EXHIBIT 10.1
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CONFIDENTIAL
TREATMENT REQUESTED
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PRODUCT DEVELOPMENT AGREEMENT
BY AND BETWEEN
TARGETED GENETICS CORPORATION
AND
GENETICS INSTITUTE, INC.
DATED NOVEMBER 9, 2000
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* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omitted portions of this exhibit have been filed separately with the Securities
and Exchange Commission
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS................................................................................... 1
ARTICLE 2 PRODUCT DEVELOPMENT........................................................................... 8
2.1 Steering Committee.......................................................................... 8
2.2 Responsibilities of the Parties............................................................. 10
2.3 Development Plan Funding.................................................................... 11
2.4 Other Costs and Expenses.................................................................... 13
2.5 Additional Technology....................................................................... 14
2.6 Reports; Inspection......................................................................... 16
2.7 Conduct of Development Work; Subcontracting................................................. 16
2.8 Approval Applications and Regulatory Approvals.............................................. 16
2.9 TGC Records and GI Audit Rights............................................................. 18
ARTICLE 3 CONSIDERATION................................................................................. 19
3.1 Other Payments by GI........................................................................ 19
3.2 Taxes and Withholding....................................................................... 20
3.3 Currency.................................................................................... 20
3.4 Payments; Late Payments..................................................................... 20
ARTICLE 4 EXCLUSIVITY, GRANT OF RIGHTS AND RELATED COVENANTS............................................ 21
4.1 Exclusivity................................................................................. 21
4.2 Grant of License by TGC to GI............................................................... 21
4.3 Covenant by TGC With Respect to Rights Under TGC IP Agreements.............................. 21
4.4 Grant of Option to License by GI to TGC..................................................... 22
4.5 Covenant by GI To Take No Action............................................................ 22
4.6 Improvements and Other Development Activities............................................... 22
4.7 Protein B Option............................................................................ 23
4.8 No Other Rights............................................................................. 24
ARTICLE 5 REPRESENTATIONS, WARRANTIES AND COVENANTS..................................................... 24
5.1 Representations and Warranties of the Parties Concerning Corporate Authorizations........... 24
5.2 Representations, Warranties and Covenants of TGC Concerning Agreement
Product Development......................................................................... 24
5.3 Representations and Warranties Specific to TGC IP Agreements................................ 26
5.4 Covenants Regarding TGC IP Agreements....................................................... 27
5.5 Disclaimer.................................................................................. 27
ARTICLE 6 INTELLECTUAL PROPERTY MATTERS................................................................. 28
6.1 Ownership of Intellectual Property.......................................................... 28
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6.2 Ownership of Approval Applications and Regulatory Approvals................................. 28
6.3 Prosecution and Maintenance of Patent Rights; Abandonment................................... 29
6.4 Prosecution and Maintenance of Joint Patents; Abandonment................................... 30
6.5 Enforcement of Patent Rights................................................................ 30
6.6 Settlement with a Third Party............................................................... 32
6.7 Infringement of Third Party Rights.......................................................... 32
6.8 Third Party Patents......................................................................... 34
6.9 Trademarks.................................................................................. 34
ARTICLE 7 CONFIDENTIALITY............................................................................... 35
7.1 Confidentiality; Exceptions................................................................. 35
7.2 Authorized Disclosure....................................................................... 35
7.3 Return of Confidential Information.......................................................... 36
7.4 Publications and Announcements.............................................................. 36
ARTICLE 8 TERM AND TERMINATION.......................................................................... 37
8.1 Term........................................................................................ 37
8.2 Termination for Technical or Commercial Non-Viability....................................... 37
8.3 Termination at Will......................................................................... 37
8.4 Termination for Cause....................................................................... 38
8.5 Termination for Insolvency.................................................................. 38
8.6 Rights on Termination....................................................................... 38
8.7 Accrued Rights.............................................................................. 40
8.8 Survival.................................................................................... 40
ARTICLE 9 INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY........................................... 41
9.1 Indemnification by GI....................................................................... 41
9.2 Indemnification by TGC...................................................................... 41
9.3 Indemnification Procedure................................................................... 42
9.4 Insurance................................................................................... 43
9.5 Limitation of Liability; Remedies Cumulative................................................ 43
ARTICLE 10 GOVERNING LAW; DISPUTE RESOLUTION 44
10.1 Governing Law............................................................................... 44
10.2 Dispute Resolution.......................................................................... 44
ARTICLE 11 MISCELLANEOUS................................................................................ 44
11.1 Assignment.................................................................................. 44
11.2 Force Majeure............................................................................... 45
11.3 Further Actions............................................................................. 45
11.4 Governmental Approvals; Compliance with Law................................................. 45
11.5 Public Announcement......................................................................... 45
11.6 Notices..................................................................................... 46
11.7 Waiver...................................................................................... 47
11.8 Disclaimer of Agency........................................................................ 47
11.9 Severability................................................................................ 47
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11.10 Entire Agreement............................................................................ 47
11.11 Counterparts................................................................................ 49
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List of Schedules and Exhibits
Schedule 1.17 GI Patent Rights
Schedule 1.28A Licensed Patent Rights - U.S.
Schedule 1.28B Licensed Patent Rights - Outside U.S.
Schedule 1.51 Specifications
Schedule 1.60 Third Party Agreements
Schedule 2.3.3 Development Plan Funding for First Project Year
Schedule 4.2.1 Exclusive Grant Exceptions
Schedule 5.2(d) Third Party Rights
Schedule 5.2(e) Third Party Rights
Schedule 5.2(f) Third Party Rights
Schedule 5.2(g) Grants to Third Parties
Exhibit A Development Plan
Exhibit B Adverse Experience Reporting Procedures
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PRODUCT DEVELOPMENT AGREEMENT
THIS PRODUCT DEVELOPMENT AGREEMENT (the "Agreement") is made effective as
of the 9th day of November 2000 (the "Effective Date") by and between Targeted
Genetics Corporation, a corporation organized under the laws of the State of
Washington, having offices at 1100 Olive Way, Suite 100, Seattle, Washington
98101, ("TGC") and Genetics Institute, Inc., having offices at 87 CambridgePark
Drive, Cambridge, Massachusetts 02140, ("GI"). TGC and GI are sometimes referred
to herein individually as a "Party" and collectively as the "Parties."
Recitals
1. The purpose of this Agreement is to provide for the development of
certain gene therapy products for the treatment of Hemophilia A and, under
certain circumstances, Hemophilia B.
2. TGC owns or has rights under certain patents, patent applications,
other valuable technology and know-how relating to an adeno-associated viral
gene system to deliver genetic material for the purpose of treating acquired or
inherited diseases, and may develop or acquire additional such rights.
3. GI owns or has rights under certain patents, patent applications,
other valuable technology and know-how relating to cloning and expression of
proprietary genetic sequences encoding, and has expertise in the clinical
development and marketing of, human Factor VIII and Factor IX for the treatment
of Hemophilia A and Hemophilia B, respectively.
4. Simultaneously with this Agreement, the Parties are entering into a
certain Supply Agreement pursuant to which TGC will manufacture and sell
exclusively to GI, and GI will purchase exclusively from TGC, such gene therapy
products.
In consideration of the premises and of the mutual covenants and
obligations set forth herein, the Parties hereby agree as set out below.
ARTICLE 1
DEFINITIONS
The following capitalized terms shall have the following meanings:
1.1 "Additional Technology" shall have the meaning set forth in Section
2.5.
1.2 "Additional Technology Cost" shall have the meaning set forth in
Section 2.5.
1.3 "Affiliate" means any individual, corporation, association or other
business entity which directly or indirectly controls, is controlled by or is
under common control with the Party in question. As used in this definition of
"Affiliate," the term "control" means the direct or indirect ownership of more
than fifty percent (50%) of the stock having the right to vote for directors
thereof
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or the ability to otherwise control the management of the corporation or other
business entity whether through the ownership of voting securities, by contract,
resolution, regulation or otherwise; provided, however, that the term
"Affiliate" shall not include subsidiaries or other entities in which a Party or
its Affiliates owns a majority of the ordinary voting power necessary to elect a
majority of the board of directors or other governing body, but is restricted
from electing such majority by contract or otherwise until the time such
restrictions are no longer in effect.
1.4 "Agreement Product" means any Protein A Agreement Product and, if the
Protein B Option is exercised pursuant to the terms and conditions set forth
herein in Section 4.7, any Protein B Agreement Product.
1.5 "Applicable Laws" means all laws, statutes, ordinances, codes, rules
and regulations which have been enacted by a Government Authority and are in
force as of the Effective Date or come into force during the term of this
Agreement, in each case to the extent that the same are applicable to the
performance by the Parties of their respective obligations under this Agreement.
For purposes of this Agreement, GLP and GMP shall be deemed to be within the
term "Applicable Laws."
1.6 "Approval Application" means any application necessary and
appropriate to obtain a Regulatory Approval, together with all required
documents, data and information concerning the Agreement Product which is the
subject of such application.
1.7 "Contract Manufacturer" means any Person contracted by TGC to provide
manufacturing-related products or services which constitute or are material to
an Agreement Product, or any component or ingredient therein, or which result in
any work product or other information that TGC or GI would include or might
reasonably be expected to include in any document or report, including, without
limitation, an Approval Application, submitted to a Government Authority or be
subject to review by a Government Authority including, without limitation, the
FDA. Without limiting the foregoing, the term "Contract Manufacturer" shall
include any Person, other than an Outside Contractor, whose acts or omissions in
connection with its assumption of any obligation of TGC under this Agreement or
the Supply Agreement would be imputed to, and would therefore be considered, the
acts or omissions of TGC pursuant to FFDCA or by a Government Authority,
including, without limitation, the FDA.
1.8 "Control" means, with respect to intellectual property, that the
Party named as having Control owns such intellectual property, or otherwise
possesses the ability to grant a license or sublicense under such intellectual
property without violating the terms of any agreement or other arrangement with
a Third Party.
1.9 "Development Period" means the term of the Development Plan.
1.10 "Development Plan" shall have the meaning set forth in Section 2.1.
1.11 "Development Plan Funding" shall have the meaning set forth in
Section 2.3.1.
1.12 "Development Work" shall have the meaning set forth in Section 2.1.
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1.13 "Effective Date" shall have the meaning set forth in the first
paragraph of this Agreement.
1.14 "Excluded Future Agreements" shall have the meaning set forth in
Section 4.1.
1.15 "FDA" means the United States Food and Drug Administration, and any
successor thereto.
1.16 "FFDCA" means the Federal Food, Drug, and Cosmetic Act, 21
U.S.C. (S) 321 et seq., as amended from time to time.
1.17 "GI Patent Rights" means (i) the United States patents applications
and patents listed on Schedule 1.17; (ii) all divisional, continuation,
continuation-in-part or substitute applications which claim priority from any of
the patent applications within (i) above; (iii) all United States patents which
may issue on any of the patent applications within (i) or (ii) above; (iv) all
extensions, re-examinations, or reissues of United States. patents within (i) or
(iii) above; and (v) all foreign patent applications and patents corresponding
to any of the patent applications or patents within (i), (ii), (iii) or (iv)
above.
1.18 "GI Trademarks" shall have the meaning set forth in Section 6.8.1.
1.19 "GLP" means current good laboratory practices equivalent to those
applicable in the United States and Europe and in effect from time to time
during the term of this Agreement.
1.20 "GMP" means current good manufacturing practices equivalent to those
applicable in the United States and Europe and in effect from time to time
during the term of this Agreement.
1.21 "Government Authority" means any supranational, national, regional,
state or local government, court, governmental agency, authority, board, bureau,
instrumentality or regulatory body.
1.22 "Improvement" means any improvement in or modification to an existing
Agreement Product developed or in development under the Development Plan, except
to the extent that such improvement or modification results in a molecular
sequence that is different from the molecular sequence of such Agreement
Product. The term "Improvement" shall not include any New Product.
1.23 "IND" means an Investigational New Drug application filed with or
submitted to the FDA.
1.24 "Joint Invention" means any invention, development, or discovery made
or created during the course of performance of the Development Work jointly by
(i) employees or agents of TGC or any of its Affiliates, and (ii) employees or
agents of GI or any of its Affiliates.
1.25 "Joint Patents" means (i) all patent applications that claim Joint
Inventions and that are filed by or for the behalf of TGC and/or GI or an
Affiliate of either pursuant to Section 6.4; (ii) all patent applications for
patents that claim Improvements with respect to a Joint Invention; (iii) all
divisional, continuation, continuation-in-part or substitute applications which
claim priority
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from any of the patent applications within (i) or (ii) above; and (iv) all
patents which may issue on any of the patent applications within (i), (ii) or
(iii) above, and all extensions, reexaminations or re-issues of any of such
patents.
1.26 "Know-How" means information, data and proprietary rights of any type
whatsoever (other than the Patent Rights) in any tangible or intangible form
whatsoever relevant to the development, manufacture and commercialization of an
Agreement Product, including, without limitation, inventions, practices,
methods, techniques, specifications, formulations, formulae, knowledge,
know-how, skill, experience, test data (including pharmacological, biological,
chemical, biochemical, toxicological and clinical test data), analytical and
quality control data, stability data, results of studies, technical drawings and
related copyrights, and other similar information.
1.27 "Licensed Know-How" means Know-How Controlled by TGC at any time
during the term of this Agreement.
1.28 "Licensed Patent Rights" means (i) the United States patent
applications and patents listed on Schedule 1.28A and, except as otherwise
provided herein, all other United States patent applications and patents
Controlled by TGC at any time during the term of this Agreement relating to the
subject matter of this Agreement, including, without limitation, patent
applications and patents with respect to Improvements and New Products; (ii) all
divisional, continuation, continuation-in-part or substitute applications which
claim priority from any of the patent applications within (i) above; (iii) all
United States patents which may issue on any of the patent applications within
(i) or (ii) above; (iv) all extensions, re-examinations, or reissues of United
States patents within (i) or (iii) above; and (v) all foreign patent
applications and patents corresponding to any of the patent applications or
patents within (i), (ii), (iii) or (iv) above, including, without limitation,
the patents and patent applications listed on Schedule 1.28B. Notwithstanding
anything to the contrary, "Licensed Patent Rights" shall not include any patent
application or patent subject to, or under which TGC received any right or
license pursuant to, a Third Party Agreement.
1.29 "Major Market Countries" means the United States, United Kingdom,
France, Germany, Italy, Canada and Japan.
1.30 "Net Sales" means:
1.30.1 Arm's Length Transactions - Normal. Except as provided in
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Sections 1.30.2 or 1.30.3 or 1.30.4 below, in the case of sales by or for the
benefit of a Person (the "Seller") to independent, unrelated Persons ("Buyers")
in bona fide arm's length transactions ("Arm's Length Transactions"), "Net
Sales" means the gross amount billed or invoiced by Seller with respect to any
Agreement Product, less the following deductions, in each case to the extent
actually allowed and taken by such Buyers and not otherwise recovered by or
reimbursed to Seller in connection with such Agreement Product ("Permitted
Deductions"): (i) trade, cash, promotional and quantity discounts to the extent
that such amounts are set forth separately as such in the total amount billed or
invoiced; (ii) taxes on sales (such as excise, sales or use taxes or value added
tax) to the extent imposed upon and paid directly with respect to the sales
price and set forth separately as such in the total amount billed or invoiced
(and excluding national, state or local taxes based on income); (iii) freight,
insurance, packing costs and other transportation charges to the extent added to
the sales price and set forth separately as such in the total amount billed or
invoiced; (iv) amounts repaid or
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credits taken by reason of rejections, defects or returns or because of
retroactive price reductions, or due to recalls or government laws or
regulations requiring rebates; (v) free goods, rebates taken by or fees paid to
distributors, and charge-backs to the extent that such amounts are documented;
and (vi) documented customs duties actually paid by Seller on import into the
country of sale. "Net Sales" shall also include the amount of fair market value
of all non-cash consideration to be received by Seller with respect to any
Agreement Product, whether such consideration is payment in kind, exchange or
other form. All such amounts shall be determined from the books and records of
Seller, in accordance with United States generally accepted accounting
principles, applied on a consistent basis.
