Exhibit 10.9
COLLABORATION AND LICENSE AGREEMENT
between
HOECHST MARION ROUSSEL
and
SCRIPTGEN PHARMACEUTICALS, INC.
October 24, 1997
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY
[***]. THE CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION.
TABLE OF OF CONTENTS
1. DEFINITIONS........................................................-1-
1.1. "Affiliate"................................................-1-
1.2 "Back-Up Compound".........................................-1-
1.3 "Collaboration Program"....................................-1-
1.4 "Committees"...............................................-1-
1.5 "Confidential Information".................................-2-
1.6 "Contract Year"............................................-2-
1.7 "Effective Date"...........................................-2-
1.8 "Existing Compounds".......................................-2-
1.9 "Existing Targets".........................................-2-
1.10 "Field"....................................................-2-
1.11 "First Commercial Sale"....................................-2-
1.12 "HMR Owned Technology".....................................-2-
1.13 "HMR Patent Rights"........................................-2-
1.14 "IND"......................................................-2-
1.15 "IPO"......................................................-2-
1.16 "Joint Compound Library"...................................-2-
1.17 "Joint Patent Rights"......................................-2-
1.18 "Joint Technology".........................................-3-
1.19 "License Term".............................................-3-
1.20 "Licensed Compound"........................................-3-
1.21 "Licensed Compound Notice".................................-3-
1.22 "Licensed Product".........................................-3-
1.23 "NDA"......................................................-3-
1.24 "Net Sales"................................................-3-
1.25 "Non-Selected Compounds"...................................-4-
1.26 "Non-Selected Targets".....................................-4-
1.27 "Party" and "Parties"......................................-4-
1.28 "Patent Rights"............................................-4-
1.29 "Scientific Committee".....................................-4-
1.30 "SCRIPTGEN Indemnitees"....................................-4-
1.31 "SCRIPTGEN Owned Technology"...............................-4-
1.32 "SCRIPTGEN Patent Rights"..................................-4-
1.33 "SCRIPTGEN Screening Technology"...........................-4-
1.34 "Securities Act"...........................................-4-
1.35 "Steering Committee".......................................-5-
1.36 "Target"...................................................-5-
1.37 "Technology"...............................................-5-
1.38 "Work Plan"................................................-5-
2. COLLABORATION PROGRAM..............................................-5-
2.1 Implementation of Collaboration Program....................-5-
2.2 Committees.................................................-6-
2.3 Term of Collaboration Program..............................-8-
2.4 Allocation of Tasks for Collaboration Program..............-8-
2.5 License Option.............................................-9-
2.6 Commercialization Rights..................................-10-
2.7 Non-Selected Targets and Non-Selected Compounds...........-11-
2.8 Existing Compounds and Existing Targets...................-12-
3. FUNDING...........................................................-13-
3.1 Up-Front Payments as a Technology Access Fee..............-13-
3.2 Funding of Collaboration Program..........................-13-
3.3 Milestone Payments........................................-13-
3.4 Determination that Milestones have been achieved..........-14-
4. INTELLECTUAL PROPERTY RIGHTS......................................-14-
4.1 Disclosure of Inventions..................................-14-
4.2 Ownership.................................................-14-
5. PROVISIONS CONCERNING THE FILING, PROSECUTION AND
MAINTENANCE OF PATENT RIGHTS....................................-15-
5.1 Filing of Patents.........................................-15-
5.2 Expenses..................................................-16-
5.3 Right to Prosecute Abandoned Rights.......................-16-
6. LICENSE RIGHTS....................................................-17-
6.1 License Grant.............................................-17-
6.2 Term of License...........................................-17-
6.3 Sublicenses...............................................-17-
6.4 Payment of Royalties and Share of Other Amounts;
Payment Dates; Accounting; Records; Other................-18-
6.5 Infringement..............................................-20-
6.6 Claimed Infringement......................................-21-
6.7 Warranty Disclaimer.......................................-22-
6.8 Limited Liability.........................................-22-
7. CONFIDENTIAL INFORMATION..........................................-22-
7.1 Treatment of Confidential Information.....................-22-
7.2 Release from Restrictions.................................-23-
7.3 Publication...............................................-23-
8. REPRESENTATION AND WARRANTIES.....................................-24-
8.1 Mutual Representations....................................-24-
8.2 HMR Representation........................................-25-
-ii-
9. INDEMNIFICATION...................................................-25-
10. TERMINATION......................................................-25-
10.1 Term......................................................-25-
10.2 Termination for Insolvency or Breach......................-25-
10.3 Disposition of Licensed Products..........................-26-
10.4 Survival of Obligations; Return of
Confidential Information.................................-26-
11. EQUITY INVESTMENT................................................-26-
11.1 Timing and Amount.........................................-26-
11.2 SCRIPTGEN Representations.................................-27-
12. MISCELLANEOUS....................................................-27-
12.1 Payment Method............................................-27-
12.2 Publicity.................................................-27-
12.3 Overdue Payments..........................................-27-
12.4 Prohibition on Hiring.....................................-27-
12.5 Assignment................................................-28-
12.6 Governing Law.............................................-28-
12.7 Force Majeure.............................................-28-
12.8 Waiver....................................................-28-
12.9 Notices...................................................-29-
12.10 No Agency.................................................-29-
12.11 Entire Agreement..........................................-29-
12.12 Headings..................................................-30-
12.13 Severability..............................................-30-
12.14 Successors and Assigns....................................-30-
12.15 Counterparts..............................................-30-
12.16 Interpretation............................................-30-
12.17 Export Controls...........................................-30-
-iii-
COLLABORATION AND LICENSE AGREEMENT
This COLLABORATION AND LICENSE AGREEMENT (the "Agreement") is entered
into as of October 24, 1997 by and between Hoechst Marion Roussel, a French
corporation ("HMR"), and SCRIPTGEN Pharmaceuticals, Inc., a Delaware
corporation ("SCRIPTGEN").
