License Agreement - Isis Innovation Ltd. and TolerRx Inc.
DATED 1 FEBRUARY 2001
(1) ISIS INNOVATION LIMITED
(2) TOLERRX, INC
Licence of the Stealth Technology
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[*******] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
THIS AGREEMENT dated 1 February 2001 (the "EFFECTIVE DATE") is made BETWEEN:
(1) ISIS INNOVATION LIMITED a company registered in England (No. 02199542),
whose registered office is at University Offices, Wellington Square,
Oxford OX1 2JD, England (the "LICENSOR"); and
(2) TOLERRX, INC., a Delaware corporation whose principal place of business
is at 675 Mass Ave., Cambridge, MA 02139 (the "LICENSEE").
1. DEFINITIONS
For the purposes of this Agreement, the following definitions apply:
(a) "Affiliate" means with respect to a party, an entity that
controls, is controlled by or is under common control with a party. As
used herein, "control" means possession, of the power to direct or cause
the direction of the management and policies whether through the
ownership of voting securities, by contract or otherwise.
(b) "Fields" mean: i. the prevention and treatment of human diseases
and disorders; and ii. the diagnosis and monitoring of or susceptibility
to human diseases.
(c) "Improvement" means any development of the Licensed Technology
claimed in a patent or patent application which, if commercially
practised, would infringe and/or be covered by a claim being prosecuted
in a patent application included in the Licensed Technology, or by a
Valid Claim of any issued patent included in the Licensed Technology.
(d) "Licence" means the licence granted to the Licensee pursuant to
clause 2.2(a).
(e) "Licence Year" means each twelve month period of this Agreement
commencing on the Effective Date or an anniversary of the Effective Date
and ending on the subsequent anniversary of the Effective Date.
(f) "Licensed Product" means any product or composition but for this
license infringes a Valid Claim of any patent or patent application,
pending for no longer than seven years, included in the Licensed
Technology in the country where sold.
(g) "Licensed Technology" means U.K. Patent Application No. 0024673.6
filed on 9 October 2000 and any patent application filed in the world
based on that application, including any division, continuation, or
continuation-in-part thereof and any foreign patent application or
equivalent corresponding thereto and any Letters Patent or the
equivalent thereof issuing thereon or reissue, re-
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examination or extension of any of the foregoing, and any patent or
equivalent thereof based on any of the foregoing.
(h) "Licensee Improvements" means the Improvements described in
clause 5.13.
(i) "Licensor Improvements" means the Improvements described in
clause 4.2.
(j) "Net Sales" means the gross selling price of the Licensed Product
in the form in which it is sold or leased to a customer after regulatory
approval thereof by Licensee (as recorded in the standard customer
pricing records of the Licensee if and to the extent that such records
are applicable to the Licensed Product in question), after deducting:
(i) transportation charges or allowances, including freight pickup
allowances, and shipping packaging costs, if any; (ii) trade, quantity
or cash discounts, if any, allowed or paid; (iii) credits or allowances,
if any, given or made on account of returns, any and all Federal, state
or local government rebates, whether in existence now, or enacted at any
time during the term of this Agreement, rejections, recalls or
destruction (voluntarily made or requested or made by an appropriate
government agency, sub-division or department) for the Licensed Product;
(iv) any tax, excise or other governmental charge upon or measured by
the production, sale, transportation, delivery or use of the Licensed
Product, exclusive of income tax; (v) any government mandated surcharge,
levy, tax or assessment to fund a compensation program or reserve for
persons injured or alleged to be injured by the Licensed Product; and
(vi) a reasonable allowance for bad debt.
It is understood that a Licensed Product may be marketed in a
combination package containing other products or materials or in
combination with active ingredients that are not Licensed Product. Where
a Licensed Product is marketed in combination with other products or
materials, the Net Sales for the purpose of determining royalty payments
will be calculated in accordance with the following formula:
NS = A x B
-----
B + C
Where:
NS means the Net Sales for the purpose of determining royalty payments;
A means the net sales of the combination package;
B means the gross sales of the Licensed Product during the royalty
period if sold separately; and
C means the aggregate of the gross sales of the other products or
materials during the royalty period if sold separately.
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In the event that there are no separate sales of the Licensed Product
during the royalty period:
B means the standard fully-absorbed cost to the Licensee of the Licensed
Product, calculated in accordance with generally accepted accounting
principles; and
C means the aggregate of the standard, fully-absorbed costs to the
Licensee of the other products or materials, calculated in accordance
with generally accepted accounting principles.
(k) "University" means the Chancellor Masters and Scholars of the
University of Oxford whose administrative offices are at Wellington
Square, Oxford OX1 2JD, England.
(l) "Valid Claim" means a claim of an issued patent which has not
lapsed or become abandoned or disclaimed or been declared invalid or
unenforceable by a court of competent jurisdiction or an administrative
agency from which no appeal can be or is taken.
2. GRANT
2.1 The Licensor reserves the right to grant to the University a licence for
the University and every employee, student, agent and appointee of the
University to use and publish the Licensed Technology and any Licensor
Improvement made under clause 4.2 for academic and research purposes:
and this will include the right for the University to use the Licensed
Technology as enabling technology in other research projects (including
projects which benefit from third-party funding received from commercial
entities).
2.2 (a) The Licensor grants to the Licensee a licence in, to and under the
Licensed Technology world-wide to make, have made, use, sell, offer to
sell, and import Licensed Product in the Fields. Subject only to clause
2.1, the Licence shall be exclusive. The Licensee recognises that this
Agreement confers no rights in relation to products intended or adapted
for other fields.
(b) The Licensor agrees to provide Licensee with samples of genetic
material, clones and proteins contained in the Licensed Technology that
are in the possession of Licensor at the date of this Agreement.
