Collaboration Agreement and License Agreement [Amendment] - SmithKline Beecham Corp., SmithKline Beecham plc and Human Genome Sciences Inc.
AMENDMENT TO
SB/HGS COLLABORATION
AGREEMENT AND LICENSE AGREEMENT
AND
AMENDED AND RESTATED LICENSE AGREEMENT
This Agreement, effective as of this 28th day of June, 1996,
is between, on the one hand, SmithKline Beecham Corporation, a corporation
organized under the laws of the Commonwealth of Pennsylvania, having a place of
business at One Franklin Plaza, Philadelphia, Pennsylvania 19101, U.S.A. ("SB
corp"), SmithKline Beecham p.l.c., a corporation organized under the laws of
England and having a place of business at Great West Road, Brentford, Middlesex,
U.K. ("SB plc" and, individually and collectively with SB corp, "SB"), and, on
the other hand, Human Genome Sciences, Inc., a corporation organized under the
laws of the State of Delaware, having a place of business at 9410 Key West
Avenue, Rockville, Maryland 20850, U.S.A. ("HGS").
WITNESSETH THAT:
WHEREAS SB and HGS entered into the COLLABORATION AGREEMENT
relating to sequencing of expressed genes and development of practical
applications therefor; and
WHEREAS SB corp, SmithKline Beecham Intercredit, B.V., and HGS
entered into the AMENDED AND RESTATED LICENSE AGREEMENT pursuant to which HGS
granted to SB certain licenses under HGS PATENTS and HGS TECHNOLOGY to make,
have made, use and sell COLLABORATION PRODUCTS in the SB FIELD, and to license
certain technologies to TAKEDA pursuant to the SB/TAKEDA AGREEMENT; and
WHEREAS, simultaneously with the execution hereof, SB and HGS
are entering into that certain SB/HGS LICENSE AGREEMENT, pursuant to which SB
and HGS will form alliances with THIRD PARTIES in addition to TAKEDA and
collaborate with and/or grant licenses to COLLABORATION PARTNERS under HGS
TECHNOLOGY (as defined in the SB/HGS LICENSE AGREEMENT) and SB TECHNOLOGY (as
defined in the SB/HGS LICENSE AGREEMENT) in the SB FIELD (as defined in the
SB/HGS LICENSE AGREEMENT) and as to GENE THERAPY VACCINES, and which SB/HGS
LICENSE AGREEMENT supersedes and replaces the COLLABORATION AGREEMENT and the
AMENDED AND RESTATED LICENSE AGREEMENT as to the SB FIELD and GENE THERAPY
VACCINES;
WHEREAS, the parties desire to clarify certain matters with
respect to technologies and related issues that, pursuant to the terms of the
respective agreements,
<PAGE>
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may be covered by both the SB/HGS LICENSE AGREEMENT, on the one hand, and the
COLLABORATION AGREEMENT and the AMENDED AND RESTATED LICENSE AGREEMENT, to the
extent such agreements remain in force after the date hereof, on the other, and
to set forth certain rights of SB in respect of COLLABORATION PARTNER PATENTS;
NOW, THEREFORE, in consideration of the covenants and
obligations expressed herein, and intending to be legally bound, and otherwise
to be bound by proper and reasonable conduct, the parties agree as follows:
1. DEFINITIONS
1.1 All fully capitalized words and phrases shall have the meanings set
forth in the COLLABORATION AGREEMENT, except as otherwise defined
herein; provided, however, that fully capitalized words and phrases not
defined in the COLLABORATION AGREEMENT or otherwise defined herein
shall have the meanings set forth in the SB/HGS LICENSE AGREEMENT.
1.2 "COLLABORATION AGREEMENT" shall mean the Collaboration Agreement
entered into between SB and HGS effective as of May 19, 1993, as
amended as of immediately before the EFFECTIVE DATE and by this
Agreement.
1.3 "EFFECTIVE DATE" shall have the meaning ascribed in the SB/HGS LICENSE
AGREEMENT.
1.4 "RESIDUAL SB FIELD" shall mean the SB FIELD, as defined in the
COLLABORATION AGREEMENT, excluding the SB FIELD, as defined in the
SB/HGS LICENSE AGREEMENT.
2. AMENDMENT TO COLLABORATION AGREEMENT AND AMENDED AND RESTATED LICENSE
2.1 The parties agree to enter into a formal amendment to amend the
COLLABORATION AGREEMENT and the AMENDED AND RESTATED LICENSE AGREEMENT
according to the following principles:
(a) All disclosures, transfers and exchanges of information and
technology pursuant to the COLLABORATION AGREEMENT and the
AMENDED AND RESTATED LICENSE AGREEMENT shall be governed only
by the provisions of the SB/HGS LICENSE AGREEMENT governing
the
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disclosure, transfer and exchange of information and
technology. Without limiting the generality of the foregoing,
no grant of any license or right pursuant to the COLLABORATION
AGREEMENT or the AMENDED AND RESTATED LICENSE AGREEMENT shall
require the disclosure, transfer or exchange of information or
technology not required by the SB/HGS LICENSE AGREEMENT. The
only exception to the foregoing two sentences shall occur in
the event that an SB PRODUCT becomes an HGS PRODUCT in the
RESIDUAL SB FIELD pursuant to Paragraphs 7.10 or 7.11 of the
COLLABORATION AGREEMENT, in which event SB shall transfer to
HGS the SB TECHNOLOGY (as defined in the COLLABORATION
AGREEMENT) pertaining to such former SB PRODUCT in the
RESIDUAL SB FIELD.
(b) Subject to paragraph (a), above, the COLLABORATION AGREEMENT
and the AMENDED AND RESTATED LICENSE AGREEMENT apply only in
the RESIDUAL SB FIELD. Without limiting the generality of the
foregoing, the rights of the parties to claim SB PRODUCTS or
HGS PRODUCTS in the RESIDUAL SB FIELD, the licenses to perform
research and development in the RESIDUAL SB FIELD, the
licenses to SB PRODUCTS and HGS PRODUCTS in the RESIDUAL SB
FIELD, and the royalties due and payable on sales of such SB
PRODUCTS and HGS PRODUCTS are each governed only by the
COLLABORATION AGREEMENT and the AMENDED AND RESTATED LICENSE
AGREEMENT.
(c) The restrictions on SB's use of SB TECHNOLOGY and HGS
TECHNOLOGY shall be governed by the SB/HGS LICENSE AGREEMENT,
and the exceptions to such restrictions shall be amended to
include SB PRODUCT (as defined in the COLLABORATION AGREEMENT)
in the RESIDUAL SB FIELD in the TERRITORY (as defined in the
COLLABORATION AGREEMENT), COLLABORATION PRODUCT in the
RESIDUAL FIELD in SOUTHEAST ASIA, and research and
develeopment during the INITIAL RESEARCH TERM and under
RESEARCH PROGRAMS in the RESIDUAL SB FIELD.
3. LICENSE
3.1 HGS hereby grants to SB an exclusive or nonexclusive (in either case
sublicensable) license, as the case may be, under all COLLABORATION
PARTNER PATENTS in the RESIDUAL SB FIELD, to the full extent of HGS'
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interest in such COLLABORATION PARTNER PATENTS in the RESIDUAL SB
FIELD, including, without limitation, the sublicensable right to use
such COLLABORATION PARTNER PATENTS for purposes of researching,
developing, making and having made, using and selling (as defined in
Paragraph 1.33 of the SB/HGS LICENSE AGREEMENT) human and animal health
care products in the RESIDUAL SB FIELD.
4 DISPUTE RESOLUTION
4.1 In the event of any dispute concerning whether a matter, issue or area
is subject to both the SB/HGS LICENSE AGREEMENT, on the one hand, and
the COLLABORATION AGREEMENT or the AMENDED AND RESTATED LICENSE
AGREEMENT, on the other hand, such dispute shall be resolved by the RC
or otherwise as provided in Paragraph 4.1 of the SB/HGS LICENSE
AGREEMENT. The matter, issue or area shall be governed by such SB/HGS
LICENSE AGREEMENT until such dispute is resolved to the contrary.
IN WITNESS WHEREOF, the parties, through their authorized
officers, have executed this Agreement as of the date first written above.
SmithKline Beecham Corporation
By:______________________________
SmithKline Beecham, p.l.c.
By:______________________________
Human Genome Sciences, Inc.
By:______________________________
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<DESCRIPTION>SB/HGS LICENSE AGREEMENT
<TEXT>
"Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by [***], have been
separately filed with the Commission."
SB/HGS LICENSE AGREEMENT
This Agreement is effective as of this 28th day of June, 1996 between,
on the one hand, SmithKline Beecham Corporation, a corporation organized under
the laws of the Commonwealth of Pennsylvania, having a place of business at One
Franklin Plaza, Philadelphia, Pennsylvania 19101, U.S.A. ("SB corp"), SmithKline
Beecham p.l.c., a corporation organized under the laws of England and having a
place of business at Great West Road, Brentford, Middlesex, U.K. ("SB p.l.c.")
(individually and collectively "SB"), and, on the other hand, Human Genome
Sciences, Inc., 9410 Key West Avenue, Rockville, Maryland 20850 ("HGS").
WITNESSETH THAT:
WHEREAS SB corp and HGS, entered into the COLLABORATION AGREEMENT
(defined below) relating to sequencing of expressed genes and development of
practical applications therefor; and
WHEREAS SB corp, SmithKline Beecham Intercredit, B.V. and HGS entered
into the AMENDED AND RESTATED LICENSE AGREEMENT (defined below) pursuant to
which HGS granted to SB certain licenses under HGS patents and HGS technology to
make, have made, use and sell collaboration products; and to license certain
technologies to TAKEDA (defined below) pursuant to the SB/TAKEDA AGREEMENT
(defined below),
WHEREAS SB and HGS now wish to form alliances with THIRD PARTIES
(defined below) in addition to TAKEDA to collaborate and/or grant licenses to
COLLABORATION PARTNERS (defined below) under HGS TECHNOLOGY and SB TECHNOLOGY
(each defined below) in the SB FIELD (defined below) and GENE THERAPY VACCINES
(defined below) causing the parties to now supersede the COLLABORATION AGREEMENT
and the AMENDED AND RESTATED LICENSE AGREEMENT (defined below) as to such SB
FIELD and GENE THERAPY VACCINES (defined below), and to replace those agreements
only as to such fields with this Agreement;
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein, and intending to be legally bound, and otherwise to be bound
by proper and reasonable conduct, the parties agree as follows:
<PAGE>
The parties now agree that the COLLABORATION AGREEMENT is superseded in
accordance with Paragraph 23.01 of such agreement and the AMENDED AND RESTATED
LICENSE AGREEMENT is superseded both with respect to the SB FIELD and GENE
THERAPY VACCINES to read as follows:
1. DEFINITIONS
-----------
1.0. "AFFILIATE" shall mean any corporation, firm, partnership or other entity,
whether de jure or de facto, which directly or indirectly owns, is owned by
or is under common ownership with a party to this Agreement to the extent
of at least fifty percent (50%) of the equity (or such lesser percentage
which is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction) having the power to vote on or direct the affairs
of the entity and any person, firm, partnership, corporation or other
entity actually controlled by, controlling or under common control with a
party to this Agreement.
1.1. "AMENDED AND RESTATED LICENSE AGREEMENT" shall mean the agreement between
SB and HGS entered into May 31, 1995.
1.2. "ANTIBODY PRODUCT" shall mean an antibody (monoclonal or polyclonal) and
fragments and constructs thereof which may be useful for the treatment or
prevention of a disease or disorder in humans.
1.3. "ANTIBODY RESEARCH PLAN" shall mean a plan for researching and developing
an ANTIBODY PRODUCT which is a COLLABORATION PRODUCT in the SB FIELD.
Appendix A is an example of such plan.
1.4. "ANTISENSE" shall mean inhibiting or preventing in vivo expression in a
human or animal of a gene product by use of an oligonucleotide or modified
oligonucleotide which binds to RNA or DNA to prevent and/or impair
expression of the gene product.
1.5. "BLOCKING CLAIM" shall mean a claim under any patent application or granted
patent anywhere in the world which generically but not specifically claims
(i) any and all compounds (and/or the use thereof) which interact with or
prevent interaction with a specified TARGET which is a COLLABORATION
PRODUCT and/or (ii) any and all antibodies (and/or the use thereof) against
a specific TARGET or THERAPEUTIC PROTEIN each of which is a COLLABORATION
PRODUCT. The following are examples of "blocking claims": (1) a compound
which interacts with, or is capable of interacting with, receptor X; (2) a
compound which prevents binding between or to receptor X and its ligand,
(3) a process for activating receptor X, comprising: contacting receptor X
with a
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compound which binds thereto and activates the receptor; (4) a process for
preventing activation of receptor X comprising contacting receptor X with a
compound which prevents binding between receptor X and its ligand.
1.6. "BIOINFORMATICS" shall mean computer software and know-how useful for the
analysis, comparison, and curation of human nucleic acid sequences; and
information related to such sequences; and software for the construction
and maintenance of databases for the compilation of such sequences and
their associated information; each developed from May 19, 1993 through the
end of the INITIAL RESEARCH TERM. BIOINFORMATICS shall include software for
the prediction of the three-dimensional structure of proteins from primary
sequence information but BIOINFORMATICS shall not include software for
rational drug design based on such three-dimensional structure. To the
extent BIOINFORMATICS includes software licensed from a THIRD PARTY such
THIRD PARTY software is not included except to the extent that a party has
the right to transfer to the other party such software and its use and the
other party agrees to pay any royalty owed to the THIRD PARTY for such
software and its use.
1.7. "cDNA" shall mean complementary DNA prepared from human cells.
1.8. "cDNA DATABASE" means the Human cDNA Database established pursuant to the
Human cDNA Database Agreement (the HUMAN cDNA DATABASE AGREEMENT),
effective as of July 7, 1994, among SB, HGS and The Institute for Genomic
Research (TIGR) and as may be amended from time to time.
1.9. "CLINICAL STUDY" shall mean a study in humans of a product which study is
intended for use in obtaining approval to sell the product in a "Major
Market" However, in the case of a product for which no human clinical
studies are required, then CLINICAL STUDY shall mean, instead, initiation
of country-wide sales of a product in a "Major Market". By "Major Market"
is meant the United States, Canada, Japan, Great Britain, France, Germany,
or Italy.
1.10."COLLABORATION AGREEMENT" shall mean the Collaboration Agreement entered
into between SB and HGS effective as of May 19, 1993, as amended as of
immediately before the EFFECTIVE DATE.
1.11."COLLABORATION PARTNER" shall mean those entities which are set forth in
Appendix B and any entity added to such Appendix by mutual written
agreement between SB and HGS. TAKEDA is not a COLLABORATION PARTNER.
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1.12."COLLABORATION PARTNER AGREEMENT" shall mean an agreement among HGS and SB
and a COLLABORATION PARTNER and designated in writing by SB and HGS as a
COLLABORATION PARTNER AGREEMENT.
1.13."COLLABORATION PARTNER PATENT" shall mean all patents and patent
applications filed during the INITIAL RESEARCH TERM which are or become
owned by a COLLABORATION PARTNER or to which a COLLABORATION PARTNER
otherwise has, now or in the future, the right to grant licenses, only to
the extent HGS and SB have the rights to grant licenses thereto under a
COLLABORATION PARTNER AGREEMENT. Included within the definition of
COLLABORATION PARTNER PATENTS are all continuations, continuations-in-part,
divisions, patents of addition, reissues, renewals, extensions,
registrations, confirmations, re-examinations thereof and any provisional
applications and all SPCs
1.14."COLLABORATION PRODUCT" shall mean any product, process, substance,
composition or service which (i) is based on the use of or is derived by
use of HGS TECHNOLOGY and/or SB TECHNOLOGY and/or (ii) is covered by a HGS
PATENT and/or (iii) is covered by a SB PATENT; and/or (iv) is covered by a
COLLABORATION PARTNER PATENT; and/or (v) is based on or is derived by use
of a TARGET and/or is a THERAPEUTIC PROTEIN and/or biological information
on such TARGET or THERAPEUTIC PROTEIN all as to which SB and/or HGS
receives rights from a COLLABORATION PARTNER under a COLLABORATION PARTNER
AGREEMENT. An incidental or immaterial use (or no use) of such technology
or patents in (i)-(v) shall not cause a product, process, substance,
composition or service to become a COLLABORATION PRODUCT.
1.15."CORIGHTS PRODUCT" shall mean a product subject to a COLLABORATION PARTNER
AGREEMENT as to which SB obtains rights to promote and/or market from such
COLLABORATION PARTNER.
1.16."COST OF GOODS" shall mean the sum of the actual direct and indirect costs
for active and other ingredients, supplies, material, and labor and an
allocated portion of overheads, incurred in manufacturing a SB PRODUCT or
an HGS PRODUCT, as determined in accordance with Generally Accepted
Accounting Principles in the United States.
1.17."DIAGNOSTIC(S)" shall mean a COLLABORATION PRODUCT which is any product,
process, substance, composition or service
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<PAGE>
intended to predict, detect or identify a disease or determine the presence
of a pathologic condition in a human.
1.18."DISCOVERED" shall mean, with respect to a COLLABORATION PRODUCT or
CORIGHTS PRODUCT, the earlier of (a) the date of the specific disclosure of
the COLLABORATION PRODUCT or CORIGHTS PRODUCT, in an application for a
patent filed in any country by or in the name of the discovering party; or
(b) the date of the specific disclosure of such COLLABORATION PRODUCT or
CORIGHTS PRODUCT in a written document other than a filed patent
application.
1.19."DRUG PRODUCT" shall mean a product (including VACCINES), which is not a
THERAPEUTIC PROTEIN, GENE THERAPY VACCINE or ANTIBODY PRODUCT, which may be
useful for the treatment or prevention of a disease or disorder in a human.
1.20."DRUG RESEARCH PLAN" shall mean a plan for screening of TARGETS to
discover a DRUG PRODUCT which is a COLLABORATION PRODUCT in the SB FIELD
and shall also mean a plan for researching and developing a GENE THERAPY
VACCINE pursuant to Section 7 or a plan for researching and developing a
VACCINE which is a COLLABORATION PRODUCT in the SB FIELD. An example of
such a plan is shown in Appendix C.
1.21. "EFFECTIVE DATE" shall mean the date first written above.
1.22."EST"shall mean a partial cDNA sequence, i.e., a cDNA which corresponds to
less than the entire expressed portion of a complete human gene, determined
by Expressed Sequence Tag analysis. The ESTs shall comprise as many
nucleotides from the 5' end or the 3' end of a cDNA (exclusive of vector
nucleotides) as is practicable in order to enhance the informational value
of the ESTs and shall otherwise meet specifications previously established
by the RC and as amended from time to time. 1.23. "GENE" shall mean a cDNA
or a human gene or a family of such human genes or any portion of such
cDNA, gene or genes.
1.24."GENE THERAPY" shall mean treatment or prevention of a disease, or
remedying a gene deficiency of humans or animals by genetic modification of
human somatic cells or animal somatic or germ cells (in vivo, in vitro or
ex vivo) with DNA (RNA) for the purpose of expressing a protein or
oligo(poly)nucleotide encoded by said DNA (RNA) in a human or animal.
1.25.GENE THERAPY VACCINE" shall mean a VACCINE which achieves a therapeutic
and/or prophylactic effect by inducing an antigen-specific humoral and/or
cellular immune system response by GENE THERAPY.
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1.26. "HGS" shall mean Human Genome Sciences, Inc.
1.27."HGS FIELD" shall mean: (i) GENE THERAPY, GENE THERAPY VACCINES (other
than GENE THERAPY VACCINES as to which SB obtains rights under Section 7),
(ii) ANTISENSE, (iii) biotransformation of a chemical to prepare
pharmaceutically active agents for human or animal use, or intermediates
therefor, which active agents or intermediates were discovered before May
19, 1993.
1.28."HGS PATENT(S)" shall mean all patents and patent applications to the
extent they claim HGS TECHNOLOGY, which are or become owned by HGS or to
which HGS otherwise has, now or in the future, the right to grant licenses.
Included within the definition of HGS PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals,
extensions, registrations, confirmations, re-examinations thereof and any
provisional applications and all SPCs.
1.29."HGS PRODUCT" shall mean (1) a COLLABORATION PRODUCT in the HGS FIELD; or
(2) a COLLABORATION PRODUCT in the SB FIELD (a) to which HGS obtains rights
in accordance with Section 6; and/or (b) which is a THERAPEUTIC PROTEIN
discovered or developed by or on behalf of HGS after the INITIAL RESEARCH
TERM; and/or (c) which is a DRUG PRODUCT or ANTIBODY PRODUCT discovered or
developed by or on behalf of HGS at any time.
1.30."HGS TECHNOLOGY" shall mean any and all data, substances, processes,
materials, formulae, know-how and inventions with respect to GENES and/or
expression products thereof (including sequence and function) which are
useful within the HGS FIELD or the SB FIELD and which are developed by or
on behalf of HGS during or prior to the INITIAL RESEARCH TERM and which are
owned by HGS or with respect to which HGS has a right to grant a license.
In the event HGS in-licenses from a THIRD PARTY a DRUG PRODUCT, ANTIBODY
PRODUCT or THERAPEUTIC PROTEIN in each case discovered by a THIRD PARTY
with no use of HGS TECHNOLOGY, such product and information generated by
HGS directly related to the research and development of such product, shall
not be HGS TECHNOLOGY.
1.31."HGS SPECIAL TECHNOLOGY shall mean (1) all HGS TECHNOLOGY in existence
prior to the EFFECTIVE DATE and required to be transferred or transferred
to SB under the COLLABORATION AGREEMENT and (2) all HGS TECHNOLOGY
developed by or for HGS after the EFFECTIVE DATE and during the INITIAL
RESEARCH TERM required to be transferred or transferred to SB by HGS which
is: (a) sequence data with respect to cDNA and
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expression products thereof and BIOINFORMATICS relating thereto, (b)
information on biological function of TARGETS and screens for such TARGETS,
and/or (c) biological information on THERAPEUTIC PROTEINS for their use as
TARGETS, and (3) HGS clones containing sequences in (1) and 2(a).
1.32."INITIAL RESEARCH TERM" shall mean the term beginning May 19, 1993 and
ending June 30, 2001.
1.33."make, have made, use and sell" shall mean all exclusionary rights now or
in the future conferred by a patent or equivalent of a patent (e.g., a
SPC), copyright, or trade secret law of each applicable respective
jurisdiction of the world, including but not limited to the right to make,
have made, use, offer to sell, sell, import, copy, display, and distribute.
1.34."NET SALES" shall mean gross receipts from sales of a COLLABORATION
PRODUCT (on a product-by-product basis) by SB or HGS or, except as provided
below, their respective AFFILIATES, licensees, distributors trading on SB's
or HGS's account or joint ventures or other associated companies, less
deductions for (i) transportation, shipping and postage charges, including
transportation insurance and customs duties to the extent separately
invoiced; (ii) sales and excise taxes and duties paid or allowed by a
selling party and any other governmental charges imposed upon the
production, importation, use or sale of such product; (iii) normal and
customary trade, quantity and cash discounts allowed and rebates including
but not limited to Medicaid and Medicaid-like rebates; and (iv) allowances
or credits to customers on account of rejection or return of such product
or on account of retroactive price reductions affecting such product. Sales
between or among a party to this Agreement and its respective AFFILIATES,
licensees, distributors trading on SB's or HGS's account, or joint ventures
or other associated companies shall be included within NET SALES only if
such purchaser is an end-user of the COLLABORATION PRODUCT. Otherwise, NET
SALES shall only include the subsequent, final sales to THIRD PARTIES.
1.35."OPERATING PROFITS" shall mean NET SALES less (i) COST OF GOODS, (ii)
royalties paid to a party or to THIRD PARTIES, (iii) costs and expenses of
Phase IV studies, i.e., post-marketing clinical studies and (iv) marketing,
promotion, distribution and selling expenses of SB and its AFFILIATES, in
the case of a SB PRODUCT, or of HGS, in the case of a HGS PRODUCT, all as
determined in accordance with Generally Accepted Accounting Principles in
the United States.
1.36."OUTLICENSE FEES" shall mean all royalties, license fees and other
payments or product rights received by HGS or SB from THIRD
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
PARTIES based on licensing permitted under this Agreement after deducting
therefrom fees reasonably paid to compensate HGS or SB, as the case may be,
for services rendered to the licensee after the effective date of the
agreement with the licensee. Throughout this Agreement, "outlicense" and
"license" and forms thereof, are used interchangeably.
1.37."PROTEIN RESEARCH PLAN" shall mean a written plan to research and develop
a THERAPEUTIC PROTEIN which is a COLLABORATION PRODUCT in the SB FIELD
which plan includes, at a minimum, scientific data, research and
development efforts, milestones, and which is sufficient to reasonably
monitor diligence of the research and development of the THERAPEUTIC
PROTEIN. A representative example of such a plan forms Appendix D.
THERAPEUTIC PROTEIN PROPOSALS and/or RESEARCH PROGRAMS directed to the six
(6) HGS PRODUCTS in Paragraph 6.3(a) are deemed to be PROTEIN RESEARCH
PLANS submitted by HGS under this Agreement.
1.38."RC" shall mean the Research Committee which shall consist of three (3)
appointees of HGS and three (3) appointees of SB and shall be chaired by
one (1) of the SB appointees.
1.39."RESEARCH PLAN" shall mean individually and collectively a DRUG RESEARCH
PLAN, ANTIBODY RESEARCH PLAN and PROTEIN RESEARCH PLAN. RESEARCH PROGRAMS
(other than the one directed to [***]) under the COLLABORATION AGREEMENT
are deemed DRUG RESEARCH PLANS submitted by SB under this Agreement.
1.40."RESEARCH PROGRAM" shall have the meaning ascribed to it in the
COLLABORATION AGREEMENT.
1.41."RESEARCH TERM EXTENSIONS" shall mean extensions of the INITIAL RESEARCH
TERM obtained pursuant to Paragraph 8.6.
1.42."SB" shall mean SmithKline Beecham Corporation and/or SmithKline Beecham,
p.l.c., and any past (from May 19, 1993 through the EFFECTIVE DATE),
present or future AFFILIATE thereof, which AFFILIATE holds the relevant
right and/or is or was or will be necessary or required to perform any
obligations of SB under this Agreement and/or obligations of either of them
are subsequently assigned and/or delegated pursuant to Section 25 of this
Agreement.
1.43."SB/TAKEDA AGREEMENT" shall mean the agreement entered into between TAKEDA
and SB effective June 8, 1995 as amended or restated and superseded as of
immediately before the EFFECTIVE DATE of this Agreement which is attached
as Appendix F and as may be amended from time to time.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
1.44."SB FIELD" shall mean human health care, excluding both DIAGNOSTICS and
the HGS FIELD (except as to GENE THERAPY VACCINES). The SB FIELD shall
include without limitation VACCINES and GENE THERAPY VACCINES (other than
GENE THERAPY VACCINES to which HGS obtains rights to pursuant to Section
7).
1.45."SB PATENT(s)" shall mean all patents and patent applications to the
extent they claim SB TECHNOLOGY, which are or become owned by SB or to
which SB otherwise has, now or in the future, the right to grant licenses.
Included within the definition of SB PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals,
extensions, registrations, confirmations, re-examinations thereof and any
provisional applications and all SPCs. SB PATENTS shall include TAKEDA
PATENTS to the extent such patents and patent applications claim SB
TECHNOLOGY.
1.46."SB PRODUCT shall mean (1) a GENE THERAPY VACCINE which is a COLLABORATION
PRODUCT to which SB obtains rights pursuant to Section 7; and/or (2) a
THERAPEUTIC PROTEIN which is a COLLABORATION PRODUCT in the SB FIELD to
which SB obtains rights pursuant to Section 6; and/or (3) a COLLABORATION
PRODUCT in the SB FIELD which results from a DRUG RESEARCH PLAN or an
ANTIBODY RESEARCH PLAN, each submitted by SB during the INITIAL RESEARCH
TERM and/or in the case of a DRUG RESEARCH PLAN, which is submitted by SB
during RESEARCH TERM EXTENSIONS.
1.47."SB TECHNOLOGY" shall mean any and all data, substances, processes,
materials, formulas, know-how, inventions and information useful within the
HGS FIELD and/or SB FIELD which are based on the use of or derived by use
of HGS SPECIAL TECHNOLOGY and are developed by or on behalf of SB during
the INITIAL RESEARCH TERM, or RESEARCH TERM EXTENSIONS or under a RESEARCH
PLAN submitted by SB pursuant to this Agreement prior to the later of [***]
years after the INITIAL RESEARCH TERM or [***] years after RESEARCH TERM
EXTENSIONS. SB TECHNOLOGY shall not include technologies, reagents or
materials made by SB merely because of an incidental or immaterial use (or
no use of) of HGS SPECIAL TECHNOLOGY in the development of such
technologies, reagents or materials or merely because of an incidental or
immaterial use of (or no use of) such technologies, reagents or materials
in a RESEARCH PLAN. SB TECHNOLOGY shall include TAKEDA TECHNOLOGY to the
extent that such TAKEDA TECHNOLOGY is based on the use of or derived by use
of (a) HGS SPECIAL
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TECHNOLOGY, or (b) SB TECHNOLOGY as defined in the preceding two sentences
of this Paragraph.
1.48."SOUTHEAST ASIA" shall mean Burma, Cambodia, Hong Kong, Indonesia , Japan,
Laos, Malaysia, Papua New Guinea, People's Republic of China, Philippines,
Singapore, South Korea, Taiwan, Thailand, and Viet Nam.
1.49. "SP" shall mean Schering Plough Corporation and its AFFILIATES.
1.50. SPC" shall mean a right based upon a patent to exclude others from makin
g, using or selling a product, process, substance, composition or service,
such as a Supplementary Protection Certificate.
1.51."SPECIAL SB TECHNOLOGY" shall mean (1) all SB TECHNOLOGY developed by or
on behalf of SB in existence prior to the EFFECTIVE DATE required to be
transferred or transferred to HGS by SB under the COLLABORATION AGREEMENT,
(2) after the EFFECTIVE DATE all SB TECHNOLOGY developed by or on behalf of
SB which SB is required to transfer to HGS or transfers to HGS pursuant to
this Agreement, and/or (3) SB TECHNOLOGY otherwise lawfully obtained by
HGS. With respect to information contained in a RESEARCH PLAN submitted by
SB pursuant to this Agreement, SPECIAL SB TECHNOLOGY shall not include
items of the type identified in sections 1, 2, or 3 of the RESEARCH PLAN
outlines attachedas appendices A, C, and D.
1.52. "TAKEDA" shall mean Takeda Chemical Industries, Ltd., and its AFFILIATES.
1.53."TAKEDA PATENT" shall mean all patents and patent applications which claim
TAKEDA TECHNOLOGY as defined herein, which are or become owned by TAKEDA or
to which TAKEDA otherwise has, now or in the future, the right to grant
licenses, to the extent of SB's rights under the SB/TAKEDA AGREEMENT.
Included within the definition of TAKEDA PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals
or extensions thereof and all SPCs
1.54."TAKEDA PRODUCT" shall mean individually or collectively a TAKEDA PRODUCT
or SB/TAKEDA JOINT PRODUCT as those terms are defined in the SB/TAKEDA
AGREEMENT.
1.55."TAKEDA TECHNOLOGY" shall mean all technology required to be transferred
or transferred to SB under the SB/TAKEDA AGREEMENT prior to the EFFECTIVE
DATE and such other technology required to be transferred or transferred to
SB pursuant to the SB/TAKEDA AGREEMENT in each case which SB is permitted
to transfer to or share with HGS pursuant to the SB/TAKEDA
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AGREEMENT and is required to transfer or transfers to HGS pursuant to this
Agreement.
1.56."TARGET" shall mean a GENE or expression product thereof (e.g., receptors,
enzymes or ion channels) which could be used for screening or other drug
discovery purpose to identify compounds or antibodies with a biochemical or
pharmacological effect.
1.57. "TERRITORY" shall mean all the countries and territories in the world.
1.58."THERAPEUTIC PROTEIN" shall mean a polypeptide derived from a GENE (not
including an ANTIBODY PRODUCT) which may be useful for the treatment or
prevention of a disease or disorder in humans.
1.59."THERAPEUTIC PROTEIN PROPOSAL" shall have the meaning ascribed to it in the
COLLABORATION AGREEMENT.
1.60."THIRD PARTY(IES)" shall mean any party other than a party to this
Agreement or an AFFILIATE of SB, or HGS.
1.61."VACCINE" shall mean any substance which achieves a prophylactic or
therapeutic effect by inducing an antigen-specific humoral and/or cellular
immune system response but shall not include a GENE THERAPY VACCINE.
2. GRANTS
------
Research and Development
------------------------
2.1. (a) HGS hereby grants to SB a non-exclusive, world-wide license under HGS
SPECIAL TECHNOLOGY, claims of HGS PATENTS that cover HGS SPECIAL TECHNOLOGY
and COLLABORATION PARTNER PATENTS to perform research and development in
the SB FIELD during the INITIAL RESEARCH TERM pursuant to this Agreement.
(b) HGS hereby grants to SB a non-exclusive, world-wide license under HGS
SPECIAL TECHNOLOGY, claims of HGS PATENTS that cover HGS SPECIAL TECHNOLOGY
and COLLABORATION PARTNER PATENTS to perform research and development of
TARGETS and DRUG PRODUCTS which are COLLABORATION PRODUCTS in the SB FIELD
during RESEARCH TERM EXTENSIONS.
2.2. HGS hereby grants to SB a non-exclusive, world-wide, license under HGS
SPECIAL TECHNOLOGY, claims of HGS PATENTS that cover HGS SPECIAL TECHNOLOGY
and COLLABORATION PARTNER PATENTS to perform research and development in
the SB FIELD after the INITIAL RESEARCH TERM pursuant to a RESEARCH PLAN
submitted by SB pursuant to this Agreement.
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2.3. HGS hereby grants to SB a non-exclusive, world-wide, license under HGS
SPECIAL TECHNOLOGY, HGS PATENTS and COLLABORATION PARTNER PATENTS to
perform research and development in the HGS FIELD only in furtherance of
research and development in the SB FIELD (i) during the INITIAL RESEARCH
TERM and RESEARCH TERM EXTENSIONS, and (ii) after the INITIAL RESEARCH TERM
under a RESEARCH PLAN submitted by SB pursuant to this Agreement. For the
avoidance of doubt, no license is granted (other than to perform research
and development pursuant to this Paragraph 2.3) to SB hereunder to make,
have made, use and sell COLLABORATION PRODUCTS in the HGS FIELD.
2.4. SB hereby grants to HGS a non-exclusive, world-wide, license under SPECIAL
SB TECHNOLOGY and claims of SB PATENTS that cover SPECIAL SB TECHNOLOGY to
perform research and development in the SB FIELD during the INITIAL
RESEARCH TERM.
2.5. SB hereby grants to HGS a non-exclusive, world-wide, license under SPECIAL
SB TECHNOLOGY and claims of SB PATENTS that cover SPECIAL SB TECHNOLOGY to
perform research and development in the SB FIELD after the INITIAL RESEARCH
TERM pursuant to a RESEARCH PLAN submitted by HGS pursuant to this
Agreement during the INITIAL RESEARCH TERM.
2.6. Notwithstanding any rights obtained by a party, with respect to a
THERAPEUTIC PROTEIN under Section 6 or a GENE THERAPY VACCINE under Section
7, HGS and SB each acknowledges and agrees that HGS and SB, as the case may
be, retain the right under HGS SPECIAL TECHNOLOGY, HGS PATENTS, SPECIAL SB
TECHNOLOGY and SB PATENTS to use THERAPEUTIC PROTEINS and/or GENE THERAPY
VACCINES as to which the other obtains rights under Section 6 or 7 solely
for the purposes of discovering, researching, developing, marketing, using
and selling a DRUG PRODUCT or an ANTIBODY PRODUCT each in the SB FIELD
pursuant to the applicable provisions of this Agreement.
Research And Development in the HGS FIELD
-----------------------------------------
2.7. (a) SB hereby grants to HGS an exclusive, world-wide, license under SPECIAL
SB TECHNOLOGY and SB PATENTS to perform research and development in the HGS
FIELD;
(b) Notwithstanding subparagraph (a), HGS acknowledges and agrees that SB
and COLLABORATION PARTNERS as the case may be, retain the right under
SPECIAL SB TECHNOLOGY and SB PATENTS to perform research and development in
the HGS FIELD as provided in this Agreement and COLLABORATION PARTNER
AGREEMENTS.
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SB PRODUCTS.
- ------------
2.8. HGS hereby grants to SB an exclusive, sublicenseable world-wide license in
the SB FIELD under HGS SPECIAL TECHNOLOGY and HGS PATENTS and COLLABORATION
PARTNER PATENTS to make, have made, use and sell in the TERRITORY, each
THERAPEUTIC PROTEIN as to which SB obtains rights under Section 6 and each
GENE THERAPY VACCINE as to which SB obtains rights under Section 7.
2.9. HGS hereby grants to SB a non-exclusive, sublicenseable world-wide, license
in the SB FIELD under HGS SPECIAL TECHNOLOGY and HGS PATENTS and
COLLABORATION PARTNER PATENTS with respect to claims directed to TARGETS
(and the manufacture and use thereof) which are COLLABORATION PRODUCTS and
also with respect to BLOCKING CLAIMS, to make, have made, use and sell in
the TERRITORY, (1) DRUG PRODUCT which is a COLLABORATION PRODUCT which
results from a DRUG RESEARCH PLAN submitted by SB during the INITIAL
RESEARCH TERM and RESEARCH TERM EXTENSIONS, and (2) ANTIBODY PRODUCT which
is a COLLABORATION PRODUCT and which results from an ANTIBODY RESEARCH PLAN
submitted by SB during the INITIAL RESEARCH TERM.
2.10.(a) SB agrees not to grant to a THIRD PARTY rights in or to an SB PRODUCT
in the TERRITORY outside of SOUTHEAST ASIA except as follows:
(i) SB shall have the right to grant a license to a THIRD PARTY to an SB
PRODUCT which is a THERAPEUTIC PROTEIN as to which SB obtains rights under
Section 6 the earlier of (1) after SB has established proof of efficacy for
such SB PRODUCT in Phase II clinical tests; or (2) after sufficient
evidence to establish efficacy for one or more indications is available;
(ii) SB shall have the right to license SB PRODUCTS which are DRUG PRODUCTS,
GENE THERAPY VACCINES or ANTIBODY PRODUCTS at any time; and
(iii)SB shall have the right to grant a license to SB PRODUCTS in the TERRITORY
to TAKEDA pursuant to the SB/TAKEDA AGREEMENT.
(b) SB shall have the right at any time to grant rights and licenses to any and
all SB PRODUCTS in SOUTHEAST ASIA.
(c) In addition to (a) and (b), the rights granted to SB by HGS under this
Agreement are licenseable and/or transferable by SB to a COLLABORATION
PARTNER provided HGS and SB mutually agree to the terms and conditions of
the relevant agreement.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(d) Except for agreements permitted by Paragraph 12.3, the SB/TAKEDA AGREEMENT
or COLLABORATION PARTNER AGREEMENTS, the rights granted to SB by HGS under
this Agreement and SB's rights to SB TECHNOLOGY and SB PATENTS are
licenseable and/or transferable by SB to a THIRD PARTY only with respect to
a SB PRODUCT, and only pursuant to an Agreement by which SB grants a
license to a THIRD PARTY to an SB PRODUCT as permitted under this Paragraph
2.10 and in which the THIRD PARTY agrees to covenants and obligations with
respect to the use of such SB PRODUCT, and any HGS TECHNOLOGY, HGS PATENTS,
SB PATENTS and SB TECHNOLOGY to be licensed to such THIRD PARTY which are
essentially identical to the covenants and obligations of SB under this
Agreement.
HGS PRODUCTs
- ------------
2.11.SB hereby grants to HGS an exclusive, sublicenseable world-wide license
under SPECIAL SB TECHNOLOGY and SB PATENTS to make, have made, use and sell
in the TERRITORY within the SB FIELD each THERAPEUTIC PROTEIN which is an
HGS PRODUCT as to which HGS obtains rights under Section 6 and within the
HGS FIELD each GENE THERAPY VACCINE which is an HGS PRODUCT as to which HGS
obtains rights under Section 7.
2.12.With respect to THERAPEUTIC PROTEINS in the SB FIELD as to which HGS has
obtained rights under Section 6 and ANTIBODY PRODUCTS which are HGS
PRODUCTS in the SB FIELD developed under a ANTIBODY RESEARCH PLAN submitted
by HGS during the INITIAL RESEARCH TERM, in each case HGS shall have the
right to grant licenses to THIRD PARTIES only after HGS has obtained
sufficient pharmacological, biological and other data to permit a decision
to be made as to whether or not to complete studies required for an
Investigational New Drug Application (IND) provided, however, during the
INITIAL RESEARCH TERM such licensing rights are limited to a total of
[***]such THERAPEUTIC PROTEINS and [***] such ANTIBODY PRODUCTS.
2.13.SB hereby grants to HGS a non-exclusive, sublicenseable subject to the
limitations of Paragraphs 2.12, 2.14, 2.20 and 2.21, world-wide license
under SPECIAL SB TECHNOLOGY and under SB PATENTS only with respect to
claims directed to TARGETS (and the manufacture and use thereof) which are
COLLABORATION PRODUCTS and also only with respect to BLOCKING CLAIMS, to
make, have made, use and sell in the TERRITORY, HGS PRODUCTS which are DRUG
PRODUCTS within the SB FIELD developed pursuant to a DRUG RESEARCH PLAN
submitted by HGS during the
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INITIAL RESEARCH TERM and HGS PRODUCTS which are ANTIBODY PRODUCT in the SB
FIELD developed pursuant to a ANTIBODY RESEARCH PLAN submitted by HGS
during the INITIAL RESEARCH TERM.
2.14.Except for agreements permitted by Paragraph 12.3, during the INITIAL
RESEARCH TERM the rights to SPECIAL SB TECHNOLOGY and SB PATENTS granted to
HGS by SB under this Agreement in the SB FIELD are licenseable and/or
transferable by HGS to a THIRD PARTY only with respect to an HGS PRODUCT in
the SB FIELD, and only pursuant to an Agreement by which HGS grants a
license to a THIRD PARTY to an HGS PRODUCT in the SB FIELD as permitted
under this Agreement and in which the THIRD PARTY agrees to covenants and
obligations which limit the use of SB PATENTS and SPECIAL SB TECHNOLOGY
which are essentially identical to the covenants and obligations of HGS
under this Agreement.
2.15.SB hereby grants to HGS an exclusive, world-wide license, with the right
to grant sublicenses, (i) under SB PATENTS, and (ii) under SPECIAL SB
TECHNOLOGY developed by or on behalf of SB prior to the EFFECTIVE DATE, in
each case to make, have made, use and sell an HGS PRODUCT in the HGS FIELD;
provided that in any agreement with a THIRD PARTY (other than a
COLLABORATION PARTNER) with respect to such SPECIAL SB TECHNOLOGY, such
THIRD PARTY will only be provided with such SPECIAL SB TECHNOLOGY by HGS on
a gene-by-gene basis after prior written notice to SB of the SPECIAL SB
TECHNOLOGY to be provided and further provided that HGS will incorporate
the following terms into all THIRD PARTY agreements (other than a
COLLABORATION PARTNER) in the HGS FIELD with respect to such SPECIAL SB
TECHNOLOGY: (i) such THIRD PARTY will develop and maintain a 'firewall'
plan reasonably acceptable to both HGS and SB; and (ii) SB has the right to
directly enforce breaches of any such agreement by the THIRD PARTY with
respect to its use of SPECIAL SB TECHNOLOGY.
Copromotion.
------------
2.16.(a) HGS hereby grants to SB an option to co-promote HGS PRODUCT sold by
HGS in the HGS FIELD (other than a GENE THERAPY VACCINE), on a
country-by-country basis, in the TERRITORY. SB may exercise this option as
provided in Paragraph 10.2. The option does not extend to any HGS PRODUCT
which is primarily a service.
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(b) HGS hereby grants to SB an option to develop, sell, promote and/or market
HGS PRODUCTS in the SB FIELD (other than a GENE THERAPY VACCINE) in the
TERRITORY, which option may be exercised as provided in Paragraph 10.3.
(c) SB hereby grants to HGS an option to co-promote SB PRODUCT sold by SB in
the SB FIELD (other than a GENE THERAPY VACCINE), on a country-by-country
basis in the United States, Canada, Mexico, and Europe. HGS may exercise
this option as provided in Paragraph 10.1. The option does not extend to
any SB PRODUCT which is primarily a service.
Takeda.
-------
2.17.(a) HGS acknowledges that it has reviewed the SB/TAKEDA AGREEMENT as it
exists as of the EFFECTIVE DATE as may be amended with the consent of HGS
and hereby confirms its approval of, and consent to SB's entry into such
agreement.
(b) HGS hereby grants to SB the right to grant to TAKEDA, pursuant to the
SB/TAKEDA AGREEMENT as it exists as of the EFFECTIVE DATE and as it may be
amended with the consent of HGS, an exclusive or non-exclusive sublicense
under LICENSED PATENTS, LICENSED TECHNOLOGY, SB PATENTS and SB TECHNOLOGY
(to the full extent of the interest of HGS therein), to make, have made,
use and sell SB PRODUCTS and TAKEDA PRODUCTS.
(c) HGS hereby grants to SB the right to grant to TAKEDA, a non-exclusive,
non-transferable, paid-up sublicense under LICENSED PATENTS, LICENSED
TECHNOLOGY, SB PATENTS and SB TECHNOLOGY (to the full extent of the
interest of HGS therein), to carry out research and development pursuant to
the SB/TAKEDA AGREEMENT as it exists as of the EFFECTIVE DATE and as it may
be amended with the consent of HGS.
(d) LICENSED PATENTS and LICENSED TECHNOLOGY as used in this Paragraph 2.17
shall have the meaning ascribed to them in the SB/TAKEDA AGREEMENT.
Other License Terms.
--------------------
2.18.HGS grants to SB an irrevocable, royalty-free non-exclusive world-wide,
license (sublicenseable only to COLLABORATION PARTNERS under a
COLLABORATION PARTNER AGREEMENT and TAKEDA under the SB/TAKEDA AGREEMENT),
to use BIOINFORMATICS which is HGS TECHNOLOGY to perform research and
development after the INITIAL RESEARCH TERM. Without limiting the
generality of the forgoing, HGS hereby grants to SB the rights to grant to
TAKEDA an irrevocable, paid-up, non-
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exclusive, world-wide license to any and all BIOINFORMATICs which is HGS
TECHNOLOGY transferred to TAKEDA during the INITIAL RESEARCH TERM pursuant
to the SB/TAKEDA AGREEMENT.
2.19.If during the INITIAL RESEARCH TERM HGS develops a biotransformation
process within the HGS FIELD for preparing pharmaceutically active human or
animal agents sold by SB prior to May 19, 1993, HGS hereby grants to SB the
first right to an exclusive license under HGS know-how and patents to make,
have made, use and sell such agents under terms to be negotiated. If the
parties are unable to reach agreement on the terms thereof within ninety
(90) days of notice by HGS that such process has been developed, then HGS
shall have the right to grant such license to a THIRD PARTY provided,
however, that HGS shall not grant such license to a THIRD PARTY on terms
more favorable than those last extended to SB without first offering such
terms to SB.
2.20.Except for (i) licenses granted by HGS to SB under this Agreement, TAKEDA
under the SB/TAKEDA AGREEMENT, and/or COLLABORATION PARTNERS under a
COLLABORATION PARTNER AGREEMENT; and (ii) licenses granted to THIRD PARTIES
in the SB FIELD with respect to THERAPEUTIC PROTEINS or ANTIBODY PRODUCTS
as permitted by Paragraph 2.12, during the INITIAL RESEARCH TERM, HGS shall
not grant any rights or license to THERAPEUTIC PROTEINS which are
COLLABORATION PRODUCTS in the SB FIELD or ANTIBODY PRODUCTS which are
COLLABORATION PRODUCTS in the SB FIELD.
2.21.Except for licenses granted by HGS to SB under this Agreement, TAKEDA
under the SB/TAKEDA AGREEMENT, and/or COLLABORATION PARTNERS under a
COLLABORATION PARTNER AGREEMENT, (a) for the period commencing on the
expiration of the INITIAL RESEARCH TERM and ending four (4) years
thereafter, HGS agrees not to grant any rights or licenses to a THIRD PARTY
in the SB FIELD with respect to TARGETS which are COLLABORATION PRODUCTS
and which are the subject of a DRUG RESEARCH PLAN or ANTIBODY RESEARCH PLAN
submitted prior to the end of the INITIAL RESEARCH TERM by SB or similar
research plan submitted prior to the end of the INITIAL RESEARCH TERM by
TAKEDA under the SB/TAKEDA AGREEMENT and/or a COLLABORATION PARTNER under
such COLLABORATION PARTNER AGREEMENT, and (b) HGS agrees not to grant any
rights or license to a THIRD PARTY in the SB FIELD with respect to
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
TARGETS which are COLLABORATION PRODUCTS during the INITIAL RESEARCH TERM.
2.22 (a) HGS shall not use TARGETS which are COLLABORATION PRODUCTS for DRUG
PRODUCT discovery in the SB FIELD until [***] from the EFFECTIVE DATE, and
(b) HGS further agrees that after such period and during the INITIAL
RESEARCH TERM HGS shall not use TARGETS which are COLLABORATION PRODUCTS
for DRUG PRODUCT discovery in the SB FIELD which are the subject of a DRUG
RESEARCH PLAN submitted by SB or an equivalent plan submitted by a
COLLABORATION PARTNER under a COLLABORATION PARTNER AGREEMENT or TAKEDA
under the SB/TAKEDA AGREEMENT prior to the end of the INITIAL RESEARCH TERM
unless prior to the submission of such plan by SB, TAKEDA or COLLABORATION
PARTNER, HGS has either submitted to SB biological data with respect to the
TARGET to which such plans are directed or HGS has submitted to SB a DRUG
RESEARCH PLAN with respect to such TARGET. For the purposes of this
Paragraph 2.22, biological data shall mean for example, nucleotide sequence
from a single clone encoding the complete open reading frame for the full
length TARGET and/or transient or stable functionally expressing cell lines
each of which are generated by or on behalf of HGS.
2.23.During the INITIAL RESEARCH TERM, HGS shall not use TARGETs or THERAPEUTIC
PROTEINS which are COLLABORATION PRODUCTS for ANTIBODY PRODUCT discovery in
the SB FIELD which are the subject of an ANTIBODY RESEARCH PLAN submitted
by SB in accordance with this Agreement unless prior to the submission of
such ANTIBODY RESEARCH PLAN by SB, HGS has either submitted an ANTIBODY
RESEARCH PLAN with respect to such TARGET or HGS has submitted to SB
biological data with respect to the TARGET to which the ANTIBODY RESEARCH
PLAN is directed. For the purposes of this Paragraph biological data shall
mean for example, nucleotide sequence from a single clone encoding the
complete open reading frame for the full length TARGET and/or transient or
stable functionally expressing cell lines each of which are generated by or
on behalf of HGS.
2.24.Notwithstanding anything else to the contrary, SPECIAL SB TECHNOLOGY
developed after the EFFECTIVE DATE and claims of SB PATENTS that cover such
SPECIAL SB TECHNOLOGY developed after the EFFECTIVE DATE, and RESEARCH
PROGRAMS submitted under the COLLABORATION AGREEMENT shall not be disclosed
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by HGS to SP or a THIRD PARTY until such patents and technology have, prior
to such disclosure, become generally available to the public other than
through a breach of this Agreement.
2.25.All the grants in this Section 2 are subject to all the terms and
conditions of the Agreement.
2.26.HGS and SB each agree that: (i) either party may compare microbial
nucleotide sequences with human cDNA sequences which are HGS SPECIAL
TECHNOLOGY or SPECIAL SB TECHNOLOGY to determine homologies between such
sequences; (ii) such use of HGS SPECIAL TECHNOLOGY or SPECIAL SB TECHNOLOGY
by SB during the INITIAL RESEARCH TERM or RESEARCH TERM EXTENSIONS shall be
deemed to be an "immaterial use" of such technologies (as such phrase is
used in this Agreement) with respect to any microbial gene based drug
discovery target or vaccine identified by SB (or a licensee of SB) by such
use, and such use alone shall not cause such microbial nucleotide sequence
or such target and/or such vaccine to be SB TECHNOLOGY or a COLLABORATION
PRODUCT nor any antimicrobial product discovered or developed by SB (or a
licensee of SB) by such use of any such microbial nucleotide sequence or
such target and/or such vaccine to be a COLLABORATION PRODUCT or SB
TECHNOLOGY under this Agreement, (iii) such use alone of HGS SPECIAL
TECHNOLOGY or SPECIAL SB TECHNOLOGY by HGS shall not cause any such
microbial nucleotide sequence or any microbial gene based drug discovery
target or vaccine identified by HGS (or a licensee of HGS) by such use to
be a COLLABORATION PRODUCT, nor any antimicrobial product discovered or
developed by HGS (or a licensee of HGS) by such use of any such microbial
nucleotide sequence or such target and/or such vaccine to be a
COLLABORATION PRODUCT or HGS TECHNOLOGY under this Agreement.
3. PAYMENTS AND ROYALTIES
----------------------
Payments to HGS
---------------
3.1 SB shall pay the following royalties on NET SALES of each SB PRODUCT (other
than a GENE THERAPY VACCINE) and TAKEDA PRODUCT, each which are sold by SB
or SB licensees (other than TAKEDA or its licensees) which royalty shall be
calculated on a product by product basis, with the applicable royalty rate
for each such SB PRODUCT or TAKEDA PRODUCT in a calendar year being based
on world-wide sales for such SB PRODUCT or TAKEDA PRODUCT in the calendar
year and this determined royalty rate being applied to all world-wide sales
(other than sales by TAKEDA or its
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
licensees) of such SB PRODUCT or TAKEDA
PRODUCT in such calendar year:
i.6% (six percent) of NET SALES of each SB PRODUCT and/or TAKEDA PRODUCT
during each calendar year in which the NET SALES of such SB PRODUCT
and/or TAKEDA PRODUCT do not exceed [***];
ii.8% (eight percent) of such NET SALES of each SB PRODUCT and/or TAKEDA
PRODUCT during each calendar year in which the NET SALES of such SB
PRODUCT and/or TAKEDA PRODUCT exceed [***];
iii.9% (nine percent) of such NET SALES of each SB PRODUCT and/or TAKEDA
PRODUCT during each calendar year in which the NET SALES of such SB
PRODUCT and/or TAKEDA PRODUCT [***];
iv.10% (ten percent) of such NET SALES of each SB PRODUCT and/or
TAKEDA PRODUCT during each calendar year in which the NET SALES of such
SB PRODUCT and/or TAKEDA PRODUCT exceed [***].
3.2 SB shall have the right on a product by product basis, to credit against
any royalty payment due to HGS pursuant to Paragraph 3.1 for any calendar
half-year, one half of the royalties due TAKEDA pursuant to Section 3 of
the SB/TAKEDA AGREEMENT for that half-year on sales of TAKEDA PRODUCT by SB
or its licensees; provided however, that in no event shall the royalty due
to HGS on such sales in such half-year be reduced more than fifty percent
(50%) of the royalty that would otherwise be due HGS under Paragraph 3.1 on
such sales in such half-year.
