License and Supply Agreement - VaxGen Inc. and Genentech Inc.
LICENSE AND SUPPLY AGREEMENT BETWEEN
VAXGEN, INC.
AND
GENENTECH, INC.
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TABLE OF CONTENTS
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ARTICLE 1.0 CERTAIN DEFINITIONS.............................................1
ARTICLE 2.0 LICENSE GRANT...................................................6
2.1 License Grant...................................................6
2.2 Sublicenses.....................................................7
ARTICLE 3.0 PRODUCT DEVELOPMENT AND COMMERCIALIZATION.......................7
3.1 Technology Transfer and Services to VaxGen......................7
3.2 Due Diligence...................................................8
3.3 Milestones......................................................8
3.4 Sale of Licensed Products by Genentech.........................10
ARTICLE 4.0 MANUFACTURE AND SUPPLY.........................................13
4.1 First Generation Clinical Vaccine..............................13
4.2 Newly Manufactured Clinical Vaccine(s).........................14
ARTICLE 5.0 PAYMENTS AND ACCOUNTING RECORDS................................17
5.1 Royalties......................................................17
5.2 Payments and Reports...........................................18
ARTICLE 6.0 INTELLECTUAL PROPERTY RIGHTS...................................20
6.1 Ownership......................................................20
6.2 Patent Filing, Prosecution and Maintenance.....................20
6.3 Patent Infringement............................................21
6.4 Third Party Patent Rights......................................22
ARTICLE 7.0 CONFIDENTIALITY................................................22
7.1 Confidentiality................................................22
7.2 Publications...................................................22
ARTICLE 8.0 REPRESENTATIONS AND WARRANTIES.................................23
8.1 Disclaimer.....................................................23
8.2 Representations and Warranties.................................23
ARTICLE 9.0 LIABILITY......................................................23
9.1 Limitation of Liability........................................23
9.2 Indemnification by VaxGen......................................23
9.3 Indemnification by Genentech ..................................23
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TABLE OF CONTENTS
(CONTINUED)
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9.4 Insurance......................................................24
ARTICLE 10.0 TERM AND TERMINATION...........................................24
10.1 Term...........................................................24
10.2 Termination for Default........................................25
10.3 Termination for Insolvency or Bankruptcy.......................25
10.4 Unilateral Termination.........................................25
10.5 Effect of Termination..........................................26
ARTICLE 11.0 GENERAL PROVISIONS.............................................27
11.1 Notices........................................................27
11.2 Governing Law..................................................28
11.3 Entire Agreement...............................................28
11.4 Binding Effect and Assignment..................................28
11.5 Dispute Resolution.............................................28
11.6 Waiver.........................................................29
11.7 Severability...................................................29
11.8 Publicity......................................................29
11.9 Counterparts...................................................29
11.10 No Other Rights................................................29
11.11 Force Majeure..................................................29
11.12 Headings.......................................................30
11.13 No Partnership.................................................30
EXHIBIT A LICENSED PATENT RIGHTS.............................................31
EXHIBIT B INFORMATION AND MATERIALS..........................................33
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LICENSE AND SUPPLY AGREEMENT
This License and Supply Agreement is entered into as of May 1, 1996
("Effective Date") by VaxGen, Inc. (formerly known as Genenvax, Inc.), a
Delaware corporation ("VaxGen"), and Genentech, Inc., a Delaware corporation
("Genentech") (each also singularly a "Party" and collectively the "Parties") as
follows:
WHEREAS, Genentech is the owner or licensee of certain patent rights and
knowhow relating to a vaccine (including used with adjuvants) against Human
lmmunodeficiency Virus ("HIV") infection and/or Acquired Immune Deficiency
Syndrome ("AIDS"), as well as the owner of certain biologic materials,
pre-clinical data, clinical data, protocols and other knowhow relating to the
therapeutic and/or prophylactic uses of such vaccine (including used with
adjuvants) in humans;
WHEREAS, VaxGen wishes to obtain an exclusive license to such
intellectual property of Genentech so that VaxGen may develop and commercialize
vaccine(s) against HIV; and
WHEREAS, Genentech is willing to grant such a license to VaxGen on the
terms set forth in this License and Supply Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Parties agree as follows:
ARTICLE 1.0 CERTAIN DEFINITIONS.
The terms defined elsewhere in this Agreement shall have the meanings
specified herein. The following terms shall have the following meanings for
purposes of this Agreement:
1.1 "ADJUVANT" and "ADJUVANTS" shall mean:
(a) the adjuvant comprised of alum (aluminum hydroxide);
(b) the adjuvant comprised of QS-21 saponin extract, which was
licensed to Genentech by Cambridge Biotech Corporation, a Delaware corporation
CCBC") pursuant to that certain License and Supply Agreement between Genentech
and CBC dated as of June 28, 1992 (the "QS-21 License");
(c) the adjuvant comprised of biodegradable polylactide
(lactide-co-glycolide) copolymer microspheres encapsulating the Vaccine; and/or
(d) any fragment, derivative or variant of any of the foregoing.
1.2 "ADMINISTRATIVE COSTS" shall mean, as to each calendar quarter, ten
percent (10%) of the sum of a Party's own Marketing Costs and Sales Costs.
1.3 "AGREEMENT" shall mean this License Agreement, including any
exhibits or other
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attachments hereto, as the same may be validly amended by the Parties from time
to time.
1.4 "ALLOCABLE OVERHEAD" shall mean costs incurred by a Party or for its
account, and not reimbursed, which are attributable to a Party's supervisory,
services, occupancy costs, corporate bonus (to the extent not charged directly
to a department), and its payroll, information systems, human relations or
purchasing functions and which are allocated to company departments based on
space occupied, headcount, full-time equivalents or another activity-based
method. "Allocable Overhead" shall not include any costs attributable to general
corporate activities including, by way of example only, executive management,
investor relations, business development, and legal and government affairs, and
shall not include any costs or expenses which are reimbursed by the other Party
or any third party.
1.5 "CLINICAL VACCINE" or "CLINICAL VACCINES" shall mean: (a) the MN
isolate of the Vaccine manufactured and supplied by Genentech for use by VaxGen
or its sublicensees in a PLA-Enabling Clinical Trial or other clinical trial in
humans in compliance with Good Manufacturing Practices at the protein
concentration, formulation and fill volume produced by Genentech as part of its
normal manufacturing and fill process for the Vaccine (the "FIRST GENERATION
CLINICAL VACCINE"); and (b) each and every other clinical isolate, strain or
other variant of the Vaccine, if any (a "VACCINE VARIANT" or "VACCINE
VARIANTS"), which shall be covered by Genentech's option to manufacture and
supply under Article 4 below. The First Generation Clinical Vaccine and each
such Vaccine Variant (if any) are each also referred to hereinbelow singularly
as a "type" of Clinical Vaccine, and collectively as the "Clinical Vaccine(s).
1.6 "COMMERCIAL INTRODUCTION" shall mean, on a country-by-country and
Licensed Product-by-Licensed Product basis, the date of first commercial sale
(other than for purposes of obtaining market approval) of a Licensed Product by
a Party or its sublicensees in such country.
1.7 "COMMERCIAL VACCINE" or "COMMERCIAL VACCINES" shall mean: (a) the MN
isolate of the Vaccine manufactured and supplied by Genentech in compliance with
Good Manufacturing Practices at the protein concentration, formulation and fill
volume produced by Genentech as part of its normal manufacturing and fill
process for the Vaccine, as may be modified under such regulatory approvals as
are applicable and necessary for the sale of a Licensed Product by VaxGen during
the term of this Agreement (the "FIRST GENERATION COMMERCIAL VACCINE"); and (b)
each and every other Vaccine Variant (as defined in Section 1.5 above), which
shall be covered by Genentech's option to manufacture and supply under Article 4
below. The First Generation Commercial Vaccine and each such Vaccine Variant (if
any) are each also referred to hereinbelow singularly as a "type" of Commercial
Vaccine and collectively as the "Commercial Vaccine(s).
1.8 "CONSOLIDATED TANGIBLE NET WORTH" shall mean the consolidated
stockholders' equity of VaxGen and its subsidiaries, if any, determined and
consolidated in accordance with generally accepted accounting principles,
consistently applied, except that there shall be deducted all intangible assets
of VaxGen and its consolidated subsidiaries, if any (including but not limited
to goodwill, organization costs, patents, copyrights, trademarks, trade names,
franchises, and licenses) and all capitalized financing costs, unamortized debt
discount and expenses, deferred charges, capitalized
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research and development costs, capitalized start-up costs for equipment and
facilities and capitalized interest costs.
1.9 "COST OF SALES" shall mean (a) the cost of goods sold, defined as
the Fully Burdened Manufacturing Cost of Licensed Product sold, (b) royalties
owed by a Party to third parties as a result of manufacturing, use or sale of
Licensed Product (except for royalties included in Fully Burdened Manufacturing
Cost or reimbursed by a third party), and (c) outbound freight, customs and
duties includible in this category of costs in accordance with United States
generally accepted accounting principles and not reimbursed by the other Party
or any third party.
1.10 "CREDIT AGREEMENT" shall mean that certain Credit Agreement, dated
as of December 19, 1995, between the Parties and related Promissory Note dated
December 19, 1995.
1.11 "DEVELOPMENT COSTS" shall mean, in every case, costs (including
Allocable Overhead) incurred by a Party, and not reimbursed, as required to
develop and/or obtain the authorization and/or ability to manufacture,
formulate, fill, ship and/or sell a Licensed Product in commercial quantities in
the Territory. "Development Costs" shall include, without limitation, the cost
of studies on the toxicological, pharmacokinetic, metabolic or clinical aspects
of a Licensed Product conducted internally, or by individual investigators,
contract research organizations or consultants necessary for the purpose of
obtaining and/or maintaining approval of a Licensed Product by a government
authority in a country in the Territory, and costs for preparing, submitting,
reviewing or developing data or information for the purpose of submission to a
governmental authority to obtain and/or maintain approval of a Licensed Product
in a country in the Territory, as well as the costs of process development
scale-up and recovery (including plant costs). "Development Costs" shall also
include, without limitation, the cost of research and development of Vaccine
Variants (as defined in Section 1.5 above) as potential Licensed Products,
including, without limitation, research relating to the immunologic and
serologic properties of Vaccine Variants, cloning and expression, and research
and development of processes for expression and manufacture of Clinical
Vaccine(s) and/or Commercial Vaccine(s) including or consisting of Vaccine
Variants. "Development Costs" shall also include, without limitation, the cost
of post-approval studies in support of a Licensed Product in the Field in the
Territory, and the expenses for compensation, benefits and travel and other
employee-related expenses, data management, statistical designs and studies,
document preparation, and other expenses associated with the clinical testing of
a Licensed Product. "Development Costs" in any case shall not include any costs
or expenses which are reimbursed by the other Party or any third party.
1.12 "DISTRIBUTION COSTS" shall mean the costs (including Allocable
Overhead) of a Party specifically identifiable to distribution of a Licensed
Product, including, without limitation, order processing, invoicing and
collection, customer services, collection of data of sales to hospitals and
other end users, credit, handling returns and recalls of product, warehousing,
distribution, and inventory and receivables, but in any case not any costs or
expenses which are reimbursed by the other Party or any third party.
1.13 "FDA" shall mean the United States Food and Drug Administration.
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1.14 "FIELD OF USE" shall mean any human use of a Licensed Product for
the prevention, but not the treatment, of HIV infection and/or AIDS.
1.15 "FULLY BURDENED MANUFACTURING COST" shall mean the cost of
production by Genentech of Clinical Vaccine or Commercial Vaccine or, where
applicable, the cost of production by a Party of a Licensed Product, which in
any case shall be comprised of the sum of (a) the manufacturing cost of goods
produced as determined in accordance with United States generally accepted
accounting principles as applied by Genentech (in the case of Clinical Vaccine
or Commercial Vaccine) or as applied by a Party (in the case of a Licensed
Product), including, without limitation, direct labor, material and product
testing costs incurred in connection with the manufacture or quality control
testing of such product, as well as Allocable Overhead and shipping containers,
(b) the manufacturer's allocable intellectual property licensing and acquisition
costs paid to third parties which are necessary for the manufacture of such
product, and (c) any other costs borne by the manufacturer for the transport,
customs clearance and storage of such product (if necessary) at the request of
VaxGen or its sublicensees (i.e., freight, duty, insurance, and warehousing).
1.16 "GENENTECH REGULATORY FILINGS" shall mean, collectively,
Investigational New Drug Application No. 3613 covering the IIIB isolate of the
Vaccine with the Adjuvant alum, Investigational New Drug Application No. 4299
covering the MN isolate of the Vaccine with the Adjuvant alum, Master File No.
5024 covering the MN isolate of the Vaccine with the Adjuvant QS21 and without
the Adjuvant alum, and Investigational New Drug Application No. 5182 coveting a
skin test using the MN isolate of the Vaccine without the Adjuvant alum.
1.17 "GOOD MANUFACTURING PRACTICES" shall mean the current Good
Manufacturing Practices for Finished Pharmaceuticals pursuant to 21 C.F.R. 210
et seq., as amended from time to time.
1.18 "LICENSED KNOWHOW" shall mean all proprietary information, methods,
processes, techniques, data and biologic materials (including, without
limitation, the Vaccine) which are in the possession of or controlled by
Genentech presently or hereafter during the term of this Agreement, which
Genentech is free to license or sublicense, and which are specific and necessary
for any Licensed Product in the Field of Use or the manufacture, use or sale of
any Licensed Product in the Field of Use, including, without limitation, (a) any
Licensed Product that contains, incorporates or uses one or more Adjuvants, and
(b) the rights licensed to Genentech under the third- party license agreements
specified in EXHIBIT A attached hereto and incorporated herein, to the extent
such rights are necessary for any Licensed Product in the Field of Use or the
manufacture, use or sale of any Licensed Product in the Field of Use; provided,
however, that "Licensed Knowhow" shall not include any rights Genentech acquires
after the Effective Date under any third-party license agreement unless and
until the Parties agree in writing on binding terms and conditions for the
sublicense of such rights from Genentech to VaxGen.
