_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
Exhibit 10.43
RESEARCH COLLABORATION AND LICENSE AGREEMENT
between
MERCK & CO., INC.
and
ARRIS PHARMACEUTICAL CORPORATION
TABLE OF CONTENTS
Article I--Definitions.............................................. 1
Article II--Research Program........................................ 8
Section 2.1--General........................................... 8
Section 2.2--Conduct of Research............................... 8
Section 2.3--Use of Research Funding........................... 8
Section 2.4--Exchange of Information........................... 8
Section 2.5--Joint Research Committee.......................... 8
Section 2.6--Records and Reports............................... 8
Subsection 2.6.1--Records................................. 8
Subsection 2.6.2--Copies and Inspection of Records........ 9
Subsection 2.6.3--Quarterly Reports....................... 9
Section 2.7--Research Program Information and Inventions....... 9
Section 2.8--Research Program Term............................. 9
Section 2.9--ARRIS Delta Technology............................ 10
Section 2.10--Rights to Compounds.............................. 10
Article III--License; Development and Commercialization............. 11
Section 3.1--Research License Grants........................... 11
Section 3.2--Commercialization License......................... 12
Section 3.3--Development and Commercialization................. 12
Section 3.4--Exclusivity in the Field.......................... 12
Article IV--Confidentiality and Publication......................... 12
Section 4.1--Nondisclosure Obligations......................... 12
Section 4.2--Restriction on ARRIS Delta Technology............. 12
Section 4.3--Exceptions........................................ 12
Section 4.4--Permitted Disclosure of Proprietary Information... 13
Section 4.5--Publication....................................... 13
Section 4.6--Press Releases.................................... 14
Article V--Payments; Royalties and Reports.......................... 14
Section 5.1--Commitment Fee.................................... 14
i
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
Section 5.2--Research Program Funding.......................... 14
Section 5.3--Milestone Payments................................ 15
Section 5.4--Royalties......................................... 16
Subsection 5.4.1--Royalties Payable By MERCK.............. 16
Subsection 5.4.2--Managed Pharmaceutical Contracts........ 18
Subsection 5.4.3--Change in Sales Practices............... 18
Subsection 5.4.4--Bulk Compound .......................... 18
Subsection 5.4.5--Compulsory Licenses..................... 18
Subsection 5.4.6--Third Party Licenses.................... 18
Section 5.5--Reports; Payment of Royalties..................... 18
Section 5.6--Audits............................................ 19
Section 5.7--Payment Exchange Rate............................. 20
Section 5.8--Income Tax Withholding............................ 20
Article VI--Representations and Warranties.......................... 20
Section 6.1--ARRIS Representations and Warranties.............. 20
Section 6.2--MERCK Representations and Warranties.............. 21
Article VII--Patent Matters......................................... 21
Section 7.1--Filing, Prosecution and Maintenance of Patents.... 21
Section 7.2--Right to Prosecute and Maintain Patents........... 22
Section 7.3--Interference, Opposition, Reexamination and
Reissue........................................... 23
Section 7.4--Enforcement and Defense........................... 23
Section 7.5--Patent Term Restoration........................... 25
Article VIII--Term and Termination.................................. 25
Section 8.1--Term and Expiration............................... 25
Section 8.2--Termination by MERCK.............................. 25
Section 8.3--Termination....................................... 27
Subsection 8.3.1--Termination for Cause................... 27
Subsection 8.3.2--Effect of Termination for Bankruptcy.... 28
Section 8.4--Effect of Expiration or Termination............... 28
Article IX--Miscellaneous........................................... 29
ii
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
RESEARCH COLLABORATION AND LICENSE AGREEMENT
THIS AGREEMENT is effective as of November , 1996 (the "Effective
Date"), between MERCK & CO., INC., a corporation organized and existing under
the laws of New Jersey ("MERCK") and ARRIS PHARMACEUTICAL CORPORATION, a
corporation organized and existing under the laws of Delaware ("ARRIS").
WITNESSETH:
WHEREAS, ARRIS has developed ARRIS Know-How (as defined below) and has
rights to ARRIS Patents (as defined below);
WHEREAS, MERCK and ARRIS desire to enter into a research collaboration upon
the terms and conditions set forth herein;
WHEREAS, MERCK desires to obtain a license under the ARRIS Patents and ARRIS
Know-How, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless specifically set forth herein to the contrary, the following terms,
whether used in the singular or plural, shall have the respective meanings set
forth below:
1.1 "Active Compound" shall mean any compound in purified form that
(A)
(1) is a [ * ] compound characterized by having the ability to inhibit
(or, in the case of a prodrug, an active species of which inhibits)
human cathepsin K or human cathepsin L [ * ] and having greater than
[ * ] and having greater than [ * ] in an [ * ] wherein the
concentration of the compound is not greater than [ * ], and
(2) satisfies one or more of the following:
(a) is discovered, identified or synthesized by or on behalf of ARRIS
and/or MERCK, or an Affiliate of either of them, pursuant to work
conducted under this Agreement, and is determined by the JRC to
1
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
meet the criteria of Subsection 1.1(A)(1) above either [* ] pursuant
to work conducted under [ * ] or (ii) [ * ] pursuant to work
deriving directly from or based directly upon the results of the
work conducted under the Agreement; or
(b) is acquired prior to the end of the Research Program Term (including
without limitation acquisition of rights thereto) by ARRIS or MERCK,
or an Affiliate of either of them, from a third party, on an
absolute or contingent basis (such as rights under an option), and
is determined by the JRC to meet the criteria of Subsection
1.1(A)(1) above pursuant to work conducted under this Agreement
during the Research Program Term; or
(c) is generically described within a claim describing a genus of
compounds the utility of which is given as human cathepsin K or
human cathepsin L inhibition, as defined in any pending or issued
claim of any unexpired ARRIS Patent, MERCK Patent or Collaboration
Patent filed in the United States or Japan or as a European Patent
Application, or as a Patent Cooperation Treaty ("PCT") application
designating the United States and the contracting states of the
European Patent Convention, and as to which the JRC determines that
at least one member of such genus meets the requirements of either
Subsection 1.1(A)(1)(a) or 1.1(A)(1)(b) above, PROVIDED THAT such
compound is synthesized and assayed [ * ];
or
(B) (1) is (a) identified to the JRC from the ARRIS library by ARRIS or from
the MERCK library by MERCK, or (b) discovered or synthesized by or
on behalf of ARRIS and/or MERCK, or an Affiliate of either of them
pursuant to work conducted under this Agreement [ * ], or (c)
acquired by ARRIS or MERCK, or an Affiliate of either of them,
pursuant to work conducted under this Agreement prior to [ * ],
and (2) is designated an Active Compound by the JRC by [ * ].
Notwithstanding the provisions of Subsections 1.1(A) and (B) above, Active
Compounds shall not include:
(x) Any compound that meets the requirements for being an Active Compound as
set forth above but that has not been determined to be or selected as a
Program Compound by the later of: (i) [
2
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
* ], or (ii) [ * ] by a party hereunder; or
(y) Any compound marketed by MERCK or its Affiliates as of the Effective
Date; or
(z) Any compound for which MERCK as of the Effective Date is conducting
human clinical trials or has filed an IND (which has not been
abandoned or withdrawn), provided that such compound is not known as
of the Effective Date to have human cathepsin K and/or L inhibitory
activity.
1.2 "ARRIS Delta Technology" shall mean that specific technology, methods,
techniques, materials, know-how, inventions, information and data
described generally in a letter from ARRIS to MERCK of even date with
this Agreement, all improvements to and inventions incorporating the
ARRIS Delta Technology (but excluding (i) Active Compounds, (ii) any
improved or modified Active Compounds which are themselves Active Compounds
and (iii) those inventions which arise from the use by MERCK or its
Affiliates or sublicensees of ARRIS Delta Technology to the extent
permitted under Section 4.3 of this Agreement) made prior to [ * ], and
the Patents owned or Controlled by ARRIS at any time covering the
foregoing.
1.3 "Affiliate" shall mean (i) any corporation or business entity of which more
than 50% of the securities or other ownership interests representing the
equity, the voting stock or general partnership interest are owned,
controlled or held, directly or indirectly, by MERCK or ARRIS; or (ii) any
corporation or business entity which, directly or indirectly, owns,
controls or holds 50% (or the maximum ownership interest permitted by law)
or more of the securities or other ownership interests representing the
equity, the voting stock or, if applicable, the general partnership
interest, of MERCK or ARRIS.
