignment of rights from PHS employees and other
inventors, DHHS, on behalf of the United States Government, owns intellectual property
rights claimed in any United States and/or foreign patent applications or patents
corresponding to the assigned inventions. DHHS also owns any tangible embodiments of
these inventions actually reduced to practice by PHS.
	 
	 	1.03  	PHS further represents that the Secretary of DHHS has delegated to PHS the
authority to enter into this Agreement for the licensing of rights to these inventions
and that PHS has the right to grant the licenses provided herein and to perform such
other obligations as are provided in this Agreement.
	 
	 	1.04  	PHS desires to transfer these inventions to the private sector through
commercialization licenses to facilitate the commercial development of products and
processes for public use and benefit.
	 
	 	1.05  	Licensee desires to acquire commercialization rights to certain of these
inventions in order to develop processes, methods, and/or marketable products for
public use and benefit and has submitted a license application for review by PHS
outlining Licensee’s capabilities and commercial expectations for the assigned
inventions.
	 
	 	1.06  	Licensee and PHS have entered into simultaneously herewith a collaborative
research and development agreement (“CRADA”) entitled “Development of Anti-CD22
Immunotoxins, BL22 and HA22, as Therapeutic Agents” (CRADA No. 1975) and related to the
technology licensed under this Agreement. By virtue of the CRADA and this Agreement,
the Parties intend to vest in Licensee a license in rights owned and/or controlled by
PHS that are relevant and/or necessary to the treatment of cancer with therapeutic and
diagnostic compounds related to BL-22 and other CD-22 binding therapeutics developed by
the National Cancer Institute, as defined in the Licensed Field of Use.






	2.	DEFINITIONS






	 	2.01  	“Affiliates” means any corporation or business entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under
common control with Licensee. For the purposes of this definition, “control” shall mean
the possession, direct or indirect, of the power to cause the direction of the
management and policies of then corporation or business entity, whether through
ownership of fifty percent (50%) or more of the voting securities of such corporation
or business entity, by contract or otherwise.
	 
	 	   	“Benchmarks” mean the performance milestones that are set forth in Appendix E.
	 
	 	2.02  	“Commercial Development Plan” means the written commercialization plan attached
as Appendix F.




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	2.03  	“Expanded Access” shall mean any procedures, such as compassionate use,
parallel track, and treatment protocols that distribute drugs to patients who are
failing on currently available treatments for their condition and also are unable to
participate in ongoing clinical trials.
	 
	 	2.04  	“First Commercial Sale” means the initial transfer after FDA approval, by or on
behalf of Licensee or its sublicensees of Licensed Products to a Third Party in an
arms-length transaction or the initial practice after FDA approval, of a Licensed
Process by or on behalf of Licensee or its sublicensees to manufacture Licensed
Products in exchange for cash or some equivalent to which value can be assigned for the
purpose of determining Net Sales.
	 
	 	2.05  	“Government” means the Federal Government of the United States of America.
	 
	 	2.06  	“Licensed Fields of Use” means the fields of use identified in Appendix B.
	 
	 	2.07  	“Licensed Patent Rights” shall mean:






	 	a)  	Patent applications (including provisional
patent applications and PCT patent applications) and/or patents
listed in Appendix A, all divisions and continuations of these
applications, all patents issuing from such applications,
divisions, and continuations, and any reissues, reexaminations,
extensions of all such patents, and all foreign counterparts
thereof; and
	 
	 	b)  	to the extent that the following contain one or
more claims required for or commercially desirable for the
practice of the invention or inventions disclosed in a) above:
i) continuations-in-part of a) above; ii) all divisions and
continuations of these continuations-in-part; iii) all patents
issuing from such continuations-in-part, divisions, and
continuations; iv) priority patent application(s) of a) above;
v) any reissues, reexaminations, and extensions of all such
patents; and vi) all foreign equivalents corresponding to any
of the applications and/or patents recited in this paragraph
2.07(b).






A patent application or patent shall not fall into subsection (b) above and
shall not be a Licensed Patent Right merely due to the fact that such patent
or patent application claims priority to an application or patent falling
under subsection (a) above, and shall not include (b) above to the extent
that they contain one or more claims directed to new matter which is not the
subject matter disclosed in (a) above.




	 	2.08  	“Licensed Process(es)” means (a) processes which, in the course of being
practiced, would be within the scope of one or more Valid Claims of the Licensed Patent
Rights, or (b) where the manufacture, use, sale, or importation of products produced
practicing such processes would be within the scope of one or more Valid Claims of the
Licensed Patent Rights.
	 
	 	2.09  	“Licensed Product(s)” means tangible materials which, in the course of
manufacture, use, sale, or importation thereof, would be within the scope of one or
more Valid Claims of the Licensed Patent Rights.
	 
	 	2.10  	“Licensed Territory” means the geographical area identified in Appendix B.
	 
	 	2.11  	“Net Sales” means the total gross receipts for sales of Licensed Products or
practice of Licensed Processes by or on behalf of Licensee or its sublicensees, and
from leasing, renting, or otherwise making Licensed Products available to Third Parties
without sale or other dispositions, whether




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	   	invoiced or not, less; trade, quantity and cash discounts and other reasonable
rebates actually allowed; product returns, recalls, credits and allowances; packing
costs, insurance costs, freight out, and taxes; excise and/or sales taxes, tariffs,
duties, value added taxes or other governmental charges (other than income taxes)
imposed and actually paid in connection with the production, importation, sale,
delivery or use of Licensed Products or the practice of the Licensed Processes, and
wholesaler and cash discounts in amounts customary in the trade to the extent
actually granted. No deductions shall be made for commissions paid to individuals,
whether they be with independent sales agencies or regularly employed by Licensee,
or sublicensees, and on its payroll, or for the cost of collections.
	 
	 	   	Only sales of Licensed Products or practice of Licensed Processes to persons and
entities other than Licensee and /or its Affiliates and/or sublicensees are to be
included in Net Sales. Sales of Licensed Product or practice of Licensed Processes
between Affiliates, Affiliates and Licensee and/or sublicensees and Licensee are not
to be included within Net Sales unless such Affiliate or sublicensee is the end user
of the Licensed Product or Licensed Process and further provided that subsequent
sales from such Affiliates or sublicensees to a non-affiliated Third Party shall be
included within Net Sales.
	 
	 	2.12  	“Pivotal Trial” shall mean a controlled study in humans of the efficacy and
safety of a Licensed Product which is prospectively designed to demonstrate
statistically whether such Licensed Product is effective and safe for use in a
particular indication in a manner sufficient to obtain regulatory approval to market
such Licensed Product. (i.e. Phase III or Phase II/III)
	 
	 	2.13  	“Practical Application” means to manufacture in the case of a composition or
product, to practice in the case of a process or method, or to operate in the case of a
machine or system; and in each case, under such conditions as to establish that the
invention is being utilized and that its benefits are to the extent permitted by law or
Government regulations available to the public on reasonable terms. “Practical
Application” shall be achieved if Licensee [ *** ] and [ *** ], including any
[ *** ] under this Agreement.
	 
