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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period From _____ to _____
COMMISSION FILE NUMBER
0-19986
CELL GENESYS, INC.
(Exact name of Registrant as specified in its charter)
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<CAPTION>
<S> <C>
Delaware 94-3061375
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
</TABLE>
322 Lakeside Drive, Foster City, California 94404
(Address of principal executive offices and zip code)
(415) 358-9600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes_X No___
As of July 31, 1996, the number of outstanding shares of the
registrant's Common Stock , $.001 par value, was 16,445,416.
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CELL GENESYS, INC.
TABLE OF CONTENTS
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Item Page
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PART I. FINANCIAL INFORMATION
1. Financial Statements:
a. Consolidated Balance Sheets -- June 30, 1996 and December 31, 1995 3
b. Consolidated Statements of Operations -- Three and Six Months Ended
June 30, 1996 and 1995 4
c. Consolidated Statements of Cash Flows -- Six Months Ended
June 30, 1996 and 1995 5
d. Note to Consolidated Financial Statements 6
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-10
PART II. OTHER INFORMATION
1. Legal Proceedings 10
4. Submission of Matters to a Vote of Security Holders 11
6. Exhibits and Reports on Form 8-K 12
SIGNATURE 13
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2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CELL GENESYS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
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<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
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ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 11,719 $ 8,190
Short-term investments 68,673 73,739
Prepaid expenses and other current assets 1,010 1,176
------------------------------------------------------
Total current assets 81,402 83,105
Property and equipment at cost, net 8,799 10,032
Deposits and other assets 382 983
------------------------------------------------------
$ 90,583 $ 94,120
======================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,003 $ 357
Accrued compensation and benefits 1,021 1,165
Deferred revenue from related parties 2,414 2,104
Other accrued liabilities 1,329 975
Current portion of property and equipment
financing 2,560 2,406
------------------------------------------------------
Total current liabilities 8,327 7,007
Non-current portion of property and
equipment financing 6,865 7,720
Stockholders' equity:
Common stock 16 16
Additional paid-in capital 126,778 125,836
Accumulated deficit (51,403) (46,459)
------------------------------------------------------
Total stockholders' equity 75,391 79,393
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$ 90,583 $ 94,120
======================================================
</TABLE>
See accompanying note.
3
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CELL GENESYS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1996 1995 1996 1995
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(In thousands except per share data)
<S> <C> <C> <C> <C>
Revenue under collaborative agreements with
related parties $ 6,210 $ 1,636 $ 10,601 $ 3,105
Operating expenses:
Research and development 6,299 6,613 12,988 12,742
General and administrative 1,714 1,466 3,472 2,905
--------------------------------------------------------
Total operating expenses 8,013 8,079 16,460 15,647
Interest income 1,061 972 2,295 1,901
Interest expense (291) (259) (592) (478)
--------------------------------------------------------
Net loss $ (1,033) $ (5,730) $ (4,156) $(11,119)
========================================================
Net loss per share $ (0.06) $ (0.42) $ (0.26) $ (0.81)
========================================================
Weighted average shares outstanding 16,335 13,807 16,287 13,783
========================================================
</TABLE>
See accompanying note.
4
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CELL GENESYS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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<CAPTION>
Six months ended June 30,
1996 1995
-------------------------
(In thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (4,156) $(11,119)
Adjustments to reconcile net loss to net cash used
by operating activities:
Depreciation and amortization 1,827 1,668
Changes in certain assets and liabilities:
Prepaid expenses and other current assets 166 763
Deposits and other assets 601 23
Accounts payable 646 (603)
Accrued compensation and benefits (144) (92)
Deferred revenue from related parties 310 825
Other accrued liabilities 354 622
-------------------------
Net cash used by operating activities (396) (7,913)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short-term investments (51,310) (20,888)
Maturities of short-term investments 16,782 10,999
Sales of short-term investments 38,806 3,972
Capital expenditures (82) (362)
-------------------------
Net cash provided (used) by investing
activities 4,196 (6,279)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt -- 3,000
Payments under property and equipment
financing obligations (1,213) (775)
Proceeds from issuance of common stock 942 253
-------------------------
Net cash provided (used) by financing
activities (271) 2,478
-------------------------
Net increase (decrease) in cash and cash equivalents 3,529 (11,714)
Cash and cash equivalents at beginning of period 8,190 23,112
-------------------------
Cash and cash equivalents at end of period $ 11,719 $ 11,398
=========================
</TABLE>
See accompanying note.
5
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CELL GENESYS, INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying consolidated financial statements at June 30, 1996 and
for the three and six months ended June 30, 1996 and 1995 include the accounts
of Cell Genesys, Inc., including its wholly-owned subsidiary, Abgenix, Inc.
(collectively the "Company"). These statements are unaudited, but include all of
the adjustments, consisting only of normal recurring adjustments, which the
management of the Company considers necessary for a fair presentation of the
Company's financial position at such dates and the operating results and cash
flows of those periods. The results of the interim period are not necessarily
indicative of the results for the entire year.
The consolidated financial statements should be read in conjunction with
the audited financial statements and notes thereto included in the Company's
Annual Report for the year ended December 31, 1995.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Outlook
Cell Genesys (the "Company") is focused on the development and
commercialization of gene therapies to treat major, life-threatening diseases,
including AIDS and cancer. The Company's objective is to commercialize both ex
vivo gene therapy with genetically engineered human immune cells and in vivo
gene therapies. Since its inception in 1988, the Company has funded its research
and development activities primarily through the sale of equity, corporate
partnerships and leaseline financings. The Company has been unprofitable since
its inception and has incurred a cumulative net loss of $51.4 million. In June
1996, Cell Genesys announced the establishment of Abgenix, Inc. ("Abgenix"), a
wholly-owned subsidiary which will focus exclusively on the development and
commercialization of the Company's human monoclonal antibodies for
pharmaceutical applications, including inflammation, autoimmune disorders, and
cancer. All partnership interests and intellectual property relating to the
Company's antibody business have been transferred to Abgenix as part of its
initial formation. The following discussion constitutes forward looking
statements insofar as it relates to progress in the Company's research and
development programs and clinical trials, product expectations, in-licensing
plans, expected cash expenditures and expense levels, and the adequacy of the
Company's available resources. Actual results could differ materially from the
statements made due to a number of factors, including those set forth in "Risk
Factors" below.
In the Company's lead gene therapy program, safety results for the
Company's Phase I clinical trial testing AIDS gene therapy indicated no
treatment-related safety problems. The Phase II portion of this trial is
underway to evaluate safety and efficacy of repeated treatments over an extended
period. During June 1996, the Company increased patient enrollment in a second
Phase II clinical trial to evaluate patient-specific AIDS gene therapy. In
connection with this initial enrollment, the Company received a $2 million
milestone payment under its collaboration with Hoechst Marion Roussel, Inc.
("HMR"). Preliminary efficacy data for both of these trials could be available
at the end of 1996. In 1995, the Company initiated preclinical research to
develop gene therapies for specific cancers, such as breast, colon and lung.
Based on successful preclinical studies, the Company could initiate human
clinical testing for its initial cancer gene therapy product candidate in 1997.
The Company also has ongoing research programs in stem cell gene therapy, gene
delivery technology and universal donor cells. The Company believes that these
programs may provide opportunities for collaborative arrangements with third
parties that could also provide additional funding to the Company.
In the Company's human monoclonal antibody program (now being pursued
through Abgenix), the Company has developed transgenic technology to create
strains of mice capable of producing human monoclonal antibodies. The Company
has created strains of mice which now contain the majority of human antibody
genes and could produce a wider range of product candidates than the Company's
earlier strains of mice. The Company believes that fully human antibodies should
avoid the allergic reactions seen with antibodies containing mouse proteins,
which should make them better suited to long-term therapy and could provide a
marketing advantage. In 1995, the Company initiated preclinical studies of a
human antibody to Interleukin-8 (IL-8), which potentially could be used as a
treatment to inhibit excess inflammation in certain diseases such as psoriasis,
adult respiratory disease syndrome (ARDS), rheumatoid arthritis and reperfusion
injury associated with heart attack or stroke. Based on progress of preclinical
studies, Abgenix could initiate human clinical trials for this antibody product
candidate during the second half of 1997.
The Company's net cash expenditures for 1996 are not expected to exceed
$18 million and the Company intends to manage toward this net cash expenditure
target. The Company may from time to time evaluate opportunities to acquire or
in-license potential products which may be at a later stage of development than
the
7
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Company's current product candidates. Expenses associated with in-licensing such
products may constitute unbudgeted expenses.
Results of Operations
Revenue increased from $1.6 million and $3.1 million for the three and six
months ended June 30, 1995 to $6.2 million and $10.6 million for the three and
six months ended June 30, 1996, respectively. The increase reflects revenues
from the collaboration with HMR which was entered into in October 1995 for the
Company's AIDS gene therapy program, including a $2.0 million milestone payment
earned during the second quarter. Under the collaboration, HMR is committed to
fund research and development for the Company's AIDS gene therapy program
initially for two years. Other revenues resulted from the Company's joint
venture ("Xenotech") with JT Immunotech USA Inc. ("JT Immunotech") in its human
monoclonal antibody program.
Research and development expenses were largely unchanged for the three and
six month periods ended June 30, 1995 and 1996, respectively. The Company
expects its research and development expenditures, including expansion of
facilities, to increase in future periods to support additional product
development activities. The rate of increase depends on a number of factors
including progress in research and development, especially clinical trials.
Research and development expenses represented approximately 80% of total
expenses for each of the three and six month periods.
General and administrative expenses increased from $1.5 million and $2.9
million for the three and six months ended June 30, 1995 to $1.7 million and
$3.5 million for the three and six months ended June 30, 1996, respectively. The
increase reflects additional administrative staff and outside services required
to support expanded research and development programs. The Company expects these
expenses to continue to increase as the research and development programs
expand.
Interest income increased from $972,000 and $1.9 million for the three and
six months ended June 30, 1995 to $1.1 million and $2.3 million for the three
and six months ended June 30, 1996 respectively. The increase was due to $20.0
million received by Cell Genesys during the fourth quarter of 1995 in connection
with the equity investment made by HMR, partially offset by a decline in average
interest rates obtained on investments. Interest expense increased from $259,000
and $478,000 for the three and six months ended June 30, 1995 to $291,000 and
$592,000 for the three and six months ended June 30, 1996, respectively, due to
higher levels of property and equipment financing.
The Company's net loss decreased from $11.1 million to $4.2 million for
the six months ended June 30, 1995 and 1996, respectively. The increase in
revenues as a result of the Company's collaboration with HMR for AIDS gene
therapy exceeded the increase in operating expenses in the first six months of
1996 as compared to 1995. Losses are expected to continue and are likely to
increase as operating expenses rise, particularly as the Company incurs expenses
related to expanded manufacturing and human testing of its potential products.
At December 31, 1995, the Company had available net operating loss and
research credit carryforwards for federal income tax purposes of approximately
$36.1 million and $2.0 million, respectively, which expire in the years 2003
through 2010.
Liquidity and Capital Resources
The Company has financed its operations primarily through the sale of
equity securities, funding under collaborative arrangements and equipment
financing. From inception through June 30, 1996, the Company has received $124.6
million in net proceeds from equity financing and $53.7 million under
collaborative agreements, and utilized $15.3 million in property and equipment
financing.
8
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At June 30, 1996, the Company's cash, cash equivalents and short-term
investments totaled $80.4 million, compared to $81.9 million at December 31,
1995. The decrease was primarily due to payments of property and equipment
financing obligations.
The Company expects its cash requirements to increase significantly in the
future. The Company's capital requirements depend on numerous factors, including
the progress of its research and development programs; preclinical and clinical
trials; clinical and commercial scale manufacturing requirements; the attraction
and maintenance of collaborative partners; the acquisition of new products or
technologies; and the cost of litigation, patent interference proceedings or
other legal proceedings. The Company is currently a party to litigation in the
human monoclonal antibody area.
Under its current collaborations, the Company is responsible for funding a
portion of its research and development efforts. Substantial capital may be
required to carry out additional product development and to commercialize
products under the current collaborations and the Company's self-funded efforts.
The Company believes that its available cash, cash equivalents and
short-term investments at June 30, 1996, together with payments to be received
under the Company's collaborative arrangements with HMR and Xenotech, and $2.9
million in equipment financing available for capital equipment purchases will be
sufficient to meet the Company's operating expenses and capital requirements at
least through 1998. Thereafter, the Company will require substantial additional
funds. Because of the Company's significant long-term cash requirements, it will
seek to raise additional capital if conditions in the Company and the public
equity markets are favorable, even if the Company does not have an immediate
need for additional cash at that time.
Risk Factors
There are significant risks associated with the Company's plans and goals,
including but not limited to the success of the Company's research and
development programs; the lengthy, expensive and uncertain regulatory approval
process; uncertainties and costs associated with obtaining third party licenses,
obtaining patent protection, protecting trade secrets, enforcing intellectual
property rights important to the Company's business and avoiding infringement of
others' intellectual property; competitive products; and the availability of
capital to fund the Company's operations and capital requirements. Some or all
of these factors may affect the Company's goals to file INDs, advance product
candidates through the clinical trial process and to commercialize products.
Even if the Company's goals are fully achieved, the Company does not anticipate
commercialization of any product for several years.
Because of the novelty of the Company's gene therapy technology, clinical
trials are more difficult than for products based on more traditional
technologies. In addition, a variety of factors could hinder or delay progress
in clinical trials of the Company's products or require their discontinuance,
including results of ongoing preclinical studies by the Company or others,
technical or manufacturing difficulties, clinical trial results for the
Company's or competing products, intellectual property disputes with third
parties, and/or delays relating to the review process by the FDA. Although
preliminary results of the Company's Phase I clinical testing of AIDS gene
therapy reported to date have shown no treatment-related safety problems, there
can be no assurance that this therapy will be tolerated over an extended period
of time or that the clinical efficacy of this therapy will be demonstrated.
The Company believes that a human antibody product such as that being
developed through its subsidiary, Abgenix, could be clinically superior to
products containing mouse protein, and that it could have marketing advantages
over such other products. However, until human testing has taken place, it is
not certain that human antibody products will demonstrate these advantages.
Countervailing marketing factors, such as relative price, undesirable side
effects, and/or relative marketing expertise, may serve to offset or outweigh
these advantages. In addition, as previously disclosed, the Company is involved
in litigation with GenPharm
9
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International, Inc. related to the intellectual property underlying the
generation of fully human monoclonal antibodies. The complaints are disclosed in
more detail in the Company's Annual Report on Form 10-K and in the Company's
Form 10-Q filed for the quarterly period ended March 31, 1996. Litigation can be
unpredictable and costly. Adverse resolution of any intellectual property matter
could have a material adverse effect on the Company.
There is no assurance that opportunities for in-licensing later-stage
products or for third party collaborations will be available to the Company on
acceptable terms. Finding such opportunities, as well as a variety of other
factors, such as progress in the Company's research and development programs
(including clinical trials), receipt of anticipated contract revenues (some of
which are dependent on milestones), competitive factors, and the costs
associated with prosecuting and defending the Company's intellectual property
rights, may affect the Company's ability to manage to its targeted net cash
expenditures in 1996, and also may affect the adequacy of the Company's
resources to fund operations and capital requirements at least through 1998.
Failure to achieve the Company's goals could have a material adverse
impact on the Company's results of operations and financial condition and its
ability to raise additional capital. Stockholders and potential investors should
carefully consider the risks associated with the Company and should be aware
that these risks may negatively impact the Company's stock price.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See the Company's Form 10-Q filed for the quarterly period ended March 31,
1996.
10
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 14, 1996, in the annual stockholders' meeting, a quorum of
stockholders of the Company approved the following proposals: (i) the
re-election of the Board of Directors; (ii) approval of an amendment to the
Company's 1989 Incentive Stock Option Plan increasing the number of shares of
Common Stock reserved for future issuance by 500,000; (iii) approval of an
amendment to the Company's Employee Stock Purchase Plan increasing the number of
shares of Common Stock reserved for future issuance by 250,000; (iv)
ratification of the appointment of Ernst & Young to serve as the Company's
independent auditors for the ensuing year.
The following table shows the results of the voting on these matters.
Proposal 1. Election of Directors
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<CAPTION>
Director For Withheld
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M. Kathleen Behrens, Ph.D. 14,117,080 613,981
Peter Barton Hutt 14,126,780 604,281
Raju S. Kucherlapati, Ph.D 14,127,580 603,481
Jospeh E. Maroun 14,126,980 604,081
Stephen A. Sherwin, M.D. 14,126,781 604,280
Yasushi Shingai 14,127,180 603,881
Eugene L. Step 14,126,980 604,081
</TABLE>
Proposal 2. Approval of Amendment to the 1989 Incentive Stock Plan
For Against Abstain
13,083,917 1,513,754 15,235
Proposal 3. Approval of Amendment to the Employee Stock Purchase Plan
For Against Abstain
13,861,451 739,970 11,485
Proposal 4. Ratification of Appointment of Independent Auditors
For Against Abstain
14,708,216 18,275 4,570
11
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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a) Exhibits
10.30 Reassignment dated January 1, 1996 of Dana-Farber Cancer Institute
License Agreement between Registrant and Xenotech L.P.
10.31 Amendment No. 1 dated March 22, 1996 to Field License (Exhibit 10.14).
10.32 Amendment No. 2 dated June 28, 1996 to Field License (Exhibit 10.14).
10.33 Amendment No. 1 dated June 28, 1996 to Expanded Field License (Exhibit
10.15).
10.34* Amendment No. 2 dated June 28, 1996 to Joint Venture Agreement
(Exhibit 10.11).
10.35 Amendment No. 4 dated June 28, 1996 to Limited Partnership Agreement
(Exhibit 10.12).
10.36* Amendment No. 4 dated June 28, 1996 to Collaboration Agreement
(Exhibit 10.13).
10.37* Agreement dated June 28, 1996 to Terminate Xenotech Division Research
Agreement between Registrant, Xenotech L.P. and JT Immunotech USA Inc.
10.38* Master Research License and Option Agreement dated June 28, 1996
between Registrant, Japan Tobacco Inc. and Xenotech L.P.
10.39* Universal Receptor License and Option Agreement dated June 28, 1996
between Registrant and Xenotech L.P.
</TABLE>
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* Confidential treatment has been requested with respect to
specified portions of this exhibit.
b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended
June 30, 1996.
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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, thereunto duly authorized.
Date: August 13, 1996 CELL GENESYS, INC.
/s/ KATHLEEN SEREDA GLAUB
----------------------------------
Kathleen Sereda Glaub
Senior Vice President and Chief Financial Officer
(On behalf of the Registrant and as Registrant's
Principal Financial Officer)
<PAGE> 1
Exhibit 10.30
REASSIGNMENT OF DFCI LICENSE AGREEMENT
This REASSIGNMENT AGREEMENT (the "Reassignment Agreement"), effective
as of January 1, 1996 (the "Effective Date"), is entered by and between CELL
GENESYS, INC., a Delaware corporation ("CGI"), and XENOTECH, L.P., a California
partnership ("XENOTECH").
1. DEFINITIONS
1.1 "DFCI License Agreement" shall mean that certain Licensing
Agreement effective as of June 17, 1992, by Dana-Farber Cancer Institute, Inc.
("DFCI") and CGI, as amended, attached hereto as Exhibit A.
1.2 "Assignment Agreement" shall mean that certain Assignment Agreement
effective as of December 31, 1993 by and between XENOTECH and CGI.
1.3 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with any one of CGI, XENOTECH or JT Immunotech USA
Inc. ("JT"). An entity shall be regarded as in control of another entity if it
owns or controls at least fifty percent (50%) of the shares of the subject
entity entitled to vote in the election of directors (or, in the case of an
entity that is not a corporation, for the election of the corresponding managing
authority); provided, however, XENOTECH shall not be an Affiliate of CGI or JT
under this Agreement and XENOTECH shall not be considered controlled by CGI or
JT for purposes of determining Affiliates of CGI or JT.
2. ASSIGNMENT
2.1 XENOTECH hereby conveys, assigns and transfers to CGI its entire
right, title and interest in and to the DFCI License Agreement, as previously
assigned to XENOTECH pursuant to the Assignment Agreement, subject to the terms
and conditions of this Reassignment Agreement.
2.2 CGI agrees to assume and comply fully with all of its obligations
under the DFCI License Agreement including, but not limited to, milestone
payments, royalties, patent expenses, due diligence requirements, reports and
records, indemnification and any and all other obligations.
3. INDEMNIFICATION
3.1 CGI shall indemnify, defend and hold harmless XENOTECH, JT and its
Affiliates, and their officers, directors, employees, agents and their
successors, heirs and assigns against any liability, damage, loss or expense
(including reasonable, attorneys' and professional fees and expenses of
litigation) incurred by or imposed upon XENOTECH in connection with any
<PAGE> 2
claims, suits, actions, demands, or judgments arising out of any theory of
liability (including, but not limited to, actions in the form of tort, warranty
or strict liability) concerning any product, process or service, made, used or
sold pursuant to any right or sublicense granted under this Reassignment
Agreement or the DFCI License Agreement.
3.2 CGI's obligations under Section 3.1 shall not apply to any
liability, damage, loss or expense to the extent that it arises from actions
occurring between January 1, 1994 and December 31, 1995.
3.3 The indemnity of XENOTECH pursuant to Article 4 of the Assignment
Agreement shall hereby be terminated except for any liability, damage, loss or
expense to the extent that it arises from actions occurring between January 1,
1994 and December 31, 1995. The provisions of Section 4.2 of the Assignment
Agreement shall not apply to any such XENOTECH obligations arising hereunder.
4. WARRANTIES
4.1 XENOTECH has not granted to any person any lien, encumbrance or
sublicense which would materially interfere with CGI's rights under this
Agreement.
4.2 XENOTECH MAKES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE
WITH RESPECT TO ANY INVENTION, TECHNICAL INFORMATION, CONFIDENTIAL OR OTHER
INFORMATION, OR TANGIBLE RESEARCH PROPERTY, LICENSED TO CGI BY DFCI OR OTHERWISE
PROVIDED TO CGI HEREUNDER AND HEREBY DISCLAIMS THE SAME.
4.3 XENOTECH DOES NOT WARRANT THE VALIDITY OF ANY OF THE PATENT RIGHTS
LICENSED BY DFCI TO CGI AND REASSIGNED HEREIN TO CGI, AND MAKES NO
REPRESENTATION WHATSOEVER WITH REGARD TO THE SCOPE OF THE PATENT RIGHTS OR THAT
SUCH PATENT RIGHTS MAY BE EXPLOITED BY CGI, ITS AFFILIATES OR SUBLICENSEES
WITHOUT INFRINGING ANY OTHER PATENTS.
4.4 XENOTECH hereby represents and warrants that the DFCI License
Agreement is in full force and effect, has not been breached by XENOTECH and has
not been amended, waived, terminated or otherwise modified.
5. TERMINATION OF PAYMENTS
XENOTECH and CGI hereby agree that the payment obligations under
Section 3 of the Assignment Agreement shall terminate as of the Effective Date.
-2-
<PAGE> 3
6. MISCELLANEOUS
6.1 The validity and interpretation of this Reassignment Agreement
shall be governed by the laws of the State of California, without reference to
conflicts of laws principles.
6.2 This instrument contains the entire Reassignment Agreement between
the parties hereto with respect to the subject matter herein. No agreement,
conversation or representation between any officers, agents or employees of the
parties hereto either before or after execution of this Reassignment Agreement
shall affect or modify any of the terms or obligations contained herein. No
change, modification, extension, termination or waiver of this Reassignment
Agreement, or any of the provisions contained herein, shall be valid unless made
in writing and signed by a duly authorized representative of each party.
IN WITNESS WHEREOF, the parties hereto have caused this Reassignment
Agreement to be executed by their duly authorized representatives.
CELL GENESYS, INC. XENOTECH, INC. (as General
Partner of Xenotech, L.P.)
By: /s/ R. Scott Greer By: /s/ Takashi Kamiya
--------------------------- ------------------------------
R. Scott Greer Takashi Kamiya
Senior Vice President Chairman
Corporate Development
APPROVED:
JT IMMUNOTECH USA INC.
By: /s/ Yasushi Shingai
--------------------------
Yasushi Shingai
Chairman
-3-
<PAGE> 1
Exhibit 10.31
Amendment No. 1 to Field License
This Amendment No. 1 to Field License ("Amendment") is effective as of
March 22, 1996 among Cell Genesys, Inc. ("CG"), JT Immunotech USA Inc. ("JT")
and Xenotech, L.P. ("Xenotech") concerning the Field License among CG, JT and
Xenotech effective June 12, 1991 (the "Field License").
1. CG, JT and Xenotech hereby amend Article II to add a new Section
2.3 as follows:
2.3 Additional Technology under the Technology Exchange
Agreement. Notwithstanding anything herein to the contrary, no rights or
licenses have been or shall be granted hereunder to Additional
Technology, as such term is defined in the Technology Exchange Agreement
dated March 22, 1996 among CG, Japan Tobacco Inc. and Xenotech.
2. Except as specifically modified or amended hereby the Field
License shall remain in full force and effect and, as so modified or amended,
is hereby ratified, confirmed and approved. No provision of this amendment may
be modified or amended except expressly in a writing signed by the parties nor
shall any terms be waived except expressly in a writing signed by the party
charged therewith. This Amendment shall be governed in accordance with the laws
of the State of California, without regard to principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of
the date shown above on this Amendment.
CELL GENESYS, INC. JT IMMUNOTECH USA INC.
By: /s/ R. Scott Greer By: /s/ Yasushi Shingai
----------------------------- ---------------------------
Name: R. Scott Greer Name: Yasushi Shingai
Title: Senior Vice President Title: President
XENOTECH, L.P.
By: /s/ Takashi Kamiya
-----------------------------
Name: Takashi Kamiya
Title: Chairman
<PAGE> 1
Exhibit 10.32
Amendment No. 2 to Field License
This Amendment No. 2 to Field License ("Amendment") is
effective as of June 28, 1996 among Cell Genesys, Inc. ("CG"), JT
Immunotech USA Inc. ("JT") and Xenotech, L.P. ("Xenotech")
concerning the Field License among CG, JT and Xenotech effective
June 12, 1991 (the "Field License") as amended by Amendment No. 1
dated March 22, 1996 ("Amendment No. 1").
1. CG, JT and Xenotech hereby amend Article 1 to add the
following definition:
"Affiliate" shall mean any entity which controls, is
controlled by or is under common control with any one of CG, JT or
Xenotech. An entity shall be regarded as in control of another entity
if it owns or controls at least fifty percent (50%) of the shares of
the subject entity entitled to vote in the election of directors (or,
in the case of an entity that is not a corporation, for the election of
the corresponding managing authority); provided, however, Xenotech
shall not be an Affiliate of CG or JT under this Agreement and Xenotech
shall not be considered controlled by CG or JT for purposes of
determining Affiliates of CG or JT.
2. CG, JT and Xenotech hereby amend Section 2.2 to read in its
entirety as follows:
2.2 Rights of CG and JT Following Termination.
(a) Except as expressly determined pursuant to Section
10.3 and 10.6 of the Limited Partnership Agreement, upon the
dissolution and liquidation of the Partnership for any reason, JT and
CG shall each have: (i) a co-exclusive license (with the other party)
to use all Project Technology within the Field as determined and to the
extent provided in the Limited Partnership Agreement; and (ii) a
co-exclusive license to use Existing Technology and the other party's
Independent Technology within the Field, solely to the extent necessary
to practice the Project Technology within the Field. Such licenses
shall be irrevocable, perpetual and royalty-free and may only be
assigned without the other party's consent to (a) an Affiliate
(provided that such Affiliate is two-thirds or greater owned directly
or directly) or (b) an entity that acquires substantially all of the
assets of the monoclonal antibody business of the party.
(b) Notwithstanding the provisions of Section 2.2(a) above,
the parties confirm that upon dissolution and liquidation of the
Partnership for any reason, the rights of CG and JT under Section
2.2(a) shall remain subject, without limitation, to
<PAGE> 2
the provisions of (a) the Master Research License and Option Agreement
among CG, Japan Tobacco Inc., and Xenotech dated as of June 28, 1996,
and all product licenses and options therefor under such agreement,
(ii) the Collaboration Agreement, (iii) the Technology Exchange
Agreement among CG, Japan Tobacco Inc. and Xenotech, dated March 22,
1996, (iv) the Anti-IL-8 Product License Agreement among CG, Japan
Tobacco Inc. and Xenotech dated March 19, 1996, (v) the Xenotech
Division Research Agreement, (vi) the Agreement to Terminate Xenotech
Division Research Agreement among CG, JT and Xenotech dated as of June
28, 1996, and (vii) the Universal Receptor License Option Agreement
between the Partnership and CG, effective as of June 28, 1996, and all
Universal Receptor Product Licenses and options therefor under such
agreement, as such agreements may be amended from time to time, which
agreements the parties confirm shall remain in full force and effect in
accordance with their terms and shall be controlling in the event there
shall be any conflict between any such agreement and the rights of CG
and JT under Section 2.2(a) above.
3. Except as specifically modified or amended hereby or by Amendment
No. 1, the Field License shall remain in full force and effect and, as so
modified or amended, is hereby ratified, confirmed and approved. No provision of
this Amendment may be modified or amended except expressly in a writing signed
by the parties nor shall any terms be waived except expressly in a writing
signed by the party charged therewith. This Amendment shall be governed in
accordance with the laws of the State of California, without regard to
principles of conflicts of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of
the date shown above on this Amendment.
JT IMMUNOTECH USA INC. CELL GENESYS, INC.
By: /s/ Yasushi Shingai By: /s/ R. Scott Greer
----------------------- ----------------------------
Yasushi Shingai R. Scott Greer
Chairman Senior Vice President,
Corporate Development
XENOTECH, INC. (as General
Partner of XENOTECH, L.P.)
By: /s/ Takashi Kamiya
-------------------------
Takashi Kamiya
Chairman
By: /s/ Raymond M. Withy
-------------------------
Raymond M. Withy
President and
Chief Executive Officer
-3-
<PAGE> 1
Exhibit 10.33
AMENDMENT NO. 1 TO EXPANDED FIELD LICENSE
This Amendment No. 1 to Expanded Field License ("Amendment")
is effective as of June 28, 1996 among Cell Genesys, Inc. ("CG"),
JT Immunotech USA Inc. ("JT") and Xenotech, L.P. ("Xenotech")
concerning the Expanded Field License among CG, JT and Xenotech
effective June 12, 1991 (the "Expanded Field License").
1. CG, JT and Xenotech hereby amend Article 1 to add the
following definition:
"Affiliate" shall mean any entity which controls, is
controlled by or is under common control with any one of CG, JT or
Xenotech. An entity shall be regarded as in control of another entity
if it owns or controls at least fifty percent (50%) of the shares of
the subject entity entitled to vote in the election of directors (or,
in the case of an entity that is not a corporation, for the election of
the corresponding managing authority); provided, however, Xenotech
shall not be an Affiliate of CG or JT under this Agreement and Xenotech
shall not be considered controlled by CG or JT for purposes of
determining Affiliates of CG or JT.
2. CG, JT and Xenotech hereby amend Section 2.2 to read in its
entirety as follows:
2.2 Rights of CG and JT Following Termination.
(a) Except as expressly determined pursuant to Section
10.3 and 10.6 of the Limited Partnership Agreement, upon the
dissolution and liquidation of the Partnership for any reason, JT and
CG shall each have: (i) a co-exclusive license (with the other party)
to use all Project Technology within the Expanded Field as determined
and to the extent provided in the Limited Partnership Agreement; and
(ii) a co-exclusive license to use Existing Technology and the other
party's Independent Technology within the Expanded Field, solely to the
extent necessary to practice the Project Technology within the Expanded
Field. Such licenses shall be irrevocable, perpetual and royalty-free
and may only be assigned without the other party's consent to (a) an
Affiliate (provided that such Affiliate is two-thirds or greater owned
directly or directly) or (b) an entity that acquires substantially all
of the assets of the monoclonal antibody business of the party.
(b) Notwithstanding the provisions of Section 2.2(a) above,
the parties confirm that upon the dissolution and liquidation of the
Partnership for any reason, the rights of CG and JT under Section
2.2(a) shall remain subject to the provisions, without limitation, of
(i) the Master Research License and Option Agreement among CG, Japan
Tobacco Inc. and Xenotech dated as of June 28, 1996, and all product
licenses and options therefor under such agreement, (ii) the
Collaboration Agreement, (iii) the Technology Exchange Agreement among
CG, Japan Tobacco Inc.
<PAGE> 2
and Xenotech, dated March 22, 1996 (iv) the Anti-IL-8 Product License
Agreement among CG, Japan Tobacco Inc. and Xenotech dated March 19,
1996, (v) the Xenotech Division Research Agreement, (vi) the Agreement
to Terminate Xenotech Division Research Agreement among CG, JT and
Xenotech dated as of June 28, 1996, as such agreements may be amended
from time to time, and (vii) the Universal Receptor License Option
Agreement between the Partnership and CG, effective as of June 28,
1996, and all Universal Receptor Product Licenses and options therefor
under such agreement, as such agreements may be amended from time to
time, which agreements the parties confirm shall remain in full force
and effect in accordance with their terms and shall be controlling in
the event there shall be any conflict between any such agreement and
the rights of CG and JT under Section 2.2(a) above.
3. CG, JT and Xenotech hereby delete Section 2.3 in its
entirety.
4. Except as specifically modified or amended hereby, the Expanded
Field License shall remain in full force and effect and, as so modified or
amended, is hereby ratified, confirmed and approved. No provision of this
Amendment may be modified or amended except expressly in a writing signed by the
parties nor shall any terms be waived except expressly in a writing signed by
the party charged therewith. This Amendment shall be governed in accordance with
the laws of the State of California, without regard to principles of conflicts
of laws.
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of
the date shown above on this Amendment.
JT IMMUNOTECH USA INC. CELL GENESYS, INC.
By: /s/ Yasushi Shingai By: /s/ R. Scott Greer
--------------------------- --------------------------
Yasushi Shingai R. Scott Greer
Chairman Senior Vice President,
Corporate Development
XENOTECH, INC. (as General
Partner of XENOTECH, L.P.)
By: /s/ Takashi Kamiya
---------------------------
Takashi Kamiya
Chairman
By: /s/ Raymond M. Withy
---------------------------
Raymond M. Withy
President and
Chief Executive Officer
-3-
<PAGE> 1
CONFIDENTIAL TREATMENT REQUESTED BY CELL GENESYS, INC.
Exhibit 10.34
AMENDMENT NO. 2 TO JOINT VENTURE AGREEMENT
THIS AMENDMENT No. 2 to Joint Venture Agreement (the "Amendment") is
effective as of June 28, 1996, between CELL GENESYS, INC. ("CG") and JT
IMMUNOTECH USA INC. ("JT") concerning the Joint Venture Agreement between CG and
JT originally effective June 12, 1991 (the "Agreement") as amended by Amendment
No. 1 thereto effective January 1, 1994 ("Amendment No. 1").
CG and JT hereby agree to amend the Agreement as follows:
1. Section 7.2 is hereby amended to read in its entirety as follows:
"7.2 Permitted Transfer. Except as provided herein below,
nothing contained in this Section 7 shall be deemed to prohibit the
transfer of the Company's shares as a result of a Merger, provided that
such transfer also includes the simultaneous transfer of the
transferring party's interest in the Partnership, or to an entity that
acquires substantially all of the monoclonal antibody business segment
of the transferring party of which the Company's shares are a part.
Notwithstanding the foregoing, the rights and obligations of the
parties in the event of a Merger shall be subject to Sections 5.1 and
5.2 of the Limited Partnership Agreement."
2. Section 9.4 is hereby amended to substitute for the last sentence
thereof the following sentence:
"If such further negotiations do not resolve the Deadlock, then
either party shall have the right, on notice to the other party, to
invoke the arbitration provisions contained in Section 10.9(a) below."
3. Section 8.3(b) is hereby deleted effective upon the Termination
Date as defined in Amendment No. 4 to the Collaboration Agreement entered into
by CG, JT and Partnership as of June 28, 1996.
4. Section 8.5(b) is hereby amended by adding at the end thereof the
following:
<PAGE> 2
The parties further acknowledge and agree that any determination to be
made under Section 10.1 of the Master Research License and Option
Agreement among CG, JT and the Partnership dated June 28, 1996, under
Section 9.3 of any Product License in the form attached as Exhibit A
thereto, under Section 10.3 of any Product License in the forms
attached as Exhibits B, C or D thereto, or under Section 8.2 of any
Universal Receptor Product License in the form attached as Exhibit A to
the Universal Receptor License Option Agreement between CG and the
Partnership dated June 28, 1996 concerning whether a [ * ] (as defined
in the foregoing agreements), or under Section 10.3 of the Amended and
Restated Anti-IL-8 Product License Agreement effective as of March 19,
1996, shall not be considered a Conflict subject to Section 8.5(b). The
exclusion of the foregoing from matters considered a 'Conflict' under
this Section 8.5(b) is also intended to exclude the foregoing from
matters considered a 'Conflict' under Section 2.6(b) of the Company's
Bylaws, and under Section 10 of the Company's Certificate of
Incorporation.
5. Section 9.5 is hereby deleted.
6. The addresses in Section 10.4 are hereby amended to read as
follows:
"If to CG: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Attention: President
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, CA 94301
Attention: Julian N. Stern, Esq.
If to JT: JT Immunotech USA Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Attention: President
with copies to: Japan Tobacco Inc.
JT Building
2-1 Toranomon 2-chome
Minato-ku, Tokyo 105, Japan
Attention: Vice President,
Pharmaceutical Division
-2-
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 3
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, New York 10022
Attention: Neal N. Beaton, Esq."
7. Section 10.9(d) is hereby amended in its entirety to read as
follows:
"(d) In the event that the Board fails to approve within thirty
(30) days of a request by either CG or JT any proposal by a Director
with respect to matters to be decided by the Board pursuant to Section
2.4 or 2.5 of the Xenotech Division Research Agreement, such matter
shall be settled by binding arbitration under this Section 10.9(d), and
CG and JT shall cause the decision of the arbitrator to be approved by
the Directors as the decision of the Board. In such arbitration, the
arbitrator shall be an independent senior executive with expertise in
pharmaceutical research and development, as mutually agreed by the
parties. In the event the parties are unable to agree upon an
arbitrator, the arbitrator shall be an expert described in the
preceding sentence selected by the chief executive of the San Francisco
office of the American Arbitration Association. CG and JT shall each
prepare a written report setting forth its position with respect to the
subject matter of the dispute, and the arbitrator shall select one of
the requested positions as his decision. The costs of such arbitration
shall be shared equally by the parties, and each party shall bear its
own expenses in connection with such arbitration. Any such arbitration
shall be completed within thirty (30) days following a request by a
party for such arbitration."
