<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[December 31, 1999]
Date of Report (Date of earliest event reported)
ABGENIX, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-24207 94-3248826
- ---------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation File Number) Identification No.)
7601 DUMBARTON CIRCLE
FREMONT, CA 94555
-----------------
(Address of principal executive offices)
(510) 608-6500
--------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 20, 1999, Abgenix, Inc. ("Abgenix") signed several
agreements with JT America Inc. ("JT America") that became effective December
31, 1999 under which Abgenix acquired JT America's interest in
XenoMouse-Registered Trademark-, a technology which is useful for generating
fully human antibody drugs used in treating a wide range of diseases. Under
the agreements, Abgenix paid $47.0 million in cash to JT America for its
50.0% interest in Xenotech, Inc., and its interest in Xenotech, L.P.
("Xenotech"), a limited partnership owned 49.5% by Abgenix, 49.5% by JT
America and 1.0% by Xenotech, Inc. Xenotech was formed in 1991 by Abgenix'
former parent company, Cell Genesys, Inc., and JT Immunotech Inc., a
predecessor in interest to JT America Inc., to develop genetically modified
strains of mice, known as XenoMouse technology, that can produce fully human
monoclonal antibodies and to commercialize products generated from such mice,
Cell Genesys, Inc. assigned its interest in Xenotech to Abgenix upon Abgenix'
formation in 1996. In addition, part of the December 20, 1999 transaction,
Abgenix also paid $10.0 million as compensation to Japan Tobacco, Inc. ("JT")
for relinquishment of certain option and license rights it is currently
entitled to. The amount of consideration paid was determined in an
arms-length negotiation between the parties. Under the agreements, JT will
have a research license to use existing and future XenoMouse technology and
options to license the technology for a small number of antigen targets each
year for which JT paid to Abgenix $4.0 million. For all antibody products
generated using XenoMouse technology and developed by JT, JT will also make
license fee payments to Abgenix, as well as royalty payments on any product
sales under any product licenses. Abgenix also granted to JT other licenses
under related technology. In return for these licenses, JT paid Abgenix $6.0
million. JT also retained options to, or licenses on, several antigen targets
it had previously nominated under the former Xenotech structure.
The foregoing descriptions of the agreements are qualified in their
entirety to the text of the agreements, copies of which are attached hereto
as exhibits.
R. Scott Greer, President and Chief Executive Officer of Abgenix, and
Raymond M. Withy, Ph.D., Chief Business Officer of Abgenix, are also
directors of Xenotech, Inc.
A portion of the proceeds that Abgenix received from the sale of
1,778,000 shares of common stock at $42.00 per share in a private placement
conducted in November 1999 was used to pay JT America for the purchase of JT
America's interest in Xenotech, L.P. and JT's relinquishment of its option
and license rights.
2
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The financial statements and pro forma financial information are
filed herewith as follows:
(a) Audited financial statements of the business acquired as of
December 31, 1998 and 1997 and for the three years ended December
31, 1998 and the unaudited financial statements as of September
30, 1999 and for the nine month periods ended September 30, 1999
and 1998.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors
Xenotech, LP
We have audited the accompanying balance sheets of Xenotech, LP (a
development stage enterprise) as of December 31, 1997 and 1998, and the related
statements of operations, partners' capital and cash flows for each of the three
years in the period ended December 31, 1998 and for the period from inception
(June 12, 1991) to December 31, 1998. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Xenotech, LP (a development
stage enterprise) at December 31, 1997 and 1998 and the results of its
operations and its cash flows for each of the three years ended December 31,
1998 and for the period from inception (June 12, 1991) to December 31, 1998, in
conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Palo Alto, California
January 22, 1999
3
<PAGE>
XENOTECH, LP
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- SEPTEMBER 30,
1997 1998 1999
-------- -------- --------------
(UNAUDITED)
<S> <C> <C> <C>
Cash........................................................ $ 58 $ 94 $ 1,329
Short-term investments...................................... 3,750 -- --
Prepaid expenses and other current assets................... 11 11 --
Receivable from partners.................................... 3,750 114 15
-------- -------- --------
Total current assets.................................... $ 7,569 $ 219 $ 1,344
======== ======== ========
LIABILITIES AND PARTNERS' CAPITAL
Accrued liabilities......................................... $ 56 $ 67 $ 66
Payable related to cross-license and settlement agreement... 7,500 -- --
-------- -------- --------
Total current liabilities............................... 7,556 67 66
Partners' capital:
Paid-in capital........................................... 60,746 61,707 61,707
Deficit accumulated during the development stage.......... (60,733) (61,555) (60,429)
-------- -------- --------
Total partners' capital................................. 13 152 1,278
======== ======== ========
Total liabilities and partners' capital................. $ 7,569 $ 219 $ 1,344
======== ======== ========
</TABLE>
See accompanying notes.
4
<PAGE>
XENOTECH, LP
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD FROM
NINE MONTHS ENDED INCEPTION
YEAR ENDED DECEMBER 31, SEPTEMBER 30, (JUNE 12, 1991)
------------------------------ ------------------- TO SEPTEMBER 30,
1996 1997 1998 1998 1999 1999
-------- -------- -------- -------- -------- -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Research and license revenues
from partners................ $ 1,912 $ 272 $ 985 $ 310 $1,155 $ 12,444
Expenses:
Research and development..... 8,240 2,396 1,695 1,277 56 48,861
General and administrative... 307 98 82 73 (27) 1,694
Cross-license and settlement
expense.................... -- 22,470 30 -- -- 22,500
-------- -------- ------ ------- ------ --------
Total expenses............. 8,547 24,964 1,807 1,350 29 73,055
Interest income................ 21 12 -- -- -- 182
-------- -------- ------ ------- ------ --------
Net loss....................... $ (6,614) $(24,680) $ (822) $(1,040) $1,126 $(60,429)
======== ======== ====== ======= ====== ========
</TABLE>
See accompanying notes.
5
<PAGE>
XENOTECH, LP
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF PARTNERS' CAPITAL
(IN THOUSANDS)
<TABLE>
<CAPTION>
LIMITED PARTNERS
----------------------- TOTAL
GENERAL JAPAN PARTNERS'
PARTNER TOBACCO INC. ABGENIX CAPITAL
-------- ------------ -------- ---------
<S> <C> <C> <C> <C>
Balance at December 31, 1995......................... $ 19 $ 368 $ 368 $ 755
Capital contributed................................ 63 3,114 3,115 6,292
Net loss........................................... (66) (3,274) (3,274) (6,614)
----- -------- -------- --------
Balance at December 31, 1996......................... 16 208 209 433
Capital contributed................................ 230 12,015 12,015 24,260
Net loss........................................... (246) (12,217) (12,217) (24,680)
----- -------- -------- --------
Balance at December 31, 1997......................... -- 6 7 13
Capital contributed................................ 9 476 476 961
Net loss........................................... (9) (406) (407) (822)
----- -------- -------- --------
Balance at December 31, 1998......................... -- 76 76 152
Capital contributed (unaudited).................... -- -- -- --
Net income (unaudited)............................. 12 557 557 1,126
----- -------- -------- --------
Balance at September 30, 1999 (unaudited)............ $ 12 $ 633 $ 633 $ 1,278
===== ======== ======== ========
</TABLE>
See accompanying notes.
6
<PAGE>
XENOTECH, LP
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS PERIOD FROM
ENDED INCEPTION
YEAR ENDED DECEMBER 31, SEPTEMBER 30, (JUNE 12, 1999) TO
------------------------------ ------------------- SEPTEMBER 30,
1996 1997 1998 1998 1999 1999
-------- -------- -------- -------- -------- -------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)........................ $(6,614) $(24,680) $ (822) $(785) $1,126 $(60,429)
Adjustments to reconcile net loss to net
cash used in operating activities:
Charge for cross-license and
settlement........................... -- 7,485 -- -- -- 7,485
Depreciation and amortization
expense.............................. 74 8 -- -- -- 325
Changes in certain assets and
liabilities:
Decrease (increase) in prepaid and
other current assets............... 108 181 -- (231) 11 --
Decrease (increase) in receivable
from partner....................... 30 (3,750) 3,636 -- 99 (15)
Increase (decrease) in accrued
liabilities........................ (298) (3) 11 35 (1) 66
Decrease in deferred revenue......... (250) -- -- -- -- --
Increase (decrease) in payable for
cross-license settlement........... -- 7,500 (7,500) -- -- --
------- -------- ------- ----- ------ --------
Net cash used in operating
activities....................... (6,950) (13,259) (4,675) (981) 1,235 (52,568)
------- -------- ------- ----- ------ --------
CASH USED IN INVESTING ACTIVITIES
Capital expenditures..................... -- -- -- -- -- (325)
Purchases (sales) of short-term
investments............................ -- (3,750) 3,750 (145) -- --
------- -------- ------- ----- ------ --------
Net cash provided by (used in)
investing activities............. -- (3,750) 3,750 (145) -- (325)
------- -------- ------- ----- ------ --------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributions.................... 6,292 16,775 961 1,088 -- 54,222
------- -------- ------- ----- ------ --------
Net increase (decrease) in cash and
cash equivalents................. (658) (234) 36 (38) 1,235 1,329
Cash and cash equivalents at beginning of
period................................. 950 292 58 58 94 --
------- -------- ------- ----- ------ --------
Cash and cash equivalents at end of
period................................. $ 292 $ 58 $ 94 $ 20 $1,329 $ 1,329
======= ======== ======= ===== ====== ========
</TABLE>
See accompanying notes.
7
<PAGE>
XENOTECH, LP
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS
Xenotech, LP, a California limited partnership and a development stage
enterprise (the "Partnership"), was organized on June 12, 1991 pursuant to a
Limited Partnership Agreement between Xenotech, Inc. (the "General Partner"),
Cell Genesys, Inc. ("Cell Genesys") and JT Immunotech USA, Inc., the predecessor
company of JT America, Inc. and a medical subsidiary of Japan Tobacco, Inc.
("JT America"), (the "Limited Partners"), to develop genetically modified
strains of mice which can produce fully human monoclonal antibodies, and to
commercialize products generated therefrom. On July 15, 1996, Cell Genesys
transferred its partnership interest to its subsidiary, Abgenix Inc.
("Abgenix").
The General Partner must make cash contributions as necessary to maintain a
minimum capital balance of 1.0% of the total positive capital account balances
for the Partnership. Since July 1995, net losses are allocated 49.5% to Abgenix,
49.5% to JT America and 1.0% to the General Partner. Prior to July 1995,
operating expenses were allocated 99% to JT America and 1.0% to the General
Partner until JT America had been allocated, on a cumulative basis, partnership
losses and deductions in an amount equal to the sum of JT America's total
research support capital contributions and 50.0% of JT America's initial capital
contribution. Since 1992, interest income has been allocated 49.5% to Abgenix,
49.5% to JT America and 1.0% to the General Partner. No allocation of expenses
and losses shall create a deficit in the Limited Partners' capital accounts.
Such item, to the extent it would increase or create such a deficit, shall be
allocated 100% to the General Partner. Cash distributions are generally to be
made in accordance with the percentage interests.
See related discussion in Note 3--Related Party Transactions. See Note 6 for
a discussion regarding Abgenix's December 1999 acquisition of the 50% interest
in Xenotech, LP and Xenotech, Inc.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
Research revenues from partners or their affiliates are recorded when earned
as defined under the terms of the respective collaboration agreements. Payments
received in advance under these agreements are recorded as deferred revenue
until earned (see Notes 3 and 4).
DEPRECIATION
The Partnership depreciates equipment using the straight-line method over
the estimated useful lives of the assets, generally four years.
INCOME TAXES
The financial statements include no provision for income taxes as
Partnership income or loss is reported in the Partners' separate income tax
returns.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
8
<PAGE>
XENOTECH, LP
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. RELATED PARTY TRANSACTIONS
Abgenix provides contract research and development services to the
Partnership to develop genetically modified strains of mice, which can produce
fully human monoclonal antibodies pursuant to a collaboration agreement under
which Abgenix receives certain minimum payments. During the years ended 1996,
1997 and 1998, the Partnership paid Abgenix $1,200,000, $2,300,000, $1,656,000,
respectively ($42,856,000 for the period from inception to December 31, 1998) to
perform research.
In January 1994, the Partnership, Abgenix and JT America executed an
agreement creating the Xenotech Division within Abgenix to conduct ongoing
preclinical research of fully human monoclonal antibodies derived from the
genetically modified strains of mice. Abgenix and Japan Tobacco Inc. ("Japan
Tobacco"), the indirect parent company of JT America, are providing significant
funding to the Partnership for research funding and in consideration of the
Partnership granting marketing rights for specified products in certain
territories to Abgenix and Japan Tobacco (see Note 4). The Partnership
reimbursed Abgenix for the costs of the operation of the Xenotech Division.
During 1995 and 1996, the Partnership recognized expenses of $5,500,000 and
$5,500,000, respectively ($13,300,000 for the period from inception to
December 31, 1997) which were paid to Abgenix for the costs of operating the
Xenotech Division.
Pursuant to an agreement dated June 28, 1996, the Xenotech Division was
terminated as of December 31, 1996. In conjunction with this agreement, Xenotech
paid Abgenix $1,200,000 to satisfy Xenotech's obligations under the Xenotech
Division Research Agreement. In addition, Abgenix purchased Xenotech's capital
equipment at net book value, and was assigned Xenotech's note receivable, which
was reflected as a reduction of capital contributions.
4. RESEARCH REVENUES
The Partnership recorded research and license revenues of $4,747,000,
$1,912,000 and $272,000 and $985,000 for the years ended December 31, 1995,
1996, 1997 and 1998, respectively. The research revenues were derived from
research payments made by Japan Tobacco and Abgenix. Of research payments made
by Japan Tobacco and Abgenix, $250,000 was deferred revenue at December 31,
1995.
5. CROSS-LICENSE AND SETTLEMENT AGREEMENT
On March 27, 1997, Cell Genesys announced, along with Abgenix, Xenotech and
Japan Tobacco, that it had signed a comprehensive patent cross-license and
settlement agreement with GenPharm, International, Inc. ("GenPharm"), a
subsidiary of Medarex, Inc., that resolved all related litigation and claims
between the parties. As initial consideration for the cross-license and
settlement agreement, Cell Genesys issued a note to GenPharm due September 30,
1998 for $15,000,000 payable by Cell Genesys and convertible into shares of Cell
Genesys common stock. Of this note, $3,750,000 satisfied certain of Xenotech's
obligations under the agreement. Japan Tobacco also made an initial payment.
During 1997, two patent milestones were achieved and Xenotech was obligated to
pay $7,500,000 for each milestone. Xenotech paid $7,500,000 to satisfy the first
milestone and recorded a payable to GenPharm for the remaining $7,500,000, which
was paid in November 1998. No additional payments will accrue under this
agreement. Xenotech has recognized as a non-recurring charge for cross-license
and settlement, a total of $22,500,000.
9
<PAGE>
XENOTECH, LP
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. SUBSEQUENT EVENT
On December 20, 1999, Abgenix executed several agreements with Japan
Tobacco and JT America that became effective December 31, 1999 under which
Abgenix acquired JT America's interest in the XenoMouse, which is useful for
generating fully human antibody drugs used in treating a wide range of
diseases. Under the agreements, Abgenix paid $47.0 million in cash to JT
America for its 50% interest in the Xenotech joint venture under which the
XenoMouse technology was developed. Abgenix also paid $10.0 million as
compensation to Japan Tobacco for relinquishment of certain option and
license rights. Under the agreements, Japan Tobacco will have a research
license to use existing and future XenoMouse technology and options to
license the technology for a small number of antigen targets each year, for
which Japan Tobacco paid to Abgenix $4.0 million. For all antibody products
generated using XenoMouse technology and developed by Japan Tobacco, Japan
Tobacco will also make license fee payments to Abgenix as well as royalty
payments on any product sales under any product licenses. Abgenix also
granted to Japan Tobacco other licenses under related technology. In return
for these licenses, Japan Tobacco paid Abgenix $6.0 million. Japan Tobacco
also retained product licenses relating to several antigen targets it had
previously nominated under the former Xenotech structure. As of the date of
Abgenix's acquisition of Japan Tobacco's interest in Xenotech, Xenotech
became a wholly-owned subsidiary of Abgenix.
10
<PAGE>
ABENIX, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed financial statements are
presented for illustrative purposes only. These statements are not necessarily
indicative of Abgenix, Inc.'s our financial position or results of operations
for future periods or the results that actually would have been realized had the
acquisition and certain transactions (as defined below) occurred. The unaudited
pro forma condensed combined financial statements, including the notes thereto,
are based on and qualified in their entirety by reference to, and should be read
in conjunction with, the reported audited financial statements and unaudited
condensed combined financial statements of Abgenix and Xenotech and the notes
thereto, which are included elsewhere in this Prospectus.
The unaudited pro forma condensed financial statements give effect to the
Abgenix's acquisition of Japan Tobacco, Inc.'s 50% interest in the Xenotech
joint venture for $47.0 million in cash in December 1999.
The Abgenix Inc. unaudited pro forma condensed combined financial statements
give effect to the acquisition accounted for using the purchase method of
accounting. The unaudited pro forma condensed combined statements of operations
for the year ended December 31, 1998 and the nine months ended September 30,
1999 assumes the acquisition took place on January 1, 1998. The unaudited pro
forma combined condensed balance sheet assumes the acquisition took place on
September 30, 1999. These pro forma financial statements have been prepared on
the basis of assumptions described in the notes including preliminary
assumptions relating to the allocation of the purchase price paid. The actual
allocation of such purchase price may differ from those assumptions reflected in
the Abgenix, Inc. unaudited pro forma condensed combined financial statements
after valuations and other procedures are completed.
The unaudited pro forma condensed combined balance sheet also gives effect
to (i) Abgenix's sale of 1,778,000 shares of its common stock in a private
placement completed in November 1999 for aggregate net cash proceeds of
$71,073,000 and (ii) Abgenix's December 1999 purchase of 418,995 shares of
common stock of CuraGen Corporation for $15.0 million. These transactions have
been reflected in the unaudited pro forma condensed combined balance sheet as if
such transactions had occurred on September 30, 1999. These two transactions
have no effect on the unaudited pro forma condensed combined statement of
operations for the year ended December 31, 1998 or for the nine months ended
September 30, 1999.
11
<PAGE>
(b) Pro forma financial information for the year ended December 31,
1998 and as of September 30, 1999.
ABGENIX, INC.
UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1999
------------------------------------------------------------------------------
PRO FORMA ADJUSTMENTS
---------------------------------
AS REPORTED PURCHASE
----------------------------- CERTAIN OF INTEREST PRO FORMA
ABGENIX, INC. XENOTECH, LP TRANSACTIONS IN XENOTECH COMBINED
------------- ------------- --------------- --------------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........... $ 4,251 $ 1,329 $ 71,073(a) $ (47,000)(c) $ 14,653
$ (15,000)(b)
Marketable securities............... 51,612 -- -- -- 51,612
Prepaid expenses and other current
assets............................ 4,882 16 -- -- 4,898
-------- -------- --------- --------- ---------
Total current assets.............. 60,745 1,345 56,073 (47,000) 71,163
Property and equipment, net........... 4,992 -- -- -- 4,992
Intangible assets..................... -- -- -- 46,579(d) 46,579
Deposits and other assets............. 1,046 -- 15,000(b) (639)(e) 15,407
-------- -------- --------- --------- ---------
$ 66,783 $ 1,345 $ 71,073 $ (1,060) $ 138,141
======== ======== ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................... $ 712 $ 67 $ -- $ -- $ 779
Deferred revenue.................... 125 -- -- -- 125
Accrued product development costs... 926 -- -- -- 926
Other accrued liabilities........... 1,738 -- -- 218(f) 1,956
Current portion of long-term debt... 1,744 -- -- -- 1,744
-------- -------- --------- --------- ---------
Total current liabilities......... 5,245 67 -- 218 5,530
Long-term debt........................ 867 -- -- -- 867
Commitments
Stockholders' equity and partners'
capital:
Preferred stock, $.0001 per value;
5,000,000 shares authorized, none
outstanding
Common stock........................ 108,965 -- 71,073(a) -- 180,038
Partners' paid-in capital........... -- 61,707 -- (61,707)(g) --
Additional paid-in capital.......... 32,226 -- -- -- 32,226
Deferred compensation............... (795) -- -- -- (795)
Accumulated other comprehensive
loss.............................. (180) -- -- -- (180)
Accumulated deficit................. (79,545) (60,429) -- 60,429(g) (79,545)
-------- -------- --------- --------- ---------
Total stockholder's equity and
partners' capital............... 60,671 1,278 71,073 (1,278) 131,744
-------- -------- --------- --------- ---------
$ 66,783 $ 1,345 $ 71,073 $ (1,060) $ 138,141
======== ======== ========= ========= =========
</TABLE>
See accompanying notes.
12
<PAGE>
ABGENIX, INC.
UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
------------------------------------------------------
AS REPORTED
-------------------------- PRO FORMA PRO FORMA
ABGENIX XENOTECH, LP ADJUSTMENTS COMBINED
---------- ------------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues:
Revenue from collaborative agreements with
the Xenotech joint venture............... $ 1,344 $ -- $(1,344)(h) $ --
Research and license revenues from Abgenix
and Japan Tobacco........................ -- 985 (760)(h) 225
Contract revenue........................... 2,498 -- -- 2,498
---------- ------ ------- ----------
Total Revenues........................... 3,842 985 (2,104) 2,723
Operating expenses:
Research and development................... 17,588 1,725 (2,408)(h) 16,905
General and administrative................. 3,405 82 3,106 (i) 6,593
Equity in losses from the Xenotech joint
venture.................................. 107 -- (107)(j) --
---------- ------ ------- ----------
Total Operating expenses................. 21,100 1,807 591 23,498
---------- ------ ------- ----------
Operating loss............................... (17,258) (822) (2,695) (20,775)
Other income and expenses:
Interest income............................ (961) -- -- (961)
Interest expense........................... 530 -- -- 530
---------- ------ ------- ----------
Net loss..................................... $ (16,827) $ (822) $(2,695) $ (20,344)
========== ====== ======= ==========
Net loss per share........................... $ (3.00) $ (3.63)
========== ==========
Shares used in computing net loss per
share...................................... 5,602,963 5,602,963
========== ==========
</TABLE>
See accompanying notes.
13
<PAGE>
ABGENIX, INC.
UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
-------------------------------------------------
AS REPORTED
----------------------- PRO FORMA PRO FORMA
ABGENIX XENOTECH, LP ADJUSTMENTS COMBINED
-------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Research and license revenues from Abgenix and
Japan Tobacco................................... $ -- $1,155 $ (760)(h) $ 1,155
Contract revenue.................................. 5,390 -- -- 4,630
-------- ------ ------- --------
Total revenues.................................. 5,390 1,155 (760) 5,785
Operating expenses:
Research and development.......................... 14,371 29 (760)(h) 13,640
General and administrative........................ 3,428 -- 2,330 (i) 5,758
Equity in income from the Xenotech joint
venture......................................... (558) -- 558 (j) --
-------- ------ ------- --------
Total operating expenses........................ 17,241 29 2,128 19,398
-------- ------ ------- --------
Operating income (loss)............................. (11,851) 1,126 (2,888) (13,613)
Other income and expenses:
Interest income................................... (1,954) -- -- (1,954)
Interest expense.................................. 347 -- -- 347
-------- ------ ------- --------
Net income (loss)................................... $(10,244) $1,126 $(2,888) $(12,006)
======== ====== ======= ========
Net income (loss) per share......................... $ (0.73) $ (0.85)
======== ========
Shares used in computing net income (loss) per
share............................................. 14,049 14,049
======== ========
</TABLE>
See accompanying notes.
14
<PAGE>
ABGENIX, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 1 -- BASIS OF PRESENTATION
The Abgenix, Inc. ("Abgenix" or the "Company") unaudited pro forma condensed
combined financial statements give effect to the acquisition of Japan Tobacco,
Inc.'s 50% interest in the Xenotech joint venture for $47.0 million in cash. The
acquisition was accounted for using the purchase method of accounting. The
unaudited pro forma condensed combined statements of operations for the year
ended December 31, 1998 and the nine months ended September 30, 1999 assume the
acquisition took place on January 1, 1998. The unaudited pro forma condensed
combined balance sheet assumes the acquisition took place on September 30, 1999.
The pro forma financial statements have been prepared on the basis of
assumptions described in Note 2 including preliminary assumptions related to the
allocation of the purchase price. The actual allocation of such purchase price
may differ from those assumptions reflected in the pro forma condensed combined
financial statements after valuations and other procedures are completed.
The unaudited pro forma condensed combined balance sheet also gives effect
to the Company's sale of 1,778,000 shares of its common stock in a private
placement completed in November 1999 for aggregate net cash proceeds of
$71,073,000 and the Company's purchase of 418,595 shares of common stock of
CuraGen Corporation for $15.0 million in December 1999. These transactions have
been reflected in the unaudited pro forma condensed combined balance sheet as if
such transactions had occurred on September 30, 1999. These two transactions
have no effect on the unaudited pro forma condensed combined statement of
operations for the year ended December 31, 1998 or for the nine months ended
September 30, 1999.
Below is a table of the estimated acquisition cost, preliminary purchase
price allocation and annual amortization of the intangible assets acquired (in
thousands):
<TABLE>
<CAPTION>
ANNUAL
AMORTIZATION AMORTIZATION
LIVES (IN YEARS) OF INTANGIBLES
---------------- --------------
<S> <C> <C> <C>
Estimated acquisition cost:
Cash consideration..................... $47,000
Acquisition costs...................... 218
-------
Total estimated acquisition cost..... $47,218
=======
Purchase price allocation:
Tangible net assets acquired........... $ 639
Intangible net assets acquired......... 46,579 15 $3,106
------- ------
$47,218 $3,106
------- ------
</TABLE>
Tangible net assets acquired include cash of $640,000 and accrued
liabilities of $13,000. The Company's intangible assets consist of core
technology and goodwill. Management has not completed its allocation of the
purchase price between core technology and goodwill. For purposes of these pro
forma condensed combined financial statements, the Company has assumed the
intangible asset life of 15 years for both core technology and goodwill.
15
<PAGE>
ABGENIX, INC.
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 -- PRO FORMA ADJUSTMENTS
The Abgenix unaudited pro forma condensed combined financial statements give
effect to the following adjustments:
(a) To reflect the issuance of 1,778,000 shares of Abgenix common stock in
November 1999 for net proceeds of $71.1 million.
(b) To reflect the purchase of 418,995 shares of CuraGen Corporation common
stock in December 1999 for $15.0 million in cash.
(c) To reflect the cash consideration paid for the acquisition of the remaining
50% interest in the Xenotech joint venture.
(d) To reflect the intangible assets recorded as a result of the acquisition.
(e) To reflect the elimination of the intercompany investment account on the
Abgenix balance sheet.
(f) To reflect the accrual of acquisition costs arising from the acquisition.
(g) To reflect the elimination of Xenotech's accumulated deficit and partners'
paid-in capital balances.
(h) To eliminate the effect of intercompany transactions between Abgenix and
Xenotech.
(i) To record the effect of the amortization of intangible assets related to the
acquisition of the Xenotech joint venture using a 15 year life.
(j) To eliminate the amount recorded on Abgenix's statement of operations
related to its recognition of its equity share in the profits and losses of
the Xenotech joint venture prior to the acquisition of the Xenotech joint
venture.
16
<PAGE>
(c) Exhibits
EXHIBIT NO. DESCRIPTION
23.1 Consent of Ernst & Young LLP, Independent Auditors
99.1* Multi-Antigen Research License and Option Agreement by and
between Abgenix, Inc. and Japan Tobacco Inc. effective December
31, 1999.
99.2* Amended and Restated Field License by and among Abgenix,
Inc., JT America Inc. and Xenotech L.P. effective December 31,
1999.
99.3 Agreement to Terminate the Collaboration Agreement by and
among Abgenix, Inc., JT America Inc., and Xenotech L.P.
effective December 31, 1999.
99.4* Agreement to Terminate the Interest of Japan Tobacco Inc. in
the Master Research License and Option Agreement by and among
Abgenix, Inc., Japan Tobacco Inc. and Xenotech L.P. effective
December 31, 1999.
99.5* Amendment of the Expanded Field License by and among Abgenix,
Inc., JT America Inc. and Xenotech L.P. effective December 31,
1999
99.6 Limited Partnership Interest and Stock Purchase Agreement
between Abgenix, Inc. and JT America Inc. made December 20,
1999.
99.7* License Agreement by and between Abgenix, Inc. and Japan
Tobacco Inc. effective December 31, 1999.
*Confidential Treatment Requested.
17
<PAGE>
SIGNATURE
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 hereunto duly authorized.
ABGENIX, INC.
Date: January 28, 2000
By: /s/ R. Scott Greer
-- ------------------
R. Scott Greer
President and Chief Executive Officer
18
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 Nos. 333-66055 and 333-90707) pertaining to the 1996 Incentive
Stock Plan, the 1996 Employee Stock Purchase Plan, the 1998 Director Option
Plan of Abgenix, Inc. and the 1999 Nonstatutory Stock Option Plan and the
Registration Statements on Form S-3 (Nos. 333-82837 and 333-91699), of our
report dated January 22, 1999, with respect to the financial statements of
Xenotech, LP included in the Annual Report (Form 10-K) of Abgenix, Inc. for
the year ended December 31, 1998.
/s/ Ernst & Young, LLP
Palo Alto, California
January 27, 2000
<PAGE>
EXECUTION COPY
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
MULTI-ANTIGEN RESEARCH LICENSE AND OPTION AGREEMENT
This MULTI-ANTIGEN RESEARCH LICENSE AND OPTION AGREEMENT (this
"Agreement"), effective December 31, 1999 (the "Effective Date"), is made by
and between ABGENIX, INC., a Delaware corporation ("ABX") and JAPAN TOBACCO
INC., a Japanese corporation ("JTI") with reference to the following facts
and circumstances.
RECITALS
A. WHEREAS, in 1991, Cell Genesys, Inc. ("CGI") and JT Immunotech
USA Inc., a wholly-owned indirect subsidiary of JTI, formed Xenotech L.P.
("XT"), a California limited partnership, to develop and commercialize
products based upon human monoclonal antibodies derived from transgenic mice
("XenoMouse Animals," as further described herein);
B. WHEREAS, CGI assigned to ABX (its wholly-owned subsidiary at such
time), its interest in XT, and in 1997, JT Immunotech USA Inc. merged into JT
America Inc. ("JTA") (a wholly-owned subsidiary of JTI) and its interest in
XT was assigned to JTA through operation of law;
C. WHEREAS, JTA has agreed to sell to ABX its interest in XT
pursuant to the terms of a Limited Partnership Interest and Stock Purchase
Agreement of even date herewith;
D. WHEREAS, JTI desires to continue to use such XenoMouse Animals to
generate antibodies to certain antigens; and
E. WHEREAS, ABX is willing to grant to JTI, and JTI desires to
acquire from ABX, an option to enter into one or more license agreements with
ABX with respect to antibody products derived from immunization of XenoMouse
Animals with antigens selected by JTI, all as described fully below and on
the terms and conditions set forth herein.
NOW THEREFORE, for and in consideration of the covenants,
conditions, and undertakings hereinafter set forth, the Parties agree as
follows:
1. DEFINITIONS
For purposes of this Agreement, capitalized terms set forth in this
Agreement and not otherwise defined herein shall have the meaning set forth
in the Common Definitions Exhibit attached hereto as Exhibit A.
2. RESEARCH LICENSE; SUPPLY OF MICE; MATERIALS OWNERSHIP
2.1 RESEARCH LICENSE.
2.1.1 LICENSE GRANT.
(a) Subject to the terms and conditions of this
Agreement, ABX hereby grants to JTI, and the Majority-Owned Affiliates of
JTI, solely as needed to exercise the
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
rights that may be granted in accordance with Section 2.3.5, a paid-up,
non-exclusive license and/or sublicense of its rights, as the case may be,
under the Licensed Technology, without the right to grant further
sublicenses, to (i) [*] solely for use in the Research Field in connection
with activities described in subsections (ii) and (iii) of this Section
2.1.1, (ii) immunize such XenoMouse Animals solely with those Antigens that
are Permitted Antigens at the time of immunization and (iii) use the Research
Program Materials and Information solely for conducting research and
development work within the scope of the Research Field.
(b) Subject to the terms and conditions of this
Agreement, ABX hereby grants to JTI, and the Majority-Owned Affiliates of JTI
solely as needed to practice the rights that may be granted in accordance
with Section 2.3.5, a paid-up, non-exclusive license and/or sublicense, as
the case may be, of its rights in the ABX Materials and Information and all
intellectual property rights Controlled by ABX related thereto that are not
licensed to JTI pursuant to the license in subsection (a) above, solely to
the extent that the ABX Materials and Information are necessary or useful to
JTI's practice of the license granted in subsection (a) above.
2.1.2 LIMITATIONS.
(a) At such time as any Permitted Antigen becomes
a Product Antigen under the terms and conditions of this Agreement (i.e. JTI
has exercised its Option with regard to such Permitted Antigen as further
described in Section 3.4), the research licenses and/or sublicenses described
above shall become exclusive licenses and/or sublicenses with respect to such
Product Antigen as set forth herein. The license and/or sublicense rights
granted under Section 2.1.1 shall terminate with regard to a particular
Permitted Antigen on the effective date of a Product License Agreement, if
any, between ABX and JTI relating to such Permitted Antigen. The Parties
acknowledge that, notwithstanding any license or sublicense from ABX to JTI
of ABX's rights within the Research Field under this Agreement, the rights
granted to ABX by ABX's licensors may not be exclusive.
