EXHIBIT 1.1
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MASTER AGREEMENT
BETWEEN
TARGETED GENETICS CORPORATION
AND
MEDEVA PHARMACEUTICALS, INC.
AN AFFILIATE OF
MEDEVA PLC
DATED NOVEMBER 23, 1998
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"[*]" = omitted, confidential material, which material has been separately filed
with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
TABLE OF CONTENTS
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PAGE
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ARTICLE 1 DEFINITIONS.................................................... 4
1.1 "Affiliate".................................................. 4
1.2 "Applicable Laws"............................................ 4
1.3 "Approval Application"....................................... 4
1.4 "Bulk Licensed Product"...................................... 5
1.5 "Contract Manufacturer"...................................... 5
1.6 "Control".................................................... 5
1.7 "Country".................................................... 5
1.8 "Development Period"......................................... 5
1.9 "Development Plan"........................................... 5
1.10 "Development Work"........................................... 6
1.11 "Europe"..................................................... 6
1.12 "FDA"........................................................ 6
1.13 "FFDCA"...................................................... 6
1.14 "Field"...................................................... 6
1.15 "First Commercial Sale"...................................... 6
1.16 "GLP"........................................................ 6
1.17 "GMP"........................................................ 7
1.18 "Government Authority"....................................... 7
1.19 "Improvement"................................................ 7
1.20 "Joint Invention"............................................ 7
1.21 "Joint Patents".............................................. 7
1.22 "Know-How"................................................... 7
1.23 "Licensed Know-How".......................................... 8
1.24 "Licensed Patent Rights"..................................... 8
1.25 "Licensed Product(s)"........................................ 8
1.26 "Major European Country"..................................... 8
1.27 "Manufacturing Cost"......................................... 8
1.28 "Medeva's Manufacturing Rights".............................. 8
1.29 "Medeva Trademarks".......................................... 8
1.30 "Minimum Performance Level".................................. 9
1.31 "Minor European Country"..................................... 9
1.32 "Net Sales".................................................. 9
1.33 "Net Sales Per Annual Dose".................................. 10
1.34 "New Product"................................................ 11
1.35 "Obligations"................................................ 11
1.36 "Outside Contractor"......................................... 11
1.37 "Patent Costs"............................................... 12
1.38 "Patent Rights".............................................. 12
1.39 "Phase I Clinical Trial"..................................... 12
1.40 "Phase II Clinical Trial".................................... 13
1.41 "Phase III Clinical Trial"................................... 13
1.42 "Project Year"............................................... 13
1.43 "Reasonable Commercial Efforts".............................. 13
1.44 "Region"..................................................... 13
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1.45 "Regulatory Approval"........................................ 13
1.46 "Responsible Executive"...................................... 13
1.47 "Specifications"............................................. 14
1.48 "Steering Committee"......................................... 14
1.49 "Sublicensee"................................................ 14
1.50 "Third Party"................................................ 14
1.51 "Third Party Agreement(s)"................................... 14
1.52 "Transaction Documents"...................................... 14
1.53 "Transfer Price"............................................. 14
1.54 "U.S." or "United States".................................... 14
ARTICLE 2 CORPORATE STRUCTURE AND CONTRACTUAL RELATIONSHIP............... 14
2.1 General...................................................... 14
2.2 Formation of New TGC Subsidiary.............................. 15
2.3 Pledge of Stock of TG-Sub.................................... 17
2.4 Security Interest............................................ 17
2.5 Cell Lines................................................... 18
2.6 Sublicense................................................... 18
2.7 Limitation................................................... 18
2.8 Further Assurances........................................... 19
ARTICLE 3 CONFIDENTIALITY................................................ 19
3.1 Confidentiality; Exceptions.................................. 19
3.2 Authorized Disclosure........................................ 21
3.3 Return of Confidential Information........................... 21
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3.4 Publications and Announcements............................... 22
ARTICLE 4 REPRESENTATIONS AND WARRANTIES................................. 24
4.1 Representations and Warranties of the Parties................ 24
4.2 Representations and Warranties of TGC........................ 24
4.3 Representations and Warranties Specific to Third Party
Agreements................................................... 28
4.4 Disclaimer................................................... 31
ARTICLE 5 TERM AND TERMINATION........................................... 31
5.1 Term......................................................... 31
5.2 Termination at Will.......................................... 32
5.3 Termination for Cause........................................ 32
5.4 Limitation on Termination for Cause.......................... 33
5.5 Termination for Insolvency................................... 35
5.6 Rights on Termination........................................ 35
5.7 Accrued Rights............................................... 38
5.8 Survival..................................................... 38
ARTICLE 6 INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY............ 38
6.1 Indemnification by Medeva.................................... 39
6.2 Indemnification by TGC....................................... 39
6.3 Indemnification Procedure.................................... 40
6.4 Insurance.................................................... 43
6.5 Limitation of Liability; Remedies Cumulative................. 43
ARTICLE 7 GOVERNING LAW; DISPUTE RESOLUTION.............................. 44
7.1 Governing Law................................................ 44
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7.2 Dispute Resolution........................................... 44
7.3 Courts of Law................................................ 44
ARTICLE 8 MISCELLANEOUS.................................................. 45
8.1 Assignment................................................... 45
8.2 Force Majeure................................................ 45
8.3 Further Actions.............................................. 46
8.4 Governmental Approvals; Compliance with Law.................. 46
8.5 Public Announcement.......................................... 46
8.6 Notices...................................................... 47
8.7 Waiver....................................................... 48
8.8 Disclaimer of Agency......................................... 49
8.9 Severability................................................. 49
8.10 Entire Agreement............................................. 50
8.11 Counterparts................................................. 50
List of Schedules and Exhibits
Schedule 1.7 Countries and Regions
Schedule 1.38A U.S. Patent Rights
Schedule 1.38B Non-U.S. Patent Rights
Schedule 1.47 Specifications for Bulk Licensed Product
Schedule 4.2 Other Patent Rights
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MASTER AGREEMENT
THIS MASTER AGREEMENT (the "Agreement") is made effective as of the 23rd
day of November 1998 (the "Effective Date") by and between TARGETED GENETICS
CORPORATION, a corporation organized under the laws of the State of Washington,
United States of America, having offices at 1100 Olive Way, Suite 100, Seattle,
Washington 98101, United States of America ("TGC"), and MEDEVA PHARMACEUTICALS,
INC., having offices at 755 Jefferson Road, Rochester, New York 14632, United
States of America ("Medeva"), an Affiliate of MEDEVA PLC, a public limited
liability company organized under the laws of England, having offices at 10 St.
James's Street, London, SW1A 1EF, England ("Medeva PLC"). TGC and Medeva are
sometimes referred to herein individually as a "Party" and collectively as the
"Parties."
RECITALS
1. TGC has entered into the following four license agreements
(collectively, the "Third Party Agreements") under which it acquired certain
rights relating to cystic fibrosis gene therapy: (a) a non-exclusive license
agreement, dated March 28, 1994, with the Regents of the University of Michigan
and HSC Research and Development Limited Partnership (the "U. Michigan/HSC
Agreement"), (b) a non-exclusive license agreement, dated June 23, 1993, with
certain agencies of the United States Public Health Service within the
Department of Health and Human Services (the "NIH/CDC L-232-92 Agreement"), (c)
an exclusive license agreement, dated March 8, 1994, with certain agencies of
the United States Public Health Service within the Department of Health and
Human Services (the "NIH/CDC L-059-93 Agreement"), and (d) an exclusive sub-
license agreement, dated July 23, 1996, with Alkermes, Inc., an exclusive
licensee
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of the Children's Hospital Research Foundation/Children's Hospital, Inc. (the
"Alkermes Agreement").
2. TGC owns or, pursuant to the Third Party Agreements, is a licensee of
certain patents, patent applications and valuable technology and know-how
relating inter alia to cystic fibrosis gene therapy and the treatment of cystic
fibrosis using an adeno-associated viral ("AAV") vector to deliver a gene
encoding cystic fibrosis transmembrane regulator ("CFTR") protein.
3. Medeva has valuable intellectual property and technology relating to
delivery of pharmaceutical products by inhalation and other means and has
experience with the clinical development and marketing of such products.
4. The Parties wish to collaborate in the further development and
commercialization of a CFTR gene therapy product for the treatment of cystic
fibrosis.
5. It is the intent of the Parties that TGC will manufacture such CFTR
gene therapy product in bulk form (defined hereinafter as "Bulk Licensed
Product") and supply such Bulk Licensed Product exclusively to Medeva, and that
Medeva, after purchase of such Bulk Licensed Product from TGC, will finish and
pack such bulk form CFTR gene therapy product to provide a final finished form
of the product (defined hereinafter as "Licensed Product") for purposes of
marketing, selling and otherwise commercializing such Licensed Product.
6. In furtherance of these objectives, the Parties are concurrently
herewith entering into the following agreements:
(a) A certain License and Collaboration Agreement (the "LCA"),
pursuant to which the Parties will collaborate to develop such a CFTR gene
therapy product, and possibly
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other gene therapy products, for the treatment of cystic fibrosis, on terms and
conditions set forth more fully therein. The LCA will also include a license to
Medeva of TGC's rights under certain extant and future patents, patent
applications and know-how (excluding patents, patent applications and know-how
under the Third Party Agreements) to use the Bulk Licensed Product to make, have
made, use, have used, offer for sale, lease, market, sell, have sold and import
the Licensed Products;
(b) A certain Supply Agreement (the "Supply Agreement"), pursuant to
which TGC will manufacture Bulk Licensed Product and supply it to Medeva, on
terms and conditions set forth more fully therein;
(c) A certain Common Stock Purchase Agreement (the "Stock Purchase
Agreement"), pursuant to which Medeva will purchase from TGC shares of common
stock of TGC, on terms and conditions set forth more fully therein; and
(d) A certain Credit Agreement (the "Credit Agreement"), pursuant to
which Medeva will extend TGC credit for the purpose of constructing a facility
to manufacture Bulk Licensed Product, on terms and conditions set forth more
fully therein.
7. The Parties acknowledge and agree that development of human therapeutic
products involves risk and, in an effort to reduce the level of risk in
connection with the Parties' activities under the several agreements described
in paragraph 6 above, the Parties, to the extent consistent with the long-range
business objectives of both TGC and Medeva and as may be possible under each of
the Parties' separate circumstances, desire to segregate certain assets, rights
and liabilities associated with the development, manufacture and
commercialization of Bulk Licensed Product and the Licensed Product(s). As a
result, TGC intends to organize a new
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corporate structure and to provide contractual arrangements, as described in
further detail in Article 2 hereinbelow, to protect the respective interests of
each of the Parties.
In consideration of the premises and of the mutual covenants and
obligations set forth herein, the Parties agree as set out below.