8. Section 10.17 is hereby deleted.
9. Section 3 to Amendment No. 1 is hereby deleted.
10. Except as specifically modified or amended hereby or by Amendment
No. 1, the Agreement shall remain in full force and effect and, as modified or
amended, is hereby ratified, confirmed and approved. No provision of this
Amendment may be modified or amended except expressly in a writing signed by
both parties nor shall any terms be waived except expressly in a writing signed
by the party charged therewith. This Amendment shall be governed in
-3-
<PAGE> 4
accordance with the laws of the State of California, without regard to
principles of conflicts of laws.
IN WITNESS WHEREOF, each of the parties has executed this Amendment as
of the date indicated on this Amendment.
CELL GENESYS, INC. JT IMMUNOTECH USA INC.
By: /s/ R. Scott Greer By: /s/ Yasushi Shingai
------------------------------- ---------------------------
R. Scott Greer Yasushi Shingai
Senior Vice President, Chairman
Corporate Development
-4-
<PAGE> 1
EXHIBIT 10.35
AMENDMENT NO. 4 TO LIMITED PARTNERSHIP AGREEMENT
THIS AMENDMENT No. 4 to Limited Partnership Agreement (the "Amendment")
is effective as of June 28, 1996, among XENOTECH, INC. ("Xenotech") as General
Partner and CELL GENESYS, INC. ("CG") and JT IMMUNOTECH USA INC. ("JT") as
Limited Partners.
Xenotech, CG and JT hereby agree to amend the Limited Partnership
Agreement among them originally effective June 21, 1991 ("Partnership
Agreement") as amended by that certain Amendment No. 1 to Limited Partnership
Agreement effective as of December 23, 1991 ("Amendment No. 1"), Amendment No. 2
to Limited Partnership Agreement effective as of January 1, 1994 ("Amendment No.
2"), and Amendment No. 3 to Limited Partnership Agreement effective as of July
1, 1995 ("Amendment No. 3") as follows:
1. Sections 1.14 ("Competitive Merger") and 1.24 ("Major
Pharmaceutical Company") are hereby deleted.
2. Section 4.4.4 added to Article IV by Amendment No. 2 is hereby
amended to read in its entirety as follows:
4.4.4 Capital Contributions for Credit or Deduction Reimbursement.
A Partner shall make additional cash Capital Contributions each time
the Partnership is deemed, with respect to such Partner, to realize a
reduction in U.S. tax liability pursuant to Section 14.1.2 of the
Master Research License and Option Agreement among CG, Japan Tobacco
Inc., and the Partnership dated as of June 28, 1996, (the "Master
Research License and Option Agreement") and Section 6.6.2 of any
product license thereunder or Section 10.13.2 of the Master Research
and License Agreement. Such Partner's Capital Contribution hereunder
shall be equal to the amount required to be paid by the Partnership
with respect to such Partner pursuant to such provisions.
<PAGE> 2
3. Section 5.2 is hereby amended to read in its entirety as follows:
"5.2 Permitted Transfers.
5.2.1 A Partner may Transfer a Partnership Interest only as
follows:
(a) A Limited Partner (the "Pledge Partner") may
pledge, encumber or hypothecate ("Pledge") its Partnership Interest in
the ordinary course of its business, provided, that such Pledge must be
in connection with the pledge of all of such Partner's assets.
(b) A Limited Partner's Partnership Interest may be
subject to a Transfer in connection with or pursuant to a Merger,
provided, that with respect to the Limited Partner involved in a Merger
(i) such Partner's Partnership Interest is not the sole substantial
asset owned by such Limited Partner or (ii) the assets of such Limited
Partner and all Affiliates, of such Limited Partner, determined as of
June 28, 1996 to the extent still owned by such Limited Partner and
Affiliates, are included in such Merger.
5.2.2 A Limited Partner may nevertheless transfer an
economic interest in its Partnership Interest to an entity that
acquires substantially all of the assets of the monoclonal antibody
business segment of such transferring Limited Partner. For purposes of
this subsection, an "economic interest" shall mean a Limited Partner's
right to share in the income, gains, losses, deductions, credits or
similar items of, and to receive distributions from, the Partnership,
but does not include any other possible rights of the Limited Partner
including, without limitation, the right to vote on matters set forth
in subsection 6.4.2. A Limited Partner may not make such transfer of an
economic interest in its Partnership Interest without the consent of
all Limited Partners in the event that such transfer would result in
the termination of the Partnership pursuant to Code Section 708. If a
Limited Partner is restricted from transferring an economic interest in
its Limited Partnership Interest because of the foregoing sentence, it
shall have the first right to do so at the next opportunity.
5.2.3 A General Partner's Partnership Interest may be
Transferred only in accordance with Section 6.5.4.
4. Section 6.4.3 is hereby amended by deleting at the beginning of
such section the words "Except in the event of a
-2-
<PAGE> 3
liquidation and dissolution of the Partnership pursuant to Sections 10.2.1 and
10.2.2 hereof,".
5. Section 6.6.2, subparagraph (iii) is hereby amended to read in its
entirety as follows:
"(iii) Budgeted expense line items shall
include amounts sufficient to cover obligations of the Partnership to
perform under the Master Research License and Option Agreement,
including any Product License, as such term is defined therein as it
may be amended from time to time; or under the Xenotech Division
Research Agreement, as it may be amended from time to time."
6. Section 6.7 is hereby deleted, effective upon the Termination Date
as defined in Amendment No. 4 to Collaboration Agreement among the parties dated
June 28, 1996, except that the deletion of Section 6.7.2 (added by Amendment No.
2) shall be effective December 31, 1996.
7. Section 7.10 is hereby amended by adding at the end thereof the
following:
"Anything in the immediately preceding sentence to the contrary
notwithstanding, the TMP may elect to expense or capitalize payments
for research and development for state tax purposes as it may in its
discretion determine. Further, in the event that the Internal Revenue
Service examines a Partnership item that the Limited Partners
reasonably determine affects the tax deductions or liability of one of
the Limited Partners or its Affiliates (the "Lead Partner")
significantly more than the other, the Lead Partner shall act on behalf
of the TMP, and shall exercise the rights, and assume the obligations,
of the TMP, in respect of the defense of that item. The Lead Partner
shall bear its own costs of such defense and shall keep all Partners
fully informed of the status of such examination and subsequent
proceedings, if any, related thereto on a timely basis. Unless the item
in question has no significant impact upon another Limited Partner, the
Lead Partner shall not agree to a settlement of, or concede, such item
without the prior written consent of such other Limited Partner."
8. Section 8.3 added to Article VIII by Amendment No. 2 is hereby
amended to read in its entirety as follows:
-3-
<PAGE> 4
8.3 Withholding Tax Credits. Each Partner agrees to elect to
claim a federal income tax credit for its respective share of foreign
withholding taxes paid or accrued by or on behalf of the Partnership
with respect to license fees and further agrees not to amend such
election for the full carry-forward period with respect to such credit.
A Partner may make such election for state income tax purposes as it
may in its discretion determine.
9. Section 10.1 is hereby amended to read in its entirety as follows:
"10.1 Predicate Events.
The Partnership shall be liquidated and dissolved upon the
following events:
(a) upon the unanimous written consent or vote of the
Partners;
(b) upon the cessation of the General Partner acting as a
General Partner or its Dissolution where there is no remaining general
partner, provided, that if, within 90 days after the occurrence of such
event, all the remaining Partners do not agree in writing not to
continue the business of the Partnership and to the appointment
effective as of the date of such event of one or more additional
general partners of the Partnership the Partnership shall not be
liquidated and dissolved;
(c) upon the Transfer by a Partner of any interest in the
Partnership (other than the transfer of a mere economic interest
described in Section 5.2.2) unless all of the remaining Partners
consent in writing to such Transfer (such consent to be granted or
withheld in the sole and absolute discretion of each Partner); and
(d) upon expiration of the term of the Partnership pursuant to
Section 2.3 hereof."
10. Section 10.2.1 is hereby amended in its entirety to read as
follows:
"10.2.1 Contractual Remedies in the Event of Material Breach.
Upon a Material Breach of this Agreement, the non- breaching Limited
Partner may exercise any remedies such Partner may have under law or
equity."
-4-
<PAGE> 5
11. Section 10.2.2 is hereby amended by deleting the reference to
Section 9.5 of the Joint Venture Agreement and, instead, referring to Section
10.9 thereof, and by deleting the words "to the extent such Deadlock results in
a predicate event described in Section 10.1(d) hereof, or".
12. Section 10.6 is hereby amended by adding "(a)" at the beginning
thereof and by also adding the following paragraph (b):
"(b) Notwithstanding the provisions of Section 10.6(a) above,
the parties confirm that upon the dissolution and liquidation of the
Partnership for any reason, the rights of CG and JT under Section (a)
shall remain subject to the provisions, without limitation, of (i) the
Master Research License and Option Agreement and all product licenses
and options therefor under such agreement, (ii) the Collaboration
Agreement, (iii) the Technology Exchange Agreement among CG, Japan
Tobacco Inc. and the Partnership, dated March 22, 1996, (iv) the
Anti-IL-8 Product License Agreement among CG, Japan Tobacco Inc., and
the Partnership dated March 19, 1996, (v) the Xenotech Division
Research Agreement, (vi) the Agreement to Terminate Xenotech Division
Research Agreement among CG, JT and the Partnership dated as of June
28, 1996, (vii) the Field License among CG, JT and the Partnership
dated June 12, 1991, (viii) the Expanded Field License among CG, JT and
the Partnership dated June 12, 1991, and (ix) the Universal Receptor
License Option Agreement between the Partnership and CG, effective as
of June 28, 1996, and all Universal Receptor Product Licenses and
options therefor under such agreement, as such agreements may be
amended from time to time, which agreements the parties confirm shall
remain in full force and effect in accordance with their terms and
shall be controlling in the event there shall be any conflict between
any such agreement and the rights of CG and JT under Section 10.6(a)
above."
13. Section 10.7 is hereby deleted.
14. The addresses in Section 12.7 are hereby amended to read as
follows:
"If to CG: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Facsimile: (415) 358-0803
Attention: President
-5-
<PAGE> 6
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue, #1100
Palo Alto, California 94301
Facsimile: (415) 324-0638
Attention: Julian N. Stern, Esq.
If to JT: JT Immunotech USA Inc.
1825 So. Grant Street, Suite 220
San Mateo, California 94402
Facsimile: (415) 312-8028
Attention: President
with copies to: Japan Tobacco Inc.
JT Building
2-1 Toranomon 2-chome
Minato-ku, Tokyo 105 Japan
Facsimile: 011-813-5572-1449
Attention: Vice President,
Pharmaceutical Division
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, New York 10022
Facsimile: (212) 644-4051
Attention: Neal N. Beaton, Esq."
15. Section 12.16 is hereby amended by deleting at the end thereof the
words "other than for the purpose of development, manufacture, production and
sale of the Licensed Products."
16. The second sentence of Section 10.4, as added by Section 10 of
Amendment No. 2, is hereby deleted in its entirety.
17. Section 12.1.3, as added by Section 11 of Amendment No. 2, is
hereby deleted in its entirety.
18. Except as specifically modified or amended hereby or by Amendment
No. 1, Amendment No. 2 or Amendment No. 3, the Partnership Agreement shall
remain in full force and effect and, as modified or amended, is hereby ratified,
confirmed and approved. No provision of this Amendment may be modified or
amended except expressly in a writing signed by all parties nor shall any terms
be waived except expressly in a writing signed by
-6-
<PAGE> 7
the party charged therewith. This Amendment shall be governed in accordance with
the laws of the State of California, without regard to principles of conflicts
of laws.
IN WITNESS WHEREOF, each of the parties has executed this Amendment as
of the date indicated on this Amendment.
JT IMMUNOTECH USA INC. CELL GENESYS, INC.
By: /s/ Yasushi Shingai By: /s/ R. Scott Greer
------------------------------ -------------------------------
Yasushi Shingai R. Scott Greer
Chairman Senior Vice President,
Corporate Development
XENOTECH, INC.
By: /s/ Takashi Kamiya
------------------------------
Takashi Kamiya
Chairman
By: /s/ Raymond M. Withy
------------------------------
Raymond M. Withy
President and Chief
Executive Officer
-7-
<PAGE> 1
CONFIDENTIAL TREATMENT REQUESTED BY CELL GENESYS, INC.
EXHIBIT 10.36
AMENDMENT NO. 4 TO COLLABORATION AGREEMENT
This Amendment No. 4 to Collaboration Agreement (the "Amendment") is
effective as of June 28, 1996 (the "Effective Date") among Cell Genesys, Inc.
("CG"), a corporation organized under the laws of Delaware, and JT Immunotech
USA Inc. ("JT"), a corporation organized under the laws of New York, and
Xenotech, L.P. (the "Partnership"), a California partnership, concerning the
Collaboration Agreement among CG, JT and Partnership effective June 12, 1991
(the "Collaboration Agreement"), as amended by that certain Amendment 1 to the
Collaboration Agreement, dated as of June 30, 1993 ("Amendment No. 1"), that
certain Amendment No. 2 to the Collaboration Agreement, dated as of January 1,
1994 ("Amendment No. 2"), that certain Amendment No. 3 to the Collaboration
Agreement, dated as of July 1, 1995 ("Amendment No. 3").
RECITALS
A. The Parties are conducting Phase II Sponsored Research
pursuant to Amendment No. 1.
B. The Sponsored Research is expected to be completed by
March 31, 1997 pursuant to Amendment No. 3.
C. CG, the Partnership and Japan Tobacco Inc., a Japanese corporation
and ultimate parent company of JT ("JTI"), have entered into that certain Master
Research License and Option Agreement dated June 28 1996, pursuant to which CG
and JTI are conducting research for the purpose, inter alia, of the development
of Future Generation Mice, as defined therein.
D. CG, JT and Partnership now desire to further supplement
and amend the Collaboration Agreement to provide for the
termination of the Sponsored Research.
NOW, therefore, the parties agree as follows:
1. DEFINITIONS
1.1 Incorporation by Reference. Unless otherwise specifically provided
herein, all capitalized terms shall have the meanings ascribed to them in the
Collaboration Agreement, Amendment No. 1 to the Limited Partnership Agreement
between the Partnership, CG and JT dated June 12, 1991 (the "Limited Partnership
Agreement") dated on December 23, 1991 or Amendment No. 2 to the Limited
Partnership Agreement dated as of January 1, 1994.
1.2 Additional Definitions. Article I of the Collaboration
Agreement shall be amended to add the following additional
definitions:
<PAGE> 2
"Affiliate" shall mean any entity which controls, is controlled by or
is under common control with any one of CG, JT or the Partnership. An
entity shall be regarded as in control of another entity if it owns or
controls at least fifty percent (50%) of the shares of the subject
entity entitled to vote in the election of directors (or, in the case
of an entity that is not a corporation, for the election of the
corresponding managing authority); provided, however, the Partnership
shall not be an Affiliate of CG or JT under this Agreement and the
Partnership shall not be considered controlled by CG or JT for purposes
of determining Affiliates of CG or JT.
"Patent Committee" shall have the meaning set forth in
Section 6.6.
"Sublicensee" shall mean a third party that is not an Affiliate to whom
CG or JT has granted a sublicense under the Patent Rights to make, use
and/or sell Licensed Products to the extent of the rights of such Party
therein. "Sublicensee" shall also include a third party to whom CG or
JT has granted the right to distribute Licensed Products in a country,
provided that such third party is responsible for the marketing and
promotion of Licensed Products within the applicable country.
1.3 Amendment of Definition of Knowhow. Section 1.5 of the
Collaboration Agreement shall be amended to read in its entirety
as follows:
"Knowhow" shall mean all information in the possession of a Party
constituting methods, prototypes, techniques, materials (including
mice) and data for the discovery, development and creation of a
Monoclonal Antibody producing mouse, which such Party is free to
transfer or disclose without violating an existing contractual
obligation to third party. The Knowhow existing as of the Effective
Date, including any Licensed Product Knowhow as of the Effective Date,
is listed on Exhibit F, attached hereto, which such list shall be
amended by the Parties subsequent to the termination of the Sponsored
Research to include Knowhow as of the Termination Date.
1.4 Amendment of Definition of Monoclonal Antibodies.
Section 1.7 of the Collaboration Agreement shall be amended to
read in its entirety as follows:
"Monoclonal Antibodies" shall mean antibodies [ * ] those naturally
occurring in humans which are derived from genetically modified strains
of mice. Such genetic modifications may include, without limitation,
[ * ]
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1.5 Amendment of Definition of Patent Rights. Section 1.10
of the Collaboration Agreement shall be amended to read in its
entirety as follows:
"Patent Rights" shall mean (a) all U.S. patent applications and patents
listed on Exhibit B hereto, in each case to the extent a Party has the
right to license or sublicense the same; (b) any continuations,
divisionals, reexaminations, reissues or extensions of any of (a)
above; and (c) any foreign counterparts issued or issuing on any of (a)
or (b) above. Exhibit B shall be amended by the Parties subsequent to
the termination of the Sponsored Research to include U.S. patent
applications and patents as of the Termination Date owned by or
licensed to a Party to the extent they cover (i) a Monoclonal Antibody,
(ii) a means of producing a Monoclonal Antibody, (iii) means or methods
of genetically modifying a mouse or (iv) rights used in research and
development in the Field or the Expanded Field and patents issuing on
such patent applications owned by or licensed to a Party, in each case
to the extent a Party has the right to license or sublicense the same.
2. TERMINATION OF SPONSORED RESEARCH
CG, JT and Partnership hereby confirm that the Sponsored Research is
expected to terminate [ * ], unless the Parties shall mutually agree
to a later date, such date of termination, in either case, being herein referred
to as the "Termination Date."
3. TERMINATION OF ARTICLES II AND IV; COMPLETION OF ARTICLE V
3.1 Termination of Article II. Article II of the Collaboration
Agreement shall terminate on the Termination Date, except for (i) Sections 2.5
and 2.6 thereof, which shall terminate on the Effective Date, and (ii) the last
sentence of Section 2.4, which shall survive until the first anniversary of the
Termination Date.
3.2 Termination of Article IV. Article IV of the
Collaboration Agreement shall terminate on the Termination Date.
3.3 Completion of Article V. The Parties acknowledge that all
obligations pursuant to Article V of the Collaboration Agreement have been
fulfilled.
4. PATENT RIGHTS
The Parties agree to meet as soon as practicable after the termination
of the Sponsored Research, but in no event later than 60 days following the
Termination Date, at which time the Parties
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shall have agreed to (i) an inventory of any Knowhow created between the
Effective Date and the Termination Date, which list is to be made part of
Exhibit F hereof, and (ii) an inventory of any inventions created between the
Effective Date and the Termination Date, which list is to be made part of
Exhibit B hereof.
5. PATENT COMMITTEE
Article VI of the Collaboration Agreement shall be amended to add a new
Section 6.6, as follows:
6.6 Patent Committee. The Parties shall meet to appoint a patent
committee (the "Patent Committee") consisting of four persons, two
persons designated by each of CG and JT, to facilitate the patent
prosecution activities of the Partnership. The Patent Committee shall
also provide guidance with respect to territorial differences in
prosecution procedures.
6. PATENT ENFORCEMENT
Article VII of the Collaboration Agreement shall be amended to read in
its entirety as follows:
ARTICLE VII PATENT ENFORCEMENT
7.1 Notification. A Party shall promptly notify the other Parties of
any violation by a third party of any of the Patent Rights of which
such Party becomes aware, and shall provide the other Parties with any
available evidence of such violation.
7.2 Control of Suit. Upon notice of such violation, CG shall have the
right, in its reasonable discretion after consultation with JT, which
shall be promptly held, to bring, control and settle a suit or action
for infringement of any of the Patent Rights in the United States and
its territories, and in Canada and Mexico, and JT shall have the right
in its reasonable discretion after consultation with CG, which shall be
promptly held, to bring, control and settle a suit or action for
infringement of any of the Patent Rights in Japan, Taiwan and South
Korea (including the territory now comprising North Korea, if reunited
with South Korea after the date hereof). In all countries of the world
excluded from the foregoing, CG or JT shall have the right to bring,
control and settle such suit or action based upon which party has the
greater economic interest, as mutually agreed by CG and JT based upon
the relative total product sales of each party or, if neither party has
product sales, based upon the status of the parties' product
development in such country. In the event that CG and JT fail to agree
as to which party has the greater economic
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interest, CG and JT shall have the right to jointly bring, control and
settle such suit or action.
7.3 Payment. Except as provided in Section 7.4, [ * ] and any amount
recovered, whether by judgment, award, decree or settlement, shall have
deducted therefrom all expenses incurred by either party in bringing
and prosecuting or settling any such suit or action and the remainder,
if any, [ * ]. In the event that CG and JT jointly bring and control
such suit, they shall equally share all expenses and recovery.
7.4 Election Not to Bring Suit. In the event CG or JT elects not to
bring or participate a suit or action in a country when it has such
right, the other party shall have the right to do so at its own expense
and shall have the right to retain all proceeds, including any
settlement or royalty stream, from such suit or action.
7. CONFIDENTIALITY
Section 8.1 of the Collaboration Agreement shall be amended by deleting
the words "best efforts" in the final sentence thereof and substituting therefor
the words "efforts consistent with prudent business judgment."
8. INDEMNIFICATION
Article IX of the Collaboration Agreement shall be deleted in its
entirety and shall be of no further force and effect as of the Effective Date.
9. COMPETITIVE MERGER
Section 10.8 of the Collaboration Agreement shall be deleted in its
entirety and shall be of no further force and effect as of the Effective Date.
10. ASSIGNMENT
Section 11.2 of the Collaboration Agreement shall be amended to read in
its entirety as follows:
11.2 Assignments. Except as expressly provide herein, neither
this Agreement nor any interest hereunder shall be assignable by any
Party without the prior written consent of the others; provided,
however, that CG or JT may assign this Agreement without such consent
to (a) an Affiliate (provided that such Affiliate is two-thirds or
greater owned directly or indirectly) or (b) an entity that acquires
substantially
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all of the assets of the monoclonal antibody business segment of such
assigning Party. This Agreement shall be binding upon the successors
and permitted assigns of the Parties. Any assignment not in accordance
with this Section 11.2 shall be void.
11. NOTICES
Section 11.1 shall be amended to read in its entirety as follows:
Any notice, request, delivery, approval or consent required or
permitted to be given under this Agreement shall be in writing in
English and shall be deemed to have been sufficiently given if
delivered in person, transmitted by telecopier or sent by registered
air mail letter to the Party to which it is directed at its address
shown below or such other address as such party shall have last given
by notice to the other Parties.
If to JT: JT Immunotech USA Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Facsimile: (415) 312-8028
Attn: President
with a copy to: Japan Tobacco Inc.
JT Building
2-1 Toranomon 2-chome
Minato-ku, Tokyo 105
Japan
Facsimile: 011-813-5572-1449
Attn: Vice President,
Pharmaceutical Division
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Facsimile: (212) 644-4051
Attn: Neal N. Beaton, Esq.
If CG to: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Facsimile: (415) 358-0803
Attn: President
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with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Facsimile: (415) 324-0638
Attn: Julian N. Stern, Esq.
If to the Partnership: Xenotech, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: Chief Financial Officer
12. EXHIBIT B - PATENT RIGHTS
Exhibit B to the Collaboration Agreement shall be deleted in its
entirety and replaced with Exhibit B attached hereto. CG represents and warrants
that Exhibit B lists all the Patent Rights as of the Effective Date.
13. EXHIBIT F - KNOWHOW
Exhibit F attached hereto shall become Exhibit F to the Collaboration
Agreement. To the best knowledge of CG, the [ * ] listed on Exhibit F
comprises a substantial portion of the Knowhow as of the Effective Date.
14. CONTROLLING DOCUMENT
Notwithstanding any provision of the Master Research License and Option
Agreement and the Exhibits thereto, any conflict between the provisions of such
agreement and its Exhibits and the Collaboration Agreement as amended shall be
controlled by the provisions of the Collaboration Agreement, as amended.
15. MISCELLANEOUS
Except as specifically modified or amended hereby or by Amendment No.
1, Amendment No. 2 and Amendment No. 3, the Collaboration Agreement shall remain
in full force and effect and, as so modified or amended, is hereby ratified,
confirmed and approved. No provision of this Amendment (including its Exhibits)
may be modified or amended except expressly in writing signed by the parties nor
shall any terms be waived except expressly in a writing signed by the party
charged therewith. This Amendment shall be governed in accordance with the laws
of the State of California, without regard to principles of conflicts of laws.
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IN WITNESS WHEREOF, the parties have duly executed this Amendment as of
the date shown on the first page of this Amendment.
JT IMMUNOTECH USA INC. CELL GENESYS, INC.
By: /s/ Yasushi Shingai By: /s/ R. Scott Greer
------------------------ -----------------------
Yasushi Shingai R. Scott Greer
Chairman Senior Vice President,
Corporate Development
XENOTECH, INC. (as General
Partner of XENOTECH, L.P.)
By: /s/ Takashi Kamiya
-----------------------
Takashi Kamiya
Chairman
By: /s/ Raymond M. Withy
-----------------------
Raymond M. Withy
President and
Chief Executive Officer
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Exhibit B
[ * ]
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Docket No. Filing Date Serial No. Title Investors
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the omitted portions.
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Exhibit F
[ * ]
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CONFIDENTIAL TREATMENT REQUESTED BY CELL GENESYS, INC.
Exhibit 10.37
AGREEMENT TO TERMINATE XENOTECH DIVISION RESEARCH AGREEMENT
THIS AGREEMENT TO TERMINATE THE XENOTECH DIVISION RESEARCH AGREEMENT
(the "Agreement") effective as of June 28, 1996 (the "Effective Date") is made
by and among Xenotech, L.P., a California limited partnership ("XT"), Cell
Genesys, Inc., a Delaware corporation ("CGI"), and JT Immunotech USA Inc., a New
York corporation ("JT").
RECITALS
A. XT, CGI and JT entered into that certain Xenotech Division
Research Agreement effective as of January 1, 1994, as amended (the "Xenotech
Division Research Agreement.)"
B. The parties now wish to terminate the Xenotech Division Research
Agreement, subject to certain terms and conditions as set forth herein.
NOW, THEREFORE, in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and among the parties as
follows:
1. DEFINITIONS
1.1 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with any one of CGI, JT or XT. An entity shall be
regarded as in control of another entity if it owns or controls at least fifty
percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing authority); provided, however, XT
shall not be an Affiliate of CGI or JT under this Agreement and XT shall not be
considered controlled by CG or JT for purposes of determining Affiliates of CGI
or JT.
1.2 "Collaboration Agreement" shall mean that certain Collaboration
Agreement entered into by CGI, JT and XT on June 12, 1991, as amended.
1.3 "Termination Date" shall have the meaning set forth in Section 2.1
below.
1.4 "[*]Mice, [*]Mice and [*]Mice" shall each have the meaning set
forth in Amendment No. 3 to the Collaboration Agreement dated as of July 1,
1995.
1.5 "Xenotech Division" shall have the meaning set forth in Section
2.1 of the Xenotech Division Research Agreement.
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2. TERMINATION OF XENOTECH DIVISION RESEARCH AGREEMENT
2.1 The Xenotech Division Research Agreement will be terminated upon
the earlier of (a) the date agreed to by the parties pursuant to Article 3 below
or (b) December 31, 1996, (such date being the "Termination Date"); provided,
however, that Article 14 thereof shall be terminated as of the Effective Date.
2.2 (i) On or before October 31, 1996, XT will pay compensation to
CGI as follows:
(a) If the Xenotech Division Research Agreement is to be
terminated before December 31, 1996, pursuant to the determination set forth in
Article 3, XT will pay [ * ] to CGI in full consideration for the for the
expenses related to the elimination of the Xenotech Division; or
(b) If the Xenotech Division Research Agreement is to be
terminated on December 31, 1996, XT will pay [ * ] to CGI in full consideration
for the expenses related to the elimination of the Xenotech
Division.
(ii) XT and JT acknowledge that such compensation is being paid
to CGI pursuant to Section 2.5.3 of the Xenotech Division Research Agreement.
CGI acknowledges that payment of such compensation shall fully satisfy XT's and
JT's obligations under Section 2.5.3 and, to the extent of any claim resulting
from the termination of the Xenotech Division, Section 11.1 of the Xenotech
Division Research Agreement.
2.3 The U.S. patent applications [ * ] owned by XT, including those
created pursuant to the Xenotech Division Research Agreement, as of the
Effective Date are listed on Schedule 1 attached hereto. Within 30 days
following the Termination Date, CGI, JT and XT shall meet to amend Schedule 1 to
include all such patent applications [ * ] as of the Termination Date.
2.4 Notwithstanding Section 12.5 of the Xenotech Division Research
Agreement, the parties agree that only the following provisions of the Xenotech
Division Research Agreement shall survive its termination: Article 7, Article 9,
Article 10, Article 11, Article 13, and Article 15.
3. TERMINATION OF PROJECT
3.1 CGI and JT will negotiate in good faith to determine whether [ * ]
and make such determination no later than September 30, 1996. If both such
parties agree that [ * ] the parties shall also agree no later than September
30, 1996, upon a termination date for the Xenotech Division Research Agreement
no later than December 31, 1996.
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3.2 In the event a dispute arises as to whether [ * ] are [ * ] the
issue shall be resolved by binding arbitration by one arbitrator reasonably
acceptable to the parties who is experienced in the pharmaceutical industry and
in biological research and development. If the parties are unable to agree on an
arbitrator, the arbitrator shall be an independent expert as described in the
preceding sentence selected by the chief executive of the San Francisco office
of the American Arbitration Association. The arbitrator shall in a written
opinion state [ * ]. The arbitration shall be conducted in English and shall be
held in San Francisco, California. Each party shall pay its own costs in
connection with such arbitration and share equally the other expenses associated
with the arbitration. Any arbitration subject to this Section 3.2 shall be
completed within sixty days from the filing of notice of a request for such
arbitration.
4. SERVICES
CGI agrees to negotiate in good faith the terms whereby, after the
termination of the Xenotech Division, CGI will provide services to XT relating
to [ * ]. The parties agree to establish a preliminary research plan and budget
for such services no later than August 30, 1996 and to execute an agreement for
such services no later than the Termination Date. Such budget shall include the
proposed workplan activities and tentative headcount requirements. XT shall
reimburse CGI for such services at the annual rate of [ * ] for 1996, which rate
shall be subject to annual adjustment using the principles set forth in Section
3.3 of the Xenotech Division Research Agreement.
5. CAPITAL EQUIPMENT
CGI shall purchase, as of the Termination Date, XT's capital equipment
at book value as of such date.
6. XENOTECH DIVISION EMPLOYEE LOAN
XT shall assign all existing loans and security agreements with
Xenotech Division employees to CGI.
7. ARBITRATION
The parties will attempt to resolve any dispute under this Agreement by
mutual agreement, and, if required, there shall be a face-to-face meeting
between the Chief Executive Officer of CGI and a person of equivalent authority
designated by JT. Except as provided by Section 3.2, any dispute under this
Agreement which is not settled after such meeting, shall be finally settled by
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binding arbitration, conducted in accordance with the Rules of Arbitration of
the International Chamber of Commerce by three arbitrators appointed in
accordance with said rules. The arbitration proceedings and all pleadings and
written evidence shall be in the English language. Any written evidence
originally in a language other than English shall be submitted in English
translation accompanied by the original or a true copy thereof. The costs of the
arbitration, including administrative and arbitrators' fees, shall be shared
equally by the parties to the arbitration. Each party shall bear its own costs
and attorneys' and witness' fees. The prevailing party in any arbitration, as
determined by the arbitration panel, shall be entitled to an award against the
other party in the amount of the prevailing party's costs and reasonable
attorneys, fees. The arbitration shall be held in San Francisco, California, if
initiated by XT against CGI or by CGI against XT, or if initiated by JT, and in
Tokyo, Japan, if initiated by XT or CGI against JT. A disputed performance or
suspended performances pending the resolution of the arbitration must be
completed within thirty days following the final decision of the arbitrators.
Any arbitration subject to this Article 7 shall be completed within six months
from the filing of notice of a request for such arbitration.
8. ASSIGNMENT
Neither this Agreement nor the Xenotech Division Research Agreement,
notwithstanding Section 15.8 thereof, shall be assignable by any party hereto
without the written consent of the other parties. Notwithstanding the foregoing,
any party may assign this Agreement or the Xenotech Division Research Agreement
without the consent of any other party, to (a) an Affiliate (provided that such
Affiliate is two-thirds or greater owned directly or indirectly), or (b) an
entity that acquires substantially all of the assets of the monoclonal antibody
business segment of the assigning party.
9. MISCELLANEOUS
No provision of this Agreement (including its Schedule 1) may be
modified or amended except expressly in writing signed by the parties nor shall
any terms be waived except expressly in a writing signed by the party charged
therewith. This Agreement shall be governed in accordance with the laws of the
State of California, without regard to principles of conflicts of laws.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written, each copy of which shall for all purposes be deemed to be
an original.
JT IMMUNOTECH USA INC. CELL GENESYS, INC.
By: /s/ Yasushi Shingai
------------------------------
Yasushi Shingai By: /s/ R. Scott Greer
Chairman --------------------------------
R. Scott Greer
Senior Vice
President, Corporate
Development
XENOTECH, INC. (as General
Partner of XENOTECH, L.P.)
By: /s/ Takashi Kamiya
------------------------------
Takashi Kamiya,
Chairman
By: /s/ Raymond M. Withy
------------------------------
Raymond M. Withy,
President and
Chief Executive
Officer
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Schedule I
Patent Applications
[ * ]
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CONFIDENTIAL TREATMENT REQUESTED BY CELL GENESYS, INC.
Exhibit 10.38
MASTER RESEARCH LICENSE AND OPTION AGREEMENT
THIS MASTER RESEARCH LICENSE AND OPTION AGREEMENT (the "Agreement")
effective as of June 28, 1996 (the "Effective Date") is made by and among CELL
GENESYS, INC., a Delaware corporation ("CGI"), JAPAN TOBACCO INC., a Japanese
corporation ("JTI"), (CGI and JTI are sometimes singularly referred to as a
"Grantee" and collectively as the "Grantees") and XENOTECH, L.P., a California
limited partnership ("XT").
RECITALS
A. XT is a limited partnership formed in June 1991 by JT Immunotech
USA Inc. ("JT Immunotech"), a wholly-owned indirect subsidiary of JTI, and CGI
to research, develop, use, modify, make, have made, sell and otherwise dispose
of certain products and to hold the rights to certain technology relating to
human monoclonal antibodies derived from transgenic mice.
B. Effective January 1, 1994, CGI and JTI entered into a Master
Research and License Agreement pursuant to which CGI and JTI paid and agreed to
pay option fees to XT for the right to enter into product license agreements
with XT.
C. [ * ]
D. XT and the Grantees now desire to restructure their existing
commercial agreements.
NOW THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:
1. DEFINITIONS
For purposes of this Agreement, the terms set forth in this Article
shall have the meanings set forth below:
1.1 "Additional Antigen" shall mean an Antigen selected by a Grantee
in accordance with Section 4.2 hereof.
1.2 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with any one of CGI, JTI or XT. An entity shall be
regarded as in control of another entity if it owns or controls at least fifty
percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing
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<PAGE> 2
authority); provided, however, XT shall not be an Affiliate of CGI or JTI under
this Agreement and XT shall not be considered controlled by CGI or JTI for
purposes of determining Affiliates of CGI or JTI.
1.3 "Antigen" shall have the meaning set forth in Exhibit F hereto.
1.4 "[ * ] Technology" shall mean (i) all U.S. patent applications
listed on Schedule 1 and patents issuing thereon owned by or licensed to XT
which relate to [ * ], in each case to the extent XT has the right to license or
sublicense the same; (ii) any continuations, divisionals, reexaminations,
reissues or extensions of any of (i) above; (iii) any foreign counterparts
issued or issuing on any of (i) or (ii) above; and (iv) [ * ] as set forth in
Schedule 1.
1.5 "Buy-In Right" shall mean: the right of a Grantee to obtain an
option for an Exclusive Home Territory Product License under Article 5 to a
Selected Antigen originally selected by the other Grantee.
1.6 "CGI Previously Selected Antigens" shall mean: [ * ]
1.7 "CGI Territory" shall mean the United States and its territories,
and Canada and Mexico.
1.8 "Co-Exclusive Worldwide Product License" shall mean the form of
license attached as Exhibit D hereto, for which the license fee shall be $[ * ]
per licensee.
1.9 "Core Technology" shall have the meaning set forth in Section
10.1.
1.10 "Covered Product" shall mean any substance that incorporates an
antibody derived from the Licensed Technology [ * ], including, but not limited
to [ * ] may, but need not, be a [ * ]. Covered Product as used herein shall not
include a [ * ].
1.11 "Exclusive Home Territory Product License" shall mean the form of
license attached as Exhibit C hereto for, which the license fee shall be $[ * ].
1.12 "Exclusive Qualified Worldwide Product License" shall mean the
form of license attached as Exhibit B hereto for, which the license fee shall be
$[ * ].
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1.13 "Exclusive Worldwide Product License" shall mean the form of
license attached as Exhibit A hereto, for which the license fee shall be
$[ * ].
1.14 "Future Generation Mice" shall mean genetically modified strains
of mice created using [ * ] Technology pursuant to Article 9 that [ * ];
provided, however, that Future Generation Mice shall exclude (x) [ * ];
1.15 "IND" shall mean an Investigational New Drug Application to the
U.S. Food and Drug Administration, or its non-U.S. equivalent.
1.16 "JTI Territory" shall mean Japan, Taiwan, and South Korea
(including the territory now comprising North Korea, if reunited with South
Korea after the date hereof).
1.17 "JTI Previously Selected Antigens" shall mean: [ * ]
1.18 "[ * ] Mice" shall mean [ * ]
1.19 "Licensed Technology" shall mean the [ * ] Technology and the [ *
] Technology.
1.20 "Materials Transfer Agreement" shall mean the form of agreement
attached as Exhibit E hereto.
1.21 "Mice" shall mean the [ * ].
1.22 "Monoclonal Antibody" shall mean an antibody [ * ] those
naturally occurring in humans which are derived from genetically modified
strains of mice. Such genetic modifications may include, without limitation, [ *
].
1.23 "[ * ] Mice" shall mean mice having the following genotype, as
shown by Southern blotting analysis:
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[ * ]
1.24 "[ * ] Mice" shall mean mice having the following genotype, as
shown by Southern blotting analysis:
[ * ]
1.25 "[ * ] Mice" shall mean mice having the following genotype, as
shown by Southern blotting analysis:
[ * ]
1.26 "[ * ] Mice" shall mean mice having the following genotype, as
shown by Southern blotting analysis:
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[ * ]
1.27 "Previously Selected Antigens" shall mean CGI Previously Selected
Antigens and JTI Previously Selected Antigens.
1.28 "Product License" shall mean any of the licenses in the form
attached hereto as Exhibits A, B, C and D.
1.29 "Research Field" shall mean [ * ] and [ * ]
1.30 "Research License" shall mean the license provided in Article 3.