1.4 "ARRIS Know-How" shall mean all information, materials and technology,
including without limitation methods, techniques, know-how, inventions,
data, ARRIS Research Information, Technology and Improvements, to the
extent (a) owned or Controlled by ARRIS or an ARRIS Affiliate at any time
prior to [ * ], and (b) necessary or useful to the work MERCK shall perform
in the Field pursuant to the Agreement, but excluding ARRIS Patents,
Collaboration Patents, and ARRIS Delta Technology.
1.5 "ARRIS Patents" shall mean all Patents owned or Controlled by ARRIS that
claim (a) Active Compounds, the manufacture or use of Active Compounds,
or methods or materials used for discovering, identifying, or assaying for
Active Compounds, or (b) to the extent not covered in subsection (a), any
ARRIS Know-How or ARRIS Research Information, where such Patents cover
inventions made prior to [ * ], but excluding the ARRIS Delta Technology.
3
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
1.6 "ARRIS Research Information" shall mean all Research Program
Information and Inventions developed or invented solely by
ARRIS (including by its employees, agents or consultants).
1.7 "Calendar Quarter" shall mean the respective periods of
three consecutive calendar months ending on March 31, June
30, September 30 and December 31.
1.8 "Calendar Year" shall mean each successive period of 12
months commencing on January 1 and ending on December 31.
1.9 "Combination Product" shall mean a Licensed Product which
includes one or more active ingredients other than a Program
Compound in combination with one or more Program Compounds.
1.10 "Collaboration Patents" shall mean all Patents that claim
inventions in Research Program Information and Inventions
that are invented jointly by ARRIS and MERCK (including by
their respective employees, agents or consultants).
1.11 "Collaboration Research Information" shall mean all Research
Program Information and Inventions developed or invented
jointly by ARRIS and MERCK (including by their respective
employees, agents or consultants).
1.12 "Control" shall mean, with respect to a compound, material,
information or intellectual property right, possession by a
party of a license with the right to sublicense existing as
of the Effective Date or that is acquired during the term of
this Agreement.
1.13 "Field" shall mean the discovery, identification, synthesis,
assaying, manufacture, and research use of Active Compounds
and the clinical development of Program Compounds and the
manufacture, use, sale or importation of Licensed Products.
1.14 "First Commercial Sale" shall mean, with respect to any
Licensed Product, the first sale by MERCK or its Affiliates
or sublicensees to a third party intended for end use or
consumption of such Licensed Product in a country after all
required approvals, including marketing and pricing
approvals, have been granted by the governing health
authority of such country.
1.15 "Improvement" shall mean any enhancement in the manufacture,
formulation, ingredients, preparation, presentation, means
of delivery, dosage or packaging of Program Compound or
Licensed Product.
1.16 "JRC" shall mean the Joint Research Committee described in
Section 2.5 of this Agreement.
4
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
1.17 "Licensed Product" shall mean a preparation in final form
for sale by prescription, over-the-counter or any other
method for any and all uses, including, without limitation,
in humans and/or animals and/or agriculture, and all other
uses, which contains a Program Compound, including, without
limitation, any Combination Product.
1.18 "MERCK Know-How" shall mean all information, materials, and
technology, including without limitation methods,
techniques, know-how, inventions, data, MERCK Research
Information, Technology or Improvements, to the extent (a)
owned or Controlled by MERCK or a MERCK Affiliate at any
time prior to [ * ], and (b) in the reasonable opinion of
MERCK necessary or useful to the work ARRIS shall perform in
the Field pursuant to the Agreement, but excluding MERCK
Patents, and Collaboration Patents.
1.19 "MERCK Research Information" shall mean all Research Program
Information and Inventions developed or invented solely by
MERCK (including by its employees, agents or consultants).
1.20 "MERCK Patents" shall mean all Patents owned or Controlled
by MERCK that claim (a) Active Compounds, the manufacture or
use of Active Compounds, or methods or materials used for
discovering, identifying, or assaying for Active Compounds,
or (b) to the extent not covered in subsection (a), any
MERCK Know-How or MERCK Research Information, where such
Patents cover inventions made prior to [ * ].
1.21 "Net Sales" shall mean [ * ] Licensed Product sold by
MERCK, its Affiliates or sublicensees (which term does not
include distributors) to the first independent third party
after deducting, if not previously deducted, from the amount
invoiced:
(a) trade and quantity discounts;
(b) credits and allowances on account of returned or
rejected products;
(c) rebates, chargebacks and other amounts paid on sale or
dispensing of Licensed Product;
(d) [ * ];
(e) [ * ]; and
5
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
(f) [ * ] used for [ * ] Licensed Product as it is
sold, to the extent included within the gross invoice
price of Licensed Product.
With respect to sales of Combination Products, Net Sales
shall be calculated on the basis of the invoice price of
Licensed Product(s) containing the same weight of Program
Compound sold without other active ingredients. If such
Licensed Product is not sold without other active
ingredients, Net Sales shall be calculated on the basis of
[ * ] which shall be the [ * ] which shall be the
[ * ], but in no event shall such [ * ] shall be
determined [ * ] in accordance with [ * ].
1.22 "Patents" shall mean any and all issued patents and patent
applications (which shall be deemed to include certificates
of invention and applications for certificates of invention)
and including all divisions, continuations,
continuations-in-part, reissues, renewals, extensions,
supplementary protection certificates or the like of any of
the foregoing patents and patent applications and foreign
equivalents thereof.
1.23 "Program Compound" shall mean
(a) an Active Compound that:
(i) has [ * ] against human cathepsin K or L;
(ii) [ * ];
(iii) if a human cathepsin K inhibitor, has greater
than [ * ]; or, if a human cathepsin L
inhibitor, has greater than [ * ]; and
(iv) [ * ];
or
6
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
(b) any other Active Compound designated as a Program
Compound by the JRC by the [ * ]; or
(c) any compound deemed to be a Program Compound as
provided in Section 2.10(d) of this Agreement.
1.24 "Proprietary Information" shall mean all scientific,
clinical, regulatory, marketing, financial and commercial
information or data, whether communicated in writing, orally
or by any other means, that is provided by one party to the
other party in connection with this Agreement. Proprietary
Information shall include, without limitation, MERCK
Know-How, ARRIS Know-How and ARRIS Delta Technology.
1.25 "Research Program Information and Inventions" shall mean all
discoveries, Improvements, processes, formulas, data,
inventions, know-how and trade secrets, patentable or
otherwise, developed or discovered under or arising from the
parties' work, alone or jointly, under the Research Program.
1.26 "Research Program" shall mean the collaborative research
effort between the parties as set forth in Article II of
this Agreement and Attachment 2.1 hereto.
1.27 "Technology" shall mean all polynucleotides encoding human
cathepsins, the expression vectors and systems containing
the coding regions of the polynucleotides encoding the human
cathepsins, various organisms (including, but not limited
to, [ * ]) transformed with the polynucleotides encoding
the human cathepsins and required for the production of
recombinant human cathepsin polypeptides, protocols and
biochemical expertise involved in the activation and
purification of human cathepsins, [ * ], substrates,
assays, non-reversible and reversible inhibitors of human
cathepsins, and all additional know-how involved in the
design of cathepsin inhibitors.
1.28 "Territory" shall mean all of the countries in the world.
1.29 "Valid Patent Claim" shall mean a claim of an issued and
unexpired patent included within the ARRIS Patents, MERCK
Patents or Collaboration Patents, which has not been revoked
or held unenforceable or invalid by a decision of a court or
other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for
appeal, and which has not been disclaimed, denied or
admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise.
7
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
ARTICLE II
RESEARCH PROGRAM
2.1 General. ARRIS and MERCK shall engage in the Research
Program upon the terms and conditions set forth in this
Agreement. The activities to be undertaken during the
Research Program are set forth in Attachment 2.1 which may
be amended from time to time upon the mutual written
agreement of the authorized representatives of the parties.
2.2 Conduct of Research. ARRIS and MERCK each shall conduct the
Research Program in good scientific manner, and in
compliance in all material respects with all requirements of
applicable laws, rules and regulations and all applicable
good laboratory practices to attempt to achieve their
objectives efficiently and expeditiously.
2.3 Use of Research Funding. ARRIS shall apply the research
funding it receives from MERCK under this Agreement in
accordance with the Research Program attached hereto as
Attachment 2.1, as such may be amended from time to time
upon the mutual written agreement of authorized
representatives of the parties.
