<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For Quarter Ended: March 1, 1997
Commission File No: 0-10824
GENOME THERAPEUTICS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2297484
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION
OF INCORPORATION OR ORGNIZATION) NO.)
100 BEAVER STREET; WALTHAM, MASSACHUSETTS 02154
--- ------ ------ ------- ------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER: (617) 398-2300
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No___
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
COMMON STOCK 17,660,477
------------ ----------
$.10 PAR VALUE Outstanding April 11, 1997
--------------
<PAGE> 2
This Form 10Q/A is being filed for the sole purpose of adding Exhibit
10.38, Collaboration and License Agreement between the Company, Schering
Corporation, and Schering-Plough Ltd. dated December 20, 1996, to the Company's
Quarterly Report on Form 10Q for quarter ended March 1, 1997, which was filed on
April 15, 1997.
2
<PAGE> 3
EXHIBIT INDEX
10.38 Collaboration and License Agreement between the Company, Schering
Corporation and Schering-Plough Ltd., dated as of December 20, 1996
(22)*
FOOTNOTES
*Confidential treatment requested with respect to a portion of this Exhibit.
(22) Filed herewith.
3
<PAGE> 4
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized who also serves in the capacity of principal financial
officer.
Genome Therapeutics Corp.
/s/ Fenel M. Eloi
----------------------
Fenel M. Eloi
(Principal Financial Officer)
Date: June 1, 1997
4
<PAGE> 1
COLLABORATION AND LICENSE AGREEMENT
AMONG
GENOME THERAPEUTICS CORPORATION,
SCHERING CORPORATION
AND
SCHERING-PLOUGH LTD.
dated as of December 20, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1. DEFINITIONS.......................................................................... 1
1.1. "Additional Gene Information"........................................................ 1
1.2. "Affiliate".......................................................................... 1
1.3. "Asthma"............................................................................. 2
1.4. "[*] Research Milestone"............................................................. 2
1.5. "Asthma Gene Sequence"............................................................... 2
1.6. "CRO Agreement"...................................................................... 2
1.7. "Contract Year"...................................................................... 2
1.8. "Development Candidate".............................................................. 2
1.9. "Diagnostic Product"................................................................. 2
1.10. "Event of Default"................................................................... 2
1.11. "FDA"................................................................................ 2
1.12. "First Commercial Sale".............................................................. 2
1.13. "Gene Patent Rights"................................................................. 3
1.14. "Gene Sequence"...................................................................... 3
1.15. "IND"................................................................................ 3
1.16. "Lead Compound"...................................................................... 3
1.17. "Licensed Asthma Gene Sequences"..................................................... 3
1.18. "Major Market Country"............................................................... 3
1.19. "NDA"................................................................................ 3
1.20. "Net Sales".......................................................................... 3
1.21. "Overall Research Plan".............................................................. 4
1.22. "Product"............................................................................ 4
1.23. "Product Category"................................................................... 5
1.24. "Product Patent Rights".............................................................. 5
1.25. "Proof of Principle Trial"........................................................... 5
1.26. "Research Agreements"................................................................ 5
1.27. "Research Collaboration"............................................................. 5
1.28. "Southampton Agreement".............................................................. 5
1.29. "Third Party"........................................................................ 5
1.30. "Valid Claim"........................................................................ 6
ARTICLE 2. SCOPE AND STRUCTURE OF THE COLLABORATION............................................. 6
2.1. General.............................................................................. 6
2.2. [*] Acknowledgment of Other Collaborations........................................... 6
ARTICLE 3. LICENSE GRANTS; MARKETING RIGHTS..................................................... 6
3.1. Grant of Rights by GTC to SC......................................................... 6
3.1.1. Exclusive Grant of Rights................................................... 6
3.1.2. Sublicenses................................................................. 6
3.2. Reservation of Rights................................................................ 7
3.3. Grant of Rights by SC to GTC......................................................... 7
3.4. No Grant of Other Technology or Patent Rights........................................ 7
</TABLE>
*Confidential Treatment Requested
(i)
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE 4. CONDUCT OF THE RESEARCH COLLABORATION................................................ 8
4.1. Obligations of the Parties........................................................... 8
4.1.1. Reasonable Efforts.......................................................... 8
4.1.2. Completion and Approval of Asthma Gene Sequences............................ 8
4.1.3. Deliveries by GTC........................................................... 8
4.2. Access to Data, Information Exchange and Reports..................................... 8
4.3. Term of Research Collaboration; Level of Effort by GTC Scientists.................... 9
4.4. Availability of Employees............................................................ 9
4.5. Joint Research Committee............................................................. 9
4.5.1. Research Plan............................................................... 9
4.5.2. Annual Research Plans....................................................... 9
4.5.3. Periodic Reviews............................................................ 10
4.5.4. Membership of Joint Research Committee...................................... 10
4.5.5. Joint Research Committee Meetings........................................... 10
4.5.6. Decision Making............................................................. 11
4.6. Joint Patent Committee............................................................... 11
ARTICLE 5. DEVELOPMENT AND MARKETING DUE DILIGENCE.............................................. 11
5.1. Diligent Discovery Efforts........................................................... 11
5.1.1. Discovery Efforts by SC..................................................... 11
5.1.2. Release of a Product Category............................................... 11
5.1.3. [*]......................................................................... 12
5.1.4. [*]......................................................................... 12
5.1.5. SC Failure to Exploit a Product Category.................................... 13
5.2. Diligent Development Efforts......................................................... 14
5.3. Diligent Marketing and Distribution Efforts.......................................... 14
5.4. Reports.............................................................................. 15
ARTICLE 6. PAYMENTS............................................................................. 15
6.1. License and Other Fees............................................................... 15
6.1.1. Initial Fees................................................................ 15
6.2. Milestone Payments................................................................... 15
6.2.1. New Gene Payments............................................................ 15
6.2.2. SC Milestone Payments....................................................... 15
6.3. Research Funding..................................................................... 16
6.3.1. Annual Fee.................................................................. 16
6.3.2. Additional Research Contributions and [*] Research Milestone Payments....... 16
6.3.3. Additional Expenditures..................................................... 17
6.4. Royalties Payable by SC and its Affiliates and Sublicensees.......................... 17
6.4.1. Royalties on Net Sales of the Products...................................... 18
6.4.2. Sublicenses................................................................. 18
6.4.3. Adjustments for Third Party Royalties....................................... 18
6.4.4. Royalty Reports, Exchange Rates............................................. 18
6.4.5. Audits...................................................................... 19
6.4.6. Royalty Payment Terms....................................................... 19
6.5. Withholding Taxes.................................................................... 20
</TABLE>
*Confidential Treatment Requested
(ii)
<PAGE> 4
<TABLE>
<S> <C>
6.6. Blocked Currency. .................................................................. 20
6.7. Interest on Late Payments............................................................ 20
6.8. Allocation of Payments............................................................... 20
6.9. Manner of Payment.................................................................... 20
ARTICLE 7. INTELLECTUAL PROPERTY................................................................ 20
7.1. Ownership of Intellectual Property................................................... 20
7.2. Filing, Prosecution and Maintenance of Product Patent Rights......................... 21
7.2.1. Prosecution and Maintenance of Product Patent Rights........................ 21
7.2.2. Abandonment; Failure to Pay................................................. 22
7.2.3. Cooperation................................................................. 22
7.3. Infringement by Others; Prosecution by SC............................................ 22
7.4. Infringement by Others; Prosecution by GTC........................................... 22
7.5. Cooperation in Infringement Actions.................................................. 23
7.6. Trademarks........................................................................... 23
ARTICLE 8. CONFIDENTIALITY...................................................................... 23
8.1. Nondisclosure Obligations............................................................ 23
8.1.1. General..................................................................... 23
8.1.2. Limitations................................................................. 23
8.2. Samples.............................................................................. 24
8.3. Injunctive Relief.................................................................... 24
8.4. SC Control of Publications........................................................... 24
ARTICLE 9. REPRESENTATIONS AND WARRANTIES....................................................... 25
9.1. Representations, Warranties and Covenants of GTC..................................... 25
9.2. Representations, Warranties and Covenants of SC...................................... 26
9.3. Validity and Scope................................................................... 26
9.4. Warranty Disclaimer.................................................................. 26
9.5. Limited Liability.................................................................... 27
ARTICLE 10. INDEMNITY............................................................................ 27
10.1. SC Indemnity Obligations............................................................. 27
10.2. Limitation on SC Indemnity Obligations............................................... 27
10.3. Procedure............................................................................ 27
10.4. Insurance............................................................................ 28
ARTICLE 11. EXPIRATION AND TERMINATION........................................................... 28
11.1. Expiration........................................................................... 28
11.1.1. Term of Research Collaboration.............................................. 28
11.1.2. Term of Agreement........................................................... 28
11.2. Events of Default.................................................................... 28
11.2.1. Default by Either Party..................................................... 28
11.2.2. Default by SC............................................................... 28
11.3. Effect of an Event of Default........................................................ 29
11.3.1. Remedies Available to GTC................................................... 29
11.3.2. Remedies Available to SC.................................................... 30
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<S> <C>
11.4. Effect of Expiration or Termination of Research Collaboration........................ 30
11.4.1. Effect of Expiration or Termination of Agreement..................................... 30
11.4.2. Survival of Provisions Upon Expiration...................................... 30
11.4.3. Survival of Provisions Upon Termination..................................... 30
ARTICLE 12. PROVISIONS FOR INSOLVENCY............................................................ 31
12.1. General.............................................................................. 31
12.2. Rejection of Agreement in Title 11................................................... 31
12.3. Additional Rights.................................................................... 31
ARTICLE 13. MISCELLANEOUS........................................................................ 32
13.1. Force Majeure........................................................................ 32
13.2. Assignment........................................................................... 32
13.3. Severability......................................................................... 32
13.4. Notices.............................................................................. 33
13.5. Applicable Law....................................................................... 33
13.6. Dispute Resolution................................................................... 34
13.7. Entire Agreement..................................................................... 34
13.8. Publicity............................................................................ 34
13.9. Headings............................................................................. 35
13.10. Independent Contractors............................................................... 35
13.11. Agreement Not to Solicit Employees.................................................... 35
13.12. Exports............................................................................... 35
13.13. Waiver................................................................................ 35
13.14. Counterparts.......................................................................... 35
</TABLE>
<TABLE>
<S> <C>
Exhibit A Draft Overall Research Plan
Exhibit B Research Milestones
Exhibit C Form of Material Transfer Agreement
Exhibit D-1 Clinical Trial Research Agreement between GTC and International Medical
Technical Consultants, Inc.
Exhibit D-2 Sponsored Research Agreement between GTC and University of Southampton
Exhibit D-3 Exclusive License Agreement between GTC and University of Southampton
Exhibit E Rules of Arbitration
</TABLE>
(iv)
<PAGE> 6
COLLABORATION AND LICENSE AGREEMENT
THIS COLLABORATION AND LICENSE AGREEMENT (the "Agreement") is dated as
of December 20, 1996 (the "Effective Date") and is made by and among GENOME
THERAPEUTICS CORPORATION, a Massachusetts corporation having its principal place
of business at 100 Beaver Street, Waltham, Massachusetts 02154 U.S.A. ("GTC")
and SCHERING CORPORATION, a New Jersey corporation having its principal place of
business at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033 and SCHERING-
PLOUGH LTD., a Swiss corporation having its principal place of business at
Toepferstrasse 5, CH-6004, Lucerne, Switzerland (together with Schering
Corporation, "SC"). GTC and SC are sometimes referred to herein individually as
a party and collectively as the parties.
R E C I T A L S
WHEREAS, GTC is involved in research programs regarding the use of
positional cloning to discover human genes, an objective of which is to discover
potential biological targets for use in drug discovery; and
WHEREAS, SC is interested in funding and collaborating with GTC for the
development, manufacture and sale of novel human therapeutics relating to
asthma; and
WHEREAS, GTC is willing to provide to SC gene sequences relating to
asthma and enter into such a collaboration upon the terms and conditions set
forth below;
NOW THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto mutually agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article 1
shall have the meanings specified below:
1.1. "Additional Gene Information" shall mean (i) information related
to Asthma Gene Sequences or other Gene Sequences which is discovered or
developed by GTC during the term of the Research Collaboration (collectively
"GTC Gene Information") and (ii) information related to GTC Gene Information
which is discovered or developed by SC through a material use of GTC Gene
Information during the term of the Research Collaboration and thereafter [*]
1.2. "Affiliate" shall mean any corporation or other entity which
directly or indirectly controls, is controlled by or is under common control
with a party to this Agreement. A corporation or other entity shall be regarded
as in control of another corporation or entity if it owns or directly or
indirectly controls more than fifty percent
*Confidential Treatment Requested
<PAGE> 7
(50%) of the outstanding voting stock or other ownership interest of the other
corporation or entity, or if it possesses, directly or indirectly, the power to
manage, direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint fifty percent (50%)
or more of the members of the governing body of the corporation or other entity.
Any such other relationship as in fact results in actual control over the
management, business and affairs of a corporation or other entity shall also be
deemed to constitute control.
1.3. "Asthma" shall mean the disease state customarily described as
asthma [*]
1.4. "[*] Research Milestone" shall mean the milestones set forth in
Exhibit B hereto.
1.5. "Asthma Gene Sequence" shall mean a gene discovered by GTC to be
associated with Asthma [*] which is [*] sequenced by GTC and confirmed by the
Joint Research Committee as described in Section 4.1.2 hereof.
1.6. "CRO Agreement" shall mean the Clinical Trial Research Agreement
between GTC and International Medical Technical Consultants, Inc. [*] for use in
the Research Collaboration; a copy of which is attached as Exhibit D-1.
1.7. "Contract Year" shall mean each twelve (12) month period starting
on (i) the Effective Date in the case of the first Contract Year and (ii) the
anniversary of the Effective Date for each subsequent Contract Year.
1.8. "Development Candidate" shall mean any compound, including a Lead
Compound, (i) designated by the Schering-Plough Research Institute Project
Assessment Committee or its successor for full clinical development or (ii) with
respect to which SC, its Affiliates, sublicensees or designees have initiated an
in vivo toxicology program necessary to obtain approval for use of such compound
in human clinical trials.
1.9. "Diagnostic Product" shall mean any device, product, process,
substance, composition or service intended to predict, detect, or identify a
disease or determine the presence of a pathologic condition in a human (whether
related to Asthma or not).
1.10. "Event of Default" shall have the meanings set forth in Section
11.2 hereof.
1.11. "FDA" shall mean the United States Food and Drug Administration.
1.12. "First Commercial Sale" of a Product in a country shall mean the
first for profit sale for use or consumption by the general public of a Product
in such country after the required marketing and pricing and/or pricing
reimbursement approvals for such country have been obtained.
*Confidential Treatment Requested
-2-
<PAGE> 8
1.13. "Gene Patent Rights" shall mean Product Patent Rights covering
Licensed Asthma Gene Sequences.
1.14. "Gene Sequence" shall mean any actual gene sequence associated
with Asthma and the protein product encoded by such sequenced gene.
1.15. "IND" shall mean an investigational new drug application or its
equivalent filed with the FDA and necessary for beginning clinical trials in
humans, or any comparable application filed with the regulatory authorities of a
country other than the United States prior to beginning clinical trials in
humans in that country, with respect to Products.
1.16. "Lead Compound" shall mean a biological or chemical compound,
therapy or modality with respect to which SC, its Affiliates, sublicensees or
designees have initiated a program of optimization.
1.17. "Licensed Asthma Gene Sequences" shall mean, collectively, the
Asthma Gene Sequences and Additional Gene Information, as such may be
supplemented from time to time as provided herein.
1.18. "Major Market Country" shall mean one or more of: (i) the United
States; (ii) Japan; (iii) at least two countries selected from France, Italy,
Germany and the United Kingdom.
1.19. "NDA" shall mean a new drug application or product license
application or its equivalent filed with the FDA after completion of human
clinical trials to obtain marketing approval for a Product, or any comparable
application filed with the regulatory authorities of a country other than the
United States, including, where applicable, any applications for pricing and/or
price reimbursement.
1.20. "Net Sales" shall mean the gross invoice price for Products sold
by SC or its Affiliates or sublicensees to a Third Party customer less the
reasonable and customary accrual-basis deductions from such gross amounts for:
(i) normal and customary trade, cash and other discounts, allowances and
credits; (ii) credits or allowances actually granted for damaged goods, returns
or rejections of Products and retroactive price reductions; (iii) sales or
similar taxes (including duties or other governmental charges levied on,
absorbed or otherwise imposed on the sales of Products including, without
limitation, value added taxes or other governmental charges otherwise measured
by the billing amount, which are included in billing amount; (iv) freight,
postage, shipping, customs duties and insurance charges which are included in
the billing amount; (v) charge back payments and rebates granted to managed
health care organizations or to federal, state and local governments, their
agencies, and purchasers and reimbursers or to trade customers, including but
not limited to, wholesalers and chain and pharmacy buying groups; (vi) [*]
and (vii) [*]
*Confidential Treatment Requested
-3-
<PAGE> 9
[*] The transfer of Products by SC or one of its Affiliates to (i) another
Affiliate of SC or (ii) a sublicensee of SC shall not be considered a sale; in
such cases, Net Sales shall be determined based on the invoiced sales price by
the Affiliate or sublicensee to its Third Party customer, less the deductions
allowed under this Section. Every other commercial use or disposition of
Products by SC or its Affiliates or sublicensees of SC in barter or similar
transactions, not including samples, shall be considered a sale of the Products
at the weighted average Net Sales price for Products during the preceding
quarter.
In the event that a Product is sold in the form of a combination
product containing such Product and one or more other active ingredients which
is not by itself a Product (a "Combination Product"), Net Sales for such
Combination Product will be calculated by multiplying actual Net Sales of such
Combination Product by the fraction A/(A+B), where A is the invoice price of the
Product if sold separately by SC, an Affiliate or a sublicensee and containing a
Product as the only active ingredient and B is the invoice price of any other
active component or components in the Combination Product if sold separately by
SC, an Affiliate or a sublicensee. In the event that the Product is sold in the
form of a Combination Product containing such Product and one or more other
active ingredients which is not by itself a Product and one or more of such
other active ingredients of the Combination Product are not sold separately,
then the above formula shall be modified such that A shall be the total
manufacturing cost to SC, its Affiliate or sublicensee of the Product and B
shall be the total manufacturing cost to SC, its Affiliate, sublicensee or other
supplier of any other active component or components in the Combination Product.
Notwithstanding the foregoing, (i) active ingredients shall not include
diluents, vehicles or adjuvants and (ii) in no event shall Net Sales for any
Combination Product calculated under this provision be less than fifty percent
of the invoice price of such Combination Product.
In the event that SC, its Affiliates or sublicensees sell Products
pursuant to an agreement with an independent customer specifying, for a
combination of products or services, a single price, other terms of purchase not
separately identifying either a price per product or the effective deductions
referred to above per product or a price for units of the Products which is
discounted below SC's, its Affiliates' or its sublicensee's standard invoice
price per unit of the Products by at least five (5) percentage points more than
the amount that any other product or service included in the arrangement is
discounted below such other product's or service's standard invoice price, then
GTC and SC will determine a mutually agreeable method of calculation so that a
fair and reasonable portion of the aggregate purchase price is allocated to the
Product(s) included in any such arrangement.
1.21. "Overall Research Plan" shall mean the research plan agreed upon
by the Joint Research Committee pursuant to Section 4.5.1 hereof, as it may be
subsequently amended, improved or modified from time to time, the draft of which
is attached hereto as Exhibit A (the "Draft Overall Research Plan").
1.22. "Product" shall mean any therapeutic pharmaceutical product
(excluding any Diagnostic Product) used to treat Asthma which (i) contains a
component which is covered
*Confidential Treatment Requested
-4-
<PAGE> 10
by one or more Valid Claims included within the Product Patent Rights or (ii)
contains a component discovered or developed during the Research Collaboration
by SC and/or GTC through a material use of the Licensed Asthma Gene Sequences,
or (iii) which is discovered by SC through a material use of the Licensed Asthma
Gene Sequences provided to SC under this Agreement at any time during the term
of the Research Collaboration and thereafter [*]
1.23. "Product Category" shall mean any one of the following four
categories of therapeutic modalities for Products: (i) small molecule products,
(ii) gene therapy products, (iii) protein therapeutic products, and (iv)
antisense products.
1.24. "Product Patent Rights" shall mean (a) the United States and
foreign patent applications filed covering Products (including components
thereof) or the manufacture of Products or biological targets discovered and/or
developed based upon the Research Collaboration or during the course of SC's
performance of its development obligations under Article 5 of this Agreement,
(b) any United States patents and foreign patents issuing from such patent
applications and (c) any continuations, continuations-in-part directed to
subject matter specifically described in such patent applications, divisionals,
patents of addition, renewals, registrations, confirmations, reexaminations,
reissues, extensions or provisional applications of any of the foregoing.
Product Patent Rights shall not include any of the foregoing to the extent that
they are specifically directed to and cover Diagnostic Products.
1.25. "Proof of Principle Trial" shall mean a placebo-controlled Phase
II clinical study conducted to evaluate the effectiveness of a drug for a
particular indication or indications in patients with the disease or condition
under study and to determine the common short-term side effects and risks
associated with the drug. A Proof of Principle Trial shall be deemed to be
successfully completed if it provides [*]
1.26. "Research Agreements" shall mean, collectively, the CRO Agreement
and the Southampton Agreement.
1.27. "Research Collaboration" shall mean the period of time during
which GTC alone or GTC and SC shall perform the work described under the
Research Plan, which period may be extended pursuant to the terms of this
Agreement. The first day of the Research Collaboration shall be deemed to be the
Effective Date.
1.28. "Southampton Agreement" shall mean the Sponsored Research
Agreement between GTC and the University of Southampton; a copy of which is
attached as Exhibit D-2.
1.29. "Third Party" shall mean any entity other than GTC or SC and
their respective Affiliates.
*Confidential Treatment Requested
-5-
<PAGE> 11
1.30. "Valid Claim" shall mean a claim of a patent application or a
patent which has not been held permanently revoked, unenforceable or invalid by
a decision of a court or other governmental agency of competent jurisdiction,
and which is not subject to appeal.
ARTICLE 2. SCOPE AND STRUCTURE OF THE COLLABORATION
2.1. General. GTC and SC wish to establish a collaborative alliance to
develop Products. During the course of this collaboration, GTC and SC shall
communicate regularly and shall assume different rights and responsibilities for
the development of Products, all as more specifically described below.
2.2. [*] Acknowledgment of Other Collaborations. SC acknowledges that
GTC is currently engaged in certain research collaborations with Third Parties
and intends to enter into additional research collaborations in the future. [*]
ARTICLE 3. LICENSE GRANTS; MARKETING RIGHTS
3.1. Grant of Rights by GTC to SC.
3.1.1. Exclusive Grant of Rights. Subject to the terms of this
Agreement, GTC hereby grants to SC the right of exclusive access to (i) the
Licensed Asthma Gene Sequences, (ii) information made available to GTC under the
Research Agreements, and (iii) the exclusive worldwide right and license under
the Product Patent Rights maintained in GTC's name pursuant to Subsection
7.2.1., to research, develop, use, manufacture, have manufactured, market,
promote, import, export, sell and have sold Products. The rights granted to SC
in this Subsection 3.1.1. shall survive the termination or expiration of the
Research Collaboration and continue for the entire term of this Agreement.
3.1.2. Sublicenses. SC shall have the right to grant
sublicenses under the Licensed Asthma Gene Sequences to Affiliates of SC and,
with the prior written consent of GTC which shall not be unreasonably withheld,
to Third Parties, provided, however, that each such Third Party sublicensee
shall execute a written agreement pursuant to which it assumes the applicable
obligations of SC hereunder.
*Confidential Treatment Requested
-6-
<PAGE> 12
3.2. Reservation of Rights. Notwithstanding the rights granted to SC
under this Article 3, GTC at all times reserves the right to use the Licensed
Asthma Gene Sequences and the information developed under the Research
Agreements to research, develop, use, manufacture, have manufactured, and sell
Diagnostic Products, and products other than Products, including, subject to the
provisions of this Section, the right to grant licenses and/or sublicenses with
respect to any such intellectual property rights for such purpose.
Notwithstanding the foregoing, GTC shall not grant any licenses and/or
sublicenses pursuant to this Section without [*]
3.3. Grant of Rights by SC to GTC. To the extent that it is free to do
so, SC grants to GTC a royalty free, exclusive worldwide right and license with
the right to sublicense, under its interest in all Gene Patent Rights to develop
and commercialize Diagnostic Products. The rights granted to GTC in this Section
3.3 shall survive the termination of this Agreement and continue for the full
unexpired term of any Gene Patent Right. In addition, in the event that GTC
notifies SC in writing of a need by GTC or a sublicensee of GTC, reasonably
demonstrated to SC, to be licensed under SC's interest in any Product Patent
Rights not included in the Gene Patent Rights for the purpose of developing
Diagnostic Products, SC shall grant to GTC a license under any Product Patent
Rights that would otherwise be infringed by GTC's or its sublicensee's
development or commercialization of such Diagnostic Products, on the terms set
forth in this Section for the Gene Patent Rights, which grant shall not be
unreasonably withheld.
3.4. No Grant of Other Technology or Patent Rights. Except as otherwise
expressly provided in this Agreement, under no circumstances shall a party
hereto, as a result of this Agreement, obtain any ownership interest in or other
right to any technology, know-how, patents, patent applications, genomic
sequence data, products, or biological materials of the other party, including
items owned, controlled or developed by the other party, or transferred by the
other party to said party, at any time pursuant to this Agreement. Any
compounds, technology or know-how derived, developed or acquired by either party
independent of the Licensed Asthma Gene Sequences and/or the Research
Collaboration shall be the property of such party.
*Confidential Treatment Requested
-7-
<PAGE> 13
ARTICLE 4. CONDUCT OF THE RESEARCH COLLABORATION
4.1. Obligations of the Parties.
4.1.1. Reasonable Efforts. During the Research Collaboration
and thereafter, each of the parties agrees to use its respective commercially
reasonable efforts to perform its obligations under the Overall Research Plan,
each Annual Research Plan and this Agreement in a timely manner.
4.1.2. Completion and Approval of Asthma Gene Sequences. Upon
the discovery and sequencing of each gene associated with Asthma pursuant to the
Overall Research Plan and the Annual Research Plans, GTC shall provide to the
Joint Research Committee, as described below, a written statement claiming the
discovery and sequencing of such gene supported by adequate documents providing
reasonable detail concerning the completion of such sequencing. Within thirty
(30) days following receipt by the Joint Research Committee of such written
statement from GTC, the Joint Research Committee shall deliver its written
confirmation to SC or deliver to GTC a written statement describing in detail
any respect in which sequencing has not been achieved.
4.1.3. Deliveries by GTC. Within ten (10) days following the
completion of each Asthma Gene Sequence, GTC shall deliver to SC electronic and
hard copies of such Licensed Asthma Gene Sequence, as well as an outline of the
methodologies and procedures used to obtain such Asthma Gene Sequence. GTC shall
deliver to SC, upon request, [*] of each completed Asthma Gene Sequence, which
materials shall be deemed to be Additional Gene Information.
4.2. Access to Data, Information Exchange and Reports. SC will have
direct access to raw sequence data that form part of the Licensed Asthma Gene
Sequences and to other work resulting from the Research Collaboration including,
but not limited to, the Additional Gene Information, gene mapping, gene
expression and protein expression data, sequence data, and gene mutation data.
Except for electronic access via a computer network, as set forth below, SC's
access shall be during normal business hours and upon reasonable notice,
granting SC treatment and priority not less favorable than granted to GTC's
other collaborators.