1.19 "LICENSED PATENT RIGHTS" shall mean all patents and patent
applications, and all patents issuing therefrom, together with all extensions,
reissues, reexaminations, substitutions,
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renewals, divisions, continuations, continuations-in-part and foreign
counterparts thereof or therefor, that are in the possession of or controlled by
Genentech presently or hereafter during the term of this Agreement, and which
Genentech is free to license or sublicense, to the extent that any of the
foregoing specifically and directly relates to or claims any Licensed Product in
the Field of Use or the manufacture, use or sale of any Licensed Product in the
Field of Use, including, without limitation, (a) any Licensed Product that
contains, incorporates or uses one or more Adjuvants, (b) the patents and patent
applications listed in EXHIBIT A, and (c) the rights licensed to Genentech under
the third-party license agreements specified in EXHIBIT A, to the extent that
such rights are necessary for any Licensed Product in the Field of Use or the
manufacture, use or sale of any licensed Product in the Field of Use; provided,
however, that "Licensed Patent Rights" shall not include any rights Genentech
acquires after the Effective Date under any third-party license agreement unless
and until the Parties agree in writing on binding terms and conditions for the
sublicense of such rights from Genentech to VaxGen.
1.20 "LICENSED PRODUCT" shall mean any pharmaceutical formulation within
the Field of Use that is based upon, contains, incorporates or uses the Vaccine
(or any homolog, analog, fragment, derivative or variant of the Vaccine),
whether alone or containing, incorporating or using any other substance,
product, material or device (active or not), including, without limitation, one
(1) or more Adjuvants.
1.21 "MARKETING COSTS" shall mean, in every case, the costs (including
Allocable Overhead) incurred by a Party, and not reimbursed, of marketing,
promotion, advertising, professional education, product-related public
relations, relationships with opinion leaders and professional societies, market
research, health care economic studies and other similar activities directly
relating to a Licensed Product. "Marketing Costs" shall include internal costs
(e.g., salaries, benefits, supplies, materials, etc.) as well as outside
services and expenses (e.g., consultants, agency fees, meeting costs, etc.), in
any case specifically identifiable to a Licensed Product, and costs relating to
obtaining reimbursement from payers and sales and marketing data. "Marketing
Costs" shall not include the costs of activities which promote a Party's
business as a whole or that are not product-specific (e.g., corporate image
advertising, etc.), or any costs or expenses which are reimbursed by the other
Party or any third party.
1.22 "NET PROFITS" shall mean, as to each calendar quarter, the total
aggregate Net Sales in that calendar quarter less the following items for such
quarter: Cost of Sales, Marketing Costs, Sales Costs, Distribution Costs, and
Development Costs incurred after the first marketing approval of a Licensed
Product.
1.23 "NET SALES" shall mean, as to each calendar quarter, the aggregate
gross invoiced sales prices charged for all Licensed Products sold by a Party
and its sublicensees hereunder, after deduction of the following items paid by a
Party or its sublicensees during such calendar quarter with respect to such
sales of Licensed Products (regardless of the calendar quarter in which such
sales were made), provided and to the extent that such items are incurred, were
included in the price charged, and do not exceed reasonable and customary
amounts in the market in which such sales occurred:
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(a) trade and quantity discounts or rebates actually taken and allowed; (b)
credits or allowance given or made for rejection or return of, and for
uncollectible amounts on, previously sold Licensed Products or for retroactive
price reductions; (c) any tax, duty or government charge (including any tax such
as a value added or similar tax or government charge, but not including any
income tax) levied on the sale, transportation or delivery of a Licensed Product
and borne by the seller thereof without reimbursement from any third party; and
(d) any charges for freight or insurance directly related to distribution of a
Licensed Product. The sale of a Licensed Product shall be deemed to occur on the
earlier of (i) the date the product is shipped or (ii) the date of the invoice
to the purchaser of the product.
1.24 "PLA-ENABLING CLINICAL TRIAL" shall mean a study in humans of the
efficacy and safety of a Licensed Product which is prospectively designed to
demonstrate statistically whether the Licensed Product is effective for use in a
particular indication in a manner sufficient to obtain regulatory approval to
market that Licensed Product.
1.25 "PRIVATE PLACEMENT" shall mean the initial private financing by
VaxGen after its sales of founder's stock to Genentech and other founding
stockholders.
1.26 "SALES COSTS" shall mean, in every case, the costs (including
Allocable Overhead) of a Party specifically identifiable to the sales of a
Licensed Product in the Territory, including, without limitation, costs
associated with sales representatives, including training, compensation,
benefits and travel, supervision, sales meetings and other sales expenses.
"Sales Costs" shall not include the startup costs associated with a Party's
sales force, including recruiting, relocation and other similar costs, or any
costs or expenses which are reimbursed by the other Party or any third party.
1.27 "STOCK AGREEMENTS" mean, collectively, (a)-that certain Stock
Subscription Agreement, dated as of March 15, 1996, between the Parties, (b)
that certain Warrant Agreement, dated as of March 15, 1996, between the Parties,
and (c) any and all future agreements entered into between the Parties with
respect to the acquisition by Genentech of additional shares of stock or
securities of VaxGen (including, without limitation, in the Private Placement).
1.28 "TERRITORY" shall mean the world.
1.29 "VACCINE" shall mean the recombinant HIV surface glycoprotein gp
120 developed by Genentech.
ARTICLE 2.0 LICENSE GRANT.
2.1 LICENSE GRANT. Subject to the other terms and conditions of this
Agreement (including, with out limitation, Section 3.4, Article 4 and Article 10
below), Genentech hereby grants to VaxGen an exclusive license, even as to
Genentech, under the Licensed Patent Rights and Licensed Knowhow to develop,
make, have made, use and sell Licensed Products in the Field of Use in the
Territory; provided, however, that Genentech retains the right under the
Licensed Patent Rights and
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Licensed Knowhow, and to all improvements to the Licensed Patent Rights or
Licensed Knowhow that are solely or jointly owned by VaxGen (under Section 6.1
below), to perform research, including but not limited to research and
development of Clinical Vaccines for VaxGen, and to use Licensed Products for
such research purposes, and Genentech also retains manufacturing and marketing
rights to the extent set forth in Section 3.4 and Article 4 below.
2.2 SUBLICENSES. Provided Genentech has not timely exercised its rights
under Section 3.4 below, and not earlier than the later of (a) the time period
during which Genentech may exercise its rights under Section 3.4 below or (b)
ninety one (91) days after notice from VaxGen to Genentech the first filing for
market approval of a Licensed Product in the Field of Use with the FDA, VaxGen
may grant-sublicenses of its rights hereunder on thirty (30) days' prior notice
to Genentech, subject in any case to Genentech's prior approval (which shall not
be unreasonably withheld). Any sublicensee hereunder shall be subject to all
obligations of VaxGen hereunder, and VaxGen hereby guarantees to Genentech the
performance by any and all of its sublicensees of the obligations of VaxGen
hereunder.
ARTICLE 3.0 PRODUCT DEVELOPMENT AND COMMERCIALIZATION.
3.1 TECHNOLOGY TRANSFER AND SERVICES TO VAXGEN.
(a) Subject to the other terms and conditions of this Agreement
(including, without limitation, Article 10), VaxGen shall have the right to
require Genentech to transfer the Licensed Knowhow and Genentech Regulatory
Filings to VaxGen as provided in this Section 3.1(a). VaxGen may reasonably
request transfers by Genentech at any time during the Term of this Agreement,
provided that VaxGen has closed a Private Placement raising aggregate gross
proceeds of at least Twenty Million Dollars ($20,000,000) for VaxGen's business
operations:
(i) At VaxGen's expense, Genentech shall provide VaxGen
with the proprietary information, data and biologic materials listed in EXHIBIT
B attached hereto and incorporated herein.
(ii) At VaxGen's expense, Genentech shall provide VaxGen
with a complete copy of each of the Genentech Regulatory Filings, and shall take
such other steps as may be required on the part of Genentech under such
applicable laws and regulations to assign such Genentech Regulatory Filings to
VaxGen or consent to VaxGen's reference thereto, at Genentech's option. At its
own expense, VaxGen promptly shall submit to the FDA all such forms, assurances,
information and other documentation required on the part of VaxGen under such
applicable laws and regulations to effectuate such assignment to or reference by
VaxGen, including, without limitation, amendment of the Genentech Regulatory
Filings to reflect new ownership and submission of Forms FDA 1571 on the new
medical monitor for such Genentech Regulatory Filings;
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(b) In addition, the Parties shall agree upon and enter into a
separate agreement ("SERVICES AGREEMENT") whereby Genentech shall provide VaxGen
with various support services agreed on by the Parties, at VaxGen's expense,
including, without limitation, biostatistical support, regulatory advice and
support relating to clinical and manufacturing matters and submissions to and
approvals by the FDA and other agencies, office space and administrative support
at Genentech for Dr. Don Francis, and research and process science support
(including DNA sequencing of HIV isolates from vaccinated subjects in clinical
trials).
3.2 DUE DILIGENCE. During the term of this Agreement, VaxGen shall use
due diligence in developing, seeking regulatory approval for, marketing of and
commercializing Licensed Products in the Field of Use in the Territory. For
purposes of this Agreement, such "due diligence" shall mean that the development
and commercialization of Licensed Products shall be VaxGen's sole business goal,
with an expenditure of time, effort and funding that is commensurate with such
goal. As an objective measure of such due diligence efforts, VaxGen agrees to
the binding development milestones set forth in Section 3.3 below. Except as
otherwise provided in Sections 3.4 and Article 4 of this Agreement, VaxGen shall
be responsible for all aspects and costs of development and commercialization of
Licensed Products under this Agreement, including, without limitation, the
conduct of pre-clinical and clinical trials, regulatory filings, marketing
applications and approvals, and post-approval studies. The Parties shall consult
and agree upon (a) which Party is responsible for preparation and regulatory
submission of all or part of an establishment site license application, product
license application or equivalent application(s) under laws or regulations of
the FDA or comparable foreign agencies, with respect to the manufacture of
Commercial Vaccine by Genentech for VaxGen and its sublicensees, as well as (b)
which Party shall hold any such establishment, product or other regulatory
license(s) and other matters relating to manufacturing and commercialization
arrangements hereunder.
3.3 MILESTONES.
(a) VaxGen agrees to perform the development milestones (each
singularly a "MILESTONE" and collectively the "MILESTONES") set forth by the
dates hereinbelow, and shall notify Genentech promptly in writing upon
achievement of each Milestone:
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MILESTONE DATE
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Treatment of first patient in a PLA- Not later than twelve (12)
Enabling Clinical Trial for use of a months after the closing of
Licensed Product in the Field of Use the Private Placement
Filing for first market approval of Not later than five (5) years after
a Licensed Product in the Field the closing of the Private Placement
of Use with the FDA
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(b) In connection with VaxGen's development and commercialization
of Licensed Products pursuant to this Agreement, commencing approximately ninety
(90) days after the Effective Date, and thereafter semi-annually on or about
each January 1 and July 1 of the term of this Agreement, VaxGen shall supply
Genentech with a brief but complete report on VaxGen's and its sublicensees'
development and commercialization programs for all Licensed Products in the
Field of Use in the Territory, which shall describe VaxGen's (and its
sublicensee's) progress in such programs in the prior six (6) months and planned
programs for the upcoming six (6) months. Each report shall include, for the
twelve (12)-month period it covers, (a) a summary of VaxGen's previous and
planned development efforts for each indication or use, including each clinical
trial, regulatory filing, application and approval with respect to Licensed
Products that VaxGen (or its sublicensees) have performed, sought or obtained or
will perform, seek or obtain, and (b) a summary of VaxGen's previous and planned
commercialization efforts for each indication and use. VaxGen will cooperate as
reasonably requested by Genentech in its review of each report, and in
connection therewith Genentech, shall have the right to visit VaxGen's or its
sublicensee's facilities, examine their records, discuss matters with key
officers and employees, and comment on Such development plans. At Genentech's
request during the term of this Agreement, the Parties shall meet to discuss
such development and commercialization plans; provided, however, that such
meetings shall not occur more frequently than semi-annually unless VaxGen agrees
otherwise.
(c) If VaxGen is unable to meet any Milestone due to (i) issues
raised by the FDA that are not within VaxGen's control and could not have been
reasonably anticipated by VaxGen, (ii) the occurrence of a serious and
unexpected adverse experience (as defined in 21 C.F.R. Section 312.32), the
principal cause of which is Clinical Vaccine and/or Commercial Vaccine
manufactured and supplied by Genentech under Article 4, and/or (iii) an event
solely within Genentech's control, including, without limitation, material delay
in the performance by Genentech of any of its material obligations hereunder
(e.g., the transfer of technology, regulatory filings, data or materials to
VaxGen hereunder), then VaxGen may notify Genentech in writing of such inability
and request an extension of time to complete the applicable Milestone. Provided
that VaxGen can demonstrate to Genentech's reasonable satisfaction that the
reason(s) for such inability to meet the applicable Milestone are solely as set
forth in clauses (i), (ii) and/or (iii) above, Genentech and VaxGen shall agree
in good faith on a new Milestone date (subject, however, to the two (2)-year
limit under Section 3.3(e) below). VaxGen shall not be entitled to request or
receive an extension of any Milestone that is not met due to any reason(s) other
than those set forth in clauses (i) through (iii) above, except in Genentech's
sole and absolute discretion. In connection with any request by VaxGen for an
extension hereunder, if VaxGen and Genentech cannot agree on the reason(s) for
such inability to meet any Milestone, the need for such an extension or the
appropriate duration of such extension, then such matter(s) (and only such
matter(s)) shall be referred to a committee of three (3) clinical investigators
for resolution. Such committee shall consist of a clinical investigator selected
by each of Genentech and VaxGen who shall not be an employee of either and who
shall have at least five (5) years' experience in conducting clinical
investigations. The two (2) investigators so selected shall promptly select a
third mutually agreeable investigator with like qualifications. The committee
shall render a written opinion to the Parties, within thirty (30) days after
selection of the third investigator, regarding the matter(s) at issue. Each
Party agrees to be bound by such written opinion. Each Party shall separately
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indemnify and hold harmless each member of the committee from any and all
claims, actions, liabilities, damages and expenses asserted against or incurred
by him or her as a result of providing his or her services pursuant to this
Section 3.3.
