<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 1998.
REGISTRATION NO. 333-51475
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
GENVEC, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
DELAWARE 2834 23-2705690
(STATE OF INCORPORATION) (PRIMARY STANDARD (I.R.S. EMPLOYER
INDUSTRIAL CLASSIFICATION IDENTIFICATION NUMBER)
CODE NUMBER)
GENVEC, INC.
12111 PARKLAWN DRIVE
ROCKVILLE, MARYLAND 20852
(301) 816-0396
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
DR. PAUL H. FISCHER
CHIEF EXECUTIVE OFFICER
GENVEC, INC.
12111 PARKLAWN DRIVE
ROCKVILLE, MARYLAND 20852
(301) 816-0396
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
PAGE MAILLIARD, ESQ. LESLIE E. DAVIS, ESQ.
NAN H. KIM, ESQ. KATHY A. FIELDS, ESQ.
WILSON SONSINI GOODRICH & ROSATI TESTA, HURWITZ & THIBEAULT, LLP
PROFESSIONAL CORPORATION HIGH STREET TOWER
650 PAGE MILL ROAD 125 HIGH STREET
PALO ALTO, CALIFORNIA 94304-1050 BOSTON, MASSACHUSETTS 02110
(650) 493-9300 (617) 248-7000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
---------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.001 par
value per share........ 2,875,000 $13.00 $37,375,000 $11,025.63(3)
</TABLE>
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- -------------------------------------------------------------------------------
(1) Includes 375,000 shares which the Underwriters have the option to purchase
to cover over-allotments, if any. Also reflects the proposed 5.9 for 1
reverse stock split of the Company's Common Stock, subject to stockholder
approval, which is anticipated to be consummated prior to the closing of
the offering contemplated hereby.
(2) Estimated solely for the purposes of computing the amount of the
registration fee in accordance with Rule 457(a).
(3) Fee previously paid in connection with original filing on April 30, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in
connection with the sale of Common Stock being registered. All amounts are
estimates except the SEC registration fee and the NASD filing fee.
<TABLE>
<S> <C>
SEC registration fee......................................... $ 11,025.63
NASD filing fee.............................................. 4,237.50
Printing and engraving costs................................. 130,000
Legal fees and expenses...................................... 400,000
Accounting fees and expenses................................. 150,000
Blue Sky fees and expenses................................... 10,000
Transfer Agent and Registrar fees............................ 10,000
Miscellaneous expenses....................................... 184,736.87
-----------
Total...................................................... $ 900,000
===========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors and any corporate agents in the terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). The Registrant's Restated
Certificate of Incorporation to be filed upon the closing of the offering to
which this Registration Statement relates (Exhibit 3.3 hereto) and the
Registrant's Bylaws (Exhibit 3.5 hereto) provides for indemnification of the
Registrant's directors, officers, employees and other agents to the extent and
under the circumstances permitted by the Delaware General Corporation Law. The
Registrant has also entered into agreements with its directors and executive
officers that require the Registrant among other things to indemnify them
against certain liabilities that may arise by reason of their status or
service as directors to the fullest extent not prohibited by Delaware law.
The Underwriting Agreement provides for indemnification by the Underwriters
of the Registrant, its directors and officers, and by the Registrant of the
Underwriters, for certain liabilities, including liabilities arising under the
Act, and affords certain rights of contribution with respect thereto.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since April 1995, the Registrant has issued and sold the following
unregistered securities (as adjusted to reflect the 5.9 to 1 reverse stock
split anticipated to be consummated immediately prior to the closing of the
offering contemplated hereby):
(1) From April 1, 1995 to March 31, 1998, Registrant granted options to
purchase 1,261,281 shares of Common Stock pursuant to its Amended and
Restated 1993 Stock Incentive Plan at exercise prices ranging from $.59 per
share to $4.13 per share.
(2) From April 1, 1995 to March 31, 1998, Registrant issued and sold an
aggregate of 363,159 shares of Common Stock to its employees, directors and
consultants upon exercise of stock options granted pursuant to Registrant's
Amended and Restated 1993 Stock Incentive Plan at exercise prices ranging
from $0.059 to $0.59 for an aggregate consideration of $1,266,994 .
(3) In September 1995, Registrant issued and sold an aggregate of
2,095,763 shares of Class C Preferred Stock to private investors for
aggregate cash consideration of $12,365,000.
II-1
<PAGE>
(4) In May 1996, Registrant issued and sold an aggregate of 96,852 shares
of Class D Preferred Stock for $1,000,000 to one investor.
(5) In October 1997, Registrant issued and sold an aggregate of 75,329
shares of Series E Preferred Stock to one investor for an aggregate cash
consideration of approximately $1.0 million.
(6) In December 1997, Registrant issued and sold an aggregate of 154,963
shares of Class E-1 Preferred Stock to one investor an aggregate cash
consideration of approximately $2.0 million.
There were no underwriters employed in connection with any of the above
transactions. See "Certain Transactions" in the form of the Prospectus
included herein.
The sales of the securities described in Items 15(1) and 15(2) were deemed
to be exempt from registration under the Securities Act in reliance on Rule
701 promulgated under Section 3(b)of the Securities Act as transactions
pursuant to compensatory benefit plans and contracts relating to compensation
as provided under such Rule 701. The sale of securities described in Items 15
(3) through 15 (6) were deemed to be exempt from registration under the
Securities Act in reliance on Section 4(2) of the Securities Act, or
Regulation D promulgated thereunder, as transactions by an issuer not
involving a public offering. The recipients of securities in each such
transaction represented their intention to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the share
certificates and other instruments issued in such transactions. All recipients
either received adequate information about the Registrant or had access,
through employment or other relationships, to such information.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1++ Restated Certificate of Incorporation of the Registrant, as currently
in effect.
3.2 Restated Certificate of Incorporation of the Registrant, to be filed
prior to the closing of the offering.
3.3++++ Restated Certificate of Incorporation, to be filed immediately
following the offering.
3.4++ Restated Bylaws of the Registrant as currently in effect.
3.5++++ Restated Bylaws, to be effective upon the closing of the offering.
4.1 Specimen Common Stock Certificate
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1++ Form of Indemnification Agreement for Directors and Officers.
10.2++++ Amended and Restated 1993 Stock Incentive Plan and forms of
agreements thereunder.
10.3++++ 1998 Employee Stock Purchase Plan.
10.4++++ 1998 Director Option Plan.
10.5 +Research, Development and Collaboration Agreement dated July 21,
1997 between the Warner-Lambert Company and the Registrant.
10.6 +Stock Purchase Agreement dated July 21, 1997 between the Warner-
Lambert Company and the Registrant.
10.7 +License Agreement dated May 31, 1996 between Scios, Inc. and the
Registrant.
10.8 +Stock Purchase Agreement dated September 26, 1997 between Fuso
Pharmaceutical Industries, Ltd. and the Registrant.
10.9 +Collaboration Agreement dated September 26, 1997 between Fuso
Pharmaceutical Industries, Ltd. and the Registrant.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------- -----------
<C> <S>
10.10 +Commercialization Agreement dated September 26, 1997 between Fuso
Pharmaceutical Industries Ltd. and the Registrant.
10.11 +License Agreement dated February 1, 1998 between Asahi Chemical
Industry Co., Ltd. and the Registrant.
10.12 +Sponsored Research Agreement dated April 1, 1998 between Cornell
University and the Registrant.
10.13 +Amended and Restated Exclusive License Agreement dated April 1,
1993 between Cornell University and the Registrant.
10.14* Lease Agreement between Trizechahn Twinbrook Metro Limited
Partnership, a Maryland limited partnership.
10.15* Lease Agreement dated September 1, 1997 between Biomedical Institute
and Registrant.
10.16++ Letter Agreement dated March 9, 1995 between the Registrant and Paul
H. Fischer.
10.17++ Letter Agreement dated June 6, 1993 between the Registrant and Imre
Kovesdi.
10.18++ Letter Agreement dated March 9, 1995 between the Registrant and
Thomas E. Smart.
10.19++ Consulting Agreement dated April 28, 1998 between the Registrant and
Herbert J. Conrad.
10.20++++ Registration Rights Agreement dated April 22, 1998 among the
Registrant and certain stockholders.
23.1++++ Consent of KPMG Peat Marwick LLP.
23.2* Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit
5.1).
23.3++ Consent of Leydig, Voit & Mayer, Ltd.
24.1++ Power of Attorney (see page II-5 of Registration Statement filed on
April 30, 1998).
27.1++ Financial Data Schedule (available in EDGAR format only).
</TABLE>
- --------
++Previously filed with original Registration Statement on April 30, 1998.
++++Previously filed with Amendment No. 1 to Registration Statement on June 1,
1998.
*To be filed by amendment.
+Confidential treatment requested.
(B) FINANCIAL STATEMENT SCHEDULES
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the
financial statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that:
(a) It will provide to the Underwriters at the closing as specified in
the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
(b) Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act may be permitted to directors, officers and
controlling persons of the Registrant, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
(c) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
registration statement as of the time it was declared effective.
(d) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar volume of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide Offering thereof;
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED THE
REGISTRANT HAS DULY CAUSED THIS AMENDMENT TO THE REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
ROCKVILLE, MARYLAND, ON THE 3RD DAY OF JUNE, 1998.
GenVec, Inc.
/s/ Paul H. Fischer
By___________________________________
Paul H. Fischer, President and
Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Paul H. Fischer Director, President June 3, 1998
- ------------------------------------- and Chief Executive
(PAUL H. FISCHER) Officer (Principal
Executive Officer;
Principal Financial
and Accounting
Officer)
Hal S. Broderson * Director June 3, 1998
- -------------------------------------
(HAL S. BRODERSON)
Herbert J. Conrad * Director June 3, 1998
- -------------------------------------
(HERBERT J. CONRAD)
Harry T. Rein * Director June 3, 1998
- -------------------------------------
(HARRY T. REIN)
Wendell Wierenga * Director June 3, 1998
- -------------------------------------
(WENDELL WIERENGA)
Gregory Zaic * Director June 3, 1998
- -------------------------------------
(GREGORY ZAIC)
*By: /s/ Paul H. Fischer
----------------------------------
Paul H. Fischer,
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------- -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1++ Restated Certificate of Incorporation of the Registrant, as
currently in effect.
3.2 Restated Certificate of Incorporation of the Registrant, to be filed
prior to the closing of the offering.
3.3++++ Restated Certificate of Incorporation, to be filed immediately
following the offering.
3.4++ Restated Bylaws of the Registrant as currently in effect.
3.5++++ Restated Bylaws, to be effective upon the closing of the offering.
4.1 Specimen Common Stock Certificate
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation.
10.1++ Form of Indemnification Agreement for Directors and Officers.
10.2++++ Amended and Restated 1993 Stock Incentive Plan and forms of
agreements thereunder.
10.3++++ 1998 Employee Stock Purchase Plan.
10.4++++ 1998 Director Option Plan.
10.5 +Research, Development and Collaboration Agreement dated July 21,
1997 between the Warner-Lambert Company and the Registrant.
10.6 +Stock Purchase Agreement dated July 21, 1997 between the Warner-
Lambert Company and the Registrant.
10.7 +License Agreement dated May 31, 1996 between Scios, Inc. and the
Registrant.
10.8 +Stock Purchase Agreement dated September 26, 1997 between Fuso
Pharmaceutical Industries, Ltd. and the Registrant.
10.9 +Collaboration Agreement dated September 26, 1997 between Fuso
Pharmaceutical Industries, Ltd. and the Registrant.
10.10 +Commercialization Agreement dated September 26, 1997 between Fuso
Pharmaceutical Industries Ltd. and the Registrant.
10.11 +License Agreement dated February 1, 1998 between Asahi Chemical
Industry Co., Ltd. and the Registrant.
10.12 +Sponsored Research Agreement dated April 1, 1998 between Cornell
University and the Registrant.
10.13 +Amended and Restated Exclusive License Agreement dated April 1,
1993 between Cornell University and the Registrant.
10.14* Lease Agreement between Trizechahn Twinbrook Metro Limited
Partnership, a Maryland limited partnership.
10.15* Lease Agreement dated September 1, 1997 between Biomedical Institute
and Registrant.
10.16++ Letter Agreement dated March 9, 1995 between the Registrant and Paul
H. Fischer.
10.17++ Letter Agreement dated June 6, 1993 between the Registrant and Imre
Kovesdi.
10.18++ Letter Agreement dated March 9, 1995 between the Registrant and
Thomas E. Smart.
10.19++ Consulting Agreement dated April 28, 1998 between the Registrant and
Herbert J. Conrad.
10.20++++ Registration Rights Agreement dated April 22, 1998 among the
Registrant and certain stockholders.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<C> <S>
23.1++++ Consent of KPMG Peat Marwick LLP.
23.2* Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit
5.1).
23.3++ Consent of Leydig, Voit & Mayer, Ltd.
24.1++ Power of Attorney (see page II-5 of Registration Statement filed on
April 30, 1998).
27.1++ Financial Data Schedule (available in EDGAR format only).
</TABLE>
- --------
++Previously filed with original Registration Statement on April 30, 1998.
++++Previously filed with Amendment No. 1 to Registration Statement on June 1,
1998.
*To be filed by amendment.
+Confidential treatment requested.
<PAGE>
EXHIBIT 3.2
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GENVEC, INC.
The undersigned, Paul H. Fischer, President of GenVec, Inc., a corporation
organized and existing under the laws of the State of Delaware (the
"Corporation"), does hereby certify as follows:
1. The present name of the Corporation is GenVec, Inc.
2. The original Certificate of Incorporation of the Corporation was
filed in the Office of the Secretary of State of the State of Delaware on
December 7, 1992.
3. This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with the provisions of Sections 242 and 245 of the
Delaware General Corporation Law by the Board of Directors of the Corporation.
4. This Amended and Restated Certificate of Incorporation was approved by
written consent of the stockholders pursuant to Section 228 of the Delaware
General Corporation Law.
5. The Certificate of Incorporation of the Corporation is hereby amended
and restated in its entirety as follows:
FIRST: The name of the Corporation is:
GENVEC, INC.
SECOND: The address of its registered office in the State of Delaware is:
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801. The name of its registered agent at such address is: THE
CORPORATION TRUST COMPANY.
THIRD: The nature of the business or purposes to be conducted or
promoted is:
To have unlimited power to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law
of Delaware.
<PAGE>
FOURTH: In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the Corporation is expressly authorized to
make, alter or repeal the Bylaws of the Corporation.
FIFTH: Elections of directors need not be by written ballot unless the
Bylaws of the Corporation shall so provide.
SIXTH: To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended, no director of
the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Neither any amendment nor repeal of this Article, nor the adoption of any
provision of this Certificate of Incorporation inconsistent with this Article,
shall eliminate or reduce the effect of this Article in respect of any matter
occurring, or any cause of action, suit or claim that, but for this Article,
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
SEVENTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
EIGHTH: Immediately following the Reverse Split (as defined below), the
aggregate number of shares which the Corporation shall have authority to issue
is 61,083,019 of which 50,000,000 shall be designated as Common Stock, par value
$0.001 per share ("Common Stock"), 226,099 shall be designated as Class A
Convertible Preferred Stock, par value $0.001 per share ("Class A Preferred
Stock"), 1,959,444 shall be designated as Class B Convertible Preferred Stock,
par value $0.001 per share, ("Class B Preferred Stock"), 3,570,332 shall be
designated as Class C Convertible Preferred Stock, par value $0.001 per share
("Class C Preferred Stock"), 96,852 shall be designated as Class D Convertible
Preferred Stock, par value $0.001 per share ("Class D Preferred Stock"), 75,329
shall be designated as Class E Convertible Preferred Stock, par value $0.001 per
share ("Class E Preferred Stock"), 154,963 shall be designated as Class E1
Convertible Preferred Stock, par value $0.001 per share ("Class E1 Preferred
Stock") (the Class A Preferred Stock, Class B
-2-
<PAGE>
Preferred Stock, Class C Preferred Stock, Class D Preferred Stock, Class E
Preferred Stock and Class E1 Preferred Stock, unless otherwise indicated, are
referred to collectively as the "Preferred Stock") and 5,000,000 shares shall be
undesignated Preferred Stock. Upon the closing of a Qualifying Public Offering
(as defined below) and the concomitant Mandatory Conversion (as defined below)
of the outstanding Preferred Stock into Common Stock, such Preferred Stock shall
automatically be canceled and retired and cease to exist.
Effective immediately upon the filing of this Amended and Restated
Certificate of Incorporation, there shall be a one for 5.9 reverse stock split
(the "Reverse Split") pursuant to which each 5.9 outstanding shares of Common
Stock shall be consolidated and converted, automatically and without further
action, into one share of Common Stock and each 5.9 outstanding shares of each
class of Preferred Stock shall be consolidated and converted, automatically and
without further action, into one share of Preferred Stock of such class. Such
combination shall be effected on a certificate-by-certificate basis. No
fractional share of Common Stock or Preferred Stock shall be issued in
connection with such conversion, and in lieu of any fractional share to which a
holder of Common Stock or Preferred Stock would otherwise be entitled, the
Corporation shall pay to such holder cash equal to the product of such fraction
multiplied by the fair market value of one share of Common Stock (or Preferred
Stock as the case may be) on the date of conversion, as determined in good faith
by the Board of Directors of the Corporation. Each reference in this
Certificate of Incorporation to an amount or price per share of the
Corporation's capital stock has been adjusted to reflect the Reverse Split.
The undesignated 5,000,000 shares of Preferred Stock may be issued
from time to time in one or more series. The Board of Directors is authorized
to determine the number of shares of any such series. The Board of Directors is
also authorized to determine or alter the powers, designations, preferences,
rights and restrictions to be imposed upon any wholly unissued series of
Preferred Stock and, within the limits and restrictions stated in any resolution
or resolutions of the Board of Directors originally fixing the number of shares
constituting any series, to increase (but not above the total number of
authorized shares of the class) or decrease (but not below the number of shares
of such series then outstanding) the number of shares of any series subsequent
to the issue of shares of that series.
The Corporation shall from time to time in accordance with the laws of
the State of Delaware increase the authorized amount of its Common Stock if at
any time the number of shares of Common Stock remaining unissued and available
for issuance shall not be sufficient to permit conversion of the Preferred
Stock.
The following is a statement of the designations, preferences,
limitations and relative rights in respect of the shares of each class of stock
of the Corporation:
A. Common Stock.
------------
-3-
<PAGE>
(1) Voting Rights. Each holder of record of Common Stock shall
-------------
have the right to one vote for each share of Common Stock standing in the name
of such holder on the books of the Corporation.
(2) Dividends. Subject to the rights of the holders of the
---------
Preferred Stock, each holder of record of Common Stock will be entitled to
dividends in such amounts and at such times as may be declared by the Board of
Directors.
B. Preferred Stock.
---------------
(1) Dividends. In the event that the Corporation declares or
---------
pays any dividend on the Common Stock or makes, directly or indirectly, any
other distribution in respect to the Common Stock, the holders of Preferred
Stock shall be entitled to participate with the holders of Common Stock in any
such dividends paid or set aside for payment, such that the holders of Preferred
Stock shall receive, with respect to each share of Preferred Stock, an amount
equal to (a) the dividend payable with respect to each share of Common Stock
multiplied by (b) the number of shares (and fraction of a share, if any) of
Common Stock into which such share of Preferred Stock is convertible as of the
record date for such dividend.
(2) Voting Rights.
-------------
(a) Except as otherwise provided herein or by law, the
holders of Preferred Stock shall have full voting rights and powers, they shall
be entitled to vote on all matters as to which holders of the Common Stock shall
be entitled to vote, they shall vote together with the holders of the Common
Stock as a single class, and they shall be entitled to one vote for each share
of Common Stock which would be held by them if all of their shares of Preferred
Stock would be converted into shares of Common Stock under Section B(5) of this
Article.
(b) Except as otherwise provided herein or by law, the vote
or consent of at least two-thirds of the outstanding shares of the Class C
Preferred Stock voting as a separate class shall be required for the following
actions:
(i) any change in the rights, preferences, or
privileges of the Class C Preferred Stock;
(ii) any amendment, repeal or addition of any
provision of or to the ByLaws, if such action would
adversely affect the preferences, rights, privileges or
powers of, or restrictions provided for the benefit of, the
Class C Preferred Stock;
(iii) the authorization of any class of equity
securities ranking prior to or having preference over the
Class C Preferred Stock with respect to dividends,
redemption or assets of the Corporation;
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<PAGE>
(iv) the reclassification of any shares of Common Stock
into shares of any class of equity securities ranking prior
to or having preference over the Class C Preferred Stock
with respect to dividends, redemption or assets of the
Corporation;
(v) the merger or consolidation of the Corporation
into or with any other corporation, the sale of all or
substantially all of the Corporation's assets, or the
liquidation of the assets of the Corporation, provided,
--------
however, that no such vote or consent under this Section
-------
B(2)(b)(v) shall be required if the aggregate price to be
paid to the Corporation's stockholders in the merger,
consolidation, sale or liquidation is equal to or greater
than an amount determined by multiplying (x) $8.85 per
share, as adjusted to reflect any change in the number of
shares of the Corporation's Common Stock as a result of a
stock split, stock dividend, distribution payable in shares
of the Corporation's Common Stock or other reclassification
after June 2, 1998, by (y) the number of outstanding shares
of the Corporation's Common Stock (for purposes of this
determination only, a securityholder holding capital stock
of the Corporation convertible into the Corporation's Common
Stock shall be treated as having converted all such
convertible stock into the Corporation's Common Stock at the
applicable conversion rate, pursuant to Section B(5) of this
Article, in effect at the time of this determination); and
(vi) the acquisition by the Corporation of any
corporation or other business entity if such a transaction
involves (A) the issuance of equity securities of the
Corporation resulting in the new securityholders having more
than 25 percent of the voting power pursuant to Sections
A(1) and B(2)(a) of this Article or (B) the payment of cash
consideration equivalent to 25% of the product of (x) the
sum of the number of shares of Common Stock and Preferred
Stock then outstanding and the number of such shares
underlying options and other rights to acquire such shares
(irrespective of whether such shares, options or other
rights are conditional or unvested) times (y) the then most
recent price per share at which the Corporation sold any
shares of Preferred Stock in an offering that yielded gross
proceeds of not less than $5,000,000 to the Corporation.
(c) Except as set forth in article Tenth below, whenever
holders of the Preferred Stock or Common Stock, separately or as a single class,
are required or permitted to take any action, such action may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to
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<PAGE>
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted.
(3) Rights of Liquidation.
---------------------
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation (any such event being
hereinafter referred to as a "Liquidation"), before any distribution of assets
of the Corporation shall be made to or set apart for the holders of the Common
Stock, the holders of the Preferred Stock shall be entitled to receive payment
out of such assets of the Corporation in an amount per share equal to $2.95 per
share for each share of Class A Preferred Stock held by such holder, $5.90 per
share for each share of Class B Preferred Stock or Class C Preferred Stock held
by such holder, $10.325 per share for each share of Class D Preferred Stock held
by such holder, $13.275 per share for each share of Class E Preferred Stock held
by such holder and $12.90625 per share for each share of Class E1 Preferred
Stock held by such holder (such amounts being referred to herein as "Liquidation
Preference") plus any declared but unpaid dividends on such shares of Preferred
Stock. If the assets of the Corporation available for distribution to the
holders of the Preferred Stock shall not be sufficient to make in full the
payments required by this Section B(3)(a), such assets shall be distributed
ratably among the holders of the Preferred Stock based upon the aggregate
Liquidation Preferences of the shares of Preferred Stock held by each such
holder.
(b) If the assets of the Corporation available for
distribution to stockholders exceed the aggregate amounts payable pursuant to
Section B(3)(a) of this Article above, the remainder of such assets shall be
distributed to the holders of Preferred Stock and Common Stock on a pro rata
basis, with the amount distributable to the holders of Preferred Stock to be
computed on the basis of the number of shares of Common Stock which would be
held by them if immediately prior to the Liquidation all of the outstanding
shares of such Preferred Stock had been converted into shares of Common Stock
under Section B(5)(a) of this Article.
(c) A merger or consolidation involving the Corporation in
which the Corporation is not the surviving entity and a sale, lease or transfer
of all or substantially all of the assets of the Corporation shall, at the
option of holders representing a majority of the Preferred Stock voting as a
single class, be deemed a Liquidation, unless in connection with such
transaction, each holder of Preferred Stock receives a preferred stock having
terms and conditions which are no less favorable than the terms and conditions
of the Preferred Stock held by such holder prior to the transaction.
(d) Notwithstanding the provisions contained in Section
B(3)(c) of this Article above, in the event of a merger or consolidation
involving the Corporation in which the Corporation is not the surviving entity,
or a sale, lease or transfer of all or substantially all of the assets of the
Corporation, in which a holder of Preferred Stock would receive cash and/or
marketable securities (i.e., securities registered under the Securities Act of
-----
1933, as amended, at the time of delivery, or securities committed to be so
registered within 60 days after delivery) in an amount less than the aggregate
Liquidation Preference of the shares of Preferred Stock held by such holder,
then
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<PAGE>
holders of a majority of the Preferred Stock then outstanding, voting as a
single class, may elect, in lieu of all other rights under the terms of the
transaction or this Article, to receive an amount equal to their aggregate
Liquidation Preference for such shares of Preferred Stock. If the holders make
such an election, each such holder shall have a priority on such holder's pro
rata portion of all cash and marketable securities received in such transaction
to the extent of the aggregate Liquidation Preference for such holder's shares
of Preferred Stock. Such election shall be made by the holders by written notice
to the Corporation within 30 days after the date of stockholder approval of the
transaction (or within 30 days after receiving notice of such transaction from
the Corporation if the transaction is not submitted for stockholder approval).
(e) In the event that the Corporation shall, at any time
after June 2, 1998, issue any shares of Preferred Stock (i) by stock dividend or
any other distribution upon any stock of the Corporation payable in shares of
Preferred Stock, or (ii) by a subdivision of its shares of outstanding Preferred
Stock, by reclassification or otherwise, the Liquidation Preference then in
effect shall be reduced proportionately, and, in like manner, in the event of
any combination of shares of Preferred Stock, by reclassification or otherwise,
the Liquidation Preference then in effect shall be proportionately increased;
provided, however, that the Liquidation Preference shall not be adjusted as a
result of the Reverse Split.
(4) Actions Requiring the Consent of the Holders of the
---------------------------------------------------
Preferred Stock. As long as any shares of Preferred Stock remain outstanding,
- ---------------
the consent of the holders of at least a majority of the votes which holders of
Preferred Stock are entitled to cast, given in person or by proxy, either in
writing without a meeting or by vote at a meeting called for such purpose, shall
be necessary for effecting or validating any amendment, alteration or repeal of
any of the provisions of the Certificate of Incorporation or the By-Laws of the
Corporation which (a) increases the number of authorized shares of any class of
capital stock, (b) adversely affects the rights, preferences or powers of any
class of Preferred Stock or of the holders thereof or (c) decreases the required
time for the giving of any notice to which the holders of Preferred Stock may be
entitled.
(5) Conversion.
----------
(a) Right To Convert. A holder of record of any share or
----------------
shares of Class A Preferred Stock shall have the right at any time, at such
holder's option, to convert, without the payment of any additional
consideration, each share of Class A Preferred Stock held by such holder into
that number of fully paid and nonassessable shares of Common Stock as is
determined by dividing (i) .50 by (ii) the Conversion Factor (as defined in
Section B(5)(d) of this Article below) then in effect for the Class A Preferred
Stock. A holder of record of any share or shares of Class B Preferred Stock,
Class C Preferred Stock, Class D Preferred Stock, Class E Preferred Stock or
Class E1 Preferred Stock shall have the right at any time, at such holder's
option, to convert, without the payment of any additional consideration, each
share of Class B Preferred Stock, Class C Preferred Stock, Class D Preferred
Stock, Class E Preferred Stock or Class E1 Preferred Stock held by such holder
into that number of fully paid and nonassessable shares of Common Stock as is
determined by dividing (i) 1.00 by (ii) the Conversion Factor (as defined in
Section B(5)(d) of this Article below) then in effect for the Class B Preferred
Stock, Class C Preferred Stock, Class D Preferred Stock,
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<PAGE>
Class E Preferred Stock or Class E1 Preferred Stock, as applicable.
Notwithstanding the foregoing, the provisions of B(5)(d)(i) shall not apply to
the Conversion Factor for Class D Preferred Stock, Class E Preferred Stock or
Class E1 Preferred Stock. No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of any Preferred Stock. With respect
to any fraction of a share of Common Stock called for upon any conversion after
completion of the calculation of the aggregate number of shares of Common Stock
to be issued to such holder, the Corporation shall pay to such holder an amount
in cash equal to any fractional share to which such holder would be entitled,
multiplied by the current market value of a share, as determined in good faith
by the Board of Directors of the Corporation.
(b) Mechanics of Conversion. If the holder of shares of
-----------------------
Preferred Stock desires to exercise such right of conversion, such holder must
give written notice to the Corporation (the "Conversion Notice") of the election
by such holder to convert a stated number of shares of Preferred Stock (the
"Conversion Shares") into shares of Common Stock on the date specified in the
Conversion Notice (which date shall not be earlier than the date on which the
Corporation receives the Conversion Notice (the "Conversion Date"), and by
surrender of the certificate or certificates representing such Conversion
Shares. The Conversion Notice shall also contain a statement of the name or
names (with addresses) in which the certificate or certificates for Common Stock
shall be issued. Promptly after the Conversion Date and the surrender of the
Conversion Shares, the Corporation shall issue and deliver, or cause to be
delivered, to the holder of the Conversion Shares or such holder's nominee or
nominees, a certificate or certificates for the number of shares of Common Stock
issuable upon the conversion of such Conversion Shares. Such conversion shall be
deemed to have been effected as of the close of business on the Conversion Date,
and the person or persons entitled to receive the shares of Common Stock
issuable upon conversion shall be treated for all purposes as the holder or
holders of record of such shares of Common Stock as of the close of business on
such date.
(c) Common Stock Reserved. The Corporation shall at all
---------------------
times reserve and keep available out of its authorized but unissued Common
Stock, solely for issuance upon the conversion of shares of Preferred Stock as
herein provided, such number of shares of Common Stock as shall from time to
time be issuable upon the conversion of all of the shares of Preferred Stock at
the time outstanding.
(d) Conversion Factor. The initial conversion factor for
-----------------
the Class A Preferred Stock shall be .50, the initial conversion factor for the
Class B Preferred Stock, the Class C Preferred Stock, the Class D Preferred
Stock, the Class E Preferred Stock and the Class E1 Preferred Stock shall be
1.00, subject to adjustment, in each case, in accordance with the provisions in
this Section B(5)(d), except that the provisions of B(5)(d)(i) shall not apply
to the Conversion Factor for Class D Preferred Stock, Class E Preferred Stock or
Class E1 Preferred Stock; provided, however, that the Liquidation Preference
shall not be adjusted as a result of the Reverse Split. Such respective
conversion factors in effect from time to time, as adjusted pursuant to the
applicable provisions of this Section B(5)(d), are referred to herein as the
"Conversion Factor" for the Class A Preferred Stock, the Class B Preferred
Stock, the Class C Preferred Stock, the Class D Preferred Stock, Class E
Preferred Stock or Class E1 Preferred Stock, as applicable. All of the remaining
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<PAGE>
provisions of this Section B(5)(d) shall apply separately to the respective
Conversion Factors in effect from time to time; provided, however, that the
-------- -------
provisions of B(5)(d)(i) shall not apply to the Conversion Factor for Class D
Preferred Stock, Class E Preferred Stock or Class E1 Preferred Stock.
(i) In the event that the Corporation shall, at any time or
from time to time, issue or sell any shares of the capital stock of the
Corporation (including treasury shares, but excluding (v) 226,099 shares of
Class A Preferred Stock, 3,570,332 shares of Class C Preferred Stock, 96,852
shares of Class D Preferred Stock and 75,329 shares of Class E Preferred Stock,
(w) an aggregate of 3,588,066 shares of Common Stock (plus any additional shares
reserved under the 1993 Stock Incentive Plan, as amended, the 1998 Employee
Stock Purchase Plan, or the 1998 Director Option Plan, pursuant to the terms of
each) and an aggregate of 1,959,444 shares of Class B Preferred Stock that have
been issued, have been reserved for issuance or will be issued pursuant to
options, warrants or other commitments which have been granted or executed as of
June 2, 1998 or will be granted or executed pursuant to the Corporation's 1993
Stock Incentive Plan, as amended, (x) any shares of the capital stock of the
Corporation issued pursuant to the Stock Purchase Agreement, dated July 21,
1997, between the Corporation and Warner-Lambert Company, as the same may be
amended from time to time (including without limitation 154,963 shares of Class
E1 Preferred Stock), (y) any shares of the capital stock of the Corporation
issued in connection with equipment financing, sponsored research (including,
but not limited to, those shares issuable upon exercise of a warrant being
granted to Cornell University in conjunction with its agreement with the
Corporation), collaboration, technology licensing, development agreements or any
other strategic partnerships approved by the Board of Directors and (z) the
shares of Common Stock issuable upon conversion of the Preferred Stock), then,
immediately upon such issuance or sale, the Conversion Factor shall be reduced
as follows:
(A) The Conversion Factor shall be changed to a number
determined by multiplying the Conversion Factor in effect immediately prior to
such issuance by the following fraction:
A + B
--
C
--------
A + D
wherein:
A = the number of Outstanding Shares (as defined below)
immediately prior to the subject issuance;
B = the aggregate consideration in dollars for the shares
then being issued, expressed as an absolute number;
C = the Conversion Factor in effect immediately prior to
the subject issuance with respect to the applicable
class of Preferred Stock; and
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<PAGE>
D = the number of shares then being issued.
The applicable Conversion Factor shall be further reduced from time to time
thereafter whenever any shares are so issued or converted for a price per share
lower than the amount of the applicable Conversion Factor, then in effect, as
adjusted prior to that date.
(B) In the event that any shares shall be issued or
sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor, without deduction of any expenses
incurred or any underwriting commissions or concessions paid or allowed by the
Corporation in connection therewith. In the event that any shares shall be
issued for a consideration other than cash, the amount of the consideration
other than cash received by the Corporation shall be deemed to be the fair value
of such consideration, without deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Corporation in
connection therewith. Whenever shares are issued upon the exercise of warrants,
options or other conversion rights, the consideration received therefor shall
include both the consideration paid upon the issuance and upon the exercise of
such warrant, option or other right.
(C) In the event that the Corporation shall in any
manner grant (whether directly or by assumption in a merger or otherwise) any
rights to subscribe for or to purchase any Common Stock or securities
convertible into Common Stock ("Convertible Securities"), or any options for the
purchase of any Common Stock or Convertible Securities, whether or not such
rights or options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which shares
of Common Stock issuable upon the exercise of such rights or options or upon
conversion or exchange of such Convertible Securities (determined by dividing
(I) the total amount, if any, received or receivable by the Corporation as
consideration for the granting of such rights or options, plus the minimum
aggregate amount of additional consideration, if any, payable to the Corporation
upon the exercise of such rights or options, or plus, in the case of any
Convertible Securities or rights or options to purchase Convertible Securities,
the minimum aggregate amount of additional consideration, if any, payable upon
the issue or sale of such Convertible Securities and upon the conversion or
exchange thereof, by (II) the total maximum number of shares of Common Stock
issuable upon the exercise of such rights or options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise of such
rights or options) shall be less than the Conversion Factor in effect
immediately prior to the time of the granting of such rights or options, then
the total maximum number of shares of Common Stock issuable upon the exercise of
such rights or options or upon conversion or exchange of all such Convertible
Securities issuable or issuable upon the exercise of such rights or options
shall be deemed to be outstanding as of the date of the granting of such rights
or options and to have been issued for such price per share, with the effect on
the applicable Conversion Factor specified in Section (5)(d)(i) of this Article.
No further adjustment of the applicable Conversion Factor shall be made upon the
actual issue of such Common Stock or upon the actual issue of such Convertible
Securities upon exercise of such rights or options or upon the actual issue of
such Common Stock upon conversion or exchange of such Convertible Securities.
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<PAGE>
(D) If the purchase price provided for in any right or
option referred to in Section B(5)(d)(i)(C) of this Article, or the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities, or the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock shall change (other than under
or by reason of provisions designed to protect against dilution), the Conversion
Factor then in effect hereunder shall forthwith be readjusted (increased or
decreased, as the case may be) to the Conversion Factor which would have been in
effect at such time had such rights, options or Convertible Securities still
outstanding provided for such changed purchase price, additional consideration
or conversion rate, as the case may be, at the time initially granted, issued or
sold.
(E) Notwithstanding the foregoing, upon the consent of
the holders of two-thirds of the applicable class of Preferred Stock affected
and then outstanding, if the Conversion Factor for the applicable class of
Preferred Stock, as set forth in this Section B(5)(d)(i) otherwise would be
reduced, no such reduction in the Conversion Factor for the applicable class of
Preferred Stock, as set forth in this Section B(5)(d)(i), shall occur.
(F) Notwithstanding the foregoing, if any holder of
shares of Preferred Stock is entitled to exercise the preemptive rights (the
"Preemptive Right") set forth in Section 3 of the Preemptive and Other Rights
Agreement dated April 22, 1998, (the "Preemptive Rights Agreement"), as the same
may be amended from time to time, which would, absent the provisions of this
subsection (F), result in a reduction of the Conversion Factor applicable to
shares of such holder's Preferred Stock pursuant to Section B(5)(d)(i) of this
Article, and if such holder (a "Non-Participating Holder") does not, by exercise
of such holder's Preemptive Right, acquire not less than such holder's
"Proportionate Percentage" (as defined in Section 3.1 of the Preemptive Rights
Agreement) of the Issuance, then all of such holder's shares of Class A
Preferred Stock, Class B Preferred Stock and Class C Preferred Stock shall
automatically, and without further action on the part of such holder, be
converted effective upon, subject to and concurrently with consummation of the
Issuance (the "Issuance Date") as follows: each share of Class A Preferred Stock
held by such Non-Participating Holder shall be converted into one share of a
newly created series of preferred stock (having such number of shares as the
Board of Directors may by resolution fix) which such class shall be identical in
all respects to the Class A Preferred Stock, except that the Conversion Factor
of such class shall be fixed immediately prior to the Issuance Date and shall be
subject to no further adjustments pursuant to Section B(5)(d)(i) of this
Article; each share of Class B Preferred Stock held by such Non-Participating
Holder shall be converted into one share of a newly created class of preferred
stock (having such number of shares as the Board of Directors may by resolution
fix) which such class shall be identical in all respects to the Class B
Preferred Stock, except that the Conversion Factor of such class shall be fixed
immediately prior to the Issuance Date and shall be subject to no further
adjustments pursuant to Section B(5)(d)(i) of this Article; and each share of
Class C Preferred Stock held by such Non-Participating Holder shall be converted
into one share of a newly created class of preferred stock (having such number
of shares as the Board of Directors may by resolution fix) which such class
shall be identical in all respects to the Class C Preferred Stock, except that
the Conversion Factor of such class shall be fixed immediately prior to the
Issuance Date and shall be subject to no further adjustments pursuant to Section
B(5)(d)(i) of this Article. The Board of Directors of the Corporation shall take
all necessary actions to designate each
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<PAGE>
such new class. Upon such conversion, the shares of Class A Preferred Stock,
Class B Preferred Stock and Class C Preferred Stock so converted shall be
canceled and not subject to reissuance, but instead shall be redesignated by the
Board of Directors of the Corporation in accordance with the terms of this
Section B(5)(d)(i)(F).
(ii) Each adjustment in a Conversion Factor shall be
calculated to the nearest tenth of a cent.
(iii) As used in this Section B(5)(d), the term
"Outstanding Shares" shall be deemed to include the number of issued and
outstanding shares of Common Stock, plus the number of shares of Common Stock
issuable upon the conversion of the issued and outstanding shares of Preferred
Stock, but shall not include the new shares of Common Stock then being issued by
the Corporation.
(iv) In the event that the Corporation shall, at any
time after June 2, 1998, issue any shares of Common Stock (A) by stock dividend
or any other distribution upon any stock of the Corporation payable in shares of
Common Stock or in shares of Preferred Stock, or (B) by subdivision of its
shares of outstanding Common Stock, by reclassification or otherwise, the
Conversion Factor then in effect shall be reduced proportionately, and, in like
manner, in the event of any combination of shares of Common Stock, by
reclassification or otherwise, the Conversion Factor then in effect shall be
proportionately increased; provided, however, that the Conversion Factor shall
not be adjusted as a result of the Reverse Split.
(v) If any capital reorganization or reclassification
of the Common Stock of the Corporation, or consolidation or merger of the
Corporation with or into another corporation, or the sale or conveyance of all
or substantially all of its assets to another corporation shall be effected,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provision shall be made whereby the holders
of the Preferred Stock shall thereafter have the right to receive, in lieu of
the shares of Common Stock of the Corporation immediately theretofore receivable
with respect to such shares of Preferred Stock upon the exercise of their
conversion rights, such shares of stock, securities or assets as would have been
issued or payable with respect to or in exchange for the number of outstanding
shares of such Common Stock immediately theretofore receivable with respect to
such shares of Preferred Stock upon the exercise of such rights had such
reorganization, reclassification, consolidation, merger or sale not taken place.
In any such case, appropriate provision shall be made with respect to the rights
and interests of the holders of the Preferred Stock to the end that such
conversion rights (including, without limitation, provisions for adjustment of
the applicable Conversion Factor) shall thereafter be applicable, as nearly as
may be practicable in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise thereof. The Corporation shall not
effect any such consolidation, merger or sale, unless it provides the holders of
the Preferred Stock at least 30 days advance notice thereof, and prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Corporation) resulting from such consolidation or merger or the
corporation purchasing such assets, shall assume by written instrument, executed
and mailed or delivered to the holders of the Preferred Stock, the obligation to
deliver to such holders the shares of
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<PAGE>
stock, securities or assets as, in accordance with the foregoing provisions,
such holders may be entitled to receive upon conversion of the shares of
Preferred Stock held by such holder.
(vi) If any event occurs as to which the other
provisions of this Section B(5)(d) are not strictly applicable, or if strictly
applicable would not fairly protect the conversion rights of the Preferred Stock
in accordance with the intent and principles of such provisions, then the Board
of Directors shall make an adjustment in the application of such provisions, in
accordance with such intent and principles, so as to protect such conversion
rights as aforesaid, but in no event shall any such adjustment have the effect
of increasing the applicable Conversion Factor as otherwise determined pursuant
to this Section B(5)(d).
(e) Stock Transfer Taxes. The issuance of stock
--------------------
certificates upon the conversion of the Preferred Stock shall be made without
charge to the converting holder for any tax in respect of such issuance. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of shares in
any name other than that of the holder of such shares of Preferred Stock
converted, and the Corporation shall not be required to issue or deliver any
such stock certificate unless and until the person or persons requesting the
issuance thereof shall have paid to the Corporation the amount of such tax or
shall have established to the satisfaction of the Corporation that such tax has
been paid.
(f) Certificate as to Adjustments. Upon the occurrence of
-----------------------------
each adjustment or readjustment of the Conversion Factor, the Corporation, at
its expense, promptly shall compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each holder of
Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of any holder of
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Factor at the time in effect for the Preferred Stock, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of such Preferred Stock owned
by such holder.
(g) Notices of Record Date. In the event of any fixing by
----------------------
the Corporation of a record date for the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any shares of
Common Stock or other securities, or any right to subscribe for, purchase or
otherwise acquire, or any option for the purchase of, any shares of stock of any
class or any other securities or property, or to receive any other right, the
Corporation shall mail to each holder of Preferred Stock at least 30 days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
(h) Notices. Any notice required by the provisions of this
-------
Section B(5) to be given to the holders of shares of Preferred Stock shall be
deemed given if
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<PAGE>
deposited in the United States mail, first class postage prepaid, and addressed
to each holder of record at such holder's address appearing on the books of the
Corporation.
(6) Mandatory Conversion.
--------------------
(a) The Corporation shall cause the conversion ("Mandatory
Conversion") of all of the shares of Preferred Stock into fully paid and
nonassessable shares of Common Stock, at the conversion rate then in effect,
upon the occurrence of the Corporation's underwritten public offering of its
Common Stock pursuant to a registration statement (other than a registration
statement relating to an offer and sale of securities to employees of, or other
persons providing services to, the Corporation pursuant to an employee or
similar benefit plan, registered on Form S-8 or a comparable or successor form)
filed under the Securities Act of 1933, as amended, which yields to the
Corporation not less than $15,000,000 before deducting any underwriters' or
brokers' discounts, fees or commissions (a "Qualifying Public Offering").
(b) The Mandatory Conversion shall occur upon the closing
of a Qualifying Public Offering.
(c) Upon Mandatory Conversion, all rights of the holders of
shares of the Preferred Stock as such holders shall cease except their right to
receive payment of any dividends declared and unpaid to such time; such shares
shall no longer be deemed to be outstanding; and the holders thereof shall on
and after such date be conclusively deemed for all purposes to be holders of the
shares of Common Stock into which their shares of Preferred Stock were
converted.
(d) The Corporation shall promptly give all holders of
record of shares of Preferred Stock written notice of the date that a Qualifying
Public Offering will occur or is anticipated to occur. Such notice shall also
specify the place designated for exchanging the shares of Preferred Stock for
shares of Common Stock. Such notice shall be sent by first class mail, postage
prepaid, to each holder of record of shares of Preferred Stock at such holder's
address as shown in the records of the Corporation. Each holder of shares of
Preferred Stock shall surrender its certificate or certificates for all such
shares to the Corporation or the transfer agent at the place designated in such
notice and shall, upon surrender, receive certificates for the number of shares
of Common Stock to which such holder is entitled.
(e) For the purpose of calculating the conversion ratio of
Preferred Stock into Common Stock in the event of a Mandatory Conversion, such
calculation shall be made in accordance with Section B(5) of this Article.
NINTH: No stockholder will be permitted to cumulate votes at any
election of directors.
TENTH: Effective upon the closing of a Qualifying Public Offering,
no action that is required or permitted to be taken by the stockholders of the
corporation at any annual or special
-14-
<PAGE>
meeting of stockholders may be effected by written consent of stockholders in
lieu of a meeting of stockholders.
ELEVENTH: Meetings of stockholders may be held within or without the State
of Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the laws of the State of Delaware)
outside of the State of Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the Bylaws of the Corporation.
-15-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Restated Certificate
of Incorporation on behalf of the Corporation and have attested such execution
and do verify and affirm, under penalty of perjury, that this Restated
Certificate of Incorporation is the act and deed of the Corporation and that the
facts stated herein are true as of this __th day of June, 1998.
GENVEC, INC.
By:________________________________
Paul H. Fischer
President
ATTEST:
By:____________________________
Thomas E. Smart
Secretary
-16-
<PAGE>
EXHIBIT 4.1
COMMON STOCK COMMON STOCK
NUMBER SHARES
GVN
[LOGO OF GENVEC APPEARS HERE]
THIS CERTIFICATE IS TRANSFERABLE IN SEE REVERSE FOR CERTAIN
NEW YORK, NY OR RIDGEFIELD PARK, NJ DEFINITIONS AND A
STATEMENT AS TO THE
RIGHTS, PREFERENCES,
PRIVILEGES AND
RESTRICTIONS ON SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CUSIP 37246C 10 9
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, $0.001 PAR VALUE PER
SHARE, OF
GENVEC, INC.
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate is not valid until countersigned and registered by
the Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated:
/s/ TOM SMART /s/ PAUL H. FISCHER
CORPORATE SECRETARY AND TREASURER PRESIDENT AND CHIEF EXECUTIVE OFFICER
[GENVEC CORPORATE SEAL APPEARS HERE]
GENVEC, INC.
CORPORATE
SEAL
1992
DELAWARE
COUNTERSIGNED AND REGISTERED:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
TRANSFER AGENT AND REGISTRAR
BY
AUTHORIZED SIGNATURE
<PAGE>
A statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights as established, from time to time, by the Certificate of
Incorporation of the Corporation and by any certificate of determination,
the number of shares constituting each class and series, and the designations
thereof, may be obtained by the holder hereof upon request and without charge
at the principal office of the Corporation.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT-.........Custodian.........
TEN ENT - as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to
JP TEN - as joint tenants with Minors Act..................
right of survivorship (State)
and not as tenants in UNIF TRF MIN ACT- .....Custodian (until age..)
common (Cust)
......under Uniform Transfer
(Minor)
to Minors Act...............
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, _____________________________ hereby sell(s), assign(s)
and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_____________________________
_____________________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated ____________________________
X __________________________________
X __________________________________
NOTICE: THE SIGNATURE(S) TO THIS
ASSIGNMENT MUST CORRESPOND WITH
THE NAME(S) AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY
PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE
WHATEVER.
Signature(s) Guaranteed
By_________________________________
THE SIGNATURE(S) MUST BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS
WITH MEMBERSHIP IN AN APPROVED
SIGNATURE MEDALLION GUARANTEE PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 10.5
RESEARCH, DEVELOPMENT AND
COLLABORATION AGREEMENT
WARNER-LAMBERT COMPANY
AND
GENVEC, INC.
JULY 21, 1997
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. DEFINITIONS.............................................................. 2
1.1 "Affiliate"......................................................... 2
1.2 "Agency"............................................................ 2
1.3 "Background Technology"............................................. 2
1.4 "Bulk Product"...................................................... 2
1.5 "Collaboration Product"............................................. 2
1.6 "Collaboration Technology".......................................... 2
1.7 "Control"........................................................... 2
1.8 "Co-Promotion Country".............................................. 2
1.9 "Core U.S. Dossier"................................................. 3
1.10 [*]................................................................. 3
1.11 [*]................................................................. 3
1.12 [*]................................................................. 3
1.13 "Development"....................................................... 3
1.14 "Development Candidate"............................................. 3
1.15 [*]................................................................. 3
1.16 "Development Plan".................................................. 4
1.17 "Drug Development Committee"........................................ 4
1.18 "Effective Date".................................................... 4
1.19 "Executive Committee"............................................... 4
1.20 "Field"............................................................. 4
1.21 "Finished Product".................................................. 4
1.22 "GAAP".............................................................. 4
1.23 "Gene Therapy"...................................................... 4
1.24 "IND"............................................................... 4
1.25 "Invention(s)"...................................................... 4
1.26 "Know-How".......................................................... 4
1.27 [*]................................................................. 4
1.28 "Party"............................................................. 5
1.29 "Patent Rights"..................................................... 5
1.30 "Phase I", "Phase II", and "Phase III".............................. 5
1.31 "Pivotal"........................................................... 6
1.32 "Pre-Clinical Activities"........................................... 6
1.33 "Pre-Clinical Development Criteria"................................. 6
1.34 [*]................................................................. 6
1.35 "Product License Application" or "PLA".............................. 6
1.36 "Project Team Leader"............................................... 6
1.37 "Regulatory Approval"............................................... 6
1.38 "Research Management Committee"..................................... 6
1.39 "Research Plan"..................................................... 6
</TABLE>
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<S> <C>
1.40 "Research Program"............................................... 6
1.41 "Scientific FTE"................................................. 6
1.42 "Scios Agreement"................................................ 6
1.43 "Second Source".................................................. 7
1.44 "Stock Purchase Agreement"....................................... 7
1.45 "Sublicensee".................................................... 7
1.46 "Term of the Agreement".......................................... 7
1.47 "Term of the Research Program"................................... 7
1.48 "Territory"...................................................... 7
1.49 "Third Party".................................................... 7
1.50 "VEGF"........................................................... 7
1.51 "Valid Claim".................................................... 7
2. RESEARCH PROGRAM....................................................... 7
2.1 Collaborative Research............................................ 7
2.2 Research Program Expenses......................................... 8
2.3 Records; Reports.................................................. 10
2.4 Term and Termination of Research Program.......................... 11
2.5 Field Restriction................................................. 12
2.6 Gene Therapy Products Outside the Field........................... 14
3. COMMITTEES............................................................. 14
3.1 Executive Committee............................................... 14
3.2 Research Management Committee..................................... 15
3.3 Drug Development Committee........................................ 16
3.4 Meetings.......................................................... 17
3.5 Dispute Resolution................................................ 17
4. DEVELOPMENT............................................................ 17
4.1 Selection of Development Candidates and Collaboration Products.... 17
4.2 Collaborative Development......................................... 18
4.3 Pre-Clinical Activities........................................... 18
4.4 Development Plan.................................................. 18
4.5 [*]............................................................... 19
4.6 [*]............................................................... 19
4.7 [*]............................................................... 19
4.8 Suspension or Termination of Collaborative Development............ 20
5. LICENSE GRANTS......................................................... 21
5.1 Grant by GenVec................................................... 21
</TABLE>
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<S> <C>
5.2 Grant by Warner...................................................... 22
5.3 Licenses to Affiliates............................................... 22
5.4 Sublicenses.......................................................... 22
5.5 Cross-Licenses....................................................... 22
5.6 Retained Rights...................................................... 22
5.7 Covenant Not to Sue.................................................. 23
5.8 No Unauthorized Use.................................................. 23
5.9 No Implied Licenses.................................................. 23
6. CONSIDERATION 23
[*]
6.2 Purchase of GenVec Stock............................................. 23
6.3 Research Program and Development Funding............................. 23
6.4 Milestone Payments................................................... 24
6.5 Royalties............................................................ 25
6.6 Third Party Royalties................................................ 26
6.7 Withholding Taxes.................................................... 27
6.8 Guaranty............................................................. 27
7. BOOKS AND RECORDS......................................................... 27
7.1 [*].................................................................. 27
7.2 Payment Method; Late Payments........................................ 28
7.3 Currency Conversion.................................................. 28
7.4 Restrictions on Payments............................................. 28
7.5 Records; Inspection.................................................. 28
8. COMMERCIALIZATION IN THE TERRITORY........................................ 29
8.1 Collaboration Product Development.................................... 29
8.2 Due Diligence........................................................ 29
8.3 Commercialization Outside the Territory and Co-Promotion Countries... 31
9. CO-PROMOTION OPTION....................................................... 31
</TABLE>
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<S> <C>
10. TRADEMARKS..................................................................... 32
10.1 Warner Trademarks........................................................ 32
10.2 GenVec Trademarks........................................................ 32
10.3 Use of Trademarks........................................................ 32
11. SUPPLY OF COLLABORATION PRODUCTS............................................... 33
11.1 Manufacture of Bulk Product by GenVec.................................... 33
11.2 Manufacture of Finished Product by Warner................................ 33
11.3 Warner's Right to Identify and Qualify Second Source for Bulk Product.... 34
11.4 Use of Second Source for Bulk Product.................................... 34
11.5 Terms of Manufacture and Supply.......................................... 34
11.6 [*]...................................................................... 35
12. REGULATORY AFFAIRS............................................................. 35
12.1 Side Effects............................................................. 35
12.2 Regulatory and Other Inquiries........................................... 36
12.3 [*]...................................................................... 36
12.4 Access to Regulatory Filings............................................. 36
12.5 [*]...................................................................... 36
13. DEVICE DELIVERY................................................................ 37
13.1 Device Plan.............................................................. 37
13.2 Device Agreement......................................................... 37
14. INTELLECTUAL PROPERTY.......................................................... 37
14.1 Ownership of Technology.................................................. 37
14.2 Solely-Owned Patent Rights............................................... 38
14.3 Jointly Owned Inventions................................................. 38
14.4 Enforcement.............................................................. 39
14.5 [*]...................................................................... 40
14.6 Independent Inventions................................................... 41
</TABLE>
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<S> <C>
15. OTHER ACTIVITIES................................................. 41
15.1 Product Configurations..................................... 41
15.2 [*]........................................................ 41
15.3 [*]........................................................ 42
16. REPRESENTATIONS AND WARRANTIES................................... 42
16.1 Legal Authority............................................ 42
16.2 No Conflicts............................................... 42
16.3 Others Bound............................................... 42
16.4 Disclaimer................................................. 42
16.5 Disclaimer of Warranties................................... 42
17. CONFIDENTIALITY.................................................. 43
17.1 Confidential Information................................... 43
17.2 Permitted Disclosures...................................... 43
17.3 Publicity.................................................. 44
17.4 Publication................................................ 44
18. INDEMNIFICATION.................................................. 45
18.1 Warner..................................................... 45
18.2 GenVec..................................................... 45
18.3 Procedure.................................................. 45
18.4 Insurance.................................................. 46
19. TERM AND TERMINATION............................................. 46
19.1 Term....................................................... 46
19.2 Termination for Cause...................................... 46
19.3 Effect of Bankruptcy....................................... 46
19.4 Termination Relating to Competing Products................. 46
19.5 Termination of Research Program............................ 47
19.6 Effect of Termination...................................... 47
19.7 Survival................................................... 48
</TABLE>
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
<TABLE>
<S> <C>
20. DISPUTE RESOLUTION.................................................... 48
20.1 Mediation...................................................... 48
20.2 Venue.......................................................... 48
21. MISCELLANEOUS......................................................... 49
21.1 Governing Law.................................................. 49
21.2 Waiver......................................................... 49
21.3 [*]............................................................ 49
21.4 Notices........................................................ 49
21.5 Performance Warranty........................................... 50
21.6 Force Majeure.................................................. 50
21.7 Independent Contractors........................................ 50
21.8 Advice of Counsel.............................................. 50
21.9 Severability................................................... 50
21.10 Patent Marking................................................. 50
21.11 Further Assurances............................................. 51
21.12 Compliance with Laws........................................... 51
21.13 No Implied Licenses or Warranties.............................. 51
21.14 Entire Agreement............................................... 51
21.15 Headings....................................................... 51
21.16 Counterparts................................................... 51
</TABLE>
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
RESEARCH, DEVELOPMENT AND COLLABORATION AGREEMENT
This RESEARCH, DEVELOPMENT AND COLLABORATION AGREEMENT (the "Agreement"),
effective as of July 21, 1997, is made by and between Warner-Lambert Company, a
Delaware corporation, with a principal place of business at 201 Tabor Road,
Morris Plains, New Jersey 07950 ("Warner"), and GenVec, Inc., a Delaware
corporation, with a principal place of business at 12111 Parklawn Drive,
Rockville, Maryland 20852 ("GenVec").
BACKGROUND
A. GenVec has expertise in the field of gene therapy and is developing
novel, proprietary materials and methods for use in the Field.
B. Warner is in the business of and has expertise in developing,
manufacturing and commercializing pharmaceuticals.
C. Warner and GenVec wish to enter into a collaborative effort to share
such expertise, to conduct research and development with respect to potential
Collaboration Products for use in the Field and, if successful, Warner shall
market certain Collaboration Products for use in the Field in the Territory, and
the Parties may co-promote certain of such Collaboration Products for use in the
Field in the Co-Promotion Countries (the "Collaboration").
D. Warner and GenVec wish to establish a framework for such Collaboration
consisting of (i) the Research Program, (ii) the Pre-Clinical Activities, (iii)
the Development and (iv) the commercialization, and possible co-promotion of
Collaboration Products, each as defined and described further below.
E. Of even date herewith, GenVec and Warner have entered into a Stock
Purchase Agreement, pursuant to which GenVec may offer to Warner, and in such
event Warner shall purchase shares of GenVec preferred and/or common stock.
F. Warner will enter into a Guaranty pursuant to which Warner will
guarantee a line of credit on behalf of GenVec, and in connection therewith
GenVec and Warner will enter into a Security Agreement and any other agreements
as provided for therein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, contained herein, GenVec and Warner agree as follows:
1. DEFINITIONS
<PAGE>
The following capitalized terms shall have the meanings indicated for
purposes of this Agreement:
1.1 "Affiliate" shall mean any corporation, association or other entity
---------
which directly or indirectly controls, is controlled by or is under common
control with the party in question. As used in this definition of "Affiliate,"
the term "control" shall mean direct or indirect beneficial ownership of more
than fifty percent (50%) of the voting or income interest in such corporation or
other business entity.
1.2 "Agency" shall mean the Food and Drug Administration of the United
------
States or any successor entity (the "FDA"), and agencies of other governments of
other countries having similar jurisdiction over the development, manufacturing,
and marketing of pharmaceuticals.
1.3 "Background Technology" shall mean all technology that a Party owns or
---------------------
Controls on the Effective Date and has the right to contribute to the
Collaboration which is necessary for the design, development, testing, use,
manufacture or sale of Product Configurations, Development Candidates and
Collaboration Products for use in the Field, including all such United States
and foreign patents and patent applications (including, without limitation, all
reissues, extensions, substitutions, confirmations, registrations,
revalidations, additions, continuations, continuations-in-part, and divisions
thereof) and other proprietary information, data and know-how existing on the
Effective Date.
1.4 "Bulk Product" shall mean the purified active ingredient of any
------------
Collaboration Product, in bulk form.
1.5 "Collaboration Product" shall mean a Product Configuration in
---------------------
Development pursuant to this Agreement through and including commercial sales.
1.6 "Collaboration Technology" shall mean all Know-How and Patent Rights
------------------------
that a Party owns or Controls, which is conceived, reduced to practice or
otherwise developed by GenVec (or its agents) or Warner (or its agents) or
jointly by GenVec and Warner (or their respective agents) during the Term of the
Research Program and in connection with the Collaboration, including, without
limitation, improvements on the Background Technology.
1.7 "Control" shall mean possession of the ability to grant the licenses
-------
or sublicenses as provided for herein without violating the terms of any
agreement or other arrangement with any Third Party.
1.8 "Co-Promotion Country" shall mean each of the United States of America
--------------------
(including its fifty (50) states, and its territories and possessions, including
the District of Columbia, the Commonwealth of Puerto Rico) and Canada.
1.9 "Core U.S. Dossier" shall have the meaning set forth in Section 4.4.
-----------------
-2-
<PAGE>
[*]
1.13 "Development" shall mean the development of any Product Configuration
-----------
from and after the filing of an IND, through and including product registration
as described in Article 4.
1.14 "Development Candidate" shall mean a Product Configuration which meets
---------------------
the Pre-Clinical Development Criteria, and which the Executive Committee agrees
should undergo further development pursuant to Section 4.1.2.
[*]
1.16 "Development Plan" shall have the meaning set forth in Section 4.4.
----------------
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
-3-
<PAGE>
1.17 "Drug Development Committee" shall have the meaning set forth in
--------------------------
Section 3.3.
1.18 "Effective Date" shall mean the date of this Agreement first written
--------------
above.
1.19 "Executive Committee" shall have the meaning set forth in Section 3.1.
-------------------
1.20 "Field" shall mean the research, drug discovery and development
-----
collaboration aimed at therapeutic agents useful for Gene Therapy-based
induction of angiogenesis and for the first two years of the Research Program
shall include all clinical indications; provided, thereafter the Field shall be
limited to the treatment of coronary artery disease ("CAD") and/or peripheral
vascular disease ("PVD") and/or those other specific clinical indications
selected by Warner pursuant to Section 2.5 below.
1.21 "Finished Product" shall mean the finished pharmaceutical form, in any
----------------
formulation, of a Collaboration Product packaged for sale to a Third Party.
1.22 "GAAP" shall mean generally accepted accounting principles applied in
----
the United States.
1.23 "Gene Therapy" shall mean the introduction of a gene into a person for
------------
therapeutic purposes by (i) in vivo introduction for incorporation into cells of
-- ----
such person, or (ii) by ex vivo introduction into cells for transfer into a
-- ----
person.
1.24 "IND" shall mean an Investigational New Drug application, as defined
---
in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated
thereunder, or any corresponding foreign application, registration or
certification.
1.25 "Invention(s)" shall have the meaning set forth in Section 14.2.1.
------------
1.26 "Know-How" shall mean all ideas, inventions, data, instructions,
--------
processes, formulas, expert opinions and information, including, without
limitation, biological, chemical, pharmacological, toxicological,
pharmaceutical, physical and analytical, clinical, safety, manufacturing and
quality control data and information, in each case, which are developed as a
result of the Collaboration and are necessary or useful for the development,
testing, use, manufacture or sale of Collaboration Products. Know-How does not
include any inventions included in the Patent Rights.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
-4-
<PAGE>
[*]
1.28 "Party" shall mean Warner or GenVec, and the "Parties" shall mean
----- -------
Warner and GenVec.
1.29 "Patent Rights" shall mean all United States and foreign patents
-------------
(including all reissues, extensions, substitutions, confirmations, re-
registrations, re-examinations, revalidations and patents of addition) and
patent applications (including, without limitation, all continuations,
continuations-in-part and divisions thereof) in each case, claiming an invention
which is necessary or useful for the design, development, testing, use,
manufacture or sale of Collaboration Products.
1.30 "Phase I", "Phase II", and "Phase III" shall mean Phase I (or Phase
------- -------- ---------
I/II), Phase II, and Phase III (or Pivotal) clinical trials, respectively, in
each case as prescribed by the applicable Agency's regulations.
1.31 "Pivotal" shall mean a clinical trial that is designed to provide data
-------
establishing the safety and efficacy of a Collaboration Product in support of
obtaining Regulatory Approval from an Agency.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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<PAGE>
1.32 "Pre-Clinical Activities" shall mean all activities (including, but
-----------------------
not limited to, development/scale-up, assay development, toxicology,
pharmacokinetics, metabolism and safety pharmacology), undertaken to develop a
Product Configuration (or a corresponding Development Candidate) which are
determined by the Research Management Committee to be necessary or desirable to
file an IND on such Product Configuration (or a corresponding Development
Candidate), including the preparation and filing of an IND.
