Document:

ex-10_43.htm

Adamis Pharmaceuticals Corporation 10-K

 

Exhibit 10.43

 

 

 

LICENSE AGREEMENT

BETWEEN

ADAMIS PHARMACEUTICALS CORPORATION

AND

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

AND

DANA-FARBER CANCER INSTITUTE, INC.

FOR

UC CASE NO. SD2000-051

AND DFCI CASE NO. 595

RMM 022411; 2000-051/DFCI

  

  

  

 

 

TABLE OF CONTENTS

  

	
Recitals

	
 

	  1
	  	  	  
	
Article 1:

	
Definitions

	
2

	  	  	  
	
Article 2:

	
Grant

	
4

	  	  	  
	
Article 3:

	
Considération

	
5

	  	  	  
	
Article 4:

	
Reports, Records and Payments

	
9

	  	  	  
	
Article 5:

	
Patent Matters

	
12

	  	  	  
	
Article 6:

	
Governmental Matters

	
15

	  	  	  
	
Article 7:

	
Termination or Expiration of Agreement

	
16

	  	  	  
	
Article 8:

	
Limited Warranty and Indemnification

	
17

	  	  	  
	
Article 9:

	
Use of Names and Trademarks

	
19

	  	  	  
	
Article 10:

	
Miscellaneous Provisions

	
20

	  	  	  
	
Exhibit A:

	
Dana Farber Terms & Conditions for Licenses

	
24

RMM 022411; 2000-051/DFCI

  

  

  

LICENSE AGREEMENT

This agreement (“Agreement”) is made by and between ADAMIS PHARMACEUTICALS CORPORATION, a Delaware corporation having an address at 2658 Del Mar Heights Rd.#555,  Del Mar, CA 92014 (“LICENSEE”) The Regents of the University of California, a California corporation having its statewide administrative offices at 1111 Franklin Street, Oakland, California 94607-5200 (“UNIVERSITY”), represented by its San Diego campus having an address at University of California, San Diego, Technology Transfer Office, Mail Code 0910, 9500 Gilman Drive, La Jolla, California 92093-0910 (“UCSD”) and Dana-Farber Cancer Institute, Inc, a Massachusetts non-profit corporation having its offices at 450 Brookline Avenue, Boston, Massachusetts 02215 (“DFCI”).

This Agreement is effective on the date of the last signature (“Effective Date”).

RECITALS

WHEREAS, the inventions disclosed in UCSD Disclosure Docket No. SD2000-051 and titled “Telomerase Reverse Transcriptase as Antigen for Immunization in Cancer” (“UCSD Invention”), were made in the course of research at UCSD by Dr. Maurizio Zanetti (hereinafter, the “UCSD Inventor”) and are covered by Patent Rights as defined below;

WHEREAS, the Inventor is an employee of UCSD, and he is obligated to assign all of his right, title and interest in the Invention to UNIVERSITY;

WHEREAS, the inventions disclosed in the DFCI Disclosure Docket No. 595 and titled “Cancer Immunotherapy and Diagnosis Using Universal Tumor Associated Antigens, Including hTERT”, were made using federal funding and are covered by Patent Rights as defined below” (“DFCI Invention”), were made in the course of research at DFCI by Dr. Lee Nadler and his colleagues (hereinafter, the “DFCI Inventors”) and are covered by Patent Rights as defined below;

WHEREAS, the research  leading to the DFCI Invention was sponsored in part by the Government of the United States of America and as a consequence this license is subject to overriding obligations to the Federal Government under 35 U.S.C. §§ 200-212 and applicable regulations;

WHEREAS, the UCSD Invention and DFCI Invention described above and UCSD Inventor and DFCI Inventors are hereinafter collectively “Inventions” and ‘Inventors” respectively;

WHEREAS, UCSD and DFCI have entered into an inter-institutional agreement (“IIA”) regarding the Inventions;

WHEREAS, UNIVERSITY and DFCI are hereinafter collectively “LICENSORS”;

 

  

  

  

 

WHEREAS, LICENSORS are desirous that the Inventions be developed and utilized to the fullest possible extent so that their benefits can be enjoyed by the general public;

WHEREAS, LICENSEE is desirous of obtaining certain rights from LICENSORS for commercial development, use, and sale of the Inventions, and the UNIVERSITY is willing to grant such rights; and

WHEREAS, LICENSEE is aware that third party intellectual property may exist relating to the Inventions and Licensed Products;

WHEREAS, LICENSEE understands that LICENSORS may publish or otherwise disseminate information concerning the Invention) at any time and that LICENSEE is paying consideration hereunder for its early access to the Invention, not continued secrecy therein.

NOW, THEREFORE, the parties agree:

ARTICLE 1.  DEFINITIONS

The terms, as defined herein, shall have the same meanings in both their singular and plural forms.

1.1              “Affiliate” means any corporation or other business entity which is bound in writing by LICENSEE to the terms set forth in this Agreement and which, directly or indirectly, LICENSEE controls, or which controls LICENSEE, or which is under common control with LICENSEE.  In the case of a corporation, “control” means the ownership of, or the ability to direct the voting of at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors of the corporation; but in any country where the local law does not permit foreign equity participation of at least fifty percent (50%), then an “Affiliate” corporation includes any company in which LICENSEE owns or controls or is owned or controlled by, directly or indirectly, the maximum percentage of outstanding stock or voting rights permitted by local law.  In the case of a business entity that is not a corporation, “control” means the ownership of, or by agreement the ability to act as if the owner of, a majority of the equity interests in the entity.

1.2              “Combination Product” means any product which is a Licensed Product (as defined below) and contains other product(s) or product component(s) that (i) are not an excipient, diluent, adjuvant, buffer and the like; (ii) which by themselves would not infringe, or contribute to or induce the infringement of any issued and outstanding claim in the Patent Rights if sold separately by LICENSEE, its Sublicensee (as defined below) or an Affiliate; and (iii) enhances the market price of the Licensed Product.  As used herein, an “outstanding claim” is an issued claim that has not expired, been amended, held invalid or unenforceable in a decision that is final and unappealable, terminally disclaimed or which is otherwise not assertable.

1.3              “Field” means therapeutic and preventive cancer vaccines in humans.

 

  

  

  

1.4              “Licensed Method” means any method that is read on by any claim in Patent Rights (as defined below), the practice of which would constitute, but for the license granted to LICENSEE under this Agreement, an infringement, an inducement to infringe or contributory infringement of any issued and outstanding claim within Patent Rights.

1.5              “Licensed Product” means any service, composition or product with claims in Patent Rights, or that is produced by practice of the Licensed Method, or the manufacture, use, sale, offer for sale, or importation of which would constitute, but for the license granted to LICENSEE under this Agreement, an infringement, an inducement to infringe or contributory infringement, of any issued and outstanding claim within the Patent Rights.

1.6              “Net Sales” means the total of the gross invoice prices of Licensed Products sold or leased by LICENSEE, Sublicensee, Affiliate, or any combination thereof, less the sum of the following actual and customary deductions where applicable and separately listed:  cash, trade, or quantity discounts or rebates (as allowed under applicable law); sales, use, tariff, import/export duties or other excise taxes imposed on particular sales (except for value-added and income taxes imposed on the sales of Licensed Product in foreign countries); transportation charges; or credits to customers because of rejections or returns.  For purposes of calculating Net Sales, transfers to a Sublicensee or an Affiliate of Licensed Product under this Agreement for (i) end use (but not resale) by the Sublicensee or Affiliate shall be treated as sales by LICENSEE at list price of LICENSEE, or (ii) resale by a Sublicensee or an Affiliate shall be treated as sales at the list price of the Sublicensee or Affiliate.

1.7              “Patent Costs” means all out-of-pocket expenses for the preparation, filing, prosecution, and maintenance of all United States patents and patent applications included in Patent Rights including out-of-pocket expenses for patentability opinions, inventorship determinations, and prosecution of, re-examination, re-issue, interference, and other activities related to patents or applications in Patent Rights.

1.8              “Patent Rights” means LICENSORS’ rights in any of the following:  the US patent (serial number 7,388,071 titled “Compositions and Methods for Inducing and Enhancing a Telomerase Reverse Transcriptase Reactive Cytotoxic T-Lymphocyte Response”) disclosing and claiming the UCSD Invention, filed by Inventors and assigned to UNIVERSITY;  and the US patent number 7,851,591 titled Cancer Immunotherapy and Diagnosis Using Universal Tumor Associated Antigens, Including hTERT”, disclosing and claiming the DFCI Invention, assigned to the Dana Farber Cancer Institute and which is being licensed under this Agreement pursuant to the terms of the Inter-Institutional Agreement with DFCI (“DFCI Agreement”) (UC Control #2010-18-0241, effective 11/30/2009) and any claims resulting from a post allowance proceeding including reissues, reexaminations and extensions thereof.

1.9              “Sponsor Rights” means all the applicable provisions of any license to the United States Government executed by UNIVERSITY or DFCI and the overriding obligations to the Federal Government under 35 U.S.C. §§ 200-212 and applicable governmental implementing regulations.

  

  

  

 

1.10           “Sublicense” means an agreement into which LICENSEE enters with a third party that is not an Affiliate for the purpose of (i) granting certain rights; (ii) granting an option to certain rights; or (iii) forbearing from the exercise of any rights, granted to LICENSEE under this Agreement. “Sublicensee” means a third party with whom LICENSEE enters into a Sublicense.

1.12           “Term” means the period of time beginning on the Effective Date and ending on the expiration date of the longest-lived Patent Rights;

1.13           “Territory” means the United States of America, including its territories, possessions and Puerto Rico.

ARTICLE 2.  GRANTS

2.1   License.  Subject to the limitations set forth in this Agreement and Sponsor’s Rights, LICENSORS hereby grant to LICENSEE, and LICENSEE hereby accepts, a license under Patent Rights to make and have made, to use and have used, to sell and have sold, to offer for sale, and to import and have imported Licensed Products and to practice Licensed Methods, in the Field within the Territory and during the Term.

The license granted herein is exclusive for Patent Rights.

 

 

2.2    Sublicense.

(a)  The license granted in Paragraph 2.1 includes the right of LICENSEE to grant   Sublicenses to third parties during the Term but only for as long the license is exclusive.

(b)  With respect to Sublicenses granted pursuant to Paragraph 2.2(a), LICENSEE shall:

(i)  not receive, or agree to receive, anything of value in lieu of cash as consideration from a third party under a Sublicense granted pursuant to Paragraph 2.2(a) without the express written consent of UNIVERSITY;

(ii)  to the extent applicable, include all of the rights of and obligations due to LICENSORS (and, if applicable, the Sponsor’s Rights) and contained in this Agreement;

(iii)  promptly provide UNIVERSITY with a copy of each Sublicense issued; and

(iv)  collect and guarantee payment of all payments due, directly or indirectly, to UNIVERSITY from Sublicensees and summarize and deliver all reports due, directly or indirectly, to UNIVERSITY from Sublicensees.

  

  

  

 

(c)  Upon termination of this Agreement for any reason, UNIVERSITY, at its sole discretion, shall determine whether LICENSEE may assign to UNIVERSITY any and all Sublicenses.   Unassigned sublicenses are no longer in effect with respect to Patent Rights as of the termination of this Agreement.

