License Agreement - Ligand Pharmaceuticals Inc. and X-Ceptor Therapeutics Inc.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("License Agreement") effective the 30th day of
June, 1999 ("Effective Date") is entered into by and between LIGAND
PHARMACEUTICALS INCORPORATED, a Delaware corporation having offices at 10275
Science Center Drive, San Diego, California 92121 ("Ligand") and X-CEPTOR
THERAPEUTICS, INC., a Delaware corporation having offices at 10555 Science Park
Drive, Suite B, San Diego, California 92121 ("X-Ceptor").
RECITALS
A. Ligand is engaged in the research and development of pharmaceutical
products which function as ligands for a class of protein receptors which are
found within eucaryotic cells and are referred to as "intracellular receptors."
B. In conjunction with its research and development activities Ligand has
licensed from third parties patents and patent applications and developed
technology of its own useful in discovering and developing pharmaceutical
products which act through intracellular receptors.
C. Among the intracellular receptors are numerous intracellular receptors
whose natural ligand is not known and these receptors are commonly referred to
as "orphan receptors."
D. X-Ceptor intends to engage in research and development of pharmaceutical
products which act as ligands of orphan receptors and wishes to acquire certain
rights to technology owned or licensed by Ligand to be used in that research and
development effort and Ligand is willing to grant X-Ceptor such rights.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Ligand and X-Ceptor hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 "Affiliate" shall mean, with respect to a party, and X-Ceptor's
sublicensees and collaborators, any other business entity which directly or
indirectly controls, is controlled by, or is under common control with, such
party, sublicensees or collaborators. A business entity shall be regarded as in
control of another business entity if it owns, or directly or indirectly
controls, at least fifty percent (50%) of the voting stock or other ownership
interest of the other, or if it directly or indirectly possesses the power to
direct or cause the direction of the management and policies.
1.2 "Cancer" shall mean the group of diseases characterized by (a) the
malignant growth of tissues or cells within the human body or (b) the closely
related conditions identifiable
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as precursor lesions for malignancy, e.g., cervical dysplasias, actinic
keratoses, and leukoplakia in the oropharynx.
1.3 "Exclusive Technology" shall mean the patents or patent applications
identified in Exhibit A to the extent, and only to the extent, that claims
therein read upon (i) an Orphan Receptor, (ii) a gene for an Orphan Receptor,
(iii) a composition containing an Orphan Receptor or a gene for an Orphan
Receptor, (iv) a vector containing a gene for an Orphan Receptor, (v) a
recombinant cell that expresses an Orphan Receptor, and (vi) a method of making
or using an Orphan Receptor, including assay methods using an Orphan Receptor.
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*** . Exclusive Technology shall include
continuations, continuations-in-part,divisionals and foreign equivalents of
patents or patent applications in Exhibit A and reissues of any patents in the
Exclusive Technology.
1.4 "Field" shall mean the discovery, characterization, development and
commercialization of Products for use in the treatment, palliation, prevention
and or remission of human diseases.
1.5 "First Commercial Sale" shall mean, with respect to a Product, the
first sale to a third party who is not an Affiliate, in the case of sales by
X-Ceptor, its collaborators and sublicensees.
1.6 "Restricted Field" shall mean the discovery, characterization,
development and commercialization of drug products which act through Orphan
Receptors for the treatment, palliation, prevention and/or remission of Cancer.
1.7 "Ligand Option" shall mean the option to purchase all outstanding
shares of capital stock of X-Ceptor granted to Ligand pursuant to agreements of
the stockholders of X-Ceptor and as set forth in Article Four, Section H of the
Amended and Restated Certificate of Incorporation of X-Ceptor Therapeutics, Inc.
as further amended from time to time.
1.8 "Net Sales" shall mean the gross sales invoiced to customers who are
not Affiliates of X-Ceptor, its sublicensees or collaborators for Products sold
during a quarterly period in which a Ligand Royalty (as defined in Section 4.1)
accrues less:
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1.9 "Nonexclusive Technology" shall mean the patents and patent
applications in Exhibit B. Nonexclusive Technology shall include continuations,
continuations-in-part, divisionals and foreign equivalents of patents or patent
applications in Exhibit B and reissues of any patents in the Nonexclusive
Technology.