3. CONFIDENTIALITY
3.1 During the term of this Agreement, it is contemplated that each party
will disclose to the other proprietary and confidential technology,
inventions, technical information, biological materials and the like,
which are owned or controlled by the party providing such information or
which that party is obligated to maintain in confidence and which is
designated by the party
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providing such information as confidential ("CONFIDENTIAL INFORMATION").
Subject to the other terms of this Agreement, each party agrees to
retain the other party's Confidential Information in confidence and not
to disclose any such Confidential Information to a third party without
the prior written consent of the party providing such information and to
use the other party's Confidential Information only for the purposes of
this Agreement, which obligation shall terminate five (5) years after
the expiration or termination of this agreement.
3.2 The obligations of confidentiality will not apply to Confidential
Information which:
(i) was known to the receiving party or generally known to the public
prior to its disclosure hereunder including, but not limited to,
publication in a patent or patent application;
(ii) subsequently becomes known to the public by some means other than
a breach of this Agreement, including, but not limited to,
publication in a patent or patent application;
(iii) is subsequently disclosed to the receiving party by a third party
having a lawful right to make such disclosure;
(iv) is required by law or bona fide legal process to be disclosed,
provided that the party required to make the disclosure takes all
reasonable steps to restrict and maintain confidentiality of such
disclosure and provides reasonable notice to the party providing
the Confidential Information;
(v) is approved for release by the parties;
(vi) is independently developed by the employees or agents of either
party without any knowledge of the Confidential Information
provided by the other party; or
(vii) is disclosed to a government body, agency or authority as
required by applicable law, rule, or regulation or in order to
obtain regulatory approval for or authorization to market and
sell Licensed Product, provided such Confidential Information is
marked "Confidential" at the time of disclosure.
3.3 Notwithstanding the foregoing, the parties shall have the right to
disclose Confidential Information to a third party who undertakes an
obligation of confidentiality and non-use with respect to such
information, at least as restrictive as the obligations under sub-clause
3.1 and 3.2.
3.4 In the event that Confidential Information of Licensor becomes publicly
available as a result of the Licensee's breach of its confidentiality
obligations under this Agreement or as a breach of such confidentiality
obligations owed by an entity that receives the Licensor's Confidential
Information from the Licensee, the Licensee will continue paying
royalties under clause 6, without prejudice to the payment of any
additional damages in the event of the Confidential Information becoming
publicly known as a result of breach of this Agreement.
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4. UNDERTAKINGS BY THE LICENSOR
4.1 The Licensor warrants and represents to the Licensee that it has the
full right and authority to enter into this Agreement, and that it is
not aware of any impediment which would inhibit its ability to perform
the terms and conditions imposed on it by this Agreement.
4.2 The Licensor will communicate to the Licensee any Improvements which the
Licensor makes to the Licensed Technology. The Licensor and the Licensee
may enter into negotiations with respect to the Licensee licensing the
Licensor Improvements from the Licensor.
4.3 The Licensor will inform the Licensee of any misappropriation or
infringement of the Licensed Technology of which the Licensor becomes
aware.
5. UNDERTAKINGS BY THE LICENSEE
5.1 The Licensee may grant sub-licences and may disclose to sub-licensees
such of the Licensed Technology as is necessary for the exercise of the
rights sub-licensed. The Licensee may also grant sub-licensees the right
to grant sub-licences, but only with the prior written consent of the
Licensor (which shall not be unreasonably withheld). Immediately
following the grant of each sub-licence, the Licensee will forward to
the Licensor in writing a note of the name and address of the
sub-licensee, a description of the technology sub-licensed and its
intended applications, and confirmation of the duration of the
sub-licence. By controlling the wording of its contracts with
sub-licensees, the Licensee will ensure that the sub-licensees are
subject to the confidentiality obligations in clause 3 of this Agreement
in order to protect the intellectual property rights in the Licensed
Technology, and the interests of the Licensor therein; and that in no
circumstances do the terms of any sub-licence in force from time to time
conflict with the terms of this Agreement.
5.2 The Licensee will be responsible for the design and construction of the
Licensed Products and the Licensor will have no responsibility or
liability in that respect.
5.3 The Licensee will ensure that the Licensed Products and the packages
associated with them are marked suitably with any relevant patent or
patent application numbers of Licensed Technology to satisfy the laws of
each of the countries in which the Licensed Products are sold or
supplied and in which they are covered by the claims of any patent or
patent application of Licensed Technology, to the intent that the
Licensor shall not suffer any loss or loss of damages in an infringement
action.
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5.4 (a) Taking into account the complexity, and stage of development of
the Licensed Technology, the Licensee shall select and use reasonable
commercial efforts under the circumstances to research, develop and then
commercialize the Licensed Technology. The efforts of the Licensee's
sub-licensee or a person or entity performing work for Licensee under a
contract negotiated at arm's length shall be considered as efforts of
Licensee.
(b) In the event that Licensor reasonably believes that Licensee is
not making reasonable commercial efforts under the circumstances to
research, develop and then commercialize the Licensed Technology
pursuant to sub-clause 5.4(a), then Licensor shall provide written
notice to Licensee which specifies Licensor's basis for such belief and
what additional efforts Licensor believes should be made by Licensee.
Upon receipt of such written notice, Licensor and Licensee shall enter
into good faith negotiations in order to reach mutual agreement as to
what efforts by Licensee shall satisfy the requirements of clause
5.4(a), and if such mutual agreement is not reached within thirty (30)
days after receipt of such written notice, then the parties agree to
submit to arbitration pursuant to clause 11.8 to determine the efforts
which should be exerted by Licensee. Thereafter, Licensee shall exert
the efforts determined by the parties or in such arbitration.
