License and Collaboration Agreement - Maxygen Inc. and Novo Nordisk A/S
LICENSE AND COLLABORATION AGREEMENT
between MAXYGEN, INC.
3410 Central Expressway
Santa Clara, California 95051, USA
(hereinafter referred to as MAXYGEN)
and NOVO NORDISK A/S
Novo Alle
DK-2880 Bagsvaerd
Denmark
(hereinafter referred to as NOVO NORDISK)
WHEREAS, MAXYGEN has developed and possesses expertise, know-how and
intellectual property rights within the generic field of in vitro and in vivo
Shuffling (as defined below);
WHEREAS, NOVO NORDISK has developed and possesses expertise, know-how and
intellectual property rights within the field of in vitro and in vivo Shuffling
for creating and screening genetic diversity for use in development of
Industrial Proteins (as defined below);
WHEREAS, MAXYGEN and NOVO NORDISK are both interested in exchanging such
expertise and know-how and granting each other access to use such intellectual
property rights in certain defined fields.
WHEREAS, NOVO NORDISK and MAXYGEN are both interested in further developing
such expertise, know-how and intellectual property rights by using collaborative
efforts; and
WHEREAS, NOVO NORDISK, as part of such collaboration, is willing to fund
certain development activities to be carried out at MAXYGEN's premises in
accordance with the terms described herein.
* CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN 0MITTED AND THE NON-PUBLIC
INFORMATION HAS BEEN FILED SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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NOW, THEREFORE, MAXYGEN and NOVO NORDISK hereby agree as follows:
1. DEFINITIONS
The following definitions shall control the construction of each of the
following terms wherever they appear in this Agreement:
The term "Affiliate" shall mean any corporation or other entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the designated party but only for
so long as such relationship exists. For the purposes of this section,
"Control" shall mean ownership of at least fifty (50) percent (or such lesser
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percent as may be the maximum that may be owned by foreign interests pursuant to
the laws of the country of incorporation) of the shares of stock entitled to
vote for directors in the case of a corporation and at least fifty (50) percent
(or such lesser percent as may be the maximum that may be owned by foreign
interests pursuant to the laws of the country of domicile) of the interests in
profits in the case of a business entity other than a corporation.
The term "Agreement" shall mean this present License and Collaboration
Agreement.
The term "Assay Technology" shall mean methods wherein genetic diversity
generated by Shuffling is selected or screened to identify the subset of genetic
variants for inclusion in a subsequent application of Shuffling or to identify
the desired product.
The term "Development Program" shall mean research and development
activities within the areas outlined in Exhibit A attached hereto, as
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supplemented or amended from time to time according to mutual written agreement
between the Parties. Cf. Also Section 8.1.
The term "Effective Date" shall mean the date of the last signature hereto.
The term "Industrial Protein Expression Pathway" shall mean any evolvable
process within a cell that leads to increased expression of the desired form of
an Industrial Protein, including, but not limited to evolution of enzymes and
compounds that modify or transport proteins per se, creation of improved
processes of cellular DNA uptake, evolution of stable, replicating genetic
elements such as plasmids, as well as cellular processes or substances that are
genetically encoded but not enzymatic, for example, lipid compositions of a cell
membrane that affect expression of the desired form of the Industrial Protein.
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The term "Industrial Protein" shall mean [*******] for production, sale
and/or use in the NOVO NORDISK Field or, upon being activated in accordance with
Section 7.3 hereof, a NOVO NORDISK Preferred Area.
The term "In Vitro Shuffling" shall mean Shuffling where the gene
recombination event occurs outside of a cell, but shall not include any Assay
Technology.
The term "In Vivo Shuffling" shall mean Shuffling where the gene
recombination event occurs inside of a cell, but shall not include any Assay
Technology.
The term "Jointly Owned Patents" shall mean any patent applications and/or
patents based on inventions made in the course of the Development Program,
including any reissued patents, reexamined patents, divisions, renewals,
continuations and continuations-in-part, substitutions, extensions or foreign
counterparts thereof.
The term "Licensed Product" shall mean any Industrial Protein (i) derived
by Shuffling or (ii) expressed, made or produced by the use of a vector,
organism or other material that has been improved by Shuffling, regardless of
whether such Industrial Protein is Shuffled, in either case in respect of which
the developing, making, having made, using or selling is covered by a Valid
Claim in the relevant country and/or which is developed and/or manufactured
through the use of MAXYGEN Know-How and including, but not limited to, any
Industrial Protein developed or manufactured by application or use of an
Industrial Protein or such improved vector, organism or other material for such
purpose.
The term "MAXYGEN Break-through Invention" shall mean any invention made by
MAXYGEN during the term of this Agreement but outside the scope and activities
of the Development Program which fulfills the following criteria:
(a) The MAXYGEN Break-through Invention shall be an invention that is the
result of [*******].
(b) The MAXYGEN Break-through Invention shall be patented or patentable.
The term "MAXYGEN Future Patents" shall mean any patent applications filed
by or on behalf of MAXYGEN on or after the Effective Date and any patents issued
thereon, provided the inventions covered by such patents and/or patent
applications have been made by MAXYGEN before the expiry or termination of the
Development Program but outside the scope of the Development Program and,
furthermore, provided such inventions consist of Shuffling methods and are
applicable within the NOVO NORDISK Field and, finally, provided such patent
applications would have been included in Exhibit C by virtue of their comprising
Shuffling technology had they been filed prior to the Effective Date.
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The term "MAXYGEN Field" shall mean all applications or uses of Shuffling
which fall outside the NOVO NORDISK Field. Thus, the MAXYGEN Field shall
include, but not be limited to, [*******], excluding, however, the NOVO NORDISK
Field and existing specific projects of NOVO NORDISK as specified in Exhibit B.
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The term "MAXYGEN Know-How" shall mean any proprietary and confidential
know-how, other than MAXYGEN Patents, MAXYGEN Future Patents, Jointly Owned
Patents, and MAXYGEN Breakthrough Inventions controlled by MAXYGEN on or after
the Effective Date, including technical data, experimental results,
specifications, techniques, methods, technology, processes, recipes and written
materials, all of which shall be related exclusively to Shuffling. For the
purposes of this definition, the term "controlled" shall mean owned and/or
having the ability to grant licenses or sublicenses to and/or disclose MAXYGEN
Know-How without violating the terms of any bona fide agreement under which
MAXYGEN may have acquired such rights.
The term "MAXYGEN Patents" shall mean the patents and patent applications
listed in Exhibit C attached hereto or referred to in Section 2.4 hereof and any
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patents issued on any such patent applications and including any reissued
patents, re-examined patents, divisions, renewals, continuations and
continuations in part, substitutions, extensions or foreign counterparts
thereof.
The term "Metabolic Pathways" shall mean a process using cells or cell
lysates from a single organism that utilizes [*******] except for the use in
Industrial Protein expression in the NOVO NORDISK Field.
The term "Minimum Royalty Level" shall have the meaning set forth in
Section 3.5.
The term "Net Proceeds of Sales" shall mean NOVO NORDISK's and its
Affiliates' and sublicensees' (other than agents, distributors, toll
manufacturers, customers and other end users that are not Affiliates of NOVO
NORDISK) gross receipts from sales of Licensed Products when invoiced to a third
party, less the following deductions actually allowed and taken by such third
parties and not otherwise received by or reimbursed to NOVO NORDISK or its
Affiliates or sublicensees:
(a) trade, cash and/or quantity discounts allowed, if any;
(b) refunds, rebates or allowances which effectively reduce the selling
price;
(c) actual returns and allowances;
(d) credits, if any, to customers on account of retroactive price
reductions;
(e) value added taxes and sales taxes;
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(f) duties;
(g) freight, insurance and other transportation charges to the extent added
to the sales price and set forth separately as such on the total amount
invoiced; and
(h) bad debt.
Sales of Licensed Products between NOVO NORDISK and its Affiliates or
between two or more of NOVO NORDISK's Affiliates shall not be considered
included within Net Proceeds of Sales.
The term "NOVO NORDISK Field" shall mean the use of Shuffling for the
development, production and/or sale of Industrial Proteins in the areas
described in Exhibit D attached hereto and, upon its activation in accordance
---------
with the provisions of Section 7.3 hereto each Preferred Area, excluding,
however, such use for the purpose of [*******] and excluding existing specific
projects of MAXYGEN as specified in Exhibit E. The NOVO NORDISK Field shall not
include the cure, treatment, mitigation, prevention or diagnosis of human or
animal diseases, except as set forth in Section 2.2 below.