2.4 Exchange of Information. Upon execution of this Agreement,
ARRIS shall disclose to MERCK in English and in writing all
ARRIS Know-How not previously disclosed. During the term of
this Agreement, ARRIS shall also promptly disclose to MERCK
in English and in writing on an ongoing basis all ARRIS
Know-How. MERCK shall promptly disclose to ARRIS during the
term of this Agreement MERCK Know-How which MERCK
determines, in its discretion, may be necessary or useful to
ARRIS in the performance of the Research Program.
2.5 Joint Research Committee. The parties shall form a Joint
Research Committee ("JRC") which shall be composed of three
scientists from each party and chaired by MERCK. The JRC
shall meet at least monthly during the Research Program Term
to monitor and evaluate the progress of and direct the
Research Program. The JRC may designate compounds as Active
Compounds in accordance with Subsection 1.1(B) or Program
Compounds in accordance with Subsection 1.23(b) during the
period ending on [ * ]. Such meetings may be face-to-face
or by teleconference or videoconference, except that there
must be one face-to-face meeting approximately every three
months at alternating sites. In the event of any unresolved
differences between the parties with respect to issues that
come before the JRC, [ * ].
2.6 Records and Reports.
2.6.1 Records. ARRIS and MERCK each shall maintain
records which shall be complete and accurate and shall
8
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
fully and properly reflect all work done and
results achieved in the performance of the Research Program in
sufficient detail and in good scientific manner appropriate for
patent and regulatory purposes.
2.6.2 Copies and Inspection of Records. MERCK shall have the
right, during normal business hours and upon reasonable
notice no more than [ * ], to inspect and copy all of the
records of ARRIS referenced in Section 2.6.1, except that
ARRIS need not disclose any data or information relating to
compounds in ARRIS's library as of the Effective Date that
do not meet the criteria in Subsection 1.1(A)(1). MERCK
shall maintain such records and the information disclosed
therein in confidence in accordance with Section 4.1. MERCK
shall have the right to arrange for a reasonable number of
its employees, agents and outside consultants to visit ARRIS
at its offices and laboratories during normal business hours
and upon reasonable notice, and to discuss the Research
Program and its results in detail with the technical
personnel and consultants of ARRIS. All inspections,
copying and visits hereunder shall be conducted in a manner
so as not to disrupt ARRIS's business or cause any
disclosure of any other ARRIS confidential information.
2.6.3 Quarterly Reports. Within 30 days following the end of each
Calendar Quarter during the term of this Agreement, ARRIS
shall provide to MERCK a written progress report which shall
describe the work performed to date on the Research Program,
evaluate the work performed in relation to the goals of the
Research Program and provide such other information required
by the Research Program or reasonably requested by MERCK
relating to the progress of the goals or performance of the
Research Program. Upon request, ARRIS shall provide copies
of the records described in Section 2.6.1. above (excluding
the data and information excluded as set forth in Section
2.6.2).
2.7 Research Program Information and Inventions. The Research
Program Information and Inventions developed or invented
under this Agreement shall be owned as follows:
(a) ARRIS Research Information shall be owned [ * ];
(b) MERCK Research Information shall be owned [ * ]; and
(c) Collaboration Research Information shall be owned
[ * ].
Each party shall promptly disclose to the other the
development, making, conception and reduction to practice of
all Research Program Information and Inventions. ARRIS
shall not be required to disclose to MERCK the invention or
development of ARRIS Delta Technology except to the extent
such inventions or developments relate directly to the
Field.
2.8 Research Program Term. Except as otherwise provided herein,
the term of the Research Program shall commence on the
Effective Date and continue for a
9
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
period of two years (or three years if extended as provided below
in this Section 2.8) (the "Research Program Term"), except that
MERCK may terminate the Research Program and this Agreement in
accordance with Section 8.2. The parties by mutual written
agreement executed by authorized representatives may extend the
Research Program Term for one additional year. Upon extension of
the Research Program Term, if applicable, Attachment 2.1 setting
forth the Research Program shall be amended in writing by mutual
agreement.
2.9 ARRIS Delta Technology. As part of its efforts under the
Research Program, ARRIS shall use all reasonable efforts to
apply the ARRIS Delta Technology to the identification,
discovery and synthesis of Active Compounds. The ARRIS
Delta Technology shall remain proprietary to ARRIS. MERCK
agrees not to make any use of the Delta Technology, except
as may be permitted under Section 4.3 of this Agreement.
The parties understand and agree, however, that incident to
MERCK's research and development activities in collaboration
with ARRIS under the Research Program, MERCK and/or its
Affiliates (including their respective employees or agents)
may make inventions or developments relating to or based
upon the ARRIS Delta Technology. MERCK hereby assigns to
ARRIS all improvements to and inventions incorporating the
ARRIS Delta Technology (excluding (i) Active Compounds, (ii)
any improved or modified Active Compounds which are
themselves Active Compounds and (iii) those inventions which
arise from the use of ARRIS Delta Technology by MERCK or its
Affiliates or sublicensees as may be permitted under Section
4.3 of this Agreement) made during the Agreement.
2.10 Rights to Compounds. The parties contemplate that each of
them will make compounds from its library available for
testing for purposes of this Agreement and that additional
compounds may be invented and/or synthesized in the course
of the Research Program. In respect of such compounds, the
parties agree as follows:
(a) Pre-existing compounds which are tested in the
Research Program and are determined, under the
provisions of Section 1.1, not to be Active Compounds
shall revert to the party which made such compound
available, without any restriction under this
Agreement.
(b) Compounds which are invented in the course of the
Research Program shall be owned [ * ] each such
compound, with compounds which are invented jointly by
the parties [ * ], and all such compounds that are
determined under the provisions of Section 1.1 not to
be Active Compounds shall [ * ] such compounds,
[ * ] under this Agreement.
(c) Active Compounds shall not be subject to clinical
development (but shall be available for pre-clinical
investigation) by either party except pursuant to the
terms of this Agreement unless and until such Active
10
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
Compound is released from this Agreement. Active Compounds shall
be released from this Agreement if such Active Compound is not
determined to be or designated as a Program Compound under the
provisions of Section 1.23 by the later of: (i) [ * ], or (ii)
[ * ] such Active Compound was first synthesized by a party
hereunder. Rights in Active Compounds which are released from
this Agreement shall be determined in accordance with subsections
(a) and (b) above.
(d) Neither party shall develop or market any compound that
at any time during the periods specified in Section 1.1
met the definition of Active Compound under Section
1.1, even if such compound later was released from the
terms of this Agreement as provided in subsection (c)
above and subsection (x) of Section 1.1, except
pursuant to the terms of this Agreement if such
compound is developed for its inhibition of cathepsin K
or L. Any such compound developed shall be deemed a
Program Compound for all purposes hereunder.
(e) Program Compounds shall be developed and marketed only
in accordance with the terms of this Agreement.
(f) No implied license under patent rights is granted under
this Section 2.10.
ARTICLE III
LICENSE; DEVELOPMENT AND COMMERCIALIZATION
3.1 Research License Grants.
(a) Upon the terms and conditions set forth herein, ARRIS
hereby grants MERCK the sole license under the ARRIS
Know-How and the ARRIS Patents solely as necessary to
conduct the discovery, research and development of
Active Compounds under this Agreement. The foregoing
license may be sublicensed to MERCK Affiliates and,
with the consent of the parties, to third party
sublicensees.
(b) Upon the terms and conditions set forth herein, MERCK
hereby grants ARRIS the sole license under the MERCK
Know-How and the MERCK Patents solely as necessary to
conduct the discovery, research and development of
Active Compounds under this Agreement.
(c) As used in Subsections 3.1(a) and (b) above, the phrase
"sole license" shall mean that the licensor has not
granted and shall not grant to any third party during
the term of this Agreement the license rights granted
to the licensee in the applicable Subsection.
11
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
3.2 Commercialization License. Upon the terms and conditions
set forth herein, ARRIS hereby grants MERCK the exclusive
license under the ARRIS Know-How and the ARRIS Patents and
ARRIS' interest in the Collaboration Research Information
and the Collaboration Patents solely to develop, make, have
made, use, import and sell Program Compounds and Licensed
Products in the Territory. The foregoing license may be
sublicensed to MERCK Affiliates and third party
sublicensees.
3.3 Development and Commercialization. MERCK shall use [ * ]
in developing and commercializing [ * ] pharmaceutical
products, at its own expense, to develop and commercialize a
Licensed Product in such countries in the Territory [ * ].
