<PAGE>
As filed with the Securities and Exchange Commission on December 17, 1999
Registration No. 333-89177
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
TULARIK INC.
(Exact name of registrant as specified in its charter)
---------------
<TABLE>
<S> <C> <C>
Delaware 8731 94-3148800
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
---------------
Two Corporate Drive
South San Francisco, California 94080
(650) 825-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
David V. Goeddel
Chief Executive Officer
Tularik Inc.
Two Corporate Drive
South San Francisco, California 94080
(650) 825-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copies to:
<TABLE>
<S> <C>
Suzanne Sawochka Hooper, Esq. David A. Hahn, Esq.
Stephen N. Rosenfield, Esq. Christopher L. Kaufman, Esq.
Cooley Godward LLP Latham & Watkins
Five Palo Alto Square 701 B Street
3000 El Camino Real Suite 2100
Palo Alto, CA 94306-2155 San Diego, CA 92101
(650) 843-5000 (619) 236-1234
</TABLE>
---------------
Approximate date of proposed sale to the public: As soon as practicable after
the Registration Statement becomes effective.
---------------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
number for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [X]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
---------------
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
Explanatory Note
The purpose of this Post-Effective Amendment No. 1 to the Registration
Statement is to file certain exhibits to the Registration Statement.
<PAGE>
Item 16. (a) Exhibits and Financial Statement Schedules
<TABLE>
<C> <S>
1.1+ Form of U.S. Underwriting Agreement.
1.2+ Form of International Underwriting Agreement.
1.3+ Form of Purchase Agreement for Pharma Vision 2000 AG.
3.1+ Amended and Restated Certificate of Incorporation of Registrant to
be filed upon the closing of the offering made in connection with
this Registration Statement.
3.2+ Amended and Restated Bylaws of Registrant to be filed upon the
closing of the offering made in connection with this Registration
Statement.
4.1+ Specimen Common Stock Certificate.
4.2+ Amended and Restated Registration Rights Agreement, dated August 15,
1999, between Registrant and holders of Registrant's Series A,
Series B, Series C, Series D, Series E, Series F and Series G
preferred stock and holders of warrants to purchase Registrant's
common stock or Series H preferred stock.
4.3+ Investor Rights Agreement, dated October 31, 1997, between
Registrant and holders of Registrant's Series H preferred stock.
5.1+ Opinion of Cooley Godward LLP.
10.1+ Form of Indemnity Agreement.
10.2+ 1991 Stock Plan and related documents.
10.3+ 1997 Equity Incentive Plan and related documents.
10.4+ 1997 Non-Employee Directors' Stock Option Plan and related
documents.
10.5+ 1999 Employee Stock Purchase Plan.
10.6*++ Collaboration Agreement between Registrant and Sumitomo
Pharmaceuticals Co., Ltd., dated January 31, 1995, as amended March
13, 1997.
10.7*++ Research, Collaboration and License/Development Agreement between
Registrant and Taisho Pharmaceutical Co., Ltd., dated March 20,
1996, as amended on January 1, 1998 and January 1, 1999.
10.8*++ Amended and Restated Collaboration and License Agreement between
Registrant and Merck & Co., Inc., dated December 22, 1996.
10.9*++ Research Collaboration and License Agreement between Registrant and
the Roche Bioscience division of Syntex (U.S.A.) Inc., dated July 8,
1997, as amended on December 19, 1997.
10.10*++ Research Agreement between Registrant and Cold Spring Harbor
Laboratory, dated October 3, 1997.
10.11*++ License Agreement between Registrant and Cold Spring Harbor
Laboratory, dated October 3, 1997.
10.12++ Collaboration Agreement between Registrant and Knoll AG, dated
November 1, 1998.
10.13*++ Preliminary Research, Development and Marketing Agreement between
Registrant and Japan Tobacco Inc., dated September 8, 1998.
10.14*++ Preliminary Research, Development and Marketing Agreement between
Registrant and Japan Tobacco Inc., dated September 20, 1998.
10.15++ Screening Agreement between Registrant and Japan Tobacco Inc., dated
August 23, 1999.
</TABLE>
<PAGE>
<TABLE>
<C> <S>
10.16*++ Licensing Agreement between Registrant and Eli Lilly and Company,
dated September 24, 1999.
10.17+ Stock Purchase Agreement between Registrant and the 1987 Swanson
Family Trust, dated June 20, 1996, as amended August 17, 1996.
10.18+ Sublease between Registrant and AGY Therapeutics, Inc., dated January
25, 1999.
10.19+ Sublease between Registrant and Coulter Pharmaceuticals, Inc., dated
May 1, 1999.
10.20+ Sublease between Registrant and IGEN International, Inc., dated
August 20, 1999.
10.21+ Lease Agreement between Leonard Racanelli and The Rosa Racanelli 1998
Trust, dated July 23, 1998.
10.22+ Sublease between Registrant and GeneSoft Inc., dated November 16,
1998.
10.23+ Lease Agreement between Registrant and Brittania Developments, Inc.,
dated April 20, 1995.
10.24+ Lease Agreement between Registrant and Brittania Developments, Inc.,
dated February 10, 1998.
10.25+ Agreement and General Release between Registrant and John P.
McLaughlin, dated September 30, 1999.
22.1+ List of Subsidiaries.
23.1+ Consent of Ernst & Young LLP, Independent Auditors.
23.2+ Consent of Cooley Godward LLP (included in Exhibit 5.1).
24.1+ Power of Attorney (contained on signature page).
27.1+ Financial Data Schedule.
</TABLE>
- - --------
++ Confidential treatment requested as to specific portions, which portions are
omitted and filed separately with the Securities and Exchange Commission.
+ Previously filed.
* Previously filed and filed herewith in connection with revisions to our
confidential treatment requests.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this post-effective Amendment No. 1 to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of South San Francisco, State of
California, on the 17th day of December, 1999.
TULARIK INC.
/s/ Corinne H. Lyle
By:__________________________________
Corinne H. Lyle
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
post-effective Amendment No. 1 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
* Chief Executive Officer December 17, 1999
______________________________________ and Director (Principal
David V. Goeddel Executive Officer)
/s/ Corinne H. Lyle Chief Financial Officer December 17, 1999
______________________________________ (Principal Finance and
Corinne H. Lyle Accounting Officer)
* Director December 17, 1999
______________________________________
A. Grant Heidrich, III
* Director December 17, 1999
______________________________________
Mark J. Levin
* Director December 17, 1999
______________________________________
Paul A. Marks
* Director December 17, 1999
______________________________________
Edward R. McCracken
* Director December 17, 1999
______________________________________
Steven L. McKnight
* Director December 17, 1999
______________________________________
</TABLE> Peter J. Sjostrand
*By /s/ Corinne H. Lyle
- - --------------------------------
(Attorney-In-Fact)
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1+ Form of U.S. Underwriting Agreement.
1.2+ Form of International Underwriting Agreement.
1.3+ Form of Purchase Agreement for Pharma Vision 2000 AG.
3.1+ Amended and Restated Certificate of Incorporation of Registrant to
be filed upon the closing of the offering made in connection with
this Registration Statement.
3.2+ Amended and Restated Bylaws of Registrant to be filed upon the
closing of the offering made in connection with this Registration
Statement.
4.1+ Specimen Common Stock Certificate.
4.2+ Amended and Restated Registration Rights Agreement, dated August 15,
1999, between Registrant and holders of Registrant's Series A,
Series B, Series C, Series D, Series E, Series F and Series G
preferred stock and holders of warrants to purchase Registrant's
common stock or Series H preferred stock.
4.3+ Investor Rights Agreement, dated October 31, 1997, between
Registrant and holders of Registrant's Series H preferred stock.
5.1+ Opinion of Cooley Godward LLP.
10.1+ Form of Indemnity Agreement.
10.2+ 1991 Stock Plan and related documents.
10.3+ 1997 Equity Incentive Plan and related documents.
10.4+ 1997 Non-Employee Directors' Stock Option Plan and related
documents.
10.5+ 1999 Employee Stock Purchase Plan.
10.6*++ Collaboration Agreement between Registrant and Sumitomo
Pharmaceuticals Co., Ltd., dated January 31, 1995, as amended March
13, 1997.
10.7*++ Research, Collaboration and License/Development Agreement between
Registrant and Taisho Pharmaceutical Co., Ltd., dated March 20,
1996, as amended on January 1, 1998 and January 1, 1999.
10.8*++ Amended and Restated Collaboration and License Agreement between
Registrant and Merck & Co., Inc., dated December 22, 1996.
10.9*++ Research Collaboration and License Agreement between Registrant and
the Roche Bioscience division of Syntex (U.S.A.) Inc., dated July 8,
1997, as amended on December 19, 1997.
10.10*++ Research Agreement between Registrant and Cold Spring Harbor
Laboratory, dated October 3, 1997.
10.11*++ License Agreement between Registrant and Cold Spring Harbor
Laboratory, dated October 3, 1997.
10.12++ Collaboration Agreement between Registrant and Knoll AG, dated
November 1, 1998.
10.13*++ Preliminary Research, Development and Marketing Agreement between
Registrant and Japan Tobacco Inc., dated September 8, 1998.
10.14*++ Preliminary Research, Development and Marketing Agreement between
Registrant and Japan Tobacco Inc., dated September 20, 1998.
10.15++ Screening Agreement between Registrant and Japan Tobacco Inc., dated
August 23, 1999.
10.16*++ Licensing Agreement between Registrant and Eli Lilly and Company,
dated September 24, 1999.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.17+ Stock Purchase Agreement between Registrant and the 1987 Swanson
Family Trust, dated June 20, 1996, as amended August 17, 1996.
10.18+ Sublease between Registrant and AGY Therapeutics, Inc., dated January
25, 1999.
10.19+ Sublease between Registrant and Coulter Pharmaceuticals, Inc., dated
May 1, 1999.
10.20+ Sublease between Registrant and IGEN International, Inc., dated August
20, 1999.
10.21+ Lease Agreement between Leonard Racanelli and The Rosa Racanelli 1998
Trust, dated July 23, 1998.
10.22+ Sublease between Registrant and GeneSoft Inc., dated November 16,
1998.
10.23+ Lease Agreement between Registrant and Brittania Developments, Inc.,
dated April 20, 1995.
10.24+ Lease Agreement between Registrant and Brittania Developments, Inc.,
dated February 10, 1998.
10.25+ Agreement and General Release between Registrant and John P.
McLaughlin, dated September 30, 1999.
22.1+ List of Subsidiaries.
23.1+ Consent of Ernst & Young LLP, Independent Auditors.
23.2+ Consent of Cooley Godward LLP (included in Exhibit 5.1).
24.1+ Power of Attorney (contained on signature page).
27.1+ Financial Data Schedule.
</TABLE>
- - --------
++ Confidential treatment requested as to specific portions, which portions are
omitted and filed separately with the Securities and Exchange Commission.
+ Previously filed.
* Previously filed and filed herewith in connection with revisions to our
confidential treatment requests.
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.6
AMENDMENT NO. 1 TO COLLABORATION AGREEMENT
BETWEEN TULARIK INC. AND
SUMITOMO PHARMACEUTICALS CO., LTD
THIS AMENDMENT NO. 1 (this "Amendment") to the Collaboration Agreement
dated as of January 31, 1995 (the "Collaboration Agreement") by and between
Tularik Inc., a Delaware corporation with its principal office at Two Corporate
Drive, South San Francisco, California 94080 (herein, together with its
successors and assigns, "Tularik"), and Sumitomo Pharmaceuticals Co., Ltd., a
Japanese corporation with its principal office at 2-8, Doshomachi 2-chome Chuo-
ku, Osaka 541, Japan (herein, "Sumitomo"), is entered into as of March 13, 1997;
W I T N E S S E T H:
WHEREAS, the parties previously entered into the Collaboration Agreement;
WHEREAS, the parties desire to modify Appendix A of the Collaboration
Agreement;
WHEREAS, in order to accomplish the foregoing, the parties have agreed to
amend the Collaboration Agreement in part;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements expressed herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, Tularik and Sumitomo agree as follows:
1. Appendix A of the Collaboration Agreement is hereby amended to add the
following as number 7:
"7. [ * ]
2. Capitalized terms used herein but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Collaboration
Agreement.
3. Except as expressly modified by this Amendment, all of the terms and
conditions of the Collaboration Agreement shall remain in full force and effect.
4. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed, or caused their duly
authorized officer or representative to execute, this Amendment as of the day
and year first above written.
TULARIK INC.
By: /s/ Terry Rosen
----------------------------
Name: Terry Rosen
Title: Vice President, Research Operation
SUMITOMO PHARMACEUTICALS CO., LTD.
By: /s/ Shigeo Ogino
----------------------------
Name: Shigeo Ogino
Title: Managing Director
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
COLLABORATION AGREEMENT
This Agreement is entered into as of the 31/st/ day of January, 1995 (the
"Effective Date") by and between Tularik Inc., a California corporation
("Tularik"), and Sumitomo Pharmaceuticals Co., Ltd. ("Sumitomo"), a corporation
organized under the laws of Japan.
Recitals
Whereas, Tularik has developed proprietary screening assays and other
proprietary technology useful in the identification of compounds which act
through regulation of the gene encoding Low Density Lipoprotein Receptor; and
Whereas, Sumitomo and Tularik both possess substantial libraries of natural
and synthetic compounds which have potential therapeutic pharmaceutical utility;
and
Whereas, Tularik and Sumitomo desire to establish a cooperative research
relationship where Tularik will screen both company's compound libraries using
the Tularik Assays (as hereinafter defined); and
Whereas, the parties wish to develop and market novel therapeutic products
based on compounds identified during such research;
Now, Therefore, in consideration of the foregoing and the covenants and
promises contained herein, the parties agree as follows:
Article 1
Definitions
As used herein, the following terms shall have the following meanings:
"Affiliate" shall mean any entity that directly or indirectly Owns, is
Owned by or is under common Ownership, with a party to this Agreement, where
"Own" or "Ownership" means direct or indirect possession of at least fifty
percent (50%) of the outstanding voting securities of a corporation or a
comparable equity interest in any other type of entity.
"Agreement" shall mean this Collaboration Agreement.
"Confidential Information" shall mean, subject to the limitations set forth
in Section 11.1 hereof, all information disclosed to one party by the other
party.
"FDA" shall mean the United States Food and Drug Administration.
"Field" shall mean therapeutic treatment of human disease [*] by means of
activation of LDL-R gene expression to effectively lower serum LDL-cholesterol.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
1
<PAGE>
"IND" or "Investigational New Drug Application" shall mean an application
for regulatory approval by the FDA or its foreign equivalent in the Sumitomo
Territory to commence human clinical testing of a drug, as defined by the FDA or
the equivalent in the Sumitomo Territory.
"Lead Compound" shall mean a Program Compound selected by the Research
Committee, which is a single molecule which shows selective activity in an assay
in intact cells (EC50 less than or equal to 1 micromolar and in any other
assays to be agreed by the parties.
"License Agreement" shall mean the License Agreement to be entered into
between the parties in the form attached hereto as Appendix C.
"Low Density Lipoprotein Receptor" ("LDL-R") shall mean that sequence of
amino acids commonly characterized as Low Density Lipoprotein Receptor in the
scientific literature published as of the Effective Date.
"Preclinical Candidate" shall mean a compound which is or is derived from a
Lead Compound which is determined by the Research Committee to be appropriate
for pharmacology, toxicology, ADME, formulation and process development studies
for IND filing in the Sumitomo Territory.
"Product" shall mean any pharmaceutical product, including all
formulations, line extensions or modes of administration thereof, for use within
the Field, which contains a Preclinical Candidate as an active ingredient.
"Program" shall mean the research and development program described in
Appendix A hereto, as amended from time to time by the Research Committee in
accordance with Section 2.2(c).
"Program Compounds" shall mean any Sumitomo or Tularik Substances which
show activity in the screening conducted in the course of the Program, including
Tail End Compounds, and all derivatives, analogues or other improvements thereof
developed in the course of the Program.
"Program Know-How" shall mean all materials and information developed in
the course of the Program.
"Program Patents" shall mean any and all patents and patent applications,
both foreign and domestic, which have not been held invalid or unenforceable by
a court of competent jurisdiction from which no appeal has been or can be taken,
including without limitation, all substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates, which cover
inventions or discoveries made by either party or both parties in the course of
the Program or which pertain to Tail End Compounds.
"Program Technology" shall mean all Program Patents and Program Know-How.
"Research Committee" shall mean that committee formed pursuant to Section
2.2 hereof.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2
<PAGE>
"Research Term" shall have the meaning assigned in Section 2.3.
"Sumitomo Know-How" shall mean all materials and information that Sumitomo
owns, controls or has a license to (with a right to sublicense) (i) as of the
Effective Date or (ii) which arise outside of the Program from time to time
during the Research Term, which in each case are necessary or useful for the
conduct of the Program or the development, manufacture, use or sale of Products.
"Sumitomo Patents" shall mean any and all patents, (other than Program
Patents) both foreign and domestic, which have not been held invalid or
unenforceable by a court of competent jurisdiction from which no appeal has been
or can be taken, including without limitation all substitutions, extensions,
reissues, renewals, supplementary protection certificates and inventors'
certificates, (a) which (i) are issued as of the Effective Date, (ii)
subsequently issue from applications (including divisionals, continuations and
continuations-in-part) pending as of the Effective Date, or (iii) issue from any
such applications subsequently filed on inventions made as of the Effective
Date, (b) which Sumitomo owns, controls or has a license to (with the right to
sublicense), and (c) which would be infringed by the conduct of the Program or
the development, manufacture, use or sale of Products.
"Sumitomo Substances" shall mean those natural extracts, natural compounds
and synthetic compounds which Sumitomo owns or has the right to license or
sublicense as of the Effective Date or from time to time during the Program,
which Sumitomo actually provides to Tularik.
"Sumitomo Technology" shall mean, collectively, the Sumitomo Patents, the
Sumitomo Know-How and the Sumitomo Substances.
"Sumitomo Territory" shall mean Japan, China, Hong Kong, Indonesia,
Malaysia, Philippines, Korea, Taiwan and Thailand.
"Tail End Compound" shall mean a compound designated as such by the
Research Committee which is conceived by Tularik or Sumitomo during the Research
Term and which is first reduced to practice prior to the end of the first year
after completion or termination of the Research Term.
"Tularik Assays" shall mean those assays designed to discover Program
Compounds, which, as of the Effective Date and from time to time during the
Research Term, Tularik owns to which it has rights (with a right to sublicense),
as set forth and periodically updated on Appendix B hereto.
"Tularik Know-How" shall mean all materials and information that Tularik
owns, controls or to which it has a license (with a right to sublicense) (i) as
of the Effective Date or (ii) which arise outside the Program from time to time
during the Research Term, which are necessary or useful to the conduct of the
Program or the development, manufacture, use or sale of Products.
"Tularik Patents" shall mean any and all patents (other than Program
Patents), both foreign and domestic, which have not been held invalid or
unenforceable by a court of competent jurisdiction from which no appeal has been
or can be taken, including without limitation all substitutions, extensions,
reissues, renewals, supplementary protection certificates and inventors'
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3
<PAGE>
certificates, (a) which (i) are issued as of the Effective Date, (ii)
subsequently issue from applications (including divisionals, continuations and
continuations-in-part) pending as of the Effective Date, or (iii) issue from any
such applications subsequently filed on inventions made as of the Effective
Date, (b) which Tularik owns, controls or has a license to (with the right to
sublicense) and (c) which would be infringed by the conduct of the Program or
the development, manufacture, use or sale of Products.
"Tularik Substances" shall mean those natural extracts, natural compounds
and synthetic compounds which Tularik owns or has the right to license or
sublicense as of the Effective Date or from time to time during the Program,
which Tularik actually provides to the Program.
"Tularik Technology" shall mean, collectively, the Tularik Patents, the
Tularik Know-How and the Tularik Assays.
"Tularik Territory" shall mean all the countries and territories of the
world other than the Sumitomo Territory.
Article 2
Program; Development
2.1 Program. Tularik and Sumitomo will conduct the Program under the
direction of the Research Committee as set forth in Appendix A hereto, as
amended from time to time by the Research Committee in accordance with Section
2.2(c).
2.2 Research Committee.
(a) Formation of Research Committee. The Research Committee shall
consist of an equal number of members from Sumitomo and Tularik, appointed and
substituted by each party as necessary from time to time. Each member shall
have appropriate technical credentials and knowledge and ongoing familiarity
with the Program. The Chairperson of the Research Committee shall be a Tularik
employee appointed by the Research Committee. All decisions of the Research
Committee shall be unanimous. To the extent that the members of the Research
Committee are unable to reach a unanimous decision on an issue relating to an
activity for which one party is primarily responsible under Appendix A, such
party's appointed members shall finally decide the disputed issue.
(b) Meetings of Research Committee. The Research Committee shall meet
[ * ] at such times as shall be mutually agreed upon by the parties.
(c) Responsibilities of the Research Committee. The Research
Committee shall carry out the following responsibilities during the Research
Term: (1) defining the yearly research and development objectives, (2)
determining which Sumitomo or Tularik Substances or Tail End Compounds have
shown sufficient activity in one or more Tularik Assay to be classified as a
Program Compound, (3) selecting the Lead Compounds, (4) coordinating activities
required to carry out the Program, (5) periodically revising the Program, (6)
monitoring progress of the Program, (7) delegating responsibility for the filing
and prosecution of Program Patents on inventions jointly discovered in the
course of the Program, (8) coordinating activities required to carry out further
development of Program Compounds, (9) allocating the
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4
<PAGE>
responsibilities for tasks and costs for preclinical studies, [ * ] utilized in
both the Sumitomo Territory and Tularik Territory and (10) selecting the
Preclinical Candidates.
2.3 Term and Termination of Program. The Program shall be carried out for
a period of five years commencing on the Effective Date (the "Research Term");
provided, however, that Sumitomo may terminate the Program at any time after
three years after the Effective Date, upon one hundred twenty (120) days prior
written notice to Tularik. Anything to the contrary in the preceding sentence
notwithstanding, the Research Term shall be continued for the full five (5)
years if Sumitomo enters into the License Agreement.
2.4 Sumitomo Scientist. During the term of the Program, Tularik will
accommodate, at Sumitomo's request and expense, one visiting Sumitomo research
scientist, appointed and substituted by Sumitomo from time to time, to
facilitate collaboration between the parties within the Research Program.
2.5 Obligation to Inform. Each party hereby agrees to keep the other
fully informed on a reasonable basis of the progress of the Program.
2.6 Due Diligence. Each party shall devote the same degree of attention,
resources and diligence to its respective obligations under the Program as it
devotes to other compounds of its own development.
Article 3
Financial Support
3.1 Program Funding. Sumitomo shall support Tularik's costs in conducting
the Program. Tularik will provide Sumitomo regular reports of the costs it
incurs in conducting the Program. In order to assure such support Sumitomo,
subject to its right to terminate the Program as provided in Section 2.3, will
make payments in certain amounts and at certain times as follows:
Amount Due Date
------ --------
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
The total amount of Sumitomo's payments in support of Tularik's costs for the
Program shall not exceed Fifteen Million Dollars ($15,000,000). Sumitomo and
Tularik may meet from time to time to review Tularik's costs.
3.2 Manner of Payment. Remittance of payments under Section 3.1 will be
within [ * ] of the Due Date by means of telegraphic transfer to Tularik's
account in a bank in the United States to be designated by Tularik.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5
<PAGE>
Article 4
Future Licenses
4.1 License Agreement.
(a) Sumitomo shall have the right to enter into the License Agreement
attached hereto as Appendix C [ * ].
(b) In the event that Sumitomo decides to develop a Tail End Compound
as a Preclinical Candidate, Sumitomo shall have the right to enter into the
License Agreement, with respect to such Preclinical Candidate within [ * ] after
the end of the Research Term; provided, however, that all rights to Tail End
Compounds shall revert to Tularik if Sumitomo does not enter into the License
Agreement within such [ * ] period.
(c) The License Agreement shall contain an Appendix A listing the
Preclinical Candidates and the patents and patent applications included in the
Tularik Technology and the Tularik-owned and jointly owned Program Technology
licensed thereunder.
4.2 Use Limitation. Each party agrees and acknowledges that use of the
Sumitomo Substances or the Tularik Substances, as the case may be, provided
pursuant to Article 2, is limited solely to those activities contemplated by the
Program, unless otherwise provided for in this Agreement, and are for research
use only and shall not be administered to humans in any manner or form, except
in accordance with the terms of this Agreement, subject to appropriate
Governmental Approval.
4.3 Nonuse of Technology Outside of the Field. Sumitomo covenants and
agrees that it will not use, directly or indirectly, the Tularik Technology,
Tularik's Confidential Information or Tularik's Program Technology for any
purpose other than developing, making, having made, using or selling Products in
the Sumitomo Territory under this Agreement. Tularik covenants and agrees that
it will not use, directly or indirectly, the Sumitomo Technology, Sumitomo's
Confidential Information or Sumitomo's Program Technology for any purpose other
than developing, making, having made, using or selling Products in the Tularik
Territory under this Agreement.
4.4 Use of a Party's Own Substances. Notwithstanding anything to the
contrary in Sections 4.2 or 4.3 above, each party shall retain the right to use
freely its own Sumitomo or Tularik Substances, as the case may be, which are not
classified as Lead Compounds.
4.5 Grant by Sumitomo to Tularik. Subject to the terms of this Agreement,
Sumitomo hereby grants Tularik the right and license, with the right to
sublicense, to develop, make, have made, use and sell Products under the
Sumitomo Technology and the Sumitomo-owned and jointly owned Program Technology.
The license granted herein shall be exclusive, even as to Sumitomo, throughout
the Tularik Territory.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6
<PAGE>
Article 5
Ownership; Patents
5.1 Ownership. Tularik acknowledges and agrees that Sumitomo is and shall
remain the sole owner of the Sumitomo Technology and the Sumitomo Substances and
that Tularik has no rights in or to any of them other than the license and
rights specifically granted herein. Sumitomo acknowledges and agrees that
Tularik is and shall remain the sole owner of the Tularik Technology and the
Tularik Substances and that Sumitomo has no rights in or to any of them other
than the rights specifically granted herein and the license to be granted
pursuant to the License Agreement. Each party shall be the sole owner of any
inventions or discoveries made, or materials or information created, solely by
it in the course of the Program, and the other party has no rights in or to any
such inventions, discoveries, materials or information other than those rights
specifically granted to such other party herein or in the License Agreement.
Inventions or discoveries made, and materials and information created, jointly
by the parties in the course of the Program shall be jointly owned.
Inventorship shall be determined in accordance with the U.S. patent laws.
5.2 Patents.
(a) Patent Prosecution.
(1) Tularik Patents and Sumitomo Patents shall be prosecuted and
maintained by Tularik and Sumitomo, respectively, at such party's option and its
own expense.
(2) Each party shall be responsible for filing, prosecuting and
maintaining those Program Patents covering inventions or discoveries made solely
by it throughout the world, shall consult with the other party as to the
selection of countries in which to file applications for such Program Patents in
the other's Territory and shall cooperate with the other as to the prosecution
of Program Patents in its own Territory. Each party shall be responsible for
bearing the cost of filing, prosecution and maintenance of Program Patents in
its own Territory regardless of which party owns the Program Patent. In the
event that any party decides not to proceed with prosecuting an application for
such a Program Patent, or to pay any annuity for such a Program Patent as it
becomes due, such party shall give the other [ * ] notice before any relevant
deadline, and the other party shall have the right to pursue, at its own
expense, prosecution of such patent application or maintenance of such patent.
(3) The Research Committee shall determine a responsible party or
parties for filing, prosecuting and maintaining patent applications for Program
Patents which cover inventions or discoveries jointly made by the parties as it
sees fit, provided that each party shall be responsible for bearing the cost of
application, prosecution and maintenance of such patent application and/or
patent in its own Territory. In the event that any party decides not to proceed
with prosecuting a patent application filed under this Section 5.2(a)(3) or to
pay any annuity for a jointly owned Program Patent as it becomes due in its own
Territory, such party shall give the other [ * ] notice before any relevant
deadline, and the other party shall have the right to pursue, at its own
expense, prosecution of such patent application or maintenance of such patent.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7
<PAGE>
(4) Each party specifically excludes any representation or
warranty, express or implied, that it will successfully obtain any Program
Patent.
(b) Perfection of Interest. Each party agrees to cooperate with the
other and take all reasonable additional actions and execute such agreements,
instruments, and documents as may be reasonably required to perfect the other's
ownership interest in accordance with the intent of this Agreement including,
without limitation, the execution of necessary and appropriate instruments of
assignment.
(c) Patent Marking. Each party shall mark, if necessary, all Products
manufactured, used or sold under the terms of this Agreement, or their
containers, in accordance with the applicable patent marking laws, as required.
5.3 Infringement of Patents by Third Parties. Infringement of Sumitomo
Patents, Tularik Patents or Program Patents by third parties as well
infringement of third party patents by Sumitomo shall be governed by the
provisions of the License Agreement.
Article 6
Publication; Publicity
6.1 Publication. Each party to this Agreement recognizes that the
publication of papers, including oral presentations and abstracts, regarding the
Program Know-How and the Program Patents, subject to reasonable controls to
protect Confidential Information, will be beneficial to both parties.
Accordingly, each party shall have the right to review and approve any paper
proposed for publication by the other party, including oral presentations and
abstracts, which utilizes data generated from the Program and/or includes
Program Know-How or Confidential Information of the other party. Before any
such paper is presented or submitted for publication, the party proposing
publication shall deliver a complete copy to the other party at least [ * ]
prior to presenting the paper to a publisher. The receiving party shall review
any such paper and give its comments to the publishing party within [ * ] of the
delivery of such paper to the receiving party. With respect to oral
presentation materials and abstracts, the parties shall make reasonable efforts
to expedite review of such materials and abstracts, and shall return such items
as soon as practicable to the publishing party with appropriate comments, if
any, but in no event later than [ * ] from the delivery date thereof to the
receiving party. The publishing party shall comply with the other party's
request to delete references to such other party's Confidential Information in
any such paper and agrees to withhold publication of same an additional [ * ] in
order to permit the parties to obtain patent protection, if either of the
parties deem it necessary, in accordance with the terms of this Agreement.
6.2 Publicity. Except as otherwise provided herein or required by law, no
party shall originate any publication, news release or other public
announcement, written or oral, whether in the public press, or stockholders'
reports, or otherwise, relating to the existence of or the performance under
this Agreement, without the prior written approval of the other party, which
approval shall not be unreasonably withheld, but in no case shall be withheld
for longer than [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8
<PAGE>
Article 7
Transactions with Third Parties
7.1 Reciprocal Arrangements with Third Parties. In the event that Tularik
enters in an arrangement with a third party outside the Sumitomo Territory to
utilize the Tularik Assays for the identification of compounds for use within
the Field, Tularik:
(i) shall [ * ];
(ii) shall [ * ];
(iii) may [ * ]; and
(iv) will, [ * ].
7.2 Exclusive Collaboration. Sumitomo and Tularik agree that they shall
collaborate on an exclusive basis hereunder within the Field during the term of
this Agreement with respect to the Sumitomo Territory.
Article 8
Representations And Warranties
Each party hereby represents and warrants:
8.1 Corporate Power. Such party is duly organized and validly existing
under the laws of the state or country of its incorporation and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof.
8.2 Due Authorization. Such party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.
8.3 Binding Agreement. This Agreement is a legal and valid obligation
binding upon it and is enforceable in accordance with its terms. The execution,
delivery and performance of this Agreement by such party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.
8.4 Intellectual Property. Such party [ * ].
Article 9
Disclaimer Of Warranties
9.1 Tularik Disclaimer. THE TULARIK TECHNOLOGY, INCLUDING THE TULARIK
SUBSTANCES, PROVIDED HEREUNDER IS PROVIDED "AS IS" AND TULARIK EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9
<PAGE>
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without
limiting the generality of the foregoing, Tularik expressly does not warrant (i)
the success of any study or test commenced pursuant to the Program, or (ii) the
safety or usefulness for any purpose of Tularik Technology or the Program Know-
How.
9.2 Sumitomo Disclaimer. THE SUMITOMO TECHNOLOGY, INCLUDING THE SUMITOMO
SUBSTANCES, PROVIDED HEREUNDER ARE PROVIDED "AS IS" AND SUMITOMO EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL
CASES WITH RESPECT THERETO. Without limiting the generality of the foregoing,
Sumitomo expressly does not warrant the safety or usefulness for any purpose of
the Sumitomo Technology or the Program Know-How.
Article 10
Indemnification
10.1 Indemnification by Tularik. Subject to Section 10.2 below, Tularik
hereby agrees to indemnify, hold harmless and defend Sumitomo against any and
all expenses, costs or defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts Sumitomo becomes legally obligated to pay because of any claim or claims
against it to the extent that such claim or claims (i) are due to the neglect or
negligence of Tularik or (ii) result from Tularik's activities under this
Agreement, except insofar as the claim or claims arise out of the possession,
manufacture, use, sale or administration of Products by Sumitomo or Sumitomo's
Affiliates or sublicensees.
10.2 Indemnification by Sumitomo. Sumitomo hereby agrees to indemnify,
hold harmless and defend Tularik against any and all expenses, costs of defense
(including without limitation attorneys' fees, witness fees, damages, judgments,
fines and amounts paid in settlement) and any amounts Tularik becomes legally
obligated to pay because of any claim or claims against it to the extent that
such claim or claims (i) are due to the neglect or negligence of Sumitomo or
(ii) result from Sumitomo's activities under this Agreement, except insofar as
the claim or claims arise out of the possession, manufacture, use, sale or
administration of the Products by Tularik or Tularik's Affiliates or
sublicensees.
Article 11
Confidentiality
11.1 Confidential Information; Exceptions. During the term of this
Agreement, and for a period of five (5) years after termination thereof, each
party will maintain all Confidential Information in trust and confidence and
will not disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose; in particular, Sumitomo
shall not use the Tularik Know-How or the Tularik-owned Program Know-How, and
Tularik shall not use the Sumitomo Know-How or the Sumitomo-owned Program Know-
How, for the manufacture or sale of any products other than the Products, except
as expressly
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10
<PAGE>
authorized by this Agreement. Each party may use such Confidential Information
only to the extent required to accomplish the purposes of this Agreement or to
the extent required by law, regulation or government or judicial order.
Confidential Information shall not be used for any purpose or in any manner that
would constitute a violation of any laws or regulations, including without
limitation the export control laws of the United States. Confidential
Information shall not be reproduced in any form except as required to accomplish
the intent of this Agreement. No Confidential Information shall be disclosed to
any employee, agent, consultant, Affiliate, or sublicensee who does not have a
need for such information. Each party will use at least the same standard of
care as it uses to protect proprietary or confidential information of its own to
ensure that such employees, agents, consultants and clinical investigators do
not disclose or make any unauthorized use of the Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.
Confidential Information shall not include any information which:
(a) is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available;
(b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;
(c) is hereafter furnished to the receiving party by a third party, as
a matter of right and without restriction on disclosure;
(d) is independently developed by the receiving party without any
breach of this Agreement; or
(e) is the subject of a written permission to disclose provided by the
disclosing party.
11.2 Financial Terms. The parties agree that the material financial terms
of the Agreement will be considered Confidential Information of both parties.
Notwithstanding the foregoing, either party may disclose such terms to bona fide
potential sublicensees, if necessary. In connection with any such disclosure,
each party agrees to use its best efforts to secure confidential treatment of
such information. Tularik shall have the further right to disclose the material
financial terms of the Agreement to any potential acquiror, merger partner, or
other bona fide potential financial partner, subject to a requirement of best
efforts to secure confidential treatment of such information.
Article 12
Import And Export Controls
12.1 United States Laws. The parties understand and acknowledge that each
of them is subject to regulation by agencies of the U.S. government, including
the U.S. Department of Commerce, which prohibit export, re-export or diversion
of certain products and technology to certain countries. Any and all
obligations of Sumitomo or Tularik to provide access to or license
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11
<PAGE>
any technology pursuant to this Agreement, as well as any technical assistance
shall be subject in all respects to such United States laws and regulations as
shall from time to time govern the license and delivery of technology and
products abroad by persons subject to the jurisdiction of the United States,
including the Export Administration Act of 1979, as amended, any successor or
interim controlling legislation, and the Export Administration Regulations
issued by the Department of Commerce, International Trade Administration, Bureau
of Export Administration. Both parties also agree to comply with the
requirements of the U.S. Foreign Corrupt Practices Act (the "Act") and shall
refrain from making any payments to third parties which would cause Sumitomo or
Tularik to violate the Act.
12.2 Non-United States Laws. Sumitomo and Tularik shall each provide the
other party with such reasonable assistance as may be required for the party
requesting such assistance to comply with all non-United States laws,
ordinances, rules, regulations and the like of all governmental units or
agencies having jurisdiction pertaining to this Agreement, including without
limitation, obtaining all import, export and other permits, certificates,
licenses or the like required by such non-United States laws, ordinances, rules,
regulations and the like, necessary to permit the parties to perform hereunder
and to exercise their respective rights hereunder.
Article 13
Term; Termination
13.1 Term. Except as provided under Section 13.2 below, (a) the term of
this Agreement shall commence upon the Effective Date and shall expire on the
expiration date of the last to expire patent licensed by Sumitomo to Tularik
hereunder and (b) upon expiration of this Agreement, Tularik shall [ * ].
13.2 Termination on Material Breach. If either party materially breaches
the Agreement, including without limitation [ * ], and the breaching party has
not (i) cured the breach or (ii) initiated good faith efforts to cure such
breach to the reasonable satisfaction of the non-breaching party, within [ * ]
of notice of breach from the non-breaching party, the non-breaching party may
terminate this Agreement upon expiration of such [ * ] period.
13.3 Surviving Rights. The obligations and rights of the parties under
Sections 4.2, 4.3, 4.4 and Articles 5, 6 (for the period specified in Section
4.1(b)), 9, 10, 11 (for the period specified therein) and 12 shall survive
termination. Article 7 shall survive termination and shall continue so long as
the License Agreement shall be in effect.
13.4 Accrued Rights; Surviving Obligations. The termination,
relinquishment or expiration of the 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 any 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.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
12
<PAGE>
Article 14
Miscellaneous
14.1 Waiver. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent or similar breach or default.
14.2 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns;
provided, however, that neither party shall assign any of its rights and
obligations hereunder except (i) as incident to the merger, consolidations,
reorganization, or acquisition of stock or assets affecting substantially all of
the assets or actual voting control of the assigning party, or (ii) to an
Affiliate; provided, however, that in no event shall either party's obligations
under the Program be assigned to an Affiliate without prior written consent of
the other party.
14.3 Notices. Any notice or other communication required or permitted to
be given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective on the date of delivery if delivered in
person or by facsimile or five (5) days after mailing by registered or certified
mail, postage paid, to the other party at the following address:
In the case of Tularik: Tularik Inc.
270 E. Grand Ave.
S. San Francisco, CA 94080
Fax: (415) 615-4222
Attention: President
with a copy to: Cooley Godward Castro Huddleson & Tatum
Five Palo Alto Square
Palo Alto, CA 94306
Fax: (415) 857-0663
Attention: Brian C. Cunningham, Esq.
In the case of Sumitomo: Sumitomo Pharmaceuticals Co., Ltd..
2-8, Doshomachi 2-chome Chuo-ku
Osaka 541, Japan
Fax: (06) 202-7370
Attention: Corporate Planning Dept.
Either party may change its address for communications by a notice to the other
party in accordance with this section.
14.4 Headings. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
14.5 Amendment. No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by both parties.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13
<PAGE>
14.6 Construction of Agreement and Choice of Law, Jurisdiction and
Venue.
(a) This Agreement and its terms and conditions shall be
governed exclusively by and construed according to the laws of California,
U.S.A., excluding its choice of law provisions and also excluding the United
Nations Convention on Contracts for the International Sale of Goods. The
official text of the Agreement and any Notices given or accounts or statements
required hereby shall be in English.
(b) All disputes which may arise between the parties hereto in
relation to the interpretation or administration of this Agreement shall be
first referred to the Research Committee for resolution. Any disputes which the
Research Committee shall be unable to resolve with a reasonable period of time
shall be resolved by the agreement of the Chief Executive Officers of the
respective parties or their delegates. Any disputes which cannot be resolved in
this manner shall be finally resolved in the courts in San Francisco, California
if the action is taken by Sumitomo and in the courts in Osaka, Japan if the
action is taken by Tularik.
14.7 Force Majeure. Any delays in performance by any party under this
Agreement (other than either party's failure to pay money to the other party,
unless such failure results solely from wire transfer failures beyond the
control of the paying party, or the like) shall not be considered a breach of
this Agreement if and to the extent caused by occurrences beyond the reasonable
control of the party affected, including but not limited to acts of God,
embargoes, governmental restrictions, strikes or other concerted acts of
workers, fire, flood, explosion, riots, wars, civil disorder, rebellion or
sabotage. The party suffering such occurrence shall immediately notify the
other party as soon as practicable and any time for performance hereunder shall
be extended by the actual time of delay caused by the occurrence.
14.8 Independent Contractors. In making and performing this Agreement,
Sumitomo and Tularik act and shall act at all times as independent contractors
and nothing contained in this Agreement shall be construed or implied to create
an agency, partnership or employer and employee relationship between Tularik and
Sumitomo. At no time shall one party make commitments or incur any charges or
expenses for or in the name of the other party.
14.9 Severability. If any term, condition or provision of this Agreement
is held to be unenforceable for any reason, it shall, if possible, be
interpreted rather than voided, in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms,
conditions and provisions of this Agreement shall be deemed valid and
enforceable to the full extent.
14.10 Cumulative Rights. The rights, powers and remedies hereunder shall
be in addition to, and not in limitation of, all rights, powers and remedies
provided at law or in equity, or under any other agreement between the parties.
All of such rights, powers and remedies shall be cumulative, and may be
exercised successively or cumulatively.
14.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
14.12 Entire Agreement. This Agreement and any and all Schedules and
Appendices referred to herein embodies the entire understanding of the parties
with respect to the subject
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
14
<PAGE>
matter hereof and shall supersede all previous communications, representations
or understandings, either oral or written, between the parties relating to the
subject matter hereof.
In Witness Whereof, both Sumitomo and Tularik have executed this Agreement,
in duplicate originals, by their respective officers hereunto duly authorized,
as of the day and year hereinabove written.
Tularik Inc. Sumitomo Pharmaceuticals Co., Ltd.
By:/s/ James M. Gower By: /s/ I. Shin
------------------------- ------------------------------
Title: President and Title: President
Chief Executive Officer
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15
<PAGE>
Appendix A
RESEARCH PROGRAM
1. Sumitomo and Tularik will undertake a collaborative research program in
which Tularik will screen compounds to identify specific compounds having
promising activity for regulation of the gene encoding LDL-R using Tularik's
proprietary assay system.
2. Tularik will conduct and develop, under exclusive collaboration with Drs J.
Goldstein and M.S. Brown cell-based screening, biologically-based screening
and follow up assays; inhibition of [*]
3. Sumitomo will be primarily responsible for medicinal chemistry and
pharmacological studies.
4. Tularik will screen its proprietary chemical and natural products compounds
(at least 160,000) and Sumitomo's proprietary chemical and natural products
compounds (at least 20,000).
5. The following tasks will be shared by both parties:
. isolation and determination of structure of active compounds from natural
products;
. synthesis of derivatives of lead compounds for optimization;
. evaluation of in vivo activities and comparison with [*] inhibitors,
including for example [*];
. investigation of gene-specificity and any potential tissue specificity;
. characterization as an anti-hypercholesterolemic drug in an animal model;
and
. studies on mode of action, including for example potentiation of [*]
activity, etc.
6. Details will be discussed and determined in the Research Committee.
<PAGE>
Appendix B
TULARIK ASSAYS
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Appendix C
LICENSE AGREEMENT
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Appendix C
LICENSE AGREEMENT
between
TULARIK INC.
and
SUMITOMO PHARMACEUTICALS CO., LTD.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Article 1
Definitions................................................................................. 1
Article 2
Grant....................................................................................... 2
2.1 Grant by Tularik to Sumitomo.................................................. 2
Article 3
Commercial Terms............................................................................ 3
3.1 Royalties..................................................................... 3
3.2 Royalty Term.................................................................. 3
3.3 Due Diligence................................................................. 4
3.4 Obligation to Inform.......................................................... 4
3.5 Manner and Time of Royalty Payments........................................... 4
3.6 Date and Place of Sale........................................................ 4
3.7 Further Development Activities................................................ 4
Article 4
Payments; Records; Audit.................................................................... 5
4.1 Payment; Reports.............................................................. 5
4.2 Exchange Rate; Manner and Place of Payment.................................... 5
4.3 Records and Audit............................................................. 5
4.4 Withholding of Taxes.......................................................... 5
Article 5
Ownership; Patents.......................................................................... 6
5.1 Ownership..................................................................... 6
5.2 Patents....................................................................... 6
5.3 Infringement of Patents by Third Parties...................................... 6
5.4 Infringement of Third Party Rights............................................ 7
Article 6
Publication; Publicity...................................................................... 8
6.1 Publication................................................................... 8
6.2 Publicity..................................................................... 8
Article 7
Representations And Warranties.............................................................. 8
7.1 Corporate Power............................................................... 8
7.2 Due Authorization............................................................. 8
7.3 Binding Agreement............................................................. 9
7.4 Intellectual Property......................................................... 9
Article 8
Disclaimer Of Warranties.................................................................... 9
8.1 Tularik Disclaimer............................................................ 9
Article 9
Indemnification............................................................................ 9
</TABLE>
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
i
<PAGE>
<TABLE>
<S> <C>
9.1 Indemnification by Tularik............................................ 9
9.2 Indemnification by Sumitomo........................................... 9
Article 10
Confidentiality....................................................................... 10
10.1 Confidential Information; Exceptions.................................. 10
10.2 Financial Terms....................................................... 11
Article 11
Import And Export Controls............................................................ 11
11.1 United States Laws.................................................... 11
11.2 Non-United States Laws................................................ 11
Article 12
Term; Termination..................................................................... 11
12.1 Term.................................................................. 11
12.2 Termination on Material Breach........................................ 12
12.3 Surviving Rights...................................................... 12
12.4 Accrued Rights; Surviving Obligations................................. 12
Article 13
Miscellaneous......................................................................... 12
13.1 Waiver................................................................ 12
13.2 Assignment............................................................ 12
13.3 Notices............................................................... 12
13.4 Headings.............................................................. 13
13.5 Amendment............................................................. 13
13.6 Construction of Agreement and Choice of Law, Jurisdiction and Venue... 13
13.7 Force Majeure......................................................... 14
13.8 Independent Contractors............................................... 14
13.9 Severability.......................................................... 14
13.10 Cumulative Rights..................................................... 14
13.11 Counterparts.......................................................... 14
13.12 Entire Agreement...................................................... 14
Appendix A: Preclinical Candidates
</TABLE>
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
ii
<PAGE>
LICENSE AGREEMENT
This Agreement is entered into as of the _____ day of _________, 1994 (the
"Effective Date") by and between Tularik Inc., a California corporation
("Tularik"), and Sumitomo Pharmaceuticals Co., Ltd. ("Sumitomo"), a corporation
organized under the laws of Japan.
Recitals
Whereas, Sumitomo and Tularik have entered into a Collaboration Agreement
dated as of __________, 1994 (the "Collaboration Agreement"); and
Whereas, the parties wish to develop and market novel therapeutic products
based on compounds identified pursuant to the Collaboration Agreement;
Now, Therefore, in consideration of the foregoing and the covenants and
promises contained herein, the parties agree as follows:
Article 1
Definitions
As used herein, the following terms shall have the following meanings:
"Affiliate" shall mean any entity that directly or indirectly Owns, is
Owned by or is under common Ownership, with a party to this Agreement, where
"Own" or "Ownership" means direct or indirect possession of at least fifty
percent (50%) of the outstanding voting securities of a corporation or a
comparable equity interest in any other type of entity.
"Agreement" shall mean this License Agreement.
"Confidential Information" shall mean, subject to the limitations set forth
in Section 11 hereof, all information disclosed to one party by the other party.
"FDA" shall mean the United States Food and Drug Administration.
"Field" shall mean therapeutic treatment of human disease [ * ].
"Low Density Lipoprotein Receptor" ("LDL-R") shall mean that sequence of
amino acids commonly characterized as Low Density Lipoprotein Receptor in the
scientific literature published as of the Effective Date.
"Net Sales" shall mean, with respect to a Product, and on a country-by-
country basis, the gross invoice price of all quantities of such Product sold by
a party, its Affiliates or sublicensees to an independent third party after
deducting, if not already deducted in the amount invoiced (a) trade, quantity
and cash discounts actually taken, (b) returns, rebates and allowances, (c)
duties, sales and excise taxes and (d) transportation and insurance charges.
With respect to sales of
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
1.
<PAGE>
combination products, which shall consist of Products combined with one or more
additional active ingredients, the parties will agree on a method of allocation
in the event the situation arises. Sales among Sumitomo and its Affiliates or
sublicensees shall not be deemed Net Sales; provided, however, that any sales by
Sumitomo, its Affiliates or sublicensees to independent third parties shall be
deemed Net Sales.
"Preclinical Candidate" shall have the meaning given it in the
Collaboration Agreement.
"Product" shall mean any pharmaceutical product, including all
formulations, line extensions or modes of administration thereof, for use within
the Field, which contains an active ingredient which is or is derived from a
Preclinical Candidate listed in Appendix A to this Agreement.
"Sumitomo Territory" shall mean Japan, China, Hong Kong, Indonesia,
Malaysia, Philippines, Korea, Taiwan and Thailand.
Each of the following terms shall have the meaning given it, respectively,
in the Collaboration Agreement:
"Program", "Program Compounds", "Program Know-How", "Program Patents",
"Program Technology", "Research Committee", "Research Term", "Sumitomo Know-
How", "Sumitomo Patents", "Sumitomo Substances", "Sumitomo Technology", "Tularik
Assays", "Tularik Know-How", "Tularik Patents", "Tularik Substances", and
"Tularik Technology".
Article 2
Grant
2.1 Grant by Tularik to Sumitomo.
(a) Subject to the terms of this Agreement, Tularik hereby grants
Sumitomo the right and license, with the right to sublicense, to develop
Preclinical Candidates and to make, have made, use and sell Products under the
Tularik Technology and the Tularik-owned and jointly owned Program Technology.
The license granted herein shall be exclusive, even as to Tularik, throughout
the Sumitomo Territory.
(b) Sumitomo may [ * ] and Tularik shall cooperate reasonably with
Sumitomo in [ * ].
(c) Appendix A hereto shall list the Preclinical Candidates and the
patents and patent applications included in the Tularik Technology and the
Tularik-owned and jointly owned Program Technology licensed hereunder.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
Article 3
Commercial Terms
3.1 Royalties.
(a) Royalty Payments. Sumitomo shall pay to Tularik a royalty of
[ * ] percent [ * ] on Net Sales [ * ].
(b) Third-Party Royalty Credit. In the event that Sumitomo is
required to make payments (including, without limitation, royalties, option fees
or license fees) to one or more third parties to obtain licenses or similar
rights to patent-protected technology necessary to make, use or sell a Product,
by reason of Sumitomo's use of Tularik Technology in such manufacture, use or
sale, Sumitomo may deduct [ * ] percent [ * ] of such payments actually made
from royalties payable to Tularik under this Section with respect to such
Product; provided, however, that in no event shall the royalties due to Tularik
be reduced by more than [ * ] percent [ * ] of the amount of royalties otherwise
owed in any given [ * ] period. Unused royalty credits may be carried over from
one royalty period to the next, subject to the latter [ * ] percent [ * ]
limitation set forth above.
3.2 Royalty Term.
(a) Non-Patented Products. In any country where the manufacture, use
or sale of a Product is not covered by a Program Patent or Tularik Patent,
royalties shall be payable in such country until the expiration of seven (7)
years from the date of first commercial sale of such Product in such country.
(b) Patented Products. In any country where the manufacture, use or
sale of a Product is covered by a Program Patent or Tularik Patent, royalties
shall be payable in such country until the later of (i) seven (7) years from the
first commercial sale of such Product in such country and (ii) the expiration of
the last to expire of such Program Patent or Tularik Patent.
3.3 Due Diligence. Sumitomo shall devote the same degree of attention,
resources and diligence to its respective obligations under the Program and its
efforts to develop, manufacture, market and sell one Product in the Sumitomo
Territory as it devotes to other compounds of its own development.
3.4 Obligation to Inform. Each party hereby agrees to keep the other
party fully informed on a reasonable basis of the development of all Preclinical
Candidates and Products, including but not limited to periodic written updates
on the progress of each filing with the FDA or its equivalent in its respective
territories.
3.5 Manner and Time of Royalty Payments. All royalty payments due
hereunder shall be made in accordance with the provisions of Article 4 hereof.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
3.6 Date and Place of Sale. Products shall be considered sold when
invoiced by Sumitomo. The obligation to pay royalties on Net Sales of a Product
shall be imposed only once with respect to the same unit of such Product.
3.7 Further Development Activities.
(a) The parties will discuss from time to time as necessary
allocation of responsibility, including costs, for conducting preclinical
development of the Product, including the following tasks:
(i) [ * ]
(ii) [ * ]
(iii) [ * ]
(iv) [ * ]
(v) [ * ]
(vi) [ * ]
(b) Sumitomo shall be responsible for conducting or having conducted
clinical trials in the Sumitomo Territory.
Article 4
Payments; Records; Audit
4.1 Payment; Reports. All amounts payable to Tularik under this Agreement
shall be paid in U.S. Dollars within [ * ] of the end of each [ * ]. Each
payment of royalties shall be accompanied by a statement of the amount of Net
Sales during such period, the amount of aggregate Net Sales to date as of the
end of such period where necessary in determination of royalty rates, and the
amount of royalties due on such sales. Tularik hereby agrees that [ * ].
4.2 Exchange Rate; Manner and Place of Payment. Royalty payments and
reports for the sale of Products shall be made for each [ * ] period ending on
the last day of [ * ]. Exchange conversion for foreign sales into U.S. Dollars
shall be made as necessary at the rate of exchange on the last business day of
the relevant royalty period, established by the [ * ]. All payments owed under
this Agreement shall be made by telegraphic transfer.
4.3 Records and Audit. During the term of this Agreement and for a period
of three (3) years thereafter, Sumitomo shall keep complete and accurate records
pertaining to the sale or other disposition of the Products commercialized by
it, in sufficient detail to permit Tularik to confirm the accuracy of all
payments due hereunder. Tularik shall have the right to cause an independent,
certified public accountant to audit such records to confirm Sumitomo's Net
Sales and royalty payments; provided, however, that such auditor shall not
disclose Sumitomo's confidential information to Tularik, except to the extent
such disclosure is necessary to verify the amount of
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
royalties due under this Agreement. Such audits may be exercised once a year,
within three (3) years after the royalty period to which such records relate,
upon notice to Sumitomo and during normal business hours. Tularik shall bear the
full cost of such audit unless such audit discloses a variance of more than [ *
] from the amount of the Net Sales or royalties previously paid. In such case,
Sumitomo shall bear the full cost of such audit. The terms of this Section 4.3
shall survive any termination or expiration of this Agreement for a period of
three (3) years.
4.4 Withholding of Taxes. Any withholding of taxes levied by Japanese tax
authorities on the payments hereunder shall [ * ].
Article 5
Ownership; Patents
5.1 Ownership. Sumitomo acknowledges and agrees that Tularik is and shall
remain the sole owner of the Tularik Technology and the Tularik Substances and
that Sumitomo has no rights in or to any of them other than the license rights
specifically granted herein.
5.2 Patents. Provision is made in the Collaboration Agreement for the
filing, prosecution and maintenance of Program Patents and such matters shall be
governed thereby.
5.3 Infringement of Patents by Third Parties.
(a) Notice. Each party shall promptly notify the other in writing of
any alleged or threatened infringement of the Tularik Patents, the Sumitomo
Patents, or the Program Patents which may adversely impact the rights of the
parties hereunder, of which it becomes aware.
(b) Separately Owned Patents. Tularik shall have the right, but not
the obligation, to bring at its expense an appropriate action against any person
or entity directly or contributorily infringing a Tularik Patent or a Program
Patent owned solely by Tularik in the Sumitomo Territory. In such event,
Sumitomo hereby agrees to cooperate reasonably with Tularik in any such efforts.
Any recovery obtained by Tularik as a result of such action, whether obtained by
settlement or otherwise, shall be disbursed as follows: [ * ]. No settlement,
compromise or other disposition of any such action which compromises Sumitomo's
rights under this Agreement shall be entered into without Sumitomo's prior
consent, which shall not be unreasonably withheld. In the event Tularik fails
to institute an infringement suit or take other reasonable action in the
Territory to protect such relevant Tularik Patent or Program Patent owned solely
by Tularik, Sumitomo shall have the right, but not the obligation, within [ * ]
of notification to Tularik of such alleged infringement, to institute such suit
or take other appropriate action at its own expense in the name of Tularik or
Sumitomo, or both. [ * ]. In such event, Tularik shall cooperate reasonably
with Sumitomo. Any recovery obtained by Sumitomo as a result of such
proceeding, by settlement or otherwise, shall be disbursed as follows: [ * ].
No settlement, compromise or other disposition of any such proceeding which
concerns the validity of any Patent or Program Patent shall be entered into
without the Patent or Program Patent owner's prior consent, which shall not be
unreasonably withheld.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
(c) Jointly Owned Patents. In the event that the parties become aware
of any alleged or threatened infringement of the jointly owned Program Patents
in either party's Territory, the party in whose Territory the infringement is
occurring shall have the right to bring, at such party's expense, an appropriate
action against any person or entity directly or contributorily infringing such
jointly owned Program Patent. In such event, the other party hereby agrees to
cooperate reasonably with the party bringing such action in any such efforts,
including if required to bring such action, the furnishing of a power of
attorney. In the event the party in whose Territory the infringement is
occurring fails to institute an infringement suit or take other reasonable
action to protect the relevant Program Patent, the other party shall have the
right, upon [ * ] of notification of the party in whose Territory the
infringement is occurring, to institute such suit or take other appropriate
action at its own expense in its own name, the joint owner's name, or both. In
such event, the party not bringing such action hereby agrees to cooperate
reasonably with the party bringing such action in any such effort, including if
required to bring such action, the furnishing of a power of attorney.
Regardless of which party brings the action, any recovery obtained by settlement
or otherwise shall be disbursed as follows: [ * ].
5.4 Infringement of Third Party Rights.
(a) Joint Strategy. In the event that any Product manufactured or
sold hereunder becomes the subject of a claim for patent, copyright or other
proprietary right infringement anywhere in the world, and irrespective of
whether Sumitomo or Tularik is charged with said infringement, and the venue of
such claim, the parties shall promptly confer to discuss the claim.
(b) Defense. The party responsible for marketing the Product which is
the subject of the infringement claim shall have the right, but not the
obligation, to assume the primary responsibility for the conduct of the defense
of any such claim. If the party responsible for marketing the Product decides
not to assume responsibility for the conduct of the defense, the other party
shall have the right, but not the obligation, to conduct the defense of the
claim. The party which decides to assume responsibility for such defense shall
bear all costs for the conduct thereof. In such event, the other party shall
have the right, but not the obligation, to participate in any such suit, at its
sole option and at its own expense. Each party shall reasonably cooperate with
the party conducting the defense of the claim, including if required to conduct
such defense, furnishing a power of attorney. Neither party shall enter into
any settlement that affects the other party's rights or interests without such
other party's written consent, which consent shall not be unreasonably withheld.
Article 6
Publication; Publicity
6.1 Publication. Each party to this Agreement recognizes that the
publication of papers, including oral presentations and abstracts, regarding the
Program Know-How and the Program Patents, subject to reasonable controls to
protect Confidential Information, will be beneficial to both parties.
Accordingly, each party shall have the right to review and approve any paper
proposed for publication by the other party, including oral presentations and
abstracts, which utilizes data generated from the Program and/or includes
Program Know-How or
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
Confidential Information of the other party. Before any such paper is presented
or submitted for publication, the party proposing publication shall deliver a
complete copy to the other party at least [ * ] prior to presenting the paper to
a publisher. The receiving party shall review any such paper and give its
comments to the publishing party within [ * ] of the delivery of such paper to
the receiving party. With respect to oral presentation materials and abstracts,
the parties shall make reasonable efforts to expedite review of such materials
and abstracts, and shall return such items as soon as practicable to the
publishing party with appropriate comments, if any, but in no event later than
[ * ] from the delivery date thereof to the receiving party. The publishing
party shall comply with the other party's request to delete references to such
other party's Confidential Information in any such paper and agrees to withhold
publication of same an additional [ * ] in order to permit the parties to obtain
patent protection, if either of the parties deem it necessary, in accordance
with the terms of this Agreement.
6.2 Publicity. Except as otherwise provided herein or required by law, no
party shall originate any publication, news release or other public
announcement, written or oral, whether in the public press, or stockholders'
reports, or otherwise, relating to the existence of or the performance under
this Agreement, without the prior written approval of the other party, which
approval shall not be unreasonably withheld, but in no case shall be withheld
for longer than fifteen (15) days.
Article 7
Representations And Warranties
Each party hereby represents and warrants:
7.1 Corporate Power. Such party is duly organized and validly existing
under the laws of the state or country of its incorporation and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof.
7.2 Due Authorization. Such party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.
7.3 Binding Agreement. This Agreement is a legal and valid obligation
binding upon it and is enforceable in accordance with its terms. The execution,
delivery and performance of this Agreement by such party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.
7.4 Intellectual Property. Such party [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
Article 8
Disclaimer Of Warranties
8.1 Tularik Disclaimer. THE TULARIK TECHNOLOGY LICENSED HEREUNDER IS
PROVIDED "AS IS" AND TULARIK EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO.
Article 9
Indemnification
9.1 Indemnification by Tularik. Subject to Section 9.2 below, Tularik
hereby agrees to indemnify, hold harmless and defend Sumitomo against any and
all expenses, costs or defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts Sumitomo becomes legally obligated to pay because of any claim or claims
against it to the extent that such claim or claims (i) are due to the neglect
or negligence of Tularik or (ii) result from Tularik's activities under this
Agreement, except insofar as the claim or claims arise out of the possession,
manufacture, use, sale or administration of Preclinical Candidates or Products
by Sumitomo or Sumitomo's Affiliates or sublicensees.
9.2 Indemnification by Sumitomo. Sumitomo hereby agrees to indemnify,
hold harmless and defend Tularik against any and all expenses, costs of defense
(including without limitation attorneys' fees, witness fees, damages, judgments,
fines and amounts paid in settlement) and any amounts Tularik becomes legally
obligated to pay because of any claim or claims against it to the extent that
such claim or claims (i) are due to the neglect or negligence of Sumitomo or
(ii) result from Sumitomo's activities under this Agreement, except insofar as
the claim or claims arise out of the possession, manufacture, use, sale or
administration of the Preclinical Candidates or Products by Tularik or Tularik's
Affiliates or sublicensees.
Article 10
Confidentiality
10.1 Confidential Information; Exceptions. During the term of this
Agreement, and for a period of five (5) years after termination thereof, each
party will maintain all Confidential Information in trust and confidence and
will not disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose; in particular, Sumitomo
shall not use the Tularik Know-How or the Tularik-owned Program Know-How, and
Tularik shall not use the Sumitomo Know-How or the Sumitomo-owned Program Know-
How, for the manufacture or sale of any products other than the Products, except
as expressly authorized by this Agreement. Each party may use such Confidential
Information only to the extent required to accomplish the purposes of this
Agreement or to the extent required by law, regulation or government or judicial
order. Confidential Information shall not be used for any purpose or in any
manner that would constitute a violation of any laws or regulations, including
without limitation the export control laws of the United States. Confidential
Information shall not be reproduced in any form except as required to accomplish
the intent of this Agreement. No Confidential Information shall be disclosed to
any employee, agent, consultant, Affiliate, or sublicensee who does not have a
need for such information. Each party will use at least the same standard of
care as it uses to protect proprietary or confidential information of its own to
ensure
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
that such employees, agents, consultants and clinical investigators do
not disclose or make any unauthorized use of the Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.
Confidential Information shall not include any information which:
(a) is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available;
(b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;
(c) is hereafter furnished to the receiving party by a third party, as
a matter of right and without restriction on disclosure;
(d) is independently developed by the receiving party without any
breach of this Agreement; or
(e) is the subject of a written permission to disclose provided by the
disclosing party.
10.2 Financial Terms. The parties agree that the material financial terms
of this Agreement will be considered Confidential Information of both parties.
Notwithstanding the foregoing, either party may disclose such terms to bona fide
potential sublicensees, if necessary. In connection with any such disclosure,
each party agrees to use its best efforts to secure confidential treatment of
such information. Each party shall have the further right to disclose the
material financial terms of the Agreement to any potential acquiror, merger
partner, or other bona fide potential financial partner, subject to a
requirement of best efforts to secure confidential treatment of such
information.
Article 11
Import And Export Controls
11.1 United States Laws. The parties understand and acknowledge that each
of them is subject to regulation by agencies of the U.S. government, including
the U.S. Department of Commerce, which prohibit export, re-export or diversion
of certain products and technology to certain countries. Any and all
obligations of Sumitomo or Tularik to provide access to or license any
technology pursuant to this Agreement, as well as any technical assistance shall
be subject in all respects to such United States laws and regulations as shall
from time to time govern the license and delivery of technology and products
abroad by persons subject to the jurisdiction of the United States, including
the Export Administration Act of 1979, as amended, any successor or interim
controlling legislation, and the Export Administration Regulations issued by the
Department of Commerce, International Trade Administration, Bureau of Export
Administration. Both parties also agree to comply with the requirements of the
U.S. Foreign Corrupt Practices Act (the "Act") and shall refrain from making any
payments to third parties which would cause Sumitomo or Tularik to violate the
Act.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
11.2 Non-United States Laws. Sumitomo and Tularik shall each provide the
other party with such reasonable assistance as may be required for the party
requesting such assistance to comply with all non-United States laws,
ordinances, rules, regulations and the like of all governmental units or
agencies having jurisdiction pertaining to this Agreement, including without
limitation, obtaining all import, export and other permits, certificates,
licenses or the like required by such non-United States laws, ordinances, rules,
regulations and the like, necessary to permit the parties to perform hereunder
and to exercise their respective rights hereunder.
Article 12
Term; Termination
12.1 Term. Except as provided under Section 12.2 below, (a) the term of
this Agreement shall commence upon the Effective Date and shall expire on the
expiration date of the last to expire royalty obligation, and (b) upon
expiration of this Agreement, Sumitomo shall have a fully paid, nonexclusive
license to use any Program Know-How then being used by Sumitomo and which is
owned by Tularik, for any purpose; provided, however, that [ * ].
12.2 Termination on Material Breach. If either party materially breaches
the Agreement, including without limitation [ * ], and the breaching party has
not (i) cured the breach or (ii) initiated good faith efforts to cure such
breach to the reasonable satisfaction of the non-breaching party, within [ * ]
of notice of breach from the non-breaching party, the non-breaching party may
terminate this Agreement upon expiration of such [ * ] period.
12.3 Surviving Rights. The obligations and rights of the parties under
Sections 4.3, 4.4 and 5.1 and Articles 6, 8, 9, 10 (for the period specified
therein) and 11 shall survive termination.
12.4 Accrued Rights; Surviving Obligations. The termination,
relinquishment or expiration of the 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 any 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 13
Miscellaneous
13.1 Waiver. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent or similar breach or default.
13.2 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns;
provided, however, that neither party shall assign any of its rights and
obligations hereunder except (i) as incident to the merger, consolidations,
reorganization, or acquisition of stock or assets affecting substantially all of
the assets or actual voting control of the assigning party, or (ii) to an
Affiliate; provided, however,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
that in no event shall either party's obligations under the Program be assigned
to an Affiliate without prior written consent of the other party.
13.3 Notices. Any notice or other communication required or permitted to
be given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective on the date of delivery if delivered in
person or by facsimile or five (5) days after mailing by registered or certified
mail, postage paid, to the other party at the following address:
In the case of Tularik: Tularik Inc.
270 E. Grand Ave.
S. San Francisco, CA 94080
Fax: (415) 615-4222
Attention: President
with a copy to: Cooley Godward Castro Huddleson & Tatum
Five Palo Alto Square
Palo Alto, CA 94306
Fax: (415) 857-0663
Attention: Brian C. Cunningham, Esq.