1.10 "Orphan Receptor" shall mean all species of any of (i) the *** ***
receptors, and (ii) any orphan receptor discovered by Ligand prior to the
expiration of the Ligand Option.
1.11 "Products" shall mean chemical compounds which (i) were discovered
utilizing the Exclusive Technology and the Nonexclusive Technology during the
life of the patent claims included therein and (ii) modulate the activity of an
Orphan Receptor.
ARTICLE II
REPRESENTATIONS AND WARRANTIEs
Each party hereby represents and warrants to the other party as follows:
2.1 Corporate Existence and Power. Such party (a) is a corporation duly
organized, validly existing and in good standing under the laws of the state in
which it is incorporated, (b) has the corporate power and authority and the
legal right to own and operate its property and assets, to lease the property
and assets it operates under lease, and to carry on its business as it is now
being conducted, and (c) is in compliance with all requirements of applicable
law, except to the extent that any noncompliance would not have a material
adverse effect on the properties, business, financial or other condition of such
party and would not materially adversely affect such party's ability to perform
its obligations under this Agreement.
2.2 Authorization and Enforcement of Obligations. Such party (a) has the
corporate power and authority and the legal right to enter into this Agreement
and to perform its obligations hereunder, and (b) has taken all necessary
corporate action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder. This
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Agreement has been duly executed and delivered on behalf of such party, and
constitutes a legal, valid, binding obligation, enforceable against such party
in accordance with its terms.
2.3 Consents. All necessary consents, approvals and authorizations of all
governmental authorities and other persons required to be obtained by such party
in connection with the execution, delivery and performance of this Agreement
have been and shall be obtained.
2.4 Exclusive Technology and Nonexclusive Technology. Ligand warrants that
it is the owner of the entire right, title and interest in, or that it is a
licensee of, the Exclusive Technology and the Nonexclusive Technology, all of
which is and shall remain unencumbered by any license, security interests, or
other rights or claims of any third party (except a third party licensor's
rights under an applicable license agreement), and no other person or entity has
or shall have any valid claim of ownership to the Exclusive Technology and
Nonexclusive Technology. Ligand further represents and warrants that there are
no claims, judgements or settlements relating to the Exclusive Technology and
the Nonexclusive Technology to be paid by Ligand other than royalties and other
payments owed licensors and no claim has been brought or, to Ligand's knowledge,
threatened by any person alleging (i) any claim of ownership adverse to Ligand
or its licensors or (ii) any violation of any intellectual property rights of
such third party by Ligand's practice or utilization of the Exclusive Technology
or Nonexclusive Technology in the Field.
2.5 Right to Enter into Agreement. Ligand represents and warrants that it
has the right to grant the licenses provided under this agreement, and that it
has not granted and will not grant licenses to any other person or entity that
affects the grants within this Agreement.
2.6 No Conflict. Notwithstanding anything to the contrary in this
Agreement, the execution and delivery of this Agreement and the performance of
such party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or regulations and (b) do not and shall not
conflict with, violate or breach or constitute a default or require any consent
under, any contractual obligation of such party.
2.7 Disclaimer of Warranty. LIGAND EXPRESSLY DISCLAIMS ANY WARRANTY THAT
PATENTS INCLUDED WITHIN THE LICENSE GRANT OF SECTION 3.1 ARE VALID OR THAT
PRACTICE OF THE TECHNOLOGY LICENSED TO X-CEPTOR HEREUNDER WOULD NOT INFRINGE THE
PATENT RIGHTS OF OTHERS OR THAT PRODUCTS DEVELOPED USING THE EXCLUSIVE
TECHNOLOGY OR THE NONEXCLUSIVE TECHNOLOGY WILL NOT INFRINGE THE PATENT RIGHTS OF
OTHERS.
ARTICLE III
LICENSE GRANT
3.1 License Grant to X-Ceptor. Ligand hereby grants to X-Ceptor, subject to
the terms herein recited, a perpetual exclusive license, to the Exclusive
Technology, which license is exclusive even as to Ligand, and a perpetual
nonexclusive license to the Nonexclusive Technology, each respectively in the
Field. The exclusive license and the nonexclusive license
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are worldwide and include the right to grant sublicenses as limited herein;
provided that X-Ceptor can exploit its licenses granted hereunder within the
Field independently, with Affiliates, with sublicensees and with collaborators.