(c) Within sixty (60) days after the end of each calendar year of
this Agreement, Licensee shall provide Licensor with a report detailing
progress made and steps taken during that calendar year and plans for
the next calendar year in:
(i) applying for and defending any patent, design, trade
mark, copyright and other registrations which may be
available for the protection of the Licensed Technology;
(ii) taking legal action against any misappropriation or
infringement of the Licensed Technology of which the
Licensee becomes or is made aware;
(iii) developing the Licensed Technology in order to facilitate
its commercial exploitation, including, without
limitation:
- identification of generic approaches or process to
finding peptide blockers of appropriate affinities
for any given antibody;
- identification of suitable linkers for the purpose of
constructing engineered blockers;
- identification of suitable cleavable linkers that
might have practical applications IN VIVO;
- identification of a universal blocking peptide that
interacts with the framework of all antibody
combining sites, and
(iv) promoting and marketing Licensed Products.
5.5 Subject to clause 5.6, the Licensee shall file, prosecute and maintain
patent applications and patents directed to the Licensed Technology in
the name of the Licensor through patent counsel selected by Licensee and
approved by the Licensor (which approval shall not be unreasonably
withheld or delayed) who shall consult with and keep Licensor advised
with respect thereto. After the Effective Date of this Agreement,
Licensee shall bear the cost and expense for the filing, prosecution and
maintenance of Licensed Technology in the United
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States, European Patent Office and subsequent national filings which
derive from it, Japan, Canada and Australia and any other foreign
countries mutually agreed by the Licensee and the Licensor. If, in good
faith, the Licensor believes a patent may be granted in a country but
the Licensee is unwilling to bear the cost and expense for filing,
prosecuting and maintaining the patent in that country, the Licensor may
instruct the patent counsel selected by the Licensee at its own cost to
file, prosecute or maintain the Licensed Technology in that country, and
the country in question shall be removed from the scope of this
Agreement.
5.6 With respect to Licensed Technology, each patent application, office
action, response to office action, request for terminal disclaimer, and
request for reissue or reexamination of any patent issuing from such
application shall be provided to Licensor for Licensor's comments at
least fourteen days prior to filing in a patent office. In the absence
of comments from Licensor, Licensee shall have the right to file any
such paper. Licensor shall have the right to take any action that in its
judgement is necessary to preserve such patents.
5.7 The Licensor shall co-operate with Licensee with respect to filing,
prosecution and maintenance of Licensed Technology and shall use
reasonable endeavours to cause the inventors to co-operate.
5.8 The Licensee will inform the Licensor of any misappropriation or
infringement of the Licensed Technology of which the Licensee becomes
aware.
5.9 (a) Subject to clause 5.10, if any of the Licensed Technology under
which Licensee is licensed hereunder is infringed by a third party,
Licensee shall have the right and option but not the obligation to bring
an action for infringement, at its sole expense, against such third
party in the name of Licensor and/or in the name of Licensee, and to
join Licensor as a party plaintiff if required. Licensee shall promptly
notify Licensor of any such infringement and shall keep Licensor
informed as to the prosecution of any action for such infringement. No
settlement, consent judgement or other voluntary final disposition of
the suit which adversely affects Licensed Technology may be entered into
without the consent of Licensor, which consent shall not unreasonably be
withheld.
(b) Any recovery of damages by Licensee for any such suit shall be
applied first in satisfaction of any unreimbursed expenses and legal
fees of Licensee relating to the suit and the remainder thereof shall be
retained by Licensee and treated as Net Sales subject to royalty under
this Agreement.
5.10 At the written request of the Licensor, the Licensee shall be obliged to
bring an action for any misappropriation or infringement of the Licensed
Technology at its sole expense against a third party, in any one
jurisdiction where the misappropriation or infringement is occurring,
where:
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(a) the third party is selling a product substantially identical to a
Licensed Product sold by TolerRx (the "Third Party Product") that
infringes an issued patent included in the Licensed Technology;
and
(b) the aggregate sales of the Third Party Product exceed
US$[*******] and are equal to or greater than [*******] of the
world-wide sales of such Licensed Product sold by TolerRx; and
(c) in the opinion of an independent patent attorney, there is
reasonable likelihood that such an action would be successful.
5.11 In the event that Licensee elects not to pursue an action for
infringement, upon written notice to Licensor by Licensee that an
unlicensed third party is an infringer of Licensed Technology, Licensor
shall have the right and option, but not the obligation at its cost and
expense to initiate infringement litigation and to retain any recovered
damages.
5.12 In any infringement suit either party may institute to enforce the
rights in Licensed Technology pursuant to this Agreement, the other
party hereto shall, at the request of the party initiating such suit,
cooperate in all respects and, to the extent possible, have its
employees testify when requested and make available relevant records,
papers, information, samples, specimens, and the like. All reasonable
out-of-pocket costs incurred in connection with rendering cooperation
requested hereunder shall be paid by the party requesting cooperation.
5.13 (a) The Licensee will communicate to the Licensor any Improvements
which the Licensee makes to the Licensed Technology.
(b) The Licensee will, on a case-by-case basis and subject to the
Licensee's consent, grant the Licensor a non-exclusive, royalty-free
license to use the Licensee's Improvements for academic and research
purposes only, with the right to grant a sub-license only to the
University and every employee, student, agent and appointee of the
University to use the Licensee's Improvements for academic research
purposes only, and the University shall have no right to grant
sublicenses. For the avoidance of doubt, the license granted under this
clause 5.13(b) shall only take effect if Licensee provides written
consent to such license and if Licensee has the right to grant such
license, provided that Licensee uses reasonable endeavors to ensure that
its contracts with third parties do not preclude the Licensee from
granting the license under this clause 5.13(b). University shall have
the ability to publish results obtained using Licensee's Improvements
licensed to Licensor and sublicensed to the University subject to the
confidentiality provisions of clauses 3.1 and 3.2.
5.14 The Licensee warrants and represents to the Licensor that it has the
full right and authority to enter into this Agreement, and that it is
not aware of any impediment which would inhibit its ability to perform
the terms and conditions imposed on it by this Agreement.
