<PAGE> 1
United States
Securities and Exchange Commission
Washington D.C. 20549
FORM 10-Q/A
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Period Ended March 31, 1997
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition Period From _________ to
__________.
Commission File Number: 0-20859
GERON CORPORATION
Delaware 75-2287752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
230 Constitution Drive, Menlo Park, CA 94025
(Address of principal executive offices)
Registrant's telephone number, including area code: (650) 473-7700
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $0.001 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class: Common Stock $0.001 par value Outstanding at April 11, 1997: 10,221,470
<PAGE> 2
GERON CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
Condensed Balance Sheets as of March 31, 1997 and
December 31, 1996
Condensed Statements of Operations for the three months
ended March 31, 1997 and 1996
Condensed Statements of Cash Flows for the three months
ended March 31, 1997 and 1996
Notes to Financial Statements
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1: Legal Proceedings
Item 2: Changes In Securities
Item 3: Defaults upon Senior Securities
Item 4: Submission of Matters to a Vote of Security Holders
Item 5: Other Information
Item 6: Exhibits and Reports on Form 8-K
SIGNATURES
1
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The Registrant hereby amends the following Item of its Form 10-Q for the
quarterly period ended March 31, 1997 filed with the Securities and Exchange
Commission on May 13, 1997:
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<S> <C>
10.26* License and Research Collaboration Agreement dated March 23, 1997
between Registrant and Pharmacia & Upjohn, S.p.A.
10.27* Amendment No. 2 to License and Research Collaboration Agreement
dated April 24, 1995 between Registrant and Kyowa Hakko Kogyo, Co.,
Ltd. dated March 23, 1997
10.28* Three Party Agreement dated March 23, 1997 by and among Registrant,
Kyowa Hakko Kogyo Co., Ltd. and Pharmacia & Upjohn, S.p.A.
10.29* Common Stock Purchase Agreement dated March 23, 1997 between
Registrant and Pharmacia & Upjohn, S.p.A.
10.30* Intellectual Property License Agreement dated December 9, 1996
between Registrant and the University Technology Corporation
10.31+ Second Amendment to Note Secured by
Second Deed of Trust with Hilleman
10.32+ Second Amendment to Note Secured by
Stock Pledge Agreement with West
10.33+ First Amendment to Note Secured by Deed
of Trust with Harley
10.34+ Note Secured by Second Deed of Trust
with Greenwood
11.1 + Computation of Net Loss Per Share
27.1 + Financial Data Schedule
</TABLE>
_______________
* Certain portions of this Exhibit have been omitted for which
confidential treatment has been requested and filed separately
with the Securities and Exchange Commission.
+ Previously filed.
2
<PAGE> 4
(b) REPORTS ON FORM 8-K
(i) The Company filed the following
reports on Form 8-K relating to the
issuance of certain press releases:
Form 8-K
Report Date: December 23, 1996
Filing Date: January 3, 1997
Item 5: Other Events
Item 7(c): Exhibits
Form 8-K
Report Date: March 23, 1997
Filing Date: March 26, 1997
Item 5: Other Events
Item 7(c): Exhibits
(ii) The Company filed the following
reports on Form 8-K relating to the
issuance of securities pursuant to
Regulation S promulgated under the
Securities Act of 1933, as amended:
Form 8-K
Report Date: January 10, 1997
Filing Date: January 24, 1997
Item 7(c): Exhibits
Item 9: Sale of Equity Securities Pursuant
to Regulation S
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GERON CORPORATION
By: /s/ David L. Greenwood
----------------------------------------
David L. Greenwood
Chief Financial Officer, Treasurer
and Secretary
(Duly Authorized Signatory and Principal
Financial and Accounting Officer)
Date: June 15, 1998
3
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
10.26* License and Research Collaboration Agreement dated March 23, 1997 between
Registrant and Pharmacia & Upjohn, S.p.A.
10.27* Amendment No. 2 to License and Research Collaboration Agreement dated
April 24, 1995 between Registrant and Kyowa Hakko Kogyo Co., Ltd., dated
March 23, 1997
10.28* Three Party Agreement dated March 23, 1997 by and among Registrant, Kyowa
Hakko Kogyo Co., Ltd. and Pharmacia & Upjohn, S.p.A.
10.29* Common Stock Purchase Agreement dated March 23, 1997 between Registrant
and Pharmacia & Upjohn, S.p.A.
10.30* Intellectual Property License Agreement dated December 9, 1996 between
Registrant and the University Technology Corporation
10.31+ Second Amendment to Note Secured by Second Deed of Trust with Hilleman
10.32+ Second Amendment to Note Secured by Stock Pledge Agreement with West
10.33+ First Amendment to Note Secured by Deed of Trust with Harley
10.34+ Note Secured by Second Deed of Trust with Greenwood
11.1 + Computation of Net Loss Per Share
27.1 + Financial Data Schedule
</TABLE>
________________
* Certain portions of this Exhibit have been omitted for which
confidential treatment has been requested and filed separately
with the Securities and Exchange Commission.
+ Previously filed.
20
<PAGE> 1
EXHIBIT 10.26
LICENSE AND RESEARCH
COLLABORATION AGREEMENT
THIS LICENSE AND RESEARCH COLLABORATION AGREEMENT has a signature date
as of the 23rd day of March 1997 (the "Signature Date"), but will be effective
only as provided in Section 19.14 below, by and between Geron Corporation, a
Delaware corporation having its principal place of business at 230 Constitution
Drive, Menlo Park, California, U.S.A. 94025 ("Geron") and Pharmacia & Upjohn
S.p.A., a corporation of Italy having its principal place of business at Via
Robert Koch, 1.2, 20152 Milano, Italy ("P&U").
RECITALS
A. Geron possesses certain rights pertaining to the inhibition of
the enzyme telomerase as it relates to the treatment of cancer in humans.
B. In April 1995, Geron entered into the KH Collaboration (as
defined below) with Kyowa Hakko Kogyo Co., Ltd., a corporation of Japan, for
the research and development of compounds that inhibit telomerase for the
treatment of cancer in humans and for sale in certain countries of Asia.
C. In December 1996, Geron and P&U entered into: (i) a Heads of
Agreement that describes a collaboration with the objective to discover and
develop pharmaceutical products containing compounds that inhibit telomerase
for the treatment of cancer in humans and for sale on a worldwide basis,
subject to Kyowa Hakko entering into an appropriate amendment to the
<PAGE> 2
KH Collaboration with Geron, and (ii) a Common Stock Purchase Agreement under
which P&U purchased U.S. 2,000,000 of Geron Common Stock.
D. Geron and P&U desire to enter into this Agreement to achieve
the objective set forth in the Heads of Agreement, and Geron is
contemporaneously entering into (i) an amendment of the KH Collaboration to
conform to the terms and provisions of this Agreement and (ii) the Three-Way
Agreement (as defined below).
E. Geron and P&U are also contemporaneously entering into a
second Common Stock Purchase Agreement pursuant to which Geron will sell and
P&U will purchase an additional U.S. 8,000,000 of Geron Common Stock in two
installments.
ARTICLE 1
DEFINITIONS
The following terms shall be defined as follows for the purposes of
this Agreement:
1.1 "Affiliate" means an entity that, directly or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with another entity. For purposes of this definition, "control"
means the direct or indirect ownership of (a) at least 50% or, if less than
50%, the maximum percentage as allowed by applicable law, of the outstanding
voting securities of such entity or (b) at least 50% of the decision making
authority of such entity.
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1.2 "Asian Territory" means China, Hong Kong, India, Indonesia,
Kampuchea, South and North Korea, Laos, Malaysia, Myanmar (formerly Burma), the
Philippines, Singapore, Taiwan, Thailand, and Vietnam. The Asian Territory
does not include Japan.
1.3 "Candidate Drug" means a compound suitable for commercial
development for use in the Field that has been selected by P&U in accordance
with Section 2.6 for further pre-clinical and clinical development by P&U in
accordance with P&U CD Selection Procedures and this Agreement.
1.4 "Clinical Expense Credit" means a credit against future
royalties payable to Geron pursuant to Article 7 equal to [*] percent ([*]%)
of the costs and expenses incurred [*].
1.5 "COGS" shall mean the sum of the following costs to the extent
allocable to a Product sold by P&U in the Territory for the particular period
during which any royalty is calculated (net of any intercompany transfer
pricing): [*]. COGS shall exclude the following: [*]. COGS shall be
calculated in a manner consistent with generally accepted accounting principles
used in the place
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 4
of manufacture, consistently applied. The methodology to be used in making the
allocations referred to above shall be consistent with P&U's methodology for
similar products and shall be consistent from year to year.
1.6 "Control" means, for purposes of this Agreement (other than
the definition of Affiliate), possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of any agreement
or other arrangement with any Third Party. Rights which may be acquired by the
exercise of an option that would increase the royalty or other payment
obligation of the party exercising such option shall not be Controlled by such
party. Examples of the meaning of Control are set forth on EXHIBIT 1.6.
1.7 "Development Plan" means the written plan for clinical
development of a Product prepared by P&U in accordance with Section 3.1.
1.8 "Effective Date" shall have the meaning set forth in Section
19.14.
1.9 "Field" means the inhibition of the enzyme telomerase for the
treatment of cancer in humans, excluding treatments based on antisense,
ribozyme, or gene therapy-based telomerase inhibitors.
1.10 "Geron Compound" means a compound that [*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 5
[*]. In the event a Geron Compound is identical to a P&U Compound or a KH
Compound, then that compound shall be deemed, for purposes of this Agreement, to
be a Compound of the party that identified or caused to be identified (i.e., by
submitting for screening) that compound as a telomerase inhibitor. For the
purpose of this Section 1.10 and Sections 1.19, 1.30, and 1.40, (i) a compound
is not a telomerase inhibitor unless it has a [*] as tested in the primary and
primary and secondary assays referred to in the Research Plan) of less than [*]
and [*] of at least [*] when tested in the secondary biochemical assays referred
to in the Research Plan, and (ii) two compounds are "Chemically Equivalent" if
(a) the second compound is an isomer, salt, or ester of the first compound or
(b) the second compound results from a chemical synthesis or compound
acquisition program based on the first compound or on SAR data relating to the
first compound, and the second compound does not have a [*] [*] as tested in the
primary and primary and secondary assays referred to in the Research Plan) of at
least [*] higher than the first compound.
1.11 "Geron Knowhow" means Information that (i) Geron discloses to
P&U under this Agreement, or (ii) is Controlled by Geron or its Affiliates
during the term of this Agreement, including Information resulting from the
Research. Geron Knowhow excludes Geron Patents.
1.12 "Geron Patent" means a Patent which claims a process, method,
apparatus, composition of matter, compound, chemical, material, or article of
manufacture useful in the Field (or the discovery, development, manufacture and
clinical use of compounds having
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 6
potential activity in the Field), which Patent is Controlled by Geron or its
Affiliates during the term of this Agreement, including Geron's undivided
interest in any Joint Patent. Set forth in EXHIBIT 1.12 is a list of all
current Geron Patents.
1.13 "Geron Technology" means the Geron Knowhow and Geron Patents,
collectively.
1.14 "IND" means an Investigational New Drug application filed with
the U.S. Food and Drug Administration or the comparable application in a Major
Country.
1.15 "Information" means techniques; inventions; practices;
methods; knowledge; knowhow; skill; experience; test data, including, without
limitation, pharmacological, toxicological, and clinical test data, analytical
and quality control data, having application in the Field.
1.16 "Joint Patent" means a Patent that claims a process, method,
apparatus, composition of matter, compound, chemical, material, or article of
manufacture useful in the Field (or the discovery, development, manufacture and
clinical use of compounds having potential activity in the Field) and the
subject of which is an invention jointly invented, as determined under the laws
of the jurisdiction in which a patent application for such invention is filed,
by Geron and P&U in the course of performing the Research.
1.17 "Joint Research Committee" or "JRC" means the committee
established pursuant to this Agreement with responsibility for directing the
Research.
<PAGE> 7
1.18 "KH Collaboration" means the License and Research
Collaboration Agreement between Geron and Kyowa Hakko, dated April 24, 1995, as
amended.
1.19 "KH Compound" means a compound useful in the Field that [*]
In the event a KH Compound is identical to a P&U Compound or a Geron Compound,
then that compound shall be deemed, for purposes of this Agreement, to be a
Compound of the party that first identified or caused to be identified (i.e., by
submitting for screening) that compound as a telomerase inhibitor.
1.20 "KH Knowhow" means Information which (i) Kyowa Hakko discloses
to Geron under the KH Collaboration or (ii) is Controlled (as defined in the KH
Collaboration) by Kyowa Hakko or its Affiliates during the term of this
Agreement. KH Knowhow excludes KH Patents.
1.21 "KH Patent" means a Patent which claims a process, method,
apparatus, composition of matter, compound, chemical, material, or article of
manufacture useful in the Field (or the discovery, development, manufacture and
clinical use of compounds having potential activity in the Field), which Patent
is Controlled (as defined in the KH Collaboration) by KH or its Affiliates
during the term of this Agreement, including KH's undivided interest in any
Patent jointly owned with Geron.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 8
1.22 "KH Technology" means the KH Knowhow and KH Patents,
collectively.
1.23 "Kyowa Hakko" or "KH" means Kyowa Hakko Kogyo Co., Ltd., a
corporation of Japan having its principal place of business at 1-6-1
Ohtemachi, Chiyoda-Ku, Tokyo, Japan.
1.24 "Major Country" means [*]
1.25 "Major Sublicensee" means a Third Party to which P&U has
granted the right to manufacture, in whole or in part, and sell Products.
1.26 "NDA" means a New Drug Application filed with the U.S. Food
and Drug Administration or the comparable application in a Major Country.
1.27 "Patent" means any patent application or issued patent,
including any extension, registration, confirmation, continuation,
continuation-in-part, reissue, re-examination, renewal, supplementary
protection certificate or the like thereof in any country. A patent application
which is still pending more than [*] after its filing date shall not be
taken into account for the purpose of Article 7 after such time, until a patent
issues from such application; provided however, that in the event the patent
application is licensed from a Third Party and the license with such Third
Party provides for a longer pendency period, such longer pendency period shall
apply for purposes of this Agreement.
1.28 "Patent Costs" means the fees and expenses paid to legal
counsel and other third parties, and filing and maintenance expenses, incurred
in connection with the prosecution,
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 9
establishment and maintenance of rights under Patents applicable to Products,
including costs of patent interference and opposition proceedings, but
specifically excluding expenses related to litigation and any expenses related
to the enforcement of any Patent or the defense of any claim of patent
infringement.
1.29 "Product" means any pharmaceutical product or preparation that
comprises a Compound selected by P&U for development in accordance with Section
2.6 herein having activity in the Field, and that utilizes or was made as a
result of utilizing Geron Technology, KH Technology or P&U Technology.
1.30 "P&U Compound" means a compound useful in the Field that [*]
In the event a P&U Compound is identical to a Geron Compound or a KH Compound,
then that compound shall be deemed, for purposes of this Agreement, to be a
Compound of the party that first identified or caused to be identified (i.e., by
submitting for screening) that compound as a telomerase inhibitor.
1.31 "P&U Knowhow" means Information that (i) P&U discloses to
Geron under this Agreement, or (ii) is Controlled by P&U or its Affiliates
during the term of this Agreement, including Information resulting from the
Research. P&U Knowhow excludes P&U Patents.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 10
1.32 "P&U Patent" means a Patent which covers a method, apparatus,
compound, chemical, material, or article of manufacture useful in the Field (or
the discovery, development, manufacture and clinical use of compounds having
potential activity in the Field), which Patent is Controlled by P&U or its
Affiliates during the term of this Agreement, including P&U's undivided
interest in any Joint Patent.
1.33 "P&U CD Selection Procedures" means the written guidelines
adopted by P&U from time to time with respect to the general criteria,
procedures, and review process for selecting pharmaceutical compounds for
commercial development and, to the extent the same exist, the specific
guidelines applicable to oncology pharmaceuticals shall be considered P&U CD
Selection Procedures for purposes of this definition. P&U shall keep Geron
informed of such procedures, including any changes in such procedures. The
current P&U CD Selection Procedures are set forth in the Research Plan, which
shall be updated to reflect any change in such Procedures.
1.34 "P&U Technology" means the P&U Knowhow and P&U Patents,
collectively.
1.35 "P&U Sales" means the gross amount invoiced by P&U, its
Affiliates and Major Sublicensees for sales of Products, less: (i) rebates,
retroactive price reductions, and discounts, including cash discounts, (ii)
credits or allowances actually granted upon claims, rejections or returns of
Products, including recalls, regardless of the party requesting such, (iii)
freight, postage, shipping, and insurance charges paid for delivery of Product,
to the extent billed and
<PAGE> 11
paid by P&U, and (iv) taxes (other than income taxes), duties and other
governmental charges incurred in connection with the sale of Products.
1.36 "Research" means all work performed by or for Geron and P&U in
the Field during the Research Term according to the Research Plan.
1.37 "Research Plan" means the written plan for the Research to be
conducted during the Research Term attached hereto as EXHIBIT 1.37 .
1.38 "Research Term" means the period commencing on the Effective
Date and ending on the first to occur of (i) termination of this Agreement by
either party under Article 17, or (ii) the third anniversary of the Effective
Date (unless otherwise extended in accordance with this Agreement).
1.39 "Sales Plan" means the written plan prepared by P&U for the
commercialization of each Product in the Territory.
1.40 "Selectable Compounds" means all compounds identified as
telomerase inhibitors by Geron or P&U prior to the Effective Date or by either
party or KH during the Research Term; provided, however, [*]
1.41 "Selection Period" means the period commencing on the
Effective Date and ending twelve (12) months after the end of the Research
Term.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 12
1.42 "Territory" means the entire world.
1.43 "Third Party" means any person or entity other than Geron,
P&U, Kyowa Hakko, or an Affiliate of Geron, P&U, or Kyowa Hakko.
1.44 "Third Party License" means a license between a party to this
Agreement and any Third Party.
1.45 "Three-Way Agreement" means the Three Party Agreement dated as
of the Signature Date of this Agreement by and among Geron, P&U and Kyowa
Hakko.
<PAGE> 13
ARTICLE 2
RESEARCH
2.1 Collaborative Research. Geron and P&U will conduct the
Research on a collaborative basis with the goal of identifying compounds useful
in the Field and suitable for clinical development into commercially successful
Products in the Territory. As part of such collaboration, Geron and P&U shall
each use reasonable diligent efforts to engage in and conduct the Research and
shall commit the resources required for the Research, all as more particularly
set forth in the Research Plan. The Research Plan describes the activities and
resource commitments of Geron and P&U, including, without limitation, for
scientific research, drug discovery, screening and testing of compounds,
synthesizing compounds, and determining structure/activity relationships, to be
undertaken by each party in the Research. As further described in the Research
Plan, Geron shall disclose such Geron Knowhow and provide such technical
assistance and materials as may be reasonably required to establish its in
vitro telomerase inhibitor screening assays at P&U's (or its Affiliate's)
facilities. Subject to any rights of Third Parties, appropriately selected
compounds contained in libraries Controlled by P&U and its Affiliates shall be
screened by P&U or Geron to identify telomerase inhibitors as described in the
Research Plan. Subject to the approval of the JRC, Geron may contract with and
make payments to Third Parties for Research to be conducted in collaboration
with Geron consistent with the Research Plan. Any modifications of the Research
Plan shall be made by the JRC.
<PAGE> 14
2.2 Research Efforts.
(a) To further the purposes of the Research, each party may
provide certain of its employees to work at the other party's facilities,
subject to approval by the JRC. Each party shall record scientific data in
laboratory notebooks in a manner that protects the confidentiality of
information relating to the structure of telomerase inhibitor compounds of the
other party. On reasonable notice, and at reasonable intervals, each party
shall have the right to inspect and copy such notebooks and other relevant
records to the extent reasonably required to carry out its respective
obligations and to exercise its respective rights hereunder.
(b) Each party shall inform the other party and the JRC
in writing promptly upon the party's synthesis or identification of compounds or
compositions of matter that are Selectable Compounds. The party shall include
in such notices to the other party the [*] and any other information relevant to
the synthesizing or using of such Compounds in the Field. Upon request, each
party also shall supply to the other a reasonable quantity (sufficient for
analytical and biochemical characterization as determined by the JRC) of any
Compound synthesized by such party during the Selection Period.
2.3 Records of Research Expenditures. Geron will maintain
complete and accurate records of its expenditures for its Research, and provide
quarterly reports of such expenditures. Such records shall be open during
reasonable business hours for a period of [*] years from their creation
for examination at P&U's expense, such examination to take place on [*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 15
[*] notice and not more often than [*] by a certified public accountant selected
by P&U and reasonably acceptable to Geron. Such accountant shall review the
records for the sole purpose of verifying the accuracy of expenditures reported
by Geron under this Agreement and to assure that such funds were expended for
the Research, and such information shall be considered confidential under the
terms of this Agreement. Such expenditures shall be accounted for in accordance
with generally acceptable accounting principles, consistently applied.
Qualifying expenditures shall be only an amount equal to [*] (adjusted annually
by the JRC), and [*] of sponsored research payments for work done by Third
Parties which is made available to the Research and performed in accordance with
the Research Plan. An "FTE" shall mean a full-time equivalent (as determined by
the employment policies of the party) scientist performing scientific work on or
directly related to the Research, and such amount shall include all direct
salaries, benefits and related taxes and other labor costs, all direct costs for
materials, supplies, travel, and subcontracted services, and all occupancy and
other indirect costs allocable to the Research.
2.4 Formation of Joint Research Committee. The Research will be
directed by a Joint Research Committee ("JRC") comprised of six (6) individuals
with half being appointed and replaced by Geron and the other half being
appointed and replaced by P&U. The initial appointees to the JRC are listed in
EXHIBIT 2.4; each party shall promptly notify the other party in writing of
replacements or appointments to the JRC. All decisions of the JRC shall
require a majority vote of all the members of the JRC. Matters resulting in
tie-votes shall be referred to the Chief Executive Officer of Geron and the
Managing Director of P&U for resolution;
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 16
provided however, that in no event shall any failure to resolve any tie-vote
cause termination of this Agreement or termination of P&U's obligation to make
any of the research payments in accordance with Article 8 hereof. The JRC will
meet in person at least twice a year to discuss the progress of the Research.
The chairperson of the JRC shall be selected from among the members of the JRC
alternatively by Geron and P&U to one year terms, commencing on the Effective
Date, with Geron selecting first. The JRC shall terminate and cease to exist
upon the first anniversary of the expiration of the Research Term.
2.5 Responsibilities of JRC. The purpose of the JRC is to oversee
and direct the Research. In addition to the JRC, each party shall appoint
employees to a project team to carry out the day-to-day activities involved in
identifying compounds active as telomerase inhibitors and suitable for clinical
development and to expedite the progress of compounds through the completion of
preclinical activities, all as described in the Research Plan. The JRC shall
further have the responsibility for modifying the Research Plan as necessary
over time to ensure the greatest likelihood of success in achieving the
objective of the Research Plan. Any modifications of the Research Plan shall
be memorialized in writing, formally reviewed by the JRC, and if approved by a
majority vote of the JRC, then incorporated herein by reference. The JRC shall
evaluate and discuss the results of and information related to the Research to
ensure that the Research Plan specifies appropriate scientific direction and
research goals, allocates research responsibilities correctly, and establishes
relevant time lines, and that there is appropriate scientific management of the
collaboration. The JRC shall summarize the progress of the
<PAGE> 17
Research in a written report distributed to each party at least once each
calendar year. The JRC shall establish procedures and guidelines to govern the
operation of the project team.
<PAGE> 18
2.6 Selection of Candidate Drugs for Development.
(a) During the Selection Period. [*]
(b) After the Selection Period. [*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 19
[*]
2.7 Extension of Research Term and Selection Period. P&U shall
have, in its sole discretion, the right to extend the Research Term and
Selection Period for an additional one (1) year period upon providing written
notice to Geron of such election at least one hundred eighty (180) days prior to
the expiration of the Research Term. In the event P&U makes such election, P&U
shall pay Geron an additional [*] divided into [*] equal quarterly installments
beginning on the third anniversary of the original Research Term as a
non-refundable payment for research to be conducted by Geron during the one year
extension period. Any such extension of the Research Term (and the activities
to be conducted during such extended period) shall be governed by the terms and
conditions of this Agreement.
2.8 Extension by Mutual Consent. Although the parties contemplate
that the objective of the Research, if achievable, is likely to be achieved
within three (3) years (or four (4) years if P&U elects to extend the Research
Term in accordance with Section 2.7 above) after the Effective Date, they
recognize that it may be desirable to extend the Research to complete work
described in the Research Plan that was near completion at the end of the
Research Term or to
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 20
commence a new Research Plan. The parties agree to discuss and negotiate in
good faith any request by either party to extend the Research Term and the
terms and conditions under which such extension could occur.
2.9 Sharing of Information. Geron and P&U will exchange verbal or
written reports presenting a meaningful summary of their activities, including
research and development activities under this Agreement, on a monthly basis so
as to keep the other party reasonably informed in a timely manner of its
activities in the Field. Each party will make regular presentations to the
other of its activities under this Agreement, and additionally on an informal
basis, inform the other party of the work done under this Agreement. Each
party will provide the other with data or other information regarding any and
all work carried out in the course of the Research as reasonably requested by
the other party. This Section 2.9 applies to (i) Information generated by the
Research during the Research Term, (ii) Information relative to Candidate Drugs
under development as provided herein, and (iii) Information relative to
Products for which a royalty is due to Geron hereunder. Each party will make
available and disclose to the other party promptly after the Effective Date all
Knowhow of such party as of the Effective Date, to the extent necessary or
useful for the other party's conduct of the Research hereunder. Each party
will also disclose any additional Knowhow learned, acquired or discovered by
such party at any time before the end of the Research Term, promptly after such
Knowhow is learned. For such period of time as a Candidate Drug is being
diligently developed hereunder or a Product is being commercialized with
royalties due to Geron hereunder, Geron shall make available to P&U, in a
timely fashion, all applicable Geron Technology which is necessary or useful
for the
<PAGE> 21
evaluation, development, registration and commercialization of such Candidate
Drugs or Products. Further, for such period of time as a Candidate Drug is
being diligently developed hereunder or a Product is being commercialized with
royalties due to Geron hereunder, Geron will provide reasonable technical
assistance to P&U, as may be reasonably necessary for successful development
and commercialization of such Candidate Drugs or Products; provided however,
that following the Research Term, P&U shall reimburse Geron for such technical
assistance (calculated in accordance with Geron's then prevailing FTE rate) and
all reasonable out-of-pocket expenses, including food, travel and lodging
incurred in connection with such technical assistance. All discoveries or
inventions made during the Research Term by either P&U or Geron useful in or
relating to the Research or the Field, including without limitation,
information regarding initial discoveries of telomerase inhibitors and their
activities, derivatives, and results of in vitro and in vivo studies, assay
techniques and new assays will be disclosed to the other, with meaningful
discoveries or advances being communicated promptly after such information is
obtained or its significance is appreciated. Each party will make available to
the other raw data from work carried out in the course of the Research. During
the Research Term, with advance notice, Geron and P&U shall permit
representatives of the other to visit its premises and view Research work in
progress. During the Selection Period, Geron and P&U shall also permit the
other party to review any data or documentation (and make copies) arising out
of the Research and the other party's Technology.