1.30.2 Arm's Length Transactions - Bulk. In the case of an Arm's
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Length Transaction where a particular Agreement Product is sold in bulk
pharmaceutical form (as distinguished from finished pharmaceutical form) for
resale in packaged or finished form, "Net Sales" shall be calculated by (i)
determining the quantity (the "Finished Quantity") of such Agreement Product in
finished pharmaceutical form that would reasonably be produced from the bulk
pharmaceutical form quantity of such Agreement Product so sold, (ii) multiplying
such Finished Quantity by the average price for such Agreement Product in
finished pharmaceutical form during the applicable reporting period and (iii)
deducting any Permitted Deductions.
1.30.3 Combination Sales and Non-Arm's Length Transactions. In the
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case any particular Agreement Product is sold or otherwise commercially disposed
of for value in connection with the delivery of any other product which is not
an Agreement Product, or services which are not separately billed or invoiced,
or in a transaction that is not an Arm's Length Transaction, "Net Sales" shall
mean the gross amount that would have been billed or invoiced if such Agreement
Product had been sold at the average billed or invoiced amount (net of all
Permitted Deductions) for such Agreement Product in all Arm's Length
Transactions solely involving the sale of such Agreement Product during the
applicable reporting period or, if there are no such Arm's Length Transactions,
at Seller's commercially reasonable determination of what the billed or invoiced
amount for such Agreement Product would have been, based upon Seller's asking
price for such Agreement Product or other objective criteria.
1.30.4 Clinical Trial Samples. "Net Sales" shall not include any
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consideration received with respect to a sale, use or other disposition of any
Agreement 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
Agreement Product in such country, except with respect to sales, use or other
disposition under "treatment INDs," "named patient sales," "compassionate use
sales," or their equivalents pursuant to which Seller is entitled, under
applicable laws, regulations and regulatory policies, to recover costs incurred
in providing such Agreement Product to patients.
1.31 "New Product" means any product with potential utility in the
treatment of [*] or, in the event that GI exercises the Protein B Option, [*]
through use of a System to deliver a gene or other genetic material to cause the
production of a protein (including, without limitation, any improvement in or
modification to an existing Agreement Product) with a molecular sequence that is
different from the molecular sequence of an existing Agreement Product. For the
purposes of example, a product which results from a modification of the sequence
of the promoter, or the gene or the vector of an existing Agreement Product
shall be a New Product. The term "New Product" shall not include any
Improvement.
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* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
5
1.32 "Outside Contractor" means any Person other than a Contract
Manufacturer contracted by TGC or GI to provide products or services, including,
without limitation, regulatory services which are material to the performance of
its responsibilities under the Development Plan or which result in any work
product or other information that TGC or GI would include or might reasonably be
expected to include in any document or report, including, without limitation, an
Approval Application, submitted to a Government Authority or be subject to
review by a Government Authority, including, without limitation the FDA. Without
limiting the foregoing, the term "Outside Contractor" shall include any Person,
other than a Contract Manufacturer, contracted by TGC or GI whose acts or
omissions in connection with its assumption of any obligation of TGC or GI under
this Agreement, would be imputed to, and would therefore be considered the acts
or omissions of, TGC or GI pursuant to FFDCA or by a Government Authority,
including, without limitation FDA.
1.33 "Patent Costs" means all preparation, filing, prosecution and
maintenance out-of- pocket fees and expenses, actually incurred in connection
with the establishment and maintenance of rights under the Patent Rights.
1.34 "Patent Rights" means all rights in, to or under any patent
application or patent within the Joint Patents, the Licensed Patent Rights or
the GI Patent Rights.
1.35 "Person" means any person or legal entity.
1.36 "Phase I Clinical Trial" shall have the meaning set forth in Section
1 of Exhibit A.
1.37 "Phase II Clinical Trial" shall have the meaning set forth in Section
1 of Exhibit A.
1.38 "Phase III Clinical Trial" shall have the meaning set forth in
Section 1 of Exhibit A.
1.39 "Product Information" shall have the meaning set forth in Section
4.6.1.
1.40 "Project Year" means the applicable twelve (12) month period
beginning on the first day of the calendar quarter in which this Agreement is
executed, or on any anniversary thereof.
1.41 "Protein A" means [*].
1.42 "Protein A Agreement Product" means any product, whether in bulk or
finished pharmaceutical form, for treatment of [*] through use of a System to
deliver (ex vivo or in vivo) a Protein A Gene for the purpose of production of
Protein A.
1.43 "Protein A Gene" means [*].
1.44 "Protein B" means [*].
_____________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
6
1.45 "Protein B Agreement Product" means any product, whether in bulk or
finished pharmaceutical form, for treatment of [*] through use of a System to
deliver (ex vivo or in vivo) an Protein B Gene for the purpose of production of
Protein B.
1.46 "Protein B Gene" means [*].
1.47 "Protein B Option" means the option granted by TGC to GI pursuant to
Section 4.7.
1.48 "Reasonable Commercial Efforts" means, with respect to the efforts to
be expended by any Person with respect to any objective, reasonable, diligent,
good faith efforts to accomplish such objective as such Person would normally
use to accomplish a similar objective under similar circumstances. With respect
to any objective relating to the development and commercialization of an
Agreement Product by any Person, "Reasonable Commercial Efforts" means efforts
and resources normally used by such Person with respect to a product owned by
such Person or to which such Person has similar rights which is of similar
market potential at a similar stage in the development or life of such product,
taking into account issues of safety, efficacy, product profile, the
competitiveness of the marketplace, the proprietary position of the product, the
regulatory structure involved, profitability of the Agreement Product and other
relevant commercial factors.
1.49 "Regulatory Approval" means, with respect to a nation or, where
applicable, a multinational jurisdiction, (i) any approvals, licenses,
registrations or authorizations necessary for the manufacture, marketing and
sale of an Agreement Product in such nation or such jurisdiction, and (ii) where
relevant, pricing approvals necessary to obtain reimbursement from a Government
Authority with respect to such an Agreement Product. For the sake of clarity,
except as otherwise expressly provided, "Regulatory Approval" shall not be
achieved for an Agreement Product in a nation or, where applicable, a
multinational jurisdiction until any applicable approvals relating to pricing
and reimbursement from a Government Authority have been obtained in such nation
or such jurisdiction.
1.50 "Responsible Executive" shall have the meaning set forth in Section
10.2.
1.51 "Specifications" means the specifications for an Agreement Product,
consistent with the stage of development of such Agreement Product, set forth in
Schedule 1.51 as adopted by the Steering Committee pursuant to Section 2.1 and
as may be amended from time to time by written agreement between the Parties.
1.52 "Steering Committee" shall have the meaning set forth in Section 2.1.
1.53 "Sublicensee" means an authorized or permitted sublicensee of a
Party.
1.54 "Supply Agreement" means the certain Supply Agreement, effective as
of the Effective Date, by and between TGC and GI.
______________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
7
1.55 "System" means any system or method which uses [*] to deliver a gene
or other genetic material.
1.56 "TGC IP Agreements" means the Third Party Agreements and any other
current or future agreement under which TGC obtains, or which otherwise affects,
(i) any Licensed Patent Right, (ii) any Licensed Know How, or (iii) any other
right required or materially useful with respect to the System component of any
Agreement Product.
1.57 "TGC Option" shall mean the option granted by GI to TGC pursuant to
Section 4.4.
1.58 "TGC Regulatory Documents" means the [*], and all other documents
filed or required to be filed or otherwise submitted by TGC to FDA or other
similar governmental agency or authority in connection with obtaining Regulatory
Approval of manufacturing facilities and/or manufacturing processes.
1.59 "Third Party" means any Person other than TGC or GI or their
respective Affiliates.
1.60 "Third Party Agreement(s)" means the agreements listed on Schedule
1.60, as in effect on the Effective Date.
ARTICLE 2
PRODUCT DEVELOPMENT
2.1 Steering Committee.
2.1.1 In accordance with the terms and conditions set forth
below, the commercial development of Agreement Products ("Development Work")
will be conducted by or on behalf of the Parties pursuant to a mutually agreed
development plan, the initial version of which is attached hereto as Exhibit A
(as such plan is in effect from time to time, the "Development Plan"). GI and
TGC will cooperate in drafting and modifying, as necessary, the Development
Plan. Designated representatives of TGC will have primary responsibility for
drafting of sections of the Development Plan relating to Agreement Product
manufacture and Regulatory Approvals for manufacture of Agreement Products in
bulk pharmaceutical form. The Development Plan will cover all aspects of the
commercial development of each Agreement Product until such time as Regulatory
Approval for such Agreement Product is obtained. Designated representatives of
GI will have primary responsibility for drafting of sections of the Development
Plan relating to clinical development and Regulatory Approvals for marketing and
sale of Agreement Products in final pharmaceutical form. Within ten (10)
business days after the Effective Date, each of the Parties shall appoint three
(3) individuals to serve as its representatives on a joint steering committee
(the "Steering Committee"). Each Party shall have the right to change any or all
of its representatives on the Steering Committee upon written notice to the
other Party. The Steering Committee may appoint individuals to serve as
_______________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
8
representatives on subcommittees to assist the Steering Committee with respect
to any particular area required for Agreement Product development under the
Development Plan, including, for example, product manufacturing, quality control
and assurance, preclinical studies design, implementation and evaluation,
clinical protocols design, implementation and evaluation, and regulatory
affairs. The Steering Committee shall:
(a) Approve the Development Plan, including, without limitation,
go/no-go criteria, timelines and responsibilities;
(b) Monitor and make recommendations regarding the performance
of the Parties under the Development Plan and the conduct of
the Development Work;
(c) Approve modifications to the Development Plan;
(d) Adopt Specifications for each Agreement Product in the form
or forms to be delivered by TGC to GI appropriate to the
development status and commercialization strategy of such
Agreement Product, as recommended by an appropriate
subcommittee appointed by the Steering Committee, taking
into account FDA requirements and any Applicable Laws;
(e) Comment and advise on each Party's regulatory strategies
relating to Agreement Products;
(f) Determine whether to recommend to the Parties that an
Improvement should be incorporated into the Development
Plan, and when Improvements are approved by the Parties, how
Improvements should be incorporated into the Development
Plan;
(g) Determine whether to recommend to the Parties that a New
Product be developed and, if so, whether and how such
development should occur in lieu of or in addition to the
then-current activities with respect to any Agreement
Product then under development under the Development Plan;
(h) Review any and all proposed publications or communications
relating to the Development Plan, and activities relating to
an Improvement or a New Product, if applicable, and the
results therefrom and any and all proposed filings of patent
applications in connection therewith.
2.1.2 The Steering Committee shall meet not less frequently than
once per calendar quarter during the Development Period, on such dates and at
such times and locations as agreed to by the Parties. All decisions made or
actions taken by the Steering Committee shall be made unanimously, with each
Party entitled to one (1) vote. A quorum of the Steering Committee shall consist
of two members, provided that at least one member appointed by each Party is
present. Members of the Steering Committee may attend a meeting of the Steering
Committee either in person or by telephone conference call, but not by proxy. In
the event of a deadlock vote regarding a matter before the Steering Committee,
the Responsible Executives of the Parties shall meet to resolve the matter in
accordance with the procedures set out in Section 10.2.
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2.2 Responsibilities of the Parties.
2.2.1 TGC shall:
(a) Use Reasonable Commercial Efforts to perform the work to
be performed by TGC under the Development Plan;
(b) Obtain and maintain all Regulatory Approvals necessary
for the manufacture and sale to GI of Agreement Products
in bulk pharmaceutical form to be supplied to GI under
the Supply Agreement;
(c) Make available to GI sufficient quantities of Agreement
Products necessary for GI to meet its obligations under
the Development Plan to develop Agreement Products, as
requested by GI;
(d) Pursuant to the terms of the Supply Agreement,
manufacture or have manufactured under GMP conditions all
Agreement Products required by GI for use in clinical
trials to be conducted by GI under the Development Plan
and sell such Agreement Products to GI in a form as
requested by GI for use in such clinical trials; and
(e) Pursuant to the terms of the Supply Agreement,
manufacture or have manufactured under GMP conditions all
Agreement Products to be sold to GI.
2.2.2 GI shall use Reasonable Commercial Efforts to:
(a) Perform the work to be performed by GI under the
Development Plan;
(b) In consultation with TGC, prepare and submit an IND and
revise or amend the IND as necessary to permit clinical
testing.
(c) Use Agreement Products sold by TGC to GI in bulk form
pursuant to the Supply Agreement to manufacture or have
manufactured under GMP conditions Agreement Products in
appropriate dosage and appropriate delivery finished
pharmaceutical form for clinical trials of such Agreement
Products to be conducted by GI (except to the extent that
such Agreement Products are supplied to GI by TGC in
finished pharmaceutical form);
(d) Conduct all clinical trials necessary to obtain
Regulatory Approvals required to market and sell, in bulk
or finished pharmaceutical form, as appropriate, each
Agreement Product sold by TGC to GI under the Supply
Agreement in the Major Market Countries and, on a country
by country basis, in such other country or countries in
which GI determines in its sole discretion to market and
sell such Agreement Product (for so long as GI so
determines to market and sell such Agreement Product in
such other country or countries);
10
(e) Obtain and maintain Regulatory Approvals to market and sell,
in bulk or finished pharmaceutical form, as appropriate,
each Agreement Product sold by TGC to GI under the Supply
Agreement in the Major Market Countries and, on a country by
country basis, in such other country or countries in which
GI determines in its sole discretion to market and sell such
Agreement Product (for so long as GI so determines to market
and sell such Agreement Product in such other country or
countries); and
(f) Launch, promote, market and sell, in bulk or finished
pharmaceutical form, as appropriate, each Agreement Product
sold by TGC to GI under the Supply Agreement in the Major
Market Countries and, on a country by country basis, in such
other country or countries in which GI determines in its
sole discretion to market and sell such Agreement Product
(for so long as GI so determines to market and sell such
Agreement Product in such other country or countries).
2.3 Development Plan Funding.
2.3.1 The Steering Committee will agree upon the Development Work
to be conducted under the Development Plan (as provided in Section 2.1 above)
and upon a budget for funding to cover expenses of such activities to be
conducted during each Project Year, such budget to include a [*] percent ([*]%)
contingency amount to cover unforeseen cost overruns or unexpected cost items
(collectively, the "Development Plan Funding"). For purposes of such budget, the
rate payable to TGC by GI for a full time equivalent TGC employee shall be a
blended rate for all professional and technical employees of TGC based upon
salary, benefits and supplies in support of the activities of such employee,
which rate shall be [*] Dollars ($[*]) for the first two (2) Project Years and
for any subsequent Project Year shall be the rate for the previous Project Year
increased by a percentage equal to the percentage increase in the Bureau of
Labor Statistics consumer price index for the Seattle area over the last twelve
(12) month period reported in such index prior to the commencement of such
subsequent Project Year. Except as provided in the following sentence and in
Section 2.3.5 with respect to certain expenses in excess of budgeted amounts
during the first two Project Years, TGC will be responsible for expenses
incurred in a Project Year by TGC in respect of activities that were not
approved by the Steering Committee or in respect of activities approved by the
Steering Committee to the extent that such expenses exceed the budgeted amounts
therefor including the five percent (5%) contingency amount. If, during any
Project Year, the Steering Committee agrees to modify or otherwise change the
activities to be conducted by TGC or to increase the amount budgeted for
activities previously approved, the budget for funding to TGC for that Project
Year will be revised to reflect any adjustment in the estimated expenses for
such Project Year as a result of the modified or otherwise changed activities or
budget.
2.3.2 Unless otherwise agreed by GI in writing, the total funding
to TGC from GI for Development Work shall be an amount equal to the lesser of
either (i) Fifteen Million Dollars ($15,000,000), or (ii) the expenses actually
incurred by TGC, subject to approval by the Steering
___________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
11
Committee of the activities to be conducted by TGC and the expenses associated
with such activities. The Parties intend such funding to be disbursed in
accordance with the Development Plan over a three (3) year period. Development
Plan Funding for the first Project Year is set forth in Section 2.3.3 below.