ARTICLE 1
DEFINITIONS
The following capitalized terms shall have the following meanings when used
in the Transaction Documents (as defined in Section 1.52 below):
1.1 "AFFILIATE" means any individual, corporation, association or other
business entity which directly or indirectly controls, is controlled by or is
under common control with the Party in question. As used in this definition of
"Affiliate," the term "control" means the direct or indirect ownership of more
than fifty percent (50%) of the stock having the right to vote for directors
thereof or the ability to otherwise control the management of the corporation or
other business entity whether through the ownership of voting securities, by
contract, resolution, regulation or otherwise.
1.2 "APPLICABLE LAWS" means all laws, statutes, ordinances, codes, rules
and regulations which have been enacted by a Government Authority and are in
force as of the Effective Date or come into force during the term of this
Agreement, in each case to the extent that the same are applicable to the
performance by the Parties of their respective obligations under this Agreement.
For purposes of the Transaction Documents, GLP and GMP shall be deemed to be
within the term "Applicable Laws."
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1.3 "APPROVAL APPLICATION" means the appropriate application(s) necessary
to obtain Regulatory Approval(s), together with all documents, data and
information concerning Licensed Products in the Field required to be included
with such application(s).
1.4 "BULK LICENSED PRODUCT" means TGC's CFTR gene therapy product, as
further described in the Specifications;
1.5 "CONTRACT MANUFACTURER" means any Third Party contracted by TGC or
Medeva to provide manufacturing-related products or services which constitute or
are material to Bulk Licensed Product or to Licensed Product, or any component
or ingredient therein, or which result in any work product or other information
that TGC or Medeva would include or might reasonably be expected to include in
any document or report, including without limitation an Approval Application,
submitted to a Government Authority or be subject to review by a Government
Authority including without limitation the FDA. Without limiting the foregoing,
the term "Contract Manufacturer" shall include any Third Party, other than an
Outside Contractor, contracted by TGC or Medeva whose acts or omissions in
connection with its assumption of any obligation of TGC or Medeva under the
Supply Agreement would be imputed to, and would therefore be considered, the
acts or omissions of TGC or Medeva pursuant to FFDCA or by a Government
Authority, including without limitation FDA.
1.6 "CONTROL" means, with respect to intellectual property, that the named
Party owns such intellectual property, or otherwise possesses the ability to
grant a license or sublicense under such intellectual property without violating
the terms of any agreement or other arrangement with a Third Party and to the
extent permitted thereby.
1.7 "COUNTRY" means, for each Region, the country or, in the case of
Regions 3, 4 and 5, each of the countries, as selected by Medeva, set forth in
column (a) of Schedule 1.7.
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1.8 "DEVELOPMENT PERIOD" means the term of the Development Plan.
1.9 "DEVELOPMENT PLAN" shall have the meaning set forth in Section 3.1 of
the LCA.
1.10 "DEVELOPMENT WORK" shall have the meaning set forth in Section 3.1 of
the LCA.
1.11 "EUROPE" means all of the Major European Countries and all of the
Minor European Countries.
1.12 "FDA" means the United States Food and Drug Administration, and any
successor thereto.
1.13 "FFDCA" means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. (S)
321 et seq., as amended.
1.14 "FIELD" means the treatment of cystic fibrosis.
1.15 "FIRST COMMERCIAL SALE" means the first sale of a Licensed Product by
Medeva, its Affiliates or its Sublicensees for use or consumption of such
Licensed Product in a Country where Regulatory Approval of such Licensed Product
has been obtained by Medeva. Sale of a Licensed Product by Medeva to an
Affiliate of Medeva or a Sublicensee of Medeva shall not constitute a First
Commercial Sale unless such Affiliate or such Sublicensee is the end user of the
Licensed Product, provided, however, in no event shall any sales for
premarketing, testing or sampling be deemed a First Commercial Sale.
1.16 "GLP" means current good laboratory practices equivalent to those
applicable in the United States and Europe and in effect from time to time
during the term of this Agreement.
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1.17 "GMP" means current good manufacturing practices equivalent to those
applicable in the United States and Europe and in effect from time to time
during the term of this Agreement.
1.18 "GOVERNMENT AUTHORITY" means any supranational, national, regional,
state or local government, court, governmental agency, authority, board, bureau,
instrumentality or regulatory body.
1.19 "IMPROVEMENT" means any improvement in or modification to an existing
Licensed Product, including without limitation any intellectual property
(whether patented or the subject of patent applications or otherwise) covering
such improvement or modification, except to the extent that such improvement or
modification results in a molecular sequence that is different from the
molecular sequence of such Licensed Product. The term Improvement shall not
include any New Product, as defined in Section 1.34.
1.20 "JOINT INVENTION" means any invention, development, or discovery made
or created jointly by employees or agents of TGC or any of its Affiliates, and
employees or agents of Medeva or any of its Affiliates during the course of
performance of Development Work pursuant to the Development Plan.
1.21 "JOINT PATENTS" means (i) all patents that claim Joint Inventions and
that are filed by or on behalf of TGC and/or Medeva or an Affiliate of either
pursuant to Section 6.4 of the LCA; (ii) any applications for patents that claim
improvements on Joint Inventions; (iii) any divisional, continuation,
continuation-in-part or substitute application which claims priority from any of
the foregoing applications; and (iv) any patent which may issue on any of the
foregoing applications and any extensions, reexaminations or re-issues of any of
the foregoing patents.
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1.22 "KNOW-HOW" means information, data and proprietary rights of any type
whatsoever (other than the Patent Rights) in any tangible or intangible form
whatsoever which is relevant to the development, manufacture and
commercialization of Bulk Licensed Products and Licensed Products, including
without limitation inventions, practices, methods, techniques, specifications,
formulations, formulae, knowledge, know-how, skill, experience, test data
(including pharmacological, biological, chemical, biochemical, toxicological and
clinical test data), analytical and quality control data, stability data,
results of studies, technical drawings and related copyrights, and other similar
information.
1.23 "LICENSED KNOW-HOW" means Know-How Controlled by TGC at any time
during the term of this Agreement.
1.24 "LICENSED PATENT RIGHTS" means the Patent Rights, excluding any and
all patents and patent applications licensed to TGC under the Third Party
Agreements.
1.25 "LICENSED PRODUCT(S)" means any product containing Bulk Licensed
Product.
1.26 "MAJOR EUROPEAN COUNTRY" means each of [ * ].
1.27 "MANUFACTURING COST" means the actual cost of manufacturing Bulk
Licensed Product, consisting of (i) the direct cost of transport, labor and
materials, and (ii) allocable manufacturing related overhead, but excluding
general administrative costs relating to the management of the company as
opposed to the costs of management of the manufacturing of Bulk Licensed
Product. All such costs shall be determined in accordance with generally
accepted accounting principles.
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1.28 "MEDEVA'S MANUFACTURING RIGHTS" shall have the meaning set forth in
Section 2.3.
1.29 "MEDEVA TRADEMARKS" shall have the meaning set forth in Section 4.4 of
the LCA.
1.30 "MINIMUM PERFORMANCE LEVEL" means treatment with a Licensed Product of
at least (i) [ * ] of the treatable population in the Field in each Country in
each of the following Regions: Region 1, Region 2 and Region 3, and (ii) [ * ]
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of the treatable population in the Field in each Country in each of the
following Regions: Region 4 and Region 5. Notwithstanding the above, in the
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event that competition from a Third Party exists in any Country in any Region
for the treatment of the treatable population by a product which generates
functional CFTR protein other than a Licensed Product, the percentages set forth
as the Minimum Performance Level under (i) and (ii) above shall be reduced to
[ * ] and [ * ], respectively. For purposes of this Section 1.30, the phrase
"the treatable population in the Field" with respect to a Country shall mean
those patients registered as cystic fibrosis patients with a clinic or other
treatment center known to Medeva in such Country for whom treatment by Licensed
Product is permitted in accordance with a Regulatory Approval in such Country.
1.31 "MINOR EUROPEAN COUNTRY" means each of the countries (other than the
Major European Countries) comprising the European Union and the European Free
Trade Area as of the Effective Date.
1.32 "NET SALES" means the amount billed or invoiced in U.S. dollars (or
converted thereto in accordance with the rate announced by NatWest Bank, London,
England, for purchase
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/*/ Confidential Treatment Requested.
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of the applicable currency on the last day of the calendar quarter in which such
amount was billed or invoiced) on sales of Licensed Products by a Party or
Affiliates of a Party or Sublicensees of a Party to independent, unrelated
parties in bona fide arm's length transactions, less the following deductions,
in each case related specifically to a Licensed Product and, except in respect
of clause (viii) below, actually allowed and taken by such parties and not
otherwise recovered by or reimbursed to such Party or an Affiliate of such Party
or a Sublicensee of such Party: (i) trade, cash, promotional and quantity
discounts to the extent that such amounts are set forth separately as such in
the total amount billed or invoiced; (ii) taxes on sales (such as sales or use
taxes or value added tax) to the extent added to the sales price and set forth
separately as such in the total amount billed or invoiced; (iii) freight,
insurance, packing costs and other transportation charges to the extent added to
the sales price and set forth separately as such in the total amount billed or
invoiced; (iv) amounts repaid or credits taken by reason of rejections, defects
or returns or because of retroactive price reductions, or due to recalls or
government laws or regulations requiring rebates; (v) free goods, rebates taken
by or fees paid to distributors, and charge-backs to the extent that such
amounts are documented; (vi) documented customs duties actually paid by such
Party, Affiliates of such Party or Sublicensees of such Party on import into the
country of sale; (vii) [ * ]; and (viii) allowances for doubtful accounts
recorded by a Party in its financial books and records, and determined in
accordance with GAAP in the U.S. in the case of TGC and in the United Kingdom in
the case of Medeva. Net Sales shall also include the amount or fair market value
of all other consideration received by a Party or Affiliates of a Party or
Sublicensees of a Party in respect of Licensed Products, whether such
consideration is in cash, payment in kind, exchange or other form.
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/*/ Confidential Treatment Requested.
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1.33 "NET SALES PER ANNUAL DOSE" means the numerical value obtained from
(i) Net Sales in a period (i.e., a calendar quarter or a calendar year) in each
jurisdiction where Licensed Products were sold, divided by (ii) the number of
doses sold in such period in such jurisdiction, multiplied by (iii) the number
of doses of Licensed Product to be administered to a patient in a one-year
period as indicated under the Regulatory Approval for such Licensed Product in
such jurisdiction (or, if such a number of doses is not so indicated, the number
of doses per patient generally used).
1.34 "NEW PRODUCT" means any product, including without limitation any
intellectual property (whether patented or the subject of patent applications or
otherwise) covering such product, with a molecular sequence that is different
from the molecular sequence of an existing Licensed Product. For purposes of
example, a product which would be the result of a modification of either the
promoter, the gene or the vector of an existing Licensed Product would be a New
Product. The term New Product shall not include any Improvement, as such term is
defined in Section 1.19.
1.35 "OBLIGATIONS" shall have the meaning set forth in Section 2.3.
