CONFIDENTIAL TREATMENT REQUEST EXECUTION COPY
Exhibit 10.62
PORTIONS OF THIS EXHIBIT WERE OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE
ACT OF 1934. SUCH PORTIONS ARE MARKED BY ASTERISKS.
RESEARCH COLLABORATION AND LICENSE AGREEMENT
between
GENOME THERAPEUTICS CORP.
and
AMGEN INC.
CONFIDENTIAL
PORTIONS OF THIS EXHIBIT WERE OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT
FILED WITH THE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE
ACT OF 1934. SUCH PORTIONS ARE MARKED BY ASTERISKS.
RESEARCH COLLABORATION AND LICENSE AGREEMENT
This Research Collaboration and License Agreement (this "Agreement") is
effective as of December __, 2002 (the "Effective Date") by and between Genome
Therapeutics Corp. ("GENE"), 100 Beaver Street, Waltham, Massachusetts 02453 and
Amgen Inc. ("Amgen"), One Amgen Center Drive, Thousand Oaks, California
91320-1799. Amgen and GENE are sometimes referred to herein individually as a
"Party" and collectively as the "Parties."
WITNESSETH:
WHEREAS, GENE is engaged in the discovery of novel genes related to high
bone density;
WHEREAS Amgen is engaged in the discovery, development and
commercialization of human therapeutics; and
WHEREAS GENE and Amgen desire to enter into a collaborative relationship
to discover and develop human therapeutics for the treatment of osteoporosis and
other diseases, on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" means any corporation, company, partnership, joint venture
and/or firm which controls, is controlled by, or is under common
control with a Party. For purposes of this definition, "control" shall
be presumed to exist if one of the following conditions is met: (a) in
the case of corporate entities, direct or indirect ownership of at
least fifty percent (50%) of the stock or shares having the right to
vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty
percent (50%) of the equity interest with the power to direct the
management and policies of such non-corporate entities.
1.2 "Amgen Background Know-How" means *****.
1
1.3 "Amgen Background Patent Rights" means all Patent Rights Controlled by
Amgen as of the Effective Date or during the term of this Agreement
that claim Amgen Background Know-How.
1.4 "Amgen Technology" means, collectively, Amgen Background Patent
Rights, Amgen Background Know-How, Amgen Program Patent Rights, Amgen
Program Know-How and Amgen's interest in the Joint Patent Rights and
Joint Know-How.
1.5 "Calendar Quarter" means, with respect to the first such Calendar
Quarter, the period beginning on the Effective Date and ending on
December 31, 2002, and thereafter each successive period of three (3)
consecutive calendar months ending on March 31, June 30, September 30
or December 31.
1.6 "Calendar Year" means each successive period of twelve (12) months
commencing on January 1 and ending on December 31.
1.7 "Change of Control of GENE" means the acquisition, directly or
indirectly, by a Competitive Entity of fifty percent (50%) or more of
the shares of GENE's voting capital stock, the holders of which have
general voting power under ordinary circumstances to elect at least a
majority of GENE's Board of Directors or equivalent body.
1.8 "Clinical Milestone Payments" means those amounts payable by Amgen to
GENE pursuant to Section 8.5.
1.9 "Co-Detail" means the employment by Amgen and GENE of Representatives
to jointly Detail the same Product under the same Product Trademark in
the United States and/or Canada (as appropriate), under the
coordination and direction of Amgen.
1.10 "Commercialization" or "Commercialize" means any and all activities
(whether before or after Regulatory Approval) directed to the
marketing, Detailing and promotion of a Product after Regulatory
Approval for commercial sale has been obtained and shall include *****
When used as a verb, "Commercializing" means to engage in
Commercialization and "Commercialized" shall have a corresponding
meaning
1.11 "Commercialization Expense" has the meaning set forth in Exhibit X.
1.12 "Commercialization Plan" means the summary plan (which shall include a
summary strategy and proposed timelines), and any updates thereto, to
be prepared by Amgen pursuant to Section 6.2 for the Commercialization
of any Product in the United States and/or Canada (as appropriate).
1.13 "Commercially Reasonable Efforts" means a level of efforts and
resources consistent with good business practice and standards that a
company in the research-
2
based pharmaceutical industry would devote to research, develop or
commercialize (as appropriate) a product for a similar use and of
similar market potential at a similar stage in its product life as
that of a Product, *****. Commercially Reasonable Efforts shall be
determined on a country-by-country basis for a particular Product, and
it is anticipated that the level of effort will change over time,
reflecting changes in the status of the Product and the country
involved.
1.14 "Competitive Entity" means a company that at the time of a Change of
Control of GENE *****.
1.15 "Confidential Information" means (a) all tangible embodiments of
Information produced or developed by either Party in the Research
Program, and (b) all Information received by either Party (the
"receiving Party") from the other Party (the "disclosing Party")
pursuant to this Agreement, other than that portion of such
Information which: (a) is publicly disclosed by the disclosing Party,
either before or after it becomes known to the receiving Party; (b)
was known to the receiving Party, without obligation to keep it
confidential, prior to when it was received from the disclosing Party,
as shown by written documentation; (c) is subsequently disclosed to
the receiving Party by a Third Party lawfully in possession thereof
without obligation to keep it confidential; (d) has been publicly
disclosed other than by the disclosing Party and without breach of an
obligation of confidentiality with respect thereto; or (e) has been
independently developed by the receiving Party without the aid,
application or use of Confidential Information, as shown by written
documentation.
1.16 "Contract Year" means the period beginning on the Effective Date and
ending on the first anniversary thereof, and each succeeding twelve
(12) month period thereafter.
1.17 "Control" or "Controlled" means with respect to any (a) Material or
Information or (b) intellectual property right, in each case the
possession (whether by ownership, license or other right, other than
pursuant to this Agreement) by a Party or its Affiliates of the
ability to grant the other Party access and/or a license or
(sublicense) to such Material or Information or intellectual property
rights as provided for herein without violating the terms (in
existence at the time of such Party or its Affiliates acquiring such
ownership, license or other right) of any agreement or other
arrangement between such Party (or its Affiliates) and any Third
Party.
1.18 "Creighton License" means that certain agreement between GENE and
Creighton University, effective April 3, 1997, and any amendments
thereto.
1.19 "Detail" *****.
1.20 "Development" or "Develop" means, with respect to a Product, all
clinical and other activities undertaken to obtain Regulatory Approval
of such Product, in accordance with this Agreement, after the first
filing of an IND for such Product and prior to Regulatory Approval of
such Product. These activities shall include *****. When
3
used as a verb, "Developing" means to engage in Development and
"Developed" shall have a corresponding meaning.
1.21 "Development Costs" means (a) with respect to Amgen, the cost of any
and all activities performed by Amgen and specifically attributable to
the Development of a Product consistent with the Development Plan,
including, without limitation: *****.
1.22 "Development Plan" means the summary plan (which shall include a
summary strategy and proposed timelines), and any updates thereto, to
be prepared by Amgen for the Development of any indication for a
Product pursuant to Sections 4.2, 4.3 and 4.5 including, without
limitation, the research, clinical and regulatory activities required
to obtain Regulatory Approval(s) in the Territory.
1.23 "Diligent Inquiry" has the meaning set forth in Section 8.4(a).
1.24 "Drug Approval Application" means an application for any Regulatory
Approval required before commercial sale or use of a Product as a drug
or biologic or to treat a particular indication in a regulatory
jurisdiction, including: (a) (i) a Biologics License Application
("BLA") pursuant to 21 C.F.R. 601.2 (or any successor application or
procedure) or a New Drug Application ("NDA") pursuant to 21 C.F.R.
314.5 (or any successor application or procedure) submitted to the
FDA; and (ii) any counterpart of a U.S. BLA or NDA in any other
country in the Territory; and (b) all supplements and amendments that
may be filed with respect to the foregoing.
1.25 "Early Development Costs" means the Development Costs associated with
Early Stage Development of a Product for an indication. Early
Development Costs include *****. Early Development Costs also include
*****.
1.26 "Early Stage Development" means, with respect to any indication for a
Product, all post-IND filing Development commencing on the first
filing of an IND for such indication and continuing up to and
including the completion of Phase II Studies or commencement of
Pivotal Studies, whichever is earlier for such indication.
1.27 "Effective Date" means the first date set forth hereinabove.
1.28 "Fair Market Value" means the average closing stock price over the
period of time ***** for which the equity is being issued.
1.29 "FDA" means the United States Food and Drug Administration and any
successor thereto.
1.30 "Field of Use" means all uses, *****.
1.31 "First Commercial Sale" means, with respect to any Product, the first
sale for end-use or consumption of such Product in a country after the
governing health regulatory authority of such country has granted
Regulatory Approval. Sale to an Affiliate or
4
sublicensee will not constitute a First Commercial Sale unless the
Affiliate or sublicensee is the last entity in the distribution chain
of the Product.
1.32 "Force Majeure" means any occurrence beyond the reasonable control of
a Party that prevents or substantially interferes with the performance
by the Party of any of its obligations hereunder, if such occurs by
reason of any act of God, flood, fire, explosion, earthquake,
breakdown of plant, shortage of critical equipment, loss or
unavailability of manufacturing facilities or material, strike,
lockout, labor dispute, casualty or accident, or war, revolution,
civil commotion, acts of public enemies, blockage or embargo, or any
injunction, law, order, proclamation, regulation, ordinance, demand or
requirement of any government or of any subdivision, authority or
representative of any such government, inability to procure or use
materials, labor, equipment, transportation or energy sufficient to
meet manufacturing needs without the necessity of allocation, or any
other cause whatsoever, whether similar or dissimilar to those above
enumerated, beyond the reasonable control of such Party, if and only
if the Party affected shall have used reasonable efforts to avoid such
occurrence and to remedy it promptly if it shall have occurred.
1.33 "FTE" means the equivalent of the work of one employee working full
time on the Research Program or Development of a Product *****. No one
person shall be permitted to account for more than one FTE.
1.34 "FTE Cost" means, for any Calendar Quarter, the FTE Rate multiplied by
the sum of the number of days (calculated by adding the full and
partial percentage of days) actually spent in that Calendar Quarter by
FTEs of a Party (as per their time sheets) working directly on the
Research Program or Development of a Product under the terms of this
Agreement and dividing the result thereof *****.
1.35 "FTE Rate" means the amount to be charged per FTE. ***** subject to
adjustment on an annual basis as of January 1 of each year beginning
in 2004 by a factor which reflects changes in the Consumer Price Index
as reported as of January 1 in each applicable year when compared to
the comparable statistic for January 1 of the preceding year.
1.36 "GAAP" means United States generally accepted accounting principles.
1.37 "GENE Background Know-How" means *****.
1.38 "GENE Background Patent Rights" means all Patent Rights Controlled by
GENE as of the Effective Date or during the term of this Agreement
that claim GENE Background Know-How.
1.39 *****
1.40 *****
5
1.41 "GENE Technology" means, collectively, ***** GENE Background Know How,
GENE Program Patent Rights, GENE Program Know-How and GENE's interest
in the Joint Patent Rights and Joint Know-How.
1.42 "IND" means (i) an Investigational New Drug Application (as defined in
the U.S. Federal Food, Drug and Cosmetic Act, as amended from time to
time, and the regulations promulgated thereunder) that is required to
be filed with the FDA before beginning clinical testing of a Product
in human subjects, or any successor application or procedure and (ii)
any counterpart of a U.S. Investigational New Drug Application in any
other country in the Territory.
1.43 "Information" means all tangible and intangible techniques,
technology, practices, trade secrets, inventions (whether patentable
or not), methods, knowledge, know-how, conclusions, skill, experience,
test data and results (including pharmacological, toxicological and
clinical test data and results), analytical and quality control data,
results or descriptions, software and algorithms.
1.44 Joint Know-How means all Information and Materials characterized,
conceived, developed, derived, discovered, generated or identified
jointly by employees of or consultants to GENE and employees of or
consultants to Amgen in the conduct of the Research Program.
1.45 "Joint Patent Rights" means Patent Rights that are Controlled during
the term of this Agreement by Amgen and GENE and claim Joint Know-How.
1.46 "Joint Research Committee" means the committee formed pursuant to
Section 2.1.
1.47 "Joint Steering Committee" means the committee formed pursuant to
Section 2.4.
1.48 "Large Molecule" means a *****.
1.49 "Large Molecule Manufacturing Technology" means *****.
1.50 "Late Development Costs" means the Development Costs associated with
Late Stage Development of a Product for an indication, other than the
Development Costs explicitly included in Early Development Costs.
1.51 "Late Stage Development" means, with respect to any indication for a
Product, all Development following the completion of Phase II Studies
or commencement of Pivotal Studies, whichever is earlier for such
indication, up to and including filing of the first Drug Approval
Application for such indication in any jurisdiction and including any
supplementary Development necessary or required by a Regulatory
Authority (a) in order to obtain the first Regulatory Approval for
such indication; or (b) to satisfy any conditions of the first
Regulatory Approval in that jurisdiction.
6
1.52 "Losses" means liabilities, damages, expenses, costs and/or losses,
including without limitation reasonable legal expenses and attorneys'
fees for outside counsel.
1.53 "Materials" has the meaning provided in Section 3.7.
1.54 "Major Market Country" shall mean the United States, United Kingdom,
Italy, Germany, France, Japan, Canada and Spain.
1.55 "Net Sales" has the meaning set forth in Exhibit X.
1.56 "Patent Rights" means (a) valid and enforceable United States patents,
re-examinations, reissues, renewals, extensions and term restorations,
and foreign counterparts thereof, and (b) pending applications for
United States patents including, without limitation, provisional
applications, continuations, continuations-in-part, divisional and
substitute applications including, without limitation, inventors'
certificates, and foreign counterparts thereof.
1.57 "Phase I Study" means a clinical trial that is designed to determine
the metabolism, pharmacologic actions (including pharmacodynamics) and
pharmacokinetics of a drug in humans, the tolerability and any
potential side effects of the drug associated with increasing doses
and that satisfy the requirements of 21 CFR 312.21(a), or its
successor regulation, or its equivalent in any other jurisdiction.
1.58 "Phase II Study" means a clinical trial that is designed to establish
the safety and preliminary efficacy of a drug for its intended use,
and to define warnings, precautions and adverse reactions that are
associated with the drug in the dosage range to be prescribed and that
satisfy the requirements of 21 CFR 312.21(b) (or its successor
regulation), or its equivalent in any other jurisdiction.
