<PAGE>
As filed with the Securities and Exchange Commission on February 18, 2000
Registration No. 333-96335
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1 to FORM S-1
REGISTRATION STATEMENT
Under THE SECURITIES ACT OF 1933
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Exelixis, Inc.
(Exact name of registrant as specified in its charter)
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Delaware 8731 04-3257395
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classification Identification No.)
incorporation or Code Number)
organization)
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260 Littlefield Avenue
South San Francisco, CA 94080
(650) 825-2200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------
GEORGE A. SCANGOS
President and Chief Executive Officer
260 Littlefield Avenue
South San Francisco, CA 94080
(650) 825-2200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies to:
ROBERT L. JONES, ESQ. DEBORAH A. ALISON S. RESSLER, ESQ. Sullivan &
MARSHALL, ESQ. Cooley Godward LLP Cromwell 1888 Century Park East Suite
Five Palo Alto Square 3000 El Camino 2100 Los Angeles, CA 90067-1725 (310)
Real Palo Alto, CA 94306-2155 (650) 712-6600
843-5000
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Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this registration statement as the underwriters
shall determine.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
number for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
This Amendment No.1 to Registration Statement on Form S-1 (File No. 333-
96335) is an exhibit-only filing to file two additional exhibits to the
Registration Statement: Exhibits 1.1 and 10.13. Such exhibits were listed under
Item 16 in the initial filing of the Registration Statement on February 7, 2000
with a foot note that they would be filed by amendment.
1
<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 the
underwriting discounts payable by us, in connection with the sale of common
stock being registered. All amounts are estimates except the SEC registration
fee, the NASDAQ filing fee and the Nasdaq National Market listing fee.
<TABLE>
<S> <C>
SEC registration fee............................................... $ 26,400
NASDAQ filing fee.................................................. 10,500
Nasdaq National Market listing fee................................. *
Blue Sky Fees and expenses......................................... 5,000
Transfer Agent and registrar fees.................................. 10,000
Accounting fees and expenses....................................... 275,000
Legal fees and expenses............................................ 425,000
Printing and engraving costs....................................... 270,000
Miscellaneous expenses............................................. *
--------
Total............................................................ $ *
========
</TABLE>
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*To be filed by amendment.
Item 14. Indemnification of Directors and Officers
As permitted by Delaware law, our amended and restated certificate of
incorporation provides that no director of ours will be personally liable to us
or our stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability:
. for any breach of duty of loyalty to us or to our stockholders;
. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
. for unlawful payment of dividends or unlawful stock repurchases or
redemptions under Section 174 of the Delaware General Corporation Law; or
. for any transaction from which the director derived an improper personal
benefit.
Our amended and restated certificate of incorporation further provides that
we must indemnify our directors and executive officers and may indemnify our
other officers and employees and agents to the fullest extent permitted by
Delaware law. We believe that indemnification under our amended and restated
certificate of incorporation covers negligence and gross negligence on the part
of indemnified parties.
We have entered into indemnification agreements with each of our directors
and certain officers. These agreements, among other things, require us to
indemnify each director and officer for certain expenses including attorneys'
fees, judgments, fines and settlement amounts incurred by any such person in
any action or proceeding, including any action by or in the right of Exelixis,
Inc., arising out of the person's services as our director or officer, any
subsidiary of ours or any other company or enterprise to which the person
provides services at our request.
The underwriting agreement (see Exhibit 1.1) will provide for
indemnification by the underwriters of Exelixis, Inc., our directors, our
officers who sign the registration statement, and our controlling persons for
some liabilities, including liabilities arising under the Securities Act.
II-1
<PAGE>
Item 15. Recent Sales of Unregistered Securities
Since January 1, 1997, Exelixis, Inc. has sold and issued the following
unregistered securities:
(1) From January 1997 through January 2000, Exelixis has granted stock
options to purchase 10,301,588 shares of common stock, at a weighted
average exercise price of $0.29, to employees, consultants and directors.
Of these stock options, 892,135 shares have been cancelled or have lapsed
without being exercised, 6,467,955 shares have been exercised for common
stock and 5,505,237 shares remain outstanding.
(2) In April 1997, Exelixis issued an aggregate of 7,875,000 shares of
Series C preferred stock to 41 accredited investors at $2.00 per share, for
an aggregate purchase price of $15,750,000. Shares of Series C preferred
stock are convertible into shares of common stock at the rate of one share
of common stock for each share of Series C preferred stock outstanding.
(3) In September 1997, Exelixis issued one warrant to purchase 85,000
shares of common stock to one purchaser at an exercise price of $2.00 per
share.
(4) From August 1998 to June 1998, Exelixis issued an aggregate of
2,500,000 shares of Series D preferred stock to 11 accredited investors at
$3.00 per share, for an aggregate purchase price of $7,500,000. In this
period, Exelixis issued an additional 2,500,000 shares of Series D
preferred stock to Pharmacia & Upjohn, Inc. as payment for services
rendered pursuant to the terms of a development agreement dated February
26, 1999. Shares of Series D preferred stock are convertible at the rate of
one share of common stock for each share of Series D preferred stock
outstanding.
(5) In November 1999 Exelixis issued warrants to purchase an aggregate
of 150,000 shares of common stock to three purchasers at an exercise price
of $3.00 per share.
Item 16. (A) Exhibits and Financial Statement Schedules
<TABLE>
<C> <S>
1.1** Form of Underwriting Agreement.
3.1+ Certificate of Amendment of the Restated Certificate of
Incorporation of Exelixis Pharmaceuticals, Inc., dated February 2,
2000.
3.2* Form of Amended and Restated Certificate of Incorporation of
Registrant to be filed upon the closing of the offering made in
connection with this Registration Statement.
3.3* Amended and Restated Bylaws of Registrant to be filed upon the
closing of the offering made in connection with this Registration
Statement.
4.1* Specimen Common Stock Certificate.
4.2+ Fourth Amended and Restated Registration Rights Agreement, dated
February 26, 1999 among Exelixis and Certain Stockholders of
Exelixis.
4.3+ Warrant, dated August 17, 1998, to Purchase 167,728 shares of Series
A Preferred Stock in favor of Comdisco, Inc.
4.4+ Warrant, dated August 17, 1998, to Purchase 20,486 shares of Series
A Preferred Stock in favor of Greg Stento.
4.5+ Warrant, dated January 24, 1996, to Purchase 357,143 shares of
Series B Convertible Stock in favor of MMC/GATX Partnership No. 1.
4.6+ Warrant, dated September 25, 1997, to Purchase 85,000 shares of
Common Stock in favor of MMC/GATX Partnership No. 1.
4.7+ Warrant, dated November 15, 1999, to Purchase 12,000 shares of
Common Stock in favor of Bristow Investments, L.P.
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
4.8+ Warrant, dated November 15,1999, to Purchase 135,000 shares of
Common Stock in favor of Slough Estates USA, Inc.
4.9+ Warrant, dated November 15, 1999, to Purchase 3,000 shares of
Common Stock in favor of Laurence and Magdalena Shushan
FamilyTrust.
5.1* Opinion of Cooley Godward LLP.
10.1* Form of Indemnity Agreement.
10.2+ 1994 Employee, Director and Consultant Stock Plan.
10.3+ 1997 Equity Incentive Plan.
10.4* 2000 Equity Incentive Plan.
10.5* 2000 Non-Employee Directors' Stock Option Plan.
10.6* 2000 Employee Stock Purchase Plan.
10.7+ Collaboration Agreement, dated December 16, 1999, between
Registrant, Bayer Corporation and GenOptera LLC.
10.8+ Operating Agreement, dated December 15, 1999, between Registrant,
Bayer Corporation and GenOptera LLC.
10.9+ Cooperation Agreement, dated September 15, 1998, between
Registrant and Artemis Pharmaceuticals, GmbH.
10.10+ Sublease Agreement, dated June 1, 1997, between Arris
Pharmaceutical Corporation and Registrant.
10.11+ Lease, dated May 12, 1999, between Registrant and Britannia
Pointe Grand Limited Partnership.
10.12+ Master Services Agreement, dated November 15, 1999, between
Registrant and Artemis Pharmaceuticals GmbH.
10.13+** Research Collaboration and Technological Transfer Agreement,
dated September 14, 1999, between Registrant and Bristol-Myers
Squibb.
10.14+ Corporate Collaboration Agreement, dated February 26, 1999,
between Registrant and Pharmacia & Upjohn AB.
10.15+ Amendment to Corporate Collaboration Agreement, dated October,
1999, between Registrant and Pharmacia & Upjohn AB.
10.16+ Asset Purchase Agreement, dated July 11, 1999, between Registrant
and MetaXen/Xenova.
10.17+ Employment Agreement, dated September 13, 1996, between
Registrant and George Scangos, Ph.D.
10.18+ Employment Agreement, dated April 14, 1997, between Registrant
and Geoffrey Duyk, M.D., Ph.D.
10.19+ Employment Agreement, dated October 19, 1999, between Registrant
and Glen Y. Sato, Chief Financial Officer and Vice President of
Legal Affairs.
23.1+ Consent of Independent Accountants (Exelixis).
23.2+ Consent of Independent Accountants (MetaXen).
23.3* Consent of Cooley Godward LLP (included in Exhibit 5.1).
24.1+ Power of Attorney (contained on signature page).
27.1+ Financial Data Schedule.
</TABLE>
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+ Previously filed.
* To be filed by amendment.
** Filed herewith.
+ Confidential treatment requested for certain portions of this exhibit.
II-3
<PAGE>
(b) Financial Statement Schedules
All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.
Item 17. Undertakings
The registrant hereby undertakes to provide to the Underwriters at the
closing 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, 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 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 its 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 Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a 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 this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1993, as amended,
the Registrant has caused this Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
County of South San Francisco, State of California on the 18th day of February,
2000.
Exelixis, Inc.
/s/ George A. Scangos, Ph.D
By: _________________________________
George A. Scangos, Ph.D
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ George A. Scangos, Ph.D. President, Chief Executive February 18, 2000
______________________________________ Officer and Director
George A. Scangos, Ph.D. (principal executive
officer)
/s/ Glen Y. Sato Chief Financial Officer February 18, 2000
______________________________________ (principal financial and
Glen Y. Sato accounting officer)
* Chairman of the Board of February 18, 2000
______________________________________ Directors
Stelios Papadopoulos, Ph.D.
* Director February 18, 2000
______________________________________
Charles Cohen, Ph.D.
* Director February 18, 2000
______________________________________
Jurgen Drews, M.D.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director February 18, 2000
______________________________________
Geoffrey Duyk, M.D., Ph.D.
* Director February 18, 2000
______________________________________
Jason S. Fisherman, M.D.
* Director February 18, 2000
______________________________________
Jean-Francois Formela, M.D.
* Director February 18, 2000
______________________________________
Edmund Olivier
* Director February 18, 2000
______________________________________
Lance Willsey, M. D.
* Director February 18, 2000
______________________________________
Peter Stadler, Ph.D.
</TABLE>
<TABLE>
<S> <C>
/s/ Glen Y. Sato
*By: _________________________________
Attorney-in-fact
</TABLE>
II-6
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
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<C> <S>
1.1** Form of Underwriting Agreement.
3.1+ Certificate of Amendment of the Restarted Certificate of Incorporation
of Exelixis Pharmaceuticals, Inc., dated February 2, 2000.
3.2* Form Amended and Restated Certificate of Incorporation of Registrant
to be filed upon the closing of the offering made in connection with
this Registration Statement.
3.3* Amended and Restated Bylaws of Registrant to be filed upon the closing
of the offering made in connection with this Registration Statement.
4.1* Specimen Common Stock Certificate.
4.2+ Fourth Amended and Restated Registration Rights Agreement, dated
February 26, 1999 among Exelixis and Certain Stockholders of Exelixis.
4.3+ Warrant, dated August 17, 1998, to Purchase 167,728 shares of Series A
Preferred Stock in favor of Comdisco, Inc.
4.4+ Warrant, dated August 17, 1998, to Purchase 20,486 shares of Series A
Preferred Stock in favor of Greg Stento.
4.5+ Warrant, dated January 24, 1996, to Purchase 357,143 shares of Series
B Convertible Stock in favor of MMC/GATX Partnership No. 1.
4.6+ Warrant, dated September 25, 1997, to Purchase 85,000 shares of Common
Stock in favor of MMC/GATX Partnership No. 1.
4.7+ Warrant, dated November 15, 1999, to Purchase 12,000 shares of Common
Stock in favor of Bristow Investments, L.P.
4.8+ Warrant, dated November 15, 1999, to Purchase 135,000 shares of Common
Stock in favor of Slough Estates USA, Inc.
4.9+ Warrant, dated November 15, 1999, to Purchase 3,000 shares of Common
Stock in favor of Laurence and Magdalena Shushan FamilyTrust.
5.1* Opinion of Cooley Godward LLP.
10.1* Form of Indemnity Agreement.
10.2+ 1994 Employee, Director and Consultant Stock Plan.
10.3+ 1997 Equity Incentive Plan.
10.4* 2000 Equity Incentive Plan.
10.5* 2000 Non-Employee Directors' Stock Option Plan.
10.6* 2000 Employee Stock Purchase Plan.
10.7+ Collaboration Agreement, dated December 16, 1999, between Registrant,
Bayer Corporation and GenOptera LLC.
10.8+ Operating Agreement, dated December 15, 1999, between Registrant,
Bayer Corporation and GenOptera LLC.
10.9+ Cooperation Agreement, dated September 15, 1998, between Registrant
and Artemis Pharmaceuticals GmbH.
10.10+ Sublease Agreement, dated June 1, 1997, between Arris Pharmaceutical
Corporation and Registrant.
10.11+ Lease, dated May 12, 1999, between Registrant and Britannia Pointe
Grand Limited Partnership.
</TABLE>
<PAGE>
<TABLE>
<C> <S>
10.12+ Master Services Agreement, dated November 15, 1999, between
Registrant and Artemis Pharmaceuticals GmbH.
10.13+** Research Collaboration and Technological Transfer Agreement, dated
September 14, 1999, between Registrant and Bristol-Myers Squibb.
10.14+ Corporate Collaboration Agreement, dated February 26, 1999, between
Registrant and Pharmacia & Upjohn AB.
10.15+ Amendment to Corporate Collaboration Agreement, dated October, 1999,
between Registrant and Pharmacia & Upjohn AB.
10.16+ Asset Purchase Agreement, dated July 11, 1999, between Registrant and
MetaXen/Xenova.
10.17+ Employment Agreement, dated September 13, 1996, between Registrant
and George Scangos, Ph.D.
10.18+ Employment Agreement, dated April 14, 1997, between Registrant and
Geoffrey Duyk, M.D., Ph.D.
10.19+ Employment Agreement, dated October 19, 1999, between Registrant and
Glen Y. Sato, Chief Financial Officer and Vice President of Legal
Affairs.
23.1+ Consent of Independent Accountants (Exelixis).
23.2+ Consent of Independent Accountants (MetaXen).
23.3* Consent of Cooley Godward LLP (included in Exhibit 5.1).
24.1+ Power of Attorney (contained on signature page).
27.1+ Financial Data Schedule.
</TABLE>
- --------
+ Previously filed.
* To be filed by amendment.
** Filed herewith.
+ Confidential treatment requested for certain portions of this exhibit.
<PAGE>
EXHIBIT 1.1
Exelixis, Inc.
Common Stock
______
Underwriting Agreement
----------------------
___________, 2000
Goldman, Sachs & Co.,
Credit Suisse First Boston Corporation
SG Cowen Securities Corporation
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Exelixis, Inc., a Delaware corporation (the "Company"), proposes, subject
to the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of ........ shares
(the "Firm Shares") and, at the election of the Underwriters, up to ........
additional shares (the "Optional Shares") of Common Stock ("Stock") of the
Company (the Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof being collectively called the "Shares").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-....) (the "Initial
Registration Statement") in respect of the Shares has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such form; other
than a registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the
knowledge of the Company, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a
<PAGE>
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; and such final prospectus, in
the form first filed pursuant to Rule 424(b) under the Act, is hereinafter
called the "Prospectus";
(b) No order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder, and did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman, Sachs &
Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto, and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(d) The Company has not sustained since the date of the latest audited
financial statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any change in the capital stock or long-term debt of the Company or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, management, financial position,
stockholders' equity or results of operations of the Company, otherwise than as
set forth or contemplated in the Prospectus;
(e) The Company has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by them,
in each case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company; and any real property and buildings held under
lease by the Company are held by it under valid, subsisting and enforceable
leases with such exceptions as
2
<PAGE>
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company;
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so qualified
in any such jurisdiction;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus;
(h) The Shares have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and validly
issued and fully paid and non-assessable and will conform to the description of
the Stock contained in the Prospectus;
(i) The issue and sale of the Shares by the Company and the compliance by
the Company with all of the provisions of this Agreement and the consummation of
the transactions herein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions contemplated
by this Agreement, except the registration under the Act of the Shares and such
consents, approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters;
(j) The Company is not in violation of its Certificate of Incorporation or
By-laws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other material agreement or
instrument to which it is a party or by which it or any of its properties may be
bound;
(k) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock, under the captions "Business-Corporate
Collaborations", "Business--Relationship with Artemis", "Management-Board
Composition", "Management-Board Committees", "Management-Employee Benefit
Plans", "Management-Change in Control Agreements and Employment Agreements",
"Certain Transactions" and "Underwriting", insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(l) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of which any
property of the Company is the
3
<PAGE>
subject which, if determined adversely to the Company, would individually or in
the aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of operations
of the Company; and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others;
(m) Except as disclosed in the Prospectus and to the best knowledge of the
Company, the Company owns or has valid, binding and enforceable licenses or
other rights to use, or believes that it can acquire on reasonable terms rights
to use, any patents, trademarks, trade names, service marks, service names,
copyrights and other proprietary intellectual property rights ("Intellectual
Property") necessary to conduct the business of the Company in the manner in
which it is being conducted, without any conflict with the rights of others,
except for such conflicts as do not and will not have a material adverse effect
on the business, management, the current or future consolidated financial
position, business prospects, stockholders' equity or results of operations of
the Company; the information contained in the Registration Statement and
Prospectus concerning patents issued to, or patent applications filed on behalf
of, the Company is accurate in all material respects; and, except as described
in the Prospectus, the Company has not received any notice from any other person
of infringement of or conflict with (and knows of no such infringement of or
conflict with) asserted rights of others with respect to any Intellectual
Property or any trade secrets, proprietary information, inventions, know-how,
processes and procedures owned or used by or licensed to the Company, which if
determined adversely to the Company would, individually or in the aggregate,
have a material adverse effect on the business, management, the current or
future consolidated financial position, business prospects, stockholders' equity
or results of operations of the Company;
(n) The Company has no subsidiaries;
(o) The Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company", as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(p) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company, are independent public accountants as required by the
Act and the rules and regulations of the Commission thereunder; and
(q) The Company has reviewed its operations and any third parties with
which the Company has a material relationship to evaluate the extent to which
the business or operations of the Company has been or will be affected by the
Year 2000 Problem. As a result of such review, the Company has no reason to
believe, and does not believe, that the Year 2000 Problem has had or will have a
material adverse effect on the business, management, the current or future
consolidated financial position, business prospects, stockholders' equity or
results of operations of the Company has resulted or will result in any material
loss or interference with the Company's business or operations. The "Year 2000
Problem" as used herein means any significant risk that computer hardware or
software used in the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind is not functioning or will not
function, in the case of dates or time periods occurring after December 31,
1999, function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to
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purchase from the Company, at a purchase price per share of $................,
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares as provided below, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the purchase price per share set forth in clause (a) of this Section 2, that
portion of the number of Optional Shares as to which such election shall have
been exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to ................... Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
sales of shares in excess of the number of Firm Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless you and the Company otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company shall be delivered by or on behalf of the Company to
Goldman, Sachs & Co., through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to Goldman, Sachs & Co.
at least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Shares, 9:30 a.m., New York City time, on ............., 2000 or
such other time and date as Goldman, Sachs & Co. and the Company may agree upon
in writing, and, with respect to the Optional Shares, 9:30 a.m., New York City
time, on the date specified by Goldman, Sachs & Co. in the written notice given
by Goldman, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
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(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(j) hereof, will be delivered at the offices of Cooley
Godward LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California
94306-2155 (the "Closing Location"), and the Shares will be delivered at the
Designated Office, all at such Time of Delivery. A meeting will be held at the
Closing Location at 3:00 p.m., California time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request, and, if the delivery of a prospectus is required
at any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Shares and if at
such time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the Prospectus
in order to comply with the Act, to notify you and
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upon your request to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as you
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder any
securities of the Company that are substantially similar to the Shares,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock option
plans or agreements described in the Prospectus and existing on, or upon the
conversion or exchange of convertible or exchangeable securities outstanding as
of, the date of this Agreement), without your prior written consent;
(f) To furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), to make available to its stockholders consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Shares on the Nasdaq
National Market;
(j) To file with the Commission such information on Form 10-Q or Form 10-K
as may be required by Rule 463 under the Act; and
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(k) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky survey (not to
exceed $10,000; provided that such amount does not include applicable filing
fees) (iv) all fees and expenses in connection with listing the Shares on the
Nasdaq National Market; (v) the filing fees incident to, and the reasonable fees
and disbursements of counsel for the Underwriters in connection with, securing
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Shares (not to exceed $15,000); (vi) the cost of
preparing stock certificates; (vii) the cost and charges of any transfer agent
or registrar; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such written opinion or opinions, dated such Time of
Delivery, with respect to the matters covered
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in paragraphs (i), (ii), and (vii) of subsection (c) below as well as such
other related matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Cooley Godward LLP, counsel for the Company, shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex
II(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority to own
its properties and conduct its business as described in the
Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus under "Description of Capital Stock", and all of
the issued and outstanding shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery)
have been duly and validly authorized and issued and are fully paid
and non-assessable; and the Shares conform to the description of
the Stock contained in the Prospectus;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of California and, to the best of such counsel's
knowledge, does not own or lease properties or conduct any business
so as to require such qualification and is subject to no material
liability or disability by reason of failure to be so qualified in
any other jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall state
that they believe that both you and they are justified in relying
upon such opinions and certificates);
(iv) To the best of such counsel's knowledge, the Company has
no subsidiaries;
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company is a party or of which any
property of the Company is the subject which, if determined
adversely to the Company, would individually or in the aggregate
have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The issue and sale of the Shares being delivered at such
Time of Delivery by the Company and the compliance by the Company
with all of the provisions of this Agreement and the consummation
of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement
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or other agreement or instrument filed as an exhibit to the
Registration Statement, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its
properties (other than the rules and regulations of the NASD and
state securities and Blue Sky laws, as to which such counsel need
express no opinion);
(viii) No consent, approval, authorization, order, registration
or qualification of or with any court, governmental agency or body
is required for the issue and sale of the Shares or the
consummation by the Company of the transactions set forth in this
Agreement, except the registration under the Act of the Shares, and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky laws or the rules and regulations of the NASD in connection
with the purchase and distribution of the Shares by the
Underwriters;
(ix) The Company is not in violation of its Certificate of
Incorporation or By-laws;
(x) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock, under the captions
"Management - Board Composition", "Management - Board Committees",
"Management - Employee Benefit Plans", "Management - Change in
Control Agreements and Employment Agreements", "Certain
Transactions" and "Underwriting", insofar as they purport to
summarize legal matters, documents or proceedings referred to
therein, are accurate and fairly summarize in all material respects
the information set forth therein;
(xi) The Company is not an "investment company", as such term
is defined in the Investment Company Act;
(xii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company
prior to such Time of Delivery (other than the financial
statements, related schedules and other financial data contained or
referred to therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder.