1.36 "OUTSIDE CONTRACTOR" means any Third Party contracted by TGC or Medeva
to provide products or services, including without limitation regulatory
services, but excluding manufacturing-related products or services, which are
material to the performance of its responsibilities under the Development Plan,
or which result in any work product or other information that TGC or Medeva
would include or might reasonably be expected to include in any document or
report, including without limitation an Approval Application, submitted to a
Government Authority or be subject to review by a Government Authority,
including without limitation the FDA. Without limiting the foregoing, the term
"Outside Contractor" shall include
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any Third Party, other than a Contract Manufacturer, contracted by TGC or Medeva
whose acts or omissions in connection with its assumption of any obligation of
TGC or Medeva under the LCA or the Supply Agreement, would be imputed to, and
would therefore be considered the acts or omissions of, TGC or Medeva pursuant
to FFDCA or by a Government Authority, including without limitation FDA.
1.37 "PATENT COSTS" means all preparation, filing, prosecution and
maintenance out-of-pocket fees and expenses, incurred in connection with the
establishment and maintenance of rights under the Patent Rights or Joint
Patents.
1.38 "PATENT RIGHTS" means (i) the U.S. patents and patent applications
listed on Schedule 1.38A attached hereto plus such other U.S. patents and patent
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applications Controlled by TGC at any time during the term of this Agreement
covering any Licensed Product, including but not limited to Improvements and New
Products provided that patents and patent applications covering an Improvement
or New Product shall be included hereunder only if such Improvement or New
Product has been recommended by the Steering Committee and approved by the
Parties for development pursuant to Section 2.4 of the LCA, but excluding any
and all U.S. patents and patent applications licensed to TGC under the Third
Party Agreements; (ii) any divisional, continuation, continuation-in-part or
substitute application which claims priority from any of the foregoing patent
applications; (iii) any and all U.S. patents which may issue on any of the
patent applications within (i) or (ii) above; (iv) any extensions, re-
examinations, or reissues of U.S. patents within (i) or (iii) above; (v) any and
all foreign patent applications and patents corresponding to any of the patent
applications or patents within (i), (ii), (iii) or (iv) above, including without
limitation the patents and patent applications listed on Schedule 1.38B; and
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(vi) any and all patents and patent applications licensed to TGC under the Third
Party Agreements as of the Effective Date or thereafter.
1.39 "PHASE I CLINICAL TRIAL" shall have the meaning set forth in Section 1
of Exhibit A to the LCA.
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1.40 "PHASE II CLINICAL TRIAL" shall have the meaning set forth in Section
1 of Exhibit A to the LCA.
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1.41 "PHASE III CLINICAL TRIAL" shall have the meaning set forth in Section
1 of Exhibit A to the LCA.
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1.42 "PROJECT YEAR" means the applicable twelve (12) month period beginning
on the first day of the calendar quarter in which this Agreement is executed, or
on any anniversary thereof.
1.43 "REASONABLE COMMERCIAL EFFORTS" shall be determined under the law of
the State of New York, United States of America, and shall mean such efforts as
are consistent with good faith efforts made by businesses of similar size and
resources in a similar circumstance and context to achieve a particular result
in a timely manner, but shall not require a Party to take actions that would be
commercially unreasonable to such Party in the circumstances.
1.44 "REGION" means each of the geographical regions set forth in column
(b) of Schedule 1.7 attached hereto.
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1.45 "REGULATORY APPROVAL" means, with respect to a nation or multinational
jurisdiction, (i) any approvals, licenses, registrations or authorizations
necessary for the manufacture (where relevant), marketing and sale of Licensed
Products in the Field in such
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nation or jurisdiction, and (ii) where relevant, pricing approvals necessary to
obtain reimbursement from a Government Authority.
1.46 "RESPONSIBLE EXECUTIVE" means the Chief Executive Officer of a Party,
or his or her duly appointed representative.
1.47 "SPECIFICATIONS" shall mean the specifications set forth in Schedule
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1.47 attached hereto, as amended or otherwise revised from time to time by
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mutual agreement of the Parties.
1.48 "STEERING COMMITTEE" shall have the meaning set forth in Section 3.1
of the LCA.
1.49 "SUBLICENSEE" means an authorized or permitted sublicensee of a Party.
1.50 "THIRD PARTY" means any individual or entity other than TGC or Medeva
or their respective Affiliates.
1.51 "THIRD PARTY AGREEMENT(S)" means the four (4) license agreements
entered into by TGC under which TGC acquired certain rights relating to cystic
fibrosis gene therapy, as more fully identified in Recital 1 of this Agreement.
1.52 "TRANSACTION DOCUMENTS" means this Agreement, the LCA, the Supply
Agreement, the Credit Agreement and the Stock Purchase Agreement.
1.53 "TRANSFER PRICE" shall have the meaning set forth in Section 2.2.1 of
the Supply Agreement.
1.54 "U.S." or "UNITED STATES" means the United States of America and its
territories and possessions.
ARTICLE 2
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CORPORATE STRUCTURE
AND CONTRACTUAL RELATIONSHIP
2.1 GENERAL. The parties will use their Reasonable Commercial Efforts to
consummate the restructuring set forth in this Article 2 promptly after the date
hereof. The agreements of TGC in this Article 2 are subject to the condition
precedent that TGC shall be reasonably satisfied that performance of these
agreements will not (i) result in breach of any material agreement to which TGC
is a party, (ii) violate any Applicable Law, (iii) result in the imposition of a
lien (except in favor of Medeva or its Affiliates) on or loss of any property
rights of TGC, (iv) have a material adverse effect on TGC, its business,
properties, or prospects, or (v) require TGC to pay additional royalties or
other charges to Third Parties that Medeva will not pay or reimburse to TGC. If
any action to be taken by TGC at Medeva's request in pursuit of the transactions
set forth in this Article 2 requires that TGC pay royalties or other charges to
Third Parties beyond those contemplated by the LCA and the Supply Agreement,
Medeva shall reimburse TGC any and all such royalties and other charges.
Notwithstanding the previous sentence, if Medeva determines that the cost and
expense, including without limitation any such additional royalties and other
charges, relating to any of such transactions is not justified, Medeva shall
instruct TGC not to enter into such transaction and thereby avoid such cost and
expense.
2.2 FORMATION OF NEW TGC SUBSIDIARY.
2.2.1 TGC will (i) organize an entity controlled by TGC ("TG-Sub") as
a business entity acceptable to TGC; (ii) contribute to TG-Sub (the form of such
investment to be determined by TGC) assets (and related liabilities) which are
required by TGC to manufacture Bulk Licensed Product for Phase III Clinical
Trials and commercial sale, including without
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limitation the assets described in this Article 2, but excluding any such assets
which are used by TGC in the conduct of its other business so long as TG-Sub
shall have the right to use such assets to manufacture Bulk Licensed Product;
(iii) except as otherwise may be agreed by TGC, not permit TG-Sub to own any
assets other than as contemplated by this Agreement, to have any employees, or
conduct any business other than the production of Bulk Licensed Product; and
(iv) enter into such management and other agreements with TG-Sub as shall be
necessary or useful to TGC and TG-Sub in the conduct of their respective
businesses it being understood that although TG-Sub will own the assets herein
described it will not be an operating company and that all the operations
contemplated by the Transaction Documents will be performed by TGC. The
agreements of TGC in Section 2.2.2 through 2.2.7 below are subject to provisions
contained in this Section 2.2. 1.
2.2.2 TGC will grant TG-Sub an exclusive sublicense of TGC's rights under
the Alkermes Agreement for use in the Field. The Parties believe that Alkermes'
consent will not be required for this sublicense pursuant to Section 2.2 of the
Alkermes Agreement.
2.2.3 TGC will assign all its rights under the U. Michigan/HSC Agreement
to TG-Sub pursuant to Section 13 of such agreement. The Parties acknowledge that
the consent of TGC's counterparties to such agreement will be required for such
assignment.
2.2.4 TGC will assign all its rights under the NIH/CDC L-059-93 Agreement
to TG-Sub pursuant to Section 12.07 of such agreement. The Parties believe that
the consent of TGC's counterparties to such agreements will not be required for
such assignments.
2.2.5 TGC will assign to TG-Sub, or grant TG-Sub an exclusive sublicense
under, TGC's rights under the NIH/CDC L-232-92 Agreement for use in the Field
pursuant to Section 14.07 or 3.02 of such agreement. The Parties acknowledge
that the consent of TGC's
16
counterparties to such agreement may be required in the case of an assignment
and would be required in the case of a sublicense.
2.2.6 TGC will grant TG-Sub an exclusive license for use in the Field
under all Licensed Patent Rights and Licensed Know-How following which TG-Sub
will become the assignee of TGC under Section 8.1 of this Agreement.
2.2.7 TGC will assign to TG-Sub all TGC's rights in respect of leasehold,
contractual, title and other property interests in the manufacturing facilities,
equipment and contracts used to manufacture Bulk Licensed Product for Phase III
Clinical Trials under the LCA and Supply Agreement and for commercial sale under
the Supply Agreement. If at any time, any of such facilities, equipment or
contracts are no longer required or reasonably likely to be required to
manufacture Bulk Licensed Product, all such rights with respect to such
facilities, equipment and contracts may be assigned or otherwise transferred by
TG-Sub out of TG-Sub.
2.3 PLEDGE OF STOCK OF TG-SUB. TGC will pledge all the shares of the capital
stock of TG-Sub to Medeva to secure Medeva's right to manufacture Bulk Licensed
Product pursuant to Section 3.4 of the Supply Agreement, ("Medeva's
Manufacturing Rights") and TGC's and TG-Sub's obligations to Medeva under such
section (the "Obligations"). Such shares will be held in escrow under terms
that will be adequate to perfect Medeva's first priority lien thereon.
2.4 SECURITY INTEREST. TG-Sub will grant Medeva a security interest in
substantially all its assets to secure Medeva's Manufacturing Rights and TGC's
Obligations; such assets to include a leasehold mortgage on any real property
leases and a lien upon TG-Sub's contracts, equipment leases, intangible contract
rights, and equipment and all proceeds thereof (the "Collateral"). TGC will
likewise grant Medeva a lien on all of its interest, if any, in the Collateral.
The Parties acknowledge that the consent of the counterparties to TGC's
Collateral
17
consisting of contract rights may be required to grant these liens, including
without limitation, the counterparties under the U. Michigan/HSC Agreement
pursuant to Section 13 thereof.
2.5 CELL LINES. TGC and TG-Sub will sell to Medeva all cell lines and other
bio-material extant or resulting from the Development Work under the LCA (the
"Cell Lines"). Medeva will store the Cell Lines in its facilities in the U.S.
or U.K.
2.6 SUBLICENSE. TG (and/or TG-Sub) will grant Medeva a sublicense, co-
exclusive with itself (and TG-Sub in the case of [ * ] Agreement) of TGC's
(and/or TG-Sub's) rights under the [ * ] Agreement and the [ * ]
Agreement for use in the Field (the "Sublicense"). The Parties believe that the
consent of TGC's counterparties to the [ * ] Agreement will be required.