(d) Any disputes between the Parties hereunder that are not
matter(s) for resolution by the committee to be appointed under Section 3.3(c)
above shall be resolved in accordance with Section 11.5 below; provided,
however, that VaxGen shall have the burden of demonstrating its due diligence
hereunder. Subject to the foregoing, VaxGen's failure to exercise due diligence
hereunder, including, without limitation, its failure to meet a Milestone (or a
Milestone as extended in accordance with Section 3.3(c) above), shall be
considered a material default by VaxGen of this Agreement, giving Genentech the
right, in its sole discretion, to elect to convert VaxGen's exclusive license
hereunder to a non-exclusive license to VaxGen, effective thirty (30) days after
notice from Genentech to VaxGen, unless VaxGen shall have cured its default
(including, where VaxGen has failed to meet a Milestone, meeting such Milestone
within such thirty (30)-day period).
(e) Notwithstanding the foregoing or any other term of this
Agreement (and without the need to resort to Section 11.5 below), if VaxGen has
not met a Milestone (whether or not extended) within two (2) years after the
original date for such Milestone as set forth in Section 3.3 (a) above as of the
Effective Date, then Genentech shall have the right, in its sole discretion, to
terminate this Agreement under Section 10.2 below, effective on thirty (30)
days' prior notice from Genentech to VaxGen, unless VaxGen shall have met such
Milestone within such thirty (30)-day period. The two (2) year limit set forth
herein may be waived only in Genentech's sole and absolute discretion.
3.4 SALE OF LICENSED PRODUCTS BY GENENTECH. Subject to the other terms
and conditions of this Agreement (including, without limitation, Article 10),
VaxGen hereby grants to Genentech an exclusive option, exercisable in
Genentech's sole discretion, to exclusive marketing and sale rights to all
Licensed Products throughout the Territory on the following terms and
conditions:
(a) VaxGen shall notify Genentech promptly of the occurrence of
VaxGen's first filing, if any, with the FDA for market approval of Licensed
Product. Such notice from VaxGen shall include a detailed calculation of the
aggregate total of VaxGen's Development Costs through the date of such notice
for such first Licensed Product, and a copy of the application for marketing
approval filed with the FDA. Genentech's option hereunder must be exercised in a
notice of exercise from Genentech to VaxGen within ninety (90) days after such
notice (if any) from VaxGen to Genentech. Genentech shall have the right to
review the filed application with VaxGen and to audit VaxGen's Development Costs
in accordance with Section 5.3 below, and the ninety (90)-day period for
exercise of the option shall be extended by the number of days to completion of
the audit of Development Costs (if any). If Genentech does elect to exercise its
option hereunder, its notice of exercise to VaxGen shall be accompanied by
payment to VaxGen of an option fee (the "Option Fee") equal to thirty three
percent (33%) of the aggregate total of VaxGen's Development Costs for such
first Licensed Product through such date (subject to Section 5.3 below).
Genentech's license to use and sell Licensed Products hereunder shall become and
remain effective automatically upon such notice
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and payment from Genentech to VaxGen as provided for herein, subject to the
other terms of this Agreement.
(b) If Genentech timely exercises its option hereunder, Genentech
shall have an exclusive license (even as to VaxGen) under the Licensed Patent
Rights and Licensed Knowhow, to all improvements to the Licensed Patent Rights
or Licensed Knowhow that are solely or jointly owned by VaxGen (under Section
6.1 below), and to any other intellectual proprietary or proprietary information
of VaxGen that is within the Field of Use, to use, market and sell all Licensed
Products throughout the Territory during the term of this Agreement, with no
further consideration other than the Option Fee and sharing of Net Profits from
sales of such Licensed Products as provided below in this Section 3.4. Genentech
may sublicense its rights under this Section 3.4, effective upon notice to
VaxGen
(c) If Genentech timely exercises its option hereunder,
thereafter during the term of this Agreement commencing if and when the FDA
approves the filing for market approval of the first Licensed Product, Genentech
shall use due diligence in marketing and selling Licensed Products that receive
approval for marketing in the Territory. For purposes of this Agreement, such
"due diligence" shall mean the maximum commercial effort consistent with
Genentech's prudent business judgment, and consistent with the market potential
of Licensed Products relative to other products in Genentech's commercial
portfolio. In connection with the foregoing, within thirty (30) days after
Genentech's notice of exercise of its option under Section 3.4(a) above, the
Parties will establish a joint development and commercialization committee (the
"COMMERCIALIZATION COMMITTEE"), to be comprised of two (2) representatives
appointed and replaced by each Party. Such representatives will include
individuals with expertise and responsibilities in the areas of product
development and marketing, sales management or market research. The
Commercialization Committee will meet as requested by either Party by notice to
the other Party (but in any event not more frequently than semi-annually), at
such times and locations as are reasonably acceptable to the Parties. The
Commercialization Committee shall monitor and review the development and
commercialization of all Licensed Products and the Development Costs associated
therewith. The Commercialization Committee shall also monitor and review the
marketing and sale of Licensed Products by Genentech (and its sublicensees)
under this Section 3.4 (including, without limitation, annual marketing and
sales budgets, annual forecasts of sales and marketing plan, product positioning
and campaign strategies, pricing, managed care contract strategies and
trademarks). In addition, if VaxGen notifies Genentech that VaxGen believes, in
good faith, that Genentech is falling to exercise due diligence hereunder in a
specified portion or portion(s) of the Territory, the Commercialization
Committee shall review Genentech's due diligence hereunder. The
Commercialization Committee will operate by consensus, and if it is unable to
resolve a dispute regarding any issue presented to it, such dispute shall be
resolved in accordance with Section 11.5 below; provided, however, that VaxGen
shall have the burden of demonstrating Genentech's lack of due diligence
hereunder. Subject to the foregoing, Genentech's failure to exercise due
diligence hereunder shall be considered a material default by Genentech of this
Agreement, giving VaxGen the right, in its sole discretion, to elect to convert
Genentech's exclusive license to a non-exclusive license to Genentech, effective
thirty (30) days after notice from VaxGen to Genentech unless Genentech shall
have cured its default within such thirty
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(30)-day period. The Commercialization Committee (if any) automatically will
cease to operate upon the expiration of the term of this Agreement.
(d) If Genentech timely exercises its option hereunder, Genentech
and VaxGen thereafter shall share in the Net Profits in the Territory as
follows:
(i) to Genentech, seventy percent (70%) of the Net Profits
in the United States;
(ii) to VaxGen, thirty percent (30%) of the Net Profits in
the United States;
(iii) to Genentech, thirty percent (30%) of the Net
Profits outside the United States; and
(iv) to VaxGen, seventy percent (70%) of the Net Profits
outside the United States.
Notwithstanding the foregoing, if Genentech does not participate in the
development, manufacture of funding of any Clinical Vaccine other than the First
Generation Clinical Vaccine prior to the date that the Option Fee is due under
Section 3.4(a) above, the Parties shall share Net Profits throughout the
Territory on an equal basis (with fifty percent (50%) of such Net Profits to
each Party).
(e) In connection with the sharing of Net Profits contemplated
under this Section 3.4, within thirty (30) days after Genentech's notice of
exercise of its option under Section 3.4(a) above, the Parties will establish a
joint finance committee (the "FINANCE COMMITTEE"), to be comprised of two (2)
representatives appointed and replaced by each Party. Such representatives will
include individuals with expertise and
responsibilities in the areas of accounting, cost allocation, budgeting or
financial reporting. The Finance Committee will meet as requested by either
Party by notice to the other Party (but in any event not more frequently than
semi-annually), at such times and locations as are reasonably acceptable to the
Parties. The Finance Committee will operate by consensus, and if it is unable to
resolve a dispute regarding any issue presented to it, such dispute shall be
resolved in accordance with Section 11.5 below. The Finance Committee shall
address the financial, budgeting and accounting issues which arise in connection
with the sharing of Net Profits contemplated under Section 3.4(d) above
(including, without limitation, the Parties' respective cost structures and
generally acceptable accounting practices and other practical aspects of
implementation of the terms of this Agreement). The Finance Committee (if any)
automatically will cease to operate upon the expiration of the term of this
Agreement.
(f) After the expiration of the term of this Agreement, provided
that Genentech has timely exercised its option under this Section 3.4, Genentech
shall have a perpetual, fully paid-up, non-exclusive license under all
improvements to the Licensed Patent Rights or Licensed Knowhow that are solely
or jointly owned by VaxGen (under Section 6.1 below), to make, have made, use
and
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sell Licensed Products in the Territory.
ARTICLE 4.0 MANUFACTURE AND SUPPLY.
4.1 FIRST GENERATION CLINICAL VACCINE. In developing and commercializing
Licensed Products hereunder, VaxGen contemplates conducting one (1) or more
PLA-Enabling Clinical Trials including the First Generation Clinical Vaccine (as
defined in Section 1.5). Subject to the other terms and conditions of this
Agreement, Genentech shall supply VaxGen with First Generation Clinical Vaccine
for such PLA-Enabling Clinical Trials as set forth in this Section 4.1:
(a) VaxGen shall notify Genentech of the amount of First
Generation Clinical Vaccine that is needed by VaxGen for use in one (1) or more
PLA-Enabling Clinical Trials of the First Generation Clinical Vaccine. VaxGen's
notice must be sent at least six (6) months before the starting date of the
earliest such clinical trial to be conducted (and in any event before VaxGen
files its first application for market approval of a Licensed Product in the
Territory), and shall specify each such clinical trial, its starting date and
what estimated amount(s) of First Generation Clinical Vaccine will be needed for
it. VaxGen shall provide Genentech with additional information as reasonably
requested.
(b) Within twenty (20) days after VaxGen's notice under clause
(a), Genentech shall notify VaxGen of what amounts (if any) of previously
manufactured First Generation Clinical Vaccine Genentech has available that will
comply with the stability standards and other suitability criteria for use in
such clinical trial(s). Genentech shall supply such previously manufactured
First Generation Clinical Vaccine to VaxGen for use in such clinical trial(s)
without charge for manufacturing costs incurred before the Effective Date with
respect to such previously manufactured First Generation Clinical Vaccine, but
VaxGen shall reimburse Genentech for all costs and expenses incurred by
Genentech after the Effective Date to supply it hereunder, including, without
limitation, the costs and expenses for vialing and labeling, quality control
testing, record keeping, regulatory filings and responsibilities, and delivery.
VaxGen shall be entitled to have a third party perform quality control testing
of previously manufactured First Generation Clinical Vaccine supplied hereunder
if Genentech is unable to do so on a timely basis or at a price competitive with
such third party's services.
(c) To the extent Genentech cannot supply previously manufactured
First Generation Clinical Vaccine to VaxGen under clause (b) above, but subject
to the other terms and conditions of this Agreement, Genentech shall be
obligated to manufacture and supply VaxGen with the remaining amount of First
Generation Clinical Vaccine needed by VaxGen for use in the PLA-Enabling
Clinical Trial(s) specified by VaxGen in its notice under clause (a) above,
provided that notwithstanding the foregoing Genentech's manufacture and supply
obligation hereunder shall not exceed ten (10) grams of bulk First Generation
Clinical Vaccine, and Genentech shall have no further obligation hereunder after
the date VaxGen files its first application for market approval of a Licensed
Product in the Territory. The cost to VaxGen for such manufacture and supply
hereunder shall equal
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Genentech's Fully Burdened Manufacturing Cost. VaxGen shall be entitled to have
a third party perform fill and finish and/or quality control testing of First
Generation Clinical Vaccine supplied hereunder if Genentech is unable to do so
on a timely basis or at a price competitive with such third party's services,
and in such case Genentech's Fully Burdened Manufacturing Cost to VaxGen shall
be adjusted as appropriate.
4.2 NEWLY MANUFACTURED CLINICAL VACCINE(S). In developing and
commercializing Licensed Products hereunder, VaxGen contemplates conducting one
(1) or more PLA-Enabling Clinical Trials and other human clinical trials
including Vaccine Variants (as defined in Section 1.5) and/or First Generation
Clinical Vaccine. Subject to the other terms and conditions of this Agreement,
Genentech shall supply VaxGen with up to two (2) Vaccine Variants as Clinical
Vaccines for PLA-Enabling Clinical Trails, and beyond its supply obligations
under Section 4.1 and this Section 4.2, Genentech shall have an exclusive option
hereunder to manufacture and supply VaxGen (for itself and its sublicensees)
with additional First Generation Clinical Vaccine and/or Vaccine Variants, all
as set forth in this Section 4.2:
(a) VaxGen shall notify Genentech of all of the Vaccine Variants
selected by VaxGen as Clinical Vaccine(s) for one (1) or more PLA-Enabling
Clinical Trials of a Licensed Product. VaxGen's notice must be sent at least six
(6) months before the starting date of the earliest such clinical trial to be
conducted (and in any event before VaxGen files its first application for market
approval of a Licensed Product in the Territory), and shall specify each such
clinical trial, its starting date and what estimated amount(s) of which Vaccine
Variants will be needed for it. VaxGen shall provide Genentech with additional
information as reasonably requested. Subject to the other terms and conditions
of this Agreement, Genentech shall be obligated to manufacture and supply VaxGen
with up to two (2) Vaccine Variants as Clinical Vaccines for VaxGen for use in
the PLA-Enabling Clinical Trial(s) specify by VaxGen in its notice hereunder,
provided that notwithstanding the foregoing Genentech's manufacture and supply
obligation hereunder shall not exceed 10 grams of bulk Vaccine Variant for each
Vaccine Variant (or 20 grams total for both Vaccine Variants), and Genentech
shall have no further obligation hereunder after the date VaxGen files its first
application for market approval of a Licensed Product in the Territory. The cost
to VaxGen for such manufacture and supply hereunder shall equal Genentech's
Fully Burdened Manufacturing Cost. VaxGen shall be entitled to have a third
party perform fill and finish and/or quality control testing of First Generation
Clinical Vaccine supplied hereunder if Genentech is unable to do so on a timely
basis or at a price competitive with such third party's services, and in such
case Genentech's Fully Burdened Manufacturing Cost to VaxGen shall be adjusted
as appropriate.