The term "NOVO NORDISK Future Patents" shall mean any patent applications
filed on or after the Effective Date solely by or on behalf of NOVO NORDISK's
Enzyme Business (as organized and operated as a separate division according to
objective and bona fide criteria) and any patents issued thereon, provided the
inventions covered by such patents and/or patent applications have been made by
NOVO NORDISK before expiry or termination of the Development Program but outside
the scope of the Development Program and, furthermore, provided such inventions
consist of Shuffling methods and, finally, provided such patent applications
would have been included in Exhibit F by virtue of their comprising Shuffling
technology had they been filed prior to the Effective Date.
The term "NOVO NORDISK Patents" shall mean the patents and patent
applications listed in Exhibit F attached hereto and any patents issued on any
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such patent applications, including any reissued patents, re-examined patents,
divisions, renewals, continuations and continuations-in-part, substitutions,
extensions or foreign counterparts thereof.
The term "NOVO NORDISK Preferred Areas" shall mean the fields of
application of Industrial Proteins described in Exhibit G attached hereto and
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any other fields of interest selected by NOVO NORDISK in accordance with the
procedures set forth in Section 7 below. The NOVO NORDISK Preferred Areas shall
not include the cure, treatment, mitigation, prevention, or diagnosis of human
or animal diseases.
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The term "Party" shall mean either MAXYGEN or NOVO NORDISK, as appropriate,
whereas the term "Parties" shall mean MAXYGEN and NOVO NORDISK jointly.
The term "Shuffling" shall mean new methods (as of 17 February 1994) for
recombination of genetic material for creation and screening of genetic
diversity, comprising methods included in or similar to those described in
Exhibits C and F. Shuffling may be either in vivo or in vitro, but does not
include any Assay Technology. [*******]
The term "Valid Claim" shall mean a claim of an issued and unexpired patent
in the relevant country within the MAXYGEN Patents, the Jointly Owned Patents,
the MAXYGEN Future Patents and/or the MAXYGEN Breakthrough Inventions that has
not been held unenforceable, unpatentable or invalid by a court or other
governmental agency of competent jurisdiction or that has not been admitted to
be invalid or unenforceable through reissue, disclaimer or otherwise.
The term "Working Group" shall mean the collaborative body consisting of
representatives from both Parties, the tasks and working procedures of which
have been further outlined in Section 8.4 below.
2. EXCHANGE OF LICENSES
2.1 Grant of Licenses from MAXYGEN to NOVO NORDISK. MAXYGEN hereby grants
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to NOVO NORDISK a worldwide, royalty-bearing (in accordance with
below), exclusive, irrevocable (except as otherwise stated in Section 9) and
sublicensable right and license to practice the MAXYGEN Patents, the MAXYGEN
Know-How, the MAXYGEN Future Patents, the Jointly Owned Patents and the MAXYGEN
Break-through Inventions to make, have made, use, promote, market distribute and
sell Licensed Products within the NOVO NORDISK Field and any NOVO NORDISK
Preferred Areas which may be activated in accordance with Section 7 hereof.
2.2 Grant of Licenses from NOVO NORDISK to MAXYGEN. NOVO NORDISK hereby
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grants to MAXYGEN a worldwide, royalty-free, irrevocable (except as otherwise
stated in Section 9) and sublicensable right and license to practice, within the
MAXYGEN Field, the NOVO NORDISK Patents, NOVO NORDISK Future Patents and the
Jointly Owned Patents and any improvements by NOVO NORDISK of the MAXYGEN Know-
How to develop, make, have made, use, promote, market, distribute and sell
products. Said license shall be exclusive except as otherwise stated in Exhibits
F and H and except for use of NOVO NORDISK Patents and NOVO NORDISK Future
Patents for the cure, treatment, mitigation, prevention or diagnosis of human or
animal diseases, with respect to which this license shall be co-exclusive with
NOVO NORDISK. MAXYGEN's right to sublicense hereunder shall not include
sublicensing to third parties which, at the time of granting the sublicense,
have industrial enzymes as their primary business; in the event that MAXYGEN
should sublicense its
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rights hereunder to any third party which, to the best of MAXYGEN's knowledge,
has any activities within the industrial enzymes field, MAXYGEN shall
immediately inform NOVO NORDISK of the fact that such sublicense has been
granted without necessarily disclosing the field and terms of such sublicense.
Nothing herein shall prevent NOVO NORDISK from scientific or commercial
exploitation either by itself or through third parties (such as, but not limited
to, toll manufacturers, agents or distributors) of the NOVO NORDISK Patents and
the NOVO NORDISK Future Patents for the cure, treatment, mitigation, prevention,
or diagnosis of human or animal diseases.
2.3 Undisclosed MAXYGEN Patents as of the Effective Date. Any and all
----------------------------------------------------
patents or patent applications belonging to MAXYGEN as of the Effective Date and
relevant for use within the NOVO NORDISK Field or NOVO NORDISK Preferred Areas
which have not been disclosed, fully or in part, by MAXYGEN to NOVO NORDISK as
of the Effective Date shall be fully disclosed by MAXYGEN no later than fifteen
(15) days after the Effective Date and automatically be considered part of the
MAXYGEN Patents.
2.4 Undisclosed NOVO NORDISK Patents as of the Effective Date. NOVO
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NORDISK shall use diligent efforts within 60 (sixty) days from the Effective
Date to disclose to MAXYGEN as soon as practicable any and all patents or patent
applications belonging to NOVO NORDISK and relating to Shuffling as of the
Effective Date and relevant for use within the MAXYGEN Field which have not been
disclosed, fully or in part, by NOVO NORDISK to MAXYGEN as of the Effective Date
each of which shall automatically be considered part of the NOVO NORDISK
Patents.
3. ROYALTIES
3.1 Royalty Rates. The following royalty rates shall apply and be payable
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by NOVO NORDISK with regard to NOVO NORDISK's and its Affiliates' sales of
Licensed Products:
Royalty Rate
Technology Applied by calculated on Net
NOVO NORDISK Proceeds of Sales
------------------------------------------ -----------------
MAXYGEN Patents: [*******]
MAXYGEN Know-How (subject to
fulfillment of the conditions outlined in
Section 3.2 hereof): [*******]
MAXYGEN Future Patents: [*******]
Jointly Owned Patents: [*******]
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MAXYGEN Break-through Inventions: [*******]
3.2 Royalties in Respect of MAXYGEN Know-How. NOVO NORDISK's payment of
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royalties in respect of MAXYGEN Know-How on Net Proceeds of Sales of products
not covered by a Valid Claim shall be subject to the following:
(a) To the extent that NOVO NORDISK can document by competent evidence
that any third party is relying on [*******] in its development and/or
manufacturing of a product which is sold, in an amount equal to at
least [*******] percent of the sales by NOVO NORDISK in the relevant
country, in competition, either directly or indirectly, with an
Industrial Protein sold in such country by NOVO NORDISK, NOVO NORDISK
shall be relieved from paying royalties on Net Proceeds of Sales in
such country of the relevant Industrial Protein based solely on
MAXYGEN Know-How.
(b) The MAXYGEN Know-How used by NOVO NORDISK must relate to [*******]. It
is understood that royalties shall, nonetheless, become due at a rate
of [*******] per cent of Net Proceeds of Sales in respect of sales in
the USA of Licensed Products based on NOVO NORDISK's use of MAXYGEN
Know-How related to [*******], provided such use has taken place in
the period lasting from the Effective Date to the date of the first
publication of the MAXYGEN Know-How in question and furthermore
provided that [*******].
3.3 Notwithstanding Section 3.2, to the extent that NOVO NORDISK can
document by competent written evidence that it had developed, prior to the
earlier of the disclosure of information by MAXYGEN to NOVO NORDISK pursuant to
the Secrecy Agreement between the Parties dated March 7, 1997, or the Effective
Date, know-how or technology which is substantially similar to the MAXYGEN know-
how in question, no royalties shall be payable by NOVO NORDISK on the basis
solely of such MAXYGEN Know-How unless other MAXYGEN Know-How that has not been
so developed by NOVO NORDISK is also utilized to develop, make, have made, use,
promote, market, distribute or sell Licensed Products.
3.4 Only One Royalty Payable. The above royalty rates shall not be
------------------------
applied cumulatively. Thus, only one royalty shall be paid in respect of each
sale of any Licensed Product by NOVO NORDISK or its Affiliates, namely the
highest applicable rate.