<PAGE> 22
ARTICLE 3
DEVELOPMENT
3.1 Development in the Territory. P&U shall have the right to
manage and control the development of Candidate Drugs selected in accordance
with Section 2.6 in the Territory at its own expense. Promptly after selection
of each Candidate Drug, P&U shall prepare a written Development Plan for the
further preclinical and clinical development of such Candidate Drug, which Plan
shall be amended periodically as necessary. P&U shall provide a copy of such
Development Plan, and any amendments thereto, to Geron for review and comment.
P&U shall provide Geron with notice of all meetings of the P&U project
committee responsible for the development of the Candidate Drug, as well as
written materials sufficient to inform Geron of the progress of the clinical
development, and Geron shall be permitted to attend all such meetings. P&U
shall use reasonable diligent efforts, consistent with good pharmaceutical
industry practices, to develop Candidate Drugs selected by P&U for sale as
Products in the Territory in accordance with the Development Plan. Commencing
upon the [*] covering a Candidate Drug, P&U shall prepare and maintain complete
and accurate information regarding the world-wide clinical development of
Products and shall make such information available to Geron in the form of
written detailed reports to Geron at least twice per year. Such reports shall
summarize the status and results of all such development efforts. P&U also will
respond to reasonable requests by Geron for additional information regarding the
development of Candidate Drug. Notwithstanding Geron's right to review such
information and
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 23
provide such comments, P&U retains the right, subject to diligence requirements
contained in this Agreement, to develop Candidate Drugs in its sole discretion.
3.2 Termination of Development. P&U shall have the right at any
time to terminate the development of a Candidate Drug upon notice to Geron.
Upon such termination and subject to Section 4.4 herein, all rights to any such
Candidate Drug which is a Geron Compound or a KH Compound shall revert to Geron.
In the event such termination is attributable to safety or efficacy reasons with
such Candidate Drug, P&U shall have one hundred eighty (180) days from the date
of the termination notice (the "Replacement Period") in which to select a
replacement Candidate Drug in accordance with Section 2.6(b). Geron shall not,
directly or indirectly, [*] (or any such Compounds reverting to Geron pursuant
to Section 5.3) for so long as P&U is actively developing a Candidate Drug in
accordance with Article 3 above or actively commercializing a Product
containing a Candidate Drug with royalties due to Geron in accordance with
Article 7 and any Replacement Period, if applicable, has not lapsed.
3.3 Funding of Development Program. P&U shall be responsible for
conducting, and for all expenses related to, preclinical development and
clinical trials for all Products containing Candidate Drugs, including, without
limitation, toxicology studies, pharmacology studies, formulation, clinical
trials, and regulatory filings. If Geron co-promotes a particular Product in
the U.S. pursuant to Article 11 below, P&U shall be entitled to the Clinical
Expense Credit
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 24
against royalties due Geron for that Product; provided however, that in no
event shall any Clinical Expense Credit or any portion thereof be applied more
than once.
ARTICLE 4
LICENSES
4.1 License to P&U. Subject to the terms and conditions of this
Agreement and the Three-Way Agreement, including, without limitation, the
royalty provisions of Article 7 of this Agreement and Geron's right to
co-promote and Kyowa Hakko's rights to co-promote and/or co-market, Geron
hereby grants to P&U an exclusive, royalty-bearing license under Geron
Technology to develop, make, have made, use, import, offer to sell, sell, and
have sold Products in the Territory with the right to grant sublicenses as
provided in this Agreement; provided, that, subject to Section 4.4 below and
the following sentence, Geron expressly reserves the right to use such Geron
Technology for all other purposes. Neither party shall, directly or indirectly,
develop or promote a Candidate Drug being developed by P&U in accordance with
Article 3 above or a Product for which P&U is under an obligation to pay
royalties to Geron in accordance with Article 7 below for use outside the Field
without the written consent of the other party, which consent shall not be
unreasonably withheld; provided however, that P&U shall not be deemed to be in
breach of this Agreement if Products sold by P&U are used outside of the Field,
provided that P&U (i) pays the applicable royalty due on such sales in
accordance with this Agreement and (ii) has not knowingly developed or promoted
such Product for sale or use outside of the Field.
<PAGE> 25
4.2 Research Licenses. Subject to the terms and conditions of this
Agreement and the Three-Way Agreement, Geron hereby grants to P&U a world-wide,
paid-up right and license under the Geron Technology solely to (a) discover
compounds and conduct the Research during the Research Term, and (b) conduct
secondary and tertiary screening and further evaluation of Selectable Compounds
during the Selection Period. Subject to the other provisions of this Agreement
and the Three-Way Agreement, P&U hereby grants to Geron during the Research
Term a world- wide, paid-up right and license under the P&U Technology solely
to conduct the Research. Subject to the terms and conditions of this Agreement
and Geron's existing licenses to Kyowa Hakko under the KH Collaboration, each
party covenants that during the Research Term it shall not grant any other
licenses to any Third Party equivalent to, or that are reasonably likely to
conflict with, the rights granted under this Section 4.2, other than limited
non-commercial material transfer agreements and confidential disclosure
agreements that are restricted to academic uses or under which Geron retains
the rights to acquire, or to negotiate the acquisition of, the inventions in
the Field that directly result from the use of such materials or confidential
information. Neither party may grant sublicenses under the rights granted by
the other party in this Section, except to Affiliates.
4.3 Sublicensing. P&U shall have the right to sublicense any and
all of its rights under Section 4.1 of this Agreement to (i) its Affiliates
without Geron's consent and (ii) any Third Party only with the prior written
consent of Geron, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, P&U may sublicense (i) its rights to sell
Products to distributors in the ordinary course of business and (ii) upon
advance written notice to
<PAGE> 26
Geron, its rights to manufacture Products to contract manufacturers for sale by
P&U or its Affiliates, and (iii) in any country where required by local law or
customary pharmaceutical industry practices, its rights to manufacture and sell
Products to Major Sublicensees.
4.4 Exclusivity. Except as otherwise provided for in this
Agreement, the KH Collaboration, or sponsored research agreements with
institutions under which P&U or Geron Control (or have the option to Control)
all material rights to inventions in the Field arising therefrom ("SRAs"), any
research or development conducted or funded by P&U or Geron in the Field during
the Research Term shall be deemed to be Research conducted pursuant to this
Agreement. During the Research Term, neither Geron (and its Affiliates) nor
P&U (and its Affiliates) shall directly or indirectly conduct, [*] except
pursuant to the terms of this Agreement, the KH Collaboration, the Three-Way
Agreement and the SRAs. After the Research Term, Geron and its Affiliates shall
not [*] nor shall Geron (or its Affiliates) have [*]. After the Research Term,
P&U (and its Affiliates) shall [*]. The foregoing restrictions shall expire
upon P&U's termination of development and commercialization of all Candidate
Drugs or Products containing Candidate Drugs and the lapse of all Replacement
Periods, if any.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 27
[*]
4.5 Existing Third Party Technology. The licenses granted herein
include sublicenses to certain technology and other rights that have been
licensed from Third Parties ("Third Party Licenses"), including sponsored
research agreements and options for patent licenses. Each party agrees that, to
benefit from any sublicense under this Agreement, each party must abide by the
terms and conditions of such Third Party Licenses. The party who entered into
the Third Party License shall be responsible to the Third Party for all
payments and other obligations attributable to this Agreement for Third Party
Licenses in existence as of the Effective Date. To the extent any expansion of
the rights granted pursuant to a Third Party License after the Signature Date
increases the royalty or other obligations of either Geron or P&U, then such
expansion shall be deemed to be an acquisition of new Third Party Technology
and shall be governed in accordance with Section 4.6. EXHIBIT 4.5 contains a
complete list of all Third Party Licenses entered into by Geron prior to the
Signature Date of this Agreement, and Geron has provided P&U or its counsel
complete and correct copies of all such agreements, as amended.
4.6 New Third Party Technology. Following the Effective Date, if
either party believes that technology related to the Field that is owned or
controlled by Third Parties would be necessary or useful for the Research or to
achieve the purpose of this Agreement, Geron and P&U will consult regarding
licensing or acquiring such technology. The determination of whether such
licenses and/or acquisitions shall be sought, the party that shall approach and
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 28
negotiate with such Third Parties, and the terms of any agreements with such
Third Parties, including, without limitation, payments for sponsored research,
shall be made by the JRC. Subject to the Three-Way Agreement, the cost of
obtaining any licenses so approved by the JRC and the payment of any fees or
royalty obligations thereunder shall be borne by [*]. If the JRC does not
approve the license or acquisition of such technology, either party shall be
permitted to acquire or obtain a license to any such Third Party technology at
its own cost and without the other party's permission. Both parties shall be
obligated to inform the other of such licensing or acquisition opportunities.
Neither party shall be obligated to grant any sublicense to such Third Party
technology to the other party after the Effective Date unless the other party
agrees to pay an agreed upon portion of such costs and royalties. Exhibit 1.6
illustrates the parties' intent concerning the meaning of certain provisions of
Sections 4.5 and 4.6.
4.7 Limitations. To the extent permitted by law, P&U shall not
sell Products to any Third Party that P&U believes will resell or use the
Products in violation of this Agreement or the Three-Way Agreement. In the
event such violations occur, P&U shall use reasonable diligent efforts to
correct such violations and to prevent any future violations by such Third
Parties.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 29
ARTICLE 5
COMMERCIALIZATION
5.1 Commercialization in the Territory. P&U shall use reasonable
diligent efforts to market and sell Products successfully in the Territory,
including but not limited to, the United States and each Major Country. After
the first sale of a Product and prior to the end of each calendar year, P&U
shall develop and maintain a plan for the commercialization of each Product in
the Territory for the following calendar year ("Sales Plan"). P&U shall
promptly deliver to Geron a copy of each such Sales Plan. Each Sales Plan
shall include a comprehensive marketing and sales strategy for the applicable
Product in the Territory, including projected market share for the Product and
projected marketing resource commitment to the Sales Plan. P&U shall report
its progress as measured against each Sales Plan to Geron at least [*] in
summary written form and at least [*] in a detailed written report.
5.2 Advertising and Trademarks. Unless otherwise agreed in
writing, P&U shall have the sole authority to name Products containing P&U
Compounds throughout the Territory. To the extent lawfully permitted, each
Product label shall identify Geron as a licensor of each Product and, for
Products that Geron co-promotes, shall carry Geron's logo under license from
Geron. All Products sold by P&U (except for Products containing KH Compounds
co-marketed with KH in Japan) and all Products containing P&U Compounds sold by
P&U or KH in a given country shall be identified and advertised using such
trademarks as P&U shall select, own, or
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 30
otherwise acquire. The trademarks for Products containing KH Compounds
co-marketed with KH in Japan shall be determined as provided in Three-Way
Agreement.
5.3 Termination of Commercialization. P&U shall have the right at
any time to terminate the commercialization of a Product containing a Candidate
Drug upon notice to Geron. Upon such termination and subject to Section 4.4
herein, all rights to any such Candidate Drug which is a Geron Compound or a KH
Compound shall revert to Geron. In the event such termination is attributable to
safety or efficacy reasons with such Product, P&U may select a replacement
Candidate Drug during the Replacement Period (as defined in Section 3.2) in
accordance with Section 2.6(b).
ARTICLE 6
MANUFACTURING
Except as set forth in the Three-Way Agreement, P&U shall use
reasonable diligent efforts to manufacture Products for commercial sale by P&U
in the Territory in a cost-effective manner, and P&U shall use reasonable
diligent efforts to ensure an adequate supply of Product for commercial sale in
the Territory, including adequate contingency plans in the event of loss of
primary manufacturing facilities.
<PAGE> 31
ARTICLE 7
ROYALTIES
7.1 Royalties. In consideration of the license granted to P&U
under Section 4.1, P&U shall pay to Geron a royalty on P&U Sales of Products in
the Territory calculated each calendar year as follows on a Product-by-Product
basis:
(a) [*] of P&U Sales at or below U.S. [*]
(b) [*] of P&U Sales over U.S. [*] and at or below U.S.
[*]
(c) [*] of P&U Sales over U.S. [*] and at or below U.S.
[*]; and
(d) [*] of P&U Sales over U.S. [*]
For purposes of this Article 7, a Product shall include any
Product that is comprised of the same Compound or an [*]. Royalties shall be
payable by P&U on all sales of Product co-promoted by Geron in the United
States and by KH in the UK and Germany. Royalties shall not be payable by P&U
on sales of Products to KH for its resale in Japan and the Asian Territory
under co- marketing or other arrangements where such resales by KH are not
booked as P&U sales. KH's sales of such Products shall be subject to
royalties under the KH Collaboration.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 32
7.2 Term of Royalty Payments. Royalty payments shall continue to
accrue and be payable with respect to P&U Sales of Products and will
automatically expire on a country-by-country and Product-by-Product basis upon
the earlier to occur of (a) or (b), where:
(a) is the later to occur of:
(i) for a Product for which the Product itself,
the method of manufacture of the Product in the manner practiced by or
authorized by P&U, the use of the Product in the manner promoted by P&U, or the
sale of the Product is not claimed in one or more P&U Patents or Geron Patents
during the term of this Agreement, ten (10) years from first commercial sale of
such Product in such country;
(ii) for a Product for which the Product itself,
the method of manufacture of the Product in the manner practiced by or
authorized by P&U, the use of the Product in the manner promoted by P&U, or the
sale of the Product is claimed in one or more P&U Patents or Geron Patents
during the term of this Agreement, upon the expiration (or revocation) of the
last to expire (or be revoked) of such P&U Patents or Geron Patents in such
country, provided that, for purposes of this subparagraph (ii), P&U Patents
claiming formulations of a Product which are applicable to multiple substances
and, when the patent applications therefor were filed, did not cover compounds
known to be telomerase inhibitors shall not be taken into account in
determining such term of royalty payment; and notwithstanding Section 7.1,
Products comprised of such formulations shall be deemed to be a separate
Product for the purpose of this Section 7.2; and
<PAGE> 33
(b) is the continuing competition by sale of a
pharmaceutical product that comprises a compound substantially identical to the
Compound contained in such Product by a Third Party having a material adverse
impact on P&U sales in that country, provided that no such material adverse
impact shall be deemed to exist if the manufacture, use, or sale of the
competitive Product infringes a valid and enforceable claim of an unexpired
Geron Patent or P&U Patent in the country and either Geron or P&U is diligently
taking steps to enforce such Patent or both parties have agreed not to enforce
such Patent.
7.3 Paid Up License. Upon expiration of each royalty obligation
on a country-by-country and Product-by-Product basis as provided in Section
7.2, (i) each party shall have a non-exclusive, fully paid-up license under the
other party's Knowhow to make, have made, use, import, offer to sell, sell, and
have sold such Product in such country with the right to grant sublicenses as
provided in this Agreement, and (ii) the parties agree to discuss in good faith
a fair and equitable arrangement for the parties to market generic products.
Notwithstanding the foregoing, Geron and its Affiliates shall not be permitted
to use, nor shall P&U be required to disclose, any Confidential Information of
P&U related to the clinical development, manufacture or marketing of any such
Product upon the expiration of the royalty obligation with respect to such
Product.
<PAGE> 34
7.4 Reduction of Royalties.
(a) [*] the royalties payable under Section 7.1 above shall
be reduced for a given quarter in the event that such Product has a combined
COGS and royalty payment (without taking into account any credits), expressed as
a percentage of P&U Sales, that exceeds [*] of the P&U Sales of such Product for
such quarter, as follows:
<TABLE>
<CAPTION>
COGS + Royalty Royalty Rate Reduction
-------------- ----------------------
<S> <C>
[*] [*]
[*] [*]
[*] [*]
</TABLE>
provided, however, that in no event shall the royalty due Geron be reduced by
the terms of this Section 7.4 to below [*]. Any such royalty reduction for any
calendar quarter shall be effective only to the extent P&U delivers to Geron a
written notice that specifies in reasonable detail P&U's calculation of COGS,
including, without limitation, a breakdown of the major line items making up the
COGS (the "Royalty Reduction Notice"). The Royalty Reduction Notice shall be
sent to Geron along with the written account specified in Section 7.6 herein.
For each quarter in which the Royalty Reduction Notice is delivered to Geron,
Geron shall be entitled to have an independent accounting firm selected by Geron
and reasonably acceptable to P&U inspect P&U's accounting records for the
purpose of commenting on P&U's accounting practices
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 35
for the determination of COGS. P&U shall allow the firm to review the COGS
specified in Royalty Reduction Notice against P&U's accounting records and shall
reasonably cooperate with such review. All information received from P&U in
connection with the inspection and review shall be considered Confidential
Information under the terms of this Agreement. In the event the independent
accounting firm determines that the COGS reported in the Royalty Reduction
Notice does not reflect the COGS reported in P&U's accounting records, Geron
shall promptly notify P&U [*]. In the event the parties are unable to agree on
a COGS determination, then the matter shall be submitted to arbitration in
accordance with Section 19.10. In the event that it is ultimately determined
that P&U overstated COGS in the Royalty Reduction Notice, P&U shall pay to Geron
an amount equal to the royalty amounts not paid to Geron as a result of the
Royalty Reduction Notice, [*] of such underpayments and the costs related to
such audit. Such rights of inspection and review shall be subject to the notice
and records retention limitations set forth in Section 7.10.
(b) In the event royalties are reduced pursuant to Section
7.4(a) for [*] Geron shall have the right to engage an independent consultant
reasonably acceptable to P&U to review P&U's manufacturing processes and other
elements of COGS. The independent consultant shall have reasonable access to
all aspects of P&U's manufacturing process and other aspects of P&U's operations
that are relevant to COGS, including the ability to inspect the manufacturing
facilities, to review manufacturing documentation and to meet and interview
manufacturing personnel. P&U shall provide reasonable assistance to the
independent consultant
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 36
and all information received in connection with the review shall be considered
Confidential Information under the terms of this Agreement. Upon completion of
the review, the independent consultant shall provide a written report to both
parties that (i) assesses P&U's manufacturing processes and other elements of
COGS against prevailing industry comparative measures and (ii) provides
recommendations for reducing COGS. The parties agree to meet and discuss the
report and to consider in good faith all recommendations for reducing COGS
contained therein. The inspection and review rights of Geron set forth in this
Section 7.4 shall apply to P&U and any contract manufacturer engaged by P&U,
and P&U will use reasonable diligent efforts to secure such rights for Geron in
the event KH manufactures Products for P&U pursuant to the Three-Way Agreement.
7.5 Royalty on Combination Products. In the event a Product is
sold in a combination product with one or more other therapeutically active
ingredients, P&U Sales shall be calculated by multiplying the P&U Sales of that
combination product by the fraction A/C, where A is the gross selling price of
the Product sold separately and C is the gross selling price of the combination
product. The gross selling price of the Product and any other therapeutically
active ingredients contained in the combination product shall be for a quantity
comparable to that contained in the combination product and of the same class,
purity and potency. When no gross selling price is available for such Product,
P&U shall calculate a hypothetical gross selling price for such Product,
allocating the same proportion of costs, overhead and profits as are then
allocated to similar substances made by P&U and having an ascertainable current
gross selling
<PAGE> 37
price. P&U shall include in each royalty report a full description of the
method by which any calculation pursuant to this Section 7.5 is made.
7.6 Reporting and Payment of Royalties. P&U shall deliver to
Geron within [*] after the end of each calendar quarter a written account,
including quantities, of P&U Sales by P&U and its Affiliates' and Major
Sublicensees and the amount of the royalty payment due to Geron for such
quarter. In each country where P&U is unable to remove the local currency
received from P&U Sales, royalties accrued in that country shall be paid to
Geron in the country in local currency by deposit in a local bank designated by
Geron. For the purpose of computing P&U Sales for Products sold in a currency
other than United States Dollars, such currency shall be converted into United
States Dollars in accordance with P&U's customary and usual translation
procedures. P&U shall only withhold taxes on such royalties as required by law
but shall use reasonable diligent efforts to reduce such withholdings to the
greatest extent possible and to remit promptly to Geron any refunds or rebates
of taxes paid by P&U on behalf of Geron.
7.7 Sales to Affiliates and Sublicensees. Sales of a Product
between P&U, its Affiliates and its Major Sublicensees, or among such
Affiliates and such Major Sublicensees, shall not be subject to royalty, which
shall instead be applied on P&U Sales as defined in Section 1.35.
7.8 Samples to Third Parties. No royalties shall accrue on the
disposition of reasonable quantities of Products for no charge by P&U as
promotional samples to Third Parties; provided however, that beginning [*] of a
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 38
Product in the United States or a Major Country, such quantities shall not
exceed [*] of the total number of units of that Product dispensed, whether by
sale or otherwise, [*] unless otherwise consented to by Geron.
7.9 Minimum Royalty Payments Royalty credits available to P&U in
accordance with this Agreement or any other legally binding agreement between
the parties shall not reduce the royalty amounts otherwise then due to Geron by
more than [*]. Unused credits may be carried over into subsequent royalty
periods.
7.10 Records of P&U Sales, Clinical Trials Expenses, and Costs of
Goods Sold. P&U will maintain complete and accurate records of clinical trial
expenses, P&U Sales, COGS, and other such factors as are relevant to the royalty
and other payments to be made by P&U under this Agreement. Such records shall
be open during reasonable business hours for a period of [*] from their creation
for examination at Geron's expense, such examination to take place on thirty
(30) days written notice but not more often than [*] by a certified public
accountant selected by Geron and reasonably acceptable to P&U. Such accountant
shall review the records for the sole purpose of verifying the accuracy of the
payments made by P&U under this Agreement, and such information shall be
considered Confidential Information under the terms of this Agreement. In the
event the examination shows an underpayment for any calendar quarter examined,
P&U shall pay Geron the amounts underpaid. In the event such underpayment is in
excess of [*] due to an error on the part of P&U, P&U shall
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 39
pay, in addition to the amount of the underpayment, [*] of such underpayment and
the cost of such examination.
7.11 Royalty Credits. P&U may credit the following against the
royalties payable to Geron under Section 7.1:
(a) Clinical Expense Credit as provided in Section 3.3;
(b) [*] of all milestone payments made by P&U under
Article 9; and
(c) the creditable amounts referred to in Section 14.7.
ARTICLE 8
RESEARCH PAYMENTS
8.1 Research Payments. In consideration of the Research to be
performed by Geron pursuant to this Agreement, P&U shall pay to Geron the
following non-refundable amounts as payment for the expenses related to such
Research on the dates such payments are due:
(a) U.S. $1.25 million in cash due within ten (10)
business days after the Effective Date of this Agreement for research expenses
to be incurred from the Effective Date of this Agreement until June 30, 1997;
and
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 40
(b) U.S. $1.25 million in cash due quarterly on July 1,
October 1, January 1 and April 1 thereafter during the Research Term for
research expenses to be incurred for the calendar quarter following such date.
8.2 Excess Research Payments. If Geron does not expend the
aggregate amount provided by P&U to Geron pursuant to Section 8.1 for Research
during the Research Term, the parties shall agree upon possible extensions of
the Research and possible additional research programs to utilize fully, on
P&U's behalf, such amounts.
8.3 Withholding Obligations. The amounts specified in Section 8.1
shall be net of any amounts to be withheld by P&U in accordance with the
applicable withholding provisions of the tax laws of Italy, the U.S., or any
other country. Geron shall be entitled to receive in cash the exact amount
specified under each subsection of Section 8.1 notwithstanding the effect of
any and all withholding or other payments made by P&U as a result of such
provisions.
ARTICLE 9
MILESTONES
9.1 Milestone Payments. In consideration of the rights granted
under this Agreement, each of the following non-refundable payments will be
made by P&U upon the first achievement of the following milestones:
(a) U.S. [*] in cash due upon the first selection of a
Candidate Drug by P&U in accordance with Section 2.6;
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 41
(b) U.S. [*] in cash due upon the first filing of an NDA
for a Candidate Drug selected by P&U in accordance with Section 2.6; and
(c) U.S. [*] in cash due upon the first approval of an
NDA for a Candidate Drug selected by P&U in accordance with Section 2.6.
9.2 Milestone Payments for Additional Candidate Drugs and
Products. In consideration of the rights granted under this Agreement, and
only in the event the Research results in the creation of Candidate Drugs in
addition to those for which a corresponding milestone payment under Section 9.1
has been made, each of the following non-refundable payments will be made by
P&U upon the first achievement of the following milestones:
(a) U.S. [*] in cash due upon the second filing of an
IND for a Candidate Drug selected by P&U in accordance with Section 2.6;
(b) U.S. [*] in cash due upon the earlier of (i) the
enrollment of the first patient in the earlier of either a Phase IIB or
Phase III trial initiated to demonstrate efficacy to obtain regulatory approval
for a specific indication or (ii) the second filing of an NDA for a Candidate
Drug selected by P&U in accordance with Section 2.6; and
(c) U.S. [*] in cash due upon the second approval of an
NDA for a Candidate Drug selected by P&U in accordance with Section 2.6.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 42
No milestone payment under this Section 9.2 shall be payable in respect of a
Candidate Drug comprised of the same Candidate Drug or an [*] thereof for
which a corresponding milestone payment was previously paid pursuant to
Section 9.1.
9.3 Milestone Payments Generally. All such payments shall be made
by wire transfer to the bank account designated by Geron within 15 days after
achievement of the applicable milestone event. [*]
9.4 Withholding Obligations. The amounts specified in Sections
9.1 and 9.2 shall be net of any amounts to be withheld by P&U in accordance
with the applicable withholding provisions of the tax laws of Italy, the U.S.,
or any other country. Geron shall be entitled to receive in cash the exact
amount specified under each subsection of Sections 9.1 and 9.2 notwithstanding
the effect of any and all withholding or other payments made by P&U as a result
of such provisions.
9.5 Credit Against Royalties. [*] of all milestone payments made
by P&U under this Article 9 shall be credited against future royalties payable
to Geron pursuant to Section 7.1.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 43
ARTICLE 10
SALE OF EQUITY
P&U agrees to purchase and Geron agrees to sell an aggregate of U.S.
8,000,000 of Geron's Common Stock in a series of two separate equity
investments on the terms and conditions set forth in the Common Stock Purchase
Agreement attached hereto as EXHIBIT 10.