2.7 LIMITATION. Notwithstanding anything in this Agreement to the contrary,
Medeva agrees that, except as necessary to enforce Medeva's Manufacturing Rights
or in the event of a breach by TGC of its Obligations, (i) TG-Sub will be at all
times under the sole dominion and control of TGC; (ii) TG-Sub may, at any time,
pay dividends to, make loans to, investments in and other transfers to TGC from
net profits and assets not required to perform its obligations under the
Transaction Documents; (iii) TG-Sub may incur obligations, grant liens on its
property and acquire assets in the ordinary course of business; (iv) in the
ordinary course of business, TGC and/or TG-Sub may enter into agreements with
Third Parties, including leases, licenses and agreements, which (notwithstanding
the use by TGC of its Reasonable Commercial Efforts to avoid such prohibition)
by their terms prohibit encumbrance or assignment; (v) Medeva will execute and
deliver such subordination and intercreditor agreements as TGC or TG-Sub may
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/*/ Confidential Treatment Requested.
18
reasonably request in the exercise of its rights as herein provided (including,
without limitation, agreements subordinating liens granted to Medeva to liens
granted to parties extending credit to TG-Sub); and (vi) Medeva will agree that
it will not exercise its rights in respect of the Collateral or the Sublicense
and that it will not use or grant any Third Party the right to use the Cell
Lines, except as necessary to exercise Medeva's Manufacturing Rights and to
enforce the Obligations.
2.8 FURTHER ASSURANCES. Each Party agrees to use its Reasonable Commercial
Efforts to execute, acknowledge and deliver such further instruments, and to do
all such other acts as may be necessary or appropriate to carry out the purposes
of this Article 2 including without limitation, filing financing statements,
mortgages and notices as may be necessary to perfect and give Third Parties
notice of Medeva's rights hereunder.
ARTICLE 3
CONFIDENTIALITY
3.1 CONFIDENTIALITY; EXCEPTIONS. Except as otherwise provided in the
Transaction Documents, the Parties agree that, for the term of this Agreement
and for ten (10) years thereafter, all non-public, proprietary or "confidential"
marked invention disclosures, know-how, data, and technical, financial and other
information of any nature whatsoever, including without limitation all
discussions and information exchanged between the Parties pursuant to a certain
nondisclosure agreement entered into by the Parties dated September 2, 1997
(collectively, "Confidential Information"), disclosed or submitted, either
orally or in writing (including without limitation by electronic means) or
through observation, by one Party (the "Disclosing Party") to the other Party
(the "Receiving Party") hereunder shall be received and maintained by the
Receiving Party in strict confidence, shall not be used for any purpose other
than the purposes expressly permitted by the Transaction Documents, and shall
not be disclosed to any
19
Third Party (including without limitation in connection with any publications,
presentations or other disclosures). Notwithstanding the foregoing, the
Receiving Party may, subject to the provisions of the Transaction Documents,
disclose the Disclosing Party's Confidential Information to those of its and its
Affiliates' or its Sublicensees' directors, officers, employees, agents,
consultants and clinical investigators that have a need to know such
Confidential Information to achieve the purposes of any of the Transaction
Documents and the documents contemplated by Article 2 (the "Restructuring
Documents"); provided, however, that such Party shall ensure that its and its
Affiliates' or Sublicensees' directors, officers, employees, agents, consultants
or clinical investigators to whom disclosure is to be made are bound by, and
take reasonable efforts to ensure compliance with, the confidentiality terms
hereof. Each Party will promptly notify the other upon discovery of any
unauthorized use or disclosure of the Confidential Information. Except as may
result in certain circumstances under the Restructuring Documents, Confidential
Information belongs to and shall remain the property of the Disclosing Party.
The provisions of this Article 3 shall not apply to any information which can be
shown by the Receiving Party:
3.1.1 To have been known to or in the possession of the Receiving Party
prior to the date of its actual receipt from the Disclosing Party;
3.1.2 To be or to have become readily available to the public other than
through any act or omission of the Receiving Party in breach of any of the
Transaction Documents or any other agreement between the Parties;
3.1.3 To have been disclosed to the Receiving Party, other than under an
obligation of confidentiality, by a Third Party which had no obligation to the
Disclosing Party not to disclose such information to others; or
20
3.1.4 To have been subsequently independently developed by the
Receiving Party without use of the Confidential Information as demonstrated by
competent written records.
3.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential Information
hereunder solely to the extent such disclosure is reasonably necessary in
connection with submissions to any Government Authority for the purposes of any
of the Transaction Documents or in filing or prosecuting patent applications
contemplated under the Transaction Documents, prosecuting or defending
litigation, complying with Applicable Laws or conducting Development Work for
the purposes expressly permitted by any of the Transaction Documents; provided
that in the event of any such disclosure of the Disclosing Party's Confidential
Information by the Receiving Party, the Receiving Party will, except where
impracticable, give reasonable advance notice to the Disclosing Party of such
disclosure requirement (so that the Disclosing Party may seek a protective order
and or other appropriate remedy or waive compliance with the confidentiality
provisions of this Article 3) and will use its reasonable efforts to secure
confidential treatment of such Confidential Information required to be
disclosed. Notwithstanding the above, Medeva may disclose preclinical and
clinical data and results relating to Licensed Products to qualified medical
professionals for the limited purposes of marketing such Licensed Products and
conducting medical education initiatives reasonably designed to increase Net
Sales.
3.3 RETURN OF CONFIDENTIAL INFORMATION. The Receiving Party shall keep
Confidential Information belonging to the Disclosing Party in appropriately
secure locations. Upon the expiration or termination of this Agreement, any and
all Confidential Information possessed in tangible form by a Receiving Party,
its Affiliates or Sublicensees, or its or any of their officers, directors,
employees, agents, consultants or clinical investigators and belonging to
21
the Disclosing Party, shall, upon written request, be immediately returned to
the Disclosing Party (or destroyed if so requested) and not retained by the
Receiving Party, its Affiliates or Sublicensees, or any of their officers,
directors, employees, agents, consultants or clinical investigators; provided
however that a Party may retain one (1) copy of any Confidential Information in
an appropriately secure location, which by Applicable Laws it must retain, for
so long as such Applicable Laws require such retention but thereafter shall
dispose of such retained Confidential Information in accordance with Applicable
Laws or this Section 3.3.
3.4 PUBLICATIONS AND ANNOUNCEMENTS. Except as otherwise permitted under any
of the Transaction Documents or as required by law, regulation, or court order,
each Party agrees not to publish any Confidential Information received from the
other Party. Except as required by law, regulation or court order, Medeva and
TGC each agree that without obtaining the other Party's prior written approval
for any publication or any presentation, which shall not be unreasonably
withheld, neither Party shall publish or present (i) any Confidential
Information generated by that Party and related to the development or
commercialization of Licensed Products for use in the Field, or (ii) the results
of any clinical trial studies or non-clinical studies or investigations carried
out by that Party related to the development of Licensed Products for use in the
Field. At least thirty (30) days prior to any such publication or presentation,
the Party proposing to publish or present shall provide the other Party a copy
of the proposed abstract, manuscript or presentation (including without
limitation information to be presented verbally) for review. The other Party
shall respond in writing within such time period with either approval of the
proposed material or a specific statement of (a) concern based upon the need to
seek patent protection, (b) concern regarding competitive disadvantage arising
from the proposal, or (c) concern regarding the timing and circumstances of such
disclosure in light of such Party's
22
business. In the event that the other Party has concerns about disclosure of
Confidential Information, the Party proposing to publish agrees to provide such
other Party any additional information relating to the proposed disclosure, as
reasonably requested by such other Party. In the event of concern relating to
patent protection, the Party proposing to publish agrees not to submit such
abstract or manuscript for publication or to make such presentation until the
other Party has had a reasonable period of time to seek patent protection for
any material in such publication or presentation which it believes is patentable
or to resolve any other issues, such period not to exceed sixty (60) additional
days. In the event of concern regarding competitive disadvantage or the timing
and other circumstances relevant to the disclosure, the Parties will negotiate
in good faith to attempt to arrive at a compromise to permit the disclosing
Party an opportunity to publish or present the disclosure within a reasonable
period of time. The Party proposing to publish also agrees to delete from any
such abstract or manuscript or presentation any Confidential Information of the
other Party that such other Party reasonably believes has commercial value based
upon the secrecy of such information. Once approval for a publication or
presentation has been granted, the relevant Party shall be entitled to use
information contained in such publication or presentation after the date of its
publication or presentation without seeking further approval. It is understood
that general comments made by a Party relating to the relationship between
Medeva and TGC established by the Transaction Documents, including, for example,
general comments made in response to inquiries at professional meetings and
other similar circumstances, are not intended to be restricted by the provisions
of this Article 3, provided that such information has been disclosed to the
public previously or cleared for such disclosure by the other Party. It is
understood further that Confidential Information may be disclosed by TGC to
Third Parties bound by non-disclosure agreements to the extent such
23
Confidential Information (1) relates to TGC's AAV vector technology generally
and is not specific to the Bulk Licensed Products, Licensed Products or to the
Field and (2) is disclosed in relation to matters outside the Parties'
collaboration efforts, Bulk Licensed Products, Licensed Products or the Field.
Prior to any such disclosure, TGC will provide such disclosures to Medeva for
Medeva's approval which shall not be unreasonably withheld.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each Party represents and
warrants to the other Party that:
(a) Such Party is duly organized and validly existing and in good standing
under the laws of the jurisdiction of its formation.
(b) Such Party has the full corporate power and is duly authorized to enter
into, execute and deliver the Transaction Documents, and to carry out and
otherwise perform its obligations thereunder.
(c) The Transaction Documents have been duly executed and delivered by, and
are the legal and valid obligations binding upon such Party and the entry into,
the execution and delivery of, and the carrying out and other performance of its
obligations under the Transaction Documents by such Party (i) does not conflict
with, or contravene or constitute any default under, any agreement, instrument
or understanding, oral or written, to which it is a party, including without
limitation its certificate of incorporation or by-laws, and (ii) does not
violate Applicable Law or any judgment, injunction, order or decree of any
Government Authority having jurisdiction over it.