	 	2.14  	“Research License” means a nontransferable, nonexclusive license to make and to
use the Licensed Products or Licensed Processes as defined by the Licensed Patent
Rights for purposes of research and not for purposes of commercial manufacture or
distribution or in lieu of purchase.
	 
	 	2.15  	“Third Party” means any entity not a Party or an Affiliate.
	 
	 	2.16  	“Valid Claim” means a pending or granted, unexpired claim of a Licensed Patent
Right that has not been held to be invalid or unenforceable by an unappealed or
unappealable judgment of a court of competent jurisdiction.






	3.  	GRANT OF RIGHTS






	 	3.01  	PHS hereby grants and Licensee accepts, subject to the terms and conditions of
this Agreement, an exclusive license under the Group II Licensed Patent Rights in the
Licensed Territory to make and have made, to use and have used, to sell and have sold,
to offer to sell, and to import any Licensed Products in the Licensed Fields of Use and
to practice and have practiced any Licensed Processes in the Licensed Fields of Use.
	 
	 	3.02  	PHS hereby grants and Licensee accepts, subject to the terms and conditions of
this Agreement, a non-exclusive license under the Group I Licensed Patent Rights in the
Licensed Territory to make and have made, to use and have used, to sell and have sold,
to offer to sell, and to import any Licensed Products in the Licensed Fields of Use and
to practice and have practiced any Licensed Processes in the Licensed Fields of Use.




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	3.03  	This Agreement confers no license or rights by implication, estoppel, or
otherwise under any patent applications or patents of PHS other than Licensed Patent
Rights regardless of whether such patents are dominant or subordinate to Licensed
Patent Rights.






	4.  	SUBLICENSING






	 	4.01  	Upon written approval by PHS, which approval will not be unreasonably withheld,
Licensee may enter into sublicensing agreements under the Licensed Patent Rights. In
the event that PHS does not provide a written objection to Licensee within thirty (30)
days of receiving written notice under the preceding sentence, PHS shall be deemed to
have given its approval to the sublicense arrangement described in the notice.
	 
	 	4.02  	Licensee shall notify PHS regarding such sublicenses and agrees that any
sublicenses granted by it shall provide that the obligations to PHS of Paragraphs
5.01-5.04, 8.01, 12.05, and 13.07-13.09 of this Agreement shall be binding upon the
sublicensee as if it were a party to this Agreement. Licensee further agrees to attach
copies of these Paragraphs to all sublicense agreements. For the purposes of clarity,
it is understood that the efforts of a sublicensee shall be considered the efforts of
Licensee, including adherence to the Benchmarks contained in this Agreement, and
substantial adherence to the Commercial Development Plan contained in this Agreement,
including any modifications thereto under this Agreement.
	 
	 	4.03  	Any sublicenses granted by Licensee shall provide for the termination of the
sublicense, or the conversion to a license directly between such sublicensees and PHS
upon termination of this Agreement under Article 13. Such conversion is subject to PHS
approval and contingent upon acceptance by the sublicensee of the remaining provisions
of this Agreement.
	 
	 	4.04  	Licensee agrees to forward to PHS a copy of each fully executed sublicense
agreement postmarked within thirty (30) days of the execution of such agreement. To
the extent permitted by law, PHS agrees to maintain each such sublicense agreement in
confidence.






	5.  	STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS






	 	5.01  	PHS reserves on behalf of the Government an irrevocable, nonexclusive,
nontransferable, royalty-free license for the practice of all inventions licensed under
the Licensed Patent Rights throughout the world by or on behalf of the Government and
on behalf of any foreign government or international organization pursuant to any
existing or future treaty or agreement to which the Government is a signatory. Any
obligations of Licensee to provide PHS quantities of Licensed Products or materials
made through the Licensed Processes for PHS research use shall be governed by the
CRADA. In the event that PHS desires to obtain Licensed Products or materials made
through Licensed Processes for purposes outside of the CRADA or after its termination
or expiration, PHS may request from Licensee reasonable quantities thereof and Licensee
will honor such requests to the extent commercially reasonable, provided that PHS shall
reimburse Licensee for the cost of such materials. Any provision of materials to PHS
by Licensee under this Agreement will be within Licensee’s discretion.
	 
	 	5.02  	Licensee agrees that products used or sold in the United States embodying
Licensed Products or produced through use of Licensed Processes shall be manufactured
substantially in the United States, unless a written waiver is obtained in advance from
PHS.
	 
	 	5.03  	Licensee acknowledges that PHS may enter into future Cooperative Research and
Development Agreements (CRADAs) with Third Parties under the Federal Technology
Transfer Act of 1986 that relate to the subject matter of this Agreement. Licensee
agrees not to unreasonably deny requests for a Research License in the Licensed Field
of Use under the Licensed Patent Rights from such future collaborators with PHS when
acquiring such rights is necessary in order to make




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	   	a Cooperative Research and Development Agreement (CRADA) project feasible. Licensee
may request an opportunity to join as a party to the proposed Cooperative Research
and Development Agreement (“Third Party CRADA”).
	 
	 	5.04  	In addition to the reserved license of Paragraph 5.01 above, PHS reserves the
right to grant nonexclusive Research Licenses directly or to require Licensee to grant
nonexclusive Research Licenses on reasonable terms. The purpose of this Research
License is to encourage basic research, whether conducted at an academic or corporate
facility. In order to safeguard the Licensed Patent Rights, however, PHS shall consult
with Licensee before granting to commercial entities a Research License or providing to
them research samples of materials made through the Licensed Processes. In no event
will PHS provide [ *** ] that are [ *** ] or [ *** ] to [ *** ].






	6.  	ROYALTIES AND REIMBURSEMENT






	 	6.01  	Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue
royalty as set forth in Appendix C within thirty (30) days from the date that this
Agreement becomes effective.
	 
	 	6.02  	Licensee agrees to pay to PHS a nonrefundable minimum annual royalty as set
forth in Appendix C. The minimum annual royalty is due and payable on January 1 of
each calendar year and may be credited against any earned royalties due for sales made
in that year. The minimum annual royalty due for the first calendar year of this
Agreement shall be prorated according to the fraction of the calendar year remaining
between the effective date of this Agreement and the next subsequent January 1.
	 
	 	6.03  	Licensee agrees to pay PHS earned royalties as set forth in Appendix C.
	 
	 	6.04  	Licensee agrees to pay PHS benchmark royalties as set forth in Appendix C.
	 
	 	6.05  	Licensee agrees to pay PHS sublicensing royalties as set forth in Appendix C.
	 
	 	6.06  	A patent or patent application licensed under this Agreement shall cease to
fall within the Licensed Patent Rights for the purpose of computing earned royalty
payments in any given country on the earliest of the dates that a) the application has
been abandoned and not continued, b) the patent expires or irrevocably lapses, or c)
such that no Valid Claim remains, d) the claim has been irrevocably abandoned or
disallowed or e) the claim has failed to issue within five (5) years of the first
office action from the patent office of that country, provided that such claim
subsequently issues as a claim within an issued patent, such claim shall be restored to
the Licensed Patent Rights, and then shall again be used to compute earned royalty
payments for the given country.
	 
