<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 4, 1996
REGISTRATION NO. 333-10845
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TRANSKARYOTIC THERAPIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 2836 04-3027191
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
195 ALBANY STREET
CAMBRIDGE, MASSACHUSETTS 02139
(617) 349-0200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
RICHARD F SELDEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TRANSKARYOTIC THERAPIES, INC.
195 ALBANY STREET
CAMBRIDGE, MASSACHUSETTS 02139
(617) 349-0200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
PETER WIRTH, ESQ. BRUCE K. DALLAS, ESQ.
PALMER & DODGE LLP DAVIS POLK & WARDWELL
One Beacon Street 450 Lexington Avenue
Boston, Massachusetts 02108 New York, New York 10017
(617) 573-0100 (212) 450-4000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 2 to the Form S-1 Registration Statement is a Part II
filing solely to file exhibits and make related technical changes. Accordingly,
a preliminary prospectus has been omitted.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are filed herewith:
<TABLE>
<S> <C> <C>
1.1* -- Form of Underwriting Agreement.
3.1* -- Amended and Restated Certificate of Incorporation of the Registrant.
3.2* -- Form of Amended and Restated Certificate of Incorporation of the Registrant.
3.3* -- By-Laws of the Registrant.
3.4* -- Form of Amended and Restated By-Laws of the Registrant.
4.1 -- Specimen certificate for shares of Common Stock of the Registrant.
5.1* -- Opinion of Palmer & Dodge LLP as to legality of the shares being registered.
9.1* -- Amended and Restated Voting Rights Agreement, dated November 3, 1993 and
amended on May 18, 1994, March 1, 1995, October 26, 1995, July 10, 1996 and
August 7, 1996, by and among the Registrant and certain holders of the
Registrant's Preferred Stock named therein.
10.1* -- Stock Purchase Agreement, dated July 1988, by and between Warburg, Pincus
Capital Company, L.P. ("Warburg") and the Registrant.
10.2* -- Stockholders' Agreement, dated September 16, 1988, by and among Warburg,
certain individual investors and the Registrant.
10.3* -- Class B Preferred Stock Purchase Agreement, dated February 14, 1992 and
amended on April 20, 1993, by and among certain Purchasers and the Registrant.
10.4* -- Class B Preferred Stock Purchase Agreement, dated April 20, 1993, by and among
certain Purchasers and the Registrant.
10.5* -- Class C Preferred Stock and Warrant Purchase Agreement, dated November 3,
1993, by and among the Registrant and certain Purchasers named therein.
10.6* -- Class D Preferred Stock Purchase Agreement, dated May 18, 1994, by and among
the Registrant and certain Purchasers named therein.
10.7* -- Class E Preferred Stock Purchase Agreement, dated March 1, 1995, by and among
the Registrant and certain Purchasers named therein.
10.8* -- Class F Preferred Stock Purchase Agreement, dated October 26, 1995, by and
among the Registrant and certain Purchasers named therein.
10.9* -- Class G Preferred Stock Purchase Agreement, dated July 10, 1996, by and among
the Registrant and certain Purchasers named therein.
10.10* -- Supplemental Class G Preferred Stock Purchase Agreement, dated August 7, 1996,
by and among the Registrant and certain Purchasers named therein.
10.11* -- Amended and Restated Registration Rights Agreement, dated November 3, 1993 and
amended on May 13, 1994, March 1, 1995, October 26, 1995, July 10, 1996 and
August 7, 1996, by and among the Registrant and certain holders of the
Registrant's Preferred Stock named therein.
10.12* -- Lease Agreement, dated January 1, 1994, by and between the Trust under the
Will of Harry F. Stimpson for office space at 195 Albany Street, Cambridge,
Massachusetts.
10.13* -- Sublease Agreement, dated April 7, 1992, by and between the Massachusetts
Institute of Technology and the Registrant, for office space located at 185
Albany Street, Cambridge, Massachusetts.
10.14* -- 1993 Non-Employee Directors' Stock Option Plan.
10.15* -- 1993 Long-Term Incentive Plan.
10.16* -- Form of Letter Agreement re: Confidentiality, Inventions and Non-Disclosure.
10.17* -- Form of Letter Agreement re: Restricted Stock.
10.18* -- Form of Scientific Advisor Agreement.
</TABLE>
II-1
<PAGE> 4
<TABLE>
<S> <C> <C>
10.19* -- Amended and Restated Promissory Note, dated June 16, 1993, issued by the
Registrant to Dr. Richard F Selden, in the original principal amount of
$125,000.
10.20* -- Amended and Restated Promissory Note, dated June 16, 1993, issued by the
Registrant to Dr. Douglas A. Treco, in the original principal amount of
$60,000.
10.21* -- Amended and Restated Promissory Note, dated April 21, 1995, issued by the
Registrant to Dr. Christoph M. Adams, in the original principal amount of
$15,000.
10.22* -- Amended and Restated Promissory Note, dated May 5, 1995, issued by the
Registrant to Dr. Christoph M. Adams, in the original principal amount of
$20,000.
10.23* -- Employment Agreement, dated July 19, 1991, by and between Dr. Richard F Selden
and the Registrant.
10.24* -- Pledge Agreement, dated May 14, 1991, by and between Dr. Richard F Selden and
the Registrant.
10.25* -- Employment Agreement, dated July 26, 1991, by and between Dr. Douglas A. Treco
and the Registrant.
10.26* -- Pledge Agreement, dated August 15, 1991, by and between Dr. Douglas A. Treco
and the Registrant.
10.27* -- Employment Agreement, dated November 20, 1993, by and between Dr. Christoph M.
Adams and the Registrant.
10.28* -- Pledge Agreement, dated April 21, 1995, by and between Dr. Christoph M. Adams
and the Registrant.
10.29* -- Agreement, dated September 1, 1991, by and between Mr. William R. Miller and
the Registrant.
10.30* -- Agreement, dated July 30, 1993, by and between Warburg and the Registrant.
10.31* -- Common Stock Purchase Warrant, dated September 12, 1991.
10.32+ -- Collaboration and License Agreement, dated July 22, 1993 and amended on May
30, 1996, by and between Genetics Institute, Inc. and the Registrant.
10.33+ -- Amended and Restated License Agreement, dated March 1, 1995, by and between
Hoechst Marion Roussel, Inc. ("HMRI") and the Registrant.
10.34+ -- License Agreement, dated March 1, 1995, by and between HMRI and the
Registrant.
11.1* -- Statement re: computation of earnings (loss) per share -- pro forma.
23.1* -- Consent of Palmer & Dodge LLP (included in Exhibit 5.1).
23.2* -- Consent of Hamilton, Brook, Smith & Reynolds, P.C.
23.3* -- Consent of Ernst & Young LLP.
24.1* -- Power of Attorney (included on the signature pages to this Registration
Statement)
27* -- Financial Data Schedule
</TABLE>
- ---------------
* Previously filed.
+ Certain confidential material contained in the document has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
406 of the Securities Act of 1933, as amended.
(b) Financial Statement Schedules
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
II-2
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Cambridge,
Commonwealth of Massachusetts, on September 4, 1996.
TRANSKARYOTIC THERAPIES, INC.
By: /s/ ANTHONY R. HALL
------------------------------------
Anthony R. Hall
Vice President, Finance
and Administration; Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ---------------------------- ------------------
<C> <S> <C>
RICHARD F SELDEN* President, Chief Executive September 4, 1996
- --------------------------------------------- Officer, Treasurer and
Richard F Selden Director (principal
executive officer)
/s/ ANTHONY R. HALL Vice President, Finance and September 4, 1996
- --------------------------------------------- Administration; Chief
Anthony R. Hall Financial Officer (principal
financial and accounting
officer)
WILLIAM R. MILLER* Director September 4, 1996
- ---------------------------------------------
William R. Miller
RODMAN W. MOORHEAD, III* Director September 4, 1996
- ---------------------------------------------
Rodman W. Moorhead, III
JAMES E. THOMAS* Director September 4, 1996
- ---------------------------------------------
James E. Thomas
*By: /s/ ANTHONY R. HALL
- ---------------------------------------------
Anthony R. Hall
Attorney-in-fact
</TABLE>
II-3
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
PAGE
------------
<S> <C> <C> <C>
1.1* -- Form of Underwriting Agreement. .......................................
3.1* -- Amended and Restated Certificate of Incorporation of the
Registrant. ...........................................................
3.2* -- Form of Amended and Restated Certificate of Incorporation of the
Registrant. ...........................................................
3.3* -- By-Laws of the Registrant. ............................................
3.4* -- Form of Amended and Restated By-Laws of the Registrant. ...............
4.1 -- Specimen certificate for shares of Common Stock of the Registrant. ....
5.1* -- Opinion of Palmer & Dodge LLP as to legality of the shares being
registered. ...........................................................
9.1* -- Amended and Restated Voting Rights Agreement, dated November 3, 1993
and amended on May 18, 1994, March 1, 1995, October 26, 1995, July 10,
1996 and August 7, 1996, by and among the Registrant and certain
holders of the Registrant's Preferred Stock named therein. ............
10.1* -- Stock Purchase Agreement, dated July 1988, by and between Warburg,
Pincus Capital Company, L.P. ("Warburg") and the Registrant. ..........
10.2* -- Stockholders' Agreement, dated September 16, 1988, by and among
Warburg, certain individual investors and the Registrant. .............
10.3* -- Class B Preferred Stock Purchase Agreement, dated February 14, 1992 and
amended on April 20, 1993, by and among certain Purchasers and the
Registrant. ...........................................................
10.4* -- Class B Preferred Stock Purchase Agreement, dated April 20, 1993, by
and among certain Purchasers and the Registrant. ......................
10.5* -- Class C Preferred Stock and Warrant Purchase Agreement, dated November
3, 1993, by and among the Registrant and certain Purchasers named
therein. ..............................................................
10.6* -- Class D Preferred Stock Purchase Agreement, dated May 18, 1994, by and
among the Registrant and certain Purchasers named therein. ............
10.7* -- Class E Preferred Stock Purchase Agreement, dated March 1, 1995, by and
among the Registrant and certain Purchasers named therein. ............
10.8* -- Class F Preferred Stock Purchase Agreement, dated October 26, 1995, by
and among the Registrant and certain Purchasers named therein. ........
10.9* -- Class G Preferred Stock Purchase Agreement, dated July 10, 1996, by and
among the Registrant and certain Purchasers named therein. ............
10.10* -- Supplemental Class G Preferred Stock Purchase Agreement, dated August
7, 1996, by and among the Registrant and certain Purchasers named
therein. ..............................................................
10.11* -- Amended and Restated Registration Rights Agreement, dated November 3,
1993 and amended on May 13, 1994, March 1, 1995, October 26, 1995, July
10, 1996 and August 7, 1996, by and among the Registrant and certain
holders of the Registrant's Preferred Stock named therein. ............
10.12* -- Lease Agreement, dated January 1, 1994, by and between the Trust under
the Will of Harry F. Stimpson for office space at 195 Albany Street,
Cambridge, Massachusetts. .............................................
10.13* -- Sublease Agreement, dated April 7, 1992, by and between the
Massachusetts Institute of Technology and the Registrant, for office
space located at 185 Albany Street, Cambridge, Massachusetts. .........
10.14* -- 1993 Non-Employee Directors' Stock Option Plan. .......................
10.15* -- 1993 Long-Term Incentive Plan. ........................................
10.16* -- Form of Letter Agreement re: Confidentiality, Inventions and
Non-Disclosure. .......................................................
10.17* -- Form of Letter Agreement re: Restricted Stock. ........................
10.18* -- Form of Scientific Advisor Agreement. .................................
10.19* -- Amended and Restated Promissory Note, dated June 16, 1993, issued by
the Registrant to Dr. Richard F Selden, in the original principal
amount of $125,000. ...................................................
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
PAGE
------------
<S> <C> <C> <C>
10.20* -- Amended and Restated Promissory Note, dated June 16, 1993, issued by
the Registrant to Dr. Douglas A. Treco, in the original principal
amount of $60,000. ....................................................
10.21* -- Amended and Restated Promissory Note, dated April 21, 1995, issued by
the Registrant to Dr. Christoph M. Adams, in the original principal
amount of $15,000. ....................................................
10.22* -- Amended and Restated Promissory Note, dated May 5, 1995, issued by the
Registrant to Dr. Christoph M. Adams, in the original principal amount
of $20,000. ...........................................................
10.23* -- Employment Agreement, dated July 19, 1991, by and between Dr. Richard F
Selden and the Registrant. ............................................
10.24* -- Pledge Agreement, dated May 14, 1991, by and between Dr. Richard F
Selden and the Registrant. ............................................
10.25* -- Employment Agreement, dated July 26, 1991, by and between Dr. Douglas
A. Treco and the Registrant. ..........................................
10.26* -- Pledge Agreement, dated August 15, 1991, by and between Dr. Douglas A.
Treco and the Registrant. .............................................
10.27* -- Employment Agreement, dated November 20, 1993, by and between Dr.
Christoph M. Adams and the Registrant. ................................
10.28* -- Pledge Agreement, dated April 21, 1995, by and between Dr. Christoph M.
Adams and the Registrant. .............................................
10.29* -- Agreement, dated September 1, 1991, by and between Mr. William R.
Miller and the Registrant. ............................................
10.30* -- Agreement, dated July 30, 1993, by and between Warburg and the
Registrant. ...........................................................
10.31* -- Common Stock Purchase Warrant, dated September 12, 1991. ..............
10.32+ -- Collaboration and License Agreement, dated July 22, 1993 and amended on
May 30, 1996, by and between Genetics Institute, Inc. and the
Registrant. ...........................................................
10.33+ -- Amended and Restated License Agreement, dated March 1, 1995, by and
between Hoechst Marion Roussel, Inc. ("HMRI") and the Registrant. .....
10.34+ -- License Agreement, dated March 1, 1995, by and between HMRI and the
Registrant. ...........................................................
11.1* -- Statement re: computation of earnings (loss) per share -- pro
forma. ................................................................
23.1* -- Consent of Palmer & Dodge LLP (included in Exhibit 5.1). ..............
23.2* -- Consent of Hamilton, Brook, Smith & Reynolds, P.C. ....................
23.3* -- Consent of Ernst & Young LLP. .........................................
24.1* -- Power of Attorney (included on the signature pages to this Registration
Statement).............................................................
27* -- Financial Data Schedule................................................
</TABLE>
- ---------------
* Previously filed
+ Certain confidential material contained in the document has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
406 of the Securities Act of 1933, as amended.
<PAGE> 1
EXHIBIT 4.1
TKT
NUMBER SHARES
TRANSKARYOTIC THERAPIES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON, MASSACHUSETTS
AND NEW YORK, NEW YORK
COMMON STOCK
CUSIP 893735 10 0
THIS CERTIFIES THAT SEE REVERSE FOR
CERTAIN DEFINITIONS
SPECIMEN
is the owner of
fully-paid and non-assessable shares of the COMMON STOCK, $0.01
par value, of
TRANSKARYOTIC THERAPIES, INC.
transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney upon surrender of this
certificate properly endorsed.
This certificate and the shares of Common Stock represented
hereby are received and held subject to the laws of the State of
Delaware and to the Restated Certificate of Incorporation and the
By-Laws of the Corporation, all as from time to time amended, and
the owner of this certificate by accepting the same expressly
assents thereto. This Certificate is not valid unless
countersigned by the Transfer Agent and registered by the
Registrar.
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be signed by the facsimile signatures of its duly
authorized officers and a facsimile of its corporate seal to be
hereunto affixed.
Dated
TRANSKARYOTIC THERAPIES, INC.
[seal]
PRESIDENT AND CHIEF EXECUTIVE OFFICER TREASURER
COUNTERSIGNED AND REGISTERED
THE FIRST NATIONAL BANK OF BOSTON
TRANSFER AGENT AND REGISTRAR
BY
AUTHORIZED SIGNATURE
<PAGE> 2
TRANSKARYOTIC THERAPIES, INC.
The following abbreviations, when used in the inscription on
the face of this certificate, shall be construed as though they
were written out in full according to applicable laws or
regulations:
TEN COM -as tenants in common UNIF GIFT MIN ACT -____ Custodian
TEN ENT -as tenants by the entirety (Cust)
JT TEN -as joint tenants with right _____ under
of survivorship and not as (Minor)
tenants in common Uniform Gifts
to Minors Act
-------------
(State)
Additional abbreviations may also be used though not on the above
list.
For value received, ________________________________________ hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ---------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares of the common stock represented by the within Certificate,
and do hereby irrevocably constitute and appoint
________________________________________________________Attorney
to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises.
Dated,
----------------------------------------
- -----------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATEVER.
Signature(s) Guaranteed:
- ------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION, (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM) PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE> 1
EXHIBIT 10.32
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS
7-22-93
COLLABORATION AND LICENSE AGREEMENT
THIS COLLABORATION AND LICENSE AGREEMENT (together with the attached
Schedules, the "Agreement") is made as of July 22, 1993 (the "Effective Date")
by and between Genetics Institute, Inc., a Delaware corporation with a business
address at 87 CambridgePark Drive, Cambridge, Massachusetts 02140 ("GI") and
Transkaryotic Therapies, Inc., a Delaware corporation with a business address at
193 Albany Street, Cambridge, Massachusetts 02139 ("TKT").
1. BACKGROUND.
1.1. FACTOR VIII. GI has developed and produced cDNA for full length and
B-domain deleted recombinant human Factor VIII (the "Factor VIII
Gene", more fully defined below). TKT desires to obtain a
non-exclusive license from GI to use the Factor VIII Gene in its
Research in the Licensed Field and to develop and commercialize Factor
VIII Gene Therapy Products for distribution by TKT in the TKT
Territory and by GI in the GI Territory (all capitalized terms are
defined below).
1.2. AGREEMENT. GI is willing to grant TKT these rights on the terms and
conditions set forth in this Agreement.
2. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below.
2.1. "AFFILIATE" means any corporation, company, partnership, joint venture
and/or firm which controls, is controlled by or is under common
control with a Party. For purposes of this Section 2.1, "control"
means (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or shares
entitled to vote for the election of directors; and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty
percent (50%) of the equity interest with the
<PAGE> 2
Page 2 of 37
power to direct the management and policies of such noncorporate
entities. Notwithstanding this definition, American Home Products
Corporation shall be deemed to be an Affiliate of GI for purposes of
this Agreement.
2.2. "CONFIDENTIAL INFORMATION" includes, without limitation, any
scientific, technical, trade or business information disclosed by one
party to the other which is treated by the party providing such
information as confidential or proprietary, whether or not such
information is labelled or identified as "Confidential".
"Confidential Information" does not include information which (a) was
known to the receiving party at the time it was disclosed, other than
by previous disclosure by the disclosing party, as evidenced by
written records at the time of disclosure; (b) is at the time of
disclosure or later becomes publicly known under circumstances
involving no breach of this Agreement; (c) is lawfully and in good
faith made available to the receiving party by a third party who did
not derive it from the disclosing party and who imposes no obligation
of confidence on the receiving party; or (d) is developed by the
receiving party independent of any disclosure by the disclosing party.
2.3. "CORE CLINICAL TRIALS" means the human clinical trials which generate
data submitted by a Party in a PLA and which serve as the basis for
(a) initial regulatory approval of the Factor VIII Gene Therapy
Products by (i) the FDA in the United States or (ii) the Health
Protection Bureau in Canada, or (b) initial recommendation for
approval of the Factor VIII Gene Therapy Products from the CPMP in the
European Community. Core Clinical Trials do not include any Phase IV
or post-marketing clinical trials, which will be separately conducted
and funded by the Parties, as set forth in Section 6.5 below;
provided, however, if the FDA, the Health Protection Bureau or the
CPMP require post-marketing surveillance and/or trials as a
precondition to initial regulatory approval, Core Clinical Trials will
include such post-marketing surveillance and/or trials.
2.4. "CPMP" means either (a) the Committee for Proprietary Medicinal
Products of the European Community; (b) its
<PAGE> 3
Page 3 of 37
procedures for clinical testing, registration, and approval of the
Factor VIII Gene Therapy Products; or (c) the marketing authorization
applications as per such procedures; as the case may be in the context
used in a particular section of the Agreement.
2.5. "DEVELOPMENTS" include, without limitation, ideas, concepts,
discoveries, inventions, developments, patents and patent rights,
know-how, trade secrets, techniques, methodologies, modifications,
innovations, improvements, writings, documentation, data and rights
(whether or not protectible under state, federal, or foreign patent,
trademark, copyright or similar laws) that are conceived, discovered,
invented, developed, created, made or reduced to practice by or on
behalf of the Parties in conducting the Research and clinical trials
for, and in commercializing, the Factor VIII Gene Therapy Products
during the Term.
2.6. "DIRECT MANUFACTURING COST" means (a) costs directly attributable to
manufacturing, quality assurance and quality control related to a unit
of product (i.e., those costs which vary with production), including,
but not limited to, direct labor and benefit expenses for
manufacturing, and consumable bulk and other production materials, as
determined in accordance with generally accepted cost accounting
practices in the country of manufacture, plus (b) fixed manufacturing
overhead costs allocable to the product based on the actual percentage
utilization (including start-up and shut-down time) of the capacity of
the manufacturing facility, including, but not limited to, direct
benefit and labor expenses for technical services and support
services, depreciation, maintenance and repairs and insurance costs
associated with such utilization of the manufacturing facility, as
determined in accordance with generally accepted cost accounting
practices in the country of manufacture. Without limiting the
generality of the foregoing, Direct Manufacturing Cost shall be deemed
to include (x) the full cost associated with quality control samples,
retention samples, manufacturing losses and production rejects and (y)
payments (including, without limitation, royalties, option fees or
license fees) made to one or more third parties to obtain a license or
similar right in the absence of which manufacture could not be legally
undertaken.
<PAGE> 4
Page 4 of 37
2.7. "DISTRIBUTOR" means a third party which is not an Affiliate or
Sublicensee of a Party and which is a distributor, wholesaler or
other entity purchasing Factor VIII Gene Therapy Products from a
Party or an Affiliate or Sublicensee for resale.
2.8. "FACTOR VIII" means the protein product expressed from the Factor
VIII Gene.
2.9. "FACTOR VIII GENE" means the DNA sequences covered by any claim
in U.S. Patents 4,757,006 and 4,868,112, together with any and
all muteins, allelic variations, recombinant analogues,
corresponding RNA and other variants thereof or therefrom,
whether made by GI or TKT.
2.10. "FACTOR VIII GENE THERAPY PRODUCTS" means any product developed
by or on behalf of TKT which incorporates or utilizes the
Licensed Rights in the Licensed Field, whether such Licensed
Rights are used in whole or in part, or are used as a component
part, of the Factor VIII Gene Therapy Products, or are used in
conjunction with such Factor VIII Gene Therapy Products.
2.11. "FACTOR VIII LICENSE" means the license granted by GI to TKT in
Section 3.1 below.
2.12. "FACTOR VIII LICENSE FEE" means the license fee set forth in
Section 3.4 below.
2.13. "FDA" means the United States Food and Drug Administration.
2.14. "GENE THERAPY FIELD" means the genetic modification of human
somatic cells by the introduction of exogenous DNA or RNA into
those somatic cells for the purpose of expressing protein in vivo
for the treatment or prevention of disease or genetic defect.
2.15. "GI TERRITORY" means the countries, territories and possessions
listed in Schedule 2.15 to this Agreement.
2.16. "GMP" means the then-current Good Manufacturing Practice
regulations of the FDA as described in the United States Code of
Federal Regulations or any successor regulations and any similar
or equivalent regulations in the European Community or Japan.
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
2.17. "IND" means an Investigational New Drug application or its
equivalent for initiating clinical trials in the United States or
any corresponding foreign application, registration, or
certification.
2.18. "LICENSED FIELD" means the specific area of the Gene Therapy
Field involving treatment for hemophilia A by insertion of the
Factor VIII Gene into human somatic cells by the following
technologies: *************************************************
*********************************************************** or
*********. Licensed Field does not include the
*****************************.
2.19. "LICENSED RIGHTS" means the Factor VIII Gene, Factor VIII, the
Licensed Patent Rights, the Licensed Technology, or any
combination of the above.
2.20. "LICENSED PATENT RIGHTS" means the following patent rights:
Full-length Gene US 4,757,006
B-domain Deleted Gene US 4,868,112
Licensed Patent Rights shall include any reissues, extensions (or
other, governmental acts which effectively extend the period of
exclusivity by the patent holder), substitutions, confirmations,
registrations, revalidations, additions, continuations,
continuations-in-part, divisions or foreign applications and
counterparts of or to the foregoing patent rights.
2.21. "LICENSED TECHNOLOGY" means GI's information, data, trade
secrets, processes, inventions, improvements and know-how related
to the technology described in the Licensed Patents and any
future information, patent rights, or know-how arising out of,
and during the term of, the work undertaken by GI pursuant to
this Agreement that relates solely, or is reasonably necessary,
to the use of the Factor VIII Gene Therapy Products in the
Licensed Field.
2.22. "MILES RIGHTS" means the non-exclusive patent license from GI to
Miles, Inc. in the agreement dated as of December 19, 1988.
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2.23. "NET SALES" means the aggregate United States dollar equivalent
of gross revenues derived by or payable to a Party, its
Affiliates and Sublicensees from or on account of the sale or
distribution of Factor VIII Gene Therapy Products to third
parties, less (a) reasonable credits or allowances, if any,
actually granted on account of price adjustments, recalls,
rejection or return of items previously sold, (b) excises, sales
taxes, value added taxes, consumption taxes, duties or other
taxes imposed upon and paid with respect to such sales (excluding
income or franchise taxes of any kind) and (c) separately
itemized insurance and transportation costs incurred in shipping
Factor VIII Gene Therapy Products to such third parties. No
deduction shall be made for any item of cost incurred by a Party,
its Affiliates or Sublicensees in preparing, manufacturing,
shipping or selling Factor VIII Gene Therapy Products except as
permitted pursuant to clauses (a), (b) and (c) of the foregoing
sentence. Net Sales shall not include any transfer between a
Party and any of its Affiliates or Sublicensees for resale.
If a Party or an Affiliate or Sublicensee sells Factor VIII Gene
Therapy Products to a Distributor, the gross revenues derived by
or payable to that Party or the applicable Affiliate or
Sublicensee on account of such sale shall be the gross revenues
received by the Party and/or the applicable Affiliate or
Sublicensee from the sale of Factor VIII Gene Therapy Products to
the Distributor. If a Party or an Affiliate or Sublicensee sells
Factor VIII Gene Therapy Products to a Distributor, Net Sales
shall be calculated from the gross revenues received by that
Party and/or the applicable Affiliate or Sublicensee from the
sale of Factor VIII Gene Therapy Products to the Distributor.
In the event that a Party or any of its Affiliates or
Sublicensees shall make any transfer of Factor VIII Gene Therapy
Products to third parties for other than monetary value, such
transfer shall be considered a sale hereunder for accounting and
royalty purposes. Net Sales for any such transfers shall be
determined on a country-by-country basis and shall be the average
price of "arms length" sales by that Party, its Affiliates or
Sublicensees in such country during the royalty reporting period
in which such transfer occurs
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
or, if no such "arms length" sales occurred in such country
during such period, during the last period in which such "arms
length" sales occurred. If no "arms length" sales have occurred
in a particular country, Net Sales for any such transfer in such
country shall be the average price of "arms length" sales in all
countries in the selling Party's assigned territory.
Notwithstanding the foregoing, no transfer of Factor VIII Gene
Therapy Products for testing, pre-clinical, clinical or
developmental purposes or as samples shall be considered a sale
hereunder for accounting and royalty purposes.
In the event a Factor VIII Gene Therapy Product is incorporated
into a service which is offered to end-users, in calculating Net
Sales the monetary value of such service component shall be
deducted from the price to the end-user for such product/service.
For purposes of this Section, the monetary value of the service
component shall be the cost to GI or TKT, as the case may be, in
providing that service plus one hundred percent (100%) of such
costs.
2.24. "PARTY" means GI or TKT; "PARTIES" means GI and TKT.
2.25. "PLA" means a Product License Application or its equivalent in
the United States or any corresponding foreign application,
registration, or certification.
2.26. "RESEARCH" means (a) development of non-viral DNA insertion
technologies for the purpose of inserting the Factor VIII Gene
into somatic cells; (b) research relating to insertion of the
Factor VIII Gene into target cells; (c) verification of in vitro
expression of the Factor VIII Gene by such target cells; (d)
application of the TKT Rights to increase in vitro expression of
the Factor VIII Gene by such target cells; (e) administration to
non-human animals of the target cells into which the Factor VIII
Gene has been transfected; and (f) evaluation of the safety and
efficacy of the Factor VIII Gene's expression in non-human animal
subjects.
2.27. ******************************* means the specific field that
would have been part of the Licensed Field were it not for the
exclusion set forth in Section 2.18 above, in which any
****************** containing
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
***************************************************
*********************************** the Factor VIII Gene and
which are **************************************** is used for
the purpose of ********** Factor VIII *******.
2.28. "SUBLICENSEE" means a third party to whom a Party has granted a
sublicense to develop, manufacture, use, distribute and/or sell
the Factor VIII Gene Therapy Products.
2.29. "TKT TERRITORY" means the rest of the world outside the GI
Territory.
2.30. "TKT PATENT RIGHTS" means any and all patents and patent
applications owned or licensed by TKT in which TKT has a
licensable interest and which exists as of the date of this
Agreement or which comes into existence during the term of this
Agreement, which in TKT's reasonable and good faith judgement are
necessary and desirable for GI and its Affiliates to perform
under this Agreement.
TKT Patent Rights shall include any reissues, extensions (or
other governmental acts which effectively extend the period of
exclusivity by the patent holder), substitutions, confirmations,
registrations, revalidations, additions, continuations,
continuations-in-part, divisions or foreign counterparts of or to
the foregoing patent rights.
2.31. "TKT RIGHTS" means any of the TKT Patent Rights or the TKT
Technology, or both.
2.32. "TKT TECHNOLOGY" means TKT's information, data, trade secrets,
processes, inventions, improvements and know-how related to the
technology described in the TKT Patent Rights and any future
information, patent rights, or know-how arising out of, and
during the term of, the work undertaken by TKT pursuant to this
Agreement that relates solely, or is reasonably necessary, to the
use of the Factor VIII Gene Therapy Products in the Licensed
Field.
2.33. "TOOLE INTERFERENCE" means Capon et al. v. Kuo et al. v. Toole et
al., Interference No. 102,331, which, if lost by GI, would result
in the loss of the material
<PAGE> 9
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benefit of the claims in U.S. Patent No. 4,757,006 included in
the Licensed Patent Rights.
3. LICENSE FROM GI TO TKT.
3.1. GRANT. Subject to the fulfillment of the terms and conditions of
this Agreement, including without limitation (i) the preexisting
Miles Rights and (ii) with respect to the full-length sequence to
the Factor VIII Gene only, Section 3.2 below and a decision in
GI's favor in the Toole Interference, GI grants to TKT:
a. a non-exclusive license under the Licensed Patent Rights;
and
b. a non-exclusive license to use the Licensed Technology,
without any right to grant sublicenses (other than the right to
contract with third parties to make Factor VIII Gene Therapy
Products for distribution and sale by TKT (or its Distributors)
under Sections 5.3 and 7.1 below and the right to sublicense
Distributors under Section 8.3 below) and without any obligation
to pay royalties (other than those obligations set forth in
Section 3.3 below), for the sole and exclusive purposes,
restricted to the Licensed Field, of (i) performing preclinical
trials on, developing, making, having made and using Factor VIII
Gene Therapy Products worldwide, (ii) performing clinical trials
and obtaining regulatory approvals on, and distributing and
selling Factor VIII Gene Therapy Products only in the TKT
Territory and (iii) selling Factor VIII Gene Therapy Products to
GI and its Affiliates and Sublicensees for marketing,
distribution and sale in the GI Territory. The license granted
pursuant to Section 3.1.a. shall continue in effect until the
expiration of the last patent licensed to TKT hereunder. The
license granted pursuant to Section 3.1.b. shall continue in
effect for twelve (12) years from the date of first commercial
sale of Factor VIII Gene Therapy Products within the TKT
Territory; provided, however, TKT shall have a renewable right to
extend such license for successive twelve (12) year terms on
terms that are substantially the same as those contained in this
Agreement, by delivery of written notice to GI.
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
3.2. RIGHT TO SETTLE CLAIMED RIGHTS. GI's grant to TKT of the Factor
VIII License in Section 3.1 above is subject to the prior rights,
if any, asserted by Baxter Healthcare Corporation ("Baxter") to
have been granted by GI to Baxter and its affiliates to make, use
and sell Factor VIII gene therapy products which use the
full-length sequence of the Factor VIII Gene (the "Claimed
Rights"). If, in the sole opinion of GI's patent counsel, Baxter
has asserted a colorable claim to the Claimed Rights, GI may
settle such claim by conceding to Baxter that it and its
affiliates have the right to make, use and sell Factor VIII gene
therapy products which use the full-length sequence of the Factor
VIII Gene. In the event of such settlement, the Licensed Patent
Rights thereafter shall not include such Claimed Rights, to the
extent such Claimed Rights are acknowledged, as part of such
settlement, to have been granted to Baxter. Any such settlement
by GI shall not give rise to a claim by TKT against GI for breach
of this Agreement, including without limitation, any of the
representations and warranties contained herein, or for any other
cause of action.
3.3. TKT RIGHTS LN GI TERRITORY. In the event that GI, its Affiliates
or Sublicensees:
a. have not filed, within eighteen (18) months of TKT having
filed a PLA for a Factor VIII Gene Therapy Product with
either *******, the ************************** or the
*********************************, a marketing
authorization application for a Factor VIII Gene Therapy
Product with ******************* (for submission to the
****); or
b. if approval is obtained in a country in the GI Territory,
elect not to market and sell that Factor VIII Gene Therapy
Product in that country; or
c. if approval is obtained in a country in the GI Territory,
fail to make a commercial sale of that Factor VIII Gene
Therapy Product within six (6) months following final
commercial approval in that country; or
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
d. if approval is obtained in a country in the GI Territory,
fail to use commercially reasonable efforts to market that
Factor VIII Gene Therapy Product in that country;
then TKT shall have the right itself or through one or more
Affiliates or Sublicensees to make, use and sell that Factor VIII
Gene Therapy Product in that country (or, with respect to
Subsection 3.3(a), above, in ***********************************
***) and the terms of the Factor VIII License shall be deemed to
permit such manufacture and, notwithstanding Section 3.l(iii)
above, the use and sale of such Factor VIII Gene Therapy Product
by TKT (and such Affiliates and Sublicensees) in that country.
