Collaboration and License Agreement - Tularik Inc. and Merck & Co. Inc.
AMENDED AND RESTATED
COLLABORATION AND LICENSE AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of December 1996 (the
"Amendment Date") by and between Tularik Inc., a California corporation
("Tularik"), and Merck & Co., Inc. ("Merck"), a corporation organized under the
laws of New Jersey, and amends in part and restates the Collaboration and
License Agreement dated as of December 22, 1993 by and between Tularik and
Merck.
RECITALS
WHEREAS, Tularik and Merck have previously entered into the Original
Agreement pursuant to which Tularik and Merck established a cooperative research
relationship based on screening of their respective compound libraries using
their respective assays and other jointly developed assays, and
WHEREAS, Tularik and Merck desire to continue their cooperative research
relationship to develop and market novel therapeutic products based on compounds
identified during such research as having viral regulatory properties;
NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained herein, the parties agree as follows:
1
DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "Affiliate" shall mean any entity that directly or indirectly Owns, is
Owned by or is under common Ownership, with a party to this Agreement, where
"Own" or "Ownership" means direct or indirect possession of at least fifty
percent (50%) of the outstanding voting securities of a corporation or a
comparable equity interest in any other type of entity.
1.2 "Agreement" shall mean this Amended and Restated Collaboration and
License Agreement.
1.3 "Agreement Compounds" shall mean, collectively, the Option Compounds
and the Program Compounds.
1.4 "Anti-Viral Activity" shall mean that level of activity of a Program
Substance in a Program Assay which [ * ], as appropriate for the target, which
is potentially or actually useful
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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in the Field, as determined by the Research Committee.
1.5 "Confidential Information" shall mean, subject to the limitations set
forth in Section 12.1 hereof, all information disclosed to one party by the
other party.
1.6 "Core Targets" shall mean those targets applicable to the [ * ] set
forth on Appendix A, or otherwise designated by a majority of the members of the
entire Research Committee in writing, as well as any other targets designated by
the Research Committee in writing for other viruses which the parties may from
time to time designate or substitute.
1.7 "[ * ] Option Program" shall mean research and development pursuant to
this Agreement of all Option Compounds relating to all Option Targets applicable
to the [ * ].
1.8 "Effective Date" shall mean December 22, 1993.
1.9 "Exercise Data" shall mean data establishing the following criteria
with respect to an Option Program:
a) [ * ];
b) [ * ];
c) [ * ];
d) [ * ]; and
e) [ * ].
1.10 "Exercise Date" shall mean the date on which both of the following
have occurred (i) [ * ] and (ii) [ * ].
1.11 "FDA" shall mean the United States Food and Drug Administration.
1.12 "Field" shall mean all uses in the prevention or treatment of (i)
[ * ].
1.13 "Full Time Equivalent" or "FTE" shall mean the equivalent of a full-
time [ * ]. The portion of an FTE year devoted by a scientist or program manager
to the Research Program shall be determined by dividing the number of days
during any twelve (12) month period devoted by such employee to the Research
Program by the total number of working days during such twelve (12) month
period.
1.14 "GCP" means the Good Clinical Practice regulations promulgated by the
FDA.
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.15 "GLP" means the Good Laboratory Practice regulations promulgated by
the FDA.
1.16 "GMP" means the Good Manufacturing Practice regulations promulgated by
the FDA.
1.17 "Government Approval" shall mean any approvals, licenses,
registrations or authorizations of any federal, state or local regulatory
agency, department, bureau or other government entity, foreign or domestic,
necessary for the manufacture, use, storage, import, transport or sale, of the
Products in a regulatory jurisdiction.
1.18 "[ * ] Option Program" shall mean research and development pursuant to
this Agreement of all Option Compounds relating to all Option Targets applicable
to the [ * ].
1.19 "IND" or "Investigational New Drug Application" shall mean an
application for regulatory approval by the FDA or its foreign equivalent in
[ * ], to commence human clinical testing of a drug, as defined by the FDA or
the foreign equivalent.
1.20 "Lead Defense Party" shall have the meaning assigned to it in Section
8.2(e)(2) hereof.
1.21 "Merck Know-How" shall mean all materials and information that Merck
owns, controls or has a license to (with a right to sublicense) as of the
Effective Date and from time to time during the Research Term, which arise
outside of the Research Program, but only insofar as the above are necessary or
useful for the conduct of the activities under the Research Program.
1.22 "Merck Option" shall mean the option by Merck to conduct research and
development activities with respect to any Option Program and to commercialize
Option Compounds, as further described in this Agreement.
1.23 "Merck Patents" shall mean any and all patents, both foreign and
domestic, which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal has been or can be taken, including
without limitation all substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates, (a) which (i)
are issued as of the Effective Date, (ii) subsequently issue from applications
(including divisionals, continuations and continuations-in-part) pending as of
the Effective Date, or (iii) issue from any such applications subsequently filed
on inventions made as of the Effective Date and (b) which Merck owns, controls
or has a license to (with the right to sublicense), and (c) which relate to the
development, manufacture, use or sale of the Products or the Program Assays.
1.24 "Merck Substances" shall mean those natural extracts, natural
compounds and synthetic compounds which Merck owns or has the right to license
or sublicense as of the
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Effective Date or from time to time during the Research Program, and which Merck
has approved for screening under the Research Program.
1.25 "Merck Technology" shall mean, collectively, the Merck Patents and the
Merck Know-How.
1.26 "NDA" (or "New Drug Application") shall mean a new drug application as
defined by the U.S. FDA or the foreign equivalent in [ * ].
1.27 "Net Sales" shall mean, with respect to a Product, and on a
country-by-country basis, the gross invoice price of all quantities of such
Product sold by a party, its Affiliates or sublicensees to an independent third
party after deducting, if not already deducted in the amount invoiced [ * ].
With respect to sales of combination products, which shall consist of Products
combined with one or more additional active ingredients, Net Sales shall be
calculated on the basis of the [ * ].
1.28 "New Target" and "New Target Assay" shall have the meanings assigned
to each, respectively, in Section 2.3 hereof.
1.29 "Option Compound" shall mean a Program Substance (i) which as a result
of screening activities under the Research Program, [ * ] and (iii) as to which
Tularik has commenced and is proceeding with preliminary development activities
within [ * ] after the expiration of the Research Term.