	 	6.07  	No multiple royalties shall be payable because any Licensed Products or
Licensed Processes are covered by more than one of any of the Licensed Patent Rights
and/or patent rights licensed under the CRADA.
	 
	 	6.08  	On sales of Licensed Products made in other than an arm’s-length transaction,
the value of the Net Sales attributed under this Article 6 to such a transaction shall
be that which would have been received in an arm’s-length transaction, based on sales
of like quantity and quality products on or about the time of such transaction.
	 
	 	6.09  	With regard to expenses associated with the preparation, filing, prosecution,
and maintenance of all patent applications and patents included within the Licensed
Patent Rights incurred by PHS on or after the effective date of this Agreement,
Licensee shall [ *** ] of such expenses




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	   	directly to the law firm employed by PHS to handle such functions upon receipt by
Licensee of an invoice from such law firm. However, in such event, [ *** ].
	 
	 	6.10  	Licensee may elect to surrender its rights in any country of the Licensed
Territory under any Licensed Patent Rights upon thirty (30) days written notice to PHS
and owe no payment obligation under Article 6.10 for patent-related expenses incurred
in that country after thirty (30) days of the effective date of such written notice.
	 
	 	6.11  	If Licensee or sublicensee is required to pay a third party earned royalties
with respect to a Licensed Product(s) and/or Licensed Process(es) under agreements for
patent rights or other technologies which Licensee or sublicensee, in its reasonable
judgment, determines are necessary or desirable to license or acquire with respect to
such Licensed Product, and the total royalties due to such third parties [ *** ],
Licensee may [ *** ] such earned royalties owed to such third parties by [ *** ] due to
said third parties (prior to any reductions) from the payments owing to PHS for such
Licensed Product under this Article 6. Notwithstanding the foregoing provisions of
this Paragraph 6.11, in no event shall the earned royalties due to PHS be [ *** ].






	7.  	PATENT FILING, PROSECUTION, AND MAINTENANCE






	 	7.01  	Except as otherwise provided in this Article 7, PHS agrees to take
responsibility for, but to consult with, the Licensee in the preparation, filing,
prosecution, and maintenance of any and all patent applications or patents included in
the Licensed Patent Rights and shall furnish copies of relevant patent-related
documents to Licensee.
	 
	 	7.02  	Upon PHS’s written request, Licensee shall assume the responsibility for the
preparation, filing, prosecution, and maintenance of any and all patent applications or
patents included in the Licensed Patent Rights and shall on an ongoing basis promptly
furnish copies of all patent-related documents to PHS. In such event, Licensee shall,
subject to the prior approval of PHS, select registered patent attorneys or patent
agents to provide such services on behalf of Licensee and PHS. PHS shall provide
appropriate powers of attorney and other documents necessary to undertake such actions
to the patent attorneys or patent agents providing such services. Licensee and its
attorneys or agents shall consult with PHS in all aspects of the preparation, filing,
prosecution and maintenance of patent applications and patents included within the
Licensed Patent Rights and shall provide PHS sufficient opportunity to comment on any
document that Licensee intends to file or to cause to be filed with the relevant
intellectual property or patent office. Licensee shall be responsible for costs
associated with transferring patent prosecution responsibilities to an attorney or
agent of Licensee’s choice. Notwithstanding the above, in the event that PHS licenses
the Licensed Patent Rights to one or more Third Parties in outside the Licensed Fields
of Use, Licensee shall be responsible for a pro-rata share, based on the total number
of licensees under the Licensed Patent Rights, of the costs associated with
preparation, filing, prosecution and maintenance of each relevant patent or patent
application licensed to such Third Party.
	 
	 	7.03  	For Licensed Patent Rights to which Licensee has assumed responsibility for the
preparation, filing, prosecution and maintenance thereof, at any time, PHS may provide
Licensee with written notice that PHS wishes to reassume control of the preparation,
filing, prosecution, and maintenance of such Licensed Patent Rights. If PHS elects to
reassume such responsibilities, Licensee agrees to cooperate fully with PHS, its
attorneys, and agents in the preparation, filing, prosecution, and maintenance of any
and all patent applications or patents included in the Licensed Patent Rights and to
provide PHS with complete copies of documents or other materials necessary to undertake
such responsibilities. PHS shall be responsible for all costs associated with
transferring patent prosecution responsibilities to an attorney or
agent of PHS’s
choice.




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	7.04  	Each party shall promptly inform the other as to all matters that come to its
attention that may affect the preparation, filing, prosecution, or maintenance of the
Licensed Patent Rights and shall permit each other to provide comments and suggestions
with respect to the preparation, filing, prosecution, and maintenance of Licensed
Patent Rights, which comments and suggestions shall be considered by the other party.






	8.  	RECORD KEEPING






	 	8.01  	Licensee agrees to keep accurate and correct records of Licensed Products made,
used, sold, or imported and Licensed Processes practiced by Licensee under this
Agreement. Such records shall be appropriate to determine the amount of royalties due
PHS and shall be retained for at least five (5) years following a given reporting
period. Licensee shall make such records available pursuant to Paragraph 8.02.
	 
	 	8.02  	Licensee agrees to have an audit of sales and royalties conducted by an
independent auditor upon reasonable request of PHS, but not more then once per year.
The independent auditor shall be selected by PHS for the sole purpose of verifying
reports and confirming the accuracy of payments due hereunder. The audit shall occur
during normal business hours at a site selected by Licensee. The audit shall address,
at a minimum, the amount of gross sales by or on behalf of Licensee during the audit
period, terms of the license as to percentage or fixed royalty to be remitted to the
Government, the amount of royalty funds owed to the Government under this Agreement,
and whether the royalty amount owed has been paid to the Government and is reflected in
the records of the Licensee. The audit shall also indicate the PHS license number,
product, and the time period being audited. A report certified by the auditor shall be
submitted promptly by the auditor directly to PHS and the Licensee on completion, which
report shall be considered confidential information of Licensee. The accountant or
auditor shall only disclose to PHS information relating to the accuracy of reports and
payments made under this Agreement. If an inspection shows an underreporting or
underpayment in excess of five percent (5%) for any twelve (12) month period, then
Licensee shall reimburse PHS for the cost of the inspection at the time Licensee pays
the unreported royalties, including any late charges as required by Paragraph 9.08 of
this Agreement. All payments required under this Paragraph shall be due within thirty
(30) days of the date PHS provides Licensee with written notice of the payment due.






	9.  	REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS






	 	9.01  	Prior to signing this Agreement, Licensee has provided to PHS the Commercial
Development Plan at Appendix F, under which Licensee intends to bring the subject
matter of the Licensed Patent Rights to the point of Practical Application. The
Commercial Development Plan is hereby incorporated by reference into this Agreement.
Performance and Benchmarks are determined as specified in Appendix E.
	 