2.3    Reservation of Rights.  LICENSORS reserve the right to:

(a)  use the Invention and Patent Rights for educational and research purposes including without limitation clinical research;

(b)  publish or otherwise disseminate any information about the Invention at any time; and

(c)  allow other nonprofit institutions to use and publish or otherwise disseminate any information about Invention and Patent Rights for educational and research purposes including without limitation clinical research

ARTICLE 3.  CONSIDERATION

3.1   Fees and Royalties.  All payments required to be paid by LICENSEE under this Agreement to LICENSORS except reimbursable patent costs shall be remitted to UNIVERSITY on behalf of LICENSORS who shall be responsible for allocating such payments between UNIVERSITY and DFCI.  The parties hereto understand that the fees and royalties payable by LICENSEE to UNIVERSITY under this Agreement are partial consideration for the license granted herein to LICENSEE under Patent Rights. LICENSEE shall pay UNIVERSITY:

(a)  a license issue fee of Ten Thousand Dollars (US$10,000.00), within thirty (30) days after the Effective Date;

 (b)  license maintenance fees of Ten Thousand Dollars (US$10,000.00) per year and payable on the first through third anniversary of the Effective Date and Twenty Thousand Dollars (US$ 20,000.00) annually thereafter on each anniversary; provided however, that LICENSEE’s obligation to pay this fee shall end on the date when LICENSEE, an Affiliate or Sublicensee is commercially selling a Licensed Product;

(c)  milestone payments in the amounts payable according to the following schedule or events:

Amount and Event

  

  

  

 

	
(i)  

	
Twenty-five Thousand Dollars [US$ 25,000.00] upon dosing of 50% of the patients expected to be enrolled for a Phase I clinical trial for the first indication (if such a trial is needed) of a Licensed Product;

 

	
(ii)  

	
Twenty-five Thousand Dollars (US$ 25,000.00) upon the filing of an IND for the second indication of a Licensed Product

 

	
(iii)  

	
One Hundred Thousand Dollars (US$ 100,000.00) upon dosing of the first patient and One Hundred Fifty Thousand Dollars (US$ 150,000.00) upon dosing of the 40th patient* in a Phase II clinical trial for the first indication of a Licensed Product  *based on an expected trial enrollment of 60-100 patients; if less than 60 or more than 100 patients are enrolled, then the second payment is due upon dosing of the patient that is equivalent to enrollment reaching 50% of the total enrollment for the trial.

 

	
(iv)  

	
Two Hundred Fifty Thousand Dollars (US$ 250,000.00) upon dosing of the first patient for a Phase 2 clinical trial for the second indication of a Licensed Product;

 

	
(v)  

	
Six Hundred Thousand Dollars (US$ 600,000.00) upon dosing of the first patient for a Phase 3 clinical trial for the first indication of a Licensed Product;

 

	
(vi)  

	
Six Hundred Thousand Dollars (US$ 600,000.00) upon dosing of the first patient for a Phase 3 clinical trial for the second indication of a Licensed Product;

 

	
(vii)  

	
One Million Dollars (US$ 1,000,000) upon receipt of US regulatory approval for each indication of a Licensed Product.

(d)  an earned royalty of two percent (2%) on Net Sales of Licensed Products by LICENSEE and/or its Affiliate(s); provided, however, that the earned royalty due on Net Sales of a Combination Product by LICENSEE and/or its Affiliate(s) shall be calculated as below:

Earned Royalties due LICENSORS = [A/B] x Royalty Rate on Net Sales of the Licensed Products x Net Sales of Combination Product, where:

A is the separately listed sale price of the Licensed Product or Licensed Product components; and

B is the separately listed sale price of the Combination Products. For any products in B for which LICENSEE has reduced its earned royalties payable to UNIVERSITY under 3.1(e), this provision shall not apply.

(e)           In the event LICENSEE is required to pay royalties to one or more third parties for patent rights necessary to make, use or sell Licensed Products, LICENSEE may deduct $0.50 from the earned royalties payable to UNIVERSITY on behalf of LICENSORS for every $1.00 LICENSEE actually pays to said third parties; provided, however, in no event shall the amount payable to UNIVERSITY be less than 50% of the amount otherwise due.

 

  

  

  

 

(f) (i) fifty percent (50%) of all Sublicense fees received by LICENSEE from its Sublicensees executed prior to the initiation of pre-clinical studies that are not earned royalties;

     (ii)  forty percent (40%) of all Sublicense fees received by LICENSEE from its Sublicensees executed  after the initiation of pre-clinical studies but before filing an IND that are not earned royalties;

   (iii) thirty percent (30%) of all Sublicense fees received by LICENSEE from its Sublicensees executed after the filing of an IND but before the start of a Phase II trial that are not earned royalties;

     (iv)  twenty-five percent (25%) of all Sublicense fees received by LICENSEE from its Sublicensees executed after the initiation of a Phase II trial but before the initiation of a Phase III trial that are not earned royalties;

     (v)  twenty percent (20%) of all Sublicense fees received by LICENSEE from its Sublicensees executed after the initiation of a Phase III trial but before receiving regulatory approval that are not earned royalties;

     (vi)  ten percent (10%) of all Sublicense fees received by LICENSEE from its Sublicensees executed after receiving regulatory approval that are not earned royalties.

(g) on each and every Sublicense royalty payment received by LICENSEE from its Sublicensees on sales of Licensed Product by Sublicensee, the higher of the royalties based on the royalty rate in Paragraph  3.1(d) as applied to Net Sales of Sublicensee; or

     (i) fifty percent (50%) of the royalties received by LICENSEE from its Sublicensees if sublicensed before the start of a Phase II trial;

     (ii)  forty percent (40%) of the royalties received by LICENSEE from its Sublicensees if sublicensed after the initiation of a Phase II trial but before the initiation of a Phase III trial;

   (iii) thirty percent (30%) of the royalties received by LICENSEE from its Sublicensees if sublicensed after the initiation of a Phase III trial but before receiving regulatory approval;

   (iv)  twenty-five percent (25%) of the royalties received by LICENSEE from its Sublicensees if sublicensed after receiving regulatory approval.

(h) beginning the calendar year of commercial sales of the first Licensed Product by LICENSEE, its Sublicensee, or an Affiliate and if the total earned royalties paid by LICENSEE under Paragraphs 3.1(d) and (g) to UNIVERSITY in:

  

  

  

 

   (i) the first and second full year of sales cumulatively amount to less than One Hundred Thousand Dollars (US$100,000.00) (“minimum annual royalty base”); and

   (ii) each year thereafter starting with the third full year of sales the total sales cumulatively amount to less than Two Hundred Thousand Dollars (US$200,000.00) (“adjusted minimum annual royalty base”),

 LICENSEE shall pay to UNIVERSITY a minimum annual royalty on or before February 28 following the last quarter of such year the difference between the minimum annual royalty base or the adjusted minimum annual royalty base, as applicable, and the total earned royalty paid by LICENSEE for such year under Paragraphs 3.1(d) and (g); provided, however, that for the year of commercial sales of the first Licensed Product, the amount of minimum annual royalty payable shall be pro-rated for the number of months remaining in that calendar year.

All fees and royalty payments specified in Paragraphs 3.1(a) through 3.1(g) above shall be paid by LICENSEE pursuant to Paragraph 4.3 and shall be delivered by LICENSEE to UNIVERSITY as noted in Paragraph 10.1.

	
3.2  

	
   Patent Costs.  LICENSEE shall reimburse LICENSORS all past Patent Costs (prior to the Effective Date) according to the schedule below and future (on or after the Effective Date) Patent Costs within thirty (30) days following the date an itemized invoice is sent from each LICENSOR to LICENSEE. In a LICENSOR’s  discretion, for Patent Costs anticipated by it to exceed $20,000.00 (“Anticipated Costs”), the LICENSOR will inform LICENSEE no less than sixty (60) days prior to the date when such Anticipated Costs are incurred. The LICENSOR may, at its discretion and in accordance with Section 5.1(c), require full advance payment of Anticipated Costs at least 15 business days before required filing dates (“Advance Payment Deadline”).  In the event a LICENSOR has provided LICENSEE with a 60 days notice of Anticipated Costs, and LICENSEE does not pay the Anticipated Costs on or before the Advance Payment Deadline, each LICENSOR will each act at its sole discretion with regard to filing, prosecution and maintenance of those Patent Rights associated with the 60 days notice. In the event that the Cost Estimate paid by LICENSEE is greater than the actual cost, the excess amount is creditable against future Patent Costs.   In the event that the actual costs exceed the Anticipated Costs paid in advance by LICENSEE, LICENSEE shall pay such excess costs within thirty (30) days following the date an itemized invoice is sent as set forth in Paragraph 4.3.

Past Patent Costs of UNIVERSITY are approximately Forty Thousand Dollars (US$ 40,000).

LICENSEE agrees to pay UNIVERSITY ~ $3500/month to reimburse said costs.

Past Patent Costs of DFCI are approximately Sixty-eight Thousand Dollars (US$68,000).

LICENSEE agrees to pay DFCI ~$6500/month to reimburse said costs.

 

  

  

  

 

 

	
3.3  

	
   Due Diligence.

           (a)  LICENSEE shall, either directly or through its Affiliate(s) or Sublicensee(s):

(i)  diligently proceed with the development, manufacture and sale of Licensed Products;

(ii)  annually spend not less than Two Hundred Thousand dollars (US$200,000.00) for the development of Licensed Products during the first five (5) years of this Agreement. LICENSEE may, at its sole option, fund the research of any one of the Inventors and credit the amount of such funding actually paid to UCSD against its obligation under this paragraph;

(iii)  submit an IND and initiate a Phase II (or Phase I, if required) study for a first indication covering Licensed Products to the United States FDA within one (1) year from the Effective Date of this Agreement;

(iv)  initiate a Phase III study for a first indication covering Licensed Products to the United States FDA within four (4) years from the Effective Date of this Agreement;

(v)  file a NDA or equivalent regulatory submission for a first indication covering Licensed Products to the United States FDA within seven (7) years from the Effective Date of this Agreement;

(vi)  initiate a Phase II study for a second indication covering Licensed Products to the United States FDA within eight (8) years from the Effective Date of this Agreement;

(vii)  initiate a Phase III study for a second indication covering Licensed Products to the United States FDA within ten (10) years from the Effective Date of this Agreement;

 

 

(viii)  file a NDA or equivalent regulatory submission for a second indication covering Licensed Products to the United States FDA within thirteen (13) years from the Effective Date of this Agreement;

(ix)  The milestones described in 3.3 (iii) – (viii) will be extended by one year if LICENSEE must conduct a Phase I trial

(x)  market Licensed Products in the United States within six (6) months of receiving regulatory approval to market such Licensed Products;

(xi) fill the market demand for Licensed Products following commencement of marketing at any time during the term of this Agreement; and

 

  

  

  

 

(xii)  obtain all necessary governmental approvals for the manufacture, use and sale of Licensed Products.

(b)  If LICENSEE fails to perform any of its obligations specified in Paragraphs 3.3(a)(i)-(xii), then LICENSORS shall have the right and option to either terminate this Agreement or change LICENSEE’s exclusive license to a nonexclusive license.  This right, if exercised by LICENSORS, supersedes the rights granted in Article 2.  If LICENSEE fails to meet the obligations regarding the development of a second indication for a Licensed Product as specified in Paragraphs 3.3(a)(i)-(xii), but is meeting its obligations for the first indication, and LICENSEE and LICENSORS cannot agree on renegotiated terms for the second indication, then LICENSORS shall have the right to amend this Agreement so the Field is limited to the first indication.

ARTICLE 4.  REPORTS, RECORDS AND PAYMENTS

4.1    Reports.

(a)  Progress Reports.

                      Beginning six months after Effective Date and ending on the date of first commercial sale of a Licensed Product, LICENSEE shall report to UNIVERSITY progress covering LICENSEE’s (and Affiliate’s and Sublicensee’s) activities for the preceding six months to develop and test all Licensed Products and obtain governmental approvals necessary for marketing the same.  Such semi-annual reports shall be due within sixty days of the reporting period and include a summary of work completed, summary of work in progress, current schedule of anticipated events or milestones, market plans for introduction of Licensed Products, and summary of resources (dollar value) spent in the reporting period.

(b)  Royalty Reports.

