<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
JULY 1, 1998
-----------------------
(Date of Report)
IMMUNEX CORPORATION
---------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<CAPTION>
<S> <C> <C>
WASHINGTON 0-12406 51-0346580
- -----------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
</TABLE>
51 UNIVERSITY STREET, SEATTLE, WASHINGTON 98101
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(206) 587-0430
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
Immunex Corporation, a Washington corporation, together with its affiliates
("Immunex"), entered into a Product Rights Agreement, dated July 1, 1998 (the
"Agreement"), with American Home Products Corporation, a Delaware corporation
("AHP"), acting through its Wyeth-Ayerst Research division ("Wyeth-Ayerst") and
American Cyanamid Company, a Maine corporation and wholly-owned subsidiary of
AHP ("ACY"), acting through its Lederle Pharmaceutical division ("Lederle").
Pursuant to the Agreement, certain prior agreements among the parties are
terminated (as discussed below), and Immunex grants AHP an option to obtain
exclusive, royalty-bearing worldwide licenses to certain Immunex products for
all indications (the "Product Calls").
The Agreement terminates all provisions of the Research Agreement, dated as
of July 1, 1996, among Immunex, AHP and ACY (the "Research Agreement"), with the
exception of certain rights of first refusal held by AHP (as discussed below).
As a result, Immunex's $16 million (adjusted annually for inflation) annual
research payment obligation to Wyeth-Ayerst under the Research Agreement is
canceled. Immunex fully satisfied its 1998 and final payment obligation to AHP
by the payment of $8,258,033 through June 30, 1998. In addition, Immunex's
exclusive North American rights to certain oncology products resulting from
Wyeth-Ayerst research and development, and AHP's exclusive rights outside North
America to certain oncology products resulting from Immunex research and
development, are both terminated. Notwithstanding such termination, Immunex
retains its option to obtain exclusive North American rights to certain oncology
products resulting from Wyeth-Ayerst research and development that were
identified during the time Immunex supported such research and which are
accorded U.S. Investigational New Drug (IND) status by Wyeth-Ayerst from July 1,
1998 through December 31, 1998, on the same terms as are set forth in the
Research Agreement. In addition, because AHP has returned to Immunex the rights
held by AHP and its affiliates outside North America to Leukine(R)
(Sargramostim, GM-CSF), Mobist(TM) (FLT-3 ligand), and Interleukin-15 (IL-15),
Immunex holds worldwide rights to these products and will pay certain royalties
to AHP on any future sales outside North America of these products. AHP retains
certain rights of first refusal which had been set forth in the Research
Agreement. AHP may exercise these rights of first refusal if the Board of
Directors of Immunex determines that Immunex will not market a product or
technology by itself in any part of the world where Immunex has or acquires
marketing rights. AHP's right of first refusal applies to Immunex products and
technologies in all fields, including Interleukin-4 receptor (IL-4 receptor),
but does not apply to Leukine(R), FLT-3 ligand, IL-15, CD40 ligand and certain
other products.
PAGE 1
<PAGE>
The Agreement provides AHP with a Product Call for up to four Immunex
products over a period discussed below. The Agreement also provides that AHP
must exercise a Product Call for an Immunex product, if at all, within certain
time periods. Certain Immunex products are excluded from Product Calls,
including, but not limited to, IL-4 receptor, Enbrel(TM) (TNFR:Fc), CD40 ligand,
FLT-3 ligand, IL-15, Leukine(R), any product marketed by Immunex as of July 1,
1998, and certain other products.
Upon exercising a Product Call for an Immunex product, AHP and Immunex will
enter into an "Elected Product Agreement" granting AHP exclusive worldwide
rights (or if less than exclusive worldwide rights are held by Immunex, all of
Immunex's rights) to such product for all indications. Under the Elected
Product Agreement, AHP will commit to pay Immunex an initial fee, milestone
payments and certain royalties on any eventual worldwide net sales of the
product subject to the Product Call after regulatory approvals. The initial
fee, milestone payments and royalties are determined by the development stage of
the product when the Product Call is exercised. In the aggregate, the initial
fees and milestone payments range from $25 million if Immunex has formally
accorded the product U.S. IND status to $70 million after notice by Immunex to
AHP that data from the first positive Phase II clinical trial results are
available for the product. The royalties payable to Immunex also increase based
on the development stage of the product subject to the Product Call and based
upon such product attaining certain annual net sales thresholds.
Immunex has the right to retain all rights to up to two products for which
AHP has exercised Product Calls (each, a "Conversion Right") in exchange for
Immunex's commitment to pay certain milestone payments and royalties to AHP and,
in the case of a second Conversion Right only, an initial fee. The milestone
payments payable by Immunex are fixed at one-half the amount otherwise payable
by AHP, and the royalties paid by Immunex are in all cases fixed at the lowest
of the four levels of royalties otherwise payable by AHP. In the event Immunex
exercises one of its Conversion Rights for an Immunex product, which rights must
be exercised, if at all, within thirty days after AHP exercises one of its
Product Calls, Immunex and AHP will enter into a "Converted Product Agreement"
with respect to such product providing for such payments to AHP, unless AHP has
exercised its option to obtain a replacement Product Call (as discussed below).
Immunex may not exercise its Conversion Rights on both of the first two Product
Calls exercised by AHP. If Immunex exercises a Conversion Right, AHP may within
thirty days elect to obtain one replacement Product Call from Immunex, and by so
electing,
PAGE 2
<PAGE>
AHP waives its right to receive an initial fee (if applicable), milestone
payments and royalties from Immunex on such converted product. If either
Immunex or AHP exercises its rights under the Agreement and acquires or retains
rights to a product, as applicable, the exercising party will assume independent
development responsibility for the product, including all funding related
thereto.
The Agreement terminates the New Oncology Product License Agreement, dated
as of June 1, 1993 and as amended as of July 1, 1996, between Immunex and ACY,
pursuant to which Immunex had granted to ACY an exclusive license to make, have
made, use and sell outside North America certain oncology products resulting
from the research and development efforts of Immunex. As result of the
termination, the applicable oncology product rights outside North America
previously granted to ACY return to Immunex in exchange for royalty payments
from Immunex to AHP on future sales of Leukine(R), FLT-3 ligand, and IL-15
outside North America. The Agreement also terminated the FLT-3 Ligand License
and Development Agreement, effective as of July 1, 1996, between Immunex and
AHP, pursuant to which Immunex granted AHP exclusive rights to FLT-3 ligand
outside North America and AHP committed to paying Immunex a royalty equal to
five percent of the net sales outside North America.
AHP's rights to exercise additional Product Calls will terminate upon the
first to occur of the following events: (i) AHP has exercised Product Calls and
entered into Elected Product Agreements with respect to four Immunex products,
subject to Immunex's two Conversion Rights and AHP's replacement Product Call,
(ii) ten years after the effective date of the Agreement, with an additional
year if Immunex exercises both of its Conversion Rights, or (iii) upon the later
of five years after the effective date, or the date by which AHP has been
provided with an aggregate of eight Candidate Product Opportunities (as defined
in the Agreement) to exercise a Product Call, which number increases to nine
Candidate Product Opportunities in certain circumstances. AHP's rights of first
refusal to Immunex products and technologies will terminate upon the later of
(i) five years after the effective date of the Agreement or (ii) the date that
AHP or its affiliates ceases to be a majority shareholder of Immunex.
The agreements between the parties on Enbrel(TM) and TACE, an anti-
inflammatory drug target, are not affected by the Agreement.
PAGE 3
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
10.1/*/ Product Rights Agreement, dated July 1, 1998 (the "Agreement"), among
Immunex Corporation, American Home Products Corporation, acting through
its Wyeth-Ayerst Research division and American Cyanamid Company, acting
through its Lederle Pharmaceutical division.
- --------------------------------
/*/ Confidential portions of this exhibit have been omitted and have been filed
separately with the Securities and Exchange Commission pursuant to an
application for confidential treatment under Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.
PAGE 4
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IMMUNEX CORPORATION
Dated: July 1, 1998 By /s/ Edward V. Fritzky
---------------------------------
Edward V. Fritzky
Chairman and
Chief Executive Officer
PAGE 5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
10.1/*/ Product Rights Agreement, dated July 1, 1998 (the
"Agreement"), among Immunex Corporation, American
Home Products Corporation, acting through its
Wyeth-Ayerst Research division and American Cyanamid
Company, acting through its Lederle Pharmaceutical
division
</TABLE>
- --------------------------
/*/ Confidential portions of this exhibit have been omitted and have been filed
separately with the Securities and Exchange Commission pursuant to an
application for confidential treatment under Rule 24b-2 under the Securities
Exchange Act of 1934, as amended.
PAGE 6
<PAGE>
EXHIBIT 10.1
================================================================================
PRODUCT RIGHTS AGREEMENT
By and Among
the WYETH-AYERST RESEARCH division of
AMERICAN HOME PRODUCTS CORPORATION,
the LEDERLE PHARMACEUTICAL division of
AMERICAN CYANAMID COMPANY
and
IMMUNEX CORPORATION
Effective as of July 1, 1998
================================================================================
- -----------------
*Confidential Treatment Requested.
<PAGE>
TABLE OF CONTENTS
CONTENTS
<TABLE>
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ARTICLE 1. DEFINITIONS............................................................. 2
ARTICLE 2. TERMINATION OF CERTAIN EXISTING AGREEMENTS.............................. 16
ARTICLE 3. FORMER INOP ROYALTY PRODUCTS............................................ 18
ARTICLE 4. FORMER INOPS; COMBINATION STUDIES; DISCOVERY COLLABORATIONS............. 19
ARTICLE 5. PRODUCT CALLS........................................................... 20
ARTICLE 6. IMMUNEX'S CONVERSION RIGHTS; AHP'S REPLACEMENT PRODUCT CALL............. 29
ARTICLE 7. TRANSFER OF IMMUNEX TECHNOLOGY.......................................... 37
ARTICLE 8. AMENDED ROFR............................................................ 39
ARTICLE 9. CONFIDENTIALITY......................................................... 42
ARTICLE 10. REPRESENTATIONS AND WARRANTIES.......................................... 44
ARTICLE 11. INDEMNIFICATION......................................................... 45
ARTICLE 12. CURRENCY................................................................ 46
ARTICLE 13. TERM; TERMINATION....................................................... 47
ARTICLE 14. PUBLIC ANNOUNCEMENTS; USE OF NAMES...................................... 49
ARTICLE 15. INDEPENDENT PARTIES..................................................... 50
ARTICLE 16. EXPORT CONTROLS......................................................... 50
ARTICLE 17. MISCELLANEOUS........................................................... 50
</TABLE>
<PAGE>
EXHIBIT A SCHEDULE OF INITIAL FEES, MILESTONES AND ROYALTIES (Tables I and II)
EXHIBIT B CRITERIA FOR TRIGGERING AHP'S AMENDED ROFR TO "IMMUNEX TECHNOLOGY"
EXHIBIT C ROYALTY AGREEMENT
-2-
<PAGE>
PRODUCT RIGHTS AGREEMENT
THIS PRODUCT RIGHTS AGREEMENT (the "Agreement"), effective as of the 1st
---------
day of July, 1998, by and among AMERICAN HOME PRODUCTS CORPORATION, a
corporation organized and existing under the laws of the State of Delaware
("AHP"), acting through its Wyeth-Ayerst Research Division
---
("W-AR"), AMERICAN CYANAMID COMPANY, a corporation organized and existing
----
under the laws of Maine and a wholly-owned subsidiary of AHP ("ACY"), acting
---
through its Lederle Pharmaceutical (formerly Lederle Laboratories) division
("Lederle"), and IMMUNEX CORPORATION, a corporation organized and existing under
- ---------
the laws of the State of Washington, together with its Affiliates (as defined
herein) ("Immunex").
-------
WHEREAS, Immunex and ACY entered into that certain Research and Development
Agreement dated as of June 1, 1993 providing for, among other things, the
financial support by Immunex of oncology research and development by ACY and
their collaboration in oncology research and development on the terms and
conditions set forth therein; and
WHEREAS, Immunex and ACY entered into that certain Immunex New Oncology
Product License Agreement dated as of June 1, 1993 providing for, among other
things, ACY's rights to INOPs (as defined herein) in the Wyeth Territory (as
defined herein); and
WHEREAS, after AHP's acquisition of ACY in 1994, the oncology research and
development activities of ACY have been conducted by W-AR and Lederle
(collectively, "Wyeth"); and
-----
WHEREAS, Immunex, AHP and ACY terminated the Research and Development
Agreement and replaced it with the Research Agreement dated July 1, 1996
providing for, among other things, a specified level of annual financial support
by Immunex of oncology research and development by AHP, and defining Immunex's
rights to WNOPs (as defined herein) in the Immunex Territory (as defined
herein), and certain rights applicable to Immunex products and technologies as
set forth in Article 4 thereof, all on the terms and conditions set forth
therein; and
WHEREAS, Immunex and ACY entered into that certain Amendment No. 1 to
Immunex New Oncology Product License Agreement dated as of July 1, 1996
providing for, among other things, the global development of Elected INOPs (as
defined therein) on the terms and conditions set forth therein; and
<PAGE>
WHEREAS, AHP and Immunex entered into a FLT-3 Ligand License and
Development Agreement effective as of July 1, 1996 providing for, among other
things, the development and commercialization of FLT-3 Ligand (as defined
therein) in the Wyeth Territory on the terms and conditions set forth therein;
and
WHEREAS, the Parties (as defined herein) desire to terminate the Research
Agreement (as defined herein), the Amended INOP Agreement (as defined herein),
the FLT-3 Ligand Agreement (as defined herein), and certain other agreements,
and to replace such agreements with this Agreement on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties,
intending to be legally bound hereby, do hereby agree as follows:
ARTICLE 1. DEFINITIONS
The following terms, whether used in the singular or the plural, shall have
the meanings designated to them under this Article unless otherwise specifically
indicated.
1.1 "Affiliate" shall mean any corporation or business entity of which a Party
---------
owns directly or indirectly, fifty percent (50%) or more of the assets or
outstanding stock, or any corporation which a Party directly or indirectly
controls, or any parent corporation that owns, directly or indirectly,
fifty percent (50%) or more of the assets or outstanding stock of a Party
or directly or indirectly controls a Party. For purposes of this
Agreement, the Parties and their Affiliates shall not be deemed to be
Affiliates of each other.
1.2 "Allocable Cost" shall mean the following costs, which shall be determined
--------------
in accordance with allocation principles established by mutual agreement of
Immunex and AHP, and which shall be in accordance with generally accepted
accounting principles consistently applied:
(a) payroll direct labor, including taxes and benefits based on hours
captured by time reports, and direct charges;
(b) indirect supplies and department overhead, including indirect
department expenses that are allocated to projects based on the cost
of direct labor;
-2-
<PAGE>
(c) facility overhead, including rent, depreciation, utilities and
facilities support, all of which are allocated to projects based on
the cost of direct labor; and
(d) general overhead, including infrastructure services such as
purchasing, information systems, etc., all of which are allocated to
projects based on the cost of direct labor.
1.3 "Amended INOP Agreement" shall mean the Immunex New Oncology Product
----------------------
License Agreement, dated as of June 1, 1993, between Immunex and ACY, as
amended by Amendment No. 1 to Immunex New Oncology Product License
Agreement dated as of July 1, 1996.
1.4 "Amended ROFR" shall mean AHP's rights applicable to Covered Properties (as
------------
defined herein), as set forth in Article 8 hereof.
1.5 "BLA" shall mean a biologics license application, or any successor filing
---
thereto with the FDA, and shall be deemed to include any counterpart
regulatory filing with the EMEA.
1.6 "Calendar Quarter" shall mean each three (3)-month period commencing the
----------------
first day of January, April, July and October of each Calendar Year (as
defined herein).
1.7 "Calendar Year" shall mean each twelve (12)-month period commencing January
-------------
1 of each year after the Effective Date (as defined herein) through the end
of the Term (as defined herein) of this Agreement.
1.8 "Candidate Product Opportunity" shall mean, with respect to a Candidate
-----------------------------
Product, either that (a) AHP shall have requested and obtained Complete
Product Information (as defined herein) with respect to such Candidate
Product and been accorded time sufficient to exercise a Product Call (as
defined herein) for such Candidate Product as provided in Article 5 hereof
or (b) AHP shall have otherwise exercised a Product Call.
1.9 "Candidate Products" shall mean the Immunex Products (as defined herein)
------------------
for which AHP shall have a right to exercise a Product Call hereunder,
provided, however, that notwithstanding anything herein to the contrary,
AHP shall not have a right to exercise a Product Call with respect to any
Excluded Immunex Product (as defined herein).
-3-
<PAGE>
1.10 "Combination Products" shall mean any pharmaceutical or biological
--------------------
preparation in finished form that contains a particular Royalty Product (as
defined herein) in combination with one or more other active ingredients.
1.11 "Complete Product Information" shall mean complete Immunex information
----------------------------
with respect to a Candidate Product, including but not limited to, all
available pre-clinical and clinical safety, efficacy and other relevant
data, manufacturing information, information necessary to conduct patent
due diligence, and a disclosure of all noncancellable executory obligations
of Immunex under agreements with Third Parties (as defined herein) relating
to such Candidate Product.
1.12 "Confidential Information" shall mean any scientific, technical, trade or
------------------------
business information possessed, obtained by, developed for or given to the
disclosing Party which is treated by the disclosing Party as confidential
or proprietary including, without limitation, Materials (as defined
herein), formulations, techniques, methodology, assay systems, formulae,
procedures, tests, equipment, data, reports, know-how, sources of supply,
patent positioning, relationships with consultants and employees, business
plans and business developments, information concerning the existence,
scope or activities of any research, development, manufacturing, marketing
or other projects of the disclosing Party, and any other confidential
information about or belonging to the disclosing Party's suppliers,
licensors, licensees, partners, Affiliates, customers, potential customers
or others.
"Confidential Information" shall not include information that
(a) was known to the receiving Party at the time it was disclosed
hereunder, other than by previous disclosure by the disclosing Party,
as evidenced by the receiving Party's written records at the time of
such disclosure;
(b) is at the time of disclosure or later becomes publicly known under
circumstances involving no breach of this Agreement;
(c) is lawfully and in good faith made available to the receiving Party by
a Third Party who did not derive it, directly or indirectly, from the
disclosing Party; or
(d) the receiving Party can demonstrate was independently developed
without the use of the disclosing Party's Confidential Information.
-4-
<PAGE>
For purposes of illustration, the Confidential Information may be contained
in various media, including, without limitation, Complete Product
Information, Phase II Product Information (as defined herein), records of
research data and observations, records and results of preclinical and
clinical trials, patent applications, regulatory filings, computer
programs, manuals, plans, drawings, designs, specifications, supply and
customer lists, internal financial data and other documents and records of
the disclosing Party, whether or not labeled or identified as
"Confidential."
1.13 "Conversion Rights" shall mean Immunex's rights under Section 6.1 hereof.