TKT shall pay to GI **************** of Net Sales of Factor VIII
Gene Therapy Products sold by TKT or its Affiliate or Sublicensee
in such country. In those countries where another licensee has
been given rights to the same Licensed Field as TKT, TKT's
obligations to pay royalties to GI under this Section 3.3 shall
be *************************** of Net Sales. Royalties which
have accrued in any calendar quarter shall be payable within
sixty (60) days of the end of such calendar quarter. Royalties
shall be payable by wire transfer of good and immediately
available funds to a bank and account, as specified in writing by
GI, or by bank check or by any other means agreed upon by the
Parties. Each royalty payment shall be accompanied by a report
for the applicable calendar quarter setting forth, in reasonable
detail, the Factor VIII Gene Therapy Products sold and the Net
Sales value thereof.
3.4. FACTOR VIII LICENSE FEE.
a. PAYMENT. In consideration of the Factor VIII License, TKT
will pay to GI a Factor VIII License Fee in the amount of
**************************************, payable within ten
(10) days of the Effective Date, by wire transfer of good
and immediately available funds to a bank and account, as
specified in writing by GI, or by bank check or by any other
means agreed upon by the Parties.
b. REFUND. GI will refund to TKT the Factor VIII License Fee
upon achievement by TKT of Milestone I as set forth on
Schedule 13.2. This refund shall
<PAGE> 12
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be paid by GI to TKT, without interest, by wire transfer of
good and immediately available funds to a bank and bank
account, as specified in writing by TKT, or by bank check or
by any other means agreed upon by the Parties, when due. In
the event TKT fails to achieve Milestone I as set forth on
Schedule 13.2, the Factor VIII Licensee Fee shall become
non-refundable.
3.5. REPRESENTATIONS AND WARRANTIES. GI hereby represents and warrants
to TKT that without special inquiry (a) it has title to, and the
right to license under this Agreement, the Licensed Patent
Rights; (b) the Licensed Patent Rights have not been invalidated;
(c) no legal proceedings are pending, except for the Toole
Interference, which could result in the loss of the material
benefit of the claims in U.S. Patent No. 4,757,006 included in
such Licensed Patent Rights; and (d) it is not aware of any other
facts (other than those asserted in the Toole Interference) that
would result in the loss or invalidation of the claims contained
in either of the U.S. patents included in such Licensed Patent
Rights (it being understood that such factual determination
involves difficult matters of law as applied to any facts and
that therefore the results may not be capable of accurate
prediction).
4. GRANTS OF RIGHTS FROM TKT TO GI.
4.1. GRANT OF TKT RIGHTS. Subject to the terms and conditions of this
Agreement, TKT grants to GI and its Affiliates:
a. a non-exclusive, royalty-free license under the TKT Patent
Rights; and
b. a non-exclusive, royalty-free license to use the TKT
Technology,
including the right to grant sublicenses to such third parties as
are approved by TKT (such approval not to be unreasonably
withheld or delayed), for the sole and exclusive purpose,
restricted to the Licensed Field, of performing clinical trials
and obtaining regulatory approvals on, and distributing and
selling Factor VIII Gene Therapy Products in the GI Territory.
<PAGE> 13
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Pursuant to Section 7.1, GI has certain rights to manufacture
Factor VIII Gene Therapy Products. GI also may be required to
supplement TKT's Research with its own research in order to
satisfy the regulatory requirements of certain countries in the
GI Territory. Therefore, in addition to the licenses granted in
subsections (a) and (b) of this Section, TKT grants to GI and its
Affiliates:
c. a non-exclusive, royalty-free license under the TKT Patent
Rights; and
d. a non-exclusive, royalty-free license to use the TKT
Technology, including the right to grant sublicenses to such
third parties as are approved by TKT (such approval not to
be unreasonably withheld or delayed), for the sole and
exclusive purpose of developing, making, using, performing
pre-clinical and clinical trials and obtaining regulatory
approvals on, Factor VIII Gene Therapy Products worldwide,
to the extent such rights are necessary for GI, its
Affiliates or Sublicensees to exercise such rights to
manufacture Factor VIII Gene Therapy Products or to satisfy
such research or regulatory requirements.
The licenses granted pursuant to Sections 4.1.a. and 4.1.c. shall
continue in effect until the expiration of the last patent
licensed to GI hereunder. The licenses granted pursuant to
Sections 4.1.b. and 4.1.d. shall continue in effect for twelve
(12) years from the date of first commercial sale of Factor VIII
Gene Therapy Products outside the TKT Territory; provided,
however, GI shall have a renewable right to extend such licenses
for successive twelve (12) year terms on terms that are
substantially the same as those contained in this Agreement, by
delivery of written notice to TKT.
4.2. TKT AGREEMENTS WITH THIRD PARTIES.
a. AGREEMENTS. To the extent that any TKT Rights licensed to GI
under this Agreement are licensed to TKT by a third party, a
copy of the third party agreement granting those rights will
be delivered to GI. With GI's prior written consent, the
sublicense from TKT to GI then will be subject to the terms,
restrictions and obligations of the
<PAGE> 14
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third party agreement. In such case, GI will be bound by and
perform all of the obligations, terms and conditions
applicable to a sublicensee under the third party agreement.
b. THIRD PARTY ROYALTIES. In the event GI accepts a sublicense
under Section 4.2(a) above to TKT Rights which are licensed
by TKT from a third party, GI will pay directly or reimburse
TKT for any royalties due to such third party under the
terms of the applicable license agreement which arise from
the sales of Factor VIII Gene Therapy Products in the GI
Territory, which sales, but for that license, would infringe
such third party's rights. GI and TKT will agree on royalty
reporting and payments provisions for this purpose at the
time the Parties enter into supply agreement for any such
products. In no event shall the royalty rate payable by GI
exceed the royalty rate payable by TKT in the TKT Territory
for such rights.
5. PRODUCT DEVELOPMENT AND CLINICAL SUPPLY.
5.1. OBLIGATIONS OF GI. GI agrees to use commercially reasonable efforts,
consistent with prudent business practice, to:
a. supply TKT with sufficient quantities of the Factor VIII Gene and
to disclose to TKT, on an on-going basis, in writing, all
pertinent scientific data in GI's possession, as is necessary for
TKT to perform its responsibilities hereunder; and
b. upon TKT's request, provide, at GI's own expense, collaborative
assistance on the optimization of Factor VIII Gene insertion and
expression, with the scope and level of GI's assistance subject
to prior agreement by the Parties.
5.2. OBLIGATIONS OF TKT. TKT agrees, at its own expense, to use
commercially reasonable efforts, consistent with prudent business
practice, to:
a. research and develop Factor VIII Gene Therapy Products which the
Parties believe will be suitable for obtaining regulatory
approval to
<PAGE> 15
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
develop, use, distribute and sell the Factor VIII Gene Therapy
Products;
b. subject to Section 5.3, supply itself or through a third party
all Factor VIII Gene Therapy Products reasonably required by GI
for use in its research, pre-clinical and clinical activities
hereunder;
c. subject to Section 5.3, prepare, file, and diligently prosecute
by itself or through a third party all governmental applications
necessary to obtain approvals of manufacturing and quality
control processes for manufacture of each Factor VIII Gene
Therapy Product for use in clinical trials; and
d. disclose to GI, on an on-going basis, in writing, all material
laboratory, animal, pre-clinical, manufacturing and other
scientific data in TKT's possession relating to the Research and
the manufacture of each of the Factor VIII Gene Therapy Products
for pre-clinical and clinical trials, which is necessary to
support GI's rights and obligations under this Agreement.
Except as otherwise provided in the clinical supply agreement, GI's
sole and exclusive remedy for TKT's failure to meet its obligations
under Subsection 5.2(b) and (c) is for GI, its Affiliates and
Sublicensees to manufacture and/or have manufactured their clinical
and commercial requirements for Factor VIII Gene Therapy Products for
sale in the GI Territory.
Upon execution, the terms and conditions of the clinical supply
agreement will supersede the terms and conditions of Subsections
5.2(b) and (c).
5.3. CLINICAL SUPPLY. TKT shall have the right and obligation to supply GI,
its Affiliates and Sublicensees with one hundred percent (100%) of
their requirements of each Factor VIII Gene Therapy Product. Factor
VIII Gene Therapy Products supplied by TKT for preclinical and
clinical purposes pursuant to the foregoing right shall be supplied at
TKT's Direct Manufacturing Cost, F.O.B. TKT's manufacturing plant,
subject to reasonable and customary GI audit rights.
**************************************************
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
*******************************************************************
************************************************, the Parties shall
negotiate and enter into a clinical supply agreement (the "Clinical
Supply Agreement") with respect to such Factor VIII Gene Therapy
Product. The Clinical Supply Agreement shall provide that such product
shall be manufactured in accordance with GMP and that the product and
manufacturing process specifications shall meet such other mutually
agreed upon written specifications which are necessary to comply with
the applicable requirements of the FDA, the CPMP and the Canadian
Health Protection Bureau for clinical testing and for use in Core
Clinical Trials for ultimate product approval. In addition, the
Clinical Supply Agreement shall, at a minimum, contain terms regarding
quarterly twelve-month rolling forecast procedures, order and delivery
times, minimum and maximum quantities, warranties, indemnities for
product liability, guaranteed supply, termination conditions,
conditions under which GI or its Affiliates or Sublicensees may
manufacture, equitable allocation of shortages of supply, and other
usual and customary terms. The Clinical Supply Agreement also shall
contain a commitment as to the timing and plans for the scale-up and
development of commercial manufacturing capacity which is sufficient
to meet the supply requirements anticipated under Section 7.1.
In addition, the Clinical Supply Agreement shall provide that in the
event TKT is unable to manufacture a Factor VIII Gene Therapy Product
to meet GI's (and its Affiliates' and Sublicensees') good faith
forecasted clinical supply requirements, TKT shall promptly notify GI.
GI shall have the right to give **************** notice of its intent
to manufacture. During this *************** period, TKT shall provide
GI with a plan to meet GI's requirements in as timely a manner as
possible. Should these plans still not meet
***************************** of GI's forecasted clinical supply
requirements over a ******** period, GI shall have the right to put in
place manufacturing capacity, internally or through its Affiliates,
Sublicensees or third parties, ********************************* of
its ************************************************************
*****************************************************; provided,
however, TKT shall have the right to approve GI's selection of third
party contract manufacturers, which approval shall not be unreasonably
withheld or
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
delayed. Should such clinical supply capacity be put in place by GI,
its Affiliates, Sublicensees or third parties, GI or its Affiliates,
Sublicensees or third parties shall then have the right to
manufacture, or to have manufactured, for ongoing commercial supply,
(a) the production level put into place by GI, its Affiliates,
Sublicensees or third parties to meet ************************* of
their ********************************** in any given year of the
clinical trials or (b) if triggered under Section 7.1 below, any
higher production level specified thereunder.
In the event that the Parties have not entered into the Clinical
Supply Agreement with respect to a Factor VIII Gene Therapy Product
***************************** to the scheduled completion of Milestone
**** on Schedule 13.2, senior executives of both Parties shall meet
promptly following a notice from either Party in order to discuss and
resolve, within sixty (60) days, the outstanding issues facing the
Parties. If the Parties fail to reach agreement during this sixty (60)
day period, the senior executive representatives of both Parties shall
meet promptly with a mediator acceptable to both Parties in order to
continue to discuss and resolve, within thirty (30) additional days,
the outstanding issues facing the Parties. The costs of such mediation
will be borne equally by the Parties. If the Parties, with the
assistance of the mediator, fail to reach agreement during this
additional thirty (30) day period, the Parties shall enter into
binding arbitration with respect to the outstanding issues facing the
Parties, in accordance with the arbitration provisions set forth in
Schedule 5.3 of this Agreement.
6. COLLABORATION IN CLINICAL TRIALS AND REGULATORY REGISTRATION.
6.1. CO-MANAGEMENT. TKT and GI will co-manage the clinical development and
regulatory registration of the Factor VIII Gene Therapy Products
worldwide. GI shall have primary responsibility for clinical
development and registration activities in the GI Territory; TKT shall
have primary responsibility for such activities in the TKT Territory.
Each Party will advise the other of its clinical development and
regulatory registration plans on a timely basis, with the intention,
but not the obligation, of soliciting the
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
other Party's comments on such plans prior to taking significant
actions to effectuate such plans.
6.2. PRODUCT COORDINATION COMMITTEE. No later than ********************
******************************************************************
*******************************, the Parties shall form a Product
Coordination Committee (or "PCC") for each Factor VIII Gene Therapy
Product. The goal of the PCC is to facilitate communication and
cooperation between the Parties in their clinical and regulatory
activities. The PCC shall consist of four (4) coordinators, two (2) of
which shall be designated by GI and two (2) of which shall be
designated by TKT. Communications between the Parties with respect to
the clinical development and regulatory registration of a Factor VIII
Gene Therapy Product shall be directed to each Party's respective
coordinators. Each Party will notify the other in writing of the
individuals it appoints as its coordinators for a Factor VIII Gene
Therapy Product and may replace its coordinators at any time by giving
written notice to the other Party. The PCC will meet at least once per
calendar quarter to review the progress of the Parties with respect to
its Factor VIII Gene Therapy Product.
6.3. PCC SERVES IN ADVISORY CAPACITY ONLY. The PCC will serve in an
advisory capacity only. TKT will retain the final authority to make an
clinical and regulatory decisions, in its own discretion, for clinical
trials conducted, and regulatory registrations sought, in the TKT
Territory; GI will retain the final authority to make all such
decisions in the GI Territory.
6.4. CLINICAL DATA AND REGULATORY FILINGS. With respect to each Factor VIII
Gene Therapy Product, each Party shall make available to the other all
of its clinical data and regulatory filings free of charge. The
Parties shall discuss and coordinate the further exchange of
information and data as is necessary to obtain and maintain regulatory
approval of the Factor VIII Gene Therapy Products. Each Party shall
have a royalty-free, non-exclusive license, with the right to
sublicense to third parties upon the consent of the other Party, which
consent shall not be unreasonably withheld or delayed, to use an of
the data and information furnished under this Section for the sole and
exclusive purposes of conducting clinical
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
testing and obtaining or maintaining regulatory approval of the
relevant Factor VIII Gene Therapy Product, in the TKT Territory in the
case of TKT, and in the GI Territory in the case of GI. Each Party
agrees, to the extent practical, to provide the other Party with the
timely opportunity to review and comment on an regulatory filings and
material correspondence with regulatory agencies. Each Party shall
have the right to attend meetings the other Party has with regulatory
authorities which relate to the Factor VIII Gene Therapy Products.
6.5. COSTS. TKT and GI will agree upon budgets for, and will share
***************************************************************
**************************), the costs of, the Core Clinical Trials
and the initial regulatory registration of the Factor VIII Gene
Therapy Products in the United States, Canada and the European
Community. Each Party shall have the right to audit the other Party's
costs for the Core Clinical Trials. The Parties will separately bear
the costs of any Phase IV, post-marketing and other clinical trials
and any subsequent regulatory registration activities resulting
therefrom. The costs of clinical trials and regulatory registrations
in any country other than the United States, Canada and - European
Community countries shall be borne by the Party with distribution
rights in that country, as provided for in Sections 8.1 and 8.2 below.
7. COMMERCIAL MANUFACTURE AND SUPPLY.
7.1. COMMERCIAL SUPPLY AGREEMENT. The Parties shall negotiate and enter a
separate commercial supply agreement for each Factor VIII Gene Therapy
Product within ***************************************************
*************. Pursuant to this commercial supply agreement, TKT shall
use commercially reasonable best efforts, consistent with prudent
business practice, to (a) develop, at its own expense, the capability
to manufacture sufficient quantities of the Factor VIII Gene Therapy
Products to meet the commercial requirements of the Parties under this
Agreement, (b) prepare, file, and diligently prosecute all
governmental applications necessary to obtain approvals of its
manufacturing and quality control processes for commercial sale of the
Factor VIII Gene Therapy Products, and (c) supply GI and its
Affiliates
<PAGE> 20
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
and Sublicensees with *********************************************
*******************************************************************
******************************************* at the price set forth in
Section 7.2, below. In addition, each supply agreement shall, at a
minimum, contain terms regarding quarterly twelve-month rolling
forecast procedures, order and delivery times, minimum and maximum
quantities, warranties, indemnities for product liability, estimated
payments and reconciliations, guaranteed supply, termination
conditions, conditions under which GI or its Affiliates or
Sublicensees may manufacture, equitable avocation of shortages of
supply, and other usual and customary terms. In particular, in the
event TKT is unable to manufacture a Factor VIII Gene Therapy Product
to meet GI's (and its Affiliates' and Sublicensees') good faith
forecasted requirements, TKT shall promptly notify GI. *********
********************************************************************
********************************************************************
********************************************************************
********************************************************************
*******************************************************************
*****************************************************************
*****************************************************************
****************************************************************
*****************************************************************
****************************************** provided, however, TKT
shall have the right to approve GI's
***********************************************, which approval shall
not be unreasonably withheld or delayed. Should
************************************ its Affiliates, Sublicensees or a
third party, GI or its Affiliates or Sublicensees shall then have ***
*****************************************************************
***********************************************************
*****************************************************************
************************************************************
*********************************************
Factor VIII Gene Therapy Products for the ***********************
***************************************************************
*******************************************************, regardless
of TKT's then-current or future ability to ************************.
In addition, GI always shall have the right to **********************
********************************************************************
********************************************** results in a continuing
<PAGE> 21
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
**************************************************************
****************.
7.2. PRICING. The commercial supply agreement shall include provisions
which incorporate the following pricing principles.
*****************************************
*************************************************
*****************************************************
************************; provided that this price shall be adjusted
if it does not provide TKT with at
*************************************************
************************************************************* on
sales of Factor VIII Gene Therapy Products by TKT to GI, its
Affiliates or Sublicensees. This adjustment shall increase the
applicable supply price to a new supply price which provides TKT
**************************************************************
**************************************************
***************************************************
**************************************************
******************************************************
*******************************, then the supply price shall be
adjusted to a level which provides the same percentage margin to both
parties. Upon expiration of the Licensed Patent Rights (insofar as the
Licensed Patent Rights relate to the Licensed Field), the Parties will
renegotiate in good faith the foregoing pricing principles and the
pricing provisions of the commercial supply agreement to appropriately
reflect such expiration.
7.3. DISPUTE RESOLUTION. In the event that the Parties (a) have not entered
into a commercial supply agreement with respect to a Factor VIII Gene
Therapy Products within one (1) year after initiation of Milestone II,
or (b) are deadlocked with respect to expiration of the Licensed
Patent Rights or the renegotiation of the pricing provisions of the
commercial supply agreement, as set forth in the last sentence of
Section 7.2 above, senior executives of both Parties shall meet
promptly following a notice from either Party in order to discuss and
resolve, within sixty (60) days, the outstanding issues facing the
Parties. If the Parties fail to reach agreement during this sixty (60)
day period, the senior executive representatives of both Parties shall
meet promptly with a mediator acceptable to both Parties in order to
continue to discuss and resolve, within thirty (30) additional days,
the
<PAGE> 22
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outstanding issues facing the Parties. The costs of such mediation
will be borne equally by the Parties. If the Parties, with the
assistance of the mediator, fail to reach agreement during this
additional thirty (30) day period, the Parties shall enter into
binding arbitration with respect to the outstanding issues facing the
Parties, in accordance with the arbitration provisions set forth in
Schedule 5.3 of this Agreement.
8. MARKETING AND DISTRIBUTION.
8.1. TKT TO MARKET AND DISTRIBUTE IN TKT TERRITORY. TKT, its Affiliates and
Sublicensees will have the exclusive right to market and distribute
the Factor VIII Gene Therapy Products in the TKT Territory. GI shall
not enter into any agreements with third parties which would prevent
TKT from exercising its rights under this Section 8.1.
8.2. GI TO MARKET AND DISTRIBUTE IN GI TERRITORY. Subject to the terms and
conditions of this Agreement, GI, its Affiliates and Sublicensees will
have the exclusive right to market and distribute the Factor VIII Gene
Therapy Products in the GI Territory. TKT shall not enter into any
agreements with third parties (including, without limitation,
in-license agreements with third parties, as described in Section
4.2(a) above) which would prevent GI from exercising its rights under
this Section 8.2.
8.3. SUBLICENSING AND DISTRIBUTION RIGHTS. Each Party will have the right
to sublicense to an Affiliate or to a Distributor, whether wholly or
through a co-marketing or co-promotion arrangement, its marketing
and/or distribution rights under this Agreement; provided, however,
the Party intending to sublicense its marketing and/or distribution
rights shall first notify the other Party in writing of such
intention, and other Party shall have a right of first refusal,
exercisable within sixty (60) days of receipt of such written notice,
to negotiate for such marketing and/or distribution rights. In the
event the Parties do not execute a final agreement with respect to
such rights within ninety (90) days of exercise of the right of first
refusal, then the Party intending to sublicense its rights shall have
the right to negotiate with a third party with respect to such rights;
provided,
<PAGE> 23
Page 23 of 37
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
however, before entering into an agreement with a third party on terms
more favorable than those offered to the other Party, the Party
intending to sublicense its rights will inform the other Party of the
terms of such proposed agreement and shall allow the other Party a
period of sixty (60) days in which to elect whether to acquire such
rights under such terms as are offered to the third party. This
Section shall not be read to limit GI's right to grant sublicenses
under Sections 4.1, 9.3(d)(ii) and 9.4 of this Agreement.
8.4. COMMERCIALLY REASONABLE EFFORTS. Each Party agrees to use commercially
reasonable best efforts, consistent with prudent business practice, to
diligently market, promote, and detail Factor VIII Gene Therapy
Products in the GI Territory, in the case of GI, and Factor VIII Gene
Therapy Products in the TKT Territory, in the case of TKT, on a
commercial basis after receipt of the necessary approvals for
marketing by applicable government regulatory agencies.
8.5. GI MARKETING OF COMPETITIVE PRODUCT. In the event GI elects to file a
PLA for a gene therapy product competitive with a Factor VIII Gene
Therapy Product in any country, GI will provide TKT on an annual basis
with a detailed plan outlining the promotion programs and detailing
effort GI will devote to the Factor VIII Gene Therapy Product in that
country. TKT shall have the right to propose modifications to the
promotion program and detailing effort for GI to retain its exclusive
right to market in that county for the following year. Should GI not
agree to those modifications, TKT shall have the right to select
itself or a third party as a co-exclusive distributor of the Factor
VIII Gene Therapy Products with GI in that country, provided that TKT
or the third party agrees to provide at least as great a promotional
and detailing effort as requested by TKT and rejected by GI.
*************************************************
****************************************************
*******************************************************
*************************************************.
8.6. GI LICENSES THIRD PARTY. In the event GI licenses the Licensed Rights
to a third party within the Licensed Field (other than an Affiliate or
third party Distributor, as permitted under Section 8.3 above),
<PAGE> 24
Page 24 of 37
TKT shall have the right to select itself or a third party as a
co-exclusive distributor of the Factor VIII Gene Therapy Products with
GI in the GI Territory.
9. INTELLECTUAL PROPERTY RIGHTS.
9.1. LICENSED RIGHTS. GI has developed the Licensed Rights over a
substantial period of time at substantial expense, and the Licensed
Rights are of great importance to GI's business. TKT acknowledges that
GI is and shall at all times remain the owner of the Licensed Rights.
9.2. TKT RIGHTS. TKT has developed the TKT Rights over a substantial period
of time at substantial expense, and the TKT Rights are of great
importance to TKT's business. GI acknowledges that TKT is and shall at
all times remain the owner of the TKT Rights.
9.3. DEVELOPMENTS.
a. OWNERSHIP. Each Party shall own for itself all Developments
conceived, discovered, invented, developed, created, made or
reduced to practice solely by that Party, and each Party shall
have the right to decide whether to seek or continue to seek or
maintain patent protection thereon. The Parties shall jointly own
all Developments conceived, discovered, invented, developed,
created, made or reduced to practice by representatives of both
Parties. Each Party shall be free to exploit its half-interest in
the jointly-developed Developments throughout the world without
the consent of the other Party.
b. FILING AND MAINTENANCE OF PATENTS ON JOINT DEVELOPMENTS. TKT
shall have the right and responsibility to decide whether or not
to seek or continue to seek or maintain patent protection on
jointly-developed Developments in any country in the world, and
shall have the right (jointly in its and GI's names) to-file for,
procure, and maintain patents on any such joint Developments in
any country in the world, with the expenses being borne by TKT.
If TKT elects not to seek or continue to seek or maintain patent
protection on any joint Developments in any country in the world,
GI shall have the right (jointly in its and
<PAGE> 25
Page 25 of 37
TKT's names) to file, procure and maintain in such countries
patents on such joint Developments, with the expenses being borne
by GI. TKT agrees to advise GI of all decisions taken under this
Subsection in a timely manner, in order to allow GI to protect
the Parties' interests in the joint Developments.
c. PATENT COOPERATION. Each Party shall provide the other Party with
copies of all substantive communications from all patent offices
regarding applications or patents on any joint Developments
promptly after the receipt thereof. Each Party shall provide the
other Party with copies of all proposed substantive
communications to such patent offices regarding applications or
patents on any such joint Developments in sufficient time before
the due date in order to enable the other Party an opportunity to
comment on the content thereof. Each Party shall make available
to the other Party or its authorized attorneys, agents, or
representatives, such of its employees whom the other Party in
its reasonable judgment deems necessary in order to assist it in
obtaining patent protection for the joint Developments. Each
Party shall sign or use its best efforts to have signed all legal
documents necessary to file and prosecute patent applications or
to obtain or maintain patents at no cost to the other Party.
d. CROSS LICENSE OF RIGHTS TO SOLELY-DEVELOPED DEVELOPMENTS.
i. GI TO TKT. GI grants to TKT a worldwide, non-exclusive,
royalty-free perpetual right and license, with the right to
grant sublicenses, to GI's interests in GI's
solely-developed Developments, for the purposes set forth in
Section 3.1 above.
ii. TKT TO GI. TKT grants to GI and its Affiliates a worldwide,
non-exclusive, perpetual right and license, with the right
to grant sublicenses to such third parties as are approved
by TKT (such approval not to be unreasonably withheld or
delayed), to TKT's interests in TKT's solely-developed
<PAGE> 26
Page 26 of 37
Developments, for the purposes set forth in Section 4.1
above.
9.4. MANUFACTURING RIGHTS. Pursuant to Section 7.1, GI has certain rights
to manufacture Factor VIII Gene Therapy Products. Therefore, in
addition to the license granted in Subsections 9.3(d)(ii) above, TKT
grants to GI and its Affiliates an non-exclusive, worldwide,
royalty-free, perpetual right and license, with the right to grant
sublicenses, to TKT's solely-developed Developments, solely for the
purposes of developing, making, using, performing pre-clinical and
clinical trials and obtaining regulatory approvals on, Factor VIII
Gene Therapy Products worldwide, to the extent such rights are
necessary for GI, its Affiliates or Sublicensees to exercise such
rights to manufacture Factor VIII Gene Therapy Products.
10. INFRINGEMENT.
10.1. INFRINGEMENT OF TKT RIGHTS.
a. Each Party shall promptly report in writing to the other Party
during the term of this Agreement any (i) known infringement or
suspected infringement of any of the TKT Rights, or (ii)
unauthorized use or misappropriation of any of the TKT Rights by
a third party of which it becomes aware, and promptly shall
provide the other Party with all available evidence supporting
said infringement, suspected infringement, or unauthorized use or
misappropriation.
b. TKT shall have the exclusive right and the obligation to elect
whether or not to initiate an infringement or other appropriate
suit against any third party who at any time has infringed, or is
suspected of infringing, any of or of using without proper
authorization all or any portion of such TKT Rights. Such
election shall be made by TKT in writing no later than ninety
(90) days following written notice to TKT by GI of infringement
pursuant to Subsection (a) above. TKT shall give GI sufficient
advance notice of its intent to file said suit and the reasons
therefor, and shall provide GI with an opportunity to make
suggestions and comments regarding such suit. TKT shall keep GI
promptly informed, and shall from
<PAGE> 27
Page 27 of 37
time-to-time consult with GI regarding the status of any such
suit and shall provide GI with copies of all documents filed in,
and all written communications relating to, such suit.
c. TKT shall have the sole and exclusive right to select counsel for
any suit referred to in Subsection (b) above and shall, except as
provided below, pay all expenses of the suit, including without
limitation attorneys' fees and court costs. TKT and/or its
Affiliates (except as provided below) shall be entitled to retain
any damages, royalties, settlement fees, or other consideration
for infringement resulting therefrom. If necessary, GI shall join
as a party to the suit but shall be under no obligation to
participate except to the extent that such participation is
required as the result of being a named party to the suit. GI
shall offer reasonable assistance to TKT in connection therewith
at no charge to TKT except for reimbursement of reasonable
out-of-pocket expenses incurred rendering such assistance. GI
shall have the right to participate and be represented in any
such suit by its own counsel at its own expense. TKT shall not
settle any such suit involving rights of GI without obtaining the
prior written consent of GI, which consent shall be promptly
given and shall not be unreasonably withheld.
d. TKT's rights and obligations under this Section may be assigned
by TKT to a Sublicensee, however, such assignment shall not
relieve TKT of its obligations to GI under this Section.
10.2. INFRINGEMENT OF THE LICENSED RIGHTS.
a. Each Party shall promptly report in writing to the other Party
during the term of this Agreement any (i) known infringement or
suspected infringement of any of the Licensed Rights, or (ii)
unauthorized use or misappropriation of any Licensed Rights by a
third party of which it becomes aware, and promptly shall provide
the other Party with an available evidence supporting said
infringement, suspected infringement, or unauthorized use or
misappropriation.
<PAGE> 28
Page 28 of 37
b. GI shall have the exclusive right and the obligation to elect
whether or not to initiate an infringement or other appropriate
suit against any third party who at any time has infringed, or is
suspected of infringing, any of such Licensed Rights, or of using
without proper authorization all or any portion of the Licensed
Rights. Such election shall be made by GI in writing no later
than ninety (90) days following written notice to GI by TKT of
infringement pursuant to Subsection (a) above. GI shall give TKT
sufficient advance notice of its intent to file said suit and the
reasons therefor, and shall provide TKT with an opportunity to
make suggestions and comments regarding such suit. GI shall keep
TKT promptly informed, and shall from time-to-time consult with
TKT regarding the status of any such suit and shall provide TKT
with copies of all documents filed in, and all written
communications relating to, such suit.
c. GI shall have the sole and exclusive right to select counsel for
any suit referred to in Subsection (b) above and shall, except as
provided below, pay an expenses of the suit, including without
limitation attorneys' fees and court costs. GI and/or its
Affiliates (except as provided below) shall be entitled to retain
any damages, royalties, settlement fees, or other consideration
for infringement resulting therefrom. If necessary, TKT shall
join as a party to the suit but shall be under no obligation to
participate except to the extent that such participation is
required as the result of being a named party to the suit. TKT
shall offer reasonable assistance to GI in connection therewith
at no charge to GI except for reimbursement of reasonable
out-of-pocket expenses incurred in rendering such assistance. TKT
shall have the right to participate and be represented in any
such suit by its own counsel at its own expense. GI shall not
settle any such suit involving rights of TKT without obtaining
the prior written consent of TKT, which consent shall be promptly
given and shall not be unreasonably withheld.
<PAGE> 29
Page 29 of 37
d. GI's rights and obligations under this Section may be assigned by
GI to an Affiliate or a Sublicensee, however, such assignment
shall not relieve GI of its obligations to TKT under this
Section.
10.3. CLAIMED INFRINGEMENT.
a. In the event that a third party at any time provides written
notice of a claim to, or brings an action, suit, or proceeding
against, either Party or any of their respective Affiliates or
Sublicensees, claiming infringement of its patent rights or
unauthorized use or misappropriation of its know-how, based upon
an assertion or claim arising out of the development, use,
manufacture, distribution, or sale of a Factor VIII Gene Therapy
Product, such Party shall promptly notify the other Party of the
claim or the commencement of such action, suit, or proceeding,
enclosing a copy of the claim and/or an papers served. Each party
agrees to make available to the other party its advice and
counsel regarding the technical merits of any such claim at no
cost to the other party.
b. THE FOREGOING STATES THE ENTIRE RESPONSIBILITY OF THE PARTIES IN
THE CASE OF ANY CLAIMED INFRINGEMENT OR VIOLATION OF ANY THIRD
PARTY'S RIGHTS OR UNAUTHORIZED USE OR MISAPPROPRIATION OF ANY
THIRD PARTY'S KNOW-HOW.
11. CONFIDENTIAL INFORMATION.
11.1. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Each Party shall not
directly or indirectly publish, disseminate or otherwise
disclose, deliver or make available to any person outside its
organization any of the other Party's Confidential Information.
Each Party may disclose the other Party's Confidential
Information to persons within its organization and to its
Affiliates and Sublicensees who/which have a need to receive such
Confidential Information in order to further the purposes of this
Agreement and who/which are bound to protect the confidentiality
of such Confidential Information, as set forth in Section 11.5
below. Each Party may disclose the other Party's Confidential
Information to a governmental authority or by order of
<PAGE> 30
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a court of competent jurisdiction, provided that such disclosure
is subject to all applicable governmental or judicial protection
available for like material and reasonable advance notice is
given to the other Party.
11.2. GI TO DESIGNATE PERSONNEL TO RECEIVE CONFIDENTIAL INFORMATION. GI
will designate a project manager or managers to supervise GI's
responsibilities under this Agreement with respect to each Factor
VIII Gene Therapy Product. Unless permitted by TKT, these project
managers will not have responsibilities for the development, by
GI alone or with third parties, of any product in the Gene
Therapy Field which uses a Factor VIII gene. GI will use
commercially reasonable efforts, consistent with reasonable
business practices, to prevent disclosure of TKT's Confidential
Information by these project managers to other GI personnel who
have responsibilities for the research or clinical development of
any product in the Gene Therapy Field. Notwithstanding the
foregoing, these project managers may disclose TKT's Confidential
Information to senior management at GI who may have access to
information regarding other products in the Gene Therapy Field.