After the first commercial sale of a Licensed Product anywhere in the Territory, LICENSEE shall submit to UNIVERSITY quarterly royalty reports on or before each February 28, May 31, August 31 and November 30 of each year.  Each royalty report shall cover LICENSEE’s (and each Affiliate’s and Sublicensee’s) most recently completed calendar quarter and shall show:

                                 (i)  the date of first commercial sale of a Licensed Product in each country;

 

 

(ii) the gross sales, deductions as provided in Paragraph 1.6 (Net Sales), and Net Sales during the most recently completed calendar quarter and the royalties, in US dollars, payable with respect thereto;

	
(iii)  

	
 the number of each type of Licensed Product sold;

  

  

  

 

(iii) Sublicense fees and royalties received during the most recently completed calendar quarter in US dollars, payable with respect thereto;

                       (v) the method used to calculate the royalties; and

(vi) the exchange rates used.

If no sales of Licensed Products have been made and no Sublicense revenue has been received by LICENSEE during any reporting period, LICENSEE shall so report.

4.2    Records & Audits.

(a)  LICENSEE shall keep, and shall require its Affiliates and Sublicensees to keep, accurate and correct records of all Licensed Products manufactured, used, and sold, and Sublicense fees received under this Agreement.  Such records shall be retained by LICENSEE for at least five (5) years following a given reporting period.

(b)  All records shall be available during normal business hours for inspection at the expense of LICENSORS by UNIVERSITY’s Internal Audit Department or by a Certified Public Accountant selected by UNIVERSITY and in compliance with the other terms of this Agreement for the sole purpose of verifying reports and payments or other compliance issues.  Such inspector shall not disclose to UNIVERSITY any information other than information relating to the accuracy of reports and payments made under this Agreement or other compliance issues.  In the event that any such inspection shows an under reporting and underpayment in excess of five percent (5%) for any twelve-month (12-month) period, then LICENSEE shall pay the cost of the audit as well as any additional sum that would have been payable to UNIVERSITY had the LICENSEE reported correctly, plus an interest charge at a rate of ten percent (10%) per year.  Such interest shall be calculated from the date the correct payment was due to UNIVERSITY up to the date when such payment is actually made by LICENSEE.  For underpayment not in excess of five percent (5%) for any twelve-month (12-month) period, LICENSEE shall pay the difference within thirty (30) days without interest charge or inspection cost.  If the audit reveals an aggregate overpayment by LICENSEE, the overpayment will be credited by LICENSEE against future royalty payment or other monetary obligations.

4.3   Payments.

(a)  All fees, reimbursements and royalties due LICENSORS payable to UNIVERSITY under this Agreement  shall be paid in United States dollars and all checks shall be made payable to “The Regents of the University of California”, referencing UNIVERSITY’s taxpayer identification number, 95-6006144, and sent to UNIVERSITY according to Paragraph 10.1 (Correspondence).  When Licensed Products are sold in currencies other than United States dollars, LICENSEE shall first determine the earned royalty in the currency of the country in which Licensed Products were sold and then convert the amount into equivalent United States funds, using the exchange rate quoted in the Wall Street Journal on the last business day of the applicable reporting period.

  

  

  

  

          (b) Royalty Payments.

(i)  Royalties shall accrue when Licensed Products are invoiced, or if not invoiced, when delivered to a third party or Affiliate.

(ii)  LICENSEE shall pay earned royalties quarterly on or before February 28, May 31, August 31 and November 30 of each calendar year.  Each such payment shall be for earned royalties accrued within LICENSEE’s most recently completed calendar quarter.

(iii)  Royalties earned on sales occurring or under Sublicense granted pursuant to this Agreement in any country outside the United States shall not be reduced by LICENSEE for any taxes, fees, or other charges imposed by the government of such country on the payment of royalty income, except that all payments made by LICENSEE in fulfillment of LICENSORS’ tax liability in any particular country may be credited against earned royalties or fees due LICENSORS for that country.  LICENSEE shall pay all bank charges resulting from the transfer of such royalty payments.

(iv)  If at any time legal restrictions prevent the prompt remittance of part or all royalties by LICENSEE with respect to any country where a Licensed Product is sold or a Sublicense is granted pursuant to this Agreement, LICENSEE shall convert the amount owed to LICENSORS into US currency and shall pay UNIVERSITY directly from its US sources of fund for as long as the legal restrictions apply.

(v)  LICENSEE shall not collect royalties from, or cause to be paid on Licensed Products sold to the account of the US Government or any agency thereof as provided for in the license to the US Government.  [Note: only applicable to inventions made with Federal funding]

(vi)  In the event that any patent or patent claim within Patent Rights is held invalid in a final decision by a patent office from which no appeal or additional patent prosecution has been or can be taken, or by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, all obligation to pay royalties based solely on that patent or claim or any claim patentably indistinct therefrom shall cease as of the date of such final decision.  LICENSEE shall not, however, be relieved from paying any royalties that accrued before the date of such final decision, that are based on another patent or claim not involved in such final decision.

 

  

  

  

 

(vii) Royalty payments under Article 3, recoveries and settlements under Article 5, and royalty reports under 4.1(b) shall be rendered for any and all Licensed Products even if due after expiration of the Agreement. If no applicable Patent Rights existed in the Territory at the time of any making, use, sale, offer for sale, or import, then no royalty payments or royalty reports shall be due.

	
(c)  

	
Late Payments.  In the event royalty, reimbursement and/or fee payments are not received by UNIVERSITY when due, LICENSEE shall pay to UNIVERSITY on behalf of LICENSORS interest charges at a rate of ten percent (10%) per year.  Such interest shall be calculated from the date payment was due until actually received by UNIVERSITY.

	
(d)  

	
Payment for past Patent Costs will be billed directly to LICENSEE by each LICENSOR as described in Paragraph 3.2

 

ARTICLE 5.  PATENT MATTERS

5.1   Patent Prosecution and Maintenance.

(a)  Provided that LICENSEE has reimbursed LICENSORS for Patent Costs pursuant to Paragraph 3.2, LICENSORS shall diligently prosecute and maintain the United States  patents, and applications in Patent Rights using counsel of its choice. For purposes of clarity, if LICENSEE is not current in reimbursing LICENSORS for such patent prosecution costs, LICENSORS shall have no obligation to incur any new Patent Costs under this Agreement or to further prosecute Patent Rights or file any new patents under Patent Rights. LICENSORS shall provide LICENSEE with copies of all relevant documentation relating to such prosecution and LICENSEE shall keep this documentation confidential.  The counsel shall take instructions only from LICENSORS, and all patents and patent applications in Patent Rights shall be assigned solely to LICENSORS. LICENSORS shall in any event control all patent filings and all patent prosecution decisions and related filings (e.g. responses to office actions) shall be at LICENSORS’ final discretion (prosecution includes, but is not limited to, interferences, oppositions and any other inter partes matters originating in a patent office).

 

 (b) LICENSORS shall consider amending any patent application in Patent Rights to include claims reasonably requested by LICENSEE to protect the products contemplated to be sold by LICENSEE under this Agreement.

(c) LICENSEE may elect to terminate its reimbursement obligations with respect to any patent application or patent in Patent Rights upon three (3) months’ written notice to UNIVERSITY.  LICENSORS shall use reasonable efforts to curtail further Patent Costs for such application or patent when such notice of termination is received from LICENSEE.  LICENSORS, each in its sole discretion and at its sole expense, may continue prosecution and maintenance of said application or patent, and LICENSEE shall have no further license with respect thereto.  Non-payment of any portion of Patent Costs or Anticipated Costs with respect to any application or patent may be deemed by UNIVERSITY as an election by LICENSEE to terminate its reimbursement obligations with respect to such application or patent.   LICENSORS are not obligated to file, prosecute, or maintain Patent Rights where LICENSEE is not paying patent costs at any time or to file, prosecute, or maintain Patent Rights to which LICENSEE has terminated its license hereunder.

  

  

  

 

(d) LICENSEE shall apply for an extension of the term of any patent in Patent Rights if appropriate under the Drug Price Competition and Patent Term Restoration Act of 1984 and/or European, Japanese and other foreign counterparts of this law.  LICENSEE shall prepare all documents for such application, and LICENSORS shall execute such documents and to take any other additional action as LICENSEE reasonably requests in connection therewith.

5.2    Patent Infringement.

(a) In the event that UNIVERSITY (to the extent of the actual knowledge of the licensing professional responsible for the administration of this Agreement) or LICENSEE learns of infringement of potential commercial significance of any patent licensed under this Agreement, the knowledgeable party will provide the other (i) with written notice of such infringement and (ii) with any evidence of such infringement available to it (the “Infringement Notice”). During the period in which, and in the jurisdiction where, LICENSEE has exclusive rights under this Agreement, neither the applicable LICENSOR nor LICENSEE will notify a third party (including the infringer) of infringement or put such third party on notice of the existence of any Patent Rights without first obtaining consent of the other.  If such consent is not obtained from LICENSORS and either LICENSOR is sued in declaratory judgment, UNIVERSITY shall have the right to terminate this Agreement immediately without the obligation to provide 60 days’ notice as set forth in Paragraph 7.1 if LICENSEE notifies a third party of infringement or puts such third party on notice of the existence of any Patent Rights with respect to such infringement without first obtaining the written consent of the applicable LICENSOR.  The applicable LICENSOR and LICENSEE will use their diligent efforts to cooperate with each other to terminate such infringement without litigation.

(b) If infringing activity of potential commercial significance by the infringer has not been abated within ninety (90) days following the date the Infringement Notice takes effect, LICENSEE may institute suit for patent infringement against the infringer.  UNIVERSITY and/or DFCI, whichever is licensor of the applicable Patent Rights, may voluntarily join such suit at its own expense, but may not thereafter commence suit against the infringer for the acts of infringement that are the subject of LICENSEE’s suit or any judgment rendered in that suit.  LICENSEE may not join UNIVERSITYand/or DFCI in a suit initiated by LICENSEE without UNIVERSITY’S and/or DFCI’s prior written consent.  If, in a suit initiated by LICENSEE, UNIVERSITYand/or DFCI is involuntarily joined other than by LICENSEE, LICENSEE will pay any costs incurred by UNIVERSITY and/or DFCI arising out of such suit, including but not limited to, any legal fees of counsel that UNIVERSITY and/or DFCI  selects and retains to represent it in the suit.

  

  

  

 

(c) If, within a hundred and twenty (120) days following the date the Infringement Notice takes effect, infringing activity of potential commercial significance by the infringer has not been abated and if LICENSEE has not brought suit against the infringer, the applicable LICENSOR may institute suit for patent infringement against the infringer.  If the applicable LICENSOR institutes such suit, LICENSEE may not join such suit without that LICENSOR’s consent and may not thereafter commence suit against the infringer for the acts of infringement that are the subject of the LICENSOR’s suit or any judgment rendered in that suit.

(d) Any recovery or settlement received in connection with any suit will first be shared by the applicable LICENSOR and LICENSEE equally to cover the litigation costs each incurred, and next shall be paid to LICENSOR or LICENSEE to cover any litigation costs it incurred in excess of the litigation costs of the other.  In any suit initiated by LICENSEE, any recovery in excess of litigation costs will be shared between LICENSEE and the applicable LICENSOR as follows:  (i) for any recovery other than amounts paid for willful infringement:  (A) LICENSOR will receive fifteen percent (15%) of the recovery if the LICENSOR was not a party in the litigation and did not incur any litigation costs; (B) LICENSOR will receive twenty-five percent (25%) of the recovery if the LICENSOR was a party in the litigation, but did not incur any litigation costs, including the provisions of Paragraph 5.2(b) above, or (C) the LICENSOR will receive fifty percent (50%) of the recovery if LICENSOR incurred any litigation costs in connection with the litigation;  and (ii) for any recovery for willful infringement, the LICENSOR will receive fifty percent (50%) of the recovery.  In any suit initiated by a LICENSOR, any recovery in excess of litigation costs will belong to the LICENSOR.  LICENSORS and LICENSEE agree to be bound by all determinations of patent infringement, validity, and enforceability (but no other issue) resolved by any adjudicated judgment in a suit brought in compliance with this Section 5.2.