ARTICLE 11
GERON CO-PROMOTION
11.1 Co-Promotion. Geron shall have the right to co-promote with
P&U certain of the Products in the United States on a [*] basis. Subject to
the terms of Section 11.3 below, Geron shall elect such rights on a
Product-by-Product basis by notice to P&U no later than sixty (60) days after
P&U notifies Geron of the commencement of [*]
11.2 Co-Promotion Agreement. If Geron so elects to co-promote any
Product, Geron and P&U (or P&U's U.S. Affiliate) shall promptly enter into a
separate agreement containing the essential terms set forth in EXHIBIT 11 and
such modifications or other terms as the parties may mutually agree are
appropriate for the co-promotion of a particular Product. While some
additional terms may be included to implement a co-promotion arrangement for a
particular Product and to reflect the then existing market conditions, Exhibit
11 contains all of the essential terms of such a co-promotion agreement. In
the event the parties do not enter into a separate
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 44
agreement prior to the first commercial sale of such Product, then Geron and
P&U shall co-promote such Product on the essential terms set forth in
Exhibit 11.
11.3 Applicable Products. Geron's co-promotion rights shall be
limited as follows:
(a) Geron shall have the right to co-promote the first
Product containing a P&U Compound for a period of [*] after its first
commercial sale in the United States; Geron shall not have the right to
co-promote any subsequent Product containing a P&U Compound, provided, however,
that in the event the first Product containing a P&U Compound is not sold by
P&U in the United States for a period of at least [*], Geron shall have the
right to co-promote any other Product containing a P&U Compound, if any, for
the balance of such [*] term.
(b) Geron shall have the right to co-promote in the
United States all Products containing Geron and KH Compounds for the period of
time [*] in accordance with the terms of this Agreement; provided, however,
Geron's right to co-promote shall not terminate in the event [*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 45
ARTICLE 12
THREE-WAY AGREEMENT AND KYOWA HAKKO
12.1 Three-Way Agreement. Geron and P&U agree and acknowledge that
certain of the rights and obligations set forth in this Agreement are subject
to the terms and conditions of the Three-Way Agreement. Geron and P&U further
agree and acknowledge that in the event of a conflict between the terms and
conditions of this Agreement and the terms and conditions of the Three-Way
Agreement, the terms and conditions of the Three-Way Agreement shall prevail.
12.2 Termination of the KH Collaboration. In the event the KH
Collaboration terminates or expires during the term of this Agreement (other
than as a result of a breach by Geron) (a) P&U shall have the right to assume
all of KH's rights in Japan and the Asian Territory under the KH Collaboration
and the Three-Way Agreement with respect to all products that are then subject
to the KH Collaboration or the Three-Way Agreement; and (b) Geron shall have the
right to co-promote with P&U all such products in Japan on a 50/50 basis, by
providing the other party with written notice within one hundred eighty (180)
days following the termination or expiration of the KH Collaboration. If P&U
elects to assume KH's rights described in clause (a) in the foregoing sentence,
the product shall be thereafter deemed a Product for all purposes of this
Agreement, including without limitation the royalty obligations of Article 7
contained herein, and, in addition, P&U shall be obligated to (i) make any
unpaid milestone payments specified in the KH Collaboration with respect to such
product and (ii) assume KH's obligations to develop such products in Japan and
the Asian Territory. If Geron so
<PAGE> 46
elects to co-promote any such product, Geron and P&U shall promptly enter into
a separate agreement containing such terms as the parties may mutually agree
are appropriate for the co-promotion of a particular product. In the event the
parties do not enter into a separate agreement prior to the first commercial
sale of such product in Japan, the matter shall be submitted for resolution in
accordance with Section 19.10. Geron shall not assign or sublicense its right
to co-promote in Japan, except in connection with a marketing collaboration
with a Japanese partner reasonably acceptable to P&U; provided, however, that
in the case of a product containing a P&U Compound, the parties shall discuss
the nature and scope of any such marketing collaboration. Upon expiration or
termination of the KH Collaboration, Geron shall not have any rights to
co-promote with P&U any Products in either the United Kingdom or Germany.
ARTICLE 13
CONFIDENTIALITY
13.1 Confidentiality; Exceptions. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the parties agree
that, for the term of this Agreement and for [*] thereafter, the receiving party
shall keep confidential and shall not publish or otherwise disclose or use for
any purpose other than as provided for in this Agreement any Information and
other information and materials furnished to it by the other party pursuant to
this Agreement (collectively, "Confidential Information"), except to the extent
that it can be established by the receiving party that such Confidential
Information:
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 47
(a) was already known, other than under an obligation of
confidentiality, to the receiving party at the time of disclosure by the other
party;
(b) was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise
part of the public domain after its disclosure and other than through any act
or omission of the receiving party in breach of this Agreement;
(d) was disclosed to the receiving party, other than
under an obligation of confidentiality, by a Third Party who had no obligation
to the disclosing party not to disclose such information to others; or
(e) was independently developed by the receiving party
without the use of the other party's Confidential Information.
13.2 Authorized Disclosure. Each party may disclose the other's
Confidential Information to the extent such disclosure is reasonably necessary
in filing or prosecuting patent applications, prosecuting or defending
litigation against Third Parties, complying with applicable governmental
regulations or conducting preclinical or clinical trials or otherwise in the
development and commercialization of Products hereunder, provided that if a
party makes any such disclosure of the other party's Confidential Information
it will give reasonable advance notice to the other party of such disclosure
requirement and, except to the extent inappropriate or
<PAGE> 48
impractical, will use its reasonable best efforts to secure confidential
treatment of such Confidential Information required to be disclosed. With the
prior consent of the other party, such consent not to be unreasonably withheld,
each party may also disclose Confidential Information to Third Parties who have
agreed to collaborate on the research, development, marketing and sale of
compounds or products; provided, that such Third Party agrees in writing to
restrictions substantially similar to the restrictions set forth in
Section 13.1.
ARTICLE 14
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
14.1 Patents Resulting from the Research Plan. During the Research
Term, Geron shall promptly inform P&U of all inventions in the Field that are
conceived or reduced to practice by service providers of Geron, solely or
jointly with service providers of P&U. During the Research Term, P&U shall
promptly inform Geron of all inventions in the Field that are conceived or
reduced to practice by service providers of P&U, solely or jointly with service
providers of Geron. For the purpose of this Article 14, "service providers"
shall mean employees of the applicable party, and consultants or other persons
or entities which are lawfully required to assign inventions to the applicable
party. Inventions conceived or reduced to practice during the course of
performing the Research shall be owned as follows:
(a) Such inventions shall be owned by P&U if conceived
and reduced to practice solely by service providers of P&U. All Patents
covering such inventions shall be P&U Patents. In the United States only, if a
continuation-in-part application is filed on a P&U Patent
<PAGE> 49
by Geron for an invention described in subsection (c) below, Geron hereby
assigns its entire right, title and interest in any such continuation-in-part
application to P&U and P&U hereby grants to Geron, subject to the licenses
granted P&U hereunder, a perpetual, worldwide, non-exclusive, transferable,
royalty free, fully paid-up license to use such Patents for any purpose outside
the Field. Such license shall continue notwithstanding termination or
expiration of this Agreement.
(b) Such inventions shall be owned by Geron if conceived
and reduced to practice solely by service providers of Geron. All Patents
covering such inventions shall be Geron Patents. In the United States only, if
a continuation-in-part application is filed on a Geron Patent by P&U for an
invention described in subsection (c) below, P&U hereby assigns its entire
right, title and interest in any such continuation-in-part application to Geron
and Geron hereby grants to P&U, subject to the licenses granted Geron
hereunder, a perpetual, worldwide, non-exclusive, transferable, royalty free,
fully paid-up license to use such Patents for any purpose outside the Field.
Such license shall continue notwithstanding termination or expiration of this
Agreement.
(c) Such inventions shall be owned jointly by P&U and
Geron if conceived and reduced to practice jointly by or on behalf of service
providers of P&U and Geron. Such persons shall agree to assign such inventions
to P&U and Geron, as applicable. Patents claiming such jointly invented
inventions shall be Joint Patents. Subject to the licenses granted under this
<PAGE> 50
Agreement, each party shall have the right to use Joint Patents without
accounting to the other party.
14.2 Patent Strategy. Subject to the provisions of this Article
14, the parties will cooperate in the development and execution of a patent
strategy that maximizes patent protection of Products throughout the Territory
and minimizes patent expenses. With respect to Joint Patents in particular,
Geron and P&U shall decide by mutual written agreement on a case-by-case basis
the party with primary responsibility for Joint Patent filings, prosecution,
and maintenance. Each party shall assure that each of its employees,
consultants and other contractors who perform the Research shall be lawfully
obligated to assign or license all inventions conceived or reduced to practice
during the course of performing such work to such party.
14.3 P&U Responsibility for Patent Filings. P&U will diligently
file, prosecute and maintain P&U Patents and, to the extent having primary
responsibility therefor, Joint Patents to claim commercially relevant
discoveries and inventions in the Field throughout the world. P&U will
endeavor to ensure whenever possible that claims are filed and are issued in
such Patents in the Field and that all such Patents are filed and prosecuted to
ensure the validity of such Patents. P&U will endeavor to give Geron prompt
notice of any decision to prepare a Patent relating to the Field. P&U will also
endeavor to provide Geron with draft copies of all such Patents and related
Patent prosecution documents, and Geron shall have, to the extent reasonably
possible under the circumstances, an opportunity to comment. P&U will confer
with Geron, and make reasonable effort to adopt Geron's suggestions regarding
the prosecution of such Patents.
<PAGE> 51
Notwithstanding the foregoing, P&U shall have the right to take such actions as
are reasonably necessary to preserve its rights under P&U Patents throughout
the world. After filing a Patent or Patent prosecution document in the Field,
P&U will provide Geron a copy of any such filing. In addition, P&U will
provide Geron with a copy of any official action and P&U submissions in such
Patents, including an English translation thereof, if available.
14.4 Geron Responsibility for Patent Filings. Geron will
diligently file, prosecute and maintain Geron Patents and, to the extent having
primary responsibility therefor, Joint Patents to claim commercially relevant
discoveries and inventions in the Field throughout the world. Geron will
endeavor to ensure whenever possible that claims are filed and are issued in
such Patents in the Field and that all such Patents are filed and prosecuted to
ensure the validity of such Patents. Geron will endeavor to give P&U prompt
notice of any decision to prepare a Patent in the Field. Geron will also
endeavor to provide P&U draft copies of all such Patents and related Patent
prosecution documents, and P&U shall have, to the extent reasonably possible
under the circumstances, an opportunity to comment. Geron will confer with
P&U, and make reasonable effort to adopt P&U's suggestions regarding the
prosecution of such Patents. Notwithstanding the foregoing, Geron shall have
the right to take such actions as are reasonably necessary to preserve its
rights under Geron Patents throughout the world. After filing a Patent or
Patent prosecution document in the Field, Geron will provide P&U a copy of any
such filing. In addition, Geron will provide P&U with a copy of any official
action and Geron's submission in such Patents, including an English translation
thereof, if available.
<PAGE> 52
14.5 Enforcement Rights. Each party shall promptly inform the
other party after it becomes aware of the possible infringement of any of the
Patents by any Third Party. Promptly after such notice, the parties agree to
meet and discuss in good faith the appropriate strategy to stop such
infringement. [*] shall have the first right to institute, prosecute, and
control any action or proceeding with respect to any Patent at its own cost and
expense. Should [*] elect not to institute, prosecute and control any such
action or proceeding within ninety (90) days following notice of any such
infringement, [*] shall have the right to institute, prosecute and control
any such action or proceeding with respect to any Patent at its own cost and
expense. Each party will timely grant any necessary authority it may legally
grant to the other party to enforce the rights under such Patent in its name in
the Field, all at the expense of the party bringing such action. The party not
controlling such action or proceeding shall have the right to participate in
such action or proceeding at its own expense and also agrees to cooperate in
such action as may be reasonably requested by the party controlling such action
or proceeding, including, without limitation, being named as a party in such
action or proceeding. Any amounts recovered as a result of such action shall
be allocated in the following order: (i) to reimburse the party initiating and
controlling the action for its reasonable out-of-pocket expenses in making such
recovery; (ii) to reimburse the other party for its reasonable out-of-pocket
expenses in making such recovery; [*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 53
14.6 Patent Costs. Patent Costs for P&U Patents shall be borne
solely by P&U. Patent Costs for Geron Patents shall be borne solely by Geron.
Patent Costs for Joint Patents shall be borne by the party with primary
responsibility for that Joint Patent, on a case-by-case basis.
14.7 Infringement of Third Party Patents. If any Third Party
asserts a claim of patent infringement against P&U or Geron on account of
either P&U's or Geron's use, manufacture, or sale of Products in the Territory,
the party receiving such notice shall promptly notify the other of the
existence and details of such claim. Promptly after such notice, the parties
agree to meet and discuss in good faith the appropriate strategy to defend
against such. The parties agree to cooperate with one another in the defense
against any such claims. [*] shall, at [*] expense, control the defense
against any claim of patent infringement brought against P&U or Geron resulting
from the manufacture, sale or use of a Product by P&U, provided however, that
(i) [*] shall have the right to participate, at [*] expense, in such
defense and (ii) [*] shall be entitled to offset against the royalties payable
to [*] under Article 7 above for such Product [*] costs and
expenses (including reasonable fees for outside counsel but excluding costs for
in-house counsel) incurred by P&U to defend such claim and all royalties and
other amounts paid or payable to dispose of such claim, but excluding any
costs, expenses and other amounts relating to an unsuccessful defense against a
claim of willful infringement or punitive damages. [*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 54
[*] If a claim is asserted against Geron or P&U
for activities conducted by Geron in accordance with the Research Plan, Geron
shall defend such action at its own expense.
14.8 Back-up Rights. Should Geron determine not to file,
prosecute, issue or maintain a Geron Patent or Joint Patent in the Field, it
will timely grant any necessary authority it may legally grant to P&U to file,
prosecute, issue or maintain such Patent in the name of Geron in the Field, all
at the expense of P&U. P&U shall exercise reasonable judgment consistent with
good pharmaceutical industry practices in determining whether to file,
prosecute, issue or maintain any Patent, whether under Section 14.3 or this
Section 14.8, and shall not willfully avoid the issuance of any patent to avoid
the payment of royalties to Geron; provided, however, that in the event Geron
believes that P&U has breached the foregoing covenant, the parties shall agree
to submit the matter for resolution in accordance with Section 19.10.
14.9 Assignment. Neither party may assign its rights under any
Joint Patent except with the prior written consent of the other party,
provided, however, that either party may assign such rights without consent to
an Affiliate or other permitted assignee of this Agreement.
14.10 Patent Term Extension
(a) Geron shall promptly notify P&U of (i) the issuance of each
Geron Patent, giving the date of issue and patent number for each such Patent,
and (ii) each notice pertaining to any
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 55
Geron Patent which it receives as a patent owner pursuant to the Drug Price
Competition and Patent Term Restoration Act of 1984 (hereinafter called the
"Act"), including but not limited to notices pursuant to Section Section 101
and 103 of the Act from persons who have filed an abbreviated NDA ("ANDA").
The parties shall cooperate in the enforcement of any Patent against any person
who has filed an ANDA in the manner provided in Section 14.7 above.
(b) Geron and P&U shall cooperate to obtain the maximum patent
term restoration under the Act. Geron and P&U shall also cooperate to obtain
supplementary protection certificates in respect to Patents issued by each
national patent office in the European Union, and the equivalent patent term
extensions in Japan and other countries. Each application for such extensions
shall be timely submitted by the party responsible under Sections 14.3 or 14.4
for filing and maintaining the applicable Patent.
ARTICLE 15
REPRESENTATIONS AND WARRANTIES
15.1 Both Parties. Each of the parties hereby represents and
warrants that: (a) it has taken all necessary corporate action to authorize the
execution and delivery of this Agreement and the Three-Way Agreement, and the
performance of its obligations thereunder; (b) this Agreement and the Three-Way
Agreement have been duly executed and delivered on behalf of such party and
constitute legal and binding obligations binding upon such party and
enforceable in accordance with their terms; (c) the execution, delivery and
performance of this Agreement and the Three-Way Agreement by such party does
not conflict with any agreement, instrument or
<PAGE> 56
understanding, oral or written, to which it is a party or by which it is bound,
nor violate any law or regulation of any court, governmental body, or
administrative or other agency having jurisdiction over it; (d) except as set
forth in the KH Collaboration with regard to Geron, it has not, and during the
term of this Agreement will not, grant any right to any Third Party relating to
its respective Technology in the Field which would abrogate or otherwise
diminish the rights granted to the other party hereunder; and (e) it shall
comply in all material respects with all laws, rules and regulations applicable
to the performance of its obligations hereunder, including, to the extent
applicable to such party, the discovery, development, manufacture,
distribution, import and export and sale of pharmaceutical products.
15.2 Additional Representation by P&U. P&U further represents and
warrants that it has obtained all necessary approvals and consents of Pharmacia
& Upjohn, Inc. to enter into this Agreement and the Three-Way Agreement.
15.3 Additional Representation of Geron. Geron further represents
and warrants that, notwithstanding anything to the contrary contained herein:
(a) it owns or Controls all existing Geron Knowhow and all current Geron
Patents, including those listed on Exhibit 1.12, free and clear of any liens,
third party claims or restrictions that are inconsistent with the grant of
rights hereunder to P&U; (b) in respect to all existing Third Party Licenses,
it has the right to grant the rights granted to P&U hereunder without any
further consents, it is not aware that is in default thereunder and will take
all actions reasonably required to comply in all material respects with all
such Licenses during the term of this Agreement; (c) it has disclosed to P&U or
its counsel all
<PAGE> 57
Patents known by it to be owned by Third Parties and to be of material
relevance in the Field; (d) it is not aware of any Patent or other intellectual
property rights of any Third Party which is reasonably likely to materially and
adversely affect either party's ability to conduct the Research or P&U's
ability to exercise and exploit any license granted to it under this Agreement;
(e) it is not aware of any facts or circumstances which are reasonably likely
to cause any of the issued Geron Patents to be invalid or any of the pending
Geron Patents not to be validly issued; and (f) except as expressly set forth
in the Third Party Licenses or otherwise on Exhibit 4.5, the license rights
granted to P&U shall not be subject to any retained rights of any state,
Federal or national government or governmental entity, including rights of the
United States Government under the Bayh-Dole Act.
ARTICLE 16
PUBLICITY AND PUBLICATIONS
16.1 Publicity Review. The parties agree that the public
announcement of the execution of this Agreement shall be in the form of a press
release to be agreed upon by the parties. In addition, Geron and P&U will
jointly discuss and agree on the scope and content of any statement to the
public regarding this Agreement or any aspect of this Agreement, subject in
each case to disclosure otherwise required by law or regulation, including,
without limitation, disclosure required by (i) order of a court, (ii) United
States or Italian securities law filings in connection with public offerings or
periodic reporting requirements, or (iii) prosecution of patent applications.
In such event, the disclosing party shall promptly notify the other party of
such
<PAGE> 58
disclosure before or as soon as practical after the disclosure. Geron and P&U
agree that all such statements to the public shall be accurate in all material
respects, consistent with requirements for confidentiality under Article 13,
designed to limit the advantage a competitor of Geron or P&U may gain from any
such statement, in compliance with the requirements of disclosure under any
applicable securities laws or associated with periodic reporting requirements,
and consistent with the standards and customs in the pharmaceutical industry
for such statements by companies comparable to Geron and P&U. The terms of
this Agreement may also be disclosed to Third Parties solely to the extent
reasonably required in the disclosing party's ordinary course of business, so
long as such disclosure is made under an obligation of confidentiality;
provided however, that in no event may the terms of this Agreement be disclosed
to potential collaborators or licensees without the prior written consent of
the other party, such consent not to be unreasonably withheld. P&U and Geron
shall have the right to review all SEC filings of the other party describing
the terms of this Agreement or the arrangements between the parties reflected
herein, prior to their submission to the SEC, including all proposed redacted
copies of this Agreement. Geron and P&U shall have no obligation to submit any
SEC filings or other documents to the other party that contain identical
information previously approved by the other party for disclosure in the same
context. Geron and P&U shall give due respect to any reasonable and timely
request by the other party with respect to such filings, including confidential
treatment of selected portions of this Agreement.
16.2 Publications. Each party agrees that it shall not publish or
present the results of the Research without the opportunity for prior review by
the other party. Each party shall
<PAGE> 59
provide to the other the opportunity to review any proposed abstracts,
manuscripts, or presentations (including information to be presented verbally)
which describe a Product or a compound that may lead to a Product and that has
not been previously disclosed to the public at least sixty (60) days prior to
the intended date of such publication, and such submitting party agrees, upon
written request from the other party, not to submit such abstract or manuscript
for publication or to make such presentation until the other party has been
provided a reasonable period of time to file patent applications on any
material in such publication or presentation which it believes is patentable or
to otherwise require the redaction of any material business, clinical or
scientific information. It is the intent of the parties not to disclose
publicly any information which may adversely affect any patent rights or either
party's reasonable commercial interests.
ARTICLE 17
TERM AND TERMINATION
17.1 Term. This Agreement shall commence as of the Effective Date
and, shall continue in effect until the later of (i) the last to expire Geron
Patent or P&U Patent, or (ii) termination of all royalty obligations under
Article 7.
17.2 Termination for Breach. If either party materially breaches
this Agreement at any time, which breach is not cured within ninety (90) days
of written notice thereof from the non-breaching party, the non-breaching party
may elect either to terminate this Agreement, in which case all rights and
obligations of each party under this Agreement shall terminate, or modify this
<PAGE> 60
Agreement on the terms and conditions set forth below. Promptly after delivery
of any such notice of material breach, the parties shall meet to discuss all
relevant facts and circumstances and attempt to agree upon a remedial plan. In
the event of such a breach by Geron during the Research Term, P&U may elect to
modify the Agreement as follows: (i) P&U's obligation to make further research
payments in accordance with Article 8 shall terminate, (ii) Geron's obligation
to conduct the Research, its right to participate in the development of
Candidate Drugs and its right to co-promote shall terminate, (iii) P&U's
licenses to Geron hereunder shall terminate, (iv) the royalties otherwise
payable to Geron on the sale of Products in accordance with Article 7 above
shall be reduced by [*] percent and [*] and (v) all other rights and obligations
of the parties shall remain in full force and effect. In the event of such a
breach by Geron after the Research Term, P&U may elect to modify the Agreement
as follows: (i) Geron's right to participate in the development of Candidate
Drugs and co-promote shall terminate, (ii) P&U's licenses to Geron hereunder
shall terminate, (iii) the royalties otherwise payable to Geron on the sale of
Products in accordance with Article 7 above shall be reduced by [*] percent and
[*] and (iv) all other rights and obligations of the parties shall remain in
full force and effect. In the event of such a breach by P&U during the Research
Term, then Geron may elect to modify this Agreement as follows: (i) all rights
and licenses granted by P&U to Geron pursuant to this Agreement shall terminate,
except that P&U's obligations under Article 8 herein shall become immediately
due and payable and within thirty (30) days of such uncured breach, P&U shall
deliver to Geron a one-time lump sum cash payment to Geron equal to the amounts
not previously paid to Geron pursuant to Article 8 and (ii) all obligations of
Geron pursuant to this Agreement shall terminate.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 61
In the event that such termination occurs after the Research Term as a result of
a breach by P&U of its development or commercialization obligations under this
Agreement, including, without limitation, Sections 3.1 or 5.1 hereof, and the
breach specifically relates solely to a specific Candidate Drug or Product, this
Agreement shall be terminable by Geron in all respects other than with respect
to those Candidate Drugs or Products unrelated to the breach. Any termination or
modification under this Section 17.2 shall be subject to Sections 17.6 and 17.7.
17.3 Termination for Bankruptcy. Either party may terminate this
Agreement with notice if the other party makes an assignment for the benefit of
creditors, is the subject of proceedings in voluntary or involuntary bankruptcy
instituted on behalf of or against such party, or has a receiver or trustee
appointed for all or substantially all of its property; provided that in the
case of an involuntary bankruptcy proceeding such right to terminate shall only
become effective if the party consents to the involuntary bankruptcy or such
proceeding is not dismissed within one hundred eighty (180) days after the
filing thereof. Except for rights to trademarks and trade names, all rights
and licenses granted under or pursuant to this Agreement by P&U or Geron are,
and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S.
Bankruptcy Code, licenses of right to "intellectual property" as defined under
Section 101 of the U.S. Bankruptcy Code. The parties agree that the parties as
licensees of such rights under this Agreement, shall retain and may fully
exercise all of their rights and elections under the U.S. Bankruptcy Code. The
parties further agree that, in the event of the commencement of a bankruptcy
proceeding by or against either party under the U.S. Bankruptcy Code, the party
<PAGE> 62
hereto which is not a party to such proceeding shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, and same, if not
already in their possession, shall be promptly delivered to them (i) upon any
such commencement of a bankruptcy proceeding upon their written request
therefor, unless the party subject to such proceeding elects to continue to
perform all of their obligations under this Agreement or (ii) if not delivered
under (i) above, upon the rejection of this Agreement by or on behalf of the
party subject to such proceeding upon written request therefor by an
non-subject party.
17.4 Termination for Certain Other Events. This Agreement shall
terminate, upon notice from either party, in the event: (i) P&U has not provided
written notice to Geron for the selection of a Candidate Drug in accordance with
Section 2.6 within the Selection Period; (ii) the members of the JRC unanimously
agree in writing that the Research should be terminated; (iii) upon or after the
second anniversary of the Effective Date, P&U makes a lump sum payment of all
funds due under Section 8.1(b) for the third year of the Research Term and
contemporaneously notifies Geron in writing that this Agreement is terminated or
(iv) subject to 17.2 above and at any time after the Selection Period, no
Candidate Drug is being actively developed by P&U in accordance with Article 3
above and no Product containing a Candidate Drug is being actively
commercialized by P&U with royalties due to Geron pursuant to Article 7 and any
Replacement Period, if applicable has elapsed. Upon any such termination
pursuant to this Section 17.4, all rights and licenses granted by Geron to P&U
shall terminate and all payment obligations due thereafter under this Agreement
shall terminate.
<PAGE> 63
17.5 Change of Control.
(a) During the Research Term. In the event that during
the Research Term a Third Party or KH or its Affiliates (the "Acquiring Party")
shall propose to acquire, directly or indirectly, fifty percent (50%) or more of
the outstanding shares entitled to vote for the election of directors of Geron,
Geron shall notify P&U of the proposed acquisition not less than sixty (60) days
prior to consummation of such acquisition. P&U shall have the right, within 60
days of such notice, to elect to do one of the following: (i) terminate the
Agreement or (ii) terminate only Geron's co-promotion rights hereunder and
Geron's rights to participate in the development of the Candidate Drugs. P&U may
make such election contingent upon the consummation of the proposed transaction.
In the event P&U elects to terminate the Agreement, all rights and obligations
of both parties hereunder shall terminate. In the event such transaction occurs
during the first year following the Effective Date, Geron or the Acquiring Party
shall also reimburse P&U for research payments made by P&U prior to such
transaction. In the event P&U elects to terminate Geron's co-promotion rights
hereunder and rights to participate in the development of Candidate Drugs, (i)
the royalty reduction provisions of Section 7.4 shall terminate, (ii) Geron's
co-promotion rights hereunder shall terminate, (iii) all of Geron's rights and
obligations to participate in the development and commercialization of
Candidate Drugs shall terminate and (iv) all other provisions of this Agreement
shall remain in force and effect.