(b) JTI shall practice the licenses granted to it
pursuant to Section 2.1 solely at its facility in Yokohama, Japan and/or
another facility in Japan that is owned by or under the control of JTI.
(c) JTI shall not, and shall ensure that its
Affiliates do not, use the Licensed Technology or ABX Materials and
Information for any purpose other than is expressly permitted under this
Section 2.1. Without limiting the generality of the foregoing, JTI shall not,
and shall ensure that its Affiliates do not, immunize any XenoMouse Animal
with any Excluded Antigen.
2.1.3 NO OTHER RIGHTS. No implied licenses or rights are
conveyed to JTI hereunder. JTI shall only be authorized to use the ABX
Materials and Information and the materials derived in whole or part from the
XenoMouse Animals (including without limitation Antibodies) solely as
expressly provided in this Article 2.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
2.2 USE OF XENOMOUSE ANIMALS AND ABX MATERIALS AND INFORMATION.
2.2.1 XENOMOUSE ANIMALS.
(a) Subject to the terms and conditions of this
Agreement, JTI and Majority-Owned Affiliates of JTI, solely as needed to
practice any rights that may be granted in accordance with Section 2.3.5,
shall have the right, but not the obligation, to maintain the [*] JTI shall
use such XenoMouse Animals (the "Original Strains"), and any other XenoMouse
Animals it acquires pursuant to this Agreement, solely for the purposes set
forth in this Agreement in accordance with the terms hereof.
(b) If JTI elects not to continue to maintain the
XenoMouse Animals included on Schedule 2 to Exhibit A, JTI shall either
return such XenoMouse Animals to ABX or destroy such XenoMouse Animals, as
ABX in its sole discretion may direct.
2.2.2 CERTAIN STRAINS. As soon as practicable following the
Effective Date, ABX shall transfer to JTI [*] as provided on Schedule 2 of
Exhibit A. In addition, as soon as ABX has developed the [*] described on
Schedule 2 of Exhibit A and has [*] ABX shall provide to JTI sufficient
quantities of such [*] together with appropriate quantities of [*]
2.2.3 NEW STRAINS. If ABX develops and has reasonably
available for licensing and shipment to JTI a strain of transgenic mice that
produces human antibodies, which strain was not included on Schedule 2 to
Exhibit A on the Effective Date (a "New Strain," provided that a "New Strain"
shall not include any transgenic mice that, irrespective of whether such mice
produce human antibodies, are developed principally for one or more uses
other than the generation of human antibodies (i.e., as a model to study
diseases or conditions)), then ABX shall inform JTI of the availability of
such New Strain and discuss with JTI whether JTI desires to obtain a license
to use such transgenic animals from the New Strain to maintain in [*] in
accordance with Section 2.2.1. In such event, the Parties shall negotiate in
good faith appropriate terms and conditions of an amendment to this Agreement
pursuant to which JTI may receive a certain number of animals from the New
Strain. If JTI chooses to receive animals from the New Strain and the Parties
execute such an amendment, then ABX shall provide JTI with a reasonable
number of [*] from the New Strain, any such animals shall be added to
Schedule 2 to Exhibit A, and JTI's use of such New Strain animals shall be
subject to the terms and conditions of this Agreement, including without
limitation Section 2.2.1. In the event that JTI and ABX execute such an
amendment to this Agreement, (a) JTI shall agree to be bound by all other
obligations, terms or conditions imposed by ABX upon the New Strain,
including without limitation any reporting, indemnification, use restrictions
or diligence requirements; (b) any New Strain Intellectual Property shall
become part of the Licensed Technology; and (c) ABX shall modify Exhibit B to
reflect New Strain Intellectual Property, if any, with respect to such New
Strain.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
Notwithstanding anything to the contrary in this Agreement, ABX shall not be
obligated to develop any New Strains.
2.2.4 LIMITATIONS. JTI shall not sell, have sold,
(sub)license, assign, lease, or offer to sell, (sub)license, assign or lease,
otherwise transfer title to, or distribute, commercialize or clinically
develop any Antibody, ABX Materials and Information, Product or materials
derived from XenoMouse Animals (or Genetic Materials encoding the foregoing)
without first entering into a Product License Agreement with ABX that covers
such materials; provided that prior to execution of a Product License
Agreement, JTI may provide to a Third Party subcontractor amounts of a given
Antibody solely for such Third Party to use such Antibody in an assay that
determines the functional activity thereof, provided that such subcontractor
has executed an agreement providing restrictions on use of and access to such
Antibody consistent with this Article 2.
2.2.5 SUPPLY OF XENOMOUSE ANIMALS IN CERTAIN CIRCUMSTANCES.
Each Party agrees to transfer [*] XenoMouse Animals [*] in the event that
such [*] such XenoMouse Animals are [*] provided that the transferring Party
shall not be required to provide such [*] the other Party if doing so would
require efforts that are not commercially reasonable. Such [*] will be
provided to a Party without charge, except that the Party [*] shall [*]
XenoMouse Animals.
2.3 MATERIAL TRANSFER TERMS.
2.3.1 JTI shall use all ABX Materials and Information
solely in accordance with the terms and conditions of this Agreement.
2.3.2 The transfer of physical possession of any ABX
Materials and Information to JTI by ABX, and the physical possession and use
of such ABX Materials and Information by JTI, shall not be (nor shall be
construed as) a sale, lease, offer to sell or lease, or other transfer of
title of such ABX Materials and Information to JTI.
2.3.3 JTI shall use the ABX Materials and Information and
all materials derived from the ABX Materials and Information (including
without limitation Research Program Materials and Information and Products)
in compliance with all applicable national, state, and local laws and
regulations, including without limitation all applicable National Institutes
of Health guidelines. JTI acknowledges that the ABX Materials and
Information, and all materials derived from the ABX Materials and Information
(including without limitation Products), are experimental in nature and may
have unknown characteristics. JTI shall use reasonable prudence and care in
the use, handling, storage, transportation, disposition and containment of
the ABX Materials and Information and all materials derived from the ABX
Materials and Information (including without limitation Products). Except as
otherwise permitted under a Product License Agreement, neither JTI nor its
respective Affiliates or permitted transferees shall (nor shall JTI or
permitted transferees attempt or purport to) administer any (a) Research
Program Materials and Information or Products to humans, or (b) file or
submit any regulatory application or other
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
submission to obtain regulatory approval therefor. JTI shall not (and shall
not attempt or purport to) administer any ABX Materials and Information to
humans, or file or submit any regulatory application or other submission to
obtain regulatory approval therefor.
2.3.4 Unless otherwise agreed by ABX in advance in writing,
all XenoMouse Animals delivered to JTI shall be delivered to JTI's research
facility located in Yokohama, Japan or another facility in Japan owned by
and/or under the control of JTI or a Majority-Owned Affiliate of JTI, to the
extent permitted under Section 2.3.5, and such XenoMouse Animals shall not be
moved from or allowed to leave such facility (except for the return of
XenoMouse Animals to ABX or upon destruction of the XenoMouse Animals by JTI).
2.3.5 JTI shall not: (i) transfer XenoMouse Animals to any
Third Party or Affiliate of JTI, other than a Majority-Owned Affiliate that
agrees in writing to be bound by the obligations of confidentiality, non-use,
and restrictions on transfer set forth in this Agreement; nor (ii) sell, have
sold, sublicense, assign, lease, offer to sell or lease, assign or otherwise
transfer title to any XenoMouse Animal to any Third Party or Affiliate of
JTI; except that JTI may provide XenoMouse Animals to the institutions listed
on Exhibit D ("Permitted Transferees") pursuant to written agreements with
each such institution providing restrictions on the transfer and use of and
access to such XenoMouse Animals consistent with those provided under this
Agreement; provided however that any such agreement between JTI and a
Permitted Transferee shall provide for an allocation of intellectual property
rights covering inventions made by such Permitted Transferee using such
XenoMouse Animals consistent with the rights granted to ABX by JTI pursuant
to this Agreement and any Product License Agreements, including without
limitation Section 5.7.3 of this Agreement and Section 6.13 of any Product
License Agreements.
2.4 NO RESEARCH BY ABX. It is understood that, except as the Parties
may otherwise agree in writing, ABX shall not be responsible for conducting
any research and development activities in connection with the creation,
research and development of Products, including without limitation:
immunizations of XenoMouse Animals with Antigens or Product Antigens,
screening of Antibodies generated from such immunizations, creation of
Antibody Cells, production of Antibodies to the Antigens or Product Antigens,
or preclinical evaluation of Antibodies to the Antigens or Product Antigens.
2.5 THIRD PARTY RIGHTS. It is understood and agreed that (i) the
grant of rights under this Article 2 shall be subject to and limited in all
respects by the terms of the applicable ABX In-License(s) pursuant to which
ABX has acquired or may acquire any Licensed Technology, including, without
limitation, any rights granted to or retained by GenPharm International, Inc.
under the GenPharm Cross License Agreement, and (ii) all rights or
sublicenses granted under this Agreement shall be effective only to the
extent that ABX shall have the right to grant such rights and sublicenses
under such ABX In-Licenses.
2.6 UPDATED LISTS OF [*] ABX shall provide JTI with
written updates to the list of [*] set forth in [*] at
least semiannually. If JTI notifies ABX that, prior to its receipt of such
updated list, JTI performed research and development work with respect to an
Antigen that was deemed a Permitted Antigen at the time that such work was
performed, but has become an [*] and JTI Controls any
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
patents or patent applications covering such Antigen, then the Parties shall
discuss in good faith possible mechanisms under which JTI may collaborate
either with ABX or a Third Party, as applicable, to develop Products binding
to such [*]; PROVIDED THAT neither JTI, ABX nor such Third Party shall have
any obligation to enter into any agreement with respect thereto.
3. OPTION TO ENTER INTO PRODUCT LICENSE AGREEMENT
3.1 OPTION. Subject to the terms and conditions set forth in this
Agreement, ABX hereby grants to JTI an exclusive option (an "Option") to
enter into a Product License Agreement with respect to those Permitted
Antigens which have been designated as Product Antigens, as further described
in Section 3.2. Each calendar year during the term of this Agreement, JTI may
obtain up to [*] with respect to Product Antigens, pursuant to the procedures
set forth in this Article 3.
3.2 DESIGNATION OF PRODUCT ANTIGENS.
3.2.1 NOTICE. For each Permitted Antigen for which JTI
desires to obtain an Option, JTI shall provide ABX with written notice (each
such notice an "Option Notice") stating that JTI desires to obtain an Option
with respect to such Permitted Antigen and identifying in reasonable detail
such Permitted Antigen.
3.2.2 ABX REVIEW.
(a) Within thirty (30) days of receiving an Option
Notice from JTI (the "Review Period"), ABX shall notify JTI in writing as to
whether any of the conditions set forth in this Section 3.2.2 (each such
condition, an "Impediment") exist as of the date upon which ABX receives the
Option Notice with respect to each Permitted Antigen which is the subject of
such Option Notice, and shall represent the same in such notice. In such
event, ABX shall provide to JTI a reasonable description of such Antigen,
such Impediment and the date upon which such Impediment arose; PROVIDED THAT
in the event that ABX reasonably believes that such a disclosure may cause
ABX to breach a confidentiality obligation, the Parties shall discuss in good
faith a reasonable resolution to such situation. If ABX notifies JTI that an
Impediment exists with respect to the Permitted Antigen that is the subject
of the Option Notice, JTI shall not have the right to obtain an Option for
such Permitted Antigen. Impediments are as follows:
(i) The Permitted Antigen identified by JTI is
not available to JTI for an Option because:
(1) ABX is a party to an existing
exclusive product license agreement with a Third Party with respect to such
Permitted Antigen; or
(2) ABX has granted an option to a Third
Party to acquire a license to such Permitted Antigen, or is [*] with respect
to such Permitted Antigen; or
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
(3) ABX or its Affiliates are, at the time
such Option Notice is given, engaged in good faith discussions with a Third
Party whereunder ABX or its Affiliates may grant to such Third Party an
exclusive license or option to obtain an exclusive license with respect to
such Permitted Antigen, [*] relating to such Permitted Antigen;
(ii) Such Permitted Antigen is claimed or
disclosed in an issued U.S. patent or a pending U.S. patent application,
which U.S. patent or application is Controlled by ABX and contains one or
more claims to the following: (1) [*] (2) [*] (3) [*] (4) [*] and [*] and
(5) [*] or
(iii) ABX or its Affiliates have already
initiated an active research program (either internally or externally with a
Third Party) regarding such Permitted Antigen, have immunized XenoMouse
Animals with such Permitted Antigen [*] of a XenoMouse Animal with such
Permitted Antigen) and are diligently pursuing such research program (either
internally or externally).
(b) If ABX notifies JTI that an Impediment exists
under subsection (a)(i) above because of rights ABX granted to, or
negotiations ABX is then conducting with a Third Party, then JTI may, in its
sole discretion, request in writing that ABX notify such Third Party that JTI
would be interested in discussing the terms of an agreement between JTI and
such Third Party with respect to development of Products binding to the
Permitted Antigen for which such Impediment exists. Following ABX's receipt
of such request, ABX shall contact such Third Party on JTI's behalf and shall
disclose to such Third Party JTI's interest in discussing such a licensing
arrangement. JTI agrees that such a disclosure by ABX shall not be deemed a
breach of any confidentiality obligations of ABX under this Agreement.
Nothing in this subsection (b) shall obligate JTI, ABX or such Third Party
to enter in any such agreement.
(c) If ABX notifies JTI that an Impediment exists
under subsection (a)(ii) above, and JTI Controls a patent or patent
application, whether U.S. or otherwise, containing one or more claims
described in subsection (a)(ii), then upon JTI's written request, the Parties
shall discuss in good faith possible mechanisms under which JTI and ABX may
collaborate to develop Products binding to such [*] Nothing in this
subsection (c) shall obligate either Party to enter into any agreement with
the other Party with respect to such a collaboration or to grant a license to
the other Party under such patents or patent applications.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
(d) If ABX notifies JTI that an Impediment exists
under subsection (a)(iii) above, then upon JTI's written request, the Parties
shall discuss in good faith possible mechanisms under which JTI and ABX may
collaborate to develop Products binding to such [*] Nothing in
this subsection (d) shall obligate either Party to enter into any agreement
with the other Party with respect to such a collaboration or to grant a
license to the other Party under such patents or patent applications.
3.2.3 ACCEPTANCE BY ABX. Upon the first to occur of (a) ABX
giving notice to JTI that no Impediment exists with respect to the Permitted
Antigen identified in the Option Notice (an "Acceptance Notice"), or (b)
expiration of the Review Period if ABX does not notify JTI of an Impediment
prior to such expiration, then ABX shall be deemed to have granted to JTI an
Option with respect to such Permitted Antigen, and the Permitted Antigen
which is subject of such Option shall be designated a "Product Antigen."
3.2.4 ACKNOWLEDGEMENT. JTI acknowledges and agrees that ABX
currently has entered into, and may hereafter enter into, agreements with
Third Parties granting such Third Parties rights to obtain an option or
license to one or more Antigens, and that JTI therefore may be unable to
obtain an Option with respect to any particular Antigen, regardless of the
research and development activities that it undertakes hereunder with respect
to such Permitted Antigen.
3.2.5 LIMITATIONS ON ABX.
(a) Upon a Permitted Antigen being designated a
Product Antigen pursuant to Section 3.2.3, ABX shall cease any research or
development it may be conducting with respect to such Product Antigen. ABX
shall not conduct any research or development with respect to such Antigen
for so long as such Antigen remains designated as a Product Antigen.
(b) Following the designation of a Permitted
Antigen as a Product Antigen pursuant to Section 3.2.3, ABX agrees not to
file any patent application claiming an Antigen Invention for such Product
Antigen for so long as such Antigen remains designated as a Product Antigen.
In the event that ABX has filed a patent application claiming an Antigen
Invention for such Product Antigen prior to its designation as a Product
Antigen hereunder, such patent application and any patents issuing therefrom
shall be deemed to be included within the ABX Patent Rights, but only for so
long as such Antigen remains a Product Antigen.
3.2.6 REMOVAL OF IMPEDIMENTS. If ABX notifies JTI that one
or more Impediments exist with respect to a Permitted Antigen, then if and
when all such Impediments cease to exist ABX shall promptly so notify JTI,
and JTI may subsequently seek to have such Permitted Antigen designated a
Product Antigen pursuant to this Section 3.2.
3.3 CONDITIONS OF OPTIONS.
3.3.1 TERM OF OPTIONS. With respect to [*] Option, the
term of such Option shall begin on the earlier of (a) the date that JTI
receives the Acceptance Notice for the Permitted Antigen that is the subject
of the corresponding Option Notice, or (b) the date of expiration of the
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
Review Period for such Permitted Antigen, and shall expire upon the first
anniversary of such date, unless earlier terminated by JTI by written notice
to ABX.
3.3.2 EXCLUSIVITY. During the term of an Option with
respect to a Product Antigen, ABX shall not, itself or through a Third Party,
cause or allow any Impediment described in Section 3.2.2 above to arise with
respect to such Product Antigen.
3.3.3 EFFECT OF EXPIRATION OF OPTION. If an Option with
respect to a Product Antigen expires or terminates prior to JTI's exercise of
an Option under Section 3.4 with respect to such Product Antigen, then: (a)
such Product Antigen shall cease to be a Product Antigen for purposes of this
Agreement, (b) JTI shall have no right to exercise its Option for such
Product Antigen (unless re-nominated as provided in the following sentence),
and (c) ABX shall have no further obligations to JTI with respect to such
Product Antigen. If the term of an Option for a Product Antigen expires
during the term of this Agreement, then JTI shall have the right to nominate
such former Product Antigen again to obtain an Option therefor on the terms
and conditions of this Agreement by following the Product Antigen designation
procedures set forth in Section 3.2; PROVIDED THAT any such Option that JTI
obtains for a Product Antigen for which its Option expired or terminated
previously shall be counted as one of the [*] under Section 3.1.
3.4 EXERCISE. JTI may exercise each of its Options in accordance
with the following provisions:
3.4.1 EXERCISE NOTICE; TIMING OF NOTICE. JTI may exercise
each Option at any time during the term of such Option by giving ABX express
written notice stating that JTI is exercising such Option (the "Exercise
Notice").
3.4.2 PRODUCT LICENSE AGREEMENT. Within thirty (30)
business days after ABX receives the Exercise Notice for an Option, ABX and
JTI shall enter into a Product License Agreement with respect to the
applicable Product Antigen. ABX shall invoice JTI for the License Fee due
therefor on or following the date that such Product License is so executed,
and JTI shall pay such invoice within thirty (30) days of receipt. If JTI
fails to timely pay to ABX the License Fee for such Product License Agreement
(subject to any applicable cure provision), then the applicable Product
License Agreement shall terminate and ABX shall have no further obligation to
JTI regarding such Product License Agreement or such Product Antigen.
4. CONSIDERATION
4.1.1 PAYMENT. JTI shall pay to ABX four million dollars
(U.S. $4,000,000) on January 20, 2000 in consideration for the grant of
rights and undertaking of obligations by ABX hereunder. With respect to the
[*] (i) all [*] by a [*] shall be the sole responsibility of [*] (ii) [*]
shall [*] from the [*] pursuant to [*] as [*] by [*] and shall [*] such [*]
to the [*] on [*] (iii) [*] shall timely provide to [*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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of any [*] hereunder; and (iv) [*] shall reasonably cooperate and assist [*]
in [*] which it is entitled to [*]
5. INTELLECTUAL PROPERTY
5.1 MATERIALS AND DATA.
5.1.1 [*] shall solely own all [*] Subject to Section [*]
shall solely own all [*]
5.1.2 Notwithstanding any other provision of this
Agreement, any [*] and/or [*] from [*] by or on [*] using the [*] the [*] of
the [*] to [*] pursuant to Section [*] shall be included in the [*] The
foregoing shall be [*] and [*] for [*] of [*] the [*] of the [*] to [*]
pursuant Section [*] unless [*] of [*] of such [*] in which event the
foregoing shall not be [*] to [*] any [*] to [*] at [*] with respect.
5.2 [*] INTELLECTUAL PROPERTY. [*] shall own all right, title and
interest in and to the [*] and all intellectual property related thereto.
5.3 [*] INTELLECTUAL PROPERTY. [*] shall own all right, title and
interest in and to the [*] and all intellectual property related thereto.
5.4 INTELLECTUAL PROPERTY CONCERNING OTHER INVENTIONS. Except as
otherwise provided in Sections 5.1 through 5.3, title to any inventions (and
to any patent applications, patents and other intellectual property rights
related thereto) made by a Party or Parties under this Agreement, shall
follow inventorship, which shall in turn be determined in accordance with the
United States laws of inventorship and probative evidence of the Parties.
5.5 JOINT OWNERSHIP. For purposes of clarification, to the extent
that intellectual property is jointly owned under this Agreement, both
Parties shall have the right to use, commercialize, grant and authorize
sublicenses, and otherwise exploit all such jointly-owned intellectual
property without obligation to account to, or obtain the consent of, the
other joint owner. Each Party agrees to promptly disclose to the other Party
all jointly-owned inventions under this Agreement and, on written request of
the other Party, will provide such information and assistance as may be
reasonably necessary to assist in the filing and prosecution of patent
applications claiming such inventions. The Parties hereto agree to ensure
that each employee, agent, or independent contractor that conducts research
on behalf of a Party pursuant to this Agreement will promptly disclose and
assign to the Parties as joint owners any and all rights to jointly-owned
inventions. Each Party agrees to maintain records in sufficient detail and in
good scientific manner appropriate for patent purposes and so as to properly
reflect all work done and results achieved in performing research under this
Agreement.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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5.6 COOPERATION. Each Party shall perform all reasonable acts
necessary or useful to effect the intent of this Article 5, including without
limitation preparing and executing documentation for the assignment to the
other Party of its right, title and interest in and to a given invention and
related intellectual property rights if required hereunder. If a Party is
unable, after reasonable effort, to secure the signature of any employee,
agent or independent contractor of the other Party necessary to record,
register or perfect such Party's interest in a given invention and related
intellectual property right, then such other Party shall, and hereby does,
appoint the Party owning such invention or intellectual property right as its
agent and attorney-in-fact to do all lawfully permitted acts necessary in
connection therewith with the same legal force and effect as if executed by
such other Party.
5.7 PATENT PROSECUTION.
5.7.1 SOLELY OWNED.
(a) The Party solely owning any invention or
intellectual property under this Article 5 shall have the sole right and
responsibility (but not the obligation), at its expense, to file, prosecute
and maintain all patent applications and patents thereon, and to conduct any
interferences, oppositions, or reexaminations with respect thereto, and to
request any reissues or patent term extensions thereof, subject to
subsections (b) and (c) below.
(b) Notwithstanding subsection (a) above, ABX shall
endeavor to obtain the strongest commercially reasonable patent protection
(under the circumstances) regarding those claims that are contained in the
patents and patent applications within the ABX Patent Rights and that cover
JTI's use of XenoMouse Animals under this Agreement (the "Relevant Claims").
To this end, ABX shall have the responsibility to prepare, file, prosecute
and maintain patents and patent applications within the ABX Patent Rights
containing such Relevant Claims in at least Japan, each of the Designated
European Countries (as defined below) and the United States, and to conduct
any interferences, oppositions, reissuance requests and reexaminations with
respect to such Relevant Claims. No less than annually, ABX shall provide JTI
with an updated copy of Schedule 3 to Exhibit A, setting forth material
changes to the ABX Patent Rights.
(i) To the extent that, in the course of
filing or prosecuting patent applications containing Relevant Claims,
ABX intends to undertake or refrain from undertaking an action that will
result in a material adverse effect to the scope of the patent protection
arising from the Relevant Claims within the United States, each of the
Designated European Countries, or Japan, ABX shall promptly inform JTI of
such intended action. In such case, the Parties will confer upon the best
course of action and, using commercially reasonable efforts, effect the
same. The Parties agree that, in connection with a determination of the
best course of action, protection of exclusivity with respect to the
manufacture, use, sale and import of Products shall be the primary criteria
used in making such determination.
(ii) After one or more Relevant Claims
are granted or issued in the United States, any of the Designated European
Countries or Japan, if ABX intends to undertake or refrain from
undertaking an action in such country (A) in the course of maintaining such
Relevant Claims, (B) in connection with the conduct of any interferences,
oppositions, or reexaminations with respect to such Relevant Claims, or
(C) in connection with requesting reissues of such Relevant Claims that
will result in the admission of invalidity or unenforceability of, or in
the abandonment of, any then-existing Relevant Claims in all issued
patents within the ABX Patent Rights in such country, then ABX shall
promptly inform JTI of such intended action. If JTI does not agree with
such course of action, then JTI shall have the right to assume the activity
described in subclauses (A), (B) or (C) above in such country with respect
to such Relevant Claims, in which case JTI shall have the right to offset
all reasonable, documented costs and expenses incurred in connection
with the assumption of such activity
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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against royalties due to ABX on Net Sales of Products covered by such
Relevant Claims in such country under Section 3.2 or 3.7 of any Product
License Agreement, until it offsets all such costs and expenses; PROVIDED,
HOWEVER, that in no event shall the royalty due to ABX on such sales of
such Products in such country be reduced to less than fifty percent
(50%) of the royalty that would otherwise be due to ABX pursuant to such
Sections. To the extent that any costs and expenses incurred by JTI
pursuant to this subsection (ii) are not fully offset by a reduction in
the royalties paid by JTI with respect to such Product in such country for
any calendar quarter under the applicable Product License Agreement,
JTI shall be entitled to carry forward the amount not so covered to
subsequent quarters, and to offset such amount against subsequent royalties
due to ABX under such Product License Agreement with respect to such
Product in such country until the full amount of such costs and expenses is
offset.
(iii) ABX shall be entitled to conduct
activities under this Section 5.7.1(b) with respect to any Designated
European Country by communicating or filing documents with either a
supranational patent authority or a patent authority in an individual country
directly. For purposes of this Section 5.7.1(b), the "Designated European
Countries" shall mean all countries that are signatories to the European
Patent Convention.
(iv) JTI's sole and exclusive remedy for
any failure by ABX to prepare, file, prosecute and maintain any patents and
patent applications with respect to the ABX Patent Rights and to conduct any
interferences, oppositions, and reexaminations of the ABX Patent Rights under
this Section 5.7.1(b) shall be to exercise its step-in rights set forth in
subsections (i) and (ii) above.
(c) Notwithstanding subsection (a) above, if JTI
discontinues the prosecution or maintenance of a patent application or patent
covering an invention relating to Research Program Materials and Information
(or the conduct of any interferences, oppositions, or reexaminations thereon,
or the request for any reissues or patent term extensions thereof), it shall
promptly so notify ABX, and ABX, at its expense and in its discretion, may
undertake such activity with respect to such patent application or patent
thereon.
5.7.2 JOINTLY OWNED.
(a) JTI shall have the first right and responsibility
(but not the obligation), at its expense, to file, prosecute and maintain all
patent applications and patents (and to conduct any interferences,
oppositions, or reexaminations thereon, and to request any reissues or patent
term extensions thereof) claiming any invention that is jointly-owned by the
Parties in accordance with Section 5.5 (a "Joint Invention") and/or its
development, manufacture, use or sale.
(b) In connection with the activities of JTI described
Section 5.7.2(a), JTI shall: (i) provide ABX any patent application filed by
JTI that covers a Joint Invention promptly after such filing; (ii) provide to
ABX promptly copies of all substantive communications received from or filed
in patent office(s) with respect to such filings; (iii) notify ABX of any
interference, opposition, reexamination request, nullity proceeding, appeal
or other inter-party action and review such action with ABX as reasonably
requested; and (iv) notify
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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ABX if JTI intends to take or refrain from taking any action that would
substantially affect the scope or validity of, or rights under, such patent
applications or patents thereon (including substantially narrowing or
canceling any claim without reserving the right to file a continuing or
divisional application, abandoning any patent or not filing or perfecting the
filing of any patent application) reasonably advance of any deadlines
relating thereto so that ABX has a reasonable opportunity to review and make
comments thereon.
(c) The Parties shall equally bear all expenses of
filing, prosecuting and maintaining all patent applications or patents on
Joint Inventions (and of conducting any interferences, oppositions, or
reexaminations thereon, and requesting any reissues or patent term extensions
thereof), subject to Section 5.7.2(d).
(d) If JTI (i) fails to undertake the filing of a patent
application (or continuing or divisional application) covering a Joint
Invention within ninety (90) days after a written request from ABX to do so,
(ii) intends to discontinue the prosecution or maintenance of a patent
application or patent covering a Joint Invention, or (iii) fails to initiate
or abandons a then-ongoing interference, opposition, or reexamination with
respect to any such patent application or patent or a request for any reissue
or patent term extension thereof, then ABX, at its expense and in its
discretion, may undertake the foregoing activities, in which case such patent
application and patent thereon shall be solely owned by ABX, and JTI
automatically shall be deemed to have assigned all right, title and interest
in and to such patent to ABX. JTI shall promptly notify ABX if it determines
that it will not file a patent application covering a Joint Invention or if
it intends to, or does, discontinue prosecution and maintenance of patent
applications and patents covering a Joint Invention. The Parties shall assist
each other to the extent commercially reasonable in securing intellectual
property rights resulting from Joint Inventions hereunder.
(e) The Parties shall consult with each other in good
faith as to the best manner in which to proceed with respect to the
enforcement of jointly-owned patents, including the conduct of actions
against an alleged infringer. In the case of such actions against alleged
infringers, any recovery awarded shall be first used to reimburse the costs
and expenses (including reasonable attorneys' fees) of the Parties in the
action, and thereafter applied to reimburse ABX for any amounts ABX is
obligated to pay to Third Parties (if any) in respect of such amount pursuant
to the applicable ABX In-Licenses, with the remainder for the account of the
Party or Parties that undertake such actions to the extent of their financial
participation therein; PROVIDED, HOWEVER, that to the extent that damages are
awarded for lost sales or lost profits from the sale of Products, such
damages shall be allocated among the Parties taking into account royalties
that would have been payable to ABX on the sale of such Products.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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5.7.3 GRANT BACK.
(a) JTI hereby grants to ABX a non-exclusive,
fully paid-up, perpetual, sublicensable, worldwide license to any and all
intellectual property rights Controlled by JTI claiming or covering Antigen
Inventions arising out of JTI's activities under this Agreement with respect
to Permitted Antigens (excluding Product Antigens, but only for so long as
such Antigens remain Product Antigens), including, but not limited to,
Antibodies to such Permitted Antigen, Antibody Cells that express such
Antibodies and Genetic Material encoding such Antibodies. In no event shall
JTI be obligated to disclose or provide to ABX any Research Program Materials
and Information relating to any Permitted Antigen or any related Antigen
Invention, notwithstanding the foregoing license.
(b) JTI hereby grants to ABX a non-exclusive,
fully paid-up, perpetual, sublicensable, worldwide license under any and all
intellectual property rights Controlled by JTI covering Antigen Inventions
arising out of JTI's activities under this Agreement with respect to any
Product Antigen for which JTI's Option expires or terminates before JTI and
ABX execute a Product License Agreement therefor, including, but not limited
to, Antibodies to such Product Antigen, Antibody Cells that express such
Antibodies and Genetic Material encoding such Antibodies. In no event shall
JTI be obligated to disclose or provide to ABX any Research Program Materials
and Information relating to any Product Antigen or any related Antigen
Invention, notwithstanding the foregoing license.
(c) JTI hereby grants to ABX a non-exclusive,
fully paid-up, perpetual, sublicensable, worldwide license under any and all
patent applications, patents and know-how Controlled by JTI covering
inventions relating to the creation, development, use, manufacture, import,
offer for sale or sale of XenoMouse Animals that are made by or on behalf of
JTI in the course of practicing (i) the license granted to JTI pursuant to
Section 2.1.1 or (ii) a license granted to JTI pursuant to any Product
License Agreement.
(d) JTI agrees to execute such documents and take
such further actions as are reasonably necessary to effectuate any grant of
licenses contemplated by this Section 5.7.3.
5.7.4 IN-LICENSES. Notwithstanding any other provision in
this Article 5, the Parties acknowledge and understand that (a) ABX shall not
be obligated to prepare, file, prosecute, and maintain patents and patent
applications, or to bring or pursue enforcement proceedings or defend
declaratory judgment actions regarding the Licensed Technology if, and to the
extent that, ABX is not entitled to do so under one or more ABX In-Licenses,
and (b) any rights conveyed under this Article 5 permitting JTI to prepare,
file, prosecute and maintain certain patents and patent applications, or to
bring and pursue enforcement proceedings, or defend declaratory judgment
actions, regarding the Licensed Technology, shall be subject to all
applicable ABX In-Licenses, and are conveyed only to the extent permitted
under such agreements. In the event that ABX would be obligated to make a
payment to a Third Party under any ABX In-License due to JTI's activities
hereunder, JTI shall reimburse to ABX any such
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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amounts owed to such Third Parties, solely to the extent that such amounts
arise out of JTI's practice of the license and rights granted to JTI pursuant
to this Agreement and solely to the extent ABX has notified JTI in advance of
such payment obligation. JTI hereby agrees that it shall be bound by all
applicable terms and conditions of such ABX In-Licenses.