(e) Any agreement made by LICENSEE for purposes of settling litigation or other dispute shall comply with the requirements of Section 2.2 (Sublicenses) of this Agreement.

(f) Each party will cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party who initiated the suit (unless such suit is being jointly prosecuted by the parties).

 

(g) Any litigation proceedings will be controlled by the party bringing the suit, except that a LICENSOR may be represented by counsel of their choice in any suit brought by LICENSEE.

 

  

  

  

 

5.3   Patent Marking.  LICENSEE shall mark all Licensed Products made, used or sold under the terms of this Agreement, or their containers, in accordance with the applicable patent marking laws. LICENSEE shall be responsible for all monetary and legal liabilities arising from or caused by (i) failure to abide by applicable patent marking laws and (ii) any type of incorrect or improper patent marking.

 

ARTICLE 6.  GOVERNMENTAL MATTERS

6.1    Governmental Approval or Registration.  If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, LICENSEE shall assume all legal obligations to do so.  LICENSEE shall notify UNIVERSITY if it becomes aware that this Agreement is subject to a United States or foreign government reporting or approval requirement.  LICENSEE shall make all necessary filings and pay all costs including fees, penalties, and all other out-of-pocket costs associated with such reporting or approval process.

6.2    Export Control Laws.  LICENSEE shall observe all applicable United States and foreign laws with respect to the transfer of Licensed Products and related technical data to foreign countries, including, without limitation, the International Traffic in Arms Regulations and the Export Administration Regulations.

6.3    Preference for United States Industry. If LICENSEE sells a Licensed Product or Combination Product in the US, LICENSEE shall manufacture said product substantially in the US.

ARTICLE 7.  TERMINATION OR EXPIRATION OF THE AGREEMENT

7.1    Termination by UNIVERSITY.

(a)  If LICENSEE fails to perform or violates any term of this Agreement, then UNIVERSITY may give written notice of default (“Notice of Default”) to LICENSEE.  If LICENSEE fails to cure the default within sixty (60) days of the Notice of Default, UNIVERSITY may terminate this Agreement and the license granted herein by a second written notice (“Notice of Termination”) to LICENSEE.  If a Notice of Termination is sent to LICENSEE, this Agreement shall automatically terminate on the effective date of that notice.  Termination shall not relieve LICENSEE of its obligation to pay any fees owed at the time of termination and shall not impair any accrued right of LICENSORS. During the term of any such Notice of Default or period to cure, to the extent the default at issue is a failure to pay past or ongoing patent costs as provided for under this Agreement, LICENSORS shall have no obligation to incur any new patent costs under this Agreement and shall have no obligation to further prosecute Patent Rights or file any new patents under Patent Rights.

 

 

(b)  This Agreement will terminate immediately, without the obligation to provide 60 days notice as set forth in Paragraph 7.1(a), if LICENSEE files a claim including in any way the assertion that any portion of LICENSORS’ Patent Rights is invalid or unenforceable where the filing is by the LICENSEE, a third party on behalf of the LICENSEE, or a third party at the written urging of the LICENSEE.

7.2     Termination by LICENSEE.

(a)  LICENSEE shall have the right at any time and for any reason to terminate this Agreement upon a ninety (90)-day written notice to UNIVERSITY during which 90-day period LICENSEE shall be entitled to wind down its activities in furtherance of the license without incurring any obligation (except for royalties due on sales made during the wind-down period)  to UNIVERSITY arising from such wind-down.; provided, however, that LICENSEE shall remain obligated to reimburse LICENSORS for any expense incurred by them until such termination becomes effective.  Said notice shall state LICENSEE’s reason for terminating this Agreement.

 

  

  

  

 

(b)  Any termination under Paragraph 7.2(a) shall not relieve LICENSEE of any obligation or liability accrued under this Agreement prior to termination or rescind any payment made to LICENSORS or action by LICENSEE prior to the time termination becomes effective.  Termination shall not affect in any manner any rights of LICENSORS arising under this Agreement prior to termination.

7.3    Survival on Termination or Expiration.  The following Paragraphs and Articles shall survive the termination or expiration of this Agreement:

    (a)   Paragraph 3.2  (Payment of Past Patent Costs)

    (b)   Article 4 (REPORTS, RECORDS AND PAYMENTS);

 

    (c)    Paragraph 7.4 (Disposition of Licensed Products on Hand);

    (d)    Article 8 (LIMITED WARRANTY AND INDEMNIFICATION);

    (e)    Article 9 (USE OF NAMES AND TRADEMARKS);

    (f)    Paragraph 10.3 hereof (Secrecy);

    (g)    Paragraph 10.6 (Failure to Perform); and

    (h)    Paragraph 10.6 (Governing Laws).

7.4    Disposition of Licensed Products on Hand.  Upon termination of this Agreement, LICENSEE may dispose of all previously made or partially made Licensed Product within a period of one hundred and twenty (120) days of the effective date of such termination provided that the sale of such Licensed Product by LICENSEE, its Sublicensees, or Affiliates shall be subject to the terms of this Agreement, including but not limited to the rendering of reports and payment of royalties required under this Agreement.

  

  

  

ARTICLE 8.  LIMITED WARRANTY AND INDEMNIFICATION

8.1    Limited Warranty.

(a) LICENSORS each warrant that it has the lawful right to grant this license.

(b) The license granted herein is provided “AS IS” and without WARRANTY OF MERCHANTABILITY or WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE or any other warranty, express or implied.  LICENSORS make no representation or warranty that the Licensed Product, Licensed Method or the use of Patent Rights will not infringe any other patent or other proprietary rights.

(c) Except for LICENSEE’s duties for claims of third parties under Paragraph 8.2., in no event shall LICENSORS be liable for any incidental, special or consequential damages resulting from exercise of the license granted herein or the use of the Invention, Licensed Product, and/or Licensed Method.

(d) Nothing in this Agreement shall be construed as:

(i) a warranty or representation by LICENSORS, individually or collectively, as to the validity or scope of any Patent Rights;

(ii) a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or shall be free from infringement of patents of third parties;

(iii) an obligation to bring or prosecute actions or suits against third parties for patent infringement except as provided in Paragraph 5.2 hereof;

(iv) conferring by implication, estoppels or otherwise any license or rights under any patents of LICENSORS other than Patent Rights as defined in this Agreement, regardless of whether those patents are dominant or subordinate to Patent Rights; or

(v) an obligation to furnish any know-how not provided in Patent Rights.

  

  

  

8.2     Indemnification.

(a) LICENSEE shall indemnify, hold harmless and defend UNIVERSITY, its officers, employees, and agents; the sponsors of the research that led to the Invention; and the Inventors of the patents and patent applications in Patent Rights and their employers against any and all claims, suits, losses, damage, costs, fees, and expenses resulting from or arising out of exercise of this license or any Sublicense.  This indemnification shall include, but not be limited to, any product liability.

 

(b) LICENSEE, at its sole cost and expense, shall insure its activities in connection with the work under this Agreement and obtain, keep in force and maintain insurance or an equivalent program of self insurance as follows:

 

(i)        Each Occurrence:                                                   5M

    Products/Completed Operations Aggregate:           10M

    Personal and Advertising:                                           5M

    General Aggregate (commercial form only):              10M

 If the above insurance is written on a claims-made form, it shall continue for three (3) years following termination or expiration of this Agreement. The insurance shall have a retroactive date of placement prior to or coinciding with the Effective Date

(ii) Worker’s Compensation as legally required in the jurisdiction in which the LICENSEE is doing business; and

(iii) the coverage and limits referred to above shall not in any way limit the liability of LICENSEE.

(c) LICENSEE shall furnish UNIVERSITY with certificates of insurance showing compliance with all requirements.  Such certificates shall: (i) provide for thirty (30) day advance written notice to UNIVERSITY of any modification; (ii) indicate that UNIVERSITY has been endorsed as an additionally insured party under the coverage referred to above; and (iii) include a provision that the coverage shall be primary and shall not participate with nor shall be excess over any valid and collectable insurance or program of self-insurance carried or maintained by UNIVERSITY.

(d) UNIVERSITY shall notify LICENSEE in writing of any claim or suit brought against UNIVERSITY in respect of which UNIVERSITY intends to invoke the provisions of this Article.  LICENSEE shall keep UNIVERSITY informed on a current basis of its defense of any claims under this Article. LICENSEE will not settle any claim against UNIVERSITY without UNIVERSITY’s written consent, where (a) such settlement would include any admission of liability or admission of wrong doing on the part of the indemnified party, (b) such settlement would impose any restriction on UNIVERSITY/indemnified party’s conduct of any of its activities, or (c) such settlement would not include an unconditional release of UNIVERSITY/indemnified party from all liability for claims that are the subject matter of the settled claim.

  

  

  

 

(e) LICENSEE shall indemnify and insure DFCI as referenced in paragraph 10.1 and Exhibit B herein.

ARTICLE 9.  USE OF NAMES AND TRADEMARKS

9.1               Nothing contained in this Agreement confers any right to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of any party hereto (including contraction, abbreviation or simulation of any of the foregoing).  Unless required by law, the use by LICENSEE of the name, “The Regents of the University of California” or the name of any campus of the University of California or DFCI is prohibited, without the express written consent of UNIVERSITY and/or DFCI as applicable.

9.2               LICENSORS may disclose to the Inventors the terms and conditions of this Agreement upon their request.  If such disclosure is made, LICENSORS shall request the Inventors not disclose such terms and conditions to others.

9.3               LICENSORS may acknowledge the existence of this Agreement and the extent of the grant in Article 2 to third parties, but LICENSORS shall not disclose the financial terms of this Agreement to third parties, except where LICENSORS are required by law to do so, such as under the California Public Records Act. LICENSEE hereby grants permission for UNIVERSITY (including UCSD)  and DFCI to include LICENSEE’s name and a link to LICENSEE’s website in UNIVERSITY’s, UCSD’s and DFCI’s annual reports and on UNIVERSITY’s (including UCSD’s) and/or DFCI’s websites that showcase technology transfer-related stories.

 

ARTICLE 10.  MISCELLANEOUS PROVISIONS

10.1           DFCI Required Terms.  Under the IIA, DFCI requires certain terms and conditions for license agreements.  These are attached as Exhibit A and incorporated into this agreement by reference.

10.2           Correspondence.  Any notice or payment required to be given to either party under this Agreement shall be deemed to have been properly given and effective:

                 (a)  on the date of delivery if delivered in person or by courier service, or

 (b)  five (5) days after mailing if mailed by first-class or certified mail, postage paid, to the respective addresses given below, or to such other address as is designated by written notice given to the other party.

 

  

  

  

If sent to LICENSEE:

Adamis Pharmaceuticals, Inc.

2658 Del Mar Heights Road #555; Del Mar, CA  92014

Attention: Dennis Carlo, CEO

                         Phone:  858-401-3984

Fax:  866.893.3622

If sent to UNIVERSITY by mail:

University of California, San Diego

Technology Transfer Office

                9500 Gilman Drive

Mail Code 0910

La Jolla, CA 92093-0910

Attention:  Assistant Vice Chancellor

           If sent to UNIVERSITY by courier:

University of California, San Diego

Technology Transfer Office

10300 North Torrey Pines Road

Torrey Pines Center North, First Floor

La Jolla, CA 92037

Attention:  Assistant Vice Chancellor

If sent to DFCI :

Dana Farber Cancer Institute

Office of Research and Technology Ventures

44 Binney Street - BP304E

Boston, MA 02115

Telephone: (617) 632-2118

Fax: (617) 632-4012

Attn :  Anthony A.  del Campo, MBA

10.3    Secrecy.                                

(a)  “Confidential Information” shall mean information, relating to the Invention and disclosed by LICENSORS to LICENSEE or by LICENSEE to LICENSORS during the term of this Agreement, which if disclosed in writing shall be marked “Confidential”, or if first disclosed otherwise, shall within thirty (30) days of such disclosure be reduced to writing by the disclosing party and sent to the receiving party:

  

  

  

 

(b)  LICENSEE shall:

(i) use the Confidential Information for the sole purpose of performing under the terms of this Agreement;

(ii) safeguard Confidential Information against disclosure to others with the same degree of care as it exercises with its own data of a similar nature;

(iii) not disclose Confidential Information to others (except to its employees, agents or consultants who are bound to the receiving party by a like obligation of confidentiality) without the express written permission of the disclosing party, except that the receiving party shall not be prevented from using or disclosing any of the Confidential Information that:

	
  

	
(A)

	
the receiving party can demonstrate by written records was previously known to it;

	
  

	
(B)

	
is now, or becomes in the future, public knowledge other than through acts or omissions of the receiving party;

 

 

	
  

	
(C)

	
is lawfully obtained by the receiving party from sources independent of the disclosing party; or

	
  

	
(D)

	
is required to be disclosed by law or a court of competent jurisdiction; and

	 	
 (c) The secrecy obligations of the receiving party with respect to Confidential Information shall continue for a period ending five (5) years from the termination date of this Agreement.

