<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
Commission File Number 0-28494
Millennium Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)
Delaware 04-3177038
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
640 Memorial Drive, Cambridge, MA 02139
(Address of principal executive offices, including zip code)
617-679-7000
(Registrant's telephone number, including area code)
Common Stock, $.001 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No x
--- ---
Number of shares of Common Stock outstanding as of August 5, 1996 was
23,833,211.
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MILLENNIUM PHARMACEUTICALS, INC.
REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
TABLE OF CONTENTS
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)
Condensed Balance Sheets
June 30, 1996 and December 31, 1995 3
Condensed Statements of Operations
for the six months ended
June 30, 1996 and 1995 4
Condensed Statements of Cash Flows
for the six months ended
June 30, 1996 and 1995 5
Notes to Condensed Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II - OTHER INFORMATION 12
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 2. CHANGES IN SECURITIES 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
EXHIBIT INDEX 14
2
<PAGE> 3
Millennium Pharmaceuticals, Inc.
Condensed Balance Sheets
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
-----------------------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 14,803,701 $ 10,586,260
Short-term investments 53,965,804 7,260,284
Prepaid expenses and other current assets 2,032,987 694,763
-----------------------------
Total current assets 70,802,492 18,541,307
Property and equipment, net 9,648,118 4,905,528
Due from strategic partner 1,603,337 1,463,333
Deposits and other assets 461,998 194,682
-----------------------------
$ 82,515,945 $ 25,104,850
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,583,021 $ 1,122,446
Accrued expenses 711,827 567,611
Deferred revenue 1,708,984 3,110,000
Current portion of long-term debt 1,600,000 1,600,000
Current portion of capital lease obligations 2,002,184 1,643,168
-----------------------------
Total current liabilities 8,606,016 8,043,225
Long-term debt, net 666,667 1,466,667
Capital lease obligations, net 2,749,960 2,499,088
Stockholders' equity:
Series A,B,C and D Convertible Preferred Stock, $0.001 par value:
14,000,000 shares authorized and 11,783,333 shares issued and
outstanding ($22,450,000 in aggregate liquidation preference) -- 11,783
Common Stock, $0.001 par value: 25,000,000 shares authorized;
23,851,320 shares in 1996 and 4,211,926 shares in 1995 issued and
outstanding 23,851 4,212
Additional paid-in capital 87,504,175 22,722,267
Deferred compensation (2,900,241) --
Notes receivable from officers (320,522) (266,681)
Unrealized loss on securities (166,597) --
Accumulated deficit (13,647,364) (9,375,711)
-----------------------------
Total stockholders' equity 70,493,302 13,095,870
-----------------------------
Total liabilities and stockholders' equity $ 82,515,945 $ 25,104,850
=============================
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed financial statements.
3
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Millennium Pharmaceuticals, Inc.
Condensed Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue under strategic alliances $ 5,100,533 $ 2,500,000 $ 12,658,849 $ 5,000,000
Costs and expenses:
Research and development 8,080,200 4,209,979 14,713,849 8,077,325
General and administrative 1,785,827 944,182 3,051,223 1,716,595
------------------------------------------------------------
9,866,027 5,154,161 17,765,072 9,793,920
------------------------------------------------------------
Loss from operations (4,765,494) (2,654,161) (5,106,223) (4,793,920)
Interest income 829,977 57,947 1,249,896 147,139
Interest expense (193,997) (229,207) (415,326) (479,164)
------------------------------------------------------------
Net loss $ (4,129,514) $ (2,825,421) $ (4,271,653) $ (5,125,945)
============================================================
Net loss per share $ (0.19) $ (0.15) $ (0.21) $ (0.27)
============================================================
Shares used in computing net loss
per share 22,268,382 19,150,695 20,717,782 19,150,695
------------------------------------------------------------
</TABLE>
See notes to condensed financial statements.
4
<PAGE> 5
Millennium Pharmaceuticals, Inc.
Condensed Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
1996 1995
----------------------------
<S> <C> <C>
CASH USED IN OPERATIONS $ (4,630,518) $ (4,771,552)
INVESTING ACTIVITIES
Purchase of property and equipment (4,476,350) (856,715)
Sale of short-term investments 20,211,766 --
Purchase of short-term investments (66,917,286) --
----------------------------
Net cash used in investing activities (51,181,870) (856,715)
FINANCING ACTIVITIES
Proceeds from sale of Preferred Stock 3,499,992 2,250,000
Proceeds from sale of Common Stock 58,268,318 2,538
Repurchase of Common Stock (829) --
Payments of long-term debt (800,000) (133,333)
Payments of capital lease obligations (937,652) (820,481)
----------------------------
Net cash provided by financing activities 60,029,829 1,298,724
----------------------------
Increase (decrease) in cash and cash equivalents 4,217,441 (4,329,543)
Cash and cash equivalents at beginning of year 10,586,260 6,105,468
----------------------------
Cash and cash equivalents at end of period $ 14,803,701 $ 1,775,925
============================
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Equipment acquired under capital leases $ 1,547,540 $ 352,245
============================
Deferred compensation $ 3,187,283 --
============================
</TABLE>
See notes to condensed financial statements.
5
<PAGE> 6
MILLENNIUM PHARMACEUTCALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1996
(unaudited)
1 - BASIS OF PRESENTATION
The accompanying condensed financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Interim results for the three- and six-month periods ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1996. For further information, refer to the financial statements
and footnotes thereto included in the Company's Form S-1 filed on May 6, 1996.
Effective January 1, 1996, the Company adopted Statement of Financial Accounting
Standard (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets to
be Disposed of." The adoption of the new standard had no effect on the financial
statements.
Effective January 1, 1996, the Company adopted SFAS No. 123 "Accounting and
Disclosure of Stock-Based Compensation." As allowed under the SFAS, the Company
has elected to continue to follow Accounting Principals Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (AFB 25) in accounting for its
employee stock options. The adoption of the standard had no effect on the
financial statements.
2 - NET LOSS PER SHARE
Net loss per share is computed using the weighted-average number of outstanding
shares of Common Stock and Common Stock Equivalents, assuming conversion of
Series A, B, C and D Convertible Preferred Stock into Common Stock (as of their
original date of issuance), which occurred upon completion of the Company's
initial public offering on May 7, 1996 and the exercise of stock options and
warrants (using the treasury stock method). Common Stock equivalents are
excluded from the computation when their effect is anti-dilutive; however,
pursuant to the requirements of the Securities and Exchange Commission, Common
Stock equivalent shares relating to stock options and warrants (using the
treasury stock method and an initial public offering price of $12.00 per share)
and Convertible Preferred Stock issued during the twelve month period prior to
the initial public offering are included for both periods presented whether or
not anti-dilutive.
3 - SHAREHOLDERS' EQUITY
In February, 1996, the Company issued 388,888 shares of Series D Convertible
Preferred Stock to a private institutional investor at $9.00 per share and
received net proceeds of approximately $3,500,000. The rights and privileges of
the Series D stock are substantially consistent with previously issued
convertible preferred stock series.
6
<PAGE> 7
In May 1996, the Company completed an initial public offering of 4,500,000
shares of common stock at $12.00 per share. The underwriters exercised their
over allotment option for 675,000 shares. The Company received proceeds, net of
underwriting discounts, of approximately $57,753,000. The proceeds of the
offering are being used for research and development, working capital and
general corporate purposes.
4 - SUBSEQUENT EVENT
In July 1996, the Company entered into a strategic alliance with American Home
Products Corporation (AHP) to discover and develop targets and assays to
identify and develop small molecule drugs and vaccines for treatment and
prevention of disorders of the central nervous system. The alliance becomes
effective on August 1, 1996. Payments by AHP to the Company for up-front fees
and research funding could total up to approximately $90.0 million if the
research program continues for its full seven year period and the Company
achieves specified research objectives. In the event that specified research,
product development and associated regulatory milestones are achieved, AHP will
be obligated to make milestone payments to the Company.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This Report on Form 10-Q may contain forward-looking statements which
involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that may cause such a difference include, but are not limited to, the
progress of the Company's research and development programs, the Company's
ability to compete successfully, the Company's ability to attract and retain
qualified personnel, the Company's ability to enter into and maintain
collaborations with third parties, the Company's ability to enter into and
progress in clinical trials, the time and costs involved in obtaining regulatory
approvals, the costs involved in obtaining and enforcing patents, proprietary
rights and any necessary licenses, the ability of the Company to establish
development and commercialization capacities or relationships, the costs of
manufacturing and the Company's ability to obtain additional funds.
Overview
The Company was incorporated in January 1993 and has devoted
substantially all of its resources to the development and application of
genetics, genomics and bioinformatics technology used to identify the genes
responsible for major diseases, as well as comprehensive technologies to
elucidate the role of these genes in disease initiation and progression. To
date, all of the Company's revenue has resulted from payments from strategic
partners and the Company has not received any revenue from the sale of products
or services.
The Company has entered into several strategic alliances: in March 1994
with Hoffmann La-Roche, Inc. ("Roche") in obesity and type II diabetes; in
October 1995 and March 1996 with Eli Lilly and Company ("Lilly") in
atherosclerosis and select areas of oncology, respectively; in December 1995
with Astra AB ("Astra") in inflammatory respiratory diseases; and in July 1996
with American Home Products in certain disorders of the central nervous system.
These agreements have provided the Company with various combinations of equity
investments, up-front and follow-on fees and research funding and may provide
certain additional payments upon the attainment of research and regulatory
milestones and royalty and/or profit sharing payments based on sales of any
products resulting from the collaborations. Revenue recognized under these
collaborations through June 30, 1996 has aggregated approximately $43,502,000.
Although the Company intends to enter into additional strategic
alliances, it also expects to incur increasing expenses and additional losses
for at least the next several years, primarily due to expansion of its research
and development programs. Payments under strategic alliance and licensing
arrangements will be subject to significant fluctuation in both timing and
amounts resulting in periods of profitability and periods of losses; therefore,
the Company's results of operations for any period may not be comparable to the
results of operations for any other period.
8
<PAGE> 9
Results of Operations
Quarters Ended June 30, 1996 and June 30, 1995
Revenue under strategic alliances increased to $5,100,533 for the three
months ended June 30, 1996 (the "1996 Period") from $2,500,000 for the three
months ended June 30, 1995 (the "1995 Period"). The increase for the 1996 Period
was due to strategic alliance revenue from three partners - Roche, Lilly, and
Astra - compared with revenue in the 1995 Period from only Roche.
Research and Development expenses increased to $8,080,200 for the three
months ended June 30, 1996 from $4,209,979 for the three months ended June 30,
1995. The increase was primarily attributable to increased payroll and personnel
expenses as the Company hired additional research and development personnel,
increased purchase of laboratory supplies, increased equipment depreciation and
facilities expenses in connection with the expansion of the Company's research
efforts and increased costs associated with the collection of patient
information and DNA samples. The Company expects research and development
expenses to continue to increase as personnel and research and development
facilities are expanded to accommodate the Company's existing strategic
alliances. Such expenses will also increase to the extent that the Company
enters into additional strategic alliances with third parties.
General and administrative expenses increased to $1,785,827 for the
three months ended June 30, 1996 from $944,182 for the three months ended June
30, 1995. The increase was primarily attributable to increased payroll and
personnel expenses as the Company hired additional management and administrative
personnel, and professional fees in connection with the overall scale-up of the
Company's operations and business development efforts. It is anticipated that
general and administrative expenses will continue to increase as the Company
continues to expand its operations.
The Company had net interest income of $635,980 for the three months
ended June 30, 1996 and net interest expense of $171,260 for the three months
ended June 30, 1995. The transition to net interest income was due to increased
interest income earned on higher balances of cash and investment securities.
The Company has recorded a non-cash charge of approximately $3,200,000
relating to compensation expense associated with the grant of options between
January 1, 1996 and May 2, 1996 to purchase 1,174,447 shares of Common Stock.
For the three month period ended June 30, 1996 the Company recognized
approximately $195,000 of such compensation expense. The remaining deferred
compensation will be recognized ratably over the vesting period of the options,
which is generally four years.
Six Months Ended June 30, 1996 and June 30, 1995
Revenue under strategic alliances increased to $12,658,849 for the six
months ended June 30, 1996 (the "1996 Period") from $5,000,000 for the six
months ended June 30, 1995 (the "1995 Period"). The increase for the 1996 Period
was due to strategic alliance revenue from three partners - Roche, Lilly and
Astra compared with revenue in the 1995 Period from only Roche. Effective March
1996, Lilly exercised its option to enter into a strategic alliance in select
areas of
9
<PAGE> 10
oncology. In connection with the execution of this agreement, the Company
recognized $2,750,000 of revenue that had been previously deferred.
Research and Development expenses increased to $14,713,849 for the 1996
Period from $8,077,325 for the 1995 Period. The increase was primarily
attributable to increased payroll and personnel expenses as the Company hired
additional research and development personnel, increased purchase of laboratory
supplies, increased equipment depreciation and facilities expenses in connection
with the expansion of the Company's research efforts and increased costs
associated with the collection of patient information and DNA samples. The
Company expects research and development expenses to continue to increase as
personnel and research and development facilities are expanded to accommodate
the Company's existing strategic alliances. Such expenses will also increase to
the extent that the Company enters into additional strategic alliances with
third parties.
General and administrative expenses increased to $3,051,223 for the
1996 Period from $1,716,595 for the 1995 Period. The increase was primarily
attributable to increased payroll and personnel expenses as the Company hired
additional management and administrative personnel, and professional fees in
connection with the overall scale-up of the Company's operations and business
development efforts. It is anticipated that general and administrative expenses
will continue to increase as the Company continues to expand its operations.
The Company had net interest income of $834,570 for the 1996 Period and
net interest expense of $332,025 for the 1995 Period. The transition to net
interest income was due to increased interest income earned on higher balances
of cash and investment securities.
The Company has recorded a non-cash charge of approximately $3,200,000
relating to compensation expense associated with the grant of options between
January 1, 1996 and May 2, 1996 to purchase 1,174,447 shares of Common Stock.
For the six month period ended June 30, 1996 the Company recognized
approximately $286,000 of such compensation expense. The remaining deferred
compensation will be recognized ratably over the vesting period of the options,
which is generally four years.
Liquidity and Capital Resources
The Company has financed its operations since inception primarily
through strategic alliances, private placement of equity securities, issuance of
debt and capital leases. In May 1996, the Company completed an initial public
offering of common stock resulting in proceeds, net of underwriting discounts,
of $57,753,000. Through June 30, 1996, the Company recognized approximately
$43,502,000 of revenue under strategic alliances. The private placement of
equity securities has provided the Company with aggregate gross proceeds of
approximately $25,590,000. The Company has obtained $4,000,000 in long-term
debt, $6,888,000 in capital lease financings, and $1,100,000 to finance the
build-out of an 8,000 square foot in-house animal facility. As of June 30, 1996,
the Company had approximately $68,770,000 in cash, cash equivalents and
short-term investments.
The Company believes that existing cash and investment securities,
anticipated cash flow from its current strategic alliances, and net proceeds
from the initial public offering in May 1996 will be sufficient to support the
Company's
10
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operations for at least the next 24 months. The Company's actual future cash
requirements, however, will depend on many factors, including progress of its
disease research programs, the number and breadth of these programs, achievement
of milestones under strategic alliance arrangements, the ability of the Company
to establish and maintain additional strategic alliance and licensing
arrangements, and the progress of the development efforts of the Company's
strategic partners. These factors also include the level of the Company's
activities relating to commercialization rights it has retained in its strategic
alliance arrangements, competing technological and market developments, the
costs associated with the collection of patient information and DNA samples, the
costs involved in obtaining and enforcing patent claims and other intellectual
property rights, and the costs and timing of regulatory approvals. The Company
expects that it will require significant additional financing in the future,
which it may seek to raise through public or private equity offerings, debt
financings, or additional strategic alliance and licensing arrangements. No
assurance can be given that additional financing or strategic alliance and
licensing arrangements will be available when needed or that, if available, such
financing will be obtained on terms favorable to the Company or its
stockholders. The Company's forecast of the period of time through which its
financial resources will be adequate to support its operations is
forward-looking information, and, as such, actual results may vary.
11
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The exhibits listed in the Exhibit Index are included in this report.
(b) Reports on form 8-K
None
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MILLENNIUM PHARMACEUTICALS, INC.
(Registrant)
Date: August 12, 1996 By: /s/ Mark J. Levin
-----------------------------
Mark J. Levin
Chief Executive Officer
(Principal Executive Officer)
Date: August 12, 1996 By: /s/ Harry F. Arader, Jr.
-----------------------------
Harry F. Arader, Jr.
Chief Financial Officer
(Principal Financial and
Accounting Officer)
13
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EXHIBIT INDEX
The following exhibits are filed as part of this Quarterly Report on
Form 10-Q:
Exhibit
No. Description
- ------- -----------
10.1+ CNS Research, Collaboration and License Agreement
effective as of August 1, 1996 by and between American
Home Products Corporation and the Company.
10.2+ Bioinformatics Access and License Agreement effective
as of August 1, 1996 by and between American Home
Products Corporation and the Company.
10.3+ Transcription Profiling Technology Access and License
Agreement effective as of August 1, 1996 by and between
American Home Products Corporation and the Company.
11 Statement regarding Computation of Pro Forma Net Loss
Per Common Share.
27 Financial Data Schedule.
- --------------------
+ Confidential treatment requested as to certain portions.
14
<PAGE> 1
Exhibit 10.1
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
CNS RESEARCH, COLLABORATION AND LICENSE AGREEMENT
By and Between
American Home Products Corporation
and
Millennium Pharmaceuticals, Inc.
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
Introduction ...................................................... 1
Article I - Definitions ........................................... 1
Section 1.1 Affiliate ................................. 2
Section 1.2 AHP Discovery Program ..................... 2
Section 1.3 AHP Program Know-How ...................... 2
Section 1.4 AHP Program Patent Right(s) ............... 2
Section 1.5 AHP Research Program ...................... 2
Section 1.6 Antisense Drug ............................ 3
Section 1.7 Autoimmune Diseases ....................... 3
Section 1.8 Business Day .............................. 3
Section 1.9 Candidate Gene ............................ 3
Section 1.10 Change of Control ......................... 3
Section 1.11 Change in Strategic Direction ............. 4
Section 1.12 CNS ....................................... 4
Section 1.13 CNS Disorders Field ....................... 4
Section 1.14 CNS JMT ................................... 4
Section 1.15 Confidential Information .................. 4
Section 1.16 Contract Year ............................. 5
Section 1.17 Core Field ................................ 5
Section 1.18 Diagnostic Product ........................ 5
Section 1.19 Discovery Project Team Status ............. 5
Section 1.20 EMEA ...................................... 5
Section 1.21 Expansion Field ........................... 5
Section 1.22 Extension Benchmark(s) .................... 5
Section 1.23 External Collaboration(s) ................. 6
Section 1.24 FDA ....................................... 6
Section 1.25 First Commercial Sale ..................... 6
Section 1.26 FTE ....................................... 6
Section 1.27 Gene Therapy Drug ......................... 6
Section 1.28 IND ....................................... 6
Section 1.29 Joint Program Know-How .................... 6
Section 1.30 Joint Program Patent Right(s) ............. 6
Section 1.31 Know-How .................................. 6
Section 1.32 Major Market Country ...................... 7
Section 1.33 Management Committee(s) ................... 7
Section 1.34 Marketing Exclusivity ..................... 7
Section 1.35 Millennium Program Know-How ............... 7
Section 1.36 Millennium Program Patent Right(s) ........ 7
Section 1.37 Millennium Research Program ............... 7
Section 1.38 Modified Drug ............................. 8
-i-
<PAGE> 3
Section 1.39 NDA ....................................... 8
Section 1.40 Net Sales ................................. 8
Section 1.41 Non-Vaccine Product ....................... 10
Section 1.42 Party ..................................... 10
Section 1.43 Patent Right(s) ........................... 10
Section 1.44 PLA ....................................... 10
Section 1.45 Product ................................... 10
Section 1.46 Product Patent Blocking Event ............. 10
Section 1.47 Program Know-How .......................... 10
Section 1.48 Program Patent Right(s) ................... 10
Section 1.49 Protein ................................... 11
Section 1.50 Requisite Majority ........................ 11
Section 1.51 Research Program .......................... 11
Section 1.52 Research Program Plan ..................... 11
Section 1.53 Reserve Field ............................. 11
Section 1.54 Royalty-bearing Modified Drug ............. 11
Section 1.55 Royalty-bearing Product ................... 11
Section 1.56 Royalty-bearing Small Molecule Product .... 11
Section 1.57 Royalty-bearing Vaccine Product ........... 11
Section 1.58 Small Molecule ............................ 12
Section 1.59 Small Molecule Product .................... 12
Section 1.60 Steering Committee ........................ 12
Section 1.61 Sublicensee ............................... 12
Section 1.62 Technology Patent Blocking Event .......... 12
Section 1.63 Territory ................................. 12
Section 1.64 TPT Access and License Agreement .......... 12
Section 1.65 Vaccine ................................... 12
Section 1.66 Vaccine Development Status ................ 12
Section 1.67 Vaccine Management Team ................... 13
Section 1.68 Vaccine Product ........................... 13
Section 1.69 Valid Claims .............................. 13
Section 1.70 Validated Target .......................... 13
Section 1.71 Validated Vaccine Candidate ............... 13
Section 1.72 Additional Definitions .................... 14
Article II - Research and Collaboration Program ................... 15
Section 2.1 Exclusive Arrangement ..................... 15
Section 2.2 Research Program Plan ..................... 15
Section 2.3 Research Program Management ............... 15
Section 2.4 Mechanism For Expansion of
Collaboration ........................... 20
Section 2.5 Term of the Millennium Research Program;
Extension Benchmarks .................... 29
Section 2.6 Termination of the Millennium Research
Program ................................. 30
Section 2.7 Diligence ................................. 31
-ii-
<PAGE> 4
Article III - Disclosure of Know-How .............................. 32
Section 3.1 Millennium Know-How ....................... 32
Section 3.2 Biological Materials ...................... 32
Section 3.3 AHP Program Know-How ...................... 33
Article IV - Confidentiality ...................................... 33
Section 4.1 Confidential Information and Know-How ..... 33
Section 4.2 Employee Obligations ...................... 33
Section 4.3 Publications .............................. 34
Section 4.4 Term ...................................... 34
Article V - Grant of Rights ....................................... 35
Section 5.1 Technology Licenses ....................... 35
Section 5.2 Product Licenses .......................... 36
Section 5.3 AHP's Right of First Refusal with
Respect to Non-Vaccine Products ......... 36
Section 5.4 AHP's Rights With Respect to Other
Millennium Projects ..................... 38
Section 5.5 Diagnostic Products ....................... 38
Section 5.6 AHP's Rights to Potential Candidate
Genes ................................... 39
Section 5.7 AHP's Right of First Refusal with
Respect to Autoimmune Diseases .......... 40
Section 5.8 Millennium's Retained Rights .............. 41
Article VI - Patent Ownership, Protection and
Related Matters ......................... 41
Section 6.1 Ownership ................................. 41
Section 6.2 Patentable Inventions ..................... 42
Section 6.3 Review and Comment ........................ 43
Section 6.4 Notice of Decision ........................ 43
Section 6.5 Patent Term Extensions .................... 43
Section 6.6 Costs and Expenses ........................ 43
Section 6.7 Third Party Infringement .................. 44
Section 6.8 Notice of Certification ................... 45
Section 6.9 Claimed Infringement; Claimed
Invalidity .............................. 45
Article VII - AHP Due Diligence ................................... 46
Section 7.1 Research Program Inventory ................ 46
Section 7.2 Candidate Genes ........................... 47
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<PAGE> 5
3 Section 7.3 Disease Indications ....................... 48
Section 7.4 Commercialization ......................... 49
Section 7.5 Determination of Due Diligence ............ 50
Article VIII - Payments ........................................... 51
Section 8.1 License Fees .............................. 51
Section 8.2 Equity Purchases On Achievement of
Extension Benchmarks .................... 52
Section 8.3 Research Funding .......................... 53
Section 8.4 Milestones ................................ 55
Section 8.5 Royalty Payments to Millennium on
Products ................................ 57
Article IX - Accounting ........................................... 60
Section 9.1 Royalty Reports ........................... 60
Section 9.2 Delivery of Royalty ....................... 60
Section 9.3 Records and Audits ........................ 60
Section 9.4 Currency of Payments ...................... 60
Section 9.5 Tax Withholding ........................... 60
Article X - Term and Termination .................................. 61
Section 10.1 Term ...................................... 61
Section 10.2 Termination For Material Breach ........... 61
Section 10.3 Termination Upon Change of Control ........ 61
Section 10.4. Residual Rights ........................... 62
Article XI - Product Liability Indemnification .................... 63
Article XII - Governing Law ....................................... 64
Article XIII - Assignment ......................................... 64
Article XIV - Affiliate Agreements ................................ 64
Article XV - Amendments ........................................... 65
Article XVI - Notices ............................................. 65
Article XVII - Force Majeure ...................................... 66
Article XVIII - Representations and Warranties .................... 66
Section 18.1 Representation of Authority ............... 66
Section 18.2 Outstanding Agreements .................... 67
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Section 18.3 Consents .................................. 67
Section 18.4 No Conflict ............................... 67
Section 18.5 Section 365(n) of the Bankruptcy Code ..... 67
Section 18.6 Knowledge of Pending or Threatened
Litigation .............................. 68
Section 18.7 Employee Obligations ...................... 68
Section 18.8 Full Disclosure ........................... 68
Section 18.9 Compliance with Applicable Laws
and Regulations ......................... 68
Section 18.10. Export Controls ........................... 68
Section 18.11. No Warranties ............................. 68
Article XIX - Public Announcements ................................ 69
Article XX - Additional Agreements ................................ 69
Section 20.1 Independent Contractors ................... 69
Section 20.2 Consents Not Unreasonably Withheld ........ 69
Section 20.3 No Strict Construction .................... 70
Section 20.4 Headings .................................. 70
Section 20.5 Severance of Clauses ...................... 70
Section 20.6 No Waiver ................................. 70
Section 20.7 Counterparts .............................. 70
Appendix A CNS Disorders Field
Appendix A.1. Core Field
Appendix A.2. Reserve Field
Appendix A.3. Expansion Field
Appendix B Research Program Plan
Appendix C External Collaborations
Appendix D Equity-Related Terms
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CNS RESEARCH, COLLABORATION AND LICENSE AGREEMENT
This Agreement is effective as of the 1st day of August, 1996 (the
"Effective Date"), by and between Millennium Pharmaceuticals, Inc., a
corporation organized and existing under the laws of the State of Delaware and
having its principal office at 640 Memorial Drive, Cambridge, Massachusetts
02139-4815 ("Millennium") and American Home Products Corporation, a corporation
organized and existing under the laws of the State of Delaware, acting through
its Wyeth-Ayerst Research Division, having its principal place of business at
555 East Lancaster Pike, St. Davids, Pennsylvania 19087 ("AHP").
Introduction
1. Millennium is in the business of conducting research in the field of
human genomics, an objective of which is to discover potential biological
targets and assays for use in drug discovery.
2. AHP is in the business of discovering, developing and marketing
pharmaceuticals.
3. AHP is interested in funding and collaborating with Millennium in
discovering and developing targets and assays to identify and develop small
molecule drugs and vaccines for the treatment and prevention of disorders of the
central nervous system, and in obtaining, under specified circumstances, rights
to other types of therapeutic molecules useful in the treatment of disorders of
the central nervous system that are identified through the use of certain
technology developed before or during the collaboration.
4. Millennium is willing to provide know-how, materials and licenses to
AHP to allow AHP to use certain of Millennium's technology in the field of
central nervous system disorders.
NOW, THEREFORE, Millennium and AHP agree as follows:
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Article I
Definitions
When used in this Agreement, each of the following terms shall have the
meanings set forth in this Article I:
Section 1.1. "Affiliate" means any corporation, company partnership,
joint venture and/or firm which controls, is controlled by or is under common
control with a Party. For purposes of this Section 1.1, "control" shall mean,
(a) in the case of corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the stock or shares having the right to vote for the
election of directors, and (b) in the case of non-corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the equity interest with
the power to direct the management and policies of such non-corporate entities,
provided, however that the foregoing shall not include any entity with respect
to which there is a contractual restriction on the right to elect a majority of
the directors.
Section 1.2. "AHP Discovery Program" means the drug discovery and
development activities performed by AHP, commencing during or after the term of
the Millennium Research Program, to discover and develop Products for use in the
Core Field based on the results arising from the Millennium Research Program
and/or the AHP Research Program.
Section 1.3. "AHP Program Know-How" means Know-How, exclusive of Joint
Program Know-How, (a) which is reasonably necessary in order to discover
Candidate Genes, Validated Targets and Validated Vaccine Candidates and to
discover, develop, make, use, sell or seek approval to market Products for
medical indications in the Core Field, (b) which AHP develops, uses or acquires
during the term of the AHP Research Program or the AHP Discovery Program (but,
with respect to the AHP Discovery Program, only during the term of the AHP
Research Program) and (c) to which AHP has the right to grant licenses or
sublicenses without violating the terms of any agreement or other arrangement
with a third party.
Section 1.4. "AHP Program Patent Right(s)" means a Patent Right (a) that
relates to AHP Program Know-How, and (b) that is obtained by AHP during the term
of the AHP Research Program or the AHP Discovery Program, and (c) to which AHP
has the right to grant licenses or sublicenses without violating the terms of
any agreement or other arrangement with a third party.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 1.5. "AHP Research Program" means the research program, to be
undertaken by AHP coincident with the term of the Millennium Research Program,
to discover Products for use in the Core Field based on Millennium Program
Know-How and Millennium Program Patent Rights, provided that the use of MTPT (as
such term is defined in the TPT Access and License Agreement) by AHP in the Core
Field during the term of the AHP Research Program shall be deemed to be a part
of the AHP Research Program.
Section 1.6. "Antisense Drug" means any drug or drug candidate which
consists of nucleic acid or a functional analog, derivative or homologue thereof
and which is complementary to a segment of DNA of a target gene or such target
gene's cognate RNA and which, upon delivery by any means, alters the
transcription, processing, elaboration, RNA expression, or protein production of
or by such target gene, provided that Antisense Drug shall not include any
nucleic acid or a functional analog, derivative or homologue thereof which, upon
delivery by any means, must be expressed in order to alter the transcription,
processing, elaboration, RNA expression, or protein production of or by a target
gene.
Section 1.7. "Autoimmune Diseases" means diseases that result from the
loss of immune tolerance to self-antigens.
Section 1.8. "Business Day" means a day on which the trading of
securities takes place on the Nasdaq Stock Market (or such other stock exchange
on which Millennium securities may be traded).
Section 1.9. (a) "Candidate Gene" means ***************** the
***************************** of which has been determined, that has been
implicated in a disease or condition in the Core Field (i) by Millennium prior
to the Effective Date or (ii) by Millennium or jointly by the Parties in the
course of the Research Program. The Candidate Gene must be implicated in a
disease or condition in the Core Field either (A) *****************; or (B)
***************** (in which instance the Candidate Gene shall mean the
********************* to the ***************************** ***************; or
(C) by any other method (in which case to qualify as a Candidate Gene, the gene
shall be appropriately ********************************************************.
The discoveries upon which such implication is based shall be *********** and
**********************. The determination that an
************************************* of a Candidate Gene shall be made in good
faith by the CNS JMT.
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<PAGE> 10
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(b) Notwithstanding the foregoing, an ******** **** that
has been implicated in a disease or condition in the Core Field by a third party
before or during the term of the Research Program may be designated a Candidate
Gene (which shall be non-milestone bearing) if it is determined in good faith by
the CNS JMT that the study of such gene in the course of the Research Program
may lead to the development of a proprietary and potentially patentable
Validated Target or Validated Vaccine Candidate.
Section 1.10. "Change of Control" means (a) a merger or consolidation of
Millennium which results in the voting securities of Millennium outstanding
immediately prior thereto ceasing to represent at least fifty percent (50%) of
the combined voting power of the surviving entity immediately after such merger
or consolidation; (b) the sale of all or substantially all of the assets of
Millennium or (c) any one person, as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than Millennium, any trustee or other fiduciary holding securities under
an employee benefit plan of Millennium, or any corporation owned directly or
indirectly by the stockholders of Millennium, in substantially the same
proportion as their ownership of stock of Millennium), together with any of such
person's "affiliates" or "associates", as such terms are used in the Exchange
Act, becoming the beneficial owner of fifty percent (50%) or more of the
combined voting power of the outstanding securities of Millennium.
Notwithstanding the foregoing, a "Change of Control" shall also be deemed to
exist in the event of (A) either (i) a merger or consolidation of Millennium and
a multinational pharmaceutical company which results in the voting securities of
Millennium outstanding immediately prior thereto ceasing to represent at least
thirty-five percent (35%) of the combined voting power of the surviving entity
immediately after such merger or consolidation, or (ii) a multinational
pharmaceutical company, together with its affiliates or associates, becoming the
beneficial owner of thirty-five percent (35%) or more of the combined voting
power of the outstanding securities of Millennium, and (B) such multinational
pharmaceutical company, whether through contractual rights or otherwise,
controls the business of Millennium.
Section 1.11. "Change in Strategic Direction" means that Millennium
ceases to maintain significant capabilities in gene identification, and their
validation as targets for pharmaceutical drug discovery and development.
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Section 1.12. "CNS" means the human central nervous system.
Section 1.13. "CNS Disorders Field" means the Core Field, the Reserve
Field and the Expansion Field.
Section 1.14. "CNS JMT" means the joint management team, as described in
Section 2.3(a)(i).
Section 1.15. "Confidential Information" means all materials, Know-How
or other information, including, without limitation, proprietary information and
materials (whether or not patentable or copyrightable) regarding a Party's
technology, products, business information or objectives, which is designated as
confidential in writing by the disclosing Party, whether by letter or by the use
of an appropriate stamp or legend, prior to or at the time any such material,
trade secret or other information is disclosed by the disclosing Party to the
other Party. Notwithstanding the foregoing, materials, Know-How or other
information which is orally, electronically or visually disclosed by a Party, or
is disclosed in writing without an appropriate letter, stamp or legend, shall
constitute Confidential Information if the disclosing Party, within thirty (30)
days after such disclosure, delivers to the other Party a written document or
documents describing the materials, Know-How or other information and
referencing the place and date of such oral, visual, electronic or written
disclosure and the names of the persons to whom such disclosure was made,
provided, however, that any technical information disclosed at a meeting of the
CNS JMT or the Steering Committee shall constitute Confidential Information
unless otherwise specified.
Section 1.16. "Contract Year" means the twelve (12) month period
beginning on the Effective Date and each succeeding twelve (12) month period
thereafter.
Section 1.17. "Core Field" means the disorders set forth in Appendix
A.1, as may be modified from time to time pursuant to the provisions of Section
2.4.
Section 1.18. "Diagnostic Product" means any product in the form of a
device, compound, kit or service that embodies Millennium Program Know-How for
use in (a) the diagnosis, prognosis, prediction or disease management of a
disorder, or (b) the genetic disaggregation of patient populations based on
their response to a pharmaceutical product (i.e., pharmacogenetics).
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<PAGE> 12
Section 1.19. "Discovery Project Team Status" means a discovery research
program that AHP has formally designated as having achieved "Discovery Project
Team Status", or such successor comparable internal criteria as AHP may
implement in the future (i.e. AHP has committed to the program the relevant
resources to enable identification and development of an IND-track compound),
provided that AHP shall apply the criteria for assessing Discovery Project Team
Status (or such successor criteria) in a manner consistent with the criteria
applied to other discovery research programs, including discovery research
programs generated through internal research programs of AHP or its Affiliates.
Section 1.20. "EMEA" means the European Agency for the Evaluation of
Medicinal Products.
Section 1.21. "Expansion Field" means the disorders set forth in
Appendix A.3, as may be modified from time to time pursuant to the provisions of
Section 2.4.
Section 1.22. "Extension Benchmark(s)" means the Year Three Extension
Benchmark and/or the Year Five Extension Benchmark (as such terms are described
in Section 2.5).
Section 1.23. "External Collaboration(s)" means the external
collaboration(s) with third parties undertaken as part of the Research Program,
set forth in Appendix C, as modified from time to time to reflect the then
current Research Program Plan.
Section 1.24. "FDA" means the United States Food and Drug
Administration.
Section 1.25. "First Commercial Sale" means, for each Product, the first
commercial sale in a country as part of a nationwide introduction by AHP, its
Affiliates and/or its Sublicensees other than for clinical trial purposes or
compassionate use.
Section 1.26. "FTE" means a full time equivalent scientific person year
(consisting of a total of one thousand eight hundred eighty (1,880) hours per
year of scientific work on or directly related to the Millennium Research
Program), carried out by a Millennium employee, having at least a Bachelor's
Degree. Scientific work on or directly related to the Millennium Research
Program to be performed by Millennium employees can include, but is not limited
to, experimental laboratory work, recording and writing of results, reviewing
literature and references, holding
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<PAGE> 13
scientific discussions, managing and leading scientific staff and carrying out
project management duties.
Section 1.27. "Gene Therapy Drug" means any drug or drug candidate which
consists of nucleic acid or a functional analog, derivative or homologue thereof
and which, upon delivery by any means, provides a gene product encoded therein
which is expressed.
Section 1.28. "IND" means an Investigational New Drug Application filed
with the FDA.
Section 1.29. "Joint Program Know-How" means Know-How owned or
controlled jointly by Millennium and AHP which is reasonably necessary in order
to discover Candidate Genes, Validated Targets and Validated Vaccine Candidates
and to discover, develop, make, use, sell or seek approval to market Products
for medical indications in the Core Field, and which is developed jointly by the
Parties in the course of the Research Program.
Section 1.30. "Joint Program Patent Right(s)" means a Patent Right that
relates to Joint Program Know-How.
Section 1.31. "Know-How" means any information, data and materials,
including without limitation organic compounds and biological materials such as
cell lines, RNA, DNA, DNA fragments, organisms, Proteins, polypeptides, plasmids
and vectors and software, user's manuals and guides, that are owned or
controlled by Millennium and/or by AHP, or a license to the same to which
Millennium and/or AHP has the right to grant a sublicense.
Section 1.32. "Major Market Country" means the United States, the United
Kingdom, Germany, France, Italy or Japan.
Section 1.33. "Management Committee(s)" means the CNS JMT, the Vaccine
Management Team and/or the Steering Committee.
Section 1.34. "Marketing Exclusivity" means the marketing exclusivity
afforded approved drug products pursuant to (i) the exclusivity provisions of
the United States "Drug Price Competition and Patent Term Restoration Act of
1984", or its equivalent in a country other than the United States, or (ii) the
exclusivity provisions of the United States "Orphan Drug Act", or its equivalent
in a country other than the United States.
Section 1.35. "Millennium Program Know-How" means Know-How, exclusive of
Joint Program Know-How, owned or controlled by Millennium which is reasonably
necessary in order to discover
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Candidate Genes, Validated Targets and Validated Vaccine Candidates and to
discover, develop, make, use, sell or seek approval to market Products for
medical indications in the Core Field, and which (a) is in Millennium's
possession on the Effective Date, or (b) Millennium develops in the course of
the Millennium Research Program, or (c) Millennium acquires in the course of the
Millennium Research Program and to which Millennium has the right to grant
licenses or sublicenses without violating the terms of any agreement or other
arrangement with a third party, provided, however, that Millennium Program
Know-How shall not include (i) generalized methods for conducting genomic
research and characterizing the function of genes, including without limitation
Millennium **** Technology and other MTPT (as those terms are defined in the TPT
Access and License Agreement), and (ii) phenotypic and genotypic information and
biological samples relating to human materials acquired or otherwise accessed by
Millennium and used in genetic analysis in the Millennium Research Program
(other than such information and samples which AHP participates in obtaining,
including information and samples specifically obtained from the AHP patient
base).
Section 1.36. "Millennium Program Patent Right(s)" means a Patent Right
that relates to Millennium Program Know-How.
Section 1.37. "Millennium Research Program" means the research program,
the term of which extends during the time that research is funded by AHP
pursuant to Section 8.3 of this Agreement, and which is to be undertaken by
Millennium using genomic technology to discover and characterize Candidate
Genes, Validated Targets and Validated Vaccine Candidates with potential utility
for the identification and development of Products in the Core Field, to be
described in greater detail in Appendix B.