6. CONFIDENTIALITY
6.1 CONFIDENTIALITY. Except as expressly provided herein, JTI and
ABX each agree that, for the term of this Agreement and for five (5) years
thereafter, the receiving Party shall keep completely confidential and shall
not publish or otherwise disclose and shall not use for any purpose other
than as expressly permitted under this Agreement, any information furnished
to it by the other Party pursuant to this Agreement, the MRLOA or the
Collaboration Agreement ("Confidential Information") or any other information
designated the other Party's "Confidential Information" under any other
provision of this Agreement. The Licensed Technology and the ABX Materials
and Information shall be deemed to be ABX's Confidential Information.
Notwithstanding the foregoing, "Confidential Information" shall not include
any such information that the receiving Party can establish by competent
written proof:
6.1.1 was already known to the receiving Party, other than
under an obligation of confidentiality, at the time of disclosure;
6.1.2 was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving
Party;
6.1.3 became generally available to the public or otherwise
part of the public domain after its disclosure and other than through any act
or omission of the receiving Party in breach of this Agreement; or
6.1.4 was subsequently lawfully disclosed to the receiving
Party by a person other than the disclosing Party or developed by the
receiving Party without reference to any information or materials disclosed
by the disclosing Party.
6.2 PERMITTED DISCLOSURE. Notwithstanding Section 6.1 above and 6.3
below, each Party may nevertheless disclose the other Party's Confidential
Information to the extent such disclosure is reasonably necessary in filing
or prosecuting patent applications, prosecuting or defending litigation,
complying with applicable governmental regulations or otherwise submitting
information to tax or other governmental authorities, making a permitted
sublicense or other exercise of its rights hereunder or conducting clinical
trials, provided that if a Party is required to make any such disclosure of
the other Party's Confidential Information, other than pursuant to a
confidentiality agreement consistent with this Agreement, it will give
reasonable advance notice to such Party of such disclosure requirement and,
save to the extent inappropriate in the case of patent applications, will use
efforts consistent with prudent business judgment to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or confidentiality agreements or otherwise).
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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6.3 TERMS OF AGREEMENT. Except as expressly provided in this Article
6, neither Party shall disclose to any Third Party the material terms of this
Agreement without the prior written consent of the other Party hereto, except
to advisors, investors, licensees, sublicensees and others on a need-to-know
basis under circumstances that reasonably ensure the confidentiality thereof,
or to the extent required by law. Without limitation upon any provision of
this Agreement, each Party shall be responsible for the observance by its
employees, consultants and contractors of the foregoing confidentiality
obligations.
6.4 SCIENTIFIC PUBLICATIONS. In no event shall JTI publish any
information relating to an Antigen that is not, at the time such publication
is to be submitted to a Third Party, a Product Antigen. Following a Permitted
Antigen's designation as a Product Antigen pursuant to Section 3.2.3, JTI may
publish its scientific work under this Agreement with respect to such Product
Antigen subject to the following restrictions:
6.4.1 JTI shall provide ABX with an advance copy of any
proposed submission of a publication arising from JTI's research related to
the Product Antigen hereunder not less than thirty (30) days prior to
submission or disclosure of such publication to a Third Party, and ABX shall
have a reasonable opportunity to recommend any changes it reasonably believes
are necessary to preserve its patent rights or to protect its Confidential
Information hereunder. JTI shall include all changes reasonably requested by
ABX; and
6.4.2 If ABX informs JTI, within thirty (30) days of
receipt of an advance copy of a proposed publication hereunder, that such
publication includes Confidential Information of ABX, then JTI shall delete
such Confidential Information from such publication and, in the case of
inventions made solely by JTI or jointly by JTI and ABX, delay publication
thereof for a reasonable time period (not to exceed ninety (90) days)
sufficient for the preparation and filing of a patent application or
application for a certificate of invention thereon.
6.4.3 This Section 6.4 shall not operate to restrict JTI
from publishing any work or activities conducted by or on behalf of JTI with
respect to any Antigen outside of the scope of this Agreement, subject to
JTI's obligations under Section 6.1.
7. INDEMNIFICATION
7.1 BY JTI. Subject to ABX's compliance with Section 7.3, JTI agrees
to indemnify, defend and hold ABX and its Affiliates and their respective
directors, officers, employees and agents harmless from and against any
losses, claims, damages, liabilities, or actions resulting directly from any
Third Party claims (collectively, "Liabilities") arising from any negligence
or willful misconduct of JTI or its Affiliates (or their respective
directors, officers, employees or agents) or the breach of any
representations, warranties, covenants or other obligations of JTI under this
Agreement, except to the extent that such Liabilities arise from (a) the
negligence or willful misconduct of ABX or its Affiliates or their respective
directors, officers, employees or agents, or (b) ABX's breach of any of its
representations, warranties, covenants or other obligations under this
Agreement.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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7.2 BY ABX. Subject to JTI's compliance with Section 7.3, ABX agrees
to indemnify, defend and hold JTI and its Affiliates and their respective
directors, officers, employees and agents harmless from and against any
Liabilities arising from any negligence or willful misconduct of ABX or its
Affiliates (or their respective directors, officers, employees or agents) or
the breach of any representations, warranties, covenants or other obligations
of ABX under this Agreement, except to the extent that such Liabilities arise
from (i) the negligence or willful misconduct of JTI or its Affiliates or
their respective directors, officers, employees or agents or (ii) JTI's
breach of any of its representations, warranties, covenants or other
obligations under this Agreement.
7.3 INDEMNIFICATION PROCEDURES. If a Party (the "Indemnitee")
intends to claim indemnification under this Article 7, it shall promptly
notify the indemnifying Party (the "Indemnitor") in writing of any Liability
in respect of which the Indemnitee or its directors, officers, employees or
agents intend to claim such indemnification, and the Indemnitor shall have
the right to participate in, and, to the extent the Indemnitor so desires, to
assume the defense thereof with counsel mutually satisfactory to the Parties.
The indemnity obligation of this Article 7 shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action if such settlement
is effected without the consent of the Indemnitor, which consent shall not be
withheld or delayed unreasonably. The failure to deliver written notice to
the Indemnitor within a reasonable time after the commencement of any such
action shall not relieve such Indemnitor of any liability to the Indemnitee
under this Article 7, except to the extent that such failure is prejudicial
to its ability to defend such action. The Party claiming indemnification
under this Article 7 and its directors, officers, employees, agents and
Affiliates, shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability
covered by this Article 7.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF ABX. ABX represents
and warrants to JTI that (i) it has the full right and authority to enter
into this Agreement; (ii) it has taken all necessary action on its part to
authorize the execution and delivery of this Agreement and the performance of
its obligations hereunder; (iii) to the knowledge of ABX as of the Effective
Date, there are no existing or threatened actions, suits or claims pending
with respect to the subject matter hereof or the right of ABX to enter into
and perform its obligations under this Agreement; (iv) it has not entered and
during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement; (v) it has not taken and
will not knowingly take any action, and it has not failed to take and will
not fail to take any action, under this Agreement that will cause a breach of
the GenPharm Cross License Agreement; and (vi) the MRLOA is in full force and
effect as of the Effective Date, and ABX will not amend or terminate the
MRLOA in any manner that would have a material negative effect on the scope
of the rights granted to JTI hereunder.
8.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF JTI. JTI represents
and warrants to ABX that (i) it has the full right and authority to enter
into this Agreement; (ii) it has taken all necessary action on its part to
authorize the execution and delivery of this Agreement and the performance of
its obligations hereunder; (iii) to the knowledge of JTI as of the Effective
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Date, there are no existing or threatened actions, suits or claims pending
with respect to the subject matter hereof or the right of JTI to enter into
and perform its obligations under this Agreement; (iv) it has not entered and
during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement; and (v) it has not taken and
will not knowingly take any action, and it has not failed to take and will
not fail to take any action, under this Agreement that will cause a breach of
the GenPharm Cross License Agreement.
8.3 DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES
OF ANY KIND TO THE OTHER PARTY, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
AND VALIDITY OF TECHNOLOGY CLAIMS, ISSUED OR PENDING.
9. TERM; TERMINATION
9.1 TERM. This Agreement shall commence on the Effective Date and,
unless earlier terminated as provided in this Article 9, shall continue in
effect for a period of twenty (20) years from the Effective Date.
9.2 TERMINATION BY JTI. JTI may terminate this Agreement at any
time upon thirty (30) days written notice to ABX.
9.3 TERMINATION FOR BREACH. Either Party may terminate this
Agreement in the event the other Party shall have materially breached or
defaulted in the performance of any of its material obligations hereunder,
and such breach or default shall have continued for sixty (60) days after
written notice thereof was provided to the breaching Party by the
non-breaching Party that terminates the Agreement as to the breaching Party.
Any termination shall become effective at the end of such sixty (60) day
period unless the breaching Party has cured any such breach or default prior
to the expiration of the sixty (60) day period. However, if the Party alleged
to be in breach of this Agreement disputes such breach within such sixty (60)
day period, the other Party shall not have the right to terminate this
Agreement unless it has been determined by an arbitration proceeding in
accordance with Section 10.13 below that the allegedly breaching Party did in
fact materially breach this Agreement, and the breaching Party fails to cure
such breach within thirty (30) days following the final decision of the
arbitrators or such other time as directed by the arbitrators.
9.4 EFFECT OF EXPIRATION OR TERMINATION.
9.4.1 ACCRUED OBLIGATIONS AND RIGHTS. Expiration or any
termination of this Agreement for any reason shall not relieve either Party
of any obligation accruing prior to such expiration or termination or release
either Party from any liability which at the time of such expiration or
termination has already accrued to such Party. Such termination or expiration
shall not preclude either Party from pursuing any rights and remedies it may
have hereunder or at law or in equity which accrued to it prior to such
expiration or termination.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
9.4.2 CONFIDENTIAL INFORMATION. Each Party shall, within
sixty (60) days of termination or expiration of this Agreement, return all
Confidential Information of the other Party in its possession; provided,
however, that each Party may return an archival copy of such Confidential
Information solely for determining the scope of its confidentiality obligations
hereunder
9.4.3 ABX MATERIALS AND INFORMATION.
(a) Upon any termination or expiration of this
Agreement (other than termination by JTI pursuant to Section 9.3), JTI shall
either return or destroy all ABX Materials and Information in its possession,
as requested by ABX. Any destruction of any ABX Materials and Information shall
be in compliance with all applicable local laws, rules and regulations.
Following such destruction, JTI shall promptly deliver to ABX a written
certification of such destruction.
(b) In the event that JTI terminates this Agreement
pursuant to Section 9.3, the license granted to JTI pursuant to 2.1.1 shall
survive such termination, subject to JTI's compliance with Sections 2.1.2, 2.2.4
and 2.3.
9.4.4 OPTIONS. In the event of any termination of this
Agreement, other than a termination by JTI pursuant to Section 9.3 for ABX's
material breach, all outstanding Options granted to JTI under this Agreement
shall immediately terminate.
9.4.5 SURVIVAL. Articles 5 (excluding Section 5.7.1(b)),
6, 7, 8 and 10, and Section 9.4 shall survive the expiration or termination of
this Agreement.
10. MISCELLANEOUS PROVISIONS
10.1 GOVERNING LAWS. This Agreement shall be interpreted and
construed in accordance with the laws of the State of California, USA, without
regard to conflict of laws principles.
10.2 WAIVER. It is agreed that no waiver by a Party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
10.3 ASSIGNMENTS. Neither this Agreement nor any right or
obligation hereunder may be assigned or delegated, in whole or part, by either
Party without the prior written consent of the other; provided that such
written consent shall not be required where: (a) either Party assigns this
Agreement to any entity that acquires substantially all of the assets to which
this Agreement relates, (b) JTI assigns this Agreement to a Majority-Owned
Affiliate of JTI or (c) ABX assigns this Agreement to an Affiliate. The terms
and conditions of this Agreement shall be binding on and inure to the benefit
of the permitted successors and assigns of the Parties. Notwithstanding the
foregoing, ABX shall not be obligated without its written consent to send
XenoMouse Animals to any Third Party or Affiliate of JTI, including without
limitation any successor-in-
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
interest of JTI. Any assignment not in conformance with this Section 10.3 shall
be null, void and of no legal effect.
10.4 INDEPENDENT CONTRACTORS. The relationship of the Parties is
that of independent contractors. The Parties shall not be deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
10.5 COMPLIANCE WITH LAWS. In exercising their rights under this
Agreement, the Parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this Agreement.
10.6 FURTHER ACTIONS. Each Party agrees to execute, acknowledge
and deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
10.7 NO IMPLIED OBLIGATIONS. Except as expressly provided herein,
nothing in this Agreement shall be deemed to require JTI to exploit the
Licensed Technology or to prevent JTI from commercializing products similar to
or in competition with any Product, in addition to or in lieu of such Products.
10.8 NOTICES. Any notice, request, approval or consent required or
permitted to be given between the Parties hereto shall be given in writing, and
shall be deemed to have been properly given if delivered in person, transmitted
by telecopy (with machine confirmation of transmission and confirmation by
personal delivery, first class certified mail or courier), or mailed by first
class certified mail to the other Party at the appropriate address set forth
below, or to such other address as may be designated in writing by a Party from
time to time in accordance with this Agreement.
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranoman 2-chome
Minato-Ku, Tokyo 105
Japan
Fax: 011-81-3-5-479-0321
Attn: Vice President
Pharmaceutical Division
With copies to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Fax: (212) 644-4051
Attn: Neal N. Beaton, Esq.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
Akros Pharma Inc.
1400 Fashion Island Blvd.
Suite 910
San Mateo, CA 94404
Fax: (650) 312-8028
Attn: President
Abgenix, Inc.: Abgenix, Inc.
7601 Dumbarton Circle
Fremont, CA 94555
Fax: (510) 608-6511
Attn: President
With a copy to: Cooley Godward LLP
3000 El Camino Real
Five Palo Alto Square
Palo Alto, CA 94306-2155
Fax: (650) 857-0663
Attn: Robert L. Jones, Esq.
10.9 EXPORT LAWS. Notwithstanding anything to the contrary
contained herein, all obligations of the United States and Japan, of ABX and
JTI are subject to prior compliance with the export regulations and such other
United States or Japanese laws and regulations as may be applicable, and to
obtaining all necessary approvals required by the applicable agencies of the
governments of the United States and Japan. JTI shall be responsible for
obtaining such approvals, and shall use efforts consistent with prudent
business judgment to obtain such approvals.
10.10 SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision and the parties shall discuss in good faith
appropriate revised arrangements.
10.11 FORCE MAJEURE. Nonperformance of any Party shall be excused
to the extent that performance is rendered impossible by strike, fire,
earthquake, flood, governmental acts or orders or restrictions, failure of
suppliers, or any other reason where failure to perform is beyond the
reasonable control, and not caused by the negligence, intentional conduct or
misconduct of the non-performing Party.
10.12 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL ANY PARTY HERETO
BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER.
10.13 DISPUTE RESOLUTION; ARBITRATION. The Parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between the Chief Executive Officer of
ABX and the Vice President of the Pharmaceutical
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
Division of JTI. Any dispute under this Agreement which is not settled after
such meeting shall be finally settled by binding arbitration, conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association by three (3) arbitrators appointed in accordance with said rules.
The arbitration proceedings and all pleadings and written evidence shall be in
the English language. Any written evidence originally in a language other than
English shall be submitted in English translation accompanied by the original
or a true copy thereof. The costs of the arbitration, including administrative
and arbitrators' fees, shall be shared equally by the parties to the
arbitration. Each Party shall bear its own costs and attorneys' and witness'
fees; PROVIDED THAT the prevailing party in any arbitration, as determined by
the arbitration panel, shall be entitled to an award against the other party in
the amount of the prevailing party's costs and reasonable attorneys' fees. A
disputed performance or suspended performances pending the resolution of the
arbitration must be completed within thirty (30) days following the final
decision of the arbitrators. Any arbitration subject to this Section 10.13
shall be completed within six (6) months from the filing of notice of a request
for such arbitration.
10.14 COMPLETE AGREEMENT. It is understood and agreed between ABX
and JTI that this Agreement and the Product License Agreement(s) arising under
this Agreement, together with all Schedules and Exhibits thereto, constitute
the entire agreement, both written and oral, between the Parties with respect
to the subject matter hereof, and supersede and cancel all prior agreements
respecting the subject matter hereof, either written or oral, expressed or
implied. No amendment or change hereof or addition hereto shall be effective or
binding on either of the Parties unless reduced to writing and executed by the
respective duly authorized representatives of ABX and JTI.
10.15 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
10.16 HEADINGS. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for
convenience of reference only and shall not affect its meaning or
interpretation.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.
ABGENIX, INC.
By: /s/ R. Scott Greer
________________________________
R. Scott Greer
President and Chief Executive Officer
JAPAN TOBACCO INC.
By: /s/ Takashi Kato
________________________________
Takashi Kato
Managing Director, Pharmaceutical Division
Exhibit A - Common Definitions
Exhibit B - Form of Product License Agreement
Exhibit C - [*]
Exhibit D - Permitted Transferees
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT A
TO
OPTION AGREEMENT AND
PRODUCT LICENSE AGREEMENT
COMMON DEFINITIONS EXHIBIT
1.1 "ABX IN-LICENSES" shall mean any and all licenses,
sublicenses or other agreements, in effect either as of the Effective Date, or
hereafter during the term of this Agreement, under which ABX is granted rights
to technology (whether or not patentable) that is related to XenoMouse Animals
and/or is within the scope of the ABX Patent Rights and/or the ABX Know-How.
The Parties agree that any and all such rights granted pursuant to any ABX
In-License are included in the XenoMouse Animals, ABX Patent Rights or the ABX
Know-How, as the case may be, but only to the extent that ABX is permitted
under the terms of the applicable ABX In-License to transfer further or grant
licenses or sublicenses of such rights. "ABX In-Licenses" shall include,
without limitation, the GenPharm Cross License Agreement and other agreements
listed in Schedule 1 to this Exhibit A.
1.2 "ABX KNOW-HOW" shall mean all materials listed on Schedule 2
to this Exhibit A as of the Effective Date, and any other materials Controlled
by ABX that ABX, in its discretion, may from time to time provide to JTI
pursuant to the Option Agreement or the applicable Product License Agreement.
The Parties shall update Schedule 2 from time to time to add such other
materials. All ABX Know-How shall be treated as "Confidential Information" of
ABX under the Option Agreement and the applicable Product License Agreement.
ABX Know-How shall exclude ABX Patent Rights.
1.3 "ABX MATERIALS AND INFORMATION" shall mean, collectively,
(a) all [*] (including, without limitation [*], (b) all information,
materials, discoveries, inventions, technology, results and data relating to
the [*] during the term of the Option Agreement or the Product License
Agreement, as applicable, (c) all ABX Know-How, (d) all materials (including
without limitation fragments, derivatives, progeny, modifications or
improvements thereto) derived from the foregoing, and (e) all information
(and all tangible and intangible embodiments thereof) regarding the
information, materials, discoveries, inventions, technology, results and data
described in subsections (a) through (d) above which is disclosed by ABX to
JTI under the Option Agreement or the applicable Product License Agreement,
and (e) any information, invention, discovery, results and/or data described
in Section 5.1.2 of the Option Agreement or Section 6.1.2 of the applicable
Product License Agreement; provided, however, that the ABX Materials and
Information shall exclude Research Program Materials and Information.
1.4 "ABX PATENT RIGHTS" shall mean (a) the U.S. patents and
patent applications listed on Schedule 3 to this Exhibit A, as applicable, and
patents issuing on such patent applications; (b) continuations, divisionals,
reexaminations, reissues or extensions of any of the patent applications and
patents set forth in (a); (c) any foreign counterparts of the applications
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
and patents in (a) and (b); in each case to the extent Controlled by ABX
(including under the ABX In-Licenses). ABX shall provide prompt written notice
to JTI of any relevant changes in the status of patent applications and patents
listed on Schedule 3, and the Parties shall promptly thereafter update Schedule
3 to reflect such changes.
1.5 "AFFILIATE" shall mean any entity which controls, is
controlled by or is under common control with either ABX or JTI. An entity
shall be regarded as in control of another entity if it owns or controls at
least fifty percent (50%) of the shares of the subject entity entitled to vote
in the election of directors (or, in the case of an entity that is not a
corporation, for the election of the corresponding managing authority);
PROVIDED THAT the government of Japan shall not be considered an Affiliate of
JTI.
1.6 "ANTIBODY" shall mean a composition comprising a whole
antibody or fragment thereof, said antibody or fragment having been derived
from the Licensed Technology and/or generated in whole or part from the
XenoMouse Animals through immunization with a Permitted Antigen, or having been
generated from nucleotide sequences encoding, or amino acid sequences of, an
antibody derived from the XenoMouse Animals through immunization with a
Permitted Antigen.
1.7 "ANTIBODY CELLS" shall mean all cells that contain, express
or secrete Antibodies or Genetic Materials encoding such Antibodies.
1.8 "ANTIGEN" shall mean a [*] that (a) is defined by a [*]
thereof, including any [*] thereto and (b) is identified by a [*] (as
disclosed in an [*] sufficient to [*]
1.9 "ANTIGEN INVENTION" shall mean any patent applications,
patents and/or know-how, that relate to, cover or claim (a) the [*] that [*]
to an [*] or [*] such [*] (or [*] or [*] of such [*] or such [*] and [*] that
[*] or [*] such [*] or [*] (b) [*] such [*] or [*] other than those described
in (a); and (c) [*] described in (a) and/or (b).
1.10 "COLLABORATION AGREEMENT" shall mean that certain
collaboration agreement effective June 12, 1991, by and among Xenotech, L.P.,
Cell Genesys, Inc. (which assigned its entire interest therein to ABX) and JT
Immunotech USA, Inc. (which assigned its entire interest therein to JT America
Inc., a wholly-owned subsidiary of JTI), as amended.
1.11 "CONTROL" OR "CONTROLLED" shall mean the ability to grant
licenses or sublicenses with respect to a technology or material as provided in
this Agreement without breaching any agreement or other arrangement with a
Third Party, including without limitation, the ABX In-Licenses. ABX shall be
deemed to "Control" rights held by its Affiliates Xenotech,
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
Inc. and Xenotech, L.P., to the extent that such Affiliates have the ability to
grant licenses or sublicenses under such rights as provided in the preceding
sentence.
1.12 "DERIVED" or "DERIVED" shall mean obtained, developed,
created, synthesized, designed, derived or resulting from, based upon or
otherwise generated (whether directly or indirectly, in whole or in part).
1.13 [*] shall mean [*] for which an [*] pursuant to [*] of the
[*] existing as of the Effective Date are listed on [*] to the [*] ABX shall
update [*] on a semiannual basis to reflect those [*] for which [*] following
the Effective Date, as further described in Section [*] of the Option
Agreement.
1.14 [*] shall mean any intellectual property or technology or
other proprietary rights Controlled by ABX in or to: (a) [*] (b) all [*]
other than [*] including without limitation, (i) [*] of such [*] or of [*]
such [*] (ii) [*] of such [*] or [*] such [*] (iii) [*] of [*] such [*] or [*]
such [*] (iv) [*] or other [*] that [*] to such [*] such [*] or [*] and [*]
that [*] or [*] such [*] or [*] and (iv) [*] of such [*] or [*] (c) [*] to [*]
and [*] of [*] other than to [*] and (d) any [*] with respect to which an [*]
exists of the type described in Section [*] of the Option Agreement, subject
to Section [*] of the Option Agreement.
1.15 "EXERCISE NOTICE" shall have the meaning set forth in Section
3.4.1 of the Option Agreement.
1.16 "FDA" shall mean the United States Food and Drug
Administration, and any successor agencies thereto.
1.17 "FIELD" shall mean the use of Products (i) for human
therapeutic, prophylactic and diagnostic medical purposes and [*]
1.18 "GENETIC MATERIAL" shall mean a nucleotide sequence,
including DNA, RNA and complementary and reverse complementary nucleotide
sequences thereto, whether coding or non-coding and whether intact or a
fragment.
1.19 "GENPHARM CROSS LICENSE AGREEMENT" shall mean that certain
Cross License Agreement entered into by and between ABX, JTI, XT, CGI, and
GenPharm International, Inc., effective as of March 26, 1997, as the same may
be amended from time to time.
1.20 "IMPEDIMENT" shall have the meaning defined in Section
3.2.2(a) of the Option Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
1.21 "IND" shall mean an Investigational New Drug application
filed with the Food and Drug Administration in the United States, or any
similar filing with any foreign regulatory authority, to commence human
clinical testing of any product in a country.
1.22 "LICENSE FEE" shall mean, with respect to each Product
License Agreement, the license fee described in Section 3.1 of such agreement.
1.23 "LICENSED TECHNOLOGY" shall mean the rights Controlled by ABX
in the ABX Patent Rights and ABX Know-How; provided, however, that the
foregoing shall exclude the Excluded Technology.
1.24 "MAJORITY-OWNED AFFILIATE OF JTI" shall mean an entity of
which JTI owns, directly or indirectly, more than [*] of the shares of such
entity entitled to vote in the election of directors or corresponding
managing authority.
1.25 "MRLOA" shall mean that certain Master Research License and
Option Agreement entered into by and among XT, JTI and CGI effective as of June
28, 1996, as amended, and subsequently assigned to ABX by CGI, which terminated
as of the Effective Date of the Option Agreement pursuant to the "Agreement to
Terminate the Interest of Japan Tobacco Inc. in the Master Research License and
Option Agreement" between the Parties (the "MRLOA Termination Agreement").
1.26 "NET SALES" shall mean the gross sales price charged by
JTI, its Affiliates or its Sublicensees for sales of Product to non-Affiliate
customers, less: (i) normal and customary [*] (ii) [*] JTI, its Affiliates or
its Sublicensees, with respect to such sales, (iii) reasonable [*] JTI, its
Affiliates or its Sublicensees, to the extent such [*] are not [*] and (iv)
[*] subject in each case to Section [*] of the applicable Product License
Agreement .
1.27 "NEW STRAIN INTELLECTUAL PROPERTY" shall mean any
intellectual property Controlled by ABX covering a New Strain that does not
also cover the Original Strain.
1.28 "NEW STRAIN" shall have the meaning set forth in Section
2.2.3 of the Option Agreement.
1.29 "OPTION" shall have the meaning described in Section 3.1 of
the Option Agreement.
1.30 "OPTION AGREEMENT" shall mean that certain Multi-Antigen
Research License and Option Agreement entered into by and between ABX and JTI
effective as of the effective date thereof, as the same may be amended from
time to time.
1.31 "ORIGINAL STRAIN" shall have the meaning set forth in Section
2.2.1 of the Option Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
1.32 "PARTIES" shall mean, collectively, ABX and JTI, each of
which may be referred to individually as a "Party."
1.33 "PRODUCT" shall mean (i) with regard to the Option Agreement,
any composition which incorporates or is derived from (a) an Antibody that
binds to a Product Antigen or (b) Genetic Material encoding such an Antibody,
wherein in respect of each Product, said Genetic Material does not encode
multiple Antibodies; and (ii) with regard to a Product License Agreement, any
composition which incorporates or is derived from (a) an Antibody that binds to
the Product Antigen (as defined in such Product License Agreement) or (b)
Genetic Material encoding such an Antibody wherein, in respect of each Product,
said Genetic Material does not encode multiple Antibodies.
1.34 "PRODUCT ANTIGEN" shall mean (i) with regard to the Option
Agreement, a Permitted Antigen as to which JTI has obtained an Option, as
further described in Section 3.2 of the Option Agreement; and (ii) with regard
to a Product License Agreement, the Antigen described in Section 1.1 of such
Product License Agreement.
1.35 "PRODUCT LICENSE AGREEMENT" shall mean a license agreement
with respect to a particular Product Antigen, in the form materially and
substantially set forth in Exhibit B to the Option Agreement.
1.36 [*] PRODUCTS" shall mean Products used as [*]
1.37 "RESEARCH FIELD" shall mean the immunization of XenoMouse
Animals with Permitted Antigens, the use of materials derived or generated in
whole or in part from such XenoMouse Animals that are so immunized, and the use
of the XenoMouse Animals themselves, solely for the creation, identification,
analysis, manufacture, research, and preclinical development of Products in the
Field. For purposes of clarification, it is understood that "immunization" of
XenoMouse Animals with a Permitted Antigen includes the immunization of
XenoMouse Animals with any formulation or construction of a Permitted Antigen,
regardless of the three dimensional configuration of such Permitted Antigen,
including, but not limited to, cell lines expressing such Permitted Antigen on
their cell surface and chimeric molecules containing such Permitted Antigen;
PROVIDED, HOWEVER, that any research, development or use of Antibodies that
bind to an [*] (other than to determine whether they bind to a
Permitted Antigen) shall be outside of the scope of the licenses granted under
the Option Agreement.
1.38 "RESEARCH PROGRAM MATERIALS AND INFORMATION" shall mean,
(a) With respect to the Option Agreement: (i) [*] that
[*] to a [*] (ii) [*] that [*] that [*] to a [*] (iii) [*] of [*] that [*] to
a [*] or [*] or [*] of [*] that [*] such [*] (iv) [*] that [*] or [*] that [*]
to a [*] or [*] or [*] that [*] such [*] and (v) information (and all
tangible and intangible embodiments thereof) regarding the [*] or
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
[*] described in clauses (i) through (iv) of this subsection (a); in each
case that are made, conceived, reduced to practice or otherwise derived from
the activities conducted by JTI or a Majority-Owned Affiliate of JTI pursuant
to and in accordance with the Option Agreement. The rights of the Parties
with respect to the Research Program Materials and Information described in
this subsection (a) shall be determined in accordance with the Option
Agreement.
(b) With respect to each Product License Agreement:
(i) [*] that [*] to a [*] (ii) [*] that [*] that [*] to a [*] (iii) [*] of [*]
that [*] to a [*] or [*] of [*] that [*] such [*] (iv) [*] that [*] or [*]
that [*] to a [*] or [*] that [*] such [*] and (v) information (and all
tangible and intangible embodiments thereof) regarding the [*] or [*]
described in clauses (i) through (iv) of this subsection (b); in each case
that are made, conceived, reduced to practice or otherwise derived from the
activities conducted by JTI or a Majority-Owned Affiliate of JTI pursuant to
and in accordance with such Product License Agreement. The rights of the
Parties with respect to the Research Program Materials and Information
described in this subsection (b) shall be determined in accordance with the
applicable Product License Agreement.
1.39 "PERMITTED ANTIGEN" shall mean an Antigen that is not [*]
1.40 "SUBLICENSEE" shall mean a Third Party other than an
Affiliate of JTI to which JTI grants a sublicense under the Licensed Technology
to research, develop, make, use and/or sell Products, to the extent of the
rights granted to JTI therein. "Sublicensee" shall also include a Third Party
to whom JTI has granted a sublicense under the Licensed Technology to
distribute Products to the extent of the rights of JTI provided in a Product
License Agreement, provided that such Third Party is responsible for marketing
and promotion of Products within the applicable country.
1.41 "TERRITORY" shall mean all countries of the world.
1.42 "THIRD PARTY" shall mean an entity other than ABX or JTI, or
their respective Affiliates.
1.43 "VALID CLAIM" shall mean a claim of a pending patent
application or issued and unexpired patent that is included within the Licensed
Technology or claims ABX Program Materials and Inventions, in each case that
has not been held unenforceable, unpatentable, or invalid by a court or other
governmental agency of competent jurisdiction, and that has not been admitted
to be invalid or unenforceable through reissue, disclaimer or otherwise.
1.44 "XENOMOUSE ANIMALS" shall mean transgenic mice which are
Controlled by ABX and which contain unrearranged human immunoglobulin genes
that are capable of producing human antibodies when immunized with an antigen.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXECUTION COPY
SCHEDULE 1
ABX IN-LICENSES
[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
SCHEDULE 2
ABX KNOW-HOW
[*]
<TABLE>
<CAPTION>
ITEM DESCRIPTION
<S> <C>
[*]
</TABLE>
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXECUTION COPY
SCHEDULE 3
ABX PATENT RIGHTS
A. Any of the patent applications listed in the following Table:
<TABLE>
<CAPTION>
<S> <C>
[*]
</TABLE>
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT B
FORM OF PRODUCT LICENSE AGREEMENT
THIS PRODUCT LICENSE AGREEMENT (this "Agreement") effective as of the
____ day of _________ (the "Effective Date") is made by and between ABGENIX,
INC., a Delaware corporation ("ABX"), and JAPAN TOBACCO INC., a Japanese
corporation (hereinafter "JTI") with reference to the following facts and
circumstances.
RECITALS
JTI and ABX have entered into that certain Multi-Antigen Research
License and Option Agreement effective as of December 31, 1999 (the "Option
Agreement"), pursuant to which JTI has certain rights to acquire a license under
the Licensed Technology (as defined in Exhibit A hereto); and
JTI has exercised an option right under the Option Agreement to acquire
from ABX a license or sublicense, as the case may be, under the Licensed
Technology with respect to a particular antigen (the "Product Antigen," as
defined below) to commercialize antibody products that bind to such antigen in
the Field, all as set forth below on the terms and conditions herein.
NOW, THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the Parties
hereto as follows:
1. DEFINITIONS.
For purposes of this Agreement, capitalized terms set forth in this
Agreement and not otherwise defined herein shall have the meanings set forth in
this Section or in the Common Definitions Exhibit set forth as Exhibit A
attached hereto and made a part hereof.
1.1 "PRODUCT ANTIGEN" shall mean _____________________.