10.4           Assignability.  This Agreement may be assigned by LICENSORS, but is personal to LICENSEE and assignable by LICENSEE only with the written consent of LICENSORS.  Notwithstanding the foregoing, LICENSEE may assign this Agreement and the rights and obligations contained herein, without the prior written consent of LICENSORS: (i) to an Affiliate of LICENSEE; or (ii) to any third party in connection with the sale of all or part of LICENSEE’s business or assets relating to this Agreement, provided that LICENSEE notifies UNIVERSITY of the assignment and the assignee agrees to be bound in writing by the terms and conditions of this Agreement.  This Agreement will be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

 10.5           No Waiver.  No waiver by either party of any breach or default of any covenant or agreement set forth in this Agreement shall be deemed a waiver as to any subsequent and/or similar breach or default.

 

  

  

  

 

10.6           Failure to Perform.  In the event of a failure of performance due under this Agreement and if it becomes necessary for either party to undertake legal action against the other on account thereof, then the prevailing party shall be entitled to reasonable attorney’s fees in addition to costs and necessary disbursements.

10.7           Governing Laws.  THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any patent or patent application shall be governed by the applicable laws of the United States.

10.8           Force Majeure.  A party to this Agreement may be excused from any performance required herein if such performance is rendered impossible or unfeasible due to any catastrophe or other major event beyond its reasonable control, including, without limitation, war, riot, and insurrection; laws, proclamations, edicts, ordinances, or regulations; strikes, lockouts, or other serious labor disputes; and floods, fires, explosions, or other natural disasters.  When such events have abated, the non-performing party’s obligations herein shall resume.

10.9           Headings.  The headings of the several sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

10.10           Entire Agreement.  This Agreement embodies the entire understanding of the parties and supersedes all previous communications, representations or understandings, either oral or written, between the parties relating to the subject matter hereof.

10.11           Amendments.  No amendment or modification of this Agreement shall be valid or binding on the parties unless made in writing and signed on behalf of each party.

10.12           Severability.  In the event that any of the provisions contained in this Agreement is held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if the invalid, illegal, or unenforceable provisions had never been contained in it.

SIGNATURES ON THE FOLLOWING PAGE

RMM 022411; 2000-051/DFCI

  

  

  

IN WITNESS WHEREOF, UNIVERSITY, DFCI and LICENSEE have executed this Agreement, in triplicate originals, by their respective and duly authorized officers on the day and year written.

 

	
ADAMIS PHARMACEUTICALS, INC.  

	  	
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA:

	 	 	 
	  	  	  
	

/s/DAVID J. MARGUGLIO

	  	

/s/JANE MOORES

	David J. Marguglio 	  	Jane Moores, Ph.D.
	Senior Vice President	  	

Assistant Vice Chancellor-echnology Transfer

	 	 	 
	 	 	 
	 	 	 
	Date: April 15, 2011  	 	Date: April 18, 2011

 

	

DANA-FARBER CANCER INSTITUTE, INC,.

	  
	 	 
	  	  
	

/s/ANTHONY DEL CAMPO

	  
	Anthony del Campo, MBA, CLP	  
	VP, Research and Technology Ventures	  

Date: April 19, 2011

 

  

  

  

 

EXHIBIT A

DFCI Required Terms and Conditions for Licenses

Indemnification and Defense.

Licensee shall indemnify, defend and hold harmless DFCI and its trustees officers, medical and professional staff, employees, and agents and their respective successors, heirs and assigns (the "Indemnitees"), against any liability, damage, loss or expense (including reasonable attorneys' fees and expenses of litigation) incurred by or imposed upon the Indemnitees, or any one of them, in connection with any claims, suits, actions, demands or judgments (a) arising out of the design, production, manufacture, sale, use in commerce, lease, or promotion by  Licensee or by a Sublicensee, Affiliate or agent of  Licensee, or any product, process or service relating to, or developed pursuant to, this Agreement or (b) arising out of any other activities to be carried out pursuant to this Agreement.

Licensee's indemnification under clause (a) in the paragraph just above applies to any liability, damage, loss or expense whether or not it is attributable to the negligent activities of the Indemnitees.  Licensee's indemnification under clause (b) in the paragraph just above does not apply to any liability, damage, loss or expense to the extent that it is attributable to (a) the negligent activities of the Indemnitees, or (b) the intentional wrongdoing or intentional misconduct of the Indemnitees.

Licensee shall, at its own expense, provide attorneys reasonably acceptable to DFCI to defend against any actions brought or filed against any party indemnified hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought.

If any such action is commenced or claim made or threatened against DFCI or other Indemnitees as to which Licensee is obligated to indemnify it (them) or hold it (them) harmless, DFCI or the other Indemnitees shall promptly notify Licensee of such event. Licensee shall assume the defense of, and may settle, that part of any such claim or action commenced or made against DFCI (or other Indemnitees) which relates to Licensee’s indemnification and Licensee may take such other steps as may be necessary to protect it. Licensee will not be liable to DFCI or other Indemnitees on account of any settlement of any such claim or litigation affected without Licensee’s consent.  The right of Licensee to assume the defense of any action is limited to that part of the action commenced against DFCI and/or Indemnitees that relates to Licensee’s obligation of indemnification and holding harmless.

Licensee shall require any Affiliates or Sublicensee(s) to indemnify hold harmless and defend DFCI under the same terms set forth in the four preceding paragraphs.

  

  

  

Insurance.

At such time as any product, process or service relating to, or developed pursuant to, this Agreement is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by Licensee or by a Sublicensee, Affiliate or agent of Licensee, Licensee shall, at its sole cost and expense, procure and maintain policies of commercial general liability insurance in amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate and naming the Indemnitees as additional insureds.  Such commercial general liability insurance must provide (a) product liability coverage and (b) contractual liability coverage for Licensee's indemnification obligations under the preceding section of this Agreement.  If Licensee elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $250,000 annual aggregate), such self-insurance program must be acceptable to the DFCI and the DFCI's associated Risk Management Foundation.  The minimum amounts of insurance coverage required under these provisions may not be construed to create a limit of Licensee's liability with respect to its indemnification obligation under these sections of this Agreement.

Licensee shall provide DFCI with written evidence of such insurance upon request of DFCI. Licensee shall provide DFCI with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if Licensee does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, DFCI has the right to terminate this Agreement effective at the end of such fifteen (15) day period without any notice or additional waiting periods.

Licensee shall maintain such comprehensive general liability insurance beyond the expiration or termination of this Agreement during (a) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by Licensee or by a Sublicensee, Affiliate or agent of Licensee and (b) a reasonable period after the period referred to in the first paragraph above of this section which in no event shall be less than fifteen (15) years.

Licensee shall require any Affiliates or Sublicensee(s) to maintain insurance in favor of DFCI and the Indemnitees under the same terms set forth in the first paragraph of this section.ex-10_44.htm

Adamis Pharmaceuticals Corporation 10-K

 

Exhibit 10.44

 

Agreement No. 06-0524

 

STANDARD EXCLUSIVE START-UP COMPANY LICENSE AGREEMENT

 

This Agreement is made effective the 26th day of January, 2007, by and between Wisconsin Alumni Research Foundation (hereinafter called "WARF"), a nonstock, nonprofit Wisconsin corporation, and Colby Pharmaceutical Company (hereinafter called "Licensee"), a corporation organized and existing under the laws of Delaware;

 

WHEREAS, WARF owns certain intellectual property rights in the inventions described in the "Licensed Patents" defined below, and WARF is willing to grant a license to Licensee under any one or all of the Licensed Patents and Licensee desires a license under all of them;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties covenant and agree as follows:

 

Section 1.                      Definitions.

 

For the purpose of this Agreement, the Appendix A definitions shall apply.

 

Section 2.                      Grant.

 

A.           License.

 

WARF hereby grants to Licensee an exclusive (subject to Section 2C and Section 14) and sublicensable (pursuant to Section 2B) right and license under the Licensed Patents to make, have made, use, offer to sell, sell (directly or indirectly), improve, import and export Products in the Licensed Field and Licensed Territory.

 

B.           Sublicenses.

 

(i)           Licensee may grant written, exclusive or non-exclusive sublicenses to third parties. Licensee shall have the same responsibility for the activities of any sublicensee as if the activities were directly those of Licensee. Licensee shall provide WARF with the name, contact information and address of any sublicensee as well as information regarding the number of full-time employees of any such sublicensee to allow WARF to determine whether it can maintain its small entity filing status for patent prosecution and maintenance purposes. In the event of termination of this Agreement, all outstanding sublicense agreements, not in default, will be assigned by Licensee to WARF and the sublicenses will remain in full force and effect with WARF as the licensor instead of Licensee, but the sublicenses will be automatically conformed so that the duties of WARF under the sublicenses will not be greater than the duties of WARF under this Agreement, and the rights of WARF under the sublicenses will not be less than the rights of WARF under this Agreement, including all financial consideration and other rights of WARF. Any agreement granting a sublicense shall contain provisions corresponding to those of this Section 2B respecting termination and the conditions of continuation of sublicenses.

 

(ii)           With respect to sublicenses granted by Licensee under this Section 2B, Licensee shall pay to WARF an amount equal to what Licensee would have been required to pay to WARF had Licensee sold the amount of Products sold by such sublicensee. In addition, if Licensee receives any fees or other payments in consideration for any rights granted under a sublicense, and such fees or payments are not based directly upon the amount or value of Products sold by the sublicensee or provided as a reimbursement for actual research and development costs incurred by Licensee under a

 

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research contract between Licensee and the sublicensee, then Licensee shall pay to WARF a percentage of such payments (excluding, for avoidance of doubt, any sublicense royalty payments or payments made by such sublicensee against any portion of the milestone payment obligations of Section 4D that Licensee imposes on such sublicensee) according to the following schedule:

 

(1)           forty percent (40%) of amounts received under each agreement entered into before an Investigational New Drug ("IND") application is filed by Licensee with the Federal Drug Administration ("FDA") for a Product made a subject of the sublicense;

 

(2)           thirty percent (30%) of amounts received under each agreement entered into after the filing of an lND under item (1) above until completion of a Phase I clinical trial by Licensee for that Product;

 

(3)           twenty-five percent (25%) of amounts received under each agreement entered into after completion of item (2) above until completion of a Phase II clinical trial by Licensee for that Product;

 

(4)           twenty percent (20%) of amounts received under each agreement entered into after completion of item (3) above until a New Drug Application ("NDA") has been approved by the FDA for that Product; and

 

(5)           ten percent (10%) of amounts received under each agreement  entered into after the NDA has been approved by the FDA for that Product.

 

Licensee shall not receive from sublicensees anything of value in lieu of cash payments in consideration for any sublicense under this Agreement without the express prior written permission of WARF; provided, however, that in no event shall this limitation be construed to preclude Licensee from receiving materials, assistance or other non-cash consideration from such sublicensee that is reasonably intended to facilitate Licensee's fulfillment of its performance obligations under the applicable sublicense agreement. Any payments owing to WARF hereunder shall be made in the manner specified in Section 4F below.

