1
Exhibit 10.1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
CNS RESEARCH, COLLABORATION AND LICENSE AGREEMENT
By and Between
American Home Products Corporation
and
Millennium Pharmaceuticals, Inc.
2
TABLE OF CONTENTS
PAGE
----
Introduction ...................................................... 1
Article I - Definitions ........................................... 1
Section 1.1 Affiliate ................................. 2
Section 1.2 AHP Discovery Program ..................... 2
Section 1.3 AHP Program Know-How ...................... 2
Section 1.4 AHP Program Patent Right(s) ............... 2
Section 1.5 AHP Research Program ...................... 2
Section 1.6 Antisense Drug ............................ 3
Section 1.7 Autoimmune Diseases ....................... 3
Section 1.8 Business Day .............................. 3
Section 1.9 Candidate Gene ............................ 3
Section 1.10 Change of Control ......................... 3
Section 1.11 Change in Strategic Direction ............. 4
Section 1.12 CNS ....................................... 4
Section 1.13 CNS Disorders Field ....................... 4
Section 1.14 CNS JMT ................................... 4
Section 1.15 Confidential Information .................. 4
Section 1.16 Contract Year ............................. 5
Section 1.17 Core Field ................................ 5
Section 1.18 Diagnostic Product ........................ 5
Section 1.19 Discovery Project Team Status ............. 5
Section 1.20 EMEA ...................................... 5
Section 1.21 Expansion Field ........................... 5
Section 1.22 Extension Benchmark(s) .................... 5
Section 1.23 External Collaboration(s) ................. 6
Section 1.24 FDA ....................................... 6
Section 1.25 First Commercial Sale ..................... 6
Section 1.26 FTE ....................................... 6
Section 1.27 Gene Therapy Drug ......................... 6
Section 1.28 IND ....................................... 6
Section 1.29 Joint Program Know-How .................... 6
Section 1.30 Joint Program Patent Right(s) ............. 6
Section 1.31 Know-How .................................. 6
Section 1.32 Major Market Country ...................... 7
Section 1.33 Management Committee(s) ................... 7
Section 1.34 Marketing Exclusivity ..................... 7
Section 1.35 Millennium Program Know-How ............... 7
Section 1.36 Millennium Program Patent Right(s) ........ 7
Section 1.37 Millennium Research Program ............... 7
Section 1.38 Modified Drug ............................. 8
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Section 1.39 NDA ....................................... 8
Section 1.40 Net Sales ................................. 8
Section 1.41 Non-Vaccine Product ....................... 10
Section 1.42 Party ..................................... 10
Section 1.43 Patent Right(s) ........................... 10
Section 1.44 PLA ....................................... 10
Section 1.45 Product ................................... 10
Section 1.46 Product Patent Blocking Event ............. 10
Section 1.47 Program Know-How .......................... 10
Section 1.48 Program Patent Right(s) ................... 10
Section 1.49 Protein ................................... 11
Section 1.50 Requisite Majority ........................ 11
Section 1.51 Research Program .......................... 11
Section 1.52 Research Program Plan ..................... 11
Section 1.53 Reserve Field ............................. 11
Section 1.54 Royalty-bearing Modified Drug ............. 11
Section 1.55 Royalty-bearing Product ................... 11
Section 1.56 Royalty-bearing Small Molecule Product .... 11
Section 1.57 Royalty-bearing Vaccine Product ........... 11
Section 1.58 Small Molecule ............................ 12
Section 1.59 Small Molecule Product .................... 12
Section 1.60 Steering Committee ........................ 12
Section 1.61 Sublicensee ............................... 12
Section 1.62 Technology Patent Blocking Event .......... 12
Section 1.63 Territory ................................. 12
Section 1.64 TPT Access and License Agreement .......... 12
Section 1.65 Vaccine ................................... 12
Section 1.66 Vaccine Development Status ................ 12
Section 1.67 Vaccine Management Team ................... 13
Section 1.68 Vaccine Product ........................... 13
Section 1.69 Valid Claims .............................. 13
Section 1.70 Validated Target .......................... 13
Section 1.71 Validated Vaccine Candidate ............... 13
Section 1.72 Additional Definitions .................... 14
Article II - Research and Collaboration Program ................... 15
Section 2.1 Exclusive Arrangement ..................... 15
Section 2.2 Research Program Plan ..................... 15
Section 2.3 Research Program Management ............... 15
Section 2.4 Mechanism For Expansion of
Collaboration ........................... 20
Section 2.5 Term of the Millennium Research Program;
Extension Benchmarks .................... 29
Section 2.6 Termination of the Millennium Research
Program ................................. 30
Section 2.7 Diligence ................................. 31
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Article III - Disclosure of Know-How .............................. 32
Section 3.1 Millennium Know-How ....................... 32
Section 3.2 Biological Materials ...................... 32
Section 3.3 AHP Program Know-How ...................... 33
Article IV - Confidentiality ...................................... 33
Section 4.1 Confidential Information and Know-How ..... 33
Section 4.2 Employee Obligations ...................... 33
Section 4.3 Publications .............................. 34
Section 4.4 Term ...................................... 34
Article V - Grant of Rights ....................................... 35
Section 5.1 Technology Licenses ....................... 35
Section 5.2 Product Licenses .......................... 36
Section 5.3 AHP's Right of First Refusal with
Respect to Non-Vaccine Products ......... 36
Section 5.4 AHP's Rights With Respect to Other
Millennium Projects ..................... 38
Section 5.5 Diagnostic Products ....................... 38
Section 5.6 AHP's Rights to Potential Candidate
Genes ................................... 39
Section 5.7 AHP's Right of First Refusal with
Respect to Autoimmune Diseases .......... 40
Section 5.8 Millennium's Retained Rights .............. 41
Article VI - Patent Ownership, Protection and
Related Matters ......................... 41
Section 6.1 Ownership ................................. 41
Section 6.2 Patentable Inventions ..................... 42
Section 6.3 Review and Comment ........................ 43
Section 6.4 Notice of Decision ........................ 43
Section 6.5 Patent Term Extensions .................... 43
Section 6.6 Costs and Expenses ........................ 43
Section 6.7 Third Party Infringement .................. 44
Section 6.8 Notice of Certification ................... 45
Section 6.9 Claimed Infringement; Claimed
Invalidity .............................. 45
Article VII - AHP Due Diligence ................................... 46
Section 7.1 Research Program Inventory ................ 46
Section 7.2 Candidate Genes ........................... 47
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3 Section 7.3 Disease Indications ....................... 48
Section 7.4 Commercialization ......................... 49
Section 7.5 Determination of Due Diligence ............ 50
Article VIII - Payments ........................................... 51
Section 8.1 License Fees .............................. 51
Section 8.2 Equity Purchases On Achievement of
Extension Benchmarks .................... 52
Section 8.3 Research Funding .......................... 53
Section 8.4 Milestones ................................ 55
Section 8.5 Royalty Payments to Millennium on
Products ................................ 57
Article IX - Accounting ........................................... 60
Section 9.1 Royalty Reports ........................... 60
Section 9.2 Delivery of Royalty ....................... 60
Section 9.3 Records and Audits ........................ 60
Section 9.4 Currency of Payments ...................... 60
Section 9.5 Tax Withholding ........................... 60
Article X - Term and Termination .................................. 61
Section 10.1 Term ...................................... 61
Section 10.2 Termination For Material Breach ........... 61
Section 10.3 Termination Upon Change of Control ........ 61
Section 10.4. Residual Rights ........................... 62
Article XI - Product Liability Indemnification .................... 63
Article XII - Governing Law ....................................... 64
Article XIII - Assignment ......................................... 64
Article XIV - Affiliate Agreements ................................ 64
Article XV - Amendments ........................................... 65
Article XVI - Notices ............................................. 65
Article XVII - Force Majeure ...................................... 66
Article XVIII - Representations and Warranties .................... 66
Section 18.1 Representation of Authority ............... 66
Section 18.2 Outstanding Agreements .................... 67
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Section 18.3 Consents .................................. 67
Section 18.4 No Conflict ............................... 67
Section 18.5 Section 365(n) of the Bankruptcy Code ..... 67
Section 18.6 Knowledge of Pending or Threatened
Litigation .............................. 68
Section 18.7 Employee Obligations ...................... 68
Section 18.8 Full Disclosure ........................... 68
Section 18.9 Compliance with Applicable Laws
and Regulations ......................... 68
Section 18.10. Export Controls ........................... 68
Section 18.11. No Warranties ............................. 68
Article XIX - Public Announcements ................................ 69
Article XX - Additional Agreements ................................ 69
Section 20.1 Independent Contractors ................... 69
Section 20.2 Consents Not Unreasonably Withheld ........ 69
Section 20.3 No Strict Construction .................... 70
Section 20.4 Headings .................................. 70
Section 20.5 Severance of Clauses ...................... 70
Section 20.6 No Waiver ................................. 70
Section 20.7 Counterparts .............................. 70
Appendix A CNS Disorders Field
Appendix A.1. Core Field
Appendix A.2. Reserve Field
Appendix A.3. Expansion Field
Appendix B Research Program Plan
Appendix C External Collaborations
Appendix D Equity-Related Terms
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CNS RESEARCH, COLLABORATION AND LICENSE AGREEMENT
This Agreement is effective as of the 1st day of August, 1996 (the
"Effective Date"), by and between Millennium Pharmaceuticals, Inc., a
corporation organized and existing under the laws of the State of Delaware and
having its principal office at 640 Memorial Drive, Cambridge, Massachusetts
02139-4815 ("Millennium") and American Home Products Corporation, a corporation
organized and existing under the laws of the State of Delaware, acting through
its Wyeth-Ayerst Research Division, having its principal place of business at
555 East Lancaster Pike, St. Davids, Pennsylvania 19087 ("AHP").
Introduction
1. Millennium is in the business of conducting research in the field of
human genomics, an objective of which is to discover potential biological
targets and assays for use in drug discovery.
2. AHP is in the business of discovering, developing and marketing
pharmaceuticals.
3. AHP is interested in funding and collaborating with Millennium in
discovering and developing targets and assays to identify and develop small
molecule drugs and vaccines for the treatment and prevention of disorders of the
central nervous system, and in obtaining, under specified circumstances, rights
to other types of therapeutic molecules useful in the treatment of disorders of
the central nervous system that are identified through the use of certain
technology developed before or during the collaboration.
4. Millennium is willing to provide know-how, materials and licenses to
AHP to allow AHP to use certain of Millennium's technology in the field of
central nervous system disorders.
NOW, THEREFORE, Millennium and AHP agree as follows:
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Article I
Definitions
When used in this Agreement, each of the following terms shall have the
meanings set forth in this Article I:
Section 1.1. "Affiliate" means any corporation, company partnership,
joint venture and/or firm which controls, is controlled by or is under common
control with a Party. For purposes of this Section 1.1, "control" shall mean,
(a) in the case of corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the stock or shares having the right to vote for the
election of directors, and (b) in the case of non-corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the equity interest with
the power to direct the management and policies of such non-corporate entities,
provided, however that the foregoing shall not include any entity with respect
to which there is a contractual restriction on the right to elect a majority of
the directors.
Section 1.2. "AHP Discovery Program" means the drug discovery and
development activities performed by AHP, commencing during or after the term of
the Millennium Research Program, to discover and develop Products for use in the
Core Field based on the results arising from the Millennium Research Program
and/or the AHP Research Program.
Section 1.3. "AHP Program Know-How" means Know-How, exclusive of Joint
Program Know-How, (a) which is reasonably necessary in order to discover
Candidate Genes, Validated Targets and Validated Vaccine Candidates and to
discover, develop, make, use, sell or seek approval to market Products for
medical indications in the Core Field, (b) which AHP develops, uses or acquires
during the term of the AHP Research Program or the AHP Discovery Program (but,
with respect to the AHP Discovery Program, only during the term of the AHP
Research Program) and (c) to which AHP has the right to grant licenses or
sublicenses without violating the terms of any agreement or other arrangement
with a third party.
Section 1.4. "AHP Program Patent Right(s)" means a Patent Right (a) that
relates to AHP Program Know-How, and (b) that is obtained by AHP during the term
of the AHP Research Program or the AHP Discovery Program, and (c) to which AHP
has the right to grant licenses or sublicenses without violating the terms of
any agreement or other arrangement with a third party.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 1.5. "AHP Research Program" means the research program, to be
undertaken by AHP coincident with the term of the Millennium Research Program,
to discover Products for use in the Core Field based on Millennium Program
Know-How and Millennium Program Patent Rights, provided that the use of MTPT (as
such term is defined in the TPT Access and License Agreement) by AHP in the Core
Field during the term of the AHP Research Program shall be deemed to be a part
of the AHP Research Program.
Section 1.6. "Antisense Drug" means any drug or drug candidate which
consists of nucleic acid or a functional analog, derivative or homologue thereof
and which is complementary to a segment of DNA of a target gene or such target
gene's cognate RNA and which, upon delivery by any means, alters the
transcription, processing, elaboration, RNA expression, or protein production of
or by such target gene, provided that Antisense Drug shall not include any
nucleic acid or a functional analog, derivative or homologue thereof which, upon
delivery by any means, must be expressed in order to alter the transcription,
processing, elaboration, RNA expression, or protein production of or by a target
gene.
Section 1.7. "Autoimmune Diseases" means diseases that result from the
loss of immune tolerance to self-antigens.
Section 1.8. "Business Day" means a day on which the trading of
securities takes place on the Nasdaq Stock Market (or such other stock exchange
on which Millennium securities may be traded).
Section 1.9. (a) "Candidate Gene" means ***************** the
***************************** of which has been determined, that has been
implicated in a disease or condition in the Core Field (i) by Millennium prior
to the Effective Date or (ii) by Millennium or jointly by the Parties in the
course of the Research Program. The Candidate Gene must be implicated in a
disease or condition in the Core Field either (A) *****************; or (B)
***************** (in which instance the Candidate Gene shall mean the
********************* to the ***************************** ***************; or
(C) by any other method (in which case to qualify as a Candidate Gene, the gene
shall be appropriately ********************************************************.
The discoveries upon which such implication is based shall be *********** and
**********************. The determination that an
************************************* of a Candidate Gene shall be made in good
faith by the CNS JMT.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(b) Notwithstanding the foregoing, an ******** **** that
has been implicated in a disease or condition in the Core Field by a third party
before or during the term of the Research Program may be designated a Candidate
Gene (which shall be non-milestone bearing) if it is determined in good faith by
the CNS JMT that the study of such gene in the course of the Research Program
may lead to the development of a proprietary and potentially patentable
Validated Target or Validated Vaccine Candidate.
Section 1.10. "Change of Control" means (a) a merger or consolidation of
Millennium which results in the voting securities of Millennium outstanding
immediately prior thereto ceasing to represent at least fifty percent (50%) of
the combined voting power of the surviving entity immediately after such merger
or consolidation; (b) the sale of all or substantially all of the assets of
Millennium or (c) any one person, as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than Millennium, any trustee or other fiduciary holding securities under
an employee benefit plan of Millennium, or any corporation owned directly or
indirectly by the stockholders of Millennium, in substantially the same
proportion as their ownership of stock of Millennium), together with any of such
person's "affiliates" or "associates", as such terms are used in the Exchange
Act, becoming the beneficial owner of fifty percent (50%) or more of the
combined voting power of the outstanding securities of Millennium.
Notwithstanding the foregoing, a "Change of Control" shall also be deemed to
exist in the event of (A) either (i) a merger or consolidation of Millennium and
a multinational pharmaceutical company which results in the voting securities of
Millennium outstanding immediately prior thereto ceasing to represent at least
thirty-five percent (35%) of the combined voting power of the surviving entity
immediately after such merger or consolidation, or (ii) a multinational
pharmaceutical company, together with its affiliates or associates, becoming the
beneficial owner of thirty-five percent (35%) or more of the combined voting
power of the outstanding securities of Millennium, and (B) such multinational
pharmaceutical company, whether through contractual rights or otherwise,
controls the business of Millennium.
Section 1.11. "Change in Strategic Direction" means that Millennium
ceases to maintain significant capabilities in gene identification, and their
validation as targets for pharmaceutical drug discovery and development.
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Section 1.12. "CNS" means the human central nervous system.
Section 1.13. "CNS Disorders Field" means the Core Field, the Reserve
Field and the Expansion Field.
Section 1.14. "CNS JMT" means the joint management team, as described in
Section 2.3(a)(i).
Section 1.15. "Confidential Information" means all materials, Know-How
or other information, including, without limitation, proprietary information and
materials (whether or not patentable or copyrightable) regarding a Party's
technology, products, business information or objectives, which is designated as
confidential in writing by the disclosing Party, whether by letter or by the use
of an appropriate stamp or legend, prior to or at the time any such material,
trade secret or other information is disclosed by the disclosing Party to the
other Party. Notwithstanding the foregoing, materials, Know-How or other
information which is orally, electronically or visually disclosed by a Party, or
is disclosed in writing without an appropriate letter, stamp or legend, shall
constitute Confidential Information if the disclosing Party, within thirty (30)
days after such disclosure, delivers to the other Party a written document or
documents describing the materials, Know-How or other information and
referencing the place and date of such oral, visual, electronic or written
disclosure and the names of the persons to whom such disclosure was made,
provided, however, that any technical information disclosed at a meeting of the
CNS JMT or the Steering Committee shall constitute Confidential Information
unless otherwise specified.
Section 1.16. "Contract Year" means the twelve (12) month period
beginning on the Effective Date and each succeeding twelve (12) month period
thereafter.
Section 1.17. "Core Field" means the disorders set forth in Appendix
A.1, as may be modified from time to time pursuant to the provisions of Section
2.4.
Section 1.18. "Diagnostic Product" means any product in the form of a
device, compound, kit or service that embodies Millennium Program Know-How for
use in (a) the diagnosis, prognosis, prediction or disease management of a
disorder, or (b) the genetic disaggregation of patient populations based on
their response to a pharmaceutical product (i.e., pharmacogenetics).
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Section 1.19. "Discovery Project Team Status" means a discovery research
program that AHP has formally designated as having achieved "Discovery Project
Team Status", or such successor comparable internal criteria as AHP may
implement in the future (i.e. AHP has committed to the program the relevant
resources to enable identification and development of an IND-track compound),
provided that AHP shall apply the criteria for assessing Discovery Project Team
Status (or such successor criteria) in a manner consistent with the criteria
applied to other discovery research programs, including discovery research
programs generated through internal research programs of AHP or its Affiliates.
Section 1.20. "EMEA" means the European Agency for the Evaluation of
Medicinal Products.
Section 1.21. "Expansion Field" means the disorders set forth in
Appendix A.3, as may be modified from time to time pursuant to the provisions of
Section 2.4.
Section 1.22. "Extension Benchmark(s)" means the Year Three Extension
Benchmark and/or the Year Five Extension Benchmark (as such terms are described
in Section 2.5).
Section 1.23. "External Collaboration(s)" means the external
collaboration(s) with third parties undertaken as part of the Research Program,
set forth in Appendix C, as modified from time to time to reflect the then
current Research Program Plan.
Section 1.24. "FDA" means the United States Food and Drug
Administration.
Section 1.25. "First Commercial Sale" means, for each Product, the first
commercial sale in a country as part of a nationwide introduction by AHP, its
Affiliates and/or its Sublicensees other than for clinical trial purposes or
compassionate use.