1.31 "Rest of the World" shall mean all countries of the world other
than the countries in the CGI Territory and JTI Territory.
1.32 "Selected Antigens" shall mean Additional Antigens and
Previously Selected Antigens.
1.33 "Sublicensee" shall mean a third party that is not an Affiliate to
whom a Grantee has granted a sublicense under the Licensed Technology to make,
use and/or sell a particular Covered Product to the extent of the rights of such
Grantee therein. "Sublicensee" shall also include a third party to whom a
Grantee has granted the right to distribute Covered Product under the Licensed
Technology to the extent of the rights of such Grantee therein, provided that
such third party is responsible for the marketing and promotion of such Covered
Product.
1.34 "Universal Receptor Product" shall mean a substance that is
developed utilizing [ * ] Universal Receptor Technology.
1.35 "Universal Receptor Technology" shall mean technology for [ * ]
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[ * ] As used herein: (i) "universal receptor" shall mean a receptor
[ * ]
1.36 "[ * ] Technology" shall mean (i) all U.S. patent applications
listed on Schedule 2 and patents issuing thereon; (ii) any continuations,
divisionals, reexaminations, reissues or extensions of any of (i) above; (iii)
any foreign counterparts issued or issuing on any of (i) or (ii) above; and (iv)
the Mice and [ * ] as set forth on Schedule 2.
2. SUPPLY OF BREEDING MICE; BIOMATERIALS
2.1 XT agrees to provide, pursuant to a Materials Transfer Agreement,
to each Grantee an appropriate number of breeding pairs of [ * ] Mice promptly
after the Effective Date. CGI, JTI and XT shall form an ad hoc committee (the
"Committee") to administer the transfer of the [ * ] Mice to CGI and JTI. The
Committee shall utilize the following principles:
(i) The Committee shall monitor and advise on the distribution
of [ * ] Mice based on the principle that [ * ]. The Committee shall determine [
* ]. The Committee shall determine [ * ].
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(ii) The Committee shall also monitor the numbers of [ * ]
Mice that are currently being bred for immunization purposes. Such Mice shall,
[ * ]
2.2 XT further agrees to provide, pursuant to a Materials Transfer
Agreement, to each Grantee [ * ]. The Committee shall also monitor and advise on
the distribution of such Mice using the principles set forth in Section 2.1
above.
2.3 The Mice shall only be used by a Grantee pursuant to the Research
License set forth in Article 3 hereof for its own research purposes or those of
its Affiliates or pursuant to a Product License [ * ].
2.4 XT shall make available to each Grantee without any charge the
[ * ] and [ * ] pursuant to a Materials Transfer
Agreement.
2.5 Subject to the other restrictions set forth in this Agreement,
each Grantee shall be free to [ * ]. Notice of any [ * ] should be given by such
Grantee to XT and the other Grantee promptly thereafter.
2.6 Without limitation on any of the other restrictions set forth in
this Agreement, Grantee shall not contract or otherwise arrange with a
third-party commercial entity for the purposes [ * ].
3. GRANT OF RESEARCH LICENSE
XT hereby grants to each Grantee a co-exclusive (with each other and
XT), worldwide, royalty-free, fully paid up, perpetual, irrevocable license,
with no right to sublicense, to practice the Licensed Technology to conduct
research for any purposes in the Research Field ("Research License"). In the
event a Grantee executes an Exclusive Worldwide Product License with respect to
a Selected Antigen, the other Grantee shall [ * ].
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4. ANTIGEN SELECTION
4.1 Previously Selected Antigens. (i) XT hereby grants effective as of
October 1, 1996 to each Grantee either (a) an option to obtain an Exclusive
Worldwide Product License with respect to each of its Previously Selected
Antigens if the other Grantee has not elected to obtain a Buy-In Right to such
Antigen pursuant to Section 4.1(ii) and Article 5 below, or (b) an option to
obtain an Exclusive Qualified Worldwide Product License with respect to each of
its Previously Selected Antigens if the other Grantee has elected to obtain a
Buy-In Right to such Antigen pursuant to Section 4.1(ii) and Article 5 below.
The options to obtain a Product License granted pursuant to this Section 4.1(i)
shall be exercisable by notice in writing to XT and the other Grantee and shall
expire on [ * ]. Upon expiration without exercise of an option to obtain a
Product License, the relevant Antigen shall again be available for selection by
the Grantees pursuant to this Article 4.
(ii) At the meeting of the Grantees and XT to be held on [ * ],
a Grantee may elect to obtain at such meeting a Buy-In Right for any one or more
of the other Grantee's Previously Selected Antigens by notice in writing to XT
and the other Grantee. Such Buy-In Right shall be exercisable by notice in
writing to XT and the other Grantee and shall expire on [ * ]. Each Grantee
acknowledges that the other Grantee has already provided a summary of the
scientific background to the selection of its Previously Selected Antigens,
together with a summary of any [ * ].
(iii) Upon the request of a Grantee, XT shall transfer to such
Grantee pursuant to a Materials Transfer Agreement any [ * ].
4.2 Additional Antigens.
(i)(a) During the term of this Agreement, the Grantees shall meet
[ * ]. Each Grantee may select [ * ] Additional Antigens at [ * ]. Thereafter,
[ * ], each Grantee may select Additional Antigens [ * ]. At the time that a
Grantee selects an Antigen [ * ], it shall also provide to the other Grantee a
summary of the scientific background to the selection of such Antigen, [ * ].
Such disclosure shall be without any warranty regarding, or
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agreement to license, such rights. The Grantee selecting an Antigen shall also
inform the other Grantee of [ * ].
(b) If a Grantee does not select an Additional Antigen [ *
], provided, however, that it may not [ * ]. Once selected an Additional Antigen
shall [ * ].
(ii) With respect to an Additional Antigen, the selecting
Grantee shall have the option to enter into either (a) an Exclusive Worldwide
Product License if the other Grantee has not elected to obtain a Buy-In Right to
such Antigen pursuant to Article 5 below or (b) an Exclusive Qualified Worldwide
Product License if the other Grantee has elected to obtain a Buy-In Right to
such Antigen pursuant to Article 5 below. The selecting Grantee will pay to XT
within thirty days after the end of the period specified in Section 5.1
therefor, an option fee for the right to enter into a Product License with
respect to Covered Products derived from the practice of Licensed Technology
with respect to such Antigen. The option fee shall be [ * ] if the option is to
enter into an Exclusive Worldwide Product License and [ * ] if the option is to
enter into an Exclusive Qualified Worldwide Product License. Each such option
shall be exercised by notice in writing to XT and the other Grantee and may not
be exercised [ * ] with respect to such Additional Antigen.
(iii) If a Grantee selects an Additional Antigen, the other
Grantee cannot select the same Antigen [ * ].
(iv) (a) If both Grantees select the same Additional Antigen [ *
] , XT shall grant to each of them an option to enter into a Co-Exclusive
Worldwide Product License and each Grantee shall have the same rights and
obligations as set forth in Sections 5.4(a) and 5.4(b).
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(b) Whenever both Grantees select the same Additional
Antigen, each will pay to XT within thirty days thereof an option fee of [ * ]
as consideration for its right to enter into a Co-Exclusive Worldwide Product
License for Covered Product derived from the practice of Licensed Technology
with respect to such Additional Antigen.
(c) Each Grantee's option for a Co-Exclusive Worldwide
Product License shall expire on the earlier of [ * ]. Within [ * ] after
its exercise of the option to obtain a Co-Exclusive Worldwide Product License, a
Grantee shall execute an Exclusive Worldwide Product License and pay XT the
license fee therefor. Within [ * ] after its exercise of the option to obtain a
Co-exclusive Worldwide Product License, [ * ], whereupon both Grantees shall
execute the Co-Exclusive Worldwide Product License for such Antigen and the
Exclusive Worldwide Product License for such Antigen executed by the first
Grantee and XT shall be of no further force and effect.
(d) Notwithstanding the above, if a Grantee has [ * ]
subject to the applicable provisions of Articles 4 and 5 hereof.
(e) By mutual agreement, CGI and JTI may agree to
share certain research and development expenses if both have selected the same
Additional Antigen at a quarterly meeting.
(v) In the event a dispute arises [ * ], the issue shall be
resolved by binding arbitration by one arbitrator reasonably acceptable to the
parties who is experienced in the pharmaceutical industry and in biological
research and development. If the parties are unable to agree on an arbitrator,
the arbitrator shall be an independent expert as described in the preceding
sentence selected by the chief executive of the San Francisco office of the
American Arbitration Association. The arbitrator shall in a
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written opinion state whether the selected substance is an Antigen. The
arbitration shall be conducted in English and shall be held in San Francisco,
California. Each party shall pay its own costs in connection with such
arbitration and share equally the other expenses associated with the
arbitration. Any arbitration subject to this Section 4.2(v) shall be completed
within sixty days from the filing of notice of a request for such arbitration.
5. THE BUY-IN RIGHT
5.1 Subject to Section 7.1, upon selection of an Antigen by a Grantee,
the other Grantee shall have a Buy-In Right, to be exercised [ * ]. Exercise of
the Buy-In Right shall be made by notice in writing to XT and the other Grantee.
5.2 Whenever a Grantee exercises a Buy-In Right, it will pay to XT at
the time of the exercise of the Buy-In Right an option fee of [ * ] as
consideration for an option to an Exclusive Home Territory Product License to
Covered Product derived from practice of Licensed Technology with respect to the
applicable Antigen. Such option shall expire [ * ], in either case unless
terminated earlier by notice in writing by such Grantee to XT and the other
Grantee.
5.3 Notwithstanding the foregoing, the Buy-In Right will not be
available for a Selected Antigen [ * ]. In addition, exercise of the option
arising from the exercise of the Buy-In Right [ * ].
5.4 (a) So long as both Grantees have, with respect to the same
Selected Antigen, either an unexpired Buy-In Right or an option for a Product
License derived from such Antigen, each Grantee shall promptly share with the
other Grantee the results of any research by it utilizing such Antigen, to the
extent such results are reasonably available and the party has the right to
share them, until such time as either Grantee elects hereunder to obtain a
Product License with respect to a Covered Product arising from such research.
The research results which shall be shared pursuant to this Section 5.4(a) shall
be limited to [ * ]
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[ * ]
(b) If, upon exercise of the Buy-In Right for an Additional
Antigen, the exercising Grantee wishes to obtain from the selecting Grantee [ *
], to the extent that they are reasonably available and the party has the right
to provide them, and the exercising Grantee shall reimburse the selecting
Grantee for [ * ]; provided, however, that the selecting Grantee shall have no
such obligation for [ * ] after it has entered into an Exclusive Qualified
Worldwide Product License. If the Grantee exercising the Buy-in Right wishes to
obtain from the selecting Grantee any [ * ] and any information other than the
results of research pursuant to Section 5.4(a), the selecting Grantee will [ * ]
for providing [ * ] and information to the exercising Grantee.
(c) If a Grantee has entered into an Exclusive Qualified
Worldwide License and the other Grantee requests from the first Grantee [ * ].
5.5 If a Grantee having a Buy-In Right does not exercise, by notice to
XT and the other Grantee, its right to obtain an Exclusive Home Territory
Product License for an Antigen within [ * ] after obtaining the Buy-In
Right, the Grantee who selected the Antigen shall have the right to obtain
either an Exclusive Worldwide Product License or an Exclusive Qualified
Worldwide Product License for the Antigen. In the event that such Grantee has
already executed an Exclusive Qualified Worldwide Product License, it shall have
the right to exchange such Product License for an Exclusive Worldwide Product
License to Covered Products derived from practice of the Licensed Technology
with respect to the Selected Antigen upon payment as additional license fee of
[ * ] to XT. The right of the selecting Grantee to obtain an Exclusive
Worldwide Product License under this Section 5.5 shall expire [ * ]
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[ * ]
5.6 In the event that the Grantee that initially selected an Antigen
does not exercise, by notice to XT and the other Grantee, its option to obtain
an Exclusive Qualified Worldwide Product License for the Antigen and if the
other Grantee has obtained and exercised a Buy-In Right, the other Grantee in
such event shall have the option to obtain an Exclusive Worldwide Product
License to Covered Products derived from practice of the Licensed Technology
with respect to the Selected Antigen. In the event that such Grantee has already
executed an Exclusive Home Territory Product License, it shall have the right to
exchange such license for an Exclusive Worldwide Product License to the Selected
Antigen upon payment to XT of [ * ]. The right of the Grantee having the Buy-In
Right to obtain an Exclusive Worldwide Product License under this Section 5.6
shall expire [ * ].
6. LIMITATIONS ON PRODUCT LICENSES; RIGHT TO EXCLUSIVE
WORLDWIDE PRODUCT LICENSE.
6.1 Limitations on Product Licenses. Upon execution by XT and a
Grantee (and unless and until terminated), each of the Product Licenses shall be
deemed to be a "[ * ] License." At the time that a Covered Product developed
pursuant to such [ * ] the license shall no longer be deemed to be a "[ * ]
License." At no time shall either Grantee have the right to hold [ * ]. In the
event that a Grantee terminates a Product License in its entirety, such license
shall no longer be deemed to be held by such Grantee for the purpose of the
limitations set forth in this Section 6.1.
6.2 Rights to Exclusive Worldwide Product Licenses. In the event an
Exclusive Qualified Worldwide Product License, Exclusive Home Territory Product
License or a Co-Exclusive Worldwide Product License is terminated and the other
Grantee holds a complementary license to the same Antigen at the time of such
termination, the other Grantee shall have the right to obtain an Exclusive
Worldwide Product License for the Antigen upon payment to XT of the difference
between the license fee paid by such Grantee for such license and [ * ].
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7. OUTLICENSING
7.1 In order to [ * ]. In such event, the [ * ].
7.2 [ * ] XT will confer with CGI and JTI as to how to [ * ] to [ * ].
8. IN-LICENSING OR ACQUISITION; INVENTIONS
8.1 In-Licensing or Acquisition.
(a) If either Grantee is licensing or otherwise acquiring patent
rights related to an Antigen, it [ * ]. Subject to Section 4.2(iv) above, the
Grantee that selects an Antigen pursuant to Section 4.2(i)(a) above shall [ * ].
(b) If it enters into a Product License for such Antigen, the [ *
] Grantee pursuant to Section 8.1(a) shall [ * ]
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[ * ], including, as appropriate, [ * ] provided, however, that if the Grantees
have a [ * ].
8.2 Inventions. A Grantee shall promptly disclose to the other Grantee
any patentable invention related to an Antigen that has been selected by it or
the other Grantee, using the inventions disclosure form attached as Exhibit G
hereto. If such invention were created by the Grantee prior to the selection of
the Antigen by either Grantee, [ * ]. Subject to Article 3, if such invention is
created by the Grantee after such selection, [ * ]. Nothing herein shall affect
a Grantee's ownership of any invention disclosed to the other Grantee.
9. FUTURE GENERATION MICE
9.1 A Grantee or its Affiliate may perform research to create Future
Generation Mice at its absolute discretion. Notwithstanding the above, the
Grantee shall disclose plans for such research to the other Grantee in order for
the other Grantee to determine if it wishes to share in the cost of such
research. In the event the other Grantee agrees to fund, or to have its
Affiliate fund, [ * ], any inventions or other intellectual property created
during the performance of such research shall be equally co-owned by the
Grantees or the Affiliates, as the case may be; provided, however, that in no
event shall more than one entity among either Grantee and its Affiliates [ * ].
Upon mutual agreement of the Grantees, the other Grantee may participate in the
research activities.
9.2 If CGI or JTI unilaterally develops Future Generation Mice, such
Grantee (the "Developing Grantee")shall notify the other Grantee (the
"Nondeveloping Grantee"). Any patentable inventions and other intellectual
property created by the Developing Grantee in creating such Future Generation
Mice shall be owned by the Developing Grantee. The Nondeveloping Grantee shall
have an option to negotiate a license to such Future
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Generation Mice. [ * ]. Neither CGI or JTI shall enter into any agreement with a
third party to develop Future Generation Mice that would impair the rights of
the other party to exercise its rights to license Future Generation Mice
hereunder.
9.3. (i) The Grantees shall share equal responsibility for, and
shall share equally all outside costs incurred in, preparing, filing,
prosecuting and maintaining patent applications and patents worldwide on
inventions that are co-owned pursuant to Section 9.1 above, and conducting any
interferences, re-examinations, reissues and oppositions relating thereto. CGI
and JTI shall mutually agree upon an outside patent counsel to prepare, file,
prosecute and maintain such patents and patent applications. CGI and JTI shall
each keep the other reasonably informed as to the status of such patent matters,
including without limitation, by providing such Grantee the opportunity to
review and comment on any substantive documents which will be filed in any
patent office, and providing such Grantee copies of any documents received from
such patent offices including notice of all interferences, re-examinations,
oppositions or requests for patent term extensions. If either JTI or CGI should
determine that it does not want to share responsibility for such costs with
respect to a particular patent or patent application, it will inform the other
in writing. If so informed, CGI or JTI, as the case may be, may then assume all
responsibility, both costs and control, for the particular patent or patent
application and, as a result, will obtain exclusive ownership rights to the
particular patent or application.
(ii) If either CGI or JTI unilaterally develops an invention
described in Section 9.2 above, it shall be solely responsible, at its cost, to
prepare, file, prosecute, maintain and enforce patent applications and patents
worldwide, as it may determine in its discretion, and to conduct any
interferences, reexaminations, reissues and oppositions relating thereto.
(iii) A party shall promptly notify the other parties of any
violation by a third party of any of the intellectual property rights developed
pursuant to Section 9.1 of which such party becomes aware and shall provide the
other parties with any available evidence of such violation. CGI and JTI shall
agree whether and, if so, how to enforce any intellectual property developed
pursuant to Section 9.1, or defend such intellectual property in a declaratory
judgment or similar proceeding. [ * ] The party taking such enforcement action
shall keep the other parties reasonably informed of the progress of
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such suit. Any received recovery shall be [ * ], or as the parties may otherwise
agree during the course of the suit. In the event that [ * ].
(iv) Subject to Article 10, if suit is brought against any
party alleging infringement of the patent rights of a third party as the result
of the exercise by a party of its rights under this Article 9, the parties shall
promptly discuss and agree on how to respond, including the manner in which the
costs of defense and any damages owing shall be paid.
9.4 The Antigen selection mechanism set forth in this Agreement shall
apply to each Grantee using any Future Generation Mice and a Grantee shall
require a license from XT as set forth herein to make, use or sell Covered
Products derived from any Future Generation Mice. In addition, the provisions of
Sections 2.3, 2.5 and 2.6 for Mice apply to Future Generation Mice.
10. PATENT DEFENSE
10.1 Suit Brought Against Xenotech or One Grantee. If suit is brought
against Xenotech and/or either Grantee or its Affiliates alleging infringement
of the patent rights of third parties, the parties [ * ], the Grantees shall
jointly control the litigation and [ * ].
Any liabilities arising from such suit shall be [ * ] the
Grantees. In the event that a Grantee who is not a party to the suit decides not
to participate in the defense of the suit and share in the expenses thereof and
any liabilities arising therefrom [ * ] Notwithstanding the foregoing, a Grantee
who is sued shall keep XT and the other Grantee reasonably informed of all
material developments in connection with any such claim, suit or proceeding as
it relates to Licensed Technology.
10.2 Suit Brought Against Both Grantees. If a suit is brought against
both Grantees or their Affiliates and [ * ] the Grantees shall jointly control
the
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litigation and [ * ]. Any liabilities arising from such suit shall be [ * ]
by the Grantees. In the event that a Grantee or its Affiliate is dismissed from
the suit and the Grantee decides not to continue to participate in the defense
of the suit and share in the expenses thereof and any liabilities arising
therefrom, such Grantee shall [ * ]
11. CONFIDENTIALITY; PUBLICATION
11.1 Confidentiality. Except as expressly provided herein, the Grantees
and XT agree that, for the term of this Agreement and for five years thereafter,
the receiving Grantee shall keep completely confidential and shall not publish
or otherwise disclose and shall not use for any purpose any information
furnished to it by the other Grantee or by XT pursuant to this Agreement
(including, without limitation, knowhow), except to the extent that it can be
established by the receiving Grantee by competent proof that such information:
(a) was already known to the receiving Grantee, other than under
an obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving Grantee;
(c) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving Grantee in breach of this Agreement; or
(d) was subsequently lawfully disclosed to the receiving Grantee
by a person other than a Grantee or XT or developed by the receiving Grantee
without reference to any information or materials disclosed by the disclosing
party.
11.2 Permitted Disclosure. Notwithstanding Sections 11.1 above and
17.19 below, each Grantee hereto may nevertheless disclose the other Grantee's
or XT's information to the extent such disclosure is reasonably necessary in
filing or prosecuting patent applications, prosecuting or defending litigation,
complying with applicable governmental regulations or otherwise submitting
information to tax or other governmental authorities, making a permitted
sublicense or other exercise of its rights hereunder or conducting clinical
trials, provided that if a Grantee or XT is required to make any such disclosure
of another Grantee's or XT's secret or confidential information, other than
pursuant to a confidentiality agreement, it will give reasonable advance notice
to such Grantee or XT of such disclosure requirement and, save to the extent
inappropriate in the case of
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patent applications, will use efforts consistent with prudent business judgement
to secure confidential treatment of such information prior to its disclosure
(whether through protective orders or confidentiality agreements or otherwise).
11.3 Scientific Publication. Publications of (i) the shared research
results pursuant to Section 5.4(a), (ii) the research results generated pursuant
to Section 9.1 and (iii) any research results which relate to the
characterization of Mice by CGI or JTI, their respective employees or
independent contractors employed by CGI or JTI will require the prior consent of
the other of CGI or JTI, as the case may be, such consent not to be unreasonably
withheld or delayed.
12. INDEMNIFICATION
12.1 CGI. Subject to compliance by XT and/or JTI with its obligations
set forth in Section 12.4 below, CGI agrees:
(a) to indemnify and hold XT and its directors, officers,
employees and agents harmless from and against any losses, claims, damages,
liabilities or actions (including reasonable attorneys' fees and court and other
expenses of litigation) (collectively, the "Liabilities") suffered or incurred
in connection with third party claims relating to the [ * ] arising from any
Covered Product manufactured, used, sold or otherwise distributed by CGI and its
Affiliates or Sublicensees;
(b) to indemnify and hold XT, JTI, JTI's Affiliates and their
directors, officers, employees and agents harmless from and against any
Liabilities suffered or incurred in connection with third party claims relating
to intellectual property rights [ * ] arising from any Covered Product
manufactured, used, sold or otherwise distributed by CGI and its Affiliates or
Sublicensees; and
(c) to indemnify and hold XT, JTI, JTI's Affiliates and their
directors, officers, employees and agents harmless from and against any
Liabilities suffered or incurred in connection with third party claims other
than relating to [ * ] or other intellectual property rights arising from any
Covered Product manufactured, used, sold or otherwise distributed by CGI and its
Affiliates or Sublicensees; provided, however, that CGI shall not be required to
provide indemnification under this clause (c) to any party for any Liabilities
suffered or incurred in connection with third party claims resulting from the
gross negligence, recklessness or intentional misconduct by such party or its
Affiliates, or their directors, officers, employees or agents, where CGI holds a
Product License other than an Exclusive Worldwide Product License for such
Covered Product; and provided further that CGI shall not be required to provide
indemnification under this clause (c) to XT for any Liabilities resulting from
the gross negligence, recklessness or intentional misconduct by
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XT or its Affiliates, or their directors, officers, employees or agents, where
the Covered Product binds to a Previously Selected Antigen.
12.2 JTI. Subject to compliance by XT and/or CGI with its obligations
set forth in Section 12.4 below, JTI agrees:
(a) to indemnify and hold XT and its directors, officers,
employees and agents harmless from and against any Liabilities suffered or
incurred in connection with third party claims relating to the [ * ]
arising from any Covered Product manufactured, used, sold or otherwise
distributed by JTI and its Affiliates or Sublicensees;
(b) to indemnify and hold XT, CGI, CGI's Affiliates and their
directors, officers, employees and agents harmless from and against any
Liabilities suffered or incurred in connection with third party claims relating
to intellectual property rights [ * ] arising form any Covered Product
manufactured, used, sold or otherwise distributed by JTI and its Affiliates or
Sublicensees;
(c) to indemnify and hold XT, CGI, CGI's Affiliates and their
directors, officers, employees and agents harmless from and against any
Liabilities suffered or incurred in connection with third party claims other
than relating to [ * ] or other intellectual property rights arising from any
Covered Product manufactured, used, sold or otherwise distributed by JTI and its
Affiliates or Sublicensees; provided, however, that JTI shall not be required to
provide indemnification under this clause (c) to any party for any Liabilities
resulting from the gross negligence, recklessness or intentional misconduct by
such party or its Affiliates, or their directors, officers, employees or agents,
where JTI holds a Product License other than an Exclusive Worldwide Product
License for such Covered Product; and provided further that JTI shall not be
required to provide indemnification under this clause (c) to XT for any
Liabilities resulting from the gross negligence, recklessness or intentional
misconduct by XT or its Affiliates, or their directors, officers, employees or
agents, where the Covered Product binds to a Previously Selected Antigen.
12.3 XT. Subject to compliance by CGI and/or JTI with the obligations
set forth in Section 12.4, XT agrees to indemnify and hold CGI and JTI and their
respective Affiliates and their directors, officers, employees and agents
harmless from and against Liabilities suffered or incurred in connection with
third-party claims arising from any Covered Product manufactured, used, sold or
otherwise distributed by licensees of XT (other than CGI or JTI or their
Affiliates).
12.4 Procedure. If a party (an "Indemnitee") intends to claim
indemnification under this Article 12, it shall promptly notify the indemnifying
party (the "Indemnitor") in writing of
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any loss, claim, damage, liability or action in respect of which the Indemnitee
or its directors, officers, employees or agents intend to claim such
indemnification, and the Indemnitor shall have the right to participate in, and,
to the extent the Indemnitor so desires, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
Indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitor, if representation of such Indemnitee by
the counsel retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other party
represented by such counsel in such proceeding. The indemnity agreement in this
Article 12 shall not apply to amounts paid in settlement of any loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Indemnitor, which consent shall not be withheld or delayed unreasonably.
The failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 12, but the omission so to deliver written notice
to the Indemnitor shall not relieve it of any liability that it may have to any
party claiming indemnification otherwise than under this Article 12. The party
claiming indemnification under this Article 12, its employees and agents, shall
cooperate fully with the Indemnitor and its legal representatives in the
investigation of any action, claim or liability covered by this indemnification.
13. REPRESENTATIONS AND WARRANTIES
13.1 XT. XT represents and warrants that: (i) it has the full right and
authority to enter into this Agreement; (ii) there are no existing or threatened
actions, suits or claims pending against XT with respect to the subject matter
hereof or the right of XT to enter into and perform its obligations under this
Agreement; (iii) it has not entered and during the term of this Agreement will
not enter any other agreement inconsistent or in conflict with this Agreement;
(iv) Schedule 1 hereto sets forth the [ * ] Technology as of the Effective Date
and Schedule 2 hereto sets forth the [ * ] Technology as of the Effective Date;
and (v) Schedule 3 hereto sets forth all royalties, license fees, milestone
payments and similar payments due to third parties for which a Grantee would be
obligated to reimburse XT under the Product Licenses as of the Effective Date.
In the event that XT acquires rights to intellectual property that would become
either [ * ] Technology or [ * ] Technology, XT will promptly update Schedule 1
or Schedule 2, as the case may be, and provide copies thereof to each Grantee.
In the event that XT enters into any agreement which could require a Grantee to
reimburse XT for any additional royalties, license fees, milestone payments or
similar payments, XT will promptly update Schedule 3 and provide copies thereof
to each Grantee.
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13.2 CGI. CGI represents and warrants that: (i) it has the full right
and authority to enter into this Agreement, (ii) to the knowledge of CGI, there
are no existing or threatened actions, suits or claims pending with respect to
the subject matter hereof (except for the pending or threatened litigation with
GenPharm International, Inc.) or the right of CGI to enter into and perform its
obligations under this Agreement; and (iii) it has not entered and during the
term of this Agreement will not enter any other agreement inconsistent or in
conflict with this Agreement.
13.3 JTI. JTI represents and warrants that: (i) it has the full right
and authority to enter into this Agreement, (ii) to the knowledge of JTI, there
are no existing or threatened actions, suits or claims pending with respect to
the subject matter hereof (except for the pending or threatened litigation with
GenPharm International, Inc.) or the right of JTI to enter into and perform its
obligations under this Agreement; and (iii) it has not entered and during the
term of this Agreement will not enter any other agreement inconsistent or in
conflict with this Agreement.
13.4 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, XT MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF ITS
TECHNOLOGY CLAIMS, ISSUED OR PENDING.
14. TAXES AND TAX INDEMNITY
14.1 Withholding Taxes.
14.1.1 Unless immediately reimbursable under Section 14.1.2 below,
all payments required to be made pursuant to a license granted hereunder shall
be without deduction or withholding for or on account of any taxes (other than
taxes imposed on or measured by net income) or similar governmental charge
imposed by a jurisdiction. Such taxes are referred to herein as "Withholding
Taxes" and such Withholding Taxes shall be the sole responsibility of the
withholding party. The withholding party shall provide a certificate evidencing
payment of any Withholding Taxes hereunder.
14.1.2 XT agrees to elect to claim a tax credit for Withholding
Taxes with respect to which it is entitled so to elect, and further agrees not
to amend such election for the full carry-forward period with respect to such
credit. At the time that XT realizes a reduction in U.S. tax liability by
actually utilizing the Withholding Taxes as a credit against regular U.S. tax
liability (determined on a "first-in-first-out" basis pro rata with other
available foreign tax credits), then the amount of such reduction attributable
to such credit shall immediately be reimbursed to the withholding party. For
these purposes, a
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reduction in U.S. tax liability shall include both a direct reduction in XT's
own tax liability and a reduction in the U.S. tax liability of any of its
partners.
14.2 Tax Indemnity. Except as provided in Section 14.1, each party (the
"Tax Indemnitor") shall indemnify and hold harmless the other party hereto (each
a "Tax Indemnitee") from and against any tax or similar governmental charge
assessed solely because of this Agreement, with respect to and directly
attributable to the income or the assets of the Tax Indemnitor. In the event
that any governmental agency shall make a claim against a party hereto which
could give rise to an indemnity hereunder, such potential Tax Indemnitee shall
give reasonably prompt notice to the potential Tax Indemnitor of the assertion
of such claim. If the transmission of such notice is unreasonably deferred and
has a material, adverse affect on the ability of the potential Tax Indemnitor to
challenge such claim, such potential Tax Indemnitor shall be released from
liability hereunder. The Tax Indemnitor alone shall (at its own expense) control
the defense or compromise of any such claim. The Tax Indemnitee shall execute
any documents required to enable Tax Indemnitor to defend such claim, provide
any information necessary therefor, and cooperate with Tax Indemnitor in such
defense.
14.3 XT Tax Indemnity. XT shall indemnify and hold harmless CGI and JTI
and their Affiliates from and against any increase to their respective country
of incorporation income tax liability directly attributable to a positive
adjustment to the amount of gross receipts (an "Adjustment") reported or
reportable by such party from the income, including the royalty income, received
from CGI or JTI on Covered Products. The amount payable hereunder shall be equal
to the difference between (a) the product of (i) the amount of the Adjustment,
and (ii) the highest combined marginal corporate tax rate in the respective
country of incorporation in effect for the taxable year for which such
Adjustment is made, and (b) the reduction in the party's foreign tax liability,
which for purposes of this Agreement shall be equal to the product of (i) the
amount of any correlative adjustment to its foreign taxable income, and (ii) the
highest combined marginal foreign corporate tax rate in effect for the taxable
year for which the correlative adjustment is made. No indemnification payment
shall be required hereunder until comprehensive efforts to obtain a correlative
adjustment to CGI's or JTI's, as the case may be, or its Affiliates' taxable
income in a foreign state (which may include, for example invoking competent
authority provisions under the U.S. Japanese Income Tax Treaty (if applicable)
or other applicable bilateral tax treaty) have, to the extent reasonable to do
so, been exhausted.
15. TERM; TERMINATION
15.1 Term. This Agreement shall commence on the date first above
written, and unless terminated pursuant to the other
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provisions of this Article 15, shall terminate on the later of (i) the
expiration of the last to expire patent covering the Licensed Technology or (ii)
the twentieth anniversary of the effective date of this Agreement.
15.2 Breach. If a party to this Agreement believes that another party
to this Agreement shall have committed a material breach hereunder, and such
breach shall have continued for sixty days after written notice thereof was
provided to the allegedly breaching party, unless the allegedly breaching party
has cured any such material breach or it has been waived by the notifying party
prior to the expiration of the sixty-day period, the party alleging the material
breach shall have the right to initiate an arbitration proceeding in accordance
with Section 17.15 below. If the arbitrators determine in such proceeding that a
material breach has occurred, they shall also determine an appropriate remedy
and the breaching party shall cure such breach within thirty days following the
final decision of the arbitrators or such other time as directed by the
arbitrators.
15.3 Accrued Rights. Termination, relinquishment or expiration of this
Agreement for any reason shall be without prejudice to any rights which shall
have accrued to the benefit of a party prior to such termination, or expiration.
Such termination, relinquishment or expiration shall not relieve a party from
obligations which are expressly indicated to survive termination or expiration
of this Agreement.
15.4 Surviving Obligations. Without limiting the foregoing, Sections
8.2, 9.1, 9.2, 9.3 and 13.4 and Articles 3, 10, 11, 12, 14, 15 and 17 of this
Agreement shall survive the expiration or termination of this Agreement.
16. TERMINATION OF CERTAIN AGREEMENTS
The Master Research and License Agreement among the parties effective
as of January 1, 1994, the Xenotech Product Research and License Agreement
[ * ] among the parties effective as of January 20, 1994, and the Xenotech
Product Research and License Agreement [ * ] among the parties effective as of
January 20, 1994, each shall terminate as of the Effective Date.
17. MISCELLANEOUS PROVISIONS
17.1 Governing Laws. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, without regard to
conflicts of law principles.
17.2 Waiver. It is agreed that no waiver by a party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
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17.3 Assignments. Neither this Agreement nor any interest hereunder
shall be assignable by a party without the prior written consent of the other
parties; provided, however, that CGI or JTI may assign this Agreement without
such consent to (a) an Affiliate (provided that such Affiliate is two-thirds or
greater owned directly or indirectly), or (b) an entity that acquires
substantially all of the assets of the Grantee's monoclonal antibody business
segment. The terms and conditions of this Agreement shall be binding on and
inure to the benefit of the permitted successors and assigns of the parties.
17.4 Independent Contractors. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
17.5 Compliance with Laws. In exercising their rights under this
Agreement, the parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this Agreement.
17.6 Further Actions. Each party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
17.7 No Implied Obligations. Nothing in this Agreement shall be deemed
to require Grantees to exploit the Licensed Technology nor prevent Grantees from
commercializing products similar to or competitive with the Covered Products, in
addition to or in lieu of such products.
17.8 Notices. Any notice required or permitted to be given to the
parties hereto shall be given in writing and shall be deemed to have been
properly given if delivered in person or when received if mailed by first class
certified mail to the other parties at the appropriate address as set forth
below or to such other addresses as may be designated in writing by the parties
from time to time during the term of this Agreement.
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranomon 2-chome
Minato-ku, Tokyo 105
Japan
Attn: Vice President,
Pharmaceutical Division
with a copy to: JT America Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Attn: President
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and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Attn: Neal N. Beaton, Esq.
Cell Genesys, Inc.: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: President
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attn: Julian N. Stern, Esq.
Xenotech: Xenotech, L.P.
c/o Xenotech, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: Chief Financial Officer
17.9 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of the parties are subject to prior compliance with the
export regulations of the United States and Japan and such other United States
or Japanese laws and regulations as may be applicable, and to obtaining all
necessary approvals required by the applicable agencies of the governments of
the United States and Japan. Each party shall use efforts consistent with
prudent business judgement to obtain such approvals.
17.10 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties shall discuss in good faith appropriate
revised arrangements.
17.11 Force Majeure. Nonperformance of a party shall be excused to the
extent that performance is rendered impossible by strike, fire, earthquake,
flood, governmental acts or orders or restrictions, failure of suppliers, or any
other reason where failure to perform,is beyond the reasonable control and not
caused by the negligence, intentional conduct or misconduct of the nonperforming
Grantee.
17.12 Supply of Mice in Certain Circumstances. Each of CGI and JTI
agrees to transfer new colonies of Mice to the other in the event that existing
colonies of such Mice are lost as a result of events, such as earthquake, fire,
flood, plague or other catastrophe.
17.13 Agreement to Discuss Revisions. If at any time after the third
anniversary of the Effective Date of this Agreement,
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either CGI or JTI reasonably requests reconsideration of provisions of this
Agreement, [ * ] the parties agree to discuss in good faith possible changes
to such provisions mutually agreeable to the parties.
17.14 No Consequential Damages. IN NO EVENT SHALL A PARTY HERETO BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER.
17.15 Dispute Resolution; Arbitration. The parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between the Chief Executive Officer of CGI
and the Vice President of the Pharmaceutical Division of JTI. Except as provided
by Section 4.2(iv), any dispute under this Agreement which is not settled after
such meeting, shall be finally settled by binding arbitration, conducted in
accordance with the Rules of Arbitration of the International Chamber of
Commerce by three arbitrators appointed in accordance with said rules. The
arbitration proceedings and all pleadings and written evidence shall be in the
English language. Any written evidence originally in a language other than
English shall be submitted in English translation accompanied by the original or
a true copy thereof. The costs of the arbitration, including administrative and
arbitrators' fees, shall be shared equally by the parties to the arbitration.
Each party shall bear its own costs and attorneys' and witness' fees. The
prevailing party in any arbitration, as determined by the arbitration panel,
shall be entitled to an award against the other party in the amount of the
prevailing party's costs and reasonable attorneys, fees. The arbitration shall
be held in San Francisco, California, if initiated by XT against CGI or by CGI
against XT, or if initiated by JTI, and in Tokyo, Japan, if initiated by XT or
CGI against JTI. A disputed performance or suspended performances pending the
resolution of the arbitration must be completed within thirty days following the
final decision of the arbitrators. Any arbitration subject to this Section 17.15
shall be completed within six months from the filing of notice of a request for
such arbitration.
17.16 Complete Agreement. It is understood and agreed by the parties
that this Agreement constitutes the entire agreement, both written and oral,
among the parties with respect to the subject matter hereof, and that all prior
agreements respecting the subject matter hereof, either written or oral,
expressed or implied, shall be abrogated, canceled, and are null and void and of
no effect. No amendment or change hereof or addition hereto shall be effective
or binding on the parties hereto unless reduced to writing and executed by the
respective duly authorized representatives of the parties.
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17.17 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and together shall be deemed to
be one and the same agreement.
17.18 Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for convenience
of reference only and shall not affect its meaning or interpretation.