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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6. PAYMENT
6.1 The Licensee must pay to the Licensor all of the costs incurred by the
Licensor prior to the date of this Agreement in filing UK Patent
Application No. 0024673.6 to an amount not exceeding [*******] within
thirty (30) days of receiving an invoice for such amount from the
Licensor.
6.2 The Licensee must pay to the Licensor the sum of [*******] on the
signature of this Agreement.
6.3 (a) For as long as any Licensed Products are used or marketed by the
Licensee, the Licensee will pay royalties to the Licensor equal to the
following percentages of all Net Sales of Licensed Products sold by the
Licensee and gross up-front and milestone (as opposed to
periodically-recurring or running-earned) consideration received by the
Licensee under or in respect of sub-licences granted by the Licensee
with respect to the Licensed Technology in each Licence Year:
CUMULATIVE NET SALES AND GROSS UP-
FRONT CONSIDERATION PERCENTAGE
Net Sales and gross up-front consideration [*******]
of up to [*******] in a Licence Year
Net Sales and gross up-front consideration [*******]
of greater than [*******] up to [*******]
in a Licence Year
Net Sales and gross up-front consideration [*******]
of over [*******] in a Licence Year
Subject to the following, no royalties shall be payable under this
sub-clause 6.3 with respect to payments made to the Licensee by a
sub-licensee for stock or equity or for research performed or to be
performed by the Licensee specifically relating to the development of
the Licensed Technology. Where a sub-licensee or a third party who, at a
later stage, becomes a sub-licensee (a "PURCHASER"), purchases stock or
equity in the Licensee, royalties will be payable in accordance with
this sub-clause 6.3 on the amount paid by the Purchaser to the Licensee
for that stock or equity to the extent that the amount paid by the
Purchaser exceeds the fair market value for that stock or equity, and
such excess is disguised consideration for the sub-licence. If there is
a dispute as to the fair market value, it shall be submitted to
arbitration under clause 11.8.
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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(b) The amounts paid by Licensee under Clause 6.3(a) based on
milestones received under or in respect of sublicenses shall be fully
creditable until exhausted against any amount owed by Licensee under
Clause 6.6.
6.4 For as long as the Licensee sub-licenses the Licensed Technology, the
Licensee will pay royalties to the Licensor of [*******] of all
royalties paid to Licensee by a sublicensee for sales of a Licensed
Product.
6.5 In the event that the royalties paid to the Licensor under clauses 6.3
and 6.4 in a Licence Year do not exceed the following amounts in respect
of the relevant Licence Year (the "MINIMUM SUM"), the Licensee must make
up the difference between the aggregate of the royalties paid and the
Minimum Sum in that Licence Year; and will do so concurrently with the
report under clause 5.4(c) which immediately follows the end of the
period:
LICENCE YEAR MINIMUM SUM
The 12-month period which [*******]
begins on the Effective Date
("LICENCE YEAR 1")
The next 12 month period [*******]
(i.e. beginning on the first
anniversary of the Effective
Date) ("LICENCE YEAR 2")
Licence year 3 [*******]
Licence Year 4 [*******]
Licence Year 5 and Licence Year 6 [*******]
In the event that no royalties are due to the Licensor in a Licence
Year, the Licensee must pay the Minimum Sum to the Licensor.
The payments under this Clause 6.5 shall terminate on the earlier of the
end of Licence Year 6 or the initiation of a Phase I Clinical Trial for
a Licensed Product.
6.6 The Licensee will pay to the Licensor the following non-refundable
non-creditable milestone payments within thirty (30) days after the
occurrence of the specified events (including, for the avoidance of
doubt, where the specified events are performed by a sub-licensee) (the
"MILESTONES") in respect of only the first Licensed Product produced by
the Licensee:
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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EVENT AMOUNT
Demonstration of tolerance induction [*******]
IN VIVO to an antibody engineered to
contain sequences from a species
different than the experimental
animals
Initiation of Phase I clinical trials [*******]
Initiation of Phase II clinical trials [*******]
Initiation of Phase III clinical trials [*******]
Entering into first sub-licence by [*******]
Licensee
Grant of patent in respect of the [*******]
Licensed Technology in the first of
the European Union, the United States
of America, Japan, Canada or Australia.
6 months from the Effective Date [*******]
6.7 The Licensee acknowledges that the range of Net Sales used for changing
royalty rates under Section 6.3 and gross up-front considerations set
out in clause 6.3, the Minimum Sums and the amounts payable in respect
of the Milestones will be indexed to the CPI-U (Consumer Price Index -
All Urban Consumers) and will be adjusted at the end of each Licence
Year to take account of increases in the CPI-U in the preceding year.
The Licensor will notify the Licensee of any increase in the range of
Net Sales and gross up-front considerations set out in clause 6.3, the
Minimum Sums and the amounts payable in respect of the Milestones as a
result of an increase in the CPI-U in writing at least 30 days before
the end of each Licence Year.
6.8 The Licensee shall provide the Licensor with a royalty report within
sixty (60) days after the close of each calendar quarter for each
Licensed Product marketed, and for each Licensed Product brought into
use by or within the groups of the Licensee, sub-licensees and
sub-sub-licensees. Each report shall set out the Net Sales and all gross
revenues received from sub-licensees, provide a calculation of the
royalties due and shall be accompanied by payment to the Licensor of the
royalties due.
6.9 In marketing the Licensed Products, the Licensee will not accept or
solicit any non-monetary consideration without the prior written consent
of the Licensor. The use by the Licensee of a commercially reasonable
quantity of Licensed Products for promotional sampling shall not violate
this prohibition.
6.10 In the case of a Licensed Product which is not marketed, but rather
manufactured by the Licensee or a sub-licensee for use by that party, or
within
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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that party's group, the term "Net Sales" shall mean [*******] of the
gross selling price of the Licensed Product in the form in which it is
normally sold, as recorded in the standard customer pricing records of
the Licensee or the sub-licensee if and to the extent that such records
are applicable to the Licensed Product in question, or as ascertained by
applying reasonable uplifts to the standard, fully-absorbed cost of the
Product to the Licensee, sub-licensee if and to the extent that those
records are not so applicable. For the avoidance of doubt, this clause
shall not apply to Licensed Product used by the Licensee or within the
Licensee's group solely for the purposes of internal research or solely
for the purposes of internal quality control.