Section 1.26. "FTE" means a full time equivalent scientific person year
(consisting of a total of one thousand eight hundred eighty (1,880) hours per
year of scientific work on or directly related to the Millennium Research
Program), carried out by a Millennium employee, having at least a Bachelor's
Degree. Scientific work on or directly related to the Millennium Research
Program to be performed by Millennium employees can include, but is not limited
to, experimental laboratory work, recording and writing of results, reviewing
literature and references, holding
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scientific discussions, managing and leading scientific staff and carrying out
project management duties.
Section 1.27. "Gene Therapy Drug" means any drug or drug candidate which
consists of nucleic acid or a functional analog, derivative or homologue thereof
and which, upon delivery by any means, provides a gene product encoded therein
which is expressed.
Section 1.28. "IND" means an Investigational New Drug Application filed
with the FDA.
Section 1.29. "Joint Program Know-How" means Know-How owned or
controlled jointly by Millennium and AHP which is reasonably necessary in order
to discover Candidate Genes, Validated Targets and Validated Vaccine Candidates
and to discover, develop, make, use, sell or seek approval to market Products
for medical indications in the Core Field, and which is developed jointly by the
Parties in the course of the Research Program.
Section 1.30. "Joint Program Patent Right(s)" means a Patent Right that
relates to Joint Program Know-How.
Section 1.31. "Know-How" means any information, data and materials,
including without limitation organic compounds and biological materials such as
cell lines, RNA, DNA, DNA fragments, organisms, Proteins, polypeptides, plasmids
and vectors and software, user's manuals and guides, that are owned or
controlled by Millennium and/or by AHP, or a license to the same to which
Millennium and/or AHP has the right to grant a sublicense.
Section 1.32. "Major Market Country" means the United States, the United
Kingdom, Germany, France, Italy or Japan.
Section 1.33. "Management Committee(s)" means the CNS JMT, the Vaccine
Management Team and/or the Steering Committee.
Section 1.34. "Marketing Exclusivity" means the marketing exclusivity
afforded approved drug products pursuant to (i) the exclusivity provisions of
the United States "Drug Price Competition and Patent Term Restoration Act of
1984", or its equivalent in a country other than the United States, or (ii) the
exclusivity provisions of the United States "Orphan Drug Act", or its equivalent
in a country other than the United States.
Section 1.35. "Millennium Program Know-How" means Know-How, exclusive of
Joint Program Know-How, owned or controlled by Millennium which is reasonably
necessary in order to discover
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Candidate Genes, Validated Targets and Validated Vaccine Candidates and to
discover, develop, make, use, sell or seek approval to market Products for
medical indications in the Core Field, and which (a) is in Millennium's
possession on the Effective Date, or (b) Millennium develops in the course of
the Millennium Research Program, or (c) Millennium acquires in the course of the
Millennium Research Program and to which Millennium has the right to grant
licenses or sublicenses without violating the terms of any agreement or other
arrangement with a third party, provided, however, that Millennium Program
Know-How shall not include (i) generalized methods for conducting genomic
research and characterizing the function of genes, including without limitation
Millennium **** Technology and other MTPT (as those terms are defined in the TPT
Access and License Agreement), and (ii) phenotypic and genotypic information and
biological samples relating to human materials acquired or otherwise accessed by
Millennium and used in genetic analysis in the Millennium Research Program
(other than such information and samples which AHP participates in obtaining,
including information and samples specifically obtained from the AHP patient
base).
Section 1.36. "Millennium Program Patent Right(s)" means a Patent Right
that relates to Millennium Program Know-How.
Section 1.37. "Millennium Research Program" means the research program,
the term of which extends during the time that research is funded by AHP
pursuant to Section 8.3 of this Agreement, and which is to be undertaken by
Millennium using genomic technology to discover and characterize Candidate
Genes, Validated Targets and Validated Vaccine Candidates with potential utility
for the identification and development of Products in the Core Field, to be
described in greater detail in Appendix B.
Section 1.38. "Modified Drug" means a compound, the identification of
which is based upon another compound that (a) other than through the use of
****************************** ********************************, prior to or
outside of the Millennium Research Program, is known **************************
*************************** to its development as a therapeutic product in the
CNS Disorders Field, and (b) is modified by *********************************
********************************************************************** to
improve its therapeutic properties (but not merely to characterize the compound)
for use in the CNS Disorders Field.
Section 1.39. "NDA" means a New Drug Application filed with the FDA.
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Section 1.40. "Net Sales" means with respect to a Royalty-bearing
Product, the gross amount invoiced by AHP, its Affiliates and/or its
Sublicensees, on sales or other dispositions of the Royalty-bearing Product to
unrelated third parties, less the following items, provided that such items are
included in the price charged and do not exceed reasonable and customary amounts
in the country in which such sale occurred:
(a) Trade, cash and quantity discounts actually allowed and
taken directly with respect to such sales;
(b) Tariffs, duties, excises, sales taxes or other taxes imposed
upon and paid directly with respect to such sales (excluding national,
state or local taxes based on income);
(c) Amounts repaid or credited by reason of rejections, defects,
recalls or returns or because of rebates or retroactive price
reductions; and
(d) One percent (1%) of Net Sales as an allowance to cover all
other items, such as freight, transportation and insurance.
Such amounts shall be determined from the books and records of AHP, its
Affiliates and/or its Sublicensees, maintained in accordance with generally
accepted accounting principles, consistently applied.
If a Royalty-bearing Product is sold in bulk (as distinguished from
packaged pharmaceutical form) for resale in packaged or finished form in a Major
Market Country, Net Sales shall be calculated by determining the quantity of
Royalty-bearing Product in packaged pharmaceutical form that would reasonably be
produced from the bulk quantity of Royalty-bearing Product so sold, and by
multiplying such quantity by the average price for such Royalty-bearing Product
in packaged pharmaceutical form during the applicable royalty reporting period.
If a Royalty-bearing Product is sold, or otherwise commercially disposed of for
value (including, without limitation, disposition in connection with the
delivery of other products or services), in a transaction that is not an
outright arm's length sale to an independent third party, then the gross amount
invoiced in such transaction shall be deemed to be the gross amount that would
have been paid had there been such a sale at the average sale price of such
Royalty-bearing Product during the applicable royalty reporting period. Net
Sales shall not include any consideration received by AHP, its
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Affiliates or its Sublicensees in respect of the sale, use or other disposition
of a Royalty-bearing Product in a country as part of a clinical trial prior to
the receipt of all regulatory approvals required to commence full commercial
sales of such Royalty-bearing Product in such country, except sales under
"treatment INDs", "named patient sales", "compassionate use sales", or their
equivalents pursuant to which AHP, its Affiliates or Sublicensees is/are
entitled, under applicable regulatory policies, to recover costs incurred in
providing such products to the patients.
In the event the Royalty-bearing Product is sold as part of a
Combination Product (as defined below), the Net Sales from the Combination
Product, for the purposes of determining royalty payments, shall be determined
by multiplying the Net Sales of the Combination Product (as defined in the
standard Net Sales definition), during the applicable royalty reporting period,
by the fraction, A/A+B where A is the average sale price of the Royalty-bearing
Product when sold separately in finished form and B is the average sale price of
the other product(s) included in the Combination Product when sold separately in
finished form, in each case during the applicable royalty reporting period or,
if sales of both the Royalty-bearing Product and the other product(s) did not
occur in such period, then in the most recent royalty reporting period in which
sales of both occurred. In the event that such average sale price cannot be
determined for both the Royalty-bearing Product and all other product(s)
included in the Combination Product, Net Sales for the purposes of determining
royalty payments shall be calculated by multiplying the Net Sales of the
Combination Product by the fraction C/C+D where C is the fair market value of
the Royalty-bearing Product and D is the fair market value of all other
pharmaceutical product(s) included in the Combination Product. In such event,
AHP shall in good faith make a determination of the respective fair market
values of the Royalty-bearing Product and all other pharmaceutical products
included in the Combination Product, and shall notify Millennium of such
determination and provide Millennium with data to support such determination.
Millennium shall have the right to review such determination and supporting
data, and to notify AHP if it disagrees with such determination. If Millennium
does not agree with such determination and the Parties are unable to agree in
good faith as to such respective fair market values, then such matter shall be
referred to the Executive Officers (as defined in Section 2.3(b)(iii) pursuant
to Section 2.3(b)(iv)).
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As used above, the term "Combination Product" means any pharmaceutical
product which comprises the Royalty-bearing Product and other active compounds
and/or ingredients.
Section 1.41. "Non-Vaccine Product" means a product that (a) is not a
Vaccine and (b) comprises (i) a Protein encoded by a Candidate Gene, (ii)
another Protein, the identification or development of which is based upon the
identification of a Candidate Gene, or (iii) a Gene Therapy Drug, the
identification or development of which is based upon the identification of a
Candidate Gene.
Section 1.42. "Party" means AHP or Millennium; "Parties" means AHP and
Millennium.
Section 1.43. "Patent Right(s)" means a patent or patent application and
all divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions and foreign counterparts thereof that is owned or controlled by
Millennium and/or by AHP, or a license to the same to which Millennium and/or
AHP has the right to grant a sublicense, and may be referred to herein as
Millennium Patent Rights, AHP Patent Rights or Joint Patent Rights, as
appropriate.
Section 1.44. "PLA" means a Product License Application filed with the
FDA.
Section 1.45. "Product" means (a) a Small Molecule Product, (b) a
Vaccine Product, or (c) a Modified Drug.
Section 1.46. "Product Patent Blocking Event" means, in any Major Market
Country, the reasonable determination by either Party, based upon advice of
patent counsel, that a license is required under a third party patent in order
to develop, make, have made, use, import, offer for sale or sell a Product, and
it has been definitively determined by AHP that such license is not reasonably
obtainable.
Section 1.47. "Program Know-How" means Millennium Program Know-How and
AHP Program Know-How, collectively, whether or not developed or acquired solely
or jointly by Millennium and/or AHP. Program Know-How includes but is not
limited to Candidate Genes, Validated Targets and Validated Vaccine Candidates.
Section 1.48. "Program Patent Right(s)" means Millennium Program Patent
Rights, AHP Program Patent Rights and Joint Program Patent Rights, collectively.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 1.49. "Protein" means any of a class of compounds composed of a
variety of amino acids joined by peptide linkages, including aggregates,
hybrids, fragments and analogs thereof, as well as naturally
post-translationally modified variants thereof (i.e., glycosylated proteins) and
chemically modified versions thereof (e.g., pegylated or liposomally
encapsulated proteins).
Section 1.50. "Requisite Majority" means, with respect to any Management
Committee, a majority of the members of such Management Committee, provided that
such majority must include at least ******* representatives of each Party.
Section 1.51. "Research Program" means, collectively, the Millennium
Research Program and the AHP Research Program.
Section 1.52. "Research Program Plan" means the research plan, as more
fully described in Section 2.2, that sets forth the schedule and goals of the
Research Program, to be attached to this Agreement as Appendix B pursuant to the
provisions of Sections 2.2 and 2.3.
Section 1.53. "Reserve Field" means the disorders set forth in Appendix
A.2, as may be modified from time to time pursuant to the provisions of Section
2.4.
Section 1.54. "Royalty-bearing Modified Drug" means a Modified Drug that
has achieved Discovery Project Team Status, as determined in good faith by the
CNS JMT (or the successor thereto referred to in Section 2.3(a)(i)(C)), at any
time during the period commencing on the Effective Date and ending fifteen (15)
years following the termination of the Research Program.
Section 1.55. "Royalty-bearing Product" means (a) a Royalty-bearing
Small Molecule Product, (b) a Royalty-bearing Vaccine Product, or (c) a
Royalty-bearing Modified Drug.
Section 1.56. "Royalty-bearing Small Molecule Product" means a Small
Molecule Product that has achieved Discovery Project Team Status, as determined
in good faith by the CNS JMT (or the successor thereto referred to in Section
2.3(a)(i)(C)), at any time during the period commencing on the Effective Date
and ending **************************** the termination of the Research Program.
Section 1.57. "Royalty-bearing Vaccine Product" means a Vaccine Product
that has achieved Vaccine Development Status, as determined in good faith by the
Vaccine Management Team (or the
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successor thereto referred to in Section 2.3(a)(ii)), at any time during the
period commencing on the Effective Date and ending ****************************
the termination of the Research Program.
Section 1.58. "Small Molecule" means a prophylactic or therapeutic agent
the active ingredient of which is a compound of molecular weight equal to or
less than *************, including without limitation peptido mimetics.
Section 1.59. "Small Molecule Product" means any product that is a Small
Molecule that (a) is identified on the basis of its interaction with a Validated
Target in a small molecule screening assay, or (b) is designed or developed
using medicinal chemistry, SAR or combinatorial chemistry techniques to interact
with a Validated Target. For purposes of clarity, any product that comprises a
Protein wherein such product also qualifies as a Small Molecule Product shall be
deemed to be a Small Molecule Product.
Section 1.60. "Steering Committee" means the steering committee, as
described in Section 2.3(a)(iii).
Section 1.61. "Sublicensee" means any third party other than an
Affiliate granted the right, subject to the terms and conditions of Article V,
to make, import, use, offer to sell or sell a Product(s), but not including a
third party that is not granted the right to make such Product(s) but merely
purchases such Product(s) in finished form (ready pack or in bulk) for resale.
Section 1.62. "Technology Patent Blocking Event" means the reasonable
determination by either Party, based upon advice of patent counsel, that a
license is required under a third party United States patent in order to conduct
a substantial portion of the research contemplated hereunder, and it has been
definitively determined that such license is not reasonably obtainable.
Section 1.63. "Territory" means all countries of the world.
Section 1.64. "TPT Access and License Agreement" means the Transcription
Profiling Technology Access and License Agreement between the Parties hereto
that became effective on even date herewith.
Section 1.65. "Vaccine" means a prophylactic or therapeutic agent that
acts by inducing a humoral and/or cell-mediated immune response directed against
an antigen.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 1.66. "Vaccine Development Status" means a discovery research
program that AHP has formally designated as having achieved "Vaccine Development
Status", or such successor comparable internal criteria as AHP may implement in
the future (i.e. AHP has committed to the program the relevant resources to
enable development of a Vaccine), provided that AHP shall apply the criteria for
assessing Vaccine Development Status (or such successor criteria) in a manner
consistent with the criteria applied to other discovery research programs,
including discovery research programs generated through internal research
programs of AHP or its Affiliates.
Section 1.67. "Vaccine Management Team" means the joint management team,
as described in Section 2.3(a)(ii).
Section 1.68. "Vaccine Product" means a Vaccine that derives from a
Validated Vaccine Candidate.
Section 1.69. "Valid Claims" means any claim(s) pending in a patent
application or in an unexpired patent which has not been held unenforceable,
unpatentable or invalid by a decision of a court or other governmental agency of
competent jurisdiction, unappealable or unappealed within the time allowed for
appeal, and which has not been admitted to be invalid or unenforceable through
reissue, reexamination, disclaimer or otherwise.
Section 1.70. "Validated Target" means a biological molecule that (a) is
(i) ****************, (ii) *********************** ************* or (iii)
***********************, the identification of which is based upon the
identification of a **************, and (b) is suitable (i) for use as a target
in a ****************************** (in the case of *************** *********,
is suitable for ********************************* **************, and/or (ii)
for use as the ****************** *********************************. The
determination that such biological molecule has achieved the status of a
Validated Target shall be made in good faith by the CNS JMT on the basis of the
criteria set forth above, as well as the availability of experimental results,
generated by Millennium prior to the Effective Date or by Millennium or jointly
by the Parties in the course of the Research Program, that (A) are proprietary
and potentially patentable, and (B) support a conclusion that intervention of a
small molecule drug in the activity of the target should produce
*******************************************************************************
********************************************************************************
*******************************************************************
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********************************************************************************
*****************************************************.
Section 1.71. "Validated Vaccine Candidate" means a biological molecule
that (a) is (i) ********************** **************, (ii) ***************, the
identification or development of which is based upon the identification of a
**************, or (iii) *******************, the identification or development
of which is based upon the identification of a **************, and (b) is
suitable for development as a Vaccine. The determination that such biological
molecule has achieved the status of a Validated Vaccine Candidate shall be made
in good faith by Vaccine Management Team on the basis of objective criteria to
be set forth in the Research Program Plan with respect to such biological
molecule.
Section 1.72. Additional Definitions. Each of the following definitions
is found in the body of this Agreement as indicated:
"Abandoned Market" 7.4(d)
"AD Notification" 5.7(a)(1)
"Affiliate Agreements" XIV
"AHP Indemnified Parties" XI(b)
"AHP Indemnifying Parties" XI(a)
"Annual Adjustment" 8.3(a)
"Automimmune Disease Program" 5.7(a)
"Bioinformatics Agreement" 2.6(c)
"Breaching Party" 10.2
"Collaboration Summary" 5.3
"Common Stock" 8.2
"Designated Candidate Gene" 5.6
"Equity Election Notice" 8.2
"Exchange Act" Appendix D
"Executive Officers" 2.3(b)(iii)
"Expansion Field Project" 2.4(c)(i)
"Expansion Field Project Proposal" 2.4(c)(i)
"Fair Market Value" 8.2
"First Contract Quarter" 8.3(b)
"Invalidity Claim" 6.9(b)
"Measurement Period" 8.2
"Milestone Payment" 2.4(a)(iv)
"Millennium Indemnified Parties" XI(a)
"Millennium Indemnifying Parties" XI(b)
"Millennium Reserve Field Project" 2.4(b)(iv)
"Mutual Consent Fund" 2.4(a)(ii)
"New Core Field Project" 2.4(a)(i)
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"Non-Breaching Party" 10.2
"Non-Program New Core Field Project" 2.4(a)(iv)
"Other Millennium Projects" 5.4
"Prior Fair Market Value" 8.2
"Product Related Information" 7.4(d)
"Protein Therapeutics" 5.3
"Reimbursement Cost" 2.4(a)(iv)
"Rejected Expansion Field Project" 2.4(c)(ii)
"Rejected Millennium Reserve Field Project" 2.4(b)(iv)
"Reserve Field Project" 2.4(b)(i)
"Reserve Field Project Proposal" 2.4(b)(i)
"Safe Harbor Provisions" 7.5
"Section 6.2 Invention" 6.2(a)
"Section 7.3 Due Diligence Period" 7.3(a)
"Solicitation" Appendix D
"Subsequent Contract Quarter" 8.3(b)
"Termination Notice" 2.5(a)
"Total Potential Voting Power" Appendix D
Article II
Research and Collaboration Program
Section 2.1. Exclusive Arrangement. During the term of the Millennium
Research Program, Millennium agrees that it shall not participate, either alone
or in collaboration with a commercial third party, in any research program in
which genetics and genomics technologies are used to discover genes responsible
for susceptibility to disorders in the CNS Disorders Field (which genes may, in
turn, be used to identify and develop Small Molecules and Vaccines for use in
the CNS Disorders Field), except pursuant to the terms of this Agreement.