3.2 Ligand Retained Rights. Ligand retains the right to test compounds in
binding and other assays for activity against an Orphan Receptor in the
Exclusive Technology for the purpose of cross reactivity testing and toxicity
where the compound tested is not being developed to exploit its activity against
an Orphan Receptor included in the Exclusive Technology and to use an Orphan
Receptor included in the Exclusive Technology in assays where it forms a
heterodimer with another receptor. Ligand can exploit its rights outside the
Field alone, with Affiliates and collaborators and by way of sublicense. Ligand
will not, and will not grant the right to others to, develop or commercialize
products which are modulators of the Orphan Receptors.
3.3 Know-How License to X-Ceptor. Ligand shall cooperate with X-Ceptor in
setting up assays for identifying ligands to the orphan receptors in the
Exclusive Technology. Ligand hereby grants to X-Ceptor a nonexclusive license to
unpatented know-how of Ligand necessary to perform the assays on a royalty free
basis solely for the purpose of practicing the Exclusive Technology and the
Nonexclusive Technology in the Field. Such know-how may be sublicensed to a
third party to whom X-Ceptor licenses Exclusive Technology and Nonexclusive
Technology solely for the purpose of practicing that Exclusive Technology or
Nonexclusive Technology licensed to the third party.
3.4 Obligations of Sublicensees. In any sublicense of Exclusive Technology
or Nonexclusive Technology to a third party X-Ceptor shall include a statement
to the effect that the third party acknowledges that the sublicense is subject
to this Agreement and that Ligand and, where applicable, its licensors can bring
suit directly against a sublicensee to enforce the terms of this Agreement
including the collection of any unpaid royalty. Ligand shall be supplied a copy
of any sublicense to Exclusive Technology or Nonexclusive Technology promptly
following execution of such sublicense; provided, however, that, X-Ceptor may
redact the commercial terms of a sublicense. A sublicensee shall be entitled to
cure any breach of this Agreement by X-Ceptor and thereby retain the sublicense
rights granted hereunder. X-Ceptor agrees to make redacted financial terms
available to Ligand under a confidentiality/nondisclosure agreement reasonably
acceptable to both parties as part of Ligand's due diligence carried out in
consideration of exercise of the Ligand Option.
3.5 Limitations on Rights to Collaborate and Sublicense. No sublicense
granted by X-Ceptor and no agreement between X-Ceptor and a third party to
collaborate in the research, development and/or commercialization of Products
shall restrict X-Ceptor's right to assign or otherwise transfer to Ligand, or
any Affiliate of Ligand, the agreement containing such sublicenses or relating
to such collaborations in connection with exercise of the Ligand Option. Any
sublicense to Nonexclusive Technology shall expire *** after exercise by Ligand
of the Ligand Option.
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3.6 Right and Obligation of X-Ceptor to Participate in Prosecution of
Patent Applications. Ligand shall permit X-Ceptor to review and comment upon new
patent applications, office actions and responses thereto for patent
applications included in the Exclusive Technology.
3.7 Special Provisions Concerning the Restricted Field. Notwithstanding any
other provisions in this Agreement, X-Ceptor will not have the right during the
term of the Ligand Option to grant any other party a license in the Restricted
Field or to collaborate with any other party in the development of Products to
which the other party acquires rights in the Restricted Field.
3.8 Ligand Restrictions. Ligand shall not grant a third party a license to
the Nonexclusive Technology in the Field during the term of the Ligand Option
and, if the Ligand Option is not exercised, for *** after the expiration
unexercised of the Ligand Option.