Section 1.38. "Modified Drug" means a compound, the identification of
which is based upon another compound that (a) other than through the use of
****************************** ********************************, prior to or
outside of the Millennium Research Program, is known **************************
*************************** to its development as a therapeutic product in the
CNS Disorders Field, and (b) is modified by *********************************
********************************************************************** to
improve its therapeutic properties (but not merely to characterize the compound)
for use in the CNS Disorders Field.
Section 1.39. "NDA" means a New Drug Application filed with the FDA.
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Section 1.40. "Net Sales" means with respect to a Royalty-bearing
Product, the gross amount invoiced by AHP, its Affiliates and/or its
Sublicensees, on sales or other dispositions of the Royalty-bearing Product to
unrelated third parties, less the following items, provided that such items are
included in the price charged and do not exceed reasonable and customary amounts
in the country in which such sale occurred:
(a) Trade, cash and quantity discounts actually allowed and
taken directly with respect to such sales;
(b) Tariffs, duties, excises, sales taxes or other taxes imposed
upon and paid directly with respect to such sales (excluding national,
state or local taxes based on income);
(c) Amounts repaid or credited by reason of rejections, defects,
recalls or returns or because of rebates or retroactive price
reductions; and
(d) One percent (1%) of Net Sales as an allowance to cover all
other items, such as freight, transportation and insurance.
Such amounts shall be determined from the books and records of AHP, its
Affiliates and/or its Sublicensees, maintained in accordance with generally
accepted accounting principles, consistently applied.
If a Royalty-bearing Product is sold in bulk (as distinguished from
packaged pharmaceutical form) for resale in packaged or finished form in a Major
Market Country, Net Sales shall be calculated by determining the quantity of
Royalty-bearing Product in packaged pharmaceutical form that would reasonably be
produced from the bulk quantity of Royalty-bearing Product so sold, and by
multiplying such quantity by the average price for such Royalty-bearing Product
in packaged pharmaceutical form during the applicable royalty reporting period.
If a Royalty-bearing Product is sold, or otherwise commercially disposed of for
value (including, without limitation, disposition in connection with the
delivery of other products or services), in a transaction that is not an
outright arm's length sale to an independent third party, then the gross amount
invoiced in such transaction shall be deemed to be the gross amount that would
have been paid had there been such a sale at the average sale price of such
Royalty-bearing Product during the applicable royalty reporting period. Net
Sales shall not include any consideration received by AHP, its
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<PAGE> 16
Affiliates or its Sublicensees in respect of the sale, use or other disposition
of a Royalty-bearing Product in a country as part of a clinical trial prior to
the receipt of all regulatory approvals required to commence full commercial
sales of such Royalty-bearing Product in such country, except sales under
"treatment INDs", "named patient sales", "compassionate use sales", or their
equivalents pursuant to which AHP, its Affiliates or Sublicensees is/are
entitled, under applicable regulatory policies, to recover costs incurred in
providing such products to the patients.
In the event the Royalty-bearing Product is sold as part of a
Combination Product (as defined below), the Net Sales from the Combination
Product, for the purposes of determining royalty payments, shall be determined
by multiplying the Net Sales of the Combination Product (as defined in the
standard Net Sales definition), during the applicable royalty reporting period,
by the fraction, A/A+B where A is the average sale price of the Royalty-bearing
Product when sold separately in finished form and B is the average sale price of
the other product(s) included in the Combination Product when sold separately in
finished form, in each case during the applicable royalty reporting period or,
if sales of both the Royalty-bearing Product and the other product(s) did not
occur in such period, then in the most recent royalty reporting period in which
sales of both occurred. In the event that such average sale price cannot be
determined for both the Royalty-bearing Product and all other product(s)
included in the Combination Product, Net Sales for the purposes of determining
royalty payments shall be calculated by multiplying the Net Sales of the
Combination Product by the fraction C/C+D where C is the fair market value of
the Royalty-bearing Product and D is the fair market value of all other
pharmaceutical product(s) included in the Combination Product. In such event,
AHP shall in good faith make a determination of the respective fair market
values of the Royalty-bearing Product and all other pharmaceutical products
included in the Combination Product, and shall notify Millennium of such
determination and provide Millennium with data to support such determination.
Millennium shall have the right to review such determination and supporting
data, and to notify AHP if it disagrees with such determination. If Millennium
does not agree with such determination and the Parties are unable to agree in
good faith as to such respective fair market values, then such matter shall be
referred to the Executive Officers (as defined in Section 2.3(b)(iii) pursuant
to Section 2.3(b)(iv)).
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<PAGE> 17
As used above, the term "Combination Product" means any pharmaceutical
product which comprises the Royalty-bearing Product and other active compounds
and/or ingredients.
Section 1.41. "Non-Vaccine Product" means a product that (a) is not a
Vaccine and (b) comprises (i) a Protein encoded by a Candidate Gene, (ii)
another Protein, the identification or development of which is based upon the
identification of a Candidate Gene, or (iii) a Gene Therapy Drug, the
identification or development of which is based upon the identification of a
Candidate Gene.
Section 1.42. "Party" means AHP or Millennium; "Parties" means AHP and
Millennium.
Section 1.43. "Patent Right(s)" means a patent or patent application and
all divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions and foreign counterparts thereof that is owned or controlled by
Millennium and/or by AHP, or a license to the same to which Millennium and/or
AHP has the right to grant a sublicense, and may be referred to herein as
Millennium Patent Rights, AHP Patent Rights or Joint Patent Rights, as
appropriate.
Section 1.44. "PLA" means a Product License Application filed with the
FDA.
Section 1.45. "Product" means (a) a Small Molecule Product, (b) a
Vaccine Product, or (c) a Modified Drug.
Section 1.46. "Product Patent Blocking Event" means, in any Major Market
Country, the reasonable determination by either Party, based upon advice of
patent counsel, that a license is required under a third party patent in order
to develop, make, have made, use, import, offer for sale or sell a Product, and
it has been definitively determined by AHP that such license is not reasonably
obtainable.
Section 1.47. "Program Know-How" means Millennium Program Know-How and
AHP Program Know-How, collectively, whether or not developed or acquired solely
or jointly by Millennium and/or AHP. Program Know-How includes but is not
limited to Candidate Genes, Validated Targets and Validated Vaccine Candidates.
Section 1.48. "Program Patent Right(s)" means Millennium Program Patent
Rights, AHP Program Patent Rights and Joint Program Patent Rights, collectively.
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<PAGE> 18
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 1.49. "Protein" means any of a class of compounds composed of a
variety of amino acids joined by peptide linkages, including aggregates,
hybrids, fragments and analogs thereof, as well as naturally
post-translationally modified variants thereof (i.e., glycosylated proteins) and
chemically modified versions thereof (e.g., pegylated or liposomally
encapsulated proteins).
Section 1.50. "Requisite Majority" means, with respect to any Management
Committee, a majority of the members of such Management Committee, provided that
such majority must include at least ******* representatives of each Party.
Section 1.51. "Research Program" means, collectively, the Millennium
Research Program and the AHP Research Program.
Section 1.52. "Research Program Plan" means the research plan, as more
fully described in Section 2.2, that sets forth the schedule and goals of the
Research Program, to be attached to this Agreement as Appendix B pursuant to the
provisions of Sections 2.2 and 2.3.
Section 1.53. "Reserve Field" means the disorders set forth in Appendix
A.2, as may be modified from time to time pursuant to the provisions of Section
2.4.
Section 1.54. "Royalty-bearing Modified Drug" means a Modified Drug that
has achieved Discovery Project Team Status, as determined in good faith by the
CNS JMT (or the successor thereto referred to in Section 2.3(a)(i)(C)), at any
time during the period commencing on the Effective Date and ending fifteen (15)
years following the termination of the Research Program.
Section 1.55. "Royalty-bearing Product" means (a) a Royalty-bearing
Small Molecule Product, (b) a Royalty-bearing Vaccine Product, or (c) a
Royalty-bearing Modified Drug.
Section 1.56. "Royalty-bearing Small Molecule Product" means a Small
Molecule Product that has achieved Discovery Project Team Status, as determined
in good faith by the CNS JMT (or the successor thereto referred to in Section
2.3(a)(i)(C)), at any time during the period commencing on the Effective Date
and ending **************************** the termination of the Research Program.
Section 1.57. "Royalty-bearing Vaccine Product" means a Vaccine Product
that has achieved Vaccine Development Status, as determined in good faith by the
Vaccine Management Team (or the
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
successor thereto referred to in Section 2.3(a)(ii)), at any time during the
period commencing on the Effective Date and ending ****************************
the termination of the Research Program.
Section 1.58. "Small Molecule" means a prophylactic or therapeutic agent
the active ingredient of which is a compound of molecular weight equal to or
less than *************, including without limitation peptido mimetics.
Section 1.59. "Small Molecule Product" means any product that is a Small
Molecule that (a) is identified on the basis of its interaction with a Validated
Target in a small molecule screening assay, or (b) is designed or developed
using medicinal chemistry, SAR or combinatorial chemistry techniques to interact
with a Validated Target. For purposes of clarity, any product that comprises a
Protein wherein such product also qualifies as a Small Molecule Product shall be
deemed to be a Small Molecule Product.
Section 1.60. "Steering Committee" means the steering committee, as
described in Section 2.3(a)(iii).
Section 1.61. "Sublicensee" means any third party other than an
Affiliate granted the right, subject to the terms and conditions of Article V,
to make, import, use, offer to sell or sell a Product(s), but not including a
third party that is not granted the right to make such Product(s) but merely
purchases such Product(s) in finished form (ready pack or in bulk) for resale.
Section 1.62. "Technology Patent Blocking Event" means the reasonable
determination by either Party, based upon advice of patent counsel, that a
license is required under a third party United States patent in order to conduct
a substantial portion of the research contemplated hereunder, and it has been
definitively determined that such license is not reasonably obtainable.
Section 1.63. "Territory" means all countries of the world.
Section 1.64. "TPT Access and License Agreement" means the Transcription
Profiling Technology Access and License Agreement between the Parties hereto
that became effective on even date herewith.
Section 1.65. "Vaccine" means a prophylactic or therapeutic agent that
acts by inducing a humoral and/or cell-mediated immune response directed against
an antigen.
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Section 1.66. "Vaccine Development Status" means a discovery research
program that AHP has formally designated as having achieved "Vaccine Development
Status", or such successor comparable internal criteria as AHP may implement in
the future (i.e. AHP has committed to the program the relevant resources to
enable development of a Vaccine), provided that AHP shall apply the criteria for
assessing Vaccine Development Status (or such successor criteria) in a manner
consistent with the criteria applied to other discovery research programs,
including discovery research programs generated through internal research
programs of AHP or its Affiliates.
Section 1.67. "Vaccine Management Team" means the joint management team,
as described in Section 2.3(a)(ii).
Section 1.68. "Vaccine Product" means a Vaccine that derives from a
Validated Vaccine Candidate.
Section 1.69. "Valid Claims" means any claim(s) pending in a patent
application or in an unexpired patent which has not been held unenforceable,
unpatentable or invalid by a decision of a court or other governmental agency of
competent jurisdiction, unappealable or unappealed within the time allowed for
appeal, and which has not been admitted to be invalid or unenforceable through
reissue, reexamination, disclaimer or otherwise.
Section 1.70. "Validated Target" means a biological molecule that (a) is
(i) ****************, (ii) *********************** ************* or (iii)
***********************, the identification of which is based upon the
identification of a **************, and (b) is suitable (i) for use as a target
in a ****************************** (in the case of *************** *********,
is suitable for ********************************* **************, and/or (ii)
for use as the ****************** *********************************. The
determination that such biological molecule has achieved the status of a
Validated Target shall be made in good faith by the CNS JMT on the basis of the
criteria set forth above, as well as the availability of experimental results,
generated by Millennium prior to the Effective Date or by Millennium or jointly
by the Parties in the course of the Research Program, that (A) are proprietary
and potentially patentable, and (B) support a conclusion that intervention of a
small molecule drug in the activity of the target should produce
*******************************************************************************
********************************************************************************
*******************************************************************
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********************************************************************************
*****************************************************.
Section 1.71. "Validated Vaccine Candidate" means a biological molecule
that (a) is (i) ********************** **************, (ii) ***************, the
identification or development of which is based upon the identification of a
**************, or (iii) *******************, the identification or development
of which is based upon the identification of a **************, and (b) is
suitable for development as a Vaccine. The determination that such biological
molecule has achieved the status of a Validated Vaccine Candidate shall be made
in good faith by Vaccine Management Team on the basis of objective criteria to
be set forth in the Research Program Plan with respect to such biological
molecule.
Section 1.72. Additional Definitions. Each of the following definitions
is found in the body of this Agreement as indicated:
"Abandoned Market" 7.4(d)
"AD Notification" 5.7(a)(1)
"Affiliate Agreements" XIV
"AHP Indemnified Parties" XI(b)
"AHP Indemnifying Parties" XI(a)
"Annual Adjustment" 8.3(a)
"Automimmune Disease Program" 5.7(a)
"Bioinformatics Agreement" 2.6(c)
"Breaching Party" 10.2
"Collaboration Summary" 5.3
"Common Stock" 8.2
"Designated Candidate Gene" 5.6
"Equity Election Notice" 8.2
"Exchange Act" Appendix D
"Executive Officers" 2.3(b)(iii)
"Expansion Field Project" 2.4(c)(i)
"Expansion Field Project Proposal" 2.4(c)(i)
"Fair Market Value" 8.2
"First Contract Quarter" 8.3(b)
"Invalidity Claim" 6.9(b)
"Measurement Period" 8.2
"Milestone Payment" 2.4(a)(iv)
"Millennium Indemnified Parties" XI(a)
"Millennium Indemnifying Parties" XI(b)
"Millennium Reserve Field Project" 2.4(b)(iv)
"Mutual Consent Fund" 2.4(a)(ii)
"New Core Field Project" 2.4(a)(i)
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"Non-Breaching Party" 10.2
"Non-Program New Core Field Project" 2.4(a)(iv)
"Other Millennium Projects" 5.4
"Prior Fair Market Value" 8.2
"Product Related Information" 7.4(d)
"Protein Therapeutics" 5.3
"Reimbursement Cost" 2.4(a)(iv)
"Rejected Expansion Field Project" 2.4(c)(ii)
"Rejected Millennium Reserve Field Project" 2.4(b)(iv)
"Reserve Field Project" 2.4(b)(i)
"Reserve Field Project Proposal" 2.4(b)(i)
"Safe Harbor Provisions" 7.5
"Section 6.2 Invention" 6.2(a)
"Section 7.3 Due Diligence Period" 7.3(a)
"Solicitation" Appendix D
"Subsequent Contract Quarter" 8.3(b)
"Termination Notice" 2.5(a)
"Total Potential Voting Power" Appendix D
Article II
Research and Collaboration Program
Section 2.1. Exclusive Arrangement. During the term of the Millennium
Research Program, Millennium agrees that it shall not participate, either alone
or in collaboration with a commercial third party, in any research program in
which genetics and genomics technologies are used to discover genes responsible
for susceptibility to disorders in the CNS Disorders Field (which genes may, in
turn, be used to identify and develop Small Molecules and Vaccines for use in
the CNS Disorders Field), except pursuant to the terms of this Agreement.
Section 2.2. Research Program Plan. The Parties shall engage in the
Research Program to expedite the discovery and development of Candidate Genes,
Validated Targets, Validated Vaccine Candidates and Products in substantial
accordance with the research schedule and goals to be set forth in a Research
Program Plan, to be attached to this Agreement as Appendix B within one hundred
twenty (120) days after the Effective Date (which Research Program Plan is
subject to review and modification by the CNS JMT, the Steering Committee and
final resolution by the Executive Officers, if required, pursuant to Section
2.3(b)). While the Parties recognize that the Millennium Research Program will
be conducted by a greater number of individuals than the number of FTEs to be
devoted thereto, the Parties also acknowledge that full-time staffing is
important to the Millennium Research
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Program. Accordingly, Millennium agrees to provide full-time staffing for the
Millennium Research Program (including a full-time program manager) to the
extent determined to be appropriate by the CNS JMT. Millennium and AHP also
agree to provide staffing for the Millennium Research Program and AHP Research
Program, respectively, that is appropriate, in terms of quantity and
qualifications, to the tasks to be performed from time to time thereunder.
Section 2.3. Research Program Management.
(a) Management Committees.
(i) The CNS JMT.
(A) As soon as practicable after the Effective
Date, the Parties shall establish a CNS JMT,
consisting of four (4) representatives designated
by AHP and four (4) representatives designated by
Millennium. Each Party shall make its initial
designation of its representatives not later than
thirty (30) days after the Effective Date. Each
Party shall cause its representatives to attend the
meetings of the CNS JMT. If a representative of a
Party is unable to attend a meeting, such Party may
designate an alternate to attend such meeting in
place of the missing representative. In addition,
each Party may at its discretion invite non-voting
employees and representatives of its Affiliates, as
well as consultants or scientific advisors
reasonably acceptable to the other Party, to attend
the meetings of the CNS JMT (provided that such
attendees are bound by obligations of
confidentiality). The CNS JMT shall meet no less
frequently than once each calendar quarter, and
shall meet at such other times as deemed
appropriate by the CNS JMT. Each Party may change
any one or more of its representatives to the CNS
JMT at any time upon notice to the other Party. The
location of the CNS JMT meetings shall alternate
between Cambridge, Massachusetts and a Wyeth-Ayerst
Research facility in Pennsylvania, New York or New
Jersey, or as otherwise mutually agreed.
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(B) Within ninety (90) days after the Effective
Date, the CNS JMT shall (1) agree on the specific
research projects to be initially pursued under the
Research Program, and (2) prepare the Research
Program Plan and related budget for the first
Contract Year, for submission to the Steering
Committee. The CNS JMT shall oversee the disclosure
and transfer of relevant Know-How to facilitate the
research and development of Candidate Genes,
Validated Targets and Products, as well as the
disclosure and transfer of Millennium Program
Know-How to AHP pursuant to Article III, and the
disclosure of AHP Program Know-How to Millennium
pursuant to Article III. In addition, the CNS JMT
shall be responsible for determining whether or not
a biological molecule has achieved Candidate Gene
or Validated Target status. At each meeting of the
CNS JMT, the progress of the Research Program shall
be reviewed and, if necessary, the short-term goals
and/or resource allocation for the Millennium
Research Program shall be modified. No later than
the end of the first month of the second Contract
Year and each subsequent Contract Year during the
Millennium Research Program, the CNS JMT shall meet
to discuss in detail the progress of the Research
Program and agree upon the short-term goals for the
Millennium Research Program and to prepare
amendments to the Research Program Plan as
necessary, to be approved by the Steering
Committee. In the event that a significant
development occurs which may affect the short- or
long-term goals or resource allocations of the
Research Program or methods of achieving said
goals, the CNS JMT shall reconvene, reassess and
change such methods, resource allocations and/or
goals of the Millennium Research Program, subject
to the approval of the Steering Committee. In the
event that a Party submits to the CNS JMT a
proposal to expand the Core Field pursuant to
Section 2.4, the CNS JMT shall reconvene to
evaluate such proposal and, if necessary, to
prepare its recommendation to the Steering
Committee with respect to such proposal.
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(C) The CNS JMT shall function during the term of
the Research Program and thereafter until the
provision of the Final Inventory (as that term is
defined in Section 7.1) and modifications thereto.
Thereafter, the Parties shall implement a mutually
agreeable committee or other body to make
determinations as to whether Modified Drugs or
Small Molecule Products have achieved Discovery
Project Team Status.
(ii) Vaccine Management Team. In the event that the
Research Program Plan, as modified from time to time,
provides for research and development activities relating
to a Vaccine, the Parties shall, as soon thereafter as is
practicable, establish the Vaccine Management Team,
consisting of an equal number of representatives of each
Party. The administration and duties of the Vaccine
Management Team shall be identical to the administration
and duties of the CNS JMT, but as applied solely to
Vaccines. The Vaccine Management Team shall function during
the term of the Research Program and thereafter until the
provision of the Final Inventory and modifications thereto.
Thereafter, the Parties shall implement a mutually
agreeable committee or other body to make determinations as
to whether Vaccine Products have achieved Vaccine
Development Status.
(iii) The Steering Committee.
(A) As soon as practicable after the Effective
Date, the Parties shall establish a Steering
Committee, consisting of three (3) representatives
designated by AHP and three (3) representatives
designated by Millennium. Each Party shall make its
initial designation of its representatives not
later than thirty (30) days after the Effective
Date. Each Party shall cause its representatives to
attend the meetings of the Steering Committee. If a
representative of a Party is unable to attend a
meeting, such Party may designate an alternate to
attend such meeting in place of the missing
representative. In addition, each Party may at its
discretion invite non-voting employees (including
without limitation members of the CNS JMT or
Vaccine Management Team) and representatives of its
Affiliates, as well as consultants or scientific
advisors reasonably acceptable to the other Party,
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to attend the meetings of the Steering Committee
(provided that such attendees are bound by
obligations of confidentiality). The Steering
Committee shall meet no less frequently than once
each calendar year, and shall meet at such other
times as may be requested by either Party. Each
Party may change any one or more of its
representatives to the Steering Committee at any
time upon notice to the other Party. The location
of the Steering Committee meetings shall alternate
between Cambridge, Massachusetts and a Wyeth-Ayerst
Research facility in Pennsylvania, New York or New
Jersey, or as otherwise mutually agreed.
(B) Within thirty (30) days after the receipt by
the Steering Committee of the Research Program Plan
and budget for the first Contract Year, the
Steering Committee shall review, modify, if
necessary, and approve the Research Program Plan
and related budget prepared and submitted to it by
the CNS JMT. At each meeting of the Steering
Committee, the progress of the Research Program
shall be reviewed and any modifications by the CNS
JMT of the short-term goals and/or resource
allocation for the Millennium Research Program
shall be evaluated. Other responsibilities of the
Steering Committee shall include, without
limitation, (1) the review of any determination by
the CNS JMT that a biological molecule has achieved
Candidate Gene, Validated Target or Validated
Vaccine Candidate status, (2) the evaluation of any
recommendation made by the CNS JMT to the Steering
Committee with respect to the expansion of the Core
Field, pursuant to Section 2.4, (3) the
determination, if necessary, of the Year Five
Extension Benchmark, pursuant to Section 2.5, (4)
changes in funding pursuant to Section 8.3, and (5)
resolution of matters for which the CNS JMT or
Vaccine Management Team is unable to reach
agreement by a Requisite Majority.
(C) The Steering Committee shall function during
the term of the Research Program and thereafter for
as long as both Parties agree. Thereafter, the
Parties shall implement a mutually agreeable
committee or other body to facilitate (i) the
resolution of issues as to which the CNS JMT is
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unable to reach agreement by a Requisite Majority,
and (ii) the continuing exchange of information
regarding the AHP Discovery Program and the
commercialization of Products.
(b) Management Committee Decisions. The Parties agree
that the objective of the Management Committees shall be to
resolve all matters unanimously. However, in the absence of
unanimity, the following rules shall apply:
(i) CNS JMT. The agreement of a Requisite Majority
of the CNS JMT shall be required to take any action.
Any member of the CNS JMT who is not present at any
meeting either in person or by designated alternate may
appoint another representative or alternate as his/her
proxy on his/her behalf on all matters coming to a
vote. The CNS JMT may conduct meetings by telephone or
video conference. If the CNS JMT is unable to reach
agreement by a Requisite Majority on any issue within
its purview, such issue shall be referred to the
Steering Committee.
(ii) Vaccine Management Team. The agreement of a
Requisite Majority of the Vaccine Management Team shall
be required to take any action. Any member of the
Vaccine Management Team who is not present at any
meeting either in person or by designated alternate may
appoint another representative or alternate as his/her
proxy on his/her behalf on all matters coming to a
vote. The Vaccine Management Team may conduct meetings
by telephone or video conference. If the Vaccine
Management Team is unable to reach agreement by a
Requisite Majority on any issue within its purview,
such issue shall be referred to the Steering Committee.
(iii) The Steering Committee. The agreement of a
Requisite Majority of the members of the Steering
Committee shall be required to take any action. Any
member of the Steering Committee who is not present at
any meeting either in person or by designated alternate
may appoint another representative or alternate as
his/her proxy on his/her behalf on all matters coming
to a vote. The Steering Committee may conduct meetings
by telephone or video conference. If the Steering
Committee is unable to reach a decision by a Requisite
Majority on any issue within its purview, including
without
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limitation unresolved issues referred to it by the CNS
JMT or Vaccine Management Team, such issue shall be
referred to the President of Wyeth-Ayerst Research
Laboratories and the Chief Executive Officer of
Millennium (the "Executive Officers") for resolution.
(iv) Decisions by the Executive Officers. The
Executive Officers shall have the authority to resolve
issues referred to them by the Steering Committee, as
well as other issues designated in this Agreement for
resolution by the Executive Officers. It is the
intention of the Parties that any issue referred to the
Executive Officers shall be resolved by negotiation in
good faith as soon as practicable but no later than
thirty (30) days after its referral. Each Executive
Officer shall have the right to engage the services of
any number of independent experts in the field in
question (the individual so engaged by each Executive
Officer to be reasonably acceptable to the other
Executive Officer in terms of independence and
expertise, and shall be engaged under obligations of
confidentiality) to assist the Executive Officer in
making a joint determination in the best interests of
the collaboration, and each Executive Officer shall be
obligated to consider in good faith the analyses and
opinions of any such independent experts engaged by
either of them in making a determination. Such
resolution, if any, of a referred issue shall be final
and binding on the Parties, and the Parties shall
instruct the members of the Steering Committee
designated by them to approve such resolution.
Section 2.4. Mechanism For Expansion of Collaboration.
(a) New Core Field Projects.
(i) Assessment by Management Committees. Commencing
with the beginning of ********* Contract Year and from
time to time thereafter during the term of the Research
Program, Millennium or AHP may submit to the CNS JMT
research plans for projects within the Core Field not
then currently in the Research Program and which may
require funding above the minimum budget specified in
the Research Program Plan (a "New Core Field Project").
Within thirty (30) days after the submission of a
research plan for a New Core Field Project, the CNS JMT
shall consider in good faith, and
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make a decision with respect to, the merits of such
project, including its scientific feasibility, its
commercial utility and its priority relative to other
projects in the Research Program at that time. In the
event that the CNS JMT decides that the New Core Field
Project has merit and can be undertaken within the
scope of the minimum budget specified in the Research
Program Plan (including through a replacement of an
existing project), the CNS JMT shall (A) incorporate
the New Core Field Project into the Research Program;
and (B) notify the Steering Committee of its decision.
In the event that the CNS JMT decides that the New Core
Field Project does not have merit, it shall so inform
the Parties and Millennium shall have the right but not
the obligation to undertake such project as a
Non-Program New Core Field Project (as that term is
defined in Section 2.4(a)(iv)). In the event that the
CNS JMT decides that the New Core Field Project has
merit but requires funding above the minimum budget
specified in the Research Program Plan, the CNS JMT
shall submit its decision to the Steering Committee for
evaluation. In the event that the CNS JMT is unable to
reach a decision with respect to the merit of a New
Core Field Project, the matter shall be referred to the
Steering Committee for resolution.
Within ********** days of receipt of (X) a
recommendation from the CNS JMT that a New Core Field
Project should be incorporated into the Research
Program with additional funding, or (Y) a request from
the CNS JMT to resolve the matter of whether a New Core
Field Project should be incorporated into the Research
Program, the Steering Committee shall consider in good
faith, and make a decision with respect to, the merits
of the project, including its scientific feasibility,
its commercial utility and its priority relative to
other projects in the Research Program at the time. In
the event that the Steering Committee decides that the
New Core Field Project has merit and can be undertaken
within the scope of the existing budget (including
through a replacement of an existing project), the
Steering Committee shall instruct the CNS JMT to
incorporate the New Core Field Project into the
Research Program. In the event that the Steering
Committee decides that the New Core Field Project does
not have merit, it shall inform the CNS JMT and
Millennium shall have the right but not the obligation
to undertake such
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project as a Non-Program New Core Field Project (as
that term is defined in Section 2.4(a)(iv)). In the
event that the Steering Committee decides that the New
Core Field Project has merit but requires funding above
the minimum budget specified in the Research Program
Plan, the Steering Committee shall (I) instruct the CNS
JMT to incorporate the New Core Field Project into the
Research Programs, and (II) approve funding, pursuant
to the provisions set forth in Section 2.4(a)(ii),
through either the use of the Mutual Consent Fund (as
that term is defined in Section 2.4(a)(ii)) or through
an increase by AHP in the budget of the Research
Program.
(ii) Additional Funding for New Core Field
Projects. In the event that the Steering Committee or,
if necessary, the Executive Officers approve(s)
additional funding to permit the incorporation of a New
Core Field Project into the Research Program, such
funding shall be guaranteed and provided from one of
two sources. The Steering Committee shall have the
right to release funds in support of a New Core Field
Project from a mutual consent fund (the "Mutual Consent
Fund") which shall operate as follows: Funds from the
Mutual Consent Fund that have been approved by the
Steering Committee for expenditure shall be provided by
Millennium, provided, however, that (A) Millennium's
expenditures funded through the Mutual Consent Fund
shall not exceed ********************************* in
any Contract Year and Millennium's total expenditures
from the Mutual Consent Fund shall not exceed *******
**************************************************
****************, (B) Millennium shall provide AHP with
a quarterly accounting of its Mutual Consent Fund
expenditures, and (C) Millennium shall submit to AHP an
annual invoice indicating Millennium's Mutual Consent
Fund expenditures during a Contract Year within thirty
(30) days after the end of such Contract Year (and a
final bill within thirty (30) days after the end of the
Research Program) for reimbursement and AHP shall
reimburse Millennium for such expenditures with
thirty-one (31) days after AHP's receipt of such
invoice. Alternatively, the Steering Committee may
decide that additional funding to permit the
incorporation of a New Core Field Project into the
Research Program shall be provided directly by AHP
through an increase in the budget of the Research
Program and not through the Mutual Consent Fund.
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(iii) Consequence of Incorporation of a New Core
Field Project into the Research Program. In the event
that a New Core Field Project is incorporated into the
Research Program, all rights and obligations set forth
in this Agreement with respect to any project within
the Research Program shall apply to such New Core Field
Project.
(iv) Non-Program New Core Field Project. In the
event that (A) the CNS JMT or the Steering Committee
or, if necessary, the Executive Officers decide(s) that
a New Core Field Project does not have merit and,
accordingly, should not be incorporated into the
Research Program, (B) the Steering Committee or, if
necessary, the Executive Officers decide(s) that a New
Core Field Project should be incorporated into the
Research Program with increased funding but that such
funding shall not be provided directly by AHP and the
funds available through the use of the Mutual Consent
Fund have been exhausted, or (C) neither the Management
Committees nor the Executive Officers can reach a
decision with respect to the proposed incorporation of
a New Core Field Project into the Research Program,
then Millennium shall have the right but not the
obligation to undertake such New Core Field Project as
a non-program New Core Field Project (a "Non-Program
New Core Field Project"). Such Non-Program New Core
Field Project shall be managed and funded entirely by
Millennium, provided, however, that Millennium (X)
shall
*****************************************************
*********** with respect to such Non-Program New Core
Field Project, ***********************************, (Y)
shall provide the CNS JMT with quarterly updates of the
progress on any such Non-Program New Core Field
Project, and (Z) shall *****************************,
***************************************************, to
*********** such Non-Program New Core Field Project
**** ********************.
In the event that ************************,
pursuant to this Section 2.4(a)(iv), ************** a
Non-Program New Core Field Project *****************
*********************************** set forth in this
Agreement with respect to any project within the
**************** shall apply to such New Core Field
Project, and all Know-How and Patent Rights developed
or acquired by Millennium in the course of such
Non-Program
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New Core Field Project ******************************
******************** shall be deemed to be **********
**************** and ********************************,
respectively. *************************** at any time
during the term of the Research Program as follows: (1)
during the first year of funding by Millennium of the
Non-Program New Core Field Project, **************
**************************************************
************ reasonably allocable (such allocation to
be consistently applied by Millennium and confirmed by
Millennium's certified public accountants) to the
relevant Non-Program New Core Field Project that
Millennium has incurred from the date on which such
project was initiated until the date on which the
option is exercised, including but not limited to
************* *********************************** and
the costs attributable to ************************* or
******** ******** which are directly attributable to
such Non-Program New Core Field Project, as determined
in a manner consistent with Section 8.3 (the
************** *****); plus
******************************************* ********
which would have been paid under Section 8.4 had the
Non-Program New Core Field Project been a part of the
Research Program from such project's inception (a
*******************); and (2) during the second and
each subsequent year of funding by Millennium of the
Non-Program New Core Field Project, by paying
Millennium *** **************************** of the
*******************; plus ************************** of
any Milestone Payment.
(b) Reserve Field Projects.
(i) Assessment by Management Committees. Commencing
with the beginning of the ******************** and from
time to time thereafter during the term of the Research
Program, Millennium or AHP may submit to the CNS JMT
research plans for projects within the Reserve Field not
then currently in the Research Program (a "Reserve Field
Project"), provided, however, that (A) research proposals
for a Reserve Field Project with respect to
************************* may be submitted to the CNS JMT
commencing with the beginning of the ********************,
(B) Millennium may not submit more than *****************
for Reserve Field Projects (a "Reserve Field Project
Proposal") in any ***************** period, and (C) the
Parties may at any time during the term of the Research
Program agree to incorporate a project within the
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Reserve Field into the Research Program and the disease that is the subject of
such project shall become a part of the **********. The Parties hereby agree
that a Reserve Field Project Proposal shall include, without limitation, a
clear, well defined, scientific rationale that may reasonably lead to the
discovery of Validated Target(s) and/or Validated Vaccine Candidate(s) of
sufficient importance in the target disease that small molecule drugs directed
against those Validated Target(s) and/or Vaccines derived from such Validated
Vaccine Candidate(s) should offer a meaningful clinical advance.
As soon as practicable but no later than thirty (30) days after the
submission of a Reserve Field Project Proposal, the CNS JMT shall consider in
good faith, and make a decision with respect to, the merits of the project that
is the subject of such proposal, including its scientific feasibility, its
commercial utility and its priority relative to other projects in the Research
Program at that time. In the event that the CNS JMT decides that the Reserve
Field Project has merit and can be undertaken within the scope of the minimum
budget specified in the Research Program Plan (including through a replacement
of an existing project), the CNS JMT shall incorporate the Reserve Field Project
into the Research Program upon approval by the Steering Committee. In the event
that the CNS JMT decides that (X) the Reserve Field Project does not have merit
or (Y) the Reserve Field Project has merit but requires funding above the
minimum budget specified in the Research Program Plan, the CNS JMT shall submit
its decision to the Steering Committee for evaluation. In the event that the CNS
JMT is unable to reach a decision with respect to the merit of a Reserve Field
Project, the matter shall be referred to the Steering Committee for resolution.
As soon as practicable but no later than *************** after receipt
of (I) a recommendation from the CNS JMT that a Reserve Field Project should not
be incorporated into the Research Program, (II) a recommendation from the CNS
JMT that a Reserve Field Project should be incorporated into the Research
Program with additional funding, or (III) a request from the CNS JMT to resolve
the matter of whether a Reserve Field Project should be incorporated into the
Research Program, the Steering Committee shall consider in good faith, and make
a decision with respect to, the merits of the project, including its scientific
feasibility, its commercial utility and its priority relative to other projects
in the
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Research Program at the time. In the event that the Steering Committee decides
that the Reserve Field Project has merit and can be undertaken within the scope
of the existing budget (including through a replacement of an existing project),
the Steering Committee shall instruct the CNS JMT to incorporate the Reserve
Field Project into the Research Program. In the event that the Steering
Committee decides that the Reserve Field Project does not have merit, it shall
so inform the CNS JMT. For any such project that was submitted to the CNS JMT by
Millennium, Millennium shall have the right but not the obligation to undertake
such project as a Rejected Millennium Reserve Field Project (as that term is
defined in Section 2.4(b)(iv)), provided, however, that if the Steering
Committee decides that the proposed Reserve Field Project lacks merit but that
nevertheless there is merit in initiating a different project that targets the
disease that is the subject of the rejected Reserve Field Project Proposal, then
the Steering Committee may instruct the CNS JMT to submit, within thirty (30)
days after the receipt of such instruction, a Reserve Field Project Proposal
describing a new project that targets such disease for evaluation by the
Steering Committee pursuant to the provisions of this Section 2.4(b)(i),
provided, further, that the Steering Committee may take this action only one (1)
time with respect to each disease in the Reserve Field. In the event that the
Steering Committee decides that the Reserve Field Project has merit but requires
funding above that specified in the minimum budget set forth in the Research
Program Plan, the Steering Committee shall (1) instruct the CNS JMT to
incorporate the Reserve Field Project into the Research Programs; and (2)
approve funding, pursuant to the provisions set forth in Section 2.4(b)(ii)
below, either through the use of the Mutual Consent Fund or through an increase
by AHP in the budget of the Research Program.
(ii) Additional Funding for Reserve Field Projects. In the event that
the Steering Committee or, if necessary, the Executive Officers approve(s)
additional funding to permit the incorporation of a Reserve Field Project into
the Research Program, such funding shall be guaranteed and provided from one of
two sources. The Steering Committee shall have the right to release funds in
support of a Reserve Field Project from the Mutual Consent Fund, which shall
operate as set forth in Section 2.4(a)(ii). Alternatively, the Steering
Committee may decide that additional funding to permit the incorporation of a
Reserve Field Project into the Research Program shall be provided directly by
AHP through an
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
increase in the budget of the Research Program and not through the Mutual
Consent Fund.
(iii) Consequence of Incorporation of a Reserve Field Project into the
Research Programs. In the event that a Reserve Field Project is incorporated
into the Research Program, (A) ************************** set forth in the
Agreement with respect to ************ within the ******** ******* shall apply
to **************************, and (B) the disease that is the subject of such
Reserve Field Project shall become a part of the Core Field and shall no longer
be a part of the Reserve Field.
(iv) Rejected Millennium Reserve Field Project. In the event that (A) a
Reserve Field Project is submitted to the CNS JMT by Millennium (a "Millennium
Reserve Field Project") and (B) (1) the Steering Committee, or if necessary, the
Executive Officers decide(s) that such Millennium Reserve Field Project does not
have merit and, accordingly, should not be incorporated into the Research
Program (and no alternative project targeting the disease that is the subject of
such Millennium Reserve Field Project is identified pursuant to the terms of
Section 2.4(b)(i)), (2) the Steering Committee or, if necessary, the Executive
Officers decide(s) that such Millennium Reserve Field Project should be
incorporated into the Research Program with increased funding but the funds
available through the use of the Mutual Consent Fund have been exhausted and AHP
does not agree to provide the recommended additional funding, or (3) neither the
Management Committees nor the Executive Officers can reach a decision with
respect to the proposed incorporation of such Millennium Reserve Field Project
into the Research Program, then the disease that is the subject of such rejected
Millennium Reserve Field Project (a "Rejected Millennium Reserve Field Project")
shall cease to be a part of the Reserve Field and shall become part of the
Expansion Field (see Section 2.4(c)). The specific Rejected Millennium Reserve
Field Project shall be deemed a Rejected Expansion Field Project (see Section
2.4(c)) and shall be handled accordingly. For the sake of clarity, a disease can
cease to be a part of the Reserve Field and become a part of the Expansion Field
only if such disease is the subject of a Rejected Millennium Reserve Field
Project.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(c) Expansion Field Projects
(i) Assessment by Management Committees. Commencing
***************************** after the Effective Date and from time to
time thereafter during the term of the Research Program, Millennium or
AHP may submit to the CNS JMT research plans for projects within the
Expansion Field not then currently in the Research Program (an
"Expansion Field Project"). Within thirty (30) days after the submission
of a proposal for an Expansion Field Project (an "Expansion Field
Project Proposal"), the CNS JMT shall consider in good faith, and make a
recommendation to the Steering Committee with respect to, the merits of
such project, including its scientific feasibility and its commercial
utility.