To the extent practicable, SC's access to scientific data contemplated
by Section 4.2 will at all times be at the expense of SC, via electronic
computer network with twenty-four (24) hours accessibility except for downtime
required to maintain or otherwise service the database and under unforeseen
circumstances. SC shall take such measures to insure the security of such
computer link as GTC shall reasonably request, including, without limitation,
restricting access thereto and regulating the information communicated pursuant
thereto for purposes of maintaining confidentiality. In addition to electronic
access via computer network, SC shall be entitled to install and maintain for
the term of this Agreement electronic copies of the database containing the
scientific data generated by GTC pursuant to this Agreement and any updates
thereto on computers maintained by SC at SC facilities. Prior to any such
installation, GTC and SC shall agree upon reasonable security measures to be
instituted by SC to protect such databases from access by Third Parties.
*Confidential Treatment Requested
-8-
<PAGE> 14
During the Research Collaboration and thereafter, each party shall keep
the other informed as to its progress related to the development of Products by
either party or its Affiliates or sublicensees in connection with the Research
Collaboration. In a timely manner during the Research Collaboration, each party
shall provide the other party with a reasonably detailed report which shall
describe the reporting party's progress with respect to its efforts under this
Agreement.
4.3. Term of Research Collaboration; Level of Effort by GTC
Scientists. The Research Collaboration shall continue for a minimum term of [*]
Contract Years and may be extended, at the option of SC, for [*] additional
successive renewal periods of [*] Contract Year each. During the term of the
Research Collaboration, GTC will provide an average of [*] scientist full time
equivalents per year for the Research Collaboration (which level of effort may
be adjusted periodically by the Joint Research Committee). SC will compensate
GTC for any mutually agreed additional level of effort that is provided by GTC
hereunder at a rate to be mutually agreed upon between the two parties.
4.4. Availability of Employees. GTC agrees to make its employees
reasonably available at their places of employment to consult with SC on issues
arising during the Research Collaboration.
4.5. Joint Research Committee.
4.5.1. Research Plan. Within sixty (60) days after the
Effective Date, a joint committee comprised of three (3) named representatives
of each party (the "Joint Research Committee") shall be appointed and shall
agree upon an overall written plan for the research and development to be
conducted by the parties during the Research Collaboration (the "Overall
Research Plan"). The Overall Research Plan shall be consistent with the scope,
scale and direction of Draft Overall Research Plan attached hereto as Exhibit A
and shall establish:
(i) the scope of the Research Collaboration;
(ii) the research objectives, work plan activities and
time schedules with respect to identification of
Asthma gene targets; and
(iii) the responsibilities of each party with respect to
the work to be performed under the Research
Collaboration.
The Overall Research Plan may be revised and updated from time to time as agreed
upon in writing by the Joint Research Committee.
4.5.2. Annual Research Plans. Within sixty (60) days after the
Effective Date, the Joint Research Committee shall agree upon a written plan for
the specific activities to be conducted in connection with the Research
Collaboration during calendar year 1997 (the "Annual Research Plan").
Thereafter, by October 1 of each year during the Research Collaboration
beginning with October 1, 1997, GTC shall submit to the Joint Research
*Confidential Treatment Requested
-9-
<PAGE> 15
Committee a written proposed Annual Research Plan for the following calendar
year. The Joint Research Committee shall review each such proposal as soon as
practicable and shall approve no later than December 23 of such year the final
Annual Research Plan for the next succeeding calendar year.
4.5.3. Periodic Reviews. The Joint Research Committee shall
review the Overall Research Plan on an ongoing basis and may make changes to
clarify the Annual Research Plan then in effect; provided, however, the Annual
Research Plan then in effect shall not be modified except as agreed in writing
by the Joint Research Committee.
4.5.4. Membership of Joint Research Committee. The Joint
Research Committee shall be comprised of three (3) representatives from each of
SC and GTC, with each party's members to be selected by that party. GTC and SC
may replace one or more of its representatives on the Joint Research Committee
at any time upon written notice to the other party. Unless the parties otherwise
agree, the chairmanship of the Joint Research Committee shall rotate at the end
of each Contract Year between a representative of GTC and a representative of
SC, with a representative of SC serving as chairman during the first Contract
Year. The chairman of the Joint Research Committee shall be responsible for
calling meetings, preparing agendas and preparing and issuing minutes of each
meeting within thirty (30) days thereafter. From time to time the Joint Research
Committee may establish subcommittees to oversee particular projects or
activities, and such subcommittees will be constituted as the Joint Research
Committee shall agree.
4.5.5. Joint Research Committee Meetings. The Joint Research
Committee shall meet monthly during the term of the Research Collaboration, or
more often as agreed upon by both parties, at such locations as the parties may
agree upon. Two (2) representatives from each of SC and GTC shall constitute a
quorum, and no decision of the Joint Research Committee shall be binding unless
a quorum is present. Regularly scheduled meetings or special meetings of the
Joint Research Team may be in such form (e.g. in person, by telephone or by
video conference) as the members of the Joint Research Committee shall agree. At
least one (1) week prior to each meeting of the Joint Research Committee, each
of GTC and SC shall provide to the other a written progress report. Such
progress reports shall describe relevant findings since the last meeting and
provide such other information as reasonably requested by SC and/or GTC relating
to the progress of the goals or performance of the Research Collaboration. At
such meetings, the Joint Research Committee shall (i) formulate and review the
objectives of the Research Collaboration as expressed in the Overall Research
Plan, (ii) monitor the progress of the Annual Research Plan toward those
objectives and (iii) take such other actions as may be specified under this
Agreement or as the parties may deem appropriate. With the consent of both
parties, other representatives of GTC or SC or their respective Affiliates or,
in the case of SC and its Affiliates, their sublicensees, may attend the
meetings of the Joint Research Committee as nonvoting observers. Each party
shall be responsible for all expenses of its representatives on the Joint
Research Committee. The Joint Research Committee shall keep accurate minutes of
its deliberations which shall record all proposed decisions and all actions
recommended or taken and which shall be countersigned by one representative of
each party. All records of the Joint Research Committee shall be available to
both parties.
-10-
<PAGE> 16
4.5.6. Decision Making. Any approval, determination or other
action agreed to by all members of the Joint Research Committee or their
respective designees present at the relevant Joint Research Committee meeting
shall be the approval, determination or other action of the entire Joint
Research Committee. Except as otherwise agreed, all decisions require the
unanimous approval of the members of the Joint Research Committee present at the
meeting. The Joint Research Committee may, however, delegate to one party or to
a specific representative the authority to make certain decisions. In the event
of a dispute within the Joint Research Committee, if the members of the Joint
Research Committee are unable to resolve such dispute after engaging in good
faith negotiations for thirty (30) days, then such dispute shall be resolved in
accordance with Section 13.6 hereof.
4.6. Joint Patent Committee. A joint committee comprised of one (1)
named representative of each party (the "Joint Patent Committee") shall be
appointed and shall meet as needed. A party may change its representative to the
Joint Patent Committee at any time. Members of the Joint Patent Committee may be
represented at any meeting by a deputy. Additional members of the Joint Patent
Committee may be appointed on an ad hoc basis upon the mutual consent of the
parties. The Joint Patent Committee shall formulate and supervise the execution
of an intellectual property protection strategy with regard to all matters in
connection with the Gene Patent Rights. In any instance in which GTC informs SC
in writing that it objects to the filing of any patent application by SC, the
filing of such application shall be subject to the prior written approval of the
Joint Patent Committee. The policies and procedures set forth in Section 4.5.6
shall apply to the Joint Patent Committee and references to the Joint Research
Committee made therein shall be deemed to refer to the Joint Patent Committee
for purposes of this Section 4.6.
ARTICLE 5. DEVELOPMENT AND MARKETING DUE DILIGENCE
5.1. Diligent Discovery Efforts.
5.1.1. Discovery Efforts by SC. SC agrees, at its own expense,
to use diligent efforts to use the Licensed Asthma Gene Sequences to discover
one or more Lead Compounds in such Product Categories as SC shall determine, in
its sole discretion, to pursue. Such diligent efforts shall be comparable to
those efforts used by SC for other SC discovery programs with comparable
commercial potential, value and development status; provided, however, that such
minimum level of effort shall be undertaken by SC with respect to each Asthma
Gene Sequence delivered by GTC pursuant to Subsection 4.1.2 and provided,
further, that, [*]
5.1.2. Release of a Product Category. In the event that SC
elects to not pursue the level of discovery efforts described in Section 5.1 for
one or more Product Categories (the "Released Product Categories") with respect
to any Asthma Gene Sequence, and GTC determines that it is desirable for such
discovery efforts to be pursued for any Released Product Category with respect
to such Asthma Gene Sequence, then GTC may elect to (i) notify the Joint
Research Committee in writing of its determination and propose to the
*Confidential Treatment Requested
-11-
<PAGE> 17
Joint Research Committee that SC undertake such level of discovery effort for
any Released Product Category with respect to such Asthma Gene Sequence, and
(ii) if, within ninety (90) days after such proposal is made to the Joint
Research Committee, SC does not commence discovery efforts for such Released
Product Category with respect to such Asthma Gene Sequence, then GTC may
commence discovery efforts for such Released Product Category with respect to
such Asthma Gene Sequence (the "GTC Discovery Program"); [*]
5.1.3. [*]
[*]
5.1.4. [*]
*Confidential Treatment Requested
-12-
<PAGE> 18
[*]
5.1.5. SC Failure to Exploit a Product Category. In the event
that, prior to [*] SC has not pursued discovery efforts described in Section
5.1.1 for a particular Product Category (an "Abandoned Product Category"), then,
at any time thereafter (provided that SC shall not have commenced such discovery
efforts with respect to such Abandoned Product Category), GTC may notify SC
that, in its determination, discovery efforts should be undertaken with respect
to such Abandoned Product Category. Within thirty (30) days from receipt of such
written notice, SC may elect to [*]
*Confidential Treatment Requested
-13-
<PAGE> 19
[*]
5.2. Diligent Development Efforts. SC agrees, at its own expense, to
use diligent efforts to develop and commercialize, either directly or through
its Affiliates or sublicensees, the Lead Compounds and Development Candidates
selected by it pursuant to Section 5.1. Such diligent efforts shall be
comparable to those efforts used by SC for other SC product candidates with
comparable commercial potential, value and development status and shall include
the active conduct of in vivo toxicology trials necessary to obtain approval for
use of such compound in human clinical trials or the active conduct of human
clinical trials. The selection of Lead Compounds and Development Candidates for
development and commercialization shall be in the sole discretion of SC. SC, its
Affiliates and sublicensees may, but shall have no obligation under this
Agreement to, develop and commercialize more than [*] in each Product Category
at any time during the term of this Agreement. If SC discontinues development of
a Lead Compound or Development Candidate, SC will, to the extent commercially
reasonable, resume the diligent discovery efforts described in Section 5.1 with
the objective of selecting a replacement Lead Compound or Development Candidate,
as the case may be, and maintaining at least [*] under active pre-clinical or
clinical development. Such diligent development efforts will continue until
approvals for commercial sale and pricing and/or pricing reimbursement, as
necessary, have been obtained for at least one Product in each Major Market
Country where obtaining such approvals is commercially reasonable.
5.3. Diligent Marketing and Distribution Efforts. SC shall have the
exclusive worldwide right to market and distribute the Products. Upon receipt of
approvals for commercial sale and pricing and/or pricing reimbursement, if
applicable, of a Product in any country, SC agrees, at its own expense, to use
diligent efforts to launch, promote, market and sell such Product in such
country. Such efforts shall be comparable to those efforts used by SC to promote
its own products of similar commercial potential, value and development
*Confidential Treatment Requested
-14-
<PAGE> 20
status in such country or a comparable country, as the case may be. Both parties
recognize that extenuating circumstances may arise that warrant a delay in
launching a Product in a particular country, including but not limited to
unfavorable pricing, pricing reimbursement or labelling of the Product in such
country. The parties agree that such extenuating circumstances shall be
considered in connection with any determination concerning whether SC has
fulfilled its obligation to use diligent efforts to launch, promote, market and
sell such Product in such country.
5.4. Reports. After the expiration or termination of the Research
Collaboration, SC shall provide GTC with reasonably detailed reports which shall
describe SC's progress with respect to its development, commercialization and
marketing efforts under this Agreement. Such reports shall be furnished
semi-annually until approvals for commercial sale and pricing and/or pricing
reimbursement, as necessary, has been obtained pursuant to Section 5.2, and,
thereafter, annually until the termination or expiration of this Agreement.
ARTICLE 6. PAYMENTS
6.1. License and Other Fees.
6.1.1. Initial Fees. Within five (5) days that SC is generally
open for business after the execution of this Agreement, SC shall pay to GTC for
the rights granted hereunder (i) a license fee in the amount of [*] and (ii) a
[*] in the amount of [*].
6.2. Milestone Payments. SC shall pay to GTC the milestone payments
described below as and when the corresponding milestones are achieved:
6.2.1. New Gene Payments. SC shall pay to GTC an amount equal
to [*] (the "New Gene Payment") within ten (10) business days of receipt by SC
of a written confirmation from the Joint Research Committee that GTC has
completed [*] sequencing of an Asthma Gene Sequence pursuant to Section 4.1.2
hereof. The New Gene Payment shall be payable upon the completion of the
sequencing of each of the first three (3) Asthma Gene Sequences by GTC for a
maximum of up to [*] in total aggregate payments pursuant to this Section.
6.2.2. SC Milestone Payments. SC will immediately notify GTC
upon the accomplishment of the following milestones and, within [*] days
following the accomplishment of each milestone, SC shall make the corresponding
milestone payment. The payment associated with the [*] milestone set forth in
the table below shall [*]. The other milestone payments set forth in this
Section 6.2.2 shall [*] Thus, under no circumstances shall any of the milestone
payments set forth in this Section 6.2.2 be paid [*] times in the aggregate.
*Confidential Treatment Requested
-15-
<PAGE> 21
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Milestone Payment
=======================================================================
<S> <C>
[*] [*]
- -----------------------------------------------------------------------
[*] [*]
- -----------------------------------------------------------------------
[*] [*]
- -----------------------------------------------------------------------
[*] [*]
- -----------------------------------------------------------------------
[*] [*]
- -----------------------------------------------------------------------
</TABLE>
6.3. Research Funding.
6.3.1. Annual Fee. SC will pay GTC [*] for the [*] payable
quarterly in four equal installments of [*] and, thereafter, the [*] for each
subsequent quarter (including quarters of Contract Years included in any
extension of the Research Collaboration) for funding of the sponsored research
outlined in the Overall Research Plan. Such amounts shall be payable in advance
in quarterly payments, with the first quarterly payment of [*] due within
fifteen (15) days after the Effective Date. As used herein, the phrase [*] shall
mean the following:
[*] = [*]
Where
[*]
6.3.2. Additional Research Contributions and [*] Research
Milestone Payments. In addition to the payments described in Section 6.2, SC
will
(i) contribute [*] of the costs of all amounts payable under
the Southampton Agreement, of which [*] is to be paid within
five (5) business days of the execution of this Agreement in
United States dollars, at the then applicable exchange rate as
correctly published in the Wall Street Journal on the last
*Confidential Treatment Requested
-16-
<PAGE> 22
business day prior to the execution of this Agreement, as an
advance on the first year's amounts due under the Southampton
Agreement. The remainder is to be paid within thirty (30) days
of notification by GTC to SC of any obligation to make further
payments under the Southampton Agreement (the budget for which
shall not be varied or amended by GTC without the prior
written approval of SC),
(ii) fund the activities to be performed under the CRO
Agreement by making payments to GTC within thirty (30) days of
notification by GTC to SC of any obligation to make payments
under the CRO Agreement (the budget for which shall not be
varied or amended by GTC without the prior written approval of
SC), and
(iii) pay to GTC an amount equal to [*] within thirty (30)
business days of receipt by SC of a written confirmation from
the Joint Research Committee that GTC has completed each
Annual Research Milestone within the time period specified in
Exhibit B. The Joint Research Committee shall deliver its
written confirmation to SC or deliver to GTC a written
statement describing in detail any respect in which such
Annual Research Milestone has not been achieved within thirty
(30) days following receipt by the Joint Research Committee of
a written statement from GTC claiming the completion of such
Annual Research Milestone supported by adequate documents
providing reasonable detail concerning the completion of such
Annual Research Milestone.
6.3.3. Additional Expenditures. In the event that the scope,
scale or direction of the Research Collaboration as described in the draft
Overall Research Plan attached hereto as Exhibit A changes after the Effective
Date, any additional expenditures required to be made by GTC to support the
Research Collaboration shall be funded by SC, provided, that all changes in the
scope, scale or direction of the Research Collaboration which may trigger
additional funding by SC shall be approved in advance by the Joint Research
Committee. If such additional payments relate to items of capital equipment or
Third Party software which are reasonably anticipated to be used by GTC to a
greater extent outside the Research Collaboration than within the Research
Collaboration, then GTC and SC shall negotiate in good faith regarding the
allocation of such costs between GTC and SC; provided, however, that each of SC
and GTC cannot be required to contribute to such costs without its prior written
consent.
6.4. Royalties Payable by SC and its Affiliates and Sublicensees.
Following the First Commercial Sale of any Product, SC will pay, on a quarterly
basis, a royalty in the amounts set forth below on Net Sales of the Products
during the previous quarter.
* Confidential Treatment Requested
-17-
<PAGE> 23
6.4.1. Royalties on Net Sales of the Products. In
consideration of the licenses granted to SC, SC shall pay to GTC a royalty in
the amount of (i) [*] on cumulative Net Sales by SC, its Affiliates and
sublicensees of Products for which human trials are initiated on or before [*]
(ii) [*] on cumulative Net Sales by SC, its Affiliates and sublicensees of
Products for which human trials are initiated on or after [*] and (iii) with
respect to sales of [*] in any country in the world by SC, its Affiliates and
sublicensees, the sale or manufacture of which would infringe in the country of
sale or manufacture, but for the license granted to SC hereunder, a Valid Claim
included in a Product Patent Right, an additional [*] of Net Sales on the
royalty rates set forth in clause (i) or (ii) of this Section in each country in
which such Product Patent Right exists.
6.4.2. Sublicenses. SC shall (i) with respect to any
sublicenses by SC which include a grant of rights to use Licensed Asthma Gene
Sequences for research and development, and/or for commercialization activities
other than marketing, promotion or distribution of products, pay to GTC [*] of
the fair market value of all consideration received by SC from any Third Party
to which a sublicense is granted hereunder in connection therewith which is not
based upon Net Sales of the Products by such Third Party in such country and
(ii)(A) pay to GTC royalties on Net Sales of the Products sold by any such Third
Party in such country or (B) provide in such sublicense that such sublicensee
shall pay to GTC royalties on Net Sales of the Products sold by such sublicensee
in such country, in either case at the royalty rate set forth in Section 6.4
that would be applicable had such sales been made by SC, and provided that in
either case, SC shall remain liable for the timely payment of all such
royalties. [*]
6.4.3. Adjustments for Third Party Royalties. If SC is
required to pay royalties to Third Parties for rights under patents necessary to
make or sell the Products, it may deduct an amount equal to up to [*] of such
royalties from the additional royalties due GTC pursuant to clause (iii) of
Section 6.4.1, provided, however that the royalties due to GTC under such clause
may not be reduced by more than [*] in any given quarter by all deductions or
credits allowed under this Agreement.
6.4.4. Royalty Reports, Exchange Rates. During the term of
this Agreement following the First Commercial Sale of any Product, SC shall
within sixty (60) days after each calendar quarter furnish to GTC a written
quarterly report showing: (i) the gross sales of the Products sold by SC and its
Affiliates and sublicensees during the reporting period and the calculation of
Net Sales from such gross sales; (ii) the sublicense payments received by SC
during the reporting period; (iii) the royalties and other payments payable in
United States dollars which shall have accrued hereunder in respect of such
sales and sublicense payments; (iv) withholding taxes, if any, required by law
to be deducted in respect of such royalties and sublicense payments; (v) the
dates of the First Commercial Sales of Products in any country during the
reporting period; and (iv) the exchange rates used in determining the
* Confidential Treatment Requested
-18-
<PAGE> 24
amount of United States dollars payable hereunder. Royalties payable on sales in
countries other than the United States shall be calculated by multiplying the
appropriate royalty rate times the sales in each currency in which they are made
and converting the resulting amount into United States dollars at the rates of
exchange used by SC for reporting such sales for United States financial
statement purposes. If no royalty or payment is due for any royalty period
hereunder, SC shall so report. SC shall keep complete and accurate records in
sufficient detail to properly reflect all gross sales and Net Sales and to
enable the royalties payable hereunder to be determined.
6.4.5. Audits. Upon the written request of GTC, SC shall
permit an independent certified public accountant selected by GTC and acceptable
to SC, which acceptance shall not be unreasonably withheld, to have access
during normal business hours to such records of SC as may be reasonably
necessary to verify the accuracy of the royalty reports described herein, in
respect of any fiscal year ending not more than twenty-four (24) months prior to
the date of such request. GTC and SC shall use commercially reasonable efforts
to schedule all such verifications within forty-five (45) days after GTC makes
its written request. All such verifications shall be conducted at GTC's expense
and not more than once in each calendar year. In the event GTC's independent
certified public accountant concludes that additional royalties were owed to GTC
during such period, the additional royalty shall be paid by SC within thirty
(30) days of the date GTC delivers to SC such independent certified public
accountant's written report so concluding. Subject to SC's rights under Section
13.6, in the event GTC's independent certified public accountant concludes that
there was an overpayment of royalties to GTC during such period, the overpayment
less the reasonable fees and expenses charged by such representative shall be
repaid by GTC within thirty (30) days of the date GTC received such independent
certified public accountant's written report so concluding. The fees charged by
such independent certified public accountant shall be paid by GTC unless the
audit discloses an underpayment of the royalties payable by SC for the audited
period of more than five percent (5%), in which case SC shall pay the reasonable
fees and expenses charged by such representative. SC shall include in each Third
Party sublicense granted by it pursuant to this Agreement a provision requiring
the sublicensee to make reports to SC, to keep and maintain records of sales
made pursuant to such sublicense and to grant access to such records by GTC's
independent certified public accountant to the same extent required of SC under
this Agreement. GTC agrees that all information subject to review under this
Section 6.4.5 or under any sublicense agreement is confidential and that GTC
shall cause its independent certified public accountant to enter in a
confidentiality agreement with SC obligating such accountant to retain all such
information in confidence. GTC's independent certified public accountant shall
only report to GTC as to the computation of the royalties and other payments due
to GTC under this Agreement and shall not disclose to GTC any other information
of SC or its sublicensees.
6.4.6. Royalty Payment Terms. Royalties shown to have accrued
by each royalty report provided for under this Agreement shall be due sixty (60)
days after the end of each calendar quarter. Payment of royalties in whole or in
part may be made in advance of such due date. Royalties determined to be owing
with respect to any prior quarter shall be added, together with interest thereon
accruing under this Agreement from the date of the report for the quarter for
which such amounts are owing, to the next quarterly payment hereunder.
-19-
<PAGE> 25
6.5. Withholding Taxes. [*] SC shall not [*] including but not
limited to any such taxes or charges incurred as a result of an assignment or
sublicense by SC to any Affiliate or any Third Party [*]. SC shall [*]. The
parties will exercise diligent efforts to ensure that any withholding taxes
imposed are reduced as far as possible under the provisions of any treaties
applicable to any payment made hereunder.
6.6. Blocked Currency. If transfer of amounts payable hereunder to
United States dollars is subject to administrative authorization, SC shall
promptly file the transfer application with the competent authorities supported
by all requisite documentation, and use its reasonable efforts to obtain such
authorization and effect the remittance within the applicable period set forth
under this Article 6; provided, however, that nothing in this Section 6.6 shall
relieve SC from its obligation to pay any amounts payable hereunder within the
applicable period set forth under this Article 6.
6.7. Interest on Late Payments. Any payments by SC to GTC that are not
paid on or before thirty (30) days after the date such payments are due under
this Agreement shall bear interest, to the extent permitted by applicable law,
at one and one half percent (1.5%) per month, calculated on the total number of
days payment is delinquent; provided, however, that interest shall not accrue
pursuant to this Section 6.7 on any amounts payable under this Agreement with
respect to which payment is disputed in good faith; provided further that
interest shall accrue pursuant to this Section 6.7 once such dispute has been
resolved if payment is not made promptly thereafter.
6.8. Allocation of Payments. Fifty percent (50%) of all payments to be
made by SC to GTC pursuant to this Article 6 shall be paid by Schering
Corporation and the balance shall be paid by Schering-Plough Ltd.
Notwithstanding the foregoing, Schering Corporation and Schering-Plough Ltd. are
jointly and severally liable for any and all amounts payable to SC to GTC
pursuant to this Article 6.
6.9. Manner of Payment. Payments to be made by SC to GTC under this
Agreement shall be payable in United States dollars and shall be paid by bank
wire transfer in immediately available funds to such bank account in the
Commonwealth of Massachusetts as is designated in writing by GTC from time to
time.
ARTICLE 7. INTELLECTUAL PROPERTY
7.1. Ownership of Intellectual Property. Subject to the rights and
licenses granted under this Agreement (i) GTC shall retain ownership of the
Licensed Asthma Gene Sequences and (ii) SC shall retain ownership of the Product
Patent Rights.
* Confidential Treatment Requested
-20-
<PAGE> 26
7.2. Filing, Prosecution and Maintenance of Product Patent Rights.
7.2.1. Prosecution and Maintenance of Product Patent Rights.
SC shall be responsible for the preparation, filing, prosecution (including
oppositions) and maintenance of the Product Patent Rights at its expense in its
own name.
(a) With respect to any Gene Patent Rights, SC shall
consult with GTC and keep GTC fully informed of important issues relating to the
preparation, filing, prosecution and maintenance of Gene Patent Rights. SC shall
consult and keep GTC informed of SC's patent strategy with respect to Gene
Patent Rights, and shall furnish to GTC copies of documents relevant to the
preparation or filing, and, upon GTC's request, copies of document relevant to
prosecution and maintenance of Gene Patent Rights. SC shall provide to GTC
advance copies of documents relevant to preparation or filing of Gene Patent
Rights sufficiently prior to filing to allow GTC an opportunity to review and
comment on such documents. SC shall seriously consider all GTC comments on such
patent filings. In the event that GTC informs SC in writing, prior to the filing
of any patent application within the Gene Patent Rights, that it objects to the
filing of such application, then the filing of such application shall be subject
to the prior written approval of the Joint Patent Committee pursuant to Section
4.6 hereof. If SC elects not to seek or maintain Gene Patent Rights in any
country, GTC shall have the right, at its option and expense, with the
reasonable assistance of SC to file, prosecute (including oppositions) and
maintain such patent applications and patents in GTC's name, provided, however,
that the rights of the parties with respect to any such Gene Patent Rights shall
in all other respects be as described in this Agreement. SC will advise GTC of
all decisions taken with respect to any such election in a timely manner in
order to allow GTC to protect its rights under this Section 7.2.1.
(b) SC shall keep GTC reasonably informed with
respect to the status of any patents or patent applications which are Product
Patent Rights but not Gene Patent Rights. SC's obligations under this Section
7.2.1(b) shall include, without limitation:
(i) notifying GTC of the application number, filing
and priority dates of all patent applications
subject to this Section 7.2.1(b);
(ii) providing to GTC copies of the claims of such
applications promptly after filing; and
(iii) periodically, but at least annually, advising
GTC of the occurrence of substance changes in
the status of such applications, such as final
rejections, allowances, interferences and
oppositions.
GTC acknowledges that any information, including, without limitation,
related know-how and/or materials covered by such applications, provided to GTC
pursuant to this Section 7.2.1(b) is proprietary to SC and of significant
commercial value to SC. GTC agrees to use diligent efforts, at least equivalent
to those employed by GTC in protecting its own intellectual property of similar
commercial value, to maintain such information strictly
-21-
<PAGE> 27
confidential. GTC shall use such information solely for purposes of tracing SC's
obligations to pay royalties to GTC under this agreement, and shall limit access
to such information on a need to know basis to only those employees and agents
of GTC who have responsibility for such activities within GTC.