3.4 Exclusivity in Field. ARRIS and MERCK each covenant to the
other that during the period commencing on the Effective
Date and continuing until [ * ], it will conduct no
activity concerning discovering, identifying, researching or
developing compounds which meet the criteria of Subsection
1.1(A)(1) except pursuant to this Agreement (provided that
the foregoing shall not prevent a party or its Affiliates
from conducting pre-clinical investigations on such
compounds for uses outside of their inhibition of cathepsin
K or cathepsin L). The foregoing shall not be interpreted
to limit the other obligations under this Agreement,
including without limitation those under Sections 2.9 and
2.10 and Article IV.
ARTICLE IV
CONFIDENTIALITY AND PUBLICATION
4.1 Nondisclosure Obligations. All Proprietary Information
disclosed by one party to the other hereunder shall be
maintained in confidence by the receiving party and shall
not be disclosed to any non-party or used for any purpose
except as expressly permitted herein without the prior
written consent of the other party to this Agreement, except
that the foregoing shall not apply to the extent provided in
Section 4.3 below.
4.2 Restriction on ARRIS Delta Technology. MERCK agrees
[ * ] not to disclose ARRIS Delta Technology to any of its
employees except to those MERCK employees who reasonably
require same for the purposes of this Agreement and who have
been apprised of the confidential nature of such disclosure.
4.3 Exceptions. The non-use and non-disclosure obligations of
Sections 4.1 and 4.2 shall not apply to the extent that the
Proprietary Information:
(a) is known by the receiving party at the time of its
receipt, and not through a prior disclosure by the
disclosing party, as documented by business records;
12
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
(b) is properly in the public domain;
(c) is subsequently disclosed to the receiving party by a
third party who may lawfully do so and is not under an
obligation of confidentiality to the disclosing party;
or
(d) is developed by the receiving party independently of
Proprietary Information received from the disclosing
party.
4.4 Permitted Disclosure of Proprietary Information.
Notwithstanding Section 4.1, a party receiving Proprietary
Information of the other party may disclose such Proprietary
Information:
(a) to governmental or other regulatory agencies in order
to gain approval to conduct clinical trials or to
market Licensed Product, but such disclosure may be
only to the extent reasonably necessary to obtain such
authorizations;
(b) by MERCK to its permitted sublicensees, agents,
consultants, Affiliates and/or other third parties to
the extent necessary for the research and development,
manufacturing and/or marketing of the Licensed Product
(or for such parties to determine their interest in
performing such activities) in accordance with this
Agreement on the condition that such third parties
agree to be bound by the confidentiality obligations
contained within this Agreement, PROVIDED the term of
confidentiality for such third parties shall be no less
than[ * ], or
(c) if required to be disclosed by law or court order,
provided that notice is promptly delivered to the other
party in order to provide an opportunity to challenge
or limit the disclosure obligations.
(d) Notwithstanding the foregoing, [ * ].
4.5 Publication. MERCK and ARRIS each acknowledge the other's
interest in publishing its results to obtain recognition
within the scientific community and to advance the state of
scientific knowledge. Each party also recognizes the mutual
interest in obtaining valid patent protection and in
protecting business interests and trade secret information.
Consequently, either party, its employees, agents or
consultants wishing to make such a publication shall deliver
to the other party a copy of the proposed written
publication or an outline of an oral disclosure at least
[ * ] prior to submission for publication or presentation.
The reviewing party shall have the right (a) to propose
modifications to the publication for patent reasons, trade
secret reasons or business reasons or (b) to request a
reasonable delay in publication or presentation in order to
protect know-how and patentable information.
13
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
If the reviewing party requests a delay, the publishing party shall
delay submission or presentation for [ * ] after the filing of
the initial patent application to enable patent applications
protecting each party's rights in such information to be filed in
accordance with Article VII below. Upon expiration of such
[ * ], the publishing party shall be free to proceed with the
publication or presentation. If the reviewing party requests
modifications to the publication, the publishing party shall edit
such publication to prevent disclosure of trade secret or
proprietary business information prior to submission of the
publication or presentation.
4.6 Press Releases. Each party shall have the right to make
public announcements concerning this Agreement or the
subject matter hereof, provided that the other party shall
have reasonable opportunity and the right to approve the
content of such announcement prior to its being made, which
approval shall not be delayed or unreasonably withheld.
MERCK shall have reasonable opportunity and the right to
review all filings describing the terms of this Agreement,
prior to their submittal by ARRIS to the SEC, including all
proposed redacted copies of this Agreement. ARRIS shall
give due respect to any reasonable and timely request by
MERCK with respect thereto, including confidential treatment
of selected portions of this Agreement.
ARTICLE V
PAYMENTS; ROYALTIES AND REPORTS
5.1 Commitment Fee. In consideration of ARRIS's commitment to
perform its obligations under the Research Program and for
access to the ARRIS Know-How granted hereunder, MERCK shall
pay ARRIS a non-refundable commitment fee of [ * ] upon
execution of this Agreement by both parties.
5.2 Research Program Funding. In consideration for ARRIS's
performance of its obligations under the Research Program,
and subject to the terms and conditions contained herein,
MERCK shall pay ARRIS:
(a) For the First Year of the Research Program Term: an
amount equal to [ * ] (representing [ * ] per Full
Time Equivalent ("FTE") for [ * ]), payable in four
equal quarterly installments of [ * ] each. The
first such quarterly installment of [ * ] shall be
due upon execution of this Agreement by both parties.
The remaining three such quarterly installments of
[ * ] each shall be due on the first day of the
respective three month period, i.e., on February 1,
1997, May 1, 1997 and August 1, 1997. Should the
parties agree to amend the Research Program to require
[ * ] additional FTEs during the First Year, the
additional payment for such FTE(s) shall equal [ * ]
per FTE.
14
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
(b) For the Second Year of the Research Program Term: an
amount equal to [ * ] (representing [ * ] per FTE
for [ * ]), payable in four quarterly installments of
[ * ] each. Such quarterly installments shall be due
on the first day of the respective three month period,
i.e., on November 1, 1997, February 1, 1998, May 1,
1998 and August 1, 1998. If the JRC determines to
accelerate the Research Program during the Second Year
by requiring up to as many as [ * ] during the Second
Year, the parties shall amend the Research Program
accordingly and the additional payment for such FTE(s)
shall equal [ * ] per FTE.
(c) For any Third Year of the Research Program Term: If
the Research Program Term is extended for a Third Year
as set forth in Section 2.8 above, payments for such
Third Year shall equal [ * ] per required FTE.
5.3 Milestone Payments. Subject to the terms and conditions of
this Agreement, MERCK shall pay to ARRIS the following
milestone payments:
(a) [ * ] upon [ * ] set forth in Section [ * ] of
this Agreement;
(b) [ * ] upon [ * ]of a [ * ];
(c) [ * ] upon [ * ] of a Program Compound for [ * ]
as defined by MERCK;
(d) [ * ] upon [ * ] of [ * ] using a Program
Compound;
(e) [ * ] upon [ * ] of [ * ] using a Program
Compound;
(f) [ * ] upon [ * ] a Licensed Product for [ * ];
(g) [ * ] upon [ * ] a Licensed Product in the [ * ].
ARRIS shall notify MERCK in writing within [ * ] upon the
achievement of the milestone described in (b) above, and
MERCK shall pay ARRIS the appropriate milestone payment
within [ * ] of its receipt of such notice. MERCK shall
notify ARRIS in writing within [ * ] upon the achievement of
15
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
each milestone described in (a) and (c) through (g) above, and
upon such notice shall pay ARRIS the appropriate milestone
payment.
The milestone payments described in (a) through (c) above
shall be payable only upon the initial achievement of such
milestone and no amounts shall be due hereunder for
subsequent or repeated achievement of such milestone.
The milestone payments described in (d) through (g) above
shall be payable only upon the achievement of each such
milestone for the [ * ] a particular milestone event.
Notwithstanding the foregoing, if a Program Compound is
approved and marketed as a Licensed Product, and MERCK
elects to develop or to continue developing, e.g., as a
second generation product, another Program Compound (which
does not contain the same Program Compound or any salt form,
different formulation, or stereo-isomer thereof as such
Licensed Product) as a Licensed Product, MERCK shall make
the required payment for [ * ] described in [ * ] any
such [ * ], which shall include payment of all milestone
payments described in [ * ] that were [ * ] of such
Licensed Product.
[ * ] of each milestone payment made for the achievement
of a milestone described in (f) and (g) as set forth above
[ * ] for the Program Compound for which such milestone
was paid; PROVIDED, HOWEVER, that the [ * ] for such
Program Compound [ * ] in such year.