As soon as practicable but no later *********** ********* after
receipt of (X) a recommendation from the CNS JMT that an Expansion Field
Project should not be incorporated into the Research Program, (Y) a
recommendation from the CNS JMT that an Expansion Field Project should
be incorporated into the Research Program with additional funding, or
(Z) a request from the CNS JMT to resolve the matter of whether an
Expansion Field Project should be incorporated into the Research
Program, the Steering Committee shall consider in good faith, and make a
decision with respect to, the merits of the project, including its
scientific feasibility and its commercial utility. In the event that the
Steering Committee decides that the Expansion Field Project does not
have merit, it shall so inform the CNS JMT and Millennium shall have the
right but not the obligation to undertake such project as a Rejected
Expansion Field Project (as that term is defined in Section 2.4(c)(ii)
below). In the event that the Steering Committee decides that the
Expansion Field Project has merit, the Steering Committee shall instruct
the Parties to enter into good faith negotiations, pursuant to the
provisions set forth in Section 2.4(c)(ii) below.
(ii) Negotiations with respect to Expansion Field Projects. In the
event that the Steering Committee or, if necessary, the Executive
Officers instruct(s) the Parties to enter into good faith negotiations
with respect to an Expansion Field Project, then the Parties shall have
a period of ***************** days in which to agree to, and to prepare
a definitive agreement
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
reflecting, the terms and conditions pursuant to which such Expansion
Field Project shall be funded by AHP. In the event that (A) the Steering
Committee or, if necessary, the Executive Officers decide(s) that an
Expansion Field Project does not have merit, (B) neither the Management
Committees nor the Executive Officers can reach a decision with respect
to an Expansion Field Project, or (C) the Parties fail to reach a
definitive agreement with respect to an Expansion Field Project within
****************, pursuant to this Section 2.4(c)(ii), then Millennium
shall have the right but not the obligation to undertake the rejected
Expansion Field Project (a "Rejected Expansion Field Project") either
alone or in collaboration with a third party, provided, however, that
(i) Millennium shall only have this right with respect to a project that
was submitted to the CNS JMT by Millennium and (ii) Millennium shall
************************************************************************
************* *********** with respect to a Rejected Expansion Field
Project pursuant to an agreement, *************************************
******************************************************. If Millennium
enters into a collaboration with a commercial third party relating to
such Rejected Expansion Field Project, then the disease that is the
target of such Rejected Expansion Field Project shall cease to be part
of the CNS Disorders Field. In the event that prior to entering into a
collaboration with a commercial third party with respect to the Rejected
Expansion Field Project, either (x) ********************* or information
********** ********* the scientific *********** of the Rejected
Expansion Field Project ****************** by Millennium, or (y)
Millennium intends to pursue additional projects relating to the disease
that is the target of such Rejected Expansion Field Project, such
projects shall be submitted to the CNS JMT as a new Expansion Field
Project and handled as described in this Section 2.4(c).
Section 2.5. Term of the Millennium Research Program; Extension
Benchmarks.
(a) Millennium shall conduct the Millennium Research Program for
the first seven (7) Contract Years; provided, however, that AHP may
terminate the Millennium Research Program by providing notice to
Millennium (the "Termination Notice") (i) at any time during the ten
(10) Business Day
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
period following the conclusion of the third Contract Year, if, at the
conclusion of the third Contract Year, the Year Three Extension
Benchmark (as that term is defined below) has not been achieved, or (ii)
at any time during the ten (10) Business Day period following the
conclusion of the fifth Contract Year, if, at the conclusion of the
fifth Contract Year, the Year Five Extension Benchmark (to be determined
by the Steering Committee as described below) has not been achieved. As
used herein, the term "Year Three Extension Benchmark" means that at
least ************************* have been identified (i.e., have met the
criteria for ****************** and **********************************
***********************************************************************
*********************************************************************
*********), provided that the foregoing criteria for the Year Three
Extension Benchmark shall be subject to modification to be agreed upon
in good faith based upon the prioritization of research within the
Millennium Research Program (e.g., such criteria could include
*************************** to the extent work thereon is contemplated
by the Research Program Plan). In the event that the term of the
Millennium Research Program is extended to at least five (5) Contract
Years, the Year Five Extension Benchmark will be determined in good
faith by the Steering Committee within ninety (90) days following the
commencement of the fourth Contract Year.
(b) If Millennium achieves the Year Three Extension Benchmark, then
the Millennium Research Program shall continue for at least an
additional two (2) Contract Years at the level of funding set forth in
Budget 1 in Section 8.3(a) and, upon the election of Millennium, AHP
shall make the required equity purchase set forth in Section 8.2. If
Millennium fails to achieve the Year Three Extension Benchmark but AHP
does not elect to terminate the Millennium Research Program as a result
thereof, then the Millennium Research Program shall, at AHP's option and
with no equity purchase by AHP pursuant to Section 8.2, continue for at
least an additional two (2) Contract Years at the level of funding set
forth for those Contract Years in Budget 2 in Section 8.3(a). The
foregoing choice shall be made by AHP within ten (10) Business Days
following the conclusion of the third Contract Year. In the event that
AHP elects to extend the term of the Millennium Research Program
pursuant to this Section 2.5(b) and Millennium achieves the Year Five
Extension Benchmark, AHP shall be obligated, upon the
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election of Millennium, to make the equity purchase triggered by such
achievement, as set forth in Section 8.2.
(c) If the term of the Millennium Research Program is extended to
at least five (5) Contract Years, and Millennium fails to achieve the
Year Five Extension Benchmark but AHP does not elect to terminate the
Millennium Research Program as a result thereof, then the Millennium
Research Program shall, at AHP's option and with no equity purchase by
AHP pursuant to Section 8.2, continue for the remaining two (2) Contract
Years of the seven (7) Contract Year Term at the reduced level of
funding set forth in Budget 2 in Section 8.3(a) if Millennium had not
achieved the Year Three Extension Benchmark or Budget 3 in Section
8.3(a) if Millennium had achieved the Year Three Extension Benchmark.
The foregoing choice shall be made by AHP within ten (10) Business Days
following the conclusion of the fifth Contract Year.
(d) If Millennium achieves both the Year Three Extension Benchmark
and the Year Five Extension Benchmark, then the Millennium Research
Program shall continue for the entire seven (7) Contract Year term at
the funding level set forth in Budget 1 in Section 8.3(a) and AHP, at
the election of Millennium, shall make both equity purchases set forth
in Section 8.2.
Section 2.6. Termination of the Millennium Research Program. In addition
to the right of AHP to terminate the Millennium Research Program pursuant to
Section 2.5 in the event that the Year Three Extension Benchmark or Year Five
Extension Benchmark is not achieved, AHP shall have the following rights to
terminate the Millennium Research Program:
(a) Termination Upon Change of Control. AHP shall have the right to
terminate the Millennium Research Program upon the occurrence of a Change of
Control during the term of the Millennium Research Program by providing written
notice of termination to Millennium within sixty (60) days following receipt of
written notice of the occurrence of such Change of Control. Millennium agrees to
provide AHP with written notice of a Change of Control within ten (10) Business
Days following the occurrence thereof.
(b) Termination Upon a Change in Strategic Direction or a
Technology Patent Blocking Event. AHP shall have the right to terminate the
Millennium Research Program (i) upon the occurrence
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of a Change in Strategic Direction by providing written notice of termination to
Millennium indicating its belief that such a Change in Strategic Direction has
occurred and specifying its reasons for such belief, or (ii) in the event that a
Technology Patent Blocking Event has occurred by providing written notice of
termination to Millennium indicating its belief that a Technology Patent
Blocking Event has occurred and specifying its reasons for such belief. Such
termination shall be effective sixty (60) days following Millennium's receipt of
any such notice unless Millennium, during such sixty (60) day period, objects in
writing to such termination and provides reasons for its belief that a Change in
Strategic Direction or a Technology Patent Blocking Event, as applicable, has
not occurred. Any disagreement relating to the occurrence of a Change in
Strategic Direction or a Technology Patent Blocking Event, as applicable, shall
be resolved by the Executive Officers pursuant to Section 2.3(b)(iv) above..
(c) Termination Upon Certain Unsuccessful Technology Transfers. AHP
shall have the right to terminate the Millennium Research Program during the
period beginning on the first day of the fourth Contract Year and ending ninety
(90) days thereafter in the event that (a) AHP has terminated the TPT Access and
License Agreement and (i) AHP has made one or more requests for a transfer of
MTPT, including a request for RADE (as such terms are defined in the TPT Access
and License Agreement), and (ii) there has not occurred at least one (1)
Successful Transfer (as defined in the TPT Access and License Agreement); or (b)
AHP has terminated the software license agreement between Millennium and AHP
effective as of August 1, 1996 (the "Bioinformatics Agreement") on the basis
that Millennium failed to complete the initial installation of the Millennium
Bioinformatics Technology in accordance with the Acceptance Criteria (as such
terms are defined in the Bioinformatics Agreement). Any such termination shall
be effected by written notice from AHP to Millennium provided during the ninety
(90) day period specified above, and shall be effective sixty (60) days after
such notice.
(d) For the sake of clarity, the termination of the Millennium
Research Program, pursuant to this Section 2.6, shall not constitute a
termination of this Agreement.
Section 2.7. Diligence. The Parties shall (a) use reasonable efforts in
pursuing and conducting research and development of all Candidate Genes,
Validated Targets, Validated Vaccine Candidates and related assays developed
under the Research Program; (b) furnish, maintain and preserve suitable and
sufficient laboratory facilities, equipment and personnel for the
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research and development to be undertaken by the Parties in the course of the
Research Program; (c) perform their obligations hereunder in good faith in a
scientifically/commercially reasonable and workpersonlike manner; and (d) use
reasonable efforts to carry out all work done in connection with the Research
Program in compliance with any federal, state or local laws, regulations and
guidelines governing the conduct of such work.
Article III
Disclosure of Know-How
Section 3.1. Millennium Know-How. Commencing on the Effective Date,
Millennium shall disclose to AHP all existing Millennium Program Know-How which
Millennium reasonably believes to be necessary to the Research Program, as
described in the Research Program Plan. Millennium shall disclose to AHP on an
ongoing basis for the duration of the Millennium Research Program all additional
Millennium Program Know-How which Millennium reasonably believes to be necessary
to the successful execution of the Research Program, as described in the
Research Program Plan. Notwithstanding the foregoing, Millennium need not
disclose to AHP any Know-How which Millennium is precluded from disclosing under
any agreement binding upon it pursuant to any of the agreements listed in
Appendix C, as amended by Millennium from time to time, provided, however, that
Millennium shall not, without the prior written consent of AHP, enter into any
future agreement with a third party relating to the Millennium Program Know-How
which would limit the ability of Millennium to disclose Millennium Program
Know-How to AHP pursuant to the provisions of this Agreement or is otherwise
inconsistent with the licenses granted by Millennium to AHP in the CNS Disorders
Field under this Agreement.
Section 3.2. Biological Materials. Millennium shall also provide AHP
with Millennium Program Know-How in the form of genes, gene fragments, vectors,
cell lines, strains, transgenic organisms, model organisms, DNA and DNA
fragments and other biological materials, as well as information relating to
such materials, which Millennium reasonably believes to be necessary to AHP's
activities in the Research Program, as described in the Research Program Plan,
and the AHP Discovery Program. Notwithstanding the foregoing, Millennium need
not provide AHP with any such biological materials or related information which
Millennium is precluded from providing under any agreement binding upon it
pursuant to any of the agreements listed in Appendix C, as
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amended by Millennium from time to time, provided, however, that Millennium
shall not, without the prior written consent of AHP, enter into any future
agreement with a third party relating to the Millennium Program Know-How which
would limit the ability of Millennium to provide AHP, pursuant to this Section
3.2, with the biological materials and related information which Millennium
reasonably believes to be necessary to AHP's activities in the Research Program
and the AHP Discovery Program.
Section 3.3. AHP Program Know-How. AHP shall disclose to Millennium such
AHP Program Know-How which AHP reasonably believes is necessary for Millennium
to carry out its obligations within the Millennium Research Program, as
described in the Research Program Plan; provided, however, that AHP need not
disclose to Millennium any AHP Program Know-How which AHP is precluded from
disclosing under any agreement binding upon it.
Article IV
Confidentiality
Section 4.1. Confidential Information and Know-How. All Know-How or
other Confidential Information disclosed by one Party to the other during the
term of this Agreement shall not be used by the receiving Party except in
connection with the Research Program or the identification, selection,
preparation, development, manufacture or sale of Products, shall be maintained
in confidence by the receiving Party (except to the extent reasonably necessary
for regulatory approval of Products developed by AHP), and shall not otherwise
be disclosed by the receiving Party to any other person, firm, or agency,
governmental or private, without the prior written consent of the disclosing
Party, except to the extent that the Know-How or other Confidential Information:
(a) was known or used by the receiving Party prior to its date
of disclosure to the receiving Party; or
(b) either before or after the date of the disclosure to the
receiving Party is lawfully disclosed to the receiving Party by sources
other than the disclosing Party rightfully in possession of the
Confidential Information; or
(c) either before or after the date of the disclosure to the
receiving Party becomes published or generally known to the public,
other than through the sale of Products in the
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ordinary course, through no fault or omission on the part of the
receiving Party or its Sublicensees; or
(d) is independently developed by or for the receiving Party
without reference to or reliance upon the Confidential Information; or
(e) is required to be disclosed by the receiving Party to comply
with applicable laws, to defend or prosecute litigation or to comply
with governmental regulations, provided that the receiving Party
provides prior written notice of such disclosure to the other Party and
takes reasonable and lawful actions to avoid and/or minimize the degree
of such disclosure.
Section 4.2. Employee Obligations. Millennium and AHP each agree that it
shall provide Know-How and other Confidential Information received from the
other Party only to its employees, consultants and advisors, and to the
employees, consultants and advisors of such Party's Affiliates, who have a need
to know and have an obligation to treat such information and materials as
confidential.
Section 4.3. Publications. The Parties acknowledge that scientific lead
time is a key element of the value of the research to be performed under this
Agreement and further agree that scientific publications must be strictly
monitored to prevent any adverse effect of premature publication of results of
the Research Program. The CNS JMT shall establish a procedure for publication
review and approval and each Party shall first submit to the other Party an
early draft of all such publications, whether they are to be presented orally or
in written form, at least sixty (60) days prior to submission for publication.
Each Party shall review each such proposed publication in order to avoid the
unauthorized disclosure of a Party's Confidential Information and to preserve
the patentability of inventions arising from the research performed in the
course of the Research Program and/or the AHP Discovery Program. If, as soon as
reasonably possible but no longer than sixty (60) days following receipt of an
advance copy of a Party's proposed publication, the other Party informs such
Party that its proposed publication contains Confidential Information of the
other Party, then such Party shall delete such Confidential Information from its
proposed publication. If, as soon as reasonably possible but no longer than
sixty (60) days following receipt of an advance copy of a Party's proposed
publication, the other Party informs such Party that its proposed publication
could be expected to have a material adverse effect on
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any Program Patent Rights or Program Know-How, then such Party shall delay such
proposed publication sufficiently long to permit the timely preparation and
first filing of patent application(s) on the information involved, provided,
however, that (i) with respect to any agreement between Millennium and a third
party listed in Appendix C as of the Effective Date (and any extensions
thereof), the terms and conditions of such agreement (and any extensions
thereof) that govern the review, approval and delay of any scientific
publications relating to such agreement shall remain in full force and effect
notwithstanding any provision of this Section 4.3 to the contrary, and (ii) with
respect to any future agreement entered into by Millennium with a third party
relating to the Millennium Program Patent Rights and/or the Millennium Program
Know-How, Millennium shall not agree to any terms and conditions governing the
review, approval and delay of scientific publications that are inconsistent with
those set forth in this Section 4.3, without the prior written consent of AHP.
Section 4.4. Term. All obligations of confidentiality and non-use
imposed under this Article IV shall expire ************** ********* termination
or expiration of this Agreement.
Article V
Grant of Rights
Section 5.1. Technology Licenses.
(a) Licenses to Millennium Program Know-How and Millennium
Program Patent Rights. Subject to the terms and conditions of this Agreement,
Millennium hereby grants to AHP and its Affiliates (i) a fully paid-up,
non-royalty bearing (other than with respect to Products as provided in Section
8.5), co-exclusive (with Millennium to the extent necessary to enable Millennium
to conduct the activities contemplated by Sections 2.2 and 2.4 of this
Agreement), right and license, without the right to grant sublicenses, under
Millennium Program Know-How, Millennium Program Patent Rights and Millennium's
rights in Joint Program Know-How and Joint Program Patent Rights, to (1)
discover, make and use Candidate Genes, Validated Targets and Validated Vaccine
Candidates in the Territory to research and develop Small Molecule Products
and/or Vaccine Products for use in the treatment of medical indications in the
CNS Disorders Field and (2) research and develop Modified Drugs, and (ii) a
fully paid-up non-royalty bearing (other than with respect to Products as
provided in Section 8.5), non-exclusive right and license, without the right
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to grant sublicenses, under Millennium Program Know-How, Millennium Program
Patent Rights, and Millennium's rights in Joint Program Know-How and Joint
Program Patent Rights to make and use Validated Targets and Validated Vaccine
Candidates in the Territory to research and develop Small Molecule Products
and/or Vaccine Products for use in the treatment of medical indications outside
of the CNS Disorders Field.
(b) Licenses to AHP Program Know-How and AHP Program Patent Rights.
Subject to the terms and conditions of this Agreement, AHP hereby grants to
Millennium a fully paid-up, non-royalty bearing non-exclusive right and license,
without the right to grant sublicenses, (i) under AHP Program Know-How and AHP
Program Patent Rights to discover, make and use Candidate Genes, Validated
Targets and Validated Vaccine Candidates in the Territory in the course of, and
for purposes of performing its obligations under, the Millennium Research
Program, (ii) under AHP Program Know-How and AHP Program Patent Rights to
discover, research, develop, make, use, sell and offer to sell products for
which Millennium has retained rights pursuant to this Agreement, as set forth in
Section 5.8, for use in the treatment of medical indications in the CNS Disorder
Field, and (iii) under AHP Program Know-How to discover, research, develop,
make, use, sell and offer to sell products for use in the treatment of medical
indictions outside the CNS Disorders Field, provided that the foregoing license
grants shall in no event be construed to grant to Millennium any rights in any
AHP product, and the license granted under subsection (iii) shall not confer
upon Millennium the right to use any compounds, genes, gene fragments, vectors,
cell lines, strains, transgenic organisms, model organisms, DNA and DNA
fragments and other biological materials owned or otherwise controlled by AHP.
(c) Rights to Joint Program Know-How and Joint Program Patent Rights.
Subject to the co-exclusive and exclusive licenses granted in Sections 5.1 and
5.2, each Party shall have the right to employ Joint Program Know-How and Joint
Program Patent Rights in the research, development and commercialization of
pharmaceutical products, whether in or outside of the CNS Disorders Field.
Section 5.2. Product Licenses. Subject to the terms and conditions of
this Agreement, Millennium hereby grants to AHP and its Affiliates (a) an
exclusive, royalty bearing license, under Millennium Program Know-How,
Millennium Program Patent Rights and Millennium's rights in Joint Program
Know-How and Joint Program Patent Rights, to make, have made, import, use, have
used, offer
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to sell, sell and have sold Small Molecule Products and Vaccine Products for use
in the treatment of medical indications in the CNS Disorders Field within the
Territory, (b) an exclusive royalty bearing license, under Millennium Program
Know-How, Millennium Program Patent Rights and Millennium's rights in Joint
Program Know-How and Joint Program Patent Rights, to make, have made, import,
use, have used, offer to sell, sell and have sold Modified Drugs for use in the
treatment of medical indications in and outside of the CNS Disorders Field
within the Territory, and (c) a non-exclusive, royalty bearing license, under
Millennium Program Know-How and Millennium Program Patent Rights and
Millennium's rights in Joint Program Know-How and Joint Program Patent Rights,
to make, have made, import, use, have used, offer to sell, sell and have sold
Small Molecule Products and Vaccine Products for use in the treatment of medical
indications outside of the CNS Disorders Field within the Territory. Such
licenses shall include the right to grant sublicenses, on notice to Millennium
as soon as reasonably possible, provided, however, (i) AHP shall be responsible
for all obligations of AHP's Affiliates and Sublicensees hereunder, and
guarantees to Millennium the performance of all such obligations, and (ii) the
payment of royalties on Net Sales of Small Molecule Products, Vaccine Products
or Modified Drugs shall remain a direct obligation of AHP, regardless of whether
sales are made by AHP or an AHP Affiliate or Sublicensee.
Section 5.3. AHP's Right of First Refusal with Respect to Non-Vaccine
Products. During the term of the Research Program, Millennium and AHP agree to
discuss collaborations concerning the development and commercialization of
Non-Vaccine Products for use in the CNS Disorders Field on a product-by-product
basis. The initial opportunity to begin such discussions concerning a
Non-Vaccine Product shall arise when, in the course of the Research Program,
either Party recognizes the possibility for developing such Non-Vaccine Product.
When this occurs, the Party recognizing such possibility shall present such
information to the other Party and such other Party shall have a period of
forty-five (45) days in which to initiate good faith negotiations concerning a
potential collaboration with respect to such Non-Vaccine Product. If such
negotiation is initiated, the Parties shall have a period of ninety (90) days in
which to execute a definitive agreement, the terms and conditions of which shall
govern any collaboration between the Parties with respect to such Non-Vaccine
Product.
If either (a) a negotiation concerning a potential collaboration with
respect to a Non-Vaccine Product is not initiated, or (b) the Parties cannot
agree to the terms of a
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collaboration with respect to such Non-Vaccine Product, then Millennium shall
have the exclusive right, either alone or in collaboration with a third party,
to research, have researched, develop, have developed, make, have made, import,
use, have used, offer to sell, sell and have sold such Non-Vaccine Product for
use in and outside of the CNS Disorders Field within the Territory, provided,
however, that Millennium shall not, without AHP's prior written consent, enter
into a collaboration with a third party with respect to such Non-Vaccine Product
pursuant to an agreement, the terms and conditions of which are, on the whole,
more favorable than those offered by Millennium to AHP.
Notwithstanding the foregoing provisions of this Section 5.3, the
Parties agree and acknowledge that Millennium shall have the right to enter into
a collaboration with a commercial third party with respect to the research,
development and/or commercialization of a broad class of Millennium therapeutic
product opportunities that comprise Proteins ("Protein Therapeutics") and/or
Gene Therapy Drugs, the significant majority of which are not likely to be
useful as therapeutic products in the CNS Disorders Field; examples of such a
class include without limitation: (i) Protein Therapeutics isolated from an
individual cell or tissue type such as T cells or monocytes; (ii) Protein
Therapeutics isolated from a set of several individual cell or tissue types;
(iii) Protein Therapeutics of a specific structural or functional class such as
chemokines; and (iv) Gene Therapy Drugs that contain a particular delivery
vehicle that targets a broad set of cell or tissue types. Prior to entering into
any such collaboration, Millennium shall provide AHP with (x) a written
notification of its intent to enter into such collaboration, and (y) a written
summary with respect to such collaboration (a "Collaboration Summary") broadly
outlining the scope and the experimental objectives of the research to be
undertaken in the course of such collaboration. Following a thirty (30) day
period commencing on the date on which AHP receives the Collaboration Summary,
Millennium shall have the right to enter into such collaboration, unless within
such thirty (30) day period AHP provides Millennium with written notification of
AHP's opinion that the collaboration described in the Collaboration Summary does
not satisfy the conditions set forth in the first sentence of this paragraph, in
which case the disagreement between the Parties with respect to such
collaboration shall be presented to the Executive Officers for resolution within
a period not to exceed thirty (30) days. With respect to any and all product
opportunities falling within any class that is the subject of any collaboration
with a commercial third party entered into by Millennium pursuant to this
Section 5.3 that prohibits Millennium from collaborating with AHP
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with respect to such product opportunities, AHP's right of first refusal, as set
forth in this Section 5.3, shall terminate.
Section 5.4. AHP's Rights With Respect to Other Millennium Projects. The
Parties understand and agree that during the term but outside of the Millennium
Research Program, Millennium may undertake genomic research activities not
designed primarily to yield biological molecules likely to be useful as
therapeutic targets or as therapeutic products in the CNS Disorders Field but
which may yield such biological molecules (the "Other Millennium Projects").
Other Millennium Projects include without limitation non-CNS disease-focused
genetic/genomic research programs (e.g., studies of the genetic and molecular
basis of obesity or asthma; random sequencing of cDNA libraries constructed from
human or other tissues, such as T cells or fetal brain) and diagnostics
research. In the event that (i) a biological molecule with utility as a target
for small molecule intervention or a Vaccine in the CNS Disorders Field is
identified in the course of an Other Millennium Project during the term of the
Millennium Research Program, (ii) Millennium elects to exploit the potential of
such biological molecule for use in the CNS Disorders Field, and (iii)
Millennium has no prior commitment to a third party concerning the research,
development and/or commercialization of such biological molecule that would
prohibit Millennium from undertaking a collaboration with AHP with respect to
such biological molecule, then Millennium shall (a) inform AHP of the existence
and potential utility in the CNS Disorders Field of such biological molecule,
and (b) enter into discussions with AHP regarding a collaboration between
Millennium and AHP concerning the research, development and/or commercialization
of such biological molecule within the CNS Disorders Field.
Section 5.5. Diagnostic Products.
The Parties acknowledge and agree that the development and
commercialization of a Diagnostic Product associated with a Product may
advantageously affect the sales of both the Diagnostic Product and the
associated Product. Except as otherwise provided in this Section 5.5, Millennium
has retained the right to develop and commercialize Diagnostic Products relating
to Products, either alone or in collaboration with third parties. The Parties
agree to exchange requisite information to enable Millennium, if it so elects,
to develop a Diagnostic Product for use in conjunction with each Product and to
enable AHP to assess the status of Millennium's development efforts relating
thereto. Millennium shall provide written notice to AHP, on a disease
indication-by-disease indication basis, whether it intends to develop a
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Diagnostic Product. If (a) ************************************
*****************************************************************
**********************************************************
************************, and the licences set forth in Sections 5.1 and 5.2
shall be extended to permit the development and commercialization of a
Diagnostic Product for such indication; (b) ****************************
********************************************************************
*******************************************************************************
*************************************************************************
************************************************************, then Millennium
shall retain all rights with respect thereto, including the right to develop and
commercialize such Diagnostic Product in collaboration with a third party,
without obligation to AHP; (c)
***************************************************************
**************************************************************
******************************************************************
**************************************************** on the development and
commercialization of such Diagnostic Product, then the Parties shall attempt in
good faith to negotiate a separate development and commercialization agreement
with respect to such Diagnostic Product, provided that
***********************************************************************
************************************************************************
***********************************************************, including the right
to develop and commercialize such Diagnostic Product in collaboration with a
third party. In the event that ********** has not provided
********************** with respect to a specific disease indication,
****************************************** provide such notice within
***************; failure to provide such notice within ****************** shall
be considered a response that **************************************************
***************************.
Section 5.6. AHP's Rights to Potential Candidate Genes. Within ninety
(90) days following the expiration of the Research Program, AHP may designate
any potential Candidate Gene as a Candidate Gene, provided, however, that at the
time of such designation(s) AHP shall pay to Millennium the appropriate
milestone payment set forth in Section 8.4. Upon any such designation(s), each
designated Candidate Gene (a "Designated Candidate Gene") shall be subject to
all terms and conditions of this Agreement that relate to any Candidate Gene.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 5.7. AHP's Right of First Refusal with Respect to Autoimmune
Diseases.
(a) Program Discussion Initiated by Millennium. In the event
that p***********************, Millennium has not entered into an agreement with
a third party relating to the research, development and commercialization of
products for Autoimmune Diseases, Millennium grants to AHP a right of first
refusal on or after *************** to (a) fund any research program in which
genetics and genomics technologies are used to discover genes responsible for
susceptibility to Autoimmune Diseases (which genes may, in turn, be used to
identify and develop Small Molecules and Vaccines for use in the field of
Autoimmune Diseases) that Millennium has decided to undertake using financial
support from a commercial third party (an "Autoimmune Disease Program"), and (b)
obtain certain license rights under certain intellectual property that results
from such Autoimmune Disease Program. Such right of first refusal shall continue
for the term of the Research Program and shall operate as follows:
(1) Millennium shall send to AHP a written notification describing in
reasonable detail any such Autoimmune Disease Program contemplated by
Millennium (an "AD Notification");
(2) AHP shall respond to Millennium within forty-five (45) days of its
receipt of such AD Notification indicating its interest in such Autoimmune
Disease Program; and
(3) If AHP indicates that it is interested in funding such Autoimmune
Disease Program, the Parties shall negotiate in good faith a reasonable
agreement concerning such Autoimmune Disease Program.
In the event that (X) AHP fails to respond to Millennium within forty-five (45)
days after its receipt of an AD Notification, or (Y) AHP indicates that it is
not interested in funding such Autoimmune Disease Program, or (Z) the Parties
fail to reach a final agreement within ninety (90) days after the receipt by
Millennium of AHP's response indicating AHP's interest in such Autoimmune
Disease Program, Millennium shall be free to pursue such Autoimmune Disease
Program with one or more third parties. If AHP gives notice of its intention to
fund such Autoimmune Disease Program but the Parties fail to reach agreement and
Millennium pursues a collaboration in the field of Autoimmune Diseases pursuant
to an agreement with a commercial third party, Millennium agrees that the terms
and conditions of any such agreement with any commercial third party shall not
be, on the
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whole, more favorable than the most favorable terms offered to AHP. From and
after ***************, Millennium shall not discuss any Autoimmune Disease
Program with a commercial third party until after Millennium has provided AHP
with an AD Notification with respect to such Autoimmune Disease Program.
(b) Program Discussions with a Third Party. Notwithstanding the
provisions set forth in Section 5.7(a), if a discussion of an Autoimmune Disease
Program is already in progress between Millennium and a commercial third party
as of *************** or is initiated by a commercial third party after
*************** but during the term of the Research Program, Millennium shall
promptly inform AHP of such third party interest. In such instance, Millennium
shall have the right to continue its discussions with such third party but
hereby agrees to initiate concurrent good faith negotiations with AHP with
respect to such research program.
Section 5.8. Millennium's Retained Rights. Any of Millennium's rights to
Millennium Program Know-How and Millennium Program Patent Rights not
specifically licensed to AHP pursuant to this Article V shall be retained by
Millennium, including without limitation (a) Millennium's non-exclusive right to
research, have researched, develop, have developed, make, have made, import,
use, have used, offer to sell, sell and have sold Small Molecules and Vaccines
for use in the treatment of medical indications outside of the CNS Disorders
Field within the Territory, provided that, except as otherwise specifically
provided herein or in the TPT Access and License Agreement, Millennium shall
have no rights to AHP products or compounds, (b) Millennium's exclusive right to
research, have researched, develop, have developed, make, have made, import,
use, have used, offer to sell, sell and have sold any (i) Non-Vaccine Product
(subject to AHP's right of first refusal as set forth in Section 5.3), (ii)
Diagnostic Product (subject to the provisions of Section 5.4), and (iii)
Antisense Drug that embodies Millennium Program Know-How, in each case, for use
in and outside of the CNS Disorders Field within the Territory, and (c)
Millennium's exclusive right, within the Territory, to practice, outside of the
CNS Disorders Field, any and all Millennium Program Know-How that does not
constitute a Validated Target or Validated Vaccine Candidate.
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Article VI
Patent Ownership, Protection and Related Matters
Section 6.1. Ownership. AHP shall own all inventions within the scope of
the Research Program or the AHP Discovery Program made solely by its employees,
and Millennium shall own all inventions within the scope of the Research Program
made solely by its employees. All inventions within the Research Program or the
AHP Discovery Program made jointly by employees of AHP and employees of
Millennium shall be owned jointly by AHP and Millennium. All patent applications
and patents covering any invention and all Know-How related to such invention
made within the scope of the Research Program or the AHP Discovery Program shall
be owned by the Parties or Party, as the case may be, that own(s) said
invention. The determination of inventorship shall be made in accordance with
relevant patent laws; in the event of a dispute regarding inventorship, the
Steering Committee shall be authorized to determine inventorship, with the
advice of mutually acceptable outside patent counsel not regularly employed by
either Party.
Section 6.2. Patentable Inventions.
(a) If a patentable invention related to the Core Field is (i)
conceived or reduced to practice prior to the Effective Date and included within
Millennium Program Patent Rights, or (ii) conceived in the course of and within
the scope of the Research Program and is reduced to practice within the course
of the Research Program or the AHP Discovery Program (with respect to either
subsection (i) or (ii), a "Section 6.2 Invention"), AHP and Millennium shall
promptly discuss that invention and the desirability of filing a United States
patent application covering such invention, as well as any foreign counterparts.
The Party owning the Section 6.2 Invention (determined in accordance with
Section 6.1) shall make the final decision with respect to any such filings as
soon as practicable. If a Section 6.2 Invention is made jointly, the CNS JMT
shall determine which Party shall file and prosecute the application. If either
(1) the CNS JMT is unable to make such a determination or (2) no decision is
made regarding which Party shall file and prosecute the application covering
such jointly owned invention, then (i) Millennium shall have the first option to
file and prosecute the application
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for such jointly owned invention if such invention relates to a Candidate Gene,
Validated Target, Validated Vaccine Candidate, Protein, Gene Therapy Drug or
Diagnostic Product, and (ii) AHP shall have the first option to file and
prosecute the application for such jointly made invention if such invention
relates to a Modified Drug, Small Molecule Product or Vaccine Product. In the
event that either Party declines the option to file and prosecute any such
patent application for such jointly made invention, the Party not having such
option may, upon written notice to the other Party, file and prosecute the
application for such jointly made inventions.
(b) Patent applications relating to Section 6.2 Inventions made
jointly shall be prepared and prosecuted by outside patent counsel mutually
agreed to by the Parties, with review and comment provided by both Parties as to
such preparation and prosecution.
(c) Subject to (i) the grant of licenses to AHP under Article V,
(ii) the limitations on AHP's rights outside the CNS Disorders Field, (iii) the
retained rights of Millennium and (iv) AHP's royalty payment obligations for
Products under Article VIII, each Party shall be free to exploit jointly owned
patents within the Territory without restriction and without payment of any
additional compensation to the other Party.
Section 6.3. Review and Comment. Each Party shall provide the other
Party with a copy of any patent application which first discloses any Section
6.2 Invention prior to filing the first of such applications in any
jurisdiction, if possible, for review and comment by such other Party. The Party
receiving any such patent application under this Section 6.3 shall maintain such
patent application in confidence, pursuant to Article IV.
Section 6.4. Notice of Decision. If a Party decides not to file,
prosecute or maintain an application or patent on a Section 6.2 Invention in any
country, it shall give the other Party reasonable notice to this effect. After
such notice, the other Party may file, or maintain the application or patent, in
which event the first Party shall execute such documents and perform such acts
as may be reasonably necessary for the other Party to file, prosecute or
maintain such application.
Section 6.5. Patent Term Extensions. The Parties shall cooperate, if
necessary and appropriate, with each other in gaining patent term extension
wherever applicable to Program Patent Rights covering Products. The Parties
shall, if necessary and appropriate, use reasonable efforts to agree upon a
joint strategy relating to patent term extensions, but, in the absence of mutual
agreement with respect to any extension issue, a patent shall be extended if
either Party elects to extend such patent.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
All filings for such extension shall be made by the Party to whom the patent is
assigned, provided, however, that in the event that the Party to whom the patent
is assigned elects not to file for an extension, such Party shall (i) inform the
other Party of its intention not to file and (ii) grant the other Party the
right to file for such extension.
Section 6.6. Costs and Expenses. Each Party shall bear its own costs and
expenses in filing, prosecuting, maintaining and extending Patent Rights arising
out of the Research Program and the AHP Discovery Program, except that AHP shall
reimburse Millennium for ******************* of the costs of filing,
prosecuting, maintaining and extending Millennium Program Patent Rights and
Joint Program Patent Rights incurred on and after the Effective Date. AHP shall,
however, have the right to decline to so reimburse Millennium with respect to a
Millennium Program Patent Right in any country or countries in the Territory by
so notifying Millennium in writing prior to the time that Millennium incurs
legal expenses with respect to such Millennium Program Patent Right, in which
event the licenses granted to AHP in Article V with respect to such Millennium
Program Patent Right in such country or countries shall terminate, unless
otherwise agreed in writing.
Section 6.7. Third Party Infringement.
(a) Millennium and AHP each agrees to take reasonable actions to
protect the Program Patent Rights from infringement in the CNS Disorders Field
and to protect the Program Know-How from unauthorized use in the CNS Disorders
Field, when, from its own knowledge or upon notice by the other Party, the Party
with knowledge or receiving notice becomes aware of the reasonable probability
that such infringement or unauthorized use exists in the Field.
(b) Within ninety (90) days of becoming aware of the reasonable
probability of an interference or infringement of the Program Patent Rights in
the CNS Disorders Field or unauthorized use of the Program Know-How in the CNS
Disorders Field, the Responsible Party (as defined below) shall decide whether
to institute an infringement suit or take other appropriate action that it
believes is reasonably required to protect the Program Patent Rights and Program
Know-How in the CNS Disorders Field. If the Responsible Party fails to institute
such suit or take such action within such ninety (90)-day period, then the other
Party shall have the right at its sole discretion to institute such suit or
other appropriate action in the name of either or both Parties.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
In such event, the Responsible Party shall cooperate with the other Party to the
extent reasonably possible, including the joining of suit if necessary or
desirable.
(c) Neither Party shall settle or compromise any claim or
proceeding relating to Program Patent Rights or Program Know-How in the CNS
Disorders Field without the consent of the other Party, which consent shall not
be unreasonably withheld, provided that no such consent of Millennium shall be
required with respect to Patent Rights owned by, licensed to or otherwise
controlled by AHP (other than Millennium Program Patent Rights).
(d) As used herein, the term "Responsible Party" means (i) AHP
with respect to Patent Rights solely owned by, licensed to or otherwise
controlled by AHP (other than Millennium Program Patent Rights), (ii) Millennium
with respect to Millennium Program Patent Rights and (iii) AHP and Millennium
jointly with respect to Joint Program Patent Rights.
(e) Each Party shall assume and pay all of its own out-of-pocket
costs incurred in connection with any litigation or proceedings described in
this Section 6.7, including, without limitation, the fees and expenses of that
Party's counsel.
(f) Any recovery obtained by any Party as a result of any
proceeding described in this Section 6.7 or from any counterclaim or similar
claim asserted in a proceeding described in Section 6.9, by settlement or
otherwise, shall be applied in the following order of priority:
(i) first, to reimburse each Party for all litigation costs
in connection with such proceeding paid by that Party and not otherwise
recovered on a pro rata basis based on each Party's respective
litigation costs; and
(ii) second, the remainder of the recovery shall be paid (A)
where either AHP or Millennium is the Responsible Party,
************************** to the Responsible Party and
************************* to the other Party, provided, however, that if
the Responsible Party does not institute suit or take action as set
forth in Section 6.7(b) or elects not to respond to an invalidity claim
pursuant to Section 6.9, then the recovery shall be paid *************
***** to each Party, or (B) where AHP and Millennium are the Responsible
Party jointly (i.e. in the case of Joint Program Patent Rights),
******************* to each Party.
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Section 6.8. Notice of Certification. Millennium and AHP each shall
immediately give notice to the other of any certification filed under the U.S.
"Drug Price Competition and Patent Term Restoration Act of 1984", or comparable
law in other countries where applicable Program Patent Rights covering a product
sold by Millennium or AHP are maintained, claiming that such Program Patent
Right is invalid or that any infringement will not arise from the manufacture,
use or sale of any product in the Core Field by a third party. If the
Responsible Party decides not to bring infringement proceedings against a third
party making such a certification, the Responsible Party shall give notice to
the other Party of its decision not to bring suit as soon as practicable but no
later than twenty-one (21) days after receipt of notice of such certification.
The other Party may then, but is not required to, bring suit against the party
that filed the certification. Any suit by AHP or Millennium shall either be in
the name of AHP or in the name of Millennium, or jointly by AHP and Millennium,
as may be required by law. For this purpose, the Party not bringing suit shall
execute such legal papers necessary for the prosecution of such suit as may be
reasonably requested by the Party bringing suit.