TKT will, to the extent practical, use commercially reasonable
efforts, consistent with reasonable business practices, (a) to
label or identify as "TKT CONFIDENTIAL INFORMATION", at the time
of disclosure, all such information which is disclosed in writing
or other tangible form and (b) reduce to writing or other
tangible form and similarly label, within thirty (30) days of
disclosure, all such information which is disclosed verbally.
11.3. USE OF CONFIDENTIAL INFORMATION. Each Party shall use the other
party's Confidential Information solely for the purposes
contemplated in this Agreement or for such other purposes as may
be agreed upon by the Parties in writing.
11.4. PHYSICAL PROTECTION OF CONFIDENTIAL INFORMATION. The Parties
shall exercise all commercially reasonable precautions to
physically protect the integrity and confidentiality of the other
Party's Confidential Information.
11.5. AGREEMENTS WITH PERSONNEL AND THIRD PARTIES. The Parties have or
shall obtain agreements with all personnel and third parties who
will have access to
<PAGE> 31
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the other Party's Confidential Information which impose
comparable confidentiality obligations as are set forth in this
Agreement on such personnel and third parties.
12. PRODUCT LIABILITY INDEMNIFICATION.
12.1. TKT agrees to defend GI and its Affiliates and Sublicensees,
their agents, directors, officers, employees, and licensors of
rights to a product (the "Indemnitees") (other than in settlement
of a claim of infringement, as described in Sections 10.1 and
10.2 of this Agreement), at TKT's cost and expense, and will
indemnify and hold harmless the Indemnitees from and against any
and all liabilities, losses, costs, damages, fees, or expenses
claimed by or paid to a third party attributable to injury to
persons or damage to property ("Losses") arising out of or in
connection with the making, using, development, testing,
registration, distribution, and/or sale of any product in the TKT
Territory by TKT, it's Affiliates, or permitted sublicensees
(other than GI); provided that such Losses do not arise out of
the gross negligence or willful misconduct of GI.
12.2. GI agrees to defend TKT and its Affiliates and permitted
sublicensees, their agents, directors, officers, employees, and
licensors of rights to a product (other than in settlement of a
claim of infringement, as described in Sections 10.1 and 10.2 of
this Agreement), at GI's cost and expense, and will indemnify and
hold harmless TKT and its Affiliates and permitted sublicensees,
their agents, directors, officers, employees, and licensors of
rights to a product (other than in settlement of a claim of
infringement) from and against any and all liabilities, losses,
costs, damages, fees, or expenses claimed by or paid to a third
party attributable to injury to persons or damage to property
("Losses") arising out of or in connection with the making,
using, development, testing, registration, distribution, and/or
sale of any product in the GI Territory by GI, its Affiliates, or
Sublicensees (other than EKE); provided that such Losses do not
arise out of (i) the gross negligence or willful misconduct of
TKT or (ii) the breach of any GMP or product specification
requirements by TKT in connection with the supply of any clinical
or
<PAGE> 32
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commercial products pursuant to Sections 5.3 and 7.1, for which
GI, its Affiliates or Sublicensees will be indemnified by TKT
under the clinical and commercial supply agreements.
12.3. In the event of any such claim against a Party or its Affiliates
or sublicensees or any of their agents, directors, officers,
employees, or licensors of rights to a product (other than in
settlement of a claim of infringement, as described in Sections
10.1 and 10.2 of this Agreement), the indemnified Party shall
promptly notify the indemnifying Party in writing of the claim
and the indemnifying Party shall manage and control, at its sole
expense, the defense of the claim and its settlement. The
indemnified Party shall cooperate with the indemnifying Party and
may, at its option and expense, be represented in any such action
or proceeding. The indemnifying Party shall not be liable for any
settlements, litigation costs, or expenses incurred by the
indemnified Party without the indemnifying Party's written
consent, such consent to be promptly given and not unreasonably
withheld.
13. TERM AND TERMINATION.
13.1. TERM. This Agreement shall remain in effect until terminated in
accordance with the provisions of this Section 13 or until the
last to expire of any of the licenses granted pursuant to this
Agreement.
13.2. TERMINATION FOR BREACH. Each Party shall be entitled to terminate
this Agreement and the licenses granted hereunder to the other
Party by written notice to the other Party in the event that the
other Party shall be in default of any of its material
obligations hereunder (including, without limitation, TKT's
failure to satisfy the Conditions or meet the Milestones listed
in Schedule 13.2 attached to this Agreement), and shall fail to
remedy any such default within sixty (60) days after notice
thereof by the non-breaching Party. Any such notice shall
specifically state that the non-breaching Party intends to
terminate this Agreement in the event that the breaching Party
shall fail to remedy the default. Upon any termination of this
Agreement pursuant to this Section 13.2, neither Party shall be
relieved of any obligations incurred prior to such termination.
<PAGE> 33
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13.3. DISPOSITION OF FACTOR VIII GENE THERAPY PRODUCTS. Upon any
termination of this Agreement or a license pursuant to Section
13.2 hereof, the terminated party shall, within thirty (30) days
of the effective date of such termination, notify the other Party
in writing of the amount of Factor VIII Gene Therapy Products
which the terminated Party, its Affiliates and Sublicensees then
have completed on hand, the sale of which would, but for the
termination, be subject to the license, and the terminated Party,
its Affiliates and Sublicensees shall thereupon be permitted
during the six (6) months following such termination to sell that
amount of Factor VIII Gene Therapy Products. All sublicenses
granted by a terminated party shall forthwith terminate upon such
termination unless the Sublicensee has not been in default, is
reasonably acceptable to the non-terminated Party, and agrees in
writing to fully comply with the terms and conditions of this
Agreement.
13.4. SURVIVAL OF OBLIGATIONS; RETURN OF CONFIDENTIAL INFORMATION.
Notwithstanding any termination of this Agreement, the
obligations of the Parties under Sections 9, 10, 11, 12, 13 and
14, as well as under any other provisions which by their nature
are intended to survive any such termination, shall survive and
continue to be enforceable. Upon any termination of this
Agreement pursuant to Section 13.2 hereof, each Party shall
promptly return to the other Party all written Confidential
Information, and all copies thereof, of the other Party which is
not covered by a license surviving such termination.
14. MISCELLANEOUS.
14.1. PUBLICITY. Neither Party, nor any of its Affiliates, shall
originate any publicity, news release or other public
announcement, written or oral, relating to this Agreement or the
existence of an arrangement between the Parties, without the
prior written approval of the other Party, which approval shall
not be unreasonably withheld, except as otherwise required by
law. It is expressly understood that nothing in this Section 14.1
shall prevent a Party from making a disclosure in connection with
any required filings with the Securities and Exchange Commission
or in connection with the offering of securities or any
financing. Upon release of information, with approval pursuant to
<PAGE> 34
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this Section 14.1, further release of substantially the same
information shall not require approval under this Section 14.1.
14.2. EXPORT CONTROL. The Parties acknowledge that the export of
technical data, materials, or products is subject to the
exporting Party receiving the necessary export licenses and that
the Parties cannot be responsible for any delays attributable to
export controls which are beyond the reasonable control of either
Party. The Parties agree that regardless of any disclosure made
by the Party receiving an export of an ultimate destination of
any technical data, materials, or products, the receiving Party
will not reexport either directly or indirectly, any technical
data, material, or products without first obtaining the
applicable validated or general license from the United States
Department of Commerce, United States Food and Drug
Administration, and/or any other agency or department of the
United States Government, as required. The receiving Party shall
provide the exporting Party with any information, materials,
certifications, or other documents which may be reasonably
required in connection with such exports under the Export
Administration Act of 1979, as amended, its rules and
regulations, the Federal Food, Drug and Cosmetic Act, and other
applicable export laws.
14.3. CONDUCT OF STUDIES. All studies, research and testing done by or
on behalf of each Party under this Agreement shall be performed
in strict compliance with any applicable federal, state, or local
laws, rules, and regulations governing the conduct of studies,
research, and testing at the site where such studies, research,
and testing are being conducted.
14.4. NO IMPLIED LICENSES. Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force and
effect. No license rights shall be created by implication or
estoppel.
14.5. NO AGENCY. Nothing herein shall be deemed to constitute either
Party as the agent or representative of the other Party, or both
Parties as joint venturers or partners for any purpose. Each
Party shall be an independent contractor, not an employee or
partner of the other Party, and the manner in which each Party
<PAGE> 35
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renders its services under this Agreement shall be within its
sole discretion. Neither Party shall be responsible for the acts
or omissions of the other Party, and neither Party will have
authority to speak for, represent or obligate the other Party in
any way without prior written authority from the other Party.
14.6. NOTICE. All notices required under this Agreement to be given by
one Party to the other shall be in writing and shall be given by
addressing the same to the other at the address or facsimile
number set forth below, or at such other address or facsimile
number as either may specify in writing to the other. All notices
shall become effective when deposited in the United States Mail
with proper postage for first class registered or certified mail
prepaid, return receipt requested, or when delivered personally,
or, if promptly confirmed by mail as provided above, when
dispatched by facsimile.
GI: Genetics Institute, Inc.
87 CambridgePark Drive
Cambridge, Massachusetts 02140
Telecopier (617) 876-5851
Attn: Legal Department
TKT: Transkaryotic Therapies, Inc.
193 Albany Street
Cambridge, Massachusetts 02139
Telecopier (617) 491-7903
Attn: President and CEO
14.7. ASSIGNMENT. This Agreement, and the rights and obligations
hereunder, may not be assigned or transferred, in whole or in
part, by either Party without the prior written consent of the
other Party, except that (a) either Party may assign this
Agreement to an Affiliate, provided that such Party remains
primarily liable and/or responsible for the performance of such
obligations and such Affiliate, and provided further that such
Affiliate agrees to be bound to the terms and conditions of this
Agreement and (b) either Party may transfer this Agreement in
connection with the merger, consolidation or sale of all or
substantially all of that Party's assets.
14.8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the Parties with regard to its
<PAGE> 36
Page 36 of 37
subject matter, and supersedes all previous written or oral
representations, agreements and understandings between the
Parties.
14.9. NO MODIFICATION. This Agreement may be changed only by a writing
signed by the Parties.
14.10. HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not be considered in
construing this Agreement.
14.11. WAIVER. The waiver by either Party of a breach or a default of
any provision of this Agreement by the other Party shall not be
construed as a waiver of any 4 succeeding breach of the same or
any other provision, nor shall any delay or omission on the part
of either Party to exercise or avail itself of any right, power
or privilege that it has or may have hereunder operate as a
waiver of any right, power, or privilege by such Party.
14.12. SURVIVAL. Notwithstanding any termination of this Agreement (in
part or in its entirety), the obligations of the Parties under
Sections 9, 10, 11, 12, 13 and 14, as well as under any other
provisions which by their nature are intended to survive any such
termination, shall survive and continue to be enforceable. Upon
any termination of this Agreement pursuant to Sections 13.2, each
Party shall promptly return to the other Party all written
Confidential Information, and all copies thereof, of the other
Party.
14.13. SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and all other provisions
shall remain in full force and effect. If any of the provisions
of this Agreement is held to be excessively broad or invalid,
illegal or unenforceable in any jurisdiction, it shall be
reformed and construed by limiting and reducing it so as to be
enforceable to the maximum extent permitted by law in conformance
with its original intent. In the event that after such
reformation, a Party's rights or obligations are materially
changed, then such Party may terminate this Agreement.
<PAGE> 37
Page 37 of 37
14.14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their successors
and permitted assigns.
14.15. THIRD PARTIES. None of the provisions of this Agreement shall be
for the benefit of or enforceable by any third party.
14.16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
14.17. APPLICABLE LAW. This Agreement shall in all events and for all
purposes be governed by, and construed in accordance with, the
law of The Commonwealth of Massachusetts without regard to any
choice of law principle that would dictate the application of the
law of another jurisdiction.
IN WITNESS WHEREOF, duly-authorized representatives of the parties have
signed this Agreement as a document under seal as of the Effective Date.
GENETICS INSTITUTE, INC.
APPROVED
By /s/ Gabriel Schmergel AS TO FORM
--------------------------------------
Print Name Gabriel Schmergel GI LEGAL AFFAIRS
--------------------------------------
Title President and Chief Executive Officer BY G.A.C.
-------------------------------------- ---------------
duly authorized
TRANSKARYOTIC THERAPIES, INC.
By /s/ K. Michael Forrest
--------------------------------------
Print Name K. Michael Forrest
--------------------------------------
Title President and Chief Executive Officer
--------------------------------------
duly authorized
<PAGE> 38
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 2.15
GI Territory
************** **************
******* ********
****** *******
****** ******
******* *******
******* ********
******* *******
******* ******
*************** *******
******* ******
********** *********
****** *******
***** **********
******** **********
***** *********
****** *******
********** **********
*********** ************
************* **********
******* *******
****** ******************
****** *******
******* *******
*****************************
<PAGE> 39
Schedule 5.3
Arbitration Provision
In the event the Parties' are unable to enter into a clinical or commercial
supply agreement in a timely manner, as prescribed in Sections 5.3 and 7.3 of
the Agreement, as applicable, the terms and conditions of the applicable supply
agreement will be determined through binding arbitration in Cambridge,
Massachusetts in accordance with the Commercial Rules of Arbitration of the
American Arbitration Association.
The arbitration panel shall be comprised of three (3) arbitrators. Each
Party shall be entitled to appoint one arbitrator. The Parties shall appoint
their respective arbitrators within ten (10) days of the expiration of the time
allotted for mediation in Sections 5.3 or 7.3 of the Agreement, as applicable.
If either Party shall fail to make timely appointment of its arbitrator, the
arbitration shall be heard and decided by the sole arbitrator duly appointed by
the other Party. Where both Parties have timely appointed their respective
arbitrators, the two arbitrators so appointed shall agree on the appointment of
the third arbitrator from the list of arbitrators maintained by the American
Arbitration Association. If the Parties' appointed arbitrators shall fail to
agree, within thirty (30) days from the date both Parties' arbitrators have been
appointed, on the identity of the third arbitrator, then such arbitrator shall
be appointed by the appropriate administrative body of the American Arbitration
Association.
Within ten (10) days of appointment of the full arbitration panel, the
Parties shall exchange their final proposed supply agreements. Within thirty
(30) days of appointment of the arbitration panel, each Party shall submit to
the arbitrators a copy of the proposed agreement which it previously delivered
to the other Party, together with a brief or other written memorandum supporting
the merits of its proposed agreement. The arbitration panel shall promptly
convene a hearing, at which time each Party shall have one (1) hour to argue in
support of its proposed agreement. The Parties will not call any witnesses in
support of their arguments.
The arbitration panel shall select either of the Party's proposed
agreements as the binding final supply agreement to be executed by the Parties.
In making their selection, the arbitrators shall not modify the terms or
conditions of either Party's proposed agreement; nor will the arbitrators
combined provisions from both proposed agreements. In making their selection,
the arbitrators shall consider the terms and conditions of this Agreement, the
relative merits of the proposed agreements and the written and oral arguments of
the Parties. In the event the arbitrators seek the guidance of the law of any
jurisdiction, the law of The Commonwealth of Massachusetts shall govern.
<PAGE> 40
The arbitrators shall make their decision known to the Parties as quickly
as possible by delivering written notice of their decision to both Parties. Such
written notice need not justify their decision. The Parties will execute the
supply agreement selected by the arbitration panel within five (5) days of
receipt of notice of such selection. The decision of the arbitrators shall be
final and binding on the parties, and specific performance may be ordered by any
court of competent jurisdiction.
The Parties will bear their own costs in preparing for the arbitration. The
costs of the arbitrators will be equally divided between the Parties.
<PAGE> 41
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 13.2
Factor VIII Gene Therapy Products Conditions and Milestones
Conditions
I. TKT's manufacture, use or sale of a Factor VIII Gene
Therapy Product does not infringe the valid patent claims
of any third party, as evidenced, on a country-by-country
basis, by the lack of a final decision of a court of
competent jurisdiction to the contrary
II. TKT uses commercially reasonable best efforts, consistent with
prudent business practices, to diligently commercialize the
Factor VIII Gene Therapy Products in the TKT Territory, and
TKT devotes sufficient scientific staff in order to achieve
the Milestones set forth below
Milestones
I. *********************************************************
*********************************************************
*****************************************************
II. *******************************************************
III. *********************************************************
***********************************
<PAGE> 42
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
CONFIDENTIAL
May 30, 1996
Genetics Institute
Legal Department
87 Cambridge Park Drive
Cambridge, MA 02140
Dear Sir:
Re: Collaboration and License Agreement between Genetics Institute,
Inc. and Transkaryotic Therapies, Inc.
This letter is to amend the Collaboration and License Agreement between Genetics
Institute, Inc., and Transkaryotic Therapies, Inc. and dated July 22, 1993, on
the following terms:
In Section 7.2, Pricing, replace the second sentence with the following:
****************************************************************
****************************************************************
***************************************;
In Schedule 13.2 referenced in Section 13.2 replace Milestone **** and Milestone
**** by the following:
Milestone **** *************************************
*****************
Milestone **** *******************************************
***************************************.
Please countersign both copies of this letter and return the enclosed duplicate
copy to me to effectuate this amendment of our agreement.
Very truly yours
TRANSKARYOTIC THERAPIES, INC.
/s/ C. Adams
- ------------------------------------
Christoph M. Adams
Vice President, Business Development
For Genetics Institute, Inc.
/s/ Jack Morgan
- ------------------------------------
<PAGE> 1
EXHIBIT 10.33
CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
AMENDED AND RESTATED
LICENSE AGREEMENT
between
TRANSKARYOTIC THERAPIES, INC.
and
MARION MERRELL DOW INC.
dated as of March 1, 1995
<PAGE> 2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.................................................. 1
1.1. "Affiliate".......................................... 1
1.2. "Customer"........................................... 2
1.3. "Development Committee".............................. 2
1.4. "Development Phase" ................................. 2
1.5. "Effective Date"..................................... 2
1.6. "ELA"................................................ 2
1.7. "GA-EPO"............................................. 2
1.8. "First Commercial Sale".............................. 2
1.9. "FDA"................................................ 2
1.10. "Fully Absorbed Costs"............................... 2
1.11. "Gross Margin"....................................... 3
1.12. "IND"................................................ 3
1.13. "MMD Territory"...................................... 3
1.14. "Manufacturing Know-How"............................. 3
1.15. "Net Revenues"....................................... 3
1.16. "Net Sales".......................................... 3
1.17. "PLA"................................................ 4
1.18. "Program"............................................ 5
1.19. "R&D Oversight Committee"............................ 5
1.20. "Research Phase"..................................... 5
1.21. "Research Program"................................... 5
1.22. "Third Party"........................................ 5
1.23. "TKT Patent Rights".................................. 5
1.24. "TKT Technology"..................................... 5
ARTICLE 2. SCOPE AND STRUCTURE.......................................... 6
2.1. General.............................................. 6
2.2. Relationship of TKT and MMD.......................... 6
2.3. Commercialization of *******************............. 6
2.3.1. **************************
**********************************
*****************************.............. 6
2.3.2. **************************************
**********************************
*****************************.............. 6
2.3.3. ***********************************
***********************************........ 7
2.3.4. Payments................................... 7
2.3.5. *********************...................... 7
2.3.6. ******************......................... 8
ARTICLE 3. LICENSE GRANTS; MANUFACTURING AND MARKETING
RIGHTS.......................................................... 8
3.1. Grant of License Rights by TKT to MMD................ 8
3.1.1. Exclusive GA-EPO License................... 8
3.1.2. Sublicenses of GA-EPO...................... 8
3.1.3. Exclusive Manufacturing Know-How
License.................................... 8
(i)
<PAGE> 3
3.1.4. Sublicenses of Manufacturing Know-How...... 9
3.2. Grant of License Rights by MMD to TKT................ 9
3.3. Reservation of Rights................................ 9
3.3.1. TKT Reservation............................ 9
3.3.2. MMD Reservation............................ 9
3.3.3. Manufacture of GA-EPO...................... 10
ARTICLE 4. THE RESEARCH PHASE........................................... 10
4.1. Conduct of the Research Program...................... 10
4.1.1. General.................................... 10
4.1.2. Research Plan.............................. 10
4.1.3. Subcontracts............................... 10
4.1.4. Data....................................... 10
4.1.5. Quarterly Reports by TKT................... 11
4.1.6. Assistance by MMD.......................... 11
4.2. Funding of the Research Program...................... 11
4.3. Term of the Research Phase........................... 11
4.3.1. Completion of the Research Phase........... 11
4.3.2. Term of the Research Phase................. 12
ARTICLE 5. THE DEVELOPMENT PHASE........................................ 12
5.1. Conduct of the Development Phase..................... 12
5.1.1. Commencement of the Development Phase...... 12
5.1.2. Development Phase.......................... 12
5.1.3. Annual Development Plan.................... 13
5.1.4. Adjustment of Development Phase
Milestones................................. 13
5.1.5. Attendance at Regulatory Meetings.......... 13
5.2. Funding of the Development Phase..................... 13
5.3. Development Information.............................. 13
5.3.1. Information for Regulatory Submissions..... 13
5.3.2. Reports to Development Committee........... 14
5.3.3. Regulatory Submissions. .................. 14
5.3.4. Adverse Event Information.................. 14
5.4. Certain Prohibited Actions........................... 14
5.5. Development Phase Manufacturing...................... 14
5.6. Manufacturing Costs.................................. 14
5.7. Assistance by TKT.................................... 15
5.8. Regulatory Matters and Commercialization............. 15
5.8.1. Commercialization.......................... 15
5.8.2. Marketing Plans............................ 15
5.8.3. Co-Development, Co-Promotion and Co-
Marketing.................................. 15
ARTICLE 6. RESEARCH, DEVELOPMENT AND REGULATORY
COORDINATION.................................................... 16
6.1. R&D Oversight Committee.............................. 16
6.1.1. General.................................... 16
6.1.2. Minutes.................................... 17
6.2. Development Committee................................ 17
6.2.1. General.................................... 17
6.2.2. Minutes.................................... 17
(ii)
<PAGE> 4
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
6.3. General Disagreements................................ 17
6.4. Visit of Facilities.................................. 18
6.5. Annual Review and Planning Meeting................... 18
ARTICLE 7. MILESTONES AND ROYALTIES..................................... 18
7.1. Milestone Payments................................... 18
7.2. Royalties............................................ 19
7.2.1. Royalties Based on Net Sales of GA-EPO..... 20
7.2.2. Alternative Royalty Based on Gross
Margin..................................... 20
7.2.3. Sharing of Revenues From Sublicensees...... 20
7.2.4. Adjustment of Royalty Rates................ 20
7.3. Royalty Reports, Exchange Rates...................... 21
7.4. Audits............................................... 22
7.4.1. Procedure.................................. 22
7.4.2. Expenses................................... 22
7.4.3. Sublicenses................................ 22
7.4.4. Confidential Treatment..................... 22
7.5. Royalty Payment Terms................................ 22
7.6. Form of Payment...................................... 23
7.7. Withholding Taxes.................................... 23
7.8. Interest on Late Payments............................ 23
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS................................. 23
8.1. Ownership............................................ 23
8.1.1. Ownership of Discoveries and
Improvements............................... 23
8.1.2. Cooperation of Employees................... 24
8.2. Filing, Prosecution and Maintenance of TKT Patent
Rights and TKT Technology............................ 24
8.2.1. ***********************************........ 24
8.2.2. Patent Filing Costs........................ 25
8.3. Cooperation.......................................... 25
8.4. Notification of Patent Term Restoration.............. 25
8.5. No Other Technology Rights........................... 26
8.6. Enforcement of TKT Patent Rights and TKT
Technology; Defense of Infringement Actions.......... 26
8.6.1. ****************************............... 26
8.6.2. *********************************
*******.................................... 26
8.6.3. ***********************************
********................................... 26
8.6.4. *****************************. ........... 27
8.6.5. ****************************
********************************
****************........................... 27
8.7. **********************************************
***************************............................... 28
ARTICLE 9. CONFIDENTIALITY.............................................. 28
9.1. Nondisclosure Obligations............................ 28
9.1.1. General.................................... 28
(iii)
<PAGE> 5
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
9.1.2. Limitations................................ 28
9.2. Materials............................................ 29
9.2.1. ******************************............. 29
9.2.2. Samples.................................... 29
9.3. Terms of this Agreement.............................. 29
9.4. Publications......................................... 30
9.4.1. Procedure.................................. 30
9.4.2. Delay...................................... 30
9.4.3. Resolution................................. 30
9.5. Injunctive Relief.................................... 30
ARTICLE 10. REPRESENTATIONS AND WARRANTIES.............................. 30
10.1. General.............................................. 30
10.1.1. Authorization.............................. 30
10.1.2. No Inconsistent TKT Arrangements........... 30
10.1.3. Exclusivity................................ 31
10.1.4. Licensed Technology........................ 31
10.2. Patent Validity...................................... 31
10.2.1. Title...................................... 31
10.2.2. No Encumbrances............................ 31
10.2.3. Non-Infringement........................... 31
10.3. Financial Statements................................. 31
ARTICLE 11. INDEMNITY................................................... 32
11.1. MMD Indemnity Obligations............................ 32
11.2. TKT Indemnity Obligations............................ 32
11.3. Procedure............................................ 32
11.4. Insurance............................................ 33
ARTICLE 12. TERM AND TERMINATION........................................ 33
12.1. Expiration........................................... 33
12.2. Termination.......................................... 33
12.3. Effect of Termination................................ 34
ARTICLE 13. MISCELLANEOUS............................................... 35
13.1. Force Majeure........................................ 35
13.2. Assignment........................................... 35
13.3. Severability......................................... 35
13.4. Notices.............................................. 36
13.5. Applicable Law....................................... 37
13.6. Dispute Resolution................................... 37
13.7. Entire Agreement..................................... 37
13.8. Headings............................................. 38
13.9. Independent Contractors.............................. 38
13.10. Agreement Not to Solicit Employees....................... 38
13.11. Exports.................................................. 38
13.12. Waiver................................................... 38
13.13. Counterparts............................................. 38
(iv)
<PAGE> 6
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
AMENDED AND RESTATED LICENSE AGREEMENT
THIS AMENDED AND RESTATED LICENSE AGREEMENT dated as of March 1, 1995 (the
"Agreement") is made between TRANSKARYOTIC THERAPIES, INC., a Delaware
corporation having its principal place of business at 195 Albany Street,
Cambridge, Massachusetts 02139 ("TKT"), and MARION MERRELL DOW INC., a Delaware
corporation having its principal place of business at 9300 Ward Parkway, Kansas
City, Missouri 64114-0480 ("MMD").
RECITALS
WHEREAS, TKT has filed patent applications necessary to exploit discoveries
relating to the expression of gene-activated erythropoietin protein in
eukaryotic cells and possesses certain related know-how and expertise.
WHEREAS, MMD desires to license TKT's patent rights and certain related
know-how and expertise relating to gene-activated erythropoietin protein and
obtain TKT's assistance for development of such discoveries.
WHEREAS, TKT and MMD previously entered into that certain License
Agreement dated as of May 18, 1994 (the "Original License Agreement") regarding
gene-activated erythropoietin protein and now desire to amend and restate the
Original License Agreement in its entirety as follows.
NOW THEREFORE, in consideration of the premises and of the covenants herein
contained, the parties hereto mutually agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below:
1.1. "AFFILIATE" shall mean any corporation or other entity which controls,
is controlled by, or is under common control with a party to this Agreement. A
corporation or other entity shall be regarded as in control of another
corporation or entity if it owns or directly or indirectly controls more than
fifty percent (50%) of the voting stock or other ownership interest of the other
corporation or entity, or if it possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the corporation
or other entity or the power to elect or appoint fifty percent (50%) or more of
the members of the governing body of the corporation or other entity.
Notwithstanding the foregoing, the Dow Chemical Company shall not be considered
an Affiliate of MMD for purposes of this Agreement.
-1-
<PAGE> 7
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
1.2. "CUSTOMER" shall have the meaning set forth in Section 1.15.
1.3. "DEVELOPMENT COMMITTEE" shall mean the joint committee composed of
representatives of TKT and MMD described in Section 6.2 of this Agreement.
1.4. "DEVELOPMENT PHASE" shall mean the second phase of the Program, which
shall commence **********************************
***********************************************************
*********************************************************
****************************** covered by the TKT Patent Rights or which uses
the TKT Technology and the preparation and filing of supporting regulatory
submissions until, with respect to each country in the MMD Territory, final
marketing approval for GA-EPO covered by the TKT Patent Rights or which uses the
TKT Technology is obtained in such country.
1.5. "EFFECTIVE DATE" shall mean May 18, 1994.
1.6. "ELA" shall mean the Establishment License Application filed with the
FDA to obtain approval of the facility to be used to manufacture GA-EPO covered
by the TKT Patent Rights or which uses the TKT Technology for sale in the United
States or any comparable application filed with the regulatory authorities of a
country other than the United States to obtain approval of production facilities
to be used to manufacture GA-EPO covered by the TKT Patent Rights or which uses
the TKT Technology for sale in such country.
1.7. "GA-EPO" shall mean all pharmaceutical and other formulations of
gene-activated erythropoietin protein, including all injectable and orally
available formulations, line extensions, combination products, delivery systems,
and dosage forms related thereto, ************** **************************
************
1.8. "FIRST COMMERCIAL SALE" of GA-EPO covered by the TKT Patent Rights or
which uses the TKT Technology shall mean the first sale for use or consumption
by the general public of GA-EPO covered by the TKT Patent Rights or which uses
the TKT Technology in a country in the MMD Territory after required marketing
and pricing approval has been granted by the governing health authority of such
country.
1.9. "FDA" shall mean the United States Food and Drug Administration.
1.10. "FULLY ABSORBED COSTS" shall mean the direct variable and direct
fixed costs associated with the conduct of the Research Phase or the Development
Phase. Direct variable costs shall be deemed to be the cost of labor, raw
materials, supplies and other resources directly consumed in the conduct of the
Research Phase or the Development Phase. Direct fixed costs shall be deemed to
be the cost of utilities, insurance, equipment
-2-
<PAGE> 8
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
depreciation and other fixed costs directly related to the conduct of the
Research Phase or the Development Phase. Fixed costs shall be allocated
based upon the proportion of such costs directly attributable to support of
the Research Phase or the Development Phase. All cost determinations made
hereunder shall be made in accordance with generally accepted accounting
principles consistently applied.
1.11. "GROSS MARGIN" with respect to GA-EPO covered by the TKT Patent
Rights or which uses the TKT Technology shall mean Net Revenues from sales
of such GA-EPO less the cost of goods sold of MMD or its Affiliates for
such GA-EPO, determined in accordance with generally accepted accounting
principles consistently applied for all products manufactured by MMD.
1.12. "IND" shall mean an investigational new drug application filed
with the FDA prior to beginning clinical trials in humans or any comparable
application filed with the regulatory authorities of a country other than
the United States prior to beginning clinical trials in humans in that
country, with respect to GA-EPO covered by the TKT Patent Rights or which
uses the TKT Technology.
1.13. "MMD TERRITORY" shall mean all of the countries in the world,
which shall be divided into the following groupings of countries:
**************************************************
*******************************************************
**************************************************************
************************************************************
***************************************************************
*********************************************************
*****************************************************************
**************************************************************
****************************************************************
*********************************************************** *****. Each of
the foregoing groupings of countries is referred to as a "Territory Block."
1.14. "MANUFACTURING KNOW-HOW" shall mean all inventions, discoveries,
improvements and other technology, whether or not patentable or
copyrightable, and any patent applications, patents or copyrights based
thereon, relating to or necessary or useful for the production and
packaging of GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology.
1.15. "NET REVENUES" with respect to GA-EPO covered by the TKT Patent
Rights or which uses the TKT Technology shall mean the invoiced amount
billed by MMD or its Affiliates for GA-EPO finished product in final
packing form (whether or not with final labels) to any MMD distributors or
sublicensees which are not Affiliates, including any royalties due to MMD
or its Affiliates with respect to such sales, less, whether or not such
costs are invoiced separately to such person or entity, the costs
-3-
<PAGE> 9
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
identified in clauses (a) through (d) of subsection 1.16. The definitions
of Bundled Product and Combination Product set forth in subsection 1.16.
shall also apply to such sales mutatis mutandis.
1.16. "NET SALES" with respect to GA-EPO covered by the TKT Patent
Rights or which uses the TKT Technology shall mean the invoiced amount
billed for GA-EPO finished product in final packing form to the first Third
Party trade purchaser (a "Trade Customer") by MMD or its Affiliates or any
MMD distributors which are not Affiliates, or, to the extent permitted in
subsection 3.1.2, by permitted sublicensees of MMD (it being understood
that wholesalers which are not Affiliates of MMD shall be considered Third
Party trade purchasers), less, whether or not such costs are invoiced
separately to such Trade Customer, (a) amounts refunded or credited for
GA-EPO which was rejected, spoiled, damaged, out-dated or returned, (b)
freight, shipment and insurance costs incurred in transporting GA-EPO to
such customers, (c) quantity, trade, cash, and other discounts, rebates
(including, without limitation, pursuant to governmental regulation),
chargebacks, retroactive price reductions, credits or allowances allowed or
taken (subject to post-period adjustment if allowed but not taken within
three months of the end of the calendar year in which such credit or
allowance is allowed), and (d) taxes, tariffs, customs duties and
surcharges and other governmental charges incurred in connection with the
sale, exportation or importation of GA-EPO. The transfer of GA-EPO by MMD
or one of its Affiliates to another Affiliate of MMD shall not be
considered a sale; in such cases, Net Sales shall be determined based on
the invoiced sales price by the Affiliate to the Trade Customer, less the
deductions allowed under this Section. MMD shall be deemed to have sold a
"Bundled Product" if GA-EPO finished product is sold by MMD pursuant to an
agreement with a Trade Customer specifying, for a combination of products
or services, (i) a single price, (ii) other terms of purchase not
separately identifying either a price per product or the effective
deductions referred to above per product or (iii) a price for units of
GA-EPO which is discounted below MMD's standard invoice price per unit of
GA-EPO by at least five percentage points more than the amount that any
other product or service in the Bundled Product is discounted below such
other product's or service's standard invoice price. In order to calculate
the Net Sales of GA-EPO included in a Bundled Product (a) in the case of
the foregoing clauses (i) and (ii), the total Net Sales of the Bundled
Product shall be multiplied by a fraction, the numerator of which shall be
**************************************************************************
********************************** and the denominator of which shall be
**************************************************************************
**************************************************************************
**************************************************************************
*********************** and (b) in the case of the foregoing clause (iii),
the parties will determine whether an adjustment to Net Sales is
appropriate and, if so, a mutually agreeable method of calculation. If GA-
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<PAGE> 10
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EPO is formulated by MMD with one or more different active biological or
chemical ingredients and such formulation is sold in finished product form,
then MMD shall be deemed to have sold a "Combination Product." In order to
calculate the Net Sales of GA-EPO included in a Combination Product, the
total invoice price for the Combination Product shall be multiplied by a
fraction, the numerator of which shall be ********************************
*********************************************************
***********************************************, and the denominator of
which shall be **********************************
***************************************************************
**********************************************************
***************************************************************
********************. If it is not possible to determine the standard
invoice price for an active ingredient of the Combination Product, then the
standard invoice price for such individual active ingredient shall be the
fully allocated cost of manufacture therefor determined in accordance with
standard cost accounting principles, as adjusted to reflect MMD's standard
profit margin for like products. The amount of Net Sales for any period
shall be determined on the basis of sales recorded in the ordinary course
on the books and records of MMD (or any Affiliate of MMD) during such
period in accordance with Generally Accepted Accounting Principles and with
past practice, without reference to the effects of any subsequent audit
adjustments which result in any of such sales being recognized by MMD in
another period.