1.30 "Option Product" shall mean any pharmaceutical product which results
during the Research Term [ * ], from research conducted with respect to an
Option Compound. Each Option Product shall be deemed to include [ * ].
1.31 "Option Program" shall mean either the [ * ] Option Program or the
[ * ] Option Program, as the case may be.
1.32 "Option Targets" shall mean those targets applicable to the [ * ] set
forth on Appendix A hereto, or otherwise designated by a majority of the members
of the entire Research Committee in writing.
1.33 "Original Agreement" shall mean the Collaboration and License
Agreement dated as of December 22, 1993 by and between Tularik and Merck.
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.34 "Products" shall mean, collectively, the Option Products and the
Program Products.
1.35 "Program Assays" shall mean those assays relating to the Core Targets
or the Option Targets which, as of the Effective Date and from time to time
during the Research Term, each party respectively owns or has rights to (with a
right to sublicense), as set forth and periodically updated on Appendix A
hereto.
1.36 "Program Compound" shall mean a Program Substance which (i) as a
result of screening activities under the Research Program, [ * ], (ii) [ * ] and
(iii) is designated by the Research Committee for [ * ]. Program Compounds shall
also include all Option Compounds within any Option Program as to which Merck
has exercised the Merck Option.
1.37 "Program Know-How" shall mean all materials and information developed
in the course of the Research Program.
1.38 "Program Patents" shall mean any and all patents, both foreign and
domestic, which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal has been or can be taken, including
with out limitation, all substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates which cover
inventions or discoveries made in the course of the Research Program.
1.39 "Program Product" shall mean any pharmaceutical product which results
during the Research Term [ * ] from research conducted with respect to a Program
Compound. Each Program Product shall be deemed to include all indications,
formulations, line extensions or modes of administration thereof.
1.40 "Program Substances" shall mean the Merck Substances and the Tularik
Substances.
1.41 "Research Committee" shall mean that committee formed pursuant to
Section 2.2 hereof.
1.42 "Research Management Committee" or "RMC" shall mean Merck's Research
Management Committee.
1.43 "Research Program" shall mean the research program carried out by the
parties in the Field during the Research Term pursuant to Article 2 hereof, as
further described in Appendix B.
1.44 "Restricted Compound" shall mean any Program Compound or Option
Compound which Merck has designated as restricted in accordance with Sections
2.1(c) hereof.
[ * ] =Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.45 "Third Party Screening Royalty" shall mean any royalty obligation owed
by Tularik or Merck to any third party, for the screening or use of any Program
Substance.
1.46 "Tularik Know-How" shall mean all materials and information that
Tularik owns, controls or has a license to (with a right to sublicense) as of
the Effective Date and from time to time during the Research Term, which arise
outside the Research Program, but only insofar as any of the above are necessary
or useful to the conduct of the activities carried out under the Research
Program.
1.47 "Tularik Patents" shall mean any and all patents, both foreign and
domestic, which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal has been or can be taken, including
without limitation all substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates, (a) which (i)
are issued as of the Effective Date, or (ii) subsequently issue from
applications (including divisionals, continuations and continuations-in-part)
pending as of the Effective Date, or (iii) issue from any such applications
subsequently filed on inventions made as of the Effective Date, (b) which
Tularik owns, controls or has a license to (with the right to sublicense), and
(c) which relate to the development, manufacture, use and sale of the Products
or the Program Assays.
1.48 "Tularik Substances" shall mean those natural extracts, natural
compounds and synthetic compounds which Tularik owns or has the right to license
or sublicense as of the Effective Date or from time to time during the Research
Program, and which Tularik has approved for screening under the Research
Program.
1.49 "Tularik Technology" means, collectively, the Tularik Patents and the
Tularik Know-How.
2
RESEARCH PROGRAM
2.1 Research Program. Tularik and Merck will conduct the Research Program
under the direction of the Research Committee. During the Research Term, Tularik
shall [ * ] the Research Program, including management of the Program. Tularik
shall appoint [ * ] to manage the Research Program. Tularik acknowledges that
the involvement of [ * ] in the Research Program is critical to the success of
the Research Program. Merck acknowledges that [ * ] will [ * ]. The parties
intend that the work of [ * ] relating to his employment responsibilities at the
[ * ], shall not be utilized in the Research Program; provided, however, that
[ * ]. Merck shall have the right to approve all changes in the management of
the Research Program, in its sole discretion.
(a) Provision of Program Substances. Merck shall provide the Merck
Substances in coded form, and Tularik shall provide the Tularik Substances, for
use in the
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Research Program, in accordance with Appendix B. It is understood that neither
party shall have an obligation to provide any particular amounts or types of
Substances. Each Merck or Tularik Substance that does not possess Anti-Viral
Activity will be returned to Merck or Tularik, as the case may be, and will
cease to be subject to the terms of this Agreement.
(b) Screening Activities. During the Research Term, each party shall
respectively make all Program Assays available for the Research Program. In the
event that either party develops or acquires new Program Assays during the
Research Term, such party shall promptly inform the Research Committee of the
existence of such Program Assay. Unless otherwise directed by the Research
Committee, Tularik shall conduct all screening of the Program Substances. To the
extent practicable, the Program Substances shall be screened contemporaneously
in Program Assays for both the Core Targets and Option Targets. Tularik shall
notify Merck promptly when a Program Substance demonstrates Anti-Viral Activity
in a Core Target or Option Target. Any Program Substance which does not
demonstrate Anti-Viral Activity in a Core Target or Option Target shall be
returned to the party which supplied such Program Substance, and shall not be
included further under the terms of the Agreement.
(c) [ * ] Compounds. Within [ * ] of the date Merck receives all
material data indicating whether or not a Merck Substance has reacted positively
in a Program Assay for a Core Target or an Option Target, Merck shall [ * ],
upon which occurrence [ * ]. In the event that Merck [ * ], the Research
Committee shall commence evaluation of such Merck Substance, or Tularik shall be
free to conduct further research, in the case of a Merck Substance [ * ],
subject to the terms and conditions of this Agreement. Merck will [ * ], as the
case may be, for which such [ * ] without the agreement of Tularik. It is
understood that there are [ * ].
