SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
Amendment No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 1995 Commission File Number 0-22962
HUMAN GENOME SCIENCES, INC.
(Exact name of registrant)
Delaware 22-3178468
(State of organization) (I.R.S. Employer Identification Number)
9410 Key West Avenue, Rockville, Maryland 20850-3338
(Address of principal executive offices and zip code)
(301) 309-8504
(Registrant's telephone Number)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common stock, par value $.01 per share
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrants's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The number of shares of the registrant's common stock outstanding on March 18,
1996 was 18,624,535
As of March 18, 1996, the aggregate market value of the common stock held by
non-affiliates of the registrant based on the closing price reported on the
National Association of Securities Dealers Automated Quotations System was
approximately $316,000,000.*
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Human Genome Sciences, Inc.'s Notice of Annual Stockholder's Meeting
and Proxy Statement, to be filed within 120 days after the end of the
registrant's fiscal year, are incorporated into Part III of this Annual Report.
* Excludes 10,719,644 shares of common stock deemed to be held by officers and
directors, and stockholders whose ownership exceeds five percent of the shares
outstanding at March 18, 1996. Exclusion of shares held by any person should not
be construed to indicate that such person possesses the power, direct or
indirect, to direct or cause the direction of the management or policies of the
registrant, or that such person is controlled by or under common control with
the registrant.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
HUMAN GENOME SCIENCES, INC.
BY: /s/ William A. Haseltine, Ph.D.
--------------------------------
William A. Haseltine, Ph.D.
Chairman and Chief Executive Officer
Dated: October 1, 1996
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EXHIBIT INDEX
Exhibit No.
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10.15++# Research Collaboration Agreement, dated January 19, 1996, between
Registrant and Pioneer Hi- Bred International, Inc. ("Pioneer").
10.16++# License Agreement between Registrant and F. Hoffman-La Roche, Ltd.
("Roche").
- -----------
++ Confidential treatment has been requested. The copy filed as an
exhibit omits the information subject to the confidentiality
request.
# The attached Exhibit supersedes the previously filed Exhibit.
"Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by [****], have been
separately filed with the Commission."
RESEARCH COLLABORATION AGREEMENT
This Agreement, effective January 19, 1996 (" EFFECTIVE DATE"), by and
between Pioneer Hi-Bred International, Inc. ("PIONEER"), a corporation having an
address at 700 Capital Square, 400 Locust Street, Des Moines, IA 50309 and Human
Genome Science, Inc., a Delaware Corporation having offices at 94 1 0 Key West
Avenue, Rockville, MD 20850 ("HGS").
WHEREAS, PIONEER, a breeder and producer of proprietary planting seed,
in particular MAIZE, desires to have more information about MAIZE nucleic acid
sequences; and
WHEREAS, HGS has the capability to conduct research to provide such
information and desires to perform such research for PIONEER, and;
WHEREAS, PIONEER and HGS are interested in a research collaboration to
determine nucleic acid sequences of MAIZE.
NOW THEREFORE, in consideration of the mutual promises and other good
and valuable consideration, the parties agree as follows:
SECTION 1 - DEFINITIONS.
The terms used in this Agreement have the following meaning:
1.1 "AFFILIATE" means any company or other legal entity other than a party,
in whatever country organized, controlling or controlled by PIONEER OR
HGS. "Control" means having the power to direct or cause the direction
of the management and policies, whether through the ownership of voting
securities, by contract, or otherwise.
1.2 "EST" means expressed sequence tags that are partial cDNA sequences.
1.3 "FIRST COMMERCIAL SALE" means, in each country, the first sale of any
HGS PRODUCT in the HGS FIELD by HGS, its AFFILIATES or SUBLICENSEES,
following approval of its sales by the appropriate governmental agency
for the
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
country in which the sale is to be made, and when governmental approval
is not required, the first sale in that country.
1.4 "HGS FIELD" [****].
1.5 "HGS INFORMATION" means any information know-how, informatics and
software (including the source code therefor) owned by HGS and/or to
which HGS has a transferable interest in each case during the TRANSFER
PERIOD and that is necessary for PIONEER to evaluate MAIZE ESTs
provided by HGS.This also includes any information, informatics and
software that is protected by issued US or foreign patents owned by
HGS.Informatics are further defined in attached Schedule A.
1.6. "HGS PATENT RIGHTS" means any US patent application owned by HGS,
including any provisional, division, continuation, or
continuation-in-part thereof owned by HGS or as to which HGS has a
transferable interest, and any foreign patent application or equivalent
corresponding thereto owned by HGS or as to which HGS has a
transferable interest, and any Letters Patents or the equivalent
thereof issuing thereon owned by HGS or as to which HGS has a
transferable interest, or reissue, reexamination or extension thereof,
insofar as it contains one or more VALID CLAIMS to a nucleic acid
sequence or to an expression product thereof or to the use of a nucleic
acid or its expression product.
1.7 "HGS PRODUCT(S)" means any article, composition, apparatus, substance,
chemical, material, method, process or service that is covered by one
or more claims of PIONEER PATENT RIGHTS and/or RESEARCH PATENT RIGHTS
and/or which incorporates RESEARCH TECHNOLOGY and/or PIONEER
TECHNOLOGY.
1.8 "LICENSED TERRITORY" means all countries of the world.
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
1.9 "MAIZE" means corn (Zea mays) and any portion of the corn plant,
including cells,
1.10 "MAIZE EST" means an EST obtained from a MAIZE LIBRARY(IES) provided to
HGS by PIONEER which meets the specifications of Schedule D.
1.11 "MAIZE LIBRARY(IES)" means a cDNA library produced from MAIZE that has
the specifications set forth in attached Schedule B.
1.12 "NET SALES PRICE" means the total amount received by HGS, its
AFFILIATES or SUBLICENSEES from sale of HGS PRODUCT in the HGS FIELD,
less transportation charges and insurance, sales taxes, use taxes,
excise taxes, value added taxes, customs duties or other imposts,
normal and customary quantity and cash discounts, rebates granted and
disallowed reimbursements and allowances and credit on account of
rejection or return of HGS PRODUCT in the HGS FIELD.
HGS PRODUCT shall be considered "sold" when billed out or invoiced.
1.13 "PIONEER FIELD" [****].
1.14 "PIONEER TECHNOLOGY" means any process, use, article of
manufacture, composition of matter, information, data and materials,
whether patentable or not, which results or is derived from RESEARCH
TECHNOLOGY and that is owned by PIONEER or as to which PIONEER has a
transferable interest.
1.15 "PIONEER PATENT RIGHT(s)" mean any United States patent application,
including any provisional, division, continuation, or
continuation-in-part thereof, and any foreign patent application or
equivalent corresponding thereto, and any Letters Patent or the
equivalent thereof issuing thereon, or reissue, re-examination or
extension thereof, insofar as it contains one or more claims to PIONEER
TECHNOLOGY.
1.16 "RESEARCH PROJECT" means the program of research agreed to by PIONEER
and HGS under this Agreement and conducted according to this Agreement
and its Schedules.
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
1.17 "RESEARCH TECHNOLOGY" means MAIZE ESTs, a gene that includes a MAIZE
EST, a polypeptide expressed thereby and a clone that contains a MAIZE
EST that results from research performed by or on behalf of HGS
pursuant to the RESEARCH PROJECT and any and all information, data and
materials relating to the foregoing that results from research
performed by or on behalf of HGS pursuant to the RESEARCH PROJECT.
1.18 "RESEARCH PATENT RIGHT(S)" means any United States patent application,
including any provisional, division, continuation, or
continuation-in-part thereof and any foreign patent application or
equivalent corresponding thereto and any Letters Patent or the
equivalent thereof issuing thereon or reissue or extension thereof,
insofar as it claims a RESEARCH TECHNOLOGY.
1.19 "SUBLICENSEE" means any non-AFFILIATE third party licensed by HGS to
make, have made, import, use or sell any HGS PRODUCT.
1.20 "TRANSFER PERIOD" means for a period beginning on the EFFECTIVE DATE
and ending September 1, 2000.
1.21 "VALID CLAIM" means a claim of an issued US or foreign patent that has
not lapsed, become abandoned, or been declared invalid or unenforceable
by a court of competent jurisdiction or an administrative agency from
which no appeal can be or is taken.
SECTION 2 - HGS OBLIGATIONS
2.1 (a) During the TRANSFER PERIOD, HGS will transfer to PIONEER HGS
INFORMATION, in particular the informatics system and will
assist PIONEER with the installation of HGS INFORMATION into
computer hardware provided by PIONEER and located at PIONEER.
PIONEER will purchase all computer hardware located at PIONEER
that is needed. The timetable for the initial installation is
given in Schedule C. Until completion of the RESEARCH PROJECT
as set forth in Schedule E. HGS shall install and maintain
[****] a direct, secure link between HGS and
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
PIONEER for the purpose of transferring and maintaining
RESEARCH TECHNOLOGY.
(b) During the TRANSFER PERIOD, HGS will provide PIONEER
with all upgrades and improvements to HGS INFORMATION on a
timely basis [****].
(c) If, during the TRANSFER PERIOD, HGS develops a version
of the MACINTOSH(R) computer-based user client software as
defined in Schedule A which operates in the WINDOWS(R)
operating environment, it shall provide such user interface to
PIONEER [****].
(d) HGS shall provide training and support to PIONEER with
respect to the use of HGS INFORMATION, as specified in
Schedule C. From time to time during the TRANSFER PERIOD, if
required and upon request by PIONEER, HGS shall provide
reasonable additional training and support to PIONEER
personnel with respect to the use of HGS INFORMATION. The
location and frequency of such training will be determined
jointly by the PROJECT COMMITTEE.