1.17. "PLA" shall mean a product license application filed with the
FDA after completion of human clinical trials to obtain marketing approval
for GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology in the United States or any comparable application filed with
the regulatory authorities of a country other than the United States to
obtain marketing approval for GA-EPO covered by the TKT Patent Rights or
which uses the TKT Technology in that country.
1.18. "PROGRAM" shall mean the collaboration by TKT and MMD described
in this Agreement.
1.19. "R&D OVERSIGHT COMMITTEE" shall mean the joint committee
composed of representatives of TKT and MMD described in Section 6.1 of this
Agreement.
1.20. "RESEARCH PHASE" shall mean the first stage of the Program
commencing on the Effective Date, *******************
***********************************************************
***************************************************************
********************* The Research Phase is more fully described in Article
4.
1.21. "RESEARCH PROGRAM" shall mean the GA-EPO research program
described in Section 4.1 of this Agreement.
1.22. "THIRD PARTY" shall mean any entity other than TKT or MMD and
their respective Affiliates.
-5-
<PAGE> 11
1.23. "TKT PATENT RIGHTS" shall mean all present and, at MMD's
election, future patents, patent applications, patent extensions,
certificates of invention, or applications for certificates of invention,
together with any divisions, continuations or continuations-in-part
thereof, which are owned or controlled by TKT relating to or necessary or
useful for the manufacture, use, distribution or sale of GA-EPO, including
without limitation those specified on Schedule 1.23 hereto.
1.24. "TKT TECHNOLOGY" shall mean all present and future inventions,
trade secrets, copyrights, know-how, data, regulatory submissions and other
intellectual property of any kind (including any proprietary biological
materials, compounds or reagents but not including TKT Patent Rights) which
are owned or controlled by, or licensed ( with the right to sublicense) to,
TKT relating to or necessary or useful for the manufacture, use,
distribution or sale of GA-EPO, including but not limited to any patents or
patent applications licensed from Third Parties. With respect to TKT
Technology which has been licensed to TKT by a Third Party, (i) MMD agrees
to assume and pay for its portion of any costs, expenses, fees or royalties
associated with its use of sublicense rights relating to such licensed TKT
Technology to the extent described in Section 8.7, and (ii) if TKT does not
currently have the right to sublicense such intellectual property to MMD
hereunder, such license is listed on Schedule 1.24 hereto and TKT shall use
commercially reasonable efforts to obtain the right to sublicense such
intellectual property (as well as any intellectual property licensed to TKT
hereafter which is included in the TKT Technology), to MMD hereunder.
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<PAGE> 12
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
ARTICLE 2. SCOPE AND STRUCTURE
2.1. GENERAL. TKT and MMD wish to establish an agreement with respect
to GA-EPO. During the course of the Program, TKT and MMD shall communicate
regularly and shall assume different rights and responsibilities, all as
more specifically described herein.
2.2. RELATIONSHIP OF TKT AND MMD. During the term of this Agreement,
neither TKT or MMD, nor any of their Affiliates shall independently, or
with a Third Party, conduct research regarding, or engage in the
development, manufacture, marketing or sale of, pharmaceutical formulations
of erythropoietin protein, other than as part of the Program, except that
either TKT or MMD may develop, manufacture, market, distribute or sell
"generic" or "non-branded" pharmaceutical formulations of erythropoietin
protein in any country if (i) there are imminent Third Party sales of
"generic" erythropoietin protein in such country and (ii) GA-EPO covered by
the TKT Patent Rights or which uses the TKT Technology may not lawfully be
substituted in such country as a "generic" equivalent product for any
prescription for a branded or "generic" form of erythropoietin protein with
respect to which sales by such Third Party are imminent.
2.3. COMMERCIALIZATION OF *******************.
TKT agrees that it shall not develop, manufacture, promote or
market ****************************************
***********************************************************
**************************************************************
*************************************************************
**********************************************************
**********************************************
2.3.1. *****************************************
*************************************************. ************
***************************************************************
***********************************************
2.3.2. **************************************
****************************************************************.
************************************************************
***********************************************************
*****************************************************************
***********************************************************
*****************
2.3.2.1. ************************. ********
*****************************************************************
********************************************************** **************
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<PAGE> 13
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
2.3.2.2. ***************************. Prior to entering into
any agreement regarding a ********************, TKT shall deliver a written
notice (the ********************* ) to MMD disclosing in reasonable detail
the terms and conditions of the proposed ********************.
2.3.2.3. RIGHT OF FIRST REFUSAL. MMD shall have the right
(the "FIRST REFUSAL RIGHT") at any time within ****** ********* after
receipt of the ******************** to accept the terms thereof, in which
event the parties shall use their best efforts to enter into an agreement,
************** after such acceptance, regarding a ******************** upon
the terms specified in the ********************. If MMD does not exercise
the First Refusal Right then TKT shall be free, for a period of ********
from the expiration of such *******, to enter into an agreement regarding a
******************** upon the terms and with the Third Party specified in
the ********************. Following the ************** specified in the
preceding sentence, TKT shall not enter into an agreement regarding a
******* ************** without complying with the terms of this subsection
2.3.2.
2.3.3. *****************************************
*****************************. ********* the *****
****************************************, or any earlier termination of
MMD's rights under this Section pursuant to subsection 2.3.5, TKT shall be
under no obligation to enter into a ******************** with MMD but shall
promptly notify MMD if it enters into negotiations for a
********************.
2.3.4. PAYMENTS. In consideration of the obligations of TKT
pursuant to this Section 2.3.1, MMD shall pay to TKT the following amounts
every ********** following the date of this Agreement (with the first
payment due on the date hereof):
Anniversary Amount
----------- ------
*********** $************
********** $************
************* $************
*************** $************
****************** $************
************* $************
***************** $************
**************** $************
****************** $************
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<PAGE> 14
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
***************** $************
2.3.5. *********************. ******************
**************************************************************
**********************************************************
********************************************************
***************************************************************
****************************************************************
**************************************************************
*********************************************************
************************************************************
*******************************************************
*************************************************************** following
the delivery of such written notice. In either event,
*************************************** at the end of the period with
respect to which payments have been made under subsection 2.3.4. Except as
provided in subsection 2.3.6, **************** ****** pursuant to
subsection 2.3.4 *****************.
2.3.6. ******************. **********************
*****************************************************************
***********************************************************
****************************************************************
************************************************************
*************************************************************
**********************************************************
****************************************************************
***************************************************************
*****************************************************************
***************************************************************
*************************************************************
*************************************************************
******************.
ARTICLE 3. LICENSE GRANTS; MANUFACTURING AND MARKETING RIGHTS
3.1. GRANT OF LICENSE RIGHTS BY TKT TO MMD.
3.1.1. EXCLUSIVE GA-EPO LICENSE. TKT hereby grants to MMD the
worldwide, perpetual, and exclusive right and license under the TKT Patent
Rights and the TKT Technology to develop, make, have made, use, distribute
for sale and sell GA-EPO.
3.1.2. SUBLICENSES OF GA-EPO. MMD shall have the right to grant
sublicenses under the TKT Patent Rights and the TKT Technology license
granted by TKT to MMD under subsection 3.1.1 to Affiliates of MMD and, with
the written consent of TKT, which shall not be unreasonably withheld, to
entities which are not Affiliates of MMD. In connection with such
sublicense, MMD may provide that the sublicensee shall pay directly to TKT
any amounts which may become due in accordance with Section 7.2, PROVIDED,
HOWEVER, that MMD shall in any event remain liable for the payment of all
such amounts notwithstanding any such
-9-
<PAGE> 15
provision between MMD and its sublicensee. Upon TKT's request, and to the
extent that MMD is not contractually prohibited from doing so, MMD will
provide a copy of such sublicenses to TKT.
3.1.3. EXCLUSIVE MANUFACTURING KNOW-HOW LICENSE. TKT hereby grants
to MMD a worldwide, perpetual, and exclusive and, except as provided below,
fully paid-up and royalty-free right and license under Manufacturing
Know-How owned or controlled by, or licensed (subject to the provisions of
this subsection 3.1.3, with the right to sublicense) to, TKT to make or
have made GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology. With respect to Manufacturing Know-How which has been licensed
to TKT by a Third Party, (i) MMD agrees to assume and pay for any costs,
expenses, fees or royalties associated with its sublicense of such
Manufacturing Know-How, and (ii) if TKT does not currently have the right
to sublicense such intellectual property to MMD hereunder, such license is
listed on Schedule 3.1.3 hereto and TKT shall use commercially reasonable
efforts to obtain the right to sublicense such intellectual property (as
well as any intellectual property licensed to TKT hereafter which is
included in the Manufacturing Know-How) to MMD hereunder for such limited
purposes.
3.1.4. SUBLICENSES OF MANUFACTURING KNOW-HOW. MMD shall have the
right to grant sublicenses under the Manufacturing Know-How license granted
by TKT to MMD under subsection 3.1.3 to Affiliates of MMD and, with the
written consent of TKT, which shall not be unreasonably withheld, to
entities which are not Affiliates of MMD. MMD will provide a copy of such
sublicenses to TKT.
3.2. GRANT OF LICENSE RIGHTS BY MMD TO TKT. Subject to the last
sentence of this Section 3.2, upon the request of TKT, (i) MMD shall grant
to TKT a worldwide, perpetual, non-exclusive and fully paid-up and
royalty-free right and license, with the right to sublicense, under
Manufacturing Know-How owned or controlled by, or licensed (subject to the
provisions of this Section 3.2, with the right to sublicense) to MMD which
is developed by a Third Party contract manufacturer engaged by MMD and
working with or receiving assistance from TKT, to make or have made
products (other than pharmaceutical formulations of erythropoietin protein)
worldwide which are not competitive with GA-EPO, and (ii) MMD shall
negotiate in good faith with TKT the terms of a license, with the right to
sublicense, which shall be on reasonable commercial terms, under
Manufacturing Know-How owned or controlled by, or licensed (subject to the
provisions of this Section 3.2, with the right to sublicense) to MMD to
make or have made products (other than pharmaceutical formulations of
erythropoietin protein) worldwide which are not competitive with GA-EPO.
With respect to Manufacturing Know-How described above which has been
licensed to MMD by a Third Party, (i) TKT agrees to assume and pay for any
costs, expenses, fees or royalties associated with its sublicense of such
Manufacturing Know-How, and (ii) if MMD does not have the right to
sublicense such intellectual property to TKT hereunder, MMD shall use
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<PAGE> 16
commercially reasonable efforts, as determined in good faith by MMD, to
obtain the right to sublicense such intellectual property to TKT hereunder
for such limited purposes.
3.3. RESERVATION OF RIGHTS.
3.3.1. TKT RESERVATION. Notwithstanding the license grants set
forth above, and subject to the provisions of Section 5.4 hereof, TKT at
all times reserves the right under the TKT Patent Rights, TKT Technology,
and Manufacturing Know-How owned either exclusively by TKT or jointly with
MMD (i) to make, have made and use GA-EPO for research and development uses
as part of the Program and (ii) subject, with respect to Manufacturing
Know-How owned jointly by TKT and MMD, to the consent of MMD, which consent
shall not be unreasonably withheld, to make, have made, use, sublicense,
distribute for sale and sell products other than GA-EPO.
3.3.2. MMD RESERVATION. Notwithstanding the license grants set
forth above, MMD at all times reserves the right under Manufacturing
Know-How owned either exclusively by MMD or jointly with TKT (i) to make,
have made and use GA-EPO for research and development uses as part of the
Program, (ii) to make, have made, use, sublicense, distribute for sale and
sell GA-EPO and (iii) subject, with respect to Manufacturing Know-How owned
jointly by TKT and MMD, to the consent of TKT, which consent shall not be
unreasonably withheld, to make, have made, use, sublicense, distribute for
sale and sell products other than GA-EPO.
3.3.3. MANUFACTURE OF GA-EPO. Notwithstanding anything else
contained in this Agreement, MMD shall have the right to make or have made
GA-EPO in any country in the world for use, distribution for sale or sale
by itself, its Affiliates or its permitted licensees or sublicensees in the
territories allocated to it under this Agreement.
ARTICLE 4. THE RESEARCH PHASE
4.1. CONDUCT OF THE RESEARCH PROGRAM.
4.1.1. GENERAL. The conduct of the Research Program shall be the
primary responsibility of TKT and shall take place primarily at TKT's
facilities in Cambridge, Massachusetts. The Research Program shall be
conducted in good scientific manner, and in compliance with all applicable
good laboratory practices and applicable legal requirements to achieve
efficiently and expeditiously its objectives. TKT shall proceed diligently
with the work set out in the Research Program using its best efforts using
commercially reasonable means consistent with those used by TKT for other
projects with a similar commercial potential.
4.1.2. RESEARCH PLAN. The Research Program shall be conducted
under a research plan which describes the work to be pursued by TKT during
the Research Phase and which has been
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<PAGE> 17
approved by the R&D Oversight Committee prior to the date hereof. If at any
time during the Research Phase, TKT or MMD determine that a significant
change to the research plan is necessary or desirable, it shall prepare a
written description detailing the change to the research plan and shall
submit such description to the R&D Oversight Committee for its approval. An
outline of the research plan is attached to the Original License Agreement
and describes the work to be pursued during the Research Phase, including:
(i) identifying the technical problems involved and the general projects to
be carried out regarding GA-EPO, (ii) estimating the personnel to be
committed for each project, and (iii) setting forth a projected timetable
for the work to be performed.
4.1.3. SUBCONTRACTS. Subject to the approval of the R&D Oversight
Committee and the provisions of Article 9, TKT may subcontract portions of
the Research Program to be performed by it in the normal course of its
business to a Third Party.
4.1.4. DATA. TKT shall maintain records in sufficient detail and
in good scientific manner appropriate for regulatory filings and patent
purposes and as will properly reflect all work done and results achieved in
the performance of the Research Program (including all data in the form
required to be maintained under any applicable governmental regulations).
Such records shall include books, records, reports, research notes, charts,
graphs, comments, computations, analyses, recordings, photographs, computer
programs and documentation thereof, computer information storage means,
samples of materials and other graphic or written data generated in
connection with the Research Program. TKT shall provide MMD the right to
inspect such records, and shall provide copies of all requested records, to
the extent reasonably required for the performance of MMD's obligations
under this Agreement; provided, however, that MMD shall maintain such
records and the information of TKT contained therein in confidence in
accordance with Article 9 hereof and shall not use such records or
information except to the extent otherwise permitted by this Agreement.
4.1.5. QUARTERLY REPORTS BY TKT. Within fourteen (14) days
following the end of each calendar quarter, or at the reasonable request
(with mutually agreed advance notice) of the R&D Oversight Committee, TKT
shall provide to the members of the R&D Oversight Committee a written
report which shall summarize in reasonable detail the work TKT has
performed under the Research Program during the preceding calendar quarter.
4.1.6. ASSISTANCE BY MMD. MMD shall provide such assistance to
TKT in conducting the Research Program as TKT may reasonably request, and
TKT will reimburse MMD for its documented Fully Absorbed Costs incurred in
providing such assistance; provided, however, that prior to providing such
assistance MMD shall have provided to TKT an estimate of such Fully
Absorbed Costs and TKT shall have approved such estimate; PROVIDED,
FURTHER, that no failure of MMD to undertake or successfully
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<PAGE> 18
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
complete such assistance shall relieve TKT from its obligations hereunder
or affect MMD's right to terminate this Agreement pursuant to Section 12.2.
4.2. FUNDING OF THE RESEARCH PROGRAM. TKT shall bear all costs and
expenses in connection with the Research Program.
4.3. TERM OF THE RESEARCH PHASE.
4.3.1. COMPLETION OF THE RESEARCH PHASE. The term of the
Research Phase shall commence as of the first day of the month following
the Effective Date. ****************************
*****************************************************************
****************************************************************
**************************************************************
****************************************************************
***********************************************************
************************************************************
************************************************************
************************************************************** ******* The
R&D Oversight Committee shall promptly evaluate the data submitted by TKT
and determine, in its reasonable discretion,******************************
**************************************************************************
************************************************. The R&D Oversight
Committee shall provide TKT and MMD with prompt written notice of its
decision. Upon notification of *******************************************
**************************************************************************
**************************************************************************
**************************************************************.
4.3.2. TERM OF THE RESEARCH PHASE. The term of the Research
Phase ************************************************
**************************************************************
***************************************************************
***************************************************************
************************************* shall jointly determine on what terms
the Research Phase shall be extended and what additional terms, if any, in
this Agreement shall be modified as a result of such extension. If such a
determination cannot be reached within ******************** after the
expiration of the initial term of the Research Phase, then such
determination shall be made by arbitration in accordance with the
procedures for arbitration described in Section 13.6, unless the parties
mutually agree to terminate this Agreement.
ARTICLE 5. THE DEVELOPMENT PHASE
5.1. CONDUCT OF THE DEVELOPMENT PHASE.
5.1.1. COMMENCEMENT OF THE DEVELOPMENT PHASE. The Development
Phase will commence ******************************
***************************************************************
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<PAGE> 19
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
****************************************************************
***************************************************************
***********.
5.1.2. DEVELOPMENT PHASE. The conduct of the Development Phase
shall be the primary responsibility of MMD. MMD may subcontract with Third
Parties for portions of the Development Phase and for all or a portion of
the manufacture of GA-EPO. The Development Phase shall consist of the
preparation and filing of regulatory submissions and the preclinical and
clinical development of GA-EPO until, with respect to each country in the
MMD Territory, final marketing approval for GA-EPO is obtained in such
country. MMD and TKT will cooperate to achieve the milestones described in
APPENDIX A using their respective best efforts using commercially
reasonable means consistent with those used by them for other projects with
a similar commercial potential. If MMD has been unable to achieve any of
the milestones described in APPENDIX A within the time period indicated in
APPENDIX A for reasons other than those described in subsection 5.1.4, then
the Chief Executive Officer of each of TKT and MMD or their respective
designees shall jointly determine on what terms the time period for
achieving such milestones should be extended and what additional terms, if
any, in this Agreement shall be modified as a result of such extension. If
such a determination cannot be reached within ******************** after
the time period for any such milestone has expired, then such determination
shall be made by arbitration in accordance with the procedures for
arbitration described in Section 13.6, unless the parties mutually agree to
terminate this Agreement. MMD shall have primary responsibility for
supervision of the scale-up and the further characterization of the master
cell bank, the characterization of clinical trial material, and the
supervision of the assembly of all characterization data and other
information required for regulatory submissions. At MMD's request, TKT will
perform, or assist MMD in performing, the work described in the preceding
sentence and provide such other assistance to MMD as may be reasonably
necessary to enable MMD to achieve the milestones described in APPENDIX A,
and TKT shall be compensated for such assistance in accordance with Section
5.9. MMD will determine, in its sole discretion after consultation with
TKT, the appropriate entity to file and hold the PLA and the ELA. MMD will
coordinate preclinical and clinical testing of GA-EPO and work with
designated individuals at MMD and TKT in the preparation of regulatory
filings for GA-EPO within the MMD Territory.
5.1.3. ANNUAL DEVELOPMENT PLAN. The Development Phase shall be
conducted under an annual development plan which shall describe the work to
be pursued by MMD and TKT under the supervision of the Development
Committee with respect to the development of GA-EPO. The first Development
Plan will be prepared by MMD for submission to the Development Committee
within **********************************************************
****************************************************************.
Thereafter, the annual development plan will be prepared by MMD
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<PAGE> 20
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
for submission to the Development Committee no later than ****** *********
prior to the beginning of each calendar year.
5.1.4. ADJUSTMENT OF DEVELOPMENT PHASE MILESTONES. If at any time
during the Development Phase MMD determines and is able to demonstrate to
TKT's reasonable satisfaction that *****
***************************************************************
*****************************************************************
*************************************************************
***********************************************************
******************************************************
****************************************************************
****************************************************************
***************************************************************** then the
Chief Executive Officer of each of MMD and TKT, or their respective
designees, shall determine on what terms the Research Phase shall be
reinitiated and how the milestones described in APPENDIX A are to be
adjusted.
5.1.5. ATTENDANCE AT REGULATORY MEETINGS. MMD will provide TKT
with prior notice of all meetings between its representatives and drug
regulatory authorities regarding marketing approval of GA-EPO. TKT shall
have the right to have a representative present at all important meetings
in the United States, and upon request at all important meetings in other
countries; provided, however, that MMD may revoke this right with respect
to any particular meeting if, in its good faith reasonable judgment, the
presence of any other party will be a detriment to the success of the
meeting. TKT will furnish, at MMD's request, a representative to attend
drug regulatory meetings regarding marketing approval of GA-EPO.
5.2. FUNDING OF THE DEVELOPMENT PHASE. MMD shall bear all costs and
expenses in connection with the Development Phase. The assistance by TKT to
MMD and reimbursement to be provided by MMD to TKT during the Development
Phase is set forth in Section 5.7 hereof.
5.3. DEVELOPMENT INFORMATION.
5.3.1. INFORMATION FOR REGULATORY SUBMISSIONS. TKT will provide
MMD with all documentation available to TKT reasonably required for
regulatory submissions by MMD, based on work performed during the Research
Phase, including **********
************************************************************
*************************************************************
*********************************************************
***************************************************************
*****************************************************************
*******************************************************
***************************.
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<PAGE> 21
5.3.2. REPORTS TO DEVELOPMENT COMMITTEE. MMD shall keep the
Development Committee informed as to its progress in the Development Phase
of GA-EPO. Within thirty (30) days following the end of each six month
period during the Development Phase, MMD shall provide a reasonably
detailed report to the Development Committee which shall describe the
progress of the Development Phase of GA-EPO.
5.3.3. REGULATORY SUBMISSIONS. MMD shall provide TKT with copies
of all submissions to United States drug regulatory authorities. Upon the
reasonable request of TKT, MMD shall also provide TKT with copies of all
submissions to drug regulatory authorities of other countries and the
results of all clinical trials conducted by, or under the supervision of,
MMD with respect to GA-EPO; provided, however, that MMD reserves the right
to assess reasonable copying charges for any such materials requested by
TKT which exceed approximately two cartons of material.
5.3.4. ADVERSE EVENT INFORMATION. Within six months after the
commencement of the Development Phase, MMD will establish a protocol for
the timely handling and transmission of adverse event information. MMD and
TKT shall promptly notify each other of any adverse event information
relating to GA-EPO in accordance with such protocol.
5.4. CERTAIN PROHIBITED ACTIONS. Notwithstanding the provisions of
Section 2.2, TKT and its Affiliates shall not, directly or indirectly,
market, distribute or sell GA-EPO covered by the TKT Patent Rights or which
uses the TKT Technology in the MMD Territory.
5.5. DEVELOPMENT PHASE MANUFACTURING. Provided that TKT has
successfully met its obligations under the Research Program in the Research
Phase, MMD shall be primarily responsible for the production of GA-EPO
during the Development Phase. MMD will consult with TKT to determine the
appropriate manufacturing process for GA-EPO necessary for the Development
Phase and for commercial production, including selecting a suitable
production process.
5.6. MANUFACTURING COSTS. MMD shall bear all costs associated with the
manufacture of GA-EPO during the Development Phase, in accordance with the
provisions of this Article 5, and for commercial production for sale by MMD
or its sublicensees in the MMD Territory.
5.7. ASSISTANCE BY TKT. At MMD's request, TKT will cooperate with MMD
to provide such technical assistance and characterization work as may be
necessary in connection with the manufacture and production of GA-EPO
during the Development Phase and subsequently in commercial production, and
MMD will reimburse TKT for its documented Fully Absorbed Costs incurred in
connection with providing such assistance; provided, however, that prior to
providing such assistance, TKT shall have provided
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<PAGE> 22
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
to MMD an estimate of such Fully Absorbed Costs and MMD shall have approved
such estimate and, provided further, that no failure of TKT to undertake or
successfully complete such assistance shall relieve MMD from its obligation
to achieve the milestones described in APPENDIX A or affect TKT's right to
terminate this Agreement pursuant to subsection 12.2.5. TKT will provide
such assistance to MMD as is consistent with the capacity and capabilities
of TKT.
5.8. REGULATORY MATTERS AND COMMERCIALIZATION.
5.8.1. COMMERCIALIZATION. Upon the successful completion of the
Research Phase and Development Phase, MMD agrees to use its best efforts to
commercialize GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology throughout the MMD Territory using commercially reasonable means
consistent with those used for MMD products with similar commercial
potential.
5.8.2. MARKETING PLANS. MMD shall promptly provide TKT with copies
of its United States marketing plans for GA-EPO covered by the TKT Patent
Rights or which uses the TKT Technology, and shall provide TKT with copies
of its marketing plans for other countries upon the reasonable request of
TKT. Such marketing plans shall not be disclosed to any Third Party without
the prior written consent of MMD.
5.8.3. CO-DEVELOPMENT, CO-PROMOTION AND CO- MARKETING. In the
event that MMD determines, in its sole discretion, that co-development,
co-promotion or co-marketing of GA-EPO covered by the TKT Patent Rights or
which uses the TKT Technology is appropriate in any of the countries in the
***** *********************************************************** ******,
then TKT shall have the right of first negotiation (the "First Negotiation
Right") to become MMD's co-development, co-promotion or co-marketing
partner, as the case may be, in any such country on terms no less favorable
to TKT than those which MMD proposes to offer to any other co-development,
co-promotion or co-marketing partner for such country. MMD shall notify TKT
in writing of its determination to pursue co-development, co-promotion or
co-marketing of GA-EPO covered by the TKT Patent Rights or which uses the
TKT Technology in a country in the *****
***************************************************************** (the
"Negotiation Notice"); provided, however, that, in the case of co-promotion
or co-marketing only and in the absence of co-development, MMD shall not be
entitled without TKT's consent, which shall not be unreasonably withheld,
to give TKT a Negotiation Notice with respect to any country in the MMD
Territory until all clinical trials necessary for the submission for
regulatory approval to market GA-EPO in that country are substantially
complete. Unless TKT shall have waived the First Negotiation Right in
writing within 30 days following receipt by TKT of the Negotiation Notice,
MMD and TKT shall negotiate in
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good faith a termsheet for such co-development, co-promotion or
co-marketing arrangement for a period of up to 60 days commencing on the
date of the Negotiation Notice and a definitive agreement for such
co-development, co-promotion or co-marketing for an additional period of up
to 60 days commencing on the date of such termsheet. If, at the end of
either of such periods, MMD and TKT are unable to agree on terms for the
co-development, co-promotion or co-marketing of GA-EPO in such country,
then, unless the parties agree to extend the negotiation period, MMD shall
promptly deliver to TKT a final proposal detailing the terms on which it
would enter into such a co-development, co-promotion or co-marketing
arrangement (the "Final Proposal"). TKT shall have thirty (30) days from
receipt of the Final Proposal to notify MMD of its desire to enter into an
arrangement on such terms. If TKT does not so notify MMD, then MMD shall be
free, for a period of one year (which shall be extended for an additional
four-month period if MMD has certified to TKT that it is then in active
negotiations with a single Third Party with respect thereto) from the
expiration of such 30 days, to enter into a co-development, co-promotion or
co-marketing arrangement for GA-EPO in the country identified in the
Negotiation Notice with a Third Party on terms no more favorable to the
Third Party than the terms contained in the Final Proposal. Following such
negotiation period, MMD shall not enter into a co-development, co-promotion
or co-marketing arrangement for GA-EPO in any country in the MMD Territory
with a Third Party without first complying with the provisions of this
subsection. Except as otherwise provided in this subsection 5.8.2, it is
understood and agreed to by the parties hereto that MMD shall have no
obligation to enter into a co-development, co-promotion, or co-marketing
arrangement with respect to any country in the MMD Territory with TKT. In
the event that MMD enters into a co-development arrangement for GA-EPO in a
country with a Third Party after complying with the provisions of this
subsection, then TKT shall cooperate with such Third Party in such country
during the Development Phase to the same extent that TKT would cooperate
with MMD.
ARTICLE 6. RESEARCH, DEVELOPMENT AND REGULATORY COORDINATION
6.1. R&D OVERSIGHT COMMITTEE.
6.1.1. GENERAL. Promptly after the Effective Date, a joint
committee comprised of up to three named representatives of MMD and up to
three named representatives of TKT (the "R&D Oversight Committee") shall be
appointed. One of the representatives of TKT shall act as Chairman of the
R&D Oversight Committee. The R&D Oversight Committee shall be responsible
for the supervision of the Research Program. Such meetings shall be held at
TKT's facilities located in Cambridge, Massachusetts, and at such times as
are agreed to by TKT and MMD, or at such other locations or in such other
form (e.g., telephone or video conference) as the members of the R&D
Oversight Committee shall agree, but no less frequently than three times
per year. At such meetings, the principal function of the R&D Oversight
Committee
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
will be to discuss the Research Program *************************
*************************************************************
************************************************** A party may change one
or more of its representatives to the R&D Oversight Committee at any time.
Members of the R&D Oversight Committee may be represented at any meeting by
another member of the R&D Oversight Committee so designated by the absent
member, or by a deputy. Any approval, determination or other action shall
require the affirmative vote of both TKT and MMD*************************
******** as determined by each party's representatives who are members of
the R&D Oversight Committee. Employees, subcontractors or consultants of
either TKT and MMD who are involved with the Program and who are not
members of the R&D Oversight Committee may attend meetings of the Committee
as guests of either party.
6.1.2. MINUTES. The R&D Oversight Committee shall keep accurate
minutes of its deliberations. The Chairman shall be responsible for the
preparation of draft minutes. Draft minutes shall be sent to all members of
the R&D Oversight Committee within ten (10) business days after each
meeting. All records of the R&D Oversight Committee shall be available to
both parties.
6.2. DEVELOPMENT COMMITTEE.
6.2.1. GENERAL. Promptly after the Effective Date, a joint
committee comprised of up to four named representatives of MMD and up to
four named representatives of TKT (the "Development Committee") shall be
appointed. One of the representatives of MMD shall act as Chairman of the
Development Committee. Such meetings shall be held at TKT's facilities in
Cambridge, Massachusetts during the Research Phase, and thereafter in
Kansas City, Missouri, and, in any event, at times and places or in such
form (e.g., telephone or video conference) as the members of the
Development Committee shall agree but no less frequently than three times
per year. At such meetings, the Development Committee will discuss the
Development Phase of GA-EPO, including but not limited to, preclinical and
clinical testing and the preparation of regulatory submissions for approval
of GA-EPO in the MMD Territory. To the extent reasonable or appropriate,
meetings of the Development Committee will be coordinated and held jointly
with the R&D Oversight Committee. A party may change one or more of its
representatives to the Development Committee at any time. Members of the
Development Committee may be represented at any meeting by another member
of the Development Committee so designated by the absent member, or by a
deputy. Any approval, determination or other action shall require the
affirmative vote of a majority of the votes entitled to be cast,
********************************* ***************, and with such votes
being cast as determined by each party's representatives who are members of
the Development Committee. Employees, subcontractors or consultants of
either TKT and MMD who are involved with the Program and who are not
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<PAGE> 25
members of the Development Committee may attend meetings of the Committee
as guests of either party.
6.2.2. MINUTES. The Development Committee shall keep accurate
minutes of its deliberations. The Chairman shall be responsible for the
preparation of draft minutes. Draft minutes shall be sent to all members of
the Development Committee within ten (10) business days after each meeting.
All records of the Development Committee shall at all times be available to
both parties.
6.3. GENERAL DISAGREEMENTS. All disagreements within the R&D
Oversight Committee and the Development Committee shall be resolved in
accordance with the provisions of Section 13.6.
6.4. VISIT OF FACILITIES. Representatives of MMD may, upon reasonable
notice and at times reasonably acceptable to TKT, visit TKT's facilities
where the Research Program is being conducted and consult with personnel of
TKT performing work on the Research Program, and those of any permitted
subcontractors of TKT. Representatives of TKT and MMD may, with the other
party's prior approval, which approval shall not be unreasonably withheld,
visit manufacturing sites and the sites of any clinical trials or other
experiments being conducted by such other party in connection with the
Development Phase. If requested by the other party, TKT and MMD shall cause
appropriate individuals working on the Development Phase to be available
for meetings at the location of the facilities where such individuals are
employed at times reasonably convenient to the party responding to such
request.
6.5. ANNUAL REVIEW AND PLANNING MEETING. No less frequently than
annually, representatives of TKT and MMD shall meet at a place mutually
agreed to by the parties (which, prior to the First Commercial Sale, will
be one of the R&D Oversight Committee or Development Committee
meetings)(the "Annual Meeting"), at which meeting MMD shall review the
clinical, regulatory and marketing activities undertaken by MMD or its
Affiliates since the previous Annual Meeting and shall present its
clinical, regulatory and marketing plans for GA-EPO for the ensuing year.
Within 30 days following each Annual Meeting, MMD shall submit to TKT a
written report detailing the information reviewed and presented at such
Annual Meeting.