-----------------
1.14 "Converted Product" shall mean a Candidate Product for which
-----------------
(a) AHP has exercised a Product Call,
(b) Immunex has exercised one of its Conversion Rights within the time
period applicable thereto, and
(c) the Parties have entered into a Converted Product Agreement (as
defined herein) as set forth in Section 6.1(a) hereof.
1.15 "Covered Properties" shall mean Immunex Products and Immunex Technology
------------------
(as defined herein), both of which are subject to the Amended ROFR (as
defined herein) set forth in Article 8 hereof. "Covered Property" shall
----------------
mean either Immunex Products or Immunex Technology, as the context
requires.
1.16 "Discovery Collaboration" shall mean any Immunex research collaboration
-----------------------
with a Third Party to identify New Product Leads (as defined herein),
including but not limited to, collaborations involving molecule screening,
rational drug design, genomics research, biological activity testing, or
creation of transgenics.
1.17 "Distributor" shall mean any Third Party that purchases a Royalty Product
-----------
in finished form (in final packaged form bearing the applicable Party's or
its Affiliate's tradedress) for resale in any part of the world.
1.18 "EMEA" shall mean the European Medicines Evaluation Agency, or any
----
successor agency.
1.19 "Effective Date" shall mean the effective date of this Agreement, which
--------------
shall be the date appearing at the beginning of this Agreement.
1.20 "Elected Product" shall mean a Candidate Product for which
---------------
-5-
<PAGE>
(a) AHP has exercised a Product Call,
(b) Immunex has not exercised one of its Conversion Rights within the time
period applicable thereto, and
(c) the Parties have entered into an Elected Product Agreement (as defined
herein) as set forth in Section 5.3(a) hereof.
1.21 "Excluded Immunex Products" shall mean the following products:
-------------------------
(a) the Former INOPs (as defined herein);
(b) any Paclitaxel Product (as defined herein);
(c) Interleukin-4 receptor, subject to Section 8.6 hereof;
(d) any drug product comprising tumor necrosis factor receptor, as defined
in the TNFR Agreement (as defined herein), including Enbrel (TNFR:Fc);
(e) Third Party Products (as defined herein);
(f) any product marketed by Immunex as of the Effective Date; and
(g) any Converted Product,
in each case including any Immunex Technology to the extent related
thereto, and also including all improvements, analogs, derivatives,
combination products, new approved indications or formulations, and also
including gene therapy products based on DNAs encoding such molecules.
1.22 "Excluded Wyeth Products" shall mean the following products:
-----------------------
(a) CMA-676;
(b) CMB-401;
(c) DRA-099;
(d) CYA-246;
(e) CCI-779 (formerly WAY-130779);
(f) EKI-785 (formerly CL-387785);
-6-
<PAGE>
(g) ERA-923 (formerly CYA-923); and
(h) any product resulting from the research and development of Monsanto
Company or its affiliates, or marketed by Monsanto Company or its
affiliates on or before January 1, 1999.
in each case including all improvements, analogs, derivatives, combination
products, new approved indications or formulations, and also including gene
therapy products based on DNAs encoding such molecules.
1.23 "Exercise Period" shall mean, with respect to a Candidate Product, the
---------------
first to occur of the following events:
(a) the ninety (90)-day period after receipt by AHP of Complete Product
Information, or
(b) if AHP has not requested Complete Product Information with respect to
such Candidate Product prior to the date Immunex provides a Product
Call Alert Notice (as defined herein) to AHP hereunder, the ninety
(90)-day period after the date by which Immunex has provided the
Product Call Alert Notice and Complete Product Information to AHP,
subject to Section 5.1(b) hereof.
1.24 "FDA" shall mean the U.S. (as defined herein) Food and Drug
---
Administration, or any successor entity thereto.
1.25 "FLT-3 Ligand Agreement" shall mean the FLT-3 Ligand License and
----------------------
Development Agreement between Immunex and AHP effective as of July 1, 1996.
1.26 "FLT-3 Ligand Products" shall mean any human health product having
---------------------
therapeutic and/or prophylactic effects on disease that includes a human
Flt-3 ligand polypeptide and is claimed by Immunex Granted Patents (as
defined herein) or Joint Granted Patents (as defined herein).
1.27 "First BLA/NDA Approval" shall mean the first BLA or NDA (as defined
----------------------
herein) approval by the FDA or the EMEA with respect to an Elected Product
or a Converted Product, as the case may be.
1.28 "First BLA/NDA Filing" shall mean the first BLA or NDA filing with the FDA
--------------------
or the EMEA with respect to an Elected Product or a Converted Product, as
the case may be, which filing is accepted for review by such regulatory
authority.
-7-
<PAGE>
1.29 "First Commercial Sale" shall mean the date on which a Royalty Product is
---------------------
delivered to a Third Party pursuant to a binding agreement of sale (which
may consist of an invoice acknowledging a purchase order) in the applicable
country following the date of regulatory approval of such Royalty Product
in such country or, if no such approval is required, following the date on
which a Party, or its Affiliate, licensee or sublicensee, as applicable,
determines to commercially launch such Royalty Product in such country.
1.30 "First Conversion Right" shall mean the first Conversion Right exercised
----------------------
by Immunex, if at all, in accordance with Section 6.1 hereof.
1.31 "Former INOPs" shall mean
------------
(a) CD40 ligand,
(b) FLT-3 Ligand,
(c) IL-15, and
(d) Leukine(R) (sargramostim, GM-CSF), Pixykine(R) (GM-CSF/IL-3 fusion
protein) and other GM-CSF fusion proteins,
in each case including any Immunex Technology related thereto, and also
including all improvements, analogs, derivatives, combination products, new
approved indications or formulations, and also including gene therapy
products based on DNAs encoding such molecules.
1.32 "Former INOP Royalty Products" shall mean
----------------------------
(a) FLT-3 Ligand Products,
(b) GM-CSF Products (as defined herein), and
(c) IL-15 Products (as defined herein).
1.33 "GM-CSF Products" shall mean any human health product having therapeutic
---------------
and/or prophylactic effects on disease that includes Sargramostim (as
defined herein).
1.34 "Governance Agreement" shall mean the Amended and Restated Governance
--------------------
Agreement among ACY, Lederle Oncology Corporation and Immunex Corporation
dated as of December 15, 1992, and shall be deemed to include
-8-
<PAGE>
the agreement between Immunex and AHP dated as of September 23, 1994
related to the protection of Immunex's rights under the Governance
Agreement.
1.35 "Granted Patents" shall mean any claims of an issued and unexpired Patent
---------------
(as defined herein) that has not been revoked or held unenforceable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction, or that remains unappealable or unappealed within the time
allowed for appeal, or that has not been disclaimed, denied or admitted to
be invalid or unenforceable through reissue, re-examination, disclaimer or
otherwise, and shall refer to patents owned solely by Immunex ("Immunex
-------
Granted Patents") or patents owned jointly by the Parties or their
---------------
Affiliates ("Joint Granted Patents"), however appropriate.
---------------------
1.36 "Health Care Market" shall mean end users of health care products, health
------------------
care professionals or treatment providers, hospitals, clinics, health
maintenance organizations, wholesalers, Distributors, manufacturers of
systems or equipment that incorporate Covered Properties as enabling
technology, operating components or reagents, and Third Parties who assist
in the sale, marketing or distribution of Covered Products other than by
co-promotion or co-marketing arrangements.
1.37 "IL-15 Products" shall mean any human health product having therapeutic
--------------
and/or prophylactic effects on disease that includes a human Interleukin-15
polypeptide and is claimed by Immunex Granted Patents or Joint Granted
Patents.
1.38 "IND" shall mean a U.S. Investigational New Drug Application, or any
---
successor filing thereto.
1.39 "IND Track Status" shall mean that
----------------
(a) Immunex has formally accorded a Candidate Product status as an IND-
track product, or
(b) Wyeth has formally accorded a WNOP status as an IND-track product,
as the case may be, or the equivalent status under any subsequent product
development system or organization as may be adopted by the Parties from
time to time.
1.40 "Immunex Intellectual Property" shall mean, with respect to an Elected
-----------------------------
Product, Immunex Patents (as defined herein), Immunex's interest in Joint
Patents and Immunex Technology.
-9-
<PAGE>
1.41 "Immunex New Oncology Product" or "INOP" shall have the meaning accorded
---------------------------- ----
thereto in the Amended INOP Agreement.
1.42 "Immunex Patents" shall mean all Immunex Granted Patents and patent
---------------
applications and any Third Party patents and patent applications in which
Immunex has a licensable interest, that are necessary in order to develop,
make, have made, use, import, offer for sale or sell a particular Royalty
Product, and any reissues, re-examinations, continuations, continuations-
in-part, divisions, renewals, extensions, patents of addition, and any
extension of the term of the patent or supplementary protection certificate
or other means by which greater effective patent protection is extended
that exist as of the Effective Date of or are issued or filed at any time
during the Term of this Agreement.
1.43 "Immunex Products" shall mean all products heretofore or hereafter
----------------
discovered, developed or acquired by Immunex other than the Former INOPs
and the Paclitaxel Products. Immunex Products shall exclude any product to
the extent that Immunex cannot grant rights to AHP hereunder due to
preexisting agreements entered into prior to December 15, 1992. However,
should Immunex have any such rights returned to it, Immunex shall notify
AHP of the extent to which the returned rights allow that product to be
deemed an Immunex Product.
1.44 "Immunex Technology" shall mean all technical data, and business and other
------------------
commercial information relating to Immunex Products that are owned or
controlled by Immunex and for which Immunex has a right to disclose or
license to AHP hereunder, including techniques, discoveries, inventions,
processes, know-how, Materials, regulatory data and information of any kind
including pre-clinical and clinical experimental results, and any other
information reasonably necessary to permit AHP to develop, make, have made,
use, import, offer for sale or sell an Immunex Product in accordance with
the terms hereof as either an Elected Product or a Covered Property, as the
case may be, in whatever form kept and whether or not such information is
patentable, copyrightable, or subject to trademark protection, and whether
or not such aforementioned intellectual property protection has been
sought.
1.45 "Immunex Territory" shall mean North America (as defined herein).
-----------------
1.46 "Joint Patents" shall mean all Joint Granted Patents and patent
-------------
applications of which AHP and/or its Affiliates is a joint owner with
Immunex, as determined by the patent laws of the applicable country or as
otherwise expressly provided for by the Parties, that are necessary in
order to make, have made, use, import, offer for sale or sell a particular
Royalty Product, and any reissues, re-
-10-
<PAGE>
examinations, continuations, continuations-in-part, divisions, renewals,
extensions, patents of addition, and any extension of the term of the
patent or supplementary protection certificate or other means by which
greater effective patent protection is extended that exist as of the
Effective Date of or are issued or filed at any time during the Term of
this Agreement.
1.47 "Manufacturing Cost" shall mean, for each quantity of an Elected Product,
------------------
the cost to Immunex for direct raw materials, direct labor (salary and
benefits), reasonable overhead charges relating to the manufacture and
quality control testing of such Elected Product, delivery charges for such
Elected Product, and other direct and allocable indirect costs to
manufacture such Elected Product, including but not limited to, royalties
to any Third Party on licensed technology, manufacturing charges for
inventory adjustments, for offgrade or defective material, handling losses,
physical adjustments, salvage and start-up, all such costs and charges to
be calculated on a basis consistent with then current methods and practices
applied to all other products manufactured by the manufacturing party, as
the case may be, at the facility or facilities used for production plus
appropriately allocated manufacturing general and administrative costs
determined by allocation principles established by mutual agreement of the
Parties which shall be in accordance with generally accepted accounting
principles, consistently applied. If an Elected Product is manufactured by
a Third Party, the Manufacturing Cost shall be the amount payable to the
Third Party on arm's-length dealing with such Third Party plus any costs
needed to complete manufacture and quality control testing of such Elected
Product, and delivery charges for such Elected Product. Manufacturing Cost
shall not include capital costs (other than depreciation), or opportunity
costs for contract manufacturing.
1.48 "Market Launch" shall mean, on a country-by-country basis, the First
-------------
Commercial Sale of a Royalty Product in that country.
1.49 "Materials" shall include, without limitation, compounds, culture media,
---------
DNA, RNA, and fragments thereof, genes and other nucleotide constructs,
plasmids, vectors, development strains, expression systems, cells, cell
lines, organisms, antibodies, hybridomas, clones, peptides, protein
compositions, colonies, animal models, promoters, epitopes, microorganisms
and any other biological substances, as well as the information embodied
therein, that are necessary in developing, manufacturing, using, marketing
or selling an Immunex Product or Immunex Technology in accordance with the
terms hereof, as the case may be.
-11-
<PAGE>
1.50 "NDA" shall mean a new drug application, or any successor filing thereto
---
with the FDA, and shall be deemed to include any counterpart regulatory
filing with the EMEA.
1.51 "Net Sales" shall mean the gross invoice price of a particular Royalty
---------
Product sold by a Party, its Affiliates, sublicensees, Distributors or
other designees to a Third Party after deducting, if not already deducted
in the amount invoiced:
(a) the standard inventory cost (actual acquisition cost) of devices used
for dispensing or administering such Royalty Product and that
accompany such Royalty Product as it is sold;
(b) then normal or customary trade, cash, and/or quantity discounts;
(c) returns, allowances, free goods, rebates and chargebacks;
(d) retroactive price reductions applicable to sales of such Royalty
Product;
(e) fees paid to Distributors, selling agents (excluding any sales
representatives of a Party or any of its Affiliates), group purchasing
organizations and managed care entities;
(f) sales taxes, excise taxes, tariffs and duties; and
(g) two percent (2%) of the amount invoiced to cover bad debt, freight or
other transportation costs, insurance charges, additional special
packaging, and other governmental charges.
1.52 "New Product Lead" shall mean an Immunex Product, or a compound, molecule
----------------
or substance owned or controlled by Immunex for which a pharmacological or
therapeutic utility has been demonstrated in an in vitro or in vivo
-------- -------
experiment.
1.53 "North America" shall mean the U.S. and Canada.
-------------
1.54 "Paclitaxel Products" shall mean any drug product comprising paclitaxel.
-------------------
1.55 "Party" or "Parties" shall mean Immunex, AHP and/or ACY, as the context
----- -------
requires. For purposes of this Agreement, AHP and ACY shall be deemed the
same Party unless otherwise specified herein.
1.56 "Patents" shall mean Immunex Patents and Joint Patents.
-------
-12-
<PAGE>
1.57 "Phase I" shall mean, with respect to a Candidate Product, Elected
-------
Product, Converted Product or Covered Property, the period of product
development commencing with enrollment of the first patient in a clinical
trial of such Candidate Product, Elected Product, Converted Product or
Covered Property, as the case may be, and ending upon commencement of Phase
II (as defined herein), where the clinical trial is sponsored by a Party or
its Affiliates or sublicensees.
1.58 "Phase II" shall mean, with respect to a Candidate Product, Elected
--------
Product, Converted Product or Covered Property, the period of product
development commencing with enrollment of the first patient in a clinical
trial designed to assess safety and efficacy of such Candidate Product,
Elected Product, Converted Product or Covered Property, as the case may be,
that is not a Phase III (as defined herein) trial, and ending upon
commencement of Phase III, where the clinical trial is sponsored by a Party
or its Affiliates or sublicensees.
1.59 "Phase II Product Information" shall mean data from the first placebo-
----------------------------
controlled or otherwise appropriately controlled Phase II clinical trial
that demonstrates safety and statistically significant efficacy of a
Candidate Product or a Third Party Product, as the case may be, in a
patient group appropriate for the indication studied.
1.60 "Phase III" shall mean, with respect to a Candidate Product, Elected
---------
Product, Converted Product or Covered Property, the period of product
development commencing with enrollment of the first patient in a placebo-
controlled or otherwise appropriately controlled clinical trial that is
sized to demonstrate product efficacy, pivotal clinical trial, or other
clinical trial intended to demonstrate efficacy for registration of such
Candidate Product, Elected Product, Converted Product or Covered Property,
as the case may be, and ending upon filing of a BLA/NDA, where the clinical
trial is sponsored by a Party or its Affiliates or sublicensees.
1.61 "Product Call" shall mean AHP's right to exercise an option to acquire
------------
exclusive worldwide rights (or, if less than exclusive worldwide rights are
held by Immunex, all of Immunex's rights) to develop, make, have made, use,
market, distribute, import, offer for sale and sell a Candidate Product for
all indications. "Product Call" shall also be deemed to include AHP's
Replacement Product Call (as defined herein).
1.62 "Product Call Alert Notice" shall mean the written notice provided by
-------------------------
Immunex to AHP in accordance with Section 5.1 hereof that the Phase II
Product Information is available with respect to a Candidate Product.
-13-
<PAGE>
1.63 "Product Call Termination Event" shall mean the first occurrence of any of
------------------------------
the following events, in which case AHP's right to exercise additional
Product Calls shall immediately terminate:
(a) AHP shall have exercised Product Calls and entered into Elected
Product Agreements with Immunex as set forth in Section 5.3(a) hereof
with respect to four (4) Candidate Products, subject to Section 6.1(g)
hereof with respect to Immunex's Conversion Rights and AHP's
Replacement Product Call, respectively;
(b) Upon the tenth (10th) anniversary of the Effective Date, provided
however, that in the event that Immunex shall have exercised its
Second Conversion Right (as defined herein), then upon the eleventh
(11th) anniversary of the Effective Date; or
(c) Upon the later of
(1) the fifth (5th) anniversary of the Effective Date, or
(2) the date by which AHP shall have been provided with an aggregate
of eight (8) Candidate Product Opportunities, provided, however,
that in the event AHP exercises its Replacement Product Call and
at the time of such exercise AHP has been provided at least six
(6) Candidate Product Opportunities (out of the 8 Candidate
Product Opportunities), then AHP shall receive one additional
Candidate Product Opportunity, and this provision shall
thereafter refer to the date by which AHP shall have been
provided with an aggregate of nine (9) Candidate Product
Opportunities.
1.64 "Replacement Product Call" shall mean AHP's right, which may be
------------------------
exercisable with respect to one Conversion Right only, to have Immunex
grant AHP a replacement Product Call in accordance with Section 6.1(f)
hereof.
1.65 "Research Agreement" shall mean the Research Agreement among Immunex, AHP
------------------
and ACY dated as of July 1, 1996.
1.66 "Royalty Product" shall mean any of the following products:
---------------
(a) any Former INOP Royalty Product;
(b) any Elected Product; and
-14-
<PAGE>
(c) any Converted Product, except as otherwise provided in Section 6.1(f)
hereof.
1.67 "Sargramostim" shall mean the GM-CSF Product licensed by the FDA under
------------
License No. 1132.
1.68 "Second Conversion Right" shall mean the second Conversion Right
-----------------------
exercised by Immunex, if at all, in accordance with Section 6.1 hereof.
1.69 "TNFR Agreement" shall mean the TNFR License and Development Agreement
--------------
between AHP and Immunex dated as of July 1, 1996.