(b) To the extent VaxGen (for itself or its sublicensees)
requires any amounts of any Clinical Vaccine (including any First Generation
Clinical Vaccine and any Vaccine Variants) in excess of Genentech's manufacture
and/or supply obligations under Sections 4.1 or 4.2(a) above, for use in any
PLA-Enabling Clinical Trial(s) or any other human clinical trial(s) in the
Territory, Genentech shall have an exclusive option under this Section 4.2(b) to
manufacture and supply VaxGen (for itself and its sublicensees) with any such
Clinical Vaccine. The cost to VaxGen for such manufacture and supply hereunder
shall be Genentech's Fully Burdened Manufacturing Cost applicable to the type(s)
of Clinical Vaccine being delivered. The Parties have further agreed as follows:
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(i) The option shall be exercisable by Genentech on a case
by case basis for the First Generation Clinical Vaccine and/or for each Vaccine
Variant that VaxGen (or any of its sublicensees) desires to test in a human
clinical trial.
(ii) VaxGen shall notify Genentech when VaxGen (or any of
its sublicensees) desires to obtain the first mount of a given type of Clinical
Vaccine (other than under Section 4.1 above) for use in any PLA-Enabling
Clinical Trial or other human clinical trial of a Licensed Product under this
Agreement. VaxGen's notice must be sent at least twelve (12) months before the
starting date of the earliest clinical trial to be conducted, and shall specify
each clinical trial and its starting date, each type of Clinical Vaccine needed,
and what estimated amounts of it will be needed for each clinical trial. VaxGen
shall provide Genentech with additional information as reasonably requested.
(iii) Within forty five (45) days after VaxGen's notice,
for each type of Clinical Vaccine specified in VaxGen's notice, Genentech must
notify VaxGen if Genentech is able and willing to manufacture and supply it.
Genentech may not elect to manufacture and supply First Generation Clinical
Vaccine or any Vaccine Variant hereunder unless Genentech can demonstrate to the
Parties' mutual and reasonable satisfaction that Genentech's manufacture and
supply can be undertaken on a cost effective basis compared to potential third
party suppliers.
(iv) Each time (if any) that Genentech elects to
manufacture and supply a given type of Clinical Vaccine under this Section 4.2,
it shall be entitled to supply one hundred percent (100%) of the requirements of
VaxGen and its sublicensees of such type so elected, subject to the other terms
and conditions of this Agreement and the Supply Agreement (as defined in Section
4.5 below). Notwithstanding the foregoing, VaxGen shall be entitled to have a
third party perform fill and finish and/or quality control testing of Clinical
Vaccine supplied hereunder if Genentech is unable to do so on a timely basis or
at a price competitive with such third party's services, and in such case
Genentech's Fully Burdened Manufacturing Cost charged to VaxGen shall be
adjusted as appropriate.
4.3 NEWLY MANUFACTURED COMMERCIAL VACCINE(S). In addition to any
Clinical Vaccine supplied by Genentech under Sections 4.1 or 4.2 above,
Genentech shall have an exclusive option under this Section 4.3 to manufacture
and supply VaxGen (for itself and its sublicensees) with newly manufactured
First Generation Commercial Vaccine (as defined in Section 1.7) and/or one (1)
or more Vaccine Variants for any Licensed Product for commercial sale in the
Territory. The cost to VaxGen for such manufacture and supply hereunder shall be
Genentech's Fully Burdened Manufacturing Cost applicable to the type(s) of
Commercial Vaccine being delivered. The Parties have agreed further as follows:
(a) The option shall be exercisable on a case by case basis for
the First Generation Commercial Vaccine and/or for each Vaccine Variant for any
Licensed Product for commercial sale.
(b) VaxGen shall notify Genentech when VaxGen (or any of its
sublicensees) desires to obtain the first lot of a given type of Commercial
Vaccine for a Licensed Product for commercial sale. VaxGen's notice must be sent
at least eighteen (18) months before the date of
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Commercial Introduction of the Licensed Product, and shall specify the date of
Commercial Introduction, each type of Commercial Vaccine needed, and what
estimated amounts of it will be needed for the first year after Commercial
Introduction. VaxGen shall provide Genentech with additional information as
reasonably requested.
(c) Within forty five (45) days after VaxGen's notice under
clause (b) above, for each type of Commercial Vaccine specified in VaxGen's
notice, Genentech must notify VaxGen if Genentech is able and willing to
manufacture and supply it. If the type of Commercial Vaccine is a Vaccine
Variant, Genentech may not elect to manufacture and supply hereunder unless
Genentech can demonstrate to the Parties' mutual and reasonable satisfaction
that Genentech's manufacture and supply can be undertaken on a cost effective
basis compared to potential third party suppliers; provided, however, that such
cost-effectiveness is presumed and need not be demonstrated for the First
Generation Commercial Vaccine.
(d) Each time (if any) that Genentech elects to manufacture and
supply a given type of Commercial Vaccine under this Section 4.3, it shall be
entitled to supply one hundred percent (100%) of the requirements of VaxGen and
its sublicensees of such type so elected, subject to the other terms and
conditions of this Agreement and the Supply Agreement (as defined in Section 4.5
below). Notwithstanding the foregoing, VaxGen shall be entitled to have a third
party perform fill and finish and/or quality control testing of Commercial
Vaccine supplied hereunder if Genentech is unable to do so on a timely basis or
at a price competitive with such third party's services, and in such case
Genentech's Fully Burdened Manufacturing Cost charged to VaxGen shall be
adjusted as appropriate.
4.4 ALTERNATE SUPPLY.
(a) In any case where Genentech elects not to manufacture and
supply a given type of Clinical Vaccine or Commercial Vaccine under Sections 4.2
or 4.3 above (including if Genentech elects to manufacture and supply a given
type of Clinical Vaccine under Section 4.2 above but elects not to manufacture
and supply that same type of Commercial Vaccine under Section 4.3 above), VaxGen
shall have the right to require Genentech, at VaxGen's expense, to transfer the
Licensed Patent Rights and Licensed Knowhow necessary for the manufacture and
supply of such type of Clinical Vaccine or Commercial Vaccine to VaxGen. In
connection with such transfer: (i) VaxGen automatically shall have a right and
license hereunder and under Section 2.1 above to make such type of Clinical
Vaccine or Commercial Vaccine; (ii) VaxGen shall be entitled to arrange for such
manufacture and supply with alternative supplier(s) at VaxGen's expense, and in
connection therewith may sublicense its right and license hereunder to such
alternate supplier(s), subject to Section 2.2 above; and (iii) VaxGen shall not
owe Genentech the Fully Burdened Manufacturing Cost for such alternate
manufacture and supply, but the other terms of this Agreement (including the
royalty and profit-sharing provisions) shall continue to apply. In any case
where cost effectiveness as required under Sections 4.2(c) or 4.3(c) above
cannot be demonstrated for a given type of Clinical Vaccine or Commercial
Vaccine, the foregoing provisions of this Section 4.4(a) shall also apply,
provided that VaxGen (for itself and/or its sublicensees) shall be entitled to
arrange for manufacture and supply only with alternate supplier(s) more cost
effective than Genentech.
(b) If Genentech fails to supply any type of Clinical Vaccine or
Commercial
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Vaccine requested by VaxGen hereunder on a timely basis in accordance
with this Agreement and the Supply Agreement, and such failure continues uncured
for at least twelve (12) months, VaxGen shall have the right to require
Genentech, at Genentech's expense, to transfer the Licensed Patent Rights and
Licensed Knowhow necessary for the manufacture and supply of such type of
Clinical Vaccine or Commercial Vaccine to VaxGen. In connection with such
transfer: (i) VaxGen automatically shall have a right and license hereunder and
under Section 2.1 above to make or have made such type of Clinical Vaccine or
Commercial Vaccine; (ii) VaxGen shall be entitled to arrange for such
manufacture and supply with alternative supplier(s) at VaxGen's expense, and in
connection therewith may sublicense its right and license hereunder to such
alternative supplier(s), not subject to Section 2.2 above (provided that VaxGen
shall notify Genentech of any such alternative supplier(s) or sublicense(s));
and (iii) VaxGen shall not owe Genentech the Fully Burdened Manufacturing Cost
for such type of Clinical Vaccine or Commercial Vaccine, but the other terms of
this Agreement (including the royalty and profit-sharing provisions) shall
continue to apply.
(c) Except to the extent otherwise provided in Sections 4.4(a) or
(b) above, Genentech shall have no obligation to transfer any Licensed Patent
Rights, Licensed Knowhow or other technology relating to manufacture of Clinical
Vaccine and/or Commercial Vaccine to VaxGen or any of its sublicensees or any
other third party. Genentech's rights, obligations and potential obligations to
manufacture and supply under this Agreement extend to Clinical Vaccine and
Commercial Vaccine, but do not include or cover any Adjuvants or any other
components (whether active or not) of any Licensed Product.
4.5 SUPPLY AGREEMENT. In anticipation of Genentech supply under Section
4.1 above, the Parties shall agree upon and enter into a separate supply
agreement ("Supply Agreement") setting forth the Parties' understandings with
respect to forecasting of expected requirements, ordering, scheduling of
manufacture and delivery, quality control testing, invoicing and payment, record
keeping, and regulatory responsibilities (including, without limitation, which
Party is responsible for preparation and regulatory submission of all or part of
an establishment site license application, product license application or
equivalent application(s) under laws and regulations of the FDA or comparable
foreign agency, with respect to the manufacture of any Commercial Vaccine by
Genentech hereunder, which Party shall hold any such establishment, product or
other regulatory license(s), and other matters relating to manufacturing
arrangements hereunder). The Supply Agreement may be amended as mutually agreed
upon by the Parties in connection with the implementation of any Genentech
manufacture and supply under Sections 4.2 or 4.3 above, or alternative supply
under Section 4.4 above.
ARTICLE 5.0 PAYMENTS AND ACCOUNTING RECORDS.
5.1 ROYALTIES. In consideration for the license granted to VaxGen
hereunder by Genentech, VaxGen shall pay royalties to Genentech as set forth
hereinbelow in connection with sales of each Licensed Product by VaxGen or its
sublicensees, unless Genentech has elected to exercise its worldwide marketing
rights with respect to Licensed Products under Section 3.4 above (in which case
the Parties will share Net Profits as specified therein). If elected by
Genentech, royalties shall be payable to Genentech on all Net Sales of Licensed
Products in all countries within the Territory by VaxGen and its sublicensees.
Such royalties shall equal (a) twenty five percent (25%) of
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aggregate total Net Sales of such Licensed Product in such country by VaxGen and
its sublicensees, provided that any Commercial Vaccine component of such
Licensed Product has been manufactured and supplied by Genentech hereunder, and
(b) fifteen percent (15%) of aggregate total Net Sales of such Licensed Product
in such country by VaxGen and its sublicensees if clause (a) does not apply.
Such royalties shall be payable to Genentech for any product that is a "Licensed
Product" under this Agreement, and the Parties intend and agree that such
royalties will not increase in the event of issuance of a valid patent included
within the Licensed Patent Rights. The intellectual property licensed to VaxGen
pursuant to this Agreement includes substantial Licensed Knowhow. There can be
no assurance that any patent will issue based on any patent applications within
the Licensed Patent Rights.
5.2 PAYMENTS AND REPORTS. Royalties owed by VaxGen to Genentech under
this Agreement, or, if applicable, profit-sharing amounts owed by Genentech to
VaxGen under Section 3.4 above, with respect to any Licensed Product shall
accrue during each calendar quarter (or portion thereof) during the term of this
Agreement after the Commercial Introduction of such Licensed Product, and shall
be due and payable for such calendar quarter within sixty (60) days after the
end of such quarter. VaxGen shall calculate the royalties owed or, if
applicable, Genentech shall calculate the profit-sharing owed, in any case in
accordance with and subject to the terms and conditions of this Agreement. Each
Party shall remit any such payment due to the other Party hereunder by bank wire
transfer in immediately available funds to a bank account designated by the
Party to whom such payment is owed, in any case free and clear of any taxes,
duties, levies, fees or charges thereon, and the Party remitting such payment
shall make any applicable withholding payments due on behalf of the other Party
and provide the other Party with written documentation of such withholding. For
sales of any Licensed Product that occur in a currency other than United States
dollars ("FOREIGN CURRENCY SALES"), the quarterly payment shall be calculated as
follows:
{A/B}xC = United States dollars royalty or profit-sharing payment on
foreign currency sales, where
A = foreign currency "Net Sales" or "Net Profits" per quarter,
B = foreign exchange conversion rate, expressed in local currency
per United States dollar (using as the applicable foreign
exchange conversion rate the rate published in the Wall Street
Journal, or any other source mutually agreed upon by the Parties,
for the last business day of the applicable calendar quarter);
and
C = the royalty rate or profit-sharing percentage applicable to
such sales under this Agreement.
Together with any royalty payment or profit-sharing payment on sales of
Licensed Products under this Agreement, remitting Party shall render to the
other Party an accounting for such calendar quarter showing (i) total gross
sales and total Net Sales by the remitting Party and its sublicensees in the
currency in which such Net Sales were made, (ii) total gross profits and Net
Profits by the remitting Party and its sublicensees in currency in which such
Net Profits were made, and (iii) a Licensed
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Product-by-Licensed Product and country-by-country calculation of the aggregate
total of royalty and/or profit-sharing mounts payable with respect to all such
sales of Licensed Products (including, in the case of foreign currency sales,
the calculations set forth hereinabove).