3.5 Minimum Royalty.
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(a) If the royalties otherwise payable hereunder by NOVO NORDISK in any
year beginning with the fourth year from the Effective Date are less
than the Minimum Royalty Levels set forth below, NOVO NORDISK shall
pay to MAXYGEN [*******] percent of the difference between the Minimum
Royalty Level for such year as stated below and the total royalties
otherwise
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payable hereunder including, but not limited to, royalties
attributable to MAXYGEN Know-How:
Year Minimum Royalty Level
----- ---------------------
[*******] [*******]
[*******] [*******]
[*******] [*******]
(b) An accumulated Minimum Royalty Level covering all NOVO NORDISK
Preferred Areas that have been activated shall be set, as to amount
and date of application as agreed to by the Parties, upon the
activation by NOVO NORDISK of each NOVO NORDISK Preferred Area.
(c) If NOVO NORDISK does not timely pay to MAXYGEN the stated Minimum
Royalty Level under either subparagraph (a) or subparagraph (b) above
by the end of sixty (60) days after the end of the applicable year,
the licenses granted to NOVO NORDISK by MAXYGEN shall [*******] within
the NOVO NORDISK Field and/or the NOVO NORDISK Preferred Areas, as
appropriate. In the event that MAXYGEN, after the possible [*******]
of NOVO NORDISK's license [*******] should grant a license to a third
party such license shall be granted on terms which, taken as a whole,
are not more favorable to such third party than the terms applying to
NOVO NORDISK's [*******] license.
4. PAYMENT OF AND ACCOUNTING FOR ROYALTIES
4.1 Keeping of Records.
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NOVO NORDISK shall keep, and impose on its Affiliates to keep, complete and
correct records of Net Proceeds of Sales of Licensed Products for a period of
not less than three (3) years after the making of a royalty payment under this
Agreement.
4.2 Payment Term. All royalty payments under this Agreement shall become
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due and payable sixty (60) days after the last day of the calendar quarter in
which the corresponding sales of Licensed Products were made. Payment shall be
accompanied by a report on a country-by-country basis, showing the Net Sales in
each segment of the Field as listed on Exhibit D used in the computation of the
royalties payable. Any Minimum Royalty shall become due and payable sixty (60)
days after the end of the applicable year.
4.3 Currency and Exchange Rate. NOVO NORDISK shall make all payments to
--------------------------
MAXYGEN under this Agreement in U.S. Dollars and to a bank account to be
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designated by MAXYGEN. Net Proceeds of Sales shall be calculated on the basis of
the rates of exchange as quoted by the Wall Street Journal (U.S.A. Edition) on
the last business day of the calendar quarter in which the corresponding sales
of Licensed Products were made.
4.4 Auditor Statements. Upon MAXYGEN's request NOVO NORDISK shall provide
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MAXYGEN with a statement from NOVO NORDISK's external auditors certifying the
correctness of NOVO NORDISK's royalty payments made hereunder. The statement
shall be provided at MAXYGEN's request and expense and no more than once in any
given calendar year.
4.5 Audit of NOVO NORDISK's Records. NOVO NORDISK shall allow MAXYGEN to
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appoint a firm of independent certified public accountants to whom NOVO NORDISK
has no reasonable objection. NOVO NORDISK shall give such accountant access,
during ordinary business hours and subject to a reasonable advance notice, to
such records of NOVO NORDISK as are necessary to verify the accuracy of any
royalty payments made or payable under this Agreement. Such access shall be
granted no more than once in a calendar year, at MAXYGEN's request and expense.
The independent certified public accountants shall be under a confidentiality
obligation to NOVO NORDISK to disclose to MAXYGEN in its report only the amount
and accuracy of royalty payments made or payable under this Agreement. In the
event it is determined that the records of NOVO NORDISK indicate that the amount
of royalties payable under this Agreement is more than that actually paid to
MAXYGEN, NOVO NORDISK shall pay such difference to MAXYGEN within thirty (30)
days of such accountant's report, and if that difference is greater than
[*******] percent [*******] of the amounts actually paid then the costs and
expenses of said independent certified public accountant shall be borne by NOVO
NORDISK.
5. WARRANTIES
5.1 MAXYGEN represents and warrants to NOVO NORDISK that:
(a) it has the right to grant to NOVO NORDISK the license granted
under Section 2.1 hereof and that said license does not conflict
with or violate the terms of any agreement between MAXYGEN and
any third party.
(b) it has duly informed NOVO NORDISK, prior to the Effective Date,
of administrative or judicial proceedings, if any, contesting the
inventorship, ownership, validity or enforceability of any
element of the MAXYGEN Patents.
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(c) it has not as of the Effective Date and it will not in the future
license the MAXYGEN Know-How to any legal entity competing with
NOVO NORDISK in the NOVO NORDISK Field or the NOVO NORDISK
Preferred Areas for use in such Field or Areas so long as NOVO
NORDISK retains rights therein pursuant to this Agreement.
(d) is unaware of any present patents or patent applications relating
to Shuffling of third parties, domestic or foreign, which would
be infringed by NOVO NORDISK in exercising its rights granted
under Section 2.1.
5.2 Warranties of NOVO NORDISK.
--------------------------
(a) it has the right to grant to MAXYGEN the license granted under
Section 2.2 hereof and that said license does not conflict with
or violate the terms of any agreement between NOVO NORDISK and
any third party.
(b) it has duly informed MAXYGEN, prior to the Effective Date, of
administrative or judicial proceedings, if any, contesting the
inventorship, ownership, validity or enforceability of any
element of the NOVO NORDISK Patents.
(c) is unaware of any present patents or patent applications relating
to Shuffling of third parties, domestic or foreign, that would be
infringed by MAXYGEN in exercising its rights granted under
Section 2.2.
6. PATENT PROSECUTION
6.1 Procedures. For all patent families licensed hereunder, the licensor
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shall inform about and, to the extent reasonably practicable as specified below,
give the licensee a reasonable opportunity to discuss and influence major
prosecution events. The licensor shall nonetheless have the final decision as to
any such matter unless the Working Group shall otherwise decide.
Such major prosecution events shall include official communications with
the examining division at European Patent Office and United States' Patent &
Trademark Office in the form of patent applications, including divisional
applications, reissue applications, continuations and continuations in part,
requests for examination, including reexamination, written opinions, amended
claims, final rejections and notices of allowance.
MAXYGEN and NOVO NORDISK shall each be responsible to utilize commercially
reasonable efforts to file, prosecute and maintain, at its expense, all patents
and patent applications included in their respective patent listings.
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The licensor shall use reasonably diligent efforts to provide to licensee
such communication from the licensor to the examining division no later than two
(2) weeks prior to the official communication.
The licensor shall use reasonably diligent efforts to disclose to the
licensee within two (2) weeks from its receipt such communications from the
examining division.
The licensee shall have the right to enforce, at its own expense, licensed
patent rights licensed to it within its field, i.e., the NOVO NORDISK Field or
the MAXYGEN Field, as appropriate. The licensee must inform the licensor of such
intention no later than three (3) months prior to initiation of such action. The
licensor must by written notice, within four (4) weeks from the date of receipt
of such information, decide to approve of such action or to delay it by up to a
further four (4) weeks' period. The licensor's comments and suggestions, if any,
in relation to the intended action shall be duly considered by the licensee. If
the licensee does not bring any such suit, the licensor shall have the right to
enforce, at its own expense, the said licensed patent rights. In any event the
Parties shall assist each other and cooperate in any such litigation. If NOVO
NORDISK shall institute any such enforcement with respect to uses of Shuffling
to which MAXYGEN would be entitled to royalties if NOVO NORDISK was so utilizing
Shuffling, MAXYGEN shall be entitled to twenty-five (25) percent of any cash
recovery by NOVO NORDISK after NOVO NORDISK has first recovered its reasonable
costs of enforcement. If MAXYGEN shall institute any such enforcement with
respect to uses of Shuffling in the NOVO NORDISK Field, NOVO NORDISK shall be
entitled to twenty-five (25) percent of any cash recovery by MAXYGEN after
MAXYGEN has first recovered its reasonable costs of enforcement.
Notwithstanding anything to the contrary herein, NOVO NORDISK shall be
fully entitled, at its own cost to enforce its patents within the field of cure,
treatment, mitigation, prevention or diagnosis of human or animal diseases.
The Parties shall keep one another informed of the status of and of their
respective activities regarding any litigation or settlement thereof concerning
the foregoing.
