As filed with the Securities and Exchange Commission on May 22, 1998
Registration No. 33-44562
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PROTEIN DESIGN LABS, INC.
(Exact name of registrant as specified in its charter)
Delaware 2836 94-3023969
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Number) Indentification Number)
2375 Garcia Avenue
Mountain View, CA 94043
(650) 903-3700
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Douglas O. Ebersole, Esq.
Senior Vice President, Licensing and Corporate Services,
General Counsel and Secretary
PROTEIN DESIGN LABS, INC.
2375 Garcia Avenue
Mountain View, CA 94043
(650) 903-3700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
GREGORY M. GALLO, ESQ.
DOUGLAS J. REIN, ESQ.
Gray Cary Ware & Freidenrich LLP
400 Hamilton Avenue
Palo Alto, California 94301-1825
(650) 328-6561
If any of the securities being registered on this Form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") check the following box.[ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [X] 133-44562
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to the Registration Statement on
Form S-1 (File No. 33-44562) of Protein Design Labs, Inc. (the "Registration
Statement") is filed pursuant to Rule 462(d) of the Securities Act solely for
the purpose of refiling Exhibits 10.7, 10.8, 10.9, 10.11, 10.13, 10.14, 10.15
and 10.16 to the Registration Statement for which confidential treatment
previously was granted and subsequently has been extended by the Securities
and Exchange Commission. The contents of the Registration Statement are
hereby incorporated by reference.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
Exhibit
Number Exhibit Title
1.1* Form of Purchase Agreement.
3.1* Restated Certificate of Incorporation.
3.2* Amended Bylaws
4.1* Registration Rights Agreement between the Company and certain holders
of Preferred Stock and Common Stock dated August 21, 1986.
4.2* Amendment to Registration Rights Agreement between the Company and
certain holders of Preferred Stock and Common Stock dated March 16,
1989.
4.3* Registration Rights Agreement between the Company and Hoffmann-La
Roche Inc. dated March 16, 1989.
4.4* Standstill Agreement between the Company and Hoffmann-La Roche Inc.
dated March 16, 1989.
5.1* Opinion and Consent of Ware & Freidenrich, A Professional
Corporation.
10.1* Form of Director and Officer Indemnification Agreement.
10.2* 1991 Stock Option Plan, together with forms of Incentive Stock Option
Agreement and Nonqualified Stock Option Agreement.
10.3* Founder Stock Purchase Agreement between the Company and Dr. Laurence
Jay Korn dated August 21, 1986.
10.4* Founder Stock Purchase Agreement between the Company and Dr. Cary
Queen dated January 1, 1987.
10.5* Lease Agreement between the Company and Charleston Properties, a
California general partnership, dated December 22, 1989.
10.6* Deferred Compensation Plan dated July 22, 1991.
10.7+ License Agreement between the Company and the National Technical
Information Service effective as of October 31, 1988 (with certain
confidential information deleted and marked by a box surrounding the
deleted information).
10.8+ License Agreement between the Company and Hoffmann-La Roche Inc.
effective January 31, 1989 (with certain confidential information
deleted and marked by a box surrounding the deleted information).
10.9+ License Agreement between the Company and F. Hoffmann-La Roche & Co.
effective January 31, 1989 (with certain confidential information
deleted and marked by a box surrounding the deleted information).
10.10* License Agreement between the Company and Medical Research Council of
the United Kingdom dated July 1, 1989, as amended on January 30,
1990 (with certain confidential information deleted and marked by a
box surrounding the deleted information).
10.11+ License Agreement between the Company and Sloan-Kettering Institute
for Cancer Research dated November 30, 1989 (with certain
confidential information deleted and marked by a box surrounding the
deleted information).
10.12* License and Option Agreement between the Company and The UAB Research
Foundation dated December 31, 1989, (with certain confidential
information deleted and marked by a box surrounding the deleted
information).
10.13+ License Agreement between the Company and the Board of Trustees of
the Leland Stanford Junior University effective July 1, 1990 (with
certain confidential information deleted and marked by a box
surrounding the deleted information).
10.14+ Software License Agreement among the Company, Molecular Applications
Group and Michael Levitt effective September 1, 1990 (with certain
confidential information deleted and marked by a box surrounding the
deleted information).
10.15+ Development and License Agreement between the Company and Sandoz
Pharma, Ltd. effective December 1, 1990 (with certain confidential
information deleted and marked by a box surrounding the deleted
information).
10.16+ Development and License Agreement between the Company and Yamanouchi
Pharmaceutical Company, Ltd. effective February 12, 1991, as amended
on February 12, 1991 (with certain confidential information deleted
and marked by a box surrounding the deleted information).
10.17* License Option Agreement between the Company and Hoffmann-La Roche
Inc. effective February 1, 1991.
10.18* 1986 Stock Purchase Plan.
10.19* Forms of Stock Purchase Agreement under the 1986 Stock Purchase Plan.
10.20* Series A Stock Purchase Warrant issued to Mayfield V dated August 16,
1990.
10.21* Warrant Purchased Agreement between the Company and certain holders
of Preferred Stock dated August 21, 1986.
10.22* Stock Purchase Agreement between the Company and certain holders of
Preferred Stock and Common Stock dated August 21, 1986.
10.23* Amendment to Stock Purchase Agreement between the Company and certain
holders of Preferred Stock and Common Stock dated February 2, 1987.
10.24* Amendment to Stock Purchase Agreement between the Company and certain
holders of Preferred Stock and Common Stock dated March 16, 1989.
10.25* Stock Purchase Agreement between the Company and Hoffmann-La Roche
Inc. dated March 16, 1989.
11.1* Statement regarding computation of per share earnings.
24.1* Consent of Ernst & Young, Independent Auditors. Reference is made to
page II-5.
24.2* Consent of Ware & Freidenrich, A Professional Corporation. Reference
is made to Exhibit 5.1.
25.1* Power of Attorney for Drs. Korn and Queen and Messrs. Gould and Saxe.
25.2* Power of Attorney for Dr. Falkow.
* Previously filed with the Registration Statement on Form S-1
for Protein Design Labs, Inc.
+ Extended confidential treatment has been granted with respect to portions
of this Exhibit. Such portions have been omitted and filed separately with
the Securities and Exchange Commission.
(b) Financial Statement Schedules
None.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Mountain View, County
of Santa Clara, State of California, on the 22nd day of May, 1998.
PROTEIN DESIGN LABS, INC.
/s/ Laurence Jay Korn
--------------------------
Laurence Jay Korn
Chief Executive Officer and
Chairperson of the Board of Directors
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on
the dates indicated:
Signature Title Date
- -------------------------- ------------------------------------- -------------
/s/ Laurence Jay Korn Chief Executive Officer and May 22, 1998
- -------------------------- Chairperson of the Board of Directors
Laurence Jay Korn (Principal Executive Officer)
/s/ Jon S. Saxe* President and Director May 22, 1998
- -------------------------- (Principal Accounting Officer)
Jon S. Saxe
/s/ Cary L. Queen* Director May 22, 1998
- --------------------------
Cary L. Queen
/s/ Stanley Falkow* Director May 22, 1998
- --------------------------
Stanley Falkow
/s/ George M. Gould* Director May 22, 1998
- --------------------------
George M. Gould
Director
- --------------------------
Max Link
Director
- --------------------------
Jurgen Drews
* By: /s/ LAURENCE JAY KORN
--------------------------
Laurence Jay Korn
Attorney-in-Fact
EXHIBIT 10.7
CONFIDENTIAL TREATMENT REQUESTED
LICENSE AGREEMENT
This Agreement is entered into between the National Technical
Information Services (NTIS), a primary operating unit of the United States
Department of Commerce, having offices at 5285 Port Royal Road, Springfield,
VA 22161, and Protein Design Labs, Incorporated (LICENSEE), a corporation,
having offices in Palo Alto, California.
WHEREAS, the United States Department of Health and Human Services has
sponsored research on malignancy and autoimmune disorders in humans and has
received by assignment certain valuable patent rights thereon in the United
States; and
WHEREAS, pursuant to 35 U.S.C. 207 and 37 C.F.R. 404 the Department of
Health and Human Services has transferred custody of the entire right, title
and interest in the patent rights to the Department of Commerce; and
WHEREAS, the Department of Commerce, pursuant to 35 U.S.C. 207 and 37
C.F.R. 404 is authorized to receive by transfer custody of the right, title
and interest in federally owned inventions; to apply for, obtain and maintain
patents on federally owned inventions in the United States and in foreign
countries; to grant nonexclusive, partially exclusive or exclusive licenses
under federally owned patents and patent applications; and to undertake all
other suitable and necessary steps to protect and administer rights to
federally owned inventions; and
WHEREAS, the Secretary of Commerce, through Department Organization
Order 30-7A, has delegated to NTIS the authority of the Secretary to acquire
federally owned inventions from other Federal agencies for the purpose of
licensing the use of those inventions in the United States; and
WHEREAS, NTIS desires, in the public interest, that the subject
invention be perfected, marketed and practiced so that the benefits are
readily available for widest possible utilization in the shortest time
possible; and
WHEREAS, LICENSEE has the facilities, personnel and expertise to bring,
and is willing to expend reasonable efforts to bring the invention to the
point of practical application at an early date.
NOW THEREFORE, in consideration of the foregoing, including the above-
cited patent licensing regulations, NTIS and LICENSEE agree as set forth
below.
ARTICLE I
Definitions
1.1 Licensed Patent(s) shall mean issued claims in U.S. Patent
Application Serial Number 7-085,707 filed August 17, 1988 all divisions,
continuations and continuations-in-part of such patent applications, where the
making, using or selling in such continuations-in-part would be covered by a
claim in such patent applications or their divisions and all patents issuing
from such patent applications and all reissues, renewals and extensions of
such patents.
1.2 Licensed Process shall mean a method of treating T-cell mediated
disorders in humans encompassed within the scope of a claim in a Licensed
Patent.
1.3 Net Sales shall mean the amount billed or invoiced on sales of any
Product used in practicing the Licensed Process or, in the event of disposal
of any Products other than as scrap prior to its shipment from its place of
manufacture or pre-disposal storage or other than by sales, the amount billed
or invoiced for a like quantity and quality of any such Product on or about
the time of such disposal, less:
(a) flat nine percent (9%) representing customary trade,
quantity or cash discounts and nonaffiliated brokers' or agents'
commissions; actually allowed and taken;
(a) Amounts repaid or credited by reason of rejections or
returns; and/or
(c) Any freight or other transportation costs, insurance
charges, duties, tariffs and all sales and excise taxes based
directly on sales or turnover or delivery of material produced
under this Agreement.
Net Sales shall not include any product used in practicing the
Licensed Process which is used for research or collaborative
research, clinical trials, donations for humanitarian purposes, or
promotional allowances or other promotional purposes.
1.4 AFFILIATE shall mean any person, corporation, firm, partnership or
other entity in which LICENSEE owns or controls at least fifty percent (50%)
of the voting stock thereof.
1.5 Licensed Territory shall mean those countries listed in the
attached Schedule and in which a Licensed Patent subsists, and any other
countries in which a Licensed Patent may be filed in the future.
ARTICLE II
Grant
2.1 NTIS hereby grants to LICENSEE and any AFFILIATES of LICENSEE's
choice, subject to the terms and conditions herein, a nonexclusive license
under the Licensed Patent(s) to make, have made, use and sell Products used in
practicing the Licensed Process and to practice the Licensed Process in the
Licensed Territory for the term of this Agreement. LICENSEE shall notify NTIS
of any AFFILIATE included under this Paragraph 2.1. LICENSEE may make, have
made, use and sell products used in practicing the Licensed Process and to
practice the Licensed Process in any country outside the Licensed Territory
with no obligation to NTIS if such products are both made and sold outside the
Licensed Territory; provided, however, that LICENSEE must bear all risks of
third party claims against the Licensed Patent(s) in any area outside the
Licensed Territory.
2.2 NTIS hereby grants to LICENSEE the right to grant sublicenses no
greater in scope than the license granted in Paragraph 2.1 above to
nonaffiliated companies subject to the provisions of this Agreement and to the
submission to and approval by NTIS of the proposed sublicense, which approval
shall not be unreasonably withheld. Each sublicense shall make reference to
this Agreement and a copy of such sublicense shall be furnished to NTIS
promptly after its execution.
2.3 NTIS hereby grants to LICENSEE and its included AFFILIATES and
sublicensees the right to extend to their customers of Products used in
practicing the Licensed Process on which a maintenance and royalty fee has
been or will be paid the right to use such Products.
ARTICLE III
Royalties and Payments
3.1 Within thirty (30) days after the execution date of this Agreement
by NTIS, LICENSEE shall pay to NTIS an execution fee of [ ],
no part of which shall be refunded for any reason.
3.2 (a) LICENSEE shall also pay to NTIS an annual maintenance fee of
[ ], no part of which shall be refunded for any reason. The first annual
maintenance fee payment which shall be paid at the time of making the payment
required in Paragraph 3.1 above, shall be prorated for the balance of the
calendar year remaining after the effective date of this Agreement.
Subsequent annual maintenance fees shall accrue on January 1 of each year and
shall be payable within sixty (60) days thereafter during the term of this
Agreement. Should the ordinary and usual costs to NTIS of maintaining any
Licensed Patent(s) exceed in any year the total annual maintenance fee
received from all licensees under such Licensed Patent(s), NTIS may request
each licensee to increase its minimum annual fee for the following year by an
amount proportionate to the number of licensees, the sum of which amounts
equals such excess costs. Should LICENSEE fail to include such increased
amount in its annual maintenance fee when due, NTIS may at its option,
terminate LICENSEE's license as to such Licensed Patents in accordance with
the provisions of Paragraph 8.2 hereof. The annual maintenance fee paid by
LICENSEE for any given year shall be a credit against any administration and
royalty fee accrued for such year in accordance with Paragraph 3.3 below. The
administration and royalty accrued in any one calendar year shall not be
credited against the annual maintenance fee paid or to be paid in any other
year.
(b) Before any commitment to expend substantial funds for an
extraordinary and unusual procedure for obtaining or maintaining any Licensed
Patent(s), including but not limited to interference, reexamination, term-
extension or reissue but not including infringement or counterclaims thereto,
NTIS shall notify LICENSEE of such extraordinary and unusual procedure and the
estimated cost thereof and request LICENSEE to assume responsibility for a
proportionate share of such cost, i.e., the cost divided by the number of
licensees under the
CONFIDENTIAL TREATMENT REQUESTED
Licensed Patents. Should LICENSEE decline to assume such
responsibility, NTIS may terminate LICENSEE's license for the country in the
Licensed Territory in which such cost would have been incurred under such
Licensed Patent(s) in accordance with the provisions of Paragraph 8.2 hereof.
3.3 LICENSEE shall pay NTIS an administration and royalty fee on the
Net Sales of LICENSEE (or its included AFFILIATES or sublicensees) of [ ], if
the entire anti-Tac monoclonal antibody, as described in U.S. Patent
Application Serial Number 7-085,707 filed August 17, 1987 (the "Antibody"), is
included in the product used in practicing the Licensed Process by Licensee,
its included AFFILIATES or sublicensees. In the event that the licensed
Antibody or portion of it is sold as part of another protein or combination
package containing antibodies or other reagents and if, as such part, the
Antibody or a portion of it does not have a separate invoiced selling price,
then for the purpose of computing royalties, the Net Sales Price of the
Product used in practicing the licensed process shall be the net selling price
of the entire protein multiplied by the ratio of the manufacturing cost of the
antibody or portion of it to the manufacturing cost of the entire protein.
This ratio shall be a fraction, the numerator of which shall be obtained by
counting the number of Amino Acids comprising the complementary determining
regions [as defined in E. Kabat et. al., Sequences of Proteins of Immological
interest 45,121 (1983)], of the Antibody and the denominator of which shall be
the total number of Amino Acids comprising the entire protein.
3.4 [ ] royalty fee shall be payable hereunder for direct sales of
Products used in practicing the Licensed Process by LICENSEE or its included
AFFILIATES and sublicensees to the Government of the United States of America
or on any such Product scrapped prior to shipment from its place of
manufacture.
3.5 LICENSEE agrees to submit to NTIS within sixty (60) days after
each calendar half year ending June 30th and December 31st, reports setting
forth for the preceding six (6) month period the amount of Products used in
practicing the Licensed Process made, used, sold or otherwise disposed of
(except scrap as previously provided) by LICENSEE and its included AFFILIATES
and sublicensees in the Licensed Territory, the Net Sales thereof separated as
to Net Sales within the Licensed Territory and those of such Products made
within the Licensed Territory but sold elsewhere and the amount of royalty fee
due thereon, and with each such report LICENSEE agrees to pay the amount of
such fee due. If no such fee is due to NTIS for any report period, the
written report shall so state.
3.6 All payments due NTIS under this Article III shall be payable in
United States dollars for the account of "NTIS/Patent Licensing." All checks
and bank drafts shall be drawn on United States banks. If payments are
overdue, late charges will be applied as required by the Department of
Treasury (Treasury Fiscal Requirements Manual, Section 8020.20). Conversion
of foreign currency to United States dollars shall be made at the conversion
rate existing in the United States on the last business day of the applicable
reporting period for the purchase of United States dollar bank wire transfers
for settlement of such payment obligations. Any and all loss of exchange,
value, taxes or other expenses incurred in the transfer or conversion of other
currency to United States dollars shall be paid entirely by LICENSEE.
3.7 LICENSEE and/or its included AFFILIATES and/or sublicensees shall
pay all necessary expenses for its commercialization of Products used in
practicing the Licensed Process and such expenses shall not be deducted from
any payments due NTIS as provided herein.
3.8 Except as provided in Paragraph 1.3(c), any tax on any payment due
NTIS under this ARTICLE III in any country in which such payment accrued shall
be paid by LICENSEE without deduction from the amount owned to NTIS.
ARTICLE IV
Markings
LICENSEE, its included AFFILIATES and sublicensees may, at their sole
option and in conformity with applicable statutes, identify Licensed Products
with the marking "Licensed Under U.S. Patent or "U.S. Patent Pending."" The
name of the Government employee inventor(s), the name of any agency or
department of the United States Government, or any adaptation of the above
shall not be used in any promotional activity without prior written approval
from NTIS.
ARTICLE V
Reports and Records
5.1 LICENSEE shall provide written annual reports within sixty (60)
days of the end of each calendar year detailing progress being made to bring
the invention licensed hereunder to practical application. No further annual
progress reports will be required after notification of the first commercial
sale of Licensed Products unless otherwise requested by NTIS.
5.2 LICENSEE and its included AFFILIATES shall keep and shall cause
their sublicensees to keep accurate and complete records of Products used in
practicing the Licensed Process made, used, sold or otherwise disposed of
(except scrap as previously provided), and such products used solely for
research under this Agreement in the Licensed Territory, appropriate to
determine the amount of the administration and royalty fee due hereunder.
Such records shall be retained for at least two (2) years following a given
reporting period and, upon reasonable notice, shall be available during normal
business hours for inspection at the expense of NTIS by an accountant selected
by NTIS and approved by LICENSEE for the sole purpose of verifying reports and
payments hereunder. Such accountant shall not disclose to NTIS any
information other than information relating to the accuracy of reports and
payments made under this Agreement.
ARTICLE VI
Patent Enforcement
6.1 LICENSEE shall notify NTIS promptly in writing of any infringement
of a Licensed Patent which becomes known to LICENSEE. If NTIS determines that
a substantial infringement exists, NTIS shall communicate such determination
to LICENSEE in writing and take prompt action to attempt to eliminate that
substantial infringement. LICENSEE shall cooperate with NTIS in determining
if substantial infringement exists and, if so, in attempting to eliminate that
substantial infringement.
6.2 If NTIS receives LICENSEE's infringement notice under the
provisions of paragraph 6.1 above and within a reasonable time following the
date of such notice, NTIS is unsuccessful in eliminating the infringement
which it has determined is substantial, NTIS agrees to recommend to the
appropriate United States Government authorities that an infringement action
based on such infringed Licensed Patent be initiated. LICENSEE shall, at
NTIS' request, cooperate in every respect in the preparation and prosecuting
of such action including making available to NTIS records, information,
evidence, and testimony by employees of LICENSEE relevant to the substantial
infringement of the Licensed Patent.
6.3 If, after twelve (12) months from the date of LICENSEE's notice of
an infringement under the provisions of Paragraph 6.1 above, which
infringement NTIS has determined constitutes a substantial infringement of a
Licensed Patent and NTIS has not eliminated such substantial infringement and
the United States Government has not initiated an infringement suit, LICENSEE
shall be excused from payment of the royalty fee due hereunder resulting from
sales or other dispositions of Licensed Products. When the substantial
infringement has been eliminated or an infringement suit has been initiated,
NTIS shall notify LICENSEE in writing of either of such event and LICENSEE's
obligation to pay the annual maintenance and royalty fee shall resume as of
the date that the infringement is eliminated or such infringement suit is
initiated.
ARTICLE VII
Licensee Performance
7.1 LICENSEE shall expend reasonable efforts and resources to carry
out the development and marketing plan submitted with LICENSEE's application
for a license and to bring Products used in practicing the Licensed Process to
the point of practical application (as defined at 37 C.F.R. 404.3(d)) within
four years of the effective date of this Agreement, unless this period is
extended by mutual agreement of the parties. NTIS shall not unreasonably
withhold approval of any request of LICENSEE to extend this period, if such
request is supported by a reasonable showing by LICENSEE of due diligence
toward bringing such Products to the point of practical application. "Due
diligence" shall include any reasonable and diligent application for approval
required by any Government agency within the United States.
7.2 After bringing Products used in practicing the Licensed Process to
the point of practical application in the Licensed Territory, LICENSEE agrees
to keep Licensed Products reasonably available to the public in the Licensed
Territory during the term of this Agreement.
7.3 LICENSEE agrees that Products used in practicing the Licensed
Process sold or otherwise disposed of in the United States by LICENSEE, its
included AFFILIATES and the sublicensees will be manufactured substantially in
the United States.
7.4 Failure to comply with the terms of this Article VII shall be
cause for modification or termination of this Agreement in accordance with the
provisions of Article VIII below.
ARTICLE VIII
Modification and Termination
8.1 This Agreement may be modified or terminated by NTIS subject to
the provisions of Paragraphs 8.2 and 10.4 below, if it is determined that:
(a) LICENSEE, or any of its included AFFILIATES or any of its
sublicensees fail to meet the obligations set forth in Article VII
above;
(b)Such action is necessary to meet requirements for public use
specified by Federal regulations issued after the date of the
license and such requirements are not reasonably satisfied by the
LICENSEE, its included AFFILIATES or its sublicensees;
(c) LICENSEE has willfully made a false statement of or
willfully omitted a material fact in the license application or in
any report required by this Agreement;
(d) LICENSEE, or any of its included AFFIALIATES or any of its
sublicensees commit a substantial breach of a covenant or
agreement contained in this Agreement;
(e) LICENSEE is adjudged a bankrupt or has its assets placed in
the hands of a receiver or makes any assignment or other
accommodation for the benefit of creditors; or
(f) LICENSEE, or any of its included AFFILIATES or any of its
sublicensees misuse any Licensed Patent.
8.2 Prior to any modification or termination of this Agreement NTIS
shall furnish LICENSEE and any sublicensee of record a written notice of
intention to modify or terminate, and the LICENSEE and any notified
sublicensee shall be allowed thirty (30) days after the date on such notice to
remedy any breach or default of any covenant or agreement of this Agreement or
to show cause why this Agreement should not be modified or terminated.
8.3 LICENSEE may terminate this Agreement at any time as to any or all
Licensed Patents upon ninety (90) days written notice to NTIS.
8.4 Upon termination of this Agreement, sums due to NTIS from LICENSEE
in respect of the Licensed Patent(s) included in such termination shall become
immediately payable. In all other respects, the rights and obligations of the
parties hereto concerning the Licensed Patent(s) included in such termination
shall cease as of the effective date of such termination.
8.5 In the event of termination of this Agreement, any sublicense of
record granted pursuant to Paragraph 2.2 may, at sublicensee's option, be
converted to a license directly between sublicensee and NTIS.
ARTICLE IX
Duration
This Agreement, unless sooner terminated as provided herein, shall
remain in effect until the expiration of the last-to-expire Licensed Patent.
ARTICLE X
General
10.1 NTIS represents and warrants that the entire right, title and
interest in the Licensed Patent(s) has been assigned to the United States of
America as represented by the Secretary of Commerce and that NTIS has the
authority to issue licenses under the Licensed Patent(s). NTIS does not
warrant the patentability or validity of the Licensed Patent(s) and makes no
representations whatsoever with regard to the scope of the Licensed Patent(s)
or that such Licensed Patent(s) may be exploited without infringing other
patents.
10.2 This Agreement shall not be transferred or assigned by LICENSEE to
any party other than to a successor or assignee of the entire business
interest of LICENSEE relating to Licensed Products.
10.3 NTIS shall notify LICENSEE of any subsequent agreement containing
more favorable terms and conditions which may hereafter be granted by NTIS to
any other party under the Licensed Patents; and LICENSEE, if it is in a
position to do so, may substitute any or all the terms and conditions of such
other agreement for the terms and conditions of this Agreement.
10.4 The parties shall make every reasonable effort to resolve amicably
any dispute concerning a question of fact arising under this Agreement. Any
disputes not settled amicably between the parties concerning a question of
fact arising under this Agreement shall be decided by the Director, NTIS, who
shall reduce his decision to writing and mail or otherwise furnish a copy
thereof to LICENSEE. The decision of the Director, NTIS, to modify or
terminate this Agreement shall be final and conclusive unless LICENSEE mails
or otherwise furnishes to the Director, NTIS, a written appeal under the
Appeal Procedures of 15 C.F.R. Part 17, Subpart C. Pending final decision of
a dispute hereunder, LICENSEE shall proceed diligently with the performance of
its obligations under this Agreement.
10.5 The interpretation and application of the provisions of this
Agreement shall be governed by the laws of the United States as interpreted
and applied by the Federal courts in the District of Columbia.
10.6 Written notices required to be given under this Agreement shall be
considered duly given if mailed by first class mail, postage prepaid and
addressed as follows:
If to NTIS: Director, Office of Federal Patent Licensing
National Technical Information Service
United States Department of Commerce
5285 Port Royal Road
Springfield, VA 22161
If to LICENSEE: Protein Design Labs, Inc.
3181 Porter Drive
Palo Alto, CA 94304
or such other address as either party may request in writing.
10.7 This Agreement constitutes the entire understanding and supersedes
all prior agreements and understandings between the parties with respect to
the subject matter hereof or information relating thereto except for any non-
disclosure agreement relating to the claims of the Licensed Patent(s) which
non-disclosure agreement, if any, is incorporated herein by reference, and
neither party shall be obligated by any condition, promise or representation
other than those expressly stated herein or as may be subsequently agreed to
by the parties hereto in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives.
The Effective Date of this Agreement is October 31, 1988.
Witness: National Technical Information Service
/s/ P. Divanain /s/Joseph F. Caponio
- ------------------- --------------------
JOSEPH F. CAPONIO
Director
October 12, 1988 October 12, 1988
- ------------------- --------------------
Date Date
Protein Design Labs, Inc.
Witness:
/s/ Cary Queen /s/Laurence Jay Korn
- --------------------- ---------------------
(By)
President
---------------------
(Title)
10/6/88 6/10/88
- --------------------- ---------------------
Date Date
SCHEDULE OF LICENSED PATENTS
Patent
Country Patent Application No. Date Filed Number Grant Date
United States 7-085,707 8/17/88
Canada 8/17/88
PCT
Japan
EPO via PCT
Austria
Belgium
Switzerland
West Germany
France
United Kingdom
Italy
The Netherlands
Luxembourg
Sweden
EXHIBIT 10.8
CONFIDENTIAL TREATMENT REQUESTED
AGREEMENT
This Agreement is entered into as of January 31, 1989 ("Effective Date"), by
and between HOFFMANN-LA ROCHE INC., a New Jersey corporation having offices at
340 Kingsland Street, Nutley, New Jersey 07110 ("Roche") and PROTEIN DESIGN
LABS, INC., a Delaware corporation having offices at 3181 Porter Drive, Palo
Alto, California 94304 ("PDL").
WITNESSETH
WHEREAS, PDL has developed a body of technology relating to humanizing
antibodies and, in particular, to humanized antibodies against the
interleukin-2 receptor ("IL-2R");
WHEREAS, Roche has an active research and development program in human
immunology and desires to obtain rights in and to PDL's proprietary technology
with respect to these humanized antibodies;
WHEREAS, Roche has proven experience in the development, clinical
research, registration, manufacturing and marketing of pharmaceutical
products;
WHEREAS, PDL and Roche have agreed on understandings which will govern a
scientific collaboration, clinical development program and subsequent
commercialization on a sole and exclusive basis by Roche set forth in part in
a Letter of Intent dated January 5, 1989; and
WHEREAS, PDL and Roche now desire that such understandings be embodied
in a full text, binding agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants set forth below, PDL and Roche mutually agree as follows:
I. DEFINITIONS
For the purposes of this Agreement, the following terms, when written
with an initial capital letter, shall have the meaning ascribed to them below.
1.01 "Affiliate" means any corporation or other business entity
controlled by, controlling, or under common control with another entity, with
"control" meaning direct or indirect beneficial ownership of more than fifty
percent (50%) of the voting stock of, or more than a fifty percent (50%)
interest in the income of, such corporation or other business entity.
1.02 "Combination Product" means any product containing both an
ingredient which causes it to be considered a Licensed Product and one or more
other therapeutically active ingredients.
1.03 "FDA" shall mean the United States Food and Drug Administration.
1.04 "Field" means any humanized or chimeric antibody which binds to
IL-2R, where "humanized" means a genetically engineered combination of a
substantially human framework region and constant region, and complementarity
determining regions from non-human antibodies, and where "chimeric" means a
genetically engineered combination of a human constant region and non-human
variable region. "Antibodies in the Field" means humanized and chimeric
antibodies which bind to the IL-2R. It is believed that these Antibodies in
the Field may be useful for therapeutic, diagnostic, imaging and similar
purposes. It is understood that the Field includes, but is not limited to,
that certain humanized murine monoclonal antibody prepared against the p55
component of the IL-2R ("humanized anti-Tac"). Furthermore, the Field
includes, but is not limited to, all improvements relating to humanized anti-
Tac including without limitation modifications in a structure introduced by
genetic engineering, or by chemical or enzymatic cleavage. Also included
within the Field shall be alternate hosts for producing humanized anti-Tac,
methods for purification, formulations incorporating humanized anti-Tac, and
uses and methods of use for humanized anti-Tac in human medicine.
1.05 "Initial Commercialization" means the end of the calendar month
containing the date following FDA approval of the Product License Application
filed for a Licensed Product for human therapeutic use for prevention of
kidney transplant rejection or a major disease (within the meaning of
Milestone #2 in Section 3.02 hereof) on which Roche, its Affiliates or
sublicensees first sell such a product to an independent third party not an
Affiliate of the seller in the Territory.
1.06 "Joint Inventions" means any inventions in the Field, whether
patented or not, which are jointly made during the period beginning on the
Effective Date and ending one year after termination of the Research Program
by at least one PDL employee or person contractually required to assign or
license patent rights covering such inventions to PDL and at least one Roche
or F. Roche (as defined in Section 1.13) employee or person contractually
required to assign or license patent rights covering such inventions to Roche
or F. Roche.
1.07 "Licensed Product" means any product in the Field, including any
Combination Product, the making, use or sale of which utilizes PDL Know-How,
PDL Patents or Joint Inventions or would, in the absence of this Agreement,
infringe a Valid Claim.
1.08 "Net Sales" means the gross invoice price ("GIP") of all Licensed
Products sold or otherwise disposed of for consideration by Roche, its
Affiliates or sublicensees to independent third parties not an Affiliate of
the seller after deducting, if not already deducted, from the amount invoiced:
(a) the amounts actually allowed as volume or quantity
discounts, rebates, price reductions, returns (including withdrawals and
recalls); and
(b) sales, excise and turnover taxes imposed directly upon and
actually paid by Roche, its Affiliates or sublicensees.
In addition, there shall be deducted, to the extent not already deducted
from the amount invoiced, an amount equal to eight percent (8%) of the GIP to
cover all other expenses or discounts, including but not limited to cash
discounts, custom duties, transportation and insurance charges and other
direct expenses.
In the case of Combination Products for which the Licensed Product and
each of the other therapeutically active ingredients contained in the
Combination Product have established market price when sold separately, Net
Sales shall be determined by multiplying the Net Sales for each such
Combination Product by a fraction, the numerator of which shall be the
established market price for the Licensed Product(s) contained in the
Combination Product, and the denominator of which shall be the sum of the
established market prices for the Licensed Product(s) plus the other active
ingredients contained in the Combination Product. When such separate market
prices are not established, then the parties shall negotiate in good faith to
determine the method of calculating Net Sales for Combination Products.
If Roche or its Affiliates or sublicensees receive non-cash
consideration for any Licensed Product sold or otherwise transferred to an
independent third party not an Affiliate of the seller or transferor, the fair
market value of such non-cash consideration on the date of the transfer as
known to Roche, or as reasonably estimated by Roche if unknown, shall be
included in the definition of Net Sales.
1.09 "PDL Know-How" means, except as otherwise set forth in this
Section 1.09, all inventions, discoveries, trade secrets, information,
experience, data, formulas, procedures and results in the Field, and
improvements thereon, including any information regarding the structure,
sequence and characterization of Antibodies in the Field, methods of making
and the characterization of cell lines producing Antibodies in the Field, and
methods of achieving high levels of expression of Antibodies in the Field,
which are rightfully held by PDL as of the Effective Date, or which are
developed or acquired by PDL during the period beginning on the Effective Date
and ending one year after termination of the Research Program, and which Know-
How is needed for registration, manufacturing, using or selling products in
the Field; provided, however, that PDL Know-How excludes any Know-How of any
kind concerning generic methods of designing, developing or preparing
antibodies including, but not limited to, methods of humanizing antibodies,
methods of reducing the immunogenicity of antibodies, and methods of
increasing the affinity of antibodies.
1.10 "PDL Patent" means all patent applications owned or controlled by
PDL ("Sole PDL Patents") and all patent applications resulting from Joint
Inventions ("Joint Roche-PDL Patents") containing claims in the Field, which
are filed prior to or during the term of this Agreement in the United States
or any foreign jurisdiction, including any addition, continuation,
continuation-in-part or division thereof or any substitute application
therefor; any patent issued with respect to such patent application, any
reissue, extension or patent term extension of any such patent, and any
confirmation patent or registration patent or patent of addition based on any
such patent; and any other United States and foreign patent or inventor's
certificate covering claims in the Field.
1.11 "Research Program" means the collaborative scientific research
program between PDL and Roche described more fully in Article VI hereof.
1.12 "Roche Inventions" means any inventions in the Field which are
made during the term of this Agreement by employees of Roche of persons
contractually required to assign or license patent rights covering such
inventions to Roche.
1.13 "Territory" means the United States of America and its territories
and possessions where the patent laws of the United States are in force. It
is understood that PDL and Roche's parent company, F. Hoffmann-La Roche & Co.
Limited Company of Basle, Switzerland ("F. Roche"), are contemporaneously
entering into a separate license agreement (the "F. Roche Agreement") for all
countries of the world outside the Territory.
1.14 "Valid Claim" means a claim in any issued patent within the PDL
Patents which has not been disclaimed or held unenforceable or invalid by a
decision of a court or governmental agency of competent jurisdiction by a
decision beyond right of review.
CONFIDENTIAL TREATMENT REQUESTED
II. LICENSE GRANT
2.01 License Grant. PDL grants to Roche and to Roche's Affiliates the
sole and exclusive right to the PDL Know-How and the PDL Patents, but only to
the extent necessary to make, have made, use and sell Licensed Products in the
Field within the Territory. For so long as Roche is in compliance with its
obligations under Section 7.01 hereof, Roche may sublicense the right to make,
have made, use and sell Licensed Products in the Field within the Territory,
but no other rights may be sublicensed. Any such sublicense shall be subject
to the Section 4.05 hereof, and shall terminate automatically if Roche or F.
Roche shall not have remedied or initiated steps to remedy a breach of
Section 7.01 hereof or Section 5.01 of the F. Roche Agreement, respectively,
in a manner reasonably satisfactory to PDL within sixty (60) days after
receipt by Roche of notice of such breach from PDL.
2.02 Identification of Patents. Set forth on Appendix A is a list
identifying patents or patent applications which comprise Sole PDL Patents.
PDL shall update this list by delivering a supplement to Roche no less
frequently than once per year during the term of this Agreement.