Section 2.2. Research Program Plan. The Parties shall engage in the
Research Program to expedite the discovery and development of Candidate Genes,
Validated Targets, Validated Vaccine Candidates and Products in substantial
accordance with the research schedule and goals to be set forth in a Research
Program Plan, to be attached to this Agreement as Appendix B within one hundred
twenty (120) days after the Effective Date (which Research Program Plan is
subject to review and modification by the CNS JMT, the Steering Committee and
final resolution by the Executive Officers, if required, pursuant to Section
2.3(b)). While the Parties recognize that the Millennium Research Program will
be conducted by a greater number of individuals than the number of FTEs to be
devoted thereto, the Parties also acknowledge that full-time staffing is
important to the Millennium Research
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Program. Accordingly, Millennium agrees to provide full-time staffing for the
Millennium Research Program (including a full-time program manager) to the
extent determined to be appropriate by the CNS JMT. Millennium and AHP also
agree to provide staffing for the Millennium Research Program and AHP Research
Program, respectively, that is appropriate, in terms of quantity and
qualifications, to the tasks to be performed from time to time thereunder.
Section 2.3. Research Program Management.
(a) Management Committees.
(i) The CNS JMT.
(A) As soon as practicable after the Effective
Date, the Parties shall establish a CNS JMT,
consisting of four (4) representatives designated
by AHP and four (4) representatives designated by
Millennium. Each Party shall make its initial
designation of its representatives not later than
thirty (30) days after the Effective Date. Each
Party shall cause its representatives to attend the
meetings of the CNS JMT. If a representative of a
Party is unable to attend a meeting, such Party may
designate an alternate to attend such meeting in
place of the missing representative. In addition,
each Party may at its discretion invite non-voting
employees and representatives of its Affiliates, as
well as consultants or scientific advisors
reasonably acceptable to the other Party, to attend
the meetings of the CNS JMT (provided that such
attendees are bound by obligations of
confidentiality). The CNS JMT shall meet no less
frequently than once each calendar quarter, and
shall meet at such other times as deemed
appropriate by the CNS JMT. Each Party may change
any one or more of its representatives to the CNS
JMT at any time upon notice to the other Party. The
location of the CNS JMT meetings shall alternate
between Cambridge, Massachusetts and a Wyeth-Ayerst
Research facility in Pennsylvania, New York or New
Jersey, or as otherwise mutually agreed.
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(B) Within ninety (90) days after the Effective
Date, the CNS JMT shall (1) agree on the specific
research projects to be initially pursued under the
Research Program, and (2) prepare the Research
Program Plan and related budget for the first
Contract Year, for submission to the Steering
Committee. The CNS JMT shall oversee the disclosure
and transfer of relevant Know-How to facilitate the
research and development of Candidate Genes,
Validated Targets and Products, as well as the
disclosure and transfer of Millennium Program
Know-How to AHP pursuant to Article III, and the
disclosure of AHP Program Know-How to Millennium
pursuant to Article III. In addition, the CNS JMT
shall be responsible for determining whether or not
a biological molecule has achieved Candidate Gene
or Validated Target status. At each meeting of the
CNS JMT, the progress of the Research Program shall
be reviewed and, if necessary, the short-term goals
and/or resource allocation for the Millennium
Research Program shall be modified. No later than
the end of the first month of the second Contract
Year and each subsequent Contract Year during the
Millennium Research Program, the CNS JMT shall meet
to discuss in detail the progress of the Research
Program and agree upon the short-term goals for the
Millennium Research Program and to prepare
amendments to the Research Program Plan as
necessary, to be approved by the Steering
Committee. In the event that a significant
development occurs which may affect the short- or
long-term goals or resource allocations of the
Research Program or methods of achieving said
goals, the CNS JMT shall reconvene, reassess and
change such methods, resource allocations and/or
goals of the Millennium Research Program, subject
to the approval of the Steering Committee. In the
event that a Party submits to the CNS JMT a
proposal to expand the Core Field pursuant to
Section 2.4, the CNS JMT shall reconvene to
evaluate such proposal and, if necessary, to
prepare its recommendation to the Steering
Committee with respect to such proposal.
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(C) The CNS JMT shall function during the term of
the Research Program and thereafter until the
provision of the Final Inventory (as that term is
defined in Section 7.1) and modifications thereto.
Thereafter, the Parties shall implement a mutually
agreeable committee or other body to make
determinations as to whether Modified Drugs or
Small Molecule Products have achieved Discovery
Project Team Status.
(ii) Vaccine Management Team. In the event that the
Research Program Plan, as modified from time to time,
provides for research and development activities relating
to a Vaccine, the Parties shall, as soon thereafter as is
practicable, establish the Vaccine Management Team,
consisting of an equal number of representatives of each
Party. The administration and duties of the Vaccine
Management Team shall be identical to the administration
and duties of the CNS JMT, but as applied solely to
Vaccines. The Vaccine Management Team shall function during
the term of the Research Program and thereafter until the
provision of the Final Inventory and modifications thereto.
Thereafter, the Parties shall implement a mutually
agreeable committee or other body to make determinations as
to whether Vaccine Products have achieved Vaccine
Development Status.
(iii) The Steering Committee.
(A) As soon as practicable after the Effective
Date, the Parties shall establish a Steering
Committee, consisting of three (3) representatives
designated by AHP and three (3) representatives
designated by Millennium. Each Party shall make its
initial designation of its representatives not
later than thirty (30) days after the Effective
Date. Each Party shall cause its representatives to
attend the meetings of the Steering Committee. If a
representative of a Party is unable to attend a
meeting, such Party may designate an alternate to
attend such meeting in place of the missing
representative. In addition, each Party may at its
discretion invite non-voting employees (including
without limitation members of the CNS JMT or
Vaccine Management Team) and representatives of its
Affiliates, as well as consultants or scientific
advisors reasonably acceptable to the other Party,
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to attend the meetings of the Steering Committee
(provided that such attendees are bound by
obligations of confidentiality). The Steering
Committee shall meet no less frequently than once
each calendar year, and shall meet at such other
times as may be requested by either Party. Each
Party may change any one or more of its
representatives to the Steering Committee at any
time upon notice to the other Party. The location
of the Steering Committee meetings shall alternate
between Cambridge, Massachusetts and a Wyeth-Ayerst
Research facility in Pennsylvania, New York or New
Jersey, or as otherwise mutually agreed.
(B) Within thirty (30) days after the receipt by
the Steering Committee of the Research Program Plan
and budget for the first Contract Year, the
Steering Committee shall review, modify, if
necessary, and approve the Research Program Plan
and related budget prepared and submitted to it by
the CNS JMT. At each meeting of the Steering
Committee, the progress of the Research Program
shall be reviewed and any modifications by the CNS
JMT of the short-term goals and/or resource
allocation for the Millennium Research Program
shall be evaluated. Other responsibilities of the
Steering Committee shall include, without
limitation, (1) the review of any determination by
the CNS JMT that a biological molecule has achieved
Candidate Gene, Validated Target or Validated
Vaccine Candidate status, (2) the evaluation of any
recommendation made by the CNS JMT to the Steering
Committee with respect to the expansion of the Core
Field, pursuant to Section 2.4, (3) the
determination, if necessary, of the Year Five
Extension Benchmark, pursuant to Section 2.5, (4)
changes in funding pursuant to Section 8.3, and (5)
resolution of matters for which the CNS JMT or
Vaccine Management Team is unable to reach
agreement by a Requisite Majority.
(C) The Steering Committee shall function during
the term of the Research Program and thereafter for
as long as both Parties agree. Thereafter, the
Parties shall implement a mutually agreeable
committee or other body to facilitate (i) the
resolution of issues as to which the CNS JMT is
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unable to reach agreement by a Requisite Majority,
and (ii) the continuing exchange of information
regarding the AHP Discovery Program and the
commercialization of Products.
(b) Management Committee Decisions. The Parties agree
that the objective of the Management Committees shall be to
resolve all matters unanimously. However, in the absence of
unanimity, the following rules shall apply:
(i) CNS JMT. The agreement of a Requisite Majority
of the CNS JMT shall be required to take any action.
Any member of the CNS JMT who is not present at any
meeting either in person or by designated alternate may
appoint another representative or alternate as his/her
proxy on his/her behalf on all matters coming to a
vote. The CNS JMT may conduct meetings by telephone or
video conference. If the CNS JMT is unable to reach
agreement by a Requisite Majority on any issue within
its purview, such issue shall be referred to the
Steering Committee.
(ii) Vaccine Management Team. The agreement of a
Requisite Majority of the Vaccine Management Team shall
be required to take any action. Any member of the
Vaccine Management Team who is not present at any
meeting either in person or by designated alternate may
appoint another representative or alternate as his/her
proxy on his/her behalf on all matters coming to a
vote. The Vaccine Management Team may conduct meetings
by telephone or video conference. If the Vaccine
Management Team is unable to reach agreement by a
Requisite Majority on any issue within its purview,
such issue shall be referred to the Steering Committee.
(iii) The Steering Committee. The agreement of a
Requisite Majority of the members of the Steering
Committee shall be required to take any action. Any
member of the Steering Committee who is not present at
any meeting either in person or by designated alternate
may appoint another representative or alternate as
his/her proxy on his/her behalf on all matters coming
to a vote. The Steering Committee may conduct meetings
by telephone or video conference. If the Steering
Committee is unable to reach a decision by a Requisite
Majority on any issue within its purview, including
without
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limitation unresolved issues referred to it by the CNS
JMT or Vaccine Management Team, such issue shall be
referred to the President of Wyeth-Ayerst Research
Laboratories and the Chief Executive Officer of
Millennium (the "Executive Officers") for resolution.
(iv) Decisions by the Executive Officers. The
Executive Officers shall have the authority to resolve
issues referred to them by the Steering Committee, as
well as other issues designated in this Agreement for
resolution by the Executive Officers. It is the
intention of the Parties that any issue referred to the
Executive Officers shall be resolved by negotiation in
good faith as soon as practicable but no later than
thirty (30) days after its referral. Each Executive
Officer shall have the right to engage the services of
any number of independent experts in the field in
question (the individual so engaged by each Executive
Officer to be reasonably acceptable to the other
Executive Officer in terms of independence and
expertise, and shall be engaged under obligations of
confidentiality) to assist the Executive Officer in
making a joint determination in the best interests of
the collaboration, and each Executive Officer shall be
obligated to consider in good faith the analyses and
opinions of any such independent experts engaged by
either of them in making a determination. Such
resolution, if any, of a referred issue shall be final
and binding on the Parties, and the Parties shall
instruct the members of the Steering Committee
designated by them to approve such resolution.
Section 2.4. Mechanism For Expansion of Collaboration.
(a) New Core Field Projects.
(i) Assessment by Management Committees. Commencing
with the beginning of ********* Contract Year and from
time to time thereafter during the term of the Research
Program, Millennium or AHP may submit to the CNS JMT
research plans for projects within the Core Field not
then currently in the Research Program and which may
require funding above the minimum budget specified in
the Research Program Plan (a "New Core Field Project").
Within thirty (30) days after the submission of a
research plan for a New Core Field Project, the CNS JMT
shall consider in good faith, and
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make a decision with respect to, the merits of such
project, including its scientific feasibility, its
commercial utility and its priority relative to other
projects in the Research Program at that time. In the
event that the CNS JMT decides that the New Core Field
Project has merit and can be undertaken within the
scope of the minimum budget specified in the Research
Program Plan (including through a replacement of an
existing project), the CNS JMT shall (A) incorporate
the New Core Field Project into the Research Program;
and (B) notify the Steering Committee of its decision.
In the event that the CNS JMT decides that the New Core
Field Project does not have merit, it shall so inform
the Parties and Millennium shall have the right but not
the obligation to undertake such project as a
Non-Program New Core Field Project (as that term is
defined in Section 2.4(a)(iv)). In the event that the
CNS JMT decides that the New Core Field Project has
merit but requires funding above the minimum budget
specified in the Research Program Plan, the CNS JMT
shall submit its decision to the Steering Committee for
evaluation. In the event that the CNS JMT is unable to
reach a decision with respect to the merit of a New
Core Field Project, the matter shall be referred to the
Steering Committee for resolution.
Within ********** days of receipt of (X) a
recommendation from the CNS JMT that a New Core Field
Project should be incorporated into the Research
Program with additional funding, or (Y) a request from
the CNS JMT to resolve the matter of whether a New Core
Field Project should be incorporated into the Research
Program, the Steering Committee shall consider in good
faith, and make a decision with respect to, the merits
of the project, including its scientific feasibility,
its commercial utility and its priority relative to
other projects in the Research Program at the time. In
the event that the Steering Committee decides that the
New Core Field Project has merit and can be undertaken
within the scope of the existing budget (including
through a replacement of an existing project), the
Steering Committee shall instruct the CNS JMT to
incorporate the New Core Field Project into the
Research Program. In the event that the Steering
Committee decides that the New Core Field Project does
not have merit, it shall inform the CNS JMT and
Millennium shall have the right but not the obligation
to undertake such
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project as a Non-Program New Core Field Project (as
that term is defined in Section 2.4(a)(iv)). In the
event that the Steering Committee decides that the New
Core Field Project has merit but requires funding above
the minimum budget specified in the Research Program
Plan, the Steering Committee shall (I) instruct the CNS
JMT to incorporate the New Core Field Project into the
Research Programs, and (II) approve funding, pursuant
to the provisions set forth in Section 2.4(a)(ii),
through either the use of the Mutual Consent Fund (as
that term is defined in Section 2.4(a)(ii)) or through
an increase by AHP in the budget of the Research
Program.
(ii) Additional Funding for New Core Field
Projects. In the event that the Steering Committee or,
if necessary, the Executive Officers approve(s)
additional funding to permit the incorporation of a New
Core Field Project into the Research Program, such
funding shall be guaranteed and provided from one of
two sources. The Steering Committee shall have the
right to release funds in support of a New Core Field
Project from a mutual consent fund (the "Mutual Consent
Fund") which shall operate as follows: Funds from the
Mutual Consent Fund that have been approved by the
Steering Committee for expenditure shall be provided by
Millennium, provided, however, that (A) Millennium's
expenditures funded through the Mutual Consent Fund
shall not exceed ********************************* in
any Contract Year and Millennium's total expenditures
from the Mutual Consent Fund shall not exceed *******
**************************************************
****************, (B) Millennium shall provide AHP with
a quarterly accounting of its Mutual Consent Fund
expenditures, and (C) Millennium shall submit to AHP an
annual invoice indicating Millennium's Mutual Consent
Fund expenditures during a Contract Year within thirty
(30) days after the end of such Contract Year (and a
final bill within thirty (30) days after the end of the
Research Program) for reimbursement and AHP shall
reimburse Millennium for such expenditures with
thirty-one (31) days after AHP's receipt of such
invoice. Alternatively, the Steering Committee may
decide that additional funding to permit the
incorporation of a New Core Field Project into the
Research Program shall be provided directly by AHP
through an increase in the budget of the Research
Program and not through the Mutual Consent Fund.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(iii) Consequence of Incorporation of a New Core
Field Project into the Research Program. In the event
that a New Core Field Project is incorporated into the
Research Program, all rights and obligations set forth
in this Agreement with respect to any project within
the Research Program shall apply to such New Core Field
Project.
(iv) Non-Program New Core Field Project. In the
event that (A) the CNS JMT or the Steering Committee
or, if necessary, the Executive Officers decide(s) that
a New Core Field Project does not have merit and,
accordingly, should not be incorporated into the
Research Program, (B) the Steering Committee or, if
necessary, the Executive Officers decide(s) that a New
Core Field Project should be incorporated into the
Research Program with increased funding but that such
funding shall not be provided directly by AHP and the
funds available through the use of the Mutual Consent
Fund have been exhausted, or (C) neither the Management
Committees nor the Executive Officers can reach a
decision with respect to the proposed incorporation of
a New Core Field Project into the Research Program,
then Millennium shall have the right but not the
obligation to undertake such New Core Field Project as
a non-program New Core Field Project (a "Non-Program
New Core Field Project"). Such Non-Program New Core
Field Project shall be managed and funded entirely by
Millennium, provided, however, that Millennium (X)
shall
*****************************************************
*********** with respect to such Non-Program New Core
Field Project, ***********************************, (Y)
shall provide the CNS JMT with quarterly updates of the
progress on any such Non-Program New Core Field
Project, and (Z) shall *****************************,
***************************************************, to
*********** such Non-Program New Core Field Project
**** ********************.
In the event that ************************,
pursuant to this Section 2.4(a)(iv), ************** a
Non-Program New Core Field Project *****************
*********************************** set forth in this
Agreement with respect to any project within the
**************** shall apply to such New Core Field
Project, and all Know-How and Patent Rights developed
or acquired by Millennium in the course of such
Non-Program
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
New Core Field Project ******************************
******************** shall be deemed to be **********
**************** and ********************************,
respectively. *************************** at any time
during the term of the Research Program as follows: (1)
during the first year of funding by Millennium of the
Non-Program New Core Field Project, **************
**************************************************
************ reasonably allocable (such allocation to
be consistently applied by Millennium and confirmed by
Millennium's certified public accountants) to the
relevant Non-Program New Core Field Project that
Millennium has incurred from the date on which such
project was initiated until the date on which the
option is exercised, including but not limited to
************* *********************************** and
the costs attributable to ************************* or
******** ******** which are directly attributable to
such Non-Program New Core Field Project, as determined
in a manner consistent with Section 8.3 (the
************** *****); plus
******************************************* ********
which would have been paid under Section 8.4 had the
Non-Program New Core Field Project been a part of the
Research Program from such project's inception (a
*******************); and (2) during the second and
each subsequent year of funding by Millennium of the
Non-Program New Core Field Project, by paying
Millennium *** **************************** of the
*******************; plus ************************** of
any Milestone Payment.
(b) Reserve Field Projects.
(i) Assessment by Management Committees. Commencing
with the beginning of the ******************** and from
time to time thereafter during the term of the Research
Program, Millennium or AHP may submit to the CNS JMT
research plans for projects within the Reserve Field not
then currently in the Research Program (a "Reserve Field
Project"), provided, however, that (A) research proposals
for a Reserve Field Project with respect to
************************* may be submitted to the CNS JMT
commencing with the beginning of the ********************,
(B) Millennium may not submit more than *****************
for Reserve Field Projects (a "Reserve Field Project
Proposal") in any ***************** period, and (C) the
Parties may at any time during the term of the Research
Program agree to incorporate a project within the
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Reserve Field into the Research Program and the disease that is the subject of
such project shall become a part of the **********. The Parties hereby agree
that a Reserve Field Project Proposal shall include, without limitation, a
clear, well defined, scientific rationale that may reasonably lead to the
discovery of Validated Target(s) and/or Validated Vaccine Candidate(s) of
sufficient importance in the target disease that small molecule drugs directed
against those Validated Target(s) and/or Vaccines derived from such Validated
Vaccine Candidate(s) should offer a meaningful clinical advance.
As soon as practicable but no later than thirty (30) days after the
submission of a Reserve Field Project Proposal, the CNS JMT shall consider in
good faith, and make a decision with respect to, the merits of the project that
is the subject of such proposal, including its scientific feasibility, its
commercial utility and its priority relative to other projects in the Research
Program at that time. In the event that the CNS JMT decides that the Reserve
Field Project has merit and can be undertaken within the scope of the minimum
budget specified in the Research Program Plan (including through a replacement
of an existing project), the CNS JMT shall incorporate the Reserve Field Project
into the Research Program upon approval by the Steering Committee. In the event
that the CNS JMT decides that (X) the Reserve Field Project does not have merit
or (Y) the Reserve Field Project has merit but requires funding above the
minimum budget specified in the Research Program Plan, the CNS JMT shall submit
its decision to the Steering Committee for evaluation. In the event that the CNS
JMT is unable to reach a decision with respect to the merit of a Reserve Field
Project, the matter shall be referred to the Steering Committee for resolution.