17.19 Nondisclosure. Except as set forth in Article 11 hereof, each of
the parties hereto agrees not to disclose to any third person the terms of this
Agreement without the prior written consent of the other parties hereto, except
to advisors, investors, licensees, sublicensees and others on a need to know
basis under circumstances that reasonably ensure the confidentiality thereof, or
to the extent required by law. Without limitation upon any provision of this
Agreement, each of the parties hereto shall be responsible for the observance by
its employees, consultants and contractors of the foregoing confidentiality
obligations.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written, each copy of which shall for all purposes be deemed to be
an original.
JAPAN TOBACCO INC. CELL GENESYS, INC.
By: /s/ Masakazu Kakei By: /s/ R. Scott Greer
------------------------------ -------------------------------
Masakazu Kakei R. Scott Greer
Managing Director, Senior Vice President,
Pharmaceutical Division Corporate Development
XENOTECH, INC. (as General
Partner of XENOTECH, L.P.)
By: /s/ Takashi Kamiya
------------------------------
Takashi Kamiya
Chairman
By: /s/ Raymond M. Withy
------------------------------
Raymond M. Withy
President and
Chief Executive Officer
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Schedule 1
Patent Applications
[ * ]
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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Schedule 2
Patents
[ * ]
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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Schedule 3
Royalties Payable by Xenotech
[ * ]
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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EXHIBIT A
Form of Exclusive Worldwide Product License
THIS PRODUCT LICENSE AGREEMENT (the "Agreement") effective the ____ day
of _________________, ______, is made by and between XENOTECH, L.P., a
California limited partnership ("XT"), and [CELL GENESYS, INC., a Delaware
corporation ("CGI")]* [JAPAN TOBACCO INC., a Japanese corporation ("JTI")]**
("Licensee").
RECITALS
XT desires to grant to Licensee and Licensee desires to acquire from XT
an exclusive worldwide license or sublicense, as the case may be, under the
Licensed Technology to commercialize Products, on the terms and conditions
herein.
NOW, THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:
1. DEFINITIONS
For purposes of this Agreement, the terms set forth in this Article
shall have the meanings set forth below.
1.1 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with any one of CGI, JTI or XT. An entity shall be
regarded as in control of another entity if it owns or controls at least fifty
percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing authority); provided, however, XT
shall not be an Affiliate of CGI or JTI under this Agreement and XT shall not be
considered controlled by CGI or JTI for purposes of determining Affiliates of
CGI or JTI.
1.2 "[ * ] Technology" shall mean (i) all U.S. patent applications and
patents listed on Schedule 1 and patents issuing on such patent applications
owned by or licensed to XT which relate to the [ * ], in each case to the extent
XT has the right to license or sublicense the same; (ii) any continuations,
divisionals, reexaminations, reissues or extensions of any of (i) above; (iii)
any foreign counterparts issued or issuing on any of (i) or (ii) above; and (iv)
[ * ] as set forth in Schedule 1.
1.3 "CGI" shall mean Cell Genesys, Inc.
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the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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1.4 "Effective Date" shall mean the date this Agreement is
executed by XT and Licensee.
1.5 "IND" shall mean an Investigational New Drug Exemption for a
Product, as defined in the U.S. Food, Drug and Cosmetic Act and the regulations
promulgated thereunder, or its non-U.S.
equivalent.
1.6 "JTI" shall mean Japan Tobacco Inc.
1.7 "License Fee" shall have the meaning set forth in
Article 3 hereof.
1.8 "Licensed Field" shall mean [ * ]
1.9 "Licensed Technology" shall mean the [ * ] Technology and the
[ * ] Technology.
1.10 "Master Research License and Option Agreement" shall mean that
certain Master Research License and Option Agreement entered into by CGI, JTI
and XT as of June 28, 1996, as it may be amended.
1.11 "Net Sales" shall mean the [ * ] by Licensee or its Affiliates
and Sublicensees for sales of Product to non-Affiliate customers, [ * ], with
respect to such sales, and [ * ], as reflected in [ * ] of Licensee and its
Affiliates or Sublicensees, to the extent [ * ].
1.12 "Product" shall mean [ * ], including, but not limited to
[ * ]. Product as used herein shall not include a [ * ].
1.13 "Product Antigen" shall mean .
1.14 "Sublicensee" shall mean a third party that is not an
Affiliate to whom Licensee has granted a sublicense under the Licensed
Technology to make, use and/or sell Product to the extent of the rights of
Licensee therein. "Sublicensee" shall also include a third party to whom
Licensee has granted the right to distribute Product under the Licensed
Technology to the extent of the rights of Licensee therein, provided that such
third party is responsible for the marketing and promotion of Product within the
applicable country.
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1.15 "Territory" shall mean all the countries of the world.
1.16 "Universal Receptor Product" shall mean a substance that is
developed utilizing [ * ] Universal Receptor Technology.
1.17 "Universal Receptor Technology" shall mean technology for
universal receptors [ * ] As used herein: (i) "universal
receptor" shall mean a receptor [ * ].
1.18 "Valid Claim" shall mean a claim of a pending or issued and
unexpired patent included within the Licensed Technology, which has not been
held unenforceable, unpatentable or invalid by a court or other governmental
agency of competent jurisdiction, and which has not been admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise.
1.19 "[ * ] Technology" shall mean (i) all U.S. patent applications
and patents listed on Schedule 2 and patents issuing on such applications; (ii)
any continuations, divisionals, reexaminations, reissues or extensions of any of
(i) above; (iii) any foreign counterparts issued or issuing on any of (i) or
(ii) above; and (iv) the Mice (as such term is defined in the Master Research
License and Option Agreement) and [ * ] as set forth on Schedule 2.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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2. LICENSE GRANT
Subject to the terms and conditions of this Agreement, XT hereby grants
to Licensee an exclusive license or sublicense, as the case may be, under the
Licensed Technology, to make and have made Product anywhere in the world for
use, sale, import or other distribution in the Licensed Field in the Territory.
Such license or sublicense shall be exclusive even as to XT, and shall include
the exclusive right to grant and authorize sublicenses for exploitation
worldwide (excluding any rights to the Mice as defined in the Master Research
License and Option Agreement).
3. LICENSE FEE
Licensee shall pay to XT within thirty days of the Effective Date a
license fee of [ * ]
4. ROYALTIES
4.1 Royalty Rates. In consideration for the license and rights granted
herein, Licensee agrees to pay to XT royalties of [ * ] of Net Sales of Product
by it and its Affiliates and Sublicensees.
4.2 Royalty Offsets. Licensee shall have the right to reduce the rate
at which any royalties due to XT are payable pursuant to Section 4.1 to offset
[ * ]; provided, however, that the royalty rates paid by Licensee pursuant to
Section 4.1 shall not be reduced to less than [ * ] of the rate set forth in
Section 4.1. [ * ]
4.3 Single Royalty; Non-Royalty Sales. Only one royalty shall be
payable with respect to any Product, regardless of how many claims or patents
within the Licensed Technology cover such Product. In addition, no royalty shall
be payable under this Article 4 with respect to sales of Product among Licensee
and its Affiliates and/or Sublicensees or for use in research and/or development
or clinical trials.
4.4 No Patent Protection. Royalties shall be payable at
the rates specified in Section 4.1 or 4.2 above only with respect
to sales of a Product that would infringe a Valid Claim in the
country in which such Product is sold. In the event that such
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Product is not covered by a Valid Claim in such country, XT shall be paid a
royalty on such sales in accordance with this Article 4, [ * ].
4.5 Combination Products. In the event that Product is sold in
combination as a single product with another product or component, Net Sales
from such combination sales for purposes of calculating the amounts due under
this Article 4 shall be [ * ]. In the event that no such separate sales are
made in the same quarter by Licensee, Net Sales for royalty determination
shall be [ * ].
4.6 Termination of Royalties. Royalties under Section 4.1, 4.2, or 4.4
will be due until the later of (i) ten years from the first commercial sale of
Product in any country or (ii) on a country-by-country basis, the expiration of
the last-to-expire patent within the Licensed Technology covering the Product in
such country.
5. THIRD PARTY ROYALTIES
5.1 Royalties Payable by XT. XT will be responsible for the payment of
any royalties, license fees and milestone and/or other payments due to third
parties under licenses or similar agreements entered into by XT necessary to
allow the manufacture, use or sale of Product. Licensee shall reimburse XT for
any royalties paid by XT to third parties under licenses or similar agreements
covering Product necessary to allow the manufacture, use or sale or other
exploitation of Product anywhere in the world. Licensee shall continue any such
reimbursement payments to XT until XT's obligation to pay royalties to a third
party under any license covering Product expires or terminates. XT agrees not to
enter into any license or similar agreement after the Effective Date which would
obligate Licensee to make any payments under this Section 5.1 without the prior
written consent of Licensee.
5.2 Royalties Payable by Licensee. Licensee will be responsible for the
payment of any royalties, license fees and milestone and other payments due to
third parties under licenses or similar agreements entered into by Licensee to
allow the manufacture, use or sale of Product.
6. ACCOUNTING AND RECORDS
6.1 Royalty Reports and Payments. After the first
commercial sale of Product on which royalties are required,
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Licensee agrees to make quarterly written reports to XT within eighty days after
the end of each calendar quarter, stating in each such report the number,
description, and aggregate Net Sales of Product sold during the calendar quarter
upon which a royalty is payable under Article 4 above. Concurrently with the
making of such reports, Licensee shall pay to XT royalties at the applicable
rate specified in Section 4.1, 4.2 or 4.4 above and all royalties payable
pursuant to Section 5.1 above, and any adjustment to Net Sales for a prior
period in accordance with the definition of Net Sales in Section 1.11 hereof.
All payments to XT hereunder shall be made in U.S. Dollars to a bank account
designated by XT.
6.2 Early Third Party License Payments. If XT is obligated to pay
royalties to a third party prior to ninety days after the end of the calendar
quarter, XT shall so notify Licensee and Licensee shall provide the reports and
payments set forth in Section 6.1 above not later than ten days before the date
such payments are due to the third party. Up to thirty-five days before such
payments are due, XT may provide Licensee with an invoice by facsimile setting
forth the royalties XT must pay third parties with respect to Licensee's
activities in the Territory in the preceding quarter, and Licensee shall pay
such invoices within thirty days of receipt of such invoice.
6.3 Records; Inspection. Licensee shall keep (and cause its Affiliates
and Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable to XT under
this Agreement. Such books and records shall be kept at the principal place of
business of Licensee or its Affiliates or Sublicensees, as the case may be, for
at least three years following the end of the calendar quarter to which they
pertain. Such records of Licensee or its Affiliates will be open for inspection
during such three-year period by a representative of XT for the purpose of
verifying the royalty statements. Licensee shall require each of its
Sublicensees to maintain similar books and records and to open such records for
inspection during the same three-year period by a representative of Licensee
reasonably satisfactory to XT on behalf of, and as required by, XT for the
purpose of verifying the royalty statements. All such inspections may be made no
more than once each calendar year, at reasonable times mutually agreed by XT and
Licensee. The XT representative will be obliged to execute a reasonable
confidentiality agreement prior to commencing any such inspection. Inspections
conducted under this Section 6.3 shall be at the expense of XT, unless a
variation or error producing an increase exceeding [ * ] of the amount stated
for the period covered by the inspection is established in the course of any
such inspection, whereupon all costs relating thereto will be paid by Licensee.
Upon the expiration of three years following the end of any fiscal year, the
calculation of royalties payable with respect to such year shall be binding and
conclusive, and Licensee shall be released
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from any liability or accountability with respect to royalties for such year.
6.4 Currency Conversion. If any currency conversion shall be required
in connection with the calculation of royalties hereunder, such conversion shall
be made using the selling exchange rate for conversion of the foreign currency
into U.S. Dollars, quoted for current transactions reported in The Wall Street
Journal for the last business day of the calendar quarter to which such payment
pertains.
6.5 Late Payments. Any payments due from Licensee that are not paid on
the date such payments are due under this Agreement shall bear interest to the
extent permitted by applicable law at [ * ], calculated on the number of days
such payment is delinquent. This Section 6.5 shall in no way limit any other
remedies available to any party.
6.6 Withholding Taxes.
6.6.1 Unless immediately reimbursable under Section 6.6.2
below, all payments required to be made pursuant to Articles 3, 4 and 5 hereof
shall be without deduction or withholding for or on account of any taxes (other
than taxes imposed on or measured by net income) or similar governmental charge
imposed by a jurisdiction. Such taxes are referred to herein as "Withholding
Taxes" and such Withholding Taxes shall be the sole responsibility of the
withholding party. The withholding party shall provide a certificate evidencing
payment of any Withholding Taxes hereunder.
6.6.2 XT agrees to elect to claim a tax credit for Withholding
Taxes with respect to which it is entitled so to elect, and further agrees not
to amend such election for the full carry-forward period with respect to such
credit. At the time that XT realizes a reduction in U.S. tax liability by
actually utilizing the Withholding Taxes as a credit against regular U.S. tax
liability (determined on a "first-in-first-out" basis pro rata with other
available foreign tax credits), then the amount of such reduction attributable
to such credit shall immediately be reimbursed to the withholding party. For
these purposes, a reduction in U.S. tax liability shall include both a direct
reduction in XT's own tax liability and a reduction in the U.S.
tax liability of any of its partners.
6.7 Tax Indemnity. Except as provided in Section 6.6, each party (the
"Tax Indemnitor") shall indemnify and hold harmless the other party hereto (each
a "Tax Indemnitee") from and against any tax or similar governmental charge
assessed solely because of this Agreement with respect to and directly
attributable to the income or the assets of the Tax Indemnitor. In the event
that any governmental agency shall make a claim against a party hereto
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which could give rise to an indemnity hereunder, such potential Tax Indemnitee
shall give reasonably prompt notice to the potential Tax Indemnitor of the
assertion of such claim. If the transmission of such notice is unreasonably
deferred and has a material, adverse affect on the ability of the potential Tax
Indemnitor to challenge such claim, such potential Tax Indemnitor shall be
released from liability hereunder. The Tax Indemnitor alone shall (at its own
expense) control the defense or compromise of any such claim. The Tax Indemnitee
shall execute any documents required to enable Tax Indemnitor to defend such
claim, provide any information necessary therefor, and cooperate with Tax
Indemnitor in such defense.
6.8 XT Tax Indemnity. XT shall indemnify and hold harmless Licensee and
its Affiliates from and against any increase to its country of incorporation
income tax liability directly attributable to a positive adjustment to the
amount of gross receipts (an "Adjustment") reported or reportable by such party
from the income, including the royalty income, received from Licensee on Covered
Products. The amount payable hereunder shall be equal to the difference between
(a) the product of (i) the amount of the Adjustment, and (ii) the highest
combined marginal corporate tax rate in the country of incorporation in effect
for the taxable year for which such Adjustment is made, and (b) the reduction in
the party's foreign tax liability, which for purposes of this Agreement shall be
equal to the product of (i) the amount of any correlative adjustment to its
foreign taxable income, and (ii) the highest combined marginal foreign corporate
tax rate in effect for the taxable year for which the correlative adjustment is
made. No indemnification payment shall be required hereunder until comprehensive
efforts to obtain a correlative adjustment to Licensee's or its Affiliates', as
the case may be, taxable income in a foreign state (which may include, for
example invoking competent authority provisions under the U.S. Japanese Income
Tax Treaty (if applicable) or other applicable bilateral tax treaty) have, to
the extent reasonable to do so, been exhausted.
7. RESEARCH and DEVELOPMENT
7.1 Funding and Conduct. Licensee shall independently
furnish and be responsible for funding and conducting all of its
preclinical and clinical research and development of Product, at
its own expense.
7.2 Biomaterials. In the case of Previously Selected Antigens as
defined in the Master Research License and Option Agreement, at the reasonable
request of Licensee, XT shall make available as part of the license granted
hereunder to Licensee [ * ] thus made
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available will be used only by Licensee and its Affiliates and
Sublicensees and manufacturing subcontractors.
8. DUE DILIGENCE
8.1 [ * ]
8.1.1 Licensee agrees [ * ] as may be agreed upon by the
parties [ * ] the Effective Date.
8.1.2 Notwithstanding the foregoing, Licensee shall be [ * ]
in the United States or Japan.
8.2 Failure to Meet Due Diligence Obligation.
8.2.1 If the diligence requirements set forth in Section 8.1
are not met by Licensee (or its Affiliates or Sublicensees) in the United States
or in Japan, Licensee's rights hereunder shall terminate upon written notice by
XT to Licensee and subject to Sections 8.3, 8.4 and 13.3 below.
8.2.2. Notwithstanding Section 8.2.1, the license granted
hereunder to Licensee shall not terminate by reason of [ * ], to the extent that
prudent business judgment, based on circumstances outside of Licensee's
reasonable control, reasonably justifies such delay.
8.3 Dispute Resolution. In the event that a dispute arises whether the
diligence requirements in Article 8 have been met or circumstances exist which
Licensee believes justifies a failure on its part to meet such obligation, the
parties will attempt to resolve any dispute by mutual agreement during a period
of 30 days following Licensee's receipt of the notice under Section 8.2.1.
8.4 Arbitration. In the event that the parties are unable to resolve
such dispute pursuant to Section 8.3 above, such dispute shall be settled
between XT and Licensee by binding arbitration as set forth in Section 14.12. If
the arbitrator determines that the party acted in good faith, but failed to meet
its obligations under Section 8.1 above, the license granted to such party shall
not terminate unless the nonperforming party
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fails to cure such non-performance within a reasonable period of time, as
determined by the arbitrator.
9. PATENTS
9.1 [ * ] Technology.
(a) XT or its licensor, as they may agree, shall have
responsibility for preparing, filing, prosecuting and maintaining patents and
patent applications worldwide relating to the [ * ] Technology and conducting
any interferences, oppositions, reexaminations, or requesting reissues or patent
term extensions with respect to the [ * ] Technology. XT shall keep Licensee
reasonably informed as to the status of such patent matters, including without
limitation, by providing Licensee the opportunity to review and comment on any
documents which will be filed in any patent office, and providing Licensee
copies of any documents received by XT from such patent offices including notice
of all interferences, reexaminations, oppositions or requests for patent term
extensions. Licensee shall cooperate with and assist XT in connection with such
activities, at XT's request and expense.
(b) In the event that Licensee becomes aware that any
[ * ] Technology necessary for the practice of the license granted
herein is infringed or misappropriated by a third party or is subject to a
declaratory judgment action arising from such infringement, Licensee shall
promptly notify XT and XT shall thereafter promptly notify the owner of such
intellectual property. XT or its licensor, as they may agree, shall have the
exclusive right to enforce, or defend any declaratory judgment action, at its
expense, involving any [ * ] Technology. In such event, XT shall keep
Licensee reasonably informed of the progress of any such claim, suit or
proceeding. Any recovery received by XT as a result of any such claim, suit or
proceeding shall be used first to reimburse XT for all expenses (including
attorneys, and professional fees) incurred in connection with such claim, suit
or proceeding, [ * ].
9.2 [ * ] Technology.
9.2.1 Licensee shall, at its expense, have the initial
worldwide responsibility for preparing, filing, prosecuting and maintaining
patent applications and conducting any interferences, oppositions,
reexaminations, or requesting reissues or patent term extensions with respect to
[ * ] Technology, except to the extent XT may not have the right to do so.
Licensee shall give XT the opportunity to review the status of all such pending
patent applications and actions and shall keep XT fully informed of the progress
of such applications and actions, including, without limitation, by promptly
providing XT with copies of all worldwide correspondence sent to and received
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from patent offices, and providing notice of all interferences, reexaminations,
oppositions or requests for patent term extensions. In the event that Licensee
declines or fails to prepare, file, prosecute or maintain such patent
applications or patents or take such other actions, relating to the Product in
any country, it shall promptly and in no event later than ninety days prior to
any filing deadline, provide notice to XT. XT shall have the right to assume
such responsibilities at its own expense, using counsel of its choice.
9.2.2 In the event that Licensee becomes aware that any [ * ]
Technology is infringed or misappropriated by a third party in any country of
the world, or is subject to a declaratory judgment action arising from such
infringement in any country, Licensee shall promptly notify XT and XT shall
thereafter promptly notify the owner of such intellectual property. Licensee
shall have the exclusive right to enforce, or defend any declaratory judgment
action, in any country of the world, at its expense, involving any [ * ]
Technology. In such event, Licensee shall keep XT reasonably informed of the
progress of any such claim, suit or proceeding. Any recovery by Licensee
received as a result of any such claim, suit or proceeding shall be used first
to reimburse Licensee for all expenses (including attorneys, and professional
fees) incurred in connection with such claim, suit or proceeding, [ * ]
9.3 Infringement Claims. If the production, sale or use of Product
pursuant to this Agreement results in any claim, suit or proceeding alleging
patent infringement against Licensee (or its Affiliates or Sublicensees),
Licensee shall promptly notify XT thereof in writing setting forth the facts of
such claim in reasonable detail. [ * ] Licensee shall have the exclusive right
to defend and control the defense of any such claim, suit or proceeding, at its
own expense, using counsel of its choice. Licensee shall keep XT reasonably
informed of all material developments in connection with any such claim, suit or
proceeding as it relates to the Licensed Technology, Licensee shall have the
right to deduct any damages and expenses (including attorneys' and professional
fees) against any amounts due, or which may become due, to XT pursuant to this
Agreement. Notwithstanding the above, Licensee shall not be able to settle any
such claim, suit or proceeding that involves any admission of the invalidity of
the Licensed Technology.
9.4 Patent Marking. Licensee agrees to mark and have its
Affiliates and Sublicensees mark all Products sold pursuant to
this Agreement in accordance with the applicable statute or
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regulations in the country or countries of manufacture and sale
thereof.
10. CONFIDENTIALITY
10.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for five years
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose any information
furnished to it by another party hereto pursuant to this Agreement except to the
extent that it can be established by the receiving party by competent proof that
such information:
(a) was already known to the receiving party, other
than under an obligation of confidentiality, at the time of
disclosure;
(b) was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the
receiving party;
(c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or
(d) was subsequently lawfully disclosed to the receiving party
by a person other than a party or developed by the receiving party without
reference to any information or materials disclosed by the disclosing party.
10.2 Permitted Disclosures. Notwithstanding Sections 10.1 above and
14.16 below, each party hereto may disclose the other party's information to the
extent such disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable
governmental regulations or otherwise submitting information to tax or other
governmental authorities, making a permitted sublicense or other exercise of its
rights hereunder or conducting clinical trials, provided that if a party is
required to make any such disclosure of the other party's secret or confidential
information, other than pursuant to a confidentiality agreement, it will give
reasonable advance notice to the latter party of such disclosure requirement
and, save to the extent inappropriate in the case of patent applications, will
use efforts consistent with prudent business judgment to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or otherwise). Notwithstanding the foregoing, XT shall not
disclose to third parties, clinical data or regulatory filings received from
Licensee except as agreed in writing by Licensee.
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11. SUBLICENSES
Pursuant to Article 2 herein, Licensee will have the right to grant and
authorize sublicenses to third parties; provided, however, the Licensee shall
remain responsible for any payments due XT for Net Sales of Product by any
Sublicensee. [ * ]. Any sublicense granted by Licensee pursuant to this
Agreement shall provide that the Sublicensee will be subject to the applicable
terms of this Agreement. Licensee shall provide XT with a copy of relevant
portions of each sublicense agreement, as reasonably required by XT.
12. REPRESENTATIONS and WARRANTIES
12.1 XT. XT represents and warrants that:
(i) it has the full right and authority to enter into
this Agreement and grant the rights and licenses granted herein;
(ii) it has not previously granted and will not grant any
rights inconsistent or in conflict with the rights and licenses granted to
Licensee herein;
(iii) there are no existing or threatened actions, suits or
claims pending against XT with respect to the Licensed Technology or the right
of XT to enter into and perform its obligations under this Agreement;
(iv) it has not previously granted, and will not grant during
the term of this Agreement, any right, license or interest in and to the
Licensed Technology, or any portion thereof, with respect to the Product, or its
manufacture or use;
(v) Schedule 3 hereto sets forth all royalties, license fees,
milestone payments and similar payments due to third parties for which Licensee
is obligated to reimburse XT under Section 5.1 above as of the Effective Date;
and
(vi) the Licensed Technology is all the technology owned by or
licensed to XT as of the Effective Date.
12.2 Licensee. Licensee represents and warrants that:
(i) it has the full right and authority to enter into this
Agreement,
(ii) to its knowledge, there are no existing or threatened
actions, suits or claims pending with respect to the subject matter hereof
(except for the pending or threatened litigation with GenPharm International,
Inc.) or the right of
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Licensee to enter into and perform its obligations under this Agreement; and
(iii) it has not entered and during the term of this Agreement
will not enter any other agreement inconsistent or in conflict with this
Agreement.
12.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, XT MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF LICENSED
TECHNOLOGY CLAIMS, ISSUED OR PENDING.
12.4 Effect of Representations and Warranties. It is understood that if
the representations and warranties under this Article 12 are not true and
accurate and a party incurs liabilities, costs or other expenses as a result of
such falsity, the party at fault shall indemnify, defend and hold the injured
party harmless from and against any such liabilities, costs or expenses
incurred, provided that the party at fault receives prompt notice of any claim
against the injured party resulting from or related to such falsity and the sole
right to control the defense or settlement thereof.
13. TERM AND TERMINATION
13.1 Effectiveness. This Agreement shall become effective as of the
Effective Date and the license rights granted by XT under Article 2 above shall
be in full force and effect as of such date.
13.2 Term. Unless earlier terminated pursuant to the other provisions
of this Article 13, this Agreement shall continue in full force and effect until
the later of
(i) the expiration of the last to expire patent within
the Licensed Technology claiming Product; or
(ii) the twentieth anniversary of the Effective Date.
The licenses granted under Article 2 shall survive the expiration (but not an
earlier termination) of this Agreement; provided that such licenses shall in
such event become nonexclusive.
13.3 Termination for Breach. Either party to this Agreement may
terminate this Agreement in the event the other party shall have materially
breached or defaulted in the performance of any of its material obligations
hereunder, and such shall have continued for sixty days after written notice
thereof was provided to the breaching party by the nonbreaching party that
terminates the Agreement as to such party. Any termination shall become
effective at the end of such sixty day period unless the breaching party has
cured any such breach or default prior to the
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expiration of the sixty day period. However, if the party alleged to be in
breach of this Agreement disputes such breach within such sixty day period, the
non-breaching party shall not have the right to terminate this Agreement unless
it has been determined by an arbitration proceeding in accordance with Section
14.12 below that this Agreement was materially breached, and the breaching party
fails to cure such breach within thirty days following the final decision of the
arbitrators or such other time as directed by the arbitrators.
13.4 Other Termination Rights. Licensee may terminate this Agreement
and the license granted herein, in its entirety or as to any particular patent
within the Licensed Technology in a particular country, at any time, by
providing XT ninety-days written notice. In the event of termination as to a
particular country, the subject patent in such country shall cease to be within
the Licensed Technology for all purposes of this Agreement.
13.5 Effect of Termination.
13.5.1 Termination of this Agreement for any reason shall not
release either party hereto from any liability which at the time of such
termination has already accrued to the other party or which is attributable to a
period prior to such termination.
13.5.2 In the event this Agreement is terminated for any
reason, Licensee and its Affiliates and Sublicensees shall have the right to
sell or otherwise dispose of the stock of any Product subject to this Agreement
then on hand. Upon termination of this Agreement by XT for any reason, any
sublicense granted by Licensee hereunder shall survive, provided that upon
request by XT, such Sublicensee promptly agrees in writing to be bound by the
applicable terms of this Agreement.
13.5.3 This Agreement, including, without limitation, any
licenses or sublicenses granted pursuant to this Agreement, shall survive any
dissolution, liquidation or acquisition of XT. Such licenses shall remain in
full force and effect even after any distribution, following dissolution, of the
intellectual property owned or licensed to XT, to any entity. Any transfer of
such intellectual property prior to or following dissolution shall be subject to
the licenses granted herein.
13.5.4 This Agreement, including the license granted in
Article 2, is independent of, and shall not be affected by, any breach or
termination of the Master Research License and Option Agreement or any other
agreement between the parties or their Affiliates. In the event of the
termination of the Master Research License and Option Agreement, the rights and
obligations of the parties hereto under Article 12 thereof shall be deemed to be
part of this Agreement.
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13.5.5 Sections 6.3, 6.5, 6.6, 6.7 and 6.8 and Articles 10,
12, 13 and 14 shall survive the expiration and any termination of this Agreement
for any reason.
14. MISCELLANEOUS
14.1 Governing Laws. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, without regard to
conflicts of law principles.
14.2 Waiver. It is agreed that no waiver by any party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
14.3 Assignment. This Agreement and the license granted hereunder may
not be assigned by Licensee to any third party without the written consent of
XT, and XT may not assign this Agreement to a third party without the consent of
Licensee; except any party may assign this Agreement without such consent to (a)
an Affiliate (provided that such Affiliate is two-thirds or greater owned
directly or indirectly) or (b) an entity that acquires substantially all of the
assets of the monoclonal antibody business segment of the assigning party. The
terms and conditions of this Agreement shall be binding on and inure to the
benefit of the permitted successors and assigns of the parties.
14.4 Independent Contractors. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
14.5 Compliance with Laws. In exercising their rights under this
license, the parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this license.
14.6 No Implied Obligations. Except as expressly provided in Article 8
above, nothing in this Agreement shall be deemed to require Licensee to exploit
the Licensed Technology nor to prevent Licensee from commercializing products
similar to or competitive with any Product, in addition to or in lieu of such
Product.
14.7 Notices. Any notice required or permitted to be given to the
parties hereto shall be given in writing and shall be deemed to have been
properly given if delivered in person or when received if mailed by first class
certified mail to the other party at the appropriate address as set forth below
or to such other addresses as may be designated in writing by the parties from
time to time during the term of this Agreement.
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XT: Xenotech, L.P.
322 Lakeside Drive
Foster City, California 94404
Attn: Chief Financial Officer
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranomon 2-chome
Minato-ku, Tokyo 105
Japan
Attn: Vice President,
Pharmaceutical Division
with a copy to: JT America Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Attn: President
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Attn: Neal N. Beaton, Esq.
Cell Genesys, Inc.: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: President
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attn: Julian N. Stern, Esq.
14.8 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of XT and Licensee are subject to prior compliance with
United States [and Japanese]** export regulations and such other United States
[and Japanese]** laws and regulations as may be applicable, and to obtaining all
necessary approvals required by the applicable agencies of the government of the
United States [and Japan].** Licensee shall use efforts consistent with prudent
business judgment to obtain such approvals. XT shall cooperate with Licensee and
shall provide assistance to Licensee as reasonably necessary to obtain any
required approvals.
14.9 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties shall discuss in good faith appropriate
revised arrangements.
14.10 Force Majeure. Nonperformance of any party (except
for payment obligations) shall be excused to the extent that
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performance is rendered impossible by strike, fire, earthquake, flood,
governmental acts or orders or restrictions, failure of suppliers, or any other
reason where failure to perform,is beyond the reasonable control and not caused
by the negligence, intentional conduct or misconduct of the nonperforming party.
14.11 No Consequential Damages. IN NO EVENT SHALL ANY PARTY HERETO BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF RIGHTS HEREUNDER.
14.12 Dispute Resolution; Arbitration. The parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between senior executives of the parties.
Any dispute under this Agreement which is not settled after such meeting, shall
be finally settled by binding arbitration, conducted in accordance with the
Rules of Arbitration of the International Chamber of Commerce by three
arbitrators appointed in accordance with said rules. The arbitration proceedings
and all pleadings and written evidence shall be in the English language. Any
written evidence originally in a language other than English shall be submitted
in English translation accompanied by the original or a true copy thereof. The
costs of the arbitration, including administrative and arbitrators' fees, shall
be shared equally by the parties. Each party shall bear its own costs and
attorneys' and witness' fees. The prevailing party in any arbitration, as
determined by the arbitration panel, shall be entitled to an award against the
other party in the amount of the prevailing party's costs and reasonable
attorneys, fees. The arbitration shall be held [in San Francisco, California],*
[Tokyo, Japan, if initiated by XT against Licensee and in San Francisco,
California, if initiated by Licensee against XT].** A disputed performance or
suspended performances pending the resolution of the arbitration must be
completed within thirty days following the final decision of the arbitrators.
Any arbitration shall be completed within six months from the filing of notice
of a request for such arbitration.
14.13 Complete Agreement. It is understood and agreed between XT and
Licensee that this Agreement constitutes the entire agreement, both written and
oral, between the parties with respect to the subject matter hereof, and that
all prior agreements respecting the subject matter hereof, either written or
oral, expressed or implied, shall be abrogated, canceled, and are null and void
and of no effect. No amendment or change hereof or addition hereto shall be
effective or binding on either of the parties hereto unless reduced to writing
and executed by the respective duly authorized representatives of XT and
Licensee.
14.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
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14.15 Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for convenience
of reference only and shall not affect its meaning or interpretation.
14.16 Nondisclosure. Except as provided in Article 10, each of the
parties hereto agrees not to disclose to any third party the terms of this
Agreement without the prior written consent of each other party hereto, except
to advisors, investors and others on a need to know basis under circumstances
that reasonably ensure the confidentiality thereof, or to the extent required by
law. Without limitation upon any provision of this Agreement, each of the
parties hereto shall be responsible for the observance by its employees,
consultants and contractors of the foregoing confidentiality obligations.
IN WITNESS WHEREOF, the parties have executed this Agreement, their
respective officers hereunto duly authorized, as of the day and year first above
written.
XENOTECH, INC. (as General LICENSEE
Partner of XENOTECH, L.P.)
By: By:
------------------ ---------------------
Name: Name:
---------------- -------------------
Title: Title:
--------------- ------------------
- ----------------------
* If CGI is Licensee.
** If JTI is Licensee.
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EXHIBIT B
Form of Exclusive Qualified Worldwide Product License
THIS PRODUCT LICENSE AGREEMENT (the "Agreement") effective the ____ day
of _________________, ______, is made by and between XENOTECH, L.P., a
California limited partnership ("XT"), and [CELL GENESYS, INC., a Delaware
corporation ("CGI")]* [JAPAN TOBACCO INC., a Japanese corporation ("JTI")]**
("Licensee").
RECITALS
XT desires to grant to Licensee and Licensee desires to acquire from XT
an exclusive license or sublicense, as the case may be, in the [CGI] [JTI]
Territory and the Rest of the World under the Licensed Technology to
commercialize Products, on the terms and conditions herein.
NOW, THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:
1. DEFINITIONS
For purposes of this Agreement, the terms set forth in this Article
shall have the meanings set forth below.
1.1 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with any one of CGI, JTI or XT. An entity shall be
regarded as in control of another entity if it owns or controls at least fifty
percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing authority); provided, however, XT
shall not be an Affiliate of CGI or JTI under this Agreement and XT shall not be
considered controlled by CGI or JTI for purposes of determining Affiliates of
CGI or JTI.
1.2 [ * ] "Technology" shall mean (i) all U.S. patent applications and
patents listed on Schedule 1 and patents issuing on such patent applications
owned by or licensed to XT which relate to the [ * ], in each case to the
extent XT has the right to license or sublicense the same; (ii) any
continuations, divisionals, reexaminations, reissues or extensions of any of
(i) above; (iii) any foreign counterparts issued or issuing on any of (i) or
(ii) above; and (iv) [ * ] as set forth in Schedule 1.
1.3 "CGI" shall mean Cell Genesys, Inc.
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the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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1.4 "CGI Territory" shall mean the United States of America and its
territories and possessions, Canada and Mexico.
1.5 "Effective Date" shall mean the date this Agreement is executed by
XT and Licensee.
1.6 "IND" shall mean an Investigational New Drug Exemption for a
Product, as defined in the U.S. Food, Drug and Cosmetic Act and the regulations
promulgated thereunder, or its non-U.S. equivalent.
1.7 "JTI" shall mean Japan Tobacco Inc.
1.8 "JTI Territory" shall mean Japan, Taiwan and South Korea (including
the territory comprising North Korea if it should be reunited with South Korea).
1.9 "License Fee" shall have the meaning set forth in Article 3 hereof.
1.10 "Licensed Field" shall mean [ * ].
1.11 "Licensed Technology" shall mean the [ * ] Technology and the
[ * ] Technology.
1.12 "Master Research License and Option Agreement" shall mean that
certain Master Research License and Option Agreement entered into by CGI, JTI
and XT as of June 28, 1996, as it may be amended.
1.13 "Net Sales" shall mean the [ * ] by Licensee or its Affiliates and
Sublicensees for sales of Product to non-Affiliate customers, [ * ], with
respect to such sales, and [ * ], as reflected in [ * ] of Licensee and its
Affiliates or Sublicensees, [ * ].
1.14 "Product" shall mean [ * ] including but not limited to [ * ].
Product as used herein shall not include a [ * ].
1.15 "Product Antigen" shall mean ________________.
1.16 "Rest of the World" shall mean all parts of the world not included
in the CGI Territory or the JTI Territory.
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1.17 "Sublicensee" shall mean a third party that is not an Affiliate to
whom Licensee has granted a sublicense under the Licensed Technology to make,
use and/or sell Product to the extent of the rights of Licensee therein.
"Sublicensee" shall also include a third party to whom Licensee has granted the
right to distribute Product under the Licensed Technology to the extent of the
rights of Licensee therein, provided that such third party is responsible for
the marketing and promotion of Product within the applicable country.
1.18 "Territory" shall mean those countries of the world in which
Licensee has license rights pursuant to this Agreement.
1.19 "Universal Receptor Product" shall mean a substance that is
developed utilizing [ * ] Universal Receptor Technology.
1.20 "Universal Receptor Technology" shall mean technology for
universal receptors [ * ]. As used herein: (i) "universal receptor" shall mean
a receptor [ * ]
1.21 "Valid Claim" shall mean a claim of a pending or issued and
unexpired patent included within the Licensed Technology, which has not been
held unenforceable, unpatentable or invalid by a court or other governmental
agency of competent jurisdiction,
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and which has not been admitted to be invalid or unenforceable through reissue,
disclaimer or otherwise.
1.22 "[ * ] Technology" shall mean (i) all U.S. patent
applications and patents listed on Schedule 2 and patents issuing on such
applications; (ii) any continuations, divisionals, reexaminations, reissues or
extensions of any of (i) above; (iii) any foreign counterparts issued or issuing
on any of (i) or (ii) above; and (iv) the Mice (as such term is defined in the
Master Research License and Option Agreement) and [ * ] as set forth on
Schedule 2.
2. LICENSE GRANT
Subject to the terms and conditions of this Agreement, XT hereby grants
to Licensee an exclusive license or sublicense, as the case may be, under the
Licensed Technology, to make and have made Product anywhere in the world for
use, sale, import or other distribution in the [CGI]* [JTI]** Territory and the
Rest of the World in the Licensed Field. Such license or sublicense shall be
exclusive even as to XT and shall include the exclusive right to grant and
authorize sublicenses for exploitation in the Territory (excluding any rights to
the Mice as defined in the Master Research License and Option Agreement).