2.2 HGS shall perform RESEARCH PROJECT according to the workplan specified
'in Schedule E. HGS' performance of RESEARCH PROJECT under Schedule E
is subject to Pioneer providing HGS with a sufficient number of MAIZE
LIBRARIES and at a time which permits HGS to perform its obligations
hereunder.
2.3 For a period beginning on the EFFECTIVE DATE and ending two (2) years
from the date on which HGS successfully completes Phase III of the
RESEARCH PROJECT as set forth in Schedule E, HGS agrees not to
undertake any activity involving MAIZE to the benefit of any third
party, including sequencing of MAIZE, sequence analysis of MAIZE or the
transfer of HGS INFORMATION for use with MAIZE, except as HGS is
licensed hereunder.
2.4 Beginning on the EFFECTIVE DATE and ending on June 30, 1997, PIONEER
shall have the right, exercisable by written notice to HGS, to extend
RESEARCH PROJECT for one year after the successful completion of Phase
III, as set forth in Schedule E, to undertake additional work similar
to that outlined in Schedule E. The
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
parties shall attempt to reach agreement on the terms and conditions
thereof within six (6) months of PIONEER's written notification to HGS.
2.5 In the event that PIONEER provides to HGS plant nucleotide sequences,
HGS agrees to[****] sequences provided by PIONEER to the PIONEER MAIZE
EST database maintained at HGS [****]. These added sequences will be
identified as PIONEER CONFIDENTIAL INFORMATION and are not subject to
the license granted to HGS hereunder.
SECTION 3 - PIONEER OBLIGATIONS
3.1 PIONEER shall fund RESEARCH PROJECT as follows:
(a) PIONEER shall pay to HGS [****] within thirty (30) days of the
EFFECTIVE DATE for the conduct of Phase I of the RESEARCH
PROJECT as set forth in Schedule E.
(b) PIONEER shall pay to HGS [****] once HGS INFORMATION is
operating as per Schedule C, designated "GO LIVE". "GO LIVE"
is defined as the delivery to PIONEER of useable functional
capabilities of HGS INFORMATION as listed in Schedule G. This
payment covers all deliverables representing HGS INFORMATION
to be provided by HGS according to Schedules A, C & G.
(c) Within thirty (30) days of the completion of Phase I of the
RESEARCH PROJECT, as set forth in Schedule E, which includes
the conveyance to PIONEER of MAIZE ESTs discovered in the
RESEARCH PROJECT that meet the specifications in Schedule D,
but in no case prior to [****], PIONEER shall pay to HGS
[****] for the conduct of Phase II of RESEARCH PROJECT, as set
forth in Schedule E.
(d) Within thirty (30) days of the completion of Phase 11 of the
RESEARCH PROJECT, as set forth in Schedule E which includes
the conveyance to PIONEER of MAIZE ESTs discovered in the
RESEARCH PROJECT that
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
meet the specifications in Schedule D, but in no case prior to
[****], PIONEER shall pay to HGS [****] for the conduct of
Phase III of RESEARCH PROJECT, as set forth in Schedule E.
(e) PIONEER shall pay to HGS a payment of [****] for the
completion of the RESEARCH PROJECT as set forth in Schedule E.
Said payment shall be made within thirty (30) days of said
completion but in no case prior to [****].
3.2 The payments in Section 3.1 are non-refundable except as follows:
(a) Solely in the event of a breach of this Agreement by HGS,
PIONEER shall be entitled to a refund equal to [****]
multiplied by a fraction the numerator of which is the
difference between [****] and [****] under Phase I and the
denominator of which is [****] and further multiplied by
[****].
(b) Solely in the event of a breach of this Agreement by HGS,
PIONEER shall be entitled to a refund equal to [****]
multiplied by a fraction the numerator of which is the
difference between [****] and [****] under Phase II and the
denominator of which is [****].
(c) Solely in the event of a breach of this Agreement by HGS,
PIONEER shall be entitled to a refund equal to [****]
multiplied by a fraction the numerator of which is the
difference between [****] and [****] under Phase III and the
denominator of which is [****].
3.3 PIONEER agrees to meet all of its obligations under Schedule C
and perform and to permit HGS to perform the work required to enable
transfer of HGS INFORMATION to PIONEER and to permit installation of
such HGS INFORMATION into computer hardware provided by PIONEER and
located at PIONEER.
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SECTION 4 - CONFIDENTIALITY.
4.1 During the term of this Agreement, it is contemplated that each party
will disclose to the other proprietary and confidential technology,
inventions, technical information, biological materials and the like
which are owned or controlled by the disclosing party or which that
party is obligated to maintain in confidence and that is designated by
the disclosing party as confidential ("Confidential Information"). Each
party agrees to retain the other party's Confidential Information in
confidence and not to disclose any such Confidential Information to a
third party without the prior written consent of the disclosing party
and to use the other party's Confidential Information only for the
purposes of this Agreement.
4.2 The obligations of confidentiality will not apply to Confidential
Information that:
(a) was known to the receiving party or generally known to the
public prior to its disclosure hereunder; or
(b) subsequently becomes known to the public by some means other
than a breach of this Agreement;
(c) is subsequently disclosed to the receiving party by a third
party having a lawful right to make such disclosure;
(d) is required by law or bona fide legal process to be disclosed,
provided that the party required to make the disclosure takes
all reasonable steps to restrict and maintain confidentiality
of such disclosure and provides reasonable notice to the party
providing the Confidential Information; or
(e) is approved for release by the parties, or
(f) is independently developed by the employees or agents of
either party without any knowledge of the Confidential
Information provided by the other party.
4.3 Notwithstanding the foregoing, information relating to the RESEARCH
PROJECT, RESEARCH TECHNOLOGY, PIONEER TECHNOLOGY, and MAIZE
8
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LIBRARIES, shall be Confidential Information and shall not be used or
disclosed by HGS other than as provided herein.
4.4 HGS shall use MAIZE LIBRARIES only for obtaining MAIZE ESTs for PIONEER
under this Agreement and HGS shall not transfer MAIZE LIBRARIES,
PIONEER TECHNOLOGY or RESEARCH TECHNOLOGY to a third party or use MAIZE
LIBRARIES, PIONEER TECHNOLOGY or RESEARCH TECHNOLOGY for the benefit of
a third party. Notwithstanding the foregoing, HGS may use MAIZE
LIBRARIES, PIONEER TECHNOLOGY or RESEARCH TECHNOLOGY pursuant to the
licenses granted under Section 6.2.
4.5 PIONEER agrees to use HGS INFORMATION only as licensed under Section 6.
1. PIONEER agrees not to disclose or transfer HGS INFORMATION to a
third party provided, however, that with the prior approval of HGS,
which will not be unreasonably withheld, PIONEER may permit a third
party to remotely access a database of PIONEER which operates in
accordance with HGS INFORMATION.
SECTION 5 - PATENTS.
5.1 (a) HGS shall promptly assign to PIONEER all of its rights, title
and interest in and to RESEARCH TECHNOLOGY as it is developed
and RESEARCH PATENT RIGHTS. In addition, HGS shall cooperate
with and assist PIONEER in obtaining appropriate patent
protection and shall execute all documents required for such
purpose.
(b) HGS agrees that all HGS employees who work on the RESEARCH
PROJECT will be obligated to assign inventions to HGS.
(c) As part of the assignment of Section 5.1(a), PIONEER will
grant to HGS a security interest in and to RESEARCH TECHNOLOGY
and RESEARCH PATENT RIGHTS to secure PIONEER's payment
obligations under Section 3. 1. The security interest will
include an agreement by PIONEER to reassign RESEARCH
TECHNOLOGY and RESEARCH PATENT RIGHTS to HGS in the event that
PIONEER fails to make payments under Section 3.1 when due.
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
SECTION 6 - GRANTS AND ROYALTIES.
6.1 (a) HGS grants to PIONEER and AFFILIATES a [****] license in the
LICENCED TERRITORY to use HGS INFORMATION to analyze: (i)
RESEARCH TECHNOLOGY and PIONEER TECHNOLOGY, and (ii) nucleic
acid sequences from plants and plant pests.
Notwithstanding anything to the contrary, it is expressly
understood that no license is granted to use the HGS
INFORMATION with respect to (i) DNA prepared from human cells
and/or (ii) a human gene and/or (iii) a family of human genes
or (iv) any portion of the foregoing or (v) any expression
product of the foregoing.
(b) HGS grants to PIONEER and AFFILIATES a [****] license under
HGS PATENT RIGHTS to make, have made, use, import, sell, or
have sold on its behalf, in all fields except non-human animal
healthcare and/or diagnostics and/or the HGS FIELD in the
LICENSED TERRITORY, product(s) which is a nucleic acid that is
or includes a MAIZE EST provided to PIONEER by HGS or an
expression product thereof that without such license would
infringe a VALID CLAIM of HGS PATENT RIGHTS.
6.2 (a) PIONEER grants to HGS and AFFILIATES a [****] right and
license for the LICENSED TERRITORY under PIONEER PATENT
RIGHTS, RESEARCH PATENT RIGHTS owned by PIONEER, PIONEER
TECHNOLOGY and RESEARCH TECHNOLOGY owned by PIONEER to make,
have made, use, import, sell or have sold on its behalf HGS
PRODUCTS in the HGS FIELD, including the right to sublicense
third parties.
(b) For the rights set forth in Section 6.2(a), HGS shall pay to
PIONEER a royalty to be negotiated by the parties in good
faith, which royalty shall not exceed [****] of NET SALES of
HGS PRODUCTS in the
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
HGS FIELD sold by HGS or its AFFILIATES or [****] the royalty
received by HGS for sale of HGS PRODUCT in HGS FIELD from its
SUBLICENSEES.