As soon as practicable but no later than *************** after receipt
of (I) a recommendation from the CNS JMT that a Reserve Field Project should not
be incorporated into the Research Program, (II) a recommendation from the CNS
JMT that a Reserve Field Project should be incorporated into the Research
Program with additional funding, or (III) a request from the CNS JMT to resolve
the matter of whether a Reserve Field Project should be incorporated into the
Research Program, the Steering Committee shall consider in good faith, and make
a decision with respect to, the merits of the project, including its scientific
feasibility, its commercial utility and its priority relative to other projects
in the
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Research Program at the time. In the event that the Steering Committee decides
that the Reserve Field Project has merit and can be undertaken within the scope
of the existing budget (including through a replacement of an existing project),
the Steering Committee shall instruct the CNS JMT to incorporate the Reserve
Field Project into the Research Program. In the event that the Steering
Committee decides that the Reserve Field Project does not have merit, it shall
so inform the CNS JMT. For any such project that was submitted to the CNS JMT by
Millennium, Millennium shall have the right but not the obligation to undertake
such project as a Rejected Millennium Reserve Field Project (as that term is
defined in Section 2.4(b)(iv)), provided, however, that if the Steering
Committee decides that the proposed Reserve Field Project lacks merit but that
nevertheless there is merit in initiating a different project that targets the
disease that is the subject of the rejected Reserve Field Project Proposal, then
the Steering Committee may instruct the CNS JMT to submit, within thirty (30)
days after the receipt of such instruction, a Reserve Field Project Proposal
describing a new project that targets such disease for evaluation by the
Steering Committee pursuant to the provisions of this Section 2.4(b)(i),
provided, further, that the Steering Committee may take this action only one (1)
time with respect to each disease in the Reserve Field. In the event that the
Steering Committee decides that the Reserve Field Project has merit but requires
funding above that specified in the minimum budget set forth in the Research
Program Plan, the Steering Committee shall (1) instruct the CNS JMT to
incorporate the Reserve Field Project into the Research Programs; and (2)
approve funding, pursuant to the provisions set forth in Section 2.4(b)(ii)
below, either through the use of the Mutual Consent Fund or through an increase
by AHP in the budget of the Research Program.
(ii) Additional Funding for Reserve Field Projects. In the event that
the Steering Committee or, if necessary, the Executive Officers approve(s)
additional funding to permit the incorporation of a Reserve Field Project into
the Research Program, such funding shall be guaranteed and provided from one of
two sources. The Steering Committee shall have the right to release funds in
support of a Reserve Field Project from the Mutual Consent Fund, which shall
operate as set forth in Section 2.4(a)(ii). Alternatively, the Steering
Committee may decide that additional funding to permit the incorporation of a
Reserve Field Project into the Research Program shall be provided directly by
AHP through an
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
increase in the budget of the Research Program and not through the Mutual
Consent Fund.
(iii) Consequence of Incorporation of a Reserve Field Project into the
Research Programs. In the event that a Reserve Field Project is incorporated
into the Research Program, (A) ************************** set forth in the
Agreement with respect to ************ within the ******** ******* shall apply
to **************************, and (B) the disease that is the subject of such
Reserve Field Project shall become a part of the Core Field and shall no longer
be a part of the Reserve Field.
(iv) Rejected Millennium Reserve Field Project. In the event that (A) a
Reserve Field Project is submitted to the CNS JMT by Millennium (a "Millennium
Reserve Field Project") and (B) (1) the Steering Committee, or if necessary, the
Executive Officers decide(s) that such Millennium Reserve Field Project does not
have merit and, accordingly, should not be incorporated into the Research
Program (and no alternative project targeting the disease that is the subject of
such Millennium Reserve Field Project is identified pursuant to the terms of
Section 2.4(b)(i)), (2) the Steering Committee or, if necessary, the Executive
Officers decide(s) that such Millennium Reserve Field Project should be
incorporated into the Research Program with increased funding but the funds
available through the use of the Mutual Consent Fund have been exhausted and AHP
does not agree to provide the recommended additional funding, or (3) neither the
Management Committees nor the Executive Officers can reach a decision with
respect to the proposed incorporation of such Millennium Reserve Field Project
into the Research Program, then the disease that is the subject of such rejected
Millennium Reserve Field Project (a "Rejected Millennium Reserve Field Project")
shall cease to be a part of the Reserve Field and shall become part of the
Expansion Field (see Section 2.4(c)). The specific Rejected Millennium Reserve
Field Project shall be deemed a Rejected Expansion Field Project (see Section
2.4(c)) and shall be handled accordingly. For the sake of clarity, a disease can
cease to be a part of the Reserve Field and become a part of the Expansion Field
only if such disease is the subject of a Rejected Millennium Reserve Field
Project.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(c) Expansion Field Projects
(i) Assessment by Management Committees. Commencing
***************************** after the Effective Date and from time to
time thereafter during the term of the Research Program, Millennium or
AHP may submit to the CNS JMT research plans for projects within the
Expansion Field not then currently in the Research Program (an
"Expansion Field Project"). Within thirty (30) days after the submission
of a proposal for an Expansion Field Project (an "Expansion Field
Project Proposal"), the CNS JMT shall consider in good faith, and make a
recommendation to the Steering Committee with respect to, the merits of
such project, including its scientific feasibility and its commercial
utility.
As soon as practicable but no later *********** ********* after
receipt of (X) a recommendation from the CNS JMT that an Expansion Field
Project should not be incorporated into the Research Program, (Y) a
recommendation from the CNS JMT that an Expansion Field Project should
be incorporated into the Research Program with additional funding, or
(Z) a request from the CNS JMT to resolve the matter of whether an
Expansion Field Project should be incorporated into the Research
Program, the Steering Committee shall consider in good faith, and make a
decision with respect to, the merits of the project, including its
scientific feasibility and its commercial utility. In the event that the
Steering Committee decides that the Expansion Field Project does not
have merit, it shall so inform the CNS JMT and Millennium shall have the
right but not the obligation to undertake such project as a Rejected
Expansion Field Project (as that term is defined in Section 2.4(c)(ii)
below). In the event that the Steering Committee decides that the
Expansion Field Project has merit, the Steering Committee shall instruct
the Parties to enter into good faith negotiations, pursuant to the
provisions set forth in Section 2.4(c)(ii) below.
(ii) Negotiations with respect to Expansion Field Projects. In the
event that the Steering Committee or, if necessary, the Executive
Officers instruct(s) the Parties to enter into good faith negotiations
with respect to an Expansion Field Project, then the Parties shall have
a period of ***************** days in which to agree to, and to prepare
a definitive agreement
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
reflecting, the terms and conditions pursuant to which such Expansion
Field Project shall be funded by AHP. In the event that (A) the Steering
Committee or, if necessary, the Executive Officers decide(s) that an
Expansion Field Project does not have merit, (B) neither the Management
Committees nor the Executive Officers can reach a decision with respect
to an Expansion Field Project, or (C) the Parties fail to reach a
definitive agreement with respect to an Expansion Field Project within
****************, pursuant to this Section 2.4(c)(ii), then Millennium
shall have the right but not the obligation to undertake the rejected
Expansion Field Project (a "Rejected Expansion Field Project") either
alone or in collaboration with a third party, provided, however, that
(i) Millennium shall only have this right with respect to a project that
was submitted to the CNS JMT by Millennium and (ii) Millennium shall
************************************************************************
************* *********** with respect to a Rejected Expansion Field
Project pursuant to an agreement, *************************************
******************************************************. If Millennium
enters into a collaboration with a commercial third party relating to
such Rejected Expansion Field Project, then the disease that is the
target of such Rejected Expansion Field Project shall cease to be part
of the CNS Disorders Field. In the event that prior to entering into a
collaboration with a commercial third party with respect to the Rejected
Expansion Field Project, either (x) ********************* or information
********** ********* the scientific *********** of the Rejected
Expansion Field Project ****************** by Millennium, or (y)
Millennium intends to pursue additional projects relating to the disease
that is the target of such Rejected Expansion Field Project, such
projects shall be submitted to the CNS JMT as a new Expansion Field
Project and handled as described in this Section 2.4(c).
Section 2.5. Term of the Millennium Research Program; Extension
Benchmarks.
(a) Millennium shall conduct the Millennium Research Program for
the first seven (7) Contract Years; provided, however, that AHP may
terminate the Millennium Research Program by providing notice to
Millennium (the "Termination Notice") (i) at any time during the ten
(10) Business Day
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period following the conclusion of the third Contract Year, if, at the
conclusion of the third Contract Year, the Year Three Extension
Benchmark (as that term is defined below) has not been achieved, or (ii)
at any time during the ten (10) Business Day period following the
conclusion of the fifth Contract Year, if, at the conclusion of the
fifth Contract Year, the Year Five Extension Benchmark (to be determined
by the Steering Committee as described below) has not been achieved. As
used herein, the term "Year Three Extension Benchmark" means that at
least ************************* have been identified (i.e., have met the
criteria for ****************** and **********************************
***********************************************************************
*********************************************************************
*********), provided that the foregoing criteria for the Year Three
Extension Benchmark shall be subject to modification to be agreed upon
in good faith based upon the prioritization of research within the
Millennium Research Program (e.g., such criteria could include
*************************** to the extent work thereon is contemplated
by the Research Program Plan). In the event that the term of the
Millennium Research Program is extended to at least five (5) Contract
Years, the Year Five Extension Benchmark will be determined in good
faith by the Steering Committee within ninety (90) days following the
commencement of the fourth Contract Year.
(b) If Millennium achieves the Year Three Extension Benchmark, then
the Millennium Research Program shall continue for at least an
additional two (2) Contract Years at the level of funding set forth in
Budget 1 in Section 8.3(a) and, upon the election of Millennium, AHP
shall make the required equity purchase set forth in Section 8.2. If
Millennium fails to achieve the Year Three Extension Benchmark but AHP
does not elect to terminate the Millennium Research Program as a result
thereof, then the Millennium Research Program shall, at AHP's option and
with no equity purchase by AHP pursuant to Section 8.2, continue for at
least an additional two (2) Contract Years at the level of funding set
forth for those Contract Years in Budget 2 in Section 8.3(a). The
foregoing choice shall be made by AHP within ten (10) Business Days
following the conclusion of the third Contract Year. In the event that
AHP elects to extend the term of the Millennium Research Program
pursuant to this Section 2.5(b) and Millennium achieves the Year Five
Extension Benchmark, AHP shall be obligated, upon the
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39
election of Millennium, to make the equity purchase triggered by such
achievement, as set forth in Section 8.2.
(c) If the term of the Millennium Research Program is extended to
at least five (5) Contract Years, and Millennium fails to achieve the
Year Five Extension Benchmark but AHP does not elect to terminate the
Millennium Research Program as a result thereof, then the Millennium
Research Program shall, at AHP's option and with no equity purchase by
AHP pursuant to Section 8.2, continue for the remaining two (2) Contract
Years of the seven (7) Contract Year Term at the reduced level of
funding set forth in Budget 2 in Section 8.3(a) if Millennium had not
achieved the Year Three Extension Benchmark or Budget 3 in Section
8.3(a) if Millennium had achieved the Year Three Extension Benchmark.
The foregoing choice shall be made by AHP within ten (10) Business Days
following the conclusion of the fifth Contract Year.
(d) If Millennium achieves both the Year Three Extension Benchmark
and the Year Five Extension Benchmark, then the Millennium Research
Program shall continue for the entire seven (7) Contract Year term at
the funding level set forth in Budget 1 in Section 8.3(a) and AHP, at
the election of Millennium, shall make both equity purchases set forth
in Section 8.2.
Section 2.6. Termination of the Millennium Research Program. In addition
to the right of AHP to terminate the Millennium Research Program pursuant to
Section 2.5 in the event that the Year Three Extension Benchmark or Year Five
Extension Benchmark is not achieved, AHP shall have the following rights to
terminate the Millennium Research Program:
(a) Termination Upon Change of Control. AHP shall have the right to
terminate the Millennium Research Program upon the occurrence of a Change of
Control during the term of the Millennium Research Program by providing written
notice of termination to Millennium within sixty (60) days following receipt of
written notice of the occurrence of such Change of Control. Millennium agrees to
provide AHP with written notice of a Change of Control within ten (10) Business
Days following the occurrence thereof.
(b) Termination Upon a Change in Strategic Direction or a
Technology Patent Blocking Event. AHP shall have the right to terminate the
Millennium Research Program (i) upon the occurrence
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40
of a Change in Strategic Direction by providing written notice of termination to
Millennium indicating its belief that such a Change in Strategic Direction has
occurred and specifying its reasons for such belief, or (ii) in the event that a
Technology Patent Blocking Event has occurred by providing written notice of
termination to Millennium indicating its belief that a Technology Patent
Blocking Event has occurred and specifying its reasons for such belief. Such
termination shall be effective sixty (60) days following Millennium's receipt of
any such notice unless Millennium, during such sixty (60) day period, objects in
writing to such termination and provides reasons for its belief that a Change in
Strategic Direction or a Technology Patent Blocking Event, as applicable, has
not occurred. Any disagreement relating to the occurrence of a Change in
Strategic Direction or a Technology Patent Blocking Event, as applicable, shall
be resolved by the Executive Officers pursuant to Section 2.3(b)(iv) above..
(c) Termination Upon Certain Unsuccessful Technology Transfers. AHP
shall have the right to terminate the Millennium Research Program during the
period beginning on the first day of the fourth Contract Year and ending ninety
(90) days thereafter in the event that (a) AHP has terminated the TPT Access and
License Agreement and (i) AHP has made one or more requests for a transfer of
MTPT, including a request for RADE (as such terms are defined in the TPT Access
and License Agreement), and (ii) there has not occurred at least one (1)
Successful Transfer (as defined in the TPT Access and License Agreement); or (b)
AHP has terminated the software license agreement between Millennium and AHP
effective as of August 1, 1996 (the "Bioinformatics Agreement") on the basis
that Millennium failed to complete the initial installation of the Millennium
Bioinformatics Technology in accordance with the Acceptance Criteria (as such
terms are defined in the Bioinformatics Agreement). Any such termination shall
be effected by written notice from AHP to Millennium provided during the ninety
(90) day period specified above, and shall be effective sixty (60) days after
such notice.
(d) For the sake of clarity, the termination of the Millennium
Research Program, pursuant to this Section 2.6, shall not constitute a
termination of this Agreement.
Section 2.7. Diligence. The Parties shall (a) use reasonable efforts in
pursuing and conducting research and development of all Candidate Genes,
Validated Targets, Validated Vaccine Candidates and related assays developed
under the Research Program; (b) furnish, maintain and preserve suitable and
sufficient laboratory facilities, equipment and personnel for the
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41
research and development to be undertaken by the Parties in the course of the
Research Program; (c) perform their obligations hereunder in good faith in a
scientifically/commercially reasonable and workpersonlike manner; and (d) use
reasonable efforts to carry out all work done in connection with the Research
Program in compliance with any federal, state or local laws, regulations and
guidelines governing the conduct of such work.
Article III
Disclosure of Know-How
Section 3.1. Millennium Know-How. Commencing on the Effective Date,
Millennium shall disclose to AHP all existing Millennium Program Know-How which
Millennium reasonably believes to be necessary to the Research Program, as
described in the Research Program Plan. Millennium shall disclose to AHP on an
ongoing basis for the duration of the Millennium Research Program all additional
Millennium Program Know-How which Millennium reasonably believes to be necessary
to the successful execution of the Research Program, as described in the
Research Program Plan. Notwithstanding the foregoing, Millennium need not
disclose to AHP any Know-How which Millennium is precluded from disclosing under
any agreement binding upon it pursuant to any of the agreements listed in
Appendix C, as amended by Millennium from time to time, provided, however, that
Millennium shall not, without the prior written consent of AHP, enter into any
future agreement with a third party relating to the Millennium Program Know-How
which would limit the ability of Millennium to disclose Millennium Program
Know-How to AHP pursuant to the provisions of this Agreement or is otherwise
inconsistent with the licenses granted by Millennium to AHP in the CNS Disorders
Field under this Agreement.
Section 3.2. Biological Materials. Millennium shall also provide AHP
with Millennium Program Know-How in the form of genes, gene fragments, vectors,
cell lines, strains, transgenic organisms, model organisms, DNA and DNA
fragments and other biological materials, as well as information relating to
such materials, which Millennium reasonably believes to be necessary to AHP's
activities in the Research Program, as described in the Research Program Plan,
and the AHP Discovery Program. Notwithstanding the foregoing, Millennium need
not provide AHP with any such biological materials or related information which
Millennium is precluded from providing under any agreement binding upon it
pursuant to any of the agreements listed in Appendix C, as
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42
amended by Millennium from time to time, provided, however, that Millennium
shall not, without the prior written consent of AHP, enter into any future
agreement with a third party relating to the Millennium Program Know-How which
would limit the ability of Millennium to provide AHP, pursuant to this Section
3.2, with the biological materials and related information which Millennium
reasonably believes to be necessary to AHP's activities in the Research Program
and the AHP Discovery Program.
Section 3.3. AHP Program Know-How. AHP shall disclose to Millennium such
AHP Program Know-How which AHP reasonably believes is necessary for Millennium
to carry out its obligations within the Millennium Research Program, as
described in the Research Program Plan; provided, however, that AHP need not
disclose to Millennium any AHP Program Know-How which AHP is precluded from
disclosing under any agreement binding upon it.
Article IV
Confidentiality
Section 4.1. Confidential Information and Know-How. All Know-How or
other Confidential Information disclosed by one Party to the other during the
term of this Agreement shall not be used by the receiving Party except in
connection with the Research Program or the identification, selection,
preparation, development, manufacture or sale of Products, shall be maintained
in confidence by the receiving Party (except to the extent reasonably necessary
for regulatory approval of Products developed by AHP), and shall not otherwise
be disclosed by the receiving Party to any other person, firm, or agency,
governmental or private, without the prior written consent of the disclosing
Party, except to the extent that the Know-How or other Confidential Information:
(a) was known or used by the receiving Party prior to its date
of disclosure to the receiving Party; or
(b) either before or after the date of the disclosure to the
receiving Party is lawfully disclosed to the receiving Party by sources
other than the disclosing Party rightfully in possession of the
Confidential Information; or
(c) either before or after the date of the disclosure to the
receiving Party becomes published or generally known to the public,
other than through the sale of Products in the
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ordinary course, through no fault or omission on the part of the
receiving Party or its Sublicensees; or
(d) is independently developed by or for the receiving Party
without reference to or reliance upon the Confidential Information; or
(e) is required to be disclosed by the receiving Party to comply
with applicable laws, to defend or prosecute litigation or to comply
with governmental regulations, provided that the receiving Party
provides prior written notice of such disclosure to the other Party and
takes reasonable and lawful actions to avoid and/or minimize the degree
of such disclosure.