1.59 Pivotal Study(ies)" means those clinical trials on sufficient numbers
of patients that, if the defined end-points are met, are designed (and
agreed to by the FDA, or other Regulatory Authorities in the
Territory) based upon existing data in the same patient population as
of the start of the trial to definitively establish that a drug is
safe and efficacious for its intended use, and to define warnings,
precautions and adverse reactions that are associated with the drug in
the dosage range to be prescribed, and which provide pivotal data
supporting Regulatory Approval of such drug or label expansion of such
drug and that satisfy the requirements of 21 CFR 321.21(c), or its
successor regulation, or an equivalent foreign clinical trial.
1.60 "Product Contribution" has the meaning set forth in Exhibit X.
1.61 "Product(s)" means a Small Molecule pharmaceutical(s) and/or a Large
Molecule pharmaceutical(s) *****
1.62 "Product Trademark(s)" means any trademarks and trade names, whether
or not registered, and any trademark applications, renewals,
extensions or modifications
7
thereto in the Territory together with all goodwill associated
therewith, trade dress and packaging which are applied to or used with
Products or any promotional materials relating thereto.
1.63 "Program Know-How" means all Information and Materials characterized,
conceived, developed, derived, discovered, generated or identified by
employees of or consultants to either Party in the conduct of the
Research Program. Amgen Program Know-How means that portion of Program
Know-How characterized, conceived, developed, derived, discovered,
generated or identified solely by employees of or consultants to
Amgen. GENE Program Know-How means that portion of Program Know-How
characterized, conceived, developed, derived, discovered, generated or
identified solely by employees of or consultants to GENE.
1.64 "Program Patent Rights" means all Patent Rights that are Controlled
during the Agreement by Amgen or GENE and claim Program Know-How. In
particular, Amgen Program Patent Rights means that portion of Program
Patent Rights Controlled by Amgen and GENE Program Patent Rights means
that portion of Program Patent Rights Controlled by GENE.
1.65 "Regulatory Approval" means any approvals (including supplements,
amendments, pre- and post-approvals and price approvals), licenses,
registrations or authorizations (including any designations of an
indication for a Product as an "Orphan Product" under the Orphan Drug
Act), howsoever called, of any Regulatory Authority, which are
necessary for the distribution, importation, exportation, manufacture,
production, use, storage, transport or clinical testing and/or sale of
a Product in a regulatory jurisdiction. Regulatory Approval shall not
include any site license for an Amgen manufacturing facility.
1.66 "Regulatory Authority" means the FDA or any counterpart of the FDA
outside the United States, or other national, supra-national,
regional, state or local regulatory agency, department, bureau,
commission, council or other governmental entity with authority over
the distribution, importation, exportation, manufacture, production,
use, storage, transport or clinical testing and/or sale of a Product.
1.67 "Regulatory Filings" means, collectively, INDs, BLAs, establishment
license applications (ELAs) and drug master files (DMFs), applications
for designation of a Product as an "Orphan Product(s)" under the
Orphan Drug Act or any other similar filings (including any foreign
equivalents and further including any related correspondence and
discussions), and all data contained therein, as may be required by
the FDA or equivalent foreign Regulatory Authorities for the
Development, manufacture or Commercialization of a Product.
1.68 "Regulatory Plan" means the list of all Regulatory Filings and
Regulatory Approvals regarding Products, and any updates thereto.
1.69 "Research Field" means (i) *****
8
1.70 "Research Plan" means the written plan for conducting the Research
Program attached hereto as Exhibit 1, as amended from time to time by
the Joint Research Committee.
1.71 "Research Program" means the program of collaborative research to be
carried out by the Parties pursuant to Article 3 and the activities
related thereto as described in the Research Plan.
1.72 *****
1.73 "Royalty Term" means, in the case of any Product, and on a
country-by-country basis, the period of time commencing on the First
Commercial Sale of such Product and ending upon the later of *****.
1.74 "Small Molecule" means a *****.
1.75 "Territory" means worldwide.
1.76 "Third Party(ies)" means any entity(ies) other than Amgen and its
Affiliates or GENE and its Affiliates.
ARTICLE 2
GOVERNANCE
2.1 Joint Research Committee. Promptly after the Effective Date, the
Parties will form a Joint Research Committee ("JRC") comprised of
***** representatives each of Amgen and GENE. ***** A reasonable
number of additional representatives of a Party may attend meetings of
the JRC in a non-voting capacity. The JRC will meet at least
quarterly, on reasonable written notice, during the Research Program
(in person, by teleconference or otherwise). If in person, such
meetings shall alternate between the offices of the Parties, with the
first meeting at the offices of Amgen. *****. Promptly following the
Effective Date, the JRC shall hold an organizational meeting to
establish the operational requirements of the JRC, which shall include
the methods whereby decisions of the JRC are recorded.
2.2 Joint Research Committee Responsibilities. The JRC generally shall
have the responsibility of managing, directing and coordinating the
Research Program, including, without limitation, the following
responsibilities:
a. managing and monitoring the progress and results of the Research
Program and the Parties' diligence in carrying out their
responsibilities thereunder;
b. determining future Research Program activities to be conducted
under the Research Plan;
9
c. allocating responsibility for the various Research Program
activities between the Parties;
d. *****;
e. reviewing and approving modifications of the Research Plan from
time to time *****; and
f. *****.
2.3 Excepted Items. Excepted Items are the following:
a. *****
b. *****
c. *****
d. *****
*****.
2.4 Joint Steering Committee. Promptly after the Effective Date, GENE and
Amgen shall establish a Joint Steering Committee ("JSC") comprised of
***** members from each of GENE and Amgen. Members from each of the
Parties will include the respective Senior Vice Presidents of Research
of each of the Parties or other Vice Presidents appointed by such
respective Senior Vice Presidents. The JSC shall be responsible for
managing the relationship between the Parties *****. Each member of
the JSC will have equal voting authority and the agreement of the
majority of the members of the JSC shall be required for all matters
considered, except for any disagreements arising under Section 2.3.c.
in which instances *****. The JSC shall meet at least once every *****
on reasonable written notice in person, by teleconference or as
mutually agreed by the JSC, or, in the event of a disagreement between
members of the JRC with respect to Excepted Items or other matters
referred by the Parties to the JSC to resolve, within ***** following
notice by the chair of the JRC of such disagreement. *****.
2.5 Dispute Resolution. If the JSC is unable to resolve any disagreement
***** within ***** business days of notification of such disagreement
to the JSC, the matter shall be referred to *****. If such persons
cannot resolve such matter within ***** of commencing such
negotiations, then the matter shall be referred within *****, then
either Party may at any time thereafter pursue any legal or equitable
remedy available to it. Notwithstanding the above, either Party shall
be entitled at all times and without delay to seek equitable relief.
10
ARTICLE 3
COLLABORATION RESEARCH
3.1 Conduct of Research Program. The Parties hereby agree to conduct the
Research Program in accordance with the terms of this Agreement with
the goal of identifying one or more Small Molecules and/or one or more
Large *****. The Parties shall conduct the studies outlined in the
Research Plan, as set forth in attached Exhibit 1.
3.2 Performance Standards. GENE shall *****. Amgen will *****. Each Party
will conduct its activities under the Research Program in good
scientific manner and in compliance in all material respects with
applicable laws and regulations. Each Party will prepare and maintain
complete and accurate written records with respect to its activities
under the Research Plan consistent with industry standards including,
for purposes of patent and regulatory matters, prompt signing and
corroboration of laboratory notebooks and conception documents.
3.3 Research Reports. Each Party will keep the other Party fully informed
as to all discoveries and technical developments (including, without
limitation, any inventions) made in the course of performing
activities under the Research Program. In particular, prior to each
JRC meeting GENE and Amgen each will prepare and distribute to all
members of the JRC (no later than five (5) business days prior to each
such JRC meeting) a reasonably detailed written summary report setting
forth the results and progress of performance of the Research Program
since the last report. The format and content of such report shall be
determined by the JRC. The information contained in the report shall
be accurate in the reporting Party's best scientific judgment.
3.4 GENE Researchers. Amgen and GENE acknowledge the importance of having
personnel suitably qualified and devoted full-time to work in the
Research Program. Accordingly, in order to maximize the effective
conduct of the Research Program, the Parties shall ***** of their
respective researchers conducting the Research Program and GENE shall
devote suitably qualified personnel to the Research Program who *****.
3.5 Employee Obligations. Prior to beginning work on the Research Program
and/or being given access to Confidential Information, each employee,
consultant or agent of GENE and Amgen shall have signed or shall be
required to sign a non-disclosure and invention assignment agreement
pursuant to which each such person shall agree to comply with all of
the obligations of GENE or Amgen under this Agreement, as appropriate,
substantially including: (a) promptly reporting any invention,
discovery, process or other intellectual property right; (b) assigning
to GENE or Amgen, as appropriate, all of his or her right, title and
interest in and to any such invention, discovery, process or other
intellectual property right; (c) cooperating in the preparation,
filing, prosecution, maintenance and enforcement of any patent rights;
(d) performing all acts and signing, executing, acknowledging and
delivering any and all papers, documents and instruments required for
effecting the obligations and
11
purposes of this Agreement and (e) abiding by the obligations of
confidentiality and non-use set forth in this Agreement. It is
understood and agreed that any such non-disclosure and invention
assignment agreement need not be specific to this Agreement. The
Parties agree that each such employee, consultant or agent may sign
the respective Party's standard form of non-disclosure and invention
assignment agreement, provided that such standard form substantially
contains the requirements set forth in subparts (a) to (e) above.
3.6 Technical Assistance. In addition to other assistance explicitly set
forth in this Agreement, during the term of this Agreement, GENE shall
provide Amgen with reasonable technical assistance relating to the use
of GENE Background Know-How, *****, GENE Program Know-How and Joint
Know-How solely to the extent permitted under the license(s) granted
to Amgen. In addition, during the term of this Agreement, GENE shall
make its employees, consultants and agents reasonably available upon
reasonable notice during normal business hours at GENE's facilities to
consult with Amgen on issues relating to any aspect of the subject
matter of this Agreement and in connection with any request from any
Regulatory Authority, including those relating to regulatory,
scientific and technical issues. If such consultation occurs after the
completion of the Research Program, Amgen will pay GENE's reasonable
costs in providing such consultation unless *****.
3.7 Materials Transfer. In order to facilitate the Research Program,
either Party may provide to the other Party certain materials,
including, without limitation, biological materials, chemical
compounds, screens, databases, animal models, cell lines, cells,
nucleic acids, receptors and reagents (collectively, "Materials") for
use by the other Party in furtherance of the Research Program. All
such Materials delivered to the other Party shall remain the sole
property of the supplying Party and, except to the extent permitted by
applicable law and permitted by the licenses granted hereunder, shall
be used only in furtherance of the Research Program in accordance with
this Agreement and remain solely under the control of the other Party,
shall not be used or delivered to or for the benefit of any Third
Party without the prior written consent of the supplying Party, and
shall not be used in research or testing involving human subjects.
Except as expressly set forth in this Agreement (including, without
limitation, Section 14.3), THE MATERIALS ARE PROVIDED "AS IS" AND
WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF
FITNESS FOR ANY PARTICULAR PURPOSE.
3.8 Materials for Subcontractors. Notwithstanding the previous paragraph,
without the prior approval of GENE, Amgen may transfer Materials to
any Third Party engaged as a subcontractor pursuant to Section 17.7;
provided however, that any such subcontractor shall be bound by
conditions of confidentiality and non-use at least equivalent to those
herein, including that such Materials shall not be transferred to
another Third Party and that any such unused Materials shall be
returned or destroyed upon completion of the activity for which such
Materials were provided, and that
12
Amgen shall be responsible for the performance of each such
subcontractor in fulfilling Amgen's obligation under the Research
Plan.
ARTICLE 4
DEVELOPMENT OF PRODUCTS
4.1 Responsibility. Amgen shall have the sole right and responsibility for
all aspects of Developing Products and obtaining regulatory approval
of such Products in the Territory, including making all strategic and
tactical decisions with respect thereto, undertaking all necessary
Development and establishing the methods and means by which it
performs such activities under this Agreement (including the
management of permitted subcontractors, pursuant to Section 17.7), and
shall ***** in doing so.
4.2 Early Stage Contribution Option. Amgen shall promptly notify GENE in
writing when it files the first IND for a Product, which notice will
include a Development Plan for Early Stage Development together with
Amgen's non-binding, ***** estimate, in ***** detail, of the
Development Costs of such Development Plan. Within ***** days of
GENE's receipt of such notice from Amgen, GENE shall notify Amgen in
writing whether it elects to contribute to Early Development Costs for
the first indication of that Product and if so, at what level (GENE's
"Early Contribution Level"). GENE shall have the option to contribute
***** of such Early Development Costs. During such *****, and upon
GENE's request, Amgen shall promptly provide GENE with an explanation
in reasonable detail of the Development Plan *****. The Parties hereby
agree that such Development Plan and estimate of such Development
Costs as well as the explanation and information-providing obligations
of Amgen set forth in this Section 4.2 are not subject to the dispute
resolution mechanism set forth in Sections 2.4 and 2.5.
4.3 Late Stage Contribution Option. Upon completion of Early Stage
Development, and only if GENE *****, Amgen shall promptly notify GENE
in writing that Amgen intends to commence Late Stage Development for
such Product, which notice shall include a Development Plan for Late
Stage Development together with Amgen's non-binding, ***** estimate,
in ***** detail, of the Development Costs of such Development Plan.
Within ***** days of GENE's receipt of such notice from Amgen, GENE
shall notify Amgen in writing whether GENE elects to contribute to
Late Development Costs for such indication and, if so, at what level
(GENE's "Late Contribution Level"). *****. During such *****, and upon
GENE's request, Amgen shall promptly provide GENE with an explanation
in reasonable detail of the Development Plan *****. The Parties hereby
agree that such Development Plan and estimate of such Development
Costs as well as the explanation and information-providing obligations
of Amgen set forth in this Section 4.3 are not subject to the dispute
resolution mechanism set forth in Sections 2.4 and 2.5. *****.