5.3 VAXGEN ACCOUNTING RECORDS. VaxGen shall keep full, true and accurate
books of account containing all particulars which may be necessary for the
purpose of showing Net Sales of all Licensed Products by VaxGen and its
sublicensees, and, in case Genentech exercises its option trader Section 3.4
above, showing VaxGen's Development Costs for the first Licensed Product.
VaxGen's complete books of account and supporting data therefor shall be kept at
its principal place of business for
at least three (3) years following the end of the calendar year to which they
pertain (and access shall not be denied thereafter, if reasonably available),
and shall be made available for inspection and copying during regular business
hours by an independent accountant retained by Genentech at Genentech's sole
expense (except as otherwise provided hereinbelow) and reasonably acceptable to
VaxGen; provided, however, that such inspection shall not take place more often
than once per year during the term of this Agreement; and provided further,
however, that any such independent accountant shall have previously entered into
a confidentiality agreement limiting its disclosure of such information to
authorized representatives of the Parties or as required under applicable law
(with advance notice to the Parties of such need for disclosure) or arbitration
or litigation between the Parties relating to this Agreement. Any such
inspection shall be for the purpose of verifying Net Sales on sales of Licensed
Products by VaxGen and its sublicensees, or VaxGen's Development Costs under
Section 3.4 above, as the case may be. Results of any inspection hereunder shall
be made available promptly to both Parties in writing. If any inspection reveals
a miscalculation of royalty amounts that results in an underpayment to
Genentech, or a miscalculation of Development Costs that results in an
overpayment by Genentech, VaxGen shall promptly and completely correct any such
miscalculation by payment to Genentech, and if such underpayment or overpayment
is by five percent (5%) or more VaxGen shall pay all costs and expenses of such
inspection.
5.4 GENENTECH ACCOUNTING RECORDS. Genentech shall keep full, true and
accurate books of account containing all particulars which may be necessary for
the purpose of showing its Fully Burdened Manufacturing Cost, and, if Genentech
exercises its option under Section 3.4 above, showing Net Profits of all
Licensed Products by Genentech and its sublicensees. Genentech's complete books
of account and supporting data therefor shall be kept at its principal place of
business for at least three (3) years following the end of the calendar year to
which they pertain (and access shall not be denied thereafter, if reasonably
available), and shall be made available for inspection during regular business
hours by an independent accountant retained by VaxGen at VaxGen's sole expense
(except as otherwise provided hereinbelow) and reasonably acceptable to
Genentech; provided, however, that such inspection shall not take place more
often than once per year during the term of this Agreement; and provided
further, however, that any such independent accountant shall have previously
entered into a confidentiality agreement limiting its disclosure of such
information to authorized representatives of the Parties or as required under
applicable law (with advance notice to the Parties of such need for disclosure)
or arbitration or litigation between the Parties relating to this Agreement. Any
such inspection shall be for the purpose of verifying Net Profits on sales of
Licensed Products by Genentech and its sublicensees under Section 3.4 above, or
Genentech's Fully
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Burdened Manufacturing Cost, as the case may be. Results of any inspection
hereunder shall be made available promptly to both Parties in writing. If any
inspection reveals a miscalculation of profit-sharing amounts that results in an
underpayment to VaxGen, or a miscalculation of Fully Burdened Manufacturing Cost
that results in an overpayment by VaxGen to Genentech, Genentech shall promptly
and completely correct any such miscalculation by payment to VaxGen, and if such
underpayment or overpayment is by five percent (5%) or more Genentech shall pay
all costs and expenses of such inspection.
ARTICLE 6.0 INTELLECTUAL PROPERTY RIGHTS.
6.1 OWNERSHIP. Genentech shall retain title to the Licensed Knowhow and
Licensed Patent Rights, including, without limitation, any Licensed Knowhow and
Licensed Patent Rights developed or invented by Genentech in the future. VaxGen
shall retain title to any improvements to the Licensed Knowhow or Licensed
Patent Rights developed or invented solely by VaxGen or its sublicensees. The
Parties shall own jointly any improvements to any Licensed Knowhow or Licensed
Patent Rights developed or invented by both Parties. Designation of inventor(s)
on any patent application is a matter of law, and shall be solely within the
discretion of qualified patent counsel of Genentech and VaxGen to determine in
accordance with United States laws of inventorship and competent written
evidence of the Parties.
6.2 PATENT FILING, PROSECUTION AND MAINTENANCE. Subject to the other
terms and conditions of this Agreement (including the remainder of this Section
6.2), during the term of this Agreement, Genentech shall be responsible for the
filing, prosecution and maintenance of all Licensed Patent Rights, in
consultation with VaxGen, and VaxGen agrees to reimburse all reasonable costs
and expenses incurred by Genentech for the benefit of VaxGen hereunder within
thirty (30) days of receipt of an invoice from Genentech setting forth such
costs and expenses, including a reasonable apportionment of such costs and
expenses for patent applications and patents within the Licensed Patent Rights
that contain claims outside of or overlapping with the scope of rights licensed
to VaxGen under this Agreement (hereinafter, "Broad Claims"). Genentech shall
keep VaxGen informed of the status of filing, prosecution and maintenance of
Licensed Patent Rights in each country in the Territory, by: (i) providing
VaxGen with a copy of each patent application filed by Genentech hereunder
promptly after filing; (ii) for each patent application and patent hereunder
that contains Broad Claims, providing VaxGen with Genentech's reasonable
apportionment of out-of-pocket costs and expenses to date and on a going-forward
basis therefor, which VaxGen may review with Genentech as reasonably requested;
(iii) updating VaxGen on a regular basis (and in any event not less frequently
than annually) regarding the status of the patent applications and patents
within the License Patent Rights by providing VaxGen with a then-current version
of EXHIBIT A to this Agreement and reviewing it with VaxGen as reasonably
requested; and (iv) notifying VaxGen of any interference, opposition,
re-examination request, nullity proceeding, appeal or other interparty action or
reissuance proceeding involving the Licensed Patent Rights. Genentech shall
determine in its sole discretion, but with consultation with VaxGen as provided
herein, whether or not to file, perfect, prosecute, maintain or take or not take
any other action with respect to any patent application or patent within the
Licensed Patent Rights generally or in a particular country or territory within
the
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Territory (including, without limitation, any interference, opposition,
re-examination request, nullity proceeding, appeal or other interparty action or
reissuance proceeding involving the Licensed Patent Rights). However, if
Genentech desires to take (or not take) any such action but VaxGen is not
prepared to reimburse Genentech therefor as required hereunder, in such case
Genentech shall be free to take (or not take) such action at its sole cost and
expense and, on notice from Genentech to VaxGen, the rights licensed to VaxGen
under this Agreement with respect to such patent application or patent shall
return to Genentech and thereafter be excluded from the Licensed Patent Rights;
provided, however, that VaxGen shall be entitled to re-license such rights later
on terms to be agreed upon by the Parties. The foregoing shall not preclude
Genentech from licensing such rights to a third party in the interim; provided,
however, that Genentech shall notify VaxGen if Genentech is interested in
licensing such rights and VaxGen shall have a right of first negotiation with
respect to such rights for thirty (30) days from such notice from Genentech.
Furthermore, if Genentech in its sole discretion elects not to file, perfect,
prosecute, maintain or take any other action with respect to any patent
application or patent within the Licensed Patent Rights generally or in a
particular country or territory within the Territory (including, without
limitation, any interference, opposition, reexamination request, nullity
proceeding, appeal or other interparty action or reissuance proceeding involving
the Licensed Patent Rights), VaxGen may elect to take such action at its own
expense. Genentech shall provide reasonable assistance to VaxGen and execute
such necessary documents as VaxGen may request in connection therewith, at
VaxGen's expense.
6.3 PATENT INFRINGEMENT.
(a) If either Party learns that a third party is infringing or
allegedly infringing any Licensed Patent Rights, it shall promptly notify the
other Party thereof. The Parties shall cooperate and use reasonable efforts to
stop such alleged infringement without litigation.
(b) Genentech shall have the first right (but not the obligation)
to take the appropriate steps to remove the infringement or alleged of Licensed
Patent Rights, including, without limitation, initiating a suit, proceeding or
other legal action. If Genentech determines in its sole discretion not to take
any steps within one hundred eighty (180) days of discovering or being notified
of the alleged infringement, VaxGen shall have the right (but not the
obligation) to do so. Any suit, proceeding or other legal action taken under
this Section 6.3 shall be at the expense of and controlled by the Party bringing
or undertaking it, who shall be entitled to all proceeds of any damages or costs
recovered in such suit, proceeding or other legal action. The other Party may
choose to be represented in any such suit, proceeding or other legal action by
counsel of its own choice, at its own expense. If either Party lacks standing to
bring any suit, proceeding or other legal action hereunder or finds its
necessary to join the other Party in it, the other Party shall execute papers
and perform such other actions as may be reasonably required; provided, however,
that neither Party shall be required to transfer any fight, rifle or interest in
or to any property to the other Party or any other party to confer standing on a
Party hereunder. Both Parties may elect to bring a suit, proceeding or other
legal action hereunder, and if so, before commencement thereof the Parties shall
agree on equitable apportionment of the costs and expenses and the damages to be
recovered from it.
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6.4 THIRD PARTY PATENT RIGHTS. If a notice of infringement is received
by, or a suit is initiated against, either Party with respect to any Licensed
Product, the Parties shall consult in good faith regarding the best response.
ARTICLE 7.0 CONFIDENTIALITY.
7.1 CONFIDENTIALITY. In the course of performance of this Agreement, one
Party may disclose to the other Party or receive from the other Party
information which is confidential information of the disclosing Party. In order
to be considered confidential information of the disclosing Party, such
information must be in writing and designated as confidential, or if disclosed
orally must be continued in writing to the other Party as confidential within
thirty (30) days after such oral disclosure ("Confidential Information"). In
addition, for the purposes of this Agreement, Confidential Information shall not
include information that (in each case as evidenced by written records or other
competent evidence):
(a) was known to the receiving Party at the time of disclosure
hereunder by the disclosing Party;
(b) was generally available to the public or was otherwise part
of the public domain at the time of disclosure hereunder, or became generally
available to the public or otherwise part of the public domain after disclosure
hereunder other than through any act or omission of the receiving Party in
breach of this Agreement;
(c) became known to the receiving Party after disclosure from a
source that had a lawful right to disclose such information to others; or
(d) was independently developed by the receiving Party without
the use of any Confidential Information of the disclosing Party.
Each Party shall protect and keep confidential and shall not use,
publish or otherwise disclose to any third party the other Party's Confidential
Information for a period of five (5) years from the date of disclosure
hereunder, except as otherwise permitted by this Agreement (including, without
limitation, under Section 7.2 below) or with the other Party's prior consent.
The foregoing notwithstanding, each Party may disclose Confidential Information
of the other Party during any official proceeding before a court or governmental
agency, or as a part of a patent application filed on inventions made under this
Agreement, provided that the Party whose Confidential Information is included in
such application shall have the opportunity to review such proposed disclosure
at least thirty (30) days prior to the date of such filing and does not object
in writing to such proposed disclosure. In the event of an objection the
consultation provisions of Section 7.2 below shall apply.
7.2 PUBLICATIONS. The Parties shall consult prior to the submission of
any manuscript for publication or other disclosure (e.g., abstract, poster,
presentation), to determine if the proposed disclosure contains any Confidential
Information of the other Party. In connection therewith, each Party shall
provide the other Party with a copy of the proposed disclosure at least thirty
(30) days prior to the first disclosure thereof (such as submission of an
abstract). In the course of such consultation, the Party whose Confidential
Information is proposed to be disclosed shall have the
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right to incorporate appropriate changes into the proposed disclosure and to
delete any of its Confidential Information which such Party does not agree to
the publication or other disclosure thereof.
ARTICLE 8.0 REPRESENTATIONS AND WARRANTIES.
8.1 DISCLAIMER. Except as expressly provided in this Agreement, the
Parties disclaim all other representations and warranties, express or implied,
including, without limitation, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, or NONINFRINGEMENT.
8.2 REPRESENTATIONS AND WARRANTIES. Each party represents and warrants
to the other Party that the representing and warranting Party, to its best
knowledge: is free to enter this Agreement, in so doing it will not violate any
other agreement to which it is party or subject, and currently has the right to
grant the licenses granted as set forth in this Agreement
ARTICLE 9.0 LIABILITY.
9.1 LIMITATION OF LIABILITY. Neither Party shall be liable to the other
for indirect, incidental, special or consequential damages arising out of or
resulting from any term or condition of this Agreement or with respect to their
performance or lack thereof.
9.2 INDEMNIFICATION BY VAXGEN. VaxGen shall indemnify, defend and hold
harmless Genentech and its directors, officers, employees, agents and affiliates
from and against all costs, claims, suits, liabilities, expenses (including
reasonable attorneys' fees) and damages arising out of or resulting from the
development, manufacture, administration, use or sale by VaxGen and its
sublicensees of any Licensed Product, Clinical Vaccine or Commercial Vaccine,
except where such cost, claim, suit, expense or damage arose or resulted solely
from (i) any willful or grossly negligent act or omission by Genentech or (ii)
any defect in the manufacture of any Clinical Vaccine or Commercial Vaccine by
Genentech which was not discovered or reasonably discoverable by VaxGen or its
sublicensees. VaxGen's indemnification obligations hereunder shall be
conditioned upon Genentech (i) giving reasonable notice to VaxGen of any such
claim or action, (ii) tendering the defense of such claim or action to VaxGen,
(iii) reasonably assisting VaxGen (at VaxGen's expense) in investigating and
defending such claim or action, and (iv) not compromising or settling such claim
or action without VaxGen's prior consent.