24
4.2 REPRESENTATIONS AND WARRANTIES OF TGC. TGC represents and warrants to
Medeva that:
(a) To the best of TGC's knowledge, as of the Effective Date, TGC Controls,
or otherwise has the right to use, all Patent Rights and Know-How necessary to
manufacture Bulk Licensed Products and, further, TGC has disclosed, or from time
to time will disclose, to Medeva all Patent Rights and all Licensed Know-How of
which TGC is aware and which is useful for the production, manufacture or
commercialization of Bulk Licensed Products and Licensed Products for use in the
Field;
(b) TGC has conducted or has caused TGC's Outside Contractors, Contract
Manufacturers and consultants to conduct, and will in the future conduct, pre-
clinical research, process development and other relevant research and
development activities required to support clinical testing, Regulatory
Approvals and commercialization of the Licensed Products in the Field in
accordance with Applicable Laws, including without limitation, known or
published standards of FDA;
(c) TGC has conducted or has caused TGC's Outside Contractors, Contract
Manufacturers and consultants to conduct, and will in the future conduct,
clinical research with Licensed Products in the Field in the U.S. through
completion of Phase I Clinical Trials and Phase II Clinical Trials, to the
extent such Phase II Clinical Trials are conducted in the U.S., in accordance
with Applicable Laws, including without limitation, known or published standards
of FDA;
(d) Except as otherwise provided in the Transaction Documents, TGC will
maintain in effect all governmental permits, licenses, orders, applications and
Regulatory Approvals, if applicable, necessary to manufacture, supply and sell
Bulk Licensed Product and
25
will manufacture and supply Bulk Licensed Product in accordance with such
governmental permits, licenses, orders, applications, Regulatory Approvals and
Applicable Laws;
(e) TGC has employed and will in the future employ individuals of
appropriate education, knowledge, and experience to conduct or oversee the
conduct of preclinical research, process development and other relevant research
and development activities required to support clinical testing, Regulatory
Approvals and commercialization of the Licensed Products in the Field;
(f) TGC has employed and will in the future employ individuals of
appropriate education, knowledge, and experience to conduct or oversee the
conduct of clinical research with Licensed Products in the Field in the U.S.
through completion of Phase I Clinical Trials and Phase II Clinical Trials, to
the extent such Phase II Clinical Trials are conducted in the U.S.;
(g) Except as otherwise provided for in the Transaction Documents,
including for example in Sections 3.1 and 3.2 of the Supply Agreement, TGC
maintains and shall maintain throughout the term of this Agreement a work force
suitably qualified and trained, and facilities and equipment sufficient, to
enable TGC to perform its obligations as constituted from time to time under the
Transaction Documents;
(h) To the best of TGC's knowledge, there are not as of the Effective Date,
nor have there been over the five (5) year period immediately preceding the
Effective Date, any claims, lawsuits, arbitrations, legal or administrative or
regulatory proceedings, charges, complaints or investigations by any Government
Authority (except for any Government Authority with authority over the granting
of patents and proceedings relating thereto) or other Third Party threatened,
commenced or pending against TGC or its licensors relating to, and TGC
26
has not received any notice of infringement with respect to, the Patent Rights,
the Licensed Know-How, or Bulk Licensed Product (or Licensed Products to be
manufactured by TGC for use by TGC for clinical trial purposes), including TGC's
right to manufacture, use or sell Bulk Licensed Products (or Licensed Products
for use by TGC for clinical trial purposes).
(i) Except as previously disclosed to Medeva, to the best of TGC's
knowledge, as of the Effective Date, the exercise by Medeva of the rights and
licenses granted to Medeva by TGC under the Transaction Documents will not
infringe any rights owned by any Third Party;
(j) Except as previously disclosed to Medeva, to the best of TGC's
knowledge, as of the Effective Date, TGC is not aware of any patents or patent
applications, other than patents and patent applications within the Patent
Rights, required for the production, manufacture or commercialization of Bulk
Licensed Products and Licensed Products in the Field; and further TGC will
promptly disclose to Medeva any knowledge relating to any such patents or patent
applications acquired by TGC during the term of this Agreement and, further, the
patents and patent applications listed on Schedule 4.2 (the "Other Patent
------------
Rights") and TGC's rights under the Other Patent Rights (i) are not required for
the production, manufacture or commercialization of Bulk Licensed Product or
Licensed Products in the Field, (ii) will not be assigned, sublicensed or
otherwise encumbered by TGC with respect to, or in any way which would impair
the application of such rights by TGC or by Medeva in, the Field, and (iii) will
be added to the Licensed Patent Rights at any time as such rights are required
for the production, manufacture or commercialization of Bulk Licensed Product or
Licensed Products in the Field as Medeva may determine in Medeva's sole
discretion.
27
(k) Except as previously disclosed to Medeva, to the best of TGC's
knowledge, as of the Effective Date, TGC is not aware of any Third Parties that
Control any patents or Know-How required for the production, manufacture or
commercialization of Licensed Products in the Field; and
(l) To the best of TGC's knowledge, as of the Effective Date, TGC Controls
or otherwise is entitled to use worldwide all rights in, to and under the Patent
Rights and the Licensed Know-How, in all cases free and clear of any lien,
claim, charge, encumbrance or right of any Third Party.
4.3 REPRESENTATIONS AND WARRANTIES SPECIFIC TO THIRD PARTY AGREEMENTS. TGC
further represents and warrants to Medeva that:
(a) No other agreement or understanding, verbal or written, exists to which
TGC is legally bound regarding the intellectual property rights granted to TGC
pursuant to the Third Party Agreements;
(b) The Third Party Agreements, including respective modifications attached
thereto, as previously provided to Medeva represent the complete and entire
understanding of TGC and, to the knowledge of TGC, its respective Third Party
Agreement licensors as of the Effective Date with respect to the intellectual
property rights granted to TGC pursuant to the Third Party Agreements, and such
Third Party Agreements will not be further modified or amended by TGC
unilaterally, or by TGC together with its respective Third Party Agreement
licensors, without the prior written consent of Medeva;
(c) Except for royalty payments and other fees expressly set forth in the
Third Party Agreements, no other royalty, fee or other amount, whatsoever, is
due or, to the best of
28
TGC's knowledge as of the Effective Date, will become due to any Third Party as
a result of TGC's exercise of the licenses and rights granted to TGC under the
Third Party Agreements or Medeva's exercise of the rights granted to Medeva
pursuant to the terms of the Transaction Documents;
(d) TGC will comply with all terms of each of the Third Party Agreements;
(e) To the best of TGC's knowledge, as of the Effective Date, the exercise
by Medeva of the rights and licenses granted to Medeva by TGC under the
Transaction Documents will not violate, or cause TGC to breach TGC's obligations
under, the Third Party Agreements;
(f) To the best of TGC's knowledge, there are not now, nor have there been
over the five (5) year period immediately preceding the Effective Date, any
claims, lawsuits, arbitrations, legal or administrative or regulatory
proceedings, charges, complaints or investigations by any Government Authority
(except for any Government Authority with authority over the granting of patents
and proceedings relating thereto) or other Third Party threatened, commenced or
pending against TGC or its licensors relating to the intellectual property
rights licensed to TGC, including TGC's right to use such intellectual property
rights, whether or not Controlled by TGC, pursuant to the Third Party
Agreements;
(g) TGC will notify Medeva promptly if any Third Party Agreement licensor
of TGC elects not to file a patent application pursuant to such licensor's
rights under its respective Third Party Agreement and TGC, upon Medeva's written
request, will exercise TGC's right, if available, to participate in the filing
or prosecution of any such patent application;
(h) TGC will not terminate, amend or assign, nor by act or omission permit
the termination, amendment or assignment of, any of the Third Party Agreements
without the
29
prior written consent of Medeva, which consent may be granted or withheld in
Medeva's sole discretion;
(i) TGC will notify Medeva promptly if TGC receives any notice or
communication suggesting, threatening or stating that a Third Party Agreement
licensor of TGC intends to terminate, modify, assign or otherwise amend its
respective Third Party Agreement;
(j) TGC will provide Medeva with copies of all communications to Third
Party Agreement licensors or from Third Party Agreement licensors, including
without limitation communications regarding alleged or actual infringement by a
Third Party of intellectual property owned or otherwise controlled by a Third
Party Agreement licensor and under which TGC was granted a license and rights
under the Third Party Agreement with such licensor;
(k) With respect to the [ * ] Agreement, the treatment of cystic
fibrosis is not one of the "Optioned Field(s) of Use" (as defined in the [ * ]
Agreement);
(l) With respect to the [ * ] Agreement, TGC exclusively Controls the
Patent Rights licensed to TGC under the [ * ] Agreement;
(m) With respect to the [ * ] Agreement and the [ * ] Agreement,
TGC shall, upon request by Medeva, (i) provide Medeva with copies of any
Commercial Development Plan (as defined in such agreements) and permit Medeva to
provide comments and suggestions for consideration by TGC to any future version
of a Commercial Development Plan, (ii) appeal a Third Party Agreement licensor's
unilateral decision to terminate either or both of these Third Party Agreements,
(iii) exercise any and all administrative or judicial remedies that may be
available as a result of such termination, (iv) use its best efforts to obtain a
direct license for
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/*/ Confidential Treatment Requested.
30
Medeva with the respective licensors following any such termination, and (v) not
elect to surrender any license or rights in any country granted to TGC by a
Third Party Agreement licensor under either or both of these Third Party
Agreements, without the prior written consent of Medeva;
(n) With respect to the [ * ] Agreement, TGC exclusively Controls the
Patent Rights licensed to TGC under the [ * ] Agreement; and
(o) With respect to the [ * ] Agreement, TGC shall inform Medeva
promptly if TGC becomes aware of any Third Party that (i) receives any license
and right under the intellectual property under which TGC was granted a license
and rights pursuant to the [ * ] Agreement, or (ii) develops and produces
any product similar to a Licensed Product. Further, TGC shall exercise its
right to request prompt and detailed notification of measures taken in response
to allegations or events of infringement of the rights granted to TGC
thereunder.
4.4 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 4 OF THIS
AGREEMENT, IN SECTION 2.8 OF THE SUPPLY AGREEMENT, IN ARTICLE 6 OF THE CREDIT
AGREEMENT AND IN ARTICLE 3 OF THE STOCK PURCHASE AGREEMENT, THE PARTIES MAKE NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED,
WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF
MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF
NON-INFRINGEMENT.
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/*/ Confidential Treatment Requested.
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ARTICLE 5
TERM AND TERMINATION
5.1 TERM. This Agreement and the LCA and Supply Agreement shall commence as
of the Effective Date and shall continue in full force and effect until (i) the
expiration in the last jurisdiction of the term of the last patent within the
Patent Rights or, if sooner, (ii) the determination by a court or administrative
agency of competent jurisdiction in the last jurisdiction that the last patent
within the Patent Rights is invalid or unenforceable, or (iii) such earlier date
as this Agreement, the LCA and the Supply Agreement are terminated in accordance
with the terms and conditions of this Article 5. Upon expiration or termination
of this Agreement, or the LCA or the Supply Agreement, all three agreements
shall simultaneously so expire or terminate.
5.2 TERMINATION AT WILL.
5.2.1 During the Development Period, at any time after the one (1) year
anniversary of the Effective Date, Medeva may terminate this Agreement, the LCA
and the Supply Agreement upon at least one hundred eighty (180) days' prior
written notice to TGC, if in Medeva's sole opinion, Medeva considers that
further development of Licensed Products in the Field is not technically or
commercially viable.