2.2 Research Committee.
(a) Formation of Research Committee. The Research Committee shall
consist of six (6) members, Merck and Tularik each to appoint and substitute as
necessary from time to time three (3) members of such Committee. Each member
shall have appropriate technical credentials and knowledge and ongoing
familiarity with the Research Program. The Chairperson of the Research Committee
shall be one of the Merck-appointed members. Except as otherwise provided in
Sections 1.6, 1.8 and 1.32, all decisions of the Research Committee shall be
unanimous.
(b) Meetings of Research Committee. The Research Committee shall meet
quarterly, at such times as shall be mutually agreed upon by the parties. The
location of such meetings shall alternate between sites designated by Tularik
and sites designated by Merck.
(c) Responsibilities of the Research Committee. The Research Committee
shall carry out the following responsibilities during the Research Term and,
with respect to Option Compounds which continue to be subject to the Merck
Option, for [ * ]: (1) defining the yearly research objectives, (2) determining
whether a Program Substance has Anti-Viral Activity,
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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(3) coordinating activities required to carry out the Research Program, (4)
periodically revising the Research Program, (5) monitoring progress of the
Research Program and (6) making recommendations regarding further pre-IND
development of Program Compounds and Option Compounds.
2.3 New Target Assays. In the event that Tularik develops any new
screening assays relating to any disease in the Field other than the Core
Targets and the Option Targets (each, a "New Target Assay" and "New Target,"
respectively) during the Research Term, Tularik hereby agrees to promptly
disclose to Merck the existence of each New Target Assay. Merck shall have the
right to [ * ] for the identification and/or development of compounds relating
to such New Target by delivering to Tularik within [ * ] of Tularik's disclosure
of the New Target Assay, [ * ]. Upon receipt by Tularik of [ * ] relating to the
New Target. [ * ].
2.4 Term and Termination of Research Program. The Research Program shall
be carried out for a period commencing on the Effective Date and ending on
December 31, 1999 (the "Research Term"), which Research Term may be extended at
Merck's option for additional one (1)-year periods; provided, however, that any
such extension shall be made upon [ * ] prior written notice to Tularik.
Anything in the foregoing sentence to the contrary notwithstanding, Merck may
terminate the Research Term upon [ * ] written notice given to Tularik any time
after December 31, 1998. In the event of any such termination, payments under
Section 5.1(b) shall be prorated to fund the Research Program to the effective
date of such termination. After expiration or termination of the Research Term,
Tularik may, in its sole discretion, screen Merck Compounds at Merck's request,
at fees and upon terms to be mutually agreed upon by the parties at such time.
3
DEVELOPMENT AND COMMERCIALIZATION OF OPTION PRODUCTS
3.1 Tularik Development of Option Compounds. Tularik shall have the right,
but not the obligation, to conduct research and development and to commercialize
all Option Compounds, subject only to the Merck Option.
3.2 Tularik to Keep Merck Informed. Tularik shall provide Merck with
semi-annual reports of its progress in developing each Option Compound for which
Merck may be entitled to exercise the Merck Option in such reasonable detail as
shall be necessary and appropriate to permit Merck to determine whether it
wishes to exercise the Merck Option.
3.3 Merck Option.
(a) Merck Option. Merck may give Tularik written notice of its
intention to conduct research and development activities with respect to an
Option Program at any time, but
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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not later than the expiration of [ * ] following the Exercise Date relating to
such Option Program. Upon exercising the Merck Option by giving such notice in
such manner, all Option Compounds within such Option Program shall become
Program Compounds for all purposes of this Agreement. Upon exercise by Merck of
the Merck Option, Tularik will [ * ] for which the Merck Option has been
exercised or [ * ].
(b) Other Option Programs. Notwithstanding any exercise by Merck of
the Merck Option with respect to an Option Program, [ * ] relating to [ * ] and
[ * ] for which the Merck Option has not been exercised, subject to Section
3.3(a) above.
(c) Reimbursement. Merck shall reimburse Tularik for the reasonable
costs and expenses incurred by Tularik relating to studies and preliminary
development conducted on any Option Program as to which Merck exercises the
Merck Option. Such cost reimbursement shall be on a basis of [ * ], which
reimbursement shall include the items listed on Exhibit C hereto. Merck will
also reimburse Tularik for any additional outside expenses that it approves at
the time of such reimbursement, as necessary and appropriate.
3.4 Tularik Request for Exercise of Merck Option. Tularik shall notify
Merck that the Merck Option has become exercisable with respect to an Option
Program by submission to Merck of Exercise Data on the Exercise Date. In no
event shall Merck be obligated to consider exercise of the Merck Option with
respect to such Option Program unless Exercise Data for such Option Program
shall have been submitted to Merck. In the event Merck shall not exercise the
Merck Option with respect to such Option Program within [ * ] following the
Exercise Date, the Merck Option shall expire with respect to such Option
Program. Following such expiration: (i) [ * ]; (ii) Tularik shall [ * ]; and
(iii) Tularik may [ * ].
4
EXTRA-FIELD INDICATIONS
4.1 Extra-Field Indications. The parties acknowledge that the Program
Compounds and Option Compounds may prove to have applications for indications
outside the Field. Subject to the provisions of this Article 4, Merck shall have
the [ * ] and Tularik shall have the [ * ]. Notwithstanding the foregoing, the
parties acknowledge that each [ * ].
4.2 Royalty Obligations; Approvals. With respect to each Program Compound
or Option Compound developed by either party as set forth above for extra-Field
indications, the developing party shall be subject to the following royalty
obligations and approval requirements:
(a) Developing Party's Substance. With respect to the development and
commercialization of any Program Compound and Option Compound based upon its own
Program Substance [ * ], the developing party shall [ * ] from the other party
for such development and commercialization, [ * ] of such Program Compound or
Option Compound.
(b) Other Party's Substance. With respect to the development and
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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commercialization of any Program Compound or Option Compound based upon the
non-developing party's Program Substance [ * ], the developing party shall be
subject to [ * ] in accordance with the following:
(1) If such Program Compound or Option Compound is subject only to the
developing party's patents or patents jointly owned by Merck and Tularik, such
development and commercialization shall [ * ], and [ * ] of such Program
Compound or Option Compound.
(2) If such Program Compound or Option Compound is either (i) not
covered by any patent of either party or any jointly-owned patent or (ii) is
covered by the other party's patents, such development and commercialization
shall [ * ] if the developing party is also [ * ] if the developing party is
[ * ].