Section 6.9. Claimed Infringement; Claimed Invalidity.
(a) If the activities of either Party in connection with the
Research Program, the AHP Discovery Program or as the result of making,
importing, using, offering to sell or selling a Product in the CNS Disorders
Field result in a claim of patent infringement or other violation of the
intellectual property rights of any third party, the Party who is accused of
such infringement shall defend itself at its sole cost. The other Party shall
cooperate with the accused Party in such defense and prosecution and shall have
the right to be represented by counsel of its own choice.
(b) If a third party at any time asserts a claim that any
Program Patent Right is invalid or otherwise unenforceable (an "Invalidity
Claim"), whether as a defense in an infringement action brought by AHP or
Millennium pursuant to Section 6.7 or Section 6.8, or in an action brought
against AHP or Millennium, the Parties shall cooperate with each other in
preparing and formulating a response to such Invalidity Claim. The Party
responsible for responding to such claim, at its sole expense, shall be
initially the Responsible Party, subject to the other Party's right, at its sole
expense, to assume responsibility if the Responsible Party elects not to do so.
Neither Party shall settle or compromise any Invalidity Claim without the
consent of
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the other Party, which consent shall not be unreasonably withheld, provided that
no such consent of Millennium shall be required with respect to an Invalidity
Claim relating to Patent Rights owned by, licensed to or otherwise controlled by
AHP (other than Millennium Program Patent Rights).
Article VII
AHP Due Diligence
Section 7.1. Research Program Inventory. As set forth in this Article
VII, AHP is required to exercise commercially reasonable efforts to develop
Products based upon the results of the Research Program. For purposes of
assessing the adequacy of the efforts devoted by AHP thereto (and not for
purposes of determining whether a Product is a Royalty-bearing Product), the CNS
JMT shall, within ninety (90) days after the end of each Contract Year during
the term of the Research Program and each twelve (12) month period thereafter
for a period of three (3) years, provide a written inventory to each Party
listing the following: (a) each Candidate Gene; (b) each Validated Target; (c)
each Validated Vaccine Candidate (based upon the advice of the Vaccine
Management Team); (d) each disease indication relevant to a Candidate Gene,
Validated Target or Validated Vaccine Candidate (each such indication, which
must have at least one relevant Validated Target or Validated Vaccine Candidate
in such inventory, referred to as a "Disease Indication"); and (e) in the Final
Inventory (as defined below), all Designated Candidate Genes (as that term is
defined in Section 5.6) (each such inventory referred to as a "Program
Inventory" and the Program Inventory for the last Contract Year during the term
of the Research Program, as modified as described below, referred to as the
"Final Inventory"). The Final Inventory shall be modified to include Disease
Indications which relate to Validated Targets or Validated Vaccine Candidates
which achieve such status during the *********************
************************* of the Research Program.
Section 7.2. Candidate Genes.
(a) AHP shall use commercially reasonable efforts to move
Candidate Genes into Validated Target or Validated Vaccine Candidate status
within *************************************** of the Research Program. Such
efforts shall not be less than the efforts expended by AHP in connection with
its other research and development projects that are at a comparable stage of
the
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research and development process and that are of comparable scientific and
commercial promise.
(b) AHP shall provide Millennium with a written report
describing AHP's progress in moving Candidate Genes into Validated Target or
Validated Vaccine Candidate status, provided that no such report shall be
required until after the first Candidate Gene is identified. Such reports shall
be provided (i) within thirty (30) days after each June 30 and December 31
during the two (2) year period following the termination of the Research
Program, (ii) within thirty (30) days after each June 30 during the three (3)
following years, and (iii) thereafter if and when AHP has progress to report
relating to moving Candidate Genes into Validated Target or Validated Vaccine
Candidate status.
(c) AHP shall be deemed to have satisfied its obligations under
subsection (a) in the event that it is using the commercially reasonable efforts
required pursuant to subsection (a) at any given time to develop at least
*************** (rounded to the nearest whole number) of the
************************ (as defined below) into *****************. As used
herein, the term ************************** means a number of ***** equal to the
sum of Candidate Genes and *************** of all Designated Candidate Genes, if
any, included in the Final Inventory. Disputes regarding fulfillment of AHP's
obligations under this Section 7.2 shall be resolved in accordance with Section
7.5.
(d) If AHP fails to exercise commercially reasonable efforts as
required under this Section 7.2 then, at the election of Millennium, the
exclusive rights of AHP with respect to those Candidate Genes (including
Designated Candidate Genes)
(i) as to which AHP has not initiated and conducted
continuing research efforts to develop a Validated Target or
Validated Vaccine Candidate, and
(ii) which do not relate to any Disease Indication included
in the most recent Program Inventory for which AHP is conducting
active and continuing research efforts under the AHP Research
Program or AHP Discovery Program,
shall be converted to co-exclusive rights (with Millennium, either alone or in
collaboration with others). The foregoing shall be Millennium's sole and
exclusive remedy for the failure by AHP to use the commercially reasonable
efforts required under this Section 7.2.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 7.3. Disease Indications.
(a) AHP shall use commercially reasonable efforts to develop a
Product for each Disease Indication included in each Program Inventory,
including the Final Inventory (as modified pursuant to Section 7.1). Such
efforts shall not be less than the efforts expended by AHP in connection with
its other research and development projects that are at a comparable stage of
the research and development process and that are of comparable scientific and
commercial promise. AHP's obligations under this subsection (a) shall apply
during the period (the "Section 7.3 Due Diligence Period") commencing with the
date of the initial Program Inventory and continuing until *******************
the date of the Final Inventory (including the final modification thereto as of
the ************************************ of the Research Program).
(b) AHP shall provide Millennium with a written report
describing AHP's progress in developing Products for Disease Indications
included in the most recent Program Inventory. Such reports shall be provided
(i) within thirty (30) days after each June 30 during the
********************************************* of the Research Program, and (ii)
thereafter if and when AHP has progress to report relating to developing
Products for Disease Indications included in the Final Inventory.
(c) AHP shall be deemed to have satisfied its obligations under
subsection (a) in the event that it is using the commercially reasonable efforts
at all times during the Section 7.3 Due Diligence Period (which shall include,
at a minimum, active efforts to screen against relevant Validated Targets and/or
to use relevant Validated Targets as the basis for structure-based rational drug
design) required pursuant to subsection (a) at any given time to develop a
Product for **************** (rounded to the nearest whole number) of the
******************* included in the most recent Program Inventory.
(d) If AHP fails to exercise commercially reasonable efforts as
required under this Section 7.3, then, at the election of Millennium, the
exclusive rights of AHP with respect to those Validated Targets or Validated
Vaccine Candidates (together with all related Candidate Genes)
(i) as to which AHP has not initiated and conducted
continuing screening and related efforts to discover and develop
a Product, and
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(ii) which do not relate to any Disease Indication included
in the most recent Program Inventory for which AHP is conducting
active and continuing research and development efforts under the
AHP Research Program or AHP Discovery Program,
shall be converted to co-exclusive rights (with Millennium, either alone or in
collaboration with others). The foregoing shall be Millennium's
************************* for the failure by AHP to use the commercially
reasonable efforts required under this Section 7.3.
(e) Notwithstanding the provisions of this Section 7.3, at any
time prior to the date of the Final Inventory (including the final modification
thereto as of **************************** *********** of the Research Program),
AHP shall have the right, by providing written notice to Millennium, to delete a
specified ****************** from the Program Inventory. Any such deletion shall
have the following effects: (i) such ****************** shall no longer be
considered to be part of the Program Inventory for assessing whether AHP has
satisfied its obligations under subsections (a) or (c) above; (ii) such
****************** shall cease to be in the *******************; and (iii) all
licenses granted by Millennium to AHP with respect to Validated Targets and
Validated Vaccine Candidates (together with all related Candidate Genes) that
relate solely to such ****************** shall terminate effective as of the
date of AHP's notice.
Section 7.4 Commercialization.
(a) AHP agrees to use commercially reasonable efforts to conduct
required clinical development activities and seek regulatory approval in Major
Market Countries for each Small Molecule Product and Vaccine Product. Such
efforts shall not be less than the efforts expended by AHP in connection with
its other development projects that are at a comparable stage in the development
process and are of comparable commercial promise. Upon receipt of regulatory
approval, AHP agrees to use commercially reasonable efforts to market and sell
each such Small Molecule Product and Vaccine Product in Major Market Countries.
(b) Within thirty (30) days after the end of each calendar
quarter, AHP shall provide Millennium with a written report describing AHP's
efforts with respect to the development and/or commercialization of each Small
Molecule Product and Vaccine Product in each Major Market Country.
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(c) AHP shall be deemed to have satisfied its obligations under
subsection (a) with respect to a Small Molecule Product or Vaccine Product in
the event that it is using the commercially reasonable efforts required pursuant
to subsection (a) at any given time in at least three (3) Major Market Countries
with respect to each such Product.
(d) If AHP shall fail to exercise commercially reasonable
efforts as required under this Section 7.4 with respect to any Small Molecule
Product or Vaccine Product, Millennium shall notify AHP. Effective ninety (90)
days thereafter, if AHP has not cured such failure, then AHP's exclusive rights
with respect to the development and commercialization of such Small Molecule
Product or Vaccine Product, as the case may be, in each Major Market Country in
which AHP has failed to exercise such commercially reasonable efforts (an
"Abandoned Market") shall terminate, and AHP shall grant to Millennium a fully
paid-up non-royalty bearing license to develop and commercialize, either alone
or in collaboration with third parties, such Small Molecule Product or Vaccine
Product, as the case may be, in each Abandoned Market. In such instance, AHP
shall (i) transfer to Millennium any and all regulatory and clinical information
related to such Small Molecule Product or Vaccine Product, as the case may be,
that AHP owns or otherwise controls and as to which AHP has the right to grant
licenses or sublicenses without violating the terms of any agreement or other
arrangement with a third party (the "Product Related Information"), and (ii)
grant to Millennium a fully paid-up non-royalty bearing license to use such
Product Related Information to develop and commercialize such Small Molecule
Product or Vaccine Product, as the case may be, in each Abandoned Market. AHP's
rights hereunder with respect to such Small Molecule Product or Vaccine Product,
as the case may be, in other Major Market Countries, or to other Products in the
Abandoned Market, shall be unaffected. The foregoing shall be Millennium's sole
and exclusive remedy for the failure by AHP to use the commercially reasonable
efforts required under this Section 7.4
(e) Notwithstanding the foregoing, AHP shall not be obligated to
use commercially reasonable efforts to conduct clinical development activities,
seek regulatory approval and market and sell any Small Molecule Product or
Vaccine Product with respect to which a Product Patent Blocking Event has
occurred. In the event that a Party makes a determination that a Product Patent
Blocking Event has occurred, such Party shall notify the other Party, and shall
provide with such notice support for its determination. In the event that the
other Party disagrees with
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such determination, the matter shall be referred to the Executive Officers for
resolution pursuant to Section 2.3(b)(iv), with the advice of mutually
acceptable outside patent counsel not regularly employed by either Party.
Section 7.5. Determination of Due Diligence. In the event that
Millennium does not believe that AHP has satisfied its obligations under
Sections 7.2(a), 7.3(a) or 7.4(a), Millennium shall notify AHP in writing. If
AHP believes that it has satisfied such obligations, it shall so notify
Millennium within ten (10) Business Days after receipt of Millennium's notice.
Such notice by AHP shall indicate whether AHP believes it has met the "safe
harbors" set forth in Sections 7.2(c), 7.3(c) or 7.4(c), as applicable (the
"Safe Harbor Provisions"), or whether AHP believes it has otherwise satisfied
its obligations under Sections 7.2(a), 7.3(a) or 7.4(a), as applicable, and, in
either event, provide supporting information for such position. If Millennium
disagrees with AHP's response, either because it does not believe that the
applicable Safe Harbor Provision has been satisfied or, if AHP has indicated
that it has not met the applicable Safe Harbor Provision, because it does not
believe that AHP has otherwise satisfied its obligations, the Parties shall
attempt in good faith to resolve the disagreement, referring the matters to the
Executive Officers for resolution pursuant to Section 2.3(b), if necessary. In
the event that (a) the Parties are unable to resolve any disagreement under this
Section 7.5, and (b) AHP has not met the applicable Safe Harbor Provision, then
AHP shall bear the burden of proof relating to its satisfaction of its
obligations under Sections 7.2(a), 7.3(a) or 7.4(a), as applicable.
Article VIII
Payments
Section 8.1. License Fees. AHP shall make the following non-refundable
payments to Millennium in consideration of the rights granted to AHP under this
Agreement:
(a) ***************************************** ************ on the
Effective Date;
(b) *********************************************, ****, contingent
upon the continuation of the Research Program until such date;
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(c) **************************************************
***************, contingent upon the continuation of the Research
Program until such date;
(d) **************************************************
*************, contingent upon the continuation of the Research Program
until such date;
(e) ***************************************************
************************ of the Effective Date, contingent upon the
continuation of the Research Program for a period of at least
************ following the Effective Date;
(f) ***************************************************
******************, contingent upon the continuation of the Research
Program until such date;
(g) ***************************************************
******************, contingent upon the continuation of the Research
Program until such date;
(h) ***************************************************
****************, contingent upon the continuation of the Research
Program until such date;
(i) ***************************************************
************************* of the Effective Date contingent upon the
continuation of the Research Program for a period of at least
************* following the Effective Date;
(j) ***************************************************
******************, contingent upon the continuation of the Research
Program until such date;
(k) ***************************************************
******************, contingent upon the continuation of the Research
Program until such date;
(l) ***************************************************
****************, contingent upon the continuation of the Research
Program until such date.
Section 8.2. Equity Purchases On Achievement of Extension Benchmarks. In
the event that Millennium achieves one or both of the Extension Benchmarks, for
each Extension Benchmark that is achieved AHP shall, upon the election of
Millennium, purchase from Millennium, for a purchase price of
**************************
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*****************************, shares of common stock of Millennium (the "Common
Stock") at a price per share equal to *** ****************************** of the
Fair Market Value (as defined below) of the Common Stock. Notice of Millennium's
election to have AHP purchase Common Stock (an "Equity Election Notice") shall
be provided by Millennium to AHP at least sixty (60) days prior to the end of
the third or fifth Contract Year, as applicable. The Purchase Date shall mean
(i) in the case of a purchase relating to the achievement of the Year Three
Extension Benchmark, the date one (1) Business Day after the end of the third
Contract Year, and (ii) in the case of a purchase relating to the achievement of
the Year Five Extension Benchmark, the date one (1) Business Day after the end
of the fifth Contract Year. The "Fair Market Value" shall be equal to the
average closing price of the Common Stock on the NASDAQ National Market (or
other principal securities exchange on which the Common Stock is then traded)
during the ten (10) Business Days ending on the Business Day preceding the third
Business Day prior to the end of the third or fifth Contract Year, as applicable
(the "Measurement Period"). Notwithstanding the foregoing, in the event that (A)
the Fair Market Value is fifteen percent (15%) or more lower than the average
closing price of the Common Stock on the Nasdaq National Market (or other
principal securities exchange on which the Common Stock is then traded) during
the ten (10) Business Days ending sixty (60) days prior to the end of the third
or fifth Contract Year, as applicable (such average price being referred to as
the "Prior Fair Market Value"), Millennium shall have the right to cancel the
closing by providing notice to AHP during the three (3) Business Day period
prior to the end of the third or fifth Contract Year, as applicable.
Furthermore, in the event that the Fair Market Value exceeds the Prior Fair
Market Value by fifteen (15%) or more, then the purchase price shall be equal to
one ******************************************************************
*************, provided that Millennium shall have the right to cancel the
closing by providing notice to AHP during the three (3) Business Day period
prior to the end of the third or fifth Contract Year, as applicable. In the
event that Millennium exercises its rights to cancel a closing, Millennium shall
have no further right to receive the cancelled equity investment (but any
cancellation of the equity payment relating to the third Contract Year shall
have no effect on the equity payment, if any, relating to the fifth Contract
Year). Each purchase of Common Stock under this Section 8.2 shall be pursuant
to, and shall be subject to the conditions in, an agreement which shall include
the terms set forth on Appendix D to this Agreement. Notwithstanding the
provisions of this Section 8.2 to the contrary, in the event that, on any
Purchase Date, the Common Stock of Millennium (or any
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successor security thereto) is not listed or traded on an automated stock
quotation system or national stock exchange (including Nasdaq, the New York
Stock Exchange or the American Stock Exchange, or any successor system or
exchange), then AHP shall not be obligated to purchase shares of Common Stock on
such Purchase Date.
Section 8.3. Research Funding.
(a) Budget. In support of research and development to be
conducted by Millennium pursuant to this Agreement, AHP shall make the following
minimum payments to Millennium to fund the Millennium Research Program:
<TABLE>
<CAPTION>
(In million's)
Contract Budget Cum- Budget Cum- Budget Cum
Year 1 ulative 2 ulative 3 ulative
- -------- ------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
1 $ **** $ **** $ **** $ **** $ **** $ ****
2 $ **** $ **** $ **** $ **** $ **** $ ****
3 $ **** $ **** $ **** $ **** $ **** $ ****
4 $ **** $ **** $ **** $ **** $ **** $ ****
5 $ **** $ **** $ **** $ **** $ **** $ ****
6 $ **** $ **** $ **** $ **** $ **** $ ****
7 $ **** $ **** $ **** $ **** $ **** $ ****
</TABLE>
Budget 1 assumes that Millennium achieves the Year Three Extension Benchmark and
the Year Five Extension Benchmark. Budget 2 assumes that Millennium does not
achieve the Year Three Extension Benchmark and that AHP elects to continue to
fund the Millennium Research Program for the entire seven (7) year term at the
lowest minimum funding level. Budget 3 assumes that Millennium achieves the Year
Three Extension Benchmark but does not achieve the Year Five Extension Benchmark
and that AHP elects to continue to fund the Minimum Research Program for the
entire seven (7) year term at the lowest minimum funding level. The funding of
the Millennium Research Program by AHP in accordance with the applicable minimum
budget shall be provided on a cumulative basis whereby money not spent in any
given Contract Year shall remain available to spend in subsequent Contract Years
of the Millennium Research Program. The amounts set forth in the above table are
in terms of the value of United States dollars as of the Effective Date. The
actual amount to be provided by AHP to Millennium shall be subject, beginning in
Contract Year 2, to ************************************************************
********************************************************************************
******************
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*****************************************************************************.
The funds provided by AHP to Millennium in accordance with the applicable
minimum budget shall be divided between (1) amounts allocated for support of
Millennium personnel (at a rate of ****************************************
**********/FTE/Contract Year, subject to the Annual Adjustment beginning in
Contract Year 2) and (2) amounts allocated for the funding of External
Collaborations. The actual allocation of such funds shall be specified in the
Research Program Plan, subject to review and modification by the CNS JMT.
(b) Payments. Within ten (10) Business Days following the first day of
the first quarter of the first Contract Year (the "First Contract Quarter"), AHP
shall pay to Millennium the full amount of funding set forth in the applicable
budget for the First Contract Quarter. Within ten (10) Business Days of the
first day of each subsequent contract quarter (a "Subsequent Contract Quarter"),
AHP shall pay to Millennium the full amount due for each such Subsequent
Contract Quarter. Within thirty (30) days of the completion of the First
Contract Quarter and each Subsequent Contract Quarter during the term of the
Research Program, Millennium shall provide AHP with a written statement setting
forth the actual amounts expended in the immediately preceding contract quarter,
and shall provide AHP with a credit for any amounts overpaid by AHP (except that
with respect to the last quarterly payment of the last Contract Year, Millennium
shall reimburse AHP for any amounts overpaid by AHP) or bill AHP for any amounts
underpaid during such contract quarter (except that AHP shall not be obligated
to pay to Millennium an amount that exceeds the minimum funding level set forth
in the applicable budget).
(c) Records and Audits. Millennium shall keep, complete and accurate
records of the latest three (3) years of funding of the Millennium Research
Program by AHP, and Millennium's funding of the Non-Program New Core Field
Projects, if any, including all aspects of any applicable Reimbursement Costs
pursuant to Section 2.4(a)(iv) hereof, all in accordance with generally accepted
accounting procedures, consistently applied. AHP shall have the right annually
at AHP's expense to have an independent, certified public accountant, reasonably
acceptable to Millennium, review such records in the location(s) where such
records are maintained by Millennium upon reasonable notice and during regular
business hours for the sole purposes of verifying the expenditures by Millennium
with respect to Millennium personnel and with respect to External Collaborations
on an annual basis for which AHP has provided funding pursuant to the Millennium
Research Program. Results of such review shall be
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made available to both Parties. If the review reflects an overpayment of funding
to Millennium, such overpayment shall be promptly remitted to AHP. If the
overpayment is equal to or greater than five percent (5%) of the actual annual
funding amount that was otherwise due, AHP shall be entitled to have Millennium
pay all of the costs of such review.
Section 8.4. Milestones.
(a) Research Milestones. Within thirty (30) days after the
achievement of the following research milestones, AHP shall pay to Millennium
the specified milestone payments, all of which shall be non-refundable:
(i) The sum of ****************************
********************************** (A) that is
*********************** by Millennium, or (B) that is
******************************************************
****************** by Millennium, in each case before or in the
course of the Millennium Research Program; provided, however, that
no more than ******************* ***** may qualify for this
milestone payment until ***
*************************************************** is achieved.
Upon the achievement of each and every
***********************************************, the number of
Candidate Genes eligible for this milestone payment shall
***************** (3) if immediately prior to the achievement of
such ***************************** ***************** the number of
*************** eligible for this milestone payment was
*******************.
(ii) The sum of (A) *********************
***************************************************
***************** that is successfully achieved in the course of
the Research Program, (B) *************
*************************************************
*************************** that is successfully achieved within
the ********************** immediately following the *********** of
the Research Program, (C)
**********************************************
***************************************************
***************** that is successfully achieved within the
********************** commencing on the
************************************************* of the Research
Program and *****************************
*********************************************** of the
*******************************************************
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*************************************************
*************************** that is successfully achieved within
the ninety *****************************
******************************************************
*************** of the Research Program and *********
********************************************************
*********** of the Research Program, and (E) *****
**************************************************
*********************************************** that is
successfully achieved within the **********************
*******************************************************
*****************************************************
****************************************************
*************************************************.
(b) Product Development Milestones. Within thirty (30) days after
the achievement of the following product development milestones, AHP
shall pay to Millennium the specified milestone payments, all of which
shall be non-refundable:
(i) The sum of *****************************
****************************************************** in the first
Major Market Country for each Product.
(ii) The sum of ********************************
******************************************************** **********
in the first Major Market Country for each Product.
(iii) The sum of *********************************
****************************************************** ******* for
each Product.
(iv) The sum of *****************************
***************************************** for each Product.
(v) The sum of ********************************
*******************************************************
***************************************************** ***** for
each Product.
(vi) The sum of ********************************
************************************************ in the first Major
Market Country **************************** for each Product.
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Notwithstanding the foregoing, ********************************** pursuant to
Subsection 8.4(b)(i), (ii), (iii), (iv), (v) or (vi) for any Product that
contains the same active ingredient as contained in a Product with respect to
which Millennium has already received a milestone payment pursuant to such
Subsection.
If AHP begins the development of a Product and later ceases development
of said Product due to ****************************
***************************************************************
*************************************************************** then any
milestone payments made under Subsections 8.4(b)(i), (ii), (iii), (iv), (v) and
(vi) shall be **********************
***************************************************************
***************************************************************
************************** as contained in the original Product.
Section 8.5. Royalty Payments to Millennium on Products.
(a) Royalty Rates
(i) On Sales of Products for Indications in the CNS Disorders
Field. AHP shall pay to Millennium royalties on Net Sales of a
Royalty-bearing Product for an indication in the CNS Disorders
Field at the following rates:
<TABLE>
<CAPTION>
Annual Aggregate
Net Sales in the Royalty-bearing
Territory of each Small Molecule Product/
Royalty-bearing Royalty-bearing Royalty-bearing
Product Vaccine Product Modified Drug
------- --------------- -------------
<S> <C> <C>
less than or equal **** ****
***************
greater than **** **** ****
*****************
*****************
greater than **** ****
*****************
</TABLE>
The royalty rates set forth in the above table shall only apply to that portion
of the Net Sales of a Royalty-bearing Product that falls within the indicated
range. For example, for a Royalty-bearing Small Molecule Product whose annual
Net Sales exceed
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********** the royalty for such product shall be equal to *****
************************************** of Net Sales, plus *****
************************************ of Net Sales plus *********** ***** of that
portion of Net Sales that exceeds *********** Notwithstanding the foregoing, the
royalty rates set forth in this Section 8.5(a)(i) shall be
**************************************, ********************** on Net Sales of
any Royalty-bearing Product ******************************. For the purposes of
this Section 8.5, a Royalty-bearing Product ****************** ***********," in
the circumstance where, on a country-by-country basis, (A)
****************************************************
***************************************************************
***************************************************************
**********************************************(B) *************
*************************************************** provided that (i) where a
Royalty-bearing Product is afforded ***************** only because it is
************************ contained in a ******* application (i.e., the
*********** is not a ********************** contained in an *************), such
***************************** ********************************************
******************* *************************************************
************** **************** (assuming, for this purpose, such ***********
would ***** in the **** as then ****************** in a ****** in the
******************), and (ii) the ************************ ******************
pursuant to Section 8.5(b) below shall be for ********************************
***************** of the Royalty-bearing Product ******* by such ***********
contained in a ******* **********, if no ****** thereon ****** in the
****************** prior to the expiration of such ***********************
(provided that if a ********************* following the expiration of such
***********************, AHP's royalty payment obligations pursuant to Section
8.5(b) below shall resume).
(ii) On Sales of Products for Indications Outside of the CNS
Disorders Field. In the event that AHP sells a Royalty-bearing
Product that is registered for sale solely in a medical indication
******************* **************, the royalty rate on the Net
Sales of such Royalty-bearing Product shall be *************
**************************** for such Royalty-bearing Product as
indicated in Section 8.5(a)(i). Sales of a Royalty-bearing Product
that is only registered for either an indication(s)
****************************** or an indication(s)
********************************** shall be assumed to be for that
indication unless
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otherwise demonstrated. In the event that a Royalty-bearing Product
is registered for sale in both an indication in the
*************************************
**********************************, the royalty rate on Net Sales
of such Royalty-bearing Product in the *** *************** shall be
************************** of the rate applicable for such
Royalty-bearing Product as indicated in Section 8.5(a)(i) and the
royalty rate on Net Sales of such Royalty-bearing Product
************** ******************* shall be ******************) of
the rate applicable for such Royalty-bearing Product as indicated
in Section 8.5(a)(i). AHP shall have the obligation to demonstrate
by appropriate records that the sales subject to the lower royalty
rate are for an indication **********************************.
(b) Length of Royalty Payments. The royalties payable under Section
8.5(a) shall be paid on a country-by-country basis (i) from the date of
First Commercial Sale for each Royalty-bearing Product until the
termination of any ***** *********** afforded such Royalty-bearing
Product in such country, or (ii) until
********************************** ***************, whichever of (i) or
(ii) is longer.
(c) Royalties Payable Only Once. The obligation to pay royalties is
imposed only once with respect to the same unit of Royalty-bearing
Product. Except as specifically provided in this Agreement, it is
understood and agreed that there shall be no deductions from the
royalties payable hereunder.
Article IX
Accounting
Section 9.1. Royalty Reports. AHP shall deliver to Millennium, within
sixty (60) days after the end of each calendar quarter, a written accounting of
AHP's, its Affiliates' and its Sublicensees' sales and other consideration
received subject to royalty payment due to Millennium for such quarter. Such
quarterly reports shall indicate the Net Sales of Royalty-bearing Products on a
country-by-country basis. This obligation shall commence with the first calendar
quarter in which there is a Net Sale of a Royalty-bearing Product by AHP or any
of its Sublicensees.
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Section 9.2. Delivery of Royalty. When AHP delivers the accounting to
Millennium, AHP shall also deliver all royalty payments due to Millennium for
the calendar quarter.
Section 9.3. Records and Audits. AHP shall keep, and shall require its
Affiliates and Sublicensees to keep, complete and accurate records of the latest
three (3) years of Net Sales. Millennium shall have the right annually at
Millennium's expense to have an independent, certified public accountant,
reasonably acceptable to AHP, review such records in the location(s) where such
records are maintained by AHP, its Affiliates or its Sublicensees upon
reasonable notice and during regular business hours and under obligations of
strict confidence, for the purposes of verifying royalties payable to Millennium
and Net Sales. Results of such review shall be made available to both Parties.
If the review reflects an underpayment of royalties to Millennium, such
underpayment shall be promptly remitted to Millennium. If the underpayment is
equal to or greater than five percent (5%) of the royalty amount that was
otherwise due, Millennium shall be entitled to have AHP pay all of the costs of
such review.
Section 9.4. Currency of Payments. All payments under this Agreement
shall be made in United States dollars by wire transfer to such bank account as
Millennium may designate from time to time. Any payments due hereunder on Net
Sales outside of the United States shall be payable in United States dollars at
the rate of exchange of the currency of the country in which the Net Sales are
made as published by the Wall Street Journal for the last Business Day of the
calender quarter for which the royalties are payable.
Section 9.5. Tax Withholding. AHP and Millennium shall use all
reasonable and legal efforts to reduce tax withholding on payments made to
Millennium hereunder. Notwithstanding such efforts, if the Parties conclude that
tax withholdings under the laws of any country in the Territory are required
with respect to payments to Millennium under Article VIII, AHP shall withhold
the required amount and pay it to the appropriate governmental authority. In
such a case, AHP will promptly provide Millennium with original receipts or
other evidence sufficient to allow Millennium to obtain the benefits of such tax
withholdings.
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Article X
Term and Termination
Section 10.1. Term. This Agreement becomes effective as of the Effective
Date, may be terminated as set forth in this Article X, and otherwise remains in
effect until the expiration of the term of AHP's obligation to pay royalties.
******** ***************************************************************
***************************************************************
**************************** under this Agreement.
Section 10.2. Termination For Material Breach. Upon any material breach
under this Agreement by either Party (in such capacity, the "Breaching Party"),
the other Party (in such capacity, the "Non-Breaching Party") may terminate this
Agreement by ninety (90) days' written notice to the Breaching Party, specifying
the material breach, default or other defect. For the sake of clarity, any
failure of diligence by AHP under Sections 7.2, 7.3 and/or 7.4 shall not be
deemed a material breach for purposes of this Section 10.2. The termination
becomes effective at the end of the ninety (90) day period unless (i) the
Breaching Party cures such breach during such ninety (90) day period, or (ii) if
such breach is not susceptible to cure within ninety (90) days of the receipt of
written notice of the breach, the Breaching Party is diligently pursuing a cure
(unless such breach, by its nature, is incurable, in which case the Agreement
may be terminated immediately). The Parties will use reasonable efforts to work
together to cure any breach.
Section 10.3. Rights Upon Termination for Material Breach. If the
Non-Breaching Party terminates this Agreement pursuant to Section 10.2 following
a material breach by the Breaching Party, (a) the Breaching Party shall return
to the Non-Breaching Party all Confidential Information and materials received
from the Non-Breaching Party during the term of this Agreement, (b) the
Breaching Party shall cease all use of the Confidential Information and
materials received from the Non-Breaching Party for any purpose, except that the
Breaching Party may keep a copy of all documents for record keeping purposes
only, (c) the Breaching Party shall deliver to the Non-Breaching Party all data
and information developed by the Breaching Party prior to such termination as a
result of the Research Program or the AHP Discovery Program which can reasonably
be viewed as necessary or useful to obtain governmental regulatory approvals,
and, subject to any agreements with third parties, the ***********************
***************************************************************
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(d) in the event that the Breaching Party is ********************
*************************************************************** set forth in
Section 5.1 and Section 5.2, subject to the continued payment of all applicable
amounts set forth in Article VIII hereof, and (e) in the event that the
Breaching Party is AHP, all licenses granted to AHP under this Agreement shall
terminate.
Section 10.4. Residual Rights. Upon expiration or early termination of
this Agreement, except as specifically provided herein to the contrary, all
rights and obligations of the Parties shall cease, except as follows:
(a) Obligations to pay royalties and other sums accruing hereunder
up to the date of expiration or termination; and
(b) The right to complete the manufacture and sale of
Royalty-bearing Products, which qualify as "work in process" under
generally accepted cost accounting standards or which are in stock at
the date of expiration or termination, and the obligation to pay
royalties on Net Sales of such Royalty-bearing Products; and
(c) The obligations regarding confidentiality as set forth in
Article IV; and
(d) All obligations for record keeping and accounting reports; and
(e) A Party's right to inspect books and records of the other Party
as set forth in Article XIII and Article IX, which right shall continue
in full force and effect for three (3) years following the expiration of
such other Party's obligation under this Agreement to keep such books
and records; and
(f) Obligations of defense and indemnity, which obligations shall
continue in full force and effect for an unlimited period; and
(g) Obligations set forth in Section 6.7 and Section 6.9, but only
with respect to those causes of action that accrued prior to such
expiration or termination; and
(h) Any cause of action or claim of Millennium or AHP accrued or to
accrue because of any breach or default by the other Party hereunder.
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<PAGE> 75
Article XI
Product Liability Indemnification
(a) Indemnification by AHP and its Affiliates. AHP and its Affiliates
(in such capacity, the "AHP Indemnifying Parties") agree to defend Millennium,
at the AHP Indemnifying Parties' cost and expense, and will indemnify and hold
Millennium and its directors, officers, employees and agents (the "Millennium
Indemnified Parties") harmless from and against any losses, costs, damages, fees
or expenses arising out of any claim relating to personal injury from the
development, manufacture, use, sale or other disposition of any Product by the
AHP Indemnifying Parties or Sublicensees. In the event of any such claim against
the Millennium Indemnified Parties by any party, the Millennium Indemnified
Parties shall promptly notify the AHP Indemnifying Parties in writing of the
claim and the AHP Indemnifying Parties shall manage and control, at their sole
expense, the defense of the claim and its settlement. The Millennium Indemnified
Parties shall cooperate with the AHP Indemnifying Parties and may, at their
option and expense, be represented in any such action or proceeding. The AHP
Indemnifying Parties shall not be liable for any litigation costs or expenses
incurred by the Millennium Indemnified Parties without the AHP Indemnifying
Parties' prior written authorization. In addition, the AHP Indemnifying Parties
shall not be responsible for the indemnification of any Millennium Indemnified
Parties with respect to any claim arising from any negligent or intentional acts
by any Millennium Indemnified Party.
(b) Indemnification by Millennium and its Affiliates. Millennium and its
Affiliates (in such capacity, the "Millennium Indemnifying Parties") agree to
defend AHP, at the Millennium Indemnifying Parties' cost and expense, and will
indemnify and hold AHP and its directors, officers, employees and agents (the
"AHP Indemnified Parties") harmless from and against any losses, costs, damages,
fees or expenses arising out of any claim relating to personal injury from the
development, manufacture, use, sale or other disposition of any product for
which Millennium has retained rights hereunder by the Millennium Indemnifying
Parties or Sublicensees. In the event of any such claim against the AHP
Indemnified Parties by any party, the AHP Indemnified Parties shall promptly
notify the Millennium Indemnifying Parties in writing of the claim and the
Millennium Indemnifying Parties shall manage and control, at their sole expense,
the defense of the claim and its settlement. The AHP Indemnified Parties shall
cooperate with the Millennium Indemnifying Parties and may, at
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<PAGE> 76
their option and expense, be represented in any such action or proceeding. The
Millennium Indemnifying Parties shall not be liable for any litigation costs or
expenses incurred by the AHP Indemnified Parties without the Millennium
Indemnifying Parties' prior written authorization. In addition, the Millennium
Indemnifying Parties shall not be responsible for the indemnification of any AHP
Indemnified Parties with respect to any claim arising from any negligent or
intentional acts by any AHP Indemnified Party.
Article XII
Governing Law
This Agreement shall be construed and the respective rights of the
Parties hereto determined according to the substantive laws of the State of
Delaware notwithstanding the provisions governing conflict of laws under such
Delaware law to the contrary except matters of intellectual property law which
shall be determined in accordance with the national intellectual property laws
relevant to the intellectual property in question.
Article XIII
Assignment
Neither Party may assign this Agreement in whole or in part without the
consent of the other, except to an Affiliate, or except if such assignment
occurs in connection with the sale or transfer of all or substantially all of
the business and assets of Millennium or AHP to which the subject matter of this
Agreement pertains.
Article XIV
Affiliate Agreements
If requested by a Party, the other Party agrees to execute separate
license agreements ("Affiliate Agreements") separately granting directly to an
Affiliate of such Party, equivalent rights as granted to such Party herein. Any
such Affiliate Agreement entering into force under this Article XIV shall be
prepared by
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<PAGE> 77
such Party and shall contain terms and conditions consistent with those of this
Agreement.
Article XV
Amendments
This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof, and supersedes all previous arrangements
with respect to the subject matter hereof, whether written or oral. Any
amendment or modification to this Agreement shall be made in writing signed by
both Parties.
Article XVI
Notices
All notices, instructions and other communications hereunder or in
connection herewith shall be in writing and shall be (i) delivered personally,
(ii) sent by registered or certified mail, return receipt requested, postage
prepaid, (iii) sent via a reputable overnight courier service, or (ii) sent by
facsimile transmission, in each case to an address set forth below. Any such
notice, instruction or communication shall be deemed to have been delivered upon
receipt if delivered by hand, five business days after it is sent by registered
or certified mail, return receipt requested, postage prepaid, one business days
after it is sent via a reputable overnight courier service, or when transmitted
with electronic confirmation of receipt, if transmitted by facsimile (if such
transmission is on a business day; otherwise, on the next business day following
such transmission).
Notices to Millennium shall be addressed to:
Millennium Pharmaceuticals, Inc.
640 Memorial Drive
Cambridge, Massachusetts 02139-4815
Attention: Chief Executive Officer
Facsimile No.: (617) 621-0264
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<PAGE> 78
with a copy to:
Attention: Legal Department
Facsimile No.: (617) 374-0074
Notices to AHP shall be addressed to:
Wyeth-Ayerst Research
555 East Lancaster Pike
St. Davids, PA 19087
Attention: Office of the Senior Vice President,
Global Business Development
Facsimile No.: (610) 688-9498
with a copy to:
American Home Products Corp.
Five Giralda Farms
Madison, NJ 07940
Attention: Associate General Counsel
Facsimile No.: (201) 660-7155
Either Party may change its address by giving notice to the other Party in the
manner herein provided.
Article XVII
Force Majeure
No failure or omission by the Parties hereto in the performance of any
obligation of this Agreement shall be deemed a breach of this Agreement or
create any liability if the same shall arise from any cause or causes beyond the
control of the Parties, including, but not limited to, the following: acts of
God; acts or omissions of any government; any rules, regulations or orders
issued by any governmental authority or by any officer, department, agency or
instrumentality thereof; fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot; and invasion and provided that such failure or
omission resulting from one of the above causes is cured as soon as is
practicable after the occurrence of one or more of the above-mentioned causes.
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<PAGE> 79
Article XVIII
Representations and Warranties
Section 18.1. Representation of Authority. Millennium and AHP each
represents and warrants to the other that as of the Effective Date it has full
right, power and authority to enter into this Agreement and to provide the
Know-How under Article III hereof, including the biological materials, subject
to the limitations set forth in this Section 18.1. Millennium represents and
warrants to AHP that it (i) is the owner or licensee, as the case may be, of the
Millennium Program Patent Rights and the Millennium Program Know-How, and (ii)
has the right to grant to AHP the licenses and sublicenses granted pursuant to
this Agreement. Millennium represents that it has furnished AHP with (a) a copy
of all patent applications comprising Millennium Program Patent Rights and (b) a
summary of all license agreements and options pertaining to the Millennium
Program Patent Rights and Millennium Program Know-How existing as of the
Effective Date, as reflected on Appendix C, and by its execution and delivery of
this Agreement, AHP agrees to be bound by the terms of such agreements to the
extent required thereby.