1.70 "Term" shall have the meaning set forth in Section 13.1(c) hereof.
----
1.71 "Third Party" shall mean any party other than Immunex, AHP, ACY and their
-----------
respective Affiliates.
1.72 "Third Party Product" shall mean any product acquired or licensed by
-------------------
Immunex from a Third Party that is acquired after Phase II Product
Information for such product is available.
1.73 "U.S." shall mean the United States of America, its territories and
----
possessions, and the Commonwealth of Puerto Rico.
1.74 "Wyeth New Oncology Products" or "WNOPs" shall have the meaning accorded
--------------------------- -----
thereto in the Research Agreement.
1.75 "Wyeth Territory" shall mean all of the countries of the world except
---------------
North America.
1.76 Each of the following definitions are found in the Agreement as indicated:
<TABLE>
<CAPTION>
Section
------------------
<S> <C>
"Amended ROFR Term" 13.1(b)
-----------------
"Converted Product Agreement" 6.1(a)
---------------------------
"Defaulting Party" 13.2(a)
----------------
"Elected Product Agreement" 5.3(a)
-------------------------
"Immunex Granted Patents" 1.35
-----------------------
"Indemnitee" 11.3
----------
"Indemnitor" 11.3
----------
"Insolvent Party" 13.2(b)(1)
---------------
"Joint Granted Patents" 1.35
---------------------
"Liabilities" 11.1
-----------
</TABLE>
-15-
<PAGE>
<TABLE>
<S> <C>
"License Right" 2.1(c)
-------------
"Nondefaulting Party" 13.2(a)
-------------------
"Product Call Term" 13.1(a)
-----------------
"ROFR" 2.1(b)
----
"Royalty Agreement" 3.1(a)
-----------------
"TACE" 17.12
----
</TABLE>
ARTICLE 2. TERMINATION OF CERTAIN EXISTING AGREEMENTS
2.1 Termination of Research Agreement; Amended ROFR; Immunex's Right to WNOPs.
-------------------------------------------------------------------------
(a) Termination of Research Agreement. As of the Effective Date, (1) the
---------------------------------
Research Agreement and all licenses and other rights granted or
conveyed therein shall terminate, except as set forth in Section
2.1(b) and (c) below and in Paragraph 8.06 of the Research Agreement
and (2) Immunex shall cease funding of all oncology research and
development by Wyeth and its Affiliates thereunder. Immunex has paid
AHP a total of Eight Million Two Hundred Fifty-Eight Thousand Thirty-
Three Dollars ($8,258,033) in funding for such oncology research and
development for the period from January 1, 1998 through June 30, 1998.
Such payment amount fully satisfies Immunex's payment obligations
under Article 3 of the Research Agreement.
(b) Amended ROFR. Wyeth's rights under Article 4 of the Research
------------
Agreement (the "ROFR") are hereby amended and restated in the Amended
----
ROFR as set forth in Article 8 hereof. Except as set forth in Section
8.6 below, nothing in this Agreement shall be deemed to nullify or
rescind any actions taken by the Parties under the Research Agreement
with respect to the ROFR.
(c) Immunex Right to Obtain Exclusive License to WNOPs. In consideration
--------------------------------------------------
for payments made by Immunex in support of Wyeth Internal Oncology
Discovery (as defined in the Research Agreement) prior to the
Effective Date, AHP hereby grants and agrees to grant to Immunex the
right as set forth in Article 2 of the Research Agreement to obtain an
exclusive license in the Immunex Territory with respect to any WNOP
formally accorded IND Track Status by Wyeth after the Effective Date
and on or before December 31, 1998 that was identified by Wyeth prior
to the Effective Date and during the period Immunex supported Wyeth
Internal Oncology Discovery (a "License Right"). Immunex shall have
-------------
the right to exercise its option to obtain such
-16-
<PAGE>
exclusive license in the Immunex Territory in accordance with Article
2 of the Research Agreement. It is expressly understood and agreed
that no Excluded Wyeth Products shall be subject to a License Right.
The terms of Immunex's right to obtain an exclusive license shall be
those terms that applied to WNOPs prior to termination of the Research
Agreement.
2.2 Termination of Amended INOP Agreement.
-------------------------------------
(a) Termination of Amended INOP Agreement. As of the Effective Date, the
-------------------------------------
Amended INOP Agreement and all licenses and other rights granted or
conveyed therein shall terminate and be of no further force or effect,
thereby eliminating AHP's vested rights to all past, present and
future INOPs outside North America, except as set forth in Article 3
below with respect to the Former INOP Royalty Products.
(b) Return of Registration Dossiers. Within a reasonable period of time
-------------------------------
after the Effective Date, AHP shall return or cause to be returned to
Immunex or its designee any and all registration dossiers for any INOP
in any part of the Wyeth Territory, including any supporting
documentation and other records and media related thereto. In
addition, AHP and its applicable Affiliates shall reasonably cooperate
with Immunex or its designee with respect to the transfer of any such
registration dossiers with applicable regulatory authorities, as well
as provide any additional assistance reasonably requested by Immunex
or its designee with respect to any other pertinent transitional
matters related thereto. Immunex shall reimburse AHP for any
reasonable and necessary out-of-pocket expenses incurred by AHP in
returning such materials to Immunex and providing any such additional
assistance requested hereunder.
2.3 Termination of FLT-3 Ligand Agreement. As of the Effective Date, the FLT-3
-------------------------------------
Ligand Agreement and all licenses and other rights granted or conveyed
therein shall terminate and be of no further force or effect, thereby
eliminating AHP's rights to FLT-3 Ligand outside North America, except as
set forth in Article 3 below with respect to FLT-3 Ligand Products (i.e.,
----
as one of the Former INOP Royalty Products). The Parties shall reconcile
any amounts owed to one another for shared development costs incurred
through the Effective Date in accordance with the provisions in Section
3.05 of the FLT-3 Ligand Agreement within thirty (30) days of receipt of an
invoice for the reconciled amounts. In addition, Immunex shall assume all
reasonable, noncancellable executory obligations of AHP under agreements
with any Third Parties relating to AHP's
-17-
<PAGE>
development of FLT-3 Ligand in Europe that had been authorized by the Joint
Project Development Team (as defined in the FLT-3 Ligand Agreement). As
soon as possible after the Effective Date, AHP shall provide Immunex with a
listing of any such executory obligations, including any agreements related
thereto.
2.4 Termination of Ex-Vivo Agreement. As of the Effective Date, the Ex-Vivo
--------------------------------
Agreement between Immunex and ACY dated as of January 1, 1997 and all
licenses and other rights granted or conveyed therein shall terminate and
be of no further force or effect. The parties to the Ex-Vivo Agreement
hereby acknowledge and agree that, notwithstanding anything in the Ex-Vivo
Agreement to the contrary, the last sentence in Paragraph 8 of the Ex-Vivo
Agreement providing for certain residual payments to ACY shall also
terminate and be of no further force or effect.
2.5 Termination of Materials Transfer Agreement and Confidentiality Agreement.
-------------------------------------------------------------------------
As of the Effective Date, (a) the Materials Transfer Agreement between
Immunex and AHP dated as of September 1, 1995 and all licenses and other
rights granted or conveyed therein shall terminate and be of no further
force or effect and (b) the Confidentiality Agreement between Immunex and
ACY dated as of June 1, 1993 shall terminate and be of no further force and
effect, provided, however, that any obligations of confidentiality and
nonuse arising under such Materials Transfer Agreement or such
Confidentiality Agreement shall continue and shall be superseded by the
confidentiality and nonuse provisions of this Agreement.
ARTICLE 3. FORMER INOP ROYALTY PRODUCTS
3.1 Royalty Agreement on Former INOP Royalty Products. As soon as practicable
-------------------------------------------------
after the Effective Date, the Parties shall enter into a "Royalty
-------
Agreement" substantially in the form attached hereto as Exhibit C, under
--------- ---------
which Immunex would pay or cause to be paid to ACY an earned royalty, on a
country-by-country basis, of [ * ] percent ([ * ]%) on Immunex's and its
licensees' quarterly Net Sales in the Wyeth Territory of any of the Former
INOP Royalty Products, such royalties to begin on the date of Market Launch
of any such Former INOP Royalty Product in a specific country within the
Wyeth Territory. The Royalty Agreement shall provide that such royalties
shall be payable with respect to each Former INOP Royalty Product until the
later of (a) expiration of the last Granted Patent in such country that
covers the manufacture, use or sale of the applicable Former INOP Royalty
Product, but in no event longer than twenty (20) years from the Effective
Date or (b) ten
- -----------------
*Confidential Treatment Requested.
-18-
<PAGE>
(10) years from the date of the Market Launch of the applicable Former INOP
Royalty Product in such country.
ARTICLE 4. FORMER INOPS; COMBINATION STUDIES;
DISCOVERY COLLABORATIONS
4.1 Development of Former INOPs. Subject to Section 4.2 below, Immunex shall
---------------------------
be free to develop and commercialize the Former INOPs worldwide, alone or
with one or more collaborators, licensees or otherwise, without any further
obligation of any kind to AHP or its Affiliates under this Agreement,
except for the royalty obligation set forth in Article 3 above with respect
to Former INOP Royalty Products.
4.2 Combination Studies. Immunex and AHP shall discuss, on a case-by-case
-------------------
basis, the advisability of conducting preclinical or clinical studies of
the Former INOPs in combination with one or more AHP products. If Immunex
and AHP agree that such studies have scientific or clinical merit, AHP and
Immunex shall negotiate in good faith the terms of a collaborative research
or development program to determine whether any one or more of the
molecules in question have value when combined. If the results of the
research or development program are positive, the Parties shall each have
the right to add labeling to their respective products indicating the use
in combination. In the event that AHP exercises a Product Call for a
Candidate Product and Immunex is interested in conducting preclinical or
clinical studies of such Candidate Product in combination with another
Immunex product, AHP and Immunex shall proceed as set forth in this Section
4.2. Immunex will not, itself or together with a Third Party, conduct or
authorize a Third Party to conduct animal or human studies involving [ * ]
and one or more Immunex products (including the Excluded Immunex Products)
in combination. The immediately preceding sentence shall not apply to
studies conducted by academic investigators to whom Immunex provides
research reagents at no cost.
4.3 Discovery Collaborations. Immunex shall be free to contract or otherwise
------------------------
collaborate with Third Parties to establish Discovery Collaborations. The
formation and negotiation of Discovery Collaborations shall be exempt from
the Amended ROFR, provided that Immunex shall not enter into any agreement
that conflicts with the Amended ROFR with respect to Immunex Technology or
a New Product Lead or Candidate Product that Immunex owns or controls prior
to commencement of a Discovery Collaboration or acquires as a result of a
Discovery Collaboration. However, to the extent that Immunex has rights in
- -----------------
*Confidential Treatment Requested.
-19-
<PAGE>
products resulting from Discovery Collaborations, AHP's Amended ROFR and
Product Call rights hereunder shall attach to such products.
ARTICLE 5. PRODUCT CALLS
AHP is hereby granted the Product Call rights, as more fully set forth
below.
5.1 Candidate Products; Complete Product Information.
------------------------------------------------
(a) Non-confidential Information on Candidate Products. Immunex shall
--------------------------------------------------
present AHP with information concerning each Candidate Product at the
time that Immunex accords IND Track Status to such Candidate Product,
and shall update such information at the same time as Immunex conducts
its periodic research reviews (but in no event less than 3 times per
complete Calendar Year) until such time as AHP shall have exercised or
waived a Product Call with respect to such Candidate Product. Such
information shall be in a format to be agreed upon by the Parties, and
shall consist of non-confidential information (together with
information necessary to conduct patent due diligence, which if non-
public may be provided to AHP counsel only on a confidential basis).
(b) Complete Product Information. AHP shall have the right to obtain
----------------------------
Complete Product Information with respect to each Candidate Product,
provided, however, that except as set forth in Section 5.2(b) below,
such right shall only be exercised one time per Candidate Product.
Such right may be exercised with respect to any Candidate Product at
any time after Immunex accords IND Track Status to such Candidate
Product and until sixty (60) days after Immunex has provided AHP with
the Product Call Alert Notice that the Phase II Product Information is
available with respect to such Candidate Product. At AHP's written
request, Immunex shall provide AHP with the Phase II Product
Information with respect to such Candidate Product if Immunex has not
already done so. If AHP's right to obtain Complete Product
Information with respect to a Candidate Product has not been exercised
within such sixty (60)-day period after the Product Call Alert Notice
has been provided to AHP hereunder, then the Exercise Period
applicable to the Product Call set forth in Section 1.23(b) hereof
with respect to such Candidate Product shall expire at the end of the
ninety (90)-day period after Immunex provides the Product Call Alert
Notice to AHP with respect to such Candidate Product.
5.2 Exercise Period for Product Call.
--------------------------------
-20-
<PAGE>
(a) Activities During the Exercise Period. AHP shall elect whether to
-------------------------------------
exercise or waive a Product Call with respect to a Candidate Product
within the Exercise Period applicable to such Candidate Product.
AHP's election to exercise a Product Call shall be exercised, if at
all, by providing written notice thereof to Immunex within the
Exercise Period. Subject to Section 5.2(b) below, if AHP's notice of
election has not been received by Immunex within the Exercise Period,
the Product Call for such Candidate Product shall be deemed to have
been waived by AHP. During the Exercise Period applicable to a
Candidate Product with respect to which AHP has requested Complete
Product Information, Immunex shall provide all updated information
with respect to such Candidate Product as may be available and shall
respond to questions presented by AHP using available data and patent
information. Immunex shall not be obligated to conduct additional
biological or pharmacological experiments, or research in animals or
humans, or conduct additional patent or legal research or obtain legal
opinions to respond to AHP questions during the Exercise Period.
(b) Product Call Following Abandonment of Indication. In the event that
------------------------------------------------
(1) Immunex discontinues clinical trials of a Candidate Product for
an indication after having provided a Product Call Alert Notice
to AHP with respect to such indication that resulted in AHP's
waiver of the Product Call with respect to such Candidate
Product, resulting in abandonment of development for such
indication, and
(2) Immunex thereafter commences clinical trials of such Candidate
Product for a new indication that are continued, and
(3) subject to the Amended ROFR, Immunex has not subsequently
licensed the Candidate Product or new indication for such
Candidate Product to a Third Party,
Then AHP's Product Call rights shall reattach at the time when Immunex
commences clinical trials of such Candidate Product for such new indication
and shall be exercisable one final time with respect to such Candidate
Product until the time specified in Section 1.23 hereof. Immunex shall
provide written notice to AHP once Immunex has commenced clinical trials of
such Candidate Product for such new indication, and thereafter AHP shall be
entitled to obtain the information with respect to such Candidate Product
as set forth in Section 5.1 above. Notwithstanding anything herein to the
contrary, for purposes of
-21-
<PAGE>
Section 1.63(c)(ii) hereof, no more than one Candidate Product Opportunity
shall be counted for such Candidate Product.
5.3 Exercise of Product Call; Elected Product Agreement.
---------------------------------------------------
(a) Elected Product Agreement. If AHP exercises a Product Call with
-------------------------
respect to a Candidate Product, and Immunex has not exercised one of
its Conversion Rights within the time period set forth in Section
6.1(a) hereof, then as soon thereafter as practicable, Immunex and AHP
shall enter into a definitive "Elected Product Agreement" granting AHP
-------------------------
exclusive worldwide rights (or, if less than exclusive worldwide
rights are held by Immunex, all of Immunex's rights) under the
applicable Immunex Intellectual Property to develop, make, have made,
use, market, distribute, import, offer for sale and sell such
Candidate Product for all indications in consideration of AHP's
payment to Immunex of the initial fee set forth in Table I of Exhibit
-------
A hereto, plus AHP's obligation to pay milestone payments and
-
royalties to Immunex as set forth below in Tables I and II of Exhibit
-------
A hereto, respectively. Upon execution of such Elected Product
-
Agreement, which shall contain the terms and conditions set forth
below, including the definitions set forth above with respect to Net
Sales and other defined terms included below, and such other terms and
conditions that are customary for similar types of transactions, such
Candidate Product shall thereafter be identified as an Elected Product
for purposes of this Agreement unless otherwise specified herein.
(1) Initial Fees, Milestones and Royalties.
--------------------------------------
(i) The Elected Product Agreement shall provide that the initial
fees, milestones and royalties payable by AHP to Immunex
shall be determined by reference to the Candidate Product's
development status as of the time AHP exercises its Product
Call, as indicated in Tables I and II of Exhibit A hereto,
---------
respectively. By way of example only, if a Candidate Product
is in Phase II (but prior to a Product Call Alert Notice)
when AHP exercises its Product Call, then the initial fee
would be Ten Million Dollars ($10,000,000), and the following
milestones would thereafter be payable to Immunex as set
forth in Column C of Table I of Exhibit A hereto: Ten Million
---------
Dollars ($10,000,000) when the Elected Product enters Phase
III, Ten Million Dollars ($10,000,000) for the First
-22-
<PAGE>
BLA/NDA Filing for the Elected Product, and
Twenty Million Dollars ($20,000,000) for the First BLA/NDA
Approval for the Elected Product. In addition, royalties
for such Elected Product would range from [ * ] percent
([ * ]%) to [ * ] percent ([ * ]%) on various annual Net
Sales increments, and the maximum Third Party royalty credit
would be [ * ] percent ([ * ]%), in each case as set forth
in Column C of Table II of Exhibit A hereto. The Elected
---------
Product Agreement shall provide that AHP shall pay Immunex
each applicable initial fee and milestone within thirty (30)
days after the event giving rise to such payment.
(ii) If less than worldwide rights to a Candidate Product are
granted to AHP pursuant to a Product Call hereunder, the
initial fees and milestones set forth in Table I in Exhibit
-------
A hereto which shall be included in the Elected Product
-
Agreement shall be reduced by the following percentages for
such Candidate Product:
(A) U.S. not included -- [ * ] percent ([ * ]%) discount;
(B) Europe not included -- [ * ] percent ([ * ]%) discount;
or
(C) Japan not included -- [ * ] percent ([ * ]%) discount.
(2) Payment of Royalties to Immunex on Elected Products.
---------------------------------------------------
(i) Royalties on Net Sales of Elected Products. The Elected
------------------------------------------
Product Agreement shall provide that AHP shall pay or cause
to be paid to Immunex an earned royalty, on a country-by-
country basis, at the rates set forth in the applicable
column of Table II of Exhibit A hereto, on AHP's, its
---------
Affiliates' and sublicensees' quarterly Net Sales in any
part of the world of any Elected Product, such royalties to
begin on the date of Market Launch of such Elected Product
in a specific country. Such royalties shall be payable
until the later of (A) expiration of the last Granted Patent
in such country that covers the manufacture, use or sale of
such Elected Product or (B)
- -----------------
*Confidential Treatment Requested.
-23-
<PAGE>
ten (10) years from the date of the Market Launch of such
Elected Product in such country.