7.2.2. Abandonment; Failure to Pay. SC agrees that it will not
abandon the prosecution of any patent applications included within the Product
Patent Rights nor shall it fail to make any payment or fail to take any other
action necessary to maintain a patent under the Product Patent Rights unless it
has notified GTC in sufficient time for GTC to assume such prosecution or make
such payment.
7.2.3. Cooperation. Each party shall make available to the
other party (or to the other party's authorized attorneys, agents or
representatives), its employees, agents or consultants to the extent reasonably
necessary or appropriate to enable the appropriate party to file, prosecute and
maintain patent applications and resulting patents as set forth in this Section
7.2 for periods of time reasonably sufficient for such party to obtain the
assistance it needs from such personnel. Where appropriate, each party shall
sign or cause to have signed all documents relating to said patent applications
or patents at no charge to the other party.
7.3. Infringement by Others; Prosecution by SC. GTC and SC shall each
promptly notify the other in writing of any alleged or threatened infringement
of patents or patent applications included in the Product Patent Rights of which
they become aware, and the parties shall consult concerning the action to be
taken. SC shall have the right, but not the obligation, to prosecute at its own
expense any such infringement. Any recovery or damages derived from such action
shall be used (i) first to reimburse SC for all legal expenses relating to the
suit and (ii) second to pay GTC the royalty it would have been entitled to
receive had the sale of such infringing products been sales of Products licensed
by SC hereunder. [*]
7.4. Infringement by Others; Prosecution by GTC. If, within six (6)
months after SC first becomes aware of any infringement of the Product Patent
Rights, SC fails to cause such infringement to terminate or to bring a suit or
action to compel termination, GTC shall have the right, but not the obligation,
to bring such suit or action to compel termination at the sole expense of GTC.
In such event, GTC shall have the right, if SC is a legally indispensable party,
to bring such suit or action in the name of SC. Any recovery or damages in such
suit shall be retained by GTC.
SC shall have the right, prior to the commencement of the trial of any
suit or action brought by GTC, to join any such suit or action and, in such
event, shall pay one-half of the entire cost of such suit or action. Provided
that SC has joined in the action and shared the costs thereof as stated in the
preceding sentence, no settlement, consent judgment or other voluntary final
disposition of the suit may be entered into without the consent of SC, which
consent shall not unreasonably be withheld. Any recovery or damages derived from
such action shall be used (i) first to reimburse GTC for all legal expenses
relating to the suit and (ii) second to pay GTC the royalty it would have been
entitled to receive had the sale of such infringing products been sales of
Products licensed by SC hereunder. [*]
* Confidential Treatment Requested
-22-
<PAGE> 28
[*] of any remaining recovery or damages shall thereafter be retained by GTC
and the balance shall be distributed to SC.
7.5. Cooperation in Infringement Actions. In any infringement suit
which either party may institute to enforce the Product Patent Rights pursuant
to this Agreement, the other party hereto shall, at the request of the party
initiating such suit, cooperate in all respects and, to the extent possible,
have its employees testify when requested and make available relevant records,
papers, information, samples and the like. GTC's cooperation in any suit
initiated by SC shall be at SC's expense. SC's cooperation in any suit initiated
by GTC shall be at GTC's expense.
7.6. Trademarks. SC shall be free to use and to register in any
trademark office in the world any trademark for use with Products it desires in
its sole discretion. SC shall own all right, title and interest in and to any
such trademark in its own name or that of its designated Affiliate during and
after the term of this Agreement.
ARTICLE 8. CONFIDENTIALITY
8.1. Nondisclosure Obligations.
8.1.1. General. Except as otherwise provided in this Article
8, during the term of this Agreement and for a period of ten (10) years
thereafter, the parties shall maintain in confidence and use only for purposes
specifically authorized under this Agreement (i) Licensed Asthma Gene Sequences,
(ii) any other information and data received from the other party resulting from
or related to the Research Collaboration and the Products and (iii) all
information and data not described in clauses (i) or (ii) but supplied by the
other party under this Agreement marked "Confidential." For purposes of this
Article 8, information and data described in clauses (i), (ii) or (iii) shall be
referred to as "Information."
8.1.2. Limitations. To the extent it is reasonably necessary
or appropriate to fulfill its obligations or exercise its rights under this
Agreement: (i) a party may disclose Information it is otherwise obligated under
this Section 8.1 not to disclose to its Affiliates, sublicensees, consultants,
outside contractors and clinical investigators, on a need-to-know basis and on
condition that such entities or persons agree to (non-use obligations
essentially the same as those set forth herein) and to keep the Information
confidential for the same time periods and to the same extent as such party is
required to keep the Information confidential; and (ii) a party or its
sublicensees may disclose such Information to government or other regulatory
authorities to the extent that such disclosure is reasonably necessary to obtain
patents or authorizations to conduct clinical trials of, and to commercially
market, Products pursuant to this Agreement. The obligation not to disclose
Information shall not apply to any part of such Information that: (i) is or
becomes part of the public domain other than by unauthorized acts of the party
obligated not to disclose such Information or its Affiliates or sublicensees;
(ii) can be shown by written documents to have been disclosed to the receiving
party or its Affiliates or sublicensees by a Third Party, provided such
Information was not obtained by such Third Party directly or indirectly from the
other party to this Agreement
* Confidential Treatment Requested
-23-
<PAGE> 29
pursuant to a confidentiality agreement; (iii) prior to disclosure under this
Agreement, was already in the possession of the receiving party or its
Affiliates or sublicensees, provided such Information was not obtained directly
or indirectly from the other party to this Agreement pursuant to a
confidentiality agreement; (iv) can be shown by written documents to have been
independently developed by the receiving party or its Affiliates without breach
of any of the provisions of this Agreement; or (v) is disclosed by the receiving
party pursuant to interrogatories, requests for information or documents,
subpoena, civil investigative demand issued by a court or governmental agency or
as otherwise required by law, provided, however, that the receiving party
notifies the other party immediately upon receipt thereof, giving such other
party sufficient advance notice to permit it to seek a protective order or other
similar order with respect to such Information and provided, further, that the
disclosing party furnishes only that portion of the Information which it is
advised by counsel is legally required whether or not a protective order or
other similar order is obtained by the other party.
8.2. Samples. Samples of genes or other biological targets identified,
sequenced, synthesized, purified or developed in the course of the Research
Collaboration shall not be supplied or sent by either party to any Third Party,
other than to regulatory agencies or for use in clinical trials, unless such
release is approved by a member of the Joint Research Committee from the other
party and protected by an appropriate materials transfer agreement substantially
similar to the form of Material Transfer Agreement attached hereto as Exhibit C.
Samples of materials other than those described above provided by one party (the
"supplying party") to the other party (the "receiving party") in the course of
the Research Collaboration shall not be supplied or sent by the receiving party
to any Third Party, other than to regulatory agencies or for use in clinical
trials, without the written consent of the supplying party.
8.3. Injunctive Relief. The parties hereto understand and agree that
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Article 8 by either party or their employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf. Accordingly, each party shall be entitled to the granting of injunctive
relief by a court of competent jurisdiction against any action that constitutes
any such breach of this Article 8.
8.4. SC Control of Publications. The parties acknowledge that GTC holds
rights under the Southampton Agreement relating to the control of publications
and other forms of public disclosure, as set forth in Section 4.3 thereof, and
also holds corresponding rights under the Exclusive License Agreement between
the University of Southampton and GTC (a copy of which is attached as Exhibit
D-3), as set forth in Section 7.2 thereof, (hereinafter collectively referred to
as the "Publication Provisions"). GTC agrees that upon receipt of copies of any
proposed disclosures pursuant to the Publication Provisions, it shall promptly
provide a copy of all such proposed disclosures to SC, and shall otherwise keep
SC fully informed with respect to all communications between GTC and the
University of Southampton regarding such proposed disclosures. GTC hereby grants
to SC all of the same rights held by GTC under the Publication Provisions,
including, without limitation, the right to (1) review proposed disclosures,
suggest revisions, and determine whether any invention or confidential
information would be disclosed by a proposed disclosure; (ii) participate in
-24-
<PAGE> 30
any agreement between GTC and the University of Southampton regarding revisions
to prevent disclosure contains information which is of substantial commercial
importance to GTC and/or SC, which rights shall be held jointly by GTC and SC.
GTC acknowledges and agrees that with regard to the exercise of such jointly
held rights, as between GTC and SC, SC shall have final decision making
authority and control. In the event that SC decides to exercise any of the
rights set forth in the Publication Provisions and as granted to SC hereunder,
it shall promptly notify GTC to that effect. Upon receipt of any such notice
from SC, GTC shall act as SC's agent in the exercise of such rights and shall
promptly and fully cooperative with SC's decisions and instructions with regard
to manner and timing of the exercise of such rights, including, without
limitation, providing notice and relaying information and SC's decisions between
SC and the University of Southampton.
ARTICLE 9. REPRESENTATIONS AND WARRANTIES
9.1. Representations, Warranties and Covenants of GTC. GTC represents
and warrants to and covenants with SC that:
9.1.1. GTC is a corporation duly organized, validly existing
and in corporate good standing under the laws of Massachusetts;
9.1.2. GTC has the legal right, authority and power to enter
into this Agreement, and to extend the rights and licenses granted to SC in this
Agreement;
9.1.3. GTC has taken all necessary action to authorize the
execution, delivery and performance of this Agreement;
9.1.4. upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of GTC enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
9.1.5. the performance of its obligations under this Agreement
will not conflict with its charter documents or result in a breach of any
agreements, contracts or other arrangements to which it is a party;
9.1.6. GTC will not during the term of this Agreement enter
into any agreements, contracts or other arrangements that would be inconsistent
with its obligations under this Agreement; and
9.1.7. GTC will not during the term of this Agreement
[*] including without limitation [*]
* Confidential Treatment Requested
-25-
<PAGE> 31
[*] GTC is currently [*]
9.2. Representations, Warranties and Covenants of SC. SC represents and
warrants to and covenants with GTC that:
9.2.1. SC are corporations duly organized, validly existing
and in corporate good standing under the laws of New Jersey and Switzerland,
respectively;
9.2.2. SC has the legal right, authority and power to enter
into this Agreement, and to extend the rights and licenses granted to GTC in
this Agreement;
9.2.3. SC has taken all necessary action to authorize the
execution, delivery and performance of this Agreement;
9.2.4. upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of SC enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law);
9.2.5. the performance of its obligations under this Agreement
will not conflict with SC's charter documents or result in a breach of any
agreements, contracts or other arrangements to which it is a party; and
9.2.6. SC will not after the Effective Date enter into any
agreements, contracts or other arrangements that would be inconsistent with its
obligations under this Agreement.
9.3. Validity and Scope. Nothing in this Agreement shall be construed
as a warranty or representation by either party as to the accuracy or
completeness of any Licensed Asthma Gene Sequences or the validity or scope of
the Product Patent Rights.
9.4. Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY LICENSED
ASTHMA GENE SEQUENCES, PRODUCT PATENT RIGHTS, GOODS, SERVICES OR OTHER SUBJECT
MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL
OF THE FOREGOING.
* Confidential Treatment Requested
-26-
<PAGE> 32
9.5. Limited Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT
OR OTHERWISE TO THE CONTRARY, NEITHER GTC NOR SC WILL BE LIABLE WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY PUNITIVE, EXEMPLARY,
INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT
OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES.
ARTICLE 10. INDEMNITY
10.1. SC Indemnity Obligations. SC agrees to defend, indemnify and hold
GTC, its Affiliates and their respective employees and agents harmless from all
claims, losses, damages or expenses arising as a result of: (a) actual or
asserted violations of any applicable law or regulation by SC, its Affiliates or
sublicensees by virtue of which the Products manufactured, distributed or sold
hereunder shall be alleged or determined to be adulterated, misbranded,
mislabeled or otherwise not in compliance with any applicable law or regulation;
(b) claims for bodily injury, death or property damage attributable to the
manufacture, distribution, sale or use of the Products by SC, its Affiliates or
sublicensees; or (c) a Product recall ordered by a governmental agency or
required by a confirmed Product failure as reasonably determined by the parties
hereto.
10.2. Limitation on SC Indemnity Obligations. GTC, its Affiliates and
their respective employees and agents shall not be entitled to the indemnities
set forth in Section 10.1 where the claim, loss, damage or expense for which
indemnification is sought was caused by a grossly negligent act or intentional
act of misconduct or omission by GTC, its directors, officers, employees or
authorized agents.
10.3. Procedure. If GTC or any of its Affiliates or their respective
employees or agents (the "Indemnitee") intends to claim indemnification under
this Article 10, the Indemnitee shall promptly notify the other party (the
"Indemnitor") of any loss, claim, damage, liability or action in respect of
which the Indemnitee intends to claim such indemnification, and the Indemnitor
shall assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an Indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the Indemnitor, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Article 10 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 unreasonably. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article 10, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article
10. The Indemnitee under this Article 10, its 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
-27-
<PAGE> 33
indemnification. The Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
10.4. Insurance. SC shall maintain appropriate product liability
insurance with respect to development, manufacture and sales of the Products by
SC in such amount as SC customarily maintains with respect to sales of its other
products. SC shall maintain such insurance for so long as it continues to
manufacture or sell the Products, and thereafter for so long as SC maintains
insurance for itself covering such manufacture or sales.
ARTICLE 11. EXPIRATION AND TERMINATION
11.1. Expiration.
11.1.1. Term of Research Collaboration. Unless this Agreement
is sooner terminated in accordance with the provisions of this Article 11, the
term of the Research Collaboration shall expire [*] months from the Effective
Date; provided, however, that SC may, in its discretion, elect to extend the
Research Collaboration for [*] SC shall deliver written notice to GTC at least
[*] prior to the expiration of the initial term and, if applicable, any
extension of the Research Collaboration definitively stating whether SC intends
to exercise its option to extend the term of the Research Collaboration. In any
event, GTC may, in its discretion, engage in an orderly wind-down of the
Research Collaboration, including the reassignment of the scientists devoted
thereto, during the last [*] thereof, provided that, GTC continues to fulfill
its obligations under this Agreement.
11.1.2. Term of Agreement. Unless this Agreement is sooner
terminated in accordance with the provisions of this Article 11, this Agreement
shall expire and the licenses granted by GTC to SC hereunder shall become fully
paid and irrevocable, on a Product by Product and country by country basis, [*]
after the First Commercial Sale of the relevant Product in the relevant country
or, if later, upon the last to expire of any Valid Claim included in the Product
Patent Rights with respect to such Product in such country.
11.2. Events of Default.
11.2.1. Default by Either Party. An Event of Default shall
have occurred upon (i) the occurrence of a breach of a material term of this
Agreement (other than a material breach described in clause (ii) hereof or in
Section 11.2.2 below) if the breaching party fails to remedy such breach within
ninety (90) days after written notice thereof by the non-breaching party, or
(ii) the bankruptcy, insolvency, dissolution or winding up of a party.
11.2.2. Default by SC. An Event of Default shall have occurred
if:
(i) SC fails to make payments due hereunder, sixty (60) days
after GTC delivers written notice thereof to SC specifying such failure and its
claim of right to
* Confidential Treatment Requested
-28-
<PAGE> 34
terminate, unless SC makes such payments plus interest within such
sixty (60) day period; or
(ii) SC fails to market each approved Product in each Major
Market Country to the extent required by Section 5.3 hereof and does
not cure such breach within ninety (90) days after GTC delivers written
notice thereof to SC specifying such failure.
11.3. Effect of an Event of Default.
11.3.1. Remedies Available to GTC.
(a) Upon Breach of a Material Term. In the event that an Event
of Default described in Section 11.2.1 or Section 11.2.2(i) occurs relating to
SC and SC fails to cure such default during any applicable cure period, GTC
shall have the right, at its option exercisable in its sole discretion, in
addition to any other rights or remedies available to it at law or in equity,
subject to the limitations of Section 9.5 and Section 13.6 hereof, to either (i)
to terminate this Agreement upon notice thereof to SC, in which case (A) the
licenses granted to SC pursuant to Article 3 shall terminate, (B) any and all
Information and materials provided by GTC pursuant to this Agreement shall be
promptly returned by SC to GTC, (C) SC shall promptly deliver to GTC all
preclinical and clinical data relating to Products owned or controlled by SC and
necessary or useful to the development or commercialization of such Products,
(D) if SC has obtained any regulatory approvals in any country for the Products,
then SC shall, to the extent legally permissible, take all additional action
reasonably necessary to assign all of its right, title and interest in and
transfer possession and control to GTC of such regulatory approvals, (E) if SC
has filed Product Patent Rights in relating to any Product, then SC shall take
all action reasonably necessary to exclusively license all of its right, title
and interest in, and transfer possession and control to GTC of, such Product
Patent Rights, (F) SC will grant GTC licenses on reasonable and customary terms
to be negotiated in good faith by the parties for any technology or know-how
developed by SC or its Third Party manufacturer, if any, relating to the
manufacture of the Products and (G) if SC has marketed the Products in any
country, SC will assign to GTC all of its right, title and interest in any
trademark under which SC shall have marketed the Products in such country
together with the goodwill associated therewith or (ii) (Y) terminate only
Articles 2, 4, 5 and 7, including the Research Collaboration (if not earlier
expired pursuant to Section 11.1 hereof), and Sections 6.1 and 6.3 hereof and
(Z) convert the licenses granted by GTC to SC pursuant to Article 3 hereof into
non-exclusive licenses.
(b) Upon Breach of Marketing Due Diligence Obligations. In the
event that an Event of Default described in Section 11.2.2(ii) occurs relating
SC's obligation to market each approved Product in each Major Market Country to
the extent required by Section 5.3 hereof, then GTC shall have the right, at its
option exercisable in its sole discretion, in addition to any other rights or
remedies available to it at law or in equity, subject to the limitations of
Section 9.5 and Section 13.6 hereof, to terminate the licenses granted to SC
pursuant to Article 3 as to such Product in the Major Market Country with
respect to which the Event of Default occurred, in which case (i) the licenses
granted to SC
-29-
<PAGE> 35
pursuant to Article 3 shall terminate as to such Product (A) in the Major Market
Country with respect to which the Event of Default occurred and (B) in all other
countries in which SC is not at the time of such termination using diligent
efforts to market such Product (collectively, the "Terminated Countries"), (ii)
if SC has filed Product Patent Rights in any Terminated Country with respect to
such Product, then SC shall, to the extent legally permissible, take all action
reasonably necessary to exclusively license all of its right, title and interest
in, and transfer possession and control to GTC of, such Product Patent Rights
(or an undivided interest therein if such Product Patent Rights also cover
Products as to which SC retains its license rights under this Agreement), (iii)
if SC has obtained any regulatory approvals for such Products in any Terminated
Country, then SC shall, to the extent legally permissible, take all additional
action reasonably necessary to assign all of its right, title and interest in,
and transfer possession and control to GTC of, such regulatory approvals and
(iv) SC will assign to GTC all of its right, title and interest in any trademark
under which SC shall have registered for use with such Product in such
Terminated Country together with the goodwill associated therewith. In the event
that SC fails to market the Products in all Major Market Countries pursuant to
Section 5.3, then the provisions of Section 11.3.1(a) shall apply.
11.3.2. Remedies Available to SC. In the event that GTC
materially breaches its obligations pursuant to Section 11.2.1, and GTC fails to
cure such breach within the applicable cure period, then SC shall have the
right, at its option exercisable in its sole discretion, to seek any rights or
remedies available to it at law or in equity, subject to the limitations set
forth in Section 9.5 and Section 13.6 hereof.
11.4. Effect of Expiration or Termination of Research Collaboration.
Upon the expiration or termination of the Research Collaboration all licenses to
SC to continue to use the Licensed Asthma Gene Sequences as they exist on the
termination of the Research Collaboration shall continue in full force and
effect for the remaining term of the Agreement.
11.4.1. Effect of Expiration or Termination of Agreement. The
expiration or termination of this Agreement shall not relieve the parties of any
obligation accruing prior to such expiration or termination.
11.4.2. Survival of Provisions Upon Expiration. The provisions
of Articles 7, 8, 10 and 11 and Sections 3.3, 9.4, 9.5, 13.6 and 13.11 hereof
shall survive the expiration of this Agreement.
11.4.3. Survival of Provisions Upon Termination. The
provisions of Articles 7, 8, 10 and 11 and Sections 3.3, 9.4, 9.5, 13.6 and
13.11 hereof shall survive the termination of this Agreement; provided, however,
that GTC shall have no obligation to maintain the confidentiality of the
Licensed Asthma Gene Sequences in the event that this Agreement is terminated
due to breach by SC. The provisions of Article 6 hereof shall survive the
termination of this Agreement until such time as the Agreement would have
expired with respect to any Product in any country pursuant to Section 11.1.2
hereof had it not been earlier terminated.
-30-
<PAGE> 36
ARTICLE 12. PROVISIONS FOR INSOLVENCY
12.1. General. All rights and licenses granted under or pursuant to
this Agreement by GTC to SC are, for all purposes of Section 365(n) of Title 11
of the U.S. Code ("Title 11"), licenses of rights to intellectual property as
defined in Title 11. GTC agrees during the term of this Agreement to maintain
and preserve any current copies of all such intellectual property which are in
existence and in its possession as of the commencement of a case under Title 11
by or against GTC. If a case is commenced by or against GTC under Title 11,
then, unless and until this Agreement is rejected as provided in Title 11, GTC
(in any capacity, including debtor-in-possession) and its successors and assigns
(including, without limitation, a Title 11 Trustee) shall, as SC may elect in a
written request, immediately upon such request (A) (i) perform all of the
obligations provided in this Agreement to be performed by GTC, or (ii) provide
to SC copies of all such intellectual property (including all embodiments
thereof) held by GTC and such successors and assigns as of the commencement of a
case under Title 11 by or against GTC and from time to time thereafter, and (B)
not interfere with the rights of SC as provided in this Agreement, or any
agreement supplementary hereto, to such intellectual property (including all
such embodiments thereof), including any right of SC to obtain such intellectual
property (or such embodiment) from any other entity.
12.2. Rejection of Agreement in Title 11. If a Title 11 case is
commenced by or against GTC and this Agreement is rejected as provided in Title
11 and SC elects to retain its rights hereunder as provided in Title 11, then
GTC (in any capacity, including debtor-in-possession) and its successors and
assigns (including, without limitation, a Title 11 Trustee shall provide to SC
copies of all such intellectual property (including all embodiments thereof)
held by GTC and such successors and assigns immediately upon SC's written
request therefor. Whenever GTC or any of its successors or assigns provides to
SC any of the intellectual property licensed hereunder (or any embodiment
thereof) pursuant to this Article 12, SC shall have the right to perform the
obligations of GTC hereunder with respect to such intellectual property, but
neither such provision nor such performance by SC shall release GTC from any
such obligation or liability for failing to perform it; provided, however, that
in such event SC shall not be entitled to compel specific performance by GTC
under this Agreement except to the extent of enforcing the exclusivity of the
license granted hereunder.
12.3. Additional Rights. All rights, powers, remedies, obligations and
conditions of SC provided herein are in addition to and not in substitution for
any and all other rights, powers, remedies, obligations and conditions of GTC or
SC now or hereafter existing at law or in equity (including, without limitation,
Title 11) in the event of the commencement of a Title 11 case by or against GTC.
SC, in addition to the rights, power and remedies expressly provided herein,
shall be subject to all obligations and conditions, and shall be entitled to
exercise all other such rights and powers and resort to all other such remedies
as may now or hereafter exist at law or in equity (including, without
limitation, Title 11) in such event. The parties agree that they intend the
foregoing rights and obligations of SC to apply to the maximum extent permitted
by law, including without limitation for purposes of Title 11, (i) the right of
access to any intellectual property (including all embodiments thereof) of GTC,
or any third party with whom GTC contracts to perform an obligation of
-31-
<PAGE> 37
GTC under this Agreement, and in, the case of the third party, which is
necessary for the development, registration and manufacture of a Product, and
(ii) the right to contract directly with any third party described in clause (i)
in this sentence to complete the contracted work.
ARTICLE 13. MISCELLANEOUS
13.1. Force Majeure. Neither party shall be held liable or responsible
to the other party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes beyond
the reasonable control of the affected party, including but not limited to fire,
floods, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party; provided, however, that the party so
affected shall use reasonable commercial efforts to avoid or remove such causes
of nonperformance, and shall continue performance hereunder with reasonable
dispatch whenever such causes are removed. Either party shall provide the other
party with prompt written notice of any delay or failure to perform that occurs
by reason of force majeure. The parties shall mutually seek a resolution of the
delay or the failure to perform as noted above.
13.2. Assignment. This Agreement may not be assigned or otherwise
transferred by either party without the consent of the other party; provided,
however, that either GTC or SC may, without such consent, assign its rights and
obligations under this Agreement (i) to any Affiliate, all or substantially all
of the equity interest of which is owned and controlled by such party or its
direct or indirect parent corporation, or (ii) in connection with a merger,
consolidation or sale of substantially all of such party's assets to an
unrelated Third Party; provided, however, that such party's rights and
obligations under this Agreement shall be assumed by its successor in interest
in any such transaction and shall not be transferred separate from all or
substantially all of its other business assets, including those business assets
that are the subject of this Agreement. Any purported assignment in violation of
the preceding sentence shall be void. Any permitted assignee shall assume all
obligations of its assignor under this Agreement.
13.3. Severability. Each party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the parties would not have entered into this Agreement
without the invalid provisions.
-32-
<PAGE> 38
13.4. Notices. Any consent, notice or report required or permitted to
be given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone, personal delivery or courier) or courier, postage
prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor and shall be effective upon receipt by the
addressee.
If to GTC: Genome Therapeutics Corporation
100 Beaver Street
Waltham, Massachusetts 02154
Attention: Vice President, Business Development
Telephone: 1-617-893-5007
FAX: 1-617-893-8277
with a copy to: Palmer & Dodge
One Beacon Street
Boston, Massachusetts 02108
Attention: Michael Lytton, Esq.
Telephone: 1-617-573-0100
FAX: 1-617-227-4420
If to SC: Schering Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attention: Vice President, Business Development
Telephone: 1-908-298-4030
FAX: 1-908-298-5379
with a copy to: Legal Director Licensing
Schering Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attention: Georgina K. Wertman, Esq.
Telephone: 1-908-298-4768
FAX: 1-908-298-2927
13.5. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
-33-
<PAGE> 39
13.6. Dispute Resolution.
13.6.1. The parties hereby agree that they will attempt in
good faith to resolve any controversy or claim arising out of or relating to
this Agreement promptly by negotiations. If a controversy or claim should arise
hereunder, the members of the Joint Research Committee or the Joint Patent
Committee, as applicable, will confer at least once and will attempt to resolve
the matter. If any such matter arises under Section 4.5 or Section 4.6 hereof
and has not been resolved within thirty (30) days, the matter shall be referred
to the Chief Scientific Officer (or the equivalent position) of GTC and the
President of the Schering-Plough Research Institute (or the equivalent position)
of SC (the "Representatives"). If the matter has not been resolved within thirty
(30) days by the Representatives, or if the matter arises under other provisions
of this Agreement, then the matter shall be referred to the Chief Executive
Officers of GTC and SC or their respective designees. If the matter has not been
resolved within thirty (30) days of the first meeting of the Chief Executive
Officers of the parties (which period may be extended by mutual agreement)
concerning such matter, subject to rights to injunctive relief and specific
performance, and unless otherwise specifically provided for herein, any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof, will be settled as set forth in Section 13.6.2.
13.6.2. All disputes arising in connection with this Agreement
shall be finally settled under the Commercial Arbitration Rules of the American
Arbitration Association by a single arbitrator appointed in accordance with said
Rules and the terms set forth in Exhibit E. Notwithstanding the above, either
party has the right to bring suit in a court of competent jurisdiction against
the other party for (i) any breach of such other party's duties of
confidentiality pursuant to Article 8 of this Agreement and (ii) any
infringement of its own proprietary rights by the other party. The parties agree
not to institute any litigation or proceedings against each other in connection
with this Agreement except as provided in this Section 13.6.1.