	 	9.02  	Licensee shall provide written annual reports on its product development
progress or efforts to commercialize under the Commercial Development Plan for each of
the Licensed Fields of Use within sixty (60) days after December 31 of each calendar
year. These progress reports shall include a description of progress towards
milestones and goals outlined in the Commercial Development Plan in such detail as to
permit PHS to make a reasonable assessment of whether the goals of the Commercial
Development Plan are being met.. PHS encourages Licensee to include in these reports
information on any of Licensee’s public service activities that relate to the Licensed
Patent Rights. If reported progress differs from that projected in the Benchmarks or
in any substantial manner from that projected in the Commercial Development Plan,
Licensee shall explain the reasons for such differences. In any such annual report,
Licensee may propose amendments to the Commercial Development Plan, acceptance of which
by PHS may not be denied unreasonably. Licensee agrees to provide any additional
information necessary for PHS to evaluate Licensee’s performance of its obligations as
specified in this Agreement. Licensee may




 









 









*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	   	amend the Benchmarks at any time upon written consent by PHS. PHS shall not
unreasonably withhold approval of any request of Licensee to extend the time periods
of this schedule if such request is supported by a reasonable showing by Licensee of
diligence in its performance under the Commercial Development Plan and toward
bringing the Licensed Products to the point of Practical Application as defined in
37 CFR 404.3(d). Licensee shall amend the Commercial Development Plan and
Benchmarks at the request of PHS to address any Licensed Fields of Use not
specifically addressed in the plan originally submitted.
	 
	 	9.03  	Licensee shall report to PHS the dates for achieving Benchmarks specified in
Appendix E and the First Commercial Sale in each country in the Licensed Territory
within thirty (30) days of such occurrences.
	 
	 	9.04  	Licensee shall submit to PHS within sixty (60) days after each calendar year
ending December 31 a royalty report setting forth for the preceding one year period the
Net Sales and the amount of royalty accordingly due. With each such royalty report,
Licensee shall submit payment of the earned royalties due. If no earned royalties are
due to PHS for any reporting period, the written report shall so state. The royalty
report shall be certified as correct by an authorized officer of Licensee and shall
include a detailed listing of all deductions made under Paragraph 2.10 to determine Net
Sales made under Article 6 to determine royalties due.
	 
	 	9.05  	Licensee agrees to forward annually to PHS a copy of such reports received by
Licensee from its sublicensees during the preceding one year period as shall be
pertinent to a royalty accounting to PHS by Licensee for activities under the
sublicense.
	 
	 	9.06  	Royalties due under Article 6 shall be paid in U.S. dollars. For conversion of
foreign currency to U.S. dollars, the conversion rate shall be the average of the
exchange rate included in the calendar half-year period, as quoted in the The Wall
Street Journal, Eastern Edition. All checks and bank drafts shall be drawn on United
States banks and shall be payable, as appropriate, to “NIH/Patent Licensing.” All such
payments shall be sent to the following address: NIH, P.O. Box 360120, Pittsburgh, PA
15251-6120. Any loss of exchange, value, taxes, or other expenses incurred in the
transfer or conversion to U.S. dollars shall be paid entirely by Licensee. The royalty
report required by Paragraph 9.04 of this Agreement shall accompany each such payment,
and a copy of such report shall also be mailed to PHS at its address for notices
indicated on the Signature Page of this Agreement.
	 
	 	9.07  	Licensee shall be solely responsible for determining if any tax on royalty
income is owed outside the United States and shall pay any such tax and be responsible
for all filings with appropriate agencies of foreign governments.
	 
	 	9.08  	Interest and penalties may be assessed by PHS on any overdue payments in
accordance with the Federal Debt Collection Act. The payment of such late charges
shall not prevent PHS from exercising any other rights it may have as a consequence of
the lateness of any payment.
	 
	 	9.09  	All plans and reports required by this Article 9 and marked “confidential” by
Licensee shall, to the extent permitted by law, be treated by PHS as commercial and
financial information obtained from a person and as privileged and confidential, and
any proposed disclosure of such records by the PHS under the Freedom of Information Act
(FOIA), 5 U.S.C. ’ 552 shall be subject to the predisclosure notification
requirements of 45 CFR ’ 5.65(d).






	10.  	PERFORMANCE






	 	10.01  	Licensee shall use its reasonable best efforts to bring the Licensed Products
and Licensed Processes to Practical Application. “Reasonable best efforts” for the
purposes of this provision shall be satisfied if Licensee adheres to the Benchmarks at
Appendix E and substantially adheres




 









 






*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




	 	   	to the Commercial Development Plan at Appendix F. The efforts of a sublicensee
shall be considered the efforts of Licensee.
	 
	 	10.02  	Upon the First Commercial Sale, until the expiration of this Agreement,
Licensee shall use its reasonable best efforts to make Licensed Products and Licensed
Processes reasonably accessible to the United States public.
	 
	 	10.03  	Licensee agrees, after its First Commercial Sale, to make reasonable
quantities of Licensed Product(s) or materials produced through the use of Licensed
Process(es) available on an Expanded Access use basis to patients in the United
States, either through the patient’s physician(s) and/or the medical center treating
the patient. PHS agrees that the such a commitment by Licensee shall not create an
undue commercial burden upon Licensee, i.e., delay and/or materially affect the
commercial development of the Licensed Product(s) or Licensed
Process(es). The retail
value of the drug provided for free or at a discount through the Expanded Access
program will not exceed [ *** ]. Licensee will not be required to pay any royalty
under this Agreement with respect to any Licensed
Products or materials used in
Licensed Processes that are distributed through an Expanded
Access program.
	 
	 	10.04  	Licensee agrees, after its First Commercial Sale and as part of its marketing
and product promotion, to develop written educational materials (e.g., brochures,
advertisements, etc.) directed to patients and physicians in the United States
detailing the Licensed Product(s) and/or medical aspects of using the Licensed
Product(s).






	11.  	INFRINGEMENT AND PATENT ENFORCEMENT






	 	11.01  	PHS and Licensee agree to notify each other promptly of each known
infringement or possible infringement of the Licensed Patent Rights, as well as any
facts which may affect the validity, scope, or enforceability of the Licensed Patent
Rights of which either Party becomes aware.
	 
	 	11.02  	Pursuant to this Agreement and the provisions of Chapter 29 of title 35,
United States Code, Licensee may: a) bring suit in its own name, at its own expense,
and on its own behalf for infringement of the Licensed Patent Rights in the Licensed
Field of Use; b) in any such suit, enjoin infringement and collect for its use,
damages, profits, and awards of whatever nature recoverable pursuant to such suit; and
c) settle any claim or suit for infringement of the Licensed Patent Rights in the
Licensed Field of Use; provided, however, that PHS and appropriate Government
authorities shall have the first right to take such actions. If Licensee desires to
initiate a suit for patent infringement, Licensee shall notify PHS in writing. If PHS
does not notify Licensee of its intent to pursue legal action within ninety (90) days
of such notice, Licensee will be free to initiate suit. PHS shall have a continuing
right to intervene in such suit. Licensee shall take no action to compel the
Government either to initiate or to join in any such suit for patent infringement.
Licensee may request the Government to initiate or join in any such suit if necessary
to avoid dismissal of the suit. Should the Government be made a party to any such suit
pursuant to Licensee’s request or motion, Licensee shall reimburse the Government for
any costs, expenses, or fees which the Government incurs as a result of such motion,
including any and all costs incurred by the Government in opposing any such motion,
provided that Licensee shall have no further obligation to reimburse PHS or the
Government for participation in such action. In all cases, Licensee agrees to keep PHS
reasonably apprised of the status and progress of any litigation in which it is
involved regarding the Licensed Patent Rights. Before Licensee commences an
infringement action, Licensee shall notify PHS and give careful consideration to the
views of PHS and to any potential effects of the litigation on the public health in
deciding whether to bring suit.
	 