2. LICENSE GRANT
2.1 GRANT OF RIGHTS; COVENANT REGARDING RESEARCH PRODUCTS.
2.1.1 Subject to the terms and conditions of this Agreement,
ABX hereby grants to JTI (a) an exclusive license or sublicense, as the case may
be, under the Licensed Technology, to make and have made Products anywhere in
the world and to conduct research and development activities, use, sell, lease,
offer to sell or lease, import, export, otherwise transfer physical possession
of or otherwise transfer title to such Products in the Field and in the
Territory, and (b) an exclusive license and/or sublicense, as the case may be,
under its and its Affiliates' intellectual property rights relating to the ABX
Materials and Information, solely to the extent that the ABX Materials and
Information are necessary or useful to JTI's practice of the license granted in
subclause (a). Such license or sublicense shall be exclusive even as to ABX and
its Affiliates, and shall include the exclusive right to grant and authorize
sublicenses for exploitation of Products worldwide.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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2.1.2 JTI shall not, either itself or through a Third Party
collaborator or distributor, sell or offer for sale [*] Products for any use
other than to [*] JTI shall require that each Sublicensee to which JTI grants
a sublicense under this Agreement to develop and/or commercialize [*]
Products agree in writing not to sell or offer for sale, or permit its
collaborators or distributors to sell or offer for sale, [*] Products for any
use other than to [*]
2.2 THIRD PARTY RIGHTS. It is understood and agreed that the grant of
rights under Section 2.1 above shall be subject to and limited in all respects
by the terms of the applicable ABX In-License(s) pursuant to which ABX has
acquired or does acquire any Licensed Technology, including, without limitation,
any rights granted to or retained by GenPharm International, Inc. under the
GenPharm Cross License Agreement, and that all rights or sublicenses granted
under this Agreement shall be limited to the extent that ABX may grant such
rights and sublicenses under such ABX In-Licenses. ABX shall cooperate
reasonably with JTI to grant to JTI's Affiliate or sublicensee a direct
sublicense under the GenPharm Cross License Agreement if JTI would be precluded
from directly granting such sublicense to such Affiliate or sublicensee under
the terms of the GenPharm Cross License Agreement; provided that in no event
shall ABX be obligated to grant such a direct sublicense if it determines that
doing so may not be permitted under the terms of the GenPharm Cross License
Agreement. Further, the Parties acknowledge that while ABX is granting JTI an
exclusive license under certain of its rights, ABX's rights may not be exclusive
from ABX's licensors.
2.3 SUBLICENSES. JTI will have the right to grant and authorize
sublicenses to its Affiliates and to Third Parties, subject to Section 2.2;
PROVIDED, HOWEVER, JTI shall remain responsible for any payments due to ABX upon
Net Sales of Product by any JTI Affiliate or Sublicensee. JTI may retain any
amounts received from Affiliates or Sublicensees in excess of the amounts owed
to ABX pursuant to Sections 3.1 and 3.2. Any sublicense granted by JTI pursuant
to this Agreement shall provide that the Affiliate or Sublicensee will be
subject to the applicable terms of this Agreement and of the ABX In-Licenses.
JTI acknowledges that its right to grant sublicenses under certain of the
Licensed Technology may be limited by the terms and conditions of the ABX
In-Licenses. JTI shall provide ABX with a copy of relevant portions of each
sublicense agreement, as reasonably required by ABX.
3. CONSIDERATION.
3.1 LICENSE FEE. JTI shall pay to ABX within thirty (30) days of the
Effective Date a license fee of [*]subject to Section 4.5.
3.2 ROYALTIES. In consideration for the license and rights granted
herein, JTI shall pay to ABX [*] of Net Sales of Products other than [*]
Products by JTI, its Affiliates or its Sublicensees, subject to Section 4.5.
Payments due to ABX on Net Sales of [*] Products by JTI, its Affiliates or
Sublicensees are addressed in Section 3.7 below.
3.3 [*] shall have the right, on a [*] basis, to [*] at which any [*]
pursuant to [*] amount of (i) any [*] pursuant to [*] with respect to such
[*] and (ii) any
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2.
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[*] pursuant to Section [*] made by [*] a Third Party that [*] an Affiliate
(including any such [*] prior to its [*] on which [*] with respect to such [*]
PROVIDED, HOWEVER, that the [*] pursuant to Section [*] after application of
[*] with respect to such [*] shall not be [*] of the [*] in Section [*] To
the extent that any [*] are not [*] by a [*] in the [*] with respect to such
[*] for any [*] shall be entitled to [*] the [*] and to [*] hereunder with
respect to such [*] until the [*]
3.4 SINGLE ROYALTY. Only one royalty shall be payable with respect to
any single sale of a Product hereunder, regardless of how many Valid Claims or
patents within the Licensed Technology cover such Product. In addition, no
royalty shall be payable to ABX under Article 3 with respect to sales of a
Product among JTI and its Affiliates and/or Sublicensees (a) for use in research
and/or development or clinical trials, or (b) for commercial sale, in each case
provided that such Affiliate or Sublicensee is not the end-user of such Product.
3.5 [*] Royalties shall be payable at the rates specified in Section
3.2 or 3.3 above [*] of a Product that would [*] which such Product [*]In the
event that such Product is [*] on such sales in accordance with this Article
3, [*] ABX with respect to [*] set forth in Section [*] and JTI shall be [*]
as provided in Section [*]
3.6 COMBINATION PRODUCTS. In the event that a Product is sold in
combination as a single product with another product or component, Net Sales
from such combination sales for purposes of calculating the amounts due under
this Article 3 shall be calculated by multiplying the Net Sales of that
combination by the fraction A/(A + B), where A is the gross selling price of the
Product sold separately and B is the gross selling price of the other product
sold separately. In the event that no such separate sales are made in the same
quarter by JTI, Net Sales for royalty determination shall be as reasonably
allocated by JTI, between such Product and such other product, based upon their
relative importance and proprietary protection.
3.7 [*] PRODUCTS. The Parties intend that JTI shall pay to ABX [*]
if JTI sells, or grants an Affiliate or Sublicensee the right to sell, [*]
Products. Prior to JTI commencing sales of, or granting an Affiliate or
Sublicensee the right to sell, [*] Products, the Parties shall [*] or other
[*] with respect to such sales of [*] Products or the [*] Notwithstanding the
foregoing, JTI shall [*] for any [*] with respect to JTI's, its Affiliates'
and its Sublicensees' manufacture, use, sale, offer for sale, importation or
other exploitation of [*] Products in accordance with Section [*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3.
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3.8 TERMINATION OF ROYALTIES. Royalties payable under Section 3.2,
offset as provided in Section 3.3 or reduced as provided in Section 3.5, and
payments payable under Section 3.7, will be due on a Product-by-Product and
country-by-country basis until the later of (i) ten (10) years from the first
commercial sale of such Product in such country or (ii) the expiration of the
last-to-expire patent containing a Valid Claim covering the Product in such
country.
3.9 PAYMENTS TO THIRD PARTIES BY ABX. ABX will be responsible for the
payment of any royalties, license fees and/or other payments due to Third
Parties under any ABX In-Licenses necessary for JTI's and its Affiliates' and
Sublicensees' manufacture, use, sale, offer for sale, importation or other
exploitation of Products pursuant to a sublicense granted hereunder with respect
to such ABX In-License. JTI shall reimburse ABX for any such royalties paid by
ABX to Third Parties under such ABX In-Licenses anywhere in the world. JTI shall
continue any such reimbursement payments to ABX under each such ABX In-License
until ABX's obligation to pay royalties to Third Parties under such ABX
In-License with respect to JTI's and its Affiliates' and Sublicensees'
manufacture, use, sale, offer for sale, importation, or other exploitation of
Products expires or terminates.
3.10 ROYALTIES PAYABLE BY JTI. JTI will be responsible for the payment
of any royalties, license fees and milestone and/or other payments due to Third
Parties under licenses or similar agreements entered into by JTI to allow the
manufacture, use, sale or other exploitation of Products.
4. ACCOUNTING AND RECORDS.
4.1 ROYALTY REPORTS; PAYMENTS, INVOICES. After the first commercial
sale of Product on which royalties are due to ABX, JTI shall make quarterly
written reports to ABX within [*] after the end of each calendar quarter,
stating in each such report the number, description and aggregate Net Sales
of Product sold during the calendar quarter upon which a royalty is payable
under Article 3. Concurrently with the provision of such reports, JTI shall
pay to ABX royalties at the applicable rate specified in Section 3.2 [*] or
3.7 above and all amounts payable pursuant to Section 3.9. All payments to
ABX hereunder shall be made in U.S. Dollars to a bank account designated by
ABX.
4.2 RECORDS; INSPECTION.
4.2.1 JTI shall keep (and cause its Affiliates and
Sublicensees to keep) complete, true and accurate books of account and records
for the purpose of determining the royalty amounts payable to ABX under this
Agreement. Such books and records shall be kept at the principal place of
business of JTI or its Affiliates, or Sublicensees, as the case may be, for at
least three (3) years following the end of the calendar quarter to which they
pertain. Such records of JTI or its Affiliates will be open for inspection
during such three (3) year period by an independent certified public accountant
representing ABX and reasonably acceptable to JTI for the purpose of verifying
the royalty statements.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4.
<PAGE>
4.2.2 JTI shall require each of its Sublicensees to maintain
similar books and records and to open such records for inspection during the
same three (3) year period. JTI shall use commercially reasonable efforts to
obtain such Sublicensee's agreement to allow such representative of ABX to
inspect such records for the purpose of verifying the royalty statements;
provided that if JTI is unable to obtain such agreement from such Sublicensee,
then JTI shall engage an independent certified public accountant representing
JTI that is reasonably acceptable to ABX to inspect such records on behalf of
ABX.
4.2.3 All inspections conducted pursuant to this Section
4.2 may be made no more than once each calendar year at reasonable times
mutually agreed by JTI and ABX. The representative of ABX will be obligated
to execute a reasonable confidentiality agreement prior to commencing any
such inspection. The results of any inspection hereunder, but not the basis
for such results, which basis ABX's representative (or JTI's representative,
if applicable) will not disclose to ABX, shall be provided to both Parties,
and JTI shall pay any underpayment to ABX within thirty (30) days. Any
overpayment may be credited against future royalty amounts due to ABX
hereunder; PROVIDED HOWEVER, that if there is no further obligation to pay
royalties hereunder anywhere in the Territory, ABX shall refund any such
overpayment within thirty (30) days. Inspections conducted under this Section
4.2 shall be at the expense of ABX, unless a variation or error producing an
increase exceeding [*] of the amount stated for any period covered by such
inspection is established in the course of any such inspection, whereupon all
costs relating thereto will be paid by JTI. Upon the expiration of three (3)
years following the end of any fiscal year, the calculation of royalties
payable with respect to such year shall be binding and conclusive, and JTI
shall be released from any liability or accountability with respect to
royalties for such year.
4.3 CURRENCY CONVERSION. If any currency conversion shall be required
in connection with the calculation of royalties hereunder, such conversion shall
be made using the selling exchange rate for conversion of the foreign currency
into U.S. Dollars, quoted for current transactions reported in THE WALL STREET
JOURNAL for the last business day of the calendar quarter to which such payment
pertains.
4.4 LATE PAYMENTS. Any payments due from JTI that are not paid on
the date such payments are due under this Agreement shall bear interest to
the extent permitted by applicable law at the prime rate as reported by the
Bank of America in San Francisco, California on the date such payment is due,
plus an additional [*], calculated based upon the number of days such payment
is delinquent. This Section 4.4 shall in no way limit any other remedies
available to either Party.
4.5 [*]
4.5.1 With respect to [*] pursuant to Sections [*] (i) all
[*] of any [*] or [*]by a [*] on any [*] by [*] under such Sections shall be
the [*] of [*] (ii) [*] shall [*]such [*] from any [*] to [*] pursuant to
such Sections as [*] and shall [*] such [*] to the [*] on [*] (iii) [*] shall
timely provide to [*] a [*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5.
<PAGE>
of any [*] hereunder; and (iv) [*] shall reasonably cooperate and assist [*]
in [*] it is entitled to [*].
4.5.2 Unless [*] under Section [*] the [*] required to be
[*] pursuant to Section [*] hereof shall be [*] for or on [*] of any [*] the
[*] shall be the [*] (other than [*] on or [*] shall timely provide to [*] a
[*] on the [*]pursuant to Section [*]
4.5.3 [*] agrees to [*] for [*] that may be [*] pursuant to
Section [*] with respect to which it is entitled so to [*] and further agrees
not to amend such [*] for the [*] with respect to such [*] At the time that
[*] by actually [*] such [*] as a [*] (determined on a [*] with other
available [*], then the [*] of such [*]to such [*] shall [*] be [*]
5. DUE DILIGENCE.
5.1 FUNDING AND CONDUCT. JTI shall independently furnish and be
responsible for funding and conducting all of its preclinical and clinical
research and development of Products, at its own expense.
5.2 REASONABLE COMMERCIAL EFFORTS; IND MILESTONE.
5.2.1 JTI shall use commercially reasonable efforts consistent
with prudent business judgment to commercialize Products, by the filing of an
IND by JTI or its Sublicensee in the United States or Japan, within such period
of time as may be agreed upon by the Parties after good faith negotiations
taking into account factors relating to the Product Antigen or, if no such
period is agreed upon, [*] from the Effective Date.
5.2.2 Additionally, JTI shall actively and continuously pursue
the filing of an IND as soon as practicable after the Effective Date using
reasonable commercial efforts consistent with prudent business judgment. After
filing of an IND, JTI or its Affiliates or Sublicensees shall be required to
maintain an active IND and to use commercially reasonable efforts, consistent
with prudent business judgment, to conduct clinical trials in pursuit of
regulatory approval for a Product in the United States or Japan.
5.3 FAILURE TO MEET DUE DILIGENCE OBLIGATION. If the diligence
requirements set forth in Section 5.1 or 5.2 are not met by JTI (or its
Affiliates or Sublicensees) in the United States or Japan, JTI's rights
hereunder shall terminate upon written notice by ABX to JTI (the "Termination
Notice") and subject to Sections 5.3.1, 5.3.2 and 5.3.3 below.
5.3.1 Notwithstanding Section 5.2.1, the license granted
hereunder to JTI shall not terminate by reason of a delay in meeting the IND
milestone set forth in Section 5.1.1, to
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6.
<PAGE>
the extent that [*]
5.3.2 In the event that a dispute arises whether the diligence
requirements in this Article 5 have been met or circumstances exist which JTI
believes justifies a failure on its part to meet such obligation, the Parties
will attempt to resolve any dispute by mutual agreement during a period of
thirty (30) days following JTI's receipt of the Termination Notice.
5.3.3 In the event that the Parties are unable to resolve such
dispute pursuant to Section 5.3.2 above, such dispute shall be settled between
ABX and JTI by binding arbitration as set forth in Section 11.13. If the
arbitrator determines that JTI acted in good faith, but failed to meet its
obligations under Section 5.1 or 5.2 above, the license granted to JTI shall not
terminate unless JTI fails to cure such non-performance within a reasonable
period of time, as determined by the arbitrator.
5.4 JTI REPORTS. JTI agrees, upon request by ABX, to keep ABX informed
as to the research, development and commercialization of Products hereunder.
Without limiting the generality of foregoing, if ABX makes a written request for
such information, then within ninety (90) days of receipt of such written
request during the term of this Agreement, JTI shall provide to ABX a summary
report detailing the status and potential timing of any anticipated IND filings
under Section 5.1 above, the status of clinical and preclinical testing of any
Products, and anticipated filings of any applications for regulatory approval
from the FDA and/or its foreign equivalent for any Products in the Territory,
PROVIDED, HOWEVER, that ABX may make only one such written request per twelve
(12) month period. All JTI reports hereunder shall be treated as "Confidential
Information" of JTI as provided in Article 7 of this Agreement.
5.5 GENE THERAPY APPLICATIONS. JTI's intention as of the Effective
Date is to commercialize a Product hereunder for an application other than
Gene Therapy (as defined below) before commercializing a Product hereunder
for a Gene Therapy application. It is understood, however, that JTI may or
may not also intend to develop and sell Products for use in Gene Therapy, and
that such Gene Therapy application may ultimately be commercialized before a
Product is commercialized hereunder for a non-Gene Therapy application. As
used herein, "GENE THERAPY" shall mean the [*] by means of [*] comprising
either (a) [*]wherein such [*] in the treatment or prevention of such
disease, (b) [*] that [*] other than [*] wherein the [*] in the treatment or
prevention of such disease and wherein such [*](or [*] that [*] such [*],
which [*] is used as a [*] for the [*] or (c) [*] that [*] an [*] that [*] in
the treatment of prevention of such disease, wherein such [*] also [*] and [*]
(or [*] that [*] such [*] which [*] is used as a [*] for the [*] As used in
this Section 5.5, (i) [*]shall mean the [*] of the [*] of a human, of such [*]
into a [*] or [*] which contains such [*] into the [*] of the [*] or [*]
human, without
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7.
<PAGE>
limitation as to the [*] or [*] of [*] or the use of [*] or other [*] for
such [*] and (ii) [*] shall mean the [*] of such [*] into an [*] without
limitation as to the [*] or [*] of [*] or the use of [*] or other [*] for
such [*]
6. INTELLECTUAL PROPERTY.
6.1 MATERIALS AND DATA.
6.1.1 [*] shall solely own all [*]Subject to Section [*]
shall solely own all [*]
6.1.2 Any [*] and/or [*] from [*] by or on [*]using the [*]
the [*] of the [*] to [*]pursuant to Section [*] shall be included in the [*]
The foregoing shall be [*] and [*] for [*] of the [*] and/or the [*] of the
[*] of the [*] pursuant Section [*] unless such [*] of such [*] is [*] in
which event the foregoing shall not be to [*] to [*] any [*] to [*] at [*]
with respect thereto.
6.2 [*] INTELLECTUAL PROPERTY. [*] shall own all right, title and
interest in and to all intellectual property related to the [*]
6.3 [*] INTELLECTUAL PROPERTY. [*] shall own all right, title and
interest in and to all intellectual property related to the [*]
6.4 INTELLECTUAL PROPERTY CONCERNING OTHER INVENTIONS. Except as
otherwise provided in Sections 6.1 through 6.3, title to any inventions (and to
any patent applications, patents and other intellectual property rights related
thereto) made by a Party or Parties under this Agreement, shall follow
inventorship, which shall in turn be determined in accordance with the United
States laws of inventorship and probative evidence of the Parties.
6.5 JOINT OWNERSHIP. For purposes of clarification, to the extent that
intellectual property is jointly owned under this Agreement, both Parties shall
have the right to use, commercialize, grant and authorize sublicenses, and
otherwise exploit all such jointly-owned intellectual property without
obligation to account to, or obtain the consent of, the other joint owner. Each
Party agrees to promptly disclose to the other Party all jointly-owned
inventions under this Agreement and, on written request of the other Party, will
provide such information and assistance as may be reasonably necessary to assist
in the filing and prosecution of patent applications claiming such inventions.
The Parties hereto agree to ensure that each employee, agent, or independent
contractor that conducts research on behalf of a Party pursuant to this
Agreement will promptly disclose and assign to the Parties as joint owners any
and all rights to jointly-owned inventions. Each Party agrees to maintain
records in sufficient detail and in good scientific manner appropriate for
patent purposes and so as to properly reflect all work done and results achieved
in performing research under this Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8.
<PAGE>
6.6 COOPERATION. Each Party shall perform all reasonable acts necessary
or useful to effect the intent of this Article 6, including without limitation
preparing and executing documentation for the assignment to the other Party of
its right, title and interest in and to a given invention and related
intellectual property rights, if required hereunder. If a Party is unable, after
reasonable effort, to secure the signature of any employee, agent or independent
contractor of the other Party necessary to record, register or perfect such
Party's interest in a given invention and related intellectual property right,
then such other Party shall, and hereby does, appoint the Party owning such
invention or intellectual property right as its agent and attorney-in-fact to do
all lawfully permitted acts necessary in connection therewith with the same
legal force and effect as if executed by such other Party.
6.7 PATENT PROSECUTION.
6.7.1 SOLELY OWNED.
(a) The Party solely owning any invention or
intellectual property under this Article 6 shall have the sole right and
responsibility (but not the obligation), at its expense, to file, prosecute
and maintain all patent applications and patents thereon, and to conduct any
interferences, oppositions, or reexaminations with respect thereto, and to
request any reissues or patent term extensions thereof, subject to
subsections (b) and (c) below.
(b) Notwithstanding subsection (a) above, ABX
shall endeavor to obtain the strongest commercially reasonable patent
protection (under the circumstances) regarding those claims that are
contained in the patents and patent applications within the ABX Patent Rights
and that cover JTI's use of XenoMouse Animals under this Agreement (the
"Relevant Claims"). To this end, ABX shall have the responsibility to
prepare, file, prosecute and maintain patents and patent applications within
the ABX Patent Rights containing such Relevant Claims in at least Japan, each
of the Designated European Countries (as defined below) and the United
States, and to conduct any interferences, oppositions, reissuance requests
and reexaminations with respect to such Relevant Claims. No less than
annually, ABX shall provide JTI with an updated copy of Schedule 3 to Exhibit
A, setting forth material changes to the ABX Patent Rights.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
9.
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(i) To the extent that, in the
course of filing or prosecuting patent applications containing Relevant
Claims, ABX intends to undertake or refrain from undertaking an action that
will result in a material adverse effect to the scope of the patent
protection arising from the Relevant Claims within the United States, each of
the Designated European Countries, or Japan, ABX shall promptly inform JTI of
such intended action. In such case, the Parties will confer upon the best
course of action and, using commercially reasonable efforts, effect the same.
The Parties agree that, in connection with a determination of the best course
of action, protection of exclusivity with respect to the manufacture, use,
sale and import of Products shall be the primary criteria used in making such
determination.
(ii) After one or more Relevant
Claims are granted or issued in the United States, any of the Designated
European Countries or Japan, if ABX intends to undertake or refrain from
undertaking an action in such country (A) in the course of maintaining such
Relevant Claims, (B) in connection with the conduct of any interferences,
oppositions, or reexaminations with respect to such Relevant Claims, or (C)
in connection with requesting reissues of such Relevant Claims that will
result in the admission of invalidity or unenforceability of, or in the
abandonment of, any then-existing Relevant Claims in all issued patents
within the ABX Patent Rights in such country, then ABX shall promptly inform
JTI of such intended action. If JTI does not agree with such course of
action, then JTI shall have the right to assume the activity described in
subclauses (A), (B) or (C) above in such country with respect to such
Relevant Claims, in which case JTI shall have the right to offset all
reasonable, documented costs and expenses incurred in connection with the
assumption of such activity against royalties due to ABX on Net Sales of
Products covered by such Relevant Claims in such country under Section 3.2 or
3.7, until it offsets all such costs and expenses; PROVIDED, HOWEVER, that in
no event shall the royalty due to ABX on such sales of such Products in such
count be reduced to less than fifty percent (50%) of the royalty that would
otherwise be due to ABX pursuant to such Sections. To the extent that any
costs and expenses incurred by JTI
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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pursuant to this subsection (ii) are not fully offset by a reduction in the
royalties paid by JTI with respect to such Product in such country for any
calendar quarter under the applicable Product License Agreement, JTI shall be
entitled to carry forward the amount not so covered to subsequent quarters,
and to offset such amount against subsequent royalties due to ABX under such
Product License Agreement with respect to such Product in such country until
the full amount of such costs and expenses is offset.
(iii) ABX shall be entitled to conduct
activities under this Section 6.7.1(b) with respect to any Designated
European Country by communicating or filing documents with either a
supranational patent authority or a patent authority in an individual country
directly. For purposes of this Section 6.7.1(b), the "Designated European
Countries" shall mean all countries that are signatories to the European
Patent Convention.
(i) JTI's sole and exclusive remedy for any
failure by ABX to prepare, file, prosecute and maintain any patents and
patent applications with respect to the ABX Patent Rights and to conduct any
interferences, oppositions, and reexaminations of the ABX Patent Rights under
this Section 6.7.1(b) shall be to exercise its step-in rights set forth in
subsections (i) and (ii) above.
(c) JTI's sole and exclusive remedy for any
failure by ABX to prepare, file, prosecute and maintain any patents and
patent applications with respect to the ABX Patent Rights and to conduct any
interferences, oppositions, and reexaminations of the ABX Patent Rights under
this section 6.7.1 shall be to exercise the step in rights set forth in this
Section 6.7.1.
(d) Notwithstanding subsection (a) above, if
JTI discontinues the prosecution or maintenance of a patent application or
patent covering an invention relating to Research Program Materials and
Information, it shall promptly so notify ABX, and ABX, at its expense and in
its discretion, may undertake such prosecution or maintenance of a patent
application or patent thereon.
6.7.2 JOINTLY OWNED.
(a) JTI shall have the first right and
responsibility (but not the obligation), at its expense, to file, prosecute
and maintain all patent applications and patents (and to conduct any
interferences, oppositions, or reexaminations thereon, and to request any
reissues or patent term extensions thereof) claiming any invention that is
jointly-owned by the Parties in accordance with Section 6.5 (a "Joint
Invention") and/or its development, manufacture, use or sale.
(b) In connection with the activities of JTI
described in Section 6.7.2, JTI shall: (i) provide to ABX any patent
application filed by JTI that covers a Joint Invention promptly after such
filing; (ii) provide ABX promptly with copies of all substantive
communications received from or filed in patent office(s) with respect to
such filings; (iii) notify ABX of any interference, opposition, reexamination
request, nullity proceeding, appeal or other inter-party action and review
such action with ABX as reasonably requested; and (iv) notify ABX if JTI
intends to take or refrain from taking any action that would substantially
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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affect the scope or validity of, or rights under, such patent applications or
patents thereon (including substantially narrowing or canceling any claim
without reserving the right to file a continuing or divisional application,
abandoning any patent or not filing or perfecting the filing of any patent
application) reasonably advance of any deadlines relating thereto so that ABX
has a reasonable opportunity to review and make comments thereon.
(c) The Parties shall equally bear all
expenses of filing, prosecuting and maintaining all patent applications or
patents on Joint Inventions (and of conducting any interferences,
oppositions, or reexaminations thereon, and requesting any reissues or patent
term extensions thereof), subject to Section 6.7.2(d).
(d) If JTI (i) fails to undertake the filing
of a patent application (or continuing or divisional application) covering a
Joint Invention within ninety (90) days after a written request from ABX to
do so, (ii) intends to discontinue the prosecution or maintenance of a patent
application or patent covering a Joint Invention, or (iii) fails to initiate
or abandons a then-ongoing interference, opposition, or reexamination with
respect to any such patent application or patent or a request for any reissue
or patent term extension thereof, then ABX, at its expense and in its
discretion, may undertake the foregoing activities, in which case such patent
application and patent thereon shall be solely owned by ABX, and JTI
automatically shall be deemed to have assigned all right, title and interest
in and to such patent to ABX. JTI shall promptly notify ABX if it determines
that it will not file a patent application covering a Joint Invention or if
it intends to, or does, discontinue prosecution and maintenance of patent
applications and patents covering a Joint Invention. The Parties shall assist
each other to the extent commercially reasonable in securing intellectual
property rights resulting from Joint Inventions hereunder.
6.8 ENFORCEMENT OF PATENT RIGHTS. If either Party learns that a
Third Party is infringing or allegedly infringing any ABX Patent Rights or
any patent rights covering any Research Program Materials and Information
with respect to any Product, it shall promptly notify the other Party
thereof, and provide or disclose to the other Party any evidence of
infringement of which it is aware. The Parties shall then proceed as follows:
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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6.8.1 ABX PATENT RIGHTS. ABX shall have the exclusive right,
but not the obligation, to bring an enforcement proceeding or defend any
declaratory judgment action involving any ABX Patent Rights, at its expense.
6.8.2 RESEARCH PROGRAM MATERIALS AND INFORMATION.
(a) JTI shall have the first right, but not the
obligation, to bring an enforcement proceeding or defend any declaratory
judgment action involving any patent rights claiming the Research Program
Materials and Information relating to a Product ("Research Program Patents"), in
JTI's name at its expense.
(b) If JTI does not initiate such an enforcement
proceeding or undertake to defend such declaratory judgment action within ninety
(90) days of receiving notice or first learning thereof, then ABX shall have the
right, but not the obligation, to bring an enforcement proceeding or defend any
declaratory judgment action involving such Research Program Patents, in ABX's
name at its expense.
(c) Regardless of which Party controls an action
under this Section 6.8.2, the other Party shall have the right to join such
action, at its own expense, and shall cooperate reasonably with the controlling
Party in such action, at the controlling Party's expense, including without
limitation permitting itself to be joined as a necessary party to such action.
(d) Any recovery as a result of any such claim, suit
or proceeding under this Section 6.8.2 shall be first used to reimburse the
costs and expenses (including reasonable attorneys' fees) of the Party or
Parties in the action, second, to reimburse ABX for any amounts ABX is obligated
to pay to Third Parties in respect of such amount pursuant to applicable ABX
In-Licenses, third to reimburse JTI's and its Affiliates' and Sublicensees' lost
sales of Products within the Field because of the infringement, with the
remainder for the account of the Party or Parties that undertake such actions to
the extent of their financial participation therein; PROVIDED, HOWEVER, that to
the extent that damages are awarded for lost sales or lost profits from the sale
of Products, such damages shall be allocated between the Parties taking into
account royalties that would have been payable to ABX on the sale of such
Products.
6.8.3 JOINT PATENTS. The Parties shall consult with each other
in good faith as to the best manner in which to proceed with respect to the
enforcement of jointly-owned patents, including the conduct of actions against
an alleged infringer. In the case of such actions against alleged infringers,
any recovery awarded shall be first used to reimburse the costs and expenses
(including reasonable attorneys' fees) of the Parties in the action, and
thereafter applied to reimburse ABX for any amounts ABX is obligated to pay to
Third Parties (if any) in respect of such amount pursuant to the applicable ABX
In-Licenses, with the remainder for the account of the Party or Parties that
undertake such actions to the extent of their financial participation therein;
PROVIDED, HOWEVER, that to the extent that damages are awarded for lost sales or
lost profits from the sale of Products, such damages shall be allocated among
the Parties taking into account royalties that would have been payable to ABX on
the sale of such Products.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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6.9 INFRINGEMENT CLAIMS AGAINST ABX. If ABX is named as a party to any
claim suit or proceeding by a Third Party alleging patent infringement by ABX
arising from ABX's practice of the Licensed Technology and the ABX Materials and
Information, ABX shall so notify JTI and shall keep JTI informed of material
developments in such claim, suit or proceeding that may adversely affect the
rights of JTI under this Agreement.
6.10 INFRINGEMENT CLAIMS AGAINST JTI. If the manufacture, sale or use
of Product by JTI, its Affiliate or Sublicensee pursuant to this Agreement
results in any claim, suit or proceeding alleging patent infringement against
JTI, its Affiliate or Sublicensee, then JTI shall promptly notify ABX thereof in
writing setting forth the facts of such claim in reasonable detail. JTI shall
have the right and obligation to defend and control the defense of any such
claim, suit or proceeding, at its own expense, using counsel of its choice;
provided that ABX shall have the right to participate in such defense, at its
own expense, using counsel of its choice. JTI shall keep ABX reasonably informed
of all material developments in connection with any such claim, suit or
proceeding as it relates to the Licensed Technology. Notwithstanding the
foregoing, JTI shall not settle any claim, suit or proceeding that involves any
admission, nor otherwise make any admission, of the invalidity or
unenforceability of any patent right in the Licensed Technology.
6.11 LIMITATION. Notwithstanding any other provision in this Article 6,
the Parties acknowledge and understand that (a) ABX shall not be obligated to
prepare, file, prosecute, and maintain patents and patent applications, or to
bring or pursue enforcement proceedings or defend declaratory judgment actions
regarding the Licensed Technology if, and to the extent that, ABX is not
entitled to do so under one or more ABX In-Licenses, and (b) any rights conveyed
under this Article 6 permitting JTI to prepare, file, prosecute and maintain
certain patents and patent applications, or to bring and pursue enforcement
proceedings, or defend declaratory judgment actions, regarding the Licensed
Technology, shall be subject to all applicable ABX In-Licenses, and are conveyed
only to the extent permitted under such agreements.
6.12 PATENT MARKING. JTI agrees to mark and have its Affiliates and
Sublicensees mark all Products sold pursuant to this Agreement in accordance
with the applicable statutes or regulations in the country or countries of
manufacture and sale thereof.
6.13 GRANT BACK. Upon any expiration or termination of this Agreement,
JTI automatically shall be deemed to have granted to ABX a non-exclusive, fully
paid-up, perpetual, sublicenseable, worldwide license under all patents, patent
applications and know-how Controlled by JTI covering Antigen Inventions arising
out of JTI's activities under this Agreement with respect to the Product
Antigen, including, but not limited to, Antibodies to such Product Antigen,
Antibody Cells that express such Antibodies and Genetic Material encoding such
Antibodies. In no event shall JTI be obligated to disclose or provide to ABX any
Research Program Materials and Information relating to the Product Antigen or
any related Antigen Invention notwithstanding the foregoing license. JTI shall
execute such documents and take such further actions as are reasonably necessary
to effectuate any grant of licenses contemplated by this Section 6.13.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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7. CONFIDENTIALITY.
7.1 CONFIDENTIALITY. Except as expressly provided herein, JTI and
ABX each agree that, for the term of this Agreement and for five (5) years
thereafter, the receiving Party shall keep completely confidential and shall
not publish or otherwise disclose and shall not use for any purpose other than
as expressly permitted under this Agreement, any information furnished to it by
the other Party pursuant to this Agreement or the MRLOA ("Confidential
Information") or any other information designated the other Party's
"Confidential Information" under any other provision of this Agreement. The
Licensed Technology and the ABX Materials and Information shall be deemed to be
ABX's Confidential Information. Notwithstanding the foregoing, "Confidential
Information" shall not include any such information that the receiving Party
can establish by competent written proof:
7.1.1 was already known to the receiving Party, other than
under an obligation of confidentiality, at the time of disclosure;
7.1.2 was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving Party;
7.1.3 became generally available to the public or
otherwise part of the public domain after its disclosure and other than through
any act or omission of the receiving Party in breach of this Agreement; or
7.1.4 was subsequently lawfully disclosed to the receiving
Party by a person other than the disclosing Party or developed by the receiving
Party without reference to any information or materials disclosed by the
disclosing Party.