13.7. Entire Agreement. This Agreement, together with the exhibits
hereto, contains the entire understanding of the parties with respect to the
subject matter hereof. All express or implied agreements and understandings,
either oral or written, heretofore made are expressly merged in and made a part
of this Agreement. This Agreement may be amended, or any term hereof modified,
only by a written instrument duly executed by both parties hereto.
13.8. Publicity. GTC and SC each agree not to disclose the existence
of, or any terms or conditions of, this Agreement, or any results arising from
the Research Collaboration, to any Third Party without consulting the other
party prior to such disclosure. Notwithstanding the foregoing, prior to
execution of this Agreement, GTC and SC shall agree upon the substance of
information that can be used as a routine reference in the usual course of
business to describe the terms of this transaction, and GTC and SC may disclose
such information, as modified by mutual agreement from time to time, without
consulting the other party.
-34-
<PAGE> 40
13.9. Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are merely guides or labels to
assist in locating and reading the several Articles and Sections hereof.
13.10. Independent Contractors. It is expressly agreed that GTC and SC
shall be independent contractors and that the relationship between the two
parties shall not constitute a partnership, joint venture or agency. Neither GTC
nor SC shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior consent of the other party to do so.
13.11. Agreement Not to Solicit Employees. During the term of this
Agreement and for a period of [*] following the expiration or termination of
this Agreement pursuant to Article 11, GTC and SC agree not to seek to persuade
or induce any employee of the other company to discontinue his or her employment
with that company in order to become employed by or associated with any
business, enterprise or effort that is associated with its own business; [*]
13.12. Exports. The parties acknowledge that the export of technical
data, materials or products is subject to the exporting party receiving any
necessary export licenses and that the parties cannot be responsible for any
delays attributable to export controls which are beyond the reasonable control
of either party. GTC and SC agree not to export or re-export, directly or
indirectly, any information, technical data, the direct product of such data,
samples or equipment received or generated under this Agreement in violation of
any applicable export control laws or governmental regulations. GTC and SC agree
to obtain similar covenants from their licensees, sublicensees with respect to
the subject matter of this Section.
13.13. Waiver. The waiver by either party hereto of any right hereunder
or the failure to perform or of a breach by the other party shall not be deemed
a waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
13.14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
* Confidential Treatment Requested
-35-
<PAGE> 41
IN WITNESS WHEREOF, the parties have caused their duly authorized
officer to execute and deliver this Collaboration License Agreement as of the
date first set forth above.
GENOME THERAPEUTICS CORPORATION
By: /s/ Robert J. Hennessey
------------------------------------
Title: CEO
------------------------------------
SCHERING CORPORATION
By: /s/ ILLEGIBLE
------------------------------------
Title: Vice President
------------------------------------
SCHERING-PLOUGH LTD.
By: /s/ ILLEGIBLE
------------------------------------
Title: Prokurist
------------------------------------
-36-
<PAGE> 42
EXHIBIT A
SPRI/SOUTHAMPTON/GTC COLLABORATION
ON THE GENETICS OF ASTHMA
A. EXECUTIVE SUMMARY
I. GOALS AND OVERALL STRATEGY
The goal of this research collaboration [*]
The proposed study includes a [*]
Top priority will be given to the [*]
To complement the [*]
Considerable effort will be applied [*]
* Confidential Treatment Requested
1
<PAGE> 43
[*]
II. RESEARCH PLAN SUMMARY
A. TIMELINES
[*]
* Confidential Treatment Requested
2
<PAGE> 44
[*]
b. [*] Milestones
[*]
[*]
*Confidential Treatment Requested
3
<PAGE> 45
[*]
*Confidential Treatment Requested
4
<PAGE> 46
B. RESEARCH PLAN
I. SPECIFIC AIMS
Asthma is a significant health problem that affects approximately 5% of the
US population. Both twin and family studies suggest a strong genetic
component in the etiology of the disease with heritability estimates ranging
from 60-80% for atopy and 70% for airway responsiveness. Despite a clear
genetic contribution to the disease, no consistent mode of inheritance has
been observed, suggesting that multiple genetic factors, as well as
environmental influences play a role.
The goal of this research collaboration is to [*]. Given the complex nature
of these disorders and lack of information about biochemical defects
responsible for these disorders, [*].
Specific aims include:
[*]
* Confidential Treatment Requested
5
<PAGE> 47
[*]
II. BACKGROUND INFORMATION
Human genetics represents a balance between opposing tendencies. While
reductionist approaches have been very successful in leading to the mapping and
molecular characterization of hundreds of diseases, most diseases and other
traits of interest show complex inheritance, with major different genes in
different families and with interaction of multiple genes and environmental
factors. Reductionism attempts to effect complex inheritance by a single gene
while extreme holism fits multifactorial models but assumes no major genes.
Genetic epidemiology must avoid both extremes, characterizing major genes
against a multifactorial background and provide a genetic risk that allows for
all sources of variation. The search for genetic determinants of atopy in
asthma follows the history of genetic epidemiology (Lander and Schork, 1994).
While there is overwhelming evidence that environmental factors predispose to
atopy and asthma, there is disagreement about the relative importance of
different mechanisms (Sandford et al., 1996). It is well recognized that the
clinical phenotypic characteristics of asthma and atopy run in families. Early
genetic studies have been directed to heritability, the proportion of the
phenotype variants attributable to genetic factors. This is most easily
estimated for quantitative traits, such as serum IgE and bronchial
responsiveness to inhalation challenges. It has been argued that forcing an
arbitrary dichotomy on quantitative data which is distributed across a
population leads to false assumptions and is erroneous, however, methods are
available to estimate heritability from a dichotomy assuming that multiple
factors act additively. On this basis, a number of research groups worldwide
have applied the candidate locus, candidate region or random human genome
screens in an attempt to identify genes or polygenes that influence the
development or severity of asthma and atopy. Notable claims include that from
the group in Oxford for the (Beta) chain of the high affinity IgE receptor
(Fc?, R1(Beta)) being strongly linked to atopy (Shirakawa et al., 1994),
reports from the USA describing linkage between phenotypic markers of asthma
and atopy to a region on 5q31-33 (Shirakawa et al., 1994: Postma et al., 1995)
which is enriched for genes encoding cytokines known to be involved in the
allergic tissue response and contains polymorphisms of the (Beta (2))
adrenoreceptor linked to disease severity.
Irrespective of the publicity that these claims have attracted they have proven
difficult to repeat in different populations. Reasons suggested for this
include (1) genetic heterogeneity between populations:
* Confidential Treatment Requested
6
<PAGE> 48
Estimates of relative risks for asthma range from 3 to 5 fold (Sibold
and Turner-Warwick, 1979; Sibold et al., 1980; Gerrard et al., 1976). The
observed relative risk for asthma based on the original set of 131 random
families collected by the Southampton group is (Tilde)3. If the increased risks
are due to a major gene, then sample sizes of 300 affected sib-pair families
should be sufficient to initially map the gene to a given location (Risch,
199b). However, sample sizes of 400 affected sib-pair families may be required
to narrow the region sufficiently to facilitate subsequent cloning efforts.
[*]
[*]
* Confidential Treatment Requested
8
<PAGE> 49
[*]
III. RESEARCH STRATEGY
[*]
III. a. [*]
[*]
* Confidential Treatment Requested
7
<PAGE> 50
[*]
[*]
[*]
*Confidential Treatment Requested
9
<PAGE> 51
[*]
[*]
[*]
III.b. [*]
[*]
[*]
[*]
*Confidential Treatment Requested
10
<PAGE> 52
[*]
[*]
[*]
[*]
[*]
*Confidential Treatment Requested
11
<PAGE> 53
[*]
[*]
[*]
III.c.[*]
[*]
[*]
*Confidential Treatment Requested
12
<PAGE> 54
[*]
[*]
[*]
* Confidential Treatment Requested
13
<PAGE> 55
[*]
[*]
[*]
* Confidential Treatment Requested
14
<PAGE> 56
[*]
III.d. [*]
[*]
[*]
[*]
[*]
[*]
* Confidential Treatment Requested
15
<PAGE> 57
[*]
* Confidential Treatment Requested
16
<PAGE> 58
[*]
[*]
*Confidential Treatment Requested
17
<PAGE> 59
III.e. [*]
[*]
III.f. [*]
[*]
*Confidential Treatment Requested
18
<PAGE> 60
[*]
IV. Project Management and Timetable
IV.a.[*]
[*]
[*]
[*]
[*]
*Confidential Treatment Requested
19
<PAGE> 61
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
*Confidential Treatment Requested
20
<PAGE> 62
[*]
[*]
[*]
[*]
IV.b.[*]
Project Tasks and Timing
[*]
*Confidential Treatment Requested
21
<PAGE> 63
[*]
*Confidential Treatment Requested
22
<PAGE> 64
[*]
*Confidential Treatment Requested
23
<PAGE> 65
[*]
Project Management
[*]
*Confidential Treatment Requested
24
<PAGE> 66
Summary of GTC tasks and timing
FTE's
TASK [*]
C. REFERENCES
[*]
* Confidential Treatment Requested
25
<PAGE> 67
[*]
* Confidential Treatment Requested
26
<PAGE> 68
[*]
* Confidential Treatment Requested
27
<PAGE> 69
[*]
* Confidential Treatment Requested
28
<PAGE> 70
EXHIBIT B
[*] RESEARCH MILESTONES
[*] MILESTONES -- COMPLETION OF ALL OF THE FOLLOWING:
- - [*]
- - [*]
- - [*]
[*] MILESTONE -- COMPLETION OF ALL OF THE FOLLOWING:
- - [*]
- - [*]
[*] -- COMPLETION OF ALL OF THE FOLLOWING:
- - [*]
- - [*]
*Confidential Treatment Requested
<PAGE> 71
EXHIBIT C
MATERIAL TRANSFER AGREEMENT
This MATERIAL TRANSFER AGREEMENT, including the attached Schedules,
(collectively the "Agreement") is entered into as of the last date on the
signature page hereof (the "Effective Date") by and between the Schering-Plough
Research Institute, a Delaware corporation with its office and place of business
at 2015 Galloping Hill Road, Kenilworth, New Jersey 07033, (the "SUPPLIER"), and
the organization identified on the signature page (the "RECIPIENT").
1. BACKGROUND. SUPPLIER has developed and produced certain Material (as
defined below). RECIPIENT is conducting certain non-commercial Research
(as defined below). RECIPIENT desires to obtain samples of the Material
for use in conjunction with said Research. SUPPLIER is willing to
provide the Material to RECIPIENT on the terms and conditions set forth
in this Agreement.
2. DEFINITIONS.
2.1. "CONFIDENTIAL INFORMATION" includes, without limitation any
scientific, technical, trade or business information given to
one party (the "Receiving Party") by the other party (the
"Disclosing Party") which is treated by the Disclosing Party
as confidential or proprietary, whether or not such
information is labeled or identified as "confidential".
Confidential Information does not include information:
(a) in or entering the public domain (through no fault of
Receiving Party), or
(b) which is lawfully made available to Receiving Party
by an independent third part owing no obligation of
confidentiality to Disclosing Party with regard
thereto (and such lawful right can be properly
demonstrated by Receiving Party), or
(c) already in Receiving Party's possession at the time
of receipt from Disclosing Party (and such prior
possession can be properly demonstrated by Receiving
Party), or
(d) which is independently developed by employees of
Receiving Party and or affiliates of its parent
corporation (and such independent development can be
properly demonstrated by Receiving Party), or
(e) which is required by law, regulation, statute, rule,
act or order of any governmental authority or agency
to be disclosed by Receiving Party.
To permit Disclosing Party an opportunity to intervene, in
order to obtain a protective order or other similar order to
limit or prevent disclosures of Confidential Information,
Receiving Party shall immediately notify Disclosing Party, in
writing, if it is requested by a court order, a governmental
agency, or any other entity to disclose Confidential
Information in Receiving Party's possession and thereafter
Receiving Party shall disclose only the minimum Confidential
Information required to be disclosed in order to comply,
whether or not a protective order or other similar order is
obtained by Disclosing Party.
2.2. "DEVELOPMENTS" include, without limitation, ideas, concepts,
discoveries, inventions, developments, know-how, trade
secrets, techniques, methodologies, modifications,
innovations, improvements, writings, documentation, data and
rights (whether or not protectable under state, federal, or
foreign patent, trademark, copyright or similar laws) that
incorporate the Material, or that could not have been
developed without the use of the Material, or that require the
use of the Material, that are discovered, developed, created,
conceived or reduced to practice by the RECIPIENT, alone or
jointly with others, during the term of this Agreement.
Developments include, without limitation, New Substances and
New Uses.
2.3. "MATERIAL" means the material to be transferred from SUPPLIER
to RECIPIENT, as described in Schedule A attached to this
Agreement, together with any refills of the Material and any
progeny and unmodified derivatives of the Material (including,
without limitation, expression products, subclones, sub-units
or fractionations.)
2.4. "NEW SUBSTANCE" means any material first produced or isolated
with or by use of the Material.
2.5. "NEW USE" means any new use of the Material, including,
without limitation, new therapeutic uses or methods of
treatment.
2.6. "RESEARCH" means RECIPIENTs noncommercial research, as
described in Schedule B attached to this Agreement.
<PAGE> 72
2.7. "PROGENY" means an unmodified descendent generated from the
Material. such as virus from virus, cell from cell, or
organism from organism.
2.8. "UNMODIFIED DERIVATIVE" means substances created by the
RECIPIENT which constitute an unmodified functional subunit or
product expressed by or generated from the original Material,
including, but not limited to, subclones of unmodified cell
lines, purified or fractionated subsets of the original
Material, proteins expressed by DNA/RNA supplied by SUPPLIER,
or monoclonal antibodies secreted by a hybridoma cell line.
2.9. "MODIFICATIONS" means substances created by the RECIPIENT
which contain or incorporate the Material or are derived by
chemical modification of the Material.
2.9. "COMMERCIAL PURPOSE" means the sale, lease, license, or other
transfer of the Material or Modifications to a for-profit
organization. Commercial Purposes shall also include uses of
the Material or Modifications by any organization, including
RECIPIENT, to perform contract research, to screen compound
libraries, to produce or manufacture products for general
sale, or to conduct research activities that result in any
sale, lease, license, or transfer of the Material or
Modifications to a for-profit organization. However,
industrially sponsored academic research shall not be
considered a use of the Material or Modifications for
Commercial Purposes per se, unless any of the above conditions
of this definition are met.
3. USE OF MATERIAL. RECIPIENT certifies and attests that it will use the
Material only in connection with its Research as described in Schedule
B. and that the Material will not be used for any other purpose or for
any Commercial Purpose. RECIPIENT further attests that no quantity of
the Materials will be distributed to any third party without the prior
written permission of SUPPLIER.
5. ACKNOWLEDGMENT.
5.1. RECIPIENT acknowledges that the Material is experimental in
nature and may have hazardous properties. RECIPIENT agrees to
comply with all laws and regulations applicable to its
handling.
5.2. RECIPIENT acknowledges and agrees that the Material is or may
be the subject of a patent or patent application. Except as
expressly provided in this Agreement, no licenses or other
fights, either expressed or implied, are provided to the
RECIPIENT under any patents, patent applications, trade
secrets or other proprietary fights of the SUPPLIER. In
particular, no express or implied licenses or other fights are
provided to use the Material, Modifications, Developments, or
any related patents or patent applications of SUPPLIER for any
Commercial Purposes.
6. NO WARRANTY. THE MATERIAL IS PROVIDED BY SUPPLIER TO RECIPIENT WITHOUT
ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND SUPPLIER MAKES
NO REPRESENTATION THAT RECIPIENTS USE OF THE MATERIAL WILL NOT INFRINGE
ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY. THE MATERIAL
IS PROVIDED TO RECIPIENT WITH THE UNDERSTANDING THAT SUPPLIER AND ITS
AGENTS, EMPLOYEES AND AFFILIATES, HAVE NO LIABILITY WHATSOEVER IN
CONNECTION WITH SUCH MATERIAL OR ITS USE.
7. INDEMNIFICATION. Except to the extent prohibited by law, RECIPIENT
assumes all liability for damages which may arise from its use, storage
or disposal of the Material. To the extent allowable under applicable
law, RECIPIENT agrees to indemnify and hold SUPPLER harmless from any
claims and liabilities which might arise from RECIPIENT's use of the
Material, except for those arising from the gross negligence or willful
misconduct of SUPPLIER.
8. OWNERSHIP AND GRANT OF RIGHTS.
8.1. MATERIAL. SUPPLIER has developed the Material over a
substantial period of time at considerable expense, and the
Material is of great importance to SUPPLIER's business.
RECIPIENT acknowledges that SUPPLIER is and will at all times
remain the owner of the Material.
8.2. OWNERSHIP OF DEVELOPMENTS. RECIPIENT acknowledges and agrees
that all rights, title and interest in and to any and all
Developments resulting from RECIPIENT's use of the Materials
<PAGE> 73
provided hereunder will belong solely to SUPPLIER, and
RECIPIENT will take all steps reasonably necessary to enable
SUPPLIER to perfect its fights to all such Developments.
8.3. DISCLOSURE OF DEVELOPMENTS. RECIPIENT will promptly and fully
disclose in writing to SUPPLIER any and all Developments.
RECIPIENT will keep complete and accurate written records of
its Research. At SUPPLIER's request, RECIPIENT will meet with
SUPPLIER to discuss the Research. In addition, RECIPIENT will
provide SUPPLIER with periodic written summaries of its
Research.
8.4. PATENT APPLICATIONS. Any patent applications considered
necessary in the reasonable legal and business judgment of
SUPPLIER to protect SUPPLIER's proprietary position in any
Developments will be prepared and filed by SUPPLIER (jointly
in SUPPLIER's and RECIPIENT's names, if jointly invented;
solely in SUPPLIER's or RECIPIENT's name, if solely invented)
with the expenses of these patent applications being born by
SUPPLIER. At SUPPLIER's request and expense, RECIPIENT will
cause its interest in any Developments, including, without
limitation, any patents or patent applications relating to
such Developments, to be assigned to SUPPLIER, and will
provide SUPPLIER with reasonable assistance in preparing and
maintaining such applications, including causing the execution
of any assignments or other documents.
9. CONFIDENTIALITY.
9.1. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Except as provided
in Section 10 below, neither party will directly or indirectly
publish, disseminate or otherwise disclose, deliver or make
available to any third party any of the other party's
Confidential Information other than in furtherance of this
Agreement. RECIPIENT acknowledges that the Federal Food and
Drug Administration (FDA) requires SUPPLIER to be
knowledgeable concerning all available data on its compounds
and drugs and that such data must be maintained and made
available to FDA. RECIPIENT therefore acknowledges and agrees
that data transmitted to SUPPLIER cannot be considered as
confidential.
9.2. PROTECTION. RECIPIENT will exercise all commercially
reasonable precautions to protect the integrity and
confidentiality of the Material. RECIPIENT will not remove the
Material from RECIPIENT's premises except to the extent
necessary to fulfill its obligations under this Agreement, and
then only with the prior written consent of SUPPLIER.
10. PUBLICATION.
10.1. RIGHT TO PUBLISH; REVIEW BY SUPPLIER. Notwithstanding
RECIPIENT's confidentiality obligations under Section 9 above,
RECIPIENT will have the right to publish and disclose the
final results of the Research. In order to balance this right
with SUPPLIER's proprietary interests, RECIPIENT will submit
for SUPPLIER's review all manuscripts, abstracts or
presentations intended for publication or other public
disclosure ("Publications") at least sixty (60) days prior to
the date of submission for publication or public disclosure.
SUPPLIER will use reasonable efforts to complete its review
promptly and will complete its review within sixty (60) days
of receipt of the Publications. No Publication shall contain
any Confidential Information of SUPPLER. At SUPPLIER's request
RECIPIENT agrees to delete from its Publications any
references deemed by SUPPLIER to be Confidential Information.
At the end of this sixty (60) day period, RECIPIENT will have
the right to publish the Publications, as amended by SUPPLIER
and subject to SUPPLIER's rights under Section 10.2 below.
10.2. OPPORTUNITY TO FILE PATENT APPLICATIONS. If during its sixty
(60) day Publication review period SUPPLIER notifies RECIPIENT
that it desires patent applications to be filed on any
Developments disclosed or contained in the Publications,
RECIPIENT will defer publication or other disclosure for a
period sufficient to permit SUPPLIER to file any such patent
applications, such period not to exceed ninety (90) days from
the date of submission of the Publication to SUPPLIER.
11. TERMINATION.
11.1. This Agreement will terminate upon completion of the
RECIPIENT's current Research as defined in Section 2.6.
<PAGE> 74
11.2. TERMINATION FOR CAUSE. Either party may terminate this
Agreement for cause at any time upon thirty (30) days prior
written notice to the other party. "Cause" means a material
breach of this Agreement by the other party where such breach,
if curable, is not remedied to the nonbreaching party's
satisfaction within such thirty (30) day period.
11.3. TERMINATION BY EITHER PARTY WITHOUT CAUSE. Either party may
terminate this Agreement at any time without cause upon not
less than sixty (60) days prior written notice to the other
party.
11.4. EFFECT OF TERMINATION OR EXPIRATION. Upon termination or
expiration of this Agreement for any reason RECIPIENT shall
immediately return to SUPPLIER all its Confidential
Information and copies thereof, and shall return or, at
SUPPLIER's direction, to destroy any and all unused Material.
and if instructed to destroy such Material will provide
evidence documenting the manner of destruction to SUPPLIER.
All of RECIPIENT's rights to use the Material shall cease.
Following termination or expiration, neither party shall have
any further obligations under this Agreement, except that
Sections 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 shall
survive and remain in force.
12. NOTICE. All communications and notices from one party to the other will
be in writing and will be given by addressing the same to the other
party at the address or facsimile number set forth in this Agreement,
or at such other address or facsimile number as either party may
specify in writing to the other. All notices will become effective when
deposited in the United States Mail with proper postage for first class
registered or certified mail prepaid, return receipt requested, or when
delivered personally, or, if promptly confirmed by mail as above, when
dispatched by facsimile.
13. ASSIGNMENT. This Agreement, and the fights and obligations hereunder,
may not be assigned or transferred by either party without the prior
written consent of the other party, except that SUPPLIER may assign
this Agreement to an affiliated company or in connection with the
merger, consolidation or sale of all or substantially all of its
assets.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties with regard to its subject matter, and supersedes all
previous written or oral representations, agreements and understandings
between SUPPLIER and RECIPIENT.
15. NO MODIFICATION. This Agreement may be changed only by a writing signed
by both parties.
16. SEVERABILITY. In the event that any one or more of the provisions in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, and all other provisions shall remain in full force and
effect. If any of the provisions of this Agreement is held to be
excessively broad, it shall be reformed and construed by limiting and
reducing it so as to be enforceable to the maximum extent permitted by
law.
17. APPLICABLE LAW. This Agreement will in all events and for all purposes
be governed by, and construed in accordance with the law of the State
of New Jersey without regard to any choice of law principles that would
dictate the application of the law of another Jurisdiction.
18. Miscellaneous Provisions.
18.1. RECIPIENT acknowledges and agrees that receipt of the
Materials from SUPPLIER does not create or imply a particular
relationship between SUPPLIER and RECIPIENT, and further
agrees that RECIPIENT is acting independently of SUPPLIER and
not as an affiliate, employee, agent, or joint venturer of or
with SUPPLIER. RECIPIENT shall have no authority to represent,
bind or act on behalf of SUPPLIER.
18.2. In accordance with the requirements of the Federal Food, Drug
and Cosmetic Act and with DEA regulations, where applicable,
RECIPIENT certifies that it is regularly engaged in conducting
laboratory studies or animal tests and that all shipments of
Materials received pursuant hereto will be actually used by
RECIPIENT or under RECIPIENT's direction for tests in vitro
and in animals used only for laboratory research and will not
be used in tests involving administration of the Materials in
humans. RECIPIENT understands that the Materials are not to be
used for in vitro use in the regular course of treating or
diagnosing disease in humans. RECIPIENT also
<PAGE> 75
certifies that no animals used in such tests, or their
products, shall be used for food purposes without the prior
approval of the Food and Drug Administration. RECIPIENT
further certifies and attests that RECIPIENT's handling and
use of the Materials will be done in accordance with all
provisions and requirements of the Federal Food, Drug and
Cosmetic Act and with DEA regulations, where applicable.
18.3. RECIPIENT certifies that it will not use the services of any
individual who has been debarred under the Federal Food, Drug
and Cosmetic Act in the course of the Research with the
Materials.
18.4. RECIPIENT certifies and attests that the individual executing
this Agreement is a duly authorized representative of
RECIPIENT with full power and authority to sign, bind and
otherwise commit RECIPIENT to the terms and obligations of
this Agreement. Recipient further certifies and attests that
it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, by duly authorized representatives, as of the last date written below.
SUPPLIER: RECIPIENT:
By:______________________________ By:______________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
Date:____________________________ Date:____________________________
Address:_________________________
_________________________________
_________________________________
Agreed and Acknowledged:
By:______________________________
Name:____________________________
Principal Investigator
Date:____________________________
<PAGE> 76
SCHEDULE A
FORM 1290A DATE ORDER NO.
Page of
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TO BE COMPLETED BY RECIPIENT
--------------------------------------------------
COMP. Quantity STATE STUDY OBJECTIVES HERE AND ATTACH PROTOCOL(S)
NO. Material Requested Requested OR BRIEF STUDY DESCRIPTION(S)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1
- -----------------------------------------------------------------------------------------------------------
2
- -----------------------------------------------------------------------------------------------------------
3
- -----------------------------------------------------------------------------------------------------------
4
- -----------------------------------------------------------------------------------------------------------
5
- -----------------------------------------------------------------------------------------------------------
</TABLE>
SHIP MATERIAL TO: SPECIAL INSTRUCTIONS:
- -----------------------------------------
TELEX OR CABLE ADDRESS
THIS FORM MUST BE COMPLETED AND SIGNED
BY RECIPIENT'S DULY AUTHORIZED REPRESENTATIVE
DULY AUTHORIZED SIGNATURE ON BEHALF OF RECIPIENT:
- --------------------------------------------------------------------------------
DATE
- --------------------------------------------------------------------------------
FOR COMPANY USE
EXPORT ORDER NO.
- --------------------------------------------------------------------------------
INITIAL CONTACT
- --------------------------------------------------------------------------------
EXP. CTR. NO.