Section 18.2 Outstanding Agreements. Appendix C, which shall be modified
by Millennium from time to time consistent with the provisions of this
Agreement, lists all material outstanding options, licenses or agreements of any
kind between Millennium and any third party relating to Millennium Program
Patent Rights and Millennium Program Know-How.
Section 18.3. Consents. All necessary consents, approvals and
authorizations of all government authorities and other persons required to be
obtained by such party in connection with execution, delivery and performance of
this Agreement have been and shall be obtained.
Section 18.4. No Conflict. Notwithstanding anything to the contrary in
this Agreement, the execution and delivery of this Agreement and the performance
of such Party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or regulations and (b) do not and shall not
conflict with, violate or breach or constitute a default or require any consent
under, any contractual obligation of such Party, including with respect to
Millennium, any obligations or duties arising under any of the agreements listed
on Appendix C hereof.
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<PAGE> 80
Section 18.5. Section 365(n) of the Bankruptcy Code. All rights and
licenses granted under or pursuant to any section of this Agreement are, and
shall otherwise be, deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101(35A) of the Bankruptcy Code. The Parties shall retain and may fully
exercise all of their respective rights and elections under the Bankruptcy Code.
Upon the bankruptcy of either Party, the non-bankrupt Party shall further be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property, and such, if not already in its possession, shall be
promptly delivered to the non-bankrupt Party, unless the bankrupt Party elects
to continue, and continues, to perform all of its obligations under this
Agreement.
Section 18.6. Knowledge of Pending or Threatened Litigation. Each Party
represents and warrants to the other that it is not aware of any pending or
threatened litigation (and has not received any communication) which alleges
that such Party's activities in the CNS Disorders Field to date have violated,
or by conducting its business as currently proposed under the Research Program
contemplated herein would violate, any of the intellectual property rights of
any other person. To the best of each Party's knowledge, there is no material
unauthorized use, infringement or misappropriation of any of its intellectual
property rights licensed hereunder to the other Party.
Section 18.7. Employee Obligations. Each Party represents and warrants
that all of its employees, officers, and consultants have executed agreements or
have existing obligations under law requiring, in the case of employees and
officers, assignment to such Party of all inventions made during the course of
and as the result of their association with such Party and obligating the
individual to maintain as confidential such Party's Confidential Information as
well as confidential information of a third party which such Party may receive,
to the extent required to support such Party's obligations under this Agreement.
Section 18.8. Full Disclosure. Each Party has disclosed to the other in
good faith, all material information such Party believes is relevant to the
subject matter of this Agreement, and to such Party's ability to observe and
perform its obligations hereunder.
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<PAGE> 81
Section 18.9. Compliance with Applicable Laws and Regulations. Each
Party represents and warrants to the other Party that it will comply with all
applicable laws and regulations in the development, manufacture and marketing of
Products.
Section 18.10. Export Controls. The Parties acknowledge that both are
subject to the laws and regulations of the United States of America governing
exportation of technical information, computer software, laboratory prototypes
and other commodities and that the rights hereunder are contingent on compliance
with all such laws and regulations. The transfer of certain technical data and
commodities may require a license from the appropriate agency of the United
States Government and neither Party shall export such technical data or
commodities to certain foreign countries to which export restrictions apply
without the prior approval of such agency.
Section 18.11. No Warranties EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, AND PARTICULARLY THAT PRODUCTS WILL BE
SUCCESSFULLY DEVELOPED HEREUNDER, AND IF DEVELOPED, WILL HAVE COMMERCIAL UTILITY
OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Article XIX
Public Announcements
Any announcements or similar publicity with respect to the execution of
this Agreement shall be agreed between the Parties in advance of such
announcement. AHP understands that this Agreement and Millennium's efforts
hereunder are likely to be of significant interest to investors, analysts and
others, and Millennium therefore intends to make such public announcements with
respect thereto. Millennium agrees that any such announcement will not contain
confidential business or technical information and, if disclosure of
confidential business or technical information is required by law or regulation,
will redact if permissible by such law or regulation, or otherwise make
reasonable efforts to minimize such disclosure and obtain confidential treatment
for any such information which is disclosed to a governmental agency or group.
Each Party agrees to provide to the other Party a copy of any public
announcement as soon as reasonably practicable under the circumstances prior to
its scheduled release. Each Party shall have the right to expeditiously review
and recommend changes to any announcement regarding this Agreement or any
studies
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<PAGE> 82
carried out under this Agreement. Except as otherwise required by law, the Party
whose press release has been reviewed shall consider in good faith the removal
of any information the reviewing Party reasonably deems to be inappropriate for
disclosure.
Article XX
Additional Agreements
Section 20.1. Independent Contractors. It is understood and agreed that
the relationship between the Parties hereunder is that of independent
contractors and that nothing in this Agreement shall be construed as
authorization for either AHP or Millennium to act as agent for the other.
Members of the CNS JMT, the Vaccine Management Team and the Steering Committee
shall be, and shall remain, employees of Millennium or AHP, as the case may be.
Neither Party shall incur any liability for any act or failure to act by members
of the CNS JMT and the Steering Committee who are employees of the other Party.
Section 20.2. Consents Not Unreasonably Withheld. Whenever provision is
made in this Agreement for either Party to secure the consent or approval of the
other, that consent or approval shall not unreasonably be withheld, and whenever
in this Agreement provisions are made for one Party to object to or disapprove a
matter, such objection or disapproval shall not unreasonably be exercised.
Section 20.3. No Strict Construction. This Agreement has been prepared
jointly and shall not be strictly construed against either Party.
Section 20.4. Headings. The captions or headings of the Sections or
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
Section 20.5. Severance of Clauses. Each Party agrees that, should any
provision of this Agreement be determined by a court of competent jurisdiction
to violate or contravene any applicable law or policy, such provision will be
severed or modified by the court to the extent necessary to comply with the
applicable law or policy, and such modified provision and the remainder of the
provisions hereof will continue in full force and effect.
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<PAGE> 83
Section 20.6. No Waiver. The waiver of a breach hereunder may be
effected only by a writing signed by the waiving Party and shall not constitute
a waiver of any other breach.
Section 20.7. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of such
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement is executed this __ day of July,
1996, to be effective as of the Effective Date.
WYETH-AYERST RESEARCH DIVISION
OF AMERICAN HOME PRODUCTS MILLENNIUM PHARMACEUTICALS, INC.
CORPORATION
- ------------------------------ --------------------------------
Steven H. Holtzman
Chief Business Officer
- ------------------------------ --------------------------------
Title Title
- ------------------------------ --------------------------------
Date Date
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<PAGE> 84
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX A
CNS Disorders Field
A.1 CORE FIELD
********** *****************************
**************
**************
********** *****************************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
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<PAGE> 85
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
A.2 RESERVE FIELD
********** *****************************
**************
**************
**************
**************
**************
**************
********** *****************************
**************
**************
********** *****************************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
**************
- 79 -
<PAGE> 86
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
A.3 EXPANSION FIELD
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
*************** ******************
- 80 -
<PAGE> 87
APPENDIX B
Research Program Plan
INTENTIONALLY OMITTED
- 81 -
<PAGE> 88
APPENDIX C
External Collaborations
Sponsored Research and Collaboration Agreement by and between Millennium
Pharmaceuticals, Inc., the Regents of the University of California, and Dr.
Nelson Freimer, dated February 23, 1996.
Sponsored Research and Collaboration Agreement by and between Millennium
Pharmaceuticals, Inc., the President and Fellows of Harvard College and
Washington University, and Drs. Ming Tsuang and Steven Faraone of Harvard and
Dr. Robert Cloninger of Washington dated April 15, 1996
License Agreement by and between Millennium Pharmaceuticals, Inc., and the
Regents of the University of California, dated February 23, 1996.
- 82 -
<PAGE> 89
APPENDIX D
Equity-Related Terms
1. Stock Purchase Agreement
The Parties shall execute and deliver a stock purchase agreement
containing basic representations and warranties customary for the sale
of shares of a publicly-held company, as well as closing conditions
relating to (a) the accuracy of such representations and warranties,
and (b) any filings and approvals required from regulatory authorities
(such as Hart-Scott-Rodino).
2. Registration Rights
(a) Demand registration rights
- $5,000,000 minimum size
- no demand prior to December 31, 1998
- limit to one (1) demand registration
(b) Piggyback registration rights
- unlimited, subject to underwriter cutback
(c) Form S-3 registration rights
- $1,000,000 minimum size
- limit to four (4) S-3 registrations
- subject to other customary limitations
(d) Other
- substantially similar to terms set forth in the Second Amended
and Restated Investor Rights Agreement dated as of October 3,
1995 between Millennium and the Investors specified therein,
except that in the event that Millennium grants registration
rights to a third party after the Effective Date that are, on the
whole, more favorable to such third party, Millennium shall offer
such more favorable rights to AHP.
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<PAGE> 90
3. Standstill Provision (to be effective as of the Effective Date)
AHP agrees that for a period commencing on the Effective Date and ending
one (1) year after the termination of the Millennium Research Program,
it shall not, except pursuant to the provisions of this Agreement or
with Millennium's prior written consent, take action to acquire
beneficial ownership of any securities of Millennium or authorize or
make a tender, exchange or other offer therefor without the written
consent of Millennium, if the effect of such acquisition would be to
increase the percentage of the Total Potential Voting Power (as defined
below) of Millennium represented by all Common Stock, preferred stock
and other non-voting securities convertible into Common Stock then owned
by AHP to 20.0% (or more) of the Total Potential Voting Power of
Millennium other than as a result of (i) the acquisition of an entity
that owns securities of Millennium or (ii) AHP's participation as an
investor in a mutual fund, pooled investment account or similar fund
that owns securities of Millennium. For purposes hereof, "Total
Potential Voting Power" shall mean the total number of votes which may
be cast in the election of directors of Millennium if all securities
entitled to vote in the election of directors are present and voted and
assuming that all then outstanding securities of Millennium that are
convertible into, exchangeable for or otherwise exercisable to acquire
shares of preferred stock or Common Stock are so converted, exchanged or
otherwise exercised. AHP further agrees that, during the period that
this standstill covenant is in effect, AHP will not engage in any
Solicitation as defined below) or engage in any other act for the
purpose of opposing a Solicitation by the Board of Directors of
Millennium with respect to the election or removal of directors of
Millennium at any annual or special meeting of security holders or
action by written consent in lieu of a meeting. A "Solicitation", as
such term is used herein, shall have the meaning set forth in Rule
14a-1(l) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); provided however, that for purposes of this paragraph,
the term "Solicitation" shall be deemed to include a communication which
falls within the exception set forth in Rule 14a-1(l)(2)(iv) of the
Exchange Act.
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<PAGE> 1
Exhibit 10.2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
BIOINFORMATICS ACCESS AND LICENSE AGREEMENT
This Bioinformatics Access and License Agreement (the "Agreement") is
dated as of August 1, 1996 (the "Effective Date"), and is entered by and
between Millennium Pharmaceuticals, Inc., a Delaware corporation with its
principal offices at 640 Memorial Drive, Cambridge, MA 02139-4815
("Millennium") and American Home Products Corporation, a Delaware corporation
acting through its Wyeth-Ayerst Research Division, with its principal offices
at 555 East Lancaster Pike, St. Davids, PA 19087 ("AHP").
WHEREAS, Millennium has developed and owns certain bioinformatics
computer software and other related technology; and
WHEREAS, AHP desires to use such software and other technology and
Millennium is willing to deliver copies to AHP of such software and other
technology and assist AHP in the installation and implementation thereof,
together with a grant to AHP of a nonexclusive right to use such software and
other technology on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants herein contained, Millennium and AHP hereby agree as follows:
1. Definitions
1.1 Affiliate" means any corporation, company partnership, joint venture
and/or firm which controls, is controlled by or is under common control with a
Party. For purposes of this Section 1.1, "control" shall mean, (a) in the case
of corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the stock or shares having the right to vote for the election of
directors, and (b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct the management and policies of such non-corporate entities, provided,
however, that the foregoing shall not include any entity with respect to which
there is a contractual restriction on the right to elect a majority of the
directors.
1.2 "Bioinformatics Joint Management Team" or "Bioinformatics JMT" means
a joint management team, as described in Section 7.1.
<PAGE> 2
1.3 "CNS Agreement" shall mean the CNS Research, Collaboration and
License Agreement between the Parties hereto that was executed on even date
herewith.
1.4 "Confidential Information" means all materials, know-how or other
information, including, without limitation, proprietary information and
materials (whether or not patentable or copyrightable) regarding a Party's
technology, products, business information or objectives, which is designated
as confidential in writing by the disclosing Party, whether by letter or by
the use of an appropriate stamp or legend, prior to or at the time any such
material, trade secret or other information is disclosed by the disclosing
Party to the other Party. Notwithstanding the foregoing, materials, know-how
or other information which is orally, electronically or visually disclosed by
a Party, or is disclosed in writing without an appropriate letter, stamp or
legend, shall constitute Confidential Information if the disclosing Party,
within thirty (30) days after such disclosure, delivers to the other Party a
written document or documents describing the materials, know-how or other
information and referencing the place and date of such oral, visual,
electronic or written disclosure and the names of the persons to whom such
disclosure was made, provided, however, that (i) the Millennium Bioinformatics
Technology shall constitute Confidential Information, and (ii) any technical
information disclosed at a meeting of the Bioinformatics JMT or the Steering
Committee shall constitute Confidential Information, even if not identified as
confidential, unless otherwise specified.
1.5 "Documentation" means the software documentation identified in
Exhibit A (as modified from time to time in hard copy and/or electronic
format) delivered by Millennium to AHP for use in association with the
Millennium Bioinformatics Technology.
1.6 "Management Committee(s)" means the Bioinformatics JMT and/or the
Steering Committee.
1.7 "Millennium Bioinformatics Patent Rights and Copyrights" means a
patent or copyright which covers Millennium Bioinformatics Technology that is
owned or controlled by Millennium and as to which Millennium has the right to
grant licenses without violating the terms of any agreement with a third
party.
1.8 "Millennium Bioinformatics Technology" means integrated software
tools, in object code form only, the current version of which is identified in
Exhibit A (such Exhibit A to be modified from time to time to include new
functionality in general use by
-2-
<PAGE> 3
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
the relevant researchers at Millennium for the *********
************************************************************ which (a) are (i)
developed by or for Millennium or (ii) acquired by Millennium and with respect
to which Millennium has the right to grant licenses or sublicenses (if AHP
bears any incremental costs incurred by Millennium in connection with the
grant of the license or sublicense to AHP) without violating the terms of any
agreement with a third party, and (b) are delivered to AHP for the *********
************************************************** (regardless of
************************************************* including but not limited to
software tools used (1) to analyze ************** *** and ******************
(2) to predict ******************* and ********************* and ********* of
the **************** by ***** and (3) to identify the
************************* of ***** from proprietary databases or from publicly
available databases, provided, however, that Millennium Bioinformatics
Technology shall not include (A) metatools (i.e., software tools used to
develop the Millennium Bioinformatics Technology itself), (B) source code, (C)
any software tools used in high throughput genotyping, or (D) software
delivered pursuant to the TPT Agreement.
1.9 "Party" means AHP or Millennium; "Parties" means AHP and Millennium.
1.10 "Platform" means the hardware and software configuration broadly
specified in Exhibit A (as modified from time to time by the Bioinformatics
JMT in accordance with Section 7.1) that is required to use the Millennium
Bioinformatics Technology.
1.11 "Requisite Majority" means, with respect to any Management
Committee, a majority of the members of such Management Committee, provided
that such majority must include at least two (2) representatives of each
Party.
1.12 "Steering Committee" shall have the meaning ascribed to such term
in the CNS Agreement.
1.13 "Term" means the term of this Agreement as set forth in Section
9.1.
1.14 "Third Party Software" means software, listed in Exhibit A,
licensed to Millennium by a third party which AHP is required to license
directly from such third party.
1.15 "TPT Agreement" shall mean the Transcription Profiling Technology
Access and License Agreement between the Parties hereto that was executed on
even date herewith.
-3-
<PAGE> 4
1.16 "Upgrade" means a revision of the Millennium Bioinformatics
Technology or Documentation (including for example, error corrections,
modifications, or enhancements) that Millennium has installed at and is in
productive use at Millennium.
1.17 "Wholly-Owned Subsidiary" means any corporation, company
partnership, joint venture and/or firm which is completely controlled by a
party hereto. For purposes of this Section 1.17, "complete control" shall
mean, (a) in the case of corporate entities, direct or indirect ownership of
at least ninety-five percent (95%) of the stock or shares having the right to
vote for the election of directors, and (b) in the case of non-corporate
entities, direct or indirect ownership of at least ninety-five percent (95%)
of the equity interest with the power to direct the management and policies of
such non-corporate entities.
2. Licenses.
2.1 Internal Use License. Subject to the terms and conditions
contained herein, Millennium grants AHP and its Wholly-Owned Subsidiaries a
nonexclusive, nontransferable right and license (without the right to
sublicense any of such rights) to (a) use, copy and internally distribute
(exclusively to facilities of AHP and its Wholly-Owned Subsidiaries ("AHP
Facilities") for use exclusively by employees and agents of AHP and its Wholly-
Owned Subsidiaries) the Millennium Bioinformatics Technology and (b) to
prepare derivative works of the Millennium Bioinformatics Technology for the
purpose of merging or interfacing the Millennium Bioinformatics Technology
with software of AHP and of its Wholly-Owned Subsidiaries, provided, however,
that AHP shall not have the right to use any source code of the Millennium
Bioinformatics Technology to prepare such derivative works and AHP shall not
have the right to distribute such derivative works to third parties other than
agents of AHP working on behalf of AHP. AHP shall inform Millennium, in
writing, of all AHP Facilities at which Millennium Bioinformatics Technology
is being used or otherwise accessed, whether by installation or through
electronic data access.
2.2 Documentation. Subject to the terms and conditions contained
herein, Millennium grants AHP and its Wholly-Owned Subsidiaries a
nonexclusive, nontransferable right and license to (a) use, copy, internally
distribute exclusively to and for use exclusively by employees and agents of
AHP and its Wholly-Owned Subsidiaries and (b) prepare derivative works of the
Documentation solely for use with the Millennium Bioinformatics Technology.
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2.3 License Restrictions. AHP shall not and its Wholly-Owned
Subsidiaries shall not:
(a) decompile, disassemble or otherwise reverse engineer the
Millennium Bioinformatics Technology;
(b) use, copy or distribute the Millennium Bioinformatics
Technology or Documentation directly or indirectly, except as expressly
permitted under this Agreement;
(c) use the Millennium Bioinformatics Technology or
Documentation for any purpose for the benefit of any other person or entity,
provided, however, that this restriction shall not prevent AHP from
manufacturing or distributing any compounds or other products developed using
the Millennium Bioinformatics Technology;
(d) enhance, modify or prepare derivative works (except as
provided above in Section 2.1) of the Millennium Bioinformatics Technology.
3. Delivery, Installation and Acceptance.
3.1 Delivery. Millennium shall, within fifteen (15) days of the
Effective Date, provide to AHP one (1) master hard copy of the Documentation.
3.2 Installation. Millennium agrees to install the Millennium
Bioinformatics Technology at a facility of AHP in the United States
(designated by AHP), provided that AHP has purchased and installed the
Platform (including obtaining necessary licenses from third parties) specified
in Exhibit A hereto. If the Platform is not installed at the time the
Millennium Bioinformatics Technology is delivered to AHP, Millennium shall
have thirty (30) days from the date it is notified by AHP that such Platform
is installed at AHP to install the Millennium Bioinformatics Technology. The
cost of such initial installation is included in the license fee; provided,
however, that Millennium shall not be under any obligation to acquire any
Third Party Software for AHP or obtain any other software required to complete
the Platform. Millennium shall install Upgrades as determined by the
Bioinformatics JMT and AHP shall use its reasonable efforts to enable the
installation of Upgrades as soon as available from Millennium.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
3.3 Acceptance.
(a) Millennium shall only be obligated to install the Millennium
Bioinformatics Technology at one AHP Facility, and if AHP elects to have the
Millennium Bioinformatics Technology installed at any other AHP Facility, AHP
shall install the Millennium Bioinformatics Technology itself or, if Millennium
agrees, pay Millennium at Millennium's then standard rates to install the
Millennium Bioinformatics Technology at such additional facility or facilities.
(b) The Bioinformatics JMT shall define specific acceptance criteria
(the "Acceptance Criteria"), which will be approved by the Steering Committee,
and which will be used by the Bioinformatics JMT to determine when each item of
Millennium Bioinformatics Technology has been *****************************
******************************************* other AHP Facilities selected by AHP
and approved by the Bioinformatics JMT, which approval shall not be unreasonably
withheld. Such criteria shall be based on the following factors:
(1) The Millennium Bioinformatics Technology shall
**************************************
**************************************** Millennium.
(2) The Millennium Bioinformatics Technology shall
***************************************************
************************************************ AHP
Facility.
(3) Millennium has provided or made reasonable offers to
provide at least ******************** training sessions
for ****** persons referred to in Section 6.4 of this
Agreement.
(c) When Millennium notifies the Bioinformatics JMT that it has
installed the Millennium Bioinformatics Technology, the Bioinformatics JMT shall
then determine in good faith whether such installation satisfies the Acceptance
Criteria.
4. Ownership of Software and Source Code Escrow.
4.1 Millennium Bioinformatics Technology. Millennium and its licensors shall
retain all their respective rights, title and interest in the Millennium
Bioinformatics Technology, Millennium Bioinformatics Patent Rights and
Copyrights and Documentation and
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Millennium shall retain all rights, title and interest in all modifications
and derivative works thereof made by Millennium during the term of this
Agreement, and AHP and its Wholly-Owned Subsidiaries shall not take any action
inconsistent with such title and ownership. AHP and its Wholly-Owned
Subsidiaries shall retain all of its/their rights, title and interest, subject
to Millennium's rights in the underlying Millennium Bioinformatics Technology,
in any derivative works it prepares pursuant to Section 2.1 of this Agreement.
4.2 Intellectual Property Protection. AHP and its Wholly-Owned Subsidiaries
shall maintain the Millennium Bioinformatics Technology in strict confidence
under the terms and conditions of Article 8 hereof and shall not alter or remove
any printed or on-screen copyright, trade secret, proprietary and/or other legal
notices contained on or in copies of the Millennium Bioinformatics Technology or
Documentation.
4.3 Source Code Escrow. The Parties shall enter into a software escrow
agreement with Data Securities International or another mutually acceptable
escrow agent in substantially the form attached hereto as Exhibit B. Millennium
shall deposit the source code for the Millennium Bioinformatics Technology in a
source code escrow account with the escrow agent within thirty (30) days after
the Bioinformatics JMT determines that the installation of the Millennium
Bioinformatics Technology has satisfied the Acceptance Criteria. Millennium
shall also deposit the source code for any Upgrades of the Millennium
Bioinformatics Technology which it delivers to AHP. All costs associated with
such escrow shall be borne by Millennium. Such source code shall be released
only upon an uncured material breach by Millennium of any Section of this
Agreement other than Section 8 or upon any intentional or grossly negligent
disclosure of Confidential Information of AHP. In the event that such escrow
agreement is terminated, at the election of AHP, the Parties shall enter into a
new escrow agreement with another mutually agreeable escrow agent.
4.4 Third Party Software. AHP shall obtain its own licenses to the Third
Party Software at its expense.
5. Payments.
5.1 License Fee. In consideration of the licenses granted herein, AHP shall
pay Millennium a total of *********** payable in nine (9) installments as
follows:
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(a) ******************************** upon the Bioinformatics JMT determining
that the Millennium Bioinformatics Technology has been installed and that
Acceptance Criteria have been met;
(b) ****************************************************** on the first day
of each of eight (8) consecutive quarters beginning on the first anniversary of
the Effective Date of this Agreement, each of such payments being contingent
upon continuation of the Agreement up to the date the payment is due.
5.2 Support and Maintenance Fees. In consideration of the support and
maintenance services provided by Millennium pursuant to Section 6, AHP shall pay
to Millennium a service fee of ******** for the first year with such payment due
and payable on the date the Bioinformatics JMT determines that the Millennium
Bioinformatics Technology satisfies the Acceptance Criteria. In the event that
the Millennium Bioinformatics Technology has not met the Acceptance Criteria
within sixty (60) days after AHP notifies Millennium that the Platform has been
installed, the ******** service fee shall be reduced by one twelfth (1/12) for
each month after the expiration of such sixty (60) day period that the
Millennium Bioinformatics Technology has not yet met the Acceptance Criteria.
Thereafter, for the remainder of the initial Term starting on the first
anniversary of the Effective Date of this Agreement, AHP shall pay to Millennium
a service fee of ******** due and payable on the first day of each calendar
quarter unless this Agreement is terminated prior to the applicable payment
date.
5.3 Extension Fees. In the event AHP extends the Term of this Agreement
pursuant to Section 9.1, beyond its initial five (5) year term, AHP shall pay an
annual extension fee which shall be calculated as follows. The first annual
extension fee shall be the ************************************* adjusted by the
cumulative percentage change in the ************************** *****. Subsequent
annual extension fees shall be subject to an annual adjustment equal to the
**********************************
*************************************************************
******************************************************.
5.4 Payment Terms. All payments due under this Agreement shall be made in
U.S. dollars, and, at Millennium's election, (i) shall be mailed to Millennium's
principal office identified above or (ii) shall be made by wire transfer to such
bank account as Millennium may designate from time to time.
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<PAGE> 9
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
6. Support, Training and Consulting
6.1 Support. Millennium shall provide the support services to AHP described
in this Article 6 for the support and maintenance fee set forth in Section 5.2
or Section 5.3 or such other support services as the Parties may find mutually
agreeable. Any revisions to the Millennium Bioinformatics Technology made by
Millennium in connection with such support services shall be treated for all
purposes under this Agreement as Millennium Bioinformatics Technology and all
intellectual property rights therein shall be retained by Millennium.
6.2 Millennium Support and Maintenance Obligations.
Subject to payment of the Support Fee identified in Section 5.2 or Section
5.3, Millennium shall provide the following Support Services for the Millennium
Bioinformatics Technology (but not the Third Party Software):
(a) Problem reporting, tracking and monitoring by electronic mail via
the Internet;
(b) Reasonable telephone support for problem determination, verification
and resolution on a call-back basis during Millennium's normal business hours of
9 a.m. to 5 p.m. Eastern Standard Time; and
(c) Upgrades installed and in productive use at Millennium which
Millennium shall deliver and install in accordance with the instructions of the
Bioinformatics JMT no more frequently than semi-annually;
(d) Training pursuant to Section 6.4;
(e) Diligent work to promptly resolve defects and errors in the
Millennium Bioinformatics Technology or Documentation in accordance with the
following schedule:
ERROR PRIORITY (1) RESPONSE (2) CLOSURE (3)
Emergency (A) ******** ******
Critical (B) ****** *******
Non-Critical (C) ******* ************
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<PAGE> 10
(1) Priority:
-A- Catastrophic product or module failures that do not have a
viable detour or work around available.
-B- Problems that have been substantiated as resulting in
substantial impairment of functionality to users. This includes any
priority A failure for which a viable detour or work around is
available.
-C- All other problems which the user can easily avoid or detour
and for which there is no urgency for a resolution.
(2) Response: Response consists of providing, as appropriate,
one of the following to AHP: an existing correction; a new correction;
a viable detour or work around; a request for more information to
complete analysis of the problems, or a reasonable plan on how the
problem will be corrected. In addition, for Emergency priority errors,
Millennium shall devote full-time attention to developing a response
until Closure.
(3) Closure: Closure consists of installing a final correction
or work around of the problem, including Upgrades and revised or new
Documentation as necessary.
The maintenance and technical support described above shall be provided by
Millennium only for the then current release level of the Millennium
Bioinformatics Technology unless the maintenance and technical support of an
earlier release could be provided by Millennium with substantially the same
effort required by Millennium to maintain and support the current version.
Notwithstanding the previous sentence, while a new Upgrade is being installed
at AHP, Millennium shall continue to support the earlier release until the
Bioinformatics JMT determines that the Upgrade has been successfully installed
at AHP. In addition, in the event that any problem is the result of a
derivative work prepared by AHP, Millennium shall have the right to charge AHP
at Millennium's standard rates for the time spent resolving such problem.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
6.3 AHP Obligations.
AHP agrees:
(a) that the designated contact person(s) identified on Exhibit
C (or such other replacement individual as AHP may designate) shall be the sole
contact for the coordination and receipt of the Support Services set forth in
Section 6.2, which person shall be knowledgable and trained on the Millennium
Bioinformatics Technology;
(b) to maintain for the term of this Agreement, an electronic
mail link-up with Millennium via the Internet and dial-in access for Millennium
to the systems of AHP running the Millennium Bioinformatics Technology to enable
Millennium to test and verify reported problems;
(c) to provide reasonable supporting data to and aid in the
identification and correction of reported problems;
(d) to treat all periodic software Upgrades delivered under this
Agreement as Millennium Bioinformatics Technology and as Confidential
Information under Section 8.
6.4 Training. Millennium shall train AHP employees and/or employees and
agents of AHP's Wholly-Owned Subsidiaries in the use of the Millennium
Bioinformatics Technology during the initial term of this Agreement. In the
first year of this Agreement, such training shall consist of
****************************** ********** (to train reasonably appropriately
skilled persons) training sessions for up to *********** employees and agents
per session. Thereafter, Millennium shall conduct **************** *******
training sessions per year for up to twelve (12) employees and agents per
session. In addition, Millennium shall conduct *** *************** training
sessions for up to *********** employees and agents each for each Upgrade
delivered to AHP. In the event that AHP requires any additional training
sessions to be conducted, if Millennium agrees, such training sessions shall be
provided at Millennium's then standard rates. All training shall be conducted at
Millennium's or AHP's offices as determined by the Bioinformatics JMT to be most
efficient for the Parties.
6.5 Consulting Services. Millennium shall provide AHP and AHP's
Wholly-Owned Subsidiaries with up to ****************** days per year of
consulting services related to the use of the Millennium Bioinformatics
Technology, including services provided in connection with the integration of
the Millennium
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<PAGE> 12
Bioinformatics Technology into the informatics systems of AHP
and of AHP's Wholly-Owned Subsidiaries, including networking to remote sites.
Such consulting services shall be provided at the facilities of AHP or
Millennium or by telephone as mutually agreed to by the Parties.
6.6 Quarterly Update. Millennium shall deliver to AHP a report detailing
developments and enhancements to the Millennium Bioinformatics Technology
developed or under development by Millennium during the prior calendar quarter.
Such report shall be provided to each AHP representative on the Bioinformatics
JMT within thirty (30) days after the end of each calendar quarter during the
term of the Agreement.
7. Project Management.
7.1 The Bioinformatics JMT.
(a) As soon as practicable after the Effective Date, the Parties shall
establish a Bioinformatics JMT, consisting of four (4) representatives
designated by AHP and four (4) representatives designated by Millennium. Each
Party shall make its initial designation of its representatives not later than
thirty (30) days after the Effective Date.
(b) The Bioinformatics JMT shall be responsible for coordinating and
insuring the successful transfer to AHP of the Millennium Bioinformatics
Technology and any subsequent Upgrades delivered to AHP. The Bioinformatics JMT
shall also be responsible for approving the details of the Platform and such
approval must be obtained before the Platform shall be treated as installed by
AHP. Once the Bioinformatics JMT approves the details of the Platform, the
Platform specified in Exhibit A shall be considered modified to include such
details.
7.2 Steering Committee. The Steering Committee shall be responsible for
the definition of global priorities and the approval of the decision of the
Bioinformatics JMT relating to the Acceptance Criteria. The Steering Committee
shall also be responsible for resolving any disputes arising out of this
Agreement not resolved by the Bioinformatics Joint Management Team.
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<PAGE> 13
7.3 Management Committee Decisions.
The Parties agree that the objective of the Management Committees shall
be to resolve all matters unanimously. However, in the absence of unanimity,
the following rules shall apply:
(a) Bioinformatics JMT. The agreement of a Requisite Majority of
the Bioinformatics JMT shall be required for the Bioinformatics JMT to take any
action. Any member of the Bioinformatics JMT who is not present at any meeting
either in person or by designated alternate may appoint another representative
or alternate as his/her proxy on his/her behalf on all matters coming to a vote.
The Bioinformatics JMT may conduct meetings by telephone or video conference. If
the Bioinformatics JMT is unable to reach agreement by a Requisite Majority on
any issue within its purview, such issue shall be referred to the Steering
Committee.
(b) The Steering Committee. The agreement of a Requisite
Majority of the members of the Steering Committee shall be required for the
Steering Committee to take any action. Any member of the Steering Committee who
is not present at any meeting either in person or by designated alternate may
appoint another representative or alternate as his/her proxy on his/her behalf
on all matters coming to a vote. The Steering Committee may conduct meetings by
telephone or video conference. If the Steering Committee is unable to reach a
decision by a Requisite Majority on any issue within its purview, including
without limitation unresolved issues referred to it by the Bioinformatics JMT,
such issue shall be referred to the President of Wyeth-Ayerst Research
Laboratories and the Chief Executive Officer of Millennium (the "Executive
Officers") for resolution.
(c) Decisions by Executive Officers. It is the intention of the
Parties that any issue referred by the Steering Committee to the Executive
Officers shall be resolved by negotiation in good faith as soon as practicable
but no later than thirty (30) days after its referral. Each Executive Officer
shall have the right to engage the services of any number of independent experts
in the field in question (the individual so engaged by each Executive Officer to
be reasonably acceptable to the other Executive Officer in terms of independence
and expertise, and shall be engaged under obligations of confidentiality) to
assist the Executive Officer in making a joint determination in the best
interests of the collaboration, and each Executive Officer shall be obligated to
consider in good faith the analyses and opinions of any such independent experts
engaged by either of them in
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<PAGE> 14
making a determination. Such resolution, if any, of a referred issue shall be
final and binding on the Parties, and the Parties shall instruct the members of
the Steering Committee designated by them to approve such resolution.
8. Confidentiality
8.1 Confidential Information. No Confidential Information disclosed by one
Party to the other during the term of this Agreement shall be used by the
receiving Party except as provided in this Agreement. Such Confidential
Information shall be maintained in confidence by the receiving Party, and shall
not otherwise be disclosed by the receiving Party to any other person, firm, or
agency, governmental or private, without the prior written consent of the
disclosing Party, except to the extent that the Confidential Information:
(a) was known or used by the receiving Party prior to its date of
disclosure to the receiving Party; or
(b) either before or after the date of the disclosure to the receiving
Party is lawfully disclosed to the receiving Party by sources other than the
disclosing Party rightfully in possession of the Confidential Information;
or
(c) either before or after the date of the disclosure to the receiving
Party becomes published or generally known to the public through no fault or
omission on the part of the receiving Party; or
(d) is independently developed by or for the receiving Party without
reference to or reliance upon the Confidential Information; or
(e) is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving Party provides prior
written notice of such disclosure to the other Party and takes reasonable
and lawful actions to avoid and/or minimize the degree of such disclosure.
8.2 Employee Obligations. Each of the Parties agrees to provide
Confidential Information received from the other Party only to such Party's
employees, consultants and advisors, and to
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
the employees, consultants, and advisors of such Party's Wholly-Owned
Subsidiaries, who have a need to know and have an obligation to treat such
information and materials as confidential.
8.3 Term. All obligations of confidentiality imposed under this
Article 8 for all Confidential Information other than any source code for the
Bioinformatics Technology shall expire five (5) years following expiration or
termination of this Agreement, including any renewals thereof.
9. Term and Termination.
9.1 Term. This Agreement shall commence on the Effective Date and shall
expire on the fifth anniversary of the Effective Date (the "Term"), unless
earlier terminated pursuant to Section 9.2. Upon expiration of the initial five
year Term of this Agreement, AHP may elect to renew this Agreement for
successive renewal terms of ************* subject to the payment obligations of
Section 5.3. In order to renew the Agreement, AHP shall notify Millennium of
such intent at least ninety (90) days prior to the end of the initial Term or
any renewal term.
9.2 Termination. This Agreement may be terminated, prior to the expiration
of its term only under the following circumstances:
(a) By AHP, if the Millennium Research Program (as that term is defined
in the CNS Agreement) or the CNS Agreement in its entirety is terminated by AHP;
(b) By Millennium, if Millennium terminates the CNS Agreement;
(c) By either Party in the event the other Party materially breaches a
provision of this Agreement and the breaching Party either (i) fails to cure
such breach within ninety (90) days of the receipt of notice of such breach from
the non-breaching Party or (ii) if such breach is not susceptible to cure within
ninety (90) days of the receipt of notice, the breaching Party is not diligently
pursuing a cure (unless the breach, by its nature, is incurable in which case
the Agreement may be terminated immediately);
(d) By AHP, if AHP has installed the Platform in its facilities and
****************************************** ************************* which
satisfies the Acceptance Criteria
****************************************************************
******************************************************.
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<PAGE> 16
9.3 Breach of License Restrictions. Without limiting what may constitute
a material breach of this Agreement, any intentional or grossly negligent
transfer or distribution of Millennium Bioinformatics Technology or
Documentation by AHP or any of AHP's Wholly-Owned Subsidiaries outside of AHP
and AHP's Wholly-Owned Subsidiaries shall constitute an incurable, material
breach of the Agreement pursuant to which Millennium may immediately terminate
this Agreement.
9.4 Compensation Upon Termination. Except as provided herein, Millennium
shall not be responsible to AHP for compensation, damages or otherwise by reason
of termination of this Agreement at any time. In addition, if the Agreement is
terminated by Millennium pursuant to Section 9.2(b) or 9.3, in addition to other
remedies that may be available to Millennium, AHP shall immediately pay to
Millennium in a lump sum, any license fees payable under Section 5.1 that have
not been paid as of the date of termination.
9.5 Effects of Termination.
(a) Upon expiration or termination of this Agreement for any reason, all
rights, obligations and licenses of Millennium, AHP and AHP's Wholly-Owned
Subsidiaries hereunder shall cease, except as provided in Section 9.5(c) below
and except that AHP's liability for any charges, payments or expenses due to
Millennium which accrued prior to the termination date shall not be extinguished
by termination, and such amounts (if not otherwise due on an earlier date) shall
be immediately due and payable on the termination date.
(b) Upon expiration of this Agreement or upon termination of this
Agreement for breach by AHP, AHP and its Wholly-Owned Subsidiaries shall have no
further right to copy or use the Millennium Bioinformatics Technology or
Documentation, and immediately after such termination or expiration date hereof,
AHP and its Wholly-Owned Subsidiaries shall deliver to Millennium, at AHP's
expense, all originals and copies of the Millennium Bioinformatics Technology
and Documentation, including all translations and partial copies, whether or not
modified or merged into other software or documentation, in the possession or
under the control of AHP or an AHP Wholly-Owned Subsidiary. At Millennium's
request, AHP shall certify in writing to Millennium within ten (10) days
following termination that it has complied with this Section 9.5(b).
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<PAGE> 17
(c) Upon termination of this Agreement for breach by Millennium, AHP and
its Wholly-Owned Subsidiaries shall have the right to continue to use the
Millennium Bioinformatics Technology pursuant to the terms and conditions of
this Agreement for the remainder of the term of the license granted in this
Agreement.
(d) The provisions of Sections 10 (Warranty), 11 (Infringement
Indemnification), 12 (Limitations on Liability), 13 (Compliance with Laws), 14
(General Provisions) and this Section 9 shall survive any termination or
expiration of this Agreement according to their terms.
10. Warranty and Disclaimer of Warranty.
10.1 Warranty. To Millennium's knowledge, the Millennium Bioinformatics
Technology does not infringe, at the time of delivery to AHP, any patents,
trademarks, copyrights, trade secrets or other intellectual property rights of
any third party.