3.3 SB shall pay royalties to HGS for sales made by SB of each CORIGHTS PRODUCT
in an amount equal to [***] of the royalty which would be due HGS under
Paragraph 3.1, as if such CORIGHTS PRODUCT were a SB PRODUCT.
3.4 No royalties are due HGS under Paragraph 3.1 for any product for which
royalties are due HGS under Paragraph 3.5 or 3.6.
3.5 SB shall pay to HGS the royalties owed by TAKEDA to SB pursuant to
Paragraph 3.3 of the SB/TAKEDA AGREEMENT on sales of TAKEDA PRODUCTS sold
by TAKEDA or its licensees (other than SB).
3.6 SB shall pay to HGS fifty (50%) percent of the royalties owed by TAKEDA to
SB pursuant to Paragraph 3.3 of the SB/TAKEDA AGREEMENT on sales of SB
PRODUCTS sold by TAKEDA or its licensees other than SB pursuant to the
SB/TAKEDA AGREEMENT.
20
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
3.7 Notwithstanding anything herein to the contrary, SB shall not be obligated
to pay any royalties or make any milestone payments and HGS shall not have
co-promotion rights each with respect to the following:
(a) SB PRODUCT, CORIGHT PRODUCT or TAKEDA PRODUCT encompassed by a DRUG
RESEARCH PLAN or ANTIBODY RESEARCH PLAN submitted by SB under this
Agreement (or in the case of a CORIGHT PRODUCT or TAKEDA PRODUCT submitted
under a research plan pursuant to an agreement with SB and/or HGS) which
product is not covered by a claim of a granted HGS PATENT and which product
is DISCOVERED after the later of (i) [***] after the end of the INITIAL
RESEARCH TERM or (ii) [***] after the end of RESEARCH TERM EXTENSIONS; or
(b) SB PRODUCT which is a THERAPEUTIC PROTEIN which is not covered by a
granted claim of a HGS PATENT, SB PATENT or COLLABORATION PARTNER PATENT
licensed to SB under this Agreement and of which at least [***]% of the
full length DNA coding sequence for, or the cDNA corresponding to the amino
acid sequence of the final form of, such SB PRODUCT is independently
identified by SB without the use of HGS TECHNOLOGY or SB TECHNOLOGY.
Payments to SB
- --------------
3.8 If a HGS PRODUCT (other than a GENE THERAPY VACCINE) (i) is sold by HGS in
the HGS FIELD and is covered by a SB PATENT or incorporates or is based on
or is derived by use of SB TECHNOLOGY or (ii) is sold by HGS in the SB
FIELD, then HGS shall pay the following royalties on NET SALES of each HGS
PRODUCT sold by HGS which royalty shall be calculated on a product by
product basis, with the applicable royalty rate for each HGS PRODUCT in a
calendar year being based on world-wide sales by HGS and its licensees for
such HGS PRODUCT in the calendar year and this determined royalty rate
being applied to all world-wide sales by HGS of such HGS PRODUCT in such
calendar year:
i 6% (six percent) of NET SALES during each calendar year in which the
NET SALES do not exceed [***];
ii 8% (eight percent) of all NET SALES during each calendar year in
which the NET SALES exceed [***];
iii 9% (nine percent) of all NET SALES of the HGS PRODUCT during each
calendar year in which the NET SALES exceed [***];
21
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
iv 10% (ten percent) of all NET SALES of the HGS PRODUCT during each
calendar year in which the NET SALES exceed [***].
3.9 With respect to
(i) each THERAPEUTIC PROTEIN as to which HGS obtains rights under
Section 6;
(ii) each DRUG PRODUCT or ANTIBODY PRODUCT in each case which is an HGS
PRODUCT in the SB FIELD DISCOVERED prior to the end of the INITIAL
RESEARCH TERM; and
(iii) each DRUG PRODUCT or ANTIBODY PRODUCT which is an HGS PRODUCT in
the SB FIELD which results from a TARGET which is a COLLABORATION
PRODUCT which is the subject of a DRUG RESEARCH PLAN or ANTIBODY
RESEARCH PLAN submitted prior to the end of the INITIAL RESEARCH TERM
by HGS and which is also the subject of a DRUG RESEARCH PLAN or
ANTIBODY RESEARCH PLAN submitted by SB, where the DRUG PRODUCT or
ANTIBODY PRODUCT is DISCOVERED by HGS prior to the period ending [***]
years after the end of the INITIAL RESEARCH TERM,
which HGS PRODUCTS are licensed by HGS to a THIRD PARTY in the SB FIELD,
HGS shall pay SB:
(a) [***] percent ([***]) of any OUTLICENSE FEES (excluding royalties)
received by HGS from a THIRD PARTY with respect thereto; and
(b) the following percentage of royalties (Royalty Share) due HGS from
such THIRD PARTY which percentage shall be based on all world-wide NET
SALES for such HGS PRODUCT in a calendar year:
NET SALES Royalty Share to SB
----------------------------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
3.10 Except as provided in Paragraphs 3.9, 10.2 and 10.3, HGS shall be obligated
to pay royalties on and shall have other obligations pursuant to this
Agreement only with respect to:
(a) any HGS PRODUCT which is covered by an issued SB PATENT; and/or
22
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(b) any HGS PRODUCT in the HGS FIELD (other than a GENE THERAPY VACCINE)
which is not covered by an issued SB PATENT, where such product is based on
the use of, or is derived by the use of SPECIAL SB TECHNOLOGY; and/or
(c) any HGS PRODUCT in the SB FIELD which is a DRUG PRODUCT or ANTIBODY
PRODUCT DISCOVERED during the INITIAL RESEARCH TERM; and/or
(d) any HGS PRODUCT in the SB FIELD which is a DRUG PRODUCT or ANTIBODY
PRODUCT which is not covered by an issued SB PATENT, where such product is
based on the use of, or derived by the use of SPECIAL SB TECHNOLOGY and is
DISCOVERED during the period commencing after the end of the INITIAL
RESEARCH TERM and ending [***] years thereafter; and/or
(e) any HGS PRODUCT in the SB FIELD which is a THERAPEUTIC PROTEIN to which
HGS has obtained rights under Section 6; and/or
(f) any HGS PRODUCT which is a GENE THERAPY VACCINE to which HGS has
obtained rights under Section 7.
3.11 If a HGS PRODUCT is sold in the HGS FIELD by a licensee of HGS, and is
covered by a SB PATENT or incorporates or is based on or is derived by use
of SB TECHNOLOGY, then HGS shall pay to SB [***] percent ([***]) of
OUTLICENSE FEES received by HGS for such HGS PRODUCT.
3.12 Notwithstanding any of the provisions of this Section 3, HGS shall not owe
SB any royalties or have any other obligations to SB with respect to the
[***] HGS PRODUCTS for which SP elects to obtain and obtains co-promotion
or co-marketing rights under a COLLABORATION PARTNER AGREEMENT among SP,
HGS and SB.
3.13 Notwithstanding any of the provisions of this Section 3, HGS shall not owe
SB any royalties and SB shall not owe HGS royalties with respect to an HGS
PRODUCT in countries and/or territories for which SB obtains rights
pursuant to Paragraphs 2.16(b) and 10.3.
Milestone payments
- ------------------
3.14 (a) In addition to royalties as provided above, for each SB PRODUCT, SB
shall pay to HGS [***] dollars (US $[***]) upon initiation by SB, a
licensee of SB (except TAKEDA under the SB/TAKEDA AGREEMENT or a
COLLABORATION PARTNER under a COLLABORATION PARTNER AGREEMENT) or by a
THIRD PARTY authorized by SB (subject to the above exceptions) of the first
CLINICAL STUDY and [***]
23
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
dollars (US $ [***]) upon acceptance of the first filing of a New Drug
Application or a Product License Application (or equivalent thereof in a
Major Market). Such milestone payments shall be applicable to all SB
PRODUCTS except any SB PRODUCT where expected worldwide NET SALES are less
than [***] million dollars (US [***]) per year.
(b) In the case of SB PRODUCTS for which expected worldwide NET SALES are less
than US $ [***], SB shall pay to HGS [***] dollars (US $[***]) upon
initiation of country-wide sales of the product in a Major Market. If the
actual annual worldwide NET SALES of such product exceed the US [***] then
SB shall thereupon pay to HGS [***] dollars (US$[***]).
(c) The milestone payments provided in this Paragraph 3.14 shall only be made
once for each SB PRODUCT and shall not be made in the case of improvements
or modifications such as but not limited to changed forms, formats, salts,
formulations, indications, processes or protocols of an SB PRODUCT for
which the payments were previously made.
(d) Notwithstanding anything in this Paragraph 3.14 to the contrary, payments
to HGS in connection with milestone payments for TAKEDA PRODUCTS and SB
PRODUCTS sold by TAKEDA or its sublicencees under the SB/TAKEDA AGREEMENT
are governed by Section 3 of such agreement.
(e) In the event SB licenses an SB PRODUCT to a THIRD PARTY, SB shall credit
the share of OUTLICENSE FEE paid HGS on such SB PRODUCT against any
milestone payments due HGS under this Paragraph 3.14 for such SB PRODUCT.
3.15 SB and HGS shall share [***] (i) any milestone payments received by SB
from TAKEDA pursuant to Paragraph 3.8 of the SB/TAKEDA AGREEMENT and (ii)
milestone payments due to HGS and/or SB from COLLABORATION PARTNERS under a
COLLABORATION PARTNER AGREEMENT.
COLLABORATION PARTNER PAYMENTS.
- -------------------------------
3.16 HGS and SB shall share [***] any up front contract execution fees received
by HGS and/or SB from a COLLABORATION PARTNER under a COLLABORATION PARTNER
AGREEMENT, which fees include only: (1) the [***] U.S. Dollar payment due
SB and HGS from SP which fee is due and payable over a five year period,
(2) the [***] U.S. Dollar payment due SB and HGS from Merck which fee is
due and payable over a five year period, (3) the [***] U.S. Dollar payment
due SB and HGS from Synthelabo which
24
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
fee is due and payable over a five year period, and (4) similar fees
received from another COLLABORATION PARTNER.
Other.
- ------
3.17 With respect to any SB PRODUCT or HGS PRODUCT in any country in any
calendar year, in the event that royalties are paid to a THIRD PARTY on NET
SALES of such HGS PRODUCT or SB PRODUCT in such country for such calendar
year and the royalties actually owed to such THIRD PARTY when aggregated
with the royalties owed to HGS or SB as the case may be for such product in
such country in such calendar year causes the royalty rate on NET SALES for
such product in such country in such calendar year to exceed [***], then
one-half of the royalties which are to be actually paid to such THIRD PARTY
may be credited against the royalties due to SB or HGS as the case may be
for such product in such country in such calendar year until the aggregated
royalty rate for such product in such country in such calendar year is
reduced to [***] provided however, that in no event shall the royalty due
to SB or HGS as the case may be on such NET SALES in such year be reduced
to less than [***].
3.18 Royalties owed HGS by COLLABORATION PARTNERS under a COLLABORATION PARTNER
AGREEMENT shall be paid to and collected by HGS.
3.19.Royalty obligations on TAKEDA PRODUCTS sold by SB and HGS PRODUCTS and SB
PRODUCTS in the SB FIELD and GENE THERAPY VACCINES, under this Agreement
shall terminate on a country-by-country and product-by-product basis on the
later of (i) ten (10) years after first country-wide launch of each product
in each country or (ii) expiration of the SB PATENT, COLLABORATION PARTNER
PATENT or HGS PATENT which covers the making, using or selling of such
product in such country.
3.20 Royalty obligations on HGS PRODUCTs in the HGS FIELD, under this Agreement
shall terminate on a country-by-country and product-by-product basis on the
later of (i) ten (10) years after first country-wide launch of each product
in each country or (ii) expiration of the SB PATENT which covers the
making, using or selling of such product in such country.
3.21 Royalty obligations under this Agreement on CORIGHTS PRODUCTS sold by SB or
a licensee of SB shall terminate when such royalty obligations expire under
the relevant COLLABORATION PARTNER AGREEMENT covering such CORIGHTS
PRODUCT, but in no event sooner than ten (10) years after the first country
wide
25
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
launch of such CORIGHTS PRODUCT in each country in which such CORIGHT
PRODUCT is sold by SB.
3.22 Royalty obligations under this Agreement with respect to or deriving from
sales by TAKEDA or its licensees (other than SB or its licensees) of a
TAKEDA PRODUCT or SB PRODUCT shall terminate simultaneously with the
termination, on a country-by-country and product-by-product basis, of
TAKEDA's obligation to pay royalties on the sale of such TAKEDA PRODUCT or
SB PRODUCT pursuant to the SB/TAKEDA AGREEMENT.
3.23 If the SB PRODUCT or HGS PRODUCT sold comprises one or more
pharmaceutically active agents or antigens which are not SB PRODUCTS or HGS
PRODUCTS respectively, then the royalty rates set forth in this Section
shall be adjusted by mutual agreement of the parties provided that in no
event shall such rates exceed those provided for in said Section.
3.24 If the SB PRODUCT sold by SB or a THIRD PARTY authorized by SB is a service
or a component of a service, then SB shall pay to HGS a royalty in
accordance with the schedule in Paragraph 3.1, except that such royalty
rate schedule shall be adjusted by mutual agreement of the parties if such
adjustment is necessary to equitably reflect the value of the service
component of the product relative to the value of the component derived
from or based upon HGS TECHNOLOGY or SB TECHNOLOGY, but in no event shall
such royalties exceed those payable under Paragraph 3.1.
3.25 If the HGS PRODUCT sold by HGS or a THIRD PARTY authorized by HGS in the SB
FIELD or in the HGS FIELD is a service or a component of a service, then
HGS shall pay to SB a royalty in accordance with the schedule in Paragraph
3.8, except that such royalty rate schedule shall be adjusted by mutual
agreement of the parties if such adjustment is necessary to equitably
reflect the value of the service component of the product relative to the
value of the component derived from or based upon HGS TECHNOLOGY or SB
TECHNOLOGY, but in no event shall such royalties exceed those payable under
Paragraph 3.8.
3.26 Except for SB PRODUCTS, TAKEDA PRODUCTS, and/or CORIGHTS PRODUCTS sold
under the licenses granted to TAKEDA under the SB/TAKEDA AGREEMENT and
licenses granted to a COLLABORATION PARTNER under a COLLABORATION PARTNER
AGREEMENT, for any license granted by SB to a THIRD PARTY for a SB PRODUCT,
SB shall pay to HGS [***] of all OUTLICENSE FEES (except royalties)
received with respect to
26
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
such SB PRODUCT and royalties in accordance with Section 3 based on NET
SALES of such SB PRODUCT by such THIRD PARTY.
3.27 Notwithstanding anything else in this Section to the contrary, but subject
to Paragraph 3.7 and 3.10, for each HGS PRODUCT or SB PRODUCT which is a
GENE THERAPY VACCINE, the only payments made under this Section shall be as
follows: each party shall pay the other (a) [***] of the OUTLICENSE FEES
paid to it for such product under a license to a THIRD PARTY for such GENE
THERAPY VACCINE; and/or (b) [***] of the NET SALES on each product which is
a GENE THERAPY VACCINE sold by it.
4. THE RESEARCH COMMITTEE
----------------------
4.1 The RC shall have the duties and responsibilities specified in this
Agreement or otherwise accorded to it by mutual agreement of the parties.
The RC shall meet two (2) times during the year, at times and places
mutually agreed upon. All RC decisions shall be decided by majority vote of
all members, including the chair. To constitute a quorum, at least four (4)
members must be present, two of whom were appointed by HGS and two of whom
were appointed by SB. To constitute a valid decision of the RC, the
majority vote must always include at least one concurring (1) vote from a
member appointed by SB and at least one (1) concurring vote from a member
appointed by HGS. Tie votes shall be resolved by senior management of both
SB and HGS. Tie votes which cannot be resolved by senior management of both
companies shall be resolved by binding arbitration as provided in the
arbitration agreement between SB and HGS dated 19 August, 1993 as may be
amended from time to time.
5. SEQUENCING
----------
5.1 The parties acknowledge that some of the sequencing of GENES had been
carried out by a THIRD PARTY, The Institute for Genomic Research ("TIGR"),
and that neither HGS nor SB controls TIGR or its activities.
5.2 During the INITIAL RESEARCH TERM, HGS sequencing capacity equal to [***]
automated DNA sequencers (which capacity is [***] sequences per year
meeting quality specifications agreed to by the parties promptly after the
EFFECTIVE DATE) shall be at the complete disposal of the RC for sequencing
GENES. HGS shall keep the RC regularly and fully informed of the extent of
the usage requested by the RC relative to the total capacity under RC
direction. To the extent the full sequencing capacity under RC direction is
not absorbed by requests from the RC, HGS may use the residual capacity
27
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
for other efforts, provided, such other efforts do not impede the efforts
requested by the RC. All sequencing of GENES by HGS or by TIGR during the
INITIAL RESEARCH TERM shall be at no expense to SB. HGS retains its rights
to utilize other sequencing capacity for any purpose provided that all HGS
sequencing of GENES or cDNAs shall be subject to this Agreement.
5.3 SB and HGS will meet during 1996 to jointly determine a sequencing
strategy, which may be amended from time to time, for use of such [***] RC
dedicated sequencers or their equivalent capacity until the end of the
INITIAL RESEARCH TERM. HGS shall provide adequate staff and reagent to keep
such [***] RC dedicated sequencers or their equivalent capacity running at
capacity during the INITIAL RESEARCH TERM. In the event SB and HGS are
unable to jointly determine such strategy, the matter will be referred to
the RC for resolution. Any tie vote on such matter will be resolved
according to Paragraph 4.1; provided however that during the resolution
process defined in Paragraph 4.1, the Chair of the RC shall be empowered to
direct the utilization of the RC directed sequencers, and HGS shall use its
reasonable best efforts to carry out such activities as are requested by
the Chair of the RC to this end.
5.4. Fifty percent (50%) of the sequencing requirements of the COLLABORATION
PARTNERS which are Synthelabo and Merck will come from the RC sequencing
capacity of Paragraph 5.2.
5.5 HGS shall use diligent efforts to complete any sequencing done under this
Section subject to timely receipt by HGS of directions regarding
prioritization and/or cDNA libraries suitable for such sequencing from SB.
5.6 Sequencing pursuant to Paragraph 5.2 shall include a reasonable number of
second walks and clone sequence confirmations requested by SB and/or TAKEDA
for any reason. Such reasonable number shall mean a total of [***] second
walks and/or clone sequence confirmations for which SB requests such
sequence confirmation.
5.7 During the INITIAL RESEARCH TERM, HGS shall maintain its annual sequencing
activities of GENES and cDNAs at a level at least equal to the level of
such sequencing during the one year period immediately prior to the
EFFECTIVE DATE.
5.8 All ESTs and second walks sequenced by HGS pursuant to this Agreement and
clones developed by HGS containing such sequences shall be owned by HGS and
shall be HGS TECHNOLOGY under this Agreement.
28
<PAGE>
6. THERAPEUTIC PROTEINS
--------------------
6.1 SB, HGS, TAKEDA, and COLLABORATION PARTNERS shall obtain rights in
accordance with Section 2 of this Agreement, the SB/TAKEDA AGREEMENT or a
COLLABORATION PARTNER AGREEMENT as the case may be to a THERAPEUTIC PROTEIN
which is a COLLABORATION PRODUCT, provided
(a) as among SB, TAKEDA, such COLLABORATION PARTNERS and HGS, such entity
is the first to submit a dossier as permitted under this Agreement or a
COLLABORATION PARTNER AGREEMENT or the SB/TAKEDA AGREEMENT prior to the end
of the INITIAL RESEARCH TERM,
(1) which dossier demonstrates evidence of in vivo activity for any such
THERAPEUTIC PROTEIN. Such evidence of in vivo biological activity must be
statistically different (p less than 0.05) from control for at least one
data point, and must be demonstrated in an experiment using at least
three (3) dosages of the test substance in which at least a trend of dose
related activity is demonstrated, or,
(2) in the case of a THERAPEUTIC PROTEIN for which (a) in vivo activity
cannot be demonstrated after bona fide attempts to do so in at least two
(2) sub-primate species, or (b) it is demonstrated by documented evidence
(from scientific literature or in house studies) that the relevant
effector system does not exist in sub-primates, or (c) it is demonstrated
by documented evidence (from scientific literature or in-house studies)
that there is an absence of reactivity with relevant targets in
subprimates, such dossier demonstrates evidence of in vitro biological
activity in at least one relevant cellular based assay for any such
THERAPEUTIC PROTEIN. Such evidence of in vitro biological activity must
be statistically different (p less than 0.05) from control for at least
one data point, and must be demonstrated in an experiment using multiple
concentrations of the test substance in which at least a trend of dose
related activity is demonstrated.
(3) The preparation used to demonstrate biological activity shall be:
(i) a purified preparation in which at least 75% (w/w) of the protein
component of the preparation is the THERAPEUTIC PROTEIN; or
(ii) a purified preparation in which the relative concentration and/or
specific activity of the THERAPEUTIC PROTEIN has been increased at least
1000 fold as compared to an unpurified preparation.
In no case shall the concentration of the THERAPEUTIC PROTEIN be less
that one (1) microgram/ml in the purified
29
<PAGE>
preparation of (i) or (ii). Such purified preparation shall be shown to
have a biological activity which is not attributable to endotoxin
contamination;
(b) such rights to such THERAPEUTIC PROTEIN have not been previously
granted to SB, TAKEDA, COLLABORATION PARTNER or HGS in accordance with the
requirements of this Paragraph 6.1 or under Paragraph 6.3 of this Agreement
or under a provision comparable to Paragraph 6.1 in the SB/TAKEDA AGREEMENT
or a COLLABORATION PARTNER AGREEMENT; and
(c) SB, TAKEDA, a COLLABORATION PARTNER or HGS, as the case may be, submits
with the dossier a PROTEIN RESEARCH PLAN therefor.
6.2 (a) The RC will appoint one person from SB and one person from HGS to meet
within five (5) working days of the receipt of a dossier submitted by a
COLLABORATION PARTNER (other than SP) or TAKEDA and notify the submitting
party in writing within ten (10) working days of receipt of such dossier as
to whether or not such dossier received meets the requirements set forth in
the COLLABORATION PARTNER AGREEMENT or the SB/TAKEDA AGREEMENT, as the case
may be, and if it does meet such requirements and unless a dispute is
pending as set forth in Paragraph 6.2(f) or a comparable provision of the
SB/TAKEDA AGREEMENT or a COLLABORATION PARTNER AGREEMENT, rights to the
THERAPEUTIC PROTEIN which is the subject of such dossier shall have been
obtained by such submitting party. The failure of HGS or SB to respond
within such period shall be deemed to be notification that the dossier
meets the requirements set forth in the SB/TAKEDA AGREEMENT or such
COLLABORATION AGREEMENT as the case may be.
(b) In the case of a dossier submitted by HGS or SB, HGS or SB as the case
may be shall submit the dossier to the other party and such other party
shall notify the other in writing within ten (10) working days of receipt
of such dossier as to whether or not it meets the requirements of Paragraph
6.1 and if it does meet such requirements and unless a dispute is pending
as set forth in Paragraph 6.2(f) ) or a comparable provision of the
SB/TAKEDA AGREEMENT or a COLLABORATION PARTNER AGREEMENT, rights to the
THERAPEUTIC PROTEIN which is the subject of such dossier shall be obtained
by such submitting party. The failure of HGS or SB as the case may be to
respond within such period shall be deemed to be notification that the
dossier meets the requirements of set forth in Paragraph 6.1.
30
<PAGE>
(c) HGS and/or SB will also notify all other COLLABORATION PARTNERS (other
than SP) and TAKEDA in writing within ten (10) working days of such rights
to a THERAPEUTIC PROTEIN being obtained by HGS, SB, TAKEDA or a
COLLABORATION PARTNER and such notification will only include the identity
of the THERAPEUTIC PROTEIN so claimed by HGS Sequence ID number and not the
name of the obtaining party. Subject to subparagraph (g) of this Paragraph,
any notification or failure to notify pursuant to this Paragraph is final
and binding on the parties.
(d) HGS alone shall receive, approve and/or reject dossiers received from
SP in accordance with the applicable provisions of this Agreement and a
COLLABORATION PARTNER AGREEMENT among SP, SB and HGS and in accordance with
the timelines and procedures in this Paragraph and in a COLLABORATION
PARTNER AGREEMENT among SP, SB and HGS. In the event that SB is notified by
HGS that a COLLABORATION PARTNER has been granted rights to a THERAPEUTIC
PROTEIN under a COLLABORATION PARTNER AGREEMENT, such notification shall
also include a certification on behalf of HGS, signed by a senior officer
of HGS, that such dossier met all of the requirements of the applicable
provisions in such COLLABORATION PARTNER AGREEMENT.
(e) Any written notification by HGS pursuant to this Paragraph 6.2 that SP
has been granted rights to a THERAPEUTIC PROTEIN shall be binding on SB and
HGS.
(f) Following the receipt of any written notification pursuant to Paragraph
6.2 by HGS or SB that a dossier submitted by SB or HGS does not meet the
requirements of Paragraph 6.1, the parties shall meet within ten (10)
working days to discuss such notification. If the parties are unable to
agree that such dossier does not meet the data and/or RESEARCH PLAN
requirements of Paragraph 6.1 within ten (10) working days, the parties
shall immediately submit such dossier to a neutral expert qualified to
determine whether or not such dossier meets such requirements of Paragraph
6.1. If such dispute is not resolved within twenty (20) days, then either
party shall have the right to submit such dispute to binding arbitration
under Paragraph 27.
(g) While a dispute is pending as to whether SB, HGS, TAKEDA or a
COLLABORATION PARTNER is entitled to exclusive rights to a THERAPEUTIC
PROTEIN, all dossiers submitted to HGS and SB under this Agreement, the
SB/TAKEDA AGREEMENT and a COLLABORATION PARTNER AGREEMENT directed to the
same
31
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
THERAPEUTIC PROTEIN shall be dated, held and no rights shall be granted to
such THERAPEUTIC PROTEIN pending resolution of the dispute to such
THERAPEUTIC PROTEIN..
6.3 (a) The following six (6) THERAPEUTIC PROTEINS are hereby declared as HGS
PRODUCTS and HGS shall have rights to such products as if they were
obtained pursuant to Paragraph 6.1:
Name HGS Sequence ID
--------------------------------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
(b) The following six (6) THERAPEUTIC PROTEINS are hereby declared as SB
PRODUCTS and SB shall have rights to such products as if they were obtained
pursuant to Paragraph 6.1:
Name HGS Sequence ID
--------------------------------------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
(c) SP may obtain rights to [***] THERAPEUTIC PROTEINS pursuant to a
COLLABORATION PARTNER AGREEMENT among SB, HGS and SP without meeting the
data requirements of Paragraph 6.1(a).
6.4 It is understood that any sequence ID number used under this Agreement is
for identification purposes only and that all clones, sequences and
polypeptides associated with any and all THERAPEUTIC PROTEINS as to which
rights are obtained under this Section, shall include muteins and fragments
thereof.
6.5 (a) During the INITIAL RESEARCH TERM, HGS shall have the right to obtain
rights pursuant to Paragraph 6.1 to THERAPEUTIC PROTEINS as HGS PRODUCTS as
follows:
(i) For each THERAPEUTIC PROTEIN as to which HGS grants a license to a
THIRD PARTY pursuant to Paragraph 2.12, HGS may obtain rights under
Paragraph 6.1 to one additional THERAPEUTIC PROTEIN;
(ii) For each THERAPEUTIC PROTEIN as to which HGS initiates a CLINICAL
STUDY, HGS may obtain rights under Paragraph 6.1 to one additional
THERAPEUTIC PROTEIN; and
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(iii) For each THERAPEUTIC PROTEIN as to which HGS surrenders in writing
its exclusive rights thereto (excluding those in subparagraph 6.5 (b)), HGS
may obtain rights under Paragraph 6.1 to an additional THERAPEUTIC PROTEIN.
(b) It is expressly understood and agreed that HGS hereby surrenders any
rights it had with respect to THERAPEUTIC PROTEINS which had become HGS
PRODUCTS in the SB FIELD prior to the EFFECTIVE DATE other than those in
Paragraph 6.3.
(c) During the INITIAL RESEARCH TERM, HGS may not obtain rights to more
than [***]) THERAPEUTIC PROTEINS pursuant to Paragraph 6.1 in any
rolling twelve month period beginning with the EFFECTIVE DATE.
6.6 Neither party shall have any liability to the other party with respect to
any decisions made with respect to rights to a THERAPEUTIC PROTEIN made
under this section unless there has been willful misconduct by a party
concerning such decision.
7. OTHER COLLABORATION PRODUCTS
----------------------------
7.1 (a)A DRUG RESEARCH PLAN and/or ANTIBODY RESEARCH PLAN may only be submitted
to the RC by SB during the INITIAL RESEARCH TERM; or in the case of a DRUG
RESEARCH PLAN, also during RESEARCH TERM EXTENSIONS.
(b) A PROTEIN RESEARCH PLAN may only be submitted to the RC during the
INITIAL RESEARCH TERM and only in accordance with Section 6. Such PROTEIN
RESEARCH PLAN shall be deemed to also be an ANTIBODY RESEARCH PLAN.
(c) SB agrees that without first submitting to the RC a DRUG RESEARCH PLAN
(i) during the INITIAL RESEARCH TERM SB will not initiate screening to
evaluate multiple chemical entities for activity or a formal program of
rational drug design with respect to a TARGET which is a COLLABORATION
PRODUCT; and (ii) during RESEARCH TERM EXTENSIONS, SB will not initiate
screening to evaluate multiple chemical entities for activity or a formal
program of rational drug design with respect to a TARGET which is a
COLLABORATION PRODUCT.
(d) Except as provided in Paragraphs 7.2 and 7.3, a DRUG RESEARCH PLAN may
not be submitted to the RC by HGS prior to June 30, 1999;
(e) During the INITIAL RESEARCH TERM, HGS agrees that it will not initiate
screening to evaluate multiple chemical entities for activity or a formal
program of rational drug design with respect to a TARGET without first
submitting to the RC a DRUG RESEARCH PLAN.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(f) SB and HGS each agree that during the INITIAL RESEARCH TERM, they will
not conduct dedicated activities for the discovery of ANTIBODY PRODUCTS
which are COLLABORATION PRODUCTS without first submitting an ANTIBODY
RESEARCH PLAN therefor.
(g) During the INITIAL RESEARCH TERM, HGS agrees that it shall submit no
more than [***] ANTIBODY RESEARCH PLANS per year under this Agreement.
7.2 SB or HGS (or HGS on behalf of its licensees) shall obtain rights pursuant
to Paragraphs 2.6, 2.8 and 2.11 to GENE THERAPY VACCINES which are
COLLABORATION PRODUCTS, provided that SB or HGS, as the case may be, is the
first to submit a dossier to the other party prior to the end of the
INITIAL RESEARCH TERM which, demonstrates a biological activity which
activity included evidence of in vivo induction of an antigen specific
humoral and/or cellular immune system response, and
(i) exclusive rights to the GENE THERAPY VACCINE have not been previously
granted to SB, HGS or a licensee of HGS, and
(ii) the dossier includes a DRUG RESEARCH PLAN therefor.
7.3 HGS or SB shall submit dossiers pursuant to Paragraph 7.2 to the other
party and such party shall notify the other in writing within ten (10)
working days of receipt of such dossier as to whether or not it meets the
requirements of Paragraph 7.2 and if it does meet such requirements, rights
to the GENE THERAPY VACCINE which is the subject of such dossier shall have
been obtained by such submitting party. The failure of HGS or SB to respond
within such period shall be deemed to be notification that the dossier
meets the requirements of set forth in Paragraph 7.2. Subject to Paragraph
7.4, any notification or failure to notify pursuant to this Paragraph is
final and binding on the parties.
7.4 Following the receipt of any written notification pursuant to Paragraph 7.3
by HGS or SB that a dossier submitted by SB or HGS does not meet the
requirements of Paragraph 7.2, the parties shall meet within ten (10)
working days to discuss such notification. If the parties are unable to
agree that such dossier does not meet the requirements of Paragraph 7.2
within ten (10) working days, the parties shall immediately submit such
dossier to a neutral expert qualified to determine whether or not such
dossier meets the requirements of Paragraph 7.2. If such dispute is not
resolved within twenty (20) days, then either party shall have the right to
submit such dispute to binding arbitration under Paragraph 27. Until any
dispute is resolved with respect to a GENE THERAPY VACCINE for which SB, or
HGS is the
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<PAGE>
first to submit a dossier, no rights shall be obtained with respect to such
GENE THERAPY VACCINE pursuant to Paragraph 7.2.
7.5 HGS agrees that during the INITIAL RESEARCH TERM licensees of HGS cannot
obtain exclusive rights to GENE THERAPY VACCINES other than through the
procedure as set forth in Paragraph 7.2.
8. RESEARCH MATTERS
----------------
8.1 Human sequence data generated during the INITIAL RESEARCH TERM shall be
electronically transferred to SB as near to simultaneously upon HGS
obtaining such data as reasonably possible and shall be stored by HGS in an
electronic database having appropriate database encryption and security
provisions, in a manner specified by the RC. The electronic database shall
provide the capability of transferring the data directly to a database for
patent application filings. In addition to electronic storage of sequence
data, physical samples of all cDNAs will be deposited in a manner, with
consistent archival coding parameters, and in a location designated by the
RC. An inventory of the depository shall be stored in electronic form and
made accessible to SB. HGS and SB shall each establish and/or maintain
respective standard operating procedures for the documentation and
archiving of original laboratory notebooks and other data sources
sufficient to support examination of patent applications and/or litigation
using criteria jointly agreed upon by the parties. All data electronically
stored by HGS shall conform to security and data format provisions
specified by the RC.
8.2 The sequencing carried out under this Agreement during the INITIAL RESEARCH
TERM shall be performed in accordance with sequencing and quality assurance
procedures and specifications set by the RC. The RC shall determine whether
or not sequence data provided to SB were generated and are otherwise in
compliance with such procedures and specifications. Unless otherwise
requested by the RC, ESTs provided after September 1, 1993 shall be derived
from the 5' end of the cDNAs.
8.3 The RC shall have a reasonable period of time following transfer to the RC
and SB of sequence data from HGS within which to determine if the sequence
data meet the criteria established by the RC. If the RC determines that
sequence data do not meet the criteria, then HGS shall use its best efforts
to cure the defects. Such sequence data shall nevertheless be included
within HGS SPECIAL TECHNOLOGY and can be used by SB in the same manner as
acceptable sequence data.
8.4 During the INITIAL RESEARCH TERM, HGS shall provide SB and the RC with
yeast gene sequence (S. cerevisiae) and function
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<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
information which is or becomes known to HGS, but only to facilitate
decision-making, and otherwise to advance research and development, under
this Agreement.
8.5 During the INITIAL RESEARCH TERM, at the request of the RC and as
prioritized by the RC, HGS agrees to sequence and provide to SB partial
cDNA sequences of animal genes from libraries prepared by SB which
sequencing is to be performed using the sequencing capacity specified in
Section 5 hereof. Such partial cDNA sequences of animal genes shall be used
by SB only to facilitate decision making and otherwise to advance research
under this Agreement.
8.6 The INITIAL RESEARCH TERM may be extended by SB as RESEARCH TERM EXTENSIONS
for up to 5 additional years on a year-by-year basis by written notice to
HGS at least sixty (60) days prior to the end of the INITIAL RESEARCH TERM
or at least sixty (60) days prior to the end of any one year extension
thereof, which written notice shall include a payment of [***] for each
additional year.
9. PRODUCT DEVELOPMENT
-------------------
9.1 SB shall have full control and authority over development, registration and
commercialization of SB PRODUCT, including SB PRODUCT which HGS has
indicated it intends to co-promote with SB as provided in this Agreement.
9.2 As between the parties to this Agreement, SB shall also have full control
and authority over the development, registration and commercialization of
SB PRODUCTS in the SB FIELD in SOUTHEAST ASIA and of TAKEDA PRODUCT and
CO-RIGHTS PRODUCT elsewhere in the world, and SB may delegate such
responsibilities in whole or in part to its licensees.
9.3 Each party shall keep the other informed of progress of its efforts to
develop and commercialize royalty bearing SB PRODUCT or HGS PRODUCT. Each
party shall keep the other party informed of its, and its licensees
progress to develop and commercialize royalty bearing SB PRODUCTS or HGS
PRODUCTS as the case may be. SB shall keep HGS informed of SB's and
TAKEDA's progress to develop and commercialize royalty bearing TAKEDA
PRODUCTS.
9.4 SB shall use its diligent efforts to develop, market, promote and sell SB
PRODUCT as to which SB obtains rights under Section 6 and Section 7
equivalent to those efforts it uses with respect to products of similar
value and status, subject to SB's right to terminate such efforts and
surrender such rights in and to such product.
9.5 HGS shall use its diligent efforts to develop, promote and sell HGS PRODUCT
as to which HGS obtains rights to under Section 6 and Section 7 equivalent
to those efforts it uses with respect to products of similar value and
status, subject to HGS's right to terminate such efforts and surrender such
exclusive rights in and to such product
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<PAGE>
9.6 After the RESEARCH TERM, each of HGS and SB shall use diligent efforts
screen for DRUG PRODUCTS pursuant to any DRUG RESEARCH PLAN submitted by SB
or HGS as the case may be prior to the end of the INITIAL RESEARCH TERM
and/or RESEARCH TERM EXTENSIONS equivalent to those efforts it uses to
develop and screen its other proprietary targets of similar value and
status.
9.7 Within sixty (60) days after the end of each calendar year, SB and HGS
shall provide to each other in writing annual reports with respect to work
performed by or for it under RESEARCH PLANS which shall consist of updates
to RESEARCH PLANS substantially in the form of the APPENDICES A, C, and D.
9.8 SB and HGS shall not use any information or data in RESEARCH PLANS
submitted by the other, other than information which is HGS SPECIAL
TECHNOLOGY and SPECIAL SB TECHNOLOGY as specified in section 1, 2 and 3 of
a RESEARCH PLAN.
10. CO-PROMOTION/CORIGHTS
---------------------
10.1.For each SB PRODUCT which is to be sold by SB (but not licensees of SB) in
the United States, Canada, Mexico or a country in Europe, SB shall give
prompt notice to HGS of acceptance by the U.S. Food and Drug
Administration, or like agency of such country, of an application for
approval to sell SB PRODUCT under 21 U.S.C. 355, or like law or regulation
of the U.S. or such country. HGS may exercise its option to co-promote
under Paragraph 2.16(c) in such country on a country-by-country basis by
giving written notice thereof to SB within sixty (60) days of receipt of
each such notice of acceptance. In this event, the parties shall enter into
a definitive co-promotion agreement which shall set forth all terms and
conditions for the co-promotion and which shall incorporate the following
principles, to the extent legally permissible.
(i) SB shall be solely responsible for pricing.
(ii) HGS and SB will co-promote a single brand of the SB PRODUCT in one
or more of the United States, Canada, Mexico and Europe (the "Co-promotion
Territory"), using a trademark selected and controlled by SB.
(iii) A Marketing Committee will be formed composed of SB
representatives and two representatives of HGS. The Marketing
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<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
Committee shall make all decisions on sales, marketing, promotion, and
advertising, including the target prescribers whom HGS will detail and the
number and manner of details. The Marketing Committee will also be
responsible for approving in advance all marketing, selling and promotion
expenses. SB shall chair the Marketing Committee and shall make all final
decision thereof.
(iv) HGS will have the right to provide [***] and shall provide at
least [***], of the total promotion effort in each country where it
co-promotes.
(v) HGS will receive a percentage of the OPERATING PROFITS in the
countries where HGS co-promotes from the sales of the co-promoted SB
PRODUCT which percentage shall be equal to the percentage of the promotion
effort provided by HGS, but shall not exceed [***] of the OPERATING
PROFITS.
(vi) HGS's name will appear on the SB PRODUCT packaging or promotional
materials as decided by the Marketing Committee.
(vii) HGS shall use only SB promotional materials and SB samples in its
co-promotion activities, as approved by the Marketing Committee and in
accordance with all relevant laws, regulations and accepted practices. The
costs of such materials and samples shall be included within SB's aggregate
marketing and promotion expenses.
(viii) HGS shall have the right to transfer this co-promotion right
only in connection with a transfer of all of HGS's rights and obligations
under this Agreement to another single entity.
10.2.For each HGS PRODUCT which is to be sold by HGS in the HGS FIELD, HGS
shall give prompt notice to SB of acceptance by the U.S. Food and Drug
Administration, or like agency of another country, of an application for
approval to sell HGS PRODUCT under 21 U.S.C. 355, or like law or regulation
of the U.S. or another country. SB may exercise its option to co-promote
under Paragraph 2.16(a) on a country-by-country basis by giving written
notice thereof to SB within sixty (60) days of receipt of each such notice
of acceptance. In this event, the parties shall enter into a definitive
co-promotion agreement which shall set forth all terms and conditions for
the co-promotion and which shall incorporate the following principles, to
the extent legally permissible.
(i) HGS shall be solely responsible for pricing.
(ii) SB and HGS will co-promote a single brand of the HGS PRODUCT in
one or more countries in the TERRITORY.
(iii) A Marketing Committee will be formed composed of HGS
representatives and two representatives of SB. The Marketing Committee
shall make all decisions on sales, marketing, promotion,
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<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
and advertising, including the target prescribers whom SB will detail and
the number and manner of details. The Marketing Committee will also be
responsible for approving in advance all marketing, selling and promotion
expenses. HGS shall chair the Marketing Committee and shall make all final
decision thereof.
(iv) SB will have the right to provide [***]), and shall provide at
least [***], of the total promotion effort in each country where it
co-promotes.
(v) SB will receive a percentage of the OPERATING PROFITS in the
countries where SB co-promotes from the sales of the co-promoted HGS
PRODUCT which percentage shall be equal to the percentage of the promotion
effort provided by SB, but shall not exceed [***] of the OPERATING PROFITS.
(vi) SB's name will appear on the HGS PRODUCT packaging or promotional
materials as decided by the Marketing Committee.
(vii) SB shall use only HGS promotional materials and HGS samples in
its co-promotion activities, as approved by the Marketing Committee and in
accordance with all relevant laws, regulations and accepted practices. The
costs of such materials and samples shall be included within HGS's
aggregate marketing and promotion expenses.
(viii) SB shall have the right to transfer this co-promotion right only
in connection with a transfer of all of SB's rights and obligations under
this Agreement to another single entity.
10.3.(a) SB may exercise its option granted pursuant to Paragraph 2.16(b) to the
following HGS PRODUCTS in each country for which HGS has not licensed all
of its marketing rights in and to such product to a THIRD PARTY prior to
completion of Phase II(a) CLINICAL STUDIES conducted by or on behalf of HGS
for such HGS PRODUCT:
(i) THERAPEUTIC PROTEINS to which HGS obtains rights to under Section 6 where
such HGS PRODUCT has completed Phase II(a) in the United States prior to
April 30, 2005; and
(ii) DRUG PRODUCTS or ANTIBODY PRODUCTS DISCOVERED prior to the end of the
INITIAL RESEARCH TERM (other than DRUG PRODUCTS or ANTIBODY PRODUCTS in
subparagraph (iii)) which HGS PRODUCTS have completed Phase II(a) in the
United States prior to June 30, 2005; and
(iii)DRUG PRODUCTS which resulted from a TARGET which TARGET is a COLLABORATION
PRODUCT and also the subject of a DRUG RESEARCH PLAN or ANTIBODY RESEARCH
PLAN submitted by SB, provided the DRUG PRODUCT is DISCOVERED by HGS prior
to the period ending four (4) years after the end of the INITIAL RESEARCH
TERM; and
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<PAGE>
(iv) ANTIBODY PRODUCTS which resulted from a TARGET which TARGET is a
COLLABORATION PRODUCT and also the subject of a ANTIBODY RESEARCH PLAN
submitted by SB prior to the submission by HGS of an ANTIBODY RESEARCH PLAN
directed to such TARGET, provided the ANTIBODY PRODUCT is DISCOVERED by HGS
prior to the period ending four (4) years after the end of the INITIAL
RESEARCH TERM: all pursuant to an agreement which shall set forth all the
terms and conditions for such rights and incorporates the following
principal terms:
(1) SB and HGS will share equally in the Phase III/IV development
costs of such HGS PRODUCT;
(2) SB and HGS will share equally in the sales and marketing expenses
of such HGS PRODUCT;
(3) SB and HGS will share equally in the OPERATING PROFIT for such HGS
PRODUCT;
(4) SB shall owe HGS no license fees or milestone payments or other
such fees.
(b) This option shall not apply to any HGS PRODUCTS which are THERAPEUTIC
PROTEINS as to which SP has exercised its option to market, promote,
co-market and/or co-promote under a COLLABORATION PARTNER AGREEMENT, nor in
Japan to any HGS PRODUCT which is subject to an un-exercised (but not an
option rejected by TAKEDA) option right or to a license to TAKEDA granted
pursuant to the HGS/TAKEDA Option and License Agreement dated June 12,1995.
(c) HGS shall notify SB in writing within thirty (30) days of when each HGS
PRODUCT subject to subparagraphs (a)(i) and (a)(ii) has competed Phase
II(a) in the United States prior to April 30, 2005; and when each HGS
PRODUCT subject to subparagraph (a)(iii) has competed Phase II(a) in the
United States. Such notice shall include the principal terms and conditions
stated above for SB to exercise its option to such HGS PRODUCT. If SB is
offered the option and does not accept the option in writing within sixty
(60) days after receipt of written notice by HGS under this subparagraph
(c), SB shall no longer have any rights thereto and no royalty shall be
payable by HGS to SB for such HGS PRODUCT.
(d) In the event SB would have been extended an option to an HGS PRODUCT
but for the fact that Phase II(a) CLINICAL STUDIES were not conducted by or
on behalf of HGS, and where HGS begins selling such HGS PRODUCT in any
country, SB shall have an option pursuant to 2.16 (b) and if SB accepts
such option and enters into an agreement
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<PAGE>
pursuant to this Paragraph 10.3, SB and HGS shall enter into such agreement
which shall include the terms in Paragraph 10.3(a)(2)-(4) and shall provide
for SB to reimburse HGS in an amount equal to half of HGS's expenses in the
Phase III/IV development costs of such HGS PRODUCT for the relevant
country. In the event that HGS has to purchase back rights to an HGS
PRODUCT in order to sell such HGS PRODUCT, then SB and HGS shall negotiate
an appropriate allocation of such purchase cost.
11. HGS RIGHT TO MANUFACTURE
------------------------
11.1.SB shall retain the right to make all preclinical, clinical and commercial
supplies of any SB PRODUCT sold by SB or by THIRD PARTIES authorized by SB
which may be required during and after the expiration of this Agreement.
However, in the event that SB decides, at its sole discretion, to have any
quantity of preclinical, clinical and/or commercial supplies of any such
THERAPEUTIC PROTEIN which is an SB PRODUCT made by an entity other than SB
during the term of this Agreement, SB shall give HGS the first right to
supply such quantity subject to all terms of an agreement which shall be
negotiated in good faith by the parties and which agreement shall include
that HGS shall be required to meet all of SB's reasonable cost, quality,
quantity and performance requirements; provided, however, that such first
right shall be subject to and shall not conflict with the rights of TAKEDA
to make and have made SB PRODUCT under the SB/TAKEDA AGREEMENT. If HGS and
SB do not reach such agreement within a reasonable period of time in light
of the circumstances, or if HGS is unable to satisfy SB's reasonable cost,
quality, quantity and performance requirements, then HGS's rights hereunder
shall terminate and SB shall be free to have the SB PRODUCT supplied from
another source.
12. EXCHANGE OF INFORMATION AND CONFIDENTIALITY
- --- -------------------------------------------
12.1.(a) Promptly after the EFFECTIVE DATE, HGS shall disclose and supply to SB
all HGS SPECIAL TECHNOLOGY which HGS has not previously disclosed to SB.
Thereafter, HGS shall promptly and fully disclose to SB any and all
information which is HGS SPECIAL TECHNOLOGY, provided that HGS SPECIAL
TECHNOLOGY that are clones, cell lines and vectors shall be provided to SB
as reasonably requested by SB and as they are reasonably available to HGS.
(b) Notwithstanding Paragraph 12.1(a), after the EFFECTIVE DATE, HGS shall
not be required to transfer to SB sequence data consisting of second walks
and full length sequences not requested by
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SB or biological information each only with respect to potential
THERAPEUTIC PROTEINS which HGS in good faith intends to study as a
THERAPEUTIC PROTEIN , until HGS obtains rights to such THERAPEUTIC PROTEIN
pursuant to Section 6.
(c) Notwithstanding subparagraph (b) HGS shall promptly disclose the
results of research under material transfer agreements (MTAs) listed in
Appendix E and all other MTAs HGS has entered into or enters into during
the period ending at the end of the INITIAL RESEARCH TERM with respect to
TARGETS which are COLLABORATION PRODUCTS, provided that SB may not use such
results to meet the requirement of Paragraph 6.1(a)(i) for more that four
(4) THERAPEUTIC PROTEINS per year.
(d) Promptly after the EFFECTIVE DATE SB shall disclose to HGS all SPECIAL
SB TECHNOLOGY in existence as of the EFFECTIVE DATE to the extent such
SPECIAL SB TECHNOLOGY has not already been transferred to HGS.
12.2.During the term of this Agreement and thereafter, irrespective of any
termination earlier than the expiration of the term of this Agreement, HGS
and SB shall not use or reveal or disclose to THIRD PARTIES any information
or materials received from the other party, without first obtaining the
written consent of such other party or the RC, except as permitted
hereunder. This confidentiality and non-use obligation shall not apply to
disclosures to or uses by TAKEDA pursuant to the SB/TAKEDA AGREEMENT or
disclosures to or uses by COLLABORATION PARTNERS pursuant to COLLABORATION
PARTNER AGREEMENTS. Unless otherwise restricted by this Agreement, the
confidentiality and non-use provisions of this Paragraph 12.2 shall not
apply to such information which
(i) was known to the receiving party or generally known to the public
prior to its disclosure hereunder;
(ii) subsequently becomes known to the public by some means other than
a breach of this Agreement;
(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 information and/or materials;
(v) is approved for release by the parties, or
(vi) is independently developed by employees or agents of either party
or their respective parent corporation or their
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AFFILIATES and/or subsidiaries without any knowledge of the information
and/or materials provided by the other party.
12.3.(a) Nothing in Paragraph 12.2 shall be construed as preventing either
party from disclosing any information to an AFFILIATE or to a licensee,
distributor or joint venture or other associated company of either party
for the purpose of developing or commercializing SB PRODUCT, TAKEDA
PRODUCT, CORIGHTS PRODUCT or HGS PRODUCT as permitted by this Agreement,
provided such AFFILIATE, licensee, distributor or joint venture or other
associated company has undertaken a similar obligation of confidentiality
and non-use with respect to the confidential information.
(b) In the event that SB intends to transfer or disclose HGS SPECIAL
TECHNOLOGY or SB TECHNOLOGY to a THIRD PARTY collaborator that is a
not-for-profit entity (and/or an investigator working for a not-for-profit
entity) no such transfer or disclosure shall take place until such THIRD
PARTY enters into an agreement with SB by which SB is granted a license to
all inventions and patent rights based thereon which result from the use of
such technology. To the extent any such invention would be HGS TECHNOLOGY
or SB TECHNOLOGY if invented or discovered by SB and/or HGS, then such
invention shall be HGS TECHNOLOGY or SB TECHNOLOGY as the case may be
subject to the terms and conditions of this Agreement. HGS agrees that SB
may enter into agreements pursuant to this Paragraph using an Agreement
substantially in the form of MTAs used by SB and/or HGS under the
COLLABORATION AGREEMENT.
(c) Either party may disclose HGS TECHNOLOGY and SB TECHNOLOGY to a THIRD
PARTY contractors or collaborators to facilitate or carry out research
activities under this Agreement provided that such THIRD PARTIES enter into
an agreement with such party which contains confidentiality provisions
substantially the same as those set forth herein and which provides that
all rights in inventions and which result from the use of such technology
by the THIRD PARTY shall be owned by HGS or SB or exclusively licensed to
HGS or SB as the case may be with a right to grant licenses. To the extent
any such invention or discovery would be HGS TECHNOLOGY or SB TECHNOLOGY if
invented or discovered by SB and/or HGS, then such invention or discovery
shall be HGS TECHNOLOGY or SB TECHNOLOGY as the case may be subject to the
terms and conditions of this Agreement.
12.4.All confidential information disclosed by one party to the other shall
remain the intellectual property of the disclosing party. In the
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event that a court or other legal or administrative tribunal, directly or
through an appointed master, trustee or receiver, assumes partial or
complete control over the assets of a party to this Agreement based on the
insolvency or bankruptcy of such party, the bankrupt or insolvent party
shall promptly notify the court or other tribunal (i) that confidential
information received from the other party under this Agreement remains the
property of the other party and (ii) of the confidentiality obligations
under this Agreement. In addition, the bankrupt or insolvent party shall,
to the extent permitted by law, take all steps necessary or desirable to
maintain the confidentiality of the other party's confidential information
and to insure that the court, other tribunal or appointee maintains such
information in confidence in accordance with the terms of this Agreement.
12.5.No public announcement concerning (i) the existence of or terms of this
Agreement (ii) research and/or discoveries made by SB, (iii) milestones
achieved by SB, and (iv) exercise of SB of rights and options granted under
this Agreement shall be made, either directly or indirectly, by any party
to this Agreement without prior written notice to the other party and,
except as may be legally required, or as may be required for a public
offering of securities, or as may be required for recording purposes,
without first obtaining the approval of the other party and agreement upon
the nature and text of such announcement. The party desiring to make any
such public announcement shall inform the other party of the proposed
announcement or disclosure in reasonably sufficient time prior to public
release, and shall provide the other party with a written copy thereof, in
order to allow such other party to comment upon such announcement or
disclosure. This Paragraph 12.5 shall not apply to any information in a
public announcement which is information essentially identical to that
contained in a previous public announcement agreed to pursuant to this
Paragraph.
12.6.Without the prior written approval of the other party, neither SB nor HGS
shall submit for written or oral publication any manuscript, abstract or
the like which is directed to TARGETS and/or to a THERAPEUTIC PROTEIN each
of which is a COLLABORATION PRODUCT prior to the earlier of (1) eighteen
(18) months after SB or HGS, as the case may be, files an SB PATENT or HGS
PATENT, as the case may be, which claims such TARGET or THERAPEUTIC PROTEIN
(but not including EST omnibus filings) or (2) with respect to a
THERAPEUTIC PROTEIN which is a COLLABORATION PRODUCT, the date on which SB
or HGS, as the case may be, obtains rights to such THERAPEUTIC PROTEIN
pursuant to Section 6, or (3)
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the publication in a printed publication, other than through a breach of
this Agreement, of such TARGET or THERAPEUTIC PROTEIN and related
information to be submitted in such written or oral publication; provided
that once a party obtains rights to such THERAPEUTIC PROTEIN pursuant to
Section 6, the other party shall have no rights under this Paragraph with
respect to such THERAPEUTIC PROTEIN. During the INITIAL RESEARCH TERM, HGS
shall provide SB and SB shall provide HGS with all proposed publications
that include HGS TECHNOLOGY or SB TECHNOLOGY received pursuant to a
collaboration with a not-for-profit entity prior to its publication.
