[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT 10.36
PRODUCT DEVELOPMENT AND
COMMERCIALIZATION AGREEMENT
BETWEEN
SMITHKLINE BEECHAM CORPORATION
DOING BUSINESS AS GLAXOSMITHKLINE
AND
EXELIXIS, INC.
DATED AS OF
OCTOBER 28, 2002
ARTICLE 1 DEFINITIONS 2
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 "Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 "Alliance Managers" . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 "Artemis" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 "Artemis Agreement" . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 "Artemis Intellectual Property" . . . . . . . . . . . . . . . . . 2
1.9 "Back-up Compound". . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 "Bankruptcy Code" . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 "Biotherapeutic Product". . . . . . . . . . . . . . . . . . . . . 3
1.13 "Biotherapeutic Target" . . . . . . . . . . . . . . . . . . . . . 3
1.14 "Breaching Party" . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 "Calendar Quarter". . . . . . . . . . . . . . . . . . . . . . . . 3
1.16 "cGMP". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 "Change of Control" . . . . . . . . . . . . . . . . . . . . . . . 3
1.20 "Collaboration Committee" . . . . . . . . . . . . . . . . . . . . 3
1.21 "Collaboration Compound". . . . . . . . . . . . . . . . . . . . . 3
1.22 "Collaboration Targets" . . . . . . . . . . . . . . . . . . . . . 3
1.23 "Collaboration Technology". . . . . . . . . . . . . . . . . . . . 4
1.24 "Combination Product" . . . . . . . . . . . . . . . . . . . . . . 4
1.25 "Commercialization Liaison" . . . . . . . . . . . . . . . . . . . 4
1.26 "Commercialization Program" . . . . . . . . . . . . . . . . . . . 4
1.27 "Commercialization Term". . . . . . . . . . . . . . . . . . . . . 4
1.28 "Competitive Infringement". . . . . . . . . . . . . . . . . . . . 4
1.29 "Competitive Product" . . . . . . . . . . . . . . . . . . . . . . 4
1.31 "Compound Patents". . . . . . . . . . . . . . . . . . . . . . . . 4
1.32 "Confidential Information". . . . . . . . . . . . . . . . . . . . 4
1.33 "Contract Year" . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.34 "Control," "Controls," "Controlled" or "Controlling". . . . . . . 4
1.35 "Co-promote" or "Co-promotion". . . . . . . . . . . . . . . . . . 5
1.36 "Co-promotion Right". . . . . . . . . . . . . . . . . . . . . . . 5
1.37 "Cost of Goods Sold". . . . . . . . . . . . . . . . . . . . . . . 5
1.39 "Developability Criteria" . . . . . . . . . . . . . . . . . . . . 5
1.40 "Development Candidate" . . . . . . . . . . . . . . . . . . . . . 5
1.41 "Development Candidate Liaison" . . . . . . . . . . . . . . . . . 5
1.42 "Development Candidate Plan". . . . . . . . . . . . . . . . . . . 5
1.43 "Development Compound". . . . . . . . . . . . . . . . . . . . . . 5
1.44 "Development Election". . . . . . . . . . . . . . . . . . . . . . 5
1.45 "Development Information" . . . . . . . . . . . . . . . . . . . . 5
1.46 "Development Operating Plan" or "DOP" . . . . . . . . . . . . . . 5
1.47 "Development Program" . . . . . . . . . . . . . . . . . . . . . . 5
1.48 "Development Term". . . . . . . . . . . . . . . . . . . . . . . . 6
1.49 "Disclosing Party". . . . . . . . . . . . . . . . . . . . . . . . 6
1.50 "Drafting Party". . . . . . . . . . . . . . . . . . . . . . . . . 6
1.51 "Effective Date". . . . . . . . . . . . . . . . . . . . . . . . . 6
1.52 "EMEA". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.53 "Employee Agreements" . . . . . . . . . . . . . . . . . . . . . . 6
1.54 "Encumbered Compound" . . . . . . . . . . . . . . . . . . . . . . 6
1.55 "Encumbered Target" . . . . . . . . . . . . . . . . . . . . . . . 6
1.56 "Excluded Targets". . . . . . . . . . . . . . . . . . . . . . . . 6
1.57 "Executive Officers". . . . . . . . . . . . . . . . . . . . . . . 6
1.58 "EXEL". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.59 "EXEL Biotherapeutic Product" . . . . . . . . . . . . . . . . . . 6
1.61 "EXEL Know-How" . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.62 "EXEL Patents". . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.63 "EXEL Product". . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.64 "EXEL Technology" . . . . . . . . . . . . . . . . . . . . . . . . 7
1.65 "Existing Biotherapeutic Target". . . . . . . . . . . . . . . . . 7
1.66 "Existing Compound" . . . . . . . . . . . . . . . . . . . . . . . 7
1.67 "Existing Targets". . . . . . . . . . . . . . . . . . . . . . . . 7
1.68 "Existing Third Party Collaboration". . . . . . . . . . . . . . . 7
1.69 "Expanded Program Option" . . . . . . . . . . . . . . . . . . . . 7
1.70 "Extension Period". . . . . . . . . . . . . . . . . . . . . . . . 7
1.71 "FDA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.72 "Field. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.73 "First Commercial Sale" . . . . . . . . . . . . . . . . . . . . . 8
1.74 "First Option Period" . . . . . . . . . . . . . . . . . . . . . . 8
1.75 "Follow-up Compound". . . . . . . . . . . . . . . . . . . . . . . 8
1.76 "Future Third Party Collaboration". . . . . . . . . . . . . . . . 8
1.77 "Gross Margin". . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.78 "GSK" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.80 "GSK Know-How". . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.82 "GSK Patents" . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.84 "GSK Technology". . . . . . . . . . . . . . . . . . . . . . . . . 9
1.87 "Included Compound" . . . . . . . . . . . . . . . . . . . . . . . 9
1.88 "IND" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.89 "Indemnitee" . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.90 "Information" . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.91 "Invention" . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.92 "Loan Agreement". . . . . . . . . . . . . . . . . . . . . . . . . 10
1.93 "Licensed Product(s)" . . . . . . . . . . . . . . . . . . . . . . 10
1.94 "Licensed Product Diligence Plan" . . . . . . . . . . . . . . . . 10
1.95 "Limited Program Option". . . . . . . . . . . . . . . . . . . . . 10
1.96 "Losses". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.97 "Major Country" . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.99 "Marketing Approval". . . . . . . . . . . . . . . . . . . . . . . 10
1.100 "Marketing Approval Application" or "MAA" . . . . . . . . . . . . 10
1.102 "Net Sales" . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.103 "Non-breaching Party" . . . . . . . . . . . . . . . . . . . . . . 12
1.104 "Non-Selected Target" . . . . . . . . . . . . . . . . . . . . . . 12
1.105 "North America" . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.106 "Oncology Collaborator" . . . . . . . . . . . . . . . . . . . . . 12
1.108 "Other Field" . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.109 "Party" or "Parties". . . . . . . . . . . . . . . . . . . . . . . 12
1.110 "Patent". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.111 "Patent Costs". . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.112 "Patent Subcommittee" . . . . . . . . . . . . . . . . . . . . . . 12
1.113 "Payee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.114 "Payor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.115 "Person". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.116 "Pipeline Option Period". . . . . . . . . . . . . . . . . . . . . 12
1.117 "Pivotal Registration Study". . . . . . . . . . . . . . . . . . . 12
1.118 "Product" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.119 "Product Acceptance Milestone". . . . . . . . . . . . . . . . . . 13
1.120 "Product Report". . . . . . . . . . . . . . . . . . . . . . . . . 13
1.121 "Proposed Biotherapeutic Target". . . . . . . . . . . . . . . . . 13
1.122 "Proof of Concept Trial" or "PoC Trial" . . . . . . . . . . . . . 13
1.123 "Prosecuting Party" . . . . . . . . . . . . . . . . . . . . . . . 13
1.124 "Prosecution and Maintenance" or "Prosecute and Maintain" . . . . 13
1.125 "Receiving Party" . . . . . . . . . . . . . . . . . . . . . . . . 13
1.126 "Refused Candidate" . . . . . . . . . . . . . . . . . . . . . . . 13
1.127 "Regulatory Authority" or "Regulatory Authorities". . . . . . . . 13
1.128 "Report Date" . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.129 "Research and Development Payments" . . . . . . . . . . . . . . . 13
1.130 "Returned Licensed Product" . . . . . . . . . . . . . . . . . . . 13
1.131 "Review Subcommittee" . . . . . . . . . . . . . . . . . . . . . . 13
1.133 "Second Option Period". . . . . . . . . . . . . . . . . . . . . . 14
1.134 "Stock Purchase Agreement". . . . . . . . . . . . . . . . . . . . 14
1.135 "Subcommittee". . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.136 "Subject Transaction" . . . . . . . . . . . . . . . . . . . . . . 14
1.137 "Sublicensee" . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.138 "Subsequent Product Report" . . . . . . . . . . . . . . . . . . . 14
1.139 "Subsequently Affiliated Company" . . . . . . . . . . . . . . . . 14
1.140 "Successful PoC Completion" . . . . . . . . . . . . . . . . . . . 14
1.141 "Target Product Profile". . . . . . . . . . . . . . . . . . . . . 14
1.142 "Term". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.143 "Territory" . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.144 "Third Party" . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.145 "United States" or "U.S." . . . . . . . . . . . . . . . . . . . . 14
1.146 "Written Disclosure". . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 2 OVERSIGHT OF THE COLLABORATION 15
2.1 In General. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.2 The Collaboration Committee . . . . . . . . . . . . . . . . . . . 15
2.3 Alliance Managers . . . . . . . . . . . . . . . . . . . . . . . . 18
2.4 Liaisons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.5 Biotherapeutic Targets. . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 3 DEVELOPMENT PROGRAM 19
3.1 Commencement; Term . . . . . . . . . . . . . . . . . . . . . . . . 19
3.2 Objectives; Diligence. . . . . . . . . . . . . . . . . . . . . . . 20
3.3 Development Operating Plan; Development Candidate Plan(s). . . . . 24
3.4 Development Candidate Liaison. . . . . . . . . . . . . . . . . . . 27
3.5 Program Option Election. . . . . . . . . . . . . . . . . . . . . . 27
3.6 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . 29
3.7 Exchange of Information. . . . . . . . . . . . . . . . . . . . . . 30
3.8 Development Program Funding. . . . . . . . . . . . . . . . . . . . 30
3.9 Future Acquired Technology . . . . . . . . . . . . . . . . . . . . 32
3.10 GSK Technology . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.11 Subcontracting . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 4 GKS'S ELECTION RIGHTS 33
4.1 Development Election. . . . . . . . . . . . . . . . . . . . . . . 33
4.2 Product Report. . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3 Development Election Options. . . . . . . . . . . . . . . . . . . 33
4.4 The Discussion Opportunity. . . . . . . . . . . . . . . . . . . . 35
ARTICLE 5 GRANT OF RIGHTS; COMMERCIALIZATION 36
5.1 License Grants. . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2 Technology Transfer . . . . . . . . . . . . . . . . . . . . . . . 37
5.3 Commercialization Program . . . . . . . . . . . . . . . . . . . . 38
5.4 Competitive Products. . . . . . . . . . . . . . . . . . . . . . . 40
5.5 Returned Licensed Products. . . . . . . . . . . . . . . . . . . . 41
ARTICLE 6 MILESTONES AND ROYALTIES; PAYMENTS 42
6.1 Upfront Payment to EXEL . . . . . . . . . . . . . . . . . . . . . 42
6.2 Milestones Payments to EXEL . . . . . . . . . . . . . . . . . . . 42
6.3 Royalty Payments to EXEL. . . . . . . . . . . . . . . . . . . . . 45
6.4 Royalty Payments to GSK . . . . . . . . . . . . . . . . . . . . . 48
6.5 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.6 Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.8 Credit against Payments for Third Party License . . . . . . . . . 51
6.9 Compulsory Licenses . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 7 EXCLUSIVITY 52
7.1 EXEL Prohibited Activities. . . . . . . . . . . . . . . . . . . . 52
7.2 EXEL Permitted Activities . . . . . . . . . . . . . . . . . . . . 52
7.3 GSK Activities. . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.4 Existing Third Party Collaborations . . . . . . . . . . . . . . . 53
7.5 Excluded Compounds. . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 8 OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS 54
8.1 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.2 Patent Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.3 Enforcement Rights. . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 9 CONFIDENTIALITY 58
9.1 Confidentiality; Exceptions . . . . . . . . . . . . . . . . . . . 58
9.2 Authorized Disclosure . . . . . . . . . . . . . . . . . . . . . . 59
9.3 Additional Confidentiality Requirements . . . . . . . . . . . . . 59
9.4 Termination of Prior Agreement. . . . . . . . . . . . . . . . . . 60
9.5 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.6 Publications. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 10 REPRESENTATIONS; WARRANTIES AND COVENANTS 60
10.1 Representations and Warranties of Both Parties. . . . . . . . . . 60
10.2 Representations and Warranties of EXEL. . . . . . . . . . . . . . 61
10.3 Covenants of EXEL . . . . . . . . . . . . . . . . . . . . . . . . 63
10.4 Representation and Warranty of GSK. . . . . . . . . . . . . . . . 64
10.5 Covenants of GSK. . . . . . . . . . . . . . . . . . . . . . . . . 64
10.6 Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 11 INDEMNIFICATION; INSURANCE 64
11.1 Indemnification by GSK. . . . . . . . . . . . . . . . . . . . . . 64
11.2 Indemnification by EXEL . . . . . . . . . . . . . . . . . . . . . 65
11.3 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
11.4 Complete Indemnification. . . . . . . . . . . . . . . . . . . . . 65
11.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE 12 TERM AND TERMINATION 66
12.1 Term; Expiration. . . . . . . . . . . . . . . . . . . . . . . . . 66
12.2 Termination for Cause; Other Breaches . . . . . . . . . . . . . . 66
12.3 GSK Unilateral Termination Rights . . . . . . . . . . . . . . . . 67
12.4 Termination for Insolvency. . . . . . . . . . . . . . . . . . . . 67
12.5 Effect of Termination upon Certain Payment Terms. . . . . . . . . 67
12.6 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE 14 MISCELLANEOUS 79
14.1 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
14.2 Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . . 80
14.3 Governing Law; Jurisdiction . . . . . . . . . . . . . . . . . . . 80
14.5 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
14.7 Performance Warranty. . . . . . . . . . . . . . . . . . . . . . . 81
14.8 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . 81
14.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
14.10 Export Clause . . . . . . . . . . . . . . . . . . . . . . . . . . 82
14.11 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
14.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 83
14.13 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 83
14.14 Independent Contractors . . . . . . . . . . . . . . . . . . . . . 83
14.15 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
14.16 Use of Name . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
14.17 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . 83
14.18 Further Actions . . . . . . . . . . . . . . . . . . . . . . . . . 83
14.19 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . 83
14.20 Construction of Agreement . . . . . . . . . . . . . . . . . . . . 83
14.21 Supremacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
14.22 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 84
LIST OF SCHEDULES
Schedule 1.62 . . . . . . . . . . . . . . EXEL Patents
Schedule 1.65 . . . . . . . . . . . . . . Existing Biotherapeutic Targets
Schedule 1.66 . . . . . . . . . . . . . . Existing Compounds
Schedule 1.67 . . . . . . . . . . . . . . Existing Targets
Schedule 1.68 . . . . . . . . . . . . . . Existing Third Party Collaborations
Schedule 3.2.3(f) . . . . . . . . . . . . Minimum Information Requirements for EXEL's Periodic Reports
Schedule 4.2. . . . . . . . . . . . . . . Criteria to Be Included in Product Reports
Schedule 5.1.1. . . . . . . . . . . . . . Sample GSK Internal Development Activities
Schedule 6.3.4. . . . . . . . . . . . . . Examples of Application of Milestone and Royalty Payments
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
PRODUCT DEVELOPMENT AND
COMMERCIALIZATION AGREEMENT
THIS PRODUCT DEVELOPMENT AND COMMERCIALIZATION AGREEMENT is made as of the 28th
day of October, 2002 (the "EFFECTIVE DATE") by and between Exelixis, Inc., a
Delaware corporation ("EXEL"), and SmithKline Beecham Corporation, a
Pennsylvania corporation, doing business as GlaxoSmithKline ("GSK"). EXEL and
GSK are each referred to herein by name or as a "PARTY" or, collectively, as the
"PARTIES."
RECITALS
A. EXEL has developed certain capabilities for the discovery and
development of pharmaceutical products for the treatment of human diseases or
conditions.
B. GSK possesses pharmaceutical research, development, manufacturing and
commercialization expertise.
C. GSK desires to engage in a collaborative effort with EXEL, pursuant to
which GSK shall partially fund the research costs incurred by EXEL, and EXEL
shall engage in a research and development program to discover and develop
compounds with demonstrated efficacy in humans (i.e., completion of Phase IIa
clinical trials) that will be offered by EXEL to GSK.
D. At the end of Contract Year Two (as defined below) GSK shall have the
ability to select, in its sole discretion, either the Limited Program Option (as
defined below) or the Expanded Program Option (as defined below).
E. From the compounds offered by EXEL hereunder, GSK may accept for further
development and commercialization, for any and all uses in the Territory (as
defined below), [ * ] compounds in the event GSK [ * ], or [ * ] compounds in
the event GSK [ * ], all on the terms and conditions set forth herein.
F. Upon acceptance of such compounds by GSK, EXEL shall grant to GSK, and
GSK shall obtain, an exclusive license in the Territory under this Agreement to
make, have made, use, sell, offer for sale and import certain Licensed Products
(as defined below) throughout the Territory on the terms and conditions set
forth herein.
G. The Parties acknowledge that any rights GSK acquires under this
Agreement, as defined below, will be held by GSK in accordance with GSK's and
its group's inter-company agreements, as in effect from time to time.
H. Contemporaneously with the execution of this Agreement, the Parties have
executed: (i) a Stock Purchase and Stock Issuance Agreement (the "STOCK PURCHASE
AGREEMENT") under which (A) GSK shall purchase common stock of EXEL; and (B)
EXEL shall have the option to sell to GSK additional shares of common stock of
EXEL at a certain specified point in time; and (ii) a Loan and Security
Agreement (the "LOAN AGREEMENT") under which GSK shall make available a loan
against which EXEL may draw down advances during the Development Term (as
defined below) of up to an aggregate maximum total of Eighty-Five Million
Dollars ($85,000,000) in the event GSK [ * ] or [ * ] in the event GSK [ * ].
Now, therefore, in consideration of the premises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth
in this Article 1 unless context dictates otherwise:
1.1 "ACTIVITY THRESHOLD" shall mean[ * ].