ARTICLE IV
ROYALTIES, OTHER PAYMENTS AND ROYALTY TERM
4.1 Royalties. X-Ceptor shall pay a royalty on sales of Products, on a
Product-by-Product and country-by-country basis, in an amount equal to *** of
Net Sales thereof (whether the underlying sales of Products are by X-Ceptor, a
sublicensee of X-Ceptor, or a collaborator of X-Ceptor) ("Ligand Royalty") plus
"X" where X is ***
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("Third Party Royalty"); provided Ligand will not
agree to an increase in rates of Third Party Royalties for the Exclusive
Technology or Nonexclusive Technology from those in effect on the Effective
Date. X-Ceptor shall have the right to decline to accept a license to any aspect
of the Exclusive Technology or Nonexclusive Technology which would increase the
royalties payable by X-Ceptor above those established by the aforementioned
formula as of the Effective Date. The parties acknowledge that the definition of
Net Sales under this Agreement may vary from the definition of the royalty base
upon which a royalty obligation to a third party is based and that X-Ceptor will
use the applicable royalty base or bases for calculating the royalty obligation
to a third party or third parties in calculating the Third Party Royalty. Ligand
will provide X-Ceptor with the applicable base for calculating a third party
royalty included in X on a Product by Product basis and, as of the Effective
Date, has delivered accurate copies of applicable agreements with its licensors
to X-Ceptor, a list of which is attached hereto as Exhibit C. Ligand agrees to
apply all sums received from X-Ceptor as payment for royalties owed by Ligand to
the satisfaction of such royalty obligations and to take all actions required to
keep in full force and effect the licenses from third parties, including the
Salk Institute for Biological Studies ("Salk Institute"), as required to enable
X-Ceptor to continue to use Exclusive Technology and Nonexclusive Technology.
4.2 Royalty-Term. The Ligand Royalty on a Product shall be paid for the
longer of (i) ***
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or (ii) *** . The Third Party Royalty shall be paid for the term of Ligand's
royalty obligation to an affected third party.
4.3 Direct Payments to Third Parties. At Ligand's direction, X-Ceptor shall
pay a royalty on sales of a Product owed a third party in the manner required by
Ligand's agreement with the third party with a copy of the royalty report
provided the third party also provided to Ligand. Payments made to a third party
directly by X-Ceptor shall not be included in calculation of the Third Party
Royalty under Section 4.01.
4.4 Minimum Annual Royalties. During the term of this Agreement X-Ceptor
shall pay Ligand *** per annum payable on the first and each subsequent
anniversary of this Agreement to be applied to annual royalties payable by
Ligand to the Salk Institute for so long as royalties are due the Salk
Institute; provided, however, that Ligand will refund to X-Ceptor an amount
equal to *** less the amount paid to the Salk Institute for Biological Studies
("Salk Institute") by Ligand as a result of Net Sales of Products under this
Agreement for the year in which the minimum annual royalty is made by X-Ceptor.
4.5 Reconciliation of Salk Institute Payments. To the extent that Ligand is
entitled to claim a credit against its minimum annual royalty obligations to the
Salk Institute as a result of payments to Ligand under Section 4.1 of this
Agreement, Ligand shall refund to X-Ceptor an amount equal to the credit it is
entitled to take, up to a maximum of *** , such refund payment to take place
within thirty (30) days of the date Ligand is entitled to take such credit.
4.6 Patent Expenses. During the term of this Agreement X-Captor shall
reimburse Ligand for all expenses incurred by Ligand or for which Ligand has the
obligation to reimburse related to prosecuting patent applications and
maintaining patents in the Exclusive Technology.
ARTICLE V
ROYALTY REPORTS AND ACCOUNTING
5.1 Reports, Exchange Rates Applicable to Ligand Royalty. During the term
of this Agreement following the First Commercial Sale of a Product, X-Ceptor
shall furnish to Ligand a written report within sixty (60) days of the end of
each calendar quarter showing in reasonably specific detail, on a country by
country basis, (a) the gross sales of all Products sold by X-Ceptor, its
Affiliates and its sublicensees during the Reporting Period (as defined
hereinbelow) to which the report is applicable and the calculation of Net Sales
from such gross sales; (b) the Ligand Royalty payable in U.S. dollars, if any,
which shall have accrued hereunder based upon Net Sales of Products; (c)
withholding taxes, if any, required by law to be deducted in respect of such
sales; (d) the dates of the First Commercial Sales of any Products in any
country during the Reporting Period; and (e) the exchange rates used in
determining the amount of U.S. dollars. With respect to sales of Products
invoiced in U.S. dollars, the gross sales, Net Sales, and royalties payable
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shall be expressed in U.S. dollars. With respect to sales of Products invoiced
in a currency other than U.S. dollars, the gross sales, Net Sales and royalties
payable shall be expressed in the domestic currency of the party making the sale
together with the U.S. dollar equivalent of the royalty payable, calculated
using the Inter Bank rate set forth in the International Report published by
International Reports Inc. as Foreign Exchange Rates quoted in New York on the
day nearest the last business day of the calendar quarter. As used in this
Section 5.1, the term "Reporting Period" shall mean a calendar quarter with
respect to gross sales in the United States (not including Puerto Rico) and a
fiscal quarter ending on the final day of February, May, August and November (as
the case may be) for gross sales outside the United States (including Puerto
Rico). The gross sales made outside the United States during a fiscal quarter
will be reported with the gross sales made in the United States during the
calendar quarter in which the last month of the fiscal quarter falls.