3. LICENSE FEE
Licensee shall pay to XT within thirty days of the Effective Date a
license fee of [ * ]
4. ROYALTIES
4.1 Royalty Rates. In consideration for the license and rights granted
herein, Licensee agrees to pay to XT royalties of [ * ] of Net Sales of Product
by it and its Affiliates and Sublicensees.
4.2 Royalty Offsets. Licensee shall have the right to reduce the rate
at which any royalties due to XT are payable pursuant to Section 4.1 to offset
the [ * ]; provided, however, that the royalty rates paid by
Licensee pursuant to Section 4.1 shall not be reduced to less than [ * ] the
rate set forth in Section 4.1. [ * ]
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4.3 Single Royalty; Non-Royalty Sales. Only one royalty shall be
payable with respect to any Product, regardless of how many claims or patents
within the Licensed Technology cover such Product. In addition, no royalty shall
be payable under this Article 4 with respect to sales of Product among Licensee
and its Affiliates and/or Sublicensees or for use in research and/or development
or clinical trials.
4.4 No Patent Protection. Royalties shall be payable at the rates
specified in Section 4.1 or 4.2 above only with respect to sales of a Product
that would infringe a Valid Claim in the country in which such Product is sold.
In the event that such Product is not covered by a Valid Claim in such country,
XT shall be paid a royalty on such sales in accordance with this Article 4,
[ * ]
4.5 Combination Products. In the event that Product is sold in
combination as a single product with another product or component, Net Sales
from such combination sales for purposes of calculating the amounts due under
this Article 4 shall be [ * ] In the event that no such separate sales are made
in the same quarter by Licensee, Net Sales for royalty determination shall be
[ * ]
4.6 Termination of Royalties. Royalties under Section 4.1, 4.2, or 4.4
will be due until the later of (i) ten years from the first commercial sale of
Product in any country or (ii) on a country-by-country basis, the expiration of
the last-to-expire patent within the Licensed Technology covering the Product in
such country.
5. THIRD PARTY ROYALTIES
5.1 Royalties Payable by XT. XT will be responsible for the payment of
any royalties, license fees and milestone and/or other payments due to third
parties under licenses or similar agreements entered into by XT necessary to
allow the manufacture, use or sale of Product. Licensee shall reimburse XT for
any royalties paid by XT to third parties under licenses or similar agreements
covering Product necessary to allow the manufacture, use, sale, or other
exploitation of Product in accordance with this Agreement. Licensee shall
continue any such reimbursement payments to XT until XT's obligation to pay
royalties to a third party under any license covering Product expires or
terminates. XT agrees not to enter into any license or similar agreement after
the Effective Date which would obligate Licensee to make
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any payments under this Section 5.1 without the prior written consent of
Licensee.
5.2 Royalties Payable by Licensee. Licensee will be responsible for the
payment of any royalties, license fees and milestone and other payments due to
third parties under licenses or similar agreements entered into by Licensee to
allow the manufacture, use or sale of Product.
6. ACCOUNTING AND RECORDS
6.1 Royalty Reports and Payments. After the first commercial sale of
Product on which royalties are required, Licensee agrees to make quarterly
written reports to XT within eighty days after the end of each calendar quarter,
stating in each such report the number, description, and aggregate Net Sales of
Product sold during the calendar quarter upon which a royalty is payable under
Article 4 above. Concurrently with the making of such reports, Licensee shall
pay to XT royalties at the applicable rate specified in Section 4.1, 4.2 or 4.4
above and all royalties payable pursuant to Section 5.1 above, and any
adjustment to Net Sales for a prior period in accordance with the definition of
Net Sales in Section 1.13 hereof. All payments to XT hereunder shall be made in
U.S. Dollars to a bank account designated by XT.
6.2 Early Third Party License Payments. If XT is obligated to pay
royalties to a third party prior to ninety days after the end of the calendar
quarter, XT shall so notify Licensee and Licensee shall provide the reports and
payments set forth in Section 6.1 above not later than ten days before the date
such payments are due to the third party. Up to thirty-five days before such
payments are due, XT may provide Licensee with an invoice by facsimile setting
forth the royalties XT must pay third parties with respect to Licensee's
activities in the Territory in the preceding quarter, and Licensee shall pay
such invoices within thirty days of receipt of such invoice.
6.3 Records; Inspection. Licensee shall keep (and cause its Affiliates
and Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable to XT under
this Agreement. Such books and records shall be kept at the principal place of
business of Licensee or its Affiliates or Sublicensees as the case may be, for
at least three years following the end of the calendar quarter to which they
pertain. Such records of Licensee or its Affiliates will be open for inspection
during such three-year period by a representative of XT for the purpose of
verifying the royalty statements. Licensee shall require each of its
Sublicensees to maintain similar books and records and to open such records for
inspection during the same three-year period by a representative of Licensee
reasonably satisfactory to XT on behalf of, and as required by, XT for the
purpose of verifying the royalty statements. All such inspections may be
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made no more than once each calendar year, at reasonable times mutually agreed
by XT and Licensee. The XT representative will be obliged to execute a
reasonable confidentiality agreement prior to commencing any such inspection.
Inspections conducted under this Section 6.3 shall be at the expense of XT,
unless a variation or error producing an increase exceeding [ * ] of the amount
stated for the period covered by the inspection is established in the course of
any such inspection, whereupon all costs relating thereto will be paid by
Licensee. Upon the expiration of three years following the end of any fiscal
year, the calculation of royalties payable with respect to such year shall be
binding and conclusive, and Licensee shall be released from any liability or
accountability with respect to royalties for such year.
6.4 Currency Conversion. If any currency conversion shall be required
in connection with the calculation of royalties hereunder, such conversion shall
be made using the selling exchange rate for conversion of the foreign currency
into U.S. Dollars, quoted for current transactions reported in The Wall Street
Journal for the last business day of the calendar quarter to which such payment
pertains.
6.5 Late Payments. Any payments due from Licensee that are not paid on
the date such payments are due under this Agreement shall bear interest to the
extent permitted by applicable law at [ * ], calculated on the number of days
such payment is delinquent. This Section 6.5 shall in no way limit any other
remedies available to any party.
6.6 Withholding Taxes.
6.6.1 Unless immediately reimbursable under Section 6.6.2
below, all payments required to be made pursuant to Articles 3, 4 and 5 hereof
shall be without deduction or withholding for or on account of any taxes (other
than taxes imposed on or measured by net income) or similar governmental charge
imposed by a jurisdiction. Such taxes are referred to herein as "Withholding
Taxes" and such Withholding Taxes shall be the sole responsibility of the
withholding party. The withholding party shall provide a certificate evidencing
payment of any Withholding Taxes hereunder.
6.6.2 XT agrees to elect to claim a tax credit for Withholding
Taxes with respect to which it is entitled so to elect, and further agrees not
to amend such election for the full carry-forward period with respect to such
credit. At the time that XT realizes a reduction in U.S. tax liability by
actually utilizing the Withholding Taxes as a credit against regular U.S. tax
liability (determined on a "first-in-first-out" basis pro rata with other
available foreign tax credits), then the amount of such reduction attributable
to such credit shall immediately
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be reimbursed to the withholding party. For these purposes, a reduction in U.S.
tax liability shall include both a direct reduction in XT's own tax liability
and a reduction in the U.S. tax liability of any of its partners.
6.7 Tax Indemnity. Except as provided in Section 6.6, each party (the
"Tax Indemnitor") shall indemnify and hold harmless the other party hereto (each
a "Tax Indemnitee") from and against any tax or similar governmental charge
assessed solely because of this Agreement with respect to and directly
attributable to the income or the assets of the Tax Indemnitor. In the event
that any governmental agency shall make a claim against a party hereto which
could give rise to an indemnity hereunder, such potential Tax Indemnitee shall
give reasonably prompt notice to the potential Tax Indemnitor of the assertion
of such claim. If the transmission of such notice is unreasonably deferred and
has a material, adverse affect on the ability of the potential Tax Indemnitor to
challenge such claim, such potential Tax Indemnitor shall be released from
liability hereunder. The Tax Indemnitor alone shall (at its own expense) control
the defense or compromise of any such claim. The Tax Indemnitee shall execute
any documents required to enable Tax Indemnitor to defend such claim, provide
any information necessary therefor, and cooperate with Tax Indemnitor in such
defense.
6.8 XT Tax Indemnity. XT shall indemnify and hold harmless Licensee and
its Affiliates from and against any increase to its country of incorporation
income tax liability directly attributable to a positive adjustment to the
amount of gross receipts (an "Adjustment") reported or reportable by such party
from the income, including the royalty income, received from Licensee on Covered
Products. The amount payable hereunder shall be equal to the difference between
(a) the product of (i) the amount of the Adjustment, and (ii) the highest
combined marginal corporate tax rate in the country of incorporation in effect
for the taxable year for which such Adjustment is made, and (b) the reduction in
the party's foreign tax liability, which for purposes of this Agreement shall be
equal to the product of (i) the amount of any correlative adjustment to its
foreign taxable income, and (ii) the highest combined marginal foreign corporate
tax rate in effect for the taxable year for which the correlative adjustment is
made. No indemnification payment shall be required hereunder until comprehensive
efforts to obtain a correlative adjustment to Licensee's or its Affiliates', as
the case may be, taxable income in a foreign state (which may include, for
example invoking competent authority provisions under the U.S. Japanese Income
Tax Treaty (if applicable) or other applicable bilateral tax treaty) have, to
the extent reasonable to do so, been exhausted.
7. RESEARCH and DEVELOPMENT
7.1 Funding and Conduct. Licensee shall independently furnish and be
responsible for funding and conducting all of its
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preclinical and clinical research and development of Product, at its own
expense.
7.2 Biomaterials. In the case of Previously Selected Antigens as
defined in the Master Research License and Option Agreement, at the reasonable
request of Licensee, XT shall make available as part of the license granted
hereunder to Licensee [ * ] thus made available will be used only by Licensee
and its Affiliates and Sublicensees and manufacturing subcontractors.
8. SHARING OF CLINICAL DATA
As long as their development projects remain on similar timelines, or
as otherwise mutually agreed, Licensee will consider bilateral sharing of its
and its Sublicensees' relevant Product development information and clinical data
with [JTI]* [CGI]**. However, there shall not be, unless otherwise agreed by the
parties, any obligation for sharing data developed independently, by or on
behalf of either of them.
9. DUE DILIGENCE
9.1 [ * ]
9.1.1 Licensee agrees [ * ] as may be agreed upon by the
parties [ * ] the Effective Date.
9.1.2 Notwithstanding the foregoing, Licensee shall [ * ] in
the United States or Japan.
9.2 Failure to Meet Due Diligence Obligation.
9.2.1 If the diligence requirements set forth in Section 9.1
are not met by Licensee (or its Affiliates or Sublicensees) in the [United
States]* [Japan]**, Licensee's rights hereunder shall terminate upon written
notice by XT to Licensee and subject to Sections 9.3, 9.4 and 14.3 below.
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9.2.2. Notwithstanding Section 9.2.1, the license granted
hereunder to Licensee shall not terminate by reason of [ * ], to the extent that
prudent business judgment, based on circumstances outside of Licensee's
reasonable control, reasonably justifies such delay.
9.3 Dispute Resolution. In the event that a dispute arises whether the
diligence requirements in Article 9 have been met or circumstances exist which
Licensee believes justifies a failure on its part to meet such obligation, the
parties will attempt to resolve any dispute by mutual agreement during a period
of thirty days following Licensee's receipt of the notice under Section 9.2.1.
9.4 Arbitration. In the event that the parties are unable to resolve
such dispute pursuant to Section 9.3 above, such dispute shall be settled
between XT and Licensee by binding arbitration as set forth in Section 15.12. If
the arbitrator determines that the party acted in good faith, but failed to meet
its obligations under Section 9.1 above, the license granted to such party shall
not terminate unless the nonperforming party fails to cure such non-performance
within a reasonable period of time, as determined by the arbitrator.
10. PATENTS
10.1 [ * ] Technology.
(a) XT or its licensor, as they may agree, shall have
responsibility for preparing, filing, prosecuting and maintaining patents and
patent applications worldwide relating to the [ * ] Technology and conducting
any interferences, oppositions, re-examinations, or requesting reissues or
patent term extensions with respect to the [ * ] Technology. XT shall keep
Licensee reasonably informed as to the status of such patent matters in the
Territory, including without limitation, by providing Licensee the opportunity
to review and comment on any documents which will be filed in any patent office,
and providing Licensee copies of any documents received by XT from such patent
offices including notice of all interferences, reexaminations, oppositions or
requests for patent term extensions. Licensee shall cooperate with and assist XT
in connection with such activities, at XT's request and expense.
(b) In the event that Licensee becomes aware that any [ * ]
Technology necessary for the practice of the license granted herein is infringed
or misappropriated by a third party or is subject to a declaratory judgment
action arising from such infringement, Licensee shall promptly notify XT and XT
shall thereafter promptly notify the owner of such intellectual property. XT or
its licensor, as they may agree, shall have the exclusive right to enforce, or
defend any declaratory judgment action, at its expense, involving any [ * ]
Technology. In
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such event, XT shall keep Licensee reasonably informed of the progress of any
such claim, suit or proceeding in the Territory. Any recovery received by XT as
a result of any such claim, suit or proceeding shall be used first to reimburse
XT for all expenses (including attorneys, and professional fees) incurred in
connection with such claim, suit or proceeding, [ * ]
10.2 [ * ] Technology.
10.2.1 XT shall have the initial worldwide responsibility for
preparing, filing, prosecuting and maintaining patent applications and
conducting any interferences, oppositions, reexaminations, or requesting
reissues or patent term extensions with respect to [ * ] Technology. XT shall
give Licensee the opportunity to review the status of all such pending patent
applications and actions in the Territory and shall keep Licensee fully informed
of the progress of such applications and actions, including, without limitation,
by promptly providing Licensee with copies of all correspondence sent to and
received from patent offices, and providing notice of all interferences,
reexaminations, oppositions or requests for patent term extensions. [ * ]. In
the event that XT declines or fails to prepare, file, prosecute or maintain such
patent applications or patents or take such other actions, relating to the
Product in the Territory, it shall promptly and in no event later than ninety
days prior to any filing deadline, provide notice to Licensee. Licensee, shall
have the right to assume such responsibilities at its own expense, using counsel
of its choice.
10.2.2 In the event that Licensee becomes aware that any
[ * ] Technology is infringed or misappropriated by a third party in the
Territory, or is subject to a declaratory judgment action arising from such
infringement in such country, Licensee shall promptly notify XT and XT shall
thereafter promptly notify the owner of such intellectual property. Licensee
shall have the exclusive right to enforce, or defend any declaratory judgment
action, in the Territory, at its expense, involving any [ * ] Technology. In
such event, Licensee shall keep XT reasonably informed of the progress of any
such claim, suit or proceeding. Any recovery by Licensee received as a result of
any such claim, suit or proceeding shall be used first to reimburse Licensee for
all expenses (including attorneys, and professional fees) incurred in connection
with such claim, suit or proceeding, [ * ]
10.3 Infringement Claims. If the production, sale or use of Product
pursuant to this Agreement results in any claim, suit or proceeding alleging
patent infringement against Licensee (or its Affiliates or Sublicensees),
Licensee shall promptly notify XT
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thereof in writing setting forth the facts of such claim in reasonable
detail. [ * ], Licensee shall have the exclusive right to defend and control the
defense of any such claim, suit or proceeding, at its own expense, using counsel
of its choice. Licensee shall keep XT reasonably informed of all material
developments in connection with any such claim, suit or proceeding as it relates
to the Licensed Technology. Licensee shall have the right to deduct any damages
and expenses (including attorneys' and professional fees) against any amounts
due, or which may become due, to XT pursuant to this Agreement. Notwithstanding
the above, Licensee shall not be able to settle any such claim, suit or
proceeding that impinges upon the rights of [JTI]* [CGI]**, including, without
limitation, involving any admission of the invalidity of the Licensed Technology
or rights to Product Antigen outside the Territory without the prior approval of
XT.
10.4 Patent Marking. Licensee agrees to mark and have its Affiliates
and Sublicensees mark all Products sold pursuant to this Agreement in accordance
with the applicable statute or regulations in the country or countries of
manufacture and sale thereof.
11. CONFIDENTIALITY
11.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for five years
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose any information
furnished to it by another party hereto pursuant to this Agreement except to the
extent that it can be established by the receiving party by competent proof that
such information:
(a) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or
(d) was subsequently lawfully disclosed to the receiving party
by a person other than a party or developed by
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the receiving party without reference to any information or materials disclosed
by the disclosing party.
11.2 Permitted Disclosures. Notwithstanding Sections 11.1 above and
15.16 below, each party hereto may disclose the other party's information to the
extent such disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable
governmental regulations or otherwise submitting information to tax or other
governmental authorities, making a permitted sublicense or other exercise of its
rights hereunder or conducting clinical trials, provided that if a party is
required to make any such disclosure of the other party's secret or confidential
information, other than pursuant to a confidentiality agreement, it will give
reasonable advance notice to the latter party of such disclosure requirement
and, save to the extent inappropriate in the case of patent applications, will
use efforts consistent with prudent business judgment to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or otherwise). Notwithstanding the foregoing, XT shall not
disclose to third parties, clinical data or regulatory filings received from
Licensee except as agreed in writing by Licensee.
12. SUBLICENSES
Pursuant to Article 2 herein, Licensee will have the right to grant and
authorize sublicenses to third parties; provided, however, the Licensee shall
remain responsible for any payments due XT for Net Sales of Product by any
Sublicensee. [ * ] Any sublicense granted by Licensee pursuant to this Agreement
shall provide that the Sublicensee will be subject to the applicable terms of
this Agreement. Licensee shall provide XT with a copy of relevant portions of
each sublicense agreement, as reasonably required by XT.
13. REPRESENTATIONS and WARRANTIES
13.1 XT. XT represents and warrants that: (i) it has the full right and
authority to enter into this Agreement and grant the rights and licenses granted
herein; (ii) it has not previously granted and will not grant any rights
inconsistent or in conflict with the rights and licenses granted to Licensee
herein; (iii) there are no existing or threatened actions, suits or claims
pending against XT with respect to the Licensed Technology or the right of XT to
enter into and perform its obligations under this Agreement; (iv) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in and to the Licensed Technology, or any portion
thereof, with respect to the Product, or its manufacture or use; (v) Schedule 3
hereto sets forth all royalties, license fees, milestone payments and similar
payments
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due to third parties for which Licensee is obligated to reimburse XT under
Section 5.1 above as of the Effective Date; and (vi) the Licensed Technology is
all the technology owned by or licensed to XT as of the Effective Date.
13.2 Licensee. Licensee represents and warrants that: (i) it has the
full right and authority to enter into this Agreement, (ii) to its knowledge,
there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof (except for the pending or threatened
litigation with GenPharm International, Inc.) or the right of Licensee to enter
into and perform its obligations under this Agreement; and (iii) it has not
entered and during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
13.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, XT MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF LICENSED
TECHNOLOGY CLAIMS, ISSUED OR PENDING.
13.4 Effect of Representations and Warranties. It is understood that if
the representations and warranties under this Article 13 are not true and
accurate and a party incurs liabilities, costs or other expenses as a result of
such falsity, the party at fault shall indemnify, defend and hold the injured
party harmless from and against any such liabilities, costs or expenses
incurred, provided that the party at fault receives prompt notice of any claim
against the injured party resulting from or related to such falsity and the sole
right to control the defense or settlement thereof.
14. TERM AND TERMINATION
14.1 Effectiveness. This Agreement shall become effective as of the
Effective Date and the license rights granted by XT under Article 2 above shall
be in full force and effect as of such date.
14.2 Term. Unless earlier terminated pursuant to the other provisions
of this Article 14, this Agreement shall continue in full force and effect until
the later of (i) the expiration of the last to expire patent within the Licensed
Technology claiming Product or (ii) the twentieth anniversary of the Effective
Date. The licenses granted under Article 2 shall survive the expiration (but not
an earlier termination) of this Agreement; provided that such licenses shall in
such event become nonexclusive.
14.3 Termination for Breach. Either party to this Agreement may
terminate this Agreement in the event the other party shall have materially
breached or defaulted in the performance of any of its material obligations
hereunder, and such shall have
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continued for sixty days after written notice thereof was provided to the
breaching party by the nonbreaching party that terminates the Agreement as to
such party. Any termination shall become effective at the end of such sixty day
period unless the breaching party has cured any such breach or default prior to
the expiration of the sixty day period. However, if the party alleged to be in
breach of this Agreement disputes such breach within such sixty day period, the
non-breaching party shall not have the right to terminate this Agreement unless
it has been determined by an arbitration proceeding in accordance with Section
15.12 below that this Agreement was materially breached, and the breaching party
fails to cure such breach within thirty days following the final decision of the
arbitrators or such other time as directed by the arbitrators.
14.4 Other Termination Rights. Licensee may terminate this Agreement
and the license granted herein, in its entirety or as to any particular patent
within the Licensed Technology in a particular country, at any time, by
providing XT ninety-days written notice. In the event of termination as to a
particular country, the subject patent in such country shall cease to be within
the Licensed Technology for all purposes of this Agreement.
14.5 Effect of Termination.
14.5.1 Termination of this Agreement for any reason shall not
release either party hereto from any liability which at the time of such
termination has already accrued to the other party or which is attributable to a
period prior to such termination.
14.5.2 In the event this Agreement is terminated for any reason,
Licensee and its Affiliates and Sublicensees shall have the right to sell or
otherwise dispose of the stock of any Product subject to this Agreement then on
hand. Upon termination of this Agreement by XT for any reason, any sublicense
granted by Licensee hereunder shall survive, provided that upon request by XT,
such Sublicensee promptly agrees in writing to be bound by the applicable terms
of this Agreement.
14.5.3 This Agreement, including, without limitation, any licenses
or sublicenses granted pursuant to this Agreement, shall survive any
dissolution, liquidation or acquisition of XT. Such licenses shall remain in
full force and effect even after any distribution, following dissolution, of the
intellectual property owned or licensed to XT, to any entity. Any transfer of
such intellectual property prior to or following dissolution shall be subject to
the licenses granted herein.
14.5.4 This Agreement, including the license granted in Article 2
is independent of, and shall not be affected by, any breach or termination of
the Master Research License and Option Agreement or any other agreement between
the parties or their
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Affiliates. In the event of the termination of the Master Research License and
Option Agreement, the rights and obligations of the parties hereto under Article
12 thereof shall be deemed to be part of this Agreement.
14.5.5 Sections 6.3, 6.5, 6.6, 6.7 and 6.8 and Articles 11, 13, 14
and 15 shall survive the expiration and any termination of this Agreement for
any reason.
15. MISCELLANEOUS
15.1 Governing Laws. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, without regard to
conflicts of law principles.
15.2 Waiver. It is agreed that no waiver by any party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
15.3 Assignment. This Agreement and the license granted hereunder may
not be assigned by Licensee to any third party without the written consent of
XT, and XT may not assign this Agreement to a third party without the consent of
Licensee; except any party may assign this Agreement without such consent to (a)
an Affiliate (provided that such Affiliate is two-thirds or greater owned
directly or indirectly) or (b) an entity that acquires substantially all of the
assets of the monoclonal antibody business segment of the assigning party. The
terms and conditions of this Agreement shall be binding on and inure to the
benefit of the permitted successors and assigns of the parties.
15.4 Independent Contractors. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
15.5 Compliance with Laws. In exercising their rights under this
license, the parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this license.
15.6 No Implied Obligations. Except as expressly provided in Article 9
above, nothing in this Agreement shall be deemed to require Licensee to exploit
the Licensed Technology nor to prevent Licensee from commercializing products
similar to or competitive with any Product, in addition to or in lieu of such
Product.
15.7 Notices. Any notice required or permitted to be given to the
parties hereto shall be given in writing and shall be deemed to have been
properly given if delivered in person or when
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received if mailed by first class certified mail to the other party at the
appropriate address as set forth below or to such other addresses as may be
designated in writing by the parties from time to time during the term of this
Agreement.
XT: Xenotech, L.P.
322 Lakeside Drive
Foster City, California 94404
Attn: Chief Financial Officer
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranomon 2-chome
Minato-ku, Tokyo 105
Japan
Attn: Vice President,
Pharmaceutical Division
with a copy to: JT America Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Attn: President
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Attn: Neal N. Beaton, Esq.
Cell Genesys, Inc.: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: President
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attn: Julian N. Stern, Esq.
15.8 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of XT and Licensee are subject to prior compliance with
United States [and Japanese]** export regulations and such other United States
[and Japanese]** laws and regulations as may be applicable, and to obtaining all
necessary approvals required by the applicable agencies of the government of the
United States [and Japan]**. Licensee shall use efforts consistent with prudent
business judgment to obtain such approvals. XT shall cooperate with Licensee and
shall provide assistance to Licensee as reasonably necessary to obtain any
required approvals.
15.9 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision
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and the parties shall discuss in good faith appropriate revised arrangements.
15.10 Force Majeure. Nonperformance of any party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform,is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the nonperforming party.
15.11 No Consequential Damages. IN NO EVENT SHALL ANY PARTY HERETO BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF RIGHTS HEREUNDER.
15.12 Dispute Resolution; Arbitration. The parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between senior executives of the parties.
Any dispute under this Agreement which is not settled after such meeting, shall
be finally settled by binding arbitration, conducted in accordance with the
Rules of Arbitration of the International Chamber of Commerce by three
arbitrators appointed in accordance with said rules. The arbitration proceedings
and all pleadings and written evidence shall be in the English language. Any
written evidence originally in a language other than English shall be submitted
in English translation accompanied by the original or a true copy thereof. The
costs of the arbitration, including administrative and arbitrators' fees, shall
be shared equally by the parties. Each party shall bear its own costs and
attorneys' and witness' fees. The prevailing party in any arbitration, as
determined by the arbitration panel, shall be entitled to an award against the
other party in the amount of the prevailing party's costs and reasonable
attorneys, fees. The arbitration shall be held in [San Francisco, California]*
[Tokyo, Japan, if initiated by XT against Licensee and in San Francisco,
California, if initiated by Licensee against XT]**. A disputed performance or
suspended performances pending the resolution of the arbitration must be
completed within thirty days following the final decision of the arbitrators.
Any arbitration shall be completed within six months from the filing of notice
of a request for such arbitration.
15.13 Complete Agreement. It is understood and agreed between XT and
Licensee that this Agreement constitutes the entire agreement, both written and
oral, between the parties with respect to the subject matter hereof, and that
all prior agreements respecting the subject matter hereof, either written or
oral, expressed or implied, shall be abrogated, canceled, and are null and void
and of no effect. No amendment or change hereof or addition hereto shall be
effective or binding on either of the parties hereto unless reduced to writing
and executed by
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the respective duly authorized representatives of XT and Licensee.
15.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
15.15 Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for convenience
of reference only and shall not affect its meaning or interpretation.
15.16 Nondisclosure. Except as provided in Article 11, each of the
parties hereto agrees not to disclose to any third party the terms of this
Agreement without the prior written consent of each other party hereto, except
to advisors, investors and others on a need to know basis under circumstances
that reasonably ensure the confidentiality thereof, or to the extent required by
law. Without limitation upon any provision of this Agreement, each of the
parties hereto shall be responsible for the observance by its employees,
consultants and contractors of the foregoing confidentiality obligations.
IN WITNESS WHEREOF, the parties have executed this Agreement their
respective officers hereunto duly authorized, as of the day and year first above
written.
XENOTECH, INC. (as General LICENSEE
Partner of XENOTECH, L.P.)
By: By:
----------------------- ---------------------------
Name: Name:
--------------------- -------------------------
Title: Title:
-------------------- ------------------------
- ----------------------
* If CGI is Licensee.
** If JTI is Licensee.
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EXHIBIT C
Form of Exclusive Home Territory Product License
THIS PRODUCT LICENSE AGREEMENT (the "Agreement") effective the ____ day
of _________________, ______, is made by and between XENOTECH, L.P., a
California limited partnership ("XT"), and [CELL GENESYS, INC., a Delaware
corporation ("CGI")]* [JAPAN TOBACCO INC., a Japanese corporation ("JTI")]**
("Licensee").
RECITALS
XT desires to grant to Licensee and Licensee desires to acquire from XT
an exclusive license or sublicense, as the case may be, in the [CGI] [JTI]
Territory under the Licensed Technology to commercialize Products, on the terms
and conditions herein.
NOW, THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:
1. DEFINITIONS
For purposes of this Agreement, the terms set forth in this Article
shall have the meanings set forth below.
1.1 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with any one of CGI, JTI or XT. An entity shall be
regarded as in control of another entity if it owns or controls at least fifty
percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing authority); provided, however, XT
shall not be an Affiliate of CGI or JTI under this Agreement and XT shall not be
considered controlled by CGI or JTI for purposes of determining Affiliates of
CGI or JTI.
1.2 "[ * ] Technology" shall mean (i) all U.S. patent applications and
patents listed on Schedule 1 and patents issuing on such patent applications
owned by or licensed to XT which relate to the [ * ], in each case to the extent
XT has the right to license or sublicense the same; (ii) any continuations,
divisionals, reexaminations, reissues or extensions of any of (i) above; (iii)
any foreign counterparts issued or issuing on any of (i) or (ii) above; and (iv)
[ * ] as set forth in Schedule 1.
1.3 "CGI" shall mean Cell Genesys, Inc.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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1.4 "CGI Territory" shall mean the United States of America and its
territories and possessions, Canada and Mexico.
1.5 "Effective Date" shall mean the date this Agreement is executed by
XT and Licensee.
1.6 "IND" shall mean an Investigational New Drug Exemption for a
Product, as defined in the U.S. Food, Drug and Cosmetic Act and the regulations
promulgated thereunder, or its non-U.S. equivalent.
1.7 "JTI" shall mean Japan Tobacco Inc.
1.8 "JTI Territory" shall mean Japan, Taiwan and South Korea (including
the territory comprising North Korea if it should be reunited with South Korea).
1.9 "License Fee" shall have the meaning set forth in Article 3 hereof.
1.10 "Licensed Field" shall mean [ * ]
1.11 "Licensed Technology" shall mean the [ * ] Technology and the
[ * ] Technology.
1.12 "Master Research License and Option Agreement" shall mean that
certain Master Research License and Option Agreement entered into by CGI, JTI
and XT as of June 28, 1996, as it may be amended.
1.13 "Net Sales" shall mean the [ * ] by Licensee or its Affiliates and
Sublicensees for sales of Product to non-Affiliate customers, [ * ], with
respect to such sales, and [ * ], as reflected in [ * ] of Licensee and its
Affiliates or Sublicensees, [ * ]
1.14 "Product" shall mean [ * ] but not limited to [ * ]. Product as
used herein shall not include a [ * ]
1.15 "Product Antigen" shall mean.
1.16 "Sublicensee" shall mean a third party that is not an Affiliate to
whom Licensee has granted a sublicense under the
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Licensed Technology to make, use and/or sell Product to the extent of the rights
of Licensee therein. "Sublicensee" shall also include a third party to whom
Licensee has granted the right to distribute Product under the Licensed
Technology to the extent of the rights of Licensee therein, provided that such
third party is responsible for the marketing and promotion of Product within the
applicable country.
1.17 "Territory" shall mean those countries of the world in which
Licensee has license rights pursuant to this Agreement.
1.18 "Universal Receptor Product" shall mean a substance that is
developed utilizing [ * ] Universal Receptor Technology.
1.19 "Universal Receptor Technology" shall mean technology for
universal receptors [ * ]. As used herein: (i) "universal receptor" shall mean
a receptor [ * ]
1.20 "Valid Claim" shall mean a claim of a pending or issued and
unexpired patent included within the Licensed Technology, which has not been
held unenforceable, unpatentable or invalid by a court or other governmental
agency of competent jurisdiction, and which has not been admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise.
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the omitted portions.
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1.21 "[ * ] Technology" shall mean (i) all U.S. patent applications and
patents listed on Schedule 2 and patents issuing on such applications; (ii) any
continuations, divisionals, reexaminations, reissues or extensions of any of (i)
above; (iii) any foreign counterparts issued or issuing on any of (i) or (ii)
above; and (iv) the Mice (as such term is defined in the Master Research License
and Option Agreement) and [ * ] as set forth on Schedule 2.
2. LICENSE GRANT
Subject to the terms and conditions of this Agreement, XT hereby grants
to Licensee an exclusive license or sublicense, as the case may be, under the
Licensed Technology, to make and have made Product anywhere in the world for
use, sale, import or other distribution in the [CGI]* [JTI]** Territory in the
Licensed Field. Such license or sublicense shall be exclusive even as to XT and
shall include the exclusive right to grant and authorize sublicenses for
exploitation in the [CGI]* [JTI]** Territory (excluding any rights to the Mice
as defined in the Master Research License and Option Agreement).
3. LICENSE FEE
Licensee shall pay to XT within thirty days of the Effective Date a
license fee of [ * ].
4. ROYALTIES
4.1 Royalty Rates. In consideration for the license and rights granted
herein, Licensee agrees to pay to XT royalties of [ * ] of Net Sales of Product
by it and its Affiliates and Sublicensees.
4.2 Royalty Offsets. Licensee shall have the right to reduce the rate
at which any royalties due to XT are payable pursuant to Section 4.1 to offset [
* ]; provided, however, that the royalty rates paid by Licensee pursuant to
Section 4.1 shall not be reduced to less than [ * ] the rate set forth in
Section 4.1. [ * ].
4.3 Single Royalty; Non-Royalty Sales. Only one royalty shall be
payable with respect to any Product, regardless of how
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many claims or patents within the Licensed Technology cover such Product. In
addition, no royalty shall be payable under this Article 4 with respect to sales
of Product among Licensee and its Affiliates and/or Sublicensees or for use in
research and/or development or clinical trials.
4.4 No Patent Protection. Royalties shall be payable at the rates
specified in Section 4.1 or 4.2 above only with respect to sales of a Product
that would infringe a Valid Claim in the country in which such Product is sold.
In the event that such Product is not covered by a Valid Claim in such country,
XT shall be paid a royalty on such sales in accordance with this Article 4,
[ * ]
4.5 Combination Products. In the event that Product is sold in
combination as a single product with another product or component, Net Sales
from such combination sales for purposes of calculating the amounts due under
this Article 4 shall be [ * ]. In the event that no such separate sales are
made in the same quarter by Licensee, Net Sales for royalty determination shall
be [ * ]
4.6 Termination of Royalties. Royalties under Section 4.1, 4.2 or 4.4
will be due until the later of (i) ten years from the first commercial sale of
Product in any country or (ii) on a country-by-country basis, the expiration of
the last-to-expire patent within the Licensed Technology covering the Product in
such country.
5. THIRD PARTY ROYALTIES
5.1 Royalties Payable by XT. XT will be responsible for the payment of
any royalties, license fees and milestone and/or other payments due to third
parties under licenses or similar agreements entered into by XT necessary to
allow the manufacture, use or sale of Product. Licensee shall reimburse XT for
any royalties paid by XT to third parties under licenses or similar agreements
covering Product necessary to allow the manufacture, use, sale or other
exploitation of Product in accordance with this Agreement. Licensee shall
continue any such reimbursement payments to XT until XT's obligation to pay
royalties to a third party under any license covering Product expires or
terminates. XT agrees not to enter into any license or similar agreement after
the Effective Date which would obligate Licensee to make any payments under this
Section 5.1 without the prior written consent of Licensee.
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5.2 Royalties Payable by Licensee. Licensee will be responsible for the
payment of any royalties, license fees and milestone and other payments due to
third parties under licenses or similar agreements entered into by Licensee to
allow the manufacture, use or sale of Product.
6. ACCOUNTING AND RECORDS
6.1 Royalty Reports and Payments. After the first commercial sale of
Product on which royalties are required, Licensee agrees to make quarterly
written reports to XT within eighty days after the end of each calendar quarter,
stating in each such report the number, description, and aggregate Net Sales of
Product sold during the calendar quarter upon which a royalty is payable under
Article 4 above. Concurrently with the making of such reports, Licensee shall
pay to XT royalties at the applicable rate specified in Section 4.1, 4.2 or 4.4
above and all royalties payable pursuant to Section 5.1 above, and any
adjustment to Net Sales for a prior period in accordance with the definition of
Net Sales in Section 1.13 hereof. All payments to XT hereunder shall be made in
U.S. Dollars to a bank account designated by XT.
6.2 Early Third Party License Payments. If XT is obligated to pay
royalties to a third party prior to ninety days after the end of the calendar
quarter, XT shall so notify Licensee and Licensee shall provide the reports and
payments set forth in Section 6.1 above not later than ten days before the date
such payments are due to the third party. Up to thirty-five days before such
payments are due, XT may provide Licensee with an invoice by facsimile setting
forth the royalties XT must pay third parties with respect to Licensee's
activities in the Territory in the preceding quarter, and Licensee shall pay
such invoices within thirty days of receipt of such invoice.
6.3 Records; Inspection. Licensee shall keep (and cause its Affiliates
and Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable to XT under
this Agreement. Such books and records shall be kept at the principal place of
business of Licensee or its Affiliates or Sublicensees, as the case may be, for
at least three years following the end of the calendar quarter to which they
pertain. Such records of Licensee or its Affiliates will be open for inspection
during such three-year period by a representative of XT for the purpose of
verifying the royalty statements. Licensee shall require each of its
Sublicensees to maintain similar books and records and to open such records for
inspection during the same three-year period by a representative of Licensee
reasonably satisfactory to XT on behalf of, and as required by, XT for the
purpose of verifying the royalty statements. All such inspections may be made no
more than once each calendar year, at reasonable times mutually agreed by XT and
Licensee. The XT representative will be obliged to execute a reasonable
confidentiality agreement
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prior to commencing any such inspection. Inspections conducted under this
Section 6.3 shall be at the expense of XT, unless a variation or error producing
an increase exceeding [ * ] of the amount stated for the period covered by
the inspection is established in the course of any such inspection, whereupon
all costs relating thereto will be paid by Licensee. Upon the expiration of
three years following the end of any fiscal year, the calculation of royalties
payable with respect to such year shall be binding and conclusive, and Licensee
shall be released from any liability or accountability with respect to royalties
for such year.
6.4 Currency Conversion. If any currency conversion shall be required
in connection with the calculation of royalties hereunder, such conversion shall
be made using the selling exchange rate for conversion of the foreign currency
into U.S. Dollars, quoted for current transactions reported in The Wall Street
Journal for the last business day of the calendar quarter to which such payment
pertains.
6.5 Late Payments. Any payments due from Licensee that are not paid on
the date such payments are due under this Agreement shall bear interest to the
extent permitted by applicable law at [ * ], calculated on the number of days
such payment is delinquent. This Section 6.5 shall in no way limit any other
remedies available to any party.