4.4 Differential Payment. *****
13
4.5 Additional Indications.
a. Early Stage Contribution Option. After filing the first IND for
a Product, Amgen may, at its sole discretion, file additional
IND's for the same Product for additional indications. If GENE
*****, on filing such an additional IND, Amgen shall notify GENE
in writing of such filing, which notice will include a
Development Plan for Early Stage Development for such indication
together with Amgen's non-binding, ***** estimate, in *****
detail, of the Development Costs of such Development Plan.
Within ***** days of GENE's receipt of such notice from Amgen,
GENE shall notify Amgen in writing whether it elects to
contribute to Early Development Costs for the additional
indication of that Product and if so, at what level. During such
*****, and upon GENE's request, Amgen shall promptly provide
GENE with an explanation in reasonable detail of the Development
Plan *****. The Parties hereby agree that such Development Plan
and estimate of such Development Costs as well as the
explanation and information-providing obligations of Amgen set
forth in this Section 4.5.a. are not subject to the dispute
resolution mechanism set forth in Sections 2.4 and 2.5. GENE
shall have the option to contribute to Early Stage Development
for such additional indications at *****.
b. Late Stage Contribution Option. Upon completion of Early Stage
Development for an additional indication for a Product, and only
if GENE has elected to contribute to Early Development Costs for
that indication and has not elected a ***** Late Contribution
Level with respect to an earlier indication for such Product,
Amgen shall promptly notify GENE in writing that Amgen intends
to commence Late Stage Development for such indication, which
notice shall include a Development Plan for Late Stage
Development for such indication together with Amgen's
non-binding, ***** estimate, in ***** detail, of the Development
Costs of such Development Plan. Within ***** days of GENE's
receipt of such notice from Amgen, GENE shall notify Amgen in
writing whether GENE elects to contribute to Late Development
Costs for such indication and, if so, at what level. During such
*****, and upon GENE's request, Amgen shall promptly provide
GENE with an explanation in reasonable detail of the Development
Plan *****. The Parties hereby agree that such Development Plan
and estimate of such Development Costs as well as the
explanation and information-providing obligations of Amgen set
forth in this Section 4.5.b. are not subject to the dispute
resolution mechanism set forth in Sections 2.4 and 2.5. *****.
c. Calculation of Development Contribution Royalty. For the
purposes of calculating the Development Contribution Royalty
pursuant to Section 8.6.b in the case of multiple indications
for a Product, the following shall apply:
i. *****
aa. *****
14
ab. *****
ac. *****
ad. *****
ae. *****
af. *****
ii. *****
aa. *****
ab. *****
ac. *****
ad. *****
ae. *****
iii. *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
d. Formulations and Presentations. The Parties hereby agree that,
for each indication of a Product, GENE's Early Contribution
Level or Late Contribution Level, as the case may be, shall
remain the same for any presentation or formulation of a Product
containing the same Small Molecule or Large Molecule.
4.6 Multiple Products Contribution. If more than one Product is developed,
GENE shall have the option to contribute to Development Costs *****.
4.7 Up-dating of Development Plan. If GENE contributes to Early
Development Costs and/or Late Development Costs for a Product, Amgen
shall (i) provide GENE with an update of the Development Plan for such
Product ***** (which shall not be less than annually), together with
Amgen's revised non-binding, ***** estimate of Development Costs and
(ii) provide GENE, on an annual basis, with a written summary of all
clinical data generated by Amgen with respect to Products.
15
4.8 Sharing of Development Costs. All Development Costs incurred by Amgen
and GENE *****. By way of example, should *****.
4.9 Quarterly Reconciliation of Development Costs. Within ***** days
following the end of each Calendar Quarter, Amgen shall submit to GENE
a written report setting forth in reasonable detail its Development
Costs for such Calendar Quarter. Within ***** days following the end
of each Calendar Quarter, GENE shall submit to Amgen a written report
setting forth in reasonable detail its Development Costs for such
Calendar Quarter. Within ***** days following the end of each Calendar
Quarter, Amgen shall submit to GENE a written report setting forth in
reasonable detail the calculation of all Development Costs of both
Parties and the calculation of the net amount owed by GENE to Amgen in
order to ensure the appropriate sharing of Development Costs in
accordance with the provisions of Section 4.8. The net amount payable
shall be paid by GENE within ***** days after receipt of such written
report.
If, in any Calendar Year, the actual Development Costs for that
Calendar Year are *****. The Early Contribution Level or Late
Contribution Level, as the case may be, to be applied ***** shall be
the Early Contribution Level or Late Contribution Level applicable at
the time ***** Development Costs were incurred.
4.10 Joint Development Committee. If GENE elects to contribute to Early
Development Costs in accordance with Section 4.2 above, a U.S. and/or
Canadian Joint Development Committee (the "JDC") comprised of *****
representatives each of Amgen and GENE, including at least one
marketing representative, shall be formed. Amgen shall appoint the
chair of this committee and the *****. The purpose of the JDC is to
inform GENE of the progress of Development and to enable GENE to
comment on Amgen's intended Development program. Notwithstanding the
above, Amgen shall, however, retain full right and responsibility for
all aspects of Development as set forth in Section 4.1. If and when
GENE elects not to contribute to Development Costs pursuant to
Sections 4.2, 4.3 or 4.5 above, the JDC shall be disbanded. The JDC
shall meet once every Calendar Quarter on reasonable written notice,
in person or by teleconference, or as otherwise mutually agreed by the
JDC. *****.
ARTICLE 5
REGULATORY
5.1 Ownership. Amgen shall own all Regulatory Filings and Regulatory
Approvals.
5.2 Responsibility. Amgen shall have the sole right to monitor, review and
direct all aspects of regulatory matters regarding Products in the
Territory, including making all strategic and tactical decisions with
respect thereto and establishing the methods and means by which it
performs such activities (including the management of permitted
subcontractors, pursuant to Section 17.7). Amgen shall have sole
responsibility for
16
(a) the filing of Regulatory Filings and the seeking of Regulatory
Approvals, as well as all associated official correspondence and
communications with Regulatory Authorities regarding such matters and
(b) reporting to Regulatory Authorities any adverse experience and
safety issues for such Product in compliance with the requirements of
the U.S. Food, Drug and Cosmetic Act, 21 USC Section321 et seq., the
Public Health Service Act, 42 USC Section201 et seq., the regulations
promulgated thereunder, and the equivalent laws, rules and regulations
in the Territory and, if GENE elects to Co-Detail pursuant to Section
6.3, promptly thereafter provide GENE with a copy of such report.
Notwithstanding the foregoing, following the first Regulatory Filing,
Amgen shall promptly prepare and provide to GENE with respect to each
Product a Regulatory Plan, which shall be updated as necessary on at
least an annual basis.
5.3 Adverse Event Reporting. Amgen shall maintain a record of all
non-medical and medical product-related complaints and reports of
adverse events that it receives with respect to any Product. If GENE
elects to Co-Detail pursuant to Section 6.3, each Party will notify
the other Party of any complaint received by it with respect to any
Product and, within ten (10) days (but, in the event of serious
adverse events, five (5) days) of the initial receipt, provide the
other Party with a copy of such complaint(s) and adverse event
reports.
ARTICLE 6
COMMERCIALIZATION
6.1 Responsibility. Subject only to GENE's right to Co-Detail in the USA
and/or Canada, Amgen shall have the sole right and responsibility for
all aspects of Commercializing Products in the Territory, including
making all strategic and tactical decisions with respect thereto,
including the appointment of sub-licensees, distributors and agents,
and establishing the methods and means by which it performs such
activities under this Agreement (including the management of permitted
subcontractors, pursuant to Section 17.7), and shall ***** in doing
so.
6.2 Profit Sharing Option. If GENE *****, Amgen shall promptly provide
written notice to GENE of Amgen's filing of a first Drug Approval
Application for such Product in the United States or Canada, which
notice shall include the Commercialization Plan for the United States
and Canada together with Amgen's non-binding, ***** estimate, in *****
detail, of the Product Contribution for that Commercialization Plan.
Within ***** of GENE's receipt of such notice from Amgen, GENE may
elect to share profits (and losses) in the United States and/or Canada
pursuant to Section 6.6 below in lieu of receiving any royalty
payments in those countries, by providing written notice thereof to
Amgen. During such *****, and upon GENE's request, Amgen shall
promptly provide GENE with an explanation in reasonable detail of the
Commercialization Plan *****. The Parties hereby agree that such
Commercialization Plan and estimate of such Product Contribution as
well as the explanation and information-providing obligations of Amgen
set forth in this
17
Section 6.2 are not subject to the dispute resolution mechanism set
forth in Sections 2.4 and 2.5.
6.3 Co-Detailing Option. If GENE*****, If GENE elects to Co-Detail a
Product in the United States and/or Canada, a Joint Sales and
Marketing Committee (the "JSMC") comprised of ***** representatives
each of Amgen and GENE shall be formed. Amgen shall appoint the chair
of this committee and the chair shall have the casting vote in all
matters where there is a disagreement between the Parties. The purpose
of the JSMC is *****. Notwithstanding the above, Amgen shall, however,
retain full right and responsibility for all aspects of
Commercialization as set forth in Section 6.1. The JSMC shall meet
***** on reasonable written notice in person or by teleconference, or
as otherwise mutually agreed by the JSMC. *****.
6.4 Co-Detailing Rights. GENE shall be responsible for ensuring that its
Representatives Detail a Product in a manner consistent with the
decisions of the JSMC. The number of Representatives that GENE may
employ in Co-Detailing shall be determined *****. All such GENE
Representatives shall be full-time employees of GENE. *****. For the
purposes of this Section 6.4, *****. If a Product is Developed for
multiple indications, *****.
6.5 Up-dating of Commercialization Plan. If GENE elects to share profits
pursuant to Section 6.2, Amgen shall provide GENE with an update of
the Commercialization Plan for Canada and/or the United States *****,
at least once per Calendar Year, together with Amgen's non-binding,
good faith estimate, in ***** detail, of the Product Contribution for
that Commercialization Plan.
6.6 Product Contribution.
a. The Parties shall *****:
(A) GENE shall be allocated a percentage of the Product
Contribution from sales of Products for the United States and/or
Canada (as appropriate) *****:
*****
*****
b. In the event that Losses are incurred in any legal proceeding
not subject to Sections 13.1 or 13.2 alleging personal injury
resulting from or arising in connection with the Development,
manufacture or Commercialization for the United States and
Canada (as appropriate) of Product, such Losses shall be treated
as a Commercialization Expense. Notwithstanding the foregoing,
*****.
c. In the event that GENE's share of the cumulative Product
Contribution losses for a given Product exceed US$*****, GENE
may, at its sole discretion, by providing written notice to
Amgen, *****. Notwithstanding the above, GENE
18
shall not be excused from its obligation to pay its share of any
Product Contribution *****.
d. Any Commercialization Expenses incurred prior to Regulatory
Approval of a Product shall be charged to the Product
Contribution and be borne by the Parties on the same basis.
6.7 Calculation and Duration of Product Contribution. The Product
Contribution shall be payable in respect of sales for the United
States and/or Canada as appropriate, on a country-by-country and
Product-by-Product basis, for so long as there are sales by Amgen, its
Affiliates or sublicensees of each such Product in that country. The
Product Contribution shall be *****.
6.8 Quarterly Reconciliation of Product Contribution. If GENE elects to
Co-Detail as set forth in Section 6.3 within ***** days following the
end of the second month of each Calendar Quarter, GENE shall submit to
Amgen a written calculation of its actual Detailing Costs for the
first two months of such Calendar Quarter, calculated according to
Exhibit Y, together with (i) its best estimate of the Detailing Costs
it expects to incur in the third month of such Calendar Quarter and
(ii) the actual Detailing Costs (calculated according to Exhibit Y)
incurred during the third month of the preceding Calendar Quarter (for
which GENE has previously provided its best estimate), for the United
States and/or Canada as appropriate. Within ***** days following the
end of each Calendar Quarter, Amgen shall submit to GENE a written
report setting forth the calculation of total Product Contribution,
calculated as set forth in Exhibit X, for each Product in the United
States and/or Canada as appropriate for that Calendar Quarter and the
calculation of any net amount owed by Amgen to GENE or by GENE to
Amgen. With respect to GENE's Detailing Costs, Amgen shall base such
calculation on the actual Detailing Costs submitted by GENE for the
first two months of such Calendar Quarter, together with (i) GENE's
best estimate of the Detailing Costs for the third month of such
Calendar Quarter and (ii) any adjustment (positive or negative)
required as a consequence of any difference between GENE's best
estimate of the Detailing Costs for the third month of the previous
Calendar Quarter and GENE's actual Detailing Costs for the same
period. Amgen shall pay GENE the net amount owed by Amgen to GENE or
GENE shall pay Amgen the net amount owed by GENE to Amgen, as the case
may be, within ***** of issuance of such report.
If in any Calendar Year Amgen's ***** estimate of Product Contribution
is a *****, and the actual Product Contribution in such Calendar Year
is a ***** that is *****, GENE may delay payment of its share of any
such ***** estimate ***** until the subsequent Calendar Year. If in
any Calendar Year Amgen's *****, GENE may delay payment of its share
of any ***** until the subsequent Calendar Year. Such delayed payments
shall be paid within ***** days of receipt of Amgen's calculation of
the Product Contribution for the last Calendar Quarter of the Calendar
Year in which ***** occurs.
19
6.9 Negotiation of Profit Sharing as a Royalty Calculation. The Parties
hereby agree to negotiate in good faith sufficiently in advance of the
first filing of a Drug Approval Application in the United States or
Canada of a Product for which GENE may elect to Co-Detail pursuant to
Section 6.3, an equitable way to calculate profit sharing as a royalty
payment by Amgen to GENE.
ARTICLE 7
MANUFACTURE AND SUPPLY
7.1 Supply of Product. Amgen shall have the sole right and responsibility
for all aspects of manufacturing Products, including making all
strategic and tactical decisions with respect thereto and establishing
the methods and means by which it performs such activities (including
the management of permitted subcontractors, pursuant to Section 17.7).
ARTICLE 8
PAYMENTS AND FUNDING
8.1 Upfront Fee. Within five (5) business days following the Effective
Date, Amgen will pay to GENE a non-refundable, non-creditable fee of
US$***** by wire transfer of immediately available funds to such bank
account as may be designated in writing by GENE to Amgen.