In addition, such opinion shall contain a statement to the
effect that such counsel has participated in conferences with
directors, officers and other representatives of the Company,
representatives of the independent public accountants,
representatives of the Underwriters and representatives of counsel
for the Underwriters, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were
discussed. Such counsel has not independently verified and
accordingly, is not confirming and does not assume responsibility
for the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, except for those referred
to in the opinion in accordance with subsection (x) of this Section
7(c). On the basis of the foregoing, nothing has come to such
counsel's attention that lead such counsel to believe (i) that, as
of its effective date, the Registration Statement (other than the
financial
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statements, related schedules and other financial data contained or
referred to therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) that, as of its date or as
of such Time of Delivery, the Prospectus (other than the financial
statements, related schedules and other financial data contained or
referred to therein, as to which such counsel need express no opinion)
contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and they do
not know of any amendment to the Registration Statement required to be
filed or of any contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or required to
be described in the Registration Statement or the Prospectus which are
not filed or described as required;
(d) __________________, patent counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) To the knowledge of such counsel, the Company owns or has
valid, binding and enforceable licenses or other rights to use any
patents, trademarks, trade names, service marks, service names,
copyrights and other intellectual property rights necessary to conduct
the business of the Company in the manner in which it is being
conducted;
(ii) To the knowledge of such counsel, the Company has not
received notice of any claim of infringement of any patent which has
not resulted in a negotiated license, except as set forth in such
opinion; and
(iii) Such counsel has reviewed the Registration Statement and
Prospectus and any further amendments and supplements thereto made by
the Company prior to such Time of Delivery, and insofar as they
concern patents, patent rights or patent licenses, such counsel has no
reason to believe that either the Registration Statement or the
Prospectus or any such further amendment or supplement thereto
contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein not misleading;
In rendering such opinion, such counsel may state that insofar as such
opinion relates to factual matters, it is based upon representations made to
such counsel by officers of the Company, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such representations. The Underwriters may, at their sole discretion and at
any time prior to the Time of Delivery, modify the matters requested above in
such opinion of patent counsel for the Company.
(e) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the
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effect set forth in Annex I hereto (the executed copy of the letter delivered
prior to the execution of this Agreement is attached as Annex I(a) hereto and
a draft of the form of letter to be delivered on the effective date of any
post-effective amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex I(b) hereto);
(f) (i) The Company shall not have sustained since the date of the latest
audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of
which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(g) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the
Company's debt securities;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the Nasdaq National Market;
(ii) a suspension or material limitation in trading in the Company's
securities on the Nasdaq National Market; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York or
California State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the terms
and in the manner contemplated in the Prospectus;
(i) The Shares to be sold at such Time of Delivery shall have been duly
listed for quotation on the Nasdaq National Market;
(j) The Company has obtained and delivered to the Underwriters executed
copies of an agreement from [list appropriate stockholders of the Company],
substantially to the effect set forth in Subsection 5(e) hereof in form and
substance satisfactory to you;
(k) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
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(l) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (e) of this Section and as to such other matters as
you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Goldman, Sachs & Co.
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
13
<PAGE>
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue
14
<PAGE>
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after
such default by any Underwriter you do not arrange for the purchase of such
Shares, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Shares on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Shares, or the Company notifies you that it has so arranged for
the purchase of such Shares, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to
15
<PAGE>
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 32 Old Slip, 21st Floor, New York, New York 10005, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16
<PAGE>
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Representatives plus one for
each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Exelixis, Inc.
By: _________________________
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
SG Cowen Securities Corporation
By: __________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
17
<PAGE>
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter To be Purchased Exercised
----------- --------------- ------------------
Goldman, Sachs & Co......................
Credit Suisse First Boston Corporation...
SG Cowen Securities Corporation..........
----------- ----------------
Total.........................
=========== ================
18
<PAGE>
ANNEX I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
FOR REGISTRATION STATEMENTS ON FORM S-1
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related published rules and regulations thereunder; and, if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited consolidated interim financial statements, selected financial
data, pro forma financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives") and are
attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus as
indicated in their reports thereon copies of which are attached hereto and
on the basis of specified procedures including inquiries of officials of
the Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention
that cause them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the related published
rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal years which
were included or incorporated by reference in the Company's Annual Reports
on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with
<PAGE>
the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included in the Prospectus, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the related published rules and regulations, or (ii)
any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows
included in the Prospectus for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements
included in the Prospectus;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived any
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with the
basis for the audited consolidated financial statements included
in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Prospectus) or any increase in the consolidated long-term debt
of the Company and its subsidiaries, or any decreases in
consolidated net
F-2
<PAGE>
current assets or stockholders' equity or other items specified
by the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
the comparable period of the preceding year and with any other
period of corresponding length specified by the Representatives,
except in each case for decreases or increases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
F-3
<PAGE>
EXHIBIT 10.13
RESEARCH COLLABORATION AND
TECHNOLOGY TRANSFER AGREEMENT
BETWEEN
EXELIXIS PHARMACEUTICALS, INC.
AND
BRISTOL-MYERS SQUIBB COMPANY
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>
Table Of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
1. Definitions........................................................................ 1
1.1 "Abandoned Target"........................................................... 1
1.2 "Affiliate".................................................................. 1
1.3 "Analogue"................................................................... 2
1.4 "Annual FTE Rate"............................................................ 2
1.5 "Back-Up Compound"........................................................... 2
1.6 "Biotherapeutic Product"..................................................... 2
1.7 "BMS Compound"............................................................... 2
1.8 "BMS Core Technology"........................................................ 3
1.9 "BMS Product"................................................................ 3
1.10 "Candidate Target"........................................................... 3
1.11 "Collaboration".............................................................. 3
1.12 "Collaboration Compound"..................................................... 3
1.13 "Compound Class"............................................................. 3
1.14 "Compound Product"........................................................... 4
1.15 "Conceptual Target".......................................................... 4
1.16 "Confirmed Target"........................................................... 4
1.17 "Controlled"................................................................. 4
1.18 "Core Technology Patents".................................................... 5
1.19 "Diagnostic Product"......................................................... 5
1.20 "Diligent Efforts"........................................................... 5
1.21 "Disclosed Target"........................................................... 5
1.22 "Exelixis Core Technology"................................................... 5
1.23 "Field"...................................................................... 5
1.24 "FlyTag Database"............................................................ 5
1.25 "FTE"........................................................................ 5
1.26 "Gene Product"............................................................... 5
1.27 "Improvement Inventions"..................................................... 6
1.28 "IND"........................................................................ 6
1.29 "Independent Research"....................................................... 6
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
i.
<PAGE>
Table Of Contents
(continued)
<TABLE>
<CAPTION>
Page
<S> <C>
1.30 "Information"................................................................ 6
1.31 "Joint Inventions"........................................................... 6
1.32 "Joint Management Team" or "JMT"............................................. 6
1.33 "Joint Patents".............................................................. 6
1.34 "Joint Scientific Committee" or "JSC"........................................ 6
1.35 "Known"...................................................................... 6
1.36 "Known Target"............................................................... 7
1.37 "Licensed Product"........................................................... 7
1.38 "Major Market"............................................................... 7
1.39 "Mammalian Disclosed Target"................................................. 7
1.40 "Mammalian Target"........................................................... 7
1.41 "Mode of Action Program"..................................................... 7
1.42 "NDA"........................................................................ 7
1.43 "Net Sales".................................................................. 7
1.44 "New Indication"............................................................. 9
1.45 "Novel Target"............................................................... 9
1.46 "Novel Target Patent"........................................................ 10
1.47 "Patent"..................................................................... 10
1.48 "Person"..................................................................... 10
1.49 "Pharmacogenomic Product".................................................... 10
1.50 "Phase III Clinical Trials".................................................. 10
1.51 "Pre-Associated Target"...................................................... 11
1.52 "Preclinical Lead Profile" or "PLP".......................................... 11
1.53 "Pre-existing Inventions".................................................... 11
1.54 "Product".................................................................... 11
1.55 "Product Target"............................................................. 11
1.56 "Pursued Disclosed Target"................................................... 12
1.57 "Quality Target"............................................................. 12
1.58 "Regulatory Approval"........................................................ 12
1.59 "Related Pathway"............................................................ 12
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
ii.
<PAGE>
Table Of Contents
(continued)
<TABLE>
<CAPTION>
Page
<S> <C>
1.60 "Related Target"............................................................. 12
1.61 "Remain(s) Confidential"..................................................... 13
1.62 "Research Plan".............................................................. 13
1.63 "Research Results"........................................................... 13
1.64 "Research Term".............................................................. 13
1.65 "Safety Compound"............................................................ 13
1.66 "Safety Product"............................................................. 13
1.67 "Safety Target".............................................................. 13
1.68 "Second Generation Product".................................................. 14
1.69 "Selected Target"............................................................ 14
1.70 "Sole Inventions"............................................................ 14
1.71 "Target"..................................................................... 14
1.72 "Technology Sharing Program"................................................. 14
1.73 "Third Party"................................................................ 14
1.74 "Transition Target".......................................................... 14
1.75 "Unlinked Related Target".................................................... 15
1.76 "Valid Claim"................................................................ 16
2. Management of the Collaboration.................................................... 16
2.1 Overall Management Structure.................................................. 16
2.2 Joint Management Team......................................................... 16
(a) Membership............................................................. 16
(b) Responsibilities....................................................... 16
(c) Determination of Certain Matters....................................... 17
2.3 Joint Scientific Committee.................................................... 17
(a) Membership............................................................. 17
(b) Responsibilities....................................................... 18
2.4 Meetings...................................................................... 18
2.5 Collaboration Guidelines...................................................... 18
3. Overview of the Mode of Action Program.............................................. 18
3.1 Goals......................................................................... 18
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
iii.
<PAGE>
Table Of Contents
(continued)
<TABLE>
<CAPTION>
Page
<S> <C>
3.2 Research Term................................................................ 18
3.3 Research Plans............................................................... 19
3.4 FTE Commitments.............................................................. 19
3.5 Conduct of Research.......................................................... 20
3.6 Records...................................................................... 20
3.7 Reports and Disclosure of Research Results................................... 20
3.8 Preserving Confidentiality of Certain Research Results....................... 21
4. Mode of Action Program............................................................ 21
4.1 Provision of BMS Compounds................................................... 21
4.2 Stage I - Feasibility Evaluation............................................. 22
4.3 Provision and Testing of Analogues........................................... 22
4.4 Stage II - Target Identification............................................. 22
4.5 Stage III - Identification of Candidate Targets.............................. 22
4.6 Collaborative Work........................................................... 23
4.7 Limitation on Exelixis Collaborative Work.................................... 23
4.8 Selection of Targets......................................................... 23
(a) Candidate Targets..................................................... 23
(b) Disclosed Targets..................................................... 25
4.9 Selected Target Diligence.................................................... 27
4.10 Other Diligence Obligations.................................................. 28
4.11 Target Abandonment........................................................... 28
4.12 Failure of Diligence......................................................... 28
4.13 Pursuit of New Indications for BMS Products.................................. 29
4.14 Exclusion Based on Use of Mammalian Targets that [*]......................... 30
4.15 Exelixis Exclusivity Obligations............................................. 31
4.16 Records...................................................................... 32
4.17 Reports...................................................................... 32
5. Technology Sharing Program........................................................ 32
5.1 Transfer of Exelixis Core Technology......................................... 32
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
iv.
<PAGE>
Table Of Contents
(continued)
<TABLE>
<CAPTION>
Page
<S> <C>
5.2 Transfer of BMS Core Technology; Transfer of Source Code; Error Corrections... 33
5.3 Technology Licenses To BMS.................................................... 37
5.4 Limitations on BMS License.................................................... 38
5.5 Technology Licenses To Exelixis............................................... 39
5.6 Limitations on Exelixis License............................................... 41
5.7 Provision of Training; Disclaimers............................................ 42
5.8 Non-Solicitation.............................................................. 43
6. Licenses and Related Rights........................................................ 43
6.1 Licenses to BMS............................................................... 43
(a) Research Results....................................................... 43
(b) Target Patents......................................................... 43
(c) Novel Target Patents................................................... 44
6.2 License Limitations and Retained Rights; Retained Rights Restrictions......... 44
(a) License Limitations and Retained Rights................................ 44
(b) Retained Rights Restrictions........................................... 44
6.3 Licenses to Exelixis.......................................................... 44
(a) Outside of Field....................................................... 44
(b) Abandoned Targets...................................................... 45
(c) Breach of Diligence Obligations........................................ 46
6.4 Right of First Negotiation.................................................... 46
7. Exclusivity........................................................................ 47
7.1 BMS........................................................................... 47
7.2 Exelixis...................................................................... 47
7.3 BMS License to [*]............................................................ 48
8. Compensation....................................................................... 49
8.1 Technology Access Fee......................................................... 49
8.2 Research Support.............................................................. 49
8.3 Milestone Payments for Selected Targets and Pursued Disclosed Targets......... 49
8.4 Milestone Payments for Compound Products...................................... 49
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
v.
<PAGE>
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(continued)
<TABLE>
<CAPTION>
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<S> <C>
(a) Novel Target............................................................. 49
(b) Unlinked Related Target.................................................. 50
(c) Known Target............................................................. 50
8.5 Milestone Payments for Safety Products.......................................... 51
8.6 Milestone Payments for New Indications for BMS Products......................... 51
8.7 Milestone Payments for Gene Products............................................ 51
(a) Novel Target............................................................. 51
(b) Unlinked Related Target.................................................. 51
8.8 Milestone Payments for Biotherapeutic Products.................................. 52
(a) Novel Target............................................................. 52
(b) Unlinked Related Target.................................................. 52
8.9 Milestone Payments for Diagnostic Products and Pharmacogenomic.................. 53
(a) Novel Target............................................................. 53
(b) Unlinked Related Target.................................................. 53
8.10 Milestone Payments for Back-Up Compounds........................................ 53
8.11 Milestone Payments for [*] Products............................................. 54
8.12 Royalty Payments for Compound Products.......................................... 54
(a) Novel Target............................................................. 54
(b) Unlinked Related Target.................................................. 54
(c) Known Target............................................................. 54
(d) Transition Target........................................................ 55
8.13 Royalty Payments for Safety Products............................................ 55
8.14 Royalty Payments for Gene Products.............................................. 55
(a) Novel Target............................................................. 55
(b) Related Target........................................................... 55
8.15 Royalty Payments for Biotherapeutic Products.................................... 55
(a) Novel Target............................................................. 55
(b) Unlinked Related Target.................................................. 56
(c) Known Target............................................................. 56
8.16 Royalty Payments for Diagnostic Products........................................ 56
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
vi.
<PAGE>
Table Of Contents
(continued)
<TABLE>
<CAPTION>
Page
<S> <C>
(a) Novel Target........................................................... 56
(b) Unlinked Related Target................................................ 56
8.17 Royalty Payments for Pharmacogenomic Products................................. 56
(a) Novel Target........................................................... 56
(b) Unlinked Related Target................................................ 56
8.18 Fixed Royalty Rates and Final Royalty Payments................................ 57
8.19 Term of Royalties............................................................. 57
8.20 Quarterly Royalty Payment and Reports......................................... 57
8.21 Payment Method................................................................ 58
8.22 Taxes......................................................................... 58
8.23 Blocked Currency.............................................................. 58
8.24 Sublicenses................................................................... 58
8.25 Foreign Exchange.............................................................. 58
8.26 Records; Inspection........................................................... 58
9. Intellectual Property............................................................... 59
9.1 Ownership..................................................................... 59
9.2 Disclosure.................................................................... 59
9.3 Patent Prosecution and Maintenance; Abandonment............................... 59
(a) Pre-existing, Sole and Improvement Inventions.......................... 59
(b) Joint Inventions....................................................... 60
(c) Selected and Product Target Exelixis Sole Inventions................... 60
(d) Pursued Disclosed Target Exelixis Sole Inventions...................... 62
(e) Novel Target Exelixis Sole Inventions.................................. 62
(f) BMS Patents Licensed to Exelixis....................................... 63
(g) Cooperation............................................................ 64
9.4 Enforcement of Patent Rights.................................................. 64
9.5 Copyright Registrations....................................................... 66
10. Confidentiality.................................................................... 66
10.1 Nondisclosure of Confidential Information..................................... 66
10.2 Exceptions.................................................................... 67
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
vii.
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(continued)
<TABLE>
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10.3 Authorized Disclosure........................................................ 67
10.4 Termination of Prior Agreements.............................................. 68
10.5 Publicity.................................................................... 68
10.6 Publications................................................................. 68
11. Term and Termination............................................................... 69
11.1 Term......................................................................... 69
11.2 Termination for Material Breach.............................................. 69
11.3 Change in Control............................................................ 70
11.4 Effect of Termination; Survival.............................................. 71
12. Representations and Covenants...................................................... 73
12.1 Mutual Authority............................................................. 73
12.2 Rights in Technology......................................................... 73
12.3 Performance by Affiliates.................................................... 73
12.4 Exelixis Representations and Warranties...................................... 74
12.5 BMS Representations and Warranties........................................... 74
13.1 Mutual Indemnification....................................................... 75
13.2 Indemnification by BMS....................................................... 76
13.3 Indemnification by Exelixis.................................................. 76
13.4 Conditions to Indemnification................................................ 77
13.5 Limitation of Liability...................................................... 78
13.6 Core Technology Disclaimer................................................... 78
13.7 Collaboration Disclaimer..................................................... 78
14. Miscellaneous...................................................................... 79
14.1 Dispute Resolution........................................................... 79
14.2 Governing Law................................................................ 80
14.3 Certain Disputes............................................................. 80
14.4 Entire Agreement; Amendment.................................................. 80
14.5 Export Control............................................................... 80
14.6 Bankruptcy................................................................... 81
14.7 Force Majeure................................................................ 82
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
viii.
<PAGE>
Table Of Contents
(continued)
<TABLE>
<CAPTION>
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14.8 Notices..................................................................... 82
14.9 Consents Not Unreasonably Withheld or Delayed............................... 82
14.10 Maintenance of Records...................................................... 83
14.11 United States Dollars....................................................... 83
14.12 No Strict Construction...................................................... 83
14.13 Assignment.................................................................. 83
14.14 Electronic Data Interchange................................................. 83
14.15 Counterparts................................................................ 83
14.16 Further Actions............................................................. 83
14.17 Severability................................................................ 83
14.18 Ambiguities................................................................. 83
14.19 Headings.................................................................... 84
14.20 No Waiver................................................................... 84
</TABLE>
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
ix.
<PAGE>
Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
RESEARCH COLLABORATION AND
TECHNOLOGY TRANSFER AGREEMENT
This Research Collaboration and Technology Transfer Agreement (the
"Agreement") is made and entered into as of September 14, 1999 (the "Effective
Date") by and between Exelixis Pharmaceuticals, Inc., a Delaware corporation
having its principal place of business at 260 Littlefield Avenue, South San
Francisco, California, USA 94080 ("Exelixis"), and Bristol-Myers Squibb Company,
a Delaware corporation having its principal place of business at Route 206 and
Province Line Road, Princeton, NJ 08543 ("BMS"). Exelixis and BMS are sometimes
referred to herein individually as a "Party" and collectively as the "Parties."
Recitals
A. BMS is a multinational health care company that has expertise and
capability in developing and marketing human pharmaceuticals and has research
and development programs in the area of medicinal chemistry.
B. Exelixis is a biotechnology company that has expertise and proprietary
technology relating to genetic model systems, genomics and computational biology
and is applying such technology to discover and validate targets for drug
discovery in a variety of disease areas.
C. BMS and Exelixis desire to establish a research collaboration to apply
such Exelixis technology and expertise to the identification and
characterization of targets that mediate the effect of test compounds in model
organisms, and to provide for the development and commercialization, based on
such research, of novel prophylactic, therapeutic and diagnostic products or new
indications or expanded labeling for existing products.
D. BMS and Exelixis desire to establish a technology sharing program in
which BMS will transfer to Exelixis its proprietary technology that relates to
its high throughput lead optimization technology, and Exelixis will transfer to
BMS its proprietary technology that relates to genetics and molecular biology in
C. elegans and Drosophila, as more fully set forth below.
Now, Therefore, the Parties agree as follows:
1. Definitions
The following terms shall have the following meanings as used in this
Agreement:
1.1 "Abandoned Target" means (a) any Candidate Target or Disclosed Target
that is not selected by BMS as a Selected Target, Pursued Disclosed Target or
Product Target within the applicable time period set forth in Section 4.8,
except as otherwise provided in Section 4.8(a)(v)
1.
<PAGE>
or (b)(v), or (b) any Selected Target or Pursued Disclosed Target that is
abandoned by BMS pursuant to Section 4.11.
1.2 "Affiliate" means, with respect to a particular Party, another Person
that controls, is controlled by or is under common control with such Party. For
the purposes of the definition in this Section 1.2, the word "control"
(including, with correlative meaning, the terms "controlled by" or "under the
common control with") means the actual power, either directly or indirectly
through one or more intermediaries, to direct or cause the direction of the
management and policies of such entity, whether by the ownership of at least
fifty percent (50%) of the voting stock of such entity, or by contract or
otherwise.