(3) Third Party Royalty Credit. The Elected Product Agreement shall
--------------------------
provide that royalties payable by AHP to Immunex under Section
5.3(a)(1)(i) above may be reduced by up to the percentages
indicated in the applicable column of Table II of Exhibit A
---------
hereto under "Maximum Third Party Royalty Credit" for royalties
paid in respect of dominating patents owned or controlled by
Third Parties. Notwithstanding the foregoing, however, AHP shall
only be permitted to claim a Third Party royalty credit on
royalties otherwise payable to Immunex hereunder if AHP
reasonably determines, after good faith discussions with Immunex,
that AHP is required to pay royalties to such Third Party because
the manufacture, use, importation, offer for sale or sale of the
Elected Product using the Immunex Technology licensed to AHP
hereunder in a particular country would, but for the Third Party
license, infringe a valid and enforceable patent or other
intellectual property right of such Third Party in such country.
(4) Reimbursement for Third Party Payments. The Elected Product
--------------------------------------
Agreement shall also provide that AHP shall (i) reimburse Immunex
for any and all amounts paid by Immunex to any Third Party or
Third Parties to acquire rights in a Candidate Product for which
a Product Call is exercised by AHP, which amounts shall be
allocated reasonably and in good faith to the Candidate Product
by Immunex as appropriate, (ii) pay Immunex such amounts
referenced in subsection (i) above within thirty (30) days after
receiving an invoice for such amounts, and (iii) assume all
reasonable, noncancellable executory obligations of Immunex under
agreements that are in effect as of the exercise of such Product
Call with such Third Party or Third Parties relating to the
acquisition of rights to such Candidate Product and such other
agreements relating to such Candidate Product referenced in
Section 7.1(b) hereof.
(5) Royalty Reports. The Elected Product Agreement shall provide
---------------
that AHP and/or its Affiliates or sublicensees, as applicable,
shall keep true accounts of Net Sales of the Elected Product, and
deliver to Immunex, within sixty (60) calendar days after the end
of each Calendar Quarter a written account, including quantities,
-24-
<PAGE>
of Net Sales of such Elected Product, broken down on a country-
by-country basis, that are subject to earned royalty payments
thereunder.
(6) Royalty Payments. The Elected Product Agreement shall provide
----------------
that with each accounting required by Section 5.3(a)(5) above,
AHP and/or its Affiliates or sublicensees, as applicable, shall
also provide to Immunex, without deduction except where expressly
permitted by this Agreement, all earned royalty payments due for
the Calendar Quarter for which the accounting is made.
(7) Currency Conversion. The Elected Product Agreement shall provide
-------------------
that payments by AHP or its Affiliates or sublicensees, as
applicable, shall be made to Immunex in U.S. dollars. For
converting any royalty payments on Net Sales made in a currency
other than U.S. dollars, Net Sales shall first be determined in
the currency of the country in which they are earned and shall be
converted each Calendar Quarter into an account in U.S. dollars
at the average of the bid and ask prices reported in the Wall
----
Street Journal as of the close of the last business day of such
--------------
Calendar Quarter in which such royalty is due. If the last day
of such Calendar Quarter is not a business day, then the closest
preceding business day shall be used for such calculation. All
such converted Net Sales shall be consolidated with U.S. Net
Sales for each Calendar Quarter and the applicable royalty
payable determined therefrom. If by law, regulation or fiscal
policy of a particular country, remittance of royalties in U.S.
dollars is restricted or forbidden, notice thereof will be
promptly given to Immunex, and payment of the royalty shall be
made by the deposit thereof in local currency to the credit of
Immunex in a recognized banking institution designated by Immunex
or its licensees, as applicable. When in any country a law or
regulation prohibits both the transmittal and deposit of
royalties on sales in such a country, royalty payments shall be
suspended for as long as such prohibition is in effect and as
soon as such prohibition ceases to be in effect, all royalties
that AHP or its Affiliates or sublicensees would have been under
obligation to transmit or deposit but for the prohibition, shall
forthwith be deposited or transmitted promptly to the extent
allowable. The actual currency conversion calculations by AHP or
its Affiliates or sublicensees for any country for a particular
Calendar Quarter
-25-
<PAGE>
shall be included in the royalty report provided to Immunex for
such Calendar Quarter under Section 5.3(a)(5) above.
(8) Withholding Taxes. The Elected Product Agreement shall provide
-----------------
that Immunex shall pay any and all taxes levied on account of, or
measured exclusively by, royalties it receives under such Elected
Product Agreement. If applicable laws or regulations require
that taxes be withheld from royalties payable under such Elected
Product Agreement, AHP or its Affiliates or sublicensees, as
applicable, shall (i) deduct such taxes from the remittable
royalty, (ii) timely pay such taxes to the proper taxing
authority, and (iii) send proof of such tax payment, if
available, to Immunex within sixty (60) days following such
payment. AHP agrees to take reasonable efforts to minimize such
taxes to Immunex.
(9) Combination Products.
--------------------
(i) The Elected Product Agreement shall provide that royalties
due on sales of any Combination Product shall 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
Elected Product if sold separately, and B is the total
invoice price of any other active component or components in
the combination, if sold separately by or on behalf of the
Party selling such Elected Product.
(ii) The Elected Product Agreement shall provide that, if the
other active component or components in the combination are
not sold separately by or on behalf of the Party selling
such Elected Product, then Net Sales, for the purpose of
determining royalties on the Combination Product, shall be
calculated by multiplying actual Net Sales of such
Combination Product by the fraction A/C, where A is the
invoice price of the Elected Product if sold separately and
C is the invoice price of the Combination Product.
(iii) The Elected Product Agreement shall provide that, if
neither the Elected Product nor the Combination Product is
sold separately by the applicable Party, Net Sales for
purposes of determining royalties on the Combination
-26-
<PAGE>
Product shall be calculated as above except that the Parties
shall allocate values to the components A and B based upon a
good faith determination of the respective contributions of
such components to the market value of the Combination
Product.
(10) Internal Sales. The Elected Product Agreement shall provide that
--------------
sales between AHP and its Affiliates or sublicensees, or among
its Affiliates and sublicensees, shall not be subject to
royalties, but in such cases royalties shall be calculated upon
AHP's, its Affiliates' or sublicensees' quarterly Net Sales to a
Third Party.
(11) One Royalty. The Elected Product Agreement shall provide that
-----------
the obligation to pay royalties shall be imposed only once with
respect to the same unit of an Elected Product.
(12) Samples. The Elected Product Agreement shall provide that no
-------
royalties shall accrue on disposition of reasonable quantities of
the Elected Product for no charge as samples or donations to
Third Parties.
(13) Records. The Elected Product Agreement shall provide that AHP or
-------
its Affiliates or sublicensees, as applicable, shall keep and
maintain, in accordance with generally accepted accounting
principles, proper and complete records and books of account
documenting all sales of the Elected Product in each part of the
world for a period of at least three (3) years following the end
of each Calendar Year. At Immunex's request and expense, AHP or
its Affiliates or sublicensees, as applicable, shall permit an
independent public accountant selected by Immunex to have access,
not more than once in any consecutive four (4) Calendar Quarters,
to such books and records of AHP or its Affiliates or
sublicensees, as applicable, for the sole purpose of determining
the correctness of all calculations of Net Sales and royalties
reported by AHP or its Affiliates or sublicensees hereunder;
provided, however, if such independent public accountant
reasonably determines that such royalties have been, for any
Calendar Quarter, after normal adjustments, understated by AHP or
its Affiliates or sublicensees by an amount equal to or greater
than ten percent (10%), AHP or its Affiliates or sublicensees, as
applicable, shall, in addition to remitting the royalty
underpayment to Immunex with interest thereon as set forth in
-27-
<PAGE>
Section 12.1 hereof, pay all reasonable fees and disbursements
incurred by such independent public accountant in the course of
making such determination. Immunex shall provide at least twenty
(20) days' prior notice before such inspection and all such
inspections shall be conducted during normal business hours.
Upon the expiration of three (3) years following the end of any
Calendar Year, the calculation of royalties in respect of such
Calendar Year shall be binding and conclusive upon Immunex.
Immunex agrees that any such independent public accountant shall
be subject to an obligation to maintain any information reviewed
in confidence.
(14) Diligence Requirements. The Elected Product Agreement shall
----------------------
provide that the Elected Product shall be diligently developed
and commercialized using commercially reasonable efforts, which
shall mean efforts and resources equivalent to those employed by
AHP to develop, manufacture or market products owned by AHP
having similar market potential at a similar stage in the product
life cycle, taking into account the establishment of such Elected
Product in the marketplace, the competitiveness of alternative
products, the proprietary position of such Elected Product, the
likelihood of regulatory approval, the profitability of such
Elected Product, and other relevant factors, to be determined on
a market-by-market basis for such Elected Product.
(15) Diligence Reporting Requirements. The Elected Product Agreement
--------------------------------
shall provide that AHP shall keep Immunex reasonably informed of
current development activities with respect to the Elected
Product, by providing Immunex with a written annual report
detailing the status of such development activities for the
previous Calendar Year, and in general summarizing AHP's efforts
and progress made towards commercialization of the Elected
Product. Each annual report shall be submitted to Immunex within
sixty (60) days after the conclusion of each applicable Calendar
Year during the term of such Elected Product Agreement. Such
annual reports shall be in a format mutually agreed upon by the
Parties, and such reports shall include information listing any
ongoing clinical trials as well as the regulatory filing status
of the Elected Product.
-28-
<PAGE>
5.4 Excluded Immunex Products. Notwithstanding anything herein to the
-------------------------
contrary, AHP shall not have a right to exercise a Product Call with
respect to any Excluded Immunex Products.
5.5 Relationship of Right to Exercise a Product Call to Amended ROFR. Waiver
----------------------------------------------------------------
of AHP's right to exercise a Product Call with respect to a Candidate
Product shall not result in a waiver of AHP's rights to such Candidate
Product under the Amended ROFR.
5.6 Duration of Product Calls. All of AHP's rights to exercise additional
-------------------------
Product Calls shall terminate upon the occurrence of a Product Call
Termination Event.
ARTICLE 6. IMMUNEX'S CONVERSION RIGHTS; AHP'S REPLACEMENT PRODUCT CALL
6.1 Immunex's Conversion Rights; Converted Product Agreement.
--------------------------------------------------------
(a) Conversion Rights; Converted Product Agreement. Immunex shall have
----------------------------------------------
two Conversion Rights, which shall be identified as the First
Conversion Right and the Second Conversion Right. Immunex shall have
the option to exercise a Conversion Right with respect to each of two
(2) Product Calls by providing written notice to AHP within thirty
(30) days after AHP's exercise of the applicable Product Call. In the
event Immunex exercises a Conversion Right with respect to a Candidate
Product within such thirty (30)-day period after AHP's exercise of a
Product Call with respect to such Candidate Product, Immunex shall
retain all rights to such Candidate Product, subject to the applicable
obligations set forth in this Agreement (including Article 8), which
shall thereafter be identified as a Converted Product. If Immunex
exercises one of its Conversion Rights on a Candidate Product, and AHP
has not elected its option to obtain its Replacement Product Call
within the time period set forth in Section 6.1(f) hereof, then as
soon thereafter as practicable, Immunex and AHP shall enter into a
definitive "Converted Product Agreement" with respect to such
---------------------------
Converted Product, which shall include the terms set forth in Section
6.1(b) or (c) below, as applicable, and the terms set forth in Section
6.3 below, including the definitions set forth above with respect to
Net Sales and other defined terms included below, and such other terms
and conditions as are customary for similar types of transactions. If
Immunex exercises one of its Conversion Rights on a Candidate Product,
thereby converting such Candidate Product to a Converted Product, and
AHP subsequently elects its Replacement Product Call within the time
period applicable thereto, then in such
-29-
<PAGE>
event Immunex and AHP shall not enter into a Converted Product
Agreement with respect to such Converted Product.
(b) Financial Terms Applicable to First Conversion Right. As a condition
----------------------------------------------------
to the exercise of the First Conversion Right, unless AHP has
exercised its option to obtain a Replacement Product Call as set forth
in Section 6.1(f) below, the Converted Product Agreement shall provide
that Immunex shall make the following payments to AHP:
(1) one-half the applicable milestones indicated in Table I of
Exhibit A hereto; and
---------
(2) royalties at the rates set forth in Column A of Table II of
Exhibit A hereto (including the offset for third party royalties
---------
set forth in Column A).
The milestone payments in Section 6.1(b)(1) above shall be
determined by reference to the Converted Product's development status
as of the time AHP exercised its Product Call with respect to such
Converted Product (i.e., while it was still a Candidate Product). No
----
initial fee shall be payable in respect of the exercise of the First
Conversion Right. By way of example only, if a Candidate Product is
in Phase II (but prior to a Product Call Alert Notice) when AHP
exercises its Product Call, and Immunex thereafter exercises its First
Conversion Right with respect to such Candidate Product, then an
initial fee would not be payable to AHP, but the following milestones
would thereafter be payable to AHP as set forth in Column C of Table I
of Exhibit A hereto: Five Million Dollars ($5,000,000) when the
---------
Elected Product enters Phase III, Five Million Dollars ($5,000,000)
for the First BLA/NDA Filing for the Elected Product, and Ten Million
Dollars ($10,000,000) for the First BLA/NDA Approval for the Elected
Product. In addition, royalties for such Elected Product would range
from [ * ] percent ([ * ]%) to [ * ] percent ([ * ]%) on various
annual Net Sales increments, and the maximum third party royalty
credit would be [ * ] percent ([ * ]%), in each case as set forth in
Column A of Table II of Exhibit A hereto.
---------
(c) Financial Terms Applicable to Second Conversion Right. As a condition
-----------------------------------------------------
to the exercise of the Second Conversion Right, unless AHP has
exercised its option to obtain a Replacement Product Call as set forth
in Section 6.1(f) below, the Converted Product Agreement shall provide
that Immunex shall make the following payments to AHP:
- -----------------
*Confidential Treatment Requested.
-30-
<PAGE>
(1) the applicable initial fee in Table I of Exhibit A hereto;
---------
(2) one-half the applicable milestones indicated in Table I of
Exhibit A hereto; and
---------
(3) royalties at the rates set forth in Column A of Table II of
Exhibit A hereto (including the offset for third party royalties
---------
set forth in Column A).
The initial fee and milestone payments in Section 6.1(c)(1)
and (2) above shall be determined by reference to the Converted
Product's development status as of the time AHP exercised its Product
Call with respect to such Converted Product (i.e., while it was still
----
a Candidate Product).
(d) Less than Worldwide Rights Available. If less than worldwide rights
------------------------------------
to a Converted Product are available to Immunex pursuant to a
Conversion Right hereunder, the Converted Product Agreement shall
include a reduction of any initial fee and milestones otherwise due to
AHP as set forth in Section 6.1(b) or (c) above, as applicable,
according to the following percentages for such Converted Product:
(1) U.S. not included -- [ * ] percent ([ * ]%) discount;
(2) Europe not included -- [ * ] percent ([ * ]%) discount; or
(3) Japan not included -- [ * ] percent ([ * ]%) discount.
(e) Limitation on Exercisability of Second Conversion Right.
-------------------------------------------------------
Notwithstanding anything herein to the contrary, the Second Conversion
Right shall not be exercisable by Immunex prior to the time that (1)
AHP shall have exercised at least one Product Call and (2) Immunex
shall not have exercised a Conversion Right with respect to the
Candidate Product that was subject to such Product Call within the
thirty (30)-day period after AHP's exercise of such Product Call.
(f) AHP's Replacement Product Call Option. At AHP's option, which option
-------------------------------------
shall be exercisable only once and in any event within thirty (30)
days following AHP's receipt of notice of Immunex's exercise of either
the First Conversion Right or the Second Conversion Right, as the case
may be, Immunex shall grant AHP a Replacement Product Call in lieu of
Immunex's payment of an initial fee (with respect to the Second
Conversion Right only), milestones and royalties with respect to the
- -----------------
*Confidential Treatment Requested.
-31-
<PAGE>
Converted Product. AHP's option may be exercised by providing written
notice thereof to Immunex within such period. If AHP's notice of
exercise of such option to obtain a Replacement Product Call has not
been received by Immunex within the thirty (30)-day period after
Immunex's exercise of the applicable Conversion Right, the Replacement
Product Call option shall be deemed to have been waived by AHP with
respect to such Conversion Right. The Replacement Product Call shall
not be exercisable with respect to the Converted Product that was the
subject of the Conversion Right that resulted in AHP's exercise of its
Replacement Product Call. Thus, if AHP exercises its option to obtain
a Replacement Product Call as set forth above, Immunex shall retain
all rights to the Converted Product that was the subject of the
Conversion Right with no further obligation of any kind to AHP or its
Affiliates under this Agreement other than the Amended ROFR, including
but not limited to, payment of an initial fee, milestones and
royalties.
(g) Relationship of Conversion Rights and Replacement Product Call to
-----------------------------------------------------------------
Specified Product Call Termination Event.
----------------------------------------
(1) In the event Immunex exercises only its First Conversion Right
and AHP does not exercise its option to obtain its Replacement
Product Call, the Product Call Termination Event referred to in
Section 1.63(a) hereof shall be deemed to refer to three (3)
Candidate Products instead of four (4) Candidate Products.
(2) In the event Immunex exercises its First Conversion Right and its
Second Conversion Right, and AHP does not exercise its option to
obtain its Replacement Product Call with respect to either the
First Conversion Right or the Second Conversion Right, the
Product Call Termination Event referred to in Section 1.63(a)
hereof shall be deemed to refer to two (2) Candidate Products
instead of four (4) Candidate Products.
(3) In the event Immunex exercises only its First Conversion Right
and AHP exercises its option to obtain its Replacement Product
Call, the Product Call Termination Event referred to in Section
1.63(a) hereof shall still refer to four (4) Candidate Products.
(4) In the event Immunex exercises its First Conversion Right and its
Second Conversion Right, and AHP exercises its option to obtain
its Replacement Product Call with respect to either the First
-32-
<PAGE>
Conversion Right or the Second Conversion Right, the Product Call
Termination Event referred to in Section 1.63(a) hereof shall be
deemed to refer to three (3) Candidate Products instead of four
(4) Candidate Products.
6.2 Relationship of Conversion Right to Amended ROFR. If Immunex exercises a
------------------------------------------------
Conversion Right, the Amended ROFR shall be applicable to the Converted
Product that was the subject of such Conversion Right.
6.3 Additional Terms in Converted Product Agreement.
-----------------------------------------------
(a) Royalties on Net Sales of Converted Products. The Converted Product
--------------------------------------------
Agreement shall provide that Immunex shall pay or cause to be paid to
AHP an earned royalty, on a country-by-country basis, at the rates set
forth in Column A of Table II of Exhibit A hereto on Immunex's and its
---------
licensees' quarterly Net Sales in any part of the world of the
Converted Product, such royalties to begin on the date of Market
Launch of such Converted Product in a specific country. Such
royalties shall be payable until the later of (1) expiration of the
last Granted Patent in such country that covers the manufacture, use
or sale of such Converted Product, but in no event longer than twenty
(20) years from the Effective Date or (2) ten (10) years from the date
of the Market Launch of such Converted Product in such country.