(b) After the Research Term. If, at any time after the
Research Term, any Acquiring Party shall propose to acquire, directly or
indirectly, fifty percent (50%) or more of the
<PAGE> 64
outstanding shares entitled to vote for the election of directors of Geron,
Geron shall notify P&U of the proposed acquisition not less than sixty (60) days
prior to consummation of such acquisition. P&U shall have the right, within
sixty (60) days of such notice, to terminate Geron's co-promotion rights
hereunder and Geron's right to participate in the development of Candidate
Drugs. P&U may make such election contingent upon the consummation of the
proposed transaction. Upon such termination of rights: (i) the royalty reduction
provisions of Section 7.4 shall terminate, (ii) Geron's right to co-promote
hereunder shall terminate, (iii) all of Geron's rights and obligations to
participate in the development and commercialization of Candidate Drugs shall
terminate and (iv) all other provisions of this Agreement shall remain in force
and effect.
(c) General. Promptly after Geron notifies P&U concerning
any proposed transaction with an Acquiring Party, the parties shall meet and
discuss in good faith the issues related to the proposed transaction. Any
Confidential Information of P&U relating to the clinical development,
manufacture or marketing of Products shall not be disclosed to any Acquiring
Party and may not be used by any Acquiring Party. P&U shall not be required to
disclose any such Confidential Information to any Acquiring Party.
17.6 Surviving Rights. The obligations and rights of the parties
under Sections 2.3, 7.3, 7.10, 14.1, 14.6, 14.7, 14.9 and 16.1 and Articles 13,
17, 18, and 19 of this Agreement will survive termination.
<PAGE> 65
17.7 Accrued Rights, Surviving Obligations. Termination,
relinquishment, or expiration of this Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either party
prior to such termination, relinquishment, or expiration, including damages
arising from any breach hereunder. Such termination, relinquishment, or
expiration shall not relieve either party from obligations which are expressly
indicated to survive termination or expiration of the Agreement.
ARTICLE 18
INDEMNIFICATION, DISCLAIMERS AND LIMITATIONS
18.1 P&U Indemnification. P&U shall indemnify and hold Geron and
its Affiliates harmless from and against any and all liability, damage, loss,
cost (including reasonable attorneys' fees), and expense resulting from any
claim for bodily injury or property damage: (a) relating to the development,
manufacture, use, distribution, or sale of any Product by P&U, its Affiliates or
sublicensees in the Territory, or (b) due to the negligence or willful
misconduct of P&U, its Affiliates or sublicensees, or their employees or agents.
P&U shall indemnify and hold Geron and its Affiliates harmless from and against
any and all liability, damage, loss, cost (including reasonable attorneys'
fees), and expense resulting from any (i) breach of P&U's representations under
Article 15, (ii) except as provided in Section 18.2 below, claim of patent
infringement or violation of other intellectual property rights arising out of
P&U's, its Affiliate's or sublicensee's conduct of the Research or Geron's, its
Affiliate's or sublicensee's use of the P&U Technology in the conduct of the
Research or (iii) claims of patent infringement arising out
<PAGE> 66
of P&U's, its Affiliates' or sublicensees' method of manufacture of Candidate
Drugs and Products.
18.2 Geron Indemnification. Geron shall indemnify and hold P&U and
its Affiliates harmless from and against any and all liability, damage, loss,
cost (including reasonable attorneys' fees), and expense resulting from any
claim: (a) relating to the development, manufacture, use, distribution or sale
by Geron, its Affiliates or sublicensees of any product containing Geron or KH
Compounds, the rights to which reverted to Geron under this Agreement or (b)
other than product liability claims, (i) arising directly out of Geron's
co-promotion activities pursuant to this Agreement, or (ii) due to the
negligence or willful misconduct of Geron, its Affiliates or sublicensees, or
their employees or agents. Geron shall indemnify and hold P&U and its
Affiliates harmless from and against any and all liability, damage, loss, cost
(including reasonable attorneys' fees), and expense resulting from any (i)
breach of Geron's representations under Article 15, or (ii) claim of patent
infringement or violation of other intellectual property rights arising out of
Geron's, its Affiliate's or sublicensee's conduct of the Research or P&U's, its
Affiliate's or sublicensee's use of the Geron Technology in the conduct of the
Research.
18.3 Employees. Each party shall indemnify and hold the other
party harmless, and hereby forever releases and discharges the other party,
from and against all claims, demands, liabilities, damages and expenses
(including attorney's fees) arising out of personal injury (including death) or
property damage incurred or suffered by employees or consultants of the
<PAGE> 67
indemnifying party, its Affiliates or contractors in the performance of or
under this Agreement, except to the extent caused by the sole negligence,
recklessness or willful misconduct of such other party, its employees or
agents.
18.4 Claim Procedure. Upon obtaining knowledge of the institution
of any action, proceeding, or other claim or demand of indemnity hereunder, the
party seeking indemnification (the "Indemnified party") shall promptly notify
in writing the other party thereof (the "Indemnifying party"). If such claim or
demand relates to a claim or demand asserted by a Third Party, the Indemnifying
party shall have the right at its expense to employ counsel to defend such
claim or demand and the Indemnified party shall have the right, but not the
obligation, at its expense to participate in the defense of any such claim or
demand. So long as the Indemnifying party is defending such claim or demand in
good faith, the Indemnified party will not settle such claim or demand without
the Indemnifying party's consent. The Indemnified party shall make available to
the Indemnifying party all records and other materials reasonably required by
it in contesting a claim or demand asserted by a Third Party against the
Indemnified party and shall cooperate in the defense thereof.
18.5 Limited Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE, NEITHER GERON (OR ITS AFFILIATES) NOR P&U (OR ITS
AFFILIATES) WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT
UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR
<PAGE> 68
OTHER LEGAL OR EQUITABLE THEORY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR
LOST PROFITS.
18.6 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY
TECHNOLOGY, GOODS, SERVICES, RIGHTS, OR OTHER SUBJECT MATTER OF THIS AGREEMENT
AND HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NON-INFRINGEMENT WITH RESPECT TO ALL OF THE FOREGOING.
ARTICLE 19
MISCELLANEOUS
19.1 Reasonable Diligent Effort. As used herein, the term
"reasonable diligent effort" means efforts and resources commonly used in the
research-based pharmaceutical industry for a product at a similar stage in its
product life taking into account the establishment of the product in the
marketplace, the competitiveness of the marketplace, the proprietary position
of the product, the regulatory structure involved, the profitability of the
product and other relevant factors. Such resources and efforts shall be
determined for a particular Product on a case-by-case basis; and it is
anticipated that the level of effort will change over time reflecting changes
in the status of the Product and the marketplace.
<PAGE> 69
19.2 Assignment; Sale or Merger. Neither Geron nor P&U shall have
the right to assign any or all of its rights under this Agreement to any Third
Party or KH or its Affiliates without the prior written consent of the other
party. Notwithstanding the foregoing, but subject to the terms of Section
17.5, either party may assign all of its rights or obligations under this
Agreement without the other party's consent (i) to any Affiliate provided that
such Affiliate is also assigned the related business and assets which are the
subject of this Agreement and (ii) in connection with the sale of all or
substantially all of the assigning party's related business, whether by merger,
stock sale, or other transaction; provided that in either case, such assignment
shall not relieve such party of its responsibilities for performance of its
obligations under this Agreement. This Agreement shall survive any merger of
either party with or into another party.
19.3 Meetings. Meetings of the JRC may be called by either party
on thirty (30) days written notice to the other unless such notice is waived by
the parties in writing or by the attendance of all representatives. The JRC
may be convened, polled, or consulted from time to time by means of
telecommunication or correspondence.
19.4 Retained Rights. Except as expressly set forth in this
Agreement, nothing in this Agreement shall limit in any respect the right of
either party to conduct research and development and market products outside
the Field using such party's Technology, and no license to use the other
party's Technology to do so is granted herein by implication.
19.5 Force Majeure. Neither party shall lose any rights hereunder
or be liable to the other party for damages or losses or otherwise be deemed to
be in default on account of failure of
<PAGE> 70
performance by the defaulting party if the failure is occasioned by government
action, war, fire, earthquake, explosion, flood, strike, lockout, embargo, act
of God, or any other similar or dissimilar cause beyond the control of the
defaulting party; provided, that the party claiming force majeure has exerted
all reasonable efforts to avoid or remedy such force majeure, provided,
however, that in no event shall a party be required to settle any labor dispute
or disturbance.
19.6 Further Actions. Each party agrees to execute, acknowledge
and deliver such further instruments, and to do all such other acts as may be
necessary or appropriate to carry out the purposes and intent of this
Agreement.
19.7 No Trademark Rights. Except as otherwise expressly provided
herein, no right is granted by the Agreement to use in any manner the name
"Geron" or "Pharmacia & Upjohn" or any other trade name or trademark of the
other party in connection with the performance of this Agreement.
19.8 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by facsimile
transmission (receipt verified), five (5) business days after mailed by
registered or certified mail (return receipt requested), postage prepaid, or
sent by express courier service to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice,
provided that notices of a change of address shall be effective only upon
receipt thereof):
If to Geron, addressed to: Geron Corporation, 230 Constitution Drive,
Menlo Park, CA 94025; Attention: President; Telephone: 415-473-7700;
Facsimile: 415-473-7750; with a copy
<PAGE> 71
to: Venture Law Group, 2800 Sand Hill Road, Menlo Park, CA 94025; Attention:
Joshua L. Green; Telephone: 415-854-4488; Facsimile: 415-233-8386.
If to P&U, addressed to: P&U & Upjohn S.p.A., Via Robert Koch, 1.2,
20152 Milano, Italy; Attention: Managing Director; Telephone: +39 2 4838 2023;
Facsimile: +39 2 4838 2033; with a copy to: Wiggin & Dana, 301 Tresser Blvd.,
Stamford, Connecticut 06901; Attention: James F. Farrington, Jr.; Telephone:
(203) 363-7614; Facsimile: (203) 363-7676.
19.9 Governing Law. This Agreement shall be governed by the laws
of the State of New York, U.S.A., as such laws are applied to contracts entered
into and to be performed within such state notwithstanding the provisions
governing conflict of laws under such laws to the contrary.
19.10 Dispute Resolution.
(a) General. The parties recognize that disputes as to
certain matters may arise from time to time arise during the term of this
Agreement which relate to either party's rights or obligations hereunder. It
is the objective of Geron and P&U to establish procedures to facilitate the
resolution of disputes arising under this Agreement in an expedient manner by
mutual cooperation and without resort to litigation. To accomplish this
objective, the parties agree to follow the procedures set forth in this Section
19.10, if and when a dispute arises under this Agreement.
<PAGE> 72
(b) Prior Negotiation. Except for disputes within the
JRC, all disputes hereunder will be resolved as provided in this Section 19.10.
Either party may, by written notice to the other, have such dispute referred to
their respective chief executive officers, for attempted resolution by good
faith negotiations within twenty (20) business days after such notice is
received. In the event the designated executive officers are not able to
resolve such dispute within thirty (30) business days after such notice, either
party may at anytime thereafter invoke the provisions of Section 19.10(c).
(c) Arbitration. Except for disputes within the JRC, any
controversy or claim arising out of or relating to this Agreement, or the
breach thereof, will be finally settled by binding arbitration in New York, New
York U.S.A. under the Commercial Arbitration Rules of the American Arbitration
Association, by three arbitrators appointed in accordance with said rules.
Each party shall select one such arbitrator, and the two arbitrators so chosen
shall select the third arbitrator. The arbitrators shall apply New York law,
without reference to rules of conflicts or law or rules of statutory
arbitration, to the resolution of any dispute. Judgment on the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, the parties may apply to any court of competent
jurisdiction for preliminary or interim equitable relief to compel arbitration
in accordance with this Section 19.10, or to resolve any disputes primarily
relating to patent matters (including, without limitation, matters relating to
the validity, scope or ownership of patents) without breach of this arbitration
provision.
<PAGE> 73
19.11 Waiver. All waivers must be in writing signed by authorized
representatives of both parties. Except as specifically provided for herein,
the waiver from time to time by either of the parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a
continuing waiver of same or of any other of such party's rights or remedies
provided in this Agreement.
19.12 Severability. If any term, covenant or condition of this
Agreement or the application thereof to any party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then (i) the remainder of this
Agreement, or the application of such term, covenant, or condition to parties
or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term, covenant, or
condition of this Agreement shall be valid and be enforced to the fullest
extent permitted by law; and (ii) the parties hereto covenant and agree to
renegotiate for a period of ninety (90) days after such provision is held to be
invalid or unenforceable any such term, covenant, or application thereof in
good faith to provide a reasonably acceptable alternative to the term,
covenant, or condition of this Agreement or the application thereof that is
invalid or unenforceable, it being the intent of the parties that the basic
purposes of this Agreement are to be effectuated.
19.13 Entire Agreement. This Agreement and the Three-Way Agreement
set forth all the covenants, promises, agreements, warranties, representations,
conditions, and understandings between the parties hereto and supersedes and
terminates all prior agreements and understandings, including, without
limitation, the Heads of Agreement dated December 20,
<PAGE> 74
1996, other than those pertaining to confidential information between the
parties and the Common Stock Purchase Agreements dated December 20, 1996, and
March 23, 1997. There are no covenants, promises, agreements, warranties,
representations, conditions, or understandings, either oral or written, between
the parties other than as set forth herein. No subsequent alteration,
amendment, change, or addition to this Agreement shall be binding upon the
parties hereto unless reduced to writing and signed by the respective
authorized officers of the parties.
19.14 Effective Date.
(a) This Agreement shall be effective the business day
following the satisfaction of the last to occur of each of the following (the
"Effective Date"):
(i) all filings shall have been made, and the
expiration or termination of all waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended;
(ii) amendment of the KH Agreement in a manner
satisfactory to each of P&U and Geron;
(iii) execution of the Three-Way Agreement by
Geron, P&U and Kyowa Hakko; and
(iv) receipt of all other government approvals
necessary to enter into this Agreement, the Three-Way Agreement and the
amendment to the KH Collaboration.
<PAGE> 75
(b) P&U and Geron shall use their best efforts to satisfy
each of the foregoing conditions as soon as possible following the Signature
Date.
19.15 Third Party Rights. The parties acknowledge that certain of
the obligations, rights and licenses granted pursuant to this Agreement are
subject to the terms and conditions of applicable Third Party Licenses. Except
as expressly set forth in Article 15, in the event of a conflict between the
terms and conditions of this Agreement and the applicable Third Party License,
the terms and conditions of the applicable Third Party License shall control.
<PAGE> 76
IN WITNESS WHEREOF, the parties have executed this License and
Research Collaboration Agreement in duplicate originals by their proper
officers as of the date and year first above written.
GERON CORPORATION
By: /s/ Ronald W. Eastman
-------------------------------
Title: President
----------------------------
PHARMACIA & UPJOHN S.p.A.
By: /s/ Lamberto Andreotti
-------------------------------
Title: Managing Director
----------------------------
<PAGE> 77
EXHIBIT 1.6
INTERPRETIVE EXAMPLES
The following examples are intended to illustrate the parties' intent
concerning the meaning of the sections of the Agreement set forth below:
SECTION 1.6 - "CONTROL"
Control shall include rights which a party may acquire by the exercise of a
option under, for example, a sponsored research agreement so long as the
applicable royalty rate does not exceed the rate set forth in a related license
agreement already in effect between the parties. If the royalty rate increases
(or additional payments are required which are not otherwise payable under an
existing Third Party License), the exercise of such rights shall be treated as
an expansion of a Third Party License under Section 4.6.
SECTION 4.5/4.6 - NEW "THIRD PARTY LICENSES"
Geron shall pay all royalties and other payments due under its existing Third
Party Licenses to the extent not exceeding the rate or amounts now set forth in
such Licenses. If, for example, a new invention arises under an existing
sponsored research agreement and Geron may acquire
<PAGE> 78
rights to such invention only upon the payment of a royalty rate higher than
the rate now set forth in any applicable Third Party License, the acquisition
of such rights shall be deemed an expansion of such Third Party License as
described in Section 4.5. Whether Geron acquires such rights shall first be
determined by the JRC under Section 4.6. If the JRC approves the acquisition
of such rights, the royalty payments exceeding the amounts set forth in the
existing applicable Third Party Rights shall be shared equitably as provided in
Section 4.6.
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 79
EXHIBIT 1.12
GERON PATENTS
I. PATENTS OWNED BY GERON
1. Telomerase Screens and Inhibitors: [*]
2. TRAP and other Telomerase Activity Assays: [*]
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 80
3. RNA Component of Telomerase (hTR): [*]
[*]
4. hTR Promoter Screen: [*]
[*]
5. Telomerase Cloning: [*]
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 81
6. Telomere Length Assays: [*]
[*]
II.PATENTS EXCLUSIVELY LICENSED BY OR UNDER OPTION TO GERON
1. Third Party Licensor: The Board of Regents of the University
of Texas ("UT" - all) and The Board of Regents of the University of California
("UC" - 2/3 through 4/5). [*]
[*]
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 82
[*]
[*]
2. Third Part Optionor: Baylor University. [*]
[*]
3. Third Party Optionor: Cold Spring Harbor Laboratory. [*]
[*]
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 83
[*]
4. Third Party Licensor: Fred Hutchinson Cancer Research Center.
[*]
[*]
5. Third Party Optionor: McMaster University. [*]
[*]
6. Third Party Licensor: University Technology Corporation (for
the University of Colorado). [*]
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 84
EXHIBIT 1.37
RESEARCH PLAN
AIM: This workplan provides the description of activities, timelines and
resource allocations concerned with the P&U-Geron collaborative research
project to discover and develop small organic inhibitors of telomerase for the
treatment of cancer in humans.
GENERAL PRINCIPLES: Research activities aimed at discovering telomerase
inhibitors will be pursued in a collaborative and coordinated fashion by Geron
and P&U. To maximize synergy, both sides will contribute with the most
appropriate resources, including FTEs, taking into account the expertise and
capabilities present at each site, thus avoiding duplication and overlap.
A Project Team will be established with members from Geron and P&U representing
key competencies required for optimal advancement of research. Thus the
composition of the Project Team may change as the collaboration progresses.
[*]
[Graphic: Work Flow Chart which indicates in
graphic flow-chart format the basic research
responsibilities arising from this agreement.]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 85
DESCRIPTION OF ACTIVITIES:
Basic Research
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 86
Screening
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 87
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 88
CD CRITERIA
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 89
[*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 90
EXHIBIT 2.4
JOINT RESEARCH COMMITTEE
Geron's initial appointees to the JRC: Ronald W. Eastman
Federico Gaeta
Calvin B. Harley
P&U's initial appointees to the JRC: Lamberto Andreotti
Terje Kalland
Rolf Klepzen
<PAGE> 91
EXHIBIT 4.5
THIRD PARTY LICENSES
I. GERON SPONSORED RESEARCH AGREEMENTS
A. University of Texas Southwestern Medical Center -- [*]
B. McMaster University -- [*]
C. Cold Spring Harbor Laboratory -- [*]
D. Baylor College of Medicine -- [*]
II. LICENSES GRANTED TO GERON
A. University Technology Corporation (for the University of
Colorado) -- Exclusive Patent License Agreement Effective 9 December
1996.
B. The Regents of the University of Texas -- [*]
C. The Regents of the University of California -- Exclusive
Patent License Agreement Effective 2 February 1994.
D. Cold Spring Harbor Laboratory -- Exclusive License Agreement
for Telomerase Inhibition Screen Effective September 1993.
III. LICENSES GRANTED BY GERON
A. The U.S. and State Governments -- Licenses Granted Pursuant to
Government Funding (standard statutory licenses granted to the U.S.
Government in connection with the receipt of governmental funding,
i.e., royalty-free license to the government and march-in rights):
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 92
1. National Cooperative Drug Discovery Grant;
Telomerase: A Molecular Target for Cancer Chemotherapy (with
Memorial Sloan-Kettering Cancer Center); Funding Period: 21
September 1995 to 31 August 2000.
2. The Regents of the University of California
Breast Cancer Research Program; Telomerase: A Factor for Early
Detection of Breast Cancer; Funding Period I July 1995 to 30
June 1997.
3. National Science Foundation Grant; Telomere
Synthesis and Maintenance in Higher Eukaryotes (formerly with
the University of California, Davis); Funding Period 15 April
1993 to 31 March 1997.
4. National Institute of Aging Grant; Structure
and Function of Telomeres in Mammalian Aging (Cold Spring
Harbor Laboratory & McMaster University); Funding Period 15
September 1991 to 31 July 1996.
5. Small Business Research Program SBIR Grant
(Phase 1); Telomerase Expression as a Prognostic Indicator for
Breast Cancer; Funding Period: March 1995 to May 1995. Note
Phase 2 application is pending and has received favorable
consideration (Funding Period 1 March 1997 to 30 April 1999).
6. National Science Foundation Grant;
Transcriptional Enhancers and Chromatin Structure (formerly
with the University of Michigan); Funding Period: 31 May 1993
to 31 May 1995.
7. Allied Signal Project; Cell and Animal Models
of Telomere Loss in Aging (with Cold Spring Harbor Laboratory
& McMaster University); Funding Period: 1 April 1993 to 30
October 1994.
8. Small Business Research Program SBIR Grant
(Phase 1); Telomerase Inhibition as a Selective Anti-Cancer
Therapy; Funding Period 7 July 1994 to 7 December 1994.
B. Research-Use-Only Kit Licenses
1. Boehringer Mannheim -- TRAP Assay Kits;
Effective 21 March 1996.
2. Dako Corporation -- Telomerase RNA Component
Assay Kits; Effective 27 February 1996.
<PAGE> 93
3. Kyowa Medex Co., Ltd.-- TRAP Assay Kits &
Clinical Diagnostics Using Same; Effective 12 June 1996.
4. Oncor, Inc. -- TRAP Assay Kits; Effective 1
November 1995.
5. Pharmingen -- TRAP Assay and Telomere Length
Analysis Kits; Effective Date 15 October 1996.
<PAGE> 94
EXHIBIT 10
COMMON STOCK PURCHASE AGREEMENT
(Attached as Exhibit 10.29 to the Company's Report on
Form 10-Q for the Quarter Ended March 31, 1997)
<PAGE> 95
EXHIBIT 11
CO-PROMOTION TERMS
The following terms shall be contained in a separate co-promotion agreement
that shall be entered into pursuant to Section 11.2 of the Agreement. In this
Exhibit 11 "P&U" shall refer to the Pharmacia & Upjohn Affiliate in the United
States, which shall be a party to the co-promotion agreement.
1. Direct Sales Forces. The parties shall co-promote the
Products in the United States using their own direct sales
forces and a centrally coordinated marketing approach
developed by P&U. The Products shall be sold with identical
packaging and promotional materials.
2. Manufacturing Distribution and Pricing. P&U will be solely
responsible for manufacturing, physically distributing,
shipping, booking sales, and invoicing all Products. P&U
shall also be solely responsible for determining the sales
price and all pricing related strategies.
3. Account Allocation. Although P&U has the primary marketing
role, Geron shall have the right to deploy a co-promotion
sales force. Such Geron sales force shall comprise such
number of sales representatives as may be required to
effectively perform the level of detailing and other
promotional activities required to achieve [*]of the sales in
the United States, which the parties now intend will require
having [*] of the total number of direct sales representatives
detailing and promoting the Products. The parties agree to
allocate accounts in an unbiased manner based on objective,
quantifiable information and market research data with the
objective of allocating to each party accounts from which each
such party will have the opportunity to maximize sales. Geron
recognizes that P&U's representatives may also call on the
same accounts to promote P&U's other products, and may also
promote the Products. However, the representatives will
coordinate their efforts to optimize the calling effort on
each account.
4. Sales and Distribution. Winless otherwise agreed, P&U shall
have the sole responsibility with respect to the following:
4.1 Booking sales for and distribution of Products.
Geron shall refer orders to P&U.
_____________________
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 96
4.2 Handling all returns of Products. Any Products
returned to Geron shall be shipped to the facility
responsible for shipment of Products in United States
to the attention of the Returned Goods Department or
another location as may be designated by P&U.
4.3 Handling all recalls of Products. Geron will make
available to P&U, upon request, all of its pertinent
records which P&U may reasonably request to assist
P&U in effecting any recall.
4.4 Handling all aspects of order processing, invoicing
and collection, Product distribution, warehousing,
inventory and receivables, and collection of data of
sales to hospitals and other end users.
4.5 Handling all other customer service related
functions.
5. Marketing and Promotional Materials. All marketing and
promotional materials related to the Products shall be
prepared by P&U, and all marketing and promotional platforms
and campaigns shall be subject to review and approval by P&U.
P&U shall be entitled to select any Third Parties involved in
the preparation of such materials. With respect to written
and visual promotional or educational materials, to the extent
such materials identify or otherwise make reference to either
of the parties, Geron and P&U shall both be presented and
described as having participated in the development and
commercialization of such Product, as permitted by applicable
laws and regulations. All documentary information,
promotional material and oral presentations (where practical)
regarding the detailing and promoting of Products shall state
this arrangement and display the names and logos of Geron and
P&U.
6. Training Program. P&U shall develop training programs
relating to Products for the sales forces of each party. The
parties agree to utilize such training programs on an ongoing
basis to assure a consistent, focused promotional strategy.
The initial training shall be carried out at a time which is
mutually acceptable to the parties, and which is prior to but
reasonably near the date on which the first NDA approval is
expected. As additional members are added to the parties'
respective sales forces, training will be given to groups of
the newly selected members. While P&U will be responsible for
providing such training, Geron shall pay all costs and
expenses for its sales representatives, including salaries,
and travel expenses.
7. Compliance with Laws. Geron shall comply with all applicable
laws and regulations, and drug regulatory agency policies and
guidelines relating to the promotion of the Product.
8. Direct Sales. Each party shall maintain its own direct sales
force of suitably qualified and trained professional
representatives. Such representatives shall be employees or
independent contractors of such party. Geron's sales force
shall
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<PAGE> 97
comprise such number of sales representative that equals
approximately [*] of the total number of Geron and P&U sales
representatives Detailing (as defined below) and promoting the
Products. Neither party shall have any authority or
responsibility for the hiring, firing, compensation or
employee benefits of the other party's sales force personnel.
Each party shall pay all costs and expenses required to
maintain its own sales force, including salaries, bonuses,
benefits, car allowances, and travel expenses. Geron's
compensation set forth below is based on Geron's compliance
with the foregoing requirements. In all material respects
(other than as to employment matters), P&U shall treat the
Geron and P&U representatives as a combined sales force and
shall provide the Geron representatives with the same support
and assistance it provides its own representatives Detailing
and promoting the Products.