	 	11.03  	In the event that a declaratory judgment action alleging invalidity or
non-infringement of any of the Licensed Patent Rights shall be brought against Licensee
or raised by way of counterclaim or affirmative defense in an infringement suit brought
by Licensee, PHS or the Government under Paragraph 11.02, pursuant to this Agreement
and the provisions of Chapter 29 of Title 35, United




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	   	States Code or other statutes, Licensee may: a) defend the suit in its own name, at
its own expense, and on its own behalf; b) in any such suit, seek to file any
appropriate counterclaim, including to enjoin infringement and to collect for its
use, damages, profits, and awards of whatever nature pursuant to such suit; and c)
settle any claim or suit for declaratory judgment involving the Licensed Patent
Rights; provided, however, that PHS and appropriate Government authorities shall
have the first right to take such actions and shall have a continuing right to
intervene in such suit. If PHS does not notify Licensee of its intent to respond to
the legal action within ninety (90) days or such shorter time as may be set for
response by the tribunal adjudicating such action, Licensee will be free to do so.
Licensee shall take no action to compel the Government either to initiate or to join
in any such declaratory judgment action. Licensee may request the Government to
initiate or to join any such suit if necessary to avoid dismissal of the suit.
Should the Government be made a party to any such suit by motion or any other action
of Licensee, Licensee shall reimburse the Government for any costs, expenses, or
fees which the Government incurs as a result of such motion or other action,
provided that Licensee shall have no further obligation to reimburse PHS or the
Government for participation in such action. If Licensee elects not to defend
against such declaratory judgment action, PHS, at its option, may do so at its own
expense. In all cases, Licensee agrees to keep PHS reasonably apprised of the
status and progress of any litigation. Before Licensee commences an infringement
action, Licensee shall notify PHS and give careful consideration to the views of PHS
and to any potential effects of the litigation on the public health in deciding
whether to bring suit.
	 
	 	11.04  	In any action taken by Licensee under Paragraphs 11.02 or 11.03, the expenses
including costs, fees, attorney fees, and disbursements, shall be paid by Licensee.
The value of any recovery made by Licensee through court judgment or settlement, less
applicable legal fees, shall be treated as Net Sales and subject to earned royalties.
	 
	 	11.05  	PHS shall cooperate fully with Licensee in connection with any action under
Paragraphs 11.02 or 11.03. PHS agrees promptly to provide access to all necessary
documents and to render reasonable assistance in response to a request by Licensee.






	12.  	NEGATION OF WARRANTIES AND INDEMNIFICATION






	 	12.01  	PHS offers no warranties other than those specified in Article 1.
	 
	 	12.02  	PHS does not warrant the validity of the Licensed Patent Rights and makes no
representations whatsoever with regard to the scope of the Licensed Patent Rights, or
that the Licensed Patent Rights may be exploited without infringing other patents or
other intellectual property rights of third parties.
	 
	 	12.03  	PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED
PATENT RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.
	 
	 	12.04  	PHS does not represent that it will commence legal actions against third
parties infringing the Licensed Patent Rights.
	 
	 	12.05  	[ *** ] shall indemnify and hold [ *** ] harmless from and against all
liability, demands, damages, expenses, and losses, including but not limited to death,
personal injury, illness, or property damage in connection with or arising out of: a)
the [ *** ]; or b) the [ *** ]. [ *** ] agrees to maintain a [ *** ] consistent with [
*** ]. The indemnification in this paragraph shall not extend to [ *** ].




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	13.  	TERM, TERMINATION, AND MODIFICATION OF RIGHTS






	 	13.01  	This Agreement is effective when signed by all parties and shall extend to the
expiration of the last to expire of the Licensed Patent Rights unless sooner terminated
as provided in this Article 13.
	 
	 	13.02  	In the event that Licensee is in default in the performance of any material
obligations under this Agreement, including but not limited to the obligations listed
in Article 13.05, and if the default has not been remedied within ninety (90) days
after the date of notice in writing of such default, PHS may terminate this Agreement
in whole or in part by written notice and pursue outstanding amounts owed through
procedures provided by the Federal Debt Collection Act.
	 
	 	13.03  	In the event that Licensee becomes insolvent, files a petition in bankruptcy,
has such a petition filed against it, or receives notice of a third party’s intention
to file an involuntary petition in bankruptcy, Licensee shall immediately notify PHS in
writing. Furthermore, PHS shall have the right to terminate this Agreement immediately
upon Licensee‘s receipt of written notice.
	 
	 	13.04  	Licensee shall have a unilateral right to terminate this Agreement and/or any
licenses in any country or territory by giving PHS sixty (60) days written notice to
that effect.
	 
	 	13.05  	PHS shall specifically have the right to terminate or modify, at its option,
this Agreement, if PHS determines in good faith that the Licensee: 1) is not [ *** ]
executing the Commercial Development Plan submitted with its request for a license, as
modified pursuant to Paragraph 9.02, and the Licensee cannot otherwise demonstrate to
PHS‘s satisfaction that the Licensee has taken, or can be expected to take within a
reasonable time, effective steps to achieve Practical Application of the Licensed
Products or Licensed Processes; 2) has not achieved the Benchmarks as may be modified
under Paragraph 9.02 or Article 10; 3) is not keeping Licensed Products or Licensed
Processes reasonably available, in accordance with the Commercial Development Plan, as
modified pursuant to Paragraph 9.02, to the public after First Commercial Sale; 4) has
not reasonably satisfied, and is not capable of reasonably satisfying, significant
unmet health and safety needs identified in the Commercial Development Plan, as
modified pursuant to Paragraph 9.02 or 5) cannot reasonably justify a failure to comply
with the domestic production requirement of Paragraph 5.02 unless waived. PHS shall
specifically have the right to terminate or modify, at its option, this Agreement, if
PHS determines in good faith that the Licensee: 1) has willfully made a false statement
of, or willfully omitted, a fact that PHS can establish was material to their decision
to grant or maintain the license provided herein, either in the license application or
in any report required by the license Agreement; or 2) has committed a material breach
of a covenant or agreement contained in the license that is not remedied within ninety
(90) days after the date of notice of such default; . In making any determination
under this Paragraph 13.05, PHS will take into account the normal course of such
commercial development programs conducted with sound and reasonable business practices
and judgment, the annual reports submitted by Licensee and modifications, if any, under
Paragraph 9.02 and discussions between the Parties regarding modifications of
Benchmarks and/or the Commercial Development Plan as provided for in Paragraph 9.02.
Prior to invoking this right, PHS shall give written notice to Licensee providing
Licensee specific notice of, and a ninety (90) day opportunity to respond to, PHS‘s
concerns . If Licensee fails to alleviate PHS‘s concerns ) or fails to initiate
corrective action to PHS‘s satisfaction, PHS may terminate this Agreement, in whole or
in part at its sole option.
	 