7.2 PERMITTED DISCLOSURE. Notwithstanding Section 7.1 above and
7.3 below, each Party may nevertheless disclose the other Party's Confidential
Information to the extent such disclosure is reasonably necessary in filing or
prosecuting patent applications, prosecuting or defending litigation, complying
with applicable governmental regulations or otherwise submitting information to
tax or other governmental authorities, making a permitted sublicense or other
exercise of its rights hereunder or conducting clinical trials, provided that
if a Party is required to make any such disclosure of the other Party's
Confidential Information, other than pursuant to a confidentiality agreement
consistent with this Agreement, it will give reasonable advance notice to such
Party of such disclosure requirement and, save to the extent inappropriate in
the case of patent applications, will use efforts consistent with prudent
business judgement to secure confidential treatment of such information prior
to its disclosure (whether through protective orders or confidentiality
agreements or otherwise).
7.3 TERMS OF AGREEMENT. Except as expressly provided in this
Article 7, neither Party shall disclose to any Third Party the material terms
of this Agreement without the prior written consent of the other Party hereto,
except to advisors, investors, licensees, sublicensees and others on a
need-to-know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Without limitation
upon any provision of this Agreement, each Party shall be responsible for the
observance by its employees, consultants and contractors of the foregoing
confidentiality obligations.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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8. INDEMNIFICATION.
8.1 JTI. Subject to ABX's compliance with Section 8.3, JTI agrees
to indemnify, defend and hold ABX and its Affiliates and their respective
directors, officers, employees and agents, harmless from and against any
losses, claims, damages, liabilities, or actions resulting directly from any
Third Party claims (collectively, "Liabilities") arising from (a) any
negligence or willful misconduct of JTI or its Affiliates or Sublicensees (or
their respective directors, officers, employees or agents), or (b) the breach
of any representations, warranties, covenants or other obligations of JTI under
this Agreement, or (c) the manufacture, use, sale, storage, transportation,
distribution or other disposition of any Product by JTI, its Affiliates or
Sublicensees, except to the extent that such Liabilities arise from (i) the
negligence or willful misconduct of ABX or its Affiliates or their respective
directors, officers, employees and agents, or (ii) ABX's breach of any of its
representations, warranties, covenants or other obligations under this
Agreement.
8.2 BY ABX. Subject to JTI's compliance with Section 8.3, ABX
agrees to indemnify, defend and hold JTI and its Affiliates and their
respective directors, officers, employees and agents harmless from and against
any Liabilities arising from (a) any negligence or willful misconduct of ABX or
its Affiliates (or their respective directors, officers, employees, agents or
Affiliates) or (b) the breach of any representations, warranties, covenants or
other obligations of ABX under this Agreement, except to the extent that such
Liabilities arise from (i) the negligence or willful misconduct of JTI or its
Affiliates or Sublicensees or their respective directors, officers, employees,
agents, or (ii) the breach of any of the representations, warranties, covenants
or other obligations of JTI under this Agreement.
8.3 INDEMNIFICATION PROCEDURES. If a Party (the "Indemnitee")
intends to claim indemnification under this Article 8, it shall promptly notify
the indemnifying Party (the "Indemnitor") in writing of any Liability in
respect of which the Indemnitee or its directors, officers, employees or agents
intend to claim such indemnification, and the Indemnitor shall have the right
to participate in, and, to the extent the Indemnitor so desires, to assume the
defense thereof with counsel mutually satisfactory to the Parties. The
indemnity obligation of this Article 8 shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action if such settlement
is effected without the consent of the Indemnitor, which consent shall not be
withheld or delayed unreasonably. The failure to deliver written notice to the
Indemnitor within a reasonable time after the commencement of any such action
shall not relieve such Indemnitor of any liability to the Indemnitee under this
Article 8, except to the extent that such failure is prejudicial to its ability
to defend such action. The Party claiming indemnification under this Article 8
and its directors, officers, employees, agents and Affiliates, shall cooperate
fully with the Indemnitor and its legal representatives in the investigation of
any action, claim or liability covered by this Article 8.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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9. REPRESENTATIONS, WARRANTIES AND COVENANTS.
9.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF ABX. ABX
represents and warrants to JTI that:
9.1.1 It has the full right and authority to enter into
this Agreement and to grant the rights and licenses granted herein;
9.1.2 It has not previously granted and will not grant any
rights inconsistent or in material conflict with the rights and licenses
granted to JTI herein;
9.1.3 To its knowledge as of the Effective Date, there are
no existing or threatened actions, suits or claims pending against ABX with
respect to the Licensed Technology or the right of ABX to enter into and
perform its obligations under this Agreement;
9.1.4 To the knowledge of ABX as of the Effective Date,
without ABX having performed any investigation with respect thereto, JTI's
practice of the Licensed Technology as contemplated herein will not infringe
the patent rights of any Third Party; provided that the foregoing
representation shall not apply to any claims or liabilities for infringement of
Third Party rights arising out of, relating to or with respect to the Product
Antigen.
9.1.5 The license granted to JTI hereunder include
sublicenses under all ABX In-Licenses in effect as of the Effective Date,
subject to Sections 2.2 and 2.3;
9.1.6 Schedule 1 to Exhibit A hereto sets forth all ABX
In-Licenses in effect as of the Effective Date and all royalties and similar
payments due to Third Party for which JTI is obligated to reimburse ABX under
Section 3.9 as of the Effective Date;
9.1.7 It has not taken or failed to take, and during the
term of this Agreement knowingly take any action or fail to take any action
that will cause a material breach of the GenPharm Cross License Agreement or of
any other ABX In-Licenses; and
9.1.8 The MRLOA is in full force and effect as of the
Effective Date, and ABX will not amend or terminate the MRLOA in any manner
that would have a material negative effect on the scope of the rights granted
to JTI hereunder.
9.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF JTI. JTI
represents and warrants to ABX that:
9.2.1 It has the full right and authority to enter into
this Agreement and to grant the rights and licenses granted herein;
9.2.2 To the knowledge of JTI as of the Effective Date,
there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof or the right of JTI to enter into and
perform its obligations under this Agreement;
9.2.3 It has not entered into and during the term of this
Agreement will not enter into any agreement inconsistent or in conflict with
this Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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9.2.4 It has not taken or failed to take, and during the
term of this Agreement knowingly take any action or fail to take any action
that will cause a material breach of the GenPharm Cross License Agreement.
9.3 DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, ABX MAKES NO REPRESENTATIONS OR EXTENDS ANY WARRANTIES TO JTI OF ANY
KIND, EITHER EXPRESS OR IMPLIED, REGARDING PRODUCTS OR THE LICENSED TECHNOLOGY,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND VALIDITY OF TECHNOLOGY CLAIMS, ISSUED OR PENDING.
10. TERM AND TERMINATION.
10.1 EFFECTIVENESS. This Agreement shall become effective as of
the Effective Date and the license rights granted by ABX under Article 2 above
shall be in full force and effect as of such date.
10.2 TERM. Unless earlier terminated pursuant to the other
provisions of this Article 10, this Agreement shall continue in full force and
effect until the later of the expiration of the last to expire patent within
the Licensed Technology claiming the manufacture, use or sale of a Product, or
the twentieth anniversary of the Effective Date. The licenses granted under
Article 2 shall survive the expiration (but not an earlier termination) of this
Agreement; PROVIDED THAT such licenses shall in such event become nonexclusive.
10.3 TERMINATION FOR BREACH. Either Party may terminate this
Agreement in the event the other Party shall have materially breached or
defaulted in the performance of any of its material obligations hereunder, and
such breach or default shall have continued for sixty (60) days after written
notice thereof was provided to the breaching Party by the nonbreaching Party
that terminates the Agreement as to the breaching Party. Any termination shall
become effective at the end of such sixty (60) day period unless the breaching
Party has cured any such breach or default prior to the expiration of the sixty
(60) day period. However, if the Party alleged to be in breach of this
Agreement disputes such breach within such sixty day period, the other Party
shall not have the right to terminate this Agreement unless it has been
determined by an arbitration proceeding in accordance with Section 11.13 below
that the allegedly breaching Party did in fact materially breach this
Agreement, and the breaching Party fails to cure such breach within thirty (30)
days following the final decision of the arbitrators or such other time as
directed by the arbitrators.
10.4 TERMINATION BY JTI. JTI may terminate this Agreement and the
license granted herein at any time, by providing ABX ninety (90) days prior
written notice.
10.5 EFFECT OF TERMINATION.
10.5.1 ACCRUED OBLIGATIONS AND RIGHTS. Expiration or any
termination of this Agreement for any reason shall not relieve either Party of
any obligation accruing prior to such expiration or termination or release
either Party from any liability which at the time of such expiration or
termination has already accrued to such Party. Such termination or expiration
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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shall not preclude either Party from pursuing any rights and remedies it may
have hereunder or at law or in equity which accrued to it prior to such
expiration or termination.
10.5.2 CONFIDENTIAL INFORMATION. Each Party shall, within
sixty (60) days of termination or expiration of this Agreement, return all
Confidential Information of the other Party in its possession; provided,
however, that each Party may return an archival copy of such Confidential
Information solely for determining the scope of its confidentiality obligations
hereunder.
10.5.3 ABX MATERIALS AND INFORMATION. Upon any termination
or expiration of this Agreement, JTI shall either return or destroy all ABX
Materials and Information in its possession that are solely useful for the
practice of the license granted under Section 2.1, as requested by ABX. Any
destruction of any ABX Materials and Information shall be in compliance with
all applicable local laws, rules and regulations. Following such destruction,
JTI shall promptly deliver to ABX a written certification of such destruction.
10.5.4 STOCK ON HAND; SUBLICENSES. In the event this
Agreement is terminated for any reason, JTI and its Affiliates and Sublicensees
shall have the right to sell or otherwise dispose of the stock of any Product
subject to this Agreement then on hand, subject to any royalty obligations
hereunder. Upon termination of this Agreement by ABX for any reason, any
Sublicense granted by JTI hereunder shall survive, provided that upon request
by ABX, such Sublicensee promptly agrees in writing to be bound by the
applicable terms of this Agreement and of all applicable ABX In-Licenses.
10.5.5 RETURN OF KNOW-HOW; TERMINATION OF LICENSES.
(a) After the effective date of termination by ABX
under Section 10.3 or termination by JTI under Section 10.4 above, (i) JTI
shall have no further obligations to ABX with respect to the development and
commercialization of Products in the Field in the Territory, (ii) all
underlying rights to the Licensed Technology (including without limitation such
rights pertaining to the Products in the Field in the Territory) shall be the
sole property of ABX, and (iii) all of JTI's license rights to the Licensed
Technology with respect to the Product shall terminate and revert to ABX.
(b) In the event that JTI terminates this
Agreement under Section 10.3 above, following the effective date of such
termination, (i) JTI shall have no further obligations to ABX with respect to
the development and commercialization of Products in the Field in the
Territory, subject to subsection (iii) below, (ii) all of JTI's rights under
this Agreement, including without limitation the license granted to JTI
pursuant to Article 2, shall remain in full force and effect, and (iii) the
license granted to JTI pursuant to Article 2 shall continue to be subject to
the royalty obligations set forth in Articles 3 and 4 above. ABX, at ABX's
expense, shall execute all documents and make any filings necessary to perfect
such license rights to JTI; PROVIDED, HOWEVER, that JTI shall be entitled to
deposit any royalties due to ABX hereunder into an interest-bearing escrow
account until such default is cured or the resulting damages are settled
pursuant to Section 11.13.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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10.5.6 OPTION AGREEMENT. This Agreement shall not be
affected by the expiration or termination of the Option Agreement. In the
event the Option Agreement terminates prior to expiration or termination of
this Agreement, the rights and obligations of the Parties under Article 6
thereof shall be deemed to continue in full force and effect until [*] years
after expiration or termination of this Agreement.
10.5.7 SURVIVAL. Sections 4.2, 4.3, 4.5 and 10.5 and
Articles 6 (except Sections 6.7.1(b), 6.8.3, 6.9, and 6.10), 7, 8, 9 and 11
shall survive the expiration and any termination of this Agreement for any
reason.
11. MISCELLANEOUS PROVISIONS
11.1 GOVERNING LAWS. This Agreement shall be interpreted and
construed in accordance with the laws of the State of California, without
regard to conflicts of law principles.
11.2 WAIVER. It is agreed that no waiver by a Party of any breach
or default of any of the covenants or agreements herein set forth shall be
deemed a waiver as to any subsequent and/or similar breach or default.
11.3 ASSIGNMENTS. Neither this Agreement nor any right or
obligation hereunder may be assigned or delegated, in whole or part, by either
Party without the prior written consent of the other; provided that such
written consent shall not be required where: (a) either Party assigns this
Agreement to any entity that acquires substantially all of the assets to which
this Agreement relates, (b) JTI assigns this Agreement to a Majority-Owned
Affiliate of JTI or (c) ABX assigns this Agreement to an Affiliate. The terms
and conditions of this Agreement shall be binding on and inure to the benefit
of the permitted successors and assigns of the Parties. Notwithstanding the
foregoing, ABX shall not be obligated without its written consent to send
XenoMouse Animals to any Third Party or Affiliate of JTI, including without
limitation any successor-in-interest of JTI. Any assignment not in conformance
with this Section 11.3 shall be null, void and of no legal effect.
11.4 INDEPENDENT CONTRACTORS. The relationship of the Parties is
that of independent contractors. The Parties are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
11.5 COMPLIANCE WITH LAWS. In exercising their rights under this
Agreement, the Parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this Agreement.
11.6 FURTHER ACTIONS. Each Party agrees to execute, acknowledge
and deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
20.
<PAGE>
11.7 NO IMPLIED OBLIGATIONS. Except as expressly provided herein,
nothing in this Agreement shall be deemed to require JTI to exploit the
Licensed Technology or to prevent JTI from commercializing products similar to
or in competition with any Product, in addition to or in lieu of such Products.
11.8 NOTICES. Any notice, request, approval or consent required or
permitted to be given between the parties hereto shall be given in writing, and
shall be deemed to have been properly given if delivered in person, transmitted
by telecopy with machine confirmation of transmission and confirmation by
personal delivery, first class certified mail or courier), or mailed by first
class certified mail to the other party at the appropriate address set forth
below, or to such other address as may be designated in writing by a party from
time to time in accordance with this Agreement.
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranoman 2-chome
Minato-Ku, Tokyo 105
Japan
Fax: 011-81-3-5-479-0321
Attn: Vice President
Pharmaceutical Division
With a copy to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Fax: (212) 644-4051
Attn: Neal N. Beaton, Esq.
Abgenix, Inc.: Abgenix, Inc.
7601 Dumbarton Circle
Fremont, California 94555
Attn: President
Fax: (510) 608-6511
With a copy to: Cooley Godward LLP
3000 El Camino Real
Five Palo Alto Square
Palo Alto, CA 94306-2155
Fax: (650) 857-0663
Attn: Robert L. Jones, Esq.
11.9 EXPORT LAWS. Notwithstanding anything to the contrary
contained herein, all obligations of the United States and Japan, of ABX and
JTI are subject to prior compliance with the export regulations and such other
United States or Japanese laws and regulations as may be applicable, and to
obtaining all necessary approvals required by the applicable agencies of the
governments of the United States and Japan. JTI shall be responsible for
obtaining such
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
21.
<PAGE>
approvals, and shall use efforts consistent with prudent business judgment to
obtain such approvals.
11.10 SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision and the parties shall discuss in good faith
appropriate revised arrangements.
11.11 FORCE MAJEURE. Nonperformance of any Party (except for
payment obligations) shall be excused to the extent that performance is
rendered impossible by strike, fire, earthquake, flood, governmental acts or
orders or restrictions, failure of suppliers, or any other reason where failure
to perform is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the nonperforming Party.
11.12 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL ANY PARTY HERETO
BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER.
11.13 DISPUTE RESOLUTION; ARBITRATION. The Parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between the Chief Executive Officer of
ABX and the Vice President of the Pharmaceutical Division of JTI. Any dispute
under this Agreement which is not settled after such meeting shall be finally
settled by binding arbitration, conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association by three (3)
arbitrators appointed in accordance with said rules. The arbitration
proceedings and all pleadings and written evidence shall be in the English
language. Any written evidence originally in a language other than English
shall be submitted in English translation accompanied by the original or a true
copy thereof. The costs of the arbitration, including administrative and
arbitrators' fees, shall be shared equally by the parties to the arbitration.
Each Party shall bear its own costs and attorneys' and witness' fees; PROVIDED
THAT the prevailing party in any arbitration, as determined by the arbitration
panel, shall be entitled to an award against the other party in the amount of
the prevailing party's costs and reasonable attorneys' fees. A disputed
performance or suspended performances pending the resolution of the arbitration
must be completed within thirty (30) days following the final decision of the
arbitrators. Any arbitration subject to this Section 11.13 shall be completed
within six (6) months from the filing of notice of a request for such
arbitration.
11.14 COMPLETE AGREEMENT. It is understood and agreed between ABX
and JTI that this Agreement and the Option Agreement, together with all
Schedules and Exhibits thereto, constitute the entire agreement, both written
and oral, between the Parties with respect to the subject matter hereof, and
supersede and cancel all prior agreements respecting the subject matter hereof,
either written or oral, expressed or implied. No amendment or change hereof or
addition hereto shall be effective or binding on either of the parties hereto
unless reduced to writing and executed by the respective duly authorized
representatives of ABX and JTI.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
22.
<PAGE>
11.15 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
11.16 HEADINGS. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for
convenience of reference only and shall not affect its meaning or
interpretation.
IN WITNESS WHEREOF, the Parties have executed this Agreement,
through their respective officers hereunto duly authorized, as of the day and
year first above written.
ABGENIX, INC. JAPAN TOBACCO INC.
By:______________________ By:_________________________
Name:____________________ Name:_______________________
Title:___________________ Title:______________________
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
23.
<PAGE>
EXHIBIT A
COMMON DEFINITIONS
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
24.
<PAGE>
<TABLE>
<S> <C>
1. DEFINITIONS..................................................................................................1
1.1 "Product Antigen"...................................................................................1
2. LICENSE GRANT.................................................................................................1
2.1 Grant of Rights; Covenant Regarding Research Products...............................................1
2.2 Third Party Rights..................................................................................2
2.3 Sublicenses.........................................................................................2
3. CONSIDERATION.................................................................................................2
3.1 License Fee.........................................................................................2
3.2 Royalties...........................................................................................2
3.3 [*].................................................................................................2
3.4 Single Royalty......................................................................................3
3.5 [*].................................................................................................3
3.6 Combination Products................................................................................3
3.7 [*] Products........................................................................................3
3.8 Termination of Royalties............................................................................4
3.9 Payments to Third Parties by ABX....................................................................4
3.10 Royalties Payable by JTI...........................................................................4
4. ACCOUNTING AND RECORDS........................................................................................4
4.1 Royalty Reports; Payments, Invoices.................................................................4
4.2 Records; Inspection.................................................................................4
4.3 Currency Conversion.................................................................................5
4.4 Late Payments.......................................................................................5
4.5 [*].................................................................................................5
5. DUE DILIGENCE.................................................................................................6
5.1 Funding and Conduct.................................................................................6
5.2 Reasonable Commercial Efforts; IND Milestone........................................................6
5.3 Failure to Meet Due Diligence Obligation............................................................6
5.4 JTI Reports.........................................................................................7
5.5 Gene Therapy Applications...........................................................................7
6. INTELLECTUAL PROPERTY.........................................................................................8
6.1 Materials and Data..................................................................................8
6.2 [*] Intellectual Property...........................................................................8
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<S> <C>
6.3 [*] Intellectual Property...........................................................................8
6.4 Intellectual Property Concerning Other Inventions...................................................8
6.5 Joint Ownership.....................................................................................8
6.6 Cooperation.........................................................................................9
6.7 Patent Prosecution..................................................................................9
6.8 Enforcement of Patent Rights.......................................................................11
6.9 Infringement Claims Against ABX....................................................................13
6.10 Infringement Claims Against JTI...................................................................13
6.11 Limitation........................................................................................13
6.12 Patent Marking....................................................................................13
6.13 Grant Back........................................................................................13
7. CONFIDENTIALITY..............................................................................................14
7.1 Confidentiality....................................................................................14
7.2 Permitted Disclosure...............................................................................14
7.3 Terms of Agreement.................................................................................14
8. INDEMNIFICATION..............................................................................................15
8.1 JTI................................................................................................15
8.2 By ABX.............................................................................................15
8.3 Indemnification Procedures.........................................................................15
9. REPRESENTATIONS, WARRANTIES AND COVENANTS....................................................................16
9.1 Representations, Warranties and Covenants of ABX...................................................16
9.2 Representations, Warranties and Covenants of JTI...................................................16
9.3 Disclaimer.........................................................................................17
10. TERM AND TERMINATION........................................................................................17
10.1 Effectiveness.....................................................................................17
10.2 Term..............................................................................................17
10.3 Termination for Breach............................................................................17
10.4 Termination by JTI................................................................................17
10.5 Effect of Termination.............................................................................17
11. MISCELLANEOUS PROVISIONS....................................................................................19
11.1 Governing Laws....................................................................................19
11.2 Waiver............................................................................................19
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2.
<PAGE>
<TABLE>
<S> <C>
11.3 Assignments.......................................................................................19
11.4 Independent Contractors...........................................................................19
11.5 Compliance with Laws..............................................................................19
11.6 Further Actions...................................................................................19
11.7 No Implied Obligations............................................................................20
11.8 Notices...........................................................................................20
11.9 Export Laws.......................................................................................20
11.10 Severability.....................................................................................21
11.11 Force Majeure....................................................................................21
11.12 No Consequential Damages.........................................................................21
11.13 Dispute Resolution; Arbitration..................................................................21
11.14 Complete Agreement...............................................................................21
11.15 Counterparts.....................................................................................22
11.16 Headings.........................................................................................22
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3.
<PAGE>
EXECUTION COPY
EXHIBIT C
[*]
[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT D
PERMITTED TRANSFEREES
<TABLE>
<S> <C>
[*] [*]
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<S> <C>
1. DEFINITIONS..............................................................................................1
2. RESEARCH LICENSE; SUPPLY OF MICE; MATERIALS OWNERSHIP....................................................1
2.1 Research License................................................................................1
2.2 Use of XenoMouse Animals and ABX Materials and Information......................................3
2.3 Material Transfer Terms.........................................................................4
2.4 No Research by ABX..............................................................................5
2.5 Third Party Rights..............................................................................5
2.6 Updated Lists of [*]............................................................................5
3. OPTION TO ENTER INTO PRODUCT LICENSE AGREEMENT...........................................................6
3.1 Option..........................................................................................6
3.2 Designation of Product Antigens.................................................................6
3.3 Conditions of Options...........................................................................8
3.4 Exercise........................................................................................9
4. CONSIDERATION............................................................................................9
4.1.1 Payment................................................................................9
5. INTELLECTUAL PROPERTY...................................................................................10
5.1 Materials and Data.............................................................................10
5.2 [*] Intellectual Property......................................................................10
5.3 [*] Intellectual Property......................................................................10
5.4 Intellectual Property Concerning Other Inventions..............................................10
5.5 Joint Ownership................................................................................10
5.6 Cooperation....................................................................................11
5.7 Patent Prosecution.............................................................................11
6. CONFIDENTIALITY.........................................................................................15
6.1 Confidentiality................................................................................15
6.2 Permitted Disclosure...........................................................................15
6.3 Terms of Agreement.............................................................................16
6.4 Scientific Publications........................................................................16
7. INDEMNIFICATION.........................................................................................16
7.1 By JTI.........................................................................................16
7.2 By ABX.........................................................................................17
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
7.3 Indemnification Procedures.....................................................................17
8. REPRESENTATIONS, WARRANTIES AND COVENANTS...............................................................17
8.1 Representations, Warranties and Covenants of ABX...............................................17
8.2 Representations, Warranties and Covenants of JTI...............................................17
8.3 Disclaimer.....................................................................................18
9. TERM; TERMINATION.......................................................................................18
9.1 Term...........................................................................................18
9.2 Termination by JTI.............................................................................18
9.3 Termination for Breach.........................................................................18
9.4 Effect of Expiration or Termination............................................................18
10. MISCELLANEOUS PROVISIONS................................................................................19
10.1 Governing Laws.................................................................................19
10.2 Waiver.........................................................................................19
10.3 Assignments....................................................................................19
10.4 Independent Contractors........................................................................20
10.5 Compliance with Laws...........................................................................20
10.6 Further Actions................................................................................20
10.7 No Implied Obligations.........................................................................20
10.8 Notices........................................................................................20
10.9 Export Laws....................................................................................21
10.10 Severability...................................................................................21
10.11 Force Majeure..................................................................................21
10.12 No Consequential Damages.......................................................................21
10.13 Dispute Resolution; Arbitration................................................................21
10.14 Complete Agreement.............................................................................22
10.15 Counterparts...................................................................................22
10.16 Headings.......................................................................................22
</TABLE>
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXECUTION COPY
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
AMENDED AND RESTATED FIELD LICENSE
THIS AMENDED AND RESTATED FIELD LICENSE (the "Agreement"), effective
December 31, 1999 (the "Effective Date"), is made by and among ABGENIX, INC., a
Delaware corporation ("ABX"), JT AMERICA INC., a New York corporation ("JTA")
and XENOTECH L.P., a California partnership ("XT"), with reference to the
following facts and circumstances. ABX, JTA and XT may be referred to herein
each individually as a "Party" and jointly as the "Parties."
A. WHEREAS, in 1991, Cell Genesys, Inc. ("CGI") and JT
Immunotech USA Inc. ("Immunotech"), a wholly-owned subsidiary of JTA, which is
itself a wholly owned subsidiary of Japan Tobacco Inc. ("JTI"), formed XT;
B. WHEREAS, CGI, Immunotech and XT entered into that certain
Collaboration Agreement effective June 12, 1991, as amended (the "Collaboration
Agreement"), pursuant to which those parties conducted a sponsored research
project for the development of transgenic animals capable of producing human
monoclonal antibodies;
C. WHEREAS, CGI, Immunotech and XT entered into that certain
Field License effective June 12, 1991, as amended on March 22, 1996 and June
28, 1996 (the "Prior Field License"), to govern those parties' rights with
respect to the use of technology created pursuant to or practiced in the
context of the Collaboration Agreement ("Project Technology") in the Field (as
defined below);
D. WHEREAS, CGI, Immunotech and XT entered into that certain
Expanded Field License effective June 12, 1991, as amended on June 28, 1996
(the "Expanded Field License"), to govern those parties' rights with respect to
the use of Project Technology in the Expanded Field (as defined in the Expanded
Field License);
E. WHEREAS, CGI assigned to ABX (its wholly-owned subsidiary at
such time), its interest in XT and in the Collaboration Agreement, the Prior
Field License and the Expanded Field License, and in 1997, Immunotech merged
into JTA and its interest in XT and in the Collaboration Agreement, the Prior
Field License and the Expanded Field License was assigned to JTA by operation
of law;
F. WHEREAS, XT, JTA and ABX have agreed to terminate the
Collaboration Agreement pursuant to the terms of that certain Agreement to
Terminate the Collaboration Agreement of even date herewith (the "Collaboration
Termination Agreement"), and to further amend the Expanded Field License
pursuant to that certain Amendment to the Expanded Field License of even date
herewith (the "Expanded Field Amendment"); and
G. WHEREAS, XT, JTA and ABX now desire to amend and restate the
terms of the Prior Field License pursuant to the terms of this Agreement and
that certain Amended and Restated Field License entered into between XT and ABX
of even date herewith;
NOW, THEREFORE, the Parties hereby agree as follows:
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1.
<PAGE>
ARTICLE I
DEFINITIONS
The following definitions shall apply to capitalized terms used herein, which
are modified from those provided in the Prior Field License as appropriate to
reflect the change in identities of the Parties hereto.
1.1 "ABX AMENDED LICENSE" shall mean the Amended and Restated
Field License entered into by and between ABX and XT as of even date herewith.
1.2 "AFFILIATE" shall mean any entity which controls, is
controlled by or is under common control with any one of the Parties. An entity
shall be regarded as in control of another entity if it owns or controls at
least fifty percent (50%) of the shares of the subject entity entitled to vote
in the election of directors (or, in the case of an entity that is not a
corporation, for the election of the corresponding managing authority);
provided that the government of Japan shall not be deemed an Affiliate of JTA.
1.3 "CONTROLLED" OR "CONTROL" shall mean the ability to grant
licenses or sublicenses with respect to a technology or material as provided in
this Agreement without breaching any agreement or other arrangement with a
Third Party.
1.4 "FIELD" shall mean the [*] and the [*] or in [*]
1.5 "GENETIC MATERIAL" shall mean a nucleotide sequence,
including DNA, RNA, and complementary and reverse complementary nucleotide
sequences thereto, whether coding or non-coding and whether intact or a
fragment.
1.6 "INDEPENDENT TECHNOLOGY" shall mean Patent Rights and
Know-How developed by JTA with respect to Monoclonal Antibodies during the term
of the Sponsored Research, independently of the Sponsored Research.
1.7 "KNOW-HOW" shall mean all information in the possession and
Control of JTA constituting methods, prototypes, techniques, materials
(including mice) and data for the discovery, development and creation of a
Monoclonal Antibody producing mouse.
1.8 "LICENSED PRODUCT" shall mean Monoclonal Antibodies, Genetic
Material encoding such Monoclonal Antibodies or any fragment of such Monoclonal
Antibodies, the Monoclonal Antibody-producing mouse, and any discrete product
incorporating a Monoclonal Antibody or Genetic Material encoding a Monoclonal
Antibody or any fragment of a Monoclonal Antibody.
1.9 "MAJORITY-OWNED AFFILIATE OF JTI" shall mean an entity of
which JTI owns, directly or indirectly, more than [*] of the shares of such
entity entitled to vote in the election of directors or corresponding
managing authority.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2.
<PAGE>
1.10 "MONOCLONAL ANTIBODIES" shall mean antibodies at least
containing [*] to those [*] which are derived from [*] Such [*] may include,
without limitation, the [*] and the introduction of [*]
1.11 "PATENT RIGHTS" shall mean (a) all patent applications and
patents Controlled by JTA; (b) any continuations, divisionals, reexaminations,
reissues or extensions of any of (a) above; and (c) any foreign counterparts
issued or issuing on any of (a) or (b) above.
1.12 "PROJECT TECHNOLOGY" shall mean all Patent Rights and
Know-How which resulted from the Sponsored Research.
1.13 "SPONSORED RESEARCH" shall mean research funded by XT and
conducted pursuant to the Collaboration Agreement.
ARTICLE II
FIELD LICENSE SUPERSEDED
The Field License is hereby superseded and replaced in its entirety by
this Agreement and by the ABX Amended License.
ARTICLE III
GRANT OF RIGHTS
3.1 RIGHTS OF XT.
(a) JTA hereby grants to XT an exclusive worldwide
license under the Project Technology and the Independent Technology. The
foregoing grant of rights with respect to the Independent Technology is to
develop, use, modify, make, have made and sell or otherwise dispose of any
product or technology which results from the Sponsored Research, within the
Field. The remainder of the foregoing grant of rights is to develop, use,
modify, make, have made and sell or otherwise dispose of any product or
technology within the Field, regardless of whether such product or technology
resulted from the Sponsored Research.
(b) The rights granted in this Article 3 shall be
irrevocable, perpetual, royalty-free and fully assignable and sublicenseable.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3.
<PAGE>
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 GOVERNING LAWS. This Agreement shall be interpreted and
construed in accordance with the laws of the State of California, USA, without
regard to conflict of laws principles.
4.2 WAIVER. It is agreed that no waiver by a Party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
4.3 ASSIGNMENT. Neither this Agreement nor any right or
obligation hereunder may be assigned or delegated, in whole or part, by a Party
without the prior written consent of the other Party; provided that such
written consent shall not be required where: (a) either Party assigns this
Agreement to any entity that acquires substantially all of the assets to which
this Agreement relates, (b) JTA assigns this Agreement to a Majority-Owned
Affiliate of JTI or (c) ABX assigns this Agreement to an Affiliate. The terms
and conditions of this Agreement shall be binding on and inure to the benefit
of the permitted successors and assigns of the Parties. Any assignment not in
conformance with this Section 4.3 shall be null, void and of no legal effect.
For clarification, this Agreement shall survive any dissolution of XT, provided
that XT assigns this Agreement as permitted hereunder prior to or upon such
dissolution.
4.4 INDEPENDENT CONTRACTORS. The relationship of the Parties is
that of independent contractors. The Parties shall not be deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
4.5 COMPLIANCE WITH LAWS. In exercising their rights under this
Agreement, the Parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this Agreement.
4.6 FURTHER ACTIONS. Each Party agrees to execute, acknowledge
and deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
4.7 NOTICES. Any notice, request, approval or consent required or
permitted to be given between the Parties hereto shall be given in writing, and
shall be deemed to have been properly given if delivered in person, transmitted
by telecopy (with machine confirmation of transmission and confirmation by
personal delivery, first class certified mail or courier), or mailed by first
class certified mail to the other Party at the appropriate address set forth
below, or to such other address as may be designated in writing by a Party from
time to time in accordance with this Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4.