- --------------------------------------------------------------------------------
DATE
- --------------------------------------------------------------------------------
APPROPRIATE DIRECTOR OR ABOVE
- --------------------------------------------------------------------------------
DATE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMP. QUANTITY RIC NUMBER BATCH/LOT NUMBER POTENCY
NO. FILLED MCG/MG
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1
- -----------------------------------------------------------------------------------------
2
- -----------------------------------------------------------------------------------------
3
- -----------------------------------------------------------------------------------------
4
- -----------------------------------------------------------------------------------------
</TABLE>
SCHERING-PLOUGH RESEARCH INSTITUTE
2015 GALLOPING HILL ROAD
KENILWORTH, NEW JERSEY 07033-0539
AT YOUR REQUEST
----------------------------------
SHIP TO:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
RETURN REQUESTED
- --------------------------------------------------------------------------------
INVENTORY SOURCE
- --------------------------------------------------------------------------------
FILLED BY: DATE
- --------------------------------------------------------------------------------
SHIPPED BY: DATE
- --------------------------------------------------------------------------------
DISTRIBUTION
ORIGINAL INVES -> ORIG -> INVEN SOURCE -> SHIPPING -> TECH DOC
COPY 1 INVES -> ORIG -> INVEN SOURCE -> SHIPPING -> INVES
COPY 2 INVES -> ORIG -> INVEN SOURCE -> SHIPPING
COPY 3 INVES -> ORIG -> INVEN SOURCE (WHEN SOURCE IS NOT TECH DOC)
COPY 4 INVES -> ORIG -> TECH DOC -> ORIG (WHEN TECH DOC IS INVEN SOURCE)
<PAGE> 77
Form 1290A Date:
SCHEDULE B
DETAILED DESCRIPTION OF RECIPIENT'S NONCOMMERCIAL RESEARCH
STATEMENT OF INVESTIGATOR:
1. Name of Investigator(s):____________________________________________________
2. DEA Number (if applicable):_________________________________________________
3. Name and Address of Institution where Study will be conducted:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
4. Investigator's Affiliation with above Institution:
____________________________________________________________________________
5. Professional Training of Investigator(s):
Institution Degree Year
___________________________________ ______________________________________
___________________________________ ______________________________________
___________________________________ ______________________________________
6. Study Type
/ / Animal / / In Vitro / / Analytical / / Other _________________
specify
7. Animal Species to be used:__________________________________________________
DETAILED DESCRIPTION OF RESEARCH:______________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
<PAGE> 78
EXHIBIT D-1
CLINICAL RESEARCH AGREEMENT
This Agreement is entered into as of the last date on the
signature page hereof, by and between International Medical Technical
Consultants, Inc., hereinafter called "IMTCI", and Genome Therapeutics
Corporate, a Massachusetts Corporation with its office and place of business at
100 Beaver Street, Waltham, MA 02154, hereinafter called "GTC".
GTC desires and IMTCI is willing to perform certain clinical
research (the "Study"). The Parties hereto agree as follows:
1. SCOPE OF WORK
The Study to be performed under this Agreement
shall be performed in accordance with the terms of the final
protocol, including as it may be amended in accordance with the
terms of this Agreement, for the Study entitled, "Genetics of
Asthma" (the "Protocol") which is attached as Exhibit A and
incorporated into this Agreement by reference. IMTCI certifies
that, to its best knowledge, its facilities and population are
adequate to perform the Study contemplated by this Agreement and
the Protocol. IMTCI and Principal Investigator (named in Article
2 below) agree that all aspects of the Study will be conducted in
conformity with all applicable, federal, state and local laws and
regulations.
2. PRINCIPAL INVESTIGATOR
IMTCI's Principal Investigator is Robert Dockhorn,
M.D., (who with any subinvestigators shall be collectively
referred to as "Principal Investigator"). The Principal
Investigator will be responsible for the direction and
supervision of all Study efforts in accordance with applicable
IMTCI policies, the Protocol and this Agreement. In the event
that the Principal Investigator who signs either the Protocol
and/or this Agreement leaves or is removed from the IMTCI, then
IMTCI shall, within ten (10) days of such departure by the
Principal Investigator, provide written notice of such event to
GTC. Any successor to the Principal Investigator must be
approved, in writing, by GTC and such successor shall be required
to agree to all the terms and conditions of the Protocol and this
Agreement and to sign each such document as evidence of such
agreement (although failure to so sign will not relieve such
successor from abiding with all the terms and conditions of the
Protocol and this Agreement).
3. PROJECT MONITOR AND INSPECTION RIGHTS
<PAGE> 79
It is agreed that the project monitor(s) and others
designated by GTC may, at mutually agreeable times during the
Study and for a reasonable time after completion or early
termination of the Study, arrange with Principal Investigator or
his/her designee:
(i) to examine and inspect, at regular business hours,
IMTCI facilities required for performance of the
Study; and
(ii) subject to applicable patient confidentiality
considerations, to inspect, audit, and to copy or
have copied, all data and work product relating to
the Study conducted under this Agreement and to
inspect and make copies of all data necessary for
GTC to confirm that the Study is being conducted in
conformance with the Protocol and in compliance
with all applicable legal and regulatory
requirements, including without limitation, any
applicable requirements of the United States Food
and Drug Administration ("FDA").
4. CLINICAL TRIAL APPROVALS
A. IMTCI shall be responsible for obtaining the
following:
(i) approval of the Protocol, any
informed consent relating to the
Study and advertisement, if any,
pertaining to the enrollment of
subjects in the Study by the
appropriate Institutional Review
Board ("IRB") prior to beginning any
Study on human subjects; and
(ii) an informed consent which complies
with all applicable federal, state,
and local laws and regulations
signed by or on behalf of each human
subject prior to the subject's
participating in the Study.
B. IMTCI shall be responsible for obtaining approval
of the Protocol and informed consent from GTC prior
to obtaining IRB approval. In the event IMTCI's IRB
requires changes in the Protocol or informed
consent, GTC shall be advised in advance and all
modifications to the Protocol and informed consent
must be approved in advance by GTC. IMTCI and
Principal Investigator shall not modify the Study
described in the Protocol once finalized and after
approval by the IRB without the prior written
approval of GTC.
2
<PAGE> 80
5. TERM OF AGREEMENT
It is anticipated that the Study shall begin on December 20,
1996, and shall continue until the Study is completed and all
final Study documentation required to be provided under the
Protocol is received and accepted by GTC. If, at any time, IMTCI
or Principal Investigator have reason to believe that the Study
will not be initiated or completed as per the schedule (included
in Exhibit A of this Agreement) initially anticipated and agreed
upon by the parties, GTC will be advised, in writing, of the
reason(s) and length of additional time required to commence or
complete work, and this Agreement may be terminated by GTC as
provided in Article 6.
6. TERMINATION AND ENROLLMENT CAP
A. GTC may terminate this Agreement by giving thirty
(30) days written notice to IMTCI. Notwithstanding
the foregoing, in the event GTC believes that
immediate termination is necessary due to its
evaluation of risks to enrolled research
subject(s), GTC may terminate this Agreement
immediately.
B. Notwithstanding any other provision hereof, GTC
shall be entitled to terminate this Agreement for
any Material Breach which shall be defined as:
(i) IMTCI's failure to comply with its
obligations, responsibilities and
the terms and conditions of this
Agreement and the Protocol;
(ii) IMTCI's failure to comply with: (a)
its obligations for keeping GTC
informed of all necessary and
relevant information in connection
with the Protocol; (b) any
applicable law, rule or regulation
relevant to the Study; and (c) the
work to be performed under this
Agreement.
C. In the event of any termination:
(i) IMTCI shall return to GTC all unused
materials provided by Sponsor;
(ii) except in the event of termination
because of a Material Breach by
IMTCI, and unless otherwise
specified in writing between the
Parties, the total sums payable by
GTC pursuant to this Agreement shall
be equitably pro-rated for actual
work performed in accordance with
the Protocol to
3
<PAGE> 81
date of notice termination with any
unexpended portion of funds
previously paid by GTC to IMTCI
being refunded to GTC;
(iii) in the event of termination as a
result of a Material Breach, the
parties agree to make a good faith
effort to reach agreement to
compensate IMTCI for actual work
performed in accordance with the
Protocol to date of notice of
termination; and
(iv) Principal Investigator shall return
to GTC all Confidential Information
(as defined in Article 9 hereof)
owned or controlled by GTC and in
the possession of IMTCI.
D. The termination of this Agreement shall not relieve
either party of its obligation to the other in
respect of:
(i) retaining in confidence all
Confidential Information (as defined
in Article 9 hereof);
(ii) complying with record keeping and
reporting obligations (under Article
7 hereof);
(iii) obtaining written approval and
consents for any publications (under
Article 10 hereof) and publicity and
promotional purposes (under Article
17 hereof);
(iv) compensation for services performed
to date of notice of termination,
except as set forth in Article 6.C
(iii) hereof;
(v) indemnification and insurance
obligations (under Article 12
hereof);
(vi) inspection rights (under Article 3
hereof); and
(vii) obligation to assist in obtaining
patent protection (under Article 13
hereof)
all of which obligations are binding on the
appropriate party and shall remain in full force
and effect as set forth in this Agreement.
4
<PAGE> 82
E. GTC reserves the right to limit enrollment by
giving written notice, or by giving notice by
telephone followed by written notice, to IMTCI and
Principal Investigator to cease further enrollment
in the Study ("Enrollment Cap"). Upon receipt of
such notice, IMTCI and Principal Investigator agree
to enroll no further patients in the Study. Unless
otherwise specified in writing between the Parties,
in the event of such a notice to cease further
enrollment, the total sums payable by GTC pursuant
to this Agreement shall be equitably pro-rated for
the number of patients enrolled to the date of such
notice, with any funds for patients beyond the
Enrollment Cap previously paid by GTC to IMTCI
being refunded to GTC.
7. RECORDS AND REPORTS
A. Principal Investigator and IMTCI shall have the
following record keeping and reporting obligations:
(i) preparation and maintenance of
complete, accurately written
records, accounts, notes, reports
and data relating to the Study under
this Agreement; and
(ii) preparation and submission to GTC
(in a periodic and timely manner
during the term of this Agreement)
of all raw data and other material
called for in the Protocol in the
form of properly completed patient
case report forms ("Case Report
Forms") or into an electronic
database (i.e., remote data entry)
supplied by GTC for each patient as
provided in the Protocol. Case
Report Forms and the electronic
database shall be the exclusive
property of GTC.
B. Principal Investigator and IMTCI agree to notify
GTC within twenty-four (24) hours after learning of
any serious and/or unexpected adverse drug reaction
affecting any patient in the Study. Principal
Investigator and IMTCI further agree to follow-up
such notification of adverse drug reaction with
appropriate reports in compliance with the Protocol
and all applicable legal and regulatory
requirements.
C. Principal Investigator and IMTCI further agree to
conduct the Study and maintain records and data
during and after the term or early termination of
this Agreement in compliance with all applicable
legal and regulatory
5
<PAGE> 83
requirements, including without limitation, any
applicable requirements of the FDA. Principal
Investigator and IMTCI further agree to permit GTC
or GTC's representatives to examine and audit all
records and reports, with prior written
notification from GTC and during normal business
hours (subject to applicable patient
confidentiality considerations).
D. Principal Investigator agrees to notify GTC within
twenty-four (24) hours in the event that the FDA or
any other regulatory authority notifies the Study
site of a pending inspection/audit. In addition,
Principal Investigator will forward to GTC any
written communication received as a result of the
inspection/audit within twenty-four (24) hours of
receipt of such communication and agrees to allow
GTC to assist in responding to any citations. Such
responses shall be made within two (2) weeks of
issuance of any citation or within any earlier
deadline set by the issuing regulatory authority.
Principal Investigator shall also provide GTC
copies of any documents provided to any
inspector/auditor.
8. COST AND PAYMENT
The budget for the Study will be contained on a separate form
which will be signed by IMTCI and which shall be deemed to be
incorporated by reference into this Agreement. The payment(s) set
forth in such budget are acknowledged by the Parties hereto to be
adequate consideration for the work undertaken hereunder.
9. CONFIDENTIAL INFORMATION
A. During and for a period of ten (10) years after the
term or early termination of this Agreement, IMTCI
and Principal Investigator shall retain in
confidence all test articles and proprietary data
and/or information obtained from GTC or generated
pursuant to the Study including, but not limited
to, the Protocol, the investigator's brochure,
interim results and any other information or
material disclosed under secrecy agreements
previously entered into between the Parties
("Confidential Information"). This restriction
shall not apply to Confidential Information:
(i) which is or becomes public knowledge
(through no fault of IMTCI or
Principal Investigator);
6
<PAGE> 84
(ii) which is lawfully made available to
IMTCI or Principal Investigator by
an independent third party owing no
obligation of confidentiality to GTC
with regard thereto (and such lawful
right can be properly demonstrated
by IMTCI or Principal Investigator);
(iii) which is already in IMTCI's or
Principal Investigator's possession
at the time of receipt from GTC (and
such prior possession can be
properly demonstrated by IMTCI or
Principal Investigator);
(iv) published in accordance with the
express terms of this Agreement; or
(v) which is required by law,
regulation, rule, act or order of
any governmental authority or agency
to be disclosed by IMTCI.
B. To permit GTC an opportunity to intervene by
seeking a protective order or other similar order,
in order to limit or prevent disclosures of
Confidential Information, IMTCI or Principal
Investigator shall immediately notify GTC, in
writing, if it is requested by a court order, a
governmental agency, or any other entity to
disclose Confidential Information in IMTCI's or
Principal Investigator's possession and thereafter
IMTCI or Principal Investigator shall disclose only
the minimum Confidential Information required to be
disclosed in order to comply, whether or not a
protective order or other similar order is obtained
by GTC.
C. Subject to applicable federal, state or local legal
and regulatory requirements, IMTCI and Principal
Investigator agree to promptly return to GTC, upon
its request, all Confidential Information obtained
from GTC or belonging to GTC pursuant to this
Agreement; provided, however, that IMTCI's legal
counsel may retain one copy of Confidential
Information in a secure location for purposes of
identifying IMTCI's obligations under these
confidentiality provisions.
D. IMTCI and Principal Investigator shall limit
disclosure of Confidential Information received
hereunder to only those of its representatives,
agents, officers and employees (collectively,
"Agents") who are directly involved with the Study
and only on a need-to-know basis. IMTCI and
Principal Investigator shall advise its Agents upon
disclosure to them of any Confidential Information
of the proprietary nature thereof and the terms and
conditions of this Agreement and shall use all
reasonable safeguards to prevent unauthorized
7
<PAGE> 85
disclosure by such Agents. IMTCI and Principal
Investigator shall be responsible for any breach of
these confidentiality provisions by its Agents.
E. IMTCI and Principal Investigator acknowledge and
expressly agree that any disclosure of Confidential
Information in violation of this Agreement would be
detrimental to GTC's business and cause it
irreparable harm and damage. In accordance with
applicable law and in addition to any other rights
and remedies provided herein, GTC shall be entitled
to secure equitable relief by way of injunction or
otherwise.
10. DATA AND OTHER RIGHTS
A. Principal Investigator and IMTCI agree that all
research data and results generated during the
course of the Study shall be the property of GTC.
Principal Investigator and IMTCI further agree to
execute any documents or undertake any further
actions if requested by GTC to evidence transfer of
title to such data.
B. Principal Investigator and IMTCI agree that IMTCI
shall have no right to use the patient materials
collected for the Study for its own purposes nor
the right to transfer those materials to any third
party for any reason without written permission
from GTC.
11. INDEMNIFICATION AND INSURANCE
A. GTC shall indemnify, defend and hold harmless
IMTCI, its trustees, officers, agents, employees
and Principal Investigator, (and any named
co-investigator) from and against any demands,
claims, actions, proceedings or costs of judgments
which may be made or instituted against any of them
by reason of personal injury (including death) to
any person, or damage to property, arising out of
or connected with (i) the design of the Protocol,
or (ii) any negligent act or omission or willful
misconduct by GTC, its officers, directors, agents
or employees.
B. Notwithstanding the foregoing, GTC shall have no
indemnification obligation or liability and IMTCI
shall indemnify, defend and hold harmless GTC, its
parent corporation, subsidiaries, affiliates,
officers, directors, agents, and employees for loss
or damage resulting from:
8
<PAGE> 86
(i) failure of IMTCI or Principal
Investigator to adhere to the terms
and provisions of the Protocol or
agreed amendments thereto or GTC's
written recommendations and
instructions;
(ii) failure of IMTCI or Principal
Investigator to comply with any
applicable FDA or other governmental
or state requirements, law, rules or
regulations applicable to the
performance of its obligations under
this Agreement;
(iii) failure of IMTCI or Principal
Investigator to render professional
service or to conduct the Study in a
normal, prudent manner; or
(iv) negligent act or omission or willful
misconduct by Principal
Investigator, IMTCI, its trustees,
officers, agents or employees
related to the performance of
services under this Agreement.
C. A condition of GTC's indemnity obligation is that,
whenever Principal Investigator and or IMTCI has
information from which it may reasonably conclude
an incident of bodily injury or death has occurred,
IMTCI shall immediately give notice to GTC of all
pertinent data surrounding such incident. In
addition, Principal Investigator and IMTCI shall
comply with all of the obligations with regard to
adverse event reporting procedures as set forth in
this Agreement and the Protocol and any appendix or
attachment thereto. In the event claim is made or
suit is brought, IMTCI and Principal Investigator
shall assist GTC and cooperate in the gathering of
information with respect to the time, place, and
circumstances and in obtaining the names and
addresses of the injured parties and available
witnesses.
D. A party or any of its affiliates or their
respective trustees, officers, directors, employees
or agents (the "Indemnitee") that intends to claim
indemnification under this Article 11 shall
promptly notify the other party (the "Indemnitor")
or any loss, claim, damage, liability or action in
respect of which the Indemnitee intends to claim
such indemnification, and the Indemnitor shall
assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however,
that an Indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be
paid by the Indemnitor, if representation of such
Indemnitee by the counsel retained by the
Indemnitor
9
<PAGE> 87
would be inappropriate due to actual or potential
differing interests between such Indemnitee and any
other party represented by such counsel in such
proceedings. The indemnity agreement in this
Article 11 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 unreasonably. The failure to deliver
notice to the Indemnitor within a reasonable time
after the commencement of any such action, if
prejudicial to its ability to defend such action,
shall relieve such Indemnitor of any liability to
the Indemnitee under this Article 11, but the
omission so to deliver notice to the Indemnitor
will not relieve it of any liability that it may
have to any Indemnitee otherwise than under this
Article 11. The Indemnitee under this Article 11,
its 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 indemnification. In the
event that each party claims indemnity from the
other and one party is finally held liable to
indemnify the other, the Indemnitor shall
additionally be liable to pay the reasonable legal
costs and attorneys' fees incurred by the
Indemnitee in establishing its claim for indemnity.
E. IMTCI shall secure and maintain in full force and
effect through the performance of the Study (and
following termination or early termination of the
Study to cover any claims arising from the Study)
insurance coverage in a commercially reasonable
amount for:
(i) medical professional and/or medical
malpractice liability (including
coverage of Principal Investigator);
(ii) general liability (including
coverage for the Study site); and
10
<PAGE> 88
(iii) worker's compensation, each such
insurance coverage in amounts
required by applicable federal and
state laws and appropriate to the
conduct of IMTCI's business
activities and the services
contemplated by the Study.
Upon request of GTC, copies of certificates
evidencing such insurance coverage will be made
available to GTC and IMTCI shall provide thirty
(30) days' prior written notice to GTC in the event
of cancellation or any material change in such
insurance.
12. INVENTIONS AND PATENTS
The sole and exclusive right to any inventions, discoveries or
innovations, whether patentable or not, arising directly or
indirectly, in the performance of the Protocol and Study under
this Agreement and using Study shall be the property of GTC.
IMTCI or Principal Investigator will promptly notify GTC in
writing of any such Inventions, and at GTC's request, and
expense, IMTCI and Principal Investigator will cause to be
assigned to GTC all right, title and interest in and to any such
Inventions and provide reasonable assistance to obtain patents
including causing the execution of any invention assignment or
other documents.
13. NOTICE
Whenever any notice is to be given hereunder, it shall be in
writing and mailed postage pre-paid by certified or registered
mail, return receipt requested, or personally delivered to the
appropriate party at the address indicated below, or at such
other place or places as either party may designate in a written
notice to the other:
To IMTCI: IMTCI
16300 College Boulevard
Lexena, KS 66219
Attn: Robert Dockhorn, M.D.
To GTC: Genome Therapeutics Corporation
Attn: Manager, Business Development
100 Beaver Street
Waltham, MA 02154
11
<PAGE> 89
Notice shall be deemed to have been received at the earlier of
receipt or five (5) days from the date of mailing (in the case of
a letter).
14. ASSIGNMENT
This Agreement is not assignable by IMTCI and any attempted
assignment or delegation in violation hereof shall be void. GTC
may assign this Agreement to an affiliated company or to a
successor in connection with the merger, consolidation, or sale
of all or substantially all of its assets or that portion of its
business to which this Agreement relates without the prior
consent of IMTCI. Notwithstanding such assignment, GTC shall
remain liable for all of its obligations under this Agreement.
15. APPLICABLE LAW
This Agreement shall be construed in accordance with
Massachusetts law.
16. PUBLICITY
Neither Party shall use the name of the other Party (or the name
of GTC or any division or affiliated companies) for promotional
purposes without the prior written consent of the Party whose
name is proposed to be used. No news release, publicity or other
public announcement, either written or oral, regarding this
Agreement or performance hereunder or results arising from the
Study, shall be made by IMTCI without the prior written approval
of GTC.
17. INDEPENDENT CONTRACTOR
It is agreed by the Parties that IMTCI and Principal Investigator
are acting in the capacity of independent contractors hereunder
and not as employees, agents or joint venturers of or with GTC.
Neither IMTCI nor Principal Investigator shall have any authority
to represent, bind or act on behalf of GTC.
18. AGREEMENT MODIFICATIONS
Neither this Agreement nor the Protocol may be altered, amended
or modified except by written document signed by both Parties.
12
<PAGE> 90
19. SEVERABILITY
If any term or condition in this Agreement, the deletion of which
would not adversely affect the receipt of any material benefit by
either Party hereunder, shall be held illegal, invalid or
unenforceable, the remaining terms and conditions of this
Agreement shall not be affected thereby and such terms and
conditions shall be valid and enforceable to the fullest extent
permitted by law.
20. NO WAIVER
Failure on the part of GTC to exercise or enforce any right
conferred upon it hereunder shall not be deemed to be a waiver of
any such right nor operate to bar the exercise or enforcement
thereof at any time or times thereafter.
21. FORCE MAJEURE
Noncompliance by either Party with the obligations of this
Agreement due to force majeure, (laws or regulations of any
government, war, civil commotion, destruction of production
facilities and materials, fire, flood, earthquake or storm, labor
disturbances, shortage of materials, failure of public utilities
or common carriers) or any other causes beyond the reasonable
control of the applicable party, shall not constitute breach of
this Agreement and such party shall be excused from performance
hereunder to the extent and for the duration of such prevention,
provided it first notifies the other party in writing of such
prevention and that it uses its best efforts to cause the event
of such force majeure to terminate, be cured or otherwise ended.
22. ENTIRE UNDERSTANDING
This Agreement, including any exhibits and schedules hereto,
constitutes the entire agreement between the parties with respect
to the subject matter hereof. This Agreement supersedes and
cancels all previous agreements among the parties, written and
oral in respect of the subject matter hereof. In the event of any
inconsistency between this Agreement and the attached Protocol
______________________________ (Exhibit A), the terms of this
Agreement shall govern except with regard to adverse event
reporting procedures which shall be governed by the Protocol and
any appendix or attachment thereto.
13
<PAGE> 91
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed, by duly authorized representatives, as of the last date
written below.
International Medical Technical Genome Therapeutics Corporation
Consultants, Inc.
By: /s/ Illegible Signature By: /s/ Illegible Signatures
______________________________ ___________________________________
Date: 12/19/96 Date: 12/19/96
_____________________________ ___________________________________
AGREED AND ACCEPTED:
/s/ Illegible Signature
__________________________________
Principal Investigator
Date: 12/20/96
_____________________________
14
<PAGE> 92
GENOME THERAPEUTICS CORPORATION
[*]
BUDGET WORKSHEET
December 20, 1996
[*]
<TABLE>
<S> <C>
[*]
</TABLE>
OTHER STUDY EXPENSES
<TABLE>
<S> <C>
[*]
</TABLE>
*Confidential Treatment Requested
<PAGE> 93
GENOME THERAPEUTICS CORPORATION
[*]
BUDGET WORKSHEET
December 20, 1996
<TABLE>
<S> <C>
[*]
Total [*]
[*]
Total [*]
</TABLE>
*Data management budget was developed in accordance with attached assumptions
*Confidential Treatment Requested
<PAGE> 94
Assumptions in Revised Data Management Proposals
[*]
*Confidential Treatment Requested
<PAGE> 95
GENOME THERAPEUTICS CORPORATION
[*]
BUDGET WORKSHEET
December 20, 1996
[*]
<TABLE>
<S> <C>
[*]
</TABLE>
OTHER STUDY EXPENSES
<TABLE>
<S> <C>
[*]
</TABLE>
*Confidential Treatment Requested
<PAGE> 96
PAGE 1 STUDY NO. GTC
- -------------------------------------------------------------------------------
12/20/96-DRAFT
CONFIDENTIAL
GENOME THERAPEUTICS CORPORATION
STUDY NUMBER: GTC-50
STUDY TITLE: Family Data Collection for Genetics of Asthma Research
Project*
PRICIPAL INVESTIGATOR: Stephen Holgate, M.D.
ADDRESS: Southampton General Hospital
Medicine I, Level D, Centre Block
Tremona Road
Southampton, England S016 6YD
TELEPHONE NUMBER: 01-703-796960
SUB-INVESTIGATORS:
PROJECT PHYSICIAN: Schering-Plough Research Institute
Kenilworth, NJ
PROJECT MONITORS: Tim P. Keith, Ph.D.
Genome Therapeutics Corporation
ADDRESS: 100 Beaver Street
Waltham, MA 02154
TELEPHONE NUMBERS: 617 398 2354, 2300
FAX NUMBER: 617 894 7059 or 893 8277
* Confidential Treatment Requested
<PAGE> 97
PAGE 1 STUDY NO. GTC-
12/20/96 - DRAFT
C O N F I D E N T I A L
GENOME THERAPEUTICS CORPORATION
STUDY NUMBER: GTC-01
STUDY TITLE: [*]
PRINCIPAL INVESTIGATOR: Robert Dockhorn, M.D.
ADDRESS: IMTCI
16300 College Boulevard
Lenexa, Kansas, USA 66219
TELEPHONE NUMBER: 913-599-4100
SUB-INVESTIGATORS: Rod Saponjic, Ph.D.
PROJECT PHYSICIAN: Melvyn R. Danzig, Ph.D.
Schering-Plough Research Institute
Kenilworth, NJ
PROJECT MONITORS: Tim P. Keith, Ph.D.
Genome Therapeutics Corporation
ADDRESS: 100 Beaver Street
Waltham, MA 02154
TELEPHONE NUMBERS: 617 398 2354, 2300
FAX NUMBER: 617 894 7059 or 893 8277
*Confidential Treatment Requested
<PAGE> 98
SCH 00066 PAGE 2 STUDY NO. B96-364
SECTION 6 11/26/96
1. INTRODUCTION
Asthma is a significant health problem that affects 5% of the US
population. Studies suggest a strong genetic component in the etiology of the
disease with heritability estimates ranging from 60-80% for atopy and 70% for
airway responsiveness. Despite a clear genetic contribution to the disease, no
consistent mode of inheritance has been observed suggesting that multiple
genetic factors, and environmental influence, play a role.
The goal of the genetics of asthma research project is [*]
2. OBJECTIVE
The objective of this study is to [*]
3. INVESTIGATIONAL PLAN
3.1. STUDY SUMMARY
[*]
*Confidential Treatment Requested
<PAGE> 99
SCH 00066 PAGE 3 STUDY NO. B96-364
SECTION 6 11/26/96
[*]
3.2. STUDY POPULATION
A total of [*]
3.2.1. INCLUSION CRITERIA
[*]
3.2.2. EXCLUSION CRITERIA
[*]
*Confidential Treatment Requested
<PAGE> 100
SCH 00066 PAGE 4 STUDY NO. B96-364
SECTION 6 11/26/96
[*]
3.3. PARTICIPATING STUDY CENTERS
[*]
SITE 01 =
Principal Investigator:
Robert Dockhorn, M.D.
IMTCI
16300 College Boulevard
Lenexa, Kansas, USA 66219
SITE 50 =
Principal Investigator:
Stephen Holgate, M.D.