1.2 "AFFILIATE" shall mean any Person, whether de jure or de facto, which
directly or indirectly through one (1) or more intermediaries controls, is
controlled by, or is under common control with, a Party to this Agreement. A
Person shall be deemed to "control" another Person if it (i) owns, directly or
indirectly, beneficially or legally, at least fifty percent (50%) of the
outstanding voting securities or capital stock (or such lesser percentage which
is the maximum allowed to be owned by a Person in a particular jurisdiction) of
such other Person, or has other comparable ownership interest with respect to
any Person other than a corporation; or (ii) has the power, whether pursuant to
contract, ownership of securities or otherwise, to direct the management and
policies of the Person.
1.3 "AGREEMENT" shall mean this Product Development and Commercialization
Agreement together with the recitals and all exhibits, schedules and attachments
hereto.
1.4 "ALLIANCE MANAGERS" shall have the meaning assigned to such term in
Section 2.3.
1.5 "ANNUAL RESEARCH AND DEVELOPMENT PAYMENTS" shall have the meaning
assigned to such term in Section 3.8.1.
1.6 "ARTEMIS" shall have the meaning assigned to such term in Section
8.1.1(a).
1.7 "ARTEMIS AGREEMENT" shall that certain Asset Purchase and Transfer
Agreement between Artemis Pharmaceuticals GmbH and Exelixis Deutschland GmbH
dated as of December 18, 2001.
1.8 "ARTEMIS INTELLECTUAL PROPERTY" shall have the meaning assigned to such
term in Section 10.2.15.
1.9 "BACK-UP COMPOUND" shall mean [ * ].
1.10 "BANKRUPTCY CODE" shall have the meaning assigned to such term in
Section 12.4.2.
1.11 "BIOTECHNOLOGY COMPANY" shall have the meaning assigned to such term
in Section 13.2.2.
1.12 "BIOTHERAPEUTIC PRODUCT" shall mean [ * ].
1.13 "BIOTHERAPEUTIC TARGET" shall mean [ * ].
1.14 "BREACHING PARTY" shall have the meaning assigned to such term in
Section 12.2.1.
1.15 "CALENDAR QUARTER" shall mean a period of three (3) consecutive months
ending at midnight, Eastern Time on the last day of March, June, September, or
December, respectively.
1.16 "CGMP" shall mean current Good Manufacturing Practices as defined in
Parts 210 and 211 of Title 21 of the U.S. Code of Federal Regulations, as may be
amended from time to time, or any successor thereto.
1.17 "CHANGE OF CONTROL" shall mean a transaction in which [ * ].
1.18 "CHANGE OF CONTROL COMPOUND" shall have the meaning assigned to such
term in Section 13.1.2(f)(i).
1.19 "CHANGE OF CONTROL LICENSED PRODUCT" shall have the meaning assigned
to such term in Section 13.1.2(f)(i).
1.20 "COLLABORATION COMMITTEE" shall have the meaning assigned to such term
in Section 2.2.
1.21 "COLLABORATION COMPOUND" shall mean [ * ].
1.22 "COLLABORATION TARGETS" shall mean [ * ].
1.23 "COLLABORATION TECHNOLOGY" shall mean [ * ].
1.24 "COMBINATION PRODUCT" shall mean a product that is a preparation
incorporating two (2) or more therapeutically active ingredients [ * ].
Notwithstanding the foregoing, ingredients or components other than active
ingredients, including without limitation drug delivery vehicles, adjuvants, and
excipients, shall not be deemed to be "therapeutically active ingredients," and
their presence shall not be deemed to create a Combination Product for purposes
of this Section 1.24.
1.25 "COMMERCIALIZATION LIAISON" shall have the meaning assigned to such
term in Section 5.3.4(a).
1.26 "COMMERCIALIZATION PROGRAM" shall have the meaning assigned to such
term in Section 5.3.1.
1.27 "COMMERCIALIZATION TERM" shall have the meaning assigned to such term
in Section 5.3.1.
1.28 "COMPETITIVE INFRINGEMENT" shall have the meaning assigned to such
term in Section 8.3.2.
1.29 "COMPETITIVE PRODUCT" shall have the meaning assigned to such term in
Section 5.4.1.
1.30 "COMPOUND INVENTIONS" shall have the meaning assigned to such term in
Section 8.1.1(b).
1.31 "COMPOUND PATENTS" shall have meaning assigned to such term in Section
8.1.1(b)(i).
1.32 "CONFIDENTIAL INFORMATION" shall have the meaning assigned to such
term in Section 9.1.
1.33 "CONTRACT YEAR" shall mean a year of 365 days (or 366 days in a leap
year) beginning on the Effective Date and ending one (1) year thereafter and so
on year-by-year during the Term. "CONTRACT YEAR ONE" shall mean the first such
year; "CONTRACT YEAR TWO" shall mean the second such year, and so on,
year-by-year.
1.34 "CONTROL," "CONTROLS," "CONTROLLED" OR "CONTROLLING" shall mean
possession by the granting Party of the ability to grant the licenses or
sublicenses to the other Party, as provided in this Agreement, without violating
the terms of any agreement or other arrangement with any Third Party. A Party
shall be deemed to Control Collaboration Technology to the extent of its
individual or joint interest therein, as applicable. Notwithstanding the
foregoing, for purposes of Sections 6.4.1(a), 6.4.2(c), and 6.4.3, Control shall
mean possession of the ability to grant licenses or sublicenses without
violating the terms of any agreement or other arrangement with any Third Party.
1.35 "CO-PROMOTE" OR "CO-PROMOTION" shall mean, with respect to EXEL, to
engage in the promotional activities that may be agreed upon as further
described in Section 5.3.4(c).
1.36 "CO-PROMOTION RIGHT" shall have the meaning assigned to such term in
Section 5.3.4(c).
1.37 "COST OF GOODS SOLD" shall mean all reasonable costs allocable to the
Licensed Product calculated by using GSK's standard accounting procedures,
consistently applied. [*]
1.38 "DATA PACKAGE" shall have the meaning assigned to such term in Section
3.5.1.
1.39 "DEVELOPABILITY CRITERIA" shall mean [ * ].
1.40 "DEVELOPMENT CANDIDATE" shall mean [ * ].
1.41 "DEVELOPMENT CANDIDATE LIAISON" shall have the meaning assigned to
such term in Section 3.4.
1.42 "DEVELOPMENT CANDIDATE PLAN" shall have the meaning assigned to such
term in Section 3.3.2(a).
1.43 "DEVELOPMENT COMPOUND" shall mean [ * ].
1.44 "DEVELOPMENT ELECTION" shall have the meaning assigned to such term in
Section 4.1.
1.45 "DEVELOPMENT INFORMATION" shall have the meaning assigned to such term
in Section 4.3.2(b)(ii).
1.46 "DEVELOPMENT OPERATING PLAN" OR "DOP" shall have the meaning assigned
to such term in Section 3.3.1.
1.47 "DEVELOPMENT PROGRAM" shall mean the program, to be conducted by EXEL
during the Development Term and the Extension Period, if any, as set forth in
Article 3, of Identification and validation of Collaboration Targets, and
research, discovery, characterization, optimization, pre-clinical development
and early-stage clinical development of Development Compounds through completion
of Proof of Concept Trials.
1.48 "DEVELOPMENT TERM" shall have the meaning assigned to such term in
Section 3.1.1.
1.49 "DISCLOSING PARTY" shall have the meaning assigned to such term in
Section 9.1.
1.50 "DRAFTING PARTY" shall have the meaning assigned to such term in
Section 2.2.3(a).
1.51 "EFFECTIVE DATE" shall have the meaning assigned to such term in the
Preamble.
1.52 "EMEA" shall mean the European Medicines Evaluation Agency and any
successor entity thereto.
1.53 "EMPLOYEE AGREEMENTS" shall have the meaning assigned to such term in
Section 10.2.15.
1.54 "ENCUMBERED COMPOUND" shall have the meaning assigned to such term in
Section 7.4.3.
1.55 "ENCUMBERED TARGET" shall have the meaning assigned to such term in
Section 7.4.3.
1.56 "EXCLUDED TARGETS" shall mean [ * ].
1.57 "EXECUTIVE OFFICERS" shall have the meaning assigned to such term in
Section 2.2.4.
1.58 "EXEL" shall have the meaning assigned to such term in the Preamble.
1.59 "EXEL BIOTHERAPEUTIC PRODUCT" shall have the meaning assigned to such
term in Section 6.4.3.
1.60 "EXEL ENTITIES" shall mean, as of the Effective Date, [*]
1.61 "EXEL KNOW-HOW" shall mean: (i) all Information that EXEL discloses to
GSK under this Agreement or has disclosed under the Non-Disclosure Agreement
executed by EXEL and GSK dated [ * ]; (ii) all Information that is within the
Control of the EXEL Entities, on the Effective Date or during the Term; and
(iii) all non-patentable Inventions Controlled by the EXEL Entities, during the
Term, in each of clauses (i), (ii) and (iii) that are necessary or useful for
GSK: [ * ] for the further development of Licensed Products; [ * ].
Notwithstanding anything herein to the contrary, EXEL Know-How excludes
Information contained in any published EXEL Patents.
1.62 "EXEL PATENTS" shall mean all Patents in the Territory Controlled by
the EXEL Entities, as of the Effective Date as set forth on Schedule 1.62, and
any other Patent Controlled by the EXEL Entities during the Term that claims or
covers: [ * ]. EXEL shall update GSK regarding any EXEL Patents: (A) during [ *
] on an annual basis commencing on the first day of [ * ]; and (B) upon request
by GSK after [ * ] with respect to EXEL Patents to which GSK retains a license
hereunder.
1.63 "EXEL PRODUCT" shall have the meaning assigned to such term in Section
6.4.1.
1.64 "EXEL TECHNOLOGY" shall mean EXEL Patents and EXEL Know-How, including
without limitation any Collaboration Technology owned by EXEL either jointly or
solely.
1.65 "EXISTING BIOTHERAPEUTIC TARGET" shall mean [ * ].
1.66 "EXISTING COMPOUND" shall mean [ * ].
1.67 "EXISTING TARGETS" shall mean [ * ].
1.68 "EXISTING THIRD PARTY COLLABORATION" shall mean any of those
collaboration agreements between EXEL and a Third Party listed on Schedule 1.68.
1.69 "EXPANDED PROGRAM OPTION" shall have the meaning assigned to such term
in Section 3.5.1(b).
1.70 "EXTENSION PERIOD" shall have the meaning assigned to such term in
Section 3.1.2(b).
1.71 "FDA" shall mean the U.S. Food and Drug Administration, and any
successor entity thereto.
1.72 "FIELD" shall mean the areas of vascular biology-based disease,
oncology and inflammatory disease, subject to the rights of certain Third
Parties pursuant to the Existing Third Party Collaborations. [ * ].
1.73 "FIRST COMMERCIAL SALE" shall mean, with respect to each Product, the
first sale for which payment has been received for use or consumption by the
general public of such Product in any country in the Territory after all
required Marketing Approvals have been granted, or such sale is otherwise
permitted, by the Regulatory Authority in such country, excluding registration
samples, compassionate use sales and the like.
1.74 "FIRST OPTION PERIOD" shall have the meaning assigned to such term in
Section 4.3.1(a).
1.75 "FOLLOW-UP COMPOUND" shall mean [ * ].
1.76 "FUTURE THIRD PARTY COLLABORATION" shall mean an agreement between
EXEL and a Third Party after the Effective Date.
1.77 "GROSS MARGIN" shall mean, with respect to a Licensed Product,[*].
1.78 "GSK" shall have the meaning assigned to such term in the Preamble.
1.79 "GSK COMPOUND INVENTIONS" shall have the meaning assigned to such term
in Section 8.1.1(b).
1.80 "GSK KNOW-HOW" shall mean: (i) Information which GSK discloses to EXEL
under this Agreement or has disclosed under the Non-Disclosure Agreement
executed by EXEL and GSK dated [ * ]; (ii) all Information that is within the
Control of GSK or its Affiliates on the Effective Date or during the Term; and
(iii) all non-patentable Inventions Controlled by GSK or its Affiliates during
the Term, if any; in each of clauses (i), (ii) and (iii), that are necessary or
useful for EXEL: [ * ]. Notwithstanding anything herein to the contrary, GSK
Know-How excludes Information contained in any published GSK Patents.
1.81 "GSK LICENSED PRODUCT" shall have the meaning assigned to such term in
Section 12.6.3(b).
1.82 "GSK PATENTS" shall mean all Patents in the Territory Controlled by
GSK or its Affiliates as of the Effective Date, and any other Patent Controlled
by GSK during the Term, necessary or useful for EXEL: [ * ].
1.83 "GSK SCREENED-COMPOUND" shall have the meaning assigned to such term
in Section 12.6.3(b).
1.84 "GSK TECHNOLOGY" shall mean any GSK Patents and GSK Know-How,
including without limitation any Collaboration Technology owned by GSK either
jointly or solely.
1.85 "HSR ACT" shall have the meaning assigned to such term in Section
14.6.1.
1.86 "IDENTIFY," "IDENTIFIED," "IDENTIFYING" OR "IDENTIFICATION" shall mean
[ * ].
1.87 "INCLUDED COMPOUND" shall mean [ * ].
1.88 "IND" shall mean any investigational new drug application filed with
the FDA pursuant to Part 312 of Title 21 of the U.S. Code of Federal
Regulations, including any amendments thereto. References herein to IND shall
include, to the extent applicable, any comparable filing(s) outside the U.S.
(such as a CTA in the European Union).
1.89 "INDEMNITEE" shall have the meaning assigned to such term in Section
11.3.
1.90 "INFORMATION" shall mean information and materials within the Control
of (i) with respect to GSK, GSK or its Affiliates; or (ii) with respect to EXEL,
the EXEL Entities, in either case that is necessary or useful for the conduct of
the Development Program or the Commercialization Program and that exists as of
the Effective Date or is discovered, developed or acquired during the Term, and
including, without limitation: (A) techniques and data, including, but not
limited to, screens, models, inventions, methods, test data including, but not
limited to, pharmacological, toxicological and clinical test data, analytical
and quality control data, marketing, pricing, distribution, costs, and sales
data, manufacturing information (including any relevant Third Party
manufacturing information to the extent Controlled by, and in the possession of,
GSK or its Affiliates, or the EXEL Entities), and patent and legal data or
descriptions (to the extent that disclosure thereof would not result in loss or
waiver of privilege or similar protection); and (B) compositions of matter,
including but not limited to compounds, biological materials, vectors and
assays. As used herein, "CLINICAL TEST DATA" shall be deemed to include all
information related to the clinical or preclinical testing of a Development
Compound, or Licensed Product, including without limitation, patient report
forms, investigators' reports, biostatistical, pharmaco-economic and other
related analyses, regulatory filings and communications, and the like.
1.91 "INVENTION" shall mean any new or useful process, machine,
manufacture, or composition of matter relating to or comprising [ * ], whether
patentable or unpatentable, or any improvement thereof, that is conceived during
the Term in connection with the Parties' activities under this Agreement.
1.92 "LOAN AGREEMENT" shall have the meaning assigned to such term in the
Recitals.
1.93 "LICENSED PRODUCT(S)" shall mean [ * ].
1.94 "LICENSED PRODUCT DILIGENCE PLAN" shall have the meaning assigned to
such term in Section 5.4.1.
1.95 "LIMITED PROGRAM OPTION" shall have the meaning assigned to such term
in Section 3.5.1(a).
1.96 "LOSSES" shall have the meaning assigned to such term in Section 11.1.
1.97 "MAJOR COUNTRY" shall mean [ * ].
1.98 "MAJOR PHARMACEUTICAL COMPANY" shall have the meaning assigned to such
term in Section 13.1.4.
1.99 "MARKETING APPROVAL" shall mean all approvals, licenses, registrations
or authorizations of any federal, state or local regulatory agency, department,
bureau or other governmental entity, necessary for the manufacturing, use,
storage, import, transport and sale of a Product in a regulatory jurisdiction.
"Marketing Approval" shall be deemed to occur upon first receipt of notice from
a Regulatory Authority that a Product has been approved for commercial sale. For
countries where governmental approval is required for pricing or for the Product
to be reimbursed by national health insurance (i.e., other than the United
States), "Marketing Approval" shall not be deemed to occur until such pricing or
reimbursement approval is obtained. Marketing Approval shall be deemed to have
occurred in such country where government approval of pricing or reimbursement
has not been obtained if, at any time, the Party begins the commercial sale of
such Product in the country without obtaining pricing approval or reimbursement,
with the date of such Marketing Approval to be deemed to occur on the date of
the First Commercial Sale of the Product in the country.
1.100 "MARKETING APPROVAL APPLICATION" OR "MAA" shall mean a New Drug
Application (as defined in Title 21 of the U.S. Code of Federal Regulations,
Section 314.50, et. seq.), or a comparable filing for Marketing Approval (not
including pricing or reimbursement approval) in a country, in each case with
respect to a Product in the Territory.
1.101 "MATERIAL BREACH" shall have the meaning assigned to such term in
Section 12.2.1.
1.102 "NET SALES" shall mean [ * ].
In the event a Product is sold which is a Combination Product, for purposes
of determining payments due hereunder, Net Sales of Combination Products shall
be calculated by multiplying the Net Sales of the Combination Product by the
fraction A over A+B, in which A is the Gross Selling Price of the Product when
such Product is sold in substantial quantities comprising a Development Compound
as the sole therapeutically active ingredient during the applicable accounting
period in which the sales of the Product were made, and B is the sum of the
Gross Selling Price of the other therapeutically active ingredients contained in
the Combination Product sold separately in substantial quantities during the
accounting period in question. All Gross Selling Prices of the therapeutically
active ingredients of the Product and Combination Products shall be calculated
as the average Gross Selling Price of the therapeutically active ingredients in
such Products and Combination Products during the applicable accounting period
for which the Net Sales are being calculated. In the event that no separate sale
of either the Product comprising a single Development Compound as the sole
therapeutically active ingredient or the other therapeutically active
ingredients of the Combination Product are made during the accounting period in
which the sale was made or if the Gross Selling Price for a particular
therapeutically active ingredient included in a Combination Product cannot be
determined for an accounting period, Net Sales allocable to each of the
therapeutically active ingredients in the Combination Product shall be
determined by mutual agreement reached in good faith by the Parties prior to the
end of the accounting period in question based on an equitable method of
determining same that takes into account, in the Territory, variations in
potency, the relative contribution of each therapeutically active ingredient in
the Combination Product, and relative value to the end-user of each
therapeutically active ingredient. For purposes of this Section 1.102, "GROSS
SELLING PRICE" shall mean [ * ].
1.103 "NON-BREACHING PARTY" shall have the meaning assigned to such term in
Section 12.2.1.
1.104 "NON-SELECTED TARGET" shall have the meaning assigned to such term in
Section 7.4.2.
1.105 "NORTH AMERICA" shall mean [ * ].
1.106 "ONCOLOGY COLLABORATOR" shall have the meaning assigned to such term
in Section 7.4.1.