<PAGE>
JT America Inc.: JT America Inc.
375 Park Avenue
New York, NY 10152
Fax: (212) 319-8993
Attn: President
With a copy to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Fax: (212) 644-4051
Attn: Neal N. Beaton, Esq.
Akros Pharma Inc.
1400 Fashion Island Boulevard
Suite 910
San Mateo, CA 94404
Fax: (650) 312-8028
Attn: President
Abgenix, Inc. or Abgenix, Inc.
Xenotech L.P.: 7601 Dumbarton Circle
Fremont, CA 94555
Fax: (510) 608-6511
Attn: President
With a copy to: Cooley Godward LLP
3000 El Camino Real
Five Palo Alto Square
Palo Alto, CA 94306-2155
Fax: (650) 857-0663
Attn: Robert L. Jones, Esq.
4.8 EXPORT LAWS. Notwithstanding anything to the contrary
contained herein, all obligations of the Parties hereunder are subject to prior
compliance with the export regulations and such other laws and regulations as
may be applicable, and to obtaining all necessary approvals required by the
applicable governmental.
4.9 SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision and the parties shall discuss in good faith
appropriate revised arrangements.
4.10 FORCE MAJEURE. Nonperformance of any Party shall be excused
to the extent that performance is rendered impossible by strike, fire,
earthquake, flood, governmental acts or orders or restrictions, failure of
suppliers, or any other reason where failure to perform is beyond the
reasonable control, and not caused by the negligence, intentional conduct or
misconduct of the non-performing Party.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5.
<PAGE>
4.11 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL ANY PARTY HERETO
BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER.
4.12 DISPUTE RESOLUTION; ARBITRATION. The Parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between the President of Xenotech, Inc.
and the President of JTA. Any dispute under this Agreement which is not settled
after such meeting shall be finally settled by binding arbitration, conducted
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association by three (3) arbitrators appointed in accordance with said rules.
The arbitration proceedings and all pleadings and written evidence shall be in
the English language. Any written evidence originally in a language other than
English shall be submitted in English translation accompanied by the original
or a true copy thereof. The costs of the arbitration, including administrative
and arbitrators' fees, shall be shared equally by the Parties. Each Party shall
bear its own costs and attorneys' and witness' fees; PROVIDED THAT the
prevailing Party in any arbitration, as determined by the arbitration panel,
shall be entitled to an award against the other Party in the amount of the
prevailing party's costs and reasonable attorneys' fees. A disputed performance
or suspended performances pending the resolution of the arbitration must be
completed within thirty (30) days following the final decision of the
arbitrators. Any arbitration subject to this Section 4.12 shall be completed
within six (6) months from the filing of notice of a request for such
arbitration.
4.13 COMPLETE AGREEMENT. It is understood and agreed between the
Parties that this Agreement, the ABX Amended License, the Collaboration
Termination Agreement and the Expanded Field License (as amended by the
"Expanded Field Amendment") constitute the entire agreement, both written and
oral, between the Parties with respect to the subject matter hereof, and
supersede and cancel all prior agreements respecting the subject matter hereof,
either written or oral, expressed or implied. No amendment or change hereof or
addition hereto shall be effective or binding on either of the Parties unless
reduced to writing and executed by the respective duly authorized
representatives of each Party.
4.14 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
4.15 HEADINGS. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for
convenience of reference only and shall not affect its meaning or
interpretation.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6.
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers as of the date first set
forth above.
JT AMERICA INC. XENOTECH, INC. AS
GENERAL PARTNER OF
XENOTECH, L.P.
By: /s/ Shuji Kondo /s/ Raymond M. Withy
--------------- --------------------
Shuji Kondo Raymond M. Withy
President Chairman
ABGENIX, INC.
By: /s/ R. Scott Greer
-------------------------------------
R. Scott Greer
President and Chief Executive Officer
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7.
<PAGE>
EXECUTION COPY
AGREEMENT TO TERMINATE THE COLLABORATION AGREEMENT
This AGREEMENT TO TERMINATION THE COLLABORATION AGREEMENT (this
"Agreement"), effective December 31, 1999 (the "Effective Date") is made by and
among ABGENIX, INC., a Delaware corporation ("ABX") and JT AMERICA Inc., a New
York corporation ("JTA") and XENOTECH L.P., a California limited partnership
("XT"), with reference to the following facts and circumstances. ABX, JTA and XT
may be referred to herein each individually as a "Party" and jointly as the
"Parties."
RECITALS
A. WHEREAS, Cell Genesys, Inc. ("CGI"), the predecessor company of ABX,
and JT Immunotech USA, Inc. ("Immunotech"), a wholly-owned subsidiary of JTA
(which is itself a wholly-owned subsidiary of Japan Tobacco Inc. ("JTI")),
formed XT in 1991 to develop genetically modified strains of mice which can
produce fully human monoclonal antibodies ("XenoMouse Animals"), and to
commercialize products generated therefrom;
B. WHEREAS, CGI, Immunotech and XT entered into that certain
Collaboration Agreement effective June 12, 1991, as amended (the "Collaboration
Agreement"), pursuant to which those parties conducted a sponsored research
project for the development of transgenic animals capable of producing human
monoclonal antibodies;
C. WHEREAS, CGI, Immunotech and XT entered into that certain Field
License effective June 12, 1991, as amended (the "Prior Field License") to
govern those parties' rights with respect to the use of technology created
pursuant to or practiced in the context of the Collaboration Agreement ("Project
Technology") in the Field (as defined below);
D. WHEREAS, CGI, Immunotech and XT entered into that certain Expanded
Field License effective June 12, 1991, as amended (the "Expanded Field License")
to govern those parties' rights with respect to the use of Project Technology in
the Expanded Field (as defined in the Expanded Field License);
E. WHEREAS, CGI assigned to ABX (its wholly-owned subsidiary at such
time), its interest in XT and in the Collaboration Agreement, the Prior Field
License and the Expanded Field License and in 1997, Immunotech merged into JTA
and its interest in XT and in the Collaboration Agreement, the Prior Field
License and the Expanded Field License was assigned to JTA by operation of law;
F. WHEREAS, XT, JTA and ABX have amended and restated the terms of the
Prior Field License pursuant to the terms of that certain Amended and Restated
Field License entered into between XT, JTA and ABX of even date herewith (the
"Amended and Restated Field License") and have further amended the Expanded
Field License pursuant to that certain Amendment to the Expanded Field License
of even date therewith;
G. WHEREAS, the Parties desire to terminate the Collaboration Agreement
pursuant to the terms and conditions set forth in this Agreement;
1.
<PAGE>
NOW THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, the Parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, capitalized terms set forth in this
Agreement and not otherwise defined herein shall have the meaning set forth in
the Amended and Restated Field License.
1.1 "OPTION AGREEMENT" means that certain Multi-Antigen Research
License and Option Agreement by and between JTI and ABX effective December 31,
1999.
2. EARLY TERMINATION OF THE COLLABORATION AGREEMENT
2.1 The Parties hereby agree to terminate the Collaboration Agreement
effective as of the Effective Date. Notwithstanding Section 10.6(b) of the
Collaboration Agreement, only the following Sections and Articles shall survive
such termination: Sections 6.1, 6.2 (solely with respect to patent applications
that have been filed prior to the Effective Date), 6.3 (solely with respect to
patents for which a Party has exercised its rights with respect to abandoned
patent applications or patents during the term of the Collaboration Agreement),
6.4, 10.6(a), 10.7, 11.3 (as to activities conducted during the term of the
Collaboration Agreement), 11.4, 11.7, 11.8, and 11.10, 11.11 and 11.13. Except
as expressly provided in this Section 2.1, no other provisions of the
Collaboration Agreement shall survive termination thereof; except that the
confidentiality obligations of Article 8 shall be superseded by and survive as
provided in Article 6 of the Option Agreement.
3. INDEMNIFICATION
3.1 BY JTA. Subject to ABX's compliance with Section 3.3, JTA agrees to
indemnify, defend and hold ABX and its Affiliates and their directors, officers,
employees, and agents harmless from and against any losses, claims, damages,
liabilities, or actions resulting directly from any Third Party claims
(collectively, "Liabilities") arising from the breach of any representations,
warranties, covenants or other obligations of JTA under this Agreement, except
to the extent that such Liabilities arise from ABX's breach of any of its
representations, warranties, covenants or other obligations under this
Agreement.
3.2 BY ABX. Subject to JTA's compliance with Section 3.3, ABX agrees to
indemnify, defend and hold JTA and its Affiliates and their directors, officers,
employees, and agents harmless from and against any Liabilities arising from the
breach of any representations, warranties, covenants or other obligations of ABX
under this Agreement, except to the extent that such Liabilities arise from
JTA's breach of any of its representations, warranties, covenants or other
obligations under this Agreement.
3.3 INDEMNIFICATION PROCEDURES. If a Party (the "Indemnitee") intends
to claim indemnification under this Article 3, it shall promptly notify the
indemnifying Party (the "Indemnitor") in writing of any Liability in respect of
which the Indemnitee or its directors,
2.
<PAGE>
officers, employees or agents intend to claim such indemnification, and the
Indemnitor shall have the right to participate in, and, to the extent the
Indemnitor so desires, to assume the defense thereof with counsel mutually
satisfactory to the Parties. The indemnity obligation of this Article 3 shall
not apply to amounts paid in settlement of any loss, claim, damage, liability
or action if such settlement is effected without the consent of the
Indemnitor, which consent shall not be withheld or delayed unreasonably. The
failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any such action shall not relieve such Indemnitor
of any liability to the Indemnitee under this Article 3, except to the extent
that such failure is prejudicial to its ability to defend such action. The
Party claiming indemnification under this Article 3 and its directors,
officers, employees and agents, shall cooperate fully with the Indemnitor and
its legal representatives in the investigation of any action, claim or
liability covered by this Article 3.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 REPRESENTATIONS AND WARRANTIES OF ABX. ABX represents and warrants
to JTA that (i) it has the full right and authority to enter into this
Agreement; (ii) it has taken all necessary action on its part to authorize the
execution and delivery of this Agreement and the performance of its obligations
hereunder; (iii) to the knowledge of ABX as of the Effective Date, there are no
existing or threatened actions, suits or claims pending with respect to the
subject matter hereof or the right of ABX to enter into and perform its
obligations under this Agreement; and (iv) it has not entered and during the
term of this Agreement will not enter any other agreement inconsistent or in
conflict with this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES OF JTA. JTA represents and warrants
to ABX that (i) it has the full right and authority to enter into this
Agreement; (ii) it has taken all necessary action on its part to authorize the
execution and delivery of this Agreement and the performance of its obligations
hereunder; (iii) to the knowledge of JTA as of the Effective Date, there are no
existing or threatened actions, suits or claims pending with respect to the
subject matter hereof or the right of JTA to enter into and perform its
obligations under this Agreement; and (iv) it has not entered and during the
term of this Agreement will not enter any other agreement inconsistent or in
conflict with this Agreement.
5. MISCELLANEOUS PROVISIONS
5.1 GOVERNING LAWS. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, USA, without regard to
conflict of laws principles.
5.2 WAIVER. It is agreed that no waiver by a Party hereto of any breach
or default of any of the covenants or agreements herein set forth shall be
deemed a waiver as to any subsequent and/or similar breach or default.
5.3 ASSIGNMENT. Neither this Agreement nor any right or obligation
hereunder may be assigned or delegated, in whole or part, by a Party without the
prior written consent of the
3.
<PAGE>
other Parties; provided that such written consent shall not be required
where: (i) either Party assigns this Agreement to any entity that acquires
substantially all of the assets to which this Agreement relates, (ii) JTA
assigns this Agreement to a Majority-Owned Affiliate of JTI or (iii) ABX
assigns this Agreement to an Affiliate. The terms and conditions of this
Agreement shall be binding on and inure to the benefit of the permitted
successors and assigns of the Parties. Any assignment not in conformance with
this Section 5.3 shall be null, void and of no legal effect. For
clarification this Agreement shall survive any dissolution of XT.
5.4 INDEPENDENT CONTRACTORS. The relationship of the Parties is that of
independent contractors. The Parties shall not be deemed to be agents, partners
or joint venturers of the others for any purpose as a result of this Agreement
or the transactions contemplated thereby.
5.5 COMPLIANCE WITH LAWS. In exercising their rights under this
Agreement, the Parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this Agreement.
5.6 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
5.7 NOTICES. Any notice, request, approval or consent required or
permitted to be given between the Parties hereto shall be given in writing, and
shall be deemed to have been properly given if delivered in person, transmitted
by telecopy (with machine confirmation of transmission and confirmation by
personal delivery, first class certified mail or courier), or mailed by first
class certified mail to the other Party at the appropriate address set forth
below, or to such other address as may be designated in writing by a Party from
time to time in accordance with this Agreement.
JT America Inc.: JT America Inc.
375 Park Avenue, Suite #1307
New York, NY 10152
Fax: (212) 319-8993
Attn: President
With copies to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Fax: (212) 644-4051
Attn: Neal N. Beaton, Esq.
4.
<PAGE>
Japan Tobacco Inc.
JT Building
2-1 Toranoman 2-chome
Minato-Ku, Tokyo 105
Japan
Fax: 011-81-3-5-479-0321
Attn: Vice President,
Pharmaceutical Division
Akros Pharma Inc.
1400 Fashion Island Blvd.
Suite 910
San Mateo, CA 94404
Fax: (650) 312-8028
Attn: President
Abgenix, Inc. or
Xenotech L.P. Abgenix, Inc.
7601 Dumbarton Circle
Fremont, CA 94555
Fax: (510) 608-6511
Attn: President
With a copy to: Cooley Godward LLP
3000 El Camino Real
Five Palo Alto Square
Palo Alto, CA 94306-2155
Fax: (650) 857-0663
Attn: Robert L. Jones, Esq.
5.8 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties shall discuss in good faith appropriate
revised arrangements.
5.9 FORCE MAJEURE. Nonperformance of any Party shall be excused to the
extent that performance is rendered impossible by strike, fire, earthquake,
flood, governmental acts or orders or restrictions, failure of suppliers, or any
other reason where failure to perform is beyond the reasonable control, and not
caused by the negligence, intentional conduct or misconduct of the
non-performing Party.
5.10 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL ANY PARTY HERETO BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER.
5.11 DISPUTE RESOLUTION; ARBITRATION. The Parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between the Chief Executive Officer of ABX
and the President of JTA. Any dispute under this Agreement which is not settled
after such meeting shall be finally settled by binding arbitration,
5.
<PAGE>
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association by three (3) arbitrators appointed in accordance with
said rules. The arbitration proceedings and all pleadings and written
evidence shall be in the English language. Any written evidence originally in
a language other than English shall be submitted in English translation
accompanied by the original or a true copy thereof. The costs of the
arbitration, including administrative and arbitrators' fees, shall be shared
equally by the parties to the arbitration. Each Party shall bear its own
costs and attorneys' and witness' fees; PROVIDED THAT the prevailing party in
any arbitration, as determined by the arbitration panel, shall be entitled to
an award against the other party in the amount of the prevailing party's
costs and reasonable attorneys' fees. A disputed performance or suspended
performances pending the resolution of the arbitration must be completed
within thirty (30) days following the final decision of the arbitrators. Any
arbitration subject to this Section 5.11 shall be completed within six (6)
months from the filing of notice of a request for such arbitration.
5.12 COMPLETE AGREEMENT. It is understood and agreed between ABX and
JTA that this Agreement, the Amended and Restated Field License and the Expanded
Field License, as amended on June 28, 1996 and on the Effective Date, constitute
the entire agreement, both written and oral, between the Parties with respect to
the subject matter hereof, and supersede and cancel all prior agreements
respecting the subject matter hereof, either written or oral, expressed or
implied. No amendment or change hereof or addition hereto shall be effective or
binding on either of the Parties unless reduced to writing and executed by the
respective duly authorized representatives of ABX and JTA.
5.13 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and both together shall be deemed to
be one and the same agreement.
5.14 HEADINGS. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.
6.
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.
ABGENIX, INC. XENOTECH, INC. AS GENERAL
PARTNER OF XENOTECH, L.P.
By: /s/ R. Scott Greer By: /s/ Raymond M. Withy
------------------------------------- -----------------------
R. Scott Greer Raymond M. Withy
President and Chief Executive Officer Chairman
JT AMERICA INC.
By: /s/ Shuji Kondo
-------------------------------------
Shuji Kondo
President
7.
<PAGE>
EXECUTION COPY
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
AGREEMENT TO TERMINATE THE INTEREST OF JAPAN TOBACCO INC. IN THE
MASTER RESEARCH LICENSE AND OPTION AGREEMENT
THIS AGREEMENT TO TERMINATE THE INTEREST OF JAPAN TOBACCO INC. IN THE
MASTER RESEARCH LICENSE AND OPTION AGREEMENT (this "Agreement"), effective
December 31, 1999, (the "Effective Date") is made by and among ABGENIX, INC., a
Delaware corporation ("ABX") and JAPAN TOBACCO INC., a Japanese corporation
("JTI"), and XENOTECH, L.P., a California limited partnership ("XT") with
reference to the following facts and circumstances.
RECITALS
A. WHEREAS, Cell Genesys, Inc. ("CGI"), the predecessor company of ABX,
and JT Immunotech USA Inc. ("Immunotech"), a wholly-owned indirect subsidiary of
JTI, formed XT in 1991 to develop genetically modified strains of mice which can
produce fully human monoclonal antibodies, and to commercialize products
generated therefrom;
B. WHEREAS, CGI assigned to ABX (its wholly-owned subsidiary at such
time) its interest in XT, and Immunotech merged into JT America Inc. ("JTA"), a
wholly-owned subsidiary of JTI, and its interest in XT was assigned to JTA by
operation of law;
C. WHEREAS, JTA has agreed to sell to ABX, and ABX has agreed to
purchase, JTA's interest in XT pursuant to a Limited Partnership Interest and
Stock Purchase Agreement of even date herewith, by and between ABX and JTA (the
"Purchase Agreement");
D. WHEREAS, XT, JTI and CGI were parties to a Master Research License
and Option Agreement dated effective as of June 28, 1996, as amended (the
"MRLOA"), to govern the parties' rights with respect to the development and
commercialization of Products;
E. WHEREAS, JTI is willing to terminate its rights under and interest
in the MRLOA in exchange for certain consideration to be paid by ABX hereunder;
NOW THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, the Parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, capitalized terms set forth in this
Agreement and not otherwise defined herein shall have the meaning set forth in
the MRLOA.
1.1 "ANTIGEN" shall mean a [*] that (a) is defined by a [*] thereof,
including any [*] thereto and (b) is identified by a [*] (as disclosed in an
[*] sufficient to [*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1.
<PAGE>
1.2 "ANTIGEN INVENTION" shall mean any inventions that relate to (a)
the [*] of [*] that [*] to an [*] or [*] or such [*] or [*] of such [*] such
[*] and [*] that [*] such [*] (b) [*] such [*] or [*] other than those
described in (a); and (c) [*] described in (a) and/or (b); in each case that
are made, conceived or reduced to practice by or on behalf of [*] under the
MRLOA, together with all patent applications, patents and/or know-how
relating to, covering or claiming the foregoing.
1.3 "CONTROLLED" shall mean the ability to grant licenses or
sublicenses with respect to a technology or material as provided in this
Agreement without breaching any agreement or other arrangement with a Third
Party.
1.4 "MAJORITY-OWNED AFFILIATE OF JTI" shall mean an entity of which
JTI owns, directly or indirectly, more than [*] of the shares of such entity
entitled to vote in the election of directors or corresponding managing
authority.
1.5 "PRODUCT ANTIGEN" shall have the meaning ascribed in the applicable
Product License executed pursuant to the MRLOA.
1.6 "RESEARCH PROGRAM MATERIALS AND INFORMATION" shall mean: (i) [*]
(ii) [*] that [*] that [*] (iii) [*] that [*] or [*] that [*] (iv) [*]
that [*] that [*] or [*] and (v) information (and all [*] thereof) regarding
the [*] described in clauses (i) through (iv); in each case that are made,
conceived, reduced to practice or otherwise derived from the activities
conducted by the Parties pursuant to and in accordance with the MRLOA or any
Product License entered into pursuant to the MRLOA.
1.7 "XENOMOUSE ANIMALS" shall mean transgenic mice which are Controlled
by ABX and which contain unrearranged human immunoglobulin genes that are
capable of producing human antibodies when immunized with an antigen.
2. CONSIDERATION
In consideration for JTI's agreement to relinquish its Buy-In Right
with respect to certain Selected Antigens under the MRLOA, ABX shall pay to
JTI Ten Million Dollars (US$10,000,000) on December 31, 1999. The payment
required to be made pursuant to this Section 2 shall be without [*] if any,
the [*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2.
<PAGE>
3. TERMINATION OF JTI'S RIGHTS UNDER THE MRLOA.
3.1 JTI's rights under and interest in the MRLOA are hereby terminated
effective as of the Effective Date, including without limitation (a) its rights
under Section 3.1 thereof, (b) its rights to select certain Antigens for
development of antibody products binding thereto, and (c) its rights to maintain
and use a colony of XenoMouse Animals as provided in the MRLOA. JTI's
obligations under Articles 12 (excluding Section 12.2(a)) and 14 of the MRLOA
shall survive termination of JTI's interest in the MRLOA pursuant to this
Agreement solely with respect to activities conducted by JTI pursuant to the
MRLOA prior to the Effective Date. The termination of JTI's rights under and
interest in the MRLOA shall not affect JTI's rights under any Product License
entered into between JTI and XT prior to the Effective Date, or the rights of
ABX and XT under the MRLOA, which shall survive termination of JTI's interest in
the MRLOA.
3.2 ABX and XT hereby release and discharge JTI from, and hereby waive
and relinquish, all disputes, claims, controversies, demands, rights,
obligations, liabilities, actions and causes of action of every kind and nature
arising out of activities conducted by ABX and XT pursuant to the MRLOA after
the Effective Date. The Parties intend that the MRLOA shall continue in full
force and effect as between ABX and XT, and that JTI's rights under the MRLOA
shall revert to XT.
4. LICENSE GRANT.
4.1 LICENSE UNDER ANTIGEN INVENTIONS. Subject to the terms and
conditions of this Agreement, JTI hereby grants to ABX a non-exclusive, fully
paid-up, royalty-free, perpetual, worldwide, sublicensable license to use
Antigen Inventions, except that such license shall not include a license to
use the Antigen Inventions relating to the [*] during the period in which the
relevant Product License for each such Product Antigen is in effect. In no
event shall JTI be obligated to disclose or provide to ABX any Research
Program Materials and Information relating to any Antigen Invention,
notwithstanding the foregoing license.
4.2 NON-EXCLUSIVE LICENSE WITH RESPECT TO XENOMOUSE ANIMALS. Subject to
the terms and conditions of this Agreement, JTI hereby grants to ABX a
non-exclusive, fully paid-up, royalty-free, perpetual, sublicensable, worldwide
license under all intellectual property rights Controlled by JTI as of the
Effective Date that cover the creation, development, use, manufacture,
importation, offer for sale and sale of XenoMouse Animals.
4.3 NON-EXCLUSIVE LICENSE UNDER PRODUCT ANTIGEN INVENTIONS ARISING
UNDER THE MRLOA. JTI hereby grants to ABX a non-exclusive, fully paid-up,
royalty-free, perpetual, sublicenseable, worldwide license under all
intellectual property rights Controlled by JTI covering Antigen Inventions
arising out of JTI's activities under the MRLOA with respect to any Product
Antigen (as defined in the MRLOA) for which either (a) JTI's option under the
MRLOA expires or terminates prior to JTI and XT entering into a Product License
therefor, or (b) JTI and XT have entered into a Product License, and such
Product License has terminated or expired (but not while such Product License is
in effect). In no event shall JTI be obligated to disclose or
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3.
<PAGE>
provide to ABX any Research Program Materials and Information relating to any
such Product Antigen or related Antigen Invention, notwithstanding the
foregoing license.
4.4 NON-EXCLUSIVE LICENSE RELATING TO PROJECT TECHNOLOGY AND JT
INDEPENDENT INVENTIONS. JTI hereby grants to ABX a non-exclusive (even as to
JTI), worldwide, royalty-free, perpetual, sublicensable license under all
intellectual property rights in and to any inventions made by JTI in the course
of practicing any Project Technology, and all intellectual property rights in
and to any JT Independent Technology Controlled by JTI for all uses within the
Field or the Expanded Field. In no event shall JTI be obligated to disclose or
provide to ABX any materials created by JTI using the Project Technology or that
are within the JT Independent Technology, including without limitation any
transgenic animals, notwithstanding the foregoing license. The capitalized terms
in this Section 4.4 not defined in this Agreement shall have the meanings given
to them in the Amended and Restated Field License between ABX, JTA and XT of
even date herewith or the Amended Expanded Field License between ABX and JTA of
even date herewith.
4.5 SUBLICENSE UNDER THE [*] JTI hereby grants to XT a
non-exclusive, worldwide, royalty-free, perpetual license under the [*] Such
license shall be sublicensable solely with respect to use of [*] JTI
covenants that it shall use all commercially reasonable efforts to maintain
in effect the [*] and that it shall promptly notify ABX of any material
communication or notice it delivers or receives that may adversely affect the
scope or effectiveness of ABX's license under this Section 4.5.
5. PATENT ASSISTANCE.
5.1 PATENT ASSISTANCE. JTI shall provide to ABX, during the four (4)
months following the Effective Date (the "Transition Period"), reasonable
assistance in connection with ABX's assumption of responsibility for the
prosecution of the Patent Rights (as defined in the Collaboration Agreement
between CGI (which assigned its interest therein to ABX), XT and JTA dated
June 12, 1991, as amended and as terminated as of the Effective Date) in
Japan. JTI and ABX shall conduct one face to face meeting in Japan for such
purpose during the Transition Period, with each Party bearing all costs for
its representatives' attendance at such meeting. Following the Transition
Period, JTI shall reasonably assist ABX in the prosecution and defense of the
Patent Rights in Japan upon ABX's written request, in which event ABX shall
reimburse JTI for its reasonable costs and expenses incurred in connection
therewith, including [*] at a [*] in advance by the Parties.
6. INDEMNIFICATION
6.1 BY JTI. Subject to ABX's compliance with Section 6.3, JTI agrees to
indemnify, defend and hold ABX and its Affiliates and their respective
directors, officers, employees and agents harmless from and against any losses,
claims, damages, liabilities, penalties and interest, or actions resulting
directly from any Third Party claims (collectively, "Liabilities") arising from
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4.
<PAGE>
any negligence or willful misconduct of JTI (or its directors, officers,
employees or agents) or the breach of any representations, warranties, covenants
or other obligations of JTI under this Agreement, except to the extent that such
Liabilities arise from ABX's breach of any of its representations, warranties,
covenants or other obligations under this Agreement or relate to any Liabilities
incurred in connection with any failure by ABX to pay any withholding taxes due
to a government authority in connection with ABX's performance of its
obligations and exercise of its rights under this Agreement, whether such taxes
are paid by ABX at the time of payment to JTI or imposed upon ABX by the
relevant authority at a later date.
6.2 BY ABX. Subject to JTI's compliance with Section 6.3, ABX agrees to
indemnify, defend and hold JTI and its Affiliates and their directors, officers,
employees and agents harmless from and against any Liabilities arising from (i)
any negligence or willful misconduct of ABX (or its directors, officers,
employees, or agents); (ii) the breach of any representations, warranties,
covenants or other obligations of ABX under this Agreement, (iii) ABX's or its
Affiliates' activities under the MRLOA after the Effective Date, and (iv) any
failure by ABX to pay any withholding taxes due to a government authority in
connection with ABX's performance of its obligations and exercise of its rights
under this Agreement (whether such taxes are paid by ABX at the time of payment
to JTI or imposed upon ABX by the relevant authority at a later date), except in
each case to the extent that such Liabilities arise from JTI's negligence or
willful misconduct or breach of any of its representations, warranties,
covenants or other obligations under this Agreement.
6.3 INDEMNIFICATION PROCEDURES. If a Party (the "Indemnitee") intends
to claim indemnification under this Article 6, it shall promptly notify the
indemnifying Party (the "Indemnitor") in writing of any Liability in respect of
which the Indemnitee or its directors, officers, employees or agents intend to
claim such indemnification, and the Indemnitor shall have the right to
participate in, and, to the extent the Indemnitor so desires, to assume the
defense thereof with counsel mutually satisfactory to the Parties. The indemnity
obligation of this Article 6 shall not apply to amounts paid in settlement of
any loss, claim, damage, liability or action if such settlement is effected
without the consent of the Indemnitor, which consent shall not be withheld or
delayed unreasonably. The failure to deliver written notice to the Indemnitor
within a reasonable time after the commencement of any such action shall not
relieve such Indemnitor of any liability to the Indemnitee under this Article 6,
except to the extent that such failure is prejudicial to its ability to defend
such action. The Party claiming indemnification under this Article 6 and its
directors, officers, employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation of any action,
claim or liability covered by this Article 6.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5.
<PAGE>
7. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF ABX. ABX represents
and warrants to JTI that (i) it has the full right and authority to enter into
this Agreement; (ii) it has taken all necessary action on its part to authorize
the execution and delivery of this Agreement and the performance of its
obligations hereunder; (iii) to the knowledge of ABX as of the Effective Date,
there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof or the right of ABX to enter into and
perform its obligations under this Agreement; and (iv) it has not entered and
during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
7.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF JTI. JTI represents
and warrants to ABX that (i) it has the full right and authority to enter into
this Agreement; (ii) it has taken all necessary action on its part to authorize
the execution and delivery of this Agreement and the performance of its
obligations hereunder; (iii) to the knowledge of JTI as of the Effective Date,
there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof or the right of JTI to enter into and
perform its obligations under this Agreement; and (iv) it has not entered and
during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
8. TERM; TERMINATION
8.1 TERM. This Agreement shall commence on the Effective Date and,
unless earlier terminated as provided in this Article 8, shall continue in
effect for a period of twenty (20) years from the Effective Date.
8.2 TERMINATION FOR BREACH. Either Party may terminate this Agreement
in the event the other Party shall have materially breached or defaulted in the
performance of any of its material obligations hereunder, and such breach or
default shall have continued for sixty (60) days after written notice thereof
was provided to the breaching Party by the nonbreaching Party that terminates
the Agreement as to the breaching Party. Any termination shall become effective
at the end of such sixty (60) day period unless the breaching Party has cured
any such breach or default prior to the expiration of the sixty (60) day period.
However, if the Party alleged to be in breach of this Agreement disputes such
breach within such sixty (60) day period, the other Party shall not have the
right to terminate this Agreement unless it has been determined by an
arbitration proceeding in accordance with Section 9.13 below that the allegedly
breaching Party did in fact materially breach this Agreement, and the breaching
Party fails to cure such breach within thirty (30) days following the final
decision of the arbitrators or such other time as directed by the arbitrators.
8.3 EFFECT OF EXPIRATION OR TERMINATION.
8.3.1 ACCRUED OBLIGATIONS AND RIGHTS. Expiration or any
termination of this Agreement for any reason shall not relieve either Party of
any obligation accruing prior to such expiration or termination or release
either Party from any liability which at the time of such expiration or
termination has already accrued to such Party. Such termination or expiration
shall
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6.
<PAGE>
not preclude either Party from pursuing any rights and remedies it may have
hereunder or at law or in equity which accrued to it prior to such expiration
or termination.
8.3.2 SURVIVAL. Articles 4, 5, 6, 7 and 9 and Section 8.3.2
shall survive the expiration or termination of this Agreement.
9. MISCELLANEOUS PROVISIONS
9.1 GOVERNING LAWS. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, USA, without regard to
conflict of laws principles.
9.2 WAIVER. It is agreed that no waiver by a Party hereto of any breach
or default of any of the covenants or agreements herein set forth shall be
deemed a waiver as to any subsequent and/or similar breach or default.
9.3 ASSIGNMENTS. Neither this Agreement nor any right or obligation
hereunder may be assigned or delegated, in whole or part, by either Party
without the prior written consent of the other; provided that such written
consent shall not be required where: (a) either Party assigns this Agreement to
any entity that acquires substantially all of the assets to which this Agreement
relates; (b) JTI assigns this Agreement to a Majority-Owned Affiliate of JTI; or
(c) ABX assigns this Agreement to an Affiliate. The terms and conditions of this
Agreement shall be binding on and inure to the benefit of the permitted
successors and assigns of the Parties. Notwithstanding the foregoing, ABX shall
not be obligated without its written consent to transfer XenoMouse Animals to
any Third Party or Affiliate of JTI, including without limitation any
successor-in-interest of JTI. Any assignment not in conformance with this
Section 9.3 shall be null, void and of no legal effect.
9.4 INDEPENDENT CONTRACTORS. The relationship of the Parties is that of
independent contractors. The Parties shall not be deemed to be agents, partners
or joint venturers of the others for any purpose as a result of this Agreement
or the transactions contemplated thereby.
9.5 COMPLIANCE WITH LAWS. In exercising their rights under this
Agreement, the Parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this Agreement.
9.6 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
9.7 NO IMPLIED OBLIGATIONS. Except as expressly provided herein,
nothing in this Agreement shall be deemed to require JTI to exploit the Licensed
Technology or to prevent JTI from commercializing products similar to or in
competition with any Product, in addition to or in lieu of such Products.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7.