University of Southampton
Tremona Road
Southampton, England S016 6YD
3.4. STUDY PROCEDURES
[*]
*Confidential Treatment Requested
<PAGE> 101
SCH 00066 PAGE 5 STUDY NO. B96-364
SECTION 6 11/26/96
[*]
[*]
[*]
3.4.2.2. CURRENT MEDICATIONS
[*]
*Confidential Treatment Requested
<PAGE> 102
SCH 00066 PAGE 6 STUDY NO. B96-364
SECTION 6 11/26/96
3.4.2.3. INFORMED CONSENT
[*]
3.4.3. CLINIC VISIT - STUDY PROCEDURES
[*]
*Confidential Treatment Requested
<PAGE> 103
SCH 00066 PAGE 7 STUDY NO. B96-364
SECTION 6 11/26/96
[*]
*Confidential Treatment Requested
<PAGE> 104
SCH 00066 PAGE 8 STUDY NO. B96-364
SECTION 6 11/26/96
[*]
*Confidential Treatment Requested
<PAGE> 105
SCH 00066 PAGE 9 STUDY NO. B96-364
SECTION 6 11/26/96
[*]
4. REFERENCES
5. STUDY SIGNATURES
THIS CONFIDENTIAL INFORMATION ABOUT AN INVESTIGATIONAL STUDY IS PROVIDED FOR THE
EXCLUSIVE USE OF INVESTIGATORS OF THIS STUDY AND IS SUBJECT TO RECALL AT ANY
TIME. THE INFORMATION IN THIS DOCUMENT MAY NOT BE DISCLOSED UNLESS SUCH
DISCLOSURE IS REQUIRED BY FEDERAL OR STATE LAW OR REGULATIONS. SUBJECT TO THE
FOREGOING, THIS INFORMATION MAY BE DISCLOSED ONLY TO THOSE PERSONS INVOLVED IN
THE STUDY WHO HAVE A NEED TO KNOW, WITH THE OBLIGATION NOT TO FURTHER
DISSEMINATE THIS INFORMATION. THESE RESTRICTIONS ON DISCLOSURE WILL APPLY
EQUALLY TO ALL FUTURE ORAL OR WRITTEN INFORMATION, SUPPLIED TO YOU BY THE
SPONSOR, WHICH IS DESIGNATED AS "PRIVILEGED" OR "CONFIDENTIAL".
I have read this protocol dated ____________, (amended ____________) and
agree to conduct the study accordingly.
*Confidential Treatment Requested
<PAGE> 106
SCH 00066 PAGE 10 STUDY NO. B96-364
SECTION 6 11/26/96
"The Protocol incorporates into it Appendices A through E, which taken together
with the Protocol is governing with respect to the subject matter hereof. In the
event of any inconsistency between the Protocol and the attached Appendices, the
terms of the Protocol shall govern."
/s/ Robert Dockhorn, M.D. 12/20/96
- ----------------------------------------------- ------------
Signature of Principal Investigator - Study -01 Date
Robert Dockhorn, M.D.
- ----------------------------------------------- ------------
Printed or typed name Date
- ----------------------------------------------- ------------
Signature of Principal Investigator - Study -50 Date
Stephen T. Holgate, M.D.
- ----------------------------------------------- ------------
Printed or typed name Date
/s/ Tim P. Keith, Ph.D. 12/20/96
- ----------------------------------------------- -----------
Signature of Genome Therapeutics Corp Director Date
Tim P. Keith, Ph.D.
- ----------------------------------------------- ------------
Printed or typed name Date
6. APPENDICES
APPENDIX A - Phone Questionnaire
APPENDIX B - Mother Questionnaire
APPENDIX C - Father Questionnaire
APPENDIX D - Sibling Questionnaire
APPENDIX E - Video Questionnaire
<PAGE> 107
EXHIBIT D-2
SPONSORED RESEARCH AGREEMENT
This Agreement, effective as of __________, 1996 (the "Effective
Date"), is between the University of Southampton ("University"), a university,
having its principal location in Southampton, United Kingdom, and Genome
Therapeutics Corporation ("Sponsor"), a Massachusetts corporation, having its
principal place of business at 100 Beaver Street, Waltham, Massachusetts 02154.
R E C I T A L S
WHEREAS, the University of Southampton has established a laboratory
directed by Stephen T. Holgate, M.D., D.Sc. at its School of Medicine to conduct
research in the area of genetic epidemiology; and
WHEREAS, Genome Therapeutics Corporation wishes to provide financial
support for research at the laboratory for research described in Exhibit A and
in order to obtain certain rights with respect to the results of such research;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, University and Sponsor hereby agree as follows:
1. Definitions.
1.1. "Confidential Information" shall mean any confidential or
proprietary information furnished by one party (the "Disclosing Party") to the
other party (the "Receiving Party") in connection with the performance of the
Research Project, provided that such information is specifically designated as
confidential. Such Confidential Information may include, without limitation,
trade secrets, know-how, inventions, technical data or specifications, testing
methods, and research and development activities.
1.2. "Field" shall mean (i) the use of small molecules, proteins,
antisense molecules and gene therapy for the treatment of asthma and related
diseases, resulting from the identification of genes involved in asthma and such
related diseases, and (ii) the diagnosis of Asthma and related diseases.
1.3. "Inventions" shall mean any potentially patentable invention based
on the Research Results which is conceived or reduced to practice during the
Term by employees of University.
1.4. "Materials" shall mean any tangible biological, chemical, or
physical materials. In the case of biological materials, the term "Materials"
shall also include tangible materials that are routinely produced through use of
the original materials, including, for example, any progeny derived from a cell
line, monoclonal antibodies produced by hybridoma cells, DNA or RNA
<PAGE> 108
replicated from isolated DNA or RNA, recombinant proteins produced through use
of isolated DNA or RNA, and recombinant proteins isolated from a cell extract or
supernatant by non-proprietary affinity purification methods.
1.5. "Patent Rights" shall mean all United States and foreign patent
applications claiming an Invention, including any divisional, continuation,
continuation-in-part (to the extent that the claims are directed to an
Invention), and foreign equivalents thereof, as well as any patents issued
thereon or reissues thereof. "University Patent Rights" shall mean Patent Rights
claiming Inventions that are conceived or reduced to practice solely by
employees of University. "Joint Patent Rights" shall mean Patent Rights claiming
Inventions that are conceived or reduced to practice jointly by employees of
University and employees or consultants of Sponsor.
1.6. "Principal Investigator" shall mean an employee of University who
has primary responsibility for the performance of the Research Project. The
Principal Investigator is identified in Section 2.1. below.
1.7. "Project Materials" shall mean Materials that are discovered or
developed by University in the performance of the Research Project, including,
without limitation, patient DNA materials collected and/or utilized in
performance of the Research Project.
1.8. "Proprietary Materials" shall mean any proprietary Materials other
than Project Materials that are furnished by one party (the "Supplier") to the
other party (the "Recipient") in connection with the performance of the Research
Project.
1.9. "Research Project" shall mean the research project described on
Exhibit A ("Description of Research Project"), which University agrees to
perform under the terms and conditions of this Agreement.
1.10. "Research Results" shall mean all data, clinical data, test
results, laboratory notes, techniques, know-how, and any other research results
that are obtained by University in the performance of the Research Project. The
term "Research Results" shall not include any Project Materials, patentable
inventions, copyrighted or copyrightable works, trademarks or service marks, or
other intellectual property based on the Research Results.
1.11. "Technical Representative" shall mean an individual designated by
Sponsor as its principal technical representative for consultation and
communications with University and the Principal Investigator. The Technical
Representative is identified in Section 2.1. below.
1.12. "Term" shall mean the term of this Agreement as further defined
in Section 6.1. below.
2. Performance of Research Project.
2
<PAGE> 109
2.1. Principal Investigator and Technical Representative. The Principal
Investigator shall be Stephen T. Holgate, M.D., D.Sc. If Stephen T. Holgate
ceases to serve as Principal Investigator for any reason, University will
promptly notify Sponsor, and University and Sponsor shall use good faith efforts
to identify a mutually acceptable replacement within sixty (60) days. If a
suitable replacement Principal Investigator cannot be identified within the
sixty-day period, Sponsor shall have right to terminate this Agreement as
provided in Section 6.2. The Technical Representative shall be Tim Keith, Ph.D.
Sponsor may change its Technical Representative upon thirty (30) days written
notice to University.
2.2. Performance of Research Project. University shall use best efforts
to complete the Research Project. The Principal Investigator shall direct the
Research Project and shall control the manner of its performance. The Technical
Representative may consult informally with the Principal Investigator, both in
person and by telephone, regarding the performance of the Research Project. The
Technical Representative shall have reasonable access to University facilities
where the Research Project is being conducted.
2.3. Records, Materials, and Reports. The Principal Investigator will
prepare and maintain records containing all Research Results, including
laboratory notebooks maintained in accordance with customary academic practice.
During the term of this Agreement the Technical Representative shall have
reasonable access to such research records, and the Principal Investigator
agrees to furnish Sponsor, upon request, with reasonable amounts of any Project
Materials, subject to availability. The Principal Investigator agrees to
promptly notify Sponsor of any significant Research Results, and in addition,
the Principal Investigator shall furnish the Sponsor with a written report at
least once every six (6) months during the Term of this Agreement summarizing
the progress made in the Research Project. Within ninety (90) days after the
expiration or termination of this Agreement, the Principal Investigator shall
deliver to Sponsor a final report describing all significant Research Results in
reasonable detail; provided, however, that the Principal Investigator may extend
this ninety-day deadline with the consent of Sponsor.
3. Contributions of Sponsor.
3.1. Contributions to Research Project. Sponsor shall contribute to the
Research Project the financial support listed on Exhibit B ("Sponsor
Contributions"). Sponsor may also furnish University and the Principal
Investigator with certain Confidential Information and Proprietary Materials,
which shall remain the property of Sponsor.
3.2. Payments to University. In consideration of the performance of the
Research Project, Sponsor shall make periodic advance payments to University in
the amounts listed on Exhibit B ("Sponsor Contributions"). Payments should be
made in the name of "University of Southampton" and sent to Mr. Frank Anderson,
University Medicine, Southampton General Hospital, Centre Block, Tremona Road,
Southampton S016 6YD (Tel: 44 1703 396960, Fax: 44 1703 701771). If this
Agreement is terminated prior to the expiration of the Term for any reason
3
<PAGE> 110
other than the departure by the Principal Investigator (as described in Section
6.2) or a material breach by University (as described in Section 6.3.), then
Sponsor will continue to pay University for the uncancellable financial
commitments made by University as part of the Research Plan. Within thirty (30)
days after the expiration or termination of this Agreement, University shall
furnish Sponsor with a final accounting of all expenses incurred in connection
with the Research Project and all funds received from Sponsor pursuant to this
Section 3.2., together with a check payable to Sponsor in the amount of any
unexpended and uncommitted funds.
3.3. Use of Funds. University shall monitor expenditures in accordance
with its institutional policies, to use its best endeavors to ensure that the
funds provided by Sponsor are properly spent in connection with the performance
of the Research Project.
3.4. Ownership of Equipment. Upon termination or expiration of this
Agreement, University shall retain title to all equipment purchased or
fabricated by University with funds provided by Sponsor.
4. Confidential Information; Proprietary Materials; Publications.
4.1. Confidential Information.
(a) Designation. Confidential Information that is disclosed in
writing shall be marked with a legend indicating its confidential status (such
as "Confidential" or "Proprietary"). Confidential Information that is disclosed
orally or visually shall be documented in a written notice prepared by the
Disclosing Party and delivered to the Receiving Party within thirty (30) days of
the date of disclosure; such notice shall summarize the Confidential Information
disclosed to the Receiving Party and reference the time and place of disclosure.
(b) Obligations. During the Term and thereafter for a period
of five (5) years, the Receiving Party shall (i) maintain all Confidential
Information in strict confidence, except that the Receiving Party may disclose
or permit the disclosure of any Confidential Information to its directors,
officers, employees, faculty, students, consultants, and advisors who are
obligated to maintain the confidential nature of such Confidential Information
and who need to know such Confidential Information for the performance of the
Research Project; (ii) use all Confidential Information solely for the
performance of the Research Project; and (iii) allow its directors, officers,
employees, faculty, students, consultants, and advisors to reproduce the
Confidential Information only to the extent necessary for the performance of the
Research Project, with all such reproductions being considered Confidential
Information.
(c) Exceptions. The obligations of the Receiving Party under
Section 4.1.(b) above shall not apply to the extent that the Receiving Party can
demonstrate that certain Confidential Information (i) was in the public domain
prior to the time of its disclosure under this Agreement; (ii) entered the
public domain after the time of its disclosure under this Agreement through
means other than an unauthorized disclosure resulting from an act or omission by
the Receiving Party;
4
<PAGE> 111
(iii) was independently developed or discovered by the Receiving Party without
use of the Confidential Information; (iv) is or was disclosed to the Receiving
Party at any time, whether prior to or after the time of its disclosure under
this Agreement, by a third party having no fiduciary relationship with the
Disclosing Party and having no obligation of confidentiality with respect to
such Confidential Information; or (v) is required to be disclosed to comply with
applicable laws or regulations, or with a court or administrative order,
provided that the Disclosing Party receives reasonable prior written notice of
such disclosure.
(d) Ownership and Return. The Receiving Party acknowledges
that the Disclosing Party (or any third party entrusting its own information to
the Disclosing Party) claims ownership of its Confidential Information in the
possession of the Receiving Party. Upon the expiration or termination of this
Agreement, and at the request of the Disclosing Party, the Receiving Party shall
return to the Disclosing Party all originals, copies, and summaries of
documents, materials, and other tangible manifestations of Confidential
Information in the possession or control of the Receiving Party, except that the
Receiving Party may retain one copy of the Confidential Information in the
possession of its legal counsel solely for the purpose of monitoring its
obligations under this Agreement.
(e) Termination of Confidential Disclosure Agreement. The
Parties hereby terminate, as of the Effective Date, the Confidential Disclosure
Agreement entered into between the University and Sponsor dated July 11, 1996
(the "CDA"), and this Agreement shall supersede such CDA. The Parties agree that
all "Proprietary Information" (as defined in the CDA) shall become Confidential
Information as of the Effective Date and be subject to the terms and conditions
of this Agreement.
4.2. Proprietary Materials.
(a) Limited Use and Transfer. The Recipient shall use
Proprietary Materials only for the performance of the Research Project. The
Recipient shall use the Proprietary Materials only in compliance with all
applicable federal, state, and local laws and regulations. The Recipient shall
not use the Proprietary Materials in any in vivo experiments on human subjects.
The Recipient shall not transfer any Proprietary Materials to any third party
without the prior written consent of the Supplier.
(b) Warranty Disclaimer. Any Proprietary Materials that are
furnished to a party pursuant to this Agreement are provided for experimental
purposes and may have hazardous properties. THE SUPPLIER MAKES NO
REPRESENTATIONS, AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, WITH RESPECT TO ANY PROPRIETARY MATERIALS. THERE ARE NO EXPRESS OR
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR
THAT THE USE OF PROPRIETARY MATERIALS WILL NOT INFRINGE ANY PATENT RIGHTS OR
OTHER PROPRIETARY RIGHTS OF A THIRD PARTY.
5
<PAGE> 112
(c) Ownership and Return. The Recipient acknowledges that the
Supplier (or any third party entrusting its Materials to the Supplier) claims
ownership of its Proprietary Materials in the possession of the Recipient. The
Recipient agrees to cause its employees to execute and deliver any documents of
assignment or conveyance to effectuate the ownership rights of the Supplier in
Proprietary Materials. Upon the expiration or termination of this Agreement, the
Recipient shall at the instruction of Supplier either destroy or return any
unused Proprietary Materials.
4.3. Publications. Principal Investigator and University agree not to
disclose the Research Results to any third party except in accordance with this
Section 4.3. University and its employees will be free to publicly disclose
(through journals, lectures, or otherwise) the Research Results, provided that
the Principal Investigator shall have provided a copy of the proposed disclosure
to Sponsor at least ninety (90) days prior to the submission of any written
publication or any oral public disclosure (the "Review Period") to allow Sponsor
to review and suggest revisions to the disclosure, and to determine whether any
Invention or its Confidential Information would be disclosed. If Sponsor
reasonably determines that the proposed disclosure would reveal an Invention or
Sponsor Confidential Information, then Sponsor shall notify University and the
Principal Investigator of such determination and its basis prior to the
expiration of the Review Period. With respect to disclosure of an Invention, the
University and Principal Investigator agree not to submit the written
publication or presentation of the oral public disclosure, or otherwise disclose
the Research Results in any manner that would compromise Sponsor's ability to
obtain valid Patent Rights covering such Invention. University and Principal
Investigator shall not disclose Research Results and/or an Invention until one
of the following events occurs: (i) Sponsor and University agree that no
patentable Invention exists; (ii) University or Sponsor files a patent
application claiming the relevant Invention pursuant to Article 5; or (iii)
Sponsor, University, and Principal Investigator jointly agree upon revisions
that prevent disclosure of any Invention. With respect to disclosure of Sponsor
Confidential Information, upon receipt of notice by Sponsor, the Principal
Investigator agrees to delete such information from any proposed disclosure. The
foregoing notwithstanding, in the event that Sponsor and/or its sublicensee
notifies Principal Investigator and/or University that a proposed publication of
Research Results contains information which is of substantial commercial
importance to Sponsor and/or its sublicensee, Principal Investigator and
University shall delay the proposed publication, or any other form of public
disclosure of such information by Principal Investigator and/or University, for
a period not to exceed eighteen (18) months from the filing date of the first
patent application covering the information contained in the proposed
publication. In the event that Principal Investigator and/or Institution
notifies Sponsor of evidence that an independent third party is preparing to
publish, or otherwise publicly disclose, essentially the same information as
that contained in a proposed publication by Principal Investigator and/or
University which has been delayed by Sponsor, Sponsor will seriously consider a
request by Principal Investigator and/or University to allow such delayed
publication to occur on an expedited basis, provided that absent written
approval from Sponsor no such expedited publication shall occur. For the
avoidance of doubt, the Principal Investigator and/or University will be free to
publish on the samples and data collected and generated outside this
6
<PAGE> 113
Agreement under MRC funding according to MRC policy. Such publication shall not
be subject to the terms of this agreement.
4.4. Non-competition. Principal Investigator understands the
confidential nature of the information and materials he will acquire or develop
in performance of the Research Project under this Agreement. Principal
Investigator acknowledges that if such information or materials were revealed to
competitors of the Sponsor, then such disclosure could cause damage to the
Sponsor. Therefore, for the duration of the Research Project and for one (1)
year thereafter, Principal Investigator shall not engage in any activities in
the Field that would compete with the Sponsor without first obtaining the
written consent of the Sponsor. The Sponsor agrees not to unreasonably withhold
or delay its consent to activities by Principal Investigator.
5. Intellectual Property.
5.1. Assignment of Rights in Inventions and Project Materials. The
Principal Investigator agrees to assign all rights in any Invention to
University. The Principal Investigator shall certify that every person who may
be involved in the Research Project shall have signed an appropriate Agreement,
which assigns all rights in Inventions to University. University represents and
warrants that all of its directors, officers, employees, faculty, students,
consultants, and advisors who may be involved in the Research Project shall have
signed an appropriate Agreement which assigns to University all rights in
Inventions and all commercial rights in Project Materials.
5.2. Ownership of Patent Rights and Project Materials. University shall
have sole ownership of all University Patent Rights, and University and Sponsor
shall have joint, undivided ownership of all Joint Patent Rights. University
shall have sole ownership of commercial rights in all Project Materials not
claimed in the Patent Rights; however, if a Project Material incorporates one or
more Sponsor Proprietary Materials, University may not exploit commercial rights
in that Project Material without the written consent of Sponsor.
5.3. Notice of Inventions and Project Materials. The Principal
Investigator shall promptly disclose to University the conception or reduction
to practice of any Invention and the development or discovery of any
commercially valuable Project Material that is not otherwise disclosed as an
Invention. University and Sponsor shall provide prompt written notice to the
other of the internal disclosure by its employees of any Invention made solely
by University employees or jointly by University and Sponsor employees.
University and Sponsor shall discuss whether to obtain Patent Rights for such
Invention and whether such Patent Rights would constitute University Patent
Rights or Joint Patent Rights. University shall provide prompt written notice to
Sponsor of the internal disclosure of any commercially valuable Project Material
that is not otherwise disclosed as an Invention.
5.4. Responsibility for Patent Rights.
7
<PAGE> 114
(a) Responsibility for University Patent Rights. University
shall have primary responsibility, at the expense of Sponsor, for the
preparation, filing, prosecution, and maintenance of all University Patent
Rights, using patent counsel selected by Sponsor. University shall consult with
Sponsor as to the preparation, filing, prosecution, and maintenance of all such
Patent Rights reasonably prior to any deadline or action with the U.S. Patent &
Trademark Office or any foreign patent office and shall furnish Sponsor with
copies of all relevant documents reasonably in advance of such consultation.
(b) Responsibility for Joint Patent Rights. Company shall have
primary responsibility, at its expense, for the preparation, filing,
prosecution, and maintenance of all Joint Patent Rights. Sponsor shall consult
with University as to the preparation, filing, prosecution, and maintenance of
all such Patent Rights reasonably prior to any deadline or action with the U.S.
Patent & Trademark Office or any foreign patent office and shall furnish
University with copies of all relevant documents reasonably in advance of such
consultation.
(c) Abandonment. In the event that University desires to
abandon any patent or patent application within the University Patent Rights
(including a desire to cease paying maintenance fees for an issued patent), or
if University declines to assume responsibility for obtaining patent protection
for any Invention, University shall provide Sponsor with reasonable prior
written notice of such intended abandonment or decline of responsibility, and
Sponsor shall have the right, at its expense, to prepare, file, prosecute, and
maintain the relevant Patent Rights in which case University will assign to
Sponsor all of its right, title and interest in such University Patent Rights.
In the event that the Sponsor desires to abandon any patent or
patent application within the Joint Patent Rights (including a desire to cease
paying maintenance fees for an issued patent), or if the Sponsor declines to
assume responsibility for obtaining patent protection for any such joint
invention, the Sponsor shall provide University with reasonable prior written
notice of such intended abandonment or decline of responsibility, and University
shall have the right, at its expense, to prepare, file, prosecute, and maintain
the relevant Joint Patent Rights in which case the Sponsor will assign to
University all of its right, title and interest in such Joint Patent Rights.
(d) Cooperation. University and Sponsor shall cooperate fully
in the preparation, filing, prosecution, and maintenance of all University
Patent Rights and Joint Patent Rights. Such cooperation includes, without
limitation, (i) promptly executing all papers and instruments or requiring
employees of University or Sponsor to execute such papers and instruments as
reasonable and appropriate so as to enable University or Sponsor to file,
prosecute, and maintain such Patent Rights in any country; and (ii) promptly
informing the other party of matters that may affect the preparation, filing,
prosecution, or maintenance of any such Patent Rights.
(e) Payment of Expenses. Within thirty (30) days after
University invoices Sponsor, Sponsor shall reimburse University for all
reasonable patent-related expenses incurred
8
<PAGE> 115
by University pursuant to Section 5.4.(a). University shall have no obligation
to reimburse Sponsor for expenses incurred by Sponsor pursuant to Section
5.4.(b). Sponsor may elect, upon written notice to University, to cease payment
of the expenses associated with obtaining or maintaining patent protection for
one or more Patent Rights in one or more countries. In such event, Sponsor shall
lose all rights under this Agreement with respect to such Patent Rights in such
countries and University shall have the right, at its expense, to pursue the
obtaining or maintaining of patent protection in respect of the relevant Patent
Rights.
5.5. Exclusive License. University and Sponsor hereby agree to enter
into, as of the Effective Date, the Exclusive License Agreement (the "License
Agreement") in the form attached hereto as Exhibit C.
5.6. Use of Research Results and Project Materials. Sponsor shall have
the unrestricted right to use Research Results and Project Materials for any
purpose, which right shall be royalty-free for all internal purposes and shall
be subject to royalties for all other purposes as set forth in the License
Agreement. University shall have the unrestricted, royalty-free right to use
Research Results and Project Materials for internal research and teaching
purposes only, subject to clauses 4 and 5 of this Agreement.
5.7. Copyrightable Works. University or its employees shall have sole
ownership of any copyrighted or copyrightable works (including reports and
publications) that are created solely by University employees in the performance
of the Research Project. University and the Principal Investigator hereby grant
Sponsor an irrevocable, royalty-free, non-exclusive right to copy and distribute
any research reports furnished to Sponsor under this Agreement and to prepare,
copy, and distribute derivative works based on these research reports.
5.8. The University makes no representation or warranty for any use
which may be made of any work carried out under or pursuant to this Agreement or
of the results of the Research Project nor for any reliance which may be placed
on such work or results nor for advice or information given in connection with
them.
6. Term and Termination.
6.1. Term. This Agreement shall commence on the Effective Date and
shall remain in effect for a period of three (3) years, unless earlier
terminated in accordance with the provisions of this Agreement. The Agreement
may be renewed, prior to the expiration of the Agreement, by mutual written
agreement of both Sponsor and University.
6.2. Loss of Principal Investigator. If the Principal Investigator
leaves University or otherwise terminates his involvement in the Research
Project, and if University and Sponsor fail to identify a mutually acceptable
substitute as provided in Section 2.1, Sponsor may terminate this Agreement
immediately upon written notice to University.
9
<PAGE> 116
6.3. Termination for Default. In the event that either party commits a
material breach of its obligations under this Agreement and fails to cure that
breach within sixty (60) days after receiving written notice thereof, the other
party may terminate this Agreement immediately upon written notice to the party
in breach.
6.4. Force Majeure. Neither party will be responsible for delays
resulting from causes beyond the reasonable control of such party, including
without limitation fire, explosion, flood, war, strike, or riot, provided that
the nonperforming party uses commercially reasonable efforts to avoid or remove
such causes of nonperformance and continues performance under this Agreement
with reasonable dispatch whenever such causes are removed.
6.5. Effect of Termination. The following provisions shall survive the
expiration or termination of this Agreement: Articles 1, 4, 7, 8; Sections 2.3
(obligation to deliver final report), 3.2. (obligation to deliver final
accounting), 6.5, 9.1, 9.2, 9.9, and 9.10. In addition, the provisions of
Article 5 shall survive termination of this Agreement, as necessary to
effectuate the rights of Sponsor, unless University has terminated this
Agreement because of a material breach by Sponsor pursuant to Section 6.3.
7. Dispute Resolution.
7.1. Procedures Mandatory. The parties agree that any dispute arising
out of or relating to this Agreement shall be resolved solely by means of the
procedures set forth in this Article, and that such procedures constitute
legally binding obligations that are an essential provision of this Agreement;
provided, however, that all procedures and deadlines specified in this Article
may be modified by written agreement of the parties. If either party fails to
observe the procedures of this Article, as modified by their written agreement,
the other party may bring an action for specific performance in any court of
competent jurisdiction.
7.2. Dispute Resolution Procedures.
(a) Negotiation. In the event of any dispute arising out of or
relating to this Agreement, the affected party shall notify the other party, and
the parties shall attempt in good faith to resolve the matter within twenty one
(21) days after the date such notice is received by the other party (the "Notice
Date"). Any disputes not resolved by good faith discussions shall be referred to
senior executives of each party, who shall meet at a mutually acceptable time
and location within thirty (30) days after the Notice Date and shall attempt in
good faith to negotiate a settlement.
(b) Arbitration. If the matter remains unresolved within sixty
(60) days after the Notice Date, or the senior executives fail to meet within
thirty (30) after the Notice Date, either party may initiate arbitration upon
written notice to the other party, whereupon both parties shall be obligated to
engage in arbitration pursuant to this Section 7.2(b). All disputes arising in
connection with this Agreement shall be finally settled under the Rules of
Conciliation and
10
<PAGE> 117
Arbitration of the International Chamber of Commerce by one (1) arbitrator
appointed in accordance with said Rules. The place of arbitration shall be
London, England and the law applicable to the arbitration procedure shall be
determined by referring to the law of the place of arbitration. The arbitrator
shall determine the matters in dispute in accordance with the laws of The
Commonwealth of Massachusetts pursuant to Section 9.9 of this Agreement. The
English language shall be used throughout the arbitral proceedings. The parties
agree to exclude any right of application or appeal to the English Courts in
connection with any question of law arising in the course of the arbitration or
with respect to any award made. Notwithstanding the above, either party has the
right to bring suit in a court of competent jurisdiction against the other party
for any breach of the other party's duties of confidentiality pursuant to
Article 4 of this Agreement.