(c) Meaning of the Term "Patent." For purposes of this Section 4.2,
"patent" shall mean, with respect to any Product, a valid United States
[ * ] patent covering such Program Compound or Option Compound, [ * ], which a
party owns, controls or has a license to as of such date.
5
PAYMENT TERMS
5.1 Research Program Funding.
(a) Initial Payment. In consideration for the activities performed by
Tularik under the Research Program with respect to the Core Targets, Merck shall
pay Tularik a sum of [ * ].
(b) Research Term Fees. For each of the [ * ] of the Research Term,
Merck shall pay Tularik a sum of [ * ].
(c) Research Term Extensions. In the event that Merck extends the
Research Term pursuant to Section 2.4 hereof, Merck shall pay Tularik for each
one (1)-year extension [ * ].
5.2 Equity Investment. Within fifteen (15) days of the Effective Date,
Tularik and Merck shall execute a Series D Preferred Stock Purchase Agreement,
pursuant to which Merck shall purchase [ * ] shares of Tularik Series D
Preferred Stock for a sum of [ * ]. After execution of such Stock Purchase
Agreement, this Agreement and such Stock Purchase Agreement shall have no
further relationship and each agreement will operate completely independently.
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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5.3 [ * ].
5.4 Option Payments. Merck shall pay Tularik an exercise fee of
[ * ] with respect to each Option Program as to which Merck exercises the Merck
Option, at the time of each respective exercise and thereupon Tularik's rights
with respect to Option Compounds within such Option Program shall be governed by
Section 3.3(a).
5.5 Benchmark Payments. With respect to [ * ], Merck shall pay to
Tularik:
(a) [ * ];
(b) [ * ];
(c) [ * ];
(d) [ * ].
5.6 Royalties.
(a) Merck Royalty Payments for Program Products. Merck shall pay
to Tularik an annual running royalty on Net Sales of each Program Product sold
by it and/or its Affiliates or sublicensees for applications within the Field
(other than Program Products acquired by exercise of the Merck Option),
according to the following rates:
(1) [ * ]; and
(2) [ * ].
(b) Merck Royalty Payments for Merck Option Products. Subject to
Section 4.2 hereof, Merck shall pay Tularik an annual running royalty on Net
Sales of each Program Product acquired by exercise of the Merck Option and sold
by it and/or its Affiliates or sublicensees for applications within the Field,
according to the following rates:
(1) [ * ]
(2) [ * ]
(3) [ * ].
(c) Tularik Royalty Payments for Option Products. Tularik shall
pay to
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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Merck an annual running royalty on Net Sales of each Option Product based upon,
derived from or which incorporates a Merck Substance and sold by it and/or its
Affiliates or sublicensees for applications within the Field, according to the
following rates:
(1) [ * ]; and
(2) [ * ].
(d) Third-Party Royalty Credit. In the event that either party is
required to make payments (including, without limitation, royalties, option fees
or license fees) other than the [ * ], to one or more third parties to obtain
licenses or similar rights to patent protected technology necessary to make, use
or sell a Product in the Field, the party marketing such Product may deduct
[ * ] of the actual cost of such payments from royalties payable to the other
party under this Section 5.6 with respect to such Product, provided, however,
that in no event shall the royalties due to either party be reduced by more than
[ * ] of the amount of royalties owed in any given calendar quarter. Unused
royalty credits may be carried over from one royalty period to the next, subject
to the [ * ] limitation set forth above.
5.7 Royalty Term.
(a) Non-Patented Products. For each Product the manufacture, use or
sale of which for applications within the Field is not covered by a Program
Patent, Merck Patent or a Tularik Patent in a country, royalties shall be
payable in such country until [ * ] from the date of first commercial sale of
the Product in such country.
(b) Patented Products. For each Product the manufacture, use or sale
of which for applications within the Field is covered by a Program Patent, Merck
Patent or Tularik Patent, royalties shall be payable in a country until the
later of (i) [ * ] from the first commercial sale of the Product in such
country, or [ * ].
5.8 Manner and Time of Royalty Payments. All royalty payments due
hereunder shall be made in accordance with the provisions of Article 7 hereof.
5.9 Date and Place of Sale. Products shall be considered sold when
invoiced by the selling party. The obligation to pay royalties on Net Sales of a
Product in the Field shall be imposed only once with respect to the same unit of
such Product.
6
GRANT OF RIGHTS
6.1 Research Program License.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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(a) Grant by Merck. Merck hereby grants to Tularik, during the
Research Term (and any extension thereof), (i) [ * ] in accordance with the
terms of the Research Program. Nothing herein shall be deemed to grant any
rights or other interests in favor of Tularik with respect to the Merck
Technology and the Merck-owned Program Patents other than as expressly set forth
in this Agreement.
(b) Grant by Tularik. Tularik hereby grants to Merck, during the
Research Term (and any extension thereof) (i) [ * ] in accordance with the terms
of the Research Program. Nothing herein shall be deemed to grant any rights or
other interests in favor of Merck with respect to the Tularik Technology and the
Tularik-owned Program Patents other than as expressly set forth in this
Agreement.
(c) Preliminary Development by Merck of Program Compounds. Tularik
hereby grants to Merck an exclusive (but for the license granted to Tularik
under Section 6.1(d) below) license under the (i) [ * ] as are necessary for
Merck to fulfill its obligations under the Research Program in accordance with
Appendix B.
(d) Preliminary Development by Tularik of Option Compounds. Subject
to the terms of the Merck Option, Merck hereby grants to Tularik an exclusive
(but for the license granted to Merck under Section 6.1(c) above) license under
(i) [ * ] with respect to any Option Compound within any Option Program. Such
license shall terminate as to Options Compounds within any Option Program with
respect to which the Merck Option shall have been exercised or shall have
terminated.
(e) Use Limitation. Each party agrees and acknowledges that use of the
Merck Substances and the Tularik Substances provided pursuant to Article 2 is
limited solely to those activities contemplated by the Research Program, unless
otherwise provided for in this Agreement. Each party understands and
acknowledges that the other party's substances are for research use only and
shall not be administered to humans in any manner or form, except in accordance
with the terms of this Agreement, and subject to appropriate Governmental
Approval.