	 	13.06  	When the public health and safety so require, and after written notice to
Licensee providing Licensee a sixty (60) day opportunity to respond, PHS shall have the
right to require Licensee to grant sublicenses to responsible applicants, on reasonable
terms, in any Licensed Fields of Use under the Licensed Patent Rights, unless Licensee
can reasonably demonstrate that the granting of the sublicense would not materially
increase the availability to the public of the subject matter




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	  	of the Licensed Patent Rights. PHS will not require the granting of a sublicense
unless the responsible applicant has first negotiated in good faith with Licensee.
	 
	 	13.07  	PHS reserves the right according to 35 U.S.C. ' 209(d)(3) to terminate
or modify this Agreement if it is determined that such action is necessary to meet
requirements for public use specified by federal regulations issued after the date of
the license and such requirements are not reasonably satisfied by Licensee.
	 
	 	13.08  	Within thirty (30) days of receipt of written notice of PHS‘s unilateral
decision to modify or terminate this Agreement, Licensee may, consistent with the
provisions of 37 CFR 404.11, appeal the decision by written submission to the
designated PHS official. The decision of the designated PHS official shall be the
final agency decision. Licensee may thereafter exercise any and all administrative or
judicial remedies that may be available.
	 
	 	13.09  	Within ninety (90) days of expiration or termination of this Agreement under
this Article 13, a final report shall be submitted by Licensee. Any royalty payments,
including those incurred but not yet paid (such as the full minimum annual royalty),
and those related to patent expenses, due to PHS shall become immediately due and
payable upon termination or expiration. If terminated under this Article 13,
sublicensees may elect to convert their sublicenses to direct licenses with PHS
pursuant to Paragraph 4.03. Unless otherwise specifically provided for under this
Agreement, upon termination of this Agreement, Licensee may sell or otherwise transfer
such existing inventory of Licensed Products as are covered by the Licensed Patent
Rights subject to such sales being considered Net Sales hereunder and subject to
payment of the applicable royalty hereunder, within ninety (90) days of termination of
this Agreement. Upon expiration, Licensee shall have no further obligations to PHS
under this Agreement.
	 
	 	13.10  	In the event that Licensee fails to meet a Benchmark for either BL22 or HA22
but continues to meet Benchmarks for the other of said BL22 or HA22, PHS agrees that
such failure will result only in a right to terminate the Agreement under Paragraph
13.05 with respect to the product for which a Benchmark is not achieved and not to the
entirety of the Licensed Field of Use.






	14.  	GENERAL PROVISIONS






	 	14.01  	Neither Party may waive or release any of its rights or interests in this
Agreement except in writing. The failure of either Party to assert a right hereunder
or to insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right by that Party or excuse a similar subsequent failure
to perform any such term or condition by other Party.
	 
	 	14.02  	This Agreement constitutes the entire agreement between the Parties relating
to the subject matter of the Licensed Patent Rights, and all prior negotiations,
representations, agreements, and understandings are merged into, extinguished by, and
completely expressed by this Agreement.
	 
	 	14.03  	The provisions of this Agreement are severable, and in the event that any
provision of this Agreement shall be determined to be invalid or unenforceable under
any controlling body of law, such determination shall not in any way affect the
validity or enforceability of the remaining provisions of this Agreement.
	 
	 	14.04  	If either Party desires a modification to this Agreement, the Parties shall,
upon reasonable notice of the proposed modification by the Party desiring the change,
confer in good faith to determine the desirability of such modification. No
modification will be effective until a written amendment is signed by the signatories
to this Agreement or their designees.
	 
	 	14.05  	The construction, validity, performance, and effect of this Agreement shall be
governed by Federal law as applied by the Federal courts in the District of Columbia.




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	14.06  	All notices required or permitted by this Agreement shall be given by prepaid,
first class, registered or certified mail or by an express/overnight delivery service
provided by a commercial carrier, properly addressed to the other Party at the address
designated on the following Signature Page, or to such other address as may be
designated in writing by such other Party. Notices shall be considered timely if such
notices are received on or before the established deadline date or sent on or before
the deadline date as verifiable by U.S. Postal Service postmark or dated receipt from a
commercial carrier. Parties should request a legibly dated U.S. Postal Service
postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal
Service. Private metered postmarks shall not be acceptable as proof of timely mailing.
	 
	 	14.07  	This Agreement shall not be assigned by Licensee except: a) with the prior
written consent of PHS, such consent not to be withheld unreasonably; or b) as part of
a sale or transfer of a part of or substantially all of the business of Licensee
relating to operations which concern this Agreement, including any transfer in the form
of a sale to a third party of the right to develop or commercialize a therapeutic or
diagnostic that falls within the Agreement. Licensee shall notify PHS within ten (10)
days of any assignment of this Agreement by Licensee.
	 
	 	14.08  	Licensee agrees in its use of any PHS-supplied materials to comply with all
applicable statutes, regulations, and guidelines, including PHS and DHHS regulations
and guidelines. Licensee agrees not to use the materials provided by PHS for research
involving human subjects or clinical trials in the United States without complying with
21 CFR Part 50 and 45 CFR Part 46. Licensee agrees not to use the materials for
research involving human subjects or clinical trials outside of the United States
without notifying PHS, in writing, of such research or trials and complying with the
applicable regulations of the appropriate national control authorities. Written
notification to PHS of research involving human subjects or clinical trials outside of
the United States shall be given no later than sixty (60) days prior to commencement of
such research or trials.
	 
	 	14.09  	Licensee acknowledges that it is subject to and agrees to abide by the United
States laws and regulations (including the Export Administration Act of 1979 and Arms
Export Control Act) controlling the export of technical data, computer software,
laboratory prototypes, biological material, and other commodities. The transfer of
such items may require a license from the cognizant Agency of the U.S. Government or
written assurances by Licensee that it shall not export such items to certain foreign
countries without prior approval of such agency. PHS neither represents that a license
is or is not required or that, if required, it shall be issued.
	 
	 	14.10  	Licensee agrees to mark the Licensed Products or their packaging sold in the
United States with all applicable U.S. patent numbers and similarly to indicate “Patent
Pending” status as necessary to preserve rights to damages of PHS and/or Licensee in
enforcement actions against future infringing third parties. All Licensed Products
manufactured in, shipped to, or sold in other countries shall be marked in such a
manner as to preserve PHS patent rights in such countries.
	 
	 	14.11  	By entering into this Agreement, PHS does not directly or indirectly endorse
any product or service provided, or to be provided, by Licensee whether directly or
indirectly related to this Agreement. Licensee shall not state or imply that this
Agreement is an endorsement by the Government, PHS, any other Government organizational
unit, or any Government employee. Additionally, Licensee shall not use the names of
NIH, CDC, PHS, or DHHS or the Government or their employees in any advertising,
promotional, or sales literature without the prior written consent of PHS, except as
required for compliance with any statute, rule or regulatory or listing agency
requirement.
	 