ARTICLE 7. MILESTONES AND ROYALTIES
7.1. MILESTONE PAYMENTS. MMD and TKT acknowledge payment by MMD to TKT
of $1,000,000 *************************************
***********************************************************. In
consideration of TKT's work on the Research Program and the licenses
granted to MMD hereunder, MMD has paid or shall pay the following
additional amounts to TKT upon the achievement of each of the following
milestones (except as noted below), prior to any expiration or termination
of this Agreement under Article 12 with respect to the country to which
such milestone relates, it being
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
understood and agreed to that TKT shall use a portion of such payments as
necessary to fund the performance of its obligations under the Program:
---------------------------------------------------------------------------
Milestone Payment
--------- -------
---------------------------------------------------------------------------
Execution of the Original License $9,000,000 (Paid)
Agreement
$5,000,000 Preferred
Stock Investment(1)
(Paid)
---------------------------------------------------------------------------
Initial Public Offering (as defined $5,000,000 Common Stock
in the Class D Stock Purchase Investment(2)
Agreement) ("IPO") by TKT
Additional $5,000,000
Common Stock Investment
(2)
---------------------------------------------------------------------------
***************** Cell Line ****** $2,000,000
*******************
---------------------------------------------------------------------------
******************************** $**************
---------------------------------------------------------------------------
********************************** $**************
---------------------------------------------------------------------------
******************************** $**************
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******************* $**************
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************************************ $**************
************************************
***************
---------------------------------------------------------------------------
****************************** $**************
---------------------------------------------------------------------------
(1) On the terms and subject to the conditions of the Class D Preferred
Stock Purchase Agreement dated as of May 18, 1994, by and between MMD
and TKT (the "Class D Stock Purchase Agreement").
(2) MMD shall purchase shares Common Stock of TKT in the IPO upon the
terms and subject to the conditions of the Class D Stock Purchase
Agreement.
Either TKT or MMD shall notify the other in writing within ten (10)
business days following the occurrence of each of the milestones set forth
above. Within ten (10) business days after receipt of such notice, MMD
shall pay to TKT in United States dollars by check or other means
acceptable to TKT, the milestone payments set forth above. Milestone
payments made to TKT pursuant to this Section 7.1 are not refundable under
any circumstances and will not be credited against royalty payments due TKT
under Section 7.2.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
7.2. ROYALTIES. In consideration of the licenses granted to MMD
hereunder, MMD shall pay to TKT royalties as follows:
7.2.1. ROYALTIES BASED ON NET SALES OF GA-EPO. Except as otherwise
provided in this Section 7.2., MMD shall pay to TKT a royalty based on the
Net Sales of GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology in each Territory Block, from the launch of such sales in such
Territory Block until, with respect to any country, the expiration or
termination of this Agreement, at the rates set forth below:
********************************* ***************
******************************************* **************
------------------------------------------- --------------
************************** *****
********* *****
***********************************************************
************************.
For the purpose of calculating ******************** in a Territory Block:
(i) Net Sales for the ************* and ***** ******* Territory Blocks
*****************, and such ************ ***** shall be deemed to be the
******************** for each of the *******************************
Territory Blocks; (ii) *** ******************************* Territory Blocks
******** ************************************* shall be deemed to be the
******************** for each of the ***************** Territory Blocks;
and (iii) with respect to sales in the *************,
********************** Territory Blocks by a Third Party sublicensee or a
distributor which is not an Affiliate of MMD, the Net Revenues shall be
used in lieu of the Net Sales in the foregoing calculation of
********************.
7.2.2. ALTERNATIVE ROYALTY BASED ON GROSS MARGIN. Notwithstanding
the provisions of subsection 7.2.1., in *****
************************************ Territory Blocks, the royalty payable
by MMD to TKT shall be as follows: (i) if MMD sells GA-EPO finished product
in final packing form (whether or not with final labels) covered by the TKT
Patent Rights or which uses the TKT Technology to a Third Party sublicensee
or distributor which is not an Affiliate of MMD, MMD shall pay to TKT a
royalty equal to ***************************************** *************;
or (ii) if MMD does not sell such GA-EPO finished product in final packing
form (whether or not with final labels) to such Third Party sublicensee or
distributor, then TKT and MMD shall negotiate in good faith to share
********************* all other monetary consideration received by MMD from
such Third Party sublicensee or distributor.
7.2.3. SHARING OF REVENUES FROM SUBLICENSEES. If MMD grants a
sublicense hereunder to any Third Party to make,
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
have made, use, distribute for sale or sell GA-EPO covered by the TKT
Patent Rights or which uses the TKT Technology in any country in the MMD
Territory, MMD shall share with TKT, *************** *****, all up front
monetary consideration received by MMD from such Third Party in connection
therewith which are not based upon Net Sales or Net Revenues, as
applicable, of GA-EPO sold by such Third Party sublicensee in such country.
7.2.4. ADJUSTMENT OF ROYALTY RATES. At the request of MMD, the
royalty rates set forth in subsection 7.2.1. shall be appropriately
adjusted by TKT and MMD (i) with respect to sales of "generic" or
"non-branded" GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology by MMD in any country within a Territory Block in which MMD
elects to make such sales to compete with sales by any Third Party of a
"generic" or "non-branded" pharmaceutical formulation of erythropoietin
protein or (ii) with respect to sales of "branded" GA-EPO covered by the
TKT Patent Rights or which uses the TKT Technology by MMD in any country
within the MMD Territory in which MMD experiences competition in the market
for GA-EPO which was not in existence on the Effective Date and the TKT
Patent Rights have been judged to be invalid or unenforceable. In addition,
TKT agrees to meet with MMD at its request and negotiate in good faith
concerning whether other adjustments to the royalty rates set forth in
subsection 7.2.1. should be made in the event that MMD demonstrates to
TKT's reasonable satisfaction that there have been structural changes in
the market for GA-EPO in any country which have rendered the royalty rates
set forth in subsection 7.2.1. commercially unreasonable.
At the request of MMD, the royalty rates set forth in subsection
7.2.2. shall be appropriately adjusted by TKT and MMD (i) with respect to
sales of "branded", "non-branded" or "generic" GA-EPO covered by the TKT
Patent Rights or which uses the TKT Technology in any country within a
Territory Block in which competitive conditions make it not feasible for
MMD to maintain the level of its Gross Margin or (ii) as may otherwise be
necessary to maintain the commercial viability of the product as
contemplated by this Agreement.
7.3. ROYALTY REPORTS, EXCHANGE RATES. During the term of this
Agreement, following the First Commercial Sale of GA-EPO covered by the TKT
Patent Rights or which uses the TKT Technology in any country in the MMD
Territory, MMD shall furnish to TKT a written quarterly report showing with
respect to GA-EPO, on a country by country basis (except as provided
below): (i) the gross sales (except for sales to which subsection 7.2.2
applies) of all GA-EPO covered by the TKT Patent Rights or which uses the
TKT Technology sold by MMD and its Affiliates, its distributors and its
permitted sublicensees in the MMD Territory during the reporting period;
(ii) the calculation of Net Sales (except for sales to which subsection
7.2.2 applies) from such gross sales; (iii) the Gross Margin related to
sales to which subsection 7.2.2 applies and the calculation of such Gross
Margin; (iv) any revenues from sublicensees received by MMD during the
reporting
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
period; (v) the royalties and other payments payable in United States
dollars which shall have accrued hereunder in respect of such Net Sales,
Gross Margin and sublicensee payments; (vi) withholding taxes, if any,
required by law to be deducted as a payment by TKT in respect of such Net
Sales, Gross Margin and sublicensee payments; (vii) the dates of the First
Commercial Sales of GA-EPO covered by the TKT Patent Rights or which uses
the TKT Technology in any country in the MMD Territory during the reporting
period; and (viii) the exchange rates used in determining the amount of
United States dollars. All amounts payable will first be calculated in the
currency of sale and then converted into United States dollars on a
quarterly basis using as a rate of exchange the actual foreign currency
exchange rate on the last day of the month preceding the end of the quarter
or such other method as is consistent with MMD's internal foreign currency
translation procedures. MMD shall use its best efforts to provide such
reports on the sixtieth (60th) day following the close of each quarter. If
no royalty is due for any royalty period hereunder, MMD shall so report.
MMD shall keep complete and accurate records in sufficient detail to
properly reflect all gross sales, Net Sales and Gross Margin and to enable
the royalties payable hereunder to be determined.
7.4. AUDITS.
7.4.1. PROCEDURE. Upon the written request of TKT or MMD, the
other party shall permit an internal auditor or independent public
accountant selected by TKT or MMD, as the case may be, and acceptable to
the other party, which acceptance shall not be unreasonably withheld, to
have access during normal business hours to such of the records of MMD or
TKT, as the case may be, as may be reasonably necessary to verify the
accuracy of the royalty reports, cost computations and final cost amounts
described hereunder, in respect of any fiscal year ending not more than
*********************** prior to the date of such request. All such
verifications shall be conducted at TKT's or MMD's, as the case may be,
expense and not more than ******** in each calendar year.
7.4.2. EXPENSES. In the event such accountant concludes that
additional royalties or lower expense reimbursement were required during
such period, and the party receiving such audit request agrees with such
conclusion, the additional royalty shall be paid in accordance with Section
7.5 or the excess expense reimbursement shall be promptly repaid. The fees
charged by such accountant shall be paid by the party requesting such
audit, unless the audit discloses and the party receiving such audit
request agrees (i) in the case of an audit by TKT, that the royalties
payable by MMD, or, (ii) in the case of an audit by MMD, that the cost
computation estimates and final amounts hereunder, for the audited period
are incorrect by more than *****************, in which case the audited
party shall pay the reasonable fees and expenses charged by the accountant.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
7.4.3. SUBLICENSES. MMD shall use reasonable efforts to include in
each Third Party sublicense granted by it pursuant to this Agreement a
provision requiring the sublicensee to make reports to MMD, to keep and
maintain records of sales made pursuant to such sublicense and to grant
access to such records by TKT's independent accountant to the same extent
required of MMD under this Agreement. Upon the expiration of
*********************** following the end of any fiscal year, the
calculation of royalties payable with respect to such year shall be binding
and conclusive upon TKT; and MMD and its sublicensees shall be released
from any liability or accountability with respect to royalties for such
year.
7.4.4. CONFIDENTIAL TREATMENT. Each party agrees that all
information subject to review under this Section 7.4 or under any
sublicense agreement is confidential and that such party shall cause its
accountant to retain all such information in confidence.
7.5. ROYALTY PAYMENT TERMS. Royalties shown to have accrued by each
royalty report provided for under this Agreement shall be due and payable
on the date such royalty report is due. Payment of royalties in whole or in
part may be made in advance of such due date. Royalties determined to be
owing, and any overpayments to be credited, with respect to any prior
quarter shall be added or credited, as the case may be, to the next
quarterly payment hereunder.
7.6. FORM OF PAYMENT. All research payments, milestone payments,
royalties and other payments due hereunder shall be paid in United States
dollars. If at any time legal restrictions prevent the prompt remittance of
part or all royalties with respect to any country of the MMD Territory
where GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology is sold, payment shall be made through such lawful means or
methods as MMD may determine.
7.7. WITHHOLDING TAXES. All royalties payable to TKT hereunder shall
be paid without deductions of any withholding taxes, value-added taxes or
other taxes, levies or charges applicable to such payments, other than (i)
United States taxes payable by TKT and (ii) foreign taxes payable by TKT to
the extent that such taxes are imposed by reason of TKT's having a
permanent establishment in any country within the MMD Territory or
otherwise being subject to taxation by such country (except foreign taxes
imposed solely by reason of the license granted to MMD hereunder). MMD
shall be credited for the net benefit realized by TKT for any foreign tax
deductions or credits taken by TKT with respect to such amounts paid by
MMD. In addition, any reorganization of TKT or an Affiliate of TKT with or
into an entity organized outside the United States shall not result in any
increased costs to MMD under this Agreement. Each party will assist the
other party in claiming tax refunds, deductions or credits at the other
party's request and will cooperate to
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
minimize the withholding tax, if available, under various treaties
applicable to any payment made hereunder.
7.8. INTEREST ON LATE PAYMENTS. Any payments by either party that are
not paid on or before the date such payments are due under this Agreement
shall bear interest, to the extent permitted by law, at the London
Interbank Offering Rate as set by Citibank, N.A. from time to time, plus 50
basis points, calculated on the number of days payment is delinquent.
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS
8.1. OWNERSHIP.
8.1.1. OWNERSHIP OF DISCOVERIES AND IMPROVEMENTS. All right,
title and interest in all writings, inventions, discoveries, improvements
and other technology, whether or not patentable or copyrightable, and any
patent applications, patents or copyrights based thereon (collectively, the
"Inventions") that are discovered, made or conceived during and as a result
of the Research Phase or the Development Phase solely by employees of TKT
or others acting on behalf of TKT ("TKT Inventions") shall be owned by TKT.
***********************************************
*************************************************************
********************************************************
**************************************************************
*****************************************************************
*************************************************************
**************************************************************** ********.
All right, title and interest in all Inventions that are discovered, made
or conceived during and as a result of the Research Phase or the
Development Phase or thereafter solely by employees of MMD or others acting
on behalf of MMD ("MMD Inventions") shall be owned by MMD. All right, title
and interest in all Inventions that are discovered, made or conceived
during and as a result of the Research Phase or the Development Phase or
thereafter jointly by employees of TKT and MMD or others acting on their
behalf (the "Joint Inventions") shall be jointly owned by MMD and TKT. Each
party shall promptly disclose to the other party the making, conception or
reduction to practice of Inventions by employees or others acting on behalf
of such party. The parties acknowledge that the ownership rights set forth
above are subject to the license grants set forth in Article 3.
8.1.2. COOPERATION OF EMPLOYEES. Each party represents and agrees
that its employees and consultants shall be obligated under a binding
written agreement to assign to such party, or as such party shall direct,
all Inventions made or conceived during and as a result of the Research
Phase or the Development Phase by such employee or consultant. In the case
of non-employees working for other companies or institutions on behalf of
TKT or MMD, TKT or MMD, as applicable, shall use reasonable efforts to
obtain the right to license all Inventions made by such non-employees on
behalf of TKT or MMD, as
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applicable, in accordance with the policies of the company or institution
employing such non-employee. TKT and MMD agree to undertake to enforce such
agreements with employees or others or such rights pertaining to
non-employees (including, where appropriate, by legal action) considering,
among other things, the commercial value of such Inventions.
8.2. FILING, PROSECUTION AND MAINTENANCE OF TKT PATENT RIGHTS AND TKT
TECHNOLOGY.
8.2.1. ************************************. *** *
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*****************
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8.2.2. PATENT FILING COSTS. *** shall bear all costs associated
with filing, prosecuting and maintaining patent applications and patents
covering the TKT Patent Rights in all countries in the MMD Territory.
8.3. COOPERATION. Each party shall make available to the other party
(or to the other party's authorized attorneys, agents or representatives),
its employees, agents, subcontractors or consultants to the extent
reasonably necessary or appropriate to enable the appropriate party to
file, prosecute and maintain patent applications and resulting patents with
respect to Inventions owned by a party and for periods of time reasonably
sufficient for such party to obtain the assistance it needs from such
personnel. Where appropriate, each party shall sign or cause to have signed
all documents relating to said patent applications or patents at no charge
to the other party. Notwithstanding the foregoing, MMD shall not be
precluded from contesting the validity or enforceability of the TKT Patent
Rights or TKT Technology.
8.4. NOTIFICATION OF PATENT TERM RESTORATION. *** shall notify *** of
(i) the issuance of each patent included within the TKT Patent Rights,
giving the date of issue and patent number for each such patent, and (ii)
each notice pertaining to any patent included within the TKT Patent Rights
which it receives as patent owner pursuant to the Drug Price Competition
and Patent Term Restoration Act of 1984 (hereinafter called the "Act"), or
other similar laws now or hereafter in effect, or pursuant to comparable
laws or regulations in other countries in the MMD Territory. The parties
shall cooperate with each other in applying for patent term extensions
(including Supplementary Protection Certificates in European Community
Countries) where applicable in any country of the MMD territory. *** shall
also notify *** of each application filed for patent term extension, any
allegations of failure to show due diligence and all awards of patent term
extensions with respect to the TKT Patent Rights. Such notices shall be
given promptly, but in any event within ten (10) business days after
receipt of each such notice pursuant to the Act (or comparable laws or
regulations in other countries in the MMD Territory). *** shall notify ***
of each filing for patent term restoration under the Act (or comparable
laws or
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
regulations in other countries in the MMD Territory), any allegations of
failure to show due diligence and all awards of patent term restoration
(extensions) with respect to the TKT Patent Rights.
8.5. NO OTHER TECHNOLOGY RIGHTS. Except as otherwise expressly
provided in this Agreement, under no circumstances shall a party hereto, as
a result of this Agreement, obtain any ownership interest in or other right
to any technology, know-how, patents, pending patent applications,
products, or biological materials of the other party, including items
owned, controlled or developed by the other party, or transferred by the
other party to said party, at any time pursuant to this Agreement. It is
understood and agreed that this Agreement does not grant MMD any license or
other right in the TKT Patent Rights for uses other than the production,
manufacture, use, distribution for sale and sale of GA-EPO covered by the
TKT Patent Rights or which uses the TKT Technology.
8.6. ENFORCEMENT OF TKT PATENT RIGHTS AND TKT TECHNOLOGY; DEFENSE OF
INFRINGEMENT ACTIONS. TKT and MMD shall each promptly, but in any event no
later than ten (10) business days after receipt of notice of such action,
notify the other in writing of any patent nullity actions, any declaratory
judgment actions or any alleged or threatened infringement of patents or
patent applications or misappropriation of intellectual property comprising
the TKT Patent Rights or the TKT Technology or if either party, or any of
their respective Affiliates, shall be individually named as a defendant in
a legal proceeding by a Third Party alleging infringement of a patent or
other intellectual property right as a result of the manufacture,
production, use, distribution for sale or sale of GA-EPO, or of any other
information or notification regarding the TKT Patent Rights or TKT
Technology.
8.6.1. ****************************. **************
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8.6.2. *****************************************.
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8.6.3. ************************************ ********.
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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8.6.4. *****************************. ************
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8.6.5. *****************************************
************************************. ************************
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8.7. ***************************************************
**********************. ********************************
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ARTICLE 9. CONFIDENTIALITY
9.1. NONDISCLOSURE OBLIGATIONS.
9.1.1. GENERAL. Except as otherwise provided in this Article 9,
during the term of this Agreement and for a period of ten (10) years
thereafter, both parties shall maintain in confidence and use only for
purposes specifically authorized under this Agreement (i) confidential
information and data received from the other party resulting from or
related to the development of GA-EPO and (ii) all information and data not
described in clause (a) but supplied by the other party under this
Agreement marked "Confidential."
9.1.2. LIMITATIONS. For purposes of this Article 9, information
and data described in paragraph (a) or (b) shall be referred to as
"Information." To the extent it is reasonably necessary or appropriate to
fulfil its obligations or exercise
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
its rights under this Agreement, a party may disclose Information it is
otherwise obligated under this Section not to disclose to its Affiliates,
sublicensees, consultants, outside contractors and clinical investigators,
on a need-to-know basis on condition that such entities or persons agree to
keep the Information confidential for the same time periods and to the same
extent as such party is required to keep the Information confidential; and
a party or its sublicensees may disclose such Information to government or
other regulatory authorities to the extent that such disclosure is
reasonably necessary to obtain patents or authorizations to conduct
clinical trials of, and to commercially market, GA-EPO. The obligation not
to disclose Information shall not apply to any part of such Information
that (i) is or becomes part of the public domain other than by unauthorized
acts of the party obligated not to disclose such Information or its
Affiliates or sublicensees; (ii) can be shown by written documents to have
been disclosed to the receiving party or its Affiliates or sublicensees by
a Third Party, provided such Information was not obtained by such Third
Party directly or indirectly from the other party under this Agreement
pursuant to a confidentiality agreement; (iii) prior to disclosure under
this Agreement, was already in the possession of the receiving party or its
Affiliates or sublicensees, provided such Information was not obtained
directly or indirectly from the other party under this Agreement pursuant
to a confidentiality agreement; (iv) can be shown by written documents to
have been independently developed by the receiving party or its Affiliates
without breach of any of the provisions of this Agreement; or (v) is
disclosed by the receiving party pursuant to oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand issued by a court or governmental agency; provided
that the receiving party notifies the other party immediately upon receipt
thereof (and provided that the disclosing party furnishes only that portion
of the Information which it is advised by counsel is legally required).
9.2. MATERIALS.
9.2.1. ******************************. ***********
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9.2.2. SAMPLES. Samples of compounds synthesized, purified or
developed in the course of the Research and
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Development Program shall not be supplied or sent by either party to any
Third Party, other than to regulatory agencies or for use in clinical
trials, unless protected by an appropriate materials transfer agreement.
Samples of compounds other than those described above provided by one party
(the "supplying party") to the other party (the "receiving party") in the
course of the Research Program shall not be supplied or sent by the
receiving party to any Third Party, other than to regulatory agencies or
for use in clinical trials, without the written consent of the supplying
party.
9.3. TERMS OF THIS AGREEMENT. TKT and MMD each agree not to disclose
any terms or conditions of this Agreement to any Third Party without the
prior consent of the other party, except as required by applicable law. If
TKT determines that it is required to file with the Securities and Exchange
Commission or other governmental agency this Agreement as an exhibit to the
registration statement relating to the IPO or otherwise, TKT shall request
confidential treatment of such portions of this Agreement as it and MMD
shall together determine. Notwithstanding the foregoing, within 15 days
after the execution of this Agreement, MMD and TKT shall agree upon the
substance of information that can be used as a routine reference in the
usual course of business to describe the terms of this transaction, and MMD
and TKT may disclose such information, as modified by mutual agreement from
time to time, without the other party's consent; provided, however, that if
either party determines that excessive use of such statement is made by the
other party, then the party determined to be using such statement
excessively shall, upon notice by the other party, cease making such
statement.
9.4. PUBLICATIONS.
9.4.1. PROCEDURE. Each party recognizes the mutual interest in
obtaining valid patent protection. Consequently, either party and its
employees or consultants or any other Third Party wishing to make a
publication (including any oral disclosure made without obligation of
confidentiality) relating to work performed by such party as part of the
Program (the "Publishing Party") shall transmit to the other party (the
"Reviewing Party") a copy of the proposed written publication at least
******************** prior to submission for publication, or an abstract of
such oral disclosure at least ***************** prior to submission of the
abstract or the oral disclosure, whichever is earlier. The Reviewing Party
shall have the right (a) to propose modifications to the publication for
patent reasons, (b) to request a delay in publication or presentation in
order to protect patentable information, or (c) to request that the
information be maintained as a trade secret and, in such case, the
Publishing Party shall not make such publication.
9.4.2. DELAY. If the Reviewing Party requests a delay as described
in subsection 9.4.1. (b) the Publishing Party shall delay submission or
presentation of the publication for a
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
period of **************** to enable patent applications protecting each
party's rights in such information to be filed.
9.4.3. RESOLUTION. Upon the receipt of written approval of the
Reviewing Party, the Publishing Party may proceed with the written
publication or the oral presentation.
9.5. INJUNCTIVE RELIEF. The parties hereto understand and agree that
remedies at law may be inadequate to protect against any breach of any of
the provisions of this Article 9 by either party or their employees,
agents, officers or directors or any other person acting in concert with it
or on its behalf. Accordingly, each party shall be entitled to the granting
of injunctive relief by a court of competent jurisdiction against any
action that constitutes any such breach of this Article 9. It is understood
that such injunctive relief is intended solely as provisional relief
pending the dispute resolution procedures described in Section 13.6 hereof.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
10.1. GENERAL.
10.1.1. AUTHORIZATION. Each party represents and warrants to the
other that it has the legal right and power to enter into this Agreement,
to extend the rights and licenses granted to the other in this Agreement,
and to fully perform its obligations hereunder, and that the performance of
such obligations will not conflict with its charter documents or any
agreements, contracts or other arrangements to which it is a party.
10.1.2. NO INCONSISTENT TKT ARRANGEMENTS. TKT represents and
warrants that it has full power and authority to grant the license set
forth in Article 3 hereof and that there are no agreements, assignments,
encumbrances or other arrangements inconsistent with this Agreement
including, without limitation, any obligations to governmental agencies,
private foundations or corporate entities resulting from acceptance of
research grant monies, equity investments, corporate sponsorships or
otherwise.
10.1.3. EXCLUSIVITY. TKT represents and warrants that MMD is the
exclusive licensee of the TKT Technology owned by TKT and the TKT Patent
Rights with respect to the manufacture, use or sale of GA-EPO in the MMD
Territory.
10.1.4. LICENSED TECHNOLOGY. TKT represents and warrants that,
as of the Effective Date, the TKT Patent Rights and TKT Technology do not
include any intellectual property licensed to TKT from a Third Party other
than those included in a License Agreement ******************************
**************************************************************************
***.
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10.2. PATENT VALIDITY.
10.2.1. TITLE. TKT represents and warrants that as of the
Effective Date, it possesses the exclusive right, title and interest in and
to the TKT Technology owned by TKT and the TKT Patent Rights and that it
has the full legal right and power to: (i) enter into the obligations set
forth in this Agreement; and (ii) grant the rights and licenses set forth
in Article 3.
10.2.2. NO ENCUMBRANCES. TKT represents and warrants as of the
Effective Date, to the best of its actual knowledge and based upon the
advice of its counsel, to the best of such counsel's actual knowledge
without undertaking any independent investigation, (i) that there were no
encumbrances, liens or other claims affecting the TKT Technology owned by
TKT or the TKT Patent Rights and (ii) that such TKT Technology and TKT
Patent Rights were valid, enforceable and free from infringement, and that
there were no pending or threatened actions, suits or proceedings relating
thereto or to GA-EPO.
10.2.3. NON-INFRINGEMENT. TKT represents and warrants that as of
the Effective Date, to the best of its actual knowledge and based upon the
advice of its counsel, to the best of such counsel's actual knowledge
without undertaking any independent investigation, there were no legal
obstacles, including no patent rights or other proprietary rights of
others, which will prevent it from carrying out its obligations under this
Agreement or prevent MMD from carrying out its obligations under this
Agreement or which will be infringed by the performance of either party's
obligations under this Agreement.
10.3. FINANCIAL STATEMENTS. TKT represents and warrants that Schedule
10.3 hereto sets forth TKT's most recent regularly prepared balance sheet,
that such balance sheet is true and correct and fairly presents the
financial condition of TKT as of its date, and that the total assets set
forth thereon are less than $10,000,000.
ARTICLE 11. INDEMNITY
11.1. MMD INDEMNITY OBLIGATIONS. In the absence of TKT's negligence or
a breach of representation, warranty, covenant or agreement by TKT, MMD
agrees to defend, indemnify and hold TKT, its Affiliates and their
respective employees and agents harmless from all claims, losses, damages
or expenses arising as a result of (a) actual or asserted violations of any
applicable law or regulation by MMD or its Affiliates or sublicensees by
virtue of which GA-EPO covered by the TKT Patent Rights or which uses the
TKT Technology manufactured, distributed or sold shall be alleged or
determined to be adulterated, misbranded, mislabeled or otherwise not in
compliance with any applicable law or regulation or (b) claims for bodily
injury, death or property damage attributable to MMD's performance of its
obligations under this Agreement or the manufacture,
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<PAGE> 41
distribution, sale or use of GA-EPO covered by the TKT Patent Rights or
which uses the TKT Technology by MMD or its Affiliates or sublicensees.
11.2. TKT INDEMNITY OBLIGATIONS. In the absence of MMD's negligence or
a breach of representation, warranty, covenant or agreement by MMD, TKT
agrees to defend, indemnify and hold MMD, its Affiliates and sublicensees
and their respective employees and agents harmless from all claims, losses,
damages and expenses arising as a result of (a) actual or asserted
violations of any applicable law or regulation by TKT or its Affiliates or
licensees by virtue of which GA-EPO covered by the TKT Patent Rights or
which uses the TKT Technology manufactured, distributed or sold shall be
alleged or determined to be adulterated, misbranded, mislabeled or
otherwise not in compliance with any applicable law or regulation or (b)
claims for bodily injury, death or property damage attributable to TKT's
performance of its obligations under this Agreement.
11.3. PROCEDURE. A party or any of its Affiliates or their respective
employees or agents (the "Indemnitee") that intends to claim
indemnification under this Article 11 shall promptly notify the other party
(the "Indemnitor") of any claim, loss, damage, or expenses in respect of
which the Indemnitee intends to claim such indemnification reasonably
promptly after the Indemnitee is aware thereof, and the Indemnitor shall
assume the defense of any related third party action, suit or proceeding
with counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that
an Indemnitee shall have the right to retain its own counsel, with the fees
and expenses to be paid by the Indemnitor, if representation of such
Indemnitee by the counsel retained by the Indemnitor would be inappropriate
due to actual or potential differing interests between such Indemnitee and
any other party represented by such counsel in such proceedings. The
indemnity agreement in this Article 11 shall not apply to amounts paid in
settlement of any claim, loss, damage or expense if such settlement is
effected without the consent of the Indemnitor, which consent shall not be
withheld unreasonably. The failure of an Indemnitee to deliver notice to
the Indemnitor within a reasonable time after becoming aware of any such
matter, if prejudicial to the Indemnitor's ability to defend such action,
shall relieve the Indemnitor of any liability to the Indemnitee under this
Article 11. The Indemnitor shall not have any liability to any Indemnitee
otherwise than under this Article 11. The Indemnitee under this Article 11
and its employees and agents shall cooperate fully with the Indemnitor and
its legal representatives in the investigation of any matter covered by
this indemnification. The Indemnitor shall additionally be liable to pay
the reasonable legal costs and attorneys' fees incurred by the Indemnitee
in establishing a successful claim for indemnity hereunder.
11.4. INSURANCE. For the period starting with the First Commercial
Sale of GA-EPO MMD and TKT shall each maintain product
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
liability insurance with respect to development, manufacture and sale of
GA-EPO covered by the TKT Patent Rights or which uses the TKT Technology in
reasonable amounts determined after consultation with each other, for the
term of this Agreement (if such insurance is an occurrence-basis policy) or
for an additional ********* after the expiration or termination of this
Agreement (if such insurance is a claims-made basis policy).
ARTICLE 12. TERM AND TERMINATION
12.1. EXPIRATION. Unless terminated earlier pursuant to Section 12.2,
this Agreement shall expire and the licenses granted by TKT to MMD
hereunder shall become fully paid, with respect to each country in the MMD
Territory, upon the later of (i) ********* after the First Commercial Sale
of GA-EPO covered by the TKT Patent Rights or which uses the TKT Technology
by MMD or its Affiliates or sublicensees in such country and (ii) the last
to expire of any of the then existing patents included in the TKT Patent
Rights in such country.
12.2. TERMINATION. This Agreement may be terminated in the following
circumstances:
12.2.1. By either party by reason of a material breach not
described in subsection 12.2.5 that the breaching party fails to remedy
within ******* after written notice thereof by the non-breaching party;
12.2.2. By MMD upon ******** prior written notice with respect to
all or a portion of the MMD Territory, if, in its reasonable judgment, MMD
determines that toxicities or side effects directly attributable to GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology have
rendered it such a safety risk to the patient population that GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology is
commercially nonviable;
12.2.3. By MMD, upon ******** prior written notice, with respect
to any portion of the MMD Territory if, after consultation with TKT, MMD
determines that GA-EPO covered by the TKT Patent Rights or which uses the
TKT Technology is commercially nonviable;
12.2.4. By TKT, with respect to the country or relevant portion
of the MMD Territory, in the event that TKT elects to respond to or defend
against a legal proceeding by a Third Party alleging infringement of a
patent or other intellectual property right as a result of the manufacture,
production, use, distribution for sale or sale of GA-EPO in any country in
the MMD Territory pursuant to subsection 8.6.5 provided that the failure to
so respond or defend against such action would have had a material adverse
impact on MMD's ability to market GA-EPO, either directly or indirectly
through sublicensees, in such country or relevant portion of the MMD
Territory;
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
12.2.5. By TKT, with respect to the relevant portion of the MMD
Territory, in the event that either (i) MMD fails to use its best efforts
to meet the milestones described in APPENDIX A applicable to such portion
of the MMD Territory or (ii) MMD fails to use its best efforts to
commercialize GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology in such portion of the MMD Territory using commercially
reasonable means consistent with those used for MMD products with similar
commercial potential, and, in either or both events, MMD fails to remedy or
take reasonable action to initiate a remedy of such default within *******
after notice thereof by TKT; provided that termination by TKT pursuant to
this subsection 12.2.5 shall be TKT's sole remedy for any such failure by
MMD to meet such milestones or commercialize GA-EPO covered by the TKT
Patent Rights or which uses the TKT Technology;
12.2.6. If a competing GA-EPO product is introduced into any
country in the MMD Territory, and TKT does not have issued patents or
pending claims under the patents included in the TKT Patent Rights which
(if issued, in the case of pending claims) will enable a patent
infringement action to be initiated, then MMD has the right to terminate as
to any such country or the Territory Block in which it is included on
******** notice; or
12.2.7. By either party upon bankruptcy, insolvency, dissolution
or winding up of the other.
12.3. EFFECT OF TERMINATION. Expiration or termination of this
Agreement shall not relieve the parties of any obligation accruing prior to
such expiration or termination. The provisions of Section 3.2 (with respect
only to licenses granted prior to the time of expiration or termination and
subject to the terms described below) and Article 7 (with respect only to
milestone payments and royalties accrued at the time of expiration or
termination but not yet paid), Article 8, Article 9 and Article 11 shall
survive the expiration or termination of this Agreement. In the event of a
termination of this Agreement pursuant to subsections 12.2.1 to 12.2.7,
then all TKT Patent Rights licensed hereunder with respect to the portion
of the MMD Territory terminated will be returned to TKT and, except in the
event that this Agreement is terminated by TKT pursuant to subsection
12.2.1, copies of all regulatory filings and related supporting and other
materials prepared in connection with such terminated portion of the MMD
Territory shall also be delivered to and available for use by TKT, and in
any event MMD will immediately cease to sell GA-EPO covered by the TKT
Patent Rights or which uses the TKT Technology in the relevant portion of
the MMD Territory with respect to which this Agreement is terminated. In
the event of termination of this Agreement in all countries within the MMD
Territory, MMD will ******************************************************
**************************************************************************
**************************************************************************
**************************************************************************
****************. Except in the event that this Agreement is
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terminated by TKT pursuant to subsection 12.2.1, MMD shall, to the extent
legally permissible, take all additional action reasonably necessary to
assign all of its right, title and interest in and transfer possession and
control to TKT of the regulatory filings prepared by MMD to the extent that
such filings relate to GA-EPO covered by the TKT Patent Rights or which use
the TKT Technology and any regulatory approvals received by MMD to the
extent that such approvals relate to GA-EPO covered by the TKT Patent
Rights or which use the TKT Technology; provided, however, that MMD may
retain a joint ownership interest in such filings and approvals to the
extent that such filings or approvals are necessary under this Agreement
for portions of the MMD Territory with respect to which this Agreement has
not been terminated or for the development or commercialization by MMD of
products other than GA-EPO covered by the TKT Patent Rights or which use
the TKT Technology. In the event of a termination of this Agreement other
than by TKT pursuant to subsections 12.2.1 or 12.2.5, TKT shall be
obligated to pay to MMD compensation on such commercially reasonable terms
as shall be determined by mutual agreement of TKT and MMD for the use of
all licenses granted by MMD under Section 3.2.