III. MILESTONES AND PAYMENTS
3.01 Kidney Transplant Indication.
(a) Roche agrees to pay PDL each of the Milestone Payments specified
below upon the occurrence of certain events, immediately with respect to
Milestone #1 and within thirty (30) days with respect to all other Milestones,
in accordance with the schedule set forth below:
Milestone # Payment $(M)
#1 Full execution and deliver of the Agreements and [ ]
delivery of a cell line producing the humanized
anti-Tac antibody by PDL to Roche.
#2 Delivery of a cell line producing an Antibody in the [ ]
Field at greater than or equal to [ ] ug/ml. (plus maximum
Determination of yield shall be made for production bonus of [ ])
at Roche's facility under scale-up conditions, using
media to be mutually agreed upon. A [ ] shall be
paid for each 1 ug/ml greater than [ ] ug/ml, with
maximum total bonus payments of [ ]. Any bonus
payments shall be made upon making yield
determinations at both six months and twelve months
from the Effective Date.
#3 Demonstration of reduced [ ] in [ ]
monkey test for Antibody in the Field compared to
the murine anti-Tac antibody.
#4 [ ] [ ]
#5 Initial demonstration in human clinical trials that [ ]
an Antibody in the Field can be safely administered
in multiple dose protocol.
#6 Initiation of efficacy studies for an Antibody in [ ]
the Field for [ ] indication.
#7 Filing of U.S. Product License Application ("PLA") [ ]
with the FDA. [ ]
(b) If any Milestone is not achieved (excluding those events which
trigger a bonus payment under Milestone #2) but Roche elects to proceed to the
next Milestone, payment for the Milestone not achieved shall be made to PDL at
the time of payment for such next Milestone.
(c) Once the foregoing Milestone Payments have been paid for kidney
transplant rejection indication, no further Milestone Payments are due for any
other transplant rejection indications.
3.02 Additional Major Non-Transplant Indications.
Subject to Section 3.01(c), Roche agrees to pay PDL the Milestone
Payments specified below within thirty (30) days of the occurrence of (or, if
achieved by PDL, receipt by Roche of notice of) certain events in accordance
with the schedule set forth below:
Milestone # Payment $(M)
#1 IND application opened in the United States for an
Antibody in the Field for a major disease (as
defined below).
a. If filed by Roche. [ ]
b. If filed by PDL and Roche conducts further [ ]
new drug approval testing.
#2 Roche initiates [ ] for establishing [ ]
safety and efficacy of an Antibody in the Field for
a major disease such as, for example, Type One
diabetes, rheumatoid arthritis, SLE, multiple
sclerosis, ankylosing spondylitis, inflammatory
bowel disease or any disease where drugs for
treating such a disease would not be classified as
orphan drugs under then applicable U.S. law.
3.03 Cap on Milestone Payments. There shall be a cap on total
Milestone Payments made by Roche to PDL pursuant to Sections 3.01 and 3.02
hereof, excluding any bonus payments, of Fifteen Million Dollars
($15,000,000). If Roche initiates a pivotal study(ies) in the United States
for a second major disease indication pursuant to Milestone #2 of Section 3.02
and has not previously paid PDL a total of Fifteen Million Dollars
(15,000,000) in Milestone Payments under Sections 3.01 and/or 3.02 at the time
such studies are initiated, then at that time Roche shall pay to PDL the
difference between Fifteen Million Dollars ($15,000,000) and the total amount
of Milestone Payments already made to PDL excluding any bonus payments. If
Roche conducts clinical trials for a major disease indication and such trials
proceed faster than clinical trials for the kidney transplant indication (or
if the kidney transplant indication trials are stopped) then the Milestone
Schedule and Payments set forth in Section 3.01 are to be applied to such
other major disease indication in lieu of the Milestone Schedule and Payments
in Section 3.02 if the remaining Milestone Payments to be made under
Section 3.01 are greater than [ ].
3.04 Additional Indications Pursued by PDL. PDL reserves the right to
conduct clinical trails and otherwise pursue the FDA product license approval
process for Antibodies in the Field for uses other than kidney transplant
indication ("Additional Testing"); provided, however, that if PDL undertakes
Additional Testing, it shall use, and Roche hereby agrees to supply and
license to PDL at no cost to PDL for this purpose, Antibodies in the Field
manufactured by Roche; and provided further, that PDL shall regularly consult
with and inform Roche concerning the Additional Testing and that PDL must
obtain the prior written consent of Roche to the clinical protocols proposed
by PDL, which consent shall not be unreasonably withheld.
IV. ROYALTIES
4.01 Roche agrees to pay PDL royalties for sales of Licensed Products
and Combination Products according to the schedule and terms set forth below.
(a) Years 1 through 3. For the first three (3) years following
Initial Commercialization of a particular Licensed Product, Roche shall pay
PDL royalties on the aggregate annual worldwide Net Sales of all Licensed
Products as follows:
Net Sales ($ in millions) Royalty Rate
Up to and including [ ] [ ]
Amount in excess of [ ] but not exceeding [ ] [ ]
Over [ ] [ ]
For purposes of computing aggregate annual worldwide Net Sales, Roche's
Net Sales in the Territory will be combined with the Net Sales of F. Roche for
all countries of the world outside of the Territory. This same understanding
is being incorporated into the agreement between PDL and F. Roche concerning
the sale of Licensed Products outside the Territory.
(b) Years 4 and Succeeding. If a Valid Claim covering any
Licensed Product has been issued in the Territory prior to or during the three
(3) year period following Initial Commercialization, Roche shall pay PDL
royalties in accordance with the provisions of Section 4.01(a). subject to
Section 4.02 below, if no such Valid Claim has been issued then Roche shall
pay PDL a royalty rate of [ ] of the Net Sales in the
Territory. In such case, Roche's obligation to pay PDL royalties with respect
to any particular Licensed Product shall terminate on the tenth anniversary of
Initial Commercialization of such Licensed Product unless prior to that time
such Valid Claim has been issued in the Territory, at which time Roche shall
resume paying PDL royalties at the rates specified in Section 4.01(a) above.
(c) Expiration After Year [ ]. If there are no Valid Claims,
Roche's obligation to pay royalties to PDL hereunder shall expire with respect
to any particular Licensed Product on the [ ] anniversary of the Initial
Commercialization of such Licensed Product in the Territory.
(d) Antibodies in the Field Not Provided or Developed by PDL.
In consideration of the disclosure to Roche of PDL Know-How and cell lines as
provided for herein, Roche agrees that products incorporating or using
Antibodies in the Field which are not provided or developed by PDL shall
nevertheless be conclusively presumed to utilize PDL Know-How. Accordingly,
Roche shall pay PDL royalties on sales of each such product in the Territory
for a period of [ ] years from Initial
Commercialization of such product in accordance with the terms of
this Section 4.01, and such sales shall constitute "Net Sales" for purposes
hereof.
4.02 De Facto Exclusivity. For purposes of this Article IV, the term
"de facto exclusivity" means that Roche, together with its Affiliates and
sublicensees, controls at least [ ] of the market for a particular Licensed
Product in the Territory as measured by unit sales. If no Valid Claim has
been issued in the Territory and Roche does not enjoy de facto exclusivity for
a Licensed Product at any time after [ ] years following Initial
Commercialization, then Roche shall pay PDL a royalty rate of [ ] of
the Net Sales in the Territory of that product until the [ ] anniversary
of Initial Commercialization, or until Roche shall acquire de facto
exclusivity for that product or until such time as a Valid Claim issues in the
Territory (at which time Roche shall resume paying PDL royalties at the rates
specified in Sections 4.01(a) or (b) above, whichever is applicable).
4.03 Milestone Payments Credited Against Royalties. Roche shall have
the right to credit [ ] of all Milestone Payments, exclusive of bonus
payments, actually made to PDL in excess of [ ] against future
royalties due to PDL pursuant to this Article IV provided that such credits,
when added to the offset provided for in Section 4.04 below, may not reduce
the royalties to be paid to PDL to less than fifty percent (50%) of the amount
which would otherwise be due pursuant to Section 4.01 hereof.
4.04 Offset for Third Party Licenses.
(a) If PDL and Roche agree in writing that either party must
obtain a license from an independent third party in order for Roche to
manufacture, use or sell a Licensed Product or for PDL to fulfill its
obligations under the Research Program and if PDL and Roche agree upon the
terms of such license ("Third Party License"), then the parties shall [ ]
the cost of that license [ ]. Such cost includes license fees and any
other fixed costs associated with the Third Party License as well as any
royalties. The parties then shall, within thirty (30) days, reimburse each
other in the manner necessary to effect a [ ] of such license fees
and other fixed costs. Both parties hereby acknowledge that PDL has obtained
a required license from the National Technical Information Service ("NTIS") to
use the anti-Tac antibody prepared against the IL-2R in order to carry out the
activities anticipated by this Agreement, and that Roche will reimburse PDL
within thirty (30) days of the Effective Date so that the license fees and
other fixed costs of the NTIS license will have been [ ].
(b) PDL's share of the royalties portion of the cost of any
Third Party License, including the aforementioned license from NTIS, shall be
(i) accrued against and deducted from any royalties due to PDL from Roche
pursuant to Sections 4.01 and 4.02 if Roche pays the royalties due
under the Third Party License to such third party, and (ii) accrued in favor
of and added to any royalties due to PDL from Roche pursuant to Sections 4.01
and 4.02 if PDL pays the royalties due under the Third Party License to such
third party; provided, however, that this addition or offset shall not cause
PDL's royalties to be reduced under the schedule set forth in Section 4.01 to
less than [ ] of Net Sales in any year, or under Sections 4.01(b) and
4.02 to less than [ ] if Roche has de facto exclusivity and [ ] if
Roche does not have de facto exclusivity, and provided further, that Roche's
total royalty obligations to PDL under Sections 4.01 and 4.02 when added to
those royalties payable to third parties pursuant to Third Party Licenses
shall not exceed [ ] of Net Sales in any year.
4.05 Sublicenses. Any Net Sales of a Roche sublicensee shall be
treated as Net Sales of Roche for purposes of royalty payments hereunder. If
Roche shall grant any sublicenses under this Agreement, then Roche shall
obtain the written commitment of such sublicensees to abide by all applicable
terms and conditions of this Agreement and Roche shall remain responsible to
PDL for the performance of any and all terms by such sublicensee. All such
sublicenses shall terminate on termination of this Agreement.
4.06 Royalties upon Termination. If this Agreement is terminated
pursuant to Sections 11.02, 11.03, or 11.04 below, Roche shall continue to pay
PDL any royalties earned pursuant to this Article IV prior to the date of
termination and any royalties earned thereafter as a result of sales under
Section 11.05.
V. ACCOUNTING AND PAYMENTS
5.01 Quarterly Royalty Payments and Reports. Roche agrees to make
royalty payments and written reports to PDL within forty-five (45) days after
the end of each calendar quarter covering all sales of Licensed Products by
Roche, its Affiliates or sublicensees for which invoices were sent during such
calendar quarter. Each report shall state:
(a) for Licensed Products disposed of by sale, the quantity,
description, Net Sales, GIP and the deductions pursuant to Section 1.08 by
which such GIP is reduced to Net Sales,
(b) for Licensed Products disposed of other than by sale, the
quantity, description, and nature of the disposition, and
(c) the calculation of royalties due to PDL for such quarter
pursuant to Section 1.08 and Article IV hereof.
The information contained in each in each such report shall be
considered confidential and PDL agrees not to disclose such information to any
third party except as may be required by law, or to PDL's shareholders during
such time as PDL is a privately-held company pursuant to any contract among
PDL and such shareholders. Every other quarterly report shall reconcile
aggregate annual Net Sales attributable to Roche with aggregate annual
worldwide Net Sales attributable to F. Roche. Concurrent with the making of
each quarterly report, Roche shall include payment due PDL of royalties for
the calendar quarter covered by such report.
It is understood that pursuant to this provision, only one royalty
shall be payable on a given unit of Licensed Produce disposed of under this
Agreement. In the case of transfers or sales of any
Licensed Product between Roche, F. Roche or an Affiliate or sublicensee of
Roche or F. Roche, only one royalty payment shall be due, and such royalty
shall be payable with respect to the sale of such Licensed Product to an
independent third party not an Affiliate of the seller.
5.02 Termination Report. Roche also agrees to make a written report to
PDL within ninety (90) days after the date on which Roche, F. Roche or their
Affiliates or sublicensees last sell a Licensed
Product, stating in such report the same information called for in each
quarterly report by Section 5.01 for all Licensed Products and Combination
Products made, sold or otherwise disposed of and upon which were not
previously reported to PDL.
5.03 Accounting. Roche agrees to keep full, clear and accurate records
for a period of at least three (3) years, or such longer period as may
coincide with Roche's internal records retention policy, setting forth the
manufacturing, sales and other disposition of Licensed Products and
Combination Products sold or otherwise disposed of under the license herein
granted in sufficient detail to enable
royalties payable to PDL hereunder to be determined. Roche further agrees to
permit its books and records to be examined by an independent accounting firm
selected by PDL from time to time to the extent necessary to verify reports
provided for in Sections 5.01 and 5.02 above. Unless PDL obtains the prior
written consent of Roche, such accounting firms must be selected from among
those firms commonly referred to as the "Big Eight" firms in the Territory.
Such examination is to be made at the expense of PDL, except in the event that
the results of the audit reveal a discrepancy in favor of Roche of 10% or more
over the period being audited, in which case reasonable audit fees for such
examination shall be paid by Roche.
5.04 Methods of Payments. All payments due to PDL hereunder, plus any
payments due under Articles III and VI, shall be paid in United States dollars
by wire transfer to a bank in the United States designated in writing by PDL.
VI. RESEARCH PROGRAM
6.01 Term. The Research Program shall have an initial term of two (2)
years from the Effective Date. It may be extended on a year-to-year basis at
Roche's option, with the areas of scientific research to be mutually agreed
upon. The level of quarterly financial support contributed by Roche pursuant
to Section 6.04 and the numbers of scientific personnel contributed by PDL
pursuant to Section 6.02 shall remain unchanged by any such extension. If
Roche desires not to extend the Research Program beyond its initial term or
any subsequent term, it shall so notify PDL in writing at least six (6) months
prior to the expiration of such term.
6.02 PDL Contributions. PDL agrees to provide the services of an
annual average of [ ] full time employees, including scientists and
technicians, to conduct scientific research in the following areas:
(a) as a first priority, the delivery to Roche of a cell line
capable of producing a humanized anti-Tac antibody or antibodies;
(b) the development of additional Antibodies in the Field;
(c) the development of Antibodies in the Field which have
increased binding affinity;
(d) the development of cell lines expressing Antibodies in the
Field at high levels; and
(e) such additional areas as the parties may agree upon, if any.
6.03 Cell Lines
(a) PDL agrees to deliver to Roche viable samples of all cell
lines producing any Antibodies in the Field developed under the research
activities described in Section 6.02, and to deliver additional samples of
such cell lines during the term of this Agreement as reasonably required by
Roche to carry out its activities under this Agreement. Roche agrees to
deliver back to PDL viable samples of such cell lines as may be requested by
PDL.
(b) Ownership of any cell lines developed under the Research
Program or delivered to Roche under Milestone #1 of Section 3.01, together
with their progeny and derivatives, shall remain vested at all times in PDL.
(c) Roche may only use the cell lines delivered to it under this
Section 6.03 or under Section 3.01, or their progeny or derivatives or the
plasmids contained therein, to make, have made, use and sell Licensed Products
in the Field within the Territory. Furthermore, the plasmids or parts thereof
may only be used with the genes encoding antibodies developed or provided by
PDL pursuant to the terms of this Agreement.
(d) EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 6.10 BELOW, PDL
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, WITH RESPECT TO ANY CELL LINES DELIVERED HEREUNDER. THERE ARE NO
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR THAT THE USE OF THE CELL LINES DELIVERED TO ROCHE UNDER
SECTION 3.01 OR THIS SECTION 6.03 WILL NOT INFRINGE ANY PATENT OR OTHER
RIGHTS.
6.04 Roche Contributions. Roche, in consideration of PDL's obligations
under Section 6.02 hereof, agrees to pay to PDL [ ] per quarter in the
first year of the Research Program and [ ] per quarter in each subsequent
year of the Research Program in support of its activities. The first quarter
of the Research Program shall commence on February 1, 1989, with all
subsequent quarters commencing on May 1, August 1 and November 1,
respectively.
6.05 Records. PDL agrees to keep records for a period of at least four
(4) years which confirm that the PDL is meeting its obligations under
Section 6.02 above, and to permit such records to be examined by a
representative of Roche from time to time to the extent necessary to verify
the commitment of human resources by PDL set forth in Section 6.02.
6.06 Research Protocol. PDL agrees to prepare, with the assistance of
Roche, a statement of scientific goals and research protocols designed to
support the areas of research set forth in Section 6.02(a)-(d).
6.07 Management and Meetings. Initially upon entering into this
Agreement, each party shall nominate a Scientific Coordinator or Coordinators
who will be responsible for facilitating the exchange of information and
promoting and monitoring the progress of the Research Program. The Scientific
Coordinators shall meet within sixty (60) days following the Effective Date at
a place to be mutually agreed upon and, thereafter, at locations designated
alternatively by the parties, approximately every six (6) months, beginning at
the end of the six month after the first formal meeting and continuing
thereafter until a final meeting takes place within sixty (60) days after
termination of the Research Program. In addition, representatives of the
parties shall meet informally as the Scientific Coordinators deem appropriate.
Each party shall pay its own travel and lodging expenses.
6.08 Exchange of Information. At the outset of this Agreement, Roche
and PDL shall inform each other, to the extent they have not already done so,
of such knowledge as they possess in the Field which is necessary for the
other party to carry out its obligations under this Agreement. Each party
will permit access during the Research Program at reasonable times and with
reasonable frequency to the relevant scientific personnel of the other party.
The parties agree to inform each other on a timely basis of all results in the
Field obtained by them during the Research Program to the extent such results
are necessary for the other party to carry out its obligations under this
Agreement or to reach the goals of the Research Program.
6.09 Reports. At least thirty (30) days prior to each of the meetings
prescribed above, each party shall prepare written progress reports for the
other party which summarize the reporting party's progress to date in
achieving the goals of the Research Program. Following each such meeting, the
parties shall jointly prepare a report summarizing the discussions and
conclusions which were held and reached and setting forth plans for the
Program for the next six months. A final, comprehensive technical report
shall be submitted by each party to the other within sixty (60) days after
expiration or termination of the Research Program.
6.10 Representations of PDL. PDL represents and warrants to Roche
that, except as may otherwise be disclosed in writing to Roche:
(a) PDL has the full right and authority to enter into this
Agreement;
(b) to the best knowledge of PDL after reasonable investigation,
no third party has any right, title or interest in the Sole PDL Patents or PDL
Know-How as the result of such third party's former employment of any PDL
employee;
(c) PDL is not aware of any patent or other proprietary rights
of third parties which might be infringed by the Sole PDL Patents or the PDL
Know-How, including cell lines delivered hereunder.
VII. CERTAIN COVENANTS OF ROCHE
7.01 Diligence. Upon execution of this Agreement, Roche shall use
reasonable diligence in proceeding with (i) the development, testing and
manufacturing of Licensed Products in accordance with the Milestone Schedule
set forth in Article III hereof, and (ii) the subsequent marketing and sale of
Licensed Products. Reasonable diligence as used in this Agreement shall mean
the same standard of effort used by Roche in the development, testing,
manufacturing, marketing and sale of its own protein-based products which must
be approved by the FDA before they can be sold in the Territory. If Roche
fails to exercise such diligence, PDL may terminate this Agreement and Roche's
rights hereunder pursuant to Section 11.04 below.
7.02 Summary Information. Roche agrees to provide semi-annually to PDL
summaries of the results of scale-up, GMP manufacturing, pre-clinical and
clinical trials and other information concerning the Field which is generated
pursuant to Roche's efforts to complete Milestones #2-7 as set forth in
Section 3.01 and Milestones #1 and #2 as set forth in Section 3.02.
VIII. OWNERSHIP OF TECHNOLOGY
8.01 PDL Technology. Ownership of the PDL Know-How and Sole PDL
Patents shall remain vested at all times in PDL. Notwithstanding the
provisions of Section 2.01, PDL expressly reserves under this Agreement
(i) all rights to use the PDL Know-How and Sole PDL Patents to make, have
made, use and sell anywhere in the world all products not within the Field and
(ii) the right to use the PDL Know-How and Sole PDL Patents for PDL's internal
research purposes in the Field.
8.02 Joint Inventions and Joint Roche-PDL Patents. Ownership of Joint
Inventions and Joint Roche-PDL Patents shall be vested jointly in PDL and
Roche. Roche shall have the exclusive right to make, have made, use or sell
any Joint Invention or Joint Roche-PDL Patent in the Field within the
Territory during the term of the Agreement. Both parties shall have the non-
exclusive right to make, have made, use or sell any Joint Invention or Joint
Roche-PDL Patent outside the Field during the term of the Agreement, and
neither party shall be obligated to account to the other for such use. Upon
the expiration or termination of the Agreement, both parties shall have the
non-exclusive right to make, have made, use or sell any Joint Invention or
Joint Roche-PDL Patent without restriction and without any obligation to
account to the other party for such use. Notwithstanding the foregoing or the
provisions of Section 2.01, PDL expressly reserves the right to use Joint
Inventions and Joint Roche-PDL Patents for PDL's internal research purposes in
the Field.
8.03 Roche Inventions. PDL hereby acknowledges that this Agreement
does not grant PDL any ownership rights in the Roche Inventions.
IX. INVENTIONS
9.01 Sole PDL Patents. PDL agrees to prosecute and reasonably maintain
all of the patents and applications included within the Sold PDL Patents. PDL
shall bear [ ] costs and expenses for such prosecution and
maintenance except for the costs and expenses of foreign filings for such
patents which are to be borne by F. Roche in accordance with the terms of the
F. Roche Agreement. At PDL's reasonable request, Roche shall cooperate, in
all reasonable ways, in connection with the prosecution of all patent
applications included within the Sole PDL Patents. Should PDL decide that it
is no longer interested in maintaining or prosecuting a Sole PDL Patent, it
shall promptly advise Roche thereof and, at the request of Roche, PDL and
Roche shall negotiate in good faith to determine an appropriate course of
action in the interests of both parties. If any Sole PDL Patents are
assigned to Roche, Roche will thereafter prosecute and reasonably maintain
such at Roche's own cost to the extent that Roche desires to do so.
9.02 Joint Inventions.
(a) PDL will have the first right of election to file priority
patent applications for Joint Inventions in any country in the world. If PDL
declines to file such applications then Roche may do so. Regardless of which
party files a priority patent application, however, any claims covered by such
applications shall be considered as part of the PDL Patents for the purpose of
defining a Valid Claim under this Agreement.
(b) The party not performing the priority patent filings for
Joint Inventions pursuant to this Section 9.02 undertakes without cost to the
filing party to obtain all necessary assignment documents for the filing
party, to render all signatures which shall be necessary for such patent
filings and to assist the filing party in all other reasonable ways which are
necessary for the issuance of the patents involved as well as for the
maintenance and prosecution of such patents. The party not performing the
patent filings shall upon request be authorized by the other party to have
access to the files concerning such patents in any patent offices in the
world.
(c) The party performing the priority patent filings for Joint
Inventions pursuant to this Section 9.02 undertakes to perform the
corresponding convention filings from case to case, after having discussed the
countries for foreign filings with the other party; provided, however, that,
pursuant to the F. Roche Agreement, F. Roche is to bear any costs associated
with such foreign filings regardless of which party performs such filings.
9.03 General Procedures. The parties shall observe the following
procedures for patent applications for inventions arising from this Agreement:
(a) As soon as one of the parties concludes that it wishes to
file a patent application covering an invention in the Field, it shall
immediately inform the other party thereof and consult about the filing
procedures concerning such patent application. For this purpose, such party
will provide the other party with the determination of inventors and scope of
claims as early as possible. Should a party be faced with possible loss of
rights, such communications may take place promptly after filing a convention
application.
(b) Except as set forth in Sections 9.01 and 9.02 with respect
to the costs of foreign filings, the party performing any priority patent
filings as described above shall be obliged to prosecute and reasonably
maintain such applications and any patents resulting therefrom and will have
to bear the costs associated therewith. On request of the party performing
the filing, the other party will cooperate, in all reasonable ways, in
connection with the prosecution of all such patent applications relating to
inventions. The party performing the filing shall advise the other party of
any substantial action or development in the prosecution of its patent
applications and patents, in particular of the question of scope, the issuance
of, or the rejection of, an interference involving or an opposition to any
respective patent application or patent.
(c) Inventions and other intellectual property made by either
party outside the Field shall be excluded from the provisions of this
Agreement and shall belong solely to the party having made the invention or
other intellectual property.
X. ENFORCEMENT OF PATENTS
10.01 Sole PDL Patents. In the event of any action against a third
party for infringement of any claim in any issued patent within the Sole PDL
Patents, or the institution by a third party of any proceedings for the
revocation of any such claim, each party will notify the other promptly and,
following such notification, the parties shall confer. PDL shall have the
right, but shall not be obligated, to prosecute such actions or to defend such
proceedings at its own expense, in its own name and entirely under its own
direction and control. Roche will reasonably assist PDL in such actions or
proceedings if so requested, and will lend its name to such actions or
proceedings if requested by PDL or required by law. PDL will pay or reimburse
Roche for all costs, expenses and liabilities which Roche may incur or suffer
in affording assistance to such actions or proceedings. If PDL elects not to
bring any action for infringement or to defend any proceeding for revocation
of any claims in any issued patent within the Sole PDL Patents within ninety
(90) days of being requested by Roche to do so, Roche may bring such action or
defend such proceeding at its own expense, in its own name and entirely under
its own direction and control. PDL will reasonably assist Roche in any action
or proceeding being prosecuted or defended by Roche, if so requested by Roche
or required by law. Roche will pay or reimburse PDL for all costs, expenses
and liabilities which PDL may incur or suffer in affording assistance to such
actions or proceedings. No settlement of any such action or defense which
restricts the scope or affects the enforceability of PDL Know-How or Sole PDL
Patents may be entered into by either PDL or Roche without the prior consent
of the other party hereto, which consent, in the case of Roche shall not be
unreasonably withheld and in the case of PDL may be withheld in PDL's sole and
absolute discretion.
If either party elects to bring an action for infringement or to defend
any proceedings for revocation of any claims pursuant to this Section 10.01
and subsequently ceases to continue or withdraws from such action or defense,
it shall forthwith so notify the other party and the other party may
substitute itself for the withdrawing party and the parties' respective rights
and obligations under this Section 10.01 shall be reversed.
10.02 Joint Roche-PDL Patents. In the event of any action against a
third party for infringement of any claim in any issued patent within the
Joint Roche-PDL Patents, or the institution by a third party of any
proceedings for the revocation of any such claim, each party will notify the
other promptly and, following such notification, the parties shall confer to
determine whether either or both parties shall control the prosecution or
defense of such action or proceeding and who shall bear the costs thereof. If
the parties are unable to reach agreement within ninety (90) days of the
notification referred to above, then each party shall have the right to bring
such action or defend such proceeding at its own expense, in its own name and
entirely under its own direction and control; provided, however, that if both
parties elect to prosecute or defend, each party shall bear its own expenses
but both parties shall have equal control over such prosecution or defense.
No settlement of any action or defense which restricts the scope or affects
the enforceability of Joint Roche-PDL Patents may be entered into by either
PDL or Roche without the prior consent of the other party hereto, which
consent shall not be unreasonably withheld.
10.03 Distribution of Proceeds. In the event either party exercises the
rights conferred in Section 10.01 or 10.02 hereof, and recovers any damages or
other sums in such action, suit or proceeding or in settlement thereof, such
damages or other sums recovered, shall first be applied to all costs and
expenses connected therewith including reasonable attorneys fees, necessarily
involved in the prosecution and/or defense of any suit or proceeding, and if
after such reimbursement any funds shall remain from such damages or other
sums recovered, said recovery shall belong to the party exercising its rights;
provided, however, that any remaining recovery by Roche shall be shared, with
seventy-five percent (75%) being retained by Roche and twenty-five percent
(25%) being paid to PDL.
10.04 Defense of Infringement Actions. Roche shall defend at its own
cost any infringement suit that may be brought against PDL or Roche on account
of the development, manufacture, production, use or sale of any Licensed
Product, and shall indemnify and save PDL harmless against any such patent or
other infringement suits, and any claims, losses, damages, liabilities,
expenses, including reasonable attorneys' fees and cost, which may be incurred
by PDL therein or in settlement thereof. Any and all settlements which
restrict the scope or enforceability of PDL Know-How or Sole PDL Patents must
be approved by PDL in its sole and absolute discretion before execution by
Roche. Any and all settlements which restrict the scope or enforceability of
Joint Roche-PDL Patents must be approved by PDL before execution by Roche,
such approval not to be unreasonably withheld. PDL shall not be required to
approve any settlement which does not include as a condition thereof the
granting to PDL of a full and unconditional release of claims. PDL will use
its best efforts to avoid knowingly infringing any patents of third parties in
PDL's design of the cell lines being delivered to Roche hereunder, and PDL
will inform Roche of any such potential infringement promptly upon PDL's
becoming aware of such potential infringement.
10.05 Right to Counsel. Each party to this Agreement shall always have
the right to be represented by counsel of its own selection and its own
expense in any suit or other action instituted by the other for infringement,
under the terms of this Agreement.
XI. TERM AND TERMINATION
11.01 Term. Unless earlier terminated pursuant to the terms of this
Article XI, this Agreement shall remain in effect until the later of (a) the
date of expiration of the last to expire of any Valid Claims or (b) the date
of the [ ] anniversary of the Initial Commercialization of the last Licensed
Product to be introduced by Roche hereunder, at which time this Agreement
shall automatically expire.
11.02 Termination by Mutual Agreement. This Agreement may be
terminated by the written agreement of the parties.
11.03 Termination by Roche. Roche may terminate this Agreement upon
ninety (90) days written notice to PDL; however, any such termination prior to
the end of the initial two-year term of the Research Program shall not relieve
Roche of its obligations under Section 6.04 to make quarterly payments to PDL
for the full two-year period provided in Section 6.01.
11.04 Termination by Default. If either party defaults in the
performance of, or fails to be in compliance with, any material agreement,
condition or covenant of this Agreement, the party not in default may
terminate this Agreement at its option; provided, however, that if such event
of default or non-compliance is the first occurrence of an event giving rise
to the right of termination pursuant to this Section 11.04, the non-defaulting
party may terminate this Agreement only if such default or noncompliance shall
not have been remedied, or steps initiated to remedy the same to the other
party's reasonable satisfaction within sixty (60) days after receipt by the
defaulting party of a written notice thereof from the other party. If PDL
terminates the F. Roche Agreement pursuant to Section 7.04 thereof, PDL may
elect to simultaneously terminate this Agreement upon written notice to Roche.
If F. Roche terminates the F. Roche Agreement pursuant to Section 7.04
thereof, Roche may elect to simultaneously terminate this Agreement upon
written notice to PDL.
11.05 Inventory. Upon termination of this Agreement, PDL hereby grants
Roche a license to sell within one (1) year of such termination any Licensed
Products in Roche's or its Affiliates or sublicensee's inventory on the date
of such termination, which have not previously been sold ("Inventory");
provided, however that Roche shall pay the royalties due on such Inventory in
the amounts and manner provided for in Articles IV and V.
11.06 Return of Materials and Information. Subject to Section 12.05
hereof concerning archival copies, upon termination of this Agreement by Roche
pursuant to Section 11.03 or by either or both parties pursuant to
Sections 11.02 or 11.04: (a) Roche forthwith shall return to PDL all cell
lines and their progeny, antibodies and other biological materials provided to
Roche by PDL under this Agreement, as well as complete copies of all data and
results of scale-up, GMP manufacturing, pre-clinical and clinical trials and
other information generated pursuant to Roche's efforts to complete
Milestones #2-7 as set forth in Section 3.01 above and Milestones #1-2 as set
forth in Section 3.02 above; and (b) PDL forthwith shall return to Roche all
scientific instruments and materials and related information provided to PDL
by Roche under this Agreement.
11.07 Rights and Obligations on Termination or Expiration. Unless
expressly provided to the contrary, the provisions of Sections 4.07, 9.04 and
Articles V, X, XII, XIII, and XV (and, if applicable under Section 11.03, the
payment obligations of Roche under Section 6.04), shall survive the
termination of this Agreement. Upon the expiration of this Agreement pursuant
to Section 11.01 above, if it is not otherwise terminated pursuant to this
Article XI, PDL shall grant to Roche a non-exclusive, royalty-free license to
use the PDL Know-How and Sole PDL Patents and cell lines delivered pursuant to
Section 6.03, but only to the extent necessary to make, have made, use and
sell Licensed Products in the Field.
11.08 Archival Copies. Section 11.06 notwithstanding, each party shall
be entitled to keep for archival purposes one copy of all written materials
returned to the other party pursuant to Section 11.06.
XII. CONFIDENTIALITY, DISCLOSURE AND PUBLICATIONS
12.01 Prior Agreements. This Agreement supersedes that certain
Confidential Disclosure Agreement entered into between PDL and Roche on
August 29, 1988.
12.02 Confidentiality. During the term of this Agreement and for a
period of five (5) years following expiration or termination of this
Agreement, each party shall maintain in confidence all information and
materials including, but not limited to, cell lines, their progeny, and
antibodies, disclosed by the other party hereto which such party knows or has
reason to know are or contain trade secrets or other proprietary information
of the other, including, without limitation, information relating to the PDL
Know-How, PDL Patents, Joint Inventions and inventions of the other party, and
the business plans of the other party, including, without limitation,
information provided by either party to the other party hereto prior to the
Effective Date, and shall not use such trade secrets or proprietary
information for any purpose, including, without limitation, for the purpose of
developing products in the Field except as permitted by this Agreement or
disclose the same to anyone other than those of its Affiliates, sublicensees,
employees, consultants, agents or subcontractors as are necessary in
connection with such party's activities as contemplated in this Agreement.
Each party shall obtain a written agreement from any sublicensees, employees,
consultants, agents and subcontractors, prior to disclosure, to hold in
confidence and not make use of such trade secrets or proprietary information
for any purpose other than those permitted by this Agreement. Notwithstanding
the foregoing sentence, with respect to employees or consultants of a party or
such party's Affiliates who have signed a confidentiality agreement in favor
of such party or Affiliate as employer, if such confidentiality agreement
binds the employee or consultant to protect proprietary information disclosed
hereunder to the same extent (or greater) as required by this Section 12.02,
then it shall be sufficient for the employing party to (a) notify such
employees or consultants of the fact that information disclosed hereunder is
governed by such confidentiality agreements and (b) identify to such employees
the information which is so governed. Each party shall be responsible for
ensuring compliance with these obligations by such party's Affiliates,
sublicensees, employees, consultants, agents and subcontractors. Each party
shall use a similar effort to that which it uses to protect its own most
valuable trade secrets or proprietary information to ensure that its
Affiliates, sublicensees, employees, consultants, agents and subcontractors do
not disclose or make any unauthorized use of trade secrets or proprietary
information of the other party hereto. Each party shall notify the other
promptly upon discovery of any unauthorized use or disclosure of the other's
trade secrets or proprietary information.
12.03 Exceptions. The obligation of confidentiality contained in this
Agreement shall not apply to the extent that (a) either party (the
"Recipient") is required to disclose information by order or regulation of a
governmental agency or a court of competent jurisdiction or (b) the Recipient
can demonstrate that (i) the disclosed information was at the time of such
disclosure by the Recipient already in the public domain other than as a
result of actions of the Recipient, its Affiliates, employees, licensees,
agents or subcontractors, in violation hereof; (ii) the disclosed information
was rightfully known by the Recipient or its Affiliates (as shown by its
written records) prior to the date of disclosure to the Recipient in
connection with the negotiation, execution or performance of this Agreement;
or (iii) the disclosed information was received by the Recipient or its
Affiliates on an unrestricted basis from a source unrelated to any party to
this Agreement and not under a duty of confidentiality to the other party, or
(c) disclosure is made to the FDA as part of the FDA's product license
approval process.