8.2 Research Funding. Amgen will fund and GENE will conduct the Research
Program at the following effort levels: ***** during the first
Contract Year of the Research Program, ***** during the second
Contract Year of the Research Program and three ***** per Contract
Year thereafter for a maximum of three additional Contract Years or
until the initiation of pre-clinical toxicology on a clinical
candidate, whichever is earlier. The JRC may ***** in order to more
rapidly progress the Research Program. Such request shall be made in
writing and shall state *****, the reason for such request and *****.
8.3 Payment of Research Funding. Promptly after the Effective Date, and on
the first day of each subsequent Calendar Quarter, GENE shall notify
Amgen in writing of the number of FTE's required by GENE to undertake
its obligations under the Research Plan for the next Calendar Quarter.
Amgen will pay GENE within ***** days of such notification the FTE
Costs of such FTE's; provided however, Amgen shall not be obligated to
pay, in any given Contract Year, for more than the number of FTE's
agreed to for any such Contract Year (plus any additional FTE's
approved by Amgen and GENE pursuant to Section 8.2). GENE shall ensure
that all such FTEs are fully engaged in the Research Program and to
such end, GENE shall deliver written reports ***** to Amgen within
***** days after each Calendar Quarter, setting forth the number of
FTEs actually devoted by GENE to Research Program activities and a
summary of all such FTE-funded activities during such period. To the
extent that, in any Calendar Quarter, the number of GENE FTEs actually
engaged in the Research Program ("Actual FTEs") is less than the
number that GENE has notified Amgen will
20
be required for that Calendar Quarter ("Expected FTEs") Amgen shall
have the right to deduct the balance of the FTE Costs of Expected FTEs
less the FTE Costs of Actual FTEs from any payments for FTE Costs due
to GENE in subsequent Calendar Quarters until such balance is zero;
provided however, that GENE shall promptly remit to Amgen any balance
outstanding upon expiration of the Research Program.
8.4 Research Milestones. Amgen shall pay to GENE the following one-time,
non-refundable, non-creditable payments via wire transfer to an
account designated by GENE within ***** days following the achievement
of the below-identified research milestones as determined by the JRC
in accordance with Sections 2.2-2.4:
a. *****. Payment of ***** upon identification of the *****, i.e.,
the achievement of each of the following: *****
b. ***** Functional Validation. Payment of ***** upon either (a)
***** (to be determined by the JRC).
c. ***** Validation. Payment of *****
8.5 Clinical Milestones.
a. With respect to a first Product, Amgen shall pay to GENE the
following one-time, non-refundable, non-creditable payments via
wire transfer to an account designated by GENE within ***** days
following the achievement by Amgen, its Affiliates or
sublicensees, of each of the clinical milestones set forth
below:
MILESTONE EVENT MILESTONE PAYMENT
***** US$*****
***** US$*****
***** US$*****
***** US$*****
***** US$*****
Total US$
b. If the first Product to obtain approval by a Regulatory
Authority of a Drug Approval Application is a ***** via wire
transfer to an account designated by GENE within ***** days
following the achievement by Amgen, its Affiliates or
sublicensees, of each of the clinical milestones set forth
below:
MILESTONE EVENT MILESTONE PAYMENT
***** US$*****
***** US$*****
Total US$
21
c. Amgen shall provide GENE with prompt written notice upon its
achievement of each of the milestones set forth in this Section
8.5. In the event that, notwithstanding the fact that Amgen has
not given any such notice, GENE reasonably believes any such
milestone payment is due, it shall so notify Amgen and members
of the JSC in writing, *****. Any negative determination shall
be accompanied by a detailed explanation of the reasons
therefore.
8.6 Global Royalty Rates. Amgen shall pay to GENE *****. If GENE *****. In
addition, Net Sales of a Product beyond the Royalty Term of such
Product in a country *****.
a. Baseline Royalty. During the Royalty Term of each Product, the
Baseline Royalty shall be paid at the following rates:
i. *****;
ii. *****;
iii. *****; and
iv. *****.
b. Development Contribution Royalty. If GENE has elected to
contribute to Development Costs for a Product, Amgen shall pay
to GENE, from the date of First Commercial Sale of such Product
until such Product is no longer sold, an additional royalty on
annual Net Sales in the Territory ("Development Contribution
Royalty") based on GENE's Early Contribution Level and Late
Contribution Level, as set forth below:
GENE'S EARLY GENE'S LATE DEVELOPMENT CONTRIBUTION
CONTRIBUTION LEVEL CONTRIBUTION LEVEL ROYALTY
i ***** ***** *****
ii ***** ***** *****
iii ***** ***** *****
iv ***** ***** *****
v ***** ***** *****
vi ***** ***** *****
vii ***** ***** *****
viii ***** ***** *****
ix ***** ***** *****
x ***** ***** *****
xi ***** ***** *****
xii ***** ***** *****
*****
22
8.7 Anti-Stacking Royalty Reduction. If, in Amgen's reasonable opinion,
Amgen is required to enter into any agreement with Third Parties for
rights under patents for which but for a license the sale, manufacture
or use of any Product by Amgen, its Affiliates and sublicensees would
infringe one or more claims of said licensed patent(s), ***** by
Amgen, its Affiliates or sublicensees *****, Amgen shall provide
written notice thereof to GENE, *****. With respect to any formulation
or presentation of such Product which, but for such license would
infringe such Third Party patent(s), GENE's Baseline Royalty with
respect to such formulation or presentation shall *****. With respect
to any formulation or presentation of such Product which, but for such
license would infringe such Third Party patent(s), Amgen shall *****.
*****. If GENE ***** (pursuant to Sections 4.2, 4.3 and 4.5) *****
(pursuant to Section 6.2), *****.
8.8 Cross License. In the event that Amgen shall determine in its sole
discretion that it is necessary to grant a sublicense, or a covenant
not to sue under *****, to any Third Party in a country in the
Territory in order for Amgen to make, have made, use, sell, lease,
offer to sell or lease, import, export (within the Territory) or
otherwise exploit, or transfer physical possession of or title in,
Product(s) in the Field of Use in a country in the Territory, Amgen
shall have the exclusive right and discretion to grant such sublicense
or covenant not to sue to such Third Party for such country. For
purposes of this Section 8.8, the determination of Net Sales of said
Product for purposes of calculating the royalties otherwise payable by
Amgen to GENE under Section 8.6 shall not include sales of any Product
by such Third Party receiving such sublicense or such a covenant not
to sue. If, as part of any sublicense or covenant not to sue, Amgen
receives payments then such payments shall be included within the
definition of Net Sales and the royalty rates as set forth in Section
8.6 shall be applied.
8.9 Equity Investment. Subject to the terms and conditions set forth below
and in that certain stock purchase agreement executed on the same date
herewith ("Stock Purchase Agreement"), GENE may, at its sole
discretion, sell a certain number of shares of GENE's Common Stock to
Amgen within ***** days following the achievement of certain
milestones as set forth below, all as more fully described in the
Stock Purchase Agreement. If GENE decides not to sell equity to Amgen
at the time that any particular milestone set forth below is achieved,
then Amgen shall have no further obligation to acquire the stock at a
later date or of any other form of payment to GENE with respect to
that particular milestone. The Parties acknowledge and agree that at
no time shall Amgen's equity interest in ***** of the outstanding
shares of GENE common stock. If the requirement to purchase stock in
accordance with any one of the milestones set forth below would result
in Amgen acquiring an equity interest equal to ***** or greater,
Amgen's obligation to purchase such stock shall be limited to that
amount of stock that would result in the cumulative purchase of an
equity interest of ***** of outstanding shares in GENE's common stock,
and Amgen shall have no further obligation to purchase additional
stock at a later date or of any other form of payment to GENE with
respect to that particular milestone. A copy of the Stock Purchase
Agreement, in the form to be executed and delivered by each of Amgen
and GENE on the Effective Date, is attached hereto as Exhibit Z.
23
MILESTONE PURCHASE PRICE
***** *****
***** *****
***** *****
8.10 Paid-Up License. Upon the expiration of Amgen's obligation under this
Article 8 to pay royalties on Net Sales of a Product in a country,
Amgen shall have a fully paid-up, non-exclusive license, with the
right to sublicense, to make, have made, use, sell, lease, offer to
sell or lease, import, export or otherwise exploit, transfer physical
possession of or otherwise transfer title in such Product in the Field
of Use in that country.
8.11 No Other Compensation. Other than as explicitly set forth (and as
applicable) in this Article 8, and in Sections 3.6, 6.8, 10.5, 13.1
and 16.5, Amgen shall not be obligated to pay any additional fees,
milestone payments, royalties or any additional payments to GENE under
this Agreement.
ARTICLE 9
INTELLECTUAL PROPERTY
9.1 Ownership of Inventions. Ownership of inventions shall be determined
in accordance with the rules of inventorship under United States
patent laws. Subject to the licenses granted in Section 9.2(a) below,
as between the Parties, Amgen shall own all right, title and interest
in and to Amgen Technology, and any Confidential Information contained
therein shall be considered the Confidential Information of Amgen.
Subject to the licenses granted in Section 9.2(b) below, as between
the Parties, GENE shall own all right, title and interest in and to
GENE Technology, and any Confidential Information contained therein
shall be considered the Confidential Information of GENE. All right,
title and interest in and to Joint Know-How (which shall be considered
the joint Confidential Information of the Parties) and Joint Patent
Rights shall be owned, as between the Parties, jointly by GENE and
Amgen. Other than with respect to the rights and licenses granted
under this Agreement to Joint Know-How, each Party shall have the
unrestricted, royalty-free, worldwide right to make, have made, use,
sell, lease, offer to sell or lease, import, export or otherwise
exploit, or transfer physical possession of or title in Joint
Know-How, without accounting. All right and interest in and to Product
Trademarks shall be owned by Amgen, and any Confidential Information
related thereto shall be considered the Confidential Information of
Amgen.
9.2 Patent Licenses.
24
a. Amgen hereby grants to GENE a non-exclusive, royalty-free
license, without the right to sublicense, under the Amgen
Technology solely to perform GENE's responsibilities under the
Research Plan and, subject to GENE's election in accordance with
Section 6.3, to Co-Detail Products in the U.S. and/or Canada.
b. GENE hereby grants to Amgen an exclusive (subject to GENE's
option to Co-Detail in the U.S. and Canada as set forth in
Section 6.3), royalty-bearing license, with a right to
sublicense, under the *****, GENE Program Patent Rights related
to the Research Field, GENE Program Know-How related to the
Research Field, and GENE's interest in Joint Patent Rights and
Joint Know-How, and a non-exclusive, royalty-free license, with
a right to sublicense, under GENE Background Patent Rights and
GENE Background Know-How to make, have made, use, sell, offer to
sell, import, export or otherwise transfer physical possession
of or otherwise transfer title in Products in the Field of Use
in the Territory. Amgen hereby agrees that any sublicensee shall
as a condition of such sublicense agree to be bound by the terms
and conditions of this Agreement.
c. The Parties agree that GENE shall have the sole right to
commercialize the ***** for any and all diagnostic uses other
than diagnostic uses directed to Products ("Diagnostic Uses")
only upon the prior written approval of Amgen, which may be
withheld if in Amgen's sole opinion the commercialization of
such Diagnostic Uses would be detrimental to the Development or
Commercialization of any Product, and retain any financial
benefit realized in connection with such commercialization. Upon
GENE's receipt of such written approval, Amgen shall be deemed
to have granted to GENE an *****, under the Amgen Program Patent
Rights related to the Research Field and Amgen's interest in
Joint Patent Rights to commercialize such Diagnostic Uses.
Notwithstanding the above, the parties hereby agree that Amgen,
its Affiliates and sublicensees have the right to develop
Diagnostic Uses for the purposes of conducting human clinical
trials and obtaining Regulatory Approvals of any Product.
9.3 Other Intellectual Property Licenses.
a. Amgen hereby grants to GENE a ***** license under Amgen's entire
right, title and interest in any copyrights and any other
intellectual property rights in promotional materials relating
to Products, *****, to distribute copies of and publicly perform
and display such promotional materials in connection with
Products in the United States and Canada solely in compliance
with the terms and conditions of this Agreement.
9.4 Patent Prosecution.
a. Amgen shall have the first right (using mutually acceptable
outside counsel), but not the obligation, for the preparation,
filing, prosecution, maintenance and defense before all patent
offices (and courts to the extent an appeal is taken from a
patent office decision) of ***** and Joint Patent Rights at
Amgen's expense.
25
Amgen shall have the sole right, but not the obligation, to
prepare, file, prosecute, maintain and defend before all patent
offices all Amgen Background Patent Rights and Amgen Program
Patent Rights not related to the Research Field at Amgen's
expense. GENE shall have the sole right, but not the obligation,
to prepare, file, prosecute, maintain and defend before all
patent offices all GENE Background Patent Rights and GENE
Program Patent Rights not related to the Research Field at
GENE's expense.
b. With respect to its activities pursuant to Section 9.4.a., Amgen
shall instruct such outside counsel in writing to act in the
best interests of both Parties under this Agreement and Amgen
will keep GENE informed of the progress with regard to the
preparation, filing, prosecution, maintenance and defense before
all patent offices (and courts to the extent an appeal is taken
from a patent office decision) of ***** and Joint Patent Rights
and instruct such outside counsel to furnish to GENE copies of
all relevant documents filed with the various patent offices
around the world. GENE shall have the right to review and
comment on any papers pertaining to proposed applications,
responses, interferences and oppositions before the filing
thereof by such outside counsel with any such patent office and
Amgen will instruct such outside counsel to timely provide such
papers and consider in good faith such comments of GENE relating
to ***** and Joint Patent Rights.
c. GENE shall cooperate with Amgen and such outside counsel and
render all reasonable assistance in filing, prosecuting,
maintaining and defending all intellectual property licensed
under this Agreement and shall sign any necessary legal papers
and provide such outside counsel with data or other information
in GENE's Control which is reasonably requested by Amgen in
support thereof (and use its reasonable best efforts to ensure
the cooperation of any of its employees, consultants and agents
as might reasonably be requested).
d. If Amgen determines in its sole discretion not to file,
prosecute, defend or maintain any Patent Right within ***** and
Joint Patent Rights referred to in Section 9.4.a. above in any
country, and further providing that no other patent applications
or patents claiming the same or similar subject matter are then
pending or issued in that same country, then Amgen shall provide
GENE with thirty (30) days prior written notice of such
determination and GENE shall have the right and opportunity to
file, prosecute, defend and/or maintain such Patent Right on
behalf of the Parties at GENE's expense.