6.2 License to Merck for Program Products. Tularik hereby grants to Merck
an exclusive, worldwide license to develop, make, have made, use, sell and have
sold Program Products in the Field under [ * ]. Tularik shall not conduct any
screening, development, manufacturing or commercialization activities with
respect to the [ * ], except as provided under this Agreement.
6.3 License to Tularik for Option Products. Merck hereby grants to Tularik
an exclusive, worldwide license to make, have made, use, sell, and have sold
Option Products in the Field as to which Merck has not exercised the Merck
Option, under the (i) [ * ].
6.4 Sublicenses. Each party shall have the right to grant sublicenses
under the licenses set forth in this Agreement, as appropriate.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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<PAGE>
6.5 Merck Due Diligence; Obligation to Inform.
(a) Diligent Development and Commercialization. Merck shall devote the
same degree of attention and diligence to [ * ]. The requirements for diligent
development and commercialization set forth in this Section 6.5(a) shall in no
way be interpreted to modify either party's respective obligations under the
Research Program.
(b) Obligation to Inform. Merck hereby agrees to keep Tularik
informed on a reasonable basis of the development of each Program Compound,
including but not limited to periodic written updates on the progress of each
filing with the FDA and its foreign equivalents in [ * ].
(c) No Material Breach. Notwithstanding the foregoing, any failure by
Merck to fulfill the development, commercialization and information obligations
set forth in this Section 6.5 with respect to any Program Compound shall not be
deemed a material breach of this Agreement, to the extent that such failure
results [ * ].
7
PAYMENTS; RECORDS; AUDIT
7.1 Payment; Reports. All amounts payable to either party under this
Agreement shall be paid in U.S. Dollars within [ * ] of the end of each calendar
quarter or as otherwise specifically provided herein. Each payment of royalties
shall be accompanied by a statement of the amount of Net Sales during such
quarter, the amount of aggregate worldwide Net Sales to date as of the end of
such quarter where necessary in determination of royalty rates, and the amount
of royalties due on such sales. Each party agrees that if it desires to sell or
otherwise place any Products in exchange for consideration, or in a manner, that
makes it impractical to calculate royalty due, [ * ]. The parties hereby agree
that [ * ].
7.2 Exchange Rate; Manner and Place of Payment. Royalty payments and
reports for the sale of Products (i) in the United States shall be calculated
and reported for each quarter ending on the last day of March, June, September
and December; and (ii) outside the United States shall be reported for each
quarter ending on the last day of February, May, August and November. Exchange
conversion of foreign sales into U.S. Dollars shall be made as necessary at the
rate of exchange [ * ]. All payments owed under this Agreement shall be made
by wire transfer, unless otherwise
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
14
<PAGE>
specified by such party.
7.3 Records and Audit. During the term of this Agreement and for a period
of [ * ] thereafter, the parties shall each keep complete and accurate records
pertaining to the sale or other disposition of the Products commercialized by
it, in sufficient detail to permit the other party to confirm the accuracy of
all payments due hereunder. Each party shall have the right to cause an
independent, certified public accountant to audit such records to confirm the
other party's Net Sales and royalty payments for the preceding year; provided,
however, that such auditor shall not disclose the audited party's confidential
information to the other party, except to the extent such disclosure is
necessary to verify the amount of royalties due under this Agreement. Such
audits may be exercised once a year, within [ * ] after the royalty period to
which such records relate, upon notice to such other party and during normal
business hours. The party requesting the audit shall bear the full cost of such
audit [ * ]. The terms of this Section 7.3 shall survive any termination or
expiration of this Agreement for a period of [ * ].
7.4 Taxes. All turnover and other taxes levied on account of the royalties
accruing to each party under this Agreement shall be borne and paid by the party
receiving such royalty for its own account, including taxes levied thereon as
income to the receiving party. If provision is made in law or regulation for
withholding, such tax shall be deducted from the royalty paid by the party
making such payment to the proper taxing authority and a receipt of payment of
the tax secured and shall be promptly delivered to the party entitled to the
royalty. Each party agrees to reasonably assist the other party in claiming
exemption from such deductions or withholdings under any double taxation or
similar agreement or treaty from time to time in force.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
15
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8
OWNERSHIP; PATENTS
8.1 Ownership.
(a) Technology; Substances; Program Patents and Program Know-How.
Tularik acknowledges and agrees that Merck is and shall remain the sole owner of
the Merck Technology, the Merck-owned Program Patents, the Merck-owned Program
Know-How and the Merck Substances, and that Tularik has no rights in or to the
Merck Technology, the Merck-owned Program Patents, the Merck-owned Program Know-
How and Merck Substances, other than the license rights specifically granted
herein. Merck acknowledges and agrees that Tularik is and shall remain the sole
owner of the Tularik Technology, the Tularik-owned Program Patents, the Tularik-
owned Program Know-How and the Tularik Substances, and that Merck has no rights
in or to the Tularik Technology, Tularik-owned Program Patents, the Tularik-
owned Program Know-How and Tularik Substances other than the license rights
specifically granted herein. Each party acknowledges and agrees that each party
shall be the sole owner of the Program Assays and inventions or discoveries made
solely by it in the course of the Research Program, subject to right granted
under this Agreement, and that the other party has no rights in or to such
Program Assays and inventions or discoveries other than those rights
specifically granted to such other party herein. Program Assays and inventions
or discoveries jointly made by the parties in the course of the Research Program
shall be jointly owned.
(b) Program Know-How. Subject to the licenses granted under this
Agreement, Tularik and Merck shall each solely own the entire right, title and
interest in and to any Program Know-How made or discovered solely by it, and the
parties shall own jointly the entire right, title and interest in and to Program
Know-How jointly made or discovered.
8.2 Patents.
(a) Patent Prosecution.
(1) Tularik Patents and Merck Patents shall be prosecuted
and maintained by Tularik and Merck, respectively, at such party's option and
its own expense.
(2) Each party shall be responsible for filing, prosecuting
and maintaining those Program Patents covering inventions or discoveries made
solely by it, at its own expense. [ * ]. In the event that any party decides not
to proceed with prosecuting a patent application which it filed under this
Section, or to pay any annuity for a Program Patent as it becomes due, which
application or patent is relevant to the license rights of the other party under
this Agreement, such party shall give the other party sixty (60) days' notice
before any relevant deadline, and the other party shall have the right to
pursue, at its own expense, prosecution of such patent application or
maintenance of the patent. Upon request, the filing party may request
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
16
<PAGE>
copies of notebook pages containing supporting experimental data. Upon request,
the filing party shall forward copies of official correspondence relating to the
relevant patent application filing.