Development Plan Funding for each of the second and third Project Years shall be
determined by the Parties not later than ninety (90) days prior to the start of
such Project Year. In the event that GI decides in its sole discretion to
provide funding for Development Work for any Project Year after the third
Project Year, Development Plan Funding for such Project Year shall be determined
by the Parties not later than ninety (90) days prior to the start of such
Project Year. Notwithstanding anything to the contrary, GI has no obligation to
provide any funding for Development Work after the third Project Year of the
Development Period or in excess of the amounts set forth in the first sentence
of this Section 2.3.2, unless the Steering Committee recommends and GI approves
that TGC continue its Development Work and, accordingly, that additional funding
for Development Work should be provided.
2.3.3 Development Plan Funding for the first Project Year is set
forth in Schedule 2.3.3. The Development Plan Funding payment for the first
quarter of the first Project Year shall be [*] Dollars ($[*]), representing one-
fourth of the budgeted Development Plan Funding set forth in Schedule 2.3.3,
exclusive of the [*] percent ([*]%) contingency amount set forth in Section
2.3.1, plus [*] Dollars ($[*]), the amount described in Section 2.4.2. Such
amount shall be due and payable, and shall be paid, within ten (10) business
days after the Effective Date. Thereafter, for each Project Year, research
funding payments shall be paid quarterly within ten (10) business days after the
first day of the applicable calendar quarter in equal quarterly installments
based upon budgeted Development Plan Funding for such Project Year as approved
by the Steering Committee. Notwithstanding the previous sentence, after the end
of each calendar quarter, the Parties will review the amount of actual expenses
incurred by TGC in the just-ended calendar quarter and, in the event that the
amount actually spent was less than the Development Plan Funding payment
advanced by GI to TGC for such calendar quarter, the amount not expended shall
be applied as a credit toward the next research funding payment to be made by
GI. In the event that the amount of actual expenses incurred by TGC in the just-
ended calendar quarter was more than the research funding payment for such
calendar quarter but within the budget for the applicable Project Year, such
excess will be paid by GI together with the next scheduled research funding
payment, it being understood that, except as otherwise provided in Section
2.3.5, nothing in this sentence shall require GI to make research funding
payments for any Project Year in excess of the Development Plan Funding for such
Project Year. All funding payments to TGC hereunder shall be made in accordance
with the provisions of Sections 3.2, 3.3 and 3.4.
2.3.4 As provided under Sections 2.3.1 and 2.3.2 above, the
Development Work activities for which GI will provide research funding and the
budgeted funding for such activities for each Project Year after the first
Project Year shall be recommended by the Steering Committee and agreed upon by
GI and TGC not later than ninety (90) days prior to the start of each such
Project Year. In the event that the budgeted Development Plan Funding for any
Project Year has not been agreed upon in advance of the start of such Project
Year, the Responsible Executives of the Parties shall meet to resolve the
matter. In the interim, subject to the limitations set forth in
___________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
12
Section 2.3.2, before resolution of the matter, GI will provide funding payments
for such Project Year quarterly at the times provided in Section 2.33 in amounts
sufficient to fund the activities ongoing from the just- ended Project Year, as
previously approved by the Steering Committee under the Development Plan.
2.3.5 If, despite using Reasonable Commercial Efforts to perform
the activities to be conducted by TGC pursuant to the Development Plan without
incurring expenses in excess of the budgeted amounts therefor (including the [*]
percent ([*]%) contingency amount), TGC determines that it will incur expenses
in the first or second Project Year in excess of the Development Plan Funding
for such Project Year, TGC shall notify GI of the additional amount of
Development Plan Funding required to cover such expenses, and GI shall agree to
modify, through the Steering Committee, the Development Plan and related budget
to either (i) include such expenses for such Project Year, or (ii) relieve TGC
of the obligation to incur such expenses. The Parties acknowledge that, during
any subsequent Project Year, TGC shall not be obligated to incur expenses that
are caused by unexpected circumstances not subject to TGC's control in excess of
the Development Plan Funding for such Project Year, unless TGC otherwise agrees
in writing. Nothing in this Section 2.3.5 shall modify the limitation contained
in the first sentence of Section 2.3.2.
2.4 Other Costs and Expenses.
2.4.1 GI will bear all costs and expenses incurred by GI in
performance of GI's responsibilities under the Development Plan.
2.4.2 The Parties acknowledge and agree that TGC has incurred
certain costs and expenses to conduct research and development of an Agreement
Product [*] prior to the Effective Date. GI shall pay to TGC [*] Dollars
($[*]), the full amount of such costs and expenses incurred by TGC, as part of
the first quarterly payment made pursuant to Section 2.3.3 and the amount so
paid shall be included in the amounts subject to the limits contained in Section
2.3.
2.4.3 In the event that GI exercises the Protein B Option, the
Parties will agree on development activities with respect to Protein B to be
included within the Development Plan and establish an appropriate level of
research and development funding for development of one or more Protein B
Agreement Products. The Development Plan shall be modified appropriately to
include activities to be conducted with respect to development of any such
Protein B Agreement Product. Research and development funding for development of
any Protein B Agreement Product shall be in addition to the amounts specified in
Section 2.3.2, and shall increase the funding amount set forth in clause (i) of
the first sentence of Section 2.3.2 to [*] Dollars ($[*]) and the period of
funding set forth in the second sentence of Section 2.3.2 as appropriate and
agreed to by the Parties.
2.4.4 In the event that the Steering Committee recommends and GI
and TGC agree to the development of a New Product, GI will reimburse TGC for [*]
of each milestone payment paid by TGC pursuant to any Third Party Agreement for
the achievement of a milestone under any such Agreement by the New Product, if,
and only if, TGC has previously paid a milestone payment for achievement of the
same milestone achieved by any previous Protein A
____________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
13
Agreement Product, if the New Product is a Protein A Agreement Product, or any
previous Protein B Agreement Product, if the New Product is a Protein B
Agreement Product.
2.4.5 Except as provided in Section 2.3 and this Section 2.4, TGC
will bear all costs and expenses incurred by TGC in performance of TGC's
responsibilities under the Development Plan as provided in Section 2.2.1 above.
2.5 Additional Technology. During the term of this Agreement, if either GI
or TGC becomes aware of technology relating to an Agreement Product that is held
or otherwise controlled by a Third Party, and GI or TGC, as appropriate,
believes such technology is required in order to develop or commercialize such
Agreement Product ("Additional Technology"), GI or TGC, as appropriate, shall
present a description of such Additional Technology, along with an analysis of
the purported need for such Additional Technology, to the Steering Committee.
The Steering Committee shall review such description and analysis, and, unless
the Steering Committee determines that a technology is not Additional Technology
and should be not licensed or otherwise acquired, the Steering Committee shall
indicate which Party shall take responsibility for licensing or otherwise
acquiring such Additional Technology in accordance with the following
provisions, provided that no Party shall be required to license or acquire any
Additional Technology that such Party reasonably determines is not required to
develop or commercialize such Agreement Product, such reasonable determination
to be based upon review and analysis of such Additional Technology by an
independent patent attorney reasonably acceptable to the other Party and
provided in a written opinion delivered by such patent attorney and provided to
both Parties, and provided further, however, that if the other Party continues
to assert that such Additional Technology is required to develop or
commercialize such Agreement Product, based upon review and analysis of such
Additional Technology by an independent patent attorney chosen by such other
Party reasonably acceptable to the first Party and provided in an opinion
delivered by such patent attorney and provided to both Parties, the Parties
shall select a mutually acceptable independent patent attorney to resolve the
dispute by determining, in an opinion delivered by such patent attorney and
provided to both Parties, whether such Additional Technology is required to
develop or commercialize such Agreement Product.
2.5.1 In the event that Additional Technology is related solely
to, or uniquely required as a consequence of, the Protein A or Protein B
component of an Agreement Product, GI shall initiate negotiations with such
Third Party regarding the terms and conditions of a license or other means of
acquiring rights to such Additional Technology, shall have sole authority to
conduct and conclude such negotiations, [*].
2.5.2 In the event that Additional Technology is related solely
to, or uniquely required as a consequence of, the System component of an
Agreement Product, TGC shall initiate negotiations with such Third Party
regarding the terms and conditions of a license or other means of acquiring
rights to such Additional Technology, shall have sole authority to conduct and
conclude such negotiations [*].
______________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
14
2.5.3 In the event that Additional Technology is not related
solely to, or uniquely required as a consequence of, either the Protein A or
Protein B component of an Agreement Product, or the System component of an
Agreement Product, GI shall initiate negotiations with such Third Party
regarding the terms and conditions of a license or other means of acquiring
rights to such Additional Technology. While GI shall have sole authority to
conduct and conclude such negotiations, GI shall consult with TGC during the
negotiation process and shall not enter into any agreement regarding the
acquisition of such Additional Technology without TGC's written consent, which
shall not be unreasonably withheld. GI shall be responsible for [*] of such
Additional Technology Cost and TGC shall be responsible for [*] of such
Additional Technology Cost. To the extent that consideration to be paid for
Additional Technology is in any form other than royalty payments, TGC may, at
its option, either pay its share of such consideration when and as due or
require GI to pay some or all of TGC's share ("Deferred Amount") in exchange for
permitting GI to deduct from the Transfer Price an amount equal to the Deferred
Amount (plus simple interest on the unpaid amount of such Deferred Amount at the
rate of [*] percent ([*]%) per annum or, if less, the maximum rate permitted
under applicable law, from the date the Deferred Amount would have been paid if
TGC had elected to pay such Deferred Amount when and as due until the date of
such deduction), provided, however, that the total amount that may be deducted
from the Transfer Price in any payment period shall not exceed [*] of the amount
otherwise due and payable to TGC in such payment period.
2.5.4 Any royalties payable by TGC under Section 2.5.2 and [*]
share of any royalties payable under Section 2.5.3 shall be included in
Manufacturing Cost, as such term is defined in the Supply Agreement.
2.5.5 Any Additional Technology licensed or acquired pursuant to
Section 2.5.1 or 2.5.3 may, at GI's option, be licensed to or acquired by TGC,
provided, however, that nothing in this sentence shall alter GI's, and under
Section 2.5.3, TGC's responsibility to pay for the Additional Technology Costs
associated with such license or acquisition as and to the extent provided in
Sections 2.5.1 and 2.5.3. GI may also, at its option, provide for any technology
other than Additional Technology which GI determines in its sole discretion may
be useful or otherwise desirable in connection with the development and
commercialization of Agreement Products to have such technology licensed or
acquired by TGC so long as GI pays the entire cost of acquiring such technology.
2.5.6 Any Additional Technology licensed or acquired pursuant to
Section 2.5.1, 2.5.2 or 2.5.3 above, shall (i) if licensed to or acquired by GI,
be included, if Controlled by GI, within the GI Patent Rights and Know-How
Controlled by GI, or (ii) if licensed to or acquired by TGC, be included, if
Controlled by TGC, within the Licensed Patent Rights and Licensed Know-How. Any
dispute under this Section 2.5 that cannot be resolved in good faith by the
Steering Committee shall be subject to dispute resolution in accordance with
Section 10.2. Notwithstanding anything to the contrary in this Section 2.5, this
section shall not limit or otherwise restrict either Party in procuring
technology for its own account or for its licensing program with respect to
Third Parties.
_________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
15
2.6 Reports; Inspection. Each Party shall maintain, and shall use
Reasonable Commercial Efforts to cause its Contract Manufacturers and Outside
Contractors to maintain, accurate and complete records of all Development Work
and all results of any trials, studies and other investigations conducted under
this Agreement by or on behalf of such Party, its Affiliates, Contract
Manufacturers and Outside Contractors, as applicable. For so long as a Party is
conducting Development Work hereunder, such Party will prepare and submit to the
Steering Committee, on a semi-annual basis, written progress reports summarizing
the current status and progress of Development Work. A Party, or such Party's
authorized representatives (including members of Steering Committee selected by
such Party), may visit those portions of the facilities of the other Party or
their Outside Contractors or Contract Manufacturers where Development Work is
being performed during normal business hours upon reasonable notice without
undue interruption to normal business operations.
2.7 Conduct of Development Work; Subcontracting. Each Party may contract
with one or more Outside Contractors to perform any or all of its
non-manufacturing obligations under the Development Plan, provided that (i)
except as otherwise agreed to by the Steering Committee, each Outside Contractor
shall be approved by the other Party for the proposed work, such approval not to
be unreasonably withheld, (ii) the contracting Party permits the other Party to
review and comment on, and incorporates the reasonable comments of such other
Party in, the drafts of the respective agreements engaging the Outside
Contractors (each an "Outside Contractor Agreement") and (iii) the contracting
Party provides the other Party with a true and accurate copy of each such
Outside Contractor Agreement promptly after execution thereof. TGC agrees that
GI may seek to enforce TGC's remedies under any such Outside Contractor
Agreement directly against such Outside Contractor without first exhausting its
remedies against TGC if the Outside Contractor breaches such Outside Contractor
Agreement so as to cause TGC to become liable to GI for damages due to TGC's
inability to complete its responsibilities under Section 2.2 hereof; provided,
however, that if GI shall seek to exercise such remedies, TGC shall remain
primarily liable and obligated to GI under all provisions of this Agreement.
Further, TGC agrees to use Reasonable Commercial Efforts to include in each
Outside Contractor Agreement the following provisions: (a) a prohibition against
sublicensing by such Outside Contractor of any Patent Rights or Licensed
Know-How licensed to such Outside Contractor by TGC; (b) if TGC provides such
Outside Contractor any Agreement Products, a prohibition against the sale by
such Outside Contractor of such Agreement Products to any Third Party; (c) an
agreement to assign to TGC the rights to all Improvements and New Products, and
all patents and patent applications claiming such Improvements and New Products,
developed by such Outside Contractor in the course of performing the Outside
Contractor Agreement; (d) a prohibition, approved in form and substance by GI,
against manufacturing, having manufactured, supplying, using or selling any
product which generates functional Protein A or Protein B and which is derived
from or embodies, in whole or in part, any intellectual property either (1)
Controlled by TGC or licensed to TGC pursuant to the Third Party Agreements or
(2) Controlled by GI; and (e) a right for TGC to terminate such Outside
Contractor Agreement in the event of a breach of the terms set forth in either
of (a), (b), (c) or (d) above.
2.8 Approval Applications and Regulatory Approvals.
2.8.1 TGC, with appropriate assistance from GI and funding from GI
as and to the extent provided under the Development Plan, will use Reasonable
Commercial Efforts to assemble
16
all Approval Applications relating to the manufacture of any Agreement Product
developed or to be developed under this Agreement or supplied or to be supplied
to GI under the Supply Agreement. The expenses incurred by TGC in assembling
such Approval Applications shall be paid or reimbursed as and to the extent
provided in Section 2.3, as may be modified pursuant to Section 2.4.3.
2.8.2 GI, with appropriate assistance from TGC, will use
Reasonable Commercial Efforts to assemble all Approval Applications needed to
conduct clinical trials with any Agreement Product developed or to be developed
under the Development Agreement or supplied or to be supplied to GI under the
Supply Agreement in accordance with GI's obligations under Section 2.2.2. In
connection with any Approval Application, GI will have a right to reference TGC
Regulatory Documents. The expenses incurred by GI in assembling such Approval
Applications shall be paid in accordance with Section 2.4.1 above.
2.8.3 TGC will use Reasonable Commercial Efforts to obtain and
maintain Regulatory Approval to manufacture Agreement Products for supply to GI
under the Supply Agreement. TGC shall consult in good faith with GI with respect
to Approval Applications necessary to obtain Regulatory Approval to manufacture
such Agreement Products; and GI will cooperate with TGC, at GI's expense and in
accordance with the provisions of Section 2.3, in such manner as TGC may
reasonably request in obtaining such Regulatory Approvals. TGC will promptly
send to GI copies of all Regulatory Approvals (including English translations
thereof, if applicable) and of any other correspondence with any Government
Authority relating to the manufacture of to such Agreement Products.
Notwithstanding the previous sentence, except as provided in Section 8.6.2, TGC
shall have no obligation to provide GI complete copies of TGC Regulatory
Documents, or any correspondence with any Government Authority, which
specifically describe confidential and proprietary features of TGC's facilities
unique to the manufacture of Agreement Products or the manufacturing process
used by TGC to manufacture Agreement Products in bulk pharmaceutical form.