9.5 Trademark Prosecution. Amgen shall be responsible (using mutually
acceptable outside counsel) for the filing, prosecution, defense and
maintenance before all trademark offices of the Product Trademarks at
Amgen's expense.
9.6 Patent and Trademark Prosecution Expenses. With respect to carrying
out the activities under Sections 9.4 and 9.5, Amgen shall have the
right to charge all of Amgen's external costs, expenses and fees (as
documented by written invoices for
26
legal services and receipts for filing, maintenance and other fees
paid) to have outside counsel prepare, file, prosecute, maintain
and/or defend *****, Joint Patent Rights, Amgen Background Patent
Rights related to Products and Product Trademarks before all patent
and trademark offices (and courts to the extent an appeal is taken
from a patent office decision) as a Development Cost if incurred
during Development and, if GENE elects to share profits pursuant to
Section 6.2, to the extent such costs, expenses and fees pertain to
such activities in the U.S. and/or Canada (as appropriate) as a
Commercialization Expense.
9.7 Patent Infringement by Third Parties.
a. GENE and Amgen will promptly notify the other in writing after
becoming aware of any alleged or threatened infringement of any
patent included in ***** and Joint Patent Rights or any right
relating to ***** and Joint Know-How.
b. By counsel of its own choice, Amgen shall have the sole right
but not the obligation to bring, defend, control and maintain
(including the right to settle or compromise) any suit or action
against a Third Party for infringement or declaratory relief of
a claim of an issued patent within *****, Joint Patent Rights
and Amgen Background Patent Rights and any right relating to
***** and Joint Know-How. In the event Amgen shall so engage in
any such litigation, Amgen shall seek and reasonably consider
GENE's comment before determining the strategy with respect to
any such litigation. GENE shall cooperate and, if Amgen finds it
necessary or desirable, join Amgen as a party in any such
litigation (at Amgen's expense with respect to external costs
and expenses incurred by GENE), including the signing of any
necessary legal papers, and shall provide Amgen with data or
other information in support thereof, and shall use reasonable
best efforts to ensure the cooperation of any of its personnel
as might reasonably be requested in any such matters.
Notwithstanding the above, in any such settlement or compromise
of any such litigation, Amgen will not admit the invalidity of
any claim within ***** and Joint Patent Rights without the prior
written approval of GENE, which approval shall not be
unreasonably withheld or delayed.
c. Without the prior written approval of Amgen, GENE shall not
bring any suit or action against a Third Party developing or
commercializing any product which interacts with *****.
9.8 Trademark Infringement by Third Parties. At its own expense and by
counsel of its own choice, Amgen shall have the sole right but not the
obligation to enforce the Product Trademarks against any actual,
alleged or threatened infringement by Third Parties or from any unfair
trade practices, trade dress imitation, passing off of counterfeit
goods or like offenses. GENE shall cooperate in any such enforcement
or defense and shall use reasonable best efforts to ensure the
cooperation of any of its personnel as might reasonably be requested
in any such matters.
9.9 Infringement of Third Party Rights.
27
a. Each Party will promptly notify the other in writing of any
allegation by a Third Party that the activity of either of the
Parties pursuant to this Agreement infringes or may infringe the
intellectual property rights of such Third Party.
b. Amgen shall have the sole right and responsibility to defend any
actual, alleged or threatened claim or action which names Amgen
and/or GENE and which claims the infringement of (i) Third Party
Patent Rights or other intellectual property rights through the
making, having made, using, selling, offering to sell, importing
exporting or otherwise transferring physical possession of or
otherwise transferring title in a Product or (ii) any Third
Party trade name, service mark, logo or trademark by the use of
Product Trademark(s). In the event that GENE is a named Party in
any such defense, Amgen shall seek and reasonably consider
GENE's comment before determining the strategy of such defense.
If necessary, GENE will assist and cooperate with Amgen in any
such defense (at Amgen's expense with respect to external costs
and expenses incurred by GENE).
9.10 Infringement Expenses. Amgen, in bringing or defending a suit against
infringers under Sections 9.7 and 9.8 and defending a suit pursuant to
Section 9.9, shall be entitled to charge all external costs, fees and
expenses (including attorneys' fees of outside counsel) incurred by
such Party to carry out the activities described in Sections 9.7-9.9
as a Development Cost if incurred during Development and, if GENE
elects to share profits pursuant to Section 6.2, to the extent such
costs, expenses and fees pertain to such activities in the U.S. and/or
Canada (as appropriate) as a Commercialization Expense. Each Party
shall bear its own internal costs and expenses incurred in carrying
out the activities described in Sections 9.7-9.9. *****
9.11 Third Party Licenses. Amgen shall have final decision making authority
with respect to determining whether to enter into any agreement it (in
its sole discretion) deems necessary for a license or other rights or
to incur an obligation for any Third Party payments for a license to
any Third Party of Patent Rights and other intellectual property
rights necessary or useful to make, have made, use, sell, offer to
sell, import, export or otherwise transfer physical possession of or
otherwise transfer title in Products in the Field of Use in the
Territory.
9.12 Waiver. GENE, on behalf of itself and its directors, employees,
officers, shareholders, agents, successors and assigns hereby waives
any and all actions and causes of action, claims and demands
whatsoever, in law or equity, of any kind it or they may have against
Amgen, its directors, employees, officers, shareholders, agents,
successors and assigns which may arise in any way in the performance
of its rights or obligations under Sections 9.4, 9.5, 9.7, 9.8 and
9.9, except as a result of Amgen's gross negligence, recklessness or
willful misconduct.
28
ARTICLE 10
PAYMENTS; RECORDS; AUDIT
10.1 Payment; Reports. Beginning with ***** the First Commercial Sale of
the first Product occurs until the expiration of Amgen's obligation to
pay royalties, royalty payments and reports of the sale of Products
for each ***** will be calculated and delivered to GENE under this
Agreement within ***** days of the end of each such *****, unless
otherwise specifically provided herein. Each payment of royalties will
be made by wire transfer of immediately available funds to such bank
account as may be designated in writing by GENE to Amgen and followed
up with a report of Net Sales of Products in sufficient detail to
permit confirmation of the accuracy of the royalty payment made,
including, without limitation and on a country-by-country basis, the
number of Products sold, the gross sales and Net Sales of Products,
the royalties payable (in U.S. dollars), the method used to calculate
the royalty and the exchange rates used. Amgen will keep complete and
accurate records pertaining to the sale or other disposition of
Products in sufficient detail to permit GENE to confirm the accuracy
of all payments due hereunder.
10.2 Exchange Rate. All payments hereunder will be payable in U.S. dollars.
With respect to each *****, for countries other than the United
States, whenever conversion of payments from any foreign currency will
be required, such conversion will be made at the rate of exchange at
the close of business on the 25th day (or the next business day
thereafter) of each month in the ***** (or such other day as Amgen
subsequently uses in consolidating its corporate accounts) for that
particular month's Net Sales, as reported in Bloomberg Professional (a
service of Bloomberg L.P.), or in the event Bloomberg Professional is
not available then The Wall Street Journal, for the currency of the
country in which the sale is made.
10.3 Tax Withholding. If laws, rules or regulations require withholding of
income taxes or other taxes, assessments and/or imposed upon payments
set forth in Article 8, Amgen will make such withholding payments as
required and will subtract such withholding payments from the payments
set forth in Article 8. Amgen will promptly submit proof of payment of
the withholding taxes to GENE in a form sufficient to permit GENE to
document such tax withholding for purposes of claiming foreign tax
credits and similar benefits.
10.4 Blocked Currency. With respect to receipt of a foreign currency for
sales of Products, if Amgen or its Affiliates are unable to convert
such foreign currency into United States Dollars for reasons beyond
their respective control, or are restricted by law or regulation from
remitting funds from any country of sale, Amgen shall promptly notify
GENE and cause such payment to be made by deposit to the credit and
account of GENE (or their respective nominee(s)) in any commercial
bank designated by GENE in the applicable country or if none is
designated by GENE within thirty (30) days of such notice from Amgen,
in a recognized banking institution selected by Amgen and identified
in a written notice to GENE. Amgen shall promptly deliver to GENE
proper evidence of such deposit.
29
10.5 Audits. Each Party will keep complete and accurate records pertaining
to, with respect to Amgen, (i) the sale or other disposition of
Products including payments pursuant to the Product Contribution, (ii)
Development Costs and (iii) Detailing Costs, and with respect to GENE,
(i) the number of FTEs actually engaged in activities under the
Research Program, (ii) Development Costs and (iii) Detailing Costs, in
each case in sufficient detail to permit the other Party to confirm
the accuracy of all payments due hereunder, and such records will be
open to inspection for ***** years following the end of the period to
which they pertain. Not more than once per year, each Party will have
the right, upon at least ***** business days' prior written notice, to
cause an independent, certified public accountant reasonably
acceptable to the other Party to audit such records to confirm such
payments and associated costs therewith for a period covering not more
than the preceding ***** years, such audit to be conducted during
normal working hours on any business day. Such audit may take place no
more than ***** during usual business hours for the sole purpose of
and only to the extent necessary to verify the completeness and
accuracy of the records and payments made under this Agreement. The
independent certified public accountant(s) shall keep confidential any
information obtained during such inspection and shall report to the
Party conducting the audit (the "Auditing Party") only the amount of
payment due and payable related to the subject matter of the audit,
but may include, in the event the accountant shall be unable to verify
the correctness of any or all of such payment, the unverifiable amount
of such payment and information relating to why any or all of such
payment is unverifiable. The Party being audited (the "Audited Party")
shall receive a copy of each such report concurrently with receipt by
the Auditing Party. The Auditing Party shall pay the fees and expenses
of the accountant engaged to perform the audit, unless such audit
reveals a net discrepancy of ***** or more for the period examined
which is to the disadvantage of the Auditing Party, in which case the
Audited Party shall pay such fees and expenses and any other payment
due within thirty (30) days following the completion of such audit;
provided however, that any estimates of revenues, costs, fees or
expenses later reconciled to actuals shall not count toward such
discrepancy. Upon the expiration of ***** years following the end of
any particular Calendar Year, the calculation of any such amounts
payable with respect to such particular Calendar Year shall be binding
and conclusive upon the Auditing Party, and the Audited Party (and its
Affiliates in the case of Amgen) shall be released from any liability
or accountability with respect to such amounts for such Calendar Year,
other than any liability related to fraudulent records or records
fraudulently withheld by the Audited Party (and its Affiliates in the
case of Amgen).
10.6 Confidentiality. Each Party shall treat all financial information
subject to review under Article 8 as the other Party's Confidential
Information. Both Parties shall cause their respective accounting firm
to be bound to obligations of confidentiality at least as restrictive
as such Party's obligations of confidentiality in this Agreement.
30
ARTICLE 11
PUBLICATIONS
11.1 Publications.
a. The Parties hereby acknowledge the publication rights granted
pursuant to the *****. Amgen agrees that as between the Parties,
GENE shall have the sole right to publish the identification of
the ***** with the consultation of Amgen; provided however, GENE
shall use its best efforts to prevent the publication of such
results in a manner which would jeopardize Amgen's proprietary
position in the Research Field such as *****.
b. Amgen shall have the sole right to publish the results of any
and all pre-clinical and clinical studies of Products without
the consultation of GENE, subject to its confidentiality
obligations under Article 12.
c. Subject to Section 11.2.a. below, both Parties shall have the
right to publish scientific results and other related
Information of any and all work conducted during the Research
Program related to the Research Field, excluding the results of
pre-clinical studies of Products, which are publishable pursuant
to Section 11.1.b.
d. Subject to Section 11.2.b. below, each Party shall have the sole
right to publish their respective Program Know-How not related
to the Research Field.
11.2 Procedure.
a. For purposes of publication pursuant to Section 11.1.c. above,
neither Party will publish without the prior review and written
approval of *****. Each Party will submit to ***** any paper
proposed for publication by such Party that relates to both the
Research Program and to the Research Field, including oral
presentations and abstracts. Before any such paper is submitted
for publication or an oral presentation is made, the Party
publishing or presenting will deliver a complete copy of the
paper or abstract or materials for oral presentation to ***** at
least ***** days prior to submitting the paper to a publisher or
making the presentation. Notwithstanding the prior written
approval of ***** to publish, upon the request of the other
Party, the publishing Party will delete references to the other
Party's Confidential Information in any such paper, materials
and abstracts and agrees to withhold publication of same for an
additional ***** days in order to permit the Parties to obtain
patent protection, if either of the Parties deems it necessary,
in accordance with the terms of this Agreement.
b. For purposes of publication pursuant to Section 11.1.d. above,
each Party will have the right to review any paper proposed for
publication by the other Party that relates to the other Party's
Program Know-How not related to the Research Field, including
oral presentations and abstracts. Before any such paper is
submitted for
31
publication or an oral presentation is made, the Party
publishing or presenting will deliver a complete copy of the
paper or abstract or materials for oral presentation to the
other Party at least ***** days prior to submitting the paper to
a publisher or making the presentation. The other Party will
review any such paper and give its comments to the publishing
Party within ***** days after the delivery of such paper to the
other Party. Amgen may request, and GENE shall comply with such
request, that any such publication or oral presentation of GENE
is delayed, modified or withheld if it reasonably considers that
such publication or oral presentation would be detrimental to
Patent Rights or would have other detrimental consequences on
the Development or Commercialization of any Product. With
respect to oral presentation materials and abstracts, the other
Party will make reasonable efforts to expedite review of such
materials and abstracts, and will return such items as soon as
practicable to the presenting Party with appropriate comments,
if any, but in no event later than ***** days after the delivery
to the other Party. The publishing Party will comply with the
other Party's request to delete references to the other Party's
Confidential Information in any such paper, materials and
abstracts and agrees to withhold publication of same for an
additional ***** days in order to permit the Parties to obtain
patent protection, if either of the Parties deems it necessary,
in accordance with the terms of this Agreement.
11.3 Acknowledgment. Any such publication or presentation subject to
Sections 11.1 and 11.2 will include recognition of the contributions
of the other Party according to standard practice for assigning
scientific credit, either through authorship or acknowledgment, as may
be appropriate.