ARTICLE 13. MISCELLANEOUS
13.1. FORCE MAJEURE. Neither party shall be held liable or responsible
to the other party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement when such failure or delay is caused by or results from causes
beyond the reasonable control of the affected party, including but not
limited to fire, floods, embargoes, war, acts of war (whether war is
declared or not), insurrections, riots, civil commotions, strikes, lockouts
or other labor disturbances, acts of God or acts, omissions or delays in
acting by any governmental authority or the other party.
13.2. ASSIGNMENT. This Agreement may not be assigned or otherwise
transferred by either party without the consent of the other party;
provided, however, that either TKT or MMD may, without such consent, assign
its rights and obligations under this Agreement (i) in connection with a
corporate reorganization, to any Affiliate, all or substantially all of the
equity interest of which is owned and controlled by such party or its
direct or indirect parent corporation, or (ii) in connection with a merger,
consolidation or sale of substantially all of such party's assets to an
unrelated third party; provided, however, that such party's rights and
obligations under this Agreement shall be assumed by its successor in
interest in any such transaction and shall not be transferred separate from
all or substantially all of its other business assets, including those
business assets that are the subject of this Agreement. Any purported
assignment in violation of the preceding sentence shall be void. Any
permitted assignee shall assume all obligations of its assignor under this
Agreement.
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13.3. SEVERABILITY. Each party hereby agrees that it does not intend
to violate any public policy, statutory or common laws, rules, regulations,
treaty or decision of any government agency or executive body thereof of
any country or community or association of countries. Should one or more
provisions of this Agreement be or become invalid, the parties hereto shall
substitute, by mutual consent, valid provisions for such invalid provisions
which valid provisions in their economic effect are sufficiently similar to
the invalid provisions that it can be reasonably assumed that the parties
would have entered into this Agreement with such valid provisions. In case
such valid provisions cannot be agreed upon, the invalidity of one or
several provisions of this Agreement shall not affect the validity of this
Agreement as a whole, unless the invalid provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that the
parties would not have entered into this Agreement without the invalid
provisions.
13.4. NOTICES. Any consent, notice or report required or permitted to
be given or made under this Agreement by one of the parties hereto to the
other shall be in writing, delivered personally or by facsimile (and
promptly confirmed by telephone, personal delivery or courier) or courier,
postage prepaid (where applicable), addressed to such other party at its
address indicated below, or to such other address as the addressee shall
have last furnished in writing to the addressor and shall be effective upon
receipt by the addressee.
If to
TKT: Transkaryotic Therapies, Inc.
195 Albany Street
Cambridge, Massachusetts 02139
Attention: President
Telephone: (617) 349-0200
Telecopy: (617) 491-7903
with a copy to: Palmer & Dodge
One Beacon Street
Boston, Massachusetts 02108
Attention: Peter Wirth, Esq.
Telephone: (617) 573-0100
Telecopy: (617) 227-4420
If to MMD: Marion Merrell Dow Inc.
9300 Ward Parkway
Kansas City, Missouri 64114-0480
Attention: General Counsel
Telephone: (816) 966-4000
Telecopy: (816) 966-3805
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with copies to: Marion Merrell Dow Inc.
2110 E. Galbraith Rd.
Cincinnati, OH 45215
Attention: General Patent Counsel
Telephone: (513) 948-7960
Telecopy: (513) 948-7961
and
Shook, Hardy & Bacon, P.C.
One Kansas City Place
1200 Main Street, Suite 3100
Kansas City, Missouri 64105
Attention: Randall B. Sunberg, Esq.
Telephone: (816) 474-6550
Telecopy: (816) 421-5547
13.5. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
giving effect to the choice of law provisions thereof.
13.6. DISPUTE RESOLUTION. Any disputes arising between the parties
relating to, arising out of or in any way connected with this Agreement or
any term or condition hereof, or the performance by either party of its
obligations hereunder, whether before or after termination of this
Agreement, shall be promptly presented to the Chief Executive Officers of
TKT and MMD for resolution and if the Chief Executive Officers or their
designees cannot promptly resolve such disputes, then such dispute shall be
finally resolved by binding arbitration, except that disputes arising
within the Development Committee shall be ultimately resolved, without the
use of arbitration, by the Chief Executive Officer of MMD. Whenever a party
shall decide to institute arbitration proceedings, it shall give written
notice to that effect to the other party. The party giving such notice
shall refrain from instituting the arbitration proceedings for a period of
sixty (60) days following such notice. Any arbitration hereunder shall be
conducted under the commercial rules of the American Arbitration
Association. Each such arbitration shall be conducted in the English
language by a panel of three arbitrators appointed in accordance with such
rules; provided, however, that both parties hereto shall be entitled to
representation by counsel, to appear and present written and oral evidence
and argument and to cross-examine witnesses presented by the other party.
The arbitral panel (i) shall have the authority to grant specific
performance, (ii) may allocate between the parties the costs of arbitration
in such equitable manner as they may determine, but (iii) shall not render
an arbitral award contrary to the provisions of this Agreement. The
arbitral award shall be in writing and the arbitral panel shall provide
written reasons for its award. The award of the arbitral panel shall be
final and binding upon the parties hereto. Any such arbitration shall be
held in Chicago, Illinois, or any other mutually agreed
-41-
<PAGE> 47
location. Judgment upon the award so rendered may be entered in any court
having jurisdiction or application may be made to such court for judicial
acceptance of any award and an order of enforcement, as the case may be.
Notwithstanding the provisions of this Section 13.7, in the event of a
material breach of this Agreement by TKT that TKT fails to remedy within 90
days after written notice thereof by MMD, MMD shall have the right to bring
an action for specific performance by TKT or its Affiliates of TKT's
obligations hereunder, to seek an injunction with respect to any action by
TKT or its Affiliates inconsistent with any of TKT's obligations hereunder
or to bring an action against TKT or its Affiliates at law or in equity in
any court or other tribunal in which such action may properly be brought.
13.7. ENTIRE AGREEMENT. This Agreement, together with the Class D
Stock Purchase Agreement, contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes **********
******************************************************* the Original
License Agreement. All express or implied agreements and understandings,
either oral or written, heretofore made are expressly merged in and made
a part of this Agreement. This Agreement may be amended, or any term
hereof modified, only by a written instrument duly executed by both
parties hereto.
13.8. HEADINGS. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are merely guides or labels to
assist in locating and reading the several Articles and Sections hereof.
13.9. INDEPENDENT CONTRACTORS. It is expressly agreed that TKT and MMD
shall be independent contractors and that the relationship between the two
parties shall not constitute a partnership, joint venture or agency.
Neither TKT nor MMD shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which
shall be binding on the other, without the prior consent of the other party
to do so.
13.10. AGREEMENT NOT TO SOLICIT EMPLOYEES. During the term of this
Agreement and for a period of two (2) years following the termination of
this Agreement, TKT and MMD agree not to seek to persuade or induce any
employee of the other company to discontinue his or her employment with
that company in order to become employed by or associated with any
business, enterprise or effort that is associated with its own business.
13.11. EXPORTS. The parties acknowledge that the export of technical
data, materials or products is subject to the exporting party receiving any
necessary export licenses and that the parties cannot be responsible for
any delays attributable to export controls which are beyond the reasonable
control of either party. TKT and MMD agree not to export or re-export,
directly or indirectly, any information, technical data, the direct product
of such data, samples or equipment received or generated under
-42-
<PAGE> 48
this Agreement in violation of any governmental regulations which may be
applicable, including, but not limited to, the Export Administration Act of
1979, as amended, its rules and regulations, including, but not limited to,
Part 779 of the United States Export Control Regulations, published by the
United States Department of Commerce, and other applicable export control
laws. TKT and MMD agree to obtain similar covenants from their licensees,
sublicensees and contractors with respect to the subject matter of this
Section 13.12.
13.12. WAIVER. The waiver by either party hereto of any right
hereunder or the failure to perform or of a breach by the other party shall
not be deemed a waiver of any other right hereunder or of any other breach
or failure by said other party whether of a similar nature or otherwise.
13.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-43-
<PAGE> 49
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
TRANSKARYOTIC THERAPIES, INC.
By:/s/ Richard F. Selden
------------------------------------
Title: President and
Chief Executive Officer
MARION MERRELL DOW INC.
By: /s/ Terry J. Shelton
------------------------------------
Title: V.P., Licensing and Business
--------------------------------
Development
--------------------------------
-44-
<PAGE> 50
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX A
Milestones
***** ******
*****************************************
************************************
******************************************************
***********
****** *********
*************************** *********
******** *********
***************
*********** *********
************** *********
************ *********
-45-
<PAGE> 51
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
SCHEDULE 1.23
TKT PATENT RIGHTS
**************
****
***************
****** ***************************************
******************* **********
************** *********
*********** *********
******** *************************
******* *******
*************** ************************************
************************************
************************************
******
****** ****************************************
******************* **********
************** *******
*********** ***********
******* *******
*************** *****
****** *********************************
****************************************
****************
******************* **********
************** **********
*********** *********
******** *************************
*************** ************************************
***************************************
***************************************
**********
-46-
<PAGE> 52
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 1.24
TKT TECHNOLOGY WITHOUT SUBLICENSE RIGHTS
***************************************************
***********************************************
*******************************************************
*****************************************
-47-
<PAGE> 53
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 7.1
*******
*******
******
*******
*****
**********
*****
***********
**************
-48-
<PAGE> 1
EXHIBIT 10.34
CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
LICENSE AGREEMENT
between
TRANSKARYOTIC THERAPIES, INC.
and
MARION MERRELL DOW INC.
dated as of March 1, 1995
<PAGE> 2
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.................................................. 1
1.1. "Affiliate".......................................... 1
1.2. "Customer"........................................... 1
1.3. "Development Committee".............................. 1
1.4. "Development Phase" ................................. 2
1.5. "Effective Date"..................................... 2
1.6. "ELA"................................................ 2
1.7. "First Commercial Sale".............................. 2
1.8. "FDA"................................................ 2
1.9. "Fully Absorbed Costs"............................... 2
1.10. " * "........................................ 2
1.11. "Gross Margin"....................................... 2
1.12. "IND"................................................ 3
1.13. "MMD Territory"...................................... 3
1.14. "Manufacturing Know-How"............................. 3
1.15. "Net Revenues"....................................... 3
1.16. "Net Sales".......................................... 3
1.17. "PLA"................................................ 4
1.18. "Program"............................................ 5
1.19. "Research Committee"................................. 5
1.20. "Research Phase"..................................... 5
1.21. "Research Program"................................... 5
1.22. "Third Party"........................................ 5
1.23. "TKT Patent Rights".................................. 5
1.24. "TKT Technology"..................................... 5
ARTICLE 2. SCOPE AND STRUCTURE.......................................... 5
2.1. General.............................................. 6
2.2. Relationship of TKT and MMD.......................... 6
2.3. Commercialization of *******************............. 6
2.3.1. ****************************************
********************************
*********.................................. 6
2.3.2. **********************************
***************************************
*********.................................. 7
2.4. Development and Commercialization of an
Additional Gene Activated Protein.................... 7
ARTICLE 3. LICENSE GRANTS; MANUFACTURING AND MARKETING
RIGHTS.......................................................... 7
3.1. Grant of License Rights by TKT to MMD................ 7
3.1.1. *****************************.............. 7
3.1.2. ***************************................ 7
3.1.3. Exclusive Manufacturing Know-How
License.................................... 7
3.1.4. Sublicenses of Manufacturing Know-How...... 8
3.2. Grant of License Rights by MMD to TKT................ 8
3.3. Reservation of Rights................................ 8
(i)
<PAGE> 3
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
3.3.1. TKT Reservation............................ 8
3.3.2. MMD Reservation............................ 9
3.3.3. ***************************................ 9
ARTICLE 4. THE RESEARCH PHASE........................................... 9
4.1. Conduct of the Research Program...................... 9
4.1.1. General.................................... 9
4.1.2. Research Plan.............................. 9
4.1.3. Subcontracts............................... 9
4.1.4. Data....................................... 9
4.1.5. Reports by TKT............................. 10
4.1.6. Assistance by MMD.......................... 10
4.1.7. ***************************................ 10
4.2. Funding of the Research Program...................... 10
4.3. Term of the Research Phase........................... 11
4.3.1. Completion of the Research Phase........... 11
4.3.2. Term of the Research Phase................. 11
ARTICLE 5. THE DEVELOPMENT PHASE........................................ 11
5.1. Conduct of the Development Phase..................... 11
5.1.1. Commencement of the Development Phase...... 11
5.1.2. Development Phase.......................... 11
5.1.3. Annual Development Plan.................... 12
5.1.4. Adjustment of Development Phase
Milestones................................. 12
5.1.5. Attendance at Regulatory Meetings.......... 13
5.2. Funding of the Development Phase..................... 13
5.3. Development Information.............................. 13
5.3.1. Information for Regulatory Submissions..... 13
5.3.2. Reports to Development Committee........... 13
5.3.3. Regulatory Submissions..................... 13
5.3.4. Adverse Event Information.................. 13
5.4. Certain Prohibited Actions........................... 13
5.5. Development Phase Manufacturing...................... 14
5.6. Manufacturing Costs.................................. 14
5.7. Assistance by TKT.................................... 14
5.8. Regulatory Matters and Commercialization............. 14
5.8.1. Commercialization.......................... 14
5.8.2. Marketing Plans............................ 14
5.8.3. Co-Development, Co-Promotion and Co-
Marketing.................................. 14
ARTICLE 6. RESEARCH, DEVELOPMENT AND REGULATORY
COORDINATION.................................................... 16
6.1. Research Committee................................... 16
6.1.1. General.................................... 16
6.1.2. Minutes.................................... 16
6.2. Development Committee................................ 16
6.2.1. General.................................... 16
6.2.2. Minutes.................................... 17
6.3. General Disagreements................................ 17
6.4. Visit of Facilities.................................. 17
(ii)
<PAGE> 4
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
6.5. Annual Review and Planning Meeting................... 17
ARTICLE 7. MILESTONES AND ROYALTIES 17
7.1. Milestone Payments................................... 17
7.2. Royalties............................................ 18
7.2.1. Royalties Based on Net Sales of
* ................................ 18
7.2.2. Alternative Royalty Based on Gross
Margin..................................... 19
7.2.3. Sharing of Revenues From Sublicensees...... 19
7.2.4. Adjustment of Royalty Rates................ 19
7.3. Royalty Reports, Exchange Rates...................... 20
7.4. Audits............................................... 21
7.4.1. Procedure.................................. 21
7.4.2. Expenses................................... 21
7.4.3. Sublicenses................................ 21
7.4.4. Confidential Treatment..................... 21
7.5. Royalty Payment Terms................................ 21
7.6. Form of Payment...................................... 21
7.7. Withholding Taxes.................................... 22
7.8. Interest on Late Payments............................ 22
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS................................. 22
8.1. Ownership............................................ 22
8.1.1. Ownership of Discoveries and
Improvements............................... 22
8.1.2. Cooperation of Employees................... 23
8.2. Filing, Prosecution and Maintenance of TKT Patent
Rights and TKT Technology............................ 23
8.2.1. ***********************************........ 23
8.2.2. Patent Filing Costs........................ 24
8.3. Cooperation.......................................... 24
8.4. Notification of Patent Term Restoration.............. 24
8.5. No Other Technology Rights........................... 25
8.6. Enforcement of TKT Patent Rights and TKT
Technology; Defense of Infringement Actions.......... 25
8.6.1. ****************************............... 25
8.6.2. *********************************
*******.................................... 25
8.6.3. ************************************
********................................... 25
8.6.4. *****************************.............. 26
8.6.5. ****************************
********************************
****************........................... 26
8.7. **********************************************
***************************.......................... 26
ARTICLE 9. CONFIDENTIALITY.............................................. 27
9.1. Nondisclosure Obligations............................ 27
9.1.1. General.................................... 27
9.1.2. Limitations................................ 27
(iii)
<PAGE> 5
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
9.2. Materials............................................ 27
9.2.1. ******************************............. 28
9.2.2. Samples.................................... 28
9.3. Terms of this Agreement.............................. 28
9.4. Publications......................................... 28
9.4.1. Procedure.................................. 28
9.4.2. Delay...................................... 29
9.4.3. Resolution................................. 29
9.5. Injunctive Relief.................................... 29
ARTICLE 10. REPRESENTATIONS AND WARRANTIES.............................. 29
10.1. General.............................................. 29
10.1.1. Authorization.............................. 29
10.1.2. No Inconsistent TKT Arrangements........... 29
10.1.3. Exclusivity................................ 29
10.1.4. Licensed Technology........................ 29
10.2. Patent Validity...................................... 30
10.2.1. Title. .................................... 30
10.2.2. No Encumbrances............................ 30
10.2.3. Non-Infringement........................... 30
10.3. Financial Statements................................. 30
ARTICLE 11. INDEMNITY................................................... 30
11.1. MMD Indemnity Obligations............................ 30
11.2. TKT Indemnity Obligations............................ 30
11.3. Procedure............................................ 31
11.4. Insurance............................................ 31
ARTICLE 12. TERM AND TERMINATION........................................ 31
12.1. Expiration........................................... 31
12.2. Termination.......................................... 32
12.3. Effect of Termination................................ 33
ARTICLE 13. MISCELLANEOUS............................................... 33
13.1. Force Majeure........................................ 33
13.2. Assignment........................................... 34
13.3. Severability......................................... 34
13.4. Notices.............................................. 34
13.5. Applicable Law....................................... 35
13.6. Dispute Resolution................................... 35
13.7. Entire Agreement..................................... 37
13.8. Headings............................................. 37
13.9. Independent Contractors.............................. 37
13.10. Agreement Not to Solicit Employees................... 37
13.11. Exports.............................................. 37
13.12. Waiver............................................... 37
13.13. Counterparts......................................... 37
(iv)
<PAGE> 6
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT dated as of March 1, 1995 (the "Agreement") is
made between TRANSKARYOTIC THERAPIES, INC., a Delaware corporation having
its principal place of business at 195 Albany Street, Cambridge,
Massachusetts 02139 ("TKT"), and MARION MERRELL DOW INC., a Delaware
corporation having its principal place of business at 9300 Ward Parkway,
Kansas City, Missouri 64114-0480 ("MMD").
R E C I T A L S
WHEREAS, TKT has filed patent applications necessary to exploit
discoveries relating to the expression of **************
*****************************************************************
***************************************************************** *
and possesses certain related know-how and expertise.
WHEREAS, MMD desires to license TKT's patent rights and certain
related know-how and expertise relating to **************
*****************************************************************
********************************************* and obtain TKT's assistance
for development of such discoveries.
NOW THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto mutually agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article
shall have the meanings specified below:
1.1. "AFFILIATE" shall mean any corporation or other entity which
controls, is controlled by, or is under common control with a party to this
Agreement. A corporation or other entity shall be regarded as in control of
another corporation or entity if it owns or directly or indirectly controls
more than fifty percent (50%) of the voting stock or other ownership
interest of the other corporation or entity, or if it possesses, directly
or indirectly, the power to direct or cause the direction of the management
and policies of the corporation or other entity or the power to elect or
appoint fifty percent (50%) or more of the members of the governing body of
the corporation or other entity. Notwithstanding the foregoing, the Dow
Chemical Company shall not be considered an Affiliate of MMD for purposes
of this Agreement.
1.2. "CUSTOMER" shall have the meaning set forth in Section 1.15.
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<PAGE> 7
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
1.3. "DEVELOPMENT COMMITTEE" shall mean the joint committee composed
of representatives of TKT and MMD described in Section 6.2 of this
Agreement.
1.4. "DEVELOPMENT PHASE" shall mean the second phase of the Program,
which shall commence **********************************
***********************************************************
*********************************************************
*********************** * covered by the TKT Patent Rights or
which uses the TKT Technology and the preparation and filing of supporting
regulatory submissions until, with respect to each country in the MMD
Territory, final marketing approval for * covered by the TKT
Patent Rights or which uses the TKT Technology is obtained in such country.
1.5. "Effective Date" shall mean the date hereof.
--------------
1.6. "ELA" shall mean the Establishment License Application filed with
the FDA to obtain approval of the facility to be used to manufacture *
covered by the TKT Patent Rights or which uses the TKT Technology for sale
in the United States or any comparable application filed with the
regulatory authorities of a country other than the United States to obtain
approval of production facilities to be used to manufacture *
covered by the TKT Patent Rights or which uses the TKT Technology for sale
in such country.
1.7. "FIRST COMMERCIAL SALE" of * covered by the TKT Patent
Rights or which uses the TKT Technology shall mean the first sale for use
or consumption by the general public of * covered by the TKT
Patent Rights or which uses the TKT Technology in a country in the MMD
Territory after required marketing and pricing approval has been granted
by the governing health authority of such country.
1.8. "FDA" shall mean the United States Food and Drug Administration.
-----
1.9. "FULLY ABSORBED COSTS" shall mean the direct variable and direct
fixed costs associated with the conduct of the Research Phase or the
Development Phase. Direct variable costs shall be deemed to be the cost of
labor, raw materials, supplies and other resources directly consumed in the
conduct of the Research Phase or the Development Phase. Direct fixed costs
shall be deemed to be the cost of utilities, insurance, equipment
depreciation and other fixed costs directly related to the conduct of the
Research Phase or the Development Phase. Fixed costs shall be allocated
based upon the proportion of such costs directly attributable to support of
the Research Phase or the Development Phase. All cost determinations made
hereunder shall be made in accordance with generally accepted accounting
principles consistently applied.
1.10. " * " shall mean all pharmaceutical and other
formulations of **********************************************
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<PAGE> 8
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
*****************************************************************
******************, including all injectable and orally available
formulations, line extensions, combination products, delivery systems, and
dosage forms related thereto************************
*****************************.
1.11. "GROSS MARGIN" with respect to * covered by the TKT
Patent Rights or which uses the TKT Technology shall mean Net Revenues
from sales of such * less the cost of goods sold of MMD or its
Affiliates for such * , determined in accordance with generally
accepted accounting principles consistently applied for all products
manufactured by MMD.
1.12. "IND" shall mean an investigational new drug application filed
with the FDA prior to beginning clinical trials in humans, or any
comparable application filed with the regulatory authorities of a country
other than the United States prior to beginning clinical trials in humans
in that country, with respect to * covered by the TKT Patent
Rights or which uses the TKT Technology.
1.13. "MMD TERRITORY" shall mean all of the countries in the world,
which shall be divided into the following groupings of
countries:***************************************************
*******************************************************
*************************************************************
************************************************************
*****************************************************************
********************************************************
**************************************************************
**************************************************************
****************************************************************
*********************************************************** *****. Each of
the foregoing groupings of countries is referred to as a "Territory Block."
1.14. "MANUFACTURING KNOW-HOW" shall mean all inventions, discoveries,
improvements and other technology, whether or not patentable or
copyrightable, and any patent applications, patents or copyrights based
thereon, relating to or necessary or useful for the production and
packaging of * covered by the TKT Patent Rights or which uses the
TKT Technology.
1.15. "NET REVENUES" with respect to * covered by the TKT
Patent Rights or which uses the TKT Technology shall mean the invoiced
amount billed by MMD or its Affiliates for * finished product in
final packing form (whether or not with final labels) to any MMD
distributors or sublicensees which are not Affiliates, including any
royalties due to MMD or its Affiliates with respect to such sales, less,
whether or not such costs are invoiced separately to such person or
entity, the costs identified in clauses (a) through (d) of subsection
1.16. The definitions of Bundled Product and Combination Product set forth
in subsection 1.16 shall also apply to such sales mutatis mutandis.
-3-
<PAGE> 9
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
1.16. "NET SALES" with respect to * covered by the TKT Patent
Rights or which uses the TKT Technology shall mean the invoiced amount
billed for * finished product in final packing form to the first
Third Party trade purchaser (a "Trade Customer") by MMD or its Affiliates
or any MMD distributors which are not Affiliates, or, to the extent
permitted in subsection 3.1.2, by permitted sublicensees of MMD (it being
understood that wholesalers which are not Affiliates of MMD shall be
considered Third Party trade purchasers), less, whether or not such costs
are invoiced separately to such Trade Customer, (a) amounts refunded or
credited for * which was rejected, spoiled, damaged, out-dated or
returned, (b) freight, shipment and insurance costs incurred in
transporting * to such customers, (c) quantity, trade, cash, and
other discounts, rebates (including, without limitation, pursuant to
governmental regulation), chargebacks, retroactive price reductions,
credits or allowances allowed or taken (subject to post-period adjustment
if allowed but not taken within three months of the end of the calendar
year in which such credit or allowance is allowed), and (d) taxes,
tariffs, customs duties and surcharges and other governmental charges
incurred in connection with the sale, exportation or importation of
* . The transfer of * by MMD or one of its Affiliates to
another Affiliate of MMD shall not be considered a sale; in such cases, Net
Sales shall be determined based on the invoiced sales price by the
Affiliate to the Trade Customer, less the deductions allowed under this
Section. MMD shall be deemed to have sold a "Bundled Product" if *
finished product is sold by MMD pursuant to an agreement with a Trade
Customer specifying, for a combination of products or services, (i) a
single price, (ii) other terms of purchase not separately identifying
either a price per product or the effective deductions referred to above
per product or (iii) a price for units of * which is discounted
below MMD's standard invoice price per unit of * by at least five
percentage points more than the amount that any other product or service in
the Bundled Product is discounted below such other product's or service's
standard invoice price. In order to calculate the Net Sales of *
included in a Bundled Product (a) in the case of the foregoing clauses (i)
and (ii), the total Net Sales of the Bundled Product shall be multiplied by
a fraction, the numerator of which shall be
**************************************************************
***************************************************************** and the
denominator of which shall be *************************
**************************************************************
***********************************************************
*************************************************************
************************************* and (b) in the case of the foregoing
clause (iii), the parties will determine whether an adjustment to Net Sales
is appropriate and, if so, a mutually agreeable method of calculation. If
* is formulated by MMD with one or more different active
biological or chemical ingredients and such formulation is sold in finished
product form, then MMD shall be deemed to have sold a "Combination
Product." In order to calculate the Net Sales of * included in a
Combination Product, the total invoice
-4-
<PAGE> 10
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
price for the Combination Product shall be multiplied by a fraction, the
numerator of which shall be ******************
****************************************************************
********************************************************, and the
denominator of which shall be **********************************
***************************************************************
**********************************************************
***************************************************************
********************. If it is not possible to determine the standard
invoice price for an active ingredient of the Combination Product, then the
standard invoice price for such individual active ingredient shall be the
fully allocated cost of manufacture therefor determined in accordance with
standard cost accounting principles, as adjusted to reflect MMD's standard
profit margin for like products. The amount of Net Sales for any period
shall be determined on the basis of sales recorded in the ordinary course
on the books and records of MMD (or any Affiliate of MMD) during such
period in accordance with generally accepted accounting principles and with
past practice, without reference to the effects of any subsequent audit
adjustments which result in any of such sales being recognized by MMD in
another period.
1.17. "PLA" shall mean a product license application filed with the
FDA after completion of human clinical trials to obtain marketing approval
for * covered by the TKT Patent Rights or which uses the TKT
Technology in the United States or any comparable application filed with
the regulatory authorities of a country other than the United States to
obtain marketing approval for * covered by the TKT Patent Rights
or which uses the TKT Technology in that country.
1.18. "PROGRAM" shall mean the collaboration by TKT and MMD described
in this Agreement.
1.19. "RESEARCH COMMITTEE" shall mean the joint committee composed of
representatives of TKT and MMD described in Section 6.1 of this Agreement.
1.20. "RESEARCH PHASE" shall mean the first stage of the Program
commencing on the Effective Date, ************************
***************************************************************** *
************************************************************
**************. The Research Phase is more fully described in Article 4.
1.21. "RESEARCH PROGRAM" shall mean the * research program
described in Section 4.1 of this Agreement.
1.22. "THIRD PARTY" shall mean any entity other than TKT or MMD and
their respective Affiliates.
1.23. "TKT PATENT RIGHTS" shall mean all present and, at MMD's
election, future patents, patent applications, patent extensions,
certificates of invention, or applications for certificates of invention,
together with any divisions,
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
continuations or continuations-in-part thereof, which are owned or
controlled by TKT relating to or necessary or useful for the manufacture,
use, distribution or sale of * , including without limitation
those specified on Schedule 1.23 hereto.
1.24. "TKT TECHNOLOGY" shall mean all present and future inventions,
trade secrets, copyrights, know-how, data, regulatory submissions and
other intellectual property of any kind (including any proprietary
biological materials, compounds or reagents but not including TKT Patent
Rights) which are owned or controlled by, or licensed (with the right to
sublicense) to, TKT relating to or necessary or useful for the
manufacture, use, distribution or sale of * , including but not
limited to any patents or patent applications licensed from Third
Parties. With respect to TKT Technology which has been licensed to TKT by
a Third Party, (i) MMD agrees to assume and pay for its portion of any
costs, expenses, fees or royalties associated with its use of sublicense
rights relating to such licensed TKT Technology to the extent described in
Section 8.7, and (ii) if TKT does not currently have the right to
sublicense such intellectual property to MMD hereunder, such license is
listed on Schedule 1.24 hereto and TKT shall use commercially reasonable
efforts to obtain the right to sublicense such intellectual property (as
well as any intellectual property licensed to TKT hereafter which is
included in the TKT Technology) to MMD hereunder.
ARTICLE 2. SCOPE AND STRUCTURE
2.1. GENERAL. TKT and MMD wish to establish an agreement with respect
to * . During the course of the Program, TKT and MMD shall
communicate regularly and shall assume different rights and
responsibilities, all as more specifically described herein.
2.2. RELATIONSHIP OF TKT AND MMD. During the term of this Agreement,
neither TKT or MMD, nor any of their Affiliates shall independently, or
with a Third Party, conduct research regarding, or engage in the
development, manufacture, marketing or sale of, pharmaceutical formulations
of ******************************
*****************************************************************
**************, other than as part of the Program, except that either TKT
or MMD may develop, manufacture, market, distribute or sell "generic" or
"non-branded" pharmaceutical formulations of
*****************************************************************
****************************************** in any country if (i) there are
imminent Third Party sales of "generic"
*****************************************************************
*************************************************** in such country and
(ii) * covered by the TKT Patent Rights or which uses the TKT
Technology may not lawfully be substituted in such country as a "generic"
equivalent product for any prescription for a branded or "generic" form of
*************************************
*****************************************************************
********** with respect to which sales by such Third Party are imminent.
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2.3. COMMERCIALIZATION OF *******************. TKT agrees that it
shall not develop, manufacture, promote or market ****
************************************************************
***************************************************************** **
**************************************************************
***************************************************************** *
*************************************************************
*************************************.
2.3.1. ***********************************************
***************** *****************. ******************
***********************************************************
***************************************************************
******************************************************.
2.3.1.1. NOTICE OF NEGOTIATION. TKT shall promptly notify MMD
if it enters into a negotiation regarding a
*********************************.
2.3.1.2. ********************************* Notice. Prior to
entering into any agreement regarding a **** *****************************
TKT shall deliver a written notice (the "********************") to MMD
disclosing in reasonable detail the terms and conditions of the proposed
*************************.
2.3.1.3. RIGHT OF FIRST REFUSAL. MMD shall have the right
(the "FIRST REFUSAL RIGHT") at any time ****** **************** after
receipt of the ******************** to accept the terms thereof, in which
event the parties shall use their best efforts to enter into an agreement,
within ******* after such acceptance regarding a
********************************* upon the terms specified in the
********************. The parties acknowledge that the terms specified in
such ******************** shall be different from the terms of this *
******** ********. If MMD does not exercise the First Refusal Right, then
TKT shall be free, for a period of ******** from the expiration of such
*************, to enter into an agreement with a Third Party regarding a
********************************* upon the terms and with the Third Party
specified in the ********************. Following the **************
specified in the preceding sentence, TKT shall not enter into an agreement
regarding a ************* ******************** without complying with the
terms of this subsection 2.3.1.2.
2.3.2. ********************************************
***************************************. ********* the
****************************** of this Agreement, TKT shall be under no
obligation to enter into a************************** ****** with MMD but
shall promptly notify MMD if it enters into a negotiation for a
*********************************.
2.4. DEVELOPMENT AND COMMERCIALIZATION OF AN ADDITIONAL GENE ACTIVATED
PROTEIN. TKT commits that it is its intention to negotiate with MMD for the
joint development and
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commercialization of an additional gene activated protein at such time as
such development and commercialization appears desirable to both parties.
Such additional gene activated protein may be any protein of commercial
interest to TKT and MMD; provided, however, that such intention shall not
apply to any gene activated protein that TKT is developing internally or
with a Third Party as of the date such negotiations commence between TKT
and MMD. Notwithstanding the foregoing, TKT shall be under no obligation to
develop or commercialize any particular gene activated protein with MMD.
However, TKT shall promptly notify MMD if it enters into negotiations with
any Third Party for the development or commercialization of
*****************************.
ARTICLE 3. LICENSE GRANTS; MANUFACTURING AND MARKETING RIGHTS
3.1. GRANT OF LICENSE RIGHTS BY TKT TO MMD.
3.1.1. EXCLUSIVE * License. TKT hereby grants to MMD the
worldwide, perpetual, and exclusive right and license under the TKT Patent
Rights and the TKT Technology to develop, make, have made, use, distribute
for sale and sell * .