	 	14.12  	The Parties agree to attempt to settle amicably any controversy or claim
arising under this Agreement or a breach of this Agreement, except for appeals of
modifications or termination decisions provided for in Article 13. Licensee agrees
first to appeal any such unsettled claims or




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	 	   	controversies to the designated PHS official, or designee, whose decision shall be
considered the final agency decision. Thereafter, Licensee may exercise any
administrative or judicial remedies that may be available.
	 
	 	14.13  	Nothing relating to the grant of a license, nor the grant itself, shall be
construed to confer upon any person any immunity from or defenses under the antitrust
laws or from a charge of patent misuse, and the acquisition and use of rights pursuant
to 37 CFR Part 404 shall not be immunized from the operation of state or Federal law by
reason of the source of the grant.
	 
	 	14.14  	Paragraphs 4.03, 8.01, 9.05-9.07, 12.01-12.05, 13.08, 13.09, and 14.12 of this
Agreement shall survive termination of this Agreement.





SIGNATURES BEGIN ON NEXT PAGE





 









 








*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




PHS PATENT LICENSE AGREEMENT—EXCLUSIVE




SIGNATURE PAGE




For PHS:




	 	 	 
	/s/ Steven M. Ferguson

	 	November 29, 2004
	


	 	

	Steven M. Ferguson

	 	Date
	Director, Division of Technology Development and Transfer
	 	 
	Office of Technology Transfer
	 	 
	National Institutes of Health
	 	 
	 
	 	 
	Mailing Address for Notices:
	 	 






Office of Technology Transfer

National Institutes of Health

6011 Executive Boulevard, Suite 325

Rockville, Maryland 20852-3804 U.S.A.



For Licensee (Upon, information and belief, the undersigned expressly certifies or affirms that the
contents of any statements of Licensee made or referred to in this document are truthful and
accurate.):




by:




	 	 	 
	/s/ Mark A. Goldsmith

	 	December 7, 2004
	


	 	

	Signature of Authorized Official

	 	Date
	 
	 	 
	Mark A. Goldsmith
	 	 
	

	 	 
	Printed Name
	 	 
	 
	 	 
	Senior Vice President, Health Care
	 	 
	

	 	 
	Title
	 	 






	 	 	 
	Official and Mailing Address for Notices:

	 	 
	 
	 	 
	Genencor International, Inc.
	 	 
	

	 	 
	 
	 	 
	925 Page Mill Road
	 	 
	

	 	 
	 
	 	 
	Palo Alto, CA 94304-1013
	 	 
	

	 	 






Any false or misleading statements made, presented, or submitted to the Government, including any
relevant omissions, under this Agreement and during the course of negotiation of this Agreement are
subject to all applicable civil and criminal statutes including Federal statutes 31 U.S.C.
“ 3801-3812 (civil liability) and 18 U.S.C. ’ 1001 (criminal liability including
fine(s) and/or imprisonment).




 









 








*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




APPENDIX A—Patent(s) or Patent Application(s)




Patent(s) or Patent Application(s):





Group I, to which Licensee is granted non-exclusive rights in the Licensed Fields of Use::




a) DHHS technology ref. #E-385-1986/0: “Recombinant Pseudomonas Exotoxin: Construction
of an Active Immunotoxin with Low Side Effects” Issued as US Patent 4,892,827;




b) DHHS technology ref. #E-135-1989/0: “Recombinant Antibody-Toxin Fusion Protein” Issued as
US Patents 6,051,405, 5,863,745, and 5,696,237; and




c) DHHS technology ref. #E-306-1987/0: “Methods for treating malignancy and autoimmune
disorders in humans” Issued as Canadian patent 1325591 and Japanese patent 2581788;




d) DHHS technology ref. #E-306-1987/1: “Methods for treating malignancy and autoimmune
disorders in humans using Tac antibodies” Pending as U.S. Patent application 08/478,748;




e) DHHS technology ref. #E-163-1993/0: “Recombinant Disulfide-Stabilized Polypeptide
Fragments Having Binding Specificity” Issued as US Patents 5,747,654, 6,147,203, and
6,558,672; and




Any related foreign filed national stage applications claiming priority to such patent
applications and patents listed in I (a)-(e) above.




Group II, to which Licensee is granted exclusive rights in the Licensed Fields of Use::




a) DHHS technology ref. #E-146-1999/0: “Reduction of nonspecific animal toxicity of
immunotoxin by mutating framework repetitions of Fv to lower isoelectric point” (PCT
application PCT/US01/43602) Pending as U.S. Patent Application 10/416,129;




b) DHHS technology ref. #E-216-2000/2: “Pegylation of Linkers Improves Antitumor Activity
and Reduces Toxicity of Immunoconjugates” (PCT application PCT/US01/18503, combining
60/211,331 and 60/213,804) Pending as US patent application 10/297,337;




c) DHHS technology ref. #E-129-2001/0: “Mutated anti-CD22 antibodies with increased affinity
to CD22 expressing leukemia cells” pending as PCT application PCT/US02/30316;




d) DHHS technology ref. #E-046-2004/0: “Mutated anti-CD22 antibodies and immunoconjugates”
Pending as US patent application number 60/525,371; and




Any related foreign filed national stage applications claiming priority to such patent applications
and patents listed in II (a)-(d) above.



 









 





*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




APPENDIX B—Licensed Fields of Use and Territory




Licensed Fields of Use:




     Use of the BL22 and HA22 and variants thereof as claimed in the Licensed Patent Rights for [
*** ].



Licensed Territory:




     Worldwide



 









 





*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




APPENDIX C—Royalties




Royalties:




I. Licensee agrees to pay to PHS a noncreditable, nonrefundable license issue royalty in the amount
of [ *** ].




II. Licensee agrees to pay to PHS a nonrefundable minimum annual royalty in the amount of [ *** ],
with the understanding that payments made under any existing CRADA with NCI relating the BL22 or
HA22 in that same year are fully creditable towards this minimum annual royalty.




III. Licensee agrees to pay PHS earned royalties on Net Sales by or on behalf of Licensee and its
sublicensees as follows:




     [ *** ] of Net Sales of BL-22 and [ *** ] of Net Sales of HA-22, subject to Paragraph 6.11.



IV. Licensee agrees to pay PHS benchmark royalties as follows within thirty (30) days of achieving
said Benchmark:




     BL22 Benchmarks – Hairy Cell Leukemia (HCL)



	 	 	 
	First patient dosing in first Pivotal Trial

in humans, anywhere in the Licensed Territory,

utilizing and/or directed to Licensed Product(s)
and/or Licensed Process(es) 
anywhere in the

Licensed Territory

	 	[ *** ]
	First BLA/NDA filing

	 	[ *** ]
	First Commercial Sale of BL22 to treat HCL

anywhere in the Licensed Territory, utilizing

and/or directed to Licensed Product(s) and/or
Licensed Process(es) anywhere in the Licensed
Territory

	 	[ *** ]






BL22 Benchmarks – Indication(s) other than HCL





Licensee agrees to amend its Commercial Development Plan and Benchmarks to include the use
of BL22 to treat hematologic indication(s) other than HCL, should Licensee contemplate such
clinical development. PHS agrees to accept such changes to Licensee’s Commercial
Development Plan, subject to Paragraph 9.02. PHS further agrees to provide Licensee with
proposed benchmark royalties for such indication(s) and to negotiate the proposed benchmark
royalties with Licensee in good faith.