6.11 For the purpose of calculating running-earned royalties under this
clause, a Licensed Product shall be regarded as sold or leased by the
Licensee or a sub-licensee when invoiced, or if not invoiced, when
shipped or delivered by the Licensee or sub-licensee. If a Licensed
Product marketed by the Licensee or a sub-licensee is sold to an
Affiliate for re-sale, the royalty on each such Licensed Product so
re-sold shall be calculated on the highest of the prices at which it is
(i) marketed or sold to an Affiliate for re-sale or (ii) re-sold;
provided, however, that in no event shall royalty be paid more than once
on each Licensed Product.
6.12 Subject to the following, if the Licensee or a sub-licensee is obliged
to pay royalties to third parties (other than the Licensee's Affiliate),
for the right to make, use or sell a Licensed Product, then the Licensee
shall be entitled to deduct from the royalty payment due to the Licensor
a portion of the royalty payment actually made to such third party as
the Licensee has negotiated with the Licensor, but in any event, not
greater than [*******] of the royalty payment due to the Licensor. This
clause 6.12 will not apply until the Licensee is obliged to pay in the
aggregate to third parties and Licensor more than [*******] of Net Sales
in royalties and will only apply to the amount of royalties payable to
third parties which exceed [*******] of Net Sales.
6.13 All payments provided for under this clause 6 shall be made to the
Licensor in US dollars without any deductions apart from any tax which
is required to be withheld under applicable local law. Any exchange of
currency made to calculate sales for the purpose of this clause 6 shall
be determined as at the last business day of each quarter, using the
average of the average daily buying and selling rates quoted by Barclays
Bank plc during that quarter. Where the Licensee is required to withhold
tax under applicable local law, the Licensee shall deduct such tax, pay
it to the relevant taxing authority, and supply the Licensor with a
Certificate of Tax Deduction at the time of payment to the Licensor. The
parties shall co-operate under any applicable Double Taxation Treaty so
that, if possible, payments are made gross or, if payment gross is not
possible, the Licensor obtains appropriate relief under the Treaty.
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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6.14 Where the Licensee is obliged to make a payment to the Licensor under
this Agreement which attracts value-added, sales, use, excise or other
similar taxes or duties, the Licensee shall be responsible for paying
such taxes and duties.
6.15 In the event that full payment of any amount due from the Licensee to
the Licensor under this Agreement is not made by any of the dates
stipulated, the Licensee shall be liable to pay interest on the amount
unpaid at the rate of two percent (2%) over the base rate for the time
being of Barclays Bank plc, from the date when payment was due until the
date of actual payment.
6.16 The Licensee and the Licensee's sub-licensees shall keep complete and
accurate accounts of all Licensed Products used and marketed; and will
permit the Licensor through an independent certified accountant to audit
such accounts on at least thirty (30) days' written notice and no more
than once each calendar year solely for the purpose of determining the
accuracy of the royalty reports and payments. The Licensee's obligation
and that of the Licensee's sub-licensees concerning audit of their
accounts shall terminate as to any report three (3) years after the date
of that report.
7. DURATION AND TERMINATION
7.1 This Agreement shall take effect on the date of signature and (subject
to the remaining sub-clauses of this clause) shall continue in force
until the expiration of the period of 10 years thereafter, provided
however, that such terms shall be extended with respect to each patent
or patent application that is Licensed Technology for the life of that
issued patent.
7.2 If either party commits a material breach of Clause 3.1, 5.1, 5.5, 5.6,
5.10, 5.13(a), 6 or 8 of this Agreement or fails to exert the efforts
determined by the parties or by arbitration under clause 5.4(c) and the
breach or failure is not remedied (where remediable) within the period
allowed by notice given by the other party in writing calling on the
party in breach to effect such remedy or failure (such period being not
less than thirty (30) days), the other party may by further written
notice terminate this Agreement immediately.
7.3 PURPOSELY OMITTED
7.4 The Licensee may terminate this Agreement at any time by serving not
less than three (3) months' written notice on the Licensor.
7.5 The Licensor shall have the right to terminate this Agreement by serving
written notice on the Licensee in the event that the Licensee files a
voluntary petition in bankruptcy, is adjudicated a bankrupt, makes a
general assignment for the benefit of creditors, or fails to discharge
within 30 days an involuntary petition in bankruptcy filed against it.
Such notice may terminate their Agreement either immediately or at the
end of such period as the Licensor shall select.
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7.6 Clauses 3, 5.12, 7.8, 7.9, 7.10, 7.11, 8 and 11.4 shall survive the
termination or expiration of this Agreement for whatever reason.
7.7 This Agreement may be terminated only as set forth in this clause 7.
7.8 Upon any termination of this Agreement, Licensee, at its option, shall
be entitled to finish any work-in-progress which is completed within six
(6) months of termination of this Agreement and to sell any completed
inventory of a Licensed Product covered by this Agreement which remains
on hand as of the date of the termination, so long as Licensee pays to
Licensor the royalties applicable to said subsequent sales in accordance
with the same terms and conditions as set forth in this Agreement.
7.9 In the event that this Agreement and/or the rights and licenses granted
under this Agreement to Licensee are terminated, any sublicense granted
under this Agreement shall remain in full force and effect as a direct
licence between Licensor and the sub-licensee under the terms and
conditions of this Agreement, subject to the sub-licensee agreeing to be
bound to Licensor under such terms and conditions within thirty (30)
days after Licensor provides written notice to the sub-licensee of the
termination of Licensee's rights and licenses under this Agreement. At
the request of Licensee, Licensor will acknowledge to a sub-licensee,
Licensor's obligations to the sub-licensee under this paragraph.