In the case of Sumitomo: Sumitomo Pharmaceuticals Co., Ltd..
2-8, Doshomachi 2-chome Chuo-ku
Osaka 541, Japan
Fax: (06) 202-7370
Attention: Corporate Planning Dept.
Either party may change its address for communications by a notice to the other
party in accordance with this section.
13.4 Headings. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
13.5 Amendment. No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by both parties.
13.6 Construction of Agreement and Choice of Law, Jurisdiction and Venue.
(a) This Agreement and its terms and conditions shall be governed
exclusively by and construed according to the laws of California, U.S.A.,
excluding its choice of law provisions and also excluding the United Nations
Convention on Contracts for the International Sale of Goods. The official text
of the Agreement and any Notices given or accounts or statements required hereby
shall be in English.
(b) All disputes which may arise between the parties hereto in
relation to the interpretation or administration of this Agreement shall be
first referred to the Research Committee for resolution. Any disputes which the
Research Committee shall be unable to
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11.
<PAGE>
resolve with a reasonable period of time shall be resolved by the agreement of
the Chief Executive Officers of the respective parties or their delegates. Any
disputes which cannot be resolved in this manner shall be finally resolved in
the courts in San Francisco, California if the action is taken by Sumitomo and
in the courts in Osaka, Japan if the action is taken by Tularik.
13.7 Force Majeure. Any delays in performance by any party under this
Agreement (other than either party's failure to pay money to the other party,
unless such failure results solely from wire transfer failures beyond the
control of the paying party, or the like) shall not be considered a breach of
this Agreement if and to the extent caused by occurrences beyond the reasonable
control of the party affected, including but not limited to acts of God,
embargoes, governmental restrictions, strikes or other concerted acts of
workers, fire, flood, explosion, riots, wars, civil disorder, rebellion or
sabotage. The party suffering such occurrence shall immediately notify the
other party as soon as practicable and any time for performance hereunder shall
be extended by the actual time of delay caused by the occurrence.
13.8 Independent Contractors. In making and performing this Agreement,
Sumitomo and Tularik act and shall act at all times as independent contractors
and nothing contained in this Agreement shall be construed or implied to create
an agency, partnership or employer and employee relationship between Tularik and
Sumitomo. At no time shall one party make commitments or incur any charges or
expenses for or in the name of the other party.
13.9 Severability. If any term, condition or provision of this Agreement
is held to be unenforceable for any reason, it shall, if possible, be
interpreted rather than voided, in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms,
conditions and provisions of this Agreement shall be deemed valid and
enforceable to the full extent.
13.10 Cumulative Rights. The rights, powers and remedies hereunder shall
be in addition to, and not in limitation of, all rights, powers and remedies
provided at law or in equity, or under any other agreement between the parties.
All of such rights, powers and remedies shall be cumulative, and may be
exercised successively or cumulatively.
13.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
13.12 Entire Agreement. This Agreement and any and all Schedules and
Appendices referred to herein embodies the entire understanding of the parties
with respect to the subject matter hereof and shall supersede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
12.
<PAGE>
In Witness Whereof, both Sumitomo and Tularik have executed this Agreement,
in duplicate originals, by their respective officers hereunto duly authorized,
as of the day and year hereinabove written.
Tularik Inc. Sumitomo Pharmaceuticals Co., Ltd.
By:________________________________ By:_________________________________
Title: President and Title: President
Chief Executive Officer
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13.
<PAGE>
Appendix A
PRECLINICAL CANDIDATE
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.7
AMENDMENT NO. 2 TO RESEARCH, COLLABORATION
AND LICENSE/DEVELOPMENT AGREEMENT
BETWEEN TULARIK INC. AND
TAISHO PHARMACEUTICAL CO., LTD.
THIS AMENDMENT NO. 2 (this "Amendment") to the Research, Collaboration and
License/Development Agreement dated as of March 20, 1996 (the "Collaboration
Agreement") by and between Tularik Inc., a Delaware corporation with its
principal office at Two Corporate Drive, South San Francisco, California 94080
(herein, together with its successors and assigns, "Tularik"), and Taisho
Pharmaceutical Co., Ltd., a Japanese corporation with its principal office at
24-1, Takata 3-chome, Toshima-ku, Tokyo 171-8633, Japan (herein, "Taisho"), is
entered into as of January 1, 1999;
W I T N E S S E T H:
WHEREAS, the parties previously entered into the Collaboration Agreement
which, inter alia, (i) established a cooperative research and development
----- ----
relationship in order to discover, develop and market novel products whose
action is based upon the regulation of Signal Transducers and Activators of
Transcription ("STATs") involved in [ * ] functions; and (ii) set forth the
terms of licenses to products that resulted from such cooperative research and
development relationship;
WHEREAS, Tularik and Taisho desire to add and include their cooperative
research relationship to develop and market novel therapeutic products whose
action is based upon the regulation of STATs involved in [ * ] function, as
well;
WHEREAS, in order to accomplish the foregoing, the parties have agreed to
amend the Collaboration Agreement in part;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements expressed herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, Tularik and Taisho agree as follows:
1. Section 1.3 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
"Compound" shall mean (i) a substance which is identified by Tularik or Taisho
during the term of the Research Program as either inhibiting or promoting the
activity of STATs activated by [ * ]; and (ii) any such substance identified by
Tularik within [ * ] after the end of the Research Program if the Research
Program shall continue for a full six (6) years.
<PAGE>
2. Section 2.1 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
The parties agree to conduct a collaborative Research Program for identification
and development of Compounds intended for use as Drug Candidates, to be
conducted by both parties under the direction of the Research Committee. The
Research Program shall consist primarily of [ * ] to identify specific Compounds
with promising activity for regulation of STAT proteins activated by [ * ] using
Tularik Assays and other technology available to the parties and (ii) each party
endeavoring to work together to fulfill their respective obligations under
Section 2.4 below to develop Compounds through application of medicinal
chemistry and preclinical testing for commercialization of Products. For any
given year of the Research Program, the Research Program will be conducted in
accordance with an annual research plan to be approved by the parties no later
than [ * ] prior to the start of such year, upon recommendation of the Research
Committee pursuant to Section 2.2(c)(1). The initial Annual Research Plan, for
the year commencing on the Effective Date and ending on the day before the first
anniversary of the Effective Date, is attached hereto as Exhibit C. Each Annual
Research Plan may be revised by mutual consent of the parties from time to time.
3. Section 2.5 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
Program Funding. To support Tularik's activities in the Research Program, Taisho
has paid Tularik [ * ] and agrees to pay Tularik, [ * ].
4. Section 2.6 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
Termination of Research Program. Upon not later than [ * ] prior notice Taisho
may terminate the Research Program at the end of the fifth (5th) year of the
Research Program if it shall be dissatisfied, in its sole judgment, with the
progress or results of the Research Program. The Research Committee may
terminate the Research Program any time if it determines the Research Program is
no longer scientifically useful. In case of such an early termination by Taisho
or the Research Committee, Taisho shall be exempt from any payment(s) that would
have become due and payable after such early termination date.
5. Section 2.8 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
During the conduct of the Research Program, Taisho and Tularik agree that they
shall collaborate on an exclusive basis hereunder with respect to the
identification, using the Tularik Assays, of Compounds for use in the Field in
the Taisho Territory. This Section 2.8 shall not restrict either party's rights
to [ * ].
6. Section 3.9 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2
<PAGE>
(a) Taisho shall pay Tularik within [ * ] after the occurrence of
the following events:
[ * ] Up to an aggregate of $4 million.
(b) Taisho shall pay Tularik within [ * ] after the occurrence of
the following events:
[ * ] Up to an aggregate of $4 million.
7. Exhibit B to the Collaboration Agreement is hereby amended to read in
its entirety as follows:
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
8. Capitalized terms used herein but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Collaboration
Agreement.
9. Except as expressly modified by this Amendment, all of the terms and
conditions of the Collaboration Agreement and Amendment No. 1 to the
Collaboration Agreement shall remain in full force and effect.
10. This Amendment may be executed in two counterparts, each of which
shall be deemed an original but all of which shall be considered one and the
same instrument.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed, or caused their duly
authorized officer or representative to execute, this Amendment as of the day
and year first above written.
TULARIK INC.
By: /s/ David V. Goeddel
------------------------------------
Name: David V. Goeddel
Title: Chief Executive Officer
TAISHO PHARMACEUTICAL CO., LTD.
By: /s/ Kunihiro Kitamura
------------------------------------
Name: Kunihiro Kitamura, Ph.D.
Title: General Manager
Research Strategy and Planning Section
Medicinal Research Group
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4
<PAGE>
AMENDMENT NO. 1 TO RESEARCH, COLLABORATION
------------------------------------------
AND LICENSE/DEVELOPMENT AGREEMENT
---------------------------------
BETWEEN TULARIK INC. AND
------------------------
TAISHO PHARMACEUTICAL CO., LTD.
-------------------------------
THIS AMENDMENT NO. 1 (this "Amendment") to the Research, Collaboration
and License/Development Agreement dated as of March 20, 1996 (the "Collaboration
Agreement") by and between Tularik Inc., a Delaware corporation with its
principal office at Two Corporate Drive, South San Francisco, California 94080
(herein, together with its successors and assigns, "Tularik"), and Taisho
Pharmaceutical Co., Ltd., a Japanese corporation with its principal office at
24-1, Takata 3-chome, Toshima-ku, Tokyo 171-0033, Japan (herein, "Taisho"), is
entered into as of January 1, 1998;
W I T N E S S E T H:
WHEREAS, the parties previously entered into the Collaboration Agreement which,
inter alia, (i) established a cooperative research and development relationship
- - ----- ----
in order to discover, develop and market novel products whose action is based
upon the regulation of Signal Transducers and Activators of Transcription
("STATs") involved in [ * ]; and (ii) set forth the terms of licenses to
products that resulted from such cooperative research and development
relationship;
WHEREAS, Tularik and Taisho desire to continue their cooperative
research relationship to develop and market novel therapeutic products based on
compounds identified during such research as having immune regulatory
properties;
WHEREAS, in order to accomplish the foregoing, the parties have agreed to amend
the Collaboration Agreement in part;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements expressed herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, Tularik and Taisho agree as follows:
1. Section 1.3 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
"Compound" shall mean (i) a substance which is identified by Tularik or Taisho
during the term of the Research Program as either inhibiting or promoting the
activity of STATs activated by [ * ] and (ii) any such substance identified by
Tularik within [ * ] after the end of the Research Program [ * ]
2. Section 1.11 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
"Program Know-How" shall mean all tangible or intangible know-how, trade
secrets, inventions (whether or not patentable), data, clinical and preclinical
results, information, and any physical, chemical or biological material,
including cell lines, any replication or any part of such material, all
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
1
<PAGE>
of which is in any way derived from or developed pursuant to activities during
the course of the Research Program. Program Know-How shall not include any
know-how, trade secrets, invention, data, information or material first
developed, reduced to practice or discovered, each after any termination of the
Research Program prior to the completion of the full six (6) year term.
3. Section 1.14 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
"Research Program" shall mean the collaborative program of six (6) years, which
consists of six one (1)-year periods, of research relating to the discovery and
development of one or more Compounds, as such program is defined on Exhibit A
and as the same may be further defined, revised and implemented, from time to
time, by the parties on the recommendation of the Research Committee, and as
further described in Article 2.
4. Section 2.5 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
Program Funding. To support Tularik's activities in the Research Program, Taisho
has paid Tularik [ * ] and agrees to pay Tularik, [ * ].
5. Section 2.6 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
Termination of Research Program. Upon not later than [ * ] prior notice Taisho
may terminate the Research Program at the end of the fourth (4/th/) or the fifth
(5/th/) year of the Research Program if it shall be dissatisfied, in its sole
judgment, with the progress or results of the Research Program. The Research
Committee may terminate the Research Program any time if it determines the
Research Program is no longer scientifically useful. In case of such an early
termination by Taisho or the Research Committee, Taisho shall be exempt from any
payment(s) that would have become due and payable after such early termination
date.
6. Section 7.1 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
Term. This Agreement shall expire on the later of (i) the expiration date of the
last to expire patent licensed from Taisho to Tularik pursuant to Section 3.3(a)
and (ii) the expiration date of the last to expire royalty obligation contained
herein. Notwithstanding the foregoing, if the Research Program is terminated
prior to the completion of its full six (6) year term, this Agreement shall
terminate upon the date on which the Research Program is terminated.
7. Section 7.2 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
Extensions. The parties may extend the term of this Agreement or of the Research
Program on the written agreement of the parties. If the Research Program expires
after the full six (6) year term thereof, Taisho and Tularik shall mutually
determine whether this Agreement should survive or
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2
<PAGE>
terminate following such expiration based upon an evaluation of the promise of
Compounds identified during such term.
8. Section 12.3 of the Collaboration Agreement is hereby amended to read
in its entirety as follows:
Notices. Any notice or other communication required or permitted to be given to
either party hereto shall be in writing and shall be deemed to have been
properly given and to be effective on the date of delivery if delivered in
person or by facsimile or five (5) days after mailing by registered or certified
mail, postage paid, to the other party at the following address:
In the case of Tularik: Tularik Inc.
Two Corporate Drive
S. San Francisco, CA 94080
Fax: (650) 829-4303
Attention: Chief Executive Officer
In the case of Taisho:
Taisho Pharmaceutical Co., Ltd.,
24-1, Takata 3-chome
Toshimaku, Tokyo, 171-0033 Japan
Attention: Executive Vice President
9. Capitalized terms used herein but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Collaboration
Agreement.
10. Except as expressly modified by this Amendment, all of the terms and
conditions of the Collaboration Agreement shall remain in full force and effect.
11. This Amendment may be executed in two counterparts, each of which
shall be deemed an original but all of which shall be considered one and the
same instrument.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed, or caused their duly
authorized officer or representative to execute, this Amendment as of the day
and year first above written.
TULARIK INC.
By: /s/ David V. Goeddel
-----------------------------------------
Name: David V. Goeddel
Title: Chief Executive Officer
TAISHO PHARMACEUTICAL CO., LTD.
By: /s/ Kunihiro Kitamura
-----------------------------------------
Name: Kunihiro Kitamura
Title: General Manager, Research Strategy and Planning Section,
Medicinal Research Group
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4
<PAGE>
RESEARCH, COLLABORATION
AND
LICENSE/DEVELOPMENT
AGREEMENT
BETWEEN
TULARIK INC.
AND
TAISHO PHARMACEUTICAL CO., LTD.
RESEARCH, COLLABORATION
AND
LICENSE/DEVELOPMENT AGREEMENT
[*] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to Rule
406 of the Securities Act of 1933, as amended.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Article 1. Definitions............................................................ 1
1.1 "Agreement"........................................................... 1
1.2 "Annual Research Plan"................................................ 1
1.3 "Compound"............................................................ 1
1.4 "Confidential Information"............................................ 2
1.5 "Drug Candidate"...................................................... 2
1.6 "Field"............................................................... 2
1.7 "MHW"................................................................. 2
1.8 "NDA"................................................................. 2
1.9 "Net Sales"........................................................... 2
1.10 "Product"............................................................. 2
1.11 "Program Know-How".................................................... 2
1.12 "Program Patents"..................................................... 3
1.13 "Research Committee".................................................. 3
1.14 "Research Program".................................................... 3
1.15 "Taisho Compound Library"............................................. 3
1.16 "Taisho Know-How"..................................................... 3
1.17 "Taisho Licensed Technology".......................................... 3
1.18 "Taisho Patents"...................................................... 3
1.19 "Taisho Territory".................................................... 4
1.20 "Tularik Assays"...................................................... 4
1.21 "Tularik Compound Library"............................................ 4
1.22 "Tularik Know-How".................................................... 4
1.23 "Tularik Licensed Technology"......................................... 4
1.24 "Tularik Patents"..................................................... 4
1.25 "Tularik Territory"................................................... 5
Article 2. Research Program....................................................... 5
2.1 Objectives; Annual Research Plan...................................... 5
2.2 Research Committee.................................................... 6
2.3 Use of Taisho Compound Library........................................ 6
2.4 Research Diligence.................................................... 7
2.5 Program Funding....................................................... 7
2.6 Termination of Research Program....................................... 7
2.7 Right to Conduct Research............................................. 7
2.8 Exclusive Research Collaboration...................................... 7
Article 3. Development; Intellectual Property Rights; Payment Obligations......... 7
3.1 Development........................................................... 7
3.2 License to Taisho of Tularik Licensed Technology...................... 8
3.3 License to Tularik of Taisho Licensed Technology...................... 8
3.4 Sublicenses........................................................... 8
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
i.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
3.5 Use Limitation of Compound Libraries.................................. 8
3.6 Nonuse of the Other Party's Technology Outside of the Field........... 9
3.7 Use of a Party's Own Substances....................................... 9
3.8 Development and Commercialization Diligence........................... 9
3.9 Benchmark Payments.................................................... 10
3.10 Royalties............................................................. 10
3.11 Payment; Reports...................................................... 11
3.12 Exchange Rate; Manner and Place of Payment............................ 11
3.13 Records and Audit..................................................... 11
3.14 Withholding of Taxes.................................................. 12
3.15 Reciprocal Arrangements with Third Parties............................ 12
3.16 Exclusive Development and Commercialization Collaboration............. 13
Article 4. Publication............................................................ 13
Article 5. Confidentiality........................................................ 13
5.1 Confidential Information; Exceptions.................................. 13
5.2 Financial Terms....................................................... 14
Article 6. Patents And Patent Applications........................................ 14
6.1 Ownership............................................................. 14
6.2 Patents............................................................... 15
6.3 Assignments........................................................... 16
6.4 No Representation..................................................... 16
6.5 Infringement of Patents by Third Parties.............................. 16
6.6 Infringement of Third Party Rights.................................... 18
Article 7. Term And Termination Of Agreement...................................... 19
7.1 Term.................................................................. 19
7.2 Extensions............................................................ 19
7.3 Termination for Material Breach....................................... 19
7.4 Insolvency or Bankruptcy.............................................. 19
7.5 Accrued Rights, Surviving Obligations................................. 19
Article 8. Indemnity.............................................................. 20
8.1 Product Liability Indemnity by Taisho................................. 20
8.2 Product Liability Indemnity by Tularik................................ 20
Article 9. Representations And Warranties......................................... 20
9.1 Taisho Representations, Warranties and Indemnities.................... 20
9.2 Tularik Representations, Warranties and Indemnities................... 21
Article 10. Import And Export Controls............................................ 22
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
ii.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
10.1 United States Laws.................................................... 22
10.2 Non-United States Laws................................................ 23
Article 11. Limitations Of Liability.............................................. 23
Article 12. Miscellaneous Provisions.............................................. 23
12.1 Waiver................................................................ 23
12.2 Assignment............................................................ 23
12.3 Notices............................................................... 23
12.4 Headings.............................................................. 24
12.5 Amendment............................................................. 24
12.6 Construction of Agreement and Choice of Law, Jurisdiction and Venue... 24
12.7 Force Majeure......................................................... 24
12.8 Independent Contractors............................................... 25
12.9 Severability.......................................................... 25
12.10 Cumulative Rights..................................................... 25
12.11 Entire Agreement...................................................... 25
</TABLE>
Exhibit A Research Program
Exhibit B Tularik Assays
Exhibit C Initial Annual Research Plan
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
iii.
<PAGE>
RESEARCH, COLLABORATION
AND
LICENSE/DEVELOPMENT AGREEMENT
This Agreement is entered into as of the 20th day of March 1996, ("Effective
Date") by and between Tularik Inc., a California corporation having its
principal place of business at 270 East Grand Avenue, South San Francisco,
California 94080, U.S.A. ("Tularik"), and Taisho Pharmaceutical Co., Ltd., a
Japanese corporation, having its head office at 24-1, Takata 3-chome, Toshima-
ku, Tokyo 171, Japan ("Taisho").
Recitals
Whereas, Tularik is engaged in the research and development of therapeutic
pharmaceutical products based upon the regulation of transcription factors;
Whereas, Taisho is also engaged in the research and development of therapeutic
pharmaceutical products; and
Whereas, Tularik and Taisho desire to establish a cooperative research and
development relationship in order to discover, develop and market novel products
whose action is based upon the regulation of Signal Transducers and Activators
of Transcription ("STATs") involved in [ * ];
Now, Therefore, in consideration of the foregoing and the covenants and promises
contained herein, the parties agree as follows:
Article 1.
Definitions
As used herein, the following terms shall have the following meaning and the
singular shall include the plural and vice versa:
1.1 "Agreement" shall mean this Research, Collaboration and
License/Development Agreement.
1.2 "Annual Research Plan" shall mean the annual plan for conduct of the
Research Program to be approved by the parties pursuant to Section 2.1
hereunder.
1.3 "Compound" shall mean (i) a substance which is identified by Tularik
or Taisho during the term of the Research Program as either inhibiting or
promoting the activity of STATs activated by [ * ] and (ii) any such substance
identified by Tularik within [*] after the end of the Research Program if the
Research Program shall continue for a full five years.
1.4 "Confidential Information" shall mean, subject to the limitations set
forth in Article 5 hereof, all information disclosed to one party by the other
party.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
1
<PAGE>
1.5 "Drug Candidate" shall mean a small molecule (i.e., passes through
cell membranes) which passes animal toxicology studies to be defined by the
Research Committee and is either (i) a Compound or (ii) a chemical entity
conceptually or physically derived from a Compound during or following the term
of the Research Program, whether in the course of medicinal chemistry or
otherwise.
1.6 "Field" shall mean [ * ].
1.7 "MHW" shall mean the Japanese Ministry of Health and Welfare or such
other agency or instrumentality of Japan to which the responsibilities and
authority of the MHW are given or delegated from time to time.
1.8 "NDA" shall mean a New Drug Application or the equivalent in Japan
for a Product, including all supplements, documents, data and other information
necessary to be included for MHW approval to market such Product, as more
closely defined in the rules and regulations of the MHW.
1.9 "Net Sales" shall mean, with respect to a Product, and on a
country-by-country basis, the gross invoice price of all quantities of such
Product sold by Taisho, its Affiliates or sublicensees to an independent third
party after deducting, if not already deducted in the amount invoiced (a) trade,
quantity and cash discounts actually taken, (b) returns, rebates and allowances,
(c) duties, sales and excise taxes and (d) transportation and insurance charges.
With respect to sales of combination products, which shall consist of Products
combined with one or more additional active ingredients, the parties will agree
on a method of allocation in the event the situation arises. Sales among Taisho
and its Affiliates or sublicensees shall not be deemed Net Sales; provided,
however, that any sales by Taisho, its Affiliates or sublicensees to independent
third parties shall be deemed Net Sales.
1.10 "Product" shall mean a Drug Candidate, when used as an active
ingredient in a pharmaceutical product for use in the Field, including all
indications, formulations, line extension or modes of administration thereof.
1.11 "Program Know-How" shall mean all tangible or intangible know-how,
trade secrets, inventions (whether or not patentable), data, clinical and
preclinical results, information, and any physical, chemical or biological
material, including cell lines, any replication or any part of such material,
all of which is in any way derived from or developed pursuant to activities
during the course of the Research Program. Program Know-How shall not include
any know-how, trade secrets, invention, data, information or material first
developed, reduced to practice or discovered, each after any termination of the
Research Program prior to the completion of the full five (5) year term.
1.12 "Program Patents" shall mean all patents, both foreign and domestic,
including without limitation, all applications, provisionals, substitutions,
extensions, reissues, renewals, inventors certificates, divisionals,
continuations and continuations-in-part covering Program Know-How. In each case,
such patents and applications shall include only those that have not been held
invalid, unenforceable or unpatentable by a final decision, un-appealed to a
court or other appropriate body of competent jurisdiction.
1.13 "Research Committee" shall mean that committee to be formed pursuant
to Section 2.2.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
2
<PAGE>
1.14 "Research Program" shall mean the collaborative program of five (5)
years, which consists of five one (1)-year periods, of research relating to the
discovery and development of one or more Compounds, as such program is defined
on Exhibit A and as the same may be further defined, revised and implemented,
from time to time, by the parties on the recommendation of the Research
Committee, and as further described in Article 2.
1.15 "Taisho Compound Library" shall mean that collection of natural
extracts, natural compounds and synthetic compounds which Taisho owns or has the
right to license or sublicense as of the Effective Date or from time to time
during the Research Program which Taisho in its sole discretion actually
provides to Tularik.
1.16 "Taisho Know-How" shall mean, to the extent Taisho is free to grant
rights therein and it is necessary and useful for the conduct of the Research
Program or the development, manufacture or sale of Product, all tangible or
intangible know-how, trade secrets, inventions (whether or not patentable),
data, clinical and preclinical results, information, and any physical, chemical
or biological material, including cell lines, any replication or any part of
such material, which Taisho owns, controls or has a license to (with right to
sublicense) on the Effective Date and which Taisho determines in its sole
discretion actually to disclose or provide to Tularik hereunder; provided,
however, that in the event that [ * ].
1.17 "Taisho Licensed Technology" shall mean Taisho's rights in and to (i)
any Taisho Know-How disclosed to Tularik under this Agreement, (ii) the Program
Patents owned by Taisho or jointly by Taisho and Tularik, (iii) the Taisho
Patents and (iv) the Program Know-How owned by Taisho or jointly by Taisho and
Tularik.
1.18 "Taisho Patents" shall mean, to the extent Taisho is free to grant
rights therein and it is necessary and useful for the conduct of the Research
Program or the development, manufacture or sale of Product, all patents, both
foreign and domestic, including without limitation, all substitutions,
extensions, reissues, renewals and inventors certificates,
(a) issued as of the Effective Date and
(b) issuing from applications (including provisionals, divisionals,
continuations and continuations-in-part) arising out of the above
patents or otherwise in existence as of the Effective Date, which
applications relate to the Research Program or Product and
which Taisho owns, controls or has a license to (with right to sublicense) on
the Effective Date. In each case, such patents and applications shall include
only those that have not been held invalid, unenforceable or unpatentable by a
final decision, un-appealed to a court or other appropriate body of competent
jurisdiction.
1.19 "Taisho Territory" shall mean Japan, [ * ].
1.20 "Tularik Assays" shall mean those assays designed to discover
Compounds, which, as of the Effective Date and from time to time during the
period of the Research Program,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Tularik owns or to which it has rights (with a right to sublicense), as set
forth and periodically updated on Exhibit B hereto.
1.21 "Tularik Compound Library" shall mean that collection of natural
extracts, natural compounds and synthetic compounds which Tularik owns or has
the right to license or sublicense as of the Effective Date or from time to time
during the period of the Research Program.
1.22 "Tularik Know-How" shall mean, to the extent Tularik is free to grant
rights therein and it is necessary and useful for the conduct of the Research
Program or the development, manufacture or sale of Product, all tangible or
intangible know-how, trade secrets, inventions (whether or not patentable),
data, clinical and preclinical results, information, and any physical, chemical
or biological material, including cell lines, any replication or any part of
such material, which relate to the Research Program or a Product and which
Tularik owns, controls or has a license to (with right to sublicense) on the
Effective Date; provided, however, that in the event that [ * ].
1.23 "Tularik Licensed Technology" shall mean Tularik's rights in and to
(i) any Tularik Know-How and Tularik Assays disclosed to Taisho under this
Agreement, (ii) the Program Patents owned by Tularik or jointly by Tularik and
Taisho, (iii) the Tularik Patents and (iv) the Program Know-How owned by Tularik
or jointly by Tularik and Taisho.
1.24 "Tularik Patents" shall mean, to the extent Tularik is free to grant
rights therein and it is necessary and useful for the conduct of the Research
Program or the development, manufacture or sale of Product, all patents, both
foreign and domestic, including without limitation, all substitutions,
extensions, reissues, renewals and inventors certificates,
(a) issued as of the Effective Date and
(b) issuing from applications (including provisionals, divisionals,
continuations and continuations-in-part) arising out of the above
patents or otherwise in existence as of the Effective Date, which
applications relate to the Research Program or Product and
which Tularik owns, controls or has a license to (with right to sublicense) on
the Effective Date. In each case, such patents and applications shall include
only those that have not been held invalid, unenforceable or unpatentable by a
final decision, un-appealed to a court or other appropriate body of competent
jurisdiction.
1.25 "Tularik Territory" shall mean the entire world except the Taisho
Territory.
Article 2.
Research Program
2.1 Objectives; Annual Research Plan. The parties agree to conduct
a collaborative Research Program for identification and development of Compounds
intended for
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
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use as Drug Candidates, to be conducted by both parties under the direction of
the Research Committee. The Research Program shall consist primarily of [ * ] to
identify specific Compounds with promising activity for regulation of STAT
proteins activated by [ * ], using Tularik Assays and other technology available
to the parties and (ii) each party endeavoring to work together to fulfill their
respective obligations under Section 2.4 below to develop Compounds through
application of medicinal chemistry and preclinical testing for commercialization
of Products. For any given year of the Research Program, the Research Program
will be conducted in accordance with an annual research plan to be approved by
the parties no later than [ * ] prior to the start of such year, upon
recommendation of the Research Committee pursuant to Section 2.2(c)(1). The
initial Annual Research Plan, for the year commencing on the Effective Date and
ending on the day before the first anniversary of the Effective Date, is
attached hereto as Exhibit C. Each Annual Research Plan may be revised by mutual
consent of the parties from time to time.
2.2 Research Committee.
(a) Formation of Research Committee. The Research Committee will
consist of an equal number of members from each of Taisho and Tularik, including
any substitutions as may be needed from time to time, the chairperson of which
will be one of the Tularik members. The parties shall notify each other in
writing of the individuals who will act on such party's behalf as members of the
Research Committee and of any changes in the membership thereof. All decisions
of the Research Committee shall be unanimous.
(b) Meetings of Research Committee. Meetings of the Research
Committee shall be held [ * ] and at such times as shall be mutually agreed upon
by the parties. Additional persons from each party may attend meetings of the
Research Committee without voting rights as the case may be. Minutes of the
meeting shall be confirmed by both parties at each meeting.
(c) Responsibilities of Research Committee. The Research Committee
shall make recommendations to the parties with respect to: (1) establishing each
Annual Research Plan, based upon the research results for the preceding year and
designed to accomplish the goals of the Research Program, (2) defining the
yearly research objectives, (3) allocating tasks and coordinating activities
required to carry out the Research Program, (4) periodically revising the
Research Program, (5) monitoring progress of the Research Program and the
parties' due diligence in carrying out their responsibilities under the Research
Program, (6) developing the criterion and selecting Compounds to be advanced to
Drug Candidate, (7) selecting Drug Candidates and monitoring the progress of
Drug Candidate development and (8) determining the strategy for filing,
prosecution and obtaining Program Patents.
(d) Annual Report. Each party shall submit a brief, written annual
report on its activities under the Research Program to the other within [ * ]
after each anniversary of the Effective Date during the Research Program.
2.3 Use of Taisho Compound Library. Tularik shall have the limited right
to use the Taisho Compound Library only (i) for the Research Program in
accordance with Section 2.7 of this Agreement, (ii) in accordance with Section
3.3(a) and [ * ]. In the event Tularik shall desire to use any of the Taisho
Compound Library for any other purposes, [ * ]. The rights granted in
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
5
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the first sentence of this Section 2.3 shall not survive expiration or
termination of this Agreement. Taisho shall have no obligation to [ * ].
2.4 Research Diligence. Each party shall initiate its performance of the
Research Program promptly and shall continue with at least the same care and
diligence with which it conducts its internal research.
2.5 Program Funding. To support Tularik's activities in the Research
Program, Taisho has paid Tularik [ * ] U.S. Dollars on [ * ], and agrees to pay
Tularik, on [ * ], an [ * ].
2.6 Termination of Research Program. Upon not later than one hundred
twenty (120) days prior notice Taisho may terminate the Research Program at the
end of the third (3rd) or the fourth (4th) year of the Research Program if it
shall be dissatisfied, in its sole judgement, with the progress or results of
the Research Program. The Research Committee may terminate the Research Program
any time if it determines the Research Program is no longer scientifically
useful. In case of such an early termination by Taisho or the Research
Committee, Taisho shall be exempt from any payment(s) which would have become
due and payable after such early termination date.
2.7 Right to Conduct Research. Each party shall have the non-exclusive
worldwide right under the other party's Licensed Technology to carry out its
obligations under the Research Program.
2.8 Exclusive Research Collaboration. During the conduct of the Research
Program, Taisho and Tularik agree that they shall collaborate on an exclusive
basis hereunder with respect to the identification, using the Tularik Assays, of
Compounds for use in the Field in the Taisho Territory. This Section 2.8 shall
not restrict either party's rights to [ * ].
Article 3.
Development; Intellectual Property Rights; Payment Obligations
3.1 Development. After the Research Program, to minimize the expense and
delays of the development by each party, the parties may collaborate in the
development of a Compound under the terms and conditions of an appropriate co-
development agreement to be agreed upon by the parties separately. Such co-
development agreement may incorporate the sharing methods for work, cost and the
results of the development activities.
3.2 License to Taisho of Tularik Licensed Technology.
Tularik hereby grants Taisho:
(a) an exclusive license to make, have made, use, offer to sell, sell
and import Product in the Taisho Territory under the Tularik Licensed
Technology; and
(b) a nonexclusive, royalty-free, worldwide license under Tularik's
rights in and to the Program Know-How and Program Patents for any
purpose outside the Field.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
Except in the event Tularik terminates this Agreement pursuant to Section 7.3 or
7.4, the rights granted under Section 3.2(b) shall survive expiration or
termination of this Agreement. The license granted above in Section 3.2(a) shall
survive after royalties have been paid for the full term described in Section
3.10(c).
3.3 License to Tularik of Taisho Licensed Technology.
Taisho hereby grants Tularik:
(a) an exclusive license to make, have made, use, offer to sell, sell
and import Products in the Tularik Territory under the Taisho Licensed
Technology; and
(b) a nonexclusive, royalty-free worldwide license under Taisho's
rights in and to the Program Know-How and Program Patents for any
purpose outside the Field.
Upon expiration or termination of this Agreement, other than termination by
Taisho pursuant to Sections 7.3 or 7.4, (i) the rights granted under Section
3.3(b) shall survive, and (ii) Taisho shall, and it hereby does, grant Tularik
an exclusive license to make, have made, use, offer to sell, sell and import
Products worldwide under Taisho's rights in and to the Program Patents and the
Program Know-How. Notwithstanding the foregoing, if this Agreement expires after
royalties have been paid for the full term described in Section 3.10(c), the
license granted in clause (ii) of the previous sentence shall [ * ].
3.4 Sublicenses. Each party shall have the right to grant sublicenses
under the licenses set forth in Section 3.2 or 3.3 above, as appropriate,
provided that each such sublicense is subject to substantially the same terms
and conditions as are set forth herein. Subject to Sections 7.3 and 7.4, the
rights granted under this Section 3.4 shall survive expiration or termination of
this Agreement.
3.5 Use Limitation of Compound Libraries.. Each party agrees and
acknowledges that use of the substances contained in the Taisho Compound Library
or the Tularik Compound Library, as the case may be, is limited solely to those
activities contemplated by the Research Program, unless otherwise provided for
in this Agreement, and are for research use only and shall not be administered
to humans in any manner or form, except in accordance with the terms of this
Agreement, subject to appropriate governmental approval.
3.6 Nonuse of the Other Party's Technology Outside of the Field. Taisho
covenants and agrees that it will not use, directly or indirectly, the Tularik
Patents, Tularik Know-How or Tularik's Confidential Information, for any purpose
other than developing, making, having made, using or selling Products in the
Taisho Territory under this Agreement. Tularik covenants and agrees that it will
not use, directly or indirectly, the Taisho Patents, Taisho Know-How or Taisho's
Confidential Information, for any purpose other than developing, making, having
made, using or selling Products in the Tularik Territory under this Agreement.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
3.7 Use of a Party's Own Substances. Notwithstanding anything to the
contrary in Sections 3.5 or 3.6 above, during and following the term of this
Agreement, each party shall retain the right to use freely the substances
contained in its own Compound Libraries which are not classified as Compounds.
3.8 Development and Commercialization Diligence.
(a) Taisho shall devote the same degree of attention and diligence to
the development and marketing of Products in Japan that it devotes to other
compounds and products of its own development. If Taisho fails to use such
diligence, Tularik may notify Taisho of such failure and the parties shall meet
to discuss such matter. Tularik may request that Taisho propose a detailed plan,
with a timeline, for remedying such failure and carrying out further development
and marketing with the degree of diligence described above. If requested, such
plan shall be submitted to Tularik within [ * ] of the date of Tularik's
request. If Tularik determines that such plan provides for the degree of
diligence described above, it shall approve the plan. Tularik's approval shall
not be unreasonably withheld or delayed. If the plan does not provide for the
degree of diligence described above, or if the plan is approved by Tularik but
Taisho later fails to carry out development or marketing as provided in the
approved plan, then Tularik may terminate this Agreement pursuant to Section
7.3. The requirements for diligent development and commercialization set forth
in this Section 3.8 shall in no way be interpreted to modify either party's
respective obligations under the Research Program.
(b) Taisho hereby agrees to keep Tularik informed on a reasonable
basis of the development of each Compound, including but not limited to periodic
written updates on the progress of each filing with MHW or other appropriate
regulatory authorities in Japan.
(c) Notwithstanding the foregoing, any failure by Taisho to fulfill
the development, commercialization and information obligations set forth in this
Section 3.8 with respect to any Compound shall not be deemed a material breach
of this Agreement, to the extent that [ * ].
3.9 Benchmark Payments.
(a) Taisho shall pay Tularik within [ * ] after the occurrence of
the following events:
[*] up to an aggregate of $3 million.
(b) Taisho shall pay Tularik within [ * ] after the occurrence of
the following events:
[*] up to an aggregate of $3 million.
3.10 Royalties.
(a) Taisho Royalty Payments to Tularik. Taisho shall pay Tularik a
royalty based on Net Sales equal to [ * ] percent [ * ] of such Net Sales [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
(b) Third-Party Royalty Credit. In the event that Taisho is required
to make payments (including, without limitation, royalties, option fees or
license fees, and any such fees paid by Taisho pursuant to Section 1.22 above)
to one or more third parties to obtain licenses or similar rights to patent-
protected technology necessary to make, use or sell a Product, by reason of
Taisho's use of Tularik Licensed Technology in such manufacture, use or sale,
Taisho may deduct [ * ] percent [ * ] of such payments actually made from
royalties payable to Tularik under this Section with respect to such Product;
provided, however, that in no event shall the royalties due to Tularik be
reduced by more than [ * ] percent [ * ] of the amount of royalties otherwise
owed in any given [ * ] period. Unused royalty credits may be carried over from
one royalty period to the next, subject to the latter [ * ] percent [ * ]
limitation set forth above.
(c) Royalty Term. Royalties shall be payable for each country in the
Taisho Territory until the expiration of the last to expire Program Patent or
Tularik Patent in such country covering the manufacture, use or sale of the Drug
Candidate contained in the Product or, in the case of Products containing only
unpatented technology, seven (7) years from first commercial sale of such
Product. The royalty term shall be adjusted in the event a Product is launched
in any country of the Taisho Territory without such patent protection in such
country, if such patent protection is later obtained. In such event, the above
royalty obligation shall expire not upon expiration of the last such patent, but
instead on an earlier date that precedes the expiration date of such patent by
the length of time between launch and the date patent protection was obtained.
3.11 Payment; Reports. All amounts payable to Tularik under this Agreement
shall be paid in U.S. Dollars within [ * ] after the end of each June and
December. Each payment of royalties shall be accompanied by a statement of the
amount of Net Sales during such period, the amount of aggregate Net Sales to
date as of the end of such period where necessary in determination of royalty
rates, and the amount of royalties due on such sales. Tularik hereby agrees that
[ * ].
3.12 Exchange Rate; Manner and Place of Payment. Royalty payments and
reports for the sale of Products shall be made for each [ * ] period ending on
the last day of [ * ]. Exchange conversion for foreign currency into U.S.
Dollars shall be made as necessary at the median of the rates of exchange for
sales and purchases of U.S. Dollars on the last business day of the relevant
royalty period, as established by [ * ]. Once selected, the designated bank may
only be changed by the mutual written agreement of the parties. All payments
owed under this Agreement shall be made by telegraphic transfer.
3.13 Records and Audit. During the term of this Agreement and for a period
of three (3) years thereafter, Taisho shall keep complete and accurate records
pertaining to the sale or other disposition of the Products commercialized by
it, in sufficient detail to permit Tularik to confirm the accuracy of all
payments due hereunder. Tularik shall have the right to cause an independent,
certified public accountant to whom Taisho has no reasonable objection to audit
such records to confirm Taisho's Net Sales and royalty payments; provided,
however, that such auditor shall not disclose Taisho's confidential information
to Tularik, except to the extent such disclosure is necessary to verify the
amount of royalties due under this Agreement. Such audits may be exercised once
a fiscal year, within three (3) years after the royalty period to which such
records relate, upon notice to Taisho and during normal business hours. Tularik
shall bear the full cost of such audit unless such audit discloses a variance of
more than [ * ] from the amount of the Net Sales
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
9
<PAGE>
or royalties previously paid. In such case, Taisho shall bear the full cost of
such audit. The independent, certified public accountant conducting such audit
shall only report the results of its audit and shall not disclose to Tularik the
facts relied upon in making such computation. The terms of this Section 3.13
shall survive any termination or expiration of this Agreement for a period of
three (3) years.
3.14 Withholding of Taxes. Any withholding of taxes levied by Japanese tax
authorities on the payments required by Sections 3.9 and 3.10 above shall [ * ].
The parties shall discuss any other withholding taxes imposed on payments made
hereunder in order to find a reasonable solution for minimizing and allocating
the burden of any withholding taxes.
3.15 Reciprocal Arrangements with Third Parties. In the event that Tularik
enters into an arrangement with a third party outside the Taisho Territory to
utilize the Tularik Assays for the identification of compounds for use within
the Field, Tularik:
(i) shall [ * ];
(ii) shall [ * ];
(iii) may [ * ]; and
(iv) will, [ * ].
Tularik agrees that [ * ].
3.16 Exclusive Development and Commercialization Collaboration. Tularik
agrees not to grant to any third party during the term of this Agreement any
rights under the Tularik Licensed Technology to make, have made, use, offer to
sell, sell or import Products in the Taisho Territory, except as may be
permitted under this Agreement (including but not limited to Section 3.8).
Article 4.
Publication
Each party to this Agreement recognizes that the publication of papers,
including oral presentations and abstracts, regarding the results of the
Research Program as embodied in the Program Know-How and Program Patents,
subject to reasonable controls to protect Confidential Information and Program
Know-How, will be beneficial to both parties. Accordingly, each party shall have
the right to review and approve any paper proposed for publication by the other
party, including oral presentations and abstracts, which utilizes data generated
from the Research Program. Before any such paper is presented or submitted for
publication, the party proposing publication shall deliver a complete copy to
the other party at least [ * ] prior to presenting the paper to a publisher. The
receiving party shall review any such paper and promptly give its comments to
the publishing party. The publishing party shall comply with the other party's
request to delete references to such other party's Confidential Information and
any Program
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Know-How in any such paper and agrees to withhold publication of same an
additional [ * ] in order to permit the parties to obtain patent protection, if
the other party deems it necessary, in accordance with the terms of this
Agreement.
Both parties expressly agree that any information which, express or implied,
suggests the chemical structure of any Compound shall be published only after
the first laid-open or publication of the corresponding patent or patent
application.
Article 5.
Confidentiality
5.1 Confidential Information; Exceptions. During the term of this
Agreement, and for a period of five (5) years after termination thereof, each
party will maintain all Confidential Information in trust and confidence and
will not disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose; in particular, Taisho
shall not use the Tularik Know-How, and Tularik shall not use the Taisho Know-
How, for the manufacture or sale of any products other than the Products, except
as expressly authorized by this Agreement. Each party may use such Confidential
Information only to the extent required to accomplish the purposes of this
Agreement or to the extent required by law, regulation or government or judicial
order. Confidential Information shall not be used for any purpose or in any
manner that would constitute a violation of any laws or regulations, including
without limitation the export control laws of the United States. Confidential
Information shall not be reproduced in any form except as required to accomplish
the intent of this Agreement. No Confidential Information shall be disclosed to
any employee, agent, consultant, Affiliate, or sublicensee who does not have a
need for such information. Each party will use at least the same standard of
care as it uses to protect proprietary or confidential information of its own to
ensure that such employees, agents, consultants and clinical investigators do
not disclose or make any unauthorized use of the Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.
Confidential Information shall not include any information which:
(a) is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available;
(b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;
(c) is hereafter furnished to the receiving party by a third party,
as a matter of right and without restriction on disclosure;
(d) is independently developed by the receiving party without any
breach of this Agreement; or
(e) is the subject of a written permission to disclose provided by
the disclosing party.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
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5.2 Financial Terms. The parties agree that the material financial terms
of the Agreement will be considered Confidential Information of both parties.
Notwithstanding the foregoing, either party may disclose such terms to bona fide
potential sublicensees, if necessary. In connection with any such disclosure,
each party agrees to use its best efforts to secure confidential treatment of
such information. Tularik and Taisho shall have the further right to disclose
the material financial terms of the Agreement to any potential acquiror, merger
partner, or other bona fide potential financial partner, subject to a
requirement of best efforts to secure confidential treatment of such
information.
Article 6.
Patents And Patent Applications
6.1 Ownership. Tularik acknowledges and agrees that Taisho is and shall
remain the sole owner (or licensee with right to sublicense) of the Taisho
Patents, the Taisho Know-How and the materials and compounds in the Taisho
Compound Library and that Tularik has no rights in or to any of them other than
the license and rights specifically granted herein. Taisho acknowledges and
agrees that Tularik is and shall remain the sole owner (or licensee with right
to sublicense) of the Tularik Patents, the Tularik Know-How, the Tularik Assays
and the materials and compounds in the Tularik Compound Library and that Taisho
has no rights in or to any of them other than the rights specifically granted
herein. Each party shall be the sole owner of any inventions or discoveries
made, or materials, compounds or information created, solely by it in the course
of the Research Program, and the other party shall have no rights in or to any
such inventions, discoveries, materials, compounds or information other than
those rights specifically granted to such other party herein. Inventions or
discoveries made, and materials, compounds and information created, jointly by
the parties in the course of the Research Program shall be jointly owned.
Inventorship shall be determined in accordance with the U.S. inventorship
principles.
6.2 Patents.
(a) Patent Prosecution.
(i) Tularik Patents and Taisho Patents shall be prosecuted and
maintained by Tularik and Taisho, respectively, at such party's option and its
own expense.
(ii) Each party shall be responsible for filing, prosecuting and
maintaining those Program Patents covering inventions or discoveries made solely
by it throughout the world, shall consult with the other party as to the
selection of countries in which to file applications for such Program Patents in
the other's Territory and shall cooperate with the other as to the prosecution
of Program Patents in its own Territory. Each party shall be responsible for
bearing the cost of filing, prosecution and maintenance of Program Patents in
its own Territory regardless of which party owns the Program Patent. In the
event that any party decides not to proceed with prosecuting an application for
such a Program Patent, or to pay any annuity for such a Program Patent as it
becomes due, such party shall give the other [ * ] notice before any relevant
deadline, and the other party shall have the right to pursue, at its own option
and expense, prosecution of
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
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such patent application or maintenance of such patent. A party's decision not to
prosecute or pay annuities for a Program Patent invented solely by such party
shall not affect either party's rights under this Agreement, particularly those
granted under Sections 3.2 and 3.3.
(iii) The Research Committee shall determine a responsible party or
parties for filing, prosecuting and maintaining patent applications for Program
Patents which cover inventions or discoveries jointly made by the parties,
provided that each party shall be responsible for bearing the cost of
application, prosecution and maintenance of such patent application and/or
patent in its own Territory. In the event that any party decides not to proceed
with prosecuting a patent application filed under this Section 6.2(a)(iii) or to
pay any annuity for a jointly owned Program Patent as it becomes due in its own
Territory, such party shall give the other [ * ] notice before any relevant
deadline, and the other party shall have the right to pursue, at its own option
and expense, prosecution of such patent application or maintenance of such
patent. A party's decision not to prosecute or pay annuities in its own
Territory with respect to a jointly owned Program Patent shall not affect either
party's rights under this Agreement, particularly those granted under Sections
3.2 and 3.3.
(b) Perfection of Interest. Each party agrees to cooperate with the
other and take all reasonable additional actions and execute such agreements,
instruments, and documents as may be reasonably required to perfect the other's
ownership interest in accordance with the intent of this Agreement including,
without limitation, the execution of necessary and appropriate instruments of
assignment.
(c) Patent Marking. Each party shall mark, if necessary, all
Products manufactured, used or sold under the terms of this Agreement, or their
containers, in accordance with the applicable patent marking laws, as required.
6.3 Assignments. Each party which acquires by operation of law ownership
or other interests in any portion of a Compound, Product or Program Know-How in
a manner other than as intended and set forth in this Agreement shall, to the
extent required by the intent or provisions of this Agreement, immediately
assign to the other such right, title, and interest therein. Each party agrees
to cooperate with the other and take all reasonable additional actions and
execute such agreements, instruments, and documents as may be reasonably
required to perfect the other's ownership interest in accordance with the intent
of this Agreement including, without limitation, the execution of necessary and
appropriate instruments of assignment.
6.4 No Representation. Tularik and Taisho each specifically excludes any
representation or warranty, express or implied, that Tularik or Taisho will
successfully obtain any patent, including without limitation any Program Patent.
6.5 Infringement of Patents by Third Parties.
(a) Notice. Each party shall promptly notify the other in writing
of any alleged or threatened infringement of the Tularik Patents, the Taisho
Patents, or the Program Patents which may adversely impact the rights of the
parties hereunder, of which it becomes aware.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
13
<PAGE>
(b) Separately Owned Patents.
(i) Tularik shall have the right, but not the obligation, to bring
at its expense an appropriate action against any person or entity directly or
contributorily infringing a Tularik Patent or a Program Patent owned solely by
Tularik in the Taisho Territory. In such event, Taisho hereby agrees to
cooperate reasonably with Tularik in any such efforts. Any recovery obtained by
Tularik as a result of such action, whether obtained by settlement or otherwise,
shall be disbursed as follows: [ * ]. No settlement, compromise or other
disposition of any such action which compromises Taisho's rights under this
Agreement shall be entered into without Taisho's prior consent, which shall not
be unreasonably withheld. In the event Tularik fails to institute an
infringement suit or take other reasonable action in the Taisho Territory to
protect such relevant Tularik Patent or Program Patent owned solely by Tularik,
Taisho shall have the right, but not the obligation, within [ * ] of
notification to Tularik of such alleged infringement, to institute such suit or
take other appropriate action at its own expense in the name of Tularik or
Taisho, or both. [ * ]. In such event, Tularik shall cooperate reasonably with
Taisho. Any recovery obtained by Taisho as a result of such proceeding, by
settlement or otherwise, shall be disbursed as follows: [ * ].
(ii) Taisho shall have the right, but not the obligation, to bring
at its expense an appropriate action against any person or entity directly or
contributorily infringing a Taisho Patent or a Program Patent owned solely by
Taisho in the Tularik Territory. In such event, Tularik hereby agrees to
cooperate reasonably with Taisho in any such efforts. Any recovery obtained by
Taisho as a result of such action, whether obtained by settlement or otherwise,
shall be disbursed as follows: [ * ]. No settlement, compromise or other
disposition of any such action which compromises Tularik's rights under this
Agreement shall be entered into without Tularik's prior consent, which shall not
be unreasonably withheld. In the event Taisho fails to institute an infringement
suit or take other reasonable action in the Tularik Territory to protect such
relevant Taisho Patent or Program Patent owned solely by Taisho, Tularik shall
have the right, but not the obligation, within [ * ] of notification to Taisho
of such alleged infringement, to institute such suit or take other appropriate
action at its own expense in the name of Taisho or Tularik, or both. [ * ]. In
such event, Taisho shall cooperate reasonably with Tularik. Any recovery
obtained by Tularik as a result of such proceeding, by settlement or otherwise,
shall be disbursed as follows: [ * ].
(iii) No settlement, compromise or other disposition of any such
proceeding which concerns the validity of any Patent or Program Patent shall be
entered into without the Patent or Program Patent owner's prior consent, which
shall not be unreasonably withheld.
(c) Jointly Owned Patents. In the event that the parties become
aware of any alleged or threatened infringement of the jointly owned Program
Patents in either party's Territory, the party in whose Territory the
infringement is occurring shall have the right, but not the obligation, to
bring, at such party's expense, an appropriate action against any person or
entity directly or contributorily infringing such jointly owned Program Patent.
In such event, the other party hereby agrees to cooperate reasonably with the
party bringing such action in any such efforts, including, if required to bring
such action, the furnishing of a power-of-attorney. In the event the party in
whose Territory the infringement is occurring fails to institute an infringement
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
pursuant to Rule 406 of the Securities Act of 1933, as amended.
14
<PAGE>
suit or take other reasonable action to protect the relevant Program Patent, the
other party shall have the right, upon [ * ] of notification of the party in
whose Territory the infringement is occurring, to institute such suit or take
other appropriate action at its own expense in its own name, the joint owner's
name, or both. In such event, the party not bringing such action hereby agrees
to cooperate reasonably with the party bringing such action in any such effort,
including if required to bring such action, the furnishing of a power-of-
attorney. Regardless of which party brings the action, any recovery obtained by
settlement or otherwise shall be disbursed as follows: [ * ].
6.6 Infringement of Third Party Rights.
(a) Joint Strategy. In the event that any Product manufactured or
sold hereunder becomes the subject of a claim for patent, copyright or other
proprietary right infringement anywhere in the world, and irrespective of
whether Taisho or Tularik is charged with said infringement, and the venue of
such claim, the parties shall promptly confer to discuss the claim.
(b) Defense. The party responsible for marketing the Product which is
the subject of the infringement claim shall have the right, but not the
obligation, to assume the primary responsibility for the conduct of the defense
of any such claim. If the party responsible for marketing the Product decides
not to assume responsibility for the conduct of the defense, the other party
shall have the right, but not the obligation, to conduct the defense of the
claim. The party which decides to assume responsibility for such defense shall
bear all costs for the conduct thereof. In such event, the other party shall
have the right, but not the obligation, to participate in any such suit, at its
sole option and at its own expense. Each party shall reasonably cooperate with
the party conducting the defense of the claim, including if required to conduct
such defense, furnishing a power-of-attorney. Neither party shall enter into any
settlement that affects the other party's rights or interests without such other
party's written consent, which consent shall not be unreasonably withheld. In no
event shall the party not conducting the defense of the claim engage in conduct
or make any express or implied representation which may detrimentally affect
such defense.
Article 7.
Term And Termination Of Agreement
7.1 Term. This Agreement shall expire on the later of (i) the expiration
date of the last to expire patent licensed from Taisho to Tularik pursuant to
Section 3.3(a) and (ii) the expiration date of the last to expire royalty
obligation contained herein. Notwithstanding the foregoing, if the Research
Program is terminated prior to the completion of its full five (5) year term,
this Agreement shall terminate upon the date on which the Research Program is
terminated.
7.2 Extensions. The parties may extend the term of this Agreement or of
the Research Program on the written agreement of the parties. If the Research
Program expires after the full five (5) year term thereof, Taisho and Tularik
shall mutually determine whether this Agreement should
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15
<PAGE>
survive or terminate following such expiration based upon an evaluation of the
promise of Compounds identified during such term.
7.3 Termination for Material Breach. Either party may, in its sole
discretion, terminate this Agreement, effective after the grace periods
described below, by giving notice of such termination to the other party, if the
other party fails to comply with any material obligation of this Agreement,
including failure to make any royalty payment when due and payable hereunder
(except payment of amounts that are under bona fide dispute) and the breaching
party fails to cure such breach within sixty (60) days after written notice
thereof by the non-breaching party or twenty (20) days if the breach shall be
the breaching party's failure to make any undisputed royalty payment, unless
otherwise specified in this Agreement. All licenses granted to the non-breaching
party under this Agreement shall not be affected by termination for material
breach. All licenses granted to the breaching party under this Agreement shall
automatically terminate upon termination under this Section 7.3.
7.4 Insolvency or Bankruptcy. Either party may terminate this Agreement
effective immediately and without liability upon written notice to the other
party if the other party (a) becomes insolvent or declares bankruptcy, (b)
becomes the subject of any proceedings seeking relief, reorganization, or
rearrangement under any laws relating to insolvency, (c) makes an assignment for
the benefit of creditors, (d) commences the liquidation, dissolution, or winding
up of its business. To the extent legally possible, all licenses granted to the
non-breaching party shall not be affected by any termination of this Agreement
under this Section 7.4. All licenses granted to the breaching party under this
Agreement shall automatically terminate upon termination under this Section 7.4.
7.5 Accrued Rights, Surviving Obligations. Termination of this Agreement
shall not affect any accrued rights and obligations of either party.
Article 8.
Indemnity
8.1 Product Liability Indemnity by Taisho. Taisho shall defend, indemnify
and hold Tularik harmless from and against all claims and expenses, including
reasonable attorneys' fees, arising out of the death of or bodily injury to any
person or persons resulting from the manufacture or marketing of Products by
Taisho and its sublicensees (other than the manufacture or marketing of Products
by Tularik or its sublicensees); provided that (i) Tularik provides Taisho
prompt notice of any such claim, (ii) Taisho shall not be obligated to indemnify
Tularik for any loss in connection with any settlement unless Taisho consents in
writing to such settlement and (iii) Taisho shall have the exclusive right to
defend any such claim.
8.2 Product Liability Indemnity by Tularik. Tularik shall defend,
indemnify and hold Taisho harmless from and against all claims and expenses,
including reasonable attorneys' fees, arising out of the death of or bodily
injury to any person or persons resulting from the manufacture or marketing of
Products by Tularik and its sublicensees (other than the manufacture or
marketing of Products by Taisho or its sublicensees); provided that (i) Taisho
provides Tularik prompt notice of any such claim, (ii) Tularik shall not be
obligated to indemnify Taisho for any loss in connection with any settlement
unless Tularik consents in writing to such settlement and (iii) Tularik
shall have the exclusive right to defend any such claim.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
16
<PAGE>
Article 9.
Representations And Warranties
9.1 Taisho Representations, Warranties and Indemnities. Taisho represents
warrants the following:
(a) Corporate Authority. Taisho is a corporation duly organized,
validly existing and in good standing under the laws of Japan, has the power and
authority, corporate and otherwise, to execute and deliver this Agreement and to
perform its obligations hereunder and thereunder, and has by all necessary
corporate action duly and validly authorized the execution and delivery of this
Agreement, and the performance of its obligations hereunder.
(b) Binding Obligation. This Agreement is the valid and legally
binding obligation of Taisho in accordance with its terms, subject to
bankruptcy, reorganization, insolvency, moratorium and similar laws and to
general principles of equity which are within the discretion of courts of
applicable jurisdiction.
(c) No Conflicts. The execution, delivery and performance by Taisho
of this Agreement, and each other agreement, document, or instrument now or
hereafter executed and delivered by Taisho pursuant thereto or in connection
herewith will not: (i) conflict with or violate the articles of incorporation or
by-laws of Taisho or any provision of any law, rule, regulation, authorization
or judgement of any governmental authority having applicability to Taisho or its
actions; or (ii) conflict with or result in any breach of, or constitute a
default under, any note, security agreement, commitment, contract or other
agreement, instrument or undertaking to which Taisho is a party or by which any
of its property is bound.
(d) Ownership and Right to Sublicense. Taisho owns (or upon their
creation will own) or has a right to sublicense the Taisho Patents and Taisho
Know-How and all intellectual property rights with respect thereto and has (or
will have) the right and power to grant the rights granted to Tularik under this
Agreement.
(e) Independent Work. Except for the Taisho Patents and Taisho Know-
How licensed to Taisho with a right of sublicense, the Taisho Patents and Taisho
Know-How have been (or upon their creation will have been) independently created
by Taisho's employees, agents and consultants. Use of the Taisho Patents and
Taisho Know-How by Tularik as contemplated herein will not depend on the
acquisition of rights from any third party.
(f) [ * ].
(g) Agreements with Employees and Consultants. Taisho has and will
maintain with all Taisho employees, agents and consultants, written agreements
sufficient to enable Taisho to perform its obligations under this Agreement,
whenever Taisho thinks it is necessary.
9.2 Tularik Representations, Warranties and Indemnities. Tularik
represents and warrants the following:
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
17
<PAGE>
(a) Corporate Authority. Tularik is a corporation duly organized,
validly existing and in good standing under the laws of the state of California,
has the power and authority, corporate and otherwise, to execute and deliver
this Agreement, and to perform its obligations hereunder, and has by all
necessary corporate action duly and validly authorized the execution and
delivery of this Agreement, and the performance of its obligations hereunder.
(b) Binding Obligation. This Agreement is the valid and legally
binding obligation of Tularik in accordance with its terms, subject to
bankruptcy, reorganization, insolvency, moratorium and similar laws and to
general principles of equity which are within the discretion of courts of
applicable jurisdiction.
(c) No Conflicts. The execution, delivery and performance by Tularik
of this Agreement, and each other agreement, document, or instrument now or
hereafter executed and delivered by Tularik pursuant thereto or in connection
herewith will not: (i) conflict with or violate the articles of incorporation or
by-laws of Tularik or any provision of any law, rule, regulation, authorization
or judgement of any governmental authority having applicability to Tularik or
its actions; or (ii) conflict with or result in any breach of, or constitute a
default under, any note, security agreement, commitment, contract or other
agreement, instrument or undertaking to which Tularik is a party or by which any
of its property is bound.
(d) Ownership and Right to Sublicense. Tularik owns (or upon their
creation will own) or has a right to sublicense the Tularik Patents and Tularik
Know-How and all intellectual property rights with respect thereto and has (or
will have) the right and power to grant the rights granted to Taisho under this
Agreement.
(e) Independent Work. Except for the Tularik Patents and Tularik
Know-How licensed to Tularik with a right of sublicense, the Tularik Patents and
Tularik Know-How have been (or upon their creation will have been) independently
created by Tularik's employees, agents and consultants. Use of the Tularik
Patents and Tularik Know-How by Taisho as contemplated herein will not depend on
the acquisition of rights from any third party.
(f) [ * ].
(g) Agreements with Employees and Consultants. Tularik has and will
maintain with all Tularik employees, agents and consultants, written agreements
sufficient to enable Tularik to perform its obligations under this Agreement,
whenever Tularik thinks it is necessary.
Article 10.
Import And Export Controls
10.1 United States Laws. The parties understand and acknowledge that each
of them is subject to regulation by agencies of the U.S. government, including
the U.S. Department of Commerce which prohibit export or diversion of certain
products and technology to certain countries. Any and all obligations of Taisho
or Tularik to provide access to or license any
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
18
<PAGE>
technology pursuant to this Agreement, as well as any technical assistance shall
be subject in all respects to such United States laws and regulations as shall
from time to time govern the license and delivery of technology and products
abroad by persons subject to the Jurisdiction of the United States, including
the Export Administration Act of 1979, as amended, any successor or interim
controlling legislation, and the Export Administration Regulations issued by the
Department of Commerce, International Trade Administration, Bureau of Export
Administration. Both parties also agree to comply with the requirements of the
U.S. Foreign Corrupt Practices Act (the "Act") and shall refrain from any
payments to third parties which would cause Taisho or Tularik to violate the
Act. At Taisho's request and expense, Tularik shall advise Taisho regarding
compliance with the Act.
10.2 Non-United States Laws. Taisho and Tularik shall each provide the
other party with such reasonable assistance as may be required for the party
requesting such assistance to comply with all non-United States laws,
ordinances, rules, regulations and the like of all governmental units or
agencies within any territory having jurisdiction pertaining to this Agreement,
including without limitation, obtaining all import, export and other permits,
certificates, licenses or the like required by such non-United States laws,
ordinances, rules, regulations and the like, necessary to permit the parties to
perform hereunder and to exercise their respective rights hereunder.
Article 11.
Limitations Of Liability
NEITHER TULARIK NOR TAISHO WILL BE LIABLE OR OBLIGATED IN ANY MANNER FOR ANY
SPECIAL INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, UNDER ANY CAUSE OF ACTION
AND EVEN IF INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE, ARISING OUT OF THIS
AGREEMENT OR BY REASON OF BREACH OF THIS AGREEMENT. THESE LIMITATIONS WILL APPLY
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY HEREIN.
Article 12.
Miscellaneous Provisions
12.1 Waiver. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent or similar breach or default.
12.2 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns;
provided, however, that neither party shall assign any of its rights and
obligations hereunder except as incident to the merger, consolidations,
reorganization, or acquisition of stock or assets affecting substantially all of
the assets or actual voting control of the assigning party.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
19
<PAGE>
12.3 Notices. Any notice or other communication required or permitted to be
given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective on the date of delivery if delivered in
person or by facsimile or five (5) days after mailing by registered or certified
mail, postage paid, to the other party at the following address:
In the case of Tularik: Tularik Inc.
270 E. Grand Ave.
S. San Francisco, CA 94080
Fax:(415) 615-4222
Attention: President
In the case of Taisho:
Taisho Pharmaceutical Co., Ltd.,
24-1, Takata 3-chome
Toshimaku, Tokyo, 171 Japan
Attention: Executive Vice President
Either party may change its address for communications by a notice to the other
party in accordance with this section.
12.4 Headings. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
12.5 Amendment. No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by both parties.
12.6 Construction of Agreement and Choice of Law, Jurisdiction and Venue.
This agreement and its terms and conditions shall be governed exclusively by and
construed according to the laws of California, U.S.A., excluding its choice of
law provisions and also excluding the United Nations Convention on Contracts for
International Sale of Goods. The official text of this Agreement and any notices
given or accounts or statements required hereby shall be in English. In the
event of any dispute concerning the construction or meaning of this Agreement,
reference shall be made only to this Agreement as written in English and not to
any other translation into any other language. All disputes which may arise
between the parties hereto in relation to the interpretation or administration
of this Agreement shall be first referred to the Research Committee for
resolution. Any disputes which the Research Committee shall be unable to resolve
with a reasonable period of time shall be resolved by the agreement of the Chief
Executive Officers of the respective parties or their delegates. Any disputes
which cannot be resolved in this manner shall be finally resolved in the courts
in San Francisco, California if the action is taken by Taisho and in the courts
in Tokyo, Japan if the action is taken by Tularik.
12.7 Force Majeure. Any delays in performance by any party under this
Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the party
affected, including but not limited to acts of God, embargoes, governmental
restrictions, strikes or other concerted acts of workers, fire, flood,
explosion, riots, wars, civil disorder, rebellion or sabotage. The party
suffering such occurrence
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
20
<PAGE>
shall immediately notify the other party and any time for performance hereunder
shall be extended by the actual time of delay caused by the occurrence.
12.8 Independent Contractors. In making and performing this Agreement,
Taisho and Tularik act and shall act all times as independent contractors and
nothing contained in this Agreement shall be construed or implied to create an
agency, partnership or employer and employee relationship between Tularik and
Taisho. At no time shall one party make commitments or incur any charges or
expenses for or in the name of the other party.
12.9 Severability. If any term, condition or provision of this Agreement
is held to be unenforceable for any reason, it shall, if possible, be
interpreted rather than voided in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms, conditions
and provisions of this Agreement shall be deemed valid and enforceable to the
full extent.
12.10 Cumulative Rights. The rights, powers and remedies hereunder shall be
in addition to, and not in limitation of all rights, powers and remedies
provided at law or in equity, or under any other agreement between the parties.
All of such rights, powers and remedies shall be cumulative, and may be
exercised successively or cumulatively.
12.11 Entire Agreement. This Agreement, and any and all Exhibits referred
to herein, embodies the entire understanding of the parties with respect to the
subject matter hereof and shall supersede all previous communications,
representations or understandings, either oral or written, between the parties
relating to the subject matter hereof, including without limitation the secrecy
agreement between the parties dated December 2, 1994 and the Letter of Intent
dated March 24, 1995.
In Witness Whereof, both Taisho and Tularik have executed this Agreement,
in duplicate originals, by their respective officers hereunto duly authorized,
as of the day and year hereinabove written.
Tularik Inc. Taisho Pharmaceutical Co., Ltd.