Section 4.2. Employee Obligations. Millennium and AHP each agree that it
shall provide Know-How and other Confidential Information received from the
other Party only to its employees, consultants and advisors, and to the
employees, consultants and advisors of such Party's Affiliates, who have a need
to know and have an obligation to treat such information and materials as
confidential.
Section 4.3. Publications. The Parties acknowledge that scientific lead
time is a key element of the value of the research to be performed under this
Agreement and further agree that scientific publications must be strictly
monitored to prevent any adverse effect of premature publication of results of
the Research Program. The CNS JMT shall establish a procedure for publication
review and approval and each Party shall first submit to the other Party an
early draft of all such publications, whether they are to be presented orally or
in written form, at least sixty (60) days prior to submission for publication.
Each Party shall review each such proposed publication in order to avoid the
unauthorized disclosure of a Party's Confidential Information and to preserve
the patentability of inventions arising from the research performed in the
course of the Research Program and/or the AHP Discovery Program. If, as soon as
reasonably possible but no longer than sixty (60) days following receipt of an
advance copy of a Party's proposed publication, the other Party informs such
Party that its proposed publication contains Confidential Information of the
other Party, then such Party shall delete such Confidential Information from its
proposed publication. If, as soon as reasonably possible but no longer than
sixty (60) days following receipt of an advance copy of a Party's proposed
publication, the other Party informs such Party that its proposed publication
could be expected to have a material adverse effect on
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any Program Patent Rights or Program Know-How, then such Party shall delay such
proposed publication sufficiently long to permit the timely preparation and
first filing of patent application(s) on the information involved, provided,
however, that (i) with respect to any agreement between Millennium and a third
party listed in Appendix C as of the Effective Date (and any extensions
thereof), the terms and conditions of such agreement (and any extensions
thereof) that govern the review, approval and delay of any scientific
publications relating to such agreement shall remain in full force and effect
notwithstanding any provision of this Section 4.3 to the contrary, and (ii) with
respect to any future agreement entered into by Millennium with a third party
relating to the Millennium Program Patent Rights and/or the Millennium Program
Know-How, Millennium shall not agree to any terms and conditions governing the
review, approval and delay of scientific publications that are inconsistent with
those set forth in this Section 4.3, without the prior written consent of AHP.
Section 4.4. Term. All obligations of confidentiality and non-use
imposed under this Article IV shall expire ************** ********* termination
or expiration of this Agreement.
Article V
Grant of Rights
Section 5.1. Technology Licenses.
(a) Licenses to Millennium Program Know-How and Millennium
Program Patent Rights. Subject to the terms and conditions of this Agreement,
Millennium hereby grants to AHP and its Affiliates (i) a fully paid-up,
non-royalty bearing (other than with respect to Products as provided in Section
8.5), co-exclusive (with Millennium to the extent necessary to enable Millennium
to conduct the activities contemplated by Sections 2.2 and 2.4 of this
Agreement), right and license, without the right to grant sublicenses, under
Millennium Program Know-How, Millennium Program Patent Rights and Millennium's
rights in Joint Program Know-How and Joint Program Patent Rights, to (1)
discover, make and use Candidate Genes, Validated Targets and Validated Vaccine
Candidates in the Territory to research and develop Small Molecule Products
and/or Vaccine Products for use in the treatment of medical indications in the
CNS Disorders Field and (2) research and develop Modified Drugs, and (ii) a
fully paid-up non-royalty bearing (other than with respect to Products as
provided in Section 8.5), non-exclusive right and license, without the right
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45
to grant sublicenses, under Millennium Program Know-How, Millennium Program
Patent Rights, and Millennium's rights in Joint Program Know-How and Joint
Program Patent Rights to make and use Validated Targets and Validated Vaccine
Candidates in the Territory to research and develop Small Molecule Products
and/or Vaccine Products for use in the treatment of medical indications outside
of the CNS Disorders Field.
(b) Licenses to AHP Program Know-How and AHP Program Patent Rights.
Subject to the terms and conditions of this Agreement, AHP hereby grants to
Millennium a fully paid-up, non-royalty bearing non-exclusive right and license,
without the right to grant sublicenses, (i) under AHP Program Know-How and AHP
Program Patent Rights to discover, make and use Candidate Genes, Validated
Targets and Validated Vaccine Candidates in the Territory in the course of, and
for purposes of performing its obligations under, the Millennium Research
Program, (ii) under AHP Program Know-How and AHP Program Patent Rights to
discover, research, develop, make, use, sell and offer to sell products for
which Millennium has retained rights pursuant to this Agreement, as set forth in
Section 5.8, for use in the treatment of medical indications in the CNS Disorder
Field, and (iii) under AHP Program Know-How to discover, research, develop,
make, use, sell and offer to sell products for use in the treatment of medical
indictions outside the CNS Disorders Field, provided that the foregoing license
grants shall in no event be construed to grant to Millennium any rights in any
AHP product, and the license granted under subsection (iii) shall not confer
upon Millennium the right to use any compounds, genes, gene fragments, vectors,
cell lines, strains, transgenic organisms, model organisms, DNA and DNA
fragments and other biological materials owned or otherwise controlled by AHP.
(c) Rights to Joint Program Know-How and Joint Program Patent Rights.
Subject to the co-exclusive and exclusive licenses granted in Sections 5.1 and
5.2, each Party shall have the right to employ Joint Program Know-How and Joint
Program Patent Rights in the research, development and commercialization of
pharmaceutical products, whether in or outside of the CNS Disorders Field.
Section 5.2. Product Licenses. Subject to the terms and conditions of
this Agreement, Millennium hereby grants to AHP and its Affiliates (a) an
exclusive, royalty bearing license, under Millennium Program Know-How,
Millennium Program Patent Rights and Millennium's rights in Joint Program
Know-How and Joint Program Patent Rights, to make, have made, import, use, have
used, offer
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46
to sell, sell and have sold Small Molecule Products and Vaccine Products for use
in the treatment of medical indications in the CNS Disorders Field within the
Territory, (b) an exclusive royalty bearing license, under Millennium Program
Know-How, Millennium Program Patent Rights and Millennium's rights in Joint
Program Know-How and Joint Program Patent Rights, to make, have made, import,
use, have used, offer to sell, sell and have sold Modified Drugs for use in the
treatment of medical indications in and outside of the CNS Disorders Field
within the Territory, and (c) a non-exclusive, royalty bearing license, under
Millennium Program Know-How and Millennium Program Patent Rights and
Millennium's rights in Joint Program Know-How and Joint Program Patent Rights,
to make, have made, import, use, have used, offer to sell, sell and have sold
Small Molecule Products and Vaccine Products for use in the treatment of medical
indications outside of the CNS Disorders Field within the Territory. Such
licenses shall include the right to grant sublicenses, on notice to Millennium
as soon as reasonably possible, provided, however, (i) AHP shall be responsible
for all obligations of AHP's Affiliates and Sublicensees hereunder, and
guarantees to Millennium the performance of all such obligations, and (ii) the
payment of royalties on Net Sales of Small Molecule Products, Vaccine Products
or Modified Drugs shall remain a direct obligation of AHP, regardless of whether
sales are made by AHP or an AHP Affiliate or Sublicensee.
Section 5.3. AHP's Right of First Refusal with Respect to Non-Vaccine
Products. During the term of the Research Program, Millennium and AHP agree to
discuss collaborations concerning the development and commercialization of
Non-Vaccine Products for use in the CNS Disorders Field on a product-by-product
basis. The initial opportunity to begin such discussions concerning a
Non-Vaccine Product shall arise when, in the course of the Research Program,
either Party recognizes the possibility for developing such Non-Vaccine Product.
When this occurs, the Party recognizing such possibility shall present such
information to the other Party and such other Party shall have a period of
forty-five (45) days in which to initiate good faith negotiations concerning a
potential collaboration with respect to such Non-Vaccine Product. If such
negotiation is initiated, the Parties shall have a period of ninety (90) days in
which to execute a definitive agreement, the terms and conditions of which shall
govern any collaboration between the Parties with respect to such Non-Vaccine
Product.
If either (a) a negotiation concerning a potential collaboration with
respect to a Non-Vaccine Product is not initiated, or (b) the Parties cannot
agree to the terms of a
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47
collaboration with respect to such Non-Vaccine Product, then Millennium shall
have the exclusive right, either alone or in collaboration with a third party,
to research, have researched, develop, have developed, make, have made, import,
use, have used, offer to sell, sell and have sold such Non-Vaccine Product for
use in and outside of the CNS Disorders Field within the Territory, provided,
however, that Millennium shall not, without AHP's prior written consent, enter
into a collaboration with a third party with respect to such Non-Vaccine Product
pursuant to an agreement, the terms and conditions of which are, on the whole,
more favorable than those offered by Millennium to AHP.
Notwithstanding the foregoing provisions of this Section 5.3, the
Parties agree and acknowledge that Millennium shall have the right to enter into
a collaboration with a commercial third party with respect to the research,
development and/or commercialization of a broad class of Millennium therapeutic
product opportunities that comprise Proteins ("Protein Therapeutics") and/or
Gene Therapy Drugs, the significant majority of which are not likely to be
useful as therapeutic products in the CNS Disorders Field; examples of such a
class include without limitation: (i) Protein Therapeutics isolated from an
individual cell or tissue type such as T cells or monocytes; (ii) Protein
Therapeutics isolated from a set of several individual cell or tissue types;
(iii) Protein Therapeutics of a specific structural or functional class such as
chemokines; and (iv) Gene Therapy Drugs that contain a particular delivery
vehicle that targets a broad set of cell or tissue types. Prior to entering into
any such collaboration, Millennium shall provide AHP with (x) a written
notification of its intent to enter into such collaboration, and (y) a written
summary with respect to such collaboration (a "Collaboration Summary") broadly
outlining the scope and the experimental objectives of the research to be
undertaken in the course of such collaboration. Following a thirty (30) day
period commencing on the date on which AHP receives the Collaboration Summary,
Millennium shall have the right to enter into such collaboration, unless within
such thirty (30) day period AHP provides Millennium with written notification of
AHP's opinion that the collaboration described in the Collaboration Summary does
not satisfy the conditions set forth in the first sentence of this paragraph, in
which case the disagreement between the Parties with respect to such
collaboration shall be presented to the Executive Officers for resolution within
a period not to exceed thirty (30) days. With respect to any and all product
opportunities falling within any class that is the subject of any collaboration
with a commercial third party entered into by Millennium pursuant to this
Section 5.3 that prohibits Millennium from collaborating with AHP
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48
with respect to such product opportunities, AHP's right of first refusal, as set
forth in this Section 5.3, shall terminate.
Section 5.4. AHP's Rights With Respect to Other Millennium Projects. The
Parties understand and agree that during the term but outside of the Millennium
Research Program, Millennium may undertake genomic research activities not
designed primarily to yield biological molecules likely to be useful as
therapeutic targets or as therapeutic products in the CNS Disorders Field but
which may yield such biological molecules (the "Other Millennium Projects").
Other Millennium Projects include without limitation non-CNS disease-focused
genetic/genomic research programs (e.g., studies of the genetic and molecular
basis of obesity or asthma; random sequencing of cDNA libraries constructed from
human or other tissues, such as T cells or fetal brain) and diagnostics
research. In the event that (i) a biological molecule with utility as a target
for small molecule intervention or a Vaccine in the CNS Disorders Field is
identified in the course of an Other Millennium Project during the term of the
Millennium Research Program, (ii) Millennium elects to exploit the potential of
such biological molecule for use in the CNS Disorders Field, and (iii)
Millennium has no prior commitment to a third party concerning the research,
development and/or commercialization of such biological molecule that would
prohibit Millennium from undertaking a collaboration with AHP with respect to
such biological molecule, then Millennium shall (a) inform AHP of the existence
and potential utility in the CNS Disorders Field of such biological molecule,
and (b) enter into discussions with AHP regarding a collaboration between
Millennium and AHP concerning the research, development and/or commercialization
of such biological molecule within the CNS Disorders Field.
Section 5.5. Diagnostic Products.
The Parties acknowledge and agree that the development and
commercialization of a Diagnostic Product associated with a Product may
advantageously affect the sales of both the Diagnostic Product and the
associated Product. Except as otherwise provided in this Section 5.5, Millennium
has retained the right to develop and commercialize Diagnostic Products relating
to Products, either alone or in collaboration with third parties. The Parties
agree to exchange requisite information to enable Millennium, if it so elects,
to develop a Diagnostic Product for use in conjunction with each Product and to
enable AHP to assess the status of Millennium's development efforts relating
thereto. Millennium shall provide written notice to AHP, on a disease
indication-by-disease indication basis, whether it intends to develop a
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Diagnostic Product. If (a) ************************************
*****************************************************************
**********************************************************
************************, and the licences set forth in Sections 5.1 and 5.2
shall be extended to permit the development and commercialization of a
Diagnostic Product for such indication; (b) ****************************
********************************************************************
*******************************************************************************
*************************************************************************
************************************************************, then Millennium
shall retain all rights with respect thereto, including the right to develop and
commercialize such Diagnostic Product in collaboration with a third party,
without obligation to AHP; (c)
***************************************************************
**************************************************************
******************************************************************
**************************************************** on the development and
commercialization of such Diagnostic Product, then the Parties shall attempt in
good faith to negotiate a separate development and commercialization agreement
with respect to such Diagnostic Product, provided that
***********************************************************************
************************************************************************
***********************************************************, including the right
to develop and commercialize such Diagnostic Product in collaboration with a
third party. In the event that ********** has not provided
********************** with respect to a specific disease indication,
****************************************** provide such notice within
***************; failure to provide such notice within ****************** shall
be considered a response that **************************************************
***************************.
Section 5.6. AHP's Rights to Potential Candidate Genes. Within ninety
(90) days following the expiration of the Research Program, AHP may designate
any potential Candidate Gene as a Candidate Gene, provided, however, that at the
time of such designation(s) AHP shall pay to Millennium the appropriate
milestone payment set forth in Section 8.4. Upon any such designation(s), each
designated Candidate Gene (a "Designated Candidate Gene") shall be subject to
all terms and conditions of this Agreement that relate to any Candidate Gene.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 5.7. AHP's Right of First Refusal with Respect to Autoimmune
Diseases.
(a) Program Discussion Initiated by Millennium. In the event
that p***********************, Millennium has not entered into an agreement with
a third party relating to the research, development and commercialization of
products for Autoimmune Diseases, Millennium grants to AHP a right of first
refusal on or after *************** to (a) fund any research program in which
genetics and genomics technologies are used to discover genes responsible for
susceptibility to Autoimmune Diseases (which genes may, in turn, be used to
identify and develop Small Molecules and Vaccines for use in the field of
Autoimmune Diseases) that Millennium has decided to undertake using financial
support from a commercial third party (an "Autoimmune Disease Program"), and (b)
obtain certain license rights under certain intellectual property that results
from such Autoimmune Disease Program. Such right of first refusal shall continue
for the term of the Research Program and shall operate as follows:
(1) Millennium shall send to AHP a written notification describing in
reasonable detail any such Autoimmune Disease Program contemplated by
Millennium (an "AD Notification");
(2) AHP shall respond to Millennium within forty-five (45) days of its
receipt of such AD Notification indicating its interest in such Autoimmune
Disease Program; and
(3) If AHP indicates that it is interested in funding such Autoimmune
Disease Program, the Parties shall negotiate in good faith a reasonable
agreement concerning such Autoimmune Disease Program.
In the event that (X) AHP fails to respond to Millennium within forty-five (45)
days after its receipt of an AD Notification, or (Y) AHP indicates that it is
not interested in funding such Autoimmune Disease Program, or (Z) the Parties
fail to reach a final agreement within ninety (90) days after the receipt by
Millennium of AHP's response indicating AHP's interest in such Autoimmune
Disease Program, Millennium shall be free to pursue such Autoimmune Disease
Program with one or more third parties. If AHP gives notice of its intention to
fund such Autoimmune Disease Program but the Parties fail to reach agreement and
Millennium pursues a collaboration in the field of Autoimmune Diseases pursuant
to an agreement with a commercial third party, Millennium agrees that the terms
and conditions of any such agreement with any commercial third party shall not
be, on the
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
whole, more favorable than the most favorable terms offered to AHP. From and
after ***************, Millennium shall not discuss any Autoimmune Disease
Program with a commercial third party until after Millennium has provided AHP
with an AD Notification with respect to such Autoimmune Disease Program.
(b) Program Discussions with a Third Party. Notwithstanding the
provisions set forth in Section 5.7(a), if a discussion of an Autoimmune Disease
Program is already in progress between Millennium and a commercial third party
as of *************** or is initiated by a commercial third party after
*************** but during the term of the Research Program, Millennium shall
promptly inform AHP of such third party interest. In such instance, Millennium
shall have the right to continue its discussions with such third party but
hereby agrees to initiate concurrent good faith negotiations with AHP with
respect to such research program.
Section 5.8. Millennium's Retained Rights. Any of Millennium's rights to
Millennium Program Know-How and Millennium Program Patent Rights not
specifically licensed to AHP pursuant to this Article V shall be retained by
Millennium, including without limitation (a) Millennium's non-exclusive right to
research, have researched, develop, have developed, make, have made, import,
use, have used, offer to sell, sell and have sold Small Molecules and Vaccines
for use in the treatment of medical indications outside of the CNS Disorders
Field within the Territory, provided that, except as otherwise specifically
provided herein or in the TPT Access and License Agreement, Millennium shall
have no rights to AHP products or compounds, (b) Millennium's exclusive right to
research, have researched, develop, have developed, make, have made, import,
use, have used, offer to sell, sell and have sold any (i) Non-Vaccine Product
(subject to AHP's right of first refusal as set forth in Section 5.3), (ii)
Diagnostic Product (subject to the provisions of Section 5.4), and (iii)
Antisense Drug that embodies Millennium Program Know-How, in each case, for use
in and outside of the CNS Disorders Field within the Territory, and (c)
Millennium's exclusive right, within the Territory, to practice, outside of the
CNS Disorders Field, any and all Millennium Program Know-How that does not
constitute a Validated Target or Validated Vaccine Candidate.
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Article VI
Patent Ownership, Protection and Related Matters
Section 6.1. Ownership. AHP shall own all inventions within the scope of
the Research Program or the AHP Discovery Program made solely by its employees,
and Millennium shall own all inventions within the scope of the Research Program
made solely by its employees. All inventions within the Research Program or the
AHP Discovery Program made jointly by employees of AHP and employees of
Millennium shall be owned jointly by AHP and Millennium. All patent applications
and patents covering any invention and all Know-How related to such invention
made within the scope of the Research Program or the AHP Discovery Program shall
be owned by the Parties or Party, as the case may be, that own(s) said
invention. The determination of inventorship shall be made in accordance with
relevant patent laws; in the event of a dispute regarding inventorship, the
Steering Committee shall be authorized to determine inventorship, with the
advice of mutually acceptable outside patent counsel not regularly employed by
either Party.
Section 6.2. Patentable Inventions.
(a) If a patentable invention related to the Core Field is (i)
conceived or reduced to practice prior to the Effective Date and included within
Millennium Program Patent Rights, or (ii) conceived in the course of and within
the scope of the Research Program and is reduced to practice within the course
of the Research Program or the AHP Discovery Program (with respect to either
subsection (i) or (ii), a "Section 6.2 Invention"), AHP and Millennium shall
promptly discuss that invention and the desirability of filing a United States
patent application covering such invention, as well as any foreign counterparts.