ARTICLE 12
CONFIDENTIALITY
12.1 Treatment of Confidential Information. The Parties agree that during
the Term, and for a period of five (5) years after this Agreement
expires or terminates, with respect to the other Party's Confidential
Information, each Party shall (a) maintain in confidence such
Confidential Information to the same extent such Party maintains its
own confidential or proprietary information or trade secrets of
similar kind and value (but at a minimum each Party shall use
reasonable best efforts to maintain such Confidential Information in
confidence); (b) not disclose such Confidential Information to any
Third Party without prior written consent of the other Party, except
for disclosures to its Affiliates and, pursuant to Section 17.7, to
authorized subcontractors who agree to be bound by obligations of
non-disclosure and non-use at least as stringent as those contained in
this Article 12; and (c) not use such Confidential Information for any
purpose except those purposes permitted by this Agreement. Neither
Party shall knowingly disclose to the other Party any Third Party
information or know-how that such Party does not have the legal right
to disclose to the other Party and/or has a contractual obligation not
to disclose to the other Party.
32
12.2 Authorized Disclosure. Notwithstanding any other provision of this
Agreement, unless otherwise specified below, each Party may disclose
Confidential Information of the other Party:
a. to the extent and to the persons and entities as required by an
applicable law, rule, regulation, legal process, court order or
the rules of the National Association of Securities Dealers or
of a Regulatory Authority;
b. as necessary to file, prosecute or defend those patent
applications or patents for which such Party has the right to
assume filing, prosecution, defense or maintenance, pursuant to
Section 9.4 of this Agreement;
c. to prosecute or defend litigation or otherwise establish rights
or enforce obligations pursuant to its rights under this
Agreement, but only to the extent that any such disclosure is
necessary;
d. (solely with respect to Amgen) in the event of a recall of a
Product; or
e. to such Party's employees, consultants and agents who have a
need to know and who have an obligation to treat such
information as confidential.
The Party required or intending to disclose the other Party's Confidential
Information under Section 12.2.c. shall first have given prompt notice to such
other Party to enable it to seek any available exemptions from or limitations
on such disclosure requirement and shall reasonably cooperate in such efforts
by the other Party.
12.3 Publicity; Terms of Agreement. The Parties agree that the existence of
and the material terms of this Agreement shall be considered
Confidential Information of both Parties, subject to the special
authorized disclosure provisions set forth below in this Section 12.3
(in lieu of the authorized disclosure provisions set forth in Section
12.2, to the extent of any conflict) and without limiting the
generality of the definition of Confidential Information. The Parties
will mutually agree on the text of a press release announcing the
execution of this Agreement. Thereafter, if either Party desires to
make a public announcement concerning this Agreement or the terms
hereof, such Party shall give reasonable prior advance notice of the
proposed text of such announcement to the other Party for its prior
review and approval, such approval not to be unreasonably withheld or
delayed. With respect to GENE's public announcement of the achievement
of each of the milestones set forth in Section 8.9, GENE shall make
such announcement within ***** working days of the achievement of such
milestone as determined in accordance with the provisions of this
Agreement. A Party shall not be required to seek the permission of the
other Party to repeat any information as to the terms of this
Agreement that has already been publicly disclosed by such Party in
accordance with the foregoing or by the other Party. Either Party may
disclose the terms of this Agreement to potential investors who agree
to be bound by obligations of non-disclosure and non-use at least as
stringent as those contained in this Agreement. The Parties
acknowledge that Amgen and/or GENE
33
may be obligated to file a copy of this Agreement and/or the Stock
Purchase Agreement with the U.S. Securities and Exchange Commission
with its next quarterly report on Form 10-Q, an annual report on Form
10-K or a current report on Form 8-K or with any registration
statement filed with the U.S. Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, and each such
Party shall be entitled to make such filing, provided however, that it
requests confidential treatment of the more sensitive terms hereof to
the extent such confidential treatment is reasonably available to the
filing Party under the circumstances then prevailing. In the event of
any such filing, the filing Party will provide the non-filing Party
with an advance copy of this Agreement or the Stock Purchase Agreement
marked to show provisions for which the filing Party intends to seek
confidential treatment, and the filing Party shall reasonably consider
the non-filing Party's timely comments thereon.
12.4 Prohibition on Solicitation. Without the written consent of the other
Party, neither Party nor its Affiliates shall, during the term of this
Agreement or for a period of one year following the expiration or
termination of this Agreement, solicit (directly or indirectly) any
person who was employed by such Party or its Affiliates and
participated in the Research Program at any time during the term of
this Agreement. This provision shall not restrict either Party or its
Affiliates from advertising employment opportunities in any manner
that does not directly target the other Party or its Affiliates.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by Amgen. Except for claims defended pursuant to
Section 9.10, Amgen hereby agrees to defend, hold harmless and
indemnify (collectively "Indemnify" or "Indemnified") GENE and its
agents, directors, officers and employees (the "GENE Indemnitees")
from and against any and all Losses resulting directly or indirectly
from any Third Party (which, for the avoidance of doubt, shall exclude
employees, agents or independent contractors of Amgen and/or GENE)
claims, suits, actions or demands arising out of (a) any of Amgen's
representations and warranties set forth in this Agreement being
untrue in any material respect when made; (b) any material breach or
material default by Amgen of its covenants and obligations under this
Agreement; (c) Amgen's negligence or intentional misconduct (or the
negligence or intentional misconduct of any agent, independent
contractor, Third Party engaged by Amgen, Affiliate or sublicensee of
Amgen) in carrying out its activities set forth in the Research Plan
and in Developing and Commercializing Product(s); and (d) the
Development, manufacture, import, use or sale of any Product(s) by
Amgen or any Affiliate, sublicensee, distributor or agent of Amgen,
but excluding any Product(s) for which GENE shall have elected to
contribute to any Development Costs pursuant to Sections 4.2, 4.3, 4.4
and 4.5 or share profits pursuant to Section 6.2.
13.2 Indemnification by GENE. GENE hereby agrees to Indemnify Amgen and its
Affiliates, agents, directors, officers and employees (the "Amgen
Indemnitees") from
34
and against any and all Losses resulting directly or indirectly from
any Third Party (which, for the avoidance of doubt, shall exclude
employees, agents or independent contractors of Amgen and/or GENE)
claims, suits, actions or demands arising out of (a) any of GENE's
representations and warranties set forth in this Agreement being
untrue in any material respect when made; (b) any material breach or
material default by GENE of its covenants and obligations under this
Agreement; (c) GENE's negligence or intentional misconduct (or the
negligence or intentional misconduct of any agent, independent
contractor, Third Party engaged by GENE or Affiliate of GENE) in
carrying out its activities set forth in the Research Plan and in
Co-Detailing Product(s); and (d) the development, manufacture, import,
use or sale of any product(s) related to Diagnostic Uses by GENE or
any Affiliate, sublicensee, distributor or agent of GENE.
13.3 Indemnification Procedure. To be eligible to be so Indemnified as
described in Section 13.1 or Section 13.2 above, each of the GENE
Indemnitees or Amgen Indemnitees, as the case may be (the
"Indemnitee(s)"), seeking to be Indemnified, shall provide the Party
required to Indemnify the Indemnitee(s) (the "Indemnifying Party")
with prompt notice of any claim (with a description of the claim and
the nature and amount of any such Loss) giving rise to the
indemnification obligation pursuant to Section 13.1 or Section 13.2,
as the case may be, and the exclusive ability to defend such claim but
for the differing interests exception set forth below (with the
reasonable cooperation of Indemnitee(s)); provided however, that the
failure to provide notice shall not relieve the Indemnifying Party of
its obligations except to the extent any failure by the Indemnitee(s)
to deliver prompt notice shall have been prejudicial to its ability to
defend such action. Each Indemnitee(s) shall have the right to retain
its own counsel, at its own expense, if representation of the counsel
of the Indemnifying Party would be inappropriate due to actual or
potential differing interests between such Indemnitee(s) and the
Indemnifying Party. Neither the Indemnitee(s) nor the Indemnifying
Party shall settle or consent to the entry of any judgment with
respect to any claim for Losses for which indemnification is sought,
without the prior written consent of the other Party (not to be
unreasonably withheld); provided however, the Indemnifying Party shall
have the right to settle or compromise any claim for Losses without
such prior written consent if the settlement or compromise provides
for an unconditional release of the Indemnitee(s). The Indemnifying
Party's obligation to Indemnify the Indemnitee(s) pursuant to this
Section 13.3 shall not apply to the extent of any Losses (i) that
arise from the negligence or intentional misconduct of any Indemnitee
(including but not limited to, in the case of GENE Indemnitees, those
Losses arising from Research Plan activities and the Co-Detailing of
Product(s) by GENE, or, in the case of Amgen Indemnitees, those Losses
arising from Research Plan activities and the Development or
Commercialization of Product(s) by Amgen); or (ii) that, in the case
of GENE Indemnitees, arise from the breach by GENE or, in the case of
Amgen Indemnitees, arise from the breach by Amgen, of any
representation, warranty, covenant or obligation under this Agreement;
or (iii) that arise from the failure of the Indemnitee(s) to take
reasonable action to mitigate any Losses.
35
13.4 Insurance. Within thirty (30) days after the Effective Date, each
Party shall at its own expense procure and maintain during the term of
this Agreement insurance adequate to cover its obligations hereunder
and which is consistent with normal business practices of prudent
companies similarly situated. Amgen may self-insure all or part of
such insurance. GENE may self-insure part of any such insurance;
provided however, that GENE shall at all times maintain the following
minimum Third Party insurance coverage:
TYPE OF COVERAGE AMOUNT (AGGREGATE)
*****
Commercial General Liability Insurance
*****
Excess Liability Insurance
Worker's Compensation *****
Employer's Liability *****
The Parties hereby agree to negotiate in good faith the amount of
product liability insurance that GENE shall maintain in the event that
GENE elects to Co-Detail pursuant to Section 6.3. Each insurance
policy required by and procured by a Party under this Section 13.4
shall name the other Party as an additional insured except for
Worker's Compensation. Such insurance shall not be construed to create
a limit of the insuring Party's liability with respect to its
indemnification obligations under this Article 13. Each Party shall
provide the other Party with a certificate of insurance or other
evidence of such insurance and/or self-insurance, upon request. Each
Party shall provide the other Party with written notice at least
thirty (30) days prior to the cancellation, non-renewal or a material
change in such insurance or self-insurance, which materially adversely
affects the rights of the other Party hereunder. An Indemnifying
Party's insurance shall be primary and non-contributing.
13.5. Pre-Effective Date Losses. In connection with this Agreement, Amgen
shall not assume or be liable for any Losses resulting from or arising
in connection with the activities of GENE (or any agent, independent
contractor or Third Party engaged by GENE) relating to Research Field
on or prior to the Effective Date.
13.6 Limitation of Liability. NEITHER PARTY NOR ITS RESPECTIVE AFFILIATES
SHALL BE LIABLE FOR SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE
DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR
OTHERWISE INCURRED BY THE OTHER PARTY IN CONNECTION WITH THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO DAMAGES MEASURING LOST PROFITS
OR BUSINESS OPPORTUNITIES.
36
ARTICLE 14
REPRESENTATIONS AND WARRANTIES
14.1 Mutual Representations and Warranties. Each Party represents and
warrants to the other that:
a. it is a corporation duly organized and validly existing under
the laws of its jurisdiction of incorporation, and has full
power and authority to enter into this Agreement and to carry
out the provisions hereof;
b. the execution and delivery of this Agreement and the performance
of the transactions contemplated hereby have been duly
authorized by all necessary corporate action of such Party, and
the person executing this Agreement on behalf of each Party has
been duly authorized to do so by requisite corporate action;
c. the execution and delivery of this Agreement and the performance
of the transactions contemplated hereby will not violate such
Party's corporate charter, bylaws or any other organizational
document, other contractual obligations (express or implied) it
has or may have, or any judgment of any court or governmental
body applicable to such Party or its properties or, to such
Party's knowledge, any statute, decree, order, rule or
regulation of any court or governmental agency or body
applicable to such Party or its properties, in each case, which
violation, individually or in the aggregate, would reasonably
likely have a materially adverse effect on its business or
financial condition or its ability to perform its obligations
hereunder;
d. the execution and delivery of this Agreement does not and will
not require any consent or approval of any governmental entity
or person;
e. this Agreement is a legally binding obligation of such Party and
enforceable against such Party according to its terms; except as
enforceability may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and by
general equitable principles and public policy constraints
(including those pertaining to limitations and/or exclusions of
liability, competition law, penalties and jurisdictional issues
including conflicts of law); and
f. except as disclosed in any documents filed with the Securities
and Exchange Commission pursuant to the Exchange Act as of the
Effective Date, such Party is not aware of any facts or
circumstances, individually or in the aggregate, which would be
reasonably expected to have a material adverse effect on such
Party's ability to perform its obligations under this Agreement.
14.2 Mutual Covenants. Each Party covenants to the other that:
37
a. all activities conducted by that Party under the Research
Program will comply in all material respects with all applicable
government laws, regulations and guidelines, including those
relating to work with recombinant DNA;
b. it shall not enter into any collaboration with, or render
services for, a Third Party whereby such collaboration or
services with or for such Third Party will negatively impact the
timely accomplishment of the goals and objectives of the
Research Program; and
c. it shall not knowingly misappropriate the trade secret of a
Third Party in connection with the performance of its activities
under the Research Program.
14.3 Additional Representations, Warranties and Covenants of GENE.
a. As of the Effective Date, GENE has provided Amgen with all
Material Information (as defined below) which is necessary for
Amgen to decide the merits of entering into this Agreement,
including without limitation, all Material Information relating
to the representations and warranties of this Section 14.3 and
all Material Information concerning the ***** and GENE's efforts
to date in identifying and characterizing the *****, and all
such provided Material Information is, to the best knowledge of
GENE, true in all material respects. For purposes of this
Section 14.3, the term "Material Information" means all
information required to make the disclosed information
substantially complete and not misleading which is in GENE's
possession and control and which GENE is permitted to share with
Amgen without violating the terms of any agreement between GENE
and any Third Party.
b. As of the Effective Date, and with respect to Material
Information as defined in Section 14.3.a. above, GENE is not
aware of any Third Party information that it has not disclosed
to Amgen that would materially affect Amgen's decision regarding
the merits of entering into this Agreement.
c. As of the Effective Date, GENE has sufficient legal and/or
beneficial title and ownership under, or sufficient rights to
use and license, the *****, GENE Background Patent Rights and
GENE Background Know-How as is necessary to fulfill its
obligations under this Agreement and to grant the licenses to
Amgen pursuant to this Agreement. As of the Effective Date GENE
has not granted, and shall not during the term of this
Agreement, grant any right, license, covenant, consent or
privilege to any Third Party or otherwise undertake any action,
either directly or indirectly, which would conflict in a
material respect with the rights granted to Amgen or interfere
in any material respect with any obligations of GENE set forth
in this Agreement.
d. *****
38
e. GENE has maintained and shall maintain and keep in full force
and effect all agreements (including license agreements, e.g.