By: /s/ David V. Goeddel By: /s/ Akira Ohira
----------------------- -------------------
David V. Goeddel Akira Ohira
Title: President and Title: Executive Vice President
Chief Executive Officer
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
21
<PAGE>
EXHIBIT A
Research Program
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
EXHIBIT B
Tularik Assays
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
EXHIBIT C
Initial Annual Research Plan
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.8
AMENDED AND RESTATED
COLLABORATION AND LICENSE AGREEMENT
between
TULARIK INC.
and
MERCK & CO., INC.
<PAGE>
Exhibit 10.8
AMENDED AND RESTATED
COLLABORATION AND LICENSE AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of December 1996 (the
"Amendment Date") by and between Tularik Inc., a California corporation
("Tularik"), and Merck & Co., Inc. ("Merck"), a corporation organized under the
laws of New Jersey, and amends in part and restates the Collaboration and
License Agreement dated as of December 22, 1993 by and between Tularik and
Merck.
RECITALS
WHEREAS, Tularik and Merck have previously entered into the Original
Agreement pursuant to which Tularik and Merck established a cooperative research
relationship based on screening of their respective compound libraries using
their respective assays and other jointly developed assays, and
WHEREAS, Tularik and Merck desire to continue their cooperative research
relationship to develop and market novel therapeutic products based on compounds
identified during such research as having viral regulatory properties;
NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained herein, the parties agree as follows:
1
DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "Affiliate" shall mean any entity that directly or indirectly Owns, is
Owned by or is under common Ownership, with a party to this Agreement, where
"Own" or "Ownership" means direct or indirect possession of at least fifty
percent (50%) of the outstanding voting securities of a corporation or a
comparable equity interest in any other type of entity.
1.2 "Agreement" shall mean this Amended and Restated Collaboration and
License Agreement.
1.3 "Agreement Compounds" shall mean, collectively, the Option Compounds
and the Program Compounds.
1.4 "Anti-Viral Activity" shall mean that level of activity of a Program
Substance in a Program Assay which [ * ], as appropriate for the target, which
is potentially or actually useful
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
1
<PAGE>
in the Field, as determined by the Research Committee.
1.5 "Confidential Information" shall mean, subject to the limitations set
forth in Section 12.1 hereof, all information disclosed to one party by the
other party.
1.6 "Core Targets" shall mean those targets applicable to the [ * ] set
forth on Appendix A, or otherwise designated by a majority of the members of the
entire Research Committee in writing, as well as any other targets designated by
the Research Committee in writing for other viruses which the parties may from
time to time designate or substitute.
1.7 "[ * ] Option Program" shall mean research and development pursuant to
this Agreement of all Option Compounds relating to all Option Targets applicable
to the [ * ].
1.8 "Effective Date" shall mean December 22, 1993.
1.9 "Exercise Data" shall mean data establishing the following criteria
with respect to an Option Program:
a) [ * ];
b) [ * ];
c) [ * ];
d) [ * ]; and
e) [ * ].
1.10 "Exercise Date" shall mean the date on which both of the following
have occurred (i) [ * ] and (ii) [ * ].
1.11 "FDA" shall mean the United States Food and Drug Administration.
1.12 "Field" shall mean all uses in the prevention or treatment of (i)
[ * ].
1.13 "Full Time Equivalent" or "FTE" shall mean the equivalent of a full-
time [ * ]. The portion of an FTE year devoted by a scientist or program manager
to the Research Program shall be determined by dividing the number of days
during any twelve (12) month period devoted by such employee to the Research
Program by the total number of working days during such twelve (12) month
period.
1.14 "GCP" means the Good Clinical Practice regulations promulgated by the
FDA.
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2
<PAGE>
1.15 "GLP" means the Good Laboratory Practice regulations promulgated by
the FDA.
1.16 "GMP" means the Good Manufacturing Practice regulations promulgated by
the FDA.
1.17 "Government Approval" shall mean any approvals, licenses,
registrations or authorizations of any federal, state or local regulatory
agency, department, bureau or other government entity, foreign or domestic,
necessary for the manufacture, use, storage, import, transport or sale, of the
Products in a regulatory jurisdiction.
1.18 "[ * ] Option Program" shall mean research and development pursuant to
this Agreement of all Option Compounds relating to all Option Targets applicable
to the [ * ].
1.19 "IND" or "Investigational New Drug Application" shall mean an
application for regulatory approval by the FDA or its foreign equivalent in
France, the United Kingdom, Germany or Japan, to commence human clinical testing
of a drug, as defined by the FDA or the foreign equivalent.
1.20 "Lead Defense Party" shall have the meaning assigned to it in Section
8.2(e)(2) hereof.
1.21 "Merck Know-How" shall mean all materials and information that Merck
owns, controls or has a license to (with a right to sublicense) as of the
Effective Date and from time to time during the Research Term, which arise
outside of the Research Program, but only insofar as the above are necessary or
useful for the conduct of the activities under the Research Program.
1.22 "Merck Option" shall mean the option by Merck to conduct research and
development activities with respect to any Option Program and to commercialize
Option Compounds, as further described in this Agreement.
1.23 "Merck Patents" shall mean any and all patents, both foreign and
domestic, which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal has been or can be taken, including
without limitation all substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates, (a) which (i)
are issued as of the Effective Date, (ii) subsequently issue from applications
(including divisionals, continuations and continuations-in-part) pending as of
the Effective Date, or (iii) issue from any such applications subsequently filed
on inventions made as of the Effective Date and (b) which Merck owns, controls
or has a license to (with the right to sublicense), and (c) which relate to the
development, manufacture, use or sale of the Products or the Program Assays.
1.24 "Merck Substances" shall mean those natural extracts, natural
compounds and synthetic compounds which Merck owns or has the right to license
or sublicense as of the
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3
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Effective Date or from time to time during the Research Program, and which Merck
has approved for screening under the Research Program.
1.25 "Merck Technology" shall mean, collectively, the Merck Patents and the
Merck Know-How.
1.26 "NDA" (or "New Drug Application") shall mean a new drug application as
defined by the U.S. FDA or the foreign equivalent in France, the United Kingdom,
Germany or Japan.
1.27 "Net Sales" shall mean, with respect to a Product, and on a
country-by-country basis, the gross invoice price of all quantities of such
Product sold by a party, its Affiliates or sublicensees to an independent third
party after deducting, if not already deducted in the amount invoiced [ * ].
With respect to sales of combination products, which shall consist of Products
combined with one or more additional active ingredients, Net Sales shall be
calculated on the basis of the [ * ].
1.28 "New Target" and "New Target Assay" shall have the meanings assigned
to each, respectively, in Section 2.3 hereof.
1.29 "Option Compound" shall mean a Program Substance (i) which as a result
of screening activities under the Research Program, [ * ] and (iii) as to which
Tularik has commenced and is proceeding with preliminary development activities
within [ * ] after the expiration of the Research Term.
1.30 "Option Product" shall mean any pharmaceutical product which results
during the Research Term [ * ], from research conducted with respect to an
Option Compound. Each Option Product shall be deemed to include [ * ].
1.31 "Option Program" shall mean either the [ * ] Option Program or the
[ * ] Option Program, as the case may be.
1.32 "Option Targets" shall mean those targets applicable to the [ * ] set
forth on Appendix A hereto, or otherwise designated by a majority of the members
of the entire Research Committee in writing.
1.33 "Original Agreement" shall mean the Collaboration and License
Agreement dated as of December 22, 1993 by and between Tularik and Merck.
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4
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1.34 "Products" shall mean, collectively, the Option Products and the
Program Products.
1.35 "Program Assays" shall mean those assays relating to the Core Targets
or the Option Targets which, as of the Effective Date and from time to time
during the Research Term, each party respectively owns or has rights to (with a
right to sublicense), as set forth and periodically updated on Appendix A
hereto.
1.36 "Program Compound" shall mean a Program Substance which (i) as a
result of screening activities under the Research Program, [ * ], (ii) [ * ] and
(iii) is designated by the Research Committee for [ * ]. Program Compounds shall
also include all Option Compounds within any Option Program as to which Merck
has exercised the Merck Option.
1.37 "Program Know-How" shall mean all materials and information developed
in the course of the Research Program.
1.38 "Program Patents" shall mean any and all patents, both foreign and
domestic, which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal has been or can be taken, including
with out limitation, all substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates which cover
inventions or discoveries made in the course of the Research Program.
1.39 "Program Product" shall mean any pharmaceutical product which results
during the Research Term [ * ] from research conducted with respect to a Program
Compound. Each Program Product shall be deemed to include all indications,
formulations, line extensions or modes of administration thereof.
1.40 "Program Substances" shall mean the Merck Substances and the Tularik
Substances.
1.41 "Research Committee" shall mean that committee formed pursuant to
Section 2.2 hereof.
1.42 "Research Management Committee" or "RMC" shall mean Merck's Research
Management Committee.
1.43 "Research Program" shall mean the research program carried out by the
parties in the Field during the Research Term pursuant to Article 2 hereof, as
further described in Appendix B.
1.44 "Restricted Compound" shall mean any Program Compound or Option
Compound which Merck has designated as restricted in accordance with Sections
2.1(c) hereof.
[ * ] =Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5
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1.45 "Third Party Screening Royalty" shall mean any royalty obligation owed
by Tularik or Merck to any third party, for the screening or use of any Program
Substance.
1.46 "Tularik Know-How" shall mean all materials and information that
Tularik owns, controls or has a license to (with a right to sublicense) as of
the Effective Date and from time to time during the Research Term, which arise
outside the Research Program, but only insofar as any of the above are necessary
or useful to the conduct of the activities carried out under the Research
Program.
1.47 "Tularik Patents" shall mean any and all patents, both foreign and
domestic, which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal has been or can be taken, including
without limitation all substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates, (a) which (i)
are issued as of the Effective Date, or (ii) subsequently issue from
applications (including divisionals, continuations and continuations-in-part)
pending as of the Effective Date, or (iii) issue from any such applications
subsequently filed on inventions made as of the Effective Date, (b) which
Tularik owns, controls or has a license to (with the right to sublicense), and
(c) which relate to the development, manufacture, use and sale of the Products
or the Program Assays.
1.48 "Tularik Substances" shall mean those natural extracts, natural
compounds and synthetic compounds which Tularik owns or has the right to license
or sublicense as of the Effective Date or from time to time during the Research
Program, and which Tularik has approved for screening under the Research
Program.
1.49 "Tularik Technology" means, collectively, the Tularik Patents and the
Tularik Know-How.
2
RESEARCH PROGRAM
2.1 Research Program. Tularik and Merck will conduct the Research Program
under the direction of the Research Committee. During the Research Term, Tularik
shall [ * ] the Research Program, including management of the Program. Tularik
shall appoint Dr. M. G. Peterson to manage the Research Program. Tularik
acknowledges that the involvement of Dr. S. McKnight in the Research Program is
critical to the success of the Research Program. Merck acknowledges that Dr. S.
McKnight will become a consultant to Tularik on January 1, 1997. The parties
intend that the work of Dr. S. McKnight relating to his employment
responsibilities at the University of Texas Southwestern Medical Center at
Dallas ("UT"), or work developed with UT's support or facilities, shall not be
utilized in the Research Program; provided, however, that [ * ]. Merck shall
have the right to approve all changes in the management of the Research Program,
in its sole discretion.
(a) Provision of Program Substances. Merck shall provide the Merck
Substances in coded form, and Tularik shall provide the Tularik Substances, for
use in the
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6
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Research Program, in accordance with Appendix B. It is understood that neither
party shall have an obligation to provide any particular amounts or types of
Substances. Each Merck or Tularik Substance that does not possess Anti-Viral
Activity will be returned to Merck or Tularik, as the case may be, and will
cease to be subject to the terms of this Agreement.
(b) Screening Activities. During the Research Term, each party shall
respectively make all Program Assays available for the Research Program. In the
event that either party develops or acquires new Program Assays during the
Research Term, such party shall promptly inform the Research Committee of the
existence of such Program Assay. Unless otherwise directed by the Research
Committee, Tularik shall conduct all screening of the Program Substances. To the
extent practicable, the Program Substances shall be screened contemporaneously
in Program Assays for both the Core Targets and Option Targets. Tularik shall
notify Merck promptly when a Program Substance demonstrates Anti-Viral Activity
in a Core Target or Option Target. Any Program Substance which does not
demonstrate Anti-Viral Activity in a Core Target or Option Target shall be
returned to the party which supplied such Program Substance, and shall not be
included further under the terms of the Agreement.
(c) [ * ] Compounds. Within [ * ] of the date Merck receives all
material data indicating whether or not a Merck Substance has reacted positively
in a Program Assay for a Core Target or an Option Target, Merck shall [ * ],
upon which occurrence [ * ]. In the event that Merck [ * ], the Research
Committee shall commence evaluation of such Merck Substance, or Tularik shall be
free to conduct further research, in the case of a Merck Substance [ * ],
subject to the terms and conditions of this Agreement. Merck will [ * ], as the
case may be, for which such [ * ] without the agreement of Tularik. It is
understood that there are [ * ].
2.2 Research Committee.
(a) Formation of Research Committee. The Research Committee shall
consist of six (6) members, Merck and Tularik each to appoint and substitute as
necessary from time to time three (3) members of such Committee. Each member
shall have appropriate technical credentials and knowledge and ongoing
familiarity with the Research Program. The Chairperson of the Research Committee
shall be one of the Merck-appointed members. Except as otherwise provided in
Sections 1.6, 1.8 and 1.32, all decisions of the Research Committee shall be
unanimous.
(b) Meetings of Research Committee. The Research Committee shall meet
quarterly, at such times as shall be mutually agreed upon by the parties. The
location of such meetings shall alternate between sites designated by Tularik
and sites designated by Merck.
(c) Responsibilities of the Research Committee. The Research Committee
shall carry out the following responsibilities during the Research Term and,
with respect to Option Compounds which continue to be subject to the Merck
Option, for [ * ]: (1) defining the yearly research objectives, (2) determining
whether a Program Substance has Anti-Viral Activity,
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7
<PAGE>
(3) coordinating activities required to carry out the Research Program, (4)
periodically revising the Research Program, (5) monitoring progress of the
Research Program and (6) making recommendations regarding further pre-IND
development of Program Compounds and Option Compounds.
2.3 New Target Assays. In the event that Tularik develops any new
screening assays relating to any disease in the Field other than the Core
Targets and the Option Targets (each, a "New Target Assay" and "New Target,"
respectively) during the Research Term, Tularik hereby agrees to promptly
disclose to Merck the existence of each New Target Assay. Merck shall have the
right to [ * ] for the identification and/or development of compounds relating
to such New Target by delivering to Tularik within [ * ] of Tularik's disclosure
of the New Target Assay, [ * ]. Upon receipt by Tularik of [ * ] relating to the
New Target. [ * ].
2.4 Term and Termination of Research Program. The Research Program shall
be carried out for a period commencing on the Effective Date and ending on
December 31, 1999 (the "Research Term"), which Research Term may be extended at
Merck's option for additional one (1)-year periods; provided, however, that any
such extension shall be made upon [ * ] prior written notice to Tularik.
Anything in the foregoing sentence to the contrary notwithstanding, Merck may
terminate the Research Term upon [ * ] written notice given to Tularik any time
after December 31, 1998. In the event of any such termination, payments under
Section 5.1(b) shall be prorated to fund the Research Program to the effective
date of such termination. After expiration or termination of the Research Term,
Tularik may, in its sole discretion, screen Merck Compounds at Merck's request,
at fees and upon terms to be mutually agreed upon by the parties at such time.
3
DEVELOPMENT AND COMMERCIALIZATION OF OPTION PRODUCTS
3.1 Tularik Development of Option Compounds. Tularik shall have the right,
but not the obligation, to conduct research and development and to commercialize
all Option Compounds, subject only to the Merck Option.
3.2 Tularik to Keep Merck Informed. Tularik shall provide Merck with
semi-annual reports of its progress in developing each Option Compound for which
Merck may be entitled to exercise the Merck Option in such reasonable detail as
shall be necessary and appropriate to permit Merck to determine whether it
wishes to exercise the Merck Option.
3.3 Merck Option.
(a) Merck Option. Merck may give Tularik written notice of its
intention to conduct research and development activities with respect to an
Option Program at any time, but
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8
<PAGE>
not later than the expiration of [ * ] following the Exercise Date relating to
such Option Program. Upon exercising the Merck Option by giving such notice in
such manner, all Option Compounds within such Option Program shall become
Program Compounds for all purposes of this Agreement. Upon exercise by Merck of
the Merck Option, Tularik will [ * ] for which the Merck Option has been
exercised or [ * ].
(b) Other Option Programs. Notwithstanding any exercise by Merck of
the Merck Option with respect to an Option Program, [ * ] relating to [ * ] and
[ * ] for which the Merck Option has not been exercised, subject to Section
3.3(a) above.
(c) Reimbursement. Merck shall reimburse Tularik for the reasonable
costs and expenses incurred by Tularik relating to studies and preliminary
development conducted on any Option Program as to which Merck exercises the
Merck Option. Such cost reimbursement shall be on a basis of [ * ], which
reimbursement shall include the items listed on Exhibit C hereto. Merck will
also reimburse Tularik for any additional outside expenses that it approves at
the time of such reimbursement, as necessary and appropriate.
3.4 Tularik Request for Exercise of Merck Option. Tularik shall notify
Merck that the Merck Option has become exercisable with respect to an Option
Program by submission to Merck of Exercise Data on the Exercise Date. In no
event shall Merck be obligated to consider exercise of the Merck Option with
respect to such Option Program unless Exercise Data for such Option Program
shall have been submitted to Merck. In the event Merck shall not exercise the
Merck Option with respect to such Option Program within [ * ] following the
Exercise Date, the Merck Option shall expire with respect to such Option
Program. Following such expiration: (i) [ * ]; (ii) Tularik shall [ * ]; and
(iii) Tularik may [ * ].
4
EXTRA-FIELD INDICATIONS
4.1 Extra-Field Indications. The parties acknowledge that the Program
Compounds and Option Compounds may prove to have applications for indications
outside the Field. Subject to the provisions of this Article 4, Merck shall have
the [ * ] and Tularik shall have the [ * ]. Notwithstanding the foregoing, the
parties acknowledge that each [ * ].
4.2 Royalty Obligations; Approvals. With respect to each Program Compound
or Option Compound developed by either party as set forth above for extra-Field
indications, the developing party shall be subject to the following royalty
obligations and approval requirements:
(a) Developing Party's Substance. With respect to the development and
commercialization of any Program Compound and Option Compound based upon its own
Program Substance [ * ], the developing party shall [ * ] from the other party
for such development and commercialization, [ * ] of such Program Compound or
Option Compound.
(b) Other Party's Substance. With respect to the development and
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9
<PAGE>
commercialization of any Program Compound or Option Compound based upon the
non-developing party's Program Substance [ * ], the developing party shall be
subject to [ * ] in accordance with the following:
(1) If such Program Compound or Option Compound is subject only to the
developing party's patents or patents jointly owned by Merck and Tularik, such
development and commercialization shall [ * ], and [ * ] of such Program
Compound or Option Compound.
(2) If such Program Compound or Option Compound is either (i) not
covered by any patent of either party or any jointly-owned patent or (ii) is
covered by the other party's patents, such development and commercialization
shall [ * ] if the developing party is also [ * ] if the developing party is
[ * ].
(c) Meaning of the Term "Patent." For purposes of this Section 4.2,
"patent" shall mean, with respect to any Product, a valid United States
[ * ] patent covering such Program Compound or Option Compound, [ * ], which a
party owns, controls or has a license to as of such date.
5
PAYMENT TERMS
5.1 Research Program Funding.
(a) Initial Payment. In consideration for the activities performed by
Tularik under the Research Program with respect to the Core Targets, Merck shall
pay Tularik a sum of [ * ].
(b) Research Term Fees. For each of the [ * ] of the Research Term,
Merck shall pay Tularik a sum of [ * ].
(c) Research Term Extensions. In the event that Merck extends the
Research Term pursuant to Section 2.4 hereof, Merck shall pay Tularik for each
one (1)-year extension [ * ].
5.2 Equity Investment. Within fifteen (15) days of the Effective Date,
Tularik and Merck shall execute a Series D Preferred Stock Purchase Agreement,
pursuant to which Merck shall purchase Four Hundred Thousand (400,000) shares of
Tularik Series D Preferred Stock for a sum of Two Million Dollars ($2,000,000).
After execution of such Stock Purchase Agreement, this Agreement and such Stock
Purchase Agreement shall have no further relationship and each agreement will
operate completely independently.
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10
<PAGE>
5.3 Further IPO Investment. In the event that Tularik consummates an
initial public offering (the "IPO"), Merck further agrees to purchase Four
Million Dollars' ($4,000,000) worth of Tularik stock, at a price per share and
subject to such terms as Tularik and Tularik's underwriters in the IPO shall
decide. The obligation set forth in this Section 5.3 shall continue for a period
of five (5) years following the Effective Date, notwithstanding any termination
of this Agreement prior to the expiration of such period, unless such
termination occurs as a result of Tularik's material breach under Section 9.2(a)
hereof.
5.4 Option Payments. Merck shall pay Tularik an exercise fee of
[ * ] with respect to each Option Program as to which Merck exercises the Merck
Option, at the time of each respective exercise and thereupon Tularik's rights
with respect to Option Compounds within such Option Program shall be governed by
Section 3.3(a).
5.5 Benchmark Payments. With respect to [ * ], Merck shall pay to
Tularik:
(a) [ * ];
(b) [ * ];
(c) [ * ];
(d) [ * ].
5.6 Royalties.
(a) Merck Royalty Payments for Program Products. Merck shall pay
to Tularik an annual running royalty on Net Sales of each Program Product sold
by it and/or its Affiliates or sublicensees for applications within the Field
(other than Program Products acquired by exercise of the Merck Option),
according to the following rates:
(1) [ * ]; and
(2) [ * ].
(b) Merck Royalty Payments for Merck Option Products. Subject to
Section 4.2 hereof, Merck shall pay Tularik an annual running royalty on Net
Sales of each Program Product acquired by exercise of the Merck Option and sold
by it and/or its Affiliates or sublicensees for applications within the Field,
according to the following rates:
(1) [ * ]
(2) [ * ]
(3) [ * ].
(c) Tularik Royalty Payments for Option Products. Tularik shall
pay to
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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<PAGE>
Merck an annual running royalty on Net Sales of each Option Product based upon,
derived from or which incorporates a Merck Substance and sold by it and/or its
Affiliates or sublicensees for applications within the Field, according to the
following rates:
(1) [ * ]; and
(2) [ * ].
(d) Third-Party Royalty Credit. In the event that either party is
required to make payments (including, without limitation, royalties, option fees
or license fees) other than the [ * ], to one or more third parties to obtain
licenses or similar rights to patent protected technology necessary to make, use
or sell a Product in the Field, the party marketing such Product may deduct
[ * ] of the actual cost of such payments from royalties payable to the other
party under this Section 5.6 with respect to such Product, provided, however,
that in no event shall the royalties due to either party be reduced by more than
[ * ] of the amount of royalties owed in any given calendar quarter. Unused
royalty credits may be carried over from one royalty period to the next, subject
to the [ * ] limitation set forth above.
5.7 Royalty Term.
(a) Non-Patented Products. For each Product the manufacture, use or
sale of which for applications within the Field is not covered by a Program
Patent, Merck Patent or a Tularik Patent in a country, royalties shall be
payable in such country until seven (7) years from the date of first commercial
sale of the Product in such country.
(b) Patented Products. For each Product the manufacture, use or sale
of which for applications within the Field is covered by a Program Patent, Merck
Patent or Tularik Patent, royalties shall be payable in a country until the
later of (i) seven (7) years from the first commercial sale of the Product in
such country, or (ii) the expiration of the last to expire Program Patent, Merck
Patent or Tularik Patent covering such manufacture, use or sale.
5.8 Manner and Time of Royalty Payments. All royalty payments due
hereunder shall be made in accordance with the provisions of Article 7 hereof.
5.9 Date and Place of Sale. Products shall be considered sold when
invoiced by the selling party. The obligation to pay royalties on Net Sales of a
Product in the Field shall be imposed only once with respect to the same unit of
such Product.
6
GRANT OF RIGHTS
6.1 Research Program License.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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<PAGE>
(a) Grant by Merck. Merck hereby grants to Tularik, during the
Research Term (and any extension thereof), (i) [ * ] in accordance with the
terms of the Research Program. Nothing herein shall be deemed to grant any
rights or other interests in favor of Tularik with respect to the Merck
Technology and the Merck-owned Program Patents other than as expressly set forth
in this Agreement.
(b) Grant by Tularik. Tularik hereby grants to Merck, during the
Research Term (and any extension thereof) (i) [ * ] in accordance with the terms
of the Research Program. Nothing herein shall be deemed to grant any rights or
other interests in favor of Merck with respect to the Tularik Technology and the
Tularik-owned Program Patents other than as expressly set forth in this
Agreement.
(c) Preliminary Development by Merck of Program Compounds. Tularik
hereby grants to Merck an exclusive (but for the license granted to Tularik
under Section 6.1(d) below) license under the (i) [ * ] as are necessary for
Merck to fulfill its obligations under the Research Program in accordance with
Appendix B.
(d) Preliminary Development by Tularik of Option Compounds. Subject
to the terms of the Merck Option, Merck hereby grants to Tularik an exclusive
(but for the license granted to Merck under Section 6.1(c) above) license under
(i) [ * ] with respect to any Option Compound within any Option Program. Such
license shall terminate as to Options Compounds within any Option Program with
respect to which the Merck Option shall have been exercised or shall have
terminated.
(e) Use Limitation. Each party agrees and acknowledges that use of the
Merck Substances and the Tularik Substances provided pursuant to Article 2 is
limited solely to those activities contemplated by the Research Program, unless
otherwise provided for in this Agreement. Each party understands and
acknowledges that the other party's substances are for research use only and
shall not be administered to humans in any manner or form, except in accordance
with the terms of this Agreement, and subject to appropriate Governmental
Approval.
6.2 License to Merck for Program Products. Tularik hereby grants to Merck
an exclusive, worldwide license to develop, make, have made, use, sell and have
sold Program Products in the Field under [ * ]. Tularik shall not conduct any
screening, development, manufacturing or commercialization activities with
respect to the [ * ], except as provided under this Agreement.
6.3 License to Tularik for Option Products. Merck hereby grants to Tularik
an exclusive, worldwide license to make, have made, use, sell, and have sold
Option Products in the Field as to which Merck has not exercised the Merck
Option, under the (i) [ * ].
6.4 Sublicenses. Each party shall have the right to grant sublicenses
under the licenses set forth in this Agreement, as appropriate.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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6.5 Merck Due Diligence; Obligation to Inform.
(a) Diligent Development and Commercialization. Merck shall devote the
same degree of attention and diligence to [ * ]. The requirements for diligent
development and commercialization set forth in this Section 6.5(a) shall in no
way be interpreted to modify either party's respective obligations under the
Research Program.
(b) Obligation to Inform. Merck hereby agrees to keep Tularik
informed on a reasonable basis of the development of each Program Compound,
including but not limited to periodic written updates on the progress of each
filing with the FDA and its foreign equivalents in France, the United Kingdom,
Germany and Japan.
(c) No Material Breach. Notwithstanding the foregoing, any failure by
Merck to fulfill the development, commercialization and information obligations
set forth in this Section 6.5 with respect to any Program Compound shall not be
deemed a material breach of this Agreement, to the extent that such failure
results [ * ].
7
PAYMENTS; RECORDS; AUDIT
7.1 Payment; Reports. All amounts payable to either party under this
Agreement shall be paid in U.S. Dollars within [ * ] of the end of each calendar
quarter or as otherwise specifically provided herein. Each payment of royalties
shall be accompanied by a statement of the amount of Net Sales during such
quarter, the amount of aggregate worldwide Net Sales to date as of the end of
such quarter where necessary in determination of royalty rates, and the amount
of royalties due on such sales. Each party agrees that if it desires to sell or
otherwise place any Products in exchange for consideration, or in a manner, that
makes it impractical to calculate royalty due, [ * ]. The parties hereby agree
that [ * ].
7.2 Exchange Rate; Manner and Place of Payment. Royalty payments and
reports for the sale of Products (i) in the United States shall be calculated
and reported for each quarter ending on the last day of March, June, September
and December; and (ii) outside the United States shall be reported for each
quarter ending on the last day of February, May, August and November. Exchange
conversion of foreign sales into U.S. Dollars shall be made as necessary at the
rate of exchange quoted by Reuters Ltd., for the spot purchase of U.S. Dollars
at 7:15 a.m. (New York time) on the fourth banking day preceding the end of the
applicable royalty period. All payments owed under this Agreement shall be made
by wire transfer, unless otherwise
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
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<PAGE>
specified by such party.
7.3 Records and Audit. During the term of this Agreement and for a period
of two (2) years thereafter, the parties shall each keep complete and accurate
records pertaining to the sale or other disposition of the Products
commercialized by it, in sufficient detail to permit the other party to confirm
the accuracy of all payments due hereunder. Each party shall have the right to
cause an independent, certified public accountant to audit such records to
confirm the other party's Net Sales and royalty payments for the preceding year;
provided, however, that such auditor shall not disclose the audited party's
confidential information to the other party, except to the extent such
disclosure is necessary to verify the amount of royalties due under this
Agreement. Such audits may be exercised once a year, within two (2) years after
the royalty period to which such records relate, upon notice to such other party
and during normal business hours. The party requesting the audit shall bear the
full cost of such audit [ * ]. The terms of this Section 7.3 shall survive any
termination or expiration of this Agreement for a period of two (2) years.
7.4 Taxes. All turnover and other taxes levied on account of the royalties
accruing to each party under this Agreement shall be borne and paid by the party
receiving such royalty for its own account, including taxes levied thereon as
income to the receiving party. If provision is made in law or regulation for
withholding, such tax shall be deducted from the royalty paid by the party
making such payment to the proper taxing authority and a receipt of payment of
the tax secured and shall be promptly delivered to the party entitled to the
royalty. Each party agrees to reasonably assist the other party in claiming
exemption from such deductions or withholdings under any double taxation or
similar agreement or treaty from time to time in force.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
15
<PAGE>
8
OWNERSHIP; PATENTS
8.1 Ownership.
(a) Technology; Substances; Program Patents and Program Know-How.
Tularik acknowledges and agrees that Merck is and shall remain the sole owner of
the Merck Technology, the Merck-owned Program Patents, the Merck-owned Program
Know-How and the Merck Substances, and that Tularik has no rights in or to the
Merck Technology, the Merck-owned Program Patents, the Merck-owned Program Know-
How and Merck Substances, other than the license rights specifically granted
herein. Merck acknowledges and agrees that Tularik is and shall remain the sole
owner of the Tularik Technology, the Tularik-owned Program Patents, the Tularik-
owned Program Know-How and the Tularik Substances, and that Merck has no rights
in or to the Tularik Technology, Tularik-owned Program Patents, the Tularik-
owned Program Know-How and Tularik Substances other than the license rights
specifically granted herein. Each party acknowledges and agrees that each party
shall be the sole owner of the Program Assays and inventions or discoveries made
solely by it in the course of the Research Program, subject to right granted
under this Agreement, and that the other party has no rights in or to such
Program Assays and inventions or discoveries other than those rights
specifically granted to such other party herein. Program Assays and inventions
or discoveries jointly made by the parties in the course of the Research Program
shall be jointly owned.
(b) Program Know-How. Subject to the licenses granted under this
Agreement, Tularik and Merck shall each solely own the entire right, title and
interest in and to any Program Know-How made or discovered solely by it, and the
parties shall own jointly the entire right, title and interest in and to Program
Know-How jointly made or discovered.
8.2 Patents.
(a) Patent Prosecution.
(1) Tularik Patents and Merck Patents shall be prosecuted
and maintained by Tularik and Merck, respectively, at such party's option and
its own expense.
(2) Each party shall be responsible for filing, prosecuting
and maintaining those Program Patents covering inventions or discoveries made
solely by it, at its own expense. [ * ]. In the event that any party decides not
to proceed with prosecuting a patent application which it filed under this
Section, or to pay any annuity for a Program Patent as it becomes due, which
application or patent is relevant to the license rights of the other party under
this Agreement, such party shall give the other party sixty (60) days' notice
before any relevant deadline, and the other party shall have the right to
pursue, at its own expense, prosecution of such patent application or
maintenance of the patent. Upon request, the filing party may request
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
16
<PAGE>
copies of notebook pages containing supporting experimental data. Upon request,
the filing party shall forward copies of official correspondence relating to the
relevant patent application filing.
(3) Each party specifically excludes any representation or
warranty, express or implied, that it will successfully obtain any Program
Patent.
(b) Perfection of Interest. Each party agrees to cooperate with the
other and take all reasonable additional actions and execute such agreements,
instruments, and documents as may be reasonably required to perfect the other's
ownership interest in accordance with the intent of this Article 8 including,
without limitation, the execution of necessary and appropriate instruments of
assignment.
(c) Patent Marking. Each party shall mark all Products manufactured,
used or sold under the terms of this Agreement, or their containers, in
accordance with the applicable patent marking laws, as required.
(d) Infringement of Patents by Third Parties.
(1) Each party shall promptly notify the other in writing of any
alleged or threatened infringement of the Tularik Patents, the Merck Patents, or
the Program Patents which may adversely impact the rights of the parties
hereunder, of which it becomes aware.
(2) Each party shall retain the right to bring, at such party's
expense, an appropriate action against any person or entity directly or
contributorily infringing a patent or Program Patent owned by such party. In
such event, the other party hereby agrees to cooperate reasonably with the owner
of such patent or Program Patent in any such efforts. Any recovery obtained by
the patent or Program Patent owner as a result of such action, whether obtained
by settlement or otherwise, shall be disbursed as follows: [ * ]. The non-owner
at its own election and expense shall have the right to be joined in any such
action as a party. No settlement, compromise or other disposition of any such
action which compromises the non-owner's rights under this Agreement shall be
entered into without such non-owner's prior written consent, which shall not be
unreasonably withheld. In the event that an alleged infringer is engaged in the
manufacture, use or sale of a drug product with applications in the Core Targets
or Option Targets in a country in which the non-owner [ * ], and the owner fails
to institute an infringement suit or take other reasonable action to protect the
relevant patent or Program Patent, the non-owner shall have the right, within [
* ] of notification to the owner of such alleged infringement, to institute such
suit or take other appropriate action at its own expense in the name of the
owner or non-owner, or both. In such event, the owner of the patent or Program
Patent shall cooperate reasonably with the non-owner, if applicable, in its
efforts to protect the relevant patent or Program Patent. Any recovery obtained
by the non-owner as a result of such proceeding, by settlement or otherwise,
shall be disbursed as follows: [ * ]. No settlement, compromise or other
disposition of any such proceeding which concerns the
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
17
<PAGE>
validity of any patent or Program Patent shall be entered into without the
patent or Program Patent owner's prior written consent, which shall not be
unreasonably withheld.
(3) In the event that the parties become aware of any alleged or
threatened infringement of the jointly-owned Program Patents, including but not
limited to any certification filed under the U.S. Drug Price Competition and
Patent Term Restoration Act of 1984, the parties shall confer and may agree
jointly to prosecute such infringement. If the parties do not agree on whether
or how to proceed with enforcement activity within (i) [ * ] following the
notice of alleged infringement [ * ], whichever comes first, then either party
may act in its own name to commence litigation with respect to the alleged or
threatened infringement. In the event that a party brings an infringement
action, the other party shall reasonably cooperate, including if required to
bring such action, the furnishing of a power of attorney. Neither party shall
have the right to settle any patent infringement litigation under this Section
8.2(d)(3) in a manner that diminishes the rights or interests of the other party
without the consent of such other party. The costs of any litigation commenced
solely by one party, pursuant to this Section 8.2(d)(3), including attorneys'
fees and expenses, shall be borne entirely by such party. The costs of any
litigation commenced by the parties jointly, shall be borne equally by the
parties (unless they agree to a different cost sharing arrangements in any
particular matter) with such costs to be accounted for and reimbursed under this
Section 8.2(d)(3), without an allocation for internal resources devoted to
litigation. [ * ], after reimbursement of both parties' reasonable expenses in
prosecuting such actions.
(e) Infringement of Third Party Rights.
(1) In the event that any Product manufactured or sold hereunder
becomes the subject of a claim for patent, copyright or other proprietary right
infringement anywhere in the world, and irrespective of whether Merck or Tularik
is charged with said infringement, and the venue of such claim, the parties
shall promptly confer to discuss the claim.
(2) The party responsible for marketing the Product which is the
subject of the infringement claim (the "Lead Defense Party") shall have the
right, but not the obligation, to assume the primary responsibility for the
conduct of the defense of any such claim. In the event that the Lead Defense
Party decides to assume responsibility for such defense, it shall [ * ]. In such
event, the non-Lead Defense party shall have the right, but not the obligation,
to participate in any such suit, at its sole option [ * ]. If the Lead Defense
Party decides not to assume responsibility for the conduct of the defense, the
Non-Lead Defense shall have the right, but not the obligation to conduct the
defense of the claim. Each party shall reasonably cooperate with the party
conducting the defense of the claim, including if required to conduct such
defense, furnishing a power of attorney. Neither party shall enter into any
settlement that affects the other party's rights or interests without such other
party's written consent, which consent shall not be unreasonably withheld.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
18
<PAGE>
9
TERM; TERMINATION
9.1 Term. Except as provided under Section 9.2 below, (a) the term of
this Agreement shall commence upon the Effective Date and shall expire on the
expiration date of the last to expire royalty obligation, and (b) upon
expiration of this Agreement, [ * ].
9.2 Termination.
(a) Material Breach. If either party materially breaches the Agreement
and the breaching party has not (i) cured the breach or (ii) initiated good
faith efforts to cure such breach to the reasonable satisfaction of the non-
breaching party, within [ * ] of written notice of breach from the non-breaching
party, the non-breaching party may terminate this Agreement upon expiration of
such [ * ] period. In the event of termination of this Agreement for material
breach, [ * ].
(b) Insolvency or Bankruptcy. Either party may terminate this
Agreement effective immediately and without liability upon written notice to the
other party if such other party (a) becomes insolvent or declares bankruptcy,
(b) becomes the subject of any proceedings seeking relief, reorganization or
rearrangement under laws relating to insolvency, (c) makes an assignment for the
benefit of creditors, or (d) commences the liquidation, dissolution or winding
up of its business.
9.3 Surviving Rights. The obligations and rights of the parties under
Articles 4, 7, 8, 9, 10, 11, 12, 14 and 15 and Sections 16.3, 16.4, 16.5, 16.6,
16.9 and 16.10 shall survive termination. Section 5.3 shall survive termination
in accordance with the terms provided in such Section.
9.4 Accrued Rights; Surviving Obligations. The termination, relinquishment
or expiration of the 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 any 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.
10
INDEMNIFICATION
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchanage Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
19
<PAGE>
10.1 Indemnification by Tularik. Subject to Section 10.2 below, Tularik
hereby agrees to indemnify, hold harmless and defend Merck against any and all
expenses, costs or defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts Merck becomes legally obligated to pay because of any claim or claims
against it to the extent that such claim or claims (i) are due to the neglect or
negligence of Tularik; or (ii) result from Tularik's activities under this
Agreement, except insofar as the claim or claims arise out of the possession,
manufacture, use, sale or administration of the Products by Merck or Merck's
Affiliates or sublicensees.
10.2 Indemnification by Merck. Merck hereby agrees to indemnify, hold
harmless and defend Tularik against any and all expenses, costs of defense
(including without limitation attorneys' fees, witness fees, damages, judgments,
fines and amounts paid in settlement) and any amounts Tularik becomes legally
obligated to pay because of any claim or claims against it to the extent that
such claim or claims (i) are due to the neglect or negligence of Merck; or (ii)
result from Merck's activities under this Agreement, except insofar as the claim
or claims arise out of the possession, manufacture, use, sale or administration
of the Products by Tularik or Tularik's Affiliates or sublicensees.
11
PUBLICATION; PUBLICITY
11.1 Publication. Each party to this Agreement recognizes that the
publication of papers, including oral presentations and abstracts, regarding the
Program Know-How and the Program Patents, subject to reasonable controls to
protect Confidential Information, will be beneficial to both parties.
Accordingly, each party shall have the right to review and approve any paper
proposed for publication by the other party, including oral presentations and
abstracts, which utilizes data generated from the Research Program and/or
includes Program Know-How or Confidential Information of the other party. Before
any such paper is presented or submitted for publication, the party proposing
publication shall deliver a complete copy to the other party at least [ * ]
prior to presenting the paper to a publisher. The receiving party shall review
any such paper and give its comments to the publishing party within [ * ] of the
delivery of such paper to the receiving party. With respect to oral presentation
materials and abstracts, the parties shall make reasonable efforts to expedite
review of such materials and abstracts, and shall return such items as soon as
practicable to the publishing party with appropriate comments, if any, but in no
event later than [ * ] from the delivery date thereof to the receiving party.
The publishing party shall comply with the other party's request to delete
references to such other party's Confidential Information in any such paper and
agrees [ * ].
11.2 Publicity. Except as otherwise provided herein or required by law, no
party shall originate any publication, news release or other public
announcement, written or oral, whether in the public press, or stockholders'
reports, or otherwise, relating to the existence of or the performance under
this Agreement, without the prior written approval of the other party, which
approval shall not be unreasonably withheld other than as may be necessary for
compliance with applicable governmental requirements.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
20
<PAGE>
12
CONFIDENTIALITY
12.1 Confidential Information; Exceptions. During the term of this
Agreement, and for a period of five (5) years after termination thereof, each
party will maintain all Confidential Information in trust and confidence and
will not disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose; in particular, Merck
shall not use the Tularik Know-How or the Tularik-owned Program Know-How, and
Tularik shall not use the Merck Know-How or the Merck-owned Program Know-How,
for the manufacture or sale of any products other than the Products, except as
expressly authorized by this Agreement. Each party may use such Confidential
Information only to the extent required to accomplish the purposes of this
Agreement. Confidential Information shall not be used for any purpose or in any
manner that would constitute a violation of any laws or regulations, including
without limitation the export control laws of the United States. Confidential
Information shall not be reproduced in any form except as required to accomplish
the intent of this Agreement. No Confidential Information shall be disclosed to
any employee, agent, consultant, Affiliate, or sublicensee who does not have a
need for such information. Each party will use at least the same standard of
care as it uses to protect proprietary or confidential information of its own to
ensure that such employees, agents, consultants and clinical investigators do
not disclose or make any unauthorized use of the Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.
Confidential Information shall not include any information which:
(a) is now, or hereafter becomes, through no act or failure to
act on the part of the receiving party, generally known or available;
(b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;
(c) is hereafter furnished to the receiving party by a third
party, as a matter of right and without restriction on disclosure;
(d) is independently developed by the receiving party without any
breach of this Agreement; or
(e) is the subject of a written permission to disclose provided by
the disclosing party.
12.2 Financial Terms. The parties agree that the material financial
terms of the Agreement will be considered Confidential Information of both
parties. Notwithstanding the foregoing, either party may disclose such terms to
bona fide potential sublicensees, if necessary; in connection with any such
disclosure, each party agrees to use its best efforts to secure confidential
treatment of such information. [ * ].
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
21
<PAGE>
13
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants:
13.1 Corporate Power. Such party is duly organized and validly existing
under the laws of the state of its incorporation and has full corporate power
and authority to enter into this Agreement and to carry out the provisions
hereof.
13.2 Due Authorization. Such party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.
13.3 Binding Agreement. This Agreement is a legal and valid obligation
binding upon it and is enforceable in accordance with its terms. The execution,
delivery and performance of this Agreement by such party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.
13.4 Intellectual Property. Such party (i) has the full right to grant
the licenses granted by it under this Agreement; and (ii) [ * ].
13.5 Third Party Compounds. To the extent that any compounds owned by
third parties are supplied by such party for activities contemplated by this
Agreement, such party has full right and license to use such third party
compounds for the contemplated activities. Such party represents and warrants,
that to the best of its knowledge, the use of such third party compounds in
accordance with the terms of this Agreement will not [ * ].
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
22
<PAGE>
14
IMPORT AND EXPORT CONTROLS
14.1 United States Laws. The parties understand and acknowledge that each
of them is subject to regulation by agencies of the U.S. government, including
the U.S. Department of Commerce, which prohibit export or diversion of certain
products and technology to certain countries. Any and all obligations of Merck
or Tularik to provide access to or license any technology pursuant to this
Agreement, as well as any technical assistance shall be subject in all respects
to such United States laws and regulations as shall from time to time govern the
license and delivery of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor or interim controlling legislation, and the
Export Administration Regulations issued by the Department of Commerce,
International Trade Administration, Bureau of Export Administration. Both
parties also agree to comply with the requirements of the U.S. Foreign Corrupt
Practices Act (the "Act") and shall refrain from making any payments to third
parties which would cause Merck or Tularik to violate the Act.
14.2 Non-United States Laws. Merck and Tularik shall each provide the
other party with such reasonable assistance as may be required for the party
requesting such assistance to comply with all non-United States laws,
ordinances, rules, regulations and the like of all governmental units or
agencies having jurisdiction pertaining to this Agreement, including without
limitation, obtaining all import, export and other permits, certificates,
licenses or the like required by such non-United States laws, ordinances, rules,
regulations and the like, necessary to permit the parties to perform hereunder
and to exercise their respective rights hereunder.
15
DISCLAIMER OF WARRANTIES; FURTHER ACTION
15.1 Disclaimers.
(a) Tularik Disclaimer. THE TULARIK TECHNOLOGY, INCLUDING THE
PROGRAM ASSAYS AND THE TULARIK SUBSTANCES, PROVIDED BY TULARIK HEREUNDER ARE
PROVIDED "AS IS" AND TULARIK EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without
limiting the generality of the foregoing, Tularik expressly does not warrant (i)
the success of any study or test commenced pursuant to the Research Program, or
(ii) the safety or usefulness for any purpose of Tularik Technology or the
Program Know-How.
(b) Merck Disclaimer. THE MERCK TECHNOLOGY, INCLUDING THE
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
23
<PAGE>
PROGRAM ASSAYS AND THE MERCK SUBSTANCES, PROVIDED BY MERCK HEREUNDER ARE
PROVIDED "AS IS" AND MERCK EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without
limiting the generality of the foregoing, Merck expressly does not warrant the
safety or usefulness for any purpose of the Merck Technology or the Program
Know-How.
16
MISCELLANEOUS
16.1 Waiver. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent or similar breach or default.
16.2 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and assigns;
provided, however, that neither party shall assign any of its rights and
obligations hereunder except (i) as incident to the merger, consolidations,
reorganization, or acquisition of stock or assets affecting substantially all of
the assets or actual voting control of the assigning party, or (ii) to an
Affiliate, provided, however, that in no event shall either party's obligations
under the Research Program be assigned to an Affiliate without prior written
consent of the other party.
16.3 Notices. Any notice or other communication required or permitted to
be given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective on the date of delivery if delivered in
person or by facsimile or five (5) days after mailing by registered or certified
mail, postage paid, to the other party at the following address:
In the case of Tularik: Tularik Inc.
Two Corporate Drive
S. San Francisco, CA 94080
Fax: (415) 829-4303
Attention: President
with a copy to: Cooley Godward Castro Huddleson & Tatum
Five Palo Alto Square
Palo Alto, CA 94306
Fax: (415) 857-0663
Attention: Brian C. Cunningham, Esq.
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
24
<PAGE>
In the case of Merck: Merck & Co., Inc.
One Merck Drive
P.O. Box 100, WS2A-10
White House Station, NJ 08889-0100
Attention: Vice President, Corporate Licensing
Either party may change its address for communications by a notice to the other
party in accordance with this section.
16.4 Headings. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
16.5 Amendment. No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by both parties.
16.6 Construction of Agreement and Choice of Law, Jurisdiction and Venue.
This Agreement and its terms and conditions shall be governed exclusively by and
construed according to the laws of California, U.S.A., excluding its choice of
law provisions and also excluding the United Nations Convention on Contracts for
the International Sale of Goods. The official text of the Agreement and any
Notices given or accounts or statements required hereby shall be in English.
16.7 Force Majeure. Any delays in performance by any party under this
Agreement (other than either party's failure to pay money to the other party,
unless such failure results solely from wire transfer failures beyond the
control of the paying party, or the like) shall not be considered a breach of
this Agreement if and to the extent caused by occurrences beyond the reasonable
control of the party affected, including but not limited to acts of God,
embargoes, governmental restrictions, strikes or other concerted acts of
workers, fire, flood, explosion, riots, wars, civil disorder, rebellion or
sabotage. The party suffering such occurrence shall immediately notify the other
party as soon as practicable and any time for performance hereunder shall be
extended by the actual time of delay caused by the occurrence.
16.8 Independent Contractors. In making and performing this Agreement,
Merck and Tularik act and shall act at all times as independent contractors and
nothing contained in this Agreement shall be construed or implied to create an
agency, partnership or employer and employee relationship between Tularik and
Merck. At no time shall one party make commitments or incur any charges or
expenses for or in the name of the other party.
16.9 Severability. If any term, condition or provision of this Agreement
is held to be unenforceable for any reason, it shall, if possible, be
interpreted rather than voided, in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms, conditions
and provisions of this Agreement shall be deemed valid and enforceable to the
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
25
<PAGE>
full extent.
16.10 Cumulative Rights. The rights, powers and remedies hereunder shall
be in addition to, and not in limitation of, all rights, powers and remedies
provided at law or in equity, or under any other agreement between the parties.
All of such rights, powers and remedies shall be cumulative, and may be
exercised successively or cumulatively.
16.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
16.12 Entire Agreement. This Agreement and any and all Schedules and
Appendices referred to herein embodies the entire understanding of the parties
with respect to the subject matter hereof and shall supersede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof, including the
Original Agreement, which is superceded as of the Amendment Date by this
Agreement.
IN WITNESS WHEREOF, both Merck and Tularik have executed this Agreement, in
duplicate originals, by their respective officers hereunto duly authorized, as
of the Amendment Date.
Tularik Inc. Merck & Co., Inc.
By: /s/ David V. Goeddel By: /s/ Raymond V. Gilmartin
--------------------------- --------------------------------------
David V. Goeddel Raymond V. Gilmartin
Title:President and Title: Chairman, President & CEO
-----------------------------------
Chief Executive Officer
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
26
<PAGE>
APPENDIX A
Targets and Assays
Core Targets
- - ------------
[ * ]
[ * ]
[ * ]
Core Target Assays
- - ------------------
[ * ]
[ * ]
[ * ]
Option Targets
- - --------------
[ * ]
[ * ]
Option Target Assays
- - --------------------
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
27
<PAGE>
APPENDIX B
Research Program
The research program, and the responsibilities of the two parties, shall be
as follows:
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
28
<PAGE>
APPENDIX C
Merck Option Reimbursement
The reimbursement costs of [ * ] referenced in Section 3.3(c) shall include the
following:
Direct Expenses
[ * ]
Indirect Expenses
[ * ]
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
29
<PAGE>
[ * ]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
30
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.9
Amendment No. 1 TO Research Collaboration and License Agreement
Between Tularik Inc. and Syntex (U.S.A.) Inc.
This Amendment No. 1 (this "Amendment") to the Research Collaboration
and License Agreement dated as of July 8, 1997 (the "Agreement") by and between
Syntex (U.S.A.) Inc., a Delaware corporation, through its Roche Bioscience
division, having offices at 3401 Hillview Avenue, Palo Alto, California 94304
("Roche Bioscience"), and Tularik Inc., a Delaware corporation having offices
at Two Corporate Drive, South San Francisco, California 94080 ("Tularik"), is
entered into as of December 19, 1997.
Whereas, the parties previously entered into the Agreement, which
provided for a collaboration between Roche Bioscience and Tularik to discover
proprietary Targets to use to identify proprietary compounds for development
into Products;
Whereas, the Parties wish to clarify certain Sections of the Agreement
relating to the disclosure of structural information on Validated Hits and the
transferring of compounds between the Parties;
Whereas, the parties desire to modify Schedule B of the Agreement to
clarify the universe of Tularik Background Patent Rights and Existing Third
Party Agreements;
Whereas, in order to accomplish the foregoing, the parties have agreed
to amend the Agreement in part;
Now, Therefore, in consideration of the premises and the mutual
covenants and agreements expressed herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, Tularik and Roche Bioscience hereby agree as
follows:
1. Section 1 of the Agreement is hereby amended by adding the following
Sections:
1.77 "Collaboration Medicinal Chemistry Program" means a program
for the chemical synthesis of structural analogs of a Validated Hit in
order to improve the biological properties of such Validated Hit towards a
Target as part of the Research Collaboration
1.78 "Primary Interest" means a small molecule that (i) is, at
the time of identification of such molecule as a Validated Hit, [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
1.
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1.79 "Roche Medicinal Chemistry Program" means a program
conducted by or on behalf of Roche for the chemical synthesis of structural
analogs of a compound in order to improve the biological properties of such
compound, excluding [ * ].
1.80 "Screening Party" has the meaning set forth in Section 5.7.
1.81 "Transferring Party" has the meaning set forth in Section
5.7.
2. Section 5.5 is hereby amended to read in its entirety as set forth
below:
5.5 Roche Bioscience Screening Library. The Roche Bioscience
Screening Library is not part of the Research Compound Library, but may, in
Roche Bioscience's sole discretion, be used in HTS against the Targets.
Except for the Roche Bioscience Screening License, Tularik shall have no
rights to compounds originating from the Roche Bioscience Screening Library
unless a Library Compound becomes a Development Compound under Section 5.2.
Roche Bioscience shall provide structural information on Validated Hits
from the Roche Bioscience Screening Library; [ * ]. Structural information
on compounds in the Roche Bioscience Screening Library that are not
Validated Hits shall [ * ]. Derivatives made as part of a Collaboration
Medicinal Chemistry Program from compounds originating from the Roche
Bioscience Screening Library shall be considered part of the Roche Compound
Library. The Roche Bioscience Screening Library shall be treated as Roche
Bioscience's Confidential Information. .
3. The penultimate sentence of Section 5.6 of the Agreement is hereby
amended to read as follows:
Derivatives made as part of a Collaboration Medicinal Chemistry Program
from compounds originating from the Tularik Screening Library shall be
considered part of the Research Compound Library.
4. Article 5 of the Agreement is hereby amended by adding a new Section
5.7:
Section 5.7 Transfer of Compounds. If either party (the "Transferring
Party") transfers compounds to the other party (the "Screening Party")
pursuant to the screening licenses set forth in Section 12.2 below, the
Screening Party shall use such compounds solely in accordance with the
terms of this Agreement. Such use must be at the Screening Party's place
of business and in accordance with the Research Plan. Any unused quantities
of the compounds shall be returned to the Transferring Party no later than
the end of the Research Term or, upon written request by Transferring
Party, destroyed according to prescribed federal, state and local
guidelines, including any written instructions received from the
Transferring Party. THE TRANSFERRING PARTY DOES NOT MAKE ANY WARRANTY AS
TO THE IDENTITY, PURITY OR ACTIVITY OF THE COMPOUNDS. The Screening Party
shall bear all risk and liability for all harm arising from its use of the
compounds.
5. Schedule B of the Agreement is hereby amended to read in its entirety
as set forth on Schedule B hereto.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
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6. Capitalized terms used herein but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Agreement.
7. Except as expressly modified by this Amendment, all of the terms and
conditions of the Agreement shall remain in full force and effect.
8. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same instrument.
In Witness Whereof, the parties have executed, or caused their duly
authorized officer or representative to execute, this Amendment as of October
__, 1997.
Tularik Inc.
By: /s/ David V. Goeddel
----------------------------------------
Name: David V. Goeddel, Ph.D.
Title: President and Chief Executive Officer
Syntex (U.S.A.) Inc.,
through its Roche Bioscience division
By: /s/ James N. Woody
----------------------------------------
Name: James N. Woody, M.D., Ph.D.
Title: President
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
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Schedule B
TULARIK BACKGROUND PATENT RIGHTS AND EXISTING THIRD PARTY
AGREEMENTS
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
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Exhibit 10.9
Research Collaboration and License Agreement
This Research Collaboration and License Agreement is entered into on July
8, 1997 (the "Effective Date"), by and between Syntex (U.S.A.) Inc., a Delaware
corporation, through its Roche Bioscience division, having offices at 3401
Hillview Avenue, Palo Alto, California 94304 ("Roche Bioscience"), and Tularik
Inc., a Delaware corporation having offices at Two Corporate Drive, South San
Francisco, California 94080 ("Tularik"). Roche Bioscience and Tularik may be
referred to herein as a "Party" or, collectively, as "Parties."
Whereas, Tularik is a recognized leader in conducting research in
inflammatory pathways with assays available or under development for certain key
targets.
Whereas, Roche Bioscience wishes to collaborate with Tularik to discover
proprietary Targets to use to identify proprietary compounds for development
into Products.
Now, Therefore, the Parties agree as follows:
1. Definitions
As used herein, the following terms shall have the following meanings:
1.1 "Additional Indications" means a medical condition that is not
included within the definition of Roche Bioscience Indication or Tularik
Indication.
1.2 "Adjusted Gross Sales" means the amount of gross sales invoiced by a
Developing Party, its Affiliates (which, with respect to Roche Bioscience, shall
include Genentech for purposes of this Section 1.2 only), or sublicensees for a
Product to Third Parties less deductions of returns (including withdrawals and
recalls), rebates (price reductions, including Medicaid and similar types of
rebates, e.g. chargebacks), volume (quantity) discounts, discounts granted at
the time of invoicing, sales taxes and other taxes (other than income taxes),
all to the extent directly linked to and included in the gross sales amount as
computed on a product by product basis for the countries concerned.
1.3 "Affiliate" means a business entity that owns, is owned by or is under
common ownership with a Party. For the purposes of this definition, the term
"owns" (including, with correlative meanings, the terms "owned by" and "under
common ownership with") as used with respect to any Party, shall mean the
possession (directly or indirectly) of more than fifty percent (50%) of the
outstanding voting securities of a corporation or comparable equity interest in
any other type of entity; provided, however, in any country where the local law
does not permit foreign equity participation of at least fifty percent (50%),
then an "Affiliate" includes any business entity in which a Party owns the
maximum percentage of outstanding stock or voting rights permitted by local law
and of which such Party exercises practical control of the management of such
entity's operations with respect to a Product; provided, further, however,
Genentech, Inc., with offices located at One DNA Way, South San Francisco,
California, 94080,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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shall not be considered an Affiliate of Roche Bioscience (other than for
purposes of Section 1.2 only) unless a duly authorized officer of Roche
Bioscience notifies Tularik in writing that Genentech shall be deemed an
Affiliate.
1.4 "Agreement" means the present agreement together with all appendices
and schedules, including the Research Plan.
1.5 "Application" has the meaning set forth in Section 11.3.2.
1.6 "Compound Libraries" means the Roche Bioscience Screening Library, the
Tularik Screening Library, and the Research Compound Library.
1.7 "Confidential Information" means, subject to the limitations contained
in Section 13.2, all information and materials received by either Party from
the other Party pursuant to this Agreement, including but not limited to the
information disclosed pursuant to Sections 6.3.2, 6.3.3, and 6.3.4.
1.8 "Cover" (including variations thereof such as "Covered, "Coverage", or
"Covering) means that the making, having made, using, offering for sale, selling
or importing of a particular product would infringe a Valid Claim of an issued
patent in the absence of rights under such patent. The determination of whether
a product is Covered by particular patent rights shall be made on a country by
country basis.
1.9 "Developing Party" means the Party whom the Research Management
Committee designates to develop a Research Compound into a Product as provided
in Section 5.2.
1.10 "Development Compound" means a Roche Bioscience Compound or a Tularik
Compound.
1.11 "Effective Date" has the meaning set forth in the first paragraph
hereof.
1.12 "Entry into Portfolio" means the date upon which [ * ].
1.13 "FDA" means the United States Food and Drug Administration.
1.14 "Field" means research, development and commercialization of [ * ],
for use in the treatment of Roche Bioscience Indications, Tularik Indications or
Additional Indications.
1.15 "Filing Party" has the meaning set forth in Section 11.3.1.
1.16 "First Commercial Sale" of a Product shall mean the first sale for use
or consumption of such Product in a country after required marketing and pricing
approval has been granted by the governing health regulatory authority of such
country.
1.17 "First Right of Negotiation" has the meaning set forth in Section 7.1.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.18 "FTE" means one full time-equivalent research employee.
1.19 "HTS" means high throughput screening.
1.20 "IND" means an Investigational New Drug application as defined in the
rules and regulations of the FDA.
1.21 "Independent Research" has the meaning set forth in Section 2.5.2.
1.22 "Invention" means any possibly patentable discovery or invention made
during the course of the Research Collaboration and within the scope of the
Research Plan. Determination of inventorship shall be made in accordance with
the patent laws of the United States of America.
1.23 "Inventing Party" means the Party having made an Invention.
1.24 "Joint Inventions" has the meaning set forth in Section 11.1.
1.25 "Joint Patent" means a Patent claiming a Joint Invention.
1.26 "Library Compound" means a compound from a Roche Bioscience Screening
Library or a Tularik Screening Library.
1.27 "Licensee" has the meaning set forth in Section 7.2.
1.28 "Major Market" means the United States, Japan, and the European Union;
provided, however, that if a European Union central filing is not made or is not
available, then instead of the European Union, a Major Market shall be one (and
only one) of the following countries: France, Germany or the United Kingdom.
1.29 "NDA" means a New Drug Application filed pursuant to the requirements
of the FDA or the equivalent application in any other country.
1.30 "Net Sales" means the amount calculated by [ * ].
1.31 "Offer" has the meaning set forth in Section 7.2.
1.32 "Officers" has the meaning set forth in Section 2.5.3.
1.33 "Patent" means (a) patents (including inventors certificates) that
include one or more Valid Claims, including without limitation any substitution,
extension (including supplemental protection certificate), registration,
confirmation, reissue, reexamination or renewal
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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thereof and (b) pending applications, including provisional applications,
continuations, divisionals, and continuations-in-part of any of the foregoing.
1.34 "Patent Management" has the meaning set forth in Section 11.3.1.
1.35 "Patent Costs" means the fees and expenses paid to outside legal
counsel and other Third Parties, and filing, prosecution and maintenance
expenses, incurred in connection with the establishment and maintenance of
Patent Rights.
1.36 "Patent Rights" means all rights under Patents.
1.37 "Pathways" means the [ * ], as described on Exhibit A, and any
additional pathways added to this Agreement upon the written agreement of the
Parties.
1.38 "Phase I" means that portion of the clinical development program which
generally provides for the first introduction into humans of a product with the
primary purpose of determining safety, metabolism and pharmacokinetic properties
and clinical pharmacology of the product, as more precisely defined by the rules
and regulations of the FDA and corresponding rules and regulations in other
countries.
1.39 "Phase II" means that portion of the clinical development program
which provides for the initial trials of a product on a limited number of
patients for the primary purpose of evaluating safety, dose ranging and efficacy
in the proposed therapeutic indication, as more precisely defined by the rules
and regulations of the FDA and corresponding rules and regulations in other
countries.
1.40 "Phase III" means that portion of the clinical development program
which provides for the continued trials of a product on sufficient numbers of
patients to establish the safety and efficacy of a product for the desired
claims and indications, as more precisely defined by the rules and regulations
of the FDA and corresponding rules and regulations in other countries. Any
trial designed to support a NDA without further clinical studies will be
considered a Phase III trial for purposes of this Agreement.
1.41 "Product" means any product incorporating a Development Compound, in
any formulation, designed for treatment of a Roche Bioscience Indication,
Tularik Indication or an Additional Indication, delivered by any route of
administration.
1.42 "Research Collaboration" means the research conducted by the parties
during the Research Term pursuant to the Research Plan and this Agreement.
1.43 "Research Compound" means any analog or other derivative compound,
including a peptidomimetic, that has been synthesized or acquired pursuant to
the Research Plan or at the direction of the Officers as provided in Section
2.5, and is based upon any Validated Hit.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.44 "Research Compound Library" means all Research Compounds.
1.45 "Research Plan" has the meaning set forth in Section 4.1.
1.46 "Research Term" has the meaning set forth in Section 6.1.
1.47 "Responsible Party" means the Party responsible for Patent Management.
1.48 "Right of First Refusal" has the meaning set forth in Section 7.2.
1.49 "RMC or Research Management Committee" has the meaning set forth in
Section 3.1.
1.50 "Roche" means Roche Bioscience together with its Affiliates.
1.51 "Roche Bioscience Compound" means a small molecule from any of the
Compound Libraries which the Research Management Committee designates as a
"Roche Bioscience Compound" pursuant to Section 5.2 or which Roche Bioscience
designates as a "Roche Bioscience Compound" pursuant to Section 6.3.2.
1.52 "Roche Bioscience Indications" means [ * ].
1.53 "Roche Bioscience Invention(s)" has the meaning set forth in Section
11.1.
1.54 "Roche Bioscience Patent" means a Patent claiming a Roche Bioscience
Invention.
1.55 "Roche Bioscience Screening Library" means the library consisting of
compounds that have been synthesized or acquired by or on behalf of either Roche
Bioscience or its Affiliates either (a) prior to the Effective Date or (b)
during the Research Term or the applicable Tail Period, if any, but independent
of the Research Collaboration.
1.56 "Roche Bioscience Screening License" has the meaning set forth in
Section 12.2.2.
1.57 "Royalty Receiving Party" has the meaning set forth in Section 10.1.
1.58 "Royalty Term" means, in the case of any Product, in any country, the
period of time commencing on the First Commercial Sale of such Product and
ending upon the later of (a) ten (10) years from the date of First Commercial
Sale of such Product in such country or (b) the expiration of the last to expire
of the Patent Rights Covering such Product in such country. Royalty Term shall
be determined on a Product by Product, country by country basis.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.59 "Scientifically Reasonable and Diligent Efforts" means, unless the
Parties agree otherwise, those efforts consistent with the exercise of prudent
scientific and business judgment, as applied to other products of similar
scientific and commercial potential within the relevant product lines of the
Developing Party and its Affiliates.
1.60 [ * ]
1.61 "Substantial Competition" means market penetration in a country with
respect to a Product by one or more Third Parties with a product [ * ].
1.62 "Tail Period" has the meaning set forth in Section 6.3.2.
1.63 "Target" means an [ * ] and is either (a) listed as an included target
on Exhibit A or (b) discovered by one or both Parties as part of the Research
Collaboration (excluding any molecule that is subject to prior rights of any
Third Party under an agreement with either Party at the time it is discovered,
which agreement is either listed on Exhibit 2 or is subject to the provisions of
Section 2.5) or (c) licensed by either Party during the Research Collaboration
pursuant to Section 2.5.
1.64 "Target Information" has the meaning set forth in Section 2.4.
1.65 "Third Party" means any entity other than Tularik or Roche Bioscience
or an Affiliate of Tularik or Roche Bioscience.
1.66 "Third Party Technology" has the meaning set forth in Section 2.5.2.
1.67 "Tularik Background Patent Rights" means all rights under Patents
existing as of the Effective Date that Tularik owns or to which it has a license
(with rights to sublicense as provided herein) and which relate to the Field,
and which Patents are set forth on Schedule B.
1.68 "Tularik Compound(s)" means a small molecule from any of the Compound
Libraries which the Research Management Committee designates as a "Tularik
Compound" pursuant to Section 5.2 or which Tularik designates as a "Tularik
Compound" pursuant to Section 6.3.2.
1.69 "Tularik Indications" means [ * ].
1.70 "Tularik Invention" has the meaning set forth in Section 11.1.
1.71 "Tularik Patent" means a Patent claiming a Tularik Invention.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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1.72 "Tularik Screening Library" means the library consisting of compounds
that have been synthesized or acquired by or on behalf of either Tularik or its
Affiliates either (a) prior to the Effective Date or (b) during the Research
Term or the applicable Tail Period, if any, but independent of the Research
Collaboration.
1.73 " Tularik Screening License" has the meaning set forth in Section
12.2.1.
1.74 "Valid Claim" means a claim of an issued patent which claim has not
lapsed, expired, been canceled or become abandoned and has not been declared
invalid by an unreversed and unappealable decision or judgment of a court or
other appropriate body of competent jurisdiction, and which has not been
admitted to be invalid or unenforceable through reissue or disclaimer.
1.75 "Validated Hit" means a small molecule that has shown activity against
a Target in primary screening as part of the Research Collaboration.