1.107 "OTHER BREACH" shall have the meaning assigned to such term in
Section 12.2.2.
1.108 "OTHER FIELD" shall have the meaning assigned to such term in Section
7.2.1.
1.109 "PARTY" OR "PARTIES" shall have the meaning assigned to such term in
the Preamble, or where the context requires, shall mean GSK or its Affiliates
and/or the EXEL Entities.
1.110 "PATENT" shall mean: (i) issued and unexpired letters patent,
including any extension, registration, confirmation, reissue, continuation,
supplementary protection certificate, divisional, continuation-in-part,
re-examination or renewal thereof, (ii) pending applications for letters
patents, and (iii) foreign counterparts of any of the foregoing; in each case to
the extent the same has not been held, by a court or governmental agency of
competent jurisdiction, to be invalid or unenforceable in a decision from which
no appeal can be taken.
1.111 "PATENT COSTS" shall mean the reasonable fees and expenses paid to
outside legal counsel, and filing, maintenance and other out-of-pocket expenses
paid to Third Parties, incurred in connection with the Prosecution and
Maintenance of Patents.
1.112 "PATENT SUBCOMMITTEE" shall have the meaning assigned to such term in
Section 8.1.5(a).
1.113 "PAYEE" shall have the meaning assigned to such term in Section
6.5.1.
1.114 "PAYOR" shall have the meaning assigned to such term in Section
6.5.1.
1.115 "PERSON" shall mean any corporation, firm, partnership or other
entity.
1.116 "PIPELINE OPTION PERIOD" shall have the meaning assigned to such term
in Section 4.3.2(b)(ii).
1.117 "PIVOTAL REGISTRATION STUDY" shall mean a human clinical trial
conducted to demonstrate evidence of the efficacy and safety of a drug for
inclusion in the MAA to support Marketing Approval as more fully defined in
Section 312.21(c) of Title 21 of the U.S. Code of Federal Regulations.
1.118 "PRODUCT" shall mean [ * ].
1.119 "PRODUCT ACCEPTANCE MILESTONE" shall have the meaning assigned to
such term in Section 6.2.1(a).
1.120 "PRODUCT REPORT" shall have the meaning assigned to such term in
Section 4.2.
1.121 "PROPOSED BIOTHERAPEUTIC TARGET" shall have the meaning assigned to
such term in Section 2.5.2.
1.122 "PROOF OF CONCEPT TRIAL" or "POC TRIAL" shall mean an initial phase
II clinical trial of a Development Candidate [ * ].
1.123 "PROSECUTING PARTY" shall have the meaning assigned to such term in
Section 8.1.5(b).
1.124 "PROSECUTION AND MAINTENANCE" OR "PROSECUTE AND MAINTAIN" shall mean,
with regard to a Patent, the preparing, filing, prosecuting and maintenance of
such Patent, as well as the conduct of re-examinations, reissues, and requests
for patent term extensions with respect to such Patent, together with the
conduct of interferences, the defense of oppositions and other similar
proceedings with respect to the particular Patent. For clarification,
"Prosecution and Maintenance" or "Prosecute and Maintain" shall not include any
other enforcement actions taken with respect to a Patent.
1.125 "RECEIVING PARTY" shall have the meaning assigned to such term in
Section 9.1.
1.126 "REFUSED CANDIDATE" shall have the meaning assigned to such term in
Section 4.3.1(b).
1.127 "REGULATORY AUTHORITY" OR "REGULATORY AUTHORITIES" shall mean the FDA
in the U.S., and any health regulatory authority(ies) in any country in the
Territory that is a counterpart to the FDA and holds responsibility for granting
regulatory marketing approval for a Product in such country, and any
successor(s) thereto.
1.128 "REPORT DATE" shall have the meaning assigned to such term in Section
4.3.1(a).
1.129 "RESEARCH AND DEVELOPMENT PAYMENTS" shall have the meaning assigned
to such term in Section 3.8.
1.130 "RETURNED LICENSED PRODUCT" shall have the meaning assigned to such
term in Section 5.5.1.
1.131 "REVIEW SUBCOMMITTEE" shall have the meaning assigned to such term in
Section 2.2.6(b).
1.132 "SAC SEC FILING" shall have the meaning assigned to such term in
Section 13.1.2(d)(i).
1.133 "SECOND OPTION PERIOD" shall have the meaning assigned to such term
in Section 4.3.1(c)(ii).
1.134 "STOCK PURCHASE AGREEMENT" shall have the meaning assigned to such
term in the Recitals.
1.135 "SUBCOMMITTEE" shall have the meaning assigned to such term in
Section 2.2.6.
1.136 "SUBJECT TRANSACTION" shall have the meaning assigned to such term in
Section 13.1.
1.137 "SUBLICENSEE" shall mean, with respect to a particular Development
Compound or Product, a Third Party to whom GSK or EXEL, as applicable, has
granted a sublicense under any Collaboration Technology, technology and/or
intellectual property licensed to such Party pursuant to this Agreement.
1.138 "SUBSEQUENT PRODUCT REPORT" shall have the meaning assigned to such
term in Section 4.3.1(c)(ii).
1.139 "SUBSEQUENTLY AFFILIATED COMPANY" shall have the meaning assigned to
such term in Section 13.1.
1.140 "SUCCESSFUL POC COMPLETION" shall mean [ * ].
1.141 "TARGET PRODUCT PROFILE" shall mean [ * ].
1.142 "TERM" shall have the meaning assigned to such term in Section
12.1.2.
1.143 "TERRITORY" shall mean anywhere [ * ].
1.144 "THIRD PARTY" shall mean any entity other than EXEL or GSK or an
Affiliate of EXEL or GSK.
1.145 "UNITED STATES" OR "U.S." shall mean the United States of America.
1.146 "WRITTEN DISCLOSURE" shall have the meaning assigned to such term in
Section 14.1.
ARTICLE 2
OVERSIGHT OF THE COLLABORATION
2.1 IN GENERAL. Except as set forth herein (including without
limitation as set forth in Section 5.5), EXEL shall have principal
responsibility for all research, discovery and development activities with
respect to Development Compounds prior to exercise by GSK of its Development
Election with respect to such Development Compounds, and GSK shall have
principal responsibility for all research, development and commercialization
activities with respect to such Development Compounds selected as Licensed
Products by GSK thereafter.
2.2 THE COLLABORATION COMMITTEE. Promptly after the Effective Date,
the Parties shall establish a collaboration committee (the "COLLABORATION
COMMITTEE") as more fully described in this Section 2.2. The Collaboration
Committee shall have review and oversight responsibilities for all research,
development and commercialization activities performed hereunder, including
oversight of both the Development Program and the Commercialization Program, in
each case as more specifically provided herein; provided, however, that the
Collaboration Committee shall have no authority to amend this Agreement. Each
Party agrees to keep the Collaboration Committee reasonably informed of its
progress and activities within the Development Program and the Commercialization
Program.
2.2.1 Membership. The Collaboration Committee shall be comprised of an
equal number of representatives from each of GSK and EXEL. The exact number of
such representatives shall be [ * ] for each of GSK and EXEL, or such other
number as the Parties may agree. Each Party shall provide the other with a list
of its initial members of the Collaboration Committee [ * ]. Each Party may
replace any or all of its representatives on the Collaboration Committee at any
time upon written notice to the other Party in accordance with Section 14.9 of
this Agreement. Such representatives shall include individuals within the
senior management of each Party, and those representatives of each Party shall,
individually or collectively, have expertise in business, pharmaceutical drug
discovery, development and commercialization. Any member of the Collaboration
Committee may designate a substitute to attend and perform the functions of that
member at any meeting of the Collaboration Committee. Each Party may, in its
reasonable discretion, invite non-member representatives of such Party to attend
meetings of the Collaboration Committee. If the Collaboration Committee chooses
to designate a chairperson, such chairperson shall be appointed for a one (1)
year term and the right to name the chairperson shall alternate between the
Parties.
2.2.2 Meetings. [ * ], the Collaboration Committee shall meet [ * ],
and more frequently as the Parties deem appropriate, on such dates, and at such
places and times, as provided herein or as the Parties shall agree. Thereafter,
the Collaboration Committee shall meet, in person or otherwise, at least [ * ]
to provide EXEL an update regarding GSK's efforts under the Commercialization
Program and otherwise to perform the responsibilities assigned to it under this
Agreement; provided, however, that [ * ], the Parties agree to periodically
discuss in good faith the appropriate frequency of such ongoing meetings.
Meetings of the Collaboration Committee that are held in person shall alternate
between the offices of the Parties, or such other place as the Parties may
agree. The members of the Collaboration Committee also may convene or be polled
or consulted from time to time by means of telecommunications, video
conferences, electronic mail or correspondence, as deemed necessary or
appropriate.
2.2.3 Minutes. [ * ], EXEL shall be responsible for preparing and
circulating minutes of such meeting setting forth, inter alia, a description, in
reasonable detail, of the discussions at the meeting and a list of any actions,
decisions or determinations approved by the Collaboration Committee and a list
of any issues to be resolved by the Executive Officers pursuant to Section
2.2.4. Thereafter GSK shall be responsible for such minutes. Such minutes shall
be effective only after approved by both Parties. With the sole exception of
specific items of the meeting minutes to which the members cannot agree and
which are escalated to the Executive Officers as provided in Section 2.2.3(d)
below, definitive minutes of all Collaboration Committee meetings shall be
finalized no later than thirty (30) days after the meeting to which the minutes
pertain, as follows:
(a) Within [ * ] after each Collaboration Committee meeting, the
Party responsible for preparing the minutes (the "DRAFTING PARTY") shall prepare
and distribute to all members of the Collaboration Committee draft minutes of
the meeting.
(b) The non-Drafting Party shall then have [ * ] after receiving
such draft minutes to collect comments thereon from its members of the
Collaboration Committee and provide them to the Drafting Party.
(c) Upon the expiration of such [ * ] period, the Parties shall
have [ * ] to discuss each other's comments and finalize the minutes. A member
of the Collaboration Committee from each Party shall sign and date the final
minutes. The signature of each Party's Collaboration Committee member upon the
final minutes shall indicate such Party's assent to the minutes.
(d) If at any time during the preparation and finalization of the
Collaboration Committee minutes, the Parties do not agree on any issue with
respect to the minutes, such issue shall be resolved by the escalation process
as provided in Section 2.2.4. The decision resulting from the escalation
process shall be promptly recorded by the Drafting Party in amended finalized
minutes for said meeting.
2.2.4 Decision Making. Except as otherwise provided herein, decisions
of the Collaboration Committee [ * ]. In the event that the Collaboration
Committee is unable to reach [ * ] after it has met and attempted to reach such
decision, then either Party may, by written notice to the other, have such issue
referred to the Chief Executive Officer of EXEL, or such other person holding a
similar position designated by EXEL from time to time, and the Chairman,
Research and Development, Pharmaceuticals of GSK, or such other person holding a
similar position designated by GSK from time to time (collectively, the
"EXECUTIVE OFFICERS"), for resolution. The Executive Officers shall meet
promptly to discuss the matter submitted and to determine a resolution. If the
Executive Officers are unable to determine a resolution in a timely manner,
which shall in no case be [ * ] after the matter was referred to them, the issue
shall be resolved as follows:
(a) Except as set forth in Section 3.3.4 and as otherwise set
forth in this Agreement, [ * ]; and
(b) [ * ].
2.2.5 Responsibilities. The Collaboration Committee shall be
responsible for overseeing the entire collaboration between GSK and EXEL under
this Agreement, including both the Development Program and the Commercialization
Program. Without limiting the foregoing, the Collaboration Committee shall
perform the following functions, some or all of which may be addressed directly
at any given meeting of the Collaboration Committee:
(a) [ * ];
(b) [ * ];
(c) [ * ];
(d) [ * ];
(e) [ * ];
(f) [ * ];
(g) [ * ];
(h) review and coordinate all of the Parties' activities under
this Agreement;
(i) [ * ];
(j) [ * ]; and
(k) such other responsibilities as may be assigned to the
Collaboration Committee pursuant to this Agreement or as may be mutually agreed
upon by the Parties in writing from time to time.
2.2.6 Subcommittee(s). From time to time, the Collaboration Committee
may establish subcommittees to oversee particular projects or activities, as it
deems necessary or advisable (each, a "SUBCOMMITTEE"). Each Subcommittee shall
consist of such number of members of each Party as the Collaboration Committee
determines is appropriate from time to time. Such members shall be individuals
with expertise and responsibilities in the areas of preclinical development,
clinical development, intellectual property, process sciences, manufacturing,
regulatory affairs, product development and/or product commercialization, as
applicable to the stage of development of the project or activity. Each
Subcommittee shall meet with such frequency as the Collaboration Committee shall
determine.
(a) Each Subcommittee shall operate by [ * ] in all decisions.
If, with respect to a matter that is subject to a Subcommittee's decision-making
authority, the Subcommittee cannot reach [ * ], the matter shall be referred to
the Collaboration Committee, which shall resolve such matter in accordance with
Section 2.2.4.
(b) The Parties acknowledge and agree that at the first meeting
of the Collaboration Committee a temporary subcommittee shall be established to
continue the initial review of all Existing Targets and Existing Compounds (the
"REVIEW SUBCOMMITTEE"). The Review Subcommittee shall be responsible for
reviewing proposals from the respective Parties regarding [ * ]. In addition,
the Review Subcommittee shall be responsible for recommending the initial
prioritization of EXEL's activities with respect to [ * ].
2.2.7 Expenses. Each Party shall bear its own travel related expenses
and other costs with respect to its activities relating to membership on the
Collaboration Committee or any Subcommittee.
2.3 ALLIANCE MANAGERS. Promptly after the Effective Date, each Party
shall appoint an individual(s) (other than an existing member of the
Collaboration Committee) to act as the alliance manager(s) for such Party (the
"ALLIANCE MANAGERS"). Each Alliance Manager shall thereafter be permitted to
attend meetings of the Collaboration Committee and any Subcommittee as a
nonvoting observer. The Alliance Managers shall be the primary point of contact
for the Parties regarding the collaboration activities contemplated by this
Agreement and shall facilitate all such activities hereunder including, but not
limited to, the exchange of Information described in Section 3.7. The Alliance
Managers shall also be responsible for assisting the Collaboration Committee in
performing its oversight responsibilities by: (i) maintaining a current roster
of: (A) Collaboration Committee members; and (B) Subcommittees and each of their
respective members; and (ii) ensuring the prompt appointment and maintaining
current contact information for each of the Development Candidate Liaisons and
Commercialization Liaisons, as and when applicable. In addition, the Alliance
Managers shall be responsible for coordinating with the Development Candidate
Liaison all enabling activities to provide for a smooth transition in the event
GSK exercises its Development Election with respect to such Development
Candidate for advancement to become a Licensed Product, coordinating with the
Commercialization Liaison all communications between the Parties with respect to
the further development and commercialization of the Licensed Products, as well
as any other duties as may be assigned to the Alliance Managers from time to
time by the Collaboration Committee or EXEL and GSK, as the case may be. The
name and contact information for such Alliance Managers, as well as any
replacement(s) chosen by EXEL or GSK, in their sole discretion, from time to
time, shall be promptly provided to the other Party in accordance with Section
14.9 of this Agreement.
2.4 LIAISONS. GSK shall appoint a Development Candidate Liaison for each
Development Candidate selected by EXEL in accordance with Section 3.3.2, who
shall be responsible for, and shall undertake, those activities as set forth in,
and pursuant to, Section 3.4; and EXEL shall appoint a Commercialization Liaison
for each Licensed Product for which GSK has exercised a Development Election,
who shall be responsible for, and shall undertake, those activities as set forth
in, and pursuant to, Section 5.3.4(a).
2.5 BIOTHERAPEUTIC TARGETS.
2.5.1 Existing Biotherapeutic Targets. GSK agrees and acknowledges
that EXEL has identified and/or conducted research with respect to the Existing
Biotherapeutic Targets prior to the Effective Date. It is expressly understood
that Existing Biotherapeutic Targets shall be excluded from the Development
Program [ * ].
2.5.2 Ongoing Identification. The Parties agree that it is their
intention that targets identified by EXEL during the Development Program that
are only amenable to the development of Biotherapeutic Products shall be
excluded from the Development Program to the extent necessary to allow EXEL to
develop Biotherapeutic Products [ * ].
2.5.3 Criteria. In general, a Biotherapeutic Target or an Existing
Biotherapeutic Target shall be [ * ].
ARTICLE 3
DEVELOPMENT PROGRAM
3.1 COMMENCEMENT; TERM. The Development Program shall commence [ * ].
EXEL shall have principal responsibility for the conduct of the Development
Program, including all scientific, clinical, legal and regulatory activities
consistent with the Development Operating Plan described in Section 3.3.1 and,
where applicable, the Development Candidate Plans. GSK shall provide
consultation and advice with respect to such activities, which shall be
considered in good faith by EXEL.
3.1.1 Term. The Development Program will terminate upon the first to
occur of: (A) [ * ]; or (B) the end of Contract Year Six, unless earlier
terminated in accordance with the provisions hereof (the "DEVELOPMENT TERM").
3.1.2 Extension Option. [ * ] GSK shall have the right and option to
elect to extend the Development Program for a period not to exceed the first to
occur of:
(a) [ * ]; or
(b) [ * ] in either case, (the "EXTENSION PERIOD").
To exercise such option, GSK shall so notify EXEL, in writing, at least [ * ]
prior to the end of [ * ] or, in the event GSK has exercised its Development
Election [ * ] after such exercise, and make the applicable annual payments set
forth in Section 3.8.3.
3.2 OBJECTIVES; DILIGENCE.
3.2.1 Objectives. The common objectives of the Parties are:
(a) in the event GSK [ * ];
(b) in the event GSK [ * ];
(c) for EXEL to [ * ].
3.2.2 Diligence. The Parties acknowledge and agree that, in order to
achieve these objectives, EXEL will [ * ]
3.2.3 EXEL's Responsibilities. In order to achieve the objectives set
forth in Section 3.2.1, [ * ] EXEL shall:
(a) have the right and responsibility to manufacture, or have
manufactured, the Development Compounds prior to GSK's exercise of its
Development Election with respect thereto, including all required bulk drug
substance and clinical materials [ * ]
(b) conduct all research and development activities it reasonably
determines are required to further utilize [ * ]; provided however, that EXEL
shall have no obligation to GSK to conduct research with respect to any Excluded
Target or, subject to Section 2.5.2, any Biotherapeutic Target as part of the
Development Program [ * ];
(c) conduct all pre-clinical activities and clinical trials [*];
(d) conduct formulation development [ * ];
(e) develop pharmacogenomic, biomarker or similar assays [ * ];
(f) keep GSK informed, through [ * ] written reports [ * ]; such
reports shall contain, at a minimum, the information set forth in Schedule
3.2.3(f);
(g) [ * ];
(h) be responsible for preparing and filing all regulatory
filings [ * ];
(i) [ * ]; and
(j) perform such other obligations with respect to [ * ]
consistent with the Development Operating Plan.