12.7.For the avoidance of doubt, nothing in this Agreement shall be construed
as preventing or in any way inhibiting either party from complying with
statutory and regulatory requirements governing the development,
manufacture, use and sale or other distribution of products in any manner
which it reasonably deems appropriate, including, for example, by
disclosing to regulatory authorities confidential or other information
received from a party or THIRD PARTIES. The parties shall take reasonable
measures to assure that no unauthorized use or disclosure is made by others
to whom access to such information is granted.
12.8.During the term of this Agreement, each party shall promptly inform the
other party of any information that it obtains or develops regarding the
utility and safety of a COLLABORATION PRODUCT. Prior to initiating clinical
studies in human patients or volunteers with any COLLABORATION PRODUCT
which will be manufactured, sold, promoted or marketed by both parties in
the same or in different countries anywhere in the world, the parties shall
first agree on methods and procedures for notifying each other of adverse
drug experiences within such time periods and in such form and manner as
are necessary or appropriate in order for each party to comply with its
standard practices and procedures for recording adverse drug experiences
and for reporting adverse drug experiences to appropriate regulatory
authorities.
12.9.Any materials provided by one party to the other under this Agreement
shall be subject to the confidentiality and non-use provisions set out in
this Section. All such materials shall be used in compliance with all
applicable laws and regulations. SB and HGS each certifies that it is
regularly engaged in conducting tests in vitro or in animals used only for
laboratory research purposes, that all materials which SB or HGS receive
under this Agreement will actually be used for these purposes only, and
that no animal used for such tests
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will be used for any food purposes or kept as a domestic pet or livestock.
12.10. SB and HGS agree to comply with any applicable law or regulation of the
United States or any country governing the export or reexport of products
(including test equipment), software, and technical data (and the product
of such data).
12.11. All rights and licensing granted under or pursuant to this Agreement by
HGS to SB are, and shall irrevocably be deemed to be, "intellectual
property" as defined in Section 101(56) of the Bankruptcy Code. In the
event of the commencement of a case by or against either party under any
Chapter of the Bankruptcy Code, this Agreement shall be deemed an executory
contract and all rights and obligations hereunder shall be determined in
accordance with Section 365(n) thereof. Unless a party rejects this
Agreement and the other party decides not to retain its rights hereunder,
the other party shall be entitled to a complete duplicate of (or complete
access to, as appropriate) all intellectual property and all embodiments of
such intellectual property held by the party and the party shall not
interfere with the rights of the other party, which are expressly granted
hereunder, to such intellectual property and all embodiments of such
intellectual property from another entity. Further, this Agreement shall be
deemed, upon presentation to another entity, to be the same as an express
instruction by the party to such other entity to provide such intellectual
property and all embodiments of such intellectual property directly to the
other party. Without limiting the foregoing provisions in this paragraph,
the other party shall be entitled to all post-bankruptcy-petition
improvements, updates, or developments of intellectual property created
hereunder. If such intellectual property is not fully developed as of the
commencement of any bankruptcy case, the other party shall have the right
to complete development of the property.
12.12. For the avoidance of doubt, HGS shall not disclose to a THIRD PARTY any
RESEARCH PROGRAMS and/or work request justifications submitted to HGS by SB
under the COLLABORATION AGREEMENT.
13. PATENT PROSECUTION AND LITIGATION
---------------------------------
13.1.Each party shall have and retain sole and exclusive title to all
inventions, discoveries, designs, works of authorship and other know-how
which are made, conceived, reduced to practice or generated only by its
employees, agents, or other persons acting under its authority. Each party
shall own an equal undivided interest in all such
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inventions, discoveries, designs, works of authorship and other know-how
made, conceived, reduced to practice or generated jointly by employees,
agents, or other persons acting under the authority of both parties. In the
event of jointly owned inventions, HGS shall have the first right to file,
prosecute and maintain patents and applications directed thereto under the
terms and conditions of Paragraph 13.2. If a joint owner does not desire to
file, prosecute or maintain a patent or patent application to a joint
inventions, such owner shall assign its ownership interest therein to the
other. All patents and patent applications to joint inventions which are
HGS SPECIAL TECHNOLOGY and SPECIAL SB TECHNOLOGY shall be both SB PATENTS
and HGS PATENTS, subject to the terms and conditions of the Agreement;
otherwise, any joint owner shall be free to dispose of its interest therein
without accounting to the other joint owner.
13.2.HGS shall have the right within its sole discretion and at its expense to
prepare, file, prosecute and maintain HGS PATENTS. With respect to HGS
PATENTS as to which SB retains a license hereunder, subject to Paragraph
13.10, HGS shall keep SB informed with respect to the filing and
prosecution thereof. In the event that SB desires that HGS obtain and
maintain patent protection in any country with respect to HGS SPECIAL
TECHNOLOGY as to which SB retains a license hereunder, HGS shall do so at
the cost and expense of SB, which expense shall be SB's pro rata share
where a COLLABORATION PARTNER and/or TAKEDA requests HGS to do so with
respect to the same HGS SPECIAL TECHNOLOGY provided that SB shall have the
right within its sole discretion and at its expense to prepare, file,
prosecute and maintain HGS PATENTS to the extent they claim a THERAPEUTIC
PROTEIN or GENE THERAPY VACCINE (and the making, using and selling thereof)
to which SB has obtained exclusive rights pursuant to Section 6 or 7.
13.3.SB shall have the right within its sole discretion and at its expense to
prepare, file, prosecute and maintain SB PATENTS. With respect to SB
PATENTS as to which HGS retains a license hereunder, subject to Paragraph
13.11, SB shall keep HGS informed with respect to the filing and
prosecution thereof. In the event that HGS desires that SB obtain and
maintain patent protection in any country with respect to SPECIAL SB
TECHNOLOGY as to which HGS retains a license hereunder, SB shall do so at
the cost and expense of HGS; provided that HGS shall have the right within
its sole discretion to prepare, file, prosecute and maintain SB PATENTS at
its expense to the extent they claim a THERAPEUTIC PROTEIN or GENE THERAPY
VACCINE
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(and the making, using and selling thereof) to which HGS has obtained
exclusive rights pursuant to Section 6 or 7.
13.4.Each party, on behalf of itself and its directors, employees, officers,
shareholders, agents, successors and assigns hereby waives any and all
actions and causes of action, claims and demands whatsoever, in law or
equity of any kind it or they may have against the other party, its
officers, directors, employees, shareholders, agents, successors and
assigns, which may arise in any way, except as a result of gross
negligence, recklessness, or willful misconduct, in performance of patent
activities under this Section.
13.5.In the event of the institution of any suit by a THIRD PARTY against HGS,
SB or its licensees for patent infringement involving the manufacture, use,
sale, distribution or marketing of HGS PRODUCT or SB PRODUCT, TAKEDA
PRODUCT, or CORIGHT PRODUCT, the party sued shall promptly notify the other
party in writing. The other party shall have the right, to the extent of
its interest, but not the obligation to defend or participate in the
defense of such suit at its own expense. HGS and SB shall assist one
another and cooperate in any such litigation at the other's request without
expense to the requesting party.
13.6.In the event that HGS or SB becomes aware of actual or threatened
infringement of a SB PATENT or HGS PATENT anywhere in the TERRITORY, that
party shall promptly notify the other party in writing. The owner of the SB
PATENT or HGS PATENT shall have the first right but not the obligation to
bring, at its own expense, an infringement action against any THIRD PARTY
and to use the other party's name in connection therewith. If the owner of
the patent does not commence a particular infringement action within thirty
(30) days, the other party, after notifying the owner in writing, shall be
entitled to bring such infringement action at its own expense to the extent
that such party is licensed thereunder and in its own name and/or in the
name of the owning party. The foregoing notwithstanding, in the event that
an alleged infringer certifies pursuant to 21 USC 355(b)(2)(A)(vii)(IV) or
(j)(2)(A)(iv) against an issued HGS PATENT or SB PATENT covering a
COLLABORATION PRODUCT, the party receiving notice of such certification
shall immediately notify the other party of such certification, and if
fourteen (14) days prior to expiration of the forty fine (45) day period
set forth in 21 USC 355(c)(3)(C) or (j)(4)(B)(iii), the owner of the HGS
PATENT or SB PATENT fails to commence an infringement action, the party
receiving notice, in its sole discretion, at its own expense and to the
extent that it is licensed under the HGS PATENT or SB PATENT, shall be
entitled to bring
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such infringement action in its own name and/or in the name of the owning
party The party conducting such action shall have full control over its
conduct, including settlement thereof provided such settlement shall not be
made without the prior written consent of the other party if it would
adversely affect the patent rights of the other party. In any event, HGS
and SB shall assist one another and cooperate in any such litigation at the
other's request without expense to the requesting party.
13.7.HGS and SB shall recover their respective actual out-of-pocket expenses,
or equitable proportions thereof, associated with any litigation or
settlement thereof from any recovery made by any party. Any excess amount
shall be shared between SB and HGS in an amount proportional to their
respective losses and expenses.
13.8.The parties shall keep one another informed of the status of and of their
respective activities regarding any such litigation or settlement thereof.
13.9.The owner of a SB PATENT or HGS PATENT shall have the first right to seek
extensions of the terms of the patent and to seek to obtain SPCs. A party
who is developing, selling or planning to sell a product covered by a
patent shall have the second right. Each party shall assist the other in
the obtaining of such extensions or SPCs including by authorizing the other
party to act as its agent.
13.10.The disclosure obligations of Paragraph 13.2 shall only apply to HGS
PATENTS which include HGS SPECIAL TECHNOLOGY which HGS has disclosed to SB
Pursuant to this Agreement.
13.11.The disclosure obligations of Paragraph 13.3 shall only apply to SB
PATENTS which claim SPECIAL SB TECHNOLOGY which SB has disclosed to HGS
pursuant to this Agreement.
14. TRADEMARKS AND NON-PROPRIETARY NAMES
------------------------------------
14.1.SB, at its expense, shall be responsible for the selection, registration
and maintenance of all trademarks which it employs in connection with SB
PRODUCT and shall own and control such trademarks. Nothing in this
Agreement shall be construed as a grant of rights, by license or otherwise,
to HGS to use such trademarks for any purpose other than co-promotion as
provided in this Agreement.
14.2.SB, at its expense, shall be responsible for the selection and
registration of non-proprietary names employed by SB for SB PRODUCT.
14.3.HGS, at its expense, shall be responsible for the selection, registration
and maintenance of all trademarks which it employs in
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connection with HGS PRODUCT and shall own and control such trademarks.
Nothing in this Agreement shall be construed as a grant of rights, by
license or otherwise, to SB to use such trademarks for any purpose other
than co-promotion as provided in this Agreement.
14.4.HGS, at its expense, shall be responsible for the selection and
registration of non-proprietary names employed by HGS for HGS PRODUCT.
14.5.(a) At no expense to HGS, SB and its licensees under this Agreement shall
be responsible for the selection, registration and maintenance of all
trademarks which they employ in connection with a SB PRODUCT in the SB
FIELD in SOUTHEAST ASIA and TAKEDA PRODUCT, and shall own and control such
trademarks. Nothing in this Agreement shall be construed as a grant of
rights, by license or otherwise, to HGS to use such trademarks for any
purpose.
(b) At no expense to HGS, SB and its licensees under this Agreement shall
be responsible for the selection and registration of non-proprietary names
for SB PRODUCT in the SB FIELD in SOUTHEAST ASIA and TAKEDA PRODUCT.
15. STATEMENTS AND REMITTANCES
--------------------------
15.1.Each party, as the case may be, shall keep and require its licensees to
keep complete and accurate records of all NET SALES of HGS PRODUCT, SB
PRODUCT, CORIGHTS PRODUCT and TAKEDA PRODUCT subject to royalties under the
licenses granted herein or in the applicable COLLABORATION PARTNER
AGREEMENT or SB/TAKEDA AGREEMENT. Each party shall have the right, at its
expense, through a certified public accountant or like person reasonably
acceptable to the other party, to examine such records during regular
business hours during the life of this Agreement and for six (6) months
after its termination; provided, however, that such examination shall not
take place more often than once a year and provided further that such
accountant shall report only as to the accuracy of the royalty statements
and payments, including the magnitude and source of any discrepancy.
Neither party nor their licensees shall be required to maintain such
records for more than three (3) years.
15.2.Except for SB PRODUCT and TAKEDA PRODUCT sold by TAKEDA or its licensees
under the SB/TAKEDA AGREEMENT, within sixty (60) days after the close of
each calendar quarter, each party shall deliver to the other a true
accounting of all SB PRODUCT, CORIGHTS PRODUCT, TAKEDA PRODUCT or HGS
PRODUCT sold by it and its licensees and distributors during such quarter
for which royalties are payable and shall at the same time pay all
royalties due.
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Such accounting shall show sales on a country-by-country and
product-by-product basis.
15.3.Within ninety (90) days after the close of each half year, SB shall
deliver to HGS a true accounting of all SB PRODUCT or TAKEDA PRODUCT, sold
under authority of the SB/TAKEDA AGREEMENT by TAKEDA and its licensees and
distributors during such half year and shall at the same time pay all
royalties due to HGS as a result of or deriving from such sales. Such
accounting shall show sales on a country-by-country and product-by-product
basis.
15.4.Any tax paid or required to be withheld on account of the licensing party
based on milestone payments or royalties payable under this Agreement shall
be deducted from the amount of milestones or royalties otherwise due. Taxes
paid or withheld from monies due SB by TAKEDA or its licensees shall be
deducted proportionately from the amount of monies otherwise due HGS. Each
party shall secure and send to the other proof of any such taxes withheld
and paid.
15.5.All royalties due under this Agreement shall be payable in U.S. dollars.
If governmental regulations prevent remittances from a foreign country with
respect to sales made in that country, the obligation to pay royalties on
sales in that country shall be suspended until such remittances are
possible. Each party shall have the right, upon giving written notice to
the other, to receive payment in that country in local currency.
15.6.Monetary conversations from the currency of a foreign country, in which a
product is sold, into United States currency shall be made at the official
exchange rate in force in that country for financial transactions on the
last business day of the calendar quarter or half year for which the
royalties are being paid. If there is no such official exchange rate, the
conversation shall be made at the rate for such remittances on that date as
certified by Citibank, N.A., New York, New York, U.S.A.
16. TERM AND TERMINATION
--------------------
16.1.This Agreement shall come into effect as of the EFFECTIVE DATE and shall
remain in full force and effect unless earlier terminated as provided in
this Section 16.
16.2.In the event HGS fails to make a payment to SB under this Agreement or a
co-promotion agreement with respect to an HGS PRODUCT when due, or fails to
meet its obligations under Section 9 with respect to an HGS PRODUCT, in
addition to any other remedy which it may have, SB may notify HGS in
writing that all of HGS's rights with respect to such HGS PRODUCT shall
terminate as of sixty
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(60) days after such written notice and HGS's rights with respect thereto
shall terminate unless such payment is made or such failure is cured, prior
to the expiration of such sixty (60) day period.
16.3.In the event SB fails to make a payment to HGS under this Agreement or a
co-promotion agreement with respect to an SB PRODUCT when due, or fails to
meet its obligations under Section 9 with respect to an SB PRODUCT, in
addition to any other remedy which it may have, HGS may notify SB in
writing that, subject to SB licensee rights provided in Paragraph 17.4(a),
all of SB's rights with respect to such SB PRODUCT shall terminate as of
sixty (60) days after such written notice and SB's rights with respect
thereto shall terminate unless such payment is made or such failure is
cured, prior to the expiration of such sixty (60) day period.
16.4 Either party may terminate this Agreement if, at any time, the other party
shall file in any court or agency pursuant to any statute or regulation of
any state or country, a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a receiver
or trustee of the party or of its assets, or if the other party proposes a
written agreement of composition or extension of its debts, or if the other
party shall be served with an involuntary petition against it, filed in any
insolvency proceeding, and such petition shall not be dismissed within
sixty (60) days after the filing thereof, or if the other party shall
propose or be a party to any dissolution or liquidation, or if the other
party shall make an assignment for the benefit of creditors.
16.5 Notwithstanding the bankruptcy of HGS or SB, or the impairment of
performance by HGS or SB of its obligations under this Agreement as a
result of bankruptcy or insolvency of HGS or SB, the other party shall be
entitled to retain the licenses granted herein, and SB licensees shall be
entitled to retain their rights as provided in Paragraph 17.4 hereof,
subject to rights of a party to terminate this Agreement for reasons other
than bankruptcy or insolvency as expressly provided in this Agreement.
16.6 Neither party shall have the right to terminate this Agreement except under
Paragraph 16.4, provided however that nothing in this Agreement shall limit
any remedies for breach which may be available pursuant to a judgment of a
court, in law or equity, including termination of this Agreement or of any
or all rights hereunder.
16.7 In the event that by one (1) year after the end of the INITIAL RESEARCH
TERM, SB has not obtained the full length DNA coding sequence for a TARGET
encompassed by, and as used in, an ANTIBODY RESEARCH PLAN and/or DRUG
RESEARCH PLAN
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submitted by SB under this Agreement and SB has not certified in writing
(e.g, inclusion of such sequence in a RESEARCH PLAN) to HGS that such
sequence(s) has been obtained, HGS by written notice to SB may terminate
all rights and licenses to such TARGETS(S) and such rights and licenses
shall terminate thirty (30) days thereafter unless SB prior to the
expiration of such thirty (30) days has obtained such sequence and has
certified in writing to HGS that such sequence has been obtained. Upon any
termination of rights and licenses to a TARGET under this Paragraph 16.7,
SB shall discontinue all work encompassed by such ANTIBODY RESEARCH PLAN or
DRUG RESEARCH PLAN as the case may be.
17. RIGHTS AND DUTIES UPON TERMINATION
----------------------------------
17.1.Upon termination of this Agreement in its entirety or with respect to any
SB PRODUCT, CORIGHTS PRODUCT, TAKEDA PRODUCT or HGS PRODUCT or to any
country, each party shall notify the other of the amount of such product it
and its licensees and distributors then have on hand, the sale of which
would, but for the termination, be subject to royalty, and such party and
its licensees and distributors shall thereupon be permitted to sell that
amount of the product provided that the party shall pay the royalty thereon
at the time herein provided for provided, however, that no such termination
of the this Agreement shall affect the rights of an SB licensee to sell
such SB PRODUCT or TAKEDA PRODUCT to the extent such rights survive such
termination under Paragraph 17.4 of this Agreement.
17.2.Termination of this Agreement shall terminate all outstanding obligations
and liabilities between the parties arising from this Agreement except
those described in Paragraphs 2.10, 2.14, 2.24, 12.2, 12.4, 12.7, and 13.1
and Sections 15, 17, 19, 21, and 28, as well as any provision not specified
in this Paragraph which is clearly meant to survive termination of this
Agreement.
17.3.Termination of the Agreement in accordance with the provisions hereof
shall not limit remedies which may be otherwise available in law or equity.
17.4.All rights of licensees pursuant to licenses granted by SB to TAKEDA or
otherwise to an SB PRODUCT in SOUTHEAST ASIA under this Agreement shall
survive termination of this Agreement pursuant to Paragraph 16.3, or
Paragraph 16.4 thereof in the event of the bankruptcy or similar event
listed in such Paragraph 16.4 with respect to SB, provided that the
following conditions are met: (i) the SB licensee is not then in breach of
its license; (ii) except for the SB/TAKEDA AGREEMENT, HGS's rate of royalty
compensation thereunder is no less than the rate of royalty compensation to
HGS
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under this Agreement; (iii) HGS assumes no performance obligations under
the license agreement; and (iv) SB and its licensee assign the license
agreement to HGS within sixty (60) days after such termination and as a
result of such assignment such licensee is directly obligated to HGS. All
rights of licensees with respect to a SB PRODUCT pursuant to licenses
granted by SB under this Agreement shall survive termination of SB's rights
with respect to such SB PRODUCT pursuant to Paragraph 16.3 or Paragraph
16.4 hereof, provided that the above-stated conditions are met with respect
to such rights of the licensees.
18. WARRANTIES AND REPRESENTATIONS
------------------------------
18.1.Nothing in this Agreement shall be construed as a warranty that SB
PATENTS, COLLABORATION PARTNER PATENTS or HGS PATENTS are valid or
enforceable or that their exercise does not infringe any patent rights of
THIRD PARTIES. A holding of invalidity or unenforceability of any such
patent, from which no further appeal is or can be taken, shall not affect
any obligation already accrued hereunder, but shall only eliminate
royalties otherwise due under such patent from the date such holding
becomes final.
18.2.Each party warrants and represents that it has the right to enter into
this Agreement and to perform in accordance therewith.
18.3.HGS hereby further represents and warrants that, during the INITIAL
RESEARCH TERM, HGS will not grant TIGR permission to disclose or provide to
a THIRD PARTY materials which are GENES in circumstances where TIGR
requires such permission without SB's prior consent. HGS' failure to take
action against TIGR where TIGR is in breach of an obligation to HGS shall
not be construed as HGS granting TIGR permission to disclose or provide
such materials.
18.4.Except as otherwise expressly set forth herein neither party makes any
representations or extends any warranties of any kind, either express or
implied, including, but not limited to, warranties of merchantability or
fitness for a particular purpose.
18.5.Each party guarantees that its respective AFFILIATES will perform all
obligations under this Agreement as if such AFFILIATES were signatories of
this Agreement.
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19. INDEMNIFICATION
---------------
19.1.SB shall defend, indemnify and hold harmless HGS, AFFILIATES of HGS,
licensors of HGS and their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages
and expenses (including attorneys' fees) as the result of claims, demands,
costs or judgments which may be made or instituted against any of them
arising out of the manufacture, possession, distribution, use, testing,
sale or other disposition by or through SB or any THIRD PARTY granted
rights by SB under this Agreement of any SB PRODUCT. SB's obligation to
defend, indemnify and hold harmless shall include claims, demands, costs or
judgments, whether for money damages or equitable relief by reason of
alleged personal injury (including death) to any person or alleged property
damage, provided, however, the indemnity shall not extend to any claims
against an indemnified party which result from the gross negligence or
willful misconduct of such indemnified party. SB shall have the exclusive
right to control the defense of any action which is to be indemnified in
whole by SB hereunder, including the right to select counsel acceptable to
HGS to defend HGS and to settle any claim, provided that, without the
written consent of HGS (which shall not be unreasonably withheld or
delayed), SB shall not agree to settle any claim against HGS to the extent
such claim has a material adverse effect on HGS. The provisions of this
Paragraph shall survive and remain in full force and effect after any
termination, expiration or cancellation of this Agreement and obligation
hereunder shall apply whether or not such claims are rightfully brought. SB
shall require each licensee to agree to indemnify HGS in a manner
consistent with this Paragraph.
19.2.HGS shall defend, indemnify and hold harmless SB, AFFILIATES of SB,
licensors of SB and their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages
and expenses (including attorneys' fees) as the result of claims, demands,
costs or judgments which may be made or instituted against any of them
arising out of the manufacture, possession, distribution, use, testing,
sale or other disposition by or through HGS or its AFFILIATES or any THIRD
PARTY granted rights by HGS under this Agreement of any HGS PRODUCT. HGS's
obligation to defend, indemnify and hold harmless shall include claims,
demands, costs or judgments, whether for money damages or equitable relief
by reason of alleged personal injury (including death) to any person or
alleged property damage, provided, however, the indemnity shall not extend
to any claims against an indemnified party which result from the gross
negligence or willful misconduct of such
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indemnified party. HGS shall have the exclusive right to control the
defense of any action which is to be indemnified in whole by HGS hereunder,
including the right to select counsel acceptable to SB to defend SB and to
settle any claim, provided that, without the written consent of SB (which
shall not be unreasonably withheld or delayed), HGS shall not agree to
settle any claim against SB to the extent such claim has a material adverse
effect on SB. The provisions of this Paragraph shall survive and remain in
full force and effect after any termination, expiration or cancellation of
this Agreement and HGS obligation hereunder shall apply whether or not such
claims are rightfully brought. HGS shall require each licensee to agree to
indemnify SB in a manner consistent with this Paragraph.
19.3.A person or entity that intends to claim indemnification under this
Section 19 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any loss, claim, damage, liability or action in respect of
which the Indemnitee intends to claim such indemnification, and the
Indemnitor, after it determines that indemnification is required of it,
shall assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an Indemnitee shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
Indemnitor if Indemnitor does not assume the defense; or, if representation
of such Indemnitee by the counsel retained by the Indemnitor would be
inappropriate due to actual or potential differing interests between such
Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Section 19 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action
is such settlement is effected without the consent of the Indemnitor, which
consent shall not be withheld unreasonably. The failure to deliver notice
to the Indemnitor within a reasonable time after the commencement of any
such action, if prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this
Section 19, but the omission so to deliver notice to the Indemnitor will
not relieve it of any liability that it may have to any Indemnitee
otherwise than under this Section 19. The Indemnitee under this Section 19,
its employees and agents, shall cooperate fully with the Indemnitor and its
legal representatives in the investigations of any action, claim or
liability covered by this indemnification. In the event that each party
claims indemnity from the other and one party is finally held liable to
indemnify the other, the Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
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20. FORCE MAJEURE
-------------
20.1.If the performance of any party of this Agreement by either party, or of
any obligation under this Agreement, is prevented, restricted, interfered
with or delayed by reason of any clause beyond the reasonable control of
the party liable to perform, unless conclusive evidence to the contrary is
provided, the party so affected shall, upon giving written notice to the
other party, be excused from such performance to the extent of such
prevention, restriction, interference or delay, provided that the affected
party shall use its reasonable best efforts to avoid or remove such causes
of non-performance and shall continue performance with the utmost dispatch
whenever such causes are removed. When such circumstances arise, the
parties shall discuss what, if any, modification of the terms of this
Agreement may be required in order to arrive at an equitable solution.
21. GOVERNING LAW
-------------
21.1.This Agreement shall be deemed to have been made in the Commonwealth of
Pennsylvania and its form, execution, validity, construction and effect
shall be determined in accordance with the laws of the Commonwealth of
Pennsylvania, U.S.A.
22. SEPARABILITY
------------
22.1.In the event any portion of this Agreement shall be held illegal, void or
ineffective, the remaining portions hereof shall remain in full force and
effect.
22.2.If any of the terms or provisions of this Agreement are in conflict with
any applicable statute or rule of law, then such terms or provisions shall
be deemed inoperative to the extent that they may conflict therewith and
shall be deemed to be modified to conform with such statute or rule of law.
22.3.In the event that the terms and conditions of this Agreement are
materially altered as a result of Paragraphs 22.1 or 22.2, the parties will
renegotiate in good faith the terms and conditions of this Agreement to
resolve any inequities.
23. ENTIRE AGREEMENT
----------------
23.1 This Agreement, entered into as of the date written above, constitutes the
entire agreement between the parties relating to the subject matter hereof
and supersedes all previous writings and understandings relating to such
subject matter. No terms or provisions of this Agreement shall be varied or
modified by any prior or subsequent statement, conduct or act of either of
the parties, except that the parties may amend this Agreement by written
instruments specifically referring to and executed in the same manner as
this Agreement.
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23.2 (a) Neither HGS nor SB may enter into any agreement with a COLLABORATION
PARTNER which amends the terms and conditions of the COLLABORATION PARTNER
AGREEMENT to which such COLLABORATION PARTNER is a party without the prior
written consent of the other; and (b) SB may not amend the terms and
conditions of the SB/TAKEDA AGREEMENT in a manner that materially affects
HGS without the prior written consent of HGS, which consent shall not be
unreasonably withheld.
23.3.The headings and titles to the Sections and Paragraphs of this Agreement
are inserted for convenience only and shall not be deemed a part hereof or
affect the construction or interpretation of any provision hereof.
24. NOTICES
-------
24.1.Any notice required or permitted under this Agreement shall be sent by air
mail, postage pre-paid, courier or fax to the following addresses of the
parties or such other addresses as may be notified to the parties as
provided herein:
HGS: HUMAN GENOME SCIENCES, INC.
9410 Key West Avenue
Rockville, Maryland 20850
Attention: Chief Executive Officer
fax: 301-309-0092
copy to:
Mr. Elliot Olstein
Carella, Byrne, Bain, Gilfillan, Cecchi & Stewart
6 Becker Farm Road
Roseland, New Jersey 07068
fax: 201-994-1744
SB: SMITHKLINE BEECHAM CORPORATION
709 Swedeland Road
King of Prussia, Pennsylvania 19103
Attention: Vice-President,
Advanced Technologies in Genetics
SmithKline Beecham Pharmaceuticals
fax: 610-270-6663
copy to:
SMITHKLINE BEECHAM CORPORATION
709 Swedeland Road
P. O. Box 1539
King of Prussia, Pennsylvania 19406
Attention: Corporate Intellectual Property
fax: 610-270-4026
58
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24.2.Any notice required or permitted to be given concerning this Agreement
shall be effective upon receipt by the party to whom it is addressed.
25. ASSIGNMENT
----------
25.1.This Agreement and the licenses herein granted shall be binding upon and
inure to the benefit of the successors in interest of the respective
parties. Neither this Agreement nor any interest hereunder shall be
assignable by either party without the written consent of the other
provided, however, that SB or HGS may assign this Agreement or any of its
rights or obligations hereunder to any AFFILIATE or to any THIRD PARTY with
which it may merge or consolidate, or to which it may transfer all or
substantially all of its assets to which this Agreement relates, without
obtaining the consent of the other party, subject to Paragraphs 10.1 (viii)
and 10.2 (viii), provided the assigning party remains liable under this
Agreement and that the THIRD PARTY assignee or surviving entity assumes in
writing all of its obligations under this Agreement. HGS hereby consents
and agrees to accept any assignment to HGS of a license agreement by SB and
its licensee pursuant to Paragraph 17.4 if the conditions of Paragraph
17.4(a)(i),(ii)(iii) and (iv) are satisfied. .
26. RECORDING
---------
26.1.SB and HGS shall have the right, at any time, to record, register, or
otherwise notify this Agreement in appropriate governmental or regulatory
offices anywhere in the TERRITORY, and the other party shall provide
reasonable assistance to the notifying party in effecting such recording,
registering or notifying.
27. DISPUTE RESOLUTION
------------------
27.1.Senior management of SB and HGS shall endeavor to resolve all disputes
under this Agreement.
27.2.If there is a tie vote within the RC over an issue within the jurisdiction
of the RC, which tie vote is not timely solved by the RC, and if senior
management does not timely resolve any such tie vote, then either party may
submit such to binding arbitration pursuant to the SB/HGS arbitration
agreement dated 19 August, 1993 as may be amended from time to time.
27.3.Either party may submit disputes arising from Paragraphs 6.2 and 7.4 to
binding arbitration pursuant to the SB/HGS Arbitration Agreement dated 19
August 1993 as may be amended from time-to-time.
28. COVENANTS
---------
28.1.
(a) SB agrees not to use SB TECHNOLOGY except
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(1) during the INITIAL RESEARCH TERM and RESEARCH TERM EXTENSIONS to
perform research and development in the SB FIELD and after the INITIAL
RESEARCH TERM and RESEARCH TERM EXTENSIONS to perform research and
development in the SB FIELD pursuant to a RESEARCH PLAN submitted by or
on behalf of SB pursuant to this Agreement,
(2) in the HGS FIELD to perform research and development only (i) in
furtherance of research and development in the SB FIELD during the
INITIAL RESEARCH TERM and RESEARCH TERM EXTENSIONS, and (ii) after the
INITIAL RESEARCH TERM and RESEARCH TERM EXTENSIONS only in furtherance
of research and development in the SB FIELD pursuant to a RESEARCH PLAN
submitted by or on behalf of SB pursuant to this Agreement,
(3) to perform research and development of GENE THERAPY VACCINES during
the INITIAL RESEARCH TERM,
(4) to make, have made, use, and sell SB PRODUCT (other than SB
PRODUCTS to which SB's rights have been terminated pursuant to
Paragraph 16.3), TAKEDA PRODUCT and CORIGHTS PRODUCT and as expressly
permitted under this Agreement, HGS PRODUCTS,
(5) to grant licenses that SB is otherwise permitted to grant pursuant
to this Agreement, and
(b) during and after the INITIAL RESEARCH TERM, SB agrees not to use HGS
SPECIAL TECHNOLOGY except as licensed and permitted pursuant to this
Agreement;
(c) Notwithstanding the preceding, SB shall have the right to use SB
TECHNOLOGY that is solely based on or derived from published information
and/or information which otherwise becomes lawfully known to SB
independently of this Agreement, unless: (i) the information is claimed in
a published HGS PATENT or SB PATENT and there is no THIRD PARTY patent
application or patent with an earlier priority date which discloses the
information or (ii) the SB TECHNOLOGY results from a RESEARCH PLAN
undertaken by SB.
28.2.HGS shall not use SPECIAL SB TECHNOLOGY except as licensed or permitted
under this Agreement. Notwithstanding the preceding, HGS shall have the
right to use SPECIAL SB TECHNOLOGY independently of this Agreement if such
SPECIAL SB TECHNOLOGY is solely based on or derived from published
information and/or information which otherwise becomes lawfully known to
HGS independently of this Agreement, unless: the information is claimed in
a published HGS PATENT or SB PATENT and there is no THIRD
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PARTY patent application or patent with an earlier priority date which
discloses the information.
28.3.Notwithstanding anything else to the contrary, the following uses of SB
TECHNOLOGY and/or HGS SPECIAL TECHNOLOGY shall not be a breach of this
Agreement by SB:
(i) use of unpatented HGS TECHNOLOGY outside a RESEARCH PLAN submitted by
SB in accordance with this Agreement after the later of the end of the
INITIAL RESEARCH TERM or RESEARCH TERM EXTENSIONS which HGS TECHNOLOGY at
the time of such use is generally available to the public, and/or
(ii) use of SB TECHNOLOGY outside a RESEARCH PLAN submitted by SB in
accordance with this Agreement developed after the later of the end of the
INITIAL RESEARCH TERM or RESEARCH TERM EXTENSIONS which is SB TECHNOLOGY
only as a result of the use of unpatented HGS TECHNOLOGY which is generally
available to the public at the time of such use; and/or
(iii) use of BIOINFORMATICS after the end of the INITIAL RESEARCH TERM or
RESEARCH TERM EXTENSION which BIOINFORMATICS is SB TECHNOLOGY; and/or
61
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(iv) use of SB TECHNOLOGY with respect to any products discovered [***]
years after the later of the end of the INITIAL RESEARCH TERM or RESEARCH
TERM EXTENSIONS outside a RESEARCH PLAN submitted by SB in accordance with
this Agreement.
29. COUNTERPARTS
------------
29.1 This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.
IN WITNESS WHEREOF, the parties, through their authorized officers,
have executed this Agreement as of the date first written above.
SmithKline Beecham Corporation
By:______________________________
SmithKline Beecham, p.l.c.
By:______________________________
Human Genome Sciences, Inc.
By:______________________________
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APPENDIX A
SAMPLE ANTIBODY RESEARCH PLAN
1. Target (Antigen) Identification (HGS Sequence ID#)
2. Rationale
- Brief description of hypothesis
- Expected indications for product
- Brief summary of supporting biological data on target (antigen)
3. Status of Cloning and Expression or Synthesis of Target (Antigen)
- nucleotide sequence encoding Target (Antigen) (as available)
4. Patent Status
5. Estimated date for start of laboratory animal immunization
63
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APPENDIX B
COLLABORATION PARTNERS
SP
MERCK
SYNTHELABO
any other entity pursuant to Paragraph 1.11
64
<PAGE>
APPENDIX C
Sample DRUG RESEARCH PLAN
1. Target Identification (HGS Sequence ID#)
2. Rationale
- Brief description of hypothesis
- Brief summary of supporting biological data on target
- Expected Indications for Product
3. Status of full length cloning and expression
- nucleotide sequence encoding Target (as available)
4. Patent status
5. Estimated date for the start of small molecule screening.
(No description of the screen is required.)
6. Chemical optimization
- No details required
- Estimated date of start (can be updated)
7. Plan updates if and when a potential development compound is identified
- R&D product (compound) code #/INN name/generic name
(when available)
- Notification when a compound enters preclinical
development
- Notification when a compound enters clinical development
- Notification when regulatory approvals are sought
65
<PAGE>
APPENDIX D
SAMPLE PROTEIN RESEARCH PLAN
1. Therapeutic Protein Identification (HGS Sequence ID#)
2. Rationale
- Brief description of hypothesis
- Expected indications for Product
3. Biological data on protein
- Full length cloning
- Expression and purification
full length nucleotide sequence of the GENE encoding the
THERAPEUTIC PROTEIN
The protein preparation(s) used for the in vivo activity demonstration must be
purified to the level specified in Paragraph 6.1(a), and evidence of this purity
level must be included in the research plan.
- In vivo demonstration of relevant pharmacological activity
(along with supporting demonstration of in vitro or ex vivo demonstrations of
activity if available)
In certain instances, in vivo demonstration of activity will not be possible for
scientific reasons. In these specific cases, an ex-vivo or in vitro
demonstration of activity will be acceptable.
4. Patent status(full length gene patent application must have been filed)
5. Research and development plan
This plan need not contain detail of these activities, but rather
one-line descriptions of planned activities (with estimates of timing). Not all
of these plans/timings will be available when the initial plan is submitted, but
will be added as part of the yearly update of the plan.
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<PAGE>
- Further preclinical studies of activity
- Preclinical development
- determination of pharmacokinetic profile
- initiation of toxicology studies
- Steps to completion of IND package
- Certain key milestones in production/scale-up
- Clinical development
- Major phase transition (when available and appropriate)
67
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
APPENDIX E
MTAS FOR SECTION 12
HGS MTA STATUS SUBJECT
------- ------ -------
Collaboration #120 Signed [***]
Collaboration #121 Signed [***]
Collaboration #174 Signed [***]
Collaboration #177 Signed [***]
Collaboration #199 Signed [***]
Collaboration #203 Signed [***]
Collaboration #204 Signed [***]
Collaboration #207 Signed [***]
Collaboration #221 Signed [***]
Collaboration #230 Signed [***]
Collaboration #235 Signed [***]
Collaboration #236 Signed [***]
Collaboration #242 SB approved [***]
Collaboration #243 Proposed [***]
Collaboration #247 Proposed [***]
Collaboration #249 Proposed [***]
Collaboration #253 Proposed [***]
Collaboration/CRADA SB Approved [***]
(Fauci-NIH)
68
<PAGE>
APPENDIX F
SB/TAKEDA AGREEMENT IN EXISTENCE AS OF THE EFFECTIVE DATE
69
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<DESCRIPTION>THERAPEUTIC COLLABORATION AND LICENSE AGREEMENT
<TEXT>
"Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by [***], have been
separately filed with the Commission."
THERAPEUTIC COLLABORATION AND LICENSE AGREEMENT
This Agreement ("Agreement"), effective as of the 28th of June, 1996 (the
"EFFECTIVE DATE"), by and among Human Genome Sciences, Inc., a corporation
organized under the laws of the State of Delaware, United States of America,
having a place of business at 9410 Key West Avenue, Rockville, Maryland 20850,
for itself and its AFFILIATES, as defined below (collectively including such
AFFILIATES "HGS"), Schering Corporation, a corporation organized under the laws
of the State of New Jersey, United States of America, having a place of business
at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033, and Schering Plough
Ltd., a Swiss corporation having its principal place of business at
Toepferstrasse 5, CH-6004 Lucerne, Switzerland, each for itself and its
AFFILIATES, as defined below (collectively including such AFFILIATES "SP"), and
SmithKline Beecham Corporation, a corporation organized under the laws of the
Commonwealth of Pennsylvania, United States of America, having a place of
business at 709 Swedeland Road, King of Prussia, Pennsylvania, 19406 and
SmithKline Beecham, plc, having a place of business at Great West Road,
Brentford, Middlesex, U.K.
WITNESSETH THAT:
----------------
WHEREAS HGS is in possession of certain human gene sequence information and
has the capacity and ability to rapidly obtain full or meaningful partial
sequence data for expressed human genes,
WHEREAS, HGS and SB (as defined below) have entered into a
COLLABORATION AGREEMENT relating to sequencing of human genes and development of
practical applications
therefor and have amended such COLLABORATION AGREEMENT to permit them to
collaborate with and grant certain rights to SP.
WHEREAS SP is a multinational human healthcare company which has the
capacity and ability to develop practical applications in the human healthcare
field of the gene sequence data in the possession of or within the capacity and
ability of HGS to obtain,
WHEREAS HGS, SB and SP wish to grant rights to each other with respect to
developing human therapeutic products.
NOW, THEREFORE, in consideration of the covenants and obligations expressed
herein, and intending to be legally bound, and otherwise to be bound by proper
and reasonable conduct, the parties agree as follows:
1. DEFINITIONS
-----------
1.1 "AFFILIATES" shall mean any individual or entity directly or
indirectly controlling, controlled by or under common control with, the
specified individual or entity. For purposes of this Agreement, the direct or
indirect ownership of over fifty percent (50%) of the outstanding voting
securities of an entity, or the right to receive over fifty (50%) of the profits
or earnings of an entity shall be deemed to constitute control. Such other
relationship as in fact gives such individual or entity the power or ability to
control the management, business and affairs of an entity shall also be deemed
to constitute control.
1.2 "ANTIBODY PRODUCT" shall mean an antibody (monoclonal or
polyclonal) or fragments or constructs thereof in the SP FIELD which is
potentially useful for the treatment or prevention of a disease or disorder in
humans.
2
<PAGE>
1.3 "ANTIBODY RESEARCH PLAN" shall mean a plan for developing an SP
ANTIBODY PRODUCT. A representative sample of such a plan is shown in Appendix A.
1.4 "ANTISENSE" shall mean inhibiting or preventing in vivo expression
in a human or animal of a gene product by use of an oligonucleotide or modified
oligonucleotide which binds to RNA or DNA to prevent and/or impair expression of
the gene product.
1.5 "BLOCKING CLAIM" shall mean a claim under any patent application or
granted patent anywhere in the world which generically but not specifically
claims (i) any and all compounds (and/or the use thereof) which interact with or
prevent interaction with a specified TARGET which is a PRODUCT (i.e., an omnibus
claim) and/or (ii) any and all antibodies (and/or the use thereof) against a
specified THERAPEUTIC PROTEIN (i.e., an omnibus claim). The following are
representative but not exclusive examples of claim language for "BLOCKING
CLAIMS": (1) a compound which interacts with receptor X; (2) a compound which
prevents binding between receptor X and its ligand, (3) a process for activating
receptor X, comprising: contacting receptor X with a compound which binds
thereto and activates the receptor; (4) a process for preventing activation of
receptor X comprising contacting receptor X with a compound which prevents
binding between receptor X and its ligand , and (5) a compound which is capable
of interacting with a receptor X.
1.6 "cDNA" shall mean complementary DNA prepared from human messenger
RNA.
1.7 "COLLABORATION AGREEMENT" shall mean the Collaboration Agreement
entered into between SB and HGS effective as of May 19, 1993, as amended or
superseded from time to time, a copy of the version to be in effect on the
EFFECTIVE DATE having been provided to SP prior to the EFFECTIVE DATE.
3
<PAGE>
1.8 "COLLABORATION PARTNER" shall mean those entities which are set
forth in Appendix B and any entity added to Appendix B or substituted for an
entity in Appendix B, pursuant to the terms of the COLLABORATION AGREEMENT,
provided that the aggregate of COLLABORATION PARTNERS shall be no more than four
entities at any one time.
1.9 "COLLABORATION BLOCKING PATENT" means a patent or patent
application filed prior to the end of the INITIAL RESEARCH TERM owned by a
COLLABORATION PARTNER, SB, or HGS only to the extent that it includes a
"BLOCKING CLAIM" and as to which HGS and/or SB has the right to grant a license
to SP. Included within the definition are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals,
extensions, registrations, confirmations, reexaminations, provisional
applications, SPCs.
1.10 "COLLABORATION PATENT" means a COLLABORATION BLOCKING PATENT
and/or COLLABORATION TARGET PATENT and/or COLLABORATION PROTEIN PATENT.
1.11 "COLLABORATION PROTEIN PATENT" means a patent or patent
application filed prior to the end of the INITIAL RESEARCH TERM owned by a
COLLABORATION PARTNER, SB, or HGS only to the extent that it claims a
THERAPEUTIC PROTEIN which is a PRODUCT and/or the manufacture or use of such
THERAPEUTIC PROTEIN and as to which HGS and/or SB has the right to grant a
license to SP. Included within the definition are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals,
extensions, registrations, confirmations, reexaminations, provisional
applications, SPCs.
1.12 "COLLABORATION TARGET PATENT(S)" means a patent or patent
application filed prior to the end of the INITIAL RESEARCH TERM owned by a
COLLABORATION
4
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PARTNER, SB, or HGS only to the extent that it claims a TARGET which is a
PRODUCT and/or the manufacture or use thereof and as to which HGS and/or SB has
the right to grant a license to SP. Included within the definition are all
continuations, continuations-in-part, divisions, patents of addition, reissues,
renewals, extensions, registrations, confirmations, reexaminations, provisional
applications, SPCs.
1.13 "DIAGNOSTIC(S)" shall mean any product, process, substance,
composition or service intended to predict, detect or identify a disease or
determine the presence of a pathologic condition in a human.
1.14 "DISCOVERED" shall mean with respect to any product, process,
substance, composition or service, the earlier of the following events (i) the
specific disclosure of such product, process, substance, composition or service
in a patent application filed by the discovering party or (ii) the specific
disclosure of such product, process, substance, composition or service by the
discovering party in a written document (including, but not limited to,
laboratory notebooks) other than a filed patent application.
1.15 "DRUG PRODUCT" shall mean a PRODUCT (other than a THERAPEUTIC
PROTEIN or ANTIBODY PRODUCT) in the SP FIELD which is potentially useful for the
treatment or prevention of a disease or disorder in humans.
1.16 "DRUG RESEARCH PLAN" shall mean a plan for developing screens for
and screening of TARGETS to discover an SP DRUG PRODUCT. A representative
example of such a plan is shown in Appendix A.
1.17 "EFFECTIVE DATE" shall mean the date first above written.
1.18 "EXTENDED TERM" shall mean the additional period defined in
Paragraph 4.2.
5
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1.19 "GENE" shall mean a human gene or a portion thereof or cDNA
corresponding thereto.
1.20 "GENE THERAPY" shall mean treatment or prevention of a disease, or
remedying a gene deficiency of humans or animals by genetic modification of
human somatic cells or animal somatic or germ cells (in vivo, in vitro or ex
vivo) with DNA (RNA) for the purpose of expressing a protein or
oligo(poly)nucleotide encoded by said DNA (RNA) in a human or animal.
1.21 "GENE THERAPY VACCINE" shall mean a VACCINE which achieves a
therapeutic effect by inducing an antigen-specific humoral and/or cellular
immune system response by GENE THERAPY.
1.22 "HGS FIELD" shall mean: (i) GENE THERAPY, (ii) ANTISENSE, (iii)
biotransformation of a chemical to prepare pharmaceutically active agents for
human or animal use, or intermediates therefor, which active agent was
DISCOVERED before the EFFECTIVE DATE; and (iv) DIAGNOSTICS.
1.23 "HGS PATENT(S)" shall mean all patents and patent applications to
the extent that they claim HGS TECHNOLOGY and which are or become owned by HGS
or to which HGS otherwise has, now or in the future, the right to grant
licenses. Included within the definition of HGS PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals ,
extensions registrations, confirmations, re-examinations thereof and any
provisional applications and all SPCs.
1.24 "HGS TECHNOLOGY" shall mean, the following which is provided to SP
by or on behalf of HGS: (a) sequence data with respect to human DNA (and the
corresponding
6
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clones) and expression products thereof, in each case developed by or on behalf
of HGS prior to or during the INITIAL RESEARCH TERM, (b) information on
biological function of TARGETS and THERAPEUTIC PROTEINS developed by or on
behalf of HGS prior to the INITIAL RESEARCH TERM, and (c) HGS clones, cell lines
and vectors, and all information and data provided to SP by HGS pursuant to
Section 6 hereof, and (d) SOFTWARE.
1.25 "INITIAL RESEARCH TERM" shall mean the term beginning on the
EFFECTIVE DATE and ending five years (5) from the EFFECTIVE DATE.
1.26 "LICENSED PATENT(S)" means HGS PATENT(S) and/or SPECIAL SB
PATENT(S).
1.27 "LICENSED TECHNOLOGY" means HGS TECHNOLOGY and/or SPECIAL SB
TECHNOLOGY.
1.28 "MAJOR MARKET" means the United States, Canada, Germany, United
Kingdom, France, Italy or Japan.
1.29 "MERCK" shall mean Merck KGaA and its AFFILIATES.
1.30 "NET SALES" shall mean proceeds actually received from sales of SP
PRODUCT (calculated on a SP PRODUCT by SP PRODUCT basis) by SP or, except as
provided below, its respective licensees, distributors trading on SP's account
or joint ventures or other associated companies, less deductions for (i)
transportation, shipping and postage charges, including transportation insurance
and customs duties to the extent separately invoiced; (ii) sales and excise
taxes and duties paid or allowed by a selling party and any other governmental
charges imposed upon the production, importation, use or sale of such SP PRODUCT
(including value added taxes or other governmental charges otherwise measured by
7
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the billing amount when included in billing); (iii) normal and customary trade,
quantity and cash discounts allowed and charge back payments and rebates granted
to managed health care organizations or to federal, state and local governments,
their agencies and purchasers and reimbursees, including but not limited to
Medicaid rebates or to trade customers, including but not limited to
wholesalers, chain and pharmacy buying groups; (iv) rebates (or equivalents
thereof) granted to or charged by national, state or local government
authorities in countries other than the United States; and (v) allowances or
credits to customers on account of rejection or return of such product or on
account of retroactive price reductions affecting such SP PRODUCT. Sales between
or among SP and their respective licensees, distributors trading on SP's
account, or joint ventures or other associated companies shall be included
within NET SALES only if such purchaser is an end-user of the SP PRODUCT.
Otherwise, NET SALES shall only include the subsequent, final sales to THIRD
PARTIES.
1.31 "PRELIMINARY ANTIBODY PLAN" shall mean a plan for developing an SP
ANTIBODY PRODUCT in the form of Appendix C.
1.32 "PRELIMINARY DRUG PLAN" shall mean a plan for developing screens
for and screening of TARGETS to discover an SP DRUG PRODUCT in the form of
Appendix C.
1.33 "PROTEIN RESEARCH PLAN" shall mean a plan for research and
development of a THERAPEUTIC PROTEIN which includes, at a minimum, scientific
data, research and development efforts, research and development milestones,
sufficient to reasonably monitor diligence of research/development of such
THERAPEUTIC PROTEIN . An example of such a plan is shown in Appendix D.
8
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1.34 "PRODUCT(S)" shall mean any product, process, substance,
composition or service which (i) is based on the use of or derived by use of
LICENSED TECHNOLOGY and/or SP TECHNOLOGY and/or (ii) is covered by a LICENSED
PATENT and/or claim of an SP PATENT which claims SP TECHNOLOGY and/or is covered
by a COLLABORATION PATENT as to which SP obtains rights under this Agreement;
and/or (iii) is based on or is derived by use of a TARGET and/or use of a
THERAPEUTIC PROTEIN as to which SP obtains rights under this Agreement.
Notwithstanding the previous sentence, an incidental or immaterial use of
LICENSED TECHNOLOGY , SP TECHNOLOGY, or a TARGET or a THERAPEUTIC PROTEIN from a
COLLABORATION PARTNER and/or HGS and/or SB, shall not cause a product, process,
substance, composition or service to become a PRODUCT. Appendix E contains
representative, examples of incidental or immaterial use and material use but is
not intended by the parties to be an exhaustive list of incidental, immaterial
and/or material uses.
1.35 "PROOF OF EFFICACY" shall mean proof of therapeutic effectiveness
in a Phase II(a) Clinical Test based on biostatistical methods, that supports a
determination to proceed with expanded controlled clinical trials. "Phase II(a)
Clinical Test" shall mean a well-controlled clinical study conducted to evaluate
the effectiveness of the drug for a particular indication or indications in
patients with the disease or condition under study and to determine the common
short-term side effects and risks associated with the drug.
1.36 "RESEARCH PLAN" shall mean individually and collectively a DRUG
RESEARCH PLAN, PROTEIN RESEARCH PLAN and ANTIBODY RESEARCH PLAN.
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1.37 "SB" shall mean SmithKline Beecham Corporation and SmithKline
Beecham, plc, and any past (from May 19, 1993 to the EFFECTIVE DATE), present or
future AFFILIATE thereof, which AFFILIATE holds the relevant right and/or is or
was or will be necessary or required to perform any obligations of SB
(including, without limitation, those which have performed research and
development of SPECIAL SB TECHNOLOGY) under this Agreement and/or to which any
of the rights and/or obligations of either of them are subsequently assigned
and/or delegated pursuant to Section 22 of this Agreement.
1.38 "SOFTWARE" shall mean software (together with the source code
therefor and maintenance files and "Documentation" as defined below) designed
and developed by HGS prior to or during the INITIAL RESEARCH TERM for analysis
of sequence data with respect to human DNA and expression products thereof,
including, without limitation, the specific software modules set forth in the
attached Appendix F. "Documentation" shall include all operating and user
manuals, training materials guides, listings, specifications and other material
used with the SOFTWARE.
1.39 "SP ANTIBODY PRODUCT" shall mean a PRODUCT in the SP FIELD
discovered and/or developed by or on behalf of SP or its licensee which is an
ANTIBODY PRODUCT.
1.40 "SP DRUG PRODUCT" shall mean a PRODUCT in the SP FIELD discovered
and/or developed by or on behalf of SP or its licensee other than an SP ANTIBODY
PRODUCT and/or SP PROTEIN PRODUCT and/or a TARGET.
1.41 "SP FIELD" shall mean the treatment and/or prevention of disease
in humans, excluding the HGS FIELD. For avoidance of doubt, in the event a
PRODUCT has both
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therapeutic and DIAGNOSTIC use, the therapeutic use of such PRODUCT shall be
included in the SP FIELD.
1.42 "SP PATENT(s)" shall mean all patents and patent applications to
the extent that they claim SP TECHNOLOGY, which are or become owned by SP or to
which SP otherwise has, now or in the future, the right to grant licenses.
Included within the definition of SP PATENT are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals,
extensions, registrations, confirmations, re-examinations thereof, and any
provisional applications and all SPCs.
1.43"SP PRODUCT" means SP DRUG PRODUCT, SP ANTIBODY PRODUCT and SP
PROTEIN PRODUCT.
1.44 "SP PROTEIN PRODUCT" shall mean a PRODUCT in the SP FIELD which is
a THERAPEUTIC PROTEIN as to which SP gets rights under Section 7 or under
Paragraph 9.3.