2. Research Collaboration
2.1 Scope of Research Collaboration. The Research Collaboration will
focus on Targets in the Pathways, both in finding new proprietary Targets as
well as with respect to Targets identified by Tularik prior to the Effective
Date, and the use of Targets for HTS assay development to discover proprietary
drug leads. The Research Collaboration will initially focus on elucidating
proprietary drug discovery Targets in the Pathways and is anticipated to be
restricted to proprietary Targets in the Pathways. Roche Bioscience and Tularik
shall conduct the Research Collaboration on a collaborative basis with the goal
of identifying Research Compounds that are suitable for development into
Products for commercialization. The Research Collaboration is intended to be
flexible to allow for pursuit of unforeseen opportunities in the area of
inflammation biology involving the Targets and the Pathways.
2.2 New Targets. If a Target is discovered as part of the Research
Collaboration, the Party discovering such new Target shall notify the Research
Management Committee. At the next Research Management Committee meeting, the
parties shall discuss such new Target. If the Research Management Committee
decides that the new Target should be included in the Research Collaboration,
then Roche Bioscience shall disclose whether the Target is under investigation
by another Roche research site. If the new Target is not under investigation by
Roche at such time, such new Target shall be included in the Research
Collaboration. If the new Target is under investigation by Roche at such time,
Roche Bioscience shall notify Tularik in writing within sixty (60) days of such
Research Management Committee meeting whether Roche Bioscience shall (a) exclude
such Target from the Research Collaboration and the definition of "Target" or
(b) include such Target in the Research Collaboration. If the Research
Management Committee or Roche Bioscience elects to exclude such Target from the
Research Collaboration, then each Party may pursue HTS, development and
commercialization activities against such Target outside of the Research
Collaboration subject to any proprietary rights of the other Party (including
its Affiliates) or any Third Party; provided, however, that the Party that did
not discover such Target shall not use any information developed during the
Research Collaboration with respect to such Target; and provided, further, that
the Party discovering such Target may not license it to a Third Party during the
Research Term and applicable Tail Period, if any. If Roche bioscience elects to
include such Target in the Research Collaboration, then it shall be treated as a
Shared Target (as defined below).
2.3 Shared Targets. Roche sites, other than Roche Bioscience, shall not
be prohibited under this Agreement from conducting research directed against a
Target included in the Research Collaboration (the "Shared Target") at any time
if such research is conducted by such Roche site independently of any Target
Information. If Roche Bioscience cannot reasonably demonstrate that a compound
directed against a Shared Target was developed by Roche without making use of
non-public information developed by Roche Bioscience or Tularik pursuant to the
Research Collaboration and relating to the Shared Target, then such Roche
compound shall be subject to milestones and royalty payments in accordance with
Sections 9.4 and 9.5. All Roche sites shall be free to use such Target
Information to the same extent as Roche Bioscience following the conclusion of
the Research Term.
2.4 Target Firewall. Nowithstanding the provisions of Section 13, during
the Research Term and the applicable Tail Period, Roche Bioscience shall not
disclose any Target Informaiton to any Affiliate, without the prior written
approval of Tularik. "Target Information" means information relating to the [*]
of Targets, the rationale behind such [ * ], and any other information relating
to Targets that is not in the public domain. Roche Bioscience may, however,
disclose to (a) the Roche Research Development Board (or its successor
committee), and other Roche officers responsible for oversight of Roche
Bioscience research activities or financing, the Targets on which it is working
and the general status of development of Research Compounds; (b) Roche Global
Development (or its successor organization) Target Information for purposes of
preparing for the commencement of a Phase III clinical study or the Entry into
Portfolio of a Development Compound directed against such Target; and (c) to
internal Roche or external patent counsel Target Information for purposes of
Patent Management of an Roche Bioscience Invention relating to such Target under
Section 11.3; provided, however, that Roche Bioscience shall not disclose more
information than the amount of information that Roche Bioscience discloses for
other Roche Bioscience development compounds without the prior written approval
of Tularik. Roche Bioscience agrees that the Roche groups receiving such
information shall not disclose such information to other Roche sites or to Third
Parties. The non-disclosure restrictions in this Section 2.4 shall cease for a
particular Target upon the earlier of the commencement of Phase III or the Entry
into Portfolio of a Roche Bioscience Compound directed against such Target.
Should Tularik acquire Affiliates, a comparable firewall shall be put in place
for Tularik at such time.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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2.5 Exclusivity/Third Party Agreements.
2.5.1 Exclusivity. Neither Tularik (nor any future Affiliates) nor
Roche Bioscience shall, during the Research Term and applicable Tail Period, if
any, enter into an agreement that grants rights in the Field to a Third Party,
without the prior written consent of the other Party, which consent may be
withheld in its sole discretion.
2.5.2 Activities Relating to the Field. Except as provided in this
Section 2.5, neither Tularik (nor any future Affiliates) nor Roche Bioscience
shall, during the Research Term and applicable Tail Period, if any, [ * ].
2.5.3 Joint Decision-Making Process. If either Party wishes to
acquire or use any Third Party Technology or conduct or fund any Independent
Research, it shall present such opportunity to the officers designated in
Section 17.2 (the "Officers"). If the Officers wish to include such Third Party
Technology or Independent Research in the Research Plan, then the Parties shall
mutually agree in writing on the terms under which such Third Party Technology
or Independent Research will be incorporated into the Research Collaboration,
including a reasonable sharing of the costs thereof; provided, however, that
Roche Bioscience shall [ * ]. If a Third Party agreement is relevant to such
decision, it shall be disclosed in full to the other Party. Each Party shall be
bound by the applicable terms and conditions of any Third Party agreement prior
to receiving access to Third Party Technology, including but not limited to any
milestones or royalty payments applicable to any compounds or products developed
by such Party using such Third Party Technology. The Developing Party shall be
responsible for fulfilling all such Third Party financial obligations applicable
to Development Compounds in accordance with Section 9.6. Each Party
acknowledges that any rights that derive from such Third Party agreements are
subject to the terms of such agreements, notwithstanding any provisions of this
Agreement. If the Officers do not agree to include such Third Party Technology
or Independent Research in the Research Plan on mutually-agreeable terms, then
the provisions of Section 2.5.5 shall apply.
2.5.4 Re-Presentation to Officers. If a Party proposes to acquire
Third Party Technology and the Officers do not agree to acquire such Third Party
Technology, then either Party may negotiate such an agreement with such Third
Party; provided however, that the negotiating Party shall re-present such
opportunity to the other Party pursuant to Section 2.5.3 promptly following
execution of such Third Party agreement.
2.5.5 Outside Activities. If the Officers do not agree to include
any particular Third Party Technology or Independent Research in the Research
Plan on mutually-agreeable terms, then, subject to Section 2.5.4, either Party
may conduct or fund such Independent
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Research, or use such Third Party Technology, outside the Research Collaboration
(the "Outside Activities"); provided, however, that [ * ]. Should such [ * ]
occur, the Party conducting the Outside Activities shall indemnify the other
Party for any [ * ]; provided, however, that the other Party takes commercially
reasonable steps, if any are possible or practical, to [ * ]; and provided,
further, that the other Party permits [ * ]. If a Party conducts or funds
Independent Research outside the Research Collaboration, and [ * ], then during
the Research Term such Party may not [ * ], except with the prior written
consent of the other Party, which consent may be withheld in its sole
discretion.
3. Research Management Committee
3.1 Formation of Research Management Committee. The Research
Collaboration shall be managed by the Research Management Committee comprised of
an equal number of members appointed by each of Roche Bioscience and Tularik;
provided that the size of the Research Management Committee shall not exceed a
total of eight members. Either Party may appoint substitute or replacement
members of the Research Management Committee to serve as their representatives.
The initial members of the Research Management Committee shall be appointed by
the Parties within 30 days following the Effective Date. The Research
Management Committee shall have the responsibility and authority to: (a) plan
and monitor the research; (b) assign tasks and responsibilities under the
Research Plan to Tularik and Roche Bioscience; (c) review and modify the
Research Plan as it shall deem appropriate to achieve the Parties' objectives of
developing commercially successful Products; and (d) nominate Research Compounds
for IND-enabling studies (and designate any such Research Compounds as either
Roche Bioscience Compounds or Tularik Compounds prior to the commencement of
such studies); provided that the Research Management Committee may not take any
action in conflict with the express terms of this Agreement.
3.2 Meetings of Research Management Committee. The Research Management
Committee shall initially meet at least four times per year at locations and
times to be determined by the Research Management Committee, with the intent of
meeting at alternating locations in South San Francisco, California and Palo
Alto, California, with each Party to bear all travel and related costs for its
members.
3.3 Decision-Making Process. All decisions made or actions taken by the
Research Management Committee shall be made unanimously by its members with the
Tularik members cumulatively having one vote and the Roche Bioscience members
cumulatively having one vote. Any disagreement which cannot be resolved by the
vote of the Research Management Committee shall be referred to the Officers for
resolution under Section 17.2. [ * ]. It is the intent of the Parties to
resolve issues relating to the Research Collaboration through the Research
Management Committee whenever possible and to refer issues to the Officers only
when resolution through the Research Management Committee cannot be achieved.
4. Conduct of Research
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9
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4.1 Research Plan. The research shall be conducted in accordance with the
initial research plan agreed upon and exchanged by the Parties concurrent with
the execution of this Agreement, as such research plan may be amended from time
to time in writing by the Research Management Committee (the "Research Plan").
The Research Plan defines the key decision points, timing to key decision
points, resource and funding allocation and other details identified by the
Research Management Committee. The Research Plan will be reviewed and approved
annually by the Research Management Committee to ensure adequate resource and
funding allocation to key activities at Tularik and Roche Bioscience [ * ]. If
there is a conflict between the provisions of the body of this Agreement and the
Research Plan, then the provisions of the body of this Agreement shall govern.
4.2 Tularik Responsibilities. Tularik shall provide [ * ]. Tularik shall
be responsible for [ * ]. Tularik shall [ * ]. Tularik shall conduct [ * ].
Tularik shall [ * ]. Based upon resources, Tularik may [ * ]. Tularik shall
conduct [ * ]. Tularik shall be responsible for [ * ]; provided, however, that
Tularik shall [ * ].
4.3 Roche Bioscience Responsibilities. Roche Bioscience may conduct [ *
]. Roche Bioscience (or its Affiliates) shall be responsible for [ * ].
4.4 Research Efforts. Each Party shall use Scientifically Reasonable and
Diligent Efforts to perform the respective responsibilities set forth in Section
4.2 and 4.3 and under the Research Plan; provided that Tularik shall not be
required to allocate more than [ * ] FTEs to the Research Collaboration in any
year. Except as expressly provided in Section 9.2 or as otherwise agreed from
time to time by the Parties, each of Roche Bioscience and Tularik shall bear all
of its own expenses incurred in connection with the Research Collaboration.
4.5 Abandonment. Roche Bioscience shall have the right to abandon one or
more of the Pathways if any of the following circumstances occur: [ * ];
provided however, that the occurrence of such circumstances shall not give rise
to a right to terminate the Research Collaboration or to reduce the research
support below the minimum provided in Section 9.2, provided, further, that the
Parties will use best efforts to substitute alternative inflammation targets or
pathways for further research, upon the mutual written agreement of both
Parties, to fully utilize the funding provided for in Section 9.2.
4.6 Availability of Resources. Each Party shall maintain laboratories,
offices and all other facilities reasonably necessary to carry out the Research
Collaboration. Each Party agrees to make its employees and non-employee
consultants reasonably available at their respective places of employment to
consult with the other Party on issues arising in the course of the Research
Collaboration and in connection with any request from any regulatory agency,
including, without limitation, regulatory, scientific, technical and clinical
testing issues. Representatives of Tularik and Roche Bioscience may, upon
reasonable notice and at times reasonably acceptable to the other Party (a)
visit the facilities where the Research Collaboration is being conducted; and
(b) consult informally, during such visits and by telephone and electronic mail,
with personnel of the other Party performing work on the Research Collaboration.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10
<PAGE>
4.7 Reports. Each Party shall make summary presentations of research
progress at each meeting of the Research Management Committee. Each Party will
also communicate informally and through the Research Management Committee to
inform the other of research done under the Research Collaboration. Each Party
will provide the other with raw data in original form or photocopies thereof for
any and all work carried out under the Research Collaboration as reasonably
requested by the other Party hereto. To avoid potential conflicts of interest,
[ * ]; provided, however, that if the parties cannot agree, [ * ]. To avoid
potential conflicts of interest, [ * ].
5. Compounds and Compound Libraries
5.1 Research Compound Library.
5.1.1 During the Research Term. During the Research Term, (a) each
Party may use Research Compounds in models compatible with their respective
Indications within the Field; (b) all data generated on Research Compounds as
part of the Research Collaboration shall be made available to each Party; and
(c) Roche Bioscience and Tularik shall each provide samples of the Research
Compounds it has synthesized (e.g. aliquots of Research Compounds) to the other
Party at such Party's request.
5.1.2 During and After the Research Term. During and after the
Research Term, (a) a common numbering system shall be maintained for the
Research Compounds; (b) each party may use all Research Compounds in any manner
such party deems appropriate, subject to Sections 5.2, 5.3, 6.3.2, 6.3.3, and
Article 8; (c) each Party shall, immediately prior to the filing of an IND for a
Research Compound outside the Field, disclose such filing, and the research
number of such Research Compound for which it is filed, to the other Party [ *
]; (d) the Parties shall cross-license to each other rights to the Research
Compounds in accordance with Sections 12.3, 12.4, and 12.5, as applicable.
5.2 Designation of Development Compounds. During the Research Term,
immediately prior to the [ * ] by either Party on any Research Compound or
Library Compound that is primarily directed against a Target, such Party shall
take such Research Compound or Library Compound to the Research Management
Committee for review. The Research Management Committee shall designate such
Research Compound or Library Compound as a Roche Bioscience Compound for
development by Roche Bioscience or a Tularik Compound for development by Tularik
based upon [ * ]. Neither Party may commence such studies on any Research
Compound or Library Compound that is primarily directed against a Target until
the Research Management Committee has made such designation. If, based on [ *
], a Research Compound is [ * ], the Research Management Committee shall
designate such Research Compound as [ * ].
5.3 [ * ]. Under no circumstances during the term of this Agreement and
thereafter, shall the [ * ]. If a Research Compound or Library Compound is
designated a Development Compound, or if a Party notifies the other Party that
it is [ * ] for a
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Research Compound pursuant to Section 5.1.2 or Section 6.3.3, [ * ]. However,
during the Research Term and applicable Tail Period, the other Party shall [ *
].
5.4 Additional Indication(s). Assignment of an Additional Indication as
either a Roche Bioscience Indication or a Tularik Indication shall be negotiated
in good faith between the Parties on an as needed basis. Following such
negotiation, such Additional Indication shall become a Roche Bioscience
Indication or a Tularik Indication, as the case may be; provided, however, that
if after such negotiations, the parties cannot agree on the assignment of an
Additional Indication, the Chair of the Research Management Committee shall
throw a well-balanced United States coin into the air and a representative from
Roche Bioscience shall call heads or tails while such coin is in the air. Heads
shall mean the side of the coin containing the phrase "In God We Trust." Tails
shall mean the side of the coin containing the phrase "E Pluribus Unum." If the
coin lands with the side of the coin that the Roche Bioscience representative
designated facing up, such Additional Indication shall be designated as a Roche
Bioscience Indication. If the coin lands with the side of the coin that the
Roche Bioscience representative did not designate facing up, such Additional
Indication shall be designated as a Tularik Indication.
5.5 Roche Bioscience Screening Library. The Roche Bioscience Screening
Library is not part of the Research Compound Library, but may, in Roche
Bioscience's sole discretion, be used in HTS against the Targets. Except for
the Roche Bioscience Screening License, Tularik shall have no rights to
compounds originating from the Roche Bioscience Screening Library unless a
Library Compound becomes a Development Compound under Section 5.2. Roche
Bioscience shall provide structural information on Validated Hits[ * ].
Derivatives made as a result of HTS as part of the Research Collaboration from
compounds originating from the Roche Bioscience Screening Library shall be
considered part of the Research Compound Library. The Roche Bioscience
Screening Library shall be treated as Roche Bioscience's Confidential
Information.
5.6 Tularik Screening Library. The Tularik Screening Library is not part
of the Research Compound Library, but may be used in HTS against the Targets.
Except for the Tularik Screening License, Roche Bioscience shall have no rights
to compounds originating from the Tularik Screening Library unless a Library
Compound becomes a Development Compound under Section 5.2. Tularik shall
provide structural information to Roche Bioscience on Validated Hits [ * ].
Derivatives made as a result of HTS as part of the Research Collaboration from
compounds originating from the Tularik Screening Library shall be considered
part of the Research Compound Library. The Tularik Screening Library shall be
treated as Tularik's Confidential Information.
6. Research Term
6.1 Research Term. The term of the Research Collaboration shall commence
on the Effective Date and end on the fifth anniversary of such Effective Date
unless it is terminated early in accordance with Section 6.2 or Section 15.2
(the "Research Term").
6.2 Early Termination of Research Term.
6.2.1 Third Anniversary. Roche Bioscience may terminate the Research
Collaboration effective as of the third anniversary of the Effective Date upon
four months' advance written notice if the Research Management Committee decides
that (a) the then current Research Plan does not provide opportunities for new
Products (i.e. the Pathways have been fully exploited and no opportunities
remain within the Field) or (b) Tularik has been unable to meet its obligations
as defined in the Research Plan.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
6.2.2 [ * ].
6.3 Impact of Expiration or Termination.
6.3.1 Survival. Upon conclusion of the Research Term or applicable
Tail Period, if any, all terms and obligations of this Agreement shall remain in
full force and effect unless a Development Compound does not exist, in which
case this Agreement shall expire in accordance with Article 15.
6.3.2 Tail Period. Notwithstanding the provisions of Section 6.3.1,
if the Research Collaboration terminates pursuant to Section 6.2.1, then for a
period of [ * ] months following the end of the Research Term or, if the
Research Collaboration continues for five (5) years, for a period of [ * ]
months following the end of the Research Term (each period of time, a "Tail
Period"), each Parties' use of compounds from any Compound Library in the Field
(other than Outside Activities pursuant to Section 2.5) shall be subject to the
terms of this Section 6.3.2. Upon initiation of any [ * ] on any such compound
that is [ * ] during the applicable Tail Period, the Party developing such
compound shall notify the other Party that such studies are to commence and, if
such compound is a Research Compound, disclose the research number of such
Research Compound. Thereafter, such compound shall be treated as a Development
Compound of the notifying Party subject to all terms of this Agreement. If the
Research Term terminates early pursuant to Section 15.2, then there shall be no
Tail Period for the non-breaching Party and a [ * ] Tail Period for the
breaching Party as provided in Sections 15.3.2 and 15.3.3.
6.3.3 Post Research Term/Tail Period Notifications. At the end of
the Research Term or the applicable Tail Period, if any, both Parties are free
to use the Research Compound Library within the Field (other than the
Development Compounds) without regard to the terms of this Agreement; provided,
however, that each Party shall, immediately prior to the filing [ * ] for a
Research Compound in the Field, disclose such filing, and the research number of
such Research Compound for which it is filed, to the other Party and the other
Party shall not, in accordance with Section 5.3, develop the same Research
Compound.
6.3.4 Status Reports. Each Party shall prepare and deliver to the
other Party status reports every [ * ] following expiration of the Research
Term. Each such status report shall be a summary of progress with respect to
the Development Compounds. Status reports shall continue to be prepared and
delivered for the longer of (i) the applicable Tail Period or (ii) the period of
time that a Party is developing a Development Compound, to enable the Parties to
ensure that each Party is discharging the obligations contained in Article 8, [
* ], and to ensure that each Party is otherwise in compliance with this
Agreement.
7. First Right of Negotiation and Right of First Refusal
7.1 First Right of Negotiation. Under the terms and conditions set forth
herein, Roche Bioscience shall have a first right to negotiate with Tularik for
an exclusive license,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13
<PAGE>
including the right to grant sublicenses, to develop, make, have made, use,
offer for sale, sell and import certain compounds or products as described in
this Section 7.1 (the "First Right of Negotiation"). Roche Bioscience shall
provide written notice to Tularik if Roche Bioscience wishes to exercise a First
Right of Negotiation and Tularik shall provide written notice to Roche
Bioscience prior to entering into any negotiation in the areas described in this
Section 7.1. During the [ * ] period following any such notice, Roche Bioscience
and Tularik shall negotiate in good faith regarding the terms and conditions of
such agreement. If Roche Bioscience and Tularik are unable to agree upon
mutually acceptable terms for any such agreement by the end of the applicable [
* ] period, Tularik shall be free to grant such rights to a Third Party. The
Right of First Negotiation shall expire upon the termination of the Research
Term or applicable Tail Period.
7.1.1 [ * ] Pathways. Roche Bioscience shall have a First Right of
Negotiation to collaborate with Tularik to discover compounds [ * ], all as
described on Schedule A.
7.1.2 [ * ] Roche Bioscience shall have the First Right of
Negotiation for [ * ].
7.2 Right of First Refusal. Under the terms and conditions set forth
herein, Tularik shall grant Roche Bioscience a right of first refusal for an
exclusive license, including the right to grant sublicenses, to develop, make,
have made, use, offer for sale, sell and import certain compounds or products as
described in this Section 7.2 (the "Right of First Refusal"). Tularik shall
negotiate exclusively with Roche Bioscience for [ * ] for such licenses prior to
Tularik offering such opportunity to any Third Party. If the Parties have not
reached agreement by the end of such [ * ] exclusive negotiation period, Tularik
may negotiate with Third Parties. When Tularik and such Third Party have
reached consensus on the financial terms and general scope of a proposed license
agreement, Tularik must offer Roche Bioscience the opportunity to enter into a
license agreement with Tularik on the same financial terms and general scope of
such proposed license agreement (the "Offer"). Roche Bioscience has [ * ] to
unqualifiedly accept or decline such Offer in writing. If Roche Bioscience
fails to respond within such time period, it shall be deemed to have declined
such Offer. If Roche Bioscience declines the Offer, Tularik has no further
obligation to grant such a Right of First Refusal to Roche Bioscience with
respect to the license opportunity that Roche Bioscience has declined; provided,
however, that if Tularik and any Third Party materially reduce the financial
terms that were offered to Roche Bioscience, Tularik must re-offer the new terms
to Roche Bioscience. Roche Bioscience has [ * ] to unqualifiedly accept or
decline such Offer in writing. If Roche Bioscience fails to respond within such
time period, it shall be deemed to have declined such Offer.
7.2.1 [ * ] Roche Bioscience shall have the Right of First Refusal
[ * ]. If Roche Bioscience declines its Right of First Refusal and Tularik [
* ]. This Right of First Refusal shall expire upon the expiration or
termination of this Agreement.
7.2.2 [ * ] Roche Bioscience shall have the Right of First Refusal
to collaborate with Tularik to develop [ * ]. This Right of First Refusal shall
expire upon the expiration or termination of this Agreement.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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<PAGE>
7.2.3 [ * ] Roche Bioscience shall have the Right of First Refusal
to collaborate with Tularik to develop [ * ]. This Right of First Refusal shall
commence upon the third anniversary of the Effective Date and expire upon the
expiration or termination of the Research Term or applicable Tail Period.
8. Reversion Rights
8.1 Diligence. The Developing Party shall use Scientifically Reasonable
and Diligent Efforts to develop and commercialize Development Compounds into
Products; provided, however, that either Party may terminate development of a
Development Compound at any time for any reason and, subject to Section 8.4, the
Developing Party may elect in its sole discretion whether to market a Product in
a given country.
8.2 Pre-IND. After a compound has been designated as a Development
Compound and prior to acceptance of an IND for such Development Compound, if a
Developing Party (a) determines to discontinue development of such Development
Compound for any reason or (b) fails to [ * ] of such designation, then the
other Party shall have the right to designate such Development Compound in
writing as its own Development Compound for its own Indications and shall pay
the subsequent applicable milestone(s) (if Roche Bioscience is the other Party)
and royalties to the former Developing Party at the rates set forth in Sections
9.4 and 9.5. If such Party does not designate such Development Compound in
writing as its own Development Compound within [ * ], or if such Party does make
such written designation but subsequently determines to discontinue development
of such Development Compound for any reason, then such Development Compound
shall return to the Compound Library from which it originated (i.e., the
Research Compound Library, the Roche Bioscience Screening Library or the Tularik
Screening Library, as appropriate).
8.3 Post-IND/Pre-NDA. After acceptance of an IND for a Development
Compound but prior to NDA approval for such Development Compound, if a
Developing Party (a) determines to discontinue development of a Development
Compound for any reason or (b) fails to [ * ], then the other Party shall have
the right to designate such Development Compound in writing as its own
Development Compound for its own Indications and shall pay the subsequent
applicable milestone(s) (if Roche Bioscience is the other Party) and royalties
to the former Developing Party at the rates set forth in Sections 9.4 and 9.5.
If such Party does not designate such Development Compound in writing as its own
Development Compound within [ * ], or if such Party does make such written
designation but subsequently determines to discontinue development of such
Development Compound for any reason, then such Development Compound shall return
to the Compound Library from which it originated (i.e., the Research Compound
Library, the Roche Bioscience Screening Library or the Tularik Screening
Library, as appropriate). Any dispute as to whether or not the Developing Party
shall have [ * ] shall be resolved in accordance with Section 17.
8.4 Failure to [ * ] Following approval of an NDA for a Product
containing a Development Compound in a Major Market, if Tularik fails to [ * ],
Roche Bioscience may, at its
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15
<PAGE>
option, [ * ] and have the right to [ * ]. If Tularik licenses or sublicenses a
Development Compound or Product, this Section 8.4 shall not apply to the
licensee or sublicensee.
9. Payments
9.1 Technology Access Fee. Within ten (10) calendar days of the Effective
Date, Roche Bioscience shall pay Tularik a technology access fee equal to [ * ].
Such technology access fee shall be non-refundable and shall not be credited
against royalties payable to Tularik under this Agreement.
9.2 Research Funding. Roche Bioscience shall provide funding to support
Tularik research in the Field during the Research Term in accordance with the
Research Plan. During the Research Term, Roche Bioscience shall [ * ] for an
aggregate cost of [ * ] per year to support the Research Plan. [ * ].
9.3 Development Costs. Roche Bioscience or its Affiliates shall be
responsible for development costs of Roche Bioscience Compounds in Roche
Bioscience Indications. Tularik shall be responsible for development costs of
Tularik Compounds in Tularik Indications.
9.4 Milestones.
9.4.1 Milestones Payments. Roche Bioscience shall pay Tularik the
following amounts within thirty (30) days after each occurrence of the following
events. Each payment under this Section 9.4.1 shall be made for, and only for,
the first Roche Bioscience Compound directed against each particular Target that
achieves such milestone.
Payment Milestone
- - ------------------------------------------------------------------------------
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
Roche Bioscience shall notify Tularik of the occurrence of each milestone for
each Roche Bioscience Compound. Such milestone payments shall be non-refundable
[ * ]. Further milestone payments shall not be paid with respect to any
particular Roche Bioscience Compound if it [ * ]. If a Roche Bioscience
Compound is developed for additional Roche Bioscience Indications, [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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9.4.2 Additional Clinical Milestones. If Roche Bioscience develops
another Roche Bioscience Compound directed against the same Target for which all
milestones under Section 9.4.1 have previously been paid, and such new Roche
Bioscience Compound is being developed for a different Roche Bioscience
Indication than the original Roche Bioscience Compound for which Roche
Bioscience has previously paid the milestones, then Roche Bioscience shall
[ * ].
Payment Additional Clinical Milestone
- - --------------------------------------------------------------------------
[ * ] [ * ]
[ * ] [ * ]
[ * ]. 9.4.3 No Milestone Payments by Tularik. Tularik shall not be
obligated to make any milestone payments to Roche Bioscience.
9.5 Royalties.
9.5.1 Reciprocal Royalties. The Developing Party shall owe the other
Party the following royalties based on the Net Sales of each Product during the
Royalty Term.
Royalty Rate Net Sales
- - --------------------------------------------------------------------------
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
9.5.2 Royalty Reduction. If the Developing Party is required to pay
royalties to a Third Party to avoid infringing Third Party patent rights [ * ],
then the royalties due to the other Party in any calendar quarter shall be
reduced by [ * ] percent [ * ] of the amount of such Third Party royalties in
such calendar quarter, provided that in no calendar quarter shall the other
Party receive less than the minimum royalty rates set forth in the chart below
by reason of this Section 9.5.2.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
17
<PAGE>
Minimum Royalty Rate Net Sales
- - --------------------------------------------------------------
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
9.5.3 Further Reduction in Minimum Royalties. If the aggregate Third
Party royalties the Developing Party is required to pay to Third Parties to [ *
], including but not limited to Third Party royalties described in Section 9.5.2
and royalties due to the other Party under Sections 9.5.1 or 9.5.2, exceed an
aggregate of [ * ] of Net Sales of the Product in any calendar year, then the
last two minimum royalty rates set forth in Section 9.5.2 shall be further
reduced as follows. [ * ].
9.5.4 [ * ] If Tularik licenses or sublicenses a Research Compound
to a Third Party to commercialize such [ * ], then Tularik shall pay Roche
Bioscience royalties of [ * ] of the minimum royalty rates set forth in the
table in Section 9.5.2, as adjusted pursuant to Section 9.5.5, on Net Sales of
such Research Compound determined as if such product was a Product, including
the provisions of Article 10.
9.5.5 No Patent Protection. If a Product is not Covered by a Valid
Claim of a Patent and there is Substantial Competition in a country with respect
to such Product in a calendar year, each Royalty Rate, including each Minimum
Royalty Rate, shall be reduced for Net Sales in such country by [ * ].
9.6 Third Party Agreements. The Developing Party shall be responsible for
fulfilling all Third Party obligations, including but not limited to financial
obligations, arising with respect to the development and commercialization of
Development Compounds under agreements either Party has with Third Parties,
including but not limited to agreements for [ * ], subject to Sections 9.5.2 and
9.5.3; provided, however, that such Third Party agreement has been approved by
the Officers in accordance with Section 2.5.
10. Records; Audits; and Reports
10.1 Records. During the term of this Agreement and for a period of Two
years thereafter, the Developing Party shall keep complete and accurate records
pertaining to the sale or other disposition of Products in sufficient detail to
permit the other Party (the "Royalty Receiving Party") to confirm the accuracy
of all payments due hereunder.
10.2 Audit
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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10.2.1 Independent Audit by Developing Party's Auditors. During the
term of this Agreement and for a period of two years thereafter, the Developing
Party shall keep complete and accurate records pertaining to the sale or other
disposition of Products in sufficient detail to permit the Royalty Receiving
Party to confirm the accuracy of all payments due hereunder. Upon the request
of the Royalty Receiving Party, the Developing Party shall, at its own expense,
instruct its independent accounting firm to perform, during the Developing
Party's annual audit, such additional auditing and accounting procedures as are
necessary to enable such accounting firm to confirm to the Royalty Receiving
Party the correctness of (a) the amounts stated in any reports provided by the
Developing Party to Royalty Receiving Party and (b) to the extent specifically
and reasonably requested, in a timely manner, by an independent accounting or
audit specialty firm designated by the Royalty Receiving Party, other relevant
details pertaining to the sale of other disposition of Products and of the
royalty and other amounts payable or receivable under this Agreement, including
the relevant details of Adjusted Gross Sales and Net Sales; such additional
accounting and auditing procedures need only to be performed for countries
specifically requested by the Royalty Receiving Party.
10.2.2 Independent Audit by Royalty Receiving Party's Auditors.
Notwithstanding the foregoing, if (a) the Royalty Receiving Party believes that
an additional audit is appropriate after reviewing the information received from
the Developing Party's independent accounting firm, (b) the Developing Party
elects not to have its independent auditors prepare such an audit report for the
Royalty Receiving Party, or (c) a Royalty Receiving Party believes in good faith
that inaccuracies in the reporting have occurred, the Royalty Receiving Party
shall have the right to cause an independent, major certified public accountant
firm reasonably acceptable to the Developing Party to audit such records to
confirm the Developing Party's Net Sales for the preceding three years. Any
information obtained during such audit shall be treated as Confidential
Information of the Developing Party. Such audits may be exercised during normal
business hours once a year upon at least thirty (30) working days' prior written
notice to the Developing Party. The Royalty Receiving Party shall bear the full
cost of such audit unless such audit discloses a variance of more than [ * ]
from the amount of the Net Sales reported by the Developing Party for such
audited period. In such case, the Developing Party shall bear the full cost of
such audit. The terms of this Section 10.2 shall survive any termination or
expiration of this Agreement for a period of two years.
10.3 Payment; Reports. All royalty payments due to either Party under this
Agreement shall be paid within [ * ] of the end of each calendar quarter, unless
otherwise specifically provided herein. Each payment of royalties shall be
accompanied by a report of Net Sales in sufficient detail to permit confirmation
of the accuracy of the royalty payment made.
10.4 Exchange Rate. Royalty payments and reports for the sale of Products
shall be calculated and reported for each calendar quarter. With respect to
each quarter, for countries other than the United States, whenever for the
purpose of calculating royalties conversion from any foreign currency shall be
required, such conversion shall be made as follows:
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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10.4.1 Roche Exchange Rate. When calculating the Adjusted Gross
Sales for Roche, the amount of such sales in foreign currencies shall be
converted into Swiss Francs as computed in the central Roche's Swiss Francs
Sales Statistics for the countries concerned, using the average monthly rate of
exchange at the time for such currencies as retrieved from the Reuters System.
When calculating the royalties on Net Sales for Roche, such conversion shall be
at the average rate of the Swiss Franc to the United States dollar as retrieved
from the Reuters System for the applicable calendar quarter.
10.4.2 Tularik Exchange Rate. When calculating the Adjusted Gross
Sales for Tularik, the amount of such sales in foreign currencies shall be
converted into United States dollars for the countries concerned, using the
average monthly rate of exchange for such currencies as retrieved from the
Reuters System or such other exchange mechanism as Roche Bioscience shall
approve, which approval shall not be unreasonably withheld or delayed.
10.5 Manner and Place of Payment. All payments owed under this Agreement
shall be made by wire transfer, unless otherwise specified by the receiving
Party.
10.6 Late Payments. In the event that any payment, including royalty,
milestone and research payments, due hereunder is not made when due, the payment
shall accrue interest from the date due until the date paid at the rate of [ * ]
per month; provided that in no event shall such rate exceed the maximum legal
annual interest rate. The payment of such interest shall not limit any Party
from exercising any other rights it may have as a consequence of the lateness of
any payment.
10.7 Taxes. All turnover and other taxes levied on account of the
royalties and other payments accruing to each Party under this Agreement shall
be paid by the Party receiving such royalty or other payment for its own
account, including taxes levied on income of the Royalty Receiving Party. If
provision is made in law or regulation for withholding, such tax shall be
deducted from the royalty or other payment made by the Party making such payment
to the proper taxing authority and a receipt of payment of the tax secured and
promptly delivered to the Royalty Receiving Party. Each Party agrees to assist
the other Party in claiming exemption from such deductions or withholdings under
any double taxation or similar agreement or treaty from time to time in force.
11. Patent Rights and Infringement
11.1 Ownership and Inventorship. Any Invention that is made (a) solely by
one or more representatives of Tularik shall be owned solely by Tularik (a
"Tularik Invention"); (b) solely by one or more representatives of Roche
Bioscience shall be owned solely by Roche Bioscience (a "Roche Bioscience
Invention"); and (c) jointly by one or more representatives of Tularik and one
or more representatives of Roche Bioscience shall be owned jointly by Tularik
and Roche Bioscience (a "Joint Invention"). Determination of inventorship shall
be made in accordance with the patent laws of the United States of America. If
the parties cannot agree on inventorship, determination of inventorship shall be
made by mutually agreed upon patent counsel in accordance with the patent laws
of the United States of America.
11.2 Disclosure. As soon as an Inventing Party determines that an
Invention may have been made, it shall promptly inform the other Party in
writing and then provide a summary of the possible Invention as soon as possible
and in no event no later than the date of filing a priority patent application
for the Invention.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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11.3 Patent Management.
11.3.1 Filing Party. Only one Party shall be responsible for the
preparation, filing, prosecution, and maintenance (the "Patent Management") of a
Patent (the "Filing Party"), subject to the provisions of Section 11.3.2. The
Inventing Party shall be initially responsible for the Patent Management of any
Patent Covering an Invention; provided however, that when the Research
Management Committee designates the first Research Compound claimed within such
Patent as a Development Compound and the Developing Party is not the Inventing
Party, responsibility for the Patent Management of such Patent shall be
transferred to the Developing Party. With respect to Joint Patents, the
Research Management Committee shall initially allocate responsibility for Patent
Management in accordance with the relative inventive contributions of the
Parties, with Patent Management responsibility being transferred as described
above if and when a compound Covered in the Joint Patent is designated as a
Development Compound. Subject to Section 11.4, once Patent Management is
transferred as described above, Patent Management shall remain the
responsibility of the Developing Party, subject to Section 11.3.2, even if the
other Party begins to develop a related compound Covered in the Patent. If a
Party begins development of a Research Compound pursuant to Section 5.1.2 or
6.3.3 and such Party is not the Inventing Party, the Inventing Party shall
transfer responsibility for Patent Management for such Patent to the Party
developing such Research Compound; [ * ]. In the event of any disagreement
concerning any Joint Patent, the matter shall be resolved in accordance with
Section 17.2.
11.3.2 Review Procedures. The Filing Party shall provide the other
Party with drafts of any patent application directed to an Invention (the
"Application") prior to filing the Application, with a request for review within
a certain time period. The Filing Party shall endeavor to allow at least [ * ]
but a minimum of [ * ] for review and comment by the other Party. The Filing
Party shall endeavor in good faith to incorporate such comments, particularly if
the other Party is developing a compound that may be Covered in such Patent. If
the other Party fails to respond within the time period specified by the Filing
Party (which shall be at least [ * ], the Filing Party shall not be obligated to
delay the filing of such Application. In addition, the Filing Party shall
promptly provide the other Party with copies of all substantive communications
to and from the United States or any foreign patent office regarding such patent
applications and resulting patents, allowing at least [ * ] for review and
comment by the other Party prior to the due date for the response to the patent
office. Each Party shall maintain any information received from the other Party
relating to a Patent as Confidential Information of the other Party.
11.4 Reversion. If (a) a Development Compound for which an Application has
been filed is returned to the Research Compound Library and the other Party is
either developing a related compound or elects to develop such Research Compound
pursuant to Section 8.2 or 8.3, or (b) the Filing Party elects upon prior
written notice to the other Party (given at least ninety (90) days prior to any
relevant deadline) to (i) discontinue prosecution or maintenance or (ii) not to
file or conduct any further activities (including conducting any interferences,
re-examinations, reissues, or oppositions) with respect to an Application or a
Patent, then the Filing Party shall
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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offer to transfer such Application or Patent to the other Party, who may, at its
sole discretion, accept such transfer.
11.5 Patent Costs. Except for Patents Covering Research Compounds, [ * ]
shall be responsible for all Patent Costs for the Patent Rights [ * ]. All
Patent Costs for the Joint Patents shall be divided equally between the Parties,
[ * ]. The Party developing a Research Compound shall pay the Patent Costs for
Patents Covering such Research Compound; provided, however, that if both Parties
are developing compounds claimed in such Patent, then the Patent Costs shall be
divided equally between the Parties.
11.6 Non-Patentable Technology. All non-patentable information and
materials generated or developed in the course of the Research Collaboration
solely by one or more representatives of Roche Bioscience shall be owned solely
by Roche Bioscience. All non-patentable information and materials generated or
developed in the course of the Research Collaboration solely by one or more
representatives of Tularik shall be owned solely by Tularik. All non-patentable
information and materials generated or developed in the course of the Research
Collaboration by one or more representatives of both Roche Bioscience and
Tularik shall be owned jointly by Roche Bioscience and Tularik.
11.7 Foreign Patent Filings. For a given priority Application, the Filing
Party shall provide to the other Party no later than [ * ] after its filing date
in the United States, a list of countries in which it intends to perform
corresponding foreign filing. Upon written request by the other Party, the
Filing Party shall file and prosecute the Application in all other additional
countries requested by the other Party at the sole expense of the other Party
(out-of-pocket expenses only).
11.8 Cooperation of the Parties. Each Party agrees to cooperate fully in
the Patent Management of any Patent Rights under this Agreement. Such
cooperation includes, but is not limited to: (a) turning over to the Party to
whom responsibility for Patent Management has been transferred, all files,
papers and documents relating to such transferred Patent; (b) executing all
papers and instruments, or requiring its employees or agents, to execute such
papers and instruments, so as to effectuate the ownership of Patent Rights set
forth in Section 11.1 and to enable the other Party to apply for and to
prosecute Applications in any country; and (c) promptly informing the other
Party of any matters coming to such Party's attention that may affect the Patent
Management of any such Application.
11.9 Infringement by Third Parties. Each Party shall promptly notify the
other Party in writing of any alleged or threatened infringement by a Third
Party of any Tularik Patent, Roche Bioscience Patent or Joint Patent of which
they become aware and provide the other Party with all evidence in its
possession supporting said infringement. The Parties agree to cooperate in
taking commercially reasonable legal actions to protect the commercial interests
of the Parties in the Research Collaboration, Research Compounds, Development
Compounds or a Product against infringement by Third Parties. The Party having
responsibility for Patent Management shall take the lead in any such action.
If, within [ * ] following learning of the infringement by a Third Party, such
Party fails to take commercially reasonable action against the Third Party to
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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halt such alleged infringement, the other Party shall, in its sole discretion,
have the right to take such action in such country as it deems warranted in its
own name and/or in the name of the other Party; the Party maintaining such
action shall be responsible for [ * ] and shall be entitled to receive [ * ]. If
more than one Party wishes to participate in taking action to protect the
commercial interests of the Parties in the Product against infringement, then an
authorized representative of each Party shall control such action; the costs of
maintaining such action shall be [ * ], and the damages recovered from such
action for the past infringement shall be [ * ]. Each Party shall render such
reasonable assistance as the prosecuting Party may request.
11.10 Third Party Patent Rights. Each Party shall promptly notify the
other if it receives any notice that activities involving the Research
Collaboration or the development or commercialization of Development Compounds
allegedly infringe a Third Party's proprietary rights. The Parties shall consult
concerning the action(s) to be taken. The Developing Party shall have the sole
right and responsibility for addressing such alleged infringement regarding
Development Compounds, and bearing the cost thereof, subject to Sections 9.5.2
and 9.5.3.
12. Licenses and Other Commercial Rights
12.1 Tularik Background Patent Rights
12.1.1 Research License. Tularik hereby grants Roche Bioscience a
non-exclusive, worldwide license (without the right to sublicense) under Tularik
Background Patent Rights to conduct research during the Research Term and the
applicable Tail Period in accordance with the Research Plan.
12.1.2 Non-Infringement. Tularik shall not claim at any time that
clinical development and/or commercialization (including but not limited to
making, having made, using, offering to sell, and selling) of any compound by
Roche Bioscience (or its Affiliates, licensees or sublicensees), infringes a
Tularik Background Patent Right, or any associated foreign patent, if the
invention claimed in such Tularik Background Patent Right, or any associated
foreign patent, was practiced by Roche Bioscience (or, with Tularik's written
consent, an Affiliate or Third Party) in the discovery and development of that
compound only in accordance with the license set forth in Section 12.1.1 above.
The Parties acknowledge that it is uncertain as to whether Tularik would be
legally entitled under the patent laws to make any such claim, but wish to
confirm their agreement that this provision shall apply whether or not any such
claim could legally be made.
12.2 Screening Licenses
12.2.1 Tularik Screening Library. Subject to Section 5.6, Tularik
hereby grants to Roche Bioscience a non-exclusive, royalty-bearing (in
accordance with Section 9.5) license to use the Tularik Screening Library solely
for HTS and confirmation of "hits" during the Research Term in accordance with
the Research Plan (the "Tularik Screening License").
12.2.2 Roche Bioscience Screening Library. Subject to Section 5.5,
Roche Bioscience hereby grants to Tularik a non-exclusive, royalty-bearing (in
accordance with Section 9.5) license to use those compounds in the Roche
Bioscience Screening Library to which Roche Bioscience permits Tularik access in
Roche Bioscience's sole discretion, which license is solely for HTS and
confirmation of "hits" during the Research Term in accordance with the Research
Plan (the "Roche Bioscience Screening License").
12.3 Tularik Patents. Tularik hereby grants Roche Bioscience (and its
Affiliates in accordance with Section 2.4), a sole and exclusive, worldwide,
royalty-bearing (in accordance with Section 9.5) license (with the right to
sublicense, subject to Section 2.4) under Tularik
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Patents and under Tularik's interest in any Joint Patents (and if the Product is
from the Tularik Screening Library, any other Tularik Patent Rights claiming
such Library Compound) to develop, make, have made, use, offer to sell, sell or
import Products incorporating Roche Bioscience Compounds for the treatment of
Roche Bioscience Indications during the term of this Agreement.
12.4 Roche Bioscience Patents. Roche Bioscience hereby grants Tularik a
sole and exclusive, worldwide, royalty-bearing (in accordance with Section 9.5)
license (with the right to sublicense, subject to Section 2.4, if applicable)
under Roche Bioscience Patents and under Roche Bioscience's interest in any
Joint Patents (and if the Product is from the Roche Bioscience Screening
Library, any other Roche Bioscience Patent Rights claiming such Library
Compound) to develop, make, have made, use, offer to sell, sell or import
Products incorporating Tularik Compounds for the treatment of Tularik
Indications during the term of this Agreement.
12.5 Cross-License to Research Compounds. Each Party hereby grants to the
other Party a non-exclusive, worldwide, royalty-free license, with the right to
sublicense, under any composition of matter claims in a Tularik Patent or Roche
Bioscience Patent claiming any Research Compound, to develop, make, have made,
use, offer to sell, sell or import any Research Compound Covered by such claims,
subject to the terms of Sections 5.1.2, 5.3, and 6.3.3, except to the extent
that such Research Compounds are already licensed under Section 12.3 or Section
12.4, as applicable.
12.6 [ * ] Products.
12.6.1 [ * ] Products. Except as set forth herein, neither Party may
develop, make and commercialize a [ * ] product for a Development Compound. If a
Developing Party wishes to develop, make and commercialize a [ * ] product that
the Developing Party believes necessary to [ * ], then the Developing Party
shall contact the other Party and the Parties shall negotiate an agreement
providing compensation to the other Party on terms that are commercially
reasonable in the [ * ], as mutually agreed; provided, however, that if such
[ * ] product is being sold at or below the Developing Party's fully-allocated
cost, then such rights shall be royalty-free for so long as such products are
being sold at or below the Developing Party's fully-allocated cost.
12.6.2 Other [ * ] Products. Tularik has the exclusive right to
develop, make and commercialize diagnostic products based upon the [ * ] but,
during the term of this Agreement, Roche Bioscience has the exclusive option to
acquire any or all of such rights [ * ].
12.7 Other Technologies. Subject to the provisions of this Section 12.7
and Section 7.2, Tularik shall have the exclusive right to develop, make and
commercialize therapeutic products incorporating agents that are directed
against Targets but are not [ * ]. For the first [ * ] of the Research Term,
Roche Bioscience shall have the exclusive right to enter into an agreement with
Tularik to develop [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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12.8 Covenant of Non-Use. Neither Party shall practice the Patent Rights
and/or non-patentable information and materials of the other Party other than as
expressly licensed under this Article 12.
13. Confidentiality
13.1 Nondisclosure. During the term of this Agreement and for a period of
five (5) years after termination hereof, neither Party shall disclose any
Confidential Information received from the other Party to any Third Party, or
use any such Confidential Information for any purpose other than accomplishing
the purposes of this Agreement, except as expressly authorized by this Agreement
or as required by any regulatory agency or by any governmental rule, regulation,
law or court order. Each Party may disclose such Confidential Information to its
Affiliates (except as otherwise provided in Section 2.4), employees, agents,
consultants, collaborators, and other representatives with a need to know such
Confidential Information for such authorized purposes. Each Party shall promptly
notify the other upon discovery of any unauthorized use or disclosure of such
Confidential Information. At such time as a Party is no longer licensed under
Article 12 to use certain Confidential Information, such Party shall return to
the other Party promptly upon request any tangible embodiment of such
Confidential Information provided by the other Party; provided, however, that
one copy shall be kept by the receiver Party's legal department for purposes of
interpreting this Agreement.
13.2 Exceptions. Confidential Information shall not include any
information which the receiving Party can prove by competent evidence:
13.2.1 is now, or hereafter becomes, through no act or failure to
act on the part of the receiving Party, generally known or available;
13.2.2 is known by the receiving Party at the time of receiving such
information, as evidenced by its records;
13.2.3 is hereafter furnished to the receiving Party by a Third
Party, as a matter of right and without restriction on disclosure;
13.2.4 is independently developed by the receiving Party without the
aid, application or use of Confidential Information; or
13.2.5 is the subject of a written permission to disclose provided
by the disclosing Party.
13.3 Publications. Each Party to this Agreement recognizes that the
publication of papers regarding results of the Research Collaboration, including
oral presentations and abstracts, may be beneficial to both Parties provided
such publications are subject to reasonable controls to protect Confidential
Information. In particular, it is the intent of the Parties to maintain the
confidentiality of any Confidential Information regarding results of the HTS or
other information regarding the Research Compounds included in any foreign
patent application
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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until such foreign patent application has been published. Accordingly, each
Party shall have the right to review and approve any paper proposed for
publication by the other Party regarding results of the Research Collaboration
hereunder, including oral presentations and abstracts, which utilizes data
generated from the Research Collaboration and/or includes Confidential
Information of the other Party. Before any such paper is submitted for
publication, the Party proposing publication shall deliver a complete copy to
the other Party at least [ * ] prior to submitting the paper to a publisher. The
receiving Party shall review any such paper and give its comments to the
publishing Party within [ * ] of the delivery of such paper to the receiving
Party. With respect to oral presentation materials, the Parties shall make
reasonable efforts to expedite review of such materials, and shall return such
items as soon as practicable to the disclosing Party with appropriate comments,
if any, but in no event later than [ * ] from the date of delivery to the
receiving Party. The disclosing Party shall comply with the other Party's
request to delete references to such other Party's Confidential Information in
any such paper and agrees to withhold publication of same for an additional
[ * ] in order to permit the Parties to obtain patent protection, if either of
the Parties deem it necessary, in accordance with the terms of this Agreement.
If there is a dispute regarding publications, such dispute shall be resolved by
the Research Management Committee or if the Research Management Committee has
been dissolved, by the Officers in accordance with Section 17.2.
14. Representations, Warranties and Covenants
14.1 Corporate Power. Each Party hereby represents and warrants that such
Party is duly organized and validly existing under the laws of the state of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
14.2 Due Authorization. Each Party hereby represents and warrants that
such Party is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder.
14.3 Binding Agreement. Each Party hereby represents and warrants that
this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by such Party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a Party
or by which it may be bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having authority over it.
14.4 Disclaimer of Warranties. Neither Party guarantees the safety or
usefulness of any Target, Research Compound or Product. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO
THE OTHER PARTY OF ANY NATURE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
ANY WARRANTY OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
14.5 Mutual Indemnification. Each Party hereby agrees to save, defend and
hold the other Party and its officers, directors, employees, consultants and
agents harmless from and against any and all liabilities, expenses and losses,
including reasonable legal expense and
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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attorneys' fees ("Losses") incurred as a result of Third Party suits, claims,
actions, or demands of personal injury or death resulting from the manufacture,
development, use, handling, storage, sale or other disposition of Products by
such Party, its Affiliates or sublicensees except to the extent such Losses
result from the [ * ] of the Party claiming a right of indemnification under
this Section 14.5. In the event either Party seeks indemnification under this
Section 14.5, it shall inform the other Party of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit the other Party
to assume direction and control of the defense of the claim (including the right
to settle the claim solely for monetary consideration), and shall cooperate as
requested (at the expense of the other Party) in the defense of the claim.
15. Term and Termination
15.1 Term. The term of this Agreement shall begin on the Effective Date
and terminate at (a) the end of the Research Term (or the applicable Tail
Period, if any), if no Development Compound exists at the end of the Research
Term (or the applicable Tail Period, if any), or (b) so long as there is at
least one Development Compound being developed or commercialized hereunder, at
the end of the Royalty Term for the last Development Compound in the country
with the last to expire royalty obligation, unless terminated earlier in
accordance with the provisions of Section 15.2.
15.2 Termination for Cause. Either Party may terminate this Agreement
upon [ * ] written notice upon the occurrence of any of the following:
15.2.1 Upon or after the bankruptcy, dissolution or winding up of
the other Party (other than dissolution or winding up for the purposes of
reconstruction or amalgamation); or
15.2.2 Upon or after the material breach of this Agreement by the
other Party if the breaching Party has not cured such breach within the [ * ]
following written notice of such termination by the other Party.
15.3 Effect of Expiration or Termination.
15.3.1 Expiration or termination of this Agreement shall not relieve
the Parties of any obligation accruing prior to such expiration or termination.
Except as otherwise specifically set forth in this Section 15 or elsewhere in
this Agreement, the obligations and rights of the Parties under Sections 2.3,
2.5.5 (but only the mutual indemnification provisions contained therein), 5.1.2,
5.3, 6.3.3, 6.3.4, 9.4, 9.5, 12.1.2, 12.5, 12.6, 12.7, 12.8, 14.4, 14.5, and
15.3, and Articles 10, 11,13,16, and 17, shall survive termination or expiration
of this Agreement.
15.3.2 Without limiting any remedies otherwise available to Roche
Bioscience, if Roche Bioscience terminates this Agreement for cause pursuant to
Section 15.2 (a) the license set forth in Section 12.3 shall continue for so
long as Roche Bioscience continues to pay to Tularik the milestone payments and
royalty payments as due in accordance with Sections 9.4 and 9.5; (b) if the
Agreement terminates during the Research Term, the Tail Period shall apply to
Tularik (but not Roche Bioscience) for six months following such termination;
(c) the Rights of
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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First Refusal set forth in Section 7.2 shall survive; and (d) any and all claims
and payment obligations that accrued prior to the date of such termination or
expiration shall survive such termination.
15.3.3 Without limiting any remedies otherwise available to Tularik,
if Tularik terminates this Agreement for cause pursuant to Section 15.2, (a) the
license set forth in Section 12.4 shall continue for so long as Tularik
continues to pay to Roche Bioscience the royalty payments as due in accordance
with Section 9.5; (b) if the Agreement terminates during the Research Term, the
Tail Period shall apply to Roche Bioscience (but not Tularik) for six months
following such termination; and (c) any and all claims and payment obligations
that accrued prior to the date of such termination or expiration shall survive
such termination.
16. Publicity
16.1 Publicity Review. Roche Bioscience and Tularik shall jointly discuss
and agree, based on the principles of Section 16.2, on any statement to the
public regarding the execution and the subject matter of this Agreement or any
other aspect of this Agreement, except with respect to disclosures required by
law or regulation. Within fifteen (15) days following the Effective Date, the
Parties shall issue a joint press release. Except with respect to information
disclosed in the joint press release, neither Party shall (a) disclose the
material terms of this Agreement, or (b) use the name of the other Party, in any
public statement, prospectus, annual report, or press release without the prior
written approval of the other Party, which may not be unreasonably withheld or
delayed, provided, however, that both parties shall endeavor in good faith to
give the other Party a minimum of five business days to review such press
release, prospectus, annual report, or other public statement; provided,
further, that either Party may (a) disclose the material terms of this Agreement
or (b) use the name of the other party in any public statement, prospectus,
annual report, or press release without the prior written approval of the other
Party, if such Party is advised by counsel that such disclosure is required to
comply with applicable law.
16.2 Standards. In the discussion and agreement referred to in Section
16.1, the principles observed by Roche Bioscience and Tularik will be accuracy,
the requirements for confidentiality under Section 13, [ * ], the requirements
of disclosure under any securities laws or regulations of the United States,
including those associated with public offerings, and the standards and customs
in the pharmaceutical industry for such disclosures by companies comparable to
Roche Bioscience and Tularik.
17. Dispute Resolution
17.1 Disputes. 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 and/or obligations hereunder or thereunder. 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
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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agree to follow the procedures set forth in this Section 17 if and when a
dispute arises under this Agreement between the Parties.
17.2 Dispute Resolution Procedures. If the Parties cannot resolve the
dispute within [ * ] of formal request by either Party to the other, any Party
may, by written notice to the other, have such dispute referred to their
respective officers designated below or their successors, for attempted
resolution by good faith negotiations within [ * ] after such notice is
received. Said designated officers are as follows:
For Roche Bioscience: Head of Applicable Business Unit
For Tularik: Chief Executive Officer
17.3 Arbitration. Any such dispute arising out of or relating to this
Agreement which is not resolved between the Parties or the designated officers
of the Parties pursuant to the foregoing shall be resolved by final and binding
arbitration conducted in Palo Alto, California under the then current Commercial
Arbitration Rules of the American Arbitration Association ("AAA") at the request
of either Party; provided, however, that depositions shall be permitted as
follows: each Party may take no more than three depositions with a maximum of
six hours of examination time per deposition, and each such deposition shall
take place in Palo Alto, California, unless otherwise agreed by the Parties. The
arbitration shall be conducted by one arbitrator who is knowledgeable in the
subject matter which is at issue in the dispute and who is selected by mutual
agreement of the Parties or, failing such agreement, shall be selected according
to the AAA rules. In conducting the arbitration, the arbitrator shall apply the
California Evidence Code, and shall be able to decree any and all relief of an
equitable nature, including but not limited to such relief as a temporary
restraining order, a preliminary injunction, a permanent injunction, or replevin
of property. The arbitrator shall also be able to award actual or general
damages, but shall not award any other form of damage (e.g., consequential,
punitive damages). The Parties shall [ * ] the arbitrator's fees and expenses
pending the resolution of the arbitration unless the arbitrator, pursuant to its
right but not its obligations, requires the non-prevailing Party to [ * ] the
costs of the prevailing Party. The decision of the arbitrator shall be final and
may be sued on or enforced by the Party in whose favor it runs in any court of
competent jurisdiction at the option of such Party. This Agreement shall be
governed by the laws of the State of California, as such laws are applied to
contracts entered into and to be performed within such state.
18. Assignment and Delegation
18.1 Third Parties. Neither Party may assign or delegate any or all of
its rights or obligations under this Agreement to any Third Party without the
prior written permission of the other Party, except pursuant to Section 18.3.
18.2 Affiliates. Neither Party may assign or delegate any or all of its
rights or obligations under Sections 12.1 and 12.2, or Articles 2, 3, 4, 5
(except for Section 5.1.2), 6, and 13 without the prior written consent of the
other Party which may not be unreasonably withheld
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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or delayed. Except as set forth in the previous sentence, either Party may
assign or delegate any or all of its rights or obligations under this Agreement
to any Affiliate; [ * ].
18.3 Merger. Either Party may also assign all of its rights or
obligations under this Agreement (but not a portion thereof) in connection with
the sale of all or substantially all of its assets relating to the subject
matter hereof, or may otherwise assign all of its rights or obligations under
this Agreement (but not a portion thereof) with the prior written consent of the
other Party. This Agreement shall survive any merger of either Party with or
into another Party and no consent for a merger or similar reorganization shall
be required hereunder; provided, that in the event of such merger or in the
event of a sale of all assets, no intellectual property rights of the acquiring
corporation shall be included in the technology licensed hereunder.
18.4 Miscellaneous. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the Parties; provided,
however, that any such permitted assignment or delegation shall not relieve the
assigning Party of its responsibilities for performance of its obligations under
this Agreement. Any assignment not in accordance with this Agreement shall be
void.
19. Additional Terms
19.1 Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar 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.
19.2 Notices. Any notices or communications provided for in this
Agreement to be made by either of the Parties to the other shall be in writing,
in English, and shall be made by prepaid air mail with return receipt addressed
to the other at its address set forth below. Any such notice or communication
may also be given by hand, or facsimile to the appropriate designation. Either
Party may by like notice specify an address to which notices and communications
shall thereafter be sent. Notices sent by mail, facsimile or cable shall be
effective upon receipt and notices given by hand shall be effective when
delivered.
If to Tularik:
Tularik Inc.
Two Corporate Drive
South San Francisco, CA 94080
Fax: (415) 829-4303
Attention: President
If to Roche Bioscience
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
30
<PAGE>
Roche Bioscience
3401 Hillview Avenue
Palo Alto, CA 94304
Fax: (415) 852-2595
Attention: President
with a copy to
Roche Bioscience
3401 Hillview Avenue
Palo Alto, CA 94304
Fax: (415) 852-1338
Attention: Legal Affairs
19.3 Waiver. 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.
19.4 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 (a) 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 (b) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order 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.
19.5 Independent Contractors. It is expressly agreed that Tularik and
Roche Bioscience shall be independent contractors and that the relationship
between the two Parties shall not constitute a partnership or agency of any
kind. Neither Tularik nor Roche Bioscience shall have the authority to make any
statements, representations or commitments of any kind, or to take any action,
which shall be binding on the other, without the prior written authorization of
such other Party to do so.
19.6 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.
19.7 Entire Agreement. This Agreement sets forth all of the covenants,
promises, agreements, warranties, representations, conditions and understandings
between the Parties hereto and supersedes and terminates all prior agreements
and understanding between the Parties, including the Confidentiality Agreement
dated December 18, 1996. Information disclosed under
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
31
<PAGE>
the Confidentiality Agreement shall be treated as "Confidential Information" of
the disclosing Party subject to this 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 and
therein. 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.
In Witness Whereof, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.
Syntex (U.S.A.) Inc., Tularik Inc.
through its Roche Bioscience division
By: /s/ James N. Woody By: /s/ David V. Goeddel
------------------------- -----------------------------
James N. Woody, M.D., Ph.D. David V. Goeddel, Ph.D.
President President and Chief Executive Officer
Syntex (U.S.A.) Inc. Tularik Inc.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
32
<PAGE>
Schedule A
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Schedule B
TULARIK BACKGROUND PATENT RIGHTS AND EXISTING THIRD PARTY
AGREEMENTS
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Research Collaboration and License Agreement
between
Roche Bioscience
and
Tularik Inc.
July 8, 1997
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
<TABLE>
<CAPTION>
Page
----
TABLE OF CONTENTS
<S> <C>
1. Definitions.............................................. 1
2. Research Collaboration................................... 7
2.1 Scope of Research Collaboration.......................... 7
2.2 New Targets.............................................. 8
2.3 [ * ].................................................... 8
2.4 [ * ].................................................... 8
2.5 Exclusivity/Third Party Agreements....................... 9
2.5.1 Exclusivity.............................................. 9
2.5.2 Activities Relating to the Field......................... 9
2.5.3 Joint Decision-Making Process............................ 9
2.5.4 Re-Presentation to Officers.............................. 10
2.5.5 Outside Activities....................................... 10
3. Research Management Committee............................ 10
3.1 Formation of Research Management Committee............... 10
3.2 Meetings of Research Management Committee................ 11
3.3 Decision-Making Process.................................. 11
4. Conduct of Research...................................... 11
4.1 Research Plan............................................ 11
4.2 Tularik Responsibilities................................. 11
4.3 Roche Bioscience Responsibilities........................ 12
4.4 Research Efforts......................................... 12
4.5 Abandonment.............................................. 12
4.6 Availability of Resources................................ 13
4.7 Reports.................................................. 13
5. Compounds and Compound Libraries......................... 13
5.1 Research Compound Library................................ 13
5.1.1 During the Research Term................................. 13
5.1.2 During and After the Research Term....................... 13
5.2 Designation of Development Compounds..................... 14
</TABLE>
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
5.3 [ * ].................................................... 14
5.4 Additional Indication(s)................................. 14
5.5 Roche Bioscience Screening Library....................... 15
5.6 Tularik Screening Library................................ 15
6. Research Term............................................ 15
6.1 Research Term............................................ 15
6.2 Early Termination of Research Term....................... 15
6.2.1 Third Anniversary........................................ 15
6.2.2 [ * ].................................................... 15
6.3 Impact of Expiration or Termination...................... 16
6.3.1 Survival................................................. 16
6.3.2 Tail Period.............................................. 16
6.3.3 Post Research Term/Tail Period Notifications............. 16
6.3.4 Status Reports........................................... 16
7. First Right of Negotiation and Right of First Refusal.... 17
7.1 First Right of Negotiation............................... 17
7.1.1 [ * ].................................................... 17
7.1.2 [ * ].................................................... 17
7.2 Right of First Refusal................................... 17
7.2.1 [ * ].................................................... 18
7.2.2 [ * ].................................................... 18
7.2.3 [ * ].................................................... 18
8. Reversion Rights......................................... 18
8.1 Diligence................................................ 18
8.2 Pre-IND.................................................. 18
8.3 Post-IND/Pre-NDA......................................... 19
8.4 Failure to [ * ]......................................... 19
9. Payments................................................. 19
9.1 Technology Access Fee.................................... 19
9.2 Research Funding......................................... 19
9.3 Development Costs........................................ 20
</TABLE>
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Page
----
9.4 Milestones............................................... 20
9.4.1 Milestones Payments...................................... 20
9.4.2 Additional Clinical Milestones........................... 21
9.4.3 No Milestone Payments by Tularik......................... 21
9.5 Royalties................................................ 21
9.5.1 Reciprocal Royalties..................................... 21
9.5.2 Royalty Reduction........................................ 22
9.5.3 Further Reduction in Minimum Royalties................... 22
9.5.4 [ * ].................................................... 22
9.5.5 No Patent Protection..................................... 22
9.6 Third Party Agreements................................... 23
10. Records; Audits; and Reports............................. 23
10.1 Records.................................................. 23
10.2 Audit.................................................... 23
10.2.1 Independent Audit by Developing Party's Auditors......... 23
10.2.2 Independent Audit by Royalty Receiving Party's Auditors.. 23
10.3 Payment; Reports......................................... 24
10.4 Exchange Rate............................................ 24
10.4.1 [ * ].................................................... 24
10.4.2 Tularik Exchange Rate.................................... 24
10.5 Manner and Place of Payment.............................. 24
10.6 Late Payments............................................ 24
10.7 Taxes.................................................... 24
11. Patent Rights and Infringement........................... 25
11.1 Ownership and Inventorship............................... 25
11.2 Disclosure............................................... 25
11.3 Patent Management........................................ 25
11.3.1 Filing Party............................................. 25
11.3.2 Review Procedures........................................ 26
11.4 Reversion................................................ 26
11.5 Patent Costs............................................. 26
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
iii
<PAGE>
Page
----
11.6 Non-Patentable Technology................................ 26
11.7 Foreign Patent Filings................................... 27
11.8 Cooperation of the Parties............................... 27
11.9 Infringement by Third Parties............................ 27
11.10 Third Party Patent Rights................................ 27
12. Licenses and Other Commercial Rights..................... 28
12.1 Tularik Background Patent Rights......................... 28
12.1.1 Research License......................................... 28
12.1.2 Non-Infringement......................................... 28
12.2 Screening Licenses....................................... 28
12.2.1 Tularik Screening Library................................ 28
12.2.2 Roche Bioscience Screening Library....................... 28
12.3 Tularik Patents.......................................... 28
12.4 Roche Bioscience Patents................................. 29
12.5 Cross-License to Research Compounds...................... 29
12.6 [ * ] Products........................................... 29
12.6.1 [ * ] Products........................................... 29
12.6.2 Other [ * ] Products..................................... 29
12.7 Other Technologies....................................... 29
12.8 Covenant of Non-Use...................................... 30
13. Confidentiality.......................................... 30
13.1 Nondisclosure............................................ 30
13.2 Exceptions............................................... 30
13.3 Publications............................................. 31
14. Representations, Warranties and Covenants................ 31
14.1 Corporate Power.......................................... 31
14.2 Due Authorization........................................ 31
14.3 Binding Agreement........................................ 31
14.4 Disclaimer of Warranties................................. 31
14.5 Mutual Indemnification................................... 32
15. Term and Termination..................................... 32
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
iv
<PAGE>
Page
----
15.1 Term..................................................... 32
15.2 Termination for Cause.................................... 32
15.3 Effect of Expiration or Termination...................... 32
16. Publicity................................................ 33
16.1 Publicity Review......................................... 33
16.2 Standards................................................ 33
17. Dispute Resolution....................................... 34
17.1 Disputes................................................. 34
17.2 Dispute Resolution Procedures............................ 34
17.3 Arbitration.............................................. 34
18. Assignment and Delegation................................ 35
18.1 Third Parties............................................ 35
18.2 Affiliates............................................... 35
18.3 Merger................................................... 35
18.4 Miscellaneous............................................ 35
19. Additional Terms......................................... 35
19.1 Force Majeure............................................ 35
19.2 Notices.................................................. 35
19.3 Waiver................................................... 36
19.4 Severability............................................. 36
19.5 Independent Contractors.................................. 37
19.6 Counterparts............................................. 37
19.7 Entire Agreement......................................... 37
Schedule A....................................................... 39
Schedule B....................................................... 40
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
v
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.10
RESEARCH AGREEMENT
Research Agreement between Cold Spring Harbor Laboratory, hereinafter
referred to as "CSHL," and Tularik Inc., hereinafter referred to as "Sponsor".