(b) Third Party Royalty Credit. The Converted Product Agreement shall
--------------------------
provide that royalties payable by Immunex to AHP under Section 6.3(a)
above may be reduced by up to the percentages indicated in Column A of
Table II of Exhibit A hereto under "Maximum Third Party Royalty
---------
Credit" for royalties paid in respect of dominating patents owned or
controlled by third parties. Notwithstanding the foregoing, however,
Immunex shall only be permitted to claim a third party royalty credit
on royalties otherwise payable to AHP hereunder if Immunex reasonably
determines, after good faith discussions with AHP, that Immunex is
required to pay royalties to such third party because the manufacture,
use, importation, offer for sale or sale of the Converted Product in a
particular country would, but for the third party license, infringe
any patent or other intellectual property rights of such third party
in such country.
(c) Royalty Reports. The Converted Product Agreement shall provide that
---------------
Immunex and/or its licensees, as applicable, shall keep true accounts
of Net Sales of the Converted Product, and deliver to the AHP, within
sixty
-33-
<PAGE>
(60) calendar days after the end of each Calendar Quarter a written
account, including quantities, of Net Sales of such Converted Product,
broken down on a country-by-country basis, that are subject to earned
royalty payments thereunder.
(d) Royalty Payments. The Converted Product Agreement shall provide that
----------------
with each accounting required by Section 6.3(c) above, Immunex or its
licensees, as applicable, shall also provide to AHP, without deduction
except where expressly permitted by this Agreement, all earned royalty
payments due for the Calendar Quarter for which the accounting is
made.
(e) Currency Conversion. The Converted Product Agreement shall provide
-------------------
that payments by Immunex or its licensees, as applicable, shall be
made to AHP in U.S. dollars. For converting any royalty payments on
Net Sales made in a currency other than U.S. dollars, Net Sales shall
first be determined in the currency of the country in which they are
earned and shall be converted each Calendar Quarter into an account in
U.S. dollars at the average of the bid and ask prices reported in the
Wall Street Journal as of the close of the last business day of such
-------------------
Calendar Quarter in which such royalty is due. If the last day of
such Calendar Quarter is not a business day, then the closest
preceding business day shall be used for such calculation. All such
converted Net Sales shall be consolidated with U.S. Net Sales for each
Calendar Quarter and the applicable royalty payable determined
therefrom. If by law, regulation or fiscal policy of a particular
country, remittance of royalties in U.S. dollars is restricted or
forbidden, notice thereof will be promptly given to AHP, and payment
of the royalty shall be made by the deposit thereof in local currency
to the credit of AHP in a recognized banking institution designated by
AHP or its Affiliates or sublicensees, as applicable. When in any
country a law or regulation prohibits both the transmittal and deposit
of royalties on sales in such a country, royalty payments shall be
suspended for as long as such prohibition is in effect and as soon as
such prohibition ceases to be in effect, all royalties that Immunex or
its licensees would have been under obligation to transmit or deposit
but for the prohibition, shall forthwith be deposited or transmitted
promptly to the extent allowable. The actual currency conversion
calculations by Immunex or its licensees for any country for a
particular Calendar Quarter shall be included in the royalty report
provided to AHP for such Calendar Quarter under Section 6.3(c) above.
-34-
<PAGE>
(f) Withholding Taxes. The Converted Product Agreement shall provide that
-----------------
AHP shall pay any and all taxes levied on account of, or measured
exclusively by, royalties it receives under such Converted Product
Agreement. If applicable laws or regulations require that taxes be
withheld from royalties payable under such Converted Product
Agreement, Immunex or its licensees, as applicable, shall (i) deduct
such taxes from the remittable royalty, (ii) timely pay such taxes to
the proper taxing authority, and (iii) send proof of such tax payment,
if available, to AHP within sixty (60) days following such payment.
Immunex agrees to take reasonable efforts to minimize such taxes to
AHP.
(g) Combination Products.
--------------------
(1) The Converted Product Agreement shall provide that royalties due
on sales of any Combination Product shall 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 Converted
Product if sold separately, and B is the total invoice price of
any other active component or components in the combination, if
sold separately by or on behalf of the Party selling such
Converted Product.
(2) The Converted Product Agreement shall provide that, if the other
active component or components in the combination are not sold
separately by or on behalf of the Party selling such Converted
Product, then Net Sales, for the purpose of determining royalties
on the Combination Product, shall be calculated by multiplying
actual Net Sales of such Combination Product by the fraction A/C,
where A is the invoice price of the Converted Product if sold
separately and C is the invoice price of the Combination Product.
(3) The Converted Product Agreement shall provide that, if neither
the Converted Product nor the Combination Product is sold
separately by the applicable Party, Net Sales for purposes of
determining royalties on the Combination Product shall be
calculated as above except that the Parties shall allocate values
to the components A and B based upon a good faith determination
of the respective contributions of such components to the market
value of the Combination Product.
-35-
<PAGE>
(h) Internal Sales. The Converted Product Agreement shall provide that
--------------
sales among Immunex and its licensees shall not be subject to
royalties, but in such cases royalties shall be calculated upon
Immunex's or its licensees' quarterly Net Sales to a Third Party.
(i) One Royalty. The Converted Product Agreement shall provide that the
-----------
obligation to pay royalties shall be imposed only once with respect to
the same unit of a Converted Product.
(j) Samples. The Converted Product Agreement shall provide that no
-------
royalties shall accrue on disposition of reasonable quantities of the
Converted Product for no charge as samples or donations to Third
Parties.
(k) Records. The Converted Product Agreement shall provide that Immunex or
-------
its licensees, as applicable, shall keep and maintain in accordance
with generally accepted accounting principles, proper and complete
records and books of account documenting all sales of the Converted
Product in any part of the world for a period of at least three (3)
years following the end of each Calendar Year. At AHP's request and
expense, Immunex or its licensees, as applicable, shall permit an
independent public accountant selected by AHP to have access, not more
than once in any consecutive four (4) Calendar Quarters, to such books
and records of Immunex or its sublicensees, as applicable, for the
sole purpose of determining the correctness of all calculations of Net
Sales and royalties reported by Immunex or its sublicensees hereunder;
provided, however, if such independent public accountant reasonably
determines that such royalties have been, for any Calendar Quarter,
after normal adjustments, understated by Immunex or its licensees by
an amount equal to or greater than ten percent (10%), Immunex or its
licensees, as applicable, shall, in addition to remitting the royalty
underpayment to AHP with interest thereon as set forth in Section 12.1
hereof, pay all reasonable fees and disbursements incurred by such
independent public accountant in the course of making such
determination. AHP shall provide at least twenty (20) days' prior
notice before such inspection and all such inspections shall be
conducted during normal business hours. Upon the expiration of three
(3) years following the end of any Calendar Year, the calculation of
royalties in respect of such Calendar Year shall be binding and
conclusive upon AHP. AHP agrees that any such independent public
accountant shall be
-36-
<PAGE>
subject to an obligation to maintain any information reviewed in
confidence.
(l) Diligence Requirements. The Converted Product Agreement shall provide
----------------------
that the Converted Product shall be diligently developed and
commercialized using commercially reasonable efforts, which shall mean
efforts and resources equivalent to those employed by Immunex to
develop, manufacture or market products owned by Immunex having
similar market potential at a similar stage in the product life cycle,
taking into account the establishment of such Converted Product in the
marketplace, the competitiveness of alternative products, the
proprietary position of such Converted Product, the likelihood of
regulatory approval, the profitability of such Converted Product, and
other relevant factors, to be determined on a market-by-market basis
for such Converted Product.
(m) Diligence Reporting Requirements. The Converted Product Agreement
--------------------------------
shall provide that Immunex shall keep AHP reasonably informed of
current development activities with respect to the Converted Product,
by providing AHP with a written annual report detailing the status of
such development activities for the previous Calendar Year, and in
general summarizing Immunex's efforts and progress made towards
commercialization of the Converted Product. Each annual report shall
be submitted to AHP within sixty (60) days after the conclusion of
each applicable Calendar Year during the term of such Converted
Product Agreement. Such annual reports shall be in a format mutually
agreed upon by the Parties, and such reports shall include information
listing any ongoing clinical trials as well as the regulatory filing
status of the Converted Product.
ARTICLE 7. TRANSFER OF IMMUNEX TECHNOLOGY
7.1 Transfer of Immunex Technology; Third Party Obligations; Development
--------------------------------------------------------------------
Assistance; Clinical Trial Material.
-----------------------------------
(a) Transfer of Immunex Technology. If Immunex does not exercise a
------------------------------
Conversion Right with respect to a Candidate Product that is the
subject of a Product Call, and such Candidate Product becomes an
Elected Product, at AHP's written request Immunex shall assist in the
transfer of Immunex Technology related thereto to AHP or its designee.
Immunex shall not be obligated to assist in such technology transfer
for longer than one year from AHP's request. AHP shall reimburse
Immunex for
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<PAGE>
one hundred percent (100%) of Immunex's Allocable Cost for any
transfer of Immunex Technology hereunder.
(b) Assumption of Third Party Obligations. AHP shall also assume all
-------------------------------------
reasonable, noncancellable executory obligations of Immunex under
agreements with Third Parties relating to an Elected Product that are
in effect as of the exercise of the Product Call with respect to such
Elected Product, including, without limitation, clinical trial
agreements, contract manufacturing agreements, formulation or process
development agreements and agreements with Third Parties involving
licenses to patents or other intellectual property rights.
(c) Development Assistance Option. AHP shall have the option to elect to
-----------------------------
have Immunex assist in the development of the Elected Product, in
which case AHP shall reimburse Immunex for one hundred twenty-five
percent (125%) of its Allocable Cost related to such assistance,
provided that for any subsequent manufacturing of an Elected Product
hereunder, Immunex shall be reimbursed at one hundred twenty-five
percent (125%) of Manufacturing Cost related thereto. In the event
that AHP assumes any Third Party manufacturing agreement with respect
to such Elected Product, Immunex shall no longer be reimbursed for
Manufacturing Cost incurred with respect to such Elected Product after
the effective date of AHP's assumption of such Third Party
manufacturing agreement, but Immunex shall continue to be reimbursed
for its Allocable Cost as set forth in the immediately preceding
sentence. AHP's option to receive such development assistance shall
be exercised, if at all, by providing written notice thereof to
Immunex within thirty (30) days after the Parties have entered into
the Elected Product Agreement with respect to such Elected Product.
AHP's notice shall include a reasonably detailed description of the
development assistance being requested and any other pertinent
details. If AHP's notice of exercise of such option to receive
development assistance has not been received by Immunex within such
thirty (30)-day period, Immunex shall no longer be obligated to
provide the assistance set forth in this paragraph, but may
nevertheless do so at Immunex's option. Immunex's development
assistance shall include continuation of process development and
manufacturing of clinical trial material during a transition period to
a new manufacturer, provided that Immunex shall not be required to
materially increase its process development and manufacturing
activities related to the Elected Product if Immunex does not have the
resources to provide such increased level of assistance.
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<PAGE>
Such transition period for the Elected Product shall not extend for
more than eighteen (18) months from exercise of the Product Call
related thereto. Additional services may be provided by Immunex
subject to agreement upon acceptable terms.
(d) Purchase of Clinical Trial Material. If Immunex has any inventories
-----------------------------------
of the Elected Product that are suitable for use in human clinical
trials or for sale, AHP shall purchase such inventories at one hundred
twenty-five percent (125%) of Manufacturing Cost related thereto.
7.2 Payments to Immunex. The cost of services provided and costs incurred by
-------------------
Immunex that are covered under this Article 7 shall be paid by AHP to
Immunex within thirty (30) days from the date of an Immunex invoice
therefor.
ARTICLE 8. AMENDED ROFR
8.1 Amended ROFR to Covered Properties. The Board of Directors of Immunex
----------------------------------
shall determine, on a case by case basis, whether Immunex will market
itself to the Health Care Market any Covered Properties in any country or
countries in which Immunex has or acquires marketing rights. If the Board
of Directors of Immunex determines that Immunex will not so market or will
cease to so market any such Covered Properties in any one or more such
countries, Immunex shall offer AHP all such marketing rights to such
Covered Properties in accordance with the terms set forth in this Article
8.
8.2 Delivery of Notice.
------------------
(a) Notice Requirements. Immunex shall provide prompt written notice to
-------------------
AHP of any such determination under Section 8.1 above to such
appropriate AHP individuals as are identified in writing to Immunex
from time to time, provided, however, that:
(1) for a Covered Property that is an Immunex Product having
potential utility in treating human disease or conditions, such
notice shall not be provided to AHP prior to the time that
sufficient data is available to enable AHP to reasonably evaluate
the safety and efficacy of such Covered Property for its intended
use, which data shall include, at a minimum, preliminary clinical
evidence of safety (i.e., completion of Phase I); and
----
(2) for a Covered Property that is an Immunex Technology, such notice
shall not be provided to AHP prior to the time that the
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<PAGE>
criteria set forth in Exhibit B attached hereto and made a part
---------
hereof has been satisfied, provided, however, that nothing in
this Article 8 or Exhibit B hereto shall be deemed to interfere
---------
with Immunex's ability to form Discovery Collaborations under
Section 4.3 hereof.
(b) Information to be Provided to AHP.
---------------------------------
(1) Non-confidential Information. The notice provided to AHP
----------------------------
pursuant to Section 8.2(a) above shall be accompanied by
pertinent non-confidential data and information available to
Immunex with respect to the Covered Property, which shall be
updated from time to time as appropriate during the period set
forth in Section 8.3 below, together with information necessary
to conduct patent due diligence, which if non-public may be
provided to AHP counsel only on a confidential basis.
(2) Confidential Information. At any time during the period set
------------------------
forth in Section 8.3 below, AHP may request and Immunex shall
provide AHP with a confidential package of complete Immunex
information as may be available to Immunex with respect to such
Covered Property, which shall be updated from time to time as
appropriate during such period, and Immunex shall respond to
questions presented by AHP during such period using available
data and patent information. Immunex shall not be obligated to
conduct additional biological or pharmacological experiments, or
research in animals or humans, or conduct additional patent or
legal research or obtain legal opinions to respond to AHP
questions during such period.
(3) Complete Product Information. The receipt by AHP of complete
----------------------------
Immunex information with respect to a Covered Property under
Section 8.2(b)(2) above shall not be deemed to be a Candidate
Product Opportunity unless such Covered Property is a Candidate
Product and AHP exercises a Product Call with respect thereto.
8.3 Commencement of Time Period. Upon AHP's receipt of notice from Immunex
---------------------------
pursuant to Section 8.2 above, the Parties shall have a period of ninety
(90) days in which to establish mutually acceptable terms and conditions
under which AHP shall acquire the marketing rights referred to in Section
8.1 above to the Covered Property. At the end of such period, if the
Parties are unable to establish such mutually acceptable terms and
conditions, Immunex shall have
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<PAGE>
the right to offer such marketing rights to the Covered Property to a Third
Party on terms that, taken as a whole, are no less favorable to Immunex
than the terms last offered to AHP. If Immunex desires to enter into an
agreement with a Third Party on terms that, taken as a whole, are more
favorable to such Third Party than the terms last offered to AHP, then
Immunex shall not enter into an agreement with such Third Party unless it
first offers such new terms to AHP. AHP shall have thirty (30) days from
receipt of such additional offer to accept such new terms.
8.4 Waiver of Rights. If the Board of Directors of Immunex makes the
----------------
determination set forth in Section 8.1 above with respect to a Covered
Property prior to the time that notice may be given pursuant to Section 8.2
above, then, at the request of Immunex, AHP shall undertake to review the
information regarding such Covered Property as set forth in Section
8.2(b)(1) or (2) above, as applicable, and shall exempt from this Article 8
any such Covered Property that, in AHP's good faith determination, does not
fit within its then current or anticipated product profile.
8.5 Duration of Amended ROFR. The Amended ROFR shall terminate on the later of
------------------------
(a) the fifth (5th) anniversary of the Effective Date or (b) the date that
AHP or its Affiliates shall cease to be a majority shareholder of Immunex,
provided, however, that AHP shall continue to have the ability to exercise
its rights under the Amended ROFR with respect to any Covered Property that
was presented to AHP under the Amended ROFR prior to the termination of the
Amended ROFR under this Section 8.5.
8.6 Interleukin-4 Receptor. Notwithstanding anything herein to the contrary,
----------------------
the Amended ROFR shall be applicable to Interleukin-4 receptor, or any
analogs, derivatives, improvements, combination products or formulations
thereof on a global basis, and notwithstanding Section 2.1(b) hereof, any
prior waivers with respect thereto are null and void.
8.7 Former INOPs and Paclitaxel Products. Notwithstanding anything herein to
------------------------------------
the contrary, the Amended ROFR shall not be applicable to any Former INOPs
or Paclitaxel Products.
8.8 Relationship of Product Calls to Amended ROFR.
---------------------------------------------
(a) Commencement of Amended ROFR Process After Waiver of Product Call. If
-----------------------------------------------------------------
Immunex shall commence the Amended ROFR process for any Covered
Property that is also a Candidate Product following AHP's waiver of a
Product Call for such Candidate Product (including
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<PAGE>
expiration of the Exercise Period applicable to such Candidate
Product), AHP shall not have the right to exercise a Product Call for
such Candidate Product.
(b) Commencement of Amended ROFR Process During Exercise Period. Immunex
-----------------------------------------------------------
shall not commence the Amended ROFR process on any Covered Property
that is also a Candidate Product during AHP's Exercise Period
applicable to such Candidate Product.
(c) Exercisability of Product Call During Amended ROFR Process. If
----------------------------------------------------------
Immunex shall commence the Amended ROFR process with respect to a
Covered Property that is also a Candidate Product, AHP shall have the
right (unless, subject to Section 5.2(b) hereof, the Product Call for
such Candidate Product has been previously waived or Immunex has
previously exercised a Conversion Right on a Product Call that AHP has
sought to exercise) to exercise a Product Call as to such Candidate
Product during the Amended ROFR negotiating period.
(d) Preemption of Amended ROFR Process After Exercise of Product Call.
-----------------------------------------------------------------
If, during the Amended ROFR process, AHP exercises a Product Call with
respect to a Covered Property that is also a Candidate Product, such
exercise shall preempt the Amended ROFR process.
(e) Product Call for Less Than All Indications and/or Territories for a
-------------------------------------------------------------------
Candidate Product. If, with respect to any Covered Property that is
-----------------
also a Candidate Product in the Amended ROFR process, AHP has not
exercised the Product Call and the Product Call has not been waived,
the Amended ROFR process shall continue and, if such process leads to
a licensing transaction with respect to less than all indications or
territories with respect to such Candidate Product, AHP shall have the
right to exercise a Product Call with respect to the unlicensed
indications and/or territories not so licensed, subject to Section
5.3(a)(1)(ii) hereof.