1.3 "Analogue" means a BMS Compound that is structurally and functionally
similar to a particular BMS Compound and is provided to Exelixis by BMS pursuant
to Section 4.3 as a substitute for such BMS Compound.
1.4 "Annual FTE Rate" means the amount to be paid over one (1) year by BMS
to Exelixis to support one (1) FTE. The Annual FTE Rate will be [ * ] per year
until the second anniversary of the Effective Date. Starting on the second
anniversary of the Effective Date and continuing on each subsequent anniversary
(if any) during the Research Term, this rate will be adjusted for Research
support provided by BMS hereunder after such date by the percentage change, if
any, in the Consumer Price Index described below as of the first day of the
calendar month on or immediately preceding such adjustment date as compared to
the index applicable to the most recent adjustment prior adjustment date (August
1, 1999 shall be the reference date for the first adjustment). The index source
will be the Consumer Price Index for All Urban Consumers - San Francisco Area,
published by the Bureau of Labor Statistics of the United States Department of
Labor (or successor agency). Should an index covering the San Francisco area not
then be available, then the national index will be used as the reference.
1.5 "Back-Up Compound" means, with respect to a particular Collaboration
Compound or Licensed Product (the "Parent"), any other Collaboration Compound or
Licensed Product that is intended to directly inhibit, directly activate or
otherwise directly modulate the same Mammalian Target as such Parent, and that
is developed by or on behalf of BMS or its Affiliate or sublicensee as a
potential replacement for the Parent in the event that development of the Parent
does not result in Regulatory Approval for the Parent or, in the case of a
Collaboration Compound, Regulatory Approval for a Compound Product comprising or
incorporating such Collaboration Compound. For clarity, it is understood that
the term "Back-Up Compound" shall not include new formulations, presentations,
salts, or modes of delivery of the Collaboration Compound or other active
ingredient contained in the Parent.
1.6 "Biotherapeutic Product" means (a) any therapeutic or prophylactic
product for treatment or prevention of diseases or conditions in humans that
comprises or incorporates (i) an antibody against a Mammalian Target, or (ii) an
antisense compound based upon a Mammalian Target sequence, or (b) a gene therapy
product based upon the sequence of a Mammalian Target.
1.7 "BMS Compound" is a molecule that is provided to Exelixis by BMS under
a code name pursuant to Section 4.1 or 4.3, such that BMS does not disclose the
identity or structure of such molecule to Exelixis. It is understood that "BMS
Compounds" may include
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
2.
<PAGE>
compounds in the public domain or which are proprietary to third parties, in
addition to BMS proprietary compounds.
1.8 "BMS Core Technology" means the proprietary BMS know-how, Patents, BMS
Software, drawings, blueprints, materials and Information described on Exhibit B
hereto (and any copyrights covering any of the foregoing know-how, software or
other works included on Exhibit B) and including all Improvement Inventions to
the foregoing that are Controlled by BMS or its Affiliate, the Bristol-Myers
Squibb Pharmaceutical Research Institute, during the Research Term. "BMS
Software" shall mean all software in any stage of development, whether in object
or source code, and all documentation relating thereto provided by BMS, and
including all copies, compilations, adaptations, translations, and derivative
works thereof made by or on behalf of BMS or its Affiliate, the Bristol-Myers
Squibb Pharmaceutical Research Institute. For purposes of the foregoing,
"derivative works" means any computer program that may be developed containing
any part of the software, regardless of the form of the resulting code, the
media it is carried on, or its intended use. For sake of clarity, "BMS Core
Technology" excludes all trademarks.
1.9 "BMS Product" means a product, other than a Licensed Product, that
contains a BMS Compound that is Controlled by BMS or its Affiliates and is
subject to development or has already received Regulatory Approval at the time
BMS provides such BMS Compound to Exelixis.
1.10 "Candidate Target" means any Target (other than a Disclosed Target)
for which (a) there is sufficient (as determined by the JSC) [ * ], and (b)
Exelixis has conducted a [ * ] mammalian orthologues.
1.11 "Collaboration" means all the research- or development-related
activities either (a) performed by or on behalf of Exelixis or BMS pursuant to
the Mode of Action Program under this Agreement, or (b) conducted by or on
behalf of BMS or its Affiliate during the Research Term based in material part
upon Exelixis-generated Research Results disclosed to BMS hereunder.
1.12 "Collaboration Compound" means any molecule that (a) has a molecular
weight less than or equal to [ * ]; (b) has the ability to inhibit, activate or
otherwise modulate the activity of a Mammalian Target (other than a Confirmed
Target) or its encoded protein; and (c) such ability is identified by or on
behalf of BMS or its Affiliate or sublicensee through the use to any material
extent of a Mammalian Target (other than a Confirmed Target) or any information
relating to a Mammalian Target (other than a Confirmed Target) developed by or
on behalf of BMS or its Affiliate or sublicensee by material use of such
Mammalian Target, the DNA sequence relating thereto, or any other Research
Results disclosed to BMS hereunder that (i) directly relate to such Mammalian
Target (other than a Confirmed Target) or the Target to which such Mammalian
Target is related, and (ii) Remain Confidential at the time of such use,
provided that the foregoing definition is subject to the limitations in Section
4.15.
1.13 "Compound Class" means any compound having the same active
substructure (or active substructures, if more than one exist) of the BMS
Compound used in identifying a giving Target.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.
<PAGE>
1.14 "Compound Product" means any therapeutic or prophylactic product for
treatment of humans that comprises or incorporates a Collaboration Compound,
including any formulation or mode of delivery thereof.
1.15 "Conceptual Target" means:
(a) a mammalian orthologue of a Selected Target, which orthologue (i)
is identified by or on behalf of Exelixis pursuant to its work under the Mode of
Action Program or by or on behalf of BMS or its Affiliate or sublicensee through
the material use of such Selected Target or DNA sequence information relating
thereto, or any other Research Results that Remain Confidential at the time of
such use by BMS, and (ii) is, at the time of identification by BMS or at the
time of communication of same by Exelixis to BMS (if identified by Exelixis),
[ * ]; or
(b) a Related Target that, at the time of identification of such
Related Target by BMS, is [ * ].
1.16 "Confirmed Target" means a mammalian orthologue of a Selected Target,
which orthologue (a) is identified by or on behalf of Exelixis pursuant to its
work under the Mode of Action Program [ * ].
1.17 "Controlled" means, with respect to any gene, protein, compound,
material, software, Information or intellectual property right, that the Party
owns or has a license to such gene, protein, compound, material, software,
Information or intellectual property right and has the ability to grant to the
other Party access, a license or a sublicense (as applicable) to such gene,
protein, compound, material, software, Information or intellectual property
right as provided for herein without violating the terms of any agreement or
other arrangements with any Third Party existing at the time such Party would be
first required hereunder to grant the other Party such access, license or
sublicense.
1.18 "Core Technology Patents" means, with respect to a particular Party,
those Patents covering the composition of matter or use of such Party's Core
Technology, or any part or aspect thereof.
1.19 "Diagnostic Product" means a product that facilitates identification
of patients having a particular disease or having a predisposition to a
particular disease, and/or monitors the prognosis or progression of a disease in
a patient, by the detection of either (i) sequence differences in different
alleles of a Mammalian Target, or (ii) the presence or absence of a certain
Mammalian Target, or (iii) the presence or absence of the protein product of a
certain Mammalian Target.
1.20 "Diligent Efforts" means the carrying out of obligations or tasks in a
manner consistent with the efforts a Party devotes to a product or a research,
development or marketing project of similar market potential, profit potential
or strategic value resulting from its own research efforts, based on conditions
then prevailing.
1.21 "Disclosed Target" means any [ * ] to BMS.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
4.
<PAGE>
1.22 "Exelixis Core Technology" means the proprietary Exelixis know-how,
Patents, software, the FlyTag Database, materials and Information described on
Exhibit C hereto (and any copyrights covering any of the foregoing know-how,
software or other works included on Exhibit C) and including all Improvement
Inventions to the foregoing owned or Controlled by Exelixis and its Affiliates
during the Research Term (but excluding any improvements or additions to the
FlyTag Database made after the Effective Date other than corrections of errors
in the sequence information that are made or determined by Exelixis). For sake
of clarity, "Exelixis Core Technology" excludes all trademarks.
1.23 "Field" means the treatment, prophylaxis and diagnosis of disease in
humans.
1.24 "FlyTag Database" means the sequence data within the database
maintained by Exelixis under the name "FlyTag" as of the Effective Date in the
form previously released by Exelixis to a contractual partner, as further
described in Exhibit C.
1.25 "FTE" means the equivalent of one researcher working full time (but
including standard vacation) for or on behalf of Exelixis (or BMS, as
applicable) for a twelve (12)-month period.
1.26 "Gene Product" means any therapeutic or prophylactic product for
treatment of humans that comprises or incorporates the gene product of a
Mammalian Target or a mutein or fusion protein based thereon.
1.27 "Improvement Inventions" means any and all inventions, developments,
results, know-how and other Information, and all intellectual property relating
thereto, that are made or authored during the Research Term solely by employees
or agents of a Party or jointly by employees or agents of both Parties, are
improvements to or modifications of the Exelixis Core Technology or the BMS Core
Technology, and are Controlled by the applicable Party.
1.28 "IND" means an Investigational New Drug Application filed with the
United States Food and Drug Administration, or its foreign equivalent in any
country.
1.29 "Independent Research" means any and all research that is conducted by
Exelixis outside the scope of this Agreement either independently or pursuant to
an agreement with a Third Party, but provided that such research: (a) is not in
conflict with Articles 6 and 7, (unless otherwise permitted by Sections 6.3 and
6.4), and (b) does not use any Confidential Information of BMS or, except where
expressly permitted hereunder, any Research Results relating directly to
Selected Targets, Pursued Disclosed Targets, or Mammalian Targets. For clarity,
it is understood that research using any Information that Exelixis generates
without reliance on the Research Results or BMS Confidential Information
(including Information licensed to Exelixis by a Third Party or that is publicly
available), even if such Information is similar or identical to the Research
Results, shall be deemed Independent Research.
1.30 "Information" means inventions, information, results and data of any
type whatsoever, in any tangible or intangible form whatsoever, including
without limitation, databases, inventions, practices, methods, techniques,
specifications, formulations, formulae, knowledge, know-how, skill, experience,
test data including pharmacological, biological,
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
5.
<PAGE>
chemical, biochemical, toxicological and clinical test data, analytical and
quality control data, stability data, studies and procedures, and patent and
other legal information or descriptions.
1.31 "Joint Inventions" means any and all inventions, developments,
results, know-how and other Information, and all intellectual property relating
thereto, that are made jointly by employees or agents of both Parties pursuant
to work conducted in the Collaboration.
1.32 "Joint Management Team" or "JMT" means the committee described in
Section 2.2.
1.33 "Joint Patents" means all Patents and other intellectual property
rights claiming or covering or appurtenant to Joint Inventions.
1.34 "Joint Scientific Committee" or "JSC" means the committee described in
Section 2.3.
1.35 "Known" means, as used in the phrase "Known to be a target for drug
discovery for the disease area of interest," that BMS can demonstrate that, at
the applicable time:
(a) [ * ], or
(b) based on information that was publicly available at such
applicable time, [ * ].
1.36 "Known Target" means: (a) [ * ] are excluded from the definition of
"Known Target."
1.37 "Licensed Product" means any Compound Product, Safety Product, Gene
Product, Biotherapeutic Product, Diagnostic Product or Pharmacogenomics Product.
1.38 "Major Market" means the United States, Canada, the United Kingdom,
Japan, France, Germany, Italy or Spain.
1.39 "Mammalian Disclosed Target" is a mammalian orthologue of a Pursued
Disclosed Target, which orthologue is identified by or on behalf of Exelixis
pursuant to work under the Mode of Action Program or [ * ] at the time of such
use by BMS.
1.40 "Mammalian Target" means any [ * ] (at any time).
1.41 "Mode of Action Program" means that collaborative research program
undertaken by the Parties pursuant to Articles 3 and 4.
1.42 "NDA" means a New Drug Application, Biologics License Application or
Product License Application filed with the United States Food and Drug
Administration in conformance with applicable laws and regulations, or the
foreign equivalent of any such application in any other country.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
6.
<PAGE>
1.43 "Net Sales" means the amount invoiced or otherwise billed by BMS or
its Affiliate or licensee for sales or other commercial disposition of a
Licensed Product to a Third Party purchaser, less the following to the extent
included in such billing or otherwise actually allowed or incurred with respect
to such sales: (i) discounts, including cash, trade and quantity discounts,
price reduction programs, retroactive price adjustments with respect to sales of
a product, charge-back payments and rebates granted to managed health care
organizations or to federal, state and local governments (or their respective
agencies, purchasers and reimbursers) or to trade customers, including but not
limited to, wholesalers and chain and pharmacy buying groups; (ii) credits or
allowances actually granted upon rejections or returns of Licensed Products,
including for recalls or damaged goods; (iii) freight, postage, shipping and
insurance charges actually allowed or paid for delivery of Licensed Products, to
the extent billed; (iv) customs duties, surcharges and other governmental
charges incurred in connection with the exportation or importation of a Licensed
Product; (v) bad debts relating to sales of Licensed Products that are actually
written off by BMS in accordance with generally accepted accounting principles,
consistently applied, during the applicable royalty calculation period, and (vi)
taxes, duties or other governmental charges levied on, absorbed or otherwise
imposed on sale of Licensed Products, including without limitation value-added
taxes, or other governmental charges otherwise measured by the billing amount,
when included in billing, as adjusted for rebates and refunds, but specifically
excluding taxes based on net income of the seller; provided that all of the
foregoing deductions are calculated in accordance with generally accepted
accounting principles consistently applied throughout the party's organization.
Notwithstanding the foregoing, if any Licensed Product is sold under a
bundled or capitated arrangement with other BMS products, then, solely for the
purpose of calculating Net Sales for royalty purposes hereunder, any [ * ]
products sold within such bundled arrangement for the applicable accounting
period. In case of any dispute as to the [ * ], the determination of same shall
be calculated and certified by BMS' independent public accountants, whose
decision shall be binding.
A sale of a Licensed Product is deemed to occur upon the earliest of
invoicing or transfer of title in the Licensed Product to the Third Party
purchaser. In the event that BMS, after reasonable efforts, cannot calculate
accurately the Net Sales of a sublicensee in a particular country, the Parties
will meet and negotiate in good faith an appropriate means for calculating "Net
Sales" in such a situation.
For sake of clarity and avoidance of doubt, sales by BMS, its Affiliates or
sublicensees of a Licensed Product to a Third Party distributor of such Licensed
Product in a given country shall be considered a sale to a Third Party customer.
Any Licensed Products used (but not sold for consideration) for promotional or
advertising purposes or used for clinical or other research purposes shall not
be considered in determining Net Sales hereunder.
In the event a Licensed Product is sold as an end-user product consisting
of a combination of active functional elements or as a combined product and/or
service, Net Sales, for purposes of determining royalty payments on such
Licensed Product, shall be calculated by multiplying the Net Sales of the end-
user product and/or service by the fraction A over A+B, in which A is the gross
selling price of the Licensed Product portion of the end-user product and/or
service when such Licensed Product is sold separately during the applicable
accounting period in
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
7.
<PAGE>
which the sales of the end-user product were made, and B is the gross selling
price of the other active elements and/or service, as the case may be, of the
end-user product and/or service sold separately during the accounting period in
question. All gross selling prices of the elements of such end-user product
and/or service shall be calculated as the average gross selling price of the
said elements during the applicable accounting period for which the Net Sales
are being calculated. In the event that, in any country or countries, no
separate sale of either such above-designated Licensed Product or such above
designated elements of the end-user product and/or service are made during the
accounting period in which the sale was made or if gross retail selling price
for an active functional element, component or service, as the case may be,
cannot be determined for an accounting period, Net Sales allocable to the
Licensed Product in each such country shall be determined by mutual agreement
reached in good faith by the Parties prior to the end of the accounting period
in question based on an equitable method of determining same that takes into
account, on a country by country basis, variations in potency, the relative
contribution of each active agent, component or service, as the case may be, in
the combination, and relative value to the end user of each active agent,
component or service, as the case may be.
Notwithstanding the foregoing, it is agreed that drug delivery vehicles,
adjuvants, and excipients shall not be deemed to be "active ingredients" or
"active functional elements," the presence of which in a Licensed Product would
be deemed to create a combination product subject to the terms of the preceding
paragraph.
1.44 "New Indication" means, with respect to a particular drug product that
is Controlled by BMS or its Affiliates and is in development or has already
received Regulatory Approval, any indication that:
(a) is not an indication that, at the time BMS provided to Exelixis
the BMS Compound, pursuant to Section 4.1 or 4.3, was used to identify the
particular Target referred to in subsection (b) below, either (i) BMS or its
Affiliate or licensee was in the process of conducting development or had
received Regulatory Approval for such BMS product, or (ii) is reasonably
related, based on the known or believed mechanism of action of such BMS product,
to the indication(s) for which such BMS product is then being tested in
development or being marketed pursuant to Regulatory Approvals or that is
contained in BMS' development plans for such BMS product or that would
reasonably be anticipated for such BMS product based on publicly available
information or information then known to BMS with respect to the known or
believed mechanism of action of such product (or the active compound therein);
and
(b) is discovered or identified by or on behalf of BMS or its
Affiliate or sublicensee during research performed through the material use to
any extent of either:
(i) a Product Target, or a mammalian orthologue thereof, or any
DNA sequence information relating to such Target or mammalian orthologue, or any
other Research Results that Remain Confidential at the time of such use; or
(ii) Information developed by BMS or its Affiliate or sublicensee
by material use of a Product Target, or a mammalian orthologue thereof, or any
DNA sequence information relating to such Target or mammalian orthologue, or any
other Research Results that Remain Confidential at the time of such use.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
8.
<PAGE>
1.45 "Novel Target" means a mammalian orthologue of a Selected Target,
which orthologue (a) was identified by or on behalf of Exelixis pursuant to work
conducted under the Mode of Action Program [ * ].
1.46 "Novel Target Patent" means a Patent Controlled by Exelixis that
claims at least one Novel Target (or its use) first discovered by Exelixis
during the Research Term under the Mode of Action Program, or that claims a Gene
Product or other Biotherapeutic Product based upon or containing such a Novel
Target (or its manufacture or use), but excluding inventions of Exelixis made
during any Independent Research.
1.47 "Patent" means (i) unexpired letters patent (including inventor's
certificates) which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal can be taken or has been taken
within the required time period (and which has not been admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise, or been abandoned in
accordance with or as permitted by the terms of this Agreement or by mutual
written agreement), including without limitation any substitution, extension,
registration, confirmation, reissue, re-examination, supplementary protection
certificates, confirmation patents, patent of additions, renewal or any like
filing thereof and (ii) pending applications for letters patent that are being
actively prosecuted (but not in any event for more than five (5) years from the
date of filing) and which have not been canceled, withdrawn from consideration,
finally determined to be unallowable by the applicable governmental authority
for whatever reason (and from which no appeal is or can be taken), and/or
abandoned in accordance with or as permitted by the terms of this Agreement or
by mutual written consent, including without limitation any continuation,
division or continuation-in-part thereof and any provisional applications.
1.48 "Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority, or any other form of entity not
specifically listed herein.
1.49 "Pharmacogenomic Product" means a product that is primarily used to
select between two or more therapeutic or prophylactic regimens for a human,
wherein at least one such therapeutic or prophylactic regimen involves a
compound that could be used to treat and/or prevent a disease, and where the
selected regimen is judged based on the use of the pharmacogenomic product to be
of most likely benefit and/or to do the least harm to a patient, and provided
that such selection is made based on the genotype of such human at certain
genetic loci (including by detection of certain protein products indicative of
the necessary genotype) as determined by use of such product to detect either
(i) sequence differences in different alleles of a Mammalian Target, or (ii) the
presence or absence of a certain Mammalian Target, or (iii) the presence or
absence of the protein product of a certain Mammalian Target.
1.50 "Phase III Clinical Trials" means those trials on sufficient numbers
of patients that are designed to establish that a drug is safe and efficacious
for its intended use, and to define warnings, precautions and adverse reactions
that are associated with the drug or label expansion of such drug.
1.51 "Pre-Associated Target" means:
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
9.
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(a) a mammalian orthologue of a Selected Target, which orthologue (i)
was identified by or on behalf of Exelixis pursuant to work under the Mode of
Action Program [ * ]; or
(b) a Related Target that, at the time of identification of such
Related Target by BMS, is [ * ].
1.52 "Preclinical Lead Profile" or "PLP" [ * ].
1.53 "Pre-existing Inventions" means any and all inventions, developments,
results, know-how and other Information, and all intellectual property relating
thereto, made, created or invented by a Party, its employees or its agents, or
otherwise Controlled by the Party, prior to the Effective Date.
1.54 "Product" means a Licensed Product or a BMS Product.
1.55 "Product Target" means a [ * ].
1.56 "Pursued Disclosed Target" means a Disclosed Target that has been
selected as set forth in Section 4.8(b), or that is deemed to be a Pursued
Disclosed Target pursuant to Section 4.8(b)(v)(2).
1.57 "Quality Target" means a [ * ] (a) that was identified by or on behalf
of Exelixis pursuant to work under the Mode of Action Program; (b) [ * ].
1.58 "Regulatory Approval" means any and all approvals (including
supplements, amendments, pre- and post-approvals, pricing and reimbursement
approvals), licenses, registrations or authorizations of any national, supra-
national (e.g., the European Commission or the Council of the European Union),
regional, state or local regulatory agency, department, bureau, commission,
council or other governmental entity, that are necessary for the manufacture,
distribution, use or sale of a Product in a regulatory jurisdiction.
1.59 "Related Pathway" means a biochemical pathway that interacts
biochemically with a given pathway which interaction is identified by Exelixis
pursuant to work conducted under the Mode of Action Program or by or on behalf
of BMS or its Affiliate or sublicensee through the use to any material extent of
any Target disclosed hereunder or any mammalian orthologue identified by the
material use of such Target or DNA sequence information relating thereto, or any
other Research Results that Remain Confidential at the time of such use.
1.60 "Related Target" means:
(a) [ * ], which orthologue was identified by or on behalf of
Exelixis pursuant to work under the Mode of Action Program [ * ]; or
(b) [ * ].
1.61 "Remain(s) Confidential" means, with respect to particular Research
Results used by or on behalf of BMS or its Affiliate or sublicensee, that such
Research Results, at the
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
10.