(3) Each party specifically excludes any representation or
warranty, express or implied, that it will successfully obtain any Program
Patent.
(b) Perfection of Interest. Each party agrees to cooperate with the
other and take all reasonable additional actions and execute such agreements,
instruments, and documents as may be reasonably required to perfect the other's
ownership interest in accordance with the intent of this Article 8 including,
without limitation, the execution of necessary and appropriate instruments of
assignment.
(c) Patent Marking. Each party shall mark all Products manufactured,
used or sold under the terms of this Agreement, or their containers, in
accordance with the applicable patent marking laws, as required.
(d) Infringement of Patents by Third Parties.
(1) Each party shall promptly notify the other in writing of any
alleged or threatened infringement of the Tularik Patents, the Merck Patents, or
the Program Patents which may adversely impact the rights of the parties
hereunder, of which it becomes aware.
(2) Each party shall retain the right to bring, at such party's
expense, an appropriate action against any person or entity directly or
contributorily infringing a patent or Program Patent owned by such party. In
such event, the other party hereby agrees to cooperate reasonably with the owner
of such patent or Program Patent in any such efforts. Any recovery obtained by
the patent or Program Patent owner as a result of such action, whether obtained
by settlement or otherwise, shall be disbursed as follows: [ * ]. The non-owner
at its own election and expense shall have the right to be joined in any such
action as a party. No settlement, compromise or other disposition of any such
action which compromises the non-owner's rights under this Agreement shall be
entered into without such non-owner's prior written consent, which shall not be
unreasonably withheld. In the event that an alleged infringer is engaged in the
manufacture, use or sale of a drug product with applications in the Core Targets
or Option Targets in a country in which the non-owner [ * ], and the owner fails
to institute an infringement suit or take other reasonable action to protect the
relevant patent or Program Patent, the non-owner shall have the right, within [
* ] of notification to the owner of such alleged infringement, to institute such
suit or take other appropriate action at its own expense in the name of the
owner or non-owner, or both. In such event, the owner of the patent or Program
Patent shall cooperate reasonably with the non-owner, if applicable, in its
efforts to protect the relevant patent or Program Patent. Any recovery obtained
by the non-owner as a result of such proceeding, by settlement or otherwise,
shall be disbursed as follows: [ * ]. No settlement, compromise or other
disposition of any such proceeding which concerns the
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
17
<PAGE>
validity of any patent or Program Patent shall be entered into without the
patent or Program Patent owner's prior written consent, which shall not be
unreasonably withheld.
(3) In the event that the parties become aware of any alleged or
threatened infringement of the jointly-owned Program Patents, including but not
limited to any certification filed under the U.S. Drug Price Competition and
Patent Term Restoration Act of 1984, the parties shall confer and may agree
jointly to prosecute such infringement. If the parties do not agree on whether
or how to proceed with enforcement activity within (i) [ * ] following the
notice of alleged infringement [ * ], whichever comes first, then either party
may act in its own name to commence litigation with respect to the alleged or
threatened infringement. In the event that a party brings an infringement
action, the other party shall reasonably cooperate, including if required to
bring such action, the furnishing of a power of attorney. Neither party shall
have the right to settle any patent infringement litigation under this Section
8.2(d)(3) in a manner that diminishes the rights or interests of the other party
without the consent of such other party. The costs of any litigation commenced
solely by one party, pursuant to this Section 8.2(d)(3), including attorneys'
fees and expenses, shall be borne entirely by such party. The costs of any
litigation commenced by the parties jointly, shall be borne equally by the
parties (unless they agree to a different cost sharing arrangements in any
particular matter) with such costs to be accounted for and reimbursed under this
Section 8.2(d)(3), without an allocation for internal resources devoted to
litigation. [ * ], after reimbursement of both parties' reasonable expenses in
prosecuting such actions.
(e) Infringement of Third Party Rights.
(1) In the event that any Product manufactured or sold hereunder
becomes the subject of a claim for patent, copyright or other proprietary right
infringement anywhere in the world, and irrespective of whether Merck or Tularik
is charged with said infringement, and the venue of such claim, the parties
shall promptly confer to discuss the claim.
(2) The party responsible for marketing the Product which is the
subject of the infringement claim (the "Lead Defense Party") shall have the
right, but not the obligation, to assume the primary responsibility for the
conduct of the defense of any such claim. In the event that the Lead Defense
Party decides to assume responsibility for such defense, it shall [ * ]. In such
event, the non-Lead Defense party shall have the right, but not the obligation,
to participate in any such suit, at its sole option [ * ]. If the Lead Defense
Party decides not to assume responsibility for the conduct of the defense, the
Non-Lead Defense shall have the right, but not the obligation to conduct the
defense of the claim. Each party shall reasonably cooperate with the party
conducting the defense of the claim, including if required to conduct such
defense, furnishing a power of attorney. Neither party shall enter into any
settlement that affects the other party's rights or interests without such other
party's written consent, which consent shall not be unreasonably withheld.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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<PAGE>
9
TERM; TERMINATION
9.1 Term. Except as provided under Section 9.2 below, (a) the term of
this Agreement shall commence upon the Effective Date and shall expire on the
expiration date of the last to expire royalty obligation, and (b) upon
expiration of this Agreement, [ * ].
9.2 Termination.
(a) Material Breach. If either party materially breaches the Agreement
and the breaching party has not (i) cured the breach or (ii) initiated good
faith efforts to cure such breach to the reasonable satisfaction of the non-
breaching party, within [ * ] of written notice of breach from the non-breaching
party, the non-breaching party may terminate this Agreement upon expiration of
such [ * ] period. In the event of termination of this Agreement for material
breach, [ * ].
(b) Insolvency or Bankruptcy. Either party may terminate this
Agreement effective immediately and without liability upon written notice to the
other party if such other party (a) becomes insolvent or declares bankruptcy,
(b) becomes the subject of any proceedings seeking relief, reorganization or
rearrangement under laws relating to insolvency, (c) makes an assignment for the
benefit of creditors, or (d) commences the liquidation, dissolution or winding
up of its business.