5.4 Royalties.
5.4.1 Royalties Payable By MERCK. Subject to the terms and
conditions of this Agreement, MERCK shall pay to ARRIS
royalties during each Calendar Year on a country-by-country
basis:
(a) if the Licensed Product is covered by a Valid Patent
Claim in the country of sale, then:
(i) an amount equal to [ * ] of the Net Sales of
such Licensed Products in such countries, until
the total annual Net Sales of Licensed Products
by MERCK, its Affiliates or sublicensees equals
[ * ];
(ii) for that amount of annual Net Sales of Licensed
Products by MERCK, its Affiliates or sublicensees
greater than [ * ] and less than or equal to
[ * ], an amount equal to [ * ]
16
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* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
of such Net Sales in such countries; and
(iii) for that amount of annual Net Sales of
Licensed Products by MERCK, its Affiliates or
sublicensees greater than [ * ], an amount equal
to [ * ] of such Net Sales in such countries; or
(b) for sales in countries other than those covered in
Subsection 5.4.1(a) above:
(i) an amount equal to [ * ] of the Net Sales of
such Licensed Products in such countries, until
the total annual Net Sales of Licensed Products by
MERCK, its Affiliates or sublicensees equals
[ * ];
(ii) for that amount of annual Net Sales of Licensed
Products by MERCK, its Affiliates or sublicensees
greater than [ * ] and less than or equal to
[ * ], an amount equal to [ * ] of such Net
Sales in such countries; and
(iii) for that amount of annual Net Sales of
Licensed Products by MERCK, its Affiliates or
sublicensees greater than [ * ], an amount equal
to [ * ] of such Net Sales in such countries.
Royalties on each Licensed Product at the rates set forth
above shall be effective as of the date of First Commercial
Sale of Licensed Product in a country and shall continue
until either (i) the expiration of the last applicable
patent on such Licensed Product in such country in the case
of sales under Subsection 5.4.1(a) above or (ii) until the
[ * ] in such country in the case of sales of Licensed
Product under Subsection 5.4.1(b) above, in each case
subject to the following conditions:
(x) that only one royalty shall be due with respect to the
same unit of Licensed Product;
(y) that no royalties shall be due upon the sale or other
transfer among MERCK, its Affiliates or sublicensees,
but in such cases the royalty shall be due and
calculated upon MERCK's or its Affiliate's or its
sublicensee's Net Sales to the first independent third
party; and
(z) no royalties shall accrue on the disposition without
charge of Licensed Product in reasonable quantities by
MERCK, its Affiliates or its sublicensees as samples
(promotion or otherwise) or as donations (for
17
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
example, to non-profit institutions or government agencies for a
non-commercial purpose).
5.4.2 Managed Pharmaceutical Contracts. MERCK may sell Licensed
Products to an independent third party (such as a retailer
or wholesaler) and may subsequently perform services
relating to Licensed Products and other products under a
managed pharmaceutical benefits contract or other similar
contract. In such cases, Net Sales shall be based [ * ]
in Section 1.21, [ * ] receive compensation arising from
the performance of such services.
5.4.3 Change in Sales Practices. The parties acknowledge that
during the term of this Agreement, MERCK's sales practices
for the marketing and distribution of Licensed Product may
change to the extent to which the calculation of the payment
for royalties on Net Sales may become impractical or even
impossible. In such event the parties agree to meet and
discuss in good faith new ways of compensating ARRIS to the
extent currently contemplated under Section 5.4.1.
5.4.4 Bulk Compound. In a country other than a Major Market
Country (which shall be for purposes of this Section the
United States, the United Kingdom, France, Canada, Germany,
Japan, Italy and Spain) in those cases where MERCK sells
bulk Program Compound to a third party other than a
sublicensee rather than Licensed Product in packaged form,
and is unable to determine Net Sales, the royalty
obligations of this Article V shall be [ * ].
5.4.5 Compulsory Licenses. If a compulsory license is granted
with respect to Licensed Product in any country in the
Territory with a royalty rate lower than the royalty rate
provided by Section 5.4.1., then the royalty rate to be paid
by MERCK on Net Sales in that country under Section 5.4.1
shall be [ * ].
5.4.6 Third Party Licenses. If one or more patent licenses from a
third party or parties are required by MERCK, its Affiliates
and/or sublicensees to develop, make, have made, use, sell
or import Compound or Licensed Product in a particular
country ("Third Party Patent License(s)"), any royalties
actually paid by MERCK under such Third Party Patent
License(s) with respect to sale of such Licensed Product in
such country based on rates [ * ] the rates to be paid
ARRIS under Section 5.4.1(a) with respect to such sales,
shall be credited against the royalty payments to be paid
ARRIS by MERCK with respect to the sale of such Licensed
Products in such country; PROVIDED, HOWEVER, that the
royalties payable to ARRIS in any given year shall not be
reduced by more than [ * ] in such year.
5.5 Reports; Payment of Royalty. Following the First Commercial
Sale of a Licensed Product and during the term of the
Agreement, MERCK shall furnish
18
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
to ARRIS a quarterly written report for the Calendar Quarter
showing the sales of all Licensed Products subject to
royalty payments sold by MERCK, its Affiliates and its
sublicensees in the Territory during the reporting period
and the royalties payable under this Agreement. Reports
shall be due on the [ * ] following the close of each
Calendar Quarter. Royalties that have accrued in a
particular Calendar Quarter shall be due and payable on the
date such royalty report is due. MERCK shall keep complete
and accurate records in sufficient detail to enable the
royalties payable hereunder to be determined.
5.6 Audits.
(a) Upon the written request of ARRIS and not more than
once in each Calendar Year, MERCK shall permit an
independent certified public accounting firm of
nationally recognized standing selected by ARRIS and
reasonably acceptable to MERCK, at ARRIS's expense, to
have access during normal business hours to such of the
records of MERCK as may be reasonably necessary to
verify the accuracy of the royalty reports hereunder
for any Calendar Year ending not more than [ * ]
prior to the date of such request. The accounting firm
shall disclose to ARRIS only whether the royalty
reports are correct or incorrect and the specific
details concerning any discrepancies. No other
information shall be provided to ARRIS.
(b) If such accounting firm correctly concludes that
additional royalties were owed during such period,
MERCK shall pay [ * ] of the date ARRIS delivers
to MERCK such accounting firm's written report so
correctly concluding.
(c) MERCK shall include in each sublicense granted by it
pursuant to this Agreement a provision requiring the
sublicensee to make reports to MERCK, to keep and
maintain records of sales made pursuant to such
sublicense and to grant access to such records by
ARRIS's independent accountant to the same extent
required of MERCK under this Agreement. Upon the
expiration of [ * ] following the end of any Calendar
Year, the calculation of royalties payable with respect
to such Calendar Year shall be binding and conclusive
upon ARRIS, and MERCK and its sublicensees shall be
released from any liability or accountability with
respect to royalties for such Calendar Year.
(d) ARRIS shall treat all information subject to review
under this Section 5.6 or under any sublicense
agreement in accordance with the confidentiality
provisions of Article IV of this Agreement, and shall
cause its accounting firm to enter into an acceptable
confidentiality agreement with MERCK obligating such
firm to retain all such financial information in
confidence pursuant to such confidentiality agreement.
19
_______________________________________________________________________________
* Certain confidential information contained in this document, marked by
brackets, has been ommitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exhange Act of
1934, as amended.
_______________________________________________________________________________
5.7 Payment Exchange Rate. All payments to be made by MERCK to
ARRIS under this Agreement shall be made in United States
dollars and may be paid by check made to the order of ARRIS
or bank wire transfer in immediately available funds to such
bank account in the United States designated in writing by
ARRIS from time to time. In the case of sales outside the
United States, the rate of exchange to be used in computing
the amount of currency equivalent in United States dollars
due ARRIS shall be the rate of exchange used by MERCK in its
worldwide accounting system, prevailing on the fourth to the
last MERCK business day of the Calendar Quarter during which
such sales were made, which shall be generally reflective of
then prevailing actual currency exchange rates.