This Agreement is entered into as of October 3, 1997 and will be effective upon
the consummation of the merger between Tularik Acquisition Corp., a wholly-owned
subsidiary of the Company, and Amplicon Corp. ("Effective Date").
WHEREAS, the research program contemplated by this Agreement is of mutual
interest and benefit to CSHL and to Sponsor, and will further the instructional
and research objectives of CSHL in a manner consistent with its status as a non-
profit, tax-exempt, research institution.
WHEREAS, CSHL and Sponsor entered into an agreement executed on even date
herewith entitled License Agreement (hereinafter "License Agreement").
NOW, THEREFORE, the parties hereto agree as follows:
1. STATEMENT OF WORK. CSHL agrees to use its reasonable best efforts to
perform the "Research Program" described in Appendix A attached hereto and
incorporated herein. Work will be performed in accordance with the Research
Program Budget in Appendix B and any changes thereto will be subject to the
mutual consent of parties to this agreement. The Research Program and Research
Program Budgets will be reviewed and amended from time to time by mutual written
agreement of the parties to provide for [ * ].
<PAGE>
2. CONDUCT OF THE RESEARCH.
A. Principal Investigator - The Research Program will be supervised by
Dr. Michael Wigler of CSHL, as Principal Investigator. If, for any reason, he is
unable or unwilling to continue to serve as Principal Investigator, CSHL and
Sponsor shall use their reasonable best efforts to locate a suitable successor
as Principal Investigator to continue the Research Program, or select
alternative research work. If the parties cannot mutually agree on a successor
or alternative research work, and if Sponsor elects not to terminate the License
Agreement as provided in Section VII.B(3) of the License Agreement, then future
funding provided for under Section 4.A hereof shall be reduced by [ * ]
commencing on the date Dr. Wigler becomes unable or unwilling to serve as
Principal Investigator, and Sponsor shall continue to pay to CSHL such reduced
amount as [ * ]. The schedule of reduced funding payments shall continue to be
in accordance with Section 5 hereof. The scientific contact to the Research
Program from the Company will be Dr. R. Scott Powers.
B. Other Researchers - The Principal Investigator shall only assign
personnel to the Research Program who are obliged to CSHL to assign all
inventions they may make under the Research Program to CSHL. If the Principal
Investigator wishes to involve any other persons or to collaborate with
individuals at other institutions on work under the Research Program, he shall
first consult with Sponsor and shall, for a period of [ * ] following the date
of such consultation, consider Sponsor's suggestions and comments. Following
such consultation, if Sponsor shall reasonably believe that the involvement of
other persons or collaborators will jeopardize the intellectual property rights
of Sponsor pursuant to Section 9 hereof, Sponsor shall have the right to appeal
such involvement to the Director of CSHL, currently Bruce Stillman.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
C. Non-Competition - CSHL agrees that it will not, without Sponsor's
prior written consent, permit any for-profit third party to acquire rights to or
an interest in the work of Principal Investigator's group at CSHL that is
involved with developing and applying [ * ] using the methods claimed in U.S.
Patent Numbers [ * ] (such methods being known as [ * ], unless Sponsor has
already elected not to acquire exclusive rights to the results of such work as
provided under Section 9 of this Agreement. This obligation shall expire [ * ]
years from the Effective Date.
D. Information Exchange - The Principal Investigator shall keep Sponsor
informed as to the progress of the Research Program and will meet Sponsor on a
regular basis and as reasonably requested by Sponsor to discuss inventions that
have occurred thereunder. Sponsor shall have the right to access and use, for
its own purposes, the data and information developed under the Research Program.
Sponsor shall have the right to receive samples of materials developed under the
Research Program for commercial use, without additional compensation, pursuant
to a separate Materials Transfer Agreement. Sponsor will, however, respect the
academic tradition of the Principal Investigator's right to first publish and
disseminate the results of the Research Program to third parties, in accordance
with Section 8.
3. PERIOD OF PERFORMANCE. The term of this Agreement shall commence on the
Effective Date and continue until the expiration of the last Licensed Patent (as
that term is defined in the License Agreement) or until it is terminated early
in accordance with Section 7 (the "Research Term").
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
4. FUNDING.
A. Research Program - To fund the Research Program, and subject to
Section 2 of this Agreement, Sponsor shall pay to CSHL in accordance with the
payment schedule in Section 5, [ * ] per year during the Research Term, adjusted
in accordance with Section 6 of this Agreement.
B. The [ * ] at CSHL - On January 1, 1998, Sponsor shall pay to CSHL
[ * ] as CSHL financial support for two (2) post doctoral researchers at CSHL
for the year ending December 31, 1998. Commencing on January 1, 1999 and
continuing each January 1 until and including January 1, 2001, Sponsor shall
increase the annual payment to CSHL by the amount of [ * ] per year to provide
support for an additional post doctoral researcher, so that by January 1, 2001
Sponsor's payments shall amount to [ * ] as annual support for five (5) post
doctoral researchers. Such maximum payments shall continue until the end of the
Research Term. The post doctoral research program shall be named the "Tularik
Fellows Program at Cold Spring Harbor Laboratory."
5. SCHEDULE OF RESEARCH PAYMENTS. Payments under Section 4.A shall be payable
by Sponsor in advance in U.S. dollars, net of taxes, in quarterly installments
as follows. The first payment under Section 4.A.is due on the Effective Date
and shall be pro-rated to cover the period from the Effective Date to December
1, 1997. Thereafter, quarterly payments in the amount of [ * ] each are to be
made on or before the first day of [ * ] during the Research Term. The last
payment shall be pro-rated to cover the period from the first day of the last
calendar quarter of the Research Program to the end of the Research Term. If a
full quarterly payment is made but the Research Program is then terminated in
the middle of a quarter, CSHL shall refund a portion of such payment pro-rated
to cover the remainder of the quarter after the Research Term ends.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
A final financial accounting of all costs incurred in the Research Program
and all funds received by CSHL hereunder shall be submitted to Sponsor [ * ] of
each year of the Research Program and following the completion of the project.
6. ADJUSTMENT FOR INFLATION. The base annual funding amount set forth in
Section 4.A. of this Agreement [ * ] shall be prospectively adjusted annually
commencing [ * ] to provide for future inflation by multiplying the base annual
funding amount by the percentage increase in the cost of living index published
by the United States Department of Labor Bureau of Labor Statistics (BLS) Annual
Average Producer Price Index (Finished Goods) for the New York Metropolitan Area
[Base Index, 1982 = 100] for the preceding calendar year of the Research
Agreement for which the adjusted payment is being made. If at any time the
Bureau of Labor Statistics (BLS) of the United States Department of Labor should
cease to publish the Producer Price Index, another annual average index
generally recognized as an authoritative indicator of changes in the United
States of equivalent costs (preferably an index published by the United States
Government) shall be used.
7. TERMINATION.
A. Termination for Default - This Agreement may be terminated for
default. In the event of default by a party ("Defaulting Party"), the other
party ("Non-Defaulting Party") shall give the Defaulting Party written notice of
the default and its election to terminate this Agreement at the expiration of a
probation period of [ * ] from the date of the notice. If the Defaulting Party
fails to resolve the default in the probation period by (i) curing the default,
(ii) providing a written explanation satisfactory to the Non-Defaulting Party
that a default has not occurred or (iii) entering into a written agreement with
the Non-Defaulting Party for the cure or
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
other resolution of the default, then the Non-Defaulting Party may terminate
this Agreement by giving written notice to the Defaulting Party. The termination
will be effective upon the date specified in the notice. The termination rights
under this Section 7.A shall be in addition to and not in substitution for any
other remedies that may be available to the Non-Defaulting Party. Termination
pursuant to this section shall not relieve the Defaulting Party from liability
and damages to the Non-Defaulting Party for default. Waiver by either party of a
single default or a succession of defaults shall not deprive such party of any
right to terminate this Agreement arising by reason of any subsequent default.
B. Termination of the License Agreement. [ * ], this Agreement may be
terminated by Sponsor without penalty in the event [ * ]. In such event,
termination of this Agreement shall be effective on the date [ * ].
C. Effect of Termination. Termination of this Agreement by Sponsor for
default by CSHL pursuant to Section 7.A shall not affect the License Agreement.
Any agreement between the parties entered into pursuant to Section 9 of this
Agreement shall not be affected by expiration or termination of this Agreement.
Sections 9 and 10 shall survive expiration or termination of this Agreement for
the periods of time set forth in such sections.
8. PUBLICATIONS. CSHL, a not-for-profit basic research institution, will be
free to publish or present the results of research under this Agreement in
accordance with this Section 8. A copy of each proposed publication or
presentation will be provided to Sponsor at least [ * ] prior to the planned
disclosure for publication. Sponsor shall notify CSHL within [ * ] of receipt of
such materials whether it desires CSHL to file patent applications on any
invention contained in the materials; and, if CSHL agrees, CSHL will promptly
proceed to file a patent application(s)
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
and CSHL and the Principal Investigator will delay publication and any other
disclosure if necessary for up to [ * ] to ensure that such filings are made
before publication or other disclosure. CSHL and the Principal Investigator
shall otherwise have final authority to determine the scope and content of any
publication, but CSHL and the Principal Investigator will consider in good faith
suggestions offered by Sponsor. Within [ * ] of being requested to do so by
Sponsor and before publication, CSHL will notify Sponsor if CSHL declines to
file a patent application under this paragraph. Sponsor will then have the right
to file patent applications in CSHL's name in accordance with Section 9.A.(5) of
this Agreement.
9. INTELLECTUAL PROPERTY.
A. From The Research Program -
(1) CSHL will disclose to Sponsor (i) all inventions made in the
performance of the research program between Amplicon Corp. and CSHL pursuant to
the Research Agreement dated June 1, 1994 and the Research Program
("Inventions"), and (ii) all [ * ], provided that the Principal Investigator, or
person(s) working under his supervision, is an inventor, and such inventions
and/or improvements are disclosed to CSHL by the inventor(s) pursuant to an
invention assignment agreement between CSHL and the inventor(s). For purposes of
this Agreement, "improvements" means any modification of [ * ], provided such
modification, if unlicensed, would infringe one or more claims of the [ * ]
patent without regard to whether such modification actually infringes such claim
or claims. Title to any Invention shall remain with CSHL if made solely by the
Principal Investigator or CSHL researchers working under his supervision.
Subject to Sections 9.A(2), (3) and (5), CSHL shall have the sole right to
determine the disposition of any such Invention or other rights resulting
therefrom, including the right to determine whether or not a patent application
will be filed, and shall so notify Sponsor. Any Inventions made jointly by CSHL
and Sponsor in the performance of the Research Program shall
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
be owned jointly by CSHL and Sponsor. Any Inventions made solely by Sponsor in
the performance of the Research Program shall be owned solely by Sponsor.
Inventorship shall be determined under U.S. patent laws. Sponsor shall notify
CSHL of all Inventions made solely or jointly by Sponsor and provide CSHL with a
copy of any patent application claiming such an Invention prior to filing such
patent application.
(2) In the event that a patent application on an Invention is filed
by CSHL, or by Sponsor pursuant to Section 9.A(5) below, Sponsor shall be
entitled to elect one of the following Alternatives by notice in writing to CSHL
within [ * ] after written notification to Sponsor that a patent application has
been filed:
(i) Alternative 1 - A non-exclusive, non-transferable (without
the right to sub-license), [ * ] license to Sponsor for [ * ]; or
(ii) Alternative 2 - A non-exclusive, non-transferable (without
the right to sub-license), [ * ] license to Sponsor in the United States and/or
any foreign country elected by Sponsor (subject to Section 9.A(4) below) to
make, have made, use, offer for sale, sell and import products embodying or
produced through the use of such Invention; provided that Sponsor agrees to (a)
demonstrate reasonable efforts to commercialize the technology in the public
interest; (b) [ * ]; and (c) substantially manufacture in the United States
products to be sold in the United States unless CSHL, in its sole discretion,
deems there is justification for waiving such requirement; or
(iii) Alternative 3 - A royalty-bearing (as set forth below),
exclusive license (subject to the third party rights of United States Government
Grantee Agencies) to Sponsor, including the exclusive right to sublicense, in
the United States and/or any foreign country elected by Sponsor (subject to
Section
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
9.A(4) below) to diligently make, have made, use, offer for sale, sell and
import such Invention, or Primary or Secondary Products (as hereinafter defined)
embodying or produced through the use of such Invention, provided that Sponsor
agrees to reimburse CSHL for the costs of patent prosecution and maintenance in
the U.S. and any elected foreign country, and further agrees that any licensed
products sold in the United States shall be substantially manufactured in the
United States. For the purposes of this Agreement, Primary and Secondary
Products are defined as follows: (1) Primary Products means [ * ], and (2)
Secondary Products means [ * ]. Royalties shall be paid on Primary and Secondary
Products embodying or produced through the use of such Invention(s) in
accordance with the following schedule: (A) until the expiration of the
patent(s) utilized for such Invention, the royalty rates due CSHL on Primary
Products shall be [ * ] of the Net Sales (as defined in the License Agreement)
of Primary Products sold by Sponsor or its sublicensee and the royalty rate on
Secondary Products shall be [ * ] of the Net Sales of Secondary Products sold by
Sponsor or its sublicensee; (B) upon the expiration of the last of the patents
utilized for such Invention, the royalty rates due CSHL by Sponsor or its
sublicensee on Net Sales of such Primary and Secondary Products shall [ * ] for
Primary Products and [ * ] on Secondary Products, provided that a [ * ]. Payment
of such reduced royalties to CSHL shall continue until the last to expire of
Sponsor's patents, if any, on such Primary and/or Secondary Products, but in no
event shall full-rate and reduced royalties be paid for more than fifteen (15)
years from the first commercial sale of any Primary or Secondary Product. In the
event that a Primary and/or Secondary Product is licensed to Sponsor by CSHL,
this Alternative is subject to the negotiation of commercially reasonable terms
(other than financial terms, which shall be as set forth above).
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
In the event that the Invention is not a Primary or Secondary Product (it
being understood that [ * ] shall not be considered a Primary or Secondary
Product), this Alternative is subject to the negotiation of reasonable terms and
conditions, including financial terms as follows. If the parties are unable to
agree on such terms within [ * ] of the date this Alternative is elected by
Sponsor, either party may submit the terms in dispute to an arbitrator under
Section 15. In negotiating the financial terms under this Alternative in the
event that the Invention is not a Primary or Secondary Product, Sponsor and CSHL
will give weight to prevailing industry standards with respect to compensation
paid for similar exclusive licenses and also considering such factors as market
potential, profit potential, additional research and development costs, economic
value added (in the case of products derived from other products or technologies
provided by Sponsor) and the value and extent of the contribution by each party,
including the funding of the Research Program. It is contemplated by the parties
that the compensation payable by Sponsor under this Alternative in the event
that the Invention is not a Primary or Secondary Product will be less than the
compensation for which a similar license is available or granted to any third
party which did not [ * ] and in which CSHL does not [ * ].
Should marketing of a Primary or Secondary Product require the payment of a
royalty to Sponsor under a license granted pursuant to Section III.A. of the
License Agreement, then the royalty payments due under this Section 9 for the
same Primary or Secondary Product will be reduced by the amount of the royalty
due under the License Agreement or by one half, whichever such reduction is
less.
This alternative is also subject to the right of CSHL to use all Inventions
in its non-commercial research and education activities.
(iv) Alternative 4 - The sharing with Sponsor of any Sublicense
Revenue, as defined in the License Agreement [ * ], received by CSHL in respect
of rights to such Invention, in an amount equal to [ * ] of such Sublicense
Revenue; provided, however, that Sponsor waives all rights to such Inventions,
patent applications and any resulting patents.
(3) In the event that Sponsor has not elected any of the foregoing
alternatives within [ * ] after notification that a patent application has been
filed, Sponsor shall [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
(4) If Sponsor elects Alternative "2" or "3", Sponsor shall notify
CSHL of those foreign countries in which its desires a license, in sufficient
time for CSHL to satisfy the patent law requirements of that country. Sponsor
shall reimburse CSHL for the out-of-pocket costs, including patent filing,
prosecution and maintenance fees related to those foreign filings.
(5) In the event that CSHL declines to file a patent application,
Sponsor may [ * ] file such patent application in the United States and/or
elsewhere, in the name of CSHL, and shall be entitled to elect from among the
above Alternatives no later than [ * ] after such filing date. In this case,
(i) [ * ], (ii) to the extent that a patent application is made for laboratory
methods (i.e., not products or manufacturing processes), CSHL reserves the right
to grant non-exclusive licenses to such patent rights to non-profit academic
institutions to use such laboratory methods for non-commercial use only and
(iii) to allow Sponsor to file a patent application, the Principal Investigator
will delay publication or other public disclosure of the Invention on which
Sponsor is filing such Application, for up to a period of time consistent with
Section 8 of this Agreement.
(6) Sponsor shall retain all Invention disclosures submitted by CSHL
in confidence and use its best efforts to prevent their disclosure to third
parties except as may be required by law. Sponsor shall be relieved of this
obligation only when this information becomes publicly available through no
fault of Sponsor, or when Sponsor exclusively licenses patent rights covering
such Invention.
(7) Title to and the right to determine the disposition of any
copyrights or copyrightable material first produced or composed in the
performance of this research shall remain with CSHL. CSHL hereby grants to
Sponsor an irrevocable, royalty-free, non-transferable, non-exclusive right and
license to use, reproduce, display, distribute and perform all
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11.
<PAGE>
such copyrightable materials other than computer software and its documentation.
CSHL hereby grants to Sponsor an irrevocable, royalty-free, non-transferable,
non-exclusive right and license to use, reproduce, display and perform computer
software and its documentation specified to be developed and delivered under the
Research Program for Sponsor's internal purposes. Sponsor is entitled to elect
to negotiate a royalty bearing license (subject to prior third party rights, if
any) to use, reproduce, display, distribute, and perform such computer software
and its documentation for commercial purposes. Computer software for which a
patent application is filed shall be subject to Section 9.A(2), above.
(8) All licenses elected by Sponsor pursuant to this clause become
effective as of the date the parties sign a subsequent license agreement.
(9) This Agreement and the licenses and Alternatives under Section 9
are subject to the regulations and guidelines of Federal Grant Agencies which
contributed to the Research Program. In order to ensure that Sponsor is able to
obtain rights as provided in this Section 9.A, CSHL agrees that no funding from
any third party other than a Federal Grant Agency will be used in the Research
Program if acceptance of such funding would give such third party any rights or
interest in the work under the Research Program, unless the parties mutually
agree otherwise in writing before any such funding is used. CSHL further agrees
that it has not and will not enter into any other agreement or arrangement which
grants any third party any interest in any Inventions arising out of the
Research Program.
B. From the Tularik Fellows Program at CSHL - CSHL will provide to
----------------------------------------
Sponsor copies of any publications or presentations to be made by the post
doctoral researchers supported by Sponsor under Section 4.B of this Agreement,
prior to the submission of such papers for
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
12.
<PAGE>
publication or the date of the presentation. CSHL will provide to Sponsor an
annual report describing the work performed and results obtained by the post
doctoral researchers supported by Sponsor under Section 4.B of this Agreement.
Such annual reports shall be provided to Sponsor no later than sixty (60) days
after the end of each funding year.
To the extent that inventions made by any Tularik Fellow are not already
subject to prior rights of any for-profit third party, CSHL grants to Sponsor a
[ * ]. CSHL will disclose such inventions to Sponsor at the time a patent
application is filed and Sponsor will have a sixty (60) day period in which to
evaluate whether Sponsor wishes to license any such inventions.
Sponsor agrees to maintain as Confidential Information, in accordance with
Section 10 of this Agreement, any and all such papers, annual reports and
invention disclosures.
C. Survival - The terms of this Section 9 shall survive any
expiration or termination of this Agreement to allow Sponsor to exercise its
rights with respect to Inventions made under the Research Program or inventions
made by Tularik Fellows prior to the date this Agreement expires or is
terminated.
10. CONFIDENTIALITY. The parties agree that during the term of this Agreement
and any subsequent extension of this Agreement and for a period of five (5)
years after it terminates, a party receiving information from the other party
designated as "confidential" in writing ("Confidential Information") will not
disclose such Confidential Information to any third party or use such
Confidential Information except as provided in this Agreement without prior
written consent. A party shall have no obligations with respect to any portion
of such Confidential Information which:
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13.
<PAGE>
(1) is publicly disclosed through no fault of any party hereto, either
before or after it becomes known to the receiving party; or
(2) was known to the receiving party prior to the date of this
Agreement, which knowledge was acquired independently and not from the other
party; or
(3) is subsequently disclosed to the receiving party in good faith by
a third party who has a right to make such a disclosure; or
(4) has been published by a third party as a matter of right; or
(5) is subsequently independently invented or discovered other than
pursuant to the Research Program by the receiving party without reference to the
other party's Confidential Information.
11. USE OF NAMES. Neither party will use the name of the other in any
advertising or other form of publicity without the written permission of the
other, in the case of CSHL, that of the Administrative Director, except as
required by law. Sponsor may refer to the terms of this Agreement in a bona
fide relationship or prospective relationship with financiers or investors.
12. NOTICES. Any notices required to be given or which shall be given under
this Agreement shall be in writing delivered by first class mail (air mail if
not domestic), express mail, or via facsimile (receipt confirmed) addressed to
the parties as follows:
COLD SPRING HARBOR LABORATORY TULARIK INC.
P.O. Box 100 Two Corporate Drive
One Bungtown Road South San Francisco, CA 94080
Cold Spring Harbor, New York 11724 Attn: Chief Executive Officer
Attn: Assistant Administrative Director
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
14.
<PAGE>
In the event notices, statements and payments required under this Agreement
are sent by certified or registered mail by one party to the other party at its
above address, they shall be deemed to have been given or made as of the date so
mailed, otherwise as of the date received.
13. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and the successors to substantially the entire business
and assets of the respective parties hereto. This Agreement shall not be
assignable by either party without the prior written consent of the other party,
except in connection with a merger or sale or other transfer of substantially
the entire business and assets of the party.
14. GOVERNING LAW. The validity and interpretation of this Agreement and the
legal relations of the parties to shall be governed by the laws of the State of
New York and the United States.
15. ARBITRATION. Any dispute or controversy arising out of or relating to this
Research Agreement, its construction or it actual or alleged breach, including a
dispute over [ * ], shall finally be decided by arbitration in the City and
State of New York by and in accordance with the Licensing Agreement Arbitration
Rules of the American Arbitration Association. Judgment upon the award rendered
may be entered in any high court or forum, state or federal, having
jurisdiction; provided, however, that the provisions of this Section shall not
apply to decisions on the validity of patent claims or to any dispute or
controversy as to which any treaty or law prohibits such arbitration.
16. GOVERNING LANGUAGE. In the event that a translation of this Agreement is
prepared and signed by the parties for the convenience of Sponsor, this English
language version shall be the official version and shall govern if there is a
conflict between the two.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15.
<PAGE>
17. INDEMNIFICATION.
A. Sponsor hereby indemnifies and holds CSHL harmless from and against all
damages and cost from third party claims, causes of action or suits arising out
of or resulting from the claimed negligence of Sponsor in respect of (i)
Sponsor's activities under this Agreement or (ii) the manufacture, sale, offer
for sale, use and importation of products or services resulting from or licensed
or sub-licensed under this Agreement provided that CSHL shall promptly notify
Sponsor in writing of any suit or action for which such indemnity is sought,
shall permit Sponsor to control the defense thereof and shall cooperate in the
defense thereof as reasonably requested by Sponsor at Sponsor's expense.
B. CSHL hereby indemnifies and holds Sponsor harmless from and against all
damages and cost from third party claims, causes of action or suits arising out
of or resulting from the claimed negligence of CSHL in respect of CSHL's
activities under this Agreement provided that Sponsor shall promptly notify CSHL
in writing of any suit or action for which such indemnity is sought, shall
permit CSHL to control the defense thereof and shall cooperate in the defense
thereof as reasonably requested by CSHL at CSHL's expense.
C. Sponsor agrees to maintain liability insurance, including product
liability insurance, naming CSHL as an additional insured, in an amount
customary in the industry. Sponsor agrees to provide CSHL with evidence of such
insurance at CSHL's request.
18. EXPORT CONTROLS. It is understood that CSHL is subject to United States
laws and regulations controlling the export of technical data, computer
software, laboratory prototypes and other commodities, and that its obligations
hereunder are contingent on compliance with applicable U.S. export laws and
regulations (including the Arms Export Control Act, as
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
16.
<PAGE>
amended, and the Export Administration Act of 1979). The transfer of certain
technical data and commodities may require a license from an agency of the
United States Government and/or written assurances by Sponsor that Sponsor will
not re-export data or commodities to certain, foreign counties without prior
approval of the cognizant government agency. While CSHL agrees to cooperate in
securing any license which the cognizant agency deems necessary in connection
with this Agreement, CSHL cannot guarantee that such licenses will be granted.
19. FORCE MAJEURE. CSHL shall not be responsible to Sponsor for failure to
perform any of the obligations imposed by this Agreement, provided such failure
shall be occasioned by fire, flood, explosion, lightning, windstorm, earthquake,
subsidence of soil, failure or destruction, in whole or in part, of machinery or
equipment or failure of supply of materials, discontinuity in the supply of
power, governmental interference, civil commotion, riot, war, strikes, labor
disturbance, transportation difficulties, labor shortage or any cause beyond the
reasonable control of CSHL.
20. ENTIRE AGREEMENT. Unless otherwise specified, this Agreement and the
License Agreement embody the entire understanding between CSHL and Sponsor for
this Research Program, and any prior or contemporaneous representations, either
oral or written are hereby superseded. No amendments or changes to this
Agreement, including without limitation, changes in the statement of work, total
estimated cost and period of performance, shall be effective unless made in
writing and signed by authorized representatives of the parties.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
17.
<PAGE>
COLD SPRING HARBOR TULARIK INC.
LABORATORY
/s/ John Maroney /s/ David V. Goeddel
- - ---------------------------------- ---------------------------------
Signature Signature
John Maroney David V. Goeddel
Assistant Administrative Director President & CEO
- - --------------------------------- ---------------------------------
Typed Name/Title Typed Name/Title
Dated: 10/3/97 Dated: 10/3/97
--------------------------- -------------------------
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
18.
<PAGE>
Appendix A
THE RESEARCH PROGRAM
Dr. Michael Wigler's laboratory at Cold Spring Harbor Laboratory ("CSHL") will,
as part of the Research Program, undertake the application of RDA to the
discovery of disease genes. The Research Program includes the use of RDA to
search for [*]. The development and use by Dr. Wigler's lab of other
representational approaches to gene discovery are included as part of the
Research Program. The Research Program also includes the study of [*]
discovered by representational approaches. The Research Program also includes
improvements to methodology for gene finding, and mutational and genomic
analysis.
The Research Program will not encompass discoveries falling within the foregoing
areas to the extent that such discoveries are exclusively directed towards the
work of Dr. Wigler's laboratory in the [*] area. The final determination of
whether a discovery falls inside or outside of the Research Program will be made
in good faith between the president and CEO of Tularik, currently David Goeddel,
and the Director of CSHL, currently Bruce Stillman.
Use of Tularik Funds Under the Research Program
-----------------------------------------------
Portions of the Research Program may be funded by the NIH and other government
programs. Payments by Tularik in support of the Research Program will be used
to complement and extend the funding from such governmental sources. In
particular the Tularik research support payments will be used as follows:
1. For the purchase of the [*]
2. For the initiation of RDA projects for which [*]
3. For the purchase of equipment for the Research Program.
4. For the scaling up of work on particular [*]
5. For the hiring of additional scientists and technicians to expand the
Research Program
Averaged over any twelve month period, a minimum of [*] full-time equivalent
personnel directed by Michael Wigler at Cold Spring Harbor Laboratory will be
dedicated to the Research Program, and the Research Program will represent at
least [*] of Dr. Wigler's effort.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Appendix B
THE RESEARCH PROGRAM BUDGET
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.11
LICENSE AGREEMENT
I. BACKGROUND
This Agreement is entered into this 3/rd/ day of October 1997 by and
between COLD SPRING HARBOR LABORATORY ("Licensor" or "CSHL"), a non-profit
research institution located in Cold Spring Harbor, New York; and TULARIK INC.
(which together with its Affiliate companies collectively shall be "Licensee"),
a corporation organized under the laws of the State of Delaware having its
principal office at Two Corporate Drive, South San Francisco, California 94080.
This Agreement will be effective upon the consummation of the merger between
Tularik Acquisition Corp., a wholly-owned subsidiary of the Company, and
Amplicon Corp. (the "Effective Date").
"AFFILIATE" means any present or future domestic or foreign corporation at least
Fifty-One Percent (51%) of whose voting and other capital stock shall at the
time be owned or controlled directly or indirectly by Licensee.
"RESEARCH AGREEMENT" means that certain Research Agreement by and between CSHL
and Licensee having an effective date of even date herewith.
II. LICENSE GRANT
A. Subject to (i) Licensor's right to use the Licensed Patents for
its non-commercial research and education programs, (ii) [ * ] and (iii) Section
X of this Agreement, Licensor grants
<PAGE>
to Licensee a royalty-bearing, worldwide, exclusive right and license to
practice the methods of the Licensed Patents and to make, have made, use, offer
for sale, sell and import Primary Products and Secondary Products (as defined
herein).
B. Subject to the conditions set forth in Section II.A., Licensor grants
to Licensee a worldwide, non-exclusive right and license to non-patented
technology and information necessary or useful for the practice of the Licensed
Patents, provided that such technology and information is known to CSHL and is
in Dr. Michael Wigler's laboratory at CSHL. Dr. Michael Wigler is the Principal
Investigator on the Research Program described in Appendix A to the Research
Agreement.
C. "Licensed Patents" include (1) [ * ], and any divisional,
continuations-in-part, reissues and extensions to the extent that any are
directed to the subject matter specifically described in such [ * ]; (2) [ * ]
and any divisionals, continuations-in-part, reissues and extensions to the
extent that they are directed to the subject matter specifically described in
such [ * ]; and (3) patents and patent applications directed to improvements in
[ * ], provided that Licensor has rights in such patents and/or applications
that it is free to license or sublicense, and Dr. Wigler or any person(s)
working under his supervision is named as an inventor on such patents or
applications. RDA is the term commonly used to refer to the methods of the
Licensed Patents. Improvement(s), as used in this Agreement, means
any modification of [ * ], provided such modification, if unlicensed, would
infringe one or more claims of the Licensed Patents.
For the purposes of this Agreement, Primary and Secondary Products are
defined as follows: (1) Primary Products means [ * ], and (2) Secondary
Products means [ * ]. Primary and Secondary Products will remain assets of
Licensee or sublicensee.
D. Licensee shall have the exclusive right to enter into sublicensing
agreements for the rights, privileges and licenses granted hereunder. Licensee
shall notify Licensor, in writing, of the terms of any sublicense agreement
where collaborative efforts between Licensee and its sublicensee will be
undertaken, prior to the execution of such agreement, so that an allocation
[ * ] = Certain confidential information in this document, marked by brackets,
has been ommitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
can be made under Section III.B(2). If necessary, Licensee shall delay execution
of such agreement for up to [ * ] after Licensee notifies Licensor of the terms
of such sublicense agreement in order for the parties to agree on such an
allocation prior to execution of such agreement. If they cannot agree within
such time, Licensee may enter into the sublicense agreement and the parties
shall continue to work to determine the allocation as provided in Section
III.B(2). If the parties cannot determine such allocation, the matter shall be
referred to arbitration in accordance with Section XI.F. Licensee agrees to
provide to Licensor a copy of any and all sublicense agreements within [ * ] of
execution of such sublicense and further agrees to provide to Licensor annually
a copy of reports received by Licensee from its sublicensees during the
preceding [ * ] period under the sublicenses as shall be pertinent to a royalty
accounting under the sublicense agreements.
III. ROYALTIES AND OTHER PAYMENTS
A. Royalties shall be paid in accordance with the following schedule
on Primary and Secondary Products based upon the Licensed Patent(s) utilized in
the discovery or development of such Primary or Secondary Product:
1. Until the expiration of the Licensed Patent(s) utilized for such
Primary or Secondary Product: the royalty rate on Primary
Products shall be [ * ] of the Net Sales (as defined below) of
Primary Products sold by Licensee or its sublicensees; the
royalty rate on Secondary Products shall be [ * ] of the Net
Sales of Secondary Products sold by Licensee or its sublicensees;
2. Upon the expiration of the last of the Licensed Patents utilized
for such Primary or Secondary Product: the royalty rates due
Licensor on Net
[ * ] = Certain confidential information in this document, marked by brackets,
has been ommitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
Sales of Primary and Secondary Products by Licensee or its
sublicensees shall be [ * ], that is, [ * ] for Primary Products
and [ * ] on Secondary Products, provided that a method claimed
in a Licensed Patent was utilized in the discovery or development
of such Primary or Secondary Product prior to expiration of such
Licensed Patent. Payment of such reduced royalties to Licensor
shall continue until the last to expire of Licensee's patents, if
any, on such Primary and/or Secondary Products, but in no event
shall full-rate and/or reduced royalties be paid for more than
fifteen (15) years in the aggregate from the First Commercial
Sale (as hereinafter defined) of any Primary or Secondary
Product.
If, upon the last to expire of Licensed Patents utilized in
the discovery or development of such Primary or Secondary
Product, Licensee has no issued patents but has (i) pending
applications covering the Primary and/or Secondary Product, or
(ii) files an application(s) covering such Product within one (1)
year of the expiration date of the applicable Licensed Patent,
Licensee's obligation to pay reduced royalties on such Primary or
Secondary Product shall continue until (i) the last to expire of
any patents issuing on such application, or if no such patents
issue (ii) fifteen (15) years from the expiration of the last of
the aforementioned Licensed Patents, as the case may be; provided
that in no event shall full-rate and/or reduced royalties be paid
for more than fifteen (15) years in the aggregate from the First
Commercial Sale of any Primary or Secondary Product. Licensee
shall promptly notify Licensor of each Primary or Secondary
Product discovered or identified during the life of the Licensed
Patents and shall further promptly notify Licensor of
[ * ] = Certain confidential information in this document, marked by brackets,
has been ommitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
any and all applications for patent and/or patents on such
Primary and Secondary Products and provide to Licensor copies of
such applications and/or patents.
"Net Sales" shall mean the gross amounts received by Licensee, or its
sublicensees, for the commercial sale of Primary or Secondary Products, whether
invoiced or not, less: returns and allowances actually granted, packing,
insurance, freight out, taxes or excise duties imposed on the transaction (if
included in the gross amount received by Licensee), wholesaler discounts and
cash discounts.
Should marketing of a Primary or Secondary Product require the payment
of a royalty to Licensor under any license agreement executed between Licensor
and Licensee upon exercise of the rights granted to Licensee under the Research
Agreement, then the royalty payments due under this Section III.A. for the same
Primary or Secondary Product will be reduced by the amount of the royalty due
under the Research Agreement or by one half, whichever such reduction is less.
Anything in this Section III. to the contrary notwithstanding, in no event
shall [ * ] require the payment of a royalty to Licensor.
B. Sublicensing Payments
---------------------
In the event Licensee enters into any agreement sublicensing rights under
the Licensed Patents, Licensee shall make the following payments with respect to
the sublicensed rights, in addition to the royalties set forth in Section III.A.
of this Agreement. The sublicensing payments to Licensor shall be determined by
the type of sublicensing agreement Licensee proposes to enter, as set forth
below:
1. For sublicensing agreements where no collaborative efforts
between Licensee and its sublicensee are undertaken [ * ],
Licensee shall pay to Licensor [ * ] of Sublicense Revenue (as
defined below), less Licensee's
[ * ] = Certain confidential information in this document, marked by brackets,
has been ommitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
Fully Burdened Costs (as defined below). "Sublicense Revenue"
shall mean [ * ]. "Fully Burdened Costs" as used above shall
include all [ * ]. In no event shall Fully Burdened Costs [ * ].
Each statement under Section III.B. shall specify the amount
of "Fully Burdened Costs" in connection with each sublicensing
agreement and shall be certified by an officer of Licensee, and
the calculation thereof shall be subject to review by Licensor.
2. For sublicensing arrangements where collaborative efforts between
Licensee and its sublicensee are undertaken, including but not
limited to joint ventures, the President and CEO of Licensee,
currently David Goeddel, and the Director of Licensor, currently
Bruce Stillman, shall use their best efforts to determine the
relative contribution of the Licensed Patents to the total
package of patent rights, trade secrets, data, services and
materials which Licensee brings to the proposed arrangement (such
package being the "Transaction Technology"). If the determined
percentage contribution of the Licensed Patents to the
Transaction Technology is [ * ], then Licensee shall pay to
Licensor [ * ]. If the determined percentage contribution of the
Licensed Patents to the Transaction Technology is less than [ *
], then Licensee shall pay to Licensor [ * ] multiplied by the [
* ]. In the event the parties cannot agree upon a fair
apportionment within sixty (60) days of the date Licensee
notifies Licensor of the terms of the sublicense agreement, the
matter will be subject to arbitration in accordance with Section
XI.F. of this Agreement.
C. First Commercial Sale
---------------------
Licensee will notify Licensor within thirty (30) days of the First
Commercial Sale of each royalty-bearing Primary and Secondary Product. By "First
Commercial Sale" is intended the initial transfer by Licensee or a sublicensee
of a Primary or Secondary Product for cash or a cash equivalent.
[ * ] = Certain confidential information in this document, marked by brackets,
has been ommitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
D. Payments And Records
--------------------
Beginning with the date of the First Commercial Sale, Licensee shall pay to
Licensor the royalties due within ninety (90) days of the end of each calendar
half-year. Accompanying the payment will be a statement of the sales of Primary
and Secondary Products by Licensee and the applicable royalties in sufficient
detail to allow Licensor to calculate the royalties due. Licensee shall keep
accounts and records in sufficient detail to enable Licensor to determine
royalties due for sales of Primary and Secondary Products by Licensee and its
sublicensees.
Licensee agrees to make such records available for inspection by Licensor
or its authorized representative at such place or places where such records are
customarily kept upon reasonable notice and at reasonable hours of the day
during which the offices of Licensee shall be open for business. Licensor agrees
to hold strictly confidential in accordance with Section XI.C. all information
learned in the course of any audit or inspection hereunder, except to the extent
that it is necessary for Licensor to reveal such information in order to enforce
rights under this Agreement or to comply with the law. In any license from
Licensee to a third party for the making, using, offering for sale, selling
and/or importing of Primary and/or Secondary Products, Licensee shall provide
that such sublicensee shall assume substantially similar obligations as assumed
by Licensee for reporting and to allow for inspection by Licensor to determine
whether the royalties paid are correct. Within [ * ] of the expiration of the
term of this Agreement as provided for in Section VII, Licensee shall provide a
final report as to all royalties due which were not previously reported by
Licensee, accompanied by the payment due. [ * ].
[ * ] = Certain confidential information in this document, marked by brackets,
has been ommitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
E. Licensing Fees
--------------
In the event the Research Program described in the Research Agreement
terminates under the conditions set forth in Section 2 of the Research
Agreement, the research funding provided for in Section 4.A. of that Research
Agreement shall [*].
IV. DUE DILIGENCE
During the term of this exclusive license, Licensee shall use its
reasonable best efforts to use the Licensed Patents to discover Primary and/or
Secondary Products or, if Licensee itself does not do so, Licensee shall
sublicense to sublicensees that are committed to using their reasonable best
efforts to pursue such Primary or Secondary Products.
V. INDEMNITY
Licensee shall indemnify, hold harmless and defend Licensor from and
against any liability or expense arising from any product liability claim
asserted by any party as to any Primary or Secondary Products, [ * ]. Said
indemnity and defense obligation shall apply to any claims made by employees,
subcontractors, sublicensees or other agents of Licensee, as well as any member
of the general public.
Licensee shall defend, indemnify and hold Licensor harmless from and
against all liability, demands, damages, expenses and losses for death, personal
injury, illness or property damage arising out of the use by Licensee of any
Licensed Patents [ * ]. Licensee will not be obligated to indemnify Licensor
hereunder for the use of the Licensed Patents by others under this Agreement.
Licensee agrees to maintain liability insurance, naming Licensor as an
additional insured, [*], and shall provide evidence of such insurance at
Licensor's request.
[ * ] = Certain confidential information in this document, marked by brackets,
has been ommitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
Licensee shall have the exclusive right to control the defense of any
action pursuant to this Section V, including the right to select counsel to
defend Licensee and Licensor, and to settle any claim, provided that, without
the written consent of Licensor (which shall not be unreasonably withheld or
delayed), Licensee shall not agree to settle any claim against Licensor to the
extent such claim has a material or adverse effect on the Licensed Patents. The
provisions of this paragraph shall survive and remain in full force and effect
after any termination, expiration or cancellation of this Agreement or the term
of this Agreement as provided for in Section VII and obligations hereunder shall
apply whether or not such claims are rightfully brought.
VI. WARRANTIES; PATENT ENFORCEMENT
A. Disclaimers - Nothing in this Agreement shall be construed as:
1. a warranty or representation by Licensor [ * ]; or
2. a warranty or representation that [ * ]; or
3. an obligation to [ * ]; or
4. conferring by implication, estoppel or otherwise [ * ].
5. Licensor makes no representations other than those specified
herein.
LICENSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
B. Warranties - Each of Licensor and Licensee represent and warrant to
the other that it has the full right and authority to enter into this Agreement
and that this Agreement does not require the consent or approval of any other
person or entity.
[ * ] = Certain confidential information in this document, marked by brackets,
has been ommitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
C. Patent Enforcement - Each party shall promptly notify the other if it
learns of any infringement by third parties of the Licensed Patents. Licensee
shall have the first right, but not the obligation, to take commercially
reasonable action with respect to such infringement, including but not limited
to bringing and controlling an enforcement action against such third party (in
CSHL's name if necessary). CSHL agrees to provide all reasonable assistance
requested by Licensee in connection with any such action, including but not
limited to being named in such action and providing testimony, for which
Licensee shall reimburse CSHL for its out-of-pocket costs and expenses. Any
damages, judgments or other payments actually recovered from an infringing party
in litigation pursued by Licensee shall be [ * ]. In the event Licensee elects
not to take any action with respect to such infringement, Licensee shall so
notify CSHL and CSHL shall have the right, but not the obligation, to bring an
infringement action on its own behalf [ * ]; provided that only Licensee shall
have the right to grant a (sub)license to any such third party; provided further
that [ * ].
VII. TERM AND TERMINATION
A. Term
----
This Agreement shall expire upon the later of (i) the expiration of the
last to expire Licensed Patent or (ii) the expiration of all payment obligations
under Section III.A or III.B.
B. Termination
-----------
1. This Agreement shall be terminable upon the default of either
party. In the event of default by a party ("Defaulting Party"), the other party
("Non-Defaulting Party") shall give the Defaulting Party written notice of the
default and of its election to terminate this Agreement at the expiration of a
probation period of [ * ] from the date of the notice. If the
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
10.
<PAGE>
Defaulting Party fails to resolve the default in the probation period by (i)
curing the default, (ii) providing a written explanation satisfactory to the
Non-Defaulting Party that a default has not occurred or (iii) entering into a
written agreement with the Non-Defaulting Party for the cure or other resolution
of the default, then the Non-Defaulting Party may terminate this Agreement by
giving written notice to the Defaulting Party. The termination will be effective
upon the date specified in the notice. All termination rights shall be in
addition to, and not in substitution for, any other remedies that may be
available to the Non-Defaulting Party. Termination pursuant to this section
shall not relieve the Defaulting Party from liability and damages to the Non-
Defaulting Party for default. Waiver by either party of a single default or a
succession of defaults shall not deprive such party of any right to terminate
this Agreement arising by reason of any subsequent default.
2. This Agreement may be terminated by Licensee by written notice
delivered to Licensor at any time after October 3, 2002, effective one year
after the date of such notice, in the event that Licensee determines that it
will no longer utilize the Licensed Patents.
3. This Agreement may be terminated by Licensee at any time upon
[*] prior written notice in the event that Dr. Michael Wigler is, for any
reason, unable or unwilling to continue to serve as Principal Investigator under
the Research Agreement and the parties cannot mutually agree on a successor or
alternative research work to be sponsored under the Research Agreement.
C. Effect of Expiration or Termination
-----------------------------------
Upon the expiration of the term of this Agreement, or any termination of
this Agreement by either Licensor or Licensee prior to the end of such term, the
licenses granted hereunder shall terminate to the extent that Licensee shall no
longer be licensed to practice the Licensed Patents
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
11.
<PAGE>
after the date of termination. The terms of this Agreement applicable to Primary
Products and Secondary Products discovered or developed through use of the
methods claimed in the Licensed Patents prior to the date of termination,
including the royalty provisions, shall continue to apply after termination of
this Agreement.
VIII. RESEARCH SITE.
Unless Licensor and Licensee otherwise agree in writing, Licensee shall
maintain a facility in reasonable geographic proximity to Licensor or Long
Island, New York (i.e., approximately 10-15 miles from Licensor) until [ * ].
Licensee further agrees that [ * ].
IX. ASSIGNMENT
This Agreement shall not be assignable by either of the parties without
the prior written consent of the other party except to a successor-in-interest
to all or substantially all of the business assets of a party hereto, whether by
way of merger, consolidation, sale of all or substantially all of a party's
assets, change of control or similar transaction.
Subject to the limitations on assignment herein, this Agreement shall be
binding upon and inure to the benefits of the successors-in-interest and assigns
of Licensor and Licensee. Any such successors to or assignee of a party's
interest shall expressly assume in writing the performance of all the terms and
conditions of this Agreement to be performed by said party.
X. THIRD PARTY RIGHTS
The Licensed Technology defined by the [ * ] was made with Government
support under contract [ * ] awarded by the National Institute of Health. This
Agreement is subject to the terms and conditions defined therein, including but
not limited to 37 C.F.R. Part 401 and 45 C.F.R. Parts 6 and 8 plus all
Amendments thereto.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
12.
<PAGE>
This Agreement is also subject to the terms of [ * ], a copy of which is
hereby acknowledged to have been provided in confidence by Licensor to Licensee.
XI. GENERAL PROVISIONS
A. Patent Marking
--------------
To the extent required by applicable law, Licensee shall mark all Primary
and Secondary Products in accordance with the patent marking laws of the country
in which such Primary and Secondary Products are manufactured, used, or sold.
B. No Use Of Name
--------------
The use of the name "Cold Spring Harbor Laboratory", or any variations
thereof, in connection with the advertising or sale of products or methods
covered by Licensed Patents is expressly prohibited, except as required by law.
Sponsor may refer to the terms of this Agreement in a bona fide relationship or
prospective relationship with financiers or investors.
C. Confidentiality
---------------
The parties agree that during the term of this Agreement and for a period
of five (5) years after it terminates, a party receiving information from the
other party designated as "confidential" in writing ("Confidential Information")
will not disclose such Confidential Information to any third party or use such
Confidential Information except as provided in this Agreement without prior
written consent. A party shall have no obligations with respect to any portion
of such Confidential Information which:
(1) is publicly disclosed through no fault of any party hereto, either
before or after it becomes known to the receiving party; or
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
13.
<PAGE>
(2) was known to the receiving party prior to the date of this
Agreement which knowledge was acquired independently and not from the other
party; or
(3) is subsequently disclosed to the receiving party in good faith by
a third party who has a right to make such a disclosure; or
(4) has been published by a third party as a matter of right; or
(5) is subsequently independently invented or discovered other than
pursuant to the Research Program by the receiving party without reference to the
other party's Confidential Information.
D. Independent Contractors
-----------------------
The relationship between Licensor and Licensee is that of independent
contractors. Licensor and Licensee are not joint venturers, partners, principal
and agent, master and servant, employer and employee, and have no other
relationship other than independent contracting parties. Licensor shall have no
power to bind or obligate Licensee in any manner, other than as is expressly set
forth in this Agreement. Likewise, Licensee shall have no power to bind or
obligate Licensor in any manner, other than as is expressly set forth in this
Agreement.
E. Entire Agreement; Modification
------------------------------
This Agreement, together with the Research Agreement, sets forth the entire
agreement and understanding between the parties as to the subject matter set
forth in this Agreement. There shall be no amendments or modifications to this
Agreement, except by a written document that is signed by both parties.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
14.
<PAGE>
F. Arbitration
-----------
Any dispute or controversy arising out of or relating to this License
Agreement, its construction or its actual or alleged breach, shall be finally
decided by arbitration conducted in the City and State of New York by and in
accordance with the Licensing Agreement Arbitration Rules of the American
Arbitration Association. The parties agree that any arbitration panel shall
include members knowledgeable as to evaluation of biopharmaceutical technology.
Judgment upon the award rendered may be entered in the highest court or forum,
state or federal, having jurisdiction; provided, however, that the provisions of
this Section shall not apply to decisions on the validity of patent claims or to
any dispute or controversy as to which any treaty or law prohibits such
arbitration.
G. Governing Law
-------------
This Agreement shall be construed and enforced in accordance with the laws
of the State of New York.
H. Headings
--------
The headings for each article and section of this Agreement have been
inserted for the convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular article or
section.
I. Severability
------------
If any provision of his Agreement is ultimately held to be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
15.
<PAGE>
J. No Waiver
---------
Any delay in enforcing a party's rights under this Agreement or any waiver
as to a particular default or other matter shall not constitute a waiver of such
party's rights to the future enforcement of its rights under this Agreement,
excepting only as to an express written and signed waiver as to a particular
matter for a particular period of time.
K. Notices
-------
All notices required or permitted to be given by the terms of this
Agreement shall be given by prepaid registered or certified mail return receipt
requested or by facsimile transmission properly addressed to the other party at
the addresses designated below or to such other addresses as may be designated
in writing by such other party and shall be effective upon receipt.
For Licensor: Cold Spring Harbor Laboratory
One Bungtown Road
Cold Spring Harbor, NY 11724
Attn: Assistant Administrative Director
Telefax: (516) 367-8855
For Licensee: Tularik Inc.
Two Corporate Drive
South San Francisco, CA 94080
Attn: President
Telefax: (650) 829-4303
L. Compliance With Laws
--------------------
Nothing contained in this Agreement shall require or permit Licensor or
Licensee to do any act inconsistent with the requirements of any United States
law, regulation or executive order as the same may be in effect from time to
time.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
16.
<PAGE>
COLD SPRING HARBOR LABORATORY TULARIK INC.
By: /s/ John Maroney By: /s/ David V. Goeddel
------------------------------------ ----------------------------------
John Maroney
Assistant Administrative Director David V. Goeddel
----------------------------------
Typed Name
Date: 10/3/97 President & CEO
---------------------------------- ----------------------------------
Title
Date: 10/3/97
----------------------------------
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
17.
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.13
September 8, 1998
Mr. Masakazu Kakei
Executive Director and Member of Board
Japan Tobacco Inc.
JT Building, 2-1 Toranomon, 2-chome
Minato-ku, Tokyo 105-8422, Japan
Re: Preliminary Research, Development and Marketing Agreement between Tularik
Inc. ("Tularik") and Japan Tobacco Inc. ("JT") (individually, a "Party"
and, collectively, "Parties").
Dear Mr. Kakei:
This Preliminary Research, Development and Marketing Agreement ("Agreement")
sets forth the Parties' preliminary agreement on terms and conditions under
which Tularik and JT will participate in a collaborative program ("Program") to
research, discover, develop, manufacture and market products that agonize or
antagonize Orphan Nuclear Receptors for the treatment of disease in humans
("Field"). Subject to the fourth sentence of this paragraph, "Orphan Nuclear
Receptors" shall mean: (i) [ * ], (ii) any protein containing a [ * ] domain of
[ * ] amino acid residues [ * ] of which are [ * ] that is further characterized
by [ * ] of the [ * ] type and to the [ * ] of which [ * ] domain is a region
with [ * ] to the [ * ] domain of any of the [ * ] set forth in (i) above, for
which a [ * ] shall not have been identified, but excluding [ * ] and the [ * ]
(as defined in [ * ]; and (iii) other [ * ] added to the research component of
the Program ("Research Program") by [ * ] of the RMC; provided, however, that in
-------- -------
the event the RMC is unable to [ * ] to the Research Program, such [ * ] shall
be excluded from the Research Program, shall not be [ * ] and may be pursued by
the Parties independently of this Agreement. The Parties acknowledge and agree
that Tularik has existing collaborative programs with JT (obesity), Merck & Co.,
Inc. (viral diseases), Sumitomo Pharmaceuticals Co., Ltd.
(hypercholesterolemia), Taisho Pharmaceuticals Co., Ltd. (immune regulation) and
the Roche Bioscience division of Syntex (U.S.A.), Inc. (inflammation)
(collectively, "Third Party Agreements") that may contractually require Tularik
to collaborate [ * ] on orphan nuclear receptors that [ * ] but for [ * ].
Anything in the second sentence of this paragraph to the contrary
notwithstanding, the definition of Orphan Nuclear Receptor shall not include
those orphan nuclear receptors that: are [ * ] within the Third Party Agreements
(but only to the extent [ * ]); 2) become [ * ] within a Third Party Agreement
by [ * ] within the Third Party Agreement (but only to the extent required by
the terms of such Third Party Agreement); 3) are [ * ] that are [ * ] a Third
Party Agreement (irrespective of whether the [ * ] of such [ * ] within such [
* ] is known as of the Agreement Date) (but only to the extent required by the
terms of such Third Party Agreements); or 4) are [ * ] as [ * ] in a Third
Party Agreement (but only to the extent required by the terms of such Third
Party Agreements); provided, however, that Tularik shall not [ * ] such Third
Party Agreements to be [ * ] in a way (including [ * ] contained in the Third
Party Agreements) that [ * ]; provided further that Tularik shall within [ * ]
return any [ * ] following [ * ] in the event that such [ * ] were [ * ] on a
Product that is [ * ] to [ * ] for which Tularik [ * ] pursuant to a [ * ] and
for which JT is required to [ * ]. In the event that a Product is [ * ]
determined to [ * ] for which Tularik [ * ] pursuant to a [ * ] and for which
JT is required to [ * ], Tularik shall [ * ] to JT an [ * ] between [ * ] in
good faith that [ * ] (as defined in Section [ * ] previously [ * ]. All
collaborative programs entered into between Tularik and Third Parties after
the Execution Date shall [ * ]. The Parties intend to express their agreement
more fully pursuant to a definitive agreement ("Collaboration Agreement"). The
Parties shall use their respective commercially reasonable efforts to execute
the Collaboration Agreement [ * ] ("Execution Date").
<PAGE>
1. Committees
a. EC. The goals and progress of the Program shall be the ultimate
responsibility of an Executive Committee ("EC") comprised of the Chief Executive
Officer of Tularik and a senior officer of JT's pharmaceutical business to be
appointed within 10 days after the date on which the Parties sign this Agreement
(the "Agreement Date"). A Party may replace its designee to the EC by written
notice to the other Party. Except as provided herein, all decisions of the EC
shall be unanimous. The EC shall resolve problems and settle disagreements that
are unresolved by the RMC, the JDC or the MC. The EC shall meet as necessary to
resolve disagreements pursuant to this Agreement
b. Research Management Committee. The goals and progress of the
Research Program shall be determined and monitored by a Research Management
Committee ("RMC"), which shall be composed of three members from each of Tularik
and JT, the Chairperson of which shall be named by Tularik. A Party may replace
any designee to the RMC by written notice to the other Party. The RMC shall meet
at least twice annually at a time and place it so designates. The RMC will
periodically review the Research Program and the Parties' progress thereunder,
to the extent set forth in the Research Plan, including all screening results
and new developments regarding the Field, and propose changes to the Research
Plan based upon the results of prior work and new developments in the Field. The
RMC will select the Collaboration Lead Compounds by a unanimous vote pursuant to
Section 3(b). All data and information obtained by either Party pursuant to the
Research Program will be provided to the RMC. The RMC will delegate
responsibility for the filing and prosecution of Program Patents arising from
the Research Program on inventions jointly discovered in the course of the
Research Program Term. The RMC will be responsible for coordinating all aspects
of all activities undertaken to identify and develop a Lead Compound that are
necessary or desirable to determine whether such Lead Compound may be suitable
for designation as a Collaboration Lead Compound pursuant to Section 3(b)(i). In
addition, the RMC will be responsible for coordinating all aspects of all
activities (including, but not limited to: [ * ] that will be undertaken with
respect to a Collaboration Lead Compound that are necessary or desirable to
enable the filing of an IND on Products based upon or incorporating such
Collaboration Lead Compound, including the preparation and filing of an IND
(collectively, "Pre-Clinical Development"). All decisions of the RMC shall be
unanimous.
c. Joint Development Committee. Within thirty (30) days of the date
a Collaboration Lead Compound is designated by the RMC, the Parties shall each
appoint three representatives to a Joint Development Committee
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
("JDC"). A Party may replace any designee to the JDC by written notice to the
other Party. Such representatives will include individuals with expertise and
responsibilities in the areas of pre-clinical development, clinical development
or regulatory affairs. The JDC will be responsible for coordinating all aspects
of the Development of each Product through the filing of an NDA or equivalent by
unanimous decisions. "Development" shall mean the development of any Product
occurring from and after the filing of an IND, through and including approval of
an NDA and any other governmental approvals required for the commercialization
of such Product in a country.
d. Marketing Committee. Upon recommendation of the JDC in
anticipation of the first commercial launch of one or more Products, but in any
event no later than [ * ] for any Product, the Parties shall each appoint three
representatives to a Marketing Committee ("MC"). A Party may replace any
designee to the MC by written notice to the other Party. Such representatives
will include individuals with expertise and responsibilities in the areas of
sales, marketing, manufacturing or regulatory affairs. The MC will develop a
marketing plan for each Product in the Co-Promotion Territory, shall oversee
quality control of the Product and shall oversee operational aspects of
marketing and sales in the Co-Promotion Territory following launch of each such
Product, in all cases by unanimous decisions. "Tularik Territory" shall mean the
countries, territories and possessions of the United States of America and
Canada. "JT Territory" shall mean Japan and Korea and their territories and
possessions. "Exclusive Territories" shall mean the Tularik Territory and the JT
Territory. "Co-Promotion Territory" shall mean all of the countries and
territories of the world other than the countries and territories within the
Exclusive Territories. "Territory" shall mean the Exclusive Territories and the
Co-Promotion Territory.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
e. Dispute Resolution. Any disputes or disagreements arising in the
RMC, JDC or MC will be referred to the EC if the RMC, JDC or MC, as the case may
be, is unable to resolve such dispute or disagreement [ * ] after submission of
an issue to such committee. In addition, any other disputes or disagreements
between the Parties arising hereunder will first be referred to the EC. If such
dispute is not resolved within [ * ] following submission of such dispute to the
EC and such dispute relates to an alleged breach of this Agreement, then either
Party may propose to refer such dispute to arbitration, and thereafter such
dispute shall be resolved pursuant to Section 19. In the event such dispute is
not resolved within [ * ] following submission of such dispute to the EC and
such dispute does not relate to an alleged breach of this Agreement, such
dispute shall be referred to a Third Party mediator with significant experience
in the pharmaceutical industry acceptable to both parties for resolution. The
costs and expenses of such Third Party mediator shall be shared equally by the
Parties. In the event such dispute is not resolved within [ * ] following
submission of such dispute to the Third Party mediator, then either Party may
propose to refer such dispute to arbitration, and thereafter such dispute shall
be resolved pursuant to Section 19.
2. Research Program
a. Research Program. The Research Program shall be conducted in the
Field pursuant to a detailed Research Plan as set forth in Appendix A ("Research
Plan"). The Parties shall commence the Research Program promptly upon the
Agreement Date.
b. Basic Research. The Parties will jointly undertake, under the
direction of the RMC, basic research towards the objectives of the Research
Program. During the Research Program Term (as defined in Section 2(g)), JT shall
provide the research payments set forth in Section 10(a) to support the [ * ].
The actual [ * ].
c. Screening. Tularik shall develop and perform biochemical and
cell-based assays ("Tularik Assays") to determine (i) [ * ] ("Lead Compounds").
[ * ]. Each Party will provide its proprietary chemical and natural product
libraries to Tularik for screening as directed by the RMC; provided, however,
that a Party shall not be required to provide a compound for screening that [ *
]. Unless otherwise directed by the RMC and except as provided in Section 2(e),
the activities under Sections 2(b) and 2(c) shall be the responsibility [ * ] of
Tularik until such time as [ * ] pursuant to this Section 2(c). If a compound is
designated as a Lead Compound [ * ], such compound shall be removed from the
screening library from which such Lead Compound originated until such time as
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
such Development of such Lead Compound (or Collaboration Lead Compounds or
Products resulting therefrom) shall be terminated by the Parties.
d. Research License. Each Party hereby grants to the other Party a
non-exclusive license to practice (i) inventions claimed in or covered by
patents and patent applications owned or controlled by such Party relating to
the discovery and commercialization of Independent Lead Compounds, Independent
Products, Lead Compounds, Collaboration Lead Compounds or Products made or
discovered during the Research Program Term ("Program Patents"), (ii) other
know-how, information and technology owned or controlled by the other Party and
developed during Research Program Term ("Program Know-How"), (iii) patents and
patent applications owned or controlled by such Party to the extent applicable
to the Field existing as of the Agreement Date (other than Program Patents)
("Patent Rights") and (iv) know-how, information and technology existing as of
the Agreement Date (other than Program Know-How) owned or controlled by such
Party to the extent applicable to the Field ("Know-How") solely for the purpose
of conducting the Research Program. A brief general description of Tularik's
Patent Rights and Know-How is attached as Appendix B. A brief general
description of JT's Patent Rights and Know-How is attached as Appendix C.
Tularik and JT shall provide numbers of all relevant patents and patent
applications within their respective Patent Rights following execution of this
Agreement.
e. Research Chemists. The Parties recognize that the prompt
allocation of appropriate medicinal chemistry resources to optimize Lead
Compounds will confer a competitive advantage upon the Research Program.
Accordingly, the Parties agree that the RMC, by unanimous decision, shall be
responsible for determining: (i) [ * ]. Each of JT and Tularik shall be
responsible for dedicating to the Research Program [ * ]; provided, however,
that the RMC may decide to [ * ]. In the event that either JT or Tularik is(
unable to [ * ]; provided, however, that the Receiving Party shall, upon written
request by the Paying Party, provide documentation to demonstrate that the [ *
]. In the event that the Receiving Party shall be [ * ], the Paying Party shall
be required to pay the Receiving Party [ * ]. The Parties understand and agree
that: [ * ]. In the event that the RMC is unable to unanimously agree on [ *
], the matter shall be referred to the EC for unanimous resolution. In the
event that the EC is unable to unanimously agree on [ * ], a Party will have the
right to proceed independently to develop such compound as an Independent Lead
Compound under Section 3(m) and to develop Independent Products incorporating or
based on such Collaboration Lead Compound.
f. Exchange of Pre-Clinical Data. JT and Tularik will exchange pre-
clinical data generated during the Research Program for [ * ]. As provided in
Sections 4(a) and 4(b), the Parties may also make such data available
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
to any permitted sublicensees in the Field in a country or countries in the
Territory; provided, however, such data shall not be made available to such
sublicensees until a sublicensee has executed a standard confidentiality
agreement covering disclosure and use of such data.
g. Research Program Term. The Research Program shall be conducted
during the period of five years commencing as of the Agreement Date ("Research
Program Term"). Upon not later than seventy-five (75) days' prior written notice
JT may, in its sole judgment, terminate the Research Program at the end of the
third (3/rd/) year and fourth (4/th/) year of the Research Program. The RMC may
terminate the Research Program any time during the Research Program Term if it
unanimously determines the Research Program is no longer scientifically useful
or that all potential Products would not be commercially viable. In case of such
an early termination by JT or the RMC, JT shall be exempt from any payment(s)
under Section 10(a) that would have become due and payable after the effective
date of such early termination. Following any termination of the Research
Program (i) that occurs simultaneously with the termination of this Agreement in
accordance with Section 13 (i.e., no compound or Lead Compound has been
designated previously a Collaboration Lead Compound in accordance with Section
3(b) and no Independent Lead Compound is being developed in accordance with
Section 3(m)) or (ii) that is followed at some future date by the termination by
JT of Development or co-promotion of any Collaboration Lead Compound and/or
Product pursuant to Sections 3(l) or 5(c), respectively, or development of an
Independent Lead Compound in accordance with Section 3(m) (A) any licenses
granted by Tularik to JT will terminate, (B) JT will grant to Tularik an
exclusive, sublicensable, worldwide license, to make, use and sell compounds,
Collaboration Lead Compounds or Products under JT's interest in Program Patents
and Program Know-How and (C) under the terms and conditions to be separately
agreed, JT will also grant to Tularik a nonexclusive, sublicensable, worldwide
license under any JT Patent Rights and Know-How to the extent necessary to
practice the license granted under the Program Patents and Program Know-How in
(B) (including, with respect to compounds, a limited number of JT's library
compounds approved by JT); provided, however, that in the event the Research
Program terminates but the Agreement has not terminated with respect to
designated Collaboration Lead Compounds, Independent Lead Compounds and/or
Products as provided in Section 2(g)(ii), Sections 2(g)(A), (B) and (C) shall
apply only to those compounds, Collaboration Lead Compounds, Independent Lead
Compounds and Products for which Development or co-promotion shall have been
terminated and/or to those compounds or Lead Compounds that have not been
designated previously a Collaboration Lead Compound in accordance with Section
3(b) or an Independent Lead Compound in accordance with Section 3(m); provided
further that in the event that JT elects to pursue a Discontinued Compound or a
Non-Proposed Compound on or before the first anniversary of the expiration or
termination of the Research Program Term pursuant to Section 3(b)(iii) or
3(b)(iv), respectively, Sections 2(g)(A), (B) and (C) shall not apply to such
Discontinued Compound or Non-Proposed Compound until such time as JT shall have
terminated the Development or co-promotion of such Discontinued Compound or Non-
Proposed Compound. Tularik will then be free to pursue clinical development and
registration of such compounds, Lead Compounds and/or Products without
obligation to JT except as provided in Section 4(f) or Section 5(c), as
appropriate.
h. Exclusive Collaboration. Except as provided below, the Parties
shall work exclusively with each other in the Field during the Research Program
Term. The research and development program being conducted by JT as of the
Agreement Date to discover and develop compounds having activity against orphan
nuclear receptors (the "JT Program") shall be included as part of the Research
Program; provided, however, that JT shall not be required to contribute (i)
compounds that [ * ] (the orphan nuclear receptors set forth in (i) and (ii)
above, collectively, "Excluded Orphan Nuclear Receptors"). During the Research
Program Term, neither Party shall discuss the terms of, or enter into, an
agreement with any Third Party relating to research, development or
commercialization activities of products in the Field without the express prior
unanimous written consent of the RMC, JDC or MC, respectively, except as
otherwise provided in
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
this Agreement. During the Term, neither Party will develop or commercialize a
product in the Field other than pursuant to this Agreement.
3. Development Program.
a. General Principles. The Parties agree to use commercially
reasonable efforts to develop Collaboration Lead Compounds for use in the Field,
making use of each Party's special expertise as directed by the RMC with the
intent of obtaining all worldwide approvals or authorizations necessary for the
manufacture, distribution, use or sale of a Product in the Territory
("Regulatory Approval") and bringing Products to the market as soon as
reasonably practicable thereafter.
b. Designation of Collaboration Lead Compound. (i) From time to
time either Party may propose to the RMC one or more Lead Compounds suitable for
Pre-Clinical Development. The RMC will promptly determine whether such Lead
Compound is suitable for Pre-Clinical Development by determining whether such
Lead Compound meets the criteria set forth by the RMC for a particular Orphan
Nuclear Receptor from time to time (the "Pre-Clinical Development Criteria").