 

C.           Reservation of Rights.

 

WARF hereby reserves the right to grant non-profit research institutions and governmental agencies non-exclusive licenses to practice and use the inventions of the Licensed Patents for Non-­Commercial Research Purposes. WARF agrees to provide Licensee at least thirty (30) days prior notice before granting any such license to give Licensee the opportunity to discuss with WARF the merits thereof WARF, the University of Wisconsin and the inventors of the Licensed Patents shall have the right to publish any information included in the Licensed Patents.

 

Section 3.                      Development.

 

A.           Licensee shall use reasonable efforts to diligently develop, manufacture, market and sell Products in each Licensed Field and Licensed Territory throughout the term of this Agreement. Such activities shall include, without limitation, those activities listed in the Development Plan attached hereto as Appendix E. Licensee agrees that said Development Plan is reasonable and that it shall take all reasonable steps to meet the development program as set forth therein.

 

B.           Beginning in calendar year 2007 and until the Date of First Commercial Sale, Licensee shall provide WARF with a written Development Report summarizing Licensee's development activities since the last Development Report and any necessary adjustments to the Development Plan. Licensee agrees to provide each Development Report to WARF on or before thirty (30) days from the end of each semi-annual period ending June 30 and December 31 for which a report is due, and shall set forth in each Development Report sufficient detail to enable WARF to ascertain Licensee's progress toward the

 

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requirements of the Development Plan. WARF reserves the right to audit Licensee's records relating to the development activities required hereunder. Such record keeping and audit procedures shall be subject to the procedures and restrictions set forth in Section 6 for auditing the financial records of Licensee.

 

C.           Licensee agrees to and warrants that it intends to develop Products for the commercial market. Licensee acknowledges that any failure by Licensee to reasonably implement the Development Plan, or any failure by Licensee to make timely submission to WARF of any Development Report, or Licensee's provision of information to WARF regarding Licensee's development activities hereunder that is intentionally false, shall be a material breach of this Agreement.

 

D.           Licensee further agrees to meet the following Milestones:

 

(i)           Licensee will submit a revised business plan to WARF within three (3) months of the effective date of this Agreement.

 

(ii)           Licensee will obtain or access at least $750,000 in cumulative funding from all sources other than non-convertible debt instruments, including but not limited to grant funds, by December 31, 2008.

 

(iii)           Licensee will obtain or access at least $2 million in cumulative funding from all sources other than non-convertible debt instruments, including but not limited to grant funds, by December 31, 2009.

 

(iv)           Licensee will obtain or access at least $3.25 million in cumulative funding from all sources other than non-convertible debt instruments, including but not limited to grant funds, by December 31, 2010.

 

(v)           Licensee will file an IND on a Product by December 31, 2009.

 

(vi)           Licensee will enroll its first patient under a Phase II clinical trial on a Product by December 31, 2013.

 

(vii)           Licensee will file an NDA on a Product by December 31, 2019.

 

The Milestones set forth in Section 3D(i)-(iv) are collectively referred to herein as the "Funding Milestones." The Milestones set forth in Section 3D(v)-(vii) are collectively referred to herein as the "Commercialization Milestones." Notwithstanding anything herein to the contrary, WARF's sole and exclusive remedy for Licensee's failure to meet the Funding Milestones shall be as set forth in Section 7D below and for Licensee's failure to meet the Commercialization Milestones shall be as set forth in Section 7E below.

 

Section 4.                      Consideration.

 

A.           License Fee.

 

In lieu of the license fees that would traditionally be charged for the license granted hereunder, Licensee agrees, pursuant to the Equity Agreement between the parties, to issue to WARF seven hundred and fifty thousand (750,000) shares of common stock, which number equals seven and one half percent (7.5%) of the outstanding capital shares of Licensee as of the date hereof.

 

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B.           Royalty.

 

(i)           In addition to the equity granted under Section 4A, Licensee agrees to pay to WARF as "earned royalties" a royalty calculated as a percentage of the Net Sales of Products covered by a Valid Claim in a country where such Product is used, manufactured, sold or otherwise transferred. The royalty is deemed earned as of the earlier of the date the Product is actually sold and paid for, the date an invoice is sent by Licensee or its sublicensee(s), or the date a Product is transferred to a third party for any promotional reasons. The royalty shall remain fixed while this Agreement is in effect at a rate of five percent (5%) of the Net Sales of those Products covered by a Valid Claim in a country where such Product is used, manufactured, sold or otherwise transferred.

 

(ii)           If Licensee is required to pay royalties to one or more independent third parties during any calendar year to obtain a license or similar right in the absence of which Licensee could not legally make, use or sell Products, the royalty payable to WARF may be reduced according to a one-to-one percentage ratio, based on the percentage of royalty due to the independent third party(ies). For example, if such royalty agreement with an independent third party requires that Licensee pay a one-half of one percent (0.5%) royalty fee to that party, Licensee may reduce the royalty due WARF by one-half of one percent (0.5%). To provide another example, if such royalty agreement with an independent third party requires that Licensee pay a one and one half percent (1.5%) royalty fee to that party, Licensee may reduce the royalty due WARF by one and one half percent (1.5%). Notwithstanding the foregoing, in no event shall the royalty due WARF be reduced to less than two and one-half percent (2.5%).

 

C.           Minimum Royalty.

 

Licensee further agrees to pay to WARF a minimum royalty of $25,000 per calendar year or part thereof during which this Agreement is in effect starting in calendar year 2020, against which any earned royalty paid for the same calendar year will be credited. The minimum royalty for a given year shall be due at the time payments are due for the calendar quarter ending on December 31. It is understood that the minimum royalties will apply on a calendar year basis, and that sales of Products requiring the payment of earned royalties made during a prior or subsequent calendar year shall have no effect on the annual minimum royalty due WARF for any given calendar year.

 

D.           Milestone Payments.

 

Licensee further agrees to pay to WARF milestone payments as outlined below within thirty (30) days from the specified event, whether achieved by or on behalf of Licensee or its sublicensee(s).

 

(i)           $25,000 upon the filing of the first IND or comparable regulatory filing for a human therapeutic Product.

 

(ii)           $150,000 upon the enrollment of its first patient under a Phase II clinical trial for the first human therapeutic Product.

 

(iii)           $200,000 upon the enrollment of its first patient under a Phase III clinical trial for the first human therapeutic Product.

 

(iv)           $250,000 for the first NDA or comparable regulatory approval for a human therapeutic Product.

 

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WARF acknowledges that Licensee is only obligated to make one milestone payment to WARF under this Agreement for each of the above milestones and that License will not be obligated to make a second payment for any subsequent occurrence of the same milestone.

 

E.           Patent Fees and Costs.

 

(i)           Licensee also agrees to reimburse WARF for all reasonable documented out of pocket costs incurred by WARF in filing, prosecuting and maintaining the Licensed Patents during the term of this Agreement. All such amounts shall accrue for a period of four (4) years after the Effective Date ("Accrual Period"), at which time WARF shall begin invoicing Licensee on an annual basis. Amounts accrued during the Accrual Period shall be paid to WARF in four (4) equal annual installments beginning on the four (4) year anniversary date of the Effective Date. Within thirty (30) days of the end of each year during the Accrual Period, WARF shall provide Licensee with a report detailing the costs and expenses to be reimbursed to WARF under this Section 4E(i). All costs incurred by WARF after the Accrual Period shall be billed on an annual basis and shall be in addition to any accrued amounts then owed to WARF. All amounts due to WARF under this Section 4E shall be paid within thirty (30) days of receiving an invoice from WARF.

 

(ii)           WARF is not obligated to make or maintain any foreign filing of the Licensed Patents, except as expressly requested by Licensee pursuant to this Section 4E. WARF shall notify Licensee in writing ninety (90) days prior to the expiration of the deadline for making or maintaining such foreign filings, and if Licensee desires WARF to make or maintain such foreign filings, Licensee must notify WARF in writing forty-five (45) days prior to the expiration of the deadline for making or maintaining such foreign filings, indicating those countries in which Licensee desires WARF to pursue foreign patent protection. WARF reserves the right to file a patent application, at its own expense, in any countries or territories not requested by Licensee ("Non-Elected Territories"), provided that WARF has specifically notified Licensee of its intent to pursue such patent protection and Licensee has specifically, in writing, declined to have WARF pursue such patent protection on its behalf pursuant to this Section 4E. In the event that WARF elects to file any patent applications in Non-Elected Territories, WARF hereby grants Licensee a right of first negotiation for the exclusive rights to any patents or patent applications for the Non-Elected Territories, and WARF shall not sublicense any of its rights to the patents and patent applications in the Non-Elected Territories to any third party without providing Licensee the right of first negotiation as provided in this Section 4E(ii). WARF shall promptly notify Licensee in writing of its intent to license the rights in the Non-Elected Territories and provide a good faith commercially reasonable proposal for such license ("Initial Notice"). Licensee shall notify WARF in writing within sixty (60) days of its receipt of the Initial Notice as to whether Licensee wishes to obtain such license. If Licensee elects to license such rights, the parties shall negotiate such license in good faith. If Licensee elects not to license such rights, or if the parties are unable to reach agreement on the license proposed in the Initial Notice, within three (3) months of Licensee's receipt of the Initial Notice, WARF shall be free to enter into discussions with third parties to license rights in the Non-Elected Territories. Licensee acknowledges that if the United States Government (through any of its agencies or otherwise) has funded research, during the course of or under which any of the inventions of the Licensed Patents were conceived or made, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. § 200-212 and applicable regulations of Chapter 37 of the Code of Federal Regulations, to make and maintain foreign filings in those countries not selected by Licensee and/or WARF.

 

(iii)           WARF will prosecute all national applications it files at Licensee's request pursuant to this Section 4E until WARF determines that continued prosecution is unlikely to result in the issuance of a patent in that country. Licensee shall have the right to review and comment on any significant prosecution actions and correspondences received pertaining to the filing, prosecution and

 

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maintenance of the Licensed Patents. WARF shall forward a copy of such actions and correspondence to Licensee within thirty (30) days of their receipt by WARF. WARF shall review and consider in good faith the opinions and proposals submitted by Licensee if such opinions and proposals are provided to WARF within thirty (30) days from the date WARE provided the copy of the action or correspondence to Licensee. If WARF decides to abandon prosecution or maintenance of any patent or patent application under the Licensed Patents in a country in which Licensee has requested WARF to make and maintain such filing, WARF shall provide Licensee notice of WARF's intent to abandon such patent or patent application in writing forty-five (45) days prior to the expiration of the deadline for abandonment. In such event, Licensee shall have the right to continue maintenance or prosecution of said patent or patent application, at its own expense, on behalf of WARF and Licensee, to the extent allowed under applicable law.

 

F.           Accounting; Payments.

 

(i)           Amounts owing to WARE under Sections 2B and 4B shall be paid on a quarterly basis, with such amounts due and received by WARF on or before the thirtieth (30th) day following the end of the calendar quarter ending on March 31, June 30, September 30 or December 31 in which such amounts were earned. The balance of any amounts which remain unpaid more than sixty (60) days after they are due to WARF shall accrue interest until paid at the rate of the lesser of one percent (1%) per month or the maximum amount allowed under applicable law. However, in no event shall this interest provision be construed as a grant of permission for any payment delays.

 

(ii)           Except as otherwise directed, all amounts owing to WARF under this Agreement shall be paid in U.S. dollars to WARF at the address provided in Section 16(a). All royalties owing with respect to Net Sales stated in currencies other than U.S. dollars shall be converted at the rate shown in the Federal Reserve Noon Valuation - Value of Foreign Currencies on the day preceding the payment. WARF is exempt from paying income taxes under U.S. law. Therefore, all payments due under this Agreement shall be made without deduction for taxes, assessments, or other charges of any kind which may be imposed on WARF by any government outside of the United States or any political subdivision of such government with respect to any amounts payable to WARF pursuant to this Agreement. All such taxes, assessments, or other charges shall be assumed by Licensee or its sublicensee(s).