1.33 "Pre-Clinical Development Criteria" shall have the meaning set forth
---------------------------------
in Section 4.1.1.
[*]
1.35 "Product License Application" or "PLA" shall mean a Product License
--------------------------- ---
Application, as defined in the U.S. Food, Drug and Cosmetic Act and the
regulations promulgated thereunder, and any corresponding foreign application,
registration or certification.
1.36 "Project Team Leader" shall have the meaning set forth in Section
-------------------
3.3.4.
1.37 "Regulatory Approval" shall mean all approvals (including pricing and
-------------------
reimbursement approvals), licenses, registrations and authorizations of all
Agencies necessary for the manufacture, distribution, use or sale of a
Collaboration Product in the applicable country.
1.38 "Research Management Committee" shall have the meaning set forth in
-----------------------------
Section 3.2.
1.39 "Research Plan" shall have the meaning set forth in Section 2.1.1.
-------------
1.40 "Research Program" shall mean that program of research performed by
----------------
the Parties pursuant to Section 2.1.
1.41 "Scientific FTE" shall mean a full time scientist (or in the case of
--------------
less than a full-time dedicated scientist, a full-time, equivalent scientist
year), dedicated to research under the Research Program or in connection with
the Development consisting of no less than 1800 person-hours per year.
1.42 "Scios Agreement" shall mean that certain License Agreement entered by
---------------
GenVec and Scios, Inc. effective May 31, 1996.
1.43 "Second Source" shall have the meaning set forth in Section 11.3.
-------------
1.44 "Stock Purchase Agreement" shall mean that certain Stock Purchase
------------------------
Agreement entered by Warner and GenVec of even date herewith.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
-6-
<PAGE>
1.45 "Sublicensee" shall mean a Third Party to whom Warner has granted a
-----------
license or sublicense under the Background Technology or Collaboration
Technology to make, have made, import, use, sell, offer for sale, or otherwise
exploit a Collaboration Product in the Territory. As used in this Agreement,
"Sublicensee" shall also include a Third Party to whom Warner has granted the
right to distribute the Collaboration Product in the Territory, provided that
such Third Party has the responsibility for marketing and/or promotion of the
Collaboration Product within the territory for which such distribution rights
are granted.
1.46 "Term of the Agreement" shall mean the period from the Effective Date
---------------------
until, with respect to each Collaboration Product, the expiration of the last
royalty obligation owed by Warner to GenVec with respect to such Collaboration
Product, or until this Agreement is otherwise terminated earlier pursuant to its
terms.
1.47 "Term of the Research Program" shall have the meaning set forth in
----------------------------
Section 2.4.1.
1.48 "Territory" shall mean the entire world, excluding the countries
---------
listed on Exhibit A hereto, provided, if GenVec exercises its option to co-
promote a specific Collaboration Product for a particular indication in a Co-
Promotion Country, such country shall cease to be included in the Territory with
respect to such Collaboration Product for such indication for all purposes of
this Agreement.
1.49 "Third Party" shall mean any party other than Warner or GenVec or an
-----------
Affiliate of either of them.
[*]
1.51 "Valid Claim" means a claim of an issued and unexpired patent included
-----------
within the Patent Rights which has not been held unenforceable or invalid by a
court or other governmental agency of competent jurisdiction, and which has not
been disclaimed or admitted to be invalid or unenforceable through reissue or
otherwise.
2. RESEARCH PROGRAM
2.1 Collaborative Research. Subject to the terms and conditions set forth
----------------------
herein, Warner and GenVec will diligently conduct mutually agreed collaborative
research in the Field pursuant to a Research Plan with the primary objective of
developing Collaboration Products (the "Research Program"). The Research
Program shall have the goals of (i) developing at least one Collaboration
Product for the treatment of each of CAD and PVD, and (ii) identifying other
clinical indications in the Field for which Product Configurations may be useful
as therapeutic agents. Warner and GenVec shall each use reasonable efforts to
conduct the Research Program in a professional manner in accordance with the
applicable Research Plan within the time schedules contemplated therein. The
activities conducted in connection with the Research Program will be overseen
and administered by the Research Management Committee pursuant to Section 2.1.1
below.
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2.1.1 Research Plan. At least annually, the Research Management
-------------
Committee will prepare and agree upon a written plan (the "Research Plan") that
will (i) include a general overview and timetable for each Party's research
activities and appropriate resources and budgets for such research during the
next year, (ii) set specific objectives for such year, which objectives will be
updated or amended, as appropriate, by the Research Management Committee as
research progresses, and (iii) prepare a preliminary and non-binding plan for
research activities to be conducted by the Parties in the subsequent year. A
preliminary Research Plan has been agreed by the Parties as of the Effective
Date and a formal Research Plan will be agreed by the Research Management
Committee within sixty (60) days of the Effective Date. The Research Management
Committee shall review the Research Plan on an ongoing basis but in no event
less than quarterly and may make changes to the Research Plan then in effect.
2.1.2 Resources. Each Party agrees to commit the personnel,
---------
facilities, expertise and other resources necessary to perform its obligations
under the Research Plan; provided, however, that neither Party warrants that the
Research Program shall achieve any of the research objectives contemplated by
them.
[*]
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[*]
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[*]
2.2.4 Research Program Subcontracts. With the prior approval of the
-----------------------------
Executive Committee, GenVec or Warner may enter into or modify existing
agreements with Third Parties for the performance of activities in furtherance
of the Research Program for which Warner will be responsible for paying in
connection with the Research Program. Warner shall be responsible for directly
paying to the Third Party all compensation required to be paid pursuant to such
Agreement and/or for reimbursing GenVec for all expenses incurred by GenVec in
connection with such agreements, including, without limitation, the out-of-
pocket costs of negotiating and preparing such agreements. It is understood and
agreed that Warner shall have the principal responsibility for negotiating such
agreements, unless otherwise agreed by the Parties. The Party with principal
responsibility for negotiating such agreements shall keep the other Party fully
informed with respect to such negotiations, and such other Party shall have the
right to review and comment on such agreements prior to execution, provided such
review shall be conducted at such other Party's expense. Notwithstanding the
above, it is understood and agreed that the prior approval of the Executive
Committee shall not be required pursuant to this Section 2.2.4 with respect to
GenVec's support of research at [*] as it relates to the Research Program, or
any modification thereof (provided, it is understood that Warner's payment
obligations with respect to the Research Program shall not increase as a result
of any such modifications to GenVec's existing agreements with [*], and Warner
acknowledges that GenVec has notified Warner that GenVec is currently
negotiating modifications to its existing research support agreements with [*].
It is understood and agreed that GenVec shall be responsible for negotiating and
preparing such agreements and for paying all out-of-pocket costs incurred in
connection with such activities.
2.3 Records; Reports.
----------------
2.3 Records. The Parties shall maintain records that will properly
-------
reflect all work done and results achieved in the performance of the Research
Program (including all data in the form required under any applicable
governmental regulations and as directed by the Research Management Committee),
including laboratory records sufficient to establish the dates of first
conception and reduction to practice of any Inventions. Upon request, the
Parties shall provide each other access to such records relating to any Product
Configuration, Development Candidate and/or Collaboration Product during
ordinary business hours during the period the requesting Party retains rights
thereto pursuant to this Agreement.
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2.3.2 Reports. The Research Management Committee shall periodically
-------
and not less often than semiannually during the Term of the Research Program,
request and the Parties shall have the obligation to prepare and provide to the
Research Management Committee, written reports summarizing the progress of the
research performed by or sponsored by the Parties pursuant to the Research Plan
during the preceding half-year. In addition, the Parties will exchange at least
quarterly verbal or written reports presenting a meaningful summary of their
activities performed in connection with the Research Program. All Collaboration
Technology made by either Party will be promptly disclosed to the other, with
significant discoveries or advances being communicated as soon as practical
after such information is obtained or its significance is appreciated.
2.3.3 Research Program Expenditures. During the Term of the Research
-----------------------------
Program, GenVec shall provide Warner with a quarterly accounting report
regarding Research Program expenditures by GenVec in the preceding quarter.
GenVec shall keep records of all expenses incurred in connection with the
Research Program, and annually during the Research Program within sixty (60)
days following the end of each calendar year shall provide Warner with a report
describing GenVec's actual average Scientific FTE cost during the preceding
year, and the number of Scientific FTEs utilized in the Research Program during
the preceding year. During the term of the Research Program and for one year
thereafter, Warner shall have the right to audit such records no more than twice
per year during ordinary business hours, at mutually agreed times, to verify
GenVec's expenditures in connection with the Research Program
2.4 Term and Termination of Research Program.
----------------------------------------
2.4.1 Term of the Research Program. The term of the Research Program
----------------------------
shall commence on the Effective Date and, unless terminated earlier pursuant to
Section 2.4.2 or Article 19 or extended by mutual agreement of the Parties,
shall terminate on the fifth anniversary of the Effective Date; provided, if an
IND has been filed in the Territory with respect to a Collaboration Product for
treatment of each of CAD and PVD prior to the fifth anniversary of the Effective
Date, the Research Program may be terminated earlier with the written agreement
of the Parties (the "Term of the Research Program").
2.4.2 Termination of Research Program. After the third anniversary of
-------------------------------
the Effective Date, the Term of the Research Program may be terminated by Warner
upon six (6) months prior written notice, subject to the following conditions:
(a) Warner shall be obligated to continue to fund all Research
Program activities ongoing at the time of such written notice and make all
Research Program payments due to GenVec until the effective date of such
termination; provided, GenVec continues to perform under and such funds are used
to forward the Research Program; and
(b) Each Party shall retain such ownership interest in the
Collaboration Technology as it shall hold on the effective date of such
termination; and
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(c) Subject to the terms and conditions of this Agreement,
Warner shall retain its [*] prior to the date of Warner's notice of its intent
to terminate, but shall have no rights under this Agreement with regard to [*]
prior to the date of Warner's notice of its intent to terminate the Research
Program; and
[*]
2.5 Field Restriction.
-----------------
2.5.1 Initial Two Years. During the first two (2) years of the
-----------------
Research Program the Parties shall conduct research pursuant to the Research
Plan with the goal of evaluating whether any Product Configuration may be useful
for the treatment of any clinical indication(s) selected by the Executive
Committee. It is understood and agreed that during the first two (2) years of
the Research Program at a minimum the Parties shall seek to develop
Collaboration Products for the treatment of coronary artery disease ("CAD") and
peripheral vascular disease ("PVD") in humans.
2.5.2 Selection of Indications. On or before the second anniversary
of the Effective Date, Warner shall notify GenVec of any specific indications
(other than CAD and PVD) which Warner wishes to retain in the Field. The first
indication so selected by Warner shall automatically be included in the Field
and Warner's obligation to provide funding for the Research Program and
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Development shall be increased as set forth in Section 6.3.2(b). Each additional
specific indication so selected by Warner shall automatically be included in the
Field and Warner's obligation to provide funding under Section 6.3 shall
increase by [*] per year per indication. Concurrently with its notice to GenVec
of any indication that Warner wishes to retain in the Field, Warner shall
provide to GenVec a proposed research plan for the conduct of research with
respect thereto through the identification of a Development Candidate for each
such indication in connection with the Research Program, and the Parties shall
negotiate in good faith regarding the specific activities to be conducted in the
Research Program with respect thereto. [*]
2.5.4 Collaboration Technology. In the event that any specific
------------------------
clinical indication(s) cease(s) to be within the Field as provided in Section
2.5.3 above, then, at GenVec's request, Warner shall grant to GenVec licenses as
set forth below for practice outside the Field:
(a) Warner will grant GenVec an exclusive (even as to Warner),
worldwide, fully-paid, perpetual license (with the right to sublicense) under
Warner's interest in any Collaboration Technology jointly owned by Warner and
GenVec necessary or useful to make, have made, import, use, offer for sale and
sell Collaboration Products, subject to Article 15, for indications other than
those which Warner retains rights hereunder, and products other than
Collaboration Products; and
(b) At GenVec's request, Warner will negotiate in good faith
the terms of an exclusive, worldwide license to GenVec (with the right to
sublicense) under Warner's interest in any Collaboration Technology owned solely
by Warner, to make, have made, use, import, offer for sale and sell Product
Configurations, subject to Article 15, which terms shall include the payment of
a royalty to Warner on net sales of such products up to [*] of such net sales
(such net sales to be calculated in accordance with Section 1.27 (with
appropriate contextual adjustments) and GAAP), and other customary and
reasonable terms to be agreed by the Parties.
(c) At GenVec's request, Warner will negotiate in good faith
the terms of [*] to GenVec (with the right to sublicense) under Warner's
interest
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in any Collaboration Technology owned solely by Warner, to make, have made, use,
import, offer for sale and sell products other than Product Configurations,
subject to Article 15, which terms shall include the payment of a royalty to
Warner on net sales (such net sales to be calculated in accordance with Section
1.27 (with appropriate contextual adjustments) and GAAP) of such products up to
[*] [*] of such net sales, and other customary and reasonable terms to be agreed
by the Parties.
2.6 Gene Therapy Products Outside the Field. In the period from the
---------------------------------------
[*] of the Effective Date until the [*] of the Effective Date, if GenVec wishes
to develop, itself or with a Third Party, [*] containing [*] before commencing
negotiations with any Third Party with respect to such a [*] for such
indication(s), GenVec shall notify Warner and identify the proposed
indication(s). Within [*] of receipt of such notice, Warner shall notify GenVec
if it wishes to negotiate the terms of a further research and development
collaboration between the Parties with respect to such indication(s). If Warner
provides GenVec notice of its interest during such period, the Parties shall
negotiate in good faith the terms of such a further collaboration agreement,
including without limitation, the activities to be conducted, the
responsibilities of the Parties and budgets therefore. Such further [*] with
respect to Collaboration Products for such indication(s) which shall be equal to
those set forth in Sections 6.4, 6.5 and 11.1, respectively, unless otherwise
agreed by the Parties. At the request of Warner, GenVec shall provide all
relevant data in its possession requested by the Research Management Committee,
to the extent GenVec's obligations to Third Parties permit. In the event that
the Parties have not entered into such a further agreement on or before [*] of
the date Warner provided notice of its interest to GenVec, or such later date as
may be agreed by the Parties, subject to Article 15, GenVec shall be free to
develop and commercialize such [*] for such indication(s), itself or with a
Third Party, and [*]
3. COMMITTEES
3.1 Executive Committee.
-------------------
3.1.1 Membership. Promptly after the Effective Date, Warner and
----------
GenVec will each appoint three (3) representatives to a management committee
(the "Executive Committee"). A Warner representative will serve as chairperson
of the Executive Committee for the initial twelve (12) months. Thereafter, the
chair of the Executive Committee will rotate between a GenVec member and a
Warner member every twelve (12) months. A Party may change any of its
appointments to the Executive Committee at any time with written notice to the
other Party.
3.1.2 Responsibilities. The Executive Committee will be charged with
----------------
overseeing and managing the entire Collaboration, including the Research
Management Committee and the Drug Development Committee. In addition, the role
of the Executive Committee will be, subject to
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the terms of this Agreement, to: (i) coordinate the Parties' activities
hereunder; (ii) resolve problems or settle disagreements that are unresolved by
the Research Management Committee and/or the Drug Development Committee, unless
otherwise indicated in this Agreement; (iii) approve allocations of tasks and
resources required to carry out the goals of the Collaboration; (iv) approve all
plans and annual budgets for the various projects and programs within the
Collaboration; (v) designate Product Configurations as Development Candidates,
and authorize the filing of INDs with respect thereto; (vi) encourage and
facilitate ongoing cooperation between the Parties; (vii) coordinate and monitor
the payments and reimbursements to be made by and between the Parties; and
(viii) perform such other functions as appropriate to further the purposes of
this Agreement, as determined by the Parties.
3.1.3 Meetings. The Executive Committee will meet every six (6)
--------
months and at such other mutually agreeable times as a Party may request,
alternating between the corporate offices of GenVec and Warner, and will
otherwise communicate regularly by telephone, facsimile and/or video conference.
Each Party recognizes the importance of the Executive Committee in the success
of the Collaboration and will use diligent efforts to cause all of its
representatives of such committee to attend all meetings of such committee.
3.1.4 Decision Making; Disputes. All decisions of the Executive
-------------------------
Committee will be made by unanimous approval. Any disputes or disagreements
within the Executive Committee shall be resolved pursuant to Section 3.5.
3.2 Research Management Committee. Promptly after the Effective Date,
-----------------------------
Warner and GenVec will each appoint three (3) representatives to a research
management committee (the "Research Management Committee").
3.2.1 Membership. A GenVec representative will serve as chairperson
----------
of the Research Management Committee for the initial twelve (12) months.
Thereafter, the chair will rotate between a Warner member and a GenVec member
every twelve (12) months. A Party may change any of its appointments to the
Research Management Committee at any time with written notice to the other
Party.
3.2.2 Responsibilities. The Research Management Committee will agree
----------------
on and may, at its discretion, and with the approval of the Executive Committee,
modify the general direction of the pre-clinical research to be performed under
this Agreement. The Research Management Committee will oversee, review, direct
and supervise all operational and scientific aspects of the Research Program.
The Research Management Committee shall be responsible for (i) establishing the
Research Plan; (ii) monitoring and reporting research progress and ensuring open
and frequent exchange between the Parties with respect to Research Program
activities; (iii) determining whether to acquire licenses from Third Parties
with respect to intellectual property necessary or useful for the conduct of the
Research Program; (iv) discussing patent matters relating to Collaboration
Products; and (v) proposing Development Candidates to the Executive Committee.
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3.2.3 Meetings. The Research Management Committee will meet on a
--------
quarterly basis alternating between the corporate offices of GenVec and Warner,
and will otherwise communicate regularly by telephone, facsimile and/or video
conference. Each Party recognizes the importance of the Research Management
Committee in the success of the Collaboration and will use diligent efforts to
cause all of its representatives of such committee to attend all meetings of
such committee.
3.2.4 Decision Making; Disputes. All decisions of the Research
-------------------------
Management Committee will be made by unanimous approval. Any disputes or
disagreements within the Research Management Committee shall be resolved
pursuant to Section 3.5.
3.3 Drug Development Committee. Within thirty (30) days of the date a
--------------------------
Development Candidate is designated by the Executive Committee, Warner shall
form a development committee for such Development Candidate (the "Drug
Development Committee").
3.3.1 Membership. The Drug Development Committee will include
----------
individuals with expertise and responsibilities in the areas of pre-clinical
development, clinical development or regulatory affairs and shall include two
(2) or more representatives from GenVec as appropriate. A Party may change any
of its appointments to the Drug Development Committee at any time upon giving
written notice to the other Party. [*]
3.3.2 Responsibilities. The Drug Development Committee will oversee
----------------
all aspects of the Pre-Clinical Activities and Development of each Product
Configuration through the filing of a PLA on a Collaboration Product arising
from such Product Configuration.
3.3.3 Meetings. The Drug Development Committee will meet on a monthly
--------
basis, and will otherwise communicate regularly by telephone, facsimile and
video conference. Each Party recognizes the importance of the Drug Development
Committee in the success of the Collaboration and will use diligent efforts to
cause all of its representatives of such committee to attend all meetings of
such committee.
3.3.4 Project Team Leader. With respect to each Development Candidate
-------------------
and corresponding Collaboration Product in Development, the Executive Committee
will, upon nomination from each Party, select one Drug Development Committee
representative who is a Warner Drug Development Vice President (or designated
equivalent) as a "Project Team Leader" with respect to such Development
Candidate or Collaboration Product. The Project Team Leader will be responsible
for overseeing the operational aspects of the Pre-Clinical Activities and the
Development of the applicable Development Candidate (or corresponding
Collaboration Product), as directed by the Drug Development Committee, and will
prepare and submit to the Drug Development Committee issues and problems to be
decided by the Drug Development Committee.
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3.3 Decision Making. Decisions of the Drug Development Committee
---------------
shall be made by majority approval after reasonable consultation with GenVec's
representatives on such committee.
3.4 Meetings. All committees created hereunder may meet by telephone or
--------
video conference or in person at such times as are agreeable to the members of
each such committee, but no less frequently than as specified above. Attendance
at meetings shall be at the respective expense of the participating Parties.
Each committee created hereunder shall assure that agendas and minutes are
prepared for each of its meetings and distributed to the Parties. All actions
taken and decisions made by each committee created hereunder shall be by
unanimous agreement and recorded in writing. If personal attendance is not
possible for valid reasons, voting by proxy is permissible.
3.5 Dispute Resolution. Any disputes or disagreements arising in the
------------------
Research Management Committee or Drug Development Committee will be referred to
the Executive Committee if the Research Management Committee or Drug Development
Committee, as the case may be, is unable to resolve such dispute or disagreement
within thirty days. In addition, any other disputes or disagreements between
the Parties arising hereunder will be referred to the Executive Committee. If
the Executive Committee is unable to resolve after thirty (30) days, a dispute
regarding any issue presented to it or arising in it, such dispute will be
referred to the Chief Executive Officer of GenVec and Warner's Chairman of the
Pharmaceutical Research Division for good faith resolution, for a period of
ninety (90) days. In the event such individuals are unable to resolve such
dispute, subject to Section 20.1, either Party may pursue any remedies it may
have at law or in equity.
4. DEVELOPMENT
4.1 Selection of Development Candidates and Collaboration Products.
--------------------------------------------------------------
4.1 Proposed Development Candidates. From time to time the Research
-------------------------------
Management Committee will propose, or either Party may propose, to the Executive
Committee that further Pre-Clinical Activities be undertaken for one or more
Product Configurations. Such proposal will be in writing, accompanied by a
nonbinding plan and budget forecast that outlines studies and activities to be
conducted through completion of Phase III for each Product Configuration
recommended. The Executive Committee will promptly determine whether such
Product Configuration meets criteria established by the Executive Committee for
determining, on an indication-by-indication basis, which Product Configurations
are suitable for consideration as Development Candidates, which criteria may be
amended from time to time upon the written consent of the Parties hereto (the
"Pre-Clinical Development Criteria").
4.1 Development Candidates. If the Executive Committee determines
----------------------
that any Product Configuration meets the Pre-Clinical Development Criteria, and
agrees to commence Pre-Clinical Activities with respect to such Product
Configuration, then such Product Configuration shall be deemed to be a
"Development Candidate". Product Configurations which are not designated as
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Development Candidates as set forth above may not become Collaboration Products;
provided, any Product Configuration which was not previously selected as a
Development Candidate may become a Development Candidate with the agreement of
the Executive Committee.
4.1 Collaboration Products. The Executive Committee shall determine
----------------------
which Development Candidates are suitable for clinical development as
Collaboration Products. Any Development Candidate for which an IND is filed
shall be deemed a "Collaboration Product."
4.1 Loss of Status. In the event that the Drug Development Committee
--------------
or the Executive Committee determines that Development should be discontinued
with respect to a particular Development Candidate or Collaboration Product,
such Product Configuration shall cease to be a Development Candidate or
Collaboration Product, as the case may be, for purposes of this Agreement.
4.2 Collaborative Development. The Parties will each diligently
-------------------------
collaborate in the development of Development Candidates for the purpose of
selecting Collaboration Products and use diligent efforts to develop and bring
such Collaboration Products to the market as soon as reasonably practicable. In
connection therewith, each Party shall use efforts not less than those efforts
it makes with respect to its own pharmaceutical products of comparable
commercial potential, stage of development and patent protection. The role of
each Party in the research and development process will be proposed by the
Project Team Leader and approved by the Drug Development Committee, with each
Party providing advisory and supporting services with respect to each phase of
the process in which such Party may be actively or primarily involved. No
clinical trials involving any Collaboration Product shall be commenced by or on
behalf of either Party without the prior approval of the Drug Development
Committee; provided, GenVec may conduct any such studies with or for an Asian
Partner. Each Party shall ensure that its Development tasks are carried out
adhering to ethical and safety standards customary in the industry.
4.3 Pre-Clinical Activities. The Parties, under the direction of the Drug
-----------------------
Development Committee, shall conduct the Pre-Clinical Activities with respect to
each Development Candidate. The payment of the costs of conducting such Pre-
Clinical Activities shall be as set forth in Section 4.5. During the period
that a particular Development Candidate (or the corresponding Collaboration
Product) is in Development hereunder, under no circumstances shall either Party
conduct studies of such Development Candidate (or the corresponding
Collaboration Product) except as approved and directed by the Drug Development
Committee; provided, GenVec may conduct any such studies with or for an Asian
Partner and support preclinical research at Cornell University Medical Center
without such approval, at its own expense.
4.4 Development Plan. The development of each Development Candidate (and
----------------
the corresponding Collaboration Product) shall be governed by a comprehensive
development plan (the "Development Plan"). The Drug Development Committee shall
prepare for consideration and approval by the Executive Committee a Development
Plan for such Development Candidate (and corresponding Collaboration Product).
The Development Plan shall outline the proposed program of development for such
Development Candidate (and corresponding Collaboration Product), including
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formulation, process development, clinical studies and regulatory plans and
other key elements of obtaining Regulatory Approval in each country in the
Territory, including specific activities and estimated timelines for such
activities. Without limiting the foregoing, the Development Plan shall, to the
extent practicable, set forth those pre-clinical and clinical studies necessary
or desirable for the filing of a PLA in the United States for any Development
Candidate (and corresponding Collaboration Product), as determined by the Drug
Development Committee (the "Core U.S. Dossier"). In addition, the Development
Plan shall provide a general overview of relevant plans and timelines for
development of such Collaboration Product within the Territory outside of the
United States. Each such Development Plan shall be updated semi-annually by the
Drug Development Committee and submitted to the Executive Committee for review
and approval not later than ninety (90) days prior to each January 1 and July 1
of each applicable year.
[*]
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[*]
4.8 Suspension or Termination of Collaborative Development.
------------------------------------------------------
4.8.1 Permissive Termination. Warner may elect upon six (6) months
----------------------
prior written notice to (i) terminate its participation in or not to participate
in the Pre-Clinical Activities or Development of any Development Candidate (or
corresponding Collaboration Product), or (ii) terminate such activities with
respect to all Development Candidates (and corresponding Collaboration Products)
for a particular clinical indication.
4.8.2 Suspension for Safety or Efficacy Concerns. Warner may suspend
------------------------------------------
the Development activities with respect to any Collaboration Product for
reasonable safety and/or efficacy concerns, and in such event shall promptly,
but in any event within [*] notify GenVec and the Executive Committee, providing
a detailed explanation of its concerns and the basis thereof. Any such
suspension shall not remain in effect for more than [*] without the approval of
the Executive Committee. In the event that Warner believes that such concerns
warrant termination of further Development with respect to such Collaboration
Product, it shall notify the Executive Committee, and in such event Warner may
immediately terminate any on-going clinical trial with respect to such
Collaboration Product and, at GenVec's request, cooperate with GenVec to ensure
a prompt transition of such Development activities to GenVec. Warner shall
further continue to be responsible for all costs associated with such
Development for a period of [*] from the date of Warner's notice to the
Executive Committee that it intends to terminate further Development with
respect thereto.
[*]
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[*]
(b) At GenVec's request, Warner will negotiate in good faith the
terms of an exclusive, worldwide license to GenVec (with the right to
sublicense) under Warner's interest in any Collaboration Technology owned solely
by Warner, to make, have made, use, import, offer for sale and sell Product
Configurations, subject to Article 15, which terms shall include the payment of
a royalty to Warner on net sales (such net sales to be calculated in accordance
with Section 1.27 (with appropriate contextual adjustments) and GAAP) of such
products up to three percent (3%) of such net sales, and other customary and
reasonable terms to be agreed by the Parties.
(c) At GenVec's request, Warner will negotiate in good faith the
terms of a nonexclusive, worldwide license to GenVec (with the right to
sublicense) under Warner's interest in any Collaboration Technology owned solely
by Warner, to make, have made, use, import, offer for sale and sell products
other than Product Configurations, subject to Article 15, which terms shall
include the payment of a royalty to Warner on net sales (such net sales to be
calculated in accordance with Section 1.27 (with appropriate contextual
adjustments) and GAAP) of such products up to [*] of such net sales, and other
customary and reasonable terms to be agreed by the Parties.
4.8.4 Acknowledgment. The Parties each recognize and agree that any
--------------
termination by Warner of its participation in Development with respect to a
particular Development Candidate or Collaboration Product or a particular
indication in accordance with this Section 4.8 will not be considered a breach
of its obligations under this Agreement. It is further understood that in the
event that Warner elects to terminate its activities with respect to a
particular indication pursuant to this Section 4.8, such indication shall
thereafter be excluded from the Field.
5. LICENSE GRANTS
5.1 Grant by GenVec. Subject to the terms and conditions of this
---------------
Agreement, GenVec hereby grants and agrees to grant to Warner an exclusive,
worldwide license under the Background Technology and Collaboration Technology
owned or Controlled by GenVec, with the right to sublicense pursuant to Section
5.4, to the extent necessary for Warner to make, have made, use, import, offer
for sale and sell Collaboration Products for use in the Field, in the Territory
and in the Co-Promotion Countries. Such licenses with respect to a
Collaboration Product are exclusive (even as to GenVec), except that GenVec
shall retain the rights set forth in Section 5.6, the right to conduct Pre-
Clinical Activities and Development as set forth in Article 4, and the right to
manufacture and have manufactured Bulk Products pursuant to the terms of Article
11, and, if the Parties enter into a Co-Promotion arrangement pursuant to
Article 9, to use, offer for sale and promote any Collaboration Product in the
Co-Promotion Countries pursuant to the applicable Co-Promotion Agreement.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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5.2 Grant by Warner. Subject to the terms and conditions of this
---------------
Agreement, Warner hereby grants and agrees to grant to GenVec an exclusive
(except as to Warner) license under the Background Technology and Collaboration
Technology owned or Controlled by Warner to the extent necessary for GenVec to
(a) use, offer for sale and promote any Collaboration Product in the Co-
Promotion Countries, if the Parties enter into a Co-Promotion Agreement pursuant
to Article 9, and (b) manufacture or have manufactured Bulk Products, pursuant
to the terms of Article 11. GenVec may not sublicense any of its rights granted
under this Section 5.2 without the prior written consent of Warner.
5.3 Licenses to Affiliates. Each Party shall, at the other Party's
----------------------
reasonable request, enter into license agreements directly with the other
Party's Affiliates, in lieu of the license grant to the requesting Party;
provided such agreements would not decrease the amount which would be owed
hereunder. Such agreements shall contain the same language as contained herein
with appropriate changes in parties and territory, and this Agreement shall be
amended as appropriate. No such license agreement will relieve Warner or
GenVec, as the case may be, of its obligations hereunder, and such Party will
guarantee the obligations of its Affiliate in any such agreement.
5.4 Sublicenses. Warner may sublicense the rights granted in Section 5.1
-----------
to its Affiliates or Third Parties, with the prior written consent of GenVec,
which consent shall not be unreasonably withheld. Each sublicense granted by
Warner shall be consistent with all the terms and conditions of this Agreement.
Warner shall remain responsible to GenVec for all of each such Sublicensee's
applicable financial and other obligations under this Agreement.
5.5 Cross-Licenses. Each Party hereby grants and agrees to grant to the
--------------
other, a non-exclusive, non-transferable, royalty-free license to use and
practice such Party's Background Technology and Collaboration Technology solely
for research purposes in the Field in connection with the Research Program. In
addition, for each Development Candidate (and corresponding Collaborative
Product) which enters Pre-Clinical Activities or Development, each Party hereby
grants and agrees to grant to the other a non-exclusive, non-transferable,
royalty-free license to use and practice such Party's Background Technology and
Collaboration Technology for the Pre-Clinical Activities and Development of such
Development Candidate (and the corresponding Collaboration Product) in the Field
until termination of Pre-Clinical Activities or Development with respect to such
Development Candidate (or corresponding Collaboration Product).
5.6 Retained Rights. It is understood and agreed that, subject to Section
---------------
2.6 and Article 15, GenVec shall retain the exclusive right to develop
(including pre-clinical and clinical development), make, have made, use, sell
and otherwise commercialize the Collaboration Products for all uses outside the
Field, and all products other than Collaboration Products in and outside the
Territory and the Co-Promotion Countries. It is understood and agreed that
GenVec may practice and use its Background Technology and Collaboration
Technology in the Territory and the Co-Promotion Countries to facilitate the
exercise of its rights outside the Territory and outside the Co-Promotion
Countries.
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5.7 Covenant Not to Sue. In partial consideration for the grant of rights
-------------------
hereunder, Warner agrees not to enforce against GenVec or its Affiliates any
Collaboration Technology owned or controlled by Warner or its Affiliates during
the term of this Agreement that GenVec or its Affiliates may infringe in
practicing the inventions claimed in Background Technology owned or Controlled
by GenVec, unless such practice would constitute a material breach of the
licenses granted Warner hereunder.
5.8 No Unauthorized Use. Each Party hereby covenants to the other that it
-------------------
will not practice the Background Technology or Collaboration Technology of the
other Party, except as expressly permitted in this Agreement.
5.9 No Implied Licenses. No rights or licenses with respect to any
-------------------
intellectual property owned by GenVec or Warner are granted or shall be deemed
granted hereunder or in connection herewith, other than those rights expressly
granted in this Agreement.
6. CONSIDERATION
6.1 [*] In partial consideration for the license and rights granted Warner
---
herein, Warner shall pay to GenVec within [*] of the Effective Date a [*] Such
amount shall not be refundable nor creditable against other amounts due GenVec
under this Agreement.
6.2 Purchase of GenVec Stock. Warner shall purchase shares of GenVec
------------------------
preferred and/or common stock from GenVec, pursuant to the terms and conditions
of the Stock Purchase Agreement.
6.3 Research Program and Development Funding.
----------------------------------------
6.3.1 [*] Warner agrees to pay to GenVec research funding
---
with respect to the Research Program and Development in at least the following
amounts for [*]:
Period Amount
------ ----------
[*]
6.3.2 [*].
---
(a) In [*] then Warner shall pay to GenVec research funding
with respect to the Research Program and Development in at least the following
amounts:
Period Amount
------ ----------
[*]
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[*]
(b) If the Parties agree pursuant to Section 2.5 to include
[*] then Warner shall pay to GenVec funding for the Research Program and
Development of at least [*] for each of [*]
(c) If the parties agree pursuant to Section 2.5 to include
more than one indication in addition [*] then Warner shall pay to GenVec
additional funding for the Research Program and Development for each such
indication of [*] per year as provided in Section 2.5.2 unless GenVec otherwise
agrees, in its reasonable discretion, that a lesser amount of funding will
provide appropriate support for the activities to be conducted in the Research
Program with respect to such indication.
6.3.3 Research Program Extension. If the Research Program is
--------------------------
extended beyond [*] pursuant to Section 2.4.1, Warner shall pay to GenVec
additional Research Program funding to be agreed by the Parties for such
additional period.
6.3.4 Schedule of Payments. [*] of the Research Program shall
--------------------
commence on [*] and each subsequent [*] of the Research Program (each a "[*]")
shall commence on [*]. The amounts to be paid to GenVec in connection with the
Research Program shall be paid [*] The initial payment for the [*] of the
Research Program shall be made [*] after the Effective Date, and subsequent
payments shall be made on or before the applicable [*] of the Effective Date.
Unless required by applicable law, such payments shall be made without
withholding for taxes or any other charge and, subject to Section 2.2.1, shall
be non-refundable and non-creditable against other payments due GenVec under
this Agreement. [*]
6.4 Milestone Payments.
------------------
6.4.1 Collaboration Products. Within [*] days following the
----------------------
occurrence of the relevant events specified below with respect to the first
Collaboration Product intended for use for the treatment of [*] Warner shall pay
to GenVec the following amounts:
______________
[*]
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______________
[*]
In addition, [*] days following the second occurrence and each subsequent
occurrence of each of the above milestones for each additional Collaboration
Product for the treatment of either [*] Warner will pay to GenVec additional
milestone payments equal to one-third of the amounts indicated above for the
applicable event.
6.4.2 Backup Collaboration Products. The payments due under Section
-----------------------------
6.4.1 above shall be made with respect to each Collaboration Product; provided,
however, if Warner ceases all development of a particular Collaboration Product
after having made payments with respect to such Collaboration Product under
Sections 6.4.1 above following the accomplishment of any milestone specified
above, there shall be no payment due upon the accomplishment of that same
milestone with respect to the next Collaboration Product for the same
indication. When milestones are achieved with respect to such subsequent
Collaboration Product which were not previously paid with respect to a
corresponding earlier discontinued Collaboration Product, such milestone
payments shall be paid pursuant to Section 6.4.1.
6.4.3 Milestones for Indications other than [*] Within [*]
-----------------------------------------
following the demonstration of preclinical efficacy (as demonstrated
by meeting criteria established in [*] for each indication in the Field [*]
and, in each case, Warner shall pay to GenVec with respect to each such
indication a one-time milestone payment of [*]
6.5 Royalties.
---------
6.5.1 Collaboration Product Royalties. In consideration of the rights
-------------------------------
granted hereunder, subject to Section 6.6.2, Warner shall pay the following
royalties to GenVec with respect to aggregate Net Sales of Collaboration
Products in the Territory, on a Collaboration Product-by-Collaboration Product
basis:
[*]
[*]
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OMITTED PORTIONS.
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[*]
6.5.2 Computation of Royalties. All sales of Collaboration Products
------------------------
between Warner and any of its Affiliates and sublicensees shall be disregarded
for purposes of computing Net Sales and royalties under this Section 6.5, and in
such instances royalties shall be payable only upon sales to unlicensed Third
Parties. Nothing herein contained shall obligate either Party to pay the other
Party more than one royalty on any unit of a Collaboration Product.
6.5.3 Royalty Term. The obligation of Warner to pay royalties under
------------
this Article 6 shall continue for each Collaboration Product on a Collaboration
Product-by-Collaboration Product and country-by-country basis, until the later
of (i) such time as there are no Valid Claims which but for the licenses granted
herein would be infringed by the manufacture, sale or use of such Collaboration
Product in such country, or (ii) [*] from the first commercial sale of such
Collaboration Product in such country.
6.5.4 Minimum Royalty. It is understood and agreed that regardless of
---------------
any credits or offsets to which Warner is entitled under the terms of this
Agreement, the royalty payments due GenVec under Article 6 shall not be [*] of
any Collaboration Product in the applicable quarter.
6.6 Third Party Royalties.
---------------------
[*]
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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[*]
6.7 Withholding Taxes. Any income or other tax that a Party hereunder,
-----------------
its Affiliates or sublicensees is required to withhold (the "Withholding Party")
and pay on behalf of the other Party hereunder (the "Withheld Party") with
respect to the royalties payable under this Agreement shall be deducted from and
offset against said royalties prior to remittance to the Withheld Party;
provided, however, that in regard to any tax so deducted, the Withholding Party
shall give or cause to be given to the Withheld Party such assistance as may
reasonably be necessary to enable the Withheld Party to claim exemption
therefrom or credit therefor, and in each case shall furnish the Withheld Party
proper evidence of the taxes paid on its behalf.
6.8 Guaranty. Warner agrees that as additional consideration for GenVec's
--------
performance hereunder, it will guaranty a loan to GenVec by a bank or other
financial institution in a principal amount of [*] which guaranty shall be in
a reasonable form agreed by the Parties. As a condition to Warner's obligation
to execute the Guaranty and to secure the obligation of GenVec to reimburse
Warner if Warner is required to make a payment under the Guaranty, GenVec shall
execute and deliver to Warner a Security Agreement in a reasonable form agreed
by the Parties.
7. BOOKS AND RECORDS
7.1 [*]
---
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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7.2 Payment Method; Late Payments. All amounts due GenVec hereunder shall
-----------------------------
be paid in U.S. dollars by wire transfer in immediately available funds to a
bank account designated by GenVec. Any payments or portions thereof due
hereunder which are not paid on the date such payments are due under this
Agreement shall bear interest at a rate equal to the lesser of prime rate as
reported by the Citibank (or its successor in interest), New York, New York,
[*] or the maximum rate permitted by law, calculated on the number of days such
payment is delinquent, compounded monthly. This Section 7.2 shall in no way
limit any other remedies available to GenVec.
7.3 Currency Conversion. Royalties earned shall first be determined in
-------------------
the currency of the country in which they are earned and then converted to its
equivalent in United States currency. The buying rates of exchange for
converting the currencies involved into the currency of the United States quoted
by Citibank (or its successor in interest) New York, New York at the close of
business on the last business day of the quarterly period in which the royalties
were earned shall be used to determine any such conversion.
7.4 Restrictions on Payments. The obligation to pay royalties under this
------------------------
Agreement shall be waived and excused to the extent that statutes, laws, codes
or government regulations in a parti cular country prevent such royalty
payments; provided, however, in such event, if legally permissible, Warner shall
pay the royalties owed to GenVec by depositing such amounts in a bank account in
such country that has been designated by GenVec and promptly report such payment
to GenVec.
7.5 Records; Inspection. Warner and its Affiliates shall keep (and cause
-------------------
its Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable under Article
6. Such books and records shall be kept reasonably accessible for at least
[*] following the end of the calendar quarter to which they pertain.
Such records will be open for inspection during such [*] period by a
representative or agent of GenVec reasonably acceptable to Warner, which
approval shall not be unreasonably withheld for the purpose of verifying the
royalty statements. Such inspections may be made no more than once each
calendar year, at reasonable times mutually agreed by Warner and GenVec.
GenVec's representative or agent will be obliged to execute a reasonable
confidentiality agreement prior to commencing any such inspection and may only
disclose to GenVec the amount of any variance or error. GenVec shall bear the
costs and expenses of inspections conducted under this Section 7.5, unless a
variation or error producing an underpayment in royalties payable [*]
of the amount payable for any inspection period is established in the course of
any such inspection, whereupon all costs relating to the inspection and any
unpaid amounts that are discovered will be paid by Warner, together with
interest on such unpaid amounts at the rate specified in Section 7.2 above.
8. COMMERCIALIZATION IN THE TERRITORY
8.1 Collaboration Product Development. Subject to Article 9 if the
---------------------------------
Parties Co-Promote, Warner shall be responsible for all costs of conducting
Development of Collaboration Product(s) in
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OMITTED PORTIONS.
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the Territory, including, without limitation, expenses incurred in conducting
clinical trials for Collaboration Products for which it retains
commercialization rights thereto. In addition, Warner shall be responsible, at
its sole expense, for all commercialization of such Collaboration Product(s) in
the Territory so long as Warner retains rights thereto under this Agreement.
During the term of this Agreement, Warner shall keep GenVec fully informed of
its activities subject to this Agreement, including without limitation, the
achievement of the milestones set forth in Sections 6.4 and 8.2.2 and the
commercialization of the Collaboration Product(s). On or before January 31 of
each year, at GenVec's request, Warner shall provide GenVec with a written
report summarizing such events and activities and detailing those which have not
been previously reported. When a registration package requesting approval for
commercial sale of any Collaboration Product is first filed in any country
within the Territory, and when approval is received therefor, Warner will
immediately notify GenVec in writing.
8.2 Due Diligence.
-------------
8.2.1 Reasonable Efforts. Warner shall use all reasonable efforts to:
------------------
(i) promptly develop the Collaboration Products following designation of such
Collaboration Product, (ii) achieve the milestones set forth in this Section
8.2, (iii) obtain regulatory approvals to market such Collaboration Products in
the Territory, and (iv) after obtaining regulatory approvals for any such
Collaboration Product, launch such Collaboration Product and promote and meet
the market demand therefor throughout the Territory. In connection therewith,
Warner shall only be required to use efforts comparable to those efforts Warner
makes with respect to its own pharmaceutical products of comparable commercial
potential, stage of development and patent protection.
8.2.2 Milestones.
----------
(a) [*] Warner (or its Affiliates or
---
Sublicensees) shall achieve each of the milestones set forth below with respect
to the first Collaboration Product for [*] the applicable date set forth
below, unless other dates are agreed by the Executive Committee:
________
MILESTONE MILESTONE DATE
[*]
It is understood and agreed that Warner shall have no obligation to achieve
[*] milestone under this Section 8.2.2(a) if the Executive Committee
has determined that GenVec is responsible for the [*]
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(b) [*]. Upon designation of a Development Candidate pursuant
---
to Section 4.1.2 for each indication within the Field [*], the Executive
Committee shall establish a Development Plan for the corresponding Collaboration
Product pursuant to Section 4.4, and [*], initiation of [*], and the [*] with
respect to such Collaboration Product; provided, the dates for achievement of
the foregoing milestones with respect to the first Collaboration Product [*]
shall be established by the Executive Committee no later than [*] Such dates may
be modified by the Executive Committee.
8.2.3 Payments. In the event that Warner fails to achieve any
--------
milestone with respect to any Collaboration Product within [*] after the
applicable milestone date established under Section 8.2.2 above, Warner shall
pay to GenVec an amount equal to [*] corresponding milestone payment described
in Section 6.4. Such payment shall be due within [*] of the applicable milestone
date and shall be creditable against the milestone payment due upon actual
achievement of the applicable milestone. The balance of any milestone payment
which has been partially paid pursuant to this Section 8.2.3 shall be due and
payable [*] after actual achievement of the applicable milestone.
8.2.4 Lack of Diligence. In the event that Warner (i) fails to use or
-----------------
continue to use diligent efforts to actively develop and commercialize at least
one Product Configuration (or corresponding Collaboration Product) for a
particular clinical indication in the Field as set forth in Section 8.2.1 above
(which diligence shall include but not be limited to the payment of the amounts
set forth in Section 8.2.3), or (ii) notifies GenVec that it will not conduct
further commercialization with respect to a particular clinical indication in
the Field, then GenVec may terminate Warner's rights under this Agreement with
respect to such clinical indication and all Product Configurations (or
corresponding Collaboration Products) therefor in the Territory. In such event,
such indication shall thereafter be excluded from the Field, and, subject to
Article 15, GenVec shall thereafter have the exclusive rights to commercialize
any Product Configuration (or corresponding Collaboration Product) for such
indication in the Territory, alone or with Third Parties, without obligation to
Warner.
8.2.5 Licenses. In the event that any of Warner's rights terminate
--------
pursuant to Section 8.2.4 above, at GenVec's request, Warner shall grant to
GenVec the following licenses for Product Configurations (and corresponding
Collaboration Products) for the applicable clinical indication:
(a) Warner will grant GenVec an exclusive (even as to Warner),
worldwide, fully-paid, perpetual license (with the right to sublicense) under
Warner's interest in any Collaboration Technology jointly owned by Warner and
GenVec necessary or useful to make, have made, import, use, offer for sale and
sell Product Configurations (and corresponding Collaboration Products), subject
to Article 15, for indications other than those which Warner retains rights
hereunder, and products other than Collaboration Products; and
(b) At GenVec's request, Warner will negotiate in good faith
the terms of an exclusive, worldwide license to GenVec (with the right to
sublicense) under Warner's interest in
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any Collaboration Technology owned solely by Warner, to make, have made, use,
import, offer for sale and sell Product Configurations, subject to Article 15,
which terms shall include the payment of a royalty to Warner on net sales (such
net sales to be calculated in accordance with Section 1.27 (with appropriate
contextual adjustments) and GAAP) of such products up to [*] and other customary
and reasonable terms to be agreed by the Parties.
(c) At GenVec's request, Warner will negotiate in good faith the terms
of a nonexclusive, worldwide license to GenVec (with the right to sublicense)
under Warner's interest in any Collaboration Technology owned solely by Warner,
to make, have made, use, import, offer for sale and sell products other than
Product Configurations, subject to Article 15, which terms shall include the
payment of a royalty to Warner on net sales (such net sales to be calculated in
accordance with Section 1.27 (with appropriate contextual adjustments) and GAAP)
of such products up to [*] and other customary and reasonable terms to be agreed
by the Parties.
8.3 Commercialization Outside the Territory and Co-Promotion Countries.
------------------------------------------------------------------
It is understood and agreed that, subject to Section 2.2.3, GenVec and/or the
Asian Partner shall be responsible, at their sole expense, for conducting all
research and development (including, without limitation, clinical trials) and
commercialization of Collaboration Products outside the Territory and Co-
Promotion Countries.
9. CO-PROMOTION OPTION
GenVec shall have the option, exercisable on or before [*] (as established
by the Executive Committee) with respect to each [*] with written notice to
Warner, to co-develop and co-promote such Collaboration Product for any such
indication in any one or more of the Co-Promotion Countries (the "Co-Promotion
Option"). If GenVec exercises the Co-Promotion Option with respect to a
particular Collaboration Product [*], GenVec shall have the right to co-promote
such Collaboration Product for [*] in the Co-Promotion Country(ies), and the
Parties shall promptly negotiate and enter into a further Co-Promotion Agreement
consistent with this Agreement and which shall include the provisions set forth
on Exhibit B hereto, unless otherwise agreed by the Parties. If the Parties fail
to enter into a written Co-Promotion Agreement within nine (9) months from the
exercise of the Co-Promotion Option by GenVec, subject to Article 15, neither
Party shall have any right to commercialize the pertinent Collaboration Product
in the Co-Promotion Countries.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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10. TRADEMARKS
10.1 Warner Trademarks. Warner may select and own one or more trademarks
-----------------
for marketing a Collaboration Product in countries in the Territory (the "Warner
Trademarks"), taking into consideration the Trademark(s) selected by the Parties
for any countries in which the Parties are conducting co-promotion, if any. All
expenses for (i) registration of such Warner Trademark and (ii) bringing,
maintaining and prosecuting any action to protect or defend such Warner
Trademark in such countries shall be borne by Warner. If Warner and its
Affiliates and Sublicensees terminate the sale of any Collaboration Product
during the term of this Agreement, at GenVec's request, Warner shall assign
during the term of this Agreement to GenVec any Warner Trademark which
specifically identifies such Collaboration Product, and GenVec shall be
responsible for any enforcement and/or maintenance thereof thereafter.
[*]
10.3 Use of Trademarks. Except as set forth in this Article 10, nothing
-----------------
contained in this Agreement shall grant to either Party any right, title, or
interest in or to any trademarks of the other Party, whether or not specifically
recognized or perfected under applicable laws. At no time during or after the
term of this Agreement shall either Party challenge or assist others to
challenge trademarks used in connection with the Collaboration Products or the
registration thereof or attempt to register any trademarks, marks, or trade
names confusingly similar to such trademarks.
11. SUPPLY OF COLLABORATION PRODUCTS
11.1 Manufacture of Bulk Product by GenVec.
-------------------------------------
11.1.1 GenVec will have the right to manufacture or have
manufactured the Parties' requirements in the Territory and the Co-Promotion
Countries of each Collaboration Product for clinical studies and requirements of
Bulk Product for commercial use at a GMP facility, provided Bulk Product for
commercial use shall be manufactured at a GMP facility which is licensed and
qualified by the FDA to manufacture such Bulk Product. All costs associated with
the qualification or validation of GenVec or a Third Party manufacturer for the
production of such Bulk Product pursuant to this Section 11.1 shall be borne by
GenVec.
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11.1.2 All Product supplied under this Section 11.1.2 shall be
supplied by GenVec at a price equal to the greater of (i) [*] the Cost of
Manufacture of such Collaboration Product, or (ii) [*] of Net Sales [*] Prior to
such time that GenVec commences supply of the first Collaboration Product for
commercial sale, the Executive Committee shall establish a mechanism for
determining the specific payments due to GenVec pursuant to this Section 11.1.2,
and the timing of such payments to GenVec. Notwithstanding the above, if the
price of the Bulk Product form of any particular Collaboration Product purchased
from GenVec exceeds [*] and Warner has a written binding commitment from a
Second Source that such Second Source will provide such Bulk Product to Warner
for at least three (3) years at a price less than [*] of [*] Manufacture for
such [*] Warner may notify GenVec, and in such event Warner may purchase such
[*] of such Collaboration Product from such Second Source unless GenVec agrees
to match the price offered Warner by the Second Source.
11.1.3 The Executive Committee shall be responsible for
establishing the specifications, including any necessary documentation,
certificates of analysis and test results, for the relevant Collaboration
Product to be manufactured under this Section 11.1. The Executive Committee will
promptly provide each Party with copies of all such specifications and other
information and documentation. In addition, GenVec will provide Warner with
notice of, and results and data from, all FDA audits relating to GenVec's supply
of Bulk Product.
11.2 Manufacture of Finished Product by Warner.
-----------------------------------------
11.2.1 Warner will have the right, using Bulk Product supplied
pursuant to Section 11.1 or 11.4, to manufacture or have manufactured the
Parties' requirements of each Finished Product at a GMP facility which is
licensed and qualified by the FDA to manufacture such Finished Product. All
costs associated with the qualification or validation of Warner or a Third Party
manufacturer for the production of such Finished Product for sale in the
Territory pursuant to this Section 11.2 shall be borne by Warner.
11.2.2 The Executive Committee shall be responsible for
establishing the specifications, including any necessary documentation,
certificates of analysis and test results, for the relevant Collaboration
Product to be manufactured under this Section 11.2. The Executive Committee will
promptly provide each Party with copies of all such specifications and other
information and documentation. In addition, Warner will provide GenVec with
notice of, and results and data from, all FDA audits relating to Warner's supply
of Finished Product.
11.2.3 At GenVec's request, Warner will supply Finished Products to
GenVec for sale outside the Territory and Co-Promotion Countries, on terms to be
agreed in good faith by the Parties.
11.3 Warner's Right to Identify and Qualify Second Source for Bulk
-------------------------------------------------------------
Product. In its sole discretion and at its expense, Warner may, at any time,
- -------
either (i) enter into an agreement for the
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qualification and validation of a Third Party manufacturer of Bulk Product, or
(ii) qualify and validate itself to manufacture Bulk Product (the "Second
Source") and GenVec shall provide reasonable cooperation and assistance at
Warner' expense to the Second Source with respect to such qualification and
validation. In the event such Second Source supplies Bulk Product pursuant to
Section 11.4, [*]
11.4 Use of Second Source for Bulk Product. In addition to Warner's right
-------------------------------------
to use the Second Source pursuant to Section 11.1.2, if GenVec is unable to
supply all of the reasonably anticipated requirements (as forecasted pursuant to
Section 11.5.1) of Bulk Products to be manufactured by GenVec pursuant to
Section 11.1 for any reason, including force majeure causes (as defined under
Section 21.6), it shall immediately notify Warner and the Executive Committee
shall discuss the manufacturing issues within ten (10) days of a request by
either Party. If, following such discussions the Parties mutually agree, the
Parties shall utilize the Second Source to manufacture such portion of the Bulk
Products which GenVec is not able to supply. If such Second Source is not yet
established, the Parties may agree on a mutually acceptable Third Party
manufacturer to replace or supplement GenVec as a manufacturer of Bulk Products.
All Bulk Products manufactured by the Second Source shall be manufactured in
accordance with the specifications approved by the Executive Committee. If a
Second Source manufactures any Bulk Products pursuant to this Section 11.4,
Warner and GenVec shall cooperate and assist each other to obtain, transfer or
use any licenses, registrations or information reasonably required to permit
such Second Source to manufacture such Bulk Product.
11.5 Terms of Manufacture and Supply.
-------------------------------
11.5.1 The Executive Committee shall establish procedures
acceptable to both Parties regarding forecasts of requirements of the
Collaboration Products.
11.5.2 Each party shall, at the request and expense of the other
Party, permit an independent accountant to whom the other Party has no
reasonable objection, to have access to and to examine the written records of
the Party which is manufacturing a particular Collaboration Product concerning
its Cost of Manufacturing, during normal business hours, but not more than once
in any twelve (12) month period, to verify the Cost of Manufacturing. The
reviewing Party shall keep in strict confidence all information learned in the
course of such audit.
11.5.3 Each Party shall keep adequate records with respect to all
Collaboration Products manufactured by it or for it (i.e., Bulk Product or
Finished Product, as the case may be) and in any case in compliance with
applicable law. From time to time, the other Party shall have the right to
review and audit, at the requesting Party's expense, such records and
manufacturing facility (or the facility of a Third Party manufacturer used by
the manufacturing Party) to the extent necessary to verify compliance with the
manufacturing party's obligations hereunder, using an independent auditor
acceptable to the manufacturing Party.
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11.5.4 Each Party shall be responsible for manufacturing at a GMP
facility, maintaining the quality control in connection with its own manufacture
of Bulk Products and Finished Products in accordance with cGMP and the
Collaboration Product specifications and shall maintain such further quality
control standards as are established by the Executive Committee. To the extent
Finished Products or Bulk Products are manufactured by a Third Party, the Party
or Parties contracting with such Third Party shall provide in such contract that
such Third Party will be held to the quality control standards established by
the Executive Committee.
11.5.5 Each Party shall use diligent efforts to obtain and maintain
any Regulatory Approvals in the Territory and the Co-Promotion Countries
necessary to manufacture and supply under this Article 11 during the Development
and commercialization of each Collaboration Product.
11.5.6 At the request of either Party, the Parties shall promptly
negotiate and enter into a detailed supply agreement for any Collaboration
Product which shall contain reasonable terms, agreed by the parties, which are
customary in agreements of such type and consistent with the terms herein.
[*]
12. REGULATORY AFFAIRS
12.1 Side Effects. Each Party shall advise the other within the time
------------
limit required by applicable Agency laws and regulations (or similar foreign
laws and regulations) by telefax or overnight delivery service addressed to the
attention of its Vice President, Medical Affairs (or, in GenVec's case, the
employee with similar responsibilities), of any unexpected side effect, adverse
reaction or injury which has been brought to that Party's attention at any place
and which is alleged to have been caused by a Collaboration Product. Warner
shall have all rights and responsibility to report such side effects, adverse
reaction or injury in the Territory to regulatory authorities and others as
appropriate.
12.2 Regulatory and Other Inquiries. Upon being contacted by the FDA or
------------------------------
any drug regulatory Agency for any regulatory purpose pertaining to this
Agreement or to a Collaboration Product, GenVec and Warner shall promptly
(within two (2) business days) notify and consult with one another and Warner
shall provide a response as it deems appropriate. Warner shall have sole
responsibility for responding to all inquiries in the Territory to Warner or
GenVec regarding the benefits, side effects and other characteristics of
Collaboration Products. The Party which is responsible for manufacturing the
Bulk Product form of the pertinent Collaboration Product shall have the sole
responsibility for responding to all inquiries in the Territory regarding the
manufacture of such Bulk Product form after consultation with the other Party.
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[*]
12.4 Access to Regulatory Filings. Each Party and its Affiliates, and,
----------------------------
subject to such Party's obligations to Third Parties, its Sublicensees, shall
have the right to refer to, access, cross reference, and use documents relating
to each Collaboration Product filed by a Party or its Affiliates or Sublicensees
with regulatory entities with respect to activities conducted in connection with
the Research Program or the Development, including clinical studies and other
supporting information, and any written communications to and with the FDA and
other comparable Agencies. GenVec (and its designees) shall have access to and
the right to the Data Package for use in connection with regulatory filings for
(i) Collaboration Products, outside the Co-Promotion Countries and the
Territory, and (ii) with respect to Product Configurations (and corresponding
Collaboration Products) for which Warner does not retain rights under this
Agreement, and other products, outside and within the Territory and Co-Promotion
Countries. It is understood and agreed that GenVec shall not provide access to
the Data Package or other data generated in connection with the Research Program
or with respect to the Development of a Development Candidate (or corresponding
Collaboration Product) to the Asian Partner unless the Asian Partner agrees to
pay the amounts described in Section 2.2.3.
[*]
13. DEVICE DELIVERY
13.1 Device Plan. Within ninety (90) days of the Effective Date, the
-----------
Research Management Committee agrees to meet to discuss the potential role of
device delivery technology (e.g., [*]) with respect to the research, development
and commercialization of potential Collaboration Products. At such meeting, the
Research Management Committee shall agree to a timeline, [*], for the
establishment of initial recommendations on how to appropriately integrate the
use of device delivery technology in the research and development of
Collaboration Products, with the objective of optimizing the commercial adoption
of Collaboration Products.
13.2 Device Agreement. If the Executive Committee determines that a
----------------
relationship or relationships with one or more device companies is appropriate
for commercialization of one or
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more of the Collaboration Products, GenVec and Warner will jointly select such
company or companies with expertise in the development and commercialization of
devices for the delivery of therapeutic agents (each a "Device Company") and
shall jointly negotiate with any such Device Company the terms of an agreement
for use of the applicable Collaboration Products in the Field with a device or
devices. During the term that Warner has rights hereunder with respect to a
particular Collaboration Product, except in connection with an Asian Partner,
neither Party may license any of its Patents or Know-How to, or otherwise
collaborate in the Field in the Territory or Co-Promotion Countries with, any
Third Party (other than a Sublicensee) for use of a Collaboration Product with a
delivery device, except pursuant to an agreement mutually acceptable to GenVec
and Warner (a "Device Company Agreement").
14. INTELLECTUAL PROPERTY
14.1 Ownership of Technology.
-----------------------
14.1.1 Background Technology. Except as otherwise set forth herein,
---------------------
each Party shall retain ownership or Control, as the case may be, over its
Background Technology. The owner of any patentable Background Technology shall
have the right, at its option and expense, to prepare, file and prosecute in its
own name any patent applications with respect to such Background Technology and
to maintain any patents issued thereon.
14.1.2 Collaboration Technology. Inventorship and rights of
------------------------
ownership of Collaboration Technology (whether or not patentable) shall be
determined in accordance with United States laws of inventorship or the law of
Maryland, as applicable.
14.2 Solely-Owned Patent Rights.
--------------------------
14.2.1 The sole owner (the "Owner") of any patentable Collaboration
Technology (an "Invention") shall have the right, at its option and expense, to
prepare, file and prosecute patent applications in its own name, in such
countries as it deems appropriate, and conduct any interferences, re-
examinations, reissues, oppositions or requests for patent term extensions
relating thereto, using counsel of its choice, and to maintain any patents
issued. In connection therewith, the non-Owner Party agrees to cooperate with
the Owner, at the Owner's expense, in the preparation and prosecution of all
such patent applications and in the maintenance of any patents issued. The
Owner shall keep the other Party currently informed of all steps to be taken in
such preparation, prosecution and maintenance of all of its Patent Rights which
claim an Invention and shall upon request furnish the other Party with copies of
such Patent Rights and other related correspondence relating to such Invention
to and from patent offices and where feasible, permit the other Party a period
of at least [*] to offer its comments thereon before the Owner makes a
submission to a patent office which could materially affect the scope or
validity of the patent coverage that may result, and promptly provide the other
Party copies of any documents relating to Invention which the Party conducting
such activities receives from such patent offices, including notice of all
interferences, reissues, reexaminations, oppositions or requests for patent term
extensions.
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[*]
14.3 Jointly Owned Inventions.
------------------------
14.3.1 Responsibilities. Collaboration Technology jointly invented
----------------
by GenVec and Warner will be jointly owned by GenVec and Warner (each a "Joint
Invention"). In each case, the Parties shall agree which Party will have the
rights and responsibilities of the "Inventor" (as described in this Article 14)
in respect of any such patentable, jointly owned Collaboration Technology, and
which Party shall have the rights and responsibilities of a non-Inventor
therefor. The Inventor shall use patent counsel reasonably acceptable to the
Non-Inventor, and shall keep the non-Inventor fully informed as to the status of
such patent matters, including, without limitation, by providing the non-
Inventor and its patent counsel the opportunity, at the non-Inventor's expense,
to review and comment on any documents relating to the Joint Invention which
will be filed in any patent office at least [*] before such filing, and promptly
providing the non-Inventor copies of any documents relating to Joint Invention
which the Inventor receives from such patent offices, including notice of all
interferences, reissues, reexaminations, oppositions or requests for patent term
extensions.
14.3.2 Cooperation.
-----------
(a) The Parties will cooperate to file, prosecute and
maintain patent applications covering the Joint Invention(s) within the
Collaboration Technology in the United States and the European Union (in Europe
through a European Patent Convention application) (collectively, the "Core
Countries") and other countries agreed by the Parties. The Parties will share
equally all expenses and fees associated with the filing, prosecution, issuance
and maintenance of any patent application and resulting patent for a Joint
Invention in the Core Countries and other agreed countries and if such Joint
Invention is relevant to the Collaboration such amounts shall be included within
the Research Program expenses described in Section 2.2. Subject to Section
14.3.2(b) below, it is understood that, after the termination of the Research
Program, the parties shall share equally the expenses and fees associated with
the filing, prosecution, issuance and maintenance of any patent application and
resulting patent for a Joint Invention in the Core Countries and other agreed
countries.
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(b) In the event that either Party wishes to seek patent
protection with respect to any Joint Invention outside the Core Countries, it
shall notify the other Party hereto. If both Parties wish to seek patent
protection with respect to such Joint Invention in such country or countries,
activities shall be subject to Section 14.3.2(a) above. If only one Party wishes
to seek patent protection with respect to such Joint Invention in such country
or countries (including, without limitation, Japan), it may file, prosecute and
maintain patent applications and patents with respect thereto, at its own
expense. Whenever possible, the Parties shall cooperate to obtain the benefit of
international treaties, conventions and/or agreements (e.g., the Patent
Cooperation Treaty) in order to obtain the benefits afforded thereby. [*]
14.4 Enforcement.
-----------
14.4.1 Notice. GenVec and Warner shall each promptly notify the
------
other of any infringement or unauthorized use of an Invention which comes to its
attention, describing the facts relating thereto in reasonable detail.