(ii) If the RMC determines that such Lead Compound meets the Pre-
Clinical Development Criteria, then within [ * ] of such determination each
Party shall provide to the RMC a written notice as to whether it elects to
participate in and, subject to Section 3(f), commit resources to conduct Pre-
Clinical Development of such Lead Compound as a Collaboration Lead Compound
according to the proposed plan and budget. If the RMC determines that such Lead
Compound does not meet the Pre-Clinical Development Criteria, then within [ * ]
of such determination each Party shall provide to the RMC a written notice as to
whether it elects to designate such Lead Compound as a Collaboration Lead
Compound and participate in and commit resources to conduct Pre-Clinical
Development of such Collaboration Lead Compound notwithstanding that such Lead
Compound does not meet the Pre-Clinical Development Criteria. If each Party
makes an affirmative election with respect to any Lead Compound pursuant to
either the first or second sentence of this Section 3(b)(ii), such Lead Compound
shall be designated a "Collaboration Lead Compound" and, if an IND or equivalent
is filed thereon, a "Product." If one Party makes an affirmative election and
the other Party makes a negative election with respect to any Lead Compound
being designated a Collaboration Lead Compound, the Party making an affirmative
election will have the right to proceed independently to develop such
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
compound as an Independent Lead Compound or Independent Product under Section
3(m).
(iii) If neither Party makes an affirmative election with respect to
any Lead Compound being designated a Collaboration Lead Compound under Section
3(b)(i), such Lead Compound shall be neither a Collaboration Lead Compound nor a
compound that may be developed under Section 3(m), and development of such non-
elected Lead Compound (a "Discontinued Compound") may be subsequently initiated
by a Party by notifying the other Party of its interest in initiating
Development of such Discontinued Compound at any time on or before [ * ] of the
date of termination or expiration of the Research Program Term. If the other
Party indicates it is not interested in initiating Development of such
Discontinued Compound, the initiating Party may proceed with development of such
Discontinued Compound as an Independent Lead Compound or an Independent Product
and the initiating Party shall be deemed to be the Independent Party, pursuant
to Section 3(m). At any time after [ * ] of the date of termination or
expiration of the Research Program Term, either Party may, upon written notice
to the other Party, proceed with development of a Discontinued Compound as an
Independent Product and such Party shall be deemed to be the Independent Party,
pursuant to Section 3(m).
(iv) If a Lead Compound is not, at any time, presented to the RMC
pursuant to Section 3(b)(i), such Lead Compound shall be neither a Collaboration
Lead Compound nor a compound that may be developed under Section 3(m), and this
Section 3(b)(iv) shall govern any future development of such non-proposed Lead
Compound (a "Non-Proposed Compound"). If at any time on or before [ * ] of the
date of termination or expiration of the Research Program Term, a Party
hereunder (the "Non-Proposed Compound Interested Party") determines to initiate
Pre-Clinical Development of such Non-Proposed Compound, it shall provide written
notice to the other Party of such interest and the reasons therefor. The other
Party will then have [ * ] to indicate whether it also is interested in the
development of such Non-Proposed Compound. If the other Party is so interested,
the Parties will proceed with Pre-Clinical Development or Development of such
Non-Proposed Compound as a Collaboration Lead Compound pursuant to the terms of
this Agreement. If the other Party is not so interested, the Non-Proposed
Compound Interested Party may proceed with development of such Non-Proposed
Compound as an Independent Product and the Non-Proposed Compound Interested
Party shall be deemed to be the Independent Party, pursuant to Section 3(m). At
any time after [ * ] of the date of termination or expiration of the Research
Program Term, either Party may, upon written notice to the other Party, proceed
with development of a Non-Proposed Compound as an Independent
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
Product and such Party shall be deemed to be the Independent Party, pursuant to
Section 3(m).
c. Pre-Clinical Development. The Parties, under the direction of the
RMC shall conduct Pre-Clinical Development with respect to any designated
Collaboration Lead Compound. The costs of conducting such Pre-Clinical
Development shall be shared by the Parties as set forth in Section 3(f). Under
no circumstances shall either Party conduct studies of any Collaboration Lead
Compound in the Field except as permitted by the RMC.
d. Collaborative Development of Products. The Parties will each
diligently collaborate in the Pre-Clinical Development and Development and use
commercially reasonable efforts to develop and bring Products to the market as
soon as reasonably practicable. The role of each Party in the Development
process will be determined by the JDC, with the Parties intending that each
Party will provide advisory and supporting services with respect to each phase
of the process in which such Party is not actively or primarily involved. [ * ]
shall supply [ * ] for each Product to be promoted or co-promoted by the Parties
in the Territory in the aggregate, as determined by the JDC. A Party's required
Development effort is hereinafter referred to as its ("Required Development
Effort"). The JDC will determine appropriate written standards for measuring
Required Development Efforts and accounting procedures to confirm and document
each Party's performance of its Required Development Effort for any Product
before the Parties commence Development thereof. No clinical trials involving
any Product shall be commenced by or on behalf of either Party without the prior
approval of the JDC. Nothing contained in this Section 3(d) shall be deemed to
preclude either Party from terminating its participation in the collaborative
Development, pursuant to Section 3(l), at such time. Any decision by a Party not
to participate in development pursuant to Section 3(b) or to terminate
participation in the collaborative Development pursuant to Section 3(l) shall
not be deemed a breach of this Agreement.
e. Development Plan and Development Budget. Promptly following the
designation of a Collaboration Lead Compound pursuant to Section 3(b), the JDC
shall initiate preparation of the development plan for the Development (the
"Development Plan") and a budget (the "Development Budget") for proposed
Development Costs (as defined in Section 3(f)). The initial Development Plan
shall set time lines and priorities for the various Development activities
through [ * ] and identify which Party, or whether a Third Party, is to be
responsible for each activity. The budget for each development program shall
include a detailed short-term budget covering all proposed Development Costs of
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
the program expected during the subsequent [ * ] (the "Short-Term Budget
Period") of the Development process. Both Parties recognize that the Development
Plan and the Development Budget represent projections only and will be subject
to frequent changes. Each such Development Plan and Development Budget shall be
updated as deemed appropriate by the JDC, but in no event less frequently than
[ * ], and approved by the JDC not later than thirty (30) days prior to each
[ * ] of each applicable calendar year.
f. Funding of Pre-Clinical Development and Development. Tularik
shall be responsible for [ * ] of the Development Costs and JT shall be
responsible for [ * ] of such Development Costs. "Development Costs" shall mean
all costs and expenses reasonably charged directly to the Pre-Clinical
Development of any Lead Compound, Collaboration Lead Compound or Development of
any Product, as well as [*] of the functions that [*] such Pre-Clinical
Development or Development (as calculated in accordance with GAAP and using
the same allocation methods that the Party incurring such costs uses
throughout its operations, but in all events excluding [ * ], all as specified
in the Development Plan and the Development Budget. Development Costs shall
consist of the costs of [*] dedicated to such activities [*] and [*] but shall
exclude the costs of [*] to the extent such costs are incurred. Such costs
shall include, without limitation: the [*] for the [*] used in such [*]
including [*] for Regulatory Approval, to the extent [*]); (ii) direct costs
for [*], including, but not limited to, [*] studies [*]; (iii) direct charges
for materials (including [*]; (iv) labor and materials costs incurred in
connection with [*]; and (v) labor and materials costs for the development of
the [*] of such process. In the event the Development Costs incurred by a
Party during any calendar quarter exceed [ * ] of the Development Costs set
forth in the most recently approved Development Budget for activities to be
conducted by such Party during such quarter (the "Overage Threshold"), then
the other Party shall not be responsible for paying [ * ] of any Development
Costs in excess of the Overage Threshold incurred by the Party triggering such
overage unless such overage had been approved in advance, or is subsequently
ratified, unanimously by the JDC (in which case each of the Parties shall be
responsible for [ * ] of all such Development Costs). In the event such
overage has not been approved or ratified unanimously by the JDC, the Party
incurring Development Costs exceeding the Overage Threshold in such quarter
shall be responsible for [ * ] of the Development Costs in excess of the
Overage Threshold.
g. Scientific FTE. In preparing the Development Budget and
determining Development Costs, the Parties will use a rate of [ * ] per
Scientific FTE. "Scientific FTE" means the fully-loaded costs, including [ * ],
but excluding [ * ], of employing a full-time scientific/technical person (or,
in the case of less than a full-time dedicated person, the full-time equivalent
scientific/technical person year) dedicated to the Pre-Clinical Development or
Development for a period of one (1) year, [ * ]. Such rate shall be adjusted
annually (utilizing the cost-breakdown and methodology attached hereto as
Appendix E as the basis for such adjustment) and [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
h. Payment of Development Costs. Each Party shall be responsible for
paying [ * ] Development Costs incurred pursuant to the Development Plan and the
Development Budget as provided in Section 3(f), subject to reimbursement as
provided herein. Within thirty (30) days after each calendar quarter, each Party
shall provide the JDC with detailed information concerning the Development Costs
incurred by such Party during such quarter. Promptly after receipt thereof, the
JDC will determine the amount, if any, which either Party has paid in excess of
the amount to be borne by such Party for such quarter pursuant to Section 3(f)
(an "Overpayment"), and shall so notify the Parties. In the event of an
Overpayment, the other Party shall pay the amount thereof to the Party making
the Overpayment within thirty (30) days after receipt of notice from the JDC
that an Overpayment has occurred.
i. Drug Approval Applications. Consistent with the Development Plan
and Development Budget and as directed by the JDC, the Parties will file
applications for regulatory approval required before commercial sale or use of a
Product as a drug in a country within the Territory ("Drug Approval
Applications") and attempt to obtain regulatory approvals in each country in the
Territory in which the Parties either individually or jointly intend to
commercialize Products. JT will be responsible for filing in its name and shall
own all regulatory submissions relating to Products including, without
limitation, all INDs and NDAs, in each country in the JT Territory, in which
Products will be commercialized. Tularik will be responsible for filing in its
name and shall own all regulatory submissions, including, without limitation,
all INDs and NDAs in each country in the Tularik Territory in which Products
will be commercialized. The JDC will be responsible for designating a Party to
be responsible for filing all regulatory submissions in each country in the Co-
Promotion Territory in which Products will be commercialized. The Party not
responsible for filing regulatory submissions for Products in a country pursuant
to this Agreement shall have a right to cross-reference to all such filings made
by the other Party in any country. The Parties will cooperate in the preparation
of all such regulatory filings and in obtaining Regulatory Approvals under this
Section 3(i).
j. Line Extensions. JT and Tularik may each prepare and submit to
the JDC for consideration plans for development of Product line extensions and
the conduct of clinical trials covering indications other than those for which
Products are being developed or commercialized in the Territory. Any such line
extensions or any additional clinical trials for additional indications will be
subject to the approval and supervision of the JDC as part of the ongoing
Development of such Product.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11.
<PAGE>
k. Compliance. The Parties will comply with all supranational,
federal, state and/or local laws pertaining to the Development and
commercialization of Products.
l. Termination of Participation in Collaborative Development. On a
Collaboration Lead Compound-by-Collaboration Lead Compound basis, either Party
may elect (upon [ * ] written notice following receipt by the Party
contemplating termination of its participation in the Pre-Clinical Development
of any Collaboration Lead Compound or Development of any Product of Development
Termination Documents) to terminate its participation in, or to not to
participate in, the Pre-Clinical Development of any Collaboration Lead Compound
or Development of any Product. "Development Termination Documents" shall mean
the following documents or reports: [ * ]. After receipt of such notice by the
other Party, the Party providing such notice shall no longer be responsible for
bearing further Development Costs for such Collaboration Lead Compound or
Product as specified herein, in which event the other Party will have the right
to proceed independently to develop such Collaboration Lead Compound or Product
as an Independent Lead Compound or Independent Product, pursuant to Section
3(m). In the event a Party gives notice under this Section 3(l), such non-
Independent Party (i) will remain responsible for its share of Development Costs
for such Collaboration Lead Compound or Product until [ * ] from the date the
other Party receives such notice, and (ii) will make its personnel, relevant
data and other resources available to the Independent Party as necessary to
effect an orderly transition of development responsibilities, with the costs of
such personnel, relevant data and resources to be borne by [ * ]. The Parties
each recognize and agree that a non-Independent Party's termination of
participation in Pre-Clinical Development or Development in accordance with this
Section 3(l) will not be considered a breach of its obligations under this
Agreement. In the event of a non-Independent Party's termination of
participation in Development in accordance with this Section 3(l), such non-
Independent Party shall transfer and assign to the Independent Party all
regulatory submissions and Drug Approval Applications relating to such
Collaboration Lead Compound and/or Products based upon or incorporating such
Collaboration Lead Compound, together with all materials and data related
thereto in its possession.
m. Independent Development. (i) In the event (A) a Party, pursuant
to Sections 2(e), 3(b)(ii), (iii) or (iv) elects not to participate in and
commit resources to conduct Pre-Clinical Development of a Collaboration Lead
Compound or the pre-clinical development of a Discontinued Compound or a Non-
Proposed Compound or (B) any Party unilaterally terminates its participation in
the Pre-Clinical Development or Development of a Collaboration Lead
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
12.
<PAGE>
Compound or Product pursuant to Section 3(l), then the Party that made an
affirmative election to conduct such pre-Clinical Development or Development of
such Compound pursuant to Sections 2(e), 3(b)(ii), (iii) or (iv), or the Party
continuing Development of a Collaboration Lead Compound or Development of a
Product (in either case, the "Independent Party"), shall have the right to
practice the license granted in Section 4(c) and to undertake pre-clinical
development of a Lead Compound or to continue Pre-Clinical Development and
Development of such Collaboration Lead Compound or Product independently as an
"Independent Lead Compound" or "Independent Product", [ * ]. No Party may
utilize the services of its personnel committed to the Research Program pursuant
to Section 2(a) in performance of research or development of an Independent Lead
Compound or Independent Product.
(ii) Until the earlier of the Re-Engagement Expiration Date (as
defined in Section 3(n)) or the date on which the Independent Party receives a
Re-Engagement Notice (as defined in Section 3(n)) for a Product from the non-
Independent Party, the Independent Party will (A) inform the other Party of all
material information developed in its research and development of each
Independent Lead Compound or Independent Product; (B) allow such other Party to
comment on the direction of such research and development; and (C) provide the
other Party a copy of all proposed regulatory submissions relating to such
Independent Lead Compound or Independent Product at least [ * ] prior to
submitting such filing to the FDA or its foreign equivalent.
(iii) In the event either Party elects to proceed as an Independent
Party, subject to Section 3(n), such Independent Party shall be entitled to
develop such Independent Lead Compound and commercialize such Independent
Product at its sole discretion, alone or with a Third Party, with no obligation
to the other Party.
n. Re-engagement Option. Either Party may elect to resume its
participation in the Pre-Clinical Development or Development of an Independent
Lead Compound or Independent Product in all countries in the Territory by so
notifying the other Party in writing (the "Re-engagement Notice"), at any time
prior to the expiration of the [ * ] period commencing upon receipt by such
Party of the final report summarizing the results of [ * ] ("Re-Engagement
Expiration Date") for such Independent Lead Compound or Independent Product
anywhere in the world. In such event, such Independent Lead Compound or
Independent Product shall be immediately designated a Collaboration Lead
Compound or Product for all purposes under this Agreement, including calculating
each Party's responsibility for paying Development Costs, Co-Promotion Expenses
and
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13.
<PAGE>
Promotion Expenses and receiving the Share of Co-Promotion Profit and
Royalty Payment commencing upon receipt of the Re-engagement Notice. The non-
Independent Party shall pay to the Independent Party [ * ] of the non-
Independent Party's share, based on the allocation set forth in Section 3(f), of
the costs [ * ] of the Independent Lead Compound or Independent Product incurred
by the Independent Party after the date upon which it commenced development or
research of such compound or product as an Independent Lead Compound or
Independent Product and prior to the date of the Re-engagement Notice (the "Re-
Engagement Amount"). The non-Independent Party shall pay the Re-Engagement
Amount in [ * ] beginning on the first day of the calendar quarter following the
date of the election of the non-Independent Party. The Independent Party may
not sublicense intellectual property rights owned or controlled by the
Independent Party that relate to Independent Lead Compound or Independent
Product to any Third Party without the consent of the non-Independent Party
prior to the Re-Engagement Expiration Date for such Independent Lead Compound or
Independent Product. Anything in this Section 3(n) to the contrary
notwithstanding: (i) JT may resume its participation in the Pre-Clinical
Development or Development of an Independent Lead Compound or Independent
Product in the JT Territory (but not the Co-Promotion Territory or the Tularik
Territory) by (a) delivering to Tularik a Re-engagement Notice to that effect
prior to the Re-Engagement Expiration Date; [ * ]; and (ii) Tularik may resume
its participation in the Pre-Clinical Development or Development of an
Independent Lead Compound or Independent Product in the Tularik Territory (but
not the Co-Promotion Territory or the JT Territory) by (a) delivering to JT a
Re-engagement Notice to that effect prior to the Re-Engagement Expiration Date;
[ * ]. In the event a Party resumes participation in the Pre-Clinical
Development or Development of an Independent Lead Compound or Independent
Product in such Party's Exclusive Territory only, such Party shall not receive [
* ].
4. Licenses and Royalties.
a. Grant by Tularik. Subject to the terms and conditions of this
Agreement, Tularik hereby grants and agrees to grant to JT: (i) an exclusive
(except as to Tularik) license (with the right to sublicense as provided in this
Section 4(a)) under the Program Patents, Program Know-How, Patent Rights and
Know-How owned or controlled by Tularik during the Term to the extent necessary
or useful to develop, make, have made, use, import, offer for sale and sell any
Product in the Co-Promotion Territory; and (ii) an exclusive (even as to
Tularik) license (with the right to sublicense as provided in the Section 4(a))
under the Program Patents, Program Know-How, Patent Rights and Know-How owned or
controlled by Tularik to the extent necessary to develop, make, have made, use,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
14.
<PAGE>
import, offer for sale and sell any Product in the JT Territory. JT may not
sublicense any rights granted under this Section 4(a) in the Co-Promotion
Territory to any Third Party without the prior written consent of Tularik, not
to be unreasonably withheld. JT may sublicense any rights granted under this
Section 4(a) in the JT Territory to any Third Party without the prior written
consent of Tularik, with any such sublicenses subject to the payments set forth
in this Agreement. JT shall use reasonable efforts to ensure that any
sublicense negotiated by JT pursuant to this Section 4(a)(ii) shall: (A) [ * ];
and (B) provide that any revenues or other consideration received from such
sublicensee as consideration for the grant of such sublicense in the JT
Territory, [ * ], shall be [ * ] and paid directly to each Party by such
sublicensee.
b. Grant by JT. Subject to the terms and conditions of this
Agreement, JT hereby grants and agrees to grant to Tularik: (i) an exclusive
(except as to JT) license (with the right to sublicense as provided in this
Section 4(b)) under the Program Patents, Program Know-How, Patent Rights and
Know-How owned or controlled by JT during the Term to the extent necessary to
develop, make, have made, use, import, offer for sale and sell any Product in
the Co-Promotion Territory; and (ii) an exclusive (even as to JT) license (with
the right to sublicense as provided in this Section 4(b)) under the Program
Patents, Program Know-How, Patent Rights and Know-How owned or controlled by JT
during the Term to the extent necessary to develop, make, have made, use,
import, offer for sale and sell (with the right to sublicense as provided in
this Section 4(b)) any Product in the Tularik Territory. Tularik may not
sublicense any rights granted under this Section 4(b) to any Third Party in the
Co-Promotion Territory without the prior written consent of JT, not to be
unreasonably withheld. Tularik may sublicense any rights granted under this
Section 4(b) to any Third Party in the Tularik Territory without the prior
written consent of JT, with any such sublicenses subject to the payments set
forth in this Agreement. Tularik shall use reasonable efforts to ensure that
any sublicense negotiated by Tularik pursuant to this Section 4(b)(ii) shall:
(A) [ * ]; and (B) provide that any revenues or other consideration received
from such sublicensee as consideration for the grant of such sublicense in the
Tularik Territory, [ * ], shall be [ * ] and paid directly to each Party by such
sublicensee.
c. Independent Products. Each of JT and Tularik hereby grants to
the other Party an exclusive, royalty-bearing (in accordance with Section 4(f)),
worldwide license (with the right to sublicense after the Re-Engagement
Expiration Date shall have passed without the non-Independent Party having given
a Re-Engagement Notice) under the Program Patents and Program Know-How, and a
non-exclusive, royalty-bearing (in accordance with Section 4(f)), worldwide
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15.
<PAGE>
license (with the right to sublicense after the Re-Engagement Expiration Date
shall have passed without the non-Independent Party having given a Re-Engagement
Notice) under the Patent Rights and Know-How owned or controlled by the granting
Party to the extent necessary to develop Independent Lead Compounds and to make,
have made, use, import, offer for sale and sell Independent Products
incorporating an Independent Lead Compound in the event such Party is designated
the Independent Party with respect to such Independent Product (or Independent
Lead Compound) pursuant to Section 3(m). Such licenses under the non-
Independent Party's interest in Program Patents and Program Know-How are
exclusive even as to the granting Party. Any such license with respect to an
Independent Product or Independent Lead Compound shall terminate in the event
such Independent Product or Independent Lead Compound becomes a Collaboration
Lead Compound or Product pursuant to the terms of Section 3(n).
d. Third Party Technology. During the Term, if either Party becomes
aware of (i) an opportunity to participate in research with a Third Party that
could advance the objectives of the Research Program; or (ii) an opportunity to
obtain a license or other right owned or controlled by a Third Party relating to
the manufacture, marketing, import, use or sale of a Product ("Third Party
Rights"), it shall so notify the other Party and the RMC will determine whether
to pursue such opportunity in connection with the Research Program. In the
event that the Parties pursue such opportunity and in connection therewith incur
obligations to make payments to a Third Party, such payments shall [ * ].
e. Use Outside the Field. Each Party hereby covenants to the other
that it will not practice the license granted to it pursuant to Section 4 under
the other Party's interest in Patent Rights, Know-How, Program Patents or
Program Know-How, except as explicitly permitted in this Agreement.
f. Royalties Payable by the Independent Party. Except as provided in
Section 5(c), the Independent Party will pay the non-Independent Party, in lieu
of any Share of Co-Promotion Profits and Royalty Payments, a royalty equal to:
(i) [ * ] of Net Sales of Independent Products by the Independent Party, its
affiliates or sublicensees in the event the non-Independent Party terminates
participation in the Pre-Clinical Development of a Collaboration Lead Compound
pursuant to Section 3(l) prior to the submission of an IND on such Independent
Product; (ii) [ * ] of Net Sales of Independent Products by the Independent
Party, its affiliates or sublicensees in the event the non-Independent Party
terminates participation in the Pre-Clinical Development of a Collaboration Lead
Compound pursuant to Section 3(l) upon or following the submission of an IND on
such Independent Product but prior to the end of the first Phase I clinical
trial on such Product; or (iii) [ * ] of Net Sales of Independent Products by
the Independent Party, its affiliates or sublicensees in the event the non-
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
16.
<PAGE>
Independent Party terminates participation in the Pre-Clinical Development of a
Collaboration Lead Compound or Development of a Product pursuant to Section 3(l)
following the end of the first Phase 1 clinical trial. Such royalty shall be
payable on a quarterly basis in respect of each country in which sales occur
until the later of expiration of all patents included in the Program Patents and
Patent Rights necessary to make, use, import for sale or sell such Product in
such country, or [ * ] years after first commercial sale of an Independent
Product in such country. "Net Sales" shall mean the gross sales prices of the
Product in finished product form, invoiced by a Party or the Independent Party,
as the case may be, its affiliates and sublicensees from sales to arms'-length
Third Party end users, less, to the extent such amounts are included in the
invoiced sales price, taxes, shipping costs (including freight and insurance)
and duties and other governmental charges paid for and separately identified on
the invoice. Additionally, the following amounts will be subtracted from the
gross invoiced sales price: (i) cash, trade and/or quantity discounts actually
allowed; (ii) amounts repaid or credited by reason of rejection or return of
goods; (iii) volume or formal discount amounts paid or credited to a wholesaler,
purchaser, Third Party payor or other contractee as a result of a contractual
arrangement specific to a Product; (iv) rebates paid or credited to any
governmental agency (or branch thereof) or to any Third Party payor,
administrator or contractee; and (v) discounts mandated by, or granted in
response to, applicable state, provincial or federal law, wholesaler chargebacks
or retroactive price reductions. The Independent Party may offset [ * ] of any
royalties it must pay to Third Parties pursuant to any licenses necessary to
commercialize Products against royalties payable by the Independent Party to the
non-Independent Party; provided, however, that in no event shall the royalties
payable by the Independent Party to the non-Independent Party be reduced to less
than [ * ] of the amounts that would have otherwise been due under the
percentages set forth in this Section 4(f).
Section 5. Promotion of Products.
a. Promotion Rights in the Exclusive Territory. JT shall have the
exclusive responsibility for promoting each Product in the JT Territory.
Tularik shall have the exclusive responsibility for promoting each Product in
the Tularik Territory. All information and materials generated by a Party in
the course of the promotion effort within any country in such Party's Exclusive
Territory or in the Co-Promotion Territory shall be provided to the MC for use
in the promotion effort within the other Party's Exclusive Territory and in the
Co-Promotion Territory.
b. Commercialization in the Exclusive Territories. JT shall oversee
and implement all commercialization activities in the JT Territory during
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
17.
<PAGE>
the Term, based on the principle of maximizing profits from sales of Products.
Tularik shall oversee and implement all commercialization activities in the
Tularik Territory during the Term, based on the principle of maximizing profits
from sales of Products. The MC shall review a Party's commercialization
activities within its Exclusive Territory to provide suggestions for
facilitating the promotion and commercialization of Products on a global basis.
c. Election or Revocation of Co-Promotion Right. In the Co-
Promotion Alternative (as defined in Section 5(d)(ii)), either Party may
terminate early its participation in the co-promotion of a Product in any
country in the Co-Promotion Territory at any time following [ * ] prior written
notice to the other Party. In such case, the other Party may continue promotion
of such Product, as an Independent Product, either alone or with a Third Party,
in such country in the Co-Promotion Territory, effective as of the date of the
terminating Party's notice hereunder. The Parties shall negotiate in good faith
for a period of [ * ] following the receipt of such notice to determine the
appropriate royalty to be paid on Net Sales of such Independent Product in such
country in the Co-Promotion Territory. In the event the Parties are unable to
agree on the appropriate royalty pursuant to the immediately preceding sentence,
the Independent Party with respect to such Independent Product shall pay to the
other Party a royalty on Net Sales of such Independent Product in such country
in the Co-Promotion Territory pursuant to Section 4(f), except that the
applicable royalty shall equal: [ * ] on the portion of aggregate Net Sales of
such Independent Product in such country up to [ * ] on the portion of aggregate
Net Sales of such Independent Product in such country in excess of [ * ]; and [
* ] on the portion of aggregate Net Sales of such Independent Product in such
country in excess of [ * ]. In the event a Party elects to cease participating
in the co-promotion of a Product of such Independent Product in a country in the
Co-Promotion Territory and the Independent Party proceeds to commercialize such
Product as an Independent Product, the non-Independent Party shall (i) transfer
and assign to the Independent Party all regulatory submissions and Drug Approval
Applications in such country relating to such Collaboration Lead Compound and/or
Products based upon or incorporating such Collaboration Lead Compound, together
with all materials and data related thereto in its possession and (ii) transfer
to the Independent Party all other relevant information that will enable such
Independent Party to promote such product as an Independent Product in such
country. A non-Independent Party may not reinitiate its participation in the
co-promotion of a Product in any given country in the Co-Promotion Territory in
which it relinquished such right hereunder.
d. Promotion Rights in the Co-Promotion Territory. (i) The MC shall
oversee and implement all commercialization activities in the Co-
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
18.
<PAGE>
Promotion Territory during the Term, based on the principle of maximizing
profits from sales of Products, by unanimous decisions. The MC shall have the
ability to determine whether the objective of maximizing profits from sales of
Products in the Co-Promotion Territory during the Term is best achieved through,
inter alia, [ * ]. In the event the MC determines that the foregoing objective
is best achieved by activities other than as provided in Sections 5(d)(ii), (e),
(f), (g) and (h), the MC shall determine [ * ] the optimal alternative structure
and the duties, responsibilities and economic parameters for the Parties and
Third Parties in such alternative structure. The Parties shall use reasonable
efforts to ensure that any sublicense negotiated by a Party or the Parties
pursuant to Section 4(a)(i) or 4(b)(i) shall: (a) [ * ]; and (b) provide that
any revenues or other consideration received from such sublicensee as
consideration for the grant of such sublicense in the Co-Promotion Territory,
less [ * ], shall be [ * ] and paid directly to each Party by such
sublicensee.
(ii) In the absence of [ * ] by the MC pursuant to Section 5(d)(i) or
in the event of a [ * ] by the MC to retain for the Parties commercialization
rights to a Product in the Co-Promotion Territory (the "Co-Promotion
Alternative"), JT and Tularik shall have the co-exclusive responsibility for
promoting such Product in the Co-Promotion Territory. Tularik and JT shall each
work diligently to perform its respective obligations under the Marketing Plan
and use the same effort such Party puts forth to promote other products of
similar commercial value to co-promote such Product in the Co-Promotion
Territory from initiation of pre-launch activities for such Product in the Co-
Promotion Territory until the expiration of the Term pursuant to the terms and
conditions hereof. The Parties intend that [ * ] shall supply [ * ] of the
total promotional and marketing effort (including details, if determined to be
an appropriate sales activity for a Party by the MC) for each Product being co-
promoted by the Parties in the Co-Promotion Territory, as determined by the MC.
Each Party's required promotional and marketing effort under the Marketing Plan
is hereinafter referred to as its "Required Sales Effort". The MC will
determine appropriate written standards for measuring and accounting procedures
to confirm and document each Party's performance of its Required Sales Effort,
one (1) month after the filing of the NDA for any Product. Nothing contained in
this Section 5(d) shall be deemed to preclude either Party from relinquishing
its right to participate in the co-promotion of Products in the Co-Promotion
Territory pursuant to Section 5(c), at any time. Any failure to provide the
Required Sales Effort shall not be deemed a breach of this Agreement.
e. Marketing Plan and Marketing Budget in the Co-Promotion
Territory. In the Co-Promotion Alternative, no later than one (1)
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
19.
<PAGE>
month after [ * ], the MC shall initiate preparation of a marketing plan
("Marketing Plan") and a marketing budget ("Marketing Budget"). The co-promotion
of a Product in the Co-Promotion Territory will be governed by the Marketing
Plan and Marketing Budget. The Marketing Plan and Marketing Budget will describe
fully, to the extent practicable, the proposed plan for commercialization of the
Product in each country in the Co-Promotion Territory, including overall
marketing strategy, marketing, sales and promotion efforts to be performed by
each Party, market and sales forecasts, pricing and discounting analysis and
estimated launch date, as well as advertising and other promotional materials
to be used in the co-promotion of Products. The Marketing Plan will take into
consideration to be used in the co-promotion of Products. The Marketing Plan
will take into consideration market conditions, regulatory factors and
competition with respect to Products. The Marketing Budget will include all
projected Co-Promotion Expenses for the Product. The initial Marketing Plan and
Marketing Budget shall be prepared by the MC no later than [ * ] the first
filing of an NDA (or its foreign equivalent) for a Product in any country in the
Co-Promotion Territory. Each such Marketing Plan and Marketing Budget shall
thereafter be updated by the MC [ * ].
f. Promotional and Advertising Materials in the Co-Promotion
Territory. In the Co-Promotion Alternative, the Parties shall disseminate in the
Co-Promotion Territory only those promotional and advertising materials that
have been provided or approved for use by the MC, and the cost of producing such
materials shall be a Co-Promotion Expense of the Party incurring such cost. All
such materials shall be consistent with the relevant Marketing Plan and
Marketing Budget approved by the MC and neither Party shall make any claims or
representations in respect of the Products that have not been approved by the
MC. In all written or visual materials related to Products that identify either
of the Parties, the Parties will be presented and described to the medical
communities (including, for example, the physician, pharmacy, governmental,
reimbursement and hospital sectors) as joining in the promotion of the Product
as permitted by applicable law. All such written and visual materials and all
documentary information, promotional material and oral presentations (where
practical) regarding the promotion of the Product will state this arrangement
and will display the JT and Tularik names and logos with equal prominence as
permitted by applicable law and as directed by the MC.
g. Miscellaneous. In the Co-Promotion Alternative, the MC shall by
unanimous decision designate a Party as being primarily responsible in the Co-
Promotion Territory for returns, orders and samples. In addition, the MC shall
by unanimous decision determine the policies and procedures necessary to
implement the foregoing.
Section 6. Determination of Payments.
a. Co-Promotion Expenses. In the Co-Promotion Alternative, Tularik
shall be responsible for paying [ * ] of all Co-Promotion Expenses and JT shall
be responsible for paying [ * ] of all Co-Promotion Expenses. "Co-Promotion
Expenses" shall include, without limitation, the following expenses
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
20.
<PAGE>
incurred by a Party to the extent allocable to the co-promotion of Products in
all countries in the Co-Promotion Territory, calculated in accordance with U.S.
Generally Accepted Accounting Practices, consistently applied ("GAAP"): [ * ],
all as defined in Appendix D.
b. Co-Promotion Profits and Losses. In the Co-Promotion
Alternative, profits and losses shall be determined as follows. If Net Sales
during any calendar quarter exceed Co-Promotion Expenses during such quarter,
such excess shall be "Co-Promotion Profit." If the Net Sales during any calendar
quarter does not exceed Co-Promotion Expenses during such quarter, such excess
shall be "Co-Promotion Loss." Subject to adjustment pursuant to Section 10(e), [
* ].
c. Payment and Reporting. In the Co-Promotion Alternative, payments
and reporting shall be made as follows. Within [ * ] after the close of each
calendar quarter in which Products are sold in the Co-Promotion Territory, or
earlier if possible, during the Term (i.e., [ * ]), Tularik shall furnish to JT
a statement containing the Net Sales achieved, and the Co-Promotion Expenses
incurred, by it in such calendar quarter for each country in the Co-Promotion
Territory. Within [ * ] after the close of each calendar quarter in which
Products are sold, or earlier if possible, during the Term (i.e., [ * ]), JT
shall furnish to Tularik a statement (the "P&L Statement") setting forth for
each country in the Co-Promotion Territory, Net Sales of each Product, Co-
Promotion Expenses and all data on which the determination of each Party's Share
of Co-Promotion Profit or Share of Co-Promotion Loss was calculated. If either
Party owes an amount to the other Party pursuant to Section 6(a) or 6(b), it
shall make such payment within [ * ] after receipt of the P&L Statement, but in
no event shall such payment be due earlier than [ * ] after the end of the
relevant quarter. If the Term ends during an accounting quarter, the amounts
due hereunder shall be calculated for such shortened calendar quarter.
d. Promotion Expenses in the Exclusive Territory. "Promotion
Expenses" shall include, without limitation, the following expenses incurred by
a Party to the extent allocable to promotion of the Product in all countries
within such Party's Exclusive Territory in accordance with GAAP: [ * ], as
defined in Appendix D.
e. Royalty Rate. At least [ * ] prior to the commencement of sales
of Product in any country within a Party's Exclusive Territory, such Party
("Marketing Party") shall provide the other Party ("Non-Marketing Party") with
its good faith estimates ("Estimates") of [ * ] expected in all countries within
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
21.
<PAGE>
the Marketing Party's Exclusive Territory during the remaining portion of the
fiscal year in which sales of such Product are commenced, on a quarterly basis.
In addition, the Marketing Party shall at the same time provide the Royalty Rate
(as defined in Section 6(f)) calculated pursuant to Section 6(f) using the
Estimates. The Marketing Party shall also provide supporting information
appended to the Estimates, clearly setting forth the assumptions made and
calculations used in deriving the Royalty Rate (the "Supporting Calculations").
At least [ * ] prior to the beginning of each [ * ], the Marketing Party shall
provide the Non-Marketing Party with its Estimates for [ * ], together with the
Supporting Calculations.
f. Calculation of Royalty Rate. The "Royalty Rate" shall be equal
to [ * ]; provided, however, that the Royalty Rate shall be equal to [ * ]
("Pre-Tax Loss").
g. Meetings to Discuss Estimates. The Non-Marketing Party may call
a meeting of the Parties to review and discuss in good faith the Estimates and
the Supporting Calculations (including the resulting Royalty Rate). Such
meeting shall be held at a mutually agreeable time and place not more than [ * ]
after notice is given by the Non-Marketing Party. In the event that the Non-
Marketing Party disagrees with the Estimates, the attending representatives of
both Parties will enter into good faith discussions to resolve the disagreement.
In the event that the attending representatives are unable to reach an
agreement, then the issue shall be referred to the MC for unanimous resolution.
h. Royalty Payments. Within [ * ] of the end of each fiscal quarter
following the commencement of sales of a Product in the Marketing Party's
Exclusive Territory, the Marketing Party shall pay a royalty to the Non-
Marketing Party equal to [ * ] during such quarter (the "Royalty Payment").
i. Audited Report of Actual Net Sales, Cost of Goods and Promotion
Expenses. Within [ * ] following [ * ], or earlier if possible, the Marketing
Party shall provide the Non-Marketing Party with an audited report of actual Net
Sales and Cost of Goods in all countries within the Marketing Party's Exclusive
Territory and Promotion Expenses in all such countries ("Actual Results").
j. Royalty Adjustment. In the event that the Actual Results include
a Pre-Tax Loss in the year of commencement of sales of a particular Product or
in any subsequent fiscal year, [ * ] of such loss shall be deducted from future
Royalty Payments otherwise owed by the Marketing Party to the Non-
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
22.
<PAGE>
Marketing Party with respect to such Product pursuant to Section 6(f), until
such loss is fully liquidated.
k. Records. JT and Tularik each shall keep accurate books and
accounts of record in connection with the manufacture, use and/or sale by or for
such Party of all Products and Independent Products in the Territory in
sufficient detail to permit accurate determination of all figures necessary for
verification of royalties, profits, milestone payments and other compensation
required to be paid hereunder. JT and Tularik shall maintain such records for a
period of 3 years after the end of the year in which such records were
generated. At such Party's expense, a Party, through a certified public
accountant reasonably acceptable to the other Party, shall have the right to
access the books and records of the other Party for the sole purpose of
verifying amounts due pursuant to this Agreement. Such access shall be permitted
only upon reasonable prior written notice to the other Party during ordinary
business hours and not more frequently than once during each calendar year.
Section 7. Trademarks. The Parties, through the MC, shall mutually agree
upon the trademark or trademarks (each a "Trademark"). To the extent
commercially reasonable and appropriate, a single Trademark shall be used for
each Product in each country in the Territory. To the extent the MC determines
that the use of a single Trademark is impractical given cultural and other
differences among countries in the Co-Promotion Territory, each Party shall have
the right to designate a different Trademark for use within different countries
within the Territory; provided, however, that in no event shall different
-------- -------
Trademarks be used for the same Product within the same country in the
Territory. Each Party shall have the right to designate a different Trademark
for use within different countries within such Party's Exclusive Territory.
Each Trademark shall be used only in connection with the applicable Product and
shall not be used by either Party on or in connection with any other product.
The MC shall assign responsibility to one or both Parties for searching,
clearing, filing, prosecuting, maintaining and all reasonable steps necessary in
defending each Trademark. The MC shall approve all trade dress, logos, slogans,
designs and copyrights used on and in connection with any Product in the
Territory. During the Term, the MC shall approve all printed materials bearing
each Trademark, including but not limited to business materials, printed
materials, advertising materials, promotional materials and any such other
materials that may reference or incorporate such Trademark. In the event that
any action or proceeding is brought against either or both JT or Tularik, any
alleged infringement of a Third Party's trademark, trade dress or similar
intellectual property rights, each Party shall promptly notify the other and
cooperate in the defense of any such action or proceeding, as applicable. The
MC shall be responsible for the management of such action. In the event
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
23.
<PAGE>
Tularik or JT becomes aware of any actual or threatened violation of any
Trademark in any country in the Territory, that Party shall promptly notify the
other Party and the MC shall promptly discuss how to proceed in connection with
such actual or threatened violation.
Section 8. Supply Of Product.
a. Supply of Product. The JDC shall be responsible for determining
the sources of, and arrangements for, the manufacture and supply of Products
that the JDC believes will result in long-term profit maximization for such
Products. The JDC shall endeavor to [ * ].
b. Specifications for Products. The Parties shall designate one of
the Parties to be responsible for establishing, subject to approval by the MC,
the specifications for bulk and finished Product, and providing any necessary
documentation, certificates of analysis and test results, for the relevant
Product to be manufactured under this Section 8. Copies of all such
specifications and other information and documentation will be provided promptly
to the Parties. In addition, notice of, and results and data from, all FDA (or
its foreign equivalent) audits relating to the manufacture of Product will be
provided to the Parties. The Cost of Goods (including qualification batches for
FDA (or its foreign equivalent) approval) for Products actually used (and not
sold) for all Pre-Clinical Development and Development studies shall be included
in Development Costs.
c. Terms of Manufacture and Supply. The MC shall establish
procedures acceptable to both Parties regarding forecasts of requirements of the
Products.
Section 9. Regulatory Matters.
a. Side Effects and Adverse Events. During the Term, each Party
shall promptly advise the other by telephone, telefax or overnight delivery
service of every serious or unexpected side effect, adverse reaction or injury
that has been brought to that Party's attention and which is alleged to have
been caused by a Product. For each country in the Territory, the Party that has
the responsibility for filing the Drug Approval Application and the IND (or
foreign equivalent) in such country for such Product shall have all rights and
responsibilities to report such side effect, adverse reaction or injury to the
appropriate regulatory authorities as required by applicable law.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
24.
<PAGE>
b. Communication with Regulatory Agencies. If a Party is contacted
by the FDA or any equivalent regulatory agency in any country in the Territory
during the Term pertaining to this Agreement or to a Product, Tularik and JT
shall promptly, but always within [ * ] days, notify and consult with one
another. The Party that has filed the Drug Approval Application in such country
within the Territory or, if no Drug Approval Application has been filed, the
Party which has filed the IND (or foreign equivalent) in such country within the
Territory shall provide an appropriate response to such contact after such
consultation with the other Party.
c. Product Recall. In the event that JT or Tularik determines that
an event, incident or circumstance has occurred that may result in the need for
a recall or other removal of any Product or any lot or lots thereof from the
market in a country within the Territory, it shall promptly advise and consult
with the other Party with respect thereto. Thereafter, on a country-by-country
basis, the owner of the NDA for such Product in a country (or foreign
equivalent) shall, in its sole discretion, have the right to order a recall or
other removal after such consultations and the other Party shall co-operate with
such recall.
10. Financial provisions.
a. Research Payments. In support of Tularik's activities in the
Research Program, JT shall pay Tularik (i) [ * ] and, unless the Research
Program is previously terminated as provided in Section 2(g), [ * ]. Any
payments made by JT to Tularik pursuant to this Section 10(a) shall not affect
in any way the calculation of [ * ].
b. Milestone Payments. JT shall pay to Tularik [ * ] within [ * ]
after the dates upon which JT confirms that Tularik has [ * ]; provided,
however, that [ * ]; provided further that [ * ]. In addition, JT will make the
following payments to Tularik in US Dollars within [ * ] of the occurrence of
each event listed below in [ * ]:
Event Payment
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
25.
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In the event all of the listed events above are not achieved by a Collaboration
Lead Compound or Product, any listed events not achieved by such Collaboration
Lead Compound or Product shall be available to other Collaboration Lead
Compounds or Products until such time as each of the listed events has been
achieved [ * ].
c. Taxes. The burden of all withholding or similar taxes that may
be imposed by any governmental authority on milestone, royalty and profit share
payment amounts set forth in this Agreement shall be [ * ].
d. Reports. Tularik shall provide JT with a quarterly report
describing Tularik's use of the annual payments received from JT pursuant to
Section 10(a) for research purposes. Such report shall include the following
two categories of expenditures: (i) "Personnel Costs" and (ii) "Other Costs."
e. Loans from JT. JT will make available to Tularik, under and subject
to certain additional terms and conditions as provided in a loan agreement to be
executed by the Parties on the Execution Date ("Loan Agreement"), an irrevocable
loan commitment to finance an aggregate amount of up to $20 million (the
"Aggregate Commitment"); provided, however, JT shall not be required to finance
any portion of the Aggregate Commitment that has not previously be disbursed in
the event this Agreement terminates pursuant to Article 13 hereof. The Aggregate
Commitment shall be used by Tularik to finance the portion of Development Costs
to be borne by Tularik for [ * ] clinical trials (or equivalent) pursuant to
this Agreement and the agreement to be executed between Tularik and JT
concerning the Tularik obesity program (the "Obesity Agreement"), commencing
with initiation of Phase 2 clinical trials (or equivalent) (the "Eligible
Development Costs"). Such Aggregate Commitment may be drawn in multiple
disbursements in amounts ("Amounts Drawn") and at times ("Funding Dates")
requested by Tularik to: pay for those [ * ] that are payable within the [ * ]
as estimated by the [ * ]; and (ii) [ * ] JT for an [ * ] made by JT and payable
by Tularik pursuant to Section [ * ]; provided, however, that no more than [ * ]
of such Aggregate Commitment may be Amounts Drawn to finance [ * ] Collaboration
Lead [ * ] (or equivalent under the Obesity Agreement); provided further that in
no event may there be Amounts Drawn on more than two (2) Collaboration Lead
Compounds or resulting Products (or equivalent under the Obesity Agreement).
Loans made by JT to Tularik pursuant to such Loan Agreement for a Collaboration
Lead Compound or resulting Product shall provide for the annual repayment of
Amounts Drawn on such Collaboration Lead Compound or resulting Product, and
interest accrued on such Amounts Drawn, over a five-year period ("Repayment
Dates") commencing on the first anniversary of the first to occur of: the [ * ]
of the Product resulting from such Collaboration Lead Compound; or (ii) a [ * ]
the JDC to [ * ] such Collaboration Lead Compound or resulting Product. Interest
on Amounts Drawn shall accrue from the Funding Dates to the Repayment Dates and
shall equal the sum of the then-prevailing 5-year: (A) [ * ]; and (B) the [ * ];
divided by (ii) [ * ]. In addition, Tularik's Share of Co-Promotion Profit and
its Royalty Rate with respect to the Tularik Territory for a Product for which
Tularik shall have Amounts Drawn pursuant to the Loan Agreement shall [ * ]. In
addition to the foregoing, during the [ * ] period immediately following the
receipt by the Parties of executed reports covering all aspects of completed
Phase [ * ] clinical trials on a Product, JT and Tularik shall negotiate in good
faith the terms and conditions under which JT may [ * ] the Aggregate
Commitment, and the definition of Eligible Development Costs, to include
Development Costs to be incurred in [ * ].
11. Intellectual Property. Each Party shall remain the sole owner or
licensee, as applicable, of all technology, compounds, discoveries and
inventions owned or controlled by such Party on the Agreement Date and shall
have no rights in or to those owned by the other Party except as specifically
granted herein. All inventions or discoveries made, and materials and
information created, jointly by employees, agents or consultants of both Parties
in the course of
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
26.
<PAGE>
conducting activities pursuant to this Agreement shall be jointly owned, without
regard, in the case of inventions or discoveries relating to Lead Compounds,
Collaboration Lead Compounds and Products, to which Party provided the compound
library from which such invention or discovery was derived. All inventions or
discoveries made, and materials and information created solely by employees,
agents or consultants of one Party in the course of conducting activities
pursuant to this Agreement shall be owned solely by the Party whose employees,
agents or consultants made such invention, without regard, in the case of
inventions or discoveries relating to Lead Compounds, Collaboration Lead
Compounds and Products, to which Party provided the compound library from which
such invention or discovery was derived. Inventorship shall be determined in
accordance with the U.S. patent laws. [ * ].
12. Confidential Information. Each Party agrees that proprietary and
confidential information regarding either Party's technology and intellectual
property, as well as information regarding the Research Program, Lead Compounds,
Collaboration Lead Compounds, Products and other matters material to this
Agreement or to the Collaboration Agreement shall not be disclosed to any Third
Party or used except as permitted hereby during the term hereof and for a period
of five (5) years after its expiration or termination, except to the extent it
can be shown by competent written record that such information is now or
subsequently becomes, without breach of any obligation by the Party receiving
such information hereunder, public knowledge or is lawfully disclosed to or
independently developed by such Party. Any information disclosed to a Scientific
FTE of one Party who is resident with the other Party shall be deemed the
confidential information of the Party with whom such Scientific FTE is in
residence.
13. Term. This Agreement shall expire upon the earlier of the execution
of the Collaboration Agreement or the end the Term. "Term" shall mean the
period from the Agreement Date until the later to occur of (i) the expiration of
all patents on Products; or (ii) [ * ]; provided, however, that [ * ]. Either
Party may terminate this Agreement for material breach by the other Party, if
such breach remains uncured for [ * ] after the breaching Party receives written
notice thereof from the other Party. Except to the extent required by law, the
Parties agree not to disclose the material terms of this Agreement to Third
Parties (other than its affiliates) without the other Party's prior written
consent during its term and after its expiration or termination. In the event
this Agreement expires or terminates and the Collaboration Agreement shall not
have been executed by the Parties, then the provisions of Sections 4, 10, 11 and
12 shall survive such expiration or termination and each Party shall return
promptly any of the other
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
27.
<PAGE>
Party's confidential information and biological or chemical materials provided
to it pursuant to this Agreement.
14. Diligence. Subject to Section 3(c), 3(l) and 3(m), JT and/or Tularik
shall use commercially reasonable efforts to develop the Lead Compounds and
Collaboration Lead Compounds consistent with the efforts such Party expends on
compounds involved in its other research and development programs that have
comparable market potential. Subject to Section 5(c), JT and/or Tularik shall
use commercially reasonable efforts to develop and market Products, consistent
with the efforts it expends on its other products having comparable market
potential. If a Party disagrees on whether the other Party's actions are
commercially reasonable, such disagreement shall be resolved in accordance with
Section 19.
15. Representations and Warranties. Each Party hereby represents and
warrants that such Party has full corporate power and authority under the laws
of the state or country of its incorporation to enter into this Agreement and
carry out the provisions hereunder and that the person executing this Agreement
on each Party's behalf has been duly authorized to do so by all requisite
corporate action.
a. Each Party represents and warrants that, as of the date of this
Agreement, it is not a Party to any agreement, arrangement or understanding with
any Third Party that in any significant way prevents such Party from fulfilling
any of its material obligations under the terms of this Agreement.
b. Each Party covenants that it will not commit any acts or fail to
take any action that would be in material conflict with its obligations under
this Agreement.
c. Each Party represents and warrants to such Party's best knowledge
as of the date of this Agreement: [ * ].
d. Each Party represents and warrants that [ * ].
16. Binding Agreement. Each Party represents this Agreement is a legal
and valid obligation, binding upon it and enforceable in accordance with its
terms. Each Party represents it has not and will not during the term of this
Agreement grant any right to any Third Party that would conflict with the rights
granted to the other Party hereunder.
17. Provisions to be Included. The Collaboration Agreement shall include
the terms specified in this Agreement and other terms customary in the
pharmaceutical industry for agreements governing the research, development and
commercialization of pharmaceutical products including, without limitation,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
28.
<PAGE>
enforcement of Program Patents, defense against Third Party claims of
infringement, payments, information and reports, indemnification, relationship
of the Parties, assignments, notices, amendments, waiver, counterparts, force
majeure, headings, governing law, language, entire agreement and public
announcements.
18. Severability. If any part of this Agreement is declared invalid by
any legal authority having jurisdiction over either Party, then such declaration
shall not affect the remainder of the Agreement, which shall continue in full
force and effect. The Parties shall revise the invalidated part in a manner
that will render such provision valid and closely approximate the Parties'
original intent.
19. dispute resolution. In the event of any controversy or claim arising
out of, relating to or in connection with any provision of this agreement, the
Parties shall try to settle their differences amicably between themselves by
referring the disputed matter to the committee(s) provided in Article 1. Any
unresolved disputes arising between the Parties arising out of, relating to, in
connection with or in any way connected with this Agreement or any term or
conditions hereof, or performance by either Party of its obligations hereunder,
whether before or after termination or expiration of this Agreement, shall be
finally resolved by binding arbitration, except that any disputes regarding the
validity, scope or enforceability of patents shall be submitted to a court of
competent jurisdiction. The arbitration shall be held in San Francisco,
California according to the rules of the American Arbitration Association
("AAA"). The arbitration will be conducted by a panel of three (3) arbitrators
with significant experience in the pharmaceutical industry appointed in
accordance with applicable AAA rules. Any arbitration herewith shall be
conducted in the English language to the maximum extent possible. Each Party
shall bear its own costs and attorney's and witness' fees. Judgment on the award
so rendered shall be final and may be entered in any court having jurisdiction
thereof.
20. Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their permitted successors and assigns;
provided, however, that neither Party shall assign any of its rights and
obligations hereunder without the prior written consent of the other Party
except in connection with the merger, consolidation, reorganization or
acquisition of stock or assets affecting substantially all of the assets or
actual voting control of the assigning Party.
21. Governing Law. This Agreement shall be governed by California law,
notwithstanding its conflicts of laws principles.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
29.
<PAGE>
22. Entire Agreement, Amendment. This Agreement sets forth the principal
terms of the arrangement between the Parties hereto and, except as otherwise set
forth herein, supersedes and terminates all prior agreements and understandings
between the Parties. No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the Parties unless reduced to writing and
signed by an authorized officer of each Party.
23. Public Announcements. Each Party agrees that, prior to the execution
of the Agreement, except as may be required by law, it shall not disclose the
existence, substance or details of this Agreement without the prior written
consent of the other Party, such consent not to be unreasonably withheld.
Nothing herein shall prevent either Party from disclosing such information as
reasonably necessary to its affiliates; provided, however, each Party shall take
such steps necessary to ensure that such affiliates agree to be bound to the
provisions of this Section 23. In cases in which disclosure may be required by
law, the disclosing Party, prior to such disclosure to the extent practicable,
shall notify the non-disclosing Party of the contents of the proposed
disclosure. Consistent with applicable law, the non-disclosing Party shall have
the right to propose reasonable changes to the disclosure to protect its
interests, provided that it requests such changes promptly after the potential
disclosure is submitted to it. The disclosing Party shall not unreasonably
refuse to include such changes in its disclosure.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
30.
<PAGE>
If this Agreement correctly sets forth your understanding of the agreement
between JT and Tularik, please confirm by signing and returning the duplicate
copy, addressed to my attention.
Tularik Inc.
By: /s/ John P. McLaughlin
-------------------------
Title: President
AGREED:
Japan Tobacco Inc.
By: /s/ Masakazu Kakio
-------------------------
Title: Executive Director
Date: September 8, 1998
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
31.
<PAGE>
APPENDIX A
RESEARCH PLAN
The details of the Research Program described in this Agreement are as follows:
1. The following tasks will be carried out predominantly at Tularik:
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
2. The following tasks will be shared by both parties:
[ * ]
[ * ]
[ * ]
[ * ]
3. Details will be discussed and determined by the RMC. An initial meeting of
the RMC will take place within one month of the date of execution of this
Agreement.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
32.
<PAGE>
APPENDIX B
DESCRIPTION OF TULARIK EXISTING
TECHNOLOGY APPLICABLE TO THE FIELD
I. Summary of Existing Tularik Technology
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
33.
<PAGE>
APPENDIX C
DESCRIPTION OF JAPAN TOBACCO EXISTING
TECHNOLOGY APPLICABLE TO THE FIELD
Summary of JT Patent Applications Relevant to the Orphan Nuclear Receptor
Project
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
34.
<PAGE>
APPENDIX D
Definitions for Calculation of Co-Promotion Expenses, Development Costs
and Promotion Expenses in the Exclusive Territory
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
35.
<PAGE>
APPENDIX E
Description of Scientific FTE Rate
The initial Scientific FTE rate that will be used by the Parties in
preparing the Development Budget and determining Development Costs is [ * ].
Such rate is composed of the following expense categories in the amounts
indicated:
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
The Scientific FTE rate shall be adjusted annually such that [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
36.
<PAGE>
APPENDIX F
Excluded Orphan Nuclear Receptors
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
37.
<PAGE>
APPENDIX G
Tularik Scientific FTE
Assigned to the Research Program
[ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
38.
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.14
September 20, 1998
Mr. Masakazu Kakei
Executive Director and Member of Board
Japan Tobacco Inc.
JT Building, 2-1 Toranomon, 2-chome
Minato-ku, Tokyo 105-8422, Japan
Re: Preliminary Research, Development and Marketing Agreement between Tularik
Inc. ("Tularik") and Japan Tobacco Inc. ("JT") (individually, a "Party" and,
collectively, "Parties").
Dear Mr. Kakei:
This Preliminary Research, Development and Marketing Agreement ("Agreement")
sets forth the Parties' preliminary agreement on terms and conditions under
which Tularik and JT will (i) amend and restate the Collaboration Agreement
dated as of December 31, 1996 between Tularik and JT ("Original Agreement") to
govern the terms pursuant to which the Parties will continue to research,
discover, develop, manufacture and market products that [ * ]; and (ii) expand
the Parties' collaboration under the Original Agreement to include a
collaborative program to research, discover, develop, manufacture and market
products that [ * ]. The [ * ] shall be referenced collectively in this
Agreement as the "Targets". Activities conducted pursuant to subparagraphs (i)
and (ii) of the previous sentence shall be referred to herein, collectively, as
the "Program". "Field" shall mean the therapeutic treatment of human disease by
means of regulation of the Targets. The foregoing definition of "Field" shall
exclude the therapeutic treatment of human disease by means of [ * ]. The
Parties intend to express their agreement more fully pursuant to a definitive
agreement ("Collaboration Agreement"). The Parties shall use their respective
commercially reasonable efforts to execute the Collaboration Agreement prior to
[ * ] ("Execution Date").
<PAGE>
1. Committees
a. EC. The goals and progress of the Program shall be the ultimate
responsibility of an Executive Committee ("EC") comprised of The Chief Executive
Officer of Tularik and a senior officer of JT's pharmaceutical business to be
appointed within 10 days after September 20, 1998 (the "Agreement Date"). A
Party may replace its designee to the EC by written notice to the other Party.
Except as provided herein, all decisions of the EC shall be unanimous. The EC
shall resolve problems and settle disagreements that are unresolved by the RMC,
the JDC or the MC. The EC shall meet as necessary to resolve disagreements
pursuant to this Agreement
b. Research Management Committee. The goals and progress of the
research component of the Program ("Research Program") shall be determined and
monitored by a Research Management Committee ("RMC"), which shall be composed of
three members from each of Tularik and JT, the Chairperson of which shall be
named by Tularik. A Party may replace any designee to the RMC by written notice
to the other Party. The RMC shall meet at least twice annually at a time and
place it so designates. The RMC will periodically review the Research Program
and the Parties' progress thereunder, to the extent set forth in the Research
Plan, including all screening results and new developments regarding the Field,
and propose changes to the Research Plan based upon the results of prior work
and new developments in the Field. The RMC will select the Collaboration Lead
Compounds by a unanimous vote pursuant to Section 3(b). All data and
information obtained by either Party pursuant to the Research Program will be
provided to the RMC. The RMC will delegate responsibility for the filing and
prosecution of Program Patents arising from the Research Program on inventions
jointly discovered in the course of the Research Program Term (as defined in
Section 2(g)). The RMC will be responsible for coordinating all aspects of all
activities undertaken to identify and develop a Lead Compound that are necessary
or desirable to determine whether such Lead Compound may be suitable for
designation as a Collaboration Lead Compound pursuant to Section 3(b)(i). In
addition, the RMC will be responsible for coordinating all aspects of all
activities (including, but not limited to: [ * ] that will be undertaken with
respect to a Collaboration Lead Compound that are necessary or desirable to
enable the filing of an IND on Products based upon or incorporating such
Collaboration Lead Compound, including the preparation and filing of an IND
(collectively, "Pre-Clinical Development"). All decisions of the RMC shall be
unanimous.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
c. Joint Development Committee. Within thirty (30) days of the date
a Collaboration Lead Compound is designated by the RMC, the Parties shall each
appoint three representatives to a Joint Development Committee ("JDC"). A Party
may replace any designee to the JDC by written notice to the other Party. Such
representatives will include individuals with expertise and responsibilities in
the areas of pre-clinical development, clinical development or regulatory
affairs. The JDC will be responsible for coordinating all aspects of the
Development of each Product through the filing of an NDA or equivalent by
unanimous decisions. "Development" shall mean the development of any Product
occurring from and after the filing of an IND, through and including approval of
an NDA and any other governmental approvals required for the commercialization
of such Product in a country.
d. Marketing Committee. Upon recommendation of the JDC in
anticipation of the first commercial launch of one or more Products, but in any
event no later than at the [ * ] for any Product, the Parties shall each appoint
three representatives to a Marketing Committee ("MC"). A Party may replace any
designee to the MC by written notice to the other Party. Such representatives
will include individuals with expertise and responsibilities in the areas of
sales, marketing, manufacturing or regulatory affairs. The MC will develop a
marketing plan for each Product in the Co-Promotion Territory, shall oversee
quality control of the Product and shall oversee operational aspects of
marketing and sales in the Co-Promotion Territory following launch of each such
Product, in all cases by unanimous decisions. UCP Co-Promotion Territory
shall mean all of the countries and territories of the world other than the
countries and territories within [ * ] ("Knoll Agreement") and [ * ]. The UCP
Co-Promotion Territory shall be limited [ * ] to include only [ * ]. The
"Knoll Territory" shall be comprised of all countries other than [* ] during
the [ * ]. "Leptin/PPARgamma Co-Promotion Territory" shall mean all of the
countries and territories of the world other than [ * ]. "Co-Promotion
Territory" shall mean the [ * ]. "Tularik Territory" shall mean the countries,
territories and possessions of the United States of America and Canada. "JT
Territory" shall mean Japan and Korea and their territories and possessions.
"Exclusive Territories" shall mean the Tularik Territory and the JT Territory.
"Territory" shall mean the Exclusive Territories and the Co-Promotion Territory.
e. Dispute Resolution. Any disputes or disagreements arising in the
RMC, JDC or MC will be referred to the EC if the RMC, JDC or MC, as the case may
be, is unable to resolve such dispute or disagreement [ * ] after submission of
an issue to such committee. In addition, any other disputes or disagreements
between the Parties arising hereunder will first be referred to the EC. If such
dispute is not resolved within the [ * ] following submission of such dispute to
the EC and such dispute relates to an alleged breach of this Agreement, then
either Party may propose to refer such dispute to arbitration, and thereafter
such dispute shall be resolved pursuant to Section 19. In the event such
dispute is not resolved within the [ * ] following submission of such dispute to
the EC and such dispute does not relate to an alleged breach of this Agreement,
such dispute shall be referred to a Third Party mediator with significant
experience in the pharmaceutical industry acceptable to both parties for
resolution. The costs and expenses of such Third Party mediator shall be shared
equally by the Parties. In the event such dispute is not resolved within the [
* ] following submission of such dispute to the Third Party mediator, then
either Party may propose to refer such dispute to arbitration, and thereafter
such dispute shall be resolved pursuant to Section 19.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
2. Research Program
a. Research Program. The Research Program shall be conducted in the
Field pursuant to a detailed Research Plan as set forth in Appendix A ("Research
Plan"). The Parties shall commence the portion of the Research Program relating
to [ * ] promptly upon the Agreement Date.
b. Basic Research. The Parties will jointly undertake, under the
direction of the RMC, basic research towards the objectives of the Research
Program.
c. Screening. Tularik shall develop and perform biochemical and
cell-based assays ("Tularik Assays") to determine (i) the effect of compounds,
selected for screening by the RMC, on [ * ] Targets ("[ * ] Compounds") and/or
[ * ]; and (ii) the cytotoxicity and target specificity of such [ * ]
Compounds and/or [ * ], for the purpose of identifying [ * ] Compounds and/or
[ * ] that may be suitable for further development within the Field; provided,
however, that in no event shall Tularik grant to JT rights in those natural
extracts, natural compounds and synthetic compounds contained in the [ * ];
provided further that Tularik may grant to JT rights in compounds derived or
generated as a result of medicinal chemistry undertaken with respect to [ * ].
Designation of [ * ] Compounds ("[ * ] Lead Compounds") and/or [ * ] ([ * ])
for further development within the Field shall be the responsibility of, and
undertaken by, the RMC. A [ * ] Lead Compound or a [ * ] may also be referred
to herein as a "Lead Compound". Multiple Lead Compounds are referred to herein
as "Lead Compounds". Each Party will provide its proprietary chemical and
natural product libraries to Tularik for screening as directed by the RMC;
provided, however, that a Party shall not be required to provide a compound
for screening that [ * ]. Unless otherwise directed by the RMC and except as
provided in Section 2(e), the activities under Sections 2(b) and 2(c) shall be
the responsibility, [ * ], of Tularik until such time as [ * ] pursuant to
this Section 2(c). If a
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
compound is designated as a Lead Compound [ * ], such compound shall be removed
from the screening library from which such Lead Compound originated until such
time as such Development of such Lead Compound (or Collaboration Lead Compounds
or Products resulting therefrom) shall be terminated by the Parties.
d. Research License. Each Party hereby grants to the other Party a
non-exclusive license to practice, solely for the purpose of conducting the
Research Program, (i) inventions claimed in or covered by patents and patent
applications owned or controlled by such Party relating to the discovery and
commercialization of Independent Lead Compounds, Independent Products, Lead
Compounds, Collaboration Lead Compounds or Products made or discovered during
the Research Program Term ("Program Patents"), (ii) other know-how, information
and technology owned or controlled by the other Party and developed during
Research Program Term ("Program Know-How"), (iii) patents and patent
applications (other than Program Patents) owned or controlled by such Party to
the extent applicable to that portion of the Field relating to: (A) [ * ], to
the extent such patents and patent applications exist as of the Agreement Date;
and (B) [ * ] Targets, to the extent such patents and patent applications
existed as of September 20, 1996 ("Preliminary Agreement Date") ((iii)(A) and
(B) herein, collectively, "Patent Rights") and (iv) know-how, information and
technology (other than Program Know-How) owned or controlled by such Party to
the extent applicable to that portion of the Field relating to: (A) [ * ], to
the extent such know-how, information and technology exist as of the Agreement
Date; and (B) [ * ] Targets, to the extent such know-how, information and
technology existed as of the Prelminary Agreement Date ((iv)(A) and (B) herein,
collectively, "Know-How"). JT agrees that Tularik may sublicense to [ * ]. A
brief general description of Tularik's Patent Rights and Know-How is attached as
Appendix B. A brief general description of JT's Patent Rights and Know-How is
attached as Appendix C. Tularik and JT shall provide numbers of all relevant
patents and patent applications within their respective Patent Rights following
execution of this Agreement.
e. Research Chemists. The Parties recognize that the prompt
allocation of appropriate medicinal chemistry resources to optimize Lead
Compounds will confer a competitive advantage upon the Research Program.
Accordingly, the Parties agree that the RMC, by unanimous decision, shall be
responsible for determining: (i) [ * ]. Each of JT and Tularik shall be
responsible for dedicating to the Research Program [ * ]; provided, however,
that the RMC may decide [ * ]. In the event that either JT or Tularik is unable
to [ * ]; provided, however, that the Receiving Party shall, upon written
request by the Paying Party, provide documentation to demonstrate that [ * ].
In the event that the Receiving Party shall be unable to employ the number of
additional chemistry Scientific FTE
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
that the Paying Party is unable to provide, the Paying Party shall be required
to pay the Receiving Party [ * ]. The Parties understand and agree that: [ * ].