10.2 LIMITATION OF WARRANTY. EXCEPT AS PROVIDED IN SECTION 10.1 THE
MILLENNIUM BIOINFORMATICS TECHNOLOGY, AND DOCUMENTATION ARE BEING PROVIDED "AS
IS" WITHOUT WARRANTY OF ANY KIND AND MILLENNIUM HEREBY DISCLAIMS ALL WARRANTIES,
WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THE MILLENNIUM
BIOINFORMATICS TECHNOLOGY, AND DOCUMENTATION INCLUDING, WITHOUT LIMITATION, ALL
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
11. Infringement Indemnification.
11.1 Except as provided below, Millennium shall defend, indemnify and hold
harmless AHP from and against any damages, liabilities, costs and expenses
(including reasonable attorneys' fees, judgments and settlements) arising out of
any claim that the Millennium Bioinformatics Technology or Documentation
infringes a valid patent or copyright or misappropriates a trade secret of a
third party, provided that (i) AHP shall have promptly provided Millennium
written notice thereof and reasonable cooperation, information, and assistance
in connection therewith, and (ii) Millennium shall have sole control and
authority with respect to the defense, settlement, or compromise thereof. Should
any Millennium Bioinformatics Technology and Documentation become or, in
Millennium's opinion, be likely to become the subject of an injunction
preventing its use as contemplated herein, Millennium may, at its option, (1)
procure for AHP the right to continue using such Millennium Bioinformatics
Technology and Documentation
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at no additional cost to AHP, (2) replace or modify such Millennium
Bioinformatics Technology and Documentation so that it becomes non-infringing at
no additional cost to AHP, provided that such replaced or modified Millennium
Bioinformatics Technology operates in a reasonably equivalent manner. If (1) and
(2) are not reasonably available to Millennium, and AHP is not otherwise able to
procure the right to continue using such Millennium Bioinformatics Technology
and Documentation, Millennium shall, at its election, be released from its
obligations under Section 6 and this Section 11.1 and, if Millennium is released
in such case, AHP shall be released from its obligations under Section
6.3(a)-(c).
11.2 Millennium shall have no liability or obligation to AHP hereunder with
respect to any patent, copyright or trade secret infringement claim by a third
party based upon (i) use of the Millennium Bioinformatics Technology and
Documentation by AHP in combination with devices or products other than as
required by Millennium, (ii) use of the Millennium Bioinformatics Technology, or
Documentation in an application or environment for which such Millennium
Bioinformatics Technology and Documentation were not designed or contemplated,
(iii) modifications, alterations or enhancements of the Millennium
Bioinformatics Technology and Documentation not created by Millennium, (iv) use
of the Millennium Bioinformatics Technology and Documentation by AHP with
elements of the Platform which AHP failed to license from third parties, or (v)
any claims of infringement of a patent, copyright or trade secret in which AHP
or any Affiliate of AHP has an ownership interest. AHP shall indemnify and hold
Millennium harmless from all costs, damages and expenses (including reasonable
attorneys' fees) arising from any claim enumerated in clauses (i) through (iv)
above.
11.3 In the event that an infringement claim is brought against AHP which
AHP in its good faith business judgment believes will result in an injunction
preventing AHP from using the Millennium Bioinformatics Technology, AHP shall
have the right, but not the obligation, to terminate this Agreement on ninety
(90) days notice to Millennium unless within such ninety (90) days period
Millennium can obtain rights for AHP to continue using the Millennium
Bioinformatics Technology at no additional cost to AHP or can modify the
Millennium Bioinformatics Technology so that it no longer infringes at no
additional cost of AHP provided such replaced or modified Millennium
Bioinformatics Technology operates in a reasonably equivalent manner. In the
event of any termination pursuant to this Section 11.3, AHP shall not be
entitled to a refund of any payments made prior to the date of termination.
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11.4 The foregoing states the entire liability of Millennium with respect
to infringement of patents, copyrights and trade secrets by the Millennium
Bioinformatics Technology and Documentation or any part thereof or by their
operation.
12. Limitations on Liability.
12.1 EXCEPT AS PROVIDED IN SECTION 11, MILLENNIUM'S LIABILITY FOR DAMAGES
TO AHP FOR ANY CAUSE WHATSOEVER, REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION,
SHALL NOT EXCEED THE AGGREGATE LICENSE FEES, PAID BY AHP FOR THE MILLENNIUM
BIOINFORMATICS TECHNOLOGY UNDER THIS AGREEMENT. MILLENNIUM SHALL IN NO EVENT BE
LIABLE FOR ANY LOSS OF DATA, PROFITS OR USE OF THE MILLENNIUM BIOINFORMATICS
TECHNOLOGY, OR FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE MILLENNIUM
BIOINFORMATICS TECHNOLOGY AND/OR DOCUMENTATION.
12.2 AHP will immediately inform Millennium as soon as AHP becomes aware of
any threatened or actual liability claim by a third party relating to the
Millennium Bioinformatics Technology.
13. Compliance with Laws.
13.1 Export. AHP shall not export, directly or indirectly, Millennium
Bioinformatics Technology or Documentation, or other information or materials
provided by Millennium hereunder, to any country for which the United States or
any other relevant jurisdiction requires any export license or other
governmental approval at the time of export without first obtaining such license
or approval. It shall be AHP's responsibility to comply with the latest United
States export regulations, and AHP shall defend and indemnify Millennium from
and against any damages, fines, penalties, assessments, liabilities, costs and
expenses (including reasonable attorneys' fees and court costs) arising out of
any claim that Millennium Bioinformatics Technology or Documentation, or other
information or materials provided by Millennium hereunder were exported or
otherwise shipped or transported in violation of applicable laws and
regulations.
13.2 Compliance with Laws of Other Jurisdictions. AHP shall comply with all
laws, legislation, rules, regulations, and governmental requirements, with
respect to the Millennium Bioinformatics Technology and Documentation, and the
performance by AHP of its obligations hereunder, existing in any jurisdiction in
which AHP uses, directly or indirectly, the Millennium Bioinformatics Technology
or Documentation. In the event that
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this Agreement is required to be registered with any governmental authority, AHP
shall cause such registration to be made and shall bear any expense or tax
payable in respect thereof.
14. General Provisions.
14.1 Notices. All notices, instructions and other communications hereunder
or in connection herewith shall be in writing and shall be (i) delivered
personally, (ii) sent by registered or certified mail, return receipt requested,
postage prepaid, (iii) sent via a reputable overnight courier service, or (iv)
sent by facsimile transmission, in each case to an address set forth below. Any
such notice, instruction or communication shall be deemed to have been delivered
upon receipt if delivered by hand, five business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, one
business day after it is sent via a reputable overnight courier service, or when
transmitted with electronic confirmation of receipt, if transmitted by facsimile
(if such transmission is on a business day; otherwise, on the next business day
following such transmission).
Notices to Millennium shall be addressed to:
Millennium Pharmaceuticals, Inc.
640 Memorial Drive
Cambridge, Massachusetts 02139-4815
Attention: Chief Executive Officer
Facsimile No.: (617) 621-0264
with a copy to:
Attention: Legal Department
Facsimile No.: (617) 374-0074
Notices to AHP shall be addressed to:
Wyeth-Ayerst Research
555 East Lancaster Pike
St. Davids, PA 19087
Attention: Office of the Senior Vice President
Global Business Development
Facsimile No.: (610) 688-9498
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<PAGE> 21
with a copy to:
American Home Products Corporation
Five Giralda Farms
Madison, NJ 07940
Attention: Associate General Counsel
Facsimile No.: (201) 660-7155
Either Party may change its address by giving notice to the other Party in the
manner herein provided.
14.2 Force Majeure. No failure or omission by the Parties hereto in the
performance of any obligation of this Agreement shall be deemed a breach of this
Agreement or create any liability if the same shall arise from any cause or
causes beyond the control of the Parties, including, but not limited to, the
following: acts of God; acts or omissions of any government; any rules,
regulations or orders issued by any governmental authority or by any officer,
department, agency or instrumentality thereof; fire; storm; flood; earthquake;
accident; war; rebellion; insurrection; riot; and invasion and provided that
such failure or omission resulting from one of the above causes is cured as soon
as is practicable after the occurrence of one or more of the above- mentioned
causes.
14.3 No Waiver. The waiver of a breach hereunder may be effected only by a
writing signed by the waiving Party and shall not constitute a waiver of any
other breach.
14.4 Independent Contractors. It is understood and agreed that the
relationship between the Parties hereunder is that of independent contractors
and that nothing in this Agreement shall be construed as authorization for
either AHP or Millennium to act as agent for the other. Members of the
Bioinformatics JMT and the Steering Committee shall be, and shall remain,
employees of Millennium or AHP, as the case may be. Neither Party shall incur
any liability for any act or failure to act by members of the Bioinformatics JMT
and the Steering Committee who are employees of the other Party.
14.5 Governing Law. This Agreement shall be construed and the respective
rights of the Parties hereto determined according to the substantive laws of the
State of Delaware notwithstanding the provisions governing conflict of laws
under such Delaware law to the contrary, except matters of intellectual property
law which shall be determined in accordance with the relevant national
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<PAGE> 22
intellectual property laws of the intellectual property in question.
14.6 Section 365(n) of the Bankruptcy Code. All rights and licenses granted
under or pursuant to any Section of this Agreement are, and shall otherwise be,
deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of
rights to "intellectual property" as defined under Section 101(35A) of the
Bankruptcy Code. The Parties shall retain and may fully exercise all of their
respective rights and elections under the Bankruptcy Code. Upon the bankruptcy
of either Party, the non-bankrupt Party shall further be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property, and such, if not already in its possession, shall be promptly
delivered to the non-bankrupt Party, provided, however, that in the event that
Millennium is the bankrupt Party, Millennium shall have the right to continue to
fulfill its obligations under Section 6.2 until the end of the Term in order to
prevent any source code from being released from escrow or otherwise being
delivered to AHP and for so long as Millennium continues to fulfill its
obligations under Sections 6.2, 6.4 and 6.5, AHP shall not be entitled to
request the release of the source code from escrow.
14.7 Amendments. This Agreement and the attached Exhibits constitute the
entire agreement relating to the Millennium Bioinformatics Technology between
the Parties and supersedes all previous arrangements relating to the Millennium
Bioinformatics Technology whether written or oral. Any amendment or modification
to this Agreement shall be made in writing signed by both Parties.
14.8 Headings. The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
14.9 Assignment. Neither Party may assign this Agreement in whole or in
part without the consent of the other, except to a Wholly-Owned Subsidiary, or
except if such assignment occurs in connection with the sale or transfer of all
or substantially all of the business and assets of Millennium or AHP to which
the subject matter of this Agreement pertains.
14.10 Consents Not Unreasonably Withheld. Whenever provision is made in
this Agreement for either Party to secure the consent or approval of the other,
that consent or approval shall not unreasonably be withheld, and whenever in
this Agreement
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<PAGE> 23
provisions are made for one Party to object to or disapprove a matter, such
objection or disapproval shall not unreasonably be exercised.
14.11 No Strict Construction. This Agreement has been prepared jointly
and shall not be strictly construed against either Party.
14.12 Severance of Clauses. Each Party agrees that, should any
provision of this Agreement be determined by a court of competent jurisdiction
to violate or contravene any applicable law or policy, such provision will be
severed or modified by the court to the extent necessary to comply with the
applicable law or policy, and such modified provision and the remainder of the
provisions hereof will continue in full force and effect.
14.13 Consents. All necessary consents, approvals and authorizations of
all government authorities and other persons required to be obtained by such
party in connection with execution, delivery and performance of this Agreement
have been and shall be obtained.
14.14 No Conflict. Notwithstanding anything to the contrary in this
Agreement, the execution and delivery of this Agreement and the performance of
such Party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or regulations and (b) do not and shall not
conflict with, violate or breach or constitute a default or require any consent
under, any contractual obligation of such Party.
14.15 Knowledge of Pending or Threatened Litigation. Each Party
represents and warrants to the other that it is not aware of any pending or
threatened litigation (and has not received any communication) which alleges
that such Party's activities related to bioinformatics software to date have
violated, or by conducting its business as currently proposed to be conducted
would violate, any of the intellectual property rights of any other person. To
the best of each Party's knowledge, there is no material unauthorized use,
infringement or misappropriation of any of the intellectual property rights
licensed hereunder.
14.16 Employee Obligations. Each Party represents and warrants that all
of its employees, officers, and consultants have executed agreements or have
existing obligations under law requiring, in the case of employees and officers,
assignment to such Party of all inventions made during the course of and as the
result of their association with such Party and obligating the
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<PAGE> 24
individual to maintain as confidential such Party's Confidential Information
as well as confidential information of a third party which such Party may
receive, to the extent required to support such Party's obligations under this
Agreement.
14.17 Full Disclosure. Each Party has disclosed to the other in good
faith, all material information such Party believes is relevant to the subject
matter of this Agreement, and to such Party's ability to observe and perform its
obligations hereunder.
14.18 Compliance with Applicable Laws and Regulations. Each Party
represents and warrants to the other Party that it will comply with all
applicable laws and regulations in the delivery or use of the Millennium
Bioinformatics Technology hereunder.
14.19 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of such together
shall constitute one and the same instrument.
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<PAGE> 25
IN WITNESS WHEREOF, this Agreement is executed this ___ day of July,
1996, to be effective as of the Effective Date.
WYETH-AYERST RESEARCH DIVISION MILLENNIUM PHARMACEUTICALS, INC.
OF AMERICAN HOME PRODUCTS
CORPORATION
- ---------------------------- -------------------------------
Steven H. Holtzman
Chief Business Officer
- ---------------------------- -------------------------------
Title Title
- ---------------------------- -------------------------------
Date Date
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<PAGE> 26
EXHIBIT A
MILLENNIUM BIOINFORMATICS TECHNOLOGY,
PLATFORM AND THIRD PARTY SOFTWARE
Millennium Bioinformatics Technology:
CONFIDENTIAL MATERIALS OMITTED
AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
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<PAGE> 27
NON-MILLENIUM SOFTWARE OBTAINED FROM MILLENIUM
CONFIDENTIAL MATERIALS OMITTED
AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION
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<PAGE> 28
EXHIBIT B
SOURCE CODE ESCROW AGREEMENT
This Agreement (the "Agreement") is made as of July, 1996 among
Millennium Pharmaceuticals, Inc., a Delaware corporation with its principal
offices at 640 Memorial Drive, Cambridge, Massachusetts 02139-4815
("Millennium"), American Home Products Corporation, a Delaware corporation
acting through its Wyeth-Ayerst Research Division, with its principal offices
at 555 East Lancaster Pike, St. Davids, PA 19087 ("AHP"), and Data Securities
International, Inc., a ____________ corporation with its principal offices at
_____________________ ("Escrow Agent").
1. Background. Millennium has licensed or will license the Licensed
Program(s) (as defined below) to AHP pursuant to a written software license
agreement (a "License Agreement"). Millennium has agreed to place in escrow the
Source Code (as defined below) for the Licensed Program, to be released to AHP
upon the occurrence of certain events as hereinafter described.
2. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) Licensed Program. The computer program(s), consisting of a series
of instructions or statements in machine readable, object code form only,
licensed to AHP by Millennium pursuant to a License Agreement.
(b) Source Code. The version of the source code used by Millennium to
generate the Licensed Program, contained on one or more magnetic tapes or other
media, together with a print-out of the source code listing.
(c) Documentation. Explanatory information, whether in
machine-readable form or otherwise, which would assist a software engineer in
understanding the structure, purpose and operation of the Source Code.
(d) Information. The Source Code and the Documentation, collectively.
(e) Update Event. The delivery to AHP of any new release of the
Licensed Program or the expiration of twelve months since the most recent Update
Event if the Source Code has been modified in the interim.
<PAGE> 29
(f) Update Information. All information, including without limitation
additional and/or replacement Source Code and Documentation, necessary to bring
the Information in escrow prior to an Update Event into compliance with the
definition of Information contained in Section 2(d) after the occurrence of such
Update Event. The term "Information" shall be deemed to include any such Update
Information for the purposes of this Agreement.
3. Appointment of Escrow Agent. Escrow Agent is hereby appointed and
accepts appointment to act as escrow agent hereunder.
4. Fees of Escrow Agent.
(a) All fees of Escrow Agent in connection with its duties hereunder
shall be paid by Millennium.
(b) Escrow Agent's fees for the initial year of service are due in
full within sixty (60) days after the execution of this Agreement. Annual
renewal fees will be due in full upon the receipt of invoice unless otherwise
specified by the invoice. Late payments are subject to interest at the rate of
one and one-half percent per month (18% per annum) from the due date.
(c) Escrow Agent's fees will be as specified in its standard fee
schedule as modified from time to time. Escrow Agent shall notify Millennium at
least ninety (90) days prior to any increase in its fees. For any service not
listed on its standard fee schedule, Escrow Agent shall provide a price
quotation prior to rendering such service.
5. Representations and Warranties. Millennium represents and warrants to
AHP as follows:
(a) Millennium has the right to enter into and perform this
Agreement, to grant to AHP the license granted pursuant to Section 10(a) of this
Agreement and to deposit the Information under the terms of this Agreement.
(b) The Information initially deposited hereunder is reasonably
sufficient to enable a software engineer, skilled in the art of computer
programming and without recourse to collateral sources of assistance other than
commercially available computer programs, to independently compile the Licensed
Program and to modify the Licensed Program.
EXCEPT AS STATED ABOVE, MILLENNIUM DISCLAIMS ALL WARRANTIES, WHETHER
EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE INFORMATION,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS
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<PAGE> 30
FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL MILLENNIUM BE LIABLE FOR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF
PROFITS, LOSS OF DATA OR LOSS OF USE DAMAGES, ARISING OUT OF OR WITH RESPECT TO
THIS AGREEMENT OR THE INFORMATION.
6. Deposit of Information into Escrow. Within thirty (30) days after the
Bioinformatics JMT (created in accordance with the License Agreement) determines
that the Information has satisfied the Acceptance Criteria set forth in the
License Agreement, Millennium shall deliver to Escrow Agent one copy of the
Information in one or more sealed packages (a "Deposit"), each of which shall be
separately labeled and accompanied by a separate written list of its contents in
the form of Exhibit B-2 attached hereto (an "Exhibit B-2"). Thereafter, within
thirty (30) days after the occurrence of any Update Event, Millennium shall
deliver one copy of the Update Information in a sealed package to Escrow Agent
accompanied by an Exhibit B-2. Each Exhibit B-2 shall be signed by Millennium
prior to submission to Escrow Agent. Upon the delivery of any Update Information
to Escrow Agent, Millennium may instruct Escrow Agent to return to it any
previously delivered Information (other than the most recent and one previous
versions of the Information) which is no longer necessary to satisfy
Millennium's obligations under this Agreement.
7. Acceptance and Storage of Information.
(a) Upon receipt of any Information hereunder, Escrow Agent shall
visually match the accompanying Exhibit B-2 to the labels on the Deposit. Escrow
Agent shall not be responsible for verifying the contents of the Deposit or
validating the accuracy of Millennium's labeling of the Deposit. If Escrow Agent
determines that there is a discrepancy between the Exhibit B-2 and the labels on
the Deposit, Escrow Agent shall notify Millennium within five (5) days after
receipt thereof, and Millennium shall promptly correct such discrepancy.
Acceptance of the Information shall occur when Escrow Agent determines that the
Exhibit B-2 matches the labels on the Deposit. Upon acceptance, Escrow Agent
shall sign the Exhibit B-2 and mail copies thereof to Millennium and AHP.
(b) After acceptance, Escrow Agent shall store and maintain the
Information in such an environment or facility as Escrow Agent determines, in
its discretion, is suitable for the safekeeping of the Information. Escrow Agent
shall not permit any person to have access to the Information other than in
accordance with this Agreement, and shall maintain security measures, in
accordance with reasonable professional standards, to prevent unauthorized
access to the Information. Escrow Agent shall not
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<PAGE> 31
release the Information except in accordance with the provisions of this
Agreement.
8. Inspection of Information. AHP shall have the right at its sole
expense from time to time during the term of this Agreement, upon reasonable
notice to Escrow Agent and Millennium, to designate a representative to inspect,
test and review the Information in the presence of a representative of Escrow
Agent and a representative of Millennium, if Millennium so chooses, during
normal business hours for the purpose of determining the completeness and
adequacy of the Information. Such representative shall be an independent
accounting or consulting firm, not employed or regularly retained by or
affiliated with AHP, as may be reasonably acceptable to Millennium. As a
condition to such inspection, such representative shall execute a
confidentiality agreement in form and substance reasonably acceptable to
Millennium.
9. Release and Delivery of Information.
(a) AHP may request in writing that Escrow Agent deliver the
Information to AHP upon the occurrence of any of the following events (a
"Triggering Event"):
(i) If Millennium materially breaches any Section of the License
Agreement between Millennium and AHP other than Section 8 or intentionally or
with gross negligence discloses Confidential Information of AHP and (A) such
breach remains uncured for ninety (90) days after delivery of written notice
thereof to Millennium or (B) if such breach is not susceptible to cure within
ninety (90) days of the receipt of notice, Millennium is not diligently pursuing
a cure; or
(ii) If Millennium ceases to offer support and maintenance
services for the Licensed Program and such cessation continues for ninety (90)
days after delivery of written notice thereof to Millennium, unless Millennium
shall have made arrangements for the continuation of support and maintenance
services for the Licensed Program by another qualified party; or
(iii) Any failure by Millennium to deliver to Escrow Agent any
required Update Information within ninety (90) days after an Update Event, which
failure remains uncured for thirty (30) days after delivery of written notice
thereof to Millennium.
(b) Upon receipt by Escrow Agent of notice from AHP of a Triggering
Event together with the applicable release request fee, Escrow Agent shall
promptly deliver a copy of such notice to Millennium. Escrow Agent shall, ten
(10) days after delivery of
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such notice to Millennium, deliver the Information to AHP, unless within such
ten (10) day period Millennium shall have delivered to Escrow Agent and AHP a
written denial that such Triggering Event has occurred. If Escrow Agent receives
such denial within such ten (10) day period, AHP's entitlement to receive the
Information under this Agreement shall be resolved by arbitration pursuant to
Section 15 of this Agreement, and Escrow Agent shall retain possession of the
Information pending the final determination by the Arbitration Panel, which
determination may be relied upon by Escrow Agent without further inquiry.
10. Possession, Use and Protection of the Information.
(a) If the Information is released to AHP pursuant to this Agreement,
Millennium hereby grants to AHP and its Wholly-Owned Subsidiaries a
non-exclusive, royalty-free, fully paid-up, perpetual, non-assignable license to
possess and use the Information solely for the internal support and maintenance
of the Licensed Program. Except as set forth in Section 10(b), AHP shall not
disclose, market, license, sell, distribute, sublicense or in any other manner
make the Information available to third parties. AHP shall not under any
circumstances copy, duplicate or otherwise reproduce any Information except as
required for the internal support and maintenance of the Licensed Program.
(b) AHP acknowledges and agrees that title to the Information shall
remain with Millennium at all times and that the Information shall remain
confidential and proprietary to Millennium. If the Information is released to
AHP pursuant to this Agreement, the Information shall be received and held by
AHP in confidence until it falls into the public domain without breach of this
Agreement by AHP. AHP shall limit use of and access to the Information to such
of its employees (or third parties reasonably acceptable to Millennium) as are
directly involved in the internal support and maintenance of the Licensed
Program and who are bound by written agreement to preserve the confidentiality
thereof. AHP shall promptly report to Millennium any actual or suspected
violation of this Section 10 and shall take all reasonable further steps
requested by Millennium to prevent or remedy any such violation.
11. Termination.
(a) This Agreement shall continue in effect with respect to AHP until
the termination or expiration of the License Agreement between Millennium and
AHP unless sooner terminated by the written agreement of Millennium and AHP or
for non-payment of Escrow Agent's fees pursuant to Section 11(b) below.
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<PAGE> 33
(b) This Agreement shall have an initial term of one year, commencing
on the date set forth above in the first sentence of this Agreement (the
"Effective Date"). This Agreement shall automatically be renewed for additional
one-year periods upon receipt by Escrow Agent of the specified renewal fees. The
initial "Renewal Date" of this Agreement is one year from the Effective Date and
in succeeding years is one year from the most recent Renewal Date. In the event
that the renewal fees are not received within thirty (30) days prior to the
Renewal Date, Escrow Agent shall notify Millennium and AHP that this Agreement
will expire on the Renewal Date unless the renewal fees are paid. If Escrow
Agent does not receive the renewal fees by the Renewal Date, this Agreement
shall expire on the Renewal Date without further notice and without liability of
Escrow Agent to the parties to this Agreement.
(c) If this Agreement expires or is otherwise terminated with respect
to AHP, all duties and obligations of Escrow Agent to AHP and Millennium shall
terminate. If Millennium requests the return of the Information upon expiration
or termination of this Agreement, Escrow Agent shall return the Information to
Millennium only after Escrow Agent's outstanding invoices and deposit return
fees have been paid. If such fee(s) are not received by Escrow Agent within
thirty (30) days after expiration or termination of this Agreement Escrow Agent
shall, at its option, destroy or return the Information to Millennium.
12. Responsibilities and Liabilities of Escrow Agent. Escrow Agent shall
not be liable under this Agreement with respect to the condition or contents of
the Information or for any action taken or omitted in compliance with this
Agreement in good faith and in the exercise of Escrow Agent's own good judgment
or in reliance on advice of Escrow Agent's counsel or for any other cause unless
a court of competent jurisdiction finds that Escrow Agent's conduct was (i)
willful misconduct, (ii) fraudulent, (iii) grossly negligent, (iv) in bad faith
or (v) in disregard of or contrary to the terms of this Agreement. Escrow Agent
shall be obligated only for the performance of such duties as are specifically
set forth in this Agreement and may rely and shall be protected in relying on or
refraining from acting on any order or instrument reasonably and actually
believed by it to be genuine and to have been signed or presented by the proper
party or parties. Escrow Agent shall not be responsible for or be required to
enforce any of the terms or conditions of any agreement between Millennium and
AHP. Escrow Agent shall not be responsible or liable in any manner whatsoever
for the performance by Millennium or AHP of their respective obligations under
this Agreement.
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<PAGE> 34
13. Resignation and Discharge; Successor Escrow Agent.
(a) Escrow Agent may resign at any time, effective on such date
specified in a written notice of resignation delivered to Millennium and AHP at
least ninety (90) days prior to such effective date. Escrow Agent may be
discharged at any time, with or without cause, by written agreement of
Millennium and AHP, effective upon receipt of written notice of such discharge
from Millennium. The resignation or discharge of Escrow Agent shall not affect
the right of Escrow Agent to be paid for its services through the date of
resignation or discharge.
(b) In the event of the resignation or discharge of Escrow Agent,
Millennium shall appoint a successor Escrow Agent who shall be reasonably
acceptable to AHP, and such successor Escrow Agent shall assume the rights,
powers and responsibilities of Escrow Agent hereunder upon its written agreement
to act as Escrow Agent hereunder and to become a party hereto.
(c) Escrow Agent's obligations hereunder shall terminate upon the
effective date of its resignation or discharge, except that it shall continue to
hold the Information in accordance with this Agreement until a successor Escrow
Agent is appointed, at which time Escrow Agent shall deliver the Information to
such successor Escrow Agent. If no successor Escrow Agent is appointed within
thirty (30) days after the effective date of such resignation or discharge,
Escrow Agent shall deliver the Information to the Arbitration Panel pursuant to
Section 15, shall give written notice of the same to Millennium and AHP and
shall have no further responsibility with respect thereto.
14. Indemnification. Millennium and AHP, jointly and severally, agree to
indemnify and hold Escrow Agent harmless against any loss, liability or expense
incurred by Escrow Agent as a result of any action taken or omitted in
compliance with this Agreement in good faith and in the exercise of Escrow
Agent's own good judgment or in reliance on advice of Escrow Agent's counsel or
for any other cause unless a court of competent jurisdiction finds that Escrow
Agent's conduct was (i) willful misconduct, (ii) fraudulent, (iii) grossly
negligent, (iv) in bad faith or (v) in disregard of or contrary to the terms of
this Agreement.
15. Arbitration. Any dispute regarding the occurrence or non-occurrence
of a Triggering Event shall be submitted to arbitration before a panel of
arbitrators selected in accordance with the commercial rules of the American
Arbitration Association (the "Arbitration Panel"). If the Arbitration Panel
determines that a Triggering Event has occurred with respect to AHP, Escrow
Agent shall immediately release the Information to AHP, provided that if it is
subsequently determined pursuant to a final adjudication of the dispute that a
Triggering Event has not occurred, AHP shall immediately cease use of the
Information, shall return the Information to Escrow Agent, and shall destroy all
other copies of the Information, or any part thereof, in its possession. If the
Arbitration Panel determines that a Triggering Event has not occurred, Escrow
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<PAGE> 35
Agent shall continue to hold the Information in accordance with this Agreement.
The proceedings of the Arbitration Panel shall be held, and any determination of
the Arbitration Panel shall be deemed to have been made, in Boston,
Massachusetts. All questions of law shall be decided in accordance with the laws
of the Commonwealth of Massachusetts.
16. Notices. All notices required or permitted hereunder shall be given
in writing and shall be deemed delivered upon (i) delivery by messenger or
overnight courier service or (ii) three (3) days following the date of mailing
by registered or certified mail, postage prepaid, addressed to Millennium, AHP
or Escrow Agent at the applicable address set forth in Exhibit B-1 attached
hereto. Any party may change its address by ten (10) days' written notice given
to the other party in the manner set forth in this Section 16.
17. Governing Law. This Agreement is made in and shall be construed in
accordance with the laws of the Commonwealth of Massachusetts.
18. No Waiver. No delay or omission by any party in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by a party on any one occasion shall be effective only
in that instance and shall not be construed as a bar or waiver of any right on
any other occasion.
19. Severability. In the event that any provision of this Agreement
shall be invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
20. Successors and Assigns. Neither Millennium nor AHP may assign this
Agreement without the written consent of the other, except that no such consent
shall be required for an assignment in connection with the sale of all or
substantially all of a party's business by merger, sale of stock, sale of assets
or otherwise. Escrow Agent may not assign this Agreement without the written
consent of Millennium and AHP. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the
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<PAGE> 36
parties, their respective executors, administrators, successors and assigns.
21. Amendment. This Agreement may be amended or modified only by a
written instrument executed by Escrow Agent, Millennium and AHP.
22. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
but one agreement binding on the parties.
23. Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as a
sealed instrument as of the day and year set forth above.
MILLENNIUM PHARMACEUTICALS, INC. AMERICAN HOME PRODUCTS
CORPORATION
By:____________________________ By:_________________________
Title:_________________________ Title:_______________________
DATA SECURITIES INTERNATIONAL, INC.
By:________________________________
Title:_____________________________
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Exhibit B-1
DESIGNATED REPRESENTATIVES
Notices to Millennium Invoices should
should be addressed to: be addressed to:
Address: _________________ _______________________
_________________ _______________________
_________________ _______________________
Designated
Representative: _________________ _______________________
Telephone: _________________ _______________________
Notices to AHP
should be addressed to:
Address: _________________
_________________
_________________
Designated
Representative: _________________ _______________________
Telephone: _________________ _______________________
Deposits and notices to Escrow Invoice inquiries and
Agent should be addressed to: payments to Escrow Agent
should be addressed to:
Escrow Agent: __________________ _______________________
Address: __________________ _______________________
__________________ _______________________
__________________ _______________________
Designated
Representative: __________________
Telephone: __________________
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<PAGE> 38
Exhibit B-2
DESCRIPTION OF DEPOSIT MATERIALS
Deposit Account Number: ___________________________
Account Name: _____________________________________
Exhibit B-2 Number: _________________________________
Millennium, pursuant to a Source Code Escrow Agreement dated ______________,
19___ among Millennium, AHP and Escrow Agent (as defined therein), hereby
deposits the below described materials into the above-referenced Deposit
Account. The Deposit type is: (check space that applies)
____ Initial ____ Supplemental ____ Replacement
Deposit Deposit Deposit
If Replacement then destroy Deposit _____ or return Deposit _____
If no Deposit type has been checked, the materials will be deemed to be an
Initial or Supplemental Deposit.
DEPOSIT MATERIALS
Name:__________________________________ Version:________________________
Date:__________________________________ Compiler:_______________________
Application:_____________________________________________________________
Utilities needed:________________________________________________________
Special operating instructions:__________________________________________
_________________________________________________________________________
_________________________________________________________________________
Item Description Media Quantity
- ---------------- ----- --------
Millennium certifies that the Accepted:
above described materials
have been delivered/sent to
Escrow Agent
By:___________________________________ By:___________________________________
Name:_________________________________ Name:_________________________________
Title:________________________________ Title:________________________________
For:__________________________________ For:__________________________________
Date:_________________________________ Date:_________________________________
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<PAGE> 39
EXHIBIT C
Designated Contacts
Primary Contact: ____________________
Phone number: _________________
E-Mail address:_________________
Secondary Contact: ____________________
Phone number: _________________
E-Mail address:_________________
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<PAGE> 1
Exhibit 10.3
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
TRANSCRIPTION PROFILING TECHNOLOGY
ACCESS AND LICENSE AGREEMENT
By and Between
American Home Products Corporation
and
Millennium Pharmaceuticals, Inc.
<PAGE> 2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Introduction ................................................................ 1
Article I - Definitions ..................................................... 1
Section 1.1. Additional MTPT ........................................... 1
Section 1.2. Affiliate ................................................. 1
Section 1.3. AHP Central Focus Area .................................... 2
Section 1.4. AHP Chemical Library ...................................... 2
Section 1.5. AHP Chemical Library Patent Right ......................... 2
Section 1.6. AHP Product ............................................... 2
Section 1.7. AHP Secondary Focus Area .................................. 3
Section 1.8. Automated DNA Sequencing Technology ....................... 3
Section 1.9. Breaching Party ........................................... 3
Section 1.10. Chemical Lead ............................................. 3
Section 1.11. Chemical Similarity Search ................................ 3
Section 1.12. Chemical Structures ....................................... 3
Section 1.13. CNS ....................................................... 4
Section 1.14. CNS Agreement ............................................. 4
Section 1.15. Compound .................................................. 4
Section 1.16. Confidential Information .................................. 4
Section 1.17. Consideration ............................................. 4
Section 1.18. Delivered Agreements ...................................... 4
Section 1.19. Designated Compound ....................................... 4
Section 1.20. Distribution .............................................. 5
Section 1.21. Exclusion ................................................. 5
Section 1.22. Executive Officer ......................................... 5
Section 1.23. IND-Track Candidate ....................................... 5
Section 1.24. Indemnified Party ......................................... 5
Section 1.25. Indemnifying Party ........................................ 5
Section 1.26. Initial Analog ............................................ 5
Section 1.27. Invalidity Claim .......................................... 5
Section 1.28. Know-How .................................................. 5
Section 1.29. Legal Exclusivity ......................................... 5
Section 1.30. Management Committee(s) ................................... 6
Section 1.31. Major Market Country ...................................... 6
Section 1.32. Marketing Collaboration ................................... 6
Section 1.33. Marketing Exclusivity ..................................... 6
Section 1.34. Millennium Product ........................................ 6
Section 1.35. Millennium **** Technology ................................ 6
Section 1.36. MTPT ...................................................... 6
Section 1.37. MTPT Patent Rights and Copyrights ......................... 7
Section 1.38. MTPT Software ............................................. 7
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
Section 1.39. Named Biological Results .................................. 7
Section 1.40. Net Sales ................................................. 7
Section 1.41. Non-Breaching Party ....................................... 9
Section 1.42. Other Indications ......................................... 9
Section 1.43. Paid Party ................................................ 9
Section 1.44. Party ..................................................... 9
Section 1.45. Patent Right(s) ........................................... 9
Section 1.46. Primary Screen Results .................................... 9
Section 1.47. Product ................................................... 10
Section 1.48. Records ................................................... 10
Section 1.49. Request ................................................... 10
Section 1.50. Requested Support Materials ............................... 10
Section 1.51. Requested MTPT ............................................ 10
Section 1.52. Requisite Majority ........................................ 10
Section 1.53. Responsible Party ......................................... 10
Section 1.54. Sample .................................................... 10
Section 1.55. Screen .................................................... 10
Section 1.56. Selected Analog ........................................... 10
Section 1.57. Selling Party ............................................. 10
Section 1.58. Steering Committee ........................................ 10
Section 1.59. Sublicensee ............................................... 10
Section 1.60. Substantive Improvement ................................... 10
Section 1.61. Substantive Improvement Consideration ..................... 11
Section 1.62. Successful Transfer ....................................... 11
Section 1.63. Territory ................................................. 11
Section 1.64. Total Deliveries .......................................... 11
Section 1.65. Transferred Technology Consideration ...................... 11
Section 1.66. TPT JMT ................................................... 11
Section 1.67. Transcription Profiling Technology 11
Section 1.68. Type A Diseases ........................................... 11
Section 1.69. Type B Diseases ........................................... 11
Section 1.70. Unsuccessful Transfer ..................................... 11
Section 1.71. Up-Front Access Consideration ............................. 11
Section 1.72. Valid Claims .............................................. 11
Section 1.73. Wholly-Owned Subsidiary ................................... 11
Article II - MTPT Access and Transfer ....................................... 12
Section 2.1. Technology Disclosure and Update .......................... 12
Section 2.2. Request for MTPT .......................................... 12
Section 2.3. Transfer Diligence ........................................ 12
Section 2.4. Successful Transfer ....................................... 13
Section 2.5. Automated DNA Sequencing Technology ....................... 14
Section 2.6 Termination of Transfer Diligence ......................... 14
Section 2.7 MTPT Upgrades ............................................. 14
Section 2.8 Support ................................................... 15
Section 2.9 Termination of Transfer Obligations ....................... 15
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
Article III - Access to the AHP Chemical Library ............................ 15
Section 3.1 Definitions ............................................... 15
Section 3.2 Remuneration for MTPT Transfer ............................ 16
Section 3.3 Requested Support Materials ............................... 17
Section 3.4 Termination of Obligation to Deliver
Requested Support Materials ............................... 18
Section 3.5 Destruction of Screens and Support
Materials ................................................. 18
Article IV - Management ..................................................... 19
Section 4.1 The TPT JMT ............................................... 19
Section 4.2 The Steering Committee .................................... 19
Section 4.3 Management Committee Decisions ............................ 19
Article V - Confidentiality ................................................. 20
Section 5.1 Confidential Information .................................. 20
Section 5.2 Employee Obligations ...................................... 21
Section 5.3 Term ...................................................... 21
Article VI - Grant of Rights to AHP ......................................... 21
Section 6.1 License Regarding Research and
Development of AHP Products................................ 21
Section 6.2 License Regarding Sale of AHP Products .................... 22
Section 6.3 Covenant Not to Sue ....................................... 22
Section 6.4 Core Field ................................................ 22
Section 6.5 Software Licenses ......................................... 22
Section 6.6 Third Party Rights ........................................ 23
Article VII - Grant of Rights to Millennium ................................. 23
Section 7.1 Research and Development of Millennium
Products .................................................. 23
Section 7.2 Exclusive License Regarding Sale of
Millennium Products ....................................... 23
Section 7.3 Covenant Not to Sue ....................................... 24
Section 7.4 Exclusions ................................................ 24
Section 7.5 Restrictions .............................................. 25
Section 7.6 Other Indications ......................................... 25
Section 7.7 AHP's Right of First Refusal with Respect
to Secondary Focus Area Collaborations .................... 25
Section 7.8 Millennium's Right to Utilize Screening
Services .................................................. 26
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
Article VIII - Patent Ownership, Protection and Related
Matters ..................................................... 27
Section 8.1 Patent Ownership .......................................... 27
Section 8.2 Third Party Infringement .................................. 27
Section 8.3 Notice of Certification ................................... 28
Section 8.4 Claimed Infringement; Claimed Invalidity .................. 28
Article IX - Royalties ...................................................... 29
Section 9.1 Royalty Rates ............................................. 29
Section 9.2 Length of Royalty Payments ................................ 30
Section 9.3 Royalties Payable Only Once ............................... 30
Section 9.4 Royalty Reports ........................................... 30
Section 9.5 Delivery of Royalty ....................................... 31
Section 9.6 Records and Audits ........................................ 31
Section 9.7 Currency of Payments ...................................... 31
Section 9.8 Tax Withholding ........................................... 31
Article X - Term and Termination ............................................ 32
Section 10.1 Term ...................................................... 32
Section 10.2 Termination For Material Breach ........................... 32
Section 10.3 Rights Upon Termination for Material
Breach .................................................... 32
Section 10.4 Residual Rights ........................................... 33
Article XI - Product Liability Indemnification .............................. 34
Article XII - Governing Law ................................................. 34
Article XIII - Assignment ................................................... 35
Article XIV - Amendments .................................................... 35
Article XV - Notices ........................................................ 35
Article XVI - Force Majeure ................................................. 36
Article XVII - Representations and Warranties ............................... 37
Section 17.1 Representation of Authority ............................... 37
Section 17.2 Outstanding Agreements .................................... 37
Section 17.3 Consents .................................................. 37
Section 17.4 No Conflict ............................................... 37
Section 17.5 Section 365(n) of the Bankruptcy Code ..................... 37
</TABLE>
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<PAGE> 6
<TABLE>
<S> <C>
Section 17.6 Knowledge of Pending or Threatened Litigation ............. 38
Section 17.7 Employee Obligations ...................................... 38
Section 17.8 Full Disclosure ........................................... 38
Section 17.9 Compliance with Applicable Laws and Regulations ........... 38
Section 17.10 Export Controls ........................................... 39
Section 17.11 No Warranties ............................................. 39
Article XVIII - Public Announcements ........................................ 39
Article XVIX - Additional Agreements ........................................ 40
Section 19.1 Independent Contractors ................................... 40
Section 19.2 Consents Not Unreasonably Withheld ........................ 40
Section 19.3 No Strict Construction .................................... 40
Section 19.4 Headings .................................................. 40
Section 19.5 Severance of Clauses ...................................... 40
Section 19.6 No Waiver ................................................. 40
Section 19.7 Coordination With Bioinformatics Access
and License Agreement ..................................... 40
Section 19.8 Counterparts .............................................. 41
Appendix I - AHP Central Focus Area ...................................... 43
Appendix II - Type A Diseases ............................................. 46
Appendix III - Type B Diseases ............................................. 47
Appendix IV - Examples of Other Indications ............................... 48
Appendix V - Outstanding Agreements ...................................... 49
Appendix VI - Contact Person(s) ........................................... 50
</TABLE>
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<PAGE> 7
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
TRANSCRIPTION PROFILING TECHNOLOGY
ACCESS AND LICENSE AGREEMENT
This Agreement is effective as of the first day of August, 1996 (the
"Effective Date"), by and between Millennium Pharmaceuticals, Inc., a
corporation organized and existing under the laws of the State of Delaware and
having its principal office at 640 Memorial Drive, Cambridge, Massachusetts
02139-4815 ("Millennium"), and American Home Products Corporation a corporation
organized and existing under the laws of the State of Delaware, acting through
its Wyeth-Ayerst Research Division, and having its principal place of business
at 555 East Lancaster Pike, St. Davids, Pennsylvania 19087 ("AHP").