Neither Party shall make any settlement of any litigation or claim which
will result in the grant to any third party of any rights that will diminish the
other Party's rights granted hereunder.
NOTWITHSTANDING THE FOREGOING, NEITHER PARTY MAKES ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY PATENT
RIGHTS OR KNOW-HOW. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL
DAMAGES OF ANY KIND.
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6.2 Invalidity or Unenforceability. In the event of any part of the
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NOVO NORDISK Patents, the NOVO NORDISK Future Patents and/or the Jointly Owned
Patents being declared invalid or unenforceable in a final judgment or
administrative decision, MAXYGEN shall not be entitled to terminate this
Agreement.
In the event of any part of the MAXYGEN Patents, the MAXYGEN Future
Patents, the Jointly Owned Patents and/or any patent(s) included in the MAXYGEN
Breakthrough Inventions being declared invalid or unenforceable in a final
judgment or administrative decision, NOVO NORDISK shall not be entitled to
terminate this Agreement. NOVO NORDISK shall no longer have any obligation to
pay royalties on Net Proceeds of Sales of a product to MAXYGEN after final
judgment or administrative decision that determines that there is no material
Valid Claim included in any MAXYGEN Patent or MAXYGEN Future Patent that covers
the product, on a country-by-country basis, and MAXYGEN Know-How has not been
used to develop or manufacture such Licensed Product. Moreover, NOVO NORDISK
shall be entitled to [*******] provided that NOVO NORDISK shall not be entitled
during any [*******] to [*******] an amount higher than [*******] and,
furthermore provided that NOVO NORDISK shall not be entitled to make any
[*******] unless it has been met with competition which has reached a level
corresponding to at least [*******] of NOVO NORDISK's own sales of the same
Industrial Protein in the country in question.
7. NOVO NORDISK PREFERRED AREAS
7.1 Already Defined NOVO NORDISK Preferred Areas.
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The fields of application and production for Industrial Proteins described
in Exhibit F hereof shall be considered to be included in the NOVO NORDISK
---------
Preferred Areas, until otherwise determined by NOVO NORDISK as per Section 7.2
below.
7.2 Procedures for Selection of New NOVO NORDISK Preferred Areas.
------------------------------------------------------------
Altogether, NOVO NORDISK shall be entitled, at any time, to reserve up to
[*******] NOVO NORDISK Preferred Areas as fields of potential interest for NOVO
NORDISK to which to expand the license granted under Section 2.1 above as set
forth in Exhibit F. Notwithstanding anything to the contrary herein, NOVO
NORDISK shall be entitled to replace any selected NOVO NORDISK Preferred Areas
with a different Preferred Area insofar as such replacement would not be
obstructed by MAXYGEN's bona fide obligations vis-a-vis third parties entered
into in the meantime or developments made by or on behalf of MAXYGEN.
7.3 Procedures for Activation of NOVO NORDISK Preferred Areas. NOVO
---------------------------------------------------------
NORDISK shall activate its right to a Preferred Area by giving notice to MAXYGEN
in accordance with Section 17 hereof, in which event the Parties shall enter
into a license to be governed by the basic licensing terms contained herein and
terminating upon termination or expiration of the basic license grant hereunder
(Sections 2 through 7 and
13
<PAGE>
9), it being understood, however, that the royalty rates and level of Annual
Maintenance Fee and a work plan therefor shall be negotiated in good faith on a
case-by-case basis. Unless MAXYGEN's technology in question qualifies as MAXYGEN
Break-through Inventions, the royalty rate payable by NOVO NORDISK to MAXYGEN
shall in no event exceed [*******] percent and shall in no event be lower than
[*******] percent.
7.4 Notwithstanding the foregoing:
(a) if MAXYGEN should receive a bona fide offer initiated by a third
party with respect to such Preferred Area, it shall have the right
so to inform NOVO NORDISK and provide to NOVO NORDISK a right of
first negotiation with respect to such Area on terms at least as
favorable to NOVO NORDISK as those to be proposed to the third
party or that would be reasonable and in the spirit of this
Agreement if MAXYGEN has determined to commit its own resources.
If NOVO NORDISK does not accept such terms within forty-five (45)
days, MAXYGEN shall be free to enter into such agreement with the
third party.
(b) If MAXYGEN should determine to commit its own resources to a
Preferred Area, it shall be required first to offer to NOVO
NORDISK the opportunity for sixty (60) days to activate the
Preferred Area in question in accordance with Section 7.3 above.
If NOVO NORDISK does not elect to activate such Preferred Area on
its own behalf, MAXYGEN shall be free to proceed with developments
in such Preferred Area on its own behalf.
8. DEVELOPMENT COLLABORATION
8.1 Scope of Development Collaboration. The Parties hereby undertake to
----------------------------------
jointly carry out a scientific development cooperation in accordance with the
Development Program with the purpose of improving the protection of the
technology and the exclusive position status provided by the MAXYGEN Patents and
the NOVO NORDISK Patents, both within the MAXYGEN Field and the NOVO NORDISK
Field. The more detailed description of activities together with a time schedule
shall be agreed in writing between the Parties no later than sixty (60) days
after the Effective Date. The development work itself shall commence no later
than 1 January 1998.
8.2 Exchange of Information and Results. Each of MAXYGEN and NOVO
-----------------------------------
NORDISK shall, free of separate charge, fully and promptly disclose to each
other all inventions that pertain to Shuffling, whether or not patentable, made
by it or on its behalf in the course of the Development Program. Furthermore,
each Party shall disclose to the other Party any know-how, data, technology,
methods or other information in its possession which could facilitate the other
Party's performance of its specific tasks under the Development Program, which
may only be used by the other Party to perform its specific tasks under the
Development Program.
14
<PAGE>
8.3 Performance of Obligations. Each Party shall use its best efforts
--------------------------
to diligently carry out its tasks under the Development Program.
8.4 Working Group. A Working Group consisting of three (3) members
-------------
appointed by MAXYGEN and three (3) members appointed by NOVO NORDISK shall be
established in order to monitor the progress of the cooperation under this
Agreement including the Development Program.
Furthermore, the Working Group shall in good faith discuss questions
related, but not limited to:
. goals and time frame of the cooperation,
. setting of priorities within the scope of the Development Program,
. patent issues, e.g., filing, strategy, determination of inventorship,
etc.,
. possible change to or abandonment of Development Program,
. possible conflicts of interest, and
. inclusion of any third parties or any intellectual property rights or
know-how belonging to third parties in the project.
During such discussions the Parties shall aim at reaching unanimity.
However, in the absence of such unanimity, the Working Group shall not have any
decision powers, but shall refer the matter to the top management of NOVO
NORDISK and MAXYGEN, respectively, for settlement.
The Working Group shall meet whenever requested by either Party and
whenever deemed relevant by the Working Group. At least one (1) member from each
side shall participate at each meeting. Furthermore, relevant scientific or
other staff from either Party may attend. The members of the Working Group shall
communicate to the extent necessary in order to coordinate their efforts and
shall be responsible for the drafting of detailed minutes and records from each
meeting.
8.5 Funding by NOVO NORDISK. In consideration of the rights granted to
-----------------------
NOVO NORDISK hereunder, NOVO NORDISK shall, in addition to paying royalties
under Section 3 and granting a cross-license under Section 2.2, compensate
MAXYGEN for MAXYGEN's performance of its tasks under the Development Program.
Unless modified by mutual agreement in writing, said compensation shall amount
to an annual amount of [*******] out of which [*******] shall be considered as a
fixed amount whereas the remaining [*******] shall cover the [*******] MAXYGEN
scientists
15
<PAGE>
referred to below. The annual funding amount shall be paid in advance in
quarterly installments of [*******] each, the first of which will become due for
payment on the Effective Date. MAXYGEN undertakes to designate and assign at
least [*******] scientists with expertise in Shuffling towards full-time work
under the Development Program during the term of such funding by NOVO NORDISK.
8.6 Ownership of Patents and Technology. MAXYGEN Patents and MAXYGEN
--- -----------------------------------
Know-How are and shall continue to be the exclusive property of MAXYGEN, subject
to the licenses granted hereunder.
NOVO NORDISK Patents are and shall continue to be the exclusive property of
NOVO NORDISK, subject to the licenses granted hereunder.
Jointly Owned Patents shall be considered the joint property of and shall
be co-assigned to each of the Parties, the commercial exploitation of which,
however, shall be subject to the licenses, rights and restrictions outlined in
this Agreement.