14.4.2 Solely Owned Inventions. Subject to 14.4.3 below, in the
-----------------------
event that any Background Technology or Collaboration Technology solely owned by
a Party (collectively "Technology") necessary for manufacture, use and sale of a
Collaboration Product is infringed or misappropriated by a third Party in any
country in the Territory, or is subject to a declaratory judgment action arising
from such infringement in such country, Warner or GenVec, as the case may be,
shall promptly notify the other Party hereto. The Party which owns or Controls
such Technology (the "Technology Owner") shall have the initial right (but not
the obligation) to enforce such Technology, or defend any declaratory judgment
action with respect thereto, at its expense. In the event that the Technology
Owner fails to initiate a suit to enforce such Technology against a commercially
significant infringement in the Field by a Third Party in any jurisdiction in
the Territory within [*] of a request by the other Party (the "Licensee") to do
so, the Licensee may, subject to the Technology Owner's agreements with Third
Parties, initiate such suit in the name of the Technology Owner of such
Technology against such infringement, at the expense of such Licensee. In the
event that the Technology Owner's agreements with a Third Party do not allow the
other Party hereto to initiate a suit as described above to enforce the
Technology against a Third Party infringer, then the Technology Owner shall be
obligated to commence such a suit and use diligent efforts in connection
therewith or obtain for the Licensee the right to commence suit against the
infringer. The Party involved in any such claim, suit or proceeding, shall keep
the other Party hereto reasonably informed of the progress of any such claim,
suit or proceeding. Any recovery by such Party received as a result of any such
claim, suit or proceeding shall be used first to reimburse such Party for all
expenses (including attorneys and professional fees) incurred in connection with
such claim, suit or proceeding and if the Party initiating the suit is the
Technology Owner of the subject Technology, all of the remainder shall be
retained by such Technology Owner, and if the Party initiating the suit is the
Licensee, [*] of the remainder shall be paid to the Technology Owner of the
subject Technology and [*] retained by the Licensee.
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14.4.3 Joint Inventions. In the event GenVec or Warner becomes
----------------
aware of any actual or threatened infringement in the Territory of any Patent
Right which claims a Joint Invention, that Party shall promptly notify the other
and the Executive Committee shall promptly discuss how to proceed in connection
with such actual or threatened infringement. In the event such infringement
relates to a jointly owned Collaboration Product only one Party wishes to
participate in such proceeding, it shall have the right to proceed alone, at its
expense, and may retain any recovery; provided, at the request and expense of
the participating Party, the other Party agrees to cooperate and join in any
proceedings in the event that a third Party asserts that the co-owner of such
Joint Invention is necessary or indispensable to such proceedings.
[*]
14.6 Independent Inventions. Ownership rights to inventions that do not
----------------------
rely in material part on technology, data or knowledge contributed by the other
Party or derived under the Collaboration and that are made by the employees of
GenVec (but not of Warner) or by the employees of Warner (but not of GenVec), as
the case may be, whether or not made during the Term of this Agreement, shall
reside solely in GenVec or Warner, respectively, as the case may be. Neither
Party will claim or assert ownership rights, licenses or royalties or other
compensation with respect to such patents and other intellectual property owned
by the other Party. The applicable Party
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shall have the right, at its option and expense, to prepare in its own name,
file and prosecute any patent applications and to maintain any patents issued
with respect to such inventions. In connection therewith, the other Party agrees
to cooperate with the filing Party at the filing Party's expense in the
preparation and prosecution of all such patent applications covering such
independent inventions to the extent that such Party's cooperation is reasonably
necessary therefor. This obligation shall survive the expiration or termination
of this Agreement.
15. OTHER ACTIVITIES
15.1 Product Configurations. Except as specifically provided in this
----------------------
Agreement or otherwise agreed in writing, neither Warner nor its Affiliates or
Sublicensees shall commercialize any Product Configuration studied in the
Research Program or the Development except as a Collaboration Product in
accordance with this Agreement.
[*]
[*]
16. REPRESENTATIONS AND WARRANTIES
16.1 Legal Authority. Each Party represents and warrants to the other
---------------
that it has the legal power, authority and right to enter into this Agreement
and to perform its respective obligations set forth herein.
16.2 No Conflicts. Each Party represents and warrants that as of the date
------------
of this Agreement it is not a Party to any agreement or arrangement with any
Third Party or under any obligation or restriction, including pursuant to its
Certificate of Incorporation or Bylaws, which in any way limits or conflicts
with its ability to fulfill any of its obligations under this Agreement, and
shall not enter into any such agreement during the term of this Agreement.
GenVec further represents and warrants to Warner that it has delivered to Warner
a copy of the Scios Agreement and no oral agreements or other arrangements exist
between Scios and GenVec which supersede any of
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the terms of any such written agreement, and that as of the Effective Date such
Scios Agreement is in full force and effect and neither party to such agreement
is in default thereunder.
16.3 Others Bound. Each Party covenants that any contract it enters into
------------
with a Third Party performing services under this Agreement on behalf of such
Party will bind such Third Party to all of the relevant terms and conditions of
this Agreement, unless otherwise agreed by the parties.
16.4 Disclaimer. Except as otherwise expressly stated herein, Warner
----------
hereby disclaims any warranty expressed or implied as to any Collaboration
Product sold or placed in commerce by or on behalf of GenVec. Except as
otherwise expressly stated herein, GenVec hereby disclaims any warranty
expressed or implied as to any Collaboration Product sold or placed in commerce
by or on behalf of Warner.
16.5 Disclaimer of Warranties. GenVec and Warner each specifically
------------------------
disclaim that the Research Program or the Development will be successful, in
whole or part or that any clinical or other studies undertaken by it will be
successful. GENVEC AND WARNER EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE CONFIDENTIAL
INFORMATION, BACKGROUND TECHNOLOGY, WARNER PATENTS OR KNOW-HOW, OR GENVEC
PATENTS OR KNOW-HOW, COLLABORATION TECHNOLOGY OR PRODUCT CONFIGURATIONS,
DEVELOPMENT CANDIDATES, OR COLLABORATION PRODUCTS, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE, VALIDITY OF ANY BACKGROUND TECHNOLOGY OR COLLABORATION TECHNOLOGY,
PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS
OF THIRD PARTIES.
17. CONFIDENTIALITY
17.1 Confidential Information. Except as expressly provided herein, the
------------------------
Parties agree that, for the term of this Agreement and for [*] thereafter, the
receiving Party shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose except for the purposes
contemplated by this Agreement or the Stock Purchase Agreement any Confidential
Information of the other Party, or any other data, samples, technical and
economic information (including the economic terms hereof), commercialization,
clinical and research strategies and know-how and other information provided by
the other Party (the "Disclosing Party") during the Term of this Agreement or
during the negotiation of this Agreement, or the Stock Purchase Agreement, or in
connection with the transactions contemplated thereby, or any Collaboration
Technology and all other data, results and information developed pursuant to the
Collaboration and solely owned by the Disclosing Party (collectively the
"Confidential Information") furnished to it by the disclosing Party hereto
pursuant to this Agreement, the Stock Purchase Agreement, or the transactions
contemplated thereby, except that "Confidential Information" shall not include:
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(a) information that is or becomes part of the public domain through
no fault of the non-Disclosing Party or its Affiliates; and
(b) information that is obtained after the date hereof by the non-
Disclosing Party or one of its Affiliates from any Third Party which is lawfully
in possession of such Confidential Information and not in violation of any
contractual or legal obligation to the Disclosing Party with respect to such
Confidential Information;
(c) information that is known to the non-Disclosing Party or one or
more of its Affiliates prior to disclosure by the Disclosing Party, as evidenced
by the non-Disclosing Party's written records; and
(d) information that is necessary to be disclosed to any
governmental authorities or pursuant to any regulatory filings, but only to the
limited extent of such legally required disclosure; or
(e) information which has been independently developed by the non-
Disclosing Party without the aid or use of any Confidential Information.
17.2 Permitted Disclosures. Confidential Information may be disclosed to
---------------------
employees, agents, consultants, sublicensees or suppliers of the non-Disclosing
Party or its Affiliates, but only to the extent reasonably required to
accomplish the purposes of this Agreement and only if the non-Disclosing Party
obtains prior agreement from its employees, agents, consultants, sublicensees or
suppliers to whom disclosure is to be made to hold in confidence and not make
use of such information for any purpose other than those permitted by this
Agreement. 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, sublicensees or suppliers do not disclose or
make any unauthorized use of the Confidential Information. Notwithstanding any
other provision of this Agreement, each Party may disclose the terms of this
Agreement and the Stock Purchase Agreement to prospective lenders, investment
bankers and other financial institutions of its choice solely for purposes of
financing the business operations of such Party either (i) upon the written
consent of the other Party or (ii) if the disclosing Party obtains a signed
confidentiality agreement with such entity or financial institution with respect
to such information, upon terms substantially similar to those contained in this
Article 17.
17.3 Publicity. All publicity, press releases and other announcements
---------
relating to this Agreement or the transaction contemplated hereby shall be
reviewed in advance by, and shall be subject to the approval of, both Parties;
provided, however, that either Party may (i) publicize the existence and general
subject matter of this Agreement without the other Party's approval, and (ii)
disclose the terms of this Agreement only to the extent required to comply with
applicable securities laws and in the case of (ii), the non-disclosing Party
shall have the right to review and comment on such disclosure prior to its
submission, where practicable. Once a particular disclosure has been approved
for disclosure, either Party may make disclosures which do not differ materially
therefrom without any need for further consents. Notwithstanding the foregoing
provisions of this Section 17.3, the parties agree that all publicity, press
releases and other announcements relating to
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the occurrence of a Tranche Event (as that term is defined in the Stock Purchase
Agreement) shall be governed by Section 13 (e) of the Stock Purchase Agreement.
17.4 Publication. The Parties shall cooperate in appropriate publication
-----------
of the results of research and development work performed pursuant to this
Agreement, but subject to the predominating interest to obtain patent protection
for any patentable subject matter. To this end, it is agreed that prior to any
public disclosure of such results, the Party proposing disclosure shall send the
other Party a copy of the information to be disclosed, and shall allow the other
Party [*] from the date of receipt in which to determine whether the information
to be disclosed contains subject matter for which patent protection should be
sought prior to disclosure, or otherwise contains Confidential Information of
the reviewing Party which such Party desires to maintain as a trade secret. If
notification is not received during the [*] day period, the Party proposing
disclosure shall be free to proceed with the disclosure. If due to a valid
business reason or a reasonable belief by the non-disclosing Party that the
disclosure contains subject matter for which a patentable invention should be
sought, then prior to the expiration of the [*] day period, the non-disclosing
Party shall so notify the disclosing Party, who shall then delay public
disclosure of the information for an additional period of up to [*] permit the
preparation and filing of a patent application on the subject matter to be
disclosed or other action to be taken. The Party proposing disclosure shall
thereafter be free to publish or disclose the information. The determination of
authorship for any paper shall be in accordance with accepted scientific
practice. If GenVec enters into an agreement with an Asian Partner it shall use
reasonable efforts to include in such agreement provisions relating to
publication at least as restrictive as those in this Section 17.4.
18. INDEMNIFICATION
18.1 Warner. Warner agrees to indemnify and hold harmless GenVec and its
------
Affiliates and Sublicensees and their respective employees, agents, officers,
directors and permitted assigns (each a "GenVec Indemnitee") from and against
any claims by a Third Party resulting in any liabilities, damages, settlements,
claims, actions, suits, penalties, fines, costs or expenses incurred (including,
without limitation, reasonable attorneys' fees and other expenses of litigation)
(any of the foregoing, a "Claim") arising out of or resulting from (i)
negligence or willful misconduct by Warner, (ii) a breach of any of the
representations or warranties of Warner hereunder, or (iii) the research and
development or manufacture, use, promotion, marketing, sale or other
distribution of any Product Configuration, Development Candidate and/or
Collaboration Product by Warner or its Affiliates or Sublicensees, except, in
each case, to the extent that such Claim arises out of or results from the
negligence or misconduct of a GenVec Indemnitee.
18.2 GenVec. GenVec agrees to indemnify and hold harmless Warner and its
------
Affiliates and Sublicensees and their respective employees, agents, officers,
directors and permitted assigns (each a "Warner Indemnitee") from and against
any claims by a Third Party resulting in any liabilities, damages, settlements,
claims, actions, suits, penalties, fines, costs or expenses incurred (including,
without limitation, reasonable attorneys' fees and other expenses of litigation)
(any of the foregoing, a "Claim") arising out of or resulting from (i) the
negligence or willful misconduct of GenVec, (ii) a breach of any of the
representations or warranties by GenVec hereunder, or (iii) the
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research and development or manufacture by GenVec of any Product Configuration,
Development Candidate and/or Collaboration Product by GenVec or its Affiliates,
except, in each case, to the extent that such Claim arises out of or results
from the negligence or misconduct of a Warner Indemnitee.
18.3 Procedure. A Party or person (the "Indemnitee") that intends to claim
---------
indemnification under this Article 18 shall promptly notify the other Party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its Affiliates, Sublicensees or their
directors, officers, employees, agents or counsel intend to claim such
indemnification, and the Indemnitor shall have the right to participate in, and,
to the extent the Indemnitor so desires, to assume the defense thereof with
counsel chosen by Indemnitor, with consent of Indemnitee, which consent shall
not be unreasonably withheld. The Indemnitee shall not enter into negotiations
or enter into any agreement with respect to the settlement of any Claim without
the prior written approval of the Indemnitor, and the indemnity agreement in
this Article 18 shall not apply to amounts paid in settlement of any loss,
claim, damage, liability or action if such settlement is made without the
consent of the Indemnitor, which consent shall not be withheld unreasonably. The
failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 18. At the Indemnitor's request, the Indemnitee
under this Article 18, and its employees and agents, shall cooperate fully with
the Indemnitor and its legal representatives in the investigation and defense of
any action, claim or liability covered by this indemnification and provide full
information with respect thereto.
18.4 Insurance. During the term of this Agreement, GenVec agrees to
---------
maintain a comprehensive general liability insurance policy providing coverage
in amounts of not less than [*] annual aggregate, and to include Warner as an
additional insured on such insurance policy.
19. TERM AND TERMINATION
19.1 Term. This Agreement shall be effective as of the Effective Date and,
----
unless otherwise terminated earlier pursuant to the other provisions of this
Article 19, shall continue in full force and effect on a Collaboration Product-
by-Collaboration Product and country-by-country basis until the date that
neither Party nor its Affiliates and Sublicensees has any remaining royalty
obligations to the other Party in such country; provided, the provisions of
Section 15.2 shall terminate upon the date that Warner and its Affiliates and
Sublicensees have no further royalties obligations in any country under this
Agreement. Following the expiration of royalty obligations in any country within
the Territory with respect to a particular Collaboration Product or other
product subject to a license granted herein, the Party which has received a
royalty-bearing license therefor shall have a non-exclusive, non-transferable,
fully paid license under the other Party's interest (i) in the non-patented
Background Technology, and (ii) the Know-How within the Collaboration
Technology, solely to commercialize such Collaboration Product in the Field or
such other product in such country, as the case may be.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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19.2 Termination for Cause. Either Party may terminate this Agreement in
---------------------
the event the other Party has materially breached or defaulted in the
performance of any of its obligations hereunder, or under the Stock Purchase
Agreement and such default has continued for [*] after written notice thereof
was provided to the breaching Party by the nonbreaching Party, or if a cure of
such default cannot reasonably be effected within [*] the defaulting Party has
failed to deliver within such period a plan for curing such breach or default
which is reasonably sufficient to effect a cure. Any termination shall become
effective at the end of such [*] unless the breaching Party has cured any such
breach or default prior to the expiration of the [*] or has delivered to the
other Party a plan for curing such breach is reasonably acceptable to the other
Party. Notwithstanding the above, in the case of a failure to pay any amount due
hereunder the period for cure of any such default following notice thereof shall
be [*] and, unless payment is made within such period, the termination shall
become effective at the end of such period.
19.3 Effect of Bankruptcy. If, during the Term of the Research Program,
--------------------
either Party files a voluntary petition in bankruptcy, is adjudicated a
bankrupt, makes a general assignment for the benefit of creditors, admits in
writing that it is insolvent or fails to discharge [*] after an involuntary
petition in bankruptcy filed against it, then the Term of the Research Program
and this Agreement may be immediately terminated by the other Party, with
notice.
19.4 Termination Relating to Competing Products. GenVec may, at its sole
------------------------------------------
discretion, terminate this Agreement with [*] at any time if Warner or its
Affiliates or Sublicensees commercialize or directly or indirectly commence [*]
19.5 Termination of Research Program. If Warner terminates the Research
-------------------------------
Program pursuant to Section 2.4.2 and [*] the Agreement shall terminate
concurrently with the termination of the Research Program.
19.6 Effect of Termination.
---------------------
19.6.1 Accrued Rights and Obligations. Termination of this Agreement
------------------------------
for any reason shall not release any Party hereto from any liability which, at
the time of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination, nor preclude either Party
from pursuing any rights and remedies it may have hereunder or at law or in
equity which accrued or are based upon any event occurring prior to such
termination.
19.6.2 Return of Confidential Information. Upon any termination of
----------------------------------
this Agreement, Warner and GenVec shall promptly return to the other Party all
Confidential Information received from the other Party (except one copy of which
may be retained by legal counsel solely for purposes of monitoring compliance
with the provisions of Article 17 and archival purposes).
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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19.6.3 Stock on Hand. In the event this Agreement is terminated for
-------------
any reason, Warner and its Affiliates and Sublicensees shall have the right in
the Territory to sell the stock of any Collaboration Products then on hand,
subject to Articles 6 and 7 and the other applicable terms of this Agreement.
19.6.4 Licenses.
--------
(a) In the event of a termination of the Research Program
by Warner pursuant to Section 2.4.2, the licenses granted Warner shall remain in
effect, subject to the terms and conditions herein, with respect to all
Collaboration Products for which an IND has been filed by Warner prior to the
effective date of such termination, and Warner will grant GenVec an exclusive
(even as to Warner), worldwide, fully-paid, perpetual license (with the right to
sublicense) under Warner's interest in any Collaboration Technology jointly
owned by Warner and GenVec necessary or useful to make, have made, use, import,
offer for sale, and sell Collaboration Products, subject to Article 15, for
indications other than those which Warner retains rights hereunder, and products
other than Collaboration Products.
(b) Subject to Section 19.6.4(e) below, in the event of any
termination of this Agreement pursuant to Section 19.2 or 19.4, the licenses
granted in Article 5 shall terminate concurrently.
(c) In the event of any termination by Warner pursuant to
Section 19.3, the licenses granted to GenVec in Sections 2.4.2(d), 5.2 and 5.5
shall terminate concurrently.
(d) In the event of any termination of this Agreement
pursuant to Section 19.5 or in the event of any termination of this Agreement by
GenVec pursuant to Section 19.3, the licenses granted to Warner shall terminate
concurrently.
(e) If more than one Collaboration Product is being
commercially developed or exploited by Warner or its Affiliates and Sublicensees
hereunder, and GenVec terminates this Agreement pursuant to Section 19.2 due to
a breach relating only to a single Collaboration Product, or pursuant to Section
19.4 due to a particular competing product, then GenVec shall be entitled to
terminate this Agreement only with respect to the applicable Collaboration
Product.
(f) Except as expressly provided in this Section 19.6.4, in
the event of any termination of this Agreement the licenses granted pursuant to
Sections 2.4.2(d), 2.5.4(a), 4.8.3(a) and 8.2.5(a) shall remain in effect.
(g) In the event that GenVec breaches this Agreement by
commercializing, directly or indirectly, a product within the scope of Section
15.2, then GenVec's right to use the Data Package under Section 12.4 shall
terminate only with respect to such product, on a product-by-product basis. It
is understood and agreed that nothing contained in this Section shall prevent
GenVec from continued use of the Data Package for or with respect to products
not subject to the foregoing sentence of this Section 19.6.4(g).
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19.7 Survival. Sections 2.2.1, 2.3.1, 2.3.3, 2.5.4(b) and (c), 4.8.3(b)
--------
and (c), 4.8.4, 5.7 -5.9, 6.7, 7.5, 8.2.5(b) and (c), 10.3, 12.1 - 12.4, 14.1,
14.3, 14.4.3, 14.6, 15.1, 19.6 and 19.7, and Article 7 (until all royalty and
reporting obligations relating to the period prior to the date of expiration or
termination have been satisfied) and Articles 17, 18, 20 and 21 shall survive
the expiration or termination of this Agreement for any reason.
20. DISPUTE RESOLUTION
20.1 Mediation. If a dispute arises out of or relates to this
---------
Agreement, or the breach thereof, and if said dispute cannot be settled through
negotiation, the Parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association, before resorting to arbitration, litigation, or some other dispute
resolution procedure.
20.2 Venue. The exclusive venue of any dispute arising out of or in
-----
connection with the performance of or any breach of this Agreement, shall be the
state courts or U.S. district court located in or for GenVec's principal place
of business, and the Parties hereby irrevocably consent to the personal
jurisdiction of such courts.
21. MISCELLANEOUS
21.1 Governing Law. This Agreement and any dispute arising from the
-------------
performance or any breach hereof shall be governed by and construed in
accordance with the laws of the State of Maryland, without reference to
conflicts of laws principles.
21.2 Waiver. No failure on the part of GenVec or Warner to exercise and
------
no delay in exercising any right under this Agreement, or provided by statute or
at law or in equity or otherwise, shall impair, prejudice or constitute a waiver
of any such right, nor shall any partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right.
[*]
21.4 Notices. All notices, requests and other communications hereunder
-------
shall be in writing and shall be personally delivered or sent by nationally
recognized overnight express delivery service, registered or certified mail,
return receipt requested, postage prepaid, in each case to the respective
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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address specified below, or such other address as may be specified in writing to
the other Parties hereto:
WARNER: Warner-Lambert Company
2800 Plymouth Road
Ann Arbor, Michigan 48105
Attn: Vice President & Chairman
Parke-Davis Pharmaceutical Research
with a copy to:
Warner-Lambert Company
201 Tabor Road
Morris Plains, New Jersey 07950
Attn: Vice President, General Counsel
GENVEC: GenVec, Inc.
12111 Parklawn Drive
Rockville, Maryland 20852
Attn: President
with a copy to: Vice President, Corporate Development
21.5 Performance Warranty. Each Party hereby warrants and guarantees the
--------------------
performance of any and all rights and obligations of this Agreement by its
Affiliate(s) and Sublicensees.
21.6 Force Majeure. Neither Party shall be liable to the other for
-------------
failure or delay in the performance of any of its obligations under this
Agreement for the time and to the extent such failure or delay is caused by
earthquake, riot, civil commotion, war, hostilities between nations,
governmental law, order or regulation, embargo, action by the government or any
agency thereof, act of God, storm, fire, accident, labor dispute or strike,
sabotage, explosion or other similar or different contingencies, in each case,
beyond the reasonable control of the respective Party. The Party affected by
Force Majeure shall provide the other Party with full particulars thereof as
soon as it becomes aware of the same (including its best estimate of the likely
extent and duration of the interference with its activities), and will use its
best endeavors to overcome the difficulties created thereby and to resume
performance of its obligations as soon as practicable. If the performance of any
obligation under this Agreement is delayed owing to a force majeure for any
continuous period of more than six (6) months, the Parties hereto shall consult
with respect to an equitable solution, including the possible termination of
this Agreement.
21.7 Independent Contractors. It is understood that both Parties hereto
-----------------------
are independent contractors and are engaged in the operation of their own
respective businesses, and neither Party hereto is to be considered the agent or
partner of the other Party for any purpose whatsoever. Neither Party has any
authority to enter into any contracts or assume any obligations for the other
Party or make any warranties or representations on behalf of the other Party.
GenVec acknowledges that neither it nor any of its employees are employees of
Warner or members of any of its benefit plans and that neither it nor any of its
employees are eligible to participate in any such benefit plans even if
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it is later determined that its or any of its employees' status during the
period of this Agreement was that of an employee of Warner. In addition, GenVec
waives any claim that it may have under the terms of any such benefit plans or
under any law for participation in or benefits under any of Warner's benefit
plans.
21.8 Advice of Counsel. GenVec and Warner have each consulted counsel of
-----------------
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one Party or another
and will be construed accordingly.
21.9 Severability. In the event that any provisions of this Agreement are
------------
determined to be invalid or unenforceable by a court of competent jurisdiction,
the remainder of the Agreement shall remain in full force and effect without
said provision. The Parties shall in good faith negotiate a substitute clause
for any provision declared invalid or unenforceable, which shall most nearly
approximate the intent of the Parties in entering this Agreement; provided, if
the Parties are unable to agree on such a substitute clause and the deletion of
the provision held invalid or unenforceable would produce material adverse
financial consequences for one Party, such Party shall have the right to
terminate the Agreement with [*] notice.
21.10 Patent Marking. Each Party agrees to mark and have its Affiliates
--------------
and Sublicensees mark all Collaboration Products they sell or distribute
pursuant to this Agreement in accordance with the applicable statute or
regulations in the country or countries of manufacture and sale thereof.
21.11 Further Assurances. At any time or from time to time on and after
------------------
the date of this Agreement, either Party shall at the request of the other Party
(i) deliver to the requesting Party such records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
assignment, transfer or license, and (iii) take or cause to be taken all such
actions, as the requesting Party may reasonably deem necessary or desirable in
order for the requesting Party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.
21.12 Compliance with Laws. Each party shall furnish to the other Party
--------------------
any information requested or required by that Party during the term of this
Agreement or any extensions hereof to enable that Party to comply with the
requirements of any U.S. or foreign federal, state and/or government agency.
Each Party shall comply with all applicable U.S., foreign, state, regional and
local laws, rules and regulations relating to its activities to be performed
pursuant to this Agreement, including without limitation, the United States
Foreign Corrupt Practices Act, United States export regulations and such other
United States and foreign laws and regulations as may be applicable, and to
obtaining all necessary approvals, consents and permits required by the
applicable agencies of the government of the United States and foreign
jurisdictions.
21.13 No Implied Licenses or Warranties. No right or license under any
---------------------------------
patent application, issued patent, know-how or other proprietary information is
granted or shall be granted by implication. All such rights or licenses are or
shall be granted only as expressly provided in the terms of this Agreement.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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21.14 Entire Agreement. This Agreement together with the attached
----------------
Exhibits, and the Stock Purchase Agreement entered by the Parties of even date
herewith, constitute the entire agreement, both written or oral, with respect to
the subject matter hereof, and supersede all prior or contemporaneous
understandings or agreements, whether written or oral, between Warner and GenVec
with respect to such subject matter.
21.15 Headings. The captions to the several Sections and Articles hereof
--------
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.
21.16 Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed an original and which together shall constitute
one instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the Effective Date.
WARNER-LAMBERT COMPANY GENVEC, INC.
By: ____________________________ By: ____________________________
Name: __________________________ Name: __________________________
Title: _________________________ Title: _________________________
Exhibits:
A: Excluded Countries (1.48)
B: Co-Promotion Guidelines (9)
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EXHIBIT A
COUNTRIES EXCLUDED FROM THE TERRITORY
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
EXHIBIT B
CO-PROMOTION PRINCIPLES
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
EXHIBIT 10.6
STOCK PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of the 21st day of
July, 1997, by and between GENVEC, INC., a Delaware corporation, with its
principal place of business at 12111 Parklawn Drive, Rockville, Maryland 20852
(the "Company"), and WARNER-LAMBERT COMPANY, a Delaware corporation, with its
principal place of business at 201 Tabor Road, Morris Plains, New Jersey 07950
(the "Investor"), with reference to the following recitals:
WHEREAS, the Company and the Investor have entered into a Research,
Development and Collaboration Agreement, dated as of the date hereof (the
"Collaboration Agreement"), pursuant to which the Company and the Investor have
agreed to enter into a collaborative effort, as defined in the Collaboration
Agreement (the "Collaboration"), and have established a framework for their
collaboration, as described in the Collaboration Agreement; and
WHEREAS, the Investor agrees to purchase certain shares of the capital
stock of the Company on and pursuant to the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements, undertakings and
covenants set forth in this Agreement and in the Collaboration Agreement, and
for other good and valuable consideration, the receipt, sufficiency and adequacy
of which are hereby acknowledged, the parties, intending to be legally bound,
hereby agree as follows:
1. Definitions. For purposes of this Agreement the following terms shall
-----------
have the meanings ascribed to them in this Section 1 except as otherwise
expressly indicated or limited by the context in which they appear in this
Agreement. All terms defined in Section 1 or in the Preamble to this Agreement
in the singular form shall have the same meaning when used in the plural form
and vice versa.
(a) "Affiliate" shall mean a person or entity that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the person or entity specified.
(b) "Aggregate Purchase Price" shall mean, in each instance of a
Tranche Event (as defined below), the cash consideration as specified by the
Company in a Sale Notice (as defined below) or Amended Sale Notice (as defined
below) to be paid by the Investor for the Securities [*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE>
(c) "Amended Sale Notice" shall mean the written notice given under
certain circumstances by the Company to the Investor in accordance with Section
2(b)(i)(C) of this Agreement that (i) indicates that the Investor must acquire
Securities in accordance with this Agreement and (ii) provides the information
set forth in Section 2(b)(i)(C) hereof, as appropriate.
(d) "Bylaws" shall mean the Company's Amended and Restated By-Laws as
set forth in Exhibit B hereto, as amended from time to time.
(e) "Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day when the banking institutions in Maryland
are authorized or obligated by law or proclamation to close or be closed.
(f) "CAD" shall have the meaning ascribed thereto in the Collaboration
Agreement.
(g) "CAD Milestone I" shall mean with respect to a Collaboration
Product (as defined below) for the treatment of CAD, the enrollment of the first
human patient in a clinical trial.
(h) "CAD Milestone II" shall mean with respect to a Collaboration
Product (as defined below) for the treatment of CAD the earliest of: (x) [*]
determined by the Executive Committee (as defined below), of the [*] (as defined
in the Collaboration Agreement) [*], (y) [*]
(i) "Charter" shall mean the Company's Restated Certificate of
Incorporation as set forth in Exhibit A hereto, as amended from time to time.
(j) "Class A Preferred Stock" shall mean the Company's Class A
Convertible Preferred Stock, par value $.01 per share.
(k) "Class B Preferred Stock" shall mean the Company's Class B
Convertible Preferred Stock, par value $.01 per share.
(l) "Class C Preferred Stock" shall mean the Company's Class C
Convertible Preferred Stock, par value $.01 per share, and the shares of Common
Stock (as defined below) that have been issued upon conversion of the Class C
Preferred Stock.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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(m) "Class D Preferred Stock" shall mean the Company's Class D
Convertible Preferred Stock, par value $.01 per share.
(n) "Collaboration Product" shall have the meaning ascribed thereto in
the Collaboration Agreement.
(o) "Commission" shall mean the United States Securities and Exchange
Commission.
(p) "Common Stock" shall mean the Company's common stock, par value
$.01 per share, or any common stock issued by the Company in exchange for such
Common Stock.
(q) "Executive Committee" shall have the meaning ascribed thereto in
the Collaboration Agreement.
(r) "Fair Market Value" shall mean, if the Company has sold shares of
Common Stock in an IPO (as defined below), the average of the daily closing bid
and ask prices for a share of the Common Stock for the Trading Period (as
defined below) on the principal national securities exchange or quotation system
on which the Common Stock is listed or quoted. "Fair Market Value" shall mean,
if the closing bid and ask prices of a share of Common Stock are not so listed
or quoted or if the Company has not sold shares of Common Stock in an IPO, the
fair market value of a share of Common Stock or Preferred Stock (as defined
below), respectively, as reasonably determined by the Company's board of
directors on a date no more than fifteen (15) Business Days prior to the date
that the applicable Sale Notice or Amended Sale Notice is to be sent to the
Investor. The Company will provide to the Investor notice of the Fair Market
Value no less than ten (10) Business Days prior to the date the applicable Sale
Notice is to be sent to the Investor. If the Investor disagrees with the
board's determination of the Fair Market Value, it must provide to the Company
notice within five (5) Business Days of receiving the Company's notice of the
Fair Market Value that the Investor disagrees with the board's determination of
the Fair Market Value in which case the Fair Market Value shall be determined by
an appraiser that is selected and paid for by the Company and is reasonably
acceptable to the Investor. The Fair Market Value will then be the amount
determined by the appraiser as of the same date as of which the Company's board
of directors determined the Fair Market Value with which the Investor disagreed.
(s) "GAAP" shall mean generally accepted accounting principles in the
United States.
(t) "Investment Company Act" shall mean the Investment Company Act of
1940, as amended.
(u) "IPO" shall mean an initial underwritten public offering of shares
of Common Stock through the registration of the shares on a registration
statement filed under the Securities Act (as defined below).
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(v) [*]
(w) "Manufacturing Milestone" [*]
(x) "Original Registration Stock" shall mean the shares of the Class A
Preferred Stock and the Class B Preferred Stock, the shares of Common Stock that
have been issued upon conversion of the Class A Preferred Stock and the Class B
Preferred Stock, and any shares of Common Stock or other securities issued in
respect of any such securities upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event.
(y) "Other Shares" shall mean the issued and outstanding shares of
Common Stock proposed to be included in the Piggyback Registration Statement (as
defined below) and held by holders of shares other than the Investor and holders
of any of the Original Registration Stock, the Class C Preferred Stock, and the
Warrant Shares (as defined below).
(z) "PVD" shall have the meaning ascribed thereto in the Collaboration
Agreement.
(aa) "[*] Milestone" shall mean with respect to a Collaboration
Product for the [*]
(bb) "Piggyback Registration Statement" shall have the meaning
ascribed thereto in Section 8(a) herein.
(cc) "Preferred Stock" shall mean shares of any of one or more series
of convertible preferred stock which the Company's board of directors shall
authorize for issuance pursuant to the terms of this Agreement and which the
Investor must purchase pursuant to this Agreement. Each share of Preferred
Stock shall have the designations, limitations and rights specified in
subsections
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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B(l), (2)(a) and (4) of Article Ninth of the Charter. Each share of Preferred
Stock (i) shall be entitled to liquidation rights pursuant to the provisions of
B(3) of Article Ninth of the Charter except that the Liquidation Preference (as
defined in the Charter) of the Preferred Stock shall be the same as the purchase
price and (ii) shall be convertible at the option of the Investor pursuant to
the provisions of subsection B(5)(b) of Article Ninth of the Charter into shares
of the Common Stock of the Company at a rate of one share of Common Stock for
each share of Preferred Stock, subject to adjustment pursuant to the provisions
of subsection B(5)(d)(iv) and (v) of Article Ninth of the Charter, provided,
however, that such conversion shall be mandatory upon an IPO pursuant to the
provisions of subsection (B)(6) of Article Ninth of the Charter.
(dd) "Restriction Period" shall mean the period commencing on the date
the Company sells Common Stock in an IPO and ending one year after the Company
receives notice from the Investor or otherwise becomes aware of the occurrence
of (i) all of the Tranche Events or (ii) the Tranche Event that is the last of
the Tranche Events that is reasonably likely to occur, as mutually agreed to by
the Investor and the Company.
(ee) "Sale Notice" shall mean the written notice given by the Company
to the Investor that (i) indicates that the Investor must acquire Securities in
accordance with this Agreement and (ii) provides the information set forth in
Section 2(a) or 2(b) hereof, as appropriate.
(ff) "Security" shall mean a share of Common Stock or Preferred Stock
issued by the Company to the Investor pursuant to this Agreement.
(gg) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(hh) "Selling Stockholders" shall mean the holders of shares of Common
Stock which seek to have their shares registered for sale on a registration
statement.
(ii) "Subsidiary" shall mean any corporation the majority of the
voting capital stock of which is owned directly or indirectly beneficially or of
record by the Company or the Investor, as applicable.
(jj) "Term of the Research Program" shall have the meaning ascribed
thereto in the Collaboration Agreement.
(kk) "[*] Milestone" shall mean the first indication [*]
(ll) "Trading Period" shall mean the twenty (20) consecutive trading
days ending one Business Day prior to the Business Day on which the Investor
must pay the Aggregate Purchase Price for the shares of Common Stock being sold.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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(mm) "Tranche Event" shall mean each of the events specified below.
The occurrence of each Tranche Event, independently and without regard to
whether any one of the other Tranche Events has or has not occurred, entitles
the Company to sell Securities to the Investor for the Aggregate Purchase Price,
provided that, [*]
(1) CAD Milestone I;
(2) CAD Milestone II;
(3) An IPO;
(4) [*] Milestone;
(5) [*] Milestone; and
(6) Manufacturing Milestone.
(nn) "Transfer" or "Transferred" shall mean to sell, assign, pledge,
hypothecate, encumber or in any other manner transfer or dispose of or to have
sold, assigned, pledged, hypothecated, encumbered or in any other manner
transferred or disposed of
(oo) "Transferee" shall mean a person or entity to which this
Agreement or the Securities are Transferred.
(pp) "Warrant Shares" shall mean any shares of Common Stock acquired
by Scios Inc. pursuant to the Warrant Agreement entered into by the Company with
Scios Inc. as of May 31, 1996
2. Purchase of Stock. As set forth below, the Investor agrees to
-----------------
purchase Securities issued by the Company for an aggregate amount not to exceed
Twenty-Five Million Dollars ($25,000,000) subject to the terms and conditions
contained in this Agreement. Such purchase will be made in up to six (6)
separate transactions with each such transaction occurring simultaneously with
or after the occurrence of a Tranche Event and after receipt by the Investor of
a Sale Notice for each such purchase. The Investor agrees to purchase shares of
Common Stock at the time the Company sells shares of Common Stock in an IPO and,
thereafter, after the occurrence of each of the other Tranche Events. Prior to
the sale of shares of Common Stock in an IPO, the Investor agrees to purchase
shares of Preferred Stock after each Tranche Event. The Company's right to sell
Securities and the Investor's obligation to purchase Securities are subject to
the right of the Investor to refuse to acquire any portion of the Securities
specified in the Sale Notice, if, at the time of such acquisition, and after
taking into account the conversion into shares of Common Stock of any and all
outstanding
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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shares of the Company's preferred stock and the shares of Preferred Stock
specified in the Sale Notice, the purchase of such portion of Securities would
result in the Investor owning twenty percent (20%) or more of the outstanding
shares of Common Stock and the shares of Common Stock into which the Company's
outstanding shares of preferred stock and the shares of Preferred Stock
specified in the Sale Notice are convertible.
(a) Purchase of Common Stock Upon an IPO. If the Company intends to
------------------------------------
sell shares of Common Stock to the Investor at the time of the sale of shares of
Common Stock in an IPO, at least thirty (30) days before the effectiveness of
the registration statement filed under the Securities Act in connection with the
IPO, the Company will provide a Sale Notice to the Investor to inform the
Investor that it must purchase shares of Common Stock in accordance with this
Agreement.
(i) The Sale Notice will advise the Investor of the Aggregate
Purchase Price and the estimated range of prices at which the shares of Common
Stock may be sold in the IPO. The Investor agrees to pay a purchase price for
each share of Common Stock equal to one-hundred twenty-five percent (125%) of
the price at which a share of Common Stock is sold to the public in the IPO. The
number of shares of Common Stock that the Investor will purchase will equal the
Aggregate Purchase Price divided by the product of 1.25 times the price at which
a share of Common Stock is sold to the public in the IPO, rounded down, if
necessary, to the next whole number of shares. The Aggregate Purchase Price
shall be reduced by the purchase price of the fractional share not issued.
(ii) The purchase and sale of the shares of Common Stock shall
take place simultaneously with the closing of the IPO or on a Business Day no
more than one full Business Day after the closing of the IPO. The Investor
shall deliver the payment for the shares of Common Stock by a wire transfer of
immediately available funds or by a certified bank check payable to the order of
the Company in the amount of the Aggregate Purchase Price. Upon receipt of such
payment by the Company, the Investor will be deemed to be the holder of record
of the shares of Common Stock and the Company will promptly execute and provide
to the Investor a certificate or certificates evidencing issuance to the
Investor of the appropriate number of fully-paid and non-assessable shares of
Common Stock purchased. The Company and the Investor shall comply with the
conditions to the sale set forth in Sections 9 and 10 hereof.
(iii) The Company agrees to advise the Investor periodically as to
the expected timing of the closing of the IPO. If shares of Common Stock are
not sold in the IPO with respect to which the Sale Notice is given, the Company
shall continue to have the right to provide a Sale Notice and sell shares of the
Common Stock pursuant to this Section 2(a) in connection with any future IPO.
(b) Purchase of Securities Upon the Occurrence of A Tranche Event
-------------------------------------------------------------
Other than an IPO. If the Company intends to sell Securities after the
- -----------------
occurrence of a Tranche Event other than an IPO, the Company will provide a Sale
Notice to the Investor to inform the Investor that it must
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<PAGE>
acquire the Securities in accordance with this Agreement. The Sale Notice will
advise the Investor to purchase shares of either Common Stock or Preferred Stock
as set forth below.
(i) Purchase of Securities Before an IPO.
------------------------------------
(A) The Sale Notice will be sent to the Investor no more than
ninety (90) days after the Company receives notice from the Investor or
otherwise becomes aware of the occurrence of a Tranche Event that occurs before
the sale of shares of Common Stock in an IPO, or such longer period of time to
enable the Company to obtain an appraisal of the Fair Market Value of the
Preferred Stock, if required. The Sale Notice will advise the Investor of the
number of shares of Preferred Stock that the Company has determined to sell to
the Investor, the Fair Market Value of each such share of Preferred Stock, the
purchase price for each such share of Preferred Stock and the Aggregate Purchase
Price. The Investor agrees to pay a purchase price for each share of Preferred
Stock equal to one-hundred twenty-five percent (125%) of the Fair Market Value
of a share of such Preferred Stock. Within [*] of the Investor's receipt of the
Sale Notice, the Investor shall deliver the payment for such shares of Preferred
Stock by a wire transfer of immediately available funds or by a certified bank
check payable to the order of the Company in the amount of the Aggregate
Purchase Price. Upon receipt of such payment by the Company on a Business Day,
the Investor will be deemed to be the holder of record of such shares of
Preferred Stock and the Company will promptly execute and provide to the
Investor a certificate or certificates evidencing issuance to the Investor of
the appropriate number of fully-paid and non-assessable shares of such Preferred
Stock. The Company and the Investor shall comply with the conditions to the sale
set forth in Sections 9 and 10 hereof.
(B) Notwithstanding paragraph (A) of this Section 2(b)(i), if
the Company sends a Sale Notice in connection with a Tranche Event other than an
IPO after it has filed a registration statement for an IPO which is being
reviewed by the Commission, the Sale Notice shall advise the Investor that the
Investor will purchase shares of Common Stock and will specify the Aggregate
Purchase Price and the estimated range of prices at which such shares of Common
Stock may be sold in the IPO. The Investor agrees to pay a purchase price for
each share of Common Stock equal to one-hundred twenty-five percent (125%) of
the price at which a share of Common Stock is sold to the public in the IPO. The
number of shares of Common Stock that the Investor will purchase will equal the
Aggregate Purchase Price divided by the product of 1.25 times the price at which
a share of Common Stock is sold to the public in the IPO, rounded down, if
necessary, to the next whole number of shares. The Aggregate Purchase Price
shall be reduced by the purchase price of the fractional share not issued. The
purchase and sale of the shares of Common Stock shall take place simultaneously
with the closing of the IPO or on a Business Day no more than one full Business
Day after the closing of the IPO. The Investor shall deliver the payment for the
shares of Common Stock by a wire transfer of immediately available funds or by a
certified bank check payable to the order of the Company in the amount of the
Aggregate Purchase Price. Upon receipt of such payment by the Company, the
Investor will be deemed to be the holder of record of the shares of Common Stock
and the Company will promptly execute and provide to the Investor a certificate
or certificates evidencing issuance to the Investor of the appropriate number of
fully-paid and non-assessable shares
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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of Common Stock. The Company and the Investor shall comply with the conditions
to the sale set forth in Sections 9 and 10 hereof.
(C) If the Company has sent a Sale Notice pursuant to
paragraph (B) of this Section 2(b)(i), the Company agrees to advise the Investor
periodically as to the expected timing of the closing of the IPO. If at any time
the Company reasonably believes that shares of Common Stock will not be sold in
an IPO within the next thirty (30) days, the Company may send to the Investor an
Amended Sale Notice which will supersede the Sale Notice delivered under
2(b)(i)(B). Such Amended Sale Notice shall advise the Investor of the number of
shares of Preferred Stock that the Company has determined to sell to the
Investor, the Fair Market Value of each such share of Preferred Stock, the
purchase price for each such share of Preferred Stock and the Aggregate Purchase
Price. The Investor agrees to pay a purchase price for each share of Preferred
Stock equal to one-hundred twenty-five percent (125%) of the Fair Market Value
of a share of such Preferred Stock within thirty [*] of the Investors
receipt of the Amended Sale Notice. The Investor shall deliver the payment for
such shares of Preferred Stock by a wire transfer of immediately available funds
or by a certified bank check payable to the order of the Company in the amount
of the Aggregate Purchase Price. Upon receipt of such payment by the Company on
a Business Day, the Investor will be deemed to be the holder of record of such
shares of Preferred Stock and the Company will promptly execute and provide to
the Investor a certificate or certificates evidencing issuance to the Investor
of the appropriate number of fully-paid and non-assessable shares of such
Preferred Stock. The Company and the Investor shall comply with the conditions
to the sale set forth in Sections 9 and 10 hereof.
(ii) Purchase of Common Stock After an IPO.
-------------------------------------
(A) The Sale Notice relating to a Tranche Event that occurs
after an IPO will be sent to the Investor no sooner than [*] and no later than
[*] after the issuance of an announcement, a press release or other publicity
regarding the occurrence of the related Tranche Event or twenty-five (25)
Business Days after the Investor has reasonably withheld consent to the issuance
of the announcement, the press release or the other publicity regarding the
occurrence of the Tranche Event. The Sale Notice will advise the investor that
it must purchase shares of Common Stock in accordance with this Agreement, that
the Fair Market Value will be determined based upon the Trading Period beginning
on the specific date that was ten (10) Business Days prior to the date of the
Sale Notice and that the Investor must pay the Aggregate Purchase Price on the
tenth (10th) Business Day after the date of the Sale Notice. The Investor agrees
to pay a purchase price for each share of Common Stock equal to one-hundred
twenty-five percent (125%) of the Fair Market Value of a share of Common Stock.
The number of shares of Common Stock that the investor will purchase will equal
the Aggregate Purchase Price divided by the product of 1.25 times the Fair
Market Value of a share of Common Stock, rounded down, if necessary, to the next
whole number of shares.
(B) On the tenth (10th) Business Day after the date of the
Sale Notice the Investor shall deliver the payment for the shares of Common
Stock by a wire transfer of immediately available funds or by a certified bank
check payable to the order of the Company in the
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
amount of the Aggregate Purchase Price. Upon receipt of such payment by the
Company, the Investor will be deemed to be the holder of record of the shares of
Common Stock and the Company will promptly execute and provide to the Investor a
certificate or certificates evidencing issuance to the Investor of the
appropriate number of fully-paid and non-assessable shares of Common Stock. In
addition, the Company will advise the Investor of the calculation of the Fair
Market Value of each share of Common Stock, the purchase price paid by the
Investor for each such share of Common Stock and the number of shares of Common
Stock that the Investor has purchased and will remit to the Investor the
difference, if any, between the Aggregate Purchase Price and the product of the
purchase price for each share of Common Stock purchased by the Investor under
this Section 2(b)(ii)(A) multiplied by the number of shares of Common Stock
purchased by the Investor. The Company and the Investor shall comply with the
conditions to the sale set forth in Sections 9 and 10 hereof.
(c) Nonperformance by the Investor. Any failure by the Investor to
------------------------------
acquire the Securities in compliance with the provisions of this Agreement,
including as a result of any failure of the Investor to satisfy the conditions
of Section 10 hereof, but excluding as a result of any failure of the Company to
satisfy the conditions of Section 9 hereof, may result in a termination of the
Collaboration Agreement in accordance with Section 19.2 of the Collaboration
Agreement; provided that no such termination shall occur if the Investor's
failure to pay for the Securities in accordance with the Agreement is caused by
a circumstance outside of the control of the Investor and the Investor's payment
for the Securities is delivered as soon as practicable but no later than twenty
(20) Business Days, or a period of time that is otherwise reasonably agreed to
by the parties, after delivery is required pursuant to this Section 2.
3. Authorization of Securities. At the time the Company provides the
---------------------------
Sale Notice or the Amended Sale Notice to the Investor, the Securities shall be
duly and validly authorized and reserved for issuance.
4. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants that, as of the date of this Agreement:
(a) Corporate Organization. The Company is a corporation duly
----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware, and is duly qualified to conduct its business as a foreign corporation
in all jurisdictions where the failure to be so qualified would have an adverse
effect on the Company or its business.
(b) Corporate Authority. The Company has all necessary corporate power
-------------------
to execute, deliver and perform this Agreement subject to, in each instance, the
due authorization of the issuance of the Securities and the taking of all
required steps to effect the same.
(c) Capitalization. The Company's authorized capital stock consists
--------------
of (i) 52,005,095 shares of Common Stock, 5,672,475 of which are outstanding;
(ii) 1,334,000 shares of Class A Preferred Stock, 1,334,000 of which are
outstanding; (iii) 11,800,468 shares of Class B Preferred Stock, 11,320,314 of
which are outstanding; (iv) 21,065,000 shares of Class C Preferred
-10-
<PAGE>
Stock, 21,065,000 of which are outstanding; and (v) 2,000,000 shares of Class D
Preferred Stock, 571,429 of which are outstanding. All outstanding shares of
capital stock are validly issued and outstanding, fully-paid and non-assessable.
Except as contemplated by this Agreement and as set forth on Schedule 4(c)
hereto, there are no outstanding rights of first refusal, warrants, options,
conversion privileges, preemptive rights, or other rights or agreements to
purchase or otherwise acquire or issue any equity securities of the Company.
(d) Subsidiaries. The Company does not presently own, have any
------------
investment in, or control, directly or indirectly, any Subsidiaries,
corporations, associations or other business entities.
(e) Validity of Securities. The Securities, when issued, sold and
----------------------
delivered in accordance with the terms of this Agreement and for the Aggregate
Purchase Price specified in the applicable Sale Notice or Amended Sale Notice,
shall be duly and validly issued, fully-paid and nonassessable. If the
Securities are shares of Preferred Stock, the Common Stock issuable upon
conversion of such Preferred Stock, in accordance with the Company's Charter,
shall be, upon such issuance, duly and validly issued, fully-paid and non-
assessable.
(f) Financial Statements. The Company has made available to the
--------------------
Investor the Company's audited financial statements for its most recent fiscal
year and unaudited financial statements for its most recent interim period, in
each case, to the extent available. As of the date of this Agreement, the
financial statements provided are attached hereto as Exhibit C. The annual
---------
financial statements have been prepared in accordance with GAAP and the interim
financial statements have been prepared in a manner consistent with the annual
financial statements (subject to normal year-end audit adjustments and the
omission of footnotes required by GAAP).
(g) Agreements; Actions.
-------------------
(i) Schedule 4(g)(i) hereto sets forth a list of agreements and
proposed agreements between the Company and any of its officers, directors,
Affiliates or any Affiliate thereof
(ii) Except as set forth in Schedule 4(g)(ii) hereto, there are
no agreements, instruments or contracts to which the Company is a party or by
which it is bound which involve (A) obligations of, or payments to, the Company
in excess of Two-Hundred Fifty Thousand Dollars ($250,000), (B) the license for
commercial purposes of any patent, copyright, trade secret or other proprietary
rights to or by the Company or (C) any other material agreement.
(iii) Except as set forth in Schedule 4(g)(iii) hereto, the
Company has not (A) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock,
(B) incurred any indebtedness for money borrowed, (C) incurred any other
liabilities individually in excess of One-Hundred Twenty-Five Thousand Dollars
($125,000) or in excess of Two-Hundred Fifty Thousand Dollars ($250,000) in the
aggregate, other than obligations or liabilities of the Company for compensation
under employment, advisor or consulting agreements, (D) made any loans or
advances to any person, other than ordinary
-11-
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advances for travel expenses, (E) sold, exchanged or otherwise disposed of any
of its material assets or rights or (F) agreed to any of the foregoing.
(h) Litigation. To the Company's knowledge, there are neither any
----------
pending nor threatened suits, legal proceedings, claims or governmental
investigations against or with respect to the Company or its properties or
assets, or that question the validity of this Agreement or the right of the
Company to enter into this Agreement. There is no judgment, decree or order of
any court in effect against the Company and the Company is not in default with
respect to any order of any governmental authority to which the Company is a
party or by which it is bound.
(i) No Conflict with other Instruments; Compliance with Laws. Subject
--------------------------------------------------------
to obtaining authorization of the issuance of the Securities and subject to
Section 9 hereof, the execution, delivery and performance of this Agreement will
not result in any material violation of, be in material conflict with, or
constitute a material default under, with or without the passage of time or the
giving of notice (i) any provision of the Charter or the Bylaws; (ii) any
provision of any judgment, decree or order to which the Company is a party or by
which it is bound; (iii) any material contract, obligation or commitment to
which the Company is a party or by which it is bound; or (iv) any material
statute, rule or governmental regulation applicable to the Company. The Company
is conducting its business in compliance with all material statutes, rules and
governmental regulations applicable to the Company, and has obtained all
licenses, permits and other governmental authorizations required thereby, where
the failure to do so would have a material adverse effect on the Company or its
business.
(j) Title to Properties; Liens and Encumbrances. Except as set forth
-------------------------------------------
in the Company's financial statements or Schedule 4(j) hereto, the Company has
good and marketable title to all of its properties and assets, both real and
personal, and has good title to all of its leasehold interests, in each case
subject to no mortgage, pledge, lien, security interest, conditional sale
agreement, encumbrance or charge.
(k) Confidential and Proprietary Information. Each employee of and
----------------------------------------
consultant to the Company with access to confidential or proprietary information
has executed a proprietary information agreement obligating such employee or
consultant to hold all of such information in confidence.
(l) No Defaults; Violations or Conflicts. Except as set forth in
------------------------------------
Schedule 4(l) hereto, the Company is not in violation of any term or provision
of the Charter, the Bylaws, or any term or provision of any document
representing indebtedness or any mortgage, indenture, contract, agreement or
judgment which would have a material adverse effect on the Company or its
business.
(m) Insurance. The Company has in effect insurance covering risks
---------
associated with its business in such amounts as are customary in its industry.
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<PAGE>
(n) Prior Registration Rights. Except as set forth in Schedule 4(n)
-------------------------
hereto, the Company is under no contractual obligation to register under the
Securities Act any of its presently outstanding securities or any shares of
Common Stock into which such securities are convertible.
(o) Full Disclosure. The representations and warranties of the
---------------
Company contained in this Agreement and the answers to the questions provided to
Section 5(b)(i) hereof do not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made herein, in
light of the circumstances under which they were made, not misleading.
(p) Governmental Consents. No consent, approval, order or
---------------------
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for any filing required by
federal or state securities laws and except, under certain circumstances, for
filings and notifications under the Hart-Scott-Rodino Improvements Act of 1976,
as amended, where applicable.
(q) Corporate Documents. The Charter and the Bylaws of the Company in
-------------------
effect as of the date of this Agreement are in the forms attached hereto as
Exhibits A and B, respectively.
5. Representations and Warranties of the Investor. The Investor hereby
----------------------------------------------
represents and warrants that, as of the date of this Agreement:
(a) Authorization. The Investor has all corporate power to enter into
-------------
this Agreement and to carry out all of the transactions contemplated hereby,
including the purchase of Securities for an aggregate amount of [*] and in up to
[*] separate transactions. The execution, delivery and performance of this
Agreement by the Investor and the consummation of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of the Investor. This Agreement constitutes a valid and binding instrument of
the Investor, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(b) Securities Representations. The Investor will acquire the
--------------------------
Securities for purposes of investment for its own account and not with a view
to, or for resale in connection with, the distribution thereof, as those terms
are used in the Securities Act, and the rules and regulations promulgated
thereunder. The Investor has been advised and acknowledges that it will not be
able to dispose of the Securities, or any interest therein, without first
complying with the relevant provisions of this Agreement, the Securities Act and
any applicable state securities laws. The Investor also understands that the
provisions of Rule 144 promulgated under the Securities Act, permitting routine
sales of securities of certain issuers subject to the terms and conditions
thereof, are not currently available to it with respect to the Securities. The
Investor acknowledges that, except as set forth in this Agreement, the Company
is under no obligation to register the Securities or to take any action to
assist the Investor in complying with the terms and conditions of any exemption
that might be
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
available under the Securities Act or any state securities laws with respect to
sales of the Securities by the Investor in the future.
(i) The Investor believes that, as of the date of this Agreement,
it has received all of the information it considers necessary or appropriate for
deciding whether to purchase the Securities. The Investor further represents
that it has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the offering of the Securities
pursuant to this Agreement and the business, properties, prospects and financial
condition of the Company.
(ii) The Investor represents that: (A) the Investor has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of the Investor's prospective investments in the
Securities; (B) the Investor has the ability to bear the economic risk of its
prospective investments; and (C) the Investor is able, without materially
impairing its financial condition, to hold the Securities for an indefinite
period of time and to suffer complete loss on its investments.
(iii) The Investor is an "accredited investor," as that term is
defined in Rule 501 promulgated under the Securities Act.
(iv) The Investor either is (A) not an "Investment Company," as
that term is defined in the Investment Company Act or (B) excluded from the
definition of an Investment Company under Section 3(c)(1) of the Investment
Company Act.
(v) The Investor acknowledges that the representations, agreements
and acknowledgments set forth above are being given by the Investor with the
understanding that they will be relied upon by the Company and its board of
directors to claim the availability of the exemption from the registration
provisions of the Securities Act contained in Section 4(2) thereof or Regulation
D promulgated thereunder.
6. Covenants of the Company. The Company hereby covenants that, so long
------------------------
as (x) the Investor owns any shares of Preferred Stock and (y) the Company has
not consummated an IPO, the Company shall furnish to the Investor the financial
statements and reports described in (a) and (b) of this section, such annual
financial statements to be prepared in accordance with GAAP and such interim
financial statements to be prepared in a manner consistent with the annual
financial statements (subject to normal year-end audit adjustments and the
omission of footnotes required by GAAP):
(a) As soon as available, and in any event within one-hundred twenty
(120) days after the end of each fiscal year of the Company, a balance sheet of
the Company as of the end of such fiscal year and related statements of
operations, stockholders' equity and cash flows for such fiscal year, all in
reasonable detail and setting forth in comparative form the figures as of the
end of and for that fiscal year, which financial statements shall have been
audited; and
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<PAGE>
(b) As soon as available, and in any event within sixty (60) days
after the end of each fiscal quarter of the Company, an unaudited balance sheet
and unaudited statements of operations and cash flows.
7. Covenants of the Investor.
-------------------------
(a) Notification of the Occurrence of a Tranche Event, The Investor
-------------------------------------------------
agrees to promptly notify the Company when it becomes aware of the occurrence of
any Tranche Event other than through the receipt of notice from the Company.
(b) Transfer of Securities.
----------------------
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
[*]
(iii) The Investor agrees to hold the Securities subject to all of
the applicable provisions of the Securities Act and the Charter and the Bylaws
in effect as of the date of this Agreement.
(iv) Until the first approval of a PLA (as defined in the
Collaboration Agreement) by an Agency (as defined in the Collaboration
Agreement) of a Collaboration Product, the Investor shall give the Company
prompt written notice of any proposed Transfer of the Securities and shall not
proceed with any such proposed Transfer unless otherwise permitted under this
Agreement.
(v) The Investor agrees that certificates representing the
Securities issued to it pursuant hereto may bear the following or a similar
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CONTRACTUAL
LIMITATION ON THEIR SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, ENCUMBRANCE,
TRANSFER OR OTHER DISPOSITION DESCRIBED IN THE STOCK PURCHASE AGREEMENT
DATED JULY ___, 1997. IN ADDITION, THE SHARES HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE.
NEITHER THE SHARES NOR ANY INTEREST OR PARTICIPATION IN THE SHARES MAY BE
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER
TRANSFERRED OR DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT, UNLESS, IN THE OPINION
(WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION) OF
COUNSEL SATISFACTORY TO THE CORPORATION, SUCH REGISTRATION IS NOT REQUIRED.
(c) Confidential Information. The Investor's obligations with respect
------------------------
to disclosure of certain information are set forth in Article 17 of the
Collaboration Agreement.
(d) Agreements with Underwriters. In connection with any public
----------------------------
offering of shares of Common Stock, the Investor agrees to enter into a written
agreement with the underwriter(s) if the managing underwriter(s) demands or
requests such an agreement from the Investor and in such form and containing
such provisions as are required by the managing underwriter(s) (except that such
provisions will not be less favorable to the Investor than the provisions of any
agreements entered into by the managing underwriter(s) with other holders of
securities issued by the Company) to preclude the Investor from directly or
indirectly offering to sell, contracting to
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
sell or otherwise disposing of any shares of Common Stock, or any securities
convertible into or exchangeable for shares of Common Stock for a specified
period of time after completion of the public offering.
[*]
8. Registration Rights.
-------------------
(a) Piggyback Registration Rights. Subject to Section 7(b)(i) and
-----------------------------
Section 7(b)(ii) hereof, if the Company plans to file a registration statement
under the Securities Act on a Form S-3 to register any shares of Common Stock
for sale by it in an underwritten public offering during the Restriction Period
or for sale by it (except in connection with any dividend reinvestment plan,
stock option plan stock purchase plan, savings or similar plan) or any of its
stockholders at any time after the end of the Restriction Period other than on a
shelf registration statement (the "Piggyback Registration Statement"), the
Company shall provide to the Investor and any Transferee under Section
7(b)(i)(D) (referred to jointly in this Section 8 as the "Investor") hereof the
right to include the shares of Common Stock acquired under this Agreement on the
Piggyback Registration Statement, if the Investor is the stockholder of record
of the shares of Common Stock at such time and is unable to sell any shares of
Common Stock acquired under this Agreement pursuant to Rule 144(k) (or any
successor rule) under the Securities Act by providing the Investor with at least
twenty (20) days notice prior to the effectiveness of such registration
statement. At the written request of the Investor, given within ten (10) days
after receipt of such notice, the Company will use reasonable efforts to cause
all of the shares of Common Stock for which registration shall have been
requested to be included in the Piggyback Registration Statement.
(b) Demand Registration. If the Investor is unable to sell shares of
-------------------
Common Stork within eighteen (18) months after the end of the Restriction Period
pursuant to Rule 144(k) (or a successor rule) under the Securities Act or on a
Piggyback Registration Statement, the Investor shall have the right to require
the Company to file one registration statement under the Securities Act on a
Form S-3, provided such registration form is available to the Company, to
register shares of Common Stock acquired under this Agreement for sale in a
public offering that is not to be made on a continuous or delayed basis pursuant
to Rule 415 (or a successor rule) under the Securities Act and that is expected
to yield net proceeds to the Investor of at least Five Million Dollars
($5,000,000), as specified in a written notice from the Investor to the Company.
(i) Following the Company's receipt of any notice under this
Section 8(b), the Company shall use its best efforts to register under the
Securities Act, as soon as reasonably
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
practicable, the number of shares of Common Stock specified by the Investor in
such notice (or such lesser number as the managing underwriter(s) in such
offering believes will not unduly jeopardize the success of the offering);
provided, however, that the Company may delay the filing of the registration
statement for as long as
(A) the request for registration pursuant to this Section
8(b) would require the Company to include in the registration statement on the
filing date or on the expected effective date audited financial statements which
are not yet required to be filed with the Commission under the Exchange Act; or
(B) the Company's board of directors reasonably determines
that the disclosure required in the registration statement or the pricing of the
offering would adversely affect the Company or its ability to engage in a
planned registered public offering or in any other planned activity.
(ii) In the event that the Investor makes a demand for
registration as described in this Section 8(b), the Company shall have the right
to register other shares of Common Stock in the registration statement;
provided, however, that such shares shall not be included to the extent provided
- -------- -------
in Section 8(f) below, if applicable, and in all other situations, such shares
(other than the Original Registration Stock) shall not be included to the extent
that the Investor determines in good faith that the inclusion of such shares
will interfere with the successful marketing of the Investor's shares to be
included therein; provided, further, that, if the number of shares to be so
-------- -------
included exceeds the number of the Investor's shares included therein, such
registration shall be deemed to be a registration pursuant to Section 8(a)
hereof.
(iii) The managing underwriter(s) for any underwritten public
offering pursuant to this Section 8(b), shall be mutually acceptable to the
Company and the Investor.