3.2.4 [ * ]
(a) [ * ] EXEL shall:
(b) [ * ] use commercially reasonable efforts to perform the
continuing research activities to be conducted by EXEL pursuant to the
Development Program [ * ]
(c) [ * ].
3.3 DEVELOPMENT OPERATING PLAN; DEVELOPMENT CANDIDATE PLAN(S).
3.3.1 Development Operating Plan. The Development Program will be
carried out by EXEL pursuant to an annual overall development operating plan
(the "DEVELOPMENT OPERATING PLAN" or "DOP") [ * ]. The DOP for Contract Year
One, dated as of October 28, 2002, shall be [ * ]. The Development Operating
Plan shall be updated by EXEL [ * ]. As provided in Section 3.2.3(f), the
reports being provided by EXEL under such Section shall provide updates of
EXEL's progress under the Development Operating Plan [ * ].
3.3.2 Development Candidate Plan(s).
(a) At the first meeting of the Collaboration Committee, the
Collaboration Committee shall [ * ] Based on these discussions, EXEL will
prepare [ * ] a development plan for each Development Candidate [ * ] (a
"DEVELOPMENT CANDIDATE PLAN") for review by the Collaboration Committee at its
next regularly scheduled meeting. [ * ]
3.3.3 Ongoing Review. The Development Operating Plan and each
Development Candidate Plan with respect to a Development Candidate [ * ] will be
reviewed as necessary at each meeting of the Collaboration Committee [ * ].
3.3.4 [ * ]
3.4 DEVELOPMENT CANDIDATE LIAISON. [ * ] GSK shall appoint an internal
contact to act as a liaison between EXEL and GSK regarding further development
of each such Development Candidate (the "DEVELOPMENT CANDIDATE LIAISON"). The
Development Candidate Liaison shall be responsible for [ * ]. The name and
contact information for each such Development Candidate Liaison, as well as any
replacement(s) chosen by GSK, in its sole discretion, from time to time, shall
be promptly provided to EXEL in accordance with Section 14.9 of this Agreement.
EXEL shall [ * ]. During [ * ], the Development Candidate Liaison shall provide
to EXEL regular, periodic written reports, at least [ * ] and not later than [ *
] in advance of each Collaboration Committee meeting [ * ]. The Development
Candidate Liaison position for each Development Candidate shall [ * ].
3.5 PROGRAM OPTION ELECTION.
3.5.1 Election Period. Commencing as of the [ * ] in which to provide
to GSK [ * ], along with a data package containing, to the extent then available
and with respect to [ * ] (the "DATA PACKAGE"). GSK shall [ * ] from receipt of
the Data Package to choose either to:
(a) [ * ] for further development under the Development Program
(the "LIMITED PROGRAM OPTION"); or
(b) have EXEL [ * ] as part of the Development Program (the
"EXPANDED PROGRAM OPTION").
In the event that GSK [ * ] GSK shall [ * ].
3.5.2 Selection of the Limited Program Option. In the event GSK [ * ].
3.6 REGULATORY MATTERS.
3.6.1 Compliance. EXEL shall conduct all pre-clinical activities and
clinical trials in good scientific manner and in compliance with all
requirements of applicable laws, rules and regulations, and all other applicable
requirements of cGMP, good laboratory practice and current good clinical
practice.
3.6.2 Ownership. EXEL shall own and maintain all regulatory filings
for Development Compounds developed pursuant to this Agreement, including all
INDs. Upon exercise by GSK of its Development Election with respect to a
Development Candidate, EXEL shall transfer ownership of such regulatory filings
for such Development Candidate [ * ], including all relevant INDs for any of the
foregoing to GSK, and provide GSK with copies of such INDs and other regulatory
filings, and all pre-clinical and clinical data and results (including
pharmacology, toxicology, formulation, and stability studies). GSK or its
designee shall own all Marketing Approval Applications for Licensed Products.
3.6.3 Adverse Event Reporting. Beginning on the Effective Date and
continuing until such time, if any, that GSK exercises its Development Election
with respect to a Development Candidate to be a Licensed Product, EXEL shall be
responsible for reporting all adverse drug reaction experiences related to the
activities of EXEL under this Agreement to the appropriate Regulatory
Authorities in the countries in the Territory in which the Development Candidate
is being developed, in accordance with the appropriate laws and regulations of
the relevant countries and Regulatory Authorities. EXEL shall provide copies of
all such reports to GSK within [ * ] of any filing with a Regulatory Authority.
3.7 EXCHANGE OF INFORMATION. In addition to the [ * ] reports to be
provided under Section 3.2.3(f), and subject in all cases to the provisions of
Article 9, [ * ] EXEL shall [ * ]. Any significant new Information shall be
communicated [ * ]. All such exchanges of Information shall be coordinated by
the Alliance Managers.
3.8 DEVELOPMENT PROGRAM FUNDING. As consideration for, and to partially
fund the costs to be incurred by EXEL for, the research activities to be
conducted by EXEL for the intended benefit of GSK pursuant to the Development
Program, GSK shall pay the following research and development payments
(collectively, the "RESEARCH AND DEVELOPMENT PAYMENTS"):
3.8.1 Annual Payments. GSK shall pay the following annual
non-refundable and non-creditable payments (collectively, the "ANNUAL RESEARCH
AND DEVELOPMENT PAYMENTS") to EXEL on or before the date set forth:
(a) regardless of GSK's selection pursuant to Section 3.5:
[ * ]
; and either
(b) under the Expanded Program Option:
[ * ]
or
(c) under the Limited Program Option:
[ * ]
3.8.2 Incentive Payments.
(a) [ * ], GSK shall make a one (1)-time non-refundable
non-creditable payment to EXEL, within [ * ] of GSK's Development Election for
the [ * ] Licensed Product, equal to the amount of any remaining, unpaid
Research and Development Payments set forth in Section 3.8.1(a) and (b); or
(b) If GSK [ * ], GSK shall make a one (1)-time non-refundable
non-creditable payment to EXEL, within [ * ] of GSK's Development Election for
the [ * ] Licensed Product, equal to the amount of any remaining, unpaid
Research and Development Payments set forth in Section 3.8.1(a) and (c).
3.8.3 Extension Period Option Payments.
(a) In the event GSK [ * ], GSK shall pay to EXEL the following
non-refundable, non-creditable payments to EXEL [ * ]: (1) [ * ] upon [ * ]; and
(2) [ * ]; or
(b) In the event GSK [ * ], GSK shall pay to EXEL the following
non-refundable, non-creditable payments to EXEL [ * ]: (1) [ * ]; and (2) [ * ].
(c) [ * ].
3.9 FUTURE ACQUIRED TECHNOLOGY. [ * ].
3.10 GSK TECHNOLOGY. [ * ].
3.11 SUBCONTRACTING. Each Party shall have the right to engage Third Party
subcontractors to perform certain of its obligations under this Agreement in
accordance with the terms of Section 5.1.1. In the event that any Affiliate of
EXEL other than an EXEL Entity performs any of EXEL's obligations under this
Agreement, such Affiliate shall be deemed to be a subcontractor of EXEL for
purposes of this Section 3.11. Any subcontractor to be engaged by a Party to
perform a Party's obligations set forth in the Agreement shall meet the
qualifications typically required by such Party for the performance of work
similar in scope and complexity to the subcontracted activity. [ * ]
ARTICLE 4
GSK'S ELECTION RIGHTS
4.1 DEVELOPMENT ELECTION. During [ * ], GSK shall have the exclusive right,
in its sole discretion, to elect to develop and commercialize each Development
Compound proposed to it by EXEL as set forth below in Section 4.3, under the
terms and conditions set forth in this Agreement (the "DEVELOPMENT ELECTION").
Subject to Section 5.5, any such Development Election by GSK shall be
irrevocable.
4.2 PRODUCT REPORT. Once a Development Candidate [ * ], EXEL shall, within
[ * ], provide a data package to GSK containing information addressing all the
criteria for such Development Candidate as agreed upon by the Parties and listed
in Schedule 4.2, [ * ]. The Collaboration Committee shall meet and review such
Product Report within [ * ] of its receipt by GSK.
4.3 DEVELOPMENT ELECTION OPTIONS.
4.3.1 Exercise During Development Term or Extension Period. During the
Development Term or the Extension Period, if any:
(a) First Option. GSK may exercise its Development Election with
respect to a Development Candidate [ * ] for further development as a Licensed
Product by delivery to EXEL of written notice of exercise, not later than [ * ]
after receipt of the Product Report from EXEL with respect to that Development
Candidate (such date of receipt, the "REPORT DATE"), specifying the Development
Candidate as to which the Development Election is being exercised. The [ * ]
period during which the Development Election must be exercised, as set forth
herein, shall be referred to in this Agreement as the "FIRST OPTION PERIOD."
(b) Refused Candidate. If GSK does not exercise its Development
Election with respect to a particular Development Candidate (a "REFUSED
CANDIDATE") within the First Option Period, then the Development Election shall
expire with respect to that Refused Candidate [ * ]. Upon the expiration of a
Development Election with respect to a Refused Candidate (subject to the rights
of GSK set forth in Section 4.3.1(c) and Section 4.4), GSK shall [ * ].
(c) Second Option. Following expiration of GSK's Development
Election with respect to a particular Development Candidate within the First
Option Period and until [ * ]:
(i) EXEL shall not [ * ]; and
(ii) [ * ] EXEL shall: (A) promptly notify GSK of [ * ] with
respect to such Refused Candidate (the "SUBSEQUENT PRODUCT REPORT"). During the
[ * ] period immediately following delivery to GSK of the Subsequent Product
Report (the "SECOND OPTION PERIOD"), GSK shall have the exclusive right to
exercise a second Development Election with respect to such Refused Candidate
and accept such Refused Candidate as a Licensed Product by delivery to EXEL of
written notice of exercise.
(iii) Notwithstanding the foregoing, upon [ * ], GSK shall [
* ]. It is further understood that in the event GSK elects not to exercise a
Development Election during the Second Option Period with respect to a
particular Refused Candidate, its rights with respect to such Refused Candidate
under Section 4.3.1(c)(ii) shall be exhausted, and GSK shall have only those
rights as may arise pursuant to Section 4.3.2(b) or 4.4.
4.3.2 Exercise upon Expiration of the Development Term or Extension
Period.
(a) Effect on First and Second Option Periods. If upon the
expiration of the Development Term, or the Extension Period, if any, a
Development Candidate or Refused Candidate has been proposed to GSK either under
a First Option Period or a Second Option Period, as the case may be, GSK shall
have [ * ] to exercise its Development Election with respect to such Development
Candidate or Refused Candidate under such First Option Period or Second Option
Period, as the case may be, [ * ].
(b) Pipeline Option. [ * ].
4.4 THE DISCUSSION OPPORTUNITY. [ * ].
ARTICLE 5
GRANT OF RIGHTS; COMMERCIALIZATION
5.1 LICENSE GRANTS.
5.1.1 Development.
(a) EXEL hereby grants to GSK, subject to the terms and
conditions of this Agreement, a non-exclusive, non-royalty bearing, license in
the Territory to use subject matter within the EXEL Technology solely for the
purpose of performing internal development activities [ * ]. The license granted
under this Section 5.1.1(a) shall not include the right to grant or authorize
sublicenses; provided, however, that the engagement by GSK of subcontractors to
conduct activities under this Agreement shall not be construed as having been
granted a sublicense.
(b) [ * ]
5.1.2 Commercialization. Upon GSK's exercise of its Development
Election and acceptance of each Licensed Product, EXEL shall be hereby deemed to
have granted, and hereby grants to GSK, subject to the terms and conditions of
this Agreement, during the Term, the exclusive (even as to EXEL), right and
license in the Territory, with the right to grant sublicenses, under the EXEL
Technology, to make, have made, use, sell, offer for sale and import such
Licensed Products for any and all purposes.
5.1.3 License to Co-promote. In the event the Parties [ * ]:
(a) GSK shall grant to EXEL [*]; and
(b) The licenses granted to GSK under Section 5.1.2 shall be
deemed to be modified to the extent necessary in order to allow EXEL to
undertake its Co-promotion activities thereunder.
(c) For each Co-promotion license granted to EXEL pursuant to
Section 5.1.3(a) with respect to a particular Licensed Product, GSK covenants
that [ * ]
5.2 TECHNOLOGY TRANSFER.
5.2.1 Initial Transfer. After GSK exercises its Development
Election for a Development Candidate pursuant to Section 4.3, EXEL shall:
(a) promptly deliver to GSK [ * ] all EXEL Technology and
other Information Controlled by the EXEL Entities relating to [ * ]; and
(b) transfer to GSK, or its designee [ * ]; and
(c) without limiting the foregoing, EXEL shall [ * ].
5.2.2 [ * ].
5.2.3 [ * ].
5.3 COMMERCIALIZATION PROGRAM.
5.3.1 Commencement; Term. GSK shall promptly commence and pursue
a program of ongoing development and commercialization for the Licensed Products
[ * ] (the "COMMERCIALIZATION PROGRAM"). Subject to the provisions of Article
12, the Commercialization Program shall terminate, on a Licensed
Product-by-Licensed Product basis, and a country-by-country basis, upon the
expiration of this Agreement with respect to such Licensed Product in such
country pursuant to Section 12.1.1 (the "COMMERCIALIZATION TERM").
5.3.2 GSK Responsibilities; Rights. Except as set forth in
Section 5.3.4(c), GSK, either itself and/or by and through its Affiliates,
Sublicensees or contractors, shall be responsible for, and shall have the
exclusive right to engage in, all development, manufacturing, marketing,
advertising, promotional, launch and sales activities in connection with the
marketing of the Licensed Products. As part of the Commercialization Program,
during the Commercialization Term, GSK shall:
(a) have the exclusive right and responsibility for
manufacturing all bulk drug substance or drug product material with respect to
Licensed Products for ongoing development and commercial requirements,
consistent with GSK's reasonable internal practices, industry standards and all
applicable laws and regulations;
(b) own all MAAs, Marketing Approvals and other regulatory
filings and approvals for the Licensed Product(s) in the Territory;
(c) prepare overview marketing plans for each of the
Licensed Products in the Territory;
(d) conduct, or cause to be conducted, manage and oversee
all analysis and other support necessary with respect to the manufacture,
marketing and sale of all Licensed Products in the Territory;
(e) [ * ];
(f) [ * ]; and
(g) maintain records, in sufficient detail, which shall be
complete and accurate and shall fully and properly reflect all work done and
results achieved in connection with the Commercialization Program in the form
required under all applicable laws and regulations.
5.3.3 GSK Diligence. During the Commercialization Term, GSK shall
[ *].
5.3.4 EXEL Responsibilities; Rights. As part of the
Commercialization Program, EXEL shall:
(a) appoint an internal contact to act as a project liaison
between EXEL and GSK for the further development and commercialization of such
Licensed Product (the "COMMERCIALIZATION LIAISON"). The Commercialization
Liaison shall be responsible for [ * ]. The name and contact information for
such Commercialization Liaison, as well as any replacement(s) chosen by EXEL, in
its sole discretion, from time to time, shall be promptly provided to GSK in
accordance with Section 14.9 of this Agreement. The Commercialization Liaison
position for each Licensed Product shall [ * ];
(b) transfer ownership of all regulatory filings for
Licensed Products, including all INDs to GSK, and provide GSK with copies of
such INDs and other regulatory filings, all pre-clinical and clinical data and
results for Licensed Products as set forth in Sections 3.6.2 and 5.2; and
(c) have the right to Co-promote each Licensed Product
throughout North America (the "CO-PROMOTION RIGHT") only pursuant to the
following conditions:
(i) GSK shall promptly notify EXEL of the filing by GSK
of the first MAA for Marketing Approval for each Licensed Product in North
America, and EXEL shall have [ * ] from the date of receipt of such notice from
GSK to exercise the Co-promotion Right;
(ii) if EXEL so exercises the Co-promotion Right, the
Parties shall, within [ * ] from such exercise, meet to commence good faith
negotiations to determine [ * ]. Such discussions will include [ * ]. If the
Parties agree [ * ].
5.4 COMPETITIVE PRODUCTS.
5.4.1 After GSK's Development Election. In the event that, at any
time after GSK exercises its Development Election and accepts a particular
Licensed Product for further development and commercialization, GSK [ * ].
5.4.2 [ * ].
5.5 RETURNED LICENSED PRODUCTS.
5.5.1 Termination of Development by GSK. In the event that GSK
exercises its Development Election and accepts a particular Licensed Product
into the Commercialization Program and thereafter [ * ], GSK shall be deemed to
have terminated its rights to such Licensed Product in such country(ies) or the
Territory, as the case may be (except for GSK's right to receive royalties under
Section 6.4.2), and thereafter such Licensed Product shall be deemed a "RETURNED
LICENSED PRODUCT" in such country(ies) or the Territory, as applicable.
5.5.2 Effect of Termination. Upon any such termination [ * ].
5.5.3 EXEL's Right to Commercialize. Thereafter, EXEL shall be
free to develop and commercialize the Returned Licensed Product in such
country(ies) or the Territory, as applicable, either alone, through an Affiliate
or with any Third Party, subject to the payments set forth in Section 6.4.2. In
the event EXEL decides to further develop and/or commercialize such Returned
Licensed Product in such country(ies) or the Territory, as applicable, either
alone, through an Affiliate or with any Third Party, EXEL shall be responsible
for any and all obligations of EXEL or GSK to Third Parties with respect to such
Returned Licensed Product including, but not limited to, any ongoing obligations
of GSK under Third Party manufacturing or licensing agreements.
5.5.4 Unauthorized Sales. In the event that EXEL acquires the
rights with respect to a Returned Licensed Product in some, but not all,
countries in the Territory, each Party shall use commercially reasonable
efforts, consistent with applicable laws, to assist the other Party in
maintaining such other Party's exclusive rights with respect to such Licensed
Product or Returned Licensed Product, as the case may be, within the countries
in its respective territory. Each Party shall also take all reasonable actions,
and shall use all commercially reasonable efforts to require its Affiliates,
Sublicensees and distributors to take all reasonable actions, not to solicit or
facilitate sales of such Licensed Product or Returned Licensed Product, as the
case may be, outside the countries in its respective territory, unless permitted
in writing by the other Party. In addition, each Party shall notify the other
Party immediately if it becomes aware of any such sales.
ARTICLE 6
MILESTONES AND ROYALTIES; PAYMENTS
6.1 UPFRONT PAYMENT TO EXEL. As consideration for, and to partially
fund the costs to be incurred by EXEL for, the research activities to be
conducted by EXEL for the intended benefit of GSK pursuant to the Development
Program, GSK shall pay to EXEL a non-refundable, non-creditable up-front payment
of:
(a) Thirty Million Dollars ($30,000,000) [ * ]; and
(b) [ * ] payable [ * ].