5.8 Income Tax Withholding. If laws, rules or regulations
require withholding of income taxes or other taxes imposed
upon payments set forth in this Article V, MERCK shall make
such withholding payments as required and subtract such
withholding payments from the payments set forth in this
Article V. MERCK shall submit appropriate proof of payment
of the withholding taxes to ARRIS within a reasonable period
of time.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Arris Representations and Warranties. ARRIS represents and
warrants to MERCK that as of the date of this Agreement:
(a) to the best of ARRIS's knowledge, the ARRIS Patents and
ARRIS Know-How existing as of the Effective Date are
subsisting and are not invalid or unenforceable, in
whole or in part;
(b) it has the full right, power and authority to enter
into this Agreement, to perform the Research Program
and to grant the licenses granted under Article III
hereof;
(c) to the best of ARRIS's knowledge, the ARRIS Patents,
ARRIS Know-How and ARRIS Delta Technology practiced as
permitted herein do not infringe on any intellectual
property rights owned by any third party, and do not
result from a misappropriation by ARRIS of any property
owned by any third party;
(d) there are no claims, judgments or settlements against
or owed by ARRIS or pending or threatened claims or
litigation relating to the ARRIS Patents, ARRIS
Know-How and ARRIS Delta Technology;
(e) it has disclosed to MERCK all relevant information
regarding the ARRIS Patents and ARRIS Know-How
reasonably relating to activities under this Agreement;
20
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
(f) that during the course of the Research Program, ARRIS
will not knowingly infringe any valid patents; and
(g) [ * ] of the Effective Date of this Agreement and
[ * ] hereunder was [ * ].
6.2 Merck Representations and Warranties. MERCK represents and
warrants to ARRIS that as of the date of this Agreement it
has the full right, power and authority to enter into this
Agreement, to perform the Research Program and to grant the
licenses granted under Section 3.1(b) hereof.
ARTICLE VII
PATENT MATTERS
7.1 Filing, Prosecution and Maintenance of Patents.
(a) Each party agrees at its expense to file, prosecute and
maintain in the Territory, upon appropriate
consultation with the other party, United States patent
applications relating to the Research Program
Information and Inventions owned in whole or in part by
such party, and, with respect to ARRIS, the inventions
in the ARRIS Patents licensed to MERCK under this
Agreement; PROVIDED, HOWEVER, with respect to
Collaboration Research Information, [ * ] obligation
to file, prosecute, and maintain at its expense the
United States patent applications for such inventions
and [ * ] fully and shall cause its employees to
cooperate fully on the filing and prosecution of such
patents. In each case, the filing party shall give the
non-filing party an opportunity to review the text of
the application before filing, shall consult with the
non-filing party with respect thereto, and shall supply
the non-filing party with a copy of the application as
filed, together with notice of its filing date and
serial number. Each party shall keep the other advised
of the status of the actual and prospective patent
filings and upon the request of the other party,
provide advance copies of any papers related to the
filing, prosecution and maintenance of such patent
filings. Each party promptly shall give notice to the
other of the grant, lapse, revocation, surrender,
invalidation or abandonment of any Patents for which
the party is responsible hereunder for the filing,
prosecution and maintenance.
(b) Each party agrees to file, within one year of the
filing date of any patent application it files pursuant
to Subsection 7.1(a), a counterpart International
Application under the PCT designating all member
countries and any additional counterpart national
patent applications in non-PCT member states so
requested by the other party and to maintain and/or
prosecute such applications. [ * ] for the [ * ]
pursuant to this Subsection 7.1(b). The costs and
expenses relating to filing, prosecuting and/or
maintaining all national patent applications in non-PCT
member countries and all national patent applications
arising from the National
21
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
Stage of any PCT patent applications filed pursuant to this Subsection
7.1(b) [ * ]. For Collaboration Patents, MERCK shall file any
United States non-provisional and PCT patent applications and bear
all costs and expenses related to such filings.
(c) Each party agrees to be responsible for maintaining
through the end of its term each patent issuing from
any patent application it files pursuant to Subsections
7.1(a) and (b). [ * ] for the [ * ] of each United
States patent issuing from any patent application it
files pursuant to Subsection 7.1(a). The costs and
expenses relating to the maintenance of each patent
issuing from any patent application filed pursuant to
Subsection 7.1(b) shall be [ * ].
(d) Notwithstanding the foregoing, ARRIS shall have the
first right to file and prosecute all patent
applications claiming Active Compounds identified,
designed or developed using or based upon the ARRIS
Delta Technology. Such applications shall be reviewed
by MERCK prior to filing. All such patent prosecution
efforts shall be paid for as provided in Subsections
7.1(a) through (c) above.
7.2 Right to Prosecute and Maintain Patents.
(a) Each party shall give timely notice to the other of its
decision to forego filing of any patent application
required under Section 7.1 or to cease prosecution
and/or maintenance of such applications or patents and,
in such case, shall permit the other party, [ * ], to
continue prosecution or maintenance [ * ]. If the
other party elects to continue prosecution or
maintenance, or to file based on such party's election
not to file pursuant to Section 7.1 above, such
notifying party shall execute such documents and
perform such acts [ * ] as may be reasonably
necessary to permit the other party to continue such
prosecution or maintenance. Any patents or patent
applications so prosecuted or maintained shall be
assigned to such other party.
(b) Notwithstanding any provisions of this Agreement,
either party, upon appropriate consultation with and
assent by the other party, may forego or postpone the
filing of any patent applications required under
Section 7.1 of this Agreement or may terminate the
prosecution and/or maintenance or have the other party
take responsibility for filing, prosecuting and/or
maintaining any patent applications or other Patents
22
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
required, filed or perfected under or pursuant to Section 7.1
without any loss of rights granted or provided for under this
Agreement.
7.3 Interference, Opposition, Reexamination and Reissue.
(a) Each party, within ten days of learning of such event,
shall inform the other party of any request for, or
filing or declaration of, any interference, opposition,
or reexamination relating to the ARRIS Patents or
Collaboration Patents. MERCK and ARRIS thereafter
shall consult and cooperate fully to determine a course
of action with respect to any such proceeding. MERCK
shall have the right to review and approve any
submission to be made in connection with such
proceeding.
(b) ARRIS shall not institute any opposition,
reexamination, or reissue proceeding relating to the
ARRIS Patents or Collaboration Patents without the
prior written consent of MERCK, which consent shall not
unreasonably be withheld.
(c) In connection with any interference, opposition,
reissue, or reexamination proceeding relating to the
ARRIS Patents or Collaboration Patents, MERCK and ARRIS
will cooperate fully and will provide each other with
any information or assistance that either reasonably
may request. ARRIS shall keep MERCK informed of
developments in any such action or proceeding,
including, to the extent permissible, the status of any
settlement negotiations and the terms of any offer
related thereto.
(d) Each party [ * ] proceeding relating to any patent
application it files pursuant to Subsection 7.1(a) or
patent issuing therefrom. The parties shall [ * ]
any interference, opposition, reexamination or reissue
proceeding relating to any patent application filed
under Subsection 7.1(b) or patent issuing therefrom.
7.4 Enforcement and Defense.
(a) Each party shall give the other notice of either (x)
any infringement of ARRIS Patents or Collaboration
Patents in the Field, or (y) any misappropriation or
misuse of ARRIS Know-How, that may come to ARRIS's
attention. MERCK and ARRIS thereafter shall consult
and cooperate fully to determine a course of action
including, without limitation, the commencement of
legal action by either or both of MERCK and ARRIS, to
terminate any infringement of such patent rights in the
Field or any misappropriation or misuse of ARRIS
Know-How in the Field. However, ARRIS, upon notice to
MERCK, shall have the first right to initiate and
prosecute such legal action [ * ] in the name of
ARRIS (and, if appropriate, MERCK), or to control the
defense of
23
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
any declaratory judgment action relating to ARRIS
Patents, Collaboration Patents or ARRIS Know-How.
ARRIS promptly shall inform MERCK if it elects not to
exercise such first right, and if such infringement or
misuse materially adversely affects MERCK's efforts
under this Agreement, MERCK thereafter shall have the
right either to initiate and prosecute such action or
to control the defense of such declaratory judgment
action in the name of MERCK and, if necessary, ARRIS.
(b) If ARRIS elects not to initiate and prosecute an action
as provided in Subsection 7.4(a), and, due to material
adverse effect on MERCK, MERCK has the right and chose
to prosecute an action, the cost of any agreed-upon
course of action to terminate infringement of ARRIS
Patents or Collaboration Patents, misappropriation or
misuse of ARRIS Know-How, including the costs of any
legal action commenced or the defense of any
declaratory judgment, [ * ]. Any proceeds from such
action [ * ] will be [ * ].
(c) For any action to terminate any infringement of ARRIS
Patents or Collaboration Patents or any
misappropriation or misuse of ARRIS Know-How, in the
event that either MERCK or ARRIS is unable to initiate
or prosecute such action solely in its own name as
provided herein, the other party will join such action
voluntarily and will execute and cause its Affiliates
under its control to execute all documents necessary
for the party seeking to initiate litigation to
prosecute and maintain such action. In connection
with any such action, MERCK and ARRIS will cooperate
fully and will provide each other with any information
or assistance that either reasonably may request. Each
party shall keep the other informed of developments in
any such action or proceeding, including, to the extent
permissible by law, the status of any settlement
negotiations and the terms of any offer related
thereto.