(c) To the extent HGS PRODUCT in the HGS FIELD is covered by a
VALID CLAIM of PIONEER PATENT RIGHTS and/or RESEARCH PATENT
RIGHTS in a country where sold, such royalty shall be payable
for the life of such PIONEER PATENT RIGHTS and/or RESEARCH
PATENT RIGHTS in such country.
(d) To the extent an HGS PRODUCT in the HGS FIELD is not covered
by a VALID CLAIM of PIONEER PATENT RIGHTS and/or RESEARCH
PATENT RIGHTS in a country where sold, such royalty shall be
payable for five (5) years from FIRST COMMERCIAL SALE in such
country.
(e) In the event that an HGS PRODUCT in the HGS FIELD includes a
component(s) covered by royalty obligations hereunder
("COVERED COMPONENT(S)") and a component which is
diagnostically useable or therapeutically active alone or in a
combination that does not require the COVERED
COMPONENT("COMBINED, PRODUCT"), then NET SALES shall be the
amount that is normally received by HGS or its AFFILIATES from
a sale of the COVERED COMPONENT(S) in an arm's length
transaction with an unaffiliated third party. If the COVERED
COMPONENT(S) is not sold separately, then NET SALES upon which
a royalty is paid shall be the NET SALES of the COMBINED
PRODUCT multiplied by a fraction, the numerator of which is
the cost for producing the COVERED COMPONENT and the
denominator of which is the cost for producing the COMBINED
PRODUCT.
(f) In the event that royalties are to be paid by HGS to a party
who is not an AFFILIATE of HGS for an HGS PRODUCT in the HGS
FIELD for which royalties are also due to PIONEER pursuant to
Paragraph 6.2 (such royalties to such party are hereinafter
"Other Royalties"), then the royalties to be paid to PIONEER
by HGS pursuant to Paragraph 6.2 shall be reduced by one-half
of the amount of such Other Royalties. but in no event shall
any royalties
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"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
payable under Paragraph 6.2 be reduced by more than
[****].
(g) Only one royalty shall be due and payable for the manufacture,
use and sale of an HGS PRODUCT in the HGS FIELD irrespective
of the number of patents or claims thereof licensed hereunder
which cover the manufacture, use and sale of such HGS PRODUCT
in the HGS FIELD.
6.3 The term of the licenses described in Sections 6.1 and 6.2 shall be for
the pendency of any issued patents and forever under any know-how
rights.
6.4 HGS shall keep, and shall cause each of its AFFILIATES and SUBLICENSEES
to keep, full and accurate accounts containing all particulars that may
be necessary for the purpose of calculating all royalties payable to
PIONEER. Such accounts shall be kept at their principal place of
business and, with all necessary supporting data shall, for the three
(3) years next following the end of the calendar year to which each
shall pertain, be open for inspection by an independent certified
accountant reasonably acceptable to HGS upon reasonable notice during
normal business hours, at PIONEER's expense, for the sole purpose of
verifying royalty statements or compliance with this Agreement, but in
no event more than once in each calendar year. All information and data
offered shall be used only for the purpose of verifying royalties and
shall be treated as HGS Confidential Information subject to the
obligations of this Agreement. In the event that such inspection shall
indicate that in any calendar year that the royalties which should have
been paid by HGS are at least [****] greater than those which were
actually paid by HGS, then HGS shall pay the cost of such inspection.
6.5 With each semi-annual payment, HGS shall deliver to PIONEER a full and
accurate accounting to include at least the following information:
(a) Quantity of each HGS PRODUCT in the HGS FIELD subject to
royalty sold (by country) by HGS, and its AFFILIATES;
(b) Total receipts for each HGS PRODUCT sold in HGS FIELD subject
to royalty (by country);
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(c) Total royalties payable to PIONEER; and
(d) Royalties received from SUBLICENSEES for HGS PRODUCT sold in
HGS FIELD.
6.6 In each year the amount of royalty due shall be calculated
semi-annually as of June 30 and December 31 (each as being the last day
of an "ACCOUNTING PERIOD") and shall be paid semi-annually within the
following sixty days, every such payment shall be supported by the
accounting prescribed in Paragraph 6.4 and shall be made in United
States dollars. For the purpose of calculating royalties conversion
from any foreign currency, such conversion shall be at the Exchange
Rate published in the Wall Street Journal, under "Currency Trading",
for the last business day of the applicable ACCOUNTING PERIOD.
6.7 If the transfer of or the conversion into United States Dollar
Equivalent of any remittance due hereunder is not lawful or possible in
any country, such remittance shall be made by the deposit thereof in
the currency of the country to the credit and account of PIONEER or its
nominee in any commercial bank or trust company located in that
country, prompt notice of which shall be given to PIONEER. PIONEER
shall be advised in writing in advance by HGS and provide to HGS a
nominee, if so desired.
6.8 Any tax required to be withheld by HGS under the laws of any foreign
country for the account of PIONEER, shall be promptly paid by HGS for
and on behalf of PIONEER to the appropriate governmental authority, and
HGS shall furnish PIONEER with proof of payment of such tax. Any such
tax actually paid on PIONEER's behalf shall be deducted from royalty
payments due PIONEER.
SECTION 7 - WARRANTIES.
7.1 Each of HGS and PIONEER warrants and represents to the other that it
has the full right and authority to enter into this Agreement, and that
it is not aware of any impediment which would inhibit its ability to
perform the terms and conditions imposed on it by this Agreement.
13
<PAGE>
HGS/PHI
Research Collaboration Agreement
1/12/96
SECTION 8 -INDEMNIFICATION.
8.1 (a) PIONEER agrees to indemnify and hold harmless HGS, its
shareholders, officers, directors, employees, and agents,
against any and all actions, claims (specifically including,
but not limited to, any damages based on product liability
claims), suits, losses, demands, judgments, and other
liabilities (including attorney's fees until PIONEER assumes
the defense as described below) asserted by third parties,
government and non-government, resulting from or arising out
of (i) any use of RESEARCH TECHNOLOGY and/or PIONEER
TECHNOLOGY by or on behalf of PIONEER or by any person or
entity (other than HGS) who derives rights thereto from
PIONEER, and (ii) any manufacture, use or sale of any product
or process which is based on and/or incorporates RESEARCH
TECHNOLOGY and/or PIONEER TECHNOLOGY, which product or process
is manufactured, sold or used by or on behalf of PIONEER or
any person or entity (other than HGS) who obtains or claims
rights thereto from PIONEER.
If any such claims or actions are made, HGS shall be defended
at PIONEER's sole expense by counsel selected by PIONEER and
reasonably acceptable to HGS provided that HGS may, at its own
expense, also be represented by counsel of its own choosing.
PIONEER will not settle or compromise any claims without the
consent of HGS, which consent will not unreasonably be
withheld. PIONEER's indemnification hereunder shall not apply
to any liability, damage, loss or expense of an indemnitee to
the extent that it is directly attributable to the negligent
activities or intentional misconduct of such indemnitee.
(b) HGS agrees to indemnify and hold harmless PIONEER, its
shareholders, officers, directors, employees and agents,
against any and all actions, claims, suits, demands, judgments
and other liabilities (including attorney's fees until HGS
assumes the defense as described below) asserted by third
parties, government and non-government or arising out of the
manufacture, use or sale by HGS of HGS PRODUCTS in the HGS
FIELD.
14
<PAGE>
HGS/PHI
Research Collaboration Agreement
1/12/96
If any such claims or actions are made, PIONEER shall be
defended at HGS' sole expense by counsel selected by HGS and
reasonably acceptable to PIONEER, provided that PIONEER may,
at its own expense, also be represented by counsel of its own
choosing. HGS will not settle or compromise any claims without
the consent of PIONEER, which consent will not unreasonably be
withheld. HGS indemnification hereunder shall not apply to any
liability, damage, loss or expense of an indemnitee to the
extent it is directly attributable to the negligent activities
or intentional misconduct of such indemnitee.
(c) Each party hereto shall notify the other party promptly of any
claim or threatened claim under this Section 8 and shall fully
cooperate with all reasonable requests with respect thereto.
SECTION 9 - ASSIGNMENT; SUCCESSORS.
9.1 This Agreement shall not be assignable by either of the
parties without the prior written consent of the other party
(which consent shall not be unreasonably withheld), except
that either party may assign this Agreement to an AFFILIATE or
to a successor in interest or transferee of all or
substantially all of the portion of the business to which this
Agreement relates.
9.2 Subject to the limitations on assignment herein, this
Agreement shall be binding upon and inure to the benefit of
said successors in interest and assigns of HGS and PIONEER.
Any such successor 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
and such Assignment shall not relieve the Assignor of any of
its obligations under this Agreement.
SECTION 10 - TERM AND TERMINATION.
10.1 Termination or Cancellation of Licenses
15
<PAGE>
HGS/PHI
Research Collaboration Agreement
1/12/96
(a) Upon material breach of any material provisions of this
Agreement by either party to this Agreement, in the event the
breach is not cured within sixty (60) days after written
notice to the breaching party by the other party, in addition
to any other remedy it may have, the other party at its sole
option may terminate this Agreement, provided that such other
party is not then in breach of this Agreement.
(b) Termination of this Agreement for breach of any of its
provisions shall be without prejudice to any other rights or
remedies the non-breaching party may have hereunder, whether
or not such rights or remedies arise from such breach.