6.2 MILESTONES PAYMENTS TO EXEL. As partial consideration to EXEL for
the license and other rights granted to GSK under Article 5 of this Agreement,
GSK shall pay to EXEL the following non-refundable milestone payments upon the
occurrence of each event set forth below:
6.2.1 Product Acceptance Milestones.
(a) Subject to Section 6.2.1(b), GSK shall pay to EXEL the
following milestone payments upon GSK's exercise of its Development Election for
a particular Development Candidate to become a Licensed Product (each, a
"PRODUCT ACCEPTANCE MILESTONE"):
(i) First Option. If GSK exercises its Development Election
for a Development Candidate during the First Option Period for such Development
Candidate pursuant to Section 4.3.1(a) or 4.3.2(a) [ * ], then GSK shall pay to
EXEL within [ * ] of the delivery of notice to EXEL regarding such exercise
(subject to Section 14.6) the following amount [ * ]
(ii) Second Option. If GSK's Development Election is
exercised for a Refused Candidate during the Second Option Period for such
Refused Candidate pursuant to Sections 4.3.1(c) or 4.3.2(a), the Product
Acceptance Milestone(s) to be paid to EXEL shall be [ * ] , which shall be
determined [ * ] and shall be paid within [ * ] of the delivery of notice to
EXEL regarding such exercise (subject to Section 14.6).
(iii) Pipeline Option. If GSK's Development Election is
exercised for a Development Compound during the Pipeline Option Period pursuant
to Section 4.3.2(b) [ * ], then GSK shall pay to EXEL the following amount [ * ]
All payments under this Section 6.2.1(a)(iii) shall be made within [ * ] after [
* ] with respect to any such Development Compound [ * ].
(b) Any such Product Acceptance Milestone(s) [ * ].
6.2.2 Commercialization Milestones.
(a) Subject to Section 6.2.2(b), GSK shall, within [ * ] of the
first occurrence of each event set forth below with respect to each Licensed
Product, pay to EXEL the following non-refundable milestone payments:
(i) First Option. If GSK's Development Election was
exercised for a Development Candidate to become a Licensed Product during the
First Option Period for such Development Candidate pursuant to Sections 4.3.1(a)
or 4.3.2(a) [ * ]:
MILESTONE EVENT MILESTONE PAYMENT
------------------------------------------------------------------
1. - [ * ] . . . . . . . . . . . . . . [ * ]
------------------------------------------------------------------
2. - [ * ] . . . . . . . . . . . . . . [ * ]
------------------------------------------------------------------
3. - [ * ] . . . . . . . . . . . . . . [ * ]
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(ii) Second Option. If GSK's Development Election for a
Refused Candidate to become a Licensed Product was exercised during the Second
Option Period for such Refused Candidate pursuant to Sections 4.3.1(c) or
4.3.2(a), the milestone payment to EXEL for such Licensed Product shall be [ * ]
; and
(iii) Pipeline Option. If GSK's Development Election for a
Development Compound to become a Licensed Product was exercised during the
Pipeline Option Period for such Development Compound pursuant to Sections
4.3.2(b) (which is not otherwise deemed to have been exercised during the First
Option Period pursuant to Section 6.2.1(a)(iii)):
MILESTONE EVENT MILESTONE PAYMENT
------------------------------------------------------------------
1. - [ * ] . . . . . . . . . . . . . . [ * ]
------------------------------------------------------------------
2. - [ * ] . . . . . . . . . . . . . . [ * ]
------------------------------------------------------------------
3. - [ * ] . . . . . . . . . . . . . . [ * ]
------------------------------------------------------------------
(b) GSK shall be responsible for promptly informing EXEL when a
milestone has been achieved. Any milestone payments made pursuant to this
Section 6.2.2 [ * ].
(c) Notwithstanding anything contained herein to the contrary, in
the event that a particular Licensed Product: (1) has not achieved one or more
of the milestone events set forth in Section 6.2.2(a); and (2) total cumulative
Net Sales for [ * ] for such Licensed Product exceed [ * ] in the Territory, GSK
shall pay to EXEL (subject to Section 6.2.2(b)) all milestone payments for such
Licensed Product as if all milestone events had occurred and such Licensed
Product shall have been deemed to have achieved such milestone event(s) for all
purposes hereunder.
6.2.3 [ * ].
6.2.4 Payments Only Once. For purposes of clarification, it is
understood and agreed that: (A) with respect to the milestone events set forth
in Sections 6.1.1 and 6.1.2, a milestone payment shall be made by GSK with
respect to each Licensed Product based on whether GSK's Development Election
with respect to the Development Candidate as such Licensed Product was exercised
during the First Option Period, the Second Option Period or the Pipeline Option
Period; and (B) with respect to all milestone payments set forth in this Section
6.2, a particular milestone payment will be made with respect to each Licensed
Product only one (1) time [ * ].
6.3 ROYALTY PAYMENTS TO EXEL. As further consideration to EXEL for the
license and other rights granted to GSK under Article 5 of this Agreement, GSK
shall pay to EXEL royalties as follows:
6.3.1 Licensed Product Royalty Payments.
(a) Subject to Section 6.3.3, GSK shall pay EXEL a royalty on
annual Net Sales of Licensed Products by GSK, its Affiliates or Sublicensees in
the Territory. Such royalty shall be determined by: [ * ], in each case as set
forth in the following tables:
(i) First Option Period. If GSK's Development Election for
the applicable Licensed Product was made during the First Option Period pursuant
to Sections 4.3.1(a) or 4.3.2(a) (or GSK is deemed to have done so pursuant to
Section 6.2.1(a)(iii)): (A) the royalty rate for all Licensed Products shall [ *
]; and (B) the royalty rate for the individual Licensed Product so accepted
during the First Option Period shall be as follows:
[ * ]
(ii) Second Option Period. If GSK's Development Election for
a particular Licensed Product was made during the Second Option Period pursuant
to Sections 4.3.1(c) or 4.3.2(a): (A) the royalty rate for all Licensed Products
shall [ * ] ; and (B) the royalty rate for the individual Licensed Product so
accepted during the Second Option Period shall be as follows:
[ * ]
(iii) Pipeline Option Period. If GSK's Development Election
for a particular Licensed Product is made during the Pipeline Option Period
pursuant to Section 4.3.2(b) [ * ]: (A) the royalty rate for all Licensed
Products [ * ]; and (B) the royalty rate for the individual Licensed Product so
accepted during the Pipeline Option Period shall be [ * ], as follows:
[ * ]
(b) For purposes of determining the royalty rates applicable
under Section 6.3.1, it is understood that "total annual Net Sales" shall be
determined [ * ]. Further, it is understood that the royalty rates set forth
herein shall be [ * ].
(c) In the event the Gross Margin for a Licensed Product [ * ]
6.3.2 [ * ].
6.3.3 Termination of Royalty Obligation. For each Licensed Product,
the obligation to pay royalties under Section 6.3.1 shall terminate, on a
country-by-country basis, upon the expiration of the later of: (A) [ * ] ; or
(B) [ * ] of such Licensed Product in such country; provided, however, that the
royalty rate set forth in the respective tables in this Article 6 shall be
applicable for [ * ] claiming or covering the manufacture, use of sale of such
Licensed Product, and thereafter the royalty rate shall be [ * ] for such
Licensed Product for the remainder, if any, of the royalty term for such
Licensed Product set forth in this Section 6.3.3.
6.3.4 Schedule of Examples. To further clarify the application of
Sections 6.1 and 6.2, Schedule 6.3.4 sets forth examples of the milestone
payments and royalty rates that will apply in different scenarios.
6.4 ROYALTY PAYMENTS TO GSK. As further consideration to GSK for its
support of, and activities under, the Development Program, EXEL shall pay to GSK
royalties as follows:
6.4.1 EXEL Product Royalties. With respect to any Refused Candidate
that EXEL is free to develop and commercialize as provided in Section 4.3.1(b),
which Refused Candidate is subsequently commercialized by EXEL, or its
Affiliates or Sublicensees, EXEL shall pay to GSK a royalty of [ * ] of total
Net Sales in the Territory of all products incorporating [ * ], and/or
formulations, mixtures or compositions incorporating any of the foregoing (an
"EXEL PRODUCT") by EXEL, its Affiliates or Sublicensees.
(a) The obligation to pay royalties under Section 6.4.1 for each
EXEL Product so commercialized shall terminate, on a country-by-country basis,
upon the expiration of the later of: (1) the expiration of [ * ] claiming or
covering the manufacture, use or sale of such EXEL Product in such country; or
(2) [ * ] of such EXEL Product in such country; provided, however, the royalty
rate set forth herein shall be applicable for [ * ] described above claiming or
covering the manufacture, use or sale of such EXEL Product, and thereafter the
royalty rate shall be [ * ] for such EXEL Product for the remainder, if any, of
the royalty term for such EXEL Product set forth in this Section 6.4.1(a).
6.4.2 Returned Licensed Product Royalties. With respect to any
Returned Licensed Product under Section 5.5 that is subsequently commercialized
by EXEL, either alone or with a Third Party (including any Sublicensee), EXEL
shall pay to GSK a royalty on total Net Sales of such Returned Licensed Product
by EXEL, its Affiliates or Sublicensees as follows:
(a) an amount equal to [ * ] of the aggregate Net Sales of such
Returned Licensed Product if GSK terminated its commercialization of such
Returned Licensed Product [ * ]; or
(b) an amount equal to [ * ] of the aggregate Net Sales of such
Returned Licensed Product if GSK terminated its commercialization of such
Returned Licensed Product [ * ].
(c) The obligation to pay royalties under Section 6.4.2 for each
Returned Licensed Product so commercialized shall terminate on a
country-by-country basis upon the expiration of the later of: (1) the expiration
of [ * ] claiming or covering the manufacture, use or sale of such Returned
Licensed Product in such country; or (2) [ * ] of such Returned Licensed Product
in such country; provided, however, that the royalty rate set forth herein shall
be applicable for [ * ] described above claiming or covering the manufacture,
use or sale of such Returned Licensed Product, and thereafter the royalty rate
shall be [ * ] for such Returned Licensed Product for the remainder, if any, of
the royalty term for such Returned Licensed Product set forth in this Section
6.4.2(c).
6.4.3 Royalties on EXEL Biotherapeutic Products. EXEL shall pay to GSK
a royalty of [ * ] of total Net Sales, reduced by royalties due to Third
Parties, as described in Section 6.4.4, by EXEL, its Affiliates or Sublicensees,
on a country-by-country basis, of all Biotherapeutic Products which EXEL, either
alone or through an Affiliate or Third Party, develops and commercializes for [
* ] (each, an "EXEL BIOTHERAPEUTIC PRODUCT"). The obligation to pay royalties
under this Section 6.4.3 for each EXEL Biotherapeutic Product so commercialized
shall terminate, on a country-by-country basis, upon the expiration of the later
of: (A) the expiration of [ * ] claiming or covering the manufacture, use or
sale of such EXEL Biotherapeutic Product is directed; or (B) [ * ] of such EXEL
Biotherapeutic Product; provided, however, the royalty rate set forth above
shall be applicable for [ * ] described above claiming or covering the
manufacture, use or sale of such EXEL Biotherapeutic Product, and thereafter the
royalty rate shall be [ * ] for such EXEL Biotherapeutic Product for the
remainder, if any, of the royalty term for such EXEL Biotherapeutic Product set
forth in this Section 6.4.3.
6.4.4 EXEL Royalties Offsets. If, during the Term, EXEL deems it
necessary to seek or obtain a license from any Third Party in order to develop
and commercialize any EXEL Product, Returned Licensed Product or EXEL
Biotherapeutic Product under this Agreement, EXEL shall be entitled to offset
against royalties otherwise due GSK under Section 6.4 [ * ] of any royalties or
other fees paid by EXEL to such Third Party under such license; provided,
however, in no event shall such deduction reduce the royalties otherwise payable
to GSK during any calendar year by more than [ * ]; further provided, however,
that any deductible amounts not applied in a particular calendar year shall be
carried over and applied in subsequent calendar years until the full deduction
has been taken.
6.5 PAYMENTS.
6.5.1 Commencement. Beginning with the Calendar Quarter in which the
First Commercial Sale for an applicable Product is made and for each Calendar
Quarter thereafter, royalty payments shall be made to either EXEL pursuant to
Sections 6.3, or GSK pursuant to Section 6.4 (the "PAYEE") within [ * ]
following the end of each such Calendar Quarter. Each royalty payment shall be
accompanied by a report, summarizing the total Net Sales for the applicable
Product during the relevant Calendar Quarter and the calculation of royalties,
if any, due thereon. In the event that no royalties are payable in respect of a
given Calendar Quarter, the Party making the payments (the "PAYOR") shall submit
a royalty report so indicating.
6.5.2 Mode of Payment. All payments due under this Agreement shall be
payable, in full, in U.S. dollars, regardless of the country(ies) in which sales
are made or in which payments are originated. For the purposes of computing Net
Sales of Products sold in a currency other than U.S. dollars, such currency
shall be converted into U.S. dollars as calculated at the actual average rates
of exchange for the pertinent quarter or year to date, as the case may be, as
used by the Payor in producing its quarterly and annual accounts, as confirmed
by the Payor's auditors. Subject to Sections 6.4.4, Section 6.7 and Section
6.8.2, such payments shall be without deduction of exchange, collection or other
charges.
6.5.3 Records Retention. Commencing with the First Commercial Sale of
a Product, the Payor shall keep complete and accurate records pertaining to the
sale of such Products, for a period of [ * ] after the year in which such sales
occurred, and in sufficient detail to permit the Payee to confirm the accuracy
of the royalties paid by the Payor hereunder.
6.5.4 Expatriated Payments. If by law, regulation, or fiscal policy of
a particular country, conversion into United States dollars or transfer of funds
of a convertible currency to the United States is restricted or forbidden, the
Payor shall give the Payee prompt written notice of such restriction, which
notice shall satisfy the payment deadlines in this Agreement. The Payor shall
pay any amounts due to the Payee through whatever lawful method it chooses,
including without limitation making such payments in the local currency of such
country, provided such choice is consistent with seeking to make the payment in
the most expeditious manner possible.
6.6 AUDITS. During the term of this Agreement and for a period of [ *
] thereafter, at the request and expense of the Payee, the Payor shall permit an
independent, certified public accountant of nationally recognized standing
appointed by the Payee, and reasonably acceptable to the Payor, at reasonable
times and upon reasonable notice, but in no case no more than once per calendar
year thereafter, to examine such records as may be necessary for the sole
purpose of verifying the calculation and reporting of Net Sales and the
correctness of any royalty payment made under this Agreement for any period
within the preceding [ * ]. Results of any such examination shall be made
available to both Payor and Payee. The independent, certified public accountant
shall disclose to the Payee only the royalty amounts which the independent
auditor believes to be due and payable hereunder to the Payee and shall disclose
no other information revealed in such audit. Any and all records examined by
such independent accountant shall be deemed the Payor's Confidential Information
which may not be disclosed by said independent, certified public accountant to
any Third Party. If, as a result of any inspection of the books and records of
the Payor, it is shown that a Payee's payments under this Agreement were less
than the amount which should have been paid, then the Payor shall make all
payments required to be made to eliminate any discrepancy revealed by said
inspection within [ * ]. The Payee shall pay for such audits, except that in the
event that the royalty payments made by the Payor were less than [ * ] of the
undisputed amounts that should have been paid during the period in question, the
Payor shall pay the reasonable costs of the audit.
6.7 TAXES.
6.7.1 Sales or Other Transfers. The recipient of any transfer under
this Agreement of EXEL Technology, GSK Technology, Information, Development
Compounds, Licensed Products or Returned Licensed Products, as the case may be,
shall be solely responsible for any sales, use, value added, excise or other
non-income taxes applicable to such transfer.
6.7.2 Withholding. In the event that the Payor, or any of its
Affiliates or Sublicensees is required to withhold any tax to the tax or revenue
authorities in any country regarding any payment to the Payee due to the laws of
such country: (A) such amount shall be promptly paid by the Payor or its
Affiliate or Sublicensee for and on behalf of the Payee to the appropriate
governmental authority; (B) such amount shall be deducted from the payment to be
made by the Payor; and (C) the Payor shall promptly notify the Payee of such
withholding and, within a reasonable amount of time after making such deduction,
furnish the Payee with proof of payment of such tax together with copies of any
tax certificate or other documentation evidencing such withholding sufficient to
enable the Payee to support a claim, if permissible, for income tax credit in
respect of any amount so withheld. Each of Payor and Payee agrees to cooperate
with the other in claiming exemptions from such deductions or withholdings under
any agreement or treaty from time to time in effect. However, any such deduction
or withholding shall be an expense of and borne solely by the Payee.
6.8 CREDIT AGAINST PAYMENTS FOR THIRD PARTY LICENSE.
6.8.1 Payments under Third Party Agreements Entered into by EXEL. EXEL
shall have sole financial responsibility for all royalty and other payments
required to be paid to any Third Party as a result of, or relating to, EXEL's
activities under this Agreement including, without limitation, payments due on
sales of Licensed Products. Such payments shall be made by EXEL directly to the
relevant Third Party in accordance with the provisions of the applicable Third
Party license agreement.
6.8.2 Right of Offset. GSK shall be entitled to an offset against
royalties as follows:
(a) if, during the Term, GSK, [ * ] deems it necessary to seek or
obtain a license from any Third Party in order to develop and commercialize a
Licensed Product pursuant to the rights and licenses granted hereunder, [ * ] of
any royalties or other fees paid to such Third Party under such license shall be
deducted from royalties otherwise due EXEL under this Agreement; provided,
however, in no event shall such deduction reduce the royalties otherwise payable
to EXEL during any calendar year by more than [ * ]; further provided, however,
that any deductible amounts not applied in a particular calendar year shall be
carried over and applied in subsequent calendar years until the full deduction
has been taken; and
(b) [ * ]
6.8.3 Consultation. GSK shall [ * ] for which GSK would seek to deduct
royalties under Section 6.8.2, and shall [ * ] with respect to such proposed
license agreement.
6.9 COMPULSORY LICENSES. In the event that a governmental agency in
any country in the Territory grants, or compels EXEL to grant, a license to any
Third Party for a Licensed Product, other than to an Affiliate or Sublicensee of
GSK, GSK shall [ * ]. For the avoidance of doubt, any sales of Licensed Products
by a licensee pursuant to a compulsory license shall in no case be included in
the Net Sales calculation or be the basis of any milestone payment(s) under this
Agreement.
ARTICLE 7
EXCLUSIVITY
7.1 EXEL PROHIBITED ACTIVITIES.
7.1.1 Regarding Targets and Compounds. Except as necessary to perform
its obligations under this Agreement, EXEL shall not, either alone, through an
Affiliate or with any Third Party:
(a) during [ * ];
(b) during [ * ]; or
(c) during [ * ].