(c) In connection with any registration statement prepared pursuant to
this Section 8:
(i) the Company shall:
(A) use its best efforts to prepare and file with the
Commission the registration statement and use its best efforts to cause such
registration statement to become effective as soon as practicable, provided that
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
Investor, which shall be reasonably acceptable to the Company, and the counsel
selected by any managing underwriter(s) copies of all such documents proposed to
be filed, which documents will be subject to the review of such counsel;
(B) use its best efforts to prepare and file with the
Commission such amendments and supplements to such registration statement as may
be necessary to comply with the provisions of the Securities Act;
-18-
<PAGE>
(C) furnish, or instruct the printer to furnish, to the
Investor such number of copies of the registration statement, each amendment and
supplement thereto, the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as the Investor
may reasonably request in order to facilitate the disposition of the registered
shares of Common Stock;
(D) use its best efforts to register or qualify the
registered shares of Common Stock under such other securities or blue sky laws
of such jurisdictions as the Investor or the managing underwriter(s) in the
offering reasonably deems appropriate, provided that the Company will not be
required to subject itself to taxation in any such jurisdiction, qualify itself
to do business as a foreign corporation in any such jurisdiction, or consent to
general service of process in any such jurisdiction, where it would not
otherwise be so subject, need to be so qualified or need to so consent but for
this requirement;
(E) use its best efforts to cause all of such registered
shares of Common Stock to be listed on each securities exchange on which
securities of the same class as the registered shares of Common Stock are then
listed;
(F) take all actions Customary for such offerings as the
Investor or any managing underwriter(s) reasonably request in order to expedite
or facilitate the disposition of the registered shares of Common Stock being
sold; and
(G) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any security included in such registration statement for sale in any
jurisdiction, use its best efforts promptly to obtain the withdrawal of such
order, and
(ii) the Investor shall be required to furnish the Company with
all relevant information concerning the proposed method of sale of the shares of
Common Stock, and such other information as may be reasonably required by the
Company properly to prepare and file such registration statement in accordance
with applicable provisions of the Securities Act and the rules and regulations
thereunder. Upon request of the Company, such information shall be furnished by
the Investor in writing.
(d) The Investor shall bear all of its expenses in connection with any
registration statement under this Section 8, including the fees and expenses of
its counsel. The Investor shall also bear its pro rata share of all of the
other expenses in connection with the preparation and filing of any registration
statement under this Section 8, any registration or qualification under the
securities laws of states in which the offering will be made under such
registration statement, any filing fee of the National Association of Securities
Dealers, Inc. relating to such offering and any underwriters' or brokers'
commission, provided, however, that the Company shall pay half of the Investor's
pro rata share of such other expenses, except for any brokers' commissions, in
an offering that is not underwritten.
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<PAGE>
(e) In connection with any public underwritten offering in which the
Investor's shares are registered, the Company and the Investor shall enter into
a written agreement with the managing underwriter(s) in such form and containing
such provisions as are customary in the securities business for such an
arrangement between such managing underwriter(s) and companies of the Company's
size and investment stature, including indemnification.
(f) In the event that the proposed offering under this Section 8 is an
offering by the Company that is, in whole or in part, an underwritten public
offering of shares of Common Stock, and the managing underwriter(s) determines
and advises in writing that the inclusion in the underwritten public offering of
all of the shares of Common Stock owned by the Selling Stockholders would
interfere with the successful marketing (including pricing) of the shares, the
number of the Selling Stockholders' shares to be included in such underwritten
public offering shall be reduced, based upon the number of shares requested by
the Selling Stockholders to be registered in such underwritten public offering
first, pro rata among the holders of Other Shares; second, if necessary, by the
Investor's shares of Common Stock; third, if necessary, pro rata, among the
holders of the Class C Preferred Stock and the Warrant Shares; fourth, if
necessary, pro rata among the holders of the Original Registration Stock; and
lastly, if necessary, among the Company's shares requested by the Company to be
registered.
9. Conditions of the Investor's Obligations to Acquire the Securities.
------------------------------------------------------------------
The obligations of the Investor to acquire the Securities in connection with
each Tranche Event are subject to the following, any of which the Investor may
waive in its discretion:
(a) Opinion of Counsel. The Company shall provide to the Investor
------------------
with the Sale Notice or the Amended Sale Notice, as applicable, an opinion of
the Company's counsel, in form and substance reasonably acceptable to the
Investor, that the Securities, when sold and delivered in accordance with this
Agreement, will be duly authorized, validly issued, fully-paid and non-
assessable and, if the Securities are shares of Preferred Stock, the Common
Stock issuable upon conversion of the Preferred Stock, when issued and delivered
upon such conversion in accordance with the Charter, as amended, will be duly
authorized, validly issued, fully-paid and non-assessable.
(b) Representations and Warranties. The Company shall update the
------------------------------
representations and warranties in Section 4 hereof as of the date of the Sale
Notice or the Amended Sale Notice, as applicable.
(c) Securities Laws. The Company shall have complied with the federal
---------------
and state securities laws applicable to the offer and sale of the Securities to
the Investor.
(d) Compliance Certificate. The Company shall have delivered to the
----------------------
Investor a certificate, dated as of the date of the Sale Notice or the Amended
Sale Notice, as applicable, signed by the Company's President, certifying that
the conditions to be performed by the Company set forth in this Section 9 have
been satisfied.
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<PAGE>
(e) Certified Documents. There shall have been delivered to the
-------------------
Investor copies of the Charter and the Bylaws (in each case, as amended or
restated through the date of the Sale Notice), certified by the Secretary of the
Company as complete and correct copies thereof as of the date of the Sale Notice
or the Amended Sale Notice, as applicable.
(f) Court Orders. There shall not be in effect any injunction or
------------
restraining order issued by any court of competent jurisdiction in any action or
proceeding against the consummation of the sale and purchase of the Securities
under this Agreement.
(g) Third Party and Governmental Consents and Approvals. The Company
---------------------------------------------------
shall have obtained any third party and governmental consents and approvals
necessary for the consummation of the transactions contemplated hereby.
10. Conditions of the Company's Issuance of Securities upon Receipt of
------------------------------------------------------------------
Investor's Payment Therefor. The obligations of the Company to issue
- ---------------------------
certificates for the Securities upon receipt of the Aggregate Purchase Price in
connection with each Tranche Event are subject to the following, any of which
the Company may waive in its discretion:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Investor contained in Section 5 shall be true on and as of the
date that payment for the Securities is given to the Company.
(b) Covenants of the Investor. The Investor shall be in compliance
-------------------------
with its covenants in Section 7 hereof.
(c) Third Party and Governmental Consents and Approvals. The Investor
---------------------------------------------------
shall have obtained any third party and governmental consents and approvals
necessary for the consummation of the transactions contemplated hereby.
(d) Compliance Certificates. The Investor shall have delivered to the
-----------------------
Company dated as of the date of the payment of the Aggregate Purchase Price,
signed by an authorized representative of the Investor, certifying that the
conditions set forth in this Section 10 have been satisfied.
11. Post-Sale Covenants of the Company.
----------------------------------
(a) Securities Laws Compliance. The Company shall make any filings
--------------------------
required by the securities laws of any applicable jurisdiction within the
required time period.
(b) Confidential and Proprietary Information. Unless otherwise
----------------------------------------
determined by the board of directors, the Company shall require all future
officers, directors and employees of the Company and its Subsidiaries to execute
the Company's standard form of proprietary information agreement.
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<PAGE>
12. Termination and Survival.
------------------------
This Agreement shall terminate upon a termination of the Collaboration
Agreement. Sections 7, 12 and 13(f) of this Agreement shall survive any
termination of this Agreement which results from a termination of the
Collaboration Agreement by the Company for cause pursuant to Section 19.2 of the
Collaboration Agreement as a result of actions taken by the Investor. If the
Collaboration Agreement shall be terminated for any other reason, Sections
7(b)(iii), 7(b)(iv), 7(b)(v), 7(c), 7(d), 8(a), 8(c), 8(d), 8(e), 9(c), 11(a),
12 and 13(f) of this Agreement shall survive such termination.
13. Miscellaneous.
-------------
(a) Existing Ownership of Common Stock and Class B Preferred Stock.
--------------------------------------------------------------
The parties acknowledge and agree that the shares of Common Stock and Class B
Preferred Stock, and the right to acquire shares of Common Stock upon the
conversion of such Class B Preferred Stock, owned by the Investor as of the date
of this Agreement, and any other rights arising as a result of such ownership of
shares of Common Stock or Class B Preferred Stock, are not subject to this
Agreement.
(b) Amendments and Waivers. Except as otherwise provided in this
----------------------
Agreement, any provision hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the Company and the Investor. Any
change, waiver, discharge or termination effected in accordance with this
subsection shall be binding upon the Company and the Investor and upon any
Transferee to which this Agreement or the Securities are Transferred pursuant to
Section 13(d) hereof or Section 7(b) of this Agreement, respectively.
(c) Necessary Action to Effect the Agreement. The parties agree to
----------------------------------------
take all necessary action to effect the transactions contemplated by this
Agreement including making all of the required filings and notifications under
the Hart-Scott-Rodino Improvements Act of 1976, as amended, if applicable, and
any other required filings or notices with other governmental agencies Each
party will bear its own expenses associated with any such filings and
notifications.
(d) Transferability. Neither the Investor nor the Company may
---------------
Transfer this Agreement, or any of the rights or obligations hereunder, unless
it is Transferred to the purchaser of all of the outstanding capital stock of
the entity or all or substantially all of the assets of the entity, including
every right and interest such entity may have in the Collaboration Agreement.
The Investor and the Company further agree that, prior to any Transfer of this
Agreement in accordance with this Section 13(d), the Investor or the Company, as
applicable, will give written notice to the other party. This Agreement will be
binding upon any Transferees to which this Agreement is Transferred.
(e) Publicity. The parties agree to cooperate with respect to the
---------
issuance of any publicity about the occurrence of a Tranche Event. Within five
(5) Business Days after the Company receives notice from the Investor or
otherwise becomes aware of the occurrence of a Tranche Event, the Company shall
give notice to the Investor of a request for the consent of the Investor to an
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<PAGE>
announcement, press release or other publicity about the occurrence of a Tranche
Event. The Investor shall advise the Investor whether it consents to the
requested disclosure, which consent may not be unreasonably withheld, within
five (5) Business Days after its receipt of the notice. Notwithstanding the
Investors' failure to consent, the Company shall have the right to announce,
issue a press release or otherwise publicize the occurrence of a Tranche Event
to the extent necessary to comply with securities laws or listing or similar
requirements. Once the Investor has consented to an announcement, press release
or other publicity of the occurrence of a Tranche Event, the announcement, press
release or other publicity must be issued within ten (10) Business Days of such
consent unless otherwise agreed to by the parties and either party may make
disclosures which do not differ materially from the agreed upon disclosure.
(f) Law Governing. This Agreement will be governed by, and construed
-------------
and enforced in accordance with, the internal laws of the State of Delaware.
(g) Notices. Unless otherwise provided, all notices, requests,
-------
demands and other communications required or permitted under this Agreement will
be in writing and will be deemed to have been duly made and received: (i) upon
personal delivery or confirmed facsimile to the party to be notified; (ii) three
(3) Business Days after deposit with the United States Post Office, by
registered or certified mail, postage prepaid, addressed as set forth below; or
(iii) one (1) Business Day after deposit for overnight delivery with Federal
Express or another reputable overnight courier, shipping prepaid, addressed as
set forth below:
(i) If to the Company, then to:
GenVec, Inc.
12111 Parklawn Drive
Rockville, MD 20852
Attn: President
With a copy to:
Attn: Chief Financial Officer
(ii) If to the Investor, then to:
Warner-Lambert Company
2800 Plymouth Road
Ann Arbor, Michigan 48105
Attn: Vice President and Chairman
Park-Davis Research Division
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<PAGE>
With a copy to:
Warner-Lambert Company
201 Tabor Road
Morris Plains, NJ 07950
Attn: Vice President and General Counsel
Either party may change the address to which communications are to be sent by
giving five (5) Business Days' advance notice of such change of address to the
other party in conformity with the provisions of this Section 13(g).
(h) Headings. The headings in this Agreement are for purposes of
--------
reference only and will not affect the meaning or construction of any of the
provisions hereof
(i) Execution; Counterparts. This Agreement may be executed in any
-----------------------
number of counterparts, each of which will be deemed to be an original as
against any party whose signature appears on such counterpart, and all of which
will together constitute one and the same instrument. This Agreement will become
binding when one or more counterparts of this Agreement, individually or taken
together, bear the signatures of all of the parties to this Agreement.
IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as
of the date first above written.
WARNER-LAMBERT COMPANY
By: _________________________________________
Name: Anthony Wild, Ph.D.
Title: President
Worldwide Pharma Sector
GENVEC
By: _________________________________________
Paul H. Fischer, Ph.D..
President and Chief Executive Officer
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<PAGE>
AMENDED AND RESTATED
BYLAWS OF
GENVEC, INC.
(Amended and Restated as of September 12, 1995)
ARTICLE I
OFFICES
-------
Section 1.1. Registered Office and Registered Agent. The Corporation shall
--------------------------------------
maintain a registered office and registered agent within the State of Delaware,
which may be changed by the Board of Directors from time to time.
Section 1.2. Other Offices. The Corporation may also have offices at such
-------------
other places, within or without the State of Delaware, as the Board of Directors
may from time to time determine.
ARTICLE II
STOCKHOLDERS' MEETINGS
----------------------
Section 2.1. Place of Stockholders' Meetings. Meetings of stockholders may be
-------------------------------
held at such place, either within or without the State of Delaware, as may be
designated by the Board of Directors from time to time. If no such place is
designated by the Board of Directors, meetings of the stockholders shall be held
at the registered office of the Corporation in the State of Delaware.
Section 2.2. Annual Meeting. A meeting of the stockholders of the Corporation
--------------
shall be held in each calendar year, commencing with the year 1993, at such time
as the Board of Directors may determine.
<PAGE>
At such annual meeting, there shall be held an election for a Board of
Directors to serve for the ensuing year and until their respective successors
are elected and qualified, or until their earlier resignation or removal.
Subject to the terms of the Corporation's Certificate of Incorporation, the
Board of Directors shall consist of the number of directors determined pursuant
to Section 3.1 hereof, of which the holders of the Corporation's Class A
Convertible Preferred Stock, par value $.01 per share (the "Class A Stock"), the
Corporation's Class B Convertible Preferred Stock, par value $.01 per share (the
"Class B Stock") and the Corporation's Class C Convertible Preferred Stock, par
value $0.01 per share (the "Class C Stock") (the Class A Stock, the Class B
Stock and the Class C Stock being hereinafter collectively referred to as the
"Preferred Stock"), in the aggregate, shall elect at least five directors, of
which Hillman Medical Ventures 1995 L.P. or its successor limited partnership
("Hillman") shall be entitled to elect two such directors and each of Prince
Venture Partners III, L.P. ("Prince III") and Genentech, Inc. ("Genentech")
acting individually and Sierra Ventures IV, L.P. ("Sierra IV") and Sierra
Ventures International IV, L.P. ("Sierra International IV") acting in the
aggregate being entitled to elect one director each; provided, however, that if
-------- -------
the ownership of "Preferred Stock" or shares of the common stock of the Company,
par value $0.01 per share (the "Common Stock"), into which such shares of
"Preferred Stock" are converted (collectively, "Securities") by any of
"Hillman," "Prince III" or "Genentech" individually, or of "Sierra IV" and
"Sierra International IV" in the aggregate, ever becomes less than ten percent
(10%) of the "Common Stock" then outstanding, assuming conversion of all
"Preferred Stock" and issuance of the aggregate maximum number of shares of
"Common Stock" issued, delivered or exchanged therefor and irrespective of
whether any such shares of "Common Stock" or "Preferred Stock" are conditional
or unvested (the "Director Entitlement Threshold"), then on the date on which
the
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<PAGE>
ownership of "Securities" by any of "Hillman," "Prince III" or "Genentech"
individually, or of "Sierra IV" and "Sierra International IV" in the aggregate,
falls below the "Director Entitlement Threshold," such applicable holder or
holders of "Preferred Stock" shall no longer be entitled to elect any particular
director and shall only have such rights to exercise the voting power of the
"Preferred Stock" as are set forth in the Corporation's Certificate of
Incorporation; provided, further, that if the Corporation consummates an
-------- -------
underwritten public offering of the Corporation's "Common Stock" pursuant to one
or more registration statements filed under the Securities Act of 1933, as
amended (or any successor statute), yielding gross proceeds to the Corporation
of at least $15,000,000 and under which the offering price to the public is
equal to at least $1.50 per share (adjusted for any stock splits, stock
dividends, recapitalizations, mergers, consolidations or similar events
occurring after September 19, 1995) (a "Qualifying Public Offering"), upon the
closing of the "Qualifying Public Offering," the holders of the "Preferred
Stock" shall not be entitled to elect any particular directors and shall have no
other voting rights with respect to the "Preferred Stock" other than as are set
forth in the Corporation's Certificate of Incorporation; and further provided,
------- --------
that if the director nominated by "Genentech," prior to any "Qualifying Public
Offering" or "Genentech" holding "Securities" in an amount less than the
"Director Entitlement Threshold," is an employee of "Genentech" and if
"Genentech" and the Corporation in good faith and after due and careful
consideration of objective and tangible evidence, agree that the presence of a
"Genentech" employee on the Board substantially, materially and adversely
impedes on an ongoing basis the Corporation's ability to enter into substantial
collaborative agreements with third party biotechnology or pharmaceutical
concerns, then "Genentech" shall be entitled to have an independent individual
acceptable to "Genentech," but not a "Genentech" employee, elected as the
representative of
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<PAGE>
"Genentech" on the Corporation's Board of Directors during the
period, as described above, in which "Genentech" has such right to nominate a
director.
Section 2.3. Special Meetings. Except as otherwise specifically provided by
----------------
law, special meetings of the stockholders may be called at any time:
(a) By the Board of Directors; or
(b) By the President of the Corporation; or
(c) By the holders of record of not less than 20% of all the shares
outstanding and entitled to vote.
Upon the written request of any person entitled to call a special meeting
and who is entitled to do so under these Bylaws or applicable law, which request
shall set forth the purpose for which the meeting is desired, it shall be the
duty of the Secretary to give prompt written notice of such meeting to be held
at such time as the Secretary may fix, subject to the provisions of Section 2.4
hereof. If the Secretary shall fail to fix such date and give notice within 10
days after receipt of such request, the person or persons calling the meeting
may do so.
Section 2.4. Notice of Meetings and Adjourned Meetings. Written notice
-----------------------------------------
stating the place, date and hour of any meeting and, in the case of special
meetings, the purpose or purposes for which the meeting is called, shall be
given not less than 10 nor more than 60 days before the date of the meeting to
each stockholder entitled to vote at such meeting, except as provided in Section
230 of the Delaware General Corporation Law, as amended from time to time (the
"Delaware Code"). Such notice may be given by or at the direction of the person
or persons authorized to call the meeting.
When a meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the
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<PAGE>
adjournment is taken. If the adjournment is for more than 30 days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
Section 2.5. Quorum of and Action by Shareholders.
------------------------------------
(a) Unless otherwise provided in the Certificate of Incorporation of the
Corporation (the "Certificate") or in a Bylaw adopted by stockholders, the
presence, in person or by proxy, of stockholders entitled to cast at least a
majority of the votes that all stockholders are entitled to cast on a particular
matter to be acted upon at the meeting shall constitute a quorum, but in no
event shall a quorum consist of less than one-third (1/3) of the shares entitled
to vote at a meeting. If a meeting cannot be organized because of the absence
of a quorum, those present may, except as otherwise provided by law, adjourn the
meeting to such time and place as they may determine.
(b) Whenever any corporate action is to be taken by vote of the
stockholders of the Corporation at a duly organized meeting, unless otherwise
provided in the Certificate or the Delaware Code, such corporate action shall be
authorized by a majority of the votes cast at the meeting by the holders of
shares entitled to vote thereon.
(c) The stockholders present at a duly organized meeting can continue to do
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
(d) In the case of any meeting for the election of Directors, those
stockholders who attend the second of such adjourned meetings, although less
than a quorum as fixed in this Section, shall nevertheless constitute a quorum
for the purpose of electing Directors.
-5-
<PAGE>
Section 2.6. Voting List; Proxies. The officer who has charge of the stock
--------------------
ledger of the Corporation shall prepare, at least 10 days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Upon the willful neglect or refusal of the Directors to produce such a list
at any meeting for the election of Directors, they shall be ineligible to any
office at such meeting.
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for him by proxy. All proxies shall
be executed in writing and shall be filed with the Secretary of the Corporation
not later than the day on which exercised. No proxy shall be voted or acted
upon after three years from its date, unless the proxy provides for a longer
period.
Except as otherwise specifically provided by law, all matters coming before
the meeting shall be determined by a vote by shares. All elections of Directors
shall be by written ballot unless otherwise provided in the Certificate. Except
as otherwise specifically provided by law, all other votes may be taken by voice
unless a stockholder demands that it be taken by ballot, in which latter event
the vote shall be taken by written ballot.
-6-
<PAGE>
Section 2.7. Informal Action by Stockholders. Unless otherwise provided in
-------------------------------
the Certificate, any action required to be taken at any annual or special
meeting of stockholders, or any action which may be taken at any annual or
special meeting of such stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted.
Prompt notice of the taking of corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders or members,
who have not consented in writing.
ARTICLE III
BOARD OF DIRECTORS
------------------
Section 3.1. Number. The business and affairs of the Corporation shall be
------
managed by or under the direction of a Board of Directors which shall be
composed of not less than five (5) and not more than twelve (12) Directors, the
precise number to be determined from time to time by the Board of Directors.
Section 3.2. Place of Meeting. Meetings of the Board of Directors may be held
----------------
at such place either within or without the State of Delaware, as a majority of
the Directors may from time to time designate or as may be designated in the
notice calling the meeting.
Section 3.3. Regular Meetings. A regular meeting of the Board of Directors
----------------
shall be held annually, immediately following the annual meeting of
stockholders, at the place where such meeting of the stockholders is held or at
such other place, date and hour as a majority of the newly elected Directors may
designate. At such meeting the Board of Directors shall elect officers of the
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<PAGE>
Corporation. In addition to such regular meeting, a majority of the Board of
Directors shall have the power to fix, by resolution, the place, date and hour
of other regular meetings of the Board to occur at least once a month and to
convene one meeting a month of the company's executive officers. The Board of
Directors also shall invite the "Primary Investigator" (as defined in that
certain Preferred Stock Purchase Agreement dated as of December 8, 1992, as
Amended and Restated as of May 19, 1993 (as so amended and restated, the
"Purchase Agreement")) to attend any and all meetings of the Board of Directors,
to participate in discussions and express views on matters before the Board, but
without any right to vote; and provided that the "Primary Investigator" shall
--------
withdraw from such meeting upon any discussion of the terms of his engagement or
continuing engagement by the Corporation.
Section 3.4. Special Meetings. Special meetings of the Board of Directors
----------------
shall be held whenever ordered by the President, by a majority of the members of
the executive committee, if any, or by a majority of the Directors in office.
The "Primary Investigator" (as defined in the Purchase Agreement) shall be
invited to attend such special meetings, under the same terms and conditions as
a regular meeting of the Board of Directors as set forth in Section 3.3.
Section 3.5. Notices of Meetings of Board of Directors.
-----------------------------------------
(a) Regular Meetings. No notice shall be required to be given of any
----------------
regular meeting, unless the same be held at other than the time or place for
holding such meetings as fixed in accordance with Section 3.3, in which event
one day's notice shall be given of the time and place of such meeting.
(b) Special Meetings. At least one day's notice shall be given of the
----------------
time, place and purpose for which any special meeting of the Board of Directors
is to be held.
-8-
<PAGE>
Section 3.6. Quorum. A majority of the total number of Directors shall
------
constitute a quorum for the transaction of business, and the vote of a majority
of the Directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors. If there be less than a quorum present, a
majority of those present may adjourn the meeting from time to time and place to
place and shall cause notice of each such adjourned meeting to be given to all
absent Directors.
Section 3.7. Informal Action by the Board of Directors. Any action required
-----------------------------------------
or permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
Section 3.8. Powers.
------
(a) General Powers. The Board of Directors shall have all powers
--------------
necessary or appropriate to the management of the business and affairs of the
Corporation and, in addition to the power and authority conferred by these
Bylaws, may exercise all powers of the Corporation and do all such lawful acts
and things as are not by statute, these Bylaws or the Certificate directed or
required to be exercised or done by the stockholders.
(b) Specific Powers. Without limiting the general powers conferred by
---------------
subparagraph (a) above and the powers conferred by the Certificate of
Incorporation and Bylaws of the Corporation, it is hereby expressly declared
that the Board of Directors shall have the following powers:
(i) To confer upon any officer or officers of the Corporation the
power to choose, remove or suspend assistant officers, agents or servants.
-9-
<PAGE>
(ii) To appoint any person, firm or corporation to accept and hold in
trust for the Corporation any property belonging to the Corporation or in which
it is interested, and to authorize any such person, firm or corporation to
execute any documents and perform any duties that may be requisite in relation
to any such trust.
(iii) To appoint a person or persons to vote shares of another
corporation held and owned by the Corporation.
(iv) By resolution adopted by a majority of the full Board of
Directors, to designate one or more of its members to constitute an executive
committee which, to the extent provided in such resolution and subject to the
Delaware code, shall have and may exercise the power of the Board of Directors
in the management of the business and affairs of the corporation and may
authorize the seal of the Corporation to be affixed.
(v) By resolution passed by a majority of the whole Board of
Directors, to designate one or more additional committees, each to consist of
one or more Directors, to have such duties, powers and authority as the Board of
Directors shall determine. All committees of the Board of Directors, including
the executive committee, shall have the authority to adopt their own rules of
procedure. Absent the adoption of specific procedures, the procedures applicable
to the Board of Directors shall also apply to committees thereof.
(vi) To fix the place, time and purpose of meetings of stockholders.
(vii) To purchase or otherwise acquire for the Corporation any
property, rights or privileges which the Corporation is authorized to acquire,
at such prices, on such terms and conditions and for such consideration as it
shall from time to time see fit, and, at its discretion, to pay
-10-
<PAGE>
any property or rights acquired by the Corporation, either wholly or partly in
money or in stocks, bonds, debentures or other securities of the Corporation.
(viii) To create, make and issue mortgages, bonds, deeds of trust,
trust agreements and negotiable or transferable instruments and securities,
secured by mortgage or otherwise, and to do every other act and thing necessary
to effectuate the same.
(ix) To appoint and remove or suspend such subordinate officers,
agents or servants, permanently or temporarily, as it may from time to time
think fit, and to determine their duties, and fix, and from time to time change,
their salaries or emoluments, and to require security in such instances and in
such amounts as it thinks fit.
(x) To determine who shall be authorized on the Corporation's behalf
to sign bills, notes, receipts, acceptances, endorsements, checks, releases,
contracts and documents.
Section 3.9. Compensation of Directors. Compensation of Directors and
-------------------------
reimbursement of their expenses incurred in connection with the business of the
Corporation, if any, shall be as determined from time to time by resolution of
the Board of Directors.
Section 3.10. Removal of Directors by Stockholders. Any individual Director
------------------------------------
may be removed from office without assigning any cause by the affirmative vote
of the holders of a majority of the outstanding shares entitled to elect such
Director. In case any one or more Directors are so removed, new Directors may
be elected at the same time.
Section 3.11 Resignations. Any Director may resign at any time by submitting
------------
his written resignation to the Corporation. Such resignation shall take effect
at the time of its receipt by the Corporation unless another time be fixed in
the resignation, in which case it shall become effective at the time so fixed.
The acceptance of a resignation shall not be required to make it effective.
-11-
<PAGE>
Section 3.12. Vacancies. Except as otherwise set forth in the Certificate, any
---------
vacancies on the Board of Directors, including vacancies resulting from a
removal of Directors under Section 3.10 and newly created directorships
resulting from any increase in the authorized number of Directors, may be filled
by a majority vote of the remaining Directors then in office, although less than
a quorum, or by a sole remaining Director, and each person so elected shall be a
Director until his successor is elected and qualified or until his earlier
resignation or removal.
Section 3.13. Participation by Conference Telephone. Directors may participate
-------------------------------------
in regular or special meetings of the Board by telephone or similar
communications equipment by means of which all other persons participating in
the meeting can hear each other, and such participation shall constitute
presence at the meeting.
ARTICLE IV
OFFICERS
--------
Section 4.1. Election and Office. The Corporations shall have a President, a
-------------------
Secretary and a Treasurer who shall be elected by the Board of Directors. The
Board of Directors may elect such additional officers as it may deem proper,
including a Chairman and Vice Chairman of the Board of Directors, one or more
Vice Presidents, and one or more assistant or honorary officers. Any number of
offices may be held by the same person.
Section 4.2. Term. The President, Secretary and Treasurer shall each serve
----
for a term of one year and until their respective successors are chosen and
qualified, unless removed from office by the Board of Directors during their
respective tenures. The term of office of any other officer shall be as
specified by the Board of Directors.
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<PAGE>
Section 4.3. Powers and Duties of the President. Unless otherwise determined
----------------------------------
by the Board of Directors, the President shall have the usual duties of an
executive officer with general supervision over and direction of the affairs of
the Corporation. In the exercise of these duties and subject to the limitations
set forth in the Delaware Code, these Bylaws, and the actions of the Board of
Directors, the President may appoint, suspend and discharge employees, agents
and assistant officers, fix the compensation of all officers and assistant
officers, shall preside at all meetings of the stockholders at which he or she
shall be present, shall, unless there is a Chairman of the Board of Directors,
preside at all meetings of the Board of Directors and, unless otherwise
specified by the Board of Directors, shall be a member of all committees. The
President shall also do and perform such other duties as from time to time may
be assigned to him or her by the Board of Directors. Unless otherwise
designated by the Board of Directors, the President shall be the Chief Executive
Officer of the Corporation.
Section 4.4. Powers and Duties of the Secretary. Unless otherwise determined
----------------------------------
by the Board of Directors, the Secretary shall record all proceedings of the
meetings of the Corporation, the Board of Directors and all committees, in books
to be kept for that purpose, and shall attend to the giving and serving of all
notices for the Corporation. The Secretary shall have charge of the corporate
seal, the certificate books, transfer books and stock ledgers, and such other
books and papers as the Board of Directors may direct. The Secretary shall
perform all other duties ordinarily incident to the office of Secretary and
shall have such other powers and perform such other duties as may be assigned to
him or her by the Board of Directors.
Section 4.5. Powers and Duties of the Treasurer. Unless otherwise determined
----------------------------------
by the Board of Directors, the Treasurer shall have charge of all the funds and
securities of the Corporation
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<PAGE>
which may come into his or her hands. When necessary or proper, unless otherwise
ordered by the Board of Directors, the Treasurer shall endorse for collection on
behalf of the Corporation checks, notes and other obligations, and shall deposit
the same to the credit of the Corporation in such banks or depositories as the
Board of Directors may designate and shall sign all receipts and vouchers for
payments made to the Corporation. The Treasurer shall enter regularly, in books
of the Corporation to be kept by him or her for that purpose, a full and
accurate account of all moneys received and paid by him or her on account of the
Corporation. Whenever required by the Board of Directors, the Treasurer shall
render a statement of the financial condition of the Corporation. The Treasurer
shall at all reasonable times exhibit the Corporation's books and accounts to
any Director of the Corporation, upon application at the office of the
Corporation during business hours. The Treasurer shall have such other powers
and shall perform such other duties as may be assigned to him or her from time
to time by the Board of Directors.
Section 4.6. Powers and Duties of the Chairman of the Board of Directors.
-----------------------------------------------------------
Unless otherwise determined by the Board of Directors, the Chairman of the Board
of Directors, if any, shall preside at all meetings of Directors and shall serve
ex officio as a member of every committee of the Board of Directors. The
- ----------
Chairman shall have such other powers and perform such further duties as may be
assigned to him or her by the Board of Directors.
Section 4.7. Powers and Duties of Vice Presidents and Assistant Officers.
-----------------------------------------------------------
Unless otherwise determined by the Board of Directors, each Vice President and
each assistant officer shall have the powers and perform the duties of his or
her respective superior officer. Vice Presidents and assistant officers shall
have such rank as shall be designated by the Board of Directors and each, in the
order of rank, shall act for such superior officer in his or her absence or
disability or when so
-14-
<PAGE>
directed by such superior officer or by the Board of Directors. Vice Presidents
may be designated as having responsibility for a specific aspect of the
Corporation's affairs, in which event each such Vice President shall be superior
to the other Vice Presidents in relation to matters within his aspect. The
President shall be the superior officer of the Vice Presidents. The Treasurer
and the Secretary shall be the superior officers of the Assistant Treasurers and
Assistant Secretaries, respectively.
Section 4.8. Delegation of Office. The Board of Directors may delegate the
--------------------
powers or duties of any officer of the Corporation to any other officer or to
any Director from time to time.
Section 4.9. Vacancies. The Board of Directors shall have the power to fill
---------
any vacancies in any office occurring from whatever reason.
Section 4.10. Resignations. Any officer may resign at any time by submitting
------------
his or her written resignation to the Corporation. Such resignation shall take
effect at the time of its receipt by the Corporation, unless another time be
fixed in the resignation, in which case it shall become effective at the time so
fixed. The acceptance of a resignation shall not be required to make it
effective.
ARTICLE V
CAPITAL STOCK
-------------
Section 5.1. Stock Certificates. Shares of the Corporation shall be
------------------
represented by certificates signed by or in the name of the Corporation by (a)
the Chairman or Vice Chairman of the Board of Directors, the President or a Vice
President, and (b) the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, representing the number of shares registered in
certificate form, and may be countersigned by a transfer agent or registrar
other than the Corporation or its employee. Any or all of the signatures on the
share certificates may be facsimiles. In case any
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<PAGE>
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he or she were such officer,
transfer agent or registrar at the date of issue.
If the Corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in the Delaware Code, in lieu of the foregoing requirements,
there may be set forth on the face or back of the certificate which the
Corporation shall issue to represent such class or series of stock, a statement
that the Corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights.
Section 5.2. Determination of Stockholders of Record. The Board of Directors
---------------------------------------
may fix, in advance, a record date to determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or to express consent to corporate action in writing without a meeting or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action.
Such date shall not be less than 10 nor more than 60 days before the date of any
such meeting, nor more than 60 days prior to any other action.
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<PAGE>
If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the day next preceding the day
on which the meeting is held.
The record date for determining stockholders for any other purpose shall be
at the close of business on the day on which the Board of Directors adopts the
resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 5.3. Transfer of Shares. Except as provided in Section 5.4, transfer
------------------
of shares shall be made on the books of the Corporation only upon surrender of
the share certificate, duly endorsed and otherwise in proper form for transfer,
which certificate shall be cancelled at the time of the transfer; no transfer of
shares shall be made on the books of this Corporation if such transfer is in
violation of a lawful restriction noted conspicuously on the certificate.
Section 5.4. Lost, Stolen or Destroyed Share Certificates. The
--------------------------------------------
Corporation may issue a new certificate of stock in place of any certificate
therefore issued by it, alleged to have been lost, stolen or destroyed, and the
Corporation may require the owner of the lost, stolen, or destroyed certificate,
or his legal representative to give the Corporation a bond sufficient to
indemnify it against claim that may be made against it on account of the alleged
loss, theft or destruction of any such certificate or the issuance of such new
certificate or uncertificated shares.
-17-
<PAGE>
ARTICLE VI
NOTICES
-------
Section 6.1. Contents of Notice. Whenever any notice of a meeting is
------------------
required to be given pursuant to these Bylaws, the Certificate or otherwise, the
notice shall specify the place, day and hour of the meeting; in the case of a
special meeting or where otherwise required by law, the general nature of the
business to be transacted at such meeting; and any other information required by
the Delaware Code.
Section 6.2. Method of Notice. All notices shall be given to each person
----------------
entitled thereto, either personally or by sending a copy thereof by first class
or express mail, postage prepaid, or by telegram (with messenger service
specified), telex or TWX (with answer back received) or courier service, charges
prepaid, or by telecopier, with confirmation of receipt, to such person's
address (or their telex, TWX, telecopier or telephone number) as it appears on
the records of the Corporation, or supplied by such person to the Corporation
for the purpose of notice. If notice is sent by mail, telegraph or courier
service, it shall be deemed to have been given to the person entitled thereto
when deposited in the United States Mail, with the telegraph office or with the
courier service, as the case may be, for delivery to that person or, in the case
of telex, TWX or telecopier, when dispatched. If no address for a stockholder
appears on the books of the Corporation and such stockholder has not supplied
the Corporation with an address for the purpose of notice, notice deposited in
the United States Mail addressed to such stockholder care of General Delivery in
the city in which the principal office of the Corporation is located shall be
sufficient.
Section 6.3. Waiver of Notice. Whenever notice is required to be given
----------------
under any provision of the Delaware Code, the Certificate or these Bylaws, a
written waiver, signed by the
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<PAGE>
person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, Directors, or members of a
committee of Directors need be specified in any written waiver of notice unless
so required by the Certificate of Incorporation.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS
----------------------------
AND OFFICERS AND OTHER PERSONS
------------------------------
Section 7.1. Indemnification. The Corporation shall have the power to
---------------
indemnify any Director, officer, employee or agent of the Corporation against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him, to the fullest extent now
or hereafter permitted by law in connection with and including, but not limited
to, those instances in which such indemnification, although greater in scope or
degree than that expressly provided by Section 145 of the Delaware Code, as
deemed by a majority of a quorum of disinterested Directors (which may consist
of only one Director if there is only one independent Director) or by
independent legal counsel, after due investigation, to be in the best interests
of the Corporation, with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, brought or
threatened to be brought against him or her by reason of his or her performance
as a Director, officer, employee or agent of the Corporation, its parent or any
of its subsidiaries, or in any other capacity on behalf o the Corporation, its
parent or
-19-
<PAGE>
any of its subsidiaries. The Board of Directors by resolution adopted in each
specific instance may similarly indemnify any person other than a Director,
officer, employee or agent of the Corporation for liabilities incurred by him or
her in connection with services rendered by him or her for or at the request of
the Corporation, its parent or any of its subsidiaries.
The provisions of this Section shall be applicable to all actions, suits or
proceedings commenced after its adoption, whether such arise out of acts or
omissions which occurred prior or subsequent to such adoption and shall continue
as to a person who has ceased to be a Director, officer, employee or agent or to
render services for or at the request of the Corporation or as the case may be,
its parent, or subsidiaries and shall inure to the benefit of the heirs,
executors and administrators of such a person. The rights of indemnification
provided for herein shall not be deemed exclusive of any other rights to which
any Director, officer, employee or agent of the Corporation may be entitled
under these bylaws, agreement, vote of stockholders or disinterested Directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
Section 7.2. Advances. Expenses (including attorney's fees) incurred by any
--------
officer or Director in defending any civil, criminal, administrative or
investigative action, suit or proceeding, whether threatened, pending or
completed, may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking, by or on behalf of such Director
or officer, to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the
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<PAGE>
Corporation as authorized by law. Such expenses including attorney's fees
incurred by other employees and agents may be paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.
Section 7.3. Insurance. The Corporation may purchase and maintain insurance
---------
on behalf of any person who is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
Director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or
her and incurred by him or her in any such capacity, or arising out of his or
her status as such, whether or not the Corporation would have the power to
indemnify him or her against such liability under law.
ARTICLE VIII
SEAL
----
The form of the seal of the Corporation, called the corporate seal of the
Corporation, shall be as impressed adjacent hereto. (Form of Seal)
ARTICLE IX
FISCAL YEAR
-----------
The Board of Directors shall have the power by resolution to fix the fiscal
year of the Corporation. If the Board of Directors shall fail to do so, the
President shall fix the fiscal year.
ARTICLE X
AMENDMENTS
----------
The original or other Bylaws may be adopted, amended or repealed by the
stockholders entitled to vote thereon at any regular or special meeting or, if
the Certificate of Incorporation so
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<PAGE>
provides, by the Board of Directors. The fact that such power has been so
conferred upon the Board of Directors shall not divest the stockholders of the
power nor limit their power to adopt, amend or repeal Bylaws.
ARTICLE XI
INTERPRETATION OF BYLAWS
------------------------
All words, terms and provisions of these Bylaws shall be interpreted and
defined by and in accordance with the Delaware Code.
EXHIBIT C
- ---------
Financial Statements is attached as Exhibit B to Exhibit 10.8 to this
- --------------------
Amendment No. 2
-22-
<PAGE>
Exhibit 10.7
LICENSE AGREEMENT
This LICENSE AGREEMENT (the "Agreement") effective as of May 31, 1996 (the
"Effective Date"), is entered by and between Scios Inc., a Delaware corporation,
with principal offices at 2450 Bayshore Parkway, Mountain View, California 94043
("Scios"), and GenVec, Inc., a Delaware corporation, having a principal place of
business at 12111 Parklawn Drive, Rockville, Maryland 20852 ("GenVec").
RECITALS
A. Scios is the sole and exclusive owner of certain Patent Rights and
Know-How (as such terms are defined below) relating to vascular endothelial
growth factor (VEGF) 121 and nucleic acid sequences encoding VEGF 121, and the
use thereof, and related subject matter;
B. GenVec desires to obtain an exclusive license to the Patent Rights and
Know-How in the Field (as defined below) and Scios is willing to grant such a
license to GenVec, on the terms and conditions herein;
C. GenVec and Scios each wish to cooperate to facilitate the development
of proprietary VEGF products, as set forth herein;
D. Of even date herewith, Scios and GenVec have entered into a Stock
Warrant Agreement pursuant to which GenVec will grant to Scios a warrant to
purchase shares of GenVec common stock; and
E. Of even date herewith, Scios and GenVec have entered into a Stock
Purchase Agreement (attached hereto as Exhibit D) pursuant to which Scios will
purchase shares of GenVec Class D Convertible Preferred Stock.
NOW, THEREFORE, Scios and GenVec agree as follows:
1. DEFINITIONS
1.1 "Affiliate" means any corporation or other entity which is directly or
---------
indirectly controlling, controlled by or under the common control of a party
hereto. For the purpose of this Agreement, "control" shall mean the direct or
indirect ownership of at least fifty percent (50%) of the outstanding shares or
other voting rights of the subject entity to elect directors, or if not meeting
the preceding, any entity owned or controlled by or owning or controlling at the
maximum control or ownership right permitted in the country where such entity
exists.
1.2 "Competing Product" shall mean any product in the Field sold by a
-----------------
person other than (a) GenVec, (b) a GenVec sublicensee of the Licensed
Technology, (c) [*] or (d) a
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
sublicensee of [*] patent rights with respect to [*], in each case,
which if sold by GenVec would be a Licensed Product.
1.3 "Confidential Information" shall mean (i) any proprietary or
------------------------
confidential information or material in tangible form disclosed hereunder that
is marked as "confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder which
is identified as confidential or proprietary when disclosed and such disclosure
of confidential information is confirmed in writing within thirty (30) days by
the disclosing party.
1.4 "Core Countries" shall mean the [*]
--------------
1.5 "Derived" shall mean a [*]
-------
1.6 "Equity Value" shall mean an amount for the purchase of shares of
------------
GenVec stock, which is equal to [*] of the fair market value of such stock, with
such fair market value determined based on the share price on the date of actual
purchase, unless GenVec enters into a written agreement to sell such equity to
the purchasing party in the future and the share price on the actual date of
purchase is lower than the share price at the date such agreement is executed,
in which event the fair market value of such equity for purposes of this Section
1.6 shall be based on the share price on the date such agreement is executed.
1.7 "Excess Equity Purchase Amount" shall mean any amount received by
-----------------------------
GenVec from a corporate partner in connection with an agreement for the
development or commercialization of a Licensed Product for the purchase of
shares of GenVec stock which is greater than the Equity Value of such stock.
1.8 "Field" shall mean [*]
-----
1.9 "Licensed Product" shall mean [*] or a product within the scope
----------------
of a Valid Claim within the Patent Rights.
1.10 "Licensed Technology" means the Know-How and Patent Rights.
-------------------
1.10.1 "Know-How" shall mean any and all technical information,
--------
materials (including without limitation, biological materials), processes,
procedures, compositions, devices, methods, formulas, protocols, techniques,
designs, drawings, and other technical data which is
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
-2-
<PAGE>
owned, in whole or part, or controlled by Scios or its Affiliates during the
term of this Agreement, which is necessary or useful for the development,
manufacture, use or sale of Licensed Products. Know-How shall not include any
inventions included in the Patent Rights, and shall not include any business
information, such as market research or business analysis.
1.10.2 "Patent Rights" means (i) the patent applications and patents
-------------
listed on Exhibit A hereto, and (ii) [*] in each case, which is owned, in
whole or part, or controlled by Scios or its Affiliates during the term of this
Agreement including, without limitation, Scios' interest in any Joint
Inventions; and all divisions, continuations, continuations-in-part, and
substitutions of any of the preceding; all foreign patent applications
corresponding to any of the preceding applications or patents; and all U.S. and
foreign patents issuing on any of the preceding applications, including
extensions, reissues, and re-examinations.
[*]
1.13 "Net Revenues" means the gross revenues received by GenVec for:
------------
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
-3-
<PAGE>
[*]
For the avoidance of doubt, it is understood and agreed that [*]
1.14 "Net Sales" means the amounts received by GenVec and its sublicensees
---------
with respect to sales of Licensed Products to independent third parties, [*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
-4-
<PAGE>
1.16 "Transfer Sales" means the amounts received by GenVec with respect to
--------------
sales of Licensed Products to its sublicensees, less: [*]
1.17 "Territory" means all countries of the world.
---------
1.18 "Valid Claim" means (i) a claim of an issued and unexpired patent
-----------
claiming [*]
2. LICENSE
2.1 License Grant. Scios hereby grants to GenVec an exclusive, worldwide
-------------
license under the Licensed Technology, with the right to grant and authorize
sublicenses, to make, have made, import, have imported, use, sell, offer for
sale and otherwise exploit Licensed Products in the Field in the Territory.
2.2 Delivery of Know-How. Within [*] after the Effective Date,
--------------------
Scios shall deliver to GenVec the biological materials listed on Exhibit B
hereto and the [*]. Within [*] after the Effective Date, knowledgeable
representatives of the parties shall meet to discuss the existing Know-How and
shall agree on which Know-How Scios shall deliver to GenVec, and the schedule of
delivery and form thereof. At least semi-annually during the term of the
Agreement, Scios shall provide to GenVec all Know-How developed or generated
during the preceding [*] period.
2.3 Cooperation. It is understood and agreed that the parties intend to
-----------
confer and cooperate to aid each other, without charge, in the development and
commercialization of products within the Patent Rights. The parties shall
negotiate in good faith the scope and nature of such activities, but agree to do
at least the following:
2.3.1 Scios Activities. Scios shall: (i) provide GenVec with
----------------
protocols for Scios' [*]
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RESPECT TO THE OMITTED PORTIONS.
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[*] Such discussions will be participated in by Scios representatives with
appropriate expertise in the relevant topics. The discussions shall include
updates to GenVec as the understanding of these areas develops.
[*]
2.3.3 Level of Cooperation. Unless otherwise agreed, neither party
--------------------
shall have any obligation to provide services to the other pursuant to this
Section 2.3 or Section 3.10 in excess of an aggregate of [*] per calendar
quarter.
2.3.4 Termination. Except as expressly provided in this Section
-----------
2.3.4, the foregoing cooperative activities (but not activities subject to
Section 3.10) shall terminate, at [*]
3. CONSIDERATION
3.1 Warrants. In partial consideration of the license granted herein, of
--------
even date herewith GenVec has granted Scios a warrant to purchase shares of
GenVec stock pursuant to the terms of the Stock Warrant Agreement attached
hereto as Exhibit C.
3.2 Profit Sharing. Subject to Section 3.4 below, in partial
--------------
consideration of the license granted herein, [*]
3.3 Minimum Royalty. Notwithstanding Section 3.2 above, with respect to
---------------
sales of Licensed Products (including sales of Licensed Products in connection
with a co-promotion relationship) made in countries where there is a Valid Claim
of an issued patent within the Patent Rights covering such Licensed Products,
subject to Section 3.4, GenVec shall pay to Scios no less [*]
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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[*]
3.4 Payment Reductions. In the event that a Licensed Product is made,
------------------
used or sold in a country where there is a competing product in the Field, the
amounts due Scios pursuant to Sections 3.2 and 3.3 shall be reduced as follows:
[*]
3.6 Other Technology and Products. It is understood and agreed that in
-----------------------------
the event GenVec enters into an agreement with a third party which provides such
third party rights to the Licensed Technology and/or Licensed Products and
intellectual property other than the Licensed Technology and/or products other
than Licensed Products, pursuant to which it receives license fees and/or
milestone payments with respect to (i) intellectual property other than the
Licensed Technology for use in the development or commercialization of products
other than Licensed Products, or (ii) products other than Licensed Products, the
portion of such amounts which constitute Net Profits shall be as reasonably
determined by the parties based on an allocation between the amounts
attributable to the Licensed Technology or Licensed Product and such other
intellectual property or
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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product, based upon their relative importance and proprietary protection, and
GenVec shall only pay to Scios that portion of such amounts reasonably
attributable to the Licensed Technology or Licensed Product, as the case may be.
3.7 Commercial Impracticability. Notwithstanding the above, in the event
---------------------------
that GenVec believes that the payments set forth in Sections 3.2 or 3.3 above
would make the sale of Licensed Products commercially impracticable it may
notify Scios, and in such event the parties shall negotiate in good faith a
reduction in such payments.
3.8 One Payment. No more than one payment shall be due with respect to a
-----------
sale of a particular Licensed Product. No multiple payments shall be payable
because any Licensed Product, or its manufacture, sale or use is covered by more
than one Valid Claim. No amount shall be payable under Sections 3.2 or 3.3
above with respect to Licensed Products distributed for use in research and/or
development, in clinical trials, or as promotional samples where such samples
are provided at or below cost.
3.9 Payment Term. Payments due under this Article 3 shall be payable on a
------------
country-by-country and Licensed Product-by-Licensed Product basis. In countries
where there exists a Valid Claim of an issued patent within the Patent Rights
covering a particular Licensed Product, such payments shall be payable until the
expiration of the last-to-expire issued Valid Claim within the Patent Rights in
such country covering such Licensed Product. If no Valid Claim of an issued
patent within the Patent Rights covering a particular Licensed Product exists in
a country, payments shall be payable in such country until the earlier of (i)
[*] of the Effective Date, or (ii) [*] of the first commercial sale of a
Licensed Product in such country; provided, in the event that a patent within
the Patent Rights containing a Valid Claim issues in such country, then GenVec
shall make payments with respect to such Valid Claim for the period set forth in
the second sentence above.
3.10 Information regarding [*]. In partial consideration of the rights
-------------------------
granted herein, GenVec shall provide to Scios during the term of this Agreement
general insights and information concerning the decision-making and development
processes utilized by GenVec in the development of [*]. Such discussions will be
participated in by GenVec representatives with appropriate expertise in the
relevant topics. The discussions shall include updates to Scios as the
understanding of these areas develops. During the interactions between Scios and
GenVec subject to this Section 3.10, GenVec need not disclose to Scios any
Confidential Information of GenVec except as it may pertain to a Licensed
Product, or any Confidential Information obtained from a third party. During the
period of cooperative activities subject to Section 2.3, GenVec may provide such
insights and information in the context of discussions regarding the development
of a Licensed Product. Thereafter, GenVec may provide such insight and
information to Scios in the context of another product or general education
regarding the gene therapy field. Following termination of the cooperative
activities subject to Section 2.3, GenVec shall not be required to meet with
Scios representatives more than twice per calendar year to provide information
under this Section, or participate in any such meetings more than five (5) years
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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following the date of termination of the cooperative activities subject to
Section 2.3. Such meeting may be held in person or by telephone or video
conference.
4. PAYMENTS
4.1 Payments. GenVec shall pay amounts due Scios pursuant to Article 3
--------
within [*] after the last day of the calendar quarter in which they are
received; provided, any amounts due with respect to Net Revenues subject to
Section 1.13 (a) or (b) shall be paid to Scios within [*] after such amounts are
received by GenVec. All payments due hereunder shall be made in U.S. dollars,
and shall be made by bank wire transfer in immediately available funds to an
account designated by Scios.
4.2 Currency Conversion. If any currency conversion shall be required in
-------------------
connection with the calculation of payments hereunder, such conversion shall be
made using the selling exchange rate for conversion of the foreign currency into
U.S. dollars, quoted for current "buy" transactions for purchasing U.S. dollars
as reported in The Wall Street Journal for the last business day of the calendar
-----------------------
quarter to which such payment pertains.
4.3 Restrictions on Payment. To the extent and as long as the laws and/or
-----------------------
regulations in force in any country prohibit the payment, conversion or
remittance of any of the payments as hereby contemplated, GenVec's obligations
under Article 4 may be discharged by the deposit thereof to the account of
GenVec, or its designee, in any commercial bank or trust company selected by
Scios located in such country; provided, that no infraction of law or regulation
occurs in making such deposit. If due to restrictions or prohibitions imposed
by national or international authority, pay ments cannot be made as aforesaid,
the parties shall consult with a view to finding a prompt and acceptable
solution, and GenVec will, from time to time, deposit such monies as Scios may
lawfully direct, at no additional out-of-pocket expense to GenVec and with no
further obligation to Scios.
4.4 Withholding Taxes. All amounts required to be paid to Scios pursuant
-----------------
to this Agreement may be paid with deduction for withholding for or on account
of any taxes (other than taxes imposed or measured by net income) or similar
governmental charge imposed on such payment by a jurisdiction other than the
United States ("Withholding Taxes"). GenVec agrees to take reasonable efforts
to structure its business arrangements in order to minimize the Withholding
Taxes, but shall have no obligation to follow any course of action or enter into
any business relationship which would have an adverse impact on GenVec or its
Affiliates or sublicensees, as reasonably determined by GenVec. Upon Scios'
request, GenVec shall provide Scios a certificate evidencing payment of any
Withholding Taxes hereunder.
5. REPORTS AND RECORDS
5.1 Net Profit Reports. GenVec shall deliver to Scios within [*] after
------------------
the end of each calendar quarter in which Licensed Products are sold a written
report setting forth in
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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reasonable detail, on a Licensed Product-by-Licensed Product basis, the
calculation of the amounts payable to Scios for such calendar quarter, including
the quantities of Licensed Products sold and the Net Revenues and Net Profits
with respect thereto. Such reports shall be Confidential Information of GenVec
subject to Article 7 herein.
5.2 Inspection of Books and Records. GenVec shall maintain accurate books
-------------------------------
and records which enable the calculation of amounts payable hereunder to be
verified. GenVec shall retain the books and records for each quarterly period
for [*] after the submission of the corresponding report under Section 5.1
hereof. Upon [*] prior notice to GenVec, independent accountants selected by
Scios, reasonably acceptable to GenVec, after entering into a confidentiality
agreement with GenVec in a form reasonably acceptable to GenVec, may have access
to the books and records of GenVec to conduct a review or audit once per
calendar year, for the sole purpose of verifying the accuracy of GenVec's
payments and compliance with this Agreement. The accountants shall report to
Scios only whether there has been an underpayment and, if so, the amount
thereof. Such access shall be permitted during GenVec's normal business hours at
agreed times during the term of this Agreement and for [*] after the expiration
or termination of this Agreement. Any such inspection or audit shall be at
Scios' expense, however, in the event an inspection reveals underpayment of [*]
or more in any audit period, GenVec shall pay the costs of the inspection.
6. DILIGENCE
6.1 Reasonable Efforts. GenVec agrees to use reasonable efforts to
------------------
diligently develop and commercialize at least one Licensed Product and obtain
such approvals as may be necessary for the sale of such Licensed Products in the
United States and such other worldwide markets as GenVec elects to commercialize
the Licensed Products. GenVec's efforts shall be comparable to those efforts
GenVec makes with respect to its other products of comparable value, stage of
development and patent protection. The selection of Licensed Products for
development and commercialization shall be in the sole discretion of GenVec, and
GenVec may satisfy its obligations under this Article 6 itself or through a
sublicensee. GenVec shall notify Scios within [*] after the first commercial
sale of each Licensed Product.
[*]
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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7. CONFIDENTIALITY; PUBLICATIONS
7.1 Confidential Information. Except as expressly provided herein, the
------------------------
parties agree that, for the term of this Agreement and for [*] thereafter, the
receiving party shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose except for the purposes
contemplated by this Agreement any Confidential Information furnished to it by
the disclosing party hereto pursuant to this Agreement, except that to the
extent that it can be established by the receiving party by competent proof that
such Confidential Information:
(i) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(ii) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;
(iii) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement;
(iv) was independently developed by the receiving party; or
(v) was lawfully disclosed to the receiving party by a person other
than a party hereto.
7.2 Permitted Use and Disclosures. Each party hereto may use or disclose
-----------------------------
information disclosed to it by the other party to the extent such use or
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with laws, governmental
regulations or court orders submitting information to tax or other governmental
authorities, conducting pre-clinical research and development or clinical
trials, making a permitted sublicense or otherwise exercising its rights
hereunder, provided that if a party is required to make any such disclosure of
another party's confidential information, other than pursuant to a
confidentiality agreement, it will give reasonable advance notice to the latter
party of such disclosure and, save to the extent inappropriate in the case of
patent applications, will use reasonable efforts to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or otherwise).
7.3 Public Disclosures. Except as expressly provided in this Article 7,
------------------
no disclosure or public announcement or other disclosure to third parties
concerning the existence of this Agreement shall be made, either directly or
indirectly, by any party to this Agreement, except as may be legally or
contractually required 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 of disclosure, which approval shall not be
unreasonably withheld. The party required to make any such public announcement
shall use its reasonable
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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efforts to inform the other party of the proposed announcement in reasonably
sufficient time prior to public release, and shall use its reasonable efforts to
provide the other party with a written copy thereof, in order to allow such
other party to comment upon such announcement. Once a particular disclosure has
been approved, further disclosures which do not differ materially therefrom may
be made without obtaining any further consent of the other party.
7.4 Confidential Terms. Except as expressly provided herein, each party
------------------
agrees not to disclose any terms of this Agreement to any third party without
the consent of the other party; provided, reasonable disclosures may be made as
required by securities or other applicable laws, or to actual or prospective
investors or corporate partners, or to a party's accountants, attorneys and
other professional advisors.
8. REPRESENTATIONS AND WARRANTIES
8.1 Scios. Scios represents and warrants that: (i) it is a corporation
-----
duly organized, validly existing and in good standing under the laws of
Delaware; (ii) when executed and delivered, this Agreement will become valid and
binding on Scios, and enforceable against Scios in accordance with its terms;
(iii) the execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action on the part of Scios; (iv) it is
the sole and exclusive owners of all right, title and interest in the Patent
Rights and the Know-How; (v) it has the right to grant the rights and licenses
granted herein; (vi) the Patent Rights and Know-How are free and clear of any
lien, encumbrance, security interest or restriction on license; (vii) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to the Patent Rights and Know-How, or any
portion thereof, inconsistent with the license granted to GenVec herein; and
(viii) there are no threatened or pending actions, suits, investigations, claims
or proceedings in any way relating to the Patent Rights or Know-How.
8.2 GenVec. GenVec represents and warrants that: (i) it is a corporation
------
duly organized validly existing and in good standing under the laws of the State
of Delaware; (ii) when executed and delivered, this Agreement will become valid
and binding on GenVec, and enforceable against GenVec in accordance with its
terms; (iii) the execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action on the part of GenVec, and
(iv) as of the Effective Date, without conducting any inquiry, GenVec is not
aware of threatened or pending actions, suits, investigations, claims or
proceedings in any way relating to issued patents which GenVec necessarily must
acquire license or other rights to in order to commercialize the Licensed
Technology.
9. INTELLECTUAL PROPERTY
9.1 Ownership. Title to all inventions and other intellectual property
---------
made solely by or on behalf of GenVec during the term of the Agreement shall be
owned by GenVec. Title to all inventions and other intellectual property made
solely by or on behalf of Scios during the term of the Agreement shall be owned
by Scios. Title to all inventions and other intellectual property made
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jointly by or on behalf of Scios and GenVec during the term of the Agreement
shall be jointly owned by GenVec and Scios (each a "Joint Invention").
Inventorship of inventions and other intellectual property rights conceived
and/or reduced to practice by the parties and ownership rights with respect
thereto, shall be determined in accordance with the patent laws of the United
States.
9.2 Patent Prosecution.
------------------
[*]
9.2.3 Joint Inventions.
----------------
[*]
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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[*]
9.2.4 GenVec Responsibilities. GenVec shall, at its sole expense,
-----------------------
have the right to control the preparation, filing, prosecution and maintenance
of any patent applications and patents solely owned by it, and any
interferences, re-examinations, reissues and oppositions relating thereto, using
patent counsel of its choice.
9.3 Copies. Upon request by GenVec, Scios shall provide to GenVec a copy
------
of any patent applications within the Patent Rights filed by Scios or its
Affiliates during the term of this Agreement promptly after such application is
filed. GenVec shall treat such patent applications as Confidential Information
of Scios until such applications are published.
9.4 Enforcement. If either party hereto becomes aware that any Patent
-----------
Rights (including, without limitation, patents claiming any Joint Invention) are
being or have been infringed by any third party or are subject to a declaratory
judgment action, or that any Know-How has been misappropriated by a third party,
such party shall promptly notify the other party hereto in writing describing
the facts relating thereto in reasonable detail.
[*]
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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[*]
9.6 Patent Term Extensions. With respect to patents within the Patent
----------------------
Rights, if Scios has not itself earlier applied for a patent extension or other
governmental equivalent available under applicable law with respect to a
particular patent, at GenVec's request following approval of a Licensed Product,
Scios shall, unless Scios or another Scios licensee is developing a product
within the scope of such patent and such product has entered Phase II clinical
trials as of the date of
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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GenVec's request and Scios notifies GenVec that it intends to file a request for
a patent extension or equivalent based on such other product, designate GenVec
(or its designee) as Scios' agent for obtaining an extension of such patent or
governmental equivalent which extends the exclusivity of any of the patent
subject matter where available in any country in the world, or if not feasible,
at GenVec's option, permit GenVec to file in Scios' name to obtain such
extension for GenVec or its sublicensee(s), at GenVec's expense. Furthermore,
Scios and its Affiliates agree to provide reasonable assistance to facilitate
GenVec's or its sublicensees' efforts to obtain any such extension. In the event
that GenVec elects not to seek such an extension or equivalent in any country it
shall notify Scios, and Scios shall have the right to seek such an extension or
equivalent in such country, at its expense.
9.7 [*]. As of the Effective Date, GenVec has disclosed to Scios certain
---
publications relating to [*] which GenVec believes may be relevant to the
commercialization of the Licensed Technology.
10. DISPUTE RESOLUTION
10.1 Mediation. If a dispute arises out of or relates to this contract, or
---------
the breach thereof, and if said dispute cannot be settled through negotiation,
the parties agree first to try in good faith to settle the dispute by mediation
under the Commercial Mediation Rules of the American Arbitration Association
before resorting to arbitration, litigation, or some other dispute resolution
procedures.
10.2 Arbitration. Scios and GenVec agree that any dispute or controversy
-----------
arising out of, in relation to, or in connection with this Agreement, or the
validity, enforceability, construction, performance or breach thereof, which is
not resolved by mediation shall be settled by binding arbitration in Rockville,
Maryland, under the then-current Commercial Arbitration Rules and Supplemental
Procedures for Large, Complex Disputes of the American Arbitration Association
by one (1) arbitrator appointed in accordance with such Rules. The arbitrators
shall determine what discovery will be permitted, based on the principle of
limiting the cost and time which the parties must expend on discovery; provided,
the arbitrators shall permit such discovery as they deem necessary to achieve an
equitable resolution of the dispute. The decision and/or award rendered by the
arbitrator shall be written, final and non-appealable and may be entered in any
court of competent jurisdiction. The parties agree that, any provision of
applicable law notwithstanding, they will not request, and the arbitrator shall
have no authority to award, punitive or exemplary damages against any party.
The costs of any arbitration, including administrative fees and fees of the
arbitrator, shall be shared equally by the parties. Each party shall bear the
cost of its own attorneys' fees and expert fees.
11. INDEMNIFICATION
11.1 GenVec. GenVec shall indemnify, defend and hold harmless Scios and
------
its directors, officers, employees and agents (each a "Scios Indemnitee") from
and against any and all liabilities,
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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damages, losses, costs or expenses (including reasonable attorneys' and
professional fees and other expenses of litigation and/or arbitration) (a
"Liability") resulting from any claim, suit or proceeding brought by a third
party against a Scios Indemnitee, arising out of or in connection with (i) any
misrepresentation with regard to, or breach of, any of the representations and
warranties of GenVec set forth in Section 8.2, or (ii) the use by GenVec or its
sublicensees of the biological materials provided by Scios to GenVec, or the
development, manufacture, use and sale of Licensed Products by GenVec or its
sublicensees, except, in each case, to the extent due to the negligence or
willful misconduct of Scios.
11.2 Scios. Scios shall indemnify, defend and hold harmless GenVec and its
-----
directors, officers, employees and agents (each a "GenVec Indemnitee") from and
against any and all liabilities, damages, losses, costs or expenses (including
reasonable attorneys' and professional fees and other expenses of litigation
and/or arbitration) (a "Liability") resulting from any claim, suit or proceeding
brought by a third party against a GenVec Indemnitee, arising out of or in
connection with any misrepresentation with regard to, or breach of, any of the
representations and warranties of Scios set forth in Section 8.1, except, to the
extent due to the negligence or wilful misconduct of GenVec.