(c) Either party may terminate this Agreement upon notice to the
other party in the event of the filing by the other party of a
petition in bankruptcy or for liquidation; the request for or
appointment of a receiver; execution upon any portion of the
other party's business or assets; the other party's
arrangement with or assignment for the benefit of creditors;
or the other party's becoming unable to meet its obligations
as they become due.
10.2 (a) In the event that this Agreement is terminated by HGS pursuant
to Section 10.1, then any portion of the sixteen million
dollars which has not been paid to HGS under Section 3.1,
including the payment specified in Section 3.1 (e), shall be
immediately due and payable to HGS by PIONEER and upon full
payment PIONEER shall have a fully paid-up non-terminable
license under Section 6.1, PIONEER shall retain ownership of
RESEARCH TECHNOLOGY and RESEARCH PATENT RIGHTS assigned to
PIONEER under Section 5.1, the security interest assigned
therein to HGS shall be released, and the rights and
obligations of Sections 6.2 through 6.8 shall remain in full
force and effect.
(b) In the event that PIONEER fails to make any payment under
Section 3.1 when due, HGS shall have the right to provide
PIONEER written notice of such failure, and if such payment is
not made within thirty (30) days after such written notice,
then all amounts to be paid by PIONEER under Section 3.1,
including the payment specified in Section 3.1(e), shall
become immediately due and payable to HGS by PIONEER and upon
full payment
16
<PAGE>
HGS/PHI
Research Collaboration Agreement
1/12/96
PIONEER shall have a fully paid-up non-terminable license
under Section 6.1, PIONEER shall retain ownership of RESEARCH
TECHNOLOGY and RESEARCH PATENT RIGHTS assigned to PIONEER
under Section 5. 1, the security interest assigned therein to
HGS shall be released, and the rights and obligations of
Sections 6.2 through 6.8 shall remain in full force and
effect.
10.3 In the event that this Agreement is terminated by PIONEER pursuant to
Section 10.1, then:
(a) If terminated prior to payment of eight million dollars under
Section 3. 1 (a) and (b), all licenses granted to PIONEER
shall be terminated, HGS shall own RESEARCH TECHNOLOGY and
RESEARCH PATENT RIGHTS and PIONEER shall not use RESEARCH
TECHNOLOGY or HGS INFORMATION.
(b) If terminated subsequent to payment of eight million dollars
under Section 3.1(a) and (b), then PIONEER shall retain
ownership of RESEARCH TECHNOLOGY and RESEARCH PATENT RIGHTS
assigned to PIONEER under Section 5. 1, the security interest
assigned therein to HGS shall be released, and PIONEER shall
retain its licenses under Section 6. 1.
10.4 Upon termination of this Agreement by PIONEER under Section 10. 1, the
licenses granted to HGS under Section 6.2 shall terminate.
10.5 In the event that HGS' license hereunder is terminated, HGS agrees not
to use PIONEER TECHNOLOGY or RESEARCH TECHNOLOGY and HGS shall either
destroy or return MAIZE LIBRARIES, RESEARCH TECHNOLOGY and PIONEER
TECHNOLOGY to PIONEER.
10.6 Upon termination of this Agreement by either party, neither party shall
be required to perform the RESEARCH PROJECT or any obligation under
Section 2, but HGS shall deliver to PIONEER all MAIZE ESTs and RESEARCH
TECHNOLOGY in its possession and not yet conveyed to PIONEER.
17
<PAGE>
HGS/PHI
Research Collaboration Agreement
1/12/96
10.7 The obligations of Sections 4, 7, 8 and 10 and of Paragraph 1 1.3 of
this Agreement shall survive any termination of this Agreement, the
licenses of Section 6 shall survive termination to the extent such
licenses are non-terminable under Sections 10.2 and 10.3, and the
provisions of Paragraph 5. 1 (a) shall survive to the extent that
PIONEER retains ownership in RESEARCH TECHNOLOGY and RESEARCH PATENT
RIGHTS.
10.8 Upon termination of this Agreement for any reason, nothing herein shall
be construed to release either party from any obligation that matured
prior to the date of such termination.
SECTION 11 - GENERAL PROVISIONS.
11.1 The relationship between HGS and PIONEER is that of independent
contractors. HGS and PIONEER are not joint venturers, partners,
principal and agent, master and servant, employer or employee, and have
no relationship other than as independent contracting parties. HGS
shall have no power to bind or obligate PIONEER in any manner.
Likewise, PIONEER shall have no power to bind or obligate HGS in any
manner.
11.2 This Agreement and its attached Schedules A - G sets forth the entire
agreement and understanding between the parties as to the subject
matter thereof and supersedes all prior agreements in this respect.
There shall be no amendments or modifications to this Agreement, except
by a written document which is signed by both parties.
11.3 This Agreement shall be construed and enforced in accordance with the
laws of the State of Maryland without reference to its choice of law
principles.
11.4 The headings in 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.
11.5 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 a party's right to the future enforcement of its rights
under this Agreement, excepting only as to an
18
<PAGE>
HGS/PHI
Research Collaboration Agreement
1/12/96
expressed written and signed waiver as to a particular matter for a
particular period of time.
11.6 No public announcement concerning the existence of or terms of this
Agreement shall be made, either directly or indirectly, by any party to
this Agreement without prior written notice to the other party and,
except as may be legally required, or as may be required for a public
offering of securities, or as may be required for recording purposes,
without first obtaining the approval of the other party and agreement
upon the nature and text of such announcement, which approval and
agreement shall not be unreasonably withheld or delayed. The party
desiring to make any such public announcement shall inform the other
party of the proposed announcement or disclosure in reasonably
sufficient time prior to public release, and shall provide the other
party with a written copy thereof, in order to allow such other party
to comment upon such announcement or disclosure.
11.7 Notices. Any notices given pursuant to this Agreement shall be in
writing and shall be deemed to have been given and delivered upon the
earlier of (i) when received at the address set forth below, or (ii)
three (3) business days after mailed by certified or registered mail
postage prepaid and properly addressed, with return receipt requested,
or (iii) on the day when sent by facsimile as confirmed by certified or
registered mail. Notices shall be delivered to the respective parties
as indicated:
To HGS: Human Genome Sciences, Inc.
941 0 Key West Avenue
Rockville, NO 20850
ATTN: CEO
Copy to: Carella, Byrne, Bain, Gilfillan,
Cecchi, Stewart & Olstein
6 Becker Farm Road
Roseland, N.J. 07068
Fax no.(201)994-1744
ATTN: Elliot M. Olstein, Esq.
19
<PAGE>
HGS/PHI
Research Collaboration Agreement
1/12/96
To PIONEER: PIONEER HI-BRED INTERNATIONAL, INC.
700 Capital Square
400 Locust Street
Des Moines, Iowa 50309-2340
ATTN: Legal Department
Copy to: PIONEER HI-BRED INTERNATIONAL, INC.
Research Technology Services
P.O. Box 1004
Johnston, IA 50131-1004
Fax no. (515) 253-2478
ATTN: John Duesing
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
For HUMAN GENOME SCIENCES, INC. For PIONEER HI-BRED INTERNATIONAL, INC.
By: /s/William A. Haseltine By: /s/Anthony J. Cavalieri
---------------------------------- -----------------------------------
William A. Haseltine Anthony J. Cavalieri
-------------------- --------------------
(Printed Name) (Printed Name)
Chairman and Chief Executive Officer Vice-President-Research
------------------------------------ -----------------------
(Title) (Title)
1-19-96 1-15-96
----------------------- ------------------------
(Date) (Date)
20
<PAGE>
SCHEDULE A
----------
Specifications for Informatics System ("HGS INFORMATION")
to be installed at Pioneer:
I. Database and analysis server supplied by PIONEER:
-------
1. Multi-processor Unix Host (DEC Alpha server or equivalent)
2. Unix system software
2.1. Sybase SQL Server
2.2. Sybase Open Client Libraries
2.3. Sybase Replication Server
2.4. C compiler
2.5. TCP/IP networking services
2.6. Electronic mail facilities
2.7. Backup/recovery equipment and software
II. Macintosh client machines supplied by PIONEER:
-------
1. Quadra or PowerMac models
2. Minimum 8MB of RAM; 16MB recommended
3. Minimum 14-inch color monitor; 17-inch recommended for active
users
4. MB of available disk space
5. TCP/IP network connection
III. Network connectivity supplied by HGS:
---
1. Installation and maintenance of dedicated circuit (at least
56Kbps)
2. Encryption equipment
3. CSU/DSU line terminating equipment
4. Network router interface
21
<PAGE>
IV. Macintosh client software supplied by HGS:
---
1. IRIS bioinformatics application
2. HGS BLAST Client
3. HGS HyperEntrez
4. Unix command client
5. PSEM (Protein structure evaluation module)
V. Server software supplied by HGS:
---
1. Components derived from the public domain are indicated; HGS will
install and configure the public domain software, but cannot
provide a warrany for its performance.
2. Database schema, stored procedures, triggers:
a) Unix command client
b) Data management utilities
c) BLAST sequence searching software (public domain)
d) FASTA sequence searching software (public domain)
e) BLOCKS motif searching software (public domain)
VI. Services provided by HGS:
---
1. Setup of PIONEER database schema
2. Testing of network and system components on PIONEER equipment
3. Development of on-going data transfer mechanism
4. Training for end users of the Iris application
5. Training for technical people in system administration and
troubleshooting
6. Assistance developing customer analyses and reports
7. Telephone and e-mail support for the database and related
applications
8. Customization of sequence classification method to adapt it to
plant DNA
22
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
SCHEDULE B
----------
Maize Library Specifications
Libraries must be constructed in vectors which contain either the[****]
binding sites. The vectors must be capable of being propagated as a [****].