7.1.2 Regarding EXEL Technology. With respect to any given Development
Compound, from [ * ] EXEL shall [ * ].
7.2 EXEL PERMITTED ACTIVITIES. Subject to Section 7.1, but
notwithstanding anything else in this Agreement to the contrary:
7.2.1 Outside the Field. GSK acknowledges and agrees that EXEL is
engaged generally in the elucidation of biological pathways in model systems,
that biological systems are by their nature redundant, and that, therefore,
different pathways may contain the same human molecular target. For example, and
without limitation, EXEL has been, and may be in the future, engaged by a Third
Party to identify targets in a research field or disease area other than the
Field (an "OTHER FIELD"). Such research may result in the identification of
human molecular targets that are the same as Existing Targets or Collaboration
Targets, and in the case where such identification arises under a Future Third
Party Collaboration during [ * ], EXEL shall [ * ].
7.2.2 Regarding EXEL Biotherapeutic Products. EXEL will not be
restricted from conducting any activities related to researching, developing
and/or commercializing any EXEL Biotherapeutic Products, provided, however, that
EXEL shall [ * ].
7.2.3 Regarding Targets. EXEL will not be restricted from conducting
any activities: (A) related to any Excluded Targets, or (B) with respect to
targets outside the Field.
7.2.4 Regarding Development Compounds. EXEL shall at all times have
the right to use any Development Compound [ * ].
7.3 GSK ACTIVITIES. GSK will not be restricted from conducting any
activities, including, without limitation, activities in the Field outside this
Agreement; provided that the foregoing shall not be construed to grant to GSK
any license under the EXEL Technology except as expressly provided in this
Agreement. GSK covenants [ * ].
7.4 EXISTING THIRD PARTY COLLABORATIONS.
7.4.1 Oncology Collaborations. GSK acknowledges [ * ] (each, an
"ONCOLOGY COLLABORATOR"), and [ * ].
7.4.2 Non-Selected Targets. Notwithstanding the foregoing, pursuant to
an Existing Third Party Collaboration with an Oncology Collaborator, with
respect to [ * ] (each, a "NON-SELECTED TARGET"), EXEL hereby agrees [ * ].
7.4.3 Encumbered Targets and Compounds. Pursuant to an Existing Third
Party Collaboration with an Oncology Collaborator, EXEL retains the right to [ *
] (each, an "ENCUMBERED TARGET"). However, GSK understands and acknowledges that
such Existing Third Party Collaboration [ * ] (each, an "ENCUMBERED COMPOUND"),
including without limitation, [ * ]. At any time [ * ].
7.5 EXCLUDED COMPOUNDS. The Parties expressly acknowledge and agree
that GSK shall have no rights under this Agreement with respect to [ * ].
ARTICLE 8
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
8.1 OWNERSHIP.
8.1.1 Generally.
(a) GSK and its Affiliates shall retain all of their right, title
and interest in and to the GSK Technology existing as of the Effective Date, and
the EXEL Entities (subject to completion by Artemis Pharmaceuticals GmbH
("ARTEMIS") of its asset transfer obligations under the Artemis Agreement) shall
retain all of their right, title and interest in and to the EXEL Technology
existing as of the Effective Date; including without limitation the right to
transfer or license such intellectual property to Third Parties for any purpose,
subject only to each Party's obligations under this Agreement, including but not
limited to the obligations set forth in Article 7 and the licenses granted in
Article 5. Following the Effective Date, subject to Section 8.1.1(b), GSK and
its Affiliates shall retain all of their right, title and interest in and to the
GSK Technology, and the EXEL Entities (subject to completion by Artemis of its
asset transfer obligations under the Artemis Agreement) shall retain all of
their right, title and interest in and to the EXEL Technology, in each case
developed during the Term, subject to the rights granted to each Party under
this Agreement.
(b) Notwithstanding Section 8.1.1(a), all right, title and
interest in and to all [ * ], shall be owned by [ * ], except that any [ * ]
("GSK COMPOUND INVENTIONS") shall be solely owned by [ * ]. GSK shall [ * ]. For
purposes of this Agreement, "COMPOUND INVENTIONS" shall mean [ * ] that is
discovered, conceived or created solely or jointly by employees, agents or
consultants of [ * ] in the course of performing their respective activities
under the Development Program.
(i) For the avoidance of doubt, Patents [ * ] ("COMPOUND
PATENTS"), if any, shall be [ * ].
(ii) To the extent that any such Compound Patent [ * ] GSK
shall [ * ].
(c) All right, title and interest in and to all [ * ], shall be
owned by GSK or its Affiliates. All right, title and interest in and to all [ *
], shall be jointly owned by GSK or the relevant Affiliate and the EXEL Entities
in equal and undivided shares. Except as expressly provided in this Agreement,
neither Party shall have any obligation to account to the other for profits, or
to obtain any consent of the other Party to license or exploit patented
jointly-owned subject matter, by reason of joint ownership thereof, and each
Party hereby waives any right it may have under the laws of any jurisdiction to
require any such consent or accounting.
8.1.2 Patent Filings. The Party responsible for Prosecution and
Maintenance of Patents claiming any Collaboration Technology as set forth in
Sections 8.1.3 and 8.1.4 shall use reasonable diligent efforts (which shall
include, without limitation, ensuring that, in the case of EXEL, EXEL
Deutschland GmbH, and in the case of GSK, its Affiliates, comply with all
reasonable requests relating to such Prosecution and Maintenance of Patents) to
obtain a reasonable scope of protection for Development Compounds and Licensed
Products, as applicable, and will consider in good faith reasonable comments
provided by the other Party.
8.1.3 Compound Patents and Joint Patents. The responsibility and
strategy for Prosecution and Maintenance of Compound Patents and Patents
claiming any jointly owned Collaboration Technology shall be [ * ]. The Parties
shall cooperate to prepare and prosecute patent applications for Compound
Patents and Patents claiming any such Collaboration Technology in a manner that
ensures a reasonable scope of protection for the relevant subject matter.
8.1.4 Solely Owned Patents. GSK or EXEL, as the case may be, shall
control the Prosecution and Maintenance of Patents claiming any Collaboration
Technology owned solely by GSK or its Affiliates, or the EXEL Entities, as the
case may be, and as set forth in Section 8.1.1, in each case [ * ]; provided,
however, that the control of the Prosecution and Maintenance of Compound Patents
shall be subject to 8.1.3 and the Patent Costs related thereto shall be subject
to Section 8.2.1.
8.1.5 Other Matters Pertaining to Prosecution of Patents.
(a) The Collaboration Committee shall establish a subcommittee
(the "PATENT SUBCOMMITTEE") to coordinate Prosecution and Maintenance of the
Compound Patents and patents claiming any jointly owned Collaboration
Technology. The Patent Subcommittee shall report to the Collaboration Committee.
Each Party shall submit to the Patent Subcommittee copies of all correspondence
with patent authorities covering such Collaboration Technology for which such
Party has responsibility for Prosecution and Maintenance. Each Party shall keep
the Patent Subcommittee informed as to material developments with respect to the
Prosecution and Maintenance of Patents claiming such Collaboration Technology,
including without limitation, by providing upon request copies of any
substantive documents that such Party or its relevant Affiliate receives from
any patent office, including notice of all interferences, reissues,
re-examinations, oppositions or requests for patent term extensions, and by
providing the other Party the opportunity to have reasonable input into the
strategic aspects of such Prosecution and Maintenance. Without limiting the
foregoing, neither Party shall [ * ].
(b) If, during the Term, the Party responsible for prosecuting a
Patent claiming jointly owned Collaboration Technology or any Compound Patent
(the "PROSECUTING PARTY"), intends to allow such Patent to lapse or become
abandoned without having first filed a substitute, the Prosecuting Party shall,
whenever practicable, notify the other Party of such intention at least [ * ]
prior to the date upon which such Patent shall lapse or become abandoned, and
such other Party shall thereupon have the right, but not the obligation, to
assume responsibility for the Prosecution and Maintenance thereof [ * ].
8.2 PATENT COSTS.
8.2.1 Collaboration Technology and Compound Patents. As set forth in
Section 8.1.4, [ * ] shall be responsible for [ * ] associated with the
Prosecution and Maintenance of Patents claiming any [ * ]; provided, however,
that EXEL and GSK shall [ * ]. EXEL and GSK shall [ * ], unless the Parties
otherwise agree.
8.2.2 Existing EXEL Technology and GSK Technology. EXEL shall be
responsible for [ * ] with respect to EXEL Technology existing as of the
Effective Date. GSK shall be responsible for [ * ] with respect to GSK
Technology existing as of the Effective Date. If a Party chooses not to
Prosecute and Maintain a [ * ], then to the extent such Party owns such Patent,
it shall use good faith efforts to promptly notify the other Party of its
decision. Thereafter, if such Patent [ * ], the other Party shall [ * ].
8.3 ENFORCEMENT RIGHTS.
8.3.1 Defense and Settlement of Third Party Claims.
(a) Development Compounds. If a Third Party asserts that a Patent
or other right owned by it is infringed by the manufacture, use, sale or
importation of [ * ], the Party first having knowledge of such a claim shall
promptly provide the other Party notice of such claim and the related facts in
reasonable detail. In such event, [ * ] shall determine best how to control the
defense of any such claim; provided, however, that if such claim also covers [ *
] then [ * ] shall control. In the event [ * ] on the strategy for the defense
of any such claim, such defense shall be controlled by [ * ]; provided, that [ *
] shall have the right [ * ] to participate in such defense and to be
represented by counsel of its choice. The Party that controls the defense of a
given claim with respect to [ * ], shall also have the right to control
settlement of such claim.
(b) Licensed Products. If a Third Party asserts that a Patent or
other right owned by it is infringed by the manufacture, use, sale or
importation of [ * ], [ * ] shall have the primary right but not the obligation
to control the defense of any such assertions [ * ]. In the event [ * ] elects
to control the defense of any such Third Party claims, [ * ] shall have the
right to control the settlement of such claims; provided, however, that no
settlement shall be entered into [ * ]. Any Third Party royalties that arise in
connection with the settlement of a Third Party claim of infringement against a
Licensed Product shall be subject to [ * ]. In any event, the Parties shall
reasonably assist one another and cooperate in any such litigation at the
other's request without expense to the requesting Party. Each Party may [ * ]
join any defense brought by the other Party.
8.3.2 Infringement by Third Parties. If any Party learns of an
infringement, unauthorized use, misappropriation or ownership claim or
threatened infringement or other such activity by a Third Party with respect to
[ * ] ("COMPETITIVE INFRINGEMENT"), such Party shall promptly notify the other
Party and shall provide such other Party with available evidence of such
Competitive Infringement.
(a) [ * ] shall have the primary right, but not the obligation,
to institute, prosecute, and control any action or proceeding with respect to
Competitive Infringement of a Patent claiming [ * ], by counsel of its own
choice, and [ * ] shall have the right, [ * ], to be represented in that action
by counsel of its own choice. If [ * ] fails to bring an action or proceeding
within a period of [ * ] after a request by [ * ] to do so, then, to the extent
that such Competitive Infringement relates to [ * ], [ * ] shall have the right
to bring and control any such action by counsel of its own choice, and [ * ]
shall have the right to be represented in any such action by counsel of its own
choice [ * ]. Notwithstanding the foregoing, in the event that a Competitive
Infringement implicates a Patent that covers [ * ].
(b) [ * ] shall have the primary right, but not the obligation,
to institute, prosecute, and control any action or proceeding with respect to
Competitive Infringement of a Patent claiming [ * ], by counsel of its own
choice, and [ * ] shall have the right, at its own expense, to be represented in
that action by counsel of its own choice. If [ * ] fails to bring an action or
proceeding within a period of [ * ] after a request by [ * ] to do so, [ * ]
shall have the right to bring and control any such action by counsel of its own
choice, and [ * ] shall have the right to be represented in any such action by
counsel of its own choice [ * ].
(c) If one Party brings any such action or proceeding in
accordance with this Section 8.3.2, the second Party agrees to be joined as a
party plaintiff and to give the first Party reasonable assistance and authority
to file and prosecute the suit. The costs and expenses of the Party bringing
suit under this Section 8.3.2 shall be borne by [ * ], and any damages or other
monetary awards recovered shall be shared [ * ]. A settlement or consent
judgment or other voluntary final disposition of a suit under this Section 8.3.2
may be entered into without the consent of the Party not bringing the suit;
provided that [ * ].
(d) Subject to Sections 8.3.2(a), (b) and (c), with respect to
Patents claiming [ * ], [ * ] may proceed in such manner as the law permits. [ *
] shall bear [ * ], and the amount of recovery actually received by [ * ] shall
first be applied to reimburse [ * ]; and then any remaining proceeds shall be
allocated [ * ].
ARTICLE 9
CONFIDENTIALITY
9.1 CONFIDENTIALITY; EXCEPTIONS. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the Parties agree
that the receiving Party (the "RECEIVING PARTY") shall keep confidential and
shall not publish or otherwise disclose or use for any purpose other than as
provided for in this Agreement any Information or other confidential and
proprietary information and materials patentable or otherwise, in any form
(written, oral, photographic, electronic, magnetic, or otherwise) which is
disclosed to it by the other Party (the "DISCLOSING PARTY") or otherwise
received or accessed by a Receiving Party in the course of performing its
obligations under this Agreement including, but not limited to trade secrets,
know-how, proprietary information, formulae, processes, techniques and
information relating to a Party's past, present and future marketing, financial,
and research and development activities of any product of the Disclosing Party
and the pricing thereof (collectively, "CONFIDENTIAL INFORMATION"), except to
the extent that it can be established by the Receiving Party that such
Confidential Information:
9.1.1 was in the lawful knowledge and possession of the Receiving
Party prior to the time it was disclosed to, or learned by, the Receiving Party,
or was otherwise developed independently by the Receiving Party, as evidenced by
written records kept in the ordinary course of business, or other documentary
proof of actual use by the Receiving Party;
9.1.2 was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the Receiving Party;
9.1.3 became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the Receiving Party in breach of this Agreement; or
9.1.4 was disclosed to the Receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
Disclosing Party not to disclose such information to others. Notwithstanding any
disclosure of Confidential Information of the Disclosing Party to the Receiving
Party, no ownership of such Confidential Information shall be transferred as a
result of such disclosure.
9.2 AUTHORIZED DISCLOSURE. Except as expressly provided otherwise in
this Agreement, a Receiving Party may use and disclose Confidential Information
of the Disclosing Party as follows: (i) under appropriate confidentiality
provisions substantially equivalent to those in this Agreement, in connection
with the performance of its obligations or exercise of rights granted or
reserved in this Agreement through an Affiliate or any Third Party (including
the rights to commercialize Licensed Products and to grant licenses and
sublicenses hereunder); or (ii) to the extent such disclosure is reasonably
necessary in filing or prosecuting patent, copyright and trademark applications,
prosecuting or defending litigation, complying with applicable governmental
regulations, obtaining regulatory approval, conducting preclinical activities or
clinical trials, marketing Licensed Products, or otherwise required by law;
provided, however, that if a Receiving Party is required by law or regulation to
make any such disclosure of a Disclosing Party's Confidential Information it
will, except where impracticable for necessary disclosures, for example in the
event of medical emergency, give reasonable advance notice to the Disclosing
Party of such disclosure requirement and, except to the extent inappropriate in
the case of patent applications, will use its reasonable efforts to secure
confidential treatment of such Confidential Information required to be
disclosed; or (iii) in communication with investors, consultants, advisors or
others on a need to know basis, in each case under appropriate confidentiality
provisions substantially equivalent to those of this Agreement; or (iv) to the
extent mutually agreed to in writing by the Parties.
9.3 ADDITIONAL CONFIDENTIALITY REQUIREMENTS. In addition to the foregoing,
any Information or other Collaboration Technology developed pursuant to the
Development Program that solely relates to Development Compounds (for so long as
GSK's ability to exercise a Development Election with respect to same have not
expired) or Licensed Products that is necessary or useful for GSK to continue to
develop such Development Compounds or Licensed Products, shall be deemed to be
the Confidential Information of each Party as a Disclosing Party and each Party
shall have the obligations of a Receiving Party pursuant to this Article 9,
except for disclosures to permitted Sublicensees as set forth in this Agreement,
and except to any Third Party in connection with EXEL's rights pursuant to
Section 4.4, without the prior written consent of both Parties This obligation
shall not apply to any Information or other Collaboration Technology that has
general utility as it relates to any use or application other than such
Development Compounds or Licensed Products.
9.4 TERMINATION OF PRIOR AGREEMENT. This Agreement supersedes the
Non-Disclosure Agreement executed by EXEL and GSK dated [ * ] (including any and
all amendments thereto). All information exchanged between the Parties under
that Agreement shall be deemed Confidential Information hereunder and shall be
subject to the terms of this Article 9.
9.5 REMEDIES. Each Party shall be entitled, in addition to any other right
or remedy it may have, at law or in equity, to an injunction, without the
posting of any bond or other security, enjoining or restraining the other Party
from any violation or threatened violation of this Article 9.
9.6 PUBLICATIONS. Each Party shall submit any proposed publication
containing Confidential Information of the other Party to the other Party at
least [ * ] in advance to allow that Party to review such planned public
disclosure. The reviewing Party will promptly review such proposed publication
and respond in any event within [ * ] and make any objections that it may have
to the publication of Confidential Information of the reviewing Party contained
therein. Should the reviewing Party make an objection to the publication of any
such Confidential Information, then the Parties shall discuss the advantages and
disadvantages of publishing such Confidential Information. If the Parties are
unable to agree on whether to publish the same, subject to Section 14.1, [ * ]
shall attempt to resolve the matter but if it is unable to do so such matter
shall be resolved in accordance with the dispute resolution provisions of
Section 14.2. Notwithstanding the foregoing, upon the reviewing Party's request,
the other Party shall not submit any such publication until the reviewing Party
is given a reasonable period of time to secure patent protection for any
material in such publication that it believes to be patentable.