1.45 "SP/SB AGREEMENT" shall mean that certain agreement between SP and
SB referred to in Paragraph 9.2 of this Agreement.
1.46 "SP TECHNOLOGY" shall mean:
(i) peptides and/or polypeptides, and/or polynucleotides and/or the
sequences thereof and/or antibodies and/or clones or plasmids containing
polynucleotides which (a) are based on use of LICENSED TECHNOLOGY by or on
behalf of SP, and/or (b) are derived by use of LICENSED TECHNOLOGY by or on
behalf of SP and/or; (c) are based on and/or derived by use by or on behalf of
SP of a TARGET and/or THERAPEUTIC PROTEIN as to which SP obtains rights under
this Agreement from a COLLABORATION PARTNER or SB.
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(ii) therapeutic compounds and potential therapeutic compounds
(including antibodies) developed by or on behalf of SP which are based on use of
or derived from use of item (i) and/or item (iii) and/or item (iv) and/or
LICENSED TECHNOLOGY;
(iii) biological information developed by or on behalf of SP
specifically related to item (i) and/or item (ii) and/or LICENSED TECHNOLOGY ;
(iv) screens and/or assays for identifying potential therapeutics
(including antibodies), developed by or on behalf of SP and which screens or
assays are directed to and/or based on and/or derived by use of item (i) and/or
item (iii) and/or LICENSED TECHNOLOGY;
Items (i) through (iv) are included as SP TECHNOLOGY only to the extent
they are obtained by or on behalf of or derived by or on behalf of SP after the
EFFECTIVE DATE and prior to the later of four (4) years after the end of the
INITIAL RESEARCH TERM or four (4) years after the end of any EXTENDED TERM;
provided, however, that any of items (i)-(iii) which are obtained by or on
behalf of SP or derived by or on behalf of SP after such time shall also be SP
TECHNOLOGY if it results from item (iv) within three (3) years after the screen
or assay becomes operational for use by or on behalf of SP as a screen or assay.
Notwithstanding the above, an incidental or immaterial use of LICENSED
TECHNOLOGY and/or a TARGET and/or a THERAPEUTIC PROTEIN shall not cause any
items (i) to (iv ) to become SP TECHNOLOGY. Appendix E. contains representative
examples of incidental or immaterial use and material use, but is not intended
by the parties to be an exhaustive list of incidental, immaterial and/or
material uses.
1.47 "SPC" shall mean a right based upon an underlying patent such as a
Supplementary Protection Certificate .
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
1.48 "SPECIAL SB PATENT(S)" means all patents and patent applications
to the extent that they claim SPECIAL SB TECHNOLOGY which are or become owned by
SB or to which SB otherwise has, now or in the future, the right to grant
licenses. SPECIAL SB PATENTS include all continuations, continuations-in-part,
divisions, patents of addition, reissues, renewals, extensions registrations,
confirmations, re-examinations thereof and any provisional applications and all
SPCs.
1.49 "SPECIAL SB TECHNOLOGY" means [***].
1.50 "TARGET" shall mean a GENE or expression product thereof (e.g.,
receptors, enzymes or ion channels) which could be used for screening or other
drug discovery purposes to identify compounds or ANTIBODY PRODUCTS with a
biochemical or pharmaceutical effect.
1.51 "TERRITORY" shall mean all the countries and territories in the
world.
1.52 "THIRD PARTY(IES)" shall mean any party other than a party to this
Agreement or an AFFILIATE of SP or HGS or SB.
1.53 "THERAPEUTIC PROTEIN" shall mean a polypeptide derived from a GENE
(excluding ANTIBODY PRODUCTS) which is potentially useful for the treatment or
prevention of a disease or disorder in humans.
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1.54 VACCINE" shall mean any substance which achieves a prophylactic or
therapeutic effect by inducing an antigen-specific humoral and/or cellular
immune system response excluding a GENE THERAPY VACCINE.
2. SB AND HGS AND SP GRANTS AND COVENANTS
--------------------------------------
2.1 (a) Subject to the terms and conditions of this Agreement, HGS and
SB, as the case may be, grant to SP a non-exclusive, non-transferable worldwide
license under LICENSED TECHNOLOGY, LICENSED PATENTS and COLLABORATION PATENTS to
perform research and development in the SP FIELD during the INITIAL RESEARCH
TERM.
(b) Subject to the terms and conditions of this Agreement, HGS
and SB, as the case may be, grant to SP a non-exclusive, non-transferable
worldwide license under LICENSED TECHNOLOGY, LICENSED PATENTS and COLLABORATION
PATENTS to perform research and development during the EXTENDED TERM of (i) SP
DRUG PRODUCTS, (ii) SP PROTEIN PRODUCTS , and (iii) SP ANTIBODY PRODUCTS
encompassed by an ANTIBODY RESEARCH PLAN submitted by SP prior to the end of the
INITIAL RESEARCH TERM.
(c) Subject to the terms and conditions of this Agreement, HGS
and SB, as the case may be, grant to SP a non-exclusive, non-transferable,
worldwide license under LICENSED TECHNOLOGY, LICENSED PATENTS, and COLLABORATION
PATENTS to perform research and development after the INITIAL RESEARCH TERM of
(i) SP DRUG PRODUCTS encompassed by a DRUG RESEARCH PLAN submitted by SP prior
to the end of the INITIAL RESEARCH TERM or the EXTENDED TERM, (ii) SP PROTEIN
PRODUCTS, (iii) SP ANTIBODY PRODUCTS encompassed by an ANTIBODY RESEARCH
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PLAN submitted by SP prior to the end of the INITIAL RESEARCH TERM, and (iv)
TARGETS which are PRODUCTS encompassed by a DRUG RESEARCH PLAN submitted by SP
prior to the end of the INITIAL RESEARCH TERM or the EXTENDED TERM.
2.2 Subject to the terms and conditions of this Agreement, HGS and SB,
as the case may be, grant to SP a non-exclusive worldwide license under (i)
LICENSED TECHNOLOGY, (ii) LICENSED PATENTS with respect to claims directed to
TARGETS which are PRODUCTS and the manufacture and use thereof, (iii)
COLLABORATION BLOCKING PATENTS, and (iv) COLLABORATION TARGET PATENTS, in each
case to make, have made, use, import, export, offer to sell and sell SP DRUG
PRODUCT and SP ANTIBODY PRODUCT in the SP FIELD. In the case of an SP DRUG
PRODUCT, such license is limited to SP DRUG PRODUCTS encompassed by a DRUG
RESEARCH PLAN submitted by SP prior to the end of the INITIAL RESEARCH TERM or
EXTENDED TERM, and in the case of an SP ANTIBODY PRODUCT is limited to an SP
ANTIBODY PRODUCT encompassed by an ANTIBODY RESEARCH PLAN submitted by SP prior
to the end of the INITIAL RESEARCH TERM.
2.3 HGS grants to SP an irrevocable, royalty-free, non-exclusive,
non-transferable, worldwide license to use SOFTWARE to perform research and
development after the INITIAL RESEARCH TERM. The license granted under this
Paragraph 2.3 is limited to SOFTWARE which is (i) owned by HGS and/or (ii) is
owned or licensed by a THIRD PARTY and licensed to HGS which license to HGS
includes the right to grant sublicenses. To the extent that acceptance of the
license granted under this Paragraph 2.3 would obligate SP or HGS to pay
royalties and/or license fees to a THIRD PARTY based solely upon SP's use of
SOFTWARE
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owned or licensed by said THIRD PARTY and sublicensed to SP by HGS, SP shall, in
its sole discretion elect to (i) accept the SOFTWARE in its entirety and pay all
such royalties and/or licensee fees, (ii) obtain a direct license from the THIRD
PARTY owner of the SOFTWARE, or (iii) accept the SOFTWARE with the exception of
the THIRD PARTY SOFTWARE for which royalties and/or license fees would have been
due. To the extent that SOFTWARE includes software owned or licensed by THIRD
PARTIES which is not sublicensable by HGS, HGS will promptly provide written
notice to SP identifying all such software and its owner, and SP acknowledges
and agrees that it must obtain the necessary license(s) prior to using any such
software.
2.4 Subject to the terms and conditions of this Agreement, HGS and SB,
as the case may be, grant to SP an exclusive worldwide license in the SP FIELD
under LICENSED TECHNOLOGY, LICENSED PATENTS and COLLABORATION PROTEIN PATENTS to
research, develop, make, have made, use, import, export, offer to sell and sell
SP PROTEIN PRODUCTS, provided, however, that such license shall not extend to
VACCINES to the extent that prior to SP obtaining exclusive rights to a
THERAPEUTIC PROTEIN under Section 7 of this Agreement, MERCK obtains exclusive
rights to such THERAPEUTIC PROTEIN as a VACCINE in the SP FIELD under an
agreement among SB, HGS and MERCK by which MERCK obtains exclusive rights to a
THERAPEUTIC PROTEIN as a VACCINE by the submission of data essentially identical
to the data required to obtain rights to a THERAPEUTIC PROTEIN under Section 7
of this Agreement prior to SP's submission of an information package pursuant to
Section 7 of this Agreement for such THERAPEUTIC PROTEIN.
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2.5 The licenses granted to SP under Paragraphs 2.1, 2.2, 2.4 and 2.6
shall be sublicensable by SP but only in accordance with Paragraphs 2.8, 2.9,
2.10, 10.3 and 10.4.
2.6 In the event that a SP PRODUCT is DISCOVERED by or on behalf of SP
which is not encompassed by a RESEARCH PLAN and for which royalties are due to
HGS under this Agreement, SP may request in writing that HGS grant a
non-exclusive license in the SP FIELD under HGS PATENTS covering such SP
PRODUCT. HGS shall grant such a license, to the extent that it has the ability
to do so, provided, however, that HGS can refuse to grant the license if, at the
time of receipt of the request from SP, HGS has an ongoing program of research
and development for a PRODUCT which is "essentially the same" as such SP
PRODUCT. For purposes of this Paragraph, the term "essentially the same" shall
mean that an SP PRODUCT and a PRODUCT being developed by HGS are substantially
the same chemical entity, for example, a THERAPEUTIC PROTEIN and a mutein
thereof.
2.7 Notwithstanding any exclusive rights granted to SP with respect to
a THERAPEUTIC PROTEIN, SP acknowledges and agrees that HGS, SB and COLLABORATION
PARTNERS, as the case may be, retain the right under LICENSED TECHNOLOGY,
LICENSED PATENTS and COLLABORATION PROTEIN PATENTS to use a THERAPEUTIC PROTEIN
as to which SP obtains rights under Section 7 as a TARGET and to research,
develop, make, have made, use, import, export, offer to sell and sell a DRUG
PRODUCT or ANTIBODY PRODUCT.
2.8 (a) During and after the INITIAL RESEARCH TERM, SP agrees to use SP
TECHNOLOGY and SP PATENTS only in the SP FIELD. After the INITIAL RESEARCH
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TERM, the use of SP TECHNOLOGY to the extent available to the general public
through publications made by third parties independent of SP shall not be a
breach of this paragraph 2.8.
(b) During and after the INITIAL RESEARCH TERM, SP agrees to
use LICENSED TECHNOLOGY, COLLABORATION PATENTS and LICENSED PATENTS only as
licensed and permitted hereunder. After the INITIAL RESEARCH TERM, (i) an
incidental or immaterial use of LICENSED TECHNOLOGY and/or (ii) the use of
LICENSED TECHNOLOGY to the extent available to the general public and to the
extent not covered by a granted LICENSED PATENT, shall not be a breach of this
paragraph 2.8.
2.9 Except as permitted under Section 10, SP agrees not to grant to any
THIRD PARTY (IES) any rights or licenses in or to an SP PRODUCT until SP has
established PROOF OF EFFICACY for such SP PRODUCT.
2.10 The rights and licenses granted to SP by HGS and SB under this
Agreement and rights to SP TECHNOLOGY and SP PATENTS are licensable and/or
transferable by SP to a THIRD PARTY only with respect to an SP PRODUCT, and only
pursuant to an Agreement by which SP grants a license to a THIRD PARTY to an SP
PRODUCT as permitted under Paragraph 2.9, or as permitted under Section 10, and
in which the THIRD PARTY (IES) agree(s) to covenants and obligations which limit
the use of SP PRODUCTS, LICENSED TECHNOLOGY, LICENSED PATENTS, SP TECHNOLOGY and
SP PATENTS which are essentially identical to the covenants and obligations of
SP to HGS and SB under this Agreement.
2.11(a) Subject to the terms and conditions of this Agreement, SP
grants to HGS an exclusive worldwide license (with the right to sublicense)
under SP PATENTS to make, have
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made, use, export, import, offer to sell and sell THERAPEUTIC PROTEINS as to
which HGS or SB has obtained exclusive rights under Section 7.
(b) Subject to the terms and conditions of this Agreement,
including the retained right of SP under Paragraph 2.13, SP grants to HGS an
exclusive worldwide license under SP PATENTS to make, have made, use, export,
import, offer to sell and sell THERAPEUTIC PROTEINS as to which a COLLABORATION
PARTNER has obtained exclusive rights under terms and conditions essentially
identical to Paragraph 7.1 for the sole purpose of granting a sublicense to such
COLLABORATION PARTNER. The license granted under this Paragraph 2.11(b) may only
be sublicensed to a COLLABORATION PARTNER who has entered into an agreement
granting essentially identical rights to HGS and/or SB under all COLLABORATION
PROTEIN PATENTS owned by the COLLABORATION PARTNER and which rights are
licensable to SP for THERAPEUTIC PROTEINS as to which SP obtains exclusive
rights under Section 7.
2.12 Subject to the terms and conditions of this Agreement, SP grants
to HGS a non-exclusive worldwide, royalty-free license (with the right to
sublicense) under SP PATENTS to make, have made, use, import, offer to sell and
sell any and all products and processes in the HGS FIELD. The license granted in
this paragraph with respect to GENE THERAPY shall be subject to the terms and
conditions of any agreement between HGS and SP with respect to GENE THERAPY.
2.13 Notwithstanding any exclusive rights granted by SP with respect to
a THERAPEUTIC PROTEIN, HGS and SB acknowledge and agree that SP retains the
right under SP PATENTS and SP TECHNOLOGY to use a THERAPEUTIC PROTEIN as to
which
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HGS, SB or a COLLABORATION PARTNER obtains rights under Section 7 as a TARGET
and to research, develop, make, have made, use, import, export, offer to sell
and sell a SP DRUG PRODUCT or SP ANTIBODY PRODUCT.
2.14 Subject to the terms and conditions of this Agreement, SP grants a
non-exclusive, royalty-free license to HGS and SB under (i) SP PATENTS to use
TARGETS which are PRODUCTS developed by SP during the INITIAL RESEARCH TERM or
EXTENDED TERM, and (ii) BLOCKING CLAIMS of SP PATENTS, in each case to research,
develop, make, have made, use, import, export, offer to sell and sell DRUG
PRODUCTS and ANTIBODY PRODUCTS other than SP PRODUCTS. Such TARGETS need not be
disclosed by SP to HGS or SB until such TARGETS are disclosed to the public;
e.g., by publication of a patent application. HGS shall have the right to
sublicense such rights to TARGETS which are PRODUCTS and BLOCKING CLAIMS under
SP PATENTS to each COLLABORATION PARTNER and will grant such sublicenses only to
the extent that the COLLABORATION PARTNER(S) grants essentially identical rights
to HGS and/or SB under COLLABORATION PATENTS to TARGETS which are PRODUCTS and
BLOCKING CLAIMS which rights are or will be licensed to SP hereunder .
2.15 HGS agrees not to grant any rights or licenses to any THIRD PARTY,
other than a COLLABORATION PARTNER, under HGS TECHNOLOGY and/or HGS PATENTS in
the SP FIELD with respect to (i) use of TARGETS which are PRODUCTS for screening
for DRUG PRODUCTS during the INITIAL RESEARCH TERM and/or (ii) THERAPEUTIC
PROTEINS during the INITIAL RESEARCH TERM other than those as to which HGS
obtains exclusive rights under Section 7, and/or (iii) THERAPEUTIC PROTEINS as
to which SP obtains and
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
maintains exclusive rights under Section 7 or as to which SP has exercised its
option under Section 9.
3. PAYMENTS AND ROYALTIES
----------------------
3.1 (a) SP agrees to pay to HGS as an upfront fee an amount equal to
[***] which shall be due and payable in five equal payments with the first
payment being due and payable ten (10) days after the EFFECTIVE DATE and each of
the second through fifth payments being due and payable on the first through
fourth anniversaries of the EFFECTIVE DATE, respectively. All payments to be
made hereunder shall be by wire transfer of immediately available funds to an
account designated by HGS.
(b) In the event that any payment due and payable under this
Paragraph 3.1 is not paid when due and payable and remains unpaid for a period
of thirty (30) days after written notice by HGS to SP of such failure, or if
this Agreement is terminated by HGS pursuant to Section 13 hereof, then all
amounts which are to be paid under Paragraph 3.1(a) which have not been paid
shall become immediately due and payable at the end of such thirty (30) day
period.
3.2 Subject to Paragraphs 3.3, 3.5 and 3.6, SP shall pay to HGS the
following royalties on NET SALES of each SP PRODUCT sold by SP or its respective
licensees , distributors trading on SP's account or joint ventures or other
associated companies, which royalty shall be calculated on a SP PRODUCT by SP
PRODUCT basis, with the applicable royalty rate(s) for each SP PRODUCT in a
calendar year being based on worldwide NET SALES for such SP PRODUCT in the
calendar year and these determined royalty rate(s) being applied to all
worldwide NET SALES of such SP PRODUCT in such calendar year.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
SP PROTEIN PRODUCT
Net Sales OR SP ANTIBODY
(U.S. Dollars in Millions) PRODUCT SP DRUG PRODUCT
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
By way of example and for avoidance of doubt, if an SP PROTEIN PRODUCT
or an SP ANTIBODY PRODUCT shall have applicable worldwide NET SALES in a
calendar year of [***], then the royalty rates and royalties owed shall be [***]
on all sales of such SP PROTEIN PRODUCT or SP ANTIBODY PRODUCT.
3.3 (a) With respect to any SP PRODUCT in any country in any calendar
year, in the event that SP also owes royalties to a THIRD PARTY for such SP
PRODUCT in such country for such calendar year and the royalties actually owed
to such THIRD PARTY when aggregated with the royalties owed to HGS for such SP
PRODUCT in such country in such calendar year (hereafter for the purposes of
this Paragraph 3.3 shall be "Aggregated Royalties") causes the royalty rate on
NET SALES for such SP PRODUCT in such country in such calendar year to exceed
[***] , then one-half of the royalties which are to be actually paid to such
THIRD PARTY may be credited against the royalties due to HGS for such SP PRODUCT
in such country in such calendar year, but in no event shall the royalty rate
payable to HGS be reduced to less than [***], nor shall the Aggregated Royalties
for such SP PRODUCT be reduced to less than [***].
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(b) With respect to an SP PROTEIN PRODUCT as to which the
making, having made, using, selling, importing, exporting or offering for sale
is not covered by a granted claim of a LICENSED PATENT and as to which at least
[***]and less than [***] of the full length cDNA coding sequence for, or the
cDNA corresponding to the amino acid sequence of the final form of, such SP
PROTEIN PRODUCT is independently identified by SP without use of LICENSED
TECHNOLOGY or SP TECHNOLOGY, the royalties due for such SP PROTEIN PRODUCT under
Paragraph 3.2 shall be reduced by [***].
3.4 SP shall make the following milestone payments to HGS for each SP
PRODUCT, which milestone payment shall be due and payable within thirty (30)
days after the milestone event is achieved by or on behalf of SP or a licensee
of SP. All payments to be made hereunder shall be by wire transfer of
immediately available funds to an account designated by HGS.
(i) [***] upon successful completion of Phase I for
an SP PRODUCT, except that for an SP PROTEIN PRODUCT this milestone shall be
split with [***] upon successful completion of Phase I and another [***] upon
successful completion of Phase II(a);
(ii) [***] upon first submission of an application
for regulatory approval of an SP PRODUCT in a MAJOR MARKET;
(iii) [***] upon the first approval of an SP PRODUCT
for commercial sale in a MAJOR MARKET (provided, however, that any pricing and
third party reimbursement approvals (including governmental pricing and
reimbursement approvals as necessary for sale of the SP PRODUCT are also
received).
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The milestone payments provided in this paragraph shall only be made
once for each SP PRODUCT and shall not be made in the case of improvements or
modifications such as but not limited to changed forms, formats, salts,
formulations, indications, processes or protocols of an SP PRODUCT for which the
payments were previously made.
3.5 Royalty obligations under this Agreement and any agreements that SP
shall enter into with a licensee, with respect to SP PRODUCT, shall terminate on
a country-by-country and product-by-product basis on the later of (i) ten (10)
years after first country-wide launch of each product in each country or (ii)
expiration of the last to expire SP PATENT or LICENSED PATENT or COLLABORATION
PATENT licensed to SP under this Agreement which covers the making, having made,
importing, exporting, offering to sell or using or selling of each product in
each country.
3.6 SP shall not be obligated to pay royalties under Paragraph 3.2 or
milestones under Paragraph 3.4 with respect to any of the following:
(a) SP PROTEIN PRODUCT as to which the making, having made,
using, importing, exporting, offering to sell and selling is not covered by a
granted claim of a LICENSED PATENT or COLLABORATION PATENT licensed to SP under
this Agreement and of which at least 95% of the full length cDNA coding sequence
for, or the cDNA corresponding to the amino acid sequence of the final form of,
such SP PROTEIN PRODUCT is independently identified by SP without use of
LICENSED TECHNOLOGY or SP TECHNOLOGY.
(b) SP DRUG PRODUCT or SP ANTIBODY PRODUCT which is
encompassed by a DRUG RESEARCH PLAN or ANTIBODY RESEARCH PLAN submitted
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by SP in accordance with this Agreement which SP DRUG PRODUCT or SP ANTIBODY
PRODUCT is not covered by a claim of a granted LICENSED PATENT or COLLABORATION
PATENT licensed to SP under this Agreement and in the case of SP DRUG PRODUCT is
DISCOVERED after the later of (i) four years after the end of the INITIAL
RESEARCH TERM or (ii) four years after the end of the EXTENDED TERM and in the
case of SP ANTIBODY PRODUCT is DISCOVERED after four years after the end of the
INITIAL RESEARCH TERM;
(c) SP PRODUCT which is DISCOVERED after the INITIAL RESEARCH
TERM, or in the case of a SP DRUG PRODUCT after the later of the INITIAL
RESEARCH TERM or the EXTENDED TERM, and which SP PRODUCT is not encompassed by a
RESEARCH PLAN submitted by SP under this Agreement, and the only reason why such
SP PRODUCT is SP PRODUCT is because of use of one or more of the following: (i)
use of unpatented LICENSED TECHNOLOGY after the later of the end of the INITIAL
RESEARCH TERM or EXTENDED TERM which LICENSED TECHNOLOGY at the time of such use
is generally available to the public, and/or (ii) use of SP TECHNOLOGY developed
after the later of the end of the INITIAL RESEARCH TERM or EXTENDED TERM which
is SP TECHNOLOGY only as the result of use of unpatented LICENSED TECHNOLOGY
which is generally available to the public at the time of such use, and/or (iii)
use of SOFTWARE after the later of the end of the INITIAL RESEARCH TERM or
EXTENDED TERM.
(d) SP PRODUCT which is DISCOVERED after the later of four
years after the end of the INITIAL RESEARCH TERM or EXTENDED TERM, which SP
PRODUCT is not encompassed by a RESEARCH PLAN submitted by SP in accordance with
this Agreement
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
and which SP PRODUCT is an SP PRODUCT only because the SP PRODUCT is based on
the use of or derived by the use of SP TECHNOLOGY.
(e) SP PRODUCT for which SB is granted co-promotion rights
under the SP/SB AGREEMENT.
(f) SP DRUG PRODUCT or SP ANTIBODY PRODUCT which is DISCOVERED
by or on behalf of SP which is a SP DRUG PRODUCT or SP ANTIBODY PRODUCT,
respectively, only as a result of the use of a TARGET as to which at least 95%
of the full length cDNA coding sequence for, or the cDNA corresponding to the
amino acid sequence of the final form of, such TARGET is independently
identified by SP without use of LICENSED TECHNOLOGY or SP TECHNOLOGY, and where
neither the SP DRUG PRODUCT nor SP ANTIBODY PRODUCT nor the TARGET is covered by
a granted claim of a LICENSED PATENT or COLLABORATION PATENT.
3.7 [***] of all payments to be made by SP pursuant to Sections 3.1 and
3.4 shall be paid by [***] and [***] shall be paid by [***]. All payments to be
made by SP pursuant to Section 3.2 shall be apportioned between Schering
Corporation and Schering-Plough Ltd. according to the provisions of Section
12.5. The foregoing notwithstanding, Schering Corporation and Schering-Plough
Ltd. are jointly and severally liable for any and all payments by SP to HGS
pursuant to this Section 3, provided that payments made by Schering-Plough Ltd.
does not cause HGS to be subject to additional taxes and/or a withholding tax
solely as a result of such payments being made by Schering- Plough Ltd. In the
event that (i) payments made by Schering-Plough, Ltd. cause HGS to be subject to
additional taxes and/or withholding tax, and (ii) such additional taxes and/or
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<PAGE>
withholding tax are due solely as a result of such payments being made by
Schering-Plough, Ltd., then SP and HGS shall agree upon an alternative manner of
payment.
3.8 The manner in which statements and remittances of royalty payments
are handled are as set forth in Section 12 hereof.
4. RESEARCH TERM AND RESEARCH PLANS
--------------------------------
4.1 The INITIAL RESEARCH TERM shall terminate five years after the
EFFECTIVE DATE.
4.2 The INITIAL RESEARCH TERM may be extended for up to five additional
years by written notice provided to HGS by SP at least sixty (60) days prior to
the end of the INITIAL RESEARCH TERM or at least sixty (60) days prior to the
end of any one year extension thereof. A payment of [xxx] for each additional
year shall be due within ten (10) days of the end of the INITIAL RESEARCH TERM
or the end of any one year extension thereof, as the case may be.
4.3 A DRUG RESEARCH PLAN and/or a PRELIMINARY DRUG PLAN may only be
submitted to HGS by SP during the INITIAL RESEARCH TERM and/or the EXTENDED
TERM. An ANTIBODY RESEARCH PLAN and/or a PRELIMINARY ANTIBODY PLAN may only be
submitted by SP to HGS during the INITIAL RESEARCH TERM.
4.4 A PROTEIN RESEARCH PLAN may only be submitted by SP to HGS during
the INITIAL RESEARCH TERM and only in accordance with Section 7. Such a PROTEIN
RESEARCH PLAN shall be deemed to also be an ANTIBODY RESEARCH PLAN for all
antibodies against the THERAPEUTIC PROTEIN.
27
<PAGE>
4.5 (a) SP agrees that SP will not initiate screening to evaluate
multiple chemical entities for activity or a formal program of rational drug
design (i) with respect to a TARGET which is a PRODUCT, or with respect to a SP
DRUG PRODUCT, during the INITIAL RESEARCH TERM or EXTENDED TERM without first
submitting a PRELIMINARY DRUG PLAN, or (ii) with respect to an SP ANTIBODY
PRODUCT without first submitting to HGS a PRELIMINARY ANTIBODY PLAN during the
INITIAL RESEARCH TERM.
(b) In the event that a DRUG RESEARCH PLAN submitted by SP to HGS
is directed to the use of a TARGET which was DISCOVERED by or on behalf of SP
without the assistance of HGS and/or SB and/or a COLLABORATION PARTNER, HGS
agrees not to use such TARGET and/or any biological information with respect to
such TARGET contained in the DRUG RESEARCH PLAN until such TARGET is generally
identified to the public, unless HGS has initiated use thereof prior to
submission of such DRUG RESEARCH PLAN or HGS and/or SB and/or a COLLABORATION
PARTNER DISCOVERS such TARGET prior to receipt of the DRUG RESEARCH PLAN from
SP.
(c) HGS agrees not to disclose to SB and/or a THIRD PARTY any
RESEARCH PLANS submitted by SP, or TARGETS encompassed by such RESEARCH PLANS,
provided, however, that HGS may disclose TARGETS to the extent disclosed to the
public.
4.6 With respect to each TARGET encompassed by an ANTIBODY RESEARCH
PLAN, SP shall identify to HGS in writing the full length DNA coding sequence
therefor promptly after such DNA coding sequence is available to the public.
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<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
4.7 With respect to each TARGET encompassed by a DRUG RESEARCH PLAN, SP
shall identify to HGS in writing the full length DNA coding sequence therefor
promptly after such DNA coding sequence is available to the public.
5. ADDITIONAL PAYMENTS
-------------------
5.1 (a) In support of HGS' research, SP shall pay to HGS a total of
[***] which shall be due and payable as follows:
(i) [***] within ten (10) days after the EFFECTIVE
DATE:
(ii) [***] on each of the first through fourth
anniversaries of the EFFECTIVE DATE.
(b) In the event that any payment due and payable under Paragraph
5.1(a) is not paid when due and payable and remains unpaid for a period of
thirty (30) days after written notice by HGS to SP of such failure, or if this
Agreement is terminated by HGS under Section 13, then all amounts which are to
be paid under Paragraph 5.1(a) which have not been paid shall become immediately
due and payable at the end of such thirty (30) day period.
6. TECHNOLOGY TRANSFER AND ADDITIONAL LICENSED TECHNOLOGY
------------------------------------------------------
6.1 (a) Promptly after the EFFECTIVE DATE, HGS shall disclose to SP all
information which is HGS TECHNOLOGY.
(b) Throughout the INITIAL RESEARCH TERM, except as provided
in Paragraph 6.2, HGS shall promptly provide to SP all information which is HGS
TECHNOLOGY and materials (as available to HGS and as reasonably requested by SP)
which are HGS TECHNOLOGY including, without limitation, (i) preliminary
annotation data of DNA
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<PAGE>
sequences which are HGS TECHNOLOGY such as tissue source; library specifications
for libraries from which DNA sequences which are HGS TECHNOLOGY are obtained;
(ii) sequence homologies and motif searches with respect to DNA sequences (and
encoded polypeptides) which are HGS TECHNOLOGY; (iii) biological information
obtained by HGS with respect to DNA sequences and encoded polypeptides which are
HGS TECHNOLOGY; and (iv) clones containing sequences which are HGS TECHNOLOGY as
available to HGS and as reasonably requested by SP; and (v) expression cell
lines and vectors, as reasonably requested by SP and as available to HGS and to
the extent that HGS is not contractually precluded from providing them, is for
the sole purpose of research and development in the SP FIELD. SP understands and
agrees that experimental data relating to characterization of DNA and encoded
polypeptides are not included in this Paragraph 6.1(b).
(c) Except as otherwise set forth herein, HGS TECHNOLOGY to be
provided to SP pursuant to Paragraphs 6.1(a) and 6.1(b)(i), (ii) and (iii) shall
be in the form of electronic transfers of the HGS TECHNOLOGY and HGS shall
deliver the HGS TECHNOLOGY to SP in a manner and format which is compatible for
use with the SOFTWARE.
(d) Promptly after the EFFECTIVE DATE, HGS will provide SP
with printouts of HGS full length gene reports which are HGS TECHNOLOGY and/or
SPECIAL SB TECHNOLOGY, which reports shall be sorted by THERAPEUTIC PROTEINS and
TARGETS.
(e) SB shall promptly disclose to SP all information which is
SPECIAL SB TECHNOLOGY, which shall be disclosed to SP directly by SB and/or
through HGS. SB agrees that it will provide SP promptly after the EFFECTIVE DATE
with an inventory (including
30
<PAGE>
TARGET descriptions and code numbers) of all SPECIAL SB TECHNOLOGY. A template
of the form in which the SPECIAL SB TECHNOLOGY is generally available is
attached as Appendix H of this Agreement. SB further agrees that promptly after
the EFFECTIVE DATE it shall make reasonably available to SP, as mutually agreed,
the appropriate SB personnel necessary to meet with representatives of SP to
provide details of biological information which is SPECIAL SB TECHNOLOGY to
enable such representatives of SP to prioritize the delivery of SPECIAL SB
TECHNOLOGY from SB and/or HGS to SP. Both SB and SP agree to act in good faith
to effect the prompt and orderly delivery of all SPECIAL SB TECHNOLOGY to SP in
accordance with SP priorities. SB agrees that such delivery shall be completed
no later than ninety (90) days after the EFFECTIVE DATE.
6.2 HGS shall not be required to transfer to SP sequence data
consisting of second walks and full length sequences or biological information
or clones, in each case which are HGS TECHNOLOGY with respect to potential
THERAPEUTIC PROTEINS, until HGS, SP, SB or a COLLABORATION PARTNER obtains
exclusive rights thereto pursuant to Section 7. The preceding sentence shall not
apply to second walks performed by HGS at the specific request of SP.
6.3 The transfer of LICENSED TECHNOLOGY to SP shall be documented by
HGS and SB, as the case may be. Such documentation shall include, but not be
limited to, transfer of LICENSED TECHNOLOGY to SP electronically and/or in
writing and/or, in the case of oral transfer, by written notice to SP of the
substance of such oral transfer.
6.4 At the later of the end of the INITIAL RESEARCH TERM or the
EXTENDED TERM, as the case may be, SP shall promptly return to HGS and SB, as
the case may be, any
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<PAGE>
and all LICENSED TECHNOLOGY other than LICENSED TECHNOLOGY as to which SP
retains a license hereunder, including, without limitation, LICENSED TECHNOLOGY
which is not deemed confidential in accordance with Paragraph 10.2.
6.5 SP agrees to maintain security measures (including but not limited
to computer and computer network security measures) for LICENSED TECHNOLOGY
which are similar to the measures currently employed by SP to safeguard its own
confidential information. These security measures have been discussed with HGS
and SB which both agree that such security measures are acceptable to HGS and SB
respectively.
6.6 (a) To the extent it has not already been provided to SP, HGS
shall provide to SP, promptly following the EFFECTIVE DATE, without additional
charge, initial copies of the SOFTWARE and thereafter, during the INITIAL
RESEARCH TERM, as they become available, copies of any enhancements to the
SOFTWARE made by HGS during the INITIAL RESEARCH TERM, including all
modifications to the SOFTWARE which increase the speed, efficiency or ease of
operation of the SOFTWARE, or add additional capabilities to or otherwise
improve the functions of the SOFTWARE.
(b) For a period of two years after the EFFECTIVE DATE, HGS shall
provide to SP, without additional charge, all necessary telephone or on-site
consultation requested by SP in connection with its use and operation of the
SOFTWARE or any problems therewith. Telephone consultation shall be provided by
HGS during normal business hours.
(c) SP shall have the right, in its own discretion, to
independently modify the SOFTWARE for its own purposes and use SOFTWARE, through
the services of its own employees or of independent contractors, provided that
same agree not to disclose or distribute
32
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
any part of the SOFTWARE to any other person or entity or otherwise violate
HGS's proprietary rights therein. SP shall be the owner of any such
modification. SP may, at its sole discretion, provide such SOFTWARE
modifications to HGS, which will be retained by HGS in confidence and will not
be disclosed to SB, a COLLABORATION PARTNER or any THIRD PARTY without the prior
written consent of SP. HGS shall not incorporate any such modification into its
software for distribution to SB, COLLABORATION PARTNERS or THIRD PARTY(IES)
unless SP (in its sole discretion) first consents in writing and HGS first
agrees to pay SP a reasonable royalty, pursuant to mutually agreed upon terms.
SP acknowledges and agrees that SOFTWARE and any modified SOFTWARE developed by
or on behalf of SP may only be used by or for SP and may not be transferred to
SB or a THIRD PARTY.
6.7 During the INITIAL RESEARCH TERM SP shall have the right to
prioritize the sequencing by HGS of [***] expressed sequence tags per year. HGS
shall use diligent efforts to complete such prioritized sequencing (including
sequencing from cDNA libraries supplied by SP) as mutually agreed by HGS and SP,
subject to timely receipt by HGS of directions regarding prioritization and/or
cDNA libraries suitable for such sequencing from SP. All such expressed sequence
tags and the clones containing such expressed sequence tags shall be owned by
HGS and shall be HGS TECHNOLOGY under this Agreement.
6.8 During the INITIAL RESEARCH TERM, HGS shall maintain its annual
human cDNA sequencing activities at a level at least commensurate with the level
of human cDNA sequencing during the one year period immediately prior to the
EFFECTIVE DATE.
33
<PAGE>
6.9 SP may request additional research services from HGS at HGS's fully
allocated cost where HGS and SP mutually agree thereto. For sequencing of SP
libraries under this Paragraph, HGS will not use or disclose sequences sequenced
from such libraries to COLLABORATION PARTNERS or SB until twelve (12) months
after delivery of such sequences to SP.
6.10 HGS shall have the right to delay for a period of (12) months
disclosure to SP of such HGS TECHNOLOGY resulting from work performed by HGS for
a COLLABORATION PARTNER or SB pursuant to a provision of an agreement with a
COLLABORATION PARTNER or the COLLABORATION AGREEMENT similar to Paragraph 6.9 of
this Agreement.
6.11 Any sequences and clones containing such sequences arising under
Pargraph 6.9 shall be owned by HGS and are HGS TECHNOLOGY.
7. THERAPEUTIC PROTEINS
--------------------
7.1 SP, a COLLABORATION PARTNER, HGS or SB shall obtain exclusive
rights to any specific THERAPEUTIC PROTEIN which is a PRODUCT in the SP FIELD
provided:
(a) as among SP, HGS, SB and such COLLABORATION PARTNER, such
entity is the first to submit to HGS, or in the case of HGS to submit to SB, an
information package as permitted under this Agreement (or an agreement between
SB and/or HGS and each of the COLLABORATION PARTNERS) prior to the end of the
INITIAL RESEARCH TERM which:
(i) demonstrates evidence of in vivo biological activity for
any such THERAPEUTIC PROTEIN. Such evidence of in vivo biological activity must
be statistically
34
<PAGE>
different (p less than 0.05) from control for at least one data point, and must
be demonstrated in an experiment using at least three (3) dosages of the test
substance in which at least a trend of dose related activity is demonstrated,
OR
(ii) in the case of a THERAPEUTIC PROTEIN (a) for which in
vivo activity cannot be demonstrated after bone fide attempts to do so in at
least two (2) sub-primate species, or (b) it is demonstrated by documented
evidence (from scientific literature or in-house studies) that the relevant
effector system does not exist in sub-primates, or (c) it is demonstrated by
documented evidence (from scientific literature or in-house studies) that there
is an absence of reactivity with relevant targets in sub-primates, demonstrates
evidence of in vitro biological activity in at least one (1) relevant cellular
based assay for any such THERAPEUTIC PROTEIN. Such evidence of in vitro
biological activity must be statistically different (p less than 0.05) from
control for at least one data point, and must be demonstrated in an experiment
using at least three (3) concentrations of the test substance in which at least
a trend of dose related activity is demonstrated.
The preparation used to demonstrate biological activity shall be:
(i) a purified preparation in which at least 75% (w/w) of the
protein component of the preparation is the THERAPEUTIC
PROTEIN; or
(ii) a purified preparation in which the relative
concentration and/or specific activity of the THERAPEUTIC
PROTEIN has been increased at least 1000 fold as compared to
an unpurified preparation.
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<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
In no case shall the concentration of the THERAPEUTIC PROTEIN be less
than 1 microgram/ml. in the purified preparation of (i) or (ii). Such purified
preparation shall be shown to have a biological activity which is not
attributable to endotoxin contamination; and
(b) exclusive rights to such THERAPEUTIC PROTEIN have not been
previously given to SB or HGS or SP or a COLLABORATION PARTNER as the case may
be in accordance with the requirements of this Paragraph 7.1 or under Paragraph
7.2; and
(c) SP, HGS, the COLLABORATION PARTNERS or SB as the case may
be, submits with the information package a PROTEIN RESEARCH PLAN therefor.
7.2 SP acknowledges and agrees that rights are not available to SP
under this Section with respect to the following THERAPEUTIC PROTEINS:
Therapeutic Protein HGS Sequence ID
---------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
It is understood that the HGS Sequence ID is for identification
purposes only and that, for purposes of paragraph 7.1 and this paragraph 7.2,
all clones and sequences and polypeptides associated with the THERAPEUTIC
PROTEIN as well as muteins and fragments thereof are included in the rights
granted herein.
36
<PAGE>
7.3 (a) Within ninety (90) days from the receipt by SP of HGS
TECHNOLOGY in existence as of the EFFECTIVE DATE in the form of full length gene
reports, relevant to THERAPEUTIC PROTEINS which are PRODUCTS, SP shall have the
right to obtain exclusive rights to two (2) THERAPEUTIC PROTEINS under Paragraph
7.1 without meeting the evidence requirements of Paragraph 7.1 (a).
(b) To the extent available to HGS as of the EFFECTIVE DATE,
HGS shall provide SP with reasonable quantities of THERAPEUTIC PROTEINS which
are HGS TECHNOLOGY.
(c) HGS will also promptly provide to SP all material
information relating to the granted patents and pending patent applications in
existence as of the EFFECTIVE DATE for each THERAPEUTIC PROTEIN.
7.4 The rights granted to a THERAPEUTIC PROTEIN under this Section 7
and Paragraph 2.4 includes muteins and fragments thereof.
7.5 HGS shall notify SP in writing as to whether or not SP has obtained
exclusive rights to a THERAPEUTIC PROTEIN under this Section 7 within ten (10)
business days after submission of an information package to HGS by SP. The
failure of HGS to respond within such period shall be deemed to be notification
that the information package meets the requirements of this Section 7.
7.6 In the event that SP is notified that an information package
submitted by SP does not meet the requirements of Paragraph 7.1, such
notification shall include the reasons as to why such information package does
not meet such requirements. If the reason for such notification is that the
information package did not include the data and/or RESEARCH PLAN required
37
<PAGE>
by Paragraph 7.1 and SP disagrees with such notification, then HGS and SP shall
attempt to resolve such differences including by discussions between senior
management of HGS and SP, if necessary. If such dispute is not resolved within
twenty (20) days, then SP shall have the right to submit such dispute to binding
arbitration under Section 29 and if SP fails to do so, then the decision that
such information package did not meet such requirements shall be binding on SP.
If there is a dispute under this Agreement and/or the COLLABORATION AGREEMENT
and/or an agreement with a COLLABORATION PARTNER with respect to a THERAPEUTIC
PROTEIN as to whether or not a party thereto was the first to submit an
information package meeting the requirements of paragraph 7.1 (or requirements
essentially identical thereto), then no rights will be granted with respect to
such THERAPEUTIC PROTEIN until such dispute is resolved. In the event that SP is
notified that HGS, SB or a COLLABORATION PARTNER has, prior to SP, submitted an
information package and PROTEIN RESEARCH PLAN for the same THERAPEUTIC PROTEIN
for which SP has also filed an information package and PROTEIN RESEARCH PLAN,
such notification shall also include:
(i) the date on which the non-SP information package and
PROTEIN RESEARCH PLAN was received by HGS or SB, as
appropriate; and
(ii) a certification on behalf of HGS, signed by a senior
officer of HGS, that such non-SP information package (i.e., by
HGS and/or SB and/or a COLLABORATION PARTNER) met all of the
requirements of Paragraph 7.1 prior to HGS's receipt of SP's
information package and PROTEIN RESEARCH PLAN for the same
THERAPEUTIC PROTEIN.
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<PAGE>
7.7 (a) Subject to the dispute requirements of Paragraph 7.6, the
parties acknowledge and agree that a decision by HGS (or in the case of a
submission by HGS a decision by SB) that a party hereto or a COLLABORATION
PARTNER has submitted an information package which meets the requirements of
this Section 7 and as a result has exclusive rights to a THERAPEUTIC PROTEIN
shall be final and binding between the parties hereto and shall also be final
and binding between SP and a COLLABORATION PARTNER provided that such
COLLABORATION PARTNER also agrees that the rights granted to SP under this
Section 7 are final and binding as to such COLLABORATION PARTNER. (b) Neither SB
nor HGS shall have any liability to SP with respect to their respective
decisions that SB, HGS or a COLLABORATION PARTNER has exclusive rights to a
THERAPEUTIC PROTEIN under this Agreement, the COLLABORATION AGREEMENT or an
agreement with a COLLABORATION PARTNER or that SP does or does not have rights
to a THERAPEUTIC PROTEIN unless there has been willful misconduct by HGS and/or
SB.
7.8 HGS shall identify to SP, by HGS sequence ID, each THERAPEUTIC
PROTEIN which is a PRODUCT as to which exclusive rights have been granted to HGS
and/or SB and/or a COLLABORATION PARTNER within ten (10) business days after the
granting of such rights.
7.9 HGS agrees that information packages and PROTEIN RESEARCH PLANS
submitted by SP with respect to THERAPEUTIC PROTEINS shall be strictly
confidential and shall be provided to only those employees at HGS who are to
decide whether or not the information package meets the requirements of
Paragraph 7.1, not to exceed five (5) employees.
39
<PAGE>
HGS further agrees that all such information packages and PROTEIN RESEARCH PLANS
will not be utilized by or on behalf of HGS for any purpose.
7.10 HGS agrees that it will promptly inform SB and each COLLABORATION
PARTNER of each THERAPEUTIC PROTEIN by HGS Sequence ID number for which
exclusive rights have been granted to SP under this Agreement, but in doing so
will not identify SP as the party to whom such exclusive rights have been
granted.
7.11 HGS agrees that for each THERAPEUTIC PROTEIN for which it is
seeking exclusive rights (other than those specified in Paragraph 7.2), HGS will
submit to SB an information package and a PROTEIN RESEARCH PLAN therefor in
conformity with the terms and conditions of Paragraph 7.1 for evaluation. SB
will, in good faith, determine whether or not such information package and
PROTEIN RESEARCH PLAN meet the criteria set forth in Paragraph 7.1 of this
Agreement.
Subject to the dispute requirements of Paragraph 7.6, the parties
acknowledge and agree that a decision by SB that HGS has submitted an
information package and PROTEIN RESEARCH PLAN which meets the requirements of
this Section 7 and as a result that HGS has exclusive rights to a THERAPEUTIC
PROTEIN shall be final and binding as among the parties hereto.
7.12 For purposes of this Section 7, an information package and/or a
PROTEIN RESEARCH PLAN shall be deemed submitted when it is actually received by
HGS or SB, as the case may be.
40
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
7.13 For purposes of this Section 7, the term "business day" shall mean
each weekday which is not a legal holiday in the City of New York and which is a
day on which each of the parties would normally conduct business operations.
8. PRODUCT DEVELOPMENT
-------------------
8.1 SP shall use diligent efforts to develop, market, promote and sell
royalty bearing SP PROTEIN PRODUCT equivalent to those efforts it uses with
respect to the proteins of similar value and status, subject to SP's right to
terminate such efforts and surrender all rights in and to such THERAPEUTIC
PROTEIN.
8.2 After the INITIAL RESEARCH TERM, SP shall use diligent efforts to
develop screens and to screen for SP DRUG PRODUCTS which are the subject of a
DRUG RESEARCH PLAN submitted by SP equivalent to those efforts it uses to
develop and screen for drug products using its other proprietary targets of
similar value and status.
8.3 Within sixty (60) days after the end of each calendar year, SP
shall provide to HGS in writing annual reports with respect to work performed by
or for SP under RESEARCH PLANS.
9. SP CO-RIGHTS
------------
9.1 In addition to the rights obtained by SP with respect to
THERAPEUTIC PROTEINS under Section 7, HGS acknowledges and agrees that SP shall
have the right and option to obtain rights in and to [***] THERAPEUTIC
PROTEINS as to which HGS has obtained exclusive rights under Section 7 which
have not been licensed to another entity prior to initiating Phase II(a)
Clinical Studies and as to which Phase II(a) Clinical Studies have been
completed by or on behalf of HGS. The option shall be exercised by SP in writing
within sixty
41
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(60) days after HGS notifies SP in writing that such studies have been
completed. HGS and SP may mutually agree that such rights may be exercised at an
earlier time. Upon exercise of the option, HGS and SP shall negotiate a separate
agreement which shall embody the following principles:
(a) HGS and SP shall equally share all prospective costs, expenses and
profits incurred with respect to such two products after completion of Phase IIa
clinical studies, provided, however, that such costs and expenses shall not
include the cost of capital expenditures, except to the extent that the
depreciation of capital expenditures is included in costs and expenses.
(b) SP's rights will be determined by mutual agreement and may
include (i) copromotion and/or (ii) co-marketing and/or (iii)
exclusive rights in agreed-to territories.
(c) Neither HGS nor SP shall have a right to sublicense its
co-promotion or co- marketing rights.
(d) A Japanese company may have certain rights to the products in
Japan and to the extent that such rights exist, SP and HGS
shall adjust the rights in the remainder of the world to
compensate SP for loss of rights in Japan.
9.2 [***]
9.3(a) In the event that, prior to initiating Phase II(a) Clinical
Studies, HGS decides to license a THERAPEUTIC PROTEIN as to which HGS has
obtained exclusive rights under
42
<PAGE>
Section 7, then HGS shall offer such THERAPEUTIC PROTEIN to SP in writing, along
with the PROTEIN RESEARCH PLAN submitted by HGS with respect thereto, and within
ninety (90) days thereafter SP shall have the right, in its sole discretion, to
designate such THERAPEUTIC PROTEIN as an SP PROTEIN PRODUCT subject to the terms
and conditions of this Agreement. With such written notice by SP, SP shall also
submit a PROTEIN RESEARCH PLAN.
(b) The option granted to SP under paragraphs 9.1 and 9.3(a) shall not
be applicable to any THERAPEUTIC PROTEIN after SP has exercised its option under
Paragraph 9.1 and under Paragraph 9.3(a) such that in the aggregate SP has
obtained rights under Paragraphs 9.1 and 9.3(a) to two (2) THERAPEUTIC PROTEINS.
(c) By written notice to HGS, SP within its sole discretion may
surrender all rights to a THERAPEUTIC PROTEIN as to which SP has exercised its
option under Paragraph 9.3(a), and at such time, such THERAPEUTIC PROTEIN shall
become a THERAPEUTIC PROTEIN as to which HGS has exclusive rights. SP shall
grant to HGS a license to any and all technology, data and information which SP
has developed with respect to such surrendered THERAPEUTIC PROTEIN. Effective
upon such surrender of such THERAPEUTIC PROTEIN, for the purposes of Paragraph
9.3(b), such THERAPEUTIC PROTEIN shall not be counted as a THERAPEUTIC PROTEIN
as to which SP has exercised its option under Paragraph 9.3(a).
(d) SB shall have no rights under the SP/SB AGREEMENT with respect to
any THERAPEUTIC PROTEIN as to which SP obtains rights under Paragraph 9.3(a).
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<PAGE>
10. CONFIDENTIALITY
---------------
10.1 Subject to Paragraphs 10.2 and 10.3 and 10.4, the parties agree
not to disclose and/or provide to a THIRD PARTY information and/or materials
received from another party and to use the information and materials received
from the other party only as licensed hereunder.
10.2 Unless otherwise restricted by this Agreement, the confidentiality
obligations of paragraph 10.1 shall not apply to information and/or materials
which:
(i) was known to the receiving party or generally known to
the public prior to its disclosure hereunder; or
(ii) subsequently becomes known to the public by some means
other than a breach of this Agreement;
(iii) is subsequently disclosed to the receiving party by a
THIRD PARTY having a lawful right to make such
disclosure and who is not under an obligation of
confidentiality to the disclosing party;
(iv) is required by law or bona fide legal process
regulation, rule, act or order of any governmental
agency or authority 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
information and/or materials;
(v) is approved for release by the parties, or
(vi) is independently developed by the employees or agents
of a party or their respective AFFILIATES without any
knowledge of the information and/or
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<PAGE>
materials provided by another party, provided that
such independent development can be properly
demonstrated by the party disclosing the information
and/or materials.
10.3 (a) Notwithstanding Paragraph 10.1, SP may disclose and/or provide
LICENSED TECHNOLOGY to a THIRD PARTY who (i) receives a license from SP to
LICENSED TECHNOLOGY in conjunction with a license to an SP PRODUCT as permitted
by Paragraph 2.9 hereof, or (ii) is a THIRD PARTY contractor assisting SP with
respect to an SP PRODUCT, provided that such THIRD PARTY enters into an
agreement as provided in Paragraph 10.4, and such THIRD PARTY agrees to
confidentiality and non-use obligations essentially identical to Paragraph 10.1.
(b) Unless restricted by other provisions of this Agreement, the
obligations of Paragraph 10.1 shall not restrict the ability of HGS or SB to
disclose information and/or provide materials to a THIRD PARTY, provided that
such THIRD PARTY enters into an agreement by which the THIRD PARTY agrees to
confidentiality and non-use obligations essentially identical to Paragraph 10.1.
10.4 In the event that SP intends to transfer or disclose LICENSED
TECHNOLOGY to a THIRD PARTY contractor as permitted by Paragraph 10.3 no such
transfer or disclosure shall take place until such THIRD PARTY enters into an
agreement with SP by which SP is granted ownership of or a license (including
the right to grant sublicenses) to all inventions (and patent rights based
thereon) which result from the use of LICENSED TECHNOLOGY. Any such inventions
and patents shall be SP TECHNOLOGY and SP PATENTS subject to the terms and
conditions of this Agreement, provided, however, that any such inventions and
patents which
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result from any incidental or immaterial use of LICENSED TECHNOLOGY shall not be
SP TECHNOLOGY or SP PATENTS.
10.5 All confidential information disclosed by one party to another
party shall remain the intellectual property of the disclosing party. In the
event that a court or other legal or administrative tribunal, directly or
through an appointed master, trustee or receiver, assumes partial or complete
control over the assets of a party to this Agreement based on the insolvency or
bankruptcy of such party, the bankrupt or insolvent party shall promptly notify
the court or other tribunal (i) that confidential information received from the
other party under this Agreement remains the property of another party and (ii)
of the confidentiality obligations under this Agreement. In addition, the
bankrupt or insolvent party shall, to the extent permitted by law, take all
steps necessary or desirable to maintain the confidentiality of the other
party's(ies') confidential information and to insure that the court, other
tribunal or appointee maintains such information in confidence in accordance
with the terms of this Agreement.
10.6 (a) No public announcement concerning (i) the existence of or
terms of this Agreement, (ii) research and/or discoveries made by SP, (iii)
milestones achieved by SP, and (iv) exercise by SP of rights and options granted
under this Agreement, shall be made, either directly or indirectly, by any party
to this Agreement without prior written notice to the other parties and, except
as may be legally required, or as may be legally required for a public offering
of securities, or as may be required for recording purposes, without first
obtaining the approval of the other parties and agreement upon the nature and
text of such announcement. The party desiring to make any such public
announcement shall inform the other parties of the proposed announcement or
disclosure in reasonably sufficient time prior to public release, and
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shall provide the other parties with a written copy thereof, in order to allow
such other parties to comment upon such announcement or disclosure. This
Paragraph 10.6 shall not apply to any information in an public announcement
which is information essentially identical to that contained in a previous
public announcement agreed to pursuant to this paragraph.