WHEREAS, HMR has known-how in the research and development, manufacturing
and marketing of pharmaceutical products;
WHEREAS, SCRIPTGEN has know-how and technology for discovery of
[***] pharmaceutical products; and
WHEREAS, HMR and SCRIPTGEN desire to cooperate in the discovery and
subsequent development of [***] products for the human health
market;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, HMR and SCRIPTGEN
hereby agree as follows:
1. DEFINITIONS
Whenever used in this Agreement with an initial capital letter, the terms
defined in this Section 1 shall have the meanings specified.
1.1. "Affiliate" means any corporation, firm, limited liability company,
partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement.
"Control" means ownership, directly or through one or more Affiliates, of fifty
percent (50%) or more of the shares of stock entitled to vote for the election
of directors, in the case of a corporation, or fifty percent (50%) or more of
the equity interests in the case of any other type of legal entity, status as a
general partner in any partnership, or any other arrangement whereby a Party
controls or has the right to control the Board of Directors or equivalent
governing body of a corporation or other entity.
1.2 [***]
1.3 "Collaboration Program" means the program and associated activities
contemplated by Section 2 of this Agreement.
1.4 "Committees" mean the Scientific Committee and the Steering Committee
and "Committee" means either the Scientific Committee or the Steering Committee.
1.5 "Confidential Information" means any technical or business information
furnished by one Party to the other in connection with this Agreement.
Confidential Information may include, without limitation, the identity of a
compound and its chemical structure and biological profile, the use of a
compound, trade secrets, know-how, inventions, technical data or specifications,
testing methods, business or financial information, research and development
activities, product and marketing plans, manufacturing plans, formulations,
financing plans and activities, and customer and supplier information, and any
information supplied pursuant to Section 2.8.
1.6 "Contract Year" means each twelve (12) month period beginning after
the Effective Date.
1.7 "Effective Date" means October 24, 1997.
1.8 [***]
1.9 [***]
1.10 "Field" means the human healthcare market.
1.11 "First Commercial Sale" means the date of the first sale of a Licensed
Product in the ordinary course of business in any country by HMR or an Affiliate
of HMR or licensee or sublicensee of HMR or an HMR Affiliate.
1.12 "HMR Owned Technology" has the meaning set forth in Section 4.2.2.
1.13 "HMR Patent Rights" means Patent Rights with respect to HMR Owned
Technology.
1.14 "IND" means an Investigational New Drug permit, as defined by U.S.
federal regulations, or the equivalent in any other country.
1.15 "IPO" means the first underwritten public offering of shares of
capital stock of SCRIPTGEN declared effective under the Securities Act after the
Effective Date.
1.16 "Joint Compound Library" means all Non-Selected Compounds as to which
HMR has performed discovery chemistry during the Collaboration as identified on
page 4 of the Work Plan.
1.17 "Joint Patent Rights" means Patent Rights with respect to Joint
Technology.
-2-
1.18 "Joint Technology" has the meaning set forth in Section 4.2.3.
1.19 "License Term" means the time period referenced in Section 6.2.
1.20 "Licensed Compound" means any compound (including Back-Up Compounds)
selected for licensing and development by HMR pursuant to the provisions of
Sections 2.5, 2.7(c) and 2.7(d) hereof regardless of which Party was the source
of the compound.
1.21 "Licensed Compound Notice" has the meaning set forth in Section 2.5.1.
1.22 "Licensed Product" means any product which incorporates or utilizes a
Licensed Compound (including analogs, derivatives or modifications thereof), and
any product which is discovered in whole or in part as a result of the
Collaboration Program.
1.23 "NDA" means a New Drug Application, as defined by U.S. federal
regulations, or the equivalent in any other country.
1.24 [***]
-3-
1.25 [***]
1.26 [***]
1.27 "Party" and "Parties" means HMR or SCRIPTGEN singularly or HMR and
SCRIPTGEN collectively, respectively.
1.28 "Patent Rights" means the rights and interests in and to issued
patents, pending patents and pending patent applications in any country,
including, but not limited to, all provisional applications, substitutions,
continuations, continuations-in-part, divisions, renewals, reissues or
extensions, whether owned solely or jointly by a Party or licensed in by a Party
with the right to sublicense.
1.29 "Scientific Committee" means the Scientific Committee established
pursuant to Section 2.2 of this Agreement.
1.30 "SCRIPTGEN Indemnitees" has the meaning set forth in Section 9.
1.31 "SCRIPTGEN Owned Technology" has the meaning set forth in
Section 4.2.1.
1.32 "SCRIPTGEN Patent Rights" means Patent Rights with respect to
SCRIPTGEN Owned Technology.
1.33 "SCRIPTGEN Screening Technology" means the proprietary Any Target
Ligand Affinity Screen (ATLAS) technology and the proprietary Screen for
Compounds with Affinity for Nucleic Acid (SCAN) technology owned by SCRIPTGEN
for the screening of compounds and the proprietary high-throughput functional
technologies owned by SCRIPTGEN.
1.34 "Securities Act" means the U.S. Securities Act of 1933, as amended.
-4-
1.35 "Steering Committee" means the Steering Committee established pursuant
to Section 2.2 of this Agreement.
1.36 [***] Target Identification, Validation and Prioritization have the
meanings set forth in Appendix 1.
1.37 "Technology" means and includes all inventions, discoveries,
improvements, proprietary materials and biological substances, data, know-how
and trade secrets, whether or not patentable, including any negative results.
1.38 "Work Plan" means the Work Plan attached to this Agreement as Appendix
1.