ARTICLE 10
REPRESENTATIONS; WARRANTIES AND COVENANTS
10.1 REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES. Each Party
represents and warrants to the other Party, as of the Effective Date, that:
10.1.1 such Party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof;
10.1.2 such Party has taken all necessary action on its part to
authorize the execution and delivery of this Agreement and the performance of
its obligations hereunder;
10.1.3 this Agreement has been duly executed and delivered
on behalf of such Party, and constitutes a legal, valid, binding obligation,
enforceable against it in accordance with the terms hereof;
10.1.4 the execution, delivery and performance of this Agreement by
such Party, including without limitation the grant of rights to the other Party
pursuant to this Agreement, does not: (A) conflict with, nor result in any
violation of or default under, any agreement, instrument or understanding, oral
or written, to which it or any Affiliate is a party or by which it or any
Affiliate is bound; (B) conflict with any rights granted by such Party to any
Third Party or breach any obligation that such Party has to any Third Party; nor
(C) violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over such Party;
10.1.5 no government authorization, consent, approval, license,
exemption of or filing or registration with any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, under any applicable laws, rules or regulations currently in effect is
necessary for, or in connection with, the transaction contemplated by this
Agreement or any other agreement or instrument executed in connection herewith,
or for the performance by it of its obligations under this Agreement and such
other agreements except as may be required under the Stock Purchase Agreement;
and
10.1.6 it has not employed (and, to the best of its knowledge without
further duty of inquiry, has not used a contractor or consultant that has
employed) any individual or entity debarred by the FDA (or subject to a similar
sanction of EMEA), or, to the best of its knowledge without further duty of
inquiry, any individual who or entity which is the subject of an FDA debarment
investigation or proceeding (or similar proceeding of EMEA), in the conduct of
the preclinical or clinical studies of Development Compounds and its activities
under the Development Program.
10.2 REPRESENTATIONS AND WARRANTIES OF EXEL. EXEL represents and
warrants to GSK, as of the Effective Date, that:
10.2.1 to the best of its knowledge and belief, EXEL Controls all
rights it purports to grant to GSK to the EXEL Know-How and EXEL Patents under
this Agreement;
10.2.2 to the best of its knowledge and belief: (A) the issued EXEL
Patents, if any, listed as Schedule 1.62 are valid and in full force and effect;
(B) the EXEL Patents are not the subject of any interference or opposition
proceedings; and (C) EXEL is not aware of any pending or threatened action, suit
proceeding or claim by a Third Party challenging the ownership rights in,
validity or scope of such EXEL Patents;
10.2.3 to the best of its knowledge and belief: (A) EXEL is not aware
of any notice from any Third Party asserting any ownership rights to any of the
EXEL Know-How; and (B) EXEL is not aware of any pending or threatened action,
suit, proceeding or claim by a Third Party asserting that EXEL is infringing or
otherwise is violating any patents, trade secret or other proprietary right of
any Third Party as would reasonably be expected to result in a material adverse
effect upon the ability of EXEL to fulfill any of its obligations under this
Agreement;
10.2.4 to the best of its knowledge and belief, EXEL has not granted
any right to any Third Party relating to the EXEL Technology which conflicts
with the rights granted to GSK hereunder;
10.2.5 No [ * ] Controls any [ * ] that are [ * ];
10.2.6 EXEL has all [ * ] to conduct the activities to be conducted by
EXEL under this Agreement and to fulfill its obligations under this Agreement;
10.2.7 the agreements identified on Schedule 1.68 comprise a complete
and accurate list of all collaboration agreements between EXEL and a Third Party
in existence on the Effective Date that [ * ] pursuant to this Agreement;
10.2.8 (A) the Existing Third Party Collaborations [ * ]; (B) EXEL has
[ * ];
10.2.9 EXEL is not a party to any arrangement or agreement that EXEL
reasonably believes [ * ];
10.2.10 the compounds identified on Schedule 1.66 comprise a complete
and accurate list of all compounds identified as [ * ] as of the Effective Date;
10.2.11 the human molecular targets identified on Schedule 1.67
comprise a complete and accurate list of all human molecular targets [ * ] as of
the Effective Date and do not include any Excluded Targets or Biotherapeutic
Targets;
10.2.12 to the best of its knowledge and belief, the targets
identified on Schedule 1.65 meet all of the criteria set forth in Section 2.5.3;
10.2.13 other than as described in the SEC Filings (as defined in
Section 4.5.1 of the Stock Purchase Agreement, there are no claims, actions, or
proceedings pending or, to EXEL's knowledge, threatened; nor, except as
disclosed on Schedule 4.6 of the Stock Purchase Agreement, are there any formal
inquiries or notices which may lead to the institution of such legal
proceedings, against EXEL or its properties, assets or business, which if
adversely decided, would, individually or in the aggregate, have a material
adverse effect or prevent EXEL's ability to conduct the Development Program or
to grant the licenses to be granted to GSK upon the exercise of GSK's
Development Election;
10.2.14 EXEL has not [ * ] which EXEL reasonably believes would [ * ];
and
10.2.15 to the best of EXEL's knowledge and belief the Employee
Agreements and the Artemis Intellectual Property constitute substantially all of
the intellectual property rights and other enabling rights [ * ] (as defined in
the Artemis Agreement). For purposes of this Section 10.2.15: (A) the "EMPLOYEE
AGREEMENTS" means the employee agreements, between Artemis Pharmaceutical GmbH
and its employees that were transferred to Exelixis Deutschland GmbH; and (B)
the "ARTEMIS INTELLECTUAL PROPERTY" means the Assets, Know-how, Contracts and
Joint Contracts (as the same are defined under Artemis Agreement) that were
transferred, to be transferred, or to be managed under the Artemis Agreement in
accordance with the provisions thereof.
10.3 COVENANTS OF EXEL. EXEL covenants and agrees, from and after the
Effective Date and during the Term, that:
10.3.1 EXEL shall provide access to Confidential Information of GSK
only to EXEL's employees, consultants and independent contractors who, in each
case, need such access (including without limitation access to GSK Know-How on
any database that is owned or controlled by EXEL or its Affiliates which access
shall in all cases be password-protected or otherwise similarly restricted) to
perform services or activities under the Development Program and who, prior to
such access, have executed appropriate confidentiality and invention assignment
agreements to protect the Confidential Information of GSK and to retain or
obtain ownership of all EXEL Technology;
10.3.2 EXEL shall not amend the terms of any [ * ] in such a manner as
would have a material adverse effect on EXEL's performance of its obligations
under this Agreement, in whole or in part, without the prior written consent of
GSK;
10.3.3 EXEL shall not enter into any agreement with any Third Party
that EXEL reasonably believes would materially adversely affect EXEL's ability
to successfully conduct the Development Program;
10.3.4 all Collaboration Technology that is discovered, conceived or
created solely or jointly by the employees, agents, consultants or
subcontractors (with respect to subcontractors, subject to Section 3.11) of EXEL
or its Affiliates shall be Controlled by the EXEL Entities during the Term;
10.3.5 subject to Section 7.1.1, during the Term, EXEL shall not grant
any right to any Third Party relating to the EXEL Technology which conflicts
with the rights granted to GSK hereunder. Except as may be provided under the
Loan Agreement, during the Term EXEL shall not encumber the EXEL Patents with
liens, mortgages, security interests or another similar interest that would give
the holder the right to convert the interest into patent ownership, unless the
encumbrance is expressly subject to the licenses herein;
10.3.6 it shall not employ (or, to the best of its knowledge without
further duty of inquiry, shall not use any contractor or consultant that
employs) any individual or entity debarred by the FDA (or subject to a similar
sanction of EMEA), or, to the best of its knowledge without further duty of
inquiry, any individual who or entity which is the subject of an FDA debarment
investigation or proceeding (or similar proceeding of EMEA), in the conduct of
the preclinical or clinical studies of Development Compounds and its activities
under the Development Program;
10.3.7 EXEL shall perform its activities under the Development Program
in compliance with good laboratory and clinical practices and cGMP, in each case
as applicable under the laws and regulations of the country where such
activities are conducted;
10.3.8 none of the EXEL Entities will initiate any legal suits,
claims, actions, proceedings or demands under any EXEL Technology based upon GSK
using any Existing Targets or Collaboration Targets solely for the further
development of Licensed Products; and
10.3.9 EXEL shall use all reasonable efforts to ensure that [ * ].
10.4 REPRESENTATION AND WARRANTY OF GSK. GSK represents and warrants
to EXEL, as of the Effective Date, that GSK [ * ].
10.5 COVENANTS OF GSK. GSK covenants and agrees, from and after the
Effective Date and during the Term, that:
10.5.1 GSK shall provide access to Confidential Information of EXEL
only to GSK's employees, consultants and independent contractors who, in each
case, need such access (including without limitation access to EXEL Know-How on
any database that is owned or controlled by GSK or its Affiliates which access
shall in all cases be password-protected or otherwise similarly restricted) to
perform services or development activities under this Agreement, and who, prior
to such access, have executed appropriate confidentiality and invention
assignment agreements to protect the Confidential Information of EXEL and to
retain or obtain ownership of all GSK Technology;
10.5.2 it shall not employ (or, to the best of its knowledge without
further duty of inquiry, shall not use any contractor or consultant that
employs) any individual or entity debarred by the FDA (or subject to a similar
sanction of EMEA), or, to the best of its knowledge without further duty of
inquiry, any individual who or entity which is the subject of an FDA debarment
investigation or proceeding (or similar proceeding of EMEA), in the conduct of
the preclinical or clinical studies of Development Compounds and its development
activities; and
10.5.3 GSK shall perform its development activities in compliance with
good laboratory and clinical practices and cGMP, in each case as applicable
under the laws and regulations of the country where such activities are
conducted.
10.6 DISCLAIMER. Except as otherwise expressly set forth in this Agreement,
neither Party makes any representation or extends any warranty of any kind
either express or implied, including, but not limited to, any warranty that any
Patents are valid or enforceable or that their exercise does not infringe any
patent rights of Third Parties. A holding of invalidity or unenforceability of
any Patent, from which no further appeal is or can be taken, shall not affect
any obligation already accrued hereunder, but shall only eliminate royalties
otherwise due under such Patent from the date such holding becomes final in
accordance with this Agreement.
ARTICLE 11
INDEMNIFICATION; INSURANCE
11.1 INDEMNIFICATION BY GSK. GSK shall indemnify, defend and hold
harmless EXEL, and its Affiliates, and their respective directors, officers,
employees and agents, from and against any and all liabilities, damages, losses,
costs and expenses including, but not limited to, the reasonable fees of
attorneys and other professionals (collectively "LOSSES"), arising out of or
resulting from any and all Third Party suits, claims actions, proceedings or
demands based upon:
11.1.1 negligence, recklessness or wrongful intentional acts or
omissions of GSK or its Affiliates and their respective directors, officers,
employees and agents, in connection with GSK's performance of its obligations
under this Agreement; except, in each case, to the comparative extent such claim
arose out of or resulted from the negligence, recklessness or wrongful
intentional acts or omissions of EXEL or its Affiliates, and their respective
directors, officers, employees and agents (including their Sublicensees and
subcontractors);
11.1.2 any breach of any representation or warranty made by GSK under
Article 10; or
11.1.3 the research, development, manufacture, use, handling, storage,
sale or other disposition of chemical agents or Licensed Products by GSK, its
Affiliates, agents or Sublicensees.
11.2 INDEMNIFICATION BY EXEL. EXEL shall indemnify, defend and hold
harmless GSK and its Affiliates, and their respective directors, officers,
employees and agents, from and against any and all Losses, arising out of or
resulting from any and all Third Party suits, claims, actions, proceedings or
demands based upon:
11.2.1 negligence, recklessness or wrongful intentional acts or
omissions of EXEL or its Affiliates and their respective directors, officers,
employees and agents, in connection with EXEL's performance of its obligations
under this Agreement; except, in each case, to the comparative extent such claim
arose out of or resulted from the negligence, recklessness or wrongful
intentional acts or omissions of GSK or its Affiliates, and their respective
directors, officers, employees and agents (including their Sublicensees and
subcontractors);
11.2.2 any breach of any representation, warranty or covenant made by
EXEL under Article 10; or
11.2.3 the development, manufacture, use, handling, storage, sale or
other disposition of chemical agents or Development Compounds (including,
without limitation, all Development Candidates, Refused Candidates and Returned
Licensed Products) by EXEL, its Affiliates, agents or Sublicensees.
11.3 PROCEDURE. In the event that any person (an "INDEMNITEE")
entitled to indemnification under Section 11.1 or Section 11.2 is seeking such
indemnification, such Indemnitee shall: (i) inform, in writing, the indemnifying
Party of the claim as soon as reasonably practicable after such Indemnitee
receives notice of such claim; (ii) permit the indemnifying Party to assume
direction and control of the defense of the claim (including the sole right to
settle it at the sole discretion of the indemnifying Party; provided that such
settlement does not impose any obligation on, or otherwise adversely affect, the
Indemnitee or other Party); (iii) cooperate as requested (at the expense of the
indemnifying Party) in the defense of the claim; and (iv) undertake all
reasonable steps to mitigate any loss, damage or expense with respect to the
claim(s).
11.4 COMPLETE INDEMNIFICATION. All costs and expenses incurred by an
Indemnitee in connection with enforcement of Sections 11.1 and 11.2 shall also
be reimbursed by the indemnifying Party.
11.5 INSURANCE.
11.5.1 EXEL's Insurance Obligations. EXEL shall maintain, at its cost,
adequate insurance against liability and other risks associated with its
activities contemplated by this Agreement, including but not limited to its
clinical trials and its indemnification obligations herein, in such amounts and
on such terms as are customary in the biotechnology industry for the activities
to be conducted by it under this Agreement and shall name GSK as an additional
insured as its interest may appear in such insurance policies. At a minimum,
EXEL shall maintain, at its cost, a general liability insurance policy providing
coverage of at least [ * ]. EXEL shall furnish to GSK evidence of such
insurance, upon request
11.5.2 GSK's Insurance Obligations. GSK shall maintain, at its cost,
adequate insurance against liability and other risks associated with its
activities and obligations under this Agreement in such amounts and on such
terms as are customary in the pharmaceutical industry for the activities to be
conducted by it under this Agreement. Alternatively, GSK shall have the right to
satisfy its obligations under this Section 11.5.2 through a program of
self-insurance. GSK shall furnish to EXEL evidence of such insurance, upon
request.
ARTICLE 12
TERM AND TERMINATION
12.1 TERM; EXPIRATION. This Agreement shall become effective as of the
Effective Date and, unless earlier terminated pursuant to the other provisions
of this Article 12, shall expire as follows:
12.1.1 on a Product-by-Product, and country-by-country, basis until
the expiration of all payment obligations under this Agreement with respect to
such Product in such country; and
12.1.2 in its entirety upon the expiration of all payment obligations
under this Agreement with respect to the last Product in all countries in the
Territory pursuant to Section 12.1.1. The period from the Effective Date to the
expiration of the entire Agreement pursuant to this Section 12.1.2 shall be the
"TERM."
12.2 TERMINATION FOR CAUSE; OTHER BREACHES.
12.2.1 Material Breach. Either Party (the "NON-BREACHING PARTY") may,
without prejudice to any other remedies available to it at law or in equity,
terminate this Agreement in its entirety in the event the other Party (the
"BREACHING PARTY") shall have committed a Material Breach and such Material
Breach shall have continued and/or remained uncured for [ * ] after written
notice thereof was provided to the Breaching Party by the Non-breaching Party.
Any such termination shall become effective at the end of such [ * ] period,
unless the Breaching Party has cured any such Material Breach prior to the
expiration of such [ * ]. The right of either Party to terminate this Agreement
as provided in this Section 12.2.1 shall not be affected in any way by such
Party's waiver or failure to take action with respect to any previous default. A
"MATERIAL BREACH" shall mean: (A) with respect to GSK, that [ * ]; or (B) with
respect to EXEL, that [ * ].
12.2.2 Other Breach. For any breach other than a Material Breach (an "OTHER
BREACH"), the Non-breaching Party shall have all rights and remedies available
to it at law or in equity, as may be appropriate and, in accordance with Section
14.2, to protect the interest of the Non-breaching Party with respect to such
Other Breach, provided that the right of the Non-breaching Party to proceed with
its rights and remedies hereunder shall: (A) if such Other Breach relates to any
matter other than non-payment of any amounts due hereunder, not be effective for
[ * ] after written notice thereof was provided to the Breaching Party by the
Non-breaching Party; or (B) if such Other Breach resulted from the Breaching
Party's failure to pay any amounts due hereunder, not be effective for [ * ]
after written notice thereof was provided to the Breaching Party by the
Non-breaching Party. Upon the Breaching Party's receipt of such notice and until
the earlier of the Breaching Party's cure of such Other Breach or the resolution
of such Other Breach pursuant to Section 14.2, [ * ].
12.3 GSK UNILATERAL TERMINATION RIGHTS.
12.3.1 For Failure of Performance Requirements. GSK shall have the
right, for a period of [ * ] commencing [ * ], to terminate this Agreement in
its entirety upon written notice to EXEL in the event EXEL has failed to meet
its minimum performance requirement set forth in [ * ]. In such event, GSK's
obligation to make the Research and Development Payment [ * ] shall be tolled
until [ * ]. For the avoidance of doubt, any decision by GSK not to terminate
this Agreement pursuant to this Section 12.3.1, shall not be deemed to be
acceptance of any Development Compound as a Development Candidate.
12.3.2 Discretionary. GSK shall have the right to terminate this
Agreement in its entirety for any reason or no reason at all, at its sole
discretion, upon [ * ] prior written notice to EXEL; provided that such notice
may not be given until [ * ].
12.3.3 Licensed Product by Licensed Product. GSK may terminate, for
any reason or no reason at all, in its sole discretion, this Agreement as to any
particular Licensed Product, on a country-by-country basis, upon [ * ] prior
written notice to EXEL.
12.4 TERMINATION FOR INSOLVENCY.
12.4.1 Insolvency. Either Party may terminate this Agreement, if, at
any time, the other Party shall file in any court or agency pursuant to any
statute or regulation of any state or country, a petition in bankruptcy or
insolvency or for reorganization or for an arrangement or for the appointment of
a receiver or trustee of the Party or of substantially all of its assets, or if
the other Party proposes a written agreement of composition or extension of
substantially all of its debts, or if the other Party shall be served with an
involuntary petition against it, filed in any insolvency proceeding, and such
petition shall not be dismissed within [ * ] after the filing thereof, or if the
other Party shall propose or be a party to any dissolution or liquidation, or if
the other Party shall make an assignment of substantially all of its assets for
the benefit of creditors.
12.4.2 Bankruptcy Code Section 365(n). All rights and licenses granted
under or pursuant to any section of this Agreement are and shall otherwise be
deemed to be for purposes of Section 365(n) of Title 11, United States Code (the
"BANKRUPTCY CODE") licenses of rights to "intellectual property" as defined in
Section 101(56) of the Bankruptcy Code. The Parties shall retain and may fully
exercise all of their respective rights and elections under the Bankruptcy Code.
Upon the bankruptcy of any Party, the non-bankrupt Party shall further be
entitled to a complete duplicate of, or complete access to, any such
intellectual property, and such, if not already in its possession, shall be
promptly delivered to the non-bankrupt Party, unless the bankrupt Party elects
to continue, and continues, to perform all of its obligations under this
Agreement.