*****) and filings (including patent filings) necessary to
perform its obligations hereunder. GENE (i) shall not consent to
any termination, modification, amendment or waiver of any of its
rights under ***** that may materially and adversely affect
Amgen's rights under this Agreement, without first obtaining
Amgen's prior written consent, which, with respect to matters
not related to the Research Field, such consent shall not be
reasonably withheld or delayed, (ii) has not and will not take
or fail to take any action that may lead to the termination,
modification, amendment or waiver of its rights under ***** that
would materially and adversely affect Amgen's rights under this
Agreement, and (iii) has and will take all necessary actions,
including without limitation payment of all fees to timely
exercise its option with respect to the subject matter of this
Agreement under *****. As of the Effective Date, GENE has not
received any notice of default, and, to the best of its
knowledge, is not in default of its obligations under *****.
f. As of the Effective Date, there is no pending or, to the best
knowledge of GENE, threatened litigation, and GENE has not
received any communication which alleges that GENE's activities
with respect to the ***** or proposed activities under this
Agreement would infringe or misappropriate any intellectual
property rights of any Third Party.
g. GENE has disclosed to Amgen all Material Information (as defined
above) of which GENE is aware and which GENE reasonably believes
to be material to the validity of the *****. Exhibit 2 contains
the complete list of ***** as of the Effective Date.
h. GENE has provided Amgen with a *****.
i. GENE covenants that during the term of this Agreement GENE shall
work exclusively with Amgen regarding the Research Field.
14.4 Disclaimer of Representations and Warranties. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR
WARRANTY TO THE OTHER PARTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OF THE PATENT RIGHTS LICENSED HEREUNDER,
OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES. Nothing in this Agreement shall be construed as a
representation or warranty by either Party that any Product Developed
or Commercialized is or will be effective, valuable, safe, non-toxic
or patentable.
39
ARTICLE 15
TERM AND TERMINATION
15.1 Term. This Agreement shall become effective on the Effective Date and
shall remain in full force and effect, unless earlier terminated
pursuant to this Article 15, until such time as Amgen provides written
notice to GENE that it no longer (i) intends to Develop or
Commercialize Products or (ii) is Developing or Commercializing
Products.
15.2 Termination by Amgen.
a. If the ***** has not been identified, as that research milestone
is defined in Section 8.4.a., on or before ***** months from the
Effective Date, Amgen may, at its option, provide written notice
of termination to GENE at any time thereafter until such time as
the ***** is identified or Amgen elects to advance the Research
Program to the ***** of the Research Plan pursuant to Section
8.4.a., and the Agreement shall automatically terminate *****
days after such prior written notice of termination is provided
to GENE.
b. At any time after the ***** has been identified, Amgen shall
have the right, in its sole discretion, to terminate this
Agreement by providing ***** days prior written notice of
termination to GENE.
c. The effects of any such termination under this Section 15.2 will
occur in accordance with Section 15.6.
15.3 Termination for Default.
a. In the event any material representation or warranty made
hereunder by either Party shall have been untrue in any material
respect ("Representation Default"), or upon any material breach
or material default of a material obligation under this
Agreement a Party ("Performance Default"), the Party not in
default ("Non-Defaulting Party") must first give the other Party
("Defaulting Party") written notice thereof ("Notice of
Default"), which notice must state the nature of the
Representation Default or Performance Default in reasonable
detail and must request that the Defaulting Party cure such
Representation Default or Performance Default within ***** days.
During any such ***** after receipt or delivery of a Notice of
Default under this Section 15.3.a. for which termination of this
Agreement is a remedy under Sections 15.3.b. and 15.3.c., all of
the Party's respective rights and obligations under the affected
parts of this Agreement, including but not limited to
Development, manufacture and Commercialization, shall (to the
extent applicable) remain in force and effect. If the Defaulting
Party shall dispute the existence, extent or nature of any
default set forth in a Notice of Default, the Parties shall use
good faith efforts to resolve the dispute in accordance with
Sections 2.4 and 2.5.
40
b. GENE Default. In the event of a Performance Default by GENE that
shall not have been cured within the period set forth in Section
15.3.a. above after receipt of a Notice of Default, Amgen may,
at its option, but in lieu of any right to terminate this
Agreement, exercise the rights set forth in Section 15.4 upon
prior written notice to GENE. In the event of a Representation
Default by GENE that shall not have been cured within the period
set forth in Section 15.3.a. above after receipt of a Notice of
Default, Amgen may, at its option, terminate this Agreement upon
***** days prior written notice to GENE and, in addition to any
other remedies which may be available at law or equity, Amgen
shall have the right to (i) *****, each with respect to a
representation(s) other than the representations set forth in
subparts a., c., e. and h. of Section 14.3, provided however,
that Amgen shall have provided such Notice of Default within
***** months after the Effective Date or before the
identification of the *****, whichever is later; (ii) *****,
each with respect to a representation(s) set forth in subpart a.
of Section 14.3, provided however, that Amgen shall have
provided such Notice of Default ***** months after the Effective
Date or before the identification of the *****, whichever is
later; and (iii) *****.
c. Amgen Default. In the event of a Representation Default by Amgen
that shall not have been cured within the period set forth in
Section 15.3.a. above after receipt of a Notice of Default,
GENE, at its option, may terminate this Agreement upon *****
days prior written notice to Amgen. In the event that any
Performance Default by Amgen arises out of (i) *****; (ii)
*****; (iii) *****; or (iv) *****, that in each case shall not
have been cured within the period set forth in Section 15.3.a.
above after receipt of a Notice of Default, GENE, at its option,
may terminate this Agreement upon ***** prior written notice to
Amgen. The effects of such termination will occur in accordance
with Section 15.6. In the event of a Performance Default by
Amgen other than regarding subsections (i) through (iv) of this
Section 15.3.c. that shall not have been cured within the period
set forth in Section 15.3.a. above after receipt of a Notice of
Default, GENE shall only be entitled to seek legal remedies, but
shall not be entitled to terminate or seek termination of this
Agreement, and all of Amgen's rights and obligations under this
Agreement shall remain in full force and effect.
15.4 Effects of GENE Default. In addition to any other remedies which may
be available at law or equity, but not the right to terminate or seek
termination of this Agreement, upon any uncured Performance Default by
GENE under Section 15.3(b), the following rights and obligations of
the Parties shall apply:
a. In the event that such uncured Performance Default arises out of
GENE's obligation to conduct the Research Program, (i) GENE's
rights and obligations to participate in the Research Program
pursuant to Articles 2 and 3 (including GENE's rights to
participate in the Joint Research Committee and Joint Steering
Committee to the extent that the JSC shall no longer have any
oversight responsibility with respect to the Research Program)
shall terminate, (ii) Amgen shall have the sole right and
responsibility for all aspects of the Research Program
41
going forward, and (iii) Amgen's obligations to fund GENE FTEs
pursuant to Section 8.2 and pay GENE research milestone payments
pursuant to Section 8.4 shall terminate.
b. In the event that such uncured Performance Default arises out of
GENE's obligation to participate in Co-Detailing any Product,
GENE's right to Co-Detail such Product pursuant to Sections 6.3
and 6.4 (including its right to participate in the Joint Sales
and Marketing Committee) shall terminate.
c. In the event that such uncured Performance Default arises out of
GENE's failure to pay its share of Development Costs pursuant to
Section 4.9, GENE's right to a Development Contribution Royalty
under Section 8.6.b. shall terminate (but not its right to a
Baseline Royalty under Section 8.6.a.). In addition, GENE's
rights and obligations to contribute to Development Costs
pursuant to Article 4 (including GENE's right to participate in
the Joint Development Committee), GENE's right to share profits
pursuant to Sections 6.5, 6.6, 6.7 and 6.8 and GENE's right to
Co-Detail pursuant to Sections 6.3 and 6.4 shall terminate.
d. In the event that such uncured Performance Default arises out of
GENE's failure to pay its share of Product Contribution pursuant
to Section 6.8, GENE's right to share profits pursuant to
Sections 6.5, 6.6, 6.7 and 6.8 shall terminate and GENE shall
have no right to any royalty payments pursuant to Sections 8.6.a
and 8.6.b with respect to the United States and/or Canada (as
appropriate).
15.5 Bankruptcy. All rights and licenses granted under or pursuant to this
Agreement by GENE are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
rights to "intellectual property" as defined under Section 101 of the
U.S. Bankruptcy Code. The Parties agree that Amgen shall retain and
may fully exercise all of its rights and elections under the U.S.
Bankruptcy Code. The Parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against GENE under the
U.S. Bankruptcy Code, Amgen shall be entitled to a complete duplicate
of (or complete access to, as appropriate) any intellectual property
and all embodiments of such intellectual property, and same, if not
already in Amgen's possession, shall be promptly delivered to Amgen
(i) upon any such commencement of a bankruptcy proceeding, upon
Amgen's written request therefor, unless Gene (or a trustee on behalf
of GENE) 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 GENE, upon written
request therefor by Amgen.
15.6 Effects of Termination. In addition to any other remedies which may be
available at law or equity, upon termination of this Agreement under
Section 15.2, Section 15.3.b. (except as specifically provided in
Section 15.4) or Section 15.3.c., the following rights and obligations
of the Parties shall apply:
42
a. In the event that Amgen terminates this Agreement (i) at any
time as a consequence of an uncured Representation Default by
GENE or (ii) in the event that GENE terminates this Agreement as
a consequence of an uncured Performance Default by Amgen in
accordance with Section 15.3.c. or Amgen terminates this
Agreement in accordance with Sections 15.2.a or 15.2.b, which
termination in any case occurs prior to the administration by
Amgen of any Product to human subjects under a Phase I Study
(the "Phase I Study Initiation"), the license granted by Amgen
under Section 9.2.a. to GENE shall terminate.
b. In the event that GENE terminates this Agreement as a
consequence of an uncured Performance Default by Amgen in
accordance with Section 15.3.c. or Amgen terminates this
Agreement in accordance with Section15.2.b, which termination in
any case occurs after Phase I Study Initiation has occurred and
no serious adverse events have been reported to Amgen, GENE may
notify Amgen in writing, within thirty (30) days following any
such termination, of its desire to obtain an *****, under the
Amgen Technology to make, use or sell only Product which is
identified as the clinical candidate in the applicable IND.
Notwithstanding the above, Amgen shall be under no obligation to
license to GENE *****.
c. Should GENE so notify Amgen pursuant to Section 15.6.b. above,
the parties will negotiate in good faith commercially reasonable
terms for such ***** days based upon terms and conditions
applicable to a product for a similar use and of similar market
potential at a similar stage in its product life as that of such
Product, taking into account *****. Such terms shall include,
without limitation, *****, for all of which Amgen will be
reasonably compensated. If the Parties are unable to agree upon
such terms within said ***** days in the event that (i) Amgen
terminates pursuant to Section 15.2.b., Amgen shall be free to
dispose of such rights; *****.
d. Amgen shall within ***** days destroy (and provide GENE with a
certification of such destruction signed by an officer of Amgen)
all of GENE's Confidential Information (other than with respect
to maintaining one (1) archival copy of Confidential Information
related thereto for its legal files, for the sole purpose of
determining its obligations under this Agreement) and Materials,
and shall provide GENE with certification by an officer of Amgen
that all such Confidential Information and Materials have been
destroyed or returned to Amgen, as appropriate.
e. In the event that (i) GENE does not notify Amgen of its desire
to obtain a license pursuant to Section 15.6.b.; or (ii) the
parties are unable to agree upon the terms of such license
pursuant to Section 15.6.c, GENE shall, within ***** days of the
occurrence of either of such events in (i) or (ii) above,
destroy (and provide Amgen with a certification of such
destruction signed by and officer of GENE) all of Amgen's
Confidential Information (other than with respect to maintaining
one (1) archival copy of Confidential Information related
thereto for its legal files, for the sole purpose of determining
its obligations under this Agreement) and Materials, and shall
provide Amgen with certification by an officer of GENE that
43
all such Confidential Information and Materials have been
destroyed or returned to Amgen, as appropriate.
f. The Parties shall immediately conduct a final accounting to
reconcile and calculate Development Costs in accordance with
Section 4.9 and/or Product Contribution in accordance with
Section 6.8.
g. The following provisions shall remain in full force and effect
after the expiration or termination of this Agreement: Article
1, Section 5.1 (unless negotiated otherwise between the Parties
pursuant to subpart c. above), Article 8 (only with respect to
payments due by Amgen at the time of termination), Section 9.1,
Section 9.4 (with respect to Joint Patent Rights), Section 9.5,
Section 9.7 (with respect to Joint Patent Rights and Joint
Know-How), Section 9.8, Section 9.9 (with respect to GENE, only
such claims or actions relating to matters prior to termination
in which GENE is also named), Section 9.12, Article 10 (only
with respect to accrued rights pursuant to Section 15.7),
Article 12, Article 13, Article 14 (subject to the time
restrictions set forth in Section 15.3.b), Article 15 and
Article 17.
h. Except as expressly set forth in this Section 15.6, all other
rights and obligations shall terminate.
15.7 Accrued Rights. Termination, relinquishment or expiration of this
Agreement for any reason in accordance with this Article 15 shall be
without prejudice to any rights which shall have accrued to the
benefit of either Party or any liability incurred by either Party
prior to the effective date of such termination, relinquishment or
expiration and shall not preclude either Party from pursuing all
rights and remedies it may have hereunder or at law or in equity with
respect to any breach of this Agreement nor prejudice either Party's
right to obtain performance of any obligation.
ARTICLE 16
CHANGE OF CONTROL
16.1 Change of Control. If GENE enters into or proposes to enter into a
transaction which will result in a Change of Control of GENE during
the term of this Agreement, GENE may notify Amgen of such transaction
at any time prior to entering into such transaction and if GENE does
not notify Amgen of such transaction prior to entering into it, GENE
shall promptly notify Amgen of such transaction upon entering into it.