<PAGE>
9.8 NOTICES. Any notice, request, approval or consent required or
permitted to be given between the Parties hereto shall be given in writing, and
shall be deemed to have been properly given if delivered in person, transmitted
by telecopy (with machine confirmation of transmission and confirmation by
personal delivery, first class certified mail or courier), or mailed by first
class certified mail to the other Party at the appropriate address set forth
below, or to such other address as may be designated in writing by a Party from
time to time in accordance with this Agreement.
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranoman 2-chome
Minato-Ku, Tokyo 105
Japan
Fax: 011-81-3-5-479-0321
Attn: Vice President
Pharmaceutical Division
With a copy to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Fax: (212) 644-4051
Attn: Neal N. Beaton, Esq.
Akros Pharma Inc.
1400 Fashion Island Blvd.
San Mateo, CA 94404
Fax: (650) 312-8028
Attn: President
Abgenix, Inc. and Abgenix, Inc.
Xenotech L.P.: 7601 Dumbarton Circle
Fremont, California 94555
Fax: (510) 608-6511
Attn: President
With a copy to: Cooley Godward LLP
3000 El Camino Real
Five Palo Alto Square
Palo Alto, CA 94306-2155
Fax: (650) 857-0663
Attn: Robert L. Jones, Esq.
9.9 EXPORT LAWS. Notwithstanding anything to the contrary contained
herein, all obligations of the United States and Japan, of ABX and JTI are
subject to prior compliance with the export regulations and such other United
States or Japanese laws and regulations as may be
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8.
<PAGE>
applicable, and to obtaining all necessary approvals required by the
applicable agencies of the governments of the United States and Japan. JTI
shall be responsible for obtaining such approvals, and shall use efforts
consistent with prudent business judgment to obtain such approvals.
9.10 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties shall discuss in good faith appropriate
revised arrangements.
9.11 FORCE MAJEURE. Nonperformance of any Party shall be excused to the
extent that performance is rendered impossible by strike, fire, earthquake,
flood, governmental acts or orders or restrictions, failure of suppliers, or any
other reason where failure to perform is beyond the reasonable control, and not
caused by the negligence, intentional conduct or misconduct of the
non-performing Party.
9.12 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL ANY PARTY HERETO BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER.
9.13 DISPUTE RESOLUTION; ARBITRATION. The Parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between the Chief Executive Officer of ABX
and the Vice President of the Pharmaceutical Division of JTI. Any dispute under
this Agreement which is not settled after such meeting shall be finally settled
by binding arbitration, conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association by three (3) arbitrators appointed
in accordance with said rules. The arbitration proceedings and all pleadings and
written evidence shall be in the English language. Any written evidence
originally in a language other than English shall be submitted in English
translation accompanied by the original or a true copy thereof. The costs of the
arbitration, including administrative and arbitrators' fees, shall be shared
equally by the parties to the arbitration. Each Party shall bear its own costs
and attorneys' and witness' fees; PROVIDED THAT the prevailing party in any
arbitration, as determined by the arbitration panel, shall be entitled to an
award against the other party in the amount of the prevailing party's costs and
reasonable attorneys' fees. A disputed performance or suspended performances
pending the resolution of the arbitration must be completed within thirty (30)
days following the final decision of the arbitrators. Any arbitration subject to
this Section 9.13 shall be completed within six (6) months from the filing of
notice of a request for such arbitration.
9.14 COMPLETE AGREEMENT. It is understood and agreed between ABX and
JTI that this Agreement constitutes the entire agreement, both written and oral,
between the Parties with respect to the subject matter hereof, and supersedes
and cancel all prior agreements respecting the subject matter hereof (including
without limitation the MRLOA and the letter agreement between JTI and ABX dated
November 1, 1997 relating to the transfer of Transgenic Products or Antibody
Products either written or oral, expressed or implied. No amendment or change
hereof or addition hereto shall be effective or binding on either of the Parties
unless reduced to writing and executed by the respective duly authorized
representatives of ABX and JTI.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
9.
<PAGE>
9.15 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and both together shall be deemed to
be one and the same agreement.
9.16 HEADINGS. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.
ABGENIX, INC. XENOTECH, INC. AS GENERAL
PARTNER OF XENOTECH L.P.
By:/s/ R. Scott Greer By:/s/ Raymond M. Withy
------------------------------------- ----------------------
R. Scott Greer Raymond M. Withy
President and Chief Executive Officer Chairman
JAPAN TOBACCO INC.
By:/s/ Takashi Kato
------------------------------------------
Takashi Kato
Managing Director, Pharmaceutical Division
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
10.
<PAGE>
EXECUTION COPY
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
AMENDMENT OF THE EXPANDED FIELD LICENSE
This AMENDMENT OF THE EXPANDED FIELD LICENSE (this "Amendment"),
effective December 31, 1999 (the "Amendment Effective Date") is made by and
among ABGENIX, INC., a Delaware corporation ("ABX") and JT AMERICA INC., a New
York corporation ("JTA") and XENOTECH L.P., a California limited partnership
("XT"), with reference to the following facts and circumstances. ABX, JTA and
XT may be referred to herein each individually as a "Party" and jointly as the
"Parties."
RECITALS
A. WHEREAS, Cell Genesys, Inc. ("CGI"), the predecessor company
of ABX, and JT Immunotech USA Inc. ("Immunotech"), a wholly-owned subsidiary of
JTA (which is itself a wholly-owned subsidiary of Japan Tobacco Inc. ("JTI")),
formed XT in 1991 to develop genetically modified strains of mice which can
produce fully human monoclonal antibodies ("XenoMouse Animals"), and to
commercialize products generated therefrom;
B. WHEREAS, CGI, Immunotech and XT entered into that certain
Collaboration Agreement effective June 12, 1991, as amended, (the
"Collaboration Agreement"), pursuant to which those parties conducted a
sponsored research project for the development of transgenic animals capable of
producing human monoclonal antibodies;
C. WHEREAS, CGI, Immunotech and XT entered into that certain
Field License effective June 12, 1991, as amended, (the "Prior Field License")
to govern those parties' rights with respect to the use of technology created
pursuant to or practiced in the context of the Collaboration Agreement
("Project Technology") in the Field (as defined below);
D. WHEREAS, CGI, Immunotech and XT entered into that certain
Expanded Field License effective June 12, 1991, as amended on June 28, 1996
(the "Expanded Field License") to govern those parties' rights with respect to
the Project Technology in the Expanded Field (as defined in the Expanded Field
License);
E. WHEREAS, CGI assigned to ABX (its wholly-owned subsidiary at
such time), its interest in XT and in the Collaboration Agreement, the Prior
Field License and the Expanded Field License, and in 1997, Immunotech merged
into JTA and its interest in XT and in the Collaboration Agreement, the Prior
Field License and the Expanded Field License was assigned to JTA by operation
of law;
F. WHEREAS, XT, JTA and ABX have agreed to terminate the
Collaboration Agreement pursuant to that certain Agreement to Terminate the
Collaboration Agreement of even date herewith (the "Collaboration Termination
Agreement"), and to amend and restate the terms of the Prior Field License
pursuant to the terms of that certain Amended and Restated Field License of
even date herewith (the "Amended and Restated Field License");
G. WHEREAS, the Parties desire to amend the Expanded Field
License pursuant to
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1.
<PAGE>
the terms and conditions set forth in this Amendment;
NOW THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, the Parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, capitalized terms set forth in this
Amendment and not otherwise defined herein shall have the meaning set forth in
the Amended and Restated Field License.
2. AMENDMENT OF THE EXPANDED FIELD LICENSE.
The Parties hereby agree to amend the Expanded Field License, as follows,
effective as of the Amendment Effective Date:
2.1 XT shall no longer be a party to the Expanded Field License,
and all references to CGI as a party thereto shall be changed to ABX and all
references to JTI as a party thereto shall be changed to JTA.
2.2 Article 1 shall be replaced with the following:
The capitalized terms referenced herein that are not herein defined
shall have the meanings given such terms in the Amended and Restated
Field License between XT and JTA dated December 31, 1999.
"AGREEMENT" means this Expanded Field License, as amended.
"EXPANDED FIELD" shall mean the [*] for any purpose: (i) of [*] or
parts thereof (other than a [*] or, (ii) of [*] or parts thereof. The
"Expanded Field" shall exclude the "Field."
2.3 Section 2.1 shall be replaced entirely with the following:
JTA hereby grants to ABX an exclusive (even as to JTA), worldwide
license or sublicense, as applicable, with the right to grant
sublicenses, under its interest, if any, in the Project Technology
within the Expanded Field. Additionally, JTA grants to ABX a
non-exclusive, worldwide, royalty-free license or sublicense, as
applicable, with the right to grant sublicenses, in the Expanded Field
under all technology and inventions made by JTA through the practice of
the Project Technology within the Expanded Field, and under the JT
Independent Technology, for all uses within the Expanded Field in order
to ensure ABX'S freedom to operate in the Expanded Field.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2.
<PAGE>
2.4 Section 2.2 shall be deleted from the Expanded Field License
entirely.
2.5 Article 3 shall be deleted from the Expanded Field License
entirely.
2.6 Article 4 shall be deleted from the Expanded Field License
entirely and replaced with the following:
4. INDEMNIFICATION.
(a) BY JTA. Subject to ABX'S compliance with
subsection (c) below, JTA agrees to indemnify, defend and hold ABX and its
directors, officers, employees, agents and Affiliates harmless from and against
any losses, claims, damages, liabilities, or actions resulting directly from
any Third Party claims (collectively, "Liabilities") arising from JTA's
negligence or willful conduct or breach of any representations, warranties,
covenants or other obligations of JTA under this Agreement, except to the
extent that such Liabilities arise from ABX'S negligence or willful conduct or
breach of any of its representations, warranties, covenants or other
obligations under this Agreement.
(b) BY ABX. Subject to JTA's compliance with
subsection (c) below, ABX agrees to indemnify, defend and hold JTA and its
directors, officers, employees, agents and Affiliates harmless from and against
any Liabilities arising from ABX'S negligence or willful conduct or the breach
of any representations, warranties, covenants or other obligations of ABX under
this Agreement, except to the extent that such Liabilities arise from JTA's
negligence or willful conduct or breach of any of its representations,
warranties, covenants or other obligations under this Agreement.
(c) INDEMNIFICATION PROCEDURES. If a Party (the
"Indemnitee") intends to claim indemnification under this Section 5, it shall
promptly notify the indemnifying Party (the "Indemnitor") in writing of any
Liability in respect of which the Indemnitee or its directors, officers,
employees or agents intend to claim such indemnification, and the Indemnitor
shall have the right to participate in, and, to the extent the Indemnitor so
desires, to assume the defense thereof with counsel mutually satisfactory to
the Parties. The indemnity obligation of this Section 5 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which
consent shall not be withheld or delayed unreasonably. The failure to deliver
written notice to the Indemnitor within a reasonable time after the
commencement of any such action shall not relieve such Indemnitor of any
liability to the Indemnitee under this Section 5, except to the extent that
such failure is prejudicial to its ability to defend such action. The Party
claiming indemnification under this Section 5 and its directors, officers,
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability covered
by this Section 5.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3.
<PAGE>
2.8 The following provisions are added to the Expanded Field
License:
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) REPRESENTATIONS AND WARRANTIES OF ABX. ABX
represents and warrants to JTA that (i) it has the full right and authority to
enter into this Agreement; (ii) it has taken all necessary action on its part
to authorize the execution and delivery of this Agreement and the performance
of its obligations hereunder; (iii) to the knowledge of ABX as of the Effective
Date, there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof or the right of ABX to enter into and
perform its obligations under this Agreement; and (iv) it has not entered and
during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
(b) REPRESENTATIONS AND WARRANTIES OF JTA. JTA
represents and warrants to ABX that (i) it has the full right and authority to
enter into this Agreement; (ii) it has taken all necessary action on its part
to authorize the execution and delivery of this Agreement and the performance
of its obligations hereunder; (iii) to the knowledge of JTA as of the Effective
Date, there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof or the right of JTA to enter into and
perform its obligations under this Agreement; and (iv) it has not entered and
during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
6. MISCELLANEOUS PROVISIONS
(a) GOVERNING LAWS. This Agreement shall be
interpreted and construed in accordance with the laws of the State of
California, USA, without regard to conflict of laws principles.
(b) WAIVER. It is agreed that no waiver by a Party
hereto of any breach or default of any of the covenants or agreements herein
set forth shall be deemed a waiver as to any subsequent and/or similar breach
or default.
(c) ASSIGNMENT. Neither this Agreement nor any
right or obligation hereunder may be assigned or delegated, in whole or part,
by a Party without the prior written consent of the other Parties; provided
that such written consent shall not be required where: (i) either Party assigns
this Agreement to any entity that acquires substantially all of the assets to
which this Agreement relates, (ii) JTA assigns this Agreement to a
Majority-Owned Affiliate of JTI or (iii) ABX assigns this Agreement to an
Affiliate. The terms and conditions of this Agreement shall be binding on and
inure to the benefit of the permitted successors and assigns of the Parties.
Any assignment not in conformance with this Section 6(c) shall be null, void
and of no legal effect. For clarification, this Agreement shall survive any
dissolution of XT.
(d) INDEPENDENT CONTRACTORS. The relationship of
the Parties is that of independent contractors. The Parties shall not be deemed
to be agents, partners or joint
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4.
<PAGE>
venturers of the others for any purpose as a result of this Agreement or the
transactions contemplated thereby.
(e) COMPLIANCE WITH LAWS. In exercising their
rights under this Agreement, the Parties shall fully comply with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights under
this Agreement.
(f) FURTHER ACTIONS. Each Party agrees to execute,
acknowledge and deliver such further instruments and to do all such other acts
as may be necessary or appropriate in order to carry out the purposes and
intent of this Agreement.
(g) NOTICES. Any notice, request, approval or
consent required or permitted to be given between the Parties hereto shall be
given in writing, and shall be deemed to have been properly given if delivered
in person, transmitted by telecopy (with machine confirmation of transmission
and confirmation by personal delivery, first class certified mail or courier),
or mailed by first class certified mail to the other Party at the appropriate
address set forth below, or to such other address as may be designated in
writing by a Party from time to time in accordance with this Agreement.
JT America Inc.: JT America Inc.
375 Park Avenue
Suite 1307
New York, NY 10152
Fax: (212) 319-8993
Attn: President
With copies to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Fax: (212) 644-4051
Attn: Neal N. Beaton, Esq.
Akros Pharma Inc.
1400 Fashion Island Blvd.
Suite 910
San Mateo, CA 94404
Fax: (650) 312-8028
Attn: President
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5.
<PAGE>
Japan Tobacco Inc.
JT Building
2-1 Toranoman 2-chome
Minato-Ku, Tokyo 105
Japan
Fax: Fax: 011-81-3-5-479-0321
Attn: Vice President,
Pharmaceutical Division
Abgenix, Inc.: Abgenix, Inc.
7601 Dumbarton Circle
Fremont, CA 94555
Fax: (510) 608-6511
Attn: President
With a copy to: Cooley Godward LLP
3000 El Camino Real
Five Palo Alto Square
Palo Alto, CA 94306-2155
Fax: (650) 857-0663
Attn: Robert L. Jones, Esq.
(h) SEVERABILITY. In the event that any provision
of this Agreement becomes or is declared by a court of competent jurisdiction
to be illegal, unenforceable or void, this Agreement shall continue in full
force and effect without said provision and the parties shall discuss in good
faith appropriate revised arrangements.
(i) FORCE MAJEURE. Nonperformance of any Party
shall be excused to the extent that performance is rendered impossible by
strike, fire, earthquake, flood, governmental acts or orders or restrictions,
failure of suppliers, or any other reason where failure to perform is beyond
the reasonable control, and not caused by the negligence, intentional conduct
or misconduct of the non-performing Party.
(j) DISPUTE RESOLUTION; ARBITRATION. The Parties
will attempt to resolve any dispute under this Agreement by mutual agreement,
and, if required, there shall be a face-to-face meeting between the Chief
Executive Officer of ABX and the President of JTA. Any dispute under this
Agreement which is not settled after such meeting shall be finally settled by
binding arbitration, conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association by three (3) arbitrators
appointed in accordance with said rules. The arbitration proceedings and all
pleadings and written evidence shall be in the English language. Any written
evidence originally in a language other than English shall be submitted in
English translation accompanied by the original or a true copy thereof. The
costs of the arbitration, including administrative and arbitrators' fees, shall
be shared equally by the parties to the arbitration. Each Party shall bear its
own costs and attorneys' and witness' fees; PROVIDED THAT the prevailing party
in any arbitration, as determined by the arbitration panel, shall be
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6.
<PAGE>
entitled to an award against the other party in the amount of the prevailing
party's costs and reasonable attorneys' fees. A disputed performance or
suspended performances pending the resolution of the arbitration must be
completed within thirty (30) days following the final decision of the
arbitrators. Any arbitration subject to this subsection (j) shall be completed
within six (6) months from the filing of notice of a request for such
arbitration.
(k) COMPLETE AGREEMENT. It is understood and
agreed between ABX and JTA that this Agreement, the Amended and Restated Field
License and the Collaboration Termination Agreement constitute the entire
agreement, both written and oral, between the Parties with respect to the
subject matter hereof, and supersede and cancel all prior agreements respecting
the subject matter hereof, either written or oral, expressed or implied. No
amendment or change hereof or addition hereto shall be effective or binding on
either of the Parties unless reduced to writing and executed by the respective
duly authorized representatives of ABX and JTA.
(l) COUNTERPARTS. This Agreement may be executed
in counterparts, each of which shall be deemed to be an original and both
together shall be deemed to be one and the same agreement.
(m) HEADINGS. The captions to the several Articles
and Sections hereof are not a part of this Agreement, but are included merely
for convenience of reference only and shall not affect its meaning or
interpretation.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7.
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.
ABGENIX, INC. XENOTECH, INC. AS GENERAL PARTNER OF
XENOTECH, L.P.
By: /s/ R. Scott Greer By: /s/ Raymond M. Withy
------------------------------------- --------------------
R. Scott Greer Raymond M. Withy
President and Chief Executive Officer Chairman
JT AMERICA INC.
By: /s/ Shuji Kondo
---------------
Shuji Kondo
President
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8.
<PAGE>
EXECUTION COPY
- --------------------------------------------------------------------------------
LIMITED PARTNERSHIP INTEREST AND
STOCK PURCHASE AGREEMENT
between
ABGENIX, INC.
and
JT AMERICA INC.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 PURCHASE OF THE SECURITIES.............................................2
SECTION 1.1. PURCHASE OF THE SECURITIES................................2
SECTION 1.2. PURCHASE PRICE............................................2
SECTION 1.3. CLOSING...................................................2
SECTION 1.4. REGISTRATION OF SALE......................................2
SECTION 1.5. ASSIGNMENT OF RIGHTS AND ASSUMPTION OF OBLIGATIONS........3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER...............................3
SECTION 2.1. CORPORATE ORGANIZATION AND AUTHORITY......................3
SECTION 2.2. VALIDITY AND EXECUTION OF AGREEMENT.......................3
SECTION 2.3. OWNERSHIP OF SECURITIES...................................3
SECTION 2.4. NO CONFLICT...............................................4
SECTION 2.5. CONSENTS AND APPROVALS....................................4
SECTION 2.6. COMPLIANCE WITH LAW.......................................4
SECTION 2.7. TAX MATTERS...............................................4
SECTION 2.8. LITIGATION................................................5
SECTION 2.9. BROKER'S AND FINDER'S FEES................................5
SECTION 2.10. NO OBLIGATIONS............................................5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER................................5
SECTION 3.1. CORPORATE ORGANIZATION AND AUTHORITY......................5
SECTION 3.2. VALIDITY AND EXECUTION OF AGREEMENT.......................6
SECTION 3.3. NO CONFLICT...............................................6
SECTION 3.4. CONSENTS AND APPROVALS....................................6
SECTION 3.5. TAX MATTERS...............................................6
SECTION 3.6. BROKER'S OR FINDER'S FEES.................................6
ARTICLE 4 ADDITIONAL AGREEMENTS..................................................7
SECTION 4.1. EXPENSES..................................................7
SECTION 4.2. ADDITIONAL AGREEMENTS; FURTHER ACTIONS....................6
SECTION 4.3. CONFIDENTIALITY; PUBLIC DISCLOSURE........................7
SECTION 4.4. AMENDMENTS TO AGREEMENTS..................................7
ARTICLE 5 CONDITIONS TO CLOSING..................................................8
SECTION 5.1. CONDITIONS TO OBLIGATIONS OF BUYER........................8
SECTION 5.2. CONDITIONS TO OBLIGATIONS OF SELLER.......................8
ARTICLE 6 TERMINATION AND REMEDIES...............................................9
SECTION 6.1. TERMINATION...............................................9
-i-
<PAGE>
SECTION 6.2. EFFECT OF TERMINATION.....................................9
ARTICLE 7 SURVIVAL AND INDEMNIFICATION...........................................9
SECTION 7.1. SURVIVAL OF REPRESENTATIONS...............................9
SECTION 7.2. INDEMNIFICATION BY SELLER................................10
SECTION 7.3. INDEMNIFICATION BY BUYER.................................10
SECTION 7.4. CLAIMS...................................................10
ARTICLE 8 MISCELLANEOUS PROVISIONS..............................................11
SECTION 8.1. NOTICES..................................................11
SECTION 8.2. SUCCESSORS AND ASSIGNS...................................12
SECTION 8.3. TITLES AND HEADINGS......................................12
SECTION 8.4. SEVERABILITY.............................................13
SECTION 8.5. ENTIRE AGREEMENT.........................................12
SECTION 8.6. WAIVERS AND AMENDMENTS..................................132
SECTION 8.7. GOVERNING LAW............................................13
SECTION 8.8. DISPUTES.................................................13
SECTION 8.9. EXECUTION IN COUNTERPARTS; BINDING EFFECT................14
</TABLE>
-ii-
<PAGE>
EXECUTION COPY
LIMITED PARTNERSHIP INTEREST AND STOCK PURCHASE AGREEMENT
This LIMITED PARTNERSHIP INTEREST AND STOCK PURCHASE AGREEMENT is made
and entered into this 20th day of December, 1999 by and between ABGENIX, INC., a
Delaware corporation ("BUYER"), and JT AMERICA INC., a New York corporation
("SELLER").
W I T N E S S E T H:
WHEREAS, Xenotech, L.P., a California limited partnership (the
"PARTNERSHIP"), was organized on June 12, 1991 pursuant to a Limited Partnership
Agreement (as amended through the date hereof, the "LP AGREEMENT") among
Xenotech, Inc., a Delaware corporation (the "GENERAL PARTNER"), Cell Genesys,
Inc., ("CGI") the predecessor company of Buyer, and JT Immunotech USA, Inc.
("JTI"), the predecessor company of Seller and an indirect subsidiary of Japan
Tobacco Inc., to develop genetically modified strains of mice which can produce
fully human monoclonal antibodies, and to commercialize products generated
therefrom;
WHEREAS, Seller currently holds a limited partnership interest in the
Partnership comprising forty-nine and one-half percent (49.5%) of the aggregate
Percentage Interests (as defined in the LP Agreement) in the Partnership, Buyer
currently holds a limited partnership interest in the Partnership comprising
forty-nine and one-half percent (49.5%) of the aggregate Percentage Interests in
the Partnership, and the General Partner holds a general partnership interest in
the Partnership comprising one percent (1.0%) of the aggregate Percentage
Interests in the Partnership;
WHEREAS, Seller currently owns 500 shares of Series B Common Stock, par
value $1.00 per share (the "SERIES B COMMON STOCK" and, together with the Series
A Common Stock referred to below, the "GP COMMON STOCK"), of the General
Partner, representing fifty percent (50.0%) of the issued and outstanding shares
of GP Common Stock, and Buyer currently owns 500 shares of Series A Common
Stock, par value $1.00 per share (the "SERIES A COMMON STOCK"), of the General
Partner, representing fifty percent (50.0%) of the issued and outstanding shares
of GP Common Stock; and
WHEREAS, Buyer desires to acquire from Seller, and Seller desires to
sell to Buyer, all of Seller's limited partnership interest in the Partnership
(the "PARTNERSHIP INTEREST") and all of the shares of Series B Common Stock held
by Seller (the "SHARES" and, together with the Partnership Interest, the
"SECURITIES"), upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual terms,
conditions and other agreements set forth herein, intending to be legally bound,
the parties hereby agree as follows:
1.
<PAGE>
ARTICLE 1
PURCHASE OF THE SECURITIES
SECTION 1.1. PURCHASE OF THE SECURITIES; PARTNERSHIP INTEREST.
On the terms and subject to the conditions set forth in this Agreement, at
the Closing, Seller agrees to sell, transfer, assign, convey and deliver to
Buyer, and Buyer agrees to purchase, acquire and accept from Seller, the
Partnership Interest (including, but not limited to, the proportionate amount
of the Capital Account (as defined in the LP Agreement) of the Seller) free
and clear of all security interests, pledges, mortgages, liens, charges,
adverse claims or restrictions of any kind, including, but not limited to,
any restriction on the use, voting, transfer, receipt of income or other
exercise of any attributes of ownership ("ENCUMBRANCES").
(b) SHARES. On the terms and subject to the conditions set
forth in this Agreement, at the Closing, Seller agrees to sell, transfer,
assign, convey and deliver to Buyer, and Buyer agrees to purchase, acquire
and accept from Seller, the Shares free and clear of all Encumbrances.
SECTION 1.2. PURCHASE PRICE. The aggregate consideration for the
purchase of the Shares shall be four hundred sixty thousand dollars (US$
460,000) (the "SHARE PURCHASE PRICE"). The aggregate consideration for the
purchase of the Partnership Interest shall be forty-six million five hundred
forty thousand dollars (US$ 46,540,000) (the "PARTNERSHIP INTEREST PURCHASE
PRICE" and, together with the Share Purchase Price, the "PURCHASE PRICE"),
the Buyer will pay the Purchase Price to Seller at the Closing by bank wire
transfer in immediately available funds to one or more accounts, as
designated in writing by Seller to Buyer on the Closing Date.
SECTION 1.3. CLOSING. The consummation of the purchase and sale of
the Securities (the "CLOSING") shall be held at 10:00 a.m. local time at the
offices of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto,
CA 94304, as soon as practicable, but not later than the second business day,
after the satisfaction or waiver of the conditions set forth in Article 5
hereof, or at such other time, date and place as shall be mutually agreed
upon by the parties (such date and time being referred to herein as the
"CLOSING DATE"). Each party hereto agrees to use all commercially reasonable
efforts to promptly satisfy the conditions precedent specified in Article 5
to its obligation to consummate the Closing in order to expedite the Closing.
SECTION 1.4. REGISTRATION OF SALE. At the Closing:
(a) Seller and Buyer shall cause the Partnership to
register the sale of the Partnership Interest and the proportionate amount of
Seller's Capital Account to Buyer on the books of the Partnership; and
(b) Seller shall deliver or cause to be delivered to Buyer
stock certificates evidencing the Shares duly endorsed in blank, or
accompanied by stock powers duly executed in blank, in form satisfactory to
Buyer and with all required stock transfer tax stamps affixed.
2.
<PAGE>
SECTION 1.5. ASSIGNMENT OF RIGHTS AND ASSUMPTION OF OBLIGATIONS.
Seller hereby assigns to Buyer all of the Seller's rights under (i) the LP
Agreement and (ii) the Joint Venture Agreement (as amended through the date
hereof, the "JV AGREEMENT") between CGI, the predecessor company of Buyer,
and JTI, the predecessor company of Seller, and subject to the terms and
conditions thereof, in each case as such agreements are amended hereby,
effective as of the Closing.
(a) If the assignment of any contract or other instrument
to be assigned to Buyer hereunder requires the consent of any party thereto
then Seller shall furnish copies of each such consent to Buyer. Buyer shall
use its reasonable best efforts to assist and cooperate with Seller in
obtaining any and all such consents. Buyer shall also notify Seller as soon
as reasonably practicable after it becomes aware that any such consent is
required.
(b) Buyer hereby assumes, and agrees to be bound by, all of
the obligations of Seller under the LP Agreement and the JV Agreement,
whether arising prior to or after the Closing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants as of the date hereof and as
of the Closing Date to Buyer as follows:
SECTION 2.1. CORPORATE ORGANIZATION AND AUTHORITY. Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New York and has all necessary corporate power and
corporate authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
SECTION 2.2. VALIDITY AND EXECUTION OF AGREEMENT. The Board of
Directors and, if required, the shareholders, of Seller have taken all action
required by law, its articles of incorporation and by-laws or otherwise to
authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Seller and is a legal, valid and binding
agreement of Seller enforceable against Seller in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general application affecting the enforcement of creditors'
rights.
SECTION 2.3. OWNERSHIP OF SECURITIES; PARTNERSHIP INTEREST. Seller
owns the Partnership Interest directly, free and clear of all Encumbrances
and upon consummation of the purchase and sale of the Partnership Interest,
Buyer will have good and marketable title to and ownership of the Partnership
Interest, free and clear of all Encumbrances, other than any failure to have
such title and ownership, and other than any Encumbrances, in each case
resulting from the status of or from any
3.
<PAGE>
action or failure to act by Buyer. There are no outstanding contractual
obligations of Seller to any Person with respect to the Partnership Interest.
(a) SHARES. Seller owns the Shares directly, free and clear
of all Encumbrances and upon consummation of the purchase and sale of the
Shares, Buyer will have good and marketable title to and ownership of the
Shares, free and clear of all Encumbrances, other than any failure to have
such title and ownership, and other than any Encumbrances, in each case
resulting from the status of or from any action or failure to act by Buyer.
There are no outstanding contractual obligations of Seller to any Person with
respect to the Shares.
SECTION 2.4. NO CONFLICT. Neither the execution, delivery and
performance by Seller of this Agreement nor the consummation of the
transactions contemplated hereby by Seller will (i) violate or conflict with
any of the provisions of its articles of incorporation or by-laws, the
articles of incorporation or by-laws of the General Partner, or the LP
Agreement; (ii) violate or conflict with any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award applicable to
Seller, the General Partner or the Partnership or (iii) result in any breach
of, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result
in the creation of any Encumbrance on the Partnership Interest or the Shares
or any of the assets or properties of the Partnership or the General Partner
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument relating to Seller, the
Partnership Interest, the Shares or such assets or properties to which
Seller, the General Partner or the Partnership is a party or by which Seller,
the General Partner, the Partnership, the Shares, the Partnership Interest or
any of such assets or properties is bound or affected.
SECTION 2.5. CONSENTS AND APPROVALS. The execution and delivery of
this Agreement by Seller do not, and the performance of this Agreement and
the consummation of the transactions contemplated hereby by Seller will not,
require any consent, approval, exemption, authorization or other action by,
or filing with or notification to, any court, administrative agency or other
governmental or regulatory authority, except for the filing of a premerger
notification and report form under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the AHSR ACT).
SECTION 2.6. COMPLIANCE WITH LAW. On the Closing Date, Seller will
not be in violation of any law, rule, regulation, order, judgment or decree
applicable to Seller relating to or affecting Seller's ownership of the
Securities or the ability of Seller to perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.
SECTION 2.7. TAX MATTERS. Seller has reviewed with its own tax
advisors the federal, state, local and foreign tax consequences of the
transactions contemplated by this Agreement. Seller relies solely on such
advisors and not on any statements or representations of Buyer, the General
Partner, the Partnership, or any of their agents. Seller acknowledges that it
(and not Buyer, the General
4.
<PAGE>
Partner or the Partnership) shall be responsible for its own tax liability
that may arise as a result of the transactions contemplated by this Agreement.
SECTION 2.8. LITIGATION. There is no action, suit, proceeding,
investigation or arbitration, before or by any Governmental Entity, pending
or threatened against or affecting (i) the Partnership Interest, (ii) the
Shares or (iii) the ability of Seller to perform its obligations under this
Agreement and to consummate the transactions contemplated hereby.
SECTION 2.9. BROKER'S AND FINDER'S FEES. No investment banker,
broker, finder or other intermediary has been retained by Seller or any of
its Affiliates or is authorized to act on behalf of Seller who might be
entitled to any fee or commission with respect hereto or to the transactions
contemplated hereby. As used herein "AFFILIATE" means a Person (defined as
any person, corporation or other entity) who, directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified. For the purpose of this definition, the
term "controls," is controlled by" or "is under common control with" means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. The government of
Japan shall be deemed not to be an Affiliate of JTI.
SECTION 2.10. NO OBLIGATIONS. As of the Closing Date, Seller has
paid in full or otherwise fully satisfied all obligations and liabilities of
Seller to the Partnership under the LP Agreement and to the General Partner
under the JV Agreement, including any obligation to make any capital
contribution, refund any excess distribution, pay any taxes, reimburse
expenses or otherwise.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants as of the date hereof and as of
the Closing Date to Seller as follows:
SECTION 3.1. CORPORATE ORGANIZATION AND AUTHORITY. Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all necessary corporate power and
corporate authority to execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
SECTION 3.2. VALIDITY AND EXECUTION OF AGREEMENT. The Board of
Directors and, if required, the shareholders, of Buyer have taken all action
required by law, its certificate of incorporation and by-laws or otherwise to
authorize the performance of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Buyer and is a legal, valid
and binding agreement of Buyer, enforceable against Buyer in accordance with
its terms,
5.
<PAGE>
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws of general application affecting the enforcement of creditors'
rights.