5.2 Reports Applicable to Royalties to Third Parties. During the term of
this Agreement following the First Commercial Sale of a Product, X-Ceptor shall
provide Ligand with reports relating to all royalties included in the Third
Party Royalty for that Product in the same format and containing the same
information required by Ligand's agreements with applicable third parties.
5.3 Audits.
5.3.1 Upon the written request of Ligand and not more than once in each
calendar year, X-Ceptor shall permit an independent certified public accounting
firm of nationally recognized standing, selected by Ligand and reasonably
acceptable to X-Ceptor, at Ligand's expense, to have access during normal
business hours to such of the records of X-Ceptor as may be reasonably necessary
to verify the accuracy of the royalty reports hereunder for any year ending not
more than thirty-six (36) months prior to the date of such request. The
accounting firm shall disclose to Ligand only whether the records are correct or
not and, if applicable, the specific details concerning any discrepancies.
5.3.2 If such accounting firm concludes that additional royalties were owed
during such period, X-Ceptor shall pay the additional royalties within thirty
(30) days of the date Ligand delivers to X-Ceptor such accounting firm's written
report so concluding. The fees charged by such accounting firm shall be paid by
Ligand; provided, however, if the audit discloses that the royalties payable by
X-Ceptor for the audited period are more than *** of the royalties actually paid
for such period, then X-Ceptor shall pay the reasonable fees and expenses
charged by such accounting firm. If the accounting firm concludes that X-Ceptor
has overpaid its royalty obligation, the amount of the overpayment may be taken
as a credit against future royalties payable to Ligand hereunder.
5.3.3 X-Ceptor shall include in each permitted sublicense granted by it
pursuant to the Agreement a provision requiring the sublicensee to make reports
to X-Ceptor, to keep and maintain records of sales made pursuant to such
sublicense and to grant access to such records by Ligand's accounting firm to
the same extent required of X-Ceptor under the Agreement. Upon the expiration of
thirty-six (36) months following the end of any year, the calculation of
royalties payable with respect to such year shall be binding and conclusive upon
Ligand, X-Ceptor and its
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sublicensees, and such sublicensees shall be released from any liability or
accountability with respect to royalties for such year.
5.4 Confidential Financial Information. Ligand shall treat all financial
information subject to review under this Article 5 as confidential and shall
cause its accounting firm to retain all such financial information in
confidence; provided, however, that Ligand shall have the right to disclose to
third parties information required under any agreement with a third party
pertaining to technology of the third party included in the Exclusive Technology
and the Nonexclusive Technology and to publicly report information required of
it under federal or state financial disclosure laws.
ARTICLE VI
PAYMENTS
6.1 Payment Terms. Royalties shown to have accrued by each royalty report
provided for under Article 5 of this Agreement shall be due and payable on the
date such royalty report is due. Payment of royalties in whole or in part may be
made in advance of such due date.
6.2 Payment Method. All royalties and other payments by X-Ceptor to Ligand
under this Agreement shall be made by bank wire transfer in immediately
available funds to such account as Ligand shall designate before such payment is
due; provided, however, that any fees or taxes imposed on a transfer by a
non-United States Bank that would not be imposed on a transfer by a United
States Bank shall be paid by X-Ceptor. If at any time legal restrictions in any
country in the Territory prevent the prompt remittance in the manner set forth
in this Section 6.2 of part or all royalties owing with respect to Product sales
in such country, then the parties shall mutually determine a lawful manner of
remitting the restricted part of such royalty payments so long as such legal
restrictions exist.