MAXYGEN Break-through Inventions and MAXYGEN Future Patents, if any made,
shall become the property of MAXYGEN subject to the licenses granted hereunder.
NOVO NORDISK Future Patents, if any, shall be the exclusive property of
NOVO NORDISK subject to the licenses granted hereunder.
8.7 Filing, Prosecution and Maintenance of Jointly Owned Patents. The
------------------------------------------------------------
Parties will mutually agree upon which of them shall be responsible for filing,
prosecution and maintenance of Jointly Owned Patents. In case all inventors are
employed by the same Party, that Party shall be responsible for filing,
prosecution and maintenance of such Jointly Owned Patents. The expenses of such
filing, prosecution and maintenance shall be equally shared by the Parties
unless one of the Parties assigns all of its rights, on a country-by-country
basis, to the other Party.
8.8 Publication of Results. Neither Party shall be entitled to publish
----------------------
the results obtained under the Development Program, without the approval of the
other Party.
9. TERM AND TERMINATION
9.1 Term and Expiry. This Agreement shall enter into force on the
---------------
Effective Date and shall expire five (5) years after the Effective Date,
provided that NOVO NORDISK may reduce its funding obligation for the Development
Program under Section 8 hereof by up to [*******] beginning with the third year
after the Effective Date by notice to MAXYGEN not later than twelve (12) months
prior to the year for which the reduction shall be effective. Unless due to
breach of agreement or warranties
16
<PAGE>
hereunder by the other Party, neither Party may terminate this Agreement with
respect to the licenses and options exchanged hereunder. Notwithstanding the
expiry of this Agreement, the licenses granted hereunder shall continue in force
under the terms and conditions contained herein including the continuing
obligation to pay royalties on Net Sales of Licensed Products, on a country-by-
country basis, for the life of any patent containing a Valid Claim in the
relevant country, provided, however, that NOVO NORDISK shall have no further
right to activate any NOVO NORDISK Preferred Area that it has not bona fidely
activated prior to the expiry, but NOVO NORDISK nonetheless shall have the right
of first opportunity for a period of ninety (90) days after the expiry if
MAXYGEN should decide to pursue development or license of such lapsed NOVO
NORDISK Preferred Area with a third party. In such event, MAXYGEN shall advise
NOVO NORDISK from time to time of its decision to proceed with a third party and
the terms of a proposed agreement with NOVO NORDISK and NOVO NORDISK shall have
ninety (90) days thereafter to advise MAXYGEN whether it desires to accept such
proposed agreement. Similarly, NOVO NORDISK may propose to MAXYGEN its desire to
proceed with development of such a lapsed NOVO NORDISK Preferred Area and
MAXYGEN shall within sixty (60) days thereafter advise NOVO NORDISK of the terms
of a proposed agreement, and NOVO NORDISK shall have ninety (90) days thereafter
to advise MAXYGEN whether it desires to accept such proposed agreement. In
either event if NOVO NORDISK does not accept the agreement proposed by MAXYGEN,
MAXYGEN shall have six (6) months thereafter to enter into an agreement with a
third party on terms and conditions, taken as a whole, that are not materially
more favorable to such third party than those proposed to NOVO NORDISK. If
MAXYGEN is unable to enter into such agreement with a third party by the end of
such six-month period, it shall again offer to NOVO NORDISK the right of first
opportunity before entering into any such agreement with a third party.
9.2 Termination Due to Breach of Contract. If a Party to this Agreement
-------------------------------------
commits a material breach of any provision of this Agreement and fails to remedy
such breach within thirty (30) days after written notice thereof from the other
Party stating the intent to terminate the Party not in default may, at its
option, terminate this Agreement by giving fifteen (15) days prior written
notice to the Party in default. Said right of termination shall be in addition
to any remedies for damages and/or injunctive relief and may be exercised by the
non-defaulting Party whilst upholding the licenses granted to that Party under
Section 2.1 or 2.2, as appropriate, on the relevant licensing terms contained
herein.
9.3 Survival of Provisions.
----------------------
(a) Expiration or termination of this Agreement shall not terminate
the obligation of either Party to make any payments to the other
Party that have accrued prior to the date of expiry or
termination.
17
<PAGE>
(b) The provisions contained in Sections 5, 8.6, 8.7, 9, 11, 13, 19,
20 and 21 of this Agreement shall survive its expiry or
termination.
10. FORCE MAJEURE
Each of the Parties hereto shall be excused from the performance of its
obligations hereunder and shall not be liable for damages to the other in the
event that such performance is prevented by circumstances beyond its effective
control. Such excuse from performance shall continue for as long as the
condition responsible for such excuse continues and for a period of thirty (30)
days thereafter, provided that if such excuse continues for a period of one
hundred twenty (120) days, the Party whose performance is not being prevented
shall be entitled to withdraw from this Agreement. For the purpose of this
Agreement circumstances beyond the effective control of the Party which excuse
said Party from performance shall include, without limitation, acts of God,
enactments, regulations or laws of any government, injunctions or judgment of
any court, war, civil commotion, destruction of facility or materials by fire,
earthquake, storm or other casualty, labor disturbances and failure of public
utilities or common carrier.
11. INDEPENDENT CONTRACTORS
Nothing in this Agreement is intended or shall be deemed to constitute a
partnership, agency, employment or joint venture relationship between the
Parties. All activities by the Parties hereunder shall be performed by the
Parties as independent parties. Neither Party shall incur any debts or make any
commitment for or on behalf of the other Party except to the extent, if at all,
specifically provided herein or subsequently agreed upon.
12. LIMITATION ON ASSIGNMENT
Except as otherwise expressly provided herein neither this Agreement nor
any interest or obligation hereunder shall be assignable by either Party without
the prior written consent or agreement of the other Party, except in case of
sale or transfer of substantially all of a Party's business of which this
Agreement may be a part.
13. CONFIDENTIALITY
In consideration of disclosure by either of the Parties to the other Party
of confidential information in written or oral form or in the form of samples,
the recipient and the recipient's Affiliates undertake for a period of ten (10)
years from the date of disclosure to treat received information as strictly
secret and therefore not to disclose it to any third party (except reliable
employees and Affiliates and sublicensees under similar secrecy obligations),
and to make no commercial use of it except for the purposes of this
18
<PAGE>
Agreement or except as otherwise specifically provided for herein. This
obligation does not apply to:
(a) information which, at the time of disclosure, is already in the public
domain;
(b) information which, after disclosure, becomes a party of the public
domain by publication through no violation of this Agreement;
(c) information which the recipient is able to prove by competent written
evidence to have been in possession of prior to any disclosure;
(d) information which is hereafter lawfully disclosed by a third party to
the recipient, which third party did not acquire the information under
a still effective obligation of confidentiality to the disclosing
Party.
Neither Party shall issue any press release or other public statement concerning
the existence or terms of this Agreement or any activities related hereto
without consulting and agreeing with the other Party. However, each Party may
disclose this Agreement or any activities related hereto without the other
Party's approval if such approval has been requested but not received within
forty-eight (48) hours and such party concludes, after consulting with its legal
advisors, that it is required by law to disclose the transaction or part
thereof.
14. AMENDMENTS OF AGREEMENT
This Agreement may be amended or modified or one or more provisions hereof
waived only by a written instrument signed by both Parties.
15. SEVERABILITY
In the event that any one or more of the provisions of this Agreement
should for any reason be held by any court or authority having jurisdiction over
this Agreement and the Parties to be invalid, illegal or unenforceable such
provisions shall be deleted in such jurisdiction; elsewhere this Agreement shall
not be affected.
16. ARTICLE HEADINGS
The section headings contained in this Agreement are for convenience only
and are to be of no force or effect in construing and interpreting this
Agreement.
17. NOTICES
Any notice, report, request, approval, payment, consent or other
communication required or permitted to be given under this Agreement shall be in
writing and shall for all
19
<PAGE>
purposes be deemed to be fully given and received if delivered in person or sent
by registered mail, postage prepaid or by facsimile transmission to the
respective parties at the following addresses:
If to MAXYGEN: MAXYGEN, INC.
3410 Central Expressway
Santa Clara, CA 95051 USA
Attn: President
Telefax: 408-481-0385
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, CA 94301
U.S.A.
Attention: Julian N. Stern
Telefax: 650-324-0638
If to NOVO NORDISK: NOVO NORDISK A/S
Novo Alle
DK-2880 Bagsvaerd
Denmark
Attn: General Counsel
Telefax: +45 44 98 06 70
Either Party may change its address for the purpose of this Agreement by
giving the other Party written notice of its new address.