SECTION 3.3. NO CONFLICT. Neither the execution, delivery and
performance by Buyer of this Agreement nor the consummation of the
transactions contemplated hereby by Buyer will (i) violate or conflict with
any of the provisions of its certificate of incorporation or by-laws, the
articles of incorporation or by-laws of the General Partner, or the LP
Agreement; (ii) violate or conflict with any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award applicable to
Buyer, the General Partner or the Partnership or (iii) result in any breach
of, or constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result
in the creation of any Encumbrance on the Partnership Interest or the Shares
or any of the assets or properties of the Partnership or the General Partner
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument relating to Buyer, the
Partnership Interest, the Shares or such assets or properties to which Buyer,
the General Partner or the Partnership is a party or by which Buyer, the
General Partner, the Partnership, the Shares, the Partnership Interest or any
of such assets or properties is bound or affected.
SECTION 3.4. CONSENTS AND APPROVALS. The execution and delivery of
this Agreement by Buyer do not, and the performance of this Agreement and the
consummation of the transactions contemplated hereby by Buyer will not,
require any consent, approval, exemption, authorization or other action by,
or filing with or notification to, any court, administrative agency or other
governmental or regulatory authority, except for the filing of a premerger
notification and report form under the HSR Act.
SECTION 3.5. TAX MATTERS. Buyer has reviewed with its own tax
advisors the federal, state, local and foreign tax consequences of the
transactions contemplated by this Agreement. Buyer relies solely on such
advisors and not on any statements or representations of Seller, the General
Partner, the Partnership, or any of their agents. Buyer acknowledges that it
(and not Seller, the General Partner or the Partnership) shall be responsible
for its own tax liability that may arise as a result of the transactions
contemplated by this Agreement.
SECTION 3.6. BROKER'S OR FINDER'S FEES. No investment banker,
broker, finder or other intermediary has been retained by Buyer or any of its
Affiliates or is authorized to act on behalf of Buyer who might be entitled
to any fee or commission with respect hereto or to the transactions
contemplated hereby.
6.
<PAGE>
ARTICLE 4
ADDITIONAL AGREEMENTS
SECTION 4.1. EXPENSES. Whether or not the transactions contemplated
hereby are consummated, all costs and expenses incurred in connection with
this Agreement, the instruments and documents delivered hereunder and the
transactions contemplated hereby will be paid by the party incurring such
expense.
SECTION 4.2. ADDITIONAL AGREEMENTS; FURTHER ACTIONS. Subject to the
terms and conditions of this Agreement, Buyer and Seller each agree to use
all commercially reasonable efforts to take, or cause to be taken by their
respective Affiliates and otherwise, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement, including using
all commercially reasonable efforts to obtain all necessary waivers, consents
and approvals, to execute and deliver all necessary documents and
instruments, to give all notices and to effect all necessary registrations
and filings. If at any time after the Closing Date any further action is
necessary or desirable to carry out the purposes of this Agreement, the
proper officers and directors of Buyer and Seller shall use all commercially
reasonable efforts to take such action and Buyer and Seller shall use all
commercially reasonable efforts to cause the proper officers and directors of
their respective Affiliates to take such action.
SECTION 4.3. CONFIDENTIALITY; PUBLIC DISCLOSURE. Buyer and Seller
each agree to maintain, and to cause their respective Affiliates to maintain,
the confidentiality of any and all confidential information furnished to it
in connection with the transactions contemplated by this Agreement, except
with the prior written consent of the other or as may be required by any
Governmental Entity.
(a) Buyer and Seller shall consult with each other before
issuing any press release or otherwise making any public statement or making
any other public (or non-confidential) disclosure (whether or not in response
to an inquiry) regarding the terms of this Agreement and the transactions
contemplated hereby, and neither shall issue any such press release or make
any such statement or disclosure without the prior approval of the other
(which approval shall not be unreasonably withheld), except as may be
required by law or by obligations pursuant to any listing agreement with any
national securities exchange or market or with the NASD.
SECTION 4.4. AMENDMENTS TO AGREEMENTS. Effective immediately prior
to the Closing, and without any further action being required on the part of
either party hereto:
(a) Section 7.1 of the JV Agreement shall be deemed to have been
amended to permit the transfer of the Shares from Seller to
Buyer as contemplated hereby;
(b) Section 5.1 of the LP Agreement shall be deemed to have been
amended to permit the transfer of the Partnership Interests
from Seller to Buyer as contemplated hereby;
7.
<PAGE>
(c) The JV Agreement shall be deemed to have been amended to
permit the assignment of Sellers rights and obligations under
the JV Agreement to Buyer as contemplated hereby;
(d) Section 12.8 of the LP Agreement shall be deemed to have been
amended to permit the assignment of Sellers rights and
obligations under the LP Agreement to Buyer as contemplated
hereby; and
(e) Except as provided herein, the LP Agreement and the JV
Agreement shall remain in full force and effect in accordance
with their respective terms.
ARTICLE 5
CONDITIONS TO CLOSING
SECTION 5.1. CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of
Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of all of the following conditions at or prior to
Closing, any one or more of which may be waived by Buyer:
(a) SELLER'S WARRANTIES AND PERFORMANCE. The
representations and warranties of Seller contained in this Agreement shall be
true as of and on the Closing Date with the same effect as though made at the
Closing Date. Seller shall have performed all obligations and complied with
all conditions, covenants and other agreements required by this Agreement to
be performed and complied with by Seller prior to or at the Closing. Seller
shall have delivered to Buyer a certificate to the effect of the preceding
two sentences duly executed by an appropriate officer of Seller.
(b) LEGAL PROHIBITION. On the Closing Date, there shall
exist no injunction or other order issued by a court of competent
jurisdiction, domestic or foreign, or any proceeding pending or threatened
seeking such an injunction or order, which would prohibit or make unlawful
the consummation of the transactions contemplated by this Agreement.
(c) HSR ACT. The waiting period (and any extension thereof)
applicable to the purchase of the Securities under the HSR Act shall have
been terminated or shall have expired.
(d) RESIGNATION OF DIRECTORS. The directors of the General
Partner immediately prior to the Closing that were elected by Seller as the
holder of the Series B Common Stock shall have resigned as directors of the
General Partner effective as of the Closing.
SECTION 5.2. CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of all of the following conditions at or prior to
the Closing, any one or more of which may be waived by Seller:
8.
<PAGE>
(a) BUYER'S WARRANTIES AND PERFORMANCE. The representations
and warranties of Buyer herein contained shall be true as of and on the
Closing Date with the same effect as though made at the Closing Date. Buyer
shall have performed all obligations and complied with all conditions,
covenants and other agreements required by this Agreement to be performed or
complied with by Buyer prior to or on the Closing Date. Buyer shall have
delivered to Seller a certificate to the effect of the preceding two
sentences duly executed by an appropriate officer of Buyer.
(b) LEGAL PROHIBITION. On the Closing Date, there shall
exist no injunction or other order issued by a court of competent
jurisdiction, domestic or foreign, or any proceeding pending or threatened
seeking such an injunction or order, which would prohibit or make unlawful
the consummation of the transactions contemplated by this Agreement.
(c) HSR ACT. The waiting period (and any extension thereof)
applicable to the purchase of the Securities under the HSR Act shall have
been terminated or shall have expired.
ARTICLE 6
TERMINATION AND REMEDIES
SECTION 6.1. TERMINATION. This Agreement may be terminated upon
written notice given at any time prior to the Closing:
(a) by the mutual written consent of Seller and Buyer; or
(b) by either Seller or Buyer, if the Closing shall not
have occurred on or before the date sixty (60) days from the date hereof.
SECTION 6.2. EFFECT OF TERMINATION. In the event of termination of
this Agreement as provided in Section 6.1, this Agreement shall forthwith
become void and there shall be no liability on the part of any party hereto
except (a) as set forth in Sections 4.1 and 4.3 and (b) nothing herein shall
relieve either party from liability for any willful breach hereof.
ARTICLE 7
SURVIVAL AND INDEMNIFICATION
SECTION 7.1. SURVIVAL OF REPRESENTATIONS. The representations and
warranties made by Seller in Article 2 hereof and elsewhere in this Agreement
(including the certificate delivered in accordance with Section 5.1(a)
hereof, insofar as such certificate relates to such representations and
warranties) shall survive until the first anniversary of the Closing Date;
PROVIDED, HOWEVER, that the representations and warranties made by Seller in
Section 2.3 hereof (including the certificate
9.
<PAGE>
delivered in accordance with Section 5.1(a) hereof, insofar as such
certificate relates to such representations and warranties) shall survive
indefinitely after the Closing Date.
(b) The representations and warranties made by Buyer in
Article 3 hereof and elsewhere in this Agreement (including the certificate
delivered in accordance with Section 5.2(a) hereof, insofar as such
certificate relates to such representations and warranties) shall survive
until the first anniversary of the Closing Date.
(c) Anything in this Agreement to the contrary
notwithstanding, no claim for indemnification with respect to the breach of
any representation and warranty contained in this Agreement (or with respect
to any certificate relating to such representation and warranty) may be
brought, and no arbitration or litigation with respect thereto commenced, and
the party making such representation and warranty shall have no obligation
with respect thereto, unless written notice specifying the representation and
warranty claimed to have been breached shall have been delivered to such
party.
SECTION 7.2. INDEMNIFICATION BY SELLER. Seller shall indemnify and
hold Buyer, and its respective directors, officers, employees, agents,
Affiliates and assigns (the "BUYER INDEMNIFIED PARTIES"), harmless from and
against any and all losses, damages, liabilities, claims, demands, judgments,
settlements, costs and expenses (including, without limitation, interest,
penalties, any court or administrative agency costs, and attorneys',
accountants' and other consultants' fees) (hereinafter individually a "LOSS"
and collectively, "LOSSES") suffered or incurred by the Buyer Indemnified
Parties and arising out of or resulting from any inaccuracy in or breach or
nonfulfillment of any representation, warranty, covenant or agreement by
Seller contained in this Agreement.
SECTION 7.3. INDEMNIFICATION BY BUYER. Buyer shall indemnify and
hold Seller, and its respective directors, officers, employees, agents,
Affiliates, and assigns (the "SELLER INDEMNIFIED PARTIES" and, together with
the Buyer Indemnified Parties, the "INDEMNIFIED PARTIES"), harmless from and
against any and all Losses suffered or incurred by the Seller Indemnified
Parties and arising out of or resulting from any inaccuracy in or breach or
nonfulfillment of any representation, warranty, covenant or agreement by
Buyer contained in this Agreement.
SECTION 7.4. CLAIMS.If a claim by a third party is made against an
Indemnified Party, and if such Indemnified Party intends to seek indemnity
with respect thereto under this Agreement, the Indemnified Party shall
promptly (and in any case within 30 days of such claim being formally made)
give the indemnifying party a written notice of such claim. The indemnifying
party shall have 30 days after receipt of such notice to assume and control
the defense of such claim at its expense and through counsel of its choice;
PROVIDED, HOWEVER, that if the Indemnified Party or Indemnified Parties
reasonably determine that a conflict of interest exists where it is advisable
for such Indemnified Party or Indemnified Parties to be represented by
separate counsel or that upon advice of counsel there may be legal defenses
available to such Indemnified Party or Indemnified Parties which are
different from or in addition to those available to the indemnifying party,
then the
10.
<PAGE>
indemnifying party shall not be entitled to assume and control the defense of
such claim. If the indemnifying party elects not to defend against such
claim, then it shall promptly so notify the Indemnified Party and, in such
event, the Indemnified Party shall thereupon again be entitled, at its
option, to assume and control the defense of such claim and through counsel
of its choice. In any circumstance where the Indemnified Party assumes and
controls the defense of such claim, the indemnifying party shall promptly pay
all attorneys', accountants' and other consultants' fees of the Indemnified
Party in connection with the assumption and defense of such claim. If the
indemnifying party exercises its right to undertake the defense against any
such claim as provided above, the Indemnified Party shall cooperate with the
indemnifying party in such defense and make available to the indemnifying
party, at the indemnifying party's expense, all pertinent records, materials
and information in its possession or under its control relating thereto as is
reasonably requested by the indemnifying party. No claim which is being
assumed and defended in good faith by the indemnifying party shall be settled
by the Indemnified Party without the written consent of the indemnifying
party.
(b) The indemnifying party shall be subrogated to any and
all defenses, claims and setoffs which the Indemnified Party asserted or
could have asserted against the third party making a claim. The Indemnified
Party shall execute and deliver to the indemnifying party such documents as
may be reasonably necessary to establish by way of subrogation the ability
and right of the indemnifying party to assert such defenses, claims and
setoffs.
ARTICLE 8
MISCELLANEOUS PROVISIONS
SECTION 8.1. NOTICES. All notices, requests, claims, demands and
other communications given or made pursuant hereto shall be in writing (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by cable, by telecopy (with confirmation copy of such telecopied
material delivered in person or by registered or certified mail, postage
prepaid, return receipt requested) or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 8.1).
(i) If to Buyer:
Abgenix, Inc.
7601 Dumbarton Circle
Fremont, CA 94555
Facsimile: (510) 608-6511
Attention: President
11.
<PAGE>
(ii) If to Seller:
JT America Inc.
New York, NY 10152
Fax: (212) 319-8993
Attn: President
with copies to:
Japan Tobacco, Inc.
JT Building
2-1 Toranoman 2-chome
Minato-Ku, Tokyo 105
Fax: 011-81-3-5-479-0321
Japan
Attn: Vice President, Pharmaceutical Division
Akros Pharma Inc.
1400 Fashion Island Blvd.
Suite 910
San Mateo, CA 94404
Facsimile: (650) 312-8028
Attention: President
Gilbert, Segall and Young
430 Park Avenue
New York, New York 10022
Facsimile: (212) 644-4051
Attention: Neal N. Beaton
SECTION 8.2. SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of, and be binding upon, the parties hereto and their respective
successors and permitted assigns; PROVIDED, HOWEVER, that Seller may not
assign any rights or delegate any of the obligations created under this
Agreement without the prior written consent of Buyer. Nothing in this
Agreement shall confer upon any person or entity not a party to this
Agreement, or the legal representatives of such person or entity, any rights
or remedies of any nature or kind whatsoever under or by reason of this
Agreement.
SECTION 8.3. TITLES AND HEADINGS. Titles and headings to Articles
and Sections herein, and the Table of Contents to this Agreement, are
inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
12.
<PAGE>
SECTION 8.4. SEVERABILITY. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of this Agreement or of any other
term or provision hereof.
SECTION 8.5. ENTIRE AGREEMENT. This Agreement represents the entire
agreement and understanding of the parties with reference to the transactions
set forth herein, and no representations or warranties have been made in
connection with this Agreement or the transactions contemplated hereby other
than those expressly set forth herein, certificates and other documents
delivered in accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings and
agreements between the parties relating to the subject matter of this
Agreement and all prior drafts of this Agreement, all of which are merged
into this Agreement.
SECTION 8.6. WAIVERS AND AMENDMENTS. Each of Seller and Buyer may,
but shall not be obligated to, by written notice to the others (a) extend the
time for the performance of any of the obligations or other actions of the
other; (b) waive any inaccuracies in the representations or warranties of the
other contained in this Agreement; (c) waive compliance with any of the
covenants of the other created under this Agreement; or (d) waive fulfillment
of any of the conditions to its own obligations under this Agreement. The
waiver by any party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach,
whether or not similar. This Agreement may be amended, modified or
supplemented only by a written instrument executed by all parties hereto.
SECTION 8.7. GOVERNING LAW. This Agreement shall be construed under
and in accordance with, and governed in all respects by the laws of the State
of California (without giving effect to principles of conflicts of law).
SECTION 8.8. DISPUTES. The parties will attempt to resolve any
dispute under this Agreement by mutual agreement, and, if required, there
shall be a face-to-face meeting between the Chief Executive Officer of Buyer
and the Vice President of the Pharmaceutical Division of Japan Tobacco, Inc.
Any dispute under this Agreement which is not settled after such meeting
shall be finally settled by binding arbitration, conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration Association by
three (3) arbitrators appointed in accordance with said rules. The
arbitration proceedings and all pleadings and written evidence shall be in
the English language. Any written evidence originally in a language other
than English shall be submitted in English translation accompanied by the
original or a true copy thereof. The costs of the arbitration, including
administrative and arbitrators' fees, shall be shared equally by the parties
to the arbitration. Each party shall bear its own costs and attorneys' and
witness' fees; provided that the prevailing party in any arbitration, as
determined by the arbitration panel, shall be entitled to an award against
the other party in the amount of the prevailing party's costs and reasonable
attorneys' fees. A disputed performance or suspended performances pending the
resolution of the arbitration must be completed within thirty (30) days
following the final decision of the arbitrators. Any arbitration
13.
<PAGE>
subject to this Section 8.8 shall be completed within six (6) months from the
filing of notice of a request for such arbitration.
SECTION 8.9. EXECUTION IN COUNTERPARTS; BINDING EFFECT. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original copy and all of which together shall be considered one and
the same agreement, and shall become a binding agreement when one or more
counterparts have been signed by each party and delivered to the other
parties.
[Remainder of This Page is Intentionally Left Blank]
14.
<PAGE>
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to
be executed as of the day and year first written above.
ABGENIX, INC.
By: /s/ R. Scott Greer
---------------------------------------
R. Scott Greer
President and Chief Executive Officer
JT AMERICA INC.
By: /s/ Shuji Kondo
---------------------------------------
Shuji Kondo
President
15.
<PAGE>
EXECUTION COPY
ABGENIX, INC.
OFFICER'S CERTIFICATE
I, ______________________, ___________________ of ABGENIX, INC., a
Delaware corporation (the "Company"), DO HEREBY CERTIFY, in connection with the
Limited Partnership Interest and Stock Purchase Agreement dated as of December
____, 1999 by and between JT America Inc. and the Company, that the
representations and warranties of the Company contained in Article 3 are true
and correct as of this date.
IN WITNESS WHEREOF, I have signed this certificate dated as of _______
day of ____________, _____.
_______________________________
Name:
Title:
1.
<PAGE>
JT AMERICA INC.
OFFICER'S CERTIFICATE
I, _________________, ______________ of JT AMERICA INC., a New York
corporation (the "Company"), DO HEREBY CERTIFY, in connection with the Limited
Partnership Interest and Stock Purchase Agreement dated as of December ____,
1999 by and between Abgenix, Inc. and the Company, that the representations and
warranties of the Company contained in Article 2 are true and correct as of this
date.
IN WITNESS WHEREOF, I have signed this certificate dated as of _______
day of ____________, _____.
_______________________________
Name:
Title:
2.
<PAGE>
EXECUTION COPY
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
LICENSE AGREEMENT
This LICENSE AGREEMENT (this "Agreement"), effective December 31, 1999
(the "Effective Date") is made by and between ABGENIX, INC., a Delaware
corporation ("ABX") and JAPAN TOBACCO INC., a Japanese corporation ("JTI"), with
reference to the following facts and circumstances. ABX and JTI may be referred
to herein each individually as a "Party" and jointly as the "Parties."
RECITALS
A. WHEREAS, ABX possesses certain patent rights and know-how
useful for the creation, development, use and other exploitation of [*] (as
defined below);
B. WHEREAS, JTI wishes to acquire certain rights with respect
to the creation, development, use and other exploitation of [*] and ABX is
willing to grant such rights pursuant to the terms and conditions of this
Agreement; and
NOW THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, the Parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, capitalized terms set forth in this
Agreement and not otherwise defined herein shall have the meaning set forth
below.
1.1 "ABX KNOW-HOW" shall mean all materials listed on Exhibit A,
and any information, materials, discoveries, inventions, technology, results
and data relating thereto (but excluding any patents or patent applications),
to the extent Controlled by ABX. "ABX Know-How" shall exclude ABX Patent Rights.
1.2 "ABX PATENT RIGHTS" shall mean (a) the U.S. patents and
patent applications listed on Exhibit B, and patents issuing on such patent
applications; (b) continuations, divisionals, reexaminations, reissues or
extensions of any of (a); (c) any foreign counterparts of the applications and
patents in (a) and (b); in each case to the extent Controlled by ABX.
1.3 "AFFILIATE" shall mean any entity which controls, is
controlled by or is under common control with either ABX or JTI. An entity
shall be regarded as in control of another entity if it owns or controls at
least fifty percent (50%) of the shares of the subject entity entitled to vote
in the election of directors (or, in the case of an entity that is not a
corporation, for the election of the corresponding managing authority);
provided that the government of Japan shall not be considered an Affiliate of
JTI.
1.4 "CONTROLLED" shall mean the ability to grant licenses or
sublicenses with respect to a technology or material as provided in this
Agreement without breaching any agreement or other arrangement with a Third
Party. ABX shall be deemed to "Control" rights held by its
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
1.
<PAGE>
Affiliates Xenotech, Inc. and Xenotech, L.P., to the extent that such
Affiliates have the ability to grant licenses or sublicenses under such rights
as provided in the preceding sentence.
1.5 "GENETIC MATERIAL" shall mean a nucleotide sequence,
including DNA, RNA and complementary and reverse complementary nucleotide
sequences thereto, whether coding or non-coding and whether intact or a
fragment.
1.6 [*] shall mean [*] from which a [*] of such [*] has been [*]
PROVIDED THAT [*] shall not include any [*] for which [*] one or more [*] or
portion thereof have been [*]
1.7 "LICENSED TECHNOLOGY" shall mean ABX' rights in the ABX
Patent Rights and ABX Know-How.
1.8 "MAJORITY-OWNED AFFILIATE OF JTI" shall mean an entity of
which JTI owns, directly or indirectly, more than [*] of the shares of such
entity entitled to vote in the election of directors or corresponding
managing authority.
2. LICENSE GRANT
2.1 BY ABX TO JTI. Subject to the terms and conditions of this
Agreement, ABX hereby grants to JTI a co-exclusive (with ABX), royalty-free,
world-wide, sublicensable, perpetual license to practice the Licensed
Technology solely in connection with the creation, development, use or other
exploitation of [*] provided, however, that the foregoing license grant shall
not include the right to sell, lease, offer to sell or lease, or otherwise
transfer title in or to the [*] to any third party.
2.2 LIMITATIONS; RESERVATION OF RIGHTS.
2.2.1 ABX grants no licenses under this Agreement to JTI
under the Licensed Technology or any other intellectual property rights
Controlled by ABX except as expressly stated in Section 2.1.
2.2.2 ABX reserves all rights in the Licensed Technology,
except as expressly set forth in Section 2.1 or any other written Agreement
between the Parties, including without limitation the right to grant one or
more sublicenses thereunder.
3. CONSIDERATION
3.1.1 In consideration of the license granted pursuant to
Section 2.1, JTI shall pay to ABX Six Million U.S. Dollars (US$6,000,000) on
December 31, 1999. With respect to amounts due by JTI pursuant to this Section
3.1.1, (i) all [*] made by [*] hereunder
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2.
<PAGE>
[*] shall be the sole responsibility of [*] shall [*] such [*] from any [*]
to [*] as [*] and shall [*] to the relevant [*] shall timely provide to [*]
of any [*] hereunder; and (iv) [*] shall reasonably cooperate and assist [*]
it is entitled so to elect.
4. CONFIDENTIALITY.
4.1 CONFIDENTIALITY. Except as expressly provided herein, JTI and
ABX each agree that, for the term of this Agreement and for five (5) years
thereafter, the receiving Party shall keep completely confidential and shall
not publish or otherwise disclose and shall not use for any purpose other than
as expressly permitted under this Agreement, any information furnished to it by
the other Party pursuant to this Agreement ("Confidential Information") or any
other information designated the other Party's "Confidential Information" under
any other provision of this Agreement. The ABX Know-How and ABX Patent Rights
shall be deemed to be ABX' Confidential Information. Notwithstanding the
foregoing, "Confidential Information" shall not include any such information
that the receiving Party can establish by competent written proof:
4.1.1 was already known to the receiving Party, other than
under an obligation of confidentiality, at the time of disclosure;
4.1.2 was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving Party;
4.1.3 became generally available to the public or
otherwise part of the public domain after its disclosure and other than through
any act or omission of the receiving Party in breach of this Agreement; or
4.1.4 was subsequently lawfully disclosed to the receiving
Party by a person other than the disclosing Party or developed by the receiving
Party without reference to any information or materials disclosed by the
disclosing Party.
4.2 PERMITTED DISCLOSURE. Notwithstanding Sections 4.1 above and
4.3 below, each Party may nevertheless disclose the other Party's Confidential
Information to the extent such disclosure is reasonably necessary in filing or
prosecuting patent applications, prosecuting or defending litigation, complying
with applicable governmental regulations or otherwise submitting information to
tax or other governmental authorities, making a permitted sublicense or other
exercise of its rights hereunder or conducting clinical trials, provided that
if a Party is required to make any such disclosure of the other Party's
Confidential Information, other than pursuant to a confidentiality agreement
consistent with this Agreement, it will give reasonable advance notice to such
Party of such disclosure requirement and, save to the extent inappropriate in
the case of patent applications, will use efforts consistent with prudent
business judgment to secure confidential treatment of such information prior to
its disclosure (whether through protective orders or confidentiality agreements
or otherwise).
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3.
<PAGE>
4.3 TERMS OF AGREEMENT. Except as expressly provided in this
Article 4, neither Party shall disclose to any Third Party the material terms
of this Agreement without the prior written consent of the other Party hereto,
except to Affiliates, advisors, investors, licensees, sublicensees and others
on a need-to-know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Without limitation
upon any provision of this Agreement, each Party shall be responsible for the
observance by its employees, consultants and contractors of the foregoing
confidentiality obligations.
5. INDEMNIFICATION
5.1 BY JTI. Subject to ABX' compliance with Section 5.3, JTI
agrees to indemnify, defend and hold ABX and its Affiliates and their
directors, officers, employees and agents harmless from and against any
losses, claims, damages, liabilities, or actions resulting directly from any
Third Party claims (collectively, "Liabilities") arising from the creation,
development, manufacture, use or transfer of [*] by JTI, its Affiliates and
sublicensees or the breach of any representations, warranties, covenants or
other obligations of JTI under this Agreement, except to the extent that such
Liabilities arise from ABX' negligence or willful misconduct or its breach of
any of its representations, warranties, covenants or other obligations under
this Agreement.
5.2 BY ABX. Subject to JTI's compliance with Section 5.3, ABX
agrees to indemnify, defend and hold JTI and its Affiliates and their
directors, officers, employees and agents harmless from and against any
Liabilities arising from the breach of any representations, warranties,
covenants or other obligations of ABX under this Agreement, except to the
extent that such Liabilities arise from JTI's negligence or willful misconduct
or its breach of any of its representations, warranties, covenants or other
obligations under this Agreement.
5.3 INDEMNIFICATION PROCEDURES. If a Party (the "Indemnitee")
intends to claim indemnification under this Article 5, it shall promptly notify
the indemnifying Party (the "Indemnitor") in writing of any Liability in
respect of which the Indemnitee or its directors, officers, employees or agents
intend to claim such indemnification, and the Indemnitor shall have the right
to participate in, and, to the extent the Indemnitor so desires, to assume the
defense thereof with counsel mutually satisfactory to the Parties. The
indemnity obligation of this Article 5 shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action if such settlement
is effected without the consent of the Indemnitor, which consent shall not be
withheld or delayed unreasonably. The failure to deliver written notice to the
Indemnitor within a reasonable time after the commencement of any such action
shall not relieve such Indemnitor of any liability to the Indemnitee under this
Article 5, except to the extent that such failure is prejudicial to its ability
to defend such action. The Party claiming indemnification under this Article 5
and its directors, officers, employees and agents, shall cooperate fully with
the Indemnitor and its legal representatives in the investigation of any
action, claim or liability covered by this Article 5.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
4.
<PAGE>
6. REPRESENTATIONS, WARRANTIES AND COVENANTS
6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF ABX. ABX
represents and warrants to JTI that (i) it has the full right and authority to
enter into this Agreement; (ii) it has taken all necessary action on its part
to authorize the execution and delivery of this Agreement and the performance
of its obligations hereunder; (iii) to the knowledge of ABX as of the Effective
Date, there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof or the right of ABX to enter into and
perform its obligations under this Agreement; and (iv) it has not entered and
during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
6.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF JTI. JTI
represents and warrants to ABX that (i) it has the full right and authority to
enter into this Agreement; (ii) it has taken all necessary action on its part
to authorize the execution and delivery of this Agreement and the performance
of its obligations hereunder; (iii) to the knowledge of JTI as of the Effective
Date, there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof or the right of JTI to enter into and
perform its obligations under this Agreement; and (iv) it has not entered and
during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
7. MISCELLANEOUS PROVISIONS
7.1 GOVERNING LAWS. This Agreement shall be interpreted and
construed in accordance with the laws of the State of California, USA, without
regard to conflict of laws principles.
7.2 WAIVER. It is agreed that no waiver by a Party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
7.3 ASSIGNMENT. Neither this Agreement nor any right or
obligation hereunder may be assigned or delegated, in whole or part, by a Party
without the prior written consent of the other Parties; provided that such
written consent shall not be required where: (i) either Party assigns this
Agreement to any entity that acquires substantially all of the assets to which
this Agreement relates, (ii) JTI assigns this Agreement to a Majority-Owned
Affiliate of JTI or (iii) ABX assigns this Agreement to an Affiliate. The terms
and conditions of this Agreement shall be binding on and inure to the benefit
of the permitted successors and assigns of the Parties. Any assignment not in
conformance with this Section 7.3 shall be null, void and of no legal effect.
7.4 INDEPENDENT CONTRACTORS. The relationship of the Parties is
that of independent contractors. The Parties shall not be deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
7.5 COMPLIANCE WITH LAWS. In exercising their rights under this
Agreement, the Parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
5.
<PAGE>
and orders of any governmental body having jurisdiction over the exercise of
rights under this Agreement.
7.6 FURTHER ACTIONS. Each Party agrees to execute, acknowledge
and deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
7.7 NOTICES. Any notice, request, approval or consent required or
permitted to be given between the Parties hereto shall be given in writing, and
shall be deemed to have been properly given if delivered in person, transmitted
by telecopy (with machine confirmation of transmission and confirmation by
personal delivery, first class certified mail or courier), or mailed by first
class certified mail to the other Party at the appropriate address set forth
below, or to such other address as may be designated in writing by a Party from
time to time in accordance with this Agreement.
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranoman 2-chome
Minato-Ku, Tokyo 105
Japan
Fax: 011-81-3-5-479-0321
Attn: Vice President
Pharmaceutical Division
With copies to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Fax: (212) 644-4051
Attn: Neal N. Beaton, Esq.
Akros Pharma Inc.
1400 Fashion Island Blvd.
Suite 910
San Mateo, CA 94404
Fax: (650) 312-8028
Attn: President
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
6.
<PAGE>
Abgenix, Inc.: Abgenix, Inc.
7601 Dumbarton Circle
Fremont, CA 94555
Fax: (510) 608-6511
Attn: President
With a copy to: Cooley Godward LLP
3000 El Camino Real
Five Palo Alto Square
Palo Alto, CA 94306-2155
Fax: (650) 857-0663
Attn: Robert L. Jones, Esq.
7.8 SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision and the parties shall discuss in good faith
appropriate revised arrangements.
7.9 FORCE MAJEURE. Nonperformance of any Party shall be excused
to the extent that performance is rendered impossible by strike, fire,
earthquake, flood, governmental acts or orders or restrictions, failure of
suppliers, or any other reason where failure to perform is beyond the
reasonable control, and not caused by the negligence, intentional conduct or
misconduct of the non-performing Party.
7.10 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL ANY PARTY HERETO
BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER.
7.11 DISPUTE RESOLUTION; ARBITRATION. The Parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between the Chief Executive Officer of
ABX and the Vice President of the Pharmaceutical Division of JTI. Any dispute
under this Agreement which is not settled after such meeting shall be finally
settled by binding arbitration, conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association by three (3)
arbitrators appointed in accordance with said rules. The arbitration
proceedings and all pleadings and written evidence shall be in the English
language. Any written evidence originally in a language other than English
shall be submitted in English translation accompanied by the original or a true
copy thereof. The costs of the arbitration, including administrative and
arbitrators' fees, shall be shared equally by the parties to the arbitration.
Each Party shall bear its own costs and attorneys' and witness' fees; PROVIDED
THAT the prevailing party in any arbitration, as determined by the arbitration
panel, shall be entitled to an award against the other party in the amount of
the prevailing party's costs and reasonable attorneys' fees. A disputed
performance or suspended performances pending the resolution of the arbitration
must be completed within thirty (30) days following the final decision of the
arbitrators. Any arbitration subject to this Section 7.11 shall be completed
within six (6) months from the filing of notice of a request for such
arbitration.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
7.
<PAGE>
7.12 COMPLETE AGREEMENT. It is understood and agreed between ABX
and JTI that this Agreement constitutes the entire agreement, both written and
oral, between the Parties with respect to the subject matter hereof, and
supersedes and cancels all prior agreements respecting the subject matter
hereof, either written or oral, expressed or implied. No amendment or change
hereof or addition hereto shall be effective or binding on either of the
Parties unless reduced to writing and executed by the respective duly
authorized representatives of ABX and JTI.
7.13 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and both together
shall be deemed to be one and the same agreement.
7.14 HEADINGS. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for
convenience of reference only and shall not affect its meaning or
interpretation.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.
ABGENIX, INC.
By: /s/ R. Scott Greer
-------------------------------------
R. Scott Greer
President and Chief Executive Officer
JAPAN TOBACCO INC.
By: /s/ Takashi Kato
------------------------------------------
Takashi Kato
Managing Director, Pharmaceutical Division
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
8.
<PAGE>
EXHIBIT A
ABX KNOW-HOW
[*]
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[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
<PAGE>
EXHIBIT B
ABX PATENT RIGHTS
[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