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time of such use, were not then in the public domain and were not then known to
BMS or any of its Affiliates or licensees as a result of (1) knowledge possessed
by BMS or any of its Affiliates prior to disclosure of the Research Results to
BMS by Exelixis, (2) disclosure by a Third Party entitled to disclose same
without restriction as to confidentiality, or (3) independent development by
employees or contractors of BMS or any of its Affiliates who did not have access
to any Research Results.
1.62 "Research Plan" means the plan that sets forth the research work to be
performed by Exelixis and BMS in conducting the Mode of Action Program.
1.63 "Research Results" means the data and other results generated by
Exelixis under the Mode of Action Program.
1.64 "Research Term" means the period during which research activities of
Exelixis under the Mode of Action Program shall be conducted, as set forth in
Section 3.2.
1.65 "Safety Compound" means any compound that (a) has a molecular weight
less than or equal to [ * ], and (b) was discovered by or on behalf of BMS or
its Affiliate or sublicensee through the material use of a Safety Target, any
DNA sequence information relating thereto, or any other Information developed
through the material use of such Safety Target.
1.66 "Safety Product" means any therapeutic or prophylactic product for
treatment of humans that comprises or incorporates a Safety Compound, including
any formulation or mode of delivery thereof.
1.67 "Safety Target" means a mammalian orthologue of a [ * ] (a) was
identified by or on behalf Exelixis pursuant to work under the Mode of Action
Program [ * ].
1.68 "Second Generation Product" means, with respect to a particular
Licensed Product that has achieved Regulatory Approval in a Major Market (the
"Original Licensed Product"), any Licensed Product that contains a different
active ingredient from that in the Original Licensed Product and that is
directed against the same Mammalian Target as the Original Licensed Product,
which is developed by or on behalf of BMS or its Affiliate or sublicensee as an
improvement upon or potential successor to the Original Licensed Product. For
clarity, it is understood that "Second Generation Product" shall not include new
formulations, presentations, salts, or modes of delivery of the active
ingredient contained in the Original Licensed Product.
1.69 "Selected Target" means a Candidate Target that has been selected as
set forth in Section 4.6(a), or that is deemed to be a Selected Target as
provided in Section 4.8(a)(v)(2).
1.70 "Sole Inventions" means any and all inventions, developments, results,
know-how and other Information, and all intellectual property relating thereto,
that are made, discovered or developed solely by a Party and its employees or
agents pursuant to work performed in the Collaboration.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
11.
<PAGE>
1.71 "Target" is any invertebrate target identified by Exelixis during the
Research Term under the Mode of Action Program based on analysis of a BMS
Compound in Exelixis' model genetic systems. A Target may include, without
limitation, a Candidate Target, Disclosed Target, Selected Target, Pursued
Disclosed Target, Product Target or Abandoned Target.
1.72 "Technology Sharing Program" means the program described in Article
5.
1.73 "Third Party" means any entity other than (i) Exelixis, (ii) BMS or
(iii) an Affiliate of either of them.
1.74 "Transition Target" means, with respect to [ * ], for the purposes of
the economics and other rights and obligations under the Agreement, under one of
the circumstances set forth below:
(a) if, prior to the date that is [ * ]; or
(b) if, after the date that is [ * ] after the date that such [ * ]
was initially identified under the Agreement, [ * ] with respect to such [ * ],
then the following shall apply:
[ * ];
(i) [ * ];
(ii) [ * ]; and
(iii) [ * ].
As used herein, a [ * ].
1.75 "Unlinked Related Target" means a [ * ].
1.76 "Valid Claim" means an issued claim under an issued patent within the
Patent Rights, which has not (i) expired or been canceled, (ii) been declared
invalid by an unreversed and unappealable decision of a court or other
appropriate body of competent jurisdiction, (iii) been admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise, and/or (iv) been
abandoned in accordance with or as permitted by the terms of this Agreement or
by mutual written agreement.
2. Management of the Collaboration
2.1 Overall Management Structure. The Parties agree to establish a multi-
level committee structure to manage and direct the Collaboration and the
relationship of the Parties in pursuing the research and development goals of
this Agreement. The committee structure is intended to facilitate decision
making and management of the various Collaboration activities of the Parties,
and each Party agrees to use good faith, cooperative efforts to facilitate and
assist the efforts of such committees. The overall management of the
Collaboration with respect to work performed by Exelixis under the Mode of
Action Program shall be vested in the Joint Management Team (the "JMT"), with
responsibility, as further discussed in Section 2.2, for
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
12.
<PAGE>
establishing the strategic direction of the Collaboration and for managing and
directing the research efforts of the Parties under the Collaboration. The
Technology Sharing Program shall be managed by two individuals, one each
designated by BMS and Exelixis, which individuals shall report to the JMT. The
day-to-day management and direction of the Mode of Action Program conducted at
Exelixis shall be managed by the Joint Scientific Committee (the "JSC"), which
shall report to and be managed by the JMT. The JSC shall cease to exist after
its second meeting after the termination of the Research Term (unless otherwise
extended by unanimous consent of all members of the JSC). Any dispute that
cannot be resolved by the JSC for matters that come before it shall be resolved
by the JMT.
2.2 Joint Management Team.
(a) Membership. The Joint Management Team (the "JMT") shall be
composed of four members, two members appointed by each Party. Within thirty
(30) days after the Effective Date, each Party shall appoint two representatives
from its senior management team to the JMT. At least one representative from
Exelixis shall be Head of Research or a mutually agreeable designate; at least
one representative from BMS shall be its Vice President for Applied Genomic
Research or a mutually agreeable designate. With the exception of the Party's
Head of Research, each Party may replace its JMT representatives at any time
upon written notice to the other Party. BMS will designate one of its
representatives as Chairperson of the JMT. The Chairperson shall be responsible
for scheduling meetings, preparing and circulating an agenda in advance of each
meeting, and preparing and issuing minutes of each meeting within thirty (30)
days thereafter.
(b) Responsibilities. During the Research Term of this Agreement, the
JMT shall meet a minimum of two times per year as provided in Section 2.4;
thereafter, the JMT shall meet at the request of either party, which request may
be made by each party not more once in each twelve-month period following the
termination of the Research Program, unless otherwise agreed to by unanimous
consent of all members of the JMT. Except as provided in subsection (c) below,
the JMT shall operate by consensus and in accordance with the principles set
forth in this Article 2. It shall determine the overall strategy for the
Collaboration and shall be make all major business and strategic decisions. The
JMT shall supervise and direct the JSC, evaluate the progress of the Research
Plan and monitor compliance with the diligence provisions set forth in Sections
4.9 and 4.10, and it will make the final decisions regarding: (i) allocation of
FTEs for the Collaboration, (ii) significant modifications of the Research Plan,
(iii) transfer of technology under the Technology Sharing Program; (iv) the
strategy for the protection of intellectual property arising from the
Collaboration; and (v) determination of whether particular Candidate Targets are
Quality Targets. The JMT will also serve as the initial forum for dispute
resolution as set forth in Section 14.1. To the extent necessary to carry out
its responsibilities under the Research Plan, a Party's JMT members shall be
granted access to the other Party's relevant Confidential Information relevant
to the Collaboration. Thus, it may be that members of the JMT, in assessing
modifications to the Research Program, assessing the Research Results, or making
determinations as required in this Section 2.2, may need to be granted access to
higher levels of the proprietary or Confidential Information of the other Party
than is provided to the JSC or to the employees of such Party working on the
Collaboration. The JMT shall discuss in good faith and agree on the level of
such access that is needed to achieve the goals and intent of the Parties.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
13.
<PAGE>
(c) Determination of Certain Matters. BMS shall have the tie-breaking
vote in all matters that come before the JMT (including without limitation
whether a Candidate Target is a Quality Target); provided, however, that: (1)
the Parties agree to refer the any such matter, for which the JMT is unable to
agree, to the senior officers referred to in Section 14.1(a) and to follow the
informal dispute resolution procedure in Section 14.1(a) (but without the
requirement in said section of submitting the matter to arbitration if said
senior officers cannot reach mutual agreement within the time frame set forth
therein) before BMS may exercise its tie-breaking vote, and (2) the unanimous
consent of all members of the JMT shall be required for any dispute or
disagreement the resolution of which would require the use by Exelixis of more
FTEs than BMS is then supporting hereunder or which would materially conflict
with Exelixis' obligations hereunder.
2.3 Joint Scientific Committee.
(a) Membership. The Joint Scientific Committee (the "JSC") shall be
composed of four members. Within thirty (30) days after the Effective Date, each
Party shall appoint two representatives to the JSC, one such representative
being the individual at the Party with primary responsibility for the day-to-day
management and execution of the Research Plan. Exelixis' other representative
shall be its Head of Research or such person's designee. The JSC will report
directly to the JMT and shall take its direction from the JMT. Each Party may
replace its appointed JSC representatives at any time upon written notice to the
other Party. Exelixis shall designate one of its representatives as Chairperson
of the JSC. The Chairperson shall be responsible for scheduling meetings,
preparing and circulating an agenda in advance of each meeting, and preparing
and issuing minutes of each meeting within thirty (30) days thereafter.
(b) Responsibilities. During the Research Term and for two quarters
thereafter, the JSC shall meet on a quarterly basis as provided in Section 2.4.
The JSC shall operate by consensus and in accordance with the principles set
forth in this Article 2. It shall be responsible for the planning and execution
of the Research Plan. At its meetings, the JSC shall review the progress of the
Research Plan and consider modifying the Research Plan. At the next JMT meeting,
the JSC shall summarize for the JMT the progress of the Research Plan since the
last JMT meeting, bring to the attention of the JMT any overarching issues or
significant changes in a Research Plan, and address any issues raised by the JMT
at its previous meeting. The JSC shall also prioritize projects within the
Research Plan as set forth in Article 4.
2.4 Meetings. The Parties shall endeavor to schedule meetings of the JMT
and the JSC at least one year in advance. Meetings for the JSC shall be held on
an alternating basis in New Jersey and in San Francisco. When possible, the
meeting of the JMT should occur at the same location as the JSC meeting, with
the JMT meeting occurring after the meeting of the JSC. With the consent of the
representatives of each Party serving on a particular committee, other
representatives of each Party may attend meetings of that committee as nonvoting
observers. A meeting of a committee may be held by audio or video teleconference
with the consent of each Party, provided that at least half of the minimum
number of meetings for that committee shall be held in person. Meetings of a
committee shall be effective only if at least one representative of each Party
is present or participating. Each Party shall be responsible for all of its own
expenses of participating in the committee meetings.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
14.
<PAGE>
2.5 Collaboration Guidelines. Subject to the terms of this Agreement, the
activities and resources of each Party shall be managed by such Party, acting
independently and in its individual capacity. The relationship between Exelixis
and BMS is that of independent contractors and neither Party shall have the
power to bind or obligate the other Party in any manner, other than as is
expressly set forth in this Agreement.
3. Overview of the Mode of Action Program
3.1 Goals. The general goals and intent of the Mode of Action Program are
to apply the Exelixis technology to: (a) the identification of the molecular
targets and/or biochemical pathways modulated by BMS Compounds, (b) the
discovery of Candidate Targets that may be useful as tools for the development
of drugs useful in the prevention, treatment or cure of human disease, and (c)
the discovery, development and commercialization of Licensed Products and/or
additional indications for BMS Products.
3.2 Research Term. The Research Term shall commence on the Effective Date
and shall continue until the date three (3) years after the Effective Date, or
such other date on which the Research Term terminates pursuant to an early
termination under Section 3.2(a) or (b), or expires after an extension under
Section 3.2(c). Any termination of the Agreement pursuant to Section 11.2 shall
terminate the Research Term as of the date of such termination. The FTE funding
commitments of BMS and Exelixis set forth in Section 3.4 and the payment
obligations of BMS set forth in Section 8.2 shall remain in force until the
termination of the Research Term.
(a) If Exelixis has not provided BMS with at least [ * ] by the date
that is [ * ] of the Effective Date, BMS may, in its sole and absolute
discretion, either (i) terminate this Agreement as provided below in this
Section 3.2(a), or (ii) if BMS does not elect to terminate per clause (i) above,
extend the Research Term by [ * ] by written notification to Exelixis in order
to allow Exelixis additional time to provide [ * ] by the date that is [ * ] of
the Effective Date. If BMS so decides to terminate the Research Term, such
termination shall be effective [ * ] after the date of BMS' written notification
thereof, and BMS shall have no obligation to make any Research funding payment
that would otherwise have become due after the date that notice of termination
is given. If BMS elects not to terminate the Research Term as provided in
subsection (a)(i), such Research Term shall continue for an additional ninety
(90) days as provided in Section 3.2(b).
(b) If BMS has the right to an election under Section 3.2(a), and
elected under Section 3.2(a)(ii) to extend the Research Term until the date that
is [ * ] of the Effective Date, and if Exelixis has not provided BMS with at
least [ * ] by the date that is [ * ] of the Effective Date, BMS may, in its
sole and absolute discretion, either (i) terminate this Agreement, or (ii)
continue to fund the Mode of Action Program hereunder for the remainder of the
Research Term at the rate of [ * ]. If BMS decides to terminate the Research
Term, it shall give written notice by no later than the [ * ] date, and such
notice of termination shall be effective [ * ] after the date of BMS' written
notification thereof. In the event of termination, BMS shall have no obligation
to make any Research funding payment that would otherwise have become due after
the date that notice of termination is given. If BMS does not elect to terminate
as permitted under subclause (b)(i) above, then the Research Term shall
continue, subject to Article 11 hereof, for the full three years, at a funded
rate of [ * ] at Exelixis.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
15.
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(c) If BMS has not terminated the Research Term as permitted in
Sections 3.2(a) or (b), the Parties may mutually agree in writing, no later than
[ * ] prior to the date that the Research Term, as set forth in this Section
3.2, would otherwise expire, to extend the Research Term for [ * ] beyond such
initial three (3) year term. The Parties may agree to multiple such [ * ]
extensions of the Research Term. Each such extension shall be under the terms of
this Agreement, subject to any adjustment agreed to in writing by the Parties of
the FTE funding commitments of BMS and Exelixis set forth in Section 3.4.
3.3 Research Plans. The initial Research Plan for the Mode of Action
Program has been approved by the Parties concurrent with the execution of this
Agreement. During the Research Term, the JSC may propose amendments to the
Research Plan, based upon the results achieved in the Mode of Action Program.
Any such proposed amendments shall be reviewed and approved by the JMT, and the
amended Research Plan, as approved by the JMT, shall thereafter be in effect and
control the Parties' activities under the Mode of Action Program.
3.4 FTE Commitments.
(a) Subject to Section 3.4(d), for the first year of the Research
Term, BMS shall fund research under the Mode of Action Program for [ * ].
(b) Subject to Section 3.4(d), if Exelixis provides BMS with [ * ] by
the date [ * ] of the Effective Date, then, subject to Article 11, from such
first anniversary until the termination of the Research Term, BMS shall fund
research under the Mode of Action Program for [ * ].
(c) Subject to Section 3.4(d), if Exelixis does not provide BMS with
[ * ] by the date [ * ] of the Effective Date and if BMS elects pursuant to
Section 3.2(b) to extend for [ * ] the date by which BMS could terminate the
Research Term under Section 3.2(a), then after such [ * ], BMS' research funding
obligations under the Mode of Action Program shall be as follows:
(i) BMS shall fund a minimum of [ * ] until the date that is [
* ] of the Effective Date; and
(ii) In the event that Exelixis provides BMS with [ * ] by the
date that is [ * ] the [ * ] the Effective Date, BMS shall fund [ * ] from such
date until the termination of the Research Term; and
(iii) In the event that Exelixis does not provide BMS with [ * ]
by the date that is [ * ] the [ * ] the Effective Date, BMS may elect to
continue the Mode of Action Program through the end of the Research Term but in
such event shall fund [ * ] from such date until the termination of the Research
Term.
(d) At any time during the Research Term, the JMT may adjust the
number of FTEs dedicated to the Mode of Action Program for a minimum period of
one (1) year. The resulting number of FTEs shall not exceed [ * ] nor fall below
the [ * ], as applicable, without the written consent of Exelixis. BMS shall
fund all FTEs allocated by the JMT. Exelixis shall have
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
16.
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a reasonable time in which to locate resources to fill any additional FTE
positions created by the JMT.
3.5 Conduct of Research. The Parties shall use Diligent Efforts to conduct
their respective tasks, as assigned under the Research Plan, throughout the Mode
of Action Program and shall conduct the Mode of Action Program in good
scientific manner, and in compliance in all material respects with the
requirements of applicable laws, rules and regulations and all applicable good
laboratory practices to attempt to achieve their objectives efficiently and
expeditiously.
3.6 Records. Each Party shall maintain complete and accurate records of
all work conducted under the Collaboration and all results, data and
developments made pursuant to its efforts under the Collaboration. Such records
shall be complete and accurate and shall fully and properly reflect all work
done and results achieved in the performance of the Collaboration in sufficient
detail and in good scientific manner appropriate for patent and regulatory
purposes.
3.7 Reports and Disclosure of Research Results. During the Research Term,
each Party shall, no less than once per quarter, submit to the other Party and
the JSC a written progress report summarizing the work performed under the
Collaboration in relation to the Research Plan and the goals of the Mode of
Action Program and the Research Results obtained therefrom. In particular, but
without limiting the generality of the foregoing, BMS shall provide in such
reports the identity, and Information relating to, of each Mammalian Target
identified hereunder, excluding all Related Targets, and shall indicate the
identification (e.g., by the BMS compound control number) of Collaboration
Compounds with sufficient activity to justify further research or development
work on such compound (and BMS shall also disclose the Mammalian Target that
such compound directly modulates, excluding Related Targets, but shall not be
obligated to disclose compound structures or information that would assist in
structural identification). If reasonably necessary for a Party to perform its
work under the Collaboration or to exercise its rights under the Agreement, such
Party may request that the other Party provide more detailed information and
data regarding such results reported by such other Party, and such other Party
shall promptly provide the requesting Party with information and data as is
reasonably related to such request. All such reports shall be considered
Confidential Information of the Party providing same.
3.8 Preserving Confidentiality of Certain Research Results. Exelixis
agrees that it shall use commercially reasonable efforts (including not less
than those efforts that it uses to protect its own confidential information of
the same importance) not to disclose to any Third Party any Research Results of
Exelixis that relate directly to any Selected Target or Pursued Disclosed Target
(or any Mammalian Target related to any such Selected Target or Pursued
Disclosed Target), provided that the foregoing shall not prevent Exelixis from
disclosing any such information in confidence (on terms consistent with those
set forth in Article 10 herein but for a period of not less than [ * ]) to any
other licensee solely for use outside the Field, but subject to the limitations
in Section 6.3(a).
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
17.
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4. Mode of Action Program
4.1 Provision of BMS Compounds. BMS will provide Exelixis with [ * ] BMS
Compounds within [ * ] after the Effective Date, for use by Exelixis in the Mode
of Action Program. BMS shall make known to Exelixis all BMS Compounds that are
part of BMS Products. BMS shall not reveal the identity or structure of any BMS
Compound to Exelixis, but it may provide Exelixis with information concerning
the putative function of an BMS Compound or other such information as may help
Exelixis perform its duties under the Mode of Action Program (which information
shall be treated as BMS Confidential Information). Following approval and
allocation of sufficient FTE resources by the JMT, BMS may provide additional
BMS Compound sets to Exelixis from time-to-time during the Research Term for use
by Exelixis in the Mode of Action Program.
(a) In the event that, subsequent to providing a BMS Compound to
Exelixis, but prior to the identification by Exelixis under the Mode of Action
Program of any Target modulated by such BMS Compound, BMS learns that such BMS
Compound modulates a particular invertebrate or vertebrate target either: (i)
from public disclosures; or (b) from internal BMS research in an area other than
mode of action research using C. elegans or Drosophila, then BMS may, by
providing written notice to Exelixis substantiating the basis of BMS' learning
of such target, withdraw such BMS Compound from the Mode of Action Program, and
Exelixis shall cease work thereon. BMS shall not use any Research Results
relating to such BMS Compound, but shall have no obligation to Exelixis based on
the use of any Information learned by BMS independently.
4.2 Stage I - Feasibility Evaluation. Within [ * ] of receiving a
particular BMS Compound from BMS, Exelixis shall evaluate the feasibility of
identifying Target(s) for such BMS Compound. Such Stage I research shall include
optimization of the delivery of such BMS Compound to a model system organism and
analysis of any phenotype arising in said model system organism as a result of
BMS Compound delivery. Exelixis shall report the data arising from such Stage I
research to the JSC.
4.3 Provision and Testing of Analogues. In the event that the Stage I data
for a particular BMS Compound indicates that it will not be feasible for
Exelixis to identify Target(s) of such BMS Compound, the JSC may approve and
allocate sufficient resources for Exelixis from the pool of funded FTEs to
perform Stage I research on one or more Analogues of such BMS Compound that may
be provided by BMS for such purpose. Within [ * ] of receiving a particular
Analogue from BMS, Exelixis shall evaluate the feasibility of identifying
Target(s) for such Analogue. Such Stage I research shall include optimization of
the delivery of such Analogue to a model system organism and analysis of any
phenotype arising in said model system organism as a result of Analogue
delivery. Exelixis shall report the data arising from such Stage I research to
the JSC.
4.4 Stage II - Target Identification. The JSC shall review the Stage I
data for each BMS Compound, decide whether Exelixis should perform Stage II
research on such BMS Compound, and prioritize any such Stage II research
relative to the other work to be performed by Exelixis under the Mode of Action
Program. Exelixis shall proceed in an orderly fashion, based on such
prioritization and the number of FTEs then committed to the Mode of Action
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
18.
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Program, to perform research to identify Target(s) of each such BMS Compound
selected by the JSC for Stage II work. Such research may include: (i)
experiments in which existing [ * ]; (ii) experiments in which [ * ]; and (iii)
performance of [ * ]. Exelixis shall report to the JSC the data arising from
such Stage II research and the identity of any Target then known by Exelixis to
be a Disclosed Target.