12.04 Publications. Prior to public disclosure or submission for
publication of a manuscript describing the results of any aspect of the
Research Program or other scientific activity or collaboration between PDL and
Roche in the Field, the party disclosing or submitting such a manuscript
("Disclosing Party") shall send the other party ("Responding Party") by
express air-mail a copy of the manuscript to be submitted and shall allow the
Responding Party a reasonable time period (not to exceed sixty (60) days from
the date of mailing) in which to determine whether the manuscript contains
subject matter of which patent protection should be sought (prior to
publication of such manuscript) for the purpose of protecting an invention
conceived or developed in connection with the PDL/Roche scientific
collaboration, or whether the manuscript contains confidential information
belonging to the Responding Party. After the expiration of sixty (60) days
from the date of mailing such manuscript, the Disclosing Party shall be free
to submit such manuscript for publication and publish or otherwise disclose to
the public such research results. Should the Responding Party believe the
subject matter of the manuscript contains confidential information or a
patentable invention of substantial commercial value to the Responding Party,
then prior to the expiration of sixty (60) days from the date of mailing of
such manuscript to it by the Disclosing Party, the Responding Party shall
notify the Disclosing Party in writing of its determination that such
manuscript contains such information or subject matter for which patent
protection should be sought. Upon receipt of such written notice from the
Responding Party, the Disclosing Party shall delay public disclosure of such
information or submission of the manuscript for an additional period of sixty
(60) days to permit preparation and filing of a patent application on the
disclosed subject matter. The Disclosing Party shall thereafter be free to
publish or disclose such information, except that the Disclosing Party may not
disclose any confidential information of the Responding Party in violation of
Sections 12.02 and 12.03 hereof. Each Party agrees to give the other party
reasonable opportunity to review and comment on any proposed publication
arising from the research collaboration between the parties. Determination of
authorship for any paper or patent shall be in accordance with accepted
scientific practice. Should any questions on authorship arise, this will be
determined by good faith consultation between the Scientific Coordinators.
XIII. DISPUTE RESOLUTION
13.01 Arbitration. Any claim, dispute or controversy arising out of or
in connection with or relating to this agreement or the breach or alleged
breach thereof shall be submitted by the parties to arbitration by the
American Arbitration Association in Santa Clara County, California under the
commercial rules then in effect for that Association except as provided
herein. All proceedings shall be held in English and a transcribed record
prepared in English. The parties shall choose, by mutual agreement, one
arbitrator within thirty (30) days of receipt of notice of the intent to
arbitrate. If no arbitrator is appointed within the times herein provided or
any extension of time which is mutually agreed upon, the Association shall
make such appointment within thirty (30) days of such failure. The award
rendered by the arbitrator shall include costs of arbitration, reasonable
attorneys' fees and reasonable costs for expert and other witnesses, and
judgment on such award may be entered in any court having jurisdiction
thereof. The parties shall be entitled to discovery as provided in
Sections 1283.05 and 1283.1 of the Code of Civil Procedure of the State of
California, whether or not the California Arbitration Act is deemed to apply
to said arbitration. Nothing in this Agreement shall be deemed as preventing
either party from seeking injunctive relief (or any other provisional remedy)
from any court having jurisdiction over the parties and the subject matter of
the dispute as necessary to protect either party's name, proprietary
information, trade secrets, know-how or any other proprietary right. If the
issues in dispute involve scientific or technical matters, any arbitrator
chosen hereunder shall have educational training and/or experience sufficient
to demonstrate a reasonable level of knowledge in the field of biotechnology.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
13.02 Use of Scientific Coordinators. Both parties shall endeavor to
resolve any disputes emerging out of the activities of the Research Program or
Article III by first having the respective Scientific Coordinators meet to
discuss such disputes.
XIV. FORCE MAJEURE
14.01 If either party shall be delayed, interrupted in or prevented from
the performance of any obligation hereunder by reason of force majeure
including an act of God, fire, flood, earthquake, war (declared or
undeclared), public disaster, strike or labor differences, governmental
enactment, rule or regulation, or any other cause beyond such party's control,
such party shall not be liable to the other therefor; and the time for
performance of such obligation shall be extended for a period equal to the
duration of the contingency which occasioned the delay, interruption or
prevention. The party invoking such force majeure rights of this subparagraph
must notify the other party by registered letter within a period of fifteen
(15) days, from the first and last day of the force majeure unless the force
majeure renders such notification impossible in which case notification will
be made as soon as possible. If the delay resulting from the force majeure
exceeds six (6) months, both parties shall consult together to find an
appropriate solution.
XV. MISCELLANEOUS
15.01 Assignment. This agreement and the licenses herein granted other
than the aforementioned agreement between PDL and F. Roche relating to the
same Field but outside the Territory shall be binding upon and shall inure to
the benefit of, successors of the parties hereto, or to an assignee of all of
the good will and entire business and assets of a party hereto relating to
pharmaceutical and veterinary products but shall not otherwise be assignable
without the prior written consent of the other party, which consent will not
be unreasonably withheld.
15.02 Entire Agreement. This Agreement and the F. Roche Agreement
constitute the entire Agreement between the parties hereto with respect to the
within subject matter and supersede all previous Agreements, whether written
or oral. This Agreement shall not be changed or modified orally, but only by
an instrument in writing signed by both parties.
15.03 Severability. If any provision of this Agreement is declared
invalid by an arbitrator pursuant to Section 13.01 or by a court of last
resort or by any court from the decision of which an appeal is not taken
within the time provided by law, then and in such event, this Agreement will
be deemed to have been terminated only as to the portion thereof which relates
to the provision invalidated by that decision and only in the relevant
jurisdiction, but this Agreement, in all other respects and all other
jurisdictions, will remain in force; provided, however, that if the provision
so invalidated is essential to the Agreement as a whole, then the parties
shall negotiate in good faith to amend the terms hereof as nearly as practical
to carry out the original interest of the parties, and, failing such
amendment, either party may submit the matter to arbitration for resolution
pursuant to Section 13.01.
15.04 Indemnification. Roche shall defend, indemnify and hold harmless
PDL, its trustees, officers, agents and employees harmless from any and all
liability, demands, damages, expenses, and losses of any kind, including those
resulting from death, personal injury, illness or property damage arising
(i) out of the manufacture, distribution, use, testing, sale or other
disposition, by Roche, an Affiliate of Roche, or any distributor, customer,
sublicensee or representative of Roche or anyone in privity therewith, of any
Licensed Product, or any cell lines, their progeny, or other biological
materials, method, process, device or apparatus licensed or provided by PDL to
Roche hereunder, or (ii) as a result of practicing a Joint Invention, or using
PDL Know-How or PDL Patents licensed to Roche under this Agreement, except
where such claim is based on the negligent acts of commission or omission of
PDL.
15.05 Notices. Any notice or report required or permitted to be given
under this Agreement shall be in writing and shall be mailed by United States
mail, or telexed or telecopied and confirmed by mailing, as follows and shall
be effective five (5) days after such mailing:
If to PDL: Protein Design Labs, Inc.
3181 Porter Drive
Palo Alto, California 94304
Attention: President
Copy to: Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301-1809
Attention: Marta L. Morando, Esq.
If to Roche: Hoffmann-La Roche Inc.
340 Kingsland Street
Nutley, New Jersey 07110
Attention: Corporate Secretary
15.06 Choice of Law. The validity, performance, construction, and
effect of this Agreement shall be governed by the laws of the State of
California.
15.07 Publicity. Both parties agree to issue mutual press releases
concerning their entry into this Agreement, with the content of such releases
to be approved in advance by both parties. In all other respects, neither
party shall use the name of the other party in any publicity release without
the prior written permission of such other party, which shall not be
unreasonably withhold. The other party shall have a reasonable opportunity to
review and comment on any such proposed publicity release. Except as required
by law, neither party shall publicly disclose the terms of this agreement or
its terms and conditions unless expressly authorized to do so by the other
party which authorization shall not be unreasonably withheld. In the event
that disclosure shall be agreed upon then the parties will work together to
develop a mutually acceptable disclosure.
15.08 Headings. The captions used herein are inserted for convenience
of reference only and shall not be construed to create obligations, benefits,
or limitations.
15.09 Counterparts. This Agreement may be executed in counterparts, all
of which taken together shall be regarded as one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date.
PROTEIN DESIGN LABS, INC.
By: /s/ Laurence Jay Korn
Title: President
Date: 16 March 1989
HOFFMANN-LA ROCHE, INC.
By: /s/ Irwin Lerner
Title: President and CEO
Date: March 16, 1989
APPENDIX A
Sole PDL Patents
T&T
DOCKET
NO. TITLE INVENTORS FILING DATE SERIAL NO. STATUS
11823-1 Closing and Tso and Queen Dec. 15, 1987 132,387 Pending
Expressions of
Phospholipase C
Genes
11823-4 IL-2 Receptor- Queen Apr. 15, 1988 182,682 Pending
Specific
Chimeric Antibodies
11823-5 Chimeric Antibody Queen Sep. 28, 1988 233,037 Pending
Production
11823-7 Cellular Toxic Queen Nov. 23, 1988 275,462 Pending
Conjugates
11823-7-1 Cellular Toxic Queen, Dec. 15, 1988 PCT/US88/ Pending
(Comb. of Conjugates Chovnick, (Canada & PCT 04493
`387 and Schneider and for Japan &
`462) Tso EPO)
11823-7-2 Cellular Toxic Queen, Dec. 28, 1988 290,968 Pending
(Comb. of Conjugates Chovnick,
`387 and Schneider and
`462) Tso
11823-8 Novel IL-2 Queen and Dec. 28, 1988 290,975 Pending
Receptor Specific Selleck
Human
Immunoglobulins
11823-9 Humanized Queen Feb. 13, 1989 310,252 Pending
Antibody
Production
EXHIBIT 10.9
CONFIDENTIAL TREATMENT REQUESTED
AGREEMENT
This Agreement is entered into as of January 31, 1989 ("Effective
Date"), by and between F. HOFFMANN-LA ROCHE & CO. LIMITED COMPANY of Basle,
Switzerland ("F. Roche) and PROTEIN DESIGN LABS, INC., a Delaware corporation
having offices at 3181 Porter Drive, Palo Alto, California 94304 ("PDL").
WITNESSETH
WHEREAS, PDL has developed a body of technology relating to humanizing
antibodies and, in particular, to humanized antibodies against the
interleukin-2 receptor ("IL-2R");
WHEREAS, PDL and Hoffmann-La Roche Inc. ("Roche"), a New Jersey
corporation, are contemporaneously entering into an agreement ("PDL/Roche
Agreement") which will govern a scientific collaboration, clinical development
program and subsequent commercialization in the Roche Territory (as defined in
Section 1.13 hereof) of pharmaceutical products based on PDL's proprietary
technology relating to such humanized antibodies;
WHEREAS, F. Roche has proven experience in the development, clinical
research, registration, manufacturing and marketing of pharmaceutical
products;
WHEREAS, PDL and F. Roche desire F. Roche to register and market such
pharmaceutical products in countries of the world outside the Roche Territory,
and now wish to embody their mutual understandings in a full text, binding
agreement;
NOW THEREFORE, in consideration of the premises and the mutual promises
and covenants set forth below, PDL and F. Roche mutually agree as follows:
I. DEFINITIONS
For the purposes of this Agreement, the following terms, when written
with an initial capital letter, shall have the meaning ascribed to them below.
1.01 "Affiliate" means any corporation or other business entity
controlled by, controlling, or under common control with a party to this
Agreement through common share holdings, with "control" meaning direct or
indirect beneficial ownership of more than fifty percent (50%) of the voting
stock of, or more than a fifty percent (50%) interest in the income of, such
corporation or other business entity; and any corporation in which the maximum
amount of stock permitted by law to be held by another entity is beneficially
owned, directly or indirectly, by F. Roche.
1.02 "Combination Product" means any product containing both an
ingredient which causes it to be considered a Licensed Product and one or more
other therapeutically active ingredients.
1.03 "Field" means any humanized or chimeric antibody which binds to
the IL-2R, where "humanized" means a genetically engineered combination of a
substantially human framework region and constant region, and complementarity
determining regions from non-human antibodies, and where "chimeric" means a
genetically engineered combination of a human constant region and non-human
variable region. "Antibodies in the Field" means humanized and chimeric
antibodies which bind to the IL-2R. It is believed that these Antibodies in
the Field may be useful for therapeutic, diagnostic, imaging and similar
purposes. It is understood that the Field includes, but is not limited to,
that certain humanized murine monoclonal antibody prepared against the p55
component of the IL-2R ("humanized anti-Tac"). Furthermore, the Field
includes, but is not limited to, all improvements relating to humanized anti-
Tac including without limitation modifications in structure introduced by
genetic engineering, or by chemical or enzymatic cleavage. Also included
within the Field shall be alternate hosts for producing humanized anti-Tac,
methods for purification, formulations incorporating humanized anti-Tac, and
uses and methods of use for humanized anti-Tac in human medicine.
1.04 "Initial Commercialization" means the end of the calendar month
containing the date following the granting of Regulatory Approval (as defined
in Section 1.10 hereof) for a Licensed Product for human therapeutic use for
prevention of kidney transplant rejection or a major disease (within the
meaning of Milestone #2 in Section 3.02 of the PDL/Roche Agreement) on which
F. Roche, its Affiliates or sublicensees first sell such a product to an
independent third party not an Affiliate of the seller in a major market
within the Territory, where "major market" means either Japan or two of the
following three countries: France, Italy or the United Kingdom.
1.05 "Joint Inventions" means any inventions in the Field, whether
patented or not, which are jointly made during the period beginning on the
Effective Date and ending one year after termination of the Research Program
(as defined in Section 1.11 hereof) by at least one PDL employee or person
contractually required to assign or license patent rights covering such
inventions to PDL and at least one F. Roche or Roche employee or person
contractually required to assign or license patent rights covering such
inventions to F. Roche or Roche.
1.06 "Licensed Product" means any product in the Field, including any
Combination Product, the making, use or sale of which utilizes PDL Know-How,
PDL Patents or Joint Inventions or would, in the absence of this Agreement,
infringe a Valid Claim.
1.07 "Net Sales" means the gross invoice price ("GIP") of all Licensed
Products sold or otherwise disposed of for consideration by F. Roche, its
Affiliates or sublicensees to independent third parties not an Affiliate of
the seller, as computed in the central F. Roche Swiss Francs Sales Statistics
for the countries concerned, whereby the amount of such sales in foreign
currencies is converted into Swiss Francs at the average monthly rate of
exchange at the time, after deducting, if not already deducted, from the
amount invoiced:
(a) the amounts actually allowed as volume or quantity
discounts, sales rebates (including cash discounts), price reductions, returns
(including withdrawals and recalls); and
(b) sales, excise and turnover taxes imposed directly upon and
actually paid by F. Roche, its Affiliates or sublicensees.
In addition, there shall be deducted, to the extent not already deducted
from the amount invoiced, an amount equal to seven percent (7%) of the GIP to
cover all other expenses or discounts, including but not limited to customs
duties, transportation and insurance charges and other direct expenses.
In the case of Combination Products for which the Licensed Product and
each of the other therapeutically active ingredients contained in the
Combination Product have established market prices when sold separately, Net
Sales shall be determined by multiplying the Net Sales for each such
Combination Product by a fraction, the numerator of which shall be the
established market price for the Licensed Product(s) contained in the
Combination Product, and the denominator of which shall be sum of established
market prices for the Licensed Product(s) plus the other active ingredients
contained in the Combination Product. When such separate market prices are
not established, then the parties shall negotiate in good faith to determine
the method of calculating Net Sales for Combination Products.
If F. Roche or its Affiliates or sublicensees receive non-cash
consideration for any Licensed Product sold or otherwise transferred to an
independent third party not an Affiliate of the seller or transferor, the fair
market value of such non-cash consideration on the date of the transfer as
known to F. Roche, or as reasonably estimated by F. Roche if unknown, shall be
included in the definition of Net Sales.
1.08 "PDL Know-How" means, except as otherwise set forth in this
Section 1.08, all inventions, discoveries, trade secrets, information,
experience, data, formulas, procedures and results in the Field, and
improvements thereon, including any information regarding the structure,
sequence and characterization of Antibodies in the Field, methods of making
and the characterization of cell lines producing Antibodies in the Field, and
methods of achieving high levels of expression of Antibodies in the Field,
which are rightfully held by PDL as of the Effective Date, or which are
developed or acquired by PDL during the period beginning on the Effective Date
and ending one year after termination of the Research Program, and which Know-
How is needed for registration, manufacturing, using or selling products in
the Field; provided, however, that PDL Know-How excludes any Know-How of any
kind concerning generic methods of designing, developing or preparing
antibodies including, but not limited to, methods of humanizing antibodies,
methods of reducing the immunogenicity of antibodies, and methods of
increasing the affinity of antibodies.
1.09 "PDL Patents" means all patent applications owned or controlled by
PDL ("Sole PDL Patents") and all patent applications resulting from Joint
Inventions ("Joint Roche-PDL Patents") containing claims in the Field, which
are filed prior to or during the term of this Agreement in the United States
or any foreign jurisdiction, including any addition, continuation,
continuation-in-part or division thereof or any substitute application
therefor; any patent issued with respect to such patent application, any
reissue, extension or patent term extension of any such patent, and any
confirmation patent or registration patent or patent of addition based on any
such patent; and any other United States and foreign patent or inventor's
certificate covering claims in the Field.
1.10 "Regulatory Approval" means the granting of all governmental
regulatory approvals required, if any, for the sale of a Licensed Product in a
given country or jurisdiction within the Territory.
1.11 "Research Program" means the collaborative scientific research
program between PDL and Roche described more fully in Article VI of the
PDL/Roche Agreement.
1.12 "F. Roche Inventions" means any inventions in the Field which are
made during the term of this Agreement by employees of F. Roche or persons
contractually required to assign or license patent rights covering such
inventions to F. Roche.
1.13 "Roche Territory" means the United States of America and its
territories and possessions where the patent laws of the United States are in
force. It is understood that the PDL/Roche Agreement comprises a separate but
complementary license agreement covering activities in the Roche Territory.
1.14 "Territory" means all countries of the world excluding the Roche
Territory.
1.15 "Valid Claim" means a claim in any issued patent within the PDL
Patents which has not been disclaimed or held unenforceable or invalid by a
decision of a court or governmental agency of competent jurisdiction by a
decision beyond right of review.
II. LICENSE GRANT
2.01 License Grant. PDL grants to F. Roche and to F. Roche's
Affiliates the sole and exclusive right to the PDL Know-How and the PDL
Patents, but only to the extent necessary to make, have made, use and sell
Licensed Products in the Field within the Territory. For so long as F. Roche
is in compliance with its obligations under Section 5.01 hereof, F. Roche may
sublicense the right to make, have made, use and sell Licensed Products in the
Field within the Territory, but no other rights may be sublicensed. Any such
sublicense shall be subject to Section 3.05 hereof, and shall terminate
automatically if F. Roche or Roche shall not have remedied or initiated steps
to remedy a breach of Section 5.01 hereof or Section 7.01 of the PDL/Roche
Agreement, respectively, in a manner reasonably satisfactory to PDL within
sixty (60) days after receipt by F. Roche of notice of such breach from PDL.
2.02 Identification of Patents. Set forth on Appendix A is a list
identifying patents or patent applications which comprise Sole PDL Patents.
PDL shall update this list by delivering a supplement to F. Roche no less
frequently than once per year during the term of this Agreement.
CONFIDENTIAL TREATMENT REQUESTED
III. ROYALTIES
3.01 F. Roche agrees to pay PDL royalties for sales of Licensed
Products and Combination Products according to the schedule and terms set
forth below:
(a) Years 1 through 3. Prior to and for the first three (3)
years following Initial Commercialization of a particular Licensed Product,
F. Roche shall pay PDL royalties on sales of that product at a rate determined
by the aggregate annual worldwide Net Sales of all Licensed Products as
follows:
Net Sales ($ in millions) Royalty Rate
Up to and including [ ] [ ]
Amount in excess of [ ] but not exceeding [ ] [ ]
Over [ ] [ ]
For purposes of computing aggregate annual worldwide Net Sales,
F. Roche's Net Sales in the Territory will be combined with the Net Sales of
Roche within the Roche Territory. This same understanding is being
incorporated into the PDL/Roche Agreement.
(b) Years 4 and Succeeding. For the fourth and each succeeding
year following Initial Commercialization, F. Roche shall pay PDL royalties in
accordance with the provisions of Section 3.01(a) for Net Sales in a
particular country, provided either (i) the Licensed Product or its method of
manufacture (wherever actually manufactured) is covered by a Valid Claim in
the country of sale, or (ii) the Licensed Product is manufactured in a country
where the method of manufacture is covered by a Valid Claim (together, (i) and
(ii) are referred to as the "Patentability Criteria").
Subject to Section 3.02 below, if neither of the Patentability Criteria
have been satisfied, then Roche shall pay PDL a royalty rate of [
] of the Net Sales in the country of sale for the duration of this
Agreement or until such time as one of the Patentability Criteria is
satisfied, at which time F. Roche shall resume paying PDL royalties at the
rates specified in Section 3.01(a) above.
(c) Expiration. F. Roche's obligation to pay royalties to PDL
hereunder shall expire with respect to sales in any particular country of any
particular Licensed Product on the later of the expiration of all Valid
Claims covering such Licensed Product or the [ ] anniversary of
Initial Commercialization of such Licensed Product in the Territory.
(d) Antibodies in the Field Not Provided or Developed by PDL.
In consideration of the disclosure to F. Roche of PDL Know-How and cell lines
as provided for herein, F. Roche agrees that products incorporating or using
antibodies in the Field which are not provided or developed by PDL shall
nevertheless be presumed to utilize PDL Know-How, with such presumption being
rebuttable by clear and convincing evidence with respect to sales of such
products made in those countries listed on Appendix B, and such presumption
being conclusive as between the parties hereto with respect to sales of such
products made anywhere else within the Territory. Accordingly, F. Roche shall
pay PDL royalties on sales of each such product in the Territory (except for
sales with respect to which the above rebuttable presumption has in fact been
refuted by Roche) for a period of [ ] years from Initial
Commercialization of such product in accordance with the terms of this
Section 3.01, and such sales shall constitute "Net Sales" for purposes hereof.
3.02 De Facto Exclusivity. For purposes of this Article III, the term
"de facto exclusivity" means that F. Roche, together with its Affiliates and
sublicensees, controls at least [ ] of the market for a particular
Licensed Product in a country as measured by unit sales. If neither of the
Patentability Criteria have been satisfied and F. Roche does not enjoy de
facto exclusivity for a particular Licensed Product in a particular country at
any time after [ ] years following Initial Commercialization of such
Licensed Product, then F. Roche shall pay PDL a royalty rate of [ ] of
the Net Sales of such Licensed Product in the country of sale until the [
] anniversary of Initial Commercialization, or until F. Roche shall
acquire de facto exclusivity for that product or until such time as either of
the Patentability Criteria is satisfied (at which time F. Roche shall resume
paying PDL royalties at the rates specified in Sections 3.01(a) or (b) above,
whichever is applicable). Valid Claims and de facto exclusivity are to be
determined on a country-by-country basis.
3.03 Foreign Filing Expenses Credited Against Royalties. F. Roche
shall have the right to credit [ ] of all Foreign Filing Expenses (as
defined in Section 5.02 below) actually paid to PDL against future royalties
due to PDL pursuant to this Article III provided that such credits, when added
to the offset provided for in Section 3.04 below, may not reduce the royalties
to be paid to PDL to less than [ ] of the amount which would
otherwise be due pursuant to Section 3.01 hereof.
3.04 Offset for Third Party Licenses.
(a) If PDL and F. Roche agree in writing that either party must
obtain a license from an independent third party in order for F. Roche to
manufacture, use or sell a Licensed Product in the Territory and if PDL and
F. Roche agree upon the terms of such license ("Third Party License"), then
the parties shall [ ] the cost of that license [ ].
Such cost includes license fees and any other fixed costs associated with the
Third Party License as well as any royalties. The parties then shall, within
thirty (30) days, reimburse each other in the manner necessary to effect a [
] of such license fees and other fixed costs.
(b) PDL's share of the royalties portion of the cost of any
Third Party License, shall be (i) accrued against and deducted from any
royalties due to PDL from F. Roche pursuant to Sections 3.01 and 3.02 if
F. Roche pays the royalties due under the Third Party License to such third
party, and (ii) accrued in favor of and added to any royalties due to PDL from
F. Roche pursuant to Sections 3.01 and 3.02 if PDL pays the royalties due
under the Third Party License to such third party; provided, however, that
this addition or offset shall not cause PDL's royalties to be reduced under
the schedule set forth in Section 3.01 to less than [ ] of Net
Sales in any year, or under Sections 3.01(b) and 3.02 to less than [
] if F. Roche has de facto exclusivity and [ ] if
F. Roche does not have de facto exclusivity, and provided further, that
F. Roche's total royalty obligations to PDL under Sections 3.01 and 3.02 when
added to those royalties payable to third parties pursuant to Third Party
Licenses shall not exceed [ ] of Net Sales in any year.
3.05 Sublicenses. Any Net Sales of an F. Roche sublicensee shall be
treated as Net Sales of F. Roche for purposes of royalty payments hereunder.
If F. Roche shall grant any sublicenses under this Agreement, then F. Roche
shall obtain the written commitment of such sublicensees to abide by all
applicable terms and conditions of this Agreement and F. Roche shall remain
responsible to PDL for the performance of any and all terms by such
sublicensee. All such sublicenses shall terminate on termination of this
Agreement.
3.06 Royalties upon Termination. If this Agreement is terminated
pursuant to Sections 7.02, 7.03 or 7.04 below, F. Roche shall continue to pay
PDL any royalties earned pursuant to this Article III prior to the date of
termination and any royalties earned thereafter as a result of sales under
Section 7.05.
IV. ACCOUNTING AND PAYMENTS
4.01 Semi-Annual Royalty Payments and Reports. F. Roche agrees to make
royalty payments and written reports to PDL following the end of every
calendar half-year covering all sales of Licensed Products by F. Roche, its
Affiliates or sublicensees for which invoices were sent during such half-year
period. F. Roche shall exercise its best efforts to render such reports
within forty-five (45) days after the end of each calendar half-year period,
but in no event shall such reports be rendered by F. Roche later than
sixty (60) days after the end of each calendar half-year period. Each report
shall state:
(a) for Licensed Products disposed of by sale, the quantity,
description, country(ies) of manufacture and sale, Net Sales, GIP and the
deductions pursuant to Section 1.07 by which such GIP is reduced to Net Sales,
(b) for Licensed Products disposed of other than by sale, the
quantity, description, country(ies) of manufacture and disposition, and nature
of the disposition, and
(c) the calculation of royalties due to PDL for such period
pursuant to Section 1.07 and Article III hereof.
The information contained in each such report shall be considered
confidential and PDL agrees not to disclose such information to any third
party except as may be required by law, or to PDL's shareholders during such
time as PDL is a privately-held company pursuant to any contract among PDL and
such shareholders. Each report shall reconcile aggregate annual Net Sales
attributable to F. Roche with aggregate annual worldwide Net Sales
attributable to Roche. Concurrent with the making of each report, F. Roche
shall include payment due PDL of royalties for the period covered by such
report.
It is understood that pursuant to this provision, only one royalty shall
be payable on a given unit of Licensed Product disposed of under this
Agreement. In the case of transfers or sales of any Licensed Product between
Roche, F. Roche or an Affiliate or sublicensee of Roche or F. Roche, only one
royalty payment shall be due, and such royalty shall be payable with respect
to the sale of such Licensed Product to an independent third party not an
Affiliate of the seller.
4.02 Termination Report. F. Roche also agrees to make a written report
to PDL within ninety (90) days after the date on which F. Roche, Roche or
their Affiliates or sublicensees last sell a Licensed Product, stating in such
report the same information called for in each semi-annual report by
Section 4.01 for all Licensed Products and Combination Products made, sold or
otherwise disposed of and upon which were not previously reported to PDL.
4.03 Accounting. F. Roche agrees to keep full, clear and accurate
records for a period of at least three (3) years, or such longer period as may
coincide with F. Roche's internal records retention policy, setting forth the
manufacturing, sales and other disposition of Licensed Products and
Combination Products sold or otherwise disposed of under the license herein
granted in sufficient detail to enable royalties payable to PDL hereunder to
be determined. F. Roche further agrees to permit its books and records to be
examined by an independent accounting firm selected by PDL from time to time
to the extent necessary to verify reports provided for in Sections 4.01 and
4.02 above. Unless PDL obtains the prior written consent of F. Roche, such
accounting firm must be a foreign representative of one of those firms
commonly referred to in the United Sates as the "Big Eight" firms. Such
examination is to be made at the expense of PDL, except in the event that the
results of the audit reveal a discrepancy in favor of F. Roche of 10% or more
over the period being audited, in which case reasonable audit fees for such
examination shall be paid by F. Roche.
4.04 Methods of Payment. All payments due to PDL hereunder shall be
paid in United States dollars by wire transfer to a bank in the United States
designated in writing by PDL. Conversion from Swiss Francs into the
equivalent in United States dollars shall be made at the rate of exchange for
buying funds as quoted and confirmed by the Swiss Bank Corporation in Basle,
Switzerland for the last business day of each calendar half-year.
4.05 Withholding Taxes. If law or regulation requires the withholding
of any taxes due by F. Roche's Affiliates or sublicensees on Net Sales by such
Affiliates or sublicensees in a given country in the Territory, the parties
shall confer regarding possible alternative arrangements to lawfully avoid
such withholding. If, between a country in the Territory and any other place
as designated, a treaty for the avoidance of double taxation is in force and
such treaty reduces or eliminates the withholding of any taxes otherwise due
on royalties payable from such country, PDL may (but shall not be obligated
to) request a direct remittance of royalties to PDL at such place that PDL may
designate hereunder. If the parties are unable to formulate or agree upon
action to lawfully avoid withholding, then the parties agree that fifty
percent (50%) of such taxes shall be applied to reduce the Net Sales amount
for sales of Licensed Products in such country. Notwithstanding the
foregoing, F. Roche shall be solely responsible for any withholding of taxes
due on royalties payable from Japan and the countries listed on Appendix B.
4.06 Currency Transfer Restrictions. If in any country in the
Territory the payment or transfer of royalties on Net Sales in such country is
prohibited by law or regulation, the parties hereto shall confer regarding the
terms and conditions on which Licensed Products shall be sold in such
countries, including the possibility of payment of royalties to PDL in local
currency to a bank account in such country or the re-negotiation of royalty
rates and terms for such sales. However, PDL shall be under no obligation to
accept terms and conditions other than those set forth herein, and if the
parties do not reach an alternative agreement then F. Roche shall either
(a) remain responsible for royalties payable to PDL with respect to Net Sales
in such countries, or (b) cease sales in such countries, which shall not be
deemed a breach by F. Roche of its due diligence obligations under
Section 5.01 below.
V. CERTAIN COVENANTS OF F. ROCHE
5.01 Diligence. F. Roche shall use reasonable diligence in proceeding
with registering, marketing and selling Licensed Products within the Territory
in the event such products are developed as a result of the PDL/Roche
Agreement. Reasonable diligence as used in this Agreement shall mean the same
standard of effort used by F. Roche in registering, marketing and selling its
own protein-based products which must receive Regulatory Approval. The
parties acknowledge that F. Roche does not register, market and sell its own
protein-based products in every country within the Territory, and it is
understood that the exercise by F. Roche of reasonable diligence is to be
determined by judging its efforts in the Territory taken as a whole. If
F. Roche fails to exercise such diligence, PDL may terminate this Agreement
and F. Roche's rights hereunder pursuant to Section 7.04 below.
5.02 Reimbursement for Costs of Patent Applications.
(a) F. Roche agrees to reimburse PDL for all ex parte out-of-
pocket expenses incurred by PDL after the Effective Date hereof in connection
with the prosecution and maintenance in the Territory of patent applications
and patents included within the Sole PDL Patents or Joint Roche-PDL Patents
for which PDL makes filings pursuant to Article IX of the PDL/Roche Agreement
("Foreign Filing Expenses"). F. Roche shall make such payments to PDL no
less frequently than semi-annually, within thirty (30) days after submission
by PDL of a reasonably itemized statement of such expenses incurred
by PDL during the relevant six-month period. Notwithstanding the
foregoing, F. Roche shall not be obligated to reimburse PDL for such expenses
exceeding an aggregate of [ ] in any calendar year.
(b) Prior to the filing of a patent application in the
Territory, PDL shall inform F. Roche concerning such proposed filing and shall
consult with F. Roche concerning the proposed filing procedures, including
specifically the determination of the scope of any such patent and the
countries in which such application is to be filed. PDL shall regularly
advise F. Roche of any substantial action or development in the prosecution of
its patent applications and patents in the Territory, in particular of the
question of scope of, the issuance of, the rejection of, or an opposition to
any respective patent application or patent.
(c) F. Roche shall be entitled to a credit against royalties
payable hereunder as provided in Section 3.03 hereof.
VI. OWNERSHIP OF TECHNOLOGY
6.01 PDL Technology. Ownership of the PDL Know-How and Sole PDL
Patents shall remain vested at all times in PDL. Notwithstanding the
provisions of Section 2.01, PDL expressly reserves under this Agreement
(i) all rights to use the PDL Know-How and Sole PDL Patents to make, have
made, use and sell anywhere in the world all products not within the Field and
(ii) the right to use the PDL Know-How and Sole PDL Patents for PDL's internal
research purposes in the Field.
6.02 Joint Inventions and Joint Roche-PDL Patents. Ownership of Joint
Inventions and Joint Roche-PDL Patents shall be vested jointly in PDL and
Roche. F. Roche shall have the exclusive right to make, have made, use or
sell any Joint Invention or Joint Roche-PDL Patent in the Field within the
Territory during the term of the Agreement. Both parties shall have the non-
exclusive right to make, have made, use or sell any Joint Invention or Joint
Roche-PDL Patent outside the Field during the term of the Agreement, and
neither party shall be obligated to account to the other for such use. Upon
the expiration or termination of the Agreement, both parties shall have the
non-exclusive right to make, have made, use or sell any Joint Invention or
Joint Roche-PDL Patent without restriction and without any obligation to
account to the other party for such use. Notwithstanding the foregoing or the
provisions of Section 2.01, PDL expressly reserves the right to use Joint
Inventions and Joint Roche-PDL Patents for PDL's internal research purposes in
the Field and to carry out its obligations under the PDL/Roche Agreement.
6.03 F. Roche Inventions. PDL hereby acknowledges that this Agreement
does not grant PDL any ownership rights in the F. Roche Inventions.
VII. TERM AND TERMINATION
7.01 Term. Unless earlier terminated pursuant to the terms of this
Article VII, this Agreement shall remain in effect until the later of (a) the
date of expiration of the last to expire of any Valid Claims in any country or
(b) the date of the [ ] anniversary of Initial Commercialization of
the last Licensed Product to be introduced by F. Roche hereunder, at which
time this Agreement shall automatically expire.
7.02 Termination by Mutual Agreement. This Agreement may be terminated
by the written agreement of the parties.
7.03 Termination by F. Roche. F. Roche may terminate this Agreement
upon ninety (90) days written notice to PDL.
7.04 Termination by Default. If either party defaults in the
performance of, or fails to be in compliance with, any material agreement,
condition or covenant of this Agreement, the party not in default may
terminate this Agreement at its option; provided, however, that if such event
of default or non-compliance is the first occurrence of an event giving rise
to the right of termination pursuant to this Section 7.04, the non-defaulting
party may terminate this Agreement only if such default or noncompliance shall
not have been remedied, or steps initiated to remedy the same to the other
party's reasonable satisfaction within sixty (60) days after receipt by the
defaulting party of a written notice thereof from the other party. If PDL
terminates the PDL/Roche Agreement pursuant to Section 11.04 thereof, PDL may
elect to simultaneously terminate this Agreement upon written notice to
F. Roche. If Roche terminates the PDL/Roche Agreement pursuant to
Section 11.04 thereof, F. Roche may elect to simultaneously terminate this
Agreement upon written notice to PDL.
7.05 Inventory. Upon termination of this Agreement, PDL hereby grants
F. Roche a license to sell within one (1) year of such termination any
Licensed Products in F. Roche's or its Affiliates or sublicensee's inventory
on the date of such termination, which have not previously been sold
("Inventory"); provided, however that F. Roche shall pay the royalties due on
such Inventory in the amounts and manner provided for in Articles III and IV.
7.06 Return of Materials. Subject to Section 7.08 hereof concerning
archival copies, upon termination of this Agreement by F. Roche pursuant to
Section 7.03 or by either or both parties pursuant to Sections 7.02 or 7.04,
F. Roche forthwith shall return to PDL all cell lines and their progeny,
antibodies and other biological materials provided by PDL under the PDL/Roche
Agreement.
7.07 Rights and Obligations on Termination or Expiration. Unless
expressly provided to the contrary, the provisions of Sections 3.06 and 5.03
and Articles IV, VIII, IX and XI shall survive the termination of this
Agreement. Upon the expiration of this Agreement pursuant to
Section 7.01 above, if it is not otherwise terminated pursuant to this Article
VII, PDL shall grant to F. Roche a [ ] license to use
the PDL Know-How and Sole PDL Patents and cell lines delivered by
PDL pursuant to the PDL/Roche Agreement, but only to the extent necessary
to make, have made, use and sell Licensed Products in the Field within
the Territory.