2. COLLABORATION PROGRAM
2.1 Implementation of Collaboration Program.
2.1.1 Basic Provisions.
The Collaboration Program shall aim at the synergistic interaction
between HMR and SCRIPTGEN for the identification of [***] drug
candidates for development and commercialization through the activities outlined
in the [***]. The Collaboration Program shall continue for a period of three
(3) Contract Years (subject to extension or earlier termination as provided in
Section 2.3) and each Party shall use reasonable efforts to perform such
tasks as are set forth to be performed by it as contemplated by this
Agreement. All work performed hereunder or in connection herewith shall be
performed in a good and workmanlike manner using proper and accepted
scientific procedures, and in accordance with all applicable laws.
2.1.2 Cooperation.
Each Party shall keep the Steering Committee fully informed about
the status of the Collaboration Program, and scientists at SCRIPTGEN and HMR
shall cooperate in the performance of the Collaboration Program and, subject
to any confidentiality obligations to third parties, shall exchange
information and materials as necessary to carry out the Collaboration
Program, subject to the provisions of Sections 4, 5 and 7 hereof.
-5-
2.1.3 Ownership and Use of SCRIPTGEN Screening Technology.
HMR hereby acknowledges that it has no claim of ownership or rights
to the SCRIPTGEN Screening Technology (including any improvements thereto)
and, as between HMR and SCRIPTGEN, the SCRIPTGEN Screening Technology
(including any improvements thereto) is owned solely by SCRIPTGEN and shall
remain the exclusive property of SCRIPTGEN, and that no license or other
rights therein or to the use thereof are hereby granted to HMR.
2.2 Committees.
2.2.1 Establishment and Functions.
SCRIPTGEN and HMR shall establish a Scientific Committee and a
Steering Committee.
(a) The Scientific Committee shall [***]
(b) The Steering Committee shall [***]
2.2.2 Membership.
SCRIPTGEN and HMR each shall appoint [***]
-6-
2.2.3 Meetings.
The Scientific Committee shall interact on an ongoing basis using
mail, telephone, fax, E-mail and videoconferencing and shall meet [***] with
such meetings to be held, alternately, in Medford, Massachusetts, U.S.A., and
Romainville, France, unless the Parties agree otherwise. The Steering
Committee shall meet [***] with such meetings to be held, alternately, in
Medford, Massachusetts, U.S.A. and Romainville, France, unless the Parties
agree otherwise. Any additional Committee meetings shall be held on an as
needed basis at places and on dates selected by the appropriate Committee.
In addition, a Committee may act without a formal meeting by a written
memorandum signed by that number of members required to take the action if a
meeting in person had been held.
2.2.4 Minutes.
The Committees shall keep accurate minutes of its deliberations
which record all proposed decisions and all actions recommended or taken.
The Scientific Committee shall provide the Steering Committee with minutes of
all of its meetings and advise the Steering Committee in writing of all
recommendations of the Scientific Committee made pursuant to Section 2.2.1.
-7-
2.2.5 Quorum; Voting; Decisions.
At each meeting of a Committee, at least one member appointed by
each Party shall constitute a quorum. Each member of a Committee shall have
one vote on all matters before the Committee, provided that the member or
members of each Party present at a meeting of the Committee shall have the
authority to cast the votes of any of such Party's members on the Committee
who are absent from the meeting. All decisions of a Committee shall be made
by majority vote of all of the members so long as the affirmative vote of at
least one member selected by each Party is included in the majority vote.
2.2.6 Expenses.
[***]
2.3 Term of Collaboration Program.
The Collaboration Program [***]
2.4 Allocation of Tasks for Collaboration Program.
[***]
-8-
2.4.2 Follow-on Tasks.
The additional tasks required for the Collaboration Program as
specified in the [***] shall be the primary responsibility of
the Party designated in said [***]. Any task as to which no
one Party is designated as having primary responsibility shall be the joint
responsibility of the Parties. The Party with primary responsibility (and
each Party, as to tasks as to which no single Party has primary
responsibility) shall periodically, but no less often than quarterly, report
to the Scientific Committee its activities and the results of its activities
under this Section 2.4.2.
2.5 License Option.
2.5.1 Identification of Candidates.
HMR shall review the data and information developed during the
Collaboration Program and shall notify SCRIPTGEN in writing any time during
the term of the Collaboration Program of its decision to proceed
[***]
-9-
2.5.2 Cooperation; Reports.
SCRIPTGEN shall cooperate fully with HMR in its efforts to develop
the Licensed Compounds by providing to HMR any information reasonably
available to SCRIPTGEN which relates to SCRIPTGEN's work hereunder. HMR
shall keep SCRIPTGEN informed about the status of the development of each
Licensed Compound. In particular, without limitation, HMR shall report to
SCRIPTGEN in reasonable detail no less frequently than semi-annually
concerning all aspects of such development activities.
2.6 Commercialization Rights.
[***]
-10-
3. FUNDING
[***]
-11-
3.4 Determination that Milestones have been achieved.
HMR shall promptly notify SCRIPTGEN of the achievement of each milestone.
In the event that SCRIPTGEN believes any milestone has been achieved and it
has not received timely notice from HMR, it shall so notify HMR in writing
and shall provide to HMR the basis for its belief. Within thirty (30) days,
HMR shall review the information provided by SCRIPTGEN and shall certify in
writing whether or not the milestone has been achieved. Any negative
determination shall be accompanied by a detailed explanation of the reasons
therefor. If HMR does not take action within such thirty (30) day period,
the milestone shall be deemed to have been achieved.
4. INTELLECTUAL PROPERTY RIGHTS
4.1 Disclosure of Inventions.
Each Party shall promptly inform the other and the Committees of all
inventions that are conceived, made or developed in the course of carrying
out the Collaboration Program by employees or consultants of either of them
or their Affiliates alone or jointly with employees or consultants of the
other Party or its Affiliates. The following provisions shall apply to
rights in the intellectual property developed by SCRIPTGEN or HMR, or both,
during the course of carrying out the Collaboration Program.