4.5 Stage III - Identification of Candidate Targets. The JSC shall review
all Stage II data for each BMS Compound, select no more than [ * ] Targets
(excluding any Targets for which Exelixis determines that, as of the Effective
Date, it had an exclusivity obligation to another party that prevents disclosure
of such Target [ * ] to BMS hereunder) per BMS Compound for molecular analysis
by Exelixis, and prioritize any such Stage III research relative to the other
work to be performed by Exelixis under the Mode of Action Program. Subject to
Section 4.7, Exelixis shall proceed in an orderly fashion, based on the JSC's
prioritization and the number of FTEs then committed to the Mode of Action
Program, to identify the [ * ]. Exelixis will also undertake a good faith [ * ]
of such Targets. Exelixis will submit all such data generated under the previous
two (2) sentences to the JSC along with a statement setting forth whether each
such Target is a Disclosed Target or if Exelixis believes that such Target
qualifies as a Candidate Target (with the JSC to determine which Targets are
Candidate Targets). Exelixis shall retain all rights Controlled by it relating
to a Target that is not a Disclosed Target and does not fulfill the criteria for
a Candidate Target, and such Targets shall not be subject to any terms of this
Agreement.
4.6 Collaborative Work. Upon mutual agreement between the Parties, BMS may
collaborate with Exelixis on Stage I, Stage II and Stage III activities with
respect to a particular BMS Compound, wherein BMS may perform some of the Mode
of Action Program work on such BMS Compound. In such an event, any research
results generated by BMS pursuant to such collaborative work shall be deemed the
confidential Research Results of Exelixis for purposes of Candidate Target
identification and identification mammalian orthologues thereof.
4.7 Limitation on Exelixis Collaborative Work. If Exelixis determines
that, with respect to a particular Target Exelixis identifies under the Mode of
Action Program, Exelixis is unable to conduct further work on such Target
hereunder due to then-existing obligations to a Third Party, Exelixis shall not
be obligated, notwithstanding the terms of Sections 4.4 and/or 4.5, to perform
any further work on such Target that would violate such obligations, but will
disclose such Target to BMS and all Research Results relating thereto obtained
by Exelixis prior to the date that it ceases further work on such Target
hereunder.
4.8 Selection of Targets.
(a) Candidate Targets.
(i) During the [ * ] period following Exelixis' submission of
data regarding a particular Candidate Target to the JSC pursuant to Section 4.5,
BMS shall use Diligent Efforts to seek to identify at least [ * ] of such
Candidate Target, and BMS may perform other research to help it evaluate whether
to select such Candidate Target as a Selected Target. Any results of such
research work with respect to such Candidate Target (and [ * ] thereof) may be
used by BMS only for evaluation, unless and until BMS selects the Candidate
Target as a
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
19.
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Selected Target. If BMS identifies at least [ * ] of such Candidate Target
during such [ * ] period, then BMS must provide Exelixis with written
notification, prior to the end of such [ * ] period, of its decision to select
such Candidate Target as a Selected Target before BMS or its sublicensees may
perform any other work on the Candidate Target following the end of such [ * ]
period.
(ii) If, despite its good faith, Diligent Efforts during the [ * ]
period following Exelixis' submission of data regarding a particular Candidate
Target to the JSC pursuant to Section 4.5, BMS has been unable to find at least
[ * ] of such Candidate Target, then BMS shall have an additional [ * ] in which
to use good faith, Diligent Efforts to seek to identify at least [ * ] of such
Candidate Target and, if it so elects, to select such Candidate Target as a
Selected Target by providing written notice thereof to Exelixis.
(iii) If BMS fails to select such Candidate Target as a Selected
Target, within the [ * ] period set forth in subsection (i) above and, if
applicable, the additional [ * ] period set forth in subsection (ii) above, then
such Candidate Target shall thereafter be deemed an "Abandoned Target," and
Exelixis shall have the rights and obligations set forth in Sections 6.3(a) and
6.4. BMS covenants that it shall not perform any further research on such
Target or [ * ] identified by either Party under the Collaboration, and shall
not use any such Target or any Research Results relating to such Target [ * ],
except as permitted in clauses (iv) or (v) below.
(iv) If, after BMS has abandoned a particular Abandoned Target
pursuant to clause (a)(iii) above:
(1) BMS or any of its Affiliates learns, [ * ] under the
Collaboration, that such Abandoned Target [ * ] is directly inhibited, agonized
or otherwise modulated by a compound in the same class of compounds as the BMS
Compound that Exelixis tested in the Mode of Action Program to identify the
Candidate Target that became such Abandoned Target; and
(2) BMS or such Affiliate [ * ] any material use of any of the
Research Results that Remain Confidential at such time [ * ] by BMS or its
Affiliates that Remain Confidential;
then BMS shall thereafter [ * ] such Abandoned Target and/or mammalian
orthologues thereof for [ * ] to Exelixis under this Agreement, provided that
BMS (or its Affiliate or licensee) does not [ * ] to such Abandoned Target [ * ]
that Remain Confidential at the time of such use, or any [ * ] by BMS or its
Affiliates (unless and until such [ * ] by BMS or its Affiliate).
(v) With respect to any particular Abandoned Target that BMS
abandoned pursuant to clause (a)(iii) above, BMS may thereafter [ * ] under the
Agreement on such target and mammalian orthologues thereof.
(1) Promptly after such [ * ] with respect to a particular
Abandoned Target, Exelixis shall inform BMS which of the following circumstances
applies: (A) Exelixis has already exclusively licensed such Abandoned Target [ *
] to a third party; or (B) Exelixis is in actual license negotiations (i.e.,
after preparation of a term sheet) with regard to
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
20.
<PAGE>
granting a third party exclusive rights to such Abandoned Target [ * ] (provided
that if such negotiations terminate without entering into such a license, then
Exelixis shall inform BMS that such Abandoned Target is again available); or (C)
Exelixis has not licensed such Abandoned Target (and/or [ * ]) to a third party,
or has only granted non-exclusive license rights with respect thereto, or is
using such Target in an ongoing internal research program.
(2) If subclause (C) in subsection (v)(1) above obtains, BMS
shall inform Exelixis within [ * ] whether BMS still desires to recommence work
on such target. If BMS does desire to recommence work, then such target shall
thereafter no longer be an Abandoned Target and the applicable subclause of the
following shall apply: (A) if such target [ * ] was not licensed by Exelixis to
a third party, and not pursued internally by Exelixis, then such target shall be
treated as a Selected Target for all purposes hereunder, with all rights and
obligations of BMS and Exelixis that apply to a Selected Target; (B) if such
target [ * ] was non-exclusively licensed by Exelixis to a third party, or is
the subject of ongoing internal research by Exelixis, then such target shall be
treated as a Pursued Disclosed Target for all purposes hereunder, with all
rights and obligations of BMS and Exelixis that apply to a Pursued Disclosed
Target, and with the additional limitation that Exelixis shall not further
disclose to Third Parties any Research Results relating to such target.
(vi) With respect to each Selected Target, BMS shall have the rights
set forth in Section 6.1 and the obligations set forth in Section 4.8, and
Exelixis shall have the rights and obligations set forth in Sections 6.3(a) and
6.4.
(b) Disclosed Targets.
(i) During the [ * ] period following Exelixis' submission of data
regarding a particular Disclosed Target to the JSC pursuant to Section 4.5, BMS
shall use Disclosed Efforts to seek to identify at least [ * ] of such Disclosed
Target, and BMS may perform other research to help it evaluate whether to select
such Disclosed Target as a Pursued Disclosed Target. Any results of such
research work with respect to such Disclosed Target [ * ] may be used by BMS
only for evaluation, unless and until BMS selects the Disclosed Target as a
Pursued Disclosed Target. If BMS identifies at least [ * ] of such Disclosed
Target during such [ * ] period, then BMS must provide Exelixis with written
notification, prior to the end of such [ * ] period, of its decision to select
such Disclosed Target as a Pursued Disclosed Target before BMS or its
sublicensees may perform any other work on the Disclosed Target following the
end of such [ * ] period.
(ii) If, despite its good faith, Diligent Efforts during the [ * ]
period following Exelixis' submission of data regarding a particular Disclosed
Target to the JSC pursuant to Section 4.5, BMS has been unable to find at least
[ * ] of such Disclosed Target, then BMS shall have an additional [ * ] in which
to use good faith, Diligent Efforts to seek to identify at least [ * ] of such
Disclosed Target and, if it so elects, to select such Disclosed Target as a
Pursued Disclosed Target by providing written notice thereof to Exelixis.
(iii) If BMS fails to select such Disclosed Target as a Pursued
Disclosed Target (or, if applicable, a Product Target), within the [ * ] set
forth in subsection (i) above and, if applicable, the additional [ * ] set forth
in subsection (ii) above, then such
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
21.
<PAGE>
Disclosed Target shall thereafter be deemed an "Abandoned Target," and Exelixis
shall have the rights and obligations set forth in Sections 6.3(a) and 6.4. BMS
covenants that it shall not perform any further research on such Target [ * ]
identified under the Collaboration, and shall not use any such Disclosed Target,
or any Research Results relating to such Disclosed Target, to [ * ], except as
permitted in clause (iv) or (v) below.
(iv) If, after BMS has abandoned a particular Abandoned Target
pursuant to clause (b)(iii) above:
(1) BMS or any of its Affiliates learns, [ * ] under the
Collaboration, that such Abandoned Target [ * ] is directly inhibited, agonized
or otherwise modulated by a compound in the same class of compounds as the BMS
Compound that Exelixis tested in the Mode of Action Program to identify the
Disclosed Target that became such Abandoned Target; and
(2) BMS or its Affiliate [ * ] any material use of any of the
Research Results that Remain Confidential at such time or any Information that
was developed by use of such Research Results by BMS or its Affiliates that
Remain Confidential at such time;
then BMS shall thereafter [ * ] such Abandoned Target [ * ] for [ * ] to
Exelixis under this Agreement, provided that BMS (or its Affiliate or licensee)
does not [ * ] to such Abandoned Target or [ * ] that Remain Confidential at the
time of such use, or any [ * ] or [ * ] by BMS or its Affiliates (unless and
until such [ * ] by BMS or its Affiliate).
(v) With respect to any particular Abandoned Target that BMS
abandoned pursuant to clause (b)(iii) above, BMS may thereafter [ * ] under the
Agreement on such target and mammalian orthologues thereof.
(1) Promptly after such written request with respect to a
particular Abandoned Target, Exelixis shall inform BMS which of the following
circumstances applies: (A) Exelixis has already exclusively licensed such
Abandoned Target [ * ] to a third party; or (B) Exelixis is in actual license
negotiations (i.e., after preparation of a term sheet) with regard to granting a
third party exclusive rights to such Abandoned Target and/or mammalian
orthologues thereof (provided that if such negotiations terminate without
entering into such a license, then Exelixis shall inform BMS that such Abandoned
Target is again available hereunder); or (C) Exelixis has only granted non-
exclusive license rights with respect thereto, or is using such Target in an
ongoing internal research program.
(2) If subclause (C) in subsection (v)(1) above obtains, then
such target shall [ * ] for all purposes hereunder, with all rights and
obligations of BMS and Exelixis that apply to a [ * ], and with the additional
limitation that Exelixis shall not further disclose to Third Parties any
Research Results relating to such target.
(vi) With respect to each [ * ], BMS shall have the rights set forth
in Section 6.1 and the obligations set forth in Section 4.8, and Exelixis shall
have the rights and obligations set forth in Sections 6.3(a) and 6.4.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
22.
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4.9 Selected Target Diligence.
(a) For each Selected Target, BMS shall use good faith, Diligent
Efforts as follows:
(i) to develop assays to assess the activity of compounds
against at least one (or more) of the following: any Novel Target, Unlinked
Related Target, Safety Target, Conceptual Target or Pre-Associated Target,
relating to such Selected Target;
(ii) to use such assays to discover Collaboration Compounds
directed at any of the Mammalian Targets referred to in subsection (a) above;
and
(iii) if BMS discovers a Collaboration Compound as provided in
subsection (b) above and approves such Collaboration Compound as a Preclinical
Lead Profile to use Diligent Efforts to develop and commercialize (which may
include sublicensing) such Collaboration Compound as a Licensed Product.
(b) The Parties agree that BMS shall have fulfilled its Diligent
Efforts under such subsection 4.9(a), as to a particular Selected Target, if:
(1) [ * ] in an assay, within [ * ] after selection of such Selected Target,
with respect to any Novel Target, Unlinked Related Target, Safety Target,
Conceptual Target, or Pre-Associated Target that is related to such Selected
Target; and (2) BMS shall have [ * ] of such Mammalian Targets described in
subclause (1) above, within [ * ] after initiation of such [ * ], and shall have
[ * ], within [ * ] after the initiation of such [ * ]. The preceding sentence
shall constitute a safe harbor as to the demonstration of Diligent Efforts by
BMS, and shall not be construed to limit or preclude any other showing of
Diligent Efforts by BMS based on actual facts and circumstances.
4.10 Other Diligence Obligations.
(a) Where a Gene Product exists, or reasonably may be pursued, with
respect to a Selected Target (i.e., is based upon a mammalian orthologue of such
Selected Target), then, separate from the diligence obligations set forth in
Section 4.9, BMS must use good faith, Diligent Efforts to [ * ].
(b) Where a Biotherapeutic Product can be developed with respect to
a Selected Target (i.e., is based upon a mammalian orthologue of such Selected
Target), then, separate from the diligence obligations set forth in Section
4.10(a), BMS must use good faith, Diligent Efforts to [ * ].
4.11 Target Abandonment. BMS may [ * ] at any time during the term of the
Agreement notify Exelixis in writing that it has [ * ]. Such notification shall
have the following effects: (a) such [ * ], (b) BMS shall [ * ] with respect to
such Target, (c) the licenses set forth in Section 6.1 [ * ], (d) all rights
granted by Exelixis in the Exelixis-generated Research Results [ * ], (e) the
license set forth in Section 6.3(b) [ * ], and (f) any Collaboration Compounds
identified prior to the date BMS gives notice of its election under this Section
4.11 [ * ]. Subsequently, if [ * ] based on such Selected Target or Pursued
Disclosed Target (ii) or makes any [ * ] for the purposes set forth above.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
23.
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4.12 Failure of Diligence.
(a) If BMS fails to fulfill its obligations set forth in Section
4.9(a) with respect to a particular Selected Target, it [ * ] that is in the
process of being resolved under the dispute resolution procedures set forth in
Section 14.1, become [ * ].
(b) If BMS fails to fulfill its obligations set forth in Section
4.10(a) with respect to a particular Selected Target, it [ * ] that is in the
process of being resolved under the dispute resolution procedures set forth in
Section 14.1, [ * ] Products relating to such Selected Target.
(c) If BMS fails to fulfill its obligations set forth in Section
4.10(b) with respect to a particular Selected Target, it [ * ] that is in the
process of being resolved under the dispute resolution procedures set forth in
Section 14.1, become [ * ].
(d) [ * ], and BMS shall not be liable for any damages of any type
with respect to any such breach or abandonment.
4.13 Pursuit of New Indications for BMS Products. BMS may pursue New
Indications for a BMS drug product by selecting, as a "Product Target" for such
use, a Selected Target or Pursued Disclosed Target, and using one or more of the
mammalian orthologues of such Selected Target or Pursued Disclosed Target, which
is or has been identified by or on behalf of BMS (or its Affiliate or
sublicensee) through the material use of such Target or its DNA sequence, or any
other Research Results relating thereto that Remain Confidential, to search for
such different uses of or indications for such BMS product. With respect to each
Product Target, BMS shall have the rights set forth in Section 6.1 and the
obligations set forth in Section 8.6. If BMS uses a Selected Target or Pursued
Disclosed Target in this manner to seek to identify New Indications, such Target
shall be referred to as a "Product Target" for such purposes (but shall remain a
Selected Target or Pursued Disclosed Target, as applicable, for any use in
screening for active compounds).
4.14 Exclusion Based on Use of Mammalian Targets that [ * ]. The following
provisions shall apply to use by BMS or its Affiliates or sublicensees of
certain [ * ], and/or Information developed based on use of such Targets, in
order to identify compounds that activate, inhibit or otherwise modulate such
targets:
(a) With respect to a particular Pre-Associated Target, if there is
[ * ] in the disease area of interest to BMS with respect to its identification
of such Pre-Associated Target, then commencing on the date that is [ * ] be
subject to the terms of this Agreement, but provided, however, that (1) any
[ * ] be subject to milestone and royalty payments applicable to Pre-Associated
Targets;
(b) With respect to a particular Conceptual Target, if there is [ * ]
in the disease area of interest to BMS with respect to its identification of
such Conceptual Target, then commencing on the date that is [ * ] be subject to
the terms of this Agreement, but provided, however, that (1) any [ * ] be
subject to milestone and royalty payments applicable to Conceptual Targets;
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
24.
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(c) With respect to a particular Mammalian Disclosed Target, if
there is [ * ] in the disease area of interest to BMS with respect to its
identification of such Mammalian Disclosed Target, then commencing on the date
that is [ * ] be subject to the terms of this Agreement, but provided, however,
that (1) any [ * ] be subject to milestone and royalty payments applicable to
Mammalian Disclosed Targets; and
(d) With respect to a particular Safety Target, if there is [ * ] in
the disease area of interest to BMS with respect to Safety Target, then
commencing on the date that is [ * ] subject to the terms of this Agreement, but
provided, however, that (1) any [ * ] be subject to milestone and royalty
payments applicable to Safety Targets.
(e) For purposes of this Section 4.14, a "Derivative" shall mean a
compound that has the same, or a substantially similar, Active Substructure as a
particular Collaboration Compound, where an "Active Substructure" means those
portions of such Collaboration Compound that contribute materially to the
activity of such compound against the applicable Mammalian Target.
4.15 Exelixis Exclusivity Obligations. If at any time during the Research
Term, Exelixis discovers that a particular Target is identical to a molecule for
which it has an exclusivity obligation pursuant to a written agreement between
Exelixis and a Third Party, Exelixis shall thereafter only perform work on such
Target under the Mode of Action Program to the extent such work is not
prohibited by such agreement, but subject to the following provisions in this
Section 4.14 and provided, that, with respect to the identification of any
particular Target, the foregoing shall not prevent Exelixis from disclosing the
Target to BMS or any Research Results obtained by Exelixis with respect thereto.
Exelixis covenants that in any future "mode of action" agreement that Exelixis
enters into with a Third Party, such Third Party agreement shall not prevent
Exelixis from disclosing to BMS any particular Target identified under the Mode
of Action Program for use in the Field and to perform any of the work
contemplated hereunder with respect to such Target. With respect to any other
written collaborative research agreement Exelixis enters into with a Third
Party, such agreement shall [ * ] Selected Target, Pursued Disclosed Target or
Product Target) any particular Target (or its nucleic acid sequence) identified
under the Mode of Action Program for use in the Field, [ * ] from doing further
work on such Target.
4.16 Records. Each Party shall maintain complete and accurate records of
all scientific and development work conducted on Selected Targets, Pursued
Disclosed Targets, Product Targets, Collaboration Compounds, Licensed Products,
and New Indications for BMS Products, and of all results, data and developments
made pursuant to its research and development efforts under this Agreement. Such
records shall be complete and accurate and shall fully and properly reflect all
work done and results achieved in sufficient detail and in good scientific
manner appropriate for patent and regulatory purposes.
4.17 Reports. Separate from the reports to be provided under Section 3.7,
every [ * ] during the term of the Agreement, BMS will submit to Exelixis and
the JSC a written progress report summarizing the research and development work
performed on (a) each Selected Target, Pursued Disclosed Target, Product Target
and Mammalian Target and (b) on each New Indication, it being understood that
the purpose of such reports shall be to enable Exelixis to
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
25.
<PAGE>
determine if BMS is fulfilling its diligence and payment obligations under this
Agreement. Such reports shall include (without limitation) the identity of all
Mammalian Targets identified (excluding Related Targets), the identification of
Related Targets (without disclosing the actual identity thereof), and the
identification (without disclosing the structure) of Collaboration Compounds
that have sufficient activity to justify further research and development work
with respect thereto (and BMS shall identify the Mammalian Target against which
such Collaboration Compound has activity), and summaries of the work conducted
with respect thereto. The foregoing shall not require that BMS disclose any
Confidential Information of BMS regarding the identity of (or any information
that would lead to the identification by Exelixis of) any specific Related
Target or Collaboration Compound identified by BMS, materials or processes used
in any assays, structures of any compounds, and research or development plans.
All such reports provided by BMS shall be treated as Confidential Information of
BMS.
5. Technology Sharing Program
5.1 Transfer of Exelixis Core Technology.
(a) Exelixis shall transfer to BMS, on an orderly basis, the Exelixis
Core Technology (including the Exelixis know-how directly relating thereto) and
copies of the Exelixis Core Technology Patents. The timing of transfer of
Exelixis Core Technology shall be in accordance with the schedule set forth in
Exhibit C attached hereto, which exhibit may be modified as appropriate by the
JMT. All Exelixis Core Technology (including any Improvement Inventions thereto
that Exelixis, in its sole discretion, makes) shall be deemed to have been
accepted by BMS upon receipt, and BMS hereby waives all rights of revocation.
(b) In accordance with the delivery schedule set forth in Exhibit C
attached hereto and any modifications thereof, Exelixis will deliver to BMS the
FlyTag Database at Exelixis' expense. The FlyTag Database shall be delivered in
electronic format, or in such other suitable format as selected by Exelixis and
reasonably acceptable to BMS. The FlyTag Database shall be deemed to have been
accepted by BMS upon receipt, and BMS hereby waives all rights of revocation.
(c) Nothing herein shall be construed to require Exelixis to make any
Improvement Inventions to the Exelixis Core Technology, or, except as provided
in Section 5.7(a), to provide training, maintenance, installation, advice,
debugging or other support with regard to the use of, or the correction of any
problems associated with, the Exelixis Core Technology or any Exelixis
Improvement Inventions. If BMS elects to [ * ] provided by Exelixis, such items
shall be deemed to have been accepted by BMS upon the same terms and conditions
as apply to its use of the Exelixis Core Technology hereunder.
5.2 Transfer of BMS Core Technology; Transfer of Source Code; Error
Corrections.
(a) BMS shall transfer to Exelixis, on an orderly basis, the BMS Core
Technology (including the BMS know-how directly relating thereto) and copies of
the BMS Core Technology Patents. The timing of transfer of BMS Core Technology
shall be in accordance with the schedule set forth in Exhibit B attached hereto,
which exhibit may be modified as appropriate by the JMT. All BMS Core Technology
(including any Improvement
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
26.
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Inventions thereto) shall be deemed to have been accepted by Exelixis upon
receipt, and Exelixis hereby waives all rights of revocation.