(b) HGS and/or SB may provide a COLLABORATION PARTNER with a
copy of this Agreement.
10.7 Without the written consent of HGS and SB, SP shall not submit for
written or oral publication any manuscript, abstract or the like which includes
SP TECHNOLOGY which is or is directed to a TARGET and/or is a THERAPEUTIC
PROTEIN prior to the earlier of (i) eighteen months after SP files an SP PATENT
which claims such TARGET or THERAPEUTIC PROTEIN or (ii) with respect to a
THERAPEUTIC PROTEIN, the date on which SP obtains rights to such THERAPEUTIC
PROTEIN pursuant to Section 7 or (iii) such TARGET or THERAPEUTIC PROTEIN has
been published in a printed publication other than through a breach of this
paragraph 10.7.
11. PATENT PROSECUTION AND LITIGATION
---------------------------------
11.1 A party shall have and retain sole and exclusive title to all
inventions, discoveries, designs, works of authorship and other know-how which
are made, conceived, reduced to practice or generated by its employees, agents,
or other persons acting under its authority. As to all inventions, discoveries,
designs, works of authorship and other know-how made, conceived, reduced to
practice or generated jointly by employees, agents, or other persons acting
under the authority of two or more parties, such parties shall own an equal
undivided interest
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therein. In the event of jointly owned inventions, in the case where HGS is one
of the joint owners, HGS shall be responsible for the filing, prosecution and
maintenance of patents and patent applications directed thereto under the terms
and conditions of Paragraph 11.2 and if HGS is not one of the joint owners,
then, to the extent that SP is a joint owner, SP shall be responsible for the
filing, prosecution and maintenance thereof under the terms and conditions of
Paragraph 11.3, in each case, however, each of the joint owners shall be
responsible for an equal share of the cost and expense thereof. HGS or SP, as
appropriate, shall consult with all joint owners with respect to strategies for
filing, prosecution and maintenance of patents and patent applications for which
it bears responsibility under this Section 11.1, and shall keep such joint
owners reasonably informed with regard to filing, prosecution and maintenance
activity for such patents and patent applications, provided, however, that HGS
or SP, as appropriate, shall have final decision-making authority with respect
to filing, prosecution and maintenance of any patents and patent applications
for which it is responsible. If a joint owner does not desire to file, prosecute
or maintain a patent or patent application to a joint invention, such owner
shall assign its ownership interest therein to the other joint owner(s) and
shall no longer be responsible for the cost and expense thereof, and shall have
no further right to consult, review or comment with respect to the filing,
prosecution and maintenance of said patent or patent application. All patents
and patent applications to joint inventions which are LICENSED TECHNOLOGY and/or
SP TECHNOLOGY shall be LICENSED PATENTS and SP PATENTS, respectively, subject to
the terms and conditions of this Agreement; otherwise, any joint owner shall be
free to dispose of its interest therein without accounting to any other owner.
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11.2 (a) HGS and SB, as the case may be, shall have the right within
its sole discretion to prepare, file, prosecute and maintain LICENSED PATENTS
owned by HGS and SB, respectively. With respect to LICENSED PATENTS as to which
SP retains a license hereunder, subject to Paragraph 11.10, HGS and SB, as the
case may be, shall keep SP reasonably informed with respect to the filing and
prosecution thereof (including interference proceedings). In the event that HGS
or SB, as the case may be, and do not intend to prepare, file, prosecute and/or
maintain patent protection in any country with respect to LICENSED TECHNOLOGY
(other than expressed sequence tags (ESTs)) which is or would be a LICENSED
PATENT as to which SP retains a license hereunder, HGS or SB, as the case may
be, shall, at SP's option, do so at the cost and expense of SP. In the event
that SB or a COLLABORATION PARTNER also makes such a request in a country, such
costs shall be apportioned between SP and the requesting entity(ies).
(b) SP shall have the right within its sole discretion to
prepare, file, prosecute and maintain SP PATENTS. With respect to SP PATENTS as
to which HGS retains a license hereunder, subject to Paragraph 11.11, SP shall
keep HGS reasonably informed with respect to the filing and prosecution thereof
(including interference proceedings). In the event that SP does not intend to
prepare, file, prosecute and/or maintain patent protection in any country with
respect to SP TECHNOLOGY which is or would be an SP PATENT as to which HGS
retains a license hereunder, SP shall, at HGS' option, do so at the cost and
expense of HGS.
(c) SP will provide HGS or SB, as appropriate, reasonable
assistance to enable HGS or SB, as appropriate, to prepare, file, prosecute and
maintain LICENSED PATENTS
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pursuant to section 11.2(a). HGS will provide SP reasonable assistance to enable
SP to prepare, file, prosecute and maintain SP PATENTS pursuant to section
11.2(b).
11.3 Each party, on behalf of itself, its AFFILIATES and its and their
respective directors, employees, officers, shareholders, agents, successors and
assigns hereby waives any and all actions and causes of action, claims and
demands whatsoever, in law or equity of any kind it or they may have against
another party, its AFFILIATES and its or their respective officers, directors,
employees, shareholders, agents, successors and assigns, which may arise
from performance of patent activities under this Section, except those which
result from gross negligence, recklessness, or willful misconduct.
11.4 (a) In the event of the institution of any suit by a THIRD PARTY
against SP or its licensees for patent infringement involving the manufacture,
use, import, export, offer for sale, sale, distribution or marketing of SP
PRODUCT, SP shall promptly notify HGS in writing. As between HGS, SB and SP, SP
shall be solely responsible for the cost and expense of such action and any
liability which results therefrom.
(b) In the event of the institution of any suit by a THIRD
PARTY against HGS and/or SB, or their respective licensees, for patent
infringement involving the manufacture, use, import, export, offer for sale,
sale, distribution or marketing of any PRODUCT sold by HGS and/or SB or their
respective licensees involving or developed using LICENSED TECHNOLOGY and/or SP
TECHNOLOGY, HGS and/or SB shall promptly notify SP in writing. As between HGS,
SB and SP, HGS and/or SB, as appropriate, shall be solely responsible for the
cost and expense of such action and any liability which results therefrom.
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11.5 In the event that HGS, SB or SP becomes aware of actual or
threatened infringement of a SP PATENT or LICENSED PATENT anywhere in the
TERRITORY, that party shall promptly notify the other parties in writing. The
owner of the SP PATENT or LICENSED PATENT shall have the first right but not the
obligation to bring, at its own expense, an infringement action against any
THIRD PARTY and to use another party's name in connection therewith. If the
owner of the patent does not commence a particular infringement action within
ninety (90) days, the other party, after notifying the owner in writing, shall
be entitled to bring such infringement action, in its own name and/or in the
name of the patent owner, at its own expense to the extent that such party is
licensed thereunder. The foregoing notwithstanding, in the event that an alleged
infringer certifies pursuant to 21 U.S.C. ss.355(b)(2)(A)(iv) against an issued
SP PATENT or LICENSED PATENT covering a PRODUCT, as between the patent owner and
the owner of the PRODUCT, the party receiving notice of such certification shall
immediately notify the other party of such certification, and if fourteen (14)
days prior to expiration of the forty five (45) day period set forth in 21
U.S.C. ss.355(c)(3)(C), the owner of the SP PATENT or LICENSED PATENT fails to
commence an infringement action, the party receiving notice, in its sole
discretion, at its own expense and to the extent that it is licensed under the
SP PATENT or LICENSED PATENT, shall be entitled to bring such infringement
action in its own name and/or in the name of the patent owner. The party
conducting an action under this Paragraph 11.5 shall have full control over its
conduct, including settlement thereof provided such settlement shall not be made
without the prior written consent of the other licensing party or licensed party
if it would adversely affect the patent rights of such party. The licensing
party (i.e., the patent owner) and the licensed party (e.g., the
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owner of the PRODUCT) shall reasonably assist one another and cooperate in any
such litigation at the other's request , each such party paying its own costs
and expenses. The party conducting the litigation shall periodically reimburse
the other party(ies) for its reasonable and actual out-of-pocket expenses for
assisting in the litigation , which reimbursement shall be made within thirty
(30) days of receipt by the party conducting the litigation of itemized invoices
from the assisting party documenting such expenses.
11.6 Any recovery made by a party as the result of an action for patent
infringement it has conducted under Paragraph 11.5 shall be distributed as
follows:
(i) The party conducting the action shall recover its actual
out -of-pocket expenses.
(ii) To the extent that the recovery exceeds the total of item
(i), the excess shall be kept by the party conducting the
action, provided, however, that to the extent that (a) the
recovery is based on an award of lost sales/profits, and (b)
the party conducting the action would have incurred a royalty
obligation to another party based upon such sales, the party
to whom such royalties would have been due shall receive a
proportion of the excess recovery corresponding to the royalty
percentage it would have otherwise been due.
11.7 The parties shall periodically keep one another reasonably
informed of the status of and of their respective activities regarding any such
litigation or settlement thereof.
11.8 To the extent that the owner of a SP PATENT or a LICENSED PATENT
also owns a PRODUCT (covered by an NDA or HRD) which PRODUCT is covered by a
granted claim of said SP PATENT or LICENSED PATENT, the owner of said SP PATENT
or
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LICENSED PATENT shall have the first right to seek extensions of the terms of
the patent and to seek to obtain SPCs. If the owner of a SP PATENT or a LICENSED
PATENT does not own a PRODUCT covered by a granted claim of said SP PATENT or
LICENSED PATENT, then the owner of a PRODUCT (covered by an NDA or HRD) which
PRODUCT is licensed under and is covered by a granted claim of said SP PATENT or
LICENSED PATENT shall have the right to seek extensions of the terms of the
patent and to seek to obtain SPCs. Where more than one (1) PRODUCT is covered by
a granted claim of the same SP PATENT or the same LICENSED PATENT, as between
SP, HGS, SB and COLLABORATION PARTNERS, the right to seek extensions of the
terms of the patent and to obtain SPCs shall be granted by the patent owner to
the first of SP, HGS, SB and the COLLABORATION PARTNERS, who is licensed
thereunder to submit to the patent owner, in writing, a request to obtain such
rights with respect to a PRODUCT (covered by an NDA or HRD) which is approved
for marketing and/or sale in at least one country in which said SP PATENT or
LICENSED PATENT is in force. Each party shall assist the other in the obtaining
of such extensions or SPCs including by authorizing the other party to act as
its agent.
11.9 (a) All rights and licenses granted under or pursuant to this
Agreement by one party to another party are, for all purposes of Section 365(n)
of Title 11 of the U.S. Code ("Title 11"), licenses of rights to intellectual
property as defined in Title 11. The licensing party agrees during the term of
this Agreement to maintain and preserve any current copies of all such
intellectual property which are in existence and in its possession as of the
commencement of a case under Title 11 by or against the licensing party. If a
case is commenced by or against the licensing party under Title 11, then, unless
and until this Agreement is rejected as provided in
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Title 11, the licensing party (in any capacity, including debtor-in-possession)
and its successors and assigns (including, without limitation, a Title 11
Trustee) shall, as the party who is a licensee may elect in a written request,
immediately upon such request (A) (i) perform all of the obligations provided in
this Agreement to be performed by the licensing party, or (ii) provide to the
party who is a licensee all such intellectual property (including all
embodiments thereof) held by the licensing party and such successors and assigns
as of the commencement of a case under Title 11 by or against the licensing
party and from time to time thereafter, and (B) not interfere with the rights of
the licensing party as provided in this Agreement, or any agreement
supplementary hereto, to such intellectual property (including all such
embodiments thereof, including any right of the licensing party to obtain such
intellectual property or such embodiment) from any other entity.
(b) If a Title 11 case is commenced by or against the
licensing party, this Agreement is rejected as provided in Title 11 and the
party who is a licensee elects to retain its rights hereunder as provided in
Title 11, then the licensing party (in any capacity, including
debtor-in-possession) and its successors and assigns (including, without,
limitation, a Title 11 Trustee) shall provide to the party who is a licensee all
such intellectual property (including all embodiments thereof) held by the
licensing party and such successors and assigns immediately upon the party who
is a licensee's written request thereof. Whenever, the licensing party or any of
its successors or assigns provides to the party who is a licensee any of the
intellectual property licensed hereunder (or any embodiment thereof) pursuant to
this Paragraph 11.9, the party who is a licensee shall have the right to perform
the obligations of the licensing party hereunder with respect to such
intellectual property, but neither such provision nor such
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performance by the party who is a licensee shall release the licensing party
from any such obligation or liability for failing to perform it; provided,
however, that in such event the party who is a licensee shall not be entitled to
compel specific performance by the licensing party under this Agreement except
to the extent of enforcing the exclusivity of the license granted hereunder.
(c) All rights, powers, remedies, obligations and conditions
of the party who is a licensee provided herein are in addition to and not in
substitution for any and all other rights, powers, remedies, obligations and
conditions of the licensing party or the party who is a licensee now or
hereafter existing at law or in equity (including, without limitation, Title 11)
in the event of the commencement of a Title 11 case by or against the licensing
party. The party who is a licensee, in addition to the rights, powers and
remedies expressly provided herein, shall be subject to all obligations and
conditions, and shall be entitled to exercise all other such rights and powers
and resort to all other such remedies as may now or hereafter exist at law or in
equity (including, without limitation, Title 11) in such event. The parties
agree that they intend the foregoing rights and obligations of the party who is
a licensee to apply to the maximum extent permitted by law, including without
limitation for purposes of Title 11, (i) the right of access to any intellectual
property (including all embodiments thereof) of the licensing party, or any
third party with whom the licensing party contracts to perform an obligation of
the licensing party under this Agreement, and, in the case of the third party,
which is necessary for the development, registration and manufacture of a
product licensed hereunder, and (ii) the right to contract directly with any
third party described in clause (i) in this sentence to complete the contracted
work.
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11.10 The obligations of HGS and/or SB to keep SP informed under
Paragraph 11.2(a) shall only apply to LICENSED PATENTS which claim LICENSED
TECHNOLOGY which HGS and/or SB is required to disclose to SP pursuant to Section
6.
11.11 The obligation of SP to keep HGS informed under Paragraph 11.2(b)
shall not extend to any SP PATENT directed to a THERAPEUTIC PROTEIN until the
earlier of publication of the SP PATENT and/or SP obtaining exclusive rights to
the THERAPEUTIC PROTEIN under Section 7.
12. STATEMENTS AND REMITTANCES
--------------------------
12.1 SP shall keep and require its licensees to keep complete and
accurate records of all NET SALES of SP PRODUCT for which royalties are due
hereunder. HGS shall have the right, at its expense, through a certified public
accountant or like person reasonably acceptable to SP, to examine pertinent
financial records during regular business hours upon proper advance written
notice during the life of this Agreement and for six (6) months after its
termination for the purpose of verifying and reporting to HGS as to the
computation of the royalty payments made hereunder; provided, however, that such
examination shall not take place more often than once a year and not later than
forty-five (45) days after written request is made; provided further that such
accountant shall report only as to the accuracy of the royalty statements and
payments, including the magnitude and source of any discrepancy. Neither SP nor
its licensees shall be required to maintain such records for more than three (3)
years. The accountant shall execute customary confidentiality agreements prior
to any examination, reasonably satisfactory in form
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and substance to SP, to maintain in confidence all information obtained during
the course of any such examination, except for disclosure to HGS, as necessary
for the above purpose.
12.2 Within sixty (60) days after the close of each calendar quarter,
SP shall deliver to HGS a true accounting of all SP PRODUCT subject to royalty
hereunder sold by it and its licensees and distributors during such calendar
quarter and shall at the same time pay all royalties due. In the event that the
royalty rate changes in a calendar quarter with respect to an SP PRODUCT as a
result of the NET SALES of such SP PRODUCT for such calendar year reaching a
level at which there is a change in royalty rate as provided in Paragraph 3.2
("New Royalty Rate") then the royalties which are paid by SP for such calendar
quarter and the subsequent calendar quarters for such calendar year (until the
royalty rate is again changed) shall be determined and paid based on the New
Royalty Rate, and in addition, the royalties for the previous calendar quarters
for such calendar year for such SP PRODUCT shall be recomputed at the New
Royalty Rate, and the payment for the calendar quarter in which there is a New
Royalty Rate shall be adjusted for the difference between the royalties paid for
such SP PRODUCT for the previous calendar quarters for such calendar year and
the royalties for such previous calendar quarters for such calendar year
calculated by use of the New Royalty Rate. Such accounting shall show sales,
each calculation of NET SALES and the calculation of currency conversion on a
country-by-country basis and SP-PRODUCT-by-SP-PRODUCT basis, and recalculation
of royalties based on a New Royalty Rate, if applicable.
12.4 All royalties and other payments due under this Agreement shall be
payable in U.S. dollars.
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12.5 All royalties, with the exception of those payable on sales to
customers in the United States, shall be paid by Schering-Plough Ltd. from its
office in Lucerne, Switzerland. Royalties payable on U.S. sales shall be paid
directly to HGS by Schering Corporation from its offices in Kenilworth, New
Jersey. Royalties payable on sales in countries other than the United States
shall be calculated by multiplying the appropriate royalty rate times the sales
in each currency in which they are made and converting the resulting amount into
United States dollars, at the rates of exchange used by Schering Corporation,
for reporting such sales for United States financial statement purposes. A copy
of SP's current policy for bookkeeping exchange rates is set forth in Appendix
G. If, due to restrictions or prohibitions imposed by a national or
international authority, payments cannot be made as aforesaid, the parties shall
consult with a view to finding a prompt and acceptable solution, and SP will
deal with such monies as HGS may lawfully direct at no additional out-of-pocket
expense to SP. Notwithstanding the foregoing, if royalties cannot be remitted to
HGS for any reason within six (6) months after the end of the calendar quarter
during which they are earned, then SP shall be obligated to deposit the
royalties in a bank account in Switzerland in the name of HGS. SP shall deduct
any withholding taxes which SP is obligated to withhold in a country based on
royalties or milestones due to HGS based on sales in such country from royalty
or milestone payments due HGS for such country under this Agreement and pay them
to the proper authorities as required by applicable laws. SP shall maintain
official receipts of payment of any withholding taxes and forward these receipts
to HGS within sixty (60) days.
13. TERM AND TERMINATION
--------------------
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13.1 This Agreement shall come into effect as of the EFFECTIVE DATE and
shall remain in full force and effect unless earlier terminated as provided in
this Section 13.
13.2 In the event SP fails to make a royalty or milestone payment to
HGS under this Agreement with respect to a SP PRODUCT, when due, or fails to
meet its obligations under Section 8 of this Agreement with respect to a SP
PRODUCT, in addition to any other remedy which it may have, HGS may notify SP in
writing that all of SP's rights with respect to such SP PRODUCT shall terminate
as of thirty (30) days after such written notice and SP's rights with respect
thereto shall terminate unless such payment is made or such failure is cured,
prior to the expiration of such thirty (30) day period.
13.3 In the event that SP fails to make a payment to HGS under
Paragraph 3.1 or under Paragraph 5.1, when due, in addition to any other remedy
which HGS may have, HGS may notify SP in writing of such failure and that this
Agreement shall terminate in its entirety and if SP fails to make such payment
within thirty (30) days thereafter, this Agreement shall terminate.
13.4 In the event that HGS and/or SB fails to meet its obligations
under Section 6, in addition to any other remedy which SP may have, SP may
notify HGS or SB, in writing, as the case may be, of such failure and that this
Agreement shall terminate in its entirety as to HGS and/or SB, as the case may
be, and if HGS or SB, as the case may be, fails to cure such failure within
thirty (30) days thereafter, this Agreement shall terminate with respect to HGS
or SB, as the case may be, in its entirety.
13.5 Any party, may terminate this Agreement as to another party if, at
any time, such other party shall file in any court or agency pursuant to any
statute or regulation of any state or
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country, a petition in bankruptcy or insolvency or for reorganization or for an
arrangement or for the appointment of a receiver or trustee of the party or of
its assets, or if such other party proposes a written agreement of composition
or extension of its debts, or if such other party shall be served with an
involuntary petition against it, filed in any insolvency proceeding, and such
petition shall not be dismissed within sixty (60) days after the filing thereof,
or if such other party shall propose or be a party to any dissolution or
liquidation, or if such other party shall make an assignment for the benefit of
creditors.
13.6 Neither HGS nor SP nor SB shall have the right to terminate this
Agreement except with respect to HGS and SP under paragraphs 13.3, 13.4 and with
respect to HGS, SP and SB under paragraph 13.5, provided, however, that nothing
in this Agreement shall limit any remedies for breach which may be available
pursuant to a judgment of a court, in law or equity, including termination of
this Agreement or of any or all rights hereunder, except that any action seeking
remedies for breach of this Agreement shall be conducted in accordance with
Section 18.
13.7 In the event that prior to one (1) year after the end of the
INITIAL RESEARCH TERM, SP has not obtained the full length DNA coding sequence
for each TARGET encompassed by an ANTIBODY RESEARCH PLAN and has not certified
in writing to HGS that such sequence(s) has been obtained, HGS by written notice
to SP may terminate all rights and licenses to such TARGET(S) and the ANTIBODY
PRODUCT(S) encompassed by such ANTIBODY RESEARCH PLAN(S) and such rights and
licenses shall terminate thirty (30) days thereafter unless SP prior to the
expiration of such thirty (30) days has obtained such sequence(s)
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and has provided to HGS such certification. Upon such termination, SP shall
discontinue all work encompassed by such ANTIBODY RESEARCH PLAN.
13.8 In the event that prior to one (1) year after the later of the end
of the INITIAL RESEARCH TERM or the EXTENDED TERM, SP has not obtained the full
length DNA coding sequence for each TARGET encompassed by a DRUG RESEARCH PLAN
and has not certified in writing to HGS that such sequence(s) has been obtained,
HGS by written notice to SP may terminate all rights and licenses to such
TARGET(s) and the DRUG PRODUCT(s) encompassed by such DRUG RESEARCH PLAN(s) and
such rights and licenses shall terminate thirty (30) days thereafter unless SP
prior to the expiration of such thirty (30) days has obtained such sequence(s)
and has provided to HGS such certification. Upon such termination, SP shall
discontinue all work encompassed by such DRUG RESEARCH PLAN(s).
14. RIGHTS AND DUTIES UPON TERMINATION
----------------------------------
14.1 Notwithstanding termination of this agreement, the rights and
obligations of the parties under Sections 10, 12, 14, 16, 18 and 30 and
paragraphs 2.8, 2.9, 2.10, 3.1(b), and 5.1(b), shall survive such termination.
14.2 Termination of the Agreement in accordance with the provisions
hereof shall not limit remedies which may be otherwise available in law or
equity.
14.3 Other than termination of this Agreement pursuant to Paragraph
13.4 or with respect to an SP PRODUCT as to which rights have been terminated
under Paragraph 13.2, SP's obligation to pay royalties and milestone payments
for SP PRODUCT shall survive such termination.
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15. WARRANTIES AND REPRESENTATIONS
------------------------------
15.1 Each of HGS, SB and SP hereby represents, warrants and covenants
to the other, as of the EFFECTIVE DATE, as follows:
(a) it is a corporation duly organized and validity existing
under the laws of the state or other jurisdiction of incorporation or formation;
(b) the execution, delivery and performance of this Agreement
by such party has been duly authorized by all requisite corporate action;
(c) it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, including, without
limitation, the right, power and authority to grant the licenses under Section
2;
(d) the execution, delivery and performance by such party of
this Agreement and its compliance with the terms and provisions hereof to such
party's best knowledge does not conflict with or result in a breach of any of
the terms and provisions of or constitute a default under (i) a loan agreement,
guaranty, financing agreement, agreement affecting a product or other agreement
or instrument binding or affecting it or its property; (ii) the provisions of
its charter documents or bylaws; or (iii) any order, writ, injunction or decree
of any court or governmental authority entered against it or by which any of its
property is bound;
(e) this Agreement constitutes such party's legal, valid and
binding obligation enforceable against it in accordance with its terms subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to the
availability of particular remedies under general equity principles.
62
<PAGE>
15.2 HGS, SB and SP, as the case may be, hereby represent, warrant, and
covenant to a party receiving a license hereunder as follows:
(a) as of the EFFECTIVE DATE, there are no claims, judgments
or settlements against or owed by HGS or SB, as the case may be, or pending or
threatened claims or litigation, in each case relating to HGS' or SB's interest,
as the case may be, in or to LICENSED PATENTS or LICENSED TECHNOLOGY; and
(b) HGS, SB and SP, as the case may be, has not and will not
grant any rights or licenses to any person or entity which is inconsistent with
the rights and licenses granted by HGS, SB, or SP, as the case may be, to a
party under this Agreement.
15.3 HGS hereby represents and warrants to SP that as of the EFFECTIVE
DATE:
(a) without having made any inquiry or investigation, no
information has come to HGS' attention which causes HGS to reasonably believe
that SP will not be able to negotiate license rights from each THIRD PARTY, who
is a licensor to HGS of the SOFTWARE identified in Appendix F as owned by said
THIRD PARTY, on terms that are at least as favorable to SP as those given by
such THIRD PARTY to HGS;
(b) without having made an inquiry or investigation, no
information has come to HGS' attention which causes HGS to reasonably believe
that the SOFTWARE to be provided to SP by HGS as of the EFFECTIVE DATE infringes
any patent, copyright, trademark or trade secret right of any THIRD PARTY which
has not been licensed by HGS;
(c) to HGS' best knowledge, the list of SOFTWARE contained in
Appendix F is true, complete and correct in all material respects;
63
<PAGE>
(d) to HGS' best knowledge, the list of hardware components
set forth in Appendix F includes all of the material components SP will require
to utilize the SOFTWARE at its facilities in the manner contemplated by this
Agreement and to receive in an electronic format compatible with the SOFTWARE
all HGS TECHNOLOGY that is available in electronic format; and
(e) for a period of one (1) year from the date that the
SOFTWARE is installed and is fully operational at SP's facilities, the SOFTWARE
located at HGS and which is and will be used by HGS to input, format, and
transmit HGS TECHNOLOGY to SP in an electronic format will function in the
manner intended by the parties.
15.4 No party to this Agreement has in effect, and after the EFFECTIVE
DATE no party shall enter into any written agreement (including, but not limited
to, further amendments to the COLLABORATION AGREEMENT) that would be
inconsistent with its obligations under this Agreement.
15.5 NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY THAT SP
PATENTS, COLLABORATION PATENTS OR LICENSED PATENTS ARE VALID OR ENFORCEABLE OR
THAT THEIR EXERCISE OR THE EXERCISE OF LICENSED TECHNOLOGY OR SP TECHNOLOGY DOES
NOT INFRINGE ANY PATENT RIGHTS OF THIRD PARTIES. A HOLDING OF INVALIDITY OR
UNENFORCEABILITY OF ANY SUCH PATENT, FROM WHICH NO FURTHER APPEAL IS OR CAN BE
TAKEN, SHALL NOT AFFECT ANY OBLIGATION HEREUNDER, BUT SHALL ONLY ELIMINATE
ROYALTIES OTHERWISE DUE UNDER SUCH PATENT FROM THE DATE SUCH HOLDING BECOMES
FINAL.
64
<PAGE>
15.6 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN HGS, SB and SP MAKE
NO REPRESENTATIONS OR EXTEND ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
15.7 Each party represents and warrants to the other parties hereto
that any materials provided by one party to another under this Agreement shall
be used in compliance with all applicable laws and regulations.
15.8 For the sole purpose of permitting SP to exercise its rights under
Paragraph 31.1, HGS and SB each hereby warrant and represent that after the
EFFECTIVE DATE they shall each, as applicable, promptly provide to SP (i) any
agreement entered into prior to the end of the INITIAL RESEARCH TERM with a
COLLABORATION PARTNER relating to LICENSED TECHNOLOGY, and any supplement or
amendment thereto entered into prior to the end of the INITIAL RESEARCH TERM
(ii) any agreement with a THIRD PARTY prior to the end of the INITIAL RESEARCH
TERM who is substituted for an existing COLLABORATION PARTNER in any agreement
and as a result becomes a COLLABORATION PARTNER, and (iii) any agreement prior
to the end of the INITIAL RESEARCH TERM that adds a COLLABORATION PARTNER,
provided that the aggregate of COLLABORATION PARTNERS shall be no more than four
(4) entities at any one time.
15.9 HGS hereby warrants and represents that to the extent any data
and/or information included within LICENSED TECHNOLOGY was obtained from The
Institute for Genomic Research (TIGR), TIGR has granted rights to HGS to all
such data and/or information.
65
<PAGE>
15.10 No claim can be made or shall exist with respect to a breach of
warranty, representation or covenant under Paragraph 15.1(a), (b), (d) and (e),
Paragraph 15.2(a), Paragraph 15.3 or 15.8 unless such claim is made prior to the
later of the end of the INITIAL RESEARCH TERM or EXTENDED TERM.
15.11 In the event that an agreement with a COLLABORATION PARTNER has a
publication provision which is more favorable to SP then Paragraph 10.7 of this
Agreement, then SP may substitute such more favorable publication provision for
Paragraph 10.7 by written notice to HGS and SB within sixty days of receipt
thereof.
16. INDEMNIFICATION
---------------
16.1 SP shall defend, indemnify and hold harmless HGS, SB, licensors of
HGS and SB, and each of their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages and
expenses (including reasonable attorneys' fees) as the result of claims,
demands, costs or judgments which may be made or instituted against any of them
arising out of the manufacture, possession, distribution, use, testing, sale or
other disposition of any SP PRODUCT by or through SP or any THIRD PARTY granted
rights by SP under this Agreement. Notwithstanding the foregoing, SP shall have
no obligation under this Agreement to defend, indemnify or hold harmless SB with
respect to claims, demands, costs or judgments arising out of the manufacture,
possession, distribution, use, testing, sale or other disposition of any SP
PRODUCT which is a CO-PROMOTION PRODUCT (as defined in the SP/SB AGREEMENT).
SP's obligation to defend, indemnify and hold harmless shall include claims,
demands, costs or judgments, whether for money damages or
66
<PAGE>
equitable relief by reason of alleged personal injury (including death) to any
person or alleged property damage, provided, however, the indemnity shall not
extend to any claims against an indemnified party which result from the gross
negligence or willful misconduct of such indemnified party. SP shall have the
exclusive right. to control the defense of any action which is to be indemnified
in whole by SP hereunder, including the right to select counsel reasonably
acceptable to HGS or SB, as the case may be, to defend HGS or SB, as the case
may be, and to settle any claim, provided that, without the written consent of
HGS or SB, as the case may be (which shall not be unreasonably withheld or
delayed), SP shall not agree to settle any claim against HGS or SB, as the case
may be, to the extent such claim has a material adverse effect on HGS or SB, as
the case may be. The provisions of this paragraph shall survive and remain in
full force and effect after any termination, expiration or cancellation of this
Agreement and the obligation hereunder shall apply whether or not such claims
are rightfully brought. SP shall require each licensee to agree to indemnify HGS
or SB, as the case may be, in a manner consistent with this paragraph.
16.2 HGS shall defend, indemnify and hold harmless SP, licensors of SP
and each of their respective directors, officers, shareholders, agents and
employees, from and against any and all liability, loss, damages and expenses
(including reasonable attorneys' fees) as the result of claims, demands, costs
or judgments which may be made or instituted against any of them arising out of
the manufacture, possession, distribution, use, testing, sale or other
disposition by or through HGS or any THIRD PARTY granted rights by HGS under
this Agreement of any PRODUCT in the HGS FIELD or the SP FIELD as to which HGS
is granted a license under an SP PATENT. HGS's obligation to defend, indemnify
and hold harmless shall include claims,
67
<PAGE>
demands, costs or judgments, whether for money damages or equitable relief by
reason of alleged personal injury (including death) to any person or alleged
property damage, provided, however, the indemnity shall not extend to any claims
against an indemnified party which result from the gross negligence or willful
misconduct of such indemnified party. HGS shall have the exclusive right to
control the defense of any action which is to be indemnified in whole by HGS
hereunder, including the right to select counsel reasonably acceptable to SP to
defend SP and to settle any claim, provided that, without the written consent of
SP (which shall not be unreasonably withheld or delayed), HGS shall not agree to
settle any claim against SP to the extent such claim has a material adverse
effect on SP. The provisions of this paragraph shall survive and remain in full
force and effect after any termination, expiration or cancellation of this
Agreement and HGS' obligation hereunder shall apply whether or not such claims
are rightfully brought. HGS shall require each licensee to agree to indemnify SP
in a manner consistent with this Paragraph 16.2.
16.3 A person or entity that intends to claim indemnification under
this Section 16 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any loss, claim, damage, liability, or action in respect of
which the Indemnitee intends to claim such indemnification, and the Indemnitor,
after it determines that indemnification is required of it, shall assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an Indemnitee shall have the right to retain its own counsel, with
the fees and expenses to be paid by the Indemnitor if Indemnitor does not assume
the defense; or, if representation of such Indemnitee by the counsel retained by
the Indemnitor would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other
68
<PAGE>
party represented by such counsel in such proceedings. The indemnity agreement
in this Section 16 shall not apply to amounts paid in settlement of any loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Indemnitor, which consent shall not be withheld unreasonably. The
failure to deliver notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Section 16, but the omission so to deliver notice to the Indemnitor will
not relieve it of any liability that it may have to any Indemnitee otherwise
than under this Section 16. The Indemnitee under this Section 16, its employees
and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigations of any action, claim or liability covered
by this indemnification. In the event that each party claims indemnity from the
other and one party is finally held liable to indemnify the other, the
Indemnitor shall additionally be liable to pay the reasonable legal costs and
attorneys' fees incurred by the Indemnitee in establishing its claim for
indemnity.
17. FORCE MAJEURE
-------------
17.1 If the performance of any party of this Agreement, or of any
obligation under this Agreement, is prevented, restricted, interfered with or
delayed by reason of any cause beyond the reasonable control of the party liable
to perform, unless conclusive evidence to the contrary is provided, the party so
affected shall, upon giving written notice to the other parties, be excused from
such performance to the extent of such prevention, restriction, interference or
delay, provided that the affected party shall use its reasonable best efforts to
avoid or remove such causes of non-performance and shall continue performance
with the utmost dispatch
69
<PAGE>
whenever such causes are removed. When such circumstances arise, the parties
shall discuss what, if any, modification of the terms of this Agreement may be
required in order to arrive at an equitable solution.
18. GOVERNING LAW
-------------
18.1 Except for disputes under Section 11 which will be governed by
Federal law and brought in the Federal District Court of Delaware, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to the conflict of laws provisions thereof and
the exclusive jurisdiction and venue of any action with respect to this
Agreement shall be in a state court of the State of Delaware. Each of the
parties hereto agrees to submit to the exclusive jurisdiction and venue of such
court for the purpose of any such action. Service of process in any such action
may be effected in the manner provided in Section 21 for delivery of notice or
in any other manner consistent with Delaware law. In the event that a state
court or Federal District Court of the State of Delaware holds that an action
cannot be brought and maintained in a state court or Federal District Court of
the State of Delaware, then such action may be brought in any court having
proper jurisdiction.
19. SEPARABILITY
------------
19.1 In the event any portion of this Agreement shall be held illegal,
void or ineffective, the remaining portions hereof shall remain in full force
and effect.
19.2 If any of the terms or provisions of this Agreement are in
conflict with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to
70
<PAGE>
the extent that they may conflict therewith and shall be deemed to be modified
to conform with such statute or rule of law.
19.3 In the event that the terms and conditions of this Agreement are
materially altered as a result of paragraphs 19.1 or 19.2, the parties will, in
good faith, renegotiate the terms and conditions of this Agreement to resolve
any inequities.
20. ENTIRE AGREEMENT
----------------
20.1 This Agreement, together with the Schedules, exhibits, Appendices
or other attachments hereto, entered into as of the date written above, as well
as the SP/SB AGREEMENT, constitutes the entire agreement between the parties
relating to the subject matter hereof and supersedes all previous writings and
understandings. No terms or provisions of this Agreement shall be varied or
modified by any prior or subsequent statement, conduct or act of either of the
parties, except that the parties may amend this Agreement by written instruments
specifically referring to and executed in the same manner as this Agreement.
21. NOTICES
-------
21.1 Any notice required or permitted under this Agreement shall be
hand-delivered or sent by express delivery service or certified or registered
mail, postage prepaid, or by fax with written confirmation by mail, to the
following addresses of the parties:
HGS
HUMAN GENOME SCIENCES, INC.
Suite 300
9410 Key West Avenue
Rockville, Maryland 20850
Attention: Chief Executive Officer
(Fax #301-309-8512)
71
<PAGE>
copy to:
Mr. Elliot Olstein
Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart
& Olstein
6 Becker Farm Road
Roseland, New Jersey 07068
(Fax #201-994-1744)
SP
SCHERING CORPORATION
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attention: Vice President, Business Development
(Fax #: 908-298-5379)
cc: Director of Licensing
(Fax #: 908-298-2739)
and
SCHERING-PLOUGH LTD.
Toepferstrasse 5
CH-6004 Lucerne
Switzerland
Attention: President
(Fax # 41 41 4181626)
SB
SmithKline Beecham Corporation
709 Swedeland Road
King of Prussia, PA 19406
Attention: Vice President, ATG
(Fax # 610-270-6663)
21.2 Any notice required or permitted to be given concerning this
Agreement shall be effective upon receipt by the party to whom it is addressed.
22. ASSIGNMENT
----------
72
<PAGE>
22.1 This Agreement and the licenses herein granted shall be binding
upon and inure to the benefit of the assignees and successors in interest of the
respective parties. Neither this Agreement nor any interest hereunder shall be
assignable by a party without the written consent of the other parties and any
attempted assignment contrary to this paragraph shall be void and without force
and effect provided, however, that a party may assign this Agreement or any of
its rights or obligations hereunder to any AFFILIATE or to any THIRD PARTY with
which it may merge or consolidate, or to which it may transfer all or
substantially all of its assets to which this Agreement relates, without
obtaining the consent of the other party, provided that the assigning party
remains liable under this Agreement and that the THIRD PARTY assignee or
surviving entity assumes in writing all of its obligations under this Agreement.
23. RECORDING
---------
23.1 SP, SB and HGS each shall have the right, at any time, to record,
register, or otherwise notify this Agreement in appropriate governmental or
regulatory offices anywhere in the TERRITORY, and HGS, SB or SP, as the case may
be, shall provide reasonable assistance to the other in effecting such
recording, registering or notifying.
23.2 The parties acknowledge that this Agreement may be notified to the
European Community for compliance with applicable laws.
24. COUNTERPARTS
------------
73
<PAGE>
24.1 This Agreement may be executed in any number of counterparts, and
each such counterpart shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.
25. WAIVER.
-------
25.1 Any delay or failure in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, nor operate to bar the exercise or enforcement
thereof at any time or times thereafter, excepting only as to an express written
and signed waiver as to a particular matter for a particular period of time.
25.2 Notwithstanding the foregoing, in the event SP challenges whether
any payments contemplated hereunder (including, without limitation, upfront
payments, royalties or milestones) is due, it shall have the right to make such
payments under protest (reserving all rights hereunder) pending resolution of
such dispute.
26. INDEPENDENT RELATIONSHIP.
-------------------------
26.1 Nothing herein contained shall be deemed to create an employment,
agency, joint venture or partnership relationship between the parties hereto or
any of their agents or employees, or any other legal arrangement that would
impose liability upon one party for the act or failure to act of the other
party. No party shall have any power to enter into any contracts or commitments
or to incur any liabilities in the name of, or on behalf of, the other parties,
or to bind the other parties in any respect whatsoever.
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<PAGE>
27. EXPORT CONTROL.
---------------
27.1 This Agreement is made subject to any restrictions concerning the
export of products or technical information from the United States of America
which may be imposed upon or related to HGS or SP or SB from time to time by the
government of the United States of America. Furthermore, SP agrees that it will
not export, directly or indirectly, any technical information acquired from HGS
or SB under this Agreement or any products using such technical information to
any country for which the United States government or any agency thereof at the
time of export requires an export license or other governmental approval,
without first obtaining the written consent to do so from the Department of
Commerce or other agency of the United States government when required by an
applicable statute or regulation.
28. CHANGE OF CONTROL.
------------------
28.1 In the event that a "Change of Control" causes HGS' rights and
obligations hereunder to pass to a "Major Pharmaceutical Company" (as defined
below) then such Major Pharmaceutical Company shall set up appropriate
procedures to ensure that RESEARCH PLANS submitted by SP are not used for
purposes other than those of Section 7 and 8 of this Agreement. SP shall have
the right, at its expense,through its own designated experts or like person
reasonably acceptable to such Major Pharmaceutical Company, to examine HGS'
records relating to such procedures to verify and report to SP that such Major
Pharmaceutical Company has complied with such procedures. Such examination shall
occur during regular business hours upon proper advance written notice during
the life of this Agreement and for six (6) months after its termination,
provided, however, that such examination shall not take place more often than
75
<PAGE>
once a year and not later than forty-five (45) days after written request is
made and provided, further, that such expert executes customary confidentiality
agreements prior to any such audit satisfactory in form and substance to such
Major Pharmaceutical Company, to maintain in confidence all information obtained
during the course of any such audit except for disclosure to SP as necessary for
the above purpose.
As used herein "Change of Control" shall mean (i) any merger,
reorganization, consolidation or combination in which HGS is not the surviving
corporation, (ii) any "person" (within the meaning of Section 13(d) and Section
14(d)(2) of the Securities Exchange Act of 1934), excluding SP and/or its
AFFILIATES, is or becomes the beneficial owner, directly or indirectly, of
securities of HGS representing 50% or more of either (a) the then-outstanding
shares of common stock of HGS or (b) the combined voting power of HGS'
then-outstanding voting securities; or (iii) approval by the shareholders of HGS
of a complete liquidation or the complete dissolution of HGS.
As used herein the term "Major Pharmaceutical Company" means any entity
(including any corporation, joint venture, partnership or unincorporated
entity), as well as any AFFILIATES or division(s) of such entity, that is
engaged in the research, development, manufacturing, registration and/or
marketing of drug products that are approved under NDAs, HRDs, ANDAs, Product
License Applications (including without limitation any entity that is a member
of PhRMA). "Major Pharmaceutical Company" shall also mean any entity which,
through or following a Change of Control, at any time would either itself meet
the definition of "Major Pharmaceutical Company" in the prior sentence or would
be an AFFILIATE of any entity which is or would meet such definition.
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<PAGE>
29. ARBITRATION.
------------
29.1 Any matter or disagreement which is subject to arbitration under
Section 7 which has not been resolved within twenty (20) days, at SP's option,
shall be submitted to a mutually selected single arbitrator to so decide any
such matter or disagreement. The arbitrator shall conduct the arbitration in
accordance with the Rules of the American Arbitration Association, unless the
parties agree otherwise. If the parties are unable to mutually select an
arbitrator, the arbitrator shall be selected in accordance with the procedures
of the American Arbitration Association. The decision and award rendered by the
arbitrator shall be final and binding. Judgment upon the award may be entered in
any court having jurisdiction thereof. Any arbitration pursuant to this section
shall be held in Washington, D.C., or such other place as may be mutually agreed
upon in writing by the parties.
30. GUARANTEE
---------
30.1 Schering Corporation and Schering Plough Ltd. jointly and
severally guarantee that their respective AFFILIATES will perform all
obligations under this Agreement as if the AFFILIATES were signatories of this
Agreement.
30.2 SmithKline Beecham Corporation and SmithKline Beecham, plc,
jointly and severally guarantee that their respective AFFILIATES will perform
all obligations under this Agreement as if the AFFILIATES were signatories of
this Agreement.
31. MOST FAVORED LICENSEE.
----------------------
77
<PAGE>
31.1 In the event that prior to the EFFECTIVE DATE and/or during the
INITIAL RESEARCH TERM, HGS or SB, as applicable, enters into any agreement set
forth in Paragraph 15.8 then SP may, within sixty (60) days of SP's receipt from
HGS or SB, as the case may be, of a full, complete and correct copy of such
agreement, elect to substitute all material terms of any such agreement for the
material terms of this Agreement. HGS and/or SB, as the case may be, agree to
make representatives who are knowledgeable as to the terms and conditions of any
such agreement available to discuss such terms and conditions with
representatives of SP in order to permit SP to fairly determine whether or not
to exercise such option.
32. FURTHER ACTIONS
---------------
32.1 Each party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be necessary or appropriate
in order to carry out the purposes and intent of this Agreement.
78
<PAGE>
IN WITNESS WHEREOF, the parties, through their authorized officers, have
executed this Agreement as of the date first written above.
SCHERING CORPORATION SCHERING-PLOUGH LTD.
BY:________________________ BY:_________________
Title:_____________________ Title:
HUMAN GENOME SCIENCES, INC.
BY:_______________________
Title:____________________
SMITHKLINE BEECHAM CORPORATION
BY:_______________________
Title:____________________
SMITHKLINE BEECHAM, plc
BY:_______________________
Title:____________________
79
<PAGE>
INDEX
1. DEFINITIONS......................................................... 2
-----------
2. SB AND HGS AND SP GRANTS AND COVENANTS..............................14
--------------------------------------
3. PAYMENTS AND ROYALTIES..............................................21
----------------------
4. RESEARCH TERM AND RESEARCH PLANS....................................27
--------------------------------
5. ADDITIONAL PAYMENTS ................................................29
-------------------
6. TECHNOLOGY TRANSFER AND ADDITIONAL LICENSED TECHNOLOGY..............29
------------------------------------------------------
7. THERAPEUTIC PROTEINS................................................34
--------------------
8. PRODUCT DEVELOPMENT.................................................41
-------------------
9. SP CO-RIGHTS........................................................41
------------
10. CONFIDENTIALITY.....................................................44
---------------
11. PATENT PROSECUTION AND LITIGATION...................................47
---------------------------------
12. STATEMENTS AND REMITTANCES..........................................56
--------------------------
13. TERM AND TERMINATION................................................58
--------------------
14. RIGHTS AND DUTIES UPON TERMINATION .................................61
----------------------------------
15. WARRANTIES AND REPRESENTATIONS ....................................62
------------------------------
16. INDEMNIFICATION.....................................................66
---------------
17. FORCE MAJEURE.......................................................69
-------------
18. GOVERNING LAW ......................................................70
-------------
19. SEPARABILITY........................................................70
------------
20. ENTIRE AGREEMENT....................................................71
----------------
21. NOTICES.............................................................71
-------
22. ASSIGNMENT..........................................................72
----------
<PAGE>
23. RECORDING...........................................................73
---------
24. COUNTERPARTS........................................................73
------------
25. WAIVER..............................................................74
-------
26. INDEPENDENT RELATIONSHIP............................................74
-------------------------
27. EXPORT CONTROL......................................................75
---------------
28. CHANGE OF CONTROL...................................................75
-----------------
29. ARBITRATION.........................................................77
-----------
30. GUARANTEE...........................................................77
---------
31. MOST FAVORED LICENSEE...............................................77
---------------------
32. FURTHER ACTIONS.....................................................78
---------------
<PAGE>
Appendix B
----------
Takeda Chemical Industries, Ltd.
Merck KGaA
Synthelabo.
<PAGE>
Appendix F
----------
I. Database and analysis server supplied by SP:
1. Multi-processor Unix Host (DEC Alpha server or equivalent)
2. Unix system software
2.1. Sybase SQL Server
2.2. Sybase Open Client Libraries
2.3. Sybase Replication Server
2.4. C compiler
2.5. TCP/IP networking services
2.6. Electronic mail facilities
2.7. Backup/recovery equipment and software
II. Macintosh client machines supplied by SP:
1. Quadra or PowerMac models
2. Minimum 8MB of RAM; 16MB recommended
3. Minimum 14-inch color monitor; 17-inch recommended for active
users
4. MB of available disk space
5. TCP/IP network connection
III. Network connectivity supplied by SP:
1. Installation and maintenance of dedicated circuit (at least 56
Kbps)
2. Encryption equipment
3. CSU/DSU line terminating equipment
4. Network router interface
IV. Macintosh client software supplied by HGS:
1. IRIS bioinformatics application
2. HGS BLAST Client
3. HGS HyperEntrez
4. Unix command client
5. PSEM (Protein structure evaluation module)
V. Server software supplied by HGS:
1. Components derived from the public domain are indicated; HGS
will install and configure the public domain software, but
cannot provide a warranty for its performance.
2. Database schema, stored procedures, triggers:
<PAGE>
a) Unix command client
b) Data management utilities
c) BLAST sequence searching software (public domain)
d) FASTA sequence searching software (public domain)
e) BLOCKS motif searching software (public domain)
VI. Services provided by HGS:
1. Setup of SP database schema
2. Testing of network and system components on SP equipment
3. Development of on-going data transfer mechanism
4. Training for end users of the Iris application
5. Training for technical people in system administration and
troubleshooting
6. Assistance developing customer analyses and reports
7. Telephone and e-mail support for the database and related
applications
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<DESCRIPTION>GENE THERAPY COLLABORATION AND LICENSE AGREEMENT
<TEXT>
"Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by [***], have been
separately filed with the Commission."
GENE THERAPY COLLABORATION AND LICENSE
AGREEMENT This Agreement ("Agreement"), effective as of the 28th of June,
1996 (the "EFFECTIVE DATE"), by and among Human Genome Sciences, Inc., a
corporation organized under the laws of the State of Delaware, United States of
America, having a place of business at 9410 Key West Avenue, Rockville, Maryland
20850, for itself and its AFFILIATES, as defined below (collectively including
such AFFILIATES "HGS"), and Schering Corporation, a corporation organized under
the laws of the State of New Jersey, United States of America, having a place of
business at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033, and Schering
Plough Ltd., a Swiss corporation having its principal place of business at
Toepferstrasse 5, CH-6004 Lucerne, Switzerland, each for itself and its
AFFILIATES, as defined below (collectively including such AFFILIATES "SP").
WITNESSETH THAT:
----------------
WHEREAS HGS is in possession of certain human gene sequence information and
has the capacity and ability to rapidly obtain full or meaningful partial
sequence data for expressed human genes,
WHEREAS SP is a multinational human healthcare company which has the
capacity and ability to develop practical applications in the human healthcare
field of the gene sequence data in the possession of or within the capacity and
ability of HGS to obtain.
WHEREAS HGS and SP wish to collaborate to discover human and/or animal
therapeutic products based on human genomic information for use in gene therapy.
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NOW, THEREFORE, in consideration of the covenants and obligations expressed
herein, and intending to be legally bound, and otherwise to be bound by proper
and reasonable conduct, the parties agree as follows:
1. DEFINITIONS
-----------
1.1 "AFFILIATES" shall mean any individual or entity directly or
indirectly controlling, controlled by or under common control with, the
specified individual or entity. For purposes of this Agreement, the direct or
indirect ownership of over fifty percent (50%) of the outstanding voting
securities of an entity, or the right to receive over fifty (50%) of the profits
or earnings of an entity shall be deemed to constitute control. Such other
relationship as in fact gives such individual or entity the power or ability to
control the management, business and affairs of an entity shall also be deemed
to constitute control.
1.2 "ANTISENSE" shall mean inhibiting or preventing in vivo expression
in a human or animal of a gene product by use of an oligonucleotide or modified
oligonucleotide which binds to RNA or DNA and prevents and/or impairs expression
of the gene product.
1.3 "DIAGNOSTICS" shall mean any product, process, substance,
composition or service intended to predict, detect or identify a disease or
determine the presence of a pathologic condition in a human.
1.4 "DISCOVERED" shall mean with respect to any product, process,
substance, composition or service, the earlier of the following events (i) the
specific disclosure of such product, process, substance, composition or service
in a patent application filed by the discovering party or (ii) the specific
disclosure of such product, process, substance, composition
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or service by the discovering party in a written document (including, but not
limited to, laboratory notebooks) other than a filed patent application.
1.5 "EFFECTIVE DATE" shall mean June 28, 1996.
1.6 "EXCLUSIVE SP PRODUCT" means an SP PRODUCT in the FIELD as to which
SP has exercised an option under Paragraph 2.5 and been granted a license under
Paragraph 2.3.
1.7 "EXTENDED TERM" shall mean the additional period defined in
Paragraph 4.2.
1.8 "FIELD" shall mean the intervention treatment and/or prevention of
disease in humans and animals by GENE THERAPY and excluding GENE THERAPY
VACCINES, except as provided in Section 2.4(c), and shall also include ANTISENSE
for each SP PRODUCT as to which a license is granted under Paragraph 2.10. For
the avoidance of doubt, in the event an SP PRODUCT has both therapeutic and
DIAGNOSTIC use, the therapeutic use of such SP PRODUCT shall be included in the
FIELD.
1.9 "GENE" shall mean a human gene or a portion thereof or cDNA
corresponding thereto.
1.10 "GENE THERAPY" shall mean treatment or prevention of a disease, or
remedying a gene deficiency of humans or animals by genetic modification of
somatic cells (in vivo, in vitro or ex vivo) with DNA (RNA) for the purpose of
expressing a protein or oligo(poly)nucleotide encoded by said DNA (RNA) in a
human or animal.
1.11 "GENE THERAPY VACCINE" shall mean a substance that achieves a
therapeutic or prophylactic effect by inducing an antigen-specific humoral
and/or cellular immune system response by GENE THERAPY.
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1.12 "HGS FIELD" shall mean (i) ANTISENSE and (ii) biotransformation of
a chemical to prepare pharmaceutically active agents for human or animal use, or
intermediates therefor, which active agents were DISCOVERED before the EFFECTIVE
DATE, and (iii) DIAGNOSTICS.
1.13 "INITIAL RESEARCH TERM" shall mean the term beginning on the
EFFECTIVE DATE and ending five (5) years from the EFFECTIVE DATE.
1.14 "LICENSED PATENT(S)" shall mean all patents and patent
applications to the extent that they claim LICENSED TECHNOLOGY, which are or
become owned by HGS or to which HGS otherwise has, now or in the future, the
right to grant licenses. Included within the definition of LICENSED PATENTS are
all continuations, continuations-in-part, divisions, patents of addition,
reissues, renewals, registrations, confirmations, re-examinations or extensions,
and any provisional applications thereof and all SPCs.
1.15 "LICENSED TECHNOLOGY" shall mean, the following which is provided
to SP by or on behalf of HGS: (a) sequence data with respect to human DNA (and
the corresponding clones) and expression products thereof in each case developed
by or on behalf of HGS prior to or during the INITIAL RESEARCH TERM, (b)
information on biological function of GENES developed by or on behalf of HGS
prior to the INITIAL RESEARCH TERM, (c) HGS clones, cell lines and vectors and
all information and data provided to SP pursuant to Section 5 and (d) SOFTWARE.
1.16 "MAJOR MARKET" means the United States, Canada, Germany, United
Kingdom, France, Italy or Japan.