4.2 Ownership.
4.2.1 SCRIPTGEN Intellectual Property Rights.
SCRIPTGEN shall have sole and exclusive ownership of all right,
title and interest on a worldwide basis in and to any Technology developed or
created by
-12-
employees, consultants or assignors of SCRIPTGEN or through the use of any
Technology of SCRIPTGEN hereunder (including, without limitation, the
SCRIPTGEN Screening Technology) (collectively, the "SCRIPTGEN Owned
Technology"), with full rights to license or sublicense, subject to HMR's
rights hereunder. Without limiting the foregoing, subject to the licenses
granted in Sections 2.7 and 6 hereof, SCRIPTGEN shall be the sole owner of
all Patent Rights, all trade secret rights and any other intellectual
property rights in the SCRIPTGEN Owned Technology.
4.2.2 HMR Intellectual Property Rights.
Subject to the provisions of Section 4.2.3, HMR shall have sole and
exclusive ownership of all right, title and interest on a worldwide basis in
and to any Technology solely developed by employees, consultants or assignors
of HMR or through the use of any Technology of HMR hereunder ("HMR Owned
Technology"), with full rights to license or sublicense, subject to
SCRIPTGEN's rights hereunder. Without limiting the foregoing, subject to the
licenses granted under this Agreement, HMR shall be the sole owner of all
Patent Rights, all trade secret rights and any other intellectual property
rights in any HMR Owned Technology.
4.2.3 Joint Technology.
HMR and SCRIPTGEN shall jointly own all Technology jointly
conceived, reduced to practice or developed jointly by employees, consultants
or assignors of both SCRIPTGEN and HMR in the Collaboration Program (the
"Joint Technology") and shall jointly own all Joint Patent Rights. Joint
Technology also includes the Joint Compound Library.
5. PROVISIONS CONCERNING THE FILING, PROSECUTION
AND MAINTENANCE OF PATENT RIGHTS
The following provisions relate to the filing, prosecution and
maintenance of Patent Rights during the term of this Agreement:
5.1 Filing of Patents.
In consultation with the Scientific Committee, SCRIPTGEN will determine
what patents will be filed on SCRIPTGEN Owned Technology and HMR will
determine what patents will be filed on HMR Owned Technology. Each Party
will be responsible for the prosecution (including the defense of
interferences and similar proceedings) of patent protection for its owned
Technology, provided that the other Party will have the opportunity to
provide substantive review and comment on any such prosecution.
Responsibility for prosecution of patent protection (including the defense of
interferences and similar proceedings) on Joint Technology will be determined
by the Committees as provided in Section 2.2.1.
-13-
5.2 Expenses.
[***]
5.3 Right to Prosecute Abandoned Rights.
If either Party at any time elects not to seek or continue to seek, use
or maintain patent protection on any Technology owned by it relating to
Licensed Compounds in any country, the other Party shall have the exclusive
right, at its expense, to file, procure, maintain and enforce in such
countries patents on such Technology. Each Party agrees to advise the other
Party of all decisions taken in a timely manner in order to allow a Party to
protect its rights under this Section 5.3 If a Party elects not to file a
patent application or application for a certificate of invention, not to
maintain a patent or certificate of invention, or to abandon a pending patent
application or application for a certificate of invention, it shall advise
the other Party of such election in a timely manner, and the other Party
shall have the right, at the expense of the other Party, of filing such
application, maintaining such patent or certificate of invention or
continuing to attempt to obtain protection on the subject matter disclosed in
such pending application.
-14-
6. LICENSE RIGHTS
6.1 License Grant.
(a) During the License Term, SCRIPTGEN hereby grants to HMR a
worldwide exclusive license, including the right to grant sublicenses, to
develop, have developed, make, have made, use, distribute for sale, offer for
sale, sell, import and have imported Licensed Products in the Field under
Patent Rights and Technology covering such Licensed Compound or Licensed
Product now or hereafter owned by or licensed (with the right to grant
sublicenses) to SCRIPTGEN.
(b) For the avoidance of doubt, it is acknowledged that, pursuant
to the terms of this Agreement (i) HMR shall have no license from SCRIPTGEN
under, access to or right to use, any Patent Rights or Technology owned by or
licensed to SCRIPTGEN, for any purpose other than those expressly set forth
in subsection (a) and (ii) SCRIPTGEN shall have no license from HMR under,
access to or right to use, any Patent Rights or Technology owned by or
licensed to HMR, for any purpose other than those expressly set forth in
Section 2.6 hereof.
6.2 Term of License.
The License Term as to each Licensed Product shall commence upon the
issuance of the relevant Licensed Compound Notice. The License Term for each
Licensed Product [***] The license for each Licensed Product
shall be deemed a license separate and severable from licenses to other
Licensed Products.
6.3 Sublicenses.
If HMR grants a sublicense to a third party, HMR guarantees that such
sublicensee will fulfill all of HMR's obligations under this Agreement, and
HMR shall not be relieved of its obligations pursuant to this Agreement as a
result of such sublicense.
-15-
6.4 Payment of Royalties and Share of Other Amounts; Payment Dates;
Accounting; Records; Other.
6.4.1 Payment of Royalties and Share of Other Amounts.
[***]
6.4.2 Payment Dates and Reports.
(a) Royalties shall be paid by HMR to SCRIPTGEN on Net Sales
within [***] after the end of each calendar quarter in which
such Net Sales are made. Such payment shall be accompanied by a report
showing (a) the gross sales of the Licensed Product sold by HMR, its
Affiliates and any licensee or sublicensee of HMR or its Affiliates in each
country during the reporting period and the calculation of Net Sales from such
gross sales, (b) the royalty due thereon, (c) withholding taxes, if any,
required by law to be deducted in respect of such royalties, and (d) the
exchange rates used in determining the amount of U.S. dollars. If no royalty
is due for any calendar quarter, HMR shall so report.
(b) All amounts due SCRIPTGEN from HMR pursuant to Section
6.4.1(b) shall be paid to SCRIPTGEN by HMR within sixty (60) days after
receipt by HMR of the payment to HMR in respect of which payment is due
SCRIPTGEN under Section 6.4.1(b).