(b) In accordance with the delivery schedule set forth in Exhibit B
attached hereto and any modifications thereof, BMS will deliver to Exelixis the
BMS Software at BMS' expense. The software included in the BMS Core Technology
(the "BMS Software") shall be delivered in electronic format, or in such other
suitable format as selected by BMS and reasonably acceptable to Exelixis. All
BMS Software (including any Improvement Inventions relating thereto except as
otherwise provided in subclause (i) below) shall be deemed to have been accepted
by Exelixis upon receipt, and Exelixis hereby waives all rights of revocation.
(i) In the event that BMS develops internally, in its sole
discretion, any Improvement Inventions comprising updates, new versions, or
enhancements that directly relate to the BMS Core Technology (including without
limitation the BMS Software) during the Research Term and that are owned or
Controlled by BMS, it shall provide each such update, new version or enhancement
to Exelixis within thirty (30) days after such enhancement, update or new
version is made available to all BMS scientists generally. Exelixis shall have
the right to review any such Improvement Invention prior to incorporation into
Exelixis' internal chemistry technology, and Exelixis may, after a reasonable
period of such internal review, determine that it does not wish to have a
license to any particular Improvement Invention to the BMS Core Technology
(including to the BMS Software) provided by BMS hereunder, in which case
Exelixis shall return to BMS or destroy all copies of such Improvement
Invention, and such Improvement Invention shall not be licensed to Exelixis and
shall be excluded from the definition of "BMS Core Technology" for all purposes
hereunder. As to any such Improvement Invention that Exelixis decides to
incorporate, Exelixis shall be responsible for incorporating such update, new
version, or enhancement into its own software environment and BMS shall have no
obligation, express or implied, to perform any services to assist Exelixis in
incorporating same.
(ii) If BMS acquires software from a Third Party during the
Research Term that is directly related to the BMS Software or is otherwise used
in the BMS Core Technology, BMS will, subject to any confidentiality obligations
it may have to such Third Party, inform Exelixis through the JMT of the
availability of same, but shall have no obligation to provide such new software
program to Exelixis hereunder as part of the BMS Core Technology or as any
Improvement Invention thereto, but BMS agrees to cooperate with Exelixis and
provide reasonable assistance, [ * ], in Exelixis' efforts to obtain a license
to such software, if Exelixis requests. Nothing herein shall be construed to
require BMS to make any enhancements, updates or new versions of the BMS
Software or, except as provided in Sections 5.2(e) and 5.7(b), to provide
training, maintenance, installation, advice, debugging or other support with
regard to the use of, or the correction of any problems associated with, the BMS
Software or any BMS Improvement Inventions relating to the BMS Software. Each
Party shall be solely responsible for providing its own maintenance and support
for the BMS Software, except as otherwise provided in this Section 5.2. If
Exelixis elects to use any updates, enhancements, new versions, bug fixes or
error corrections provided by BMS, such items shall be deemed to have been
accepted by Exelixis upon the same terms and conditions as apply to its use of
the BMS Software hereunder.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
27.
<PAGE>
(c) Exelixis understands and agrees that certain software and
equipment comprising the BMS Core Technology as of the Effective Date are
licensed or obtained from Third Parties and that BMS shall have no obligation to
acquire, sublicense, or obtain same to, for or on behalf of Exelixis, except for
such sublicense rights as can be granted without additional cost to BMS or its
Affiliates and without violating the terms of any license agreement that BMS or
any of its Affiliates may have with a Third Party, but BMS agrees to disclose to
Exelixis the names and suppliers or licensors of such software and equipment and
to cooperate with Exelixis and provide reasonable assistance, at Exelixis'
expense, in Exelixis' efforts to obtain a license to such software or equipment,
if Exelixis so requests.
(d) During the Research Term, BMS will provide to Exelixis, in object
code form and, after the time that BMS has provided to Exelixis under subsection
(e) the source code for the BMS Software, in source code form, any error
corrections or bug fixes to the BMS Software that BMS Controls and makes and
distributes internally to its users for its own use of the BMS Software (or any
part thereof). In addition, BMS will endeavor to provide to Exelixis during the
Research Term, [ * ], error corrections and bug fixes to any applications
software provided by BMS as part of the BMS Core Technology or any BMS
Improvement Invention, but only if, and to the extent that: (1) the source code
for such software is available to BMS and is owned by or licensed to BMS in a
manner such that BMS can make and distribute such corrections and fixes; (2) the
error detected in the software is attributable solely to the application
software itself and not in any way to any software not supplied by BMS
(including without limitation operating system or database engine) or any
equipment used or purchased by Exelixis; (3) the error is not attributable to
operator error, misuse or negligence by Exelixis, failure by Exelixis to install
software or equipment in accordance with applicable specifications, or failure
to comply with applicable and appropriate instructions provided by BMS; (4)
Exelixis fully cooperates with BMS in reporting all necessary information and
data so that BMS may reproduce the error at BMS' facilities; (5) is not software
for which Exelixis has received source code pursuant to subparagraph (e) below;
and (6) BMS also provides the error correction or bug fix generally to its own
internal users. BMS will be reimbursed for its fully-burdened costs to conduct
or provide, at Exelixis' request, error corrections or bug fixes with respect to
any such applications software where it is subsequently discovered that the
request does not meet the standards of the preceding sentence. BMS DOES NOT
GUARANTEE OR PROMISE IN ANY WAY THAT BMS WILL BE SUCCESSFUL IN MAKING AN ERROR
CORRECTION OR BUG FIX OR THAT ANY CORRECTION OR BUG FIX WILL MEET EXELIXIS'
RESEARCH OR BUSINESS NEEDS, AND DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A GIVEN PURPOSE OR USE WITH RESPECT TO ANY SUCH
ERROR CORRECTION OR BUG FIX OR THAT BMS WILL BE SUCCESSFUL IN MAKING AN ERROR
CORRECTION OR BUG FIX OR THAT ANY ERROR CORRECTION OR BUG FIX WILL MEET
EXELIXIS' RESEARCH OR BUSINESS NEEDS.
(e) BMS shall make the source code that it Controls for any software
included in the BMS Core Technology or BMS Improvement Inventions available to
Exelixis promptly upon Exelixis' request. Upon such request (which may not be
made unless Exelixis has accepted the software), BMS shall provide to Exelixis,
in electronic or other mutually agreed format, the
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
28.
<PAGE>
requested source code as BMS then Controls that relates to any software included
in the BMS Core Technology or, where accepted by Exelixis, the BMS Improvement
Inventions, and shall also provide and all documentation related to such source
code. It is understood and agreed that, after providing particular source code
to Exelixis, BMS shall not be responsible for providing Exelixis bug fixes and
error corrections to such software that are requested by Exelixis (but shall
still provide any such bug fixes and error corrections made by BMS
independently, as provided in subsection (d)), and that any other Improvement
Inventions made by BMS to such software for which Exelixis previously received
the source code shall, if accepted by Exelixis, also be provided to Exelixis in
both object code and source code. Prior to an Exelixis request for source code,
BMS need not provide such source code, except where BMS deems it necessary to
provide source code and compiles it in situ, rather than making stand alone
installers for compiled code, in which event BMS may install the source code,
compile it in situ, and then delete the source code.
(f) Exelixis understands and agrees that its confidentiality obligations
with respect to the BMS Core Technology, including software and documentation
provided by BMS, that comprises BMS Confidential Information shall continue
[ * ].
(g) Exelixis understands and agrees that certain drawings (e.g., CAD
drawings and assembly drawings for fabricated parts) and blueprints contained in
the BMS Core Technology relating to equipment design will, where Controlled by
BMS, be provided "AS IS", and that Exelixis will receive copies of same. If BMS
creates and Controls improved drawings or blueprints during the Research Term,
copies of these will be provided to Exelixis. Exelixis further understands that
BMS has fabricated for itself certain parts where BMS has not prepared the
assembly drawings for Third Party fabrication. During the Research Term, BMS
will make these parts for Exelixis at Exelixis' expense [ * ] until such time as
BMS prepares the assembly drawings and Exelixis is able to have these parts
fabricated by Third Parties.
(h) Exelixis acknowledges that BMS has provided it with a list of
equipment and software supplies that Exelixis will need to purchase or license
in order to use the BMS/HTC System (as set forth on Exhibit B), and that
Exelixis has had opportunity to inquire of BMS as to what its specific needs
will be and has received satisfactory answers to same. Exelixis acknowledges
that it has had adequate opportunity to review the BMS Core Technology with BMS.
Exelixis understands that certain of the equipment used by BMS within the BMS
Core Technology is manufactured for BMS by machine shops based on
specifications, drawing and blueprints provided by BMS or developed by such
machine shops. BMS will reasonably cooperate during the Research Term and at
Exelixis' expense with any efforts of Exelixis to use such machine shops for the
manufacture of the same equipment for Exelixis and will reasonable efforts to
persuade such machine shops to make any drawings possessed by them available for
use by Exelixis on the same terms as the same may be made available for use by
BMS.
(i) Nothing herein shall be construed to require BMS to make any
Improvement Inventions to the BMS Core Technology, or, except as provided in
Sections 5.2(e) and 5.7(b), to provide training, maintenance, installation,
advice, debugging or other support with regard to the use of, or the correction
of any problems associated with, the BMS Core Technology or any BMS Improvement
Inventions. If Exelixis elects to use any BMS Improvement Inventions provided by
BMS, such items shall be deemed to have been accepted
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
29.
<PAGE>
by Exelixis upon the same terms and conditions as apply to its use of the BMS
Core Technology hereunder.
(j) Notwithstanding the [ * ], if Exelixis undergoes a Major Control
Change (as defined below) prior to the end of the Research Term, then BMS shall
[ * ] disclose, provide, transfer or license to Exelixis any new Improvement
Inventions to the BMS Core Technology that BMS may make, including without
limitation any updates or error corrections or improvements to the BMS Software.
(i) As used in this Agreement, "Major Control Change" shall mean
a completed [ * ], or all or substantially all of the assets of Exelixis'
business relating to [ * ].
5.3 Technology Licenses To BMS.
(a) Subject to the terms of this Agreement, Exelixis hereby grants
BMS a limited, non-exclusive, non-transferable, worldwide, perpetual (subject to
termination under Section 3.2(a) or Article 11) license to use and practice the
Exelixis Core Technology, Exelixis Core Technology Patents, and any Improvement
Inventions made solely by Exelixis to the BMS Core Technology solely for its own
internal research and discovery efforts in the Field, and subject to the
limitations in this Section 5.3 and Section 5.4(a) of this Agreement. BMS may
use the results and products of its permitted practice of the Exelixis Core
Technology, the Exelixis Core Technology Patents, and any Improvement Inventions
made solely by Exelixis to the BMS Core Technology for all commercial purposes.
BMS' use of Exelixis' Drosophila technology under the foregoing license is
subject to the following limitations: (i) no more than [ * ] may utilize such
technology during the "Research Term" (as defined in the agreement between
Exelixis and a certain partner) in the U.S. [ * ]; (ii) no work may be performed
on certain genes or proteins that, as of the Effective Date, are the focus of
research being pursued under a collaboration between Exelixis and a certain
partner for the duration of such "Research Term" with such certain partner; and
(iii) BMS may not commence research utilizing such technology in the fields of [
* ] before [ * ]. Exelixis covenants that it shall inform BMS upon expiration or
termination of the "Research Term" referred to in subclause (i) above.
(b) Subject to the terms of this Agreement, Exelixis hereby grants to
BMS a limited, non-exclusive, non-transferable, world-wide, perpetual (subject
to termination under Section 3.2(a) or Article 11) license to use, adapt,
reproduce, modify, localize, and create derivative works of the FlyTag Database,
provided that (i) all such uses of the FlyTag Database are solely for BMS'
internal or collaborative research purposes, (ii) are used in the same manner,
and subject to the same terms and conditions, as apply to the FlyTag Database,
and (iii) are subject to the limitations in this Section 5.3 and Section 5.4(b)
of this Agreement. The foregoing license includes the right to make copies of
the FlyTag Database for the purposes of the exercise of such license, including
without limitation appropriate numbers of copies for BMS' internal back-up and
archival purposes, provided that all such copies shall bear the original and
unmodified copyright, patent and other intellectual property markings as when
originally delivered by Exelixis. The FlyTag Database may only be used by
authorized employees or contractors of BMS at the facilities owned or leased by
BMS (except that authorized employees and contractors of BMS and its
Affiliates shall be entitled to access the FlyTag Database over BMS' Intranet or
remotely from outside such facilities), and such use shall be limited to the
uses licensed to BMS under the first sentence of this Section 5.3(b). All
rights, title and interests in and to the FlyTag Database licensed hereunder,
and any copies, translations or compilations thereof which may be made or
permitted to be made hereunder by BMS are and shall remain the exclusive
property of Exelixis, except for such data as BMS may have entered into the
database following receipt of the FlyTag Database from Exelixis and derivative
works of the Fly Tag Database, which data and derivative works, (excluding any
Exelixis information or code therein) shall remain the exclusive property of BMS
(and in which BMS shall retain all rights, title and interests), and BMS shall
not be obligated to provide or disclose such data to Exelixis during or
following the termination of this Agreement. For purposes of the foregoing,
"derivative works" means any computer program that may be developed containing
any part of the software database, regardless of the form of the resulting code,
the media it is carried on, or its intended use. For clarity, it is understood
that Exelixis grants to BMS hereunder no right or license under or to any
improvements or additions to the FlyTag Database made after the Effective Date,
other than corrections of sequence errors that Exelixis may identify or become
aware of.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
30.
<PAGE>
(c) The licenses granted in subsections (a) and (b) above will,
subject to the applicable provisions of Article 11, continue beyond the
expiration or termination of the Research Term.
(d) The license rights granted in subsections (a) and (b) above may
not be sublicensed to a Third Party without the prior written consent of
Exelixis. BMS covenants that it will not transfer or disclose any such Exelixis
Core Technology, Exelixis Core Technology Patents or FlyTag Database to any
Third Party except as part of such permitted sublicenses and only subject to
limitations consistent with the above restrictions and those in Section 5.4.
BMS may transfer or disclose any such Exelixis Core Technology, Exelixis Core
Technology Patents or FlyTag Database to any of its Affiliates without the prior
consent of Exelixis provided that such transfer or disclosure occurs pursuant to
an agreement that subjects such Affiliate to all relevant limitations in this
Agreement, including without limitation, the restrictions set forth in this
Section 5.3 and Section 5.4. BMS hereby guarantees the compliance of each of its
Affiliates with all such restrictions and limitations on the use of such
Exelixis Core Technology (including know-how relating thereto), Exelixis core
Technology Patents or FlyTag Database transferred or disclosed to such
Affiliate, and any such failure to comply with such restrictions and limitations
shall be deemed a breach by BMS of such obligations.
5.4 Limitations on BMS License.
(a) BMS understands and agrees that Exelixis retains all its rights to
use all technology, Information and intellectual property rights related to
Exelixis Core Technology for its own purposes and to license or disclose such
technology, Information and intellectual property rights to Third Parties
without restriction, subject only to the right and the licenses granted to BMS
in Section 5.3 of this Agreement. BMS covenants that it and its Affiliates shall
not use or practice the Exelixis Core Technology, Exelixis Core Technology
Patents or FlyTag Database for any use or purpose except as expressly permitted
in Section 5.3. BMS further covenants that BMS and its Affiliates will not sell
or otherwise transfer to a Third Party or commercialize any Exelixis Core
Technology or any technology incorporating Exelixis Core Technology, except as
permitted in Section 5.3, but excluding from the foregoing limitation any
technology that both (i) is discovered or synthesized by BMS or its Affiliates
without material reliance on or material use of any Confidential Information of
Exelixis disclosed to BMS pertaining to Exelixis' Core Technology, and (ii) that
does not infringe a Valid Claim of any Exelixis Core Technology Patents licensed
to BMS hereunder.
(b) BMS may not: (i) distribute in any manner the FlyTag Database or
any derivative work of any portion of the FlyTag Database, except as expressly
permitted in this Agreement; (ii) publicly disclose, publicly perform or
publicly display the FlyTag Database; (iii) use, copy, compile, adapt, translate
the FlyTag Database except as expressly permitted in this Agreement; (iv) sell,
lease, loan, trade, transfer (including over a network including the Internet,
but excluding the Intranet used by BMS and its Affiliates solely to the extent
permitted in Section 5.3(b)), sublicense, market or publish the FlyTag Database
except as expressly permitted in this Agreement; or (v) copy the documentation,
except as expressly permitted in this Agreement. BMS acknowledges and agrees
that the FlyTag Database is highly confidential and warrants the imposition of
appropriate security precautions at least as strict as those implemented for its
own similar proprietary or confidential information.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
31.
<PAGE>
5.5 Technology Licenses To Exelixis.
(a) Subject to the terms of this Agreement, BMS hereby grants Exelixis a
limited, non-exclusive, non-transferable, worldwide, perpetual (subject to
termination under Section 3.2(a) or Article 11) license to use and practice the
BMS Core Technology, BMS Core Technology Patents, and any Improvement Inventions
made solely by BMS to the Exelixis Core Technology (but excluding any
improvements or additions to the FlyTag Database made after the Effective Date
other than corrections of errors in the sequence information that are made or
determined by BMS or its Affiliate) solely for its own internal research and
discovery efforts, and subject to the limitations in this Section 5.5 and
Section 5.6 of this Agreement. Exelixis may use the results and products of its
permitted practice of the BMS Core Technology, the BMS Core Technology Patents,
and any Improvement Inventions made solely by BMS to the Exelixis Core
Technology for all commercial purposes. Exelixis acknowledges that the Bohdan
mini-reactors must be purchased from Bohdan and cannot be manufactured by or for
Exelixis.
(b) Subject to the terms of this Agreement, BMS hereby grants to Exelixis
a limited, non-exclusive, non-transferable, world-wide, perpetual (subject to
termination under Section 3.2(a) or Article 11) license, solely within Exelixis'
organization and facilities: to use, adapt, reproduce, modify, localize, and
create derivative works of the BMS Software, and to compile the source code into
object code form of the BMS Software, provided (i) that all such uses of the BMS
Software are solely for Exelixis' internal or collaborative research purposes
(and provided that no such collaborators have access to the BMS Software), (ii)
are used in the same manner, and subject to the same terms and conditions, as
apply to the BMS Software, and (iii) are subject to the limitations in this
Section 5.5 and Sections 5.2 and 5.6(b) of this Agreement. The foregoing license
includes the right to make copies of the BMS Software for the purposes of the
exercise of such license, including without limitation appropriate numbers of
copies for Exelixis' internal back-up and archival purposes, provided that all
such copies shall bear the original and unmodified copyright, patent and other
intellectual property markings as when originally delivered by BMS. All rights,
title and interests in and to the BMS Software licensed hereunder, and any
copies, translations or compilations thereof which may be made or permitted to
be made hereunder by Exelixis are and shall remain the exclusive property of
BMS. [ * ] any derivative works of the BMS Software made by or on behalf of
Exelixis (but excluding any of the actual BMS Software code in such derivative
works). Further Exelixis shall not have the right to license the BMS Source Code
contained in any such derivative works made by or on behalf of Exelixis. For
purposes of the foregoing, "derivative works" means any computer program that
may be developed containing any part of the software, regardless of the form of
the resulting code, the media it is carried on, or its intended use.
(c) The licenses granted in subsections (a) and (b) above will, subject
to the applicable provisions of Article 11, continue beyond the expiration or
termination of the Research Term.
(d) The license rights granted in subsections (a) and (b) above may not
be sublicensed to a Third Party without the prior written consent of BMS.
Exelixis covenants that it will not transfer or disclose any such BMS Core
Technology (including know-how relating thereto), BMS Core Technology Patents or
BMS Software to any Third Party except as part of such permitted sublicenses and
only subject to limitations consistent with the above restrictions
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
32.
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and those in this Sections 5.5 and Section 5.6. Exelixis may transfer or
disclose any BMS Know-How, BMS Patents or BMS Software to any of its Affiliates
provided that such transfer or disclosure occurs pursuant to an agreement that
subjects such Affiliate to all relevant limitations in this Agreement, including
without limitation, the restrictions set forth in this Section 5.5 and Section
5.6. Exelixis hereby guarantees the compliance of each of its Affiliates with
all such restrictions and limitations on the use of the BMS Core Technology
(including without limitation the BMS know-how relating thereto), BMS Core
Technology Patents or BMS Software transferred or disclosed to such Affiliate,
and any such failure to comply with such restrictions and limitations shall be
deemed a breach by Exelixis of such obligations.
(e) If, at any time prior to the date (the "End Date") that is [ * ]
Exelixis receives from BMS the last BMS Improvement Invention to the BMS
Software that is provided by BMS under Section 5.2(b) (but excluding from the
foregoing any such BMS Improvement Invention that Exelixis determines not to
accept, under the terms of Section 5.2(b)(i), and which is thereby excluded from
the definition of BMS Core Technology), Exelixis undergoes a Major Control
Change (as defined in Section 5.2(i)), then:
(i) Exelixis shall ensure, and shall demonstrate same to BMS'
reasonable satisfaction upon BMS' reasonable request from time to time
thereafter until the End Date, that prior to the End Date: (A) employees of [ *
] (or intellectual property relating thereto) that, at the particular time,
comprises Restricted BMS Core Technology (as defined below); (B) [ * ] (or
intellectual property relating thereto) that, at the particular time, qualifies
as Restricted BMS Core Technology; and (C) [ * ] in excess of [ * ] of the FTEs
that were utilizing such BMS Core Technology just prior to such transaction,
without the prior written consent of BMS;
(ii) If Exelixis materially fails to comply with the
requirements of subclause (i) above at any time prior to the End Date, then,
subject to the dispute resolution provisions of Section 14.1, [ * ]. The
obligations of Exelixis, and rights [ * ] as of the End Date.
(iii) For purposes of this Section 5.5(e), a particular item of
Information or intellectual property right within the BMS Core Technology (which
includes the Improvement Inventions thereto made by BMS and transferred to
Exelixis (without rejection) under Section 5.2) shall be "Restricted BMS Core
Technology" from the date such item of Information (or intellectual property
right) is actually received by Exelixis until the third anniversary of such
date; after such third anniversary, such item of Information shall [ * ] shall,
however, remain governed by the terms and conditions of this Agreement as would
apply to any other Exelixis Affiliate, including without limitation, Sections
5.2 and 5.6 hereof.