(d) Any recovery obtained by either or both MERCK and
ARRIS, in connection with or as a result of any action
contemplated by this Section 7.4 to terminate an
infringement or misuse where such infringement or
misuse materially adversely affects MERCK's efforts
under the Agreement, whether by settlement or
otherwise, shall be shared in order as follows:
(i) [ * ] for such action, then [ * ];
(ii) if [ * ], then any proceeds shall be [ * ].
24
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
(e) ARRIS shall inform MERCK of any certification regarding
any ARRIS Patents it has received pursuant to either 21
U.S.C. Sections 355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV)
or under [ * ] and shall provide MERCK with a copy of
such certification within five days of receipt.
ARRIS's and MERCK's rights with respect to the
initiation and prosecution of any legal action as a
result of such certification or any recovery obtained
as a result of such legal action shall be as defined in
Subsections 7.4(a) through (d) hereof; PROVIDED,
HOWEVER, that ARRIS shall exercise its first right to
initiate and prosecute any action and shall inform
MERCK of such decision within ten days of receipt of
the certification, after which time MERCK shall have
the right to initiate and prosecute such action.
(f) For any action for which the parties are [ * ] which
is [ * ] shall control the action. If the parties
are [ * ] shall control the action.
7.5 Patent Term Restoration. The parties shall cooperate in
obtaining patent term restoration or supplemental protection
certificates or their equivalents in any country in the
Territory where applicable to ARRIS Patents. If elections
with respect to obtaining such patent term restoration are
to be made, [ * ] shall have the right to make the
election and [ * ] shall abide by such election.
ARTICLE VIII
TERM AND TERMINATION
8.1 Term and Expiration. This Agreement shall be effective as
of the Effective Date and, unless terminated earlier under
Sections 8.2 or 8.3 below, shall continue in effect until
expiration of all royalty obligations hereunder. Upon
expiration of this Agreement due to expiration of all
royalty obligations hereunder, MERCK's licenses pursuant to
Section 3.1 shall become fully paid-up, perpetual licenses.
8.2 Termination by MERCK. Notwithstanding anything to the
--------------------
contrary herein, MERCK shall have the right to terminate
this Agreement
(a) at any time after the end of the Research Program Term
for any reason by giving [ * ] advance written notice
to ARRIS; or
(b) during the Research Program Term, upon [ * ] written
notice, solely in the event that MERCK in its
reasonable judgment exercised in good faith determines
that
(i) the parties have demonstrated, [ * ]
25
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
, or
(ii) [ * ].
[ * ] under Subsection 8.2 (b)(i) above is one that
would demonstrate that [ * ].
In the event of termination under this Section 8.2,
(i) the rights and obligations hereunder, including
any payment obligations not due or accrued as of
the termination date, shall terminate, and
(ii) MERCK shall have [ * ] for all internal
research purposes excluding inhibition of
cathepsin K or L, and
(iii) To the extent not previously disclosed under
Section 2.7, upon termination of this Agreement
pursuant to this Section 8.2, MERCK shall disclose
to ARRIS the development, making, conception and
reduction to practice of all Research Program
Information and Inventions as of the effective
date of such termination. ARRIS shall have the
option to obtain an exclusive license under
MERCK's interest in the Research Program
Information and Inventions and the Collaboration
Patents solely for use in discovering, developing,
making, using, importing and selling inhibitors of
cathepsin K and L, and an exclusive license under
the MERCK Patents solely for use in discovering,
developing, making, using, importing and selling
inhibitors of cathepsin K and L pursuant to a
license agreement to be negotiated in good faith
by the parties promptly after the exercise of such
option. ARRIS shall have the right to exercise
such option within a [ * ] of the effective date
of termination of this Agreement under this
Section 8.2, after which period such option shall
expire if unexercised. Such license agreement
shall contain at least the following terms: (a)
that ARRIS [ * ] to be [ * ] (b) that ARRIS
shall not [ * ]; (c) that ARRIS shall not [ * ]
26
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
[ * ]; (d) that ARRIS shall not [ * ]; (e) that ARRIS shall
[ * ] with respect to [ * ] having [ * ]; (f) that ARRIS
shall [ * ] of the license agreement; (g) that ARRIS shall
[ * ] of the [ * ] with respect to [ * ] under the license;
(h) that ARRIS shall [ * ] as follows: (i) with respect to
[ * ] and are [ * ] of this Agreement on the terms set forth
in [ * ], and (ii) [ * ] with respect to [ * ] which are
commercialized by ARRIS under the license; and (i) [ * ] to any
[ * ] as of the Effective Date. Such license agreement also
shall contain such other commercially reasonable terms as
typically are in license agreements. Upon exercise by ARRIS of
such option, MERCK and ARRIS promptly thereafter shall negotiate
in good faith and enter into such license agreement.
8.3 Termination.
8.3.1 Termination for Cause. This Agreement may be terminated by
notice by either party at any time during the term of this
Agreement:
(a) if the other party is in breach of its material
obligations hereunder by causes and reasons within its
control and has not cured such breach within [ * ]
after receipt of a letter requesting such cure; or
(b) in the event ARRIS materially breaches its obligations
during the Research Program Term, and fails to cure
such breach within [ * ] after notice of such breach,
then MERCK may, in lieu of termination under Subsection
8.3.1(a) above, terminate the Research Program, the
research license granted to ARRIS under Subsection
3.1(b) and all of MERCK's obligations to fund any
further research hereunder, PROVIDED, HOWEVER that all
other rights and obligations of MERCK and ARRIS
hereunder shall be preserved, including without limitation,
the licenses
27
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
retained by MERCK under Subsection 3.1(a) and Section 3.2 of this
Agreement.
(c) In the event ARRIS materially breaches its obligations
at any time during the term of this Agreement and MERCK
either notifies ARRIS of the termination of this
Agreement under Section 8.3.1(a) or initiates
arbitration against ARRIS for breach of this Agreement,
or both, any [ * ] may be [ * ] of this Agreement
[ * ].
8.3.2 Effect of Termination for Bankruptcy.
If this Agreement is terminated by ARRIS or its appointed
trustee based on bankruptcy, all rights and licenses granted
under or pursuant to this Agreement by ARRIS to MERCK are,
and shall otherwise be deemed to be, for purposes of Section
365(n) of the Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101(52) of
the Bankruptcy Code. The parties agree that MERCK, as a
licensee of such rights under this Agreement, shall retain
and may fully exercise all of its rights and elections under
the Bankruptcy Code. The parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or
against ARRIS under the Bankruptcy Code, MERCK shall be
entitled to a complete duplicate of (or complete access to,
as appropriate) any such intellectual property and all
embodiments of such intellectual property upon written
request therefore by MERCK. Such intellectual property and
all embodiments thereof promptly shall be delivered to MERCK
(i) upon any such commencement of a bankruptcy proceeding
upon written request therefore by MERCK, unless ARRIS elects
to continue to perform all of its obligations under this
Agreement or (ii) if not delivered under (i) above, upon the
rejection of this Agreement by or on behalf of ARRIS upon
written request therefore by MERCK.
8.4 Effect of Expiration or Termination. Expiration or
termination of this Agreement shall not relieve the parties
of any obligation accruing prior to such expiration or
termination, and the provisions of Sections 2.6, 2.7, 2.9,
2.10, Sections 3.1 and 3.2 to the extent provided in Article
VIII, 5.6, and Articles I, IV, VII, VIII and IX shall
survive the termination or expiration of the Agreement, with
Article IV continuing in effect for [ * ] thereafter. Any
expiration or early termination of this Agreement shall be
without prejudice to the rights of either party against the
other accrued or accruing under this Agreement prior to
termination, including, without limitation, the obligation
to pay royalties for Licensed Products or Program Compound
sold prior to such termination.
28
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
ARTICLE IX
MISCELLANEOUS
9.1 Force Majeure. Neither party shall be held liable or
responsible to the other party nor be deemed to have
defaulted under or breached this Agreement for failure or
delay in fulfilling or performing any term of this Agreement
when such failure or delay is caused by or results from
causes beyond the reasonable control of the affected party
including, but not limited to, fire, floods, mudslides,
earthquakes, embargoes, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God
or acts, omissions or delays in acting by any governmental
authority or the other party. The affected party shall
notify the other party of such force majeure circumstances
as soon as reasonably practical.
9.2 Excused Performance. The obligation of MERCK with respect
to any Licensed Product under Section 3.3 is expressly
conditioned upon [ * ] relating to the [ * ]. The
obligation of MERCK to develop or market any such Licensed
Product shall be delayed or suspended so long as [ * ].