(c) All amounts due SCRIPTGEN under Sections 6.4.1(a) and
6.4.1(b) shall be paid without deduction or offset, except as otherwise
provided in Section 6.4.6.
-16-
(d) HMR shall not solicit, authorize or accept any
consideration for or in connection with the sale of Licensed Products other
than as will be accurately reflected in Net Sales.
6.4.3 Accounting.
All amounts due SCRIPTGEN under Sections 6.4.1(a) and 6.4.1(b) shall
be computed and paid in U.S. dollars. For purposes of determining the
amounts due SCRIPTGEN, the amount of Net Sales in any foreign currency and
the amount of any payment received by HMR in respect of which a payment is
due SCRIPTGEN under Section 6.4.1(b) shall be computed by converting such
amounts into U.S. dollars at the prevailing commercial rate of exchange for
purchasing dollars with such foreign currency as reported in The Wall Street
Journal on the last business day of the period to which a royalty payment
relates or on the business day on which payment was received by HMR in
respect of which a payment is due SCRIPTGEN under Section 6.4.1(b), as the
case may be.
6.4.4 Records.
HMR and its Affiliates and the licensees and sublicensees of HMR and
its Affiliates shall keep for [***] years from the date of
each payment of royalties complete and accurate records of sales by HMR and
its Affiliates and its and their licensees and sublicensees of each Licensed
Product in sufficient detail to allow the accruing royalties to be determined
accurately. SCRIPTGEN shall have the right for a period of
[***] years after receiving any report or statement with
respect to royalties due and payable to appoint an independent certified
public accountant reasonably acceptable to HMR to inspect the relevant records
of HMR and its Affiliates and its or their licensees and sublicensees to
verify such report or statement. HMR and its Affiliates and its and their
licensees and sublicensees shall each make its records available for
inspection by such independent certified public accountant during regular
business hours at such place or places where such records are customarily
kept, upon reasonable notice from SCRIPTGEN, solely to verify the accuracy of
the reports and payments. Such inspection right shall not be exercised more
than once in any Fiscal Year nor more than once with respect to sales of any
Licensed Product in any given payment period. SCRIPTGEN agrees to hold in
strict confidence all information concerning royalty payments and reports,
and all information learned in the course of any audit or inspection, except
to the extent necessary for SCRIPTGEN to reveal such information in order to
enforce its rights under this Agreement or if disclosure is required by law or
judicial process. The results of each inspection, if any, shall be binding on
both Parties. SCRIPTGEN shall pay for such inspections, except that in the
event there is any upward adjustment in aggregate royalties payable for any
calendar quarter shown by such inspection of more than [***]
of the amount paid, HMR shall pay for such inspection.
-17-
6.4.5 Single Royalty per Licensed Product.
Only one royalty shall be due with respect to each sale of a
Licensed Product.
6.4.6 Foreign Royalties.
Where royalties are due hereunder for sales of Licensed Products in
a country where, by reason of currency regulations or taxes of any kind, it
is impossible or illegal for HMR, and Affiliates or sublicensee to transfer
royalty payments to SCRIPTGEN for Net Sales in that country, such royalties
shall be deposited in whatever currency is allowable by the person or entity
not able to make the transfer for the benefit or credit of SCRIPTGEN in an
accredited bank in that country that is acceptable to SCRIPTGEN.
[***]
6.5 Infringement.
(a) Each Party shall promptly report in writing to the other Party
during the term of this Agreement any known infringement or suspected
infringement of any Patent Rights covering Licensed Compounds or Licensed
Products by a third party of which it becomes aware, and shall provide the
other Party with all available evidence supporting said infringement or
suspected infringement.
(b) Except as provided in paragraph (d) below, HMR shall have the
right to initiate an infringement or other appropriate suit against any third
party who at any time has infringed, or is suspected of infringing, any
Patent Rights covering Licensed Compounds or Licensed Products. HMR shall
give SCRIPTGEN sufficient advance notice of its intent to file said suit and
the reasons therefor, and shall provide SCRIPTGEN with an opportunity to make
suggestions and comments regarding such suit. HMR shall keep SCRIPTGEN
properly informed, and shall from time to time consult with SCRIPTGEN,
regarding the status of any such suit.
-18-
(c) HMR shall have the sole and exclusive right to select counsel
for any suit referred to in paragraph (b) above and shall pay all expenses of
the suit, including without limitation attorneys' fees and court costs. Any
damages, royalties, settlement fees or other consideration received by HMR or
any of its Affiliates shall be divided [***] to HMR [***] to SCRIPTGEN [***].
If necessary, SCRIPTGEN shall join as a party to the suit but shall be under
no obligation to participate except to the extent that such participation is
required as the result of being a named party to the suit. SCRIPTGEN shall
offer reasonable assistance to HMR in connection therewith at no charge to
HMR except for reimbursement of reasonable out-of-pocket expenses (not
including salaries of SCRIPTGEN personnel) incurred in rendering such
assistance. SCRIPTGEN shall have the right to participate and be represented
in any such suit by its own counsel at its own expense. HMR shall not settle
any such suit involving rights of SCRIPTGEN without obtaining the prior
written consent of SCRIPTGEN, which consent shall not be unreasonably
withheld.
(d) In the event that HMR elects not to initiate an infringement or
other appropriate suit pursuant to paragraph (b) above, HMR shall promptly
advise SCRIPTGEN of its intent not to initiate such suit, and SCRIPTGEN shall
have the right, at the expense of SCRIPTGEN, of initiating an infringement or
other appropriate suit against any third party who at any time has infringed,
or is suspected of infringing, any Patent Rights covering Licensed Compounds
or Licensed Products. In exercising its rights pursuant to this paragraph
(d), SCRIPTGEN shall have the sole and exclusive right to select counsel and
shall pay all expenses of the suit, including without limitation, attorneys'
fees and court costs, and shall be entitled to receive and retain any
damages, royalties, settlement fees or other consideration. If necessary,
HMR shall join as a party to the suit but shall be under no obligation to
participate except to the extent that such participation is required as a
result of being a named party of the suit. At SCRIPTGEN's request, HMR shall
offer reasonable assistance to SCRIPTGEN at no charge to SCRIPTGEN except for
reimbursement of reasonable out-of-pocket expenses (not including salaries of
HMR personnel) incurred in rendering such assistance. HMR shall have the
right to participate and be represented in any such suit by its own counsel
at its own expense.