Within ***** days of such notice, Amgen shall have the right to send
written notice ***** and Amgen's obligation to fund GENE FTEs pursuant
to Section 8.2) and Amgen shall have the sole right and responsibility
for all aspects of the ***** going forward; (ii) GENE's rights and
obligations under Sections *****; (iii) if Amgen exercises its
termination right prior to or during the notice period set forth in
Section 6.2, GENE's right to *****; (iv) GENE's right to *****
pursuant to Sections *****; (v) GENE's right to *****; and/or (vi)
Amgen's obligation to ***** pursuant to Section *****. Unless
explicitly set forth otherwise in such notice, such notice shall
44
be effective to ***** all rights and obligations set forth in
subsections (i)-(vi) hereinabove upon the occurrence of the Change of
Control. Should Amgen fail to notify GENE within such ***** period,
Amgen shall have no further rights under this Section 16.1 as a result
of the Change of Control of GENE identified in GENE's notice to Amgen.
16.2 Effect on Royalty Rates. In the event Amgen exercises its termination
right pursuant to Section 16.1, GENE shall be entitled to the
following royalties *****:
a. ***** as follows:
GENE'S ACTUAL CONTRIBUTION TO TOTAL APPLICABLE DEVELOPMENT CONTRIBUTION
EARLY DEVELOPMENT COSTS ROYALTY
***** *****
***** *****
***** *****
***** *****
***** *****
***** *****
***** *****
b. *****:
GENE'S EARLY GENE'S ACTUAL CONTRIBUTION TO APPLICABLE
CONTRIBUTION TOTAL LATE DEVELOPMENT COSTS DEVELOPMENT
LEVEL CONTRIBUTION ROYALTY
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
***** ***** *****
c. *****.
16.3 Effect on Profit Share. In the event Amgen exercises its ***** right
pursuant to Section 16.1 after GENE has elected to share profits in
accordance with Section 6.2,
45
with respect to sales of Product in the United States and/or Canada
(as appropriate), *****.
16.4 Effect on Milestone Payments. Any such ***** under Section 16.1 above
shall not relieve Amgen from its obligation to pay GENE milestone
payments in accordance with Section 8.4 and Section 8.5.
16.5 Wind Down. In the event Amgen exercises its termination right pursuant
to Section 16.1, the Parties shall cooperate to ensure an orderly wind
down of related activities as soon as practicable. In particular,
should Amgen exercise its termination right pursuant to Section
16.1(i), GENE shall provide Amgen with reasonable technical assistance
in transferring the activities of GENE researchers involved in the
Research Program to Amgen, including any Materials Controlled by GENE
necessary or desirable for Amgen to continue the Research Plan and
Amgen shall pay for the FTE Costs associated with transferring such
Research Program activities to Amgen as set forth in this Section
16.5; provided however, GENE shall not be required to provide such
technical assistance for more than ***** days following the effective
date of such termination. Should Amgen exercise its termination right
pursuant to Section 16.1(iv), the Parties shall cooperate to ensure an
orderly wind down of all Co-Detailing in the United States and/or
Canada as soon as practicable.
ARTICLE 17
GENERAL
17.1 Conditions to Closing. The obligations of each Party to the other
Party under this Agreement are subject to fulfillment, on or before
the Effective Date, of the execution and delivery of the Stock
Purchase Agreement.
17.2 Force Majeure. Both Parties shall be excused from the performance of
their obligations under this Agreement to the extent that such
performance is prevented by Force Majeure and the nonperforming Party
promptly provides notice of the prevention to the other Party. Such
excuse shall be continued so long as the condition constituting Force
Majeure continues. When such circumstances arise, the Parties shall
discuss what, if any, modification of the terms of this Agreement may
be required in order to arrive at an equitable solution.
17.3 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this
Agreement and shall be deemed to have been sufficiently given for all
purposes if mailed by first class certified or registered mail,
postage prepaid, express delivery service or personally delivered, or
if sent by facsimile, electronic transmission confirmed. Unless
otherwise notified in writing, the mailing addresses and fax numbers
for notice of the Parties shall be as described below.
46
For GENE: Genome Therapeutics Corporation
100 Beaver Street
Waltham, Massachusetts 02453
Facsimile: *****
Attention: 1. Martin Williams,
Senior Vice President,
Corporate Development;
2. General Counsel
With a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
One Financial Center
Boston, MA 02111
Facsimile: (617) 542-2241
Attention: 1. Thomas R. Burton, III, Esq.;
2. John J. Cheney, III, Esq.
For Amgen: Amgen Inc.
One Amgen Center Drive
Thousand Oaks, CA 91320-1799
Facsimile: (805) 499-8011
Attention: Vice President, Licensing
With a copy to: Corporate Secretary
17.4 Maintenance of Records. Each Party shall keep and maintain all records
required by law or regulation with respect to Products and shall make
copies of such records available to the other Party upon request.
17.5 No Strict Construction. This Agreement has been prepared jointly and
shall not be strictly construed against either Party.
17.6 Performance by Affiliates. GENE acknowledges that obligations under
this Agreement may be performed by Affiliates of Amgen and that Amgen
may grant its Affiliates a license or sublicense to (or covenant not
to sue) under GENE Technology, Joint Patent Rights and Joint Know-How,
as applicable. Amgen guarantees performance of this Agreement by its
Affiliates, notwithstanding any assignment to Affiliates in accordance
with Section 17.8 below. Wherever in this Agreement Amgen delegates
responsibility to Affiliates or local operating entities, Amgen agrees
that such entities may neither make decisions inconsistent with this
Agreement, amend the terms of this Agreement nor act contrary to its
terms in any way.
17.7 Subcontracting. GENE acknowledges and agrees that Amgen may
subcontract any or all portions of its work involved in the Research
Program and the Development, manufacture and Commercialization of
Products to a Third Party, and that Amgen may as part of such
subcontract grant to such Third Party a *****; provided however, that
Amgen remains responsible for the satisfactory accomplishment of such
work in
47
accordance with the terms and conditions of this Agreement and that
the subcontractor shall enter into a written agreement binding such
subcontractor to the obligations Amgen has to GENE (and containing any
other provisions normal and customary for similar types of
agreements). GENE may subcontract certain support functions related to
its work involved in the Research Program, including any work to be
performed by *****, only upon the prior written approval of *****;
provided however, that GENE remains responsible for the satisfactory
accomplishment of such work in accordance with the terms and
conditions of this Agreement and that the subcontractor shall enter
into a written agreement binding such subcontractor to the obligations
GENE has to Amgen (and containing any other provisions normal and
customary for similar types of agreements).
17.8 Assignment. Except as set forth in Sections 17.6 and 17.7, neither
Party may assign or transfer this Agreement or any rights or
obligations hereunder without the prior written consent of the other,
except that a Party may make such an assignment without the other
Party's consent to Affiliates or to an entity that acquires all or
substantially all of the business of such Party or the business of
such Party to which this Agreement relates, whether in a merger,
consolidation, reorganization, acquisition, sale or otherwise. This
Agreement shall be binding on the successors and assigns of the
assigning Party, and the name of a Party appearing herein shall be
deemed to include the name(s) of such Party's successors and permitted
assigns to the extent necessary to carry out the intent of this
Agreement. Any assignment or attempted assignment by either Party in
violation of the terms of this Section 17.8 shall be null and void and
of no legal effect. The assigning Party shall forward to the other
Party a copy of those portions of each fully executed assignment
agreement which relate to the assumption of the rights and
responsibilities of the assigning Party, within sixty (60) days of the
execution of such assignment agreement.
17.9 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
17.10 Severability. If any one or more of the provisions of this Agreement
are held to be invalid or unenforceable by any court of competent
jurisdiction from which no appeal can be or is taken, the provision
shall be considered severed from this Agreement and shall not serve to
invalidate any remaining provisions hereof. The Parties shall make a
good faith effort to replace any invalid or unenforceable provision
with a valid and enforceable one such that the objectives contemplated
by the Parties when entering this Agreement, as evidenced by the terms
of this Agreement in accordance with Section 17.19, may be realized.
17.11 Headings. The headings for each Article and Section in this Agreement
have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained
in the particular Article or Section. Unless otherwise specified, (a)
references in this Agreement to any Article, Section, Exhibit or
Schedule shall mean references to such Article, Section, Exhibit or
Schedule of
48
this Agreement, (b) references in any Section to any clause are
references to such clause of such Section, and (c) references to any
agreement, instrument or other document in this Agreement refer to
such agreement, instrument or other document as originally executed
or, if subsequently varied, replaced or supplemented from
time-to-time, as so varied, replaced or supplemented and in effect at
the relevant time of reference thereto.
17.12 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 Agreement.
17.13 Independent Contractors. The relationship between GENE and Amgen
created by this Agreement is solely that of independent contractors.
This Agreement does not create any agency, distributorship,
employee-employer, partnership, joint venture or similar business
relationship between the Parties. Neither Party is a legal
representative of the other Party, and neither Party can assume or
create any obligation, representation, warranty or guarantee, express
or implied, on behalf of the other Party for any purpose whatsoever.
Each Party shall use its own discretion and shall have complete and
authoritative control over its employees and the details of performing
its obligations under this Agreement.
17.14 No Benefit of Third Parties. The representations, warranties,
covenants and agreements set forth in this Agreement are for the sole
benefit of the Parties hereto and their successors and permitted
assigns, and they shall not be construed as conferring any rights on
any Third Parties.
17.15 Use of Names, Logos or Symbols. No Party hereto shall use, and no
rights are granted in or to, the names or trademarks (including the
names "Amgen" and "GENE"), physical likeness, employee names or other
symbols of the other Party for any purpose (including, without
limitation, private or public securities placements) without the prior
written consent of the affected Party, such consent not to be
unreasonably withheld or delayed so long as such use is limited to
objective statement of fact rather than for endorsement or publicity
purposes. Neither Party shall use any trademark which either
substantially resembles or is confusingly similar to, misleading or
deceptive with respect to, or which dilutes any of the other Party's
trademarks in connection with the subject matter of this Agreement.
17.16 No Waiver. Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other matter
shall not constitute a waiver of such Party's rights to the future
enforcement of its rights under this Agreement, except with respect to
an express written and signed waiver relating to a particular matter
for a particular period of time.
17.17 Offset. Either Party shall be entitled to offset, against any payments
due and payable to the other Party hereunder, all such amounts due and
payable hereunder but not yet paid by the other Party to the Party
seeking such offset. Prior to applying an offset
49
under this Section 17.17, the Party seeking such offset shall first
give the other Party written notice of such due and payable amounts
and shall request the other Party to pay all such due and payable
amounts within thirty (30) days from the date of such notice.
17.18 Export Requirements. It is understood and acknowledged that the
transfer of certain commodities and technical data is subject to
United States laws and regulations controlling the export of such
commodities and technical data, including all Export Administration
Regulations of the United States Department of Commerce. Each Party
hereby agrees and by entering into this Agreement gives written
assurance that it shall comply with all United States laws and
regulations controlling the export of commodities and technical data
within Information and Materials, that it will be solely responsible
for any violation of any such laws and regulations by itself, its
Affiliates or its sublicensees, and that it will Indemnify, defend and
hold the other Party harmless from any liability in the event of any
legal action of any nature occasioned by such violation, pursuant to
Section 13.1 (in the case of Amgen) or Section 13.2 (in the case of
GENE).
17.19 Entire Agreement; Amendment. This Agreement (including all Exhibits
and Schedules, including the Stock Purchase Agreement) set forth the
complete, final and exclusive agreement and all the covenants,
promises, agreements, warranties, representations, conditions and
understandings between the Parties hereto and supersedes and
terminates all prior agreements and understandings between the
Parties; on the Effective Date of this Agreement, the Confidential
Disclosure Agreement dated March 11, 2002 (Amgen Reference No.
200201526) is hereby superseded, provided that all Confidential
Information disclosed therein shall be treated as if disclosed under,
and shall be subject to the terms of, this Agreement. There are no
covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between the
Parties other than as are set forth herein and therein. This Agreement
may only be modified or supplemented in a writing expressly stated for
such purpose and signed by an authorized officer of each Party (i.e.,
it may not be modified by any purchase order, change order,
acknowledgment, order acceptance, standard terms of sale, invoice or
the like); except that the Joint Research Committee may amend or
update the Research Plan as expressly permitted hereby.
17.20 Exhibits and Schedules. All Exhibits and Schedules referenced herein
and attached hereto are incorporated in this Agreement by reference.
In case of any discrepancies between the language incorporated from
the Exhibits and Schedules and the terms of the Sections, the terms of
the Sections shall prevail; provided however, where Sections of the
Agreement make explicit reference to a substantive matter contained in
an Exhibit or Schedule, or with respect to definitions set forth in
the Exhibits or Schedules, the substantive matter or definitions
contained in such Exhibit and Schedules shall prevail.
50
17.21 Applicable Law. This Agreement shall be governed by and interpreted in
accordance with the substantive laws of the State of Delaware, without
reference to the conflicts of law principles thereof. The parties
hereby acknowledge their diversity (GENE having its principal place of
business in Massachusetts and Amgen having its principal place of
business in California) and each of the Parties hereby submits to the
jurisdiction of the courts of the State of Delaware, both state and
federal. The venue for such proceedings shall be the state of
Delaware. As between the Parties, any dispute, controversy or claim
relating to the scope, validity, enforceability or infringement of any
licensed Patent Rights shall be submitted to a court of competent
jurisdiction in the Territory in which such licensed Patent Rights
were granted or arose.
51
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in
duplicate by proper persons thereunto duly authorized.
AMGEN INC. GENOME THERAPEUTICS CORP.
Kevin W. Sharer Steven M. Rauscher
Chairman of the Board, Chief Executive President and Chief Executive Officer
Officer and President
52
EXHIBIT 1
RESEARCH PLAN
*****
EXHIBIT 1
RESEARCH PLAN
*****
EXHIBIT 1
RESEARCH PLAN
*****
EXHIBIT 1
RESEARCH PLAN
*****
EXHIBIT 1
RESEARCH PLAN
*****
EXHIBIT 1
RESEARCH PLAN
*****
EXHIBIT 2
*****
2-1
EXHIBIT X
*****
Y-1
EXHIBIT Y
*****
Y-2
S-1