9. Promotional Plan. P&U, in consultation with Geron, shall
establish a marketing and promotional plan each year (the
"Promotional Plan"). The Promotional Plan shall include the
general promotional activities planned for such year, and the
allocation of specific responsibilities of the sales forces of
P&U and Geron. Such specific responsibilities shall include
the expected level of detailing and other promotional
activities by Geron, and an allocation of the accounts and
markets to which each party shall focus its detailing efforts.
10. Detailing Effort. Geron shall detail the Products as required
by the Promotional Plan using its qualified direct sales force
personnel. The detailing effort shall be shared in accordance
with the allocation described in Paragraph 3 above.
"Detailing" shall mean a face-to-face meeting with individual
physicians or other potential prescribers of the Products
where the Products and its therapeutic use are presented in
the [*] Geron shall allow P&U's sales management personnel
from time to time to accompany its sales representatives on
detail calls to monitor their performance and facilitate
training.
11. Co-Promotion Compensation. Geron shall receive an annual fee
equal to [*] of the [*], which shall be determined as follows:
11.1 The [*] shall equal [*] in the co-promotion country,
less:
(a) COGS,
(b) Distribution Expenses,
(c) Royalties, and
(d) Marketing Costs
11.2 Each of The foregoing terms shall be defined as
follows:
____________________
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
-3-
<PAGE> 98
(a) "COGS" shall be as defined in the Agreement.
(b) "Distribution Expenses" means [*].
(c) "Royalties" means [*].
(d) "Marketing Costs" means [*].
(e) "Allocable Overhead" means [*].
-4-
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 99
All accounting and allocation of costs will be consistent with
the costs attributed to P&U product management as measured in
P&U's standard accounting system for activities directly
related to products sold.
12. Adverse Drug Events. The parties recognize that P&U, as the
holder of the NDA, may he required to submit information and
file reports to various governmental agencies on compounds
under clinical investigation, compounds proposed for
marketing, or marketed drugs. Information must be submitted
at the time of initial filing for investigational use in
humans and at the time of a request for market approval of a
new drug. In addition, supplemental information must be
provided on compounds at periodic intervals and adverse drug
experiences must be reported at more frequent intervals
depending on the severity of tile experience. Consequently,
each party agrees to follow P&U's standard operating
procedures ("SOPs") for the reporting of adverse events in
effect from to time to time and, to the extent not
inconsistent with the SOPs, the following:
12.1 provide to the other for initial and/or periodic
submission to government agencies significant
information on the drug from preclinical laboratory,
animal toxicology and pharmacology studies, as well
as adverse drug experience reports from clinical
trials and commercial experiences with the compound;
12.2 in connection with investigational drugs, report to
the other within three (3) days of the initial
receipt of a report of any unexpected or serious
adverse experience with the drug, or sooner if
required for either party to comply with regulatory
requirements; and
12.3 in connection with marketed drugs, report to the
other within five (5) business days of the initial
receipt of a report of any adverse experience with
the drug that is serious and unexpected or sooner if
required for either party to comply with regulatory
requirements. Serious adverse experiences mean any
experience that suggests a significant hazard,
contraindication, side effect or precaution, or any
experience that is fatal or life threatening, is
permanently disabling, requires or prolongs inpatient
hospitalization, or is a congenital anomaly, cancer,
or overdose. An unexpected adverse experience is one
not identified in nature, specificity, severity or
frequency in the current investigator brochure of the
U.S. labeling for the drug. Each party also agrees
that if it contracts with a Third Party for research
to be performed by such Third Party on the drug, that
party agrees to require such Third party to report to
contracting party the information set forth in
subparagraphs 12.1, 12.2 and 12.3 above.
-5-
<PAGE> 100
13. Other Terms.
13.1 P&U shall grant Geron such rights under P&U's
trademarks for the Products as shall be necessary to
perform the co-promotion activities.
13.2 Geron may not conduct, directly or indirectly, any
clinical trials of the Product. All required Phase
IV and marketing trials shall be conducted by P&U.
13.3 If required in the United States, P&U shall grant
such rights under its NDA and other registrations as
may be required for Geron to conduct its
co-promotional activities.
13.4 P&U shall have the right to terminate the
co-promotion agreement if Geron fails to remedy a
material breach within a reasonable time. P&U may
also terminate the copromotion agreement if it
permanently withdraws the Products from the market in
the United States.
13.5 Each party shall have the right to inspect the
records of the other party relevant to monitoring the
other party's performance, including Geron's
detailing records and P&U's costs records relating to
the determination of the Net Marketing Margin.
13.6 Such additional or modified terms as may be required
to comply with any legal requirements of the United
States.
-6-
<PAGE> 1
EXHIBIT 10.27
AMENDMENT NO. 2
TO THE
LICENSE AND RESEARCH COLLABORATION AGREEMENT
THIS AMENDMENT NO. 2 ("Amendment No. 2") to that certain License and
Research Collaboration Agreement dated April 24,1995 (the "KH Agreement"), as
amended by Amendment No. 1 thereto dated July 15, 1995 ("Amendment No. 1") is
made as of March 23,1997, by and between Geron Corporation, a Delaware
corporation having its principal place of business at 230 Constitution Drive,
Menlo Park, CA 94025 USA ("Geron"), and Kyowa Hakko Kogyo Co., Ltd., a Japan
corporation having its principal place of business at 1-6-1 Ohtemachi,
Chiyoda-ku, Tokyo, Japan ("Kyowa Hakko"). All terms not otherwise defined
herein shall have the meaning given such terms in the KH Agreement. This
Amendment No. 2 shall become effective upon the effective date of the P&U
Agreement (as defined below).
RECITALS
WHEREAS, Geron and Kyowa Hakko entered into the KH Agreement to
discover and develop inhibitors of telomerase for the treatment of cancer in
humans for sale by Kyowa Hakko in the Asian Territory and by Geron or its
licensees in the rest of the world;
WHEREAS, on December 20, 1996, Geron entered into a Heads of Agreement
with Pharmacia & Upjohn, S.p.A, an Italian corporation ("P&U"), that describes
a collaboration to discover and develop inhibitors of telomerase for the
treatment of cancer in humans for sale by P&U on a worldwide basis, subject to
the terms and conditions of the KH Agreement and Amendment No. 1, as amended by
this Amendment No. 2;
WHEREAS, simultaneous with the execution of this Amendment No. 2,
Geron and P&U will enter into a License and Research Collaboration Agreement on
substantially the terms set forth in the Heads of Agreement (the "P&U
Agreement"), and Geron, P&U and Kyowa Hakko will enter into that certain
Three-Way Collaboration Agreement in the form attached hereto as Exhibit 1 (the
"Three-Way Agreement");
WHEREAS, Geron and Kyowa Hakko desire to enter into this Amendment No.
2 and the Three-Way Agreement to integrate the collaborations between Geron and
P&U and Geron and Kyowa Hakko to achieve worldwide development and
commercialization of telomerase inhibitors for the treatment of cancer in
humans;
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereby agree as follows.
<PAGE> 2
ARTICLE 1
RESEARCH
1.1 Research Term. Unless extended by mutual agreement of the
parties, the Research Term of the KH Agreement is hereby amended to terminate
on the first to occur of (i) termination of the KH Agreement by either party
under Article 16 of the KH Agreement or (ii) on the third anniversary of the
effective date of the P&U Agreement.
1.2 Collaborative Research. Section 3.1 of the KH Agreement is
hereby amended to include the efforts of P&U as provided in the Three-Way
Agreement.
1.3 Selection of compounds for Development. Section 3.5 of the KH
Agreement is hereby amended to allow Kyowa Hakko to select compounds Controlled
by P&U for development as provided in the Three-Way Agreement.
1.4 Screening of Kyowa Hakko Compounds. Section 3.6 of the KH
Agreement and all references thereto in the KH Agreement and Amendment No. 1 in
its entirety are hereby rendered null and void. Kyowa Hakko shall have the
right during the Research Term at its discretion to screen compounds for
telomerase inhibitory activity or to submit such compounds to Geron for
screening.
ARTICLE 2
DEVELOPMENT
2.1 Product. For purposes of this Amendment No. 2, "Product"
shall have the meaning set forth in the Three-Way Agreement.
2.2 Development in the [*]. Section 4.3 of the KH Agreement is
hereby amended to provide P&U the rights to participate in the development and
commercialization of Products in the [*] as provided in the Three-Way Agreement.
2.3 Development Outside the [*]. Section 4.4 of the KH
Agreement is hereby amended to grant to P&U the rights granted to Geron to
develop Products outside the [*] and to grant Kyowa Hakko the right to
participate in the development and commercialization of Products for sale in the
[*] as provided in the Three-Way Agreement.
2.4 Development Collaboration. Section 4.5 of the KH Agreement is
hereby amended to grant P&U the right to conduct the United States clinical
trials and to collect the United States clinical data in place of Geron.
Section 4.6 of the KH Agreement is hereby rendered null and void.
ARTICLE 3
LICENSES
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 3
3.1 License to Kvowa Hakko. Section 5.1 of the KH Agreement is
hereby amended to:
(a) subject to Section 9.2 of the Three-Way Agreement,
grant Kyowa Hakko a royalty-bearing license under Geron Technology and Geron's
interest in Joint Patents to make, have made, use, sell and have sold Products
comprising Geron Compounds (as defined in the Three-Way Agreement) or KH
Compounds (as defined in the Three-Way Agreement) in the [*] on an exclusive
basis;
(b) grant Kyowa Hakko a royalty-bearing license under
Geron Technology and Geron's interest in Joint Patents to make, have made, use,
sell and have sold Products [*] on a co-exclusive basis; [*] and
(c) acknowledge (i) P&U's grant of [*] with regard to
Products to Kyowa Hakko in the [*] all as provided in and in accordance with the
Three-Way Agreement and (ii) subject to Section 9.2 of the Three-Way Agreement,
the grant to P&U of a royalty-bearing license under Geron Technology and Geron's
interest in Joint Patents to make, have made, use, sell and have sold Products
comprising P&U Compounds (as defined in the Three-Way Agreement) in the [*] on
an exclusive basis.
3.2 Sublicensing. Section 5.3 of the KH Agreement is hereby
amended to confirm that Kyowa Hakko shall not be entitled to share in the
compensation paid to Geron for P&U's use of KH Technology pursuant to the P&U
Agreement. Further, P&U shall not be entitled to share in the compensation
paid to Geron for Kyowa Hakko's use of P&U Technology pursuant to the KH
Agreement. Kyowa Hakko shall have no right to sublicense its rights to sell
Products comprising P&U Compounds (as defined in the Three-Way Agreement) or
its [*] rights.
3.3 New Technology. Section 5.7 of the KH Agreement is hereby
amended to provide that Gerona's share of the costs of and royalties associated
with any licenses to technology in the Field acquired after the Effective Date
of this Amendment No. 2 shall be shared by P&U, Geron and Kyowa Hakko in
accordance with the provisions of the Three-Way Agreement.
ARTICLE 4
COMMERCIALIZATION
4.1 Advertising and Trademarks. Section 6.2 of the KH Agreement
is hereby amended to provide that Products shall be advertised and named as
provided in the Three-Way Agreement.
4.2 Manufacturing. Section 7.1 of the KH Agreement is hereby
amended to provide that Products shall be acquired or manufactured as provided
in the Three-Way Agreement.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 4
ARTICLE 5
SHARING OF INFORMATION
Sections 12.1, 13.1, and 15.1 of the KH Agreement are hereby amended to
provide that Geron shall not be obligated to disclose to KH during the Research
Term any Information concerning a telomerase inhibitor compound Controlled by
P&U until such time as P&U [*] as provided in the Three-Way Agreement.
ARTICLE 6
PATENT RIGHTS
6.1 Enforcement and Defense Rights. Section 13.4 of the KH
Agreement is hereby amended to provide that the right to institute, prosecute
and control any action or proceeding with respect to the infringement or
defense of a Geron Patent, Kyowa Hakko Patent or Joint Patent relating to a
Product shall be as provided in the Three-Way Agreement.
6.2 Infringement. Section 13.6 of the KH Agreement is hereby
amended to provide that if a claim of patent infringement is brought against
Kyowa Hakko or Geron on account of the use, manufacture or sale of a Product,
then the defense against such claim shall be conducted as provided in the
Three-Way Agreement.
6.3 Back-up Rights. Section 13.7 of the KH Agreement is hereby
amended to provide that should either Geron or Kyowa Hakko determine not to
file, prosecute, maintain or issue a Geron Patent, Kyowa Hakko Patent, or Joint
Patent, then the rights of the party not making such determination shall be
subject to P&U's rights, as provided in the Three-Way Agreement.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
Kyowa Hakko and Geron agree that this Amendment No. 2, the P&U
Agreement, and the Three-Way Agreement do not violate the representations and
warranties of Article 14 of the KH Agreement.
ARTICLE 8
TERMINATION
Section 16.2 of the KH Agreement is hereby amended to provide that, in
the event of a termination for breach, the non-breaching party's license after
termination shall be subject to the rights of and licenses granted to P&U in
the P&U Agreement and the Three-Way Agreement.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 5
ARTICLE 9
INDEMNIFICATION, DISCLAIMERS AND LIMITATIONS
Except as otherwise may be provided in the supply agreements referenced in
Section 5.4 of the Three-Way Agreement, Section 17.2 of the KH Agreement is
hereby amended to provide that (i) Kyowa Hakko shall not be obligated to
indemnify and hold Geron harmless from and against any liability, damage, loss,
cost (including reasonable attorneys' fees) and expense resulting from any
claim of bodily injury or property damage relating to the development,
manufacture, use, distribution or sale of any Product by P&U; and (ii) Geron
shall not be obligated to indemnify and hold Kyowa Hakko harmless from and
against any liability, damage, loss, cost (including reasonable attorneys'
fees) and expense resulting from any claim of bodily injury or property damage
relating to the development, manufacture, use, distribution or sale of any
Product by P&U.
ARTICLE 10
GENERAL
10.1 Three-Way Agreement. Kyowa Hakko and Geron agree and
acknowledge that certain of the rights and privileges set forth in the KH
Agreement, as amended by this Amendment No. 2, are subject to the terms and
conditions of the Three-Way Agreement. Kyowa Hakko and Geron further agree and
acknowledge that in the event of a conflict between the terms and conditions of
the KH Agreement, as amended by this Amendment No. 2, and the terms and
conditions of the Three-Way Agreement, the terms and conditions of the
Three-Way Agreement shall prevail.
10.2 Limited Amendment. Except as otherwise set forth in this
Amendment No. 2, the KH Agreement shall remain in full force and effect.
<PAGE> 6
IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 as
of the first date written above.
GERON CORPORATION
By: /s/ Ronald W. Eastman
------------------------------
KYOWA HAKKO KOGYO CO., LTD.
By: /s/ H. Yasui
------------------------------
Senior Managing Director
<PAGE> 1
EXHIBIT 10.28
THREE PARTY AGREEMENT
THIS THREE PARTY AGREEMENT is made as of the 23 day of March 1997, by
and among between GERON CORPORATION, a Delaware corporation having its
principal place of business at 230 Constitution Drive, Menlo Park, California,
U.S.A. 94025 ("Geron"); PHARMACIA & UPJOHN S.P.A., a corporation of Italy
having its principal place of business at Via Robert Koch, 1.2, 20152 Milano,
Italy ("P&U"); and KYOWA HAKKO KOGYO CO., LTD., a corporation of Japan having
its principal place of business at 1-6-1 Ohtemachi, Chiyoda-Ku, Tokyo, Japan
("KH" or "Kyowa Hakko").
RECITALS
A. Geron possesses certain rights pertaining to the inhibition of
the enzyme telomerase as it relates to the treatment of cancer in humans.
B. In April 1995, Geron entered into a License and Research
Collaboration Agreement with KH for the research and development of compounds
that inhibit telomerase for the treatment of cancer in humans and for sale in
certain countries of Asia (such agreement, as amended, is referred to as the
"KH Agreement").
C. On March 23, 1997, Geron and P&U entered into a License and
Research Collaboration Agreement for the research and development of compounds
that inhibit telomerase for the treatment of cancer in humans and, subject to
certain rights of Geron thereunder and KH herein, for sale worldwide (such
agreement is referred to as the "P&U Agreement"). Each of the collaborations
with Geron shall be referred to herein as a "Collaboration."
D. Geron, P&U and KH desire to enter into this agreement to
provide for certain rights and obligations affecting all of the parties and to
provide for certain rights and obligations arising directly between KH and P&U.
<PAGE> 2
NOW, THEREFORE, the parties agree as follows:
1. ACCEPTANCE OF AGREEMENTS. Geron and KH represent to P&U, and P&U and
Geron represent to KH, that the KH and P&U Agreements attached hereto,
respectively, are complete and correct (except for the redaction of all
financial information) copies of the KH and the P&U Agreements, including all
amendments through the date hereof. Each of P&U and KH accepts the terms of
such agreements and acknowledge that its respective agreement is subject to the
terms hereof. Geron, KH and P&U shall not amend the KH Agreement and P&U
Agreement, respectively, if such amendment would adversely affect the rights or
obligations of such other party, without the prior written consent of the other
party, which shall not be withheld unreasonably.
2. DEFINITIONS. All capitalized and otherwise undefined terms herein
shall have the meanings set forth in Exhibit 2 to this Agreement.
3. RESEARCH AND DEVELOPMENT.
3.1 Research Coordination. The parties acknowledge that each of
the P&U Agreement and the KH Agreement includes separate research plans under
which each of the parties is required to perform certain work. A portion of
such work to be performed by Geron, including basic research relating to the
telomerase enzyme and the discovery of Geron Compounds, is common to each
Collaboration. The parties shall attempt to coordinate their activities so that
such common work may be performed by Geron in an efficient manner for the
benefit of all parties. Subject to the restrictions set forth in Section 3.2
below, the parties intend to permit Geron to freely disclose all Geron Knowhow
to each of KH and P&U. Geron represents that its accounting to each of P&U and
KH of its expenditures for such research work shall fairly allocate costs to
each Collaboration and no such costs shall be duplicated.
3.2 Selection of Compounds for Development. [ * ]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
-8-
<PAGE> 3
[*]. P&U and KH shall then agree upon a clinical development plan for any
Compound jointly selected for development; provided that P&U shall control the
development of P&U Compounds, and KH shall control the development in [*] of KH
and Geron Compounds. The preclinical and clinical development of Compounds
jointly selected by P&U and KH shall be coordinated and performed in accordance
with the development plan separately agreed to by P&U and KH for that Compound.
KH's participation in such development activities shall be conducted through
the JDC under the KH Agreement. Geron shall have the development rights with
respect to such Compounds as set forth in the KH and P&U Agreements. The costs
of all preclinical and clinical costs specifically required by the Japanese
Ministry of Health and Welfare (and its equivalent in any country in [*] where
P&U and KH share marketing rights) shall be shared in proportion to P&U's and
KH's marketing rights for such Product in Japan (and such other countries).
Any Candidate Drug selected for development by either KH or P&U, or by KH and
P&U jointly, shall be subject to the terms of the KH and P&U Agreements.
3.3 Termination of Selected Compounds. [*]. If such Candidate Drug
is comprised of a P&U Compound and KH had elected to develop such Compound as
provided in Section 3.2 above, P&U and KH shall negotiate in good faith the
terms under which KH may continue to develop such Compound for sale in the [*].
If such Candidate Drug is comprised of a KH Compound and P&U had elected to
develop such Compound as provided in Section 3.2 above, P&U and KH shall
negotiate in good faith the terms under which P&U may continue to develop such
Compound for sale worldwide.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
-9-
<PAGE> 4
4. LICENSES.
4.1 To KH from P&U. Except as otherwise provided in Section 9.2
below, P&U hereby grants to KH and its Affiliates a royalty-free license under
the P&U Technology to use, import, offer to sell, sell, and have sold Products
containing P&U Compounds [*]. Such licenses shall be subject to the royalty and
other provisions set forth in the KH Agreement. For the purpose of the royalty
calculation under the KH Agreement, such P&U Technology shall be deemed to be
Geron Technology.
4.2 To P&U from KH. Except for KH's rights under Article 9 below
to sell in [*] and to [*] Products in the [*] and subject and Geron's right to
co-promote in the United States as set forth in the P&U Agreement, KH hereby
grants P&U and its Affiliates an exclusive, royalty-free license under KH
Technology to make, have made, use, import, offer to sell, sell, and have sold
Products containing KH Compounds in [*]. Such licenses shall be subject to
the royalty and other provisions set forth in the P&U Agreement. For the
purpose of the royalty calculation under the P&U Agreement, such KH Technology
shall be deemed to be Geron Technology.
4.3 Sublicenses. Neither KH nor P&U shall have the right to
sublicense any of its rights under Section 4.1 and 4.2, respectively, except to
the extent each such party is expressly permitted to sublicense its respective
rights under the KH Agreement or the P&U Agreement or as otherwise agreed in
writing.
4.4 Third Party Licenses. The costs of obtaining any Third Party
Licenses approved by the JRC under each of the KH Agreement and the P&U
Agreement and the payment of any fees or royalty obligations under each such
Third Party License shall be borne by Geron, P&U and KH in [*].
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 5
5. MANUFACTURING.
5.1 Supply Rights. Unless P&U and KH otherwise agree on a
case-by-case basis: (a) P&U shall have the right to manufacture all of its
requirements of Products containing P&U and Geron Compounds, and shall have the
right and obligation to manufacture and supply all of KH's requirements of
Products containing P&U Compounds; and (b) KH shall have the right to
manufacture all of its requirements of Products containing KH Compounds and
Geron Compounds, and shall have the right and obligation to manufacture and
supply all of P&U's requirements of Products containing KH Compounds.
5.2 Bulk Supply. KH may elect to have P&U supply Products
containing P&U Compounds as bulk active substance and arrange for the finishing
to be conducted by itself or a third party. P&U may elect to have KH supply
Products containing KH Compounds as bulk active substance and arrange for the
finishing to be conducted by itself or a third party.
5.3 Transfer Price. At the time of negotiating the supply
agreements referred to in Section 5.4 below, KH and P&U shall agree upon
commercially reasonable prices for the supply of Products under the respective
supply agreement. Such prices shall be fixed unit prices, subject to annual
adjustments, but shall not exceed [*].
5.4 Supply Agreements. Upon commencement of [*] clinical
trials for a Product, KH and P&U shall commence to negotiate in good faith
written supply agreements for the manufacture and supply of the applicable
Product. Such supply agreements shall be consistent with the terms of this
Agreement and shall contain commercially reasonable terms, including:
(a) all Products shall be manufactured in compliance with
all good manufacturing practices required by the FDA
and other applicable regulatory agencies; and
(b) all Products shall comply with all agreed upon
specifications.
5.5 Process Scaleup. To the extent it has the right to
manufacture Products, each of P&U and KH shall be responsible, at its own
expense, for process development, scale-up, design, construction, validation,
and regulatory licensing of its manufacturing facilities.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 6
6. DISCLOSURE OF KNOWHOW.
6.1 Scope of Disclosures. Each of KH and P&U shall disclose and
make available to each of them from time to time (and shall permit Geron to so
disclose and make available) each of its respective Knowhow embodying:
(a) Information about the Compounds it selected for
development [*]; and
(b) All other preclinical, clinical, regulatory, and
manufacturing Information relating to each Candidate
Drug which is either jointly developed by KH and P&U
or for which they will share marketing or promotion
rights as provided herein.
6.2 Delayed Disclosure about Compounds. P&U and KH shall not be
required to disclose (nor shall they require Geron to disclose) Information
about P&U Compounds and KH Compounds, respectively, until such time as
described in Section 3.2 above. Moreover, such disclosure restrictions shall
similarly apply to all Information concerning all compounds contained in any
library Controlled by P&U or KH, synthesized by P&U or KH and otherwise
submitted by P&U or KH to Geron for screening with written confirmation
thereof.
6.3 Confidentiality; Exceptions. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the parties agree
that, for the term of this Agreement and for [*] thereafter (or such
longer period as may be applicable under either the KH or P&U Agreement), the
receiving party shall keep confidential and shall not publish or otherwise
disclose or use for any purpose other than as provided for in this Agreement
any Information and other information and materials furnished to it by the
other party pursuant to this Agreement (collectively, "Confidential
Information"), except to the extent that it can be established by the receiving
party that such Confidential Information:
(a) was already known, other than under an obligation of
confidentiality, to the receiving party at the time of disclosure by
the other party;
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 7
(b) was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the
receiving party;
(c) became generally available to the public or otherwise
part of the public domain after its disclosure and other than through
any act or omission of the receiving party in breach of this
Agreement;
(d) was disclosed to the receiving party, other than
under an obligation of confidentiality, by a Third Party who had no
obligation to the disclosing party not to disclose such information to
others; or
(e) was independently developed by the receiving party
without the use of the other party's Confidential Information.
6.4 Authorized Disclosure. Each party may disclose the other's
Confidential Information to the extent such disclosure is reasonably necessary
in filing or prosecuting patent applications, prosecuting or defending
litigation against Third Parties, complying with applicable governmental
regulations or conducting preclinical or clinical trials or otherwise in the
development and commercialization of Products hereunder, provided that if a
party makes any such disclosure of the other party's Confidential Information
it will give reasonable advance notice to the other party of such disclosure
requirement and, except to the extent inappropriate or impractical, will use
its best efforts to secure confidential treatment of such Confidential
Information required to be disclosed.
7. ADVERSE DRUG EVENTS. The parties recognize that P&U and KH, as holder
of the NDAs, may be required to submit information and file reports to various
governmental agencies on compounds under clinical investigation, compounds
proposed for marketing, or marketed drugs. Consequently, each party agrees to
furnish each other party such information it may reasonably request or need to
comply in a timely manner with all of its legal reporting obligations and
internal operating procedures. Upon the commencement of clinical development
of each Candidate Drug, the parties shall agree upon appropriate procedures to
implement such reporting obligations.
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<PAGE> 8
8. ROYALTY PAYMENTS. P&U shall pay all royalties payable to
Geron on the sale of Products in the [*], including all Products [*] by KH.
Royalties to Geron shall not be payable by P&U on sales of Products to KH for
its resale in [*] under co-marketing or other arrangements where such resales
by KH are not booked as P&U sales. KH's sales of such Products shall be
subject to royalties under the KH Agreement.
9. [*] AND [*] OF PRODUCTS.
9.1 [*]. With respect to [*], P&U and Kyowa Hakko will each have
[*]. No later than the commencement of [*] testing of any Product, KH and
P&U shall negotiate and set forth in a separate agreement commercially
reasonable terms governing such [*] rights.
9.2 [*]. With respect to the [*], P&U and KH will, not later than
the commencement of [*] in the [*] for a Product, meet with one another to
determine in good faith how best to commercialize the Product in each country
of the [*], taking into account the dynamics of the market and the capabilities
of the parties. If an agreement cannot be reached regarding the appropriate
commercialization approach within [*] after notice from either KH or P&U
calling for such discussion, [*]; provided that, if P&U and KH agree that it is
beneficial to both of them, KH shall be provided with the opportunity to
participate in the commercialization of the [*], [*], [*], and/or [*] markets
for Products containing P&U Compounds on terms and conditions to be negotiated
in good faith.