12.5 EFFECT OF TERMINATION UPON CERTAIN PAYMENT TERMS. Notwithstanding
anything herein to the contrary, GSK shall not be obligated to pay any payment
otherwise payable under Section 6.2.2 as a result of the occurrence of a
milestone event if the milestone occurs after the last day of the cure period
described in Section 12.2.1 for the breach event which remained uncured and gave
rise to a right of termination by GSK pursuant to Section 12.2.1. Similarly, in
the event that GSK terminates this Agreement with respect to a particular
Licensed Product in a particular country or countries in the Territory in
accordance with Section 12.3.3, GSK shall not be obligated to pay any milestone
payment under Section 6.2.2 as the result of the occurrence of a milestone event
with respect to such terminated Licensed Product if the milestone event occurs
in any terminated country more than [ * ] after notice of such termination is
properly given by GSK pursuant to Section 12.3.3.
12.6 EFFECT OF TERMINATION.
12.6.1 Upon Expiration of the Term.
(a) Following the expiration of the Term with respect to a
Licensed Product in a country pursuant to Section 12.1.1, subject to the terms
and conditions of this Agreement, GSK shall have a non-exclusive, fully-paid,
right and license, with the right to grant sublicenses, under the EXEL
Technology licensed hereunder solely to continue to make, have made, use, sell,
offer for sale and import the Licensed Product in such country, for so long as
it continues to do so. Following the expiration of the Term with respect to any
Returned Licensed Product or EXEL Product in a country pursuant to Section
12.1.1, subject to the terms and conditions of this Agreement, EXEL shall have a
non-exclusive, fully-paid, right and license, with the right to grant
sublicenses, under the GSK Technology licensed hereunder solely to continue to
make, have made, use, sell, offer for sale and import the applicable Returned
Licensed Product or EXEL Product, as the case may be, in such country, for so
long as it continues to do so.
(b) Following expiration of the Term in its entirety pursuant to
Section 12.1.2, subject to the terms and conditions of this Agreement, GSK shall
have a non-exclusive, fully-paid, right and license, with the right to grant
sublicenses, under the EXEL Technology licensed hereunder solely to continue to
make, have made, use, sell, offer for sale and import all Licensed Products in
the Territory, for so long as it continues to do so. Following the expiration of
the Term in its entirety pursuant to Section 12.1.2, subject to the terms and
conditions of this Agreement, EXEL shall have a non-exclusive, fully-paid, right
and license, with the right to grant sublicenses, under GSK Technology licensed
hereunder solely to continue to make, have made, use, sell, offer for sale and
import the applicable Returned Licensed Product, or EXEL Product, as the case
may be, for so long as it continues to do so.
12.6.2 Upon Unilateral Termination by GSK.
(a) For Failure of Performance Requirements. [ * ]
(b) Discretionary. [ * ]
(c) Licensed Product by Licensed Product. In the event of a
termination of this Agreement by GSK pursuant to Section 12.3.3 with respect to
a given Licensed Product in a given country(ies): (1) such Licensed Product in
such country(ies) shall be deemed to be a Returned Licensed Product under
Section 5.5; and (2) thereafter, the terms and conditions of this Agreement
shall apply with respect to such Returned Licensed Product in such country(ies).
12.6.3 Upon Termination by GSK for Cause. In the event of a
termination of this Agreement in its entirety by GSK: (A) pursuant to Section
12.2.1 upon Material Breach by EXEL; or (B) pursuant to Section 12.4 upon the
insolvency of EXEL:
[ * ]
12.6.4 Upon Termination by EXEL for Cause. In the event of a
termination of this Agreement in its entirety: (A) by EXEL pursuant to Section
12.2.1 upon Material Breach by GSK; or (B) pursuant to Section 12.4 upon the
insolvency of GSK:
[ * ]
12.6.5 Accrued Rights; Surviving Obligations.
(a) Termination, relinquishment or expiration of this Agreement
for any reason shall be without prejudice to any rights that shall have accrued
to the benefit of any Party prior to such termination, relinquishment or
expiration including, without limitation, the payment obligations under Article
6 hereof and any and all damages arising from any breach hereunder. Such
termination, relinquishment or expiration shall not relieve any Party from
obligations which are expressly indicated to survive termination of this
Agreement.
(b) In addition to the provisions of this Agreement which
expressly survive as set forth in this Article 12 or elsewhere in this
Agreement, all of the Parties' rights and obligations under, and/or the
provisions contained in, Sections 6.5, 6.6, 6.7, 12.5, 12.6, 13.1.2, and
Articles 1, 8 (except for Sections 8.1.2 and 8.1.5), 9, 11 and 14 shall survive
the expiration, termination or relinquishment of this Agreement.
ARTICLE 13
CHANGE OF CONTROL
13.1 MAJOR PHARMACEUTICAL COMPANY. In the event of a Change of Control of
EXEL (each such event, a "SUBJECT TRANSACTION"), and the surviving Person (each,
a "SUBSEQUENTLY AFFILIATED COMPANY") is a Major Pharmaceutical Company:
13.1.1 Automatic Effect. In all cases hereunder, regardless of whether
GSK elects to terminate this Agreement or not, in accordance with Section [ * ]
13.1.2, effective [ * ] the consummation of such Subject Transaction:
[ * ]
13.1.2 GSK Right to Terminate. In the event that such Subject
Transaction occurs prior to the expiration of the Development Term, or the
Extension Period, if any, then GSK shall have the right, upon written notice to
EXEL within [ * ] of the consummation of such Change of Control, to terminate
this Agreement. In the event GSK so elects to terminate this Agreement:
[ * ]
13.1.3 Effect of No Termination. In the event GSK elects not to
terminate this Agreement as set forth in Section 13.1.2, then:
[ * ]
13.1.4 Major Pharmaceutical Company Defined. As used in Section 13.1
and 13.2, a "MAJOR PHARMACEUTICAL COMPANY" shall mean any Person that, together
with its Affiliates, has [ * ].
13.2 BIOTECHNOLOGY COMPANY. If the Subsequently Affiliated Company is a
Biotechnology Company:
13.2.1 Automatic Effect. Effective [ * ] the consummation of such
Subject Transaction:
13.2.2 Biotechnology Company Defined. As used herein, a "BIOTECHNOLOGY
COMPANY" shall mean any Person other than a Major Pharmaceutical Company.
ARTICLE 14
MISCELLANEOUS
14.1 PUBLICITY. Neither Party shall originate any written publicity, news
release or other announcement or statement relating to the announcement or terms
of this Agreement (collectively, a "WRITTEN DISCLOSURE"), without the prompt
prior review and written approval of the other Party, which approval shall not
be unreasonably withheld or delayed. Notwithstanding the foregoing, either Party
may make any public Written Disclosure it believes in good faith based upon the
advice of counsel is required by applicable law, rule or regulation or any
listing or trading agreement concerning its or its Affiliates' publicly traded
securities; provided, however, that such Written Disclosure shall minimize to
the extent possible the financial information disclosed, and that prior to
making such Written Disclosure, the disclosing Party shall provide to the other
Party a copy of the materials proposed to be disclosed and provide the receiving
Party with an opportunity to promptly review the Written Disclosure and provide
comments within [ * ] of the proposed drafts of the Written Disclosure.
Notwithstanding the foregoing, the Parties shall agree upon a press release to
announce the execution of this Agreement, together with a corresponding question
& answer outline for use in responding to inquiries about the Agreement;
thereafter, GSK and EXEL may each disclose to Third Parties the information
contained in such press release and question & answer outline without the need
for further approval by the other.
14.2 DISPUTE RESOLUTION. Prior to the commencement of any litigation under
this Agreement, the Executive Officer of the Party considering commencement of
such litigation shall notify the Executive Officer of the other Party that such
litigation is being contemplated. For at least [ * ] following the delivery of
such notice, the Parties' Executive Officers shall use good faith efforts to
make themselves available to discuss the dispute and attempt to resolve the
matter. If the dispute is not resolved within such [ * ], the Parties agree to
submit the dispute for non-binding mediation (with the understanding that the
role of the mediator shall not be to render a decision but to assist the Parties
in reaching a mutually acceptable resolution), which shall occur within a period
of not more than [ * ]. If the dispute is not resolved within such [ * ], either
Party may commence litigation with respect to the subject matter of the dispute
and with respect to any other claims it may have and thereafter neither Party
hereto shall have any further obligation under this Section 14.2.
14.3 GOVERNING LAW; JURISDICTION. This Agreement and any dispute arising
from the performance or breach hereof shall be governed by and construed and
enforced in accordance with the laws of the State of New York, U.S.A., without
reference to conflicts of laws principles.
14.4 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (i) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THAT FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND ANY RELATED
INSTRUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 14.4.
14.5 ASSIGNMENT. This Agreement shall not be assignable by either Party to
any Third Party hereto without the written consent of the other Party hereto.
Notwithstanding the foregoing, either Party may assign this Agreement, without
the written consent of the other Party, to an Affiliate or to an entity that
acquires all or substantially all of the business or assets of such Party to
which this Agreement pertains (whether by merger, reorganization, acquisition,
sale or otherwise), and agrees in writing to be bound by the terms and
conditions of this Agreement. No assignment and transfer shall be valid and
effective unless and until the assignee/transferee shall agree in writing to be
bound by the provisions of this Agreement. The terms and conditions of this
Agreement shall be binding on and inure to the benefit of the permitted
successors and assigns of the Parties.
14.6 REGULATORY REVIEW.
14.6.1 Tolling of Payment Obligations. If the exercise by GSK of any
Development Election under Section 4.3 requires the making of filings under the
Hart-Scott-Rodino Antitrust Improvements Act (the "HSR ACT"), or under any
similar premerger notification provision in the European Union or any other
jurisdiction, then all rights and obligations related to the exercise of such
Development Election shall be tolled until the applicable waiting period has
expired or been terminated or until approval or clearance from the reviewing
authority has been received, and each Party agrees to diligently make any such
filings and respond to any request for information to expedite review of such
transaction.
14.6.2 Resolution of Regulatory Authority Opposition. If the antitrust
enforcement authorities in the U.S. make a second request under the HSR Act, or
any antitrust enforcement authority in another jurisdiction commences an
investigation into the exercise by GSK of a Development Election, then the
Parties shall, in good faith, cooperate with each other and take reasonable
actions to attempt to: (A) resolve all enforcement agency concerns about the
transaction under investigation; and (B) diligently oppose any enforcement
agency opposition to such transaction. In the event the enforcement agency files
a formal action to oppose the transaction, the Parties shall confer in good
faith to determine the appropriate strategy for resolving the enforcement agency
opposition, including without limitation, and where appropriate, the
renegotiation of their obligations under this Agreement with respect to that
Development Election, with the objective of placing each Party, to the maximum
extent possible, in the same economic position that each Party would have
occupied if GSK had been permitted to exercise such Development Election.
Notwithstanding the foregoing, nothing in this Section 14.6 shall require either
party to divest any assets.
14.7 PERFORMANCE WARRANTY. Each Party hereby acknowledges and agrees that
it shall be responsible for, and irrevocably, absolutely and unconditionally
guarantees, the full and timely performance as and when due under, and
observance of all the covenants, terms, conditions and agreements set forth in
this Agreement by its Affiliate(s) and Sublicensees.
14.8 FORCE MAJEURE. No Party shall be held liable or responsible to the
other Party nor be deemed to be in default under, or in breach of any provision
of, this Agreement for failure or delay in fulfilling or performing any
obligation of this Agreement when such failure or delay is due to force majeure,
and without the fault or negligence of the Party so failing or delaying. For
purposes of this Agreement, force majeure is defined as causes beyond the
control of the Party, including, without limitation, acts of God; acts,
regulations, or laws of any government; war; civil commotion; destruction of
production facilities or materials by fire, flood, earthquake, explosion or
storm; labor disturbances; epidemic; and failure of public utilities or common
carriers. In the event of force majeure EXEL or GSK, as the case may be, shall
immediately notify the other Parties of such inability and of the period for
which such inability is expected to continue. The Party giving such notice shall
thereupon be excused from such of its obligations under this Agreement as it is
thereby disabled from performing for so long as such Party is so disabled, up to
a maximum of ninety (90) days, after which time the Party not affected by the
force majeure, may terminate this Agreement. To the extent possible, each Party
shall use reasonable efforts to minimize the duration of any force majeure.
14.9 NOTICES. Any notice or request required or permitted to be given under
or in connection with this Agreement shall be deemed to have been sufficiently
given if in writing and personally delivered or sent by certified mail (return
receipt requested), facsimile transmission (receipt verified), or overnight
express courier service (signature required), prepaid, to the Party for which
such notice is intended, at the address set forth for such Party below:
If to EXEL,
addressed to: Exelixis, Inc.
170 Harbor Way
PO Box 511
South San Francisco, CA 94083
Attention: Chief Executive Officer
Telephone: [ * ]
Telecopy: [ * ]
with a copy to: Cooley Godward llp
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Barbara Kosacz, Esq.
Telephone: [ * ]
Telecopy: [ * ]
If to GSK,
addressed to: SmithKline Beecham Corporation,
doing business as GlaxoSmithKline
2301 Renaissance Blvd. (Bldg. #510)
King of Prussia, PA 19406
Attention: Vice President, Alliance and
Joint Venture Management
Telephone: [ * ]
Telecopy: [ * ]
with a copy to: GlaxoSmithKline
Corporate Legal Department
One Franklin Plaza
200 N. 16th Street / FP 2360
Philadelphia, PA 19103
Attention: Senior Vice President and
Associate
General Counsel-R&D Legal Operations
Telephone: [ * ]
Telecopy: [ * ]
or to such other address for such Party as it shall have specified by like
notice to the other Parties, provided that notices of a change of address shall
be effective only upon receipt thereof. If delivered personally or by facsimile
transmission, the date of delivery shall be deemed to be the date on which such
notice or request was given. If sent by overnight express courier service, the
date of delivery shall be deemed to be the next business day after such notice
or request was deposited with such service. If sent by certified mail, the date
of delivery shall be deemed to be the third business day after such notice or
request was deposited with the U.S. Postal Service.
14.10 EXPORT CLAUSE. Each Party acknowledges that the laws and regulations
of the United States restrict the export and re-export of certain commodities
and technical data of United States origin. Each Party agrees that it will not
export or re-export any restricted commodities or any restricted technical data
of the other Party in any form without any necessary United States and foreign
government licenses.
14.11 WAIVER. Neither Party may waive or release any of its rights or
interests in this Agreement except in writing. The failure of either Party to
assert a right hereunder or to insist upon compliance with any term or condition
of this Agreement shall not constitute a waiver of that right or excuse a
similar subsequent failure to perform any such term or condition. No waiver by
either Party of any condition or term in any one or more instances shall be
construed as a continuing waiver of such condition or term or of another
condition or term.
14.12 SEVERABILITY. If any provision hereof should be held invalid, illegal
or unenforceable in any jurisdiction, the Parties shall negotiate in good faith
a valid, legal and enforceable substitute provision that most nearly reflects
the original intent of the Parties and all other provisions hereof shall remain
in full force and effect in such jurisdiction and shall be liberally construed
in order to carry out the intentions of the Parties hereto as nearly as may be
possible. Such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction.
14.13 ENTIRE AGREEMENT. This Agreement, including the schedules and
exhibits hereto, together with the Stock Purchase Agreement and the Loan
Agreement, set forth all the covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto and
supersede and terminate all prior agreements and understanding between the
Parties. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties other than as set forth herein and therein. No subsequent
alteration, amendment, change or addition to this Agreement shall be binding
upon the Parties hereto unless reduced to writing and signed by the respective
authorized officers of the Parties.
14.14 INDEPENDENT CONTRACTORS. Nothing herein shall be construed to create
any relationship of employer and employee, agent and principal, partnership or
joint venture between the Parties. Each Party is an independent contractor.
Neither Party shall assume, either directly or indirectly, any liability of or
for the other Party. Neither Party shall have the authority to bind or obligate
the other Party and neither Party shall represent that it has such authority.
14.15 HEADINGS. Headings used herein are for convenience only and shall not
in any way affect the construction of or be taken into consideration in
interpreting this Agreement.
14.16 USE OF NAME. Except as otherwise provided herein, no Party shall have
any right, express or implied, to use in any manner the name or other
designation of the other Parties or any other trade name, trademark or logos of
the other Parties for any purpose in connection with the performance of this
Agreement.
14.17 BOOKS AND RECORDS. Any books and records to be maintained under this
Agreement by a Party or its Affiliates or Sublicensees shall be maintained in
accordance with U.S. generally accepted accounting principles, consistently
applied, except that the same need not be audited.
14.18 FURTHER ACTIONS. Each Party shall execute, acknowledge and deliver
such further instruments, and do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
14.19 PARTIES IN INTEREST. All of the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties hereto and their respective permitted successors and assigns.
14.20 CONSTRUCTION OF AGREEMENT. The terms and provisions of this Agreement
represent the results of negotiations between the Parties and their
representatives, each of which has been represented by counsel of its own
choosing, and neither of which has acted under duress or compulsion, whether
legal, economic or otherwise. Accordingly, the terms and provisions of this
Agreement shall be interpreted and construed in accordance with their usual and
customary meanings, and each of the Parties hereto hereby waives the application
in connection with the interpretation and construction of this Agreement of any
rule of law to the effect that ambiguous or conflicting terms or provisions
contained in this Agreement shall be interpreted or construed against the Party
whose attorney prepared the executed draft or any earlier draft of this
Agreement.
14.21 SUPREMACY. In the event of any express conflict or inconsistency
between this Agreement and the DOP or any Development Candidate Plan, the terms
of this Agreement shall control.
14.22 COUNTERPARTS. This Agreement may be signed in counterparts, each and
every one of which shall be deemed an original, notwithstanding variations in
format or file designation which may result from the electronic transmission,
storage and printing of copies of this Agreement from separate computers or
printers. Facsimile signatures shall be treated as original signatures.
* - * - * - *
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as of the Effective Date.
EXELIXIS, INC. SMITHKLINE BEECHAM CORPORATION
By: /s/ George Scangos By: /s/ T. Yamada
-------------------- ----------------
Name: George Scangos Name: Tachi Yamada
------------------ --------------
Title: President & CEO Title: Director
----------------- --------
Date: 10/28/2002 Date: 10/28/2002
---------- ----------
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
- ------
SCHEDULE 1.62
EXEL PATENTS
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEUDLE 1.65
EXISTING BIOTHERAPEUTIC TARGET
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEDULE 1.66
EXISTING COMPOUNDS
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEDULE 1.67
EXISTING TARGETS
# TARGET
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEDULE 1.68
EXISTING THIRD PARTY COLLABORATIONS
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEDULE 3.2.3(f)
MINIMUM INFORMATION REQUIREMENTS
FOR EXEL'S PERIODIC REPORTS
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEDULE 4.2
CRITERIA TO BE
INCLUDED IN PRODUCT REPORTS
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEDULE 5.1.1
SAMPLE GSK INTERNAL
DEVELOPMENT ACTIVITIES
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
SCHEDULE 6.3.4
EXAMPLES OF APPLICATION OF
MILESTONE AND ROYALTY PAYMENTS
[ * ]
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.