6.6 Withholding Taxes.
6.6.1 Unless immediately reimbursable under Section 6.6.2 below,
all payments required to be made pursuant to Articles 3, 4 and 5 hereof shall be
without deduction or withholding for or on account of any taxes (other than
taxes imposed on or measured by net income) or similar governmental charge
imposed by a jurisdiction. Such taxes are referred to herein as "Withholding
Taxes" and such Withholding Taxes shall be the sole responsibility of the
withholding party. The withholding party shall provide a certificate evidencing
payment of any Withholding Taxes hereunder.
6.6.2 XT agrees to elect to claim a tax credit for Withholding
Taxes with respect to which it is entitled so to elect, and further agrees not
to amend such election for the full carry-forward period with respect to such
credit. At the time that XT realizes a reduction in U.S. tax liability by
actually utilizing the Withholding Taxes as a credit against regular U.S. tax
liability (determined on a "first-in-first-out" basis pro rata with other
available foreign tax credits), then the amount of such reduction attributable
to such credit shall immediately be reimbursed to the withholding party. For
these purposes, a reduction in U.S. tax liability shall include both a direct
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reduction in XT's own tax liability and a reduction in the U.S.
tax liability of any of its partners.
6.7 Tax Indemnity. Except as provided in Section 6.6, each party (the
"Tax Indemnitor") shall indemnify and hold harmless the other party hereto (each
a "Tax Indemnitee") from and against any tax or similar governmental charge
assessed solely because of this Agreement with respect to and directly
attributable to the income or the assets of the Tax Indemnitor. In the event
that any governmental agency shall make a claim against a party hereto which
could give rise to an indemnity hereunder, such potential Tax Indemnitee shall
give reasonably prompt notice to the potential Tax Indemnitor of the assertion
of such claim. If the transmission of such notice is unreasonably deferred and
has a material, adverse affect on the ability of the potential Tax Indemnitor to
challenge such claim, such potential Tax Indemnitor shall be released from
liability hereunder. The Tax Indemnitor alone shall (at its own expense) control
the defense or compromise of any such claim. The Tax Indemnitee shall execute
any documents required to enable Tax Indemnitor to defend such claim, provide
any information necessary therefor, and cooperate with Tax Indemnitor in such
defense.
6.8 XT Tax Indemnity. XT shall indemnify and hold harmless Licensee and
its Affiliates from and against any increase to its country of incorporation
income tax liability directly attributable to a positive adjustment to the
amount of gross receipts (an "Adjustment") reported or reportable by such party
from the income, including the royalty income, received from Licensee on Covered
Products. The amount payable hereunder shall be equal to the difference between
(a) the product of (i) the amount of the Adjustment, and (ii) the highest
combined marginal corporate tax rate in the country of incorporation in effect
for the taxable year for which such Adjustment is made, and (b) the reduction in
the party's foreign tax liability, which for purposes of this Agreement shall be
equal to the product of (i) the amount of any correlative adjustment to its
foreign taxable income, and (ii) the highest combined marginal foreign corporate
tax rate in effect for the taxable year for which the correlative adjustment is
made. No indemnification payment shall be required hereunder until comprehensive
efforts to obtain a correlative adjustment to Licensee's or its Affiliates', as
the case may be, taxable income in a foreign state (which may include, for
example invoking competent authority provisions under the U.S. Japanese Income
Tax Treaty (if applicable) or other applicable bilateral tax treaty) have, to
the extent reasonable to do so, been exhausted.
7. RESEARCH and DEVELOPMENT
7.1 Funding and Conduct. Licensee shall independently furnish and be
responsible for funding and conducting all of its preclinical and clinical
research and development of Product, at its own expense.
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7.2 Biomaterials. In the case of Previously Selected Antigens as
defined in the Master Research License and Option Agreement, at the reasonable
request of Licensee, XT shall make available as part of the license granted
hereunder to Licensee [ * ] thus made available will be used only by Licensee
and its Affiliates and Sublicensees and manufacturing subcontractors.
8. SHARING OF CLINICAL DATA
As long as their development projects remain on similar timelines, or
as otherwise mutually agreed, Licensee will consider bilateral sharing of its
and its Sublicensees' relevant Product development information and clinical data
with [JTI]* [CGI]**. However, there shall not be, unless otherwise agreed by the
parties, any obligation for sharing data developed independently, by or on
behalf of either of them.
9. DUE DILIGENCE
9.1 [ * ]
9.1.1 Licensee agrees to [ * ] as may be agreed upon by the parties
[ * ] the Effective Date.
9.1.2 Notwithstanding the foregoing, Licensee shall be [ * ] in
the United States or Japan.
9.2 Failure to Meet Due Diligence Obligation.
9.2.1 If the diligence requirements set forth in Section 9.1 are
not met by Licensee (or its Affiliates or Sublicensees) in the [United States]*
[Japan]**, Licensee's rights hereunder shall terminate upon written notice by XT
to Licensee and subject to Sections 9.3, 9.4 and 14.3 below.
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9.2.2. Notwithstanding Section 9.2.1, the license granted
hereunder to Licensee shall not terminate by reason of [ * ], to the extent that
prudent business judgment, based on circumstances outside of Licensee's
reasonable control, reasonably justifies such delay.
9.3 Dispute Resolution. In the event that a dispute arises whether the
diligence requirements in Article 9 have been met or circumstances exist which
Licensee believes justifies a failure on its part to meet such obligation, the
parties will attempt to resolve any dispute by mutual agreement during a period
of thirty days following Licensee's receipt of the notice under Section 9.2.1.
9.4 Arbitration. In the event that the parties are unable to resolve
such dispute pursuant to Section 9.3 above, such dispute shall be settled
between XT and Licensee by binding arbitration as set forth in Section 15.12. If
the arbitrator determines that the party acted in good faith, but failed to meet
its obligations under Section 9.1 above, the license granted to such party shall
not terminate unless the nonperforming party fails to cure such non-performance
within a reasonable period of time, as determined by the arbitrator.
10. PATENTS
10.1 [ * ] Technology.
(a) XT or its licensor, as they may agree, shall have
responsibility for preparing, filing, prosecuting and maintaining patents and
patent applications worldwide relating to the [ * ] Technology and conducting
any interferences, oppositions, re-examinations, or requesting reissues or
patent term extensions with respect to the [ * ] Technology. XT shall keep
Licensee reasonably informed as to the status of such patent matters in the
Territory, including without limitation, by providing Licensee the opportunity
to review and comment on any documents which will be filed in any patent office,
and providing Licensee copies of any documents received by XT from such patent
offices including notice of all interferences, reexaminations, oppositions or
requests for patent term extensions. Licensee shall cooperate with and assist XT
in connection with such activities, at XT's request and expense.
(b) In the event that License becomes aware that any [ * ]
Technology necessary for the practice of the license granted herein is infringed
or misappropriated by a third party or is subject to a declaratory judgment
action arising from such infringement, Licensee shall promptly notify XT and XT
shall thereafter promptly notify the owner of such intellectual property. XT or
its licensor, as they may agree, shall have the exclusive right to enforce, or
defend any declaratory judgment action, at its expense, involving any [ * ]
Technology. In
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such event, XT shall keep Licensee reasonably informed of the progress of any
such claim, suit or proceeding in the Territory. Any recovery received by XT as
a result of any such claim, suit or proceeding shall be used first to reimburse
XT for all expenses (including attorneys, and professional fees) incurred in
connection with such claim, suit or proceeding, [ * ]
10.2 [ * ] Technology.
10.2.1 XT shall have the initial worldwide responsibility for
preparing, filing, prosecuting and maintaining patent applications and
conducting any interferences, oppositions, reexaminations, or requesting
reissues or patent term extensions with respect to [ * ] Technology. XT shall
give Licensee the opportunity to review the status of all such pending patent
applications and actions in the Territory and shall keep Licensee fully informed
of the progress of such applications and actions, including, without limitation,
by promptly providing Licensee with copies of all correspondence sent to and
received from patent offices, and providing notice of all interferences,
reexaminations, oppositions or requests for patent term extensions. [ * ] In the
event that XT declines or fails to prepare, file, prosecute or maintain such
patent applications or patents or take such other actions, relating to the
Product in the Territory, it shall promptly and in no event later than ninety
days prior to any filing deadline, provide notice to Licensee. Licensee, shall
have the right to assume such responsibilities at its own expense, using counsel
of its choice.
10.2.2 In the event that Licensee becomes aware that any [ * ]
Technology is infringed or misappropriated by a third party in the Territory, or
is subject to a declaratory judgment action arising from such infringement in
such country, Licensee shall promptly notify XT and XT shall thereafter promptly
notify the owner of such intellectual property. Licensee shall have the
exclusive right to enforce, or defend any declaratory judgment action, in the
Territory, at its expense, involving any [ * ] Technology. In such event
Licensee shall keep XT reasonably informed of the progress of any such claim,
suit or proceeding. Any recovery by Licensee received as a result of any such
claim, suit or proceeding shall be used first to reimburse Licensee for all
expenses (including attorneys, and professional fees) incurred in connection
with such claim, suit or proceeding, [ * ]
10.3 Infringement Claims. If the production, sale or use of
Product pursuant to this Agreement results in any claim, suit or proceeding
alleging patent infringement against Licensee (or its Affiliates or
Sublicensees), Licensee shall promptly notify XT
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thereof in writing setting forth the facts of such claim in reasonable detail. [
* ] Licensee shall have the exclusive right to defend and control the defense of
any such claim, suit or proceeding, at its own expense, using counsel of its
choice. Licensee shall keep XT reasonably informed of all material developments
in connection with any such claim, suit or proceeding as it relates to the
Licensed Technology. Licensee shall have the right to deduct any damages and
expenses (including attorneys' and professional fees) against any amounts due,
or which may become due, to XT pursuant to this Agreement. Notwithstanding the
above, Licensee shall not be able to settle any such claim, suit or proceeding
that impinges upon the rights of [JTI]* [CGI]**, including, without limitation,
involving any admission of the invalidity of the Licensed Technology or rights
to Product Antigen outside the Territory without the prior approval of XT.
10.4 Patent Marking. Licensee agrees to mark and have its Affiliates
and Sublicensees mark all Products sold pursuant to this Agreement in accordance
with the applicable statute or regulations in the country or countries of
manufacture and sale thereof.
11. CONFIDENTIALITY
11.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for five years
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose any information
furnished to it by another party hereto pursuant to this Agreement except to the
extent that it can be established by the receiving party by competent proof that
such information:
(a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or
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(d) was subsequently lawfully disclosed to the receiving party by
a person other than a party or developed by the receiving party without
reference to any information or materials disclosed by the disclosing party.
11.2 Permitted Disclosures. Notwithstanding Sections 11.1 above and
15.16 below, each party hereto may disclose the other party's information to the
extent such disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable
governmental regulations or otherwise submitting information to tax or other
governmental authorities, making a permitted sublicense or other exercise of its
rights hereunder or conducting clinical trials, provided that if a party is
required to make any such disclosure of the other party's secret or confidential
information, other than pursuant to a confidentiality agreement, it will give
reasonable advance notice to the latter party of such disclosure requirement
and, save to the extent inappropriate in the case of patent applications, will
use efforts consistent with prudent business judgment to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or otherwise). Notwithstanding the foregoing, XT shall not
disclose to third parties, clinical data or regulatory filings received from
Licensee except as agreed in writing by Licensee.
12. SUBLICENSES
Pursuant to Article 2 herein, Licensee will have the right to grant and
authorize sublicenses to third parties; provided, however, the Licensee shall
remain responsible for any payments due XT for Net Sales of Product by any
Sublicensee. [ * ]. Any sublicense granted by Licensee pursuant to this
Agreement shall provide that the Sublicensee will be subject to the applicable
terms of this Agreement. Licensee shall provide XT with a copy of relevant
portions of each sublicense agreement, as reasonably required by XT.
13. REPRESENTATIONS and WARRANTIES
13.1 XT. XT represents and warrants that:
(i) it has the full right and authority to enter into this
Agreement and grant the rights and licenses granted herein;
(ii) it has not previously granted and will not grant any rights
inconsistent or in conflict with the rights and licenses granted to Licensee
herein;
(iii) there are no existing or threatened actions, suits or claims
pending against XT with respect to the Licensed
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Technology or the right of XT to enter into and perform its obligations under
this Agreement;
(iv) it has not previously granted, and will not grant during
the term of this Agreement, any right, license or interest in and to the
Licensed Technology, or any portion thereof, with respect to the Product, or its
manufacture or use;
(v) Schedule 3 hereto sets forth all royalties, license fees,
milestone payments and similar payments due to third parties for which Licensee
is obligated to reimburse XT under Section 5.1 above as of the Effective Date;
and
(vi) the Licensed Technology is all the technology owned by or
licensed to XT as of the Effective Date.
13.2 Licensee. Licensee represents and warrants that: (i) it has the
full right and authority to enter into this Agreement, (ii) to its knowledge,
there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof (except for the pending or threatened
litigation with GenPharm International, Inc.) or the right of Licensee to enter
into and perform its obligations under this Agreement; and (iii) it has not
entered and during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
13.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, XT MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF LICENSED
TECHNOLOGY CLAIMS, ISSUED OR PENDING.
13.4 Effect of Representations and Warranties. It is understood that if
the representations and warranties under this Article 13 are not true and
accurate and a party incurs liabilities, costs or other expenses as a result of
such falsity, the party at fault shall indemnify, defend and hold the injured
party harmless from and against any such liabilities, costs or expenses
incurred, provided that the party at fault receives prompt notice of any claim
against the injured party resulting from or related to such falsity and the sole
right to control the defense or settlement thereof.
14. TERM AND TERMINATION
14.1 Effectiveness. This Agreement shall become effective as of the
Effective Date and the license rights granted by XT under Article 2 above shall
be in full force and effect as of such date.
14.2 Term. Unless earlier terminated pursuant to the other provisions
of this Article 14, this Agreement shall continue in
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full force and effect until the later of (i) the expiration of the last to
expire patent within the Licensed Technology claiming Product or (ii) the
twentieth anniversary of the Effective Date. The licenses granted under Article
2 shall survive the expiration (but not an earlier termination) of this
Agreement; provided that such licenses shall in such event become nonexclusive.
14.3 Termination for Breach. Either party to this Agreement may
terminate this Agreement in the event the other party shall have materially
breached or defaulted in the performance of any of its material obligations
hereunder, and such shall have continued for sixty days after written notice
thereof was provided to the breaching party by the nonbreaching party that
terminates the Agreement as to such party. Any termination shall become
effective at the end of such sixty day period unless the breaching party has
cured any such breach or default prior to the expiration of the sixty day
period. However, if the party alleged to be in breach of this Agreement disputes
such breach within such sixty day period, the non-breaching party shall not have
the right to terminate this Agreement unless it has been determined by an
arbitration proceeding in accordance with Section 15.12 below that this
Agreement was materially breached, and the breaching party fails to cure such
breach within thirty days following the final decision of the arbitrators or
such other time as directed by the arbitrators.
14.4 Other Termination Rights. Licensee may terminate this Agreement
and the license granted herein, in its entirety or as to any particular patent
within the Licensed Technology in a particular country, at any time, by
providing XT ninety-days written notice. In the event of termination as to a
particular country, the subject patent in such country shall cease to be within
the Licensed Technology for all purposes of this Agreement.
14.5 Effect of Termination.
14.5.1 Termination of this Agreement for any reason shall not
release either party hereto from any liability which at the time of such
termination has already accrued to the other party or which is attributable to a
period prior to such termination.
14.5.2 In the event this Agreement is terminated for any reason,
Licensee and its Affiliates and Sublicensees shall have the right to sell or
otherwise dispose of the stock of any Product subject to this Agreement then on
hand. Upon termination of this Agreement by XT for any reason, any sublicense
granted by Licensee hereunder shall survive, provided that upon request by XT,
such Sublicensee promptly agrees in writing to be bound by the applicable terms
of this Agreement.
14.5.3 This Agreement, including, without limitation, any licenses
or sublicenses granted pursuant to this Agreement,
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shall survive any dissolution, liquidation or acquisition of XT. Such licenses
shall remain in full force and effect even after any distribution, following
dissolution, of the intellectual property owned or licensed to XT, to any
entity. Any transfer of such intellectual property prior to or following
dissolution shall be subject to the licenses granted herein.
14.5.4 This Agreement, including the license granted in
Article 2 is independent of, and shall not be affected by, any breach or
termination of the Master Research License and Option Agreement or any other
agreement between the parties or their Affiliates. In the event of the
termination of the Master Research License and Option Agreement, the rights and
obligations of the parties hereto under Article 12 thereof shall be deemed to be
part of this Agreement.
14.5.5 Sections 6.3, 6.5, 6.6, 6.7 and 6.8 and Articles 11,
13, 14 and 15 shall survive the expiration and any termination of this Agreement
for any reason.
15. MISCELLANEOUS
15.1 Governing Laws. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, without regard to
conflicts of law principles.
15.2 Waiver. It is agreed that no waiver by any party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
15.3 Assignment. This Agreement and the license granted hereunder may
not be assigned by Licensee to any third party without the written consent of
XT, and XT may not assign this Agreement to a third party without the consent of
Licensee; except any party may assign this Agreement without such consent to (a)
an Affiliate (provided that such Affiliate is two-thirds or greater owned
directly or indirectly) or (b) an entity that acquires substantially all of the
assets of the monoclonal antibody business segment of the assigning party. The
terms and conditions of this Agreement shall be binding on and inure to the
benefit of the permitted successors and assigns of the parties.
15.4 Independent Contractors. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
15.5 Compliance with Laws. In exercising their rights under this
license, the parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this license.
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15.6 No Implied Obligations. Except as expressly provided in Article 9
above, nothing in this Agreement shall be deemed to require Licensee to exploit
the Licensed Technology nor to prevent Licensee from commercializing products
similar to or competitive with any Product, in addition to or in lieu of such
Product.
15.7 Notices. Any notice required or permitted to be given to the
parties hereto shall be given in writing and shall be deemed to have been
properly given if delivered in person or when received if mailed by first class
certified mail to the other party at the appropriate address as set forth below
or to such other addresses as may be designated in writing by the parties from
time to time during the term of this Agreement.
XT: Xenotech, L.P.
322 Lakeside Drive
Foster City, California 94404
Attn: Chief Financial Officer
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranomon 2-chome
Minato-ku, Tokyo 105
Japan
Attn: Vice President,
Pharmaceutical Division
with a copy to: JT America Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Attn: President
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Attn: Neal N. Beaton, Esq.
Cell Genesys, Inc.: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: President
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attn: Julian N. Stern, Esq.
15.8 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of XT and Licensee are subject to prior compliance with
United States [and Japanese]** export regulations and such other United States
[and Japanese]** laws and regulations as may be applicable, and to obtaining all
necessary approvals required by the applicable agencies of the
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government of the United States [and Japan]**. Licensee shall use efforts
consistent with prudent business judgment to obtain such approvals. XT shall
cooperate with Licensee and shall provide assistance to Licensee as reasonably
necessary to obtain any required approvals.
15.9 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties shall discuss in good faith appropriate
revised arrangements.
15.10 Force Majeure. Nonperformance of any party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform,is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the nonperforming party.
15.11 No Consequential Damages. IN NO EVENT SHALL ANY PARTY HERETO BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF RIGHTS HEREUNDER.
15.12 Dispute Resolution; Arbitration. The parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between senior executives of the parties.
Any dispute under this Agreement which is not settled after such meeting, shall
be finally settled by binding arbitration, conducted in accordance with the
Rules of Arbitration of the International Chamber of Commerce by three
arbitrators appointed in accordance with said rules. The arbitration proceedings
and all pleadings and written evidence shall be in the English language. Any
written evidence originally in a language other than English shall be submitted
in English translation accompanied by the original or a true copy thereof. The
costs of the arbitration, including administrative and arbitrators' fees, shall
be shared equally by the parties. Each party shall bear its own costs and
attorneys' and witness' fees. The prevailing party in any arbitration, as
determined by the arbitration panel, shall be entitled to an award against the
other party in the amount of the prevailing party's costs and reasonable
attorneys, fees. The arbitration shall be held in [San Francisco, California]*
[Tokyo, Japan, if initiated by XT against Licensee and in San Francisco,
California, if initiated by Licensee against XT]**. A disputed performance or
suspended performances pending the resolution of the arbitration must be
completed within thirty days following the final decision of the arbitrators.
Any arbitration shall be completed within six months from the filing of notice
of a request for such arbitration.
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15.13 Complete Agreement. It is understood and agreed between XT and
Licensee that this Agreement constitutes the entire agreement, both written and
oral, between the parties with respect to the subject matter hereof, and that
all prior agreements respecting the subject matter hereof, either written or
oral, expressed or implied, shall be abrogated, canceled, and are null and void
and of no effect. No amendment or change hereof or addition hereto shall be
effective or binding on either of the parties hereto unless reduced to writing
and executed by the respective duly authorized representatives of XT and
Licensee.
15.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
15.15 Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for convenience
of reference only and shall not affect its meaning or interpretation.
15.16 Nondisclosure. Except as provided in Article 11, each of the
parties hereto agrees not to disclose to any third party the terms of this
Agreement without the prior written consent of each other party hereto, except
to advisors, investors and others on a need to know basis under circumstances
that reasonably ensure the confidentiality thereof, or to the extent required by
law. Without limitation upon any provision of this Agreement, each of the
parties hereto shall be responsible for the observance by its employees,
consultants and contractors of the foregoing confidentiality obligations.
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IN WITNESS WHEREOF, the parties have executed this Agreement their
respective officers hereunto duly authorized, as of the day and year first above
written.
XENOTECH, INC. (as General LICENSEE
Partner of XENOTECH, L.P.)
By: By:
--------------------- -------------------------
Name: Name:
------------------- -----------------------
Title: Title:
------------------ ----------------------
- ----------------------
* If CGI is Licensee.
** If JTI is Licensee.
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EXHIBIT D
Form of Co-Exclusive Worldwide Product License
THIS PRODUCT LICENSE AGREEMENT (the "Agreement") effective the ____ day
of _________________, ____, is made by and between XENOTECH, L.P., a California
limited partnership ("XT"), and each of CELL GENESYS, INC., a Delaware
corporation ("CGI") and JAPAN TOBACCO INC., a Japanese corporation ("JTI").
RECITALS
A. XT desires to grant JTI an exclusive license in the JTI Territory
under the Licensed Technology to commercialize Products, and JTI wishes to
acquire such a license, on the terms and conditions herein.
B. XT desires to grant CGI an exclusive license in the CGI Territory
under the Licensed Technology to commercialize Products, and CGI wishes to
acquire such a license, on the terms and conditions herein.
C. XT desires to grant to JTI and CGI a co-exclusive license in the
Rest of the World under the Licensed Technology to commercialize Products, and
JTI and CGI wish to acquire such a license.
NOW, THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:
1. DEFINITIONS
For purposes of this Agreement, the terms set forth in this Article
shall have the meanings set forth below.
1.1 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with any one of CGI, JTI or XT. An entity shall be
regarded as in control of another entity if it owns or controls at least fifty
percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing authority); provided, however, XT
shall not be an Affiliate of CGI or JTI under this Agreement and XT shall not be
considered controlled by CGI or JTI for purposes of determining Affiliates of
CGI or JTI.
1.2 "[ * ] Technology" shall mean (i) all U.S. patent applications
and patents listed on Schedule 1 and patents issuing on such patent applications
owned by or licensed to XT which
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relate to the [ * ], in each case to the extent XT has the right to
license or sublicense the same; (ii) any continuations, divisionals,
reexaminations, reissues or extensions of any of (i) above; (iii) any foreign
counterparts issued or issuing on any of (i) or (ii) above; and (iv) [ * ]
as set forth in Schedule 1.
1.3 "CGI" shall mean Cell Genesys, Inc.
1.4 "CGI Territory" shall mean the United States of America and its
territories and possessions, Canada and Mexico.
1.5 "Effective Date" shall mean the date this Agreement is executed by
XT, CGI and JTI.
1.6 "IND" shall mean an Investigational New Drug Exemption for a
Product, as defined in the U.S. Food, Drug and Cosmetic Act and the regulations
promulgated thereunder, or its non-U.S. equivalent.
1.7 "JTI" shall mean Japan Tobacco Inc.
1.8 "JTI Territory" shall mean Japan, Taiwan and South Korea (including
the territory comprising North Korea if it should be reunited with South Korea).
1.9 "License Fee" shall have the meaning set forth in Article 3 hereof.
1.10 "Licensed Field" shall mean [ * ]
1.11 "Licensed Technology" shall mean the [ * ] Technology and the
[ * ] Technology.
1.12 "Master Research License and Option Agreement" shall mean that
certain Master Research License and Option Agreement entered into by CGI, JTI
and XT as of June 28, 1996, as it may be amended.
1.13 Net Sales" shall mean the [ * ] by CGI or JTI, as the case may be,
or its Affiliates and Sublicensees for sales of Product to non-Affiliate
customers, [ * ], with respect to such sales, and [ * ], as reflected in [ * ]
of CGI or JTI and its Affiliates or Sublicensees, [ * ]
1.14 "Product" shall mean [ * ], but not limited to any
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[ * ] Product as used herein shall not include a [ * ].
1.15 "Product Antigen" shall mean .
1.16 "Rest of the World" shall mean all parts of the world not included
in the CGI Territory or the JTI Territory.
1.17 "Sublicensee" shall mean a third party that is not an Affiliate to
whom CGI or JTI, as the case may be, has granted a sublicense under the Licensed
Technology to make, use and/or sell Product to the extent of the rights of CGI
or JTI, as the case may be, therein. "Sublicensee" shall also include a third
party to whom CGI or JTI has granted the right to distribute Product under the
Licensed Technology to the extent of the rights of CGI or JTI, as the case may
be, therein, provided that such third party is responsible for the marketing and
promotion of Product within the applicable country.
1.18 "Territory" shall mean those countries of the world in which CGI
or JTI, as the case may be, has exclusive or co-exclusive license rights
pursuant to this Agreement.
1.19 "Universal Receptor Product" shall mean a substance that is
developed utilizing [ * ] Universal Receptor Technology.
1.20 "Universal Receptor Technology" shall mean technology for
universal receptors [ * ] As used herein: (i) "universal receptor" shall mean a
receptor [ * ]
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[ * ]
1.21 "Valid Claim" shall mean a claim of a pending or issued and
unexpired patent included within the Licensed Technology, which has not been
held unenforceable, unpatentable or invalid by a court or other governmental
agency of competent jurisdiction, and which has not been admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise.
1.22 "[ * ] Technology" shall mean (i) all U.S. patent applications and
patents listed on Schedule 2 and patents issuing on such applications; (ii) any
continuations, divisionals, reexaminations, reissues or extensions of any of (i)
above; (iii) any foreign counterparts issued or issuing on any of (i) or (ii)
above; and (iv) the Mice (as such term is defined in the Master Research License
and Option Agreement) and [ * ] as set forth on Schedule 2.
2. LICENSE GRANTS
2.1 Grant to CGI. Subject to the terms and conditions of this
Agreement, XT hereby grants to CGI an exclusive license or sublicense, as the
case may be, under the Licensed Technology, to make and have made Product
anywhere in the world for use, sale, import or other distribution in the CGI
Territory in the Licensed Field. Such license or sublicense shall be exclusive
even as to XT and shall include the exclusive right to grant and authorize
sublicenses for exploitation within the CGI Territory (excluding any rights to
the Mice as defined in the Master Research License and Option Agreement).
2.2 Grant to JTI. Subject to the terms and conditions of this
Agreement, XT hereby grants to JTI an exclusive license or sublicense, as the
case may be, under the Licensed Technology, to make and have made Product
anywhere in the world for use, sale, import or other distribution in the JTI
Territory in the Licensed Field. Such license or sublicense shall be exclusive
even as to XT, and shall include the exclusive right to grant and authorize
sublicenses for exploitation within the JTI Territory (excluding any rights to
the Mice as defined in the Master Research License and Option Agreement).
2.3 Rest of World. Subject to the terms and conditions of this
Agreement, XT hereby grants to each of CGI and JTI a co- exclusive license or
sublicense, as the case may be, under the Licensed Technology, to make and have
made Product anywhere in the world for use, sale, import or other distribution
in the Rest of the World in the Licensed Field. Such co-exclusive licenses
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or sublicenses shall be co-exclusive even as to XT and shall include the
co-exclusive right to grant and authorize sublicenses for exploitation within
the Rest of the World (excluding any rights to the Mice as defined in the Master
Research License and Option.
3. LICENSE FEE
CGI and JTI each shall pay to XT within thirty days of the Effective
Date a license fee of [ * ].
4. ROYALTIES
4.1 Royalty Rates. In consideration for the license and rights granted
herein, CGI and JTI each agree to pay to XT royalties of [ * ] of
Net Sales of Product by it and its Affiliates and Sublicensees.
4.2 Royalty Offsets. CGI or JTI, as the case may be, shall have the
right to reduce the rate at which any royalties due to XT are payable pursuant
to Section 4.1 to offset [ * ] provided, however, that the royalty rates paid by
such licensee pursuant to Section 4.1 shall not be reduced to less than [ * ]
the rate set forth in Section 4.1. [ * ]
4.3 Single Royalty; Non-Royalty Sales. Only one royalty shall be
payable with respect to any Product, regardless of how many claims or patents
within the Licensed Technology cover such Product. In addition, no royalty shall
be payable under this Article 4 with respect to sales of Product among CGI or
JTI, as the case may be, and its Affiliates and/or Sublicensees or for use in
research and/or development or clinical trials.
4.4 No Patent Protection. Royalties shall be payable at the rates
specified in Section 4.1 or 4.2 above only with respect to sales of a Product
that would infringe a Valid Claim in the country in which such Product is sold.
In the event that such Product is not covered by a Valid Claim in such country,
XT shall be paid a royalty on such sales in accordance with this Article 4,
[ * ]
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4.5 Combination Products. In the event that Product is sold in
combination as a single product with another product or component, Net Sales
from such combination sales for purposes of calculating the amounts due under
this Article 4 shall be [ * ]. In the event that no such separate sales are made
in the same quarter by CGI or JTI, as the case may be, Net Sales for royalty
determination shall be [ * ]
4.6 Termination of Royalties. Royalties under Section 4.1, 4.2 or 4.4
will be due until the later of (i) ten years from the first commercial sale of
Product in any country or (ii) on a country-by-country basis, the expiration of
the last-to-expire patent within the Licensed Technology covering the Product in
such country.
5. THIRD PARTY ROYALTIES
5.1 Royalties Payable by XT. XT will be responsible for the payment of
any royalties, license fees and milestone and/or other payments due to third
parties under licenses or similar agreements entered into by XT necessary to
allow the manufacture, use or sale of Product. CGI and/or JTI, as the case may
be, shall reimburse XT for any royalties paid by XT to third parties under
licenses or similar agreements covering Product necessary to allow the
manufacture, use, or sale or other exploitation of Product in accordance with
this Agreement. CGI and/or JTI shall continue any such reimbursement payments to
XT until XT's obligation to pay royalties to a third party under any license
covering Product expires or terminates. XT agrees not to enter into any license
or similar agreement after the Effective Date which would obligate CGI and/or
JTI, as they case may be, to make any payments under this Section 5.1 without
the prior written consent of CGI and/or JTI, as the case may be .
5.2 Royalties Payable by CGI or JTI. CGI and JTI, as the case may be,
will be responsible for the payment of any royalties, license fees and milestone
and other payments due to third parties under licenses or similar agreements
entered into by such party to allow the manufacture, use or sale of Product.
6. ACCOUNTING AND RECORDS
6.1 Royalty Reports and Payments. After the first commercial sale of
Product on which royalties are required, CGI and JTI each agrees to make
quarterly written reports to XT within eighty days after the end of each
calendar quarter, stating in each such report the number, description, and
aggregate Net Sales of Product sold during the calendar quarter
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upon which a royalty is payable under Article 4 above. Concurrently with the
making of such reports, CGI or JTI, as the case may be, shall pay to XT
royalties at the applicable rate specified in Section 4.1, 4.2 or 4.4 above and
all royalties payable pursuant to Section 5.1 above, and any adjustment to Net
Sales for a prior period in accordance with the definition of Net Sales in
Section 1.13 hereof. All payments to XT hereunder shall be made in U.S. Dollars
to a bank account designated by XT.
6.2 Early Third Party License Payments. If XT is obligated to pay
royalties to a third party prior to ninety days after the end of the calendar
quarter, XT shall so notify CGI or JTI, as the case may be, and such licensee
shall provide the reports and payments set forth in Section 6.1 above not later
than ten (10) days before the date such payments are due to the third party. Up
to thirty-five days before such payments are due, XT may provide CGI or JTI with
an invoice by facsimile setting forth the royalties XT must pay third parties
with respect to such licensee's activities in its Territory in the preceding
quarter, and such licensee shall pay such invoices within thirty days of receipt
of such invoice.
6.3 Records; Inspection. CGI and JTI shall keep (and cause its
Affiliates and Sublicensees to keep) complete, true and accurate books of
account and records for the purpose of determining the royalty amounts payable
to XT under this Agreement. Such books and records shall be kept at the
principal place of business of CGI and JTI or its Affiliates or Sublicensees, as
the case may be, for at least three years following the end of the calendar
quarter to which they pertain. Such records of each licensee or its Affiliates
will be open for inspection during such three-year period by a representative of
XT for the purpose of verifying the royalty statements. CGI and JTI shall each
require each of its Sublicensees to maintain similar books and records and to
open such records for inspection during the same three-year period by a
representative of CGI or JTI, as the case may be, reasonably satisfactory to XT
on behalf of, and as required by, XT for the purpose of verifying the royalty
statements. All such inspections may be made no more than once each calendar
year, at reasonable times mutually agreed by XT and the particular licensee. The
XT representative will be obliged to execute a reasonable confidentiality
agreement prior to commencing any such inspection. Inspections conducted under
this Section 6.3 shall be at the expense of XT, unless a variation or error of
CGI or JTI, as the case may be, producing an increase exceeding [ * ] of the
amount stated for the period covered by the inspection is established in the
course of any such inspection, whereupon all costs relating thereto will be paid
by the particular licensee. Upon the expiration of three years following the end
of any fiscal year, the calculation of royalties payable with respect to such
year shall be binding and conclusive, and CGI and JTI, as the case may be, shall
be released from any liability or accountability with respect to royalties for
such year.
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6.4 Currency Conversion. If any currency conversion shall be required
in connection with the calculation of royalties hereunder, such conversion shall
be made using the selling exchange rate for conversion of the foreign currency
into U.S. Dollars, quoted for current transactions reported in The Wall Street
Journal for the last business day of the calendar quarter to which such payment
pertains.
6.5 Late Payments. Any payments due from Licensee that are not paid on
the date such payments are due under this Agreement shall bear interest to the
extent permitted by applicable law at [ * ], calculated on the number of days
such payment is delinquent. This Section 6.5 shall in no way limit any other
remedies available to any party.
6.6 Withholding Taxes.
6.6.1 Unless immediately reimbursable under Section 6.6.2
below, all payments required to be made pursuant to Articles 3, 4 and 5 hereof
shall be without deduction or withholding for or on account of any taxes (other
than taxes imposed on or measured by net income) or similar governmental charge
imposed by a jurisdiction. Such taxes are referred to herein as "Withholding
Taxes" and such Withholding Taxes shall be the sole responsibility of the
withholding party. The withholding party shall provide a certificate evidencing
payment of any Withholding Taxes hereunder.
6.6.2 XT agrees to elect to claim a tax credit for Withholding
Taxes with respect to which it is entitled so to elect, and further agrees not
to amend such election for the full carry-forward period with respect to such
credit. At the time that XT realizes a reduction in U.S. tax liability by
actually utilizing the Withholding Taxes as a credit against regular U.S. tax
liability (determined on a "first-in-first-out" basis pro rata with other
available foreign tax credits), then the amount of such reduction attributable
to such credit shall immediately be reimbursed to the withholding party. For
these purposes, a reduction in U.S. tax liability shall include both a direct
reduction in XT's own tax liability and a reduction in the U.S. tax liability
of any of its partners.
6.7 Tax Indemnity. Except as provided in Section 6.6, each party (the
"Tax Indemnitor") shall indemnify and hold harmless the other party hereto (each
a "Tax Indemnitee") from and against any tax or similar governmental charge
assessed solely because of this Agreement, with respect to and directly
attributable to the income or the assets of the Tax Indemnitor. In the event
that any governmental agency shall make a claim against a party hereto which
could give rise to an indemnity hereunder, such potential Tax Indemnitee shall
give reasonably prompt notice to the potential Tax Indemnitor of the assertion
of such claim. If the
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transmission of such notice is unreasonably deferred and has a material, adverse
affect on the ability of the potential Tax Indemnitor to challenge such claim,
such potential Tax Indemnitor shall be released from liability hereunder. The
Tax Indemnitor alone shall (at its own expense) control the defense or
compromise of any such claim. The Tax Indemnitee shall execute any documents
required to enable Tax Indemnitor to defend such claim, provide any information
necessary therefor, and cooperate with Tax Indemnitor in such defense.
6.8 XT Tax Indemnity. XT shall indemnify and hold harmless CGI and JTI
and their Affiliates from and against any increase to their respective country
of incorporation income tax liability directly attributable to a positive
adjustment to the amount of gross receipts (an "Adjustment") reported or
reportable by such party from the income, including the royalty income, received
from CGI or JTI on Covered Products. The amount payable hereunder shall be equal
to the difference between (a) the product of (i) the amount of the Adjustment,
and (ii) the highest combined marginal corporate tax rate in their respective
country of incorporation in effect for the taxable year for which such
Adjustment is made, and (b) the reduction in the party's foreign tax liability,
which for purposes of this Agreement shall be equal to the product of (i) the
amount of any correlative adjustment to its foreign taxable income, and (ii) the
highest combined marginal foreign corporate tax rate in effect for the taxable
year for which the correlative adjustment is made. No indemnification payment
shall be required hereunder until comprehensive efforts to obtain a correlative
adjustment to CGI's or JTI's, as the case may be, or its Affiliates' taxable
income in a foreign state (which may include, for example invoking competent
authority provisions under the U.S. Japanese Income Tax Treaty (if applicable)
or other applicable bilateral tax treaty) have, to the extent reasonable to do
so, been exhausted.
7. RESEARCH and DEVELOPMENT
CGI and JTI shall each independently furnish and be responsible for
funding and conducting all of its preclinical and clinical research and
development of Product, at its own expense.
8. SHARING OF CLINICAL DATA
As long as their development projects remain on similar timelines, or
as otherwise mutually agreed, CGI and JTI will consider bilateral sharing of
their and their Sublicensees' relevant Product development information and
clinical data. However, there shall not be, unless otherwise agreed upon by the
parties, any obligation for sharing data developed independently, by or on
behalf of either of them.
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9. DUE DILIGENCE
9.1 [ * ]
9.1.1 CGI and JTI, as the case may be, agree to [ * ] as may
be agreed upon by the parties [ * ] from the Effective Date.
9.1.2 Notwithstanding the foregoing, each of CGI and JTI shall
be [ * ] in the United States or Japan.