9.3 INDEMNIFICATION BY GENENTECH. Genentech shall indemnify, defend and
hold harmless VaxGen and its directors, officers, employees, agents and
affiliates from and against all costs, claims, suits, liabilities, expenses
(including reasonable attorney's fees) and damages arising out of or resulting
from any defect in the manufacture of any Clinical Vaccine or Commercial Vaccine
by Genentech that was not discovered or reasonably discoverable by VaxGen or its
sublicensees, except where such cost, claim, suit, expense or damage arose or
resulted solely from
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any willful or grossly negligent act or omission by VaxGen or its sublicensees.
Genentech's indemnification obligations hereunder shall be conditioned upon
VaxGen (i) giving reasonable notice to Genentech of any such claim or action,
(ii) tendering the defense of such claim or action to Genentech's, (iii)
reasonably assisting Genentech (at Genentech's expense) in investigating and
defending such claim or action, and (iv) not compromising or settling such claim
or action without Genentech's prior consent.
9.4 INSURANCE. Without limiting any indemnification obligations under
this Agreement, VaxGen shall obtain and maintain on an on-going basis for the
time period specified herein below comprehensive general liability and products
liability insurance (including contractual liability coverage of VaxGen's
indemnification obligations under this Agreement) in the amount of at least
Twenty Five Million Dollars ($25,000,000) per occurrence and annual aggregate
combined single limit for bodily injury and property damage liability, with such
insurance coverage to be maintained with an insurance company or companies
reasonably acceptable to Genentech and with a deductible or maximum self-insured
retention not to exceed Five Hundred Thousand Dollars ($500,000) per occurrence
and annual aggregate. This insurance shall not contain any exclusions or
limitations in are regard to liability relating to AIDS/HIV. VaxGen shall obtain
such insurance coverage no later than ninety (90) days prior to the commencement
of the first human clinical trial testing any Clinical Vaccine (including any
First Generation Clinical Vaccine or any Vaccine Variants), and thereafter shall
maintain such insurance coverage without interruption during the term of this
Agreement and for a period of at least ten (10) years after the expiration or
termination of this Agreement. Such insurance shall name Genentech as an
additional insured, shall state that it is primary to any valid and collectible
insurance available to Genentech which also covers the same loss for which
VaxGen has liability pursuant to the Agreement (including, without limitation,
under Article 9.0 of the Agreement), shall contain a cross-liability or
severability of interest clause, and shall state that Genentech will be provided
with at least thirty (30) days' advance written notice of any termination,
cancellation or material change in the insurance policy. VaxGen shall provide
Genentech with evidence of such insurance coverage as required under this
Agreement by no later than the deadline specified above for obtaining such
insurance coverage, and thereafter shall continue to provide Genentech with
evidence of such required insurance coverage on an annual basis (by not later
than each annual renewal date of such coverage) during the term of this
Agreement and for a period of at least ten (10) years after the expiration or
termination of this Agreement. VaxGen may satisfy its obligation to provide
evidence of such required insurance coverage by providing Genentech with
complete copies of the insurance policies themselves or certificates from its
insurance company or companies evidencing the coverage required hereunder. To
assist VaxGen in complying with the provisions of this Section 9.4, VaxGen may
consult as reasonably requested with Genentech's risk manager and insurance
brokers.
ARTICLE 10.0 TERM AND TERMINATION.
10.1 TERM. This Agreement shall commence on the Effective Date and,
unless earlier terminated in accordance herewith, shall expire on a
country-by-country and Licensed Product-by Licensed Product basis fifteen (15)
years from the date of Commercial Introduction of such Licensed Product in such
country. At the end of the applicable time period under the foregoing sentence,
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provided that the license to VaxGen hereunder has not already been terminated
under this Article 10, VaxGen shall have a perpetual, fully paid-up,
non-exclusive license under the Licensed Patent Rights and Licensed Knowhow to
make, have made, use and sell Licensed Products on a country-by-country basis in
the Territory, and if Genentech has timely exercised its option under Section
3.4 above, Genentech shall have a perpetual, fully paid-up, non-exclusive
license under all improvements to the Licensed Patent Rights or Licensed Knowhow
that are solely or jointly owned by VaxGen (under Section 6.1 above), to make,
have made, use and sell Licensed Products in the Territory.
10.2 TERMINATION FOR DEFAULT. Failure by either Party to comply with any
of its material obligations set forth in this Agreement shall entitle the
non-defaulting Party to give the defaulting Party a notice specifying the nature
of the default and requiring the defaulting Party to make good its default. If
such default is not cured within thirty (30) days after such notice, the
non-defaulting Party shall be entitled, without prejudice to any of its other
fights under this Agreement or available to it at law or in equity, to terminate
this Agreement effective upon a notice of termination to the defaulting Party.
10.3 TERMINATION FOR INSOLVENCY OR BANKRUPTCY. Either Party may, in
addition to any other remedies available to it by law or in equity, terminate
this Agreement, in whole or in part as the terminating Party may determine, by
notice to the other Party in the event the other Party shall have become
insolvent or bankrupt, or shall have made an assignment for the benefit of its
creditors, or there shall have been appointed a trustee or receiver of the other
Party or for all or a substantial part of its property, or there shall have been
issued a warrant of attachment, execution, distraint or similar process against
any substantial part of the property of the other Party, or any case or
proceeding shall have been commenced or other action taken by or against the
other Party in bankruptcy or seeking reorganization, liquidation, dissolution,
winding-up, arrangement, composition or readjustment of its debts or any other
relief under any bankruptcy, insolvency, reorganization or other similar act or
law of any jurisdiction now or hereafter in effect, provided that in any such
case such event shall have continued for sixty (60) days undismissed, unbonded
and undischarged. Furthermore, all rights and licenses granted under to this
Agreement are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as
defined under Section 101(56) of the United States Bankruptcy Code. The Parties
agree that in the event of the commencement of a bankruptcy proceeding by or
against one Party under the United States Bankruptcy Code, the other Party shall
be entitled to complete access to any such intellectual property, and all
embodiments of such intellectual property, pertaining to the rights granted in
the licenses hereunder of the Party by or against whom a bankruptcy proceeding
has been commenced.
10.4 UNILATERAL TERMINATION.
(a) Genentech shall have the right to terminate this Agreement,
in its sole discretion, effective on notice to VaxGen delivered by Genentech no
later than January 31, 1997, if a Private Placement raising aggregate gross
proceeds of at least Twenty Million Dollars ($20,000,000) for VaxGen's business
operations has not closed by December 1, 1996. In addition, during the term of
this Agreement, VaxGen shall provide Genentech with a brief but accurate written
calculation in reasonable detail of VaxGen's Consolidated Tangible Net Worth on
a periodic basis
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as provided in the next sentence, and VaxGen shall cooperate reasonably with
Genentech's review and evaluation of each such written calculation. VaxGen shall
provide such written calculation to Genentech on a semi-annual basis during the
term of this Agreement, commencing with the date that is six (6) months after
the Effective Date, and every six (6) months thereafter. Furthermore, if at any
time during the term of this Agreement VaxGen becomes aware that it has failed
to maintain a Consolidated Tangible Net Worth of at least the amounts set forth
below in this Section 10.4(a), VaxGen promptly shall notify Genentech thereof.
If VaxGen fails to maintain a Consolidated Tangible Net Worth of at least Five
Million Dollars ($5,000,000) during the term of this Agreement, the Parties
promptly will meet and discuss in good faith VaxGen's future plans for financing
and development of Licensed Products, to determine a mutually acceptable
business plan. If VaxGen fails to maintain a Consolidated Tangible Net Worth of
at least One Million Dollars ($1,000,000) during the term of this Agreement,
Genentech in its sole discretion may either terminate this Agreement or convert
VaxGen's license hereunder to a non-exclusive basis, effective upon notice from
Genentech to VaxGen.
(b) VaxGen shall have the right to terminate this Agreement, in
its sole discretion, on six (6) months' prior notice to Genentech. If VaxGen
terminates this Agreement pursuant to this Section 10.4(b), VaxGen agrees that
for the following five (5) years it will not develop, manufacture, use, sell or
acquire from any third party (whether by license or otherwise) any Licensed
Product in the Field of Use in the Territory.
10.5 EFFECT OF TERMINATION.
(a) Expiration or termination of this Agreement for any reason
shall be without prejudice to any rights which shall have accrued to the benefit
of either Party prior to such expiration or termination, and shall not relieve
either Party from its obligations which are expressly indicated to survive
expiration or termination of this Agreement; such rights and obligations
include, without limitation, those under Sections 5.2, 5.3, 5.4, 10.4(b), 10.5,
11.1 and 11.5, and under Articles 6, 7, 8 and 9, of this Agreement.
(b) No termination of this Agreement (except termination by
Genentech under Section 10.4 above), shall be construed as termination of any
sublicenses granted by VaxGen under Section 2.2 above or sublicensees granted by
Genentech under Section 3.4 above, in which case each such sublicensee shall be
thereafter a direct sublicensee of Genentech (or a direct sublicensee of VaxGen,
in the case of Genentech sublicensees), but only if each such sublicensee is
then in full compliance with all terms and conditions of its sublicense, all
payments owed under such sublicense to Genentech (or VaxGen, in the case of
Genentech sublicensees) have been paid, and the sublicensee agrees at least ten
(10) days prior to the effective termination of the main license to assume all
obligations of VaxGen (or all obligations of Genentech, in the case of Genentech
sublicensees) under this Agreement. Termination of this Agreement by Genentech
under Section 10.4(a) shall automatically terminate all sublicenses of VaxGen
hereunder.
(c) On any termination of this Agreement: (i) VaxGen promptly
shall return to Genentech all tangible Licensed Patent Rights, Licensed Knowhow
and other property owned by
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Genentech (whether solely or jointly with VaxGen) under Section 6.1 above that
are in VaxGen's possession or control, including, without limitation, all
biological materials, pre-clinical and clinical data, and applicable
improvements to Licensed Patent Rights or Licensed Knowhow; and (ii) VaxGen
promptly shall take all appropriate and necessary actions, including with the
FDA and other involved regulatory agencies, to effect the assignment or transfer
to Genentech (or to no longer permit further reference to by VaxGen) of all
Genentech Regulatory filings, as directed by Genentech. All such activities
shall be conducted in a prompt and orderly fashion such that the value of what
is being transferred is preserved, and shall be at VaxGen's expense if this
Agreement is terminated by Genentech or terminated by VaxGen under Section
10.4(b), and otherwise at Genentech's expense. In addition, on any termination
of this Agreement by Genentech, or any termination of this Agreement by VaxGen
under Section 10.4(b) above, Genentech automatically shall be granted a
non-exclusive, royalty-free license in the Territory to all improvements to
Licensed Patent Rights or Licensed Knowhow that are solely or jointly owned by
VaxGen (under Section 6.1 above), and VaxGen at its own expense promptly shall
transfer to Genentech all such improvements that are in VaxGen's possession or
control.
ARTICLE 11.0 GENERAL PROVISIONS.
11.1 NOTICES. Any notice, request, delivery, demand, report, accounting,
approval or consent required or permitted to be given under this Agreement shall
be in writing and shall be deemed sufficiently given on the same day as delivery
if delivered in person or transmitted by telecopier (with continued answer-back)
in any case by 5:00 p.m. local time, on the next business day if sent by
overnight courier service, and in three (3) business days if sent by registered
or certified mail, in any case addressed to the Party to whom it is directed at
its address shown below or such other address as such Party shall have last
given by notice to the other Party in accordance with this Section:
If to VaxGen, addressed to: VaxGen, Inc.
1000 Marina Boulevard
Brisbane, CA 94005-1841
Attn: Dr. Don Francis
Telecopy: (650) 624-1001
with a copy (not constituting notice) to: Robert C. Nowinski
VaxGen, Inc.
23210 Woodway Park Road
Edmonds, WA 98020
Telecopy: (206) 542-4432
If to Genentech, addressed to Genentech, Inc.
1 DNA Way
South San Francisco,
California 94080
Attn: Corporate Secretary
Telecopy: (650) 952-9881
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11.2 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California (other than its choice of
law principles).
11.3 ENTIRE AGREEMENT. Except for the Credit Agreement, the Services
Agreement, the Supply Agreement and the Stock Agreements, this Agreement is the
entire agreement and understanding between the Parties, and supersedes and
cancels any and all prior negotiations, correspondence, understandings and
agreements, whether written or oral, between the Parties respecting the subject
matter hereof, including, without limitation, that certain Letter of Intent
between the Parties dated as of November 17, 1995. No amendment or other
modification of this Agreement shall be binding on either Party unless reduced
to writing and signed by an authorized officer of each Party.
11.4 BINDING EFFECT AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective permitted
successors and assigns, subject to the remainder of this Section. This Agreement
shall not be assignable by VaxGen in whole or in part without Genentech's prior
consent in its sole discretion. This Agreement shall not be assignable by
Genentech in whole or in part without VaxGen's consent in its sole discretion,
except that Genentech may assign this Agreement in whole or in part without
VaxGen's consent in connection with any consolidation, merger, redemption, put
or sale of stock, conveyance of substantially all of Genentech's assets, or
change-of-control transaction that involves Genentech, Genentech's parent
company F. Hoffmann La-Roche Ltd., a Swiss corporation, or their affiliates.
11.5 DISPUTE RESOLUTION. Except as otherwise expressly provided in this
Agreement (including Sections 3.3 or 3.4 above), in the event of any dispute,
controversy or claim arising out of or relating to this Agreement, the Parties
shall try to settle it amicably between themselves including first referring
such dispute, controversy or claim to a member of Genentech's Operations
Committee and VaxGen's Board of Directors for resolution. If the Parties are
unable to so settle such dispute, controversy or claim within sixty (60) days
after such referral, then either Party may, by notice to the other, have it
referred to their respective chief executive officers for attempted resolution
by good faith negotiations within thirty (30) days after such notice. In the
event the chief executive officers are not able to resolve it, either Party may
at any time after the thirty (30)-day period invoke the arbitration provisions
of this Section 11.5.
All arbitration proceedings shall be conducted in San Francisco,
California, under the procedural rules of the American Arbitration Association.