In the event that the RMC is unable to unanimously agree on [ * ], the matter
shall be referred to the EC for unanimous resolution. In the event that the EC
is unable to unanimously agree on [ * ], a Party will have the right to proceed
independently to develop such compound as an Independent Lead Compound under
Section 3(m) and to develop Independent Products incorporating or based on such
Collaboration Lead Compound.
f. Exchange of Pre-Clinical Data. JT and Tularik will exchange pre-
clinical data generated during the Research Program Term for [ * ]. As provided
in Sections 4(a) and 4(b), the Parties may also make such data available to any
permitted sublicensees in the Field in a country or countries in the Territory;
provided, however, such data shall not be made available to such sublicensees
until a sublicensee has executed a standard confidentiality agreement covering
disclosure and use of such data.
g. Research Program Term. The portion of the Research Program
relating to the [ * ] Targets has been conducted since the Preliminary Agreement
Date. The Parties shall continue performing under such portion of the Research
Program, and shall also perform activities relating to the [ * ] under the
Research Program during the period of three years commencing as of the Agreement
Date ("Research Program Term"). Upon not later than seventy-five (75) days prior
written notice JT may, in its sole judgment, terminate the Research Program on
first or second anniversary of the Agreement Date. The RMC may terminate the
Research Program any time during the Research Program Term if it unanimously
determines the Research Program is no longer scientifically useful or that no
potential Products would be commercially viable. In case of such an early
termination by JT or the RMC, JT shall be exempt from any payment(s) under
Section 10(a) that would have become due and payable after the effective date of
such early termination. Following any termination of the Research Program (i)
that occurs simultaneously with the termination of this Agreement in accordance
with Section 13 (i.e., no compound or Lead Compound has been designated
previously a Collaboration Lead Compound in accordance with Section 3(b) and no
Independent Lead Compound is being developed in accordance with Section 3(m)) or
(ii) that is followed at some future date by the termination by JT of
Development or co-promotion of any Collaboration Lead Compound and/or Product
pursuant to Sections 3(l) or 5(c), respectively, or development of an
Independent Lead Compound in accordance with Section 3(m) (A) any licenses
granted by Tularik to JT will terminate, (B) JT will grant to Tularik an
exclusive, sublicensable, worldwide license, to make, use and sell compounds,
Collaboration Lead Compounds or Products under JT's interest in Program Patents
and Program Know-How and (C) under terms and conditions to be separately agreed,
JT will also grant to Tularik a nonexclusive,sublicensable, worldwide license
under any JT Patent Rights and Know-How to the extent necessary to practice the
license granted under the Program Patents and Program Know-How in (B)
(including, with respect to compounds, a limited number of JT's library
compounds approved by JT); provided, however, that in the event the Research
-------- -------
Program terminates but the Agreement has not terminated with respect to
designated Collaboration Lead Compounds, Independent Lead Compounds and/or
Products as provided in Section 2(g)(ii), Sections 2(g)(A),(B) and (C) shall
apply only to those compounds, Collaboration Lead Compounds, Independent Lead
Compounds and Products for which Development or co-promotion shall have been
terminated and/or to those compounds or Lead Compounds that have not been
designated previously a Collaboration Lead Compound in accordance with Section
3(b) or an Independent Lead Compound in accordance with Section 3(m); provided
--------
further that in the event that JT elects to pursue a Discontinued Compound or a
- - -------
Non-Proposed Compound on or before the first anniversary of the expiration or
termination of the Research Program Term pursuant to Section 3(b)(iii) or
3(b)(iv), respectively, Sections 2(g)(A), (B) and (C) shall not apply to such
Discontinued Compound or Non-Proposed Compound until such time as JT shall have
terminated the Development or co-promotion of such Discontinued Compound or Non-
Proposed Compound. Tularik will then be free to pursue clinical development and
registration of such compounds, Lead Compounds and/or Products without
obligation to JT except as provided in Section 4(f) or Section 5(c), as
appropriate.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
h. Exclusive Collaboration. Except as provided below, the Parties
shall work exclusively with each other in the Field during the Research Program
Term. The research and development program being conducted by JT as of the
Agreement Date to discover and develop compounds having activity against Targets
shall be included as part of the Research Program; provided, however, that JT
shall not be required to contribute (i) compounds that [ * ]. During the
Research Program Term, neither Party shall discuss the terms of, or enter into,
an agreement with any Third Party relating to research, development or
commercialization activities of products in the Field without the express prior
unanimous written consent of the RMC, JDC or MC, respectively, except for the
[ * ] Agreement and except as otherwise provided in this Agreement. During the
Term (as defined in Section 13), except for [ * ], neither Party will develop
or commercialize a product in the Field other than pursuant to this Agreement.
The Parties shall discuss with each other any opportunity available to either
Party to [ * ] that are known, at the time such Party becomes aware of such
opportunity, to regulate one or more Targets. The Parties in good faith shall
negotiate the terms on which any such [ * ] opportunity may be included in
this Agreement. For the avoidance of doubt, the Parties agree that neither
Party shall enter into any [ * ] unless mutually agreed by the Parties during
such good faith negotiations. Tularik shall not enter into any agreement with
any Third Party [ * ] regarding research involving [ * ] or the
commercialization of [ * ] unless such agreement contains provisions [ * ] of
the JT Territory comparable to those described in the highlighted sections of
the letters dated October 9, 1998 and October 14, 1998 from William J. Rieflin
to K. Kiyose attached hereto as Appendix F (the "Kiyose Letters").
3. Development Program.
a. General Principles. The Parties agree to use commercially
reasonable efforts to develop Collaboration Lead Compounds for use in the Field,
making use of each Party's special expertise as directed by the RMC with the
intent of obtaining all worldwide approvals or authorizations necessary for the
manufacture, distribution, use or sale of a Product in the Territory
("Regulatory Approval") and bringing Products to the market as soon as
reasonably practicable thereafter.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
b. Designation of Collaboration Lead Compound. (i) From time to
time either Party may propose to the RMC one or more Lead Compounds suitable for
Pre-Clinical Development. The RMC will promptly determine whether such Lead
Compound is suitable for Pre-Clinical Development by determining whether such
Lead Compound meets relevant criteria set forth by the RMC from time to time
(the "Pre-Clinical Development Criteria").
(ii) If the RMC determines that such Lead Compound meets the Pre-
Clinical Development Criteria, then within [ * ] of such determination each
Party shall provide to the RMC a written notice as to whether it elects to
participate in and, subject to Section 3(f), commit resources to conduct Pre-
Clinical Development of such Lead Compound as a Collaboration Lead Compound
according to the proposed plan and budget. If the RMC determines that such Lead
Compound does not meet the Pre-Clinical Development Criteria, then within [ * ]
of such determination each Party shall provide to the RMC a written notice as to
whether it elects to designate such Lead Compound as a Collaboration Lead
Compound and participate in and commit resources to conduct Pre-Clinical
Development of such Collaboration Lead Compound notwithstanding that such Lead
Compound does not meet the Pre-Clinical Development Criteria. If each Party
makes an affirmative election with respect to any Lead Compound pursuant to
either the first or second sentence of this Section 3(b)(ii), such Lead Compound
shall be designated a "Collaboration Lead Compound" and, if an IND or equivalent
is filed thereon, a "Product." If one Party makes an affirmative election and
the other Party makes a negative election with respect to any Lead Compound
being designated a Collaboration Lead Compound, the Party making an affirmative
election will have the right to proceed independently to develop such compound
as an Independent Lead Compound or Independent Product under Section 3(m).
(iii) If neither Party makes an affirmative election with respect to
any Lead Compound being designated a Collaboration Lead Compound under Section
3(b)(i), such Lead Compound shall be neither a Collaboration Lead Compound nor a
compound that may be developed under Section 3(m), and development of such non-
elected Lead Compound (a "Discontinued Compound") may be subsequently initiated
by a Party by notifying the other Party of its interest in initiating
Development of such Discontinued Compound at any time on or before [ * ] of the
date of termination or expiration of the Research Program Term. If the other
Party indicates it is not interested in initiating Development of such
Discontinued Compound, the initiating Party may proceed with development of such
Discontinued Compound as an Independent Lead Compound or an
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
Independent Product and the initiating Party shall be deemed to be the
Independent Party, pursuant to Section 3(m). At any time after [ * ] of the date
of termination or expiration of the Research Program Term, either Party may,
upon written notice to the other Party, proceed with development of a
Discontinued Compound as an Independent Product and such Party shall be deemed
to be the Independent Party, pursuant to Section 3(m).
(iv) If a Lead Compound is not, at any time, presented to the RMC
pursuant to Section 3(b)(i), such Lead Compound shall be neither a Collaboration
Lead Compound nor a compound that may be developed under Section 3(m), and this
Section 3(b)(iv) shall govern any future development of such non-proposed Lead
Compound (a "Non-Proposed Compound"). If at any time on or before [ * ] of the
date of termination or expiration of the Research Program Term, a Party
hereunder (the "Non-Proposed Compound Interested Party") determines to initiate
Pre-Clinical Development of such Non-Proposed Compound, it shall provide written
notice to the other Party of such interest and the reasons therefor. The other
Party will then have [ * ] to indicate whether it also is interested in the
development of such Non-Proposed Compound. If the other Party is so interested,
the Parties will proceed with Pre-Clinical Development or Development of such
Non-Proposed Compound as a Collaboration Lead Compound pursuant to the terms of
this Agreement. If the other Party is not so interested, the Non-Proposed
Compound Interested Party may proceed with development of such Non-Proposed
Compound as an Independent Product and the Non-Proposed Compound Interested
Party shall be deemed to be the Independent Party, pursuant to Section 3(m). At
any time after [ * ] of the date of termination or expiration of the Research
Program Term, either Party may, upon written notice to the other Party, proceed
with development of a Non-Proposed Compound as an Independent Product and such
Party shall be deemed to be the Independent Party, pursuant to Section 3(m).
c. Pre-Clinical Development. The Parties, under the direction of
the RMC shall conduct Pre-Clinical Development with respect to any designated
Collaboration Lead Compound. The costs of conducting such Pre-Clinical
Development shall be shared by the Parties as set forth in Section 3(f). Under
no circumstances shall either Party conduct studies of any Collaboration Lead
Compound in the Field except as permitted by the RMC.
d. Collaborative Development of Products. The Parties will each
diligently collaborate in the Pre-Clinical Development and Development and use
commercially reasonable efforts to develop and bring Products to the market as
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
soon as reasonably practicable. The role of each Party in the Development
process will be determined by the JDC, with the Parties intending that each
Party will provide advisory and supporting services with respect to each phase
of the process in which such Party is not actively or primarily involved. [ * ]
shall supply [ * ] for each Product to be promoted or co-promoted by the Parties
in the Territory in the aggregate, as determined by the JDC. A Party's required
Development effort is hereinafter referred to as its "Required Development
Effort". The JDC will determine appropriate written standards for measuring
Required Development Efforts and accounting procedures to confirm and document
each Party's performance of its Required Development Effort for any Product
before the Parties commence Development thereof. No clinical trials involving
any Product shall be commenced by or on behalf of either Party without the prior
approval of the JDC. Nothing contained in this Section 3(d) shall be deemed to
preclude either Party from terminating its participation in the collaborative
Development, pursuant to Section 3(l), at such time. Any decision by a Party
not to participate in development pursuant to Section 3(b) or to terminate
participation in the collaborative Development pursuant to Section 3(l) shall
not be deemed a breach of this Agreement.
e. Development Plan and Development Budget. Promptly following the
designation of a Collaboration Lead Compound pursuant to Section 3(b), the JDC
shall initiate preparation of the development plan for the Development (the
"Development Plan") and a budget (the "Development Budget") for proposed
Development Costs (as defined in Section 3(f)). The initial Development Plan
shall set time lines and priorities for the various Development activities
through [ * ] and identify which Party, or whether a Third Party, is to be
responsible for each activity. The budget for each development program shall
include a detailed short-term budget covering all proposed Development Costs of
the program expected during the subsequent [ * ] (the "Short-Term Budget
Period") of the Development process. Both Parties recognize that the
Development Plan and the Development Budget represent projections only and will
be subject to frequent changes. Each such Development Plan and Development
Budget shall be updated as deemed appropriate by the JDC, but in no event less
frequently than [ * ] and approved by the JDC not later than thirty (30) days
prior to each [ * ] of each applicable calendar year.
f. Funding of Pre-Clinical Development and Development. Tularik
shall be responsible for [ * ] of the Development Costs and JT shall be
responsible for [ * ] of such Development Costs. "Development Costs" shall mean
all costs and expenses reasonably charged directly to the Pre-Clinical
Development of any Lead Compound, Collaboration Lead Compound or Development of
any Product, as well as [*] of the functions that directly support such Pre-
Clinical Development or Development (as calculated in accordance with GAAP and
using the same allocation methods that the Party incurring such costs uses
throughout its operations, but in all events [*], all as specified in the
Development Plan and the Development Budget. Development Costs shall consist of
the costs of [*] and [*] but shall exclude the costs of [*] to the extent such
costs are incurred in connection with activities provided in Section [*]. Such
costs shall include, without limitation: (i) the [*] for the [*] used in such
[*] used in such Development (including [*], to the extent [*]; (ii) direct
costs for [*], including, but not limited to, [*]; (iii) direct charges for
materials (including [*]; (iv) labor and materials costs incurred in connection
with [*]; and (v) labor and materials costs for the [*].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
In the event the Development Costs incurred by a Party during any calendar
quarter exceed [ * ] of the Development Costs set forth in the most recently
approved Development Budget for activities to be conducted by such Party during
such quarter (the "Overage Threshold"), then the other Party shall not be
responsible for paying [ * ] share of any Development Costs in excess of the
Overage Threshold incurred by the Party triggering such overage unless such
overage had been approved in advance, or is subsequently ratified, unanimously
by the JDC (in which case each of the Parties shall be responsible for [ * ] of
all such Development Costs). In the event such overage has not been approved or
ratified unanimously by the JDC, the Party incurring Development Costs exceeding
the Overage Threshold in such quarter shall be responsible for [ * ] of the
Development Costs in excess of the Overage Threshold.
g. Scientific FTE. In preparing the Development Budget and
determining Development Costs, the Parties will use a rate of [ * ] per
Scientific FTE. "Scientific FTE" means the fully-loaded costs, including [ * ],
but excluding [ * ], of employing a full-time scientific/technical person (or,
in the case of less than a full-time dedicated person, the full-time equivalent
scientific/technical person year) dedicated to the Pre-Clinical Development or
Development for a period of one (1) year, [ * ]. Such rate shall be adjusted
annually (utilizing the cost-breakdown and methodology attached hereto as
Appendix E as the basis for such adjustment) and [ * ].
h. Payment of Development Costs. Each Party shall be responsible
for paying [ * ] Development Costs incurred pursuant to the Development Plan and
the Development Budget as provided in Section 3(f), subject to reimbursement as
provided herein. Within thirty (30) days after each calendar quarter, each
Party shall provide the JDC with detailed information concerning the Development
Costs incurred by such Party during such quarter. Promptly after receipt
thereof, the JDC will determine the amount, if any, which either Party has paid
in excess of the amount to be borne by such Party for such quarter pursuant to
Section 3(f) (an "Overpayment"), and shall so notify the Parties. In the event
of an Overpayment, the other Party shall pay the amount thereof to the Party
making the Overpayment within thirty (30) days after receipt of notice from the
JDC that an Overpayment has occurred.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11.
<PAGE>
i. Drug Approval Applications. Consistent with the Development Plan
and Development Budget and as directed by the JDC, the Parties will file
applications for regulatory approval required before commercial sale or use of a
Product as a drug in a country within the Territory ("Drug Approval
Applications") and attempt to obtain regulatory approvals in each country in the
Territory in which the Parties either individually or jointly intend to
commercialize Products. JT will be responsible for filing in its name and shall
own all regulatory submissions relating to Products including, without
limitation, all INDs and NDAs, in each country in the JT Territory, in which
Products will be commercialized. Tularik will be responsible for filing in its
name and shall own all regulatory submissions, including, without limitation,
all INDs and NDAs in each country in the Tularik Territory in which Products
will be commercialized by Tularik. The JDC will be responsible for designating
a Party to be responsible for filing all regulatory submissions in each country
in the Co-Promotion Territory in which Products will be commercialized. The
Party not responsible for filing regulatory submissions for Products in a
country pursuant to this Agreement shall have a right to cross-reference to all
such filings made by the other Party in any country. The Parties will cooperate
in the preparation of all such regulatory filings and in obtaining Regulatory
Approvals under this Section 3(i).
j. Line Extensions. JT and Tularik may each prepare and submit to
the JDC for consideration plans for development of Product line extensions and
the conduct of clinical trials covering indications other than those for which
Products are being developed or commercialized in the Territory. Any such line
extensions or any additional clinical trials for additional indications will be
subject to the approval and supervision of the JDC as part of the ongoing
Development of such Product.
k. Compliance. The Parties will comply with all supranational,
federal, state and/or local laws pertaining to the Development and
commercialization of Products.
l. Termination of Participation in Collaborative Development. On a
Collaboration Lead Compound-by-Collaboration Lead Compound basis, either Party
may elect (upon [ * ] written notice following receipt by the Party
contemplating termination of its participation in the Pre-Clinical Development
of any Collaboration Lead Compound or Development of any Product of Development
Termination Documents) to terminate its participation in, or to not to
participate in, the Pre-Clinical Development of any Collaboration Lead Compound
or Development of any Product. "Development Termination
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
12.
<PAGE>
Documents" shall mean the following documents or reports: [ * ]. After receipt
of such notice by the other Party, the Party providing such notice shall no
longer be responsible for bearing further Development Costs for such
Collaboration Lead Compound or Product as specified herein, in which event the
other Party will have the right to proceed independently to develop such
Collaboration Lead Compound or Product as an Independent Lead Compound or
Independent Product, pursuant to Section 3(m). In the event a Party gives notice
under this Section 3(l), such non-Independent Party (i) will remain responsible
for its share of Development Costs for such Collaboration Lead Compound or
Product until [ * ] from the date the other Party receives such notice, and (ii)
will make its personnel, relevant data and other resources available to the
Independent Party as necessary to effect an orderly transition of development
responsibilities, with the costs of such personnel, relevant data and resources
to be borne by [ * ]. The Parties each recognize and agree that a non-
Independent Party's termination of participation in Pre-Clinical Development or
Development in accordance with this Section 3(l) will not be considered a breach
of its obligations under this Agreement. In the event of a non-Independent
Party's termination of participation in Development in accordance with this
Section 3(l), such non-Independent Party shall transfer and assign to the
Independent Party all regulatory submissions and Drug Approval Applications
relating to such Collaboration Lead Compound and/or Products based upon or
incorporating such Collaboration Lead Compound, together with all materials and
data related thereto in its possession.
m. Independent Development. (i) In the event (A) a Party, pursuant
to Sections 2(e), 3(b)(ii), (iii) or (iv) elects not to participate in and
commit resources to conduct Pre-Clinical Development of a Collaboration Lead
Compound or the pre-clinical development of a Discontinued Compound or a Non-
Proposed Compound or (B) any Party unilaterally terminates its participation in
the Pre-Clinical Development or Development of a Collaboration Lead Compound or
Product pursuant to Section 3(l), then the Party that made an affirmative
election to conduct such pre-Clinical Development or Development of such
Compound pursuant to Sections 2(e), 3(b)(ii), (iii) or (iv), or the Party
continuing Development of a Collaboration Lead Compound or Development of a
Product (in either case, the "Independent Party"), shall have the right to
practice the license granted in Section 4(c) and to undertake pre-clinical
development of a Lead Compound or to continue Pre-Clinical Development and
Development of such Collaboration Lead Compound or Product independently as an
"Independent Lead Compound" or "Independent Product", [ * ]. No Party may
utilize the services of its personnel committed to the Research Program pursuant
to Section
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13.
<PAGE>
2(a) in performance of research or development of an Independent Lead Compound
or Independent Product.
(ii) Until the earlier of the Re-Engagement Expiration Date (as
defined in Section 3(n)) or the date on which the Independent Party receives a
Re-Engagement Notice (as defined in Section 3(n)) for a Product from the non-
Independent Party, the Independent Party will (A) inform the other Party of all
material information developed in its research and development of each
Independent Lead Compound or Independent Product; (B) allow such other Party to
comment on the direction of such research and development; and (C) provide the
other Party a copy of all proposed regulatory submissions relating to such
Independent Lead Compound or Independent Product at least [ * ] prior to
submitting such filing to the FDA or its foreign equivalent.
(iii) In the event either Party elects to proceed as an Independent
Party, subject to Section 3(n), such Independent Party shall be entitled to
develop such Independent Lead Compound and commercialize such Independent
Product at its sole discretion, alone or with a Third Party, with no obligation
to the other Party.
n. Re-engagement Option. Either Party may elect to resume its
participation in the Pre-Clinical Development or Development of an Independent
Lead Compound or Independent Product in all countries in the Territory by so
notifying the other Party in writing (the "Re-engagement Notice"), at any time
prior to the expiration of the [ * ] period commencing upon receipt by such
Party of the final report summarizing the results of [ * ] ("Re-Engagement
Expiration Date") for such Independent Lead Compound or Independent Product
anywhere in the world. In such event, such Independent Lead Compound or
Independent Product shall be immediately designated a Collaboration Lead
Compound or Product for all purposes under this Agreement, including calculating
each Party's responsibility for paying Development Costs, Co-Promotion Expenses
and Promotion Expenses and receiving the Share of Co-Promotion Profit and
Royalty Payment commencing upon receipt of the Re-engagement Notice. The non-
Independent Party shall pay to the Independent Party [ * ] of the non-
Independent Party's share, based on the allocation set forth in Section 3(f), of
the costs [ * ] of the Independent Lead Compound or Independent Product incurred
by the Independent Party after the date upon which it commenced development or
research of such compound or product as an Independent Lead Compound or
Independent Product and prior to the date of the Re-engagement Notice (the "Re-
Engagement Amount"). The non-Independent Party shall pay the Re-
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
14.
<PAGE>
Engagement Amount in [ * ] beginning on the first day of the calendar quarter
following the date of the election of the non-Independent Party. The Independent
Party may not sublicense intellectual property rights owned or controlled by the
Independent Party that relate to Independent Lead Compound or Independent
Product to any Third Party without the consent of the non-Independent Party
prior to the Re-Engagement Expiration Date for such Independent Lead Compound or
Independent Product. Anything in this Section 3(n) to the contrary
notwithstanding: (i) JT may resume its participation in the Pre-Clinical
Development or Development of an Independent Lead Compound or Independent
Product in the JT Territory (but not the Co-Promotion Territory or the Tularik
Territory) by (a) delivering to Tularik a Re-engagement Notice to that effect
prior to the Re-Engagement Expiration Date; [ * ]; and (ii) Tularik may resume
its participation in the Pre-Clinical Development or Development of an
Independent Lead Compound or Independent Product based on (A) [ * ] Lead
Compound in the Tularik Territory (but not the Co-Promotion Territory or the JT
Territory); or (B) [ * ]; by (a) delivering to JT a Re-engagement Notice to that
effect prior to the Re-Engagement Expiration Date; [ * ]. In the event a Party
resumes participation in the Pre-Clinical Development or Development of an
Independent Lead Compound or Independent Product in such Party's Exclusive
Territory only, such Party shall not receive [ * ].
4. Licenses and Royalties.
a. Grant by Tularik. Subject to the terms and conditions of this
Agreement, Tularik hereby grants and agrees to grant to JT: (i) an exclusive
(except as to Tularik) license (with the right to sublicense as provided in this
Section 4(a)) under the Program Patents, Program Know-How, Patent Rights and
Know-How owned or controlled by Tularik during the Term to the extent necessary
or useful to develop, use, import, offer for sale and sell any: (A) Product
based on a [ * ] Lead Compound in the [ * ] Co-Promotion Territory; and (B) [ *
]; (ii) an exclusive (even as to Tularik) license (with the right to sublicense
as provided in the Section 4(a)) under the Program Patents, Program Know-How,
Patent Rights and Know-How owned or controlled by Tularik to the extent
necessary to develop, use, import, offer for sale and sell any Product in the JT
Territory; and (iii) a co-exclusive (with Tularik) license (with the right to
sublicense as provided in this Section 4(a)) under the Program Patents, Program
Know-How, Patent Rights and Know-How owned or controlled by Tularik during the
Term solely to the extent necessary or useful to make or have made any Product
in the Territory solely in connection with the practice of the licenses granted
to JT pursuant to Section 4(a)(i) and 4(a)(ii). JT may not sublicense any
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15.
<PAGE>
rights granted under this Section 4(a)(i) and 4(a)(ii) in the Co-Promotion
Territory to any Third Party without the prior written consent of Tularik, not
to be unreasonably withheld. JT may sublicense any rights granted under this
Section 4(a)(i) and 4(a)(ii) in the JT Territory to any Third Party without the
prior written consent of Tularik, with any such sublicenses subject to the
payments and other obligations set forth in this Agreement. JT may sublicense
any rights granted under this Section 4(a)(iii) to any Third Party only with the
prior written consent of the JDC, with any such sublicenses subject to the
payments and other obligations set forth in this Agreement. Except as provided
in Section 6(l) and 10(b)(iv), JT shall use reasonable efforts to ensure that
any sublicense negotiated by JT pursuant to Section 4(a)(ii) shall: (A) [ * ];
and (B) provide that any revenues or other consideration received from such
sublicensee as consideration for the grant of such sublicense in the JT
Territory, less [ * ], shall be [ * ] and paid directly to each Party by such
sublicensee.
b. Grant by JT. Subject to the terms and conditions of this
Agreement, JT hereby grants and agrees to grant to Tularik: (i) an exclusive
(except as to JT) license (with the right to sublicense as provided in this
Section 4(b)) under the Program Patents, Program Know-How, Patent Rights and
Know-How owned or controlled by JT during the Term to the extent necessary to
develop, use, import, offer for sale and sell any: (A) Product based on a [ * ]
Lead Compound in the [ * ] Co-Promotion Territory; and (B) [ * ]; (ii) an
exclusive (even as to JT) license (with the right to sublicense as provided in
this Section 4(b)) under the Program Patents, Program Know-How, Patent Rights
and Know-How owned or controlled by JT during the Term to the extent necessary
to develop, use, import, offer for sale and sell (with the right to sublicense
as provided in this Section 4(b)) any: (A) Product based on a [ * ] Lead
Compound in the Tularik Territory; and (B) [ * ]; and (iii) a co-exclusive (with
JT) license (with the right to sublicense as provided in this Section 4(b))
under the Program Patents, Program Know-How, Patent Rights and Know-How owned or
controlled by JT during the Term solely to the extent necessary or useful to
make or have made any Product in the Territory solely in connection with the
exercise of the licenses granted to Tularik pursuant to Sections 4(b)(i) and
4(b)(ii). Subject to the last sentence of this Section 4(b), Tularik may not
sublicense any rights granted under this Section 4(b)(i) and 4(b)(ii) to any
Third Party in the Co-Promotion Territory without the prior written consent of
JT, not to be unreasonably withheld. Subject to the last sentence of this
Section 4(b), Tularik may sublicense any rights granted under this Section
4(b)(i) and 4(b)(ii) to any Third Party in the Tularik Territory without the
prior written consent of JT, with any such sublicenses subject to the payments
and other obligations set forth in this Agreement. Tularik may
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
16.
<PAGE>
sublicense any rights granted under this Section 4(b)(iii) to any Third Party
only with the prior written consent of the JDC, with any such sublicenses
subject to the payments and other obligations set forth in this Agreement.
Except as provided in Section 6(l) and 10(b)(iv), Tularik shall use reasonable
efforts to ensure that any sublicense negotiated by Tularik pursuant to Section
4(b)(ii) shall: (A) [ * ]; and (B) provide that any revenues or other
consideration received from such sublicensee as consideration for the grant of
such sublicense in the Tularik Territory, less [ * ], shall be [ * ] and paid
directly to each Party by such sublicensee. Notwithstanding the foregoing
limitations on Tularik's ability to grant sublicenses under the Program Patents,
Program Know-How, Patent Rights and Know-How owned or controlled by JT, Tularik
may grant sublicenses to [ * ].
c. Independent Products. Each of JT and Tularik hereby grants to
the other Party an exclusive, royalty-bearing (in accordance with Section 4(f)),
license (with the right to sublicense after the Re-Engagement Expiration Date
shall have passed without the non-Independent Party having given a Re-Engagement
Notice) under the Program Patents and Program Know-How, and a non-exclusive,
royalty-bearing (in accordance with Section 4(f)), license (with the right to
sublicense after the Re-Engagement Expiration Date shall have passed without the
non-Independent Party having given a Re-Engagement Notice) under the Patent
Rights and Know-How owned or controlled by the granting Party to the extent
necessary to develop Independent Lead Compounds and to make, have made, use,
import, offer for sale and sell Independent Products incorporating an
Independent Lead Compound in the event such Party is designated the Independent
Party with respect to such Independent Product (or Independent Lead Compound)
pursuant to Section 3(m). Such licenses shall be: (i) worldwide, to the extent
such Independent Lead Compounds or Independent Products shall be based upon
either (A) [ * ] Lead Compounds; or (B) [ * ]; or (ii) in the [ * ] and the JT
Territory following [ * ], to the extent such Independent Lead Compounds or
Independent Products shall be based upon [ * ]. Such licenses under the non-
Independent Party's interest in Program Patents and Program Know-How are
exclusive even as to the granting Party. Any such license with respect to an
Independent Product or Independent Lead Compound shall terminate in the event
such Independent Product or Independent Lead Compound becomes a Collaboration
Lead Compound or Product pursuant to the terms of Section 3(n).
d. Third Party Technology. During the Term, if either Party becomes
aware of (i) an opportunity to participate in research with a Third Party that
could advance the objectives of the Research Program; or (ii) an opportunity to
obtain a license or other right owned or controlled by a Third Party relating to
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
17.
<PAGE>
the manufacture, marketing, import, use or sale of a Product ("Third Party
Rights"), it shall so notify the other Party and the RMC will determine whether
to pursue such opportunity in connection with the Research Program. In the event
that the Parties pursue such opportunity and in connection therewith incur
obligations to make payments to a Third Party, such payments shall be [ * ].
e. Use Outside the Field. Each Party hereby covenants to the other
that it will not practice the license granted to it pursuant to Section 4 under
the other Party's interest in Patent Rights, Know-How, Program Patents or
Program Know-How, except as explicitly permitted in this Agreement.
f. Royalties Payable by the Independent Party. Except as provided in
Section 5(c), the Independent Party will pay the non-Independent Party, in lieu
of any Share of Co-Promotion Profits and Royalty Payments, a royalty equal to:
(i) [ * ] of Net Sales of Independent Products by the Independent Party, its
affiliates or sublicensees in the event the non-Independent Party terminates
participation in the Pre-Clinical Development of a Collaboration Lead Compound
pursuant to Section 3(l) prior to the submission of an IND on such Independent
Product; (ii) [ * ] of Net Sales of Independent Products by the Independent
Party, its affiliates or sublicensees in the event the non-Independent Party
terminates participation in the Pre-Clinical Development of a Collaboration Lead
Compound pursuant to Section 3(l) upon or following [ * ]; or (iii) [ * ] of Net
Sales of Independent Products by the Independent Party, its affiliates or
sublicensees in the event the non-Independent Party terminates participation in
the Pre-Clinical Development of a Collaboration Lead Compound or Development of
a Product pursuant to Section 3(l) following the end of the first Phase 1
clinical trial. Such royalty shall be payable on a quarterly basis in respect of
each country in which sales occur until the later of expiration of all patents
included in the Program Patents and Patent Rights necessary to make, use, import
for sale or sell such Product in such country, or ten (10) years after first
commercial sale of an Independent Product in such country. "Net Sales" shall
mean the gross sales prices of the Product in finished product form, invoiced by
a Party or the Independent Party, as the case may be, its affiliates and
sublicensees from sales to arms'-length Third Party end users, less, to the
extent such amounts are included in the invoiced sales price, taxes, shipping
costs (including freight and insurance) and duties and other governmental
charges paid for and separately identified on the invoice. Additionally, the
following amounts will be subtracted from the gross invoiced sales price: (i)
cash, trade and/or quantity discounts actually allowed; (ii) amounts repaid or
credited by reason of rejection or return of goods; (iii) volume or formal
discount amounts paid or credited to a wholesaler, purchaser, Third Party payor
or other contractee as a result of a contractual arrangement specific to a
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
18.
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Product; (iv) rebates paid or credited to any governmental agency (or branch
thereof) or to any Third Party payor, administrator or contractee; and (v)
discounts mandated by, or granted in response to, applicable state, provincial
or federal law, wholesaler chargebacks or retroactive price reductions. The
Independent Party may offset [ * ] of any royalties it must pay to Third Parties
pursuant to any licenses necessary to commercialize Products against royalties
payable by the Independent Party to the non-Independent Party; provided,
however, that in no event shall the royalties payable by the Independent Party
to the non-Independent Party be reduced to less than [ * ] of the amounts that
would have otherwise been due under the percentages set forth in this Section
4(f).
Section 5. Promotion of Products.
a. Promotion Rights in the Exclusive Territory. JT shall have the
exclusive responsibility for promoting each Product in the JT Territory.
Tularik shall have the exclusive responsibility for promoting each: (A) Product
based on a [ * ] Lead Compound in the Tularik Territory; and (B) Product based
on a [ * ] in the Tularik Territory prior to [ * ]. All information and
materials generated by a Party in the course of the promotion effort within any
country in such Party's Exclusive Territory or in the Co-Promotion Territory
shall be provided to the MC for use in the promotion effort within the other
Party's Exclusive Territory and in the Co-Promotion Territory.
b. Commercialization in the Exclusive Territories. JT shall oversee
and implement all commercialization activities in the JT Territory during the
Term, based on the principle of maximizing profits from sales of Products.
Except as provided in Section 5(a), Tularik shall oversee and implement all
commercialization activities in the Tularik Territory during the Term, based on
the principle of maximizing profits from sales of Products. The MC shall review
a Party's commercialization activities within its Exclusive Territory to provide
suggestions for facilitating the promotion and commercialization of Products on
a global basis.
c. Election or Revocation of Co-Promotion Right. In the Co-
Promotion Alternative (as defined in Section 5(d)(ii)), either Party may
terminate early its participation in the co-promotion of a Product in any
country in the Co-Promotion Territory at any time following [ * ] prior written
notice to the other Party. In such case, the other Party may continue promotion
of such Product, as an Independent Product, either alone or with a Third Party,
in such country in the Co-Promotion Territory, effective as of the date of the
terminating Party's notice
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
19.
<PAGE>
hereunder. The Parties shall negotiate in good faith for a period of [ * ]
following the receipt of such notice to determine the appropriate royalty to be
paid on Net Sales of such Independent Product in such country in the Co-
Promotion Territory. In the event the Parties are unable to agree on the
appropriate royalty pursuant to the immediately preceding sentence, the
Independent Party with respect to such Independent Product shall pay to the
other Party a royalty on Net Sales of such Independent Product in such country
in the Co-Promotion Territory pursuant to Section 4(f), except that the
applicable royalty shall equal: [ * ] on the portion of aggregate Net Sales of
such Independent Product in such country up to [ * ] on the portion of aggregate
Net Sales of such Independent Product in such country in excess of [ * ] and
[ * ] on the portion of aggregate Net Sales of such Independent Product in such
country in excess of [ * ]. In the event a Party elects to cease participating
in the co-promotion of a Product of such Independent Product in a country in the
Co-Promotion Territory and the Independent Party proceeds to commercialize such
Product as an Independent Product, the non-Independent Party shall (i) transfer
and assign to the Independent Party all regulatory submissions and Drug Approval
Applications in such country relating to such Collaboration Lead Compound and/or
Products based upon or incorporating such Collaboration Lead Compound, together
with all materials and data related thereto in its possession and (ii) transfer
to the Independent Party all other relevant information that will enable such
Independent Party to promote such product as an Independent Product in such
country. A non-Independent Party may not reinitiate its participation in the co-
promotion of a Product in any given country in the Co-Promotion Territory in
which it relinquished such right hereunder.
d. Promotion Rights in the Co-Promotion Territory. (i) The MC shall
oversee and implement all commercialization activities in the Co-Promotion
Territory during the Term, based on the principle of maximizing profits from
sales of Products, by unanimous decisions. The MC shall have the ability to
determine whether the objective of maximizing profits from sales of Products in
the Co-Promotion Territory during the Term is best achieved through, inter alia,
[ * ]. In the event the MC determines that the foregoing objective is best
achieved by activities other than as provided in Sections 5(d)(ii), (e), (f),
(g) and (h), the MC shall determine [ * ] the optimal alternative structure and
the duties, responsibilities and economic parameters for the Parties and Third
Parties in such alternative structure. Except as provided in Section 6(l) and
10(b)(iv), the Parties shall use reasonable efforts to ensure that any
sublicense negotiated by a Party or the Parties pursuant to Section 4(a)(i) or
4(b)(i) shall: (a) run from the Parties to such sublicensee; and (b) provide
that any revenues or other consideration received from such sublicensee as
consideration for the grant of such sublicense in the Co-
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
20.
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Promotion Territory, less [ * ], shall be [ * ] and paid directly to each Party
by such sublicensee.
(ii) In the absence of [ * ] by the MC pursuant to Section 5(d)(i) or
in the event of [ * ] by the MC to retain for the Parties commercialization
rights to a Product in the Co-Promotion Territory (the "Co-Promotion
Alternative"), JT and Tularik shall have the co-exclusive responsibility for
promoting such Product in the Co-Promotion Territory. Tularik and JT shall each
work diligently to perform its respective obligations under the Marketing Plan
and use the same effort such Party puts forth to promote other products of
similar commercial value to co-promote such Product in the Co-Promotion
Territory from initiation of pre-launch activities for such Product in the Co-
Promotion Territory until the expiration of the Term pursuant to the terms and
conditions hereof. The Parties intend that [ * ] shall supply [ * ] of the total
promotional and marketing effort (including details, if determined to be an
appropriate sales activity for a Party by the MC) for each Product being co-
promoted by the Parties in the Co-Promotion Territory, as determined by the MC.
Each Party's required promotional and marketing effort under the Marketing Plan
is hereinafter referred to as its "Required Sales Effort". The MC will determine
appropriate written standards for measuring and accounting procedures to confirm
and document each Party's performance of its Required Sales Effort, [ * ] after
the filing of the NDA for any Product. Nothing contained in this Section 5(d)
shall be deemed to preclude either Party from relinquishing its right to
participate in the co-promotion of Products in the Co-Promotion Territory
pursuant to Section 5(c), at any time. Any failure to provide the Required Sales
Effort shall not be deemed a breach of this Agreement.
e. Marketing Plan and Marketing Budget in the Co-Promotion
Territory. In the Co-Promotion Alternative, no later than one (1) month after
[ * ], the MC shall initiate preparation of a marketing plan ("Marketing Plan")
and a marketing budget ("Marketing Budget"). The co-promotion of a Product in
the Co-Promotion Territory will be governed by the Marketing Plan and Marketing
Budget. The Marketing Plan and Marketing Budget will describe fully, to the
extent practicable, the proposed plan for commercialization of the Product in
each country in the Co-Promotion Territory, including overall marketing
strategy, marketing, sales and promotion efforts to be performed by each Party,
market and sales forecasts, pricing and discounting analysis and estimated
launch date, as well as advertising and other promotional materials to be used
in the co-promotion of Products. The Marketing Plan will take into consideration
market conditions, regulatory factors and competition with respect to Products.
The Marketing Budget will include all projected Co-Promotion Expenses for the
Product. The initial Marketing Plan and Marketing Budget shall be prepared by
the MC no later than [ * ] months after the first filing of an NDA (or its
foreign equivalent) for a Product in any country in the Co-Promotion Territory.
Each such Marketing Plan and Marketing Budget shall thereafter be updated by the
MC every [ * ] months.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
21.
<PAGE>
f. Promotional and Advertising Materials in the Co-Promotion
Territory. In the Co-Promotion Alternative, the Parties shall disseminate in the
Co-Promotion Territory only those promotional and advertising materials that
have been provided or approved for use by the MC, and the cost of producing such
materials shall be a Co-Promotion Expense of the Party incurring such cost. All
such materials shall be consistent with the relevant Marketing Plan and
Marketing Budget approved by the MC and neither Party shall make any claims or
representations in respect of the Products that have not been approved by the
MC. In all written or visual materials related to Products that identify either
of the Parties, the Parties will be presented and described to the medical
communities (including, for example, the physician, pharmacy, governmental,
reimbursement and hospital sectors) as joining in the promotion of the Product
as permitted by applicable law. All such written and visual materials and all
documentary information, promotional material and oral presentations (where
practical) regarding the promotion of the Product will state this arrangement
and will display the JT and Tularik names and logos with equal prominence as
permitted by applicable law and as directed by the MC.
g. Miscellaneous. In the Co-Promotion Alternative, the MC shall by
unanimous decision designate a Party as being primarily responsible in the Co-
Promotion Territory for returns, orders and samples. In addition, the MC shall
by unanimous decision determine the policies and procedures necessary to
implement the foregoing.
h. Cross-Border Sales. JT agrees that it shall not, and that it
shall not grant the right to any affiliate or Third Party to, use, sell, offer
for sale or import [ * ] or resulting Products in any country outside of the JT
Territory and [ * ], and that JT shall use reasonable efforts to deter the
importation of [ * ] or resulting Products into any country outside of the JT
Territory and [ * ] by its affiliates and licensees. Tularik agrees that,
during the [ * ], it shall use its reasonable efforts to prevent [ * ] in any
country outside of the Tularik Territory and [ * ], and that Tularik shall use
reasonable efforts to deter [ * ] or resulting Products into any country outside
of the JT Territory and [ * ]. JT and Tularik agree that the JDC shall
determine the country or countries in which Products shall be manufactured. JT
and Tularik recognize that in certain territories, and in particular in free
trade regions, customers or other third parties may import [ * ] or resulting
Products purchased in one country for use in another. [ * ].
Section 6. Determination of Payments.
a. Co-Promotion Expenses. In the Co-Promotion Alternative, Tularik
shall be responsible for paying [ * ] of all Co-Promotion Expenses and JT shall
be responsible for paying [ * ] of all Co-Promotion Expenses. "Co-
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
22.
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Promotion Expenses" shall include, without limitation, the following expenses
incurred by a Party to the extent allocable to the co-promotion of Products in
all countries in the Co-Promotion Territory, calculated in accordance with U.S.
Generally Accepted Accounting Practices, consistently applied ("GAAP"): [ * ],
all as defined in Appendix D.
b. Co-Promotion Profits and Losses. In the Co-Promotion
Alternative, profits and losses shall be determined as follows. If Net Sales
during any calendar quarter exceed Co-Promotion Expenses during such quarter,
such excess shall be "Co-Promotion Profit." If Net Sales during any calendar
quarter does not exceed Co-Promotion Expenses during such quarter, such excess
shall be "Co-Promotion Loss." Subject to adjustment pursuant to Section 10(e),
[ * ] Party's "Share of Co-Promotion Profit" shall equal [ * ].
c. Payment and Reporting. In the Co-Promotion Alternative, payments
and reporting shall be made as follows. Within thirty (30) days after the close
of [ * ] in which Products are sold in the Co-Promotion Territory, or earlier if
possible, during the Term (i.e., [ * ]), Tularik shall furnish to JT a statement
containing the Net Sales achieved, and the Co-Promotion Expenses incurred, by it
in such calendar quarter for each country in the Co-Promotion Territory. Within
[ * ] after the close of [ * ] in which Products are sold, or earlier if
possible, during the Term (i.e., [ * ], JT shall furnish to Tularik a statement
(the "P&L Statement") setting forth for each country in the Co-Promotion
Territory, Net Sales of each Product, [ * ] (as defined in Section 6(l)), Co-
Promotion Expenses and all data on which the determination of each Party's Share
of Co-Promotion Profit or Share of Co-Promotion Loss was calculated. If either
Party owes an amount to the other Party pursuant to Section 6(a) or 6(b), it
shall make such payment within [ * ] after receipt of the P&L Statement, but in
no event shall such payment be due earlier than [ * ] after the end of the
relevant quarter. If the Term ends during an accounting quarter, the amounts
due hereunder shall be calculated for such shortened calendar quarter.
d. Promotion Expenses in the Exclusive Territory. "Promotion
Expenses" shall include, without limitation, the following expenses incurred by
a Party to the extent allocable to promotion of the Product in all countries
within such Party's Exclusive Territory in accordance with GAAP: [ * ], as
defined in Appendix D.
e. Royalty Rate. At least [ * ] prior to the commencement of sales
of Product by a Party in any country within such Party's Exclusive Territory,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
23.
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such Party ("Marketing Party") shall provide the other Party ("Non-Marketing
Party") with its good faith estimates ("Estimates") of [ * ] expected in all
countries within the Marketing Party's Exclusive Territory during the remaining
portion of the fiscal year in which sales of such Product are commenced, on a
quarterly basis. In addition, the Marketing Party shall at the same time provide
the Royalty Rate (as defined in Section 6(f)) calculated pursuant to Section
6(f) using the Estimates. The Marketing Party shall also provide supporting
information appended to the Estimates, clearly setting forth the assumptions
made and calculations used in deriving the Royalty Rate (the "Supporting
Calculations"). At least fifteen (15) days prior to the beginning of each
subsequent fiscal year, the Marketing Party shall provide the Non-Marketing
Party with its Estimates for such fiscal year, together with the Supporting
Calculations.
f. Calculation of Royalty Rate. The "Royalty Rate" shall be equal
to [ * ]; provided, however, that the Royalty Rate shall be equal to [ * ]
("Pre-Tax Loss").
g. Meetings to Discuss Estimates. The Non-Marketing Party may call a
meeting of the Parties to review and discuss in good faith the Estimates and the
Supporting Calculations (including the resulting Royalty Rate). Such meeting
shall be held at a mutually agreeable time and place not more than [ * ] after
notice is given by the Non-Marketing Party. In the event that the Non-Marketing
Party disagrees with the Estimates, the attending representatives of both
Parties will enter into good faith discussions to resolve the disagreement. In
the event that the attending representatives are unable to reach an agreement,
then the issue shall be referred to the MC for unanimous resolution.
h. Royalty Payments. Within [ * ] of the end of each fiscal quarter
following the commencement of sales of a Product in the Marketing Party's
Exclusive Territory, the Marketing Party shall pay a royalty to the Non-
Marketing Party equal to [ * ] during such quarter (the "Royalty Payment").
i. Audited Report of Actual Net Sales, Cost of Goods and Promotion
Expenses. Within [ * ] following the [ * ], or earlier if possible, the
Marketing Party shall provide the Non-Marketing Party with an audited report of
actual Net Sales and Cost of Goods in all countries within the Marketing Party's
Exclusive Territory and all Promotion Expenses in all such countries ("Actual
Results").
j. Royalty Adjustment. In the event that the Actual Results include
a Pre-Tax Loss in the year of commencement of sales of a Product or in
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
24.
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any subsequent fiscal year, [ * ] of such loss shall be deducted from future
Royalty Payments otherwise owed by the Marketing Party to the Non-Marketing
Party pursuant to Section 6(f), on a Product-by-Product basis, until fully
liquidated.
k. Records. JT and Tularik each shall keep accurate books and
accounts of record in connection with the manufacture, use and/or sale by or for
such Party of all Products and Independent Products in the Territory in
sufficient detail to permit accurate determination of all figures necessary for
verification of royalties, profits, milestone payments and other compensation
required to be paid hereunder. JT and Tularik shall maintain such records for a
period of 3 years after the end of the year in which such records were
generated. At such Party's expense, a Party, through a certified public
accountant reasonably acceptable to the other Party, shall have the right to
access the books and records of the other Party for the sole purpose of
verifying amounts due pursuant to this Agreement. Such access shall be permitted
only upon reasonable prior written notice to the other Party during ordinary
business hours and not more frequently than once during each calendar year.
l. [ * ]. Each Party's share of the [ * ] shall equal [ * ]. Each
Party shall pay to the other Party such other Party's [ * ] share of the [ * ]
within thirty (30) days of receipt of such [ * ]. [ * ] means all royalties
received from [ * ].
Section 7. Trademarks. The Parties, through the MC, shall mutually agree
upon the trademark or trademarks (each a "Trademark"). To the extent
commercially reasonable and appropriate, a single Trademark shall be used for
each Product in each country in the Territory. To the extent the MC determines
that the use of a single Trademark is impractical given cultural and other
differences among countries in the Co-Promotion Territory, each Party shall have
the right to designate a different Trademark for use within different countries
within the Territory; provided, however, that in no event shall different
Trademarks be used for the same Product within the same country in the
Territory. Each Party shall have the right to designate a different Trademark
for use within different countries within such Party's Exclusive Territory.
Each Trademark shall be used only in connection with the applicable Product and
shall not be used by either Party on or in connection with any other product.
The MC shall assign responsibility to one or both Parties for searching,
clearing, filing, prosecuting, maintaining and all reasonable steps necessary in
defending each Trademark. The MC shall approve all trade dress, logos, slogans,
designs and copyrights used on and in connection with any Product in the
Territory. During the Term, the MC
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
25.
<PAGE>
shall approve all printed materials bearing each Trademark, including but not
limited to business materials, printed materials, advertising materials,
promotional materials and any such other materials that may reference or
incorporate such Trademark. In the event that any action or proceeding is
brought against either or both JT or Tularik, any alleged infringement of a
Third Party's trademark, trade dress or similar intellectual property rights,
each Party shall promptly notify the other and cooperate in the defense of any
such action or proceeding, as applicable. The MC shall be responsible for the
management of such action. In the event Tularik or JT becomes aware of any
actual or threatened violation of any Trademark in any country in the Territory,
that Party shall promptly notify the other Party and the MC shall promptly
discuss how to proceed in connection with such actual or threatened violation.
Section 8. Supply Of Product.
a. Supply of Product. The JDC shall be responsible for determining
the sources of, and arrangements for, the manufacture and supply of Products
that the JDC believes will result in long-term profit maximization for such
Products. The JDC shall endeavor to [ * ].
b. Specifications for Products. The Parties shall designate one of
the Parties to be responsible for establishing, subject to approval by the MC,
the specifications for bulk and finished Product, and providing any necessary
documentation, certificates of analysis and test results, for the relevant
Product to be manufactured under this Section 8. Copies of all such
specifications and other information and documentation will be provided promptly
to the Parties. In addition, notice of, and results and data from, all FDA (or
its foreign equivalent) audits relating to the manufacture of Product will be
provided to the Parties. The Cost of Goods (including qualification batches for
FDA (or its foreign equivalent) approval) for Products actually used (and not
sold) for all Pre-Clinical Development and Development studies shall be included
in Development Costs.
c. Terms of Manufacture and Supply. The MC shall establish
procedures acceptable to both Parties regarding forecasts of requirements of the
Products.
Section 9. Regulatory Matters.
a. Side Effects and Adverse Events. During the Term, each Party
shall promptly advise the other by telephone, telefax or overnight delivery
service of every serious or unexpected side effect, adverse reaction or injury
that
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
26.
<PAGE>
has been brought to that Party's attention and which is alleged to have
been caused by a Product. For each country in the Territory, the Party that has
the responsibility for filing the Drug Approval Application and the IND (or
foreign equivalent) in such country for such Product shall have all rights and
responsibilities to report such side effect, adverse reaction or injury to the
appropriate regulatory authorities as required by applicable law.
b. Communication with Regulatory Agencies. If a Party is contacted
by the FDA or any equivalent regulatory agency in any country in the Territory
during the Term pertaining to this Agreement or to a Product, Tularik and JT
shall promptly, but always within [ * ] days, notify and consult with one
another. The Party that has filed the Drug Approval Application in such country
within the Territory or, if no Drug Approval Application has been filed, the
Party which has filed the IND (or foreign equivalent) in such country within the
Territory shall provide an appropriate response to such contact after such
consultation with the other Party.
c. Product Recall. In the event that JT or Tularik determines that
an event, incident or circumstance has occurred that may result in the need for
a recall or other removal of any Product or any lot or lots thereof from the
market in a country within the Territory, it shall promptly advise and consult
with the other Party with respect thereto. Thereafter, on a country-by-country
basis, the owner of the NDA for such Product in a country (or foreign
equivalent) shall, in its sole discretion, have the right to order a recall or
other removal after such consultations and the other Party shall co-operate with
such recall.
10. Financial provisions.
a. Research Payments. In support of Tularik's activities in the
Research Program, JT shall pay Tularik (i)(A) [ * ]; and, unless the Research
Program is previously terminated as provided in Section 2(g), [ * ]. Any
payments made by JT to Tularik pursuant to this Section 10(a) shall not affect
in any way the calculation of [ * ].
b. Milestone Payments. (i) JT will make the following payments to
Tularik in US Dollars within [ * ] of the first occurrence of each event listed
below in any one of [ * ]:
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
27.
<PAGE>
Event Payment
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
(ii) JT will make the following payments to Tularik in US Dollars within [
* ] of the first occurrence of each event listed below in any one of [ * ]:
Event Payment
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
(iii) In the event all of the listed events above are not achieved for a
Collaboration Lead Compound or Product, payments due for any listed events not
achieved for such Collaboration Lead Compound or Product shall be made with
respect to other Collaboration Lead Compounds or Products until such time as
each of the listed events has been achieved.
(iv) In the event that Tularik receives milestone payments from [ * ]
relating to a Program Product (as defined in the [ * ]) or following the
approval of such NDA (or equivalent), Tularik shall remit to JT within thirty
(30) days of the receipt of such milestone payments an amount equal to [ * ] of
the amount received [ * ]. The Parties acknowledge and agree that [ * ].
c. Taxes. The burden of all withholding or similar taxes that may
be imposed by any governmental authority on milestone, royalty and profit share
payment amounts set forth in this Agreement shall be [ * ].
d. Reports. Tularik shall provide JT with a quarterly report
describing Tularik's use of the annual payments received from JT pursuant to
Section 10(a) for research purposes. Such report shall include the following
two categories of expenditures: (i) "Personnel Costs" and (ii) "Other Costs."
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
28.
<PAGE>
e. Loans from JT. JT will make available to Tularik, under and
subject to certain additional terms and conditions as provided in a loan
agreement to be executed by the Parties on the Execution Date ("Loan
Agreement"), an irrevocable loan commitment to finance an aggregate amount of up
to $20 million (the "Aggregate Commitment"); provided, however, JT shall not be
required to finance any portion of Aggregate Commitment that has not previously
been disbursed in the event this Agreement terminates pursuant to Article 13
hereof. The Aggregate Commitment shall be used by Tularik to finance the portion
of Development Costs to be borne by Tularik for [*] (or equivalent) pursuant to
this Agreement [*], commencing with the initiation of [*] (or equivalent)(the
"Eligible Development Costs"). Such Aggregate Commitment may be drawn in
multiple disbursements in amounts ("Amounts Drawn") and at times ("Funding
Dates") requested by Tularik to: (i) pay for those Eligible Development Costs
that are payable within [*] as estimated by the Development Budget; and (ii)
reimburse JT for [*] and payable by Tularik pursuant to Section [*]; provided,
--------
however, that [*] of such Aggregate Commitment may be Amounts Drawn to finance
- - --------
[*] Lead Compound [*]; provided further that in no event may there be
-------- -------
Amounts Drawn on [*] Collaboration Lead [*]. Loans made by JT to Tularik
pursuant to such Loan Agreement for a Collaboration Lead Compound or resulting
Product shall provide for [*] of Amounts Drawn on such Collaboration Lead [*],
and interest accrued on such Amounts Drawn, over a five-year period ("Repayment
Dates") commencing on [*] of the first to occur of: (i) the first sale of the
Product resulting from such Collaboration Lead Compound; or (ii) a [*] the JDC
to [*] such Collaboration Lead Compound or resulting Product. Interest on
Amounts Drawn shall accrue from the Funding Dates to the Repayment Dates and
shall equal (i) the sum of the then-prevailing 5-year: (A) [*]; and (B) [*];
divided by (ii) [*]. In addition, Tularik's Share of Co-Promotion Profit and the
Royalty Rate for [*] for which Tularik shall have Amounts Drawn pursuant to the
Loan Agreement shall [*]. In addition to the foregoing, during the [*] period
immediately following the receipt by the Parties of executed reports covering
all aspects of [*] on a Product, JT and Tularik shall negotiate in good faith
the terms and conditions under which JT may [*] the Aggregate Commitment, and
the definition of Eligible Development Costs, to include Development Costs to be
incurred in [*].
11. Intellectual Property. Each Party shall remain the sole owner or
licensee, as applicable, of all technology, compounds, discoveries and
inventions owned or controlled by such Party relating to the: (a) [ * ] Targets
on the Preliminary Agreement Date; and (b) [ * ] on the Agreement Date or during
the Term that are created or acquired outside the scope of this Agreement. Each
Party shall have no rights in or to the technology, compounds, discoveries and
inventions owned by the other Party except as specifically granted herein. All
inventions or discoveries made, and materials and information created, jointly
by employees, agents or consultants of both Parties in the course of conducting
activities pursuant to this Agreement shall be jointly owned, without regard, in
the case of inventions or discoveries relating to Lead Compounds, Collaboration
Lead Compounds and Products, to the Party that provided the compound library
from which such invention or discovery was derived. All inventions or
discoveries made, and materials and information created solely by employees,
agents or consultants of one Party in the course of conducting activities
pursuant to this Agreement shall be owned solely by the Party whose employees,
agents or consultants made such invention, without regard, in the case of
inventions or discoveries relating to Lead Compounds, Collaboration Lead
Compounds and Products, to which Party provided the compound library from which
such invention or discovery was
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
29.
<PAGE>
derived. Inventorship shall be determined in accordance with the U.S. patent
laws. [ * ].
12. Confidential Information. Each Party agrees that proprietary and
confidential information regarding either Party's technology and intellectual
property, as well as information regarding the Research Program, Lead Compounds,
Collaboration Lead Compounds, Products and other matters material to this
Agreement or to the Collaboration Agreement shall not be disclosed to any Third
Party, other than [ * ], or used except as permitted hereby during the term
hereof and for a period of five (5) years after its expiration or termination,
except to the extent it can be shown by competent written record that such
information is now or subsequently becomes, without breach of any obligation by
the Party receiving such information hereunder, public knowledge or is lawfully
disclosed to or independently developed by such Party. Any information disclosed
to a Scientific FTE of one Party who is resident with the other Party shall be
deemed the confidential information of the Party with whom such Scientific FTE
is in residence.
13. Term. This Agreement shall expire upon the earlier of the execution
of the Collaboration Agreement or the end of the Term. "Term" shall mean the
period from: (a)(i) the Preliminary Agreement Date with respect to the [ * ];
or (ii) the Agreement Date with respect to the [ * ]; until (b) the later to
occur of (i) the expiration of all patents on Products; [ * ]; provided,
however, that [ * ]. Either Party may terminate this Agreement for material
breach by the other Party, if such breach remains uncured for [ * ] after the
breaching Party receives written notice thereof from the other Party. Except to
the extent required by law, the Parties agree not to disclose the material terms
of this Agreement to Third Parties (other than its affiliates) without the other
Party's prior written consent during its term and after its expiration or
termination. In the event this Agreement expires or terminates and the
Collaboration Agreement shall not have been executed by the Parties, then the
provisions of Sections 4, 10, 11 and 12 shall survive such expiration or
termination and each Party shall return promptly any of the other Party's
confidential information and biological or chemical materials provided to it
pursuant to this Agreement.
14. Diligence. Subject to Section 3(c), 3(l) and 3(m), JT and Tularik
shall use commercially reasonable efforts to develop the Lead Compounds and
Collaboration Lead Compounds pursuant to this Agreement consistent with the
efforts such Party expends on compounds involved in its other research and
development programs that have comparable market potential. Subject to Section
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
30.
<PAGE>
5(c), JT and/or Tularik shall use commercially reasonable efforts to develop and
market Products pursuant to this Agreement, consistent with the efforts it
expends on its other products having comparable market potential. If a Party
disagrees on whether the other Party's actions are commercially reasonable, such
disagreement shall be resolved in accordance with Section 19.
15. Representations and Warranties. Each Party hereby represents and
warrants that such Party has full corporate power and authority under the laws
of the state or country of its incorporation to enter into this Agreement and
carry out the provisions hereunder and that the person executing this Agreement
on each Party's behalf has been duly authorized to do so by all requisite
corporate action.
a. Other than with respect to the [ * ] as provided in the [ * ] and
the [ * ], each Party represents and warrants that, as of the date of this
Agreement, it is not a Party to any agreement, arrangement or understanding with
any Third Party that in any significant way prevents such Party from fulfilling
any of its material obligations under the terms of this Agreement.
b. Other than with respect to the [ * ] as provided in the [ * ] and
the [ * ], each Party covenants that it will not commit any acts or fail to take
any action that would be in material conflict with its obligations under this
Agreement.
c. Other than with respect to the [ * ] as provided in the [ * ] and
the [ * ], each Party represents and warrants to such Party's best knowledge as
of the date of this Agreement: [ * ].
d. Each Party represents and warrants that [ * ].
16. Binding Agreement. Each Party represents this Agreement is a legal
and valid obligation, binding upon it and enforceable in accordance with its
terms. Each Party represents it has not and will not during the term of this
Agreement grant any right to any Third Party that would conflict with the rights
granted to the other Party hereunder.
17. Provisions to be Included. The Collaboration Agreement shall include
the terms specified in this Agreement and other terms customary in the
pharmaceutical industry for agreements governing the research, development and
commercialization of pharmaceutical products including, without limitation,
enforcement of Program Patents, defense against Third Party claims of
infringement, payments, information and reports, indemnification, relationship
of the Parties, assignments, notices, amendments, waiver, counterparts, force
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
31.
<PAGE>
majeure, headings, governing law, language, entire agreement and public
announcements.
18. Severability. If any part of this Agreement is declared invalid by
any legal authority having jurisdiction over either Party, then such declaration
shall not affect the remainder of the Agreement, which shall continue in full
force and effect. The Parties shall revise the invalidated part in a manner
that will render such provision valid and closely approximate the Parties'
original intent.
19. Dispute Resolution. In the event of any controversy or claim arising
out of, relating to or in connection with any provision of this agreement, the
Parties shall try to settle their differences amicably between themselves by
referring the disputed matter to the committee(s) provided in Article 1. Any
unresolved disputes arising between the Parties arising out of, relating to, in
connection with or in any way connected with this Agreement or any term or
conditions hereof, or performance by either Party of its obligations hereunder,
whether before or after termination or expiration of this Agreement, shall be
finally resolved by binding arbitration, except that any disputes regarding the
validity, scope or enforceability of patents shall be submitted to a court of
competent jurisdiction. The arbitration shall be held in San Francisco,
California according to the rules of the American Arbitration Association
("AAA"). The arbitration will be conducted by a panel of three (3) arbitrators
with significant experience in the pharmaceutical industry appointed in
accordance with applicable AAA rules. Any arbitration herewith shall be
conducted in the English language to the maximum extent possible. Each Party
shall bear its own costs and attorney's and witness' fees. Judgment on the award
so rendered shall be final and may be entered in any court having jurisdiction
thereof.
20. Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their permitted successors and assigns;
provided, however, that neither Party shall assign any of its rights and
obligations hereunder without the prior written consent of the other Party
except in connection with the merger, consolidation, reorganization or
acquisition of stock or assets affecting substantially all of the assets or
actual voting control of the assigning Party.
21. Governing Law. This Agreement shall be governed by California law,
notwithstanding its conflicts of laws principles.
22. Entire Agreement, Amendment. This Agreement sets forth the principal
terms of the arrangement between the Parties hereto and, except as otherwise set
forth herein, supersedes and terminates all prior agreements and
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
32.
<PAGE>
understandings between the Parties, including without limitation the Original
Agreement. No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon the Parties unless reduced to writing and signed
by an authorized officer of each Party.
23. Public Announcements. Each Party agrees that, prior to the execution
of the Agreement, except as may be required by law, it shall not disclose the
existence, substance or details of this Agreement without the prior written
consent of the other Party, such consent not to be unreasonably withheld.
Nothing herein shall prevent either Party from disclosing such information as
reasonably necessary to its affiliates; provided, however, each Party shall take
such steps necessary to ensure that such affiliates agree to be bound to the
provisions of this Section 23. In cases in which disclosure may be required by
law, the disclosing Party, prior to such disclosure to the extent practicable,
shall notify the non-disclosing Party of the contents of the proposed
disclosure. Consistent with applicable law, the non-disclosing Party shall have
the right to propose reasonable changes to the disclosure to protect its
interests, provided that it requests such changes promptly after the potential
disclosure is submitted to it. The disclosing Party shall not unreasonably
refuse to include such changes in its disclosure.
24. Tularik's Role. JT acknowledges that Tularik [ * ] in the conduct of
research and development activities [ * ]. Furthermore, JT acknowledges that the
role of Tularik in identifying, selecting, evaluating and developing compounds
for JT under this Agreement [ * ]. JT, its affiliates, successors and assigns,
shall not [ * ], nor shall it [ * ], any [ * ] any administrative agency, [ * ]
against Tularik, its affiliates, successors, directors, partners, attorneys,
representatives, stockholders, investors, agents, employees, former employees,
or any person acting by, through, under or in concert with each or any of them,
based upon [ * ] where such [ * ] or other compounds that [ * ] and shall not,
from any source or [ * ] therefrom; provided, however, that the foregoing
-------- -------
covenant not to sue shall not apply to the extent that such [ * ]. Anything in
this Section 24 to the contrary nothwithstanding, in the event that [ * ] that
is identical in all material respects to [ * ], Tularik shall either: [ * ] to
any provision that Knoll accepts for inclusion into the Knoll Agreement; or
(ii) [ * ] in the event that [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
33.
<PAGE>
If this Agreement correctly sets forth your understanding of the agreement
between JT and Tularik, please confirm by signing and returning the duplicate
copy, addressed to my attention.
Tularik Inc.
By: /s/ David V. Goeddel
---------------------------------
Title: Chief Executive Officer
AGREED:
Japan Tobacco Inc.
By: /s/ Masakazu Kakio
---------------------------------
Title: Executive Director, Pharmaceutical Business
Date: October 21, 1998
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
34.
<PAGE>
APPENDIX A
RESEARCH PLAN
The details of the Research Program described in this Agreement are as follows:
1. The parties will jointly undertake, under the direction of the RMC, basic
research towards the objectives of the Research Program.
2. The following tasks will be shared by both parties:
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
3. Details will be discussed and determined by the RMC. An initial meeting of
the RMC will take place within one month of the date of execution of this
Agreement.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
APPENDIX B
DESCRIPTION OF TULARIK EXISTING
TECHNOLOGY APPLICABLE TO THE FIELD
I. Summary of [ * ] Tularik Technology
[ * ] has taken an aggressive approach to [ * ], [ * ] patent applications on
[ * ] drug discovery targets, assay technology, compounds and compound
utilities. Thus far, [ * ] patent applications relevant to activities in [ * ]
have been filed. Brief summaries of the matter embodied in these applications
are provided below.
1. THE [ * ] OF THE [ * ]
[This invention relates to the [ * ] and its uses in [ * ]. The application
discloses [ * ] is linked to a [ * ] the use of these cells in [ * ]. Claims
are also directed to binding assays involving the [ * ]. In addition to these
assay-related inventions, this application also covers [ * ]
2. [ * ] ASSAY
This invention, which concerns [ * ] relating to the initial assay(s) Tularik
will carry out in this project, provides [ * ] for screening to discover drugs
that regulate [ * ]. Specifically, the methodology is relevant to
indentification of agents active at the level of [ * ]. The methods claimed
include [ * ] using [ * ] from [ * ] at least [ * ] to monitor the effects of
drug candidates on [ * ]. Compositions covered include [ * ]. Matter embodied in
this application also includes [ * ].
3. [ * ] ASSAY
This invention involves [ * ] which interfere with [ * ]. The scope of this
[ * ] is quite broad, providing [ * ] that are active at the level of [ * ], and
covers a general class of [ * ] which have been developed by [ * ]. Essentially,
the methodology involves combining a [ * ] which recognizes the [ * ], and
capturing the resulting complex with an [ * ]. Unbound transcription factor is
[ * ] is detected. Compounds that [ * ] are detected by observation of [ * ].
The invention includes [ * ] of this methodology. As appropriate, this
methodology may be utilized for a biochemical assay(s) to detect [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
APPENDIX C
DESCRIPTION OF JAPAN TOBACCO EXISTING
TECHNOLOGY APPLICABLE TO THE FIELD
Summary of JT Patent Applications Relevant to the Obesity Project
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
APPENDIX D
Definitions for Calculation of Co-Promotion Expenses, Development Costs
and Promotion Expenses in the Exclusive Territory
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ]
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
APPENDIX E
Description of Scientific FTE Rate
The initial Scientific FTE rate that will be used by the Parties in
preparing the Development Budget and determining Development Costs is [ * ].
Such rate is composed of the following expense categories in the amounts
indicated:
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
The Scientific FTE rate shall be adjusted annually such that [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
APPENDIX F
Kiyose Letters
October 9, 1998
Via Facsimile 011 81 3 5572 1449
K. Kiyose, Esq.
Japan Tobacco Inc.