7.11 On termination of this Agreement, howsoever caused, the Licensee agrees
that, at the request of the Licensor, it will negotiate with the
Licensor in good faith a royalty-bearing licence on reasonable
commercial terms of the Licensee's Improvements to the Licensor. The
parties agree, however, that in no event is the Licensee obliged to
grant such a licence to the Licensor and either Licensee or Licensor
will have the right to terminate such negotiations at any time by
written notice to the other party.
8. LIABILITY
8.1 (a) The Licensee agrees to indemnify the Licensor and hold the Licensor
harmless from and against any and all claims, damages and liabilities
asserted by third parties (including claims for negligence) which arise
directly or indirectly from the use of the Licensed Technology or the
sale of Licensed Products by the Licensee and its sub-licensees.
(b) The Licensee shall have the right to control the defence, settlement
or compromise of any such action and shall select counsel for such
defence.
(c) The Licensor shall promptly notify the Licensee of any claim or
threatened claim under this sub-clause 8.1(a) and shall fully co-operate
with all reasonable requests of the Licensee with respect thereto.
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(d) Licensee's indemnification under (a) shall not apply to any
liability, damage, loss or expense to the extent that it is directly and
solely attributable to the intentional misconduct of the Indemnitees.
8.2 The Licensor makes no representation or warranty that advice given to
the Licensee pursuant to this Agreement by any employee, student, agent
or appointee of the Licensor or of the University of Oxford, or the use
of any works, designs or information which they, the Licensor or the
University provide in connection with this Agreement, will not result in
infringement of third-party rights.
8.3 The Licensee undertakes to make no claim against any employee, student,
agent or appointee of the Licensor or of the University of Oxford, being
a claim which seeks to enforce against any of them any liability
whatsoever in connection with this Agreement or its subject-matter. It
is understood that this clause 8.3 does not prevent the Licensee from
asserting a claim(s) against the Licensor.
8.4 The liability of either party for any breach of this Agreement, or
arising in any other way out of the subject-matter of this Agreement,
will not extend to any incidental or consequential damages or losses or
to any loss of profits.
8.5 The Licensor's maximum liability with respect to payment of damages
awarded to the Licensee by a court of law under or otherwise in
connection with this Agreement or its subject matter, shall be the
return of all royalty, Milestone and up-front payments paid by the
Licensee under this Agreement, together with interest on the balance of
such moneys from time to time outstanding, accruing from day to day at
two percent over the Barclays Bank plc base rate from time to time in
force and compounded annually as at 31 December and if the damages
awarded exceed such amount, such excess may be credited against future
royalties and milestones owed by Licensee under this Agreement, as and
when they become due.
8.6 If any sub-clause of this clause 8 is held to be invalid or
unenforceable under any applicable statute or rule of law, then it shall
be deemed to be omitted, and if as a result any party becomes liable for
loss or damage which would otherwise have been excluded, then such
liability shall be subject to the remaining sub-clauses of this
clause 8.
9. FORCE MAJEURE
If the performance by either party of any of its obligations under this
Agreement (other than an obligation to make payment) shall be prevented
by circumstances beyond its reasonable control, then such party shall be
excused from performance of that obligation for the duration of the
relevant event.
10. NOTICES
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The Licensor's representative for the purpose of receiving payments and
notices shall until further notice be:
The Managing Director
Isis Innovation Limited
Ewert House, Ewert Place
Summertown
OXFORD OX2 7DD
England.
The Licensee's representative for the purpose of receiving notices shall
until further notice be:
TolerRx, Inc.
675 Mass. Ave.
Cambridge, MA 02139
Attn: CEO
11. GENERAL
11.1 Clause headings are inserted in this Agreement for convenience only, and
they shall not be taken into account in the interpretation of this
Agreement.
11.2 Nothing in this Agreement shall create, imply or evidence any
partnership or joint venture between the Licensor and the Licensee or
the relationship between them of principal and agent.
11.3 This Agreement constitutes the entire agreement between the parties with
regard to the Licence. Specifically, but without limitation, this
Agreement does not impose or imply any obligation on the Licensor or the
University of Oxford to conduct development work: any arrangements for
such work shall be the subject of a separate agreement between the
University and the Licensee. Any variation of this Agreement shall be in
writing and signed by authorised signatories for both parties.
11.4 This Agreement shall be governed by English Law. Except as provided in
clause 11.8, the Licensee submits to the non-exclusive jurisdiction of
the English courts with respect to any dispute which may arise out of or
in connection with this Agreement.
11.5 If any one or more clauses or sub-clauses of this Agreement would result
in this Agreement being prohibited pursuant to any competition law, then
it or they shall be deemed to be omitted. The parties shall uphold the
remainder of this
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Agreement, and shall negotiate an amendment which, as far as legally
feasible, maintains the economic balance between the parties.
11.6 This Agreement shall not be assignable by either of the parties without
the prior written consent of the other party (which consent shall not be
unreasonably withheld), except that Licensee without the consent of
Licensor may assign this Agreement to an Affiliate or to a successor in
interest or to a transferee of all or substantially all of the portion
of the business to which this Agreement relates after giving the
Licensor reasonable prior notice of such assignment.
11.7 Subject to the limitations on assignment herein, this Agreement shall be
binding upon and inure to the benefit of said assigns of Licensee and
Licensor. Any such assignee of a party's interest shall expressly assume
in writing the performance of all the terms and conditions of this
Agreement to be performed by said party.
11.8 Any dispute, controversy or claim arising under sub-clause 5.4(c) or 6.3
of this Agreement will be submitted to mediation in accordance with the
WIPO Mediation Rules. The place of mediation will be London. The
language to be used in the mediation will be English. If, and to the
extent that, any such dispute, controversy or claim has not been settled
pursuant to the mediation within 60 days of the commencement of the
mediation, it will, upon the filing of a request for arbitration by
either party, be referred to and finally determined by arbitration in
accordance with the WIPO Arbitration Rules. The arbitral tribunal will
consist of a sole arbitrator. The place of arbitration will be London.