The Party owning the Section 6.2 Invention (determined in accordance with
Section 6.1) shall make the final decision with respect to any such filings as
soon as practicable. If a Section 6.2 Invention is made jointly, the CNS JMT
shall determine which Party shall file and prosecute the application. If either
(1) the CNS JMT is unable to make such a determination or (2) no decision is
made regarding which Party shall file and prosecute the application covering
such jointly owned invention, then (i) Millennium shall have the first option to
file and prosecute the application
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53
for such jointly owned invention if such invention relates to a Candidate Gene,
Validated Target, Validated Vaccine Candidate, Protein, Gene Therapy Drug or
Diagnostic Product, and (ii) AHP shall have the first option to file and
prosecute the application for such jointly made invention if such invention
relates to a Modified Drug, Small Molecule Product or Vaccine Product. In the
event that either Party declines the option to file and prosecute any such
patent application for such jointly made invention, the Party not having such
option may, upon written notice to the other Party, file and prosecute the
application for such jointly made inventions.
(b) Patent applications relating to Section 6.2 Inventions made
jointly shall be prepared and prosecuted by outside patent counsel mutually
agreed to by the Parties, with review and comment provided by both Parties as to
such preparation and prosecution.
(c) Subject to (i) the grant of licenses to AHP under Article V,
(ii) the limitations on AHP's rights outside the CNS Disorders Field, (iii) the
retained rights of Millennium and (iv) AHP's royalty payment obligations for
Products under Article VIII, each Party shall be free to exploit jointly owned
patents within the Territory without restriction and without payment of any
additional compensation to the other Party.
Section 6.3. Review and Comment. Each Party shall provide the other
Party with a copy of any patent application which first discloses any Section
6.2 Invention prior to filing the first of such applications in any
jurisdiction, if possible, for review and comment by such other Party. The Party
receiving any such patent application under this Section 6.3 shall maintain such
patent application in confidence, pursuant to Article IV.
Section 6.4. Notice of Decision. If a Party decides not to file,
prosecute or maintain an application or patent on a Section 6.2 Invention in any
country, it shall give the other Party reasonable notice to this effect. After
such notice, the other Party may file, or maintain the application or patent, in
which event the first Party shall execute such documents and perform such acts
as may be reasonably necessary for the other Party to file, prosecute or
maintain such application.
Section 6.5. Patent Term Extensions. The Parties shall cooperate, if
necessary and appropriate, with each other in gaining patent term extension
wherever applicable to Program Patent Rights covering Products. The Parties
shall, if necessary and appropriate, use reasonable efforts to agree upon a
joint strategy relating to patent term extensions, but, in the absence of mutual
agreement with respect to any extension issue, a patent shall be extended if
either Party elects to extend such patent.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
All filings for such extension shall be made by the Party to whom the patent is
assigned, provided, however, that in the event that the Party to whom the patent
is assigned elects not to file for an extension, such Party shall (i) inform the
other Party of its intention not to file and (ii) grant the other Party the
right to file for such extension.
Section 6.6. Costs and Expenses. Each Party shall bear its own costs and
expenses in filing, prosecuting, maintaining and extending Patent Rights arising
out of the Research Program and the AHP Discovery Program, except that AHP shall
reimburse Millennium for ******************* of the costs of filing,
prosecuting, maintaining and extending Millennium Program Patent Rights and
Joint Program Patent Rights incurred on and after the Effective Date. AHP shall,
however, have the right to decline to so reimburse Millennium with respect to a
Millennium Program Patent Right in any country or countries in the Territory by
so notifying Millennium in writing prior to the time that Millennium incurs
legal expenses with respect to such Millennium Program Patent Right, in which
event the licenses granted to AHP in Article V with respect to such Millennium
Program Patent Right in such country or countries shall terminate, unless
otherwise agreed in writing.
Section 6.7. Third Party Infringement.
(a) Millennium and AHP each agrees to take reasonable actions to
protect the Program Patent Rights from infringement in the CNS Disorders Field
and to protect the Program Know-How from unauthorized use in the CNS Disorders
Field, when, from its own knowledge or upon notice by the other Party, the Party
with knowledge or receiving notice becomes aware of the reasonable probability
that such infringement or unauthorized use exists in the Field.
(b) Within ninety (90) days of becoming aware of the reasonable
probability of an interference or infringement of the Program Patent Rights in
the CNS Disorders Field or unauthorized use of the Program Know-How in the CNS
Disorders Field, the Responsible Party (as defined below) shall decide whether
to institute an infringement suit or take other appropriate action that it
believes is reasonably required to protect the Program Patent Rights and Program
Know-How in the CNS Disorders Field. If the Responsible Party fails to institute
such suit or take such action within such ninety (90)-day period, then the other
Party shall have the right at its sole discretion to institute such suit or
other appropriate action in the name of either or both Parties.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
In such event, the Responsible Party shall cooperate with the other Party to the
extent reasonably possible, including the joining of suit if necessary or
desirable.
(c) Neither Party shall settle or compromise any claim or
proceeding relating to Program Patent Rights or Program Know-How in the CNS
Disorders Field without the consent of the other Party, which consent shall not
be unreasonably withheld, provided that no such consent of Millennium shall be
required with respect to Patent Rights owned by, licensed to or otherwise
controlled by AHP (other than Millennium Program Patent Rights).
(d) As used herein, the term "Responsible Party" means (i) AHP
with respect to Patent Rights solely owned by, licensed to or otherwise
controlled by AHP (other than Millennium Program Patent Rights), (ii) Millennium
with respect to Millennium Program Patent Rights and (iii) AHP and Millennium
jointly with respect to Joint Program Patent Rights.
(e) Each Party shall assume and pay all of its own out-of-pocket
costs incurred in connection with any litigation or proceedings described in
this Section 6.7, including, without limitation, the fees and expenses of that
Party's counsel.
(f) Any recovery obtained by any Party as a result of any
proceeding described in this Section 6.7 or from any counterclaim or similar
claim asserted in a proceeding described in Section 6.9, by settlement or
otherwise, shall be applied in the following order of priority:
(i) first, to reimburse each Party for all litigation costs
in connection with such proceeding paid by that Party and not otherwise
recovered on a pro rata basis based on each Party's respective
litigation costs; and
(ii) second, the remainder of the recovery shall be paid (A)
where either AHP or Millennium is the Responsible Party,
************************** to the Responsible Party and
************************* to the other Party, provided, however, that if
the Responsible Party does not institute suit or take action as set
forth in Section 6.7(b) or elects not to respond to an invalidity claim
pursuant to Section 6.9, then the recovery shall be paid *************
***** to each Party, or (B) where AHP and Millennium are the Responsible
Party jointly (i.e. in the case of Joint Program Patent Rights),
******************* to each Party.
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Section 6.8. Notice of Certification. Millennium and AHP each shall
immediately give notice to the other of any certification filed under the U.S.
"Drug Price Competition and Patent Term Restoration Act of 1984", or comparable
law in other countries where applicable Program Patent Rights covering a product
sold by Millennium or AHP are maintained, claiming that such Program Patent
Right is invalid or that any infringement will not arise from the manufacture,
use or sale of any product in the Core Field by a third party. If the
Responsible Party decides not to bring infringement proceedings against a third
party making such a certification, the Responsible Party shall give notice to
the other Party of its decision not to bring suit as soon as practicable but no
later than twenty-one (21) days after receipt of notice of such certification.
The other Party may then, but is not required to, bring suit against the party
that filed the certification. Any suit by AHP or Millennium shall either be in
the name of AHP or in the name of Millennium, or jointly by AHP and Millennium,
as may be required by law. For this purpose, the Party not bringing suit shall
execute such legal papers necessary for the prosecution of such suit as may be
reasonably requested by the Party bringing suit.
Section 6.9. Claimed Infringement; Claimed Invalidity.
(a) If the activities of either Party in connection with the
Research Program, the AHP Discovery Program or as the result of making,
importing, using, offering to sell or selling a Product in the CNS Disorders
Field result in a claim of patent infringement or other violation of the
intellectual property rights of any third party, the Party who is accused of
such infringement shall defend itself at its sole cost. The other Party shall
cooperate with the accused Party in such defense and prosecution and shall have
the right to be represented by counsel of its own choice.
(b) If a third party at any time asserts a claim that any
Program Patent Right is invalid or otherwise unenforceable (an "Invalidity
Claim"), whether as a defense in an infringement action brought by AHP or
Millennium pursuant to Section 6.7 or Section 6.8, or in an action brought
against AHP or Millennium, the Parties shall cooperate with each other in
preparing and formulating a response to such Invalidity Claim. The Party
responsible for responding to such claim, at its sole expense, shall be
initially the Responsible Party, subject to the other Party's right, at its sole
expense, to assume responsibility if the Responsible Party elects not to do so.
Neither Party shall settle or compromise any Invalidity Claim without the
consent of
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
the other Party, which consent shall not be unreasonably withheld, provided that
no such consent of Millennium shall be required with respect to an Invalidity
Claim relating to Patent Rights owned by, licensed to or otherwise controlled by
AHP (other than Millennium Program Patent Rights).
Article VII
AHP Due Diligence
Section 7.1. Research Program Inventory. As set forth in this Article
VII, AHP is required to exercise commercially reasonable efforts to develop
Products based upon the results of the Research Program. For purposes of
assessing the adequacy of the efforts devoted by AHP thereto (and not for
purposes of determining whether a Product is a Royalty-bearing Product), the CNS
JMT shall, within ninety (90) days after the end of each Contract Year during
the term of the Research Program and each twelve (12) month period thereafter
for a period of three (3) years, provide a written inventory to each Party
listing the following: (a) each Candidate Gene; (b) each Validated Target; (c)
each Validated Vaccine Candidate (based upon the advice of the Vaccine
Management Team); (d) each disease indication relevant to a Candidate Gene,
Validated Target or Validated Vaccine Candidate (each such indication, which
must have at least one relevant Validated Target or Validated Vaccine Candidate
in such inventory, referred to as a "Disease Indication"); and (e) in the Final
Inventory (as defined below), all Designated Candidate Genes (as that term is
defined in Section 5.6) (each such inventory referred to as a "Program
Inventory" and the Program Inventory for the last Contract Year during the term
of the Research Program, as modified as described below, referred to as the
"Final Inventory"). The Final Inventory shall be modified to include Disease
Indications which relate to Validated Targets or Validated Vaccine Candidates
which achieve such status during the *********************
************************* of the Research Program.
Section 7.2. Candidate Genes.
(a) AHP shall use commercially reasonable efforts to move
Candidate Genes into Validated Target or Validated Vaccine Candidate status
within *************************************** of the Research Program. Such
efforts shall not be less than the efforts expended by AHP in connection with
its other research and development projects that are at a comparable stage of
the
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research and development process and that are of comparable scientific and
commercial promise.
(b) AHP shall provide Millennium with a written report
describing AHP's progress in moving Candidate Genes into Validated Target or
Validated Vaccine Candidate status, provided that no such report shall be
required until after the first Candidate Gene is identified. Such reports shall
be provided (i) within thirty (30) days after each June 30 and December 31
during the two (2) year period following the termination of the Research
Program, (ii) within thirty (30) days after each June 30 during the three (3)
following years, and (iii) thereafter if and when AHP has progress to report
relating to moving Candidate Genes into Validated Target or Validated Vaccine
Candidate status.
(c) AHP shall be deemed to have satisfied its obligations under
subsection (a) in the event that it is using the commercially reasonable efforts
required pursuant to subsection (a) at any given time to develop at least
*************** (rounded to the nearest whole number) of the
************************ (as defined below) into *****************. As used
herein, the term ************************** means a number of ***** equal to the
sum of Candidate Genes and *************** of all Designated Candidate Genes, if
any, included in the Final Inventory. Disputes regarding fulfillment of AHP's
obligations under this Section 7.2 shall be resolved in accordance with Section
7.5.
(d) If AHP fails to exercise commercially reasonable efforts as
required under this Section 7.2 then, at the election of Millennium, the
exclusive rights of AHP with respect to those Candidate Genes (including
Designated Candidate Genes)
(i) as to which AHP has not initiated and conducted
continuing research efforts to develop a Validated Target or
Validated Vaccine Candidate, and
(ii) which do not relate to any Disease Indication included
in the most recent Program Inventory for which AHP is conducting
active and continuing research efforts under the AHP Research
Program or AHP Discovery Program,
shall be converted to co-exclusive rights (with Millennium, either alone or in
collaboration with others). The foregoing shall be Millennium's sole and
exclusive remedy for the failure by AHP to use the commercially reasonable
efforts required under this Section 7.2.
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Section 7.3. Disease Indications.
(a) AHP shall use commercially reasonable efforts to develop a
Product for each Disease Indication included in each Program Inventory,
including the Final Inventory (as modified pursuant to Section 7.1). Such
efforts shall not be less than the efforts expended by AHP in connection with
its other research and development projects that are at a comparable stage of
the research and development process and that are of comparable scientific and
commercial promise. AHP's obligations under this subsection (a) shall apply
during the period (the "Section 7.3 Due Diligence Period") commencing with the
date of the initial Program Inventory and continuing until *******************
the date of the Final Inventory (including the final modification thereto as of
the ************************************ of the Research Program).
(b) AHP shall provide Millennium with a written report
describing AHP's progress in developing Products for Disease Indications
included in the most recent Program Inventory. Such reports shall be provided
(i) within thirty (30) days after each June 30 during the
********************************************* of the Research Program, and (ii)
thereafter if and when AHP has progress to report relating to developing
Products for Disease Indications included in the Final Inventory.
(c) AHP shall be deemed to have satisfied its obligations under
subsection (a) in the event that it is using the commercially reasonable efforts
at all times during the Section 7.3 Due Diligence Period (which shall include,
at a minimum, active efforts to screen against relevant Validated Targets and/or
to use relevant Validated Targets as the basis for structure-based rational drug
design) required pursuant to subsection (a) at any given time to develop a
Product for **************** (rounded to the nearest whole number) of the
******************* included in the most recent Program Inventory.
(d) If AHP fails to exercise commercially reasonable efforts as
required under this Section 7.3, then, at the election of Millennium, the
exclusive rights of AHP with respect to those Validated Targets or Validated
Vaccine Candidates (together with all related Candidate Genes)
(i) as to which AHP has not initiated and conducted
continuing screening and related efforts to discover and develop
a Product, and
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(ii) which do not relate to any Disease Indication included
in the most recent Program Inventory for which AHP is conducting
active and continuing research and development efforts under the
AHP Research Program or AHP Discovery Program,
shall be converted to co-exclusive rights (with Millennium, either alone or in
collaboration with others). The foregoing shall be Millennium's
************************* for the failure by AHP to use the commercially
reasonable efforts required under this Section 7.3.
(e) Notwithstanding the provisions of this Section 7.3, at any
time prior to the date of the Final Inventory (including the final modification
thereto as of **************************** *********** of the Research Program),
AHP shall have the right, by providing written notice to Millennium, to delete a
specified ****************** from the Program Inventory. Any such deletion shall
have the following effects: (i) such ****************** shall no longer be
considered to be part of the Program Inventory for assessing whether AHP has
satisfied its obligations under subsections (a) or (c) above; (ii) such
****************** shall cease to be in the *******************; and (iii) all
licenses granted by Millennium to AHP with respect to Validated Targets and
Validated Vaccine Candidates (together with all related Candidate Genes) that
relate solely to such ****************** shall terminate effective as of the
date of AHP's notice.
Section 7.4 Commercialization.
(a) AHP agrees to use commercially reasonable efforts to conduct
required clinical development activities and seek regulatory approval in Major
Market Countries for each Small Molecule Product and Vaccine Product. Such
efforts shall not be less than the efforts expended by AHP in connection with
its other development projects that are at a comparable stage in the development
process and are of comparable commercial promise. Upon receipt of regulatory
approval, AHP agrees to use commercially reasonable efforts to market and sell
each such Small Molecule Product and Vaccine Product in Major Market Countries.
(b) Within thirty (30) days after the end of each calendar
quarter, AHP shall provide Millennium with a written report describing AHP's
efforts with respect to the development and/or commercialization of each Small
Molecule Product and Vaccine Product in each Major Market Country.
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(c) AHP shall be deemed to have satisfied its obligations under
subsection (a) with respect to a Small Molecule Product or Vaccine Product in
the event that it is using the commercially reasonable efforts required pursuant
to subsection (a) at any given time in at least three (3) Major Market Countries
with respect to each such Product.
(d) If AHP shall fail to exercise commercially reasonable
efforts as required under this Section 7.4 with respect to any Small Molecule
Product or Vaccine Product, Millennium shall notify AHP. Effective ninety (90)
days thereafter, if AHP has not cured such failure, then AHP's exclusive rights
with respect to the development and commercialization of such Small Molecule
Product or Vaccine Product, as the case may be, in each Major Market Country in
which AHP has failed to exercise such commercially reasonable efforts (an
"Abandoned Market") shall terminate, and AHP shall grant to Millennium a fully
paid-up non-royalty bearing license to develop and commercialize, either alone
or in collaboration with third parties, such Small Molecule Product or Vaccine
Product, as the case may be, in each Abandoned Market. In such instance, AHP
shall (i) transfer to Millennium any and all regulatory and clinical information
related to such Small Molecule Product or Vaccine Product, as the case may be,
that AHP owns or otherwise controls and as to which AHP has the right to grant
licenses or sublicenses without violating the terms of any agreement or other
arrangement with a third party (the "Product Related Information"), and (ii)
grant to Millennium a fully paid-up non-royalty bearing license to use such
Product Related Information to develop and commercialize such Small Molecule
Product or Vaccine Product, as the case may be, in each Abandoned Market. AHP's
rights hereunder with respect to such Small Molecule Product or Vaccine Product,
as the case may be, in other Major Market Countries, or to other Products in the
Abandoned Market, shall be unaffected. The foregoing shall be Millennium's sole
and exclusive remedy for the failure by AHP to use the commercially reasonable
efforts required under this Section 7.4
(e) Notwithstanding the foregoing, AHP shall not be obligated to
use commercially reasonable efforts to conduct clinical development activities,
seek regulatory approval and market and sell any Small Molecule Product or
Vaccine Product with respect to which a Product Patent Blocking Event has
occurred. In the event that a Party makes a determination that a Product Patent
Blocking Event has occurred, such Party shall notify the other Party, and shall
provide with such notice support for its determination. In the event that the
other Party disagrees with
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such determination, the matter shall be referred to the Executive Officers for
resolution pursuant to Section 2.3(b)(iv), with the advice of mutually
acceptable outside patent counsel not regularly employed by either Party.
Section 7.5. Determination of Due Diligence. In the event that
Millennium does not believe that AHP has satisfied its obligations under
Sections 7.2(a), 7.3(a) or 7.4(a), Millennium shall notify AHP in writing. If
AHP believes that it has satisfied such obligations, it shall so notify
Millennium within ten (10) Business Days after receipt of Millennium's notice.