Pharmaceutical Business Development
2-2-1, Toranomon 2-chome
Minato-ku, Tokyo 105-8422 JAPAN
Dear Mr. Kiyose:
Thank you for taking time to speak with me yesterday about the JT/Tularik
Obesity Agreement. I enclose for your review certain changed pages. Due to some
redlining errors in the draft sent to you on September 24, 1998, the attached
changed pages are marked against the draft sent on September 21, 1998. While
this approach may result in your having to re-read some provisions that you have
already reviewed, it will avoid the possibility that changes in the September
24, 1998 draft were not read because they were not marked.
In addition, I set forth below the logic that permits the [ * ] able to
commercialize [ * ] resulting from the collaboration with Tularik in the JT
Territory. Given confidentiality restrictions, we are unable to provide you
with a copy of the Knoll Agreement.
The structure of the [ * ] is comparable to [ * ] in that the [ * ] the [ * ].
In both instances, the License Agreements contain [ * ]. Moreover, both [ * ]
required to [ * ] prior to the [ * ].
However, under the [ * ] is not required to [ * ] agreement to [ * ] that does
not require [ * ]. By contrast, the [ * ] requires that [ * ] a [ * ] agreement
prior to the [ * ] studies on [ * ] of whether [ * ] necessary to [ * ]. The
consequences of [ * ] to the [ * ]. In addition to a [ * ], [ * ] the [ * ]
surrounding the [ * ] have been [ * ]. Accordingly, even if [ * ] to [ * ]
without [ * ] (with its concomitant [ * ]), [ * ] would automatically [ * ] such
[ * ].
Given the foregoing [ * ], we believe that [ * ] We trust that you will reach
the same conclusion. Please let me know if I can provide you with any further
information that will be of assistance in your analysis.
Thank you in advance for distributing this to the other members of the JT team
(presumably, Mr. Yoneyama, Mr. Yamada and Mr. Kamiya).
Sincerely yours,
/s/ William J. Rieflin
- - ----------------------
William J. Rieflin
Vice President, General Counsel & Secretary
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
October 14, 1998
Via Facsimile 011 81 3 5572 1449
K. Kiyose, Esq.
Japan Tobacco Inc.
Pharmaceutical Business Development
2-2-1, Toranomon 2-chome
Minato-ku, Tokyo 105-8422 JAPAN
Dear Mr. Kiyose:
Thank you for your letter dated October 14, 1998 concerning changes to the
JT/Tularik Obesity Agreement [ * ]. I attach copies of changed pages from the
revised draft sent to you on October 9, 1998 that incorporate your proposed
modifications.
We can confirm that the [ * ] requires the [ * ] studies by [ * ].
Additionally, we can confirm that [ * ] contains [ * ] provision. [ * ].
With respect to your fourth paragraph, we accept your [ * ]. However, this
acceptance is conditioned upon [ * ] until the [ * ]. While we were willing to
defer [ * ] until we reached [ * ] with the [ * ], we are unwilling to [ * ] to
the [ * ].
We can confirm that [ * ] arising out of [ * ] will be eligible for [ * ]. The
[ * ] of such [ * ] is provided in Section [ * ].
With regard to the [ * ], we have previously considered removing references to
such agreement in both the [ * ]. We decided to [ * ] in [ * ] on the theory
that, while it [ * ] that the [ * ], there is always the possibility that [ * ].
Given this possibility, it will be easier to [ * ] in [ * ] than to [ * ] to
[ * ] in the [ * ].
Thank you in advance for distributing this to the other members of the JT team
(presumably, Mr. Yoneyama, Mr. Yamada and Mr. Kamiya).
Sincerely yours,
/s/ William J. Rieflin
- - ----------------------
William J. Rieflin
Vice President, General Counsel & Secretary
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
Exhibit 10.16
LICENSING AGREEMENT
This Licensing Agreement ("Agreement"), effective as of September 24, 1999,
by and between Eli Lilly and Company, an Indiana corporation with its
principal office located at Lilly Corporate Center, Indianapolis, Indiana
46285 ("Lilly"), and Tularik, Inc., a Delaware corporation with its principal
offices located at Two Corporate Drive, San Francisco, California 94080
("Tularik").
RECITALS
1. Whereas, Lilly is engaged, among other things, in the business of
manufacturing, marketing and selling oncolytic pharmaceutical products;
2. Whereas, Lilly has entered into a prior agreement with Princeton
University ("Princeton") establishing a research program relating to
antimetabolite compounds, which has led to a drug candidate known as
lometrexol which is an oncolytic agent in the therapeutic class known as
antifolates;
3. Whereas, Lilly holds an exclusive license, with the right to sublicense,
under certain patents and patent applications held by Princeton relating to
lometrexol and, in addition, Lilly owns certain patents and patent applications,
and has generated certain regulatory filings and related know-know, for
lometrexol; and
4. Whereas, subject to the terms and conditions set forth in this
Agreement, Lilly wishes to exclusively license to Tularik and Tularik wishes
to exclusively license from Lilly rights under patents and patent applications
related to lometrexol; and
5. Whereas, subject to the terms and conditions set forth in this
Agreement, Lilly also wishes to sell to Tularik and Tularik wishes to purchase
from Lilly the regulatory data, know-how and inventory related to lometrexol.
Now Therefore, the Parties hereto, intending to be legally bound, hereby
agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms shall
-----------
have the meanings set forth below:
"Affiliates" shall mean, with respect to a Party to this Agreement, any
----------
Persons directly or indirectly controlling, controlled by, or under common
control with, such other Person. For purposes hereof, the term "controlled"
(including the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the direct or indirect ability or power
to direct or cause the direction of management policies of such Person or
otherwise direct the affairs of such Person, whether through ownership of equity
participation, voting securities,
<PAGE>
beneficial interest, by contract or otherwise. Affiliate shall specifically
exclude third parties to which Tularik has granted a sublicense pursuant to
authority granted by this Agreement where Tularik has no relationship to the
sublicensee other than a licensor-licensee relationship.
"Assumed Liabilities" shall have the meaning set forth in Section 2.3
-------------------
hereof.
"Calendar Quarter" shall mean a calendar quarter (i.e., period of three (3)
----------------
consecutive months) ending on March 31, June 30, September 30 or December 31.
"Calendar Year" shall mean any period of twelve (12) consecutive months
-------------
ending on December 31.
"Compulsory License" means a compulsory license under the Licensed Patents
------------------
obtained by a third party through the order, decree, or grant of a competent
governmental authority, authorizing such third party to manufacture, use, sell,
offer for sale or import the Product in a particular territory.
"Damages" shall mean any and all costs, losses, claims, liabilities, fines,
-------
penalties, damages and expenses, court costs, and reasonable fees and
disbursements of counsel, consultants and expert witnesses incurred by a Party
hereto (including any interest payments which may be imposed in connection
therewith).
"Effective Date" shall be the date set forth in the first paragraph of this
--------------
Agreement.
"EU" shall mean the European Union, including the following countries:
--
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom.
"FDA" shall mean the United States Food and Drug Administration, or any
---
successor thereto.
"GAAP" shall mean United States generally accepted accounting principles,
-----
consistently applied.
"Indemnified Party" shall have the meaning given in Section 7.2 hereof.
-----------------
"Indemnifying Party" shall have the meaning given in Section 7.2 hereof.
------------------
"Licensed Patents" shall mean all patents, both foreign and domestic,
----------------
including without limitation, all extensions, reissues, renewals,
reexaminations, patents of addition, supplementary protection certificates and
inventors' certificates thereof and pediatric data package or other exclusivity
extensions, and all pending patent applications (including substitutions,
provisionals, divisionals, continuations and continuations-in-part) heretofore
filed or having any legal force in any country together with any patents that
have issued or in the future issue therefrom, which are owned, controlled, or
licensed in (with the right to sublicense and subject to the rights of Third
Parties as of the Effective Date), including, without limitation, the Princeton
Patents, in whole or in part, by Lilly or any Affiliate of Lilly, and which
would be infringed by the developing, making, using, or selling of Product,
absent the license herein, including, without limitation, those patents and
patent applications listed in Exhibit A attached hereto, and any divisionals,
---------
continuations, refilings, extensions, and international counterparts thereof. A
complete description of the patents and patent applications in existence as of
the Effective Date are listed in Exhibit A attached hereto.
---------
"Major Countries" shall mean Canada, France, Germany, Italy, Japan, Spain,
---------------
United Kingdom and the United States.
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
"Manufacturing Information" shall mean all existing information in written
-------------------------
and electronic form that relates to: (1) synthetic chemical processes for the
production of [ * ] the active pharmaceutical ingredient in the Product, and
intermediates in the preparation of the Product, including the synthetic
methods and development reports generated by or for [ * ] but excluding the
synthetic methods and development reports generated by or for [ * ] (2) the in-
process analytical controls for production of each of: (a) the active
pharmaceutical ingredient in the Product; and (b) the Product; (3) the process,
formulation and development reports generated for the preparation of the
Product; (4) the analytical methods and validation for the quality control
release of each of: (a) the active pharmaceutical ingredient in the Product; and
(b) the Product; and (5) the stability protocols, stability indicating methods
and stability data for each of: (a) the active pharmaceutical ingredient in the
Product; and (b) the Product.
"Net Sales" shall mean, with respect to the Product, the gross amount
---------
billed or invoiced by Tularik, its Affiliates, and sublicensees to unrelated
third parties (excluding any sublicensee) for the Products, less
(a) credits or allowances, if any, given or made on account of
rejection or return of delivered Products;
(b) trade and quantity discounts actually allowed and taken in such
amounts as are customary in the trade; and
(c) duties, sales taxes, and excise taxes and transportation charges
to third party carriers actually paid by or on behalf of the party making the
sale.
Such amounts shall be determined from books and records maintained in
accordance with GAAP. In the event the Product is sold as part of a combination
product, or as part of bundled products or as part of a delivery system, the Net
Sales from the combination product, bundled product or delivery system, for the
purposes of determining royalty payments, shall be determined by multiplying the
Net Sales (as defined above) of the combination product by the fraction, A/(A+B)
where A is the average sale price of the Product when sold separately in
finished form and B is the average sale price of the other product(s) or system
sold separately in finished form or where A+B is the average sales price of the
product(s) and the delivery system together. In the event that such average sale
price cannot be determined for both the Product and such other product(s) or
system in combination, Net Sales for purposes of determining royalty payments
shall be calculated by multiplying the Net Sales of the combination products by
the fraction C/(C+D) where C is the Tularik's cost of goods of the Product and D
is Tularik's cost of goods for the other product(s) or system, determined in
accordance with the method of accounting normally employed by Tularik in
computing cost of goods.
"Party" or "Parties" shall mean either Lilly or Tularik or both.
----- -------
"Person" shall mean a natural person, a corporation, a partnership, a
------
trust, a joint venture, a limited liability company, any governmental authority
or any other entity or organization.
"Phase III Clinical Trial" shall mean large scale or pivotal human clinical
------------------------
trials conducted in patients in accordance with Good Clinical Practice and
intended to generate data concerning the safety and efficacy of the Product in
the particular indication tested sufficient to support registration of the
Product with health regulatory authorities.
"Princeton Agreement" shall mean the Agreement dated December 19, 1985,
-------------------
pursuant to which Lilly obtained an exclusive license under the Princeton
Patents.
"Princeton Patents" shall mean those patents both foreign and domestic,
-----------------
including, without limitation, all substitutions, extensions, reissues,
renewals, reexaminations, patents of addition, supplementary protection
certificates and inventors' certificates thereof and pediatric data package or
other exclusivity extensions and all pending patent applications (including,
without limitation, all substitutions, provisionals, divisionals, continuations
and continuations-in-part) which have been licensed by Lilly from Princeton, as
indicated in Exhibit A attached hereto.
---------
"Product" shall mean a finished pharmaceutical composition containing the
-------
compound lometrexol, [ * ] which may be included in any supplement, modification
or addition to the filings for Regulatory Approval of the foregoing compound.
"Product Data Package" shall include the following information and data
--------------------
directly related to the Product in the tangible possession or control of Lilly
as of the Effective Date: (a) the Regulatory Documents; [ * ]; and (e) such
other information and data specifically identified in Exhibit B attached hereto.
---------
Exhibit B shall represent a complete listing of the information and data
- - ---------
included in Product Data Package, as such term is used in this Agreement.
"Product Inventory" shall mean the Product inventory, in bulk or finished
-----------------
form, which Lilly owns or controls as of the Effective Date, as identified in
Exhibit C attached hereto.
- - ---------
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
"[ * ] Diligence" shall mean commercially reasonable efforts to develop and
---------
obtain Regulatory Approval in the Territory, consistent with accepted business
practices and legal requirements, and comparable to efforts in the
pharmaceutical industry applicable to development of compounds at an equivalent
stage of development and similar market potential.
"Regulatory Approval" shall mean (a) in the United States, approval by the
-------------------
FDA of an NDA, or equivalent application, for marketing approval and
satisfaction of any related applicable FDA registration and notification
requirements (if any) and (b) in any country other than the United States,
approval by the Regulatory Authority in such country of a single application or
set of applications comparable to an NDA.
"Regulatory Authority" shall mean the FDA in the United States or the
--------------------
equivalent governmental agency having jurisdiction in any other country in the
Territory.
"Regulatory Documents" shall mean the (a) United States investigational new
--------------------
drug application (IND) [ * ], and all amendments and annual reports to same, and
(b) Clinical Trial Exemption for the United Kingdom (CTX) [ * ], and all
amendments related to same.
"Royalty Term" shall mean, with respect to each country in which Product is
------------
sold, the period of time equal to the longer of (i) ten (10) years from the date
of first sale of the Product in such country, or (ii) the expiration of the
last-to-expire Licensed Patent listed in Exhibit A in such country that claims
such Product.
"Territory" shall mean the world, unless Tularik's license terminates with
---------
respect to a Major Country or Major Countries pursuant to Section 6.5, in which
case the Territory shall exclude any Major Country in which Tularik's license so
terminated.
"Transferred Assets" shall mean the Manufacturing Information, the Product
------------------
Inventory and the Product Data Package.
"Tularik Improvements" shall mean any inventions (including, without
--------------------
limitation, [ * ] identified and/or discovered by Tularik), patentable or not,
information and/or data relating to the Product, including, without limitation,
[ * ] necessary for the manufacture, use or sale of the Product, which are
developed or acquired by Tularik during the term of this Agreement and are owned
or controlled (with the ability to grant licenses or sublicenses, as the case
may be) by Tularik.
SECTION 2
GRANT OF LICENSES, TRANSFER OF TRANSFERRED ASSETS AND ASSUMPTION OF LIABILITIES
2.1 Grant of License. During the term of the Agreement and except as
----------------
expressly reserved by Lilly herein, Lilly hereby grants to Tularik an exclusive
sublicense under the Princeton Patents and an exclusive license under the Lilly
Patents to make, have made, use, sell, offer to sell and import the Product in
the Territory. The foregoing exclusive licenses shall be exclusive even as to
Lilly.
2.2 Transferred Assets. As of the Effective Date, Lilly hereby assigns,
------------------
transfers and conveys to Tularik all of Lilly's right, title and interest in and
to the Transferred Assets and Tularik hereby accepts such assignment, transfer
and conveyance. Within [ * ] following the Effective Date, Lilly shall transfer
to Tularik possession of the Transferred Assets. The [ * ] portion of
the Product Data Package shall be provided to Tularik [ * ]. Exhibit C shall
---------
include a notation indicating the format in which all other portions of the
Product Data Package shall be provided. Lilly shall be under no obligation to
[ * ]. In the event that Tularik is
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
unwilling or unable to assume physical possession of the Transferred Assets by
the end of the initial [ * ] period, Lilly shall be entitled to [ * ] beyond
such [ * ] period. Lilly shall ship the Transferred Assets to Tularik F.O.B to
Tularik's designated facilities. Following the receipt by Tularik of the
Transferred Assets, Lilly shall provide technical information or assistance
regarding the Product to Tularik as is reasonably requested by Tularik: (a)
[ * ]. Tularik acknowledges that Lilly makes no representations or warranties
with respect to the Transferred Assets (other than as expressly set forth in
Section 5 below) and that [ * ].
2.3 Liabilities Assumed by Tularik. Except as otherwise provided in this
------------------------------
Agreement, Tularik hereby assumes and agrees to bear and be responsible for and
to perform and satisfy all responsibilities, duties (including, without
limitation, compliance with all applicable laws and regulations), obligations
(including payment obligations), claims, Damages, liabilities, burdens and
problems of any nature whatsoever (collectively, the "Obligations") associated
directly or indirectly with Tularik's licensing and/or practice of the Licensed
Patents from and after the Effective Date and possession, use, ownership and
transport of the Transferred Assets from and after the Effective Date, as well
as those Obligations associated directly or indirectly with the manufacture,
development, marketing and sale of the Products from and after the Effective
Date, including, without limitation, [ * ] arising in connection with Products
on or after the Effective Date, except for (1) those Obligations with respect to
which [ * ] of this Agreement, and (2) the [ * ], which items shall remain the
responsibility of Lilly. All of the foregoing are hereinafter collectively
referred to as the "Assumed Liabilities."
2.4 Liabilities Not Assumed by Tularik. Anything herein to the contrary
----------------------------------
notwithstanding, Tularik shall not be deemed to assume any of the following
(collectively, the "Excluded Liabilities"):
(a) Any Obligations arising out of a claim of any third party relating
to the Product and arising out of or relating to [ * ].
(b) Any Obligations arising out of a claim by a government entity or
regulatory body relating to the Product and arising out of or relating to [ * ];
or
(c) Any Obligations arising out of a claim under the Princeton
Agreement or NCI Agreement arising out of or relating to [ * ].
2.5 Sublicenses. Subject to the terms and conditions herein and Section
-----------
2.6 below, Tularik shall have the right to sublicense the licenses granted to it
by Lilly. Any sublicenses granted by Tularik under this Agreement shall provide
for termination or assignment to Lilly, at the option of Lilly, of Tularik's
interest therein upon termination of this Agreement and contain provisions which
obligate the sublicensee to Tularik to at least the same extent that Tularik is
obligated to Lilly under this Agreement. Lilly shall not terminate any of
Tularik's sublicensees rights pursuant to this section 2.5 without first
conferring in good faith with such sublicensee regarding such sublicensees
desire to continue to practice its sublicense hereunder.
2.6 Lilly Right to Match Offers. In the event that Tularik seeks at any
---------------------------
time to license a third party to market, promote, sell, offer to sell or
otherwise commercialize (any of the foregoing, a "Commercialization
Opportunity") Product in [ * ], whether together with or independent of Tularik,
Lilly shall have the right to match any bona fide offer Tularik receives in
writing from such third party regarding the Commercialization Opportunity (the
"Right to Match"). To ensure that Lilly has adequate time to consider whether it
should match the offer of a third party, Tularik shall provide Lilly written
notification of its intent to sign a letter of intent with respect to such
Commercialization Opportunity with such third party at least [ * ] days before
Tularik actually signs such letter of intent. Tularik agrees that it shall not
execute any
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
letter of intent with any third party until expiration of the [ * ] day period
following Tularik's written notification to Lilly of its intent to execute a
letter of intent with such third party. Such written notice shall set forth all
material terms of the proposed offer, including, without limitation, the [ * ]
that is the subject of the offer, and the financial terms of the offer (for
example, the amount and timing of any milestone payments and the nature and
amount of any royalties to be paid). During the [ * ] day notice period, Lilly
shall have an opportunity to [ * ] with respect to such Commercialization
Opportunity to assess whether Lilly desires to exercise its Right to Match. If
Lilly decides to exercise its Right to Match and in so doing agrees to
incorporate all of the material terms of the third party offer, Tularik shall
[ * ]. If the third party resubmits another offer in response to the offer
submitted by Lilly, then Tularik must provide Lilly, as appropriate, with the
material terms of such revised third party offer and another [ * ] period during
which Lilly shall review the revised offer and determine whether to submit its
own respective revised offer.
2.7 Princeton Rights. Tularik understands and acknowledges that the
----------------
Princeton Patents have been licensed by Lilly from Princeton and that Lilly has
preexisting obligations to Princeton with respect to such Princeton Patents,
which Lilly has separately disclosed to Tularik.
SECTION 3
PAYMENTS
In consideration of the exclusive license granted herein and the transfer
of ownership of the Transferred Assets, Tularik shall pay the following amounts
to Lilly:
3.1 Cash Payment Upon Signing. On the Effective Date, in consideration of
-------------------------
the Transferred Assets, Tularik shall pay to Lilly the non-refundable sum of
[ * ] by Federal Reserve electronic wire transfer in immediately available funds
to an account designated by Lilly.
3.2 Milestone Payments. Within [ * ] of Tularik and/or its sublicensees
------------------
achieving the first to occur of each of the milestone events listed below with
respect to the Product, Tularik shall pay the below specified non-refundable
fees to Lilly by Federal Reserve electronic wire transfer in immediately
available funds to an account designated by Lilly:
Milestone Fee
- - --------- ---
. [ * ] [ * ]
. [ * ] [ * ]
. [ * ] [ * ]
. [ * ] [ * ]
3.3 Royalties.
---------
(a) Subject to subsections (b) and (c) below, during the Royalty Term
Tularik shall pay to Lilly running royalties ("Royalty Payments") for the
Product based upon Net Sales of Product in the Territory during a Calendar Year
as follows:
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
Annual Net Sales Royalty Rate (on that
- - ---------------- ---------------------
portion of net sales)
---------------------
[ * ] [ * ]
[ * ] [ * ]
**MM - million U.S. Dollars
(b) In the event all Princeton Patents covering the Product in a
country expire during the Royalty Term and Lilly thereby no longer has a royalty
obligation to Princeton for the Product, the royalties otherwise payable to
Lilly for Net Sales of Product under Section 3.3(a) above shall be reduced to
[ * ] of that portion of annual Net Sales of Product less than or equal to
[ * ], or [ * ] of that portion of annual Net Sales of Product greater than
[ * ].
(c) Tularik may credit against Royalty Payments [ * ] of any royalties
it must pay to any third party on the Product: (1) pursuant to any licenses
necessary to practice the licenses set forth in Section 2.1; or (2) resulting
from any litigation (including settlement thereof) under Section 6.11; provided,
--------
however, for purposes of this subsection (c) that the Royalty Payments to Lilly
- - -------
shall not be reduced to less than [ * ] of that portion of annual Net Sales of
Product less than or equal to [ * ], or [ * ] of that portion of annual Net
Sales of Product greater than [ * ].
(d) In the event that a generic form of Product receives market
authorization by a Regulatory Authority and is made commercially available in a
country, then the royalties otherwise payable to Lilly for Net Sales of Product
in such country under Section 3.3(a), as adjusted pursuant to subsections (b)
and (c) as applicable at the time of such commercial launch of such generic
form, shall be reduced by [ * ].
(e) Royalty Payments shall be made within [ * ] after the end of each
Calendar Quarter for which royalties are due. All Royalty Payments shall be made
in U.S. Dollars and mailed to the attention of Lilly Royalty Administration,
Lilly Corporate Center, Indianapolis, Indiana 46285.
(f) During the term of this Agreement and after the first sale of the
Product, Tularik shall furnish to Lilly on a quarterly basis a written report
covering each Calendar Quarter (each such Calendar Quarter being sometimes
referred to herein as a "reporting period") showing (1) the Net Sales of Product
in each country by Tularik or its Affiliates or sublicensees, and (2) the
Royalty Payments which have accrued under this Section 3.3 in respect of such
sales and the basis for calculating those royalties. With respect to sales of
the Product invoiced in a currency other than U.S. Dollars, the Net Sales and
amounts due to Lilly hereunder shall be expressed in the U.S. Dollar equivalent
calculated on a monthly basis in the currency of the country of sale and
converted to their dollar equivalent using the official rate of exchange as
determined by the European American Bank (or such other bank as may be regularly
relied upon by Tularik with respect to official exchange rates) in effect on the
last business day of the applicable month of the Calendar Quarter to which the
report relates. Tularik will, at Lilly's reasonable request but not more
frequently than once a year, inform Lilly as to the specific exchange rate
translation methodology used for a particular country or countries. Each
quarterly report shall be due [ * ] following the close of each reporting
period. Amounts shown to have accrued by each sales report shall be due and
payable on the date such sales report is due. Lilly shall have the right to
disclose sales reports to Princeton in compliance with its pre-existing
obligations.
(g) Tularik shall keep accurate records in sufficient detail to enable
the Royalty Payments due to be determined and verified by the audit described in
Section 3.4 for at least (2) years following the period in which such
obligations arose. Additionally, if laws or regulations require the withholding
of taxes, the taxes will be deducted by Tularik from the Royalty Payments and
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
remitted by Tularik to the proper tax authority. Proof of payment shall be
provided to Lilly within [ * ] after payment. Tularik will reasonably cooperate
in pursuing the refund of such tax, if such refund is appropriate in Lilly's
determination.
3.4 Audits. Tularik and its Affiliates and sublicensees shall keep full
------
and accurate books and records relating to the financial performance of the
Product. During the term plus two years after termination or expiration of this
Agreement, Lilly and/or Princeton shall have the right, during regular business
hours and upon reasonable advance notice, to have such books and records audited
by an independent certified accountant, so as to verify the accuracy of the
information previously reported to Lilly. Such information shall be Tularik
Proprietary Information and, as such, subject to confidentiality obligations
pursuant to Section 6.3. The independent certified account shall keep
confidential any information obtained during such audit and shall report to
Lilly and/or Princeton only the amounts of Royalty Payments due and payable. The
cost of such audit shall be borne by Lilly and/or Princeton, as appropriate;
however, in the event such audit reveals that the Royalty Payments to Lilly
constitute an underpayment of five percent (5%) or more from that revealed by
the audit to be actually owed, the cost of the audit shall be borne by Tularik.
Tularik shall include in all sublicenses granted as permitted under Section 2.5
an audit provision substantially similar to the foregoing requiring the
sublicensee to keep full and accurate books and records relating to the Product
and granting Lilly and Princeton the right to audit the accuracy of the
information reported by the sublicensee in connection therewith on the same
terms as apply to an audit of Tularik's records hereunder.
3.5 Late Payments. Any amounts not paid by Tularik when due under this
-------------
Agreement shall be subject to interest from and including the date payment is
due through and including the date upon which Lilly has collected immediately
available funds in an account designated by Lilly at a rate equal to [ * ]. No
special notice by Lilly to Tularik of such interest due shall be required.
3.6 No Excuse. Tularik shall not be excused from or relieved of its
---------
obligations to pay the amounts described in this Section 3 by any claimed or
actual event of force majeure, commercial or other impracticability or
impossibility, or frustration of essential purpose, except to the extent
otherwise provided in this Agreement.
3.7 Compulsory License. If in any country a third party obtains a
------------------
Compulsory License, then Lilly shall promptly notify Tularik. If the royalty
rate payable by the grantee of the Compulsory License is less than the royalty
rates applicable in such country set forth in Section 3.3, then such royalty
rates shall be [ * ] for so long as sales are made pursuant to the Compulsory
License.
SECTION 4
TERM OF AGREEMENT
4.1 Term. The term of this Agreement shall begin upon the Effective Date
----
and, unless sooner terminated as hereinafter provided, shall continue in full
force and effect on a country-by-country basis until Tularik, its Affiliates and
sublicensees have no remaining royalty obligations in a country as set forth in
Section 3.3(c), at which time the Agreement shall expire in such country.
SECTION 5
REPRESENTATIONS AND WARRANTIES
5.1 Corporate Existence and Power. As of the Effective Date, each Party
-----------------------------
represents and warrants to the other that it (a) is a corporation duly
organized, validly existing and in good
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
standing under the laws of the state in which it is incorporated, and (b) has
full corporate power and authority and the legal right to own and operate its
property and assets and to carry on its business as it is now being conducted
and as contemplated in this Agreement, including, without limitation, the right
to grant the licenses granted hereunder.
5.2 Authority. As of the Effective Date, each Party represents and
---------
warrants to the other that it (a) has the corporate power and authority and the
legal right to enter into this Agreement and perform its obligations hereunder,
(b) has taken all necessary corporate action on its part required to authorize
the execution and delivery of the Agreement and the performance of its
obligations hereunder, and (c) the Agreement has been duly executed and
delivered on behalf of such Party, and constitutes a legal, valid and binding
obligation of such Party and is enforceable against it in accordance with its
terms.
5.3 Absence of Litigation. As of the Effective Date, each Party represents
---------------------
and warrants to the other that it is not aware of any pending or threatened
litigation (and has not received any communication relating thereto) which
alleges that such Party's activities related to this Agreement have infringed,
or that by conducting the activities as contemplated herein such Party would
infringe, any of the intellectual property rights of any other person. Lilly's
represents and warrants that, to the best of Lilly's knowledge, there is no
material unauthorized use, infringement or misappropriation of any of its
intellectual property rights licensed hereunder.
5.4 No Approvals or Consents. Except as otherwise described in this
------------------------
Agreement, each Party represents and warrants to the other that all necessary
consents, approvals and authorizations of all governmental authorities and other
persons or entities required to be obtained by such Party in connection with
this Agreement have been obtained.
5.5 Patents. Lilly represents and warrants to Tularik that as of the
-------
Effective Date, to the best of its knowledge, it has sufficient legal and/or
beneficial title and ownership under its intellectual property rights necessary
for it to fulfill its obligations under this Agreement and that it is not aware
of any communication alleging that it has infringed, or by conducting its
business as contemplated by this Agreement would infringe, any of the
intellectual property rights of any other person, and that to the best of its
knowledge there is no material unauthorized use, infringement or
misappropriation of any of its intellectual property rights relevant to this
Agreement. As used herein, "intellectual property rights" shall mean all patent
rights, copyrights, trademarks, trade secret rights, chemical and biological
material rights and know-how rights necessary or useful to make, use or sell the
Product.
5.6 No Conflict. Each party represents and warrants to the other that the
-----------
execution and delivery of the Agreement by such Party and the performance of
such Party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable law or regulation or any provision of articles of
incorporation or bylaws of such Party in any material way, and (b) do not
conflict with, violate or breach or constitute a default or require any consent
under, any contractual obligation or court or administrative order by which such
Party is bound.
5.7 Regulatory Documents. Lilly represents and warrants to Tularik that:
--------------------
(a) Lilly has furnished Tularik with access to a complete copy of the United
States Regulatory Documents for the Product, including all material amendments
and supplements thereto; (b) Lilly is and was, at all times prior to the
Effective Date, the lawful holder of all rights under the Regulatory Documents;
(c) [ * ], Lilly has complied in all material respects with all applicable laws
and regulations in connection with the preparation and submission to the
relevant Regulatory Authorities of the Regulatory Documents; (d) the Regulatory
Documents have been accepted by, and nothing has come to the attention of Lilly
which has, or reasonably should have, led Lilly to believe that the Regulatory
Documents are not in good standing with, the relevant Regulatory
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
<PAGE>
Authorities; (e) Lilly has filed with the relevant Regulatory Authorities all
required notices, supplemental applications and annual or other reports,
including adverse experience reports, with respect to the Regulatory Documents
which are material; and (f) there is no pending or overtly threatened action by
the relevant Regulatory Authorities which will have a material adverse effect on
the Regulatory Documents. Except for the representations contained in this
Section 5.7, upon which Tularik is relying (which Lilly hereby acknowledges),
[ * ].
5.8 Manufacturing Information. Lilly represents and warrants that it is
-------------------------
transferring to Tularik as part of the Transferred Assets all of the
Manufacturing Information in Lilly's tangible possession as of the Effective
Date that is necessary for development and commercialization of the Product by
Tularik.
5.9 No Debarment. Each Party represents and warrants to the other that it
------------
will comply at all times with the provisions of the Generic Drug Enforcement Act
of 1992 and will upon request certify in writing to the other that neither it,
its employees nor any person providing services to such Party in connection with
the Product have been debarred under the provisions of such Act.
5.10 Year 2000 Compliance. Tularik represents and warrants that, to the
--------------------
best of its knowledge after reasonable investigation, it has taken reasonable
steps to prevent its performance under Section 6.5(a) from being materially
delayed, materially interrupted or otherwise materially adversely affected due
to the failure of Tularik's business systems and/or computer systems to be "Year
2000 Compliant". For purposes of this paragraph, a system shall be considered
"Year 2000 Compliant" only if (1) the occurrence in or use by that system of
dates on or after January 1, 2000 ("Millennial Dates") does not adversely affect
that system's performance, including without limitation performance with respect
to date-dependent data, computations, output, or other functions (including,
without limitation, calculating, comparing and sequencing), and (ii) that system
creates, stores, processes and outputs information (as applicable) related to or
including Millennial Dates without material errors or omissions.
5.11 Product Quality. Lilly hereby represents and warrants that to the
---------------
extent Product manufactured by or for Lilly that will be provided to Tularik
hereunder was required by law to be manufactured and packaged in compliance with
then current Good Manufacturing Practices or equivalent, as established and
revised from time to time by the relevant Regulatory Authority, applicable IND
applications and all other U.S. or other governmental rules and regulations
applicable to the Product and its manufacture, the Product was so manufactured
and packaged.
5.12 No Outstanding Option or License. Lilly hereby warrants that it has
--------------------------------
the unencumbered right to enter into this Agreement and to grant the licenses
contained herein.
5.13 Implied Warranties. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5,
------------------
LILLY MAKES NO REPRESENTATION OR WARRANTY AS TO THE LICENSED PATENTS OR THE
TRANSFERRED ASSETS, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW,
BY STATUTE OR OTHERWISE, AND LILLY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR
STATUTORY WARRANTIES. Without limiting the foregoing, Tularik acknowledges that
it has not and is not relying upon any implied warranty of merchantability,
fitness for a particular purpose or otherwise, or upon any representation or
warranty whatsoever as to the prospects (financial, regulatory or otherwise), or
the validity or likelihood of success, of the Product after the date of this
Agreement.
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
<PAGE>
SECTION 6
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
6.1 Governmental Filings. Lilly and Tularik each agree to prepare and file
--------------------
whatever filings, requests or applications are required to be filed with any
governmental authority in connection with this Agreement and to cooperate with
one another as reasonably necessary to accomplish the foregoing. Without
limiting the generality of the foregoing, prior to the assignment, transfer and
conveyance by Lilly to Tularik of the Transferred Assets pursuant to Section
2.2, Lilly shall have submitted to the relevant Regulatory Authorities the
information required of a former owner of regulatory filings with respect to the
Product, and Tularik shall submit to the relevant Regulatory Authorities the
information required of a new owner of regulatory filings with respect to the
Product.
6.2 Compliance with Law. Tularik shall comply with all federal, state and
-------------------
local laws and regulations related to Tularik's manufacture, development,
marketing and selling of the Product. Without limiting the generality of the
foregoing sentence, Tularik shall not promote the Product in any manner in
conflict with any applicable laws or regulations.
6.3 Confidentiality. Tularik shall treat as confidential any unpublished
---------------
applications included in the Licensed Patents and all other information of Lilly
and/or Princeton of which Tularik becomes aware (whether in writing or orally or
by observation during visits to Lilly facilities) in connection with this
Agreement (collectively, "Lilly Proprietary Information"). Tularik shall neither
disclose Lilly Proprietary Information to any third party nor use Lilly
Proprietary Information for any purpose other than as set forth in this
Agreement. Lilly shall treat as confidential all information of Tularik
(including information received by Tularik from its Affiliates or sublicensees)
of which Lilly becomes aware (whether in writing or orally or by observation
during visits to Lilly facilities) in connection with this Agreement
(collectively, "Tularik Proprietary Information"). Lilly shall neither disclose
Tularik Proprietary Information to any third party nor use Tularik Proprietary
Information for any purpose other than as set forth in this Agreement. "Third
party" for purposes of this section shall not include a consultant of either
party with whom a party shares information on a need to know basis and which the
party binds to terms of confidentiality as outlined above. Both Tularik and
Lilly shall each undertake reasonable efforts to ensure that their respective
employees are aware of and comply with the obligations of confidentiality and
non-use set forth herein.
Nothing contained herein will in any way restrict or impair the ability of
a Party to which Proprietary Information is disclosed (the "Using Party") to
use, disclose or otherwise deal with any Proprietary Information of the other
Party which:
(a) at the time of disclosure is known to the public or thereafter
becomes known to the public by publication or otherwise through no fault of the
Using Party;
(b) the Using Party can establish by competent written proof was in
its possession prior to the time of the disclosure and was not obtained directly
or indirectly from the other Party;
(c) is independently made available as a matter of right to the Using
Party by a third party who is not thereby in violation of a confidential
relationship with the other Party; or
(d) is information required to be disclosed by legal requirement or
regulatory process; provided, in each case that the Using Party timely informs
the other Party of such disclosure and uses reasonable efforts to limit the
disclosure and maintain confidentiality to the
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11.
<PAGE>
extent possible and permits the other Party to intervene and contest or attempt
to limit the disclosure.
Tularik shall obtain no right or license of any kind under the Lilly
Proprietary Information except as set forth in this Agreement. Lilly shall
obtain no right or license of any kind under the Tularik Proprietary Information
except as set forth in this Agreement.
6.4 Expenses. Lilly and Tularik shall each bear their own direct and
--------
indirect expenses incurred in connection with the negotiation and preparation of
this Agreement and, except as set forth in this Agreement, the performance of
the obligations contemplated hereby.
6.5 Efforts.
-------
Tularik shall use [ * ] Diligence to develop and obtain Regulatory
Approval for the Product in the Territory and shall be solely responsible for
all related development efforts and costs; provided, however, with respect to
-------- -------
countries in the Territory that are not Major Countries, Tularik shall have [ *
] Tularik shall provide Lilly with written notice of all decisions by Tularik to
not pursue Regulatory Approval in a country for any reason within [ * ] days of
such decision.
(b) In the event Tularik or its sublicensees fail to undertake [ * ]
Diligence in developing and/or obtaining Regulatory Approval of the Product [ *
], such failure shall be considered a material default of this Agreement which
shall (a) automatically cause the license granted to Tularik in Section 2.1 to
terminate with respect to such Major Country(ies); and (b) may entitle Lilly to
terminate this Agreement for cause under Section 8.1(b) if such failure of
diligence applies to [ * ]; provided that Tularik (or its sublicensee) does not
-------- ----
cure such failure within [ * ] days of written notice from Lilly specifying its
belief that such failure has occurred and the reasons therefor. Lilly shall not
be entitled to exercise the foregoing termination rights if [ * ]. If Tularik's
license terminates in part pursuant to this Section 6.5(b), then (1) the Major
Countries in which Tularik has lost its license shall be automatically removed
from the Territory, and (2) Tularik shall and hereby does grant to Lilly a (i)
non-exclusive license, with right to sublicense, under the Tularik Improvements
to make, use, sell, offer to sell or import Product in the Major Country(ies) in
which Tularik's licenses terminate pursuant to this Section 6.5(b), and (ii) a
right to [ * ]. Any license granted to Lilly pursuant to this Section 6.5 shall
be subject to payment of a royalty to Tularik at a rate to be negotiated by the
parties [ * ] (i) if such license is granted to Lilly prior to Regulatory
Approval of Product in the relevant country, [ * ] of Lilly's net sales of
Product in such country; or (ii) if such license is granted to Lilly after
Regulatory Approval of Product in the relevant country, [ * ] of Lilly's net
sales of Product in such country.
(c) Failure by Tularik to meet its [ * ] Diligence obligation under
this Section 6.5 due to [ * ] will not constitute lack of [ * ] Diligence for
purposes of this Agreement.
(d) Lilly and Tularik each agree to use all reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or proper to make effective the transactions contemplated by
this Agreement, including such actions as may be reasonably necessary to obtain
approvals and consents of governmental Persons and other Persons (including,
without limitation, all applicable drug listing and notifications to the
relevant Regulatory Authority identifying Tularik as the licensee of the
Product); provided that no Party shall [ * ].
--------
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
12.
<PAGE>
6.6 Publicity and Disclosure of Agreement. The parties agree that upon
-------------------------------------
execution of this Agreement or shortly thereafter either Party may prepare a
press release, which shall be subject to review and approval by the other Party.
The Parties agree that no future publicity release or announcement concerning
the transactions contemplated hereby shall be issued without the advance written
consent of the other Party, except as such release or announcement may be
required by law, in which case the Party making the release or announcement
shall, before making any such release or announcement, afford the other Party a
reasonable opportunity to review and comment upon such release or announcement
to the extent practicable. Tularik and Lilly recognize that disclosure of this
Agreement (including a copy) to the IRS and other tax authorities is likely to
be required, and each waives the requirements of this Section 6.6 with respect
to disclosure (and copies) to such entities; provided, however, that the
obligations of Section 6.3 continue to apply to any such disclosure to such tax
authorities. Tularik also agrees that Lilly may provide Princeton with a copy of
this Agreement in compliance with Lilly's preexisting obligation and subject to
an obligation of confidentiality and non-use of such copy by Princeton,
comparable in scope to the obligation set forth in Section 6.3. Each Party shall
have the further right to disclose the terms of this Agreement as required by
the rules and regulations promulgated by the Securities and Exchange Commission
and to disclose such information to shareholders or potential investors as is
customary in the industry, provided the disclosing Party provides to the other
Party, to the extent practicable, a copy of the information to be disclosed and
an opportunity to comment thereon prior to such disclosure, and, to the extent
practicable, consults within a reasonable time in advance of the proposed
disclosure with the other on the necessity for the disclosure and the text of
the proposed release. Any copy of this Agreement to be filed with the Securities
and Exchange Commission shall be redacted to the satisfaction of both Parties;
provided, however, in the event that the Securities and Exchange Commission
objects to the redaction of any portion of the Agreement after the initial
submission, the filing Party shall inform the other Party of the objections and
shall in good faith respond to the objections in an effort to limit the
disclosure required by the Securities and Exchange Agreement, but in any event
the filing Party shall be free to disclose any portions of the Agreement it
deems necessary to respond to the objections in any future filings.
6.7 Cooperation. If either Party shall become engaged in or participate in
-----------
any investigation, claim, litigation or other proceeding with any third party,
including any proceeding before a Regulatory Authority, relating in any way to
the Product or any of the Licensed Patents the other Party shall cooperate in
all reasonable respects with such Party in connection therewith, including,
without limitation, using its reasonable efforts to make available to the other
Party such Party's employees who may be helpful with respect to such
investigation, claim, litigation or other proceeding, provided that, for
purposes of this provision, reasonable efforts to make available any employee
shall be deemed to mean [ * ].
6.8 Conflicting Rights. Lilly shall not grant any right to any third
------------------
party relating to the Licensed Patents that would violate the terms of or
conflict with the rights granted to Tularik pursuant to this Agreement.
6.9 Patent Prosecution and Maintenance.
----------------------------------
(a) [ * ] oversee the patent prosecution and maintenance of Licensed
Patents. [ * ].
(b) [ * ] regarding the preparation, filing, prosecution and
maintenance of the Licensed Patents and shall provide [ * ] sufficient
opportunity to comment thereon.
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13.
<PAGE>
(c) Within thirty (30) days of receipt of a reasonably detailed
invoice from [ * ] for all costs incurred after the Effective Date related to
the filing, prosecution, and maintenance of the Licensed Patents for the
Product; provided, however, that [ * ] at least [ * ] for fees required to be
paid to a patent office in connection with maintenance of the Licensed Patents.
(d) Upon receipt of approval to market Product in a country of a
Territory, [ * ] in obtaining patent extensions, supplementary protection
certificates, and the like for the Licensed Patents to the extent the laws of
the country provide it. It is understood that Tularik is responsible for
promptly notifying Lilly of receipt of Regulatory Approval.
6.10 Infringement.
-------------
(a) Notice. Each Party shall promptly notify the other in writing of
------
any alleged infringement by third parties of any Licensed Patent and provide any
information available to that Party relating to such alleged infringement or
misappropriation.
(b) Enforcement of Licensed Patents Which Are Princeton Patents. In
-----------------------------------------------------------
the event that, [ * ] after being notified by Lilly and/or Tularik of
infringement of a Licensed Patent which is a Princeton Patent, [ * ] of such
infringement or to enter suit against the infringer, [ * ] to enforce the
Princeton Patents as provided in Article 11 of the Princeton Agreement, to the
extent the infringement activities relate directly to the Product. To the extent
that Lilly is required by the law of the jurisdiction to be joined as a party,
[ * ] will join as a party plaintiff, in the same manner as [ * ] has agreed to
be joined as a party plaintiff as set forth in Article 11 of the Princeton
agreement. A copy of Article 11 of the Princeton Agreement is attached hereto as
Exhibit D.
- - ---------
(c) Allocation of Damages or other Monetary Awards with Respect to the
------------------------------------------------------------------
Princeton Patents. If [ * ] brings action under this Section 6.10, any damages
- - -----------------
or other monetary awards recovered by [ * ] shall be the property of [ * ].
If [ * ] fails to bring action with respect to the Princeton Patents and [ * ]
brings action, any damages or other monetary awards recovered by Tularik shall
be applied first to [ * ]. If any balance remains, [ * ] shall second pay to [ *
] a royalty of [ * ] on any such excess. If any balance remains after payment to
[ * ] shall third pay to [ * ] an amount equal to [ * ]. If any balance remains
after payment to [ * ]. If [ * ] fails to bring action with respect to the
Princeton Patents and [ * ] brings action, any damages or other monetary awards
recovered by [ * ] shall be applied first to [ * ]. If any balance remains, [ *
] shall second pay to [ * ] a royalty of [ * ] on any such excess. If any
balance remains after the payment to [ * ], [ * ] shall third retain as its own
property an amount equal to [ * ]. If any balance remains, such balance shall be
the property [ * ].
(d) Enforcement of Licensed Patents Which Are Not Princeton Patents.
---------------------------------------------------------------
Where the infringement of a Licensed Patent involves a patent which is not a
Princeton Patent, [ * ] shall have the primary right, but not the obligation, to
take action to secure the cessation of the infringement or to enter suit against
the infringer. Any such action will be at [ * ] expense, employing counsel of
its own choosing. To the extent any recovery is obtained [ * ]. Notwithstanding
the foregoing, in the event that, [ * ] after being notified by [ * ] of
infringement of a Licensed Patent which is not a Princeton Patent, [ * ] fails
to secure the cessation of the infringement or to enter suit against the
infringer, [ * ] may take action on its own and at its own expense.
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
14.
<PAGE>
(e) Procedures. No settlement, consent judgment or other voluntary
----------
final disposition of the suit may be entered into without the consent of each
Party, which consent shall not be unreasonably withheld or delayed. In the event
of any infringement suit against a third party brought by any Party pursuant to
this Section 6.10, the Party so proceeding shall [ * ] in connection with such
action and such other Party shall join in and reasonably cooperate with respect
to such action to the extent necessary to initiate and maintain it (e.g., by
providing relevant documents, witnesses and testimony, etc.). It is further
understood that Lilly will use its reasonable efforts to obtain Princeton's
cooperation to the extent Princeton is a necessary party to the litigation in
any country.
6.11 Infringement of Third Party's Rights. If a third party asserts that a
------------------------------------
patent or other right owned by it is infringed by the practice of the Licensed
Patents pursuant to the license granted to Tularik under Section 2.1, Tularik
may attempt to resolve the problem raised by the asserted infringement. The
matter shall be deemed resolved if Tularik obtains: [ * ]. If the practice of
the Licensed Patents results in a claim for patent infringement against Tularik,
the Party to this Agreement first having notice of that claim shall promptly
notify the other Party in writing. The notice shall set forth the facts of the
claim in reasonable detail. [ * ] shall have the primary right to defend any
such claim. [ * ] shall have the right, but not the obligation, to participate
in any such suit at its sole option and at its own expense. Each Party shall
reasonably cooperate with the Party conducting the defense of the claim. Neither
Party shall enter into any settlement that affects the other Party's rights or
interests without such other Party's written consent, not to be unreasonably
withheld. If [ * ] makes a payment to any third party in the course of
defending or settling any claim brought by a third party pursuant to this
Section 6.11, [ * ] shall be entitled to [ * ].
6.12 Manufacturing. Tularik shall be solely responsible for the manufacture
-------------
of Product following the Effective Date, including without limitation for
clinical trials and commercialization.
6.13 Deemed Breach of Covenant. Neither Lilly nor Tularik shall be deemed
-------------------------
to be in breach of any covenant contained in this Section 6 if such Party's
deemed breach is the result of any action or inaction on the part of the other
Party.
6.14 Use of Names, Logos or Symbols. No Party hereto shall use the name,
------------------------------
trademarks, logos, physical likeness, employee names or owner symbol of the
other Party hereto for any purpose, including, without limitation, in connection
with any private or public securities placements, without the prior written
consent of the affected Party, such consent not to be unreasonably withheld or
delayed so long as such use of name is limited to objective statements of fact,
rather than for endorsement purposes. Nothing contained herein shall be
construed as granting either Party any rights or license to use any of the other
Party's trademarks or tradenames without separate, express written permission of
the owner of such trademark or tradename.
6.15 Princeton License. Lilly expressly warrants and represents that the
-----------------
Princeton Agreement is in full force and effect as of the Effective Date and
that Lilly is not in material breach of the Princeton Agreement and has not
received any notice of termination from Princeton under the Princeton Agreement.
Lilly expressly covenants and agrees that during the term of this Agreement it
shall take all reasonable steps to comply with all material terms and provisions
contained in the Princeton Agreement. In the event Lilly receives notice of an
alleged breach by Lilly of the Princeton Agreement, Lilly shall promptly so
notify Tularik. Tularik may cure any breach of the Princeton Agreement for the
benefit of Tularik if Lilly fails to cure such breach
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15.
<PAGE>
reasonably in advance of the expiration of the cure period thereunder. [ * ].
Lilly shall use reasonable efforts to [ * ].
6.16 Acknowledgement. Lilly acknowledges that Dr. Jackie Walling, a former
---------------
employee of Lilly employed by Tularik as of the Effective Date, may work on the
development of the Product on behalf of Tularik.
SECTION 7
INDEMNIFICATION
7.1 Indemnification.
---------------
(a) Lilly shall indemnify, defend and hold Tularik (and its directors,
officers, employees, consultants, Affiliates or sublicensees) harmless from and
against any and all Damages incurred or suffered by Tularik (and its directors,
officers, employees, consultants, Affiliates or sublicensees) (excluding
incidental or consequential Damages suffered or incurred by Tularik directly (as
opposed to incidental or consequential Damages suffered or incurred by third
parties who are, in turn, seeking the same from Tularik, which shall be covered
by the indemnity set forth herein)) as a consequence of:
(1) any breach of any representation or warranty made by Lilly in
this Agreement, provided that, in the case of a breach of any representation or
warranty made by Lilly in this Agreement, notice of a claim based upon any such
breach is received by Lilly prior to the expiration or termination of the
Agreement;
(2) [ * ];
(3) any failure to perform duly and punctually any covenant,
agreement or undertaking on the part of Lilly contained in this Agreement; and
(4) any Excluded Liabilities.
(b) Tularik shall indemnify, defend and hold Lilly (and its directors,
officers, employees, consultants and Affiliates) harmless from and against any
and all Damages incurred or suffered by Lilly (and its directors, officers,
employees, consultants and Affiliates) (excluding incidental or consequential
Damages suffered or incurred by Lilly directly (as opposed to incidental or
consequential Damages suffered or incurred by third parties who are, in turn,
seeking the same from Lilly, which shall be covered by the indemnity set forth
herein)) as a consequence of:
(1) any breach of any representation or warranty made by Tularik in
this Agreement, provided that, in the case of a breach of any representation or
warranty made by Tularik in this Agreement, notice of a claim based upon any
such breach is received by Tularik prior to the expiration or termination of the
Agreement;
(2) any failure to perform duly and punctually any covenant, agreement
or undertaking on the part of Tularik contained in this Agreement;
(3) Assumed Liabilities; and
(4) any action or inaction by Tularik (and its agents, directors,
officer, employees, consultants, Affiliates and sublicensees) after the
Effective Date related to the making, using, selling, offering for sale or
importing of the Product or the use, sale or import of the Transferred Assets,
[ * ].
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
16.
<PAGE>
7.2 Notice and Opportunity To Defend. Promptly after receipt by a Party
--------------------------------
hereto of notice of any claim which could give rise to a right to
indemnification pursuant to Section 7.1, such Party (the "Indemnified Party")
shall give the other Party (the "Indemnifying Party") written notice describing
the claim in reasonable detail. The failure of an Indemnified Party to give
notice in the manner provided herein shall not relieve the Indemnifying Party of
its obligations under this Section, except to the extent that such failure to
give notice materially prejudices the Indemnifying Party's ability to defend
such claim. The Indemnifying Party shall have [ * ], any such matter involving
the asserted liability of the Party seeking such indemnification, except as
provided below. The Indemnifying Party shall promptly (and in any event not less
than [ * ] after receipt of the Indemnified Party's original notice) notify the
Indemnified Party in writing of [ * ], and the Indemnified Party agrees to
cooperate fully with the Indemnifying Party and its counsel in [ * ] incurred in
connection with such cooperation shall be borne by the Indemnifying Party. If
the Indemnifying Party elects in writing [ * ] the asserted liability, fails to
notify the Indemnified Party of its election [ * ] as herein provided, fails to
admit its obligation to indemnify under this Agreement with respect to the claim
following a written request of the Indemnified Party, or, if in the reasonable
opinion of counsel to the Indemnified Party, the claim could result in the
Indemnified Party becoming subject to injunctive relief or relief other than the
payment of money damages that could materially adversely affect the ongoing
business of the Indemnified Party in any manner, the Indemnified Party shall
have the right, at its option, to [ * ] such asserted liability by its own
counsel and its reasonable costs and expenses shall be included as part of the
indemnification obligation of the Indemnifying Party hereunder. Notwithstanding
the foregoing, neither the Indemnifying Party nor the Indemnified Party may
[ * ] any claim under this Section 7.2 over the written objection of the other
or any claim that could reasonably result in an adverse effect on the other
Party without such other Party's consent; provided, however, that consent
-------- -------
to [ * ] shall not be unreasonably withheld. In any event, the Indemnified Party
and the Indemnifying Party may participate, at their own expense, in the defense
of such asserted liability. If the Indemnifying Party defends any claim, the
Indemnified Party shall make available to the Indemnifying Party any books,
records or other documents within its control that are necessary or appropriate
for such defense. Notwithstanding anything to the contrary in this Section 7.2,
(a) the Party conducting the defense of a claim shall [ * ], and (b) the
Indemnifying Party shall [ * ] without the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld).
7.3 Indemnification Payment Adjustments. The amount of any Damages for
-----------------------------------
which indemnification is provided under this Section 7 shall be reduced to take
account of any net tax benefit and shall be increased to take account of any net
tax detriment arising from the incurrence or payment of any such Damages or from
the receipt of any such indemnification payment and shall be reduced by the
insurance proceeds received and any other amount recovered, if any, by the
Indemnified Party with respect to any Damages; provided, however, that an
Indemnified Party shall [ * ]. If any Indemnified Party shall have received any
payment pursuant to this Section 7 with respect to any Damages and shall
subsequently have received insurance proceeds or other amounts with respect to
such Damages, then such Indemnified Party shall pay to the Indemnifying Party an
amount equal to the difference (if any) between (1) the sum of the amount of
those insurance proceeds or other amounts received and the amount of the payment
by such Indemnifying Party pursuant to this Section 7 with respect to such
Damages and (2) the amount necessary to fully and completely indemnify and hold
harmless such Indemnified Party from and against such Damages; provided,
--------
however, in no event [ * ].
- - -------
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
17.
<PAGE>
7.4 Indemnification Payment. Upon the final determination of liability and
-----------------------
the amount of the indemnification payment under this Section 7, the appropriate
Party shall pay to the other in immediately available funds, within [ * ] after
such determination, the amount of any claim for indemnification made hereunder.
7.5 Survival. The provisions of this Section 7 shall survive any
--------
termination of this Agreement with respect to actions of the Parties during the
term of the Agreement or the term of any license to Tularik, whichever occurs
later. Each Indemnified Party's rights under this Section 7 shall not be deemed
to have been waived or otherwise affected by such Indemnified Party's waiver of
the breach of any representation, warranty, agreement or covenant contained in
or made pursuant to this Agreement, unless such waiver expressly and in writing
also waives any or all of the Indemnified Party's right under Section 7.
SECTION 8
TERMINATION
8.1 Termination. Anything herein to the contrary notwithstanding, this
-----------
Agreement may be terminated as follows:
(a) Tularik Voluntary Termination. Tularik may terminate this
-----------------------------
Agreement at any time by giving [ * ] written notice of its intention to
terminate.
(b) Lilly Termination for Cause. Lilly may terminate this Agreement in
---------------------------
its entirety upon [ * ] written notice if Tularik breaches its obligation of
[ *] Diligence provided in Section 6.5(a) in [ * ] the Major Countries
concurrently.
(c) Princeton Termination. Tularik understands and acknowledges that
---------------------
Princeton has the right to terminate the exclusive license to the Princeton
Patents granted to Lilly under the Lilly/Princeton Agreement in the event that
[ * ] and, therefore, Princeton also has the right to terminate the sublicense
to the Princeton Patents granted by Lilly to Tularik herein. Nothing in this
Section 8.1(c) shall affect Lilly's obligations under Section 6.15.
(d) Termination for Insolvency. If either Tularik or Lilly (1) makes a
--------------------------
general assignment for the benefit of creditors or becomes insolvent; (2) files
an insolvency petition in bankruptcy; (3) petitions for or acquiesces in the
appointment of any receiver, trustee or similar officer to liquidate or conserve
its business or any substantial part of its assets; (4) commences under the laws
of any jurisdiction any proceeding involving its insolvency, bankruptcy,
reorganization, adjustment of debt, dissolution, liquidation or any other
similar proceeding for the release of financially distressed debtors; or (5)
becomes a Party to any proceeding or action of the type described above in (3)
or (4) and such proceeding or action remains undismissed or unstayed for a
period of more than [ * ], then the other Party may by written notice terminate
this Agreement in its entirety with immediate effect.
(e) Termination for Default.
-----------------------
(1) Tularik and Lilly each shall have the right (except as
otherwise provided in Section 6.5) to terminate this Agreement in its entirety
with respect to the Product for default upon the other Party's uncured failure
to comply in any material respect with the terms and conditions of this
Agreement. At least [ * ] prior to any such termination for default, the Party
seeking to so terminate shall give the other written notice of its intention to
terminate this Agreement in accordance with the provisions of this Section
8.1(e), which notice shall set forth the default(s) which form the basis for
such termination. If the defaulting Party fails to correct such default(s)
within [ * ] after receipt of notification, or if the same cannot reasonably be
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
18.
<PAGE>
corrected or remedied within [ * ], then if the defaulting Party has not
commenced curing said default(s) within said [ * ] and is not diligently
pursuing completion of same, then such Party immediately may terminate this
Agreement with respect to such Product.
(2) This Section 8.1(e) shall not be an exclusive remedy and
shall not be in lieu of any other remedies available to a Party hereto for any
default hereunder on the part of the other Party.
(f) Rights Upon Termination.
-----------------------
(1) Lilly Rights Upon Termination. In the event of termination of
-----------------------------
this Agreement by Lilly under Section 8.1(b), 8.1(d) or 8.1(e) or termination by
Tularik under Section 8.1(a), [ * ]. Additionally, the [ * ]. Consequently,
notwithstanding anything else contained in this Agreement to the contrary but
subject to Tularik's rights in the Tularik Improvements, (A) [ * ] and (B)
[ * ].
(2) Tularik Rights Upon Termination. In the event of termination
-------------------------------
of this Agreement by Tularik, Tularik shall [ * ]. In the event of termination
of this Agreement by Tularik under Sections 8.1(d) or 8.1(e), Tularik shall
[ * ].
(3) Assistance Following Termination. In the event of termination
--------------------------------
of this Agreement pursuant to Section 8.1(b) or 8.1(d) and if Lilly so requests,
Tularik shall provide [ * ] to Lilly for a period of [ * ] days following the
date of notice of termination. Additionally, Tularik shall, and hereby does,
(and shall cause any subcontractors under contract with Tularik to) grant to
Lilly a non-exclusive, worldwide license, with the right to sublicense, under
the Tularik Improvements to make, use, sell, offer for sale and import Product.
Any [ * ].
(4) Continuing Obligations. Termination of this Agreement for any
----------------------
reason shall not relieve the Parties of any obligation accruing prior thereto or
any ongoing obligations hereunder with respect to the Product and shall be
without prejudice to the rights and remedies of either Party with respect to any
antecedent breach of the provisions of this Agreement. Without limiting the
generality of the foregoing, no termination of this Agreement, whether by lapse
of time or otherwise, shall serve to terminate the obligations of the Parties
hereto under subsections 3.4, 3.5, 6.3, 6.6, 6.7, 6.14, Section 7 (as provided
in Section 7.5), subsections 8.1(e), 8.1(f) and Section 9 (except for subsection
9.4, which shall expire as provided therein) hereof, and such obligations shall
survive any such termination.
SECTION 9
MISCELLANEOUS
9.1 Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the Parties hereto and their respective successors
and assigns; provided, however, that neither Lilly nor Tularik may assign any of
-------- -------
its rights, duties or obligations hereunder without the prior written consent of
the other, which consent may be withheld in the other's sole discretion, except
that no prior written consent shall be required in the event that a third party
acquires substantially all of the assets or outstanding shares of, or merges
with, Tularik or Lilly, as the case may be. No assignment of this Agreement or
of any rights hereunder shall relieve the assigning Party of any of its
obligations or liability hereunder.
9.2 Notices. All notices or other communications required or permitted to
-------
be given hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand, prepaid telex, cable, telegram or facsimile and
confirmed in writing, or mailed first class, postage
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
19.
<PAGE>
prepaid, by registered or certified mail, return receipt requested (mailed
notices and notices sent by telex, cable or telegram shall be deemed to have
been given on the date received) as follows:
If to Lilly, as follows:
Eli Lilly and Company
Lilly Corporate Center
Indianapolis, Indiana 46285
Facsimile: (317) 277-3354
Attn: Vice President, Oncology Research
With a copy to:
Eli Lilly and Company
Lilly Corporate Center
Indianapolis, Indiana 46285
Facsimile: (317) 276-6221
Attn: General Counsel
If to Tularik, as follows:
Tularik Inc.
Two Corporate Drive
South San Francisco, California 94080
Facsimile: (650) 829-4303
Attn: President
Tularik Inc.
Two Corporate Drive
South San Francisco, California 94080
Facsimile: (650) 829-4392
Attn: Secretary
or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 9.2 by any Party hereto to the other
Party.
9.3 Waiver; Remedies. Any term or provision of this Agreement may be
----------------
waived at any time by the Party entitled to the benefit thereof by a written
instrument executed by such Party. No delay on the part of Lilly or Tularik in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of either Lilly or Tularik of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
9.4 Survival of Representations. Each of the representations and
---------------------------
warranties made in this Agreement shall survive the expiration or termination of
this Agreement only with respect to activities conducted or events occurring
prior to the expiration or termination of the Agreement.
9.5 Entire Agreement. This Agreement, together with all exhibits,
----------------
constitute the entire agreement between the Parties with respect to the subject
matter hereof and supersedes all prior agreements or understandings of the
Parties relating thereto.
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
20.
<PAGE>
9.6 Amendment. This Agreement may be modified or amended only by written
---------
agreement of the Parties hereto.
9.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute a single instrument.
9.8 Governing Law. This Agreement shall be governed and construed in
-------------
accordance with the laws of the State of New York excluding any choice of law
rules, which may direct the application of the law of another state.
9.9 Captions. All section titles or captions contained in this
--------
Agreement, in any Exhibit referred to herein and the table of contents, if any,
to this Agreement are for convenience only, shall not be deemed a part of this
Agreement and shall not affect the meaning or interpretation of this Agreement.
9.10 No Third Party Rights or Obligations. No provision of this Agreement
------------------------------------
shall be deemed or construed in any way to result in the creation of any rights
or obligation in any Person not a Party to this Agreement, other than the rights
and obligations contained in the Princeton Agreement.
9.11 Severability. If any provision of this Agreement is found or
------------
declared to be invalid or unenforceable by any court or other competent
authority having jurisdiction, such finding or declaration shall not invalidate
any other provision hereof, and this Agreement shall thereafter continue in full
force and effect. In the event any such provision is so declared invalid or
unenforceable, the Parties shall negotiate an alternative provision that closely
approximates the Parties' intent, to the extent allowable under law.
9.12 Attachments. All Exhibits and other attachments to this Agreement
-----------
are by this reference incorporated herein and made a part of this Agreement.
9.13 Disclaimer of Agency. This Agreement shall not constitute any Party
--------------------
the legal representative or agent of another, nor shall any Party have the right
or authority to assume, create, or incur any third party liability or obligation
of any kind, express or implied, against or in the name of or on behalf of
another except as expressly set forth in this Agreement.
9.14 Interpretation. This Agreement has been jointly prepared by the
--------------
Parties and their respective legal counsel and shall not be strictly construed
against either Party.
9.15 Force Majeure. Each of the parties hereto shall be excused from the
-------------
performance of its obligations hereunder (except the payment of money) in the
event such performance is prevented by force majeure, provided that the
non-performing party promptly provides notice of the prevention to the other
party. Such excuse shall be continued so long as the condition constituting
force majeure continues and the non-performing party makes reasonable efforts to
remove the condition. For the purposes of this Agreement, force majeure shall
mean any act of God, fire, casualty, flood, war, earthquake, strike, failure of
public utilities, any act, exercise, assertion or requirement of governmental
authority, accident, epidemic, destruction of facilities, or such other similar
occurrences beyond the control of the party affected.
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
21.
<PAGE>
In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered on the day and year first above written.
ELI LILLY AND COMPANY TULARIK INC.
By: /s/ August M. Watanabe By: /s/ John P. McLaughlin
---------------------- -----------------------
August M. Watanabe John P. McLaughlin
Executive Vice President President
Tularik/License Agreement
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
22.
<PAGE>
Exhibit A
[ * ]
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
EXHIBIT 10.16
EXHIBIT B [*]
[*]
1. Lilly IND [*]
2. Annual Reports [*]
3. Correspondence [*]
4. [*]
5. Existing Communications [*]
6. SAE reports [*]
- [*] SAE reports from [*]
- [*]
7. Investigator's files [*]
- [*]
- [*]
8. Existing [*] Reports
9. [*] reports
- [*]
- [*]
10. Clinical investigator brochure
11. [*] systems data
- [*]
12. CRFs [*]
- [*]
- [*]
- [*]
13. Copies of [*] contract for [*] study
[*]
[*]
1. Copies of manufacturing [*] for [*]
2. Copies of manufacturing [*] for [*]
3. CT File Folder Transfer Form [*]
4. Bulk CT Material Manufacturing Review Form [*]
5. Lot history [*]
<PAGE>
6. Batch record for API
7. Certificate of Analysis for API
8. QA release documents for API [*]
9. Analytical Methods for API [*]
10. [*] stability information [*]
11. [*] summaries
12. Existing process hazard data
13. Certificate of Analysis [*]
Lometrexol
[*]
Screen prints of [*] pages [*]
Project Investigator Patient Visits
------- ------------ ------- ------
[*] [*] [*] [*]
Data printed and binder prepared by [*].
<PAGE>
Exhibit C
Product Inventory
[ * ]
[ * ]=Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
EXHIBIT D
tion, nor extends any warranty, express or implied that anything made, used,
sold or otherwise disposed of under this Agreement by LILLY or its sublicensees
is now or hereafter will be free from infringement of patents of third parties.
11. Enforcement
-----------
11.1 Decisions concerning the enforcement of any patent covering Licensed
Products shall be made solely by PRINCETON.
11.2 In the event LILLY shall bring to the attention of PRINCETON any
infringement of any patent covering Licensed Products and PRINCETON shall not,
within six months
(i) secure cessation of the infringement, or
(ii) enter suit against the infringer, LILLY, shall have the right
and power to institute and prosecute, at its own expense, a suit with respect to
such infringement and if required by law, PRINCETON will join as party plaintiff
in such suit. All expenses in such suits shall be borne entirely by LILLY and
LILLY will pay to PRINCETON a royalty of [*] on any excess of recoveries over
expenses of such suit.
12. Term of License and Termination of Agreement
--------------------------------------------
12.1 The License granted under this Agreement shall remain in full force
and effect until the earliest of (i) termination or cancellation as herein
provided; (ii) failure by