7.08 Archival Copies. Section 7.06 notwithstanding, each party shall
be entitled to keep for archival purposes one copy of all written materials
returned to the other party pursuant to Section 7.06.
VIII. CONFIDENTIALITY, DISCLOSURE AND PUBLICATIONS
8.01 Confidentiality. During the term of this Agreement and for a
period of five (5) years following expiration or termination of this
Agreement, each party shall maintain in confidence all information and
materials including, but not limited to, cell lines, their progeny, and
antibodies, disclosed by the other party hereto which such party knows or has
reason to know are or contain trade secrets or other proprietary information
of the other, including, without limitation, information relating to the PDL
Know-How, PDL Patents, Joint Inventions and inventions of the other party, and
the business plans of the other party, including, without limitation,
information provided by either party to the other party hereto prior to the
Effective Date, and shall not use such trade secrets or proprietary
information for any purpose, including, without limitation, for the purpose of
developing products in the Field except as permitted by this Agreement or
disclose the same to anyone other than those of its Affiliates, sublicensees,
employees, consultants, agents or subcontractors as are necessary in
connection with such party's activities as contemplated in this Agreement.
Each party shall be responsible for ensuring compliance with these obligations
by such party's Affiliates, sublicensees, employees, consultants, agents and
subcontractors. Each party shall use a similar effort to that which it uses
to protect its own most valuable trade secrets or proprietary information to
ensure that its Affiliates, sublicensees, employees, consultants, agents and
subcontractors do not disclose or make any unauthorized use of trade secrets
or proprietary information of the other party hereto. Each party shall notify
the other promptly upon discovery of any unauthorized use or disclosure of the
other's trade secrets or proprietary information.
8.02 Exceptions. The obligation of confidentiality contained in this
Agreement shall not apply to the extent that (a) either party (the
"Recipient") is required to disclose information by order or regulation of a
governmental agency or a court of competent jurisdiction or (b) the Recipient
can demonstrate that (i) the disclosed information was at the time of such
disclosure by the Recipient already in the public domain other than as a
result of actions of the Recipient, its Affiliates, employees, licensees,
agents or subcontractors, in violation hereof; (ii) the disclosed information
was rightfully known by the Recipient or its Affiliates (as shown by its
written records) prior to the date of disclosure to the Recipient in
connection with the negotiation, execution or performance of this Agreement;
or (iii) the disclosed information was received by the Recipient or its
Affiliates on an unrestricted basis from a source unrelated to any party to
this Agreement and not under a duty of confidentiality to the other party, or
(c) the Recipient can demonstrate that disclosure to a regulatory authority is
required by its product license approval process.
IX. DISPUTE RESOLUTION
9.01 Arbitration. Any claim, dispute or controversy arising out of or
in connection with or relating to this agreement or the breach or alleged
breach thereof shall be submitted by the parties to arbitration by the
American Arbitration Association in Santa Clara County, California under the
commercial rules then in effect for that Association except as provided
herein. All proceedings shall be held in English and a transcribed record
prepared in English. The parties shall choose, by mutual agreement, one
arbitrator within thirty (30) days of receipt of notice of the intent to
arbitrate. If no arbitrator is appointed within the times herein provided or
any extension of time which is mutually agreed upon, the Association shall
make such appointment within thirty (30) days of such failure. The award
rendered by the arbitrator shall include costs of arbitration, reasonable
attorneys' fees and reasonable costs for expert and other witnesses, and
judgment on such award may be entered in any court having jurisdiction
thereof. The parties shall be entitled to discovery as provided in
Sections 1283.05 and 1283.1 of the Code of Civil Procedure of the State of
California, whether or not the California Arbitration Act is deemed to apply
to said arbitration. Nothing in this Agreement shall be deemed as preventing
either party from seeking injunctive relief (or any other provisional remedy)
from any court having jurisdiction over the parties and the subject matter of
the dispute as necessary to protect either party's name, proprietary
information, trade secrets, know-how or any other proprietary right. If the
issues in dispute involve scientific or technical matters, any arbitrator
chosen hereunder shall have educational training and/or experience sufficient
to demonstrate a reasonable level of knowledge in the field of biotechnology.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
X. FORCE MAJEURE
10.01 If either party shall be delayed, interrupted in or prevented from
the performance of any obligation hereunder by reason of force majeure
including an act of God, fire, flood, earthquake, war (declared or
undeclared), public disaster, strike or labor differences, governmental
enactment, rule or regulation, or any other cause beyond such party's control,
such party shall not be liable to the other therefor; and the time for
performance of such obligation shall be extended for a period equal to the
duration of the contingency which occasioned the delay, interruption or
prevention. The party invoking such force majeure rights of this subparagraph
must notify the other party by registered letter within a period of
fifteen (15) days, from the first and last day of the force majeure unless the
force majeure renders such notification impossible in which case notification
will be made as soon as possible. If the delay resulting from the force
majeure exceeds six (6) months, both parties shall consult together to find an
appropriate solution.
XI. MISCELLANEOUS
11.01 Representations of PDL. PDL represents and warrants to F. Roche
that, except as may otherwise be disclosed in writing to F. Roche:
(a) PDL has the full right and authority to enter into this
Agreement;
(b) to the best knowledge of PDL after reasonable investigation,
no third party has any right, title or interest in the Sole PDL Patents or PDL
Know-How as the result of such third party's former employment of any PDL
employee;
(c) PDL is not aware of any patent or other proprietary rights
of third parties which might be infringed by the Sole PDL Patents or the PDL
Know-How.
11.02 Assignment. This agreement and the licenses herein granted other
than the PDL/Roche Agreement relating to the same Field but for the Roche
Territory shall be binding upon and shall inure to the benefit of, successors
of the parties hereto, or to an assignee of all of the good will and entire
business and assets of a party hereto relating to pharmaceutical and
veterinary products but shall not otherwise be assignable without the prior
written consent of the other party, which consent will not be unreasonably
withheld.
11.03 Entire Agreement. This Agreement and the PDL/Roche Agreement
constitute the entire Agreement between the parties hereto with respect to the
within subject matter and supersede all previous Agreements, whether written
or oral. This Agreement shall not be changed or modified orally, but only by
an instrument in writing signed by both parties.
11.04 Severability. If any provision of this Agreement is declared
invalid by an arbitrator pursuant to Section 9.01 or by a court of last resort
or by any court or other governmental body from the decision of which an
appeal is not taken within the time provided by law, then and in such event,
this Agreement will be deemed to have been terminated only as to the portion
thereof which relates to the provision invalidated by that decision and only
in the relevant jurisdiction, but this Agreement, in all other respects and
all other jurisdictions, will remain in force; provided, however, that if the
provision so invalidated is essential to the Agreement as a whole, then the
parties shall negotiate in good faith to amend the terms hereof as nearly as
practical to carry out the original intent of the parties, and, failing such
amendment, either party may submit the matter to arbitration for resolution
pursuant to Section 9.01.
11.05 Indemnification. F. Roche shall defend, indemnify and hold
harmless PDL, its trustees, officers, agents and employees harmless from any
and all liability, demands, damages, expenses, and losses of any kind,
including those resulting from death, personal injury, illness or property
damage arising (i) out of the manufacture, distribution, use, testing, sale or
other disposition, by F. Roche, an Affiliate of F. Roche, or any distributor,
customer, sublicensee or representative of F. Roche or anyone in privity
therewith, of any Licensed Product, or any cell lines, their progeny, or other
biological materials provided by PDL pursuant to the PDL/Roche Agreement,
method, process, device or apparatus licensed or provided by PDL to F. Roche
hereunder, or (ii) as a result of practicing a Joint Invention, or using PDL
Know-How or PDL Patents licensed to F. Roche under this Agreement, except
where such claim is based on the negligent acts of commission or omission of
PDL.
11.06 Notices. Any notice or report required or permitted to be given
under this Agreement shall be in writing and shall be mailed by certified or
registered mail, or telexed or telecopied and confirmed by mailing, as follows
and shall be effective five (5) days after such mailing:
If to PDL:
Protein Design Labs, Inc.
3181 Porter Drive
Palo Alto, California 94304
Attention: President
Copy to:
Gray Cary Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301-1809
Attn: Marta L. Morando, Esq.
If to F. Roche:
F. Hoffman - La Roche & Co.
Limited Company
Grenzacherstrasse 124
CH-4002 Basle, Switzerland
Attention: Law Department
11.07 Choice of Law. The validity, performance, construction, and
effect of this Agreement shall be governed by the laws of the State of
California, United States of America.
11.08 Publicity. Both parties agree to issue mutual press releases
concerning their entry into this Agreement, with the content of such releases
to be approved in advance by both parties. In all other respects, neither
party shall use the name of the other party in any publicity release without
the prior written permission of such other party, which shall not be
unreasonably withheld. The other party shall have a reasonable opportunity to
review and comment on any such proposed publicity release. Except as required
by law, neither party shall publicly disclose the terms of this agreement or
its terms and conditions unless expressly authorized to do so by the other
party which authorization shall not be unreasonably withheld. In the event
that disclosure shall be agreed upon then the parties will work together to
develop a mutually acceptable disclosure.
11.09 Headings. The captions used herein are inserted for convenience
of reference only and shall not be construed to create obligations, benefits,
or limitations.
11.10 Counterparts. This Agreement may be executed in counterparts, all
of which taken together shall be regarded as one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date.
PROTEIN DESIGN LABS, INC.
By /s/ Laurence Jay Korn
Title: President
Date: 16 March 1989
F. HOFFMANN-LA ROCHE & CO.
LIMITED COMPANY
By /s/ W. Herr. /s/ Pp Lunti
Title: Corporate Licensing Law Department
Date: March 16, 1989
Solely with respect to the granting of rights in Joint Roche-PDL Patents to F.
Roche, Roche hereby joins in this Agreement.
HOFFMANN-LA ROCHE INC.
By /s/ Irwin Lerner
Title: President and CEO
Date: March 16, 1989
APPENDIX A
Sole PDL Patents
T&T
DOCKET
NO. TITLE INVENTORS FILING DATE SERIAL NO. STATUS
11823-1 Closing and Tso and Queen Dec. 15, 1987 132,387 Pending
Expressions of
Phospholipase C
Genes
11823-4 IL-2 Receptor- Queen Apr. 15, 1988 182,682 Pending
Specific
Chimeric Antibodies
11823-5 Chimeric Antibody Queen Sep. 28, 1988 233,037 Pending
Production
11823-7 Cellular Toxic Queen Nov. 23, 1988 275,462 Pending
Conjugates
11823-7-1 Cellular Toxic Queen, Dec. 15, 1988 PCT/US88/ Pending
(Comb. of Conjugates Chovnick, (Canada & PCT 04493
`387 and Schneider and for Japan &
`462) Tso EPO)
11823-7-2 Cellular Toxic Queen, Dec. 28, 1988 290,968 Pending
(Comb. of Conjugates Chovnick,
`387 and Schneider and
`462) Tso
11823-8 Novel IL-2 Queen and Dec. 28, 1988 290,975 Pending
Receptor Specific Selleck
Human
Immunoglobulins
11823-9 Humanized Queen Feb. 13, 1989 310,252 Pending
Antibody
Production
APPENDIX B
EC Countries
Belgium
Denmark (including Iceland)
France
Germany
Greece
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
United Kingdom (Scotland, England, Wales, Northern Ireland, Channel Islands,
Isle of Man)
As soon as it is perceivable that one country of the Territory may join
the EC or withdraw or become excluded from the EC, this APPENDIX B shall be
adapted accordingly.
EXHIBIT 10.11
CONFIDENTIAL TREATMENT REQUESTED
AGREEMENT
This Agreement is made as of the 30th day of November, 1989 by and
between PROTEIN DESIGN LABS, INC. a corporation organized and existing under
the laws of the State of Delaware and having its principal office at 3181
Porter Drive, Palo Alto, California 94304 (hereinafter referred to as "PDL"),
and SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH, a not-for-profit
corporation organized and existing under the laws of the State of New York and
having its principal office at 1275 York Street, New York, New York 10021
(hereinafter referred to as "SKI").
WITNESSETH
WHEREAS, SKI has certain clinical and preclinical data, information and
patent rights relating to the production and use of M195 monoclonal antibody
("M195");
WHEREAS, SKI desired to have M195 monoclonal antibody developed and made
available on reasonable terms for general use in the treatment of human
diseases and for those purposes is willing to grant a license;
WHEREAS, PDL has or has access to the research and development
capability, the manufacturing capacity and the marketing ability needed to
manufacture and sell M195 monoclonal antibody products in the United States
and abroad;
WHEREAS, PDL desires to obtain, and SKI is willing to grant, a license
under the Licensed Patents and Technical Information and Know-How upon the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
For the purposes of this Agreement, the following words and phrases
shall have the following meanings:
1.1 "Affiliate" shall mean
(a) with respect to PDL, any corporation which directly or
indirectly controls, is controlled by or is under common control with
the party in question, control being the ownership of at least 50% of
the outstanding voting stock of such corporation, including directors'
qualifying shares owned beneficially, and having the power to vote for
directors, and
(b) with respect to SKI, Memorial Sloan-Kettering Cancer Center
or Memorial Hospital for Cancer and Allied Diseases (collectively
referred to as "Memorial"), and any present or future corporation or
other entity effectively, at the time in question, under the control of
or under common control with, SKI or Memorial.
1.2 "Combination Product(s)" means any End Product containing both an
agent or ingredient which constitutes a Licensed Product and one or more other
active agents which do not constitute Licensed Products.
1.3 "End Product(s)" means commercially marketable goods incorporating
a Licensed Product which goods are sold in a form for therapeutic use and are
not intended or marketed for further formulation, processing, repackaging or
relabelling prior to such use. End Products shall include any Combination
Product.
1.4 "Field" shall mean the therapeutic treatment of hematologic
malignancies, including but not limited to leukemia and lymphoma; the Field
shall not include diagnostics.
1.5 "Licensed Patents" shall mean United States and foreign patents
and patent applications owned or controlled by SKI or its Affiliates relating
to M195 Antibodies at any time during the term of this Agreement, and the
United States patents and foreign patents issuing from said United States and
foreign patent applications or later-filed foreign application based upon any
of said United States patents and application and any divisions,
continuations, continuations-in-part, reissues or extensions of any of the
foregoing.
1.6 "Licensed Product(s)" shall mean materials (a) that contain DNA or
protein sequences which encode for all or a portion of any M195 Antibody,
provided that any portion must include at a minimum the entire binding domain
(complementarity determining regions) of such M95 Antibody, and (b) which were
derived from hybridoma cell lines provided to PDL by SKI pursuant to this
Agreement; however, Licensed Products shall exclude any murine M195 Antibody
which is radiolabelled. All Licensed Products shall fall into one of two
classes:
Class 1 Products shall consist of one or more of the hybridoma
cell lines provided by SKI hereunder or the monoclonal antibodies
secreted by any such cell line when sold as End Products without any
substantial modification, or if modified by means other than genetic
engineering.
Class 2 Products shall consist of all other Licensed Products
produced by genetic engineering, including, but not limited to, the
following: less than full-length antibody forms such as Fv, Fab, and
F(ab')2; single-chain antibodies; hybrid antibodies; chimeric
immunoglobulins (i.e., proteins constructed with immunoglobulin variable
and constant regions from different antibodies); humanized
immunoglobulins (i.e., an immunoglobulin comprising a substantially
human framework region and one or more CDR's from a nonhuman
immunoglobulin); and immunoglobulin conjugates composed of an
immunoglobulin polypeptide bound to a toxin, label or other compound.
1.7 "M195 Antibody(ies)" shall mean (a) the M195 monoclonal antibody
as described in Tanimoto, M. et al., Leukemia, Vol. 3, No. 5, May 1989, pages
339-348 and (b) any other antibody binding to the CD33 antigen which is
developed, discovered or acquired by Dr. David Scheinberg or personnel under
his supervision while associated with SKI or its Affiliates prior to June 30,
1993 and which PDL elects to have covered by this Agreement pursuant to
Section 3.3 below.
1.8 "Net Sales" shall mean (a) with respect to sales of End Products
by PDL, the gross sales price received for such End Products by PDL, the gross
sales price received for such End Products less the following items to the
extent they are paid or allowed and included in the invoice price:
(i) Usual trade discounts actually allowed:
(ii) Packing costs;
(iii) Import, export, excise, sales taxes, and customs
duties;
(iv) Costs of insurance and transportation from the place
of manufacture to the customer's premises; and
(v) Credit for returns, allowances, or trades;
and, (b) with respect to sales of End Products by a Sublicensee, the gross
sales price received by the Sublicensee in respect of the sales of End
Products, less such amounts for discounts, credits, transportation costs,
taxes and other expenses as may be deductible by the Sublicensee for purposes
of the payments Sublicensee is obligated to make to PDL pursuant to the
written agreement between PDL and the Sublicensee.
In the case of Combination Products for which the agent or ingredient
constituting a Licensed Product and each of the other active agents or
ingredients not constituting Licensed Products have established market prices
when sold separately, Net Sales shall be determined by multiplying the Net
Sales for each such Combination Product by a fraction, the numerator of which
shall be the established market price for the Licensed Product(s) contained in
the Combination Product and the denominator of which shall be the sum of the
established market prices for the Licensed Product(s) plus the other active
agents or ingredients contained in the Combination Product. When such
separate market prices are not established, then the parties shall negotiate
in good faith to determine a fair and equitable method of calculating Net
Sales for the Combinational Product in question.
1.9 "Program" shall mean the collaborative research program generally
described in Articles IV and V hereof and conducted at SKI under the direction
of Dr. David A. Scheinberg (or his successor appointed by SKI with the consent
of PDL which shall not be unreasonably withheld), and at PDL under the
direction of Dr. Laurence J. Korn (or under the direction of such other person
at PDL or a Sublicensee of PDL as Dr. Korn may designate).
1.10 "Sublicensee" shall mean any person who receives a sublicense from
PDL pursuant to Article II hereof.
1.11 "Technical Information and Know-How" shall mean any and all
technical data, information, material (including the cell lines
delivered to PDL hereunder, antibodies, fragments thereof and gene
sequences therefrom, and all other biological materials and samples) and
other know-how which:
(a) relates to M195 Antibodies, including, without limitation,
physical and chemical and biological data and materials (including
antibodies and fragments thereof and gene sequences therefrom),
toxicological and pharmacological data, clinical data, veterinary data,
medical uses, product forms and product formulations, specifications and
techniques;
(b) relates to methods, processes and techniques for the
manufacture or use of Licensed Products including, without limitation,
preparation, recovery and packaging, and sterilization processes and
techniques, dosage regimens, control assays and specifications.
1.12 "Valid Claim" shall mean an unexpired claim in any issued Licensed
Patent which has not been disclaimed or held unenforceable or invalid by a
governmental agency or court by a decision or decree beyond right of review.
ARTICLE II - GRANT
2.1 SKI hereby grants to PDL and its Affiliates an exclusive,
worldwide right and license, with the right to sublicense, (a) to make, use,
and sell Licensed Products for use in the Field under the Licensed Patents,
and (b) to use in the Field the Technical Information and Know-How provided by
SKI or its Affiliates.
2.2 Set forth in Schedule A attached hereto is a list of patents or
patent applications owned or controlled by SKI or its Affiliates comprising
the Licensed Patents. SKI shall update this list annually by delivering to
PDL an amended Schedule A.
ARTICLE III - CERTAIN OBLIGATIONS AND REPRESENTATIONS OF SKI
3.1 Promptly following the execution of this Agreement, if not
previously delivered, SKI shall deliver to PDL a viable hybridoma cell line
producing the M195 monoclonal antibody. SKI shall deliver to PDL such
additional samples of this cell line from time-to-time as may be reasonably
required by PDL to carry out its activities under this Agreement.
3.2 SKI and its Affiliates shall, promptly following the discovery,
development or acquisition of any antibody which would, subject to PDL's
election pursuant to Section 3.3, constitute an M195 Antibody, (a) advise PDL
thereof, (b) disclose to PDL all Technical Information and Know-How relating
thereto, and (c) deliver to PDL a viable hybridoma cell line producing such
M195 Antibody and such additional samples of such cell line from time-to-time
as may be reasonably required by PDL to carry out its activities under this
Agreement.
3.3 At PDL's election made by written notice to SKI, any antibody
which is required to be disclosed to PDL under Section 3.2 shall be deemed to
be an M195 Antibody for all purposes of this Agreement.
3.4 SKI represents and warrants to PDL that SKI is the sole owner of
the Licensed Patents, the Technical Information and Know-How provided to PDL
hereunder, and the cell lines delivered to PDL hereunder; and that SKI has the
full unrestricted legal right to grant the license granted to PDL hereunder
and to disclose to PDL the Technical Information and Know-How required to be
disclosed to PDL hereunder.
3.5 All employees and agents of SKI and its Affiliates who are engaged
in the development of M195 Antibodies or Technical Information and Know-How
are, in accordance with SKI's written policy attached as Schedule B hereto,
under obligation, and shall continue to be under obligation, to assign to SKI
all rights relating to M195 Antibodies or Technical Information and Know-How.
3.6 In the event that SKI or its Affiliates develop or acquire an M195
Antibody which is radiolabelled, SKI shall notify PDL of such fact in writing.
SKI hereby grants to PDL a right of first refusal to obtain rights in the
Field to make, use and sell such radiolabelled M195 Antibody. If at any time
SKI or its Affiliates shall desire to grant rights (by way of license, sale or
otherwise) to any party to make, use or sell such radiolabelled M195 Antibody
(other than rights to use such radiolabelled M195 Antibody solely for research
purposes with no rights to sell or otherwise commercialize a product, or
rights to use such radiolabelled M195 Antibody for diagnostic purposes), SKI
shall give PDL written notice identifying the subject radiolabelled M195
Antibody and specifying all the principal terms and conditions on which SKI or
its Affiliates proposes to grant such rights. PDL may exercise its rights of
first refusal by written notice to SKI within ninety (90) days of receipt of
SKI's notice, in which case the parties shall promptly enter into a written
agreement on such terms and conditions as were specified in SKI's notice and
such corollary terms as may be usual for agreements of that type. In the
event that PDL fails to exercise its right of first refusal, SKI shall be
entitled, for a period of one hundred twenty (120) days after the expiration
of PDL's ninety (90) day period, to grant rights to the radiolabelled M195
Antibody identified in SKI's notice to a third party on the same terms and
conditions as were specified in SKI's notice. Should SKI not consummate a
grant of rights within such 120-day period, no subsequent grant may be made
without first offering the rights to PDL in accordance with the right of first
refusal granted in this Section 3.6
3.7 SKI represents and warrants to PDL that, to its best knowledge and
belief after reasonable investigation, no employee of SKI or its Affiliates
has developed at SKI or its Affiliates or is working at SKI or its Affiliates
on the development of an antibody binding to the CD33 antigen other than Dr.
David Scheinberg or personnel under his supervision.
ARTICLE IV - DEVELOPMENT EFFORTS
4.1 To induce SKI to enter into this Agreement, PDL represents that
during the term of this Agreement it will exercise commercially reasonable
efforts to proceed with the development, manufacture, and sale of End
Products.
4.2 PDL shall exercise commercially reasonable efforts to complete the
following actions ("Milestones") by the following dates:
(a) on or prior to May 31, 1990, clone and sequence the genes
for both the light and heavy chain of M195;
(b) on or prior to November 30, 1990:
(i) construct IgGl and IgG3 chimeric antibodies and do
preliminary tests for binding affinity, complement fixation
("CDC") and antibody-dependent cellular cytotoxicity
("ADCC"),
(ii) complete the computer-aided design of humanized
antibody sequence;
(c) on or prior to May 31, 1990:
(i) construct a humanized antibody and do preliminary
tests for its binding affinity, CDC and ADCC, and
(ii) genetically link the M195 and genes encoding one or
more toxins and perform cytotoxicity testing of the
resulting immunotoxin.
4.3 (a) If PDL fails to achieve any Milestone by the date set forth
above for such Milestone, the period for achieving such Milestone shall
automatically be extended by up to three (3) months (the "First Extension")
upon PDL's providing SKI with written notice of such failure with a reasonably
detailed summary of actions taken by PDL to date and a plan for achieving the
Milestone. If PDL fails to achieve any Milestone by the end of the First
Extension for such Milestone, then, for up to an additional six (6) months or
such lesser period until the Milestone is achieved (the "Second Extension"),
PDL shall provide the services of at least an average of [ ] full-time
scientific personnel (scientists and/or technicians) to work on achieving such
Milestone. Notwithstanding the foregoing, in no event shall the aggregate of
First Extensions and Second Extensions for all Milestones exceed an aggregate
of nine (9) months. With respect to Milestone (c), PDL shall be deemed to
have achieved such Milestone if it achieves either the goal described in
clause (i) or the goal described in clause (ii) of Subsection 2.4(c) above.
(b) If PDL fails to achieve any Milestone by the end of the
Second Extension for such Milestone, then SKI shall have the option to
terminate PDL's rights to proceed to the next Milestone (the "Option") upon
written notice to PDL within thirty (30) days after the expiration of the
Second Extension. If SKI exercises the Option, PDL shall retain only the
rights to commercialize the results of those Milestones which it has achieved,
and all rights to commercialize the results of Milestones not achieved by PDL
shall revert to SKI. Also, if (i) PDL has failed to achieve Milestone (c),
(ii) SKI has exercised its Option, and (iii) PDL decides not to commercialize
the results of Milestone (b), then SKI shall have a further option to
commercialize the chimeric M195 Antibody developed by PDL pursuant to
Milestone (b) by giving written notice to PDL and entering into a royalty
agreement with PDL on terms to be negotiated by the parties in good faith.
4.4 SKI acknowledges that PDL may sublicense or subcontract portions
of the development, testing, manufacture and/or sale of Licensed Products to a
third party which may be a major pharmaceutical company ("Corporate Partner")
and that, as part of such arrangement, the Corporate Partner may require the
right to determine whether or not SKI shall conduct the activities described
in this Section 4.4 and in Article V. PDL agrees, however, to require in its
written agreement with the Corporate Partner that the Corporate Partner must
consent to such activities being conducted by Partner must consent to such
activities being conducted by SKI provided that all of the following
conditions are met: (x) the technical, medical and scientific skills of SKI's
principal investigator conducting such activities shall be acceptable in the
reasonable judgment of the Corporate Partner; (y) SKI shall be able to supply
an adequate number of patients for clinical trials in the reasonable judgment
of the Corporate Partner; and (z) the protocols and procedures to be used or
followed by SKI shall be mutually acceptable to SKI and the Corporate Partner.
If there is no Corporate Partner, the foregoing three conditions must be met
by SKI in PDL's reasonable judgment or, with respect to clause (z), to PDL's
satisfaction. Subject to such conditions being met and the consent of the
Corporate Partner being obtained (if required), PDL shall request that SKI
undertake, and SKI shall undertake, the following action:
(a) promptly after receipt of a chimeric antibody by SKI:
(i) complete the biochemical/immunological testing
thereof:
(ii) upon the mutual agreement of PDL and SKI, and at PDL's
cost, scale up production of such chimeric antibody to
produce such materials for a Phase I trial at Memorial
Hospital for Cancer and Allied Diseases;
(iii) conduct a Phase I trial of such chimeric antibody;
(b) promptly after receipt of the humanized antibody:
(i) complete the biochemical/immunological testing of such
humanized antibody;
(ii) upon the mutual agreement of PDL and SKI, and at PDL's
cost, scale up production of such humanized antibody to
produce such materials for a Phase I trial at Memorial
Hospital for Cancer and Allied Diseases; and
(iii) conduct a Phase I trial of such humanized antibody;
(c) promptly after receipt of the M195 immunotoxin;
(i) complete the biochemical/immunological testing of such
immunotoxin; and
(ii) conduct a Phase I trial of such immunotoxin.
4.5 Notwithstanding the provisions of Section 4.4 above, PDL shall be
obligated to fund, and SKI shall be obligated to perform, only one of the
following three activities described in Section 4.4: Section 4.4(a)(iii);
Section 4.4(b)(iii), and Section 4.4(c)(ii). However, if PDL elects to fund
more than one of such activities, PDL shall request that SKI undertake, and
SKI shall undertake, those additional activities, subject to the conditions of
Section 4.4 above.
ARTICLE V - DIRECT PROGRAM SUPPORT BY PDL
5.1 Subject to the consent of the Corporate Partner in accordance with
Section 4.4, in the event that further clinical tests or trials are required
in the United States in the course of obtaining market approvals for Licensed
Products, and providing that SKI and its Affiliates have the capability of
doing so, then SKI and its Affiliates shall have the right of first refusal to
be the site at which such further tests or trials are performed. SKI agrees
that such tests and trials shall be done at compensation equal to the median
price paid to SKI and its Affiliates for similar tests and trials. In all
cases and regardless of this right of first refusal, PDL and its Corporate
Partner shall have the right to conduct such trials at additional sites.
ARTICLE VI - CONSIDERATION
6.1 For the rights, privileges and license granted hereunder, PDL
shall pay or cause to be paid to SKI:
(a) a non-creditable license fee of [ ] payable in three
installments of [ ], the first installment being due promptly
after the execution of this Agreement, and the second and third
installments being due on the first and second anniversaries,
respectively, of the execution of this Agreement;
(b) payments in the amounts set forth below promptly after
receipt of governmental approval of the marketing of Licensed
Products in the United States, with such amounts being creditable
against royalties due to SKI pursuant to Section 6.1(c) below at
any time hereunder, provided that no individual royalty payment
shall be reduced by more than fifty percent (50%) of the amount
that would otherwise have been due for that quarter:
(i) for the treatment of acute nonlymphocytic leukemia
(ANLL), [ ];
(ii) for the treatment of myelodysplastic syndrome (MDS), [
];
(iii) for the treatment of chronic myelogenous leukemia
(CML), [ ];
(iv) for the treatment prior to bone marrow transplant, [ ];
(c) a royalty of [ ] of the Net Sales of Class 1 End Products
and [ ] of the Net Sales of Class 2 End Products sold by or for
PDL, its Affiliates and Sublicensees where either (i) the End
Product is covered by a Valid Claim in the country of sale, or
(ii) the End Product is manufactured in a country where the method
of manufacture is covered by a Valid Claim; and a royalty of [ ]
of the Net Sales of Class 1 End Products and [ ] of the Net
Sales of Class 2 End Products if the manufacture or sale of End
Products is not covered by a Valid Claim in the country of
manufacture or sale.
Such royalties shall be payable in each country until the expiration in such
country of all Licensed Patents which, except for this Agreement, would be
infringed by the manufacture, use or sale of End Products in such country or,
if there is no such Licensed Patent in such country, for a period of [ ]
years after the first marketing of End Products in such country.
6.2 No multiple royalties shall be payable because End Products, their
manufacture, use or sale, are or shall be covered by more than one patent
application or patent licensed under this Agreement.
6.3 Royalty payments shall be paid in United States dollars in New
York, NY or at such other place as SKI may reasonably designate consistent
with the laws and regulations controlling in any foreign country. Any taxes
which PDL or any Affiliates or Sublicensee shall be required by law to
withhold or pay on remittance of the royalty payments shall be deducted from
royalty paid to SKI. PDL shall furnish SKI the original copies of all
official receipts for such taxes. If any currency conversion shall be
required in connection with the payment of royalties hereunder, such
conversion shall be made by using the exchange rate prevailing at a first-
class foreign exchange bank on the last business day of the calendar quarterly
reporting period to which such royalty payments relate, or, in the case of
sales by Sublicensees, using the exchange rates provided for in the written
agreements between PDL and such Sublicensees.
6.4 In the event and to the extent that any payment due hereunder is
subject to direct taxes levied or assessed by any government authority under
the law of the country from which payment is made and there is a relevant
treaty or other provision for the avoidance of double taxation or for other
relief in respect of tax deducted at the source, PDL shall have the right to
deduct from the payment any such taxes provided that PDL shall for each such
deduction furnish to SKI a certificate or other documentary evidence executed
in the matter required by the relevant government authority to enable SKI to
obtain relief from double taxation or such other relief in respect of the tax
so deducted.
6.5 Notwithstanding the provisions of Section 6.1(c) above, PDL's
obligation to make payments hereunder shall be suspended for any period of
time during which PDL, its Affiliates or Sublicensees are enjoined or
otherwise prohibited from exercising the relevant rights under this license by
the order or judgment of any court or other governmental authority based on
actual or alleged infringement of any patent of a third party.
ARTICLE VII - REPORTS AND RECORDS
7.1 PDL shall keep full, true and accurate accounts containing all
particulars that may be necessary for the purpose of showing the amount
payable to SKI. Said books of account shall be kept at PDL's principal place
of business. Said books and the supporting data shall be open for three (3)
years following the end of the calendar year to which they pertain, to the
inspection of an independent certified public accountant retained and paid by
SKI for the purpose of verifying PDL's royalty statement, but not more
frequently than once per year.
7.2 PDL agrees to make written reports and royalty payments to SKI
within sixty (60) days after the close of each calendar quarter during the
term of this Agreement, beginning with the quarter in which the first Net
Sales occur. These reports shall show for the calendar quarter in question
PDL's Net Sales on sales by it of the End Products on a country-by-country
basis, details of the quantities of End Products sold in each country and the
country of manufacture if different, and the royalty due to SKI thereon
pursuant to Section 6.1(c) above, together with the same information for End
Products sold by Sublicensees pursuant to Article II above. Notwithstanding
the foregoing, with respect to sales of End Products by Sublicensees, PDL's
reports hereunder shall be required to include only information regarding Net
Sales of Sublicensees reflected in the reports required by Section 7.3 below
which are received by PDL during the calendar quarter in question.
Concurrently with the making of each such report, PDL shall make any payment
due to SKI of royalties for the period covered by such report.
7.3 In order to facilitate the reporting and payment of royalties by
PDL on Net Sales of End Products made by Sublicensees, PDL agrees to require,
as a term of any sublicense agreement that the other party to such agreement
shall render written reports to PDL of Net Sales of End Products by such party
no less frequently than twice per year and in sufficient detail to enable the
royalties payable by PDL hereunder to be determined ("Third Party Reports").
PDL shall also require such parties to keep records concerning such Net Sales
for a period of at least three (3) years, and to permit reasonable examination
of such records by PDL or an independent accounting firm reasonably
satisfactory to PDL.
7.4 SKI agrees that the information set forth in (a) PDL's reports
required by Sections 7.2, (b) PDL's records subject to examination under
Section 7.1, and (c) all Third Party Reports shall be maintained in confidence
by SKI and the independent accounting firm selected by SKI pursuant to
Section 7.1, shall not be used by SKI or such accounting firm for any purpose
other than verification of the performance by PDL of its obligations
hereunder, and shall not be disclosed by SKI or such accounting firm to any
other person.
ARTICLE VIII - TECHNICAL KNOW-HOW
8.1 Promptly after the execution of this Agreement, and during the
first five (5) years of the term of this Agreement, SKI shall disclose and
furnish to PDL all Technical Information and Know-How which is requested by
PDL and which is known or possessed by SKI or any of its Affiliates; provided,
however, that SKI shall not be obligated to disclose any such information
after the execution of this Agreement from a third party pursuant to a written
agreement which prohibits the disclosure thereof.
8.2 During the first five (5) years of the term of this Agreement,
subject to any restrictions imposed upon PDL by a Corporate Partner, PDL shall
disclose and furnish to SKI (for use in its research programs only) Technical
Information and Know-How relevant to the clinical use of the Product which is
requested by SKI and which is known or possessed by PDL or any of its
Affiliates; provided, however, that PDL shall not be obligated to disclose any
such information acquired after the execution of this Agreement from a third
party pursuant to a written agreement which prohibits the disclosure thereof.
8.3 Each of the parties, for itself and its Affiliates, undertakes
during the term of this Agreement, to hold in confidence and not to disclose
the Technical Information and Know-How received from the other (a) in the case
of PDL, to any third party, and (b) in the case of SKI, to any person other
than Dr. David Scheinberg or personnel under his supervision and then such
disclosure may be made only while such persons are associated with SKI or its
Affiliates; provided that such undertaking shall not apply to any portion of
said Technical Information and Know-How which:
(i) was known to the receiving party or any of its
Affiliates prior to its receipt by the receiving party or
any of its Affiliates hereunder;
(ii) is received at any time by the receiving party or any
of its Affiliates in good faith from a third party lawfully
in possession of the same and having the right to disclose
the same;
(iii) is as of the date of the receipt by the receiving
party or any of its Affiliates in the public domain or
subsequently enters the public domain other than by reason
of acts or omissions of the employees or agents of the
receiving party or any of its Affiliates;
and provided further that nothing contained herein shall prevent PDL or any of
its Affiliates from using and disclosing the Technical Information and Know-
How received from SKI in connection with applying for and securing
governmental authorizations for the marketing of Licensed Products, in
connection with negotiations or discussions with a Corporate Partner provided
that such disclosure takes place pursuant to a confidentiality agreement
limiting use of the Technical Information and Know-How to evaluation of this
license or operation pursuant to a subsequent sublicense agreement, or
otherwise in the performance of their obligations under this Agreement.