5.2.2 At any time after the ten (10) year anniversary of the Effective
Date, Medeva may terminate this Agreement, the LCA and the Supply Agreement,
with or without cause, upon at least one hundred and twenty (120) days' prior
written notice to TGC.
5.3 TERMINATION FOR CAUSE. Subject to Section 5.4 below, if either Party
commits a material breach of this Agreement, the LCA or the Supply Agreement at
any time, which breach is not cured within thirty (30) days in the case of a
breach consisting of an undisputed
32
nonpayment of money, or sixty (60) days in the case of any other material
breach, after written notice from the non-breaching Party specifying the breach,
or if such breach is not susceptible of cure within such period, the breaching
Party is not making diligent good faith efforts to cure such breach, the non-
breaching Party shall have the right to terminate this Agreement, the LCA and
the Supply Agreement by written notice. The Parties acknowledge and agree that
failure to exercise any right or option or to take any action expressly within
the discretion of a Party shall not be deemed to be a material breach hereunder.
5.4 LIMITATION ON TERMINATION FOR CAUSE.
5.4.1 With respect to any alleged material breach except undisputed
payment defaults, a Party may not terminate this Agreement, or the LCA or the
Supply Agreement for such alleged material breach unless (i) a court of
competent jurisdiction renders a final adjudication affirming the existence of a
material breach, or (ii) the breach is an "Established Material Breach" (as
defined in Section 5.4.2 of this Agreement) and such Established Material Breach
is not cured within sixty (60) days following receipt of an "Arbitration
Decision" (as defined in Section 5.4.2 of this Agreement), or if such
Established Material Breach is not susceptible of cure within such period, the
breaching Party is not making diligent good faith efforts to cure such
Established Material Breach.
5.4.2 In order to establish a material breach (other than an undisputed
payment default) entitling a Party to terminate this Agreement, or the LCA or
the Supply Agreement under Section 5.3 above, the Party alleging the occurrence
of such material breach (the "Requesting Party") shall submit the issue to an
expedited, non-binding arbitration (the "Material Breach Arbitration") before a
mutually agreed upon arbitrator, or in the event the Parties cannot agree upon
an arbitrator, before a panel of three (3) American Arbitration Association-
approved
33
arbitrators consisting of one (1) arbitrator chosen by each Party and one (1)
arbitrator selected by the two Party-chosen arbitrators, (one arbitrator or
three arbitrators, the "Arbitration Panel"). The Arbitration Panel will
determine whether the other Party (the "Breaching Party") has committed the
material breach alleged by the Requesting Party, whether the Requesting Party
had committed a prior material breach that justified the subsequent breach by
the Breaching Party, and if the material breach alleged by the Requesting Party
has been committed, whether any other evidence exists which may excuse the
Breaching Party's material breach. An "Established Material Breach" shall mean a
determination (the "Arbitration Decision") by the Arbitration Panel that the
Breaching Party committed the alleged material breach, that the Requesting Party
did not commit a material breach sufficient to excuse the subsequent material
breach by the Breaching Party, and that no other sufficient reason exists to
excuse the breach by the Breaching Party (such sufficiency to be determined by
the Arbitration Panel in its sole discretion). The Arbitration Decision shall
identify any ways by which the Established Material Breach may be cured. For
purposes of determining an Established Material Breach as contemplated by this
Section 5.4.2, the Arbitration Decision shall be deemed final. The rules of the
American Arbitration Association shall govern any Material Breach Arbitration.
5.4.3 Notwithstanding the procedure set forth under Section 5.4.2 above
and any resulting outcome, the Parties acknowledge and agree that an Arbitration
Decision does not constitute a binding decision on either Party with respect to
the existence (or non-existence) of a breach of this Agreement or the LCA or the
Supply Agreement, nor justify the subsequent termination of this Agreement, or
the LCA or the Supply Agreement (or exercise of some other remedy). Either
Party may contest the other Party's actions following an Arbitration Decision by
commencing a court action pursuant to Section 7.3 of this Agreement. The
Parties further
34
acknowledge and agree that the Arbitration Decision, the findings by the
Arbitration Panel and any testimony from the Arbitration Panel (or testimony
from any person or entity appearing before the Arbitration Panel to the extent
that such testimony relates specifically to the Arbitration Decision) shall not
be admissible for any reason whatsoever in any court proceedings of any nature
whatsoever, including without limitation proceedings related to equitable
remedies or damages; provided further that Parties agree to instruct a fact
finder, judge or jury in connection with proceedings to resolve disputes
hereunder not to give any weight to the fact that an Arbitration Decision was or
was not rendered.
5.5 TERMINATION FOR INSOLVENCY. Either Party may terminate this Agreement or
the LCA or the Supply Agreement upon written notice to the other Party on or
after the occurrence of any of the following events: (i) the appointment of a
trustee, receiver or custodian for all or substantially all of the property of
the other Party, or for any lesser portion of such property, if the result
materially and adversely affects the ability of the other Party to fulfill its
obligations hereunder or thereunder, which appointment is not dismissed within
sixty (60) days, (ii) the determination by a court or tribunal of competent
jurisdiction that the other Party is insolvent, (iii) the filing of a petition
for relief in bankruptcy by the other Party on its own behalf, or the filing of
any such petition against the other Party if the proceeding is not dismissed or
withdrawn within sixty (60) days thereafter, (iv) an assignment by the other
Party for the benefit of creditors, or (v) the dissolution or liquidation of the
other Party. All rights and licenses granted under or pursuant to this
Agreement or the LCA or the Restructuring Agreements by TGC to Medeva are, and
shall otherwise be deemed to be, for the purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101(35A) of the Bankruptcy Code. The Parties agree that Medeva, as a
licensee of such rights and
35
licenses, shall retain and may fully exercise all of its rights and elections
under the Bankruptcy Code.
5.6 RIGHTS ON TERMINATION.
5.6.1 In the event that TGC terminates this Agreement, or the LCA or the
Supply Agreement pursuant to Section 5.3 above, all rights granted to Medeva
hereunder and thereunder shall revert to TGC.
5.6.2 In the event that Medeva terminates this Agreement, or the LCA or
the Supply Agreement pursuant to Section 5.3 or 5.5 above, TGC shall be deemed
to have granted to Medeva an exclusive worldwide license under the Licensed
Patent Rights and the Licensed Know-How, and to the extent Controlled by TGC,
intellectual property held by TGC under the Third Party Agreements, as of the
date of such termination to make, have made, use, have used, sell, offer for
sale, have sold, lease, market and import Licensed Products for use in the Field
subject to payment by Medeva to TGC of a royalty of [ * ] of Net Sales after the
effective date of termination of this Agreement until the date this Agreement
otherwise would have expired pursuant to Section 5.1(i) or (ii) above. Medeva
shall have the right to offset Medeva's reasonable damages in connection with
such breach, as determined by an independent third party auditor, against any
royalty payments made to TGC pursuant to the foregoing [ * ] royalty. TGC shall
reasonably assist Medeva in the transfer of the manufacturing of the Bulk
Licensed Products, including the transfer of useful biomaterials (e.g., cell
-----
lines) and shall provide Medeva with copies of all written or other
tangible forms of recorded Licensed Know-How relating to the manufacturing
processes for Bulk Licensed Products and Licensed Products. Upon expiration of
- -------------------------------------
/*/ Confidential Treatment Requested.
36
Medeva's obligation to pay to TGC royalties under this Section 5.6.2, Medeva
shall have a paid-up, irrevocable, worldwide, nonexclusive right and license
under the Licensed Know-How granted by TGC to Medeva hereinabove to make, have
made, use and sell Licensed Products for use in the Field.
5.6.3 In the event that Medeva terminates this Agreement, or the LCA or
the Supply Agreement pursuant to Section 5.2 above, or TGC terminates this
Agreement, or the LCA or the Supply Agreement pursuant to Section 5.3 above,
then, in addition to any liability or obligation accrued as of the effective
date of termination, Medeva shall reimburse TGC for TGC's actual costs
associated with terminating any agreed pre-clinical and clinical studies already
in progress pursuant to the Development Plan.
5.6.4 Except as otherwise provided in this Section 5.6.4, in the event
this Agreement, or the LCA or the Supply Agreement are terminated for any
reason, (i) except as otherwise expressly provided in the Transaction Documents,
all rights and obligations of the Parties under this Agreement, the LCA and the
Supply Agreement shall terminate; (ii) Medeva shall surrender to TGC, or, at
TGC's sole option, Medeva shall destroy and provide TGC with a certificate
signed by a Responsible Executive of Medeva attesting to the destruction of, all
copies of any Licensed Know-How or other Confidential Information provided by
TGC hereunder; (iii) TGC shall surrender to Medeva, or, at Medeva's sole option,
TGC shall destroy and provide Medeva with a certificate signed by a Responsible
Executive of TGC attesting to the destruction of, all copies of any Confidential
Information provided by Medeva hereunder; (iv) in addition to any liability or
obligation accrued as of the effective date of termination, Medeva shall pay for
any Bulk Licensed Product delivered at any time before or after such termination
pursuant to any Purchase Order accepted by TGC prior to such termination and
shall have the right to use such
37
Bulk Licensed Product to manufacture Licensed Product in the Field and to sell
or otherwise dispose of stock of any Licensed Product in the Field then on hand,
subject to the payment to TGC of applicable payments hereunder; and (v) except
to the extent permitted in clause (iv) above Medeva agrees not to make, have
made, use, sell, offer for sale and import the Licensed Products for use in the
Field.
5.7 ACCRUED RIGHTS. Termination, relinquishment or expiration of this
Agreement, the LCA and the Supply Agreement for any reason shall be without
prejudice to any right which shall have accrued to the benefit of either Party
prior to such termination, relinquishment or expiration, including damages
arising from any breach under the Transaction Documents. Such termination,
relinquishment or expiration shall not relieve either Party from obligations
which are expressly indicated to survive termination or expiration of the
respective Transaction Documents.
5.8 SURVIVAL.
5.8.1 The following Articles and Sections of this Agreement, the LCA and
the Supply Agreement shall survive expiration of such agreements: Articles 3, 6,
7 and 8, and Sections 4.5, 5.7 and 5.8.1 of this Agreement, Sections 6.1, 6.2,
6.4 and 6.6, and the last sentence of Section 2.1, of the LCA, and Article 5 of
the Supply Agreement.
5.8.2 The following Articles and Sections of this Agreement, the LCA and
the Supply Agreement shall survive termination of such agreements and, in each
case, shall apply in accordance with the terms and conditions set forth in such
Articles and Sections: Articles 3, 6, 7 and 8, and Sections 4.5, 5.6, 5.7 and
5.8.2 of this Agreement, Sections 3.7.4, 6.1, 6.2, 6.4, 6.5, 6.6 and 6.7 of the
LCA, and Article 5 and Sections 6.3, 6.4, 7.1 and 7.2 of the Supply Agreement.