11.9 The parties to this Agreement intend that by virtue of the Contracts
(Rights of Third Parties) Act 1999 the University of Oxford and the
people referred to in clause 8.3 will be able to enforce the terms of
this Agreement as if the University of Oxford and the people referred to
in clause 8.3 were a party to it.
AS WITNESS the hands of authorised signatories for the parties on the date first
mentioned above
SIGNED for and on behalf of
ISIS INNOVATION LIMITED:
NAME: Dr. T. Cook
POSITION: Managing Director
SIGNATURE: /s/ T. Cook
SIGNED for and on behalf of
TOLERRX, INC.:
NAME: Dr. Douglas J. Ringler
POSITION: Chief Executive Officer
SIGNATURE: /s/ Douglas J. Ringler
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THIS AMENDMENT AGREEMENT, dated December 19, 2002 (the "Effective Date") is made
BETWEEN:
(1) ISIS INNOVATION LIMITED, a company registered in England (No. 02199542),
whose registered office is at University Offices, Wellington Square, Oxford
OX1 2JD, England (the "Licensor"); and
(2) TOLERRX, INC., a Delaware corporation whose principal place of business
is at 675 Mass Ave., Cambridge, MA 02139 (the "Licensee").
WHEREAS, Licensor and Licensee entered into a License Agreement dated
February 1, 2001 that is directed to Stealth Technology (the "License
Agreement"); and
WHEREAS, the Licensor and Licensee desired to amend the License
Agreement.
In consideration of the sum of L 1 paid by each party hereto to the
other (the receipt of which is hereby acknowledged), IT IS AGREED as follows:
1. All defined terms of the License Agreement shall have the same
meaning in this Amendment.
2. Rewrite clause 5.9(a) of the License Agreement in its entirety to
read as follows:
5.9(a) Subject to clause 5.10, if any of the Licensed
Technology under which Licensee is licensed hereunder
is infringed by a third party, Licensee shall have the
right and option but not the obligation to bring an
action for infringement at its sole expense, against
such third party in the name of Licensor and/or in the
name of Licensee, and to join Licensor as a party, if
required. Licensee shall promptly notify Licensor of
any such infringement and shall keep Licensor informed
as to the prosecution of any action for such
infringement. No settlement, consent judgement or other
voluntary final disposition of the suit which adversely
affects Licensor and/or Licensed Technology may be
entered into without the consent of Licensor, which
consent shall not unreasonably be withheld.
3. Rewrite clause 5.12 of the License Agreement in its entirety to
read as follows:
5.12 In any infringement suit either party may
institute to enforce the rights in Licensed Technology
pursuant to this Agreement, the other party hereto
shall, at the request of the party initiating such
suit, co-operate in all respects and, to the extent
possible, have its employees testify when requested and
make available relevant records, papers, information,
samples,
<Page>
specimens, and the like, provided that the Licensee
provides the Licensor with an indemnity in terms
satisfactory to the Licensor against all reasonable
out-of-pocket costs incurred in connection with
rendering co-operation requested hereunder For the
avoidance of doubt, all expenses of the Licensor agreed
by the Licensee in advance will be considered
reasonable.
4. Rewrite clause 6.3(a) of the License Agreement in it
entirety to read as follows:
--6.3 (a) For as long as any Licensed Products are used
or marketed by the Licensee, the Licensee will pay
royalties to the Licensor equal to the following
percentages of all Net Sales of Licensed Products sold
by the Licensee and gross up-front and milestone (as
opposed to periodically recurring or running-earned)
consideration received by the Licensee under or in
respect of sublicenses or sub-sub-licenses granted by
the Licensee with respect to the Licensed Technology in
each License Year, as calculated on a
Licensed-Product-by-Licensed Product basis:
Cumulative Net Sales and Gross Up-front
Consideration Percentage
Net Sales and gross up-front consideration
for a Licensed Product of up to [*******] [*******]
in a License Year
Net Sales and gross up-front consideration
for a Licensed Product of greater than [*******]
[*******] up to [*******] in a License Year
Net Sales and gross up-front consideration
for a Licensed Product of over [*******] [*******]
up to [*******] in a License Year
Net Sales and gross up-front consideration
for a Licensed Product of over [*******] [*******]
in a License Year
Subject to the following, no royalties shall be payable under
this sub-clause 6.3 with respect to payments made to the Licensee by a
sub-licensee for stock or equity or for research performed or to be performed by
the Licensee specifically relating to the development of the Licensed
Technology. Where a sub-licensee or a third party who, at a later stage, becomes
a sub-licensee (a "Purchaser"), purchases stock or equity in the Licensee,
royalties will be payable in accordance with this sub-clause 6.3 on the amount
paid by the Purchaser to the Licensee for that
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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stock or equity to the extent that the amount paid by the Purchaser exceeds the
fair market value for that stock or equity, and such excess is disguised
consideration for the sub-license. If there is a dispute as to the fair market
value, it shall be submitted to arbitration under clause 11.8---
5. Rewrite clause 6.4 of the License Agreement in its
entirety to read as follows:
--6.4 For as long as the Licensee sub-licenses the
Licensed Technology, the Licensee will pay royalties to
the Licensor of [*******] of all royalties paid to
Licensee by a sublicensee for sales of a Licensed
Product.--
6. Rewrite clause 6.5 of the License Agreement in its
entirety to read as follows:
--6.5 In the event that the royalties paid to the
Licensor under clauses 6.3 and 6.4 in a License Year do
not exceed the following amounts in respect of the
relevant License Year (the "Minimum Sum"), the Licensee
must make up the difference between the aggregate of
the royalties paid and the Minimum Sum in that License
Year; and will do so concurrently with the report under
clause 5.4(c) which immediately follows the end of the
period:
License Year Minimum Sum
The 12-month period which begins on the [*******]
Effective Date ("License Year 1")
The next 12 month period (i.e. beginning [*******]
on the first anniversary of the Effective
Date) ("License Year 2")
License Year 3 [*******]
License Year 4 [*******]
License Year 5 and thereafter [*******]
In the event that no royalties are due to the
Licensor in a License Year, the Licensee must pay the
Minimum Sum to the Licensor.