8.4 Prior to public disclosure or submission for publication of a
manuscript describing the results of any aspect of the Technical Information
and Know-How, the party disclosing or submitting such a manuscript
("Disclosing Party") shall send the other party ("Responding Party") by
express air-mail a copy of the manuscript to be submitted and shall allow the
Responding Party a reasonable time period (not to exceed sixty (60) days from
the date of mailing) in which to determine whether the manuscript contains
subject matter of which patent protection should be sought (prior to
publication of such manuscript) for the purpose of protecting an invention
conceived or developed in connection with the parties' scientific
collaboration hereunder, or whether the manuscript contains confidential
information belonging to the Responding Party. After the expiration of sixty
(60) days from the date of mailing such manuscript, the Disclosing Party shall
be free to submit such manuscript for publication and publish or otherwise
disclose to the public such research results. Should the Responding Party
believe the subject matter of the manuscript contains confidential information
or a patentable invention of substantial commercial value to the Responding
Party, then prior to the expiration of sixty (60) days from the date of
mailing of such manuscript to it by the Disclosing Party, Responding Party
shall notify the Disclosing Party in writing of its determination that such
manuscript contains such information or subject matter for which patent
protection should be sought. Upon receipt of such written notice from the
Responding Party, the Disclosing Party shall delay public disclosure of such
information or submission of the manuscript for an additional period of sixty
(60) days to permit preparation and filing of a patent application on the
disclosed subject matter. The Disclosing Party shall thereafter be free to
publish or disclose such information, except that the Disclosing Party may not
disclose any confidential information of the Responding Party in violation of
Section 8.3 hereof. Each Party agrees to give the other party reasonable
opportunity to review and comment on any proposed publication arising from the
Program. Determination of authorship for any paper or patent shall be in
accordance with accepted scientific practice. Should any questions on
authorship arise, this will be determined by good faith consultation between
the parties.
ARTICLE IX - PATENT MATTERS
9.1 SKI shall seek prompt issuance of, and maintain, at its expense
(for reimbursement pursuant to Paragraph 9.3 below), the Licensed Patents.
SKI shall keep PDL informed of, and shall provide to PDL copies of, all
applications and correspondence from or on behalf of SKI and its Affiliates to
governmental patent offices, and all correspondence and documents received
from governmental patent offices. SKI shall provide PDL with reports no less
frequently than once per year listing all patents and patent applications
which comprise the Licensed Patents identifying them by country and patent or
application number, and briefly describing the status thereof, Prior to
filing or amending any patent application which constitutes the Licensed
Patents, SKI shall submit such application to PDL for its review and
consultation.
9.2 If SKI shall decide to discontinue any such prosecution, or shall
decide not to maintain any patent, or not to file a patent application on an
invention under the Licensed Patents, or not file a patent application on an
invention under the Licensed Patents, or not to file same in a particular
country, it shall promptly notify PDL in writing and in reasonably sufficient
time for PDL to assume such prosecution or maintenance, or file such patent
application, and shall take the necessary steps and execute the necessary
documents to permit PDL to assume the filing, prosecution or maintenance of
the same at PDL's expense and control. All amounts paid by PDL shall be fully
creditable as specified in Section 6.1(b) against royalties payable by PDL
under Section 6.1(c).
9.3 PDL shall reimburse SKI on a quarterly basis for one-half (1/2) of all
documented out-of-pocket expenses incurred by SKI after the execution of this
Agreement in connection with
the filing, prosecution and maintenance of all Licensed Patents in countries
agreed to by PDL. All amounts paid by PDL shall be fully creditable as
specified in Section 6.1(b) against royalties payable by PDL under
Section 6.1(c).
9.4 [ ]
9.5 PDL shall have a right of first refusal to obtain an exclusive
license under any inventions or discoveries for therapeutic agents outside the
Field, whether patentable or not, which are made by employees or agents of SKI
or its Affiliates in the course of their activities under the Program.
9.6 (a) In the event of a joint invention or discovery in the Field
made by one or more employees of both PDL and SKI or their respective
Affiliates in the course of their activities under the Program, whether
patentable or not, PDL shall have sole and exclusive rights to such invention
or discovery, without any obligation to pay royalties or other consideration.
SKI and its Affiliates shall cooperate in promptly taking all such actions and
executing all such documents as may be reasonably necessary to vest in PDL
exclusive ownership and rights to such invention or discovery.
(b) In the event of a joint invention or discovery outside the
Field made by one or more employees of both PDL and SKI or their respective
Affiliates in the course of their activities under the Program, whether
patentable or not, PDL and SKI shall each have non-exclusive rights to such
invention or discovery without any obligation to account to the other for use
thereof. PDL and SKI shall consult together and cooperate in taking
reasonable steps to protect such invention or discovery by patent or
otherwise, with all costs to be shared equally. PDL shall have a right of
first refusal to obtain sole and exclusive rights to any such invention or
discovery by acquiring SKI's rights therein.
9.7 If PDL becomes aware of a suspected infringement of the Licensed
Patents, it shall notify SKI in reasonable detail. If the alleged
infringement consists of any act which, if done by PDL, would be within the
scope of the license granted under this Agreement, SKI and PDL shall (within a
reasonable tune of said notification) consult together with a view to agreeing
upon a course of action to be pursued, which action shall be taken by SKI at
SKI's sole expense. In addition, if any such infringement is resulting in
sales of competing products by parties other than PDL and its Affiliates and
Sublicensees exceeding [ ] of the sales of PDL, its Affiliates and
Sublicensees for a period of six (6) months or more, then, in addition to
PDL's rights under Section 10.4, PDL shall be entitled to reduce the royalty
rates otherwise payable hereunder to the lower of the two rates provided for
the relevant class of product as set forth in Section 6.1(c) until SKI has
taken steps reasonably acceptable to PDL to prevent such unlicensed
competition. Further, in such event, PDL shall be entitled to institute
actions or proceedings as appropriate to prevent such infringement and PDL may
retain any damages or other sums received by PDL in connection with such
actions or proceedings.
9.8 SKI represents and warrants that, except as disclosed on
Schedule B, neither SKI nor any of its Affiliates is aware of any patent or
other proprietary right of any third party which is or will be infringed by
the Licensed Patents or the Technical Information and Know-How being provided
by SKI hereunder, or by any acts contemplated by this Agreement. SKI and its
Affiliates will inform PDL of any such potential infringement promptly upon
becoming aware of such potential infringement.
9.9 [ ]
ARTICLE X - TERM AND TERMINATION
10.1 This Agreement shall be effective as of the date first written
above and shall continue in effect until the expiration of the last to expire
of the Licensed Patents or until all royalty obligations arising hereunder
have terminated, whichever shall last occur.
10.2 Should PDL fail in its payment to SKI of royalties due in
accordance with the terms of this Agreement, SKI shall have the right to serve
notice upon PDL by certified mail at the address designated in Article XV
hereof, of its intention to terminate this Agreement within thirty (30) days
after receipt of said notice of termination unless PDL shall pay or cause to
be paid to SKI within the thirty (30) day period, all such royalties due and
payable. Upon the expiration of the thirty (30) day period, if PDL shall not
have paid or cause to be paid all such royalties due and payable, the rights,
privileges and license granted hereunder shall thereupon immediately
terminate.
10.3 Upon any material breach or default of this Agreement by PDL,
other than those occurrences set out in Paragraph 10.2 above which shall
always take precedence in that order over any material breach or default
referred to in this Paragraph 10.3, SKI shall have the right to terminate this
Agreement and the rights, privileges and license granted hereunder by ninety
(90) days' notice including a detailed explanation of the reasons for
termination, by certified mail to PDL. Such termination shall become
effective unless PDL shall have cured or caused to be cured any such breach or
default prior to the expiration of the ninety (90) day period from receipt of
SKI's notice of termination.
10.4 PDL may terminate this Agreement by giving SKI ninety (90) days'
notice to that effect if (a) PDL considers that substantial unlicensed
competition is seriously interfering with PDL's exploitation of the Licensed
Patents under this Agreement and that SKI is not taking appropriate steps to
seek to prevent such unlicensed competition, or (b) PDL determines to cease
utilizing all license rights granted hereunder, or (c) SKI or any of its
Affiliates commits any material breach or default of this Agreement which has
not been cured within ninety (90) days' notice from PDL to SKI.
10.5 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination. PDL and its Affiliates and
Sublicensees may, however, after the effective date of such termination, sell
all Licensed Products, and complete Licensed Products in the process of
manufacture at the time of such termination and sell the same, provided that
PDL shall pay to SKI the royalties thereon as required by Article VI of the
Agreement and shall submit the reports required by Article VII hereof on the
sale of Licensed Products. In addition, the obligations of confidentiality
and indemnity set forth in Sections 7.4, 8.3, 12.1 and 12.2 shall survive the
termination or expiration of this Agreement.
ARTICLE XI - ARBITRATION
11.1 Except as to issues relating to the validity, construction or
effect of any patent licensed hereunder, any and all claims, disputes or
controversies arising under, out of, or in connection with this Agreement,
which have not been resolved by good faith negotiations between the parties,
shall be resolved by final and binding arbitration under the rules of the
American Arbitration Association. Arbitration shall take place in the State
and County of the principal office of the party not initiating such
arbitration. The arbitrators shall have no power to add to, subtract from or
modify any of the terms or conditions of this Agreement. The award rendered
by the arbitrator shall include costs of arbitration, reasonable attorneys'
fees and reasonable costs for expert and other witnesses, and judgment on such
award may be entered in any court having jurisdiction thereof. The parties
shall be entitled to discovery as provided in Sections 1283.05 and 1283.1 of
the Code of Civil Procedure of the State of California, whether or not the
California Arbitration Act is deemed to apply to said arbitration. Nothing in
this Agreement is deemed as preventing either party from seeking injunctive
relief (or any other provisional remedy) from any court having jurisdiction
over the parties and the subject matter of the dispute as necessary to protect
either party's name, proprietary information, trade secrets, know-how or any
other proprietary right. If the issues in dispute involve scientific or
technical matters, any arbitrator chosen hereunder shall have educational
training and/or experience sufficient to demonstrate a reasonable level of
knowledge in the field of biotechnology. Any award rendered in such
arbitration may be enforced by any of the parties in a court of competent
jurisdiction.
11.2 Claims, disputes or controversies concerning the validity,
construction or effect of any patent licensed hereunder shall be resolved in
any court having jurisdiction thereof.
ARTICLE XII - PRODUCT LIABILITY
12.1 PDL shall at all times, during the term of this Agreement and
thereafter, indemnify and hold SKI and its Affiliates and their directors,
officers, agents and employees, 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 resulting from the actions of PDL and its Affiliates and
Sublicensees hereunder in the production, manufacture, sales, use, consumption
or advertisement of Licensed Products, subject to SKI giving to PDL prompt
notice of any such claim, giving to PDL full control of the defense or
settlement of any such claim, and giving to PDL such reasonable assistance as
PDL may request in the defense of such claim; provided, however, that the
foregoing indemnity obligation shall not apply (i) where such claim,
proceeding, demand, expense or liability is the result of negligence on behalf
of SKI or its Affiliates, or its or their staff or agents, (ii) where such
claim, proceeding, demand, expense or liability is the result of a failure by
SKI or its Affiliates, or its or their staff or agents, to comply with any
applicable FDA or other governmental requirement or to adhere to the terms of
the protocols agreed to under Section 4.4(z), or (iii) where the activities of
SKI or its Affiliates are not pursuant to, and in accordance with, an
investigational new drug (IND) application approved by the FDA.
12.2 Except as may be provided otherwise in any clinical trial
agreement subsequently executed by the parties hereto, SKI and its Affiliates
shall at all times, during the term of this Agreement and thereafter,
indemnify and hold PDL and its Affiliates and Sublicensees and their
directors, officers, agents and employees, 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 resulting from the actions of SKI and its
Affiliates or its or their staff or agents in connection with their activities
under the Program, subject to PDL giving to SKI prompt notice of any such
claim, giving to SKI full control of the defense or settlement of any such
claim, and giving to SKI such reasonable assistance as SKI may request in the
defense of such claim.
ARTICLE XIII - ASSIGNMENT
PDL shall be entitled to assign its rights hereunder, without the
written consent of SKI, in whole or in part, to (i) a successor of PDL's
business, whether by merger, purchase or otherwise, or (ii) any Affiliate or
Affiliates (which may be substituted directly hereunder for PDL) provided that
such Affiliate has the technical competence and capability to discharge the
obligations of PDL hereunder. At PDL's request, SKI shall enter into a
separate counterpart agreement with any such assignee, it being expressly
agreed that PDL shall remain bound by the obligations hereof. Such
counterpart agreement shall be the same in form and substance except for
necessary changes to reflect the extent of the assignment.
Neither party may otherwise assign this Agreement or any rights granted
hereunder in whole or in part without prior written consent of the other
party, which consent shall not be unreasonably withheld.
ARTICLE XIV - NON-USE OF NAMES
PDL shall not use the names of Sloan-Kettering Institute for Cancer
Research nor of the Memorial Sloan-Kettering Cancer Center, nor of the
Memorial Hospital For Cancer and Allied Diseases nor any adaptation thereof in
any advertising, promotional or sales literature for the Licensed Products
without prior written consent obtained from SKI in each case, which consent
shall not be unreasonably withheld.
ARTICLE XV - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
Any payment, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to such
party by certified first class mail, postage prepaid, addressed to it at its
address below or as it shall designate by written notice given to the other
party:
In the case of SKI:
Sloan-Kettering Institute for Cancer Research
1275 York Avenue
New York, NY 10021
Attention: Mr. James Quirk, Senior Vice President
In the case of PDL:
Protein Design Labs, Inc.
3181 Porter Drive
Palo Alto, California 94304
Attention: Laurence Jay Korn, Ph.D., President
with a copy to:
Marta L. Morando
Ware and Freidenrich
400 Hamilton Avenue
Palo Alto, California 94301
ARTICLE XVI - MISCELLANEOUS PROVISIONS
16.1 This Agreement shall be construed, governed, interpreted and
applied in accordance with the laws of the State of California, USA except
that questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.
16.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except
by the execution of a written instrument subscribed to by the parties hereto.
16.3 The provisions of this Agreement are severable, and in the event
that any provision of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of law, such invalidity or
unenforceability shall not in any way effect the validity or enforceability of
the remaining provisions hereof.
16.4 The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
16.5 Neither party shall, without the consent of the other, originate
any publicity, news release, or other public announcement, written or oral,
whether to the public press, to stockholders, or otherwise, relating to the
execution of this Agreement or any amendment hereto, save only such
announcement or disclosure as in the opinion of legal counsel to the party
making such announcement is required by law to be made. The party making such
announcement will give the other party an opportunity to review the form of
the announcement before it is made.
IN WITNESS WHEREOF, the parties hereto have caused this License
Agreement to be executed by their duly authorized representatives as of the
day and year first set forth above.
SLOAN-KETTERING INSTITUTE FOR CANCER
RESEARCH
By:/s/ James S. Quirk
James S. Quirk
Senior Vice President
PROTEIN DESIGN LABS, INC.
By:/s/ Laurence J. Korn
Laurence Jay Korn, Ph.D.
President
SCHEDULE A
(Revised November ___, 1989)
Docket Patent Filing Patent Issue
No. Country Appln. No. Date Number Date
None
SCHEDULE B
(SKI's written policy per 3.5]
EXHIBIT 10.13
CONFIDENTIAL TREATMENT REQUESTED
AGREEMENT
Effective as of July 1, 1990, THE BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY, a body having corporate powers under the laws of
the State of California ("STANFORD"), and PROTEIN DESIGN LABS, INC., a
Delaware company, having a principal place of business at 2375 Garcia Avenue,
Mountain View, California 94043 ("PDL"), agree as follows.
1. BACKGROUND
1.1 STANFORD has the exclusive assignment to an invention entitled,
"Method and Dosage Form Using an Antagonist to Gamma Interferon to Control
MHC-Associated Autoimmune Disease" ("Invention[s]"), as described in Stanford
Docket S87-029 and to any Licensed Patent(s), as hereinafter defined, which
may issue to such Invention(s).
1.2 STANFORD desires to have the Invention(s) perfected and marketed
at the earliest possible time in order that products resulting therefrom may
be available for public use and benefit.
1.3 PDL desires to acquire an exclusive, worldwide license under said
Invention(s) and Licensed Patent(s), for the purpose of undertaking
development, to manufacture, use, and sell Licensed Product(s).
1.4 The Invention(s) was made in the course of research supported by
the National Institutes of Health ("NIH").
2. DEFINITIONS
2.1 "Licensed Patent(s)" means any Letters Patent issued upon
STANFORD's U.S. Patent Application, Serial Number 087,015, filed August 18,
1987, including the information contained in such application, with respect to
the Invention(s), any foreign patents corresponding thereto, and/or any
divisions, continuations, continuations-in-part, or reissue thereof. The
table of currently pending patent applications is shown as Exhibit I.
2.2 "Licensed Product(s)" means any product or part thereof, the
manufacture, use, or sale of which is covered by a valid claim of an issued,
unexpired Licensed Patent(s) directed to the Invention(s). A claim of an
issued, unexpired Licensed Patent(s) shall be presumed to be valid unless and
until it has been disclaimed in writing by STANFORD or held to be invalid or
not infringed by a final judgment of a court of competent jurisdiction from
which no appeal can be or is taken.
2.3 "Net Sales" means the gross selling price of the Licensed
Product(s) in the form in which it is sold or used, less the following items
but only insofar as they actually pertain to the disposition of such Licensed
Product(s) by PDL or sublicensee(s) and are included in such gross selling
price, and (except Item [d]) are separately billed:
(a) Import, export, excise, value-added, and sales taxes, plus
custom duties;
(b) Costs of insurance, packing, and transportation from the
place of manufacture to the customer's premises or point of installation;
(c) Costs of installation at the place of use; and
(d) Credit for returns, allowances, or trades.
In the case of PDL's sublicensee(s), "Net Sales" may be defined as said
sublicensee(s) normally calculate and define "Net Sales" so long as it is
substantially similar to the above definition.
2.4 "Exclusive" means STANFORD shall not grant further licenses,
subject to Article 4. STANFORD has not granted any licenses except for the
license to the U.S. Government herein attached (Exhibit 2).
2.5 "Combination Product(s)" means Licensed Product(s) sold in a
combination package or kit containing other active products, such as
antibodies, antigens, and enzymes. Net Sales, for purposes of determining
royalty payments on the combination package, shall be calculated using one of
the following methods on a country-by-country basis:
(a) By multiplying the net selling price of that combination
package by the fraction A/A+B; where A is the gross selling price, during the
royalty paying period in question, of the Licensed Product(s) sold separately,
and B is the gross selling price, during the royalty period in question, of
the other active products sold separately; or
(b) If no such separate sales are made of the Licensed
Product(s) or any of the active products in such combination package during
the royalty paying period in question, Net Sales will be negotiated in good
faith.
2.6 "PDL" means PDL and Affiliates. An Affiliate means any
corporation or other business entity controlled by, controlling, or under
common control with PDL. For this purpose, "control" means direct or indirect
beneficial ownership of at least fifty percent (50%) of the voting stock, or
at least fifty percent (50%) interest in the income of such corporation or
other business.
2.7 "First Commercial Sale" means first sale of a non-orphan drug (as
currently defined under U.S. law) Licensed Product(s) following FDA approval
of such Licensed Product(s).
3. GRANT
3.1 STANFORD hereby grants and PDL hereby accepts a worldwide license,
which includes the right to sublicense, to make, have made, use, and sell
Licensed Product(s).
3.2 Said license shall be Exclusive for a term commencing as of July
1, 1990, and ending [ ] years from the date of First Commercial Sale of a
Licensed Product(s) by PDL or its sublicensee(s); PDL agrees to promptly
inform STANFORD in writing of the date of First Commercial Sale.
3.3 Upon request by PDL, STANFORD agrees to extend the period of
exclusivity if, in STANFORD's judgment, such extension is justifiable, taking
into consideration PDL's development costs and return on its investment.
3.4 After the Exclusive period, the license shall be nonexclusive
until expiration of the last to expire of Licensed Patent(s).
3.5 STANFORD retains the right to practice the Invention(s) for its
internal research purposes but will not commercialize the Invention(s).
4. GOVERNMENT RIGHTS
This Agreement is subject to all of the terms and conditions of Public
Law 96-517 as amended to date, and PDL agrees to take all action reasonably
necessary on its part as Licensee to enable STANFORD to satisfy its obligation
thereunder with NIH, relating to any Invention(s). PDL is not obligated to
disclose confidential information under this Article 4.
5. ROYALTIES
5.1 PDL agrees to pay to STANFORD a creditable, non-refundable license
issue royalty fee of [ ] upon signing the Agreement.
5.2 PDL also shall pay a [ ] annual advance on earned royalties
according to the following schedule:
(a) [ ] on July 1, 1991, if no Licensed Patent(s) has issued;
(b) [ ] on July 1, 1992, if no Licensed Patent(s) has issued;
and
(c) [ ] on each July 1 after a Licensed Patent(s) has issued
with a claim covering at least one (1) major autoimmune disease for as long as
this license shall be Exclusive. During the nonexclusive period, if any, PDL
will not be required to pay minimum annual advances.
All advance royalty payments are nonrefundable but they are creditable
against earned royalties to the extent provided in Paragraph 5.4.
5.3 In addition, PDL shall pay STANFORD earned royalties
(a) [ ] on Net Sales by PDL and its sublicensee(s) of Licensed
Product(s) during the period that the license to PDL is Exclusive; and
(b) [ ] of Net Sales during the period the license to PDL is
nonexclusive.
If PDL is required to obtain additional licenses not covered by this
Agreement in order to develop, manufacture, sell, or market Licensed
Product(s), PDL may reduce its earned royalty payments to STANFORD by an
amount equal to the sum of royalties under additional license(s) provided that
the royalty paid to STANFORD will not be less than [ ] of the rates
specified above.
5.4 Creditable payments under this Agreement shall be credited to PDL
against up to [ ] of each earned royalty payment which PDL would be
required to pay pursuant to Paragraph 5.3 until the entire credit is
exhausted.
5.5 The royalty on sales in currencies other than U.S. Dollars shall
be calculated using the appropriate foreign exchange rate for such currency
quoted by the Bank of America (San Francisco) foreign exchange desk, on the
close of business on the last banking day of each calendar quarter. Royalty
and payments to STANFORD shall be in U.S. Dollars an shall be net of all non-
U.S. taxes. In the case of PDL's sublicensee(s), the currency conversion
exchange rate may be computed as sublicensee(s) normally computes such
transactions.
6. REPORTS, PAYMENTS AND ACCOUNTING
6.1 Quarterly Royalty Payment and Report. PDL shall make written
reports and royalty payments to STANFORD within ninety (90) days after the end
of each calendar quarter following the First Commercial Sale. This report
shall state the number, description, and aggregate Net Sales of Licensed
Product(s) during such completed calendar quarter, and resulting calculation
pursuant to Paragraph 5.3 of earned royalty payment due STANFORD for such
completed calendar quarter. Concurrent with the making of each such report,
PDL shall include payment due STANFORD of royalties for the calendar quarter
covered by such report. In the case of sublicensee(s), PDL shall report
sublicensee sales within thirty (30) days of receipt by PDL of sublicensee
reports and pay STANFORD in the next applicable quarter.
6.2 Accounting. PDL agrees to keep records for a period of two (2)
years showing the manufacturing, sales, use, and other disposition of products
sold or otherwise disposed of under the license herein granted in sufficient
detail to enable the royalties payable hereunder by PDL to be determined, and
further agrees to permit its books and records to be examined by an
independent Certified Public Accountant satisfactory to PDL nominated by
STANFORD from time to time, but not more than once a calendar year, to the
extent necessary to verify reports provided for in Paragraph 6.1. Such
examination is to be made at the expense of STANFORD, and all information
shall be treated confidentially by STANFORD.
6.3 Progress Report. On or before September 1, starting with
September 1, 1991, of each year until PDL markets a Licensed Product(s), PDL
shall make a written report to STANFORD covering the preceding year regarding
the progress of PDL toward commercial use of Licensed Product(s). STANFORD
will use all reasonable efforts to keep any progress report, if clearly marked
"Confidential" confidential. Such report shall include, as a minimum,
information sufficient to enable STANFORD to satisfy reporting requirements of
the U.S. Government and for STANFORD to ascertain progress by PDL toward
meeting the diligence requirements of Paragraph 12.1. If PDL does not submit
the required reports, or if PDL has not demonstrated diligence as required by
Paragraph 12.1, STANFORD may terminate upon failure of PDL to cure the defect
within thirty (30) days after receipt of written notice from STANFORD.
6.4 PDL will reimburse STANFORD for any reasonable costs incurred by
STANFORD after July 1, 1990, in connection with the filing, prosecution of
patent applications, and maintenance of Licensed Patent(s), and these expenses
shall be paid within thirty (30) days of receipt of invoice of such costs.
With respect to foreign prosecution, STANFORD and PDL will agree on the
countries in which to pursue patent protection. STANFORD will employ
mutually agreeable patent counsel and keep PDL informed of patent prosecution.
7. NEGATION OF WARRANTIES
7.1 STANFORD warrants that STANFORD has an exclusive assignment to
Licensed Patent(s) and that STANFORD has the right to grant licenses under
Public Law 96-517 as amended.
7.2 Except for Paragraph 7.1, nothing in this Agreement is or shall be
construed as:
(a) A warranty or representation by STANFORD as to the validity
or scope of any Licensed Patent(s);
(b) A warranty or representation that anything made, used, sold,
or otherwise disposed of under any license granted in this Agreement is or
will be free from infringement of patents, copyrights, trademarks, or other
rights of third parties.
(c) An obligation to bring or prosecute actions or suits against
third parties for infringement, except to the extent and in the circumstances
described in Article 11, or
(d) Granting by implication, estoppel, or otherwise any licenses
under patents of STANFORD or other persons other than Licensed Patent(s),
regardless of whether such patents are dominant or subordinate to any Licensed
Patent(s). STANFORD is aware of the following issued patents and pending
applications which may or may not be infringed by PDL in practicing the claims
of the Invention(s).
(i) U.S. Patent No. 4,237,224 issued December 2, 1980,
U.S. Patent No. 4,468,464 issued August 28, 1984, and U.S. Patent No.
4,740,470 issued April 26, 1988 (Cohen-Boyer patents). PDL agrees that
nothing in this Agreement grants PDL any express or implied license or
right under or to the above Cohen-Boyer patents;
(ii) U.K. Patent Application No. 8607679 filed 27.03.86
(Winter patent);
(iii) U.S. Patent No. 4,816,397 issued March 28, 1989
(Celltech patent);
(iv) U.S. Patent No. 4,816,567 issued March 28, 1989
(Genentech patent); and
(v) U.S. Patent Application 644,473 filed August 27, 1984,
and all continuations, divisionals or continuations-in-part, and foreign
counterparts (STANFORD/ Columbia University chimeric inventions).
7.3 Except as expressly set forth in this Agreement STANFORD MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF LICENSED PRODUCT(S) WILL
NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS.
8. INDEMNITY
8.1 PDL agrees to indemnify, hold harmless, and defend STANFORD and
its trustees, officers, employees, students, and agents against any and all
claims for death, illness, personal injury, property damage, and improper
business practices arising out of the manufacture, use, sale, or other
disposition of Invention(s), Licensed Patent(s), or Licensed Product(s) by PDL
or sublicensee(s).
8.2 PDL agrees not to proceed with [ ] until the appropriate
insurance limits have been mutually agreed upon in writing by STANFORD and
PDL, provided that premiums for such insurance are reasonable and obtainable.
Such insurance shall cover the activities of PDL contemplated by this
Agreement, including public liability and product liability.
8.3 In order to meet the obligations of this Article 8, PDL agrees to
notify STANFORD thirty (30) days prior to the onset of Phase III clinical
trials and to inform STANFORD as to the expected number of patients
participating in such clinical trials.
8.4 Insurance shall be procured and maintained with a reputable and
financially secure insurance carrier. Such insurance shall include Stanford
University, Stanford University Hospital, their trustees, directors, officers,
employees, and agents, as additional insureds with respect to this Agreement,
and shall provide that it shall not be canceled or materially altered except
upon at least thirty (30) days written notice to STANFORD.
9. MARKING
When reasonable, prior to the issuance of patents on the Invention(s),
PDL agrees to mark Licensed Product(s) (or its containers or labels) made,
sold, or otherwise disposed of by it under the license granted in this
Agreement with the words "Patent Pending," and following the issuance of one
or more patents, with the numbers of the Licensed Patent, if applicable.
10. PROMOTIONAL ADVERTISING
PDL agrees not to identify STANFORD in any promotional advertising or
other materials to be disseminated to the public or any portion thereof or to
use the name of any STANFORD faculty member, employee, or student or any
trademark, service mark, trade name, or symbol of STANFORD or the Stanford
University Hospital, or that is associated with either of them, without
STANFORD's prior written consent.
11. INFRINGEMENT BY OTHERS: PROTECTION OF PATENTS
11.1 Both parties shall promptly inform the other party of any
suspected infringement of any Licensed Patent(s) by a third party. During the
Exclusive period of this Agreement, STANFORD and PDL each shall have the right
to institute an action for infringement of the Licensed Patent(s) against such
third party in accordance with the following:
(a) If STANFORD and PDL agree to institute suit jointly, the
suit shall be brought in both their names, the out-of-pocket costs thereof
shall be borne equally, and any recovery or settlement shall be shared
equally. PDL and STANFORD shall agree to the manner in which they shall
exercise control over such action. STANFORD may, if it so desires, also be
represented by separate counsel of its own selection, the fees for which
counsel shall be paid by STANFORD;
(b) In the absence of an agreement to institute a suit jointly,
PDL may institute suit, and, at its option, join STANFORD as a plaintiff. PDL
shall bear the entire cost of such litigation and shall be entitled to retain
the entire amount of any recovery or settlement;
(c) In the absence of an agreement to institute a suit jointly
and if PDL has not notified STANFORD that it has decided to join in or
institute a suit, as provided in (a) or (b) above, STANFORD may institute a
suit and, at its option, join PDL as a plaintiff. STANFORD shall bear the
entire cost of such litigation and shall be entitled to retain the entire
amount of any recovery or settlement; and
(d) If STANFORD decides to institute suit, then it shall notify
PDL in writing. PDL's failure to notify STANFORD in writing, within thirty
(30) days after the date of the notice, that it will join in enforcing the
patent pursuant to the provisions hereof, shall be and be deemed conclusively
to be PDL's assignment to STANFORD of all rights, causes of action, and
damages resulting from any such alleged infringement and STANFORD shall be
entitled to retain the entire amount of any recovery of settlement.
Furthermore, at its option, STANFORD may join PDL as plaintiff.
11.2 Should either STANFORD or PDL commence a suit under the provisions
of Paragraph 11.1 and thereafter elect to abandon the same, it shall give
timely notice to the other party who may, if it so desires, continue
prosecution of such suit, provided, however, that the sharing of expenses and
any recovery in such suit shall be prorated as of the date the party elects to
abandon the suit.
12. COMMERCIAL APPLICATION, SUBLICENSES
12.1 As an inducement to STANFORD to enter into this Agreement, PDL
agrees to use commercially reasonable efforts and diligence to proceed with
the development, manufacture, and sale of Licensed Product(s) and to develop
markets for the Licensed Product(s), subject to any delays or hindrances
beyond the control of PDL or due to force majeure. PDL intends to develop
Licensed Product(s) according to the following schedule. Failure to meet the
schedule will not be a breach of this Agreement as long as PDL can demonstrate
to STANFORD's reasonable satisfaction PDL's diligence in developing Licensed
Product(s):
June 1991: Either produce and characterize, or complete the
licensing of, a high-affinity, neutralizing anti-
gamma interferon (anti-IFN) antibody.
December 1991: Clone and sequence the light and heavy chain genes
of the anti-IFN antibody.
June 1992: Produce and characterize a mouse-human chimeric
anti-IFN antibody. Complete the protein design of
the (fully) humanized anti-IFN antibody.
December 1992: Produce and characterize a high-affinity, humanized
anti-IFN antibody.
June 1993: Produce the humanized anti-IFN antibody in
sufficient quality and quantity for animal
toxicology studies.
December 1993: Complete all toxicology studies required for IND
submission. Create master cell bank and complete
all cell tests (e.g., virology) needed for IND
submission.
June 1994: File IND for Phase I trials acceptable to FDA and
designed to show some indication of efficacy as well
as safety.
December 1994: Complete Phase I trials.
12.2 If PDL is unable (except for reasons or circumstances beyond PDL's
control) or unwilling to serve or develop a potential market for which there
is a willing and capable sublicensee(s), PDL will, at STANFORD's request,
negotiate in good faith a sublicense hereunder.
12.3 Any sublicense granted by PDL under this Agreement shall be
subject and subordinate to terms and conditions of this Agreement, except:
(a) Sublicense terms and conditions shall reflect that any
sublicensee(s) shall not further sublicense; and
(b) The earned royalty rates and other fees payable to PDL by
PDL's sublicensee(s) may be at higher rates and fees than of this Agreement.
Any such sublicense shall also expressly include the provisions of
Articles 6, 7 and 8 for the benefit of STANFORD.
13. TERMINATION
13.1 PDL may terminate this Agreement by giving STANFORD notice in
writing at least thirty (30) days in advance of the effective date of
termination selected by PDL.
13.2 STANFORD may terminate this Agreement if PDL:
(a) is in default in payment of royalty or providing of reports;
(b) is in breach of any provision hereof materially affecting
this Agreement; or
(c) provides any materially false report;
and PDL fails to remedy any such default, breach, or false report within
thirty (30) days after written notice thereof by STANFORD.
13.3 Surviving any termination are:
(a) PDL's obligation to pay royalties accrued or accruable;
(b) Any cause of action or claim of PDL or STANFORD, accrued or
to accrue, because of any breach or default by the other party; and
(c) The application provisions of Articles 6, 7, and 3.
14. ASSIGNMENT
This Agreement may not be assigned except as part of a sale or transfer
of substantially the entire business relating to operations pursuant to this
Agreement.
15. ARBITRATION
15.1 Any controversy arising under or related to this Agreement, or any
disputed claim by either party against the other under this Agreement
excluding any dispute relating to patent validity or infringement arising
under this Agreement, shall be settled in arbitration in accordance with the
Licensing Agreement Arbitration Rules of the American Arbitration Association.
Upon request of either party, arbitration will be by:
(a) A third party arbitrator mutually agreed upon in writing by
PDL and STANFORD within thirty (30) days of such arbitration request; or
(b) A member of the American Bar Association selected in
accordance with American Arbitration Association rules.
If the issues in dispute involve scientific or technical matters, any
arbitrator chosen hereunder shall have educational training and/or experience
sufficient to demonstrate a reasonable level of knowledge in the field of
biotechnology.
Judgment upon the award rendered by the Arbitrator may be entered in any
court having jurisdiction thereof.
15.2 The parties shall be entitled to discovery at their own expense in
like manner as if the arbitration were a civil suit in a general district
court.
15.3 Any arbitration shall be held at Stanford, California, unless the
parties hereto mutually agree in writing to another place.
16. NOTICES
All notices under this Agreement shall be deemed to have been fully
given when done in writing and deposited in the United States mail, registered
or certified, and addressed as follows:
To STANFORD: Office of Technology Licensing
Stanford University
857 Serra Street, 2nd Floor
Stanford, CA 94305-6225
Attention: Director, Technology Licensing
To PDL: Protein Design Labs, Inc.
2375 Garcia Avenue
Mountain View, CA 94043
Attention: President
Either party may change its address upon written notice to the
other party.
17. APPLICABLE LAW
This Agreement shall be construed, interpreted, and applied in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate originals by their duly authorized officers or representatives.
THE BOARD OF TRUSTEES
OF THE LELAND STANFORD
JUNIOR UNIVERSITY
By: /s/ Katharine Ku
Title: Acting Director, Technology
Licensing
Date: June 7, 1990
PROTEIN DESIGN LABS, INC.