9.3 [*]. With respect to the [*], Kyowa Hakko will have the right
to [*] all Products on a [*] Kyowa Hakko basis. KH shall elect such
rights on a Product-by-Product basis by notice to P&U no later than 60 days
after
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 9
P&U notifies KH of the commencement of [*] clinical testing (or a [*], if [*]
will not be conducted) of such Product. If KH so elects to [*] any Product, the
parties (or P&U's local Affiliates) shall promptly enter into a separate
agreement containing the essential terms set forth in EXHIBIT 9.3 to this
Agreement and such modifications or other terms as the parties may agree are
appropriate for the co-promotion of a particular Product. While some additional
terms may be required to be included to implement a co-promotion arrangement for
a particular Product and to reflect the then existing market conditions, the
parties agree that Exhibit 9.3 contains all of the essential terms of such a
co-promotion agreement. The parties shall make such amendments to such terms as
may be required under then prevailing marketing conditions in such countries.
KH shall also reimburse P&U for [*] of the costs incurred to conduct trials
which form the basis for submitting NDAs to obtain the right to sell each
co-promoted Product in the [*].
9.4 Trademarks. All Products sold by P&U (except for Products
containing KH Compounds co-marketed with KH in Japan) and all Products
containing P&U Compounds sold by P&U or KH in a given country shall be
identified and advertised using such trademarks as P&U shall select, own, or
otherwise acquire. The trademarks for Products containing KH Compounds
co-marketed with KH in Japan shall be determined as shall be provided in the
co-marketing agreement referred to in Section 9.1 above. All Products sold by
KH in the [*] (except Products containing P&U Compounds) shall be identified
and advertised using such trademarks as KH shall select, own, or otherwise
acquire.
10. TERM AND TERMINATION.
10.1 Term. This Agreement shall commence as of the Effective Date
and, shall continue in effect until the first to occur of the expiration or
termination of the KH Agreement or the P&U Agreement. The licenses granted to
KH under Section 4.1 and to P&U under Section 4.2 shall survive expiration or
termination of the P&U Agreement and KH Agreement, respectively.
*Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 10
10.2 Termination for Breach. If KH or P&U materially breaches this
Agreement at any time, which breach is not cured within ninety (90) days of
written notice thereof from the non-breaching party, the non-breaching party
may elect to terminate the rights granted to the breaching party under this
Agreement. Such termination shall not release the breaching party from any
obligations hereunder incurred prior thereto nor prejudice any other rights or
remedies of the non-breaching party. The non-breaching party shall have the
right to continue the license granted to it under Article 4 above.
10.3 Surviving Rights. The obligations and rights of the parties
under Articles 6.3, 6.4, 7, 10, and 11 of this Agreement will survive
termination.
10.4 Accrued Rights, Surviving Obligations. Termination,
relinquishment, or expiration of this Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either party
prior to such termination, relinquishment, or expiration, including damages
arising from any breach hereunder. Such termination, relinquishment, or
expiration shall not relieve either party from obligations which are expressly
indicated to survive termination or expiration of the Agreement.
11. INDEMNIFICATION, DISCLAIMERS AND LIMITATIONS.
11.1 P&U Indemnification. P&U shall indemnify and hold KH and its
Affiliates harmless from and against any and all liability, damage, loss, cost
(including reasonable attorneys' fees), and expense resulting from any claim of
bodily injury or property damage: (a) relating to the development, manufacture,
use, distribution, or sale of any Product by P&U, its Affiliates or
sublicensees, or (b) due to the negligence or willful misconduct of P&U, its
Affiliates or sublicensees, or their employees or agents.
11.2 KH Indemnification. KH shall indemnify and hold P&U and its
Affiliates harmless from and against any and all liability, damage, loss, cost
(including reasonable attorneys' fees), and expense resulting from any claim of
bodily injury or property damage: (a) relating to the development, manufacture,
use, distribution, or sale of any Product by KH, its
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<PAGE> 11
Affiliates or sublicenses, or (b) due to the negligence or willful misconduct
of KH, its Affiliates or sublicensess, or their employees or agents.
11.3 Employees. Each party shall indemnify and hold the other
party harmless, and hereby forever releases and discharges the other party,
from and against all claims, demands, liabilities, damages and expenses
(including attorney's fees) arising out of personal injury (including death) or
property damage incurred or suffered by employees or consultants of the
indemnifying party, its Affiliates or contractors in the performance of or
under this Agreement, except to the extent caused by the sole negligence,
recklessness or willful misconduct of such other party, its employees or
agents.
11.4 Claim Procedure. Upon obtaining knowledge of the institution
of any action, proceeding, or other claim or demand of indemnity hereunder, the
party seeking indemnification (the "Indemnified party") shall promptly notify
in writing the other party thereof (the "Indemnifying party"). If such claim or
demand relates to a claim or demand asserted by a Third Party, the Indemnifying
party shall have the right at its expense to employ counsel to defend such
claim or demand and the Indemnified party shall have the right, but not the
obligation, at its expense to participate in the defense of any such claim or
demand. So long as the Indemnifying party is defending such claim or demand in
good faith, the Indemnified party will not settle such claim or demand without
the Indemnifying party's consent. The Indemnified party shall make available to
the Indemnifying party all records and other materials reasonably required by
it in contesting a claim or demand asserted by a Third Party against the
Indemnified party and shall cooperate in the defense thereof.
11.5 Limited Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE, NONE OF THE PARTIES (OR THEIR AFFILIATES) WILL BE
LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS.
11.6 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO
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<PAGE> 12
ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS, OR OTHER SUBJECT MATTER OF THIS
AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND NON-INFRINGEMENT WITH RESPECT TO ALL OF THE FOREGOING.
12. PATENT ENFORCEMENT AND DEFENSE; DEFENSE AGAINST CLAIMS OF INFRINGEMENT
The rights and obligations of the parties with respect to the
enforcement of Geron Patents, KH Patents, and P&U Patents and the defense
against claims of patent infringement made by Third Parties as a result of the
manufacture, use or sale of Products (collectively "Actions"), shall be
determined as follows:
(a) with regard to Actions anywhere outside the [*] in respect
to Products sold exclusively by P&U, as specified in the P&U Agreement;
(b) with regard to Actions in the [*] in respect to Products
sold exclusively by KH, as specified in the KH Agreement;
(c) with regard to Actions in the [*] in respect to Products
sold exclusively by P&U, as specified in the P&U Agreement;
(d) with regard to Actions in respect to any Product sold by
P&U and KH under a [*] agreement, as specified in that [*] agreement;
(e) with regard to Actions in respect to any Product
[*] by P&U and KH, as follows:
(i) if the Product comprises a P&U Compound or the
Action is in [*], as specified in the P&U Agreement; and
(ii) if the Product comprises a Geron Compound or KH
Compound and the Action is in [*], as specified in the KH Agreement; and
(f) with regard to Actions anywhere outside the [*] in respect
to any other matter, as specified in the P&U Agreement, and with regard to
Actions in the [*], as specified in the KH Agreement;
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 13
provided, however, that, with respect to Actions under subparagraphs (e) and
(f), the parties agree to cooperate with one another, to participate in such
action at their own expense, and to apportion the costs, rewards and/or damages
of any such Action among the parties in an equitable manner that reflects the
financial benefits received or expected to be received by each party as a
result of such Action and the activities underlying the same.
13. MISCELLANEOUS.
13.1 Assignment to Non-Affiliates; Sale or Merger. Neither KH,
Geron nor P&U shall have the right to assign any or all of its rights under
this Agreement to any Third Party without the prior written consent of the
other parties. Notwithstanding the foregoing, but, in the case of Geron,
subject to the terms of Section 17.5 of the P&U Agreement, any party may assign
all of its rights or obligations under this Agreement without the other party's
consent (i) to any Affiliate provided that such Affiliate is also assigned the
related business and assets which are the subject of this Agreement and (ii) in
connection with the sale of all or substantially all of the assigning party's
related business, whether by merger, stock sale, or other transaction; provided
that in any case, such assignment shall not relieve such party of its
responsibilities for performance of its obligations under this Agreement. This
Agreement shall survive any merger of either party with or into another party.
13.2 Retained Rights. Except as expressly set forth in this
Agreement, nothing in this Agreement shall limit in any respect the right of
either party to conduct research and development and market products outside
the Field using such party's Technology, and no license to use the other
party's Technology to do so is granted herein by implication.
13.3 Force Majeure. Neither party shall lose any rights hereunder
or be liable to the other party for damages or losses or otherwise be deemed to
be in default on account of failure of performance by the defaulting party if
the failure is occasioned by government action, war, fire, earthquake,
explosion, flood, strike, lockout, embargo, act of God, or any other similar or
dissimilar cause beyond the control of the defaulting party; provided, that the
party claiming
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<PAGE> 14
force majeure has exerted all reasonable efforts to avoid or remedy such force
majeure, provided, however, that in no event shall a party be required to
settle any labor dispute or disturbance.
13.4 Further Actions. Each party agrees to execute, acknowledge
and deliver such further instruments, and to do all such other acts as may be
necessary or appropriate to carry out the purposes and intent of this
Agreement.
13.5 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by facsimile
transmission (receipt verified), 5 business days after mailed by registered or
certified mail (return receipt requested), postage prepaid, or sent by express
courier service to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice, provided that notices
of a change of address shall be effective only upon receipt thereof:
If to KH, addressed to: Kyowa Hakko Kogyo Co., Ltd., 1-6-1 Ohtemachi,
Chiyoda-Ku, Tokyo, Japan; Attention: General Manager, Licensing & International
Development; Telephone: +81 3 3282 0037; Facsimile: +81 3 3282 0031.
If to P&U, addressed to: P&U & Upjohn S.p.A., Via Robert Koch, 1.2,
20152 Milano, Italy; Attention: Managing Director; Telephone: +39 2 4838 2023;
Facsimile: +39 2 4838 2033; with a copy to: Wiggin & Dana, 301 Tresser Blvd.,
Stamford, Connecticut 06901; Attention: James F. Farrington, Jr.; Telephone:
(203) 363-7614; Facsimile: (203) 363-7676.
If to Geron, addressed to: Geron Corporation, 230 Constitution Drive,
Menlo Park, CA 94025; Attention: President; Telephone: 415-473- 7700;
Facsimile: 415-473-7750; with a copy to: Venture Law Group, 2800 Sand Hill
Road, Menlo Park, CA 94025; Attention: Joshua L. Green; Telephone:
415-854-4488; Facsimile: 415-233-8386.
13.6 Governing Law. This Agreement shall be governed by the laws
of the State of New York, U.S.A., as such laws are applied to contracts entered
into and to be performed within
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<PAGE> 15
such state notwithstanding the provisions governing conflict of laws under such
laws to the contrary.
13.7 Dispute Resolution.
(a) General. The parties recognize that disputes as to
certain matters may from time to time arise during the term of this Agreement
which relate to either party's rights or hereunder. It is the objective of the
parties to establish procedures to facilitate the resolution of disputes
arising under this Agreement in an expedient manner by mutual cooperation and
without resort to litigation. To accomplish this objective, the parties agree
to follow the procedures set forth in this Section 13.7, if and when a dispute
arises under this Agreement.
(b) Prior Negotiation. All disputes hereunder will be
resolved as provided in this Section 13.7. Either party may, by written notice
to the other, have such dispute referred to their respective chief executive
officers, for attempted resolution by good faith negotiations within twenty
(20) business days after such notice is received. In the event the designated
executive officers are not able to resolve such dispute within sixty (60)
business days after such notice, either party may at anytime thereafter invoke
the provisions of Section 13.7(c).
(c) Arbitration. Any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, will be finally settled
by binding arbitration in New York, New York U.S.A. under the Commercial
Arbitration Rules of the American Arbitration Association, by three arbitrators
appointed in accordance with said rules. Each party shall select one such
arbitrator, and the two arbitrators so chosen shall select the third
arbitrator. The arbitrators shall apply New York law, without reference to
rules of conflicts or law or rules of statutory arbitration, to the resolution
of any dispute. Judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. Notwithstanding the
foregoing, the parties may apply to any court of competent jurisdiction for
preliminary or interim equitable relief to compel arbitration in accordance
with this Section 13.7, or to resolve any disputes primarily relating to patent
matters (including, without limitation, matters relating to the validity, scope
or ownership of patents) without breach of this arbitration provision.
13.8 Waiver. All waivers must be in writing signed by authorized
representatives of both parties. Except as specifically provided for herein,
the waiver from time to time by either of
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<PAGE> 16
the parties of any of their rights or their failure to exercise any remedy
shall not operate or be construed as a continuing waiver of same or of any
other of such party's rights or remedies provided in this Agreement.
13.9 Severability. If any term, covenant or condition of this
Agreement or the application thereof to any party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then (i) the remainder of this
Agreement, or the application of such term, covenant, or condition to parties
or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term, covenant, or
condition of this Agreement shall be valid and be enforced to the fullest
extent permitted by law; and (ii) the parties hereto covenant and agree to
renegotiate for a period of ninety (90) days after such provision is held to be
invalid or unenforceable any such term, covenant, or application thereof in
good faith to provide a reasonably acceptable alternative to the term,
covenant, or condition of this Agreement or the application thereof that is
invalid or unenforceable, it being the intent of the parties that the basic
purposes of this Agreement are to be effectuated.
13.10 Entire Agreement. This Agreement sets forth all the
covenants, promises, agreements, warranties, representations, conditions, and
understandings between the parties hereto and supersedes and terminates all
prior agreements and understandings, other than those pertaining to
confidential information between the parties, the purchase of Geron stock by
either P&U or KH, the P&U Agreement or the KH Agreement. There are no
covenants, promises, agreements, warranties, representations, conditions, or
understandings, either oral or written, between the parties other than as set
forth herein. No subsequent alteration, amendment, change, or addition to this
Agreement shall be binding upon the parties hereto unless reduced to writing
and signed by the respective authorized officers of the parties.
[NEXT PAGE IS THE SIGNATURE PAGE]
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<PAGE> 17
IN WITNESS WHEREOF, the parties have executed this
Collaboration Agreement in duplicate originals by their proper officers as of
the date and year first above written.
GERON CORPORATION
By: /s/ Ronald W. Eastman
----------------------------
Title: President
-------------------------
KYOWA HAKKO KOGYO CO., LTD.
By: /s/ H. Yasui
----------------------------
Title: Senior Managing Director
-------------------------
PHARMACIA & UPJOHN S.P.A.
By: /s/ Lamberto Andreotti
----------------------------
Title: Managing Director
-------------------------
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<PAGE> 18
EXHIBIT 2
DEFINITIONS
The following terms shall be defined as follows for the
purposes of this Agreement:
1. "Affiliate" means an entity that, directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with another entity. For purposes of this definition,
"control" means the direct or indirect ownership of (a) at least 50% or, if less
than 50%, the maximum percentage as allowed by applicable law, of the
outstanding voting securities of such entity or (b) at least 50% of the decision
making authority of such entity.
2. "Asian Territory" means [*].
3. "Candidate Drug" means a compound suitable for
commercial development for use in the Field that has been selected in
accordance with Section 2.6 of P&U Agreement for further pre-clinical and
clinical development by P&U, or selected under Section 3.5 of the KH Agreement
for further preclinical and clinical development by KH.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 19
4. "COGS" shall mean the sum of the following costs to
the extent allocable to a Product for the particular period during which any
royalty is calculated (net of any intercompany transfer pricing): [*]. COGS
shall exclude the following: [*]. COGS shall be calculated in a manner
consistent with generally accepted accounting principles used in the place of
manufacture, consistently applied. The methodology to be used in making the
allocations referred to above shall be consistent with methodology for similar
products and shall be consistent from year to year.
5. "Control" means, for purposes of this Agreement
(other than the definition of Affiliate), possession of the ability to grant a
license or sublicense without violating the terms of any agreement or other
arrangement with any Third Party. Rights which may be acquired by the exercise
of an option that would increase the royalty or other payment obligation of the
party exercising such option shall not be Controlled by such party.
6. "Effective Date" shall have the meaning set forth in
Section 19.14 of the P&U Agreement.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 20
7. "Field" means the inhibition of the enzyme telomerase
for the treatment of cancer in humans, excluding treatments based on antisense,
ribozyme, or gene therapy-based telomerase inhibitors.
8. "Geron Compound" means a compound that [*] In the
event a Geron Compound is identical to a P&U Compound or a KH Compound, then
that compound shall be deemed, for purposes of this Agreement, to be a Compound
of the party that identified or caused to be identified (i.e., by submitting for
screening) that compound as a telomerase inhibitor. For the purpose of this
Section 8 and Sections 13 and 19, (i) a compound is not a telomerase inhibitor
unless it has a [*] as tested in the primary and tertiary assays referred to in
the Research Plan as defined in the P&U Agreement) of less than [*] and
[*] of at least [*] when tested in the secondary biochemical assays referred
to in the Research Plan as defined in the P&U Agreement), and (ii) two
compounds are "Chemically Equivalent" if (a) the second compound is an isomer,
salt, or ester of the first compound or (b) the second compound results from a
chemical synthesis or compound acquisition program based on the first compound
or on SAR data relating to the first compound, and the second compound does not
have a [*] as tested in the primary and tertiary assays referred to in the
Research Plan as defined in the P&U Agreement) of at least [*] than the first
compound.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 21
9. "Geron Knowhow" means Information that (i) Geron
discloses to P&U under the P&U Agreement or to KH under the KH Agreement, or
(ii) is Controlled by Geron or its Affiliates during the term of this
Agreement, including Information resulting from the Research. Geron Knowhow
excludes Geron Patents.
10. "Geron Patent" means a Patent which claims a process,
method, apparatus, composition of matter, compound, chemical, material, or
article of manufacture useful in the Field (or the discovery, development,
manufacture and clinical use of compounds having potential activity in the
Field), which Patent is Controlled by Geron or its Affiliates during the term
of this Agreement, including Geron's undivided interest in any Patent jointly
owned with KH or P&U.
11. "IND" means an Investigational New Drug application
filed with the U.S. Food and Drug Administration or the comparable application
in a Major Country.
12. "Information" means techniques; inventions;
practices; methods; knowledge; knowhow; skill; experience; test data,
including, without limitation, pharmacological, toxicological, and clinical
test data, analytical and quality control data, having application in the
Field.
13. "KH Compound" means a compound useful in the Field
that [*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 22
[*] In the event a KH Compound is identical to a P&U Compound or a Geron
Compound, then that compound shall be deemed, for purposes of this Agreement, to
be a Compound of the party that first identified or caused to be identified
(i.e., by submitting for screening) that compound as a telomerase inhibitor.
14. "KH Knowhow" means Information which (i) Kyowa Hakko
discloses to Geron under the KH Collaboration or (ii) is Controlled by Kyowa
Hakko or its Affiliates during the term of this Agreement. KH Knowhow excludes
KH Patents.
15. "KH Patent" means a Patent which claims a process,
method, apparatus, composition of matter, compound, chemical, material, or
article of manufacture useful in the Field (or the discovery, development,
manufacture and clinical use of compounds having potential activity in the
Field), which Patent is Controlled by KH or its Affiliates during the term of
this Agreement, including KH's undivided interest in any Patent jointly owned
with Geron.
16. "KH Technology" means the KH Knowhow and KH Patents,
collectively.
17. "Major Country" means [*].
18. "Patent" means any patent application or issued
patent, including any extension, registration, confirmation, continuation,
continuation-in-part, reissue, re-examination, renewal, supplementary
protection certificate or the like thereof in any country.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 23
19. "P&U Compound" means a compound useful in the Field
that [*]. In the event a P&U Compound is identical to a Geron Compound or a KH
Compound, then that compound shall be deemed, for purposes of this Agreement, to
be a Compound of the party that first identified or caused to be identified
(i.e., by submitting for screening) that compound as a telomerase inhibitor.
20. "P&U Knowhow" means Information that (i) P&U
discloses to Geron under the P&U Agreement, or (ii) is Controlled by P&U or its
Affiliates during the term of this Agreement, including Information resulting
from the Research. P&U Knowhow excludes P&U Patents.
21. "P&U Patent" means a Patent which covers a method,
apparatus, compound, chemical, material, or article of manufacture useful in
the Field (or the discovery, development, manufacture and clinical use of
compounds having potential activity in the Field), which Patent is Controlled
by P&U or its Affiliates during the term of this Agreement, including P&U's
undivided interest in any Patent jointly owned with Geron.
22. "P&U Technology" means the P&U Knowhow and P&U
Patents, collectively.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
-6-
<PAGE> 24
23. "Product" means any pharmaceutical product or
preparation that comprises a Compound having activity in the Field selected for
development in accordance with Section 2.6 of the P&U Agreement, or in
accordance with Section 3.5 of the KH Agreement, that utilizes or was made as a
result of utilizing Geron Technology, KH Technology or P&U Technology.
24. "Research" shall have the meanings set forth in the
KH Agreement and P&U Agreement, respectively.
25. "Territory" means the entire world.
26. "Third Party" means any person or entity other than
Geron, P&U, KH, or an Affiliate of Geron, P&U, or KH.
27. "Third Party License" means a license between a party
to this Agreement and any Third Party.
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<PAGE> 25
EXHIBIT 9.3
CO-PROMOTION TERMS
The following terms shall be contained in separate co-promotion
agreements that shall be entered into pursuant to Section 9.3 of the Agreement.
In this Exhibit 9.3, "P&U" shall refer to the Pharmacia & Upjohn Affiliate in
the [*], which shall be a party to the co-promotion agreement.
1. Direct Sales Forces. The parties shall co-promote the Products
in the [*] using their own direct sales forces and a centrally coordinated
marketing approach developed by P&U. The Products shall be sold under P&U's
trademark with identical packaging and promotional materials.
2. Manufacturing, Distribution and Pricing. P&U will be solely
responsible for manufacturing, physically distributing, shipping, booking
sales, and invoicing all Products. P&U shall also be solely responsible for
determining the sales price and all pricing related strategies.
3. Account Allocation. Although P&U has the primary marketing
role, KH shall have the right to deploy a co-promotion sales force. Such KH
sales force shall comprise such number of sales representatives as may be
required to effectively perform the level of detailing and other promotional
activities required to achieve [*] the sales in [*], which the parties now
intend will require having [*] the total number of direct sales representatives
detailing and promoting the Products. The parties agree to allocate accounts
in an unbiased manner based on objective, quantifiable information and market
research data with the objective of allocating to each party accounts from
which each such party will have the opportunity to maximize sales. KH
recognizes that P&U's representatives may also call on the same accounts to
promote P&U's other Products, and may also promote the Products. However, the
representatives will coordinate their efforts to optimize the selling effort on
each account.
4. Sales and Distribution. Unless otherwise agreed, P&U shall
have the sole responsibility with respect to the following:
4.1 Booking sales for and distribution of Products. KH
shall refer orders to P&U.
4.2 Handling all returns of Products. Any Products
returned to KH shall be shipped to the facility responsible for shipment of
Products in United States to the attention of the Returned Goods Department or
another location as may be designated by P&U.
4.3 Handling all recalls of Products. KH will make
available to P&U, upon request, all of its pertinent records which P&U may
reasonably request to assist P&U in effecting any recall.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 26
4.4 Handling all aspects of order processing, invoicing
and collection, Production distribution, warehousing, inventory and receivable,
and collection of data of sales to hospitals and other end users.
4.5 Handling all other customer service related
functions.
5. Marking and Promotional Materials. All marketing and
promotional materials related to the Products shall be prepared by P&U, and all
marketing and promotional platforms and campaigns shall be subject to review
and approval by P&U. P&U shall be entitled to select any Third Parties
involved in the preparation of such materials. With respect to written and
visual promotional or educational materials, to the extent such materials
identify or otherwise make reference to either of the parties. KH and P&U
shall both be presented and described as having participated in the development
and commercialization of such Product, as permitted by applicable laws and
regulations. All documentary information, promotional material and oral
presentations (where practical) regarding the detailing and promoting of
Products shall state this arrangement and display the names and logos of KH and
P&U.
6. Training Program. P&U shall develop training programs
relating to Products for the sales forces of each party. The parties agree to
utilize such training programs on an ongoing basis to assure a consistent,
focused promotional strategy. The initial training shall be carried out at a
time which is mutually acceptable to the parties, and which is prior to but
reasonably near the date on which the first NDA approval is expected. As
additional members are added to the parties' respective sales forces, training
will be given to groups of the newly selected members. While P&U will be
responsible for providing such training, KH shall pay all costs and expenses
for its sales representatives, including salaries, and travel expenses.
7. Compliance with Laws. KH shall comply with all applicable
laws and regulations, and drug regulatory agency policies and guidelines
relating to the promotion of the Product.
8. Direct Sales. Each party shall maintain its own direct sales
force of suitably qualified and trained professional representatives. Such
representatives shall be employees or independent contractors of such party.
KH's sales force shall comprise such number of sales representative that equals
approximately [*] the total number of KH and P&U sales representatives
Detailing (as defined below) and promoting the Productions. Neither party
shall have any authority or responsibility for the hiring, firing, compensation
or employee benefits of the other party's sales force personnel. Each party
shall pay all costs and expenses required to maintain its own sales force,
including salaries, bonuses, benefits, car allowances, and travel expenses.
KH's compensation set forth below is based on KH's compliance with the
foregoing requirements. In all material respects (other than as to employment
matters), P&U shall treat the KH and P&U representatives as a combined sales
force and shall provide the KH representatives with the same support and
assistance it provides its own representatives Detailing and promoting the
Products.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 27
9. Promotional Plan. P&U, in consultation with KH, shall
establish a marketing and promotional plan each year (the "Promotional Plan").
The Promotional Plan shall include the general promotional activities planned
for such year, and the allocation of specific responsibilities of the sales
forces of P&U and KH. Such specific responsibilities shall include the
expected level of detailing and another promotional activities by KH, and an
allocation of the accounts and markets to which each party shall focus its
detailing efforts.
10. Detail Effort. KH shall detail the Products as required by the
Promotional Plan using its qualified direct sales force personnel. The
detailing effort shall be shared in accordance with the allocation described in
Paragraph 3 above. "Detailing" shall mean a face-to-face meeting with
individual physicians or other potential prescribers of the Products where the
Products and its therapeutic use are presented in the [*]. KH shall allow P&U's
sales management personnel from time to time to accompany its sales
representatives on detail calls to monitor their performance and facilitate
training.
11. Co-Promotion Compensation. KH shall receive an annual fee
equal to [*] the [*], which shall be determined as follows:
11.1 The [*] shall equal [*] in the co-promotion county,
less:
(a) COGS,
(b) Distribution Expenses,
(c) Royalties, and
(d) Marketing Costs.
11.2 Each of the foregoing terms shall be defined as
follows:
(a) "COGS" shall be as defined in the Agreement.
(b) "Distribution Expenses" means the [*]
(c) "Royalties" means the [*]
(d) "Marketing Costs" means the [*]
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 28
[*].
(e) "Allocable Overhead" means [*].