9.3 Surviving Rights. The obligations and rights of the parties under
Articles 4, 7, 8, 9, 10, 11, 12, 14 and 15 and Sections 16.3, 16.4, 16.5, 16.6,
16.9 and 16.10 shall survive termination. Section 5.3 shall survive termination
in accordance with the terms provided in such Section.
9.4 Accrued Rights; Surviving Obligations. The termination, relinquishment
or expiration of the Agreement for any reason shall be without prejudice to any
rights which shall have accrued to the benefit of either party prior to such
termination, relinquishment or expiration, including any damages arising from
any breach hereunder. Such termination, relinquishment or expiration shall not
relieve either party from obligations which are expressly indicated to survive
termination or expiration of the Agreement.
10
INDEMNIFICATION
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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<PAGE>
10.1 Indemnification by Tularik. Subject to Section 10.2 below, Tularik
hereby agrees to indemnify, hold harmless and defend Merck against any and all
expenses, costs or defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts Merck becomes legally obligated to pay because of any claim or claims
against it to the extent that such claim or claims (i) [ * ].
10.2 Indemnification by Merck. Merck hereby agrees to indemnify, hold
harmless and defend Tularik against any and all expenses, costs of defense
(including without limitation attorneys' fees, witness fees, damages, judgments,
fines and amounts paid in settlement) and any amounts Tularik becomes legally
obligated to pay because of any claim or claims against it to the extent that
such claim or claims (i) [ * ].
11
PUBLICATION; PUBLICITY
11.1 Publication. Each party to this Agreement recognizes that the
publication of papers, including oral presentations and abstracts, regarding the
Program Know-How and the Program Patents, subject to reasonable controls to
protect Confidential Information, will be beneficial to both parties.
Accordingly, each party shall have the right to review and approve any paper
proposed for publication by the other party, including oral presentations and
abstracts, which utilizes data generated from the Research Program and/or
includes Program Know-How or Confidential Information of the other party. Before
any such paper is presented or submitted for publication, the party proposing
publication shall deliver a complete copy to the other party at least [ * ]
prior to presenting the paper to a publisher. The receiving party shall review
any such paper and give its comments to the publishing party within [ * ] of the
delivery of such paper to the receiving party. With respect to oral presentation
materials and abstracts, the parties shall make reasonable efforts to expedite
review of such materials and abstracts, and shall return such items as soon as
practicable to the publishing party with appropriate comments, if any, but in no
event later than [ * ] from the delivery date thereof to the receiving party.
The publishing party shall comply with the other party's request to delete
references to such other party's Confidential Information in any such paper and
agrees [ * ].
11.2 Publicity. Except as otherwise provided herein or required by law, no
party shall originate any publication, news release or other public
announcement, written or oral, whether in the public press, or stockholders'
reports, or otherwise, relating to the existence of or the performance under
this Agreement, without the prior written approval of the other party, which
approval shall not be unreasonably withheld other than as may be necessary for
compliance with applicable governmental requirements.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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<PAGE>
12
CONFIDENTIALITY
12.1 Confidential Information; Exceptions. During the term of this
Agreement, and for a period of [ * ] after termination thereof, each party will
maintain all Confidential Information in trust and confidence and will not
disclose any Confidential Information to any third party or use any Confidential
Information for any unauthorized purpose; in particular, Merck shall not use the
Tularik Know-How or the Tularik-owned Program Know-How, and Tularik shall not
use the Merck Know-How or the Merck-owned Program Know-How, for the manufacture
or sale of any products other than the Products, except as expressly authorized
by this Agreement. Each party may use such Confidential Information only to the
extent required to accomplish the purposes of this Agreement. Confidential
Information shall not be used for any purpose or in any manner that would
constitute a violation of any laws or regulations, including without limitation
the export control laws of the United States. Confidential Information shall not
be reproduced in any form except as required to accomplish the intent of this
Agreement. No Confidential Information shall be disclosed to any employee,
agent, consultant, Affiliate, or sublicensee who does not have a need for such
information. Each party will use at least the same standard of care as it uses
to protect proprietary or confidential information of its own to ensure that
such employees, agents, consultants and clinical investigators do not disclose
or make any unauthorized use of the Confidential Information. Each party will
promptly notify the other upon discovery of any unauthorized use or disclosure
of the Confidential Information.
Confidential Information shall not include any information which:
(a) is now, or hereafter becomes, through no act or failure to
act on the part of the receiving party, generally known or available;
(b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;
(c) is hereafter furnished to the receiving party by a third
party, as a matter of right and without restriction on disclosure;
(d) is independently developed by the receiving party without any
breach of this Agreement; or
(e) is the subject of a written permission to disclose provided by
the disclosing party.
12.2 Financial Terms. The parties agree that the material financial
terms of the Agreement will be considered Confidential Information of both
parties. Notwithstanding the foregoing, either party may disclose such terms to
bona fide potential sublicensees, if necessary; in connection with any such
disclosure, each party agrees to use its best efforts to secure confidential
treatment of such information. [ * ].
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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<PAGE>
13
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants:
13.1 Corporate Power. Such party is duly organized and validly existing
under the laws of the state of its incorporation and has full corporate power
and authority to enter into this Agreement and to carry out the provisions
hereof.
13.2 Due Authorization. Such party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.
13.3 Binding Agreement. This Agreement is a legal and valid obligation
binding upon it and is enforceable in accordance with its terms. The execution,
delivery and performance of this Agreement by such party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.
13.4 Intellectual Property. Such party (i) has the full right to grant
the licenses granted by it under this Agreement; and (ii) [ * ].
13.5 Third Party Compounds. To the extent that any compounds owned by
third parties are supplied by such party for activities contemplated by this
Agreement, such party has full right and license to use such third party
compounds for the contemplated activities. Such party represents and warrants,
that to the best of its knowledge, the use of such third party compounds in
accordance with the terms of this Agreement will not [ * ].
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
14
IMPORT AND EXPORT CONTROLS
14.1 United States Laws. The parties understand and acknowledge that each
of them is subject to regulation by agencies of the U.S. government, including
the U.S. Department of Commerce, which prohibit export or diversion of certain
products and technology to certain countries. Any and all obligations of Merck
or Tularik to provide access to or license any technology pursuant to this
Agreement, as well as any technical assistance shall be subject in all respects
to such United States laws and regulations as shall from time to time govern the
license and delivery of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor or interim controlling legislation, and the
Export Administration Regulations issued by the Department of Commerce,
International Trade Administration, Bureau of Export Administration. Both
parties also agree to comply with the requirements of the U.S. Foreign Corrupt
Practices Act (the "Act") and shall refrain from making any payments to third
parties which would cause Merck or Tularik to violate the Act.