38
ARTICLE 6
INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY
6.1 INDEMNIFICATION BY MEDEVA. Except for any actions or liabilities arising
out of infringement of Third Party patent rights pursuant to Section 6.8 of the
LCA, Medeva hereby agrees to save, defend, and hold TGC, its Affiliates and
their officers, directors, employees and agents harmless from and against any
and all losses, damages, liabilities, costs and expenses, including reasonable
attorneys' fees and expenses that arise in connection therewith, ("Losses")
resulting from or arising out of: (i) the storage of Bulk Licensed Products, or
the conversion of Bulk Licensed Product to Licensed Products, after the date of
delivery of such Bulk Licensed Products to Medeva; or (ii) the labeling,
marketing and distribution of Licensed Products (subsections (i) and (ii), all
except to the extent caused by the negligence or willful misconduct of, or
failure to comply with Applicable Laws or breach of this Agreement, or the LCA
or the Supply Agreement by, TGC or its Affiliates, Sublicensees, Outside
Contractors, Contract Manufacturers, and its or their directors, officers,
agents, employees, consultants or clinical investigators, and except to the
extent such Losses result from or arise out of any act or omission for which TGC
is found to have an indemnification obligation pursuant to Section 6.2 of this
Agreement); or (iii) the negligence or willful misconduct of Medeva or its
Affiliates, Sublicensees, and its or their directors, officers, agents,
employees, or consultants or clinical investigators; or (iv) the material breach
by Medeva or its Affiliates of any provision of any of the Transaction
Documents. Notwithstanding the above, in the event that Losses arise in
connection with an inherent defect in a Licensed Product which is not the direct
and proximate
39
cause of either Party, Medeva shall bear [ * ] of such Losses, and TGC shall
bear [ * ] of such Losses.
6.2 INDEMNIFICATION BY TGC. TGC hereby agrees to save, defend and hold
Medeva, its Affiliates and their officers, directors, employees and agents
harmless from and against any and all Losses resulting from or arising out of
(i) clinical trials of Licensed Product in the Field conducted by TGC pursuant
to the Development Plan, except to the extent such Losses result from or arise
out of any act or omission for which Medeva is found to have an indemnification
obligation pursuant to Section 6.1, or (ii) the manufacture, use, or consumption
of Bulk Licensed Products (or TGC's manufacture and use of Licensed Products),
or the storage of Bulk Licensed Products prior to the date of delivery thereof
to Medeva (including without limitation for any breach of the warranty in
Section 2.8 of the Supply Agreement), all except to the extent caused by the
negligence or willful misconduct of, or failure to comply with Applicable Laws
or breach of terms of this Agreement, the LCA or the Supply Agreement by, Medeva
or its Affiliates or Sublicensees, and its or their directors, officers, agents,
employees, consultants or clinical investigators, or (iii) the negligence or
intentional misconduct of TGC, or its Affiliates, Sublicensees, Outside
Contractors and Contract Manufacturers, and its or their directors, officers,
agents, employees, consultants or clinical investigators, or (iv) TGC's material
breach of any provision of any of the Transaction Documents. Notwithstanding
the above, in the event that Losses arise in connection with an inherent defect
in a Licensed Product which is not the direct and proximate cause of either
Party, Medeva shall bear [ * ] of such Losses, and TGC shall bear [ * ] of such
Losses.
- ------------------------------------
/*/ Confidential Treatment Requested.
40
6.3 INDEMNIFICATION PROCEDURE.
6.3.1 Each indemnified Party (the "Indemnitee") agrees to give the
indemnifying Party (the "Indemnitor") prompt written notice of any Losses or
discovery of fact upon which the Indemnitee intends to base a request for
indemnification. Notwithstanding the foregoing, the failure to give timely
notice to the Indemnitor shall not release the Indemnitor from any liability to
the Indemnitee to the extent the Indemnitor is not prejudiced thereby.
6.3.2 The Indemnitee shall furnish promptly to the Indemnitor
copies of all papers and official documents in the Indemnitee's possession or
control which relate to any Losses; provided, however, that if the Indemnitee
defends or participates in the defense of any Losses, then the Indemnitor shall
also provide such papers and documents to the Indemnitee. The Indemnitee shall
cooperate with the Indemnitor in providing witnesses and records necessary in
the defense against any Losses.
6.3.3 The Indemnitor shall have the right, by prompt notice to the
Indemnitee, to assume direction and control of the defense of any Third Party
claim forming the basis of such Losses, with counsel reasonably satisfactory to
the Indemnitee and at the sole cost of the Indemnitor, so long as (i) the
Indemnitor shall promptly notify the Indemnitee in writing (but in no event more
than sixty (60) days after the Indemnitor's receipt of notice of the claim) that
the Indemnitor intends to indemnify the Indemnitee from and against any Losses
the Indemnitee may suffer arising out of the claim absent the development of
facts that give the Indemnitor the right to claim indemnification from the
Indemnitee and (ii) the Indemnitor diligently pursues the defense of the claim.
6.3.4 If the Indemnitor assumes the defense of the claim as
provided in Section 6.3.3 above or Section 6.3.5 below the Indemnitee may
participate in such defense with
41
the Indemnitee's own counsel who shall be retained, at the Indemnitee's sole
cost and expense; provided, however, that neither the Indemnitee nor the
Indemnitor shall consent to the entry of any judgment or enter into any
settlement with respect to the claim without the prior written consent of the
other Party, which consent shall not be unreasonably withheld or delayed. If
the Indemnitee withholds consent in respect of a judgment or settlement
involving only the payment of money by the Indemnitor and which would not
involve any stipulation or admission of liability or result in the Indemnitee
becoming subject to injunctive relief or other relief, the Indemnitor shall have
the right, upon notice to the Indemnitee within five (5) days of receipt of the
Indemnitee's written denial of consent, to pay to the Indemnitee, or to a trust
for its or the Third Party's benefit, as shall be established at trial or by
settlement, the full amount of the Indemnitor's obligation under Section 6.1 or
Section 6.2, as applicable, with respect to such proposed judgment or
settlement, including all interest, costs or other charges relating thereto,
together with all attorneys' fees and expenses incurred to such date for which
the Indemnitor is obligated under this Agreement, if any, at which time the
Indemnitor's rights and obligations with respect to the claim shall cease.
6.3.5 If the Indemnitor does not so assume the defense of such
claim, the Indemnitee may conduct such defense with counsel of the Indemnitee's
choice but may not settle such case without the written consent of the
Indemnitor, such consent not to be unreasonably withheld or delayed. In
addition, the Indemnitor shall have the right to assume control of the defense,
at its own expense, at any time upon five (5) days' prior notice to the
Indemnitee.
6.3.6 Except as provided in Section 6.3.5 above, the Indemnitor
shall not be liable for any settlement or other disposition of a Loss by the
Indemnitee which is reached without the written consent of the Indemnitor.
42
6.3.7 Except as otherwise provided in this Section 6.3, the
portion of costs and expenses, including reasonable fees and expenses of
counsel, incurred by any Indemnitee under Section 6.3.5 in connection with any
claim corresponding to the Indemnitor's obligation under Section 6.1 or Section
6.2, as applicable, shall be reimbursed on a calendar quarter basis by the
Indemnitor, for so long as the Indemnitee controls the defense of the claim,
without prejudice to the Indemnitor's right to contest the Indemnitee's right to
indemnification and subject to refund in the event the Indemnitor is ultimately
held not to be obligated to indemnify the Indemnitee.
6.4 INSURANCE.
6.4.1 For so long as Medeva is conducting clinical trials using
Licensed Products in the Field or manufacturing, marketing and promoting
Licensed Products for use in the Field, Medeva shall obtain product liability
insurance for the benefit of Medeva, naming TGC as an additional party insured,
covering such Licensed Products under terms which are similar to that obtained
by Medeva for Medeva's other marketed products or products under clinical
trials.
6.4.2 For so long as TGC is conducting clinical trials using
Licensed Products in the Field or manufacturing and supplying Bulk Licensed
Products for use by Medeva in the manufacturing, marketing and promotion of
Licensed Products the Field, TGC shall obtain product liability insurance for
the benefit of TGC, naming Medeva as an additional party insured, covering such
Bulk Licensed Products and Licensed Products obtained therefrom under terms
which are similar to that obtained by other companies comparable to TGC for
products similar to Bulk Licensed Products and Licensed Products used in similar
circumstances under similar conditions.
6.5 LIMITATION OF LIABILITY; REMEDIES CUMULATIVE.
43
6.5.1 EXCEPT FOR EACH PARTY'S INDEMNIFICATION OBLIGATIONS
HEREUNDER AND ANY CLAIMS RELATED TO ONE PARTY'S INFRINGEMENT OF THE OTHER
PARTY'S INTELLECTUAL PROPERTY OR BREACH BY A PARTY OF ITS CONFIDENTIALITY
OBLIGATIONS HEREUNDER, UNDER NO CIRCUMSTANCES SHALL A PARTY HEREOF BE LIABLE TO
THE OTHER PARTY HEREOF FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL
DAMAGES.
6.5.2 THE REMEDIES PROVIDED IN THE TRANSACTION DOCUMENTS ARE
CUMULATIVE AND NOT EXCLUSIVE OR IN LIMITATION OF ANY OTHER REMEDY AVAILABLE
UNDER THE TRANSACTION DOCUMENTS OR AT LAW OR IN EQUITY. ACCORDINGLY, UNLESS
OTHERWISE EXPRESSLY PROVIDED IN THE TRANSACTION DOCUMENTS, A REMEDY PROVIDED IN
THE TRANSACTION DOCUMENTS AS AVAILABLE EITHER TO TGC OR MEDEVA IS NOT INTENDED
AS AN EXCLUSIVE REMEDY.
ARTICLE 7
GOVERNING LAW; DISPUTE RESOLUTION
7.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York.
7.2 DISPUTE RESOLUTION. In the event of any dispute arising out of or
related to this Agreement, or the LCA or the Supply Agreement or any breach of
any of such agreements, the Parties shall refer such dispute to the Responsible
Executive of Medeva and the Responsible Executive of TGC for attempted
resolution by good faith negotiations within thirty (30) days after such
referral is made, In the event such officers are unable to resolve such dispute
within such thirty (30) day period, either Party may assert its rights in a
manner consistent with the
44
provisions of Section 5.3 above and Section 7.3 below, but subject to the
procedure set forth in Section 5.4 above if applicable.
7.3 COURTS OF LAW. The state and federal courts situated in the County of
New York, State of New York, United States of America, shall have sole
jurisdiction and venue to resolve all disputes arising hereunder between the
Parties and initiated by TGC. The state and federal courts situated in King
County, State of Washington, United States of America, shall have sole
jurisdiction and venue to resolve all disputes arising hereunder between the
Parties and initiated by Medeva. The Parties irrevocably submit to such
jurisdiction and venue, waive any claim to an inconvenient forum posed by such
venue, and agree that process may be served in any manner permitted by such
court before which a dispute is pending.