The payments under this Clause 6.5 shall
terminate on the initiation by the Licensee or a
sublicensee or sub-sublicensee of a Phase I Clinical
Trial for a Licensed Product.--
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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7. Rewrite clause 6.6 of the License Agreement in its
entirety to read as follows:
--6.6 (a) The Licensee will pay to the Licensor the
following non-refundable non-creditable milestone
payments within thirty (30) days after the occurrence
of the specified events (including, for the avoidance
of doubt, where the specified events are performed by a
sub-licensee) (the "Milestones") in respect of only the
first Licensed Product produced by the Licensee:
Event Amount
Demonstration of tolerance induction in [*******]
vivo to an antibody engineered to contain
sequences from a species different than the
experimental animals
Initiation of Phase I clinical trials [*******]
Initiation of Phase II clinical trials [*******]
Initiation of Phase III clinical trials [*******]
Entering into first sub-license by Licensee [*******]
Grant of patent in respect of the Licensed [*******]
Technology in the first of the European
Union, the United States of America, Japan,
Canada or Australia
Approved for marketing in the United [*******]
States by the Food and Drug
Administration
(b) In addition, for each additional Licensed
Product after the first Licensed Product that is
approved for marketing in the United States by the Food
and Drug Administration, Licensee shall pay to Licensor
[*******] within thirty (30) days after such event,
which payment shall be non- creditable and
non-refundable.--
8. Rewrite clause 6.12 of the License Agreement in its entirety to
read as follows:
6.12 Subject to the following, if the Licensee is
obliged to pay royalties to third parties (other than
the Licensee's Affiliates), for the right to make, use
or sell a Licensed Product, then the Licensee
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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shall be entitled to deduct from the royalty payment
due to the Licensor a portion of the royalty payment
actually made to such third party as the Licensee has
negotiated with the Licensor, but in any event, not
greater than [*******] of the royalty payment due to
the Licensor. This clause 6.12 will not apply until the
Licensee is obliged to pay in aggregate to third
parties and the Licensor more than [*******] of Net
Sales in royalties and will only apply to the amount of
royalties payable to third parties which exceed
[*******] of Net Sales.
9. Rewrite clause 7.2 of the License Agreement in its entirety to
read as follows:
7.2 If either party commits a material breach of this
Agreement or fails to exert the efforts determined by
the parties or by arbitration under clause 5.4 (c) and
the breach or failure is not remedied (where
remediable) within the period allowed by notice given
by the other party in writing calling on the party in
breach or failure to effect such remedy (such period
being not less than thirty (30) days), the other party
may by further written notice terminate this Agreement
immediately.
10. Rewrite clause 7.6 of the License Agreement in its entirety to
read as follows:
Clauses 3, 5.12, 5.13, 7.6, 7.8, 7.9, 7.10, 7.11, 8, 9,
10 and 11.4 shall survive the termination or expiration
of this Agreement for whatever reason
11. Rewrite clause 7.9 in its entirety to read as follows:
7.9 Upon the granting of a sub-license under this
Agreement, at the request of Licensee and if the
sub-licensee is not engaged in a business that the
Licensor, acting reasonably, would consider to be
inconsistent with or contrary to the Licensor's
position as a subsidiary of the University, the
Licensor will provide the sub-licensee with a letter
agreement in the form set out in Schedule 1.
12. Rewrite clause 8.1 (c) of the License Agreement in its entirety
to read as follows:
8.1 (c) The Licensor shall promptly notify the Licensee
of any claim or threatened claim under this sub-clause
8.1 (a) and shall, at the cost of the Licensee, fully
co-operate with all reasonable requests of the Licensee
with respect thereto.
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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13. Rewrite clause 8.5 of the License Agreement in its entirety to
read as follows:
8.5 The Licensor's maximum liability with respect
to payment of damages awarded to the Licensee by a
court of law under or otherwise in connection with this
Agreement or its subject matter, shall not exceed the
return of all royalty and Milestone payments paid by
the Licensee to the Licensor under this Agreement,
together with interest on the balance of such moneys
from time to time outstanding, accruing from day to day
at two percent over the Barclays Bank plc base rate
from time to time in force and compounded annually as
at 31 December and if the damages awarded exceed such
amount, such excess may be credited against future
royalties and milestones owed by Licensee under this
Agreement as and when they become due, provided that
the amount payable by the Licensee to the Licensor will
not be reduced below [*******] of the royalties and
milestone payments that would have been due if such
excess payments had not been credited.
14. The License Agreement is amended as provided herein as of the
date first written above. All other terms and provisions of the License
Agreement shall be unaffected by the Amendment.
15. All references in the License Agreement to the "Agreement" shall
be deemed to include this Agreement.
16. This Amendment Agreement shall be governed by English Law. The
Licensee submits to the non-exclusive jurisdiction of the English courts with
respect to any dispute which may arise out of or in connection with this
Amendment Agreement.
* Confidential treatment requested:
material has been omitted and filed
separately with the Commission.
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AS WITNESS the hands of authorized signatories for the parties on the
date first mentioned above.
SIGNED for and on behalf of
ISIS INNOVATION LIMITED:
Name: Mr. T. Hockaday
Position: Executive Director
Isis Innovation Ltd
Signature: /s/ T. Hockaday
------------------------------
SIGNED for and on behalf of
TOLERRX, INC.:
Name: Douglas J. Ringler
Position: President and Chief Executive Officer
Signature: /s/ Douglas J. Ringler
------------------------------
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