All accounting and allocation of costs will be consistent with the
costs attributed to P&U product management as measured in P&U's standard
accounting system for activities directly related to products sold.
12. Adverse Drug Events. The parties recognize that P&U, as the
holder of the NDA, may be required to submit information and file reports to
various governmental agencies on compounds under clinical investigation,
compounds proposed for marketing, or marketed drugs. Information must be
submitted at the time of initial filing for investigation use in humans and at
the time of a request for market approval of a new drug. In addition,
supplemental information must be provided on compounds at periodic intervals
and adverse drug experiences must be reported at more frequent intervals
depending on the severity of the experience. Consequently, each party agrees
to follow P&U's standard operating procedures ("SOPs") for the reporting of
adverse events in effect from to time to time and, to the extent not
inconsistent with the SOPs, the following:
12.1 provide to the other for initial and or periodic
submission to government agencies significant information on the drug from
preclinical laboratory, animal toxicology and pharmacology studies, as well as
adverse drug experience reports from clinical trials and commercial experiences
with the compounds;
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
<PAGE> 29
12.2 in connection with investigational drugs, report to
the other within three (3) days of the initial receipt of a report of any
unexpected or serious adverse experience with the drug, or sooner if required
for either party to comply with regulatory requirements; and
12.3 in connection with marketed drugs, report to the
other within five (5) business days of the initial receipt of a report of any
adverse experience with the drug that is serious and unexpected or sooner if
required for either party to comply with regulatory requirements. Serious
adverse experiences mean any experience that suggests a significant hazard,
contraindication, side effect or precaution, or any experience that is fatal or
life threatening, is permanently disabling, requires or prolongs inpatient
adverse experience is one not identified in nature, specificity, severity or
frequency in the current investigator brochure of the U.S. labeling for the
drug. Each party also agrees that if it contracts with a Third Party for
research to be performed by such Third Party on the drug, that party agrees to
require such Third party to report to contracting party the information set
forth in subparagraphs 12.1, 12.2 and 12.3 above.
13. Other Terms.
13.1 P&U shall grant KH such rights under P&U's trademarks
for the Products as shall be necessary to perform the co-promotion activities.
13.2 KH may not conduct, directly or indirectly, any
clinical trials of the Products. All required Phase IV and marketing trials
shall be conducted by P&U.
13.3 To the extent required in any country, P&U shall
grant such rights under its NDA and other registrations as may be required for
KH to conduct its co-promotional activities.
13.4 P&U shall have the right to terminate the
co-promotion agreement if KH fails to remedy a material breach within a
reasonable time. P&U may also terminate the co-promotion agreement if its
permanently withdraws the Products from the market in the United Kingdom or
Germany.
13.5 Each party shall have the right to inspect the
records of the other party relevant to monitoring the other party's
performance, including KH's detailing records and P&U's costs records relating
to the determination of the Net Marketing Margin.
13.6 Such additional or modified terms as may be required
to comply with any legal requirements of the United Kingdom or Germany.
<PAGE> 30
RESOURCE ALLOCATION: Both parties will allocate resources, including FTEs,
necessary to advance the collaboration according to the timelines agreed upon.
The distribution of allocated FTEs to different activities will be proposed by
the Project Team on the basis of experimental activities required to accelerate
the discovery process, and must be approved by the Joint Research Committee.
Geron will dedicate appropriate resources, including FTEs according to Section
2.3 of the License and Research Agreement. During the First year of the
Research Term Geron will dedicate resources equivalent to a minimum of 17 FTEs
and 50% of the expenses associated with sponsored research payments. In
subsequent years of the Research Term, the JRC may reallocate the proportion of
Geron FTEs and sponsored research payments, if necessary. P&U will dedicate
not less than 7 FTEs for each year of the Agreement.
<PAGE> 1
EXHIBIT 10.29
COMMON STOCK
PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
the 23rd day of March 1997, by and between Geron Corporation, a Delaware
corporation having its principal place of business at 200 Constitution Drive,
Menlo Park, California, U.S.A. 94025 (the "Company"), and Pharmacia & Upjohn
S.p.A., an Italian corporation having its principal place of business at Via
Robert Koch, 1.2, 20152 Milano, Italy (the "Investor").
Recitals
WHEREAS, on January 10, 1997, the Investor purchased 99,805 shares of
the Company's Common Stock pursuant to a Common Stock Purchase Agreement dated
December 20, 1996 (the "First Equity Investment");
WHEREAS, the Company and the Investor are parties to a certain License
and Research Collaboration Agreement of even date herewith (the "Collaboration
Agreement"); and
WHEREAS, pursuant to Article 10 of the Collaboration Agreement, the
Investor has agreed to purchase, and the Company has agreed to sell, in an
off-shore transaction, certain shares of the Company's Common Stock on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Common Stock.
(a) Second Equity Investment. Subject to the
terms and conditions of this Agreement, the Investor agrees to purchase at the
Second Closing (as defined below) and the Company agrees to sell and issue to
the Investor at the Second Closing, that number of shares (rounded to the
nearest whole number) of the Company's Common Stock (the "Second Closing Common
Stock") that is equal to U.S. $4,000,000 divided by a price per share equal to
the sum of (x) the average closing price of the Common Stock on the Nasdaq
National Market for the twenty (20) consecutive trading days (the Twenty Day
Average Price") following the day on which Geron publicly announces the
execution of the Collaboration Agreement (the "Announcement Date") plus (y) a
premium equal to twenty percent (20%) of such Twenty Day Average Price. The
purchase and sale of stock pursuant to this Section 1.1(a) shall be referred to
as the "Second Equity Investment."
<PAGE> 2
(b) Third Equity Investment. Subject to the terms
and conditions of this Agreement, the Investor agrees to purchase at the Third
Closing (as defined below) and the Company agrees to sell and issue to the
Investor at the Third Closing, that number of shares (rounded to the nearest
whole number) of the Company's Common Stock (the "Third Closing Common Stock",
and with the Second Closing Common Stock, the "Common Stock") that is equal to
U.S. $4,000,000 divided by a price per share equal to the sum of (x) the Twenty
Day Average Price preceding the first anniversary of the Signature Date (as
defined in the Collaboration Agreement) of the Collaboration Agreement (the
"Anniversary Date") plus (y) a premium equal to [*] of such Twenty Day Average
Price. The purchase and sale of stock pursuant to this Section 1.1(b) shall be
referred to as the "Third Equity Investment." The First, Second and Third
Equity Investments are collectively referred to hereafter as the "Equity
Investments."
1.2 Closings.
(a) The purchase and sale of the Second Closing
Common Stock under Section 1.1(a) above shall take place at the offices of
Venture Law Group, 2800 Sand Hill Road, Menlo Park, California U.S.A. 94025
("VLG"), the later of (i) twenty-three (23) trading days following the
Announcement Date (ii) one (1) business day following the Effective Date (as
defined in the Collaboration Agreement) of the Collaboration Agreement, or at
such other time and place as the Company and the Investor mutually agree upon
orally or in writing (which time and place are designated as the "Second
Closing"). The purchase and sale of the Third Closing Common Stock under
Section 1.1(b) above shall take place at the offices of VLG three (3) trading
days following the Anniversary Date or at such other time and place as the
Company and the Investor mutually agree upon orally or in writing (which time
and place are designated as the "Third Closing"). At both the Second Closing
and the Third Closing, the Company shall deliver to the Investor a certificate
representing the Common Stock which such Investor is purchasing against
delivery to the Company by such Investor of a check or wire transfer in the
amount of U.S. $4,000,000 payable to the Company's order.
(b) For purposes of this Agreement, unless
otherwise indicated, the term "Closing" refers to the closing of the purchase
and sale of the Common Stock on a particular date and the term "Closing Date"
refers to the date of the Closing. The Second Closing and the Third Closing
are referred to herein collectively as the "Closings."
1.3. No Registration of Shares. The shares of Common
Stock will be issued to Investor without registration under the Securities Act
of 1933, as amended (the "Securities Act"), in reliance on Regulation S
("Regulation S") promulgated thereunder by the United States Securities and
Exchange Commission (the "SEC").
1.4 NASD Limitation. The parties acknowledge and agree
that, as of the date of this Agreement, Investor is not expected to purchase
and the Company is not expected to sell more than twenty percent (20%) of the
outstanding securities of the Company (as defined in the rules and regulations
of the National Association of Securities Dealers, Inc. ("NASD")) as a
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 3
result of all of the Equity Investments. Notwithstanding Sections 1.1 and 1.2
above, in the event the sale of the Second or Third Closing Common Stock would
result in Investor purchasing in the aggregate pursuant to the Equity
Investments more than twenty percent (20%) of the outstanding securities of the
Company, as calculated in accordance with the rules and regulations of the
NASD, then the parties shall meet and discuss in good faith the most
appropriate way to amend this Agreement so as to accomplish the intent of
parties as reflected in Section 1.1 of this Agreement and to comply with the
applicable rules and regulations of the NASD.
2. Representations, Warranties and Covenants of the Investor.
The Investor hereby represents, warrants and covenants that, as of the date of
this Agreement and as of each Closing Date:
2.1 Authorization. It has full power and authority to
enter into this Agreement. This Agreement has been duly authorized, executed
and delivered by such Investor and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms, subject to bankruptcy and
other laws of general application affecting the rights of creditors, and except
to the extent that the availability of any equitable remedy is subject to the
discretion of a court.
2.2 Purchase Entirely for Own Account. This Agreement is
made with the Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Common Stock will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, the Investor further
represents that such Investor does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
shares of Common Stock.
2.3 Disclosure of Information. The Investor hereby
acknowledges that it has received a copy of (i) the Company's final prospectus
dated July 30, 1996 issued in connection with the Company's initial public
offering (the "Final Prospectus"), (ii) the Company's quarterly reports on Form
10-Q for the quarters ended June 30, 1996 and September 30, 1996 and the
Company's annual report on Form 10-K for the year ended December 31, 1996.
Investor also acknowledges that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the sale
and issuance of the Common Stock.
2.4 Investment Experience. The Investor can bear the
economic risk of its investment and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Common Stock.
2.5 Consents. No consent, approval or authorization of
or designation, declaration or filing with any state, federal or foreign
governmental authority on the part of the
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<PAGE> 4
Investor is required in connection with the valid execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby;
provided, however, that Schedule 13D shall be filed by the Investor on a timely
basis if required by applicable law.
2.6 No Public Solicitation. The offering of the Common
Stock of the Company to the Investor was made solely in connection with the
negotiation and execution of the Collaboration Agreement and not as part of any
public solicitation.
2.7 Regulation S.
(a) The Investor is familiar with Regulation S
and is not a "U.S. Person" as that term is defined in Regulation S and is not
acquiring the Common Stock for the account or benefit of a U.S. Person..
(b) Without in any way limiting the
representations set forth above, and subject to Section 4 below, the Investor
further agrees not to make any disposition of all or any portion of the Common
Stock unless and until:
(i) Such disposition is in accordance
with Regulation S, or
(ii) There is then in effect a
Registration Statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such Registration
Statement, or
(iii) (y) The Investor shall have notified
the Company of the proposed disposition and shall have furnished the Company
with a detailed statement of the circumstances surrounding the proposed
disposition, and (z) if reasonably requested by the Company, the Investor shall
have furnished the Company with an opinion of counsel, reasonably satisfactory
to the Company, that such disposition will not require registration under the
Securities Act.
(c) It is understood that the Common Stock, and
any securities issued in respect thereof or exchange therefor, shall be subject
to a stop order until the earlier of (i) the expiration of the Research Term
(as defined in the Collaboration Agreement) or (ii) 180 days following the
termination of the Collaboration Agreement in accordance with its terms. It is
also understood, and the Company agrees, that the Company will not register the
transfer of any shares of the Common Stock except in compliance with the
Securities Act.
(d) The buy order for the Common Stock being
purchased hereunder will be originated by the Investor outside of the United
States.
2.8 No Registration. The Investor understands that the
Common Stock has not been and will not be registered under the applicable
securities laws of Italy and represents that it has not offered or sold, and
agrees that it will not offer or sell, any Common Stock, directly or indirectly
in Italy or to or from any resident of Italy except (i) pursuant to an
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<PAGE> 5
exemption from the registration requirements of the applicable securities laws
of Italy and (ii) in compliance with any other applicable requirements of the
laws of the Italy.
2.9 Exchange Act Filings. Investor agrees and
acknowledges that it shall have sole responsibility for making any filings with
the U.S. Securities and Exchange Commission pursuant to Sections 13 and 16 of
the Exchange Act as a result of its acquisition of the Company's capital stock
(including the Common Stock purchased under this Agreement and pursuant to the
First Equity Investment) and any future retention or transfer thereof.
3. Representations, Warranties and Covenants of the Company. The
Company hereby represents, warrants and covenants that, as of the date hereof
and as of each Closing Date:
3.1 Organization. The Company: (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware; (b) has all requisite corporate power and authority to own
and operate its properties and assets and to carry on its business as it is
presently being conducted and as proposed to be conducted in the Final
Prospectus and the Collaboration Agreement; and (c) is qualified and is in good
standing as a foreign corporation in all jurisdictions in which the failure to
so qualify would have a material adverse effect on its business or properties.
3.2 Authorization. The Company has full power and
authority to enter into this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes its valid and
legally binding obligation, enforceable in accordance with its terms, subject
to bankruptcy and other laws of general application affecting the rights of
creditors, and except to the extent that the availability of any equitable
remedy is subject to the discretion of the court.
3.3 Validity of Shares. The shares of Common Stock to be
delivered to the Investor pursuant to this Agreement, when issued in accordance
with the terms and provisions of this Agreement, will be validly authorized,
validly issued, fully paid and nonassessable.
3.4 SEC Documents. The Company has filed all required
reports, schedules, forms, statements and other documents with the SEC since
December 1, 1995 (the "SEC Documents") and will continue to file all required
SEC Documents through the time period set forth in Section 4.1 hereof. As of
their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, as the case may be, and the rules
and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except to the extent
such statements have been modified or superseded by a later filed SEC Document.
The Company will provide the Investor with copies of all SEC Documents promptly
after filing them with the SEC through the time period set forth in Section 4.1
hereof.
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<PAGE> 6
3.5 Capital Structure. As of the date of this Agreement,
the authorized capital stock of the Company consists of 25,000,000 shares of
common stock, $0.001 par value, and 3,000,000 shares of preferred stock, $0.001
par value. At the close of business on March 14, 1997, (i) 10,217,712 shares
of Company Common Stock were issued and outstanding, (ii) no shares of Company
Common Stock were held in treasury and (iii) 2,184,100 shares of Company Common
Stock were reserved for issuance upon the exercise of outstanding options or
warrants.
3.6 Stock Exchange Listing. The Company shall cause the
shares of Common Stock to be issued pursuant to this Agreement to be approved
for listing on the NASDAQ National Market System, subject to official notice of
issuance, prior to the Closing Date.
3.7 Non-Contravention. Neither the execution and
delivery of this Agreement or the Collaboration Agreement nor the consummation
or performance of the sale of stock hereby or the performance of its
obligations under the Collaboration Agreement will, directly or indirectly
(with or without notice or lapse of time): (i) contravene, conflict with, or
result in a violation of (A) any provision of the certificate of incorporation
or other organizational documents of the Company, or (B) any resolution adopted
by the board of directors or the stockholders of the Company; or (ii)
contravene, conflict with, or result in a violation or breach of any material
provision of, or give any person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or materially modify, any material agreement, material license or
other material right of the Company.
3.8 Governmental Consents. All consents, approvals,
orders, authorizations, registrations, qualifications, designations, or filings
of or with any federal, state or local governmental authority on the part of
the Company required in connection with the sale of stock contemplated herein
have been or shall be obtained prior to the Closing and shall be effective as
of the Closing.
3.9 No Adverse Change. Since December 31, 1996, except
as disclosed to the Investor in writing or in the SEC Documents, there has not
been:
(a) any change in the assets, properties,
liabilities, financial condition, operating results, prospects or business of
the Company from that reflected in the SEC Documents, except changes in the
ordinary course of business which have not been, in the aggregate, materially
adverse and except for continued losses from operations;
(b) any satisfaction or discharge of any lien,
claim or encumbrance or payment of any obligation by the Company, except in the
ordinary course of business and which is not material to the assets,
properties, financial condition, operating results, prospects or business of
the Company (as such business is presently conducted and as it is proposed to
be conducted in the Final Prospectus);
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<PAGE> 7
(c) any material change or amendment to a
material contract or arrangement by which the Company or any of its assets or
properties is bound or subject; or
(d) any incurrence of any other liabilities
which, individually or in the aggregate, are material and adverse to the
Company.
3.10 Litigation. Except as set forth in the Final
Prospectus or in an SEC Document, there is no action, proceeding or
investigation pending or, to the Company's knowledge, threatened, or any basis
therefor known to the Company, that, if determined adversely to the Company,
would have, individually or in the aggregate, a material adverse effect on the
Company or materially impair the ability of the Company to perform its
obligations under the Collaboration Agreement, including, without limitation,
any action, proceeding or investigation involving the prior employment or
consultancy of any of the Company's employees or consultants or their use of
any information or techniques alleged to be proprietary to any former employer
of any such employee or consultant. There is no judgment, decree or order of
any court, or governmental or regulatory authority in effect against the
Company. There is no action, suit, proceeding or investigation by the Company
currently pending or which the Company presently intends to initiate.
3.11 Intellectual Property Rights. Except as described in
the Final Prospectus or SEC Document or as otherwise disclosed in writing to
Investor and its counsel: (a) the Company has sufficient title and rights in
all of its IP Rights (as defined below) necessary to conduct its business as
now conducted and as proposed to be conducted in the Final Prospectus,
including the performance of the Research (as such term is defined in the
Collaboration Agreement) without conflict with or infringement of the rights of
others, except where the failure to have such rights would not have a material
adverse effect on the Company or the rights of Investor contemplated under the
Collaboration Agreement; (b) the Company has not received any communications
alleging that the Company has violated or would violate the IP Rights of others
by conducting its business as now conducted or as proposed to be conducted in
the Final Prospectus or the Collaboration Agreement, nor is the Company
otherwise aware of any such circumstances, except where such violation would
not have a material adverse effect on the Company or the rights of Investor
contemplated under the Collaboration Agreement; (c) other than its agreements
with Kyowa Hakko (as defined in the Collaboration Agreement), the Company has
not granted any options, licenses or other rights to others for the commercial
use in any country of its IP Rights in the Field (as currently defined in the
Collaboration Agreement) and (d) the Company is not aware of the infringement
by any third party of the Company's IP Rights, except where such infringement
would not have a material adverse effect on the Company or Investor's rights
contemplated under the Collaboration Agreement. The Company may grant Investor
the license rights and enter into the other agreements contemplated under the
Collaboration Agreement with respect to its IP Rights without requiring the
consent of any third party, other than Kyowa Hakko (as defined in the
Collaboration Agreement). "IP Rights" means patents, trademarks and
applications therefor, service marks, trade names, copyrights, trade secrets,
know how and license or option rights from third parties to any of the
foregoing.
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<PAGE> 8
3.12 Minutes. The minutes of the Company since January 1,
1995 have been made available to counsel to the Investor and contain a complete
summary of all meetings and actions by unanimous consent of directors and
stockholders since January 1, 1995 and reflect all transactions referred to in
such minutes accurately in all material respects.
3.13 Material Contracts. All contracts and other
documents: (i) required to be described in the SEC Documents, (ii) required to
be filed as exhibits to the SEC Documents, or (iii) that are material to the
Company's IP Rights in the Field, have been either made available to the
Investor, described in the SEC Documents or filed with the SEC as exhibits to
the SEC Documents, as the case may be.
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<PAGE> 9
4. Restrictions on Sales.
4.1 Agreement Not to Sell. Investor agrees not to
directly or indirectly sell, offer to sell, contract to sell (including,
without limitation, any short sale), grant any option to purchase or otherwise
transfer or dispose of (other than to affiliates who agree to be similarly
bound) (collectively, "Transfer Restrictions") the Common Stock being purchased
pursuant to this Agreement or purchased pursuant to the First Equity Investment
prior to the earlier of (i) the expiration of the Research Term (as defined
under the Collaboration Agreement), (ii) 180 days following the termination of
the Collaboration Agreement in accordance with its terms, (iii) the date any
"person," as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (other than the Company,
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of the stock of the Company), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company's then outstanding securities, (iv) the consummation of a merger
or consolidation of the Company with any other corporation, other than (a) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (b) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which
no "person" (as hereinabove defined) acquires more than 30% of the combined
voting power of the Company's then outstanding securities, or (v) the
consummation of the sale or disposition by the Company of all or substantially
all of the Company's assets.
4.2 Limitation on Sales. Subject to Section 4.1 above,
Investor will notify the Company at least two trading days in advance of any
proposed sale or other transfer of more than 25,000 shares of the Common Stock.
Investor and the Company agree and acknowledge that it is in their mutual
interest that disposition of Common Stock requiring notice to the Company
hereunder be accomplished in a manner that does not disrupt or undermine the
trading market for the Company's common stock on the Nasdaq National Market
System. Investor will consider in good faith any request by the Company to
delay such sale or transfer for a reasonable time or to arrange such sale or
transfer through an underwriter or market maker approved by the Company;
provided, however, that Investor will be under no obligation to comply with any
such request.
5. Conditions of Investor's Obligations at Closings. The
obligations of the Investor under subsection 1.1 of this Agreement are subject
to the fulfillment on or before each Closing of the following conditions by the
Company:
5.1 Representations and Warranties. The representations
and warranties of the Company contained in Section 3 shall be true and correct
in all material respects on and as of each Closing with the same force and
effect as though such representations and warranties had
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<PAGE> 10
been made on and as of each Closing, except, for the Third Closing, with regard
to the representations set forth in Sections 3.5, 3.9, 3.10, 3.11, 3.12 and
3.13 as may be disclosed in writing to Investor as of the Third Closing; it
being understood and agreed that upon disclosure of such exceptions with regard
to the representations set forth in Sections 3.5, 3.9, 3.10, 3.11, 3.12 and
3.13, the condition of this Section 5.1 shall be satisfied with respect to the
Third Closing.
5.2 Delivery of Common Stock. The Company shall have
delivered certificates representing the Common Stock being purchased by the
Investor at such Closing pursuant to this Agreement; and
5.3 Performance. The Company shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
such Closing and the Investor shall not have terminated the Collaboration
Agreement pursuant to Sections 17.2, 17.3 or 17.4 of the Collaboration
Agreement.
5.4 Effectiveness of Collaboration Agreement. The
Collaboration Agreement shall be effective in accordance with Section 19.14
therein.
6. Conditions of the Company's Obligations at Closings. The
obligations of the Company to the Investor under this Agreement are subject to
the fulfillment on or before each Closing of each of the following conditions
by the Investor:
6.1 Representations and Warranties. The representations
and warranties of the Investor contained in Section 2 shall be true and correct
on and as of each Closing with the same force and effect as though such
representations and warranties had been made on and as of such Closing;
6.2 Payment of Purchase Price. The Investor shall have
delivered the applicable purchase price specified in Section 1.1; and
6.3 Performance. The Investor shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
such Closing and the Company shall not have terminated the Collaboration
Agreement pursuant to Sections 17.2, 17.3 or 17.4 of the Collaboration
Agreement.
7. Miscellaneous.
7.1 Survival of Warranties. The warranties,
representations and covenants of the Investor and the Company contained in or
made pursuant to this Agreement shall survive the execution and delivery of
this Agreement and each Closing for a period of two (2) years from the date of
such Closing and shall in no way be affected by any investigation of the
subject matter
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<PAGE> 11
thereof made by or on behalf of either party; provided, that such
representations and warranties shall speak only as of the date of this
Agreement and each Closing, as applicable.
7.2 Benefit of Agreement; Successors and Assigns. Except
as otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of the Common Stock). Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as otherwise expressly provided in this Agreement.
7.3 Governing Law. This Agreement shall be governed by
and construed under the laws of the State of California as applied to
agreements among California residents entered into and to be performed entirely
within California.
7.4 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.
7.5 Titles and Subtitles. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 Notices. Unless otherwise provided, any notice
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given upon personal or courier delivery to the party to
be notified or ten (10) days after deposit with the United States or Italian
Post Office, by registered or certified mail, postage prepaid and addressed to
the party to be notified at the address indicated for such party on the first
page hereof, or at such other address as such party may designate by ten (10)
days' advance written notice to the other parties.
7.7 Expenses. Irrespective of whether each Closing is
effected, each party shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of this
Agreement and all other transactions contemplated hereby.
7.8 Amendments and Waivers. Any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investor.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any securities purchased under this Agreement at
the time outstanding (including securities into which such securities are
convertible or exchanged), each future holder of all such securities, and the
Company.
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<PAGE> 12
7.9 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.10 Entire Agreement. This Agreement constitutes the
entire agreement among the parties regarding the sale of Common Stock to the
Investor and no party shall be liable or bound to any other party in any manner
with regard to such sale by any warranties, representations, or covenants
except as specifically set forth herein.
[Signature Page Follows]
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<PAGE> 13
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
GERON CORPORATION
By: /s/ Ronald W. Eastman
-------------------------------
Its: President
------------------------------
PHARMACIA & UPJOHN S.P.A.
By: /s/ Lamberto Andreotti
-------------------------------
Its: Managing Director
------------------------------
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<PAGE> 1
EXHIBIT 10.30
UNIVERSITY TECHNOLOGY CORPORATION
INTELLECTUAL PROPERTY LICENSE AGREEMENT
This Agreement is made and entered into this ninth day of December
1996, by and between the UNIVERSITY TECHNOLOGY CORPORATION a not-for-profit
Colorado corporation having its principal place of business at 3101 Iris Ave.,
Suite 250, Boulder, Colorado 80301 U.S.A. (hereinafter referred to as UTC),
and
GERON CORPORATION
a corporation duly organized under the laws of Delaware and having its
principal place of business at 230 Constitution Drive, Menlo Park, California
94025 (hereinafter referred to as LICENSEE)
RECITALS
WHEREAS, UTC is the owner of certain University of Colorado
intellectual property developed at the University of Colorado by its employee
and one or more employees of the Howard Hughes Medical Institute (hereinafter
referred to as THE INSTITUTE), embodied in Inventions, Patent Rights, Patents,
Patent Applications, Copyrights or proprietary Know-How (as later defined
herein and referred to collectively as "Intellectual Property Rights") related
to:
CASE NO: 7017
TITLE: TELOMERASE PROTEIN SEQUENCES AND NEW MOTIFS
INVENTORS: DRS. J. LINGNER AND T. CECH
and has the right to grant licenses for aforementioned intellectual property,
subject only to a royalty-free, non-exclusive license granted to the United
States Government and/or to THE INSTITUTE, when applicable; and,
WHEREAS, UTC desires to have the Intellectual Property Rights utilized
in the public interest and is willing to grant a license thereunder; and,
WHEREAS, LICENSEE has represented to UTC in order to induce UTC to
enter into this Agreement, that LICENSEE shall commit itself to a thorough,
vigorous and diligent
<PAGE> 2
program of exploiting the Know-How and/or Intellectual Property Rights
commercially so that public utilization and royalty income to UTC shall result
therefrom; and,
WHEREAS, LICENSEE and UTC agree that the best way to utilize the
existing Intellectual Property is to cooperate in identifying protein sequences
and new motifs specific to human telomerase through collaborative efforts at
both Geron and the University of Colorado, Drs. Lingner and Cech, and various
Geron scientists have entered into a collaborative effort upon the signing of
the Option Agreement dated November 8, 1996 and entered into by UTC and
LICENSEE and
WHEREAS, LICENSEE desires to obtain a license under the Intellectual
Properly Rights upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained herein the parties agree as follows:
ARTICLE I - DEFINITIONS
For the purposes of this Agreement, the following words and phrases
shall have the following meanings:
1.1 "LICENSEE" shall include a related company of LICENSEE, the
voting stock of which is directly or indirectly at least fifty percent (50%)
owned or controlled by LICENSEE; an organization which directly or indirectly
controls at least fifty percent (50%) of the voting stock of LICENSEE; and, an
organization, at least fifty percent (50%) of which is directly or indirectly
common to the ownership of LICENSEE.