18. NON-WAIVER FOR FAILURE TO ENFORCE COMPLIANCE
The express or implied waiver by either Party of a breach of any provision
of this Agreement shall not constitute a continuing waiver of other breaches of
the same or other provisions of this Agreement.
19. APPLICABLE LAW
This Agreement shall be construed and interpreted in accordance with the
laws of the State of New York. The English wording of this Agreement shall
prevail.
20
<PAGE>
20. ARBITRATION
Both Parties will use their best endeavors to settle all matters in dispute
amicably. All disputes and differences of any kind related to this Agreement,
which cannot be solved amicably by the Parties, shall be referred to
arbitration.
The arbitration court shall consist of three arbitrators. The arbitration,
including appointment of arbitrators, shall be carried out in accordance with
the then valid rules of the American Arbitration Association (excluding any
conciliation procedures). The arbitration shall take place in New York City and
shall be conducted in the English language. The award of the arbitrators shall
be final and binding on both Parties. The Parties bind themselves to carry out
the awards of the arbitrators.
21. AUTHORITY TO SIGN
Each person signing below and each Party on whose behalf such person
executes this Agreement warrants that he, she or it as the case may be, has the
authority to enter into this Agreement.
Date: 1997-09-17 Date: 1997-09-17
NOVO NORDISK A/S MAXYGEN, INC.
By: /s/ Soren Carlsen By: /s/ Russell Howard
--------------------------- ---------------------------
Soren Carlsen Russell Howard
Corporate Vice President President
Enzyme Research
21
<PAGE>
AMENDMENT TO MAXYGEN/NOVO NORDISK LICENSE AND
COLLABORATION AGREEMENT
This Amendment is to the License and Collaboration Agreement (The
Agreement) between Maxygen, Inc. (Maxygen) and Novo Nordisk, A/S (Novo Nordisk)
dated September 17, 1997. Novo Nordisk and Maxygen hereby agree to amend and
clarify the Agreement as is set forth below.
It is understood and agreed that the Novo Nordisk Field in the Agreement
includes without limitation the use of Shuffling to develop, manufacture, sell
and use Industrial Proteins which are [*******] for those areas defined in
Exhibit D and for the Novo Nordisk Preferred Areas upon their activation. The
parties further acknowledge that [*******] for use in areas other than those
areas defined in Exhibit D of the Agreement and for areas other than those to be
included in the Novo Nordisk Preferred Areas upon their activation are not
included in the Novo Nordisk Field.
With specific regard to [*******] as listed in Exhibit D of the Agreement, the
Novo Nordisk Field is defined as and is limited to [*******]. The parties
further agree and acknowledge that such Industrial Protein use in the areas of
[*******] shall be limited to use where the purified or unpurified Industrial
Protein preparation does not itself constitute a significant part, [*******] of
the final [*******]. Thus, by way of clarification of the above, the Novo
Nordisk Field includes without limitation [*******], but excludes [*******].
22
<PAGE>
The parties further agree and acknowledge that the Novo Nordisk Field as defined
in the Agreement includes the use of Shuffling by Novo Nordisk or any research
collaborator or any contractor to [*******], provided however that such
[*******] are used exclusively by Novo Nordisk or any research collaborator or
any contractor for [*******] within the Novo Nordisk Field and Novo Nordisk
Preferred Areas upon their activation. By way of clarification, the Novo Nordisk
Field and Novo Nordisk Preferred Areas upon activation include without
limitation [*******] as defined in this Amendment and in Exhibit D of the
Agreement. As a further clarification, the parties acknowledge and agree that
neither party shall have any a priori rights to [*******] developed by the other
party or its collaborators or contractors. The parties further agree and
acknowledge that the use of Shuffling specifically for development of [*******]
is not sublicensable by Novo Nordisk to third parties except as is necessary for
a research collaboration with a third party or for contract services provided by
a third party.
The parties further agree and acknowledge that the development, production, and
sales of Industrial Proteins for use in [*******] as described in Exhibit D of
the Agreement does not include [*******].
23
<PAGE>
AUTHORITY TO SIGN
Each person signing below and each Party on whose behalf such person executes
this Agreement warrants that he, she or it, as the case my be, has the authority
to enter into this Amendment.
Date: 1998-6-29 Date: 1998-6-29
By: /s/ Soren Carlsen By: /s/ Russell Howard
---------------------- -----------------------
Soren Carlsen Russell Howard
Corporate Vice President President
Enzyme Research
3
<PAGE>
Amendment to
Maxygen/Novo Nordisk License
and Collaboration Agreement
This Amendment is to the Maxygen/Novo License and Collaboration Agreement (the
Agreement) between Maxygen, Inc. and Novo Nordisk A/S dated September 17, 1997.
Novo Nordisk and Maxygen agree to amend the Agreement as is set forth below.
This Amendment is effective as of the last date signed below.
Exhibit G
[*******]
[Exhibit G identifies the Novo Nordisk Preferred Areas.]
Each Person signing below and each Party on whose behalf such person executed
this Amendment warrants that he she or it, as the case may be, has the authority
to enter into this Amendment.
MAXYGEN, INC. NOVO NORDISK A/S
By: /s/ Russell Howard By: /s/ Soren Carlsen
------------------ -----------------
Russell Howard Soren Carlsen
President and Corporate Vice President
Chief Executive Officer Enzyme Research
Date: 7/22/98 Date: 7/29/98
<PAGE>
AMENDMENT TO MAXYGEN/NOVO NORDISK LICENSE AND COLLABORATION AGREEMENT
This amendment is to the License and Collaboration Agreement dated
September 17, 1997 (the License Agreement) between Maxygen, Inc., 515 Galveston
Drive, Redwood City, CA 94063 (hereinafter referred to as MAXYGEN) and Novo
Nordisk A/S, Novo Alle, DK-2880 Bagsvaerd, Denmark (hereinafter referred to as
NOVO NORDISK). This amendment is effective as of the last date signed below.
MAXYGEN and NOVO NORDISK hereby amend the Agreement as follows:
I) The following definitions from the Agreement are amended as is set forth
below:
The term "Industrial Protein" shall mean [*******] for production, sale,
and/or use in the Novo Nordisk Field, or upon being activated in accordance with
Section 7.3 hereof, a Novo Nordisk Preferred Area, but excluding [*******].
The term "NOVO NORDISK Field" shall mean the use of Shuffling for the
development, production and/or sale of Industrial Proteins in the areas
described in Exhibit D attached hereto, and, upon its activation in accordance
with the provisions of Section 7.3 hereof, in each Preferred Area, excluding,
however, such use for the purpose of [*******], and excluding existing specific
projects of MAXYGEN as specified in Exhibit E. The NOVO NORDISK Field shall not
include the cure, treatment, mitigation, prevention or diagnosis of human or
animal diseases, except as set forth in Section 2.2 below.
II) The following new definitions are added to the Agreement:
The term "Metabolic System" shall mean [*******].
The term "Circular PCR" shall mean new methods (as of 18 April 1995) for
DNA amplification reactions performed on overlapping DNA fragment with
complementary hybridizable ends allowing the fragments to anneal in the form of
a circle.
The term "MAXYGEN Circular PCR Patents" shall mean the patents and
applications listed in Exhibit I and any patents issued on any such patent
applications and including any reissued patents, re-examined patents, divisions,
renewals, continuations-in-part, substitutions, extensions or foreign
counterparts thereof.
The term "Shuffling" shall mean new methods (as of 17 February 1994) for
recombination of genetic material for creation and screening of genetic
diversity, comprising methods included in or similar to those described in
Exhibits C and F. Shuffling also encompasses the use of Circular PCR methods
included in or similar to
<PAGE>
those described in patents and applications listed in Exhibit 1. Shuffling may
be either in vivo or in vitro, but does not include any Assay Technology.
[*******].
The term "Shuffled," when referring to nucleic acid compositions such as
genes, shall mean any such compositions which have been obtained by the process
of Shuffling.
The term "Patent Prosecution Activities" shall mean patent filing,
prosecution and maintenance, including the defense of interferences,
oppositions, and similar proceedings.
The term "Chemical" or "Chemicals" as used in Exhibit D herein shall mean
[*******] used in the products or processes defined in Exhibit D.