5.6 Limitations on Exelixis License.
(a) Exelixis understands and agrees that BMS retains all its rights to
use all technology, Information and intellectual property rights for its own
purposes related to BMS Core Technology and to license or disclose such
technology, Information and intellectual property rights to Third Parties
without restriction, subject only to the right and the licenses granted to
Exelixis in Section 5.5 of this Agreement. Exelixis covenants that it and its
Affiliates shall not use or practice the BMS Know-How, BMS Patents or BMS
Software for any use or purpose except as expressly permitted in Section 5.5.
Exelixis further covenants that Exelixis
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
33.
<PAGE>
and its Affiliates will not sell or otherwise transfer to a Third Party or
commercialize any BMS Core Technology or any technology derived from BMS Core
Technology, except as permitted in Section 5.5, but excluding from the foregoing
limitation any technology that is discovered or synthesized by Exelixis or its
Affiliates completely independent of any activity permitted under this Agreement
and without reliance on any Confidential Information of BMS disclosed to
Exelixis.
(b) Exelixis may not: (i) distribute in any manner any of the BMS
Software or any derivative work of any portion of the BMS Software, except as
expressly permitted in this Agreement; (ii) publicly disclose, publicly perform
or publicly display the BMS Software; (iii) use, copy, compile, adapt, translate
the BMS Software except as expressly permitted in this Agreement; (iv) sell,
lease, loan, trade, transfer (including over a network including the Internet),
sublicense, market or publish the BMS Software except as expressly permitted in
this Agreement; or (v) copy the documentation, except as expressly permitted in
this Agreement. Exelixis acknowledges and agrees that the source code of the BMS
Software is highly confidential and warrants the imposition of appropriate
security precautions at least as strict as those implemented for its own similar
proprietary or confidential information.
5.7 Provision of Training; Disclaimers.
(a) Exelixis hereby agrees to provide specified BMS employees with
training regarding the use of the Exelixis Core Technology at no charge other
than that set forth in Section 8.1. Such training shall be provided at Exelixis'
facilities, unless otherwise agreed by the Parties, by reasonably qualified
employees or consultants hired and provided at the discretion of Exelixis. All
salary, benefits, costs and expenses of any BMS employees who participate in
such training program shall be paid for by BMS. All BMS employees who attend
Exelixis' facilities shall be restricted from access to any Exelixis facilities
or locations other than those necessary for completing the technology transfer
and shall be subject to appropriate and reasonable limitations and restrictions
to protect access to any Exelixis' proprietary or confidential information not
related to this Agreement. Such training will be limited to a reasonable amount
necessary to enable a person reasonably skilled in the area to assimilate the
technology being provided.
(b) BMS hereby agrees to provide specified Exelixis employees with
training regarding the use of the BMS Core Technology at no charge. Such
training shall be provided at BMS' facilities, unless otherwise agreed by the
Parties, by reasonably qualified employees or consultants hired and provided at
the discretion of BMS. All salary, benefits, costs and expenses of any Exelixis
employees who participate in such training program shall be paid for by
Exelixis. All Exelixis employees who attend BMS' facilities shall be restricted
from access to any BMS facilities or locations other than those necessary for
completing the technology transfer and training and shall be subject to
appropriate and reasonable limitations and restrictions to protect access to any
BMS' proprietary or confidential information not related to this Agreement. Such
training will be limited to a reasonable amount necessary to enable a person
reasonably skilled in the area to assimilate the technology being provided.
(c) EACH PARTY REPRESENTS AND WARRANTS TO THE OTHER THAT IT HAS THE
RIGHT TO SUPPLY THE CORE TECHNOLOGY SUPPLIED BY IT
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
34.
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FOR USE BY THE OTHER PARTY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT. EACH
PARTY ACKNOWLEDGES THAT THE CORE TECHNOLOGY AND IMPROVEMENT INVENTIONS LICENSED
TO IT BY THE OTHER PARTY ARE BEING SUPPLIED "AS IS" AND "WITH ALL FAULTS".
EXCEPT FOR THE FIRST SENTENCE OF THIS PARAGRAPH AND AS MAY BE EXPRESSLY SET
FORTH ELSEWHERE IN THIS AGREEMENT, THE LICENSING PARTY MAKES AND EXTENDS NO, AND
THE PARTY RECEIVING THE OTHER PARTY'S CORE TECHNOLOGY WAIVES ANY AND ALL,
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED WITH RESPECT TO THE LICENSING
PARTY'S CORE TECHNOLOGY AND ANY IMPROVEMENT INVENTIONS PROVIDED BY THE LICENSING
PARTY, INCLUDING WITHOUT LIMITATION (1) IMPLIED WARRANTIES OF MERCHANTABILITY OR
OF FITNESS FOR A PARTICULAR PURPOSE OR USE, (2) ANY WARRANTIES PERTAINING TO
ABSENCE OF INFRINGEMENT OF THIRD PARTY PATENTS, COPYRIGHTS, TRADEMARKS, OR OTHER
INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY, AND (3) ANY WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, THAT THE OPERATION OF ANY SOFTWARE PROVIDED
WILL BE UNINTERRUPTED OR ERROR-FREE AND WILL NOT CORRUPT ANY DATA, OR THAT ANY
DEFECTS IN SOFTWARE PROVIDED ARE CORRECTABLE OR WILL BE CORRECTED.
NO SOFTWARE LICENSOR HEREUNDER SHALL BE LIABLE TO THE LICENSEE FOR ANY
CLAIM, CAUSE OF ACTION, LOSS, EXPENSE, COST, LIABILITY OR DAMAGES OF ANY KIND OR
NATURE WHATSOEVER, INCLUDING WITHOUT LIMITATION ARISING OUT OF, INVOLVING OR
CONNECTED WITH (1) THE DEFICIENCY OR INADEQUACY OF THE LICENSED SOFTWARE FOR ANY
PURPOSE, WHETHER OR NOT KNOWN OR DISCLOSED TO ANY SOFTWARE LICENSOR; (2) THE USE
OR PERFORMANCE OF THE LICENSED SOFTWARE OR ANY FILES, DATA OR COMPUTER SYSTEMS
RELATED THERETO OR USED IN CONNECTION THEREWITH; (3) ANY INTERRUPTION, DAMAGE
TO, OR LOSS OF SERVICE OR USE OF THE LICENSED SOFTWARE OR ANY DATA, FILES,
SOFTWARE, HARDWARE OR OTHER EQUIPMENT USED IN CONNECTION THEREWITH; (4) ANY
FAILURE OF THE LICENSED MATERIAL; (5) ANY INFRINGEMENT OR VIOLATION OF THE
PATENT RIGHTS, COPYRIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES; OR (6) ANY DIRECT, INDIRECT, EXEMPLARY, PUNITIVE, SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR OTHER LOSS OR DAMAGE OF ANY KIND OR NATURE (INCLUDING WITHOUT
LIMITATION LOST PROFITS, SALES OR BUSINESS) ARISING OUT OF THE USE OF THE
SOFTWARE OR DATA OBTAINED FROM SUCH USE, NOTWITHSTANDING ANY FAILURE OF ANY
ESSENTIAL OR LIMITED REMEDY AND WHETHER OR NOT ANY SOFTWARE OWNER MAY HAVE BEEN
ADVISED OF THE POSSIBILITY OF DAMAGES.
5.8 Non-Solicitation. During the Research Term and for [ * ] thereafter,
neither party will solicit or hire any employees of the other party or its
Affiliates involved, in the case of BMS, in its combinatorial chemistry
(including software development) or drug discovery programs (including
bioinformatics), and in the case of Exelixis, in its mode of action discovery
programs.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
35.
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6. Licenses and Related Rights
6.1 Licenses to BMS.
(a) Research Results. Subject to the terms of this Agreement,
Exelixis hereby grants BMS an exclusive (subject to Sections 4.12 and 7.2),
worldwide, royalty-bearing license (with the right to sublicense) to use
Research Results pertaining to Selected Targets, Product Targets, Mammalian
Targets and Pursued Disclosed Targets for research and drug discovery and
development in the Field, and to research, develop, import, use, sell, offer for
sell, and commercialize Collaboration Compounds, Licensed Products and New
Indications in the Field.
(b) Target Patents. Subject to the terms of this Agreement, Exelixis
hereby grants BMS a non-exclusive, worldwide, royalty-bearing license (with the
right to sublicense) under any Patents that are Controlled by Exelixis or its
Affiliates and claim any of the Research Results and/or any Selected Targets,
Pursued Disclosed Targets or Mammalian Targets, solely to discover, research and
develop Collaboration Compounds, Licensed Products, and New Indications in the
Field, and to research, develop, import, use, sell, offer for sell, and
commercialize Licensed Products and New Indications in the Field.
(c) Novel Target Patents. Subject to the terms of this Agreement,
Exelixis hereby grants BMS an exclusive (subject to Sections 4.12 and 7.2),
worldwide, royalty-bearing license (with the right to sublicense) under any and
all Novel Target Patents that, but for the license granted hereunder, would be
infringed by the manufacture, use or sale of Gene Products and other
Biotherapeutics, solely to discover, research, develop, import, use, sell, offer
for sell, and commercialize Gene Products and Biotherapeutic Products.
6.2 License Limitations and Retained Rights; Retained Rights Restrictions.
(a) License Limitations and Retained Rights. Notwithstanding the
license granted in Section 6.1(a), Exelixis retains [ * ] and to use the
Research Results generated by Exelixis pertaining to Abandoned Targets both
within and outside the Field. BMS hereby covenants that, except in furtherance
of its internal research in the Field, BMS and its Affiliates will not use the
[ * ], and that BMS and its Affiliates will not practice any Exelixis Patents
licensed to BMS under Section 6.1 except as expressly permitted under the terms
of such Section.
(b) Retained Rights Restrictions. Notwithstanding that the license
rights granted to BMS under Section 6.1(b) are non-exclusive and any provision
that might imply to the contrary hereunder, Exelixis shall not be entitled: (1)
[ * ], and (2) [ * ].
6.3 Licenses to Exelixis.
(a) Outside of Field. Subject to the terms of the Agreement, BMS
hereby grants to Exelixis an exclusive, worldwide, royalty-free license (with
the right to sublicense) under the [ * ] (and the intellectual property rights
appurtenant thereto) that are made [ * ] and that relate solely to the
composition of matter or utility of a [ * ], solely to discover, identify and
research [ * ] solely for use outside the Field and solely to develop, make,
have made, use, sell, offer to sell, have sold and import products comprising or
incorporating [ * ] for any use or purpose outside the Field. For clarity it is
understood that BMS and its Affiliates shall retain the
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
36.
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right to use [ * ] (and the intellectual property rights appurtenant thereto)
outside the Field, solely for its internal research purposes. Exelixis will not
sublicense BMS' rights to Third Parties under such Inventions that relate to the
composition or utility of a particular [ * ], for non-pesticide applications
(but not other applications outside the Field), until [ * ] after selection by
BMS of [ * ] by BMS or becomes known to Third Parties to be [ * ] of interest.
Exelixis will not sublicense to any Third Parties BMS' rights under any
Invention made by BMS covering the [ * ] for any purpose outside the Field until
the earlier of the date (1) that [ * ] after disclosure of the Invention to
Exelixis. For sake of clarity, the preceding sentence does not, without
limitation, cover or include rights under any Inventions or patents owned or
controlled by BMS pertaining to any [ * ] thereof, compounds or their uses,
screening assays and their uses, biomaterials used to conduct screening (other
than the [ * ] relating thereto, as the case may be), know-how or techniques
(including without limitation screening techniques and know-how), and processes
(including without limitation manufacturing techniques or processes). Exelixis
hereby covenants that it and its Affiliates will not practice any of the BMS
Patent rights licensed to it under this Section 6.3(a) except as expressly
permitted by the terms hereof.
(b) Abandoned Targets. Subject to the terms of the Agreement, BMS
hereby grants to Exelixis [ * ] under the Sole Inventions of BMS and under BMS'
interest in the Joint Inventions (and the intellectual property rights
appurtenant thereto) that are made by BMS during the Research Term and [ * ]:
(i) to discover, identify and research [ * ]; (ii) to develop, make, have made,
use, sell, offer to sell, have sold and import [ * ]; and (iii) to develop,
make, have made, use, sell, offer to sell, have sold and import, [ * ]. For sake
of clarity, the preceding sentence does not cover or include rights under any
[ * ]. Exelixis hereby covenants that it and its Affiliates will not practice
any of the BMS Patent rights licensed to it under this Section 6.3(b) except as
expressly permitted by the terms hereof.
(c) Breach of Diligence Obligations. Effective upon the date that BMS
fails to fulfill its diligence obligations set forth in Section 4.9 or 4.10, as
the case may be (or, if BMS disputes such failure, if and upon the date that
such matter is finally resolved pursuant to Section 14.1 in Exelixis' favor),
with respect to a particular Selected Target, BMS hereby grants Exelixis [ * ]
and/or a Mammalian Target (excluding Related Targets) of such Selected Target
that are made by BMS during the Research Term and that relate solely to the
composition of matter (both nucleic acid and protein products thereof) or
utility of [ * ], solely to discover, develop, make, have made, use, sell, offer
to sell and have sold compounds active against [ * ] (in the case of breach of
Section 4.10). For sake of clarity, the preceding sentence does not cover or
include rights under any Inventions or patents owned or controlled by BMS
pertaining to any Collaboration Compounds, Biotherapeutic Products discovered by
BMS, know-how or techniques (including without limitation screening techniques
and know-how), and processes (including without limitation manufacturing
techniques or processes). Exelixis hereby covenants that it and its Affiliates
will not practice any of the BMS Patent rights licensed to it under this Section
6.3(c) except as expressly permitted by the terms hereof.
6.4 Right of First Negotiation. Upon the earlier of the conclusion of
Phase II clinical trials on, or Exelixis' decision to invite a Third Party to
submit a written offer to acquire a license to develop and commercialize, any
Gene Product or other Biotherapeutic Product developed by Exelixis pursuant to
exercise of its license rights under Section 6.3(c) or 6.3(b)(iii), Exelixis
shall inform BMS in writing of same, and BMS shall have the opportunity to
negotiate
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed Separately with the Securities and Exchange
commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
37.
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with Exelixis to acquire a license to develop and commercialize such Gene
Product or other Biotherapeutic Product. BMS shall have [ * ] following receipt
of such written notice in which to inform Exelixis in writing that it is
interested in acquiring such a license. Thereafter, the Parties shall negotiate
in good faith for [ * ] to reach agreement on the terms of a license agreement
which shall be set forth in either an executed license agreement or an executed
legally binding heads of agreement, which terms shall include, upon execution of
the definitive written agreement, the payment by BMS to Exelixis equal to [ * ]
costs incurred by Exelixis after the effective date of the license set forth in
Section 6.3(c) or 6.3(b)(iii) with respect to such Gene Product or other
Biotherapeutic Product. If BMS fails to notify Exelixis of its interest or the
Parties fail to execute a license agreement within the applicable period, then
BMS shall have no rights with respect to such product and Exelixis shall have
unrestricted rights to pursue [ * ] such Gene Product or other Biotherapeutic
Product or to license such rights to such Gene Product or other Biotherapeutic
Product to a Third Party.
7. Exclusivity
7.1 BMS.
(a) BMS agrees that, during the Research Term, the Pharmaceutical
Research Institute of BMS will, if it wishes to collaborate with any commercial
Third Party for the [ * ], give Exelixis the [ * ] the right to perform the
collaborative work that BMS would require of such Third Party. Exelixis shall
have [ * ] following receipt of notice from BMS in writing as to same (and
describing the work to be required of Exelixis) in which to inform BMS in
writing that it is interested in performing such work. Thereafter, Exelixis and
BMS shall negotiate in good faith for [ * ] to reach agreement on the terms of a
collaboration which shall be set forth in either an executed collaboration
agreement or an executed legally binding heads of agreement. If Exelixis fails
to notify BMS of its interest or Exelixis and BMS fail to execute a
collaboration agreement within the applicable period, then BMS may freely engage
a Third Party to perform such work, provided that the foregoing does not give
BMS any right to sublicense any such Third Party to use any Exelixis Core
Technology. The foregoing shall not preclude BMS in any way during or following
the Research Term from (i) performing internal research of any type in [ * ],
(ii) from engaging consultants, or (iii) from sponsoring or collaborating with
academic Third Parties with respect to research of any type in [ * ]; provided
that such research and activities under (i)-(iii) comply with the limitations of
the license set forth in Section 5.2.
(b) During the Research Term, if BMS intends to engage any Third
Party to perform [ * ], BMS shall give good faith consideration as to whether
Exelixis [ * ] would be an appropriate party to perform such work. To keep BMS
informed of their respective genomic research capabilities, each of Exelixis and
Artemis shall be permitted, if they so choose, to make a presentation at JSC
meetings, no more frequently than semi-annually, of such current research
capabilities.
7.2 Exelixis. Except as otherwise provided in Section 6.3, Exelixis will
not knowingly grant a Third Party access to the Research Results relating to a
Selected Target, Product Target or Disclosed Target. Notwithstanding the
previous sentence, although Exelixis shall use Diligent Efforts to maintain
exclusivity, in view of the nature of the Exelixis technology, it is impossible
for Exelixis to assure exclusivity with respect to the individual
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
38.
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elements of that Exelixis generates, delivers and licenses to BMS under this
Agreement in the following two situations:
(a) Exelixis may be engaged by a Third Party to identify the target
of a compound under an arrangement whereby the identity of the compound is
unknown to Exelixis. Provided that Exelixis does not use any Confidential
Information of BMS or Research Results in such research, Exelixis may reveal to
the Third Party and the Third Party shall be entitled to use, for any purpose,
all information generated by Exelixis with respect to the target. Exelixis will
promptly notify BMS in writing each time that a Target is disclosed to the Third
Party pursuant to such work.
(b) Exelixis may perform Independent Research upon molecules that are
Selected Targets, Pursued Disclosed Targets or Product Targets, provided that
such Targets had been identified by Exelixis in Independent Research and
provided further that Exelixis does not use Confidential Information of BMS or
Research Results in identifying such Targets or in the subsequent Independent
Research on such Target. If such Independent Research is funded by a Third
Party, separate experiments would be performed for the Mode of Action Program
and said Independent Research, and Exelixis would not share the Research Results
of or other Information (whether generated by BMS or Exelixis) generated under
the Mode of Action Program with any Third Party involved in the Independent
Research nor would Exelixis share the results of or other information concerning
the Independent Research with BMS or the JSC. In such case, Exelixis would be
free to disclose and license the results of such Independent Research to such
Third Party.
(c) The exclusivity of the license rights granted to BMS in Section
6.1(b) shall be subject to the grant of licenses to Third Parties consistent
with paragraphs (a) and (b) of this Section 7.2. Upon request of the JMT,
Exelixis shall consult with the JMT from time to time regarding its procedures
for seeking to avoid overlapping research activities on behalf of multiple Third
Parties.
7.3 BMS License to [ * ]. In the event that BMS receives a license to
either or both of the [ * ] (or their foreign counterparts) that BMS is able to
sublicense to Exelixis, BMS shall promptly notify Exelixis of same and shall
describe the terms and conditions that Exelixis will need to comply with in
order to obtain a sublicense under [ * ]. Such terms and conditions may require
the payment of fees and other compensation [ * ] (or reimbursement to BMS for
fees and other compensation required by it to be paid [ * ]) for the grant of a
sublicense, but otherwise any grant of such a sublicense shall be structured so
as [ * ]. If BMS seeks a license to the above patents, it agrees to request the
right from [ * ] to such patents on reasonable terms; provided, that it is
understood and agreed that nothing in the foregoing shall require BMS, expressly
or impliedly: (A) [ * ] under any of the foregoing patents as a condition of any
license sought or obtained by it; or (B) in order to obtain sublicensable rights
or to grant a sublicense thereunder to Exelixis (if sublicensable rights can be
obtained), to limit BMS' own rights, or assume any obligations or burdens
(including without limitation making any payments) that it cannot pass through
upon grant of a sublicense to Exelixis, in addition to or different from those
that BMS would otherwise have made, granted or assumed if it had obtained a non-
sublicensable license to the foregoing patent(s). If Exelixis indicates to
BMS, within thirty (30) days after BMS has notified Exelixis of the terms and
conditions required for a sublicense to the [ * ], that Exelixis
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
39.
<PAGE>
would like to take a sublicense, then the Parties will use diligent, good faith
efforts to finalize and execute a written sublicense as promptly as practicable
thereafter incorporating such terms. If Exelixis indicates that it does not wish
to take a sublicense on such terms, then BMS shall have no further obligation to
Exelixis with respect to the grant of a sublicense to [ * ]. BMS agrees that, if
it receives an exclusive license to any of the above-referenced ArQule patents,
it will take such exclusive license only if [ * ].
8. Compensation
8.1 Technology Access Fee. In partial consideration for the rights and
licenses granted to BMS by Exelixis in Article 5, BMS to pay Exelixis [ * ] upon
the Effective Date and [ * ] on the first anniversary of the Effective Date.
[ * ].
8.2 Research Support. During the Research Term, BMS will make quarterly
advance payments to Exelixis equal to [ * ] for that quarter as set forth in
Section 3.4. Any research support payments made by BMS to Exelixis hereunder
shall be noncreditable and nonrefundable.
8.3 Milestone Payments for Selected Targets and Pursued Disclosed Targets.
(a) For each Selected Target, BMS shall pay Exelixis [ * ] on the
date that BMS commences screening of any Mammalian Target related to such
Selected Target.
(b) For each Pursued Disclosed Target, BMS shall pay Exelixis [ * ]
on the date that BMS commences screening of any Mammalian Target related to such
Pursued Disclosed Target.
8.4 Milestone Payments for Compound Products. BMS shall make to Exelixis
the following milestone payments for Compound Products:
(a) Novel Target. For each Compound Product comprising or
incorporating a Collaboration Compound that directly and selectively inhibits,
activates or otherwise modulates the activity of a Novel Target or its encoded
protein, BMS shall make to Exelixis the milestone payments set forth below
within [ * ] of the achievement of each of the following events:
(i) [ * ] upon approval of the first Preclinical Lead Profile
for any Collaboration Compound having activity with respect to a particular
Novel Target;
(ii) [ * ] upon filing of an IND for such a Compound Product;
(iii) [ * ] upon initiation of Phase III Clinical Trials for such
a Compound Product;
(iv) [ * ] upon filing of an NDA for such a Compound Product; and
(v) [ * ] upon the first Regulatory Approval in any Major Market
for such a Compound Product.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
40.