2.8.4 GI will use Reasonable Commercial Efforts to obtain and
maintain Regulatory Approval to market and sell Agreement Products in the Major
Markets and any other country where GI determines in its sole discretion to
market and sell Agreement Products. GI shall consult in good faith with TGC with
respect to Approval Applications necessary to obtain Regulatory Approval to
market and sell Agreement Products in such countries; and TGC will cooperate
with GI, in accordance with the provisions of Section 2.3, in such manner as GI
may reasonably request in obtaining such Regulatory Approvals. In connection
with any such Approval Application or Regulatory Approval, GI shall have a right
to reference TGC Regulatory Documents for purposes of providing Government
Authorities specific descriptions TGC's facilities unique to the manufacture of
Agreement Products or the manufacturing process used by TGC to manufacture
Agreement Products or as otherwise necessary or desirable in connection with any
such Approval Application or Regulatory Approval. GI will promptly send to TGC
copies of all Regulatory Approvals obtained by GI (including English
translations thereof, if applicable), and of any other correspondence with any
Government Authority, relating to any such Regulatory Approval.
2.8.5 In the event that TGC terminates this Agreement under
Section 8.4 due to GI's breach and for the purpose of assisting TGC in
developing products other than Agreement Products developed by the Parties under
this Agreement, GI, at the request and expense of TGC and
17
for a period of six (6) months after the effective date of such termination,
shall cooperate reasonably with TGC or its designee, if applicable, in the
issuance (or reissuance, if appropriate) in the name of TGC or its designee of
all Regulatory Approvals theretofore obtained or held by GI with respect to any
Agreement Product.
2.8.6 GI shall be responsible for filing all reports required to
be filed under Applicable Laws in order to maintain any Regulatory Approvals
granted to GI or its Affiliates or licensees for marketing and sale of any and
all Agreement Products developed under this Agreement and supplied by TGC to GI
under the Supply Agreement, including, without limitation, adverse drug
experience reports. TGC shall cooperate with GI in preparing and filing all such
reports and, upon GI's request, provide GI with any information in TGC's
possession or control which GI deems to be relevant to any such reports.
Notwithstanding the foregoing, to the extent TGC has or receives any information
regarding any adverse drug experience which may be related to the use of any
Agreement Product, TGC shall promptly provide GI with all such information in
accordance with TGC's obligations under Applicable Laws and, when attached
hereto as provided in the following sentence, Exhibit B. Within ninety (90) days
after the Effective Date, the Parties shall determine the procedures to be
followed as between themselves with respect to reporting adverse drug
experiences and shall attach such procedures to this Agreement as Exhibit B,
such procedures to be consistent with each of the Parties' obligations under
Applicable Laws.
2.9 TGC Records and GI Audit Rights. TGC shall keep and maintain complete
and accurate records and books of account in sufficient detail and form so as to
enable verification of the costs and expenses incurred by TGC in conducting the
Development Work under the Development Plan. TGC shall maintain such records and
books of account for a period of not less than three (3) years following the
year to which the records pertain. TGC shall permit such records and books of
account to be examined at TGC's premises only by an independent certified public
accountant selected by GI and acceptable to TGC, such acceptance not to be
unreasonably withheld, provided that such independent accountant may not have
performed services for GI, other than the examination of TGC's records and books
of account relating to the costs and expenses incurred by TGC in conducting the
Development Work under the Development Plan pursuant to this Section 2.9, at any
time within the three (3) years immediately prior to the examination and no more
than one such examination may be conducted by or on behalf of GI in any calendar
year. Each and any such examination shall be conducted during TGC's normal
business hours and only after ten (10) days prior written notice to TGC. If such
audit shows that either Party owes a payment (including reimbursement of any
previously overpaid amount) to the other Party under this Agreement, the Party
owing such payment shall promptly make such payment. The cost of such
examination shall be borne by GI, unless such examination reveals that, as a
result of TGC overstating the costs and expenses incurred by TGC with respect to
the time periods covered by the audit, GI has made an overpayment to TGC with
respect to such time periods of greater than five percent (5%), in which case
TGC shall bear such cost.
18
ARTICLE 3
CONSIDERATION
3.1 Other Payments by GI. In addition to funding of Development Work under
Article 2, and in further consideration of the grant by TGC of the rights and
licenses set forth in Article 4, GI shall pay to TGC the amounts specified below
upon the occurrence of the events specified below:
3.1.1 Five Million Dollars ($5,000,000) within ten (10) business
days after the Effective Date.
3.1.2 Performance-based payments for the first Protein A Agreement
Product to achieve each of the following specified milestones:
(a) [*]
(b) [*]
(c) [*]
(d) [*]
(e) [*]
(f) [*]
GI shall also pay to TGC [*] of the milestone amounts specified in Sections
3.1.2(a) through 3.1.2(f) above at such time as [*]
3.1.3 In order to maintain and exercise the Protein B Option, the
following payments:
(a) [*]
(b) [*]
3.1.4 If GI exercises the Protein B Option, performance-based
payments for the first Protein B Agreement Product to achieve each of the
following specified milestones:
(a) [*]
(b) [*]
(c) [*]
________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
19
(d) [*]
(e) [*]
(f) [*]
GI shall also pay to TGC [*] of the milestone amounts specified in Sections
3.1.4(a) through 3.1.4(f) above at such time as [*].
3.1.5 GI shall also pay to TGC [*].
3.1.6 None of the payments by GI specified in this Section 3.1 may
be applied to or otherwise credited against any other payments which may be due
to TGC under this Agreement. Except as otherwise expressly provided in this
Agreement, each milestone payment shall be made only for the first event meeting
the milestone criteria, regardless of the number of products eventually
developed.
3.2 Taxes and Withholding. All payments under this Agreement will be made
without any deduction or withholding for or on account of any tax unless such
deduction or withholding is required by Applicable Laws. If the paying Party is
so required to deduct or withhold, such Party will (i) promptly notify the other
Party of such requirement, (ii) pay to the relevant authorities the full amount
required to be deducted or withheld promptly upon the earlier of determining
that such deduction or withholding is required or receiving notice that such
amount has been assessed against the other Party, (iii) promptly forward to the
other Party an official receipt (or certified copy) or other documentation
reasonably acceptable to the other Party evidencing such payment to such
authorities.
3.3 Currency. All amounts payable and calculations hereunder shall be in
United States dollars. As applicable, Net Sales of any Person and any expenses
incurred by either Party shall be translated into United States dollars in
accordance with GI's customary and usual translation procedures, consistently
applied. If, due to restrictions or prohibitions imposed by national or
international authority, payments cannot be made as provided in this Article 3,
the Parties shall consult with each other with a view to finding a prompt and
acceptable solution, and GI will deal with such monies as TGC may lawfully
direct at no additional out-of-pocket expense to GI.
3.4 Payments; Late Payments. Each Party shall make all payments due the
other Party under this Agreement by wire transfer of immediately available funds
to such account notified by the receiving Party from time to time to the other
Party in writing in accordance with the provisions of Section 11.6. If any sum
due and payable under this Agreement shall not have been paid on or before the
applicable due date, simple interest shall accrue on the unpaid amount at the
rate of [*] percent ([*]%) per annum or, if less, the maximum rate permitted
under applicable law from the payment due date until the actual date of payment
without prejudice to any other claim or remedy available to the non-paying
Party; provided, however, that no interest shall accrue on any portion of an
unpaid amount which is the subject of a good faith, legitimate dispute. If any
such dispute is
____________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
20
resolved against the paying Party, the date of resolution shall be deemed the
date that payment to the other Party originally was due.
ARTICLE 4
EXCLUSIVITY, GRANT OF RIGHTS AND RELATED COVENANTS
4.1 Exclusivity. It is the intent of the Parties that, during the term of
this Agreement and the Supply Agreement, TGC and GI shall develop Agreement
Products that will be manufactured by TGC and sold by TGC exclusively to GI. In
order to provide GI with assurance regarding such exclusivity, TGC has agreed,
as provided in Section 4.2 below, to grant to GI an exclusive right and license
under certain, but not all, intellectual property Controlled by TGC relating to
Agreement Products. Notwithstanding anything to the contrary, however, no grant
of any right or license is intended, and no grant shall be made, of any right or
license under (i) any intellectual property Controlled by TGC pursuant to the
terms and conditions of any Third Party Agreement, or (ii) any intellectual
property Controlled by TGC under any other agreement with a Third Party relating
to the System component of Agreement Products (the "Excluded Future Agreements")
obtained by TGC after the Effective Date if TGC reasonably determines, with the
consent of GI (such consent not to be unreasonably withheld), that a grant by
TGC of a right and license to GI under such Excluded Future Agreements would
have consequences to TGC substantially similar to the consequences to TGC which
would occur if rights Controlled by TGC under the Third Party Agreements had
been licensed to GI.
4.2 Grant of License by TGC to GI.
4.2.1 Subject to the terms and conditions of this Agreement,
including in part but without limitation GI's obligations set forth in Section
3.1 above, TGC hereby grants to GI a worldwide, exclusive right and license
(except as otherwise set forth on Schedule 4.2.1), with a right to grant
sublicense rights, under the Licensed Patent Rights and the Licensed Know-How to
make, have made, use, have used, offer for sale, lease, market, sell, have sold
and import Agreement Products. The term of such right and license shall commence
on the Effective Date and shall expire on the later of (i) the earlier of (a)
the expiration of the term of the last patent within the Licensed Patent Rights
or (b) a determination by a court or administrative agency of competent
jurisdiction that the last claim in the last patent within the Licensed Patent
Rights is invalid or unenforceable, or (ii) on a country by country basis, ten
(10) years after the First Commercial Sale of an Agreement Product developed
under this Agreement, unless the term of such right and license is earlier
terminated pursuant to the provisions of Article 8. The term "First Commercial
Sale" shall have the meaning set forth in Section 2.2.5 of the Supply Agreement.
4.2.2 During the term of this Agreement and during any period of
the term of the Supply Agreement that extends beyond the term of this Agreement,
GI shall not exercise any of the rights or licenses granted to GI under Section
4.2.1 to make, have made, use, have used, offer for sale, lease, market, sell,
have sold or import any Agreement Product other than an Agreement Product sold
by TGC to GI pursuant to the terms and conditions of the Supply Agreement.
4.3 Covenant by TGC With Respect to Rights Under TGC IP Agreements. During
the term of this Agreement, TGC shall not exercise or sublicense any other
Person to exercise, any
21
rights granted to TGC under any TGC IP Agreement that would be inconsistent with
the rights and licenses granted to GI under this Agreement other than, and only
to the extent necessary, to assist TGC to fulfill TGC's obligations to GI under
the terms and conditions of this Agreement and the Supply Agreement.
4.4 Grant of Option to License by GI to TGC. GI hereby grants to TGC an
option (the "TGC Option") to acquire (i) a worldwide, nonexclusive right and
license under the GI Patent Rights and any Know-How Controlled by GI developed
during the term of this Agreement in the course of performing the Development
Work to make, have made, use, have used, offer for sale, lease, market, sell,
have sold and import Agreement Products; and (ii) a limited right and license to
use in connection with the marketing and sale of any Agreement Product any
product-specific GI Trademark to the extent such mark was used in commerce,
prior to exercise of the TGC Option, in connection with such Agreement Product,
so long as use of such mark will not harm GI and will not cause confusion with
other products of GI or its Affiliates. Notwithstanding the foregoing, under no
circumstances will TGC have any right hereunder to use the name, logo,
trademark, trade name or any part of any of the foregoing used by GI or its
Affiliates in connection with any product or products other than any Agreement
Product. The TGC Option is exercisable only on termination of this Agreement by
GI pursuant to Section 8.3 (Termination at Will) or by TGC pursuant to Section
8.4 (Termination for Cause) and is further subject to the terms and conditions
of this Agreement including, without limitation, payment to GI by TGC of the
consideration set forth in Section 8.6.4 below. The term of such right and
license shall commence on the date of exercise of the TGC Option and shall end
on the later of (a) ten (10) years after the later (1) the date of the first
sale of such Agreement Product by TGC, its Affiliates or any Sublicensee of TGC
and (2) the date of exercise by TGC of the TGC Option, or (b) such time as TGC
is no longer using any such GI Trademark. TGC may exercise the TGC Option by
providing written notification thereof to GI at any time prior to the expiration
of a one hundred eighty (180) day period commencing on the effective date of any
such termination of this Agreement.
4.5 Covenant by GI To Take No Action. Subject to the terms and conditions
of this Agreement and the Supply Agreement, GI hereby agrees that, if any
intellectual property rights Controlled by GI shall be required by TGC, its
Affiliates or Contract Manufacturers to enable TGC, its Affiliates or Contract
Manufacturers to develop and manufacture products for sale exclusively to GI in
accordance with the terms of this Agreement and the Supply Agreement, GI will
take no action of any nature whatsoever during the term of this Agreement under
such intellectual property rights which would prevent or interfere with such
activities. GI also hereby agrees to take no action of any nature whatsoever
during the term of this Agreement under (i) any intellectual property rights
that GI Controls pursuant to the license granted by TGC in Section 4.2.1, or
(ii) any intellectual property rights with respect to which GI has granted TGC
an option pursuant to Section 4.4, to prevent TGC from conducting internal
research so long as such research is not funded by any Third Party and no Third
Party has a right to obtain any rights to any intellectual property created
through such research.
4.6 Improvements and Other Development Activities.
4.6.1 TGC shall promptly disclose to the Steering Committee and to
GI all Improvements and New Products, and all patents and patent applications
claiming such Improvements and New Products, (collectively, "Product
Information") which TGC or its Affiliates
22
Control or conceive of, reduce to practice, make, acquire, license, discover or
invent during the term of this Agreement. GI shall promptly disclose to the
Steering Committee and to TGC all Product Information which GI Controls or
conceives of, reduces to practice, makes, acquires, licenses, discovers or
invents during the term of this Agreement. Each Party hereby represents and
warrants that it has the right to disclose to the other Party all Product
Information which exists as of the Effective Date, and that neither it nor any
of its Affiliates shall enter into any agreement which would restrict its right
to make the disclosures contemplated under this Section 4.6.1.
4.6.2 Unless otherwise agreed by the Parties, within one hundred
eighty (180) days after receipt of any Product Information, the Steering
Committee shall determine whether to recommend that an Improvement be adopted or
that a New Product be developed hereunder. If the Steering Committee determines
that an Improvement should be adopted or that a New Product should be developed
hereunder, the Steering Committee shall recommend whether such adoption or
development should occur in lieu of or in addition to the then- current
activities with respect to existing Agreement Product(s).
4.6.3 If the Steering Committee recommends adoption of an
Improvement or development of a New Product, and if GI and TGC agree upon such
adoption or development and the anticipated cost thereof, the Parties will
modify the Development Plan as necessary. In addition, the Steering Committee
may request that either TGC or GI undertake, and, if so requested, such Party
shall undertake, development activities leading to adoption of such Improvement
or development of such New Product. Such development work shall be (i) conducted
pursuant to a modification of the Development Plan established by the Steering
Committee, and (ii) performed in accordance with parameters for adoption of such
Improvement or development of such New Product consistent with parameters set
forth herein for development of Agreement Products. Development work for an
approved Improvement or New Product shall be supported by appropriate research
funding from GI in such amount as may be agreed to in writing by GI and TGC at
the time of the approval by the Steering Committee. In addition, in the case of
certain New Products, GI shall reimburse TGC for a portion of certain payments
previously made by TGC under any Third Party Agreement, as provided in Section
2.4.4.
4.7 Protein B Option. TGC grants to GI an exclusive option (the "Protein B
Option") to develop, manufacture and sell one or more Protein B Agreement
Products in accordance with and as specifically provided in this Agreement.
4.7.1 The Protein B Option may be exercised by GI at any time
during a period of [*] years commencing on the Effective Date (the "Option
Period"), provided that GI shall have made the payments provided for in Section
3.1.3(a). For so long as the Protein B Option is exercisable, TGC shall not
offer or grant any right or interest to any Person that would be inconsistent
with any right or interest granted to GI pursuant to this Section 4.7.
4.7.2 GI may exercise the Protein B Option at any time during the
Option Period by providing notice thereof to TGC in writing. If GI exercises the
Protein B Option, GI shall pay to TGC the fee set forth in Section 3.1.3(b)
above within the time period specified therein.