11.3 Procedure. In the event that any Indemnitee intends to claim
---------
indemnification under this Article 11 it shall promptly notify the other party
in writing of such alleged Liability. The indemnifying party shall have the
right to control the defense thereof. The affected Indemnitees shall cooperate
fully with the indemnifying party and its legal representatives in the
investigation and conduct of any Liability covered by this Article 11. The
Indemnitee shall not, except at its own cost, voluntarily make any payment or
incur any expense with respect to any claim, suit or Liability, or make any
admission of liability or attempt to settle any claim without the prior written
consent of the indemnifying party, which such party shall not be required to
give.
12. TERM AND TERMINATION
12.1 Term. The term of this Agreement shall commence on the Effective
----
Date, and unless earlier terminated as provided in this Article 12, shall
continue in full force and effect on a country-by-country and Licensed Product-
by-Licensed Product basis until there are no remaining payment obligations in a
country, at which time the Agreement shall expire in its entirety in such
country. Notwithstanding the above, upon the expiration of this Agreement in
any country, GenVec shall have a non-exclusive, irrevocable, fully paid-up right
and license to use and exploit the Know-How for any purpose.
12.2 Termination for Cause. If either party materially breaches this
---------------------
Agreement, the other party may elect to give the breaching party written notice
describing the alleged breach. If the breaching party has not cured such breach
or is diligently seeking to cure such breach within [*] after receipt of such
notice, the notifying party will be entitled, in addition to any other rights it
may have under this Agreement, to terminate this Agreement effective
immediately; provided, however, if either party receives notification from the
other of a material breach and if the party alleged to be in default notifies
the other party in writing within [*] of receipt
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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of such default notice that it disputes the asserted default, the matter will be
submitted to dispute resolution as provided in Article 10 of this Agreement. In
such event, the nonbreaching party shall not have the right to terminate this
Agreement until it has been determined in an arbitration proceeding that the
other party materially breached this Agreement, and the breaching party fails to
cure such breach within [*] after the conclusion of such arbitration proceeding.
12.3 Termination for Insolvency. Either party may terminate this Agreement
--------------------------
if the other becomes the subject of a voluntary or involuntary petition in
bankruptcy or any proceeding relating to insolvency, receivership, liquidation,
or composition or the benefit of creditors, if that petition or proceeding is
not dismissed with prejudice within [*] after filing.
12.4 Termination for Impracticability. GenVec may terminate this Agreement
--------------------------------
with [*] written notice to Scios if GenVec or a GenVec sublicensee encounters
significant technical, safety or efficacy difficulties in the development,
manufacture or commercialization of a Licensed Product within the Patent Rights
which would make the commercialization of such a Licensed Product commercially
impracticable.
12.5 Effect of Termination.
---------------------
12.5.1 Accrued Rights and Obligations. Termination of this Agreement
------------------------------
for any reason shall not release any party hereto from any liability which, at
the time of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination, nor preclude either party
from pursuing any rights and remedies it may have hereunder or at law or in
equity which accrued or are based upon any event occurring prior to such
termination.
12.5.2 Return of Confidential Information. Upon any termination of
----------------------------------
this Agreement, each party shall promptly return to the other party all
Confidential Information received from the other party (except one copy of which
may be retained for archival purposes).
12.5.3 Stock on Hand. In the event this Agreement is terminated
-------------
for any reason, until [*] after the effective date of such a termination GenVec
and its sublicensees shall have the right to sell or otherwise dispose of the
stock of any Licensed Product subject to this Agreement then on hand, subject to
Articles 4 and 5.
12.5.4 Sublicensees. In the event of any termination of this
------------
Agreement any sublicensees granted by GenVec shall remain in force and effect
and shall be assigned by GenVec to Scios, provided, however, that the financial
obligations of each sublicense to Scios shall be limited to the amounts GenVec
would have been obligated to pay to Scios for the activities of such sublicensee
pursuant to this Agreement
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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12.6 Survival. Sections 9.1, 9.2.3, 9.2.4, 9.5, 12.5 and 12.6, and
--------
Articles 4 (with respect to Licensed Products sold prior to such termination or
pursuant to Section 12.5.3), 5, 7, 8, 10, 11 and 13 of this Agreement shall
survive termination of this Agreement for any reason.
13. MISCELLANEOUS
13.1 Governing Law. This Agreement and any dispute arising from the
-------------
performance or breach hereof shall be governed by and construed in accordance
with the laws of the State of Maryland, without reference to principles of
conflicts of laws.
13.2 Independent Contractors. The relationship of the parties hereto is
-----------------------
that of independent contractors. The parties hereto are not deemed to be
agents, partners or joint venturers of the others for any purpose as a result of
this Agreement or the transactions contemplated thereby.
13.3 Assignment. Neither party may assign this Agreement without the prior
----------
written consent of the other, which consent shall not be unreasonably withheld;
provided, however, either party may assign this Agreement in connection with a
transfer of all or substantially all of its assets relating to the agreements,
whether by sale, merger, operation of law or otherwise. This Agreement shall be
binding upon and inure to the benefit of the parties and their permitted
successors and assigns.
13.4 Notices. Any required notices hereunder shall be given in writing by
-------
certified mail or overnight express delivery service at the address of each
party below, or to such other address as either party may indicate on its behalf
by written notice. Notice shall be deemed served when delivered or, if delivery
is not accomplished by reason or some fault of the addressee, when tendered.
If to Scios: Scios Inc.
2450 Bayshore Parkway
Mountain View, CA 94043
Attention: General Counsel
with a copy to: Vice President, Business Development
If to GenVec: GenVec, Inc.
12111 Parklawn Drive
Rockville, MD 20852
Attention: President
with a copy to: Vice President, Corporate Development
13.5 Force Majeure. Neither party shall lose any rights hereunder or be
-------------
liable to the other party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or
any other
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reason where failure to perform is beyond the reasonable control and not caused
by the negligence, intentional conduct or misconduct of the nonperforming party
and the nonperforming party has exerted all reasonable efforts to avoid or
remedy such force majeure; provided, however, that in no event shall a party be
required to settle any labor dispute or disturbance.
13.6 Compliance with Laws. Each party shall furnish to the other party any
--------------------
information related to the subject matter of this Agreement requested or
required by that party during the term of this Agreement or any extensions
hereof to enable that party to comply with the requirements of any U.S. or
foreign federal, state and/or government agency.
13.7 Covenant Not To Sue. During the term of this Agreement, Scios agrees
-------------------
not to assert or enforce against GenVec or any GenVec sublicensee any
intellectual property right owned or controlled by Scios or its Affiliates which
GenVec or its sublicensees may infringe or practice in connection with the
development, manufacture, use, import, sale or other commercialization of any
Licensed Product.
13.8 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
-----------------------
FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF
THE PERFORMANCE OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF
LIABILITY.
13.9 Advice of Counsel. GenVec and Scios have each consulted counsel of
-----------------
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.
13.10 Further Assurances. At any time or from time to time on and after
------------------
the date of this Agreement, either party shall at the request of the other party
(i) deliver to the requesting party such records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
assignment, transfer or license, and (iii) take or cause to be taken all such
actions, as the requesting party may reasonably deem necessary or desirable in
order for the requesting party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.
13.11 Severability. In the event that any provisions of this Agreement are
------------
determined to be invalid or unenforceable by a court of competent jurisdiction,
the remainder of the Agreement shall remain in full force and effect without
said provision. The parties shall in good faith negotiate a substitute clause
for any provision declared invalid or unenforceable, which shall most nearly
approximate the intent of the parties in entering this Agreement; provided, if
the parties are unable to agree on such a substitute clause and the deletion of
the provision held invalid or unenforceable would produce material adverse
financial consequences for one party, such party shall have the right to
terminate the Agreement with one hundred eighty (180) days notice.
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13.12 Waiver. The failure of a party to enforce any provision of the
------
Agreement shall not be construed to be a waiver of the right of such party to
thereafter enforce that provision or any other provision or right.
13.13 Entire Agreement; Amendment. This Agreement including, its Exhibits,
---------------------------
sets forth the entire agreement and understanding of the parties with respect to
the subject matter hereof, and supersedes all prior discussions, agreements and
writings in relating thereto including, without limitation, the Confidentiality
Agreement entered by the parties dated March 14, 1996. This Agreement may not be
altered, amended or modified in any way except by a writing signed by both
parties.
13.14 Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed an original and which together shall constitute
one instrument.
IN WITNESS WHEREOF, Scios and GenVec have executed this Agreement by their
respective duly authorized representatives.
SCIOS INC. GENVEC, INC.
By:___________________________ By:___________________________
Print Name:___________________ Print Name:___________________
Title:________________________ Title:________________________
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EXHIBIT 10.8
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is entered into as of the 26th day of September 1997, by and
between GenVec, Inc., a Delaware corporation with its principal place of
business at 12111 Parklawn Drive, Rockville, Maryland 20852 (the "Company"), and
FUSO Pharmaceutical Industries, Ltd., a corporation organized under the laws of
Japan, with its principal place of business at 3-11, 2-Chome, Morinomiya, Joto-
ku, Osaka 536, Japan and its registered head office at 7-10 1-Chome, Doshomachi,
Chuo-ku, Osaka 541, Japan (the "Investor"), with reference to the following
recitals:
WHEREAS, the Company was incorporated on December 7, 1992, under the laws
of the State of Delaware;
WHEREAS, the Company and the Investor have entered into a Collaboration
Agreement, dated as of the date hereof and a Commercialization Agreement, dated
as of the date hereof (the "Collaboration and Commercialization Agreements"),
pursuant to which the Company has granted to the Investor a license to certain
intellectual property described in the Collaboration and Commercialization
Agreements for the uses described in the Collaboration and Commercialization
Agreements and the Company and the Investor have agreed to collaborate to
conduct research and develop certain gene therapy products for the treatment of
human cancer (the "Collaboration"); and
WHEREAS, the Investor desires to purchase certain of the shares of the
capital stock of the Company on the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements, undertakings and
covenants set forth in this Agreement, and for other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
1. Terms of Sale. Subject to the terms and conditions of this Section 1,
-------------
the Company will issue and sell to the Investor, and the Investor will purchase
from the Company, 444,445 shares of the Company's Class E Convertible Preferred
Stock, par value $.01 per share (the "Shares"), for an aggregate purchase price
of one million one and 25/100 U.S. dollars ($1,000,001.25). On or before the
fourteenth (14th) business day after the date hereof, the Investor will deliver
to the Company a certified bank check, payable to the order of the Company, or a
wire transfer of immediately available funds, in an amount of one million one
and 25/100 U.S. dollars ($1,000,001.25) in payment for the Shares. Upon receipt
of such payment by the Company on a business day, subject to receipt of
stockholder approval ("Stockholder Approval") of the Company's Restated
Certificate of Incorporation attached hereto as Exhibit A (the "Restated
---------
Certificate"), the Investor will be deemed to be the holder of record of the
Shares and the Company will promptly execute a certificate evidencing issuance
to the Investor of the appropriate number of fully-paid and non-assessable
Shares.
<PAGE>
2. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants that:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) The Company has all necessary corporate power to enter into this
Agreement, and, subject to receipt of Stockholder Approval, to issue and deliver
the Shares hereunder and to carry out all of the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby, including,
without limitation, the issuance of the Shares, will, subject to receipt of
Stockholder Approval, be duly authorized by all requisite corporate action on
the part of the Company. This Agreement constitutes a valid and binding
instrument of the Company, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(c) Upon receipt of Stockholder Approval, the Company's authorized
capital stock will consist of (i) 52,005,095 shares of Common Stock, par value
$.01 per share, 5,687,473 of which are outstanding; (ii) 1,334,000 shares of
Class A Convertible Preferred Stock, par value $.01 per share, 1,334,000 of
which are outstanding; (iii) 11,800,468 shares of Class B Convertible Preferred
Stock, par value $.01 per share, 11,320,314 of which are outstanding; (iv)
21,065,000 shares of Class C Convertible Preferred Stock, par value $.01 per
share, 21,065,000 of which are outstanding; (v) 2,000,000 shares of Class D
Convertible Preferred Stock, par value $.01 per share, 571,429 of which are
outstanding and (vi) 444,445 shares of Class E Convertible Preferred Stock, par
value $.01 per share, none of which are outstanding. All outstanding shares of
capital stock are, and the Shares, when issued in accordance with or as
contemplated by the terms of this Agreement, will be, validly issued and
outstanding, fully paid and non-assessable. The shares of Common Stock issuable
upon conversion of the Shares are duly and validly authorized and reserved for
issuance. Each share of Class E Convertible Preferred Stock will be convertible
into a share or shares of Common Stock, at the rate, and otherwise has the
designations, preferences, limitations and rights, provided for in Article NINTH
of the Restated Certificate.
(d) The Company has made available to the Investor the Company's
audited financial statements for its most recent fiscal year and unaudited
financial statements for its most recent interim period, in each case, to the
extent available. As of the date of this Agreement, the financial statements
provided are attached hereto as Exhibit B. The annual statements have been
---------
prepared in a manner consistent with generally accepted accounting principles in
the United States ("GAAP") and the interim financial statements have been
prepared in a manner consistent with the annual financial statements (subject to
normal year-end audit adjustments and the omission of footnotes required by
GAAP).
(e) The Company has no liabilities, except: (i) as disclosed or
reflected in the financial statements attached hereto as Exhibit B; (ii)
---------
liabilities not in excess of two hundred fifty thousand U.S. dollars
($250,000.00); or (iii) as disclosed on Exhibit C.
---------
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(f) To the Company's knowledge, there are neither any pending nor
threatened suits, legal proceedings, claims or governmental investigations
against or with respect to the Company or its properties or assets nor any basis
for any such suit, legal proceedings, claim or governmental investigation.
3. Representations and Warranties of the Investor. The Investor hereby
----------------------------------------------
represents and warrants that:
(a) The Investor is acquiring the Shares for purposes of investment
for its own account and not with a view to, or for resale in connection with,
the distribution thereof, as those terms are used in the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations promulgated
thereunder. The Investor has been advised and acknowledges that it will not be
able to dispose of the Shares, or any interest therein, without first complying
with the relevant provisions of the Securities Act and any applicable state
laws. The Investor also understands that the provisions of Rule 144 promulgated
under the Securities Act, permitting routine sales of securities of certain
issuers subject to the terms and conditions thereof, are not currently available
to it with respect to the Shares. The Investor acknowledges that the Company is
under no obligation to register the Shares or to take any action to assist the
Investor in complying with terms and conditions of any exemption that might be
available under the Securities Act or any state securities laws with respect to
sales of the Shares by the Investor in the future.
(b) The Investor has all corporate power to enter into this Agreement
and to carry out all of the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Investor and the consummation
of the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of the Investor. This Agreement
constitutes a valid and binding instrument of the Investor, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(c) The Investor is an "accredited investor," as that term is defined
in Rule 501 promulgated under the Securities Act.
(d) The Investor either is (i) not an "Investment Company," as that
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or (ii) excluded from the definition of an Investment
Company under Section 3(c)(1) of the Investment Company Act.
(e) The Investor acknowledges that the representations, agreements and
acknowledgments set forth above are being given by the Investor with the
understanding that they will be relied on by the Company and its Board of
Directors to claim the availability of the exemption from the registration
provisions of the Securities Act contained in Regulation D promulgated
thereunder.
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<PAGE>
(f) The Investor believes that it has received all the information it
considers necessary or appropriate for deciding whether to purchase the Shares.
In addition, it has had an opportunity to discuss the Company's business,
management, and financial affairs with the Company's management and to review
the Company's facilities. It has had an opportunity to ask questions of
officers of the Company, which questions were answered to the Investor's
satisfaction. It understands that its discussions, as well as the written
information given to it by the Company, were intended to describe the aspects of
the Company's business and prospects which the Company believes to be material,
but were not necessarily a thorough or exhaustive description. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 hereof or the right of the Investor to rely thereon.
4. Covenants of the Company. The Company hereby covenants that, so long
------------------------
as (i) the Investor owns any shares of the Company's Class E Convertible
Preferred Stock or shares of Common Stock into which such shares of Class E
Convertible Preferred Stock have been converted and (ii) the Company has not
consummated an underwritten public offering of Common Stock pursuant to one or
more registration statements filed under the Securities Act (or any successor
statute), the Company shall furnish to the Investor the financial statements and
reports described in (a) and (b) of this section, such annual financial
statements to be prepared in accordance with generally accepted accounting
principles in the United States consistently applied (except as may be noted
therein) and such interim financial statements to be prepared in a manner
consistent with the annual financial statements (subject to normal year-end
audit adjustments and the omission of footnotes), certified by the Company's
chief executive or financial officer:
(a) As soon as available, and in any event within 120 days after the
end of each fiscal year of the Company, a balance sheet of the Company as of the
end of such fiscal year and related statements of operations, stockholders'
equity and cash flows for such fiscal year, all in reasonable detail and setting
forth in comparative form the figures as of the end of and for the previous
fiscal year, which financial statements shall have been audited and shall be
accompanied by an opinion addressed to the Company from independent auditors;
and
(b) As soon as available, and in any event within 60 days after the
end of each fiscal quarter of the Company, an unaudited balance sheet and
unaudited statements of operations and cash flows.
5. Covenants of the Investor.
-------------------------
(a) The Investor agrees that it will not sell, assign, pledge,
hypothecate, encumber or in any other manner transfer or dispose (a "Transfer")
of the Shares or any shares of Common Stock into which such Shares have been
converted (collectively, the "Securities") during the Research Program Term (as
defined in the Collaboration Agreement), without express written consent from
the Company.
(b) Before any Securities held by the Investor may be sold or
otherwise transferred (including transfer by gift or operation of law), the
Company shall have a right of first
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<PAGE>
refusal to purchase the Securities on the terms and conditions set forth in this
Section 5(b) (the "Right of First Refusal").
(i) Notice of Proposed Transfer. The Investor shall deliver to
---------------------------
the Company a written notice (the "Notice") stating: (A) the Investor's bona
fide intention to sell or otherwise transfer such Securities; (B) the name of
each proposed purchaser or other transferee ("Proposed Transferee"); (C) the
number of Securities to be transferred to each Proposed Transferee; and (iv) the
bona fide cash price or other consideration for which the Investor proposes to
transfer the Securities (the "Offered Price"), and the Investor shall offer the
Securities at the Offered Price to the Company.
(ii) Exercise of Right of First Refusal. At any time within
----------------------------------
thirty (30) days after receipt of the Notice, the Company may, by giving written
notice to the Investor, elect to purchase all, but not less than all, of the
Securities proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection
(b)(iii) below.
(iii) Purchase Price. The purchase price ("Purchase Price") for
--------------
the Securities purchased by the Company under this Section 5(b) shall be the
Offered Price. If the Offered Price includes consideration other than cash, the
cash equivalent value of the non-cash consideration shall be determined by the
Board of Directors of the Company in good faith.
(iv) Payment. Payment of the Purchase Price shall be made in
-------
cash (by certified bank check, payable to the order of the Investor, or wire
transfer of immediately available funds) within thirty (30) days after receipt
of the Notice or in the manner and at the times set forth in the Notice.
(v) Holder of Company Securities' Right to Transfer. If all of
-----------------------------------------------
the Securities proposed in the Notice to be transferred to a given Proposed
Transferee are not purchased by the Company as provided in this Section 5(b),
then the Investor may sell or otherwise transfer such Securities to the Proposed
Transferee at the Offered Price or at a higher price, provided that (i) such
sale or other transfer is consummated within ninety (90) days after the date of
the Notice; (ii) any such sale or other transfer is effected in accordance with
any applicable securities laws; and (iii) the Proposed Transferee agrees in
writing to be bound by the obligations of the Investor set forth in this
Agreement. If the Securities described in the Notice are not transferred to the
Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company shall again be offered the Right of First Refusal
before any Securities held by the Investor may be sold or otherwise transferred.
(vi) Termination of Right of First Refusal. The Right of First
-------------------------------------
Refusal shall terminate upon an initial underwritten public offering of the
Company's securities.
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<PAGE>
(c) The Investor agrees to hold the Securities subject to all
applicable provisions of the Securities Act, the Restated Certificate and the
Amended and Restated Bylaws of the Company and this Agreement.
(d) The Investor shall give the Company prompt written notice of any
proposed disposition of the Securities and shall not proceed with any such
proposed disposition without the express written consent required by paragraph
(a) of this Section 5 and unless a registration statement under the Securities
Act is in effect with respect to the Securities and any applicable state
securities laws have been complied with or unless the Company shall have
received an opinion of counsel, satisfactory to the Company, to the effect that
such registration is not required. In addition, the Investor agrees the
certificates representing the Securities issued to it pursuant hereto may bear
the following or similar legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT
OF FIRST REFUSAL AND A CONTRACTUAL LIMITATION ON THEIR
ASSIGNMENT, PLEDGE, HYPOTHECATION, ENCUMBRANCE, TRANSFER OR OTHER
DISPOSITION DESCRIBED IN THE STOCK PURCHASE AGREEMENT DATED
SEPTEMBER 25, 1997. IN ADDITION, THE SHARES HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE. NEITHER THE SHARES NOR ANY INTEREST OR
PARTICIPATION IN THE SHARES MAY BE SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR
DISPOSED OF THE IN ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SHARES UNDER THE SECURITIES ACT, UNLESS, IN THE OPINION
(WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE
CORPORATION) OF COUNSEL SATISFACTORY TO THE CORPORATION, SUCH
REGISTRATION IS NOT REQUIRED.
(e) The Investor agrees not to disclose to third parties any
confidential or proprietary information concerning the Company which is
furnished to the Investor by the Company except as required by law or legal
process. the term "confidential information" does not include information which
(i) was or becomes generally available to the public other than as a result of a
disclosure by such Investor, or (ii) was or becomes available to such Investor
on a non-confidential basis from a source other than the Company, provided that
such source is not bound by a confidentiality agreement with the Company.
(f) The Investor agrees in connection with the Company's initial
underwritten public offering of the Company's securities, (1) not to sell, make
short sale of, loan, grant any options for the purchase of, or otherwise dispose
of any securities of the Company (other than those securities included in the
registration) without the prior written consent of the Investor or the
underwriters managing such initial underwritten public offering of the Company's
securities (the "Managing Underwriter") for one hundred eighty (180) days, or
such longer period of time as may be
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<PAGE>
requested by the Managing Underwriter, from the effective date of such
registration, and (2) further agrees to execute any agreement reflecting (1)
above as may be requested by the Managing Underwriter. The Investor shall cause
any proposed purchaser, assignee, transferee or pledgee of any shares held by
the Investor to agree to take and hold such securities subject to this Section
5(f).
(g) The Investor agrees that it will not, directly or indirectly,
acquire, offer to acquire, agree to acquire, become the beneficial owner of or
obtain any rights in respect of any capital stock of the Company, by purchase or
otherwise, except as contemplated by this Agreement or as otherwise expressly
agreed to in writing by the Company.
6. Opinion of Counsel. On or before September 25, 1997, the Company's
------------------
counsel will deliver to the Investor an opinion, in form and substance
reasonably satisfactory to the Investor, that the Shares, when sold and
delivered in accordance with this Agreement, will be duly authorized, validly
issued and outstanding, fully paid and non-assessable.
7. Miscellaneous
-------------
(a) Amendments and Waivers. This Agreement and any provision hereof
----------------------
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought, provided, however, a change, waiver,
discharge or termination signed by a majority of the holders of the Securities
shall be deemed to be binding on all holders of Securities at the time
outstanding and each future holder of such Securities.
(b) Successors and Assigns. This Agreement will be binding upon and
----------------------
inure to the benefit of the successors and assigns of the Company and the
successors and permitted assigns of the Investor.
(c) Transferability. The Investor may not transfer or assign this
---------------
Agreement, or any of the rights or obligations hereunder, unless it is
transferred or assigned to the purchaser of all of the outstanding capital stock
or all or substantially all of the assets of the Investor, including every right
and interest the Investor may have in the Collaboration Agreement. The Investor
further agrees that prior to any transfer of this Agreement, consistent with
this Section, or any transfer of the Securities, the Investor shall comply with
all provisions of Section 5 of this Agreement.
(d) Law Governing. This Agreement will be governed by, and construed
-------------
and enforced in accordance with, the internal laws of the State of Delaware.
(e) Notices. Unless otherwise provided, all notices, requests,
-------
demands and other communications required or permitted under this Agreement will
be in writing and will be deemed to have been duly made and received: (i) upon
personal delivery or confirmed facsimile to the party to be notified; (ii) seven
(7) business days after deposit with the Unites States Post Office, by
registered or certified mail or by first class mail, postage prepaid, addressed
as set forth below (or Japanese equivalent of the foregoing); or (iii) two (2)
business days after deposit with Federal Express or
-7-
<PAGE>
another reputable overnight courier (for two business day delivery), shipping
prepaid, addressed as set forth below:
(i) if to the Company, then to:
GenVec, Inc.
12111 Parklawn Drive
Rockville, MD 20852
Attn: President
with a copy to:
Attn: Chief Financial Officer
(ii) If to the Investor, then to:
FUSO Pharmaceutical Industries, Ltd.
3-11, 2-Chome Morinomiya, Joto-ku
Osaka 536, Japan
Attn: President
with a copy to:
Attn: Chief Financial Officer
Either party may change the address to which communications are to be sent by
giving five (5) business days' advance notice of such change of address to the
other party in conformity with the provisions of this Section.
(f) Headings. The headings in this Agreement are for purposes of
--------
reference only and will not affect the meaning or construction or any of the
provisions hereof.
(g) Execution; Counterparts. This Agreement may be executed in any
-----------------------
number of counterparts, each of which will be deemed to be an original as
against any party whose signature appears on such counterpart, and all of which
will together constitute one and the same instrument. This Agreement will become
binding when one or more counterparts of this Agreement, individually or taken
together, bear the signatures of all of the parties to this Agreement.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement
as of the date first above written.
FUSO Pharmaceuticals Industries, Ltd.
By:______________________________________
Mikio Toda
President
GenVec, Inc.
By:______________________________________
Paul H. Fischer, Ph.D.
President and Chief Executive Officer
-9-
<PAGE>
Exhibit A
State of Delaware
Office of the Secretary of State PAGE 1
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF
"GENVEC, INC.", FILED IN THIS OFFICE ON THE TWENTY-SIXTH DAY OF JUNE, A.D. 1996,
AT 9:05 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
GENVEC, INC.
The undersigned, Thomas W. D'Alonzo, President of GenVec, Inc., a
corporation organized and existing under the laws of the State of Delaware (the
"Corporation"), does hereby certify as follows:
1. The present name of the Corporation is GenVec, Inc.
2. The original Certificate of Incorporation of the Corporation was filed
in the Office of the Secretary of State of the State of Delaware on December 7,
1992.
3. This Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Section 245 of the Delaware General
Corporation Law, the Board of Directors having duly adopted resolutions
declaring advisable this Restated Certificate of Incorporation.
4. This Restated Certificate of Incorporation is being filed pursuant to
Section 245 of the Delaware General Corporation Law in order to restate and
integrate the Certificate of Incorporation of the Corporation. This Restated
Certificate of Incorporation does not further amend the provisions of the
Certificate of Incorporation of the Corporation as amended previously, and there
is no discrepancy between those provisions and the provisions of this Restated
Certificate of Incorporation.
5. The Certificate of Incorporation of the Corporation is hereby restated
in its entirety as follows:
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF GENVEC, INC.
FIRST: The name of the Corporation is:
GENVEC, INC.
SECOND: The address of its registered office in the State of Delaware
is: Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801. The name of its registered agent at such address is:
THE CORPORATION TRUST COMPANY.
THIRD: The nature of the business or purposes to be conducted or promoted
is:
To have unlimited power to engage in any lawful act or activity for
which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The name and mailing address of the incorporator is as follows:
Name Address
---- -------
Raymond D. Agran 12th Floor Packard Building
15th and Chestnut Streets
Philadelphia, PA 19102
FIFTH: In furtherance and not in limitation of the powers conferred by
statute, the board of directors of the Corporation is expressly authorized to
make, alter or repeal the Bylaws of the Corporation.
SIXTH: Elections of directors need not be by written ballot unless the
Bylaws of the Corporation shall so provide.
SEVENTH:
A. Elimination of Certain Liabilities of Directors. A director of the
-----------------------------------------------
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director;
provided, however, that this shall not exempt a director from liability: (i) for
- -----------------
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the General Corporation Law of the State of Delaware, or (iv) for any
transaction from which a director derived an improper personal benefit. If the
Delaware General Corporation Law is hereafter amended to authorize the further
elimination or limitation of liability of directors, then the liability of a
director of the Corporation, in addition to the limitation on personal
-1-
<PAGE>
liability provided herein, shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Corporation existing
at the time of such repeal of modification.
B. Indemnification and Insurance.
-----------------------------
(1) Right to Indemnification. Each person who was or is made a party
------------------------
or is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
for whom he or she is the legal representative, is or was a director or officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, the rights of
indemnification provided hereby shall continue as theretofore notwithstanding
such amendment unless such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors, administrators and personal
representatives; provided, however, that, except as provided in Section (B)(2)
-------- -------
of this Article, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) authorized by
the board of directors of the Corporation.
The right to indemnification conferred in this section shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided however, that, if the Delaware General Corporation Law
-------- -------
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this section or
otherwise. The Corporation may, by action of its board of directors, provide
indemnification to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and officers.
-2-
<PAGE>
(2) Right of Claimant to Bring Suit. A claimant may bring suit
-------------------------------
against the Corporation under Section (B)(1) of this Article only if the
Corporation fails to pay in full within thirty days of its receipt of a written
claim for payment hereunder. If successful in whole or in part, the claimant
shall be entitled to be paid also the expense of prosecuting such claim
(including, but not limited to, attorneys' fees. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending an any proceeding in advance of its final disposition
where the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct that make it
permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed, but the burden of providing such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its board of directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
(3) Non-Exclusivity of Rights. The right to indemnification and the
-------------------------
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this section shall not be exclusive of any other right
that any person may have or hereafter acquire under any statute, provision of
the Certificate of Incorporation, bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
(4) Insurance. The Corporation may maintain insurance, at its
---------
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
C. Amendment. Notwithstanding the provisions of this Certificate of
---------
Incorporation and any provisions of the bylaws of the Corporation, no amendment
to this Certificate of Incorporation shall amend, modify or repeal any or all of
this Article SEVENTH unless adopted by the affirmative vote of the consent of
holders of not less than three-fourths of the outstanding shares of stock of the
Corporation entitled to vote in elections of directors, considered for purposes
of this Article as a class.
EIGHTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code
-3-
<PAGE>
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
NINTH: The aggregate number of shares which the Corporation shall have
authority to issue is 88,204,563 of which 52,005,095 shall be designated as
Common Stock, par value $0.01 per share ("Common Stock"), 1,334,000 shall be
designated as Class A Convertible Preferred Stock, par value $.01 per share
("Class A Preferred Stock"), 11,800,468 shall be designated as Class B
Convertible Preferred Stock, oar value $0.01 per share, ("Class B Preferred
Stock"), 21,065,000 shall be designated as Class C Convertible Preferred Stock,
par value $.01 per share ("Class C Preferred Stock"), and 2,000,000 shall be
designated as Class D Convertible Preferred Stock, par value $.01 per share
("Class D Preferred Stock") (the Class A Preferred Stock, Class B Preferred
Stock, Class C Preferred Stock and Class D Preferred Stock, unless otherwise
indicated, are hereinafter referred to collectively as the "Preferred Stock").
The following is a statement of the designations, preferences, limitations
and relative rights in respect of the shares of each class of stock of the
Corporation:
A. Common Stock.
------------
(1) Voting Rights. Each holder of record of Common Stock shall have
-------------
the right to one vote for each share of Common Stock standing in the name of
such holder on the books of the Corporation.
(2) Dividends. Subject to the rights of the holders of the Preferred
---------
Stock, each holder of record of Common Stock will be entitled to dividends in
such amounts and at such times as may be declared by the Board of Directors.
B. Preferred Stock. Except as provided in Section B(5)(d)(i) of this
---------------
Article, each share of Class A Preferred Stock, Class B Preferred Stock, Class C
Preferred Stock and Class D Preferred Stock is identical in all respects and
possesses the same designations, limitations and rights as each other share of
Class A Preferred Stock, Class B Preferred Stock, Class C Preferred Stock and
Class D Preferred Stock, as the case may be. Except as provided in Sections
B(2)(b), B(3)(a), B(5)(a) and B(5)(d) of this Article, the Class A Preferred
Stock, Class B Preferred Stock, Class C Preferred Stock and Class D Preferred
Stock are identical in all respects and possess the same designations,
limitations and rights.
-4-
<PAGE>
(1) Dividends. In the event that the Corporation declares or pays any
---------
dividend on the Common Stock or makes, directly or indirectly, any other
distribution in respect to the Common Stock, the holders of Preferred Stock
shall be entitled to participate with the holders of Common Stock in any such
dividends paid or set aside for payment, such that the holders of Preferred
Stock shall receive, with respect to each share of Preferred Stock, an amount
equal to (a) the dividend payable with respect to each share of Common Stock
multiplied by (b) the number of shares (and fraction of a share, if any) of
Common Stock into which such share of Preferred Stock is convertible as of the
record date for such dividend.
(2) Voting Rights.
-------------
(a) Except as otherwise provided herein or by law, the holders of
Preferred Stock shall have full voting rights and powers, they shall be entitled
to vote on all matters as to which holders of the Common Stock shall be entitled
to vote, they shall vote together with the holders of the Common Stock as a
single class, and they shall be entitled to one vote for each share of Common
Stock which would be held by them if all of their shares of Preferred Stock
would be converted into shares of Common Stock under Section B(5) of this
Article.
(b) Except as otherwise provided herein or by law, the vote or
consent of at least two-thirds of the outstanding shares of the Class C
Preferred Stock voting as a separate class shall be required for the following
actions:
(i) any change in the rights, preferences, or privileges
of the Class C Preferred Stock;
(ii) any amendment, repeal or addition of any provision of
or to the Bylaws, if such action would adversely affect the preferences, rights,
privileges or powers of, or restrictions provided for the benefit of, the Class
C Preferred Stock;
(iii) the authorization of any class of equity securities
ranking prior to or having preference over the Class C Preferred Stock with
respect to dividends, redemption or assets of the Corporation;
(iv) the reclassification of any shares of Common Stock into
shares of any class of equity securities ranking prior to or having preference
over the Class C Preferred Stock with respect to dividends, redemption or assets
of the Corporation;
(v) the merger or consolidation of the Corporation into
or with any other corporation, the sale of all or substantially all of the
Corporation's assets, or the liquidation of the assets of the Corporation,
provided, however, that no such vote or consent under this Section B(2)(b)(v)
- -------- -------
shall be required if the aggregate price to be paid to the Corporation's
stockholders in the merger, consolidation, sale or liquidation is equal to or
greater than an amount determined by multiplying (x) $1.50 per share, as
adjusted to reflect any change in the number of shares of the Corporation's
Common Stock as a result of a stock split, stock dividend, distribution
-5-
<PAGE>
payable in shares of the Corporation's Common Stocka or other reclassification
after September 19, 1995, by (y) the number of outstanding shares of the
Corporation's Common Stock (for purposes of this determination only, a
securityholder holding capital stock of the Corporation convertible into the
Corporation's Common Stock shall be treated as having converted all such
convertible stock into the Corporation's Common Stock at the applicable
conversion rate, pursuant to Section B(5) of this Article, in effect at the
time of this determination); and
(vi) the acquisition by the Corporation of any corporation
or other business entity if such a transaction involves (A) the issuance of
equity securities of the Corporation resulting in the new securityholders having
more than 25 percent of the voting power pursuant to Sections A(1) and B(2)(a)
of his Article or (B) payment of cash consideration equivalent to 25% of the
product of (x) the sum of the number of shares of Common Stock and Preferred
Stock then outstanding and the number of such shares underlying options and
other rights to acquire such shares (irrespective of whether such shares,
options or other rights are conditional or unvested) times (y) the then most
recent price per share at which the Corporation sold any shares of Preferred
Stock in an offering that yielded gross proceeds of not less than $5,000,000 to
the Corporation.
(c) Whenever holders of the Preferred Stock or Common Stock,
separately or as a single class, are required or permitted to take any action,
such action may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted.
(3) Rights of Liquidation.
---------------------
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (any such event being hereinafter
referred to as a "Liquidation"), before any distribution of assets of the
Corporation shall be made to or set apart for the holders of the Common Stock,
the holders of the Preferred Stock shall be entitled to receive payment out of
such assets of the Corporation in an amount per share equal to $0.50 per share
for each share of Class A Preferred Stock held by such holder, $1.00 per share
for each share of Class B Preferred Stock or Class C Preferred Stock held by
such holder and $1.75 per share for each share of Class D Preferred Stock held
by such holder (such amounts being referred to herein as "Liquidation
Preference") plus any declared but unpaid dividends on such shares of Preferred
Stock. If the assets of the Corporation available for distribution to the
holders of the Preferred Stock shall not be sufficient to make in full the
payments required by this Section B(3)(a), such assets shall be distributed
ratably among the holders of the Preferred Stock based upon the aggregate
Liquidation Preferences of the shares of Preferred Stock held by each such
holder.
(b) If the assets of the Corporation available for distribution
to stockholders exceed the aggregate amounts payable pursuant to Section
B(3)(a) of this Article above, the remainder of such assets shall be
distributed to the holders of Preferred Stock and Common Stock on a pro rata
basis, with the amount distributable to the holders of Preferred Stock to be
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<PAGE>
computed on the basis of the number of shares of Common Stock which would be
held by them if immediately prior to the Liquidation all of the outstanding
shares of such Preferred Stock had been converted into shares of Common Stock
under Section B(5) of this Article.
(c) A merger or consolidation involving the Corporation in
which the Corporation is not the surviving entity and a sale, lease or
transfer of all or substantially all of the assets of the Corporation shall,
at the option of holders representing a majority of the Preferred Stock voting
as a single class, be deemed a Liquidation, unless in connection with such
transaction, each holder of Preferred Stock receives a preferred stock having
terms and conditions which are no less favorable than the terms and conditions
of the Preferred Stock held by such holder prior to the transaction.
(d) Notwithstanding the provisions contained in Section B(3)(c)
of this Article above, in the event of a merger or consolidation involving the
Corporation in which the Corporation is not the surviving entity, or a sale,
lease or transfer of all or substantially all of the assets of the
Corporation, in which a holder of Preferred Stock would receive cash and/or
marketable securities (i.e., securities registered under the Securities Act of
----
1933, as amended, at the time of delivery, or securities committed to be so
registered within 60 days after delivery) in an amount less than the aggregate
Liquidation Preference of the shares of Preferred Stock held by such holder,
then holders of a majority of the Preferred Stock then outstanding, voting as
a single class, may elect, in lieu of all other rights under the terms of the
transaction or this Article, to receive an amount equal to their aggregate
Liquidation Preference for such shares of Preferred Stock. If the holders make
such an election, each such holder shall have a priority on such holder's pro
rata portion of all cash and marketable securities received in such
transaction to the extent of the aggregate Liquidation Preference for such
holder's shares of Preferred Stock. Such election shall be made by the holders
by written notice to the Corporation within 30 days after the date of
stockholder approval of the transaction (or within 30 days after receiving
notice of such transaction from the Corporation if the transaction is not
submitted for stockholder approval).
(e) In the event that the Corporation shall, at any time, issue
any shares of Preferred Stock (i) by stock dividend or any other distribution
upon any stock of the Corporation payable in shares of Preferred Stock, or
(ii) by a subdivision of its shares of outstanding Preferred Stock, by
reclassification or otherwise, the Liquidation Preference then in effect shall
be reduced proportionately, and, in like manner, in the event of any
combination of shares of Preferred Stock, by reclassification or otherwise,
the Liquidation Preference then in effect shall be proportionately increased.
(4) Actions Requiring the Consent of the Holders of the Preferred
-------------------------------------------------------------
Stock. As long as any shares of Preferred Stock remain outstanding, the consent
- -----
of the holders of at least a majority of the votes which holders of Preferred
Stock are entitled to cast, given in person or by proxy, either in writing
without a meeting or by vote at a meeting called for such purpose, shall be
necessary for effecting or validating any amendment, alteration or repeal of any
of the provisions of the Certificate of Incorporation or the Bylaws of the
Corporation which (a) increases the number of authorized shares of any class of
capital stock, (b) adversely affects the rights, preferences or powers of any
-7-
<PAGE>
class of Preferred Stock or of the holders thereof or (c) decreases the required
time for the giving of any notice to which the holders of Preferred Stock may be
entitled.
(5) Conversion.
----------
(a) Right To Convert. A holder of record of any share or
----------------
shares of Class A Preferred Stock shall have the right at any time, at such
holder's option, to convert, without the payment of any additional
consideration, each share of Class A Preferred Stock held by such holder into
that number of fully paid and nonassessable shares of Common Stock as is
determined by dividing (i) .50 by (ii) the Conversion Factor (as defined in
Section 2(5)(d) of this Article below) then in effect for the Class A
Preferred Stock. A holder of record of any share or shares of Class B
Preferred Stock, Class C Preferred Stock or Class D Preferred Stock shall have
the right at any time, at such holder's option, to convert, without the
payment of any additional consideration, each share of Class B Preferred
Stock, Class C Preferred Stock or Class D Preferred Stock held by such holder
into that number of fully paid and nonassessable shares of Common Stock as is
determined by dividing (X) 1 by (Y) the Conversion Factor (as defined in
Section B(5)(d) of this Article below) then in effect for the Class B
Preferred Stock, Class B Preferred Stock or Class D Preferred Stock, as
applicable; provided, however, that the provisions of 2(5)(d)(i) shall not
-------- -------
apply to the Conversion Factor for Class D Preferred Stock. No fractional
shares or scrip representing fractional shares shall be issued upon the
conversion of any Preferred Stock. With respect to any fraction of a share of
Common Stock called for upon any conversion after completion of the
calculation of the aggregate number of shares of Common Stock to be issued to
such holder, the Corporation shall pay to such holder an amount in cash equal
to any fractional share to which such holder would be entitled, multiplied by
the current market value of a share, as determined in good faith by the Board
of Directors of the Corporation.
(b) Mechanics of Conversion. If the holder of shares of
-----------------------
Preferred Stock desires to exercise such right of conversion, such holder must
give written notice to the Corporation (the "Conversion Notice") of the
election by such holder to convert a stated number cf shares of Preferred
Stock (the "Conversion Shares") into shares of Common Stock on the date
specified in the Conversion Notice (which date shall not be earlier than the
date on which the Corporation receives the Conversion Notice (the "Conversion
Date")), and by surrender of the certificate or certificates representing such
Conversion Shares. The Conversion Notice shall also contain a statement of the
name or names (with addresses) in which the certificate or certificates for
Common Stock shall be issued. Promptly after the Conversion Date and the
surrender of the Conversion Shares, the Corporation shall issue and deliver,
or cause to be delivered, to the holder of the Conversion Shares or such
holder's nominee or nominees, a certificate or certificates for the number of
shares of Common Stock issuable upon the conversion of such Conversion Shares.
Such conversion shall be deemed to have been effected as of the close of
business on the Conversion Date, and the person or persons entitled to receive
the shares of Common Stock issuable upon conversion shall be treated for all
purposes as the holder or holders of record of such shares of Common Stock as
of the close of business on such date.
-8-
<PAGE>
(c) Common Stock Reserved. The Corporation shall at all times
---------------------
reserve and keep available out of its authorized but unissued Common Stock,
solely for issuance upon the conversion of shares of Preferred Stock as herein
provided, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all of the shares of Preferred Stock at the
time outstanding.
(d) Conversion Factor. The initial conversion factor for the
-----------------
Class A Preferred Stock shall be .50 and the initial conversion factor for the
Class B Preferred Stock, the Class C Preferred Stock and the Class D Preferred
Stock shall be 1, subject to adjustment, in each case, in accordance with the
provisions in this Section B(5)(d), except that the provisions of B(5)(d)(i)
shall not apply to the Conversion Factor for Class D Preferred Stock. Such
respective conversion factors in effect from time to time, as adjusted
pursuant to the applicable provisions of this Section B(5)(d), are referred to
herein as the "Conversion Factor" for the Class A Preferred Stock, the Class B
Preferred Stock, the Class C Preferred Stock or the Class D Preferred Stock,
as applicable. All of the remaining provisions of this Section B(5)(d) shall
apply separately to the respective Conversion Factors in effect from time to
time; provided, however, that the provisions of B(5)(d)(i) shall not apply to
-------- -------
the Conversion Factor for Class D Preferred Stock.
(i) In the event that the Corporation shall, at any time
or from time to time, issue or sell any shares of the capital stock of the
Corporation (including treasury shares, but excluding (x) 1,334,000 shares of
Class A Preferred Stock and 21,065,000 shares of Class C Preferred Stock, (y)
an aggregate of 15,805,627 shares of Common Stock and an aggregate of
11,800,468 shares of Class B Preferred Stock that have been issued, have been
reserved for issuance or will be issued pursuant to options, warrants or other
commitments which have been granted or executed as of December 12, 1995 or
will be granted or executed pursuant to the Corporation's 1993 Stock Incentive
Plan, and (z) the shares of Common Stock issuable upon conversion of the
Preferred Stock), then, immediately upon such issuance or sale, the Conversion
Factor shall be reduced as follows:
(A) The Conversion Factor shall be changed to a number
determined by multiplying the Conversion Factor in effect immediately prior to
such issuance by the following fraction:
A + B
---
C
-------------
A + D
wherein:
A = the number of Outstanding Shares (as defined below)
immediately prior to the subject issuance;
B = the aggregate consideration in dollars for the shares then
being issued, expressed as an absolute number;
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<PAGE>
C = the Conversion Factor in effect immediately prior to the
subject issuance with respect to the applicable class of
Preferred Stock; and
D = the number of shares then being issued.
The applicable Conversion Factor shall be further reduced from time to time
thereafter whenever any shares are so issued or converted for a price per share
lower than the amount of the applicable Conversion Factor, then in effect, as
adjusted prior to that date.
(B) In the event that any shares shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount received by the
Corporation therefor, without deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Corporation in
connection therewith. In the event that any shares shall be issued for a
consideration other than cash, the amount of the consideration other than cash
received by the Corporation shall be deemed to be the fair value of such
consideration, without deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Corporation in connection
therewith. Whenever shares are issued upon the exercise of warrants, options or
other conversion rights, the consideration received therefor shall include both
the consideration paid upon the issuance and upon the exercise of such warrant,
option or other right.
(C) In the event that the Corporation shall in any manner grant
(whether directly or by assumption in a merger or otherwise) any rights to
subscribe for or to purchase any Common Stock or securities convertible into
Common Stock ("Convertible Securities"), or any options for the purchase of any
Common Stock or Convertible Securities, whether or not such rights or options or
the right to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which shares of Common Stock issuable
upon the exercise of such rights or options or upon conversion or exchange of
such Convertible Securities (determined by dividing (I) the total amount, if
any, received or receivable by the Corporation as consideration for the granting
of such rights or options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the exercise of such
rights or options, or plus, in the case of any Convertible Securities or rights
or options to purchase Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (II) the
total maximum number of shares of Common Stock issuable upon the exercise of
such rights or options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such rights or options)
shall be less than the Conversion Factor in effect immediately prior to the time
of the granting of such rights or options, then the total maximum number of
shares of Common Stock issuable upon the exercise of such rights or options or
upon conversion or exchange of all such Convertible Securities issuable or
issuable upon the exercise of such rights or options shall be deemed to be
outstanding as of the date of the granting of such rights or options and to have
been issued for such price per share, with the effect on the applicable
Conversion Factor specified in Section (5)(d)(i) of this Article. No further
adjustment of the applicable Conversion Factor shall be mafde upon the actual
issue of such Common Stock or upon
-10-
<PAGE>
the actual issue of such Convertible Securities upon exercise of such rights
or options or upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities.
(D) If the purchase price provided for in any right or option referred
to in Section B(5)(d)(i)(C) of this Article, or the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities, or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock shall change (other than under or by reason of
provisions designed to protect against dilution), the Conversion Factor then in
effect hereunder shall forthwith be readjusted (increased or decreased, as the
case may be) to the Conversion Factor which would have been in effect at such
time had such rights, options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or conversion
rate, as the case may be, at the time initially granted, issued or sold.
(E) Notwithstanding the foregoing, upon the consent of the holders of
two-thirds of the applicable class of Preferred Stock affected and then
outstanding, if the Conversion Factor for the applicable class of Preferred
Stock, as set forth in this Section B(5)(d)(i) otherwise would be reduced, no
such reduction in the Conversion Factor for the applicable class of Preferred
Stock, as set forth in this Section B(5)(d)(i), shall occur.
(F) Notwithstanding the foregoing, if any holder of shares of
Preferred Stock is entitled to exercise the preemptive rights (the "Preemptive
Right") set forth in Section 9 of the Second Class C Preferred Stock Purchase
Agreement, dated as of September 19, 1995, or in Schedule 9 of the Amendment and
Waiver Agreement, dated as of September 19, 1995 (collectively, the "Purchase
Agreement") with respect to any "Issuance" (as defined in Section 9.2 of the
Purchase Agreement) which would, absent the provisions of this subsection (F),
result in a reduction of the Conversion Factor applicable to shares of such
holder's Preferred Stock pursuant to Section B(5)(d)(i) of this Article, and if
such holder (a "Non-Participating Holder") does not, by exercise of such
holder's Preemptive Right, acquire not less than such holder's "Proportionate
Percentage" (as defined in Section 9.2 of the Purchase Agreement) of the
Issuance, then all of such holder's shares of Class A Preferred Stock, Class B
Preferred Stock and Class C Preferred Stock shall automatically, and without
further action on the part of such holder, be converted effective upon, subject
to and concurrently with consummation of the Issuance (the "Issuance Date") as
follows: each share of Class A Preferred Stock held by such Non-Participating
Holder shall be converted into one share of a newly created series of preferred
stock (having such number of shares as the Board of Directors may by resolution
fix) which such class shall be identical in all respects to the Class A
Preferred Stock, except that the Conversion Factor of such class shall be fixed
immediately prior to the Issuance Date and shall be subject to no further
adjustments pursuant to Section B(5)(d)(i) of this Article; each share of Class
B Preferred Stock held by such Non Participating Holder shall be converted into
one share of a newly created class of
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<PAGE>
preferred stock (having such number of shares as the Board of Directors may by
resolution fix) which such class shall be identical in all respects to the
Class B Preferred Stock, except that the Conversion Factor of such class shall
be fixed immediately prior to the Issuance Date and shall be subject to no
further adjustments pursuant to Section B(5)(d)(i) of this Article; and each
share of Class C Preferred Stock held by such Non-Participating Holder shall
be converted into one share of a newly created class of preferred stock
(having such number of shares as the Board of Directors may by resolution fix)
which such class shall be identical in all respects to the Class C Preferred
Stock, except that the Conversion Factor of such class shall be fixed
immediately prior to the Issuance Date and shall be subject to no further
adjustments pursuant to Section B(5)(d)(i) of this Article. The Board of
Directors of the Corporation shall take all necessary actions to designate
each such new class. Upon such conversion, the shares of Class A Preferred
Stock, Class B Preferred Stock and Class C Preferred Stock so converted shall
be cancelled and not subject to reissuance, but instead shall be redesignated
by the Board of Directors of the Corporation in accordance with the terms of
this Section B(5)(d)(i)(F).
(ii) Each adjustment in a Conversion Factor shall be
calculated to the nearest tenth of a cent.
(iii) As used in this Section 8(5)(d), the term "Outstanding
Shares" shall be deemed to include the number of issued and outstanding shares
of Common Stock, plus the number of shares of Common Stock issuable upon the
conversion of the issued and outstanding shares of Preferred Stock, but shall
not include the new shares of Common Stock then being issued by the Corporation.
(iv) In the event that the Corporation shall, at any time,
issue any shares of Common Stock (A) by stock dividend or any other distribution
upon any stock of the Corporation payable in shares of Common Stock or in shares
of Preferred Stock, or (B) by subdivision of its shares of outstanding Common
Stock, by reclassification or otherwise, the Conversion Factor then in effect
shall be reduced proportionately, and, in like manner, in the event of any
combination of shares of Common Stock, by reclassification or otherwise, the
Conversion Factor then in effect shall be proportionately increased.
(v) If any capital reorganization or reclassification of
the Common Stock of the Corporation, or consolidation or merger of the
Corporation with or into another corporation, or the sale or conveyance of all
or substantially all of its assets to another corporation shall be effected,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provision shall be made whereby the
holders of the Preferred Stock shall thereafter have the right to receive, in
lieu of the shares of Common Stock of the Corporation immediately theretofore
receivable with respect to such shares of Preferred Stock upon the exercise of
their conversion rights, such shares of stock, securities or assets as would
have been issued or payable with respect to or in exchange for the number of
outstanding shares of such Common Stock immediately theretofore receivable
with respect to such shares of Preferred Stock upon the exercise of such
rights had such reorganization, reclassification, consolidation, merger or
sale not taken place. In any such case, appropriate provision shall be made
with respect to the rights and interests of the holders of the Preferred Stock
to the end that such conversion rights (including, without limitation,
provisions for adjustment of the applicable Conversion Factor) shall
thereafter be applicable, as nearly as may be practicable in relation to any
shares of stock, securities or assets thereafter deliverable upon the exercise
thereof. The Corporation shall not effect any such consolidation, merger or
sale, unless it provides the holders of the Preferred Stock at least 30 days'
advance notice
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<PAGE>
thereof, and prior to or simultaneously with the consummation thereof the
successor corporation (if other than the Corporation) resulting from such
consolidation or merger or the corporation purchasing such assets, shall
assume by written instrument, executed and mailed or delivered to the holders
of the Preferred Stock, the obligation to deliver to such holders the shares
of stock, securities or assets as, in accordance with the foregoing
provisions, such holders may be entitled to receive upon conversion of the
shares of Preferred Stock held by such holder.
(vi) If any event occurs as to which the other provisions of
this Section B(5)(d) are not strictly applicable, or if strictly applicable
would not fairly protect the conversion rights of the Preferred Stock in
accordance with the intent and principles of such provisions, then the Board of
Directors shall make an adjustment in the application of such provisions, in
accordance with such intent and principles, so as to protect such conversion
rights as aforesaid, but in no event shall any such adjustment have the effect
of increasing the applicable Conversion Factor as otherwise determined pursuant
to this Section B(5)(d).
(e) Stock Transfer Taxes. The issuance of stock certificates upon the
--------------------
conversion of the Preferred Stock shall be made without charge to the converting
holder for any tax in respect of such issuance. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of shares in any name other than
that of the holder of such shares of Preferred Stock converted, and the
Corporation shall not be required to issue or deliver any such stock certificate
unless and until the person or persons requesting the issuance thereof shall
have paid to the Corporation the amount of such tax or shall have established to
the satisfaction of the Corporation that such tax has been paid.
(f) Certificate as to Adjustments. Upon the occurrence of each
-----------------------------
adjustment or readjustment of the Conversion Factor, the Corporation, at its
expense, promptly shall compute such adjustment or readjustment in accordance
with the terms hereof and prepare and furnish to each holder of Preferred Stock
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any time of any holder of
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Factor at the time in effect for the Preferred Stock, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of such Preferred Stock owned
by such holder.
(g) Notices of Record Date. In the event of any fixing by the
----------------------
Corporation of a record date for the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any shares of
Common Stock or other securities, or any right to subscribe for, purchase or
otherwise acquire, or any option for the purchase of, any shares of stock of any
class or any other securities or property, or to receive any other right, the
Corporation shall mail to each holder of Preferred Stock at least 30 days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
-13-
<PAGE>
(h) Notices. Any notice required by the provisions of this Section
-------
B(5) to be given to the holders of shares of Preferred Stock shall be deemed
given it deposited in the United States mail, first class postage prepaid, and
addressed to each holder of record at such holder's address appearing on the
books of the Corporation.
(6) Mandatory Conversion.
--------------------
(a) The Corporation shall cause the conversion ("Mandatory
Conversion") of all of the shares of Preferred Stock into fully paid and
nonassessable shares of Common Stock, at the conversion rate then in effect,
upon the occurrence of the Corporation's underwritten public offering of its
Common Stock pursuant to a registration statement (other than a registration
statement relating to an offer and sale of securities to employees of, or other
persons providing services to, the Corporation pursuant to an employee or
similar benefit plan, registered on Form S-8 or a comparable or successor form)
filed under the Securities Act of 1933, as amended, which yields to the
Corporation not less than $15,000,000 (before deducting any underwriters' or
brokers' discounts, fees or commissions) and under which the offering price to
the public is equal to at least $1.50 per share (adjusted for any stock splits,
stock dividends, recapitalizations, mergers, consolidations or similar events
occurring after September 19, 1995) (a "Qualifying Public Offering").
(b) The date ("Mandatory Conversion Date") on which such Mandatory
Conversion shall be deemed to occur is the date on which a closing occurs
pursuant to a Qualifying Public Offering.
(c) On the Mandatory Conversion Date, all rights of the holders of
shares of the Preferred Stock as such holders shall cease except their right to
receive payment of any dividends declared and unpaid to such date; such shares
shall no longer be deemed to be outstanding; and the holders thereof shall on
and after such date be conclusively deemed for all purposes to be holders of the
shares of Common Stock into which their shares of Preferred Stock were
converted.
(d) The Corporation shall promptly give all holders of record of
shares of Preferred Stock written notice of the date that a Qualifying Public
Offering will occur or is anticipated to occur. Such notice shall also specify
the place designated for exchanging the shares of Preferred Stock for shares of
Common Stock. Such notice shall be sent by first class mail, postage prepaid,
to each holder of record of shares of Preferred Stock at such holder's address
as shown in the records of the Corporation. Each holder of shares of Preferred
Stock shall surrender its certificate or certificates for all such shares to the
Corporation or the transfer agent at the place designated in such notice and
shall, upon surrender, receive certificates for the number of shares of Common
Stock to which such holder is entitled.
(e) For the purpose of calculating the conversion ratio of Preferred
Stock into Common Stock in the event of a Mandatory Conversion, such calculation
shall be made in accordance with Section B(5) of this Article.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Restated Certificate
of Incorporation on behalf of the Corporation and have attested such execution
and do verify and affirm, under penalty of perjury, that this Restated
Certificate of Incorporation is the act and deed of the Corporation and that the
facts stated herein are true as of this 19th day of June, 1996.
GENVEC, INC.
By:
--------------------------------------
Thomas W. D'Alonzo
President
Attest:
By:
-----------------------------------
Charles A. Reinhart III
Secretary
(Corporate Seal)
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<PAGE>
EXHIBIT 10.9
COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (the "Agreement"), effective as of September
26, 1997 (the "Effective Date"), is made by and between Fuso Pharmaceutical
Industries, Ltd., a corporation organized under the laws of Japan, with a
principal place of business at 3-11, 2-Chome, Morinomiya, Joto-ku Osaka 536
Japan and its registered head office at 7-10, 1-Chome, Doshomachi, Chuo-ku,
Osaka 541 Japan ("Fuso"), and GenVec, Inc., a Delaware corporation, with a
principal place of business at 12111 Parklawn Drive, Rockville, Maryland 20852
("GenVec").
BACKGROUND
A. GenVec has expertise in the field of gene therapy and is developing
novel, proprietary materials and methods for use in the treatment of human
cancer.
B. Fuso is in the business of developing, manufacturing, and
commercializing pharmaceuticals in Japan.
C. GenVec and Fuso desire to establish a collaborative relationship to
conduct research and develop certain gene therapy products for the treatment of
human cancer.
D. GenVec and Fuso have entered into a Stock Purchase Agreement of even
date herewith, pursuant to which GenVec shall sell to Fuso, and Fuso shall
purchase 444,445 shares of GenVec Series E Convertible Preferred Stock. This
Collaboration Agreement shall only be effective if the purchase of such stock is
timely completed as set forth in the Stock Purchase Agreement.
NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:
1. DEFINITIONS
1.1 "Affiliate" shall mean any corporation or other entity which is
---------
directly or indirectly controlling, controlled by or under the common control of
a party hereto. For the purpose of this Agreement, "control" shall mean the
direct or indirect ownership of at least fifty percent (50%) of the outstanding
shares or other voting rights of the subject entity to elect directors, or if
not meeting the preceding, any entity owned or controlled by or owning or
controlling at the maximum control or ownership right permitted in the country
where such entity exists.
1.2 "Commercialization Agreement" shall mean that certain
---------------------------
Commercialization Agreement entered by Fuso and GenVec of even date herewith.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
1.3 "Collaboration Product" shall mean a Product Configuration developed
---------------------
in the Research Program intended for use in the Field which the Steering
Committee has designated as such pursuant to Section 2.4.
1.4 "Confidential Information" shall mean (i) any proprietary or
------------------------
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder which
is identified as confidential or proprietary when disclosed and such disclosure
of confidential information is confirmed in writing within thirty (30) days by
the disclosing party.
1.5 "Development Plan" shall mean the written plan for development of a
----------------
particular Collaboration Product prepared pursuant to Section 2.4.2.
[*]
1.7 "Fuso Technology" shall mean Fuso Patent Rights and Fuso Know-How:
---------------
1.7.1 "Fuso Patent Rights" shall mean (i) all patents and patent
------------------
applications conceived and reduced to practice by Fuso alone, or Fuso and/or its
agents (including researchers at [*] University), in connection with the
Research Program during the Research Program Term, and (ii) any divisions,
continuations, continuations-in-part, reissues, reexaminations, extensions or
other governmental actions which extend any of the subject matter of the patent
applications or patents in (i) above, and any substitutions, confirmations,
registrations or revalidations of any of the foregoing, in each case, which is
owned or controlled, in whole or part, by license, assignment or otherwise by
Fuso, to the extent Fuso has the right to license or sublicense, and subject to
any limitations of such license or sublicense. For the avoidance of doubt, the
Fuso Patent Rights shall not include Fuso Know-How or any [*].
1.7.2 "Fuso Know-How" shall mean confidential information and
-------------
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired by Fuso alone, or Fuso
and/or its agents (including researchers at [*] University), in connection
with the Research Program during the Research Program Term which Fuso has the
right to license or sublicense, and subject to any limitations of such license
or sublicense. For the avoidance of doubt, Fuso Know-How shall not include any
Fuso Patent Rights or any [*].
1.8 "Field" shall mean Gene Therapy for the treatment of human cancer,
[*] or, in each case, any portion or derivative thereof.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
1.9 "Gene Therapy" shall mean the introduction of a gene into a person for
------------
therapeutic purposes (i) by in vivo introduction for incorporation into cells of
such person, or (ii) by ex vivo introduction into cells for transfer into a
person.
1.10 [*] shall have the meaning set forth in Section 7.1.2 below.
---
1.11 "GenVec Technology" shall mean GenVec Patent Rights, GenVec Know-How
-----------------
and [*].
1.11.1 "GenVec Patent Rights" shall mean (i) all patents and patent
--------------------
applications listed on Exhibit A hereto, or conceived and reduced to practice by
GenVec alone, or GenVec and/or its agents (including researchers at [*]), in
connection with the Research Program during the Research Program Term, and (ii)
any divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions or other governmental actions which extend any of the subject matter
of the patent applications or patents in (i) above, and any substitutions,
confirmations, registrations or revalidations of any of the foregoing, in each
case, which is owned or controlled, in whole or part, by license, assignment or
otherwise by GenVec, to the extent GenVec has the right to license or
sublicense, and subject to any limitations of such license or sublicense. For
the avoidance of doubt, the GenVec Patent Rights shall not include GenVec Know-
How.
1.11.2 "GenVec Know-How" shall mean confidential information and
---------------
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired by GenVec alone, or
GenVec and/or its agents (including researchers at [*]), in connection with the
Research Program during the Research Program Term, which GenVec has the right to
license or sublicense, and subject to any limitations of such license or
sublicense. For the avoidance of doubt, GenVec Know-How shall not include any
GenVec Patent Rights
1.12 "Joint Technology" shall mean the Joint Patent Rights and Joint Know-
----------------
How.
1.12.1 "Joint Patent Rights" shall mean (i) all patents and patent
-------------------
applications conceived and reduced to practice jointly by Fuso (or its agents,
including researchers at [*] University) and GenVec (or its agents, including
researchers at [*]), in connection with the Research Program during the
Research Program Term and (ii) any divisions, continuations, continuations-in-
part, reissues, reexaminations, extensions or other governmental actions which
extend any of the subject matter of the patent applications or patents in (i)
above, and any substitutions, confirmations, registrations or revalidations of
any of the foregoing. For the avoidance of doubt, the Joint Patent Rights shall
not include the Joint Know-How or any [*].
1.12.2 "Joint Know-How" shall mean confidential information and
--------------
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans,
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-3-
<PAGE>
diagrams, specifications and/or other documents containing said information and
data, discovered, developed or acquired jointly by Fuso (or its agents,
including researchers at [*] University), and GenVec (or its agents, including
researchers at [*]), in connection with the Research Program during the
Research Program Term. For the avoidance of doubt, the Joint Know-How shall not
include the Joint Patent Rights or any [*].