Appropriate vectors include: [****]. Libraries must be [****]. cDNA generated by
[****] will not sequence efficiently. Therefore, all [****] will need to be
evaluated on a case-by-case basis before sequencing will commence. If these
libraries are important and Pioneer elects to have them sequenced, the
specifications for the number of good sequences, as stated in the body of this
agreement, will have to be adjusted accordingly [****] .
Libraries should be generated in [****] and [****] should be used for
sequencing.
Other information about each library will need to be provided by
PIONEER. This includes:
* tissue source
* method of construction
* vector type
* restriction sites used in cloning
* library complexity
* sample titer
* percent of clones containing insert
* average insert size
* bacterial strain
All libraries transferred for sequencing will be evaluated initially by
HGS for quality control purposes. [****] sequence reactions will initially be
performed for each library and successful reactions will be analyzed for
content.
23
<PAGE>
In the event HGS determines that any MAIZE library submitted by PIONEER
to HGS hereunder does not meet the specifications required for HGS to meet its
obligations under this agreement, HGS shall immediately notify PIONEER. In the
event PIONEER and HGS do not agree upon whether any given library meets the
required specifications, this matter shall be resolved by the Project Committee.
24
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
SCHEDULE C
----------
Timeline for Delivery of HGS INFORMATION
Month Task Who Where
- ----- ---- --- -----
[****] o Order Power Macs Pioneer Pioneer
o Order System Hardware Pioneer Pioneer
o M. Fannon to Pioneer to HGS Pioneer
meet with Pioneer IM Group
o Prepare/Send existing sequences Pioneer HGS-Pioneer
to use as test set
[****] o Set up Wide area link HGS HGS-Pioneer
o Set up Mack Network Pioneer Pioneer
o Configure System machine/Sybase Pioneer Pioneer
o Obtain a copy of IRIS Pioneer HGS-Pioneer
o Demo the software to Pioneer user HGS Pioneer
community (and IM)
o Train 2-3 users (2 days) Pioneer HGS
[****] o 3-5 MACS connected to HGS Pioneer Pioneer
o Set up Blast Server HGS Pioneer
o Test System Pioneer/HGS Pioneer/HGS
o Connect entire Mac Network Pioneer Pioneer
[****] o GO LIVE* Pioneer Pioneer/HGS
-------
o Replacement update of DB HGS HGS-Pioneer
[****] o Fine tune database replication HGS/Pioneer HGS-Pioneer
method
[****] o Have replication update in place HGS HGS-Pioneer
* "GO LIVE" is defined as the delivery to PIONEER of useable functional
capabilities of HGS INFORMATION as listed in schedule G.
25
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
SCHEDULE D
----------
Specifications for MAIZE ESTs
1.
In order to complete successfully the workplan for the RESEARCH PROJECT
as specified in Schedule E, the MAIZE ESTs shall have the following
characteristics
(a) be a minimum of [****] in length,
(b) contain [****] percent or less ambiguities, and
(c) [****] of the total number of MAIZE ESTs generated will be at
least [****] nucleotides in length.
2. HGS will classify the ESTs as follows.
Class 1: Identical to a known maize gene.
The MAIZE EST sequence overlaps with a nucleotide
sequence from the maize subset of Genbank.
[****] is used as the search method.
Class 2: Significant match to a maize protein.
The MAIZE EST sequence has a significant match with a
maize protein sequence from the non-redundant protein
database.
[****] is used as the search method.
Class 3: Significant match to any non-maize protein in the
non-redundant database.
The MAIZE EST sequence has a significant match with a
non-maize protein sequence in the non-redundant
database.
[****] is used as the search method.
Class 4: Mitochondria, chloroplast and vector.
The MAIZE EST sequence is determined to be
mitochondria, chloroplast or vector.
[****] search of mitochondrial and vector sequences.
26
<PAGE>
Class 5: Unknown.
The MAIZE EST sequence has no significant match in
the databases of published nucleotide sequences or
corresponding protein sequences.
OVERLAP is determined by a segment of at least [****] with at least
[****] identical matches. Ambiguities are counted as matches. The
[****] search method is used for overlap determination.
A SIGNIFICANT MATCH is determined by a [****] probability value of
[****] or less.
27
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
SCHEDULE E
----------
Work plan for RESEARCH PROJECT
1. Beginning upon the receipt of the MAIZE LIBRARIES from PIONEER,
HGS shall conduct RESEARCH PROJECT as follows:
Phase I Research using MAIZE LIBRARIES provided by PIONEER for
purposes of generating [****] MAIZE ESTs by [****];
Phase II Research using MAIZE LIBRARIES provided by PIONEER for
purposes of generating an additional [****] MAIZE ESTs,
cumulatively [****], by [****];
Phase III Research using MAIZE LIBRARIES provided by PIONEER for
purposes of generating an additional [****] MAIZE ESTs,
cumulatively [****], by [****], which shall be considered
completion of the RESEARCH PROJECT.
2. During the course of RESEARCH PROJECT, PIONEER shall provide HGS with,
and approve for sequencing, [****] for HGS to carry out RESEARCH
PROJECT. MAIZE LIBRARIES will be provided sufficiently in advance so
that HGS is able to prepare them and to schedule them for RESEARCH
PROJECT to meet HGS' obligations under this Schedule E.
3. HGS will perform [****] initial sequencing reactions from each MAIZE
LIBRARY for quality control within [****] of their submission by
PIONEER. The sequencing reactions will be provided to PIONEER for
review. In consultation with HGS scientists, PIONEER will then decide
as to which MAIZE LIBRARIES to proceed sequencing and the number of
MAIZE ESTs to be provided from each MAIZE LIBRARY before the next
review. HGS shall begin in-depth sequencing in these certain MAIZE
LIBRARIES within [****] of providing PIONEER the initial
[****]sequencing reactions, provided PIONEER has authorized such
sequencing reactions.
28
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
4. At certain times during the RESEARCH PROJECT, PIONEER
[****]
5. During the course of RESEARCH PROJECT, HGS scientists shall, to the
best of their ability, instruct and provide training to PIONEER
scientists in preparing cDNA libraries to enable PIONEER to prepare
MAIZE LIBRARIES that meet the technical specifications in Schedule B.
PIONEER will send up to [****] to HGS between the EFFECTIVE DATE and
[****], to prepare cDNA libraries in conjunction with HGS scientists
and to be trained by HGS in their methods of cDNA library preparation.
During the course of RESEARCH PROJECT, HGS scientists shall be
available to consult with PIONEER scientists on strategies to use MAIZE
ESTs and the HGS INFORMATION to determine/investigate gene function and
utility, via telephone, E-mail, fax or personal visits to HGS
facilities, including seminars.
6. Upon initiation of the RESEARCH PROJECT and no later than [****],
PIONEER will provide to HGS up to [****] MAIZE LIBRARIES.
7. Paragraphs 3-6 of this workplan are prepared to reflect the intention
of the parties in the conduct of the RESEARCH PROJECT. The parties
understand that changes in certain aspects of said paragraphs may need
to be changed based on experience gained during the RESEARCH PROJECT.
The PROJECT COMMITTEE shall have authority to modify the protocol as
required.
29
<PAGE>
SCHEDULE F
----------
Specifications for the PROJECT COMMITTEE
1. Each of PIONEER and HGS shall designate two (2) full time employees to
be members of the PROJECT COMMITTEE (hereinafter "MEMBERS").
2. The PROJECT COMMITTEE shall meet at least once every 6 (six) months
during the term of this agreement. The PROJECT COMMITTEE may elect to
meet more frequently as required. Meetings will be held at PIONEER and
HGS -in alternate succession.
3. MEMBERS shall be develop and finalize an agenda for each PROJECT
COMMITTEE meeting not later than two (2) weeks prior to each meeting.
4. MEMBERS shall be responsible for keeping minutes of each meeting which
shall be circulated for comment and review by PIONEER and HGS within
two (2) weeks of each meeting. A final draft of each meetings minutes
will then be created, agreed upon by both parties and kept on record.
5. Each of PIONEER and HGS may propose additional personnel or consultants
as invited guests to each PROJECT COMMITTEE meeting and the parties
shall mutually inform and agree on the participation of said guests
prior to said meeting.
6. MEMBERS of the PROJECT COMMITTEE may change over time as the nature of
the relationship evolves.
7. The MEMBERS of the PROJECT COMMITTEE shall be responsible for the
ongoing operational management and communication between HGS and
PIONEER pertaining to the RESEARCH PROJECT.
8. The PROJECT COMMITTEE may form subcommittees as required to address and
resolve issues pertaining to the RESEARCH PROJECT.
30
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
SCHEDULE G
----------
Definition of requirement to achieve GO LIVE status of
HGS INFORMATION
(To be completed by [****]).
This list identifies the software and services to be provided to PIONEER by HGS
that will enable users of the HGS INFORMATION at PIONEER to evaluate MAIZE ESTs.
The GO LIVE informatics milestone shall be considered met upon delivery of such
software and services to PIONEER and the Iris software running successfully at
PIONEER facilities.