 

(iii)           A full accounting showing how any amounts owing to WARF under Sections 2B and 4B have been calculated shall be submitted to WARF on the date of each such payment. Such accounting shall be on a per-country and product line, model or tradename basis and shall be summarized on the form shown in Appendix C of this Agreement. In the event no payment is owed to WARF, a statement setting forth that fact shall be supplied to WARF.

 

Section 5.                      Certain Warranties of WARF.

 

A.           WARF warrants that except as otherwise provided under Section 14 of this Agreement with respect to U.S. Government interests, it is the owner of the Licensed Patents or otherwise has the right to grant the licenses granted to Licensee in this Agreement. However, nothing in this Agreement shall be construed as:

 

(i)           a warranty or representation by WARF as to the validity or scope of any of the Licensed Patents;

 

(ii)           a warranty or representation that anything made, used, sold or otherwise disposed of under the license granted in this Agreement will or will not infringe patents of third parties; or

 

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(iii)           an obligation to furnish any know-how not provided in the Licensed Patents or any services other than those specified in this Agreement.

 

B.           WARF MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER DISPOSITION BY LICENSEE, ITS SUBLICENSEES OR THEIR VENDEES OR OTHER TRANSFEREES OF PRODUCTS INCORPORATING OR MADE BY USE OF INVENTIONS LICENSED UNDER THIS AGREEMENT.

 

C.           Licensee represents and warrants that Products sold in the U.S. and produced under the license granted herein shall be manufactured substantially in the United States as required by 35 U.S.C § 204 and applicable regulations of Chapter 37 of the Code of Federal Regulations, unless the Federal agency that funded the applicable invention waives such requirement.

 

Section 6.                      Recordkeeping.

 

A.           Licensee and its sublicensee(s) shall keep books and records sufficient to verify the accuracy and completeness of Licensee's and its sublicensee(s)'s accounting referred to above, including without limitation inventory, purchase and invoice records relating to the Products or their place of manufacture. In addition, Licensee shall maintain documentation evidencing that Licensee is in fact pursuing development of Products as required herein. Such documentation may include, but is not limited to, invoices for studies advancing development of Products, laboratory notebooks, and filings made to the Internal Revenue Department to obtain tax credit, if available, for research and development of Products. Such books and records shall be preserved for a period not less than six (6) years after they are created during and after the term of this Agreement.

 

B.           Within thirty (30) days of WARF's request, Licensee and each of its sublicensee(s) shall take all reasonable steps necessary so that WARF may review at a single location for Licensee and at single locations for each sublicensee, all of the relevant books and records to allow WARF to verify the accuracy of Licensee's and its sublicensee(s)'s royalty reports and Development Reports. Once per year during the term of this Agreement WARF may conduct such review, which review may be performed by any employee of WARF as well as by any attorney or registered CPA designated by WARF, upon reasonable notice and during regular business hours.

 

C.           If a royalty payment deficiency is determined, Licensee shall pay the royalty deficiency outstanding within thirty (30) days of receiving written notice thereof, plus interest on outstanding amounts as described in Section 4F(i).

 

D.           If a royalty payment deficiency for a calendar year exceeds five percent (5%) of the royalties paid for that year, then Licensee shall be responsible for paying WARF's reasonable, documented out-of-pocket expenses incurred with respect to such review.

 

Section 7.                      Term and Termination.

 

A.           The term of this license shall begin on the effective date of this Agreement and continue until this Agreement is terminated as provided herein or until the date that no Licensed Patent remains an enforceable patent.

 

B.           Licensee may terminate this Agreement at any time for any reason by giving at least ninety (90) days' written and unambiguous notice of such termination to WARF.  Such a notice shall

 

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be accompanied by a statement of the reasons for termination, which shall have no bearing on the effectiveness of such termination.

 

   C.           WARF may terminate this Agreement by giving Licensee at least ninety (90) days written notice if the Date of First Commercial Sale does not occur on or before December 31, 2020.

 

D.           In the event that Licensee fails to meet any Funding Milestones, WARF may terminate this Agreement if upon thirty (30) days' written and unambiguous notice Licensee fails to meet that Funding Milestone. The termination of this Agreement under this Section 7D shall in no way be understood to provide Licensee the right to receive a refund of the equity securities provided as a license fee under Section 4A or relieve Licensee of its obligation to provide such equity securities to WARF as provided in the Equity Agreement.

 

E.           WARF may terminate this Agreement by giving Licensee at least ninety (90) days written notice if Licensee fails to meet a Commercialization Milestone. The termination of this Agreement under this Section 7E shall in no way be understood to provide Licensee the right to receive a refund of the equity securities provided as a license fee under Section 4A or relieve Licensee of its obligation to provide such equity securities to WARF as provided in the Equity Agreement.

 

F.           If Licensee at any time defaults in the timely payment of any monies due to WARF or the timely submission to WARF of any Development Report or commits any material breach of any other covenant herein contained and Licensee fails to remedy any such material breach within ninety (90) days after written notice thereof by WARF, or if Licensee files a petition under any bankruptcy or insolvency act, or has any such petition filed against it which is not dismissed within sixty (60) days, or offers any component of the Licensed Patents to its creditors as collateral, WARF may, at its option, terminate this Agreement by giving notice of termination to Licensee.

 

G.           Upon the termination of this Agreement, Licensee and its sublicensee(s) shall remain obligated to provide an accounting for and to pay royalties earned up to the date of the termination and any minimum royalties shall be prorated as of the date of termination by the number of days elapsed in the applicable calendar year.

 

H.           Upon the termination of this Agreement, Licensee shall pay to WARF, within thirty (30) days of termination, any unpaid patent fees accrued under Section 4D prior to the date of termination, including any patent fees accrued during the Accrual Period.

 

I.           Waiver by either party of a single breach or default, or a succession of breaches or defaults, shall not deprive such party of any right to terminate this Agreement in the event of any subsequent breach or default.

 

Section 8.                      Assignability.

 

This Agreement may not be transferred or assigned by Licensee without the prior written consent of WARF, which shall not be unreasonably withheld; except however, that Licensee may assign this Agreement, and all of its rights hereunder, to a person or entity that acquires all or substantially all of the business or assets of Licensee (or that portion thereof to which this Agreement pertains) in each case whether by merger, acquisition, operation of law or otherwise, provided that such assignee agrees in writing to be bound by the terms and conditions of this Agreement. Subject to the foregoing, this Agreement shall bind and inure to the benefit of each party's permitted successors or assigns.

 

Section 9.                      Contest of Validity.

 

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In the event Licensee or its sublicensee(s) contests the validity of any Licensed Patent, Licensee shall continue to pay royalties with respect to that patent as if such contest were not underway until the patent is adjudicated invalid or unenforceable by a court of last resort.

 

Section 10.                      Enforcement.

 

A.           WARF intends to protect the Licensed Patents against infringers or otherwise act to eliminate infringement, when, in WARF's sole judgment, such action may be reasonably necessary, proper, and justified. In the event that Licensee believes there is infringement of any Licensed Patent under this Agreement which is to Licensee's substantial detriment, Licensee shall provide WARF with notification and reasonable evidence of such infringement. WARF shall have the sole and exclusive right to determine whether or not any action should be taken regarding any infringement of the Licensed Patents (at WARF's cost and for WARF's benefit), and such proceedings shall be under the exclusive control of WARF. Upon request by WARF, Licensee shall take action, join in an action, and otherwise provide WARF with such assistance and information as may be reasonable and useful to WARF in connection with WARF's taking such action (if the cause of action arose during the term of this Agreement and WARF reimburses Licensee for Licensee's reasonable out-of-pocket expenses). Any recovery of damages by WARF as a result of such action shall be applied first in pro-rata satisfaction of any un-reimbursed expenses and attorneys' fees of WARF and of Licensee, if any, relating to the action. The balance remaining from any such recovery shall be distributed seventy-five (75%) to WARF and twenty-five (25%) to Licensee.

 

B.           If any infringement of the Licensed Patents which is to the substantial detriment of Licensee has not been discontinued within six (6) months after written request by Licensee to WARF, and WARF has not by the end of such period taken reasonable action intended to abate or terminate the infringing action as soon as possible, and Licensee's rights are still exclusive hereunder, Licensee shall have the right, upon receipt of WARF's written consent, to file a lawsuit to seek to stop such activity at its own expense. During such litigation Licensee shall act in good faith to preserve WARF's right, title and interest in and to the Licensed Patent, and shall keep WARF advised as to the status of the litigation, and shall not enter into a settlement of such litigation in any manner that will negatively effect the rights of WARF or the rights afforded to the Licensed Patents, without WARF's express written consent. Upon request by Licensee, WARF shall provide Licensee with such assistance and information as may be reasonable and useful to Licensee in connection with Licensee's taking such action (if the cause of action arose during the term of this Agreement and Licensee reimburses WARF for WARF's reasonable out-of-pocket expenses). Any recovery of damages by Licensee as a result of such action shall be applied first in pro-rata satisfaction of any un-reimbursed expenses and attorneys' fees of Licensee and of WARF, if any, relating to the action. The balance remaining from any such recovery shall be distributed seventy-five (75%) to Licensee and twenty-five (25%) to WARF. Nothing herein shall permit or allow Licensee to commence any action for infringement of the Licensed Patent for any activity allowed under a settlement arrangement entered into by WARF in good faith with a third party infringer for past infringing activities. In no event shall this Section 10B be construed to limit Licensee's right to seek joinder of WARF in any proceeding in which WARF refuses to join or in which WARF refuses to provide consent for Licensee to bring such action.

 

Section 11.                      Patent Marking.

 

Licensee shall insure that it and its sublicensee(s) applies patent markings that meet all requirements of U.S. law, 35 U.S.C. § 287, with respect to all Products subject to this Agreement.

 

Section 12.                      Product Liability; Conduct of Business.

 

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A.           Licensee shall, at all times during the term of this Agreement and thereafter, indemnify, defend and hold WARF and the inventors of the Licensed Patents harmless against all claims and expenses, including legal expenses and reasonable attorneys' fees, arising out of the death of or injury to any person or persons or out of any damage to property and against any other claim, proceeding, demand, expense and liability of any kind whatsoever (other than patent infringement claims) resulting from the production, manufacture, sale, use, lease, consumption or advertisement of Products arising from any right or obligation of Licensee and its sublicensee(s) hereunder. WARF at all times reserves the right to select and retain counsel of its own to defend WARF's interests at WARF's own expense.

 

B.           Licensee warrants that prior to initiating any clinical trial for a Product under this Agreement it will maintain and continue to maintain liability insurance coverage appropriate to the risk involved in marketing the products subject to this Agreement, and that such insurance coverage lists WARF and the inventors of the Licensed Patents as additional insureds. Within thirty (30) days prior to the initiating of any such clinical trial and thereafter annually between January 1 and January 31 of each year, Licensee will present evidence to WARF that such coverage is being maintained. In addition, Licensee shall provide WARF with at least thirty (30) days' prior written notice of any change in or cancellation of the insurance coverage effecting the rights and obligations provided hereunder.

 

Section 13.                      Use of Names.

 

Licensee and its sublicensee(s) shall not use WARF's name, the name of any inventor of inventions governed by this Agreement, or the name of the University of Wisconsin in sales promotion, advertising, or any other form of publicity without the prior written approval of the entity or person whose name is being used.

 

Section 14.                      United States Government Interests.

 

It is understood that if the United States Government (through any of its agencies or otherwise) has funded research, during the course of or under which any of the inventions of the Licensed Patents were conceived or made, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. § 200-212 and applicable regulations of Chapter 37 of the Code of Federal Regulations, to a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced the invention of such Licensed Patents for governmental purposes. Any license granted to Licensee in this Agreement shall be subject to such right.