1.13 "MHW" shall mean the Japanese Ministry of Health and Welfare, or any
---
corresponding foreign registration or foreign regulatory authority in the
Territory.
1.14 "Phase I", "Phase II", and "Phase III" shall mean Phase I (or Phase
------- -------- ---------
I/II), Phase II (or Phase II/III), and Phase III clinical trials, respectively,
in each case as prescribed by the Japanese equivalent of applicable FDA IND
regulations, or any corresponding foreign statutes, rules or regulations in the
Territory.
1.15 "Pivotal Trial" shall mean a clinical trial that is designed to
-------------
provide data establishing the safety and efficacy of a Collaboration Product in
support of obtaining marketing approval from the MHW.
1.16 "Product Configuration" shall mean any potential product for use in
---------------------
the Field containing a combination of one or more genes (or fragments thereof
and other elements (e.g., a gene delivery vehicle and/or a gene expression
cassette)).
1.17 "Product License Application" or "PLA" shall mean the Japanese
--------------------------- ---
equivalent of a Product License Application, as defined in the U.S. Food, Drug
and Cosmetic Act and the regulations promulgated thereunder, and any
corresponding foreign application, registration or certification in the
Territory.
1.18 "Research Plan" shall have the meaning set forth in Section 2.1.2
-------------
below.
1.19 "Research Program" shall have the meaning set forth in Section 2.1
----------------
below. For the avoidance of doubt, the Research Program shall include
activities conducted pursuant to the Research Plan and activities conducted
pursuant to any Development Plan which the parties agree are to be included
under the Research Program.
1.20 "Research Program Term" shall be that period of time described in
---------------------
Section 2.6.1 below.
1.21 "Steering Committee" shall have the meaning set forth in Section
------------------
2.2.1 below.
1.22 "Territory" shall mean [*].
---------
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-4-
<PAGE>
2. RESEARCH PROGRAM
2.1 Research Program.
----------------
2.1.1 Collaborative Effort. Subject to the terms and conditions set
--------------------
forth herein Fuso and GenVec will diligently conduct mutually agreed
collaborative research in the Field pursuant to a Research Plan with the primary
objective of identifying and commencing the development of at least [*] (the
"Research Program"). The activities conducted in connection with the Research
Program will be overseen and administered by the Steering Committee pursuant to
Section 2.2 below. Fuso and GenVec shall each use reasonable efforts to conduct
the Research Program in accordance with the Research Plan within the time
schedules contemplated therein.
2.1.2 Research Plan. Annually, the Steering Committee will prepare
-------------
and agree upon a written plan (the "Research Plan") that will (i) include a
general overview and timetable for each party's research activities and
appropriate resources and budgets for such research during the next year, and
(ii) set specific objectives for each year, which objectives will be updated or
amended, as appropriate, by the Steering Committee as research progresses. The
initial Research Plan shall be agreed in writing by the parties within [*] of
the Effective Date. The Steering Committee shall review the Research Plan on an
ongoing basis and may make changes to the Research Plan then in effect.
2.1.3 Development Plan Activities. The Research Program shall
---------------------------
include those activities, within the scope of a Development Plan agreed to by
the parties pursuant to Section 2.4.2, that the parties have agreed to conduct
in connection with the Research Program.
2.1.4 Sponsored Academic Research.
---------------------------
(a) GenVec. In connection with the Research Program, GenVec
------
intends to sponsor certain research and development at DFCI, subject to the
terms of a written sponsored research agreement, to be negotiated and entered
into by GenVec and [*].
(b) Fuso. In connection with the Research Program, Fuso
----
intends to sponsor certain research and development at the laboratory of [*]
at the [*] University School of Medicine, subject to the terms of
a written sponsored research agreement, to be negotiated and entered into by
Fuso and [*] University.
(c) Consistency. It is understood and agreed that the parties
-----------
shall endeavor to negotiate and include in their respective academic sponsored
research agreements relating to the Research Program, provisions fully
consistent with those in this Agreement, including without limitation, policies
related to confidentiality and the filing of patent applications and enforcement
of patents. To the extent the provisions of any agreement negotiated between
GenVec and [*] or Fuso and [*] University in connection with any aspect of
the Research Program are inconsistent with the terms and conditions of this
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-5-
<PAGE>
Agreement, the party wishing to enter such agreement shall notify the Steering
Committee prior to the execution of such agreement, and provide an explanation
of the reason for such inconsistency. The Steering Committee shall have the
authority to approve or disapprove such agreement, and the parties hereto shall
not enter into such agreement without the prior written consent of the Steering
Committee.
2.2 Steering Committee.
------------------
2.2.1 Responsibilities. Fuso and GenVec will establish a committee
----------------
to oversee, review and coordinate the Research Program (the "Steering
Committee"). The Steering Committee shall be responsible for (i) establishing
the Research Plan, (ii) designating Collaboration Products for commercial
development; (iii) monitoring and reporting research progress and ensuring open
and frequent exchange between the parties with respect to Research Program
activities, (iv) determining whether to acquire licenses from third parties with
respect to intellectual property necessary or useful for the conduct of the
Research Program, and (v) discussing patent matters relating to Collaboration
Products.
2.2.2 Membership. The Steering Committee shall be comprised of six
----------
(6) representatives. Two (2) members shall be appointed by Fuso, two (2) members
shall be appointed by GenVec, and [*] and [*] will each serve as members of the
Steering Committee. Fuso and GenVec may each replace its Steering Committee
representatives at any time, with written notice to the other party. In the
event that [*] or [*] becomes unavailable to serve on the Steering Committee,
Fuso and GenVec shall agree on an appropriate replacement. From time to time,
the Steering Committee may establish subcommittees to oversee particular
projects or activities, such as decisions regarding patent matters.
2.2.3 Meetings. The Steering Committee will meet at least two (2)
--------
times per year at locations and times to be determined by the Steering
Committee. Members of the Steering Committee may participate in and vote at
meetings, in person by telephone or by video conference and may vote at meetings
by proxy. The Steering Committee shall prepare written minutes of each meeting
and a written record of all Steering Committee decisions, whether made at an
Steering Committee meeting or otherwise.
2.2.4 Decision Making. All decisions of the Steering Committee will
---------------
be made by majority approval; provided, the designation of each Collaboration
Product as described in Section 2.4.1, and the Development Plan for each
Collaboration Product as described in Section 2.4.2, shall require unanimous
approval of the Steering Committee, and, if there is not unanimity with respect
to such a decision, such matter shall not be subject to arbitration. In the
event that a majority is not achieved within the Steering Committee for any
decision which does not require a unanimous vote, the dispute will be referred
to Fuso's President and GenVec's President, who shall meet promptly in person or
by telephone and endeavor to reach agreement. If such persons are unable to
resolve any disputes the parties shall settle such dispute as set forth in
Article 12 below.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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2.3 Research Program Funding.
------------------------
2.3.1 Research Program Funding. During the Research Program Term,
------------------------
Fuso agrees to spend an aggregate of one million dollars ($1,000,000) per year
on funding for the Research Program.
(a) Two hundred fifty thousand dollars ($250,000) of such total
shall be expended by Fuso each year on research conducted in Japan with regard
to the Research Program, all or a portion of which will be used to sponsor
research in the laboratory of [*] pursuant to Section 2.1.4(b) above, and a
portion of which may be used by Fuso to conduct research at its facility.
(b) Fuso shall pay to GenVec the remaining seven hundred fifty
thousand dollars ($750,000) per year for the Research Program. Such amounts
shall be used by GenVec for its direct and indirect costs incurred in connection
with Research Program activities approved by the Steering Committee, including,
without limitation, research and development activities by GenVec, sponsored
research at [*], the supply by GenVec (subject to Section 6.2 below) of [*]
pursuant to the applicable Development Plan, the preparation and transfer of
documents in support of [*], patent prosecution by GenVec, travel and management
expenses related to the Research Program, and general support of technology
development by GenVec.
(c) The parties anticipate that the amount of the funding
provided in Sections 2.3.1(a) and (b) above will support the activities to be
conducted in connection with the Research Program with the goal of identifying
and commencing the development of [*] and filing an application for
authorization for [*]. It is understood and agreed that GenVec shall have no
obligation to expend any amount on the Research Program in excess of the amounts
paid by Fuso to GenVec for the conduct of the Research Program. GenVec shall use
reasonable efforts to conduct the Research Program activities approved by the
Steering Committee in a cost efficient manner consistent with the Research
Program budget and GenVec's customary practices.
2.3.2 Third Party Technology.
----------------------
(a) In the event that GenVec acquires any rights to
intellectual property or technology for its general corporate research and
development activities which are useful for the Research Program, GenVec shall
pay any costs attributable to the general use of the same; provided, GenVec
shall have no obligation to acquire with respect to any such intellectual
property or technology (i) the right to sublicense to Fuso any such intellectual
property or technology, or (ii) any rights relating to the commercialization of
Collaboration Products or any other products.
(b) In the event that it is necessary for GenVec to acquire a
license or GenVec has acquired a license from a third party specifically for
intellectual property or technology necessary or useful for the conduct of the
Research Program and/or the commercialization of Collaboration Products,
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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GenVec and Fuso shall negotiate and agree on the amounts that each party will be
responsible for paying to such third party with regard to such a license, and
for the expenses of negotiating and preparing any such license. In the event
that the parties are unable to agree on such amounts, GenVec shall have no
obligation to acquire such license and shall have no liability under this
Agreement for not acquiring such a license. It is understood and agreed that
GenVec shall have the principal responsibility for negotiating such agreements
unless otherwise agreed by the parties. In negotiating such agreements, GenVec
shall use reasonable efforts to reach an agreement which is as favorable as
possible to both GenVec and Fuso. GenVec shall report to Fuso on the progress of
such negotiations on a timely basis.
2.4 Collaboration Products.
----------------------
2.4.1 Designation. During the Research Program Term, either party
-----------
shall have the right to nominate for further development as a Collaboration
Product any Product Configuration previously studied or currently under study in
the Research Program. Concurrently, such party shall provide a proposed
Development Plan (as described below) for such proposed Collaboration Product.
At the next Steering Committee meeting, or such later time as the parties may
agree, the Steering Committee shall vote whether or not to designate such
Product Configuration as a Collaboration Product. Any Product Configuration
which is unanimously approved as a Collaboration Product shall be a
Collaboration Product for all purposes of this Agreement. Product
Configurations which are not designated as Collaboration Products as set forth
above shall not be Collaboration Products.
2.4.2 Development Plan. Concurrent with the designation of any
----------------
Product Configuration as a Collaboration Product, the Steering Committee shall
unanimously agree on a comprehensive written development plan for the Territory
for such Collaboration Product through the completion of clinical trials in
Japan (the "Development Plan"), which shall include specific activities, tasks
and timelines for each of Fuso and GenVec reasonable to accomplish the
foregoing, and reasonable budgets for such activities sufficient to accomplish
the foregoing, an assessment of relevant business considerations (including,
without limitation, competitive activities of third parties, any patent rights
of third parties and the likelihood that commercially valuable patent rights
could be obtained for such a Collaboration Product), and principles regarding
the coordination of such activities with the development of Collaboration
Products outside the Territory. All or some of such activities may be conducted
in connection with the Research Program, as agreed by the Steering Committee.
For any Development Plan activities which are to be conducted in connection with
the Research Program or which otherwise involve GenVec, subject to Section 5.1,
the Steering Committee shall agree on the financial obligations of each party
with respect to costs incurred in implementing such Development Plan activities.
2.4.3 No Agreement. In the event that the Steering Committee fails
------------
to agree to designate as a Collaboration Product a particular Product
Configuration that Fuso (i) nominated, (ii) prepared a Development Plan for
meeting the criteria in Section 2.4.2 above, and (iii) supported as a
Collaboration Product by voting for the applicable Development Plan, then GenVec
may not independently develop or commercialize such Product Configuration in the
Territory for the Field until after the Research Program Term, unless GenVec
has, subject to Section 2.4.4, previously commenced or established its intent to
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commence research (as shown by written records) with respect to such a Product
Configuration, alone or with a third party, prior to the date Fuso proposed to
the Steering Committee that such Product Configuration be designated as a
Collaboration Product.
2.4.4 Independent Development. Subject to Section 2.4.5, Fuso and
-----------------------
GenVec shall each have the right to conduct research relating to the Field
independently or with third parties; provided, however, if either party wishes
to conduct such activities with a commercial third party with regard to a [*]
for a particular indication in the Field during the Research Program Term, and
has no contractual obligations to a third party that would restrict it from
offering rights for such product to the other party hereto, it shall provide the
other party hereto notice and a description of such proposed product and
indication. Within thirty (30) days of a party's receipt of such notice and
description, the party receiving such notice shall notify the other party
whether it wishes to discuss a potential collaboration for the development of
such a product for such indication, and in such event, the parties shall discuss
potential terms of a further collaboration in good faith. If the parties are
unable to reach an agreement within [*] or such longer period as the parties may
agree, the proposing party may develop such [*] product alone or may enter into
a collaboration agreement with a third party for the development of such
product, and the other party hereto shall have no further rights with respect to
such product.
2.4.5 Non-Compete. During the term of the Research Program and for
-----------
[*] thereafter, neither GenVec nor Fuso, directly or indirectly, shall enter
into any collaboration agreement or other agreement with any commercial third
party for the development or commercialization in the Field within the Territory
of [*]. As used herein, "substantially similar" shall mean a product which
contains a gene studied by the parties in the Research program [*].
Notwithstanding the above, if both Fuso and GenVec have agreed in writing to
discontinue the development or commercialization of a particular Product
Configuration, either may develop or commercialize [*].
2.5 Records; Reports of Information.
-------------------------------
2.5.1 Records. The parties shall maintain (i) financial records in
-------
sufficient detail to establish how Research Program funds are expended, and (ii)
scientific records that will properly reflect all work done and results achieved
in the performance of the Research Program (including all data in the form
required under any applicable governmental regulations) in a manner sufficient
to establish the dates of first conception and reduction to practice of any
inventions. Upon request, the parties shall provide each other access to such
records relating to any Collaboration Product during ordinary business hours
during the Research Program Term and [*].
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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2.5.2 Reports. The Steering Committee shall periodically and not
-------
less often than semiannually during the term of the Research Program, request
and the parties shall have the obligation to prepare and provide to the Steering
Committee written reports summarizing the progress of the research performed by
or sponsored by the parties pursuant to the Research Plan during the preceding
half-year. In addition, during the Research Program Term, each party shall
provide the other party with a quarterly accounting report regarding Research
Program expenditures by such party in the preceding quarter.
2.6 Term and Termination of Research Program.
----------------------------------------
2.6.1 Research Program Term. The term of the Research Program shall
---------------------
commence on the Effective Date and, unless terminated earlier pursuant to
Section 2.6.2 or Article 11, shall continue until the fifth anniversary of the
Effective Date (the "Research Program Term").
2.6.2 Termination. After the second anniversary of the Effective
-----------
Date Fuso may with ninety (90) days prior written notice to GenVec, terminate
its support for research by GenVec in connection with the Research Program. In
such an event, the Research Program shall terminate and GenVec may continue, at
its own expense, any such research initiated in connection with the Research
Program. In any such event, subsequent activities undertaken by GenVec shall
not be included in or be part of the Research Program, and notwithstanding any
other provision of this Agreement, any intellectual property developed in
connection with such independent GenVec activities shall not be included in the
GenVec Technology or the Joint Technology.
2.6.3 Lack of Diligence. If GenVec is not diligent and Fuso
-----------------
terminates the Research Program, GenVec shall return to Fuso (i) any amounts
unexpended on the Research Program by GenVec due to GenVec's lack of diligence,
and (ii) any amounts which an arbitrator, in an arbitration proceeding conducted
pursuant to Article 12, deems were expended by GenVec in the Research Program
without acting in a diligent manner ("Non-Diligent Research"). Notwithstanding
the above, any amounts that GenVec has provided to a third party [*]) with the
approval of the Steering Committee to sponsor research related to the Research
Program which an arbitrator deems Non-Diligent Research shall be returned to
Fuso by GenVec only to the extent that GenVec is able to obtain a refund from
such third party.
2.7 Publication.
-----------
2.7.1 Review. As soon as is practicable prior to the oral public
------
disclosure and prior to the submission to any outside person for publication of
a manuscript describing the scientific data resulting from any stage of the
Research Program, the authors of such disclosure shall disclose to the Steering
Committee the disclosure or manuscript to be made or submitted, and shall allow
the Steering Committee at least thirty (30) days to determine whether such
disclosure or manuscript contains subject matter for which patent protection
should be sought prior to publication or which the other believes should be
modified or deleted to avoid regulatory or commercial difficulties. With
respect to publications by investigators or other third parties, such
publications shall be subject to majority review by the Steering Committee under
this Section 2.7 to the extent that Fuso or GenVec (as the case may be) has the
right to do so.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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2.7.2 Delay of Publication. Prior to the expiration of the thirty
--------------------
(30) day period specified in Section 2.7.1, the Steering Committee may notify
the submitting party of its determination that such oral presentation or
manuscript contains objectionable material or material that consists of
patentable subject matter for which patent protection should be sought. The
notified party shall withhold its proposed public disclosure and confer with the
Steering Committee to determine the best course of action to take in order to
modify the disclosure or to obtain patent protection. After resolution of the
regulatory or commercial issues, or the filing of a patent application, the
submitting party shall be free to submit the manuscript and/or make its public
oral disclosure.
2.7.3 Publication Rights. After the expiration of thirty (30) days
------------------
from the date of mailing such disclosure or manuscript, unless Fuso or GenVec
has received from the other or the Steering Committee the written notice
specified above, the authoring party shall be free to submit such manuscript for
publication or to publish the disclosed research results. Any such publication
shall include an acknowledgment of the contributions of each party, subject to
customary scientific norms.
[*]
3. LICENSE GRANTS
3.1 Research Licenses.
-----------------
3.1.1 Licenses to Fuso. Subject to the terms and conditions of this
----------------
Agreement, GenVec hereby grants to Fuso: [*] in the Territory; and (ii) a
non-exclusive, non-transferable, royalty-free license under the GenVec
Technology solely to conduct the Research Program and clinical trials as
described in Article 5 in the Field in the Territory.
3.1.2 License to GenVec. Subject to the terms and conditions of this
-----------------
Agreement, Fuso hereby grants to GenVec a non-exclusive, non-transferable,
royalty-free license under the Fuso Technology solely to conduct research
activities as contemplated herein within the Field (including, but not limited
to, the Research Program and clinical trials as described in Article 5).
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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3.1.3 Sublicenses. GenVec and Fuso may sublicense the rights granted
-----------
in Sections 3.1.1 and 3.1.2 to [*] only to the extent that such sublicenses are
reasonably necessary for GenVec and Fuso to conduct research activities in
connection with the Research Program and clinical trials as described in Article
5.
3.2 Retained Rights. It is understood and agreed that GenVec shall retain
---------------
the exclusive right to (i) make, have made, use, sell and otherwise
commercialize the Collaboration Products for all uses within the Field outside
the Territory; (ii) subject to Section 2.4.5, to make, have made, use, sell and
otherwise commercialize the Collaboration Products for use outside the Field,
both in and outside the Territory; (iii) to make, have made, use and sell
Collaboration Products to Fuso in connection with the activities conducted by
GenVec pursuant to this Agreement, unless and until Fuso assumes manufacture of
the Collaboration Products, and (iv) to practice any method, process or
procedure within, and otherwise develop, exploit and/or commercialize the [*].
3.3 No Implied Licenses. No rights or licenses with respect to the GenVec
-------------------
Technology or the Fuso Technology or other intellectual property owned by GenVec
or Fuso are granted or shall be deemed granted hereunder or in connection
herewith, other than those rights expressly granted in this Agreement.
3.4 Fuso Independent Technology. If during the Research Program Term Fuso
---------------------------
owns or controls intellectual property or materials not within the Fuso
Technology (as defined in Section 1.7) which may be useful for the conduct of
the Research Program or the development or commercialization of Collaboration
Products, Fuso may notify the Steering Committee identifying such intellectual
property and materials, and in such event the parties shall negotiate in good
faith the terms on which Fuso would make available such intellectual property
and materials for the Research Program and/or the development or
commercialization of Collaboration Products. Such terms shall include the terms
relating to the ownership of such Fuso independent technology and improvements
thereto, and shall govern in the event of any conflict between such terms and
the terms of this Agreement. If the parties do not enter into a further written
agreement, Fuso shall have no obligation to make such intellectual property or
materials available to GenVec for any purpose.
4. PAYMENTS
4.1 Research Program Funding. Fuso shall pay to GenVec funding for the
------------------------
Research Program of seven hundred fifty thousand dollars ($750,000) each year
during the Research Program Term. Such amounts shall be paid to GenVec in equal
quarterly installments of one hundred eighty-seven thousand five hundred dollars
($187,500), in advance. The initial payment shall be paid within [*] from the
Effective Date and subsequent payments shall be made on or before the [*] of the
Effective Date. Such payments shall be made without withholding for taxes or any
other charge and, subject to Section 2.6.3, shall be non-refundable.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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4.2 Milestone Cost Reimbursement. Within thirty (30) days following the
----------------------------
first occurrence in [*] of each of the events specified below with respect to
each Collaboration Product, Fuso shall pay to GenVec the following amounts:
*
Fuso shall promptly notify GenVec upon the achievement of each of the
foregoing milestones with respect to each Collaboration Product. It is
understood that such payments shall be made to share the costs incurred by
GenVec in connection with any research, [*] and/or clinical trials in the United
States for such Collaboration Product in consideration for the right to receive
data relating to such research, [*] from GenVec pursuant to Section 5.1.1.
4.3 Withholding Taxes. All payments required to be made to GenVec
-----------------
pursuant to Article 4 shall be without deduction or withholding for or on
account of any taxes or similar governmental charge.
4.4 Taxes. Any transfer taxes, import duties and other taxes or
-----
governmental charges required to be paid in connection with the transfer to Fuso
of any Collaboration Products manufactured by GenVec hereunder shall be the sole
responsibility of Fuso. In the event that GenVec is required to pay any such
amounts. Fuso shall promptly remit payment to GenVec of such amounts.
50 CLINICAL TRIALS
5.1 Collaboration Product Development by Fuso.
-----------------------------------------
5.1.1 Collaboration Products Developed by GenVec. It is understood
------------------------------------------
by the parties that the data to be obtained as the result of clinical trials
conducted by GenVec in the [*] that the Steering Committee agrees [*], and to
provide Fuso with the data [*] in a timely manner.
5.1.2 Collaboration Product Development by Fuso. Except as expressly
-----------------------------------------
provided otherwise in this Agreement, Fuso shall be responsible for all costs of
conducting development of Collaboration Product(s) in the Territory in
accordance with the applicable Development Plan(s), including, without
limitation expenses incurred [*] During the term of this Agreement, Fuso shall
keep GenVec fully informed of its activities subject to this Agreement,
including without limitation the achievement of the milestones set forth in
Section 4.2 and, in
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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addition, on or before January 31 of each year, Fuso shall provide GenVec with a
written report detailing such events and activities.
5.2 Due Diligence.
-------------
5.2.1 Reasonable Efforts. Fuso shall use all reasonable efforts to:
------------------
(i) promptly develop the Collaboration Products following designation of such
Collaboration Product, and (ii) achieve the milestones set forth in Section
5.2.2(a).
5.2.2 Milestones.
----------
(a) Achievement Based. Subject to Sections 5.2.2(b) and 5.2.3
-----------------
below, if each of the following milestones are not timely met by Fuso or its
Sublicensees in Japan with respect to any Collaboration Product with respect to
the dates below (unless other dates are agreed by the Steering Committee and
specified in the applicable Development Plan) the license granted to Fuso with
respect to such Collaboration Product shall terminate in the Territory, and all
rights granted to Fuso relating to such Collaboration Product will revert to
GenVec.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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[*]
5.2.3 Lack of Diligence. In the event that Fuso fails to meet the
-----------------
achievement-based or the expenditure-based diligence milestones with respect to
a particular Collaboration Product, GenVec may terminate this Agreement with
respect to such Collaboration Product pursuant to the provision of Section 11.2,
unless Fuso establishes that it has acted reasonably, diligently and in good
faith to meet the milestones but failed due to events outside Fuso's control,
which may include, but not limited to, [*]. In such event, GenVec shall
thereafter have the exclusive rights to commercialize such Collaboration
Products in the Territory, alone or with third parties.
5.3 Regulatory Filings.
------------------
5.3.1 Research Program-Based Each party and its Affiliates, and,
----------------------
subject to such party's obligations to third parties, its sublicensees, shall
have the right, without charge, to refer to, access, cross reference, and use
documents relating to each Collaboration Product filed by a party or its
Affiliates or Sublicensees with regulatory entities with respect to activities
conducted in connection with the Research Program, [*], and any written
communications to and with the [*].
5.3.2 Outside the Research Program. Subject to its obligations to
----------------------------
third parties, each party and its Affiliates and sublicensees, may in exchange
for reasonable consideration to be agreed by the parties, obtain the right to
refer to, access, cross reference, and [*] relating to each Collaboration
Product, filed by a party or its Affiliates or Sublicensees in agreed
jurisdictions, with respect to activities conducted outside the Research
Program, including clinical studies and other supporting information, and any
[*].
6. MANUFACTURING RIGHTS
6.1 [*]
---
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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6.1.1 [*]. GenVec shall have the first right, but not the [*].
---
6.1.2 Clinical Trials in the Territory. Fuso shall have the first
--------------------------------
right, but not the obligation [*].
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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[*]
7. INTELLECTUAL PROPERTY
7.1 Ownership of Inventions.
-----------------------
7.1.1 Research Program Technology. Subject to Section 7.1.2 below,
---------------------------
(i) title to all inventions and intellectual property made solely by GenVec
employees or its agents (including researchers at [*]) in connection with the
Research Program without inventive contribution by Fuso employees or its agents
shall be owned by GenVec; (ii) title to all inventions and intellectual property
made solely by Fuso employees or its agents (including researchers at [*]
University) in connection with the Research Program without inventive
contribution by GenVec employees or its agents shall be owned by Fuso; and (iii)
title to all inventions and intellectual property made jointly by employees or
the agents of Fuso and GenVec in connection with the Research Program, shall be
jointly owned by GenVec and Fuso.
7.1.2 [*]. Notwithstanding Section 7.1.1 above,
---
title to all inventions and intellectual property which relates to [*] made
solely by GenVec employees or its agents (including researchers at [*]) or
jointly by employees or the agents of Fuso and GenVec in connection with the
Research Program (in each case, [*]) shall be owned by GenVec. Fuso hereby
assigns to GenVec all its right, title and interest it may otherwise hold in or
to such [*] and any patent applications or patents relating thereto. Fuso shall,
at the request of GenVec, execute, and deliver or cause to be delivered, all
such consents, documents or further instruments of assignment or transfer, and
take or cause to be taken all such actions GenVec reasonably deems necessary or
desirable in order for GenVec to obtain the full benefits of the assignment
herein.
7.1.3 Inventorship. Inventorship and rights of ownership of
------------
inventions and other intellectual property rights conceived and/or reduced to
practice in connection with the Research Program shall be determined in
accordance with the patent and other intellectual property laws of the United
States or the State of Maryland, as applicable, as long as the laws of the
Territory permit application of such laws. Subject to the licenses granted in
Article 3, except as expressly provided in this Agreement, it is understood that
neither party shall have any obligation to account to the other for profits, or
to obtain any approval of
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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the other party to license or exploit a joint invention for applications outside
of the Field by reason of joint ownership of any such intellectual property.
7.2 Patent Prosecution
------------------
7.2.1 Sole Inventions. Fuso or GenVec, as the case may be, shall, be
---------------
responsible for preparing, filing, prosecuting and maintaining of the patent
applications and patents, solely owned by it, worldwide in such countries as it
deems appropriate, and conducting any interferences, reexaminations, reissues,
oppositions or requests for patent term extensions relating to the Fuso
Technology or GenVec Technology (respectively), using counsel of its choice, at
its expense; provided, such expenses may be included in the Research Program
funding described in Section 2.3.
7.2.2 Joint Patent Rights.
-------------------
(i) The parties will cooperate to file, prosecute and maintain
patent applications covering the Joint Invention(s) in the United States,
European Union (in Europe through a European Patent Convention application) and
Japan (collectively, the "Core Countries") and other countries agreed by the
parties. The parties shall agree which party shall be responsible for conducting
such activities with respect to a particular Joint Invention. The party
conducting such activities shall keep the other party fully informed as to the
status of such patent matters, including, without limitation, by providing the
other party the opportunity, at the other party's expense, to review and comment
on any documents relating to the Joint Invention which will be filed in any
patent office at least thirty (30) days before such filing, and promptly
providing the other party copies of any documents relating to Joint Invention
which the party conducting such activities receives from such patent offices,
including notice of all interferences, reissues, reexaminations, oppositions or
requests for patent term extensions. The parties will share equally all expenses
and fees associated with the filing, prosecution, issuance and maintenance of
any patent application and resulting patent for a Joint Invention in the Core
Countries and other agreed countries and such amounts shall be included within
the Research Program funding described in Section 2.3.
(ii) In the event that either party wishes to seek patent
protection with respect to any Joint Invention outside the Core Countries, it
shall notify the other party hereto. If both parties wish to seek patent
protection with respect to such Joint Invention in such country or countries,
activities shall be subject to Section 7.2.2(a) above. If only one party wishes
to seek patent protection with respect to such Joint Invention in such country
or countries, it may file, prosecute and maintain patent applications and
patents with respect thereto, at its own expense. In any such case, the party
declining to participate in such activities shall not grant any third party a
license under its interest in the applicable Joint Invention in the applicable
country or countries without the prior written consent of the other party.
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7.3 Enforcement.
-----------
7.3.1 Solely Owned Technology. Subject to 7.3.2 below, in the event
-----------------------
that any GenVec Technology or Fuso Technology (in this Section, both referred to
as "Technology") necessary for use of a Collaboration Product is infringed or
misappropriated by a third party in any country in the Territory, or is subject
to a declaratory judgment action arising from such infringement in such country,
Fuso or GenVec, as the case may be, shall promptly notify the other party
hereto. The party which owns or controls such Technology (the "Owner") shall
have the initial right (but not the obligation) to enforce such Technology, or
defend any declaratory judgment action with respect thereto, at its expense. In
the event that the Owner fails to initiate a suit to enforce such Technology
against a commercially significant infringement in the Field by a third party in
any jurisdiction in the Territory within [*] of a request by the other party
(the "Licensee") to do so, Licensee may, subject to the Owner's agreements with
third parties, initiate such suit in the name of the Owner of such Technology
against such infringement, at the expense of such Licensee. The party involved
in any such claim, suit or proceeding, shall keep the other party hereto
reasonably informed of the progress of any such claim, suit or proceeding. Any
recovery by such party received as a result of any such claim, suit or
proceeding shall be used first to reimburse such party for all expenses
(including attorneys and professional fees) incurred in connection with such
claim, suit or proceeding and if the party initiating the suit was the owner of
the subject Technology, all of the remainder shall be retained by such owner,
and if the party initiating the suit is the Licensee, [*] of the remainder shall
be paid to the owner of the subject Technology and [*] retained by the Licensee.
7.3.2 Jointly Owned Technology. Notwithstanding 7.3.1 above, in the
------------------------
event that any technology that is jointly owned by GenVec and Fuso under Section
7.1 of this Agreement is infringed or misappropriated by a third party, Fuso and
GenVec shall discuss whether, and, if so, how, to enforce such Joint Technology
or defend such Joint Technology in an infringement action, declaratory judgment
or other proceeding. In the event only one party wishes to participate in such
proceeding, it shall have the right to proceed alone, at its expense, and may
retain any recovery; provided, at the request and expense of the participating
party, the other party agrees to cooperate and join in any proceedings in the
event that a third party asserts that the co-owner of such Joint Invention is
necessary or indispensable to such proceedings.
7.4 Infringement Claims. If the use of any Collaboration Product in
-------------------
clinical trials in the Territory pursuant to this Agreement results in any
claim, suit or proceeding alleging patent infringement against GenVec or Fuso,
such party shall promptly notify the other party hereto. If Fuso is not named
as a party in such a claim, suit or proceeding, Fuso may, at its own expense and
through counsel of its own choice, seek leave to intervene in such claim, suit
or proceeding. GenVec agrees not to oppose such intervention. If Fuso, and not
GenVec, is named as a party to such claim, suit or proceeding, Fuso shall have
the right to control the defense and settlement of such claim, suit or
proceeding, at its own expense, using counsel of its own choice, however GenVec,
at its own expense and through counsel of its own choice, may seek to intervene
if the claim, suit or proceeding relates to the commercialization of the
Collaboration Product in the Field, and in such event, Fuso agrees not to oppose
such intervention. If Fuso is named as a party and GenVec shall, at any time,
tender its defense to Fuso, then Fuso shall defend GenVec in such claim, suit or
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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proceeding, at Fuso' s own expense and through counsel of its own choice, and
Fuso shall control the defense and settlement of any such claim, suit or
proceeding; provided, Fuso shall not enter into any agreement which makes any
admission regarding (i) wrongdoing on the part GenVec, or (ii) the invalidity,
unenforceability or absence of infringement of any GenVec Patent Rights or
patent claiming a Joint Invention, without the prior written consent of GenVec,
which consent shall not be unreasonably withheld. The parties shall cooperate
with each other in connection with any such claim, suit or proceeding and shall
keep each other reasonably informed of all material developments in connection
with any such claim, suit or proceeding.
8. REPRESENTATIONS AND WARRANTIES
8.1 Warranties.
----------
8.1.1 GenVec. GenVec warrants and represents to Fuso that (i) it has
------
the full right and authority to enter into this Agreement and grant the rights
and licenses granted herein; (ii) as of the Effective Date, there are no
existing or threatened actions, suits or claims pending against it with respect
to the GenVec Technology or its right to enter into and perform its obligations
under this Agreement; (iii) it has not previously granted, and will not grant
during the term of this Agreement, any right, license or interest in or to
GenVec Technology or Joint Technology, or any portion thereof, which are in
conflict with the rights or licenses granted under this Agreement; and (iv) as
of the Effective Date, GenVec believes that the patent applications and patents
listed on Exhibit A hereto is a complete list of patent applications and patents
owned or controlled by GenVec necessary or useful for the conduct of the
Research Program, provided, however, the foregoing does not apply to [*] or the
use thereof.
8.1.2 Fuso. Fuso warrants and represents to GenVec that (i) it has
----
the full right and authority to enter into this Agreement, and (ii) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to Fuso Technology or Joint Technology, or any
portion thereof, which are in conflict with the rights or licenses granted under
this Agreement.
8.2 Effect of Representations and Warranties. It is understood that if
----------------------------------------
the representations and warranties under this Article 8 are not true and
accurate and GenVec or Fuso incurs liabilities, costs or other expenses as a
result of such falsity, GenVec or Fuso, as the case may be, shall indemnify,
defend and hold the other party harmless from and against any such liabilities,
costs or expenses incurred, provided that the indemnifying party receives prompt
notice of any claim against GenVec or Fuso, as the case maybe, resulting from or
related to such falsity, the cooperation of the indemnified party, as requested
in connection with any such claim, and the sole right to control the defense or
settlement thereof.
8.3 Disclaimer of Warranties. GenVec and Fuso each specifically disclaim
------------------------
that the Research Program will be successful, in whole or part. GENVEC AND FUSO
EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE, WITH RESPECT TO THE CONFIDENTIAL INFORMATION, OR FUSO TECHNOLOGY OR
GENVEC
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY,
NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF FUSO
TECHNOLOGY OR GENVEC TECHNOLOGY, PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF
THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
9. CONFIDENTIALITY
9.1 Confidential Information. Except as expressly provided herein, the
------------------------
parties agree that, for the term of this Agreement and for [*]
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose except for the
purposes contemplated by this Agreement any Confidential Information furnished
to it by the disclosing party hereto pursuant to this Agreement, except that to
the extent that it can be established by the receiving party by competent proof
that such Confidential Information:
(i) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(ii) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;
(iii) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement;
(iv) was independently developed by the receiving party without
reference to any information or materials disclosed by the disclosing party; or
(v) was subsequently disclosed to the receiving party by a person
other than a party without breach of any legal obligation to the disclosing
party.
9.2 Permitted Disclosures. Each party hereto may disclose another's
---------------------
Confidential Information to the extent such disclosure is reasonably necessary
in connection with the conduct of the Research Program activities to be
conducted at [*] (or any other academic institution approved by the Steering
Committee), in filing or prosecuting patent applications, prosecuting or
defending litigation, complying with applicable governmental regulations or
otherwise submitting information to tax or other governmental authorities, [*],
or making a permitted sublicense or otherwise exercising its rights hereunder,
provided that if a party is required to make any such disclosure of another
party's confidential information, other than pursuant to a confidentiality
agreement, it will give reasonable advance notice to the latter party of such
disclosure and, save to the extent inappropriate in the case of patent
applications, will use its best efforts to secure confidential treatment of such
information prior to its disclosure (whether through protective orders or
otherwise).
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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9.3 Non-Disclosure. Each of the parties hereto agrees not to disclose to
--------------
any third party the financial terms of this Agreement without the prior written
consent of each other party hereto, except to advisors, investors and others on
a need to know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Without limitation
upon any provision of this Agreement, each of the parties hereto shall be
responsible for the observance by its employees of the foregoing confidentiality
obligations. Notwithstanding the foregoing, the parties shall agree upon a
press release to announce the execution of this Agreement, together with a
corresponding Q&A outline for use in responding to inquiries about the
Agreement; thereafter, GenVec and Fuso may each disclose to third parties the
information contained in such press release and Q&A without the need for further
approval by the other.
10. INDEMNIFICATION
10.1 Indemnification of Fuso. GenVec shall indemnify and hold Fuso and
-----------------------
its Affiliates, and their respective directors, officers, employees, agents and
counsel, and the successors and assigns of the foregoing (the "Fuso
Indemnitees"), harmless from and against any and all liabilities, damages,
losses, costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration) resulting from a claim,
suit or proceeding brought by a third party against a Fuso Indemnitee, arising
from or occurring as a result of': (i) GenVec's conduct of the Research
Program, (ii) the research, development, use or clinical testing of any Product
Configuration and/or Collaboration Product by GenVec or its Affiliates or
licensees (including without limitation, product liability claims), or (iii) the
failure of Collaboration Products manufactured by GenVec to meet the relevant
specifications, except, in each case, to the extent caused by the negligence or
willful misconduct of Fuso.
10.2 Indemnification of GenVec. Fuso shall indemnify and hold GenVec and
-------------------------
its Affiliates and their respective directors, officers, employees, agents and
counsel and the successors and assigns of the foregoing (the "GenVec
Indemnitees"), harmless from and against any and all liabilities, damages,
losses, costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration) resulting from a claim,
suit or proceeding brought by a third party against a GenVec Indemnitee, arising
from or occurring as a result of; (i) Fuso's conduct of the Research Program, or
(ii) the research, development, use or clinical testing of any Product
Configuration and/or Collaboration Product by Fuso or its Affiliates or
Sublicensees (including without limitation, product liability claims), except,
in each case, to the extent caused by the negligence or willful misconduct of
GenVec.
10.3 Procedure. A party (the "Indemnitee") that intends to claim
---------
indemnification under this Article 10 shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its Affiliates, Sublicensees or their
directors, officers, employees, agents or counsel intend to claim such
indemnification, and the Indemnitor shall have the right to participate in, and,
to the extent the Indemnitor so desires, to assume the defense thereof with
counsel mutually satisfactory to the parties. The indemnity agreement in this
Article 10 shall not apply to amounts paid in settlement of any loss, claim,
damage, liability or action if such settlement is made without the consent of
the Indemnitor, which consent shall not be withheld unreasonably. The failure
to deliver
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written notice to the Indemnitor within a reasonable time after the commencement
of any such action, if prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this Article
10. At the Indemnitor's request, the Indemnitee under this Article 10, and its
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any action, claim or
liability covered by this indemnification and provide full information with
respect thereto.
11. TERM AND TERMINATION
11.1 Term. This Agreement shall be effective as of the Effective Date
----
and, unless otherwise terminated earlier pursuant to the other provisions of
this Article 11, shall continue in full force and effect until the expiration or
termination of the Research Program; provided, that the license granted to Fuso
under Section 3.1 and the obligations set forth in Sections 5.1 and 5.2 and
Article 6 shall remain in effect with respect to any Product Configuration which
prior to the effective date of such expiration or termination was designated by
the Steering Committee as a Collaboration Product on a Collaboration Product-by-
Collaboration Product basis, until the earlier of (i) [*].
11.2 Termination for Cause. Either party may terminate this Agreement in
---------------------
the event the other party has materially breached or defaulted in the
performance of any of its obligations hereunder, and such default has continued
for [*] after written notice thereof was provided to the breaching party by the
nonbreaching party. Any termination shall become effective at the end of such
[*] period unless the breaching party has cured any such breach or default prior
to the expiration of the [*] period. Notwithstanding the above, in the case of a
failure to pay any amount due hereunder the period for cure of any such default
following notice thereof shall be [*] and, unless payment is made within such
period, the termination shall become effective at the end of such period.
11.3 Termination for Insolvency. If voluntary or involuntary proceedings
--------------------------
by or against a party are instituted in bankruptcy under any insolvency law, or
a receiver or custodian is appointed for such party, or proceedings are
instituted by or against such party for corporate reorganization or the
dissolution of such party, which proceedings, if involuntary, shall not have
been dismissed within [*] after the date of filing, or if such party makes an
assignment for the benefit of creditors, or substantially all of the assets of
such party are seized or attached and not released within [*] thereafter, the
other party may immediately terminate this Agreement effective upon notice of
such termination.
11.4 Permissive Termination. After the second anniversary of the Research
----------------------
Program, Fuso may, at its sole discretion, terminate this Agreement at any time
with [*] prior notice pursuant to Section 2.6.2.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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[*]
11.6 Termination of Commercialization Agreement. If the Commercialization
------------------------------------------
Agreement terminates, this Agreement shall terminate concurrently.
11.7 Effect of Breach or Termination.
-------------------------------
11.7.1 Accrued Obligations. Termination of this Agreement for any
-------------------
reason shall not release any party hereto from any liability which, at the time
of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination, nor preclude either party
from pursuing any rights and remedies it may have hereunder or at law or in
equity which accrued or are based upon any event occurring prior to such
termination.
11.7.2 Return of Materials. Upon the discontinuance of the research
-------------------
and development activities with respect to a particular Product Configuration,
whether due to termination of this Agreement or otherwise, if a corresponding
Collaboration Product is not being commercialized pursuant to the
Commercialization Agreement, Fuso and GenVec shall promptly return to the other
party all materials and Confidential Information received from the other party
relating specifically to such Product Configuration (except one copy of which
may be retained by legal counsel for archival purposes).
11.7.3 Licenses.
--------
(a) The licenses granted Fuso herein shall terminate in the
event of a termination pursuant to Section 11.2, 11.3, 11.4 (subject to Section
11.1), 11.5 or 11.6.
(b) The licenses granted to GenVec in Section 3.1.2 shall
terminate only in the event of a termination by Fuso pursuant to Section 11.2 or
11.3 or 11.6.
11.8 Survival. Sections 2.5.1, 2.7, 3.2, 3.3, 5.3, 11.1, 11.7 and 11.8
--------
and Articles 4, 7, 8, 9, 10, 12 and 13 shall survive the expiration or
termination of this Agreement for any reason.
12. DISPUTE RESOLUTION
12.1 Mediation. If a dispute arises out of or relates to this Agreement,
---------
or the breach thereof, and if said dispute cannot be settled through
negotiation, the parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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12.2 Arbitration. Any dispute under this Agreement (except any dispute
-----------
relating to the validity or enforceability of any patent) which is not settled
by mutual consent shall be finally settled by binding arbitration. Such
arbitration shall be conducted in accordance with the International Arbitration
Rules of the Asia/Pacific Center by three (3) arbitrators appointed in
accordance with said rules and shall be held in San Francisco, California. At
least one of the arbitrators shall be an independent expert in pharmaceutical
product development (including clinical development and regulatory affairs).
The arbitrators shall determine what discovery will be permitted, consistent
with the goal of limiting the cost and time which the parties must expend for
discovery; provided the arbitrators shall permit such discovery as they deem
necessary to permit an equitable resolution of the dispute. Any written
evidence originally in a language other than English shall be submitted in
English translation accompanied by the original or a true copy thereof. The
costs of the arbitration including administrative and arbitrators' fees, shall
be shared equally by the parties and each party shall bear its own costs and
attorneys' and witness' fees incurred in connection with the arbitration. A
disputed performance or suspended performances pending the resolution of the
arbitration must be completed within thirty (30) days following the final
decision of the arbitrators or such other reasonable period as the arbitrators
determine in a written opinion. Any arbitration subject to this Article shall
be completed within one (1) year from the filing of notice of a request for such
arbitration. No punitive damages may be granted by the arbitrators. The
arbitration proceedings and the decision shall not be made public without the
joint consent of the parties and each party shall maintain the confidentiality
of such proceedings and decision unless otherwise permitted by the other party.
The parties agree that the decision shall be the sole, exclusive and binding
remedy between them regarding any and all disputes, controversies, claims and
counterclaims presented to the arbitrators. Any award may be entered in a court
of competent jurisdiction for a judicial recognition of the decision and an
order of enforcement.
13. MISCELLANEOUS
13.1 Governing Law. This Agreement and any dispute arising from the
-------------
performance or breach hereof shall be governed by and construed in accordance
with the laws of the State of California, without reference to conflicts of laws
principles.
13.2 Waiver. Neither party may waive or release any of its rights or
------
interests in this Agreement except in writing. The failure of either party to
assert a right hereunder or to insist upon compliance with any term or condition
of this Agreement shall not constitute a waiver of that right or excuse a
similar subsequent failure to perform any such term or condition.
13.3 Assignment. [*]
----------
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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13.4 Notices. Any notices, requests and other communications hereunder
-------
shall be in writing and shall be personally delivered or sent by international
express delivery service, registered or certified mail, return receipt
requested, postage prepaid, in each case to the respective address specified
below, or such other address as may be specified in writing to the other parties
hereto:
FUSO: Fuso Pharmaceutical Industries, Ltd
3-11, 2-Chome, Morinomiya, Joto-ku
Osaka 536, Japan
Attn: President
With a copy to: Director, Research and Development Center
GENVEC: GenVec, Inc.
12111 Parklawn Drive,
Rockville, Maryland 20852
Attn: President
With a copy to: Vice President, Corporate Development
13.5 Performance Warranty. Fuso and GenVec hereby respectively warrant
--------------------
and guarantee the performance of any and all rights and obligations of this
Agreement by their Affiliate(s) and sublicensees.
13.6 Force Majeure. Neither party shall be liable to the other for
-------------
failure or delay in the performance of any of its obligations under this
Agreement for the time and to the extent such failure or delay is caused by
earthquake, riot, civil commotion, war, hostilities between nations,
governmental law, order or regulation, embargo, action by the government or any
agency thereof, act of God, storm, fire, accident, labor dispute or strike,
sabotage, explosion or other similar or different contingencies, in each case,
beyond the reasonable control of the respective party. The party affected by
Force Majeure shall provide the other party with full particulars thereof as
soon as it becomes aware of the same (including its best estimate of the likely
extent and duration of the interference with its activities), and will use its
best endeavors to overcome the difficulties created thereby and to resume
performance of its obligations as soon as practicable. If the performance of
any obligation under this Agreement is delayed owing to a force majeure for any
continuous period of more than six (6) months, the parties hereto shall consult
with respect to an equitable solution including the possible termination of this
Agreement.
13.7 Independent Contractors. Nothing contained in this Agreement is
-----------------------
intended implicitly, or is to be construed, to constitute Fuso or GenVec as
partners in the legal sense. No party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of any other party or to bind any other party to any contract, agreement or
undertaking with any third party.
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13.8 Advice of Counsel. GenVec and Fuso have each consulted counsel of
-----------------
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.
13.9 Other Obligations. Except as expressly provided in this Agreement or
-----------------
as separately agreed upon in writing between GenVec and Fuso, each party shall
bear its own costs incurred in connection with the implementation of the
obligations under this Agreement.
13.10 Independent Research. Except as expressly provided herein, each
--------------------
party acknowledges and agrees that Fuso and GenVec shall have the right to
engage in their own research and development activities outside the Research
Program. Neither party shall, by virtue of this Agreement, have any right,
title or interest in or to such independent activities or to the income or
profits derived therefrom.
13.11 Severability. In the event that any provisions of this Agreement
------------
are determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without said provision. The parties shall in good faith negotiate a
substitute clause for any provision declared invalid or unenforceable, which
shall most nearly approximate the intent of the parties in entering this
Agreement; provided, if the parties are unable to agree on such a substitute
clause and the deletion of the provision held invalid or unenforceable would
produce material adverse financial consequences for one party, such party shall
have the right to terminate the Agreement with [*] notice.
13.12 Further Assurances. At any time or from time to time on and after
------------------
the date of this Agreement, either party shall at the request of the other party
(i) deliver to the requesting party such records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
assignment, transfer or license, and (iii) take or cause to be taken all such
actions, as the requesting party may reasonably deem necessary or desirable in
order for the requesting party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.
13.13 Foreign Corrupt Practices Act. In conformity with the United States
-----------------------------
Foreign Corrupt Practices Act, Fuso and its employees and agents shall not
directly or indirectly make any offer, payment, promise to pay, or authorize
payment, or offer a gift, promise to give, or authorize the giving of anything
of value for the purpose of influencing an act or decision of an official of any
government within the Territory or the United States Government (including a
decision not to act) or inducing such official to use his influence to affect
any such governmental act or decision in order to obtain, retain, or direct any
such business.
13.14 Export Laws. Notwithstanding anything to the contrary contained
-----------
herein, all obligations of GenVec and Fuso are subject to prior compliance with
United States export regulations and such other United States or Japanese laws
and regulations as may be applicable, and to obtaining all necessary approvals
required by the applicable agencies of the government of the United States or
Japan. GenVec
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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and Fuso, respectively, shall each use its best efforts to obtain such approvals
from its own government. Each party shall cooperate with the other party and
shall provide assistance to the other party as reasonably necessary to obtain
any required approvals.
13.15 Approvals. Each party shall be responsible, at its expense, for
---------
obtaining any approvals from its own government which may be required under
applicable law, and shall use its best efforts to obtain all necessary approvals
as soon as possible after the execution of this Agreement.
13.16 Entire Agreement. This Agreement together with the attached
----------------
Exhibit, and the Commercialization Agreement, and Stock Purchase Agreement
entered by the parties of even date herewith, constitute the entire agreement,
both written or oral, with respect to the subject matter hereof, and supersede
all prior or contemporaneous understandings or agreements, whether written or
oral, between Fuso and GenVec with respect to such subject matter.
13.17 Headings. The captions to the several Sections and Articles hereof
--------
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.
13.18 Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed an original and which together shall constitute
one instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the Effective Date.
FUSO PHARMACEUTICAL GENVEC, INC.
INDUSTRIES, LTD.
By:_____________________________ By:________________________
Name:___________________________ Name:______________________
Title:__________________________ Title:_____________________
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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EXHIBIT 10.10
COMMERCIALIZATION AGREEMENT
This COMMERCIALIZATION AGREEMENT (the "Agreement"), effective as of
September 26, 1997 (the "Effective Date"), is made by and between Fuso
Pharmaceutical Industries, Ltd., a corporation organized under the laws of
Japan, with a principal place of business at 3-11, 2-Chome, Morinomiya, Joto-ku
Osaka 536 Japan and its registered head office at 7-10, 1-Chome, Doshomachi,
Chuo-ku, Osaka 541 Japan ("Fuso"), and GenVec, Inc., a Delaware corporation,
with a principal place of business at 12111 Parklawn Drive, Rockville, Maryland
20852 ("GenVec").
BACKGROUND
A. GenVec has expertise in the field of gene therapy and is developing
novel, proprietary materials and methods for use in the treatment of human
cancer.
B. Fuso is in the business of developing manufacturing and
commercializing pharmaceuticals in Japan.
C. GenVec and Fuso desire to establish a collaborative relationship to
conduct research and develop certain gene therapy products for the treatment of
human cancer, which Fuso shall have the right to commercialize in the Territory
(as defined below) and GenVec shall have the right to commercialize outside the
Territory.
D. GenVec and Fuso have entered into a Stock Purchase Agreement of even
date herewith, pursuant to which GenVec shall sell to Fuso, and Fuso shall
purchase 444,445 shares of GenVec Series E Convertible Preferred Stock. This
Commercialization Agreement shall only be effective if the purchase of such
stock is timely completed as set forth in the Stock Purchase Agreement.
NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:
1. DEFINITIONS
1.1 Incorporation by Reference. For purposes of this Agreement, the
--------------------------
capitalized terms used in this Agreement which are not defined herein shall have
the meanings set forth in the Collaboration Agreement.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
1.2 "Affiliate" shall mean any corporation or other entity which is
---------
directly or indirectly controlling, controlled by or under the common control of
a party hereto. For the purpose of this Agreement, "control" shall mean the
direct or indirect ownership of at least fifty percent (50%) of the outstanding
shares or other voting rights of the subject entity to elect directors, or if
not meeting the preceding, any entity owned or controlled by or owning or
controlling at the maximum control or ownership right permitted in the country
where such entity exists.
1.3 "Collaboration Agreement" shall mean that certain Collaboration
-----------------------
Agreement between the parties effective on even date herewith.
1.4 "Collaboration Product" shall mean a Product Configuration developed
---------------------
in the Research Program intended for use in the Field which the Steering
Committee has designated as such pursuant to Section 2.4 of the Collaboration
Agreement.
1.5 "Confidential Information" shall mean (i) any proprietary or
------------------------
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder which
is identified as confidential or proprietary when disclosed and such disclosure
of confidential information is confirmed in writing within thirty (30) days by
the disclosing party.
1.6 "Development Plan" shall mean the written plan for development of a
----------------
particular Collaboration Product prepared pursuant to Section 2.4.2 of the
Collaboration Agreement.
1.7 [*]
1.8 "Fuso Technology" shall mean Fuso Patent Rights and Fuso Know-How:
---------------
1.8.1 "Fuso Patent Rights" shall mean (i) all patents and patent
------------------
applications conceived and reduced to practice by Fuso alone, or Fuso and/or its
agents (including researchers at [*] University), in connection with the
Research Program during the Research Program Term (as defined in Section 1.19 of
the Collaboration Agreement), and (ii) any divisions, continuations,
continuations-in-part, reissues, reexaminations, extensions or other
governmental actions which extend any of the subject matter of the patent
applications or patents in (i) above, and any substitutions, confirmations,
registrations or revalidations of any of the foregoing, in each case, which is
owned or controlled, in whole or part, by license, assignment or otherwise by
Fuso, to the extent Fuso has the right to license or sublicense, and subject to
any limitations of such license or sublicense. For the avoidance of doubt, the
Fuso Patent Rights shall not include Fuso Know-How or any [*].
1.8.2 "Fuso Know-How" shall mean confidential information and
-------------
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired by Fuso alone, or Fuso
and/or its agents
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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(including researchers at [*] University), in connection with the Research
Program during the Research Program Term which Fuso has the right to license or
sublicense, and subject to any limitations of such license or sublicense. For
the avoidance of doubt, Fuso Know-How shall not include any Fuso Patent Rights
or any [*].
1.9 "Field" shall mean Gene Therapy for the treatment of human cancer,
-----
[*]
1.10 "Gene Therapy" shall mean the introduction of a gene into a person
------------
for therapeutic purposes (i) by in vivo introduction for incorporation into
cells of such person, or (ii) by ex vivo introduction into cells for transfer
into a person.
1.11 [*] shall have the meaning set forth in Section
7.1.2 below.
1.12 "GenVec Technology" shall mean GenVec Patent Rights, GenVec Know-How
-----------------
and [*].
1.12.1 "GenVec Patent Rights" shall mean (i) all patents and patent
--------------------
applications listed on Exhibit A hereto, or conceived and reduced to practice by
GenVec alone, or GenVec and/or its agents (including researchers at DFCI) in
connection with the Research Program during the Research Program Term, and (ii)
any divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions or other governmental actions which extend any of the subject matter
of the patent applications or patents in (i) above, and any substitutions,
confirmations, registrations or revalidations of any of the foregoing, in each
case, which is owned or controlled, in whole or part, by license, assignment or
otherwise by GenVec, to the extent GenVec has the right to license or
sublicense, and subject to any limitations of such license or sublicense. For
the avoidance of doubt, the GenVec Patent Rights shall not include GenVec Know-
How.
1.12.2 "GenVec Know-How" shall mean confidential information and
---------------
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired by GenVec alone, or
GenVec and/or its agents (including researchers at [*]), in connection with the
Research Program during the Research Program Term, which GenVec has the right to
license or sublicense, and subject to any limitations of such license or
sublicense. For the avoidance of doubt, GenVec Know-How shall not include any
GenVec Patent Rights.
1.13 "Joint Technology" shall mean the Joint Patent Rights and Joint Know-
----------------
How.
1.13.1 "Joint Patent Rights" shall mean (i) all patents and patent
-------------------
applications conceived and reduced to practice jointly by Fuso (or its agents,
including researchers at [*] University) and GenVec (or its agents, including
researchers at [*] ) in connection with the
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TRETMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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Research Program during the Research Program Term and (ii) any divisions,
continuations, continuations-in-part, reissues, reexaminations, extensions or
other governmental actions which extend any of the subject matter of the patent
applications or patents in (i) above, and any substitutions, confirmations,
registrations or revalidations of any of the foregoing. For the avoidance of
doubt, the Joint Patent Rights shall not include the Joint Know-How or any
[*].
1.13.2 "Joint Know-How" shall mean confidential information and
--------------
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired jointly by Fuso (or its
agents, including researchers at [*] University), and GenVec (or its agents,
including researchers at [*], in connection with the Research Program during
the Research Program Term. For the avoidance of doubt, the Joint Know-How shall
not include the Joint Patent Rights or any [*].
1.14 "MHW" shall mean the Japanese Ministry of Health and Welfare, or any
---
corresponding foreign registration or foreign regulatory authority in the
Territory.
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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[*]
1.16 "Product Configuration" shall mean any potential product for use in
---------------------
the Field containing a combination of one or more genes (or fragments thereof
and other elements (e.g., a gene delivery vehicle and/or a gene expression
cassette).
1.17 "Product License Application" or "PLA" shall mean the Japanese
--------------------------- ---
equivalent of a Product License Application, as defined in the U.S. Food, Drug
and Cosmetic Act and the regulations promulgated thereunder, and any
corresponding foreign application, registration or certification in the
Territory.
1.18 "Steering Committee" shall have the meaning set forth in Section 2.2
------------------
in the Collaboration Agreement.
1.19 "Sublicensee" shall mean a third party to whom Fuso has granted a
-----------
license or sublicense under the GenVec Technology or Joint Technology to make,
use and/or sell a Collaboration Product subject to Section 2.2 below. As used
in this Agreement, Sublicensee shall also include a third party to whom Fuso has
granted the right to distribute the Collaboration Product, provided that such
third party has the responsibility for marketing and/or promotion of the
Collaboration Product within the territory for which such distribution rights
are granted. For the avoidance of doubt, wholesellers or retailers who do not
take such responsibility shall not be deemed as Sublicensees. Further, Contract
Manufacturers set forth in Section 2.2.2 shall not be included in Sublicensees.
1.20 "Territory" shall mean [*], and, where the option set forth in
---------
Section 5.2.1 is exercised by [*] , as the case may be.
"Retained Territory" shall mean, on a Collaboration Product-by-Collaboration
------------------
Product basis, [*] until the earlier of (i)
[*] , or (ii) the
applicable [*] expires, and thereafter shall have the same meaning as
Territory with regard to such Collaboration Product.
1.21 "Valid Claim" shall mean a claim of a pending patent application or a
-----------
claim of an issued and unexpired patent within the GenVec Technology or Joint
Patent Rights which has not been held unpatentable, invalid or unenforceable by
a court or other government agency of
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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competent jurisdiction in an unappealed or unappealable decision and has not
been admitted to be invalid or unenforceable through reissue, re-examination,
disclaimer or otherwise; provided, however, that if the holding of such court or
agency is later reversed by a court or agency with appropriate authority, the
claim shall be reinstated as a Valid Claim with respect to Net Sales accruing
after the date of such reversal.
2. LICENSE GRANTS
2.1 Commercialization Licenses to Fuso. Subject to the terms and
----------------------------------
conditions of this Agreement, GenVec hereby grants to Fuso an exclusive,
royalty-bearing license under the GenVec Technology and GenVec's interest in the
Joint Technology, to make (subject to Article 6), have made (subject to Section
2.2.2) use, sell and otherwise commercialize Collaboration Products for all uses
in the Field in the Territory.
2.2 Sublicenses and Contract Manufacturing.
--------------------------------------
2.2.1 Sublicensees. Fuso may sublicense the rights to make, use
------------
and/or sell granted in Section 2.1 to third parties, with the prior written
consent of GenVec, which consent shall not be unreasonably withheld. Fuso may
sublicense the rights granted in Section 2.1 to make Collaboration Products to
Affiliates of Fuso without the consent of GenVec, and such sublicense shall
remain in effect so long as such party remains an Affiliate of Fuso. Each
sublicense granted by Fuso shall be consistent with all the terms and conditions
of this Agreement. Fuso shall remain responsible to GenVec for all of each such
Sublicensee's applicable financial and other obligations under this Agreement.
[*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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2.3.2 Fuso Technology. Subject to the provisions of Section 7.1.2
---------------
below, Fuso hereby grants to GenVec the following licenses under the Fuso
Technology and Fuso's interest in the Joint Technology:
[*]
2.3.3 GenVec may sublicense the rights granted in Section 2.3.2 to
third parties, with the prior written consent of Fuso, which consent shall not
be unreasonably withheld. GenVec may sublicense the right granted in Section
2.3.2 to make Collaboration Products to Affiliates of GenVec without such
consent of GenVec. Each sublicense granted by GenVec shall be consistent with
all the terms and conditions of this Agreement and no Sublicensee may grant
further sublicenses without the prior written consent of GenVec. GenVec shall
remain responsible to Fuso for all of each such sublicensee's applicable
financial and other obligations under this Agreement.
2.4 Covenant Not to Sue. In partial consideration for the grant of rights
-------------------
hereunder, Fuso agrees not to enforce against GenVec or its Affiliates any
patent right owned or controlled by Fuso or its Affiliates during the term of
this Agreement that GenVec or its Affiliates may infringe in practicing the
inventions claimed in the GenVec Patent Rights.
2.5 Retained Rights. It is understood and agreed that GenVec shall retain
---------------
the exclusive right (i) to make, have made, use, sell and otherwise
commercialize the Collaboration Products for all uses within the Field outside
the applicable Retained Territory; (ii) subject to Sections 2.4.3, 2.4.4, and
2.4.5 of the Collaboration Agreement to make, have made, use, sell and otherwise
commercialize the Collaboration Products for use outside the Field, both in and
outside the applicable Retained Territory; (iii) to make, have made, use and
sell Collaboration Products to Fuso in connection with the activities conducted
by GenVec pursuant to this Agreement, unless and until Fuso assumes manufacture
of the Collaboration Products pursuant to Article 6, and (iv) to practice any
method, process or procedure within, and otherwise develop, exploit and/or
commercialize the [*].
2.6 No Implied Licenses. Fuso acknowledges that the licenses granted by
-------------------
GenVec in Section 2.1 are limited to the Field and the applicable Retained
Territory. No rights or licenses with
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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respect to the GenVec Technology or the Fuso Technology or other intellectual
property owned by GenVec or Fuso are granted or shall be deemed granted
hereunder or in connection herewith, other than those rights expressly granted
in this Agreement or the Collaboration Agreement.
3. PAYMENTS
3.1 Royalties.
---------
3.1.1 Royalties on [*] In partial consideration of the rights
-------------
granted hereunder, Fuso shall pay running royalties to GenVec equal to [*]
[*] of Net Sales of Collaboration Products by Fuso and its Affiliates
or Sublicensees.
[*]
3.1.5 Third Party Royalties. Except as provided in Section 2.3.2 of
---------------------
the Collaboration Agreement, [*] shall be responsible for the payment of any
royalties, license fees and milestone and other payments due to third parties
under licenses or similar agreements [*] in the Territory. [*]
of any such royalty payments due third parties in any quarter against [*].
3.2 Initial Payments. Within thirty (30) days following the first
----------------
occurrence in [*] of [*] with respect to each Collaboration
Product, [*] shall pay to [*]
Fuso shall promptly notify GenVec upon the achievement of the foregoing
milestone with respect to each Collaboration Product.
4. PAYMENTS; BOOKS AND RECORDS
4.1 Royalty Reports and Payments. After the first commercial sale by Fuso
----------------------------
or its Affiliates or Sublicensees of a Collaboration Product for which royalties
are payable under Article 3,
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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Fuso shall make quarterly written reports to GenVec within thirty (30) days
after the end of each calendar quarter, stating in each such report, by country,
the number, description and aggregate Net Sales of such Collaboration Product
sold during the calendar quarter. Simultaneously with the delivery of each such
report, Fuso shall pay to GenVec the total royalties, if any, due to GenVec for
the period of such report. If no royalties are due, Fuso shall so report.