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1.17 "NET SALES" shall mean proceeds actually received from sales of SP
PRODUCT (calculated on a SP PRODUCT by SP PRODUCT basis) by SP or, except as
provided below, its respective licensees, distributors trading on SP's account
or joint ventures or other associated companies, less deductions for (i)
transportation, shipping and postage charges, including transportation insurance
and customs duties to the extent separately invoiced; (ii) sales and excise
taxes and duties paid or allowed by a selling party and any other governmental
charges imposed upon the production, importation, use or sale of such SP PRODUCT
(including value added taxes or other governmental charges otherwise measured by
the billing amount when included in billing); (iii) normal and customary trade,
quantity and cash discounts allowed and charge back payments and rebates granted
to managed health care organizations or to federal, state and local governments,
their agencies and purchasers and reimbursees, including but not limited to
Medicaid rebates or to trade customers, including but not limited to
wholesalers, chain and pharmacy buying groups; (iv) rebates (or equivalents
thereof) granted to or charged by national, state or local government
authorities in countries other than the United States; and (v) allowances or
credits to customers on account of rejection or return of such product or on
account of retroactive price reductions affecting such SP PRODUCT. Sales between
or among SP and its licensees, distributors trading on SP's account, or joint
ventures or other associated companies shall be included within NET SALES only
if such purchaser is an end-user of the SP PRODUCT. Otherwise, NET SALES shall
only include the subsequent, final sales to THIRD PARTIES.
1.18 "PROOF OF EFFICACY" shall mean proof of therapeutic effectiveness
in a Phase II(a) Clinical Test based on biostatistical methods, that supports a
determination to proceed
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with expanded controlled clinical trials. "Phase II(a) Clinical Test" shall mean
a well-controlled clinical study conducted to evaluate the effectiveness of the
drug for a particular indication or indications in patients with the disease or
condition under study and to determine the common short-term side effects and
risks associated with the drug.
1.19 "RESEARCH PLAN" shall mean a plan for research and development of
an EXCLUSIVE SP PRODUCT in the FIELD which includes, at a minimum, scientific
data, research and development efforts, research and development milestones, and
is sufficient to reasonably monitor diligence of research/development of such
EXCLUSIVE SP PRODUCT. A representative example of such a plan is shown in
Appendix A.
1.20 "RESEARCH TERM" shall mean the INITIAL RESEARCH TERM and the
EXTENDED TERM, if any.
1.21 "SOFTWARE" shall mean software (together with the source code
therefor and maintenance files and "Documentation" as defined below) designed
and developed by HGS prior to or during the INITIAL RESEARCH TERM for analysis
of sequence data with respect to human DNA and expression products thereof,
including, without limitation, the specific software modules set forth in the
attached Appendix B. "Documentation" shall include all operating and user
manuals, training materials guides, listings, specifications and other material
used with the SOFTWARE.
1.22 "SP PATENT(s)" shall mean all patents and patent applications to
the extent that they claim SP TECHNOLOGY, which are or become owned by SP or to
which SP otherwise has, now or in the future, the right to grant licenses.
Included within the definition of SP PATENTS are all continuations,
continuations-in-part, divisions, patents of addition, reissues,
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renewals, extensions, registrations, confirmations, re-examinations, and any
provisional applications and all SPCs.
1.23 "SP PRODUCT(S)" shall mean any product, process, substance,
composition or service in the FIELD which (i) is based on the use of or derived
by use of LICENSED TECHNOLOGY and/or SP TECHNOLOGY and/or (ii) is covered by a
LICENSED PATENT and/or claim of an SP PATENT which claims SP TECHNOLOGY.
Notwithstanding the previous sentence, an incidental or immaterial use of
LICENSED TECHNOLOGY and/or SP TECHNOLOGY shall not cause a product, process,
substance, composition or service to become an SP PRODUCT. Appendix C contains
representative examples of material and incidental or immaterial use, but is not
intended by the parties to be an exhaustive list of such uses.
1.24 "SP TECHNOLOGY" shall mean:
(i) peptides and/or polypeptides, and/or polynucleotides and/or the
sequences thereof which are based on use of and/or which are derived by use of
LICENSED TECHNOLOGY by or on behalf of SP.
(ii) products or potential products in the FIELD which are based on use
of and/or derived from use of item (i) and/or LICENSED TECHNOLOGY by or on
behalf of SP;
(iii) biological information developed by or on behalf of SP
specifically related to item (i) and/or item (ii);
Items (i) through (iii) are included as SP TECHNOLOGY only to the
extent they are obtained or derived by or on behalf of SP after the EFFECTIVE
DATE and before four years after the end of the RESEARCH TERM. Notwithstanding
the above, an incidental or immaterial use of LICENSED TECHNOLOGY and/or SP
TECHNOLOGY shall not cause data,
7
<PAGE>
substances, materials, know-how, inventions or information to become SP
TECHNOLOGY. Appendix C contains representative examples of material and
incidental or immaterial use, but is not intended by the parties to be an
exhaustive list of such uses.
SP TECHNOLOGY shall not include technology developed by or on behalf of
SP, or otherwise acquired by SP, which relates to vectors, gene expression
delivery technologies, processes for propagation, purification, storage and
characterization, etc.
1.25 "SPC" shall mean a right based upon an underlying patent such as a
Supplementary Protection Certificate.
1.26 "TERRITORY" shall mean all the countries and territories in the
world.
1.27 "THERAPEUTIC AGREEMENT" shall mean that certain Therapeutic
Collaboration and License Agreement effective as of the EFFECTIVE DATE as to
which SP and HGS are parties.
1.28 "THERAPEUTIC PROTEIN" shall mean a polypeptide derived from a GENE
(excluding antibodies) which is potentially useful for the treatment or
prevention of a disease or disorder in humans.
1.30 "THIRD PARTY(IES)" shall mean any party other than a party to this
Agreement or an AFFILIATE of SP or HGS.
2. GRANTS AND COVENANTS
--------------------
2.1 Subject to the terms and conditions of this Agreement, HGS grants
to SP a non-exclusive, non-transferable, worldwide license under LICENSED
TECHNOLOGY and LICENSED PATENTS to perform research and development in the FIELD
(and ANTISENSE
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research and development with respect to EXCLUSIVE SP PRODUCTS) during the
RESEARCH TERM.
2.2 Subject to the terms and conditions of this Agreement, HGS grants
to SP an exclusive, non-transferable, worldwide license under LICENSED
TECHNOLOGY and LICENSED PATENTS to perform research and development in the FIELD
after the RESEARCH TERM with respect to an EXCLUSIVE SP PRODUCT (and ANTISENSE
research and development with respect to EXCLUSIVE SP PRODUCTS).
2.3 Subject to the terms and conditions of this Agreement, HGS grants
to SP an exclusive worldwide license under LICENSED TECHNOLOGY and LICENSED
PATENTS to make, have made, use, import, export, offer to sell and sell
EXCLUSIVE SP PRODUCTS in the FIELD.
2.4 (a) During and after the RESEARCH TERM, SP agrees to use SP
TECHNOLOGY and SP PATENTS only in the FIELD. After the RESEARCH TERM, the use of
SP TECHNOLOGY to the extent available to the general public through publications
made by THIRD PARTIES independent of SP shall not be a breach of this Paragraph
2.4.
(b) During and after the RESEARCH TERM, SP agrees to use LICENSED
TECHNOLOGY and LICENSED PATENTS only as licensed and permitted hereunder. After
the RESEARCH TERM, (i) an incidental or immaterial use of LICENSED TECHNOLOGY
and/or (ii) the use of LICENSED TECHNOLOGY to the extent available to the
general public and to the extent not covered by a granted LICENSED PATENT shall
not be a breach of this Paragraph 2.4.
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(c) HGS agrees that the FIELD shall include GENE THERAPY
VACCINES to the extent that HGS has the right as of the EFFECTIVE DATE to
include GENE THERAPY VACCINES in the FIELD. No additional fee will be due for
inclusion of GENE THERAPY VACCINES in the FIELD.
(d) The license granted under this Agreement with respect to
SOFTWARE is limited to SOFTWARE which is (i) owned by HGS and/or (ii) is owned
or licensed by a THIRD PARTY and licensed to HGS which license to HGS includes
the right to grant sublicenses. To the extent that acceptance of the license
granted under this Agreement to SOFTWARE would obligate SP or HGS to pay
royalties and/or license fees to a THIRD PARTY based solely upon SP's use of
SOFTWARE owned or licensed by said THIRD PARTY and sublicensed to SP by HGS, SP
shall, in its sole discretion elect to (i) accept the SOFTWARE in its entirety
and pay all such royalties and/or licensee fees, (ii) obtain a direct license
from the THIRD PARTY owner of the SOFTWARE, or (iii) accept the SOFTWARE with
the exception of the THIRD PARTY SOFTWARE for which royalties and/or license
fees would have been due. To the extent that SOFTWARE includes software owned or
licensed by THIRD PARTIES which is not sublicensable by HGS, HGS will promptly
provide written notice to SP identifying all such software and its owner, and SP
acknowledges and agrees that it must obtain the necessary license(s) prior to
using any such software.
2.5 HGS hereby grants to SP a non-exclusive option to obtain an
exclusive license under Paragraph 2.3. Each SP PRODUCT for which SP is granted
such license shall become an EXCLUSIVE SP PRODUCT.
10
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
During the RESEARCH TERM such option may be exercised at any
time and from time to time by written notice by SP to HGS and such exclusive
license will only be granted if HGS has not previously granted a license to a
THIRD PARTY as permitted by Paragraph 2.11 and/or HGS has not previously begun
to develop a product in the FIELD which is "essentially the same" as such SP
PRODUCT. For purposes of this Agreement the term "essentially the same" means
that the sequence of nucleotides comprising the gene incorporated in a product
for GENE THERAPY licensed to a third party, or under development by HGS, is at
least seventy-five percent (75%) homologous to such SP PRODUCT. In the event
that HGS indicates to SP that HGS has previously begun to develop a product in
the FIELD which is essentially the same as such SP PRODUCT, within sixty (60)
days thereafter SP shall have the right to notify HGS that SP at its cost and
expense will have an independent THIRD PARTY reasonably acceptable to HGS
inspect HGS' records with respect thereto solely for the purpose of verifying
that HGS has previously begun such development. HGS shall permit such
independent THIRD PARTY to effect such inspection within a reasonable time after
such notification provided that such THIRD PARTY signs an agreement of
confidentiality acceptable to HGS which includes a covenant that the only
information which will be provided to SP is whether or not HGS has in fact begun
such development.
For each EXCLUSIVE SP PRODUCT for which the license is
granted, at the time the option is exercised, SP shall pay to HGS the following
amounts :
(i) For the first two EXCLUSIVE SP PRODUCTS, [***].
(ii) For the third EXCLUSIVE SP PRODUCT - [***].
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(iii) For the fourth EXCLUSIVE SP PRODUCT and each one
thereafter - [***].
SP shall provide HGS with a RESEARCH PLAN for each EXCLUSIVE SP PRODUCT
at the time the license is granted.
2.6 In the event that an SP PRODUCT is DISCOVERED after the RESEARCH
TERM for which royalties are due to HGS under this Agreement, SP may request in
writing that HGS grant a non-exclusive license in the FIELD under LICENSED
PATENTS covering such SP PRODUCT to develop, make, have made, use, import,
export, offer to sell and sell such SP PRODUCT. HGS shall grant such a license,
to the extent that it has the ability to do so, provided, however, that HGS can
refuse to grant the license if, at the time of receipt of the request from SP,
HGS has an ongoing program of research and development for a product which is
"essentially the same" as such SP PRODUCT. SP shall have a right to inspect as
provided in Paragraph 2.5.
2.7 Except as permitted under Section 7, SP agrees not to grant to any
THIRD PARTY (IES) any rights or licenses in or to an SP PRODUCT until SP has
established PROOF OF EFFICACY for such SP PRODUCT.
2.8 The rights and licenses granted to SP by HGS under this Agreement
and rights to SP TECHNOLOGY and SP PATENTS are licensable and/or transferable by
SP to a THIRD PARTY only with respect to an SP PRODUCT, and only pursuant to an
Agreement by which SP grants a license to a THIRD PARTY to an SP PRODUCT as
permitted under Paragraph 2.7 or as permitted under Section 7 and in which the
THIRD PARTY (IES) agree(s) to covenants and obligations which limit the use of
SP PRODUCTS, LICENSED TECHNOLOGY,
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
LICENSED PATENTS, SP TECHNOLOGY and SP PATENTS which are essentially identical
to the covenants and obligations of SP to HGS under this Agreement.
2.9 Subject to the terms and conditions of this Agreement, SP grants
to HGS a non-exclusive, worldwide royalty-free license (with the right to
sublicense) under SP PATENTS to make, have made, use and sell any and all
products in the HGS FIELD. To the extent that HGS has granted SP a license with
respect to an SP PRODUCT for ANTISENSE pursuant to Paragraph 2.10 the HGS FIELD
shall not include ANTISENSE for such SP PRODUCT.
2.10 In the event that SP desires to extend the licenses under
LICENSED TECHNOLOGY and/or LICENSED PATENT(S) to the field of ANTISENSE with
respect to the DNA (RNA) or gene product of an EXCLUSIVE SP PRODUCT, HGS will
grant such a license to SP, to the extent that HGS has the right to grant such a
license, and HGS has not previously begun to develop a product against DNA (RNA)
which is essentially the same as DNA (RNA) to which SP desires a license
extension. SP shall have a right to inspect in this respect as set forth in
Paragraph 2.5. It is expressly understood, however, that HGS is under no
obligation to maintain the ability to grant such a license to SP. With respect
to each SP PRODUCT for which a license is granted pursuant to this Paragraph
2.10, such SP PRODUCT will be subject to the milestone payments and royalties
provided in this Agreement, but shall not be subject to any additional license
fee.
2.11 (a) The parties acknowledge and agree that HGS may in the future
add additional collaboration partners for GENE THERAPY by entering into similar
Gene Therapy Collaboration and License Agreements with one or more THIRD
PARTIES, provided, however, that there shall at no time be more than [***]
parties (inclusive of SP) collaborating on GENE
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
THERAPY with HGS. To the extent that HGS enters into such an agreement or any
amendment or supplement thereto, then SP may, within sixty (60) days of SP's
receipt from HGS of a full, complete and correct copy of such agreement,
amendment or supplement elect to substitute all material terms of any such
agreement for the material terms of this Agreement. HGS agrees to make
representatives who are knowledgeable as to the terms and conditions of any such
agreement available to discuss such terms and conditions with representatives of
SP in order to permit SP to fairly determine whether or not to exercise such
option. Nothing in this Paragraph 2.11(a) and subject to Paragraph 2.11(b) is to
be construed as limiting HGS' ability to grant to THIRD PARTIES licenses to
specific genes.
(b) In the event that during the RESEARCH TERM HGS desires to
offer a license to a THIRD PARTY in the FIELD with respect to a specific GENE,
HGS shall notify SP in writing that such GENE is available to SP for licensing
as an EXCLUSIVE SP PRODUCT in the FIELD and SP shall have thirty (30) days after
such notice to exercise the option granted to SP under Paragraph 2.5 with
respect to such GENE. If SP fails to exercise the option within such thirty (30)
day period, HGS shall have the right to grant licenses to a THIRD PARTY(IES)
with respect to such GENE in the FIELD.
3. PAYMENTS AND ROYALTIES
----------------------
3.1 (a) SP agrees to pay to HGS as an upfront fee an amount equal to
[***] which shall be due and payable in five equal payments of [***] with the
first payment being due and payable ten (10) days after the EFFECTIVE DATE and
each of the second through fifth payments being due and payable on the first
through fourth anniversaries of the EFFECTIVE DATE,
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
respectively. All payments to be made hereunder shall be by wire transfer of
immediately available funds to an account designated by HGS.
(b) In the event that any payment due and payable under
Paragraph 3.1(a) is not paid when due and payable and remains unpaid for a
period of thirty (30) days after written notice by HGS to SP of such failure, or
if this Agreement is terminated by HGS, pursuant to Section 10 hereof, then all
amounts which are to be paid under Paragraph 3.1(a) which have not been paid
shall become immediately due and payable at the end of such thirty (30) day
period.
3.2 (a) Subject to Paragraphs 3.3 and 3.5, SP shall pay to HGS the
following royalties on NET SALES of each SP PRODUCT sold by SP or its respective
licensees, distributors trading on SP's account or joint ventures or other
associated companies, which royalty shall be calculated on a SP PRODUCT by SP
PRODUCT basis, with the applicable royalty rate for each SP PRODUCT in a
calendar year being based on worldwide sales for such SP PRODUCT in the calendar
year and this determined royalty rate being applied to all worldwide NET SALES
of such SP PRODUCT in such calendar year.
Calendar Year Net Sales Royalty On
(U.S. Dollars in Millions) SP Product
[***] [***]
[***] [***]
[***] [***]
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
By way of example and for avoidance of doubt, if an SP PRODUCT, shall
have applicable worldwide NET SALES in a calendar year of [***], then the
royalty rates and royalties owed shall be [***] on all NET SALES of such SP
PRODUCT.
(b) SP's royalty obligations to HGS with respect to SP
PRODUCTS (as defined herein) are solely as set forth in this Paragraph 3.2 and
no additional royalty obligations shall be incurred for sales of SP PRODUCTS
under any other agreements between the parties, including the THERAPEUTIC
AGREEMENT relating to SP DRUG PRODUCTS, SP ANTIBODY PRODUCTS and SP PROTEIN
PRODUCTS in each case as defined in the THERAPEUTIC AGREEMENT.
(c) There shall be no royalty or milestone obligations for SP
PRODUCTS where SP independently identifies 95-100% of the full length gene
sequence (start to stop codon in cDNA) without use of LICENSED TECHNOLOGY or SP
TECHNOLOGY provided the SP PRODUCT does not infringe a claim of a granted
LICENSED PATENT.
(d) If an SP PRODUCT is not covered by a claim of a LICENSED
PATENT, HGS shall not receive royalties for SP PRODUCTS DISCOVERED more than
four (4) years after the end of the RESEARCH TERM.
No royalty shall be due for an SP PRODUCT (i) which is DISCOVERED after
the end of the RESEARCH TERM and (ii) which is not an EXCLUSIVE SP PRODUCT and
(iii) which is an SP PRODUCT only as a result of the use of unpatented LICENSED
TECHNOLOGY after the RESEARCH TERM which, at the time of use, is generally
available to the public, or SP TECHNOLOGY developed after the RESEARCH TERM
which is SP TECHNOLOGY only as
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
a result of use of unpatented LICENSED TECHNOLOGY which is generally available
to the public at the time of such use.
3.3 (a) With respect to any SP PRODUCT in any country in any calendar
year, in the event that SP also owes royalties to a THIRD PARTY for such SP
PRODUCT in such country for such calendar year and the royalties actually owed
to such THIRD PARTY when aggregated with the royalties owed to HGS for such SP
PRODUCT in such country in such calendar year (hereafter for the purposes of
this Paragraph 3.3 shall be "Aggregated Royalties") causes the royalty rate on
NET SALES for such SP PRODUCT in such country in such calendar year to exceed
5%, then one-half of the royalties which are to be actually paid to such THIRD
PARTY may be credited against the royalties due to HGS for such SP PRODUCT in
such country in such calendar year, but in no event shall the royalty rate
payable to HGS be reduced to less than 3%, nor shall the Aggregated Royalties
for such SP PRODUCT be reduced to less than 5%.
3.4 SP shall make the following milestone payments to HGS for each SP
PRODUCT, which milestone payment shall be due and payable within thirty (30)
days after the milestone event is achieved by or on behalf of SP or a licensee
of SP:
(i) [***] upon successful completion of Phase I for
an SP PRODUCT;
(ii) [***] upon successful completion of Phase II for
SP PRODUCT;
(iii) [***] upon first submission of an application
for regulatory approval of an SP PRODUCT in a MAJOR MARKET;
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(iv) [***] (or [***] if the option fee has not been
paid under Section 2.5 for an SP PRODUCT) upon the first approval of an SP
PRODUCT for commercial sale in a MAJOR MARKET (provided, however, that any
pricing and/or third party reimbursement approvals as necessary for sale of the
SP PRODUCT are also received).
The milestone payments provided in this paragraph shall only be made
once for each SP PRODUCT and shall not be made in the case of improvements or
modifications such as but not limited to changed forms, formats, formulations,
indications, processes or protocols of an SP PRODUCT for which the payments were
previously made.
In no event shall the aggregate of the fee paid under Paragraph 2.5 and
the milestone payments under Paragraph 3.4 for each SP PRODUCT exceed the
following:
(i) For the first two SP PRODUCTS, [***];
(ii) For the third SP PRODUCT, [***];
(iii) For the fourth SP PRODUCT and each SP PRODUCT
thereafter, [***]
3.5 Royalty obligations under this Agreement and any agreements that SP
shall enter into with a licensee, with respect to SP PRODUCT, shall terminate on
a country-by-country and product-by-product basis on the later of (i) ten (10)
years after first country-wide launch of each product in each country or (ii)
expiration of the last to expire SP PATENT or LICENSED PATENT licensed to SP
under this Agreement which covers the making, having made, importing, exporting,
offering to sell or using or selling of each product in each country.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
3.6 [***] of all payments to be made by SP pursuant to Sections 3.1 and
3.4 shall be paid by [***] and [***] shall be paid by [***]. All payments to be
made by SP pursuant to Section 3.2 shall be apportioned between [***] and [***].
according to the provisions of Section 9.4. In the event that (i) payments made
by [***] cause HGS to be subject to additional taxes and/or withholding tax, and
(ii) such additional taxes and/or withholding tax are due solely as a result of
such payments being made by [***], then SP and HGS shall agree upon an
alternative manner of payment. The foregoing notwithstanding, [***] and [***]
are jointly and severally liable for any and all payments by SP to HGS pursuant
to this Section 3, provided that payments made by [***] does not cause HGS to be
subject to additional taxes and/or a withholding tax solely as a result of such
payments being made by [***].
3.7 The manner in which statements and remittances of royalty payments
are handled are as set forth in Section 9 hereof.
3.8 All payments to be made hereunder shall be by wire transfer of
immediately available funds to an account designated by HGS.
4. RESEARCH TERM
-------------
4.1 The INITIAL RESEARCH TERM shall terminate five years after the
EFFECTIVE DATE.
4.2 The INITIAL RESEARCH TERM may be extended for up to [***]
additional years, in the event the INITIAL RESEARCH TERM is extended under the
THERAPEUTIC AGREEMENT, by written notice provided to HGS by SP at least sixty
(60) days prior to the
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
end of the INITIAL RESEARCH TERM or at least sixty (60) days prior to the end of
any one year extension thereof. A payment of [***] for each additional year
shall be due within ten (10) days of the end of the INITIAL RESEARCH TERM or the
end of any one year extension thereof, as the case may be.
4.3 In any extension of the INITIAL RESEARCH TERM, the rights and
licenses granted to SP under Paragraph 2.1 shall be further granted for the
EXTENDED TERM but limited to research and development of SP PRODUCTS and
EXCLUSIVE SP PRODUCTS in the FIELD.
5. TECHNOLOGY TRANSFER
-------------------
5.1 (a) Promptly after the EFFECTIVE DATE, HGS shall disclose to SP all
information which is LICENSED TECHNOLOGY.
(b) Throughout the INITIAL RESEARCH TERM, except as provided
in Paragraph 5.2, HGS shall promptly provide to SP all information which is
LICENSED TECHNOLOGY and materials (as available to HGS and as reasonably
requested by SP) which are LICENSED TECHNOLOGY including, without limitation,
(i) preliminary annotation data of DNA sequences which are LICENSED TECHNOLOGY
such as tissue source; library specifications for libraries from which DNA
sequences which are LICENSED TECHNOLOGY are obtained; (ii) sequence homologies
and motif searches with respect to DNA sequences (and encoded polypeptides)
which are LICENSED TECHNOLOGY; (iii) biological information obtained by HGS with
respect to DNA sequences and encoded polypeptides which are LICENSED TECHNOLOGY;
and (iv) clones containing sequences which are LICENSED TECHNOLOGY as available
to HGS and as reasonably requested by SP; and (v) expression cell
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lines and vectors, as reasonably requested by SP and as available to HGS and to
the extent that HGS is not contractually precluded from providing them, for the
sole purpose of research and development in the FIELD. SP understands and agrees
that experimental data relating to characterization of DNA and encoded
polypeptides are not included in this Paragraph 5.1(b).
(c) Except as otherwise set forth herein, LICENSED TECHNOLOGY
to be provided to SP pursuant to Paragraphs 5.1(a) and 5.1(b)(i), (ii) and (iii)
shall be in the form of electronic transfers of the LICENSED TECHNOLOGY and HGS
shall deliver the LICENSED TECHNOLOGY to SP in a manner and format which is
compatible for use with the SOFTWARE.
(d) Promptly after the EFFECTIVE DATE, HGS will provide SP
with printouts of HGS full length gene reports to the extent that they include
LICENSED TECHNOLOGY and to the extent that they exist on the EFFECTIVE DATE.
5.2 HGS shall not be required to transfer to SP sequence data
consisting of second walks and full length sequences or biological information
or clones, in each case which are LICENSED TECHNOLOGY with respect to potential
THERAPEUTIC PROTEINS, until HGS obtains exclusive rights thereto under the
THERAPEUTIC AGREEMENT. The preceding sentence shall not apply to second walks
performed by HGS at the specific request of SP.
5.3 The transfer of LICENSED TECHNOLOGY to SP shall be documented by
HGS. Such documentation shall include, but not be limited to, transfer of
LICENSED TECHNOLOGY to SP electronically and/or in writing and/or, in the case
of oral transfer, by written notice to SP of the substance of such oral
transfer.
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5.4 At the end of the RESEARCH TERM, SP shall promptly return to HGS
any and all LICENSED TECHNOLOGY other than LICENSED TECHNOLOGY as to which SP
retains a license hereunder, including, without limitation, LICENSED TECHNOLOGY
which is not deemed confidential in accordance with Paragraph 7.2.
5.5 SP agrees to maintain security measures (including but not limited
to computer and computer network security measures) for LICENSED TECHNOLOGY
which are similar to the measures currently employed by SP to safeguard its own
confidential information. These security measures have been discussed with HGS
and HGS agrees that such security measures are acceptable to HGS.
5.6 (a) To the extent it has not already been provided to SP, HGS shall
provide to SP, promptly following the EFFECTIVE DATE, without additional charge,
initial copies of the SOFTWARE and thereafter, during the INITIAL RESEARCH TERM,
as they become available, copies of any enhancements to the SOFTWARE made by HGS
during the INITIAL RESEARCH TERM, including all modifications to the SOFTWARE
which increase the speed, efficiency or ease of operation of the SOFTWARE, or
add additional capabilities to or otherwise improve the functions of the
SOFTWARE.
(b) For a period of two years after the EFFECTIVE DATE, HGS
shall provide to SP, without additional charge, all necessary telephone or
on-site consultation requested by SP in connection with its use and operation of
the SOFTWARE or any problems therewith. Telephone consultation shall be provided
by HGS during normal business hours.
(c) SP shall have the right, in its own discretion, to
independently modify the SOFTWARE for its own purposes and use SOFTWARE, through
the services of its own
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employees or of independent contractors, provided that same agree not to
disclose or distribute any part of the SOFTWARE to any other person or entity or
otherwise violate HGS's proprietary rights therein. SP shall be the owner of any
such modification. SP may, at its sole discretion, provide such SOFTWARE
modifications to HGS, which will be retained by HGS in confidence and will not
be disclosed to any THIRD PARTY without the prior written consent of SP. HGS
shall not incorporate any such modification into its software for distribution
to THIRD PARTY(IES) unless SP (in its sole discretion) first consents in writing
and HGS first agrees to pay SP a reasonable royalty, pursuant to mutually agreed
upon terms. SP acknowledges and agrees that SOFTWARE and any modified SOFTWARE
developed by or on behalf of SP may only be used by or for SP and may not be
transferred to a THIRD PARTY.
6. PRODUCT DEVELOPMENT
-------------------
6.1 SP shall use diligent efforts to develop, market, promote and sell
royalty bearing EXCLUSIVE SP PRODUCT equivalent to those efforts it uses with
respect to its products of similar value and status, subject to SP's right to
terminate such efforts and surrender all rights in and to such SP EXCLUSIVE
PRODUCTS.
6.2 Within sixty (60) days after the end of each calendar year, SP
shall provide to HGS in writing annual reports with respect to work performed by
or for SP under RESEARCH PLANS.
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7. CONFIDENTIALITY
---------------
7.1 Subject to Paragraphs 7.2, 7.3 and 7.4 the parties agree not to
disclose and/or provide to a THIRD PARTY any information and/or materials
received from the other party and to use the information and materials received
from the other party only as licensed hereunder.
7.2 Unless otherwise restricted by this Agreement, the confidentiality
obligations of paragraph 7.1 shall not apply to information and/or materials
which:
(i) was known to the receiving party or generally known to the
public prior to its disclosure hereunder; or
(ii) subsequently becomes known to the public by some means
other than a breach of this Agreement;
(iii) is subsequently disclosed to the receiving party by a
THIRD PARTY having a lawful right to make such disclosure and who is not under
an obligation of confidentiality to the disclosing party;
(iv) is required by law or bona fide legal process regulation,
rule, act or order of any governmental agency or authority 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 information and/or materials;
(v) is approved for release by the parties, or (vi) is
independently developed by the employees or agents of a party or their
respective AFFILIATES, without any knowledge of the information and/or materials
provided by the other party, provided that such
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independent development can be properly demonstrated by the party disclosing the
information and/or materials.
7.3 (a) Notwithstanding Paragraph 7.1, SP may disclose and/or provide
LICENSED TECHNOLOGY to a THIRD PARTY who (i) receives a license from SP to
LICENSED TECHNOLOGY in conjunction with a license to an SP PRODUCT as permitted
by Paragraph 2.8 hereof or (ii) is a THIRD PARTY contractor assisting SP with
respect to an SP PRODUCT, provided that such THIRD PARTY enters into an
agreement as provided in Paragraph 7.4, and such THIRD PARTY agrees to
confidentiality and non-use obligations essentially identical to Paragraph 7.1.
(b) Unless restricted by other provisions of this Agreement,
the obligations of Paragraph 7.1 shall not restrict the ability of HGS to
disclose information and/or provide materials to a THIRD PARTY, provided that
such THIRD PARTY enters into an agreement by which the THIRD PARTY agrees to
confidentiality obligations essentially identical to Paragraph 7.1.
7.4 In the event that SP intends to transfer or disclose LICENSED
TECHNOLOGY to a THIRD PARTY contractor as permitted by Paragraph 7.3 no such
transfer or disclosure shall take place until such THIRD PARTY enters into an
agreement with SP by which SP is granted ownership of or a license (including
the right to grant sublicenses) to all inventions (and patent rights based
thereon) which result from the use of LICENSED TECHNOLOGY. Any such inventions
and patents shall be SP TECHNOLOGY and SP PATENTS subject to the terms and
conditions of this Agreement, provided, however, that any such inventions and
patents which
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result from any incidental or immaterial use of LICENSED TECHNOLOGY shall not be
SP TECHNOLOGY or SP PATENTS.
7.5 All confidential information disclosed by one party to the other
party shall remain the intellectual property of the disclosing party. In the
event that a court or other legal or administrative tribunal, directly or
through an appointed master, trustee or receiver, assumes partial or complete
control over the assets of a party to this Agreement based on the insolvency or
bankruptcy of such party, the bankrupt or insolvent party shall promptly notify
the court or other tribunal (i) that confidential information received from the
other party under this Agreement remains the property of the other party and
(ii) of the confidentiality obligations under this Agreement. In addition, the
bankrupt or insolvent party shall, to the extent permitted by law, take all
steps necessary or desirable to maintain the confidentiality of the other
party's confidential information and to insure that the court, other tribunal or
appointee maintains such information in confidence in accordance with the terms
of this Agreement.
7.6 (a) No public announcement concerning (i) the existence of or terms
of this Agreement, (ii) research and/or discoveries made by SP, (iii) milestones
achieved by SP, and (iv) exercise by SP of rights and options granted under this
Agreement, shall be made, either directly or indirectly, by any party to this
Agreement without prior written notice to the other party and, except as may be
legally required, or as may be legally required for a public offering of
securities, or as may be required for recording purposes, without first
obtaining the approval of the other party and agreement upon the nature and text
of such announcement. The party desiring to make any such public announcement
shall inform the other party of the proposed announcement or disclosure in
reasonably sufficient time prior to public release, and shall
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provide the other party with a written copy thereof, in order to allow such
other party to comment upon such announcement or disclosure. This paragraph 7.6
shall not apply to any information in a public announcement which is information
essentially identical to that contained in a previous public announcement agreed
to pursuant to this paragraph.
(b) HGS may provide a THIRD PARTY who enters into an agreement
with HGS of the type contemplated by Paragraph 2.11(a) with a copy of this
Agreement after they enter into such agreement.
7.7 Without the written consent of HGS, SP shall not submit for written
or oral publication any manuscript, abstract or the like which includes SP
TECHNOLOGY which is or is directed to a SP PRODUCT prior to the earlier of (i)
eighteen months after SP files an SP PATENT which claims such SP PRODUCT or (ii)
the date on which such SP PRODUCT is disclosed in a printed publication other
than through breach of this paragraph.
7.8 HGS agrees that all RESEARCH PLANS submitted by SP pursuant to this
Agreement shall be strictly confidential and shall be provided to only those
employees at HGS who are to be responsible for determing whether or not SP shall
receive an exclusive license to an SP PRODUCT pursuant to Paragraph 2.5, and for
monitoring SP's obligations under Section 6, not to exceed five (5) employees.
HGS further agrees that all such RESEARCH PLANS will not be utilized by or on
behalf of HGS for any other purpose.
8. PATENT PROSECUTION AND LITIGATION
---------------------------------
8.1 Each party shall have and retain sole and exclusive title to all
inventions, discoveries, designs, works of authorship and other know-how which
are made, conceived, reduced to practice or generated by its employees, agents,
or other persons acting under its
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authority. As to all inventions, discoveries, designs, works of authorship and
other know-how made, conceived, reduced to practice or generated jointly by
employees, agents, or other persons acting under the authority of HGS and SP,
the parties shall own an equal undivided interest therein. In the event of
jointly owned inventions, HGS shall be responsible for the filing, prosecution
and maintenance of patents and patent applications directed thereto under the
terms and conditions of Paragraph 8.2, however, each of HGS and SP shall be
responsible for an equal share of the cost and expense thereof. HGS shall
consult with SP with respect to strategies for filing, prosecution and
maintenance of patents and patent applications for which it bears responsibility
under this Section 8.1, and shall keep SP reasonably informed with regard to
filing, prosecution and maintenance activity for such patents and patent
applications, provided, however, that HGS shall have final decision-making
authority with respect to filing, prosecution and maintenance of any patents and
patent applications for which it is responsible. If a joint owner does not
desire to file, prosecute or maintain a patent or patent application to a joint
invention, such owner shall assign its ownership interest therein to the other
joint owner and shall no longer be responsible for the cost and expense thereof,
and shall have no further right to consult, review or comment with respect to
the filing, prosecution and maintenance of said patent or patent application.
All patents and patent applications to joint inventions which are LICENSED
TECHNOLOGY and/or SP TECHNOLOGY shall be LICENSED PATENTS and SP PATENTS,
respectively, subject to the terms and conditions of this Agreement; otherwise,
any joint owner shall be free to dispose of its interest therein without
accounting to any other owner.
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8.2 (a) HGS shall have the right within its sole discretion to
prepare, file, prosecute and maintain LICENSED PATENTS owned by HGS. With
respect to LICENSED PATENTS as to which SP retains a license hereunder, subject
to Paragraph 8.10, HGS shall keep SP reasonably informed with respect to the
filing and prosecution thereof (including interference proceedings). In the
event that HGS does not intend to prepare, file, prosecute and/or maintain
patent protection in any country with respect to LICENSED TECHNOLOGY other than
expressed sequence tags (ESTs) as to which SP retains a license hereunder, HGS
shall, at SP's option, do so at the cost and expense of SP. In the event that a
THIRD PARTY who has entered into an agreement with HGS as contemplated by
Paragraph 2.11(a) also makes such a request in a country, such costs shall be
apportioned between SP and such THIRD PARTY.
(b) SP shall have the right within its sole discretion to
prepare, file, prosecute and maintain SP PATENTS. With respect to SP PATENTS as
to which HGS retains a license hereunder, subject to Paragraph 8.11, SP shall
keep HGS reasonably informed with respect to the filing and prosecution thereof
(including interference proceedings). In the event that SP does not intend to
prepare, file, prosecute and/or maintain patent protection in any country with
respect to SP TECHNOLOGY as to which HGS retains a license hereunder, SP shall,
at HGS' option, do so at the cost and expense of HGS.
(c) SP will provide HGS reasonable assistance to enable HGS to
prepare, file, prosecute and maintain LICENSED PATENTS pursuant to section
8.2(a). HGS will provide SP reasonable assistance to enable SP to prepare, file,
prosecute and maintain SP PATENTS pursuant to section 8.2(b).
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8.3 Each party, on behalf of itself, its AFFILIATES and its and their
respective directors, employees, officers, shareholders, agents, successors and
assigns hereby waives any and all actions and causes of action, claims and
demands whatsoever, in law or equity of any kind it or they may have against the
other party, its AFFILIATES and its or their respective officers, directors,
employees, shareholders, agents, successors and assigns, which may arise from
performance of patent activities under this Section, except those which result
from gross negligence, recklessness, or willful misconduct.
8.4 (a) In the event of the institution of any suit by a THIRD PARTY
against SP or its licensees for patent infringement involving the manufacture,
use, import, export, offer for sale, sale, distribution or marketing of SP
PRODUCT, SP shall promptly notify HGS in writing. As between HGS and SP, SP
shall be solely responsible for the cost and expense of such action and any
liability which results therefrom.
(b) In the event of the institution of any suit by a THIRD
PARTY against HGS or its licensees, for patent infringement involving the
manufacture, use, import, export, offer for sale, sale, distribution or
marketing of any product sold by HGS or its licensees involving or developed
using LICENSED TECHNOLOGY and/or SP TECHNOLOGY, HGS shall promptly notify SP in
writing. As between HGS and SP, HGS shall be solely responsible for the cost and
expense of such action and any liability which results therefrom.
8.5 In the event that HGS or SP becomes aware of actual or threatened
infringement of a SP PATENT or LICENSED PATENT anywhere in the TERRITORY, that
party shall promptly notify the other party in writing. The owner of the SP
PATENT or LICENSED PATENT shall have the first right but not the obligation to
bring, at its own expense, an
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infringement action against any THIRD PARTY and to use the other party's name in
connection therewith. If the owner of the patent does not commence a particular
infringement action within ninety (90) days, the other party, after notifying
the owner in writing, shall be entitled to bring such infringement action, in
its own name and/or in the name of the patent owner, at its own expense to the
extent that such party is licensed thereunder. The foregoing notwithstanding, in
the event that an alleged infringer certifies pursuant to 21 U.S.C.
ss.355(b)(2)(A)(iv) against an issued SP PATENT or LICENSED PATENT covering a
product, as between the patent owner and the owner of the product, the party
receiving notice of such certification shall immediately notify the other party
of such certification, and if fourteen (14) days prior to expiration of the
forty five (45) day period set forth in 21 U.S.C. ss.355(c)(3)(C), the owner of
the SP PATENT or LICENSED PATENT fails to commence an infringement action, the
party receiving notice, in its sole discretion, at its own expense and to the
extent that it is licensed under the SP PATENT or LICENSED PATENT, shall be
entitled to bring such infringement action in its own name and/or in the name of
the patent owner. The party conducting an action under this Paragraph 8.5 shall
have full control over its conduct, including settlement thereof provided such
settlement shall not be made without the prior written consent of the other
licensing party or licensed party if it would adversely affect the patent rights
of such party. The licensing party (i.e., the patent owner) and the licensed
party (e.g., the owner of the product) shall reasonably assist one another and
cooperate in any such litigation at the other's request, each such party paying
its own costs and expenses. The party conducting the litigation shall
periodically reimburse the other party for its reasonable and actual
out-of-pocket expenses for assisting in the litigation, which reimbursement
shall be made within thirty (30) days of receipt by the party
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conducting the litigation of itemized invoices from the assisting party
documenting such expenses.
8.6 Any recovery made by a party as the result of an action for patent
infringement it has conducted under Paragraph 8.5 shall be distributed as
follows:
(i) The party conducting the action shall recover its actual
out -of-pocket expenses.
(ii) To the extent that the recovery exceeds the total of item
(i), the excess shall be kept by the party conducting the
action, provided, however, that to the extent that (a) the
recovery is based on an award of lost sales/profits, and (b)
the party conducting the action would have incurred a royalty
obligation to the other party based upon such sales, the party
to whom such royalties would have been due shall receive a
proportion of the excess recovery corresponding to the royalty
percentage it would have otherwise been due.
8.7 The parties shall periodically keep one another reasonably informed
of the status of and of, their respective activities regarding, any such
litigation or settlement thereof.
8.8 To the extent that the owner of a SP PATENT or a LICENSED PATENT
also owns a product (covered by an NDA or HRD) which product is covered by a
granted claim of said SP PATENT or LICENSED PATENT, the owner of said SP PATENT
or LICENSED PATENT shall have the first right to seek extensions of the terms of
the patent and to seek to obtain SPCs. If the owner of a SP PATENT or a LICENSED
PATENT does not own a product covered by a granted claim of said SP PATENT or
LICENSED PATENT, then the owner of a product (covered by an NDA or HRD) which
product is licensed under and is covered by a
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granted claim of said SP PATENT or LICENSED PATENT shall have the right to seek
extensions of the terms of the patent and to seek to obtain SPCs. Where more
than one (1) product is covered by a granted claim of the same SP PATENT or the
same LICENSED PATENT, as between SP and HGS, the right to seek extensions of the
terms of the patent and to obtain SPCs shall be granted by the patent owner to
the first of SP, HGS or licensee of HGS, who is licensed thereunder to submit to
the patent owner, in writing, a request to obtain such rights with respect to a
product (covered by an NDA or HRD) which is approved for marketing and/or sale
in at least one country in which said SP PATENT or LICENSED PATENT is in force.
Each party shall assist the other in the obtaining of such extensions or SPCs
including by authorizing the other party to act as its agent.
8.9 (a) All rights and licenses granted under or pursuant to this
Agreement by one party to another party are, for all purposes of Section 365(n)
of Title 11 of the U.S. Code ("Title 11"), licenses of rights to intellectual
property as defined in Title 11. The licensing party agrees during the term of
this Agreement to maintain and preserve any current copies of all such
intellectual property which are in existence and in its possession as of the
commencement of a case under Title 11 by or against the licensing party. If a
case is commenced by or against the licensing party under Title 11, then, unless
and until this Agreement is rejected as provided in Title 11, the licensing
party (in any capacity, including debtor-in-possession) and its successors and
assigns (including, without limitation, a Title 11 Trustee) shall, as the party
who is a licensee may elect in a written request, immediately upon such request
(A) (i) perform all of the obligations provided in this Agreement to be
performed by the licensing party, or (ii) provide to the party who is a licensee
all such intellectual property (including all embodiments thereof)
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held by the licensing party and such successors and assigns as of the
commencement of a case under Title 11 by or against the licensing party and from
time to time thereafter, and (B) not interfere with the rights of the licensing
party as provided in this Agreement, or any agreement supplementary hereto, to
such intellectual property (including all such embodiments thereof, including
any right of the licensing party to obtain such intellectual property or such
embodiment) from any other entity.
(b) If a Title 11 case is commenced by or against the
licensing party, this Agreement is rejected as provided in Title 11 and the
party who is a licensee elects to retain its rights hereunder as provided in
Title 11, then the licensing party (in any capacity, including
debtor-in-possession) and its successors and assigns (including, without,
limitation, a Title 11 Trustee) shall provide to the party who is a licensee all
such intellectual property (including all embodiments thereof) held by the
licensing party and such successors and assigns immediately upon the party who
is a licensee's written request thereof. Whenever, the licensing party or any of
its successors or assigns provides to the party who is a licensee any of the
intellectual property licensed hereunder (or any embodiment thereof) pursuant to
this Paragraph 8.9, the party who is a licensee shall have the right to perform
the obligations of the licensing party hereunder with respect to such
intellectual property, but neither such provision nor such performance by the
party who is a licensee shall release the licensing party from any such
obligation or liability for failing to perform it; provided, however, that in
such event the party who is a licensee shall not be entitled to compel specific
performance by the licensing party under this Agreement except to the extent of
enforcing the exclusivity of the license granted hereunder.
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(c) All rights, powers, remedies, obligations and conditions
of the party who is a licensee provided herein are in addition to and not in
substitution for any and all other rights, powers, remedies, obligations and
conditions of the licensing party or the party who is a licensee now or
hereafter existing at law or in equity (including, without limitation, Title 11)
in the event of the commencement of a Title 11 case by or against the licensing
party. The party who is a licensee, in addition to the rights, powers and
remedies expressly provided herein, shall be subject to all obligations and
conditions, and shall be entitled to exercise all other such rights and powers
and resort to all other such remedies as may now or hereafter exist at law or in
equity (including, without limitation, Title 11) in such event. The parties
agree that they intend the foregoing rights and obligations of the party who is
a licensee to apply to the maximum extent permitted by law, including without
limitation for purposes of Title 11, (i) the right of access to any intellectual
property (including all embodiments thereof) of the licensing party, or any
third party with whom the licensing party contracts to perform an obligation of
the licensing party under this Agreement, and, in the case of the third party,
which is necessary for the development, registration and manufacture of a
product licensed hereunder, and (ii) the right to contract directly with any
third party described in clause (i) in this sentence to complete the contracted
work.
8.10 The obligations of HGS to keep SP informed under Paragraphs
8.2(a) shall only apply to LICENSED PATENTS which claim LICENSED TECHNOLOGY
which HGS is required to disclose to SP pursuant to Section 5.
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8.11 The obligations of SP to keep HGS informed under Paragraph 8.2(b)
shall not apply to any SP PATENT directed to SP PRODUCTS until the earlier of
publication of the SP PATENT and/or SP obtaining exclusive rights to the SP
PRODUCT under Section 2.5.
9. STATEMENTS AND REMITTANCES
--------------------------
9.1 SP shall keep and require its licensees to keep complete and
accurate records of all NET SALES of SP PRODUCT for which royalties are due
hereunder. HGS shall have the right, at its expense, through a certified public
accountant or like person reasonably acceptable to SP, to examine pertinent
financial records during regular business hours upon proper advance written
notice during the life of this Agreement and for six (6) months after its
termination for the purpose of verifying and reporting to HGS as to the
computation of the royalty payments made hereunder; provided, however, that such
examination shall not take place more often than once a year and not later than
forty-five (45) days after written request is made; provided further that such
accountant shall report only as to the accuracy of the royalty statements and
payments, including the magnitude and source of any discrepancy. Neither SP nor
its licensees shall be required to maintain such records for more than three (3)
years. The accountant shall execute customary confidentiality agreements prior
to any examination, reasonably satisfactory in form and substance to SP, to
maintain in confidence all information obtained during the course of any such
examination, except for disclosure to HGS, as necessary for the above purpose.
9.2 Within sixty (60) days after the close of each calendar quarter, SP
shall deliver to HGS a true accounting of all SP PRODUCT subject to royalty
hereunder sold by it and its licensees and distributors during such calendar
quarter and shall at the same time pay all royalties due. In the event that the
royalty rate changes in a calendar quarter with respect to an
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
SP PRODUCT as a result of the NET SALES of such SP PRODUCT for such calendar
year reaching a level at which there is a change in royalty rate as provided in
Paragraph 3.2 ("New Royalty Rate") then the royalties which are paid by SP for
such calendar quarter and the subsequent calendar quarters for such calendar
year (until the royalty rate is again changed) shall be determined and paid
based on the New Royalty Rate, and in addition, the royalties for the previous
calendar quarters for such calendar year for such SP PRODUCT shall be recomputed
at the New Royalty Rate, and the payment for the calendar quarter in which there
is a New Royalty Rate shall be adjusted for the difference between the royalties
paid for such SP PRODUCT for the previous calendar quarters for such calendar
year and the royalties for such previous calendar quarters for such calendar
year calculated by use of the New Royalty Rate. Such accounting shall show
sales, each calculation of NET SALES and the calculation of currency conversion
on a country-by-country basis and SP-PRODUCT-by-SP-PRODUCT basis, and
recalculation of royalties based on a New Royalty Rate, if applicable..
9.3 All royalties and other payments due under this Agreement shall be
payable in U.S. dollars.
9.4 All royalties, with the exception of those payable on sales to
customers in the United States, shall be paid by [***] from its office in [***].
Royalties payable on U.S. sales shall be paid directly to HGS by Schering
Corporation from its offices in Kenilworth, New Jersey. Royalties payable on
sales in countries other than the United States shall be calculated by
multiplying the appropriate royalty rate times the sales in each currency in
which they are made and converting the resulting amount into United States
dollars, at the rates of exchange used by Schering Corporation, for reporting
such sales for United States
37
<PAGE>
financial statement purposes. A copy of SP's current policy for bookkeeping
exchange rates is set forth in Appendix D. If, due to restrictions or
prohibitions imposed by a national or international authority, payments cannot
be made as aforesaid, the parties shall consult with a view to finding a prompt
and acceptable solution, and SP will deal with such monies as HGS may lawfully
direct at no additional out-of-pocket expense to SP. Notwithstanding the
foregoing, if royalties cannot be remitted to HGS for any reason within six (6)
months after the end of the calendar quarter during which they are earned, then
SP shall be obligated to deposit the royalties in a bank account in Switzerland
in the name of HGS. SP shall deduct any taxes which SP is obligated to pay
and/or withhold in a country based on milestones or based on royalties due to
HGS based on sales in such country from royalty or milestone payments due HGS
for such country under this Agreement and pay them to the proper authorities as
required by applicable laws. SP shall maintain official receipts of payment of
any such taxes and forward these receipts to HGS within sixty (60) days.
10. TERM AND TERMINATION
--------------------
10.1 This Agreement shall come into effect as of the EFFECTIVE DATE and
shall remain in full force and effect unless earlier terminated as provided in
this Section 10.
10.2 (a) In the event SP fails to make a royalty or milestone payment
to HGS under this Agreement with respect to a SP PRODUCT, when due, or fails to
meet its obligations under Section 6 of this Agreement with respect to an
EXCLUSIVE SP PRODUCT, in addition to any other remedy which it may have, HGS may
notify SP in writing that all of SP's rights with respect to such SP PRODUCT or
EXCLUSIVE SP PRODUCT, as the case may be, shall
38
<PAGE>
terminate as of thirty (30) days after such written notice and SP's rights with
respect thereto shall terminate unless such payment is made or such failure is
cured, prior to the expiration of such thirty (30) day period.
(b) In the event that the THERAPEUTIC AGREEMENT is terminated
by HGS for failure of SP to pay the amounts which are due under Paragraph 3.1 or
Paragraph 5.1 of the THERAPEUTIC AGREEMENT, then by written notice to SP, HGS
shall have the right to terminate this Agreement effective as of the date of
such notice.
10.3 In the event that SP fails to make a payment to HGS under Section
3.1 when due, in addition to any other remedy which HGS may have, HGS may notify
SP in writing of such failure and that this Agreement shall terminate in its
entirety and if SP fails to make such payment within thirty (30) days
thereafter, this Agreement shall terminate.
10.4 In the event that HGS fails to meet its obligations under Section
5, in addition to any other remedy which SP may have, SP may notify HGS of such
failure and that this Agreement shall terminate in its entirety, and if HGS
fails to cure such failure within thirty (30) days thereafter, this Agreement
shall terminate in its entirety.
10.5 Either party, may terminate this Agreement if, at any time, the
other party shall file in any court or agency pursuant to any statute or
regulation of any state or country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of a receiver or
trustee of the party or of its assets, or if the other party proposes a written
agreement of composition or extension of its debts, or if the other party shall
be served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within sixty (60) days
after the filing thereof, or if the other party shall propose
39
<PAGE>
or be a party to any dissolution or liquidation, or if the other party shall
make an assignment for the benefit of creditors.
10.6 Neither party shall have the right to terminate this Agreement
except under paragraphs 10.2, 10.3, 10.4, and 10.5, provided however that
nothing in this Agreement shall limit any remedies for breach which may be
available pursuant to a judgment of a court, in law or equity, including
termination of this Agreement or of any or all rights hereunder, except that any
action seeking remedies for breach of this Agreement shall be conducted in
accordance with Section 18.
11. RIGHTS AND DUTIES UPON TERMINATION
----------------------------------
11.1 Notwithstanding termination of this agreement, the rights and
obligations of the parties under Sections 7, 9, 11, 13, 15 and 26, and
Paragraphs 2.4(a) and (b), 2.7, 2.8, and 3.1(b) shall survive such termination.
11.2 Termination of the Agreement in accordance with the provisions
hereof shall not limit remedies which may be otherwise available in law or
equity.
11.3 Other than termination of this Agreement pursuant to Paragraph
10.4 or with respect to an SP PRODUCT as to which rights have been terminated
under Paragraph 10.2. SP's obligation to pay royalties and milestone payments
for SP PRODUCT shall survive such termination.
40
<PAGE>
12. WARRANTIES AND REPRESENTATIONS
------------------------------
12.1 Each of HGS and SP hereby represents, warrants and covenants to
the other, as of the EFFECTIVE DATE, as follows:
(a) it is a corporation duly organized and validity existing
under the laws of the state or other jurisdiction of incorporation or formation;
(b) the execution, delivery and performance of this Agreement
by such party has been duly authorized by all requisite corporate action;
(c) it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, including, without
limitation, the right, power and authority to grant the licenses under Section
2;
(d) the execution, delivery and performance by such party of
this Agreement and its compliance with the terms and provisions hereof to such
party's best knowledge does not conflict with or result in a breach of any of
the terms and provisions of or constitute a default under (i) a loan agreement,
guaranty, financing agreement, agreement affecting a product or other agreement
or instrument binding or affecting it or its property; (ii) the provisions of
its charter documents or bylaws; or (iii) any order, writ, injunction or decree
of any court or governmental authority entered against it or by which any of its
property is bound;
(e) this Agreement constitutes such party's legal, valid and
binding obligation enforceable against it in accordance with its terms subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to the
availability of particular remedies under general equity principles.
41
<PAGE>
12.2 HGS and SP, as the case may be, hereby represent, warrant, and
covenant to a party receiving a license hereunder as follows:
(a) as of the EFFECTIVE DATE, there are no claims, judgments
or settlements against or owed by HGS or pending or threatened claims or
litigation, in each case relating to HGS' interest in or to LICENSED PATENTS or
LICENSED TECHNOLOGY; and
(b) HGS and SP, as the case may be, has not and will not grant
any rights or licenses to any person or entity which is inconsistent with the
rights and licenses granted by HGS or SP, as the case may be, to a party under
this Agreement.