ARTICLE 9. CONFIDENTIALITY
9.1 Acknowledgment Regarding Ownership. Each Party has and shall at all times
----------------------------------
retain all title and interest in and to its respective Confidential
Information, except as otherwise expressly provided herein.
9.2 Nondisclosure of Confidential Information. No Party may directly or
-----------------------------------------
indirectly publish, disseminate or otherwise disclose, deliver or make
available
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<PAGE>
to any person outside its organization any of the other Party's
Confidential Information without first obtaining the disclosing Party's
prior written consent to such disclosure. Each Party may disclose the other
Party's Confidential Information to persons within their and their
Affiliates' respective organizations who have a need to receive such
Confidential Information in order to further the purposes of this Agreement
and who are legally bound to protect the confidentiality of such
Confidential Information. In the event that either Party is required by
judicial or administrative process to disclose any of the other Party's
Confidential Information, it shall promptly notify the other Party and
allow the other Party a reasonable time to oppose such process before
disclosing any of the other Party's Confidential Information, and to redact
any portion of such Confidential Information as may be permissibly redacted
in accordance with such process.
9.3 Use of Confidential Information. Each Party shall use the Confidential
-------------------------------
Information disclosed to it hereunder solely for the express purposes and
in accordance with the terms and conditions set forth herein, or for such
other purposes as may be agreed upon by the Parties in writing from time to
time.
9.4 Physical Protection of Confidential Information. Each Party shall exercise
-----------------------------------------------
all commercially reasonable precautions to physically protect the integrity
and confidentiality of the other Party's Confidential Information.
9.5 Disclosure to Consultants. A Party may disclose the other Party's
-------------------------
Confidential Information to a consultant who needs to receive such
Confidential Information in order to further the purposes of this
Agreement, provided that the Party desiring to make such disclosure (a) has
obtained the other Party's prior written consent to such disclosure and (b)
has or shall obtain agreements with any such consultant which impose
comparable confidentiality obligations as set forth herein on the Party
desiring to make sure disclosure.
9.6 Strategic Interests and Competition. Each Party acknowledges that the
-----------------------------------
other Party and/or its Affiliates have a strategic interest in immunology,
oncology, biotechnology, and molecular biology research, own proprietary
technical information, and intend to continue their development of
commercial products for use in therapy and diagnosis regardless of whether
the Parties enter any further agreements hereunder. Consistent with the
foregoing, a Party's receipt and use of another Party's Confidential
Information for the express purposes permitted by this Agreement shall not
limit the receiving Party's ability to develop therapeutic or diagnostic
products, provided that the receiving Party has complied with all of the
requirements of this Article 9 with respect to the other Party's
Confidential Information.
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<PAGE>
9.7 Return of Confidential Information.
----------------------------------
(a) Return of Confidential Information. Subject to Section 9.7(b) below,
----------------------------------
at any time upon the written request of the disclosing Party, the
receiving Party shall promptly return to the disclosing Party the
disclosing Party's Confidential Information, including all copies
thereof. At the disclosing Party's written request, the Confidential
Information that is otherwise required to be returned to the
disclosing Party shall be destroyed and such destruction shall be
certified in writing to the disclosing Party by an authorized
representative of the receiving Party. Notwithstanding the foregoing,
the receiving Party may retain a single archival copy of the
disclosing Party's Confidential Information solely for the purpose of
establishing the extent of disclosure of Confidential Information by
the disclosing Party hereunder. The return and/or destruction of such
Confidential Information as provided above shall not relieve the
receiving Party of its other obligations under this Agreement.
(b) Exceptions. The provisions of this Section 9.7 shall not apply (1)
----------
during the Exercise Period with respect to Immunex Confidential
Information disclosed to AHP in connection with the Candidate Product
that is subject to a Product Call during such Exercise Period, (2)
during the Amended ROFR negotiating period with respect to Immunex
Confidential Information disclosed to AHP in connection with the
Covered Property that is subject to the Amended ROFR during such
negotiating period, or (3) to the extent AHP has received Immunex
Confidential Information with respect to a Candidate Product or
Elected Product pursuant to AHP's exercise of a Product Call related
thereto.
9.8 Survival. The confidentiality and non-use provisions contained herein
--------
shall remain effective during the Term of this Agreement and for five (5)
years thereafter.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
Each Party hereby represents and warrants to the other Party as follows:
10.1 General Representations and Warranties. Such Party (a) is a corporation
--------------------------------------
duly organized, validly existing and in good standing under the laws of the
state in which it is incorporated and (b) is in compliance with all
requirements of applicable law, except to the extent that any noncompliance
would not materially adversely affect such Party's ability to perform its
obligations under this Agreement.
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<PAGE>
10.2 Agreement-related Representations and Warranties. Such Party (a) has the
------------------------------------------------
corporate power and authority and the legal right to enter into this
Agreement and to perform its obligations hereunder and (b) has taken all
necessary corporate action on its part to authorize the execution and
delivery of this Agreement and the performance of its obligations
hereunder. This Agreement has been duly executed and delivered on behalf
of such Party, and constitutes a legal, valid, binding obligation,
enforceable against such Party in accordance with its terms.
10.3 Consents. All necessary consents, approvals and authorizations of all
--------
governmental authorities and other persons required to be obtained by such
Party in connection with the execution, delivery and performance of this
Agreement have been and shall be obtained.
10.4 No Conflict. Notwithstanding anything to the contrary in this Agreement,
-----------
the execution and delivery of this Agreement and the performance of such
Party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or regulations and (b) do not and shall not
conflict with, violate or breach or constitute a default or require any
consent under, any contractual obligation of such Party.
10.5 Disclaimer. THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES
----------
OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND PARTICULARLY THAT IMMUNEX
PRODUCTS, ROYALTY PRODUCTS OR WNOPS WILL BE DEVELOPED HEREUNDER, WILL HAVE
COMMERCIAL UTILITY OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 11. INDEMNIFICATION
11.1 Indemnification by Immunex. Except as set forth in Section 11.2 below,
--------------------------
and except to the extent caused by AHP's negligent or more culpable acts or
omissions, Immunex shall indemnify, defend and hold AHP harmless from and
against any liabilities, damages, costs or expenses, including reasonable
attorneys' fees (collectively, the "Liabilities"), (a) that AHP incurs as a
-----------
result of exercise by Immunex of any rights accruing to Immunex under this
Agreement or (b) relating to any claim, lawsuit or other action by a Third
Party that arises out of, relates to or results from the breach by Immunex
of any of its representations, warranties or covenants contained within
this Agreement.
11.2 Indemnification by AHP. Except as set forth in Section 11.1 above, and
----------------------
except to the extent caused by Immunex's negligent or more culpable acts or
-45-
<PAGE>
omissions, AHP shall indemnify, defend and hold Immunex harmless from and
against any Liabilities (a) that Immunex incurs as a result of exercise by
AHP of any rights licensed or otherwise accruing to AHP under this
Agreement or (b) relating to any claim, lawsuit or other action by a Third
Party that arises out of, relates to or results from the breach by AHP of
any of its representations, warranties or covenants contained within this
Agreement.
11.3 Indemnification Procedures. A Party (the "Indemnitee") which intends to
-------------------------- ----------
claim indemnification under Section 11.1 or 11.2 above shall promptly
notify the other Party (the "Indemnitor") in writing of any claim, lawsuit
----------
or other action in respect of which the Indemnitee or any of its directors,
officers, employees, agents and Affiliates intend to claim such
indemnification. The Indemnitee shall permit, and shall cause its
directors, officers, employees, agents and Affiliates to permit, the
Indemnitor, at its discretion, to settle any such claim, lawsuit or other
action and agrees to the complete control of such defense or settlement by
the Indemnitor; provided, however, such settlement does not adversely
affect the Indemnitee's rights hereunder or impose any obligations on the
Indemnitee in addition to those set forth herein in order for it to
exercise such rights. The Parties agree that the Indemnitor shall select
counsel reasonably satisfactory to the Indemnitee to undertake the defense
of any claim, lawsuit or other action against the Indemnitee covered by the
Indemnitor's indemnity hereunder. No such claim, lawsuit or other action
shall be settled without the prior written consent of the Indemnitor and
the Indemnitor shall not be responsible for any legal fees or other costs
incurred other than as provided herein. The Indemnitee, its directors,
officers, employees, agents and Affiliates shall cooperate fully with the
Indemnitor and its legal representatives in the investigation and defense
of any claim, lawsuit or other action covered by this indemnification. The
Indemnitee shall have the right, but not the obligation, to be represented
by counsel of its own selection and expense.
ARTICLE 12. CURRENCY
12.1 U.S. Currency; Interest Payments. All payments to be made under this
--------------------------------
Agreement shall be made in U.S. dollars by bank wire transfer in
immediately available funds to a bank account designated by the Party
receiving the funds. Any payments to be made to a Party under this
Agreement that are late under the applicable terms set forth herein shall
include interest accrued at the prime lending rate of The Chase Manhattan
Bank (or any successor entity thereto) in effect at the time such payment
became overdue.
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<PAGE>
ARTICLE 13. TERM; TERMINATION
13.1 Term.
----
(a) Product Call Term. The "Product Call Term" shall commence as of the
----------------- -----------------
Effective Date and, subject to the provisions in this Article 13,
shall continue in effect until the occurrence of a Product Call
Termination Event.
(b) Amended ROFR Term. The "Amended ROFR Term" shall commence as of the
----------------- -----------------
Effective Date and, subject to the provisions in this Article 13,
shall continue in effect through the period set forth in Section 8.5
hereof.
(c) Term. The "Term" of this Agreement shall commence as of the Effective
---- ----
Date and, subject to the provisions in this Article 13, shall continue
through the last to expire of the Product Call Term or the Amended
ROFR Term, and shall continue thereafter until such time as the
Parties have entered into the last definitive agreement contemplated
herein.
13.2 Termination.
-----------
(a) Material Breach. Notwithstanding any other provision of this Article
---------------
13, failure by either Party (the "Defaulting Party") to comply with
----------------
any of the material obligations contained in this Agreement shall
entitle the other Party (the "Nondefaulting Party") to give to the
-------------------
Defaulting Party notice specifying the nature of the default and
requiring it to cure such default. If the Defaulting Party disagrees
with the existence, extent or nature of the default, the Parties shall
use good faith efforts to resolve the dispute. If (1) such default is
not cured within sixty (60) days after the receipt of such notice, or
(2) if such default cannot be cured within such sixty (60)-day period
and the Defaulting Party delivers a certificate to the Nondefaulting
Party that such material breach is not reasonably capable of being
cured within such sixty (60)-day period and that the Defaulting Party
is working diligently to cure such breach, provided that in no event
shall the time for curing such material breach exceed an additional
sixty (60) days, or (3) the Parties have not otherwise resolved the
dispute during such period, the Nondefaulting Party shall be entitled,
except as otherwise specifically provided in this Agreement, without
prejudice to any of its other rights conferred on it by this
Agreement, to terminate this Agreement.
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<PAGE>
(b) Insolvency or Bankruptcy.
------------------------
(1) Insolvency or Bankruptcy. Either Party may, in addition to any
------------------------
other remedies available to it by law or in equity, terminate
this Agreement by written notice to the other party (the
"Insolvent Party") in the event such other Party shall have
----------------
become insolvent or bankrupt, or shall have made an assignment
for the benefit of its creditors, or there shall have been
appointed a trustee or receiver of the Insolvent Party or for all
or a substantial part of its property, or any case or proceeding
shall have been commenced or other action taken by or against the
Insolvent Party in bankruptcy or seeking reorganization,
liquidation, dissolution, winding-up arrangement, composition or
readjustment of its debts or any other relief under any
bankruptcy, insolvency, reorganization or other similar act or
law of any jurisdiction now or hereafter in effect, or there
shall have been issued a warrant of attachment, execution or
similar process against any substantial part of the property of
the Insolvent Party, and any such event shall have continued for
sixty (60) days undismissed, unbonded and undischarged.
(2) Rights in Bankruptcy. All rights and licenses under or pursuant
--------------------
to this Agreement by the Parties are, and shall otherwise be
deemed to be, for purposes of Section 365(n) of the U.S.
Bankruptcy Code, licenses of rights to "intellectual property" as
defined under Section 101 of the U.S. Bankruptcy Code. The
Parties agree that, as licensees of such rights under this
Agreement, each shall retain and may fully exercise all of their
rights and elections under the U.S. Bankruptcy Code. The Parties
further agree that, in the event of the commencement of a
bankruptcy proceeding by or against AHP or Immunex under the U.S.
Bankruptcy Code, the Party which is not the bankrupt or insolvent
entity shall be entitled to a complete duplicate of (or complete
access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, and the same, if not
already in its possession, shall be promptly delivered to it (i)
upon any such commencement of a bankruptcy proceeding upon its
written request therefor, unless the Party subject to such
proceeding elects to continue to perform all of its obligations
under this Agreement or (ii) if not delivered under (i) above,
upon the rejection of this Agreement by or on behalf of the Party
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<PAGE>
subject to such proceeding upon written request therefor by any
non-insolvent Party.
13.3 Accrued Rights, Surviving Obligations. Except as set forth herein, any
-------------------------------------
termination, cancellation or expiration of this Agreement shall be without
prejudice to any right which shall have accrued to the benefit of either
Party and shall not relieve either Party of any obligation which has
accrued prior to the date of such termination, cancellation or expiration
including, but not limited to, such Party's obligations under Articles 9
and 11 hereof, which obligations shall remain in full force and effect for
the period provided therein or, if no period is provided therein,
indefinitely.
ARTICLE 14. PUBLIC ANNOUNCEMENTS; USE OF NAMES
14.1 Public Announcements. The Parties acknowledge their mutual intent to
--------------------
issue a press release regarding this Agreement at a mutually agreeable
time. The Parties agree that they shall coordinate the initial
announcement or press release relating to the existence of this Agreement
so that such initial announcement or press release by each is made
contemporaneously, or is made as a joint press release. For all
disclosures under this Section 14.1, except for such disclosure as is
deemed necessary, in the reasonable judgment of the responsible Party, to
comply with federal or state laws or regulations, no public announcement
or news releases relating to the subject matter herein or either Party's
performance hereunder (collectively, a "Publication") shall be made
-----------
without the other Party's prior approval. Each Party agrees to submit such
Publication it proposes to make to the other Party for purposes of such
other Party's review and comment or, if required pursuant to this Section
14.1, approval. Any such disclosure will not contain Confidential
Information of the other Party, unless if disclosure of such Confidential
Information is required by law or regulation, in which case the disclosing
Party will redact if permissible by such law or regulation, or otherwise
make reasonable efforts to minimize such disclosure and obtain
confidential treatment for any such information which is disclosed by
requirement of such law or regulation. Except as otherwise required by
such law or regulation, the Party whose press release has been reviewed
shall consider in good faith the removal of any information the reviewing
Party reasonably deems to be inappropriate for disclosure. Each Party
further agrees to respond as promptly as reasonably practicable but, in
any event, within fifteen (15) days following receipt from the other Party
of such proposed Publication, and likewise agrees that it shall not
unreasonably withhold approval of such Publication.
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<PAGE>
14.2 Use of Names. Except as expressly provided for herein, in connection with
------------
the subject matter hereof, neither Party shall, without the prior written
consent of the other Party: (a) use in advertising, publicity, promotional
premiums or otherwise, excluding internal communications, any trademark,
trade device, service mark, symbol, or any abbreviation, contraction or
simulation thereof owned by the other Party or (b) represent, either
directly or indirectly, that any product or service of the other Party is
a product or service of the representing Party.
ARTICLE 15. INDEPENDENT PARTIES
15.1 Independent Parties. At all times during the Term of this Agreement,
-------------------
Immunex, on the one hand, and AHP and its Affiliates, on the other hand,
shall be deemed and shall in fact be independent of one another and
neither shall be authorized or empowered hereby to act as the agent for
the other Party for any purpose whatsoever or, on behalf of the other,
enter into any contract, warranty or representation as to any matter.
15.2 Non-Exercise of Rights. AHP, Wyeth and ACY shall not exercise or cause to
----------------------
be exercised any of ACY's rights set forth under Section 4.04 or 4.05 of
the Governance Agreement to prevent or interfere with the exercise by
Immunex of any rights provided to it under this Agreement.
ARTICLE 16. EXPORT CONTROLS
16.1 Legal Compliance. The Parties acknowledge that both are subject to laws
----------------
and regulations of the U.S. governing exportation of technical
information, computer software, laboratory prototypes and other
commodities and that the rights hereunder are contingent on compliance
with all such laws and regulations. The transfer of certain technical data
and commodities may require a license from the appropriate agency of the
U.S. Government and neither Party shall export such technical data or
commodities to certain foreign countries to which export restrictions
apply without the prior approval of such agency.
ARTICLE 17. MISCELLANEOUS
17.1 Waiver. Any term or condition of this Agreement may be waived or
------
qualified at any time by the Party entitled to the benefit thereof by a
written instrument that specifically identifies this Agreement and the
term or condition to be waived or qualified and is executed by a duly
authorized officer of such Party. No delay or failure on the part of
either Party in exercising any rights
-50-
<PAGE>
hereunder, and no partial or single exercise thereof, shall constitute a
waiver of such rights or of any other rights hereunder.
17.2 Governing Law. With the exception of patent matters which shall be
-------------
governed by application of national patent laws, this Agreement shall be
construed and the respective rights of the Parties determined in
accordance with the laws of the State of New Jersey.
17.3 Assignment. Neither Party may assign its interest under this Agreement
----------
without the prior written consent of the other Party, provided, however,
that either Party may assign its rights and obligations under this
Agreement, without the prior written consent of the other Party, to a
successor of the assigning Party's business by reason of merger, sale of
all or substantially all of its assets or other form of acquisition,
provided that such successor agrees in writing to be bound by this
Agreement. Such consent to the assignment of this Agreement shall not be
unreasonably withheld. Any purported assignment without a required consent
shall be void. Subject to the foregoing, any reference to Immunex or AHP
in this Agreement shall be deemed to include the successors thereto and
assigns thereof.
17.4 Severance. If any provision of this Agreement is held to be invalid or
---------
unenforceable by a court of competent jurisdiction, all other provisions
shall continue in full force and effect.
17.5 Notices.
-------
(a) All notices required or permitted to be given under this Agreement
shall be in writing and shall be sent by registered or certified mail
(return receipt requested), or by overnight courier service, postage
prepaid in each case, or by facsimile (and promptly confirmed by such
registered or certified mail or overnight courier service) to the
receiving Party at such Party's address set forth below, or at such
other address as may from time to time be furnished by similar notice
by either Party. The effective date of any notice hereunder shall be
the date of receipt by the receiving Party.