Introduction
1. Millennium possesses and is developing certain technology for
comparing transcription of genes.
2. AHP possesses a chemical library containing compounds that may be
useful in the identification of pharmaceutical products.
3. AHP may wish to access the above-described technology of Millennium
in exchange for access to AHP's chemical libraries, and each of the Parties
wishes to set forth the terms and conditions of any such exchange, including
royalties payable by either Party upon the successful commercialization of any
products resulting from such exchange.
NOW, THEREFORE, Millennium and AHP agree as follows:
Article I
Definitions
When used in this Agreement, each of the following terms shall have the
meanings set forth in this Article I:
Section 1.1. "Additional MTPT" means MTPT other than Millennium
**************.
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<PAGE> 8
Section 1.2. "Affiliate" means any corporation, company partnership,
joint venture and/or firm which controls, is controlled by or is under common
control with a Party. For purposes of this Section 1.2, "control" shall mean,
(a) in the case of corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the stock or shares having the right to vote for the
election of directors, and (b) in the case of non-corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the equity interest with
the power to direct the management and policies of such non-corporate entities,
provided, however that the foregoing shall not include any entity with respect
to which there is a contractual restriction on the right to elect a majority of
the directors.
Section 1.3. "AHP Central Focus Area" means the diseases listed on
Appendix I hereto.
Section 1.4. "AHP Chemical Library" means the collection of Compounds
contained in the proprietary chemical database of Wyeth-Ayerst Research
Laboratories (or any successor, Affiliate or division of AHP to which ownership
of such database is transferred, but otherwise excluding any proprietary
chemical database of such successors, Affiliates or divisions) whether now
existing or developed or acquired at any time during the term of this Agreement.
Section 1.5. "AHP Chemical Library Patent Right" means, with respect to
any Compound in the AHP Chemical Library, a Patent Right that covers the making,
using or selling of the Compound and that is owned or controlled by AHP and as
to which AHP has the right to grant licenses without violating the terms of any
agreement with a third party.
Section 1.6. "AHP Product" means any therapeutic or prophylactic product
which is sold by AHP or its Affiliates or Sublicensees for use as a human
pharmaceutical wherein the potential utility of the active Compound in the
product as a pharmaceutical agent was identified directly or indirectly through
the use of MTPT. Such uses of MTPT may include but are not limited to:
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<PAGE> 9
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(i) the use of MTPT to identify the relevance a biological molecule
or biochemical pathway has to a disease state and the use of
such information to identify the potential therapeutic or
prophylactic relevance of the Compound to that disease state;
(ii) the use of MTPT to identify a Compound as active in a disease
relevant model; and
(iii) the use of MTPT to identify an analogue to a Compound
(previously known or believed to be active in a disease) as
being of potentially greater activity and/or specificity than
the base Compound.
Section 1.7. "AHP Secondary Focus Area" means the diseases listed on
Appendix II and Appendix III hereto.
Section 1.8. "Automated DNA Sequencing Technology" means automated
systems, including supporting software and informatics technology, for
conducting high-throughput DNA sequencing.
Section 1.9. "Breaching Party" means such term as defined in Section
10.2.
Section 1.10. "Chemical Lead" means a Compound which has
***************************************************** against a biomolecular
target or assay which, based on scientifically appropriate
********************************, has been implicated as relevant to the
initiation and/or progression of a disease.
Section 1.11. "Chemical Similarity Search" means the identification (as
provided herein) by AHP of the Chemical Structures of ******************** which
are analogs (the "Initial Analogs") of a Compound designated by Millennium,
having Chemical Structures which are related to but distinct from such
designated Compound, followed by the selection of up to ******** such Initial
Analogs by Millennium (the "Selected Analogs") and the delivery to Millennium by
AHP of a Sample (as defined in Section 3.3) of each Selected Analog if
available. If such Selected Analog is not available, AHP shall (i) identify the
location of such Selected Analog in a Screen previously delivered to Millennium
hereunder, or (ii) if such unavailable Selected Analog was not previously
delivered, provide a replacement Sample of a Compound chosen by Millennium from
the remaining Initial Analogs in order to provide the full complement of
******** Samples). The ********** Initial Analogs shall be identified by AHP
using computational software,
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<PAGE> 10
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
including for example, SIMPROB and CLASSPIK, but shall not include Compounds
that AHP designates as Exclusions pursuant to Section 7.4. Millennium shall use
the Chemical Structures of the ***** **** Initial Analogs solely for the purpose
of choosing the **** *** Selected Analogs, and Millennium shall not attempt to
create any type of database on the Chemical Structures of the remaining **
Initial Analogs.
Section 1.12. "Chemical Structures" means a description of the chemical
composition of a Compound, requested by and delivered to Millennium pursuant to
AHP's obligations under Article III. The Chemical Structure delivered by AHP
with respect to any Compound shall be that which AHP believes in good faith to
have been the structure when such Compound was initially made and registered in
the proprietary chemical database of Wyeth-Ayerst Research Laboratories as
corrected or updated pursuant to Section 3.3. Chemical Structure includes the
stereochemical structure of a Compound, if known to AHP, but does not include
information on the three dimensional structure or physical properties of the
Compound, nor on the synthetic route(s) by which the Compound was made.
Section 1.13. "CNS" means the human central nervous system.
Section 1.14. "CNS Agreement" shall mean the CNS Research, Collaboration
and License Agreement between the Parties hereto that became effective on even
date herewith.
Section 1.15. "Compound" means at least one substance including
compositions or other mixtures containing two or more such substances.
Section 1.16. "Confidential Information" means all materials, Know-How
or other information, including, without limitation, MTPT, the AHP Chemical
Library and proprietary information and materials (whether or not patentable or
copyrightable) regarding a Party's technology, products, business information or
objectives, which is designated as confidential in writing by the disclosing
Party, whether by letter or by the use of an appropriate stamp or legend, prior
to or at the time any such information is disclosed by the disclosing Party to
the other Party. Notwithstanding the foregoing, materials, Know-How or other
information which is orally, electronically or visually disclosed by a Party, or
is disclosed in writing without an appropriate letter, stamp or legend, shall
constitute Confidential Information if the disclosing Party, within thirty (30)
days after such disclosure, delivers to the other Party a written document or
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<PAGE> 11
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
documents describing the materials, Know-How or other information and
referencing the place and date of such oral, visual, electronic or written
disclosure and the names of the persons to whom such disclosure was made,
provided, however, that any technical information disclosed at a meeting of the
TPT JMT or the Steering Committee shall constitute Confidential Information
unless otherwise specified.
Section 1.17. "Consideration" means such term as defined in Section
3.1(f).
Section 1.18. "Delivered Agreements" means such term as defined in
Section 17.1.
Section 1.19. "Designated Compound" means such term as defined in
Section 3.5.
Section 1.20. "Distributor" means such term as defined in Section
7.5(b).
Section 1.21. "Exclusion" means such term as defined in Section 7.4.
Section 1.22. "Executive Officer" means such term as defined in Section
4.3(b).
Section 1.23. "IND-Track Candidate" means a Compound (i) which
***********************************************************
************************* which, based on scientifically appropriate
********************************, has been implicated as relevant to the
initiation and/or progression of a disease, (ii) is effective
*************************** (if available) ***
**************************************************, (iii) has
******************************************************* consistent with
administration in the target disease, (iv) has **************
*********************************** consistent with further development, and (v)
if part of a series, has *****************
***************************************************************
******************************************. The attainment of the foregoing
qualifications with respect to any Compound shall be determined in accordance
with the standard practices of AHP as documented by AHP and as consistently
applied by AHP in its own research and development efforts.
Section 1.24. "Indemnified Party" means such term as defined in Article
XI.
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<PAGE> 12
Section 1.25. "Indemnifying Party" means such term as defined in Article
XI.
Section 1.26. "Initial Analog" means such term as defined in Section
1.11.
Section 1.27. "Invalidity Claim" means such term as defined in Section
8.4(b).
Section 1.28. "Know-How" means any information, data and materials,
including without limitation organic Compounds and biological materials and
software, user's manuals and guides, that are owned or controlled by Millennium
and/or by AHP, or a license to the same with respect to which Millennium and/or
AHP has the right to grant a sublicense.
Section 1.29. "Legal Exclusivity" means such term as defined in Section
9.2.
Section 1.30. "Management Committee(s)" means the TPT JMT and/or the
Steering Committee.
Section 1.31. "Major Market Country" means the United States, the United
Kingdom, Germany, France, Italy or Japan.
Section 1.32. "Marketing Collaborator" means such term as defined in
Section 7.5(b).
Section 1.33. "Marketing Exclusivity" means the marketing exclusivity
afforded approved drug products pursuant to (i) the exclusivity provisions of
the United States "Drug Price Competition and Patent Term Restoration Act of
1984", or its equivalent in a country other than the United States, or (ii) the
exclusivity provisions of the United States "Orphan Drug Act", or its equivalent
in a country other than the United States.
Section 1.34. "Millennium Product" means any therapeutic or prophylactic
product discovered, and/or developed, by or on behalf of Millennium (i) the
active ingredient in which is a Compound which is a member of the AHP Chemical
Library or an analog, homolog or other derivative thereof, or (ii) the potential
utility of the active ingredient in which was identified directly or indirectly
through the use of a Compound which is a member of the AHP Chemical Library or
an analog, homolog or other derivative thereof.
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<PAGE> 13
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 1.35. "Millennium **** Technology" means methods and Know-How
(in Millennium's possession and as practiced by Millennium on the Effective Date
and to which Millennium has the right to grant licenses without violating the
terms of any agreement with a third party) for the automated or semi-automated
use of ********************************************************
***************************************************************
***************************************************************
*********************************************. Millennium **** Technology
includes MTPT Software (as defined herein) and methods for preparing, processing
and analyzing samples, and information pertaining to the automation of such
methods, necessary for the practice of the technology.
Section 1.36. "MTPT" (Millennium Transcription Profiling Technology)
means: (i) Millennium **** Technology; and (ii) any other Transcription
Profiling Technology which is developed or acquired by Millennium during the
Term of the Agreement, and with respect to which Millennium has the right to
grant licenses without violating the terms of any agreement or other arrangement
with a third party.
Section 1.37. "MTPT Patent Rights and Copyrights" means a Patent Right
or copyright that is owned or controlled by Millennium and a Patent Right or
copyright as to which Millennium has the right to grant licenses without
violating the terms of any agreement with a third party, which relates to MTPT.
Section 1.38. "MTPT Software" means any software (in object code form)
and related documentation (i) constituting, or necessary for the use of, MTPT
licensed hereunder (including Millennium's proprietary laboratory information
management systems software), (ii) created by or for Millennium, and (iii) with
respect to which Millennium has the right to grant AHP the licenses provided
hereunder. MTPT Software does not include software included in Automated DNA
Sequencing Technology.
Section 1.39. "Named Biological Results" means, with respect to any
Compound, the biological results of AHP's high throughput screening of such
Compound as contained in AHP's computer database. Results shall be named as
percentage effects at given concentrations. In those instances where such
results are achieved in non-proprietary biological assays, the specific assays
shall be named. If the results are achieved in a biological assay proprietary to
AHP and if the identification of such assay or a description of its biological
class would, in AHP's good faith belief, damage the proprietary position of AHP,
then AHP may limit
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<PAGE> 14
its identification of the assay(s) to a description of its biological class or,
if appropriate, withhold such identification entirely, provided that AHP shall
not unreasonably so limit or withhold such identification.
Section 1.40. "Net Sales" means with respect to a Product, the gross
amount invoiced by a Party (in such capacity, the "Selling Party"), its
Affiliates and/or its Sublicensees, on sales or other dispositions of the
Product to unrelated third parties, less the following items, provided that such
items are included in the price charged and do not exceed reasonable and
customary amounts in the country in which such sale occurred:
(a) Trade, cash and quantity discounts actually allowed and taken
directly with respect to such sales;
(b) Tariffs, duties, excises, sales taxes or other taxes imposed upon
and paid directly with respect to such sales (excluding national, state or local
taxes based on income);
(c) Amounts repaid or credited by reason of rejections, defects, recalls
or returns or because of rebates or retroactive price reductions; and
(d) One percent (1%) of Net Sales as an allowance to cover all other
items, such as freight, transportation and insurance.
Such amounts shall be determined from the books and records of the Selling
Party, its Affiliates and/or its Sublicensees, maintained in accordance with
generally accepted accounting principles, consistently applied.
If a Product is sold in bulk (as distinguished from packaged
pharmaceutical form) for resale in packaged or finished form in a Major Market
Country, Net Sales shall be calculated by determining the quantity of Product in
packaged pharmaceutical form that would reasonably be produced from the bulk
quantity of Product and multiplying such quantity by the average price for such
Product in packaged pharmaceutical form during the applicable royalty reporting
period. If a Product is sold, or otherwise commercially disposed of for value
(including, without limitation, disposition in connection with the delivery of
other products or services), in a transaction that is not an outright arm's
length sale to an independent third party, then the gross amount invoiced in
such transaction shall be deemed to be the gross amount that would have
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<PAGE> 15
been paid had there been such a sale at the average sale price of such Product
during the applicable royalty reporting period. Net Sales shall not include any
consideration received by the Selling Party, its Affiliates or its Sublicensees
in respect of the sale, use or other disposition of a 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 Product in such country,
except sales under "treatment INDs", "named patient sales", "compassionate use
sales", or their equivalents pursuant to which the Selling Party, its Affiliates
or Sublicensees is/are entitled, under applicable regulatory policies, to
recover costs incurred in providing such products to the patients.
In the event the Product is sold as part of a Combination Product (as
defined below), the Net Sales from the Combination Product, for the purposes of
determining royalty payments, shall be determined by multiplying the Net Sales
of the Combination Product (as defined in the standard Net Sales definition),
during the applicable royalty reporting period, by the fraction, A/A+B where A
is the average sale price of the Product when sold separately in finished form
and B is the average sale price of the other product(s) included in the
Combination Product when sold separately in finished form, in each case during
the applicable royalty reporting period or, if sales of both the Product and the
other product(s) did not occur in such period, then in the most recent royalty
reporting period in which sales of both occurred. In the event that such average
sale price cannot be determined for both the Product and all other product(s)
included in the Combination Product, Net Sales for the purposes of determining
royalty payments shall be calculated by multiplying the Net Sales of the
Combination Product by the fraction C/C+D where C is the fair market value of
the Product and D is the fair market value of all other pharmaceutical
product(s) included in the Combination Product. In such event, the Selling Party
shall in good faith make a determination of the respective fair market values of
the Product and all other pharmaceutical products included in the Combination
Product, and shall notify the other Party (in such capacity, the "Non-Selling
Party") of such determination, together with data to support such determination.
The Non-Selling Party shall have the right to review such determination and
supporting data, and to notify the Selling Party if it disagrees with such
determination. If the Non-Selling Party does not agree with such determination
and the Parties are unable to agree in good faith as to such respective fair
market values, then such matter shall be referred to the Executive Officers (as
defined Section 4.3(b)).
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<PAGE> 16
As used above, the term "Combination Product" means any pharmaceutical
product which comprises the Product and other active Compounds and/or
ingredients.
Section 1.41. "Non-Breaching Party" means such term as defined in
Section 10.2.
Section 1.42. "Other Indications" means the diseases listed on Appendix
IV hereto and such other diseases as are identified from time to time by the
Steering Committee and added to such Appendix IV.
Section 1.43. "Paid Party" means such term as defined in Section 9.4.
Section 1.44. "Party" means AHP or Millennium; "Parties" means AHP and
Millennium.
Section 1.45. "Patent Right(s)" means a patent or patent application and
all divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions and foreign counterparts thereof that is owned or controlled by
Millennium or by AHP, or a license to the same to which Millennium or AHP has
the right to grant a sublicense.
Section 1.46. "Primary Screen Results" means, with respect to any
Compound, the biological results of AHP's high throughput screening of such
Compound as contained in AHP's computer database. Results shall be provided as
percentage effects at given concentrations, and biological assays are not
required to be named.
Section 1.47. "Product" means a Millennium Product or an AHP Product;
"Products" means Millennium Products and AHP Products.
Section 1.48. "Records" means such term as defined in Section 9.6.
Section 1.49. "Request" means such term as defined in Section 2.2.
Section 1.50. "Requested MTPT" means such term as defined in Section 2.2
Section 1.51. "Requested Support Materials" means such term as defined
in Section 3.1(e).
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<PAGE> 17
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 1.52. "Requisite Majority" means, with respect to either of the
Management Committees, a majority of the members of such Management Committee,
provided that such majority must include at least ******* representatives of
each Party.
Section 1.53. "Responsible Party" means such term as defined in Section
8.2(d).
Section 1.54. "Sample" means such term as defined in Section 3.3.
Section 1.55. "Screen" means such term as defined in Section 3.1(a).
Section 1.56. "Selected Analog" means such term as defined in Section
1.11.
Section 1.57. "Selling Party" means such term as defined in Section 9.4.
Section 1.58. "Steering Committee" means the steering committee, as
described in Section 2.3(a)(iii) of the CNS Agreement.
Section 1.59. "Sublicensee" means any third party other than an
Affiliate granted the right, subject to the terms and conditions of Article V,
to make, import, use, offer to sell or sell a Product(s), but not including a
third party that is not granted the right to make such Product(s) but merely
purchases such Product(s) in finished form (ready pack or in bulk) for resale.
Section 1.60. "Substantive Improvement" means such term as defined in
Section 2.7(b).
Section 1.61. "Substantive Improvement Consideration" means such term as
defined in Section 3.1(d).
Section 1.62. "Successful Transfer" means such term as defined in
Section 2.4.
Section 1.63. "Territory" means all countries of the world.
Section 1.64. "Total Deliveries" means such term as defined in Section
3.1(g).
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<PAGE> 18
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 1.65. "Transferred Technology Consideration" means such term as
defined in Section 3.1(c).
Section 1.66. "TPT JMT" means the joint management team, as described in
Article IV.
Section 1.67. "Transcription Profiling Technology" means methods for
comparing gene transcription in messenger RNA samples from any source, including
without limitation, human or animal tissues and cultured tissues or cells.
Transcription Profiling Technology includes without limitation Millennium ****
Technology, differential display technology and technology that employs a
microarray of sets of DNA probes for the purpose of comparing gene expression
profiles and levels in messenger RNA samples.
Section 1.68. "Type A Diseases" means the diseases listed on Appendix II
hereto.
Section 1.69. "Type B Diseases" means the diseases listed on Appendix
III hereto.
Section 1.70. "Unsuccessful Transfer" means such term as defined in
Section 2.6.
Section 1.71. "Up-Front Access Consideration" means such term as defined
in Section 3.1(b).
Section 1.72. "Valid Claims" means any claim(s) pending in a patent
application or in an unexpired patent which has not been held unenforceable,
unpatentable or invalid by a decision of a court or other governmental agency of
competent jurisdiction, unappealable or unappealed within the time allowed for
appeal, and which has not been admitted to be invalid or unenforceable through
reissue, reexamination, disclaimer or otherwise.
Section 1.73. "Wholly-Owned Subsidiary" means any corporation, company,
partnership, joint venture and/or firm which is completely controlled by a
Party. For purposes of this Section 1.40, "complete control" shall mean, (a) in
the case of corporate entities, direct or indirect ownership of ninety five
percent (95%) of the stock or shares having the right to vote for the election
of directors, and (b) in the case of non-corporate entities, direct or indirect
ownership of ninety five percent (95%) of the equity interest with the power to
direct the management and policies of such non-corporate entities.
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<PAGE> 19
Article II
MTPT Access and Transfer
Section 2.1 Technology Disclosure and Update. Commencing on the
Effective Date, and throughout the term of the Agreement, Millennium will
provide to AHP (through the TPT JMT) on a quarterly basis, (i) confidential
updates on the progress of efforts by Millennium to develop Additional MTPT,
including but not limited to identification of MTPT which, at the time of such
confidential update, Millennium believes in good faith it could successfully
transfer to AHP in compliance with this Article II, and (ii) information about,
and Millennium's perspectives on, advances in Transcription Profiling
Technology. Notwithstanding the foregoing, Millennium need not disclose to AHP
any information which Millennium is precluded from disclosing under any
agreement or other arrangement with a third party. In acquiring Transcription
Profiling Technologies from third parties, Millennium shall make good faith
efforts to negotiate a license that will permit it to grant a license or
sublicense of the technology to AHP.
Section 2.2. Request for MTPT. Upon request by AHP that Millennium
transfer to AHP an MTPT which has been identified by Millennium pursuant to
Section 2.1 as MTPT which may be successfully transferred (each, a "Request"),
Millennium shall be obligated to transfer such requested MTPT ("Requested MTPT")
to AHP in compliance with Section 2.3. Each Request shall be in writing, signed
by an appropriate senior executive of AHP, delivered during the term of this
Agreement to Millennium in compliance with the notice requirements of Article
XV, and shall reasonably describe the MTPT to be transferred.
Section 2.3. Transfer Diligence. Upon delivery of a Request to
Millennium, the Parties shall as soon as practicable thereafter, and in any
event, within the period determined by the TPT JMT as provided below, perform in
good faith all acts necessary to transfer the Requested MTPT, including but not
limited to the following:
(a) Millennium shall make available to AHP all Know-How
reasonably necessary for AHP to use the Requested MTPT, including but not
limited to, methods for preparing, processing and analyzing samples, information
pertaining to the automation of such methods and any associated MTPT Software.
AHP shall be responsible for the copying of any Know-How made available in
written form and shall obtain, install or provide at its
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<PAGE> 20
facilities all equipment, software and licenses necessary to receive and operate
the Requested MTPT.
(b) The Parties shall, with respect to any MTPT Software
included in the Requested MTPT, enter into and perform their obligations under
an appropriate software license agreement. Such software license agreement shall
require no additional payment by AHP for the licenses and rights granted
therein.
(c) Millennium shall provide AHP with training in the use and
installation of the Requested MTPT during its regular business hours. AHP shall
provide personnel with appropriate technical skill to receive such training. The
Parties shall cooperate in minimizing the effect of such training on the
business operations of the Parties.
Section 2.4. Successful Transfer. The TPT JMT shall determine when the
transfer of Requested MTPT has been successful (in each case, a "Successful
Transfer") in accordance with the following general principles. A Successful
Transfer shall occur when:
(a) The Requested MTPT shall operate at AHP in substantially the
same manner as the operation of such MTPT at Millennium;
(b) Substantially similar experiments performed at AHP and at
Millennium, each using the Requested MTPT and identical samples, shall produce
substantially the same data and results;
(c) Any MTPT Software which is part of the Requested MTPT shall,
subject to the terms of the applicable software license agreement executed
pursuant to Section 2.3(b), provide substantially the same level of
functionality that such MTPT Software provides to Millennium with respect to the
Requested MTPT;
(d) Appropriate AHP personnel shall be sufficiently trained to
allow AHP to use the Requested MTPT in substantially the manner that such MTPT
is used by Millennium; and
(e) Transfer of the Requested MTPT shall have been effected
within three (3) months of the Request or such other reasonable time period as
is determined in advance by the TPT JMT (including any extension granted by the
TPT JMT).
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<PAGE> 21
Section 2.5. Automated DNA Sequencing Technology. The Parties
acknowledge and agree that in order for AHP to optimize utilization of MTPT
transferred hereunder, it may prove beneficial for AHP to gain access to certain
Automated DNA Sequencing Technology owned and/or controlled by Millennium. If
AHP requests such access, the Parties shall enter into good faith discussions to
establish mutually acceptable terms and conditions under which such access can
be achieved, provided that no additional compensation shall be payable to
Millennium for Automated DNA Sequencing Technology as it exists at Millennium as
of the Effective Date.
Section 2.6. Termination of Transfer Diligence. If both Parties have
exerted good faith efforts to transfer Requested MTPT in compliance with the
terms of this Section, but Successful Transfer has not occurred within the time
period determined in advance by the TPT JMT (including any extension granted by
the TPT JMT) (in each case, an "Unsuccessful Transfer"), (i) both Parties shall
cease efforts to effect such transfer, (ii) AHP shall have no obligation, solely
with respect to such Unsuccessful Transfer, to deliver Consideration (as defined
in Section 3.1) to Millennium pursuant to Article III, (iii) the rights and
licenses granted to any Party hereunder prior to such Unsuccessful Transfer
shall remain in full force and effect, and (iv) such Unsuccessful Transfer shall
not constitute a material breach under Article X.
Section 2.7. MTPT Upgrades.
(a) Millennium shall transfer to AHP on a continuous basis any
upgrades or improvements in MTPT previously transferred to AHP as such upgrades
or improvements come into use by Millennium. Any such upgrades or improvements
shall be deemed to be part of the MTPT to which they relate, shall be
transferred to AHP in compliance with this Article II, and Successful Transfer
thereof shall not obligate AHP (solely with respect to such transfer) to deliver
additional Consideration (as defined in Section 3.1) to Millennium pursuant to
Article III.
(b) Notwithstanding the foregoing, in the event that cumulative
Millennium upgrades or improvements of a specific MTPT constitute a "Substantive
Improvement" (as determined below), upon the Successful Transfer thereof, AHP
shall be obligated to deliver a Substantive Improvement Consideration to
Millennium pursuant to Article III. The TPT JMT shall in good faith determine
the existence of a Substantive Improvement. In making such determination, the
TPT JMT shall consider the efficiency, sensitivity, quantitation and
cost-effectiveness added to the specific MTPT so upgraded and/or improved.
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<PAGE> 22
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 2.8. Support. With respect to MTPT transferred to AHP hereunder,
Millennium shall provide reasonable support services to AHP, which shall include
updates, corrections and bug-fixes to such MTPT as developed and implemented by
Millennium, and telephone support by qualified Millennium personnel on business
days during Millennium's normal working hours. Contact person(s) designated by
each of the Parties and identified on Appendix VI hereto (or such other
replacement individual(s) as each such Party may designate) shall be the sole
contacts for the coordination, delivery and receipt of the support services set
forth hereunder, and shall be knowledgeable and trained in the use of MTPT.
Section 2.9. Termination of Transfer Obligations. After AHP's delivery
to Millennium of the last Screen deliverable hereunder (i.e., the 20th Screen,
as set forth in Article III hereof), Millennium shall have no further
obligations to AHP under this Article II. Notwithstanding the foregoing,
Millennium shall continue to provide such support services as are provided for
under Sections 2.1, 2.7(a) and 2.8 until July 31, 2001, provided that
Millennium's obligations under Section 2.7(a) shall terminate immediately prior
to the delivery or provision of an update or improvement which would, together
with previously delivered updates or improvements, constitute a Substantive
Improvement under Section 2.7(b). Any support services provided by Millennium
after July 31, 2001, shall be negotiated by the Parties in good faith.
Article III
Access to the AHP Chemical Library
Section 3.1. Definitions.
(a) "Screen" means a delivery by AHP to Millennium which (i)
consists of ****** Compounds selected by AHP from plated Compounds contained in
the AHP Chemical Library, including Compounds from multiple historical sources
selected to achieve reasonable diversity, (ii) is in the form of **************
(or other format as mutually agreed), and (iii) contains such quantity of each
Compound as the TPT JMT determines in good faith to be sufficient to yield one
reliable data point from a biological assay of such Compound. The total number
of unique Compounds delivered in accordance with this Section for each Screen
shall be ******, provided that AHP reserves the right to substitute
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<PAGE> 23
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
individual samples of Compounds in one or more Screens so delivered.
(b) "Up-Front Access Consideration" means the delivery of
********* and related Requested Support Materials.
(c) "Transferred Technology Consideration" means the delivery of
********* and related Requested Support Materials.
(d) "Substantive Improvement Consideration" means the delivery
of ********* and related Requested Support Materials.
(e) "Requested Support Materials" means such *******
*************************************************************** (other than for
Compounds excluded under Section 7.4) and ***** ****************** as may be
requested and received by Millennium, subject to the limitations set forth in
Section 3.3 and the table below.
(f) "Consideration" means collectively, the Up-Front Access
Consideration, Transferred Technology Consideration and Substantive Improvement
Consideration.
(g) "Total Deliveries" means, with respect to *******
***************************************************************
************************************** the maximum number of each that AHP may
be obligated to deliver during the term of this Agreement as set forth in the
table below.
Section 3.2. Remuneration for MTPT Transfer. In consideration of the
rights granted to AHP and the obligations and covenants undertaken by Millennium
herein, AHP shall deliver the Consideration in accordance with the following:
(i) Upon the first Successful Transfer of MTPT, AHP shall be obligated
to deliver to Millennium the Up-Front Access Consideration and a Transferred
Technology Consideration.
(ii) Upon each subsequent Successful Transfer of MTPT, AHP shall be
obligated to deliver to Millennium an additional Transferred Technology
Consideration. .
(iii) Upon each Successful Transfer of a Substantive Improvement,
AHP shall be obligated to deliver to Millennium a Substantive Improvement
Consideration.
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<PAGE> 24
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
AHP shall deliver each of the foregoing in compliance with the terms of
Section 3.1 as soon as practicable, and in any event, within 30 days, after a
request by Millennium to receive such Consideration. Millennium shall not seek
to obtain more than 52,500 data points from each Screen. No Consideration (other
than a Substantive Improvement Consideration) shall be deliverable to Millennium
except in remuneration for a Successful Transfer of MTPT initiated at the
request of AHP.
Section 3.3. Requested Support Materials. As part of AHP's obligation to
deliver the Consideration required above, Millennium may request, and AHP shall
provide Requested Support Materials. Requested Support Materials shall be
delivered within 30 days or as soon as practicable after requested by
Millennium. Each category of Requested Support Materials deliverable with
respect to any Consideration shall be limited in amount to such number as is set
forth in the following table and limited in total over the term of this
Agreement to the Total Deliveries set forth for such Support Material below.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PER
SCREEN UP-FRONT TRANSFERRED SUBSTANTIVE
(REFERENCE ACCESS TECHNOLOGY IMPROVEMENT TOTAL
PARAMETER ONLY) CONSIDERATION CONSIDERATION CONSIDERATION DELIVERIES
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Number of * * * * **
Screens Screen Screens Screens Screens Screens
- ----------------------------------------------------------------------------------------------
Number of *** *** *** *** ****
Compounds for Compounds Compounds Compounds Compounds Compounds
which *******
*******
******* may
be requested
- ----------------------------------------------------------------------------------------------
Number of *** **** **** *** ****
Compounds Compounds Compounds Compounds Compounds Compounds
for which
********
**********
may be
requested
- ----------------------------------------------------------------------------------------------
Number of ** *** ** ***
******** ****** ****** ****** ****** ******
**********
- ----------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 25
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
<TABLE>
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
******* which
*******
******* may
be requested
- ----------------------------------------------------------------------------------------------
Number of ** ** ** ** **
Compounds for Compounds Compounds Compounds Compounds Compounds
which *****
**********
******* may
be requested
- ----------------------------------------------------------------------------------------------
</TABLE>
AHP acknowledges that Millennium may request and receive any of the
above Requested Support Materials (i) after AHP is obligated to deliver the
Consideration with respect to which such Requested Support Materials are
receivable, and (ii) in any order, subject only to the limitation then
applicable to such Support Material as set forth in the table above. In
addition, at Millennium's request, AHP shall provide a sample ("Sample") of each
Compound that is a Selected Analog, such Sample being of a quantity determined
by the TPT JMT to be sufficient for Millennium to obtain a reliable data point
from a biological assay of such Compound. AHP shall provide Millennium with any
corrections or updates of each such ****************** of which AHP becomes
aware, but AHP shall be under no obligation to perform analyses to determine the
chemical integrity of ******************* and AHP will not guarantee the
chemical integrity of Compounds synthesized therefrom. In the event that a
Compound is synthesized by Millennium from a ****************** provided
hereunder, and such synthesized Compound fails to show the activity shown by the
Compound as previously delivered to Millennium, AHP shall provide, upon
Millennium's request, an additional ************* of such Compound to Millennium
for chemical analysis. If AHP does not possess sufficient quantities of any
Compound to provide the foregoing Requested Support Materials, AHP shall provide
such Requested Support Materials to Millennium if and when sufficient quantities
are available, but AHP shall be under no obligation to synthesize any additional
quantities of any Compound.
Section 3.4. Termination of Obligation to Deliver Requested Support
Materials. AHP's obligation to deliver Requested Support Materials pursuant to
Section 3.3 shall survive until the later of (i)
******************************************************** this Agreement, (ii)
********************************************* ****************** hereunder, or
(iii) *************.
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<PAGE> 26
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 3.5. Destruction of Screens and Requested Support Materials.
Upon termination of AHP's obligation to deliver Requested Support Materials as
provided above, Millennium shall return to AHP, or provide AHP with a signed
affidavit representing that Millennium has destroyed, (i) all Compounds
delivered hereunder, other than the Designated Compounds, and (ii) all copies
(on any media) of any written information provided to Millennium pursuant to
this Article III (including without limitation, the
************************************** which are not ***************** other
than such information related to Designated Compounds. "Designated Compounds"
means those Compounds (A) which have been delivered to Millennium hereunder, (B)
for which Millennium has requested and received ******** *********** and (C)
which are identified in a writing delivered to AHP within thirty (30) days of
the termination of AHP's obligation to deliver Requested Support Materials.
Article IV
Management
Section 4.1. The TPT JMT. As soon as practicable after the Effective
Date, the Parties shall establish a TPT JMT, consisting of four (4)
representatives designated by AHP and four (4) representatives designated by
Millennium. Each Party shall make its initial designation of its representatives
not later than thirty (30) days after the Effective Date.
The TPT JMT shall oversee: (a) the disclosure, updates of disclosure and
transfer of MTPT, including, without limitation the determination of whether or
not (i) a Successful Transfer of the MTPT has taken place in accord with the
principles of Section 2.4, and (ii) cumulative upgrades of a specific MTPT
constitute a Substantive Improvement as provided in Section 2.6, (b) the
provision to AHP of support services as provided under Section 2.8, and (c)
delivery of all Consideration by AHP to Millennium including the transfer of
Screens and Requested Support Materials.
Section 4.2. The Steering Committee. The Steering Committee will be
responsible for definition of global priorities, approval of criteria for
technology transfers, and resolution of disagreements. Without limiting the
foregoing, the Steering Committee shall be responsible for approval of the
delivery of Consideration upon Successful Transfers and identification of
diseases (other than those currently identified in Appendix IV) to be included
in the definition of Other Indications.
- 20 -
<PAGE> 27
Section 4.3. Management Committee Decisions.
The Parties agree that the objective of the Management Committees shall
be to resolve all matters unanimously. However, in the absence of unanimity, the
following rules shall apply:
(a) TPT JMT. The agreement of a Requisite Majority of the TPT
JMT shall be required to take any action. Any member of the TPT JMT who is not
present at any meeting either in person or by designated alternate may appoint
another representative or alternate as his/her proxy on his/her behalf on all
matters coming to a vote. The TPT JMT may conduct meetings by telephone or video
conference. If the TPT JMT is unable to reach agreement by a Requisite Majority
on any issue within its purview, such issue shall be referred to the Steering
Committee.
(b) The Steering Committee. The agreement of a Requisite
Majority of the members of the Steering Committee shall be required to take any
action. Any member of the Steering Committee who is not present at any meeting
either in person or by designated alternate may appoint another representative
or alternate as his/her proxy on his/her behalf on all matters coming to a vote.
The Steering Committee may conduct meetings by telephone or video conference. If
the Steering Committee is unable to reach agreement by a Requisite Majority on
any issue within its purview, including without limitation unresolved issues
referred to it by the TPT JMT, such issue shall be referred to the President of
Wyeth-Ayerst Research Laboratories and the Chief Executive Officer of Millennium
(the "Executive Officers") for resolution.
(c) Decisions by Executive Officers. It is the intention of the
Parties that any issue referred by the Steering Committee to the Executive
Officers shall be resolved by negotiation in good faith as soon as practicable
but no later than thirty (30) days after its referral. Each Executive Officer
shall have the right to engage the services of any number of independent experts
in the field in question (the individual so engaged by each Executive Officer to
be reasonably acceptable to the other Executive Officer in terms of independence
and expertise, and shall be engaged under obligations of confidentiality) to
assist the Executive Officer in making a joint determination in the best
interests of the collaboration, and each Executive Officer shall be obligated to
consider in good faith the analyses and opinions of any such independent experts
engaged by either of them in making a determination. Such resolution, if any, of
a referred
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<PAGE> 28
issue shall be final and binding on the Parties, and the Parties shall instruct
the members of the Steering Committee designated by them to approve such
resolution.
Article V
Confidentiality
Section 5.1. Confidential Information. No Confidential Information
disclosed by one Party to the other during the term of this Agreement shall be
used by the receiving Party except in compliance with the rights and licenses
granted hereunder. Such Confidential Information shall be maintained in
confidence by the receiving Party (except to the extent reasonably necessary for
regulatory approval of Products developed by either Party), and shall not
otherwise be disclosed by the receiving Party to any other person, firm, or
agency, governmental or private, without the prior written consent of the
disclosing Party, except to the extent that the Confidential Information:
(a) was known or used by the receiving Party prior to its date of
disclosure to the receiving Party; or
(b) either before or after the date of the disclosure to the receiving
Party is lawfully disclosed to the receiving Party by sources other than the
disclosing Party rightfully in possession of the Confidential Information; or
(c) either before or after the date of the disclosure to the receiving
Party becomes published or generally known to the public, other than through the
sale of Products in the ordinary course, through no fault or omission on the
part of the receiving Party or its sublicensees; or
(d) is independently developed by or for the receiving Party without
reference to or reliance upon the Confidential Information; or
(e) is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving Party provides prior
written notice of such disclosure to the other Party and takes reasonable and
lawful actions to avoid and/or minimize the degree of such disclosure.