3.1.2. SUBLICENSES OF * . MMD shall have the right to
grant sublicenses under the TKT Patent Rights and the TKT Technology
license granted by TKT to MMD under subsection 3.1.1 to Affiliates of MMD
and, with the written consent of TKT, which shall not be unreasonably
withheld, to entities which are not Affiliates of MMD. In connection with
such sublicense, MMD may provide that the sublicensee shall pay directly
to TKT any amounts which may become due in accordance with Section 7.2,
PROVIDED, HOWEVER, that MMD shall in any event remain liable for the
payment of all such amounts notwithstanding any such provision between MMD
and its sublicensee. Upon TKT's request, and to the extent that MMD is not
contractually prohibited from doing so, MMD will provide a copy of such
sublicenses to TKT.
3.1.3. EXCLUSIVE MANUFACTURING KNOW-HOW LICENSE. TKT hereby
grants to MMD a worldwide, perpetual, and exclusive and, except as provided
below, fully paid-up and royalty-free right and license under Manufacturing
Know-How owned or controlled by, or licensed (subject to the provisions of
this subsection 3.1.3, with the right to sublicense) to, TKT to make or
have made * covered by the TKT Patent Rights or which uses the TKT
Technology. With respect to Manufacturing Know-How which has been licensed
to TKT by a Third Party, (i) MMD agrees to assume and pay for any costs,
expenses, fees or royalties associated with its sublicense of such
Manufacturing Know-How, and (ii) if TKT does not currently have the right
to sublicense such intellectual property to MMD hereunder, such license is
listed on Schedule 3.1.3 hereto and TKT shall use commercially reasonable
efforts to obtain the right to sublicense such intellectual property (as
well as any intellectual property
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licensed to TKT hereafter which is included in the Manufacturing Know-How)
to MMD hereunder for such limited purposes.
3.1.4. SUBLICENSES OF MANUFACTURING KNOW-HOW. MMD shall have the
right to grant sublicenses under the Manufacturing Know-How license granted
by TKT to MMD under subsection 3.1.3 to Affiliates of MMD and, with the
written consent of TKT, which shall not be unreasonably withheld, to
entities which are not Affiliates of MMD. MMD will provide a copy of such
sublicenses to TKT.
3.2. GRANT OF LICENSE RIGHTS BY MMD TO TKT. Subject to the last
sentence of this Section 3.2, upon the request of TKT, (i) MMD shall grant
to TKT a worldwide, perpetual, non-exclusive and fully paid-up and
royalty-free right and license, with the right to sublicense, under
Manufacturing Know-How owned or controlled by, or licensed (subject to the
provisions of this Section 3.2, with the right to sublicense) to MMD which
is developed by a Third Party contract manufacturer engaged by MMD and
working with or receiving assistance from TKT, to make or have made
products (other than pharmaceutical formulations of
*********************************
***************************************************************** *******)
worldwide which are not competitive with * , and (ii) MMD shall
negotiate in good faith with TKT the terms of a license, with the right to
sublicense, which shall be on reasonable commercial terms, under
Manufacturing Know-How owned or controlled by, or licensed (subject to the
provisions of this Section 3.2, with the right to sublicense) to MMD to
make or have made products (other than pharmaceutical formulations of
************************
*****************************************************************
**********************) worldwide which are not competitive with
* . With respect to Manufacturing Know-How described above which
has been licensed to MMD by a Third Party, (i) TKT agrees to assume and pay
for any costs, expenses, fees or royalties associated with its sublicense
of such Manufacturing Know-How, and (ii) if MMD does not have the right to
sublicense such intellectual property to TKT hereunder, MMD shall use
commercially reasonable efforts, as determined in good faith by MMD, to
obtain the right to sublicense such intellectual property to TKT hereunder
for such limited purposes.
3.3. Reservation of Rights.
----------------------
3.3.1. TKT RESERVATION. Notwithstanding the license grants set
forth above, and subject to the provisions of Section 5.4 hereof, TKT at
all times reserves the right under the TKT Patent Rights, TKT Technology,
and Manufacturing Know-How owned either exclusively by TKT or jointly with
MMD (i) to make, have made and use * for research and development
uses as part of the Program and (ii) subject, with respect to Manufacturing
Know-How owned jointly by TKT and MMD, to the consent of MMD, which consent
shall not be unreasonably withheld, to make, have made, use, sublicense,
distribute for sale and sell products other than * .
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3.3.2. MMD RESERVATION. Notwithstanding the license grants set
forth above, MMD at all times reserves the right under Manufacturing Know-
How owned either exclusively by MMD or jointly with TKT (i) to make, have
made and use * for research and development uses as part of the
Program, (ii) to make, have made, use, sublicense, distribute for sale and
sell * and (iii) subject, with respect to Manufacturing Know-How
owned jointly by TKT and MMD, to the consent of TKT, which consent shall
not be unreasonably withheld, to make, have made, use, sublicense,
distribute for sale and sell products other than * .
3.3.3. MANUFACTURE OF * . Notwithstanding anything else
contained in this Agreement, MMD shall have the right to make or have made
* in any country in the world for use, distribution for sale or
sale by itself, its Affiliates or its permitted licensees or sublicensees
in the territories allocated to it under this Agreement.
ARTICLE 4. THE RESEARCH PHASE
4.1. Conduct of the Research Program.
--------------------------------
4.1.1. GENERAL. The conduct of the Research Program shall be the
primary responsibility of TKT and shall take place primarily at TKT's
facilities in Cambridge, Massachusetts. The Research Program shall be
conducted in good scientific manner, and in compliance with all applicable
good laboratory practices and applicable legal requirements to achieve
efficiently and expeditiously its objectives. TKT shall proceed diligently
with the work set out in the Research Program using its best efforts using
commercially reasonable means consistent with those used by TKT for other
projects with a similar commercial potential. Each party shall regularly
communicate with the other regarding planned and actual activities and
resources utilized.
4.1.2. RESEARCH PLAN. The Research Program shall be conducted
under a research plan prepared by TKT which describes the work to be
pursued by TKT during the Research Phase, including (i) identifying the
technical problems involved and the general projects to be carried out
regarding * , (ii) estimating the personnel to be committed for
each project, and (iii) setting forth a projected timetable for the work
to be performed. TKT will submit the research plan to the Research
Committee for its approval within ninety (90) days of the Effective Date.
An outline of the research plan is attached hereto as Schedule 4.1.2. If
at any time during the Research Phase, TKT or MMD determine that a
significant change to the research plan is necessary or desirable, it shall
prepare a written description detailing the change to the research plan
and shall submit such description to the Research Committee for its
approval.
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4.1.3. SUBCONTRACTS. Subject to the approval of the Research
Committee and the provisions of Article 9, TKT may subcontract portions of
the Research Program to be performed by it in the normal course of its
business to a Third Party.
4.1.4. DATA. TKT shall maintain records in sufficient detail and
in good scientific manner appropriate for regulatory filings and patent
purposes and as will properly reflect all work done and results achieved in
the performance of the Research Program (including all data in the form
required to be maintained under any applicable governmental regulations).
Such records shall include books, records, reports, research notes, charts,
graphs, comments, computations, analyses, recordings, photographs, computer
programs and documentation thereof, computer information storage means,
samples of materials and other graphic or written data generated in
connection with the Research Program. TKT shall provide MMD the right to
inspect such records, and shall provide copies of all requested records, to
the extent reasonably required for the performance of MMD's obligations
under this Agreement; provided, however, that MMD shall maintain such
records and the information of TKT contained therein in confidence in
accordance with Article 9 hereof and shall not use such records or
information except to the extent otherwise permitted by this Agreement.
4.1.5. REPORTS BY TKT. Except as set forth below, within
fourteen (14) days following the end of each calendar quarter, or at the
reasonable request (with mutually agreed advance notice) of the Research
Committee, TKT shall provide to the members of the Research Committee a
written report which shall summarize in reasonable detail the work TKT has
performed under the Research Program during the preceding calendar quarter.
For the first year of the Research Program, TKT shall only be required to
provide such reports for the first and second six-month periods following
the Effective Date. TKT shall provide to MMD all reports necessary under
Section 5.3.1.
4.1.6. ASSISTANCE BY MMD. MMD shall provide such assistance to
TKT in conducting the Research Program as TKT may reasonably request, and
TKT will reimburse MMD for its documented Fully Absorbed Costs incurred in
providing such assistance; provided, however, that prior to providing such
assistance MMD shall have provided to TKT an estimate of such Fully
Absorbed Costs and TKT shall have approved such estimate; PROVIDED,
further, that no failure of MMD to undertake or successfully complete such
assistance shall relieve TKT from its obligations hereunder or affect MMD's
right to terminate this Agreement pursuant to Section 12.2.
4.1.7. ***************************. *****************
**************************************************************
*****************************************************************
**********************************************************
**************************************************************** ******.
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4.2. FUNDING OF THE RESEARCH PROGRAM. As funding for the Research Program,
MMD shall pay to TKT $************ upon the execution of this Agreement and
**************** payments of $*************, each on the dates occurring
************** ***************** following the execution of this Agreement. Such
funds shall be used by TKT for costs and expenses in connection with the
Research Program; provided, that, any excess of such funds that have not been so
used at the time that the Research Committee ******************************
described in subsection 4.3.1 may be used by TKT for any purpose. All payments
made by MMD pursuant to this subsection shall be in United States dollars and
shall be made by check or other means acceptable to TKT.
4.3. Term of the Research Phase.
--------------------------
4.3.1. COMPLETION OF THE RESEARCH PHASE. The term of the Research
Phase shall commence as of the Effective Date.
*****************************************************************
*****************************************************************
*****************************************************************
*****************************************************************
*****************************************************************
************************************************************
*************************************************************
*****************************************************************
***************. The Research Committee shall promptly evaluate the data
submitted by TKT and determine, in its reasonable discretion,
*****************************************************
*****************************************************************
*****************************************************************
*****************************************************************
****************************************************************
*********************************************************
*****************************************************************
*****************************************************************
*************************************************************
**************************************************************
*****************************************************************
***********************************************************
*****************************************************************
****************************************************************
***************************************************************** *********.
4.3.2. TERM OF THE RESEARCH PHASE. The term of the Research Phase
************************************************
***************************************************************
****************************************************************
************************************************************* ******************
shall jointly determine on what terms the Research Phase shall be extended and
what additional terms, if any, in this Agreement shall be modified as a result
of such extension. If such a determination cannot be reached within
*************** **** after the expiration of the initial term of the Research
Phase, then such determination shall be made by
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arbitration in accordance with the procedures for arbitration described in
Section 13.6, unless the parties mutually agree to terminate this Agreement.
ARTICLE 5. THE DEVELOPMENT PHASE
5.1. Conduct of the Development Phase.
--------------------------------
5.1.1. COMMENCEMENT OF THE DEVELOPMENT PHASE. The Development Phase
will commence ********************************
*********************************************************
*************************************************************
***************************************************************
******.
5.1.2. DEVELOPMENT PHASE. The conduct of the Development Phase shall
be the primary responsibility of MMD. MMD may subcontract with Third Parties for
portions of the Development Phase and for all or a portion of the manufacture of
* . The Development Phase shall consist of the preparation and filing
of regulatory submissions and the preclinical and clinical development of
* until, with respect to each country in the MMD Territory, final
marketing approval for * is obtained in such country. MMD and TKT will
cooperate to achieve the milestones described in APPENDIX A using their
respective best efforts using commercially reasonable means consistent with
those used by them for other projects with a similar commercial potential. If
MMD has been unable to achieve any of the milestones described in APPENDIX A
within the time period indicated in APPENDIX A for reasons other than those
described in subsection 5.1.4, then the Chief Executive Officer of each of TKT
and MMD or their respective designees shall jointly determine on what terms the
time period for achieving such milestones should be extended and what
additional terms, if any, in this Agreement shall be modified as a result of
such extension. If such a determination cannot be reached within
******************** after the time period for any such milestone has expired,
then such determination shall be made by arbitration in accordance with the
procedures for arbitration described in Section 13.6, unless the parties
mutually agree to terminate this Agreement. MMD shall have primary
responsibility for supervision of the scale-up and the further characterization
of the master cell bank, the characterization of clinical trial material, and
the supervision of the assembly of all characterization data and other
information required for regulatory submissions. At MMD's request, TKT will
perform, or assist MMD in performing, the work described in the preceding
sentence and provide such other assistance to MMD as may be reasonably
necessary to enable MMD to achieve the milestones described in APPENDIX A, and
TKT shall be compensated for such assistance in accordance with Section 5.7.
MMD will determine, in its sole discretion after consultation with TKT, the
appropriate entity to file and hold the PLA and the ELA. MMD will coordinate
preclinical and clinical testing of * and work with designated
individuals at MMD and TKT in the
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preparation of regulatory filings for * within the MMD Territory.
5.1.3. ANNUAL DEVELOPMENT PLAN. The Development Phase shall be
conducted under an annual development plan which shall describe the work to be
pursued by MMD and TKT under the supervision of the Development Committee with
respect to the development of * . The first Development Plan will be
prepared by MMD for submission to the Development Committee
*******************************
************************************************************************
*********************. Thereafter, the annual development plan will be prepared
by MMD for submission to the Development Committee no later than sixty (60) days
prior to the beginning of each calendar year.
5.1.4. ADJUSTMENT OF DEVELOPMENT PHASE MILESTONES. If at any time
during the Development Phase MMD determines and is able to demonstrate to TKT's
reasonable satisfaction that **************************************************
****************************************************************************
*****************************************************************
*************************************************************
************************************************************
*****************************************************************
********************************************************
***************************************************************
*****************************************************, then the Chief Executive
Officer of each of MMD and TKT, or their respective designees, shall determine
on what terms the Research Phase shall be reinitiated and how the milestones
described in Appendix A are to be adjusted.
5.1.5. ATTENDANCE AT REGULATORY MEETINGS. MMD will provide TKT with
prior notice of all meetings between its representatives and drug regulatory
authorities regarding marketing approval of * . TKT shall have the right
to have a representative present at all important meetings in the United States,
and upon request at all important meetings in other countries; provided,
however, that MMD may revoke this right with respect to any particular meeting
if, in its good faith reasonable judgment, the presence of any other party will
be a detriment to the success of the meeting. TKT will furnish, at MMD's
request, a representative to attend drug regulatory meetings regarding
marketing approval of * .
5.2. FUNDING OF THE DEVELOPMENT PHASE. MMD shall bear all costs and
expenses in connection with the Development Phase. The assistance by TKT to MMD
and reimbursement to be provided by MMD to TKT during the Development Phase is
set forth in Section 5.7 hereof.
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5.3. Development Information.
-----------------------
5.3.1. INFORMATION FOR REGULATORY SUBMISSIONS. TKT will provide MMD
with all documentation available to TKT reasonably required for regulatory
submissions by MMD, based on work performed during the Research Phase, including
**********************************************************************
***************************************************************
***********************************************************
********************************************************
*************************************************************
*****************************************************************
****************
5.3.2. REPORTS TO DEVELOPMENT COMMITTEE. MMD shall keep the
Development Committee informed as to its progress in the Development Phase of
* . Within thirty (30) days following the end of each six month period
during the Development Phase, MMD shall provide a reasonably detailed report to
the Development Committee which shall describe the progress of the Development
Phase of * .
5.3.3. REGULATORY SUBMISSIONS. MMD shall provide TKT with copies of
all submissions to United States drug regulatory authorities. Upon the
reasonable request of TKT, MMD shall also provide TKT with copies of all
submissions to drug regulatory authorities of other countries and the results of
all clinical trials conducted by, or under the supervision of, MMD with respect
to * ; provided, however, that MMD reserves the right to assess
reasonable copying charges for any such materials requested by TKT which exceed
approximately two cartons of material.
5.3.4. ADVERSE EVENT INFORMATION. Within six months after the
commencement of the Development Phase, MMD will establish a protocol for the
timely handling and transmission of adverse event information. MMD and TKT shall
promptly notify each other of any adverse event information relating to *
in accordance with such protocol.
5.4. CERTAIN PROHIBITED ACTIONS. Notwithstanding the provisions of Section
2.2, TKT and its Affiliates shall not, directly or indirectly, market,
distribute or sell * covered by the TKT Patent Rights or which uses the
TKT Technology in the MMD Territory.
5.5. DEVELOPMENT PHASE MANUFACTURING. Provided that TKT has successfully
met its obligations under the Research Program in the Research Phase, MMD shall
be primarily responsible for the production of * during the Development
Phase. MMD will consult with TKT to determine the appropriate manufacturing
process for * necessary for the Development Phase and for commercial
production, including selecting a suitable production process.
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5.6. MANUFACTURING COSTS. MMD shall bear all costs associated with the
manufacture of * during the Development Phase, in accordance with the
provisions of this Article 5, and for commercial production for sale by MMD or
its sublicensees in the MMD Territory.
5.7. ASSISTANCE BY TKT. At MMD's request, TKT will cooperate with MMD
to provide such technical assistance and characterization work as may be
necessary in connection with the manufacture and production of * during
the Development Phase and subsequently in commercial production, and MMD will
reimburse TKT for its documented Fully Absorbed Costs incurred in connection
with providing such assistance; provided, however, that prior to providing such
assistance, TKT shall have provided to MMD an estimate of such Fully Absorbed
Costs and MMD shall have approved such estimate and, provided further, that no
failure of TKT to undertake or successfully complete such assistance shall
relieve MMD from its obligation to achieve the milestones described in APPENDIX
A or affect TKT's right to terminate this Agreement pursuant to subsection
12.2.5. TKT will provide such assistance to MMD as is consistent with the
capacity and capabilities of TKT.
5.8. Regulatory Matters and Commercialization.
----------------------------------------
5.8.1. COMMERCIALIZATION. Upon the successful completion of the
Research Phase and Development Phase, MMD agrees to use its best efforts to
commercialize * covered by the TKT Patent Rights or which uses the TKT
Technology throughout the MMD Territory using commercially reasonable means
consistent with those used for MMD products with similar commercial potential.
5.8.2. MARKETING PLANS. MMD shall promptly provide TKT with copies of
its United States marketing plans for * covered by the TKT Patent Rights
or which uses the TKT Technology, and shall provided TKT with copies of its
marketing plans for other countries upon the reasonable request of TKT. Such
marketing plans shall not be disclosed to any Third Party without the prior
written consent of MMD.
5.8.3. CO-DEVELOPMENT, CO-PROMOTION AND CO-MARKETING. In the event
that MMD determines, in its sole discretion, that co-development, co-promotion
or co-marketing of * covered by the TKT Patent Rights or which uses the
TKT Technology is appropriate in any of the countries in the ****
******************************************************, then TKT shall have the
right of first negotiation (the "First Negotiation Right") to become MMD's
co-development, co-promotion or co-marketing partner, as the case may be, in any
such country on terms no less favorable to TKT than those which MMD proposes to
offer to any other co-development, co-promotion or co-marketing partner for such
country. MMD shall notify TKT in writing of its determination to pursue
co-development, co-promotion or co-marketing of * covered by the TKT
Patent
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Rights or which uses the TKT Technology in a country in the *****
*********************************************************** ****** (the
"Negotiation Notice"); provided, however, that, in the case of co-promotion or
co-marketing only and in the absence of co-development, MMD shall not be
entitled without TKT's consent, which shall not be unreasonably withheld, to
give TKT a Negotiation Notice with respect to any country in the MMD Territory
until all clinical trials necessary for the submission for regulatory approval
to market * in that country are substantially complete. Unless TKT
shall have waived the First Negotiation Right in writing within 30 days
following receipt by TKT of the Negotiation Notice, MMD and TKT shall negotiate
in good faith a termsheet for such co-development, co-promotion or co-marketing
arrangement for a period of up to 60 days commencing on the date of the
Negotiation Notice and a definitive agreement for such co-development,
co-promotion or co-marketing for an additional period of up to 60 days
commencing on the date of such termsheet. If, at the end of either of such
periods, MMD and TKT are unable to agree on terms for the co-development,
co-promotion or co-marketing of * in such country, then, unless the
parties agree to extend the negotiation period, MMD shall promptly deliver to
TKT a final proposal detailing the terms on which it would enter into such a
co-development, co-promotion or co-marketing arrangement (the "Final
Proposal"). TKT shall have thirty (30) days from receipt of the Final Proposal
to notify MMD of its desire to enter into an arrangement on such terms. If TKT
does not so notify MMD, then MMD shall be free, for a period of one year (which
shall be extended for an additional four-month period if MMD has certified to
TKT that it is then in active negotiations with a single Third Party with
respect thereto) from the expiration of such 30 days, to enter into a
co-development, co-promotion or co-marketing arrangement for * in the
country identified in the Negotiation Notice with a Third Party on terms no
more favorable to the Third Party than the terms contained in the Final
Proposal. Following such negotiation period, MMD shall not enter into a
co-development, co-promotion or co-marketing arrangement for * in any
country in the MMD Territory with a Third Party without first complying with
the provisions of this subsection. Except as otherwise provided in this
subsection 5.8.3, it is understood and agreed to by the parties hereto that MMD
shall have no obligation to enter into a co-development, co-promotion, or
co-marketing arrangement with respect to any country in the MMD Territory with
TKT. In the event that MMD enters into a co-development arrangement for *
in a country with a Third Party after complying with the provisions of this
subsection, then TKT shall cooperate with such Third Party in such country
during the Development Phase to the same extent that TKT would cooperate with
MMD.
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ARTICLE 6. RESEARCH, DEVELOPMENT AND REGULATORY COORDINATION
6.1. Research Committee.
------------------
6.1.1. GENERAL. Promptly after the Effective Date, a joint committee
comprised of up to three named representatives of MMD and up to three named
representatives of TKT (the "Research Committee") shall be appointed. One of the
representatives of TKT shall act as Chairman of the Research Committee. The
Research Committee shall be responsible for the supervision of the Research
Program. Such meetings shall be held at TKT's facilities located in Cambridge,
Massachusetts, and at such times as are agreed to by TKT and MMD, or at such
other locations or in such other form (e.g., telephone or video conference) as
the members of the Research Committee shall agree. At such meetings, the
principal function of the Research Committee will be to plan and evaluate the
progress of the Research Program ***********************************************
*********************************************. A party may change one or more of
its representatives to the Research Committee at any time. Members of the
Research Committee may be represented at any meeting by another member of the
Research Committee so designated by the absent member, or by a deputy. Any
approval, determination or other action shall require the affirmative vote of
both TKT and MMD ******************************* as determined by each party's
representatives who are members of the Research Committee. Employees,
subcontractors or consultants of either TKT and MMD who are involved with the
Program and who are not members of the Research Committee may attend meetings of
the Committee as guests of either party.
6.1.2. MINUTES. The Research Committee shall keep accurate minutes of
its deliberations. The Chairman shall be responsible for the preparation of
draft minutes. Draft minutes shall be sent to all members of the Research
Committee within ten (10) business days after each meeting. All records of the
Research Committee shall be available to both parties.
6.2. Development Committee.
---------------------
6.2.1. GENERAL. Promptly after the Effective Date, a joint committee
comprised of up to four named representatives of MMD and up to four named
representatives of TKT (the "Development Committee") shall be appointed. One of
the representatives of MMD shall act as Chairman of the Development Committee.
Such meetings shall be held at TKT's facilities in Cambridge, Massachusetts
during the Research Phase, and thereafter in Kansas City, Missouri, and, in any
event, at times and places or in such form (e.g., telephone or video conference)
as the members of the Development Committee shall agree. At such meetings, the
Development Committee will discuss the Development Phase of * ,
including but not limited to, preclinical and clinical testing and the
preparation of regulatory submissions for approval of * in the MMD
Territory. To the extent
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reasonable or appropriate, meetings of the Development Committee will be
coordinated and held jointly with the Research Committee. A party may change one
or more of its representatives to the Development Committee at any time. Members
of the Development Committee may be represented at any meeting by another member
of the Development Committee so designated by the absent member, or by a deputy.
Any approval, determination or other action shall require the affirmative vote
of a majority of the votes entitled to be cast,
*************************************************, and with such votes being
cast as determined by each party's representatives who are members of the
Development Committee. Employees, subcontractors or consultants of either TKT
and MMD who are not involved with the Program and who are not members of the
Development Committee may attend meetings of the Committee as guests of either
party.
6.2.2. MINUTES. The Development Committee shall keep accurate minutes
of its deliberations. The Chairman shall be responsible for the preparation of
draft minutes. Draft minutes shall be sent to all members of the Development
Committee within ten (10) business days after each meeting. All records of the
Development Committee shall at all times be available to both parties.
6.3. GENERAL DISAGREEMENTS. All disagreements within the Research Committee
and the Development Committee shall be resolved in accordance with the
provisions of Section 13.6.
6.4. VISIT OF FACILITIES. Representatives of MMD may, upon reasonable
notice and at times reasonably acceptable to TKT, visit TKT's facilities where
the Research Program is being conducted and consult with personnel of TKT
performing work on the Research Program, and those of any permitted
subcontractors of TKT. Representatives of TKT and MMD may, with the other
party's prior approval, which approval shall not be unreasonably withheld, visit
manufacturing sites and the sites of any clinical trials or other experiments
being conducted by such other party in connection with the Development Phase. If
requested by the other party, TKT and MMD shall cause appropriate individuals
working on the Development Phase to be available for meetings at the location of
the facilities where such individuals are employed at times reasonably
convenient to the party responding to such request.
6.5. ANNUAL REVIEW AND PLANNING MEETING. No less frequently than annually,
representatives of TKT and MMD shall meet at a place mutually agreed to by the
parties (which, prior to the First Commercial Sale, will be one of the Research
Committee or Development Committee Meetings)(the "Annual Meeting"), at which
meeting MMD shall review the clinical, regulatory and marketing activities
undertaken by MMD or its Affiliates since the previous Annual Meeting and shall
present its clinical, regulatory and marketing plans for * for the
ensuing year. Within 30 days following each Annual Meeting, MMD shall submit to
TKT a written
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report detailing the information reviewed and presented at such
Annual Meeting.
ARTICLE 7. MILESTONES AND ROYALTIES
<TABLE>
7.1. MILESTONE PAYMENTS. In consideration of TKT's work on the Research
Program and the licenses granted to MMD hereunder, MMD shall pay the following
amounts to TKT upon the achievement of each of the following milestones, prior
to any expiration or termination of this Agreement under Article 12 with respect
to the country to which such milestone relates, it being understood and agreed
to that TKT shall use a portion of such payments as necessary to fund the
performance of its obligations under the Program:
<CAPTION>
- ------------------------------------------------------------------------
Milestone Payment
--------- -------
- ------------------------------------------------------------------------
<S> <C>
Execution of this Agreement $10,000,000
$10,000,000 Preferred
Stock Investment(1)
- ------------------------------------------------------------------------
*********************************** $**************
*********
- ------------------------------------------------------------------------
************************** $**************
- ------------------------------------------------------------------------
********************************* $**************
- ------------------------------------------------------------------------
************************** $**************
- ------------------------------------------------------------------------
******************* $**************
- ------------------------------------------------------------------------
************************************ $**************
************************************
***************
- ------------------------------------------------------------------------
****************************** $**************
- ------------------------------------------------------------------------
<FN>
(1) On the terms and subject to the conditions of the Class E Preferred
Stock Purchase Agreement dated as of March 1, 1995, by and between MMD
and TKT (the "Class E Stock Purchase Agreement").
</TABLE>
Either TKT or MMD shall notify the other in writing within ten (10)
business days following the occurrence of each of the milestones set forth
above. Within ten (10) business days after receipt of such notice, MMD shall pay
to TKT in United States dollars by check or other means acceptable to TKT, the
milestone payments set forth above. Milestone payments made to TKT pursuant to
this Section 7.1 are not refundable under any circumstances and will not be
credited against royalty payments due TKT under Section 7.2.
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7.2. ROYALTIES. In consideration of the licenses granted to MMD hereunder,
MMD shall pay to TKT royalties as follows:
7.2.1. ROYALTIES BASED ON NET SALES OF * . Except as otherwise
provided in this Section 7.2, MMD shall pay to TKT a royalty based on the Net
Sales of * covered by the TKT Patent Rights or which uses the TKT
Technology in each Territory Block, from the launch of such sales in such
Territory Block until, with respect to any country, the expiration or
termination of this Agreement, at the rates set forth below:
************************************** ***************
******************************************* **************
************************** *****
********* *****
***********************************************************
************************.
For the purpose of calculating ******************** in a Territory Block: (i)
Net Sales for the *********************** ******* Territory Blocks
*****************, and such ************ ***** shall be deemed to be the
******************** for each of the ******************************* Territory
Blocks; (ii) Net Sales for the ***************** Territory Blocks *********
************************************ shall be deemed to be the
******************** for each of the ***** and ******* Territory Blocks; and
(iii) with respect to sales in the *************, **************************
Territory Blocks by a Third Party sublicensee or a distributor which is not an
Affiliate of MMD, the Net Revenues shall be used in lieu of the Net Sales in the
foregoing calculation of ********************.
7.2.2. ALTERNATIVE ROYALTY BASED ON GROSS MARGIN. Notwithstanding the
provisions of subsection 7.2.1., in ***** *******, ***** and
**********************************, the royalty payable by MMD to TKT shall be
as follows: (i) if MMD sells * finished product in final packing form
(whether or not with final labels) covered by the TKT Patent Rights or which
uses the TKT Technology to a Third Party sublicensee or distributor which is
not an Affiliate of MMD, MMD shall pay to TKT *********************************
****************************************; or (ii) if MMD does not sell such
* finished product in final packing form (whether or not with final
labels) to such Third Party sublicensee or distributor, then TKT and MMD shall
negotiate in good faith to share on ************ ***** all other monetary
consideration received by MMD from such Third Party sublicensee or distributor.
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7.2.3. SHARING OF REVENUES FROM SUBLICENSEES. If MMD grants a
sublicense hereunder to any Third Party to make, have made, use, distribute for
sale or sell * covered by the TKT Patent Rights or which uses the TKT
Technology in any country in the MMD Territory, MMD shall share with TKT
*********, all up front monetary consideration received by MMD from such Third
Party in connection therewith which are not based upon Net Sales or Net
Revenues, as applicable, of * sold by such Third Party sublicensee in
such country.
7.2.4. ADJUSTMENT OF ROYALTY RATES. At the request of MMD, the royalty
rates set forth in subsection 7.2.1. shall be appropriately adjusted by TKT and
MMD (i) with respect to sales of "generic" or "non-branded" * covered
by the TKT Patent Rights or which uses the TKT Technology by MMD in any country
within a Territory Block in which MMD elects to make such sales to compete with
sales by any Third Party of a "generic" or "non-branded" pharmaceutical
formulation of ****************************************************************
******* or (ii) with respect to sales of "branded" * covered by the TKT
Patent Rights or which uses the TKT Technology by MMD in any country within the
MMD Territory in which MMD experiences competition in the market for *
which was not in existence on the Effective Date and the TKT Patent Rights have
been judged to be invalid or unenforceable. In addition, TKT agrees to meet
with MMD at its request and negotiate in good faith concerning whether other
adjustments to the royalty rates set forth in subsection 7.2.1. should be made
in the event that MMD demonstrates to TKT's reasonable satisfaction that there
have been structural changes in the market for * in any country which
have rendered the royalty rates set forth in subsection 7.2.1 commercially
unreasonable.
At the request of MMD, the royalty rates set forth in subsection 7.2.2.
shall be appropriately adjusted by TKT and MMD (i) with respect to sales of
"branded", "non-branded" or "generic" * covered by the TKT Patent Rights
or which uses the TKT Technology in any country within a Territory Block in
which competitive conditions make it not feasible for MMD to maintain the level
of its Gross Margin or (ii) as may otherwise be necessary to maintain the
commercial viability of the product as contemplated by this Agreement.
7.3. ROYALTY REPORTS, EXCHANGE RATES. During the term of this Agreement,
following the First Commercial Sale of * covered by the TKT Patent
Rights or which uses the TKT Technology in any country in the MMD Territory,
MMD shall furnish to TKT a written quarterly report showing with respect to
* , on a country by country basis (except as provided below): (i) the
gross sales (except for sales to which subsection 7.2.2 applies) of all
* covered by the TKT Patent Rights or which uses the TKT Technology
sold by MMD and its Affiliates, its distributors and its permitted sublicensees
in the MMD Territory during the reporting period; (ii) the calculation of Net
Sales (except for sales to which subsection 7.2.2 applies) from such gross
sales; (iii) the Gross Margin related sales to which subsection 7.2.2
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applies and the calculation of such Gross Margin; (iv) any revenues from
sublicensees received by MMD during the reporting period; (v) the royalties and
other payments payable in United States dollars which shall have accrued
hereunder in respect of such Net Sales, Gross Margin and sublicensee payments;
(vi) withholding taxes, if any, required by law to be deducted as a payment by
TKT in respect of such Net Sales, Gross Margin and sublicensee payments; (vii)
the dates of the First Commercial Sales of * covered by the TKT Patent
Rights or which uses the TKT Technology in any country in the MMD Territory
during the reporting period; and (viii) the exchange rates used in determining
the amount of United States dollars. All amounts payable will first be
calculated in the currency of sale and then converted into United States
dollars on a quarterly basis using as a rate of exchange the actual foreign
currency exchange rate on the last day of the month preceding the end of the
quarter or such other method as is consistent with MMD's internal foreign
currency translation procedures. MMD shall use best efforts to provide reports
due on the sixtieth (60th) day following the close of each quarter. If no
royalty is due for any royalty period hereunder, MMD shall so report. MMD shall
keep complete and accurate records in sufficient detail to properly reflect all
gross sales, Net Sales and Gross Margin and to enable the royalties payable
hereunder to be determined.
7.4. Audits.
------
7.4.1. PROCEDURE. Upon the written request of TKT or MMD, the other
party shall permit an internal auditor or independent public accountant selected
by TKT or MMD, as the case may be, and acceptable to the other party, which
acceptance shall not be unreasonably withheld, to have access during normal
business hours to such of the records of MMD or TKT, as the case may be, as may
be reasonably necessary to verify the accuracy of the royalty reports, cost
computations and final cost amounts described hereunder, in respect of any
fiscal year ending not more than *********************** prior to the date of
such request. All such verifications shall be conducted at TKT's or MMD's, as
the case may be, expense and not more than ******** in each calendar year.
7.4.2. EXPENSES. In the event such accountant concludes that
additional royalties or lower expense reimbursement were required during such
period, and the party receiving such audit request agrees with such conclusion,
the additional royalty shall be paid in accordance with Section 7.5 or the
excess expense reimbursement shall be promptly repaid. The fees charged by such
accountant shall be paid by the party requesting such audit, unless the audit
discloses and the party receiving such audit request agrees (i) in the case of
an audit by TKT, that the royalties payable by MMD, or, (ii) in the case of an
audit by MMD, that the cost computation estimates and final amounts hereunder,
for the audited period are incorrect by more than ****************** in which
case the audited party shall pay the reasonable fees and expenses charged by the
accountant.