6.3 Withholding Taxes. All amounts owing from X-Ceptor to Ligand under this
Agreement shall be paid without deduction to account for any withholding taxes,
value-added taxes or other taxes, levies or charges with respect to such amounts
payable on behalf of X-Ceptor, its Affiliates or sublicensees and any taxes
required to be withheld on behalf of X-Ceptor, its Affiliates or sublicensees in
any country within the Territory; provided, however, that X-Ceptor may deduct
the amount of any taxes imposed on Ligand which are required to be withheld or
collected by X-Ceptor, its Affiliates or sublicensees under the laws of any
country on amounts owing from X-Ceptor to Ligand hereunder to the extent
X-Ceptor, its Affiliates or sublicensees pay to the appropriate governmental
authority on behalf of Ligand such taxes. X-Ceptor shall promptly deliver to
Ligand proof of payment of such taxes together with copies of all communications
from or with such governmental authority with respect thereto.
6.4 Late Payments. Unless otherwise provided in this Agreement, X-Ceptor
shall pay interest to Ligand on the aggregate amount of any payments by X-Ceptor
that are not paid on or before the date such payments are due under the
Agreement at a rate per annum equal to the lesser of the prime rate of interest
as reported by Bank of America NT&SA in San Francisco,
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California, from time to time, plus *** or the highest rate permitted by
applicable law, calculated on the number of days such payment is more than
thirty (30) days delinquent.
ARTICLE VII
ENFORCEMENT OF LICENSED PATENTS IN THE EXCLUSIVE
TECHNOLOGY AND THE NONEXCLUSIVE TECHNOLOgy
7.1 X-Ceptor shall have no right to enforce a patent licensed or
sublicensed to X-Ceptor under this Agreement as part of the Exclusive Technology
or Nonexclusive Technology except as expressly provided in this Section 7.1. Any
right given X-Ceptor by Ligand under this Section 7.1 to enforce a patent shall
be, in the case of sublicensed patents, subject to the rights of Ligand's
licensor and shall not extend beyond Ligand's rights of enforcement, if any, and
shall be subject to any restrictions placed on Ligand. Except as so limited by
the foregoing sentence, X-Ceptor shall have the right to require Ligand to
assert its rights to enforce a patent licensed or sublicensed to X-Ceptor under
this Agreement for acts which would be infringing if carried out by X-Ceptor but
for the license granted hereunder provided that Ligand has had actual notice of
such acts of infringement and not abated such infringement or brought suit to
terminate such infringement within six (6) months of receipt of that notice. Any
action for infringement brought by Ligand under this Section 7.1 shall be at the
expense of X-Ceptor using counsel of Ligand's choice reasonably acceptable to
X-Ceptor. If a monetary recovery is obtained by Ligand by way of judgment or
settlement it shall go to X-Ceptor to the extent of the legal fees incurred by
Ligand and reimbursed by X-Ceptor. Any other recovery, to the extent not
required to be paid to a Ligand licensor shall be shared *** by Ligand and ***
by X-Ceptor. If the alleged infringer has committed acts of infringement in
addition to those within the scope of X-Ceptor's license, the expenses shall be
shared equally by X-Ceptor and Ligand and reimbursement to X-Ceptor shall be
from *** of any judgment obtained by Ligand and any recovery in excess of
expenses shall be reduced by *** before application of the sharing formula in
this Section 7.1
ARTICLE VIII
TRANSFER OF MATERIALS
8.1 Schedule and Manner of Materials Transfer. Ligand shall transfer a
quantity of each of the materials ("Materials") listed in the schedule in
Exhibit D to X-Ceptor to the extent they are available to Ligand, subject to any
restrictions placed on their transfer or use by a third party. The transfer of
these materials will be done after the Effective Date upon the request of
X-Ceptor. Ligand will provide to X-Ceptor (i) with respect to the plasmids
listed on Exhibit D, *** , and (ii) with respect to the *** listed on Exhibit D,
(a) *** which express such protein and (b) *** for such protein. If X-Ceptor
desires additional amounts of a Material, upon request by X-Ceptor Ligand shall
provide additional amounts not to exceed *** provided that the amount of a
requested
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Material to be provided will depend upon the amount available to Ligand
and, in no event, will Ligand be required to transfer such Material in an amount
which depletes its stock thereof.