By: /s/ Laurence Jay Korn
Title: President
Date: June 7, 1990
CONFIDENTIAL TREATMENT REQUESTED
Exhibit 1
TABLE OF PATENT APPLICATIONS AND PATENTS
Patent Patent Patent
Application Application Patent Patent Issue Expiration
Country Number Filing Date Number Date Date
U.S. [ ] [ ]
[ ] [ ]
Australia [ ] [ ]
Japan [ ] [ ]
Europe [ ] [ ]
Canada [ ] [ ]
Exhibit 2
LICENSE TO THE UNITED STATES GOVERNMENT
WHEREAS, C. Jacob, H. McDevitt, P. van der Meide, and J. Holoshitz, of
Stanford University, have invented "Method and Dosage Form Using An Antagonist
To Gamma Interferon To Control MHC-Associated Autoimmune Disease" and filed a
patent application thereon in United States bearing Serial No. 087.015 filing
date August 18, 1988;
WHEREAS, the invention was made in the course of research supported by
the Department of Health and Human Services; and
WHEREAS, the United States Government is entitled to certain rights in
and to said invention and application by reason of the terms of such support;
and
WHEREAS, the Stanford University, hereinafter called the "Licensor" has
acquired by assignment from the inventor the entire right, title, and interest
of the inventor to such invention;
NOW, THEREFORE
1. The Licensor, in consideration of the premises and other good and
valuable considerations, hereby grants and conveys to the United States
Government a royalty-free, nonexclusive and irrevocable license for
governmental purposes and on behalf of any foreign government pursuant to any
existing or future treaty or agreement with the United States under the
aforesaid patent application, and any and all divisions or continuations, and
in any and all patents or reissues which may be granted thereon during the
full term or terms thereof. As used herein, "governmental purpose" means the
right of the Government of the United States, including any agency thereof, to
practice and have practiced (made or have made, used or have used, sold or
have sold) in connection with programs funded in whole or in part by the
Federal Government throughout the world by or on behalf of the Government of
the United States.
2. The Licensor convenants and warrants that he has the right to
grant the foregoing license, and that any assignment which he may make of the
invention or the said patent applications or patents thereon, shall expressly
be made subject to this license.
3. The Licensor agrees that the Government shall not be estopped at
any time to contest the enforceability, validity, scope of, or title to, any
patent or patent application herein licensed.
The Board of Trustees of the
Leland Stanford Junior University
(Institution)
/s/ Katharine Ku
(Signature)
Katharine Ku
(Print or type name)
November 8, 1988 Associate Director, Technology Licensing
(Date) (Official Title)
I, Brenda Whitmarsh certify that I am the Asst. Secretary of the Institution
named as Licensor herein; that Katherine Ku, who signed this License on behalf
of the Institution is Assoc. Director, Tech. Licensing of said Institution;
and that said License was duly signed for and in behalf of said Institution by
authority of its governing body, and is within the scope of its corporate
powers.
SEAL /s/ Brenda Whitemarsh November 11, 1988
(Signature) (Date)
EXHIBIT 10.14
CONFIDENTIAL TREATMENT REQUESTED
SOFTWARE LICENSE AGREEMENT
Between Protein Design Labs, Inc. and Molecular Applications Group
This Software License Agreement ("Agreement") is entered into by and
among Protein Design Labs, Inc., a Delaware corporation having a place of
business at 2375 Garcia Avenue, Mountain View, California 94043 ("PDL"), and
Molecular Applications Group, a California corporation having a place of
business at 880 Lathrop, Stanford, California 94305 ("MAG") and Michael
Levitt, a natural person having a residence at 880 Lathrop, Stanford,
California 94305 ("Levitt"). The effective date of this Agreement shall be
September 1, 1990 ("Effective Date").
RECITALS:
A. MAG's president and sole shareholder, Levitt, is the developer of
certain software described in Parts 1 ("Antibody Model") and II ("Other
Software") of Exhibit A ("Product Description").
B. MAG is the exclusive licensee of, and has the right to sublicense,
such software and is considering, but undertakes no obligation with respect
to, the future development, acquisition or licensing of additional programs
related to the modeling of proteins.
C. PDL desires to reproduce and use such software for its internal
business purposes and to use one copy of a source code listing of certain of
such software for the particular purposes described below.
D. PDL desires to obtain certain licenses with respect to the
foregoing, subject to certain permitted academic uses of such software, all as
more fully set forth below.
AGREEMENT:
In consideration of the mutual covenants and other valuable
consideration set forth herein, the parties agree as follows:
1. Definitions.
For purposes of this Agreement, the following terms shall have the
respective meanings indicated below.
1.1 Academic Use. "Academic Use" shall mean use of the
Software, governed by a binding, signed agreement substantially as
protective of PDL's rights as the form attached hereto as Exhibit B
("Academic License Agreement"), by Levitt's students and professional
colleagues under Levitt's supervision ("Academic Users") for academic,
non-commercial purposes or in the course of Levitt's consulting work for
companies other than commercial companies.
1.2 License Term. "License Term" shall mean the term, as set
forth in Paragraph 7 ("Term and Termination") below, of the licenses
granted in this Agreement to the Other Software and, as set forth in
Paragraph 4.1 ("Updates") below, to certain enhancements, error
corrections, modifications and other programs.
1.3 Software. "Software" shall mean protein modeling software
programs consisting of (a) certain existing programs, i.e., the Antibody
Model and the Other Software and (b) other programs that MAG derives
from such existing software or develops, acquires or obtains the right
to sublicense during the term of this Agreement which are either:
(i) Changed or modified versions of the Software that
correct defects contained in the Software on the Effective Date
("Corrected Software") or
(ii) Changed, modified or enhanced versions of the Software
(other than Corrected Software) and new software programs that are
applicable to the humanization of antibodies.
No software program, whether or not derived from the Software, that includes
less than twenty-five percent (25%) of the source code of the Software in
existence as of the Effective Date and that is not applicable to modeling the
humanization of antibodies shall be considered to be Software for purposes of
this Agreement.
2. License.
2.1 License Grant. MAG hereby grants to PDL a worldwide license
to reproduce and use the Software within PDL (e.g., use by PDL's
employees and consultants is within the scope of this license but PDL
has no right to sublicense). The foregoing license shall be for a
perpetual term as to the Antibody Model and for the License Term as to
the Other Software.
2.2 Exclusivity.
(a) MAG covenants that it will not, during the License
Term, grant any further license permitting any party other than
PDL to use or sublicense the Software; provided, however, that
(i) MAG may grant a non-exclusive license permitting the internal
use of the Other Software (e.g., without the right to sublicense),
but not the Antibody Model, by E.I. duPont de Nemours & Co. and/or
Amgen Inc. (including any subsidiary or affiliate thereof) and
(ii) the foregoing restriction on MAG's rights shall end one (1)
year following the Effective Date.
(b) PDL's license shall include an exclusive license (even
as to MAG and its licensors) to use the Antibody Model to
(i) design antibodies, (ii) design proteins linked to antibodies,
or (iii) design and develop methods of joining antibodies and
proteins (the "Exclusive Purposes").
(c) MAG and Levitt covenant that, MAG and Levitt will take
reasonable steps to assure that no third party makes use of the
Antibody Model other than an Academic Use by an Academic User.
PDL agrees that, so long as MAG and Levitt are in compliance with
the foregoing covenant, neither MAG nor Levitt shall have any
liability to PDL as a result of third party uses of the Antibody
Model not authorized by MAG or Levitt.
(d) The restrictions on use and/or licensing of the
Software set forth in this Paragraph 2.2 ("Exclusivity") shall in
no way limit the right of MAG or Levitt to authorize Academic Use
of the Software.
3. Delivery, Acceptance and Warranty.
3.1 Delivery and Acceptance. PDL acknowledges that MAG has
previously delivered, or concurrently with the Effective Date will
deliver, a master copy of the Antibody Model and Other Software. PDL
acknowledges that it has either inspected or waived its right to
inspect, and hereby accepts, the Antibody Model and Other Software.
3.2 Warranty. MAG warrants that (i) it is the sole and
exclusive licensee of the Software and all intellectual property rights
therein, (ii) it has the full right and power to grant to PDL the rights
herein granted, (iii) the Software and its use by PDL within the scope
of the licenses herein granted will not infringe any patent, copyright
or trade secret and, to the best of MAG's knowledge, any other
intellectual property right arising under United States law and
(iv) neither it nor its licensors have previously granted any license
permitting any party other than PDL to use or sublicense the Software.
If in the future MAG becomes aware of a significant possibility that the
Software or its use by PDL within the scope of the licenses granted
herein might infringe any intellectual property right arising under
United States law, MAG shall promptly so inform PDL.
3.3 WARRANTY DISCLAIMER. EXCEPT FOR ANY EXPRESS WARRANTIES
STATED IN THIS AGREEMENT, MAG (A) MAKES NO ADDITIONAL WARRANTIES,
EXPRESS, IMPLIED, ARISING FROM COURSE OF DEALING OR USAGE OF TRADE, OR
STATUTORY, AS TO ANY MATTER WHATSOEVER AND (B) DISCLAIMS ALL WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-
INFRINGEMENT OF THIRD PARTY RIGHTS.
4. Updates and Use of PDL Computers.
4.1 Updates. If, during the term of this Agreement, MAG shall
develop, license or acquire any Corrected Software or New or Enhanced
Software, MAG shall promptly provide PDL with a copy thereof. MAG also
agrees to assist PDL, at no additional charge, in creating Corrected
Software and New or Enhanced Software as
reasonably requested by PDL during the term of this Agreement. All
Corrected Software and New or Enhanced Software shall be deemed, in
accordance with the terms and conditions of this Agreement and without
payment of additional consideration, to be included in the (i) Antibody
Model if directly applicable to the modeling of antibodies and
(ii) Other Software if not directly applicable to the modeling of anti-
bodies; provided, however, that PDL's license to all New or Enhanced
Software shall expire at the end of the License Term for the Other
Software.
4.2 Use of PDL Computers. During the term of this Agreement,
PDL shall allow Levitt to continue to use time an PDL's Silicon Graphics
machines without charge, to the extent appropriate for additional
software development and to the extent that such use does not interfere
with PDL's ongoing activities.
5. License Fee. PDL agrees to pay MAG a license fee of [ ] within five
(5) business days following the Effective Date and a license fee of [ ]
dollars on fourth and each subsequent quarterly anniversary of the Effective
Date during the License Term for the Other Software; provided, however, that
the quarterly fee shall be reduced to [ ] following termination of this
Agreement pursuant to Paragraph 7.2 ("Termination Without Cause") below. PDL
and MAG agree that [ ] shall be allocable to the Antibody Model and [ ]
shall be applicable to each of ENCAD and MolMan (as defined in Exhibit A
("Product Description")).
6. Source Code.
6.1 Return of Source Code. PDL specifically acknowledges that,
except as set forth in this Paragraph 6 ("Source Code"), no rights are
granted to it hereunder to the human readable source code versions of
the Software. PDL agrees not to disassemble, decompile, reverse
engineer or otherwise reduce the object code versions of the Software to
a human-perceivable form. Within thirty (30) days of the Effective
Date, PDL shall return to MAG all source code versions of the Software
(other than as set forth in the following sentence) and shall certify to
MAG in writing that it retains no such source code versions. Within
thirty (30) days of the Effective Date, MAG shall provide PDL with one
(1) printed listing of the current Fortran source code of the Antibody
Model, which PDL may consult, internally, for the sole purpose of
diagnosing apparent conflicts between the documentation and behavior of
the Antibody Model, and which PDL shall not otherwise reproduce or
convert into in any other form by any electronic or other means
(including, but not limited to, computer or information storage and
retrieval systems) without the prior written consent of MAG; provided,
however, that MAG hereby consents to PDL's reproduction of up to five
(5) additional printed, non-electronic copies of the printed listing
solely for PDL's internal use and subject to its confidentiality and
non-disclosure requirements hereunder.
6.2 Potential Function Numbers. MAG shall, during the License
Term for the Other Software, provide PDL with the mathematical
expression of potential energy functions (numerical values and relevant
equations) that are developed, acquired or licensed by MAG or included
in the Software, and all updates to these functions, in a timely manner.
6.3 Escrow Agreement. PDL and MAG shall at all times during the
License Term maintain in force an escrow agreement in substantially the
form set forth in Exhibit C ("Escrow Agreement") with an independent
third party escrow agent. PDL and MAG shall promptly enter into such
agreement with the escrow agent named in the Escrow Agreement and any
successor escrow agent appointed pursuant to the Escrow Agreement. PDL
shall pay the fees and expenses of such escrow agent as required by the
Escrow Agreement.
6.4 Escrow License. MAG hereby grants PDL a worldwide,
irrevocable, license, effective upon the rightful release (in accordance
with the Escrow Agreement) to PDL of Source Code (as defined in the
Escrow Agreement), to utilize such Source Code solely within PDL to
(i) maintain and correct the Source Code for the Other Software and
(ii) maintain, correct, enhance, modify and prepare derivative works
based upon the Source Code for the Antibody Model, and to derive object
code therefrom for use and reproduction by PDL subject to the licenses
granted herein (which, in such event and for such purpose, shall be
perpetual). The foregoing license to utilize Source Code shall be
exclusive as to the Source Code of the Antibody Model and non-exclusive
as to the Source Code of the Other Software.
7. Term and Termination.
7.1 Term and License Term. The term of this Agreement and the
License Term shall commence on the Effective Date and shall continue
until terminated in accordance with the provisions of this Paragraph 7
("Term and Termination").
7.2 Termination Without Cause. PDL may terminate the term of
this Agreement and the License Term, without cause, effective upon one
(1) year written notice to MAG. MAG may terminate the term of this
Agreement, without cause, effective immediately upon written notice to
PDL and the License Term shall continue for five (5) years following
such notice.
7.3 Termination For Cause. In the event of any breach of any
term or provision under this Agreement by either party hereto, the non-
breaching party may send a written notice explaining the nature of the
breach to the breaching party, which notice shall be delivered in
accordance with the terms of this Agreement. If any breach is not cured
within thirty (30) days after the MAG of the notice of breach, the non-
breaching party may terminate this Agreement upon written notice.
7.4 Obligations Upon Termination or Expiration. Upon the
effective date of termination of the License Term, PDL shall deliver to
MAG or destroy all Software, Master Copies and related materials in its
possession furnished hereunder by MAG, together with all copies thereof,
and shall warrant in writing within thirty (30) days of termination that
the Software, Master Copies, related materials and all copies thereof
have been returned to MAG-or erased or destroyed.
8. Protection of Proprietary Rights.
8.1 Proprietary Rights. PDL will take all reasonable measures
to protect the proprietary rights of MAG and its licensors in the
Software and any source code versions thereof, including all measures
PDL employs to protects its own valuable trade secret information.
Except as stated herein, this Agreement does not grant PDL any rights to
patents, copyrights, trade secrets, tradenames, trademarks (whether
registered or unregistered) or any other rights, franchises or licenses
in respect of the Software.
8.2 Non-Disclosure.
(a) Obligations. PDL expressly undertakes to retain in
confidence all confidential information, designated as such in
accordance with the terms of subparagraph (b) below, transmitted
to it hereunder by MAG, and agrees to make no use of such
confidential information except under the terms of this Agreement.
During the term of this Agreement, PDL shall be exposed to certain
information concerning MAG's Software and proposed new Software
which are the confidential and proprietary information of MAG and
not generally known to the public. PDL agrees that during and
after the term of this Agreement, it will not use or disclose to
any third party any confidential information without the prior
written consent of MAG. MAG hereby consents to the disclosure of
its confidential information to certain employees of PDL who agree
to keep MAG's confidential information in confidence, in order to
allow PDL to perform under this Agreement and to obtain the
benefits hereof. MAG further agrees that PDL shall be permitted to
demonstrate the object code version of the Software to third
parties in connection with PDL's business discussions with such
third parties. This subparagraph (a) shall not apply to
information after such information is made public by MAG.
(b) Designation of Confidential Information. MAG
confidential information shall consist of (i) all information in
written form that is marked "Confidential" or similarly marked by
MAG before being furnished to PDL and (ii) the source code of the
Software. AU oral disclosures of confidential information shall
be identified as such prior to disclosure and summarized, in
writing, by MAG and said summary shall be given to PDL within
thirty (30) days of the subject oral disclosure.
(c) Exception. PDL shall not be liable for disclosure or
use of any data or information which (i) was in the public domain
at the time it was disclosed or falls within the public domain,
except through the fault of PDL; (ii) was known to PDL at the time
of disclosure, which knowledge PDL shall have the burden of
establishing by clear and convincing evidence; (iii) was disclosed
after written approval of MAG; (iv) becomes known to PDL from a
source other than MAG without breach of this Agreement by PDL;
(iv) is disclosed pursuant to the order of a court or other
governmental authority having jurisdiction over PDL (provided,
however, that PDL shall promptly notify MAG and cooperate with MAG
in limiting disclosure to the extent legally permissible and/or
seeking an appropriate protective order from such authority); or
(v) was independently developed by PDL without the benefit of
confidential information received from MAG, which independent
development the receiving party shall have the burden of
establishing by clear and convincing evidence.
8.3 Proprietary Legends. PDL will retain in and on all copies
of the Software all copyright notices and proprietary data legends
contained therein or thereon at the time of delivery to PDL or as
otherwise reasonably requested by MAG and will affix all such legends to
any copies of the Software made by PDL.
8.4 Continuing Covenant. Each party covenants that, during and
in the course of its performance hereunder, it will not communicate to
the other party any confidential or proprietary information which, to
the best of the communicating party's knowledge is communicated in
violation of the communicating party's obligations to the owner thereof.
9. EXCLUSION OF CERTAIN DAMAGES. EXCEPT FOR DAMAGES ARISING FROM A
BREACH OF THE OBLIGATIONS SET FORTH IN PARAGRAPH 8 ("PROTECTION OF PROPRIETARY
RIGHTS") ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY THIRD
PARTY FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, LOSS OF PROFITS OR
REVENUE, OR INTERRUPTION OF BUSINESS IN ANY WAY ARISING OUT OF OR RELATED TO
THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY BUT EXCLUDING INTENTIONAL
TORT) OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF THE PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. IN THE CASE OF SUCH DAMAGES ARISING FROM
A BREACH OF THE OBLIGATIONS SET FORTH IN PARAGRAPH 8 ("PROTECTION OF
PROPRIETARY RIGHTS") ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
OR ANY THIRD PARTY FOR INCIDENTAL SPECIAL OR CONSEQUENTIAL DAMAGES, LOSS OF
PROFITS OR REVENUE, OR INTERRUPTION OF BUSINESS IN ANY WAY ARISING OUT OF OR
RELATED TO THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION WHICH, IN
AGGREGATE, EXCEED TWO HUNDRED THOUSAND DOLLARS ($200,000).
10. Miscellaneous.
10.1 Notices. Any notice or reports required or permitted to be
given under this Agreement shall be given in writing and shall be
delivered by personal delivery, telegram, telex, telecopier, facsimile
transmission or by certified or registered mail, postage prepaid, return
receipt requested, and shall be deemed given upon personal delivery,
five (5) days after deposit in the mail or upon acknowledgment of
receipt of electronic transmission. Notices shall be sent to the
signatory of this Agreement at the address set forth at the beginning of
this Agreement or such other address as either party may specify in
writing.
10.2 Survival of Obligations. PDL agrees that its obligations
under Paragraph 8 ("Protection of Proprietary Rights") shall survive any
expiration or termination of this Agreement.
10.3 Severability. The provisions of this Agreement are
severable and if any one or more such provisions shall be determined to
be invalid, illegal or unenforceable, in whole or in part, the validity,
legality and enforceability of any of the remaining provisions or
portions thereof shall not in any way be affected or impaired thereby
and shall nevertheless be binding between the parties hereto. Any such
invalid, illegal or unenforceable provision or portion thereof shall be
changed and interpreted so as to best accomplish the objectives of such
provision or portion thereof within the limits of applicable law or
applicable court decisions.
10.4 Governing Law. This Agreement shall be construed in
accordance with and all disputes hereunder shall be governed by the laws
of the State of California as applied to transactions taking place
wholly within California between California residents.
10.5 Attorneys' Fees. In any action to interpret or enforce this
Agreement, the prevailing party shall be awarded all court costs and
reasonable attorneys' fees incurred.
10.6 Assignment. Neither party shall directly or indirectly
sell, transfer, assign, convey, pledge, encumber or otherwise dispose of
this Agreement without the prior written consent of the other party.
Notwithstanding the foregoing, either party may, without the prior
consent of the other party, assign or transfer this Agreement as part of
a corporate reorganization, consolidation, merger or sale of
substantially an assets provided said entity assumes all of such party's
obligations hereunder.
10.7 Relationship of the Parties. Nothing contained in this
Agreement shall be construed as creating any agency, partnership, or
other form of joint enterprise between the parties. The relationship
between the parties shall at all times be that of independent
contractors. Neither party shall have authority to contract for or bind
the other in any manner whatsoever. This Agreement confers no rights
upon either party except those expressly granted herein.
10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.9 Entire Agreement. This Agreement is the complete, entire,
final and exclusive statement of the terms and conditions of the
agreement between the parties. This Agreement supersedes, and the terms
of this Agreement govern, (i) any prior or collateral agreements between
the parties with respect to the subject matter hereof (including that
certain letter agreement between PDL and Levitt dated as of June 28,
1988) and (ii) that certain Letter of Intent between PDL and Levitt
dated as of May 30, 1990. The parties acknowledge and agree that
Levitt, in his capacity as a natural person, serves as a consultant to
PDL pursuant to that certain Consulting Agreement dated as of October 1,
1987 and amended as of January 1, 1990 ("Consulting Agreement") and
agree that this Agreement shall not apply to, and the Consulting
Agreement shall govern, all matters arising between PDL and Levitt in
connection with Levitt's services as a consultant to PDL This Agreement
may not be modified except in a writing executed by duly authorized
representatives of the parties.
10.10 Levitt as Limited Party. Levitt shall use his best efforts
to insure that if he develops any software programs during the term of
this Agreement ("Programs") which, had such Programs been developed by
MAG, would constitute Software hereunder, that such Programs are
licensed or assigned either to (i) PDL on terms providing PDL with
rights substantially equivalent to its rights to Software hereunder or
(ii) MAG so that MAG obtains the right to sublicense such Programs to
PDL as Software. PDL, Levitt and MAG agree that Levitt (in his capacity
as a natural person) is a direct party to this Agreement solely to
undertake the obligations and be subject to the provisions set forth in
Paragraph 10 ("Miscellaneous") and subparagraph (c) of Paragraph 2.2
("Exclusivity") and shall have no other obligations or liability under
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.
MAG: Molecular Applications Group
By: /s/ Michael Levitt
Michael Levitt, President
PDL: Protein Design Labs, Inc.
By: /s/ Lawrence Jay Korn
Laurence Jay Korn, President
/s/ Michael Levitt
Michael Levitt
EXHIBIT A
Product Description
Part I: Antibody Model
The Antibody Model (ABMOD) is a computer software program that builds a
model of an antibody Fv domain from the three-dimensional structure of other Fv
domains.
Part II: Other Software
ENCAD (Energy Calculation and Dynamics) program, a program which
calculates the potential energy of any system of organic molecules, especially
protein macromolecules, for energy minimization and molecular dynamics
simulation.
MolMan (Molecular Manager) program, a program which allows molecular
structure to be displayed and modeled on the Silicon Graphics Iris series
workstations, with emphasis on space-filling representations, real-time
frequency filtering of trajectories and mouse-driven interface.
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B
Academic License
In return for the rights granted below, you agree as follows:
Scope. Molecular Applications Group ("MAG") grants to you the
nonexclusive right to use the accompanying software and documentation
("Product") for academic, noncommercial purposes and to make such software
resident on a single computer. This License does not grant you any
intellectual property rights or other rights in the Product other than as
expressly listed herein. Without limitation, you may not (i) use the Product
in a network, (ii) rent or lease the Product or (iii) license or convey to any
third party any rights related to the commercial exploitation of humanized
antibodies designed or developed with the Product.
Proprietary Rights and Obligations. The Product, including its
structure, sequence and organization, is the valuable property of MAG and its
Licensors. You may not make, have made, or permit to be made, any copies of
the Product or any portion thereof, except that you may make one copy of the
Product solely for backup purposes which shall contain the same proprietary
notices which appear on or in the Product. MAG and its licensors retain title
and ownership of the Product recorded on the original media and all subsequent
copies of the Product, regardless of the form or media in or on which the
original and other copies may exist. You may not modify, adapt, translate,
reverse engineer, decompile, disassemble or create derivative works based on
the Product.
No Assignment. You may not assign or transfer your rights under this
License to any third party.
Term. This License shall terminate immediately if you breach any
provision hereof and, otherwise, in the year [ ]. Upon termination, you
will destroy the Product and all copies or modifications in any form.
Export. The Product may include commodities and technical data of
United States origin whose export or re-export is restricted by U.S. law. You
agree not to export or reexport the Product, or any portion thereof in any
form without all required U.S. and foreign licenses. Your obligations
pursuant to this paragraph shall survive and continue after any termination or
expiration of this License.
NO WARRANTY. The Product is provided "as is" without warranty of any
kind, either express or implied, including but not limited to the warranties
of non-infringement of third party rights, merchantability or fitness for a
particular purpose. MAG does not warrant that the Product will meet your
requirements or will operate uninterruptedly or without error. The entire
risk as to the quality and performance of the Product is with you. Should the
Product prove defective, you assume the entire cost of repair and correction.
Some states do not allow the exclusion of implied warranties, limits on the
duration of implied warranties, or exclusion or limitation of incidental or
consequential damages, so the limitations or exclusions contained herein may
not apply to you. This License gives you specific legal rights and you may
also have other rights which vary from state to state.
Limit of Liability. In no event will MAG be liable to you for any
consequential or incidental damages, including lost profits or lost savings,
or for any claim by another party, even if an MAG representative has been
advised of the possibility of such damages or claim.
Third Party Beneficiary. You acknowledge that certain commercial rights
with respect to the Product have been licensed to Protein Design Labs, Inc., a
Delaware corporation located at 2375 Garcia Avenue, Mountain View, California
who is an intended third party beneficiary of, and entitled to enforce, this
License.
Entire Agreement. You have read and understand this License. It is the
complete and exclusive statement of the agreement between MAG and you and
supersedes any prior agreement, oral or written, and any other communications
between MAG and you relating to the subject matter hereof. Your obligations
hereunder shall inure to the benefit of MAG's licensors whose rights are
licensed hereby. No variation of the terms of this License or any different
terms will be enforceable against MAG unless MAG gives its express signed
written consent including an express waiver of the terms hereof. This License
is governed by the laws of the State of California, without regard to
California's law regarding conflicts of law.
IN WITNESS WHEREOF, the undersigned student or professional colleague of
Dr. Michael Levitt has signed his or her name below.
Signature
Printed Name
Date
EXHIBIT C
ESCROW AGREEMENT
THIS AGREEMENT ("Escrow Agreement") is executed as of this 12th day of
December, 1990 by and among Protein Design Labs, Inc. ("Licensee"), a Delaware
corporation having a place of business at 2375 Garcia Avenue, Mountain View,
California 94043, and Molecular Applications Group, a California business at
880 Lathrop, Stanford, California 94305 ("Licensor") and Townsend & Townsend,
a California partnership having a place of business at 379 Lytton Avenue, Palo
Alto, California 94303 ("Escrow Agent").
RECITALS
A. Licensor and Licensee have entered into a Software License
Agreement (the "Agreement") dated as of September 1, 1990 pursuant to which
Licensor has granted to Licensee certain rights with respect to object code
versions of certain of Licensor's computer software programs ("Software").
B. Maintenance and support of such programs are critical to Licensee
in the conduct of its business;
C. The Agreement requires Licensor and Licensee to enter into an
Escrow Agreement with Escrow Agent in the form hereof.
D. The purpose of this Agreement is to provide for Licensor's
periodic deposit of certain source code for Software with Escrow Agent and,
under certain circumstances specified below, to permit Licensee to obtain the
escrowed Source Code from the Escrow Agent solely for the purposes set forth
herein;
E. Escrow Agent is a law firm which serves as Licensee's patent
counsel. Escrow Agent does not generally serve in the capacity of an escrow
agent but is MAG to do so, on the terms set forth herein, as an accommodation
to Licensee.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, the parties agree as follows:
1. DEPOSIT OF DOCUMENTATION.
(a) The term "Source Code" as used in this Escrow Agreement
means the human and/or machine readable versions (on disk or magnetic tape
media) as applicable of the materials utilized or generated by Licensor
internally in the course of creating Software and all associated internal
documentation including computer source instructions for Software, a list of
the names of the modules included, instructions for building object code
versions of Software from Source Code, command files used in constructing such
object code, object code files as built by Licensor from Source Code, any
other ancillary files and listings created in the course of building such
object code files and any additional tools and subroutines required to build
Software that are not generally commercially available.
(b) Licensor agrees to deposit with Escrow Agent, (i) January
15, 1991 (the foregoing, and all other capitalized terms used and not defined
herein, being ascribed the meanings set forth in the Agreement) the Source
Code thereof and (ii) semi-annually, or as otherwise reasonably requested by
Licensee, the then current Source Code of the Software and updates and
corrections thereto delivered or required to be delivered under the Agreement.
Such deposit shall consist of a sealed package certified by Licensee to
contain a complete set of such Source Code as defined in Paragraph l(a) above.
(c) The term "Deposit" as used in this Escrow Agreement means
the Source Code deposited with Escrow Agent by Licensor pursuant to this
Escrow Agreement.
2. REVISIONS AND MAINTENANCE. Escrow Agent shall acknowledge receipt
of all Deposits by sending written acknowledgment thereof to both Licensor and
Licensee.
3. STORAGE AND SECURITY.
(a) Escrow Agent shall act as custodian of the Deposit until the
escrow is terminated pursuant to Paragraph 11 ("Termination") of this Escrow
Agreement. Escrow Agent shall maintain the Deposit in the same manner as it
would maintain a confidential client file in accordance with Escrow Agent's
usual business practices.
(b) The Deposit shall remain the exclusive property of the
Licensor, subject only to the licenses provided in this Escrow Agreement.
(c) Escrow Agent shall not divulge, disclose or otherwise make
available the Deposit to any parties other than those persons duly authorized
in writing by a competent officer of Licensor, except as provided in this
Escrow Agreement.
(d) Escrow Agent shall not permit any person access to the
Deposit except as may be necessary for Escrow Agent's authorized
representatives to perform under this Escrow Agreement.
(e) Access to the Deposit shall not be granted without
compliance with any security and identification procedures instituted by
Escrow Agent.
(f) Escrow Agent shall have no obligation or responsibility to
verify or determine that the Deposit does, in fact, consist of those items
which Licensor is obligated to deliver, under any agreement, and Escrow Agent
shall bear no responsibility whatsoever to determine the existence, relevance,
completeness, currency, or accuracy of the Deposit.
(g) Escrow Agent's sole responsibility shall be to accept, store
and deliver the Deposit, in accordance with the terms and conditions of this
Escrow Agreement.
(h) If any of the Deposit shall be attached, garnished or levied
upon pursuant to an order of court, or the delivery thereof shall be stayed or
enjoined by an order of court, or any other order, judgment or decree shall be
made or entered by any court affecting the Deposit or any part thereof, Escrow
Agent is hereby expressly authorized in its sole discretion to obey and comply
with all orders, judgments or decrees so entered or issued by any court,
without the necessity of inquiring whether such court had jurisdiction, and in
case Escrow Agent obeys or complied with any such order, judgment or decree,
Escrow Agent shall not be liable to any Licensee of Record, Licensor or any
third party by reason of such compliance, notwithstanding that such order,
judgment or decree may subsequently be reversed, modified or vacated.
4. RELEASE OF DEPOSIT.
(a) Upon the occurrence of any Event of Default (as defined in
Paragraph 7 ("Events of Default")), Licensee may deliver to Escrow Agent a
written notice of such Event of Default (a "Notice"). Escrow Agent shall,
within five (5) business days of receipt thereof, send a copy of such Notice
to Licensor. Unless Licensor shall have provided Contrary Instructions (as
defined below) to Escrow Agent within twenty (20) business days after Escrow
Agent has sent a copy of such Notice to Licensor, the Deposit shall be
delivered to Licensee by Escrow Agent within the next five (5) business days
following the end of such twenty (20) day period.
(b) "Contrary Instructions" for the purposes of this Escrow
Agreement means a notarized affidavit executed by an official of Licensor
stating that the Event or Events of Default specified in Licensee's Notice
have not occurred, or have been timely cured.
(c) Upon timely receipt of such Contrary Instructions, Escrow
Agent shall not release the Deposit, but (except pursuant to subparagraph (c)
of Paragraph 11 ("Termination") below) shall continue to store the Deposit
until otherwise directed by Licensee and Licensor jointly, or until resolution
of the dispute pursuant to Paragraph 5 ("Dispute Resolution") of this Escrow
Agreement, or by a court of competent jurisdiction.
(d) Notwithstanding any Deposit release hereunder, the
obligations of Licensor to continue making Deposits and the obligations of
Escrow Agent to receive and maintain such Deposits shall continue throughout
the term of this Escrow Agreement.
5. DISPUTE RESOLUTION. Licensor and Licensee agree that if Contrary
Instructions are timely given by Licensor pursuant to Paragraph 4 ("Release of
Deposit") hereof, then Licensor and Licensee shall submit their dispute
regarding Licensee's Notice to arbitration by a single arbitrator appointed by
the American Arbitration Association ("Association") in accordance with the
Association's commercial arbitration rules then in effect (as expressly
modified by this paragraph). The arbitration shall take place in the County
of Santa Clara, State of California. The decision of the arbitrator shall be
final and binding upon the parties and enforceable in any court of competent
jurisdiction, and a copy of such decision shall be delivered immediately to
Licensor, Licensee and Escrow Agent. The parties shall use their best efforts
to commence the arbitration proceeding within twenty (20) business days
following delivery of the Contrary Instructions. The sole question to be
determined by the arbitration panel shall be whether or not there existed an
Event of Default at the time Licensee delivered the Notice under Paragraph 4
("Release of Deposit"), and, if so, whether such Event of Default was timely
cured. If the arbitration panel finds that there has been an Event of Default
not timely cured, Escrow Agent shall promptly deliver the Deposit to Licensee.
Depositions may be taken and discovery obtained in any such arbitration
proceedings as provided in Sections 1283.05 and 1283.1 of the Code of Civil
Procedure of the State of California. All fees and charges by the American
Arbitration Association and the reasonable attorneys' fees and costs incurred
by the prevailing party in the arbitration shall be paid by the non-prevailing
party. Judgment upon the award rendered by the arbitrator may be entered into
any court having jurisdiction thereof. Notwithstanding the foregoing, either
party shall have the right to obtain a preliminary judgment on any equitable
claim in any court of competent jurisdiction, where such judgment is necessary
to preserve property or proprietary rights under this Escrow Agreement. Such
judgment shall remain effective as long as the terms of the judgment so
provide or until specifically superseded by the action of the arbitration
panel as provided above.
6. BANKRUPTCY. Licensor and Licensee acknowledge that this Escrow
Agreement is an "agreement supplementary to" the Agreement as provided in
Section 365(n) of Title 11, United States Code (the "Bankruptcy Code").
Licensor acknowledges that if Licensor as a debtor in possession or a trustee
in bankruptcy in a case under the Bankruptcy Code rejects the Agreement or
this Escrow Agreement, Licensee may elect to retain its rights under the
Agreement and this Escrow Agreement as provided in Section 365(n) of the
Bankruptcy Code. Upon written request of the Licensee to Licensor or the
Bankruptcy Trustee, Licensor or such Bankruptcy Trustee shall not interfere
with the rights of licensee as provided in the Agreement and this Escrow
Agreement, including the right to obtain the Deposit from Escrow Agent.
7. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" for purposes of this Escrow Agreement.
(a) Licensor applies for or consents to the appointment of a
trustee, receiver or other custodian or makes a general assignment for the
benefit of its creditors,
(b) Any bankruptcy, reorganization, debt arrangement, or other
case or proceeding under any bankruptcy or insolvency law, or any dissolution
or liquidation proceedings are commenced by or against Licensor and, as to
such case or proceeding not commenced by Licensor, is acquiesced in or remains
undismissed for sixty (60) days.
(c) Licensor fails to cure a material breach of its obligations
under Paragraphs 4.1 ("Updates") or 6.2 ("Potential Function Numbers") of the
Agreement within thirty (30) days of written notice thereof from Licensee.
(d) The death or disability of Michael Levitt, the president and
sole shareholder of Licensor, prevents Licensor's continued compliance with
its obligations pursuant to the paragraphs of the Agreement referred to in
clause (c) above.
8. INDEMNIFICATION. Licensor and Licensee jointly and severally
agree to defend and indemnify Escrow Agent and to hold Escrow Agent harmless
from and against any and all claims, actions and suits, whether groundless or
otherwise, and from and against any and all liabilities, losses, damages,
costs, charges, penalties, counsel fees, and any other expense of any other
nature, including, without limitation, settlement costs incurred by Escrow
Agent on account of any act or omission of Escrow Agent, in respect of or with
regard to this Escrow Agreement, except insofar as such liabilities arise by
reason of Escrow Agent's willful misconduct.