______________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
23
4.7.3 Upon exercise of the Protein B Option in accordance with
Section 4.7.2 above, TGC and GI shall promptly agree on development activities
with respect to Protein B to be included within the Development Plan and
establish an appropriate level of research and development funding for
development of one or more Protein B Agreement Products in accordance with
Section 2.4.3 above.
4.8 No Other Rights. This Agreement confers no right, license or interest
by implication, estoppel, or otherwise under any patents, patent applications,
know-how or other intellectual property rights of either Party except as
expressly set forth in this Article 4 and in Article 6 hereof. Each Party hereby
expressly reserves all rights and interests with respect to patents, patent
applications, know-how or other intellectual property rights not expressly
granted to the other Party hereunder.
ARTICLE 5
REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 Representations and Warranties of the Parties Concerning Corporate
Authorizations. Each Party represents and warrants to the other Party that:
(a) Such Party is duly organized and validly existing and in
good standing under the laws of the jurisdiction of its
organization.
(b) Such Party has the full corporate power and is duly
authorized to enter into, execute and deliver this
Agreement, and to carry out and otherwise perform its
obligations thereunder.
(c) This Agreement has been duly executed and delivered by, and
is the legal and valid obligations binding upon such Party
and the entry into, the execution and delivery of, and the
carrying out and other performance of its obligations under
this Agreement by such Party (i) does not conflict with, or
contravene or constitute any default under, any agreement,
instrument or understanding, oral or written, to which it is
a party, including, without limitation its certificate of
incorporation or by-laws, and (ii) does not violate
Applicable Law or any judgment, injunction, order or decree
of any Government Authority having jurisdiction over it.
5.2 Representations, Warranties and Covenants of TGC Concerning Agreement
Product Development. TGC represents and warrants to GI that:
(a) As of the Effective Date, TGC controls, or otherwise has the
right to use, the Licensed Patent Rights, the Licensed Know-
How and the intellectual property rights held by TGC under
the TGC IP Agreements, and such rights, to TGC's knowledge,
are the only intellectual property rights necessary to
manufacture, use, sell and import the System component of
Agreement Products as contemplated by this Agreement and the
Supply Agreement and, further, TGC has disclosed, or from
time to time will disclose, to GI all patent rights and all
Know-How of which TGC is or becomes aware and
24
which, in TGC's reasonable determination, is necessary for
the manufacture, use or sale of Systems as a component of
Agreement Products;
(b) Except as otherwise provided for in this Agreement, TGC
maintains and shall maintain throughout the term of this
Agreement a work force suitably qualified and trained, and
facilities and equipment sufficient, to enable TGC to
perform its obligations as set forth from time to time under
this Agreement;
(c) There are not as of the Effective Date, nor have there been
over the five (5) year period immediately preceding the
Effective Date, any claims, lawsuits, arbitrations, legal or
administrative or regulatory proceedings, charges,
complaints or investigations by any Government Authority
(except for any Government Authority with authority over the
granting of patents and proceedings relating thereto) or
other Third Party threatened, commenced or pending against
TGC or, to TGC's knowledge, its licensors relating to, and
TGC has not received any notice of infringement with respect
to, the Licensed Patent Rights, the Licensed Know-How, the
intellectual property rights held by TGC under the TGC IP
Agreements, or TGC's proprietary System technology or any
product or proposed product utilizing such technology, or
any Agreement Product or proposed Agreement Product,
including TGC's right to manufacture, use or sell the System
component of Agreement Products;
(d) Except as set forth on Schedule 5.2(d), to the best of TGC's
knowledge, as of the Effective Date, the exercise by GI of
the rights and licenses granted to GI by TGC under this
Agreement will not infringe any rights owned or Controlled
by any Third Party;
(e) Except as set forth on Schedule 5.2(e), as of the Effective
Date, TGC is not aware of any patent or patent application
(assuming, in the case of a patent application, that such
application will result in an issued patent containing the
claims in such patent application of which TGC has
knowledge), other than patents or patent applications within
the Licensed Patent Rights or patents or patent applications
licensed to TGC under the Third Party Agreements, that is or
will be required for the manufacture, use or sale of the
System component of Agreement Products, and further TGC will
promptly disclose to GI any knowledge acquired by TGC during
the term of this Agreement relating to any such patent or
patent application;
(f) Except as set forth on Schedule 5.2(f), as of the Effective
Date, TGC is not aware of any Third Party that controls or
has any rights under or with respect to any Know-How
required for the manufacture, use or sale of the System
component of Agreement Products;
(g) Except as set forth on Schedule 5.2(g), as of the Effective
Date, TGC has not granted rights to any Third Party under
the Licensed Patent Rights, the
25
Licensed Know-How, or the intellectual property rights held
by TGC under the TGC IP Agreements that are inconsistent
with the rights granted to GI under this Agreement or the
Supply Agreement; and
(h) As of the Effective Date, TGC Controls or otherwise is
entitled to use worldwide all rights in, to and under the
Licensed Patent Rights and the Licensed Know-How, in all
cases free and clear of any lien, claim, charge, encumbrance
or right of any Third Party.
5.3 Representations and Warranties Specific to TGC IP Agreements. TGC
further represents and warrants to GI that, as of the Effective Date:
(a) No other agreement or understanding, verbal or written,
exists to which TGC is legally bound regarding the
intellectual property rights granted to TGC pursuant to the
TGC IP Agreements;
(b) The TGC IP Agreements, including respective modifications
attached thereto, if any, as previously provided to GI
represent the complete and entire understanding of TGC and,
to the knowledge of TGC, its respective TGC IP Agreement
licensors with respect to the intellectual property rights
granted to TGC pursuant to the TGC IP Agreements;
(c) Except for royalty payments and other fees expressly set
forth in the TGC IP Agreements, all of which payments and
fees shall be payable solely by TGC, no other royalty, fee
or other amount whatsoever is due or will become due to any
Third Party as a result of TGC's exercise of the rights and
licenses granted to TGC under the TGC IP Agreements, or GI's
exercise of the rights and licenses granted to GI pursuant
to the terms of this Agreement, or TGC's or GI's performance
of their respective obligations under this Agreement or the
Supply Agreement, or TGC's sale of Agreement Products to GI
under the Supply Agreement, or GI's use or resale of such
Agreement Products as contemplated by the Supply Agreement;
(d) Neither the exercise by GI of the rights and licenses
granted to GI by TGC under this Agreement, nor the
performance by TGC or GI of their respective obligations
under this Agreement or the Supply Agreement, nor TGC's sale
of Agreement Products to GI under the Supply Agreement, nor
GI's use or resale of such Agreement Products as
contemplated by the Supply Agreement will violate, or cause
TGC to breach TGC's obligations under, any TGC IP Agreement;
and
(e) There are not, nor have there been over the five (5) year
period immediately preceding the Effective Date, any claims,
lawsuits, arbitrations, legal or administrative or
regulatory proceedings, charges, complaints or
investigations by any Government Authority (except for any
Government Authority with authority over the granting of
patents and proceedings relating thereto) or other Third
Party threatened, commenced or pending
26
against either TGC or, to TGC's knowledge, its licensors
relating to the intellectual property rights licensed to
TGC, including TGC's right to use such intellectual property
rights, whether or not Controlled by TGC, pursuant to the
TGC IP Agreements.
5.4 Covenants Regarding TGC IP Agreements. TGC covenants to GI that:
(a) TGC will comply with all terms of each of the TGC IP
Agreements and TGC will be responsible for making all
payments due under the TGC IP Agreements without any
increase in amounts payable hereunder;
(b) TGC will notify GI promptly if TGC becomes aware of any
election by any TGC IP Agreement licensor not to file a
patent application pursuant to such licensor's rights under
its respective TGC IP Agreement and TGC, upon GI's written
request, will exercise TGC's right, if available, to
participate in the filing or prosecution of any such patent
application;
(c) TGC will not terminate, amend or assign, nor by act or
omission permit the termination, amendment or assignment of,
any of the TGC IP Agreements without the prior written
consent of GI, which consent may be granted or withheld in
GI's sole discretion;
(d) TGC will notify GI promptly if TGC receives any notice or
communication suggesting, threatening or stating that TGC
has committed a breach of such TGC IP Agreement or that a
TGC IP Agreement licensor of TGC intends to terminate,
modify, assign or otherwise amend its respective TGC IP
Agreement; and
(e) TGC will take all actions reasonably required to enforce any
rights TGC has with respect to any infringement of any
patent Controlled by TGC pursuant to any Third Party
Agreement or Excluded Future Agreement, which, if continued,
reasonably would be expected to affect the manufacture, use
or sale of an Agreement Product, which actions may include,
but shall not be limited to, instituting, prosecuting and
controlling any action or proceeding with respect to such
infringement.
5.5 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 5, THE
PARTIES MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER
EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING, WITHOUT LIMITATION ANY IMPLIED
WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR
WARRANTY OF NON- INFRINGEMENT.
27
ARTICLE 6
INTELLECTUAL PROPERTY MATTERS
6.1 Ownership of Intellectual Property.
6.1.1 As between the Parties, subject only to the licenses and
covenants set forth in Article 4 above and Section 8.6.2 below, TGC shall (i)
retain all right, title and interest in and to the Licensed Patent Rights and
the Licensed Know-How, and (ii) own all Improvements made by TGC and all
inventions and developments made solely by employees, agents or contractors of
TGC in the course of performance of Development Work pursuant to the Development
Plan, and all patents and patent applications claiming such Improvements,
inventions and developments. For the purpose of clarification, subject only to
the provisions of Section 8.6.2 below, no right, license or interest is granted
by TGC to GI under any intellectual property Controlled by TGC pursuant to the
terms and conditions of any Third Party Agreement or Excluded Future Agreement.
6.1.2 As between the Parties, subject only to the licenses and
covenants set forth in Article 4 above, GI shall (i) retain all right, title and
interest in and to the GI Patent Rights and Know-How Controlled by GI, and (ii)
own all Improvements made by GI and all inventions and developments made solely
by employees, agents or contractors of GI in the course of performance of
Development Work pursuant to the Development Plan, and all patents and patent
applications claiming such Improvements, inventions and developments.
6.1.3 The Parties shall jointly own any Joint Inventions and all
Joint Patents.
6.1.4 Inventorship of inventions shall be determined in accordance
with rules and guidelines regarding inventorship as established under United
States patent law.
6.2 Ownership of Approval Applications and Regulatory Approvals.
6.2.1 Subject to the rights granted to or owned by TGC hereunder,
including without limitation the rights owned by TGC set forth in Section 6.2.2
below, GI shall own all right, title and interest in all Approval Applications
necessary to obtain Regulatory Approvals required for marketing and sale of
Agreement Products or any other activity to be engaged in by GI under this
Agreement or the Supply Agreement (including, for example, remanufacturing of
any Agreement Product from an Agreement Product supplied to GI by TGC under the
Supply Agreement), together with any Regulatory Approval obtained in connection
therewith. Such Approval Applications, together with any Regulatory Approvals
obtained in connection therewith, shall be filed in GI's name and owned by GI.
6.2.2 Subject to the rights granted to or owned by GI hereunder,
including, without limitation, a grant of a right to reference TGC Regulatory
Documents in GI's Approval Applications and Regulatory Approvals for marketing
and sale of Agreement Products, TGC shall own all right, title and interest in
all TGC Regulatory Documents and all Approval Applications filed by TGC which
are necessary to obtain Regulatory Approvals required for manufacture of
Agreement Products by TGC or its Contract Manufacturers, together with any
Regulatory Approval obtained in connection therewith. Such TGC Regulatory
Documents, Approval Applications and Regulatory Approvals shall be filed in
TGC's name and owned by TGC.
28
6.2.3 Each Party shall retain ownership and control of any of its
Confidential Information included in any Approval Application. Notwithstanding
the previous sentence, each Party agrees that it shall not withhold from the
other Party any Confidential Information necessary for the filing, maintenance,
modification or protection of an Approval Application by such other Party.
6.3 Prosecution and Maintenance of Patent Rights; Abandonment.
6.3.1 Each Party, or each Party's designee, shall have the
responsibility to file, prosecute and maintain such Party's solely owned Patent
Rights and shall bear all Patent Costs associated therewith. Each Party shall
provide to the other Party an opportunity to review and comment on the nature
and text of new or pending applications for such Patent Rights worldwide. Each
Party shall consider in good faith any comments from the other Party regarding
steps that might be taken to strengthen patent protection with respect to any
patent within the Patent Rights, and shall conduct discussions with the other
Party on a reasonable basis regarding the patent prosecution strategy for Patent
Rights. Each Party agrees to keep the other Party informed of the course of
patent prosecution or other proceedings relating to such Patent Rights to the
extent known by each Party.
6.3.2 In the event a Party elects, in any country, not to file or
not to continue to prosecute and thereby abandon an application for a patent, or
not to maintain and thereby abandon a patent, within the Patent Rights owned by
such Party or which such Party otherwise has the right to prosecute or to
maintain, such Party shall notify the other Party not less than two (2) months
before any relevant deadline, and thereafter such other Party shall have the
right to pursue, at such other Party's expense and in such other Party's sole
discretion, prosecution of such patent application or maintenance of such issued
patent (provided, however, that with respect to any patent application or patent
licensed to a Party by a Third Party, the other Party shall only have a right to
pursue prosecution or maintenance to the extent permitted in the applicable
agreement with such Third Party).
6.3.3 Each Party shall provide the other Party with a copy of any
communications received by such Party, or any communication which such Party
intends to provide to a Third Party, relating to the preparation, filing,
prosecution and maintenance, including, without limitation the issuance, lapse,
revocation, surrender, invalidation or abandonment, of any patent application or
patent within the Patent Rights under which such Party received a grant of
rights pursuant to the applicable agreement with such Third Party and, in the
case of TGC, any patent application or patent under which TGC received a grant
of rights pursuant to a Third Party Agreement or Excluded Future Agreement. To
the extent a Party is afforded an opportunity by any such licensor to comment
on, or participate in the filing or maintenance of, any such patent application
or patent, such Party shall promptly notify the other Party and discuss such
notifying Party's comments and such notifying Party's participation in such
filing or maintenance with the other Party. Thereafter such notifying Party
shall notify its licensor of the other Party's comments and suggestions relating
to such filing or maintenance of such patent application or patent, and shall
use Reasonable Commercial Efforts to cause such licensor to consider the other
Party's comments and suggestions. Without limiting the foregoing, each Party
hereunder agrees not to abandon any patent or patent application within the
Patent Rights licensed to such Party by a Third Party and, in the case of TGC,
any patent or patent application licensed to TGC pursuant to a Third Party
Agreement or Excluded
29
Future Agreement, for which such Party has responsibility for prosecution and
maintenance without the other Party's prior written consent.
6.4 Prosecution and Maintenance of Joint Patents; Abandonment. The Parties
agree to discuss in good faith and implement a mutually agreeable patent
strategy with respect to all Joint Inventions that may be patentable. With
respect to all Joint Inventions for which the Parties agree patent protection
should be sought, the Parties shall cooperate in the preparation, filing and
prosecution of Joint Patents, and shall discuss and agree on the content and
form of relevant patent applications and any other relevant matters before such
applications are made. Each Party shall consider in good faith any comments from
the other regarding steps to strengthen such Joint Patents.
6.4.1 GI shall be considered the Lead Party as further described
in Section 6.4.3 below for Joint Patents drawn to compositions and methods of
use of Protein A, genetic sequences encoding therefor and derivatives thereof
and for any Joint Patents other than those described in Section 6.4.2, or as
otherwise agreed to by the Parties;
6.4.2 TGC shall be considered the Lead Party as further described
in Section 6.4.3 below for Joint Patents drawn to compositions, methods of
making, methods of use and all other categories of patentable subject matter of
or concerning Systems or as otherwise agreed to by the Parties;
6.4.3 The Lead Party as identified in either Section 6.4.1 or
6.4.2 above shall have the right to file, prosecute and maintain such Joint
Patents worldwide, and the Parties shall bear all Patent Costs associated
therewith equally. The Lead Party shall take no significant steps relating to
Joint Patents without the prior approval of the other Party for so long as the
other Party is paying its share of the Patent Costs relating thereto. In the
event that the Lead Party elects not to prosecute a patent application on a
particular Joint Invention, the other Party may do so at its sole discretion and
expense, and all rights in such Joint Invention and any Joint Patent claiming
such Joint Invention shall be assigned to the other Party. Either Party may
choose at any time not to continue to pay any such prosecution and maintenance
costs with respect to a particular Joint Patent, and shall thereafter assign all
its rights in such Joint Patent to the Party that pays all such costs. Such
assignment shall take place in a timely manner to enable the non-assigning Party
to meet any external requirement concerning prosecution matters and paying
prosecution and maintenance costs. In the event that a Party elects, at any
time, not to participate in the preparation, filing and prosecution of any
patent application covering a Joint Invention, such Party shall provide
reasonable assistance to the other Party, at the expense of such other Party,
with respect to any activities determined by such other Party as necessary to
obtain patent protection for such Joint Invention.