8.2 Limitations on Use of Materials. Materials will be used by X-Ceptor
solely for experimental research purposes in X-Ceptor's laboratories. In this
regard, X-Ceptor will use the Materials in compliance with any applicable
Federal, State or local law or regulation. Any animal studies carried out by
X-Ceptor with Materials will be in accordance with the Declaration of Helsinki
and/or with the Guide for the Care and Use of Laboratory Animals as adopted and
promulgated by the National Institutes of Health, and that no animal used in the
scientific investigation of the Materials will be used for food purposes or be
kept as a domestic pet or livestock. Materials are to be used with caution and
prudence in any experimental work, since all of their characteristics are not
known and they are not to be used for testing in or treatment of human beings.
8.3 Restrictions on Transfer. The Materials provided X-Ceptor under this
Article VIII are transferable to other parties except where transfer is
restricted by Ligand's supplier of such Materials. Therefore, prior to any
transfer to a third party of such Materials, X-Ceptor will give notice to Ligand
of its intention to transfer and Ligand shall promptly advise X-Ceptor of any
applicable restrictions. X-Ceptor agrees to abide by the restrictions of
Ligand's suppliers.
8.4 No Other Licenses. No other right or license is granted to X-Ceptor for
these Materials, or to the use of these Materials, is granted or implied as a
result of Ligand's transfer of Materials to X-Ceptor.
8.5 No Warranty. Ligand makes no representation as to the identify, purity,
or activity of the Materials. THE MATERIALS ARE PROVIDED AS IS. LIGAND MAKES NO
WARRANTIES, EXPRESSED OR IMPLIED, IN CONNECTION WITH MATERIALS, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE. X-CEPTOR AGREES TO USE MATERIALS WITH THE CLEAR
UNDERSTANDING THAT LIGAND, ITS EMPLOYEES AND AGENTS HAVE NO LIABILITY IN
CONNECTION WITH MATERIALS OR THEIR USE, INCLUDING ANY LIABILITY FOR
COMPENSATORY, CONSEQUENTIAL, INCIDENTAL OR OTHER DAMAGES.
8.6 Ligand Chemical Library. Ligand shall. provide X-Ceptor with access to
Ligand's chemical compound library of approximately *** compounds, without
prejudice to Ligand's interests, upon reasonable terms and conditions to
include, without limitation, the reimbursement of Ligand's costs of making such
chemical compounds available to X-Ceptor, the quantities of such chemical
compounds to be provided to X-Ceptor and the timetable on which such chemical
compounds would be supplied to X-Ceptor.
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ARTICLE IX
TERM AND TERMINATION
9.1 Term. Unless sooner terminated in accordance with another provision of
this Article IX, this Agreement shall continue in full force and effect until
the later of (i) expiration of the last patent included in the Exclusive
Technology or the Nonexclusive Technology or (ii) expiration of the obligation
to pay a royalty to the extent that obligation continues beyond the expiration
of the last patent in the Exclusive Technology or Nonexclusive Technology.
9.2 Termination for Breach. This Agreement may be terminated by either
party upon the occurrence of a material breach of this Agreement which results
in a substantial diminution in the value of X-Ceptor as a whole by the other
party giving notice to the breaching party of an intention to terminate unless
the breach is cured within sixty (60) days of receipt of the notice, termination
being effective upon the expiration of the sixty (60) day period, unless the
party alleged to be in breach requests that designated representatives of the
parties meet and attempt to resolve the dispute within thirty (30) days
following the last day of the thirty (30) - day cure period (the "Resolution
Period") during which time the parties shall so meet and in good faith attempt
to resolve the dispute; and provided that if those designated representatives
are unable to reach agreement within the Resolution Period, the parties will
engage in good-faith mediation assisted by a neutral person mutually acceptable
to the parties during a period not to exceed thirty (30) days following the last
day of the Resolution Period (the "Mediation Period"), after which the party
alleging breach may then terminate this Agreement immediately provided that such
breach has not been cured. The parties agree to share equally the expenses of
the neutral person.
9.3 Termination in Bankruptcy. Either party may terminate this Agreement
upon the other party's bankruptcy or insolvency which remains uncured for a
period of sixty (60) days following the event which triggers such party's
bankruptcy or insolvency, to the extent permitted by applicable federal
bankruptcy laws.
9.4 Effect of Termination. Termination of this Agreement by Ligand shall
not relieve X-Ceptor or its sublicensees of the obligation to report and pay
royalties on sales of Products occurring after such termination. Upon
termination of this Agreement by X-Ceptor under Section 9.2 or 9.3, the licenses
granted in Articles III and VIII shall continue in full force and effect.