9.2 Failure to Meet Due Diligence Obligation.
9.2.1 If the diligence requirements set forth in Section 9.1
are not met by CGI (or its Affiliates or Sublicensees) in the United States or
by JTI (or its Affiliates or Sublicensees) in Japan, such licensee's rights
hereunder shall terminate upon written notice by XT to such licensee and subject
to Sections 9.3, 9.4 and 14.3 below.
9.2.2. Notwithstanding Section 9.2.1, the license granted
hereunder to CGI or JTI, as the case may be, shall not terminate by reason of [
* ], to the extent that prudent business judgment, based on circumstances
outside of such licensee's reasonable control, reasonably justifies such delay.
9.3 Dispute Resolution. In the event that a dispute arises whether the
diligence requirements in Article 9 have been met, or circumstances exist which
CGI or JTI, respectively, believes justifies a failure on its part to meet such
obligation, the parties will attempt to resolve any dispute by mutual agreement,
and, if required, the Chief Executive Officer of CGI and the Vice President of
the Pharmaceutical Division of JTI shall meet personally and negotiate in good
faith to resolve such dispute during a period of thirty days following
licensee's receipt of the notice under Section 9.2.1.
9.4 Arbitration. In the event that the parties are unable to resolve
such dispute pursuant to Section 9.3 above, such dispute shall be settled
between XT and the other party by binding arbitration as set forth in Section
15.12. If the
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arbitrator determines that the party acted in good faith, but failed to meet its
obligations under Section 9.1 above, the license granted to such party shall not
terminate unless the nonperforming party fails to cure such non-performance
within a reasonable period of time, as determined by the arbitrator.
10. PATENTS
10.1 [ * ] Techology.
(a) XT or its licensor, as they may agree, shall have
responsibility for preparing, filing, prosecuting and maintaining patents and
patent applications worldwide relating to the [ * ] Technology and conducting
any interferences, oppositions, reexaminations, or requesting reissues or patent
term extensions with respect to the [ * ] Technology. XT shall keep CGI and JTI
each reasonably informed as to the status of such patent matters in its
Territory, including without limitation, by providing such licensee the
opportunity to review and comment on any documents which will be filed in any
patent office, and providing such licensee copies of any documents received by
XT from such patent offices including notice of all interferences,
reexaminations, oppositions or requests for patent term extensions. CGI and JTI
shall cooperate with and assist XT in connection with such activities, at XT's
request and expense.
(b) In the event that either CGI or JTI, as the case may be,
becomes aware that any [ * ] Technology necessary for the practice of the
licenses granted herein is infringed or misappropriated by a third party or is
subject to a declaratory judgment action arising from such infringement, such
party shall promptly notify XT (and the other licensee) and XT shall thereafter
promptly notify the owner of such intellectual property. XT or its licensor, as
they may agree, shall have the exclusive right to enforce, or defend any
declaratory judgment action, at its expense, involving any [ * ] Technology. In
such event, XT shall keep CGI and/or JTI, as the case may be, reasonably
informed of the progress of any such claim, suit or proceeding in its Territory.
Any recovery received by XT as a result of any such claim, suit or proceeding
shall be used first to reimburse XT for all expenses (including attorneys, and
professional fees) incurred in connection with such claim, suit or proceeding,
[ * ]
10.2 [ * ] Technology.
10.2.1 XT shall have the initial worldwide responsibility for
preparing, filing, prosecuting and maintaining patent applications and
conducting any interferences, oppositions, reexaminations, or requesting
reissues or patent term extensions with respect to [ * ] Technology. XT shall
give CGI and JTI each the opportunity to review the status of all
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such pending patent applications and actions in its Territory and shall keep CGI
and/or JTI, as the case may be, fully informed of the progress of such
applications and actions, including, without limitation, by promptly providing
CGI and/or JTI with copies of all correspondence sent to and received from
patent offices, and providing notice of all interferences, reexaminations,
oppositions or requests for patent term extensions. [ * ] In the event that XT
declines or fails to prepare, file, prosecute or maintain such patent
applications or patents or take such other actions, relating to the Product, it
shall promptly and in no event later than ninety days prior to any filing
deadline, provide notice to CGI and JTI. CGI and JTI shall promptly discuss and
agree on who should assume such responsibilities and how the expenses related
thereto should be allocated.
10.2.2 In the event that a licensee becomes aware any [ * ]
Technology necessary for the practice of the license granted herein is infringed
or misappropriated by a third party in any country in which CGI or JTI has
rights hereunder, or is subject to a declaratory judgment action arising from
such infringement in such country, CGI or JTI, as the case may be, shall
promptly notify XT and XT shall thereafter promptly notify the owner of such
intellectual property.
10.2.3 CGI or JTI, as the case may be, shall have the
exclusive right to enforce, or defend any declaratory judgment action, in any
country in which it has exclusive rights hereunder, at its expense, involving
[ * ] Technology. In such event, the party involved in such claim, suit or
proceeding, shall keep XT and the other of CGI or JTI reasonably informed of the
progress of any such claim, suit or proceeding. Any recovery by such party
received as a result of any such claim, suit or proceeding shall be used first
to reimburse such party for all expenses (including attorneys, and professional
fees) incurred in connection with such claim, suit or proceeding, and [ * ].
10.2.4 CGI and JTI shall consult and agree whether, and if so,
how, to enforce the [ * ] Technology in a country in which CGI and JTI have
co-exclusive rights hereunder. However, [ * ] (except as otherwise provided
below). The party taking such action shall keep XT and the other of CGI or JTI
reasonably informed of the progress of any such claim, suit or proceeding. Any
recovery by such party received as a result of any such claim, suit or
proceeding shall be used first
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to reimburse such party for all expenses (including attorneys' and professional
fees) incurred in connection with such claim, suit or proceeding [ * ].
10.3 Infringement Claims. If the production, sale or use of Product
pursuant to this Agreement results in any claim, suit or proceeding alleging
patent infringement against CGI or JTI (or their respective Affiliates or
Sublicensees), CGI or JTI, as the case may be, shall promptly notify XT thereof
in writing setting forth the facts of such claim in reasonable detail. [ * ]
CGI, JTI and XT dated March 22, 1996, as it may be amended from time to time,
CGI or JTI, as the case may be, shall have the exclusive right to defend and
control the defense of any such claim, suit or proceeding, at its own expense,
using counsel of its choice. Such parties shall keep XT reasonably informed of
all material developments in connection with any such claim, suit or proceeding
as it relates to Licensed Technology. The other of CGI or JTI may participate in
the defense of any such claim, suit or proceeding at its own expense through
counsel of its choice. CGI or JTI, as the case may be [ * ] pursuant to this
Agreement. Notwithstanding the above, neither CGI nor JTI shall be able to
settle any such claim, suit or proceeding that impinges upon the rights of JTI
or CGI, as the case may be, including, without limitation, involving any
admission of the invalidity of the Licensed Technology or rights to Product
Antigen outside its Territory without the prior approval of XT.
10.4 Patent Marking. CGI and JTI agree to mark and have its Affiliates
and Sublicensees mark all Products sold pursuant to this Agreement in accordance
with the applicable statute or regulations in the country or countries of
manufacture and sale thereof.
11. CONFIDENTIALITY
11.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for five years
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose any information
furnished to it by another party hereto pursuant to this Agreement except to the
extent that it can be established by the receiving party by competent proof that
such information:
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(a) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or
(d) was subsequently lawfully disclosed to the receiving party
by a person other than a party or developed by the receiving party without
reference to any information or materials disclosed by the disclosing party.
11.2 Permitted Disclosures. Notwithstanding Sections 11.1 above and
15.16 below, each party hereto may disclose another party's information to the
extent such disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable
governmental regulations or otherwise submitting information to tax or other
governmental authorities, making a permitted sublicense or other exercise of its
rights hereunder or conducting clinical trials, provided that if a party is
required to make any such disclosure of the other party's secret or confidential
information, other than pursuant to a confidentiality agreement, it will give
reasonable advance notice to the latter party of such disclosure requirement
and, save to the extent inappropriate in the case of patent applications, will
use efforts consistent with prudent business judgment to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or otherwise). Notwithstanding the foregoing, XT shall not
disclose to third parties, clinical data or regulatory filings received from CGI
or JTI except as agreed in writing by such party.
12. SUBLICENSES
Pursuant to Article 2 herein, CGI and JTI shall each have the exclusive
right in the CGI Territory and JTI Territory, respectively, and the co-exclusive
right in the Rest of the World to grant and authorize sublicenses to third
parties; provided, however, such party shall remain responsible for any payments
due XT for Net Sales of Product by any Sublicensee. [ * ]. Any sublicense
granted by CGI or JTI pursuant to this Agreement shall provide that the
Sublicensee will be subject to the applicable terms of this Agreement. CGI or
JTI, as the case may be, shall provide XT with a copy of relevant portions of
each sublicense agreement, as reasonably required by XT.
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13. REPRESENTATIONS and WARRANTIES
13.1 XT. XT represents and warrants that:
(i) it has the full right and authority to enter into this
Agreement and grant the rights and licenses granted herein;
(ii) it has not previously granted and will not grant any
rights inconsistent or in conflict with the rights and licenses granted to CGI
and JTI herein;
(iii) there are no existing or threatened actions, suits or
claims pending against XT with respect to the Licensed Technology or the right
of XT to enter into and perform its obligations under this Agreement;
(iv) it has not previously granted, and will not grant during
the term of this Agreement, any right, license or interest in and to the
Licensed Technology, or any portion thereof, with respect to the Product, or its
manufacture or use;
(v) Schedule 3 hereto sets forth all royalties, license fees,
milestone payments and similar payments due to third parties for which CGI
and/or JTI is obligated to reimburse XT under Section 5.1 above as of the
Effective Date; and
(vi) the Licensed Technology is all the technology
owned by or licensed to XT as of the Effective Date.
13.2 CGI and JTI. Each of CGI and JTI represents and warrants that: (i)
it has the full right and authority to enter into this Agreement, (ii) to its
knowledge, there are no existing or threatened actions, suits or claims pending
with respect to the subject matter hereof (except for the pending or threatened
litigation with GenPharm International, Inc.) or the right of it to enter into
and perform its obligations under this Agreement; and (iii) it has not entered
and during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
13.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, XT MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF LICENSED
TECHNOLOGY CLAIMS, ISSUED OR PENDING.
13.4 Effect of Representations and Warranties. It is understood that if
the representations and warranties under this Article 13 are not true and
accurate and a party incurs liabilities, costs or other expenses as a result of
such falsity, the party at fault shall indemnify, defend and hold the injured
party harmless from and against any such liabilities, costs or expenses
incurred, provided that the party at fault receives
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prompt notice of any claim against the injured party resulting from or related
to such falsity and the sole right to control the defense or settlement thereof.
14. TERM AND TERMINATION
14.1 Effectiveness. This Agreement shall become effective as of the
Effective Date and the license rights granted by XT under Article 2 above shall
be in full force and effect as of such date.
14.2 Term. Unless earlier terminated pursuant to the other provisions
of this Article 14, this Agreement shall continue in full force and effect until
the later of (i) the expiration of the last to expire patent within the Licensed
Technology claiming Product or (ii) the twentieth anniversary of the Effective
Date. The licenses granted under Article 2 shall survive the expiration (but not
an earlier termination) of this Agreement; provided that such licenses shall in
such event become nonexclusive.
14.3 Termination for Breach. Any party to this Agreement may terminate
this Agreement as to another party hereto in the event such other party shall
have materially breached or defaulted in the performance of any of its material
obligations hereunder, and such shall have continued for sixty days after
written notice thereof was provided to the breaching party by the nonbreaching
party that terminates the Agreement as to such party. Any termination shall
become effective at the end of such sixty day period unless the breaching party
has cured any such breach or default prior to the expiration of the sixty day
period. However, if the party alleged to be in breach of this Agreement disputes
such breach within such sixty day period, the non-breaching party shall not have
the right to terminate this Agreement unless it has been determined by an
arbitration proceeding in accordance with Section 15.12 below that this
Agreement was materially breached, and the breaching party fails to cure such
breach within thirty days following the final decision of the arbitrators or
such other time as directed by the arbitrators.
14.4 Other Termination Rights. CGI or JTI may terminate this Agreement
and the license granted to such party herein, in its entirety or as to any
particular patent within the Licensed Technology in a particular country, at any
time, by providing XT ninety-days written notice. In the event of termination as
to a particular country, the subject patent in such country shall cease to be
within the Licensed Technology for all purposes of this Agreement that apply to
the terminating party.
14.5 Effect of Termination.
14.5.1 In the event that this Agreement (i) is terminated under
Section 14.3 above, by reason of a breach by CGI or JTI, this Agreement shall
terminate with respect to the
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breaching party only, and shall continue in effect with respect to XT and the
non-breaching party; (ii) is terminated by CGI or JTI by reason of a breach by
XT, this Agreement shall terminate as to XT and the terminating party, and shall
continue in effect with respect to XT and the other of CGI and JTI; or (iii) is
terminated by CGI or JTI under Section 14.4 above, this Agreement shall
terminate with respect to the party exercising its right to terminate
thereunder, and shall continue in effect in its entirety with respect to XT and
the non-terminating party. In each case, the non-breaching or non-terminating
licensee shall thereupon have the right to obtain an exclusive license or
sublicense, as the case may be, under the Licensed Technology, to make and have
made Product for use, sale or other distribution in the Licensed Field
throughout the world, on the terms and conditions set forth herein that are
applicable to it.
14.5.2 Termination of this Agreement for any reason shall not
release any party hereto from any liability which at the time of such
termination has already accrued to the other party or which is attributable to a
period prior to such termination.
14.5.3 In the event this Agreement is terminated with respect
to CGI or JTI for any reason, such licensee and its Affiliates and Sublicensees
shall have the right to sell or otherwise dispose of the stock of any Product
subject to this Agreement then on hand. Upon termination of this Agreement by XT
for any reason, any sublicense granted by a licensee hereunder shall survive,
provided that upon request by XT, such Sublicensee promptly agrees in writing to
be bound by the applicable terms of this Agreement.
14.5.4 This Agreement, including, without limitation, any
licenses or sublicenses granted pursuant to this Agreement, shall survive any
dissolution, liquidation or acquisition of XT. Such licenses shall remain in
full force and effect even after any distribution, following dissolution, of the
intellectual property owned or licensed to XT, to any entity. Any transfer of
such intellectual property prior to or following dissolution shall be subject to
the licenses granted herein.
14.5.5 This Agreement, including the licenses granted in
Article 2 is independent of, and shall not be affected by, any breach or
termination of the Master Research License and Option Agreement or any other
agreement between the parties or their Affiliates. In the event of the
termination of the Master Research License and Option Agreement, the rights and
obligations of the parties hereto under Article 12 thereof shall be deemed to be
part of this Agreement.
14.5.6 Sections 6.3, 6.5, 6.6, 6.7 and 6.8 and Articles 11,
13, 14 and 15 shall survive the expiration and any termination of this Agreement
for any reason.
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<PAGE> 107
15. MISCELLANEOUS
15.1 Governing Laws. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, without regard to
conflicts of law principles.
15.2 Waiver. It is agreed that no waiver by any party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
15.3 Assignment. This Agreement and the licenses granted hereunder may
not be assigned by CGI or JTI to any third party without the written consent of
XT, and XT may not assign this Agreement to a third party without the consent of
both CGI and JTI; except any party may assign this Agreement without such
consent to (a) an Affiliate (provided that such Affiliate is two-thirds or
greater owned directly or indirectly) or (b) an entity that acquires
substantially all of the assets of the monoclonal antibody business segment of
the assigning party. The terms and conditions of this Agreement shall be binding
on and inure to the benefit of the permitted successors and assigns of the
parties.
15.4 Independent Contractors. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
15.5 Compliance with Laws. In exercising their rights under this
license, the parties shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this license.
15.6 No Implied Obligations. Except as expressly provided in Article 9
above, nothing in this Agreement shall be deemed to require CGI or JTI to
exploit the Licensed Technology nor to prevent CGI or JTI from commercializing
products similar to or competitive with any Product, in addition to or in lieu
of such Product.
15.7 Notices. Any notice required or permitted to be given to the
parties hereto shall be given in writing and shall be deemed to have been
properly given if delivered in person or when received if mailed by first class
certified mail to the other party at the appropriate address as set forth below
or to such other addresses as may be designated in writing by the parties from
time to time during the term of this Agreement.
XT: Xenotech, L.P.
322 Lakeside Drive
Foster City, California 94404
Attn: Chief Financial Officer
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<PAGE> 108
Japan Tobacco Inc.: Japan Tobacco Inc.
JT Building
2-1 Toranomon 2-chome
Minato-ku, Tokyo 105
Japan
Attn: Vice President,
Pharmaceutical Division
with a copy to: JT America Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Attn: President
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Attn: Neal N. Beaton, Esq.
Cell Genesys, Inc.: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: President
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attn: Julian N. Stern, Esq.
15.8 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of XT, CGI and JTI are subject to prior compliance with
United States and Japanese export regulations and such other United States and
Japanese laws and regulations as may be applicable, and to obtaining all
necessary approvals required by the applicable agencies of the government of the
United States and Japan. CGI and JTI each shall use efforts consistent with
prudent business judgment to obtain such approvals. XT shall cooperate with CGI
and JTI and shall provide assistance to them as reasonably necessary to obtain
any required approvals.
15.9 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties shall discuss in good faith appropriate
revised arrangements.
15.10 Force Majeure. Nonperformance of any party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform,is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the nonperforming party.
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<PAGE> 109
15.11 No Consequential Damages. IN NO EVENT SHALL ANY PARTY HERETO BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF RIGHTS HEREUNDER.
15.12 Dispute Resolution; Arbitration. The parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between senior executives of the parties.
Any dispute under this Agreement which is not settled after such meeting, shall
be finally settled by binding arbitration, conducted in accordance with the
Rules of Arbitration of the International Chamber of Commerce by three
arbitrators appointed in accordance with said rules. The arbitration proceedings
and all pleadings and written evidence shall be in the English language. Any
written evidence originally in a language other than English shall be submitted
in English translation accompanied by the original or a true copy thereof. The
costs of the arbitration, including administrative and arbitrators' fees, shall
be shared equally by the parties. Each party shall bear its own costs and
attorneys' and witness' fees. The prevailing party in any arbitration, as
determined by the arbitration panel, shall be entitled to an award against the
other party in the amount of the prevailing party's costs and reasonable
attorneys, fees. The arbitration shall be held in San Francisco, California,
unless initiated by XT or CGI against JTI in which event it will be held in
Tokyo, Japan. A disputed performance or suspended performances pending the
resolution of the arbitration must be completed within thirty days following the
final decision of the arbitrators. Any arbitration shall be completed within six
months from the filing of notice of a request for such arbitration.
15.13 Complete Agreement. It is understood and agreed by the parties
that this Agreement constitutes the entire agreement, both written and oral,
among the parties with respect to the subject matter hereof, and that all prior
agreements respecting the subject matter hereof, either written or oral,
expressed or implied, shall be abrogated, canceled, and are null and void and of
no effect. No amendment or change hereof or addition hereto shall be effective
or binding on either of the parties hereto unless reduced to writing and
executed by the respective duly authorized representatives of XT, CGI and JTI.
15.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
15.15 Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for convenience
of reference only and shall not affect its meaning or interpretation.
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<PAGE> 110
15.16 Nondisclosure. Except as set provided in Article 11, each of the
parties hereto agrees not to disclose to any third party the terms of this
Agreement without the prior written consent of each other party hereto, except
to advisors, investors and others on a need to know basis under circumstances
that reasonably ensure the confidentiality thereof, or to the extent required by
law. Without limitation upon any provision of this Agreement, each of the
parties hereto shall be responsible for the observance by its employees,
consultants and contractors of the foregoing confidentiality obligations.
IN WITNESS WHEREOF, the parties have executed this Agreement, in
triplicate originals, their respective officers hereunto duly authorized, as of
the day and year first above written.
JAPAN TOBACCO INC. CELL GENESYS, INC.
By: By:
----------------------- ---------------------
Name: Name:
--------------------- -------------------
Title: Title:
-------------------- ------------------
XENOTECH, INC. (as General
Partner of XENOTECH, L.P.)
By:
------------------------
Name:
----------------------
Title:
---------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
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<PAGE> 111
Exhibit E
MATERIALS TRANSFER AGREEMENT
THIS AGREEMENT, made by and [among] [between] XENOTECH, L.P., a
California limited partnership ("XT"), [CELL GENESYS, INC. ("CGI"), a Delaware
corporation] [and] [JAPAN TOBACCO INC., a Japanese corporation ("JTI")], shall
govern the terms and conditions of the transfer of biological materials by [ ]
("Transferor") to [ ] ("Transferee" or "Transferees").
1. Biological Materials. Transferor shall transfer to Transferee(s), to
the extent that Transferor has the right to transfer such materials, certain
biological materials owned by or licensed to Transferor and listed on Exhibit I
hereto, which Exhibit may be amended from time to time by the parties hereto.
2. Limitation of Use. The Materials may be used by Transferee(s) only
for the purposes set forth in Article 3 of the Master Research License and
Option Agreement among XENOTECH, [CGI] and [JTI] dated as of June 28, 1996 (the
"Master Research License and Option Agreement") and shall be used for no other
purpose whatsoever without Transferor's prior written consent.
3. Confidentiality. All information that Transferee(s) receives from
Transferor in writing, orally or by inspection is, and shall remain, proprietary
and confidential information of Transferor. Transferee(s) agree(s) to be bound
by the provisions of Article 11 of the Master Research License and Option
Agreement, holding all confidential information in confidence subject to the
exclusions set forth therein. Before any employee of, or consultant to,
Transferee(s), has access to the Materials or any confidential information of
Transferor, Transferee employing such person shall have entered into a written
agreement with such person obligating him or her to hold the Materials and such
confidential information in confidence in accordance with the Master Research
License and Option Agreement.
4. Control of Materials. Transferee(s) shall retain control over the
Materials and shall not transfer the Materials to any affiliate or third party
without prior written approval of Transferor. Materials shall remain the
property of Transferor, and Transferor shall be given written notice of the
transfer of the Materials to any facility of Transferee(s), other than the
facility to which they are initially delivered.
5. Ownership of Materials. Title to all Materials shall remain in
Transferor.
6. Intellectual Property Rights. Except as expressly provided by
Section 2 hereof, nothing in this Agreement shall be construed to grant
Transferee(s) any intellectual property rights
<PAGE> 112
including patent, trademark, copyright or trade secret rights relating to the
use of the Materials.
7. No Warranty. The Materials are being made available only to
facilitate the purposes set forth in Section 2 hereof. THE MATERIALS ARE BEING
SUPPLIED WITH NO WARRANTIES, EXPRESS OR IMPLIED, AND TRANSFEROR EXPRESSLY
DISCLAIMS ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT.
8. Care in Use of Materials. Transferee(s) acknowledge(s) that the
Materials are experimental in nature and may have unknown characteristics and
therefore agree to use prudence and reasonable care in the use, handling,
storage, transportation and disposition and containment of the Materials.
9. Hold Harmless. Transferee(s) shall [each] indemnify Transferor and
hold Transferor harmless from any claims or liabilities which arise as a result
of such Transferee's use, handling, storage, transportation and disposition and
containment of the Materials, provided that Transferor gives prompt notice to
Transferee of any such claim and Transferee is given the right to defend the
claim at its expense.
10. Compliance with Laws. Transferees shall use, handle, store,
transport, dispose and contain the Materials in compliance with all applicable
laws. Transferees shall not use the Materials in research on humans.
11. No Conflict. Transferor and Transferee(s) each represent that this
Agreement does not, and during the term of this Agreement, will not conflict
with any other right or obligation provided under any other agreement or
obligation that it has with any third party.
12. Term of Agreement. This Agreement shall be effective as of the date
executed by the parties and shall continue in effect until the termination of
the Master Research License and Option Agreement. Sections 3, 4, 5, 6, 7, 8, 9,
10 and this Section 12 of this Agreement shall survive the termination of this
Agreement.
13. General. This Agreement, together with the Master Research License
and Option Agreement, contains the entire agreement between the parties with
respect to the subject matter hereof. This Agreement may be modified only by a
subsequent written agreement signed by the parties. If any provision of this
Agreement is held to be unenforceable, the remaining provisions shall continue
unaffected.
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<PAGE> 113
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed below.
TRANSFEROR TRANSFEREE(S)
By: __________________________ By: ___________________________
(Signature) (Signature)
__________________________ ___________________________
(Printed Name) (Printed Name)
__________________________ ___________________________
(Title) (Title)
__________________________ ___________________________
(Date) (Date)
[By: ___________________________
(Signature)
___________________________
(Printed Name)
___________________________
(Title)]
___________________________
(Date)
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<PAGE> 114
Exhibit I
BIOLOGICAL MATERIALS TO BE TRANSFERRED
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<PAGE> 115
EXHIBIT F
The definition of Antigen will be based in the [ * ] of the desired antibody.
[ * ] Therefore, the term Antigen may [ * ]. That is to say, if [ * ] It is
understood that the [ * ]. In some cases [ * ]. In such cases, the [ * ]
The definition of Antigen is illustrated in the following examples:
EXAMPLE 1. [ * ]
This is an example of a [ * ]. All four of these Antigens are
recognized [ * ], and the [ * ] the four [ * ] the other Grantee.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 116
EXAMPLE 2. [ * ]
This is an example of [ * ]. In this case, [ * ]. Therefore, it is
possible to claim any [ * ]. In this case, it may also be that there
are [ * ]
EXAMPLE 3. [ * ]
This is an example of [ * ] Thus, [ * ] can be claimed as the Antigen.
The difference between this situation and Example 2 [ * ]. In such a
case, a different approach to determining [ * ] may be required.
For example, the [ * ]
A possible complicating factor may be the impact of the [ * ] related to an
Antigen previously selected by one of the parties. Here, the guiding principles
will be that [ * ] These principles are illustrated in the following examples.
EXAMPLE 4. [ * ]
Suppose that in 1990 Grantee A had selected [ * ] What rights does
Grantee A hold? What opportunities for Antigen selection are still open
to either Grantee? In this scenario, [ * ] the existing antibody must
be determined in light of the new information.
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[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 117
One outcome is that Grantee A [ * ] In addition, by the same principle,
Grantee A [ * ] However, by principle [ * ] a new opportunity for
Antigen selection [ * ]. In this situation, Grantee A should [ * ] as
individual Antigens to be selected by either Grantee in the future.
Grantee A will have [ * ].
The alternative outcome is that Grantee A [ * ]. In this case, Grantee
A would retain their [ * ] However, by principle (2) there are now
two new opportunities for Antigen selection. [ * ] to a similar extent.
EXAMPLE 5. [ * ]
Suppose that Grantee A selects [ * ]. At a later date, [ * ]. Again, as
in Example 4, the resolution should be governed by [ * ]. Thus, Grantee
A should [ * ]
It is understood that there may be some situations where the application of the
foregoing guiding principles may have to be discussed and mutually agreed upon
by the Grantees at the time of Antigen selection.
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[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 118
EXHIBIT G
DISCLOSURE AND RECORD OF INVENTION FORM
1. Provide a short descriptive title of the invention:
2. Briefly summarize the invention here, including the novel
features and advantages and include any draft manuscripts,
abstracts, etc. (use additional sheets as necessary and
attach to this form):
3. On or about what date did you first conceive this invention?
4. What is the date of the first written record (notebook,
letter, proposal, drawing, etc.) of this invention?
Identify the document, page numbers involved, and location
of this document.
5. When did you first successfully test this invention?
6. If you have disclosed this invention to non-Xenotech or non- Cell
Genesys or non-Japan Tobacco employees, then indicate the date, under
what circumstances, and to whom.
a. orally:
b. in writing:
c. by actual use, demonstration, or posters:
<PAGE> 119
EXHIBIT G
DISCLOSURE AND RECORD OF INVENTION FORM
7. Have you submitted, or do you intend to submit a report, abstract,
paper, or thesis relating to this invention for publication, for
presentation at a conference, or to a research sponsor?
If yes, give details, including the actual or planned date of
submission. If a manuscript has been accepted, give the anticipated
publication date. Append a copy of the latest draft manuscript
available. Please provide a copy of any abstracts submitted for
presentation.
8. Identify any literature references, patents, patent application, or
other publications including abstracts of which you are aware and which
you believe are pertinent to this invention. Please attach a copy of
each of these references, if available.
9. If any proprietary material (e.g., cell line, antibody, plasmid,
computer software, or chemical compounds) obtained from outside the
Company was used to develop this invention, please describe and attach
a copy or summary of any restrictive written or oral transfer agreement
relating thereto.
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<PAGE> 120
EXHIBIT G
DISCLOSURE AND RECORD OF INVENTION FORM
10. Names, addresses and signatures of persons believed to be
inventors:
1. _________________________ 2. _________________________
Print Name Print Name
_________________________ _________________________
Residence Address Residence Address
_________________________ _________________________
City/State/Zip Code City/State/Zip Code
_________________________ _________________________
Telephone Telephone
_________________________ _________________________
Signature Signature
Note: If there are more inventors, please provide names, addresses, telephone
numbers, and signatures on an additional sheet of paper.
11. For the above listed inventors, please provide a short
description of each person's contribution.
12. Technically Qualified Witnesses (Two Required) - invention
disclosed to and understood by:
1. _________________________ 2. _________________________
Signature Signature
_________________________ _________________________
Printed Name Printed Name
_________________________ _________________________
Date Date
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<PAGE> 121
EXHIBIT G
DISCLOSURE AND RECORD OF INVENTION FORM
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<PAGE> 1
CONFIDENTIAL TREATMENT REQUESTED BY CELL GENESYS, INC.
Exhibit 10.39
UNIVERSAL RECEPTOR LICENSE OPTION AGREEMENT
THIS UNIVERSAL RECEPTOR LICENSE OPTION AGREEMENT (the "Agreement")
effective as of June 28, 1996 (the "Effective Date") is made by and between Cell
Genesys, Inc., a Delaware corporation ("CGI"), and Xenotech, L.P., a California
limited partnership ("Xenotech").
RECITALS
Xenotech desires to grant to CGI and CGI desires to acquire from
Xenotech options to exclusive worldwide licenses or sublicenses, as the case may
be, under the [ * ] Technology to commercialize Universal Receptor Products
(as defined below), on the terms and conditions herein.
NOW, THEREFORE, in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:
1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall
have the meanings set forth below:
1.1 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with CGI or Xenotech. An entity shall be regarded as
in control of another entity if it owns or controls at least fifty percent (50%)
of the shares of the subject entity entitled to vote in the election of
directors (or, in the case of an entity that is not a corporation, for the
election of the corresponding managing authority); provided, however, Xenotech
shall not be an Affiliate of CGI under this Agreement and Xenotech shall not be
considered controlled by CGI for purposes of determining Affiliates of CGI.
1.2 "Master Research License and Option Agreement" shall mean the
Master Research License and Option Agreement among CGI, Xenotech and Japan
Tobacco Inc. dated as of June 28, 1996.
1.3 "[ * ] Mice" shall mean mice having the following genotype, as
shown by Southern blotting analysis:
[ * ]
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 2
[ * ]
1.4 "[ * ] Mice" shall mean mice having the following genotype, as
shown by Southern blotting analysis:
[ * ]
1.5 "[ * ] Mice" shall mean mice having the following genotype, as
shown by Southern blotting analysis:
[ * ]
1.6 "Target" shall have the meaning set forth in Exhibit B attached
hereto.
1.7 "Universal Donor Cell" shall mean a cell, [ * ]
1.8 "Universal Donor Cell Product" shall mean a [ * ]
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[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 3
1.9 "Universal Receptor Product" shall mean a substance that is
developed utilizing [ * ] Universal Receptor Technology.
1.10 "Universal Receptor Technology" shall mean technology for [ * ] As
used herein, "universal receptor" shall mean a receptor [ * ]
1.11 "[ * ] Technology" shall mean (i) all U.S. patent applications
listed on Schedule 1 and patents issuing thereon; (ii) any continuations,
divisionals, reexaminations, reissues or extensions of any of (i) above; (iii)
any foreign counterparts issued or issuing on any of (i) or (ii) above; and (iv)
the [ * ] Mice.
2. SUPPLY OF BREEDING MICE
2.1 The [ * ] Mice which are being provided to CGI pursuant to the
Master Research License and Option Agreement, subject to Section 9.3 may also be
used by CGI pursuant to the Research License set forth in Article 3 hereof for
its own research purposes or those of its Affiliates and may not be transferred
or otherwise made available to any third party.
2.2 This Agreement shall provide no separate right to the colonies of
Mice, as defined in the Master Research License and Option Agreement being
provided to CGI by Xenotech pursuant thereto.
3. GRANT OF RESEARCH LICENSE
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[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 4
Xenotech hereby grants to CGI an exclusive worldwide royalty-free
license, with no right to sublicense, to practice the [ * ] Technology to
conduct research programs directed at the discovery, development and creation of
Universal Receptor Products ("Research License").
4. OPTION PAYMENTS
In consideration for the options granted to Universal Receptor Products
herein and for the other covenants set forth herein, CGI agrees to pay Xenotech
[ * ] during the term of this Agreement. Such amount shall be paid within thirty
days of [ * ] Such amount shall be paid within thirty days of [ * ]
5. OPTIONS TO UNIVERSAL RECEPTOR PRODUCTS
5.1 Grant. Xenotech hereby grants to CGI options, exercisable in
accordance with this Article 5, to acquire exclusive licenses, at CGI's
election, to Universal Receptor Products, on the terms and subject to the
conditions set forth below and in the form of the Universal Receptor Product
License attached hereto as Exhibit A.
5.2 Notice of Targets. CGI shall deliver to Xenotech a written notice
containing a description of the Target for each Universal Receptor Product for
which CGI seeks an option. [ * ]
5.3 Exercise of Option. CGI shall have a right to exercise an option
for a Universal Receptor Product for which it has given Xenotech a notice
pursuant to Section 5.2 by signing and delivering to Xenotech an executed
Universal Receptor Product License for such Universal Receptor Product.
5.4 Termination of Option. An option for a Universal Receptor Product
shall expire on the date such Universal Receptor Product enters human clinical
trials.
6. CONFIDENTIAL INFORMATION
6.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for five years
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose any information
furnished to it by another party hereto pursuant to this Agreement except to the
extent that it can be established by the receiving party by competent proof that
such information:
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[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 5
(a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or
(d) was subsequently lawfully disclosed to the receiving party by
a person other than a party or developed by the receiving party without
reference to any information or materials disclosed by the disclosing party.
6.2 Permitted Disclosures. Notwithstanding Sections 6.1 above and
Section 10.17 below, each party hereto may disclose the other party's
information to the extent such disclosure is reasonably necessary in filing or
prosecuting patent applications, prosecuting or defending litigation, complying
with applicable governmental regulations or otherwise submitting information to
tax or other governmental authorities, making a permitted sublicense or other
exercise of its rights hereunder or conducting clinical trials, provided that if
a party is required to make any such disclosure of the other party's secret or
confidential information, other than pursuant to a confidentiality agreement, it
will give reasonable advance notice to the other party of such disclosure
requirement and, save to the extent inappropriate in the case of patent
applications, will use efforts consistent with prudent business judgment to
secure confidential treatment of such information prior to its disclosure
(whether through protective orders or otherwise). Notwithstanding the foregoing,
Xenotech shall not disclose to third parties, clinical data or regulatory
filings received from CGI except as agreed in writing by CGI.
7. REPRESENTATIONS and WARRANTIES
7.1 Xenotech. Xenotech represents and warrants that: (i) it has the
full right and authority to enter into this Agreement and grant the rights and
options granted herein; (ii) it has not previously granted and will not grant
any rights inconsistent or in conflict with the rights and options granted to
CGI herein; (iii) there are no existing or threatened actions, suits or claims
pending against Xenotech with respect to the [ * ] Technology or the right
of Xenotech to enter into and perform its obligations under this Agreement; and
(iv) it has not previously granted, and will not grant during the term of this
Agreement, any right, license or interest in and to the [ * ] Technology, or
any portion thereof, with respect to the Universal Receptor Products, or their
manufacture or use; and
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[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 6
(v) Schedule 2 hereto sets forth all royalties, license fees, milestone payments
and similar payments due to third parties for which CGI is obligated to
reimburse Xenotech under Section 5.1 of Exhibit A as of the Effective Date.
7.2 CGI. CGI represents and warrants that: (i) it has the full right
and authority to enter into this Agreement, (ii) to its knowledge, there are no
existing or threatened actions, suits or claims pending with respect to the
subject matter hereof (except for the pending or threatened litigation with
GenPharm International, Inc.) or the right of CGI to enter into and perform its
obligations under this Agreement; (iii) it has not entered into and during the
term of this Agreement will not enter into any other agreement inconsistent or
in conflict with this Agreement; and (iv) the financial terms contained in the
Universal Product License attached hereto as Exhibit A are consistent with the
financial terms agreed upon by third-party licensors of antibody and related
technologies which are needed to commercialize products utilizing the Universal
Receptor Technology.
7.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, XENOTECH MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF [ * ]
TECHNOLOGY CLAIMS, ISSUED OR PENDING.
7.4 Effect of Representations and Warranties. It is understood that if
the representations and warranties under this Article 7 are not true and
accurate and a party incurs liabilities, costs or other expenses as a result of
such falsity, the party at fault shall indemnify, defend and hold the injured
party harmless from and against any such liabilities, costs or expenses
incurred, provided that the party at fault receives prompt notice of any claim
against the injured party resulting from or related to such falsity and the sole
right to control the defense or settlement thereof.
8. INDEMNITY
8.1 CGI. Subject to their compliance with their obligations set forth
in Section 8.2 below, CGI agrees to indemnify and hold Xenotech and Japan
Tobacco Inc. and its Affiliates (each an "Indemnitee") and their directors,
officers, employees and agents harmless from and against any losses, claims,
damages, liabilities or actions (including reasonable attorneys' fees and court
and other expenses of litigation) (collectively, the "Liabilities") suffered or
incurred in connection with third party claims relating to any Universal
Receptor Product manufactured, used, sold or otherwise distributed by CGI and
its Affiliates or Sublicensees.
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8.2 Procedure. If an Indemnitee intends to claim indemnification under
this Article 8, it shall promptly notify CGI in writing of any loss, claim,
damage, liability or action in respect of which the Indemnitee or any of its
Affiliates, Sublicensees or their directors, officers, employees or agents
intend to claim such indemnification, and CGI shall have the right to
participate in, and, to the extent CGI so desires, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
Indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by CGI, if representation of such Indemnitee by the counsel
retained by CGI would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other party represented by such
counsel in such proceeding. The indemnity agreement in this Article 8 shall not
apply to amounts paid in settlement of any loss, claim, damage, liability or
action if such settlement is effected without the consent of the Indemnitor,
which consent shall not be withheld or delayed unreasonably. The failure to
deliver written notice to CGI within a reasonable time after the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve CGI of any liability to the Indemnitee under this Article 8, but the
omission so to deliver written notice to CGI shall not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article
8. As a further condition to claim indemnification under this Article 8, the
Indemnitee, its employees and agents, shall cooperate fully with CGI and its
legal representatives in the investigation of any action, claim or liability
covered by this indemnification.