6.5 Enforcement of Patent Rights.
6.5.1 If any patent within the Patent Rights, or any patent
Controlled by TGC pursuant to the terms and conditions of any Third Party
Agreement or Excluded Future Agreement, is or might reasonably be infringed by a
Third Party through the manufacture, use or sale of any product (an
"Infringement"), the Party to this Agreement first having knowledge of such
infringement shall promptly notify the other Party in writing. Such notice shall
set forth the facts of the Infringement in reasonable detail.
30
6.5.2 TGC shall have the first right, but not an obligation, to
institute, prosecute and control, using counsel of TGC's choice, any action or
proceeding with respect to an Infringement of a patent within the Licensed
Patent Rights which, if continued, reasonably would be expected to affect the
manufacture, use or sale of an Agreement Product. To the extent permitted by
Applicable Laws where either (i) TGC has brought suit, or (ii) the patent
alleged to be infringed is owned by a Third Party and TGC is authorized to
permit GI to do so, GI shall have the right, at its own expense, to be
represented in any such action or proceeding by counsel of GI's choice. In the
event that TGC fails to institute and thereafter prosecute an action or
proceeding with respect to such an Infringement within a period of ninety (90)
days after the earlier of (a) the date of the Parties' determination that such
infringement, in the Parties' reasonable judgment, if continued, would affect
materially the manufacture, use or sale of an Agreement Product, or (b) the date
of GI's request to institute such an action or proceeding, GI, to the extent
that TGC is authorized to permit GI to do so, shall have the right, but not the
obligation, to institute and/or prosecute and control an action or proceeding in
its name with respect to such an Infringement by counsel of GI's choice. In the
event that GI institutes any such action or proceeding, TGC agrees to be joined
as a party plaintiff if necessary for GI to institute and prosecute such action
or proceeding, and to give GI reasonable assistance and authority to institute
and prosecute such action or proceeding. In addition, if the patent alleged to
be infringed is owned by a Third Party and TGC does not have authority to
require such Third Party to join as a party plaintiff, TGC agrees to use
Reasonable Commercial Efforts to cause such Third Party to agree to be joined as
a party plaintiff if helpful or necessary for GI to prosecute an action or
proceeding, and to give GI reasonable assistance and authority to institute and
prosecute such action or proceeding.
6.5.3 GI shall have the first right, but not an obligation, to
institute, prosecute and control, using counsel of GI's choice, any action or
proceeding with respect to an Infringement of a patent within the GI Patent
Rights which, if continued, reasonably would be expected to affect the
manufacture, use or sale of an Agreement Product. To the extent permitted by
Applicable Laws where either (i) GI has brought suit, or (ii) the patent alleged
infringed is owned by a Third Party and GI is authorized to permit TGC to do so,
TGC shall have the right, at its own expense, to be represented in any such
action or proceeding by counsel of TGC's choice.
6.5.4 GI shall have the first right, but not an obligation, to
institute and thereafter to prosecute and control any action or proceeding with
respect to an Infringement of a patent within the Joint Patent Rights which, if
continued, reasonably would be expected to affect the manufacture, use or sale
of an Agreement Product. To the extent required by Applicable Laws, in the event
that GI institutes any such action or proceeding, TGC agrees to be joined as a
party plaintiff if necessary for GI to institute and prosecute such action or
proceeding, and to give GI reasonable assistance and authority to institute and
prosecute such action or proceeding. In the event that GI fails to institute and
thereafter prosecute an action or proceeding with respect to such an
Infringement within a period of ninety (90) days after the earlier of (i) the
date of the Parties' determination that such infringement, in the Parties'
reasonable judgment, if continued, would affect materially the manufacture, use
or sale of an Agreement Product, or (ii) the date of TGC's request to institute
such an action or proceeding, TGC shall have the right, but not the obligation,
to institute and/or prosecute and control such an action or proceeding, in its
name with respect to such infringement by counsel of TGC's choice, reasonably
acceptable to GI. To the extent required by Applicable Laws, in the event that
TGC institutes any such action or proceeding, GI agrees to be joined as a party
plaintiff if necessary for TGC to institute and prosecute such action or
proceeding, and to give TGC
31
reasonable assistance and authority to institute and prosecute such action or
proceeding. Each Party, represented by counsel of its choice, shall bear its
costs and expenses in connection with any such action or proceeding.
6.5.5 Unless otherwise required as a result of prior written
agreement, any damages or other monetary awards recovered in an action or
proceeding described in Section 6.5.2, 6.5.3 or 6.5.4 shall be applied first to
the reimbursement of GI and TGC and, in the circumstance where the patent
infringed is owned by a Third Party and an agreement between GI or TGC and such
Third Party requires reimbursement of such Third Party, such Third Party of such
parties' respective out-of-pocket expenses (including reasonable attorneys' fees
and expenses) actually incurred in connection with such infringement action or
proceeding, on a pro rata basis based upon such parties' respective
out-of-pocket expenses, until all such expenses have been recovered. Any
remaining amount of such damages or other monetary awards shall then be applied
against obligations of the parties in such action or proceeding as a result of
written agreements with respect to the patent infringed, and [ *], provided that
any such party either (i) is an owner of the patent alleged infringed, (ii) is
a licensee under such patent, or (iii) controlled the prosecution of such action
or proceeding.
6.6 Settlement with a Third Party. Except as otherwise expressly provided
in Section 6.5 above, a Party may not settle an action or proceeding against an
infringer under Section 6.5 above with respect to an Infringement without the
written consent of the other Party. Such consent shall not be unreasonably
withheld or delayed, but may be withheld if such settlement would materially and
adversely affect the interest of such other Party.
6.7 Infringement of Third Party Rights. The following shall apply in the
event that a Third Party alleges that intellectual property rights owned, held
or otherwise controlled by such Third Party are being infringed or have been
infringed by GI or TGC in performing any activity which such Party is required
or permitted to perform under this Agreement:
6.7.1 As between GI and TGC, subject to TGC's obligations, if any,
pursuant to an agreement with a Third Party in effect prior to the Effective
Date, TGC shall (at its sole expense) defend or settle, in TGC's sole
discretion, any claim in any legal action or proceeding arising from an
allegation by a Third Party that the manufacture, use or sale of an Agreement
Product by GI or TGC infringes a patent owned, held or otherwise controlled by
such Third Party solely with respect to the System component of such Agreement
Product. In addition, TGC shall have the right to take any appropriate step to
initiate and pursue to final resolution any challenge, opposition or other
similar action or proceeding, including, without limitation interference
proceedings, relating to a patent application or patent owned, held or otherwise
controlled by a Third Party solely with respect to the System component of an
Agreement Product. TGC and GI shall consult with each other concerning strategy,
approaches and the consequences of approaches that may be taken under this
Section 6.7.1. GI shall provide all reasonable assistance requested by TGC in
connection with any such action or proceeding, provided however that TGC shall
reimburse GI for out-of-pocket expenses actually incurred by GI in providing
such assistance.
_____________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
32
6.7.2 As between GI and TGC, subject to GI's obligations, if any,
pursuant to an agreement with a Third Party in effect prior to the Effective
Date, GI shall (at its sole expense) defend or settle, in GI's sole discretion,
any claim in any legal action or proceeding arising from an allegation by a
Third Party that the manufacture, use or sale of an Agreement Product by GI or
TGC infringes a patent owned, held or otherwise controlled by such Third Party
solely with respect to the Protein A component of such Agreement Product or the
Protein B component of such Agreement Product. In addition, GI shall have the
right to take appropriate steps to initiate and pursue to final resolution any
challenge, opposition or other similar action or proceeding, including, without
limitation interference proceedings, relating to a patent application or patent
owned, held or otherwise controlled by a Third Party solely with respect to the
Protein A component of an Agreement Product or the Protein B component of an
Agreement Product. TGC and GI shall consult with each other concerning strategy,
approaches and the consequences of approaches that may be taken under this
Section 6.7.2. TGC shall provide all reasonable assistance requested by GI in
connection with any such action or proceeding, provided however that GI shall
reimburse TGC for out-of-pocket expenses actually incurred by TGC in providing
such assistance.
6.7.3 As between GI and TGC, GI shall defend or, after
consultation with TGC as set forth in this Section 6.7.3 below, settle any legal
action or proceeding arising from an allegation by a Third Party that the
manufacture, use or sale of an Agreement Product by GI or TGC infringes a patent
owned, held or otherwise controlled by such Third Party with respect to any
claim other than as provided under Section 6.7.1 or Section 6.7.2 above. In the
event that a legal action or proceeding otherwise under this Section 6.7.3 also
includes a claim under Section 6.7.1, TGC may, in TGC's sole discretion, at any
time, settle the claim under Section 6.7.1 independently. In the event that a
legal action or proceeding otherwise under this Section 6.7.3 also includes a
claim under Section 6.7.2 GI may, in GI's sole discretion, at any time, settle
the claim under Section 6.7.2 independently. In addition, GI shall have the
right to take appropriate steps to initiate and pursue any challenge, opposition
or other similar actions or proceedings, including, without limitation
interference proceedings, relating to a patent application or patent owned, held
or otherwise controlled by a Third Party with respect to any matter other than
as provided under Section 6.7.1 or Section 6.7.2 above. TGC and GI shall consult
with each other concerning strategy, approaches and the consequences of
approaches to be taken pursuant to this Section 6.7.3. GI shall not settle or
otherwise finally resolve any legal action or proceeding under this Section
6.7.3 without consulting with TGC and obtaining the written consent of TGC, such
consent not to be unreasonably withheld. TGC shall provide all reasonable
assistance requested by GI in connection with any such action or proceeding. Any
and all costs and expenses incurred by either Party under this Section 6.7.3, as
well as any damages or settlement amounts, shall be shared by the Parties as
provided in regard to the sharing of Additional Technology Cost in Section
2.5.3.
6.7.4 The rights granted to TGC and GI, respectively, under this
Section 6.7 to settle certain legal actions or proceedings shall not create any
right in TGC or GI to grant any right in or to any Agreement Product, any
Licensed Patent Right or any License Know- How, provided that this sentence
shall not limit any rights TGC or GI may possess independently of this Section
6.7.
6.8 Third Party Patents. If during the term of this Agreement TGC
determines that a patent owned or otherwise controlled by a Third Party with
respect to the Protein A or Protein B component of any Agreement Product
developed or in development under the Development Plan
33
may be infringed by any activity of TGC under this Agreement or under the Supply
Agreement, TGC shall promptly notify GI of such possible infringement. Nothing
in this Section 6.8 shall require TGC to conduct patent searches or otherwise
seek to determine the existence of any such infringement. If, in a written
opinion of outside patent counsel selected by TGC with the consent of GI, such
consent not to be unreasonably withheld, any patent (a "Blocking Patent") owned
or otherwise controlled by a Third Party with respect to the Protein A or
Protein B component of any Agreement Product developed or in development under
the Development Plan precludes substantially all of TGC's activities under this
Agreement or the Supply Agreement or both, or otherwise makes the development of
Agreement Products under this Agreement or the supply of Agreement Products by
TGC to GI under the Supply Agreement no longer technically or commercially
viable (a "Blockage"), either Party may terminate this Agreement and such
termination shall be treated as a termination for commercial non-viability by GI
pursuant to Section 8.2; provided, however, that TGC may not terminate this
Agreement under the provisions of this Section 6.8 if GI has agreed to modify
the Development Plan to eliminate such Blockage or if, and for so long as, GI is
negotiating in good faith to obtain a license under such Blocking Patent which
would eliminate such situation or if GI is actively contesting through
litigation, patent office action or otherwise the validity or enforceability of
such Blocking Patent; provided, further, however, that nothing contained in this
Section 6.8 shall limit or modify in any way GI's indemnification obligation
under Section 9.1(v).
6.9 Trademarks.
6.9.1 GI shall at its own expense select, register and maintain
the trademark(s) used by GI, its Affiliates and Sublicensees (the "GI
Trademarks") in connection with Agreement Products. TGC shall have no rights in
respect of GI Trademarks, except as expressly provided in Section 4.4.
6.9.2 TGC agrees to give GI prompt written notice of any
unlicensed use by Third Parties of GI Trademarks of which TGC has knowledge.
6.9.3 GI shall mark all Agreement Product marketed and sold by GI,
its Affiliates and Sublicensees with issued patent numbers identifying patents
covering such Agreement Products and, in addition, shall, to the extent
permitted by Applicable Law, state on labeling and promotional materials for any
Agreement Product that such Agreement Product was developed together with TGC
under an agreement with TGC and, if applicable, partially manufactured by TGC.
Any such statement and any use of any of TGC's trademarks and logos in
connection therewith shall, in each case, be in commercially reasonable
compliance with TGC's patent marking and trademark usage policies as provided by
TGC to GI.
ARTICLE 7
CONFIDENTIALITY
7.1 Confidentiality; Exceptions. Except as otherwise provided in the this
Agreement or the Supply Agreement, the Parties agree that, for the term of this
Agreement and for five (5) years thereafter, all non-public, proprietary or
"confidential" marked invention disclosures, know-how, data, and technical,
financial and other information of any nature whatsoever, including, without
34
limitation all discussions and information exchanged between the Parties
pursuant to a certain nondisclosure agreement entered into by the Parties dated
September, 27, 1998 (collectively, "Confidential Information"), disclosed or
submitted, either orally or in writing (including, without limitation by
electronic means) or through observation, by one Party (the "Disclosing Party")
to the other Party (the "Receiving Party") hereunder shall be received and
maintained by the Receiving Party in strict confidence, shall not be used for
any purpose other than the purposes expressly permitted by this Agreement and
the Supply Agreement, and shall not be disclosed to any Third Party (including,
without limitation in connection with any publications, presentations or other
disclosures). Notwithstanding the foregoing, the Receiving Party may, subject to
the provisions of this Agreement and the Supply Agreement, disclose the
Disclosing Party's Confidential Information to those of its and its Affiliates'
or its Sublicensees' directors, officers, employees, agents, consultants and
clinical investigators that have a need to know such Confidential Information to
achieve the purposes of this Agreement and the Supply Agreement; provided,
however, that such Party shall ensure that its and its Affiliates' or
Sublicensees' directors, officers, employees, agents, consultants or clinical
investigators to whom disclosure is to be made are bound by, and take reasonable
efforts to ensure compliance with, the confidentiality terms hereof. Each Party
will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information. Confidential Information belongs to
and shall remain the property of the Disclosing Party. The provisions of this
Article 7 shall not apply to any information which can be shown by the Receiving
Party:
7.1.1 To have been known to or in the possession of the Receiving
Party prior to the date of its actual receipt from the Disclosing Party;
7.1.2 To be or to have become readily available to the public
other than through any act or omission of the Receiving Party in breach of this
Agreement or the Supply Agreement or any other agreement between the Parties;
7.1.3 To have been disclosed to the Receiving Party, other than
under an obligation of confidentiality, by a Third Party which had no obligation
to the Disclosing Party not to disclose such information to others; or
7.1.4 To have been subsequently independently developed by the
Receiving Party without use of the Confidential Information as demonstrated by
competent written records.
7.2 Authorized Disclosure. Each Party may disclose Confidential
Information hereunder solely to the extent such disclosure is reasonably
necessary in connection with submissions to any Government Authority for the
purposes of this Agreement or the Supply Agreement or in filing or prosecuting
patent applications contemplated under this Agreement or the Supply Agreement,
prosecuting or defending litigation, complying with Applicable Laws or
conducting Development Work for the purposes expressly permitted by this
Agreement or the Supply Agreement; provided that in the event of any such
disclosure of the Disclosing Party's Confidential Information by the Receiving
Party, the Receiving Party will, except where impracticable, give reasonable
advance notice to the Disclosing Party of such disclosure requirement (so that
the Disclosing Party may seek a protective order and or other appropriate remedy
or waive compliance with the confidentiality provisions of this Article 7) and
will use its reasonable efforts to secure confidential treatment of such
Confidential Information required to be disclosed. Notwithstanding the above, GI
may
35
disclose preclinical and clinical data and results relating to Agreement
Products to qualified medical professionals for the limited purposes of
marketing such products and conducting medical education initiatives reasonably
designed to increase sales of products.