6.6 Claimed Infringement.
Notwithstanding anything to the contrary in this Agreement, in the event
that any action, suit or proceeding is brought against SCRIPTGEN or any
Affiliate of SCRIPTGEN or HMR or any Affiliate, licensee or sublicensee of
HMR alleging the infringement of the intellectual property rights of a third
party by reason of the discovery, development, manufacture, use, sale,
importation or offer for sale of a Licensed Product by HMR or its Affiliates
or its or their licensees or sublicensees, HMR will have the obligation to
defend itself and SCRIPTGEN and its Affiliates in
-19-
such action, suit or proceeding at HMR's expense. SCRIPTGEN shall have the
right to separate counsel at its own expense in any such action or
proceeding. The Parties will cooperate with each other in the defense of any
such suit, action or proceeding. The Parties will give each other prompt
written notice of the commencement of any such suit, action or proceeding or
claim or infringement and will furnish each other a copy of each
communication relating to the alleged infringement, but the failure to do so
shall not affect HMR's obligations under this Section and under Section 9
except to the extent HMR is actually damaged thereby. HMR shall not
compromise, litigate, settle or otherwise dispose of any such suit, action or
proceeding which involves the use of SCRIPTGEN Owned Technology, Joint
Technology, SCRIPTGEN Patent Rights or Joint Patent Rights without
SCRIPTGEN's advice and prior written consent, provided that SCRIPTGEN shall
not unreasonably withhold its consent to any settlement which will provide an
unconditional release of SCRIPTGEN and its Affiliates.
6.7 Warranty Disclaimer.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY
MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS OR
OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OR
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH
RESPECT TO ANY AND ALL OF THE FOREGOING.
6.8 Limited Liability.
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER
SCRIPTGEN NOR HMR WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR (i) ANY DIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES OR LOST PROFITS OR (ii) COST OF PROCUREMENT OF SUBSTITUTE GOODS,
TECHNOLOGY OR SERVICES.
7. CONFIDENTIAL INFORMATION
7.1 Treatment of Confidential Information.
Each Party shall maintain the Confidential Information of the other Party
in confidence, and shall not disclose, divulge or otherwise communicate such
Confidential Information to others, or use it for any purpose, except
pursuant to, and in order to carry out, the terms and objectives of this
Agreement, and hereby agrees to exercise every reasonable precaution to
prevent and restrain the unauthorized disclosure of such Confidential
Information by any of its directors, officers, employees,
-20-
consultants, subcontractors, sublicensees, agents or Affiliates. Without
limiting the foregoing, each Party agrees not to make any disclosure of the
other Party's Confidential Information which will impair the other Party's
ability to obtain U.S. or foreign patents on any patentable invention or
discovery described in such Confidential Information. The Confidential
Information of each Party includes information about third parties disclosed
by one Party to this Agreement to the other Party to this Agreement.
7.2 Release from Restrictions.
The provisions of Section 7.1 shall not apply to any Confidential
Information disclosed hereunder which:
(a) was known or used by the receiving Party prior to its date of
disclosure to the receiving Party, as evidenced by the prior written
records of the receiving Party; or
(b) either before or after the date of this disclosure to the
receiving Party is lawfully disclosed to the receiving Party by an
independent, unaffiliated third party rightfully in possession of the
Confidential Information; or
(c) either before or after the date of the disclosure to the
receiving Party becomes published or generally known to the public through
no fault or omission on the part of the receiving Party or its Affiliates
and under no obligation of confidentiality; or
(d) is independently developed by a Party without use of the
Confidential Information of the other Party, as evidenced by the written
records of the developing Party; or
(e) is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving Party provides prior
written notice of such disclosure to the other Party and takes reasonable
and lawful actions to avoid and/or minimize the degree of such disclosure.
7.3 Publication.
It is expected that each Party may wish to publish the results of its
research and development program under this Agreement. In order to safeguard
intellectual property rights, the Party wishing to publish or otherwise
publicly disclose the results of its research hereunder shall first submit a
draft of the proposed manuscripts to the Scientific Committee during the term
of the Collaboration Program or otherwise to
-21-
the other Party for review, comment and consideration of appropriate patent
action at least [***] weeks prior to any submission for
publication or other public disclosure. Within [***] days of
receipt of the prepublication materials, the Scientific Committee or the other
Party will advise the Party seeking publication as to whether a patent
application will be prepared and filed or whether trade secret protection
should be pursued and, if so, the Scientific Committee or the other Party
will, in cooperation with both Parties, determine the appropriate timing and
content of any such publications. In all events, there shall be deleted from
any such publication any information reasonably determined by a Party hereto to
constitute its Confidential Information.
8. REPRESENTATION AND WARRANTIES
8.1 Mutual Representations.
SCRIPTGEN and HMR each represents and warrants as follows:
8.1.1 Organization.
It is a corporation duly organized, validly existing and is in good
standing under the laws of the State of Delaware and of the country of
France, respectively, is qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which the performance of its
obligations hereunder requires such qualification and has all requisite power
and authority, corporate or otherwise, to conduct its business as now being
conducted, to own, lease and operate its properties and to execute, deliver
and perform this Agreement.
8.1.2 Authorization.
The execution, delivery and performance by it of this Agreement has
been duly authorized by all necessary corporate action and does not and will
not (a) require any consent or approval of its stockholders or (b) violate
any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to it or any provision of its charter documents or any
agreement or other instrument or obligation to which it is bound or its
assets are subject.