Services to be available to PIONEER users from Macintosh workstations at GO LIVE
milestone:
1. Sign on with user identification and password authentication
2. Retrieve sequences by identification code, gene name and library
3. Export sequences in popular formats for sequence analysis programs
4. Retrieve library information and sequencing statistics
5. Retrieve sequence assemblies; display assembly alignments
6. Customize tabular displays
7. Customize user dashboard
8. Prepare and save custom queries
9. Perform interactive BLAST searches
10. Perform Genbank and Medline lookups using the HGS Entrez client
11. Perform interactive sequence assemblies
12. Perform simple modeling of putative proteins
13. Identify library distribution of related sequences
14. Perform library expression analyses
31
<PAGE>
In addition to the establishment of the above-listed features and operational
capabilities of the HGS INFORMATION, HGS will complete an initial user training
session for PIONEER users and will provide the following additional services to
fulfill the requirements of the GO LIVE milestone:
Services provided to PIONEER Information Management staff:
1. Install dedicated, encrypted data circuit
2. Configure and test the database
3. Develop data transfer mechanism
4. Customize sequence classification methods for analysis of Maize ESTs
5. Train technical staff on system administration functions:
a. Configuring Macintosh workstations
b. Setting up new users, modifying user parameters
c. Configuring local BLAST databases
d. Understanding the database schema
e. Understanding how data is processed and interpreted
f. Troubleshooting problems
g. Monitoring the HGS/PIONEER data connection
h. Developing custom queries and reports
32
"Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by [****], have been
separately filed with the Commission."
LICENSE AGREEMENT
between
F.HOFFMANN-LA ROCHE LTD, Grenzacherstrasse 124, CH-4070 Basel,
Switzerland, and
HOFFMANN-LA ROCHE INC., 340 Kingsland Street, Nutley, New Jersey 07110-
1199, U.S.A.
(hereinafter both jointly called "ROCHE")
and
HUMAN GENOME SCIENCES, INC., 9410 Key West Avenue, Rockville, Maryland 20850,
USA (hereinafter called "HGS")
***********************
WITNESSETH
WHEREAS, HGS professes to ROCHE to have substantial knowledge and expertise in
and owns or has rights to certain technology relating to genes and gene
sequencing, and
WHEREAS, ROCHE desires to utilize HGS Know-How (as hereinafter defined) to
research and develop Target Products and Products (other than Vaccines and
Immunotherapeutic Products against infectious agents).
<PAGE>
-2-
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. DEFINITIONS
-----------
For purposes of this Agreement, the terms defined in this Article 1
shall have the respective meanings set forth below:
1.1 "Affiliate" shall mean, with respect to either party hereto, any
corporation, partnership or other business entity controlled by,
controlling or under common control with either such party, with
"control" meaning direct or indirect beneficial ownership of at least
fifty percent (50 %) of the voting interest of such corporation or
other business entity. The term Affiliate of ROCHE shall not include
Genentech Inc, 460 Point San Bruno Bid, South San Francisco,
California, U.S.A unless ROCHE opts for such inclusion by giving a
written notice to HGS.
1.2 "Assembled Genome" shall mean the final results of the genome assembly
of a Streptococcus pneumoniae strain whose accuracy, quality, strategy
and time lines are set forth in Appendix 1, attached hereto and made a
part hereof.
1.3 "FDA" shall mean the United States Food and Drug Administration or the
equivalent regulatory agency in a Major Market Country.
1.4 "Field" shall mean the prevention, diagnosis or treatment of infectious
diseases in humans excluding Vaccines and Immunotherapeutics.
1.5 The term "First Commercial Sale" shall mean in each country the first
sale of any Product as part of a nationwide launch of Product by ROCHE,
its Affiliates or sublicensees following approval of its marketing
(including pricing) by the appropriate governmental agency for the
country in which the sale is to be made and when governmental approval
is not required, the first such sale in that country.
<PAGE>
-3-
1.6 "HGS" shall mean and include Human Genome Sciences, Inc. and its
Affiliates.
1.7 "HGS Know-How" shall mean all information and data with respect to the
Assembled Genome which is owned by HGS or as to which HGS has a
transferable interest and which is in the possession of HGS prior to
providing the Assembled Genome to ROCHE as set forth herein.
1.8 "HGS Patents" shall mean any and all patents and patent applications
anywhere in the world which are or will be owned by HGS or as to which
HGS has a transferable interest which is based on an invention
conceived or reduced to practice prior to delivery of the Assembled
Genome to ROCHE as set forth herein and which invention is directed to
a polynucleotide contained in the Assembled Genome or to an expression
product thereof or to an antibiotic produced by S. pneumoniae.
1.9 "Immunotherapeutics" shall mean products incorporating antibodies
and/or fragments thereof and/or derivatives thereof derived from
Technology, which have a protective or therapeutic effect against
infectious agents.
1.10 "Licensee" means any person or entity granted a right or license by
ROCHE to manufacture and/or use and/or sell a Product and/or Target
Product.
1.11 "Major Market Country" shall mean any one of the following countries:
the United States of America, France, Italy, Germany, United Kingdom or
Japan.
1.12 "NDA" shall mean a New Drug Application or Product License Application
by which approval is sought to sell a Product in the United States of
America pursuant to the regulations of the FDA or an equivalent
application in a Major Market Country.
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
-4-
1.13 "Net Sales" shall mean the gross sales of the 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 directly linked to and
included in the gross sales amount as computed in the central ROCHE's
Swiss Francs Sales Statistics for the countries concerned, whereby the
amount of such sales in foreign currencies is converted into Swiss
Francs at the average monthly rate of exchange at the time.
From the so adjusted gross sales there shall be a lump sum deduction of
[****] for those sales related deductions which are not accounted for
on a product-by-product basis (e.g. outward freights, transportation
insurance, packaging materials for dispatch of goods, custom duties,
discounts granted later than at the time of invoicing, cash discounts
and other direct sales expenses).
1.14 "Product(s)" shall mean a pharmaceutical preparation or composition
containing the Substance as its active ingredient(s).
1.15 "Research" shall mean the activities conducted directly or indirectly
by ROCHE to discover and develop Products and Target Products in the
Field.
1.16 "S. Aureus Data" shall mean the DNA sequencing data set forth in
Appendix II, attached hereto and made a part hereof.
1.17 "Substance" shall mean a polypeptide expressed by a polynucleotide from
an Assembled Genome or an antibiotic produced by S. pneumoniae which is
identified by or on behalf of ROCHE prior to the Assembled Genome being
generally available to the public and which was not known to the
general public prior to such identification by or on behalf of ROCHE.
1.18 "Target" shall mean a polynucleotide (or expression product thereof)
present in the Assembled Genome, which polynucleotide (or expression
product thereof) is selected as a target for screening by ROCHE.
<PAGE>
-5-
1.19 "Target Product" shall mean any product, material, substance or
composition which results directly or indirectly from screening against
a Target. For the avoidance of doubt a product, substance or material
or composition which is based on or derived from a product, material,
substance or composition which is identified by screening against a
Target is a Target Product, however, a product, substance or material
or composition which is based on or derived from a product, material,
substance or composition for which the screening test has been started
only after the Target or its genomic sequence has become known to the
public or to ROCHE independently from the collaboration hereunder,
shall not be considered as a Target Product.
1.20 "Technology" means the Assembled Genome or any portion thereof and/or
HGS Know-How and/or S. Aureus Data.
1.21 "Vaccine" shall mean products incorporating genes and/or gene products
and/or fragments thereof and/or derivatives thereof derived from
Technology, utilized for active immunization against infectious agents.
1.22 "Valid Claim" shall mean any claim in an unexpired patent included
within the HGS Patents which claim has not been disclaimed of held
invalid by a decision beyond the right of review.
1.23 The use herein of the plural shall include the singular and the use of
the masculine shall include the feminine.
2. OBLIGATION OF HGS
-----------------
2.1 ROCHE hereby acknowledges that HGS has provided ROCHE with S. Aureus
Data.
2.2 HGS agrees to use its reasonable efforts to provide to ROCHE the
Assembled Genome in accordance with Appendix I and until March 31, 1997
at the latest.
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
-6-
2.3 HGS agrees to provide HGS Know-How to ROCHE as it becomes available to
HGS.
3. LICENSES
--------
3.1 For the term of this Agreement, HGS hereby grants to ROCHE a worldwide
non-exclusive, royalty bearing license in the Field, under HGS Patent
Rights and HGS Know-How, without the right to grant sublicenses for the
purpose of performing preclinical research under this Agreement and
with the right to grant such sublicenses to develop, make, have made,
use and sell Products and Target Products in the Field, in each case in
accordance with the terms and conditions of this Agreement.
3.2 HGS grants to ROCHE and its Affiliates the non-exclusive right to use
the S. Aureus Data for Research in the Field.
3.3 HGS agrees that for a period of [****] from the date that the Assembled
Genome is provided to ROCHE, HGS will not grant access to the Assembled
Genome to any third party for use by such third party in the Field.
4. CONFIDENTIALITY AND PUBLICATION
-------------------------------
4.1 ROCHE agrees to retain Technology in confidence and not to disclose any
such Technology to a third party without the prior written consent of
HGS and to use Technology only for the purposes of this Agreement.
ROCHE's obligation hereunder shall terminate five (5) years after the
expiration or termination of this Agreement.
4.2 The obligations of confidentiality will not apply to Technology which:
(i) was known to ROCHE or generally known to the public prior to
its disclosure hereunder; or
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
-7-
(ii) subsequently becomes known to the public by some means other
than a breach of this Agreement;
(iii) is subsequently disclosed to ROCHE by a third party having a
lawful right to make such disclosure;
(iv) is required by law or bona fide legal process to be disclosed,
provided that ROCHE takes all reasonable steps to restrict and
maintain confidentiality of such disclosure and provides
reasonable notice to HGS; or
(v) is approved for release by mutual written agreement of the
parties.
4.3 HGS shall not publish or allow publication of or otherwise publicly
disclose Technology for[****] following the delivery of the Assembled
Genome to ROCHE.