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<PAGE> 29
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 5.2. Employee Obligations. Each of the Parties agrees to provide
Confidential Information received from the other Party only to such Party's
employees, consultants and advisors, and to the employees, consultants and
advisors of such Party's Wholly-Owned Subsidiaries, who have a need to know and
have an obligation to treat such information and materials as confidential.
Section 5.3. Term. All obligations of confidentiality imposed under this
Article V shall expire ****************** expiration or termination of this
Agreement.
Article VI
Grant of Rights to AHP
Section 6.1. License Regarding Research and Development of AHP Products.
Subject to the terms and conditions of this Agreement, Millennium hereby grants
to AHP and its Wholly-Owned Subsidiaries a royalty bearing, non-exclusive,
non-transferable, right and license, without the right to grant sublicenses, to
research, have researched, develop and have developed human pharmaceuticals,
under any and all MTPT Patent Rights and Copyrights and Millennium Know-How with
respect to the MTPT which is transferred to AHP hereunder (pursuant to a
Successful Transfer) and as to which Millennium has the right to grant licenses
or sublicenses without violating any agreement or other arrangement with any
third party, provided that the foregoing grant shall not cover rights in MTPT
Software which shall be licensed pursuant to an appropriate software license
agreement as provided below.
Section 6.2. License Regarding Sale of AHP Products. Subject to the
terms and conditions of this Agreement, Millennium hereby grants to AHP and its
Affiliates a royalty bearing, non-exclusive, non-transferable, right and
license, including the right to grant sublicenses, to make, have made, import,
use, have used, offer to sell, sell and have sold AHP Products. Such license is
granted under any and all MTPT Patent Rights and Copyrights and Millennium
Know-How with respect to the MTPT which is transferred to AHP hereunder
(pursuant to a Successful Transfer) and as to which Millennium has the right to
grant licenses or sublicenses without violating any agreement or other
arrangement with any third party, provided that the foregoing grant shall not
cover rights in MTPT Software which shall be
- 23 -
<PAGE> 30
licensed pursuant to an appropriate software license agreement as provided
below.
Section 6.3. Covenant Not to Sue. The Parties recognize that Millennium
may own or control Patent Rights or Know-How not licensed hereunder to AHP that
could limit or block AHP's ability to exercise its rights under the licenses
granted in Sections 6.1 and 6.2. Although Millennium shall be under no
obligation to disclose or make available any such Patent Rights or Know-How to
AHP, Millennium agrees that it will not exercise any rights under any such
Patent Rights or Know-How with the intent or effect of limiting or blocking
AHP's exercise of its rights under Sections 6.1 or 6.2, including, but not
limited to, institution of legal proceedings claiming infringement.
Section 6.4. Core Field. Notwithstanding the foregoing, AHP acknowledges
that use of MTPT within the Core Field (as defined in the CNS Agreement) will be
considered part of the AHP Research Program (as defined in the CNS Agreement)
and such activities will therefore be controlled by, limited to and in
compliance with the terms of the CNS Agreement until the termination of the AHP
Research Program (as described in the CNS Agreement). AHP shall inform the TPT
JMT and the CNS Joint Management Team (as defined in the CNS Agreement) of the
use of MTPT by AHP or its Wholly-Owned Subsidiaries within the Core Field to
help minimize duplicative efforts and also to help maximize the probability of
useful results.
Section 6.5. Software Licenses. Millennium hereby agrees to grant to AHP
and its Wholly-Owned Subsidiaries an appropriate software license to any MTPT
Software transferred to AHP during the term of this Agreement in compliance with
Section 2.3(b).
Section 6.6. Third Party Rights. The Parties acknowledge that (i)
Millennium does not have the right to grant sublicenses to certain third party
rights which may be required in order for AHP to exercise the rights and
licenses granted herein (including without limitation, rights under U.S.
Patent No. 5,262,311 held by the Dana-Farber Cancer Institute, Inc.) and (ii)
AHP shall be solely responsible for obtaining any such rights directly from
any such third party.
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<PAGE> 31
Article VII
Grant of Rights to Millennium
Section 7.1. Research and Development of Millennium Products. Subject to
the terms and conditions of this Agreement, including without limitation
Sections 7.4, 7.5 and 7.7, AHP hereby grants to Millennium a fully paid-up,
non-royalty bearing, non-exclusive, non-transferable, right and license, without
the right to grant sublicenses, to research, identify and develop Millennium
Products. Such license is granted under AHP's rights in those Screens and
Requested Support Materials that are delivered to Millennium hereunder, as to
which AHP has the right to grant licenses or sublicenses without violating the
terms of any agreement or other arrangement with any third party.
Section 7.2. Licenses Regarding Sale of Millennium Products.
(a) Subject to the terms and conditions of this Agreement,
including but not limited to Sections 7.4, 7.5 and 7.7, AHP hereby grants to
Millennium a royalty bearing, non-exclusive, non-transferable, right and
license, including the right to grant sublicenses, to make, have made, import,
use, have used, offer to sell, sell and have sold Millennium Products. Such
non-exclusive license is granted under AHP's rights in the Designated Compounds
and related Requested Support Materials that are delivered to Millennium
hereunder and in AHP Patent Rights covering such Designated Compounds and
Requested Support Materials, as to which AHP has the right to grant licenses or
sublicenses without violating the terms of any agreement or other arrangement
with any third party.
(b) Subject to the terms and conditions of this Agreement,
including but not limited to Sections 7.4, 7.5 and 7.7, AHP hereby grants to
Millennium a royalty bearing, exclusive (including with respect to AHP),
non-transferable, right and license, including the right to grant sublicenses,
to make, have made, import, use, have used, offer to sell, sell and have sold
Millennium Products. Such exclusive license is granted only under AHP's rights
in those Designated Compounds which are delivered by AHP to Millennium hereunder
and that are actually embodied in Millennium Products, as to which AHP has the
right to grant licenses or sublicenses without violating the terms of any
agreement or other arrangement with any third party.
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<PAGE> 32
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 7.3. Covenant Not to Sue. The Parties recognize that AHP and/or
its Affiliates may own or control Patent Rights or Know-How not licensed
hereunder to Millennium that could limit or block Millennium's ability to
exercise its rights under the licenses granted in Sections 7.1 and 7.2. Although
AHP and its Affiliates shall be under no obligation to disclose or make
available any such Patent Rights or Know-How to Millennium, AHP agrees that
neither it nor any of its Affiliates will exercise any rights under any such
Patent Rights or Know-How with the intent or effect of limiting or blocking
Millennium's exercise of its rights under Sections 7.1 or 7.2, including, but
not limited to, institution of legal proceedings claiming infringement.
Section 7.4. Exclusions. Notwithstanding the rights and licenses granted
to Millennium hereunder, AHP retains the right to designate certain Compounds as
being of high strategic interest to AHP (each such designation, an "Exclusion").
With respect to any Compound previously transferred to Millennium hereunder,
upon written notice to Millennium of an Exclusion of such Compound, the rights
and licenses granted hereunder shall be null and void and Millennium shall cease
exercise of such rights and licenses with respect to such Compound. AHP's right
to make Exclusions shall be subject to the following terms and conditions:
(a) AHP acknowledges that, within thirty (30) days of a request
by Millennium for any Requested Support Materials with respect to any Compound,
and in compliance with Article III, (i) AHP shall designate such Compound as an
Exclusion, or (ii) agree to deliver such Requested Support Materials to
Millennium and waive any further right hereunder to designate such Compound as
an Exclusion.
(b) For each Compound in any Screen otherwise deliverable as a
Consideration, which is designated by AHP as an Exclusion, Millennium shall
receive an additional Compound as appropriate to ensure that such Screen
consists of ****** Compounds as defined in Section 3.1.
(c) AHP shall deliver such replacement Requested Support
Materials as are necessary for Millennium to receive the full complement of such
Requested Support Materials required by Section 3.3.
Section 7.5. Restrictions. The rights and licenses granted to Millennium
hereunder shall be subject to the following restrictions.
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<PAGE> 33
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(a) Central Focus Area Restriction. Millennium, whether alone or
in collaboration with any entity, shall not develop or register Millennium
Products in any indication within the AHP Central Focus Area. Millennium shall
notify AHP of its discovery that any Compound delivered hereunder may be
effective in any indication in the Central Focus Area.
(b) Secondary Focus Area Collaboration Restriction. Millennium
shall not, in collaboration with another entity (a "Marketing Collaborator"),
research, develop, sell, market, promote or engage in any other activity with
respect to Millennium Products in any indication within the AHP Secondary Focus
Area, unless Millennium complies with the terms of the Right of First Refusal
provided in Section 7.7. Notwithstanding the foregoing, Millennium may, without
compliance with the terms of such Right of First Refusal, collaborate with: (i)
any entity with respect to research, development and/or clinical trials for any
Millennium Product in the Secondary Focus Area, and (ii) any entity with respect
solely to the distribution of any Millennium Product in the Secondary Focus Area
(a "Distributor"). For the avoidance of doubt, any entity which engages in the
development, implementation and financing of a marketing, promotional or sales
campaign for sales of a Millennium Product to physicians, patients or managed
care organizations shall not be a Distributor for purposes of this Section.
Section 7.6. Other Indications. Millennium may, alone or in
collaboration with any entity, research, develop, register, market and/or sell,
or engage in any other activity with respect to Millennium Products for any
Other Indication.
Section 7.7. AHP's Right of First Refusal with Respect
to Secondary Focus Area Collaborations. Until the earlier of ***
********************************************************
****************************************************** as provided under Section
3.4, if Millennium wishes to enter into a collaboration with a Marketing
Collaborator requiring the offer of a right of first refusal under Section
7.5(b) above, Millennium shall (i) disclose information relevant to the proposed
collaboration to AHP and (ii) deliver to AHP a written proposal for implementing
such a collaboration with AHP. Such proposal shall indicate that either (x)
Millennium has developed sufficient information with respect to a Compound for
the potential treatment of a Type A Disease that such Compound constitutes an
IND-Track Candidate or (y) Millennium has developed a Chemical Lead for the
potential treatment of a Type B Disease. Thereafter, AHP shall have forty-five
(45) days to provide Millennium with written
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<PAGE> 34
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
notice of its intent to initiate good faith negotiations concerning the
execution of an agreement implementing such a collaboration. If such written
notice is provided within such 45-day period, the Parties shall have a period of
up to an additional ninety (90) days in which to execute a definitive agreement,
the terms and conditions of which shall govern any collaboration between the
Parties with respect to the commercialization of such a Millennium Product.
If either (i) the written notice referred to in the prior paragraph is
not provided by AHP within the 45-day period specified above, or (ii) the
Parties cannot agree, within the 90-day period specified above, to the terms of
an agreement implementing such a collaboration, then the proposal will be deemed
to have been rejected by AHP, and Millennium shall have the right to enter into
a collaboration agreement regarding such Millennium Product with a Marketing
Collaborator, provided, however, that Millennium shall
******************************** *******, enter into such a collaboration
agreement if the terms and conditions of such agreement are, on the whole, more
favorable than the most favorable terms and conditions offered by Millennium to
AHP. Millennium's right to collaborate with a Marketing Collaborator regarding a
Millennium Product, a proposal for which is deemed rejected by AHP under this
Right of First Refusal, shall again be subject to this Right of First Refusal
if, subsequent to such rejection but prior to the execution of a collaboration
agreement with a Marketing Collaborator, substantial new data or information
materially affecting the commercial viability of the subject Compound has been
developed by Millennium.
Section 7.8. Millennium's Right to Utilize Screening Services.
Millennium shall have the right to engage the screening services of an Affiliate
of Millennium or a joint venture, partnership or other similar entity in which
Millennium is a participant. *********************************************
*********************, Millennium shall have the right to engage the services of
a screening laboratory, other than a pharmaceutical entity or biotechnology
entity, under provisions of strict confidentiality and non-use.
****************************
****************************************************************
************************************. To avoid any doubt, other than as provided
in this Section 7.8, the rights granted to Millennium hereunder shall not
include the right to broker or offer to third parties on a fee-for-services
screening basis Compounds delivered by AHP to Millennium hereunder.
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<PAGE> 35
Article VIII
Patent Ownership, Protection and Related Matters
Section 8.1. Patent Ownership. AHP acknowledges that Millennium owns all
right, title and interest in the MTPT Patent Rights and Copyrights. Millennium
acknowledges that AHP owns all right, title and interest in the AHP Chemical
Library Patent Rights. AHP shall own all inventions made solely by its
employees, and Millennium shall own all inventions made solely by its employees.
All inventions made jointly by employees of AHP and employees of Millennium
shall be owned jointly by AHP and Millennium. All patent applications and
patents covering any invention shall be owned by the Party or Parties that
own(s) said invention.
Section 8.2 Third Party Infringement.
(a) Each of the Parties agree to take reasonable actions to
protect its Patent Rights in any Product of the other Party from infringement by
third parties, when, from its own knowledge or upon notice by the other Party,
the Party with knowledge or receiving notice becomes aware of the reasonable
probability that such infringement exists.
(b) Within ninety (90) days of a Party becoming aware of the
reasonable probability of an interference or infringement of its Patent Rights
in a Product of the other Party, the Responsible Party (as defined below) shall
decide whether to institute an infringement suit or take other appropriate
action that it believes is reasonably required to protect such Patent Rights. If
the Responsible Party fails to institute such suit or take such action within
such 90-day period, then the other Party shall have the right at its sole
discretion to institute such suit or other appropriate action in the name of
either or both Parties. In such event, the Responsible Party shall cooperate
with the other Party to the extent reasonably possible.
(c) Neither Party shall settle or compromise any claim or
proceeding relating to its Patent Rights in a Product of the other Party without
the consent of the other Party, which consent shall not be unreasonably
withheld.
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<PAGE> 36
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(d) As used herein, the term "Responsible Party" means (i) AHP
with respect to Patent Rights solely owned by, licensed to or otherwise
controlled by AHP (other than Millennium Patent Rights), (ii) Millennium with
respect to Millennium Patent Rights and (iii) AHP and Millennium jointly with
respect to Patent Rights jointly owned by AHP and Millennium.
(e) Each Party shall assume and pay all of its own out-of-pocket
costs incurred in connection with any litigation or proceedings described in
this Section 8.2, including, without limitation, the fees and expenses of that
Party's counsel.
(f) Any recovery obtained by any Party as a result of any
proceeding described in this 9.2 or from any counterclaim or similar claim
asserted in a proceeding described in Section 8.4, by settlement or otherwise,
shall be applied in the following order of priority:
(i) first, to reimburse each Party for all litigation
costs in connection with such proceeding paid by that Party and
not otherwise recovered on a pro rata basis based on each
Party's respective litigation costs; and
(ii) second, the remainder of the recovery shall be
paid (A) if the infringement claim, counterclaim or other
appropriate action was based on Patent Rights in a Millennium
Product, ********************************, and (B) if the
infringement claim, counterclaim or other appropriate action was
based on Patent Rights in an AHP Product, ********
********************.
Section 8.3 Notice of Certification. Millennium and AHP each shall
immediately give notice to the other of any certification filed under the U.S.
"Drug Price Competition and Patent Term Restoration Act of 1984", or comparable
law in other countries where applicable Patent Rights are maintained, claiming
that a Patent Right in a Product of the other Party is invalid or that any
infringement will not arise from the manufacture, use or sale of Product by a
third party. If the Responsible Party decides not to bring infringement
proceedings against the third party making such a certification, the Responsible
Party shall give notice to the other Party of its decision not to bring suit as
soon as practicable but in any event within twenty-one (21) days after receipt
of notice of such certification. The other Party may then, but is not required
to, bring suit against the third party that filed the certification. Any suit by
AHP or Millennium shall either be in the name of AHP or in the name of
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<PAGE> 37
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Millennium, as may be required by law. For this purpose, the Party not bringing
suit shall execute such legal papers necessary for the prosecution of such suit
as may be reasonably requested by the Party bringing suit.
Section 8.4 Claimed Infringement; Claimed Invalidity.
(a) If the activities of either Party in connection with making,
importing, using, offering to sell or selling its Product result in a claim of
patent infringement or other violation of the intellectual property rights of
any third party, the Party who is accused of such infringement shall defend
itself at its sole cost. The other Party shall cooperate with the accused Party
in such defense and prosecution and shall have the right to be represented by
counsel of its own choice.
(b) If a third party at any time asserts a claim that any Patent
Right in a Product is invalid or otherwise unenforceable (an "Invalidity
Claim"), whether as a defense in an infringement action brought by AHP or
Millennium, or in an action brought against AHP or Millennium, the Parties shall
cooperate with each other in preparing and formulating a response to such
Invalidity Claim. The Party responsible for responding to such claim, at its
sole expense, shall be initially the Responsible Party, subject to the other
Party's right, at its sole expense, to assume responsibility if the Responsible
Party elects not to do so. Neither Party shall settle or compromise any
Invalidity Claim with respect to Patent Rights in a Product of the other Party
without the consent of the other Party, which consent shall not be unreasonably
withheld.
Article IX
Royalties
Section 9.1. Royalty Rates. Each Party shall pay to the other Party
royalties based on Net Sales of the ********** Products sold by such Party at
the following rates:
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<PAGE> 38
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
<TABLE>
<CAPTION>
Annual Aggregate Net Sales Products
in the Territory of -----------------------------
each Product First Second Third Fourth Fifth
- ------------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C>
less than or equal ***** **** **** **** ****
*****************
greater than **** ***** **** **** **** ****
*****************
*****************
greater than ***** **** **** **** ****
************
</TABLE>
The royalty rates set forth in the above table shall only apply to that portion
of the Net Sales of a Product that falls within the indicated range. For
example, for a Product (the First by the Party) for which aggregate annual
worldwide Net Sales exceed **********, the royalty shall be equal to **********
****************************************************************
****************************************************************
***********************. Notwithstanding the foregoing, to the extent that any
royalties otherwise required to be paid by AHP by the foregoing would, absent
this Agreement, be controlled by the terms of the CNS Agreement, such royalties
shall, until the termination or expiration of the CNS Agreement, be determined
and paid in compliance with the CNS Agreement.
Section 9.2. Length of Royalty Payments. The royalties payable hereunder
shall be paid on a country-by-country basis (i) from the date of first
commercial sale of a Product which is part of country-wide introduction until
the termination of any ***************** afforded such Product in such country,
or (ii) until **************************************************** whichever of
(i) or (ii) is longer. For the purposes of this Section 9.2, a Product is
afforded ******************** in the circumstance where, on a country-by-country
basis, (A) ********************************************************************
***************************************************************
***************************************************************
*****************, or (B) *************************************
***********. Notwithstanding the foregoing, where a Product is afforded
***************** only because it is covered by a Valid Claim contained in a
patent application (i.e., the Valid Claim is not a granted in force claim
contained in an issued patent), and if no patent thereon issues in the
applicable country prior to ************************************* sale of such
Product
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<PAGE> 39
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
in such country, the length of the royalty payment obligation with respect to
such Product shall be **************************** ********************* of such
Product (provided that if a patent thereon issues following the expiration of
such *********** ******* such Party's royalty payment obligations pursuant to
this Article IX shall resume).
Section 9.3. Royalties Payable Only Once. The obligation to pay
royalties is imposed only once with respect to the same unit of Product. Except
as specifically provided in this Agreement, it is understood and agreed that
there shall be no deductions from the royalties payable hereunder.
Section 9.4. Royalty Reports. Each Party receiving Net Sales from a
Product (in such capacity, the "Selling Party") shall deliver to the other Party
(in such capacity, the "Paid Party"), within sixty (60) days after the end of
each calendar quarter, a written accounting of such Selling Party's, its
Affiliates' and its Sublicensees' sales and other consideration received subject
to royalty payment for such quarter. Such quarterly reports shall indicate the
Net Sales of Products on a country-by-country basis. This obligation shall
commence with the first calendar quarter in which there is a Net Sale of a
Product by such Selling Party, its Affiliates or any of its Sublicensees.
Section 9.5. Delivery of Royalty. When a Selling Party delivers the
accounting to a Paid Party, the Selling Party shall also deliver all royalty
payments due to such Paid Party for the calendar quarter.
Section 9.6. Records and Audits. The Selling Party shall keep, and shall
require its Affiliates and Sublicensees to keep, complete and accurate records
of the latest three (3) years of Net Sales (the "Records"). A Paid Party shall
have the right annually at its expense to have an independent, certified public
accountant, reasonably acceptable to the other Party, review such Records in the
location(s) where such records are maintained by the Selling Party, its
Affiliates or its Sublicensees upon reasonable notice and during regular
business hours for the purposes of verifying royalties payable to such Paid
Party and Net Sales. Results of such review shall be made available to both
Parties. If the review reflects an underpayment of royalties to such Paid Party,
such underpayment shall be promptly remitted by the Selling Party. If the
underpayment is equal to or greater than five percent (5%) of the royalty amount
that was otherwise due, the Selling Party shall pay all of the costs of such
review.
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<PAGE> 40
Section 9.7. Currency of Payments. All royalties under this Agreement
shall be paid in United States dollars by wire transfer to such bank account as
a Paid Party may designate from time to time. Any royalties due hereunder on Net
Sales outside of the United States shall be payable in United States dollars at
the rate of exchange of the currency of the country in which the Net Sales are
made as published by the Wall Street Journal for the last business day of the
calender quarter for which the royalties are payable.
Section 9.8. Tax Withholding. A Selling Party shall use all reasonable
and legal efforts to reduce tax withholding on payments made to a Paid Party
hereunder. Notwithstanding such efforts, if the Parties conclude that tax
withholdings under the laws of any country in the Territory are required with
respect to royalties payable hereunder, the Selling Party shall withhold the
required amount and pay it to the appropriate governmental authority. In such a
case, the Selling Party will promptly provide the Paid Party with original
receipts or other evidence sufficient to allow the Paid Party to obtain the
benefits of such tax withholdings.
Article X
Term and Termination
Section 10.1. Term. This Agreement becomes effective as of the Effective
Date, and unless otherwise terminated as set forth in this Article X, shall
continue in effect for an initial term of five (5) years. Thereafter, this
Agreement may be extended for up to two (2) additional one-year terms by AHP
upon written notice delivered to Millennium sixty (60) days prior to the
termination of the then current term. Notwithstanding the foregoing, (i) in the
event that AHP terminates the Millennium Research Program (as defined in the CNS
Agreement) or the CNS Agreement in its entirety, AHP may terminate this
Agreement, and (ii) in the event that Millennium terminates the CNS Agreement,
Millennium may terminate this Agreement, in each case, upon notice to the
non-terminating Party in compliance with Article XV.
Section 10.2. Termination For Material Breach. Upon any material breach
under this Agreement by either Party (in such capacity, the "Breaching Party"),
the other Party (in such capacity, the "Non-Breaching Party") may terminate this
Agreement by ninety (90) days' written notice to the Breaching Party, specifying
the material breach, default or other defect. The termination becomes effective
at the end of the ninety (90) day period unless (i) the Breaching Party cures
such breach during
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<PAGE> 41
such ninety (90) day period, or (ii) if such breach is not susceptible to cure
within ninety (90) days of the receipt of written notice of the breach, the
Breaching Party is diligently pursuing a cure (unless such breach, by its
nature, is incurable, in which case the Agreement may be terminated
immediately). The Parties will use reasonable efforts to work together to cure
any breach. An Unsuccessful Transfer, as defined in Section 2.5, shall not in
and of itself constitute a material breach by either Party.
Section 10.3. Rights Upon Termination For Material Breach. If the
Non-Breaching Party terminates this Agreement pursuant to Section 10.2 following
a material breach by the Breaching Party, (a) the Breaching Party shall return
to the Non-Breaching Party all Confidential Information and materials received
from the Non-Breaching Party during the term of this Agreement, (b) the
Breaching Party shall cease all use of the Confidential Information and
materials received from the Non-Breaching Party for any purpose, except that the
Breaching Party may keep a copy of all documents for record keeping purposes
only, (c) the Non-Breaching Party shall retain the rights and licenses granted
hereunder subject to any obligation to pay royalties, and (d) the rights and
licenses granted to the Breaching Party hereunder shall cease and be of no
further force or effect.
Section 10.4. Residual Rights. Upon expiration or early termination of
this Agreement, except as specifically provided herein to the contrary, all
rights and obligations of the Parties shall cease, except as follows:
(a) The right of each Party, its Affiliates and its Sublicensees
to manufacture and sell its Products and the obligation to pay royalties on Net
Sales of such Products; and
(b) The obligation of AHP to deliver any Consideration with
respect to Successful Transfers occurring prior to such termination and, subject
to the limitation under Section 3.4, Requested Support Materials with respect to
such Consideration; and
(c) The rights and licenses granted to AHP herein with respect
to any MTPT transferred to AHP prior to such termination (including without
limitation, the rights and licenses granted pursuant to Article VI); and
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<PAGE> 42
(d) The rights and licenses granted to Millennium herein with
respect to Designated Compounds, as defined in Section 3.5 (including without
limitation, the rights and licenses granted pursuant to Article VII); and
(e) Millennium's obligations and AHP's rights with respect to
the Right of First Refusal provided under Section 7.7 for the period provided
therein; and
(f) Millennium's obligations as provided in and subject to
Sections 2.8 and 2.9; and
(g) The obligations regarding confidentiality set forth in
Article V; and
(h) All obligations for record keeping and accounting reports;
and
(i) A Party's right to inspect books and records of the other
Party as set forth in Article X, which right shall continue in full force and
effect for three (3) years following the expiration of such other Party's
obligation under this Agreement to keep such books and records; and
(j) Obligations of defense and indemnity, which obligations
shall continue in full force and effect for an unlimited period; and
(k) Obligations set forth in Section 8.2 and Section 8.4, but
only with respect to those causes of action that accrued prior to such
expiration or termination; and
(l) Any cause of action or claim of Millennium or AHP accrued or
to accrue because of any breach or default by the other Party hereunder.
Article XI
Product Liability Indemnification
Each Party (in such capacity, an "Indemnifying Party") agrees to defend
the other Party (in such capacity, the "Indemnified Party") at the Indemnifying
Party's cost and expense, and will indemnify and hold the Indemnified Party and
its directors, officers, employees and agents (the "Indemnified Parties")
harmless from and against any losses, costs, damages, fees or expenses arising
out of any claim relating to personal injury from
- 36 -
<PAGE> 43
the development, manufacture, use, sale or other disposition of any Product by
the Indemnifying Party or its Sublicensees (except for Products, developed,
manufactured, used or sold by the Indemnified Party or its Sublicensees (other
than Indemnifying Party). In the event of any such claim against the Indemnified
Parties by any party, the Indemnified Party shall promptly notify the
Indemnifying Party in writing of the claim and the Indemnifying Party shall
manage and control, at its sole expense, the defense of the claim and its
settlement. The Indemnified Parties shall cooperate with the Indemnifying Party
and may, at their option and expense, be represented in any such action or
proceeding. The Indemnifying Party shall not be liable for any litigation costs
or expenses incurred by the Indemnified Parties without the Indemnifying Party's
prior written authorization. In addition, the Indemnifying Party shall not be
responsible for the indemnification of any Indemnified Party with respect to any
claim arising from any negligent or intentional acts by any Indemnified Party.
Article XII
Governing Law
This Agreement shall be construed and the respective rights of the
Parties hereto determined according to the substantive laws of the State of
Delaware notwithstanding the provisions governing conflict of laws under such
Delaware law to the contrary except matters of intellectual property law which
shall be determined in accordance with the national intellectual property laws
relevant to the intellectual property in question.
Article XIII
Assignment
Neither Party may assign this Agreement in whole or in part without the
consent of the other, except to an Affiliate, or except if such assignment
occurs in connection with the sale or transfer of all or substantially all of
the business and assets of Millennium or AHP to which the subject matter of this
Agreement pertains.
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<PAGE> 44
Article XIV
Amendments
This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof, and supersedes all previous arrangements
with respect to the subject matter hereof, whether written or oral. Any
amendment or modification to this Agreement shall be made in writing signed by
both Parties.
Article XV
Notices
All notices, instructions and other communications hereunder or in
connection herewith shall be in writing and shall be (i) delivered personally,
(ii) sent by registered or certified mail, return receipt requested, postage
prepaid, (iii) sent via a reputable overnight courier service, or (iv) sent by
facsimile transmission, in each case to an address set forth below. Any such
notice, instruction or communication shall be deemed to have been delivered upon
receipt if delivered by hand, five business days after it is sent by registered
or certified mail, return receipt requested, postage prepaid, one business day
after it is sent via a reputable overnight courier service, or when transmitted
with electronic confirmation of receipt, if transmitted by facsimile (if such
transmission is on a business day; otherwise, on the next business day following
such transmission).
Notices to Millennium shall be addressed to:
Millennium Pharmaceuticals, Inc.
640 Memorial Drive
Cambridge, Massachusetts 02139-4815
Attention: Chief Executive Officer
Facsimile No.: (617) 621-0264
with a copy to:
Attention: Legal Department
Facsimile No.: (617) 374-0074
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<PAGE> 45
Notices to AHP shall be addressed to:
Wyeth-Ayerst Research
555 East Lancaster Pike
St. Davids, PA 19087
Attention:Office of the Senior Vice President,
Global Business Development
Facsimile No.: (610) 688-9498
with a copy to:
American Home Products Corporation
Five Giralda Farms
Madison, NJ 07940
Attention: Associate General Counsel
Facsimile No.: (201) 660-7155
Either Party may change its address by giving notice to the other Party in the
manner herein provided.
Article XVI
Force Majeure
No failure or omission by the Parties hereto in the performance of any
obligation of this Agreement shall be deemed a breach of this Agreement or
create any liability if the same shall arise from any cause or causes beyond the
control of the Parties, including, but not limited to, the following: acts of
God; acts or omissions of any government; any rules, regulations or orders
issued by any governmental authority or by any officer, department, agency or
instrumentality thereof; fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot; and invasion and provided that such failure or
omission resulting from one of the above causes is cured as soon as is
practicable after the occurrence of one or more of the above-mentioned causes.
Article XVII
Representations and Warranties
Section 17.1. Representation of Authority. Millennium and AHP each
represents and warrants to the other that as of the
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<PAGE> 46
Effective Date it has full right, power and authority to enter into this
Agreement and to provide the materials and Know-How contemplated under Articles
II and III hereof, including MTPT and Consideration, subject to the limitations
set forth in this Section 17.1. Millennium represents and warrants to AHP that
it (i) is the owner or licensee, as the case may be, of MTPT and MTPT Patent
Rights and Copyrights, and (ii) has the right to grant to AHP the licenses and
sublicenses granted pursuant to this Agreement. Millennium represents that it
has furnished AHP with (a) a copy of all patent applications comprising MTPT
Patent Rights and Copyrights and (b) a summary of all license agreements and
options pertaining to MTPT or the MTPT Patent Rights and Copyrights and existing
as of the Effective Date (collectively, the "Delivered Agreements"). By its
execution and delivery of this Agreement, AHP agrees to be bound by the terms of
such Delivered Agreements as are set forth on Appendix V to the extent required
thereby.
Section 17.2 Outstanding Agreements. Appendix V, which shall be modified
by the Parties from time to time consistent with the provisions of this
Agreement, lists all material outstanding options, licenses or agreements of any
kind between either Party and any third party relating to the rights and
licenses granted hereunder.
Section 17.3. Consents. All necessary consents, approvals and
authorizations of all government authorities and other persons required to be
obtained by either Party in connection with execution, delivery and performance
of this Agreement have been and shall be obtained.
Section 17.4. No Conflict. Notwithstanding anything to the contrary in
this Agreement, the execution and delivery of this Agreement and the performance
of each Party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or regulations and (b) do not and shall not
conflict with, violate or breach or constitute a default or require any consent
under, any contractual obligation of such Party, including any obligations or
duties arising under any of the agreements listed on Appendix VI hereof.
Section 17.5. Section 365(n) of the Bankruptcy Code. All rights and
licenses granted under or pursuant to any section of this Agreement are, and
shall otherwise be, deemed to be for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Section 101(35A) of the Bankruptcy Code. The Parties shall retain and may
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<PAGE> 47
fully exercise all of their respective rights and elections under the Bankruptcy
Code. Upon the bankruptcy of either Party, the non-bankrupt Party shall further
be entitled to a complete duplicate of (or complete access to, as appropriate)
any such intellectual property, and such, if not already in its possession,
shall be promptly delivered to the non-bankrupt Party. Notwithstanding the
foregoing, if source code to any MTPT Software is held in escrow pursuant to the
terms of any agreement related thereto and Millennium is the bankrupt Party,
Millennium shall have the right to continue to fulfill any support obligations
with respect to such MTPT Software until the termination or expiration of this
Agreement in order to prevent any source code from being released from escrow
for so long as Millennium continues to fulfill such support obligations.
Section 17.6. Knowledge of Pending or Threatened Litigation. Each Party
represents and warrants to the other that it is not aware of any pending or
threatened litigation (and has not received any communication) which alleges
that such Party's activities to date have violated, or by conducting its
business in compliance with this Agreement such Party would violate, any of the
intellectual property rights of any other person. To the best of each Party's
knowledge, there is no material unauthorized use, infringement or
misappropriation of any of its intellectual property rights licensed hereunder
to the other Party.
Section 17.7. Employee Obligations. Each Party represents and warrants
that all of its employees, officers, and consultants have executed agreements or
have existing obligations under law requiring, in the case of employees and
officers, assignment to such Party of all inventions made during the course of
and as the result of their association with such Party and obligating the
individual to maintain as confidential such Party's Confidential Information as
well as confidential information of a third party which such Party may receive,
to the extent required to support such Party's obligations under this Agreement.
Section 17.8. Full Disclosure. Each Party has disclosed to the other in
good faith, all material information such Party believes is relevant to the
subject matter of this Agreement, and to such Party's ability to observe and
perform its obligations hereunder.
Section 17.9. Compliance with Applicable Laws and Regulations. Each
Party represents and warrants to the other Party that it will comply with all
applicable laws and regulations in the development, manufacture and marketing of
Products.
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Section 17.10. Export Controls. The Parties acknowledge that both are
subject to the laws and regulations of the United States of America governing
exportation of technical information, computer software, laboratory prototypes
and other commodities and that the rights hereunder are contingent on compliance
with all such laws and regulations. The transfer of certain technical data and
commodities may require a license from the appropriate agency of the United
States Government and neither Party shall export such technical data or
commodities to certain foreign countries to which export restrictions apply
without the prior approval of such agency.
Section 17.11. No Warranties EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, AND PARTICULARLY THAT PRODUCTS WILL BE
SUCCESSFULLY DEVELOPED HEREUNDER, AND IF DEVELOPED, WILL HAVE COMMERCIAL UTILITY
OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Article XVIII
Public Announcements
Any announcements or similar publicity with respect to the execution of
this Agreement shall be agreed between the Parties in advance of such
announcement. AHP understands that this Agreement and Millennium's efforts
hereunder are likely to be of significant interest to investors, analysts and
others, and Millennium therefore intends to make such public announcements with
respect thereto. Millennium agrees that any such announcement will not contain
confidential business or technical information and, if disclosure of
confidential business or technical information is required by law or regulation,
will redact if permissible by such law or regulation, or otherwise make
reasonable efforts to minimize such disclosure and obtain confidential treatment
for any such information which is disclosed to a governmental agency or group.
Each Party agrees to provide to the other Party a copy of any public
announcement as soon as reasonably practicable under the circumstances prior to
its scheduled release. Each Party shall have the right to expeditiously review
and recommend changes to any announcement regarding this Agreement or any
studies carried out under this Agreement. Except as otherwise required by law,
the Party whose press release has been reviewed shall consider in good faith the
removal of any information the reviewing Party reasonably deems to be
inappropriate for disclosure.
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<PAGE> 49
Article XVIX
Additional Agreements
Section 19.1. Independent Contractors. It is understood and agreed that
the relationship between the Parties hereunder is that of independent
contractors and that nothing in this Agreement shall be construed as
authorization for either AHP or Millennium to act as agent for the other.
Members of the TPT JMT and the Steering Committee shall be, and shall remain,
employees of Millennium or AHP, as the case may be. Neither Party shall incur
any liability for any act or failure to act by members of the TPT JMT and the
Steering Committee who are employees of the other Party.
Section 19.2. Consents Not Unreasonably Withheld. Whenever provision is
made in this Agreement for either Party to secure the consent or approval of the
other, that consent or approval shall not unreasonably be withheld, and whenever
in this Agreement provisions are made for one Party to object to or disapprove a
matter, such objection or disapproval shall not unreasonably be exercised.
Section 19.3. No Strict Construction. This Agreement has been prepared
jointly and shall not be strictly construed against either Party.
Section 19.4. Headings. The captions or headings of the Sections or
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
Section 19.5. Severance of Clauses. Each Party agrees that, should any
provision of this Agreement be determined by a court of competent jurisdiction
to violate or contravene any applicable law or policy, such provision will be
severed or modified by the court to the extent necessary to comply with the
applicable law or policy, and such modified provision and the remainder of the
provisions hereof will continue in full force and effect.
Section 19.6. No Waiver. The waiver of a breach hereunder may be
effected only by a writing signed by the waiving Party and shall not constitute
a waiver of any other breach.
Section 19.7. Coordination With Bioinformatics Access and License
Agreement. Notwithstanding any of the terms of this Agreement to the contrary,
to the extent that any of the terms of
- 43 -
<PAGE> 50
this Agreement with regard to MTPT Software (other than terms regarding payment)
would, absent this Agreement, be controlled by the terms of the Bioinformatics
Access and License Agreement between the Parties hereto that became effective on
even date herewith, such terms shall, until the termination or expiration of
such Bioinformatics Access and License Agreement, be determined and paid in
compliance with such Bioinformatics Access and License Agreement.
Section 19.8. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of such
together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 44 -
<PAGE> 51
IN WITNESS WHEREOF, this Agreement is executed this ___ day of July,
1996, to be effective as of the Effective Date.
WYETH-AYERST RESEARCH DIVISION OF MILLENNIUM
AMERICAN HOME PRODUCTS CORPORATION PHARMACEUTICALS, INC.
______________________________ ______________________________
Steven H. Holtzman
______________________________ ______________________________
Title Chief Business Officer
______________________________ ______________________________
Date Date
- 45 -
<PAGE> 52
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX I
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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<PAGE> 55
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX II
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX III
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<PAGE> 57
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX IV
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<PAGE> 58
APPENDIX V
(referenced in Sections 17.1 and 17.2)
Millennium - Site Licensing Agreement III dated May 15, 1995 by and between
Millennium and the Dana-Farber Cancer Institute, Inc.
AHP - to be provided to Millennium with respect to and upon delivery of
Consideration pursuant to Article III, as appropriate.
- 52 -
<PAGE> 59
APPENDIX VI
Designated Contact Persons (referenced in Section 2.8)
Millennium: to be provided to AHP within 30 days of the Effective Date.
AHP: to be provided to Millennium within 30 days of the Effective Date.
- 53 -
<PAGE> 1
Exhibit 11.1
Statement Regarding Computation of Per Share Earnings
Millennium Pharmaceuticals, Inc.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
------------------------------------------------------------
<S> <C> <C> <C> <C>
Average common stock outstanding 18,231,808 3,161,814 12,644,635 3,161,814
Assumed conversion of Convertible
Preferred Stock 4,036,574 12,109,721 8,073,147 12,109,721
Common stock equivalents -- 3,879,160 -- 3,879,160
------------------------------------------------------------
Total 22,268,382 19,150,695 20,717,782 19,150,695
============================================================
Net loss $ (4,219,514) $ (2,825,421) $ (4,271,653) $ (5,125,945)
============================================================
Net loss per share $ (0.19) $ (0.15) $ (0.21) $ (0.27)
============================================================
</TABLE>
4
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001002637
<NAME> MILLENNIUM, INC.
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 14,803,701
<SECURITIES> 53,965,804
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 70,802,492
<PP&E> 13,517,134
<DEPRECIATION> 3,869,016
<TOTAL-ASSETS> 82,515,945
<CURRENT-LIABILITIES> 8,606,016
<BONDS> 0
<COMMON> 23,851
0
0
<OTHER-SE> 70,469,451
<TOTAL-LIABILITY-AND-EQUITY> 82,515,945
<SALES> 0
<TOTAL-REVENUES> 12,658,849
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 17,765,072
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 415,326
<INCOME-PRETAX> (4,271,653)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,271,653)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,271,653)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