8.1.3 Binding Agreement.
This Agreement is a legal, valid and binding obligation of it
enforceable against it in accordance with its terms and conditions.
-22-
8.1.4 No Inconsistent Obligation.
It is not under any obligation to any person, or entity, contractual
or otherwise, that is conflicting or inconsistent in any respect with the
terms of this Agreement or that would impede the diligent and complete
fulfillment of its obligations.
8.2 HMR Representation.
HMR represents to SCRIPTGEN that no withholding tax is due on any payment
required to be made hereunder and that HMR will not withhold any amounts on
account of any tax or withholding, except for withholding, if any, required
by French tax authorities on payments of royalties pursuant to Section 6.4.6.
9. INDEMNIFICATION
HMR shall indemnify, defend and hold harmless SCRIPTGEN and its
Affiliates and its and their respective directors, officers, employees, and
agents and their respective successors, heirs and assigns (the "SCRIPTGEN
Indemnitees"), against any liability, damage, loss or expense (including
reasonable attorneys' fees and expenses of litigation) incurred by or imposed
upon the SCRIPTGEN Indemnitees, or any of them, in connection with any
claims, suits, actions, demands or judgments of third parties, including
without limitation, personal injury and product liability matters (except in
cases where such claims, suits, actions, demands or judgments result from
willful misconduct, gross negligence or material breach of this Agreement on
the part of SCRIPTGEN) arising out of the development, testing, production,
manufacture, promotion, import, sale or use by any person of any Licensed
Product manufactured or sold by HMR or by an Affiliate, licensee,
sublicensee, distributor or agent of HMR or its Affiliates. HMR shall have no
obligation under this Section 9 with respect to incidental, indirect, or
consequential damages or lost profits of Scriptgen.
10. TERMINATION
10.1 Term.
This Agreement shall remain in effect until terminated in accordance with
the provisions of this Section 10 or until the last to expire of the licenses
and rights granted under this Agreement.
10.2 Termination for Insolvency or Breach.
Each Party shall be entitled to terminate this Agreement by written
notice to the other Party (a) upon the bankruptcy, insolvency, dissolution or
winding up of the other Party or (b) in the event that the other Party shall
be in default of any of its
-23-
obligations hereunder, and shall fail to remedy any such default within sixty
(60) days (ten (10) days in the case of failure to make payments when due)
after notice thereof by the non-breaching Party. Upon termination of this
Agreement pursuant to this Section 10.2, neither Party shall be relieved of
any obligations incurred prior to such termination and all other rights and
remedies of the terminating Party shall not be affected by such termination.
10.3 Disposition of Licensed Products.
Upon any termination of this Agreement pursuant to Section 10, HMR shall
within [***] days of the effective date of such termination
notify SCRIPTGEN in writing of the amount of Licensed Products which HMR, its
Affiliates and sublicensees then have completed on hand, the sale of which
would, but for the termination, be subject to royalty, and HMR, its Affiliates
and sublicensees shall thereupon be permitted during the [***]
months following such termination to sell that amount of Licensed Products,
provided that HMR shall pay the aggregate royalty thereon at the conclusion of
the earlier of the last such sale or such [***] month period.
Except as provided above, all sublicenses granted by HMR shall forthwith
terminate upon the termination of this Agreement.
10.4 Survival of Obligations; Return of Confidential Information.
Notwithstanding any termination of this Agreement, the obligations of the
Parties under Sections 6, 7, 8 and 9 shall survive and continue to be
enforceable. Upon any termination of this Agreement pursuant to Section 10,
each Party shall promptly destroy all written Confidential Information, and
all copies thereof.
11. EQUITY INVESTMENT
11.1 Timing and Amount.
Provided the IPO is closed no later than [***] years from
the Effective Date, concurrently with the closing of the IPO, HMR shall
purchase from SCRIPTGEN pursuant to a private placement [***]
(U.S.) of common stock of SCRIPTGEN at a price per share equal to the gross
price per share at which shares are sold to the underwriter(s) of the IPO
prior to deduction for underwriting commissions and discounts. HMR
acknowledges and agrees that such shares shall not be registered under the
Securities Act and shall be deemed to be "restricted securities" within the
meaning of Rule 144 promulgated under the Securities Act. As a condition of
such purchase, HMR and SCRIPTGEN shall enter into a written agreement that
provides [***] on customary terms with respect to such shares
satisfactory to both Parties, to be exercisable whenever the provisions of
Sections (c), (e), (f) and (h) of Rule 144 promulgated under the Securities
Act would apply to any sale of such shares in the public market.
-24-
11.2 SCRIPTGEN Representations.
SCRIPTGEN represents and warrants that the shares of common stock which
HMR will purchase pursuant to Section 11.1 will be duly authorized, validly
issued and fully paid and non-assessable.
12. MISCELLANEOUS
12.1 Payment Method.
Each payment to SCRIPTGEN under this Agreement shall be paid by HMR in
U.S. currency by wire transfer of funds to an account of SCRIPTGEN in
accordance with instructions provided by SCRIPTGEN.
12.2 Publicity.
Neither Party may disclose the existence of terms of this Agreement
without the prior written consent of the other Party; provided, however, that
either Party may make such a disclosure to the extent required by law or
judicial process and that SCRIPTGEN may make a disclosure of the existence
and terms of this Agreement (i) in the registration statement relating to the
IPO or (ii) to investors, prospective investors, lenders and other financing
sources and parties which have entered into a confidentiality agreement with
SCRIPTGEN and with which SCRIPTGEN may enter into a commercial arrangement.
The Parties, upon the execution of this Agreement, will discuss the
possibility of a mutually acceptable news release for publication in general
circulation periodicals and newswire.