HA22 Benchmarks – All Milestones are Per Indication and Payable Only Once Per Indication




	 	 	 
	First
patient dosing in a Phase I clinical trial
in humans, anywhere in the Licensed Territory,
utilizing and/or directed to Licensed Product(s)
and/or Licensed Process(es) anywhere in the
Licensed Territory

	 	[ *** ]
	 
	 	 
	First patient dosing in a Pivotal Trial
in humans, anywhere in the Licensed Territory,
utilizing and/or directed to Licensed Product(s)
	 	 






 









 






*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




	 	 	 
	and/or Licensed Process(es) anywhere in the

Licensed Territory

	 	[ *** ]
	 
	 	 
	Filing of BLA/NDA

	 	[ *** ]
	 
	 	 
	BLA/NDA Approval for Marketing

	 	[ *** ]
	 
	 	 
	First Commercial Sale of HA22 associated
with each NDA filing anywhere in the
Licensed Territory, utilizing and/or directed
to Licensed Product(s) and/or Licensed
Process(es) anywhere in the Licensed Territory

	 	[ *** ]






V. Sublicense Royalties





	 	(a)  	Licensee agrees to pay PHS a Sublicense Royalty based on fees received by
Licensee pursuant to a sublicense of the rights granted Licensee in this Agreement,
where such fees are not any of (a) payments for royalties received from a sublicensee
related to the sale of Licensed Products subject to this Agreement; (b) payments
received as an advance creditable against earned royalties; (c) payments received as
compensation for research and development costs incurred subsequent to the effective
date of the sublicense; and (d) payments received as an equity investment in Licensee.
	 
	 	   	For any sublicense granted [ *** ], the Sublicense Royalty shall be [ *** ]. For
any sublicense granted [ *** ], the Sublicense Royalty shall be [ *** ]. For any
sublicenses granted [ *** ], the Sublicense Royalty shall be [ *** ].
	 
	 	(b)  	Licensee may contract with a sublicensee such that said sublicensee is
responsible for payment to Licensee of a milestone or benchmark payment for occurrence
of an event that would cause Licensee to be responsible for a payment to PHS under this
Agreement pursuant to Paragraph 6.04. In such case, only that part of such payment
that is received by Licensee that exceeds the amount due for a specific benchmark under
Paragraph 6.04 shall be subject to a Sublicense Royalty under subsection (a) above.




 









 











*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




APPENDIX D—Modifications




PHS and Licensee agree to the following modifications to the Articles and Paragraphs of this
Agreement:




All modifications to the Agreement are contained within the body of the Agreement.




 









 








*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




APPENDIX E—Benchmarks and Performance




Licensee agrees to the following Benchmarks for its performance under this Agreement and, within
thirty (30) days of achieving a Benchmark, shall notify PHS that the Benchmark has been achieved.




BL22 Therapeutic Benchmarks:




	 	 	 
	First Pivotal clinical trial patient dosing

	 	on or before [ *** ]
	 
	 	 
	NDA /BLA filing

	 	on or before [ *** ]
	 
	 	 
	First Commercial Sale

	 	on or before [ *** ]






HA22 Therapeutic Benchmarks




	 	 	 
	First Phase I trial patient dosing

	 	on or before [ *** ]
	 
	 	 
	First Pivotal trial patient dosing

	 	on or before [ *** ]
	 
	 	 
	NDA /BLA filing

	 	on or before [ *** ]
	 
	 	 
	First Commercial Sale

	 	on or before [ *** ]






Licensee has also indicated in its Application for License to Public Health Service Inventions,
received by PHS on July 6, 2004, that pre-clinical studies might be undertaken in the field of [
*** ]. Should Licensee desire to amend this Agreement to include such field of use, Licensee shall
submit to PHS a complete Commercial Development Plan and Benchmarks relating to such field of use.
PHS agrees to consider, in good faith, an amendment to the Agreement to include such field of
use.




 









 








*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED




APPENDIX F—Commercial Development Plan




BL22 Early Clinical Development Plan

Since BL22 is in [ *** ] for [ *** ] no further [ *** ]. If, following discussion with FDA, [ ***
], Genencor will [ *** ].




BL22 is currently in [ *** ] at [ *** ]. A [ *** ] is also underway. Genencor will assume [ ***
] and [ *** ]. [ *** ] is the sole site for these studies. Sponsorship of [ *** ], which is
currently held by [ *** ], will transfer to Genencor.




BL22 Full Development Plan

Genencor currently plans to [ *** ] . An important success factor will be [ *** ]. A [
*** ] may be acceptable. [ *** ] is rapidly becoming the [ *** ] for [ ***
] . It may become advisable to conduct [ *** ], or [ *** ]. Future [ *** ] will depend on [
*** ]. The [ *** ] has accepted [ *** ].




Following completion of [ *** ], [ *** ] will be designed if warranted by [ *** ]. Again, the [
*** ] will be completed [ *** ], other [ *** ], and [ *** ].




Results from [ *** ] will also be used [ *** ].




BL22 Manufacturing Plan

The process used at [ *** ] for manufacturing [ *** ], while acceptable [ *** ], would not be
acceptable [ *** ]. An improved [ *** ]. Following technology transfer to Genencor, Genencor
plans to [ *** ]. Additional [ *** ].




BL22 DEVELOPMENT BENCHMARKS




	 	 	 	 	 	 
	 
	 	BENCHMARK	 	 	COMPLETION	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 





HA22 Development Plan




HA22 Preclinical Development Plan

The initial preclinical program will provide support for [ *** ] and [ *** ]. GCOR plan an
extensive characterization [ *** ].




[ *** ]




[ *** ]




[ *** ]




Preclinical Evaluation of HA22 for use in [ *** ]

The program [ *** ] to [ *** ]. Based on [ *** ].




HA22 Early Clinical Development Plan

When, following [ *** ], [ *** ] becomes available, an [ *** ] development plan will be
implemented in order to:






	1.  	[ *** ],
	 
	2.  	[ *** ],




 









 








*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED





	3.  	[ *** ],
	 
	4.  	[ *** ].





[ *** ].




[ *** ].




HA22 Full Development Strategy

The full development strategy will [ *** ].




HA22 Manufacturing Plan

[ *** ] HA22 material beyond that [ *** ] being manufactured for [ *** ].




[ *** ].




HA22 DEVELOPMENT BENCHMARKS




	 	 	 	 	 	 
	 
	 	BENCHMARK	 	 	COMPLETION	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 	[ *** ]
	 	 	[ *** ]	 
	 





Marketing and Sales Plan for BL22 and/or HA22




Genencor intends to establish [ *** ].




[ *** ].