III) The following sections of the Agreement are amended as is set forth below:
2.1 Grant of Licenses from MAXYGEN to NOVO NORDISK. MAXYGEN hereby grants
----------------------------------------------
to NOVO NORDISK a worldwide, royalty-bearing (in accordance with Section 3
below), exclusive, irrevocable (except as otherwise stated in Section 9) and
sublicensable (except for the restrictions set forth in item 13, Exhibit D)
right and license to practice the MAXYGEN Patents, the MAXYGEN Know-How, the
MAXYGEN Future Patents, the Jointly Owned Patents and the MAXYGEN Breakthrough
Inventions, to make, have made, use, promote, market, distribute and sell
Licensed Products within the NOVO NORDISK Field and any NOVO NORDISK Preferred
Areas which may be activated in accordance with Section 7 hereof. This license
grant expressly includes the right to manufacture Licensed Products by [*******]
for the purpose of using, promoting, marketing and distributing Licensed
Products in the NOVO NORDISK Field.
6. PATENT PROSECUTION
6.1 Patent Prosecution.
------------------
(a) MAXYGEN Patents, MAXYGEN Future Patents, NOVO NORDISK Patents, NOVO
NORDISK Future Patents, and MAXYGEN Breakthrough Inventions:
With regard to the MAXYGEN Patents, MAXYGEN Future Patents, MAXYGEN Break-
through Inventions, NOVO NORDISK Patents, and NOVO NORDISK Future Patents, the
licensor shall inform about and, to the extent reasonably practicable as
specified below, give the licensee a reasonable opportunity to discuss and
influence Patent Prosecution Activities. The licensor shall nonetheless have
the final decision as to any such matter unless the Working Group shall decide
otherwise.
Such major prosecution events shall include official communications with
the examining division at the European Patent Office and the United States'
Patent and Trademark Office in the form of patent applications, including
divisional applications,
2
<PAGE>
reissue applications, continuations and continuations-in part, requests for
examination, including reexamination, written opinions, amended claims, final
rejections, and notices of allowance.
MAXYGEN and NOVO NORDISK shall each be responsible to utilize commercially
reasonable efforts to file, prosecute and maintain, at its own expense, all
patents and patent applications included in the exhibits to this Agreement.
The licensor shall use reasonably diligent efforts to provide to licensee
such intended communications from the licensor to the examining division no
later than two (2) weeks prior to the filing of the actual official
communication.
The licensor shall use reasonably diligent efforts to disclose to the
licensee within two (2) weeks from its receipt such communications from the
examining division.
(b) Jointly Owned Patents:
Decisions on filing, prosecution and maintenance of Jointly Owned Patents
shall be as described in section 8.7 herein. Notwithstanding section 8.7, for
Jointly Owned Patents describing and claiming Shuffled genes encoding Industrial
Proteins, Industrial Proteins encoded by Shuffled genes and uses of such
Industrial Proteins, NOVO NORDISK shall be responsible, at its sole expense, for
Patent Prosecution Activities with respect to inventions made by MAXYGEN or NOVO
NORDISK or jointly by the Parties in connection with the Development Program.
However, if a Jointly Owned Patent solely claims uses in the MAXYGEN Field of
such Shuffled genes or of proteins encoded by the Shuffled genes, then MAXYGEN
shall be responsible at its sole expense for such Patent Prosecution Activities.
With regard to all other Jointly Owned Patents, responsibility for Patent
Prosecution Activities shall be as described in section 8.7.
6.2 Enforcement.
-----------
(a) MAXYGEN Patents, MAXYGEN Future Patents, MAXYGEN Breakthrough
Inventions, NOVO NORDISK Patents, and NOVO NORDISK Future
Patents:
In the event that any MAXYGEN Patent, MAXYGEN Future Patent, MAXYGEN
Breakthrough Invention, NOVO NORDISK Patent, or NOVO/NORDISK Future Patent may
be infringed or misappropriated by a third party in any country or is subject to
a declaratory judgment action arising from such infringement or misappropriation
in such country, or is the subject of an interference, re-examination, reissue
or opposition
3
<PAGE>
proceeding, the Party becoming aware thereof shall promptly notify the other
Party thereof.
NOVO NORDISK retains all rights for enforcement of the NOVO NORDISK
Patents, and/or NOVO NORDISK Future Patents within the NOVO NORDISK Field.
Similarly, MAXYGEN retains all rights for enforcement of the MAXYGEN Patents,
MAXYGEN Future Patents, and MAXYGEN Breakthrough Inventions within the MAXYGEN
Field.
The licensee shall have the right to enforce, at its own expense, licensed
patents within its field, i.e. the MAXYGEN Field or the NOVO NORDISK Field, as
appropriate, subject to the following provisions:
In cases where there is a reasonable suspicion of a commercially
significant infringement in the licensed field, the licensee shall first consult
the licensor and the Parties shall jointly develop and implement a plan to abate
the infringement. The Parties shall consider existing and potential infringement
suits by the licensor against a third party relating to the patents licensed
under this Agreement, and attempt to coordinate any such enforcement efforts
relating to the licensed patents without limiting the rights granted to the
licensee. Should one Party be unwilling to cooperate in the development of a
plan for abatement of infringement, it shall so notify the other Party in
writing, and the other Party may proceed on its own with any necessary work,
including the selection and use of outside counsel in order to develop such a
plan. Should the licensor and licensee jointly decide to initiate an
infringement suit, the Parties will cooperate with each other in the litigation,
with each Party maintaining its ability to retain counsel at their own expense.
Furthermore, the Parties shall both have access to copies of all documents filed
in, and all written communications in any such infringement suits, with
decisions regarding conduct of the litigation being made jointly between the
Parties. Decisions on settlement shall be made jointly between the Parties, and
neither Party shall enter into a settlement agreement without the consent of the
other Party, which consent shall not be unreasonably withheld. Neither Party
shall, without the other Party's consent make any settlement of any litigation
or claim which would result in any grant to any third party of any rights that
would diminish the rights of the other Party. Any cash recovery by such Party
received as a result of any such claim, suit or proceeding shall be used first
to reimburse the Parties hereto for all expenses (including court costs,
attorneys and professional fees and other expenses of all kinds) incurred in
connection with such claim, suit or proceeding. After reimbursement of such
expenses, twenty-five percent (25%) of the remainder shall be paid to the
licensor and seventy-five percent (75%) retained by the licensee.
In situations where there is a reasonable suspicion of a commercially
significant infringement in the licensed field, if the Parties cannot agree on a
plan to abate such
4
<PAGE>
infringement within one hundred eighty (180) days of receiving notice of such
infringement from the licensee, the licensee may, at its expense, initiate such
suit to abate such infringement or misappropriation; provided the licensee may
not enter into any settlement without the prior consent of the licensor, which
consent shall not be unreasonably withheld, and may not make any statement which
admits that any of the patents licensed pursuant to this Agreement are invalid
or unenforceable. Notwithstanding the 180 (one hundred and eighty) days' period
referred to in the preceding sentence, the licensee shall be entitled to
commence legal proceedings against the alleged infringer(s) even before expiry
of said period insofar as the licensee can demonstrate that such action is
necessary in order to preserve the licensee's ability to obtain an injunction,
whether on a final or preliminary basis. In the event the licensee brings such
an infringement suit, the licensor shall become a party to the lawsuit and shall
assist the licensee in the lawsuit at licensee's expense and using counsel
reasonably acceptable to licensee. Any cash recovery by such Party received as a
result of any such claim, suit or proceeding shall be used first to reimburse
the Parties hereto for all expenses (including court costs, attorneys and
professional fees and other expenses of all kinds) incurred in connection with
such claim, suit or proceeding. After reimbursement of such expenses, twenty-
five percent (25%) of the remainder shall be paid to the licensor and seventy-
five percent (75%) retained by the licensee.
If MAXYGEN notifies NOVO NORDISK that it intends to make an initial public
offering of MAXYGEN shares, then for a period of six (6) months from such notice
NOVO NORDISK shall not commence any new action or proceeding against any third
party with respect to any MAXYGEN patent without the prior written consent of
MAXYGEN; provided, however, NOVO NORDISK may respond to and participate in any
patent infringement action or other similar proceeding which has commenced as of
the date of such notice or which may be commenced by a third party.