12.3 HGS hereby represents and warrants to SP that as of the EFFECTIVE
DATE:
(a) without having made any inquiry or investigation, no
information has come to HGS' attention which causes HGS to reasonably believe
that SP will not be able to negotiate license rights from each THIRD PARTY, who
is a licensor to HGS of the SOFTWARE identified in Appendix B as owned by said
THIRD PARTY, on terms that are at least as favorable to SP as those given by
such THIRD PARTY to HGS;
(b) without having made an inquiry or investigation, no
information has come to HGS' attention which causes HGS to reasonably believe
that the SOFTWARE to be provided to SP by HGS as of the EFFECTIVE DATE infringes
any patent, copyright, trademark or trade secret right of any THIRD PARTY which
has not been licensed by HGS;
(c) to HGS' best knowledge, the list of SOFTWARE contained in
Appendix B is true, complete and correct in all material respects;
(d) to HGS' best knowledge, the list of hardware components
set forth in Appendix B includes all of the material components SP will require
to utilize the SOFTWARE
42
<PAGE>
at its facilities in the manner contemplated by this Agreement and to receive in
an electronic format compatible with the SOFTWARE all LICENSED TECHNOLOGY that
is available in electronic format; and
(e) for a period of one (1) year from the date that the
SOFTWARE is installed and is fully operational at SP's facilities, the SOFTWARE
located at HGS and which is and will be used by HGS to input, format, and
transmit LICENSED TECHNOLOGY to SP in an electronic format will function in the
manner intended by the parties.
12.4 No party to this Agreement has in effect, and after the EFFECTIVE
DATE no party shall enter into any written agreement that would be inconsistent
with its obligations under this Agreement.
12.5 NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY THAT SP
PATENTS OR LICENSED PATENTS ARE VALID OR ENFORCEABLE OR THAT THEIR EXERCISE OR
THE EXERCISE OF LICENSED TECHNOLOGY OR SP TECHNOLOGY DOES NOT INFRINGE ANY
PATENT RIGHTS OF THIRD PARTIES. A HOLDING OF INVALIDITY OR UNENFORCEABILITY OF
ANY SUCH PATENT, FROM WHICH NO FURTHER APPEAL IS OR CAN BE TAKEN, SHALL NOT
AFFECT ANY OBLIGATION HEREUNDER, BUT SHALL ONLY ELIMINATE ROYALTIES OTHERWISE
DUE UNDER SUCH PATENT FROM THE DATE SUCH HOLDING BECOMES FINAL.
12.6 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN HGS and SP MAKE NO
REPRESENTATIONS OR EXTEND ANY WARRANTIES OF ANY KIND,
43
<PAGE>
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12.7 Each party represents and warrants to the other parties hereto
that any materials provided by one party to another under this Agreement shall
be used in compliance with all applicable laws and regulations.
12.8 HGS hereby warrants and represents that to the extent any data
and/or information included within LICENSED TECHNOLOGY was obtained from The
Institute for Genomic Research (TIGR), TIGR has granted rights to HGS to all
such data and/or information.
12.9 No claim can be made or shall exist with respect to a breach of
warranty, representation or covenant under Paragraph 12.1(a); (b), (d) and (e)
Paragraph 12.2(a) or Paragraph 12.3, unless such claim is made prior to the end
of the RESEARCH TERM.
12.10 In the event that a THIRD PARTY pursuant to an agreement
contemplated by Paragraph 2.11(a) has a publication provision which is more
favorable to SP than Paragraph 7.7 of this Agreement, then SP may substitute
such more favorable publication provision for Paragraph 7.7 by written notice to
HGS within sixty (60) days of receipt thereof.
13. INDEMNIFICATION
---------------
13.1 SP shall defend, indemnify and hold harmless HGS, licensors of HGS
and each of their respective directors, officers, shareholders, agents and
employees, from and against any and all liability, loss, damages and expenses
(including reasonable attorneys' fees) as the result of claims, demands, costs
or judgments which may be made or instituted against any of them arising out of
the manufacture, possession, distribution, use, testing, sale or other
disposition
44
<PAGE>
of any SP PRODUCT by or through SP or any THIRD PARTY granted rights by SP under
this Agreement. SP's obligation to defend, indemnify and hold harmless shall
include claims, demands, costs or judgments, whether for money damages or
equitable relief by reason of alleged personal injury (including death) to any
person or alleged property damage, provided, however, the indemnity shall not
extend to any claims against an indemnified party which result from the gross
negligence or willful misconduct of such indemnified party. SP shall have the
exclusive right. to control the defense of any action which is to be indemnified
in whole by SP hereunder, including the right to select counsel reasonably
acceptable to HGS to defend HGS, and to settle any claim, provided that, without
the written consent of HGS (which shall not be unreasonably withheld or
delayed), SP shall not agree to settle any claim against HGS to the extent such
claim has a material adverse effect on HGS. The provisions of this paragraph
shall survive and remain in full force and effect after any termination,
expiration or cancellation of this Agreement and the obligation hereunder shall
apply whether or not such claims are rightfully brought. SP shall require each
licensee to agree to indemnify HGS, in a manner consistent with this paragraph.
13.2 HGS shall defend, indemnify and hold harmless SP, licensors of SP
and each of their respective directors, officers, shareholders, agents and
employees, from and against any and all liability, loss, damages and expenses
(including reasonable attorneys' fees) as the result of claims, demands, costs
or judgments which may be made or instituted against any of them arising out of
the manufacture, possession, distribution, use, testing, sale or other
disposition by or through HGS or any THIRD PARTY granted rights by HGS under
this Agreement of any product in the HGS FIELD as to which HGS is granted a
license under an SP PATENT. HGS's
45
<PAGE>
obligation to defend, indemnify and hold harmless shall include claims, demands,
costs or judgments, whether for money damages or equitable relief by reason of
alleged personal injury (including death) to any person or alleged property
damage, provided, however, the indemnity shall not extend to any claims against
an indemnified party which result from the gross negligence or willful
misconduct of such indemnified party. HGS shall have the exclusive right to
control the defense of any action which is to be indemnified in whole by HGS
hereunder, including the right to select counsel reasonably acceptable to SP to
defend SP and to settle any claim, provided that, without the written consent of
SP (which shall not be unreasonably withheld or delayed), HGS shall not agree to
settle any claim against SP to the extent such claim has a material adverse
effect on SP. The provisions of this paragraph shall survive and remain in full
force and effect after any termination, expiration or cancellation of this
Agreement and HGS' obligation hereunder shall apply whether or not such claims
are rightfully brought. HGS shall require each licensee to agree to indemnify SP
in a manner consistent with this Paragraph 13.2.
13.3 A person or entity that intends to claim indemnification under
this Section 13 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any loss, claim, damage, liability, or action in respect of
which the Indemnitee intends to claim such indemnification, and the Indemnitor,
after it determines that indemnification is required of it, shall assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an Indemnitee shall have the right to retain its own counsel, with
the fees and expenses to be paid by the Indemnitor if Indemnitor does not assume
the defense; or, if representation of such Indemnitee by the counsel retained by
the Indemnitor would be
46
<PAGE>
inappropriate due to actual or potential differing interests between such
Indemnitee and any other party represented by such counsel in such proceedings.
The indemnity agreement in this Section 13 shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action if such settlement is
effected without the consent of the Indemnitor, which consent shall not be
withheld unreasonably. The failure to deliver notice to the Indemnitor within a
reasonable time after the commencement of any such action, if prejudicial to its
ability to defend such action, shall relieve such Indemnitor of any liability to
the Indemnitee under this Section 13, but the omission so to deliver notice to
the Indemnitor will not relieve it of any liability that it may have to any
Indemnitee otherwise than under this Section 13. The Indemnitee under this
Section 13, its employees and agents, shall cooperate fully with the Indemnitor
and its legal representatives in the investigations of any action, claim or
liability covered by this indemnification. In the event that each party claims
indemnity from the other and one party is finally held liable to indemnify the
other, the Indemnitor shall additionally be liable to pay the reasonable legal
costs and attorneys' fees incurred by the Indemnitee in establishing its claim
for indemnity.
14. FORCE MAJEURE
-------------
14.1 If the performance of any party of this Agreement, or of any
obligation under this Agreement, is prevented, restricted, interfered with or
delayed by reason of any cause beyond the reasonable control of the party liable
to perform, unless conclusive evidence to the contrary is provided, the party so
affected shall, upon giving written notice to the other party, be excused from
such performance to the extent of such prevention, restriction, interference or
delay, provided that the affected party shall use its reasonable best efforts to
avoid or remove such
47
<PAGE>
causes of non-performance and shall continue performance with the utmost
dispatch whenever such causes are removed. When such circumstances arise, the
parties shall discuss what, if any, modification of the terms of this Agreement
may be required in order to arrive at an equitable solution.
15. GOVERNING LAW
-------------
15.1 Except for disputes under Section 8 which will be governed by
Federal law and brought in the Federal District Court of Delaware, this
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without regard to the conflict of laws provisions thereof and
the exclusive jurisdiction and venue of any action with respect to this
Agreement shall be in a state court of the State of Delaware. Each of the
parties hereto agrees to submit to the exclusive jurisdiction and venue of such
court for the purpose of any such action. Service of process in any such action
may be effected in the manner provided in Section 18 for delivery of notice or
in any other manner consistent with Delaware law. In the event that a state
court or Federal District Court of the State of Delaware holds that an action
cannot be brought and maintained in a state court or Federal District Court of
the State of Delaware, then such action may be brought in any court having
proper jurisdiction.
16. SEPARABILITY
------------
16.1 In the event any portion of this Agreement shall be held illegal,
void or ineffective, the remaining portions hereof shall remain in full force
and effect.
48
<PAGE>
16.2 If any of the terms or provisions of this Agreement are in
conflict with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to conform with such statute or
rule of law.
16.3 In the event that the terms and conditions of this Agreement are
materially altered as a result of paragraphs 16.1 or 16.2, the parties will, in
good faith, renegotiate the terms and conditions of this Agreement to resolve
any inequities.
17. ENTIRE AGREEMENT
----------------
17.1 This Agreement, together with the Schedules, exhibits, Appendices
or other attachments hereto, entered into as of the date written above
constitutes the entire agreement between the parties relating to the subject
matter hereof and supersedes all previous writings and understandings. No terms
or provisions of this Agreement shall be varied or modified by any prior or
subsequent statement, conduct or act of either of the parties, except that the
parties may amend this Agreement by written instruments specifically referring
to and executed in the same manner as this Agreement.
18. NOTICES
-------
18.1 Any notice required or permitted under this Agreement shall be
hand-delivered or sent by express delivery service or certified or registered
mail, postage prepaid, or by fax with written confirmation by mail, to the
following addresses of the parties:
49
<PAGE>
HGS
HUMAN GENOME SCIENCES, INC.
Suite 300
9410 Key West Avenue
Rockville, Maryland 20850
Attention: Chief Executive Officer
(Fax #301-309-8512)
copy to:
Mr. Elliot Olstein
Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart
& Olstein
6 Becker Farm Road
Roseland, New Jersey 07068
(Fax #201-994-1744)
SP
SCHERING CORPORATION
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attention: Vice President, Business Development
(Fax #: 908-298-5379)
cc: Director of Licensing
(Fax #: 908-298-2739
and
SCHERING-PLOUGH LTD.
Toepferstrasse 5
CH-6004 Lucerne
Switzerland
Attention: President
(Fax # 41 41 4181626)
18.2 Any notice required or permitted to be given concerning this
Agreement shall be effective upon receipt by the party to whom it is addressed.
50
<PAGE>
19. ASSIGNMENT
----------
19.1 This Agreement and the licenses herein granted shall be binding
upon and inure to the benefit of the assignees and successors in interest of the
respective parties. Neither this Agreement nor any interest hereunder shall be
assignable by a party without the written consent of the other parties and any
attempted assignment contrary to this paragraph shall be void and without force
and effect provided, however, that a party may assign this Agreement or any of
its rights or obligations hereunder to any AFFILIATE or to any THIRD PARTY with
which it may merge or consolidate, or to which it may transfer all or
substantially all of its assets to which this Agreement relates, without
obtaining the consent of the other party, provided that the assigning party
remains liable under this Agreement and that the THIRD PARTY assignee or
surviving entity assumes in writing all of its obligations under this Agreement.
20. RECORDING
---------
20.1 SP and HGS each shall have the right, at any time, to record,
register, or otherwise notify this Agreement in appropriate governmental or
regulatory offices anywhere in the TERRITORY, and HGS or SP, as the case may be,
shall provide reasonable assistance to the other in effecting such recording,
registering or notifying.
20.2 The parties acknowledge that this Agreement may be notified to the
European Community for compliance with applicable laws.
51
<PAGE>
21. COUNTERPARTS
------------
21.1 This Agreement may be executed in any number of counterparts, and
each such counterpart shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.
22. WAIVER.
-------
22.1 Any delay or failure in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, nor operate to bar the exercise or enforcement
thereof at any time or times thereafter, excepting only as to an express written
and signed waiver as to a particular matter for a particular period of time.
22.2 Notwithstanding the foregoing, in the event SP challenges whether
any payments contemplated hereunder (including, without limitation upfront
payments, royalties or milestones) is due, it shall have the right to make such
payments under protest (reserving all rights hereunder) pending resolution of
such dispute.
23. INDEPENDENT RELATIONSHIP.
-------------------------
23.1 Nothing herein contained shall be deemed to create an employment,
agency, joint venture or partnership relationship between the parties hereto or
any of their agents or employees, or any other legal arrangement that would
impose liability upon one party for the act or failure to act of the other
party. No party shall have any power to enter into any contracts or commitments
or to incur any liabilities in the name of, or on behalf of, the other parties,
or to bind the other parties in any respect whatsoever.
52
<PAGE>
24. EXPORT CONTROL.
---------------
24.1 This Agreement is made subject to any restrictions concerning the
export of products or technical information from the United States of America
which may be imposed upon or related to HGS or SP from time to time by the
government of the United States of America. Furthermore, SP agrees that it will
not export, directly or indirectly, any technical information acquired from HGS
under this Agreement or any products using such technical information to any
country for which the United States government or any agency thereof at the time
of export requires an export license or other governmental approval, without
first obtaining the written consent to do so from the Department of Commerce or
other agency of the United States government when required by an applicable
statute or regulation.
25. CHANGE OF CONTROL.
------------------
25.1 In the event that a "Change of Control" causes HGS' rights and
obligations hereunder to pass to a "Major Pharmaceutical Company" (as defined
below) then such Major Pharmaceutical Company shall set up appropriate
procedures to ensure that RESEARCH PLANS submitted by SP are not used for
purposes other than those of Section 6 and Paragraph 2.5 of this Agreement. SP
shall have the right, at its expense,through its own designated experts or like
person reasonably acceptable to such Major Pharmaceutical Company, to examine
HGS' records relating to such procedures to verify and report to SP that such
Major Pharmaceutical Company has complied with such procedures, Such examination
shall occur during regular business hours upon proper advance written notice
during the life of this Agreement and for six (6) months after its termination,
provided, however, that such examination shall not take place
53
<PAGE>
more often than once a year and not later than forty-five (45) days after
written request is made and provided, further, that such expert executes
customary confidentiality agreements prior to any such audit satisfactory in
form and substance to such Major Pharmaceutical Company, to maintain in
confidence all information obtained during the course of any such audit except
for disclosure to SP as necessary for the above purpose.
As used herein "Change of Control" shall mean (i) any merger,
reorganization, consolidation or combination in which HGS is not the surviving
corporation, (ii) any "person" (within the meaning of Section 13(d) and Section
14(d)(2) of the Securities Exchange Act of 1934), excluding SP and/or its
AFFILIATES, is or becomes the beneficial owner, directly or indirectly, of
securities of HGS representing 50% or more of either (a) the then-outstanding
shares of common stock of HGS or (b) the combined voting power of HGS'
then-outstanding voting securities; or (iii) approval by the shareholders of HGS
of a complete liquidation or the complete dissolution of HGS.
As used herein the term "Major Pharmaceutical Company" means any entity
(including any corporation, joint venture, partnership or unincorporated
entity), as well as any AFFILIATES or division(s) of such entity, that is
engaged in the research, development, manufacturing, registration and/or
marketing of drug products that are approved under NDAs, HRDs, ANDAs, Product
License Applications (including without limitation any entity that is a member
of PhRMA). "Major Pharmaceutical Company" shall also mean any entity which,
through or following a Change of Control, at any time would either itself meet
the definition of "Major Pharmaceutical Company" in the prior sentence or would
be an AFFILIATE of any entity which is or would meet such definition.
54
<PAGE>
26. GUARANTEE
---------
26.1 Schering Corporation and Schering Plough Ltd. jointly and
severally guarantee that their respective AFFILIATES will perform all
obligations under this Agreement as if the AFFILIATES were signatories of this
Agreement.
27. FURTHER ACTIONS
---------------
27.1 Each party agrees to execute, acknowledge and deliver such further
instruments and to do all such other acts, as may be necessary or appropriate in
order to carry out the purposes and intent of this Agreement.
IN WITNESS WHEREOF, the parties, through their authorized officers, have
executed this Agreement as of the date first written above.
SCHERING CORPORATION SCHERING-PLOUGH LTD.
BY:________________________ BY:__________________________
Title: Title:
HUMAN GENOME SCIENCES, INC.
BY:________________________
Title:
55
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
1. DEFINITIONS.............................................. 2
-----------
2. GRANTS AND COVENANTS..................................... 8
--------------------
3. PAYMENTS AND ROYALTIES................................... 14
----------------------
4. RESEARCH TERM ........................................... 19
-------------
5. TECHNOLOGY TRANSFER...................................... 20
-------------------
6. PRODUCT DEVELOPMENT...................................... 23
-------------------
7. CONFIDENTIALITY.......................................... 24
---------------
8. PATENT PROSECUTION AND LITIGATION........................ 27
---------------------------------
9. STATEMENTS AND REMITTANCES............................... 36
--------------------------
10. TERM AND TERMINATION..................................... 38
--------------------
11. RIGHTS AND DUTIES UPON TERMINATION ...................... 40
----------------------------------
12. WARRANTIES AND REPRESENTATIONS........................... 41
------------------------------
13. INDEMNIFICATION.......................................... 44
---------------
14. FORCE MAJEURE............................................ 47
-------------
15. GOVERNING LAW .......................................... 48
-------------
16. SEPARABILITY............................................. 48
------------
17. ENTIRE AGREEMENT......................................... 49
----------------
18. NOTICES.................................................. 49
-------
19. ASSIGNMENT............................................... 51
----------
20. RECORDING................................................ 51
---------
21. COUNTERPARTS............................................. 52
------------
<PAGE>
22. WAIVER................................................... 52
-------
23. INDEPENDENT RELATIONSHIP................................. 52
------------------------
24. EXPORT CONTROL........................................... 53
--------------
25. CHANGE OF CONTROL........................................ 53
-----------------
26. GUARANTEE................................................ 55
---------
27. FURTHER ACTIONS.......................................... 55
---------------
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<DESCRIPTION>SYNTHELABO/SB/HGS COLLABORATION AND LICENSE AGT.
<TEXT>
"Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by [***], have been
separately filed with the Commission."
Synthelabo/SB/HGS
-----------------
COLLABORATION AND LICENSE AGREEMENT
-----------------------------------
This Collaboration and License Agreement (Agreement) is entered into
and effective this 30th day of June, 1996 by and among SmithKline Beecham
Corporation, a corporation organized under the laws of the Commonwealth of
Pennsylvania, having a place of business at One Franklin Plaza, Philadelphia,
Pennsylvania 19101, U.S.A. ("SB corp"), SmithKline Beecham p.l.c., a corporation
organized under the laws of England and having a place of business at Great West
Road, Brentford, Middlesex, England ("SB plc") (individually and collectively
"SB"), Human Genome Sciences, Inc. located at 9410 Key West Avenue, Rockville,
Maryland 20850 ("HGS") and Synthelabo, located at 22, avenue Galilee, 92352 Le
Plessis-Robinson Cedex France ("Synthelabo").
WHEREAS SB corp and HGS, entered into the Collaboration Agreement
(defined below) effective as of May 19, 1993 relating to sequencing of expressed
genes and development of practical applications therefor; and
WHEREAS SB and HGS wish to collaborate with and grant and license to
Synthelabo, certain rights, including certain rights granted and licensed to SB
pursuant to the Collaboration Agreement and SB/HGS License Agreement (both
defined below), and Synthelabo wishes to collaborate with SB and HGS and to
accept such grant and license;
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein, and intending to be legally bound, and otherwise to be bound
by proper and reasonable conduct, the parties agree as follows:
I. Definitions
1.1 "Affiliate" shall mean any corporation, firm, partnership or other entity,
whether de jure or de facto, which directly or indirectly owns, is owned by
or is under common ownership with a party to this Agreement to the extent
of at least fifty percent (50%) of the equity (or such lesser percentage
which is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction provided a party controls directly or indirectly
such foreign entity) having the power to vote on or direct the affairs of
the entity and any person, firm, partnership, corporation or other entity
actually controlled by, controlling or under common control with a party to
this Agreement. For purposes of this Agreement, L'Oreal and Nestle are
not Affiliates of Synthelabo.
1.2 "Alliance Committee" shall mean a committee consisting of three (3)
scientists appointed by Synthelabo and three (3) scientists appointed by
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SB and co-chaired by one (1) of the SB appointees and co-chaired by one (1)
of the Synthelabo appointees.
1.3 "Antibody Product" shall mean an antibody (monoclonal or polyclonal) or
fragments or constructs thereof which is potentially useful for the
treatment or prevention of a disease or disorder in humans.
1.4 "Antisense" shall mean inhibiting or preventing in vivo expression in a
human or animal of a gene product by use of an oligonucleotide or modified
oligonucleotide which binds to RNA or DNA to prevent and/or impair
expression of the gene product.
1.5 "Blocking Claim" shall mean a claim under any patent application or granted
patent anywhere in the world which generically but not specifically claims
(i) any and all compounds (and/or the use thereof) which interact with or
prevent interaction with a specified Target which is a Product and/or (ii)
any and all antibodies (and/or the use thereof) against a specific
Therapeutic Protein which is a Product or Target which is a Product. The
following are examples of "blocking claims": (1) a compound which interacts
with receptor X; (2) a compound which prevents binding to receptor X and
its ligand, (3) a process for activating receptor X, comprising contacting
receptor X with a compound which binds thereto and activates the receptor;
(4) a process for preventing activation of receptor X comprising contacting
receptor X with a compound which prevents binding between receptor X and
its ligand.
1.6 "Bioinformatics" shall mean computer software and know-how useful for
the analysis, comparison, and curation of human nucleic acid sequences; and
information related to such sequences; and software for the construction
and maintenance of databases for the compilation of such sequences and
their associated information; each developed from May 19, 1993 through the
end of the Initial Research Term. Bioinformatics shall include software for
the prediction of the three-dimensional structure of proteins from primary
sequence information but Bioinformatics shall not include software for
rational drug design based on such three-dimensional structure.
1.7 "Collaboration Agreement" shall mean the Collaboration Agreement entered
into between SB and HGS effective as of May 19, 1993, as amended and/or
superceded from time to time.
1.8 "Collaboration Partner Agreement" shall mean an agreement between or among
SB and/or HGS and (1) Merck substantially in accordance with a memorandum
of intent dated April 12, 1996; (2) SP substantially in accordance with a
memorandum of intent dated April 21, 1996; (3) Takeda substantially in
accordance with the SB/Takeda Collaboration and License Agreement dated
June 5, 1995; and (4) a Collaboration Partner, in addition to (1) and (2)
or substituted for (1) or (2), wherein such Collaboration Partner is
granted substantially the same licenses and
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
rights as granted by SB and/or HGS pursuant to any one or all of the
foregoing agreements or this Agreement.
1.9 "Collaboration Partner" shall mean those entities which are set forth in
Appendix A, or substituted for an entity in Appendix A and any entity added
to Appendix A or substituted for an entity in Appendix A which in the
aggregate shall be no more than four (4) entities as provided in Paragraph
2.18.
1.10 "Collaboration Partner Patent" shall mean individually and collectively a
Collaboration Partner Target Patent and Collaboration Partner Therapeutic
Protein Patent. Included within the definition of Collaboration Partner
Patents are all continuations, continuations-in-part, divisions, patents of
addition, reissues, renewals or extensions thereof and all
supplementary-like patent certificates.
1.11 "Collaboration Partner Target Patent" shall mean all patents or patent
applications which are filed prior to the end of the Initial Research Term
under a Collaboration Partner Agreement, which are or become owned by a
Collaboration Partner, to the extent that they claim a Target which is a
Product or include a Blocking Claim and as to which SB and/or HGS has the
right to grant a license to Synthelabo. Included within the definition of
Collaboration Partner Target Patents are all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals
or extensions thereof and all SPCs.
1.12 "Collaboration Partner Therapeutic Protein Patent" shall mean all patents
or patent applications which are filed prior to the end of the Initial
Research Term under a Collaboration Partner Agreement, which are or become
owned by a Collaboration Partner, to the extent that they claim a
Therapeutic Protein which is a Product or use or manufacture thereof and as
to which SB and/or HGS has the right to grant a license to Synthelabo.
Included within the definition of Collaboration Partner Therapeutic Protein
Patents are all continuations, continuations-in-part, divisions, patents of
addition, reissues, renewals or extensions thereof and all SPCs.
1.13 "Co-Right Territory" shall mean individually and collectively, [***]
1.14 "Diagnostics" shall mean any product, process, substance, composition or
service intended to predict, detect or identify a disease or determine the
presence of a pathologic condition in a human.
1.15 "Discovered" shall mean the earlier of (a) the filing date of an
application for a patent filed in any country by Synthelabo under this
Agreement, by HGS or SB under the Collaboration Agreement, or by a
Collaboration Partner under a Collaboration Partner Agreement
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containing a specific disclosure of a Product; or (b) identification of a
Synthelabo Product by Synthelabo.
1.16 "Drug Product" shall mean a product other than a Therapeutic Protein or
Antibody Product which is potentially useful for the treatment or
prevention of a disease or disorder in humans.
1.17 "Effective Date" shall mean the date first written above.
1.18 "Gene" shall mean a human gene or a portion thereof or cDNA corresponding
thereto.
1.19 "Gene Therapy" shall mean treatment or prevention of a disease, or
remedying a gene deficiency of humans or animals by genetic modification of
human somatic cells or animal somatic or germ cells (in vivo, in vitro or
ex vivo) with DNA (RNA) for the purpose of expressing a protein or
oligo(poly)nucleotide encoded by said DNA (RNA) in a human or animal.
1.20 "HGS Field" shall mean: (i) Gene Therapy, (ii) Antisense and (iii)
biotransformation of a chemical to prepare pharmaceutically active agents
for human or animal use, or intermediates therefor, which active agents or
intermediates therefor were discovered prior to May 19, 1993.
1.21 "HGS Technology" shall mean the following technology, whether patented,
patentable or not: (a) sequence data with respect to Genes and expression
products thereof and Bioinformatics relating thereto, in each case
developed by or for HGS prior to and through the end of the Initial
Research Term, (b) information on biological function of Therapeutic
Proteins developed by HGS prior to the Initial Research Term, (c) HGS
clones containing sequences in (a), (d) information on biological function
of Targets developed by or for HGS prior to and through the end of the
Initial Research Term, and (e) biological information on Therapeutic
Proteins for use as Targets developed by HGS during the Initial Research
Term and after such Therapeutic Protein has been claimed pursuant to
Section 8. Bioinformatics in subparagraph (a) shall not include
Bioinformatics licensed by HGS from a Third Party except where HGS has the
royalty-free right to license such Bioinformatics to Synthelabo or where
HGS has a royalty-bearing right to license such Bioinformatics to
Synthelabo and Synthelabo agrees to pay all applicable royalties for its
use of such license.
1.22 "HGS Patents" shall mean (i) all patents and patent applications to the
extent that they claim HGS Technology and (ii) Blocking Claims of patents
and patent applications filed prior to the end of the Initial Research
Term, in each case, which are or become owned by HGS or to which HGS
otherwise has, now or in the future, the right to grant licenses, or
sublicenses. Included within the definition of HGS Patents are all
continuations, continuations-in-part, divisions, patents of addition,
reissues, renewals or extensions thereof and all SPCs. HGS Patents shall
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<PAGE>
include HGS' interest in patents and patent applications to which HGS is a
joint owner pursuant to Paragraph 15.1.
1.23 "Initial Research Term" shall mean the term beginning on the Effective Date
and ending, unless this Agreement is earlier terminated, five years from
the Effective Date.
1.24 "Licensed Technology" shall mean individually and collectively, HGS
Technology and SB Technology and information received from a Collaboration
Partner pursuant to Paragraph 14.5.
1.25 "Licensed Patents" shall mean individually and collectively, HGS Patents
and SB Patents.
1.26 "Major Country" shall mean the United States, Canada, Germany, United
Kingdom, France, Italy, Spain, or Japan.
1.27 "Management Committee" shall mean a committee consisting of three (3)
members appointed by Synthelabo and three (3) members appointed by SB and
co-chaired by one (1) of the SB appointees and co-chaired by one (1) of the
Synthelabo appointees.
1.28 "Merck" shall mean Merck KGaA, Frankfurter Str. 250, 64271 Darmstadt,
Germany and its Affiliates.
1.29 "Net Sales" shall mean gross receipts from sales of Synthelabo Product by
Synthelabo or SB or, except as provided below, their respective Affiliates,
licensees, distributors trading on Synthelabo's or SB's account or joint
ventures, less deductions for (i) transportation charges, including
transportation insurance to the extent separately invoiced; (ii) sales and
excise taxes and duties paid or allowed by a selling party and any other
governmental charges imposed upon the production, importation, use or sale
of such product; (iii) normal and customary trade, quantity and cash
discounts allowed and rebates including but not limited to Medicaid-like
rebates; and (iv) allowances or credits to customers on account of
rejection or return of such product or on account of retroactive price
reductions affecting such product. Sales between or among a party to this
Agreement and its respective Affiliates, licensees, distributors trading on
Synthelabo's or SB's account or joint ventures shall be included within Net
Sales only if such purchaser is an end-user of the Synthelabo Product.
Otherwise, Net Sales shall only include the subsequent, final sales to
Third Parties.
1.30 "Product(s)" shall mean any product, process, substance, composition or
service which in whole or in part (i) incorporates or is based on or uses
or is derived by use of Licensed Technology and/or Synthelabo Technology
and/or (ii) is covered by a Licensed Patent and/or a Synthelabo Patent
and/or (iii) is based on or is derived by use of a Target received through
SB from a Collaboration Partner under this Agreement; and/or (iv) is
covered by a Collaboration Partner Patent as to which Synthelabo obtains
rights from a Collaboration Partner under this Agreement. An incidental or
immaterial use of Licensed Technology,
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
such Target and/or Synthelabo Technology shall not cause a product,
process, substance, composition or service to become a Product.
1.31 "Research Antibody Plan" shall mean a plan for discovering and developing a
Synthelabo Antibody Product.
1.32 "Research Drug Plan" shall mean a plan for screening or other use of
Targets to discover a Synthelabo Drug Product.
1.33 "Research Plan" shall mean individually and collectively a Research Protein
Plan, a Research Antibody Plan or a Research Drug Plan. An example of each
such plan forms Appendix C.
1.34 "Research Protein Plan" means a plan for research and development of a
Synthelabo Protein Product which summarizes scientific data, proposed
research and development efforts and research and development goals
sufficient for SB or HGS to reasonably monitor applicable diligence
obligations required herein.
1.35 "Research Term" shall mean the Initial Research Term plus any extensions
obtained pursuant to Section 7.
1.36 "SB" shall mean SB Corp. and/or SB plc and any present or future Affiliate
to which any rights and/or obligations of either of them are assigned
and/or delegated pursuant to this Agreement as provided herein.
1.37 "SB Field" shall mean human and animal health care including Diagnostics
and Vaccines but excluding the HGS Field.
1.38 "SB Patents" shall mean (i) all patents and patent applications to the
extent that they claim SB Technology and (ii) Blocking Claims of patents
and patent applications filed prior to the end of the Initial Research
Term, in each case, which are or become owned by SB or to which SB
otherwise has, now or in the future, the right to grant licenses, or
sublicenses. Included within the definition of SB Patents are all
continuations, continuations-in-part, divisions, patents of addition,
reissues, renewals or extensions thereof and all SPCs. SB Patents shall
include SB's interest in patents and patent applications to which SB is a
joint owner pursuant to Paragraph 15.1.
1.39 [***]
6
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
1.40 [***]
1.41 "SP" shall mean Schering Plough Corporation, 2000 Galloping Hill Road,
Kenilworth, New Jersey and its Affiliates.
1.42 "Synthelabo" shall mean Synthelabo, Synthelabo Recherche, and their present
and future Affiliates to which any rights and/or obligations are assigned
and/or delegated pursuant to this Agreement as provided herein.
1.43 "Synthelabo Antibody Product" shall mean a Product in the Synthelabo Field
which is an Antibody Product developed by or for Synthelabo or its
licensee.
1.44 "Synthelabo Drug Product" shall mean a Product in the Synthelabo Field
which is a Drug Product developed by or for Synthelabo or its licensee.
1.45 "Synthelabo Field" shall mean the treatment and/or prevention of disease in
humans, but excluding the HGS Field, Vaccines, and Diagnostics.
1.46 "Synthelabo Patents" shall mean all patents and patent applications to the
extent that they claim Synthelabo Technology which are or become owned by
Synthelabo or to which Synthelabo otherwise has, now or in the future, the
right to grant licenses or sublicenses. Included within the definition of
Synthelabo Patents are all continuations, continuations-in-part, divisions,
patents of addition, reissues, renewals and extensions thereof and all
supplementary patent-like certificates. Synthelabo Patents shall include
Synthelabo's interests in patents and patent applications to which
Synthelabo is a joint owner pursuant to Paragraph 15.1.
1.47 "Synthelabo Product" shall mean individually and collectively a Synthelabo
Drug Product, Synthelabo Protein Product and Synthelabo Antibody Product.
1.48 "Synthelabo Protein Product" shall mean a Product in the Synthelabo Field
which is a Therapeutic Protein developed by or for Synthelabo or its
licensee.
1.49 "Synthelabo Technology" shall mean any and all data, substances, processes,
materials, formulas, know-how, inventions and information
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developed by or on behalf of Synthelabo which incorporates or is based on
the use of or derived by use of Licensed Technology. An incidental or
immaterial use of Licensed Technology by or on behalf of Synthelabo or its
licensees shall not cause data, substances, processes, materials, formulas,
know-how, inventions and information to become Synthelabo Technology.
1.50 "SPC" shall mean a right based upon a patent to exclude others from making,
using or selling a Product, such as a Supplementary Protection Certificate.
1.51 "Takeda" shall mean Takeda Chemical Industries, Ltd., 1-1, Doshomachi
4-Chome, Chuo-ku, Osaka, 541, Japan and its Affiliates.
1.52 "Target" shall mean a Gene or expression product thereof (e.g., receptors,
enzymes or ion channels) which could be used for screening or other drug
discovery purpose to identify compounds or antibodies with a biochemical or
pharmacological effect.
1.53 "Therapeutic Protein" shall mean a polypeptide derived from a Gene
(excluding Antibody Products and Drug Products) which may be useful for the
treatment or prevention of a disease or disorder in humans.
1.54 "Third Party" shall mean shall mean any party other than Synthelabo, HGS,
SB or Affiliates of SB.
1.55 "Vaccine" shall mean any substance which achieves a prophylactic or
therapeutic effect by inducing an antigen-specific humoral and/or cellular
immune system response and shall include a "Gene Therapy Vaccine" which
shall mean a Vaccine which achieves a therapeutic effect by inducing an
antigen-specific humoral and/or cellular immune system response by Gene
Therapy.
2. License Grants and Covenants
Research Term Grants
2.1. SB hereby grants to Synthelabo a non-exclusive, non-transferable world-wide
license under SB Technology and SB Patents to perform and have performed
research and development in the Synthelabo Field during the Research Term.
2.2. SB and HGS as the case may be hereby grant to Synthelabo a non-exclusive,
non-transferable world-wide license under SB Technology, SB Patents, HGS
Technology, and HGS Patents to perform experiments during the Research Term
in the HGS Field and SB Field in furtherance of research and development in
the Synthelabo Field.
2.3. HGS hereby grants to Synthelabo a non-exclusive, non-transferable
world-wide license under HGS Technology and HGS Patents to perform and have
performed research and development in the Synthelabo Field during the
Research Term.
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Post Research Term Grants to Synthelabo
2.4. SB hereby grants to Synthelabo a non-exclusive, non-transferable world-wide
license under SB Technology and SB Patents to perform and have performed
research and development in the Synthelabo Field after the Research Term in
accordance with Research Plans submitted by Synthelabo prior to the end of
the Research Term.
2.5. HGS hereby grants to Synthelabo a non-exclusive, non-transferable
world-wide license under HGS Technology and HGS Patents to perform and have
performed research and development in the Synthelabo Field after the
Research Term in accordance with Research Plans submitted by Synthelabo
prior to the end of the Research Term.
2.6. SB and HGS grant to Synthelabo an irrevocable, royalty-free, non-exclusive,
world-wide license under Licensed Technology and Licensed Patents to use
Bioinformatics after the Research Term.
2.7. SB and HGS as the case may be hereby grant to Synthelabo a non-exclusive,
non-transferable world-wide license under SB Technology and SB Patents, HGS
Technology and HGS Patents to perform experiments in the SB Field and HGS
Field in furtherance of research and development in the Synthelabo Field
after the Research Term in accordance with Research Plans submitted by
Synthelabo prior to the end of the Research Term.
Synthelabo Drug Product and Synthelabo Antibody Product Grants
2.8. SB hereby grants to Synthelabo a non-exclusive, sublicenseable, world-wide
license under SB Technology and SB Patents to make, have made, use, import,
offer to sell and sell Synthelabo Drug Products and Synthelabo Antibody
Products which result from Research Plans submitted by Synthelabo prior to
the end of the Research Term.
2.9. HGS hereby grants to Synthelabo a non-exclusive, sublicenseable, world-wide
license under HGS Technology and HGS Patents to make, have made, use,
import, offer to sell and sell Synthelabo Drug Products and Synthelabo
Antibody Products which result from Research Plans submitted by Synthelabo
prior to the end of the Research Term.
Synthelabo Protein Product Grants
2.10.SB hereby grants to Synthelabo an exclusive, sublicensable, world-wide
license under SB Technology and SB Patents to make, have made, use, import,
offer to sell and sell Synthelabo Protein Products as to which Synthelabo
meets the requirements of Paragraph 8.4.
2.11.HGS hereby grants to Synthelabo an exclusive, sublicenseable, world-wide
license under HGS Technology and HGS Patents to make, have made, use,
import, offer to sell and sell Synthelabo Protein Products as to which
Synthelabo meets the requirements of Paragraph 8.4.
2.12.Notwithstanding any exclusive rights granted to Synthelabo with respect to
a Synthelabo Protein Product, Synthelabo acknowledges and
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
agrees that SB, HGS and Collaboration Partners retain the right under
Licensed Technology, Collaboration Patents and Licensed Patents to use such
Synthelabo Protein Product for the purpose of discovering, researching,
developing, marketing, using and selling a Drug Product or Antibody Product
other than a Synthelabo Drug Product, Synthelabo Antibody Product or
Synthelabo Protein Product.
2.13.Notwithstanding any exclusive rights granted by Synthelabo under
Synthelabo Patents and Synthelabo Technology to HGS or SB with respect to a
Therapeutic Protein pursuant to Paragraph 2.25, HGS and SB acknowledge and
agree that Synthelabo retains the right under such Synthelabo Patents and
Synthelabo Technology to use a Therapeutic Protein as to which HGS, a
Collaboration Partner and/or SB obtains rights under Section 8 for the
purpose of discovering, researching, developing, marketing, using and
selling a Synthelabo Drug Product or Synthelabo Antibody Product.
Synthelabo Grants
2.14.[***]
2.15.[***]
2.16.(a) Synthelabo hereby grants a non-exclusive, royalty-free, sublicenseable
license to HGS and SB under Synthelabo Patents and Synthelabo Technology to
use Targets which are Products developed by Synthelabo during the Research
Term and under Blocking Claims of Synthelabo Patents, for the purpose of
researching, developing and commercializing products, provided that such
license is sublicenseable hereunder only to a Collaboration Partner and
only if the Collaboration Partner grants HGS and/or SB reciprocal and
similar licenses which are sub-licensed to Synthelabo herein; and (b)HGS
and SB respectively hereby grant to Synthelabo a non-exclusive, world-wide
license (with the right to sublicense) under Blocking Claims of
Collaboration Partner Patents, and under Collaboration Partner Patents to
use Targets which are Products developed by a Collaboration Partner under a
Collaboration Partner Agreement for the purpose of researching, developing
and commercializing Synthelabo Products during and after the Research Term
resulting from a Research Plan submitted prior the end of the Research
Term.
Sublicensing
2.17.The rights granted to Synthelabo by HGS and/or SB under this Agreement and
rights to Synthelabo Patents and Synthelabo Technology are licenseable
and/or sublicenseable by Synthelabo to a Third Party only with
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
respect to a Synthelabo Product and only as follows: (i) Synthelabo shall
have the right to license or sublicense rights to a Third Party to a
Synthelabo Protein Product after Synthelabo has conducted or had conducted
[***] for such Synthelabo Protein Product; (ii) Synthelabo shall have the
right at any time to grant licenses to a Third Party to a Synthelabo Drug
Product or Synthelabo Antibody Product; (iii) any such license or
sublicense must not derogate from SB's rights under Paragraphs 2.14 and/or
2.15; (iv) any such license or sublicense includes covenants from such
Third Party limiting the use of the technologies or patents hereunder which
covenants are substantially similar to those in this Agreement.
Collaboration Partners
2.18.Synthelabo acknowledges that SB has already entered into an agreement
concerning Licensed Technology and Licensed Patents with Takeda Chemical
Industries. HGS and SB collectively may in their sole discretion enter into
definitive agreements similar to this Agreement with Collaboration Partners
in addition to Takeda not later than [***] and shall notify and provide
Synthelabo with a copy of Collaboration Partner Agreements with such
additional Collaboration Partners, however, none of the Collaboration
Partners, except Synthelabo, may be a company whose headquarters and
primary R&D facilities are [***].
2.19.Synthelabo has thirty (30) days following receipt from SB and/or HGS of a
copy of a Collaboration Partner Agreement with an additional Collaboration
Partner received pursuant to Paragraph 2.18 to accept in writing all terms
and conditions of any such Collaboration Partner Agreement and cause SB
and/or HGS as the case may be to amend this Agreement such that all the
terms and conditions of such Collaboration Partner Agreement are
substituted for all the terms and conditions of this Agreement. If
Synthelabo declines to accept such terms and/or fails to respond to SB and
HGS within such thirty (30) day period, Synthelabo shall have waived its
right under this Paragraph. The right granted under this Paragraph 2.19
shall not extend to the Collaboration Partner Agreement with Takeda.
2.20.Synthelabo hereby grants to HGS a non-exclusive, sublicenseable,
world-wide, royalty bearing license under Synthelabo Patents to make, have
made, use, import, offer to sell, and sell any and all products that are in
the HGS Field, or are Vaccines and/or Diagnostics. Such license shall
include a reasonable royalty and other standard license terms to be
negotiated in good faith.
Other
2.21.Synthelabo agrees to use and/or grant rights in Licensed Technology,
Licensed Patents, Collaboration Partner Patents, Targets received from
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
Collaboration Partners under this Agreement and/or Synthelabo Technology
and/or Synthelabo Patents only in the Synthelabo Field and only as provided
under this Agreement.
2.22.After the Research Term, Synthelabo shall not use Licensed Technology,
Targets received from a Collaboration Partner under this Agreement and/or
Synthelabo Technology except (i) for research and development of a
Synthelabo Product in the Synthelabo Field pursuant to a Research Plan
submitted by Synthelabo during the Research Term and/or (ii) to make, have
made, use, import, offer to sell and sell Synthelabo Products in the
Synthelabo Field, which result from a Research Plan submitted by Synthelabo
during the Research Term and/or (iii) Bioinformatics licensed to
Synthelabo. An incidental and immaterial use of Licensed Technology, such
Target and/or Synthelabo Technology and/or use of Licensed Technology
and/or Synthelabo Technology to the extent available to the general public
and to the extent not covered by a granted Licensed Patent and/or
Synthelabo Patent shall not be a breach of this Paragraph.
2.23.Each license and right granted pursuant to this Agreement is subject to
all of the terms and conditions of this Agreement in addition to such terms
and conditions as may be explicitly referenced in the provision granting
such license or right.
2.24.HGS and SB respectively hereby grant to Synthelabo under Paragraph 2.10 and
2.11 an exclusive, world-wide license (with the right to sublicense) under
Collaboration Partner Therapeutic Protein Patents to make, have made, use,
import, offer to sell, and sell Therapeutic Proteins as to which Synthelabo
has obtained rights under Paragraph 8.4.
2.25.Synthelabo hereby grants an exclusive, royalty-free, world-wide license
(with the right to sublicense) under Synthelabo Patents to make, have made,
use, import, offer to sell and sell Therapeutic Proteins (i) to HGS or SB
as to which HGS or SB, as the case make be, has obtained rights under
Section 8 or (ii) to HGS as to which a Collaboration Partner obtains rights
under a Collaboration Partner Agreement.
3. License Fee
3.1. In partial consideration of the rights to be granted Synthelabo under the
Agreement during the Initial Research Term, Synthelabo will pay a [***]
license fee in [***] equal annual installments of [***], paid [***] Million
Dollars to SB and [***] Million Dollars to HGS, the first payment of [***]
Million US Dollars ($US [***]) being due within thirty (30) days of
execution of the Agreement and each installment thereafter being due on the
anniversary of the Effective Date.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
3.2. In the event that any payment due and payable under Paragraph 3.1 is not
paid when due and payable and remains unpaid for a period of thirty (30)
days after written notice by HGS and/or SB of such failure, or if this
Agreement is terminated by HGS and/or SB as provided herein, then all
amounts which are to be paid under Paragraph 3.1 which have not been paid
shall become immediately due and payable at the end of such thirty (30) day
period.
4. Royalties:
4.1 (a) Synthelabo shall pay to HGS the following royalties on Net Sales of
each Synthelabo Product sold by Synthelabo or a Synthelabo licensee (except
SB) which royalty shall be calculated on an Synthelabo Product by
Synthelabo Product basis, with the applicable royalty rate for each
Synthelabo Product in a calendar year being based on world-wide Net Sales
for such Synthelabo Product in the calendar year and this determined
royalty rate being applied to all world-wide Net Sales of such Synthelabo
Product in such calendar year: and
(b) SB shall pay to Synthelabo the following royalties on Net Sales of each
Synthelabo Product sold by SB or a SB licensee (except Synthelabo) in the
Co-Right Territory which royalty shall be calculated on a Synthelabo
Product by Synthelabo Product basis, with the applicable royalty rate for
each Synthelabo Product in a calendar year being based on world-wide Net
Sales for such Synthelabo Product in the calendar year and this determined
royalty rate being applied to all world-wide Net Sales of such Synthelabo
Product in such calendar year:
- ----------------- ------------------ ------------ ---------------
Annual Net Synthelabo Synthelabo Synthelabo
Sales volume Protein Products Antibody Drug Products
(US $ million) Products
- ----------------- ------------------ ------------ ---------------
[***] [***] [***] [***]
- ----------------- ------------------ ------------ ---------------
[***] [***] [***] [***]
- ----------------- ------------------ ------------ ---------------
[***] [***] [***] [***]
- ----------------- ------------------ ------------ ---------------
[***] [***] [***] [***]
- ----------------- ------------------ ------------ ---------------
4.2 (a) In the event that royalties paid to a Third Party on Net Sales of a
Synthelabo Product are a significant factor in the return realized by
Synthelabo such as to diminish Synthelabo's capability to respond to
competitive pressures in the market, HGS and Synthelabo shall mutually
agree on a reasonable reduction in the royalties payable under this
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
Agreement on Net Sales of such Synthelabo Product for so long as the market
condition persists. Factors to be considered in agreeing on the royalty
reduction shall include but not be limited to the profit margin on such
Synthelabo Product and on analogous products, prices of competitive
products, total prior sales of the Synthelabo Product and expenditures in
development of such Synthelabo Product but in no event will the royalty due
HGS be reduced more than [***] percent of the royalty which would otherwise
be due HGS under Paragraph 4.1 on Net Sales of such Synthelabo Product; and
(b) In the event that royalties paid to a Third Party on Net Sales of a
Synthelabo Product are a significant factor in the return realized by SB
such as to diminish SB's capability to respond to competitive pressures in
the market, SB and Synthelabo shall mutually agree on a reasonable
reduction in the royalties payable under this Agreement on Net Sales of
such Synthelabo Product for so long as the market condition persists.
Factors to be considered in agreeing on the royalty reduction shall include
but not be limited to the profit margin on such Synthelabo Product and on
analogous products, prices of competitive products, total prior sales of
the Synthelabo Product and expenditures in development of such Synthelabo
Product but in no event will the royalty due Synthelabo be reduced more
than [***] percent of the royalty which would otherwise be due Synthelabo
under Paragraph 4.1 on Net Sales of such Synthelabo Product.
4.3 No royalties shall be due for Synthelabo Products Discovered under a
Research Plan submitted pursuant to this Agreement after the later of [***]
years after the end of the Initial Research Term or [***] years after the
end of the Research Term.
4.4 Except as provided in Paragraph 4.3, royalty obligations under this
Agreement shall terminate on a country-by-country and Synthelabo
Product-by-Synthelabo Product basis on the later of (i) ten (10) years
after the first country-wide launch of such Synthelabo Product in each
country or (ii) expiration of the last to expire Licensed Patent or
Synthelabo Patent or Collaboration Partner Patent which covers the making,
using, importing, offering to sell, or selling of such SynthelaboProduct in
a country.
5. Milestone Payments/Other Payments
5.1 For each of the [***] Synthelabo Products, Synthelabo shall pay:
(a) [***] US Dollars [***] to SB and [***] US Dollars ([***]) to HGS upon
the successful completion by Synthelabo or a Third Party authorized by
Synthelabo of Phase I clinical trials;
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
(b) [***] US Dollars ([***]) to SB and [***] US Dollars ([***]) to HGS upon
the successful completion by Synthelabo or a Third Party authorized by
Synthelabo of Phase II clinical trials;
(c) [***] US Dollars ([***])to SB and [***] US Dollars ([***]) to HGS upon
the first submission for regulatory approval by Synthelabo or a Third Party
authorized by Synthelabo in a Major Country; and
(d) [***]US Dollars ([***]) to SB and [***] Dollars ([***]) to HGS upon
first regulatory approval for commercial sale in a Major Country.
5.2 Each of the above milestone payments shall be credited against milestone
payments otherwise due by Synthelabo on the next Synthelabo Product in the
event that Synthelabo abandons a Synthelabo Product for which a milestone
payment has been made. Total milestone payments for all Synthelabo Products
shall not exceed [***] US Dollars ([***]).
5.3 No milestone payments shall be due for Synthelabo Products Discovered after
the later of [***] after the end of the Initial Research Term or [***]
after the end of the Research Term under a Research Plan submitted pursuant
to this Agreement.
5.4 The milestone payments provided in this Section shall only be made once for
each Synthelabo Product and shall not be made in the case of improvements
or modifications such as but not limited to changed forms, formats, salts,
formulations, indications, processes or protocols of a Synthelabo Product
for which the payments were previously made.
5.5 In addition to any other payments made under this Agreement, Synthelabo
shall reimburse SB for SB's expenses (at its cost) incurred in the initial
transfer of Licensed Technology required to be transferred under the
Agreement (for example including computer expertise, personnel,
establishment of electronic communications links between SB and Synthelabo)
as shall be agreed upon prior to the transfer of such Licensed Technology.
SB shall invoice Synthelabo no more frequently than monthly for such
expenses, and Synthelabo shall reimburse SB for such expenses within thirty
(30) days of Synthelabo's receipt of each such invoice.
6. Research Payments
6.1. During the Initial Research Term, Synthelabo shall pay to HGS a total of
[***] US Dollars ([***] payable as follows: (1) [***]
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
US Dollars ([***]) within thirty (30) days after the Effective Date or at
Synthelabo's option in equal quarterly installments with the first such
quarterly installment being due within thirty (30) days of July 1, 1996 and
each subsequent quarterly installment being due within thirty (30) days of
October 1, 1996, January 1, 1997 and April 1, 1997; and (2) [***] Dollars
([***]) on each of the first through fourth anniversaries of the Effective
Date or at Synthelabo's option in equal quarterly installments due within
thirty (30) days of July 1, October 1, January 1 and April 1 for each of
the second through fifth years until a total of [***] has been paid to HGS.
6.2. In the event that any payment due and payable under Paragraph 6.1 is not
paid when due and payable and remains unpaid for a period of thirty (30)
days after written notice by HGS to Synthelabo of such failure, or if this
Agreement is terminated by HGS as provided herein, then all amounts which
are to be paid under Paragraph 6.1 which have not been paid shall become
immediately due and payable at the end of such thirty (30) day period.
6.3. During the Initial Research Term and at no additional cost to Synthelabo or
SB, Synthelabo shall have the right to prioritize the sequencing by HGS of
[***] expressed sequence tags including a reasonable number of second
walks per year. HGS shall use diligent efforts to complete such prioritized
sequencing (including sequencing from cDNA libraries supplied by
Synthelabo) as mutually agreed by HGS and Synthelabo, subject to timely
receipt by HGS of a) directions regarding prioritization and/or b) cDNA
libraries suitable for such sequencing from Synthelabo. Disputes under this
Paragraph shall be resolved by senior management of HGS and Synthelabo.
Second walks under this Paragraph identified by Synthelabo as being
directed to a Therapeutic Protein shall not be disclosed to SB and
Collaboration Partners until rights to such Therapeutic Protein have been
obtained pursuant to Paragraph 8.4.
6.4. Synthelabo may request additional research services from HGS at HGS's fully
allocated cost where HGS and Synthelabo mutually agree. For sequencing of
Synthelabo libraries under this Paragraph, HGS will not disclose sequences
sequenced from such libraries to Collaboration Partners or SB until twelve
(12) months after delivery of such sequences to Synthelabo.
6.5. HGS shall have the right to delay for a period of (12) months disclosure to
Synthelabo of such HGS Technology resulting from work performed by HGS for
a Collaboration Partner or SB pursuant to a provision of a Collaboration
Partner Agreement or the Collaboration Agreement similar to Paragraph 6.4
of this Agreement.
6.6. Any sequences and clones containing such sequences arising under this
Section 6 shall be owned by HGS and are HGS Technology.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
7. Extensions of the Initial Research Term
The Initial Research Term may be extended at Synthelabo's option for up to
five (5) additional periods of one (1) year by written notice to HGS by
Synthelabo at least sixty (60) days prior to the end of the Initial
Research Term or at least sixty (60) days prior to the end of any one year
extension thereof, which written notice shall include an agreement to pay
to HGS [***] US Dollars ([***]) per each additional year of extension
payable within thirty (30) days of each extension.
8. Research/ Terapeutic Protein Claiming
8.1. Research Plans may be submitted only during the Research Term.
8.2. HGS and/or SB shall keep dated records of all dossier submissions under
this Section.