1.2 "Intellectual Property Rights" shall mean rights to
commercialize all of the following UTC intellectual property based on
inventions and/or discoveries and/or Know-How related thereto arising from THE
INSTITUTE or the University of Colorado, including:
(a) the United States and foreign patents and/or patent
applications and/or inventions listed in Appendix A;
(b) the United States and foreign patents issued from the
applications listed in Appendix A and from divisionals and continuations of
these applications;
(c) claims of U.S. and foreign continuation-in-part
applications, and of the resulting patents, which claim priority to (a) and/or
(b) above, and which are directed to subject matter specifically described in
the U.S. and foreign applications listed in Appendix A;
(d) claims of all foreign patent applications, and of the
resulting patents, which claim priority to (a) and/or (b) above, and which are
directed to subject matter specifically described in the United States patents
and/or patent applications described in (a), (b), or (c) above; and
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<PAGE> 3
(e) any patent, U.S. or foreign, filed on the human
telomerase protein(s) and corresponding genes and related nucleic acids arising
from the collaborative efforts between Geron scientists and Drs. Lingner and
Cech after the signing of the Option Agreement; and
(f) any reissues of patents described in (a), (b), (c),
(d), or (e) above.
1.3 A "Licensed Product" shall mean any product or part thereof
which:
(a) is based on the Intellectual Property and/or which is
covered in whole or in part by an issued, unexpired claim or a pending claim
contained in the Intellectual Property Rights in the country in which any
Licensed Product is made, used or sold; or
(b) is manufactured using a Licensed Process which is
covered in whole or in part by an issued, unexpired claim or a pending claim
contained in the Intellectual Property Rights in the country in which any
Licensed Process is used or in which such product or part thereof is used or
sold; or
(c) is created using the Intellectual Property Rights
licensed hereunder, and/or Know-How related to or described in Intellectual
Property Rights provided hereunder, and used prior to the Know-How entering the
public domain; and
(d) is sold, manufactured or used in any country under
this Agreement.
1.4 A "Licensed Process" shall mean:
(a) any process which is based on the Intellectual
Property and/or which is covered in whole or in part by an issued, unexpired
claim or a pending claim contained in the Intellectual Property Rights; or
(b) is created using the Intellectual Property Rights
licensed hereunder and/or Know-How related to or described in Intellectual
Property Rights provided hereunder, and used prior to the Know-How entering the
public domain; and
(c) is sold, manufactured or used in any country under
this Agreement.
1.5 "Net Sales" of LICENSEE and/or its sublicensee shall mean such
party's receipts for Licensed Products and Licensed Processes produced
hereunder less the sum of the following:
(a) discounts allowed in amount customary in the trade,
(b) sales, tariff duties and/or use taxes directly
imposed and with reference to particular sales;
(c) outbound transportation prepaid or allowed; and
(d) amounts allowed or credited on returns.
-3-
<PAGE> 4
No deductions shall be made for commissions paid to individuals whether they be
with independent sales agencies or regularly employed by LICENSEE and on its
payroll, or for cost of collections. Licensed Products shall be considered
"sold" when billed out or invoiced. In the event that the sale is made to an
Affiliate, the Net Sale will not be less than an equivalent sale to a
non-affiliate.
1.6 "Know-How" shall mean any and all technical data,
information, or knowledge which relate to the Licensed Product, the Licensed
Process or the manufacture, marketing, registration, purity, quality, potency,
safety, and efficacy of the Licensed Product or Licensed Process and which is
not in the public domain.
1.7 "Territory" shall mean worldwide.
1.8 "Field of Use" shall mean any and all uses or
applications of the Intellectual Property Rights and the inventions and patents
derived therefrom.
1.9 "Royalty Year" shall mean each consecutive twelve
(12) month period commencing with the Effective Date.
ARTICLE II - GRANT
2.1 UTC hereby grants to LICENSEE the exclusive right and license
to the Intellectual Properly Rights to make, have made, use, lease and sell the
Licensed Products, and to practice the Licensed Processes in the Territory for
the Field of Use to the end of the term for which the Intellectual Property
Patent Rights are granted unless sooner terminated according to the terms
hereof, and Know-How for a term of twenty (20) years or until such time that the
LICENSEE can establish that all of the Know-How is available in the public
domain.
2.2 LICENSEE agrees that Licensed Products leased or sold in the
United States shall be manufactured substantially in the United States.
2.3 In the case of an exclusive license, UTC hereby agrees that it
will not grant any other license to make, have made, use, lease and sell the
Intellectual Property Rights and/or the Licensed Products, or to utilize
Licensed Processes, in the Territory for the Field of Use during the period of
time commencing with the Effective Date of this Agreement and terminating with
the expiration of this Agreement.
2.4 UTC reserves the right to allow the Inventors, the University
of Colorado and the Howard Hughes Medical Institute, and all of their
employees, to practice the Know-How and/or Intellectual Property Rights for
their own noncommercial, research and educational purposes.
2.5 LICENSEE shall have the right to enter into sublicensing
agreements for the rights, privileges and licenses granted hereunder with UTC
permission, such consent not to be unreasonably withheld. LICENSEE shall
provide written notification to UTC of license
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<PAGE> 5
negotiations with potential sublicensees in which the Intellectual Property
Rights licensed hereunder constitute a material portion of the consideration to
be provided by Geron in the agreements under negotiation.
2.6 LICENSEE hereby agrees that every sublicensing agreement to
which it shall be a party and which grants a sublicense to the rights,
privileges and license granted hereunder shall contain a statement setting
forth the date upon which LICENSEE's exclusive rights, privileges and license
hereunder shall terminate, as defined in section 2.1 above.
2.7 LICENSEE agrees that any sublicenses to the rights, privileges
and license granted hereunder by it shall provide that the obligations to UTC
or this Agreement shall be binding upon the sublicensee as if it were a party
to this Agreement. LICENSEE further agrees to attach copies of this Agreement
to such sublicense agreements, and to guarantee the performance of that
sublicensee under any such agreement.
2.8 LICENSEE agrees to forward to UTC a copy of any and all
sublicense agreements granting a sublicense to the rights, privileges and
license granted hereunder within thirty (30) days of the execution of such
sublicense agreements and further agrees to forward to UTC annually a copy of
such reports received by LICENSEE from its sublicensees during the preceding
twelve (12) month period under such sublicenses as shall be pertinent to a
royalty accounting under such sublicense agreements, and to guarantee the
performance of that sublicensee under any such agreement.
2.9 LICENSEE shall not receive from sublicensees anything of value
in lieu of cash payments in consideration for any sublicense under this
Agreement, without the express prior written permission of UTC.
2.10 The license granted hereunder shall not be construed to confer
any rights upon LICENSEE by assumption, implication, estoppel or otherwise as
to any technology not specifically set forth herein.
ARTICLE III - DUE DILIGENCE
3.1 LICENSEE shall use commercially reasonable efforts to bring
one or more Licensed Products or Licensed Processes to market through a
thorough, vigorous and diligent program for exploitation of the Know-How and/or
Intellectual Property Rights to attain successful commercialization of Licensed
Products and/or Licensed Processes. Both parties also agree that due diligence
will be met by exerting reasonable effort to identify and clone the genes
encoding protein components(s) of human telomerase.
3.2 In addition, LICENSEE, shall adhere to the following
milestones:
(a) LICENSEE shall deliver to UTC, within [*] of
successfully cloning the genes encoding the protein component or components of
the human telomerase, as demonstrated by reconstitution of telomerase activity
using only recombinant proteins or if such reconstitution proves impractical,
then by demonstrating sufficient homology to the Euplodes
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 6
and yeast protein genes to provide reasonable certainty that the human
telomerase protein(s) has been cloned, a basic business plan and forecast
showing the amount of money, number and kind of personnel and time budgeted and
planned for each phase of development of the Licensed Products and Licensed
Processes and shall provide similar reports to UTC on an annual basis on or
before the ninetieth (90th) day following the close of LICENSEE's fiscal year.
(b) LICENSEE shall permit an in-plant inspection by UTC
on or before July 1, 1997, and thereafter permit in-plant inspections by UTC at
regular intervals with at least twelve (12) months between each such
inspection.
(c) LICENSEE shall have Net Sales of licensed products or
processes or services based in whole or in part on the Intellectual Property
according to the following schedule, beginning [*] after successfully cloning
the genes encoding the protein component or components of human telomerase:
Year 1 [*];
Year 2 [*];
Year 3 [*]; and
Year 4 [*]
3.3 LICENSEE's failure to perform in accordance with Paragraphs
3.1 and 3.2 above shall be grounds for UTC to terminate this Agreement pursuant
to Paragraph 12.3 hereof, unless LICENSEE makes a minimum annual royalty
payment equal to the royalty to be paid if such Net Sales had been made, or
both parties renegotiate the Due Diligence plan and mutually agree to revisions
thereto.
ARTICLE IV - MONETARY CONSIDERATION, INCLUDING ROYALTIES
4.1 For the rights, privileges and license granted hereunder,
LICENSEE shall pay royalties to UTC in the mariner hereinafter provided to the
end of the term of the Know-How and/or Intellectual Property Rights or until
this Agreement shall be terminated as hereinafter provided:
(a) LICENSE ISSUE FEE of Two Hundred Fifty Thousand
Dollars ($250,000) which shall be deemed earned and due immediately upon the
execution of this Agreement (and for which the $25,000 option fee paid pursuant
to the Option Agreement dated November 8, 1996 entered into by UTC and LICENSEE
shall be credited) plus:
(i) a grant of 1,000 shares of Geron common stock,
and (ii) a grant of 5,000 nonqualified stock options for Geron common stock.
The shares of common stock will not be registered and are subject to the
provisions of Rule 144. The exercise price of the options will be the closing
price of Geron common stock on December 11, 1996, the day the Geron Board of
Directors approves the grants of shares and options. The options will vest
immediately and be
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 7
exercisable for a ten year period. The shares obtained through exercise of
options are subject to a lock-up period of 90 days from the signing of this
Agreement,
(b) LICENSE MAINTENANCE FEES of Twenty Five Thousand
Dollars ($25,000) per year payable on January 1, 1998 and on January 1 of each
year thereafter for the Term of the Agreement.
(c) RUNNING ROYALTY in an amount equal to [*] of
therapeutics and [*] of other products based on the Net Sales of the Licensed
Products or Licensed Processes used, leased or sold by or for LICENSEE or
sublicensee. In the event that other patents from third parties are required
for commercialization of the Intellectual Property, the royalty rate may be
reduced by [*] of Net Sales per each additional patent required, but in no
case will the expected royalty rate be reduced by more than [*].
(d) In addition to the foregoing, LICENSEE agrees that it
will remit to UTC [*] of any Option Fee, License Fee, or any
other front-end payment which it may receive from any sublicensee granted by it
under the Intellectual Property Rights licensed hereunder. If other, non-UTO,
technologies are involved, the share going to UTC will be pro-rated by an
amount to be determined by good faith negotiations.
(e) Milestone payments will be based on the use of this
Intellectual Property to clone the human telomerase protein component or
components such that UTC earns:
(i) a payment of $100,000 if a publication
authored by scientists from Geron and/or the University of Colorado is the
first to be published on the complete cloning of the nucleic acid encoding a
human telomerase protein or proteins, such payment to be made within thirty
(30) days of such publication, and
(ii) a payment of $200,000 plus (i) a grant of
1,000 shares of Geron common stock, and (ii) a grant of 5,000 nonqualified
stock options for Geron common stock [The shares of common stock will not be
registered and are subject to the provisions of Rule 144. The exercise price
of the options will be the closing price of Geron common stock on the date that
the $200,000 is payable. The shares obtained through exercise of options
are subject to a lock-up period of 90 days from the date of this grant, and can
be exercised for a ten year period.] when Geron and/or UTC is issued a patent
(or patents) that claim recombinant methods and vectors encoding the human
telomerase protein component or components, which patent (or patents) is not
subject to an interference proceeding and is not dominated by a patent owned by
a third party with claims directed specifically to human telomerase proteins or
nucleic acids encoding the same.
4.2 No multiple royalties shall be payable because any Licensed
Product, its manufacture, use, lease or sale are or shall be covered by more
than one Intellectual Property Rights patent application or Intellectual
Property Rights patent licensed under this Agreement.
4.3 Royalty payments shall be paid in United States dollars in
Boulder, Colorado or at such other place as UTC may reasonably designate
consistent with the laws and regulations
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 8
controlling in any foreign country. If any currency conversion shall be
required in connection with the payment of royalties hereunder, such conversion
shall be made by using the exchange rate prevailing at the Chase Manhattan Bank
(N.A.) on the last business day of the calendar quarterly reporting period to
which such royalty payments relate.
ARTICLE V - REPORTS AND RECORDS
5.1 LICENSEE shall keep full, true and accurate books of account
containing all particulars that may be necessary for the purpose of showing the
amounts payable to UTC hereunder. Said books of account shall be kept at
LICENSEE's principal place of business or the principal place of business of
the appropriate division of LICENSEE to which this Agreement relates. Said
books and the supporting data shall be open at all reasonable times for three
(3) years following the end of the calendar year to which they pertain, to the
inspection of UTC or its agents for the purpose of verifying LICENSEE's royalty
statement or compliance in other respects with this Agreement.
5.2 LICENSEE, after first sales of Licensed Product, Process or
Intellectual Property, and within forty-five (45) days after March 31, June 30,
September 30 and December 31, of each year, shall deliver to UTC true and
accurate reports, giving such particulars of the business conducted by LICENSEE
and its sublicensees during the preceding three-month period under the
Agreement as shall be pertinent to a royalty accounting hereunder. These shall
include at least the following:
(a) number of Licensed Products sold;
(b) total billings for Licensed Products sold;
(c) accounting for all Licensed Processes used or sold;
(d) deductions applicable as provided in Paragraph 1.5;
(e) total royalty due; and
(d) names and addresses of all sublicensees of LICENSEE.
5.3 With each such report submitted, LICENSEE shall pay to UTC the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.
5.4 On or before the ninetieth (90th) day following the close of
LICENSEE's fiscal year, LICENSEE shall provide UTC with LICENSEE's certified
financial statements for the preceding fiscal year including, at a minimum, a
Balance Sheet and an Operating Statement.
5.5 The royalty payments set forth in this Agreement shall, if
overdue, bear interest until payment at the monthly rate of [*]. The payment of
such interest shall not foreclose UTC from exercising any other rights it may
have as a consequence of the lateness of any payment.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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ARTICLE VI - PATENT PROSECUTION
6.1 [*] shall apply for, seek issuance of and maintain during the
term of this Agreement the Intellectual Property Rights in the United States and
in foreign countries. The prosecution, filing and maintenance of all
Intellectual Property Rights patents and applications shall be the primary
responsibility of that party. Provided, however, the other party shall have
reasonable opportunities to advise [*] and shall cooperate with [*] in such
prosecution, filing and maintenance.
6.2 Payment of all fees and costs relating to the filing,
prosecution, and maintenance of the Intellectual Property Rights shall be the
responsibility of [*], after the date of this Agreement
ARTICLE VII - INFRINGEMENT
7.1 LICENSEE shall inform UTC promptly in writing of any alleged
infringement of the Intellectual Property Rights by a third party and of any
available evidence thereof.
7.2 During the term of this Agreement, UTC shall have the right,
but shall not be obligated, to prosecute at its own expense any such
infringements of the Intellectual Property Rights. If UTC prosecutes any such
infringement, UTC agrees that LICENSEE may join UTC as a party plaintiff in any
such suit, without expense to UTC. The total cost of any such infringement
action commenced or defended solely by UTC shall be borne by UTC and UTC shall
keep any recovery or damages for past infringement derived therefrom. Once an
IND has been filed and/or sales commence, Geron shall have the right, but not
the obligation, to control litigation and recover costs and damages, though
royalties will be paid to UTC on lost sales due to such infringements after
first recovering the necessary and reasonable expenses associated with the
litigation. If LICENSEE prosecutes any such infringement, LICENSEE agrees that
UTC may join LICENSEE as a party plaintiff in any such suit, without expense to
LICENSEE.
7.3 If UTC has the right to assume litigation responsibility, and
within six (6) months after having been notified of any alleged infringement or
such shorter time prescribed by law, if UTC shall have been unsuccessful in
persuading the alleged infringer to desist and shall not have brought and shall
not be diligently prosecuting an infringement action, or if UTC shall notify
LICENSEE at any time prior thereto of its intention not to bring suit against
any alleged infringer, then, and in those events only, LICENSEE shall have the
right, but shall not be obligated, to prosecute at its own expense any
infringement of the Intellectual Property Rights, and LICENSEE may, for such
purposes, use the name of UTC as party plaintiff; provided, however, that such
right to bring an infringement action shall remain in effect only for so long
as the license granted herein remains exclusive. No settlement, consent
judgment or other voluntary final disposition of the suit may be entered into
without the consent of UTC, which consent shall not unreasonably be withheld.
LICENSEE shall indemnify UTC against any expenses, including attorney's fees,
incurred by UTC in such proceedings commenced by LICENSEE.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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7.4 In the event that LICENSEE and UTC jointly shall undertake the
enforcement and/or defense of the Intellectual Property Rights by litigation,
then all costs and judgments shall be shared in a formula to be developed
through mutual consent.
7.5 In the event that a declaratory judgment action alleging
invalidity or noninfringement of any of the Intellectual Property Rights shall
be brought against LICENSEE, UTC has the opportunity, with LICENSEE consent,
within thirty (30) days after commencement of such action, to intervene and
take over the sole defense of the action at its own expense.
7.6 In any infringement suit as either party may institute to
enforce the Intellectual Property Rights pursuant to this Agreement, the other
party hereto shall, at the request and expense of the party initiating such
suit, cooperate in all respects and, to the extent possible, have its employees
testify when requested and make available relevant records, papers,
information, samples, specimens, and the like.
ARTICLE VIII - PRODUCT LIABILITY
8.1 LICENSEE, once a product is defined and clearly identified,
for the remainder of this Agreement, shall indemnify, defend and hold UTC, the
University of Colorado, THE INSTITUTE, and their respective trustees, board
members, officers, employees and affiliates, harmless against all claims and
expenses, including legal expenses and reasonable attorney's fees, arising out
of the death of or injury to any person or persons or out of any damage to
property and against any other claim, proceeding, demand, expense and liability
of any kind whatsoever resulting from the production, manufacture, sale, use,
lease, consumption or advertisement of the Licensed Products and/or Licensed
Processes or arising from any obligation of LICENSEE hereunder.
8.2 LICENSEE shall obtain and carry in full force and effect
liability insurance which shall protect LICENSEE, UTC, the University of
Colorado, and THE INSTITUTE in regard to events covered by Paragraph 8.1 above.
8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, UTC
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND VALIDITY OF INTELLECTUAL PROPERTY RIGHTS CLAIMS,
ISSUED OR PENDING.
ARTICLE IX - EXPORT CONTROLS
It is understood that UTC is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act as amended and the Export Administration Act of 1979), and that its
obligations hereunder are contingent on compliance with applicable United
States export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United
States Government and/or written assurances
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by LICENSEE that LICENSEE shall not export data or commodities to certain
foreign countries without prior approval of such agency. UTC neither
represents that a license shall not be required nor that, if required, it shall
be issued.
ARTICLE X - NON-USE OF NAMES
LICENSEE shall not use the names of UTC, THE INSTITUTE, and/or the
University of Colorado nor any of their employees, nor any adaptation thereof,
in any advertising, promotional or sales literature without prior written
consent obtained from UTC in each case, except that LICENSEE may state that it
is licensed by UTC under one or more of the patents and/or applications
comprising the Intellectual Property Rights, and the same right is held by UTC
in regard to the LICENSEE action in obtaining this license.
ARTICLE XI - ASSIGNMENT
This Agreement is not assignable and any attempt to do so shall be
void; provided, however, that either party may assign this Agreement to any
party acquiring all or substantially all of the assets and business of such
party.
ARTICLE XII - TERMINATION
12.1 If LICENSEE shall cease to carry on its business or initiate
or conduct actions in order to declare a state of bankruptcy, this Agreement
shall terminate upon notice by UTC.
12.2 Should LICENSEE fail to pay UTC royalties due and payable
hereunder, UTC shall have the right to terminate this Agreement on thirty (30)
days' notice, unless LICENSEE shall pay UTC within the thirty (30) day period,
all such royalties and interest due and payable. Upon the expiration of the
thirty (30) day period, if LICENSEE shall not have paid all such royalties and
interest due and payable, the rights, privileges and license granted hereunder
shall terminate.
12.3 Upon any material breach or default of this Agreement by either
party other than those occurrences set out in Paragraphs 12.1 and 12.2
hereinabove, which shall always take precedence in that order over any material
breach or default referred to in this Paragraph 12.3, the non-breaching party
shall have the right to terminate this Agreement and the rights, obligations,
privileges and license granted hereunder by ninety (90) days' notice to the
party in breach. Such termination shall become effective unless the party in
breach shall have cured any such breach or default prior to the expiration of
the ninety (90) day period.
12.4 LICENSEE shall have the right to terminate this Agreement at
any time on six (6) months' notice to UTC, and upon payment of amounts due UTC
through the effective date of the termination.
12.5 UTC may terminate this Agreement upon the occurrence of the
third separate instance of LICENSEE's failure to pay royalties when due within
any consecutive three (3) year period.
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12.6. Upon termination of this Agreement for any reason, nothing
herein shall be construed to release either party from any obligation that
matured prior to the effective date of such termination. LICENSEE and any
sublicensee thereof may, however, after the effective date of such termination,
sell all Licensed Products, and complete Licensed Products in the process of
manufacture at the time of such termination and sell the same, provided that
LICENSEE shall pay to UTC the royalties thereon as required by Article IV of
this Agreement and shall submit the reports required by Article V hereof on the
sales of Licensed Products.
12.7 Upon termination of this Agreement for any reason, any
sublicensee not then in default shall have the right to seek a license from
UTC.
ARTICLE XIII - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
Any payment, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to such
party by certified first class mail, postage prepaid, addressed to it at its
address below or as it shall designate by written notice given to the other
party:
In the case UTC: UNIVERSITY TECHNOLOGY CORPORATION:
3101 Iris Ave., Suite 250
Boulder, CO 80301
Attn: Michael G. Gabridge, Ph.D.
President and CEO
In the case of LICENSEE: GERON CORPORATION
230 Constitution Drive
Menlo Park, CA 94025
Attn: Ronald Eastman
President and CEO
ARTICLE XIV - PUBLICATIONS ARISING
FROM LICENSEE R & D SUPPORT
14.1 LICENSEE recognizes that UTC's relationship with the
University of Colorado requires that the results of University of Colorado's
research must be publishable and agrees that University of Colorado personnel
engaged in research pertinent to Know-How and/or Intellectual Property Rights
shall be permitted to present at symposia, professional meetings and to publish
in journals, theses or dissertations, or otherwise of their own choosing,
methods and results of research, provided, however, that LICENSEE shall have
been furnished copies of any proposed publication or presentation at least
[*] in advance of the submission of such
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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proposed publication or presentation to a journal, editor or other third party
when LICENSEE has provided the research funding which lead to the results
presented in manuscript form.
14.2 LICENSEE shall have [*], after receipt of said copies, to
object to such proposed presentation or proposed publication either because
there is patentable subject matter which needs protection and/or there is
confidential information of LICENSEE contained in the proposed publication or
presentation. In the event that LICENSEE makes such objection, the University
of Colorado personnel shall refrain from making such publication or presentation
for a maximum of [*] in order for the LICENSEE to file patent applications with
the United States Patent and Trademark Office and/or foreign patent office(s)
directed to the Patentable subject matter contained in the proposed publication
or presentation.
14.3 The parties agree that scientific publications describing the
results of their collaborative efforts to clone genes encoding human telomerase
proteins shall be authored and published by mutual agreement and that, until
such publication, information exchanged between the parties in this regard
shall be treated as confidential information and shall not be further
disseminated by the receiving party for a three year period without the written
consent of the party from whom the information was received.
ARTICLE XV - MISCELLANEOUS
15.1 This Agreement shall be construed, governed, interpreted and
applied in accordance with the laws of the State of Colorado, USA, except that
questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.
15.2 The parties hereto acknowledge that this Agreement sets forth
the entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto
15.3 The provisions of this Agreement are severable, and in the
event that any provisions of this Agreement shall be determined to be invalid
or unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof
15.4 LICENSEE agrees to mark the Licensed Products sold in the
United States with all applicable United States patent numbers. All Licensed
Products shipped to or sold in other countries shall be marked in such a manner
as to conform with the patent laws and practice of the country of manufacture
or sale.
15.5 The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
* Certain portions of this Exhibit have been omitted for which confidential
treatment has been requested and filed separately with the Securities and
Exchange Commission.
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<PAGE> 14
15.6 The University Technology Corporation, the Inventors, the
University of Colorado, and the Howard Hughes Medical Institute, and their
trustees, officers, employees, and agents, will be indemnified and held
harmless by the LICENSEE or sublicensee from and against any claim, liability,
cost, expense, damage, deficiency, loss, or obligation (including, without
limitation, reasonable attorney's fees and disbursements), based upon, arising
out of, or otherwise relating to any actions taken or omissions made by
LICENSEE in connection with or pursuant to this license.
IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals and duly executed this Agreement the day and year set forth below.
UNIVERSITY TECHNOLOGY CORPORATION
By: _________________________________
Michael G. Gabridge, Ph.D.
President and CEO
Date: _______________________________
GERON CORPORATION
By: _________________________________
Ronald W. Eastman
President and CEO
Date: _______________________________
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APPENDIX A
UNIVERSITY Case No. 7017: Telomerase Protein Sequences and New Motifs
USSN: Not yet available
By: Lingner and Cech
Date filed: October 1, 1996 by Medlen & Carroll,
San Francisco, CA
Foreign Applications: None as yet.