The Party requesting arbitration shall serve upon the other Party a demand for
arbitration stating the substance of the controversy, dispute or claim, and the
contention of the Party requesting arbitration. Within sixty (60) days after the
demand, the Parties shall each select one arbitrator, which arbitrators shall
together select a third arbitrator. The three arbitrators are to act as neutral
arbitrators and shall have no past, present or anticipated future affiliation
with the Parties which would unduly influence the independence of an arbitrator.
The decision of the arbitrators shall be in writing setting forth the basis
therefore.
Prior to the commencement of the arbitration proceeding, each Party
shall submit to the arbitrators its "best offer" to resolve the dispute,
controversy, or claim. The arbitrators shall
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consider the "best offer" of each Party, communicate to the Parties their
respective "best offers" and after the arbitration proceeding select the "best
offer" of the Party which prevailed over the other Party based on the
arbitration proceeding. The arbitrators shall have the authority to award
compensatory damages, interest, tort damages (but not punitive or similar
damages) and specific performance and other equitable relief. The Parties shall
abide by the award rendered in such arbitration proceeding, and such award may
be enforced and executed upon in any court having jurisdiction over the Party
against whom enforcement of such award is sought. During such arbitration
proceedings, each Party shall pay its arbitrators' fees, administration charges
and related expenses of arbitration. The losing Party shall thereafter reimburse
the prevailing Party for all such costs incurred in connection with such
arbitration.
11.6 WAIVER. The waiver by either Party of any breach of or default
under any of the provisions of this Agreement or the failure of either Party to
enforce any of the provisions of this Agreement or to exercise any right
thereunder shall not be construed as a waiver of any other breach or default or
a waiver of any such rights or provisions hereunder.
11.7 SEVERABILITY. If any part of this Agreement shall be held invalid,
illegal or unenforceable by any court of authority having jurisdiction over this
Agreement or either Party, such part shall be ineffective only to the extent of
such invalidity, illegality or unenforceability, and shall be validly reformed
by addition or deletion of wording as appropriate to avoid such result and as
nearly as possible approximate the intent of the Parties. If unreformable, this
Agreement shall be divisible and deleted in such jurisdiction, but elsewhere
shall not be affected.
11.8 PUBLICITY. VaxGen and Genentech shall consult and obtain mutual
consent before making any public announcement concerning this Agreement, the
subject matter hereof or use of the other Party's name, except for information
that is already in the public domain or where the nature of such information has
been previously approved for disclosure (in which case this Section 11.8 will no
longer apply to that previously approved information).
11.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original for all purposes, but
all of which together shall constitute one and the same instrument.
11.10 NO OTHER RIGHTS. No rights or licenses, express or implied, are
granted to VaxGen by this Agreement to use in any manner any trade name or
trademark of Genentech, or any other intellectual property not expressly covered
by this Agreement.
11.11 FORCE MAJEURE. Neither Party shall be liable to the other for loss
or damages or shall have any right to terminate this Agreement (except as
otherwise provided in this Agreement) for any default or delay of the other
Party in its performance under this Agreement that is attributable to an act of
God, flood, fire, explosion, strike, lockout, labor dispute, casualty or
accident, war, revolution, civil commotion, act of public enemies, blockage or
embargo, injunction, law, order, proclamation, regulation, ordinance, demand or
requirement of any government or subdivision, authority or representative of any
such government, or any other cause beyond the reasonable control of the
29
<PAGE> 33
affected Party, if the Party affected shall give prompt notice of any such cause
to the other Party. The Party giving such notice shall thereupon be excused from
such of its obligations hereunder for the period of time that it is so disabled.
11.12 HEADINGS. Headings are for the convenience of reference only and
shall not control the construction or interpretation of any of the provisions of
this Agreement.
11.13 NO PARTNERSHIP. Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, agency, employer-employee, or joint venture
relationship between the Parties. Neither Party shall incur any debts or make
any commitments for the other Party.
IN WITNESS WHEREOF, the Parties each have caused this Agreement to be
duly executed by its duly authorized representative as of the date set forth
above.
GENENTECH, INC. VAXGEN, INC.
By: /s/ W.D. Young By: /s/ Donald Francis
------------------------ ----------------------------
Name: W.D. Young Name: Donald Francis
---------------------- --------------------------
Title: COO Title: President
--------------------- -------------------------
<PAGE> 34
EXHIBIT A
LICENSED PATENT RIGHTS
<TABLE>
<CAPTION>
SUBJECT COUNTRY STATUS APPLN. NO. APPLN. DT. PAT. NO. DATE GRANTED
------- ------- ------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Vaccine Australia Granted 51705/85 DEC 23 1985 600658 DEC 11 1990
Vaccine Canada Pending 498600 DEC 24 1985
Vaccine European Pending 85309454.8 DEC 23 1985
Vaccine Malaysia Granted PI8701924 SEP 24 1987 MY102030A FEB 29 1992
Vaccine Canada Granted 559508 FEB 22 1988 1330038 JUN 07 1994
Vaccine European Pending 88301425 FEB 19 1988
Vaccine Japan Pending 38459/88 FEB 20 1988
Vaccine United Pending 08/405616 MAR 15 1995
States
Vaccine Australia Granted 75847/91 APR 01 1991 647108 JUN 30 1994
Vaccine Austria Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Belgium Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Canada Pending 2078546-2 APR 01 1991
Vaccine Denmark Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine European Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine France Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Germany Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Great Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Britain
Vaccine Greece Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Italy Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Japan Pending 506683/91 APR 01 1991
Vaccine Luxembourg Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Netherlands Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine New Pending 237666 APR 03 1991
Zealand
Vaccine Spain Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Sweden Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
Vaccine Switzerland Granted 91907077.1 APR 01 1991 527760 JUL 19 1995
(&LI)
Vaccine United Pending 08/226162 APR 11 1994
States
</TABLE>
<PAGE> 35
<TABLE>
<CAPTION>
SUBJECT COUNTRY STATUS APPLN. NO. APPLN. DT. PAT. NO. DATE GRANTED
------- ------- ------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Adjuvant PCT Pending PCT/US94/11753 OCT 13 1994
Adjuvant United Pending 08/365986 DEC 28 1994
States
Adjuvant United Pending 08/447291 MAY 22 1995
States
Vaccine Australia Pending 7047894 JUN 07 1994
Vaccine European Pending 94919281.9 JUN 07 1994
Vaccine New Pending 267838 JUN 07 1994
Zealand
Vaccine United Pending 08/448603 JUN 07 1995
States
Adjuvant PCT Pending PCT/US94/11674 OCT 13 1994
Adjuvant United Pending 08/460363 JUN 01 1995
States
Adjuvant Argentina Pending 329860 OCT 21 1994
Adjuvant Chile Pending 1544-94 OCT 21 1994
Adjuvant Mexico Pending 948028 OCT 17 1994
Adjuvant PCT Pending PCT/US94/11678 OCT 13 1994
Adjuvant United Pending 08/143313 OCT 25 1993
States
Adjuvant Uruguay Pending 23846 OCT 21 1994
Adjuvant Venezuela Pending 1650-94 OCT 27 1994
Process United Pending 08/650364 MAY 20
Vaccine United Pending GNE Docket JUL 8 1996
States P1008
</TABLE>
*Pending in 17 European countries.
THIRD PARTY AGREEMENTS
License and Supply Agreement, dated as of June 28, 1992, between
Genentech and Cambridge Biotech Corporation.
Sublicense Agreement, dated as of September 30, 1991, between Genentech
and Cambridge Biotech Corporation.
Letter agreement, dated November 28, 1995, between Genentech and Univax
Biologics.
<PAGE> 36
EXHIBIT 10.14
EXHIBIT B
INFORMATION AND MATERIALS
I. PROTOCOLS, DATA, RESULTS AND REPORTS FROM THE FOLLOWING PRECLINICAL STUDIES
OF THE VACCINE:
Non-clinical immunogenicity and efficacy studies:
<TABLE>
<CAPTION>
Study No. Study Title
--------- -----------
<S> <C>
1180-02-86 Guinea pig dose response studies of rgp120/HIV-1 (IIIB) adsorbed to
aluminum hydroxide gel adjuvant
1180-001-87 Effect of dose and immunization interval on the immune response
of baboons to recombinant glycoprotein 120 of human
immunodeficiency virus (rgp 120/HIV- 1 (IIIB)); ref: J Inf Dis 160,
960-969 (1989)
AIDS-86-001 Evaluation of recombinant gp 120/HIV- 1 (IIIB) as a
vaccine to prevent primary HIV- 1 infection in
chimpanzees (Study 1); ref: Proc Natl Acad Sci USA
85, 5200-5204 (1988)
AIDS-88-002 Evaluation of recombinant gp 120/HIV- 1 (IIIB) and
recombinant soluble gp 160/HIV-1 IIIB as vaccines
to prevent primary HIV-l (IIIB) infection in
chimpanzees (Study 2); ref: Nature 345,
622-625-969 (1990)
AIDS-91-02 Evaluation of rgp120 as vaccine to prevent primary
infection by HIV-1 (Southwest Foundation Study
91-63) .
4-414/93-006 Efficacy of IIIB rgp120 vaccine against chimeric
SIV/HIV (SHIV) virus infection in Macaca Mulatta
(TSI Mason Laboratories Study)
</TABLE>
Non-clinical toxicology studies:
<TABLE>
<CAPTION>
Study No. Study Title
--------- -----------
<S> <C>
1180-006-87-565 Pilot study: Acute toxicity of vaccine formulated recombinant
glycoprotein 120 (rgp120) of human immunodeficiency virus (HIV)
in baboons
</TABLE>
<PAGE> 37
<TABLE>
<S> <C>
90-048-1180 Acute intramuscular tolerance study with GN1180 in rabbits
90-049-1180 Acute intramuscular tolerance study with GN1180 in guinea pigs
91-327-1180 GN1180 (MN rgp120/HIV-1): Local tolerance and acute toxicity
study in guinea pigs
92-537-1180 Developmental toxicity (embryo-fetal toxicity and teratogenic
potential) study of GN1180 administered intramuscularly to
Crl:CD(R) BR VAF/Plus(R) female rats
92-540-1180 Acute intramuscular tolerance study with GN1180 in rabbits
92-541-1180 6-month intramuscular safety/adjuvant study with GN1180 in rabbits
92-620-1180 6-month intramuscular toxicity study with GN1180 in rats 93-508-1180
A dosage-range study of postnatal development in Crl:CD(R)BR
VAF/Plus(R) rats administered GN1180 or GN1180 adjuvant
subcutaneously during the neonatal period
93-509-1180 Developmental neurotoxicity study of GN1180 administered
subcutaneously to neonatal Crl:CD(R)BR VAF/Plus(R) rats
</TABLE>
2. THE GENENTECH REGULATORY FILINGS (AS DEFINED IN THE AGREEMENT).
3. PROTOCOLS, DATA, RESULTS AND REPORTS FROM THE FOLLOWING CLINICAL STUDIES OF
THE VACCINE:
Protocols, data, results and reports from each of the following clinical
studies of the Vaccine shall be provided to VaxGen, but only to the extent that
(a) such information is necessary for a Licensed Product or its development,
manufacture, use or sale under this Agreement, (b) VaxGen uses such information
solely for purposes of development and commercialization of Licensed Products
under this Agreement, (c) such information is then available at Genentech (or
can be obtained at VaxGen's expense), and (d) Genentech has the right to
transfer or provide such information to VaxGen (or can obtain such rights at
VaxGen's expense):
<TABLE>
<S> <C>
V0199g A Phase I study of the safety and immunogenicity of rgp120/HIV-1 (IIIB)
vaccine in healthy adult subjects
V0200g A Phase I study of the safety and immunogenicity of rgp120/HIV-1 (IIIB)
vaccine in HIV-1 seropositive volunteers
V0344g A Phase I study of the safety and immunogenicity of MN
rgp120/HIV-1 given alone, IIIB rgp 120/HIV-1 given
alone,
</TABLE>
<PAGE> 38
<TABLE>
<S> <C>
MN rgp 120/HIV-1 given concurrently with IIIB rgp 120/HIV-1, and MN rgp120/HIV-1 alternating with IIIB rgp
120/HIV-1 vaccines in HIV-1 seropositive subjects with CD4 cell counts greater than 500 cells/(mu)L
VO346g A Phase II multicenter study of the safety and efficacy of MN rgp 120/HIV-1 vaccine compared with placebo
in HIV-1 seropositive subjects with CD4 cell counts greater than 600 cells/mm(3)
V0385g A Phase I multicenter study of the safety and immunogenicity of MN rgp 120/HIV-1 vaccine given either
alone or in combination with IIIB rgp 120/HIV-1 vaccine in healthy adult subjects
V0413g A Phase I study of the safety and immunogenicity of IIIB rgp 120/HIV-1 and MN rgp 120/HIV-1 vaccines in
healthy adult subjects who have been immunized with IIIB rgp 120/HIV-1 on protocol V0199g (AVEG 006)
V0477g A placebo-controlled Phase I study of the safety and immunogenicity of MN rgp 120/HIV-1 given alone or
concurrently with IIIB rgp 120/HIV-1 vaccines in HIV-1 infected subjects with a known date of
seroconversion and with CD4 cell counts greater than 400 cells/(mu)L
V0530g A Phase I Study Providing Extended Immunization with MN rgp 120/HIV-1 Vaccine to Subjects Who Have
Previously Participated in Protocol V0344g
V0578g A Phase I Study of the Safety of MN rsgp120/HIV-1 Antigen for Use as a Skin Test Reagent
V0633g Evaluation of safety and immunogenicity (Phase I/II) of MN rgp 120/HIV-1 alum adjuvant candidate vaccine
in recovering intravenous drug users in Bangkok, Thailand
V0478s/ACTG209 A Phase I/II trial of vaccine therapy of HIV-1-infected individuals with 50-500 cells/mm(3)
V0508s/AVEG 016, 016A, A phase I, multicenter, randomized, double-blind, placebo-controlled HIV-1 vaccine trial to evaluate
016B the safety and of MN rsgp120/HIV-1 in combination with QS21 adjuvant and/or alum in healthy adults
</TABLE>
<PAGE> 39
<TABLE>
<S> <C>
V0515s/AVEG104 Phase I safety and immunogenicity trial of MNrgp120/HIV-1 vaccine in HIV-1 infected pregnant women with CD4
lymphocyte counts >= 400/mm(3)
V0516s A Phase I comparative blinded trial of several HIV-1 derived immunogens in infected individuals with >= 500
CD4 cells/mm(3)
V0517s/AVEG201 A Phase II trial to evaluate the immunogenicity and reactogenicity of the recombinant subunit HIV-1
envelope vaccines SF-2 rgp120 (Biocine/Chiron) in MF59 and MN rgp120 (Genentech) in alum in high risk
populations
V0518s/ACTG218 A placebo controlled Phase I clinical trial to evaluate the safety and immunogenicity of recombinant
envelope proteins of HIV-1 gp160 and gp120 in children >= 1 month old with asymptomatic HIV infection
V0519s/ACT230 A placebo controlled, phase I clinical trial to evaluate the safety and immunogenicity of recombinant
envelope proteins of HIV1 gp 160 and gp120 in children >= 1 month old with asymptomatic HIV infection
V0521s/AVEG010 A Multicenter, randomized trial to evaluate the safety and immunogenicity of a recombinant vaccinia-HIV
envelope vaccine (HIVAC1-e) in combination with a group of subunit recombinant HIV envelope vaccines in
vaccinia-naive individuals
V0535s Evaluation of the safety and immunogenicity of MN rgp120/HIV-1 vaccine in healthy seronegative subjects and
the identification and recovery of higher-titer source plasma with activity against HIV-1
V0600s/AVEG009x A phase I multicenter study of the safety and immunogenicity of MN rgp 120/HIV-1 vaccine given either alone
or in combination with IIIb rgp 120/HIV-1 vaccine in healthy adult subjects, Amendment II
V0601s/AVEG006x A phase I safety and immunogenicity trial of Genentech MN rgp 120 in HIV uninfected volunteers who have
previously received vaccinations with MN rgp120 and/or IIIB rgp120, Amendment II
V0635s/ACTG279 A Phase I trial of the safety and immunogenicity of MN rsgp 120/HIV-1 with the adjuvants QS-21 and alum
compared to MN rsgp 120/HIV-1 and QS-21 in infants born to HIV-1 infected women
V0707s Delayed type hypersensitivity responses in HIV-1 uninfected persons at low or high risk for acquiring HIV-1
infection
</TABLE>
<PAGE> 40
<TABLE>
<S> <C>
VO719s/AVEG015 A Phase I, randomized, double-blind, clinical trial to compare the safety and immunogenicity of
recombinant envelope protein SF-2 rgp120/HIV-1, individually combined with seven adjuvants, in healthy
HIV-1 uninfected individuals, Amendment II
</TABLE>
4. MANUFACTURED MATERIALS AND DOCUMENTATION FOR GENENTECH'S PREVIOUS MANUFACTURE
OF FIRST GENERATION CLINICAL VACCINE (AS DEFINED IN THE AGREEMENT):
First Generation Clinical Vaccine and, if elected, Clinical Vaccine
and/or Commercial Vaccine (potentially including Vaccine Variants),as set forth
in the Agreement.