7.3. Preservation of Rights Pending Resolution.
(a) Performance to Continue. Each party shall continue to
perform its obligations under this Agreement pending final resolution of any
dispute arising out or relating to this Agreement; provided, however, that a
party may suspend performance of its obligations during any period in which the
other party fails or refuses to perform its obligations.
(b) Provisional Remedies. Although the procedures specified in
this Article are the sole and exclusive procedures for the resolution of
disputes arising out of and/or relating to this Agreement, either party may seek
a preliminary injunction or other provisional equitable relief in a Court of
competent jurisdiction if, in its reasonable judgment, such action is necessary
to avoid irreparable harm to itself or to preserve its rights under this
Agreement.
(c) Statute of Limitations. The parties agree that all
applicable statutes of limitation and time-based defenses (such as estoppel and
laches) shall be tolled while the procedures set forth in Subsections 7.2.(a)
and 7.2(b) are pending. The parties shall take any actions necessary to
effectuate this result.
8. Representation and Warranties; Indemnification.
8.1. Authority to Enter Agreement. Each of the parties warrants and
represents to the other that it has the full right and authority to enter into
this Agreement, and that it is not aware of any impediment which would inhibit
its ability to perform the terms and conditions imposed on it by this Agreement.
8.2. Third Party Rights. University warrants and represents that it has
not licensed, assigned or otherwise granted, and is under no obligation to
license, assign or grant, any right or interest in the Research Results,
Research Materials, University Patent Rights or Joint Patent Rights to any third
party; it has the right to grant the rights granted hereunder; that the granting
of such rights does not require the consent of any third party; and that there
are no outstanding agreements or encumbrances inconsistent with the provisions
of this Agreement.
11
<PAGE> 118
8.3. Indemnification.
(a) Indemnity. Sponsor shall indemnify, defend, and hold
harmless University and its trustees, officers, faculty, students, employees,
and agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon any of the Indemnitees in connection with any claims, suits, actions,
demands or judgments arising out of any theory of liability (including without
limitation actions in the form of tort, warranty, or strict liability and
regardless of whether such action has any factual basis) and (i) arising out of
the sale or use of a commercial product sold by Sponsor pursuant to the License
Agreement, or (ii) arising out of actions taken directly by Sponsor in
furtherance of the Research Project conducted pursuant to this Agreement;
provided, however, that such indemnification shall not apply to any liability,
damage, loss, or expense to the extent directly attributable to (i) the
negligent activities or intentional misconduct of the Indemnitees, or (ii) the
settlement of a claim, suit, action, or demand by Indemnitees without the prior
written approval of Sponsor.
(b) Procedures. The Indemnitees agree to provide Sponsor with
prompt written notice of any claim, suit, action, demand, or judgment for which
indemnification is sought under this Agreement. Sponsor agrees, at its own
expense, to provide attorneys reasonably acceptable to University to defend
against any such claim. The Indemnitees shall cooperate fully with Sponsor in
such defense and will permit Sponsor to conduct and control such defense and the
disposition of such claim, suit, or action (including all decisions relative to
litigation, appeal, and settlement); provided, however, that any Indemnitee
shall have the right to retain its own counsel, at the expense of Sponsor, if
representation of such Indemnitee by the counsel retained by Sponsor would be
inappropriate because of actual or potential differences in the interests of
such Indemnitee and any other party represented by such counsel. Sponsor agrees
to keep University informed of the progress in the defense and disposition of
such claim and to consult with University with regard to any proposed
settlement.
8.4. Limitation of Liability
(a) University Employees. Without prejudice to any rights the
Sponsor may have to claim against the University, the Sponsor hereby undertakes
to make no claim against the Principal Investigator or any other employee,
student, agent or appointee of the University which seeks to enforce against any
of them any liability arising under this Agreement, provided that the University
agrees that it will be fully responsible for all obligations of it and the
Principal Investigator under the Agreement and that it shall not be a defense to
any claim of breach by the Sponsor of the Agreement that such breach was
effected by the Principal Investigator or any other employee, student, agent or
appointee of the University. University acknowledges that the Company does not
waive any rights it may have against any of the aforementioned individuals which
arises outside the scope of the Agreement.
12
<PAGE> 119
(b) Loss of Profits. The liability of either party for any
breach of this Agreement or arising in any other way out of the subject-matter
of this Agreement will not extend to any incidental or consequential damages or
losses including without limitation loss of profits.
9. Miscellaneous.
9.1. Publicity Restrictions. Neither party shall use the name of the
other party or any of its trustees, officers, faculty, students, employees, or
agents, as the case may be or any adaptation of such names, or any terms of this
Agreement in any promotional material or other public announcement or disclosure
without the prior written consent of such other party. The foregoing
notwithstanding, Sponsor shall have the right to disclose such information
without the consent of University in any document or filing required by
applicable securities laws or other applicable law or regulation.
9.2. Notice to Other Investigators. The Principal Investigator shall
furnish all investigators involved in the Research Project, including faculty,
staff, students, and post-doctoral fellows, with written notice of their
obligations under Articles 4 and 5 of this Agreement. Sponsor warrants that the
Technical Representative and other employees who have contact with the Research
Project are bound by the same terms of confidentiality and matters relating to
intellectual property under clauses 4 and 5 of this Agreement.
9.3. Relationship of Parties. For the purposes of this Agreement, each
party is an independent contractor and not an agent or employee of the other
party. Neither party shall have authority to make any statements,
representations, or commitments of any kind, or to take any action which shall
be binding on the other party, except as may be explicitly provided for in this
Agreement or authorized in writing by the other party.
9.4. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
9.5. Headings. All headings are for convenience only and shall not
affect the meaning of any provision of this Agreement.
9.6. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective permitted successors and
assigns.
9.7. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that Sponsor may
assign this Agreement to an affiliate or to a successor in connection with the
merger, consolidation, or sale of all or substantially all of its assets or that
portion of its business to which this Agreement relates.
13
<PAGE> 120
9.8. Amendment and Waiver. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by the
authorized officials of both parties. Any waiver of any rights or failure to act
in a specific instance shall relate only to such instance and shall not be
construed as an agreement to waive any rights or fail to act in any other
instance, whether or not similar.
9.9. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts irrespective of
any conflicts of law principles.
9.10. Notice. Any notices required or permitted under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
sent by hand, recognized national overnight courier, confirmed facsimile
transmission, confirmed electronic mail, or registered or certified mail,
postage prepaid, return receipt requested, to the following addresses or
facsimile numbers of the parties:
If to University:
The Director of Innovation and Research Support
University of Southampton
Highfield, Soughampton S017 1BJ
England
Attention: Dr. Don P. Fox
Tel: 44 01703 593095
Fax: 44 01703 593585
If to Sponsor:
Genome Therapeutics Corporation
100 Beaver Street
Waltham, Massachusetts 02154
Attention: Manager, Business Development
Invoices to: Comptroller
Tel: 617-398-2300
Fax: 617-893-8277
All notices under this Agreement shall be deemed effective upon receipt. A party
may change its contact information immediately upon written notice to the other
party in the manner provided in this Section.
14
<PAGE> 121
9.11. Severability. In the event that any provision of this Agreement
shall be held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this Agreement, and the
parties shall negotiate in good faith to modify the Agreement to preserve (to
the extent possible) their original intent. If the parties fail to reach a
modified agreement within sixty (60) days after the relevant provision is held
invalid or unenforceable, then the dispute shall be resolved in accordance with
the procedures set forth in Article 7. While the dispute is pending resolution,
this Agreement shall be construed as if such provision were deleted by agreement
of the parties.
9.12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and supersedes all prior
agreements or understandings between the parties relating to its subject matter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
UNIVERSITY OF SOUTHAMPTON GENOME THERAPEUTICS CORPORATION
By: /s/ Illegible By: /s/ Illegible
-------------------------- ----------------------------------
Title: Director IRS Title: V.P., Business Development
----------------------- -------------------------------
I hereby acknowledge and agree to the terms of Articles 4 and 5 and
Sections 2.2., 2.3., and 9.2. of this Agreement, and I reaffirm that I will
assign to University all of my right, title, and interest in any Inventions.
ACKNOWLEDGED AND AGREED:
/s/ Stephen T. Holgate
- --------------------------------
Stephen T. Holgate, M.D., D.Sc.
Principal Investigator
15
<PAGE> 122
EXHIBIT A
[*]
INTRODUCTION
Human genetics represents a balance between opposing tendencies. While
reductionist approaches have been very successful in leading to the mapping and
molecular characterization of hundreds of diseases, most diseases and other
traits of interest show complex inheritance, with major different genes in
different families and with interaction of multiple genes and environmental
factors. Reductionism attempts to effect complex inheritance by a single gene
while extreme holism fits multifactorial models but assumes no major genes.
Genetic epidemiology must avoid both extremes, characterizing major genes
against a multifactorial background and provide a genetic risk that allow for
all sources of variation. The search for genetic determinants of atopy in asthma
follows the history of genetic epidemiology (1,2).
While there is overwhelming evidence that environmental factors
predispose to atopy and asthma, there is disagreement about the relative
importance of different mechanisms (2). It is well recognized that the clinical
phenotypic characteristics of asthma and atopy run in families. Early genetic
studies have been directed to heritability, the proportion of the phenotype
variants attributable to genetic factors. This is most easily estimated for
quantitative traits, such as serum IgE and bronchial responsiveness to
inhalation challenges. It has been argued that forcing an arbitrary dichotomy on
quantitative data which is distributed across a population leads to false
assumptions and
*Confidential Treatment Requested
1
<PAGE> 123
is erroneous, however, methods are available to estimate heritability from a
dichotomy assuming that multiple factors act additively. On this basis, a number
of research groups worldwide have applied the candidate locus, candidate region
or random human genome screens in an attempt to identify genes or polygenes that
influence the development or severity of asthma and atopy. Notable claims
include that from the group in Oxford for the B chain of the high affinity IgE
receptor (Fc, R1B) being strongly linked to atopy (3), reports from the USA
describing linkage between phenotypic markers of asthma and atopy to a region on
5q31-33 (4.5) which is enriched for genes encoding cytokines known to be
involved in the allergic tissue response and contains polymorphisms of theB2
adrenoceptor linked to disease severity.
Irrespective of the publicity that these claims have attracted they
have proven difficult to repeat in different populations. (6). Reasons suggested
for this include (1) genetic heterogeneity between populations; (2) bias
introduced into the selection of affected probands (eg. a media appeal); (3)
different methodologies and lack of rigour in defining phenotypic
characteristics; (4) forcing a dichotomisation on data which are continuously
distributed; (5) inappropriate assumptions as to the mode of inheritance, and
(6) lack of statistical power.
Our proposed study with Genome Therapeutics Corporation [*]
*Confidential Treatment Requested
2
<PAGE> 124
[*]
[*]
[*]
*Confidential Treatment Requested
3
<PAGE> 125
[*]
*Confidential Treatment Requested
4
<PAGE> 126
[*]
[*]
[*]
*Confidential Treatment Requested
5
<PAGE> 127
[*]
[*]
[*]
*Confidential Treatment Requested
6
<PAGE> 128
[*]
[*]
[*]
* Confidential Treatment Requested
7
<PAGE> 129
[*]
* Confidential Treatment Requested
8
<PAGE> 130
[*]
* Confidential Treatment Requested
9
<PAGE> 131
[*]
FUTURE PLANS
[*]
* Confidential Treatment Requested
10
<PAGE> 132
[*]
* Confidential Treatment Requested
11
<PAGE> 133
[*]
PROJECT MANAGEMENT AND TIMETABLE
[*]
* Confidential Treatment Requested
12
<PAGE> 134
[*]
RESOURCES REQUIRED [*]
[*]
[*]
* Confidential Treatment Requested
13
<PAGE> 135
[*]
* Confidential Treatment Requested
14
<PAGE> 136
[*]
TRAVEL AND ACCOMMODATON EXPENSES
[*]
[*]
[*]
[*]
* Confidential Treatment Requested
15
<PAGE> 137
[*]
[*]
[*]
[*]
* Confidential Treatment Requested
16
<PAGE> 138
[*]
[*]
[*]
PROJECT MANAGEMENT
[*]
* Confidential Treatment Requested
17
<PAGE> 139
[*]
[*]
[*]
* Confidential Treatment Requested
18
<PAGE> 140
REFERENCES
[*]
* Confidential Treatment Requested
19
<PAGE> 141
[*]
* Confidential Treatment Requested
20
<PAGE> 142
[*]
* Confidential Treatment Requested
21
<PAGE> 143
Appendix to 12 July 1996 Research Plan
(Supersedes or expands upon the Research Plan)
1. The Laboratory program
Research goals. The goal of the research collaboration is to [*]
A. The research at the University will initially focus on [*]
B. The second immediate research focus is the [*]
* Confidential Treatment Requested
1
<PAGE> 144
C. A third major focus of the Research Project is the [*]
[*]
* Confidential Treatment Requested
2
<PAGE> 145
[*]
3. Staffing
[*]
* Confidential Treatment Requested
3
<PAGE> 146
EXHIBIT B
Sponsor Contributions
Budget
[*]
* Confidential Treatment Requested
17
<PAGE> 147
EXCLUSIVE LICENSE AGREEMENT
This Agreement, effective as of _______________ (the "Effective Date"),
is between the University of Southampton ("University"), a university, having
its principal location in Southampton, United Kingdom, and Genome Therapeutics
Corporation ("Company"), a Massachusetts corporation, having its principal place
of business at 100 Beaver Street, Waltham, Massachusetts 02154.
R E C I T A L S
WHEREAS, the University of Southampton has established a laboratory
directed by Stephen T. Holgate, M.D., D.Sc. at its School of Medicine to conduct
research in the area of genetic epidemiology;
WHEREAS, as of the Effective Date the Company has entered into a
Sponsored Research Agreement (the "Research Agreement") with the University to
provide financial support for certain research to be conducted at the University
as described therein; and
WHEREAS, pursuant to the Research Agreement, the University has agreed
to exclusively license to the Company all Inventions, Project Materials and
Research Results (as defined below) arising from the Research Agreement, on the
terms and conditions contained in this Exclusive License Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, University and Company hereby agree as follows:
1. Definitions.
1.1. "Affiliate" shall mean any legal entity (such as a corporation,
partnership, or limited liability company) that is controlled by Company. For
the purposes of this definition, the term "control" means (i) beneficial
ownership of at least fifty percent (50%) of the voting securities of a
corporation or other business organization with voting securities or (ii) a
fifty percent (50%) or greater interest in the net assets or profits of a
partnership or other business organization without voting securities.
1.2. "Combination Product" shall mean a product that contains a
Licensed Product component and at least one other essential functional
component.
1.3. "Confidential Information" shall mean any confidential or
proprietary information furnished by one party (the "Disclosing Party") to the
other party (the "Receiving Party") in connection with the performance of the
Research Project or otherwise related to the Patent
<PAGE> 148
Rights, provided that such information is specifically designated as
confidential. Such Confidential Information may include, without limitation,
trade secrets, know-how, inventions, technical data or specifications, testing
methods, research and development activities, and any reports furnished to
University as provided for hereunder, including, without limitation, royalty
reports.
1.4. "Field" shall mean (i) the use of small molecules, proteins,
antisense molecules and gene therapy for the treatment of asthma and related
diseases, resulting from the identification of genes involved in asthma and such
related diseases, and (ii) the diagnosis of Asthma and related diseases.
1.5. "Inventions" shall mean any potentially patentable invention based
on the Research Results which is conceived or reduced to practice by employees
of the University pursuant to the Research Agreement.
1.6. "Licensed Product" shall mean any product that cannot be
developed, manufactured, used, sold, imported or exported without (i) infringing
one or more valid claims under the Patent Rights, (ii) using or incorporating
some portion of one or more Materials, or (iii) using some portion of the
Research Results.
1.7. "Licensed Service" shall mean any service that cannot be developed
or performed without using at least one process that (i) infringes one or more
valid claims under the Patent Rights, (ii) uses some portion of one or more
Materials, or (iii) using some portion of the Research Results.
1.8. "Materials" shall mean any tangible biological, chemical, or
physical materials. In the case of biological materials, the term "Materials"
shall also include tangible materials that are routinely produced through use of
the original materials, including, for example, any progeny derived from a cell
line, monoclonal antibodies produced by hybridoma cells, DNA or RNA replicated
from isolated DNA or RNA, recombinant proteins produced through use of isolated
DNA or RNA, and recombinant proteins isolated from a cell extract or supernatant
by non-proprietary affinity purification methods.
1.9. "Net Sales" shall mean the gross amount billed or invoiced on
sales by Company and its Affiliates of Licensed Products and Licensed Services,
less the following: (i) customary trade, quantity, or cash discounts and
commissions to non-affiliated brokers or agents to the extent actually allowed
and taken; (ii) amounts repaid or credited by reason of rejection or return not
exceeding the original billing; (iii) to the extent separately stated on
purchase orders, invoices, or other documents of sale, any taxes or other
governmental charges levied on the production, sale, transportation, delivery,
or use of a Licensed Product or Licensed Service which is paid by or on behalf
of Company, to the extent such taxes or charges are actually paid; and (iv)
outbound transportation costs prepaid or allowed and costs of insurance in
transit.
2
<PAGE> 149
In any transfers of Licensed Products between Company and an Affiliate,
Net Sales shall be calculated based on the final sale of the Licensed Product to
an independent third party. In the event that Company or an Affiliate receives
non-monetary consideration for any Licensed Products or Licensed Services, Net
Sales shall be calculated based on the fair market value of such consideration.
In the case of Combination Products, Net Sales shall mean the gross
amount billed or invoiced on sales of the Combination Product less the
deductions set forth above, multiplied by a proration factor that is determined
as follows:
(i) If all components of the Combination Product were sold separately
during the same or immediately preceding Royalty Period, the proration factor
shall be determined by the formula [A / (A+B)], where A is the aggregate gross
sales price of all Licensed Product components during such period when sold
separately from the other essential functional components, and B is the
aggregate gross sales price of the other essential functional components during
such period when sold separately from the Licensed Product Components; or
(ii) If all components of the Combination Product were not sold
separately during the same or immediately preceding Royalty Period, the
proration factor shall be determined by the formula [C / (C+D)], where C is the
aggregate fully absorbed cost of the Licensed Product components during the
prior Royalty Period and D is the aggregate fully absorbed cost of the other
essential functional components during the prior Royalty Period, with such costs
being determined in accordance with generally accepted accounting principles.
1.10. "Patent Rights" shall mean all United States and foreign patent
applications claiming an Invention and any divisional, continuation,
continuation-in-part (to the extent that the claims are directed to an
Invention), and foreign equivalents thereof, as well as any patents issued
thereon or reissues thereof. The first Patent Rights which arise shall be listed
on Exhibit A hereto, and Exhibit A shall be periodically amended upon written
notice to both parties to include any additional Patent Rights that may arise.
"University Patent Rights" shall mean Patent Rights claiming Inventions that are
conceived and reduced to practice solely by employees of University. "Joint
Patent Rights" shall mean Patent Rights claiming Inventions that are conceived
and reduced to practice jointly by employees of University and employees or
consultants of Company.
1.11. "Principal Investigator" shall mean the Principal Investigator as
defined in the Research Agreement.
1.12. "Project Materials" shall mean Materials that are discovered or
developed by University in the performance of the Research Project, including,
without limitation, patient DNA materials collected and/or utilized in
performance of the Research Project.
1.13. "Research Project" shall mean the Research Project as defined in
the Research Agreement.
3
<PAGE> 150
1.14. "Research Results" shall mean all data, test results, laboratory
notes, techniques, know-how, and any other research results that are (i)
obtained by University in the performance of the Research Project, or (ii) which
relate to the Field, have been developed as of the Effective Date, are owned by
University, and are necessary or useful for the exercise of the licenses granted
hereunder. The term "Research Results" shall not include any Proprietary
Materials, Project Materials, patentable inventions, copyrighted or
copyrightable works, trademarks or service marks, or other intellectual property
based on the Research Results.
1.15. "Royalty Period" shall mean the partial calendar quarter
commencing on the date on which the first Licensed Product is sold or used or
the first Licensed Service is performed and every complete or partial calendar
quarter thereafter during which either (i) this Agreement remains in effect or
(ii) Company has the right to complete and sell work-in-progress and inventory
of Licensed Products pursuant to Section 8.5.
1.16. "Sublicense Income" shall mean any license fees and royalties
that Company receives from a Sublicensee in consideration of the sublicense of
the rights granted Company under Section 2.1.
1.17. "Sublicensee" shall mean any permitted sublicensee of the rights
granted Company under this Agreement, as further described in Section 2.2.
1.18. "Term" shall mean the term of this Agreement as further defined
in Section 8.1. below.
2. Grant of Rights.
2.1. License Grants. Subject to the terms of this Agreement, University
hereby grants and agrees to grant to Company and its Affiliates an exclusive,
worldwide, royalty-bearing license (with the right to sublicense on "arms
length" commercial terms) under its commercial rights in the Patent Rights,
Research Results and Project Materials to develop, make, have made, use, sell,
import and export Licensed Products in the Field and to develop and perform
Licensed Services in the Field.
2.2. Sublicenses. Company shall have the right to grant sublicenses of
its rights under Section 2.1. All sublicense agreements executed by Company
pursuant to this Article 2 shall be subject to the applicable terms of this
Agreement and shall provide for the automatic assignment of such agreement to
University if this Agreement is terminated as described in Article 8 below.
2.3. Retained Rights. University retains the right to use the Research
Results and Project Materials for internal academic research and teaching
purposes only, subject to Article 7, without payment of compensation to Company.
4
<PAGE> 151
3. Company Obligations Relating to Commercialization.
3.1. Diligence Requirements. Commencing upon the disclosure to the
Company of Research Results, Inventions and/or Project Materials with reasonable
commercial potential, Company shall use commercially reasonable efforts, or
shall cause its Affiliates and Sublicensees to use diligent efforts, to develop
Licensed Products or Licensed Services and to introduce Licensed Products or
Licensed Services into the commercial market.
Within sixty (60) days after each anniversary of the Effective
Date, Company shall furnish University with a written report on the progress of
its efforts during the prior year to develop and commercialize Licensed Products
or Licensed Services, including without limitation research and development
efforts, efforts to obtain regulatory approval and marketing efforts, which
report shall be considered Company Confidential Information.
In the event that University determines that Company (or an
Affiliate or Sublicensee) has not fulfilled its obligations under this Section
3.1., University shall furnish Company with written notice of such
determination. If Company disagrees with such determination, it shall have the
right to have the matter resolved according to the dispute resolution procedures
contained in Article 9. Within sixty (60) days after receipt of such notice, or,
if the matter has been submitted to the dispute resolution procedures of Article
9, within sixty (60) days of a final outcome of such procedures confirming the
University's determination, Company shall either (i) fulfill the relevant
obligation or (ii) negotiate with University a mutually acceptable schedule of
revised diligence obligations, failing which University shall have the right,
immediately upon written notice to Company, to grant additional licenses to
third parties to the specific Research Results, Patent Rights and Materials in
the Field as to which Company has failed to fulfil its obligations hereunder.
The foregoing notwithstanding, Company shall not be considered
to have failed to fulfil its obligations under this Section 3.1 as a result of
any circumstance beyond its reasonable control, such as regulatory requirements
or unanticipated adverse preclinical or clinical results.
3.2. Indemnification.
(a) Indemnity. Company shall indemnify, defend, and hold
harmless University and its trustees, officers, faculty, students, employees,
and agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon any of the Indemnitees in connection with any claims, suits, actions,
demands or judgments arising out of any theory of liability (including without
limitation actions in the form of tort, warranty, or strict liability and
regardless of whether such action has any factual basis) and arising out of the
sale or use of a Licensed Product sold by Company or provision of a Licensed
Service by the Company pursuant to this Agreement; provided, however, that such
indemnification shall not
5
<PAGE> 152
apply to any liability, damage, loss, or expense to the extent directly
attributable to (i) the negligent activities or intentional misconduct of the
Indemnitees, or (ii) the settlement of a claim, suit, action, or demand by
Indemnitees without the prior written approval of Company.
(b) Procedures. The Indemnitees agree to provide Company with
prompt written notice of any claim, suit, action, demand, or judgment for which
indemnification is sought under this Agreement. Company agrees, at its own
expense, to provide attorneys reasonably acceptable to University to defend
against any such claim. The Indemnitees shall cooperate fully with Company in
such defense and will permit Company to conduct and control such defense and the
disposition of such claim, suit, or action (including all decisions relative to
litigation, appeal, and settlement); provided, however, that any Indemnitee
shall have the right to retain its own counsel, at the expense of Company, if
representation of such Indemnitee by the counsel retained by Company would be
inappropriate because of actual or potential differences in the interests of
such Indemnitee and any other party represented by such counsel. Company agrees
to keep University informed of the progress in the defense and disposition of
such claim and to consult with University with regard to any proposed
settlement.
3.3. Compliance with Law. Company shall comply with, and shall take
reasonable steps to ensure that its Affiliates and Sublicensees comply with, all
local, state, federal, and international laws and regulations relating to the
development, manufacture, use, sale, import and export of Licensed Products and
Licensed Services.
4. Consideration for Grant of Rights.
4.1. Royalties. In partial consideration of the rights granted Company
under this Agreement, Company shall pay to University a royalty of [*] of
Net Sales of Licensed Products and Licensed Services by Company and its
Affiliates covered by a valid claim of University Patent Rights and [*] of
Net Sales of Licensed Products and Licensed Services by Company and its
Affiliates covered by a valid claim of Joint Patent Rights. If a particular
Licensed Product or Licensed Service is within the definition of "Licensed
Product" or "Licensed Service" solely because it uses or incorporates
Research Results and/or Project Materials, the royalty rate applicable to such
Licensed Product or Licensed Service shall be reduced to [*].
4.2. Sublicense Income. Company shall pay University a total of [*]
of all Sublicense Income. Such amounts shall be due and payable within sixty
(60) days after Company receives the relevant payment from the Sublicensee.
4.3. Third-Party Payments. In the event that Company is required to
make payments to one or more third parties in order to make, use, or sell
Licensed Products or to perform Licensed Services, Company may offset a total of
[*] of such third-party payments against any payments that are due to
University in the same Royalty Period, provided that in no
* Confidential Treatment Requested.
6
<PAGE> 153
event shall the payments due to University under this Agreement, when aggregated
with any other offsets and credits allowed under this Agreement, be reduced by
more than [*] in any Royalty Period.
5. Royalty Reports; Payments; Records.
5.1. First Sale. Company shall report to University the date of first
commercial sale of each Licensed Product and the date of first commercial
performance of each Licensed Service within thirty (30) days of occurrence in
each country.
5.2. Reports and Payments. Within sixty (60) days after the conclusion
of each Royalty Period, Company shall deliver to University a report containing
the following information:
(i) the number of Licensed Products sold to independent third parties
in each country, and the number of Licensed Products used by Company and its
Affiliates in the provision of Licensed Services and other services in each
country;
(ii) the quantity of Licensed Services provided by Company and its
Affiliates in each country;
(iii) the gross sales price for each Licensed Product and the gross
charge for each Licensed Service by Company and its Affiliates during the
applicable Royalty Period in each country;
(iv) calculation of Net Sales for the applicable Royalty Period in each
country, including a listing of applicable deductions;
(v) total royalty payable on Net Sales in U.S. dollars, together with
the exchange rates used for conversion;
(vi) withholding taxes, if any, required by law to be deducted as a
payment by University in respect of such Net Sales; and
(vii) the amount Sublicense Income received by University for the
applicable Royalty Period from each Sublicensee and the percentage of such
income due to University hereunder.