(b) Notices to AHP, Wyeth, ACY or Lederle shall be addressed to:
Wyeth-Ayerst Research
555 East Lancaster
St. Davids, Pennsylvania 19087
-51-
<PAGE>
Attention: Senior Vice President-Global Business Development
Facsimile No.: (610) 688-9498
Copy to: AMERICAN HOME PRODUCTS CORPORATION
Five Giralda Farms
Madison, New Jersey 07940
Attention: Senior Vice President and General Counsel
(c) Notices to Immunex shall be addressed to:
IMMUNEX CORPORATION
51 University Street
Seattle, Washington 98101
Attention: Chief Executive Officer
Facsimile No.: (206) 467-0368
Copy to: General Counsel at the same address.
17.6 Force Majeure. No failure or omission by either Party in the performance
-------------
of any obligation under this Agreement (except the obligation to pay
money) shall be deemed a breach hereof or create any liability if the same
arises from any cause beyond the control and without the fault or
negligence of the Party so affected, including but not limited to, the
following: act of God; acts or omissions of any government; any rule,
regulation or order issued by any governmental authority or by any
officer, department, agency or instrumentality thereof; fire; storm;
flood; earthquake; accident; war; rebellion; insurrection; riot; invasion;
or strike, lockout or other work stoppage. The Party so affected shall
give prompt written notice to the other Party of such force majeure, and
shall take whatever reasonable steps are necessary to cure such failure or
omission as soon as is practicable after the occurrence of the force
majeure.
17.7 Further Assurances. At the request of either Party hereto, the other
------------------
Party shall execute and deliver from time to time such further instruments
and shall provide reasonable cooperation in such proceedings or actions as
shall be necessary or reasonably appropriate to effectuate the purposes of
this Agreement.
17.8 Specific Performance. The Parties hereto agree that irreparable damage
--------------------
would occur in the event any material provision of this Agreement was not
performed in accordance with its specific terms, and that the Parties
shall be entitled to
-52-
<PAGE>
specific performance of the specific terms hereof, in addition to any
other remedy at law or equity.
17.9 Headings. All headings are for reference purposes only and shall not in
--------
any way affect the meaning or interpretation of this Agreement.
17.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17.11 Entire Agreement. This Agreement, together with any Exhibits attached
----------------
hereto and expressly incorporated herein, constitutes the entire agreement
between the Parties relative to the specific subject matter hereof and
supersedes all previous arrangements whether written or oral, concerning
the specific subject matter hereof, subject to Section 17.12 below. Any
amendment or modification to this Agreement shall be of no effect unless
made in a writing that specifically references this Agreement and signed
by each of the Parties.
17.12 Other Agreements. The Parties acknowledge and agree that the other
----------------
agreements among the Parties, including but not limited to, the following
enumerated agreements, have not been amended or modified in any way
pursuant to this Agreement: (a) the Research Collaboration, Development
and License Agreement for TNF converting enzymes ("TACE") between AHP and
----
Immunex dated as of December 1, 1995, as amended by Amendment No. 1 to the
TACE Research Collaboration, Development and License Agreement dated as of
September 25, 1997, (b) the License Agreement for TACE between AHP and
Immunex dated as of December 1, 1995, (c) the TNFR Agreement, (d) the
Promotion Agreement between AHP and Immunex for the promotion of Enbrel
(TNFR:Fc) in North America dated as of September 25, 1997, and (e) the
Governance Agreement.
[This space is intentionally left blank.]
-53-
<PAGE>
IN WITNESS WHEREOF, the Parties, intending to be bound hereby, have caused
their duly authorized representatives to execute this Agreement.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Gerald A. Jibilian
------------------------------------
Name: Gerald A. Jibilian
----------------------------------
Title: Vice President
---------------------------------
Date: 6/25/98
----------------------------------
AMERICAN CYANAMID COMPANY
By: /s/ Gerald A. Jibilian
------------------------------------
Name: Gerald A. Jibilian
----------------------------------
Title: Vice President
---------------------------------
Date: 6/25/98
----------------------------------
IMMUNEX CORPORATION
By: /s/ Edward V. Fritzky
------------------------------------
Edward V. Fritzky
Chairman and Chief Executive Officer
Date: 6/24/98
----------------------------------
-54-
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
TABLE I: INITIAL FEES AND MILESTONES FOR WORLDWIDE RIGHTS (IN MILLIONS)/1/
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Product Status A: IND Track B: Phase I C: Phase II D: After Product
when Product Status Call Alert Notice
Call is
Exercised
- ------------------------------------------------------------------------------------------------
Initial Fee: $ 5 $ 7 $10 $15
- ------------------------------------------------------------------------------------------------
Begin Phase I $ 2 N/A N/A N/A
- ------------------------------------------------------------------------------------------------
Begin Phase III $ 3 $ 7 $10 N/A
- ------------------------------------------------------------------------------------------------
First $ 5 $ 8 $10 $25
BLA/NDA Filing
- ------------------------------------------------------------------------------------------------
First $10 $12 $20 $30
BLA/NDA Approval
- ------------------------------------------------------------------------------------------------
TOTAL $25 $34 $50 $70
================================================================================================
<CAPTION>
TABLE II: ROYALTIES (% OF INDICATED ANNUAL NET SALES INCREMENT)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Product Status A: IND Track B: Phase I C: Phase II D: After Product Call
when Product Status Alert Notice
Call is
Exercised
- ------------------------------------------------------------------------------------------------
Incremental
Annual Net
Sales in
Millions
- ------------------------------------------------------------------------------------------------
0-$200 [ * ] [ * ] [ * ] [ * ]
- ------------------------------------------------------------------------------------------------
$200-400 [ * ] [ * ] [ * ] [ * ]
- ------------------------------------------------------------------------------------------------
$400-600 [ * ] [ * ] [ * ] [ * ]
- ------------------------------------------------------------------------------------------------
</TABLE>
/1/ Subject to reduction pursuant to Section 5.3(a)(1)(ii) and Section
6.1(d) of the Agreement.
- -----------------
*Confidential Treatment Requested.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
$ Less than 600 [ * ] [ * ] [ * ] [ * ]
- ------------------------------------------------------------------------------------------------
Maximum Third [ * ] [ * ] [ * ] [ * ]
Party Royalty
Credit
- ------------------------------------------------------------------------------------------------
</TABLE>
- -----------------
*Confidential Treatment Requested.
-2-
<PAGE>
EXHIBIT B
CRITERIA FOR TRIGGERING AHP'S AMENDED ROFR TO
"IMMUNEX TECHNOLOGY"
When IMMUNEX TECHNOLOGY is a SUBSTANCE (but not an Immunex Product, in
which case the Amended ROFR criteria applicable to Immunex Products set forth in
Section 8.2(a)(1) of the Agreement obtains), such as a protein:
. STRUCTURE
for proteins other than antibodies, this shall mean the natural protein has
been isolated and purified and Immunex is working on elucidating the amino
acid sequence and cloning the DNA
for polyclonal antibodies, this shall mean that the antigen bound by the
antibodies has been identified and Immunex has isolated the antigen in a
form sufficiently pure to be used to raise additional polyclonal antibodies
for a monoclonal antibody, this shall mean that the antigen bound by the
antibody has been identified and Immunex has isolated a hybridoma suitable
for sustained production of the monoclonal antibody
. SCIENTIFICALLY ACCEPTABLE EVIDENCE THAT SUBSTANCE FUNCTIONALLY RELATES TO
DISEASE STATE OR BIOLOGICAL PROCESS
e.g., for genes and the proteins they encode, this shall include scientific
----
evidence such as that provided by a knock-out mouse model, antisense
inhibition, antibody inhibition or dominant negative mutations that are
capable of demonstrating the biological effect of altering or ablating
protein function, in vitro demonstration that certain substances
--------
specifically modulate the activity of the gene or protein it encodes, and
the like, as appropriate; for small molecules this shall include structure-
functional activity data, potency information, and the like, as
appropriate; and for polyclonal or monoclonal antibodies, scientific
evidence that a diagnostic assay using the antibodies can be used to detect
a disease state or other biological condition desired to be detected
Criteria to also include the following when entity to be developed is a
RECOMBINANT PROTEIN:
. indicia that protein will be capable of successful recombinant
expression
<PAGE>
. in vitro profile comparison of recombinant protein to native protein
--------
(e.g., binding activity and specificity and other parameters as
---
appropriate)
. if purified natural protein is not practically available (e.g., TPO)
----
other evidence that the recombinant protein is biologically active may
be employed
. PATENT APPLICATION FILED
When IMMUNEX TECHNOLOGY is a METHODOLOGY:
. SCIENTIFICALLY ACCEPTABLE EVIDENCE THAT METHODOLOGY HAS COMMERCIAL AND/OR
RESEARCH TOOL SIGNIFICANCE
e.g., for expression systems, purification systems and the like, this shall
----
include data supporting enhanced yields of expression or purification or
demonstration of expression or purification that had not been previously
obtainable, and the like, as appropriate
for molecular screening targets, e.g., TACE, this shall include meaningful
----
data showing that inhibition or potentiation of the biological function of
the target will have a potentially useful effect in modulating a disease
state or biological process, for example, growth, development or
reproduction
. PATENT APPLICATION FILED
unless inappropriate because strategy is to maintain such proprietary
methodology as a trade secret
-2-
<PAGE>
EXHIBIT C
---------
ROYALTY AGREEMENT
THIS ROYALTY AGREEMENT (the "Agreement"), effective as of the 1st day of
---------
July, 1998, by and among AMERICAN HOME PRODUCTS CORPORATION, a corporation
organized and existing under the laws of the State of Delaware ("AHP"), AMERICAN
---
CYANAMID COMPANY, a corporation organized and existing under the laws of Maine
and a wholly-owned subsidiary of ACY ("ACY"), and IMMUNEX CORPORATION, a
---
corporation organized and existing under the laws of the State of Washington,
together with its Affiliates (as defined herein) ("Immunex").
-------
WHEREAS, AHP, ACY and Immunex have entered into a Product Rights Agreement
effective as of the date hereof (the "Product Rights Agreement"), pursuant to
------------------------
which Immunex has agreed to pay ACY royalties in respect of the Net Sales (as
defined herein) of certain products (as defined herein, the "Former INOP Royalty
-------------------
Products") in the Territory (as defined herein);
- --------
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties (as
defined herein), intending to be legally bound hereby, do hereby agree as
follows:
ARTICLE 1. DEFINITIONS
The following terms, whether used in the singular or the plural, shall have
the meanings designated to them under this Article unless otherwise specifically
indicated.
1.1 "Affiliate" shall mean any corporation or business entity of which a Party
---------
owns directly or indirectly, fifty percent (50%) or more of the assets or
outstanding stock, or any corporation which a Party directly or indirectly
controls, or any parent corporation that owns, directly or indirectly,
fifty percent (50%) or more of the assets or outstanding stock of a Party
or directly or indirectly controls a Party. For purposes of this
Agreement, the Parties and their Affiliates shall not be deemed to be
Affiliates of each other.
1.2 "Amended INOP Agreement" shall mean the Immunex New Oncology Product
----------------------
License Agreement, dated as of June 1, 1993, between Immunex and ACY, as
amended by Amendment No. 1 to Immunex New Oncology Product License
Agreement dated as of July 1, 1996.
<PAGE>
1.3 "Calendar Quarter" shall mean each three (3)-month period commencing the
----------------
first day of January, April, July and October of each Calendar Year (as
defined herein).
1.4 "Calendar Year" shall mean each twelve (12)-month period commencing January
-------------
1 of each year after the Effective Date (as defined herein) through the end
of the Term (as defined herein) of this Agreement.
1.5 "Combination Products" shall mean any pharmaceutical or biological
--------------------
preparation in finished form that contains a Former INOP Royalty Product in
combination with one or more other active ingredients.
1.6 "Distributor" shall mean any Third Party (as defined herein) that purchases
-----------
a Former INOP Royalty Product in finished form (in final packaged form
bearing the applicable Party's or its Affiliate's tradedress) for resale in
any part of the Territory.
1.7 "Effective Date" shall mean the effective date of this Agreement, which
--------------
shall be the date appearing at the beginning of this Agreement.
1.8 "FDA" shall mean the U.S. (as defined herein) Food and Drug Administration,
---
or any successor entity thereto.
1.9 "FLT-3 Ligand Agreement" shall mean the FLT-3 Ligand License and
----------------------
Development Agreement between Immunex and ACY effective as of July 1, 1996.
1.10 "FLT-3 Ligand Products" shall mean any human health product having
---------------------
therapeutic and/or prophylactic effects on disease that includes a human
Flt-3 ligand polypeptide and is claimed by Immunex Granted Patents (as
defined herein) or Joint Granted Patents (as defined herein).
1.11 "First Commercial Sale" shall mean the date on which a Former INOP Royalty
---------------------
Product is delivered to a Third Party pursuant to a binding agreement of
sale (which may consist of an invoice acknowledging a purchase order) in
the applicable country in the Territory following the date of regulatory
approval of such Former INOP Royalty Product in such country or, if no such
approval is required, following the date on which Immunex or its licensee,
as applicable, determines to commercially launch such Former INOP Royalty
Product in such country.
1.12 "Former INOP Royalty Products" shall mean
----------------------------
(a) FLT-3 Ligand Products,
-2-
<PAGE>
(b) GM-CSF Products (as defined herein), and
(c) IL-15 Products (as defined herein).
1.13 "GM-CSF Products" shall mean any human health product having therapeutic
---------------
and/or prophylactic effects on disease that includes Sargramostim (as
defined herein).
1.14 "Granted Patents" shall mean any claims of an issued and unexpired Patent
---------------
(as defined herein) that has not been revoked or held unenforceable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction, or that remains unappealable or unappealed within the time
allowed for appeal, or that has not been disclaimed, denied or admitted to
be invalid or unenforceable through reissue, re-examination, disclaimer or
otherwise, and shall refer to patents owned solely by Immunex ("Immunex
-------
Granted Patents") or patents owned jointly by the Parties or their
---------------
Affiliates ("Joint Granted Patents"), however appropriate.
---------------------
1.15 "IL-15 Products" shall mean any human health product having therapeutic
--------------
and/or prophylactic effects on disease that includes a human Interleukin-
15 polypeptide and is claimed by Immunex Granted Patents or Joint Granted
Patents.
1.16 "Immunex New Oncology Product" or "INOP" shall have the meaning accorded
---------------------------- ----
thereto in the Amended INOP Agreement.
1.17 "Immunex Patents" shall mean all Immunex Granted Patents and patent
---------------
applications and any Third Party patents and patent applications in which
Immunex has a licensable interest, that are necessary in order to develop,
make, have made, use, import, offer for sale or sell a particular Former
INOP Royalty Product, and any reissues, re-examinations, continuations,
continuations-in-part, divisions, renewals, extensions, patents of
addition, and any extension of the term of the patent or supplementary
protection certificate or other means by which greater effective patent
protection is extended that exist as of the Effective Date of or are
issued or filed at any time during the Term of this Agreement.
1.18 "Joint Patents" shall mean all Joint Granted Patents and patent
-------------
applications of which AHP and/or its Affiliates is a joint owner with
Immunex, as determined by the patent laws of the applicable country or as
otherwise expressly provided for by the Parties, that are necessary in
order to make, have made, use, import, offer for sale or sell a particular
Former INOP Royalty Product, and any reissues, re-examinations,
continuations, continuations-in-part, divisions, renewals, extensions,
patents of addition, and any extension of the term of the patent or
supplementary protection certificate or other means by which greater
effective patent protection is
-3-
<PAGE>
extended that exist as of the Effective
Date of or are issued or filed at any time during the Term of this
Agreement.
1.19 "Market Launch" shall mean on a country-by-country basis in the Territory,
-------------
the First Commercial Sale of a Former INOP Royalty Product in that country.
1.20 "Net Sales" shall mean the gross invoice price of a Former INOP Royalty
---------
Product sold by Immunex or its licensees, to a Third Party after deducting,
if not already deducted in the amount invoiced:
(a) the standard inventory cost (actual acquisition cost) of devices
used for dispensing or administering such Former INOP Royalty
Product and that accompany such Former INOP Royalty Product as it is
sold;
(b) then normal or customary trade, cash, and/or quantity discounts;
(c) returns, allowances, free goods, rebates and chargebacks;
(d) retroactive price reductions applicable to sales of such Former INOP
Royalty Product;
(e) fees paid to Distributors, selling agents (excluding any sales
representatives of Immunex or its licensees), group purchasing
organizations and managed care entities;
(f) sales taxes, excise taxes, tariffs and duties; and
(g) two percent (2%) of the amount invoiced to cover bad debt, freight
or other transportation costs, insurance charges, additional special
packaging, and other governmental charges.
1.21 "North America" shall mean the U.S. and Canada.
-------------
1.22 "Party" or "Parties" shall mean Immunex, AHP and/or ACY, as the context
----- -------
requires.
1.23 "Patents" shall mean Immunex Patents and Joint Patents.
-------
1.24 "Sargramostim" shall mean the GM-CSF Product licensed by the FDA under
------------
License No. 1132.
1.25 "Term" shall have the meaning set forth in Section 5.1 hereof.
----
1.26 "Territory" shall mean all of the countries of the world except North
---------
America.
-4-
<PAGE>
1.27 "Third Party" shall mean any party other than Immunex, AHP, ACY and their
-----------
respective Affiliates.
1.28 "U.S." shall mean the United States of America, its territories and
----
possessions, and the Commonwealth of Puerto Rico.
1.29 Each of the following definitions are found in the Agreement as indicated:
Section
-------
<TABLE>
<CAPTION>
Section
-------
<S> <C>
"Defaulting Party" 5.2(a)
----------------
"Immunex Granted Patents" 1.14
-----------------------
"Indemnitee" 4.3
----------
"Indemnitor" 4.3
----------
"Insolvent Party" 5.2(b)
---------------
"Joint Granted Patents" 1.14
---------------------
"Liabilities" 4.1
-----------
"License Right" 2.1(c)
-------------
"Nondefaulting Party" 5.2(a)
-------------------
"Payor" 2.2
-----
"Publication" 6.1
-----------
</TABLE>
ARTICLE 2. PAYMENT OF ROYALTIES
2.1 Royalties on Former INOP Royalty Products. In consideration of termination
-----------------------------------------
of the Amended INOP Agreement and the FLT-3 Ligand Agreement pursuant to
the Product Rights Agreement, Immunex shall pay or cause to be paid to ACY
an earned royalty, on a country-by-country basis, of [ * ] percent ([ * ]%)
of the quarterly Net Sales in the Territory of any of the Former INOP
Royalty Products by Immunex and its licensees, such royalties to begin on
the date of Market Launch of any such Former INOP Royalty Product in a
specific country within the Territory. Such royalties shall be payable
with respect to each Former INOP Royalty Product until the later of (a)
expiration of the last Granted Patent in such country that specifically
claims the applicable Former INOP Royalty Product, but in no event longer
than twenty (20) years from the Effective Date or (b) ten (10) years from
the date of the Market Launch of the applicable Former INOP Royalty Product
in such country.