9. TERM AND TERMINATION
9.1 Effectiveness. This Agreement shall become effective as of the
Effective Date.
9.2 Term. Unless earlier terminated pursuant to Section 9.3, this
Agreement shall continue in full force and effect until the later of (i) the
expiration of the last to expire patent within the [ * ] Technology which
covers Universal Receptor Products; (ii) the abandonment of the last patent
application within the [ * ] Technology covering manufacture, use or sale of
such Universal Receptor Products; or (iii) the twentieth anniversary of the
Effective Date.
9.3 Termination. CGI may terminate this Agreement and the Research
License granted herein, at any time, by providing Xenotech ninety-days written
notice.
9.4 Effect of Termination. Sections 2.2 and 7.3 and this Section 9.4
and Articles 6, 8 and 10 shall survive the expiration and any termination of
this Agreement for any reason.
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10. MISCELLANEOUS
10.1 Governing Laws. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, without regard to
conflicts of law principles.
10.2 Waiver. It is agreed that no waiver by a party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
10.3 Assignment. This Agreement and the option granted hereunder may
not be assigned by CGI to any third party without the written consent of
Xenotech; except CGI may assign this Agreement without such consent to (a) an
Affiliate (provided that such Affiliate is two-thirds or greater directly or
indirectly owned) or (b) an entity that acquires substantially all of the
business segment of such assigning party of which this Agreement is a part.
Notwithstanding the above, Articles 2 and 3 hereunder may be assigned only to a
party that has acquired CGI's rights pursuant to the Master Research License and
Option Agreement, in which event such assignee shall have the right to act as a
subcontractor for the party that retains or is assigned the balance of this
Agreement. The terms and conditions of this Agreement shall be binding on and
inure to the benefit of the permitted successors and assigns of the parties.
10.4 Independent Contractors. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
10.5 Compliance with Laws. In exercising its rights under this
Agreement, CGI shall fully comply with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body having
jurisdiction over the exercise of rights under this Agreement.
10.6 Further Actions. Each party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
10.7 No Implied Obligations. Nothing in this Agreement shall be deemed
to require CGI to exploit the [ * ] Technology nor to prevent CGI from
commercializing products similar to or competitive with any Universal Receptor
Product, in addition to or in lieu of such Universal Receptor Product.
10.8 Notices. Any notice required or permitted to be given to the
parties hereto shall be given in writing and shall be deemed to have been
properly given if delivered in person or when received if mailed by first class
certified mail to the other
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party at the appropriate address as set forth below or to such other addresses
as may be designated in writing by the parties from time to time during the term
of this Agreement.
Xenotech: Xenotech, L.P.
322 Lakeside Drive
Foster City, California 94404
Attn: Chief Financial Officer
With a copy to: JT Immunotech USA Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Attn: President
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Attn: Neal N. Beaton, Esq.
CGI: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: President
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attn: Julian N. Stern, Esq.
10.9 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of Xenotech and CGI are subject to prior compliance with
United States export regulations and such other United States laws and
regulations as may be applicable, and to obtaining all necessary approvals
required by the applicable agencies of the government of the United States. CGI
shall use efforts consistent with prudent business judgment to obtain such
approvals. Xenotech shall cooperate with CGI and shall provide assistance to CGI
as reasonably necessary to obtain any required approvals.
10.10 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties shall discuss in good faith appropriate
revised arrangements.
10.11 Force Majeure. Nonperformance of either party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform, is beyond the reasonable control and not caused by the
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negligence, intentional conduct or misconduct of the non-performing party.
10.12 No Consequential Damages. IN NO EVENT SHALL EITHER PARTY HERETO
BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF RIGHTS HEREUNDER.
10.13 Dispute Resolution; Arbitration. The parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between senior executives of the parties.
Any dispute under this Agreement which is not settled after such meeting, shall
be finally settled by binding arbitration, conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration proceedings and all pleadings and written evidence shall be in the
English language. Any written evidence originally in a language other than
English shall be submitted in English translation accompanied by the original or
a true copy thereof. The costs of the arbitration, including administrative and
arbitrators' fees, shall be shared equally by the parties. Each party shall bear
its own costs and attorneys' and witness' fees. The prevailing party in any
arbitration, as determined by the arbitration panel, shall be entitled to an
award against the other party in the amount of the prevailing party's costs and
reasonable attorneys' fees. The arbitration shall be held in San Francisco,
California. A disputed performance or suspended performances pending the
resolution of the arbitration must be completed within thirty days following the
final decision of the arbitrators. Any arbitration shall be completed within six
months from the filing of notice of a request for such arbitration.
10.14 Complete Agreement. It is understood and agreed between Xenotech
and CGI that this Agreement constitutes the entire agreement, both written and
oral, between the parties with respect to the subject matter hereof, and that
all prior agreements respecting the subject matter hereof, either written or
oral, expressed or implied, shall be abrogated, canceled, and are null and void
and of no effect. No amendment or change hereof or addition hereto shall be
effective or binding on either of the parties hereto unless reduced to writing
and executed by the respective duly authorized representatives of Xenotech and
CGI.
10.15 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
10.16 Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for convenience
of reference only and shall not affect its meaning or interpretation.
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10.17 Nondisclosure. Except as set forth in Article 6 herein, each of
the parties hereto agrees not to disclose to any third party the terms of this
Agreement without the prior written consent of each other party hereto, except
to advisors, investors and others on a need to know basis under circumstances
that reasonably ensure the confidentiality thereof, or to the extent required by
law. Without limitation upon any provision of this Agreement, each of the
parties hereto shall be responsible for the observance by its employees,
consultants and contractors of the foregoing confidentiality obligations.
IN WITNESS WHEREOF, the parties have executed this Agreement, their
respective officers hereunto duly authorized, as of the day and year first above
written.
XENOTECH, INC. (as General CELL GENESYS, INC.
Partner of XENOTECH, L.P.)
By: /s/ Takashi Kamiya By: /s/ Stephen A. Sherwin, M.D.
_________________________ ____________________________
Takashi Kamiya, Stephen A. Sherwin, M.D.
Chairman Chairman, President and
Chief Executive Officer
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SCHEDULE 2
ROYALTIES PAYABLE BY XENOTECH
[ * ]
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SCHEDULE 1
DOCKET NO. FILING DATE SERIAL NO. TITLE INVENTORS
[ * ]
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SCHEDULE 1
DOCKET NO. FILING DATE SERIAL NO. TITLE INVENTORS
[ * ]
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EXHIBIT A
FORM OF UNIVERSAL RECEPTOR PRODUCT LICENSE
THIS UNIVERSAL RECEPTOR PRODUCT LICENSE AGREEMENT (the "Agreement")
effective the ____ day of _________________, ____, is made by and between
XENOTECH, L.P., a California limited partnership ("Xenotech"), and CELL GENESYS,
INC., a Delaware corporation ("Licensee").
RECITALS
Xenotech desires to grant to Licensee and Licensee desires to acquire
from Xenotech an exclusive worldwide license or sublicense, as the case may be,
under the [ * ] Technology to commercialize the Universal Receptor Product
(as defined below), on the terms and conditions herein.
NOW, THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:
1. DEFINITIONS
For purposes of this Agreement, the terms set forth in this Article
shall have the meanings set forth below.
1.1 "Affiliate" shall mean any entity which controls, is controlled by
or is under common control with Licensee or Xenotech. An entity shall be
regarded as in control of another entity if it owns or controls at least fifty
percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing authority); provided, however,
Xenotech shall not be an Affiliate of Licensee under this Agreement and Xenotech
shall not be considered controlled by Licensee for purposes of determining
Affiliates of Licensee.
1.2 "Effective Date" shall mean the date this Agreement is executed by
Xenotech and Licensee.
1.3 "License Fee" shall have the meaning set forth in Section 3 hereof.
1.4 "Licensed Field" shall mean [ * ].
1.5 "Net Sales" shall mean [ * ] of [ * ], where, [ * ] shall mean
[ * ] Licensee or its Sublicensees to customers for the Universal Receptor
Product [ * ]
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[ * ] shall not include sales by Licensee to its Affiliates for resale, provided
that Licensee shall include the [ * ] such Affiliates [*] third
parties on the resale of such Universal Receptor Product. Notwithstanding the
foregoing, [ * ] shall include [ * ], but notwithstanding any of the foregoing,
shall not include [ * ]. Notwithstanding the foregoing, "Net Sales" for
Universal Donor Cell products shall be [ * ].
1.6 "Product Target" shall mean [specific Target as described in
Notice].
1.7 "Sublicensee" shall mean a third party that is not an Affiliate to
whom Licensee has granted a sublicense under the [ * ] Technology to make,
use and/or sell the Universal Receptor Product to the extent of the rights of
Licensee therein. "Sublicensee" shall also include a third party to whom
Licensee has granted the right to distribute such Universal Receptor Product,
provided that such third party is responsible for the marketing and promotion of
the Universal Receptor Product within the applicable country.
1.8 "Universal Donor Cell" shall mean [ * ]
1.9 "Universal Donor Cell Product" shall mean [ * ]
1.10 "Universal Receptor License Option Agreement" shall mean that
certain Universal Receptor License Option Agreement between Xenotech and
Licensee dated as of June 28, 1996.
1.11 "Universal Receptor Product" shall mean a substance that is
developed utilizing [ * ]
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[ * ] Universal Receptor Technology.
1.12 "Universal Receptor Technology" shall mean technology for
universal receptors [ * ]. As used herein, "universal receptor" shall mean a
receptor [ * ]
1.13 "Valid Claim" shall mean a claim of a pending or issued and
unexpired patent included within the [ * ] Technology, which has not
been held unenforceable, unpatentable or invalid by a court or other
governmental agency of competent jurisdiction, and which has not been admitted
to be invalid or unenforceable through reissue, disclaimer or otherwise.
1.14 "[ * ] Technology" shall mean (i) all U.S. patent
applications and patents listed on Schedule 1 and patents issuing on such patent
applications; (ii) any continuations, divisionals, reexaminations, reissues or
extensions of any of (i) above; (iii) any foreign counterparts issued or issuing
on any of (i) or (ii) above; (iv) the [ * ] Mice (as defined in the Universal
Receptor License Option Agreement).
2. LICENSE GRANTS
Subject to the terms and conditions of this Agreement, Xenotech hereby
grants to Licensee an exclusive license or sublicense, as the case may be, under
the [ * ] Technology, to make and have made the Universal Receptor
Product anywhere in the world for use, sale, export or other distribution in the
Licensed Field in the Territory. Such license or sublicense shall be exclusive
even as to Xenotech, and shall include the exclusive right to grant and
authorize sublicenses for exploitation worldwide. Pursuant to the license
granted hereunder, Licensee shall not have the right to sublicense or
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transfer the [ * ] Mice to its Sublicensees.
3. LICENSE FEE
Licensee shall pay to Xenotech within thirty days of the Effective Date
a license fee of [ * ] (the "License Fee").
4. ROYALTIES
4.1 Royalty Rates. In consideration for the license and rights granted
herein, Licensee agrees to pay to Xenotech royalties of [ * ] of Net Sales of
the Universal Receptor Product by it and its Affiliates and Sublicensees.
4.2 Royalty Offsets. Licensee shall have the right to reduce the rate
at which any royalties are payable to Xenotech pursuant to Section 4.1 by
offsetting the [ * ] provided, however, that the royalty rates paid by Licensee
pursuant to Section 4.1 shall not be reduced to less than [ * ] the rate set
forth in Section 4.1 above. [ * ]
4.3 Single Royalty; Non-Royalty Sales. Only one royalty shall be
payable with respect to any Universal Receptor Product, regardless of how many
claims or patents within the [ * ] Technology cover such Universal
Receptor Product. In addition, no royalty shall be payable under this Article 4
with respect to sales of the Universal Receptor Product among Licensee and its
Affiliates and/or Sublicensees or for use in research and/or development or
clinical trials.
4.4 No Patent Protection. Royalties shall be payable at the rates
specified in Section 4.1 or 4.2 above only with respect to sales of the
Universal Receptor Product that would infringe a Valid Claim in the country in
which such Universal Receptor Product is sold. In the event that such Universal
Receptor Product is not covered by a Valid Claim in such country, Xenotech shall
be paid a royalty on such sales in accordance with this Article 4, [ * ]
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4.5 Combination Products. In the event that the Universal Receptor
Product is sold in combination as a single product with another product or
component, Net Sales from such combination sales for purposes of calculating the
amounts due under this Article 4 shall be [ * ] In the event that no such
separate sales are made in the same quarter by Licensee, Net Sales for royalty
determination shall be [ * ]
4.6 Termination of Royalties. Royalties under Section 4.1, 4.2 or 4.4
will be due until the latter of (i) ten years from the first commercial sales of
product in any country, or (ii) on a country-by-country basis, the expiration of
the last-to-expire patent within the [ * ] Technology covering the Universal
Receptor Product in such country.
5. THIRD PARTY ROYALTIES
5.1 Royalties Payable by Xenotech. Xenotech will be responsible for the
payment of any royalties, license fees and milestone and/or other payments due
to third parties under licenses or similar agreements entered into by Xenotech
necessary to allow the manufacture, use or sale of the Universal Receptor
Product. Licensee shall reimburse Xenotech for any royalties paid by Xenotech to
third parties under licenses or similar agreements covering the Universal
Receptor Product necessary to allow the manufacture, use or sale or other
exploitation of the Universal Receptor Product anywhere in the world. Licensee
shall continue any such reimbursement payments to Xenotech until Xenotech's
obligation to pay royalties to a third party under any license covering the
Universal Receptor Product expires or terminates. Xenotech agrees to notify
Licensee if it enters into any license or similar agreement after the Effective
Date which would obligate Licensee to make any payments under this Section 5.1.
5.2 Royalties Payable by Licensee. Licensee will be responsible for the
payment of any royalties, license fees and milestone and other payments due to
third parties under licenses or similar agreements entered into by Licensee to
allow the manufacture, use or sale of the Universal Receptor Product.
6. ACCOUNTING AND RECORDS
6.1 Royalty Reports and Payments. After the first commercial sale of
the Universal Receptor Product on which royalties are required, Licensee agrees
to make quarterly written reports to Xenotech within eighty days after the end
of each calendar quarter, stating in each such report the number,
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description, and aggregate Net Sales of Universal Receptor Product sold during
the calendar quarter upon which a royalty is payable under Article 4 above.
Concurrently with the making of such reports, Licensee shall pay to Xenotech
royalties at the applicable rate specified in Section 4.1, 4.2 or 4.4 above and
all royalties payable pursuant to Section 5.1 above, and any adjustment to Net
Sales for a prior period in accordance with the definition of Net Sales in
Section 1.5 hereof. All payments to Xenotech hereunder shall be made in U.S.
Dollars to a bank account designated by Xenotech.
6.2 Third Party License Payments. If Xenotech is obligated to pay
royalties to a third party prior to ninety days after the end of the calendar
quarter, Xenotech shall so notify Licensee and Licensee shall provide the
reports and payments set forth in Section 6.1 above not later than ten days
before the date such payments are due to the third party. Up to thirty-five days
before such payments are due, Xenotech may provide Licensee with an invoice by
facsimile setting forth the royalties Xenotech must pay third parties with
respect to Licensee's activities in the Territory in the preceding quarter, and
Licensee shall pay such invoices within thirty days of receipt of such invoice.
6.3 Records; Inspection. Licensee shall keep (and cause its Affiliates
and Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable to Xenotech
under this Agreement. Such books and records shall be kept at the principal
place of business of Licensee or its Affiliates or Sublicensees, as the case may
be, for at least three years following the end of the calendar quarter to which
they pertain. Such records of Licensee or its Affiliates will be open for
inspection during such three-year period by a representative of Xenotech for the
purpose of verifying the royalty statements. The Xenotech representative will be
obliged to execute a reasonable confidentiality agreement prior to commencing
any such inspection. Licensee shall require each of its Sublicensees to maintain
similar books and records and to open such records for inspection during the
same three-year period by a representative of Licensee reasonably satisfactory
to XT on behalf of, and as required by, XT for the purpose of verifying the
royalty statements. Such inspections may be made no more than once each calendar
year, at reasonable times mutually agreed by Xenotech and Licensee. Inspections
conducted under this Section 6.3 shall be at the expense of Xenotech, unless a
variation or error producing an increase exceeding [ * ] of the amount stated
for the period covered by the inspection is established in the course of any
such inspection, whereupon all costs relating thereto will be paid by Licensee.
Upon the expiration of three years following the end of any fiscal year, the
calculation of royalties payable with respect to such year shall be binding and
conclusive, and Licensee shall be released from any liability or accountability
with respect to royalties for such year.
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6.4 Currency Conversion. If any currency conversion shall be required
in connection with the calculation of royalties hereunder, such conversion shall
be made using the selling exchange rate for conversion of the foreign currency
into U.S. Dollars, quoted for current transactions reported in The Wall Street
Journal for the last business day of the calendar quarter to which such payment
pertains.
6.5 Late Payments. Any payments due from Licensee that are not paid on
the date such payments are due under this Agreement shall bear interest to the
extent permitted by applicable law [ * ] calculated on the number of days such
payment is delinquent. This Section 6.5 shall in no way limit any other remedies
available to any party.
6.6 Withholding Taxes.
6.6.1 Unless immediately reimbursable under Section 6.6.2 below,
all payments required to be made pursuant to Articles 3, 4 and 5 hereof shall be
without deduction or withholding for or on account of any taxes (other than
taxes imposed on or measured by net income) or similar governmental charge
imposed by a jurisdiction. Such taxes are referred to herein as "Withholding
Taxes" and such Withholding Taxes shall be the sole responsibility of the
withholding party. The withholding party shall provide a certificate evidencing
payment of any Withholding Taxes hereunder.
6.6.2 Xenotech agrees to elect to claim a tax credit for
Withholding Taxes with respect to which it is entitled so to elect, and further
agrees not to amend such election for the full carry-forward period with respect
to such credit. At the time that Xenotech realizes a reduction in U.S. tax
liability by actually utilizing the Withholding Taxes as a credit against
regular U.S. tax liability (determined on a "first-in-first-out" basis pro rata
with other available foreign tax credits), then the amount of such reduction
attributable to such credit shall immediately be reimbursed to the withholding
party. For these purposes, a reduction in U.S. tax liability shall include both
a direct reduction in Xenotech's own tax liability and a reduction in the U.S.
tax liability of any of its partners.
6.7 Tax Indemnity. Except as provided in Section 6.6, each party (the
"Tax Indemnitor") shall indemnify and hold harmless the other party hereto (each
a "Tax Indemnitee") from and against any tax or similar governmental charge
assessed solely because of this Agreement with respect to and directly
attributable to the income or the assets of the Tax Indemnitor. In the event
that any governmental agency shall make a claim against a party hereto which
could give rise to an indemnity hereunder, such potential Tax Indemnitee shall
give reasonably prompt notice to the potential Tax Indemnitor of the assertion
of such claim. If the
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transmission of such notice is unreasonably deferred and has a material, adverse
affect on the ability of the potential Tax Indemnitor to challenge such claim,
such potential Tax Indemnitor shall be released from liability hereunder. The
Tax Indemnitor alone shall (at its own expense) control the defense or
compromise of any such claim. The Tax Indemnitee shall execute any documents
required to enable Tax Indemnitor to defend such claim, provide any information
necessary therefor, and cooperate with Tax Indemnitor in such defense.
6.8 Xenotech Tax Indemnity. Xenotech shall indemnify and hold harmless
Licensee and its Affiliates from and against any increase to its country of
incorporation income tax liability directly attributable to a positive
adjustment to the amount of gross receipts (an "Adjustment") reported or
reportable by such party from the income, including the royalty income, received
from Licensee on Universal Receptor Products. The amount payable hereunder shall
be equal to the difference between (a) the product of (i) the amount of the
Adjustment, and (ii) the highest combined marginal corporate tax rate in the
country of incorporation in effect for the taxable year for which such
Adjustment is made, and (b) the reduction in the party's foreign tax liability,
which for purposes of this Agreement shall be equal to the product of (i) the
amount of any correlative adjustment to its foreign taxable income, and (ii) the
highest combined marginal foreign corporate tax rate in effect for the taxable
year for which the correlative adjustment is made. No indemnification payment
shall be required hereunder until comprehensive efforts to obtain a correlative
adjustment to Licensee's or its Affiliates' taxable income in a foreign state
(which may include, for example invoking competent authority provisions under
the U.S. Japanese Income Tax Treaty (if applicable) or other applicable
bilateral tax treaty) have, to the extent reasonable to do so, been exhausted.
7. RESEARCH and DEVELOPMENT
Licensee shall independently furnish and be responsible for funding and
conducting all of its preclinical and clinical research and development of the
Universal Receptor Product, at its own expense.
8. PATENTS
8.1 Xenotech Responsibilities. Xenotech or its licensor, as they may
agree, shall be responsible for preparing, filing, prosecuting and maintaining
patent applications and patents worldwide, in such countries as it deems
appropriate, and conducting any interferences, reexaminations, reissues,
oppositions or requests for patent term extensions relating to the [ * ]
Technology. Xenotech shall keep Licensee reasonably informed as to the status of
such patent matters, including without limitation, by providing Licensee the
opportunity to review and comment on any documents which will be
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<PAGE> 23
filed in any patent office, and providing Licensee copies of any material
documents received by Xenotech from such patent offices including notice of all
interferences, reexaminations, oppositions or requests for patent term
extensions. Licensee shall cooperate with and assist Xenotech in connection with
such activities, at Xenotech's request and expense.
8.2 Infringement Claims. If the production, sale or use of the
Universal Receptor Product pursuant to this Agreement results in any claim, suit
or proceeding alleging patent infringement against Licensee (or its Affiliates
or Sublicensees), Licensee shall promptly notify Xenotech thereof in writing
setting forth the facts of such claim in reasonable detail. [ * ] Licensee shall
have the exclusive right to defend and control the defense of any such claim,
suit or proceeding, at its own expense, using counsel of its choice. Licensee
shall keep Xenotech reasonably informed of all material developments in
connection with any such claim, suit or proceeding. [ * ] Notwithstanding the
above, Licensee shall not be able to settle any such claim, suit or proceeding
that involves any admission of the invalidity of the [ * ] Technology.
8.3 Enforcement. In the event that Licensee becomes aware that any [ *
] Technology necessary for the practice of the license granted herein is
infringed or misappropriated by a third party in any country in which Licensee
has rights hereunder, or is subject to a declaratory judgment action arising
from such infringement in such country, Licensee shall promptly notify Xenotech
and Xenotech shall thereafter promptly notify the owner of such intellectual
property. Xenotech or its licensor, as they may agree, shall have the exclusive
right to enforce, or defend any declaratory judgment action, at its expense,
involving any [ * ] Technology. In such event, Xenotech shall keep Licensee
reasonably informed of the progress of any such claim, suit or proceeding. Any
recovery received by Xenotech as a result of any such claim, suit or proceeding
shall be used first to reimburse Xenotech for all expenses (including attorneys,
and professional fees) incurred in connection with such claim, suit or
proceeding, [ * ]
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<PAGE> 24
8.4 Patent Marking. Licensee agrees to mark and have its Affiliates
and Sublicensees mark all Universal Receptor Product sold pursuant to this
Agreement in accordance with the applicable statute or regulations in the
country or countries of manufacture and sale thereof.
9. CONFIDENTIALITY
9.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for five years
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose any information
furnished to it by another party hereto pursuant to this Agreement except to the
extent that it can be established by the receiving party by competent proof that
such information:
(a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or
(d) was subsequently lawfully disclosed to the receiving party by
a person other than a party or developed by the receiving party without
reference to any information or materials disclosed by the disclosing party.
9.2 Permitted Disclosures. Notwithstanding Sections 9.1 above and
14.16 below, each party hereto may disclose the other party's information to the
extent such disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with applicable
governmental regulations or otherwise submitting information to tax or other
governmental authorities, making a permitted sublicense or otherwise exercising
its rights hereunder or conducting clinical trials, provided that if a party is
required to make any such disclosure of the other party's secret or confidential
information, other than pursuant to a confidentiality agreement, it will give
reasonable advance notice to the other party of such disclosure requirement and,
save to the extent inappropriate in the case of patent applications, will use
its efforts consistent with prudent business judgment to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or otherwise). Notwithstanding the foregoing, Xenotech shall
not disclose to
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<PAGE> 25
third parties, clinical data or regulatory filings received from Licensee except
as agreed in writing by Licensee.
10. SUBLICENSES
Pursuant to Article 2 herein, Licensee will have the right to grant and
authorize sublicenses to third parties; provided, however, the Licensee shall
remain responsible for any payments due Xenotech for Net Sales of the Universal
Receptor Product by any Sublicensee. [ * ] Any sublicense granted by Licensee
pursuant to this Agreement shall provide that the Sublicensee will be subject to
the applicable terms of this Agreement. Licensee will promptly provide Xenotech
with a copy of relevant portions of each sublicense agreement, as reasonably
required by Xenotech.
11. INDEMNITY
11.1 Licensee. Subject to their compliance with their obligations set
forth in Section 11.2 below, Licensee agrees to indemnify and hold Xenotech and
Japan Tobacco Inc. and its Affiliates (each an "Indemnitee") and their
directors, officers, employees and agents harmless from and against any losses,
claims, damages, liabilities or actions (including reasonable attorneys' fees
and court and other expenses of litigation) (collectively, the "Liabilities")
suffered or incurred in connection with third party claims relating to any
Universal Receptor Product manufactured, used, sold or otherwise distributed by
Licensee and its Affiliates or Sublicensees.
11.2 Procedure. If an Indemnitee intends to claim indemnification under
this Article 11, it shall promptly notify Licensee in writing of any loss,
claim, damage, liability or action in respect of which the Indemnitee or any of
its Affiliates, Sublicensees or their directors, officers, employees or agents
intend to claim such indemnification, and Licensee shall have the right to
participate in, and, to the extent Licensee so desires, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an Indemnitee shall have the right to retain its own counsel, with the fees
and expenses to be paid by Licensee, if representation of such Indemnitee by the
counsel retained by Licensee would be inappropriate due to actual or potential
differing interests between such Indemnitee and any other party represented by
such counsel in such proceeding. The indemnity agreement in this Article 11
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Indemnitor, which consent shall not be withheld or delayed unreasonably. The
failure to deliver written notice to Licensee within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve Licensee of any liability to the Indemnitee under this
Article 11, but the
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<PAGE> 26
omission so to deliver written notice to Licensee shall not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article
11. As a further condition to claim indemnification under this Article 11, the
Indemnitee, its employees and agents, shall cooperate fully with Licensee and
its legal representatives in the investigation of any action, claim or liability
covered by this indemnification.
12. REPRESENTATIONS AND WARRANTIES
12.1 Xenotech. Xenotech represents and warrants that:
(i) it has the full right and authority to enter into this
Agreement and grant the rights and license granted herein;
(ii) it has not previously granted and will not grant any
rights inconsistent or in conflict with the rights and license granted to
Licensee herein;
(iii) there are no existing or threatened actions, suits or
claims pending against Xenotech with respect to the [ * ] Technology or
the right of Xenotech to enter into and perform its obligations under this
Agreement;
(iv) it has not previously granted, and will not grant during
the term of this Agreement, any right, license or interest in and to the
[ * ] Technology, or any portion thereof, with respect to the Universal
Receptor Product, or its manufacture or use; and
(v) Schedule 2 hereto sets forth all royalties, license fees,
milestone payments and similar payments due to third parties for which Licensee
is obligated to reimburse Xenotech under Section 5.1 above as of the Effective
Date.
12.2 Licensee. Licensee represents and warrants that: (i) it has the
full right and authority to enter into this Agreement; (ii) to its knowledge,
there are no existing or threatened actions, suits or claims pending with
respect to the subject matter hereof (except for the pending or threatened
litigation with GenPharm International, Inc.) or the right of Licensee to enter
into and perform its obligations under this Agreement; and (iii) it has not
entered and during the term of this Agreement will not enter any other agreement
inconsistent or in conflict with this Agreement.
12.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, XENOTECH MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF [ * ]
TECHNOLOGY CLAIMS, ISSUED OR PENDING.
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<PAGE> 27
12.4 Effect of Representations and Warranties. It is understood that if
the representations and warranties under this Article 12 are not true and
accurate and a party incurs liabilities, costs or other expenses as a result of
such falsity, the party at fault shall indemnify, defend and hold the injured
party harmless from and against any such liabilities, costs or expenses
incurred, provided that the party at fault receives prompt notice of any claim
against the injured party resulting from or related to such falsity and the sole
right to control the defense or settlement thereof.
13. TERM AND TERMINATION
13.1 Effectiveness. This Agreement shall become effective as of the
Effective Date and the license rights granted by Xenotech under Article 2 above
shall be in full force and effect as of such date.
13.2 Term. Unless earlier terminated pursuant to the other provisions
of this Article 13, this Agreement shall continue in full force and effect until
the later of (i) the expiration of the last to expire patent within the
[ * ] Technology covering manufacture, use or sale of the Universal Receptor
Product or (ii) the twentieth anniversary of the Effective Date.
13.3 Termination for Breach. Either party to this Agreement may
terminate this Agreement in the event the other party shall have materially
breached or defaulted in the performance of any of its material obligations
hereunder, and such shall have continued for sixty days after written notice
thereof was provided to the breaching party by the non-breaching party that
terminates the Agreement as to such party. Any termination shall become
effective at the end of such sixty day period unless the breaching party has
cured any such breach or default prior to the expiration of the sixty day
period. However, if the party alleged to be in breach of this Agreement disputes
such breach within such sixty day period, the non-breaching party shall not have
the right to terminate this Agreement unless it has been determined by an
arbitration proceeding in accordance with Section 14.12 below that this
Agreement was materially breached, and the breaching party fails to cure such
breach within thirty days following the final decision of the arbitrators or
such other time as directed by the arbitrators.
13.4 Other Termination Rights. Licensee may terminate this Agreement
and the license granted herein, in its entirety or as to any particular patent
within the [ * ] Technology in a particular country, at any time, by providing
Xenotech ninety-days written notice. In the event of termination as to a
particular patent, the subject patent in such country shall cease to be within
the [ * ] Technology for all purposes of this Agreement.
13.5 Effect of Termination.
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<PAGE> 28
13.5.1 Termination of this Agreement for any reason shall not
release either party hereto from any liability which at the time of such
termination has already accrued to the other party or which is attributable to a
period prior to such termination.
13.5.2 In the event this Agreement is terminated for any
reason, Licensee and its Affiliates and Sublicensees shall have the right to
sell or otherwise dispose of the stock of any Universal Receptor Product subject
to this Agreement then on hand. Upon termination of this Agreement by Xenotech
for any reason, any sublicense granted by Licensee hereunder shall survive,
provided that upon request by Xenotech, such Sublicensee promptly agrees in
writing to be bound by the applicable terms of this Agreement.
13.5.3 This Agreement, including, without limitation, the license
granted pursuant to this Agreement, shall survive any dissolution, liquidation
or acquisition of Xenotech. Such license shall remain in full force and effect
even after any distribution, following dissolution, of the intellectual property
owned or licensed to Xenotech, to any entity. Any transfer of such intellectual
property prior to or following dissolution shall be subject to the license
granted herein.
13.5.4 This Agreement, including the license granted in Article 2,
is independent of, and shall not be affected by, any breach or termination of
the any other agreement between the parties or their Affiliates.
13.5.5 Sections 6.3, 6.5, 6.6, 6.7 and 6.8 and Articles 9, 11, 12,
13 and 14 shall survive the expiration and any termination of this Agreement for
any reason.
14. MISCELLANEOUS
14.1 Governing Laws. This Agreement shall be interpreted and construed
in accordance with the laws of the State of California, without regard to
conflicts of law principles.
14.2 Waiver. It is agreed that no waiver by a party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
14.3 Assignment. This Agreement and the license granted hereunder may
not be assigned by Licensee to any third party without the written consent of
Xenotech; except CGI may assign this Agreement without such consent to (a) an
Affiliate (provided that such Affiliate is two-thirds or greater directly or
indirectly owned) or (b) an entity that acquires substantially all of the
business segment of such assigning party of which this Agreement is a part. The
terms and conditions of this Agreement
-14-
<PAGE> 29
shall be binding on and inure to the benefit of the permitted successors and
assigns of the parties.
14.4 Independent Contractors. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.
14.5 Compliance with Laws. In exercising its rights under this license,
Licensee shall fully comply with the requirements of any and all applicable
laws, regulations, rules and orders of any governmental body having jurisdiction
over the exercise of rights under this license.
14.6 No Implied Obligations. Nothing in this Agreement shall be deemed
to require Licensee to exploit the [ * ] Technology nor to prevent Licensee
from commercializing products similar to or competitive with any Universal
Receptor Product, in addition to or in lieu of such Universal Receptor Product.
14.7 Notices. Any notice required or permitted to be given to the
parties hereto shall be given in writing and shall be deemed to have been
properly given if delivered in person or when received if mailed by first class
certified mail to the other party at the appropriate address as set forth below
or to such other addresses as may be designated in writing by the parties from
time to time during the term of this Agreement.
Xenotech: Xenotech, L.P.
322 Lakeside Drive
Foster City, California 94404
Attn: Chief Financial Officer
With a copy to: JT Immunotech USA Inc.
1825 South Grant Street, Suite 220
San Mateo, CA 94402
Attn: President
and to: Gilbert, Segall and Young LLP
430 Park Avenue
New York, NY 10022
Attn: Neal N. Beaton, Esq.
Licensee: Cell Genesys, Inc.
322 Lakeside Drive
Foster City, California 94404
Attn: President
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<PAGE> 30
with a copy to: Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attn: Julian N. Stern, Esq.
14.8 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of Xenotech and Licensee are subject to prior compliance
with United States export regulations and such other United States laws and
regulations as may be applicable, and to obtaining all necessary approvals
required by the applicable agencies of the government of the United States.
Licensee shall use efforts consistent with prudent business judgment to obtain
such approvals. Xenotech shall cooperate with Licensee and shall provide
assistance to Licensee as reasonably necessary to obtain any required approvals.
14.9 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision and the parties shall discuss in good faith the
appropriate revised agreements.
14.10 Force Majeure. Nonperformance of either party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to
perform,is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the non-performing party.
14.11 No Consequential Damages. IN NO EVENT SHALL EITHER PARTY HERETO
BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF RIGHTS HEREUNDER.
14.12 Dispute Resolution; Arbitration. The parties will attempt to
resolve any dispute under this Agreement by mutual agreement, and, if required,
there shall be a face-to-face meeting between senior executives of the parties.
Any dispute under this Agreement which is not settled after such meeting, shall
be finally settled by binding arbitration, conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitration proceedings and all pleadings and written evidence shall be in the
English language. Any written evidence originally in a language other than
English shall be submitted in English translation accompanied by the original or
a true copy thereof. The costs of the arbitration, including administrative and
arbitrators' fees, shall be shared equally by the parties. Each party shall bear
its own costs and attorneys' and witness' fees. The prevailing party in any
arbitration, as determined by the arbitration panel, shall be entitled to an
award against the other party in the amount of the
-16-
<PAGE> 31
prevailing party's costs and reasonable attorneys fees. The arbitration shall be
held in San Francisco, California. A disputed performance or suspended
performances pending the resolution of the arbitration must be completed within
thirty days following the final decision of the arbitrators. Any arbitration
shall be completed within six months from the filing of notice of a request for
such arbitration.
14.13 Complete Agreement. It is understood and agreed between Xenotech
and Licensee that this Agreement constitutes the entire agreement, both written
and oral, between the parties with respect to the subject matter hereof, and
that all prior agreements respecting the subject matter hereof, either written
or oral, expressed or implied, shall be abrogated, canceled, and are null and
void and of no effect. No amendment or change hereof or addition hereto shall be
effective or binding on either of the parties hereto unless reduced to writing
and executed by the respective duly authorized representatives of Xenotech and
Licensee.
14.14 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and both together shall be
deemed to be one and the same agreement.
14.15 Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are included merely for convenience
of reference only and shall not affect its meaning or interpretation.
14.16 Nondisclosure. Except as set forth in Article 9 herein, each of
the parties hereto agrees not to disclose to any third party the terms of this
Agreement without the prior written consent of each other party hereto, except
to advisors, investors and others on a need to know basis under circumstances
that reasonably ensure the confidentiality thereof, or to the extent required by
law. Without limitation upon any provision of this Agreement, each of the
parties hereto shall be responsible for
-17-
<PAGE> 32
the observance by its employees, consultants and contractors of the foregoing
confidentiality obligations.
IN WITNESS WHEREOF, the parties have executed this Agreement, their
respective officers hereunto duly authorized, as of the day and year first above
written.
XENOTECH, INC. (as General
Partner of XENOTECH, L.P.)
By: __________________________
Name: __________________________
Title:__________________________
CELL GENESYS, INC.
By: __________________________
Name: __________________________
Title:__________________________
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<PAGE> 33
EXHIBIT B
The definition of Target will be based in the [ * ] of the desired antibody. [ *
] That is to say, [ * ], if a family [ * ] It is understood that the [ * ] In
some cases the substance to be designated as a [ * ] The definition of Target is
illustrated in the following examples:
EXAMPLE 1. [ * ]
This is an example of a [ * ]. If any one of the [ * ], then [ * ].
Thus, if [ * ] to a similar [ * ]. All four of these Targets are [ * ]
other.
[*] Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
<PAGE> 34
EXAMPLE 2. [ * ]
This is an example of [ * ]. In this case, [ * ]. Therefore, it is
possible to claim any [ * ]. In this case, it may also be [ * ], in
which case the family could be defined as, for example, [ * ]. The
product antibody, then, would have to be [ * ]
EXAMPLE 3. [ * ]
This is an example of [ * ], in this case [ * ] The difference between
this situation and Example 2 is that it may be difficult or impossible
to define [ * ]. In such a case, a different approach [ * ] may be
required. For example, [ * ]
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET AS OF JUNE 30, 1996, STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE
30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q FOR THE
QUARTERLY PERIOD ENDED JUNE 30, 1996
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 11,719
<SECURITIES> 68,673
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 81,402
<PP&E> 19,182
<DEPRECIATION> 10,383
<TOTAL-ASSETS> 90,583
<CURRENT-LIABILITIES> 8,327
<BONDS> 0
0
0
<COMMON> 16
<OTHER-SE> 75,375
<TOTAL-LIABILITY-AND-EQUITY> 90,583
<SALES> 0
<TOTAL-REVENUES> 10,601
<CGS> 0
<TOTAL-COSTS> 16,460
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 592
<INCOME-PRETAX> (4,156)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,156)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,156)
<EPS-PRIMARY> (0.26)
<EPS-DILUTED> (0.26)
</TABLE>