All such reports shall be considered Company Confidential Information. If no
royalties are due to University for any Royalty Period, the report shall so
state. Concurrent with this report, Company shall remit to University any
payment due for the applicable Royalty Period.
5.3. Payments in U.S. Dollars. All payments due under this Agreement
shall be payable in United States dollars. Conversion of foreign currency to
U.S. dollars shall be made at the conversion rate existing in the United States
(as reported in the Wall Street Journal) on the last
* Confidential Treatment Requested.
7
<PAGE> 154
working day of the calendar quarter preceding the applicable Royalty Period.
Such payments shall be without deduction of exchange, collection, or other
charges.
5.4. Payments in Other Currencies. If by law, regulation, or fiscal
policy of a particular country, conversion into United States dollars or
transfer of funds of a convertible currency to the United States is restricted
or forbidden, Company shall give University prompt written notice of such
restriction, which notice shall satisfy the sixty-day payment deadline described
in Section 5.2. Company shall pay any amounts due University by depositing such
payment in local currency to the credit of University in a recognized banking
institution selected by Company and identified by written notice to University,
and such deposit shall fulfill all obligations of Company to University with
respect to such payment.
5.5. Records. Company shall maintain, and shall cause its Affiliates
and Sublicensees to maintain, complete and accurate records of Licensed Products
and Licensed Services that are made, used, sold, or performed under this
Agreement and any amounts payable to University in relation to such Licensed
Products and Licensed Services, which records shall contain sufficient
information to permit University to confirm the accuracy of any reports
delivered to University under Section 5.2. The relevant party shall retain such
records relating to a given Royalty Period for at least three (3) years after
the conclusion of that Royalty Period, during which time University shall have
the right, at its expense, to cause an independent accounting firm of national
standing to inspect such records during normal business hours for the sole
purpose of verifying any reports and payments delivered under this Agreement.
Such accountant shall not disclose to University any information other than
information relating to accuracy of reports and payments delivered under this
Agreement. University may exercise its rights under this Section only once every
year and only with reasonable prior notice to Company.
6. Patents and Infringement.
6.1. Responsibility for Patent Rights.
(a) Primary Responsibility with University. University shall
have primary responsibility, at the expense of Company, for the preparation,
filing, prosecution, and maintenance of all University Patent Rights, using
patent counsel selected by Company. University shall consult with Company as to
the preparation, filing, prosecution, and maintenance of all such Patent Rights
reasonably prior to any deadline or action with the U.S. Patent & Trademark
Office or any foreign patent office and shall furnish Company with copies of all
relevant documents reasonably in advance of such consultation.
(b) Responsibility for Joint Patent Rights. Company shall have
primary responsibility, at its expense, for the preparation, filing prosecution,
and maintenance of all Joint Patent Rights. Sponsor shall consult with
University as to the preparation, filing, prosecution, and maintenance of all
such Patent Rights reasonably prior to any deadline or action with the
8
<PAGE> 155
U.S. Patent & Trademark Office or any foreign patent office and shall furnish
University with copies of all relevant documents reasonably in advance of such
consultation.
(c) Abandonment. In the event that University desires to
abandon any patent or patent application within the University Patent Rights
(including a desire to cease paying maintenance fees for an issued patent), or
if University declines to assume responsibility for obtaining patent protection
for any Invention, University shall provide Company with reasonable prior
written notice of such intended abandonment or decline of responsibility, and
Company shall have the right, at its expense, to prepare, file, prosecute, and
maintain the relevant University Patent Rights in which case University will
assign to Company all of its right, title and interest in such University Patent
Rights.
In the event that the Company desires to abandon any patent or
patent application within the Joint Patent Rights (including a desire to cease
paying maintenance fees for an issued patent), or if the Company declines to
assume responsibility for obtaining patent protection for any such joint
Invention, the Company shall provide University with reasonable prior written
notice of such intended abandonment or decline of responsibility, and University
shall have the right, at its expense, to prepare, file, prosecute, and maintain
the relevant Joint Patent Rights in which case the Company will assign to
University all of its right, title and interest in such Joint Patent Rights.
(d) Cooperation. University and Company shall cooperate fully
in the preparation, filing, prosecution, and maintenance of all University
Patent Rights and Joint Patent Rights. Such cooperation includes, without
limitation, (i) promptly executing all papers and instruments or requiring
employees of University or Company to execute such papers and instruments as
reasonable and appropriate so as to enable University or Company to file,
prosecute, and maintain such Patent Rights in any country; and (ii) promptly
informing the other party of matters that may affect the preparation, filing,
prosecution, or maintenance of any such Patent Rights.
(e) Payment of Expenses. Within thirty (30) days after
University invoices Company, Company shall reimburse University for all
reasonable patent-related expenses incurred by University pursuant to Section
6.1(a). University shall have no obligation to reimburse Company for expenses
incurred by Company pursuant to Section 6.1(b). Company may elect, upon written
notice to University, to cease payment of the expenses associated with obtaining
or maintaining patent protection for one or more Patent Rights in one or more
countries. In such event, Company shall lose all rights under this Agreement
with respect to such Patent Rights in such countries and University shall have
the right at its expense to pursue the obtaining or maintaining of patent
protection in respect of the relevant Patent Rights.
6.2. Infringement.
9
<PAGE> 156
(a) Notification of Infringement. Each party agrees to provide
written notice to the other party promptly after becoming aware of any
infringement of the Patent Rights.
(b) Company Right to Prosecute. Company shall have the right,
but not the obligation, under its own control and at its own expense, to
prosecute any third party infringement of the Patent Rights or to defend the
Patent Rights in any declaratory judgment action brought by a third party which
alleges invalidity, unenforceability, or non-infringement of the Patent Rights.
The total cost of any such infringement action commenced or defended solely by
Company shall by borne by Company, and Company shall keep any recovery or
damages for past infringement derived therefrom.
(c) University as Indispensable Party. University shall permit
any action under this Section 6.2 to be brought in its name if required by law,
provided that Company shall hold University harmless from, and if necessary
indemnify University against, any costs, expenses, or liability that University
may incur in connection with such action.
(d) University Right to Prosecute. In the event that Company
fails to initiate an infringement action or take other steps reasonably intended
to cause the infringer to desist within six (6) months after it first becomes
aware of the basis for such action, or to answer a declaratory judgment action
within a reasonable time after such action is filed, University shall have the
right to prosecute such infringement or answer such declaratory judgment action,
under its sole control and at its sole expense, and any recovery obtained shall
be retained by the University.
(e) Cooperation. Each party agrees to cooperate fully in any
action under this Section 6.2. which is controlled by the other party, provided
that the controlling party reimburses the cooperating party promptly for any
costs and expenses incurred by the cooperating party in connection with
providing such assistance.
7. Confidential Information; Proprietary Materials; Publications.
7.1. Confidential Information.
(a) Designation. Confidential Information that is disclosed in
writing shall be marked with a legend indicating its confidential status (such
as "Confidential" or "Proprietary"). Confidential Information that is disclosed
orally or visually shall be documented in a written notice prepared by the
Disclosing Party and delivered to the Receiving Party within thirty (30) days of
the date of disclosure; such notice shall summarize the Confidential Information
disclosed to the Receiving Party and reference the time and place of disclosure.
(b) Obligations. During the Term and thereafter for a period
of five (5) years, the Receiving Party shall (i) maintain all Confidential
Information in strict confidence, except that the Receiving Party may disclose
or permit the disclosure of any Confidential Information to its
10
<PAGE> 157
directors, officers, employees, faculty, students, consultants, and advisors who
are obligated to maintain the confidential nature of such Confidential
Information and who need to know such Confidential Information for the
performance of the Research Project or the obtaining, exploitation, or
enforcement of Patent Rights; (ii) use all Confidential Information solely for
the performance of the Research Project or the obtaining, exploitation, or
enforcement of Patent Rights; and (iii) allow its directors, officers,
employees, faculty, students, consultants, and advisors to reproduce the
Confidential Information only to the extent necessary for the performance of the
Research Project or the obtaining, exploitation, or enforcement of Patent
Rights, with all such reproductions being considered Confidential Information.
(c) Exceptions. The obligations of the Receiving Party under
Section 7.1.(b) above shall not apply to the extent that the Receiving Party can
demonstrate that certain Confidential Information (i) was in the public domain
prior to the time of its disclosure under this Agreement; (ii) entered the
public domain after the time of its disclosure under this Agreement through
means other than an unauthorized disclosure resulting from an act or omission by
the Receiving Party; (iii) was independently developed or discovered by the
Receiving Party without use of the Confidential Information; (iv) is or was
disclosed to the Receiving Party at any time, whether prior to or after the time
of its disclosure under this Agreement, by a third party having no fiduciary
relationship with the Disclosing Party and having no obligation of
confidentiality with respect to such Confidential Information; or (v) is
required to be disclosed to comply with applicable laws or regulations, or with
a court or administrative order, provided that the Disclosing Party receives
reasonable prior written notice of such disclosure.
(d) Ownership and Return. The Receiving Party acknowledges
that the Disclosing Party (or any third party entrusting its own information to
the Disclosing Party) claims ownership of its Confidential Information in the
possession of the Receiving Party. Upon the expiration or termination of this
Agreement, and at the request of the Disclosing Party, the Receiving Party shall
return to the Disclosing Party all originals, copies, and summaries of
documents, materials, and other tangible manifestations of Confidential
Information in the possession or control of the Receiving Party, except that the
Receiving Party may retain one copy of the Confidential Information in the
possession of its legal counsel solely for the purpose of monitoring its
obligations under this Agreement.
7.2. Publications. University agrees not to disclose the Research
Results to any third party except in accordance with this Section 7.2 and
Section 4.3 of the Research Agreement. University and its employees will be free
to publicly disclose (through journals, lectures, or otherwise) the Research
Results, provided that the University shall have provided a copy of the proposed
disclosure to Company at least ninety (90) days prior to the submission of any
written publication or any oral public disclosure (the "Review Period") to allow
Company to review and suggest revisions to the disclosure, and to determine
whether any Invention or its Confidential Information would be disclosed. If
Company reasonably determines that the proposed disclosure would reveal an
Invention or Company Confidential Information, then Company shall notify
University of such determination and its basis prior to the expiration of the
Review
11
<PAGE> 158
Period. With respect to disclosure of an Invention, the University agrees not to
submit the written publication or presentation of the oral public disclosure, or
otherwise disclose the Research Results in any manner that would compromise
Company's ability to obtain valid Patent Rights covering such Invention.
University shall not disclose Research Results and/or an Invention until one of
the following events occurs: (i) Company and University agree that no patentable
Invention exists; (ii) University or Company files a patent application claiming
the relevant Invention pursuant to Article 6; or (iii) Company and University,
jointly agree upon revisions that prevent disclosure of any Invention. With
respect to disclosure of Company Confidential Information, upon receipt of
notice by Company, the University agrees to delete such information from any
proposed disclosure. The foregoing notwithstanding, in the event that Sponsor
and/or its sublicensee notifies Principal Investigator and/or University that a
proposed publication of Research Results contains information which is of
substantial commercial importance to Sponsor and/or its sublicensee, Principal
Investigator and University shall delay the proposed publication, or any other
form of public disclosure of such information by Principal Investigator and/or
University, for a period not to exceed eighteen (18) months from the filing date
of the first patent application covering the information contained in the
proposed publication. In the event that Principal Investigator and/or
Institution notifies Sponsor of evidence that an independent third party is
preparing to publish, or otherwise publicly disclose, essentially the same
information as that contained in a proposed publication by Principal
Investigator and/or University which has been delayed by Sponsor, Sponsor will
seriously consider a request by Principal Investigator and/or University to
allow such delayed publication to occur on an expedited bases, provided that
absent written approval from Sponsor no such expedited publication shall occur.
For the avoidance of doubt, the Principal Investigator and/or University will be
free to publish on the samples and data collected and generated outside this
Agreement under MRC funding according to MRC policy. Such publication shall not
be subject to the terms of this agreement.
8. Term and Termination.
8.1. Term. This Agreement shall commence on the Effective Date and,
unless earlier terminated in accordance with the provisions of this Agreement
shall remain in effect on a country-by-country basis until the later of (i) the
expiration of all valid claims of issued patents within Patent Rights in such
country or (ii) for a period of ten (10) years after the first commercial sale
of Licensed Products or Licensed Services in such country.
8.2. Voluntary Termination by Company. Company shall have the right to
terminate this Agreement, for any reason, upon ninety (90) days prior written
notice to University.
8.3. Termination for Default. In the event that either party commits a
material breach of its obligations under this Agreement and fails to cure that
breach within sixty (60) days after receiving written notice thereof, the other
party may terminate this Agreement immediately upon written notice to the party
in breach.
12
<PAGE> 159
8.4. Force Majeure. Neither party will be responsible for delays
resulting from causes beyond the reasonable control of such party, including
without limitation fire, explosion, flood, war, strike, or riot, provided that
the nonperforming party uses commercially reasonable efforts to avoid or remove
such causes of nonperformance and continues performance under this Agreement
with reasonable dispatch whenever such causes are removed.
8.5. Effect of Termination. The following provisions shall survive the
expiration or termination of this Agreement: Articles 1 and 9; Sections 3.2.,
5.2. (obligation to provide final report and payment), 7.1., 7.2., 8.5., and
10.10. Upon the early termination of this Agreement, Company and its Affiliates
and Sublicensees may complete and sell any work-in-progress and inventory of
Licensed Products that exist as of the effective date of termination, provided
that (i) Company is current in payment of all amounts due University under this
Agreement, (ii) Company pays University the applicable royalty on such sales of
Licensed Products in accordance with the terms and conditions of this Agreement,
and (iii) Company and its Affiliates and Sublicensees shall complete and sell
all work-in-progress and inventory of Licensed Products within six (6) months
after the effective date of termination. Upon termination of this Agreement, any
sublicenses entered into by the Company hereunder shall be automatically
assigned to the University, and such sublicenses shall remain in full force and
effect in accordance with their terms.
9. Dispute Resolution.
9.1. Procedures Mandatory. The parties agree that any dispute arising
out of or relating to this Agreement shall be resolved solely by means of the
procedures set forth in this Article, and that such procedures constitute
legally binding obligations that are an essential provision of this Agreement;
provided, however, that all procedures and deadlines specified in this Article
may be modified by written agreement of the parties. If either party fails to
observe the procedures of this Article, as modified by their written agreement,
the other party may bring an action for specific performance in any court of
competent jurisdiction.
9.2. Dispute Resolution Procedures.
(a) Negotiation. In the event of any dispute arising out of or
relating to this Agreement, the affected party shall notify the other party, and
the parties shall attempt in good faith to resolve the matter within twenty-one
(21) days after the date such notice is received by the other party (the "Notice
Date"). Any disputes not resolved by good faith discussions shall be referred to
senior executives of each party, who shall meet at a mutually acceptable time
and location within thirty (30) days after the Notice Date and shall attempt in
good faith to negotiate a settlement.
13
<PAGE> 160
(b) Arbitration. If the matter remains unresolved within sixty
(60) days after the Notice Date, or the senior executives fail to meet within
thirty (30) after the Notice Date, either party may initiate arbitration upon
written notice to the other party, whereupon both parties shall be obligated to
engage in arbitration pursuant to this Section 9.2(b). All disputes arising in
connection with this Agreement shall be finally settled under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by one (1)
arbitrator appointed in accordance with said Rules. The place of arbitration
shall be London, England and the law applicable to the arbitration procedure
shall be determined by referring to the law of the place of arbitration. The
arbitrator shall determine the matters in dispute in accordance with the laws of
The Commonwealth of Massachusetts pursuant to Section 10.10 of this Agreement.
The English language shall be used throughout the arbitral proceedings. The
parties agree to exclude any right of application or appeal to the English
Courts in connection with any question of law arising in the course of the
arbitration or with respect to any award made. Notwithstanding the above, either
party has the right to bring suit in a court of competent jurisdiction against
the other party for any breach of the other party's duties of confidentiality
pursuant to Article 7 of this Agreement.
9.3. Preservation of Rights Pending Resolution.
(a) Performance to Continue. Each party shall continue to
perform its obligations under this Agreement pending final resolution of any
dispute arising out or relating to this Agreement; provided, however, that a
party may suspend performance of its obligations during any period in which the
other party fails or refuses to perform its obligations.
(b) Provisional Remedies. Although the procedures specified in
this Article are the sole and exclusive procedures for the resolution of
disputes arising out of and/or relating to this Agreement, either party may seek
a preliminary injunction or other provisional equitable relief in a court of
competent jurisdiction if, in its reasonable judgment, such action is necessary
to avoid irreparable harm to itself or to preserve its rights under this
Agreement.
(c) Statute of Limitations. The parties agree that all
applicable statutes of limitation and time-based defenses (such as estoppel and
laches) shall be tolled while the procedures set forth in Subsections 9.2.(a)
and 9.2(b) are pending. The parties shall take any actions necessary to
effectuate this result.
10. Miscellaneous.
10.1. Representations and Warranties.
University represents and warrants that (i) its employees have assigned
to University their entire right, title, and interest in the Research Results,
Project Materials and Patent Rights; (ii) it has not licensed, assigned or
otherwise granted, and is under no obligation to license, assign
14
<PAGE> 161
or grant, any right or interest in the Research Results, Project Materials, or
Patent Rights to any third party; (iii) it has the right to grant the rights
granted hereunder; (iv) the granting of such rights does not require the consent
of any third party; and (v) there are no outstanding agreements or encumbrances
inconsistent with the provisions of this Agreement.
UNIVERSITY MAKES NO OTHER WARRANTIES CONCERNING THE PATENT RIGHTS, RESEARCH
RESULTS, AND PROJECT MATERIALS, INCLUDING WITHOUT LIMITATION ANY EXPRESS OR
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Specifically, University makes no warranty or representation (i) regarding the
validity or scope of the Patent Rights, (ii) that the exploitation the Patent
Rights or any Licensed Product or Licensed Service will not infringe any patents
or other intellectual property rights of a third party, and (iii) that any third
party is not currently infringing or will not infringe the Patent Rights.
10.2. Authority to Enter Agreement. Each of the parties warrants and
represents to the other that it has the full right and authority to enter into
this Agreement, and that it is not aware of any impediment which would inhibit
its ability to perform the terms and conditions imposed on it by this Agreement.
10.3. Publicity Restrictions. Neither party shall use the name of the
other party or any of its trustees, officers, faculty, students, employees, or
agents, as the case may be or any adaptation of such names, or any terms of this
Agreement in any promotional material or other public announcement or disclosure
without the prior written consent of such other party. The foregoing
notwithstanding, Company shall have the right to disclose such information
without the consent of University in any document or filing required by
applicable securities laws or other applicable law or regulation.
10.4. Relationship of Parties. For the purposes of this Agreement, each
party is an independent contractor and not an agent or employee of the other
party. Neither party shall have authority to make any statements,
representations, or commitments of any kind, or to take any action which shall
be binding on the other party, except as may be explicitly provided for in this
Agreement or authorized in writing by the other party.
10.5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
10.6. Headings. All headings are for convenience only and shall not
affect the meaning of any provision of this Agreement.
10.7. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective permitted successors and
assigns.
15
<PAGE> 162
10.8. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that Company may
assign this Agreement to an affiliate or to a successor in connection with the
merger, consolidation, or sale of all or substantially all of its assets or that
portion of its business to which this Agreement relates.
10.9. Amendment and Waiver. This Agreement may be amended,
supplemented, or otherwise modified only by means of a written instrument signed
by the authorized officials of both parties. Any waiver of any rights or failure
to act in a specific instance shall relate only to such instance and shall not
be construed as an agreement to waive any rights or fail to act in any other
instance, whether or not similar.
10.10. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts irrespective of
any conflicts of law principles.
10.11. Notice. Any notices required or permitted under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
sent by hand, recognized national overnight courier, confirmed facsimile
transmission, confirmed electronic mail, or registered or certified mail,
postage prepaid, return receipt requested, to the following addresses or
facsimile numbers of the parties:
If to University:
The Director of Innovation and Research Support
University of Southampton
Highfield, Southampton S017 1BJ
England
Attention: Dr. Don P. Fox
Tel: (44) 01703 593095
Fax: (44) 01703 593585
If to Company:
Genome Therapeutics Corporation
100 Beaver Street
Waltham, Massachusetts 02154
Attention: Manager, Business Development
Invoices to: Comptroller
Tel: 617-893-5007
Fax: 617-893-8277
16
<PAGE> 163
All notices under this Agreement shall be deemed effective upon receipt. A party
may change its contact information immediately upon written notice to the other
party in the manner provided in this Section.
10.12. Severability. In the event that any provision of this Agreement
shall be held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this Agreement, and the
parties shall negotiate in good faith to modify the Agreement to preserve (to
the extent possible) their original intent. If the parties fail to reach a
modified agreement within sixty (60) days after the relevant provision is held
invalid or unenforceable, then the dispute shall be resolved in accordance with
the procedures set forth in Article 7. While the dispute is pending resolution,
this Agreement shall be construed as if such provision were deleted by agreement
of the parties.
10.13. Entire Agreement. Except for the Research Agreement, this
Agreement constitutes the entire agreement between the parties with respect to
its subject matter and supersedes all prior agreements or understandings between
the parties relating to its subject matter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
UNIVERSITY OF SOUTHAMPTON GENOME THERAPEUTICS CORPORATION
By: /s/ By: /s/
---------------------------- -----------------------------------
Title: Director IRS Title: V.P., Business Development
------------------------- --------------------------------
17
<PAGE> 164
EXHIBIT A
List of Patent Rights
Patent Rights
[to be completed]
18
<PAGE> 165
Exhibit E
ARBITRATION
The parties recognize that a bona fide dispute as to certain matters
may from time to time arise during the term of the Agreement. In the event of
the occurrence of any dispute, controversy or claim arising out of or relating
to the validity, construction, enforceability or performance of the Agreement
including disputes relating to an alleged breach or termination of the Agreement
it shall be settled by binding Alternative Dispute Resolution ("ADR") in the
manner set forth below; provided, however, that the neutral referred to below
shall give effect to the provisions of the Agreement and shall not adjust,
modify or change the effects of termination as set forth in the Agreement.
(a) If a party intends to begin an ADR to resolve a dispute, such party
shall provide written notice (the "ADR Request") by certified or registered mail
or properly documented overnight delivery to the other party informing such
other party of such intention and the issues to be resolved. The notice shall
explain the nature of the complaint and refer to the relevant sections of the
Agreement upon which the complaint is based. The complaining party shall also
set forth a proposed solution to the problem, including a suggested time frame
within which the parties must act.
(b) The non-complaining party must respond in writing within forty-five
(45) days of receiving notice with an explanation, including references to the
relevant provisions of the Agreement and a response to the proposed solution and
suggested time frame for action. The non-complaining party may add additional
issues to be resolved.
(c) Within fifteen (15) days of receipt of the response from the
non-complaining party, the parties shall meet and discuss options for resolving
the dispute. The complaining party must initiate the scheduling of this
resolution meeting. Each party shall make available appropriate personnel to
meet and confer with the other party within the fifteen (15) day period
following the complaining party's receipt of the response by the non-complaining
party.
(d) Any and all disputes that cannot be resolved pursuant to Paragraphs
(a), (b) and (c) shall be submitted to a neutral who shall be selected by mutual
agreement of the parties. If the parties are unable to agree upon a neutral,
then the neutral shall be selected in accordance with the procedures of the
American Arbitration Association. The neutral shall be an individual who shall
preside over and resolve any disputes between the parties. The neutral selected
shall be a former judge of a state or federal court and shall not be a current
or former employee, director or shareholder of, or otherwise have any current or
previous relationship with, either party or its respective affiliates. The ADR
shall be conducted in accordance with the rules of the American Arbitration
Association then in effect, subject to the time periods and other provisions of
this Exhibit or as otherwise set forth in the Agreement.
<PAGE> 166
(e) Consistent with the time schedule established pursuant to
Paragraphs (f) and (g) the neutral shall hold a hearing to resolve each of the
issues identified by the parties and shall render the award as expeditiously as
possible but in no event more than (30) days after the close of hearings. In
making the award the neutral shall rule on each disputed issue and shall be
based on in whole or in part the proposed ruling of one of the parties on each
disputed issue.
(f) During the meeting referred to in Paragraph (c), the parties shall
negotiate in good faith the scope and schedule of discovery, relating to
depositions, document production and other discovery devices, taking into
account the nature of the dispute submitted for resolution. If the parties are
unable to reach agreement as to the scope and schedule of discovery, the neutral
may order such discovery as he deems necessary. To the extent practicable taking
into account the nature of the dispute submitted for resolution, such discovery
shall be completed within sixty (60) days from the date of the selection of the
neutral. At the hearing, which shall commence within twenty (20) days after
completion of discovery unless the neutral otherwise orders, the parties may
present testimony (either live witness or deposition), subject to
cross-examination, and documentary evidence. To the extent practicable taking
into account the nature of the dispute submitted for resolution and the
availability of the neutral, the hearing shall be conducted over a period not to
exceed thirty (30) consecutive business days, with each party entitled to
approximately half of the allotted time unless otherwise ordered by the neutral.
In the event that GTC files the ADR Request pursuant to Paragraph (a) hereof,
then the hearing shall be conducted in Newark, New Jersey. In the event that SC
files the ADR Request pursuant to Paragraph (a) hereof, then the hearing shall
be conducted in Boston, Massachusetts. Each party shall have sole discretion
with regard to the admissibility of any evidence and all other matters relating
to the conduct of the hearing. The neutral shall, in rendering its decision,
apply the substantive law of Massachusetts. The decision of the neutral shall be
final and not appealable, except in the case of fraud or bad faith on the part
of the neutral or any party to the ADR proceeding in connection with the conduct
of such proceedings.
(g) At least twenty (20) business days prior to the date set for the
hearing, each party shall submit to each other party and the neutral a list of
all documents on which such party intends to rely in any oral or written
presentation to the neutral and a list of all witnesses, if any, such party
intends to call at such hearing and a brief summary of each witness' testimony.
At least five (5) business days prior to the hearing, each party must submit to
the neutral and serve on each other party a proposed findings of fact and
conclusions of law on each issue to be resolved. Following the close of
hearings, the parties shall each submit such post-hearing briefs to the neutral
addressing the evidence and issues to be resolved as may be required or
permitted by the neutral.
(h) Except as otherwise set forth herein, the neutral shall determine
the proportion in which the parties shall pay the costs and fees of the ADR,
except that each party shall pay its own costs (including, without limitation,
reasonable attorneys fees) and expenses in connection with such ADR; provided,
however, that if the neutral determines that the action of any party was
arbitrary, frivolous or in bad faith, the neutral may award such costs and
expenses to the prevailing party.
- 2 -
<PAGE> 167
(i) The ADR proceedings shall be confidential and, except as required
by law, neither party shall make (or instruct the neutral to make) any public
announcement with respect to the proceedings or decision of the neutral without
the prior written consent of the other party. The existence of any dispute
submitted by ADR, and the award of the neutral, shall be kept in confidence by
the parties and the neutral, except as required in connection with the
enforcement of such award or as otherwise required by applicable law.
(j) For the purposes of these arbitration provisions, the parties
acknowledge their diversity and agree to accept the jurisdiction of the Federal
District Court in Newark, New Jersey or Boston, Massachusetts (as selected by
the party seeking to enforce) for the purposes of enforcing awards entered
pursuant to these arbitration provisions and for enforcing the agreements
reflected in this Paragraph (j).
(k) Nothing contained herein shall be construed to permit the neutral
or any court or any other forum to award punitive, exemplary or any similar
damages. By entering into the Agreement and exercising their rights to
arbitrate, the parties expressly waive any claim for punitive, exemplary or any
similar damages. The only damages recoverable under this Agreement are
compensatory damages.
(l) The procedures specified herein shall be the sole and exclusive
procedures for the resolution of disputes between the parties which are
expressly identified for resolution in accordance with these arbitration
provisions.
- 3 -