7.3 Return of Confidential Information. The Receiving Party shall keep
Confidential Information belonging to the Disclosing Party in appropriately
secure locations. Upon the expiration or termination of this Agreement, any and
all Confidential Information possessed in tangible form by a Receiving Party,
its Affiliates or Sublicensees, or its or any of their officers, directors,
employees, agents, consultants or clinical investigators and belonging to the
Disclosing Party, shall, upon written request, be immediately returned to the
Disclosing Party (or destroyed if so requested) and not retained by the
Receiving Party, its Affiliates or Sublicensees, or any of their officers,
directors, employees, agents, consultants or clinical investigators; provided
however that a Party may retain one (1) copy of any Confidential Information in
an appropriately secure location, which by Applicable Laws it must retain, for
so long as such Applicable Laws require such retention but thereafter shall
dispose of such retained Confidential Information in accordance with Applicable
Laws or this Section 7.3.
7.4 Publications and Announcements. Except as otherwise permitted under
this Agreement or the Supply Agreement or as required by law, regulation, or
court order, each Party agrees not to publish any Confidential Information
received from the other Party. Except as required by law, regulation or court
order, GI and TGC each agree that without obtaining the other Party's prior
written approval for any publication or any presentation, which shall not be
unreasonably withheld, neither Party shall publish or present (i) any
Confidential Information generated by that Party and related to the development
or commercialization of Agreement Products, or (ii) the results of any clinical
trial studies or non- clinical studies or investigations carried out by that
Party related to the development of Agreement Products. At least thirty (30)
days prior to any such publication or presentation, the Party proposing to
publish or present shall provide the other Party a copy of the proposed
abstract, manuscript or presentation (including, without limitation information
to be presented verbally) for review. The other Party shall respond in writing
within such time period with either approval of the proposed material or a
specific statement of (a) concern based upon the need to seek patent protection,
(b) concern regarding competitive disadvantage arising from the proposal, or (c)
concern regarding the timing and circumstances of such disclosure in light of
such Party's business. In the event that the other Party has concerns about
disclosure of Confidential Information, the Party proposing to publish agrees to
provide such other Party any additional information relating to the proposed
disclosure, as reasonably requested by such other Party. In the event of concern
relating to patent protection, the Party proposing to publish agrees not to
submit such abstract or manuscript for publication or to make such presentation
until the other Party has had a reasonable period of time to seek patent
protection for any material in such publication or presentation which it
believes is patentable or to resolve any other issues, such period not to exceed
sixty (60) additional days. In the event of concern regarding competitive
disadvantage or the timing and other circumstances relevant to the disclosure,
the Parties will negotiate in good faith to attempt to arrive at a compromise to
permit the disclosing Party an opportunity to publish or present the disclosure
within a reasonable period of time. The Party proposing to publish also agrees
to delete from any such abstract or manuscript or presentation any Confidential
Information of the other Party that such other Party reasonably believes has
commercial value based upon the secrecy of such information. Once approval for a
publication or presentation has been granted, the relevant Party shall be
entitled to use information contained in
36
such publication or presentation after the date of its publication or
presentation without seeking further approval. It is understood that general
comments made by a Party relating to the relationship between GI and TGC
established by this Agreement or the Supply Agreement, including, for example,
general comments made in response to inquiries at professional meetings and
other similar circumstances, are not intended to be restricted by the provisions
of this Article 7 provided that such information has been disclosed to the
public previously or cleared for such disclosure by the other Party. It is
understood further that Confidential Information may be disclosed by TGC to
Third Parties bound by non-disclosure agreements to the extent such Confidential
Information (1) relates to System technology generally and is not specific to
the Agreement Products and (2) is disclosed in relation to matters outside the
Parties' collaboration efforts with respect to Agreement Products. Prior to any
such disclosure, TGC will provide such disclosures to GI for GI's approval which
shall not be unreasonably withheld.
ARTICLE 8
TERM AND TERMINATION
8.1 Term.
8.1.1 This Agreement shall commence as of the Effective Date and
shall continue in full force and effect until the term of the right and license
granted by TGC to GI pursuant to Section 4.2.1 has expired. Upon expiration of
the term of the right and license granted by TGC to GI pursuant to Section
4.2.1, the term of this Agreement will expire.
8.1.2 Notwithstanding the provisions of Section 8.1.1 above, this
Agreement may be terminated prior to expiration in accordance with the terms and
conditions of this Article 8.
8.2 Termination for Technical or Commercial Non-Viability. During the
Development Period, GI may terminate this Agreement upon not less than one
hundred eighty (180) days' prior written notice to TGC, if in GI's reasonably
exercised judgment, based on failure to meet safety or technical criteria set
out in the Development Plan, GI considers that further development of Agreement
Products is not technically or commercially viable.
8.3 Termination at Will.
8.3.1 GI may terminate this Agreement at any time in GI's sole
discretion, at any time from and after the first anniversary of the Effective
Date, upon not less than one hundred eighty (180) days' prior written notice to
TGC.
8.3.2 In the event that GI seeks to terminate this Agreement as
provided under Section 8.3.1, GI agrees that notwithstanding any other condition
or provision to the contrary under this Article 8, GI will grant rights to TGC
as provided under Section 8.6.4, such grant to be effective as of the effective
date of GI's termination of this Agreement under Section 8.3.1.
8.4 Termination for Cause. Subject to Section 10.2 below, if either Party
commits a material breach of this Agreement or the Supply Agreement at any time,
which breach is not cured within thirty (30) days in the case of a breach
consisting of an undisputed nonpayment of money, or ninety (90) days in the case
of any other material breach, after written notice from the non-
37
breaching Party specifying the breach, or if such breach is not susceptible of
cure within such period, the breaching Party is not making diligent good faith
efforts to cure such breach, the non-breaching Party shall have the right to
terminate this Agreement and the Supply Agreement by written notice. The Parties
acknowledge and agree that failure to exercise any right or option, or to take
any action expressly within the discretion of a Party shall not be deemed to be
a material breach hereunder.
8.5 Termination for Insolvency. To the extent permitted by Applicable
Laws, either Party may terminate this Agreement or the Supply Agreement upon
written notice to the other Party on or after the occurrence of any of the
following events: (i) the appointment of a trustee, receiver or custodian for
all or substantially all of the property of the other Party, or for any lesser
portion of such property, if the result materially and adversely affects the
ability of the other Party to fulfill its obligations hereunder or thereunder,
which appointment is not dismissed within sixty (60) days, (ii) the
determination by a court or tribunal of competent jurisdiction that the other
Party is insolvent such that a Party's liabilities exceed the fair market value
of its assets, (iii) the filing of a petition for relief in bankruptcy by the
other Party on its own behalf, or the filing of any such petition against the
other Party if the proceeding is not dismissed or withdrawn within sixty (60)
days thereafter, (iv) an assignment by the other Party for the benefit of
creditors, or (v) the dissolution or liquidation of the other Party. All rights
and licenses granted under or pursuant to this Agreement by one Party to the
other Party are, and shall otherwise be deemed to be, for the purposes of
Section 365(n) of the Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101(35A) of the Bankruptcy Code. The Parties
agree that both Parties, as a licensees of such rights and licenses, shall
retain and may fully exercise all of their rights and elections under the
Bankruptcy Code.
8.6 Rights on Termination.
8.6.1 In the event that GI terminates this Agreement under Section
8.2 (Termination for Technical or Commercial Non-Viability) or Section 8.3
(Termination at Will), or in the event that TGC terminates this Agreement under
Section 8.4 (Termination for Cause), all rights and licenses granted to GI
hereunder, and all rights granted to GI under the Supply Agreement, shall
terminate and revert to TGC. Thereafter, GI shall have no further right or
interest in, to or under any intellectual property of TGC pursuant to this
Agreement or the Supply Agreement and, except as provided in Sections 4.4 and
8.6.4 with respect to TGC's rights under certain circumstances to obtain certain
licenses from GI, TGC shall have no right or interest in, to or under, or with
respect to, any intellectual property of GI pursuant to this Agreement or the
Supply Agreement and, except as provided in Sections 4.4 and 8.6.4 with respect
to TGC's rights under certain circumstances to obtain certain licenses from GI,
TGC shall have no right or interest in, to or under, or with respect to, any
intellectual property of GI pursuant to this Agreement or the Supply Agreement.
8.6.2 In the event that GI terminates this Agreement pursuant to
Section 8.4 (Termination for Cause) or Section 8.5 (Termination for Insolvency)
above, TGC shall be deemed to have granted to GI an irrevocable exclusive
worldwide right and license (except as otherwise set forth on Schedule 4.2.1)
under the Licensed Patent Rights and the Licensed Know-How and all intellectual
property Controlled by TGC under the Third Party Agreements and the Excluded
Future Agreements, as of the date of such termination, to make, have made, use,
have used, sell, offer for sale, have sold, lease, market and import Agreement
Products subject to GI assuming all post-
38
termination obligations of TGC concerning payments arising out of the grant of
such right and license to GI and GI's exercise of such right and license with
respect to Additional Technology and all intellectual property Controlled by TGC
under the Third Party Agreements and the Excluded Future Agreements and, in the
case of a termination due to Section 8.5 (Termination for Insolvency) only, to
payment by GI to TGC of a royalty of [ *] Net Sales of any Agreement Product by
GI, its Affiliates and licensees after the effective date of termination of this
Agreement until [*]. The term "First Commercial Sale" shall have the meaning set
forth in Section 2.2.5 of the Supply Agreement. GI shall have the right to
offset GI's reasonable damages in connection with such breach, as determined by
an independent third party auditor, against any royalty payments made to TGC
pursuant to the foregoing [*] royalty. TGC shall reasonably assist GI in the
transfer of the manufacturing of the Agreement Products, including the transfer
of useful biomaterials (e.g., cell lines) and shall provide GI with copies of
all written or other tangible forms of recorded Licensed Know-How relating to
the manufacturing processes for Agreement Products (including, without
limitation, copies of any and all Regulatory Documents or other correspondence
with any Government Authority previously not provided by TGC to GI pursuant to
the provisions of the final sentence of Section 2.8.3). TGC expressly
acknowledges and agrees that damages may be an inadequate remedy for breach by
TGC of the provision of the previous sentence and that GI shall be entitled to
seek injunctive relief to enforce the provisions thereof. Upon expiration of
GI's obligation to pay to TGC royalties under this Section 8.6.2, GI shall have
a paid-up, irrevocable, worldwide, nonexclusive right and license under the
Licensed Know-How granted by TGC to GI herein as of such expiration date to
make, have made, use and sell Agreement Products.
8.6.3 In the event that GI terminates this Agreement pursuant to
Section 8.2 (Termination for Technical or Commercial Non-Viability) or Section
8.3 (Termination at Will) above, in addition to any liability or obligation
accrued as of the effective date of such termination, GI shall reimburse TGC for
TGC's actual costs associated with terminating or, if required, completing any
agreed upon pre-clinical study in progress as of the effective date of such
termination and other noncancellable activities and commitments pursuant to the
Development Plan, provided that TGC shall use Reasonable Commercial Efforts to
reduce or mitigate such costs by any commercially reasonable means.
8.6.4 In the event that GI terminates this Agreement under Section
8.3 (Termination at Will) or TGC terminates this Agreement under Section 8.4
(Termination for Cause), and TGC exercises its rights under Section 4.4 to
obtain a right and license under the GI Patent Rights, TGC shall assume all
post-termination obligations of GI concerning payments arising out of the grant
of such right and license to TGC and TGC's exercise of such right and license
with respect to Additional Technology and shall pay to GI the amounts specified
below upon the occurrence of the events specified below:
(a) [*]
______________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
39
(b) [*]
(c) [*]
(d) [*]
8.6.5 In the event that this Agreement expires under Section 8.1.1
(expiration), GI shall have an irrevocable, payment-free, worldwide,
nonexclusive right and license under the Licensed Know-How existing as of the
date of such expiration to make, have made, use, have used, offer for sale,
lease, market, sell, have sold and import Agreement Products; provided that the
term of such nonexclusive right and license shall expire upon the earlier of (i)
the date of expiration of the Supply Agreement pursuant to a written [*] notice
given by GI to TGC under Section 11.1.1 of the Supply Agreement, or (ii)
termination of the Supply Agreement by GI pursuant to Section 11.2 (Termination
at Will) or by TGC pursuant to Section 11.3 (Termination for Cause).
8.6.6 Except as otherwise provided in this Section 8.6.5 and
except as otherwise required to effect the other provisions of this Article 8,
in the event this Agreement is terminated for any reason, (i) except as
otherwise expressly provided in this Agreement, all rights and obligations of
the Parties under this Agreement, shall terminate; (ii) GI shall surrender to
TGC, or, at TGC's sole option, GI shall destroy and provide TGC with a
certificate signed by a Responsible Executive of GI attesting to the destruction
of, all copies of any Licensed Know-How or other Confidential Information
provided by TGC hereunder; and (iii) TGC shall surrender to GI, or, at GI's sole
option, TGC shall destroy and provide GI with a certificate signed by a
Responsible Executive of TGC attesting to the destruction of, all copies of any
Confidential Information provided by GI hereunder.
8.7 Accrued Rights. Termination, relinquishment or expiration of this
Agreement for any reason shall be without prejudice to any right which shall
have accrued to the benefit of either Party prior to such termination,
relinquishment or expiration, including damages arising from any breach under
this Agreement or the Supply Agreement. Such termination, relinquishment or
expiration shall not relieve either Party from obligations which are expressly
indicated to survive termination or expiration of this Agreement or the Supply
Agreement.
8.8 Survival. The following articles and sections of this Agreement shall
survive expiration of this Agreement pursuant to Section 8.1.1 or termination of
this Agreement for any reason: Articles 7, 9, 10, and 11, and Sections 6.1, 6.2,
6.4, 8.6, 8.7 and 8.8.
ARTICLE 9
INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY
9.1 Indemnification by GI. Except for any actions or liabilities arising
out of infringement of Third Party patent rights pursuant to Section 6.7.1
hereof, GI hereby agrees to save, defend, and hold TGC, its Affiliates and their
officers, directors, employees and agents harmless from and against any and all
losses, damages, liabilities, costs and expenses, including reasonable
attorneys' fees and expenses that arise in connection therewith, (collectively,
"Losses") resulting from or arising out of: (i) the storage of Agreement
Products or the conversion of Agreement Product from bulk to finished form,
after the date of delivery of such Agreement Products to GI; or (ii) the
______________________
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission.
The omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
40
labeling, marketing, promotion, distribution and sale of Agreement Products by
GI, its affiliates or licensees (in regard to (i) and (ii), except to the extent
caused by the negligence or willful misconduct of, or failure to comply with
Applicable Laws or breach of this Agreement by, TGC or its Affiliates, Outside
Contractors, Contract Manufacturers (other than GI or an Affiliate of GI), and
its or their directors, officers, agents, employees or consultants, and except
to the extent such Losses result from or arise out of any act or omission for
which TGC is found to have an indemnification obligation pursuant to Section 9.2
of this Agreement); or (iii) the negligence or willful misconduct of GI or its
Affiliates, licensees or Sublicensees, and its or their directors, officers,
agents, employees, or consultants or clinical investigators; or (iv) the
material breach by GI of any representation, warranty, covenant or other
provision of this Agreement; or (v) any of TGC's or GI's activities under this
Agreement or the Supply Agreement that infringe any patent owned or otherwise
controlled by a Third Party with respect to the Protein A or Protein B component
of any Agreement Product. Notwithstanding the above, in the event that Losses
arise in connection with an inherent defect in a Agreement Product which is not
the direct and proximate cause of either Party, [*].