All judgments as to [ * ] shall be made by [ * ].
9.3 Binding Effect; Assignment. This Agreement shall inure to
the benefit of and be binding upon each party and its
successors and permitted assigns. Except as otherwise
provided in Subsections 9.3(a) and (b), neither party shall,
directly or indirectly, assign this Agreement or any of its
rights or obligations hereunder without the prior written
consent of the other party. Without limiting the generality
of the foregoing, a merger, acquisition or change of control
of a party hereto shall be deemed to be an assignment. As
used in this Section 9.3, change of control shall mean a
transaction pursuant to which a person or group acting in
concert, other than the currently controlling person or
group, immediately after such transaction shall effectively
control election of directors, but shall not include changes
in the identity of owners of a party's publicly held stock
not involving any stock owner achieving ownership of more
than [ * ] of a party's publicly held stock entitled to
vote for the election of directors.
(a) Notwithstanding the foregoing, MERCK may, without
consent, assign this Agreement and its rights and
obligations hereunder to an Affiliate or in connection
with the transfer or sale of all or substantially all
of its assets related to the Licensed Product or the
business, or in the event of its merger or
consolidation or change of control or similar
transaction. Any such assignee shall assume all
obligations of its assignor under the Agreement.
(b) Notwithstanding the foregoing, ARRIS may assign this
Agreement without consent in connection with a merger
of, acquisition of, or sale of
29
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
all or substantially all of the assets of ARRIS, PROVIDED,
HOWEVER, that such assignment shall be [ * ] of the obligations
of ARRIS hereunder, and further that if such merger, acquisition
or sale of assets [ * ], where ARRIS is not the surviving
entity, then such assignment shall be subject to Section 9.4
below. In the event of any such assignment by ARRIS hereunder,
the licenses granted MERCK hereunder shall not cover any
intellectual property of such assignee not previously Controlled
by ARRIS existing prior to the date of such assignment.
9.4 Consequences of Certain Assignments by ARRIS. In the event
that ARRIS, during the Research Program Term, assigns this
Agreement as permitted in Section 9.3(b) [ * ], ARRIS,
immediately upon its ability [ * ] such merger,
acquisition or sale, shall [ * ] merger, acquisition or
sale and MERCK may, at its choice, on written notice to such
assignee given at any time within 30 days of such
assignment, [ * ] shall be [ * ] the assignment of this
Agreement:
(a) [ * ] and any further obligation [ * ] research
efforts under the Research Program. After such
[ * ], PROVIDED HOWEVER, that the [ * ] as
specified under Section [ * ] shall be [ * ] shall
be equal to the number of days in the Research Program
Term from the Effective Date to the [ * ];
(b) [ * ], and immediately thereafter such assignee shall
[ * ] hereunder;
(c) possession, during the Research Program Term, of the
[ * ] and under [ * ] and the [ * ] under this
Agreement. The [ * ] during the Research Program
Term to MERCK Affiliates and to third party
sublicensees; and
30
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
(d) possession of a [ * ] at the end of the Research
Program Term.
(e) For purposes of Subsections 9.4 (a), (c) and (d) above
and Article I, the "Research Program Term" shall have
the period of time such term had under the provisions
of Section 2.8 just prior to the assignment of the
Agreement by ARRIS.
Upon any such assignment, and whether or not [ * ] in
Subsections 9.4(a) through (d) above, MERCK shall retain all
of its rights under this Agreement, including without
limitation the licenses granted to MERCK in Sections 3.1(a)
and 3.2 of this Agreement.
9.5 Severability. If one or more of the provisions contained in
this Agreement are held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of
the remaining provisions shall not be affected or impaired
thereby, unless the absence of the invalidated provision(s)
adversely affects the substantive rights of the parties.
The parties shall in such case use their best efforts to
replace the invalid, illegal or unenforceable provision(s)
with valid, legal and enforceable provision(s) which,
insofar as practical, implement the purposes of this
Agreement.
9.6 Use of Names. Neither party may use the names of the other
party or those of its Affiliates, sublicensees, employees,
agents or consultants or any of their trademarks, names,
logotypes or symbols without the prior written consent of
the other party.
9.7 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and
sufficient if delivered personally, sent by telecopier (and
promptly confirmed by personal delivery, registered or
certified mail or overnight courier), sent by
nationally-recognized overnight courier or sent by
registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to ARRIS, to:
Arris Pharmaceutical Corporation
385 Oyster Point Boulevard, Suite 3
South San Francisco, California 94080
Attention: President, Chief Executive Officer
Telecopier No.: 415/829-1067
31
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
with a copy to: Cooley Godward LLP
3000 El Camino Real
Palo Alto, California 94306
Attention: Robert L. Jones, Esq.
Telecopier No.: 415/857-0603
if to MERCK, to: Merck & Co., Inc.
One Merck Drive
P.O. Box 100
Whitehouse Station, NJ 08889-0100
Attention: Office of Secretary
Telecopier No.: 908/735-1246
with a copy to: Attention: Office of Assistant General Counsel
Telecopier No.: 908/735-1226
or to such other address as the party to whom notice is to
be given may have furnished to the other party in writing in
accordance herewith. Any such communication shall be deemed
to have been given when delivered if personally delivered or
sent by telecopier on a business day, on the business day
after dispatch if sent by nationally-recognized overnight
courier and on the third business day following the date of
mailing if sent by mail.
9.8 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
Jersey and the United States without reference to any rules
of conflict of laws or renvoi.
9.9 Arbitration. Any disputes arising between the parties
relating to, arising out of or in any way connected with
this Agreement or any term or condition hereof, or the
performance by either party of its obligations hereunder,
whether before or after termination of the Agreement, shall
be finally resolved by binding arbitration. Whenever a
party shall decide to institute arbitration proceedings, it
shall give written notice to that effect to the other party.
The party giving such notice shall refrain from instituting
the arbitration proceedings for a period of [ * ]
following such notice. During such period, the parties
shall make good faith efforts to amicably resolve the
dispute without arbitration. Any arbitration hereunder
shall be conducted under the rules of the American
Arbitration Association. Each such arbitration shall be
conducted by a panel of three arbitrators: one arbitrator
shall be appointed by each of MERCK and the ARRIS and the
third shall be appointed by the American Arbitration
Association. Any such arbitration shall be held in New
York, New York. The arbitrators shall have the authority to
grant specific performance. Judgment upon the award so
rendered may be entered in any court having jurisdiction or
application may be made to such court for judicial
acceptance of any award and an order of enforcement, as the
case may be. In no event shall a demand for arbitration be
made after the date when institution
32
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
of a legal or equitable proceeding based on such claim, dispute or other
matter in question would be barred by the applicable statute
of limitations.
9.10 Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject
matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are
expressly merged in and made a part of this Agreement. This
Agreement may be amended, or any term hereof modified, only
by a written instrument duly executed by both parties
hereto.
9.11 Headings. The captions to the Articles, Sections and
Subsections of this Agreement are not a part of the
Agreement, but are merely guides or labels to assist in
locating and reading the Articles, Sections and Subsections.
9.12 Independent Contractors. ARRIS and MERCK shall be
independent contractors and the relationship between them
shall not constitute a partnership, joint venture or agency.
Neither party shall have the authority to make any
statements, representations or commitments of any kind, or
to take any action, which shall be binding on the other,
without the prior written consent of the other party.
9.13 Waiver. The waiver by a party of any right under this
Agreement or of the other party's failure to perform or
breach shall not be a waiver of any other right, failure or
breach whether of a similar nature or otherwise.
9.14 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of its Effective Date.
MERCK & CO., INC. ARRIS PHARMACEUTICAL CORPORATION
BY: ________/s/______________ BY: ____/s/_____________________
Raymond V. Gilmartin John P. Walker
TITLE: Chairman, President TITLE: President &
and Chief Executive Chief Executive Officer
Officer
DATE: November 6, 1996 DATE: November 6, 1996
33
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
ATTACHMENT 2.1
RESEARCH PROGRAM
1. [ * ]
[ * ]
2. [ * ]
[ * ]
34
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
3. [ * ]
4. [ * ]
5. [ * ]
35
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
6. [ * ]
7. [ * ]
a. [ * ]
b. [ * ]
c. [ * ]
36
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
APPENDIX A-1
[ * ]
37
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
APPENDIX A-2
[ * ]
38
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
APPENDIX B
[ * ]
[ * ]
39
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
APPENDIX C
[ * ]
40
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.