14.2 Non-United States Laws. Merck and Tularik shall each provide the
other party with such reasonable assistance as may be required for the party
requesting such assistance to comply with all non-United States laws,
ordinances, rules, regulations and the like of all governmental units or
agencies having jurisdiction pertaining to this Agreement, including without
limitation, obtaining all import, export and other permits, certificates,
licenses or the like required by such non-United States laws, ordinances, rules,
regulations and the like, necessary to permit the parties to perform hereunder
and to exercise their respective rights hereunder.
15
DISCLAIMER OF WARRANTIES; FURTHER ACTION
15.1 Disclaimers.
(a) Tularik Disclaimer. THE TULARIK TECHNOLOGY, INCLUDING THE
PROGRAM ASSAYS AND THE TULARIK SUBSTANCES, PROVIDED BY TULARIK HEREUNDER ARE
PROVIDED "AS IS" AND TULARIK EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without
limiting the generality of the foregoing, Tularik expressly does not warrant (i)
the success of any study or test commenced pursuant to the Research Program, or
(ii) the safety or usefulness for any purpose of Tularik Technology or the
Program Know-How.
(b) Merck Disclaimer. THE MERCK TECHNOLOGY, INCLUDING THE
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
PROGRAM ASSAYS AND THE MERCK SUBSTANCES, PROVIDED BY MERCK HEREUNDER ARE
PROVIDED "AS IS" AND MERCK EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without
limiting the generality of the foregoing, Merck expressly does not warrant the
safety or usefulness for any purpose of the Merck Technology or the Program
Know-How.
16
MISCELLANEOUS
16.1 Waiver. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent or similar breach or default.
16.2 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns;
provided, however, that neither party shall assign any of its rights and
obligations hereunder except (i) as incident to the merger, consolidations,
reorganization, or acquisition of stock or assets affecting substantially all of
the assets or actual voting control of the assigning party, or (ii) to an
Affiliate, provided, however, that in no event shall either party's obligations
under the Research Program be assigned to an Affiliate without prior written
consent of the other party.
16.3 Notices. Any notice or other communication required or permitted to
be given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective on the date of delivery if delivered in
person or by facsimile or five (5) days after mailing by registered or certified
mail, postage paid, to the other party at the following address:
In the case of Tularik: Tularik Inc.
Two Corporate Drive
S. San Francisco, CA 94080
Fax: (415) 829-4303
Attention: President
with a copy to: Cooley Godward Castro Huddleson & Tatum
Five Palo Alto Square
Palo Alto, CA 94306
Fax: (415) 857-0663
Attention: Brian C. Cunningham, Esq.
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
In the case of Merck: [ * ]
Either party may change its address for communications by a notice to the other
party in accordance with this section.
16.4 Headings. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
16.5 Amendment. No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by both parties.
16.6 Construction of Agreement and Choice of Law, Jurisdiction and Venue.
This Agreement and its terms and conditions shall be governed exclusively by and
construed according to the laws of [ * ]. The official text of the Agreement and
any Notices given or accounts or statements required hereby shall be in English.
16.7 Force Majeure. Any delays in performance by any party under this
Agreement (other than either party's failure to pay money to the other party,
unless such failure results solely from wire transfer failures beyond the
control of the paying party, or the like) shall not be considered a breach of
this Agreement if and to the extent caused by occurrences beyond the reasonable
control of the party affected, including but not limited to acts of God,
embargoes, governmental restrictions, strikes or other concerted acts of
workers, fire, flood, explosion, riots, wars, civil disorder, rebellion or
sabotage. The party suffering such occurrence shall immediately notify the other
party as soon as practicable and any time for performance hereunder shall be
extended by the actual time of delay caused by the occurrence.
16.8 Independent Contractors. In making and performing this Agreement,
Merck and Tularik act and shall act at all times as independent contractors and
nothing contained in this Agreement shall be construed or implied to create an
agency, partnership or employer and employee relationship between Tularik and
Merck. At no time shall one party make commitments or incur any charges or
expenses for or in the name of the other party.
16.9 Severability. If any term, condition or provision of this Agreement
is held to be unenforceable for any reason, it shall, if possible, be
interpreted rather than voided, in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms, conditions
and provisions of this Agreement shall be deemed valid and enforceable to the
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
full extent.
16.10 Cumulative Rights. The rights, powers and remedies hereunder shall
be in addition to, and not in limitation of, all rights, powers and remedies
provided at law or in equity, or under any other agreement between the parties.
All of such rights, powers and remedies shall be cumulative, and may be
exercised successively or cumulatively.
16.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
16.12 Entire Agreement. This Agreement and any and all Schedules and
Appendices referred to herein embodies the entire understanding of the parties
with respect to the subject matter hereof and shall supersede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof, including the
Original Agreement, which is superceded as of the Amendment Date by this
Agreement.
IN WITNESS WHEREOF, both Merck and Tularik have executed this Agreement, in
duplicate originals, by their respective officers hereunto duly authorized, as
of the Amendment Date.
Tularik Inc. Merck & Co., Inc.
By: /s/ David V. Goeddel By: /s/ Raymond V. Gilmartin
--------------------------- --------------------------------------
David V. Goeddel Raymond V. Gilmartin
Title:President and Title: Chairman, President & CEO
-----------------------------------
Chief Executive Officer
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
26
<PAGE>
APPENDIX A
Targets and Assays
Core Targets
------------
[ * ]
[ * ]
[ * ]
Core Target Assays
------------------
[ * ]
[ * ]
[ * ]
Option Targets
--------------
[ * ]
[ * ]
Option Target Assays
--------------------
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
27
<PAGE>
APPENDIX B
Research Program
The research program, and the responsibilities of the two parties, shall be
as follows:
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
28
<PAGE>
APPENDIX C
Merck Option Reimbursement
The reimbursement costs of [ * ] referenced in Section 3.3(c) shall include the
following:
Direct Expenses
[ * ]
Indirect Expenses
[ * ]
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
29
<PAGE>
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
30