ARTICLE 8
MISCELLANEOUS
8.1 ASSIGNMENT.
8.1.1 Neither Party may assign or otherwise transfer its rights or
obligations under this Agreement, or the LCA or the Supply Agreement without the
prior written consent of the other Party, such consent not to be unreasonably
withheld, except that a Party may assign or otherwise transfer its rights or
obligations in whole or in part without such consent (i) to an Affiliate of such
Party, including without limitation, with respect to Medeva, Medeva PLC,
provided that no such assignment shall relieve any Party as the primary obligor
hereunder, or (ii) to a Third Party in connection with the merger,
consolidation, or sale of substantially all of the assets of the assigning
Party, or reorganization affecting substantially all of the assets or voting
control of the assigning Party.
45
8.1.2 This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the Parties. Any assignment
not in accordance with this Agreement shall be void.
8.2 FORCE MAJEURE. With respect to this Agreement, the LCA and the Supply
Agreement, neither Party shall lose any rights hereunder or be liable to the
other Party for damages or losses on account of failure of performance by the
defaulting Party if the failure is occasioned by government action, war, fire,
explosion, flood, strike, lockout, embargo, act of God, or any other similar
cause beyond the control of the defaulting Party, provided that the Party
claiming force majeure shall promptly notify the other Party in writing setting
forth the nature of such force majeure, shall use its best efforts to eliminate,
remedy or overcome such force majeure and shall resume performance of its
obligations hereunder as soon as reasonably practicable after such force majeure
ceases. Notwithstanding the above, a force majeure event shall not affect
Medeva's obligations in any manner with respect to timely payment of money due
TGC pursuant to the terms of this Agreement, or the LCA or the Supply Agreement.
Except as provided in the previous sentence, if any force majeure continues for
more than one hundred eighty (180) days, the other Party may terminate this
Agreement in part, on a country-by-country basis, or in whole, if all countries
are affected, upon written notice to the affected Party.
8.3 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of the
Transaction Documents.
8.4 GOVERNMENTAL APPROVALS; COMPLIANCE WITH LAW. The Parties shall make
all filings with Government Authorities as shall be required by Applicable Laws
in connection with the Transaction Documents and the activities contemplated
hereunder or thereunder. In fulfilling
46
its obligations under the Transaction Documents each Party agrees to comply in
all material respects with all Applicable Laws.
8.5 PUBLIC ANNOUNCEMENT. Except for such disclosure as is deemed
necessary, in the reasonable judgment of a Party, to comply with Applicable
Laws, no announcement, news release, public statement, publication or
presentation relating to the existence of the Transaction Documents, or the
terms hereof or thereof, will be made without the other Party's prior written
approval, which approval shall not be unreasonably withheld. The Parties agree
that they will coordinate the initial announcement or press release relating to
the existence of the Transaction Documents so that such initial announcement or
press release is made contemporaneously by each Party. Notwithstanding the
foregoing, each Party consents to references to it in reports or documents or
other disclosures sent to stockholders or filed with or submitted to any
Governmental Authority or stock exchange or as may be required by law to be
made. However, the Party making such references shall afford the other Party
the prior opportunity to review the text of any such report, document or other
disclosure, and shall use its best efforts to comply with any reasonable
requests regarding changes to such reports, documents and other disclosures
which are provided to it by the other Party in a timely manner. The Parties
each agree that once approval for disclosure of information subject to this
Section 8.5 has been obtained, the Party that requested such approval shall be
entitled to use such information without an obligation to seek further approval.
8.6 NOTICES. All notices required or permitted to be given under this
Agreement, the LCA or the Supply Agreement, including without limitation all
invoices provided by TGC to Medeva, shall be in writing and shall be deemed
given if delivered personally or by facsimile transmission receipt verified,
mailed by registered or certified mail return receipt requested,
47
postage prepaid, or sent by express courier service, to the Parties at the
following addresses, or at such other address for a Party as shall be specified
by like notice, provided that notices of a change of address shall be effective
only upon receipt thereof.
IF TO TGC, TARGETED GENETICS CORPORATION
ADDRESSED TO: 1100 Olive Way, Suite 100
Seattle, Washington 98101
United States of America
Attention: H. Stewart Parker
President and Chief Executive Officer
Telephone: (206) 623-7612
Facsimile: (206) 223-0288
Except for invoices,
with a copy to: Morrison & Foerster llp
425 Market Street
San Francisco, California 94105-2482
United States of America
Attention: Charles F. Hoyng, Esq.
Telephone: (415) 268-7000
Facsimile: (415) 268-7522
IF TO MEDEVA MEDEVA PHARMACEUTICALS, INC.
ADDRESSED TO: C/O MEDEVA PLC
10 St. James's Street
London SW1A 1EF
England
Attention: Corporate Secretary
Telephone: (44) 171-839-3838
Facsimile: (44) 171-930-1516
With a copy to: Medeva Pharmaceuticals, Inc.
755 Jefferson Road
Rochester, New York 14632
United States of America
Attention: General Counsel
Telephone: (716) 274-5370
Facsimile: (716) 482-1495
The date of receipt of any notice given under this Agreement, or the LCA or the
Supply Agreement, including without limitation any invoice provided by TGC to
Medeva, shall be deemed to be the date given if delivered personally or by
facsimile transmission receipt verified,
48
seven (7) days after the date mailed if mailed by registered or certified mail
return receipt requested, postage prepaid, and two (2) days after the date sent
if sent by express courier service.
8.7 WAIVER. No failure of either Party to exercise and no delay in
exercising any right, power or remedy in connection with this Agreement, or the
LCA or the Supply Agreement (each a "Right") will operate as a waiver thereof,
nor will any single or partial exercise of any Right preclude any other or
further exercise of such Right or the exercise of any other Right.
8.8 DISCLAIMER OF AGENCY. The relationship between TGC and Medeva
established by this Agreement, the LCA and the Supply Agreement is that of
independent contractors, and nothing contained in any such agreement shall be
construed to (i) give either Party the power to direct or control the day-to-day
activities of the other, (ii) constitute the Parties as the legal representative
or agent of the other Party or as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking, or (iii) allow
either Party to create or assume any liability or obligation of any kind,
express or implied, against or in the name of or on behalf of the other Party
for any purpose whatsoever, except as expressly set forth in this Agreement, the
LCA and the Supply Agreement.
8.9 SEVERABILITY. If any term, covenant or condition of this Agreement,
or the LCA or the Supply Agreement or the application thereof to any Party or
circumstance shall, to any extent, be held to be invalid or unenforceable by a
court or administrative agency of competent jurisdiction, then (i) the remainder
of such documents, or the application of such term, covenant or condition to
Parties or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term, covenant or
condition of such documents shall be valid and be enforced to the fullest extent
permitted by law; and (ii) the Parties hereto covenant and agree to renegotiate
any such term, covenant or application thereof
49
in good faith in order to provide a reasonably acceptable alternative to the
term, covenant or condition of such documents or the application thereof that is
invalid or unenforceable, it being the intent of the Parties that the basic
purposes of this Agreement are to be effectuated.
8.10 ENTIRE AGREEMENT. The Transaction Documents, including all schedules
and exhibits attached thereto, which are hereby incorporated therein by
reference, set forth all covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto and
supersedes and terminates all prior agreements and understandings between the
Parties. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties other than as set forth herein or therein. No subsequent
alteration, amendment, change or addition to the Transaction Documents shall be
binding upon the Parties hereto unless reduced to writing and signed by the
respective authorized officers of the Parties.
8.11 COUNTERPARTS. The Transaction Documents may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
50
IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.
TARGETED GENETICS CORPORATION MEDEVA PHARMACEUTICALS, INC.
("TGC") ("MEDEVA")
By: /s/ H. Stewart Parker By: /s/ William Bogie
---------------------- ------------------
Name: H. Stewart Parker Name: William Bogie
----------------- --------------
Title: President, Chief Executive Officer Title: President
----------------------------------- ---------
Medeva PLC hereby agrees that, for all purposes of this Agreement, the LCA
and the Supply Agreement, it shall be a surety for Medeva Pharmaceuticals, Inc.
In any action to enforce Medeva PLC's agreement under this paragraph, Medeva PLC
hereby expressly waives any and all defenses of any nature whatsoever which may
be available to Medeva PLC as guarantor which are not also available to Medeva
as primary obligor.
MEDEVA PLC
("MEDEVA PLC")
By: /s/ G. Watts
------------
Name: G. Watts
----------
Title: Finance Director
------------------
51
SCHEDULE 1.7
COUNTRIES AND REGIONS
---------------------
- --------------------------------------------------------------------------------
(a) (b)
Country Region
- --------------------------------------------------------------------------------
[ * ] [ * ]
- --------------------------------------------------------------------------------
- --------------------------
/*/ Confidential Treatment Requested.
SCHEDULE 1.38A
U.S. PATENT RIGHTS
------------------
Patent No. Patent App. No. Issue Date Filing Date Title
- ---------- --------------- ---------- ----------- -----
- ------------------------------------------------------------------------------------------------
US 08/564,167 6/12/95 "Packaging Cell Lines for
Generation of High Titers
of Recombinant AAV Vectors"
- ------------------------------------------------------------------------------------------------
[ * ]
- ------------------------
/*/ Confidential Treatment Requested.
SCHEDULE 1.38B
NON-U.S. PATENT RIGHTS
----------------------
Patent No. Patent App. No. Issue Date Filing Date Title
- ---------- --------------- ---------- ----------- -----
- -------------------------------------------------------------------------------------------
Aust 45963/96 6/12/95 "Packaging Cell Lines for
Generation of High Titers
of Recombinant AAV Vectors"
Can 2,207,927 6/12/95
Eur 95944069.4 6/12/95
Jap 8-517764 6/12/95
- -------------------------------------------------------------------------------------------
[ * ]
- --------------------------
/*/ Confidential Treatment Requested.
SCHEDULE 1.47
SPECIFICATIONS FOR BULK LICENSED PRODUCT
----------------------------------------
See Attached
[ * ]
- --------------------
/*/ Confidential Treatment Requested.
SCHEDULE 4.2
OTHER PATENT RIGHTS
-------------------
Patent No. Patent App. No. Issue Date Filing Date Title
- ---------- --------------- ---------- ----------- -----
- ---------------------------------------------------------------------------------------------
US 5,658,776 19/8/97 "Generation of High Titers of
Recombinant AAV Vectors"
Aust 688428 2/7/98
Can 2,176,117 3/11/94
Eur 95902421.7 3/11/94
Jap 07-513877 3/11/94
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
US 08/362,608 9/1/95 "Stable Cell Lines Capable
of Expressing the
Adeno-Associated Virus
Replication Gene"
Aust 678867 2/10/97
Can 2,176,215 3/11/94
Eur 95900505.9 3/11/94
Jap 07-513874 3/11/94
- ---------------------------------------------------------------------------------------------