4.2 Payment Method; Late Payments. All amounts due GenVec hereunder shall
-----------------------------
be paid in U.S. dollars by wire transfer in immediately available funds to an
account designated by GenVec. Any payments or portions thereof due hereunder
which are not paid on the date such payments are due under this Agreement shall
bear interest at a rate equal to the lesser of prime rate as reported by the
Chase Manhattan Bank, New York, plus [*] per year, or the maximum
rate permitted by law, calculated on the number of days such payment is
delinquent, compounded monthly.
4.3 Currency Conversion. If any other currency conversion shall be
-------------------
required in connection with the calculation of royalties hereunder, such
conversion shall be made using the exchange rate for conversion of the foreign
currency into U.S. Dollars, quoted for current transactions for buying U.S.
dollars, as reported in The Wall Street Journal for the last business day of the
calendar quarter to which such payment pertains.
4.4 Records; Inspection. Fuso and its Affiliates shall keep (and cause
-------------------
its Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable under Article
3. Such books and records shall be kept reasonably accessible for at least
three (3) years following the end of the calendar quarter to which they pertain.
Such records will be open for inspection during such three (3) year period by a
representative or agent of GenVec for the purpose of verifying the royalty
statements. Such inspections may be made no more than once each calendar year,
at reasonable times mutually agreed by Fuso and GenVec. GenVec's representative
or agent will be obliged to execute a reasonable confidentiality agreement prior
to commencing any such inspection. GenVec shall bear the costs and expenses of
inspections conducted under this Section 4.4 unless a variation or error
producing an underpayment in royalties payable exceeding [*] of
the amount payable for any quarter is established in the course of any such
inspection, whereupon all costs relating to the inspection and any unpaid
amounts that are discovered will be paid by Fuso, together with interest on such
unpaid amounts at the rate specified in Section 4.2 above.
4.5 Withholding Taxes.
-----------------
4.5.1 Royalties. Any payments due GenVec by pursuant to Section 3.1
---------
above shall be made after deduction for any withholding taxes or similar
governmental charge ("Withholding Tax") due thereon. Fuso shall provide GenVec a
certificate evidencing payment of any such Withholding Taxes. Notwithstanding
the foregoing, if such payments by GenVec would reduce the royalty received by
GenVec on any Net Sales below [*] (after such withholding or other
governmental charge), then Fuso shall pay to GenVec any such additional amounts
as may be necessary to provide GenVec a royalty of no less than [*]
on such Net Sales (after
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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such withholding or other governmental charge). In such event, if GenVec
receives a tax credit from the U.S. Government for any such additional payments,
then GenVec shall promptly notify Fuso and reimburse Fuso for such amount.
GenVec agrees to use reasonable efforts to obtain any available tax credit.
4.5.2 Milestones. All payments required to be made to GenVec pursuant
----------
to Section 3.2 shall be made after deduction for any withholding taxes or
similar governmental charge required by applicable law. Fuso shall promptly
inform GenVec of the amount and basis of any such deduction, and provide GenVec
a certificate evidencing payment of any such Withholding Taxes.
4.6 Sales Taxes. Any sales taxes (such as consumption tax or value added
-----------
tax), use taxes, transfer taxes, duties or similar governmental charges required
to be paid in connection with the transfer to Fuso of any Collaboration Products
manufactured by GenVec hereunder shall be the sole responsibility of Fuso. In
the event that GenVec is required to pay any such amounts, Fuso shall promptly
remit payment to GenVec of such amounts.
5. COMMERCIALIZATION
5.1 Collaboration Product Development by Fuso. Except as expressly
-----------------------------------------
provided otherwise in this Agreement, Fuso shall be responsible for all costs of
conducting development of Collaboration Product(s) in the Territory in
accordance with the applicable Development Plan(s), including, without
limitation expenses incurred
[*]
In addition,
Fuso shall be responsible, at its sole expense, for all commercialization of
such Collaboration Product(s) in the Field in the Territory so long as Fuso
retains rights thereto under this Agreement. During the term of this Agreement,
Fuso shall keep GenVec fully informed of its activities subject to this
Agreement and, in addition, on or before January 31 of each year, Fuso shall
provide GenVec with a written report detailing such events and activities. When
a registration package requesting approval for commercial sale of any
Collaboration Product is first filed in any country within the Territory, and
when approval is received therefore, Fuso will immediately notify GenVec in
writing.
5.2 Due Diligence.
-------------
5.2.1 Option. Fuso shall have the option to add both or either of
------
[*] to the Territory by notice to GenVec identifying the pertinent
country(ies) and Collaboration Product. Such option must be exercised with
respect to a particular Collaboration Product no later than the
[*]
If Fuso fails to exercise such option with respect to a particular Collaboration
Product within the applicable period, or Fuso's rights terminate in [*] with
respect to a particular Collaboration Product prior to the date that Fuso
exercises its option for such Collaboration Product, then Fuso shall lose its
option with respect to such Collaboration Product in [*].
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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5.2.2 Reasonable Efforts. Fuso shall use all reasonable efforts to:
------------------
(i) obtain regulatory approvals to market Collaboration Product(s) in each
country the Territory, and (ii) after obtaining regulatory approvals for such
Collaboration Product(s), launch such Collaboration Product(s) in each country
in the Territory. Upon the launching of such Collaboration Product(s), Fuso
shall use reasonable efforts to promote and meet the market demand therefor in
the respective country(ies). In connection therewith, Fuso shall use efforts not
less than those efforts Fuso makes with respect to its own pharmaceutical
products of comparable commercial potential, stage of development and patent
protection.
5.2.3 Lack of Diligence. In the event that Fuso fails to use
-----------------
reasonable efforts to exercise its diligence obligations under Section 5.2.2
with respect to a particular Collaboration Product as to a particular country of
the Territory, GenVec may terminate this Agreement with respect to such
Collaboration Product as to such country in accordance with Section 11.2. In
such event, GenVec shall thereafter have the exclusive rights to commercialize
such Collaboration Product in the said country, alone or with third parties.
5.2.4 Licenses. In the event that any of Fuso's rights terminate with
--------
respect to a particular Collaboration Product pursuant to Section 5.2.3 above,
at GenVec's request, Fuso shall grant to GenVec an exclusive (even as to Fuso),
fully-paid, royalty-free license, with the right to sublicense, under Fuso's
interest in any Joint Technology and Fuso Technology necessary or useful to
make, have made, import, use, offer for sale, sell and otherwise commercialize
such Collaboration Products in the Field in the said country.
5.3 Regulatory Filings.
------------------
5.3.1 Use of Documents. Each party and its Affiliates, and, subject
----------------
to such party's obligations to third parties, its sublicensees, shall have the
right free of charge to refer to, access, cross reference, and use documents
relating to each Collaboration Product filed by a party or its Affiliates, its
licensees or Sublicensees with regulatory entities with respect to activities
conducted in connection with the Research Program, [*]
and other supporting information, and any written communications [*]
[*].
5.3.2 Outside the Research Program. Subject to its obligations to
----------------------------
third parties, each party and its Affiliates and sublicensees, may in exchange
for reasonable consideration to be agreed by the parties, obtain the right to
refer to, access, cross reference, and use documents filed with regulatory
entities relating to each Collaboration Product, filed by a party or its
Affiliates or Sublicensees in agreed jurisdictions, with respect to activities
conducted outside the Research Program, [*].
5.4 No Other [*] Except as specifically provided in
------------------------------
this Agreement or otherwise agreed in writing, neither Fuso nor its Affiliates
or Sublicensees shall commercialize any [*] studied in the Research Program,
except as a Collaboration Product in
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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accordance with this Agreement, which is identical or substantially similar to a
Product Configuration studied in the Research Program. As used herein,
"substantially similar" shall mean a
[*]
5.5 GenVec Commercialization.
------------------------
5.5.1 GenVec Responsibilities. Subject to Sections 2.3.1(b) and 2.4.2
-----------------------
of the Collaboration Agreement, GenVec shall be responsible, at its sole
expense, for conducting all development of any Collaboration Product outside the
Field, both in and outside the Territory (including, without limitation,
clinical trials), and all commercialization of such Collaboration Product
outside the Field, both in and outside the Territory.
5.5.2 Competing Products. During the term of this Agreement, GenVec
------------------
agrees that it shall not directly or indirectly develop or commercialize in the
Retained Territory any [*] identical or substantially similar
to a Product Configuration studied by the parties in the Research Program which
GenVec knows or reasonably should know would compete with or be a substitute for
a Collaboration Product being commercialized by Fuso or its Affiliates or
Sublicensees. As used herein, "substantially similar" shall mean a product
which [*].
5.6 Limits on Competing Products. During the term of this Agreement, Fuso
----------------------------
shall not directly or indirectly develop, manufacture, market, sell, or
otherwise distribute any [*] or components within the Field in the applicable
Retained Territory, which could compete with the Collaboration Products or
appoint or license any third party to develop, market, sell, or otherwise
distribute any such [*] or components which could compete with Collaboration
Products during the term of this Agreement. Fuso further agrees that, during the
term of this Agreement, it shall not, directly or indirectly, develop,
manufacture or commercialize in and/or outside the Territory (except as a
Collaboration Product pursuant to this Agreement) any [*] identical or
substantially similar to a Product Configuration studied by the parties in the
Research Program. As used herein, "substantially similar" shall mean [*].
5.7 Acknowledgment. It is understood and agreed that the provisions of
--------------
Sections 2.4.3, 2.4.4 and 2.4.5 of the Collaboration Agreement establish certain
limits on the development and commercialization activities of the parties with
respect to certain Product Configurations and Gene Therapy products.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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[*]
7. INTELLECTUAL PROPERTY
7.1 Ownership of Inventions.
-----------------------
7.1.1 Research Program Technology. Subject to Section 7.1.2 below,
---------------------------
(i) title to all inventions and intellectual property made solely by GenVec
employees or its agents (including researchers at [*]) in connection with the
Research Program without inventive contribution by Fuso employees or its agents
shall be owned by GenVec; (ii) title to all inventions and intellectual
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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property made solely by Fuso employees or its agents (including researchers at
[*] in connection with the Research Program without inventive
contribution by GenVec employees or its agents shall be owned by Fuso; and (iii)
title to all inventions and intellectual property made jointly by employees or
the agents of Fuso and GenVec in connection with the Research Program, shall be
jointly owned by GenVec and Fuso.
7.1.2 [*] . Notwithstanding Section 7.1.1 above,
-----------------------
Title to all inventions and intellectual property which relates to [*]
made solely by GenVec employees or its agents (including researchers at [*]) or
jointly by employees or the agents of Fuso and GenVec in connection with the
Research Program (in each case, [*]) shall be owned by
GenVec. Fuso hereby assigns to GenVec all its right, title and interest it may
otherwise hold in or to such [*] and any patent applications
or patents relating thereto. Fuso shall, at the request of GenVec, execute, and
deliver or cause to be delivered, all such consents, documents or further
instruments of assignment or transfer, and take or cause to be taken all such
actions GenVec reasonably deems necessary or desirable in order for GenVec to
obtain the full benefits of the assignment herein.
7.1.3 Inventorship. Inventorship and rights of ownership of
------------
inventions and other intellectual property rights conceived and/or reduced to
practice in connection with the Research Program shall be determined in
accordance with the patent and other intellectual property laws of the United
States or Maryland, as applicable, as long as the laws of the Territory permit
application of such laws. Subject to the licenses granted in Article 2, except
as expressly provided in this Agreement, it is understood that neither party
shall have any obligation to account to the other for profits, or to obtain any
approval of the other party to license or exploit a joint invention for
applications outside of the Field by reason of joint ownership of any such
intellectual property.
7.2 Patent Prosecution
------------------
7.2.1 Sole Inventions. Fuso or GenVec, as the case may be, shall, be
---------------
responsible for preparing, filing, prosecuting and maintaining of the patent
applications and patents, solely owned by it, worldwide in such countries as it
deems appropriate, and conducting any interferences, reexaminations, reissues,
oppositions or requests for patent term extensions relating to the Fuso
Technology or GenVec Technology (respectively), using counsel of its choice, at
its expense; provided, such expenses may be included in the Research Program
funding described in Section 2.3 of the Collaboration Agreement.
7.2.2 Joint Patent Rights.
-------------------
(a) The parties will cooperate to file, prosecute and maintain
patent applications covering the Joint Invention(s) in the United States,
European Union (in Europe through a European Patent Convention application) and
Japan (collectively, the "Core Countries") and other countries agreed by the
parties. The parties shall agree which party shall be responsible for conducting
such activities with respect to a particular Joint Invention. The party
conducting such activities shall keep the other party fully informed as to the
status of such patent matters, including,
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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without limitation, by providing the other party the opportunity, at the other
party's expense, to review and comment on any documents relating to the Joint
Invention which will be filed in any patent office at least thirty (30) days
before such filing, and promptly providing the other party copies of any
documents relating to Joint Invention which the party conducting such activities
receives from such patent offices, including notice of all interferences,
reissues, reexaminations, oppositions or requests for patent term extensions.
The parties will share equally all expenses and fees associated with the filing,
prosecution, issuance and maintenance of any patent application and resulting
patent for a Joint Invention in the Core Countries and other agreed countries
and such amounts shall be included within the Research Program funding described
in Section 2.3 of the Collaboration Agreement.
(b) In the event that either party wishes to seek patent
protection with respect to any Joint Invention outside the Core Countries, it
shall notify the other party hereto. If both parties wish to seek patent
protection with respect to such Joint Invention in such country or countries,
activities shall be subject to Section 7.2.2(a) above. If only one party wishes
to seek patent protection with respect to such Joint Invention in such country
or countries, it may file, prosecute and maintain patent applications and
patents with respect thereto, at its own expense. In any such case, the party
declining to participate in such activities shall not grant any third party a
license under its interest in the applicable Joint Invention in the applicable
country or countries without the prior written consent of the other party.
7.3 Enforcement.
-----------
7.3.1 Solely Owned Technology. Subject to 7.3.2 below, in the event
-----------------------
that any GenVec Technology or Fuso Technology (in this Section, both referred to
as "Technology") necessary for manufacture, use and sale of a Collaboration
Product is infringed or misappropriated by a third party in any country in the
Territory, or is subject to a declaratory judgment action arising from such
infringement in such country, Fuso or GenVec, as the case may be, shall promptly
notify the other party hereto. The party which owns or controls such Technology
(the "Owner") shall have the initial right (but not the obligation) to enforce
such Technology, or defend any declaratory judgment action with respect thereto,
at its expense. In the event that the Owner fails to initiate a suit to enforce
such Technology against a commercially significant infringement in the Field by
a third party in any jurisdiction in the Territory within [*] of a request by
the other party (the "Licensee") to do so, Licensee may, subject to the Owner's
agreements with third parties, initiate such suit in the name of the Owner of
such Technology against such infringement, at the expense of such Licensee. The
party involved in any such claim, suit or proceeding, shall keep the other party
hereto reasonably informed of the progress of any such claim, suit or
proceeding. Any recovery by such party received as a result of any such claim,
suit or proceeding shall be used first to reimburse such party for all expenses
(including attorneys and professional fees) incurred in connection with such
claim, suit or proceeding and if the party initiating the suit was the owner of
the subject Technology, all of the remainder shall be retained by such owner,
and if the party initiating the suit is the Licensee, [*] of the remainder shall
be paid to the owner of the subject Technology and [*] retained by the Licensee.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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7.3.2 Jointly Owned Technology. Notwithstanding 7.3.1 above, in the
------------------------
event that any technology that is jointly owned by GenVec and Fuso under Section
7.1 of this Agreement is infringed or misappropriated by a third party, Fuso and
GenVec shall discuss whether, and, if so, how, to enforce such Joint Technology
or defend such Joint Technology in an infringement action, declaratory judgment
or other proceeding. In the event only one party wishes to participate in such
proceeding, it shall have the right to proceed alone, at its expense, and may
retain any recovery; provided, at the request and expense of the participating
party, the other party agrees to cooperate and join in any proceedings in the
event that a third party asserts that the co-owner of such Joint Invention is
necessary or indispensable to such proceedings.
7.4 Infringement Claims. If the manufacture, sale or use of any
-------------------
Collaboration Product in the Territory pursuant to this Agreement results in any
claim, suit or proceeding alleging patent infringement against GenVec or Fuso,
such party shall promptly notify the other party hereto. If Fuso is not named
as a party in such a claim, suit or proceeding, Fuso may, at its own expense and
through counsel of its own choice, seek leave to intervene in such claim, suit
or proceeding. GenVec agrees not to oppose such intervention. If Fuso, and not
GenVec, is named as a party to such claim, suit or proceeding, Fuso shall have
the right to control the defense and settlement of such claim, suit or
proceeding, at its own expense, using counsel of its own choice, however GenVec,
at its own expense and through counsel of its own choice, may seek to intervene
if the claim, suit or proceeding relates to the commercialization of the
Collaboration Product in the Field, and in such event, Fuso agrees not to oppose
such intervention. If Fuso is named as a party and GenVec shall, at any time,
tender its defense to Fuso, then Fuso shall defend GenVec in such claim, suit or
proceeding, at Fuso's own expense and through counsel of its own choice, and
Fuso shall control the defense and settlement of any such claim, suit or
proceeding; provided, Fuso shall not enter into any agreement which makes any
admission regarding (i) wrongdoing on the part GenVec, or (ii) the invalidity,
unenforceability or absence of infringement of any GenVec Patent Rights or
patent claiming a Joint Invention, without the prior written consent of GenVec,
which consent shall not be unreasonably withheld. The parties shall cooperate
with each other in connection with any such claim, suit or proceeding and shall
keep each other reasonably informed of all material developments in connection
with any such claim, suit or proceeding.
8. REPRESENTATIONS AND WARRANTIES
8.1 Warranties.
----------
8.1.1 GenVec. GenVec warrants and represents to Fuso that (i) it has
------
the full right and authority to enter into this Agreement and grant the rights
and licenses granted herein; (ii) as of the Effective Date, there are no
existing or threatened actions, suits or claims pending against it with respect
to the GenVec Technology or its right to enter into and perform its obligations
under this Agreement and (iii) it has not previously granted, and will not grant
during the term of this Agreement, any right, license or interest in or to
GenVec Technology or Joint Technology, or any portion thereof, which are in
conflict with the rights or licenses granted under this Agreement.
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8.1.2 Fuso. Fuso warrants and represents to GenVec that (i) it has
----
the full right and authority to enter into this Agreement, and (ii) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to Fuso Technology or Joint Technology, or any
portion thereof, which are in conflict with the rights or licenses granted under
this Agreement.
8.2 Effect of Representations and Warranties. It is understood that if
----------------------------------------
the representations and warranties under this Article 8 are not true and
accurate and GenVec or Fuso incurs liabilities, costs or other expenses as a
result of such falsity, GenVec or Fuso, as the case may be, shall indemnify,
defend and hold the other party harmless from and against any such liabilities,
costs or expenses incurred, provided that the indemnifying party receives prompt
notice of any claim against GenVec or Fuso, as the case maybe, resulting from or
related to such falsity, the cooperation of the indemnified party, as requested
in connection with any such claim, and the sole right to control the defense or
settlement thereof.
8.3 Disclaimer of Warranties. GENVEC AND FUSO EXPRESSLY DISCLAIM ANY
------------------------
WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT
TO THE CONFIDENTIAL INFORMATION, OR FUSO TECHNOLOGY OR GENVEC TECHNOLOGY,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT,
OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF FUSO TECHNOLOGY OR GENVEC
TECHNOLOGY, PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES.
9. CONFIDENTIALITY
9.1 Confidential Information. Except as expressly provided herein, the
------------------------
parties agree that, for the term of this Agreement and for [*]
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose except for the
purposes contemplated by this Agreement any Confidential Information furnished
to it by the disclosing party hereto pursuant to this Agreement, except that to
the extent that it can be established by the receiving party by competent proof
that such Confidential Information:
(a) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving party in breach of this Agreement;
(d) was independently developed by the receiving party without
reference to any information or materials disclosed by the disclosing party; or
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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(e) was subsequently disclosed to the receiving party by a person
other than a party without breach of any legal obligation to the disclosing
party.
9.2 Permitted Disclosures. Each party hereto may disclose the other's
---------------------
Confidential Information to the extent such disclosure is reasonably necessary
in connection with the conduct of the Research Program activities to be
conducted at [*] or [*] (or any other academic institution approved by the
Steering Committee), in filing or prosecuting patent applications, prosecuting
or defending litigation, complying with applicable governmental regulations or
otherwise submitting information to tax or other governmental authorities, [*]
or making a permitted sublicense or otherwise exercising its rights hereunder,
provided that if a party is required to make any such disclosure of another
party's confidential information, other than pursuant to a confidentiality
agreement, it will give reasonable advance notice to the latter party of such
disclosure and, save to the extent inappropriate in the case of patent
applications, will use its best efforts to secure confidential treatment of such
information prior to its disclosure (whether through protective orders or
otherwise).
9.3 Non-Disclosure. Each of the parties hereto agrees not to disclose to
--------------
any third party the financial terms of this Agreement without the prior written
consent of each other party hereto, except to advisors, investors and others on
a need to know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Without limitation
upon any provision of this Agreement, each of the parties hereto shall be
responsible for the observance by its employees of the foregoing confidentiality
obligations. Notwithstanding the foregoing, the parties shall agree upon a press
release to announce the execution of this Agreement, together with a
corresponding Q&A outline for use in responding to inquiries about the
Agreement; thereafter, GenVec and Fuso may each disclose to third parties the
information contained in such press release and Q&A without the need for further
approval by the other.
10. INDEMNIFICATION
10.1 Indemnification of Fuso. GenVec shall indemnify Fuso and its
-----------------------
Affiliates, and their respective directors, officers, employees, agents and
counsel, and the successors and assigns of the foregoing (the "Fuso
Indemnitees"), harmless from and against any and all liabilities, damages,
losses, costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration) resulting from a claim,
suit or proceeding brought by a third party against a Fuso Indemnitee, arising
from or occurring as a result of; (i) GenVec's conduct of the Research Program,
(ii) the development, manufacture, marketing and/or commercialization of any
Collaboration Product by GenVec or its Affiliates or licensees (including
without limitation product liability claims), or (iii) the failure of
Collaboration Products manufactured by GenVec to meet the relevant
specifications, except, in each case, to the extent caused by the negligence or
willful misconduct of Fuso.
10.2 Indemnification of GenVec. Fuso shall indemnify GenVec and its
-------------------------
Affiliates and their respective directors, officers, employees, agents and
counsel and the successors and assigns of the
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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foregoing (the "GenVec Indemnitees"), harmless from and against any and all
liabilities, damages, losses, costs or expenses (including reasonable attorneys'
and professional fees and other expenses of litigation and/or arbitration)
resulting from a claim, suit or proceeding brought by a third party against a
GenVec Indemnitee, arising from or occurring as a result of; (i) Fuso's conduct
of the Research Program, or (ii) the development, manufacture, marketing and/or
commercialization of any Collaboration Product by Fuso or its Affiliates or
Sublicensees (including without limitation, product liability claims), except,
in each case, to the extent caused by the negligence or willful misconduct of
GenVec.
10.3 Procedure. A party (the "Indemnitee") that intends to claim
---------
indemnification under this Article 10 shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its Affiliates, Sublicensees or their
directors, officers, employees, agents or counsel intend to claim such
indemnification, and the Indemnitor shall have the right to participate in, and,
to the extent the Indemnitor so desires, to assume the defense thereof with
counsel mutually satisfactory to the parties. The indemnity agreement in this
Article 10 shall not apply to amounts paid in settlement of any loss, claim,
damage, liability or action if such settlement is made without the consent of
the Indemnitor, which consent shall not be withheld unreasonably. The failure
to deliver written notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article 10. At the Indemnitor's request, the Indemnitee under this Article
10, and its employees and agents, shall cooperate fully with the Indemnitor and
its legal representatives in the investigation and defense of any action, claim
or liability covered by this indemnification and provide full information with
respect thereto.
11. TERM AND TERMINATION
11.1 Term. This Agreement shall be effective as of the Effective Date
----
and, unless otherwise terminated earlier pursuant to the other provisions of
this Article 11, shall continue in full force and effect on a Collaboration
Product-by-Collaboration Product and country-by-country basis until the date
Fuso and its Affiliates and Sublicensees has no remaining royalty obligations in
such country. Following the expiration of royalty obligations in any country,
Fuso shall have a non-exclusive, non-transferable, fully paid license under the
GenVec Know-How solely to commercialize the Collaboration Product in the Field
in such country.
11.2 Termination for Cause. Either party may terminate this Agreement in
---------------------
the event the other party has materially breached or defaulted in the
performance of any of its obligations hereunder, and such default has continued
for [*] after written notice thereof was provided to the breaching party by the
nonbreaching party. Any termination shall become effective at the end of such
[*] period unless the breaching party has cured any such breach or default prior
to the expiration of the [*] period. Notwithstanding the above, in the case of a
failure to pay any amount due hereunder the period for cure of any such default
following notice thereof shall be [*] and, unless payment is made within such
period, the termination shall become effective at the end of such period.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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11.3 Termination for Insolvency. If voluntary or involuntary proceedings
--------------------------
by or against a party are instituted in bankruptcy under any insolvency law, or
a receiver or custodian is appointed for such party, or proceedings are
instituted by or against such party for corporate reorganization or the
dissolution of such party, which proceedings, if involuntary, shall not have
been dismissed within [*] after the date of filing, or if such party makes an
assignment for the benefit of creditors, or substantially all of the assets of
such party are seized or attached and not released within [*] thereafter, the
other party may immediately terminate this Agreement effective upon notice of
such termination.
11.4 Permissive Termination. After the second anniversary of the
----------------------
Effective Date, Fuso may, at its sole discretion, terminate this Agreement at
any time with [*] prior notice.
11.5 Termination Relating to Sales of Competing Collaboration Products.
-----------------------------------------------------------------
GenVec may, at its sole discretion, terminate this Agreement with [*]
notice in the event of any breach by Fuso of Section 5.6.
11.6 Effect of Breach or Termination.
-------------------------------
11.6.1 Accrued Obligations. Termination of this Agreement for any
-------------------
reason shall not release any party hereto from any liability which, at the time
of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination, nor preclude either party
from pursuing any rights and remedies it may have hereunder or at law or in
equity which accrued or are based upon any event occurring prior to such
termination.
11.6.2 Return of Materials. Upon any termination of this Agreement,
-------------------
Fuso and GenVec shall promptly return to the other party all materials and
Confidential Information (except as provided in 11.1 above) received from the
other party (except one copy of which may be retained by legal counsel for
archival purposes).
11.6.3 Stock on Hand. In the event this Agreement is terminated for
-------------
any reason, Fuso and its Affiliates and Sublicensees shall have the right to
sell or otherwise dispose of the stock of any Collaboration Products then on
hand subject to Articles 3 and 4 and the other applicable terms of this
Agreement.
11.6.4 Licenses.
--------
(a) The licenses granted Fuso herein shall terminate in the
event of a termination pursuant to Section 11.2 or 11.3, or any termination of
the Research Program by Fuso prior to the second anniversary of the Effective
Date. In the event of a termination of the Research Program by Fuso after the
second anniversary of the Effective Date, the licenses granted Fuso shall remain
in effect, subject to the terms and conditions herein, with respect to all
Collaboration Products designated by the Steering Committee prior to the
effective date of such termination.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
(b) The licenses granted to GenVec in Section 2.3 shall
terminate only in the event of a termination by Fuso pursuant to Section 11.2 or
11.3.
(c) If more than one Collaboration Product is being
commercially developed or exploited by Fuso or its Affiliates and Sublicensees
hereunder and GenVec terminates this Agreement pursuant to Section 11.2 due to a
breach relating only to a single Collaboration Product, or pursuant to Section
11.5 due to a particular competing product, then GenVec shall be entitled to
terminate this Agreement only with respect to the applicable Collaboration
Product.
11.7 Survival. Sections 2.4, 2.5, 2.6, 5.2.3, 5.3, 5.4, 6.4, 7.1, 7.2.2,
--------
7.3.2, 11.6 and 11.7 and Articles 4, 8, 9, 10, 12 and 13 shall survive the
expiration or termination of this Agreement for any reason.
12. DISPUTE RESOLUTION
12.1 Mediation. If a dispute arises out of or relates to this Agreement,
---------
or the breach thereof, and if said dispute cannot be settled through
negotiation, the parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration.
12.2 Arbitration. Any dispute under this Agreement (except any dispute
-----------
relating to the validity or enforceability of any patent) which is not settled
by mutual consent shall be finally settled by binding arbitration. Such
arbitration shall be conducted in accordance with the International Arbitration
Rules of the Asia/Pacific Center by three (3) arbitrators appointed in
accordance with said rules and held in San Francisco, California. At least one
of the arbitrators shall be an independent expert in pharmaceutical product
development (including clinical development and regulatory affairs). The
arbitrators shall determine what discovery will be permitted, consistent with
the goal of limiting the cost and time which the parties must expend for
discovery; provided the arbitrators shall permit such discovery as they deem
necessary to permit an equitable resolution of the dispute. Any written
evidence originally in a language other than English shall be submitted in
English translation accompanied by the original or a true copy thereof. The
costs of the arbitration including administrative and arbitrators' fees, shall
be shared equally by the parties and each party shall bear its own costs and
attorneys' and witness' fees incurred in connection with the arbitration. A
disputed performance or suspended performances pending the resolution of the
arbitration must be completed within thirty (30) days following the final
decision of the arbitrators or such other reasonable period as the arbitrators
determine in a written opinion. Any arbitration subject to this Article shall
be completed within one (1) year from the filing of notice of a request for such
arbitration. No punitive damages may be granted by the arbitrators. The
arbitration proceedings and the decision shall not be made public without the
joint consent of the parties and each party shall maintain the confidentiality
of such proceedings and decision unless otherwise permitted by the other party.
The parties agree that the decision shall be the sole, exclusive and binding
remedy between them regarding any and all disputes, controversies, claims and
counterclaims presented to the arbitrators. Any award may be entered in a court
of competent jurisdiction for a judicial recognition of the decision and an
order of enforcement.
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13. MISCELLANEOUS
13.1 Governing Law. This Agreement and any dispute arising from the
-------------
performance or breach hereof shall be governed by and construed in accordance
with the laws of the State of California, without reference to conflicts of laws
principles.
13.2 Waiver. Neither party may waive or release any of its rights or
------
interests in this Agreement except in writing. The failure of either party to
assert a right hereunder or to insist upon compliance with any term or condition
of this Agreement shall not constitute a waiver of that right or excuse a
similar subsequent failure to perform any such term or condition.
[*]
13.4 Notices. Any notices, requests and other communications hereunder
-------
shall be in writing and shall be personally delivered or sent by international
express delivery service, registered or certified mail, return receipt
requested, postage prepaid, in each case to the respective address specified
below, or such other address as may be specified in writing to the other parties
hereto:
FUSO: Fuso Pharmaceutical Industries, Ltd
3-11, 2-Chome, Morinomiya, Joto-ku
Osaka 536, Japan
Attn: President
With a copy to: Director, Research and Development Center
GENVEC: GenVec, Inc.
12111 Parklawn Drive
Rockville, Maryland 20852
Attn: President
With a copy to: Vice President, Corporate Development
13.5 Performance Warranty. Fuso and GenVec hereby respectively warrant
--------------------
and guarantee the performance of any and all rights and obligations of this
Agreement by their Affiliate(s), Sublicensees, and sublicensees.
13.6 Force Majeure. Neither party shall be liable to the other for
-------------
failure or delay in the performance of any of its obligations under this
Agreement for the time and to the extent such failure
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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or delay is caused by earthquake, riot, civil commotion, war, hostilities
between nations, governmental law, order or regulation, embargo, action by the
government or any agency thereof, act of God, storm, fire, accident, labor
dispute or strike, sabotage, explosion or other similar or different
contingencies, in each case, beyond the reasonable control of the respective
party. The party affected by Force Majeure shall provide the other party with
full particulars thereof as soon as it becomes aware of the same (including its
best estimate of the likely extent and duration of the interference with its
activities), and will use its best endeavors to overcome the difficulties
created thereby and to resume performance of its obligations as soon as
practicable. If the performance of any obligation under this Agreement is
delayed owing to a force majeure for any continuous period of more than six (6)
months, the parties hereto shall consult with respect to an equitable solution
including the possible termination of this Agreement.
13.7 Independent Contractors. Nothing contained in this Agreement is
-----------------------
intended implicitly, or is to be construed, to constitute Fuso or GenVec as
partners in the legal sense. No party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of any other party or to bind any other party to any contract, agreement or
undertaking with any third party.
13.8 Advice of Counsel. GenVec and Fuso have each consulted counsel of
-----------------
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.
13.9 Other Obligations. Except as expressly provided in this Agreement or
-----------------
as separately agreed upon in writing between GenVec and Fuso, each party shall
bear its own costs incurred in connection with the implementation of the
obligations under this Agreement.
13.10 Independent Research. Except as expressly provided for herein or in
--------------------
the Collaboration Agreement, each party acknowledges and agrees that Fuso and
GenVec shall have the right to engage in their own research and development
activities outside the Research Program. Neither party shall, by virtue of this
Agreement, have any right, title or interest in or to such independent
activities or to the income or profits derived therefrom.
13.11 Severability. In the event that any provisions of this Agreement
------------
are determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without said provision. The parties shall in good faith negotiate a
substitute clause for any provision declared invalid or unenforceable, which
shall most nearly approximate the intent of the parties in entering this
Agreement; provided, if the parties are unable to agree on such a substitute
clause and the deletion of the provision held invalid or unenforceable would
produce material adverse financial consequences for one party, such party shall
have the right to terminate the Agreement with [*] days
notice.
13.12 Patent Marking. Fuso agrees to mark and have its Affiliates and
--------------
Sublicensees mark all Collaboration Products they sell or distribute pursuant to
this Agreement in accordance with the applicable statute or regulations in the
country or countries of manufacture and sale thereof.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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13.13 Further Assurances. At any time or from time to time on and after
------------------
the date of this Agreement, either party shall at the request of the other party
(i) deliver to the requesting party such records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
assignment, transfer or license, and (iii) take or cause to be taken all such
actions, as the requesting party may reasonably deem necessary or desirable in
order for the requesting party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.
13.14 Trademarks. Fuso and its Affiliates shall have the right to market
----------
the Collaboration Product under their own labels and trademark(s). All
Collaboration Product packages shall carry the notice "Licensed from GenVec,
Inc." or a similar slogan, in a typeface and size agreed by the parties.
13.15 Foreign Corrupt Practices Act. In conformity with the United States
-----------------------------
Foreign Corrupt Practices Act, Fuso and its employees and agents shall not
directly or indirectly make any offer, payment, promise to pay, or authorize
payment, or offer a gift, promise to give, or authorize the giving of anything
of value for the purpose of influencing an act or decision of an official of any
government within the Territory or the United States Government (including a
decision not to act) or inducing such official to use his influence to affect
any such governmental act or decision in order to obtain, retain, or direct any
such business.
13.16 Export Laws. Notwithstanding anything to the contrary contained
-----------
herein, all obligations of GenVec and Fuso are subject to prior compliance with
United States export regulations and such other United States and Japanese laws
and regulations as may be applicable, and to obtaining all necessary approvals
required by the applicable agencies of the government of the United States or
Japan. GenVec and Fuso, respectively, shall each use its best efforts to obtain
such approvals from its own government. Each party shall cooperate with the
other party and shall provide assistance to the other party as reasonably
necessary to obtain any required approvals.
13.17 Approvals. Each party shall be responsible, at its expense, for
---------
obtaining any approvals from its own government which may be required under
applicable law, and shall use its best efforts to obtain all necessary approvals
as soon as possible after the execution of this Agreement.
13.18 Entire Agreement. This Agreement together with the attached
----------------
Exhibit, and the Collaboration Agreement and the Stock Purchase Agreement
entered by the parties of even date herewith, constitute the entire agreement,
both written or oral, with respect to the subject matter hereof, and supersede
all prior or contemporaneous understandings or agreements, whether written or
oral, between Fuso and GenVec with respect to such subject matter.
13.19 Headings. The captions to the several Sections and Articles hereof
--------
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.
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13.20 Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed an original and which together shall constitute
one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the Effective Date.
FUSO PHARMACEUTICAL INDUSTRIES, LTD. GENVEC, INC.
By: ______________________________ By: ___________________________
Name: ____________________________ Name: _________________________
Title: ___________________________ Title: ________________________
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EXHIBIT 10.11
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement"), effective as of February 1, 1998
(the "Effective Date"), is entered by and between Asahi Chemical Industry Co.,
Ltd., with a principal place of business at 5-13, Shibaura 4-Chome, Minato-ku
Tokyo, 108, Japan ("Asahi"), and GenVec, Inc. with a principal place of business
at 12111 Parklawn Drive, Rockville, Maryland ("GenVec").
BACKGROUND
A. Asahi owns certain Patent Rights (as defined below) relating to tumor
necrosis factor alpha (TNF); and
B. GenVec desires to obtain a license under the Patent Rights, and Asahi
desires to grant such a license to GenVec, on the terms and conditions herein.
NOW, THEREFORE, Asahi and GenVec agree as follows:
1. DEFINITIONS
1.1 "Affiliate" means any corporation or other entity which is directly or
---------
indirectly controlling, controlled by or under the common control with GenVec.
For the purpose of this Agreement, "control" shall mean the direct or indirect
ownership of at least fifty percent (50%) of the outstanding shares or other
voting rights of the subject entity to elect directors, or if not meeting the
preceding, any entity owned or controlled by or owning or controlling at the
maximum control or ownership right permitted in the Territory.
1.2 "Confidential Information" shall mean (i) any proprietary or
------------------------
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder which
is identified as confidential or proprietary when disclosed and such disclosure
of confidential information is confirmed in writing within thirty (30) days by
the disclosing party.
1.3 "Control" means possession of the ability to grant the license
-------
provided for herein without violating the terms of any agreement or other
arrangement with a third party.
1.4 "Field" means all gene therapy (in vivo and ex vivo) applications.
----- -- ---- -- ----
1.5 "Licensed Product" means any product which is within the scope of an
----------------
issued Valid Claim or was within the scope of an issued Valid Claim.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
1.6 "Net Sales" means the gross revenues actually received by GenVec or
---------
its sublicensees from sales of Licensed Products, [*].
1.7 "Patent Rights" means (i) U.S. patent application Serial No. [*]
-------------
and U.S. Patent No. [*] (ii) all patent applications and patents which claim
improvements to the subject matter of (i) above; (iii) all divisions,
continuations, continuations-in-part, and substitutions of (i) and (ii) above;
and (iv) all U.S. patents issuing on any of the preceding applications,
including extensions, reissues, and re-examinations; in each case, which is
owned, in whole or part, or Controlled by Asahi.
1.8 "Phase I", "Phase II"and "Phase III" shall mean Phase I, Phase II, and
------- -------- ---------
Phase III clinical trials, respectively, in each case as prescribed by the U.S.
Food and Drug Administration.
1.9 "Regulatory Approval" shall mean approval by the U.S. Food and Drug
-------------------
Administration ("FDA") to market a Licensed Product.
1.10 "Territory" means the [*].
---------
1.11 "Valid Claim" means (i) a claim of an issued and unexpired U.S. patent
-----------
included within the Patent Rights which has not been held unenforceable or
invalid by a court or other governmental agency of competent jurisdiction in the
Territory, and which has not been disclaimed or admitted to be invalid or
unenforceable through reissue or otherwise, or (ii) a claim of a pending U.S.
patent application within the Patent Rights.
2. LICENSE; OPTION
2.1 Grant to GenVec. Asahi hereby grants to GenVec a [*] license under
---------------
the Patent Rights to make, have made, import, have imported, use, sell, have
sold, offer for sale and otherwise exploit the Licensed Products in the
Territory for use in the Field. [*]. In the event GenVec extends the license
granted herein to any of its Affiliates, GenVec shall immediately notify Asahi
of the name of such Affiliate. The provisions of this Agreement shall be binding
on such Affiliate, and GenVec shall guarantee the Affiliate's performance of the
obligations under this Agreement.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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2.3 Sublicenses; Right of Negotiation. At any particular time during the
---------------------------------
term of the [*] relating to [*] GenVec shall have the right to grant one
sublicense of the rights granted in Section 2.1 above, and if GenVec grants such
a sublicense, GenVec shall not itself practice its licensing rights so long as
such sublicense remains in effect. In the event the foregoing agreement between
Asahi and [*] expires or is terminated, GenVec shall have the unrestricted right
to grant sublicenses. In the event GenVec grants a sublicense of the rights in
Section 2.1 above, GenVec shall promptly notify Asahi of the name of such
sublicensee. In the event that any existing or potential sublicensee of GenVec
wishes to acquire a non-exclusive license with respect to intellectual property
owned or Controlled by Asahi relating to [*] (or fragments or derivatives
thereof) or the use thereof, Asahi agrees to negotiate in good faith with GenVec
the terms and conditions of such a license.
2.4 Exclusive Option. If GenVec has acquired any intellectual property
----------------
rights necessary to commercialize Licensed Products in [*], and GenVec retains
the legal right to grant to Asahi an option to develop and commercialize
Licensed Products in [*], then until the second anniversary of the Effective
Date, Asahi shall have an exclusive option to negotiate and enter into a written
agreement with GenVec with regard to a collaborative license arrangement for the
development and commercialization of Licensed Products in [*]. The terms and
conditions of such agreement shall be negotiated in good faith by the parties
commencing at such time as Asahi provides GenVec notice that Asahi wishes to
exercise its option.
3. CONSIDERATION
3.1 License Fee. In partial consideration for the license granted herein,
-----------
GenVec shall pay to Asahi a license fee of [*] within [*] of the Effective Date.
Such fee shall not be due if GenVec provides notice of its intent to terminate
the Agreement within such [*] period.
3.2 Milestone Payments. Unless the Agreement is terminated earlier,
------------------
within [*] following the first achievement by GenVec or a sublicensee of the
following milestones with respect to the first Licensed Product in the
Territory, GenVec shall pay Asahi one-time milestone payments, as follows:
Event Payment
------------------------------------------ ---------
[*]
The payment under Section 3.1 above and the payments in this Section 3.2 shall
be nonrefundable.
3.3 Royalties.
---------
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
3.3.1 During Patent Term. In consideration of the license granted
------------------
herein, GenVec shall pay to Asahi a royalty of [*] of Net Sales of Licensed
Products which, but for the license granted herein would infringe an issued and
unexpired Valid Claim.
3.3.2 After Patent Term. In the event that all issued Valid
-----------------
Claims covering a particular Licensed Product have expired, but royalties are
still due Asahi pursuant to Section 3.7, then the royalty due with regard to
such Licensed Product shall be [*] of Net Sales of such Licensed Product.
3.4 Third Party Royalties. GenVec and its sublicensee shall be
---------------------
responsible for any payments due to third parties under licenses or similar
agreements entered by GenVec or its sublicensee relating to the manufacture, use
or sale of Licensed Products in the Territory. GenVec may offset any such
payments made by GenVec or its sublicensee to third parties against royalties
due Asahi pursuant to Section 3.3 above; provided Asahi shall have the right to
receive not less than [*] of the Net Sales of Licensed Products sold by GenVec
or its sublicensee, except as provided in Section 3.3.2.
3.5 Combination Products. In the event that a Licensed Product is sold in
--------------------
combination as a single product with another active ingredient, component or
other product whose manufacture, sale and use are not covered by a claim within
the Patent Rights for which the combination product is sold, Net Sales from such
sales for purposes of calculating the amounts due under Sections 3.3 above shall
be as reasonably allocated by GenVec between such Licensed Product and such
active ingredient, component or other product, based upon their relative
importance and proprietary protection.
3.6 One Royalty. No more than one royalty payment shall be due with
-----------
respect to a sale of a particular Licensed Product. No multiple royalties shall
be payable because any Licensed Product, or its manufacture, sale or use is
covered by more than one Valid Claim. No royalty shall be payable under Section
3.3 above with respect to sales of Licensed Products among GenVec and its
sublicensee, nor shall a royalty be payable under this Article 3 with respect to
Licensed Products distributed for use in research and/or development, in
clinical trials or as promotional samples.
3.7 Royalty Term. Royalties due under this Article 3 shall be payable on
------------
a Licensed Product-by-Licensed Product basis until the later of (i) the
expiration of the last-to-expire issued Valid Claim covering such Licensed
Product, or (ii) [*] of the Effective Date.
4. PAYMENTS; REPORTS AND RECORDS
4.1 Payments; Currency. GenVec agrees to pay all royalties due to Asahi
------------------
within [*] after the last day of each half-calendar year in which they accrue.
All payments due hereunder shall be paid in United States dollars.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
4.2 Taxes. Any income or other tax that must be withheld on behalf of
-----
Asahi with respect to the royalties owed pursuant to this Agreement shall be
deducted by GenVec from the royalties prior to remittance. Within [*]
after the last day of each half-calendar year, GenVec shall furnish to Asahi
evidence of any such taxes withheld.
4.3 Royalty Reports. GenVec shall deliver to Asahi within [*] after the
---------------
end of each half-calendar year in which Licensed Products are sold a report
setting forth in reasonable detail the calculation of the royalties payable to
Asahi for such half-calendar year, including the Licensed Products sold, the Net
Sales thereof, and all amounts received from sublicensees for sales of Licensed
Products. Such reports shall be Confidential Information of GenVec subject to
Article 6 herein.
4.4 Books and Records. GenVec shall maintain accurate books and records
-----------------
which enable the calculation of royalties payable hereunder to be verified.
GenVec shall retain the books and records for each half-calendar year period for
[*] after the submission of the corresponding report under Section 4.3 hereof.
Upon [*] prior notice to GenVec, independent accountants selected by Asahi,
reasonably acceptable to GenVec, after entering into a confidentiality agreement
with GenVec, may have access to GenVec's books and records during GenVec's
normal business hours at mutually agreed times to conduct a review or audit once
per calendar year, for the sole purpose of verifying the accuracy of GenVec's
payments and compliance with this Agreement. The accounting firm shall report to
Asahi only whether there has been a royalty underpayment and, if so, the amount
thereof. Any such inspection or audit shall be at Asahi's expense, however, in
the event an inspection reveals underpayment of [*] or more in any audit period,
GenVec shall pay the costs of the inspection. GenVec shall promptly pay to Asahi
any underpayment identified in such an audit which amount is undisputed by
GenVec, with interest from the date such amount(s) were due at the prime rate
reported by the Chase Manhattan Bank, New York, New York.
5. DILIGENCE
GenVec agrees to use commercially reasonable diligent efforts to develop
and commercialize the Licensed Products and obtain such approvals as may be
necessary for the sale of the Licensed Products in the Territory. GenVec may
conduct such activities itself or through third parties.
6. CONFIDENTIALITY
6.1 Confidential Information. Except as expressly provided herein, the
------------------------
parties agree that, for the term of this Agreement and for [*] thereafter, the
receiving party shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose except for the purposes
contemplated by this Agreement any Confidential Information furnished to it by
the disclosing party hereto pursuant to this Agreement, except to the extent
that it can be established by the receiving party by competent proof that such
Confidential Information:
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
(i) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(ii) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;
(iii) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement;
(iv) was independently developed by the receiving party as
demonstrated by documented evidence prepared contemporaneously with such
independent development; or
(v) was subsequently lawfully disclosed to the receiving party by a
person other than a party hereto.
6.2 Permitted Use and Disclosures. Each party hereto may use or disclose
-----------------------------
information disclosed to it by the other party to the extent such use or
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable governmental
regulations or otherwise submitting information to tax or other governmental
authorities, conducting clinical trials, or making a permitted sublicense or
otherwise exercising its rights hereunder, provided that if a party is required
to make any such disclosure of another party's Confidential Information, other
than pursuant to a confidentiality agreement, it will give reasonable advance
notice to the latter party of such disclosure and, save to the extent
inappropriate in the case of patent applications, will use its best efforts to
secure confidential treatment of such information prior to its disclosure
(whether through protective orders or otherwise). Notwithstanding this Section
6.2 and Section 4.3 herein, Asahi may, subject to a confidentiality agreement
containing provisions at least as restrictive as those herein, disclose to the
Beckman Research Institute of the City of Hope, as is reasonably necessary, the
financial terms herein, the payments received and the royalty reports made under
this Agreement.
6.3 Confidential Terms. The parties agree to make a mutually agreed press
------------------
release regarding this Agreement promptly following the Effective Date. Except
as expressly provided herein, each party agrees not to disclose any terms of
this Agreement to any third party without the consent of the other party;
provided, disclosures may be made as required by securities or other applicable
laws, or to actual or prospective investors or corporate partners, or to a
party's accountants, attorneys and other professional advisors.
7. REPRESENTATIONS AND WARRANTIES
7.1 Asahi. Asahi represents and warrants that: (i) it is a corporation
-----
duly organized validly existing and in good standing under the laws of Japan;
and (ii) the execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action on the
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<PAGE>
part of Asahi; (iii) it is the sole and exclusive owner or exclusive licensee
of all right, title and interest in the Patent Rights; (iv) it has the right
to grant the rights and licenses granted herein, and the Patent Rights are
free and clear of any lien, encumbrance or security interest; (v) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in and to the Patent Rights, or any portion
thereof, inconsistent with the license granted to GenVec herein; and (vi)
there are no threatened or pending actions, lawsuits, claims or arbitration
proceedings in any way relating to the Patent Rights.
7.2 GenVec. GenVec represents and warrants that: (i) it is a corporation
------
duly organized validly existing and in good standing under the laws of the State
of Delaware; and (ii) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of
GenVec.
7.3 Effect of Representations and Warranties. It is understood that if
----------------------------------------
the representations and warranties made by a party under this Article 7 are not
true and accurate, and the other party incurs damages, liabilities, costs or
other expenses as a result, the party making such representations and warranties
shall indemnify and hold the other party harmless from and against any such
damages, liabilities, costs or other expenses incurred as a result.
8. PROSECUTION AND ENFORCEMENT
[*]
8.2 Patent Term Extensions. To the extent permitted by applicable law,
-----------------------
GenVec and Asahi shall jointly apply for patent term extensions of patent(s)
within the Patent Rights. If joint applications are not permitted, GenVec shall
have the right to file and diligently seek and obtain such extensions for GenVec
or its sublicensee, in GenVec's name. Asahi agrees to provide reasonable
assistance to facilitate GenVec's efforts to obtain any such extension.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
[*]
9. DISPUTE RESOLUTION
[*]
10. INDEMNIFICATION
10.1 Indemnity. GenVec shall indemnify, defend and hold harmless Asahi
---------
and its directors, officers and employees (each an "Indemnitee") from and
against any and all liabilities, damages, losses, costs or expenses (including
reasonable attorneys' and professional fees and other expenses of litigation
and/or arbitration) (a "Liability") resulting from a claim, suit or proceeding
brought by a third party against an Indemnitee, arising from or occurring as a
result of activities performed by GenVec or its sublicensees in connection
with the development, manufacture or sale of any Licensed Product, except to
the extent caused by the negligence or willful misconduct of Asahi.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
10.2 Procedure. In the event that any Indemnitee intends to claim
---------
indemnification under this Article 10 it shall promptly notify GenVec in writing
of such alleged Liability. GenVec shall have the sole right to control the
defense and settlement thereof. The Indemnitees shall cooperate with the
indemnifying party and its legal representatives in the investigation of any
action, claim or liability covered by this Article 10. The Indemnitee shall
not, except at its own cost, voluntarily make any payment or incur any expense
with respect to any claim or suit without the prior written consent of GenVec,
which GenVec shall not be required to give.
11. TERM AND TERMINATION
11.1 Term. The term of this Agreement shall commence on the Effective
----
Date, and unless earlier terminated as provided in this Article 11, shall
continue in full force and effect on a Licensed Product-by-Licensed Product
basis until there are no remaining royalty payment obligations with respect
thereto.
11.2 Termination for Cause. If either party materially breaches this
---------------------
Agreement, the other party may elect to give the breaching party written notice
describing the alleged breach. If the breaching party has not cured such breach
within [*] after receipt of such notice, the notifying party will be entitled,
in addition to any other rights it may have under this Agreement, to terminate
this Agreement effective immediately; provided, however, if either party
receives notification from the other of a material breach and if the party
alleged to be in default notifies the other party in writing within [*] of
receipt of such default notice that it disputes the asserted default, the matter
will be submitted to arbitration as provided in Article 9 of this Agreement. In
such event, the nonbreaching party shall not have the right to terminate this
Agreement until it has been determined in such arbitration proceeding that the
other party materially breached this Agreement, and the breaching party fails to
cure such breach within [*] after the conclusion of such arbitration proceeding.
11.3 Termination for Insolvency. Either party may terminate this
--------------------------
Agreement if the other becomes the subject of a voluntary or involuntary
petition in bankruptcy or any proceeding relating to insolvency, receivership,
liquidation, or composition or the benefit of creditors, if that petition or
proceeding is not dismissed with prejudice within [*] after filing.
11.4 Permissive Termination. GenVec may terminate this Agreement with
----------------------
respect to any patent application or patent within the Patent Rights with [*]
written notice to Asahi. GenVec shall have no right to terminate this Agreement
pursuant to this Section 11.4 after the expiration of the Patent Rights.
11.5 Effect of Termination.
---------------------
(a) Accrued Rights and Obligations. Termination of this Agreement
------------------------------
for any reason shall not release any party hereto from any liability which, at
the time of such termination, has already accrued to the other party or which
is attributable to a period prior to such termination,
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
nor preclude either party from pursuing any rights and remedies it may have
hereunder or at law or in equity which accrued or are based upon any event
occurring prior to such termination.
(b) Return of Confidential Information. Upon any termination of this
----------------------------------
Agreement, each party shall promptly return to the other party all Confidential
Information received from the other party (except one copy of which may be
retained for archival purposes).
(c) Stock on Hand. In the event this Agreement is terminated for any
-------------
reason, GenVec and its sublicensee shall have the right to sell or otherwise
dispose of the stock of any Licensed Product then on hand, subject to Articles 3
and 4.
(d) Sublicense. In the event of any termination of this Agreement,
----------
any sublicense granted by GenVec shall remain in force and effect and shall be
assigned by GenVec to Asahi; provided, the financial obligations of any such
sublicensee shall be limited to the amounts GenVec is obligated to pay to Asahi
for the activities of such sublicensee under this Agreement.
11.6 Survival. Sections 11.5 and 11.6 and Articles 4, 6, 7, 9, 10 and 12
--------
of this Agreement shall survive termination of this Agreement for any reason.
12. MISCELLANEOUS
12.1 Governing Law. This Agreement, and any proceeding subject to Article
-------------
10, shall be governed by and construed in accordance with the laws of the State
of New York, without reference to principles of conflicts of laws.
12.2 Independent Contractors. The relationship of the parties hereto is
-----------------------
that of independent contractors. The parties hereto are not deemed to be
agents, partners or joint venturers of the other for any purpose as a result of
this Agreement or the transactions contemplated thereby.
[*]
12.4 Right to Develop Independently. Nothing in this Agreement will
------------------------------
impair GenVec's right to independently acquire, license, develop for itself,
or have others develop for it, intellectual property and technology performing
similar functions as the Patent Rights or to market and distribute Licensed
Products or other products based on such other intellectual property and
technology.
12.5 Notices. Any required notices hereunder shall be given in writing by
-------
certified mail or international express delivery service (e.g., DHL) at the
address of each party below, or to such other
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
address as either party may substitute by written notice. Notice shall be
deemed served when delivered or, if delivery is not accomplished by reason or
some fault of the addressee, when tendered.
If to Asahi: Asahi Chemical Industry Co., Ltd.
5-13 Shibaura 4-Chome
Minato-ku Tokyo, 108, Japan
Attention: Dr. Tetsu Saito, General Manager
Licensing and Business Development Group
If to GenVec: GenVec, Inc.
12111 Parklawn Drive
Rockville, Maryland 20852
Attention: President
with a copy to: Vice President, Corporate Development
12.6 Force Majeure. Neither party shall lose any rights hereunder or be
-------------
liable to the other party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or
any other reason where failure to perform is beyond the reasonable control and
not caused by the negligence, intentional conduct or misconduct of the
nonperforming party and such party has exerted all reasonable efforts to avoid
or remedy such force majeure; provided, however, that in no event shall a party
be required to settle any labor dispute or disturbance.
12.7 Advice of Counsel. GenVec and Asahi have each consulted counsel of
-----------------
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.
12.8 Approvals. Each party shall be responsible, at its expense, for
---------
obtaining any approvals from its own government which may be required under
applicable law, and shall use its best efforts to obtain all necessary approvals
as soon as possible after the execution of this Agreement.
12.9 Compliance with Laws. Each party shall furnish to the other party
--------------------
any information requested or required by that party during the term of this
Agreement or any extensions hereof to enable that party to comply with the
requirements of any U.S. or foreign, state and/or government agency.
12.10 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
-----------------------
FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF
THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
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<PAGE>
12.11 Further Assurances. At any time or from time to time on and after
------------------
the date of this Agreement, Asahi shall at the request of GenVec (i) deliver
to GenVec such records, data or other documents consistent with the provisions
of this Agreement, (ii) execute, and deliver or cause to be delivered, all
such consents, documents or further instruments of transfer or license, and
(iii) take or cause to be taken all such actions, as GenVec may reasonably
deem necessary or desirable in order for GenVec to obtain the full benefits of
this Agreement and the transactions contemplated hereby.
12.12 Severability; Waiver. In the event that any provisions of this
--------------------
Agreement are determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without said provision. The parties shall in good faith negotiate a
substitute clause for any provision declared invalid or unenforceable, which
shall most nearly approximate the intent of the parties in entering this
Agreement. The failure of a party to enforce any provision of the Agreement
shall not be construed to be a waiver of the right of such party to thereafter
enforce that provision or any other provision or right.
12.13 Entire Agreement; Modification. This Agreement sets forth the
------------------------------
entire agreement and understanding of the parties with respect to the subject
matter hereof, and supersedes all prior discussions, agreements and writings
in relating thereto. This Agreement may not be altered, amended or modified in
any way except by a writing signed by both parties.
12.14 Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed an original and which together shall constitute
one instrument.
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<PAGE>
IN WITNESS WHEREOF, Asahi and GenVec have executed this Agreement by their
respective duly authorized representatives.
ASAHI CHEMICAL INDUSTRY GENVEC, INC.
CO., LTD.
By: By:
---------------------------------- ----------------------------------
Katsuaki Tuzuki
Managing Director & General Manager Print Name:
of Health Care Business --------------------------
Administration Title:
-------------------------------
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<PAGE>
EXHIBIT 10.12
THIS SPONSORED RESEARCH AGREEMENT ("Agreement" or "Sponsored
Research Agreement") dated as of April 1, 1998 (the "Effective Date") is entered
into by and between GENVEC, INC., a Delaware corporation ("Sponsor"), and
CORNELL UNIVERSITY, a not-for-profit educational institution having corporate
powers under the laws of the State of New York ("University"), for its Medical
College ("Medical College").
WITNESSETH:
-----------
WHEREAS, the Sponsor and the University have previously entered
into that certain Sponsored Research Agreement effective as of May 18, 1993 (the
"Prior Sponsored Research Agreement"), pursuant to which Sponsor supported
preclinical research and clinical research at the Medical College in connection
with Gene Therapy (as defined in Appendix 1 hereto), which relationship the
parties wish to extend;
WHEREAS, the Gene Therapy research project that is to be conducted
at the Medical College with the support of the Sponsor is to be jointly
supervised by Ronald G. Crystal, M.D. ("Dr. Crystal"), a Professor of Medicine
at the Medical College and a paid consultant and equity holder of the Sponsor
and Chairman of the Sponsor's Scientific Advisory Board, and by the Medical
College's Chairman of the Department of Medicine (currently Ralph L. Nachman,
M.D. ("Dr. Nachman")), all as permitted by and in accordance with applicable
Laws and University Policies (as defined in Appendix 1 hereto);
WHEREAS, the Sponsor has entered into an Amended and Restated
Exclusive License Agreement in the form attached as Exhibit A hereto ("License
Agreement") with the Cornell Research Foundation, Inc. ("Foundation"), a wholly
owned subsidiary of the University;
WHEREAS, the Gene Therapy discoveries and inventions made during
the course of the Sponsored Research (as defined in Appendix 1 hereto), as
contemplated by this Agreement, are of mutual interest and benefit to the
University and to the Sponsor, will further instructional and research
objectives of the University in a manner consistent with its status as a not-
for-profit tax-exempt educational institution, and may constitute benefits for
both the Sponsor and the University (including, without limitation, the Medical
College) through inventions, improvements, and discoveries;
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto agree to the following:
1. DEFINITIONS
Capitalized terms used in this Agreement and set forth in Appendix 1
hereto shall have the meanings set forth in such Appendix 1.
2. SCOPE AND PERFORMANCE OF WORK
The University shall commence the performance of the Sponsored Research
on the Effective Date, and, concurrently with compliance by Sponsor with all
terms (including payment terms) of this
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Agreement, agrees to use reasonable efforts to perform the Sponsored Research
in accordance with the terms and conditions of this Agreement.
3. PRINCIPAL INVESTIGATORS
3.1 SUPERVISION OF THE SPONSORED RESEARCH
As described in the Crystal Appointment Letter, Dr. Crystal and
the Chairman shall jointly supervise the Sponsored Research. Initial (including
"Phase I", and/or "Phase I/II", if approved by the Medical College) human
feasibility trials with respect to the Sponsored Research may take place at the
University (including the Medical College), at affiliated hospitals, clinics, or
other institutions affiliated with the Medical College, under the direction of
the Principal Investigators. Any Phase II and Phase III trials will take place
entirely under the supervision of independent investigators who are not and have
not been associated with the Sponsored Research. The parties hereto acknowledge
and agree that the Crystal Appointment Letter has been approved by the Medical
College, the University, The New York Hospital, and all applicable internal
review boards of such bodies, including, without limitation, those charged with
responsibility for administration of the University's conflict of interest
policies, as of the date of this Agreement, subject, however, to any changes in
such approvals and policies as the University or such other entities or boards
may determine to be necessary or advisable.
3.2 CHANGE IN PRINCIPAL INVESTIGATORS
In the event that Dr. Crystal dies, becomes disabled such that he
cannot continue his employment at the Medical College, terminates his employment
at the Medical College, or his employment at the Medical College is otherwise
terminated, either party to this Agreement shall have the option to terminate
this Agreement and the Sponsored Research in the manner provided in Section 8.
If Dr. Nachman dies, becomes disabled such that he cannot continue his
employment at the Medical College, terminates his employment at the Medical
College, or his employment at the Medical College is otherwise terminated, or
otherwise is unable or unwilling to continue to serve as co-Principal
Investigator with respect to the Sponsored Research, the successor to
Dr. Nachman as Chairman shall serve as co-Principal Investigator with
Dr. Crystal, unless the University shall have designated another member of its
faculty reasonably acceptable to Sponsor and to Dr. Crystal to serve as the co-
Principal Investigator with Dr. Crystal; provided, however, that if such
Chairman or other faculty member has any consulting or other commercial
relationship with a competitor of Sponsor in the gene therapy field, the
University, upon notice of objection from Sponsor, shall designate another
member of its faculty, reasonably acceptable to Sponsor and Dr. Crystal, without
such relationship, to serve as co-Principal Investigator.
4. PERIOD OF PERFORMANCE
The period of performance under this Agreement will terminate on
April 1, 2002, unless earlier terminated pursuant to this Agreement or extended
by written agreement of the parties.
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5. PAYMENTS
5.1 SPONSOR PAYMENTS
The Sponsor agrees to make payments to the University (on behalf of
the Medical College) for certain costs of the Sponsored Research in accordance
with the payment schedule attached as Exhibit B hereto ("Sponsor Payments"),
subject to and in accordance with the terms of this Agreement. Sponsor Payments
shall be used over the term of this Agreement [*], unless the parties agree
otherwise pursuant to Section 5.2. All checks (or electronic funds transfers)
shall be made payable to Cornell University Medical College and sent to the
address specified in Section 19.6. Within ninety (90) days after termination of
this Agreement, the University shall submit a final financial report setting
forth costs incurred. The report shall be accompanied by a check in the amount,
if any, of the excess of Sponsor Payments received by the University over costs
actually incurred by or on behalf of the University in connection with the
Sponsored Research.
5.2 ADDITIONAL PAYMENTS
It is agreed to and understood by the parties that the aggregate
amount of the Sponsor Payments is an estimate of the cost of the Sponsored
Research, but that the Sponsor shall not be liable for any payments or costs in
excess of the Sponsor Payments unless the Sponsor shall have previously agreed
in writing to provide additional funds. Funding for work to be performed during
a period beyond that set forth in Section 4, or for work in addition to the
Sponsored Research, shall be agreed to by the Sponsor and the University in
writing prior to the initiation of any such work.