Genentech manufacturing tickets and quality control testing procedures
and results for First Generation Clinical Vaccine supplied to VaxGen.
5. OTHER DRUG SUBSTANCES, REAGENTS, CELL LINES, PLASMIDS AND ADDITIONAL LICENSED
KNOWHOW:
Each of the following shall be provided to VaxGen in the mounts it
reasonably requests, but only to the extent that (a) such material is necessary
for a Licensed Product or its development, manufacture, use or sale under this
Agreement, Co) VaxGen uses such material solely for purposes of development and
commercialization of Licensed Products under this Agreement, (c) such material
is then available at Genentech (or can be obtained at VaxGen's expense), and (d)
Genentech has the right to transfer or provide such material to VaxGen (or can
obtain such rights at VaxGen's expense):
Bulk and/or vialed sCD4.
Bulk and/or vialed CD4-IgG.
Bulk and/or vialed IIIB isolate of the Vaccine, formulated with the
adjuvant aluminum hydroxide, as previously manufactured by Genentech, but only
in amounts sufficient for non-clinical research purposes unless Genentech elects
to provide clinical and/or commercial supplies of this version of the Vaccine as
provided in Section 4 of the Agreement.
Bulk and/or vialed adjuvant comprised of bulk aluminum hydroxide.
Bulk and/or vialed adjuvant comprised of biodegradable polylactide
(lactide-co-glycolide) copolymer microspheres encapsulating the Vaccine, but
only in amounts sufficient for non-clinical research purposes.
Bulk and/or vialed adjuvant comprised of QS-21, with or without aluminum
hydroxide.
Bulk and/or vialed soluble placebos in amounts necessary for human
clinical trials of the First Generation Clinical Vaccine.
<PAGE> 41
rgp120 Mabs and Fab's.
5B6 anti-herpes gD Mabs and Fab's.
xrgp120 immunoaffinity resins (5B6, IF12).
Patient plasma and data relating thereto licensed to Genentech by North
American Biologics, Inc. (formerly Univax).
Data and other knowhow relating to any of the Adjuvants.
Aliquots from rgp120 (IIIB isolate) master and working banks.
Aliquots from rgp120(MN isolate) master and working banks.
Research rgp120 cell lines.
rgp120 hybridomas and E.coli expressing Fab's.
HIV-related plasmids and Mab/Fab' plasmids.
anti-gp120 hydridoma and E.coli Mab/Fab' expression/production.
<PAGE> 42
XIII. LICENSED PATENTS
Under the License Agreement, VaxGen has licensed or sublicensed from Genentech
exclusive rights to use patents and patent applications relating to the HIV
gp120 vaccine formulations developed by Genentech and to certain adjuvant
technology, as such patents and patent applications have issued or have been
filed in the U.S. and various other countries. The patents and patent
applications cover the gp120 protein, its manufacture and its use as a vaccine,
including truncated viral glycoproteins which include the HIV gp120 protein,
gp120 protein from any HIV strain or substrain, fusion proteins useful in
recombinant DNA production of gp120, a preferred vaccine in which essentially
100% of the gp120 protein has an intact (non-proteolytically cleaved) principle
neutralizing determinant ("PND"), a method to produce PND-intact gp120 and a
method to use PND-intact gp120 as a vaccine. Rights to second generation
vaccines are further covered by patent applications relating to preferred, novel
gp120 proteins from certain HIV substrain and to multi-subunit vaccines
containing certain gp120 proteins from more than one HI strain or substrain. The
patents and patent applications also cover certain adjuvant technology,
including new adjuvant formulations and long-release adjuvants.
The collective group of 21 patents and 51 patent applications include 2 issued
U.S. patents, 19 issued foreign patents (covering 22 countries), of which four
are European patents (each covering the EEC countries). In addition, them are 16
patent applications pending with the U.S. Patent and Trademark Office and 35
patent applications pending with foreign patent agencies; five of the 35 foreign
patent applications are European applications. Presented below there is a
description of the patents currently licensed to the Company.
<TABLE>
<CAPTION>
SUBJECT COUNTRY STATUS APPLN. NO. APPLN. DT. PAT. NO. DATE GRANTED
------- ------- ------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Vaccine Denmark Pending 4122/84 08/29/84
Vaccine Greece Granted 80220 08/29/84 80220 NOV 15 1984
Vaccine South Africa Granted 84/6764 08/29/84 84/6764 APR 24 1995
Vaccine Canada Pending 617008 08/27/84
Vaccine Japan Pending 222311/95 08/30/84
Vaccine New Zealand Granted 230123 08/22/84 230123 DEC 13 1991
Vaccine Australia Granted 51705/85 08/22/84 600658 DEC 11 1990
Vaccine Hong Kong Granted 0139417 08/29/84 9870F1992 DEC 10 1992
Vaccine Ireland Granted 2210/84 08/29/84 58030 JUN 16 1993
Vaccine Canada Pending 498600 12/24/85
Vaccine Austria Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine Belgium Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine European Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine France Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine Germany Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine Great Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Britain
Vaccine Italy Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine Luxembourg Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine Netherlands Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine Sweden Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Vaccine Switzerland & Granted 85309454.8 12/23/85 0187041 MAY 15 1996
Liechtenstein
Vaccine Malaysia Granted PI8701924 09/24/87 MY102030A FEB 29 1992
Vaccine Canada Granted 559508 02/22/88 1330038 JUN 07 1994
Vaccine Austria Granted 88301425.0 02/19/88 0279688 APR 16 1997
</TABLE>
<PAGE> 43
<TABLE>
<CAPTION>
SUBJECT COUNTRY STATUS APPLN. NO. APPLN. DT. PAT. NO. DATE GRANTED
------- ------- ------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Vaccine Belgium Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine European Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine France Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine Germany Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine Great Granted 88301425.0 02/19/88 0279688 APR 16 1997
Britain
Vaccine Greece Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine Italy Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine Luxembourg Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine Netherlands Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine Spain Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine Sweden Granted 88301425.0 02/19/88 0279688 APR 16 1997
Vaccine Switzerland & Granted 88301425.0 02/19/88 0279688 APR 16 1997
Liechtenstein
Vaccine Japan Pending 38459/88 02/20/88
Vaccine United Pending 08/953550 10/17/97
States
Vaccine Australia Granted 75847/91 04/1/91 647108 JUN 30 1994
Vaccine Canada Pending 2078546-2 04/1/91
Vaccine Japan Pending 506683/91 04/1/91
Vaccine Austria Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine Belgium Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine Denmark Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine European Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine France Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine Germany Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine Great Granted 91907077.1 04/1/91 527760 JUL 19 1995
Britain
Vaccine Italy Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine Luxembourg Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine Netherlands Granted 91907077.1 04/1/91 527760 JUL 19 1995
</TABLE>
<PAGE> 44
<TABLE>
<CAPTION>
SUBJECT COUNTRY STATUS APPLN. NO. APPLN. DT. PAT. NO. DATE GRANTED
------- ------- ------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Vaccine Sweden Granted 91907077.1 04/1/91 527760 JUL 19 1995
Vaccine Switzerland & Granted 237666 04/03/91 23766 DEC 05 1997
Liechtenstein
New Zealand
Vaccine Australia Pending 7047894 06/07/94
Vaccine Canada Pending 2164505 06/07/94
Vaccine European* Pending 94919281.9 06/07/94
Vaccine New Zealand Pending 267838 06/07/94
Vaccine United Pending 08/357084 12/15/94
States
Vaccine United Pending 08/282,857 07/29/94
States
Vaccine Canada Pending 2172509 10/13/94
Vaccine United Pending 08/405616 03/15/95
States
Vaccine United Pending 08/447291 05/22/95
States
Vaccine United Pending 08/459141 06/02/95
States
Vaccine United Pending 08/459147 06/02/95
States
Vaccine United Pending 08/470107 06/06/95
States
Vaccine United Pending 08/448603 06/07/95
States
Vaccine European* Pending 94930794.6 10/13/95
Vaccine Japan Pending 512118/95 10/13/95
Vaccine United Pending 08/802361 02/19/97
States
Vaccine Argentina Pending P970102984 07/03/97
Vaccine India Pending 1266/CAL/97 07/03/97
Vaccine Indonesia Pending P972342 07/07/97
Vaccine South Africa Pending 97/5889 07/02/97
Vaccine Taiwan Pending 86109394 07/03/97
Vaccine Thailand Pending 038312 07/03/97
Vaccine PCT Pending PCT/US97/09690 07/03/97
Vaccine United Pending 08/88984 07/08/97
States
Adjuvant United Granted 08/460363 06/01/95 5843605 JUL 01 1997
States
</TABLE>
<PAGE> 45
<TABLE>
<CAPTION>
SUBJECT COUNTRY STATUS APPLN. NO. APPLN. DT. PAT. NO. DATE GRANTED
------- ------- ------ ---------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Adjuvant Canada Pending 2172507 10/13/94
Adjuvant European* Pending 94930768.0 10/13/94
Adjuvant Japan Pending 512073/95 10/13/94
Process Spain Granted 535554 08/30/84 535554 DEC 20 1985
Process Austria Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process Belgium Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process European Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process France Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process Germany Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process Great Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Britain
Process Italy Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process Luxembourg Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process Netherlands Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process Sweden Granted 84305909.8 08/29/84 0139417 JUL 26 1989
Process Switzerland & Granted 84305909.8 08/29/84 P139417.4 JUL 26 1989
Liechtenstein
Process Spain Granted 552539 08/30/84 552539 MAR 06 1987
Process Mexico Granted 923719 06/29/92 178947 JUL 27 1995
Process United Granted 08/226162 04/11/94 5674984 OCT 07 1997
States
Process Argentina Pending 329860 10/21/94
Process Canada Pending 2172508 10/13/94
Process Chile Pending 1544-94 10/21/94
Process European* Pending 94931369.6 10/13/94
Process Japan Pending 512076/95 10/13/94
Process Mexico Pending 948028 10/17/94
Process Uruguay Pending 23846 10/21/94
Process Venezuela Pending 1650-94 10/27/94
Process United Pending 08/966850 11/07/97
States
</TABLE>
*Pending in 17 European countries.
<PAGE> 46
Under the License Agreement, Genentech has retained title to the licensed
patents and patent applications and other Licensed Technology, while the Company
will retain title to any improvements developed by it. Both parties will jointly
own any improvements to the licensed patents and patent applications or other
Licensed Technology developed or invented jointly. Genentech will remain
responsible for the filing, prosecution and maintenance of all Licensed Patent
Rights, in consultation with the Company, at the Company's expense (including a
reasonable apportionment of the costs and expenses incurred by Genentech
relating to patent applications or patents within the Licensed Patent Rights
that contain claims outside of, or overlapping with, the scope of the license to
the Company). See "Risk Factors, Dependence upon Patents and Proprietary
Technology."