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
7.4.3. SUBLICENSES. MMD shall use reasonable efforts to include in
each Third Party sublicense granted by it pursuant to this Agreement a provision
requiring the sublicensee to make reports to MMD, to keep and maintain records
of sales made pursuant to such sublicense and to grant access to such records by
TKT's independent accountant to the same extent required of MMD under this
Agreement. Upon the expiration of *********************** following the end of
any fiscal year, the calculation of royalties payable with respect to such year
shall be binding and conclusive upon TKT; and MMD and its sublicensees shall be
released from any liability or accountability with respect to royalties for such
year.
7.4.4. CONFIDENTIAL TREATMENT. Each party agrees that all information
subject to review under this Section 7.4 or under any sublicense agreement is
confidential and that such party shall cause its accountant to retain all such
information in confidence.
7.5. ROYALTY PAYMENT TERMS. Royalties shown to have accrued by each royalty
report provided for under this Agreement shall be due and payable on the date
such royalty report is due. Payment of royalties in whole or in part may be made
in advance of such due date. Royalties determined to be owing, and any
overpayments to be credited, with respect to any prior quarter shall be added or
credited, as the case may be, to the next quarterly payment hereunder.
7.6. FORM OF PAYMENT. All research payments, milestone payments, royalties
and other payments due hereunder shall be paid in United States dollars. If at
any time legal restrictions prevent the prompt remittance of part or all
royalties with respect to any country of the MMD Territory where *
covered by the TKT Patent Rights or which uses the TKT Technology is sold,
payment shall be made through such lawful means or methods as MMD may determine.
7.7. WITHHOLDING TAXES. All royalties payable to TKT hereunder shall be
paid without deductions of any withholding taxes, value-added taxes or other
taxes, levies or charges applicable to such payments, other than (i) United
States taxes payable by TKT and (ii) foreign taxes payable by TKT to the extent
that such taxes are imposed by reason of TKT's having a permanent establishment
in any country within the MMD Territory or otherwise being subject to taxation
by such country (except foreign taxes imposed solely by reason of the license
granted to MMD hereunder). MMD shall be credited for the net benefit realized by
TKT for any foreign tax deductions or credits taken by TKT with respect to such
amounts paid by MMD. In addition, any reorganization of TKT or an Affiliate of
TKT with or into an entity organized outside the United States shall not result
in any increased costs to MMD under this Agreement. Each party will assist the
other party in claiming tax refunds, deductions or credits at the other party's
request and will cooperate to
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
minimize the withholding tax, if available, under various treaties applicable to
any payment made hereunder.
7.8. INTEREST ON LATE PAYMENTS. Any payments by either party that are not
paid on or before the date such payments are due under this Agreement shall bear
interest, to the extent permitted by law, at the London Interbank Offering Rate
as set by Citibank, N.A. from time to time, plus 50 basis points, calculated on
the number of days payment is delinquent.
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS
8.1. Ownership.
8.1.1. OWNERSHIP OF DISCOVERIES AND IMPROVEMENTS. All right, title and
interest in all writings, inventions, discoveries, improvements and other
technology, whether or not patentable or copyrightable, and any patent
applications, patents or copyrights based thereon (collectively, the
"Inventions") that are discovered, made or conceived during and as a result of
the Research Phase or the Development Phase solely by employees of TKT or others
acting on behalf of TKT ("TKT Inventions") shall be owned by TKT.
*******************************************************************************
******************************************************************************
*************************************************************************
*****************************************************************
***************************************************************
***************************************************************
****************. All right, title and interest in all Inventions that are
discovered, made or conceived during and as a result of the Research Phase or
the Development Phase or thereafter solely by employees of MMD or others acting
on behalf of MMD ("MMD Inventions") shall be owned by MMD. All right, title and
interest in all Inventions that are discovered, made or conceived during and as
a result of the Research Phase or the Development Phase or thereafter jointly by
employees of TKT and MMD or others acting on their behalf (the "Joint
Inventions") shall be jointly owned by MMD and TKT. Each party shall promptly
disclose to the other party the making, conception or reduction to practice of
Inventions by employees or others acting on behalf of such party. The parties
acknowledge that the ownership rights set forth above are subject to the license
grants set forth in Article 3.
8.1.2. COOPERATION OF EMPLOYEES. Each party represents and agrees that
its employees and consultants shall be obligated under a binding written
agreement to assign to such party, or as such party shall direct, all Inventions
made or conceived during and as a result of the Research Phase or the
Development Phase by such employee or consultant. In the case of non-employees
working for other companies or institutions on behalf of TKT or MMD, TKT or MMD,
as applicable, shall use reasonable efforts to obtain the right to license all
Inventions
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made by such non-employees on behalf of TKT or MMD, as applicable, in accordance
with the policies of the company or institution employing such non-employee. TKT
and MMD agree to undertake to enforce such agreements with employees or others
or such rights pertaining to non-employees (including, where appropriate, by
legal action) considering, among other things, the commercial value of such
Inventions.
8.2. Filing, Prosecution and Maintenance of TKT Patent Rights and TKT
Technology.
8.2.1. ***********************************. ****
**********************************************************
************************************************************
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****************************************************************
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****************************************************************
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*************************
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****************************************************************
***********************************
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**********************************************************
****************************************************************
***********************************
8.2.2. PATENT FILING COSTS. *** shall bear all costs associated with
filing, prosecuting and maintaining patent applications and patents covering the
TKT Patent Rights in all countries in the MMD Territory.
8.3. COOPERATION. Each party shall make available to the other party (or to
the other party's authorized attorneys, agents or representatives), its
employees, agents, subcontractors or consultants to the extent reasonably
necessary or appropriate to enable the appropriate party to file, prosecute and
maintain patent applications and resulting patents with respect to Inventions
owned by a party and for periods of time reasonably sufficient for such party to
obtain the assistance it needs from such personnel. Where appropriate, each
party shall sign or cause to have signed all documents relating to said patent
applications or patents at no charge to the other party. Notwithstanding the
foregoing, MMD shall not be precluded from contesting the validity or
enforceability of the TKT Patent Rights or TKT Technology.
8.4. NOTIFICATION OF PATENT TERM RESTORATION. *** shall notify *** of (i)
the issuance of each patent included within the TKT Patent Rights, giving the
date of issue and patent number for each such patent, and (ii) each notice
pertaining to any patent included within the TKT Patent Rights which it receives
as patent owner pursuant to the Drug Price Competition and Patent Term
Restoration Act of 1984 (hereinafter called the "Act"), or other similar laws
now or hereafter in effect, or pursuant to comparable laws or regulations in
other countries in the MMD Territory. The parties shall cooperate with each
other in applying for patent term extensions (including Supplementary Protection
Certificates in European Community Countries) where applicable in any country of
the MMD Territory. *** shall also notify *** of each application filed for
patent term extension, any allegations of failure to show due diligence and all
awards of patent term extensions with respect to the TKT Patent Rights. Such
notices shall be given promptly, but in any event within ten (10) business days
after receipt of each such notice pursuant to
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the Act (or comparable laws or regulations in other countries in the MMD
Territory). *** shall notify *** of each filing for patent term restoration
under the Act (or comparable laws or regulations in other countries in the MMD
Territory), any allegations of failure to show due diligence and all awards of
patent term restoration (extensions) with respect to the TKT Patent Rights.
8.5. NO OTHER TECHNOLOGY RIGHTS. Except as otherwise expressly provided in
this Agreement, under no circumstances shall a party hereto, as a result of this
Agreement, obtain any ownership interest in or other right to any technology,
know-how, patents, pending patent applications, products, or biological
materials of the other party, including items owned, controlled or developed by
the other party, or transferred by the other party to said party, at any time
pursuant to this Agreement. It is understood and agreed that this Agreement does
not grant MMD any license or other right in the TKT Patent Rights for uses other
than the production, manufacture, use, distribution for sale and sale of *
covered by the TKT Patent Rights or which uses the TKT Technology.
8.6. ENFORCEMENT OF TKT PATENT RIGHTS AND TKT TECHNOLOGY; DEFENSE OF
INFRINGEMENT ACTIONS. TKT and MMD shall each promptly, but in any event no later
than ten (10) business days after receipt of notice of such action, notify the
other in writing of any patent nullity actions, any declaratory judgment actions
or any alleged or threatened infringement of patents or patent applications or
misappropriation of intellectual property comprising the TKT Patent Rights or
the TKT Technology or if either party, or any of their respective Affiliates,
shall be individually named as a defendant in a legal proceeding by a Third
Party alleging infringement of a patent or other intellectual property right as
a result of the manufacture, production, use, distribution for sale or sale of
* , or of any other information or notification regarding the TKT
Patent Rights or TKT Technology.
8.6.1. ****************************. **************
***************************************************************
***************************************************************
***************************************************************
**************************************************************
***************************************************************
************************************************************
*************************************************************
*************************************************************
************************************************************
*************************.
8.6.2. *****************************************.
***************************************************************
**************************************************************
******************************************************.
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8.6.3. ************************************
********. *****************************************************
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ARTICLE 9. CONFIDENTIALITY
9.1. Nondisclosure Obligations.
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9.1.1. GENERAL. Except as otherwise provided in this Article 9, during
the term of this Agreement and for a period of ten (10) years thereafter, both
parties shall maintain in confidence and use only for purposes specifically
authorized under this Agreement (i) confidential information and data received
from the other party resulting from or related to the development of *
and (ii) all information and data not described in clause (i) above but
supplied by the other party under this Agreement marked "Confidential."
9.1.2. LIMITATIONS. For purposes of this Article 9, information and
data described in subsection 9.1.1 shall be
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
referred to as "Information." To the extent it is reasonably necessary or
appropriate to fulfil its obligations or exercise its rights under this
Agreement, a party may disclose Information it is otherwise obligated under
this Section not to disclose to its Affiliates, sublicensees, consultants,
outside contractors and clinical investigators, on a need-to-know basis on
condition that such entities or persons agree to keep the Information
confidential for the same time periods and to the same extent as such party is
required to keep the Information confidential; and a party or its sublicensees
may disclose such Information to government or other regulatory authorities to
the extent that such disclosure is reasonably necessary to obtain patents or
authorizations to conduct clinical trials of, and to commercially market,
* . The obligation not to disclose Information shall not apply to
any part of such Information that (i) is or becomes part of the public domain
other than by unauthorized acts of the party obligated not to disclose such
Information or its Affiliates or sublicensees; (ii) can be shown by written
documents to have been disclosed to the receiving party or its Affiliates or
sublicensees by a Third Party, provided such Information was not obtained by
such Third Party directly or indirectly from the other party under this
Agreement pursuant to a confidentiality agreement; (iii) prior to disclosure
under this Agreement, was already in the possession of the receiving party or
its Affiliates or sublicensees, provided such Information was not obtained
directly or indirectly from the other party under this Agreement pursuant to a
confidentiality agreement; (iv) can be shown by written documents to have been
independently developed by the receiving party or its Affiliates without breach
of any of the provisions of this Agreement; or (v) is disclosed by the
receiving party pursuant to oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand issued by a
court or governmental agency; provided that the receiving party notifies the
other party immediately upon receipt thereof (and provided that the disclosing
party furnishes only that portion of the Information which it is advised by
counsel is legally required).
9.2. Materials.
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9.2.1. ******************************. ***********
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
9.2.2. SAMPLES. Samples of compounds synthesized, purified or
developed in the course of the Research and Development Program shall not be
supplied or sent by either party to any Third Party, other than to regulatory
agencies or for use in clinical trials, unless protected by an appropriate
materials transfer agreement. Samples of compounds other than those described
above provided by one party (the "supplying party") to the other party (the
"receiving party") in the course of the Research Program shall not be supplied
or sent by the receiving party to any Third Party, other than to regulatory
agencies or for use in clinical trials, without the written consent of the
supplying party.
9.3. TERMS OF THIS AGREEMENT. TKT and MMD each agree not to disclose any
terms or conditions of this Agreement to any Third Party without the prior
consent of the other party, except as required by applicable law. If TKT
determines that it is required to file with the Securities and Exchange
Commission or other governmental agency this Agreement as an exhibit to the
registration statement relating to a public offering of its securities or
otherwise, TKT shall request confidential treatment of such portions of this
Agreement as it and MMD shall together determine. Notwithstanding the foregoing,
within 15 days after the execution of this Agreement, MMD and TKT shall agree
upon the substance of information that can be used as a routine reference in the
usual course of business to describe the terms of this transaction, and MMD and
TKT may disclose such information, as modified by mutual agreement from time to
time, without the other party's consent; provided, however, that if either party
determines that excessive use of such statement is made by the other party, then
the party determined to be using such statement excessively shall, upon notice
by the other party, cease making such statement.
9.4. Publications.
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9.4.1. PROCEDURE. Each party recognizes the mutual interest in
obtaining valid patent protection. Consequently, either party and its employees
or consultants or any other Third Party wishing to make a publication (including
any oral disclosure made without obligation of confidentiality) relating to work
performed by such party as part of the Program (the "Publishing Party") shall
transmit to the other party (the "Reviewing Party") a copy of the proposed
written publication at least ******************** prior to submission for
publication, or an abstract of such oral disclosure at least *****************
prior to submission of the abstract or the oral disclosure, whichever is
earlier. The Reviewing Party shall have the right (a) to propose modifications
to the publication for patent reasons, (b) to request a delay in publication or
presentation in order to protect patentable information, or (c) to request that
the information be maintained as a trade secret and, in such case, the
Publishing Party shall not make such publication.
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
9.4.2. DELAY. If the Reviewing Party requests a delay as described in
subsection 9.4.1. (b) the Publishing Party shall delay submission or
presentation of the publication for a period of **************** to enable
patent applications protecting each party's rights in such information to be
filed.
9.4.3. RESOLUTION. Upon the receipt of written approval of the
Reviewing Party, the Publishing Party may proceed with the written publication
or the oral presentation.
9.5. INJUNCTIVE RELIEF. The parties hereto understand and agree that
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Article 9 by either party or their employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf. Accordingly, each party shall be entitled to the granting of injunctive
relief by a court of competent jurisdiction against any action that constitutes
any such breach of this Article 9. It is understood that such injunctive relief
is intended solely as provisional relief pending the dispute resolution
procedures described in Section 13.6 hereof.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
10.1. General.
-------
10.1.1. AUTHORIZATION. Each party represents and warrants to
the other that it has the legal right and power to enter into this Agreement, to
extend the rights and licenses granted to the other in this Agreement, and to
fully perform its obligations hereunder, and that the performance of such
obligations will not conflict with its charter documents or any agreements,
contracts or other arrangements to which it is a party.
10.1.2. NO INCONSISTENT TKT ARRANGEMENTS. TKT represents and warrants
that it has full power and authority to grant the license set forth in Article 3
hereof and that there are no agreements, assignments, encumbrances or other
arrangements inconsistent with this Agreement including, without limitation, any
obligations to governmental agencies, private foundations or corporate entities
resulting from acceptance of research grant monies, equity investments,
corporate sponsorships or otherwise.
10.1.3. EXCLUSIVITY. TKT represents and warrants that MMD is the
exclusive licensee of the TKT Technology owned by TKT and the TKT Patent Rights
with respect to the manufacture, use or sale of * in the MMD Territory.
10.1.4. LICENSED TECHNOLOGY. TKT represents and warrants that, as of
the date hereof, the TKT Patent Rights and TKT Technology do not include any
intellectual property licensed to TKT from a Third Party other than those
included in a License
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Agreement **************************************************
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10.2. Patent Validity.
---------------
10.2.1. TITLE. TKT represents and warrants that as of the Effective
Date, it possesses the exclusive right, title and interest in and to the TKT
Technology owned by TKT and the TKT Patent Rights and that it has the full legal
right and power to: (i) enter into the obligations set forth in this Agreement;
and (ii) grant the rights and licenses set forth in Article 3.
10.2.2. NO ENCUMBRANCES. TKT represents and warrants, to the best of
its actual knowledge and based upon the advice of its counsel, to the best of
such counsel's actual knowledge without undertaking any independent
investigation, (i) that there are no encumbrances, liens or other claims
affecting the TKT Technology owned by TKT or the TKT Patent Rights and (ii) that
such TKT Technology and TKT Patent Rights are valid, enforceable and free from
infringement, and that there are no pending or threatened actions, suits or
proceedings relating thereto or to * .
10.2.3. NON-INFRINGEMENT. TKT represents and warrants that, to the
best of its actual knowledge and based upon the advice of its counsel, to the
best of such counsel's actual knowledge without undertaking any independent
investigation, there are no legal obstacles, including no patent rights or other
proprietary rights of others, which will prevent it from carrying out its
obligations under this Agreement or prevent MMD from carrying out its
obligations under this Agreement or which will be infringed by the performance
of either party's obligations under this Agreement.
10.3. FINANCIAL STATEMENTS. TKT represents and warrants that Schedule 10.3
hereto sets forth TKT's most recent regularly prepared balance sheet, that such
balance sheet is true and correct and fairly presents the financial condition of
TKT as of its date, and that the total assets set forth thereon are less than
$10,000,000.
ARTICLE 11. INDEMNITY
11.1. MMD INDEMNITY OBLIGATIONS. In the absence of TKT's negligence or a
breach of representation, warranty, covenant or agreement by TKT, MMD agrees to
defend, indemnify and hold TKT, its Affiliates and their respective employees
and agents harmless from all claims, losses, damages or expenses arising as a
result of (a) actual or asserted violations of any applicable law or regulation
by MMD or its Affiliates or sublicensees by virtue of which * covered
by the TKT Patent Rights or which uses the TKT Technology manufactured,
distributed or sold shall be alleged or determined to be adulterated,
misbranded, mislabeled or otherwise not in compliance with any
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
applicable law or regulation or (b) claims for bodily injury, death or property
damage attributable to MMD's performance of its obligations under this Agreement
or the manufacture, distribution, sale or use of * covered by the TKT
Patent Rights or which uses the TKT Technology by MMD or its Affiliates or
sublicensees.
11.2. TKT INDEMNITY OBLIGATIONS. In the absence of MMD's negligence or a
breach of representation, warranty, covenant or agreement by MMD, TKT agrees to
defend, indemnify and hold MMD, its Affiliates and sublicensees and their
respective employees and agents harmless from all claims, losses, damages and
expenses arising as a result of (a) actual or asserted violations of any
applicable law or regulation by TKT or its Affiliates or licensees by virtue of
which * covered by the TKT Patent Rights or which uses the TKT
Technology manufactured, distributed or sold shall be alleged or determined to
be adulterated, misbranded, mislabeled or otherwise not in compliance with any
applicable law or regulation or (b) claims for bodily injury, death or property
damage attributable to TKT's performance of its obligations under this
Agreement.
11.3. PROCEDURE. A party or any of its Affiliates or their respective
employees or agents (the "Indemnitee") that intends to claim indemnification
under this Article 11 shall promptly notify the other party (the "Indemnitor")
of any claim, loss, damage, or expenses in respect of which the Indemnitee
intends to claim such indemnification reasonably promptly after the Indemnitee
is aware thereof, and the Indemnitor shall assume the defense of any related
third party action, suit or proceeding with counsel mutually satisfactory to the
parties; PROVIDED, HOWEVER, that an Indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the Indemnitor, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Article 11 shall not apply to
amounts paid in settlement of any claim, loss, damage or expense if such
settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure of an Indemnitee to deliver
notice to the Indemnitor within a reasonable time after becoming aware of any
such matter, if prejudicial to the Indemnitor's ability to defend such action,
shall relieve the Indemnitor of any liability to the Indemnitee under this
Article 11. The Indemnitor shall not have any liability to any Indemnitee
otherwise than under this Article 11. The Indemnitee under this Article 11 and
its employees and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any matter covered by this
indemnification. The Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing a successful claim for indemnity hereunder.
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
11.4. INSURANCE. For the period starting with the First Commercial Sale of
* MMD and TKT shall each maintain product liability insurance with
respect to development, manufacture and sale of * covered by the TKT
Patent Rights or which uses the TKT Technology in reasonable amounts determined
after consultation with each other, for the term of this Agreement (if such
insurance is an occurrence-basis policy) or for an additional ********* after
the expiration or termination of this Agreement (if such insurance is a
claims-made basis policy).
ARTICLE 12. TERM AND TERMINATION
12.1. EXPIRATION. Unless terminated earlier pursuant to Section 12.2, this
Agreement shall expire and the licenses granted by TKT to MMD hereunder shall
become fully paid, with respect to each country in the MMD Territory, upon the
later of (i) ********* after the First Commercial Sale of * covered by
the TKT Patent Rights or which uses the TKT Technology by MMD or its Affiliates
or sublicensees in such country and (ii) the last to expire of any of the then
existing patents included in the TKT Patent Rights in such country.
12.2. TERMINATION. This Agreement may be terminated in the following
circumstances:
12.2.1. By either party by reason of a material breach not described
in subsection 12.2.5 that the breaching party fails to remedy within *******
after written notice thereof by the non-breaching party;
12.2.2. By MMD upon ******** prior written notice with respect to all
or a portion of the MMD Territory, if, in its reasonable judgment, MMD
determines that toxicities or side effects directly attributable to *
covered by the TKT Patent Rights or which uses the TKT Technology have rendered
it such a safety risk to the patient population that * covered by the
TKT Patent Rights or which uses the TKT Technology is commercially nonviable;
12.2.3. By MMD, upon ******** prior written notice, with respect to
any portion of the MMD Territory if, after consultation with TKT, MMD determines
that * covered by the TKT Patent Rights or which uses the TKT
Technology is commercially nonviable;
12.2.4. By TKT, with respect to the country or relevant portion of the
MMD Territory, in the event that TKT elects to respond to or defend against a
legal proceeding by a Third Party alleging infringement of a patent or other
intellectual property right as a result of the manufacture, production, use,
distribution for sale or sale of * in any country in the MMD Territory
pursuant to subsection 8.6.5 provided that the failure to so respond or defend
against such
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
action would have had a material adverse impact on MMD's ability to market
* , either directly or indirectly through sublicensees, in such
country or relevant portion of the MMD Territory;
12.2.5. By TKT, with respect to the relevant portion of the MMD
Territory, in the event that either (i) MMD fails to use its best efforts to
meet the milestones described in APPENDIX A applicable to such portion of the
MMD Territory or (ii) MMD fails to use its best efforts to commercialize *
covered by the TKT Patent Rights or which uses the TKT Technology in such
portion of the MMD Territory using commercially reasonable means consistent with
those used for MMD products with similar commercial potential, and, in either or
both events, MMD fails to remedy or take reasonable action to initiate a remedy
of such default within ******* after notice thereof by TKT; provided that
termination by TKT pursuant to this subsection 12.2.5 shall be TKT's sole remedy
for any such failure by MMD to meet such milestones or commercialize *
covered by the TKT Patent Rights or which uses the TKT Technology;
12.2.6. If a competing * product is introduced into any
country in the MMD Territory, and TKT does not have issued patents or pending
claims under the patents included in the TKT Patent Rights which (if issued, in
the case of pending claims) will enable a patent infringement action to be
initiated, then MMD has the right to terminate as to any such country or the
Territory Block in which it is included on *** **** notice; or
12.2.7. By either party upon bankruptcy, insolvency, dissolution or
winding up of the other.
12.3. EFFECT OF TERMINATION. Expiration or termination of this Agreement
shall not relieve the parties of any obligation accruing prior to such
expiration or termination. The provisions of Section 3.2 (with respect only to
licenses granted prior to the time of expiration or termination and subject to
the terms described below) and Article 7 (with respect only to milestone
payments and royalties accrued at the time of expiration or termination but not
yet paid), Article 8, Article 9 and Article 11 shall survive the expiration or
termination of this Agreement. In the event of a termination of this Agreement
pursuant to subsections 12.2.1 to 12.2.7, then all TKT Patent Rights licensed
hereunder with respect to the portion of the MMD Territory terminated will be
returned to TKT and, except in the event that this Agreement is terminated by
TKT pursuant to subsection 12.2.1, copies of all regulatory filings and related
supporting and other materials prepared in connection with such terminated
portion of the MMD Territory shall also be delivered to and available for use by
TKT, and in any event MMD will immediately cease to sell * covered by
the TKT Patent Rights or which uses the TKT Technology in the relevant portion
of the MMD Territory with respect to which this Agreement is terminated. In the
event of termination of this Agreement in all countries
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
within the MMD Territory, MMD will ******************************
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************************. Except in the event that this Agreement is terminated
by TKT pursuant to subsection 12.2.1, MMD shall, to the extent legally
permissible, take all additional action reasonably necessary to assign all of
its right, title and interest in and transfer possession and control to TKT of
the regulatory filings prepared by MMD to the extent that such filings relate to
* covered by the TKT Patent Rights or which use the TKT Technology
and any regulatory approvals received by MMD to the extent that such approvals
relate to * covered by the TKT Patent Rights or which use the TKT
Technology; provided, however, that MMD may retain a joint ownership interest
in such filings and approvals to the extent that such filings or approvals are
necessary under this Agreement for portions of the MMD Territory with respect
to which this Agreement has not been terminated or for the development or
commercialization by MMD of products other than * covered by the TKT
Patent Rights or which use the TKT Technology. In the event of a termination of
this Agreement other than by TKT pursuant to subsections 12.2.1 or 12.2.5, TKT
shall be obligated to pay to MMD compensation on such commercially reasonable
terms as shall be determined by mutual agreement of TKT and MMD for the use of
all licenses granted by MMD under Section 3.2.
ARTICLE 13. MISCELLANEOUS
13.1. FORCE MAJEURE. Neither party shall be held liable or responsible to
the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party, including but not limited to fire, floods,
embargoes, war, acts of war (whether war is declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labor disturbances, acts of
God or acts, omissions or delays in acting by any govern mental authority or the
other party.
13.2. ASSIGNMENT. This Agreement may not be assigned or otherwise
transferred by either party without the consent of the other party; provided,
however, that either TKT or MMD may, without such consent, assign its rights and
obligations under this Agreement (i) in connection with a corporate
reorganization, to any Affiliate, all or substantially all of the equity
interest of which is owned and controlled by such party or its direct or
indirect parent corporation, or (ii) in connection with a merger, consolidation
or sale of substantially all of such party's assets to an unrelated third party;
provided, however, that such party's rights and obligations under this Agreement
shall be assumed by its successor in interest in any such transaction and shall
not
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be transferred separate from all or substantially all of its other business
assets, including those business assets that are the subject of this Agreement.
Any purported assignment in violation of the preceding sentence shall be void.
Any permitted assignee shall assume all obligations of its assignor under this
Agreement.
13.3. SEVERABILITY. Each party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the parties would not have entered into this Agreement
without the invalid provisions.
13.4. NOTICES. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone, personal delivery or courier) or courier, postage
prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor and shall be effective upon receipt by the
addressee.
If to
TKT: Transkaryotic Therapies, Inc.
195 Albany Street
Cambridge, Massachusetts 02139
Attention: President
Telephone: (617) 349-0200
Telecopy: (617) 491-7903
with a copy to: Palmer & Dodge
One Beacon Street
Boston, Massachusetts 02108
Attention: Peter Wirth, Esq.
Telephone: (617) 573-0100
Telecopy: (617) 227-4420
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<PAGE> 45
If to MMD: Marion Merrell Dow Inc.
9300 Ward Parkway
Kansas City, Missouri 64114-0480
Attention: General Counsel
Telephone: (816) 966-4000
Telecopy: (816) 966-3805
with copies to: Marion Merrell Dow Inc.
2110 E. Galbraith Rd.
Cincinnati, OH 45215
Attention: General Patent Counsel
Telephone: (513) 948-7960
Telecopy: (513) 948-7961
and
Shook, Hardy & Bacon, P.C.
One Kansas City Place
1200 Main Street, Suite 3100
Kansas City, Missouri 64105
Attention: Randall B. Sunberg, Esq.
Telephone: (816) 474-6550
Telecopy: (816) 421-5547
13.5. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
choice of law provisions thereof.
13.6. DISPUTE RESOLUTION. Any disputes arising between the parties relating
to, arising out of or in any way connected with this Agreement or any term or
condition hereof, or the performance by either party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
promptly presented to the Chief Executive Officers of TKT and MMD for resolution
and if the Chief Executive Officers or their designees cannot promptly resolve
such disputes, then such dispute shall be finally resolved by binding
arbitration, except that disputes arising within the Development Committee shall
be ultimately resolved, without the use of arbitration, by the Chief Executive
Officer of MMD. Whenever a party shall decide to institute arbitration
proceedings, it shall give written notice to that effect to the other party. The
party giving such notice shall refrain from instituting the arbitration
proceedings for a period of sixty (60) days following such notice. Any
arbitration hereunder shall be conducted under the commercial rules of the
American Arbitration Association. Each such arbitration shall be conducted in
the English language by a panel of three arbitrators appointed in accordance
with such rules; provided, however, that both parties hereto shall be entitled
to representation by counsel, to appear and present written and oral evidence
and argument and to cross-examine witnesses presented by the other party. The
arbitral panel (i) shall have the authority to grant specific performance, (ii)
may allocate between the parties the costs of arbitration in such equitable
manner as they may
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determine, but (iii) shall not render an arbitral award contrary to the
provisions of this Agreement. The arbitral award shall be in writing and the
arbitral panel shall provide written reasons for its award. The award of the
arbitral panel shall be final and binding upon the parties hereto. Any such
arbitration shall be held in Chicago, Illinois, or any other mutually agreed
location. Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be. Notwithstanding the
provisions of this Section 13.6, in the event of a material breach of this
Agreement by TKT that TKT fails to remedy within 90 days after written notice
thereof by MMD, MMD shall have the right to bring an action for specific
performance by TKT or its Affiliates of TKT's obligations hereunder, to seek an
injunction with respect to any action by TKT or its Affiliates inconsistent with
any of TKT's obligations hereunder or to bring an action against TKT or its
Affiliates at law or in equity in any court or other tribunal in which such
action may properly be brought.
13.7. ENTIRE AGREEMENT. This Agreement, together with the Class E Stock
Purchase Agreement, contains the entire understanding of the parties with
respect to the subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly merged in
and made a part of this Agreement. This Agreement may be amended, or any term
hereof modified, only by a written instrument duly executed by both parties
hereto.
13.8. HEADINGS. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
13.9. INDEPENDENT CONTRACTORS. It is expressly agreed that TKT and MMD
shall be independent contractors and that the relationship between the two
parties shall not constitute a partnership, joint venture or agency. Neither TKT
nor MMD shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior consent of the other party to do so.
13.10. AGREEMENT NOT TO SOLICIT EMPLOYEES. During the term of this
Agreement and for a period of two (2) years following the termination of this
Agreement, TKT and MMD agree not to seek to persuade or induce any employee of
the other company to discontinue his or her employment with that company in
order to become employed by or associated with any business, enterprise or
effort that is associated with its own business.
13.11. EXPORTS. The parties acknowledge that the export of technical data,
materials or products is subject to the exporting party receiving any necessary
export licenses and that the parties cannot be responsible for any delays
attributable to
-41-
<PAGE> 47
export controls which are beyond the reasonable control of either party. TKT and
MMD agree not to export or re-export, directly or indirectly, any information,
technical data, the direct product of such data, samples or equipment received
or generated under this Agreement in violation of any governmental regulations
which may be applicable, including, but not limited to, the Export
Administration Act of 1979, as amended, its rules and regulations, including,
but not limited to, Part 779 of the United States Export Control Regulations,
published by the United States Department of Commerce, and other applicable
export control laws. TKT and MMD agree to obtain similar covenants from their
licensees, sublicensees and contractors with respect to the subject matter of
this Section 13.11.
13.12. WAIVER. The waiver by either party hereto of any right hereunder or
the failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
13.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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<PAGE> 48
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
TRANSKARYOTIC THERAPIES, INC.
By:/s/ Richard F. Selden
--------------------------------
Title: President and
Chief Executive Officer
MARION MERRELL DOW INC.
By: /s/ Terry J. Shelton
--------------------------------
Title: V.P., Licensing and Business
Development
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<PAGE> 49
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX A
Milestones
***** ******
*******************************
***********************************
**********
***************************************************************
****** *********
*************************** *********
******** *********
************
********** *********
************** *********
************ *********
<PAGE> 50
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
SCHEDULE 1.23
TKT PATENT RIGHTS
**************
*****
***************
**************************************************
***********************************
*********************************
*********** **********
***********************************
******* *******
*************** ************************************
************************************
************************************
******
*************************************************
************************************
************** *******
*********** ***********
*****************
*************** *****
*********************** *********************************
****************************************
*****************
******************* ***********
************** *********
*********** *********
***********************************
*************** ************************************
***************************************
***************************************
**********
<PAGE> 51
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 1.24
-------------
TKT TECHNOLOGY WITHOUT SUBLICENSE RIGHTS
***********************************************************
****************************************************************
************************************************************
***********
<PAGE> 52
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 4.1.2
--------------
I. ****************
A. **************************************************
1. **************************************************
***************
2. ************************************************
3. *****************************************
B. ****************************************************
******************************************
C. ************************************
1. ***************************************************
*********************************************
2. *************************************************
***********
3. ******************************************
**********************************************
****************
D. **************************
1. *************************************
2. **********************************************
E. ***************************************
1. **********************************************
************************************************
*********************************************
2. ********************************************
************************************************
************************************************
*****************
F. **********************************
1. ************************************************
************************************************
*************************************************
*******************************************
**************************************************
************
2. ************************************************
***********************************************
*********************************************
******************
3. **************************************************
*************************************************
*****
<PAGE> 53
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
G. **************************
1. ************************************************
**************************************************
***************************
II. ***********************************************************
***********************************************************
************************************************************
******************************************************
**************************************************
*******************************************************
************************************************************
**************************************************
A. ************
B. ************
C. ************
D. ************
E. ************
F. *************
G. *************
III. **************************************
A. *****************
1. *****************************************
2. ***************************
3. ******************
B. ******************
1. *******************
2. *****************************************
C. *******************
1. ***************************
2. ********************************
3. ******************
D. *******************
1. ***************************
2. ************************************************
<PAGE> 54
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 7.1
------------
*******
*******
******
*******
*****
***********
*****
***********
**************