4.4 Subject to Art. 4.3 and except as required by law (including applicable
federal or state securities laws), neither ROCHE nor HGS shall disclose
the terms and conditions of this Agreement to any third party or issue
press releases relating to this Agreement for any purpose whatsoever
without the other party's prior written consent, which consent shall
not be unreasonably withheld.
4.5 The term "ROCHE" as used in Articles 4.1, 4.2 and 4.4 above shall mean
and include F.Hoffmann-La Roche Ltd and its Affiliates and consultants
who have agreed to be bound by the confidentiality and non-use
obligations of this Article 4.
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
-8-
5. ROYALTIES
---------
5.1 ROCHE shall pay HGS a royalty of two and one half percent (2 1/2%) of
the Net Sales of Products sold or distributed by ROCHE, or a Licensee
in a country where such Product would infringe a Valid Claim. The
Initial Royalty Payment shall be due in accordance with Art.7.1.
In the case of Product being sold as a combination of Substance and one
or more other therapeutically active principle(s), the parties shall
negotiate in good faith and agree on such adjusted royalty rate
reflecting the significance of the Substance in relation to the other
active principle(s).
5.2 Royalties shall be payable on a country by country, Product by Product
basis, for ten (10) years from First Commercial Sale of a Product in a
country where such Product would infringe a Valid Claim or until the
expiration of the last to expire HGS Patent containing such Valid Claim
in such country whichever is later.
5.3 [****]
6. RESEARCH PAYMENTS
------------------
6.1 ROCHE has paid to HGS, a non-refundable and non-creditable research
payment of [****] and HGS hereby acknowledges the receipt thereof.
6.2 Within thirty (30) days after delivery of the Assembled Genome by HGS
to ROCHE, ROCHE shall pay to HGS an additional research payment of
[****] provided that in the event the Assembled Genome data has on or
before that date [****], the payment set forth herein shall not be
payable.
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
-9-
7. INITIAL ROYALTY PAYMENTS
------------------------
7.1 For each Product, ROCHE shall pay HGS an initial royalty payment of
[****] within thirty (30) days after [****].
7.2 For each Target Product, ROCHE shall pay to HGS an initial royalty
payment of [****] within thirty (30) days after [****].
8. AUDIT, ACCOUNTING AND PAYMENT
-----------------------------
8.1 ROCHE shall keep full and accurate books of account containing all
particulars that may be necessary for the purpose of calculating all
royalties payable to HGS. Such books of account shall be kept at their
principal place of business and, abstracts thereof shall be made
independently by ROCHE's public accountants and shall be made available
for audit not more frequently than once per calendar year and upon at
least thirty (30) working days' prior written notice. Any such audit
shall be made at the request and expenses of HGS and conducted during
regular business hours in such a manner as to not unnecessarily
interfere with ROCHE's normal business activities. All information,
data documents and abstracts herein referred to shall be used only for
the purpose of verifying royalty statements or compliance with this
agreement, shall be treated as ROCHE Confidential Information subject
to the obligations of this Agreement and need neither be retained more
than one (1) year after completion of an audit hereof, if an audit has
been requested; nor more than two (2) years from the end of the
calendar year to which each shall pertain; nor more than one (1) year
after the date of termination of this Agreement, whichever period is
shorter. In the event that such audits shall indicate that in any
calendar year that the royalties which should have been paid by ROCHE
are at least five percent (5 %) greater than those which were actually
paid by ROCHE, then ROCHE shall pay the cost of such inspection.
<PAGE>
-10-
8.2 In each year the amount of royalty due shall be calculated half yearly
as of June 30 and December 31 (each as being the last day of an
"ACCOUNTING PERIOD") and shall be paid half yearly within the ninety
(90) days next following such date, every such payment shall be
supported by the accounting prescribed in Paragraph 8.3 and shall be
made in United States currency. For countries other than the United
States, when calculating the adjusted gross sales, 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 calculated on the basis of the average daily
rate of exchange as retrieved from the Reuters System during such
month.
When calculating the royalties on Net Sales, such conversion shall be
at the average rate of the Swiss Franc to the United States currency
calculated on the basis of the average daily rate of exchange as
retrieved from the Reuters System for the applicable ACCOUNTING PERIOD.
8.3 With each half yearly payment, ROCHE shall deliver to HGS a full and
accurate accounting to include at least the following information:
(a) Quantity of each Product subject to royalty sold (by country)
by ROCHE, and its Affiliates and sublicensees;
(b) Total adjusted gross sales for each Product subject to royalty
sold (by country) by ROCHE, its Affiliates and sublicensees;
(c) Total royalties payable to HGS.
8.4 Any tax required to be withheld by ROCHE under the laws of any foreign
country for the account of HGS, shall be promptly paid by ROCHE for and
on behalf of HGS to the appropriate governmental authority, and ROCHE
shall furnish HGS with proof of payment of such tax. Any such tax
actually paid on HGS's behalf shall be deducted from royalty payments
due HGS.
<PAGE>
-11-
8.5 Only one royalty shall be due and payable for the manufacture, use and
sale of a Product irrespective of the number of patents or claims
thereof which cover the manufacture, use and sale of such Product.
8.6
(a) If at any time a Product is sold in a country in which
conditions or legal restrictions exist which prohibit
remittance of United States dollars or other currency
("Blocked Country"), the following provisions shall apply to
the payment of the corresponding royalty, depending on where
the Product is made:
(i) If such Product is made in the same or another Blocked
Country, ROCHE shall have the right and option to make such
royalty payment by depositing the amount thereof in the
currency of the country of sale or manufacture, at HGS's
election, to HGS's account in a bank designated by HGS in such
country.
(ii) If such Product is made in a country which is not a Blocked
Country, then a "number' shall be obtained by multiplying the
applicable royalty rate by the price at which the Product is
sold to the entity selling in the Blocked Country. ROCHE or
its Affiliates (A) shall pay that "number' to HGS and (B)
shall deposit the excess of the applicable royalty over the
"number', in the currency of the country of sale of the
Product, to HGS's account in a bank designated by HGS in such
Blocked Country.
(b) If in any country where the Product is sold, rates of
royalties provided for herein are prohibited by law or
regulation, ROCHE shall pay royalties to HGS at the highest
rate permitted in that country for license of the type herein
granted, provided that such rate is less than the rate
applicable under this Agreement.
<PAGE>
-12-
9. INDEMNIFICATION AND WARRANTY
----------------------------
9.1 (a) ROCHE agrees to indemnify and hold harmless HGS, its
directors, officers, employees, shareholders and agents (each
an "Indemnitee"), against any and all actions, claims
(specifically including, but not limited to, any damages based
on product liability claims), suits, losses, demands,
judgments, and other liabilities (including attorney's fees
until ROCHE assumes the defense as described below) asserted
by third parties, government and non-government, resulting
from or arising out of ROCHE's activities under this
Agreement, and/or Research conducted by ROCHE and/or any
Product or Target Product which is manufactured, used or sold
by or on behalf of ROCHE or a Licensee. If any such claims or
actions are made, HGS shall be defended at ROCHE's sole
expense by counsel selected by ROCHE and reasonably acceptable
to HGS provided that HGS may, at its own expense, also be
represented by counsel of its own choosing.
(b) ROCHE's indemnification hereunder shall not apply to any
liability, damage, loss or expense of an Indemnitee to the
extent that it is attributable to the negligence or
intentional misconduct (including breach of warranty) by the
Indemnitee, in which case HGS shall indemnify and hold
harmless ROCHE under the same terms and conditions as required
of ROCHE hereunder.
(c) ROCHE shall have the right to control the defense, settlement
or compromise of any such action; however, no settlement or
compromise shall be made without the consent of HGS which
consent shall not be unreasonably withheld.
9.2 HGS and ROCHE warrant to each other that it has the full right and
authority to enter into this Agreement and that it is not aware of any
impediment which would inhibit its ability to perform any of its
obligations.
<PAGE>
-13-
10. ASSIGNMENT, SUCCESSORS
----------------------
10.1 This Agreement shall not be assignable by either of the parties without
the prior written consent of the other party (which consent shall not
be unreasonably withheld), except that either party may assign this
Agreement to an Affiliate or to a successor in interest or transferee
of all or substantially all of the portion of the business to which
this Agreement relates.
10.2 Subject to the limitations on assignment herein, this Agreement shall
be binding upon and inure to the benefit of said successors in interest
and assigns of ROCHE and HGS. Any such successor 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 and such Assignment shall not relieve the Assignor of any of its
obligations under this Agreement.
11. TERMINATION
-----------
11.1 Except as otherwise specifically provided herein and unless sooner
terminated pursuant to Paragraph 1 1.2 of this Agreement, this
Agreement and the licenses and rights granted thereunder shall on a
country-by-country basis remain in full force and effect until ROCHE's
obligations to pay royalties hereunder has expired. After such expiry
in such country, ROCHE shall have the right to use or have used the
rights and licenses granted to ROCHE hereunder in such country without
further payment to HGS. In addition, after receipt of the Assembled
Genome and payment of the license fee set forth in Article 6.2, ROCHE
shall have the right to terminate this Agreement at any time within
sixty (60) days prior written notice; provided that upon such
termination all rights and licenses granted to ROCHE hereunder shall
terminate and ROCHE shall be bound by the covenant set forth in Article
12.1
<PAGE>
-14-
11.2 Upon material breach of any material provisions of this Agreement by
either party to this Agreement, in the event the breach is not curred
within thirty (30) days after written notice to the breaching party by
the other party, in addition to any other remedy it may have, the other
party at its sole option may terminate this Agreement, provided that
such other party is not then in breach of this Agreement.