9. LICENSE GRANT FOR USE OF SOURCE CODE, CONFIDENTIALITY.
(a) Licensee's license described in Paragraph 6.4 ("Escrow
License") of the Agreement shall be effective upon the rightful release (in
accordance herewith) to Licensee of Source Code.
(b) Licensee acknowledges and agrees that use of the Source Code
is furnished to Licensee on a confidential and secret basis for the sole and
exclusive use of Licensee, and not for sale, sublicense or disclosure to third
parties. In the event that Licensee obtains the Source Code pursuant to the
terms hereof, Licensee agrees to treat the Source Code as Licensee
confidential information governed by Paragraph 8.2 ("NonDisclosure") of the
Agreement.
10. RECORDS. Escrow Agent agrees to keep complete written records of
the activities undertaken and materials prepared and delivered to Escrow Agent
pursuant to this Escrow Agreement. Licensor and Licensee shall be entitled at
reasonable times during normal business hours and upon reasonable notice to
Escrow Agent during the term of this Escrow Agreement to inspect the records
of Escrow Agent with respect to the Source Code. Licensor shall be entitled
upon reasonable notice to Escrow Agent and during normal business hours to
inspect the facilities of Escrow Agent with respect to the physical status and
condition of the Source Code.
11. TERMINATION.
(a) This Escrow Agreement shall continue indefinitely until
terminated as set forth below or by operation of law. Upon such termination,
except for termination as a result of rejection of the Agreement in a
bankruptcy case of Licensor, Escrow Agent shall return the Deposit to Licensor
after the payment of all costs, fees and expenses due Escrow Agent.
(b) Licensee may unilaterally terminate this Escrow Agreement
upon sixty (60) days written notice to Escrow Agent.
(c) Escrow Agent reserves the right to resign as Escrow Agent
either upon sixty (60) days prior written notice to Licensor and Licensee or
(ii) upon ten (10) days prior written notice to Licensor and Licensee in the
event that (x) Escrow Agent has received Contrary Instructions from Licensor
and (y) Escrow Agent has turned the Deposit over to National Safe Depository
(located at 3585 Stevens Creek Boulevard, San Jose, California 95117) or such
other successor escrow agent as is acceptable to Licensor and Licensee. No
entity shall be qualified to be a successor escrow agent unless such entity is
willing and able, not later than the transfer of the Deposit to such successor
escrow agent, to enter into a written escrow agreement with Licensor and
Licensee containing provisions substantially equivalent to those hereof;
provided, however, that such successor agreement may, in lieu of subparagraph
(a) of Paragraph 13 ("Fees") hereof, provide for Licensor and Licensee to
jointly bear such successor escrow agent's usual and reasonable fees for
escrow services. When Escrow Agent has transferred the Deposit to such
successor escrow agent, Escrow Agent shall have no further obligations
hereunder but shall remain entitled to receive payment of any unpaid fees and
costs pursuant to Paragraph 13 ("Fees") of this Escrow Agreement.
(d) In the event that the applicable notice period in
Paragraph 11(c) elapses without Escrow Agent having received payment from
either Licensor or Licensee of the remaining fees due, Escrow Agent shall then
have the option, without further notice to either party, to terminate the
Escrow Agreement and to destroy the Deposit.
12. GOOD FAITH RELIANCE. Escrow Agent may rely and act upon any
instruction, instrument, or signature believed in good faith to be genuine,
and may assume that any person purporting to give any writing, notice,
respect, advice, or instruction in connection with or relating to this Escrow
Agreement has been duly authorized to do so.
13. FEES.
(a) Escrow Agent agrees to perform its normal services hereunder
without fee; provided, however, that if Escrow Agent is required to perform
any additional or extraordinary services as a result of being Escrow Agent,
including intervention in any litigation or proceeding, Licensor and Licensee
shall be jointly and severally obligated to pay Escrow Agent reasonable
compensation for such services and to reimburse Escrow Agent for such costs
incurred, including reasonable attorney's fees.
(b) Escrow Agent shall be entitled to receive payment of all
costs, fees and expenses due it, prior to release of the Deposit.
14. ENTIRE AGREEMENT. This Escrow Agreement and the Agreement,
including the Exhibits hereto, constitutes the entire agreement among the
parties regarding the subject matter hereof, and shall supersede all previous
and contemporaneous communications, representations, understandings and
agreement, either oral or written between the parties.
15. NOTICE. All notices required or permitted by this Escrow
Agreement shall be sufficiently served by mailing the same by certified or
registered mail, return receipt requested, to the parties at their respective
addresses, as follows:
(a) Escrow Agent:
Townsend & Townsend
Attention: George M. Schwab, Esq., Managing
Partner
379 Lytton Avenue
Palo Alto, California 94303
(b) Licensor:
Molecular Applications Group
c/o Michael Levitt, President
880 Lathrop
Stanford, California 94305
(c) Licensee:
Protein Design Labs, Inc.
2375 Garcia Avenue
Mountain View, California 94043
Attention: President
16. COUNTERPARTS. This Escrow Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
taken together shall constitute one and the same instrument.
17. GOVERNING LAW. This Escrow Agreement shall be governed by and
construed according to the internal laws of the State of California without
application of the principles of choice of law or conflict of laws.
18. SEVERABILITY. In the event any of the provisions of this Escrow
Agreement shall be held by a court of competent jurisdiction to be contrary to
any state or federal law, the remaining provisions of this Escrow Agreement
will remain in full force and effect.
19. HEADINGS. The section headings in this Escrow Agreement do not
form a part of it, but are for convenience only and shall not limit or affect
the meaning of the provisions.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement on
the date first above written.
LICENSOR:
Molecular Applications Group
By:
Michael Levitt, President
PDL:
Protein Design Labs, Inc.
By: /s/ Laurence Jay Korn
------------------------
Laurence Jay Korn, President
ESCROW AGENT:
Townsend & Townsend
By:
George M. Schwab, Esq.
Managing Partner
EXHIBIT 10.15
CONFIDENTIAL TREATMENT REQUESTED
DEVELOPMENT AND LICENSE AGREEMENT
FOR HUMANISED [ ]
between
PROTEIN DESIGN LABS, INC.
and
SANDOZ PHARMA LTD.
CONFIDENTIAL TREATMENT REQUESTED
DEVELOPMENT AND LICENSE AGREEMENT
This Agreement effective as of December 1, 1990 between PROTEIN DESIGN
LABS, INC., a Delaware corporation having offices at 2375 Garcia Avenue,
Mountain View, CA 94043, USA (hereinafter "PDL") and SANDOZ PHARMA LTD, a
Swiss corporation having offices at CH-4002, Basle, Switzerland (hereinafter
"SANDOZ").
WHEREAS, SANDOZ has been granted exclusive worldwide license by [ ]
USA (hereinafter [ ] ) to make, have made, use or sell a proprietary murine
monoclonal antibody referred to under the SANDOZ internal code as [ ]
(hereinafter[ ] ) or derivatives thereof, including any humanized derivative
thereof (hereinafter "Humanized [ ] Antibody").
WHEREAS, SANDOZ wishes to engage PDL to develop a Humanized [ ]
Antibody; and
WHEREAS, PDL is willing to undertake such development effort and to
grant to SANDOZ an exclusive worldwide license to such Humanized [ ]
Antibody.
NOW THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound, the parties agree as follows:
ARTICLE 1
DEFINITIONS
The following terms, as used herein, shall have the following meanings:
1.01 "Affiliate," with respect to a party hereto, shall mean a
corporate or other entity which, directly or indirectly, controls, is
controlled by, or is under common control with such party; "control" shall
mean the ownership of not less than 50% of the voting shares of the
corporation, or decision-making authority as to an unincorporated entity; and
any corporations in which the maximum amount of stock permitted by law to be
held by another entity is beneficially owned by SANDOZ shall also be
considered as Affiliates of SANDOZ.
1.02 "Calendar Half Year" shall mean each six month period, or any
portion thereof, ending June 30 and December 31 during the Term of this
Agreement. "Interim Calendar quarter" shall mean each three month period, or
any portion thereof ending on March 31, and September 30, during the Term of
this Agreement.
1.03 "Hybridoma Cell Line" shall mean a hybridoma cell line producing [
] in sufficient quantity to enable PDL to undertake its duties and obligations
under this Agreement.
1.04 "Licensed Products" shall mean products, for any use,
incorporating all or at least one variable region of one or more [ ]
Antibodies (as defined in Article 2.3 hereinafter) or Humanized [ ]
Antibodies developed by PDL in pursuance of this Agreement.
1.05 "Net Sales Value" shall mean the aggregate gross revenues whether
in cash or in kind derived by or payable from or on account of the sale of
Licensed Products, less an allowance of [ ] to cover factors such as
(a) credits or allowances, if any, actually granted on account of price
adjustments, recalls, rejection or return of items previously sold, (b) excise
and sales taxes, duties or other taxes imposed on and paid with respect to
such sales (excluding income or franchise taxes of any kind) and (c) freight
and freight insurance costs.
1.06 "Technical Information" shall mean confidential proprietary
technical information, know-how and materials owned by [ ], SANDOZ or PDL on
the date hereof, or hereinafter developed by SANDOZ, [ ] or PDL in
connection with this license and relating to the Hybridoma Cell Line, [ ]
or Humanized [ ] Antibody(ies) or their manufacture or use for any
purpose.
ARTICLE 2
DEVELOPMENT PROGRAM
2.01 Immediately upon execution of this Agreement, SANDOZ shall provide
to PDL a sufficient quantity of a Hybridoma Cell Line together with any
Technical Information which in the judgment of SANDOZ and PDL would be useful
in assisting PDL to accomplish the objectives of this Agreement and which
SANDOZ is legally free to disclose. PDL specifically acknowledges and accepts
that the Hybridoma Cell Line and any [ ] Technical Information transferred
are the sole property of [ ] and that, while [ ] has agreed to such
transfer, it has done so solely for the purposes of accomplishing the
objectives of this Agreement. Upon completion of the development work
contemplated under this Agreement or termination of this Agreement, whichever
is earlier, any and all quantities of the Hybridoma Cell Line in the
possession of PDL shall immediately be returned to SANDOZ. In addition, PDL
shall clearly identify in its records that any Hybridoma Cell Line provided
hereunder is the property of [ ] and is to be returned to SANDOZ.
2.02 Upon receipt of the Hybridoma Cell Line, PDL shall immediately
commence and diligently pursue on a best efforts basis a development program
(hereinafter "Program") to apply its proprietary humanization technology with
the objective of producing a Humanized [ ] Antibody having substantially
equivalent therapeutic properties but presumably having, inter alia, reduced
immunogenicity and/or an increased half-life. SANDOZ will, primarily through
its Affiliates Sandoz Research Institute, Vienna, Austria (hereinafter "SFI"),
cooperate in those efforts and in particular will be responsible for
pharmacological and other evaluation of antibodies developed by PDL as
contemplated under the Program.
2.03 The Program will be sub-divided into four Phases as follows:
Phase A. [ ] Antibody Production. In the first Phase of the
Program, PDL will prepare and provide to SFI sufficient quantities (with > 90%
purity and having an endotoxin level < 50 units/mg) of two [ ] antibodies,
one of IgG1 and the other of IgG3 isotype (herein "[ ] Antibodies"), for
evaluation. A quantity of from 1 to 10 mg of each antibody may be required by
SFI. PDL will also disclose to SFI the determined sequence of [ ].
Phase B. Evaluation of [ ] Antibodies. In this second Phase of
the Program, SFI will evaluate the two [ ] antibodies provided by PDL to
determine which, if any, of the two isotypes it wishes PDL to pursue in the
following Phases of the Program. SFI will promptly advise PDL to its decision
in this respect.
In parallel, PDL will during this Phase, commence and pursue the
molecular modeling activities believed by PDL to be necessary for successful
completion of the remaining Phases of the Program. It shall not however
embark on Phase C of the Program until receiving SFI's decision referred to
above.
Phase C. Humanized [ ] Antibody Production and Evaluation. In
this third phase of the Program, and following the SFI decision referred to
under Phase B, PDL will carry out the necessary further program to produce a
Humanized [ ] Antibody having a tumor binding affinity constant not more
than [ ] times lower than that of [ ] (hereinafter the "Desired Binding
Affinity") and will supply SFI with a sufficient quantity (with > 90% purity
and having an endotoxin level < 50 units/mg) of that antibody for evaluation.
SFI shall promptly conduct such evaluation using, if technically possible, the
method of competitive binding set forth in Queen, et al., Proceedings of the
National Academy of Science, USA, 86,1030 (1989). If it is not technically
possible to use the method set forth in Queen, et al., the parties shall
consult in good faith to agree upon a mutually acceptable alternative method.
The results of such tests shall be promptly communicated to PDL and all
written results will be provided to PDL as soon as practicable. In the event
that the supplied antibody does not meet the Desired Binding Affinity and is
in the SFI's view not sufficiently close thereto, SFI shall inform PDL
accordingly. PDL shall then have the obligation to produce one further
Humanized [ ] Antibody which it hopes does meet the Desired Binding Affinity
and shall supply SFI with sufficient quantity of that antibody for evaluation
as set forth above. The quantity of each antibody required by SFI for
evaluation under this Phase C may be approximately [ ] mg.
Phase D. Expression Optimization.
(a) In the event that SFI determines that a supplied Humanized [
] Antibody meets the Desired Binding Affinity, or is sufficiently close
thereto for SFI to wish to proceed with that antibody further, it shall so
inform PDL. PDL will then optimize the expression process and producer cell
line having the Desired Process and Cell Line Characteristics as
defined below to achieve a production yield of at least [ ] mg/106 cells/24
hours measured under standard tissue culture conditions. It will then
transfer to SFI the production process and the
producer cell line. The production process shall be scaleable and
adaptable to pilot production and the cell line shall be sterile (but free of
chemical sterilizers), and mycoplasma-free (hereinafter "Desired Process and
Cell Line Characteristics"). It is anticipated that the Program will be
completed to this point in approximately 6 months.
(b) PDL will use its best efforts over a period of approximately
three months to perform further amplification(s) to increase the production
yield to at least [ ] mg/106 cells/24 hours measured under standard tissue
culture conditions, and will provide to SFI the modified production process
and producer cell line having the Desired Process and Cell Line
Characteristics and being adaptable to growing serum free. After delivering
this cell line, PDL will use its best efforts to develop a clone of such
producer cell line which, according to appropriate tests and analysis
performed by PDL, allows stable production at such yields for at least two
months. PDL shall provide to SFI such producer cell line. SANDOZ
acknowledges that while PDL will exert best efforts in this Phase D(b), SANDOZ
recognizes that there is no guarantee that PDL will achieve the yields and
other requirements specified herein.
(c) In the event that SFI informs PDL that it wishes to proceed
with further evaluation with a view to possible development of a [ ]
Antibody delivered by PDL under Phase A of the Program, PDL will perform the
steps set forth in sub-paragraphs (a) and (b) above to optimize the expression
process and producer cell line for that [ ] Antibody, and shall transfer to
SFI the expression processes and producer cell lines, which shall have the
Desired Process and Cell Line Characteristics.
ARTICLE 3
OWNERSHIP AND EXPLOITATION OF RESULTS
3.01 Each [ ] or Humanized [ ] Antibody, its production processes
and its producer cell line developed by PDL under this Agreement, as well as
all results of pharmacological, toxicology and other tests and evaluations
relating thereto, shall be the exclusive property of SANDOZ who shall be free
to deal with them as it sees fit, subject to any rights of third parties and
SANDOZ' obligations of confidentiality hereunder. SANDOZ shall also have the
right to seek and obtain patent protection in relation thereto as it sees fit
(subject to such rights and obligations) and at its own cost, without
prejudice however to the right of involved PDL collaborator(s) to be named as
inventor(s) or co-inventor(s). PDL will provide all necessary assistance and
Technical Information to SANDOZ in the event that SANDOZ wishes to seek such
patent protection.
3.02 Otherwise, Technical Information developed or used by PDL in
pursuance of the Program under this Agreement, shall remain the property of
PDL. It shall, however, be provided by PDL to SANDOZ and may be used by
SANDOZ to the extent necessary to enable SANDOZ to effectively develop, seek
marketing approval for, manufacture and market any Licensed Product developed
by PDL under this Agreement, subject however to the confidentiality
obligations set forth herein. Notwithstanding the foregoing, no information
regarding the sequence of or expression system for any Licensed Product need be
disclosed to SANDOZ by PDL until PDL has received the Second Benchmark Payment
provided for hereinafter.
3.03 Conditioned upon and effective on the date of receipt by PDL of
both the First and Second Benchmark Payments provided for hereinafter, PDL
hereby grants to SANDOZ and its Affiliates an irrevocable, exclusive worldwide
license or, as the case may be, sub-license, with the right to grant sub-
licenses, under all relevant existing patent or other proprietary rights
owned, controlled by or licensed to PDL as of the effective date of this
license (including the license from the Medical Research Council of England
("MRC") under the so-called Winter and Boss patents), and under all future
patent or other proprietary rights resulting from the development work
performed by PDL under the Program, but only to the extent necessary and only
for the purpose of enabling SANDOZ to make, have made, use or sell any
Licensed Product developed under this Agreement.
3.04 Any grant by SANDOZ of sublicenses of the rights granted in
Article 3.03 shall be subject to the prior written consent of PDL, which
consent shall not be unreasonably withheld. Any grant by SANDOZ of further
sublicenses under the sublicenses received from PDL shall also be subject to
the terms and conditions (except with regard to royalties which are governed
by the terms of Article 5 hereinafter) of the license agreement between PDL
and its licenser.
3.05 Until the date of receipt by PDL of both of the First and Second
Benchmark Payments provided for hereinafter, SANDOZ agrees that it will not
sequence or attempt to sequence the Humanized [ ] Antibody(ies). After
receipt however, of both the First and Second said Benchmark Payments, PDL
shall promptly disclose to SANDOZ the sequence of and expression system for,
the Humanized [ ] Antibody(ies).
ARTICLE 4
PAYMENTS
4.01 Payment on Execution.
On or before December 20, 1990, Sandoz shall pay to PDL the sum of US
[ ] in partial consideration of PDL's obligations hereunder.
4.02 First Benchmark Payment.
(a) Within 90 days following delivery to SANDOZ of SFI of a
producer call line and production process having the desired Process and
Cell Line Characteristics and with a production yield of at least [ ]
mg/106 cells/24 hours measured under standard tissue culture conditions
for a Humanized [ ] Antibody having the Desired Binding Affinity (or
such lesser binding affinity as it had when SANDOZ decided to proceed
with that antibody under Phase D of the Program), SANDOZ shall pay to
PDL the sum of US [ ].
(b) In the event that the producer cell line or Humanized [ ]
Antibody delivered under Article 4.02(a) do not meet the production
yield, binding affinity, or other requirements set forth above, but
SANDOZ nevertheless decides to proceed to develop such Humanized [ ]
Antibody, SANDOZ shall be required to pay PDL the First Benchmark
Payment prior to so proceeding. For purposes of this Agreement, SANDOZ
shall be deemed to be "proceeding to develop" such antibody on the
earlier of (i) the declaration of so-called [ ] in the standard
SANDOZ development plan for its pharmaceutical research products, or
equivalent status, for such antibody, or (ii) [ ] months after
delivery of such antibody by PDL to SANDOZ unless, prior to the
expiration of such [ ]-month period, SANDOZ shall have terminated this
Agreement pursuant to Article 8 hereof.
(c) In the event the First Benchmark Payment is not payable to
PDL because the Humanized [ ] Antibodies delivered do not meet the
relevant requirements, and SANDOZ decides to proceed to develop a [ ]
Antibody delivered by PDL under Phase A of the Program, SANDOZ shall be
required to pay PDL the sum of US [ ] prior to so proceeding. For
purposes hereof, "proceeding to develop" shall have the same meaning as
set forth in subparagraph (b) above.
4.03 Second Benchmark Payment.
In the event that SANDOZ decides to proceed with further development
of any Licensed Product for which the First Benchmark Payment referred to
under Article 4.02 has been paid or is payable, it shall pay to PDL the sum of
US [ ] with respect to a Humanized [ ] Antibody. With respect to a [ ]
Antibody, SANDOZ shall pay PDL the sum of US [ ] within 30 days of SANDOZ'
decision to manufacture the first batch of that Antibody for Phase I clinical
trials if:
a) the First Benchmark Payment under Paragraph 4.02(a) has not been
paid; or
b) PDL has performed the work under both Phase D(b) and (c).
PDL understands and accepts that the decision to further proceed with
development of any such antibody is entirely at SANDOZ discretion and may
depend on many factors, including (but not limited to) the degree to which
that antibody retains the effector activity of [ ], its specificity, its
pharmacokinetics and immunogenicity in animals and the final production yield
of the production process and producer cell line delivered by PDL at the end
of Phase D of the Program.
ARTICLE 5
ROYALTIES, PAYMENTS, REPORTS
5.01 Royalties to PDL.
In further consideration of the rights and licenses granted hereunder,
SANDOZ shall pay to PDL a royalty of [ ] of the Net Sales Value of all
Licensed Products sold by SANDOZ or its Affiliates or sublicensees for a
period of [ ] years from the date of first sale of any Licensed Product in
each country. In the event that SANDOZ desires to sublicense its rights
hereunder and finds that, despite its good faith best efforts, it is unable to
do so solely because of this royalty rate, the parties shall negotiate in good
faith to reduce such rate to a rate which is economically beneficial to both
parties and permits such sublicensing.
5.02 [_____.]
[ ] or sublicensees under sublicenses granted by PDL under
Article 3.3 above.
[ ]
5.03 Sales Among Affiliates.
Sales between and among SANDOZ and its Affiliates of Licensed products
which are subsequently resold or to be resold by such Affiliates shall not be
subject to royalty, but in such cases royalties shall accrue and be calculated
on the basis of sales by any such Affiliate of Licensed Products to a non-
Affiliate.
5.04 Combination Products.
If a Licensed Product is sold in a combination containing another or
other biologically active therapeutic ingredient(s) which are not Licensed
Products, then Net Sales Value for purposes of determining royalty payments on
the combination shall be calculated by multiplying the Net Sales Value of the
combination by a fraction, the numerator of which shall be the established
market price for the Licensed Product contained in the combination and the
denominator of which shall be the sum of the established market prices for the
Licensed Product and each other biologically active therapeutic ingredient in
the combination. When separate market prices for such ingredients are not
established, then the parties shall negotiate in good faith to determine a
fair and equitable method of calculating Net Sales Value for the combination.
5.05 Payments.
Liability for royalties on Licensed Products manufactured by SANDOZ
and/or its Affiliates or Sub-licensees shall accrue when a Licensed Product is
sold subject to Section 5.3 hereof. Royalties which have accrued in any
Calendar Half Year shall be payable within 60 days after the end of such
Calendar Half Year. In addition, within 60 days of the last day of each
Interim Calendar Quarter, SANDOZ shall pay to PDL an amount equal to
one half of the royalties paid for the preceding Calendar Half Year. A
payment made during an Interim Calendar Quarter shall be deducted from the
amount due in the next Calendar Half Year royalty payment. If the payment in
the preceding Interim Calendar Quarter exceeds a Calendar Half Year royalty
payment, a credit equal to the excess payment will be carried forward to
offset future Calendar Half Year royalty payments.
5.06 Currency Conversion.
All amounts payable to PDL under this Agreement shall be payable in
U.S. Dollars, at PDL's option either by a check payable to the order of PDL
and drawn on a U.S. bank, or by wire transfer to a bank account designated by
PDL. In the case of royalties on sales, all amounts payable shall first be
calculated in the currency of sale and then converted into U.S. Dollars using
the average of the daily exchange rates for such currency quoted by Citibank
N.A.'s foreign exchange desk for each of the last thirty (30) banking days of
each Calendar Half Year.
5.07 Royalty Reports; Inspection.
Each Calendar Half Year royalty payment shall be accompanied by a
written report for the applicable period setting forth SANDOZ' computation of
royalties due under this Agreement in respect of sales by SANDOZ, its
Affiliates and any sublicensee during the applicable Calendar Half year.
SANDOZ shall keep, and shall cause its Affiliates and sublicensees to keep,
accurate records and books of account of all Licensed products sold for a
prior of at least 3 years following the date of such sale. Upon reasonable
notice to SANDOZ and during normal business hours, but not more frequently
than once a year, an independent Certified Public Accountant paid for and
selected by PDL and approved by SANDOZ, such approval not to be unreasonably
withheld, may inspect such books and records under this Agreement.
Notwithstanding the foregoing, if a material discrepancy of more than 5% or
$5,000 (whichever is greater) in SANDOZ' favor is found between royalties paid
and actual royalties due for any Calendar Half Year, all costs of such
inspection shall be borne by SANDOZ. Following any such inspection, the
parties shall make any adjustments necessary in respect of royalties
previously paid to PDL.
ARTICLE 6
WARRANTIES; NO WARRANTIES, INDEMNIFICATION
6.01 Warranties.
The parties warrant that they know of no legal reason to prevent them
entering into this Agreement. In addition, PDL warrants that it knows of no
reason why its humanization technology should not be sufficiently applicable
to [ ] to achieve the objectives of this Agreement.
6.02 No Warranties.
PDL makes no representations or warranties, expressly or impliedly
(except as specifically set forth or contemplated herein) with respect to any
producer cell line or production process or Humanized [ ] Antibody delivered
to SANDOZ under this Agreement. In particular, PDL makes no representations
or warranties as to the merchantability or fitness for any particular purpose
of any such Antibody or that its manufacture, use or sale will not infringe
any patent or other proprietary rights other than those licensed or sub-
licensed hereunder.
6.03 Indemnification.
SANDOZ will indemnify and hold PDL harmless against any and all
liability, loss, damage, claim or expense (including reasonable attorney's
fees) resulting from any use, testing, manufacture, packaging, labeling, or
sale by SANDOZ, its Affiliates or its sublicensees of any producer cell line
or production process transferred to SANDOZ (or its Affiliates) by PDL under
this Agreement or of any Licensed Product, provided that such damage, claim or
expense has not been caused by any gross negligence of PDL. In the event that
it has been caused by such gross negligence, PDL shall correspondingly
indemnify SANDOZ and its Affiliates and Sublicensees.
ARTICLE 7
CONFIDENTIALITY
7.01 Confidentiality.
Each party shall keep confidential, and shall not use for any purpose
other than the development and commercial exploitation of Licensed Products
developed by PDL hereunder, during the term of this Agreement and for five
years after termination hereof, all Technical Information heretofore and
hereafter supplied by the other, provided however, that the foregoing
obligation of confidentiality shall not apply to the extent that any Technical
Information:
(a) is already known to the recipient at the time of disclosure
or is developed by recipient thereafter in the course of work entirely
independent of any disclosure by the other party;
(b) is publicly known prior to or becomes publicly known after
disclosure other than through acts or omissions of the recipient; or
(c) is disclosed in good faith to recipient by a third party
under a reasonable claim or right.
In addition, disclosure may be made by SANDOZ or its Affiliates
(i) to governmental agencies to the extent required or desirable to
secure governmental approval of the development or marketing of Licensed
Products provided that all reasonably possible steps are taken by SANDOZ
to assure the confidentiality of the
information in the hands of such agencies, (ii) to pre-clinical
and clinical investigators under a secrecy agreement with essentially
the same confidentiality provisions contained herein and then only where
necessary for SANDOZ to exercise its rights hereunder and (iii) to
others to the extent necessary in order to enable SANDOZ and its
Affiliates effectively and skillfully to develop, manufacture or market
a Licensed Product, to the extent normal and usual in the custom of the
trade, and then only under a secrecy agreement with essentially the same
confidentiality provisions contained herein. SANDOZ shall be
responsible for any breach of these confidentiality obligations by the
parties identified in clauses (ii) and (iii).
ARTICLE 8
TERM AND TERMINATION
8.01 Term.
This Agreement shall come into force on the date first set forth above
and shall unless terminated earlier in accordance with this Article 8 continue
until expiration of the obligation to pay royalties to PDL, or to MRC or other
third parties through PDL, in accordance with Article 5 above, whichever is
later. Thereafter, this Agreement shall terminate and all licenses or sub-
licenses granted hereunder shall become fully paid-up, irrevocable non-
exclusive licenses.
8.02 Termination.
8.02.1 This Agreement may be terminated on 60 days prior
written notice by SANDOZ in the event that PDL does not exert its best
efforts (to be determined in case of dispute by Arbitration in
accordance with Article 9.01 hereinafter) as required by Article 2.02
above.
8.02.2 This Agreement may also be terminated immediately on
written notice by SANDOZ in the event that (a) it decides in accordance
with Article 2.03 that it does not wish to pursue either of the isotypes
provided to it by PDL following Phase A of the Program or (b) neither of
the Humanized [ ] Antibodies provided to it by PDL following Phase C
of the Program meet the Desired Binding Affinity or come sufficiently
close thereto for SANDOZ to wish to further pursue this Agreement.
8.02.3 If either party shall at any time default in the
payment of any royalty, or the making of any report hereunder, or shall
commit any material breach of any covenant or agreement herein contained
or shall make any false report, and shall fail to have initiated and
actively pursued remedy of any such default or breach within 60 days
after receipt of written notice thereof by the other party, that other
party may, at its option, cancel this Agreement and revoke any rights
and licenses herein granted and directly affected by the default or
breach by notice in writing to such effect, but such act shall not
prejudice the right of the party giving notice to recover any royalty or
other sums due at the time of such cancellation, it being understood,
however, that if within 60 days after receipt of any such notice the
receiving party shall have initiated and actively pursued remedy of its
default, then the rights and licenses herein granted shall remain in
force as if no breach or default had occurred on the part of the
receiving party, unless such breach or default is not in fact remedied
within a reasonable period of time.
8.02.4 Either party may terminate this Agreement, and the
licenses granted herein, in the event that: (1) the other party becomes
insolvent or enters in any arrangement or composition with creditors, or
makes an assignment for the benefit of creditors; (2) there is a
dissolution, liquidation or winding-up of the other party's business; or
(3) a trustee in bankruptcy of the assets of the other party is
appointed and such trustee does not, within thirty (30) days after
receipt of written notice from the other party, confirm this Agreement
and provide adequate assurance that the terms and conditions hereof
shall faithfully be fulfilled.
8.02.5 The right of either party to terminate this Agreement
as hereinabove provided shall not be affected in any way by its waiver
of, or failure to take action with respect to, any previous failure to
perform hereunder.
8.02.6 The confidentiality and indemnity obligations and any
accrued payment obligations under Articles 4, 5, 6.03 and 7 shall
survive any termination of this Agreement.
ARTICLE 9
MISCELLANEOUS
9.01 Force Majeure.
Neither party shall be responsible to the other for failure or delay
in performing any of its obligations under this Agreement or for other non-
performance hereof provided that such delay or non-performance is occasioned
by a cause beyond the reasonable control and without fault or negligence of
such party, including, but not limited to fire, flood, explosion,
discontinuity in the supply of power, court order or governmental
interference, act of God, strike or other labor trouble and provided that such
party will immediately inform the other party and that it will entirely
perform its obligations immediately after the relevant cause has ceased its
effect.
9.02 Validity.
Should one or several provisions of the Agreement be or become
invalid, then the parties hereto shall substitute such invalid provisions by
valid ones, which in their economic effect come so close to the invalid
provisions that it can be reasonably assumed that the parties would have
contracted this Agreement with those new provisions. In case such provisions
cannot be found, the invalidity of one or several provisions of the Agreement
shall not affect the validity of the Agreement as a whole, unless the invalid
provisions are of such essential importance for this Agreement that it is to
be reasonably assumed that the parties would not have contracted this
Agreement without the invalid provisions.
9.03 Arbitration.
Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, which cannot be satisfactorily resolved by the parties
by correspondence or mutual conference shall be determined by arbitration in
London, England, or such other venue as may be mutually agreed upon, under the
then prevailing rules of the International Chamber of Commerce; provided
however, that if any issue in dispute involves scientific or technical
matters, the arbitrator(s) chosen shall have educational training and/or
experience sufficient to demonstrate a reasonable level of knowledge in the
field of biotechnology. The decision of the arbitrators shall be final and
binding and any party may apply for judgment upon the award rendered by the
arbitrator(s) in a court having jurisdiction thereover.
9.04 Notices.
All notices, documents, statements, reports and other writings
required or permitted to be given by the terms of this Agreement shall be sent
either by pre-paid, registered or certified mail, telegram, telecopier or
telex, properly addressed to PDL and to SANDOZ at their respective addresses
first given above or at such other address as one party hereto may from time
to time designate by notice in writing to the other. Each notice shall be
deemed to be given upon receipt.
9.05 Governing Law.
This Agreement shall be subject to the laws of California, United
States of America.
9.06 Entire Agreement.
This Agreement embodies the entire understanding of the parties
relating to the subject matter hereof and supersedes all prior understandings
and agreements, except that certain Confidentiality Agreement dated November
17, 1988 and that certain Confidentiality Disclosure Agreement dated October
18, 1990 between the parties, which shall survive. No modification or
amendment of this Agreement shall be valid or binding except by a writing
signed by each of the parties.
9.07 Assignment.
The rights of either party under this Agreement may not be assigned,
and the duties of either party under this Agreement may not be delegated,
without the prior written consent of the other party, which consent shall not
be unreasonably withheld.
9.08 Headings.
Any headings and captions used in this Agreement are for convenience
and reference only and are not a part of this Agreement.
9.09 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and such counterparts together shall
constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have dully executed this
Development and License Agreement as of the date first above written.
PROTEIN DESIGN LABS
By: /s/ Laurence Jay Korn
Title: President
SANDOZ PHARMA LTD.
By: /s/ xxxxx /s/ xxxxx
Title: Vice President Research/Vice
President Patents
EXHIBIT 10.16
CONFIDENTIAL TREATMENT REQUESTED
DEVELOPMENT AND LICENSE AGREEMENT
FOR HUMANIZED MONOCLONAL ANTIBODIES AGAINST gpllb/llla
between
PROTEIN DESIGN LABS, INC.
and
YAMANOUCHI PHARMACEUTICAL COMPANY, LTD.
DEVELOPMENT AND LICENSE AGREEMENT
Effective 12 February 1991 ("Effective Date"), PROTEIN DESIGN LABS,
INC., a Delaware corporation having offices at 2375 Garcia Avenue, Mountain
View, CA 94043 USA ("PDL") and YAMANOUCHI PHARMACEUTICAL CO., LTD., a Japanese
corporation having offices at No. 1-8 Azusawa 1 -chome, Itabashi-ku, Tokyo 174
Japan ("YAMANOUCHI") agree as follows:
1. BACKGROUND
1.1 YAMANOUCHI owns rights to make, have made, use or sell a
proprietary murine monoclonal antibody against gpllb/llla ("Murine Anti-
gpllb/llla Antibody").
1.2 YAMANOUCHI wishes to have developed humanized derivatives of
a Murine Anti-gpllb/llla Antibody, including F(ab')2 and Fab fragments
thereof (collectively "Humanized Anti-gpllb/llla Antibody").
1.3 PDL is willing to undertake such development effort and to
grant to YAMANOUCHI an exclusive worldwide license under PDL's patent
applications and other proprietary rights to such Humanized Anti-
gpllb/llla Antibody.
2. DEFINITIONS
2.1 "Background Patents" means all patent applications and
issued patents in the United States or any foreign jurisdictions,
including any addition, continuation, continuation-in-part or division
thereof or any substitute application based on U.S. Patent Application
S.N. 310,252 filed February 13, 1989 entitled "Designing Improved
Humanized Immunoglobulins."
2.2 "Exclusive Period" means the term beginning as of the
Effective Date and either:
(a) ending on the later of January 1, 1995 or one year
after the last payment pursuant to Paragraph 5.6.1 (a), (b), (c)
and (d); or
(b) becoming perpetual upon the payment specified in
Paragraph 5.6.1 (e).
The Exclusive Period defines the period during which PDL agrees not to
humanize any other murine antibody against the target antigen gpllb/llla as
provided in Paragraph 4.6 hereof.
2.3 "gpllb/llla" means the antigens gpllb and gpllla, together
including their complex, or separately.
2.4 "Hybridoma Cell Line" means a hybridoma cell line producing
Murine Anti-gpllb/llla Antibody in sufficient quantity to enable PDL to
undertake its duties and obligations under this Agreement.
2.5 "Licensed Patents" means all patent applications and issued
patents in the United States or any foreign jurisdictions, including any
addition, continuation, continuation-in-part or division thereof or any
substitute application claiming the Humanized Anti-gpllb/llla Antibody.