5.3 UNIVERSITY BOOKS AND RECORDS
The University shall maintain records and books of account
relating to this Agreement in accordance with its normal course of business,
University Policies, and prevailing University accounting practices, and shall
make such records and books available to Sponsor upon reasonable notice during
normal business hours, but not more frequently than once every four (4) months.
The University shall maintain scientific records that will
properly reflect all work done, and data and results achieved in the performance
of the Sponsored Research (including all data in the form required under any
applicable governmental regulations) in a manner sufficient to establish the
dates of first conception and reduction to practice of any inventions.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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5.4 SPONSOR PAYMENTS
Any funds paid to the University pursuant to the Prior Sponsored
Research Agreement which were not expended as of the Effective Date hereof shall
be used to support the Sponsored Research subject to this Agreement. Such funds
shall be additional to the payments due pursuant to Section 5.1, but otherwise
shall be treated as Sponsor Payments for all purposes of this Agreement.
5.5 OTHER FUNDS
The University shall not use funds from any commercial third party
to support any aspect of the Sponsored Research without the prior written
consent of Sponsor.
6. INVENTIONS AND PATENTS
The Medical College shall disclose all Sponsored Research Intellectual
Property Rights to the Sponsor as promptly as practicable upon receipt of such
disclosure, but in no event later than [*] after the inventor discloses it in
writing to the Medical College personnel responsible for patent matters. The
Principal Investigators shall ensure that all such Sponsored Research
Intellectual Property Rights are promptly disclosed to the Medical College in
writing. The disclosure to the Sponsor shall be in the form of a written report
and shall identify the inventor(s) and this Agreement as being that under which
such invention was made. Such report shall be sufficiently complete in technical
detail to convey a clear understanding, to the extent known at the time of the
disclosure, of the nature, purpose, operation, and the physical, chemical,
biological, or electrical characteristic of the invention. To afford the parties
a reasonable opportunity to preserve their intellectual property rights, without
the parties' written consent neither the Medical College nor the Sponsor shall
disclose such Sponsored Research Intellectual Property Rights to third parties
for at least [*] after the date of such disclosure to the Sponsor pursuant to
this Section 6; provided that during such [*] day period and thereafter the
Sponsor may disclose such Sponsored Research Intellectual Property Rights to a
corporate partner of Sponsor which is entitled to a sublicense of all or part of
the Sponsored Research Intellectual Property Rights, if such corporate partner
and Sponsor have a written agreement of confidentiality consistent with the
provisions hereof. Any disclosures made pursuant to this Section 6 shall also
comply with Section 10 hereof with respect to any proposed publication, sale, or
public use of the invention and shall disclose whether a manuscript describing
the invention has been prepared and is proposed to be submitted for publication
or presentation. Title to reported inventions will be held in accordance with
Section 16.1. Within [*] of receipt of the invention report, the Sponsor may
notify the University, in writing, that it elects to license such reported
invention to the extent permitted by, and in accordance with the terms of, the
License Agreement. Notwithstanding this Section 6 or any other provision of this
Agreement, however, except to the extent the same are included within Sponsored
Research Intellectual Property Rights, the parties agree that this Agreement
does not authorize or compel the disclosure to the Sponsor of information
regarding research designs, methods, proposals, findings, or similar information
or data of investigators (or other University employees) not employed in Dr.
Crystal's laboratory and under the joint supervision of Dr. Crystal and the
Chairman (even though the Sponsor's funds may have been used to provide
ancillary noninventive services or equipment to such inventor or other
employee).
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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7. PROPRIETARY INFORMATION
The Medical College's acceptance and use of any proprietary information
or proprietary biological materials that may be supplied by the Sponsor in the
course of this research project shall be subject to the following:
(i) The Sponsor shall mark or designate in writing the information or
biological materials as being proprietary to the Sponsor or, where
appropriate, to a sublicensee of Sponsor.
(ii) The Medical College retains the right to refuse to accept any such
information or biological materials that it does not consider to be essential
to the completion of the Sponsored Research or that it believes to be
improperly designated, for any reason.
(iii) Where the Medical College does accept such information, it agrees
to use reasonable efforts not to publish or otherwise reveal the information
to others outside the Medical College without the permission of the Sponsor,
unless the information has already been published or disclosed, or the
information has already been independently developed, in each case by third
parties or is or are required to be disclosed or delivered by order of a court
of law or regulatory agency.
(iv) Where the Medical College does accept such biological materials,
their use shall be subject to the terms of the Material Transfer Agreement
entered by Sponsor and the Medical College effective December 19, 1996 (the
"Material Transfer Agreement"), a copy of which is attached hereto as Exhibit
C.
8. TERMINATION
8.1 TERMINATION EVENTS
This Agreement may be terminated (prior to the expiration of its
term pursuant to Section 4) at any time by one party, upon written notice to the
other party, upon the occurrence of any of the following events:
(i) either party may terminate the Agreement if Dr. Crystal dies,
becomes disabled such that he cannot continue his employment at the Medical
College, terminates his employment at the Medical College, or his employment
at the Medical College is otherwise terminated;
(ii) either party may terminate the Agreement if, in the reasonable
judgment of the terminating party, termination is necessitated by reason of a
change in Laws; provided, however, that the Sponsor shall not use as a ground
of termination such a change which could be cured by a revision of Dr.
Crystal's relationship with the Sponsor;
(iii) a party may terminate the Agreement if it has a reasonable
basis to believe that the other party has engaged in unlawful, unethical, or
seriously inappropriate conduct such that continued performance of the
Agreement would affront legitimate interests of the terminating party; or
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(iv) a party may terminate the Agreement if the other party has
committed a material breach of the terms of this Agreement or the License
Agreement and has failed to remedy such breach within [*] in relation to a
payment-related breach, and [*] in relation to other breaches, following written
notice thereof. For purposes of this Section 8, a failure by the Sponsor to make
any payment required pursuant to Section 5 shall be deemed a material breach.
(v) In the event that a party intends to terminate the Agreement
under Section 8.1(ii), (iii) or (iv), the party shall give written notice to
that effect to the other party, which notice shall effect forthwith suspension
of future performance of the Agreement. The party so notified may initiate
arbitration under Section 19.5, by filing a request for arbitration with the
American Arbitration Association, not later than [*] thereafter, and termination
shall occur if (a) arbitration is not so initiated, or (b) the arbitrator finds
that termination was reasonable.
(vi) Sponsor may provide notice of termination any time for any
reason after [*] and in any such case, such termination will be effective [*]
thereafter.
8.2 TERMINATION CONSEQUENCES
In the event of early termination of this Agreement by the Sponsor
pursuant to Section 8.1, or by the University pursuant to Section 8.1(ii),
(iii), or (iv), the Sponsor shall remit to the University funds in payment of
(a) all internal and external costs and non-cancelable obligations, including
future costs and obligations, incurred as of the date of termination by the
University incident to the Sponsored Research (including, without limitation,
rent, personnel costs, facilities costs, and other costs) until such time as the
University, exercising its best efforts, shall eliminate such costs (or utilize
such personnel and facilities in other endeavors), and (b) any other amounts
that have accrued under this Agreement as of the date of such termination. With
respect to all payments by the Sponsor required by this Section 8.2, in no event
shall the liability of the Sponsor for Sponsor Payments in connection with the
Sponsored Research exceed [*] or such other amount as the parties hereto
have agreed upon pursuant to Section 5. Any and all Sponsored Research
Intellectual Property Rights conceived or reduced to practice or otherwise
developed prior to the effective date of such termination shall remain subject
to the terms of the License Agreement, which shall remain in effect until and
unless terminated under its terms.
9. PUBLICITY
The parties acknowledge their mutual intention to announce major
scientific discoveries to the public on a prompt and cooperative basis,
consistent with the terms of this Section 9 and other provisions of this
Agreement. The parties agree that neither the University nor any employee
thereof shall in any way promote, or participate or be used or referred to in
connection with the promotion of the Sponsor or any of Sponsor's products,
securities, or marketing efforts, and that neither party shall use the
existence or terms of this Agreement, any results of the Sponsored Research,
or the name of the other party (or any employee or affiliate thereof) in any
public disclosure, advertising, news release, or other statement that is or
may become public or available to a third party, in each case except as and to
the extent (i) required by Laws (including Securities Laws), (ii) permitted by
Section 10, (iii) permitted by
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Section 6, or (iv) with the prior written consent of, and only to the extent
approved by, the other party (which consent shall, in the case of the
University, be signed by the Dean of the Medical College and by University
counsel). Notwithstanding the above, once a particular disclosure has been
approved, either party may make disclosures which do not differ materially
therefrom without any further consents of the other party; provided, however,
that the disclosing party shall give prior notice of subsequent disclosures
which, in addition to the information contained in the earlier disclosure,
contains information subject to this Agreement which has not been previously
disclosed; and provided, further, that after approval of a disclosure has been
given, the approving party may at any time with written notice to the other
party withdraw its approval of a particular disclosure prior to its release,
which withdrawal shall be effective immediately. With respect to the
requirements of Securities Laws, counsel to the underwriters or placement
agents of Sponsor's securities may advise Sponsor that Sponsor may be required
to disclose material terms of this Agreement and the License Agreement. In
such event, Sponsor shall so notify the University within a reasonable time
prior to such disclosure, and the University shall have the opportunity to
dissuade such counsel of the need for such disclosure. With respect to any
such prospective disclosure, Sponsor shall use its reasonable efforts, unless
the University otherwise consents, not to use the name of the University, and
to seek "Confidential Treatment" under applicable Securities and Exchange
Commission rules and procedures with respect to any terms of this Agreement
and the License Agreement for which the University wishes to obtain
confidential treatment. Laboratory personnel, including Dr. Crystal, will not
engage in solicitation of the sale of securities of Sponsor, but may, to the
extent that doing so does not, in the University's judgment, unreasonably
interfere with their work, participate in connection with the due diligence
investigations of potential investors and underwriters of securities of
Sponsor in describing the Gene Therapy research and may, to the same extent,
respond to questions from such persons.
10. PUBLICATIONS
10.1 RIGHT TO PUBLISH; PROCEDURES
The University shall have the right, subject to compliance with
the provisions of this Agreement, at its discretion to release information or to
publish any material resulting from the Sponsored Research, and the Sponsor
agrees that the Principal Investigators and other researchers engaged in the
Sponsored Research shall be permitted to present at national, regional and other
professional meetings and symposia, and to publish in journals, theses or
dissertations, or other materials of their own choosing, the progress and
results of the Sponsored Research. The University agrees to furnish the Sponsor
with a copy of any proposed written publication at least [*] in advance of the
submission of such proposed publication or other written description of research
results to a journal, editor or other third party, in order for the Sponsor to
have an opportunity to begin to seek appropriate legal protection for the
subject matter contained in the proposed publication or description. If due to a
valid business reason or a reasonable belief by the non-disclosing Party that a
disclosure relating to the Sponsored Research contains subject matter for which
a patent should be sought, then prior to the expiration of the [*] period, the
non-disclosing party shall so notify the disclosing party, who shall then delay
public disclosure of the information for an additional period of up [*] to
permit the preparation of filing of a patent application on the subject matter
to be disclosed or other action to be
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
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taken. The Sponsor shall cooperate with the University and the Foundation, at
their request, in the patenting process.
10.2 ACKNOWLEDGMENT OF THE SPONSOR
The Sponsor will be given full credit and acknowledgment for the
support provided to the University in any publication resulting from the
Sponsored Research, to the extent Sponsor consents to such credit or
acknowledgment, or such publication requires the same, or the University desires
to list Sponsor in any reports of University's sponsored research projects.
11. REPORTS AND CONFERENCES
11.1 PROGRESS AND FINAL REPORTS TO THE SPONSOR
The University shall furnish the Sponsor letter reports during the
term of this Agreement summarizing the work conducted with respect to the
Sponsored Research, no more frequently than once every four (4) months. A final
written report setting forth and detailing the accomplishments and significant
findings shall be submitted by the University within [*] of the termination of
this Agreement.
11.2 MEETINGS BETWEEN THE UNIVERSITY AND THE SPONSOR
During the term of this Agreement, representatives of the
University will meet with representatives of the Sponsor at times and places
mutually agreed upon to discuss the progress and results, as well as ongoing
plans, or changes therein, of the Sponsored Research to be performed hereunder.
The Sponsor shall reimburse the University for all reasonable out-of-pocket
expenses incurred by the University and University employees in connection with
any such meetings that are held at locations other than the Medical College.
12. CHANGES
Anything in this Agreement to the contrary notwithstanding, Sponsor and
the Medical College may at any time amend or extend the Sponsored Research by
mutual written agreement (which, in the case of the Medical College, shall be
signed by the Dean of the Medical College), and incorporate such amendment as
an attachment and exhibit to this Agreement. Such changes may include, but are
not limited to, (i) revising (including, without limitation, additions to or
deletions from) the work included in the Sponsored Research, (ii) revising the
period or schedule of performance under Section 4 or as set forth in Exhibit
B, or (iii) increasing or decreasing the Sponsor Payments. Upon any such
change, the parties shall immediately use their best efforts to take all
necessary steps to comply therewith.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
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13. SPONSOR MATERIALS
Upon the request of the Medical College, the Sponsor agrees to accept
the return of unused portions of any drugs, chemicals, and other materials
supplied by the Sponsor in connection with the Sponsored Research or
Biological Materials provided pursuant to the Material Transfer Agreement
("Sponsor Materials"), including the containers in which the Sponsor Materials
are shipped, provided that the Sponsor Materials and containers are properly
labeled. The Sponsor agrees to furnish the Medical College with sufficient
information regarding all such Sponsor Materials to permit reasonable
interpretation of the results obtained in the Sponsored Research and to
identify precautions needed to help protect the health and safety of personnel
using the Sponsor Materials. The Sponsor agrees to indemnify and defend the
University (including, without limitation, the Medical College), affiliated
hospitals, clinics, and other institutions affiliated with the Medical
College, and the officers, trustees, agents, and employees of each of them,
and hold them harmless from any and all injury, illness, death, property
damage, claim, lawsuit, judgment thereon, or cause of action that results
either in whole or in part from the use of the Sponsor Materials (each a
"Claim"), not arising from the indemnified party's gross negligence or willful
misconduct, if such use was pursuant to Sponsor's directions or was reasonable
under the circumstances. The University shall promptly notify Sponsor of any
such Claim for which the University intends to claim indemnification, and
cooperate fully with Sponsor and its attorneys in the investigation, conduct,
defense and settlement of any such Claim.
14. INDEMNIFICATION
The Sponsor agrees to indemnify and defend the University (including the
Medical College), and affiliated hospitals, clinics, or other institutions
affiliated with the Medical College, and the officers, trustees, agents, and
employees of each of them, and hold them harmless from any and all costs,
expenses, and damages, not arising from the indemnified party's gross
negligence or willful misconduct, arising out of any injury, illness, death,
property damage, claim, lawsuit, judgment thereon, or cause of action (each, a
"Claim") to the extent that these result either in whole or in part from
action or inaction on the part of, or on behalf of, the Sponsor in connection
with the conduct of the Sponsored Research. The University shall promptly
notify Sponsor of any such Claim for which the University intends to claim
indemnification, and cooperate fully with Sponsor and its attorneys in the
investigation, conduct, defense and settlement of any such Claim.
15. INSURANCE
Within [*] after the date of this Agreement, the Sponsor shall provide to
the University evidence that the Sponsor has liability insurance of at least
[*]. Such evidence shall be in the form of a certificate of insurance or, in the
case of self-insurance, a letter accompanying the Sponsor's audited financial
statements in which an authorized official of the Sponsor certifies that the
Sponsor has sufficient assets to cover potential costs and losses that might
arise in connection with the Sponsor's obligations hereunder.
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16. TITLE TO EQUIPMENT, RESEARCH DATA AND INTELLECTUAL PROPERTY RIGHTS
16.1 PROPERTY OF THE UNIVERSITY
Title to all (a) equipment, laboratory animals, and other
materials or property purchased or manufactured in the performance of the
Sponsored Research (collectively, "Research Equipment") funded under this
Agreement and research data (including, without limitation, data contained in
any publication made pursuant to Section 10 hereof and resulting from the
Sponsored Research) shall vest in the University and shall remain the property
of the University in a manner consistent with University Policies and customs
with respect thereto, and (b) any intellectual property first conceived or
discovered in the performance of the Sponsored Research shall vest in
accordance with the then-prevailing United States laws of inventorship. The
Sponsor shall have the right to receive and use, subject to the applicable
terms of the License Agreement, breeding pairs of animals and other biological
materials developed in connection with the Sponsored Research and copies of
any research data relating to the Sponsored Research on reasonable request and
notice, and upon reimbursement by the Sponsor of the University's reasonable
costs incurred in connection with copying and providing such research data,
animals and other biological materials to the Sponsor. Copyright to materials,
including computer software, first created during the performance of the
Sponsored Research work funded under this Agreement shall vest in accordance
with the University's copyright policy, and the Sponsor shall have no rights
thereto, except to the extent provided in the License Agreement.
16.2 GOVERNMENT RIGHTS
An agency of the U.S. Government may have certain rights in an
invention first conceived or discovered during the performance of the Sponsored
Research work funded under this Agreement. The University will use reasonable
efforts to perfect its ownership in any invention made with funds provided by
any government agency and to comply with applicable law in maintaining such
rights and to make available to the Sponsor any rights in such invention.
17. ACKNOWLEDGMENT AND UNDERTAKING RESPECTING DR. CRYSTAL
Sponsor hereby acknowledges that it has been informed of the terms and
conditions of the employment of Dr. Crystal at the Medical College, as set
forth in the Crystal Appointment Letter (including, without limitation,
paragraphs 1A-N and the other provisions of Appendix A thereto), and Sponsor
agrees that it will use reasonable care such that nothing requested by Sponsor
of Dr. Crystal will violate any of the duties or obligations of Dr. Crystal to
the University. Nothing in this Agreement or in the License Agreement, or in
any agreement, undertaking, or understanding to which the Sponsor is party,
shall impair the rights of the University or the Principal Investigators to
determine the nature of performance of Sponsored Research, or Dr. Crystal's
other research at the University, in a manner consistent with University
Policies. The University undertakes to notify Sponsor of any changes in the
terms and conditions of Dr. Crystal's employment material to Sponsor, in the
University's reasonable judgement.
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18. ENFORCEMENT OF UNIVERSITY RULES AND THIS AGREEMENT
The University shall use its best efforts to enforce observance by all
University personnel engaged in the Sponsored Research with respect to
University Policies. The Sponsor shall cooperate with University in complying
with University Policies and applicable Laws. The University shall use
reasonable efforts to enforce observance, by all University personnel engaged
in the Sponsored Research, of this Agreement.
19. OTHER PROVISIONS
[*]
19.2 NO CONFLICTS
The Sponsor represents and covenants that there are no
obligations, undertakings, representations, warranties, covenants, conditions,
rights, recitals or other statements by or applicable to the University,
Dr. Crystal, or the Sponsored Research (collectively, "Terms") contained in any
of its arrangements, understandings or agreements with Dr. Crystal
(collectively, the "Other Arrangements") that Conflict with any Terms of this
Agreement. For purposes of this Agreement, the word "Conflict" shall include,
without limitation, any case in which (1) performance of a Term in one agreement
would result in a breach or violation of any present or future agreement or
obligation, written or oral, in connection with a Term in another agreement, and
(2) a Term in one agreement could not be carried out as a legal and/or practical
matter consistently with a Term of another agreement absent an amendment to,
waiver of, or potential liability under, such other agreement. The Sponsor
covenants and agrees that it will not knowingly cause or permit any Conflict to
exist between a Term of this Agreement, on the one hand, and a Term of any Other
Agreement, on the other hand, and that, insofar as any Conflict exists at any
time, the Sponsor will seek to cause such Conflicting Term in the Other
Agreement to be waived, amended or rendered null and void, to the extent
necessary to remedy the Conflict.
19.3 NO AGENCY
Neither party is authorized or empowered to act as an agent for
the other for any purpose. Neither party shall, on behalf of the other, enter
into any contract, warranty, or representation as to any matter. Neither party
shall be bound by the acts or conduct of the other.
19.4 FORCE MAJEURE
Neither the University nor the Sponsor shall be liable for any
failure to perform as required by this Agreement, to the extent such failure to
perform is caused by any reason beyond the control of the University or the
Sponsor, as applicable, or by reason of any of the following occurrences, labor
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
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disturbances or labor disputes of any kind, accidents, failure of any
governmental approval required for full performance, civil disorders or
commotions, acts of aggression, floods, earthquakes, acts of God, energy or
other conservation measures, explosion, failure of utilities, mechanical
breakdowns, material shortages, disease or other such occurrences (collectively,
"Force Majeure Conditions"); provided, however, that nothing in this
Section 19.4 shall excuse any delay or failure on the part of the Sponsor to
make the Sponsor Payments on a timely basis pursuant to the terms of this
Agreement. In the event of any delayed or excused performance pursuant to this
Section 19.4, the party or parties whose performance was delayed or excused
shall use reasonable efforts to perform as promptly and fully as practicable,
and the parties shall take all other reasonable and cooperative steps to
effectuate the transactions contemplated by this Agreement. If one or more
Force Majeure Conditions cause the University to be unable to conduct Sponsored
Research for at least two consecutive weeks, the obligation of Sponsor to make
Sponsor Payments shall be diminished by [*] for each such week. In the event
that there are more than [*] such weeks, either party may elect to terminate the
Agreement under the provisions of Section 8.1(iv), as if such circumstance were
a material breach thereunder and as if the University were the terminating party
thereunder.
19.5 ARBITRATION
Any dispute arising out of or relating to this Agreement or any
breach of this Agreement, including, without limitation, any disagreement by the
terminated party with respect to termination of this Agreement pursuant to
Sections 8.1(ii), (iii) or (iv) shall be submitted to and determined in binding
arbitration, which shall be conducted in accordance with the then-current rules
and procedures of the American Arbitration Association, subject to the
provisions of this Section 19.5. The arbitration shall be conducted before and
by a single neutral arbitrator with relevant expertise selected by the parties.
If the parties have not selected an arbitrator within [*] after delivery to the
other party of one party's written demand for arbitration, the arbitrator shall
be selected by the American Arbitration Association pursuant to then-current
rules of that Association. The arbitrator shall have authority to fashion such
just, equitable and legal relief as he, in his sole discretion, may determine,
including, without limitation, specific performance, injunctive or other
equitable relief. Each party shall bear all its own expenses of arbitration and
shall equally share the costs (i.e., arbitrators fees and administrative
charges) of conducting the arbitration. All arbitration proceedings shall be
conducted in New York, New York. The parties shall abide by the terms of any
arbitration award as final and binding under the prevailing rules of said
Association, and judgment upon the award may be had in any court having
jurisdiction. The duty to arbitrate shall survive the cancellation or
termination of this Agreement.
19.6 NOTICES
All notices, demands, requests or other communications which may
be or are required to be given, served, or sent by the University or the Sponsor
pursuant to this Agreement shall be in writing and shall be hand delivered
(including delivery by courier), sent by recognized overnight courier service,
mailed by first-class, registered or certified mail, return receipt requested,
postage prepaid, or transmitted by telegram, telex or facsimile transmission,
addressed as follows:
[*] CERTAIN INFORMATION IN THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
(i) If to the University:
Senior Associate Dean for Research
and Sponsored Programs
Cornell University Medical College
Room A131
1300 York Avenue
New York, New York 10021
Telephone: (212) 746-6020
Facsimile: (212) 746-6938
With a copy (which shall not constitute notice) to:
Office of University Counsel
Cornell University Medical College
1300 York Avenue
New York, New York 10021
Telephone: (212) 746-0463
Facsimile: (212) 746-0495
(ii) If to the Sponsor:
President
GENVEC, INC.
12111 Parklawn Drive
Rockville, MD 20852
With a copy to: Vice President, Corporate Development
Telephone: (301) 816-0396
Facsimile: (301) 816-0085
Notwithstanding the foregoing, each party may designate by notice in writing a
new address or facsimile number to which any notice, demand, request, or
communication may thereafter be so given, served, or sent. Each notice, demand,
request, or communication which shall be delivered, sent, mailed, or transmitted
in the manner described above, shall be deemed sufficiently given, served, sent,
or received for all purposes at such time as it is delivered to the addressee
(with an affidavit of personal delivery, the return receipt, the delivery
receipt, or (with respect to a telex or facsimile) the answer back being deemed
conclusive but not exclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
-13-
<PAGE>
19.7 SURVIVAL
It is the express intention and agreement of the parties that all
covenants, agreements, statements, representations, warranties and indemnities
made in this Agreement shall survive the execution and delivery of this
Agreement.
19.8 WAIVER
Neither the waiver by either party of a breach of or a default
under any of the provisions of this Agreement, nor the failure of a party, on
one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right, remedy, or privilege hereunder shall thereafter be construed
as a waiver of any subsequent breach or default of a similar nature, or as a
waiver of any such provisions, rights, remedies, or privileges hereunder.
19.9 EXERCISE OF RIGHTS
No failure or delay on the part of a party in exercising any
right, power, or privilege hereunder and no course of dealing between the
parties shall operate as a waiver thereof; 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. The rights and remedies herein expressly provided are cumulative and
not exclusive of any other rights or remedies which a party would otherwise have
at law or in equity or otherwise.
19.10 BINDING EFFECT
Subject to the provisions hereof restricting assignment, this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and permitted assigns.
19.11 [*]
19.12 ENTIRE AGREEMENT
This Agreement and the License Agreement (including all exhibits
and appendices to each such agreement) and the Crystal Appointment Letter
contain the entire agreement between the parties with respect to the
arrangements contemplated hereby and thereby and supersede any and all prior
[*] CERTAIN INFORMATION IN THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
understandings or agreements between the parties with respect to such
arrangements; provided, the terms of the Material Transfer Agreement shall not
be amended or effected in any way by the execution of this Agreement or the
License Agreement. No amendments or changes to this Agreement shall be
effective unless made in writing and signed by the Dean of the Medical College
and authorized representatives of the Sponsor. All correspondence regarding
terms of this Agreement shall be sent as specified in Section 19.6.
19.13 PRONOUNS
All pronouns and any variations thereof shall be deemed to refer
to the masculine, feminine, neuter, singular, or plural, as the identity of the
person or entity may require.
19.14 HEADINGS
Article and Section headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction of scope of any of the provisions hereof.
19.15 GOVERNING LAW
This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and construed
in accordance with the laws of the State of New York (but not including the
choice of law rules thereof).
19.16 NONDISCRIMINATION
The University and the Sponsor shall not discriminate against any
employee or applicant for employment because of race, religion, national origin,
sex, age, or physical limitation.
19.17 EXECUTION IN COUNTERPARTS
This Agreement may be executed in as many fully executed
counterparts as may be convenient.
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<PAGE>
IN WITNESS WHEREOF, the parties and persons named below have
executed this Agreement, or caused this Agreement to be executed on their
behalf, as of the date first set forth above.
GENVEC, INC. CORNELL UNIVERSITY, FOR ITS MEDICAL
COLLEGE
- ------------------------------------ ------------------------------------
By: Paul Fischer, Ph.D. By:
President
Acknowledged and agreed as to roles
as Principal INVESTIGATORS:
- ------------------------------------
Ronald G. Crystal, M.D.
Chairman of the Department of Medicine of the Medical College
- ------------------------------------
By: Ralph L. Nachman, M.D.
Exhibit A: Amended and Restated Exclusive License Agreement is
------------------------------------------------
attached as Exhibit 10.13 to this Amendment No. 2.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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<PAGE>
EXHIBIT 10.13
AMENDED AND RESTATED EXCLUSIVE LICENSE AGREEMENT
------------------------------------------------
THIS AGREEMENT (the "Restated Agreement"), effective as of the 1st day of
April, 1993, (the "Effective Date") by and between the CORNELL RESEARCH
FOUNDATION, INC., having offices at Cornell Business & Technology Park, 20
Thornwood Drive, Suite 105, Ithaca, New York 14850 (hereinafter referred to as
"FOUNDATION") and GENVEC, INC., having offices at 12111 Parklawn Drive,
Rockville, Maryland 20852 (hereinafter referred to as "LICENSEE").
W I T N E S S E T H T H A T:
- - - - - - - - - - - - - -
WHEREAS, FOUNDATION is a wholly owned subsidiary corporation of Cornell
University and holds the ownership interests of patents issued on inventions
made by Cornell University's staff and administers licenses in a manner
consistent with the patent policy of Cornell University;
WHEREAS, FOUNDATION represents that it is assignee of the patents and/or
patent applications included within the Sponsored Research Intellectual Property
(as defined below) and any patents issuing thereon and has the right to grant
licenses under said patents and/or patent applications and patents issuing
thereon;
WHEREAS, LICENSEE and FOUNDATION previously entered into that certain
Sponsored Research Agreement effective as of May 18, 1993 (the "Prior Crystal
Sponsored Research Agreement"), pursuant to which LICENSEE agreed to fund
certain research conducted under the supervision of Dr. Crystal at the Cornell
University Medical College ("CUMC").
WHEREAS, LICENSEE and FOUNDATION previously entered into that certain
Sponsored Research Agreement effective as of July 10, 1995 (the "Prior Falck-
Pedersen Sponsored Research Agreement"), pursuant to which LICENSEE agreed to
fund certain research conducted under the supervision of Dr. Falck-Pedersen at
the Cornell University Medical College.
WHEREAS, LICENSEE and FOUNDATION intend to supersede the Prior Crystal
Sponsored Research Agreement with a further Sponsored Research Agreement
pursuant to which LICENSEE expects to fund certain research conducted under the
supervision of Dr. Crystal at the Cornell University Medical College, and
LICENSEE and FOUNDATION may enter into other agreements pursuant to which
LICENSEE may support the conduct of research at Cornell University Medical
College and its affiliated clinical entities.
WHEREAS, FOUNDATION has previously granted to LICENSEE an exclusive license
under (i) FOUNDATION's rights included in the Sponsored Research Intellectual
Property (as defined in the Prior Crystal Sponsored Research Agreement)
including the Designated Inventions, Biological Material and Technical
Information and related intellectual property rights subject to that certain
License Agreement entered April 1, 1993, and (ii) under FOUNDATION's rights in
the
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
<PAGE>
Subject Inventions (as defined in the Prior Falck-Pedersen Sponsored Research
Agreement) including the Designated Inventions, Biological Material and
Technical Information and related intellectual property rights subject to that
certain License Agreement entered July 10, 1995;
WHEREAS, FOUNDATION and LICENSEE wish to amend and restate the License
Agreements and to include under this Restated Agreement exclusive, worldwide
licenses under the discoveries and inventions embodied in the Sponsored Research
Intellectual Property Rights (as defined below);
WHEREAS, as a benefit of funding such research, FOUNDATION is willing to
grant to LICENSEE an exclusive license under FOUNDATION's rights in such
Sponsored Research Intellectual Property Rights upon the terms and conditions
hereinafter set forth;
WHEREAS, the work leading to the Sponsored Research Intellectual Property
was supported in part by an agency of the U.S. Government, FOUNDATION is
obligated to comply with the U.S. Office of Management & Budgets Circular No. A-
124, or 37 CFR Part 401; and
WHEREAS, such FOUNDATION and LICENSEE have entered into a Warrant Agreement
on even date herewith, pursuant to which LICENSEE shall provide to FOUNDATION
warrants to purchase shares of GenVec stock, in accordance with the terms and
conditions therein.
NOW, THEREFORE, in consideration of the covenants and obligations
hereinafter set forth, the parties hereto hereby agree as follows:
I.
DEFINITIONS
-----------
The following definitions will apply throughout this Restated Agreement:
1.1 "Affiliate" shall mean any corporation or other entity which
----------
is directly or indirectly controlling, controlled by or under the common control
of a party hereto. For the purpose of this Restated Agreement, "control" shall
mean the direct or indirect ownership of at least fifty percent (50%) of the
outstanding shares or other voting rights of the subject entity to elect
directors, or if not meeting the preceding, any entity owned or controlled by or
owning or controlling at the maximum control or ownership rights permitted in
the country where such entity exists.
1.2 "Biological Research Materials" shall mean any [*]
-----------------------------
or other biological material or derivative or analogs thereof, created by one or
more employees of Cornell University and arising out of the Sponsored Research
conducted pursuant to any of the Sponsored Research Agreements (except to the
extent such biological material is subject to the Material Transfer Agreement).
It is understood and agreed that the Biological Research Materials shall
include, without limitation, the Biological Materials (as defined in the Prior
Sponsored Research Agreements and/or License Agreements).
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
1.3 "Confidential Information" shall mean (i) any proprietary or
-------------------------
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder which
is identified as confidential or proprietary when disclosed and such disclosure
of confidential information is confirmed in writing within thirty (30) days by
the disclosing party.
1.4 "LICENSEE" shall mean GenVec, Inc. and its Affiliates.
---------
1.5 "License Year" shall mean each [*] period beginning on the
-------------
effective date of this Restated Agreement first written above and thereafter on
the anniversary date thereof.
1.6 "Licensed Application" shall mean any U.S. patent application
---------------------
within the Sponsored Research Intellectual Property Rights and any continuation,
continuation-in-part, or divisional applications thereof, as well as foreign
counterparts thereof.
1.7 "Licensed Patent" shall mean any U.S. Patent issuing from a
---------------
Licensed Application, and all extensions, reissues and re-examinations thereof,
as well as foreign counterparts thereof.
1.8 "Licensed Product" shall mean any product, composition or
----------------
material, within the scope of a Valid Claim, or which incorporates, in material
part, Biological Research Materials.
1.9 "Material Transfer Agreement" shall mean that certain
---------------------------
Material Transfer Agreement entered by LICENSEE and Cornell University
Medical College effective as of December 19, 1996.
1.10 "Net Sales Price" shall mean the gross amount received by
---------------
LICENSEE or its sublicensees in arm's length sales to third parties
of Licensed Products, after deduction of the following items to the extent such
items are incurred and do not exceed reasonable and customary amounts for each
such item in the market in which such sale occurred:
[*]
Net Sales Price shall not include sales or transfers between LICENSEE and its
subsidiaries, Affiliates or sublicensees, except that where such subsidiary,
Affiliate or sublicensee utilizes the Licensed Products for the performance of
commercial services for third party customers. Net Sales Price shall
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
-3-
<PAGE>
be based on subsequent final sales of such Licensed Products to third parties by
such Affiliates or sublicensees, unless the intermediate sales price to a
sublicensee is higher than the subsequent final Sales Price, in which case the
intermediate Sales Price shall control.
1.11 "Sponsored Research Agreements" shall mean the Prior
-----------------------------
Sponsored Research Agreements and the Other Sponsored Research Agreements.
1.11.1 "Prior Sponsored Research Agreements" shall
-----------------------------------
mean each of the Prior Crystal Sponsored Research Agreement and the Prior Falck-
Pedersen Sponsored Research Agreement.
1.11.2 "Other Sponsored Research Agreements" shall
------------------------------------
mean any Sponsored Research Agreement entered by LICENSEE and FOUNDATION (or its
affiliated clinical entities) after December 31, 1997.
1.12 "Sponsored Research Intellectual Property Rights" shall mean
------------------------------------------------
individually and collectively, all patent applications, patents, and patentable
discoveries and inventions arising, in whole or in part, out of the Sponsored
Research conducted pursuant to any of the Sponsored Research Agreements that are
first conceived or discovered and/or reduced to practice (i) by one or [*].
1.13 "Technical Information" shall mean and include all technical
----------------------
information, developments, discoveries and know-how, methods, techniques,
formulae, processes, and other information conceived and/or discovered and/or
reduced to practice in connection with research conducted pursuant to any of the
Sponsored Research Agreements. "Technical Information" shall exclude any of the
foregoing that are included within a claim of a Licensed Patent or a Licensed
Application or which are Biological Research Materials.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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<PAGE>
1.14 "Valid Claim" shall mean a claim of an issued and unexpired
------------
patent or a claim of a pending patent application which has not been held
unpatentable, invalid or unenforceable by a court or other government agency of
competent jurisdiction and has not been admitted to be invalid or unenforceable
through reissue, re-examination, disclaimer or otherwise; provided, however,
that if any holding of invalidity, unenforceability or unpatentability is later
reversed by a court or agency with overriding authority, the relevant claim
shall be reinstated as a Valid Claim hereunder with respect to sales made after
the date of such reversal. Notwithstanding the foregoing provisions of this
Section 1.14, if a claim of a pending patent application has not issued as a
claim of an issued patent, within [*] after the date from which such
claim takes priority, such pending claim shall not be a Valid Claim for purposes
of this Agreement unless and until a patent issues including such claim.
II
GRANT
-----
2.1 Subject only to the prevailing rights of and obligations to the
U.S. Government with respect to ownership of intellectual property derived in
the course of federally sponsored research, including, without limitation, any
such rights and obligations set forth in 37 CFR Part 401, should they exist,
FOUNDATION hereby grants to LICENSEE for the term set forth below and under the
royalty basis set forth below, an exclusive license under the Sponsored Research
Intellectual Property Rights (and related Licensed Applications and Licensed
Patents) to make, have made, use, lease, import, have imported, offer for sale,
sell and otherwise exploit Licensed Products in the United States and throughout
the world, with the right to grant sublicenses, as set forth in Article XII
infra; [*];
- -----
2.2 FOUNDATION shall retain the nontransferable right to practice
the Sponsored Research Intellectual Property Rights for its internal, academic,
non-commercial research.
2.3 Promptly following execution of this Agreement, FOUNDATION
shall transfer to LICENSEE a sufficient quantity of the Biological Research
Materials existing as of the Effective Date, and thereafter as Biological
Research Materials are developed, in each case, as are
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
-5-
<PAGE>
reasonable and necessary for LICENSEE to establish a viable culture of such
Biological Research Materials. LICENSEE shall reimburse FOUNDATION for the
reasonable out-of-pocket costs incurred by FOUNDATION in transferring the
Biological Research Materials to LICENSEE.
III
TO HAVE MADE
------------
3.1 The right of LICENSEE and its sublicensees to make Licensed
Products includes the right to have made Licensed Products by contract with
third parties. Such contractual arrangements with third parties shall be subject
to and conditioned upon appropriate supervision and quality assurance and
control of the third party by LICENSEE and the third party shall be bound in
writing to respect all rights of FOUNDATION and to supply any production of
Licensed Products made by such third party exclusively to LICENSEE or a
sublicensee of LICENSEE.
IV
FOREIGN PATENTS AND PAYMENT OF COSTS
------------------------------------
[*]
V
PAYMENT OF U.S. FEES
AND CONTINUING PROSECUTION COSTS
--------------------------------
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
-6-
<PAGE>
[*]
VI
ROYALTIES AND MINIMUM ROYALTIES TO BE
PAID DURING THE LICENSE AGREEMENT
---------------------------------
6.1 Beginning on March 1, 1998, and continuing for a [*] period
thereafter, LICENSEE shall pay FOUNDATION a [*] maintenance fee for that License
Year, and following such [*] period, LICENSEE shall pay FOUNDATION a [*]
maintenance fee for each License Year during the term of this Restated
Agreement. Such monies will be considered as a credit for any royalties due for
that License Year under this Restated Agreement and the royalty reports may
reflect the use of such credit. Such provision is to be construed as an annual
maintenance fee payment requirement and none of the maintenance fee payments are
refundable or applicable to succeeding License Years.
6.2 LICENSEE will pay to the FOUNDATION a royalty of [*] of the Net
Sales Price of Licensed Products within the scope of an issued Valid Claim in
the country of manufacture or sale.
6.3 If a Licensed Product is covered in the country of manufacture
or sale only by a Valid Claim of a Licensed Patent owned jointly by the
FOUNDATION and LICENSEE, the royalty rate [*] Sales.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
-7-
<PAGE>
6.4 If a Licensed Product is covered in the country of manufacture
or sale only by a Valid Claim of a Licensed Application, [*] of the Net Sales
Price.
6.5 In the event that a Licensed Product is sold in combination as
a single product with another product or component whose sale and use are not
covered by a claim within the Sponsored Research Intellectual Property Rights in
the country for which the combination product is sold, Net Sales Price from such
sales for purposes of calculating the amounts due under this Article VI above
shall be calculated by multiplying the Net Sales Price of that combination by
the fraction A/(A+B), where A is the selling price of the Licensed Product and B
is the selling price of the other product or component sold separately. In the
event that no such separate sales are made, the Net Sales Price for royalty
determination shall be as reasonably allocated by LICENSEE between such Licensed
Product and such other product or component, based upon their relative
importance and proprietary protection.
6.6 If LICENSEE or its sublicensee is required to pay a third party
with respect to a license for intellectual property rights or other technologies
which LICENSEE, or its sublicensee, in its reasonable judgment, determines are
necessary to practice the Sponsored Research Intellectual Property Rights,
LICENSEE may offset such amounts against royalties due to FOUNDATION for such
Licensed Product. Notwithstanding the foregoing provisions of this Section 6.6
in no event shall the royalties due to FOUNDATION hereunder be reduced [*] of
the amount that would otherwise be due FOUNDATION pursuant to this Restated
Agreement.
6.7 If LICENSEE or its sublicensee is required to pay a third party
with respect to a license for intellectual property rights or other technologies
which LICENSEE, or its sublicensee, in its reasonable judgment, determines are
necessary or useful to make, use or sell a Licensed Product, but are not
required to practice the Sponsored Research Intellectual Property Rights,
LICENSEE may offset such amounts owing to such third parties against royalties
due to FOUNDATION for such Licensed Product. Notwithstanding the foregoing
provisions of this Section 6.7 in no event shall the royalties due to FOUNDATION
hereunder be so reduced [*] of the amount that would otherwise be due FOUNDATION
pursuant to this Restated Agreement.
6.8 It is understood and agreed that regardless of any credits or
offsets to which LICENSEE or its sublicensees are entitled under the terms of
this Restated Agreement, the royalty payments due FOUNDATION under this Article
6 [*] of the Net Sales Price of any Licensed Product.
6.9 In the event that more than one Valid Claim within the Licensed
Patents is applicable to any Licensed Product, then only one royalty shall be
paid to FOUNDATION in respect of such Licensed Product. It is understood that
royalties shall only be payable under this Article VI with respect to Licensed
Products whose sale would infringe a Valid Claim in the country for which such
Licensed Product is sold. In no event shall more than one royalty be due
hereunder with respect to any Licensed Product unit, nor shall a royalty be
payable under this Article VI with respect to sales of Licensed Products for use
in research and/or development, in clinical trials or as samples.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
-8-
<PAGE>
6.10 With respect to the possible renegotiation of royalty rates
with regard to any Sponsored Research Intellectual Property Rights subject to
this Agreement, FOUNDATION shall promptly notify LICENSEE if it believes that
any such a renegotiation is required under the Tax Reform Act of 1986
specifically identifying the applicable intellectual property, and in such event
the following shall apply:
6.10.1 Fair Consideration. FOUNDATION and LICENSEE
------------------
have determined that the consideration payable to the FOUNDATION pursuant to
this Agreement is fair and competitive with respect to all reasonably
conceivable inventions and other intellectual property which might be developed
by FOUNDATION under any of the Sponsored Research Agreements at the time each
Sponsored Research Agreement was executed.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED FORMS.
-9-
<PAGE>
[*]
6.11 Royalties due under this Article VI shall be payable on a
country-by-country and Licensed Product-by Licensed Product basis until the
expiration of the last-to-expire issued Valid Claim covering such Licensed
Product in such country. It is understood that LICENSEE'S obligation to pay
royalties with respect to a particular Licensed Product shall cease:
(i) if the applicable claims in the Licensed Patent in any
particular country are held invalid by an unappealed or unappealable decision of
a court of competent jurisdiction, in that particular country, or
(ii) upon expiration of the last to expire Licensed Patent covering
such Licensed Product in a country;
(iv) if FOUNDATION abandons its patent solicitation efforts for all
Licensed Applications, and no issued Licensed Patent is in force.
VII
ACCOUNTING AND PAYMENT SCHEDULE
-------------------------------
7.1 Payment, reporting and financial accounting shall be on a
quarterly basis and LICENSEE will deliver to the FOUNDATION within sixty (60)
days after the end of each quarter of the License Year a report in writing
setting forth sales of Licensed Products (including a negative report if
appropriate) and will accompany such report with an appropriate payment of
royalty or maintenance fee due for such period. LICENSEE will keep accurate
records, certified by it, showing the information by which LICENSEE arrived at a
royalty determination and upon FOUNDATION's written request, but not more
frequently than once per calendar year, will permit a person appointed by the
FOUNDATION and acceptable to LICENSEE after entering into a confidentiality
agreement with LICENSEE, at FOUNDATION's expense, to make such inspection of
said records at agreed times during LICENSEE's regular business hours for the
sole purpose of and to the extent necessary to verify royalty reports made by
LICENSEE with respect to Net Sales Price received not more than three (3) years
prior to the date of FOUNDATION's request. The report for the first quarter of
the first License Year will include any sales of Licensed Products by LICENSEE
prior to the date of this Restated Agreement and will be accompanied by
appropriate payment of royalty therefor in the U.S. dollars. To the extent that
LICENSEE does not have the right to grant to FOUNDATION the right to audit its
sublicensees' books and records hereunder, LICENSEE shall endeavor to obtain for
itself
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED FORMS.
-10-
<PAGE>
such right and at the request and expense of FOUNDATION, LICENSEE shall exercise
such audit right with respect to sublicensees, and to the extent its contractual
obligations to the sublicensee permit, provide the results of such audit for
inspection by FOUNDATION pursuant to this Section 7.1.
7.2 Conversion from foreign currencies, if any, shall be based upon
the conversion rate for conversion of the foreign currency into U.S. Dollars,
quoted for current transactions for buying U.S. Dollars, as reported in The Wall
--------
Street Journal for the last business day of the calendar quarter to which such
- --------------
payment pertains.
7.3 Payments which are delayed beyond the sixty (60) days after the
end of the quarter in which they become due shall bear interest at a rate equal
to the prime rate as reported by Chase Manhattan Bank, New York, calculated on
the number of days such payment is delinquent.
VII
TERM
----
8.1 The aforesaid exclusive license shall commence on April 1, 1993
and unless terminated earlier pursuant to Article XIII, continue in full force
and effect on country-by-country and Licensed Product-by-Licensed Product basis
until the expiration, revocation or invalidation date of the last Licensed
Patent or of the abandonment of the last Licensed Application in such country,
whichever is later. LICENSEE's license with respect to Biological Research
Materials and Technical Information in each country shall survive the expiration
of this Restated Agreement and shall be deemed fully-paid as of such date.
IX
DUTY OF DILIGENCE
-----------------
9.1 LICENSEE shall use its reasonable efforts to effect the
introduction of Licensed Product(s) into the commercial market as soon as
practicable consistent with sound and reasonable business practices. Upon and
after such introduction and consistent with sound and reasonable business
practices, LICENSEE agrees to continue to use its reasonable efforts to maximize
commercial sales of Licensed Products for the duration of the term of this
Agreement. LICENSEE further agrees to use reasonable best efforts to maintain
quality control over Licensed Products and generally attend to proper, safe,
fair and lawful development and exploitation of the market for Licensed
Products. The foregoing diligence requirements may be satisfied by LICENSEE or
its sublicensees.
X
INFRINGEMENT OF LICENSED PATENT RIGHTS BY THIRD PARTIES
-------------------------------------------------------
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<PAGE>
10.1 In the event that any infringement of a patent within the
Sponsored Research Intellectual Property Rights shall come to the attention of
the FOUNDATION or LICENSEE, then FOUNDATION and LICENSEE shall duly inform each
other. LICENSEE shall have the first right (itself or through others), at its
sole option, to bring suit to enforce the Sponsored Research Intellectual
Property Rights, and/or defend any declaratory judgment action with respect
thereto, in each case with respect to the manufacture, sale or use of a Licensed
Product; provided, however, that LICENSEE shall keep FOUNDATION reasonably
informed as to the defense and/or settlement of such action. FOUNDATION shall
have the right to participate in any such action with counsel of its own choice
at its own expense. If LICENSEE fails to initiate a patent infringement action
to enforce the Sponsored Research Intellectual Property Rights against a
commercially significant infringement by a third party, within [*] of a request
by FOUNDATION to do so, (or within such shorter period which may be required to
preserve the legal rights of FOUNDATION under the laws of the relevant
government), FOUNDATION may initiate such action at its own expense; provided,
prior to initiating any such action it shall notify LICENSEE of its intent to do
so and shall discuss with LICENSEE and reasonably take into consideration
LICENSEE's views as to whether such an action should then be pursued. LICENSEE
shall have the right to participate in any such action with counsel of its own
choice and its own expense.
10.2 LICENSEE may credit any expenses (including, without
limitation, attorneys and expert fees) incurred in connection with any
infringement or declaratory judgment against up to [*] of any royalties payable
by LICENSEE. Out of any damages or awards recovered by LICENSEE in such action
such amounts shall be first applied to reimburse LICENSEE's and then
FOUNDATION's unreimbursed expenses, including without limitation, reasonable
attorneys' and expert fees and court costs. Any amount remaining belongs to [*]
10.3 In any action brought by LICENSEE, LICENSEE undertakes to
indemnify for and hold FOUNDATION harmless from any damages, costs or expenses
incurred by reason of such litigation. LICENSEE shall not settle any claim based
on the infringement of a patent within the Sponsored Research Intellectual
Property Rights without the consent of FOUNDATION, which consent shall not be
unreasonably withheld.
XI
ASSIGNMENT
----------
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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XII
SUBLICENSING
------------
[*]
12.2 Any sublicense granted by LICENSEE (including, without
limitation, any non-exclusive sublicense) shall remain in effect in the event of
any termination of this Restated Agreement and shall provide for the assignment
of such sublicenses to FOUNDATION or its designee, in the event that the
Restated Agreement is terminated; provided, the financial obligations of each
sublicensee to FOUNDATION shall be limited to the amounts LICENSEE shall be
obligated to pay to FOUNDATION for the activities of such sublicensee pursuant
to this Restated Agreement.
XIII
TERMINATION
-----------
13.1 Either party may terminate this Restated Agreement for
noncompliance with a material term of this Restated Agreement by the other party
by written notice to the breaching party of its intentions to do so, if such
breach is not cured within [*] after such written notice is given. However, if
the party alleged to be in breach of this Restated Agreement disputes such
breach within such [*] period, the nonbreaching party shall not have the right
to terminate this Restated Agreement unless it has been determined by an
independent arbitrator that this Restated Agreement was materially breached, and
the breaching party fails to comply with its obligations hereunder within [*]
after such determination.
13.2 LICENSEE may terminate this License Agreement, in its entirety
or as to any Licensed Patent or Licensed Application, or as to any particular
Licensed Product, or as to any country, at any time by giving FOUNDATION at
least [*] prior written notice.
13.3 (a) Termination of this Restated Agreement for any reason
shall not release any party hereto from any liability which, at the time of such
termination, has already accrued to the other party or which is attributable to
a period prior to such termination nor preclude either party from pursuing all
rights and remedies it may have hereunder or at law or in equity with respect to
any breach of this Restated Agreement.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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(b) Upon termination of this Restated Agreement for any
reason, each party shall promptly return to the other party all Confidential
Information received from the other party (except one copy of which may be
retained for archival purposes).
(c) In the event this Restated Agreement is terminated for
any reason, LICENSEE and its sublicensees shall have the right to sell or
otherwise dispose of the stock of any Licensed Product subject to Articles VI
and VII hereof.
(d) Articles I, VIII, X, XIV, XV and XVI and Sections 12.2
and 13.3 shall survive the expiration and any termination of this Restated
Agreement. Except as otherwise provided in this Article XIII, all rights and
obligations of the parties under this Restated Agreement shall terminate upon
the expiration or termination of this Restated Agreement.
XIV
ARBITRATION AND JURISDICTION
----------------------------
14.1 If a dispute arises out of or relates to this Restated
Agreement, or the breach thereof, and if said dispute cannot be settled through
negotiation, the parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration.
14.2 Subject to Section 14.3, any dispute under this Restated
Agreement (except any dispute relating to the validity or enforceability of any
patent) which is not settled by mutual consent shall be finally settled by
binding arbitration. Any such arbitration proceeding shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and shall be held in New York, New York, unless otherwise agreed by
the parties. The arbitration shall be conducted by an Arbitration Panel
comprising three neutral, independent arbitrators. One arbitrator shall be
appointed by FOUNDATION, one arbitrator shall be appointed by LICENSEE, and a
Chairman of the Arbitration Panel shall be appointed by the first two
arbitrators. The members of the Arbitration Panel shall have sufficient and
appropriate education and experience to competently address the matter submitted
to the Arbitration Panel for resolution. Judgment upon the arbitration award may
be entered in any court of competent jurisdiction. The costs of the arbitration
including administrative and arbitrators' fees, shall be shared equally by the
parties and each party shall bear its own costs and attorneys' and witness' fees
incurred in connection with the arbitration. No punitive damages may be granted
by the arbitrators. The arbitration proceedings and the decision shall not be
made public without the joint consent of the parties and each party shall
maintain the confidentiality of such proceedings and decision unless otherwise
permitted by the other party. The parties agree that the decision shall be the
sole, exclusive and binding remedy between them regarding any and all disputes,
controversies, claims and counterclaims presented to the arbitrators. Any award
may be entered in a court of competent jurisdiction for a judicial recognition
of the decision and an order of enforcement.
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14.3 The FOUNDATION reserves the right and power to proceed with
direct judicial remedies against LICENSEE without conciliation, mediation or
arbitration for breach of the royalty payment and sales reporting provisions of
this Restated Agreement after giving written notice of such breach to LICENSEE
followed by an opportunity period of [*] in which to cure such breach. In
collecting overdue royalty payments and securing compliance with reporting
obligations, FOUNDATION may use all judicial remedies available.
XV
CONFIDENTIALITY
15.1 Except as expressly provided herein or as required by law, the
parties agree that, for the term of this Restated Agreement and for [*]
thereafter, the receiving party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose except for the
purposes contemplated by this Restated Agreement any Confidential Information
furnished to it by the disclosing party hereto pursuant to this Restated
Agreement, except that to the extent that it can be established by the receiving
party by competent proof that such Confidential Information:
15.1.1 was already known to the receiving party, other
than under an obligation of confidentiality, at the time of disclosure;
15.1.2 was generally available to the public or
otherwise part of the public domain at the time of its disclosure to the
receiving party;
15.1.3 became generally available to the public or
otherwise part of the public domain after its disclosure and other than through
any act or omission of the receiving party in breach of this Restated Agreement;
15.1.4 was independently developed by the receiving
party as demonstrated by documented evidence prepared contemporaneously with
such independent development; or
15.1.5 was subsequently lawfully disclosed to the
receiving party by a person other than a party hereto.
15.2 Each party hereto may use or disclose information disclosed to
it by the other party to the extent such use or disclosure is reasonably
necessary in filing or prosecuting patent applications, prosecuting or defending
litigation, complying with applicable governmental regulations or otherwise
submitting information to tax or other governmental authorities, conducting
clinical trials, or making a permitted sublicense or otherwise exercising its
rights hereunder, provided that if a party is required to make any such
disclosure of another party's confidential information, other than pursuant to a
confidentiality agreement, it will give reasonable advance notice to the latter
party of such disclosure and, save to the extent inappropriate in the case of
patent applications, will use its best efforts to
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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secure confidential treatment of such information prior to its disclosure
(whether through protective orders or otherwise).
15.3 Except as expressly provided herein, each party agrees not to
disclose any terms of this Restated Agreement to any third party without the
consent of the other party; provided, reasonable disclosures may be made as
required by securities or other applicable laws or other federal or national
agency requirements, or to actual or prospective investors or corporate
partners, or to a party's accountants, attorneys and other professional
advisors. Once a disclosure has been approved, LICENSEE may make disclosures
which do not materially differ therefrom without obtaining approvals from
FOUNDATION.
XVI
OTHER
-----
16.1 LICENSEE acknowledges that title to all Biological Research
Materials remains in FOUNDATION and that LICENSEE's possession of Biological
Research Materials under this Agreement is by way of bailment and not
conditional or unconditional sale. Upon termination for cause by FOUNDATION or
termination by LICENSEE under Article XIII, LICENSEE agrees to destroy or return
all Biological Research Materials to FOUNDATION and FOUNDATION shall destroy or
return to LICENSEE all "Sponsor Materials" (as defined in the Sponsored Research
Agreements) and any other materials provided by LICENSEE and its sublicensees
unless provided otherwise in any prevailing biological materials agreements
between the parties. At the natural termination of this Agreement (Article
VIII), LICENSEE shall have the right to continue to possess and use the
Biological Research Materials for any and all purposes without additional
payment.
16.2 LICENSEE agrees that it will not use the indicia or names of
FOUNDATION or any of its personnel in advertising, promotion, or labeling of
Licensed Products without prior written approval of the FOUNDATION, which
approval shall not be unreasonably withheld.
16.3 FOUNDATION represents and warrants that (i) FOUNDATION is and
shall remain the exclusive owner of the entire right, title, and interest in and
to Licensed Patents and Licensed Applications (and co-owner with LICENSEE of all
right, title and interest in and to the Joint Inventions and related Licensed
Patents and Licensed Applications) and Sponsored Research Intellectual Property
Rights; (ii) FOUNDATION has the sole right and authority to enter into this
Restated Agreement and grant the rights and licenses hereunder; (iii) FOUNDATION
has not previously granted and will not grant any rights in the Licensed
Patents, Licensed Applications and Sponsored Research Intellectual Property
Rights that are inconsistent with the rights and licenses granted to LICENSEE
herein; (iv) there are no pending or threatened actions, suits, investigations,
claims or proceedings in any way related to the Licensed Patents, Licensed
Applications and Sponsored Research Intellectual Property Rights; (v) the
Licensed Patents, Licensed Applications and Sponsored Research Intellectual
Property Rights are free and clear of any lien, encumbrance, security interest
and restriction on transfer and license; and (vi) FOUNDATION has and shall
comply fully with 35 U.S.C. (S)(S)200 et seq. and all implementing regulations
------
necessary to perfect its ownership
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interest in the Licensed Patents, Licensed Applications and Sponsored Research
Intellectual Property Rights.
16.4 EXCEPT AS PROVIDED IN SECTION 16.3 AND THE WHEREAS CLAUSES,
NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES (EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE) WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND
FOUNDATION MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
16.5 FOUNDATION by this Restated Agreement makes no representation
as to the patentability and/or breadth of the inventions and/or discoveries
involved in the Licensed Patents, Licensed Applications and Sponsored Research
Intellectual Property Rights.
16.6 LICENSEE agrees to defend, indemnify and hold FOUNDATION
harmless from and against all liability, damages, expenses or losses for death,
personal injury, illness or property damage (including reasonable attorney's
fees) resulting from a claim, suit or proceeding brought by a third party
against FOUNDATION and arising (a) out of use by LICENSEE or its sublicensees of
inventions licensed or information furnished under this Restated Agreement, or
(b) out of any use, sale or other disposition by LICENSEE or its sublicensees of
Licensed Products made by use of such inventions or information; provided that
any indemnitee that intends to claim indemnification under this Article XVI
shall: (i) promptly notify LICENSEE in writing of any claim with respect to
which the indemnitee intends to claim such indemnification, (ii) give LICENSEE
sole control of the defense and settlement thereof, and (iii) provide LICENSEE,
at LICENSEE's expense, with reasonable assistance and full information with
respect to such claim. LICENSEE shall have no obligation for any claim if the
indemnitee seeking indemnification makes any admission, settlement, or other
communication regarding such claim without the prior consent of LICENSEE, which
consent will not be unreasonably withheld. As used in this clause, FOUNDATION
includes its trustees, officers, agents and employees, and those of Cornell
University (including CUMC) and affiliated hospitals, clinics, or other
institutions affiliated with CUMC, and "LICENSEE" includes its Affiliates,
contractors and sub-contractors. In discharge of the above, LICENSEE will
maintain general liability insurance in the amount of at least [*] per
occurrence with a deductible of more than [*] per occurrence against damage to
or destruction of property and injury to or death of individuals and against
such other risks as FOUNDATION may reasonably request arising out of or in
connection with any of the Licensed Products, FOUNDATION, LICENSEE and their
respective officers, trustees, members of their governing boards, and employees
will be named insureds under all such insurance. Such insurance will also
provide that FOUNDATION will be given notice of any material modification
thereof which would reduce insurance coverage of LICENSEE, and at least thirty
(30) days prior written notice of cancellation or termination and reason
therefore. LICENSEE will furnish FOUNDATION upon request, and in any event on
execution of this Restated Agreement and on each anniversary of the Effective
Date of this Restated Agreement, written confirmation issued by the insurer or
an independent insurance agent confirming that insurance is maintained in
accordance with the above requirements.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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16.7 This Restated Agreement shall be interpreted under the Laws of
the State of New York.
16.8 Any payment, report, notice or other communication required or
permitted to be given to either party hereto shall be deemed to have been
properly given and to be effective on the date of delivery if delivered in
person or telecopied (with confirmed answerback) to the number provided by the
other party, or five (5) days after mailing in the United States by certified
first-class United States mail, postage paid, return receipt requested, to the
other party's address as set forth below or to such other address as a party
shall designate by written notice to the other party.
To FOUNDATION: H. Walter Haeussler, President
CORNELL RESEARCH FOUNDATION, INC.
Cornell Business & Technology Park
20 Thornwood Drive, Suite 105
Ithaca, New York 14850
To LICENSEE: GENVEC, INC.
12111 Parklawn Drive
Rockville, Maryland 20852
Attn: President
with a copy to: Vice President, Corporate Development
16.9 LICENSEE's sole obligation to exploit the Licensed Patents,
Licensed Applications and Sponsored Research Intellectual Property Rights is as
set forth in Article IX. Nothing in this Restated Agreement will impair
LICENSEE's right to independently acquire, license, develop for itself, or have
others develop for it, similar technology performing similar functions as the
Licensed Technology or to market and distribute products based on such other
technology.
16.10 The relationship of FOUNDATION and LICENSEE established by
this Restated Agreement is that of independent contractors. Nothing in this
Restated Agreement shall be construed to create any other relationship between
FOUNDATION and LICENSEE. Neither party shall have any right, power or authority
to assume, create or incur any expense, liability or obligation, express or
implied, on behalf of the other.
16.11 Any delays in or failures of performance by either party
under this Restated Agreement shall not be considered a breach of this Restated
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, acts,
regulations or laws of any government, strikes or other concerted acts of
workers, fires, earthquakes, floods, explosions, riots, wars, rebellion, and
sabotage. Any time period for performance imposed hereunder shall be extended by
the actual time of delay caused by any such occurrence.
16.12 A waiver, express or implied, by either FOUNDATION or
LICENSEE of any right under this Restated Agreement or of any failure to perform
or breach hereof by the other party hereto
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shall not constitute or be deemed to be a waiver of any other right hereunder or
of any other failure to perform or breach hereof by such other party, whether of
a similar or dissimilar nature thereto.
16.13 SUBJECT TO SECTION 16.6, NEITHER PARTY SHALL BE LIABLE TO THE
OTHER PARTY OR ANY THIRD PARTY FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR
EXEMPLARY DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO
THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS RESTATED AGREEMENT, WHETHER
SUCH CLAIM IS BASED ON CONTRACT, TORT OR ANY THEORY OF LIABILITY.
16.14 Headings included herein are for convenience only, do not
form a part of this Restated Agreement and shall not be used in any way to
construe or interpret this Restated Agreement.
16.15 If any provision of this Restated Agreement shall be found by
a court to be void, invalid or unenforceable, the same shall be reformed to
comply with applicable law, or stricken if not so conformable, so as not to
affect the validity or enforceability of the remainder of this Restated
Agreement.
16.16 This Restated Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.
16.17 At any time or from time to time on and after the date of
this Restated Agreement, either party shall at the request of the other party
(i) deliver to the other party such records, data or other documents consistent
with the provisions of this Restated Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
transfer or license, and (iii) take or cause to be taken all such actions, as
the other party may reasonably deem necessary or desirable in order for the
other party to obtain the full benefits of this Restated Agreement and the
transactions contemplated hereby.
16.18 LICENSEE and LICENSOR have each consulted counsel of their
choice regarding this Restated Agreement, and each acknowledges and agrees that
this Restated Agreement shall not be deemed to have been drafted by one Party or
another and will be construed accordingly.
16.19 This Restated Agreement, together with the Sponsored Research
Agreements and Material Transfer Agreement, constitute the entire understanding
and agreement between the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, representations, agreements, and
understandings, written or oral, that the parties may have reached with respect
to the subject matter hereof. No agreements altering or supplementing the terms
hereof may be made except by means of a written document signed by the duly
authorized representatives of each of the parties hereto. It is understood that
the Sponsored Research Agreements and Material Transfer Agreement are separate
and independent from this Restated Agreement and termination of any of such
agreements shall not operate to terminate or otherwise affect the rights and
obligations of the parties under the other agreements.
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16.20 This Restated Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this instrument to be executed
in duplicate as of the day and year first above written.
ATTEST: CORNELL RESEARCH FOUNDATION, INC.
By
- -------------------------- -----------------------------------
H. Walter Haeussler
Title President
---------------------------------
Date
----------------------------------
ATTEST: GENVEC, INC.
By
- -------------------------- -----------------------------------
Title
---------------------------------
Date
----------------------------------
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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