Notwithstanding the 180 (one hundred and eighty) days' period referred to in the
preceding sentence, the licensee shall be entitled to commence legal proceedings
against the alleged infringer(s) even before expiry of said period insofar as
the licensee can demonstrate that such action is necessary in order preserve the
licensee's ability to obtain an injunction, whether on a final or preliminary
basis. In addition, MAXYGEN may not use this paragraph to require NOVO NORDISK
to delay any new actions or proceedings if more than 90 days have lapsed after
NOVO NORDISK has notified MAXYGEN of its reasonable suspicion of a commercially
significant infringement in the NOVO NORDISK Field of the MAXYGEN Patents,
MAXYGEN Future Patents, and/or the MAXYGEN Breakthrough Inventions.
(b) Jointly Owned Patents:
In the event MAXYGEN or NOVO NORDISK becomes aware of any actual or
threatened infringement of any Jointly Owned Patents, that Party shall promptly
notify
5
<PAGE>
the other and shall promptly discuss how to proceed in connection with such
actual or threatened infringement.
In the case of an act of infringement in the NOVO NORDISK Field, should
MAXYGEN not wish to participate in such a proceeding, NOVO NORDISK shall have
the right to proceed alone, at its expense, and may retain any cash recovery;
provided, at the request and expense of NOVO NORDISK.
MAXYGEN agrees to cooperate and join in any proceedings in the event that a
third party asserts or that a Court finds that MAXYGEN is necessary or
indispensable as a named party to such proceedings; provided, NOVO NORDISK may
not enter into any settlement with respect to any of the Jointly Owned Patents
without the prior consent of MAXYGEN, which consent shall not be unreasonably
withheld.
In the case of an act of infringement in the MAXYGEN Field, should NOVO
NORDISK not wish to participate in such a proceeding, MAXYGEN shall have the
right to proceed alone, at its expense, and may retain any cash recovery;
provided, at the request and expense of MAXYGEN, NOVO NORDISK agrees to
cooperate and join in any proceedings in the event that a third party asserts or
that a Court finds that NOVO NORDISK is necessary or indispensable as a named
party to such proceedings; provided, MAXYGEN may not enter into any settlement
with respect to any of the Jointly Owned Patents without the prior consent of
NOVO NORDISK, which consent shall not be unreasonably withheld.
Neither Party may make any statement as to the invalidity and/or
unenforceability of the Jointly Owned Patents.
8.7 Filing, Prosecution and Maintenance of Jointly Owned Patents. For
------------------------------------------------------------
Jointly Owned Patents describing and claiming Shuffled genes, proteins encoded
by Shuffled genes and uses of such proteins, NOVO NORDISK shall be responsible,
at its sole expense, for Patent Prosecution Activities with respect to
inventions made by MAXYGEN or NOVO NORDISK or jointly by the Parties. For all
other inventions, the Parties will agree upon which of them shall be responsible
for Patent Prosecution Activities of the Jointly Owned Patents, except that in
situations where all inventors are employed by the same Party, that Party shall
be responsible for Patent Prosecution Activities of such Jointly Owned Patents.
Except for Jointly Owned Patents describing and claiming Shuffled genes,
proteins encoded by Shuffled genes and uses of such proteins, the expenses of
the Patent Prosecution Activities shall be equally shared by the Parties unless
one of the Parties assigns all of its rights, on a country by country basis, to
the other Party. In each case, the Party responsible for Patent Prosecution
Activities shall assure that the other Party will have the opportunity to
provide meaningful and substantive review and comment on all major prosecution
events, and shall consider such
6
<PAGE>
comment in making decisions relating to the Patent Prosecution Activities. Such
major prosecution events shall include all substantive official communications
(such as patent application filings, including divisionals, reissue
applications, filing of continuations and continuations-in-part, requests for
examination or reexamination, responses to written opinion and office actions,
claim amendments and notices of allowance), with the examining division at the
European Patent Office, the United States' Patent and Trademark Office, and the
patent offices of other major countries in which Jointly Owned Patents are
filed.
IV) Original section 6.2 of the Agreement is retained and renumbered as section
6.3.
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<PAGE>
V) The following Exhibits are amended as is set forth below.
EXHIBIT A
Development Program
-------------------
[*******]
[*******]
[Exhibit A describes the Development Program under this Agreement. Exhibit A
describes the status of certain research conducted prior to amendment of this
Agreement and future development plans of the parties.]
8
<PAGE>
EXHIBIT C
(MAXYGEN Patents and Patent Applications)
-----------------------------------------
[*******]
[Exhibit C identifies the Maxygen Patents and Patent Applications licensed to
Novo Nordisk under this Agreement.]
10
<PAGE>
EXHIBIT D
[*******]
[Exhibit D identifies the specific areas within the Novo Nordisk Field.]
11
<PAGE>
VI) The following new Exhibit is added to the Agreement.
EXHIBIT I
MAXYGEN Circular PCR Patents
----------------------------
Maxygen Case No. Townsend Case No. Patent/Appl. No. Filing Date
[*******]
VII. All other sections of the Agreement including the other exhibits are
unchanged. The previous amendments to the Agreement dated June 29, 1998 and
July 19, 1998 are also unchanged by this amendment.
Each person signing below and each Party on behalf such person executes
this Agreement warrants that he, she or it, as the case may be, has the
authority to amend the Agreement.
MAXYGEN, INC. NOVO NORDISK A/S
By: /s/ Russell Howard By: /s/ Soren Carlsen
-------------------- ----------------------------
Russell J. Howard Soren Carlsen
President & C.E.O. Corporate Vice President
Enzyme Research
Date: 4-12-99 Date: 4-19-99
------------------- -----------------------------
<PAGE>
EXHIBIT A
(Development Program)
[*******]
[Exhibit A summarized the original work plan under this Agreement. The work plan
was replaced in the April 19, 1999 amendment to this Agreement.]
<PAGE>
EXHIBIT B
Specific projects of NOVO NORDISK include:
* the use of Shuffling for development of [*******]
* the use of Shuffling for development of Industrial Proteins for use in
[*******]
If NOVO NORDISK should use MAXYGEN PATENTS, MAXYGEN FUTURE PATENTS, MAXYGEN
Break-through Inventions or MAXYGEN Know-How in the development of any product
resulting from the foregoing specific projects, it shall be royalty-bearing, as
provided in this Agreement.
<PAGE>
EXHIBIT C
(MAXYGEN Patents and Patent Applications)
-----------------------------------------
[*******]
[Exhibit C listed the Maxygen Patents and Patent Applications under this
Agreement. Exhibit C was replaced in the April 19, 1999 amendment to this
Agreement.]
<PAGE>
EXHIBIT D
[*******]
[Exhibit D identified the Novo Nordisk Field under this Agreement.
Exhibit D was replaced in the April 19, 1999 amendment to this Agreement.]
<PAGE>
EXHIBIT E
Projects and Project Areas within the NOVO NORDISK Field to which NOVO NORDISK
cannot be granted exclusivity by virtue of prior contractual relationships and
specific documented MAXYGEN discussions with other parties prior to the date of
this Agreement:
* Use of Shuffling for development of [*******].
<PAGE>
EXHIBIT F
DK 0907/95,
DK 1047/95, and
WO 97/07205; (NN 4439: in vivo gene shuffling)
DK 0988/95, and
WO 97/09446; (NN 4542: phage display in detergents)
DK 0018/96, and
WO 97/00014; (NN 4632: in vivo diversity generation)
DK 1471/96, and
DK 0592/97; (NN 4833: in vivo recombination in bacteria)
DK 0307/97,
DK 0434/97, and
DK 0625/97; (NN 4859: in vitro recombination)
DK 0304/97,
DK 0432/97,
DK 0624/97; (NN 5113: directed in vitro recombination)
DK 0306/97,
DK 0433/97, and
DK 0623/97; (NN 5114: low-identity in vitro recombination)
WO 96/10084 (NN 4126: Process for production of secondary metabolites -
nonexclusive)
<PAGE>
EXHIBIT G
[*******]
[Exhibit G identified the Novo Nordisk Preferred Areas under this Agreement.
Exhibit G was replaced in the July 29, 1998 amendment to this Agreement.]
<PAGE>
EXHIBIT H
Additional rights of NOVO NORDISK pursuant to Section 2.1 and retained rights of
NOVO NORDISK pursuant to Section 2.2 include:
The improvement of [*******] for use in the manufacture or synthesis of
[*******]. Any resulting products that are invented or developed by or on behalf
of NOVO NORDISK or its Affiliates or sublicensees through application of
Shuffling that are covered by MAXYGEN Patents, MAXYGEN Future Patents or MAXYGEN
Break-through Inventions, shall be royalty-bearing in accordance with the
provisions of Section 3 of this Agreement.