2.6 "Licensed Products" means products, for any use,
incorporating any Humanized Anti-gpllb/llla Antibody, including all or
any part thereof, whether or not developed by PDL under this Agreement.
2.7 "Net Sales" means the gross invoice price charged by
YAMANOUCHI for any Licensed Product sold to third parties in bona fide
arm's length transactions less the following deductions as incurred by
YAMANOUCHI:
(a) discounts and rebates;
(b) returns;
(c) charges of transportations, insurance and packing; and
(d) duties and taxes assessed on sales.
2.8 "Non-Exclusive Period" means the term, if any, beginning the
later of January 1, 1995 or one year after the last payment pursuant to
Paragraphs 5.6.1(a), (b), (c) and (d) and ending on the termination or
expiration of the Agreement. Once the payment of Paragraph 5.6.1(e) is
paid, there is no Non-Exclusive Period under this Agreement.
2.9 "Technical Information" means confidential proprietary
technical information, know-how and materials owned by YAMANOUCHI or PDL
as of the Effective date, or hereinafter developed by YAMANOUCHI or PDL
in connection with this Agreement and relating to the Hybridoma Cell
Line or Humanized Anti-gpllb/llla Antibody or their manufacture or use
for any purpose. In particular, the producer cell line(s) developed by
PDL under this Agreement is PDL Technical Information.
2.10 "YAMANOUCHI" is understood to include all of its Affiliates.
An "Affiliate" means any corporation or other business entity controlled
by, controlling or under common control with YAMANOUCHI; "control" means
direct or indirect beneficial ownership of at least 50% of the voting
shares of a corporation or any corporation in which the maximum amount
of stock permitted by law is beneficially owned by YAMANOUCHI.
3. DEVELOPMENT
3.1 Delivery of Hybridoma Cell Line.
Immediately upon execution of this Agreement, YAMANOUCHI shall.
provide to PDL a sufficient quantity of a Hybridoma Cell Line together
with any Technical Information which in the judgment of YAMANOUCHI and
PDL would be useful in assisting PDL to accomplish the objectives of
this Agreement. Upon completion of the development work contemplated
under this Agreement or termination of this Agreement, which ever is
earlier, any and all quantities of the Hybridoma Cell Line in the
possession of PDL shall immediately be returned to YAMANOUCHI or
destroyed, in accordance with YAMANOUCHI'S instruction.
3.2 Development of Humanized Antibody.
3.2.1 Upon receipt of the Hybridoma Cell Line, PDL shall
immediately commence and diligently pursue commercially reasonable
efforts to apply its proprietary humanization technology to the
Murine Anti-gpllb/llla Antibody with the objective of producing:
(a) a humanized anti-gpllb/llla intact antibody;
(b) a humanized F(ab')2 fragment of such antibody;
and
(c) a humanized Fab fragment of such antibody.
3.2.2 PDL agrees to provide YAMANOUCHI with reports upon
determination of DNA sequence of Murine Anti-gpllb/llla Antibody,
upon completion of a chimeric anti-gpllb/llla antibody and upon
completion of the humanization of anti-gpllb/llla intact antibody.
3.3 Manufacturing Agreements.
Upon request by YAMANOUCHI, PDL agrees to consider manufacturing
Humanized Anti-gpllb/llla Antibody for and on behalf of YAMANOUCHI on
terms to be reasonably negotiated.
4. OWNERSHIP AND EXPLOITATION OF RESULTS
4.1 YAMANOUCHI Rights.
The Humanized Anti-gpllb/llla Antibody developed by PDL under.
this Agreement, as well as all results of pharmacological, toxicology
and other tests and evaluations relating thereto, shall be exclusively
used for commercial purposes by YAMANOUCHI, subject to any rights of
third parties and YAMANOUCHI's obligations of confidentiality hereunder.
4.2 Patent Applications/Patents.
4.2.1 During the Exclusive Period: PDL shall file and
prosecute all U.S. patent applications on Humanized Anti-
gpllb/llla Antibody, which will be jointly assigned to PDL and
YAMANOUCHI. PDL shall use its best efforts to have such
applications granted. YAMANOUCHI, at its option, shall have the
right to file and prosecute all non-U.S. patent applications on
Humanized Anti-gpllb/llla Antibody which will be jointly assigned
to PDL and YAMANOUCHI. Each party shall keep the other informed
as to the patent filing and prosecution status and will provide
the other with copies of the patent application(s) and subsequent
correspondence with the various patent examining offices. Within
thirty days of YAMANOUCHI's receipt of a statement from PDL,
YAMANOUCHI agrees to reimburse PDL for all direct costs including
fees, out-of-pocket legal expenses, etc. charged to PDL by non-PDL
entities with respect to the filing, prosecution and maintenance
of Licensed Patents.
4.2.2 During the Non-Exclusive Period or upon. termination
of the Agreement: PDL and YAMANOUCHI shall mutually agree as to
the filing and prosecution of all Licensed Patents. Neither party
shall be obligated to account to the other for its use or
exploitation or sublicensing of jointly owned Licensed Patents;
provided however, rights to the Humanized Anti-gpllb/llla Antibody
developed by PDL are vested exclusively in YAMANOUCHI as provided
in Paragraph 4.1 of this Agreement.
4.3 Infringement by Others/Infringement Claims.
4.3.1 During the Exclusive Period and the Non-Exclusive
Period: YAMANOUCHI shall be responsible for prosecuting patent
infringements of Licensed Patents by third parties and/or
defending patent infringements claimed by third parties. PDL
shall cooperate with YAMANOUCHI in providing information
reasonably necessary to such actions.
4.3.2 Upon termination of the Agreement: PDL and YAMANOUCHI
each have the right to prosecute patent infringements of Licensed
Patents by third parties.
4.4 PDL Rights.
The producer cell line and all other Technical Information
developed or used by PDL under this Agreement shall remain the property
of PDL. Upon receipt of the Second Benchmark Payment provided for in
Paragraph 5.2.3, PDL will disclose the sequence information about
Humanized Anti-gpllb/llla Antibody and PDL shall provide Technical
Information to YAMANOUCHI to the extent necessary to enable YAMANOUCHI
to effectively develop, seek marketing approval for, manufacture and
market any Humanized Anti-gpllb/llla Antibody developed by PDL under
this Agreement, subject however to the confidentiality obligations set
forth herein.
4.5 Grant of Licenses.
Conditioned upon and effective on the date of receipt by PDL of
the Second Benchmark Payment of Paragraph 5.2.3, PDL shall grant to
YAMANOUCHI the following licenses, to the extent necessary for
YAMANOUCHI to make, have made, use or sell any Humanized Anti-gpllb/llla
Antibody developed by PDL:
(a) a worldwide nonexclusive license under
Background Patents or other proprietary rights owned by PDL
for the sole purpose of enabling YAMANOUCHI to make, have
made, use or sell any Humanized Anti-gpllb/llla Antibody
developed by PDL.
(b) a worldwide nonexclusive sublicense under the
Medical Research Council (MRC) of England's so-called Winter
(Application Number UK PA 8607679 27.03.86) and Boss
(European Patent Application 0 120 694 (84301996.9)) patent
applications for the sole purpose of enabling YAMANOUCHI to
make, have made, use or sell any Humanized Anti-gpllb/llla
Antibody developed by PDL;
(c) to the extent PDL is legally able to do so and
upon request by YAMANOUCHI, nonexclusive sublicense(s) to
any other third party patents licensed to PDL for the sole
purpose of enabling YAMANOUCHI to make, have made, use or
sell any Humanized Anti-gpllb/llla Antibody developed by
PDL; and
(d) a worldwide exclusive license to PDL's rights in
those specific claims, if any, in Licensed Patents which
claim Humanized Anti-gpllb/llla Antibody developed by PDL.
4.6 Exclusivity Agreement.
PDL agrees not to humanize any other murine antibody, or part
thereof, against the target antigen gpllb/llla for any other party
during the Exclusive Period.
4.7 License to Third Parties.
Upon written request by YAMANOUCHI, PDL shall grant the rights
granted to YAMANOUCHI under Paragraph 4.5 to other company(ies) to
enable said other company(ies) to manufacture and market Humanized Anti-
gpllb/llla Antibody developed by PDL; provided, however, that YAMANOUCHI
and said other company agree with PDL in writing that:
(a) said other company(ies) is bound by the terms of
this Agreement;
(b) sales by said other company(ies) shall be deemed
sales by YAMANOUCHI; and
(c) YAMANOUCHI is responsible for compliance with
this Agreement by said other company(ies).
5. PAYMENTS
5.1 Payment on Execution.
Within ten (10) days of the execution of this Agreement,
YAMANOUCHI shall pay to PDL a nonrefundable Development and License
issue fee of One Million Dollars (US $1,000,000). PDL shall use
commercially reasonable efforts to deliver samples of:
(i) a humanized anti-gpilb/llla intact
antibody;
(ii) a humanized F(ab')2 fragment thereof; and
(iii) a humanized Fab fragment thereof;
("Delivered Samples") within one year of the receipt
by PDL of Hybridoma Cell Line from YAMANOUCHI;
however, pursuant to Paragraph 5.2.8 below, PDL may
deliver Delivered Samples to YAMANOUCHI within fifteen
(15) months without penalty.
5.2 Benchmark Payments.
5.2.1 YAMANOUCHI shall make the determination whether or not
each of Delivered Samples has a binding affinity not less than 25%
of the corresponding original Murine Anti-gpllb/llla Antibody or
fragments thereof ("Binding Affinity Requirement") within sixty
(60) days after receipt of such Delivered Samples. YAMANOUCHI and
PDL agree that binding affinity will be measured by the method of
competitive binding set forth in Queen, et al., Proceedings of the
National Academy of Sciences, USA, 86, 1030 (1989). YAMANOUCHI
agrees to provide PDL with samples of Murine Anti-gpllb/llla
Antibody, F(ab')2 and Fab fragments thereof in order for PDL to
perform the competitive binding assay. In addition, PDL agrees to
perform Scatchard plot analyses of Delivered Samples. If such
Delivered Samples meet the Binding Affinity Requirement,
YAMANOUGHI shall pay PDL [ ] ("First Benchmark Payment") within
thirty (30) days after such determination. If YAMANOUCHI has not
determined the binding affinity within sixty (60) days after
receipt of last Delivered Sample, then First Benchmark Payment is
due ninety (90) days after receipt of last Delivered Sample.
5.2.2 YAMANOUCHI and PDL shall promptly commence inhibition
of platelet aggregation and other in vitro assays as described in
Exhibit A to determine the biological activity of Delivered
Samples. Within one (1) month of receipt by YAMANOUCHI of the
last of Delivered Samples, YAMANOUCHI shall inform PDL in writing
if the platelet aggregation inhibition activity of each
CONFIDENTIAL TREATMENT REQUESTED
Delivered Sample does or does not meet YAMANOUCHI's criteria
for further development.
5.2.3 If YAMANOUCHI informs PDL that one or more of
Delivered Samples meets YAMANOUCHI's criteria for further
development, PDL shall commence production of sample quantities
sufficient for further testing. YAMANOUCHI shall pay PDL [ ]
("Second Benchmark Payment") within four (4) months of receipt by
YAMANOUCHI of:
[ ] mg of humanized anti-gpllb/llla intact antibody;
[ ] mg of humanized F(ab')2 fragment thereof; and
[ ] mg of humanized Fab fragment thereof.
Concurrent with such payment, YAMANOUCHI shall inform PDL in writing as to
which cell line YAMANOUCHI wishes PDL to deliver pursuant to Paragraph 5.2.4.
5.2.4 YAMANOUCHI shall pay PDL [ ] ("Third Benchmark
Payment") upon receipt of the producer cell line requested by
YAMANOUCHI pursuant to Paragraph 5.2.3, said producer cell line
having an expression level, as measured under standard tissue
culture conditions, of at least:
[ ] mg/106cells/ml/24 hours, if producing humanized anti-
gpllb/llla intact antibody;
the molar equivalent of [ ]mg/106cells/ml/24 hours intact
antibody, if producing F(ab')2;
the molar equivalent of [ ]mg/106cells/ml/24 hours intact
antibody, if producing Fab.
5.2.5 If Delivered Samples do not meet the Binding Affinity
Requirement and YAMANOUCHI requests in writing that PDL develop
another Humanized Anti-gpllb/llla Antibody, PDL will have the
option at no additional cost to YAMANOUCHI to develop another
Humanized Anti-gpllb/llla Antibody. If PDL delivers to YAMANOUCHI
another Humanized Anti-gpllb/llla Antibody which meets the Binding
Affinity Requirement, YAMANOUCHI shall pay PDL the Benchmark
Payment in accordance with Paragraph 5.2.1.
5.2.6 If PDL has received written notice pursuant to
Paragraph 5.2.2 that the platelet aggregation activity of
Delivered Samples do not meet YAMANOUCHI's requirement for further
development and YAMANOUCHI requests in writing that PDL develop
another Humanized Anti-gpllb/llla Antibody, PDL will have the
option at no additional cost to YAMANOUCHI to develop another
Humanized Anti-gpllb/llla Antibody. If PDL delivers to YAMANOUCHI
another Humanized Anti-gpllb/llla Antibody which meets
CONFIDENTIAL TREATMENT REQUESTED
YAMANOUCHI's platelet aggregation activity requirement for
further development, YAMANOUCHI shall so inform PDL and PDL will
produce testing samples as provided in Paragraph 5.2.3.
5.2.7 Notwithstanding the failure to meet the Binding
Affinity Requirement, if YAMANOUCHI decides to proceed to conduct
animal studies with Humanized Anti-gpllb/llla Antibody or any
other Licensed Product, YAMANOUCHI agrees to pay PDL the First
Benchmark Payment prior to so proceeding.
5.2.8 If PDL has not delivered Delivered Samples within
fifteen (15) months of the receipt of the Hybridoma Cell Line from
YAMANOUCHI, the First Benchmark Payment will be reduced by 5% for
each month thereafter until PDL delivers Delivered Samples. If
PDL delivers Delivered Samples prior to the one year period,
YAMANOUCHI agrees to pay PDL an additional 5% of the First
Benchmark Payment for each month by which PDL's delivery precedes
the end of such period. For example, if PDL delivers Delivered
Samples within 10 months of the receipt of the Hybridoma Cell
Line, YAMANOUCHI shall pay PDL [ ]; if PDL delivers Delivered
Samples no later than fifteen months from the receipt of the
Hybridoma Cell Line, YAMANOUCHI shall pay PDL $880,000; if PDL
delivers Delivered Samples within 18 months of the receipt of the
Hybridama Cell Line, YAMANOUCHI shall pay PDL $680,000. Neither
bonuses nor penalties will be applied if PDL develops another
Humanized Anti-gpllb/llla Antibody(s) pursuant to Paragraphs 5.2.5
or 5.2.6. For purposes of this Paragraph 5.2.8, a "month" means
the time period from the actual date in one month to the same date
in the next month, i.e., November 10 to December 10 constitutes
one month.
5.3 Royalties to PDL.
YAMANOUCHI agrees to pay PDL earned royalties of [ ] on the
Net Sales of all Licensed Products sold by YAMANOUCHI for a period of [
] years from the date of first commercial sale of any Licensed Product
in each country. YAMANOUCHI agrees to promptly inform PDL in writing of
the date of first commercial sale in each country. In the event of
significant material improvements made by YAMANOUCHI on the Licensed
Products, PDL and YAMANOUCHI shall discuss and agree upon lower
royalties than [ ].
5.4 Royalties to Third-Parties.
5.4.1 YAMANOUCHI shall pay MRC earned royalties of [ ] on
the Net Sales of all Licensed Products sold by YAMANOUCHI in each
country where the Winter and Boss patents are valid under the
sublicense of Paragraph 4.5(b).
5.4.2 PDL shall discuss with YAMANOUCHI the necessity of any
sublicenses of Paragraph 4.5(c). [ ]. If YAMANOUCHI wishes to
obtain such nonexclusive sublicense(s) to any other third party
patents nonexclusively licensed to PDL and which PDL is legally
able to sublicense to YAMANOUCHI, royalties under such
sublicense(s) shall be borne by YAMANOUCHI.
5.4.3 Third party royalties, including those payable to the
MRC, borne by YAMANOUCHI shall be paid by YAMANOUCHI through PDL
who shall remit payment to such third party licensor(s). At PDL's
option, YAMANOUCHI shall make direct payment to such third parties
of the third party royalties borne by YAMANOUCHI.
5.5 Combination Products.
If a Licensed Product is sold in a combination containing
another or other biologically active therapeutic ingredient(s) which are
not Licensed Products, then Net Sales for purposes of determining
royalty payments on the combination shall be calculated by multiplying
the Net Sales of the combination by a fraction, the numerator of which
shall be the established market price for the Licensed Product contained
in the combination and the denominator of which shall be the sum of the
established market prices for the Licensed Product and each other
biologically active therapeutic ingredient in the combination. When
separate market prices for such ingredients are not established, then
the parties shall negotiate in good faith to determine a fair and
equitable method of calculating Net Sales for the combination.
5.6 Exclusive Period Maintenance Fees.
5.6.1 YAMANOUCHI, at its option, may elect to maintain the
Exclusive Period beyond January 1, 1995 on a year to year basis by
paying the following Exclusive Period maintenance fees:
(a) [ ] beginning January 1, 1995 and each January
thereafter until January 1, [ ];
(b) [ ] on January 1, [ ];
(c) [ ] on January 1, [ ];
(d) beginning January 1, [ ] and each January 1
thereafter:
(i) prior to the first commercial sale for
therapeutic purposes, [ ]; or
(ii) after the first commercial sale for
therapeutic purposes, [ ].
(e) Upon payment by YAMANOUCHI of cumulative earned
royalties of [ ] to PDL, the maintenance fees otherwise
required above will no longer be payable.
5.6.2 The maintenance fees of Paragraph 5.6.1 are
nonrefundable but shall be credited to YAMANOUCHI against up to
fifty percent (50%) of each earned royalty payment which
YAMANOUCHI would be required to pay pursuant to Paragraph 5.3
until the entire credit is exhausted.
6. REPORTS, PAYMENTS, ACCOUNTING
6.1 Reports and Payment.
After the first commercial sale, YAMANOUCHI shall make written
reports and earned royalty payments to PDL within ninety (90) days after
the end of each calendar quarter. This report shall state the number,
description, and aggregate Net Sales of Licensed Products during such
completed calendar quarter, and resulting calculation pursuant to
Paragraphs 5.3 and 5.4 of earned royalty payment for such completed
calendar quarter. Concurrent with the making of each such report,
YAMANOUCHI shall include payment of royalties for the calendar quarter
covered by such report. All payments to PDL shall be in U.S. Dollars
and net of all non-U.S. taxes.
6.2 Accounting.
YAMANOUCHI agrees to keep records for a period of three (3)
years showing the manufacturing, sales, use, and other disposition of
Licensed Products sold or otherwise disposed of under this Agreement in
sufficient detail to enable the royalties payable hereunder by
YAMANOUCHI to be determined, and further agrees to permit its books and
records to be examined from time to time to the extent necessary to
verify reports provided for in Paragraph 6.1. Such examination is to be
made by PDL, or at PDL's option an independent auditing firm selected by
PDL, at the expense of PDL, except in the event that the results of the
audit reveal a discrepancy in YAMANOUCHI's favor of five percent (5%) or
more, then all expenses of the examination shall be paid by YAMANOUCHI.
Any discrepancies will be promptly corrected by payment by either party.
6.3 Currency Conversion.
The royalty on sales made in currencies other than U.S. Dollars
shall be calculated using the average of the daily exchange rates for
such currency quoted by Citibank N.A.'s foreign exchange desk, for each
of the last thirty (30) banking days of each calendar quarter. All
payments to PDL shall be in U.S. Dollars and net of all non-U.S. taxes.
6.4 Progress Report.
On or before September 1 of each year until YAMANOUCHI markets a
Licensed Product(s), YAMANOUCHI shall make a written annual report to
PDL covering the year ending an the preceding June 30, regarding the
progress of YAMANOUCHI toward commercialization of Licensed Products.
Such report shall include, as a minimum, information sufficient to
enable PDL to ascertain progress by YAMANOUCHI toward developing and
marketing Licensed Products.
7. WARRANTIES; NO WARRANTIES, INDEMNIFICATION
7.1 Warranties.
The parties warrant that they know of no legal reason to prevent
them from entering into this Agreement.
7.2 No Warranties.
PDL makes no representations or warranties, express or implied,
with respect to any producer cell line or Humanized Anti-gpllb/llla
Antibody delivered to YAMANOUCHI under this Agreement. In particular,
PDL makes no representations or warranties as to the merchantability or
fitness for any particular purpose of any such antibody or that its
manufacture, use or sale will not infringe any patent or other
proprietary rights other than those licensed or sublicensed hereunder.
7.3 Indemnification.
YAMANOUCHI will indemnify and hold PDL harmless against any and
all liability, loss, damage, claim or expense (including reasonable
attorney's fees) resulting from any use, testing, manufacture,
packaging, labeling, or sale by YAMANOUCHI of any producer cell line,
antibody, antibody fragment thereof or any Licensed Products.
8. CONFIDENTIALITY AND PUBLICATIONS.
8.1 Confidentiality.
Each party shall keep confidential, and shall not use for any
purpose other than the development and commercial exploitation of any
Humanized Anti-gpllb/llla Antibody developed by PDL hereunder, during
the term of this Agreement and for five years after termination hereof,
all Technical Information supplied by the other, provided however, that
the foregoing obligation of confidentiality shall not apply to the
extent that any Technical Information:
(a) is already known to the recipient at the time of
disclosure or is developed by recipient thereafter in the
course of work entirely independent of any disclosure by the
other party;
(b) is publicly known prior to or becomes publicly
known after disclosure other than through acts or omissions
of the recipient; or
(c) is lawfully disclosed in good faith to recipient
by a third party.
In addition, disclosure may be made by YAMANOUCHI (i) to governmental
agencies to the extent required or desirable to secure governmental approval
for the development or marketing of any Humanized Anti-gpllb/llla Antibody
developed by PDL provided that all reasonably possible steps are taken by
YAMANOUCHI to assure the confidentiality of the information in the hands of
such agencies, or (ii) to preclinical and clinical investigators under a
secrecy agreement with essentially the same confidentiality provisions
contained herein and then only where necessary for YAMANOUCHI to exercise its
rights hereunder. YAMANOUCHI shall be responsible for any breach of these
confidentiality obligations by the parties above.
YAMANOUCHI and PDL agree that a breach or threatened breach of any of
the confidentiality obligations contained herein will result in irreparable
and continuing damage to the other party for which there will be no adequate
remedy at law and that, in the event of such breach or threatened breach, the
damaged party shall be entitled to injunctive relief, an order for specific
performance and/or other provisional or equitable relief, and such other and
further relief as may be proper (including money damages).
8.2 Publications.
Each party agrees to give the other party reasonable opportunity
to review and comment on any proposed publication arising from the
development of a Humanized Anti-gpllb/llla Antibody under this
Agreement. Determination of authorship for any paper shall be in
accordance with accepted scientific practice.
9. TERM AND TERMINATION
9.1 Term.
This Agreement is effective on the date first set forth above
and shall, unless terminated earlier in accordance with this Article 9,
continue until expiration of the obligation to pay royalties to PDL, or
to MRC or other third parties through PDL, in accordance with
Paragraphs 5.3 and 5.4 above, whichever is later; provided, however,
this Agreement shall be continued on a country-by-country basis so long
as YAMANOUCHI elects to maintain this Agreement by paying revised
royalties after the expiration of YAMANOUCHI's obligation to pay
royalties in accordance with Paragraph 5.3. In such case, PDL and
YAMANOUCHI shall discuss and agree upon revised royalties which shall be
lower than the earned royalties defined in Paragraph 5.3.
9.2 Termination.
9.2.1 YAMANOUCHI may terminate this Agreement immediately on
written notice by YAMANOUCHI to PDL if:
(a) the Humanized Anti-gpllb/llla Antibody(ies) does
not meet the Binding Affinity Requirement or come
sufficiently close thereto for YAMANOUCHI to wish to further
pursue this Agreement; or
(b) the platelet aggregation inhibition activity of
each Delivered Sample does not meet YAMANOUCHI's criteria
for further development; or
(c) the producer cell line delivered to YAMANOUCHI
in accordance with Paragraph 5.2.3 does not have an
expression level defined in Paragraph 5.2.4.
9.2.2 PDL may terminate this Agreement if YAMANOUCHI:
(a) Is in default in payment of any payment or
providing of reports; or
(b) Is in breach of any provision hereof; or
(c) Provides any materially false report; and
YAMANOUCHI fails to remedy any such default, breach, or
false report within thirty (30) days after written notice
thereof by PDL.
9.2.3 Either party may terminate this Agreement, and the
licenses granted herein if: (a) the other party becomes insolvent
or enters in any arrangement or composition with creditors, or
makes an assignment for the benefit of creditors; (b) there is a
dissolution, liquidation or winding-up of the other party's
business; or (c) a trustee in bankruptcy of the assets of the
other party is appointed and such trustee does not, within thirty
(30) days after receipt of written notice from the other party,
confirm this Agreement and provide adequate assurance that the
terms and conditions hereof shall faithfully be fulfilled.
9.2.4 The right of either party to terminate this Agreement
as provided above shall not be affected in any way by its waiver
of, or failure to take action with respect to, any previous
failure to perform hereunder.
9.2.5 Surviving any termination or expiration of this
Agreement are:
(a) YAMANOUCHI's obligation to pay royalties or
other fees accrued or accruable;
(b) the confidentiality obligations under Article 8;
(c) the indemnity provisions of Paragraph 7.3.
9.2.6 Upon termination other than expiration of this
Agreement in accordance with Paragraph 9.1, PDL will return to
YAMANOUCHI all biological material owned by YAMANOUCHI, YAMANOUCHI
will return to PDL all biological material owned by PDL and all
licenses and sublicenses will terminate.
10. MISCELLANEOUS
10.1 Force Majeure.
Neither party shall be responsible to the other for any failure
or delay in performing any of its obligations under this Agreement or
for other non-performance hereof provided that such delay or non-
performance is occasioned by a cause beyond the reasonable control and
without fault or negligence of such party, including, but not limited to
fire, flood, explosion, discontinuity in the supply of power, court
order or governmental interference, act of God, strike or other labor
trouble and provided that such party will immediately inform the other
party and that it will entirely perform its obligations immediately
after the relevant cause has ceased its effect.
10.2 Arbitration.
Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, which cannot be satisfactorily
resolved by the parties by correspondence or mutual conference shall be
determined by arbitration in Santa Clara, California, or such other
venue as may be mutually agreed upon, under the then prevailing rules of
the American Arbitration Association; provided however, that if any
issue in dispute involves scientific or technical matters, the
arbitrator(s) chosen shall have educational training and/or experience
sufficient to demonstrate a reasonable level of knowledge in the field
of biotechnology. The decision of the arbitrators shall be final and
binding and any party may apply for judgment upon the award rendered by
the arbitrator(s) in a court having jurisdiction thereover.
10.3 Notices.
All notices, documents, statements, reports and other writings
required or permitted to be given by the terms of this Agreement shall
be sent either by pre-paid, registered or certified mail, telegram,
telecopier or telex, addressed as follows:
To PDL: Protein Design Labs, Inc.
2375 Garcia Avenue
Mountain View, CA 94043
USA
Attention: President
with a copy to: Marta L. Morando
Ware & Freidenrich
400 Hamilton Avenue
Palo Alto, CA 94301
USA
TO YAMANOUCHI: Yamanouchi Pharmaceutical Company
No. 1-8 Azusawa 1-chome
Itabashi-ku, Tokyo 174
Japan
Attention:
Hiroshi Gushima, Ph.D.
Director of Molecular Biology Dept.,
Biomedical Research Labs 11,
Central Research Labs
Each party may change its address upon written notice to the other party
and each notice shall be deemed to be given upon receipt.
10.4 Governing Law.
This Agreement shall be subject to the laws of California,
United States of America.
10.5 Entire Agreement.
This Agreement embodies the entire understanding of the parties
relating to the subject matter hereof and supersedes all prior
understandings and agreements except that certain Confidentiality
Agreement dated November 1, 1990 which shall continue to govern any
Confidential Information shared other than pursuant to this Agreement.
No modification or amendment of this Agreement shall be valid or binding
except by a writing signed by each of the parties.
10.6 Assignment.
This Agreement may not be assigned except (a) with the advance
written consent of the other party, which consent shall not be
unreasonably withheld, or (b) as part of a sale or transfer of
substantially the entire business relating to operations pursuant to
this Agreement.
10.7 Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and such counterparts together
shall constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Development and License Agreement in duplicate originals by their duly-
authorized officers or representatives.
PROTEIN DESIGN LABS, INC.
YAMANOUCHI PHARMACEUTICAL CO., LTD.
By: /s/ Laurence Jay Korn
By: /s/Moriyoshi Inubai
Title: President
Title: Director of Central Research Laboratories
EXHIBIT A
Methods for the binding assay of anti-GPllb/llla antibodies
Iodination of antibodies
Antibodies (lgG whole molecule, F(ab')2 and Fab fragment) were iodinated
using chrolamine T. One hundred m Ci of 125I were incubated with the
antibodies (15m g of 1gG. 10m g of F(ab')2, 5m g of Fab') for 4 min. in the
presence of 1 m g of chrolamine T. Free 125I was separated from the antibody
on a Sephadex G-25 column. 3-15 m Ci of 125I were incorporated into 1 m g of
protein corresponding to 1000 - 2000 cpm/fmole protein.
Platelet preparation
Platelete-rich plasma (PRP) was prepared by differential centriguation
of anti-coagulated blood from a normal donor. Platelets were washed three
times with modified Tyrode's buffer (0.13M NaC1, 2.6mM KC1, 0.4mM NaH2P04,
12mM NaHCO3, 5.5mM glucose, 2% bovine serum albumin, pH 7.4) containing lmM
EDTA. Washed platelets (WP) were used for the binding experiment of
antibodies.
For the antibody binding assay of stimulated platelets, ADP (final
concentration: 10 m M) or thrombin (final concentration: 0.3U/ml) was added
together with CaC12 (1mM final) just before or after the addition of the
radio-labelled antibody.
Antibody binding assay
Washed platelets (3 x 106 platelets/tube for antibody B, 1-3 x 107
platelets/tube for antibody C) were incubated with constant amount (100pM) of
125I-labelled antibody in the presence or absence of various amounts of
unlabelled antibody, for 1hr at room temperature. Platelets and antibodies
were diluted with modified Tyrode's buffer without EDTA and total volume of
the assay mixture was adjusted to 500 ml. Incubation was stopped by adding 2
ml of ice-cold buffer and free antibody was separated from bound antibody by
the centrifugation for 10 min. at 3000rpm. Tubes were then counted in a gamma
counter.
Nonspecific binding was determined by adding 1300 fold-excess (10 m g)
cold antibody before adding the labelled antibody.
Dessociation constants(Xd) and No. of binding sites (Bmax) were
determined by Scatchard plot analysis.
Fibrinogen binding assay
Human fibrinogen (Sigma, F4883) was iodinated as described above except
that 300 m g of fibrinogen were used, resulting in specific radioactivityi at
0.02 m Ci/m g. ADP-stimulated platelets (3 x 107/tube) were incubated with
125I-fibrinogen (1 m g) in the presence or absence of increasing amounts of
cold [illegible].
Platelet Preparation
Platelet-rich plasma (PRP) was obtained by centrifugation of the
citrated blood at 110 X g for 10 minutes at room temperature. After removal
of PRP, the remaining sample was centrifuged at 1500 X g for 15 minutes to
obtain platelet poor plasma (PPP). Platelet counts in PRP were determined by
hemocytometery and adjusted to a final concentration of 3X103/ml with
autologous PPP.
Platelet Aggregometry
A 200 ul aliquot of PRP was warmed to 37 C in a silanized cuvette and
stirred continuously at 1200 rpm in an aggregometer HEMA TRACER (Niko
Bioscience Co., Ltd.). After equilibration for 1 min. ADP (Sigma Chemical
Co.) at a final concentration of 20 uM or 2 uM or bovine tendon collagen
(Sigma Chemical Co.) at a final concentration of 20 ug/ml was added and
aggregation was recorded as an increase in light transmission, with that of
PRP and PPP representing 0% and 100% transmission, respectively. For
deaggregation experiments, 1gG or its fragments, or an equivalent volume of
Tris-Buffered Saline (TBS) was added as light transmission approached a
maximum and at selected later time intervals. Deaggregation (inhibition of
aggregation) was assessed as the decrease in light transmission measured 5
minutes after addition of sample or saline as expressed as a percentage of the
maximal light transmission.
Platelet studies were completed within 3 hours after blood collection.
CONFIDENTIAL TREATMENT REQUESTED
Amendment No. 1
to the
February 12, 1991
Development and License Agreement
between
Protein Design Labs, Inc.
and
Yamanouchi Pharmaceutical Co., Ltd.
Effective March 27, 1991 ("Effective Date"), PROTEIN DESIGN LABS, INC.,
a Delaware corporation having offices at 2375 Garcia Avenue, Mountain View, CA
94043 USA ("PDL") and YAMANOUCHI PHARMACEUTICAL CO., LTD., a Japanese
corporation having offices at No. 1-8 Azusawa 1-chome, Itabashi-ku, Tokyo 174
Japan ("YAMANOUCHI") agree as follows:
1. BACKROUND
1.1 PDL and YAMANOUCHI are parties to a February 12, 1991
Development and License Agreement covering humanized monoclonal
antibodies against gpllb/llla ("Original Agreement").
1.2 PDL and YAMANOUCHI wish to amend Original Agreement to
clarify each party's obligations with respect to non-U.S. withholding
taxes.
1.3 In addition, PDL and YAMANOUCHI wish to correct certain
typographical errors.
2. AMENDMENT
2.1 The last sentence of Paragraph 6.1 of Original Agreement is
deleted and the following sentence added to Paragraph 6.1:
All payments to PDL shall be in U.S. Dollars.
2.2 Paragraphs 6.1.1, 6.1.2 and 6.1.3 are added as follows:
6.1.1 The Development and License issue fee, all Benchmark
Payments and all Exclusive Period maintenance fees shall be
remitted to PDL in full without deducting any Japanese
withholding taxes and PDL agrees to return to YAMANOUCHI
amounts, if any, that represent an actual reduction in PDL
U.S. taxes permanently realized as a result of taxes paid in
Japan by YAMANOUCHI on behalf of PDL. YAMANOUCHI shall
provide copies to PDL of all tax receipts for taxes paid in
Japan by YAMANOUCHI or other company(ies) defined in
Paragraph 4.7 on behalf of PDL.
6.1.2 Earned royalty payments remitted to PDL under
Paragraph 5.3 shall be reduced by the amount of all non-U.S.
withholding taxes paid by YAMANOUCHI or other company(ies)
defined in Paragraph 4.7 on behalf of PDL. PDL is not
required to return recovered U.S. taxes realized as a result
of taxes paid in other countries than the U.S.A., if any.
Notwithstanding the foregoing:
a) in the case of sales made into Japan, earned
royalty payments remitted to PDL shall not be below [
];
b) in the case of sales made into the United
States, earned royalty payments remitted to PDL shall
not be below [ ] and
c) in the case of sales made into countries other
than Japan or the United States, earned royalty
payments remitted to PDL shall not be below [ ].
YAMANOUCHI shall provide copies to PDL of all tax receipts
for taxes paid, if any, by YAMANOUCHI or other company(ies)
defined in Paragraph 4.7 on behalf of PDL.
6.1.3 earned royalties remitted to third parties under
Paragraph 5.4 shall be paid in full without deducting any
withholding taxes unless otherwise agreed upon with such
third parties. In no event shall PDL's earned royalty
payments remitted to PDL after deductions permitted by
Paragraph 5.4 be less than [ ].
2.3 The last sentence of Paragraph 6.3 is deleted and the
following sentence substituted in its place:
All payments to PDL shall be in U.S. Dollars.
2.4 Paragraph 5.2.4 is amended to change "mg" to "ug":
CONFIDENTIAL TREATMENT REQUESTED
[ ] mg/106cells/ml/24 hours, if producing humanized anti-
gpllb/llla intact antibody;
the molar eqivalent of [ ]mg/106 cells/ml/24 hours intact
antibody, if producing F(ab')2;
the molar equivalent of [ ]mg/106 cells/ml/24 hours intact
antibody, of producing Fab.
2.5 All other provisions of Original Agreement remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment in
duplicate originals.
PROTEIN DESIGN LABS, INC.
YAMANOUCHI PHARMACEUTICAL CO., LTD.
By: /s/ Laurence Jay Korn
By: /s/ Moriyoshi Inubai
Title: President
Title: Director of Central Research Laboratories