2.2 Royalty Reports. Immunex and/or its licensees, as applicable (each, a
---------------
"Payor"), shall keep true accounts of Net Sales of the Former INOP Royalty
------
Products, and deliver to ACY, within sixty (60) calendar days after the end
of each Calendar Quarter a written account, including quantities, of Net
Sales of
- -----------------
*Confidential Treatment Requested.
-5-
<PAGE>
the Former INOP Royalty Products, broken down by each Former INOP
Royalty Product on a country-by-country basis in the Territory, that are
subject to earned royalty payments hereunder. The information provided in
each royalty report shall be maintained confidential by ACY.
2.3 Royalty Payments. With each accounting required by this Article 2, the
----------------
Payor shall also provide to ACY, without deduction except where expressly
permitted by this Agreement, all earned royalty payments due for the
Calendar Quarter for which the accounting is made.
2.4 Currency Conversion. Payments hereunder by the Payor shall be made to ACY
-------------------
in U.S. dollars. For converting any royalty payments on Net Sales made in
a currency other than U.S. dollars, Net Sales shall first be determined in
the currency of the country in which they are earned and shall be converted
each Calendar Quarter into an account in U.S. dollars at the average of the
bid and ask prices reported in the Wall Street Journal as of the close of
-------------------
the last business day of such Calendar Quarter in which such royalty is
due. If the last day of such Calendar Quarter is not a business day, then
the closest preceding business day shall be used for such calculation. All
such converted Net Sales shall be consolidated for each Calendar Quarter
and the applicable royalty payable determined therefrom. If by law,
regulation or fiscal policy of a particular country, remittance of
royalties in U.S. dollars is restricted or forbidden, notice thereof will
be promptly given to ACY, and payment of the royalty shall be made by the
deposit thereof in local currency to the credit of ACY in a recognized
banking institution designated by ACY or its Affiliates, as applicable.
When in any country a law or regulation prohibits both the transmittal and
deposit of royalties on sales in such a country, royalty payments shall be
suspended for as long as such prohibition is in effect and as soon as such
prohibition ceases to be in effect, all royalties that the Payor would have
been under obligation to transmit or deposit but for the prohibition, shall
forthwith be deposited or transmitted promptly to the extent allowable.
The actual currency conversion calculations by a Payor for any country in
the Territory for a particular Calendar Quarter shall be included in the
royalty report provided to ACY for such Calendar Quarter under Section 2.2
above.
2.5 Withholding Taxes. ACY shall pay any and all taxes levied on account of, or
-----------------
measured exclusively by, royalties it receives hereunder. If applicable
laws or regulations require that taxes be withheld from royalties payable
hereunder, the Payor shall (a) deduct such taxes from the remittable
royalty, (b) timely pay such taxes to the proper taxing authority, and (c)
send proof of such tax
-6-
<PAGE>
payment, if available, to ACY within sixty (60) days following such
payment. Immunex agrees to take reasonable efforts to minimize such taxes
to ACY.
2.6 Combination Products.
--------------------
(a) Royalties due on sales of any Combination Product shall 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 Former INOP
Royalty Product if sold separately, and B is the total invoice price
of any other active component or components in the combination, if
sold separately by or on behalf of the Payor.
(b) If the other active component or components in the combination are not
sold separately by or on behalf of the Payor, then Net Sales, for the
purpose of determining royalties on the Combination Product shall be
calculated by multiplying actual Net Sales of such Combination Product
by the fraction A/C, where A is the invoice price of the Former INOP
Royalty Product if sold separately and C is the invoice price of the
Combination Product.
(c) If neither the Former INOP Royalty Product nor the Combination Product
is sold separately, Net Sales for purposes of determining royalties on
the Combination Product shall be calculated as above except that the
Parties shall allocate values to the components A and B based upon a
good faith determination of the respective contributions of such
components to the market value of the Combination Product.
2.7 Internal Sales. Sales among Immunex and its licensees shall not be subject
--------------
to royalties, but in such cases royalties shall be calculated upon the
quarterly Net Sales of Immunex or its licensees to Third Parties.
2.8 One Royalty. The obligation to pay royalties shall be imposed only once
-----------
with respect to the same unit of a Former INOP Royalty Product.
2.9 Samples. No royalties shall accrue on disposition of reasonable quantities
-------
of a Former INOP Royalty Product for no charge as samples or donations to
Third Parties.
2.10 Records. Immunex shall keep and maintain, and shall require its licensees
-------
to maintain, in accordance with generally accepted accounting principles,
proper and complete records and books of account documenting all sales of
the Former INOP Royalty Products in any part of the Territory for a period
of at
-7-
<PAGE>
least three (3) years following the end of each Calendar Year. At ACY's
request and expense, each Payor, as applicable, shall permit an independent
public accountant selected by ACY to have access, not more than once in any
consecutive four (4) Calendar Quarters, to such books and records for the
sole purpose of determining the correctness of all calculations of Net
Sales and royalties reported hereunder; provided, however, if such
independent public accountant reasonably determines that such royalties
have been, for any Calendar Quarter, after normal adjustments, understated
by an amount equal to or greater than ten percent (10%), the responsible
Payor shall, in addition to remitting the royalty underpayment with
interest thereon as set forth in Section 3.1 hereof, pay all reasonable
fees and disbursements incurred by such independent public accountant in
the course of making such determination. ACY shall provide at least twenty
(20) days' prior notice before such inspection and all such inspections
shall be conducted during normal business hours. Upon the expiration of
three (3) years following the end of any Calendar Year, the calculation of
royalties in respect of such Calendar Year shall be binding and conclusive
upon ACY. ACY agrees that any such independent public accountant shall be
subject to an obligation to maintain any information reviewed in
confidence.
ARTICLE 3. CURRENCY
3.1 U.S. Currency. All payments to be made under this Agreement shall be made
-------------
in U.S. dollars by bank wire transfer in immediately available funds to a
bank account designated by ACY. Any payments to be made to ACY under this
Agreement that are late under the applicable terms set forth herein shall
include interest accrued at the prime lending rate of The Chase Manhattan
Bank (or any successor entity thereto) in effect at the time such payment
became overdue.
ARTICLE 4. INDEMNIFICATION
4.1 Indemnification by Immunex. Except as set forth in Section 4.2 below, and
--------------------------
except to the extent caused by ACY's negligent or more culpable acts or
omissions, Immunex shall indemnify, defend and hold ACY harmless from and
against any liabilities, damages, costs or expenses, including reasonable
attorneys' fees (collectively, the "Liabilities"), (a) that ACY incurs as a
-----------
result of exercise by Immunex of any rights accruing to Immunex under this
Agreement, (b) that arise from any claim, lawsuit or other action by a
Third Party resulting from the breach by Immunex of any of its covenants
contained within this Agreement, or (c) that arise from any claim, lawsuit
or other action by a Third
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<PAGE>
Party caused by the manufacture, use or sale of any Former INOP Royalty
Product, including, but not limited to, a claim, lawsuit, or other action
related to the death of or injury to a Third Party.
4.2 Indemnification by ACY. Except as set forth in Section 4.1 above, and
----------------------
except to the extent caused by Immunex's negligent or more culpable acts or
omissions, ACY shall indemnify, defend and hold Immunex harmless from and
against any Liabilities (a) that Immunex incurs as a result of exercise by
ACY of any rights accruing to ACY under this Agreement or (b) that arise
from any claim, lawsuit or other action by a Third Party resulting from the
breach by ACY of any of its covenants contained within this Agreement.
4.3 Indemnification Procedures. A Party (the "Indemnitee") which intends to
-------------------------- ----------
claim indemnification under Section 4.1 or 4.2 above shall promptly notify
the other Party (the "Indemnitor") in writing of any claim, lawsuit or
----------
other action in respect of which the Indemnitee or any of its directors,
officers, employees, agents and Affiliates intend to claim such
indemnification. The Indemnitee shall permit, and shall cause its
directors, officers, employees, agents and Affiliates to permit, the
Indemnitor, at its discretion, to settle any such claim, lawsuit or other
action and agrees to the complete control of such defense or settlement by
the Indemnitor; provided, however, such settlement does not adversely
affect the Indemnitee's rights hereunder or impose any obligations on the
Indemnitee in addition to those set forth herein in order for it to
exercise such rights. The Parties agree that the Indemnitor shall select
counsel reasonably satisfactory to the Indemnitee to undertake the defense
of any claim, lawsuit or other action against the Indemnitee covered by the
Indemnitor's indemnity hereunder. No such claim, lawsuit or other action
shall be settled without the prior written consent of the Indemnitor and
the Indemnitor shall not be responsible for any legal fees or other costs
incurred other than as provided herein. The Indemnitee, its directors,
officers, employees, agents and Affiliates shall cooperate fully with the
Indemnitor and its legal representatives in the investigation and defense
of any claim, lawsuit or other action covered by this indemnification. The
Indemnitee shall have the right, but not the obligation, to be represented
by counsel of its own selection and expense.
ARTICLE 5. TERM; TERMINATION
5.1 Term. The "Term" of this Agreement shall commence as of the Effective Date
and, subject to the provisions in this Article 5, shall continue in effect
until the expiration of the latest of Immunex's obligations to make
payments to ACY that are required pursuant to this Agreement.
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<PAGE>
5.2 Termination.
(a) Material Breach. Notwithstanding any other provision of this Article
5, failure by either Party (the "Defaulting Party") to comply with any
of the material obligations contained in this Agreement shall entitle
the other Party (the "Nondefaulting Party") to give to the Defaulting
Party notice specifying the nature of the default and requiring it to
cure such default. If the Defaulting Party disagrees with the
existence, extent or nature of the default, the Parties shall use good
faith efforts to resolve the dispute. If (1) such default is not
cured within sixty (60) days after the receipt of such notice, or (2)
if such default cannot be cured within such sixty (60)-day period and
the Defaulting Party delivers a certificate to the Nondefaulting Party
that such material breach is not reasonably capable of being cured
within sixty (60)-day period and that the Defaulting Party is working
diligently to cure such breach, provided that in no event shall the
time for curing such material breach exceed an additional sixty (60)
days, or (3) the Parties have not otherwise resolved the dispute
during such period, the Nondefaulting Party shall be entitled, except
as otherwise specifically provided in this Agreement, without
prejudice to any of its other rights conferred on it by this
Agreement, to terminate this Agreement.
(b) Insolvency or Bankruptcy. Either Party may, in addition to any other
remedies available to it by law or in equity, terminate this Agreement
by written notice to the other party (the "Insolvent Party") in the
event such other Party shall have become insolvent or bankrupt, or
shall have made an assignment for the benefit of its creditors, or
there shall have been appointed a trustee or receiver of the Insolvent
Party or for all or a substantial part of its property, or any case or
proceeding shall have been commenced or other action taken by or
against the Insolvent Party in bankruptcy or seeking reorganization,
liquidation, dissolution, winding-up arrangement, composition or
readjustment of its debts or any other relief under any bankruptcy,
insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect, or there shall have been
issued a warrant of attachment, execution or similar process against
any substantial part of the property of the Insolvent Party, and any
such event shall have continued for sixty (60) days undismissed,
unbonded and undischarged.
5.3 Consequences of Termination. In the event of termination of this
Agreement by ACY under Section 5.2(a) or (b) hereof, Immunex's obligation
to pay
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<PAGE>
royalties on Former INOP Royalty Products shall survive through the end of
the period set forth in Section 2.1 hereof, and the terms in Article 2
hereof applicable to royalties shall continue to apply for the same period.
5.4 Accrued Rights, Surviving Obligations. Except as set forth herein, any
termination, cancellation or expiration of this Agreement shall not relieve
either Party of any obligation which has accrued prior to the date of such
termination, cancellation or expiration including, but not limited to,
Immunex's obligations under Section 5.3 hereof and Article 4 hereof, which
obligations shall remain in full force and effect for the period provided
therein or, if no period is provided therein, indefinitely.
ARTICLE 6. PUBLIC ANNOUNCEMENTS; USE OF NAMES
6.1 Public Announcements. The Parties acknowledge their mutual intent to issue
--------------------
a press release regarding this Agreement at a mutually agreeable time. The
Parties agree that they shall coordinate the initial announcement or press
release relating to the existence of this Agreement so that such initial
announcement or press release by each is made contemporaneously, or is made
as a joint press release. For all disclosures under this Section 6.1,
except for such disclosure as is deemed necessary, in the reasonable
judgment of the responsible Party, to comply with federal or state laws or
regulations, no public announcement or news releases relating to the
subject matter herein or either Party's performance hereunder
(collectively, a "Publication") shall be made without the other Party's
-----------
prior approval. Each Party agrees to submit such Publication it proposes
to make to the other Party for purposes of such other Party's review and
comment or, if required pursuant to this Section 6.1, approval. Any such
disclosure will not contain confidential business or technical information
of the other Party, unless if disclosure of such confidential business or
technical information is required by law or regulation, in which case the
disclosing Party will redact if permissible by such law or regulation, or
otherwise make reasonable efforts to minimize such disclosure and obtain
confidential treatment for any such information which is disclosed by
requirement of such law or regulation. Except as otherwise required by
such law or regulation, the Party whose press release has been reviewed
shall consider in good faith the removal of any information the reviewing
Party reasonably deems to be inappropriate for disclosure. Each Party
further agrees to respond as promptly as reasonably practicable but, in any
event, within fifteen (15) days following receipt from the other Party of
such proposed Publication, and likewise agrees that it shall not
unreasonably withhold approval of such Publication.
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<PAGE>
6.2 Use of Names. Except as expressly provided for herein, in connection with
------------
the subject matter hereof, neither Party shall, without the prior written
consent of the other Party: (a) use in advertising, publicity, promotional
premiums or otherwise, excluding internal communications, any trademark,
trade device, service mark, symbol, or any abbreviation, contraction or
simulation thereof owned by the other Party or (b) represent, either
directly or indirectly, that any product or service of the other Party is a
product or service of the representing Party.
ARTICLE 7. INDEPENDENT PARTIES
7.1 Independent Parties. At all times during the term of this Agreement,
-------------------
Immunex, on the one hand, and ACY and its Affiliates, on the other hand,
shall be deemed and shall in fact be independent of one another and neither
shall be authorized or empowered hereby to act as the agent for the other
Party for any purpose whatsoever or, on behalf of the other, enter into any
contract, warranty or representation as to any matter.
ARTICLE 8. MISCELLANEOUS
8.1 Waiver. Any term or condition of this Agreement may be waived or qualified
------
at any time by the Party entitled to the benefit thereof by a written
instrument that specifically identifies this Agreement and the term or
condition to be waived or qualified and is executed by a duly authorized
officer of such Party. No delay or failure on the part of either Party in
exercising any rights hereunder, and no partial or single exercise thereof,
shall constitute a waiver of such rights or of any other rights hereunder.
8.2 Governing Law. With the exception of patent matters which shall be
-------------
governed by application of national patent laws, this Agreement shall be
construed and the respective rights of the Parties determined in accordance
with the laws of the State of New Jersey.
8.3 Assignment. Neither Party may assign its interest under this Agreement
----------
without the prior written consent of the other Party, provided, however,
that either Party may assign its rights and obligations under this
Agreement, without the prior written consent of the other Party, to a
successor of the assigning Party's business by reason of merger, sale of
all or substantially all of its assets or other form of acquisition,
provided that such successor agrees in writing to be bound by this
Agreement. Such consent to the assignment of this Agreement shall not be
unreasonably withheld. Any purported assignment without a required consent
shall be void. Subject to the foregoing, any
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<PAGE>
reference to Immunex or ACY in this Agreement shall be deemed to include
the successors thereto and assigns thereof.
8.4 Severance. If any provision of this Agreement is held to be invalid or
---------
unenforceable by a court of competent jurisdiction, all other provisions
shall continue in full force and effect.
8.5 Notices.
-------
(a) All notices required or permitted to be given under this Agreement
shall be in writing and shall be sent by registered or certified mail
(return receipt requested), or by overnight courier service, postage
prepaid in each case, or by facsimile (and promptly confirmed by such
registered or certified mail or overnight courier service) to the
receiving Party at such Party's address set forth below, or at such
other address as may from time to time be furnished by similar notice
by either Party. The effective date of any notice hereunder shall be
the date of receipt by the receiving Party.
(b) Notices to AHP or ACY shall be addressed to:
Wyeth-Ayerst Research
555 East Lancaster
St. Davids, Pennsylvania 19087
Attention: Senior Vice President-Global Business Development
Facsimile No.: (610) 688-9498
Copy to: AMERICAN HOME PRODUCTS CORPORATION
Five Giralda Farms
Madison, New Jersey 07940
Attention: Senior Vice President and General Counsel
(c) Notices to Immunex shall be addressed to:
IMMUNEX CORPORATION
51 University Street
Seattle, Washington 98101
Attention: Chief Financial Officer
Facsimile No.: (206) 292-9271
Copy to: General Counsel at the same address.
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<PAGE>
8.6 Force Majeure. No failure or omission by either Party in the performance
-------------
of any obligation under this Agreement (except the obligation to pay money)
shall be deemed a breach hereof or create any liability if the same arises
from any cause beyond the control and without the fault or negligence of
the Party so affected, including but not limited to, the following: act of
God; acts or omissions of any government; any rule, regulation or order
issued by any governmental authority or by any officer, department, agency
or instrumentality thereof; fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot; invasion; or strike, lockout or other work
stoppage. The Party so affected shall give prompt written notice to the
other Party of such force majeure, and shall take whatever reasonable steps
are necessary to cure such failure or omission as soon as is practicable
after the occurrence of the force majeure.
8.7 Further Assurances. At the request of either Party hereto, the other Party
------------------
shall execute and deliver from time to time such further instruments and
shall provide reasonable cooperation in such proceedings or actions as
shall be necessary or reasonably appropriate to effectuate the purposes of
this Agreement.
8.8 Headings. All headings are for reference purposes only and shall not in
--------
any way affect the meaning or interpretation of this Agreement.
8.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.10 Entire Agreement. This Agreement constitutes the entire agreement between
----------------
the Parties relative to the specific subject matter hereof and supersedes
all previous arrangements whether written or oral, concerning the specific
subject matter hereof. Any amendment or modification to this Agreement
shall be of no effect unless made in a writing that specifically references
this Agreement and signed by both Parties.
[This space is intentionally left blank.]
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<PAGE>
IN WITNESS WHEREOF, the Parties, intending to be bound hereby, have caused
their duly authorized representatives to execute this Agreement.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Gerald A. Jibilian
------------------------------------
Name: Gerald A. Jibilian
----------------------------------
Title: Vice President
---------------------------------
Date: 6/25/98
----------------------------------
AMERICAN CYANAMID COMPANY
By: /s/ Gerald A. Jibilian
------------------------------------
Name: Gerald A. Jibilian
----------------------------------
Title: Vice President
---------------------------------
Date: 6/25/98
----------------------------------
IMMUNEX CORPORATION
By: /s/ Edward V. Fritzky
------------------------------------
Edward V. Fritzky
Chairman and Chief Executive Officer
Date: 6/24/98
----------------------------------
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