 

Section 15.                      Miscellaneous.

 

This Agreement shall be governed by and construed in all respects in accordance with the laws of the State of Wisconsin. If any provisions of this Agreement are or shall come into conflict with the laws or regulations of any jurisdiction or any governmental entity having jurisdiction over the parties or this Agreement, those provisions shall be deemed automatically deleted, if such deletion is allowed by relevant law, and the remaining terms and conditions of this Agreement shall remain in full force and effect. If such a deletion is not so allowed or if such a deletion leaves terms thereby made clearly illogical or inappropriate in effect, the parties agree to substitute new terms as similar in effect to the present terms of this Agreement as may be allowed under the applicable laws and regulations. The parties hereto are independent contractors and not joint venturers or partners.

 

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Section 16.                      Notices.

 

Any notice required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given at the earlier of the time when actually received as a consequence of any effective method of delivery, including but not limited to hand delivery, transmission by telecopier, or delivery by a professional courier service or the time when sent by certified or registered mail addressed to the party for whom intended at the address below or at such changed address as the party shall have specified by written notice, provided that any notice of change of address shall be effective only upon actual receipt.

 

	
  

	
(a)

	
Wisconsin Alumni Research Foundation

Attn:  Managing Director

614 Walnut Street

Madison, Wisconsin 53726

 

	
  

	
(b)

	
Colby Pharmaceutical Company

Attn:  Managing Director

1095 Colby Avenue, Suite C

Menlo Park, California 94025

 

Section 17.                      Integration.

 

This Agreement constitutes the full understanding between the parties with reference to the subject matter hereof, and no statements or agreements by or between the parties, whether orally or in writing, except as provided for elsewhere in this Section 17, made prior to or at the signing hereof, shall vary or modify the written terms of this Agreement. Neither party shall claim any amendment, modification, or release from any provisions of this Agreement by mutual agreement, acknowledgment, or otherwise, unless such mutual agreement is in writing, signed by the other party, and specifically states that it is an amendment to this Agreement.

 

Section 18.                      Confidentiality.

 

Both parties agree to keep any information identified as confidential by the disclosing party, confidential using methods at least as stringent as each party uses to protect its own confidential information. "Confidential Information" shall include Licensee's development plan and development reports, the Licensed Patents and all information concerning them and any other information marked confidential or accompanied by correspondence indicating such information is confidential exchanged between the parties hereto. Except as may be authorized in advance in writing by WARF, Licensee shall grant access to the Confidential Information only to its own employees involved in research relating to the Licensed Patents and Licensee shall require such employees to be bound by this Agreement as well. Licensee agrees not to use any Confidential Information to its advantage and WARF's detriment, including but not limited to claiming priority to any application serial numbers of the Licensed Patents in Licensee's patent prosecution. The confidentiality and use obligations set forth above apply to all or any part of the Confidential Information disclosed hereunder except to the extent that:

 

(i)           Licensee or WARF can show by written record that it possessed the information prior to its receipt from the other party;

 

(ii)           the information was already available to the public or became so through no fault of the Licensee or WARF;

 

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(iii)           the information is subsequently disclosed to Licensee or WARF by a third party that has the right to disclose it free of any obligations of confidentiality; or

 

(iv)           five (5) years have elapsed from the expiration of this Agreement.

 

Section 19.                      Force Majeure.

 

Neither party hereto shall be responsible for any failure to perform or delay in performing its obligations under this Agreement if such failure or delay is caused by acts of God, war, terrorism, strikes, revolutions, lack or failure of transportation facilities, laws or governmental regulations or other causes which are beyond the reasonable control of such party. A case of force majeure shall be notified to the other party in writing within fifteen (15) days after the party becomes aware of its occurrence.

 

Section 20.                      Authority.

 

The persons signing on behalf of WARF and Licensee hereby warrant and represent that they have authority to execute this Agreement on behalf of the party for whom they have signed.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the dates indicated below.

 

WISCONSIN ALUMNI RESEARCH FOUNDATION

 

By: /s/ Craig J. Christianson                  Date:  ____________

    Craig J. Christianson, Director of Licensing

 

 

 

 (WARF's attorney shall not be deemed a signatory to this Agreement.)

 

WARF Ref Thompson-P03163US

 

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APPENDIX A

 

A.           "Licensed Patents" shall refer to and mean those patents and patent applications listed on Appendix B attached hereto, and any subsequent patent application owned by WARF, but only to the extent it claims priority to and an invention described in a patent application listed on Appendix B.

 

B.           "Products" shall refer to and mean any and all products that employ or are in any way discovered, developed or produced by the practice of an invention covered by a Valid Claim or the manufacture, use, sale, import, export, sale or transfer of which would otherwise constitute infringement of any Valid Claim.

 

C.           "Date of First Commercial Sale" shall mean the date when cumulative sales to the retail market of Products exceeds $100,000.

 

D.           "Net Sales" shall mean, in the case of Products that are sold or leased, the amount billed or invoiced to the end user of Products (regardless of uncollectible accounts) less (1) trade and/or quantity discounts, credits, refunds and rebates actually taken by the customer in such amounts as are customary in the trade; (2) any shipping costs; (3) allowances or credits because of returned or rejected Products; (4) sales and value added taxes, tariffs, duties and use taxes directly imposed on the sale of Products and actually paid by Licensee or its sublicensee(s); and (5) reasonable and customary rebates and similar payments made with respect to sales paid for by any governmental or regulatory authority such as, by way of illustration and not in limitation, programs in the applicable territory that are equivalent or similar to Federal or state Medicaid, Medicare or similar state programs in the United States. "Net Sales" for a Product that is transferred to a third party for promotional purposes without charge or at a discount shall be the average invoice price to the end user of that type of Product during the applicable calendar quarter. If any Products are incorporated and sold in combination with other products for a single unit price, the Net Sales for such Products shall be a percentage of the unit price, the percentage being determined by dividing the invoice price to end-users of Products by the invoice price to end-users of the combination product which includes such Product. A "sale" shall not include transfers or dispositions for bona fide charitable purposes or when Products are distributed alone, prior to receiving regulatory approval for sale or use of such Products, for pre-clinical, clinical, regulatory or governmental regulatory purposes for which no compensation or financial benefit is received by, or accrued to, Licensee or its sublicensee(s).

 

E.           "Development Report" shall mean a written account of Licensee's progress under the development plan having at least the information specified on Appendix D to this Agreement, and shall be sent to the address specified on Appendix D.

 

F.           "Licensed Field" shall be limited to the field of human nutraceuticals, preventatives, therapeutics and diagnostics.

 

G.           "Licensed Territory" shall be all countries and territories of the world except for those countries and/or territories in which (i) Licensee has declined to pay the foreign patent filing fees in accordance with Section 4E(ii); and (ii) no further Licensed Patents can be filed in such countries and/or territories.

 

H.           "Equity Agreement" shall refer to and mean the Equity Agreement of even date herewith entered into by the parties hereto.

 

I.           "Effective Date" shall mean the date of the Agreement first set forth above.

 

J.           "Non-Commercial Research Purposes" shall mean the use of the inventions of the Licensed Patents for academic research purposes or other not-for-profit research purposes not involving the use of the inventions of the Licensed Patents to perform services (i) for third parties for a fee or for the

 

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Page 13 of 18

  

production or manufacture of products for sale to third parties, or (ii) for the performance of research wherein a for-profit entity receives a right, whether actual or contingent, to the results of the research.

 

K.           "Valid Claim" shall mean (a) a claim of an issued and unexpired Licensed Patent, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal having expired, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise; and (b) any then-currently pending claim of a pending patent application included within the Licensed Patents, which claim was filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or the re-filing of said application.

 

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APPENDIX B

 

LICENSED PATENTS

 

	
REFERENCE

NUMBER

	
COUNTRY

	
PATENT

NUMBER

	
ISSUE

DATE

	
APPLICATION

SERIAL NUMBER

 

CHROMAN-DERIVED ANTI-ANDROGENS FOR TREATMENT OF ANDROGEN-MEDIATED DISORDERS; Thompson)

 

	
P03163PV

	
PROVISIONAL

	  	  	
60/450510

	
P03163US

	
UNITED STATES

	  	  	
10/789835

	
P03163W0

	
PCT

	  	  	
US2004/005872

	
P03163HK

	
HONG KONG

	  	  	
06105362.3

	
P03163EP

	
EUROPE

	  	  	
04785845.1

	
P03163CA

	
CANADA

	  	  	
2517390

	
P03163AU

	
AUSTRALIA

	  	  	
2004260631

 

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APPENDIX C

 

WARF ROYALTY REPORT

 

	
License:

	  	  	
Agreement No:

	  
	
Inventor:

	  	  	
P#:

	
P

	
Period Covered:

	
From:

	
        /                /

	  	
Through:

	
        /                /

	
Prepared By:

	  	  	
Date:

	  
	
Approved By:

	  	  	
Date:

	  

If license covers several major product lines, please prepare a separate report

for each line. Then combine all product lines into a summary report.

 

	
Report Type:

	
 ̈

	
Single Product Line Report:

 

	  	
 ̈

	
Multiproduct Summary Report. Page 1 of ___________ Pages

 

	  	
 ̈

	
Product Line Detail. Line: _________ Tradename: _________ Page: _____________

 

	
Report Currency:

	
 ̈

	
U. S. Dollars

	
 ̈

	
Other

	  

	
Country

	
Gross Sales

	
* Less Allowances

	
Net Sales

	
Royalty Rate

	
Period Royalty Amount

	
This Year

	
Last Year

	
U.S.A.

	  	  	  	  	  	  
	
Canada

	  	  	  	  	  	  
	
Europe:

	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	
Japan

	  	  	  	  	  	  
	
Other:

	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	
TOTAL:

	  	  	  	  	
I

	
I

 

	
Total Royalty:

	  	
    Conversion Rate:

	  	
    Royalty in U.S. Dollars:

	
$

 

The following royalty forecast is non-binding and for WARF's internal planning purposes only:

 

Royalty Forecast Under This Agreement: Next Quarter: _________ Q2: _________ Q3: _________Q4: _________

 

	
*      On a separate page, please indicate the reasons for returns or other adjustments if significant.

Also note any unusual occurrences that affected royalty amounts during this period.

To assist WARF's forecasting, please comment on any significant expected trends in sales volume.

 

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APPENDIX D

 

DEVELOPMENT REPORT

 

A.           Date development plan initiated and time period covered by this report.

 

B.           Development Report.

 

	
  

	
1.

	
Activities completed since last report including the object and parameters of the development, when initiated, when completed and the results.

 

	
  

	
2.

	
Activities currently under investigation, i.e., ongoing activities including object and parameters of such activities, when initiated, and projected date of completion.

 

C.           Future Development Activities.

 

	
  

	
1.

	
Activities to be undertaken before next report including, but not limited to, the type and object of any studies conducted and their projected starting and completion dates.

 

	
  

	
2.

	
Estimated total development time remaining before a product will be commercialized.

 

D.           Changes to initial development plan.

 

	
  

	
1.

	
Reasons for change.

 

	
  

	
2.

	
Variables that may cause additional changes.

 

E.           Items to be provided if applicable:

 

	
  

	
1.

	
Information relating to Product that has become publicly available, e.g., published articles, competing products, patents, etc.

 

	
  

	
2.

	
Development work being performed by third parties other than Licensee to include name of third party, reasons for use of third party, planned future uses of third parties including reasons why and type of work.

 

	
  

	
3.

	
Update of competitive information trends in industry, government compliance (if applicable) and market plan.

 

PLEASE SEND DEVELOPMENT REPORTS TO:

 

Wisconsin Alumni Research Foundation

Attn.: Contract Coordinator

614 Walnut Street

P.O. Box 7365

Madison, WI 53707-7365

 

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APPENDIX E

DEVELOPMENT PLAN

 

(To be provided by Licensee prior to execution)

 

 

 

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