8.3. During the Initial Research Term, Synthelabo agrees that Synthelabo will
not screen or conduct dedicated rational drug design with respect to a
Target which is a Product to discover a Synthelabo Antibody Product or
Synthelabo Drug Product without first submitting to HGS and SB a Research
Drug Plan, or Research Antibody Plan, respectively.
protein products
8.4 Synthelabo, SB, HGS, and Collaboration Partners shall obtain exclusive
rights to Therapeutic Proteins which are Products provided:
(a) as among Synthelabo, SB, HGS and Collaboration Partners, such entity is
the first to submit a dossier as permitted under this Agreement or a
Collaboration Partner Agreement to SB and HGS prior to the end of the
Research Term,
(1) which dossier demonstrates evidence of in vivo activity for any such
Therapeutic Protein. Such evidence of in vivo biological activity must be
statistically different (p less than 0.05) from control for at least one
data point, and must be demonstrated in an experiment using at least three
(3) dosages of the test substance in which at least a trend of dose related
activity is demonstrated, or,
(2) in the case of a Therapeutic Protein for which (i) in vivo activity
cannot be demonstrated after bona fide attempts to do so in at least two
sub-primate species, or (ii) it is demonstrated by documented evidence
(from scientific literature or in-house studies) that the relevant effector
system does not exist in sub-primates, or (iii) it is demonstrated by
documented evidence (from scientific literature or in-house studies) that
there is an absence of reactivity with relevant targets in subprimates,
such dossier demonstrates evidence of in vitro biological activity in at
least one
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<PAGE>
relevant cellular based assay for any such Therapeutic Protein. Such
evidence of in vitro biological activity must be statistically different (p
less than 0.05) from control for at least one data point, and must be
demonstrated in an experiment using at least three concentrations of the
test substance in which at least a trend of dose related activity is
demonstrated.
(3) The preparation used to demonstrate biological activity shall be;
(x) a purified preparation in which at least 75% (w/w) of the protein
component of the preparation is the Therapeutic Protein; or
(y) a purified preparation in which the relative concentration and/or
specific activity of the Therapeutic Protein has been increased at
least 1000 fold as compared to an unpurified preparation.
In no case shall the concentration of the Therapeutic Protein
be less that one (1) microgram/ml in the purified preparation of (x) or
(y). Such purified preparation shall be shown to have a biological
activity which is not attributable to endotoxin contamination; and
(b) Synthelabo, HGS, the Collaboration Partners or SB as the case may be
submits with the dossier a Research Protein Plan therefor; and
(c) such rights have not been previously granted to such Therapeutic
Protein under Paragraph 8.10.
8.5. (a) HGS and/or SB will notify Synthelabo in writing within ten (10) working
days of receipt as to whether or not any dossier received from Synthelabo
meets the requirements of Paragraph 8.4 and unless a dispute is pending
with HGS, SB or a Collaboration Partner under a provision comparable to
Paragraph 8.7 of this Agreement, if it does meet such requirements such
notice will indicate that rights pursuant to Paragraph 8.4 to the
Therapeutic Protein which is the subject of such dossier have been granted
to Synthelabo. (b) If within such ten (10) working days of Synthelabo
submitting a dossier, Synthelabo has not been so notified in writing,
exclusive rights to such Therapeutic Protein shall be granted to Synthelabo
for such Therapeutic protein unless a dispute is pending with HGS, SB or a
Collaboration Partner under a provision comparable to Paragraph 8.7 of this
Agreement. (c) HGS and/or SB will also notify Synthelabo in writing that
exclusive rights to a Therapeutic Protein were granted to HGS, SB or a
Collaboration Partner within ten (10) working days of such granting, and
such notification will only include the identity of the Therapeutic Protein
so claimed and not the identity of the claiming party. (d) Except as
provided in Paragraph 14.5, HGS and SB shall not disclose the contents of a
Synthelabo dossier to Collaboration Partners.
8.6. (a) Any written notification pursuant to Paragraph 8.5 that rights to a
Therapeutic Protein have been granted to a party to this Agreement or a
Collaboration Partner is final and binding on the parties. (b) Neither SB
nor HGS shall have any liability to Synthelabo with
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
respect to a decision that SB, HGS or a Collaboration Partner has obtained
rights to a Therapeutic Protein under this Agreement or a Collaboration
Partner Agreement or that Synthelabo does not have rights to a Therapeutic
Protein unless there has been gross negligence or willful misconduct by HGS
or SB, as the case may be.
8.7. Following the receipt of any written notification pursuant to Paragraph 8.5
that a dossier submitted by Synthelabo does not meet the data and/or the
Research Plan requirements of Paragraph 8.4 (a) and (b), the parties shall
meet within ten (10) working days of such notification to discuss such
notification. If the parties are unable to agree that such dossier does not
meet the requirements of Paragraph 8.4(a) and (b), the parties shall submit
such dossier to a neutral expert qualified to determine whether or not such
dossier meets the requirements of Paragraph 8.4(a) and (b). While a dispute
is pending as to whether Synthelabo, HGS, SB or a Collaboration Partner is
entitled to exclusive rights to a Therapeutic Protein, all dossiers
submitted to HGS and SB under this Agreement, the Collaboration Agreement
or a Collaboration Partner Agreement directed to the same Therapeutic
Protein shall be dated, held and no rights shall be granted to such
Therapeutic Protein pending resolution of the dispute to such Therapeutic
Protein.
8.8. HGS and SB shall not use the information in a dossier submitted by
Synthelabo pursuant to Paragraph 8.4 to support a dossier under Paragraph
8.4 submitted by HGS or SB directed to the same Therapeutic Protein in such
Synthelabo dossier.
8.9. (a) Pursuant to Paragraph 8.4, Synthelabo may only claim [***] Therapeutic
Protein as a Synthelabo Protein Product per twelve-month period during the
Research Term, except pursuant to Paragraph 8.4, Synthelabo may designate
[***] such Therapeutic Proteins in a twelve-month period if at least [***]
of such Therapeutic Proteins shall have been a class 5 cDNA sequence (i.e.
designated an unknown in the database) prior to its designation by
Synthelabo as a Synthelabo Protein Product pursuant to this Section.
(b) Notwithstanding subparagraph 8.9(a), Synthelabo may receive exclusive
rights pursuant to Paragraphs 8.4, 2.10 and 2.11 to a maximum of [***]
Therapeutic Proteins during the first five (5) years of the Initial
Research Term and one Therapeutic Protein per year during any extension of
the Research Term.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
8.10.Synthelabo acknowledges and agrees that rights pursuant to Paragraph 8.4
are not available to Synthelabo with respect to the following Therapeutic
Proteins:
Name HGS Sequence ID
---- ---------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
Synthelabo acknowledges that within ninety (90) days of execution of a
Collaboration Partner Agreement with SP, SP shall have the right to obtain
exclusive rights to a maximum of [***] Therapeutic Proteins without meeting
the requirements of Paragraph 8.4(a).
8.11 It is understood that the sequence ID number associated with a Therapeutic
Protein under Paragraph 8.10 and/or claimed in a dossier and to which
rights are granted pursuant to Paragraph 8.4 is for identification purposes
only and that all clones, sequences and polypeptides associated with the
Therapeutic Protein as well as muteins and fragments thereof are included
in the rights granted herein.
9. Product Development
9.1. Synthelabo shall use diligent efforts consistent with Synthelabo resources
and expertise to develop, market, promote and sell royalty bearing
Synthelabo Protein Products in at least two Major Countries.
9.2. After the Research Term, Synthelabo shall use diligent efforts consistent
with Synthelabo resources and expertise to screen for Synthelabo Drug
Products and Synthelabo Antibody Products which are the subject of a
Research Drug Plan or Research Antibody Plan respectively submitted by
Synthelabo during the Research Term.
9.3. Synthelabo shall keep HGS and SB informed of progress of its efforts to
develop and commercialize Synthelabo Products by submission of a
semi-annual progress report describing progress made against the Research
Plan.
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
10 Alliance Committee
10.1 SB and Synthelabo will form a SB/Synthelabo Alliance Committee for the
period of the Initial Research Term. The major activities of the Alliance
Committee shall be to:
(1) Coordinate start-up activities, define mechanisms for transfer of
Licensed Technology and address problems when/if necessary.
(2) Arrange Bioinformatics planning and training and address any issues
with the start-up and performance of the Bioinformatics systems.
(3) Determine mechanisms to exchange biological data on genes in Licensed
Technology
(4) Identify areas for optional SB/Synthelabo collaborative scientific
working groups and, if agreed, arrange for formation of such groups.
10.2 The Alliance Committee may perform such other duties as the parties may
from time to time agree in writing.
10.3 The Alliance Committee shall meet at times and places mutually agreed upon.
10.4 All Alliance Committee decisions shall be decided by a majority vote of all
members, including the chairs. To constitute a quorum, at least four (4)
members must be present, two (2) of whom were appointed by SB and two (2)
of whom were appointed by Synthelabo. To constitute a valid decision of the
Alliance Committee, the majority vote must always include at least one (1)
concurring vote from a member appointed by SB and at least one (1)
concurring vote from a member appointed by Synthelabo. Tie votes shall be
resolved by senior management of each of SB and Synthelabo. If there is no
resolution by such senior management within ten (10) working days of a
dispute between the parties based on the absence of a valid decision by the
Alliance Committee, either party may request arbitration of the dispute
under Section 30.
11. [***]
21
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"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
12. [***]
22
<PAGE>
"The information below marked [***] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
13. [***]
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14. EXCHANGE OF INFORMATION AND CONFIDENTIALITY
-------------------------------------------
14.1.Except as provided in Paragraphs 6.5 and 14.2 and promptly after the
parties agree to security matters pursuant to Paragraph 14.12, during the
Initial Research Term, SB and HGS shall promptly disclose to Synthelabo all
Licensed Technology and unless otherwise directed by Synthelabo, HGS shall
make such disclosures to Synthelabo through SB. For HGS Technology which
are clones, HGS shall transfer clones to Synthelabo and/or SB for
Synthelabo as reasonably requested by Synthelabo or SB on behalf of
Synthelabo.
14.2.Notwithstanding the definition of Licensed Technology, for second walks and
full lengths sequences not requested by Synthelabo and biological
information developed after the Effective Date and during the Initial
Research Term each with respect to Therapeutic Proteins which are Products,
HGS and SB shall not be required to transfer such second walks, full length
sequences and information to Synthelabo until HGS, Collaboration Partners,
Synthelabo or SB obtains rights thereto pursuant to Section 8.
14.3.During the Initial Research Term, Synthelabo shall disclose to SB but not
HGS all Synthelabo Technology which is Bioinformatics developed by or for
Synthelabo during the Initial Research Term and directly relevant to
Licensed Technology.
14.4.HGS, SB and Synthelabo agree not to disclose and/or provide to a Third
Party information and/or materials received from another party pursuant to
this Agreement and to use the information and materials received from the
other party only as licensed hereunder.
14.5.Synthelabo agrees to freely share with SB and Collaboration Partners,
except for SP, (a) information on biological function of Targets which are
Products developed by or for Synthelabo during the Initial Research Term;
and (b) all Synthelabo Technology which is biological
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<PAGE>
information on Therapeutic Proteins developed by or for Synthelabo during
the Initial Research Term but only after Synthelabo has obtained rights to
such Therapeutic Protein pursuant to Paragraph 8.4; provided that
Synthelabo shall not be required to disclose such information to SB and
such Collaboration Partners unless (x) such Collaboration Partners agree to
conditions of confidentiality and non-use with respect to such information
comparable to those set forth in this Section 14 as if such information
were licensed technology under its Collaboration Partner Agreement; and (y)
such Collaboration Partners agree to freely disclose to Synthelabo directly
or through SB their information comparable to the information in (a) and
(b) herein.
14.6.The obligations of Paragraph 14.4 shall not apply to information and
materials which (i) were known to the receiving party or generally known to
the public prior to its disclosure hereunder; or (ii) subsequently becomes
known to the public by some means other than a breach of this Agreement,
the Collaboration Agreement or a Collaboration Partner Agreement; (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 to be
disclosed; (v) is approved for release by the parties; (vi) is required to
be disclosed under Section 15 and in such case only the party required to
disclose shall be exempt from the obligations of Paragraph 14.4 (to the
extent of such required disclosure); or (vii) is required by a party to be
disclosed to commercialize a Product.
14.7.Contract Research With Commercial Entities Notwithstanding Para-graph 14.4,
Synthelabo may contract with a Third Party commercial entity to conduct the
research with respect to Licensed Technology and Synthelabo Technology
which Synthelabo has a right to conduct under this Agreement, provided such
contract provides that all rights in inventions and discoveries made in the
course of or as a result of such research shall be owned by or exclusively
licensed to Synthelabo with Synthelabo having the same obligations thereto
as Synthelabo has with respect to Synthelabo Technology under this
Agreement and HGS and SB having the same rights to any such invention
and/or discovery as SB and HGS has to Synthelabo Technology under this
Agreement, and provided further that such contract is otherwise consistent
with the terms and provisions of this Agreement including without
limitation Section 14 of this Agreement.
14.8.Collaborations With Not-For-Profit Entities Synthelabo may disclose and/or
provide Licensed Technology to a Third Party not-for-profit collaborator
provided Synthelabo enters into an agreement with such Third Party which is
substantially in the form of the Material Transfer Agreement in Appendix B.
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<PAGE>
14.9.For the avoidance of doubt, nothing in this Agreement shall be construed as
preventing or in any way inhibiting any party from complying with statutory
and regulatory requirements governing the development, manufacture, use and
sale or other distribution of products in any manner which it reasonably
deems appropriate, including, for example, by disclosing to regulatory
authorities confidential or other information received from a party or
Third Parties. The parties shall take reasonable measures to assure that no
unauthorized use or disclosure is made by others to whom access to such
information is granted.
14.10. Synthelabo shall not submit for written or oral publication any
manuscript, abstract or the like which includes Synthelabo Technology which
is directed to Targets and/or is a Therapeutic Protein prior to the earlier
of (1) eighteen (18) months after Synthelabo files a Synthelabo Patent
which claims such Target or Therapeutic Protein or (2) with respect to a
Therapeutic Protein, the date on which Synthelabo obtains rights to such
Therapeutic Protein pursuant to Paragraph 8.4, or (3) publication in a
printed publication other than through a breach of this Paragraph of such
Target or Therapeutic Protein and/or related information to be submitted in
such written or oral publication.
14.11. No public announcement concerning the existence of or terms of this
Agreement shall be made, either directly or indirectly, by any party to
this Agreement without prior written notice to the other parties and,
except as may be legally required, or as may be required for a public
offering of securities, or as may be required for recording purposes,
without first obtaining the approval of the other parties and agreement
upon the nature and text of such announcement. The party desiring to make
any such public announcement shall inform the other parties of the proposed
announcement or disclosure in reasonably sufficient time prior to public
release, and shall provide the other parties with a written copy thereof,
in order to allow such other party to comment upon such announcement or
disclosure. This Paragraph shall not apply to any information disseminated
to the public which is information essentially identical to that contained
in a previous public announcement agreed to pursuant to this Paragraph.
14.12. Synthelabo agrees to maintain computer and computer network security
measures as agreed to and approved by SB, HGS and Synthelabo.
14.13. Notwithstanding Paragraph 14.4, a party shall have the right to disclose
and/or provide to a Third Party information and/or materials received from
another party pursuant to this Agreement in conjunction with a license to a
Third Party which is permitted by this Agreement, provided such Third Party
enters into non-disclosure and non-use obligations substantially the same
as those in this Agreement.
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<PAGE>
14.14. HGS or SB may disclose the entire text of this Agreement to any
Collaboration Partner
15. PATENT PROSECUTION
------------------
15.1.Each party shall have and retain sole and exclusive title to all
inventions, discoveries, designs, works of authorship and other know-how
which are made, conceived, reduced to practice or generated only by its
employees, agents, or other persons acting under its authority (including
Synthelabo contract researchers and/or investigators). Each party shall own
an equal undivided interest in all inventions, discoveries, designs, works
of authorship and other know-how made, conceived, reduced to practice or
generated jointly by employees, agents, or other persons acting under the
authority of the parties ("joint invention"); provided, however, that where
a party elects to file a patent application for a joint invention and the
other party(ies) of the joint invention does not, the party filing a patent
application with respect to the joint invention shall have and retain sole
and exclusive title to such joint invention and the party not wishing to
file shall assign all of its rights, title and interest to such joint
patent application to the filing party or parties. To the extent that joint
owners decide to file a patent application on a joint invention, the
initial filing shall be in the United States unless otherwise required by
law and HGS, SB or Synthelabo, as the case may be, shall cooperate in the
preparation and filing and share equally in the expense of filing,
preparation and maintaining thereof. Each party's interest in a "joint
invention" to the extent that it is Licensed Technology and/or Synthelabo
Technology (whether jointly owned or solely owned) shall be subject to the
terms and conditions of this Agreement; otherwise any owner shall be free
to dispose of its interest therein without the consent of or accounting to
any other owner.
15.2.HGS and/or SB shall have the right within its sole discretion to prepare,
file, prosecute and maintain its Licensed Patents. With respect to Licensed
Patents as to which Synthelabo retains a license hereunder, subject to
Paragraph 15.10, HGS and SB shall keep Synthelabo informed with respect to
the filing, prosecution and maintenance thereof and any actual or
threatened litigation related thereto. In the event that Synthelabo desires
that HGS and/or SB obtain and maintain patent protection in any country
with respect to Licensed Technology of SB and/or HGS as the case may be
(other than patent applications directed to Expressed Sequence Tags), as to
which Synthelabo retains a license hereunder, HGS and/or SB shall do so at
the cost and expense of Synthelabo.
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15.3.Synthelabo shall have the right within its sole discretion to prepare,
file, prosecute and maintain Synthelabo Patents. With respect to Synthelabo
Patents as to which HGS and/or SB retains a license hereunder, subject to
Paragraph 15.11, Synthelabo shall keep HGS and SB informed with respect to
the filing, prosecution and maintenance thereof and any actual or
threatened litigation related thereto. In the event that HGS and/or SB
desires that Synthelabo obtain and maintain patent protection in any
country with respect to Synthelabo Technology as to which HGS and/or SB
retains a license hereunder, Synthelabo shall do so at the cost and expense
of HGS and/or SB as the case may be.
15.4.Each party, on behalf of itself and its directors, employees, officers,
shareholders, agents, successors and assigns hereby waives any and all
actions and causes of action, claims and demands whatsoever, in law or
equity of any kind it or they may have against the other party, its
officers, directors, employees, shareholders, agents, successors and
assigns, which may arise in any way, except as a result of gross
negligence, recklessness, or willful misconduct, in performance of patent
activities under this Section.
15.5.In the event of the institution of any suit by a Third Party against
Synthelabo, SB or their sublicensees for patent infringement involving the
manufacture, use, importation, offer for sale, sale, distribution or
marketing of Synthelabo Product, the party sued shall promptly notify the
other party to this Agreement in writing. As between the parties to this
Agreement, each party shall be solely responsible for its costs and
expenses of such action and any liability awarded against it which results
therefrom.
15.6.In the event that Synthelabo, HGS or SB becomes aware of actual or
threatened infringement of a Licensed Patent or a Synthelabo Patent, that
party shall promptly notify the other parties in writing. The owner(s) of
the patent in question shall have the first right but not the obligation to
bring, at its or their own expense, an infringement action against any
Third Party and to use the other party's or parties name(s) in connection
therewith. If the owner(s) of the patent does not commence a particular
infringement action within thirty (30) days of being requested to do so,
the other party(ies), after notifying the owner(s) in writing, shall be
entitled to bring such infringement action at its or their own expense in
its or their own name and/or in the name of the owner and the owner shall
join the action where required by local law. The party/ies conducting such
action shall have full control over its conduct, including settlement
thereof provided such settlement shall not be made without the prior
written consent of another if it would adversely affect the patent rights
of the other party. In any event, Synthelabo, HGS and SB shall assist one
another and cooperate in any such litigation at the other's request without
expense to the requesting party.
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15.7.Synthelabo, HGS and SB shall recover their respective actual out-of-pocket
expenses, or equitable proportions thereof, associated with any litigation
or settlement thereof from any recovery made by any party. Any excess
amount over such expenses shall be shared among HGS, SB and Synthelabo in
an amount proportional to their respective losses .
15.8.The parties shall keep one another informed of the status of and of their
respective activities regarding any such litigation or settlement thereof.
15.9.The owner of a Licensed Patent or a Synthelabo Patent shall have the first
right to seek extensions of the terms of the patent and to seek to obtain
SPCs. Each party shall assist the other in the obtaining of such extensions
or SPCs including by authorizing the other party to act as its agent for
such purpose.
15.10. The obligations of Paragraph 15.2 shall only apply to Licensed Patents
which include Licensed Technology which HGS and/or SB has disclosed to
Synthelabo pursuant to this Agreement.
15.11. The obligations of Paragraph 15.3 shall only apply to Synthelabo Patents
which include Synthelabo Technology which Synthelabo has disclosed to HGS
and/or SB pursuant to this Agreement
15.12(a) All rights and licenses granted under or pursuant to this Agreement by
a one party to another, for all purposes of Section 365(n) of Title 11 of
the U.S. code ("Title 11"), are licenses of rights to intellectual property
as defined in Title 11. The licensing party agrees during the term of this
Agreement to maintain and preserve any current copies of all such
intellectual property which are in existence and in its possession as of
the commencement of a case under Title 11 by or against the licensing
party. If a case is commenced by or against the licensing party under Title
11, then, unless and until this Agreement is rejected as provided in Title
11, the licensing party (in any capacity, including debtor-in-possession)
and its successors and assigns (including, without limitation, a Title 11
Trustee) shall, as the party who is a licensee may elect in a written
request, immediately upon such request (A) (i) perform all of the
obligations provided in this Agreement to be performed by the licensing
party, or (ii) provide to the party who is a licensee all such intellectual
property (including all embodiments thereof) held by the licensing party
and such successors and assigns as of the commencement of a case under
Title 11 by or against the licensing party and from time to time
thereafter, and (B) not interfere with the rights of the party who is the
licensee as provided in this Agreement, or any agreement supplementary
hereto, to such intellectual property (including all such embodiments
thereof), including any right of the party who is a licensee to obtain such
intellectual property (or such embodiment) from any other entity.
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(b) If a Title 11 case is commenced by or against the licensing party, and
this Agreement is rejected as provided in Title 11 and the party who is the
licensee elects to retain its rights hereunder as provided in Title 11,
then the licensing party (in any capacity, including debtor-in-possession)
and its successors and assigns (including, without limitation, a Title 11
Trustee) shall provide to the party who is a licensee all such intellectual
property (including all embodiments thereof) held by the licensing party
and such successors and assigns immediately upon the written request
therefor by the party who is a licensee. Whenever the licensing party or
any of its successors or assigns provides to the other party who is a
licensee any of the intellectual property licensed hereunder (or any
embodiment thereof) pursuant to this Paragraph 15.12, the licensing party
shall have the right to perform the obligations of the licensing party
hereunder with respect to such intellectual property, but neither such
provision nor such performance by the party who is a licensee shall release
the licensing party from any such obligation or liability for failing to
perform it; provided, however, that in such event the party who is a
licensee shall not be entitled to compel specific performance by the
licensing party under this Agreement except to the extent of enforcing the
exclusivity of the license granted hereunder.
(c) All rights, powers, remedies, obligations and conditions of Synthelabo
provided herein are in addition to and not in substitution for any and all
other rights, powers, remedies, obligations and conditions of the licensing
party or the party who is a licensee now or hereafter existing at law or in
equity (including, without limitation, Title 11) in the event of the
commencement of a Title 11 case by or against the licensing party. The
party who is a licensee, in addition to the rights, power and remedies
expressly provided herein, shall be subject to all obligations and
conditions, and shall be entitled to exercise all other such rights and
powers and resort to all other such remedies as may nor or hereafter exist
at law or in equity (including, without limitation, Title 11) in such
event. The parties agree that they intend the foregoing rights and
obligations of the party who is a licensee to apply to the maximum extent
permitted by law, including without limitation for purposes of Title 11,
(i) the right of access to any intellectual property (including all
embodiments thereof) of the licensing party, or any third party with whom
the licensing party contracts to perform an obligation of the licensing
party under this Agreement, and, in the case of the third party, which is
necessary for the development, registration and manufacture of Synthelabo
Product, and (ii) the right to contract directly with any third party
described in clause (i) in this sentence to complete the contracted work.
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16. TRADEMARKS AND NON-PROPRIETARY NAMES
------------------------------------
16.1.Synthelabo, at its expense, shall be responsible for the selection and
registration of non-proprietary names for Synthelabo Products.
16.2.Synthelabo at its expense, shall be responsible for the selection,
registration and maintenance of all trademarks which it or SB employs in
connection with each Synthelabo Product which SB has the right to sell,
market, promote and/or co-market pursuant to this Agreement, in such
countries and/or territories where SB has such rights, and Synthelabo shall
own and control such trademarks; provided that if SB is co-marketing a
Synthelabo Product, SB shall select a trademark for such product with the
approval of Synthelabo which approval shall not be unreasonably withheld by
Synthelabo; such trademark shall be owned by Synthelabo and SB's right to
such trademark shall revert to Synthelabo after the end of an agreement
between SB and Synthelabo to sell such Synthelabo Product. Nothing in this
Agreement shall be construed as a grant of rights, by license or otherwise,
to SB to use such trademarks for any purpose other than co-promotion and/or
co-marketing as provided in this Agreement.
17. STATEMENTS AND REMITTANCES
--------------------------
17.1.SB and Synthelabo as the case may be, shall keep and require its
sublicensees to keep complete and accurate records of all sales of each
Synthelabo Product subject to royalties under this Agreement. Each party
including HGS shall have the right, at its expense, through a certified
public accountant or like persons reasonably acceptable to the other party,
to examine such records during regular business hours during the life of
this Agreement and for four (4) months after its termination; provided,
however, that such examination shall not take place more often than once a
year provided further that such accountant shall report only as to the
accuracy of the royalty statements and payments, including the magnitude
and source of any discrepancy. Neither party shall be required to maintain
such records for more than three (3) years after the generation of such
record.
17.2.Within sixty (60) days after the close of each calendar quarter,
Synthelabo shall deliver to HGS and SB shall deliver to Synthelabo a true
accounting of each Synthelabo Product sold under authority of this
Agreement by it and its licensees and distributors during such calendar
quarter and shall at the same time pay all royalties due. Such accounting
shall show sales on a country-by-country and product-by-product basis.
17.3.Any tax paid or required to be withheld on account of the licensing party
based on license fee, milestone payments, royalties and any other payments
payable under this Agreement shall be deducted from the
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amount of such payments otherwise due. Each party shall secure and send to
the other proof of any such taxes withheld and paid.
17.4.All royalties due under this Agreement shall be payable in U.S. dollars.
Each party shall have the right, upon giving written notice to the other,
to receive payment in that country in local currency.
17.5.Monetary conversions from the currency of a foreign country, in which a
product is sold, into United States currency shall be calculated at the
official exchange rate in force in that country for financial transactions
on the last business day of the quarter for which royalties are being paid.
If there is no such official exchange rate, the conversions shall be made
at the rate for such remittances on that date as certified by Citibank,
N.A., New York, New York, U.S.A or leading banks in France.
18. EXPORT CONTROL COMPLIANCE
-------------------------
18.1.The parties agree to comply with any applicable law or regulation of the
United States, France or any country governing the export or re-export of
products (including test equipment), software, and technical data (and the
product of such data).
18.2.The parties will consult with each other to determine whether any such
prior governmental authorization is required with respect to any proposed
export or re-export of a product, software or technical data and, when
required, shall cooperate in the preparation of an application for such
authorization from their respective governmental authorities.
18.3.Synthelabo agrees that no product, software or technology provided by SB
and/or HGS to Synthelabo under this Agreement will be used, directly or
indirectly, or provided to any other party for use, in the development or
production of any micro-organisms capable of use as bacteriological warfare
agents.
19. TERM AND TERMINATION
--------------------
19.1.This Agreement shall come into effect as of the Effective Date and shall
remain in full force and effect until terminated as provided in this
Section 19.
19.2.In the event Synthelabo fails to make a royalty or milestone payment when
due to HGS or SB, as the case may be, under this Agreement with respect to
a Synthelabo Product, or fails to meet its obligations under Section 9 of
this Agreement with respect to a Synthelabo Product, then in addition to
any other remedy which they may have, HGS and/or SB may notify Synthelabo
in writing that all of Synthelabo's rights with respect to such Synthelabo
Product shall terminate as of sixty (60) days after such written notice and
Synthelabo's rights with respect thereto shall
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terminate unless such payment is made or such failure is cured, prior to
the expiration of such sixty (60) day period.
19.3.In the event Synthelabo fails to make a payment to HGS or SB, as the case
may be under Paragraph 3.1 when due or to HGS under Paragraph 6.1 when due,
then in addition to any other remedy which they may have, HGS and/or SB, as
the case may be, may notify Synthelabo in writing that this Agreement shall
terminate in its entirety, and if Synthelabo fails to make such payment
within thirty (30) days thereafter, this Agreement shall terminate.
19.4.In the event SB fails to make a payment to Synthelabo under this Agreement
with respect to a Synthelabo Product when due, then in addition to any
other remedy which it may have, Synthelabo may notify SB in writing that
all of SB's rights with respect to such Synthelabo Product shall terminate
as of sixty (60) days after such written notice and SB's rights with
respect thereto shall terminate unless such payment is made or such failure
is cured, prior to the expiration of such sixty (60) day period. Any
sublicenses granted with respect to such Synthelabo Product shall remain in
full force and effect if (i) SB's sublicensee is not then in breach of its
sublicense; (ii) Synthelabo's rate of royalty compensation thereunder is no
less than the rate of royalty compensation to Synthelabo under this
Agreement; (iii) Synthelabo assumes no performance obligations under the
sublicense agreement; and (iv) SB and SB's sublicensee agree to assign the
sublicense agreement to Synthelabo.
19.5.A party may terminate this Agreement if, at any time, another party shall
file in any court or agency pursuant to any statute or regulation of any
state or country, a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a receiver
or trustee of such party or of its assets, or if the party in bankruptcy
proposes a written agreement of composition or extension of its debts, or
if another party shall be served with an involuntary petition against it,
filed in any insolvency proceeding, and such petition shall not be
dismissed within sixty (60) days after the filing thereof, or if the other
party shall propose or be a party to any dissolution or liquidation, or if
the other party shall make an assignment for the benefit of creditors.
19.6.Notwithstanding the bankruptcy of Synthelabo, HGS or SB, or the impairment
of performance by Synthelabo, HGS or SB of its obligations under this
Agreement as a result of bankruptcy or insolvency of Synthelabo, HGS or SB,
the other parties shall be entitled to retain the licenses granted herein,
subject to rights of a party to terminate this Agreement for reasons other
than bankruptcy or insolvency as expressly provided in this Agreement.
19.7.No party shall have the right to terminate this Agreement except under
Paragraph 19.3 and 19.5 provided however that nothing in this Agreement
shall limit any remedies for breach which may be available in
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law or equity, including termination of this Agreement or of any or all
rights hereunder.
20. RIGHTS AND DUTIES UPON TERMINATION
----------------------------------
20.1.Upon termination of this Agreement in its entirety or with respect to any
Synthelabo Product or to any country or territory, each party shall notify
the other of the amount of such Product it and its licensees and
distributors and their distributors and licensees then have on hand, the
sale of which would, but for the termination, be subject to royalty, and
such party and its licensees and distributors and their distributors and
licensees shall thereupon be permitted to sell that amount of the product
provided that the party shall pay the royalty thereon at the time herein
provided for.
20.2.Termination of this Agreement shall terminate all outstanding obligations
and liabilities between the parties arising from this Agreement except
those which have accrued prior to termination as well as those described in
Sections 4, 5, 17, 22, and 24 and Paragraphs 2.17, 2.21, 2.22, 3.1, 3.2,
6.1, 6.2, 14.4, 14.6, 14.13, 14.14, and 20.2 as well as any provision not
specified in this Paragraph which is clearly meant to survive termination
of this Agreement.
21. WARRANTIES REPRESENTATIONS AND COVENANTS
----------------------------------------
21.1 Nothing in this Agreement shall be construed as a warranty that Licensed
Patents, Collaboration Patents or Synthelabo Patents are valid or
enforceable or that the exercise of Licensed Patents, Licensed Technology,
Synthelabo Patents and/or Synthelabo Technology does not infringe any
patent rights of Third Parties.
21.2 Each party warrants and represents that it has the right to enter into this
Agreement, to grant the rights and licenses and to otherwise perform in
accordance therewith.
21.3 Subject to HGS's and SB's right to modify the basic terms of the
Collaboration Agreement to accommodate the entry into Collaboration Partner
Agreements pursuant to Paragraph 2.18, SB and HGS may not modify the basic
terms of the Collaboration Agreement which would (1) reduce the scope of
the licenses granted (including but not limited to the licenses to
technology, products, territory and exclusivity) to Synthelabo under this
License Agreement or the (2) change the Therapeutic Protein claiming
mechanisms contained in Collaboration Partner Agreements, except to the
extent already permitted pursuant to Paragraph 8.10 in a manner which would
adversely affect Synthelabo, without obtaining Synthelabo's prior written
and express approval.
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21.4 Synthelabo, SB and HGS guarantee that their respective Affiliates
performing hereunder or receiving any of the benefits herefrom will perform
all obligations under this Agreement as if the Affiliates were signatories
of this Agreement.
22. INDEMNIFICATION
---------------
22.1.SB shall defend, indemnify and hold harmless Synthelabo, HGS, their
respective licensors, licensees, directors, officers, shareholders, agents
and employees, from and against any and all liability, loss, damages and
expense (including reasonable attorneys' fees) as the result of claims,
demands, costs or judgments which may be made or instituted against any of
them arising out of the manufacture, possession, distribution, use,
testing, sale, marketing, promotion or other disposition by or through SB,
or any Third Party granted rights by SB under this Agreement, of any
Synthelabo Product. SB's obligation to defend, indemnify and hold harmless
shall include claims, demands, costs or judgments, whether for money
damages or equitable relief by reason of alleged personal injury (including
death) to any person or alleged property damage, provided, however, the
indemnity shall not extend to any claims against an indemnified party which
result from the gross negligence or willful misconduct of such indemnified
party. SB shall have the exclusive right to control the defense of any
action which is to be indemnified in whole or in part by SB hereunder,
including the right to select counsel acceptable to Synthelabo and/or HGS
to defend Synthelabo or its licensees and/or HGS under this Agreement as
the case may be and to settle any claim, provided that, without the written
consent of Synthelabo and/or HGS (which shall not be unreasonably withheld
or delayed), SB shall not agree to settle any claim against Synthelabo or
any Synthelabo licensee and/or HGS under this Agreement as the case may be,
to the extent such claim has a material adverse effect on Synthelabo or its
licensees and/or HGS under this Agreement as the case may be. The
provisions of this Paragraph shall survive and remain in full force and
effect after any termination, expiration or cancellation of this Agreement
and obligation hereunder shall apply whether or not such claims are
rightfully brought. SB shall require each of its licensees of a Synthelabo
Product to indemnify Synthelabo and/or HGS in a manner consistent with this
Paragraph.
22.2.Synthelabo shall defend, indemnify and hold harmless SB and HGS,
Affiliates of HGS and SB, licensors and licensees of SB and HGS and their
respective directors, officers, shareholders, agents and employees, from
and against any and all liability, loss, damages and expense (including
reasonable attorneys' fees) as the result of claims, demands, costs or
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judgments which may be made or instituted against any of them arising out
of the manufacture, possession, distribution, use, testing, sale, marketing
or promotion or other disposition by or through Synthelabo, or any Third
Party granted rights by Synthelabo under this Agreement, of any Synthelabo
Product. Synthelabo's obligation to defend, indemnify and hold harmless
shall include claims, demands, costs or judgments, whether for money
damages or equitable relief by reason of alleged personal injury (including
death) to any person or alleged property damage, provided, however, the
indemnity shall not extend to any claims against an indemnified party which
result from the gross negligence or willful misconduct of such indemnified
party. Synthelabo shall have the exclusive right to control the defense of
any action which is to be indemnified in whole by Synthelabo hereunder,
including the right to select counsel acceptable to SB and/or HGS to defend
SB or HGS or their licensees under the Agreement, as the case may be, and
to settle any claim, provided that, without the written consent of an
indemnified party (which shall not be unreasonably withheld or delayed),
Synthelabo shall not agree to settle any claim against such indemnified
party under this Agreement as the case may be, to the extent such claim has
a material adverse effect on such indemnified party under this Agreement as
the case may be. The provisions of this Paragraph shall survive and remain
in full force and effect after any termination, expiration or cancellation
of this Agreement and Synthelabo's obligation hereunder shall apply whether
or not such claims are rightfully brought. Synthelabo shall require each of
its licensees (other than SB) of a Synthelabo Product to indemnify SB and
HGS in a manner consistent with this Paragraph.
22.3.A person or entity that intends to claim indemnification under this
Section 22 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any loss, claim, damage, liability or action in respect of
which the Indemnitee intends to claim such indemnification, and the
Indemnitor, after it determines that indemnification is required of it,
shall assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that subject to Paragraph 22.1, 22.2 and 22.3
an Indemnitee shall have the right to retain its own counsel, with the fees
and expenses to be paid by the Indemnitor if Indemnitor does not assume the
defense; or, if representation of such Indemnitee by the counsel retained
by the Indemnitor would be inappropriate due to actual or potential
differing interests between such Indemnitee and any other party represented
by such counsel in such proceedings. The indemnity agreement in this
Section 22 shall not apply to amounts paid in settlement of any loss,
claim, damage, liability or action if such settlement is effected without
the consent of the Indemnitor, which consent shall not be withheld or
delayed unreasonably. The failure to deliver notice to the Indemnitor
within a reasonable time after the commencement of any
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such action, if prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this
Section 22, but the omission so to deliver notice to the Indemnitor will
not relieve it of any liability that it may have to any Indemnitee
otherwise than under this Section 22. The Indemnitee under this Section 22,
its employees and agents, shall cooperate fully with the Indemnitor and its
legal representatives in the investigations of any action, claim or
liability covered by this indemnification. In the event that each party
claims indemnity from the other and one party is finally held liable to
indemnify the other, the Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
23. FORCE MAJEURE
-------------
23.1.If the performance of any part of this Agreement by either party, or of
any obligation under this Agreement, is prevented, restricted, interfered
with or delayed by reason of any cause beyond the reasonable control of the
party liable to perform, unless conclusive evidence to the contrary is
provided, the party so affected shall, upon giving written notice to the
other party, be excused from such performance to the extent of such
prevention, restriction, interference or delay, provided that the affected
party shall use its reasonable best efforts to avoid or remove such causes
of non-performance and shall continue performance with the utmost dispatch
whenever such causes are removed. When such circumstances arise, the
parties shall discuss what, if any, modification of the terms of this
Agreement may be required in order to arrive at an equitable solution.
24. GOVERNING LAW
-------------
24.1.This Agreement shall be deemed to have been made in the Commonwealth of
Pennsylvania and its form, execution, validity, construction and effect
shall be determined in accordance with the laws of the Commonwealth of
Pennsylvania, U.S.A., regardless of choice of law principles of the
Commonwealth of Pennsylvania.
25. SEPARABILITY
------------
25.1.In the event any portion of this Agreement shall be held illegal, void or
ineffective, the remaining portions hereof shall remain in full force and
effect.
25.2.If any of the terms or provisions of this Agreement are in conflict with
any applicable statute or rule of law, then such terms or provisions shall
be deemed inoperative to the extent that they may conflict
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therewith and shall be deemed to be modified to conform with such statute
or rule of law.
25.3.In the event that the terms and conditions of this Agreement are
materially altered as a result of Paragraph 25.1 or 25.2, the parties will
renegotiate the terms and conditions of this Agreement to resolve any
inequities.
26. ENTIRE AGREEMENT
----------------
26.1.This Agreement, entered into as of the date written above, constitutes the
entire agreement between the parties relating to the subject matter hereon
and supersedes all previous writings and understandings. No terms or
provisions of this Agreement shall be varied or modified by any prior or
subsequent statement, conduct or act of either of the parties, except that
the parties may amend this Agreement by written instruments specifically
referring to and executed in the same manner as this Agreement.
26.2.A waiver of any breach or any provision of this Agreement shall not be
construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
26.3.The headings and titles to the Sections and Paragraphs of this Agreement
are inserted for convenience only and shall not be deemed a part hereof or
affect the construction or interpretation of any provision hereof.
27. NOTICES
-------
27.1 Any notice required or permitted under this Agreement shall be sent by air
mail, postage pre-paid, courier or fax to the following addresses of the
parties or such other addresses as may be notified to the parties as
provided herein:
SYNTHELABO
22, avenue Galilee,
92352 Le Plessis-Robinson Cedex France
Attention: Director of Legal Department
fax: 011 33 1 45 37 5804
SB
SMITHKLINE BEECHAM CORPORATION
709 Swedeland Road
P. O. Box 1539
King of Prussia, Pennsylvania 19406
Attention: Vice-President, Advanced
Technologies in Genetics
fax: 610 270-6663
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copy to:
SMITHKLINE BEECHAM CORPORATION
709 Swedeland Road
P. O. Box 1539
King of Prussia, Pennsylvania 19406
Attention: Corporate Intellectual Property
fax: 610-270-4026
HGS
Attention: Senior Vice President Business Development
Human Genome Sciences, Inc.
9410 Key West Avenue,
Rockville, Maryland 20850
fax: 301-309-0092
copy to:
Mr. Elliot M. Olstein
Carella, Byrne, Bain, Gilfillan, Cecchi , Stewart & Olstein
6 Becker Farm Road
Roseland, New Jersey 07068
fax: 201-994-1744
27.2 Any notice required or permitted to be given concerning this Agreement
shall be effective upon receipt by the party to whom it is addressed.
28. ASSIGNMENT
----------
28.1.This Agreement and the licenses herein granted shall be binding upon and
inure to the benefit of the successors in interest of the respective
parties. Neither this Agreement nor any interest hereunder shall be
assignable or may be assigned by any party without the written consent of
the other parties, and any such assignment shall be void and of no effect
provided, however, that a party may assign this Agreement or any of its
rights or obligations hereunder in whole or in part to any Affiliate
competent to fulfill the rights and obligations of this Agreement without
obtaining the consent of the other party; and provided further that any
party may assign this Agreement or any of its rights or obligations
hereunder to any Third Party with which it may merge or consolidate, or to
which it may transfer all or substantially all of its assets to which this
Agreement relates, without obtaining the consent of the
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other parties; provided such Third Party assignee agrees to be bound by all
the terms and conditions of the Agreement and further provided that the
assigning party also remains bound by the terms and conditions of this
Agreement.
29. RECORDING
29.1 SB and HGS shall have the right, at any time, to record, register, or
otherwise notify this Agreement in appropriate governmental or regulatory
offices anywhere in the world, and Synthelabo shall provide reasonable
assistance to SB and HGS in effecting such recording, registering or
notifying.
29.2 Synthelabo shall have the right, at any time, to record, register, or
otherwise notify this Agreement in appropriate governmental or regulatory
offices anywhere in the world, and SB and HGS shall provide reasonable
assistance to Synthelabo in effecting such recording, registering or
notifying.
30. DISPUTE RESOLUTION
------------------
30.1 If there is a tie vote within the Management Committee or Alliance
Committee over an issue within its respective jurisdiction, which tie vote
is not timely solved by such Committee, and if senior management does not
timely resolve any such tie vote, then either SB or Synthelabo may submit
such dispute to binding arbitration in accordance with the UNCITRAL
Arbitration Rules (as at present in force) as modified by this Paragraph
30.1. The place of any arbitration shall be in London and the language of
the proceedings shall be English. The appointing authority for the purpose
of the UNCITRAL Arbitration Rules shall be the Chamber of Commerce and
Industry, Stockholm, Sweden. The number of arbitrators shall be three
appointed in accordance with the UNCITRAL Arbitration Rules. The third
arbitrator appointed shall be a person with extensive experience in
relation to the subject matters in dispute. The third arbitrator shall not
be a national of France, England or the United States. The arbitration
shall consider and decide only issues presented to it by the parties to the
arbitration.
30.2 Senior management of SB, HGS and Synthelabo shall endeavor to resolve all
other disputes under this Agreement.
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32. COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.
IN WITNESS WHEREOF, the parties, through their authorized officers,
have executed this Agreement as of the date first written above.
SMITHKLINE BEECHAM CORPORATION SYNTHELABO
By: ______________________ By: _______________________
Name: ____________________ Name: _____________________
Title: ___________________ Title:_____________________
Date: ____________________ Date: _____________________
SMITHKLINE BEECHAM plc
By: ______________________
Name: ____________________
Title: ___________________
Date: ____________________
HUMAN GENOME SCIENCES, INC.
By: ______________________
Name: ____________________
Title: ___________________
Date: ____________________
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APPENDIX A
Collaboration Partners
(1) Takeda Chemical Industries
(2) Merck KgGA
(3) Schering-Plough Corporation
(4) Another entity to be named or substituted for (1), (2), or (3)
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APPENDIX B
MATERIAL TRANSFER and LICENSE AGREEMENT
MATERIAL TRANSFER AGREEMENT
THIS AGREEMENT is entered into and effective as of the date of last signing by
any of the parties to the Agreement, by and among Synthelabo, located at 22,
avenue Galilee, 92352 Le Plessis-Robinson Cedex France ("Synthelabo") SmithKline
Beecham Corporation, a corporation organized under the laws of the Commonwealth
of Pennsylvania, having a place of business at One Franklin Plaza, Philadelphia,
Pennsylvania 19101, U.S.A. ("SB corp"), Human Genome Sciences, Inc. ("HGS")
located at 9410 Key West Avenue, Rockville, Maryland 20850 and _______, a
not-for-profit INSTITUTE located _______________, and designated representatives
and employees of ______________________ (_________________, its representatives
and employees are hereinafter referred to as "INSTITUTE").
1. The Principal Investigator conducting the research described
herein shall be ________________ who is a designated
representative and employee of INSTITUTE.
2. Subject to availability, SB, HGS and/or SYNTHELABO agrees as
the case may be to provide the material set forth in Appendix
A to INSTITUTE and INSTITUTE agrees such materials are the
property of HGS, Synthelabo and/or SB as the case may be. Such
material and any related biological material or associated
know-how and data that will be received by INSTITUTE from SB,
HGS and/or SYNTHELABO; and any substance that is a derivative
thereof or is replicated therefrom or is an antibody produced
by use thereof are covered by this Agreement. All such
materials shall hereinafter be referred to as the "Material"
or "Materials."
3. The Materials will be used by INSTITUTE only in connection
with the research described in Appendix B (the "Research") and
only for non-commercial research purposes. If INSTITUTE wishes
to carry out research beyond that described in Appendix B,
such research will be carried out only pursuant to a further
agreement signed by each of the parties.
4. INSTITUTE shall not distribute, release, or disclose the
Materials to any other person or entity and shall ensure that
no one will be allowed to take or send the Materials to any
other location, unless written permission is obtained in
advance from SB, SYNTHELABO and HGS. INSTITUTE agrees to
maintain the confidentiality of the
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Materials and any information regarding the Materials, except
to the extent such information:
(a) can be demonstrated to have been in the public domain
or publicly known and readily available to the trade
or the public prior to the date of the disclosure; or
(b) can be demonstrated, from written records, to have
been in the Institute's possession or readily
available to the INSTITUTE from another source not
under obligation of secrecy to SB, HGS or SYNTHELABO
prior to the disclosure; or
(c) becomes part of the public domain or publicly known
by publication or otherwise, not due to any
unauthorized act by the INSTITUTE; or
(d) is independently developed by INSTITUTE without
reference to information or material provided under
this Agreement.
5. The Materials are supplied solely for scientific research
purposes, for use in animals and/or in vitro. THE MATERIALS
SHALL NOT BE USED IN HUMANS.
6. INSTITUTE hereby acknowledges that the Materials are provided
WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED.
SYNTHELABO, SB AND HGS MAKE NO REPRESENTATION THAT THE USE OF
THE MATERIALS WILL NOT INFRINGE ANY PATENT, COPYRIGHT,
TRADEMARK OR OTHER PROPRIETARY RIGHT.
7. In no event shall SB, SYNTHELABO or HGS be liable for any use
of the Materials by INSTITUTE. INSTITUTE hereby agree to
defend, indemnify and hold harmless SB, SYNTHELABO and HGS,
their officers, directors, employees and agents from any loss,
claim, damage, expense or liability, of whatsoever kind or
nature (including attorney's fees), which may arise from or in
connection with this Agreement or the use, handling or storage
of the Materials, by INSTITUTE.
8. INSTITUTE hereby agrees to comply with all applicable
government and National Institutes of Health regulations and
guidelines which are applicable to all uses of the Materials
by the INSTITUTE.
9. Any and all proprietary rights, including but not limited to
patent rights, in and to the Materials shall be and remain in
SB and/or HGS as the case may be.
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10. INSTITUTE agrees to provide SB, HGS and SYNTHELABO with an
advance copy at least thirty (30) days in advance of any
written submission (abstract or paper) or presentation that
makes reference to the Materials. If in the opinion of SB, HGS
and/or SYNTHELABO such submission or presentation discloses
SB, SYNTHELABO and/or HGS proprietary information which
INSTITUTE is obligated to maintain confidential under
Paragraph 4 hereof, SB or SYNTHELABO or HGS shall notify
INSTITUTE within thirty (30) working days of receipt thereof
and INSTITUTE shall delete such proprietary information from
such submission or presentation. If a publication does result
from work using the Materials, INSTITUTE agrees to acknowledge
SB, and/or SYNTHELABO and/or HGS and give credit to SB,
SYNTHELABO and/or HGS scientists, as scientifically
appropriate, based on any direct contribution they may have
made to the work.
11. For the purposes of this Agreement, "Developed Technology"
means any and all data, formulas, information, compositions,
biologics, substances and any intellectual property rights
thereto, including but not limited to, software, copyrights,
patents and patent applications, which result from the
Research and/or use of the Materials and/or information
provided to the INSTITUTE under this Agreement. INSTITUTE
agrees to promptly disclose Developed Technology to
SYNTHELABO, HGS and SB and to provide SYNTHELABO, HGS and SB
with any material which is Developed Technology. HGS shall
have the right to file for and obtain patent protection for
Developed Technology and INSTITUTE agrees to cooperate with
and obtain execution of papers for HGS with respect thereto.
12. During the period of Research, INSTITUTE shall provide to
SYNTHELABO, HGS and SB at least once every six (6) months a
summary of the results of Institute's work under Appendix B
utilizing the Materials.
13. A party may terminate the Research by providing the other
parties with written notice. Upon such termination of the
Research, INSTITUTE will send to SB, HGS and SYNTHELABO a
final report including the results of the Research.
14. INSTITUTE hereby grants to HGS a sole and exclusive worldwide
right and license under Developed Technology to make, have
made, use, sell and have sold any and all products, processes,
apparatuses and compositions of matter (collectively
hereinafter "Product"), including the right to grant
sublicenses.
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15. HGS shall pay to INSTITUTE the following royalties which shall
be due and payable sixty (60) days after June 30 and December
31 for Product sold in the respective half-year period:
a. One percent (1%) of net sale of Product sold by HGS
which where sold is covered by a valid and
enforceable claim of a granted patent licensed to HGS
hereunder; or
b. Ten percent (10%) of royalties received by HGSfrom a
sublicensee hereunder for Product sold by such
sublicensee which in the country where sold is
covered by a valid and enforceable claim of a granted
patent licensed to HGS hereunder.
16. In the event that royalties are to be paid by HGS to an
unaffiliated party for Product for which royalties are also
due hereunder, then the royalty to be paid hereunder shall be
reduced by the amount of royalty to be paid to such
unaffiliated party, but in no event shall the royalty to be
paid hereunder be reduced by more than fifty percent.
17. Any modification of or amendment to this Agreement will
require the written consent of the parties hereto.
18. This Agreement is not assignable by INSTITUTE, whether by
operation of law or otherwise, without the prior written
consent of HGS, SB and SYNTHELABO. Otherwise, this Agreement
is binding upon the successor(s) and assignee(s) of the
parties.
19. This Agreement may be signed in three or more counterparts and
each shall be an original.
IN WITNESS WHEREOF, the parties, intending to be legally bound, have
caused this Agreement to be executed by their respective duly authorized
representatives.
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SYNTHELABO
By: _________________________________
Title: ______________________________
Date:________________________________
SMITHKLINE BEECHAM CORP. HUMAN GENOME SCIENCES, INC.
By: ___________________________ By: _________________________________
Title: ________________________ Title: ______________________________
Date:__________________________ Date:________________________________
AGREED AND CONSENTED TO:
_______________________________
By: ___________________________ _____________________________________
Title: ________________________ Dr. (Principal Investigator)
Date: _________________________ Date: _______________________________
MTA APPENDIX A
--------------
MATERIAL(S)
MTA APPENDIX B
--------------
RESEARCH PLAN
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APPENDIX C
EXAMPLES OF RESEARCH PLANS
TARGET RESEARCH PLAN
--------------------
*Target Identification
*Rationale
- Brief description of hypothesis
- Brief summary of supporting biological data on target
- Expected Indications for Product
*Status of full length cloning and express
- Full length nucleotide sequences
- Plans/estimated dates if expression not yet complete
*Patent status
*Screening Plan
- No description of screen(s) required
- Estimated date of screening start
- Use of target in specificity screens (if any)
- Rough estimate of compound throughput (can be updated)
*Chemical optimization
- No details required
- Estimated date of start/completion (can be updated)
*Plan updates if and when a potential development compound is identified
- R&D product (compound) code #/INN name/generic name
(when available)
- Notification when a compound enters preclinical
development
- Notification when a compound enters clinical development
- Notification when regulatory approvals are sought
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ANTIBODY RESEARCH PLAN
----------------------
*Target (Antigen) Identification
*Rationale
- Brief description of hypothesis
- Expected indications for product
- Brief summary of supporting biological data on target
(antigen)
*Status of Cloning and Expression or Synthesis of Target (Antigen)
- Plans/estimated dates if expression/synthesis of target
(antigen)not yet complete
*Patent Status
*Research Plan
- Estimated date of immunization start
- Estimated date of antibody selection
- Estimated date for development
- Estimated date/notification when an antibody enters
preclinical development
- Estimated date/notification when an antibody enters
clinical development
- Estimated date/notification when regulatory approvals
are sought
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PROTEIN RESEARCH PLAN
---------------------
*Therapeutic Protein Identification
*Rationale
- Brief description of hypothesis
- Expected indications for Product
*Biological data on protein
- Full length cloning
- Expression and purification
The protein preparation(s) used for the in vivo
activity demonstration must be purified to a
(previously agreed) specified level, and evidence of
this purity level must be included in the research
plan.
- In vivo demonstration of relevant pharmacological activity
(along with supporting demonstration of in vitro or ex vivo demonstrations of
activity if available)
In certain instances, in vivo demonstration of
activity will not be possible for scientific reasons.
In these specific cases, an ex-vivo or in vitro
demonstration of activity will be acceptable.
*Patent status (full length gene patent application must have been filed)
*Research and development plan
This plan need not contain detail of these activities, but rather
one-line descriptions of planned activities (with estimates of timing). Not all
of these plans/timings will be available when the initial plan is submitted, but
will be added as part of the yearly update of the plan.
- Further preclinical studies of activity
- Preclinical development
- determination of pharmacokinetic profile
- initiation of toxicology studies
- Steps to completion of IND package
- Certain key milestones in production/scale-up
- Clinical development
- Major phase transition (when available and appropriate)
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