ARTICLE X
MISCELLANEOUS
10.1 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery, U.S. first class mail or courier), U.S. first
class mail or courier, postage prepaid (where applicable), addressed to such
other party at its address indicated below, or to such other address as the
addressee shall have last
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furnished in writing to the addressor and (except as otherwise provided in
this Agreement) shall be effective upon receipt by the addressee.
If to Ligand: Ligand Pharmaceuticals Incorporated
10275 Science Center Drive
San Diego, California 92121
Attention: General Counsel
Facsimile: (858) 550-1825
If to X-Ceptor: X-Ceptor Therapeutics, Inc.
10555 Science Park Drive, Suite B
San Diego, California 92121
Attention: Chief Executive Officer
Facsimile: ()
10.2 Applicable Law. The Agreement shall be governed by and construed in
accordance with the laws of the State of California without reference to its
conflicts of law provisions.
10.3 Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof. All express or implied
agreements and understandings, either oral or written, heretofore made are
expressly merged in and made a part of this Agreement. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by both parties hereto.
10.4 Headings. The captions to the several Articles and Sections hereof are
not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
10.5 Independent Contractors. It is expressly agreed that Ligand and
X-Ceptor shall be independent contractors and that the relationship between the
two parties shall not constitute a partnership, joint venture or agency. Neither
Ligand nor X-Ceptor shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior consent of the party to do so.
10.6 U.S. Export Laws and Regulations. Each party warrants and represents
to the other that it does not intend to, nor will it export from the United
States or reexport from any foreign country, or permit a third party to export
or reexport technology or technical information of the other party, to a country
where such export or reexport would be in violation of U.S. Export
Administration Regulations.
10.7 Waiver. The waiver by either party hereto of any right hereunder or
the failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
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10.8 Additional Remedies. Any remedy provided in this Agreement shall be in
addition to, and not in lieu of, any other remedy that a party shall have at law
or in equity.
10.9 Assignment. Ligand may not assign this Agreement without the prior
written consent of X-Ceptor except in connection with transfer or sale of all or
substantially all of its business pertaining to this Agreement, or in the event
of its merger or consolidation or change of control or similar transaction;
provided Ligand may assign its rights (but not its obligations) under this
Agreement without the prior written consent of X-Ceptor. This Agreement may not
be assigned by X-Ceptor during the term of the Ligand Option. After the
expiration of the Ligand Option without it having been exercised, X-Ceptor may
not assign this Agreement without the prior written consent of Ligand except in
connection with transfer or sale of all or substantially all of its business
pertaining to this Agreement, or in the event of its merger or consolidation or
change of control or similar transaction.
10.10 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
X-CEPTOR THERAPEUTICS, INC. LIGAND PHARMACEUTICALS INCORPORATED
By: /s/ Kevin Kinsella By: /s/ David E. Robinson
Title: Chairman, President & CEO Title:
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EXHIBIT A
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Orphan Receptor Technology Patent Numbers
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EXHIBIT A
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Orphan Receptor Technology U.S. Series No., Patent
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EXHIBIT B
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Research Tools Patent Numbers
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EXHIBIT B
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Research Tools U.S. Serial No., Patent
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EXHIBIT C
I. License Agreement dated October 20, 1998 between Salk Institute for
Biological Studies and Progenx Incorporated, as amended through the
Effective Date by the First Amendment dated September 15, 1989, the Second
Amendment dated December 1, 1989 substituting Ligand Pharmaceuticals
Incorporated for Progenx Incorporated and the Third Amendment dated October
20, 1990
II. Exclusive License Agreement dated January 4, 1990 between Baylor Coollege
of Medicine and Ligand Pharmaceuticals Incorporated for ***
III Sponsored Research and License Agreement dated March 9, 1992 between Baylor
College of Medicine and Ligand Pharmaceuticals Incorporated, as amended
through the Effective Date by the First Amendment dated September 1, 1992,
and the Second Amendment dated April 2, 1997.
IV. License Agreement dated March 31, 1994 between Baylor College of Medicine
and Ligand Pharmaceuticals Incorporated
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EXHIBIT D
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EXHIBIT D
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