Such notice by AHP shall indicate whether AHP believes it has met the "safe
harbors" set forth in Sections 7.2(c), 7.3(c) or 7.4(c), as applicable (the
"Safe Harbor Provisions"), or whether AHP believes it has otherwise satisfied
its obligations under Sections 7.2(a), 7.3(a) or 7.4(a), as applicable, and, in
either event, provide supporting information for such position. If Millennium
disagrees with AHP's response, either because it does not believe that the
applicable Safe Harbor Provision has been satisfied or, if AHP has indicated
that it has not met the applicable Safe Harbor Provision, because it does not
believe that AHP has otherwise satisfied its obligations, the Parties shall
attempt in good faith to resolve the disagreement, referring the matters to the
Executive Officers for resolution pursuant to Section 2.3(b), if necessary. In
the event that (a) the Parties are unable to resolve any disagreement under this
Section 7.5, and (b) AHP has not met the applicable Safe Harbor Provision, then
AHP shall bear the burden of proof relating to its satisfaction of its
obligations under Sections 7.2(a), 7.3(a) or 7.4(a), as applicable.
Article VIII
Payments
Section 8.1. License Fees. AHP shall make the following non-refundable
payments to Millennium in consideration of the rights granted to AHP under this
Agreement:
(a) ***************************************** ************ on the
Effective Date;
(b) *********************************************, ****, contingent
upon the continuation of the Research Program until such date;
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(c) **************************************************
***************, contingent upon the continuation of the Research
Program until such date;
(d) **************************************************
*************, contingent upon the continuation of the Research Program
until such date;
(e) ***************************************************
************************ of the Effective Date, contingent upon the
continuation of the Research Program for a period of at least
************ following the Effective Date;
(f) ***************************************************
******************, contingent upon the continuation of the Research
Program until such date;
(g) ***************************************************
******************, contingent upon the continuation of the Research
Program until such date;
(h) ***************************************************
****************, contingent upon the continuation of the Research
Program until such date;
(i) ***************************************************
************************* of the Effective Date contingent upon the
continuation of the Research Program for a period of at least
************* following the Effective Date;
(j) ***************************************************
******************, contingent upon the continuation of the Research
Program until such date;
(k) ***************************************************
******************, contingent upon the continuation of the Research
Program until such date;
(l) ***************************************************
****************, contingent upon the continuation of the Research
Program until such date.
Section 8.2. Equity Purchases On Achievement of Extension Benchmarks. In
the event that Millennium achieves one or both of the Extension Benchmarks, for
each Extension Benchmark that is achieved AHP shall, upon the election of
Millennium, purchase from Millennium, for a purchase price of
**************************
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*****************************, shares of common stock of Millennium (the "Common
Stock") at a price per share equal to *** ****************************** of the
Fair Market Value (as defined below) of the Common Stock. Notice of Millennium's
election to have AHP purchase Common Stock (an "Equity Election Notice") shall
be provided by Millennium to AHP at least sixty (60) days prior to the end of
the third or fifth Contract Year, as applicable. The Purchase Date shall mean
(i) in the case of a purchase relating to the achievement of the Year Three
Extension Benchmark, the date one (1) Business Day after the end of the third
Contract Year, and (ii) in the case of a purchase relating to the achievement of
the Year Five Extension Benchmark, the date one (1) Business Day after the end
of the fifth Contract Year. The "Fair Market Value" shall be equal to the
average closing price of the Common Stock on the NASDAQ National Market (or
other principal securities exchange on which the Common Stock is then traded)
during the ten (10) Business Days ending on the Business Day preceding the third
Business Day prior to the end of the third or fifth Contract Year, as applicable
(the "Measurement Period"). Notwithstanding the foregoing, in the event that (A)
the Fair Market Value is fifteen percent (15%) or more lower than the average
closing price of the Common Stock on the Nasdaq National Market (or other
principal securities exchange on which the Common Stock is then traded) during
the ten (10) Business Days ending sixty (60) days prior to the end of the third
or fifth Contract Year, as applicable (such average price being referred to as
the "Prior Fair Market Value"), Millennium shall have the right to cancel the
closing by providing notice to AHP during the three (3) Business Day period
prior to the end of the third or fifth Contract Year, as applicable.
Furthermore, in the event that the Fair Market Value exceeds the Prior Fair
Market Value by fifteen (15%) or more, then the purchase price shall be equal to
one ******************************************************************
*************, provided that Millennium shall have the right to cancel the
closing by providing notice to AHP during the three (3) Business Day period
prior to the end of the third or fifth Contract Year, as applicable. In the
event that Millennium exercises its rights to cancel a closing, Millennium shall
have no further right to receive the cancelled equity investment (but any
cancellation of the equity payment relating to the third Contract Year shall
have no effect on the equity payment, if any, relating to the fifth Contract
Year). Each purchase of Common Stock under this Section 8.2 shall be pursuant
to, and shall be subject to the conditions in, an agreement which shall include
the terms set forth on Appendix D to this Agreement. Notwithstanding the
provisions of this Section 8.2 to the contrary, in the event that, on any
Purchase Date, the Common Stock of Millennium (or any
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successor security thereto) is not listed or traded on an automated stock
quotation system or national stock exchange (including Nasdaq, the New York
Stock Exchange or the American Stock Exchange, or any successor system or
exchange), then AHP shall not be obligated to purchase shares of Common Stock on
such Purchase Date.
Section 8.3. Research Funding.
(a) Budget. In support of research and development to be
conducted by Millennium pursuant to this Agreement, AHP shall make the following
minimum payments to Millennium to fund the Millennium Research Program:
(In million's)
Contract Budget Cum- Budget Cum- Budget Cum
Year 1 ulative 2 ulative 3 ulative
- -------- ------ ------- ------ ------- ------ -------
1 $ **** $ **** $ **** $ **** $ **** $ ****
2 $ **** $ **** $ **** $ **** $ **** $ ****
3 $ **** $ **** $ **** $ **** $ **** $ ****
4 $ **** $ **** $ **** $ **** $ **** $ ****
5 $ **** $ **** $ **** $ **** $ **** $ ****
6 $ **** $ **** $ **** $ **** $ **** $ ****
7 $ **** $ **** $ **** $ **** $ **** $ ****
Budget 1 assumes that Millennium achieves the Year Three Extension Benchmark and
the Year Five Extension Benchmark. Budget 2 assumes that Millennium does not
achieve the Year Three Extension Benchmark and that AHP elects to continue to
fund the Millennium Research Program for the entire seven (7) year term at the
lowest minimum funding level. Budget 3 assumes that Millennium achieves the Year
Three Extension Benchmark but does not achieve the Year Five Extension Benchmark
and that AHP elects to continue to fund the Minimum Research Program for the
entire seven (7) year term at the lowest minimum funding level. The funding of
the Millennium Research Program by AHP in accordance with the applicable minimum
budget shall be provided on a cumulative basis whereby money not spent in any
given Contract Year shall remain available to spend in subsequent Contract Years
of the Millennium Research Program. The amounts set forth in the above table are
in terms of the value of United States dollars as of the Effective Date. The
actual amount to be provided by AHP to Millennium shall be subject, beginning in
Contract Year 2, to ************************************************************
********************************************************************************
******************
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*****************************************************************************.
The funds provided by AHP to Millennium in accordance with the applicable
minimum budget shall be divided between (1) amounts allocated for support of
Millennium personnel (at a rate of ****************************************
**********/FTE/Contract Year, subject to the Annual Adjustment beginning in
Contract Year 2) and (2) amounts allocated for the funding of External
Collaborations. The actual allocation of such funds shall be specified in the
Research Program Plan, subject to review and modification by the CNS JMT.
(b) Payments. Within ten (10) Business Days following the first day of
the first quarter of the first Contract Year (the "First Contract Quarter"), AHP
shall pay to Millennium the full amount of funding set forth in the applicable
budget for the First Contract Quarter. Within ten (10) Business Days of the
first day of each subsequent contract quarter (a "Subsequent Contract Quarter"),
AHP shall pay to Millennium the full amount due for each such Subsequent
Contract Quarter. Within thirty (30) days of the completion of the First
Contract Quarter and each Subsequent Contract Quarter during the term of the
Research Program, Millennium shall provide AHP with a written statement setting
forth the actual amounts expended in the immediately preceding contract quarter,
and shall provide AHP with a credit for any amounts overpaid by AHP (except that
with respect to the last quarterly payment of the last Contract Year, Millennium
shall reimburse AHP for any amounts overpaid by AHP) or bill AHP for any amounts
underpaid during such contract quarter (except that AHP shall not be obligated
to pay to Millennium an amount that exceeds the minimum funding level set forth
in the applicable budget).
(c) Records and Audits. Millennium shall keep, complete and accurate
records of the latest three (3) years of funding of the Millennium Research
Program by AHP, and Millennium's funding of the Non-Program New Core Field
Projects, if any, including all aspects of any applicable Reimbursement Costs
pursuant to Section 2.4(a)(iv) hereof, all in accordance with generally accepted
accounting procedures, consistently applied. AHP shall have the right annually
at AHP's expense to have an independent, certified public accountant, reasonably
acceptable to Millennium, review such records in the location(s) where such
records are maintained by Millennium upon reasonable notice and during regular
business hours for the sole purposes of verifying the expenditures by Millennium
with respect to Millennium personnel and with respect to External Collaborations
on an annual basis for which AHP has provided funding pursuant to the Millennium
Research Program. Results of such review shall be
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made available to both Parties. If the review reflects an overpayment of funding
to Millennium, such overpayment shall be promptly remitted to AHP. If the
overpayment is equal to or greater than five percent (5%) of the actual annual
funding amount that was otherwise due, AHP shall be entitled to have Millennium
pay all of the costs of such review.
Section 8.4. Milestones.
(a) Research Milestones. Within thirty (30) days after the
achievement of the following research milestones, AHP shall pay to Millennium
the specified milestone payments, all of which shall be non-refundable:
(i) The sum of ****************************
********************************** (A) that is
*********************** by Millennium, or (B) that is
******************************************************
****************** by Millennium, in each case before or in the
course of the Millennium Research Program; provided, however, that
no more than ******************* ***** may qualify for this
milestone payment until ***
*************************************************** is achieved.
Upon the achievement of each and every
***********************************************, the number of
Candidate Genes eligible for this milestone payment shall
***************** (3) if immediately prior to the achievement of
such ***************************** ***************** the number of
*************** eligible for this milestone payment was
*******************.
(ii) The sum of (A) *********************
***************************************************
***************** that is successfully achieved in the course of
the Research Program, (B) *************
*************************************************
*************************** that is successfully achieved within
the ********************** immediately following the *********** of
the Research Program, (C)
**********************************************
***************************************************
***************** that is successfully achieved within the
********************** commencing on the
************************************************* of the Research
Program and *****************************
*********************************************** of the
*******************************************************
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*************************************************
*************************** that is successfully achieved within
the ninety *****************************
******************************************************
*************** of the Research Program and *********
********************************************************
*********** of the Research Program, and (E) *****
**************************************************
*********************************************** that is
successfully achieved within the **********************
*******************************************************
*****************************************************
****************************************************
*************************************************.
(b) Product Development Milestones. Within thirty (30) days after
the achievement of the following product development milestones, AHP
shall pay to Millennium the specified milestone payments, all of which
shall be non-refundable:
(i) The sum of *****************************
****************************************************** in the first
Major Market Country for each Product.
(ii) The sum of ********************************
******************************************************** **********
in the first Major Market Country for each Product.
(iii) The sum of *********************************
****************************************************** ******* for
each Product.
(iv) The sum of *****************************
***************************************** for each Product.
(v) The sum of ********************************
*******************************************************
***************************************************** ***** for
each Product.
(vi) The sum of ********************************
************************************************ in the first Major
Market Country **************************** for each Product.
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Notwithstanding the foregoing, ********************************** pursuant to
Subsection 8.4(b)(i), (ii), (iii), (iv), (v) or (vi) for any Product that
contains the same active ingredient as contained in a Product with respect to
which Millennium has already received a milestone payment pursuant to such
Subsection.
If AHP begins the development of a Product and later ceases development
of said Product due to ****************************
***************************************************************
*************************************************************** then any
milestone payments made under Subsections 8.4(b)(i), (ii), (iii), (iv), (v) and
(vi) shall be **********************
***************************************************************
***************************************************************
************************** as contained in the original Product.
Section 8.5. Royalty Payments to Millennium on Products.
(a) Royalty Rates
(i) On Sales of Products for Indications in the CNS Disorders
Field. AHP shall pay to Millennium royalties on Net Sales of a
Royalty-bearing Product for an indication in the CNS Disorders
Field at the following rates:
Annual Aggregate
Net Sales in the Royalty-bearing
Territory of each Small Molecule Product/
Royalty-bearing Royalty-bearing Royalty-bearing
Product Vaccine Product Modified Drug
------- --------------- -------------
less than or equal **** ****
***************
greater than **** **** ****
*****************
*****************
greater than **** ****
*****************
The royalty rates set forth in the above table shall only apply to that portion
of the Net Sales of a Royalty-bearing Product that falls within the indicated
range. For example, for a Royalty-bearing Small Molecule Product whose annual
Net Sales exceed
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********** the royalty for such product shall be equal to *****
************************************** of Net Sales, plus *****
************************************ of Net Sales plus *********** ***** of that
portion of Net Sales that exceeds *********** Notwithstanding the foregoing, the
royalty rates set forth in this Section 8.5(a)(i) shall be
**************************************, ********************** on Net Sales of
any Royalty-bearing Product ******************************. For the purposes of
this Section 8.5, a Royalty-bearing Product ****************** ***********," in
the circumstance where, on a country-by-country basis, (A)
****************************************************
***************************************************************
***************************************************************
**********************************************(B) *************
*************************************************** provided that (i) where a
Royalty-bearing Product is afforded ***************** only because it is
************************ contained in a ******* application (i.e., the
*********** is not a ********************** contained in an *************), such
***************************** ********************************************
******************* *************************************************
************** **************** (assuming, for this purpose, such ***********
would ***** in the **** as then ****************** in a ****** in the
******************), and (ii) the ************************ ******************
pursuant to Section 8.5(b) below shall be for ********************************
***************** of the Royalty-bearing Product ******* by such ***********
contained in a ******* **********, if no ****** thereon ****** in the
****************** prior to the expiration of such ***********************
(provided that if a ********************* following the expiration of such
***********************, AHP's royalty payment obligations pursuant to Section
8.5(b) below shall resume).
(ii) On Sales of Products for Indications Outside of the CNS
Disorders Field. In the event that AHP sells a Royalty-bearing
Product that is registered for sale solely in a medical indication
******************* **************, the royalty rate on the Net
Sales of such Royalty-bearing Product shall be *************
**************************** for such Royalty-bearing Product as
indicated in Section 8.5(a)(i). Sales of a Royalty-bearing Product
that is only registered for either an indication(s)
****************************** or an indication(s)
********************************** shall be assumed to be for that
indication unless
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otherwise demonstrated. In the event that a Royalty-bearing Product
is registered for sale in both an indication in the
*************************************
**********************************, the royalty rate on Net Sales
of such Royalty-bearing Product in the *** *************** shall be
************************** of the rate applicable for such
Royalty-bearing Product as indicated in Section 8.5(a)(i) and the
royalty rate on Net Sales of such Royalty-bearing Product
************** ******************* shall be ******************) of
the rate applicable for such Royalty-bearing Product as indicated
in Section 8.5(a)(i). AHP shall have the obligation to demonstrate
by appropriate records that the sales subject to the lower royalty
rate are for an indication **********************************.
(b) Length of Royalty Payments. The royalties payable under Section
8.5(a) shall be paid on a country-by-country basis (i) from the date of
First Commercial Sale for each Royalty-bearing Product until the
termination of any ***** *********** afforded such Royalty-bearing
Product in such country, or (ii) until
********************************** ***************, whichever of (i) or
(ii) is longer.
(c) Royalties Payable Only Once. The obligation to pay royalties is
imposed only once with respect to the same unit of Royalty-bearing
Product. Except as specifically provided in this Agreement, it is
understood and agreed that there shall be no deductions from the
royalties payable hereunder.
Article IX
Accounting
Section 9.1. Royalty Reports. AHP shall deliver to Millennium, within
sixty (60) days after the end of each calendar quarter, a written accounting of
AHP's, its Affiliates' and its Sublicensees' sales and other consideration
received subject to royalty payment due to Millennium for such quarter. Such
quarterly reports shall indicate the Net Sales of Royalty-bearing Products on a
country-by-country basis. This obligation shall commence with the first calendar
quarter in which there is a Net Sale of a Royalty-bearing Product by AHP or any
of its Sublicensees.
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Section 9.2. Delivery of Royalty. When AHP delivers the accounting to
Millennium, AHP shall also deliver all royalty payments due to Millennium for
the calendar quarter.
Section 9.3. Records and Audits. AHP shall keep, and shall require its
Affiliates and Sublicensees to keep, complete and accurate records of the latest
three (3) years of Net Sales. Millennium shall have the right annually at
Millennium's expense to have an independent, certified public accountant,
reasonably acceptable to AHP, review such records in the location(s) where such
records are maintained by AHP, its Affiliates or its Sublicensees upon
reasonable notice and during regular business hours and under obligations of
strict confidence, for the purposes of verifying royalties payable to Millennium
and Net Sales. Results of such review shall be made available to both Parties.
If the review reflects an underpayment of royalties to Millennium, such
underpayment shall be promptly remitted to Millennium. If the underpayment is
equal to or greater than five percent (5%) of the royalty amount that was
otherwise due, Millennium shall be entitled to have AHP pay all of the costs of
such review.
Section 9.4. Currency of Payments. All payments under this Agreement
shall be made in United States dollars by wire transfer to such bank account as
Millennium may designate from time to time. Any payments due hereunder on Net
Sales outside of the United States shall be payable in United States dollars at
the rate of exchange of the currency of the country in which the Net Sales are
made as published by the Wall Street Journal for the last Business Day of the
calender quarter for which the royalties are payable.
Section 9.5. Tax Withholding. AHP and Millennium shall use all
reasonable and legal efforts to reduce tax withholding on payments made to
Millennium hereunder. Notwithstanding such efforts, if the Parties conclude that
tax withholdings under the laws of any country in the Territory are required
with respect to payments to Millennium under Article VIII, AHP shall withhold
the required amount and pay it to the appropriate governmental authority. In
such a case, AHP will promptly provide Millennium with original receipts or
other evidence sufficient to allow Millennium to obtain the benefits of such tax
withholdings.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Article X
Term and Termination
Section 10.1. Term. This Agreement becomes effective as of the Effective
Date, may be terminated as set forth in this Article X, and otherwise remains in
effect until the expiration of the term of AHP's obligation to pay royalties.
******** ***************************************************************
***************************************************************
**************************** under this Agreement.
Section 10.2. Termination For Material Breach. Upon any material breach
under this Agreement by either Party (in such capacity, the "Breaching Party"),
the other Party (in such capacity, the "Non-Breaching Party") may terminate this
Agreement by ninety (90) days' written notice to the Breaching Party, specifying
the material breach, default or other defect. For the sake of clarity, any
failure of diligence by AHP under Sections 7.2, 7.3 and/or 7.4 shall not be
deemed a material breach for purposes of this Section 10.2. The termination
becomes effective at the end of the ninety (90) day period unless (i) the
Breaching Party cures such breach during such ninety (90) day period, or (ii) if
such breach is not susceptible to cure within ninety (90) days of the receipt of
written notice of the breach, the Breaching Party is diligently pursuing a cure
(unless such breach, by its nature, is incurable, in which case the Agreement
may be terminated immediately). The Parties will use reasonable efforts to work
together to cure any breach.