9.2 Indemnification by TGC. Except for any actions or liabilities arising
out of infringement of Third Party patent rights pursuant to Section 6.7.2
hereof, TGC hereby agrees to save, defend and hold GI, its Affiliates and their
officers, directors, employees and agents harmless from and against any and all
Losses resulting from or arising out of (i) the manufacture, use, or consumption
of Agreement Products, or the storage of Agreement Products prior to the date of
delivery thereof to GI (including, without limitation for any breach of the
warranty in Section 2.8 of the Supply Agreement), except to the extent caused by
the negligence or willful misconduct of, or failure to comply with Applicable
Laws or breach of terms of this Agreement by, GI or its Affiliates, licensees or
Sublicensees and its or their directors, officers, agents, employees,
consultants or clinical investigators, or (ii) the negligence or intentional
misconduct of TGC, or its Affiliates, Outside Contractors and Contract
Manufacturers (other than GI or an Affiliate of GI), and its or their directors,
officers, agents, employees or consultants, or (iii) the material breach by TGC
of any representation, warranty, covenant or other provision of this Agreement,
or (iv) any adverse affect on GI as a result of any breach by TGC of any TGC IP
Agreement, or (v) any of GI's or TGC's activities under this Agreement or the
Supply Agreement (including the sale by GI, its Affiliates or its licensees of
Agreement Products supplied by TGC to GI) that infringe any patent owned or
otherwise controlled by a Third Party with respect to the component of any
Agreement Product which consists of [ *] used to deliver a gene or other genetic
material. Notwithstanding the above, in the event that Losses arise in
connection with an inherent defect in an Agreement Product which is not the
direct and proximate cause of either Party, [*].
9.3 Indemnification Procedure.
9.3.1 Each indemnified Party (the "Indemnitee") agrees to give the
indemnifying Party (the "Indemnitor") prompt written notice of any Losses or
discovery of fact upon which
- ---------------------
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
41
the Indemnitee intends to base a request for indemnification. Notwithstanding
the foregoing, the failure to give timely notice to the Indemnitor shall not
release the Indemnitor from any liability to the Indemnitee to the extent the
Indemnitor is not prejudiced thereby.
9.3.2 The Indemnitee shall furnish promptly to the Indemnitor copies
of all papers and official documents in the Indemnitee's possession or control
which relate to any Losses; provided, however, that if the Indemnitee defends or
participates in the defense of any Losses, then the Indemnitor shall also
provide such papers and documents to the Indemnitee. The Indemnitee shall
cooperate with the Indemnitor in providing witnesses and records necessary in
the defense against any Losses.
9.3.3 The Indemnitor shall have the right, by prompt notice to the
Indemnitee, to assume direction and control of the defense of any Third Party
claim forming the basis of such Losses, with counsel reasonably acceptable to
the Indemnitee and at the sole cost of the Indemnitor, so long as (i) the
Indemnitor shall promptly notify the Indemnitee in writing (but in no event more
than thirty (30) days after the Indemnitor's receipt of notice of the claim)
that the Indemnitor intends to indemnify the Indemnitee from and against any
Losses the Indemnitee may suffer arising out of the claim absent the development
of facts that give the Indemnitor the right to claim indemnification from the
Indemnitee and (ii) the Indemnitor diligently pursues the defense of the claim.
9.3.4 If the Indemnitor assumes the defense of the claim as provided
in Section 9.3.3 above or Section 9.3.5 below the Indemnitee may participate in
such defense with the Indemnitee's own counsel who shall be retained, at the
Indemnitee's sole cost and expense; provided, however, that neither the
Indemnitee nor the Indemnitor shall consent to the entry of any judgment or
enter into any settlement with respect to the claim without the prior written
consent of the other Party, which consent shall not be unreasonably withheld or
delayed. If the Indemnitee withholds consent in respect of a judgment or
settlement involving only the payment of money by the Indemnitor and which would
not involve any stipulation or admission of liability or result in the
Indemnitee becoming subject to injunctive relief or other relief, the Indemnitor
shall have the right, upon notice to the Indemnitee within five (5) days of
receipt of the Indemnitee's written denial of consent, to pay to the Indemnitee,
or to a trust for its or the Third Party's benefit, as shall be established at
trial or by settlement, the full amount of the Indemnitor's obligation under
Section 9.1 or Section 9.2, as applicable, with respect to such proposed
judgment or settlement, including all interest, costs or other charges relating
thereto, together with all attorneys' fees and expenses incurred to such date
for which the Indemnitor is obligated under this Agreement, if any, at which
time the Indemnitor's rights and obligations with respect to the claim shall
cease.
9.3.5 If the Indemnitor does not so assume the defense of such claim,
the Indemnitee may conduct such defense with counsel of the Indemnitee's choice
but may not settle such case without the written consent of the Indemnitor, such
consent not to be unreasonably withheld or delayed. In addition, the Indemnitor
shall have the right to assume control of the defense, at its own expense, at
any time upon five (5) days' prior notice to the Indemnitee.
9.3.6 Except as provided in Section 9.3.5 above, the Indemnitor shall
not be liable for any settlement or other disposition of a Loss by the
Indemnitee which is reached without the written consent of the Indemnitor.
42
9.3.7 Except as otherwise provided in this Section 9.3, the portion of
costs and expenses, including reasonable fees and expenses of counsel, incurred
by any Indemnitee under Section 9.3.5 in connection with any claim corresponding
to the Indemnitor's obligation under Section 9.1 or Section 9.2, as applicable,
shall be reimbursed on a calendar quarter basis by the Indemnitor, for so long
as the Indemnitee controls the defense of the claim, without prejudice to the
Indemnitor's right to contest the Indemnitee's right to indemnification and
subject to refund in the event the Indemnitor is ultimately held not to be
obligated to indemnify the Indemnitee.
9.4 Insurance.
9.4.1 For so long as GI is conducting clinical trials using Agreement
Products or manufacturing, marketing, promoting, distributing and selling
Agreement Products under this Agreement or under the Supply Agreement, GI shall
either provide reasonably satisfactory evidence to TGC of GI's self-insurance or
obtain product liability insurance for the benefit of GI, naming TGC as an
additional party insured, covering such products under terms which are similar
to that obtained by GI for GI's other marketed and sold products or products
under clinical trials.
9.4.2 In the event that TGC is conducting clinical trials using
Agreement Products or manufacturing and supplying Agreement Products for use by
GI in the manufacturing, marketing, promotion, distribution and sale of
Agreement Products, TGC shall obtain product liability insurance for the benefit
of TGC, naming GI as an additional party insured, covering such products
obtained therefrom under terms which are similar to that obtained by other
companies comparable to TGC for products similar to such products and used in
similar circumstances under similar conditions. TGC shall provide GI with a
certificate of insurance as evidence of such coverage.
9.5 Limitation of Liability; Remedies Cumulative.
9.5.1 EXCEPT FOR EACH PARTY'S INDEMNIFICATION OBLIGATIONS HEREUNDER
AND ANY CLAIMS RELATED TO ONE PARTY'S INFRINGEMENT OF THE OTHER PARTY'S
INTELLECTUAL PROPERTY OUTSIDE OF THE RIGHTS AND LICENSES GRANTED HEREUNDER OR
BREACH BY A PARTY OF ITS CONFIDENTIALITY OBLIGATIONS HEREUNDER, UNDER NO
CIRCUMSTANCES SHALL A PARTY HEREOF BE LIABLE TO THE OTHER PARTY HEREOF FOR
CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL DAMAGES.
9.5.2 THE REMEDIES PROVIDED IN THIS AGREEMENT ARE CUMULATIVE AND NOT
EXCLUSIVE OR IN LIMITATION OF ANY OTHER REMEDY AVAILABLE UNDER THIS AGREEMENT OR
AT LAW OR IN EQUITY. ACCORDINGLY, UNLESS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, A REMEDY PROVIDED IN THIS AGREEMENT AS AVAILABLE EITHER TO TGC OR GI
IS NOT INTENDED AS AN EXCLUSIVE REMEDY.
43
ARTICLE 10
GOVERNING LAW; DISPUTE RESOLUTION
10.1 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of New York.
10.2 Dispute Resolution. If the Parties are unable to resolve a dispute
among them informally, either GI or TGC, by written notice to the other, may
have such dispute referred to their respective executive officers designated for
attempted resolution by good faith negotiations (each, a "Responsible
Executive").
For GI: President of Wyeth-Ayerst Research for
development issues,
and
President Wyeth-Ayerst Global
Pharmaceuticals for commercialization
issues
For TGC: Chief Executive Officer of TGC
Any such dispute shall be submitted to the Responsible Executives no later
than thirty (30) days following such request by either GI or TGC. In the event
the Responsible Executives are not able to resolve any such dispute within sixty
(60) days after submission of the dispute to such executive officers, GI or TGC,
as the case may be, may pursue whatever measures legally available to resolve
such dispute. All negotiations pursuant to this Section 10.2 shall be treated as
compromise and settlement negotiations. Nothing said or disclosed, nor any
document produced, in the course of such negotiations which is not otherwise
independently discoverable shall be offered or received as evidence or used for
impeachment or for any other purpose in any current or future arbitration or
litigation.
ARTICLE 11
MISCELLANEOUS
11.1 Assignment.
11.1.1 Neither Party may assign or otherwise transfer its rights or
obligations under this Agreement without the prior written consent of the other
Party, such consent not to be unreasonably withheld, except that a Party may
assign or otherwise transfer its rights or obligations in whole or in part
without such consent (i) to an Affiliate of such Party, including, without
limitation, with respect to GI, American Home Products Corporation, provided
that no such assignment shall relieve any Party as the primary obligor
hereunder, or (ii) to a Third Party in connection with the merger,
consolidation, or sale of substantially all of the assets of the assigning
Party, or reorganization affecting substantially all of the assets or voting
control of the assigning Party.
44
11.1.2 This Agreement shall be binding upon and inure to the benefit
of the successors and permitted assigns of the Parties. Any assignment not in
accordance with this Agreement shall be void.
11.2 Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the control of the defaulting Party, provided
that the Party claiming force majeure shall promptly notify the other Party in
writing setting forth the nature of such force majeure, shall use its best
efforts to eliminate, remedy or overcome such force majeure and shall resume
performance of its obligations hereunder as soon as reasonably practicable after
such force majeure ceases. Except as provided in the previous sentence, if any
force majeure continues for more than one hundred eighty (180) days, the other
Party may terminate this Agreement in part, on a country-by- country basis, or
in whole, if all countries are affected, upon written notice to the affected
Party.
11.3 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
11.4 Governmental Approvals; Compliance with Law. The Parties shall make
all filings with Government Authorities as shall be required by Applicable Laws
in connection with this Agreement and the activities contemplated hereunder or
thereunder. In fulfilling its obligations under this Agreement each Party agrees
to comply in all material respects with all Applicable Laws.
11.5 Public Announcement. Except for such disclosure as is deemed
necessary, in the reasonable judgment of a Party to comply with Applicable Laws,
no announcement, news release, public statement, publication or presentation
relating to the existence of this Agreement and the Supply Agreement, or the
terms hereof or thereof, will be made without the other Party's prior written
approval, which approval shall not be unreasonably withheld. The Parties agree
that they will coordinate the initial announcement or press release relating to
the existence of this Agreement and the Supply Agreement so that such initial
announcement or press release is made contemporaneously by each Party.
Notwithstanding the foregoing, each Party consents to references to it in
reports or documents or other disclosures sent to stockholders or filed with or
submitted to any Government Authority or stock exchange or as may be required by
law to be made. However, the Party making such references shall afford the other
Party the prior opportunity to review the text of any such report, document or
other disclosure, and shall use its best efforts to comply with any reasonable
requests regarding changes to such reports, documents and other disclosures
which are provided to it by the other Party in a timely manner. The Parties each
agree that once approval for disclosure of information subject to this Section
11.5 has been obtained, the Party that requested such approval shall be entitled
to use such information substantially in the form initially presented without an
obligation to seek further approval.
11.6 Notices. All notices required or permitted to be given under this
Agreement or the Supply Agreement, including, without limitation all invoices
provided by TGC to GI, shall be in writing and shall be deemed given if
delivered personally or by facsimile transmission receipt verified, mailed by
registered or certified mail return receipt requested, postage prepaid, or sent
by
45
express courier service, to the Parties at the following addresses, or at such
other address for a Party as shall be specified by like notice, provided that
notices of a change of address shall be effective only upon receipt thereof.
If to TGC, addressed to: Targeted Genetics Corporation
1100 Olive Way, Suite 100
Seattle, Washington 98101
Attention: H. Stewart Parker
President and Chief Executive Officer
Telephone: (206) 623-7612
Facsimile: (206) 223-0288
With a copy, except
for invoices, to: Morrison & Foerster LLP
425 Market Street
San Francisco, California 94105-2482
Attention: Charles F. Hoyng, Esq.
Telephone: (415) 268-7000
Facsimile: (415) 268-7522
If to GI addressed to: Genetics Institute, Inc.
c/o Wyeth-Ayerst Laboratories, Inc.
55 East Lancaster Ave.
St. Davids, Pennsylvania 19807
Attention: Senior Vice President, Global
Business Development
Telephone: 610-971-5809
Facsimile: 610-688-9498
With copies, except
for invoices, to: Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624
Attention: Geoffrey B. Davis, Esq.
Telephone: (617) 951-7742
Facsimile: (617) 951-7050
American Home Products Corporation
Five Giralda Farms
Madison, New Jersey 07940
Attention: Executive VP, General Counsel
Telephone: 973-660-6040
Facsimile: 973-660-7050
The date of receipt of any notice given under this Agreement, including,
without limitation any invoice provided by TGC to GI, shall be deemed to be the
date given if delivered personally or by facsimile transmission receipt
verified, seven (7) days after the date mailed if mailed by
46
registered or certified mail return receipt requested, postage prepaid, and two
(2) days after the date sent if sent by express courier service.
11.7 Waiver. No failure of either Party to exercise and no delay in
exercising any right, power or remedy in connection with this Agreement (each a
"Right") will operate as a waiver thereof, nor will any single or partial
exercise of any Right preclude any other or further exercise of such Right or
the exercise of any other Right.
11.8 Disclaimer of Agency. The relationship between TGC and GI established
by this Agreement is that of independent contractors, and nothing contained
herein shall be construed to (i) give either Party the power to direct or
control the day-to-day activities of the other, (ii) constitute the Parties as
the legal representative or agent of the other Party or as partners, joint
venturers, co-owners or otherwise as participants in a joint or common
undertaking, or (iii) allow either Party to create or assume any liability or
obligation of any kind, express or implied, against or in the name of or on
behalf of the other Party for any purpose whatsoever, except as expressly set
forth in this Agreement.
11.9 Severability. If any term, covenant or condition of this Agreement or
the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable by a court or administrative agency of
competent jurisdiction, then (i) the remainder of such documents, or the
application of such term, covenant or condition to Parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of such documents shall be
valid and be enforced to the fullest extent permitted by law; and (ii) the
Parties hereto covenant and agree to renegotiate any such term, covenant or
application thereof in good faith in order to provide a reasonably acceptable
alternative to the term, covenant or condition of such documents or the
application thereof that is invalid or unenforceable, it being the intent of the
Parties that the basic purposes of this Agreement are to be effectuated.
11.10 Entire Agreement. This Agreement and the Supply Agreement, including
all schedules and exhibits attached thereto, which are hereby incorporated
therein by reference, set forth all covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto and
supersedes and terminates all prior and contemporaneous agreements and
understandings between the Parties. There are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either
oral or written, between the Parties other than as set forth herein or therein.
No subsequent alteration, amendment, change or addition to this Agreement shall
be binding upon the Parties hereto unless reduced to writing and signed by the
respective authorized officers of the Parties.
(Remainder of page intentionally left blank)
47
11.11 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
In Witness Whereof, the Parties have executed this Agreement by their
proper officers as of the date and year first above written.
Targeted Genetics Corporation Genetics Institute, Inc.
("TGC")
By: /s/ H. Stewart Parker By: /s/ Lawrence V. Stein
--------------------------- ----------------------------
Name: H. Stewart Parker Name: Lawrence V. Stein
------------------------- --------------------------
Title: President and CEO Title: Senior Vice President
------------------------ -------------------------
[*]
- ------------------
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omitted portions of this exhibit have been filed separately with the
Securities and Exchange Commission
48