11.3 The termination of this Agreement means that all rights and obligations
of this Agreement shall terminate except those of Articles 4, 9 and 12
and of Paragraphs 3.2, 7.1, 7.2, 11.1, 11.3 and 11.4 of this Agreement.
11.4 Upon termination of this Agreement for any reason, nothing herein shall
be construed to release either party from any obligation that matured
prior to the effective date of such termination.
12. COVENANTS OF ROCHE
------------------
12.1 ROCHE hereby covenants that, so long as the Technology is not publicly
known, it will use the Technology solely in the Field and only to the
extent ROCHE retains a license hereunder with respect thereto.
12.2 ROCHE hereby guarantees and shall be responsible for compliance by its
Affiliates with all terms and conditions of this Agreement.
13. GENERAL PROVISIONS
------------------
13.1 The relationship between HGS and ROCHE is that of independent
contractors. HGS and ROCHE are not joint venturers, partners, principal
and agent, master and servant, employer or employee, and have no
relationship other than as independent contracting parties. HGS shall
have no power to bind or obligate ROCHE in any manner. Likewise, ROCHE
shall have no power to bind or obligates HGS in any manner.
<PAGE>
-15-
13.2 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and supersedes all
prior agreements in this respect. There shall be no amendments or
modifications to this Agreement, except by a written document which is
signed by both parties.
13.3 This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware.
In the event of any controversy or claim arising out of or relating to
any provision of this Agreement or the breach thereof, the parties
shall try to settle those conflicts amicably between themselves.
Should the parties fail to agree, any controversy, dispute or claim
which may arise out of or in connection with this Agreement, or the
breach, termination or validity thereof other than with respect to
patent validity shall be settled by final and binding arbitration
pursuant to the Rules of the American Arbitration Association ("AAA")
as herein provided.
(a) The Arbitration Tribunal shall consist of three arbitrators.
Each party shall nominate in the request for arbitration and
the answer thereto one arbitrator and the two arbitrators so
named will then jointly appoint the third arbitrator as
chairman of the Arbitration Tribunal. If one party fails to
nominate its arbitrator or, if the parties' arbitrators cannot
agree on the person to be named as chairman within sixty (60)
days, the necessary appointments shall be made under the rules
of the AAA.
(b) The place of arbitration shall be in Wilmington, Delaware and
the arbitration proceedings shall be held in English. The
procedural law of the place of arbitration shall apply where
the AAA Rules are silent.
(c) The award of the Arbitration Tribunal shall be final and
judgement upon such an award may be entered in any competent
court or application may be made to any competent court for
judicial acceptance of such an award and order of enforcement.
<PAGE>
-16-
13.4 The headings in 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.
13.5 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 a party's right to the future enforcement of its rights
under this Agreement, excepting only as to an expressed written and
signed waiver as to a particular matter for a particular period of
time.
13.6 Notices. Any notices given pursuant to this Agreement shall be in
writing and shall be deemed to have been given and delivered upon the
earlier of (i) when received at the address set forth below, or (ii)
three (3) business days after mailed by certified or registered mail
postage prepaid and properly addressed, with return receipt requested,
or (iii) on the day when sent by facsimile as confirmed by certified or
registered mail. Notices shall be delivered to the respective parties
as indicated:
To HGS: Human Genome Sciences, Inc.
9410 Key West Avenue
Rockville, MD 20850
Attn: CEO
Copy to: Carella, Byrne, Bain, Gilfillan,
Cecchi, Stewart & Olstein
6 Becker Farm Road
Roseland, New Jersey 07068
Fax No. (201) 994-1744
Attn: Elliot M. Olstein, Esq.
<PAGE>
-17-
To ROCHE: F.Hoffmann-La Roche Ltd
Grenzacherstrasse 124
CH-4070 Basel
Switzerland
Attn: Corporate Law
and
Hoffmann-La Roche Inc.
340 Kingsland Street
Nutley, New Jersey 07110-1199
U.S.A.
Att: Corporate Secretary
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
<PAGE>
-18-
Basel, this March 12, 1996 F.HOFFMANN-LA ROCHE LTD
/s/
---------------------------------
Apprv'd As To Form
LAW DEPT.
Nutley, this March 12, 1996 HOFFMANN-LA ROCHE INC.
By /s/
---------
/s/
---------------------------------
Rockville, this March 20, 1996 HUMAN GENOME SCIENCES, INC.
/s/ William A. Haseltine
---------------------------------
William A. Haseltine
<PAGE>
[LOGO]
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
APPENDIX I: STREPTOCOCCUS PNEUMONIAE
1. Sequencing and Genome Assembly
Our plan is to sequence and assemble the [****] of Streptococcus
pneumoniae. This strain is a Type IV pathogenic clinical isolate.
Sequencing will be performed in both a sheared genomic library (present
in the plasmid pUC18) containing inserts of approximately [****] and a
lambda genome library containing inserts of approximately [****]. The
majority of our sequencing efforts will be from 2-3 libraries prepared
in pUC18. Sequencing will be performed from both the 5' and 3' ends of
each clone picked. Clones will be stored as glycerol stocks in 96-well
microtiter dishes and will be made available to Roche as well as the
host E. coli strain SURE2 (Stratagene) in which the libraries have been
established and the S. pneumoniae strain [****].
Based on preliminary sequencing efforts, approximately [****]
nucleotides from each genomic insert will be obtained from both the 5'
and 3' end on first-pass sequencing. Assuming a genomic size of 2.3-2.5
MB, approximately [****] high quality sequencing reactions will be
required to obtain a 3-5X coverage of the genome. As only [****] of
sequencing reactions result in high quality sequence information, we
estimate that the number of sequencing reactions will be significantly
higher than the [****] predictedrequired to provide [****] coverage of
the genome. After adequate coverage [****] of the genome is complete,
further sequencing on selected clones from both the pUC18 and lambda
libraries will be required to obtain closure of the genome. In
addition, other methods, including PCR, will be used to order and
complete the genome sequence map. The final accuracy of the assembled
genome will be equivalent to the [****]. As sequence ambiguities in
important genes may not be acceptable, HGS will undertake additional
in-depth sequencing of clones selected by Roche (see #2 below)
2. Individual Gene Sequencing
For those sequences of most importance to Roche (limited to [****]),
further in-depth sequencing will be performed if after a threefold
coverage there still exists sequence ambiguities in the individual
clones. We estimate that a [****] coverage of individual genes in
question will be more than sufficient to resolve all sequencing
ambiguities. Sequencing of these chosen clones will continue through
the time perod in which Roche has exclusive access.
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
3. Data Transmittal
Our plan is to submit edited sequence information weekly to Hoffmann-La
Roche. Potential homologies of Streptococcus pneumoniae genes to known
genes obtained by Blast analysis will also be provided. Once an
appropriate [****] coverage is obtained, preliminary assembly data can
also be provided. Both raw data and a chromatogram representing the
actual sequence run can be provided if needed.
We look forward to working with your informatics people to implement a
responsive and reliable method for transmitting sequence information
and annotation throughout the project. An effective transmission scheme
should:
* Deliver information in a usable electronic form
* Maintain key relationships among the various data elements
* Transmit additions and changes to the information as they occur
* Ensure transmission integrity; enable simple recovery from network or
equipment failures
* Ensure the data is secure from unauthorized disclosure
The details of the transmission technique should be worked out jointly
between Roche and HGS technical experts. Several schemes are possible
to meet these objectives.
Our recommendation is to use a transaction-based "store and forward"
system to transmit sequence information, sequence annotation,
preliminary assemblies and the genome as it is being completed. Under
this architecture, a database server at Roche facilities will be
connected with the HGS network via an encrypted wide-area network link.
As changes are posted to the HGS database, they will be transmitted
automatically to a database machine at Roche where the transactions
will executed on the Roche copy of the database.
This architecture has the advantage of delivering the information
directly in database format without requiring the development of
export/import procedures. Delivering information in database format
ensures that key relationships among database entities and database
integrity constraints are maintained across the wide-area link. HGS
currently uses the Sybase database management system, so the Sybase
Replication Server product is the natural candidate for performing the
wide-area database synchronization functions.
Obviously, there are other scenarios we can follow. Please feel free to
have your informatics group contact us regarding additional
possibilities and suggestions for data transmittal if they believe that
the above does not adequately address the needs of Hoffmann-La Roche.
<PAGE>
"The information below marked [****] has been omitted pursuant to a request for
confidential treatment. The omitted portions have been separately filed with the
Commission."
4. Timeline
* Preparation of [****] insert libraries in [****] - one is completed,
others are ongoing
* Preparation of lambda genomic library - [****]
Estimated
Completion
-------------
Sequencing to obtain [****] coverage - [****] weeks [*
[****] Coverage - 20 weeks *
[****] Coverage (if needed) - [****] weeks *]
Further sequencing, gap filling and genome assembly is estimated to
take an additional [****], suggesting a final completion date of
between [****] . Patent submission on the assembled genome will likely
take place within this time frame.
Assuming a genome size of 2.5 MB, sequence runs of [****] base pairs,
and [****] of sequencing reactions resulting in high quality sequence.
APPENDIX II: STAPHYLOCOCCUS AUREUS
1. Sequencing Data Set
HGS will provide sequence information and frozen bacterial glycerol
stocks for [****] GSTs (Genome-Specific Tags). This library was
prepared with sheared genomic DNA from Staphylococcus strain [****], a
strain cured of the prophages present in the NCTC8325 strain of S.
aureus. The genomic library is present in plasmid pBluescript
(Stratagene). The average sequence read on these GSTs is [****]
nucleotides and the fragment sizes range from [****] bp. Plasmids are
present in E. coli strain XL-1 Blue (Stratagene).