Section 10.3. Rights Upon Termination for Material Breach. If the
Non-Breaching Party terminates this Agreement pursuant to Section 10.2 following
a material breach by the Breaching Party, (a) the Breaching Party shall return
to the Non-Breaching Party all Confidential Information and materials received
from the Non-Breaching Party during the term of this Agreement, (b) the
Breaching Party shall cease all use of the Confidential Information and
materials received from the Non-Breaching Party for any purpose, except that the
Breaching Party may keep a copy of all documents for record keeping purposes
only, (c) the Breaching Party shall deliver to the Non-Breaching Party all data
and information developed by the Breaching Party prior to such termination as a
result of the Research Program or the AHP Discovery Program which can reasonably
be viewed as necessary or useful to obtain governmental regulatory approvals,
and, subject to any agreements with third parties, the ***********************
***************************************************************
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(d) in the event that the Breaching Party is ********************
*************************************************************** set forth in
Section 5.1 and Section 5.2, subject to the continued payment of all applicable
amounts set forth in Article VIII hereof, and (e) in the event that the
Breaching Party is AHP, all licenses granted to AHP under this Agreement shall
terminate.
Section 10.4. Residual Rights. Upon expiration or early termination of
this Agreement, except as specifically provided herein to the contrary, all
rights and obligations of the Parties shall cease, except as follows:
(a) Obligations to pay royalties and other sums accruing hereunder
up to the date of expiration or termination; and
(b) The right to complete the manufacture and sale of
Royalty-bearing Products, which qualify as "work in process" under
generally accepted cost accounting standards or which are in stock at
the date of expiration or termination, and the obligation to pay
royalties on Net Sales of such Royalty-bearing Products; and
(c) The obligations regarding confidentiality as set forth in
Article IV; and
(d) All obligations for record keeping and accounting reports; and
(e) A Party's right to inspect books and records of the other Party
as set forth in Article XIII and Article IX, which right shall continue
in full force and effect for three (3) years following the expiration of
such other Party's obligation under this Agreement to keep such books
and records; and
(f) Obligations of defense and indemnity, which obligations shall
continue in full force and effect for an unlimited period; and
(g) Obligations set forth in Section 6.7 and Section 6.9, but only
with respect to those causes of action that accrued prior to such
expiration or termination; and
(h) Any cause of action or claim of Millennium or AHP accrued or to
accrue because of any breach or default by the other Party hereunder.
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Article XI
Product Liability Indemnification
(a) Indemnification by AHP and its Affiliates. AHP and its Affiliates
(in such capacity, the "AHP Indemnifying Parties") agree to defend Millennium,
at the AHP Indemnifying Parties' cost and expense, and will indemnify and hold
Millennium and its directors, officers, employees and agents (the "Millennium
Indemnified Parties") harmless from and against any losses, costs, damages, fees
or expenses arising out of any claim relating to personal injury from the
development, manufacture, use, sale or other disposition of any Product by the
AHP Indemnifying Parties or Sublicensees. In the event of any such claim against
the Millennium Indemnified Parties by any party, the Millennium Indemnified
Parties shall promptly notify the AHP Indemnifying Parties in writing of the
claim and the AHP Indemnifying Parties shall manage and control, at their sole
expense, the defense of the claim and its settlement. The Millennium Indemnified
Parties shall cooperate with the AHP Indemnifying Parties and may, at their
option and expense, be represented in any such action or proceeding. The AHP
Indemnifying Parties shall not be liable for any litigation costs or expenses
incurred by the Millennium Indemnified Parties without the AHP Indemnifying
Parties' prior written authorization. In addition, the AHP Indemnifying Parties
shall not be responsible for the indemnification of any Millennium Indemnified
Parties with respect to any claim arising from any negligent or intentional acts
by any Millennium Indemnified Party.
(b) Indemnification by Millennium and its Affiliates. Millennium and its
Affiliates (in such capacity, the "Millennium Indemnifying Parties") agree to
defend AHP, at the Millennium Indemnifying Parties' cost and expense, and will
indemnify and hold AHP and its directors, officers, employees and agents (the
"AHP Indemnified Parties") harmless from and against any losses, costs, damages,
fees or expenses arising out of any claim relating to personal injury from the
development, manufacture, use, sale or other disposition of any product for
which Millennium has retained rights hereunder by the Millennium Indemnifying
Parties or Sublicensees. In the event of any such claim against the AHP
Indemnified Parties by any party, the AHP Indemnified Parties shall promptly
notify the Millennium Indemnifying Parties in writing of the claim and the
Millennium Indemnifying Parties shall manage and control, at their sole expense,
the defense of the claim and its settlement. The AHP Indemnified Parties shall
cooperate with the Millennium Indemnifying Parties and may, at
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their option and expense, be represented in any such action or proceeding. The
Millennium Indemnifying Parties shall not be liable for any litigation costs or
expenses incurred by the AHP Indemnified Parties without the Millennium
Indemnifying Parties' prior written authorization. In addition, the Millennium
Indemnifying Parties shall not be responsible for the indemnification of any AHP
Indemnified Parties with respect to any claim arising from any negligent or
intentional acts by any AHP Indemnified Party.
Article XII
Governing Law
This Agreement shall be construed and the respective rights of the
Parties hereto determined according to the substantive laws of the State of
Delaware notwithstanding the provisions governing conflict of laws under such
Delaware law to the contrary except matters of intellectual property law which
shall be determined in accordance with the national intellectual property laws
relevant to the intellectual property in question.
Article XIII
Assignment
Neither Party may assign this Agreement in whole or in part without the
consent of the other, except to an Affiliate, or except if such assignment
occurs in connection with the sale or transfer of all or substantially all of
the business and assets of Millennium or AHP to which the subject matter of this
Agreement pertains.
Article XIV
Affiliate Agreements
If requested by a Party, the other Party agrees to execute separate
license agreements ("Affiliate Agreements") separately granting directly to an
Affiliate of such Party, equivalent rights as granted to such Party herein. Any
such Affiliate Agreement entering into force under this Article XIV shall be
prepared by
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such Party and shall contain terms and conditions consistent with those of this
Agreement.
Article XV
Amendments
This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof, and supersedes all previous arrangements
with respect to the subject matter hereof, whether written or oral. Any
amendment or modification to this Agreement shall be made in writing signed by
both Parties.
Article XVI
Notices
All notices, instructions and other communications hereunder or in
connection herewith shall be in writing and shall be (i) delivered personally,
(ii) sent by registered or certified mail, return receipt requested, postage
prepaid, (iii) sent via a reputable overnight courier service, or (ii) sent by
facsimile transmission, in each case to an address set forth below. Any such
notice, instruction or communication shall be deemed to have been delivered upon
receipt if delivered by hand, five business days after it is sent by registered
or certified mail, return receipt requested, postage prepaid, one business days
after it is sent via a reputable overnight courier service, or when transmitted
with electronic confirmation of receipt, if transmitted by facsimile (if such
transmission is on a business day; otherwise, on the next business day following
such transmission).
Notices to Millennium shall be addressed to:
Millennium Pharmaceuticals, Inc.
640 Memorial Drive
Cambridge, Massachusetts 02139-4815
Attention: Chief Executive Officer
Facsimile No.: (617) 621-0264
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with a copy to:
Attention: Legal Department
Facsimile No.: (617) 374-0074
Notices to AHP shall be addressed to:
Wyeth-Ayerst Research
555 East Lancaster Pike
St. Davids, PA 19087
Attention: Office of the Senior Vice President,
Global Business Development
Facsimile No.: (610) 688-9498
with a copy to:
American Home Products Corp.
Five Giralda Farms
Madison, NJ 07940
Attention: Associate General Counsel
Facsimile No.: (201) 660-7155
Either Party may change its address by giving notice to the other Party in the
manner herein provided.
Article XVII
Force Majeure
No failure or omission by the Parties hereto in the performance of any
obligation of this Agreement shall be deemed a breach of this Agreement or
create any liability if the same shall arise from any cause or causes beyond the
control of the Parties, including, but not limited to, the following: acts of
God; acts or omissions of any government; any rules, regulations or orders
issued by any governmental authority or by any officer, department, agency or
instrumentality thereof; fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot; and invasion and provided that such failure or
omission resulting from one of the above causes is cured as soon as is
practicable after the occurrence of one or more of the above-mentioned causes.
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Article XVIII
Representations and Warranties
Section 18.1. Representation of Authority. Millennium and AHP each
represents and warrants to the other that as of the Effective Date it has full
right, power and authority to enter into this Agreement and to provide the
Know-How under Article III hereof, including the biological materials, subject
to the limitations set forth in this Section 18.1. Millennium represents and
warrants to AHP that it (i) is the owner or licensee, as the case may be, of the
Millennium Program Patent Rights and the Millennium Program Know-How, and (ii)
has the right to grant to AHP the licenses and sublicenses granted pursuant to
this Agreement. Millennium represents that it has furnished AHP with (a) a copy
of all patent applications comprising Millennium Program Patent Rights and (b) a
summary of all license agreements and options pertaining to the Millennium
Program Patent Rights and Millennium Program Know-How existing as of the
Effective Date, as reflected on Appendix C, and by its execution and delivery of
this Agreement, AHP agrees to be bound by the terms of such agreements to the
extent required thereby.
Section 18.2 Outstanding Agreements. Appendix C, which shall be modified
by Millennium from time to time consistent with the provisions of this
Agreement, lists all material outstanding options, licenses or agreements of any
kind between Millennium and any third party relating to Millennium Program
Patent Rights and Millennium Program Know-How.
Section 18.3. Consents. All necessary consents, approvals and
authorizations of all government authorities and other persons required to be
obtained by such party in connection with execution, delivery and performance of
this Agreement have been and shall be obtained.
Section 18.4. No Conflict. Notwithstanding anything to the contrary in
this Agreement, the execution and delivery of this Agreement and the performance
of such Party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or regulations and (b) do not and shall not
conflict with, violate or breach or constitute a default or require any consent
under, any contractual obligation of such Party, including with respect to
Millennium, any obligations or duties arising under any of the agreements listed
on Appendix C hereof.
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Section 18.5. Section 365(n) of the Bankruptcy Code. 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 the
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101(35A) 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 either Party, the non-bankrupt Party shall further be
entitled to a complete duplicate of (or complete access to, as appropriate) 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.
Section 18.6. Knowledge of Pending or Threatened Litigation. Each Party
represents and warrants to the other that it is not aware of any pending or
threatened litigation (and has not received any communication) which alleges
that such Party's activities in the CNS Disorders Field to date have violated,
or by conducting its business as currently proposed under the Research Program
contemplated herein would violate, any of the intellectual property rights of
any other person. To the best of each Party's knowledge, there is no material
unauthorized use, infringement or misappropriation of any of its intellectual
property rights licensed hereunder to the other Party.
Section 18.7. Employee Obligations. Each Party represents and warrants
that all of its employees, officers, and consultants have executed agreements or
have existing obligations under law requiring, in the case of employees and
officers, assignment to such Party of all inventions made during the course of
and as the result of their association with such Party and obligating the
individual to maintain as confidential such Party's Confidential Information as
well as confidential information of a third party which such Party may receive,
to the extent required to support such Party's obligations under this Agreement.
Section 18.8. Full Disclosure. Each Party has disclosed to the other in
good faith, all material information such Party believes is relevant to the
subject matter of this Agreement, and to such Party's ability to observe and
perform its obligations hereunder.
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Section 18.9. Compliance with Applicable Laws and Regulations. Each
Party represents and warrants to the other Party that it will comply with all
applicable laws and regulations in the development, manufacture and marketing of
Products.
Section 18.10. Export Controls. The Parties acknowledge that both are
subject to the laws and regulations of the United States of America governing
exportation of technical information, computer software, laboratory prototypes
and other commodities and that the rights hereunder are contingent on compliance
with all such laws and regulations. The transfer of certain technical data and
commodities may require a license from the appropriate agency of the United
States Government and neither Party shall export such technical data or
commodities to certain foreign countries to which export restrictions apply
without the prior approval of such agency.
Section 18.11. No Warranties EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, AND PARTICULARLY THAT PRODUCTS WILL BE
SUCCESSFULLY DEVELOPED HEREUNDER, AND IF DEVELOPED, WILL HAVE COMMERCIAL UTILITY
OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Article XIX
Public Announcements
Any announcements or similar publicity with respect to the execution of
this Agreement shall be agreed between the Parties in advance of such
announcement. AHP understands that this Agreement and Millennium's efforts
hereunder are likely to be of significant interest to investors, analysts and
others, and Millennium therefore intends to make such public announcements with
respect thereto. Millennium agrees that any such announcement will not contain
confidential business or technical information and, if disclosure of
confidential business or technical information is required by law or regulation,
will redact if permissible by such law or regulation, or otherwise make
reasonable efforts to minimize such disclosure and obtain confidential treatment
for any such information which is disclosed to a governmental agency or group.
Each Party agrees to provide to the other Party a copy of any public
announcement as soon as reasonably practicable under the circumstances prior to
its scheduled release. Each Party shall have the right to expeditiously review
and recommend changes to any announcement regarding this Agreement or any
studies
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carried out under this Agreement. Except as otherwise required by law, the Party
whose press release has been reviewed shall consider in good faith the removal
of any information the reviewing Party reasonably deems to be inappropriate for
disclosure.
Article XX
Additional Agreements
Section 20.1. Independent Contractors. It is understood and agreed that
the relationship between the Parties hereunder is that of independent
contractors and that nothing in this Agreement shall be construed as
authorization for either AHP or Millennium to act as agent for the other.
Members of the CNS JMT, the Vaccine Management Team and the Steering Committee
shall be, and shall remain, employees of Millennium or AHP, as the case may be.
Neither Party shall incur any liability for any act or failure to act by members
of the CNS JMT and the Steering Committee who are employees of the other Party.
Section 20.2. Consents Not Unreasonably Withheld. Whenever provision is
made in this Agreement for either Party to secure the consent or approval of the
other, that consent or approval shall not unreasonably be withheld, and whenever
in this Agreement provisions are made for one Party to object to or disapprove a
matter, such objection or disapproval shall not unreasonably be exercised.
Section 20.3. No Strict Construction. This Agreement has been prepared
jointly and shall not be strictly construed against either Party.
Section 20.4. Headings. The captions or headings of the Sections or
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
Section 20.5. Severance of Clauses. Each Party agrees that, should any
provision of this Agreement be determined by a court of competent jurisdiction
to violate or contravene any applicable law or policy, such provision will be
severed or modified by the court to the extent necessary to comply with the
applicable law or policy, and such modified provision and the remainder of the
provisions hereof will continue in full force and effect.
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Section 20.6. No Waiver. The waiver of a breach hereunder may be
effected only by a writing signed by the waiving Party and shall not constitute
a waiver of any other breach.
Section 20.7. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of such
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement is executed this __ day of July,
1996, to be effective as of the Effective Date.
WYETH-AYERST RESEARCH DIVISION
OF AMERICAN HOME PRODUCTS MILLENNIUM PHARMACEUTICALS, INC.
CORPORATION
- ------------------------------ --------------------------------
Steven H. Holtzman
Chief Business Officer
- ------------------------------ --------------------------------
Title Title
- ------------------------------ --------------------------------
Date Date
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX A
CNS Disorders Field
A.1 CORE FIELD
********** *****************************
**************
**************
********** *****************************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
A.2 RESERVE FIELD
********** *****************************
**************
**************
**************
**************
**************
**************
********** *****************************
**************
**************
********** *****************************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
A.3 EXPANSION FIELD
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
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APPENDIX B
Research Program Plan
INTENTIONALLY OMITTED
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APPENDIX C
External Collaborations
Sponsored Research and Collaboration Agreement by and between Millennium
Pharmaceuticals, Inc., the Regents of the University of California, and Dr.
Nelson Freimer, dated February 23, 1996.
Sponsored Research and Collaboration Agreement by and between Millennium
Pharmaceuticals, Inc., the President and Fellows of Harvard College and
Washington University, and Drs. Ming Tsuang and Steven Faraone of Harvard and
Dr. Robert Cloninger of Washington dated April 15, 1996
License Agreement by and between Millennium Pharmaceuticals, Inc., and the
Regents of the University of California, dated February 23, 1996.
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APPENDIX D
Equity-Related Terms
1. Stock Purchase Agreement
The Parties shall execute and deliver a stock purchase agreement
containing basic representations and warranties customary for the sale
of shares of a publicly-held company, as well as closing conditions
relating to (a) the accuracy of such representations and warranties,
and (b) any filings and approvals required from regulatory authorities
(such as Hart-Scott-Rodino).
2. Registration Rights
(a) Demand registration rights
- $5,000,000 minimum size
- no demand prior to December 31, 1998
- limit to one (1) demand registration
(b) Piggyback registration rights
- unlimited, subject to underwriter cutback
(c) Form S-3 registration rights
- $1,000,000 minimum size
- limit to four (4) S-3 registrations
- subject to other customary limitations
(d) Other
- substantially similar to terms set forth in the Second Amended
and Restated Investor Rights Agreement dated as of October 3,
1995 between Millennium and the Investors specified therein,
except that in the event that Millennium grants registration
rights to a third party after the Effective Date that are, on the
whole, more favorable to such third party, Millennium shall offer
such more favorable rights to AHP.
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3. Standstill Provision (to be effective as of the Effective Date)
AHP agrees that for a period commencing on the Effective Date and ending
one (1) year after the termination of the Millennium Research Program,
it shall not, except pursuant to the provisions of this Agreement or
with Millennium's prior written consent, take action to acquire
beneficial ownership of any securities of Millennium or authorize or
make a tender, exchange or other offer therefor without the written
consent of Millennium, if the effect of such acquisition would be to
increase the percentage of the Total Potential Voting Power (as defined
below) of Millennium represented by all Common Stock, preferred stock
and other non-voting securities convertible into Common Stock then owned
by AHP to 20.0% (or more) of the Total Potential Voting Power of
Millennium other than as a result of (i) the acquisition of an entity
that owns securities of Millennium or (ii) AHP's participation as an
investor in a mutual fund, pooled investment account or similar fund
that owns securities of Millennium. For purposes hereof, "Total
Potential Voting Power" shall mean the total number of votes which may
be cast in the election of directors of Millennium if all securities
entitled to vote in the election of directors are present and voted and
assuming that all then outstanding securities of Millennium that are
convertible into, exchangeable for or otherwise exercisable to acquire
shares of preferred stock or Common Stock are so converted, exchanged or
otherwise exercised. AHP further agrees that, during the period that
this standstill covenant is in effect, AHP will not engage in any
Solicitation as defined below) or engage in any other act for the
purpose of opposing a Solicitation by the Board of Directors of
Millennium with respect to the election or removal of directors of
Millennium at any annual or special meeting of security holders or
action by written consent in lieu of a meeting. A "Solicitation", as
such term is used herein, shall have the meaning set forth in Rule
14a-1(l) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); provided however, that for purposes of this paragraph,
the term "Solicitation" shall be deemed to include a communication which
falls within the exception set forth in Rule 14a-1(l)(2)(iv) of the
Exchange Act.
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