12.3 Overdue Payments.
Payments due hereunder which are not paid when due shall bear interest at
a rate of [***] per month from the due date until paid in full. Payment of
such interest shall be in addition to any other rights and remedies to which
the Party to which the payment is due may be entitled for failure to make
timely payment.
12.4 Prohibition on Hiring.
Neither Party nor its Affiliates shall, during the term of the
Collaboration Program, but in any event for at least [***] years from the
Effective Date, hire any person who was employed by the other Party or its
Affiliates during such period, whether such person is hired as an employee,
investigator, independent contractor or otherwise; provided that a person who
was employed by a Party or its Affiliates as a consultant or independent
contractor may be employed as a consultant or independent contractor by the
other Party or its Affiliates to perform services in
-25-
furtherance of the Collaboration Program or for activities unrelated to the
collaboration contemplated by this Agreement.
12.5 Assignment.
Neither this Agreement nor any of the rights or obligations hereunder may
be assigned by either Party without the prior written consent of the other
Party, except to a Party who acquires all or substantially all of the
business of the assigning Party by merger, sale of assets or otherwise.
12.6 Governing Law.
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware with regard to conflicts of law principles.
The rights and obligations of the Parties under this Agreement shall not be
governed by the provisions of the U.N. Convention on Contracts for the
International Sale of Goods.
12.7 Force Majeure.
In the event that either Party is prevented from performing or is unable
to perform any of its obligations under this Agreement (other than the
payment of money) due to any act of God; fire; casualty; flood; war; strike;
lockout; failure of public utilities; injunction or any act, exercise,
assertion or requirement of governmental authority, including any
governmental law, order or regulation permanently or temporarily prohibiting
or reducing the level of research, development or production work hereunder
or the manufacture, use or sale of Licensed Products; epidemic; destruction
of production facilities; riots; insurrection; inability to procure or use
materials, labor, equipment, transportation or energy sufficient to meet
experimentation or manufacturing needs; or any other cause beyond the
reasonable control of the Party invoking this Section 12.7, such Party shall
give notice to the other Party in writing promptly, and thereupon if such
Party shall have used its best efforts to avoid such occurrence, the affected
Party's performance shall be excused and the time for performance shall be
extended for the period of delay or inability to perform due to such
occurrence.
12.8 Waiver.
The waiver by either Party of a breach or a default of any provision of
this Agreement by the other Party shall not be construed as a waiver of any
succeeding breach of the same or any other provision, nor shall any delay or
omission on the part of either Party to exercise or avail itself of any
right, power or privilege that it has or may have hereunder operate as a
waiver of any right, power or privilege by such Party.
-26-
12.9 Notices.
Any notice or other communication in connection with this Agreement must
be in writing and by mail, certified, return receipt requested, by electronic
facsimile transmission or courier service, and shall be effective when
delivered to the addressee at the address listed below or such other address
as the addressee shall have specified in a notice actually received by the
addressor.
If to SCRIPTGEN:
SCRIPTGEN Pharmaceuticals, Inc.
200 Boston Avenue
Suite 3000
Medford, MA 02155
Attn: President
If to HMR:
Hoechst Marion Roussel
102, Route de Noisy
93235 Romainville Cedex
FRANCE
Attn: General Counsel
12.10 No Agency.
Nothing herein shall be deemed to constitute either Party as the agent or
representative of the other Party, or both Parties as joint venturers or
partners for any purpose. SCRIPTGEN shall be an independent contractor, not
an employee or partner of HMR, and the manner in which SCRIPTGEN renders its
services under this Agreement shall be within SCRIPTGEN's sole discretion.
Neither Party shall be responsible for the acts or omissions of the other
Party, and neither Party will have authority to speak for, represent or
obligate the other Party in any way without prior written authority from the
other Party.
12.11 Entire Agreement.
This Agreement and the Appendix and Exhibits hereto contain the full
understanding of the Parties with respect to the subject matter hereof and
supersede all prior understandings and writing relating thereto. No waiver,
alteration or modification of any of the provisions hereof shall be binding
unless made in writing and signed by the Parties by their respective officers
thereunto duly authorized.
-27-
12.12 Headings.
The headings contained in this Agreement are for convenience of reference
only and shall not be considered in construing this Agreement.
12.13 Severability.
In the event that any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable because it is invalid or in
conflict with any law of any relevant jurisdiction, the validity of the
remaining provisions shall not be affected, and the rights and obligations of
the Parties shall be construed and enforced as if the Agreement did not
contain the particular provisions held to be unenforceable.
12.14 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their successors and permitted assigns.
12.15 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.
12.16 Interpretation.
The Parties acknowledge and agree that: (i) each Party and its counsel
reviewed and negotiated the terms and provisions of this Agreement and has
contributed to its revision; (ii) the rule of construction to the effect that
any ambiguities are resolved against the drafting Party shall not be employed
in the interpretation of this Agreement; and (iii) the terms and provisions
of this Agreement shall be construed fairly as to all Parties hereto and not
in favor of or against any Party, regardless of which Party was generally
responsible for the preparation of this Agreement.
12.17 Export Controls.
This Agreement is made subject to any restrictions concerning the export
of Licensed Products or SCRIPTGEN Owned Technology from the United States
which may be imposed upon or related to either Party to this Agreement from
time to time by the Government of the United States. HMR will not export,
directly or indirectly, any SCRIPTGEN Owned Technology or any Licensed
Products utilizing such Technology to any countries for which the United
States Government or any agency
-28-
thereof at the time of export requires an export license or other
governmental approval, without first obtaining the written consent to do so
from the Department of Commerce or other agency of the United States
Government when required by the applicable statute or regulation.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives.
HOECHST MARION ROUSSEL
By /s/
-------------------------------------------
(Print name)
Title:
Date:
SCRIPTGEN PHARMACEUTICALS, INC.
By /s/
-------------------------------------------
(Print name)
Title:
Date:
-29-
EXHIBIT A
[***]
EXHIBIT B
[***]
Appendix 1-WORK PLAN
[***]