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(b) Unlinked Related Target. For each Compound Product comprising or
incorporating a Collaboration Compound that directly and selectively inhibits,
activates or otherwise modulates the activity of an Unlinked Related Target or
its encoded protein, BMS shall make to Exelixis the milestone payments set forth
below within [ * ] of the achievement of each of the following events:
(i) [ * ] upon approval of the first Preclinical Lead Profile
for any Collaboration Compound having activity with respect to a particular
Unlinked Related Target;
(ii) [ * ] upon filing of an IND for such a Compound Product;
(iii) [ * ] upon initiation of Phase III Clinical Trials for such
a Compound Product;
(iv) [ * ] upon filing of an NDA for such a Compound Product;
and
(v) [ * ] upon the first Regulatory Approval in any Major
Market for such a Compound Product.
(c) Known Target. For each Compound Product comprising or
incorporating a Collaboration Compound that directly or selectively inhibits,
activates or otherwise modulates the activity of a Known Target or its encoded
protein, BMS shall make to Exelixis the milestone payments set forth below
within [ * ] of the achievement of each of the following events:
(i) [ * ] upon approval of the first Preclinical Lead Profile
for any Collaboration Compound having activity with respect to a particular
Known Target;
(ii) [ * ] upon filing of an IND for such a Compound Product;
(iii) [ * ] upon initiation of Phase III Clinical Trials for such
a Compound Product;
(iv) [ * ] upon filing of an NDA for such a Compound Product;
(v) [ * ] upon the first Regulatory Approval in any Major
Market for such a Compound Product; and
(vi) [ * ] upon the first achievement of [ * ] in Net Sales in
any one calendar year for such a Compound Product.
For clarity, it is understood that, with respect to a Compound Product that
is active against a Known Target that is Pre-Associated Target, BMS owes
milestones under this subsection 8.4(c) only on Compound Products that contain
compounds [ * ] that was used to identify the Target from which such Pre-
Associated Target was identified. For purposes of the foregoing, [ * ] as such
BMS Compound.
8.5 Milestone Payments for Safety Products. For each Safety Product, BMS
shall make to Exelixis the milestone payments set forth below within [ * ]
events: (a) [ * ] upon
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
41.
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approval of the first Preclinical Lead Profile for any Safety Compound
developed by use of a particular Safety Target; (b) [ * ] upon filing of an IND
for a Safety Product; (c) [ * ] upon initiation of Phase III Clinical Trials for
a Safety Product; (d) [ * ] upon filing of an NDA for a Safety Product; and (e)
[ * ] upon the first Regulatory Approval in any Major Market for a Safety
Product.
8.6 Milestone Payments for New Indications for BMS Products. For each BMS
Product, BMS shall make to Exelixis the following milestone payments set forth
below within [ * ] of the achievement of each of the following events: (a) [ * ]
upon filing the first NDA in a Major Market for any New Indication for a BMS
Product; and (b) [ * ] upon approval of such NDA in a Major Market.
8.7 Milestone Payments for Gene Products. BMS shall make to Exelixis the
following milestone payments for Gene Products:
(a) Novel Target. For each Gene Product comprising or incorporating
the gene product of a Novel Target [ * ], BMS shall make to Exelixis the
milestone payments set forth below within [ * ] of the achievement of each of
the following events:
(i) [ * ] upon approval of the first Preclinical Lead Profile
for a Gene Product comprising or incorporating a particular Novel Target;
(ii) [ * ] upon filing of an IND for such a Gene Product;
(iii) [ * ] upon initiation of Phase III Clinical Trials for such
a Gene Product;
(iv) [ * ] upon filing of an NDA for such a Gene Product; and
(v) [ * ] upon the first Regulatory Approval in any Major
Market for such a Gene Product.
(b) Unlinked Related Target. For each Gene Product comprising or
incorporating the gene product of a Unlinked Related Target [ * ], BMS shall
make to Exelixis the milestone payments set forth below within [ * ] of the
achievement of each of the following events:
(i) [ * ] upon approval of the first Preclinical Lead Profile
for a Gene Product comprising or incorporating a particular Unlinked Related
Target;
(ii) [ * ] upon filing of an IND for such a Gene Product;
(iii) [ * ] upon initiation of Phase III Clinical Trials for
such a Gene Product;
(iv) [ * ] upon filing of an NDA for such a Gene Product; and
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
42.
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(v) [ * ] upon the first Regulatory Approval in any Major
Market for such a Gene Product.
8.8 Milestone Payments for Biotherapeutic Products. BMS shall make to
Exelixis the following milestone payments for Biotherapeutic Products:
(a) Novel Target. For each Biotherapeutic Product comprising or
incorporating an antibody against a Novel Target or an antisense compound based
upon a Novel Target sequence, or based upon the sequence of a Novel Target, BMS
shall make to Exelixis the milestone payments set forth below within [ * ] of
the achievement of each of the following events:
(i) [ * ] upon approval of the first Preclinical Lead
Profile for a Biotherapeutic Product related a particular Novel Target;
(ii) [ * ] upon filing of an IND for such a Biotherapeutic
Product;
(iii) [ * ] upon initiation of Phase III Clinical Trials for such
a Biotherapeutic Product;
(iv) [ * ] upon filing of an NDA for such a Biotherapeutic
Product; and
(v) [ * ] upon the first Regulatory Approval in any Major
Market for such a Biotherapeutic Product.
(b) Unlinked Related Target. For each Biotherapeutic Product
comprising or incorporating an antibody against an Unlinked Related Target or an
antisense compound based upon an Unlinked Related Target sequence, or based upon
the sequence of an Unlinked Related Target, BMS shall make to Exelixis the
milestone payments set forth below within [ * ] of the achievement of each of
the following events:
(i) [ * ] upon approval of the first Preclinical Lead Profile
for a Biotherapeutic Product related a particular Unlinked Related Target;
(ii) [ * ] upon filing of an IND for such a Biotherapeutic
Product;
(iii) [ * ] upon initiation of Phase III Clinical Trials for such
a Biotherapeutic Product;
(iv) [ * ] upon filing of an NDA for such a Biotherapeutic
Product; and
(v) [ * ] upon the first Regulatory Approval in any Major
Market for such a Biotherapeutic Product.
8.9 Milestone Payments for Diagnostic Products and Pharmacogenomic. BMS
shall make to Exelixis the following milestone payments for Diagnostic Products
and Pharmacogenomic Products:
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
43.
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(a) Novel Target. For each Diagnostic Product or Pharmacogenomic
Product that is based upon the detection of the presence or absence of, or
sequence differences in different alleles of, a Novel Target, BMS shall make to
Exelixis the milestone payments set forth below within [ * ] of the achievement
of each of the following events:
(i) [ * ] upon initiation of first clinical trial for such a
Diagnostic Product or Pharmacogenomic Product;
(ii) [ * ] upon filing of an Product License Application (or
related regulatory approval application) for such a Diagnostic Product or
Pharmacogenomic Product; and
(iii) [ * ] upon the first Regulatory Approval of such a
Diagnostic Product or Pharmacogenomic Product in any Major Market.)
(b) Unlinked Related Target. For each Diagnostic Product or
Pharmacogenomic Product that is based upon the detection of the presence or
absence of, or sequence differences in different alleles of, an Unlinked Related
Target, BMS shall make to Exelixis the milestone payments set forth below within
[ * ] of the achievement of each of the following events:
(i) [ * ] upon initiation of first clinical trial for such a
Diagnostic Product or Pharmacogenomic Product;
(ii) [ * ] upon filing of an Product License Application (or
related regulatory approval application) for such a Diagnostic Product or
Pharmacogenomic Product; and
(iii) [ * ] upon the first Regulatory Approval of such a
Diagnostic Product or Pharmacogenomic Product in any Major Market.
8.10 Milestone Payments for Back-Up Compounds. For each Backup Compound
that is in development by BMS (or its Affiliate or sublicensee), BMS shall only
be obliged to make to Exelixis any applicable milestone payments set forth in
Sections 8.3-8.9 that were not made to Exelixis with respect to [ * ] such
Backup Compound. However, if [ * ], achieves Regulatory Approval, and BMS (or
its Affiliate or sublicensee) continues thereafter to conduct development of the
such Backup Compound, then [ * ].
8.11 Milestone Payments for [ * ] Products. For each [ * ] Product that is
developed by BMS (or its Affiliate or sublicensee), BMS shall not be obliged to
make any milestone payments to Exelixis under Sections 8.3 through 8.9 unless
and until the first Regulatory Approval of [ * ] in any Major Market. Upon any
such Regulatory Approval of [ * ], BMS shall pay to Exelixis the sum of all
milestone payments owed under Sections 8.3 through 8.9 for milestone events
achieved by [ * ], within [ * ] of such Regulatory Approval, that, in the
absence of this Section 8.11, BMS would have been obliged to make to Exelixis
prior to such first Regulatory Approval of [ * ]; provided, however, that if the
[ * ] that received Regulatory Approval in any such Major Market has [ * ]
receives such Regulatory Approval in any such
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
44.
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Major Market [ * ]. Thereafter any applicable milestone payments for such
additional [ * ] shall be paid by BMS during the time frame specified in
Sections 8.3-8.9, as applicable.
8.12 Royalty Payments for Compound Products. BMS shall pay Exelixis
certain royalty payments for Compound Products as set forth below.
(a) Novel Target. For each Compound Product comprising or
incorporating a Collaboration Compound that, directly and selectively, inhibits,
activates or otherwise modulates the activity of a Novel Target or its encoded
protein, BMS shall pay Exelixis a royalty equal to [ * ] of the Net Sales of
such Compound Product.
(b) Unlinked Related Target. For each Compound Product comprising or
incorporating a Collaboration Compound that, directly and selectively, inhibits,
activates or otherwise modulates the activity of an Unlinked Related Target or
its encoded protein, BMS shall pay Exelixis a royalty equal to [ * ] of the Net
Sales of such Compound Product.
(c) Known Target. For each Compound Product comprising or
incorporating a Collaboration Compound that, directly and selectively, inhibits,
activates or otherwise modulates the activity of a Known Target or its encoded
protein, BMS shall pay Exelixis royalties as a percentage of the Net Sales of
such Compound Product, where the percentage applied depends on amount of annual
Net Sales of the Compound Product as follows:
Amount of Net Sales from [ * ] [ * ]
Amount of Net Sales that is greater than [ * ] [ * ]
For clarity, it is understood that, for Compound Products that are active
against Known Targets that are Pre-Associated Targets, BMS owes royalties only
on such Compound Products that contain compounds [ * ] from which such Pre-
Associated Target was identified. For purposes of the foregoing, [ * ] as such
BMS Compound.
(d) Transition Target. For each Compound Product comprising or
incorporating a Collaboration Compound that, directly and selectively, inhibits,
activates or otherwise modulates the activity of a Transition Target or its
encoded protein, BMS shall pay Exelixis a royalty at the applicable royalty rate
set forth below:
(i) For each Compound Product comprising or incorporating a
Collaboration Compound the activity of which with respect to a Transition Target
or its encoded protein was discovered using a Known Target that had been a Novel
Target, the royalty shall be [ * ] of the first [ * ] in Net Sales in a year,
and [ * ] of any Net Sales in such year in excess of [ * ]; and
(ii) For each Compound Product comprising or incorporating a
Collaboration Compound the activity of which with respect to a Transition Target
or its encoded protein was discovered using a Known Target that had been an
Unlinked Related Target, the royalty shall be [ * ] of the first [ * ] in Net
Sales in a year, and [ * ] of any Net Sales in such year in excess of [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
45.
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8.13 Royalty Payments for Safety Products. For each Safety Product, BMS
shall pay Exelixis a royalty equal to [ * ] of the Net Sales of such Safety
Product.
8.14 Royalty Payments for Gene Products. BMS shall pay Exelixis certain
royalty payments for Gene Products as set forth below.
(a) Novel Target. For each Gene Product comprising or incorporating
the gene product of a Novel Target or a mutein or fusion protein based thereon,
BMS shall pay Exelixis a royalty equal to [ * ] of the Net Sales of such Gene
Product.
(b) Related Target. For each Gene Product comprising or incorporating
the gene product of a Related Target [ * ], BMS shall pay Exelixis a royalty
equal to [ * ] of the Net Sales of such Gene Product.
8.15 Royalty Payments for Biotherapeutic Products. BMS shall pay Exelixis
certain royalty payments for Biotherapeutic Products as set forth below.
(a) Novel Target. For each Biotherapeutic Product comprising or
incorporating an antibody against a Novel Target or an antisense compound based
upon a Novel Target sequence, or based upon the sequence of a Novel Target, BMS
shall pay Exelixis a royalty equal to [ * ] of the Net Sales of such
Biotherapeutic Product, but subject to reduction by [ * ] of royalties actually
paid by BMS to a Third Party for license rights required to sell such
Biotherapeutic Product, but in no event shall the royalty paid to Exelixis be
less than [ * ] of the Net Sales of such Biotherapeutic Product.
(b) Unlinked Related Target. For each Biotherapeutic Product
comprising or incorporating an antibody against an Unlinked Related Target or an
antisense compound based upon an Unlinked Related Target sequence, or based upon
the sequence of an Unlinked Related Target, BMS shall pay Exelixis a royalty
equal to [ * ] of the Net Sales of such Biotherapeutic Product, but subject to
reduction by [ * ] of royalties actually paid by BMS to a Third Party for
license rights required to sell such Biotherapeutic Product, but in no event
shall the royalty paid to Exelixis be less than [ * ] of the Net Sales of such
Biotherapeutic Product.
(c) Known Target. For each Biotherapeutic Product comprising or
incorporating an antibody against a Known Target or an antisense compound based
upon a Known Target sequence, or based upon the sequence of a Known Target, BMS
shall pay Exelixis royalties as a percentage of the Net Sales of such
Biotherapeutic Product, where the percentage applied depends on amount of annual
Net Sales of the Biotherapeutic Product as follows:
Amount of Net Sales from [ * ] [ * ]
Amount of Net Sales that is greater than [ * ] [ * ]
8.16 Royalty Payments for Diagnostic Products. BMS shall pay Exelixis
certain royalty payments for Diagnostic Products as set forth below.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
46.
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(a) Novel Target. For each Diagnostic Product that is based upon the
detection of [ * ] of, a Novel Target, BMS shall pay Exelixis a royalty equal to
[ * ] of the Net Sales of each such Diagnostic Product.
(b) Unlinked Related Target. For each Diagnostic Product that is
based upon the detection of [ * ] of, an Unlinked Related Target, BMS shall pay
Exelixis a royalty equal to [ * ] of the Net Sales of each such Diagnostic
Product.
8.17 Royalty Payments for Pharmacogenomic Products. BMS shall pay Exelixis
certain royalty payments for Diagnostic Products as set forth below.
(a) Novel Target. For each Pharmacogenomic Product that is based upon
the detection of [ * ] of, a Novel Target, BMS shall pay Exelixis a royalty
equal to [ * ] of the Net Sales of each such Pharmacogenomic Product.
(b) Unlinked Related Target. For each Diagnostic Product that is
based upon the detection of [ * ] of, an Unlinked Related Target, BMS shall pay
Exelixis a royalty equal to [ * ] of the Net Sales of each such Pharmacogenomic
Product.
8.18 Fixed Royalty Rates and Final Royalty Payments.
(a) Except as provided in the subsection 8.18(b) below, the royalty
rates set forth in Sections 8.12-8.17 shall not be subject to adjustment or
reduction for any reason.
(b) If a particular Diagnostic Product or Pharmacogenomic Product is
based upon the [ * ] Novel Targets and/or Unlinked Related Targets (or their
expressed proteins or antigens thereto), as well as of mammalian targets that
are not discovered as part of this Agreement (such product being referred to
herein as a "Multiple Marker Product"), then the royalty payable to Exelixis for
such Multiple Marker Product under this Agreement shall be determined by first
calculating the royalty owed under Section 8.16 or 8.17 (as applicable) for such
Multiple Marker Product, and then multiplying that amount by [ * ]. For clarity,
it is understood and agreed that the Net Sales of a particular Diagnostic
Product or Pharmacogenomic Product that is a Multiple Marker Product shall not
be adjusted by the adjustment mechanism set forth in Section 1.43 for "combined
products".
(c) For sake of clarity and avoidance of doubt, it is understood and
agreed that no milestones and royalties are payable under this Agreement upon:
(1) any BMS product wherein the active ingredient is a compound that directly
and selectively inhibits, activates or otherwise modulates [ * ]; or (2) any
Compound Product comprising or incorporating a Collaboration Compound that,
although it may, by an indirect mechanism, have the effect of inhibiting,
activating or otherwise modulating [ * ]; and (3) any BMS product that contains
a Collaboration Compound that inhibits, activates or otherwise modulates [ * ].
8.19 Term of Royalties. Exelixis' right to receive royalties under
Sections 8.12-8.17 shall commence on a country-by-country basis upon the first
commercial sale of such Licensed Product in a particular country and shall
expire on a country-by-country basis at the later of (1) the date that is [ * ]
after First Commercial Sale in such country, or (2) the date that all
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
47.
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composition of matter patents on such Licensed Product expire, become
unenforceable or are declared invalid by a court or tribunal of competent
jurisdiction from which no appeal is or can be taken. Upon expiration of the
royalty obligation with respect to a Licensed Product in a country, BMS shall
retain the right to make, use and sell such Licensed Product in such country
thereafter, without further compensation to Exelixis with respect to sales
thereof in such country.
8.20 Quarterly Royalty Payment and Reports. Royalties under Sections 8.12-
8.17 shall accrue at the time of invoice or, if earlier, transfer of title of
the applicable Licensed Products. All royalty amounts that accrue during a
particular calendar quarter shall be paid quarterly within [ * ] of the end of
the relevant calendar quarter. Each royalty payment shall be accompanied by a
statement stating the number, description, and aggregate gross invoiced price
and the calculation of Net Sales, by country, of each Licensed Product sold
during the relevant calendar quarter.
8.21 Payment Method. All payments due under this Agreement to Exelixis
shall be made by bank wire transfer in immediately available funds to an account
designated by Exelixis, in U.S. dollars. All payments made by BMS under this
Article 8 shall be nonrefundable and, unless expressly provided otherwise,
noncreditable.
8.22 Taxes. Exelixis shall pay any and all taxes levied on account of all
payments it receives under this Agreement. If laws or regulations require that
taxes be withheld, BMS will (i) deduct those taxes from the remittable payment,
(ii) pay the taxes to the proper taxing authority, and (iii) send evidence of
the obligation together with proof of tax payment to Exelixis within [ * ]
following that tax payment.
8.23 Blocked Currency. In each country where the local currency is blocked
and cannot be removed from the country, royalties accrued in that country shall
be paid to Exelixis in the country in local currency by deposit in a local bank
designated by Exelixis, unless the Parties otherwise agree.
8.24 Sublicenses. In the event BMS grants licenses or sublicenses to
others to sell Licensed Products which are subject to royalties under any of
Sections 8.12-8.16, such licenses or sublicenses shall include an obligation for
the licensee or sublicensee to account for and report its sales of Licensed
Products on the same basis as if such sales were Net Sales by BMS, and BMS shall
pay to Exelixis, with respect to such sales, royalties as if such sales of the
licensee or sublicensee were Net Sales of BMS.
8.25 Foreign Exchange. The rate of exchange to be used in computing Net
Sales and the amount of currency equivalent in United States dollars due
Exelixis shall be made at the rate of exchange quoted as of the end of the day
on the last business day of the applicable royalty period (calendar quarter
period) in the Wall Street Journal.
8.26 Records; Inspection. BMS shall keep complete and accurate records
pertaining to the sale or other disposition of the Licensed Products
commercialized hereunder by BMS and its Affiliates, in sufficient detail to
permit Exelixis to confirm the accuracy of all payments due hereunder. For a
period of [ * ] after the royalty period to which the records relate, Exelixis
shall have the right to cause an independent, certified public accountant
reasonably acceptable to BMS
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
48.
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(and who has executed a confidentiality agreement with BMS reasonably acceptable
to BMS) to audit such records to confirm the Net Sales and royalty payments;
provided, however, that such auditor shall not disclose BMS' confidential
information to Exelixis, except to the extent such disclosure is necessary to
verify the amount of royalties and other payments due under this Agreement. In
no event may such accountant disclose the names of specific customers, price
lists, or the prices charged by BMS to specific customers. A copy of any report
provided by such accountant shall be provided to BMS at the time that it is
provided to Exelixis. Such audits may be exercised no more than once a year,
within [ * ] after the royalty period to which such records relate, upon a
mutually acceptable date(s) and upon not less than [ * ] advance notice to BMS,
and shall be conducted during normal business hours. Any amounts shown to be
owing by such audits shall be paid immediately with interest in the amount of
[ * ] per month (or the maximum amount permitted by law, if less) from the date
first owed until paid. Exelixis shall bear the full cost of such audit unless
such audit discloses a variance in the amounts paid by BMS of more than [ * ]
from the amount of royalties and/or other payments actually owed. In such case,
BMS shall reimburse Exelixis for its out-of-pocket costs to such Third Party for
conducting such audit. The terms of this Section 7.4 shall survive any
termination or expiration of this Agreement for a period of [ * ]. Nothing in
this Section shall be construed to allow such accountant to review research
records of BMS and its Affiliates.
9. Intellectual Property
9.1 Ownership.
(a) Each Party shall own the entire right, title and interest in and
to any and all of its Pre-existing Inventions, and Patents covering such Pre-
existing Inventions.
(b) Each Party shall own the entire right, title and interest in and
to any and all of its Sole Inventions, and Patents covering such Sole
Inventions. BMS and Exelixis shall each own an undivided one-half interest in
and to any and all Joint Inventions and Joint Patents, with inventorship to be
determined under the patent laws of the United States. BMS and Exelixis as joint
owners each shall have the right to grant licenses under Joint Patents, but
subject to the exclusive license rights granted by one Party to another
hereunder.
(c) Exelixis shall own the entire right, title and interest in and to
any and all Improvement Inventions made by Exelixis, either to the Exelixis Core
Technology or the BMS Core Technology, and Patents covering such Improvement
Inventions. BMS shall own the entire right, title and interest in and to any and
all Improvement Inventions made by BMS, either to the BMS Core Technology or the
Exelixis Core Technology, and Patents covering such Improvement Inventions.
9.2 Disclosure. Each Party shall submit a written report to the JMT within
sixty (60) days of the end of each quarter describing any Sole Invention, Joint
Invention or Improvement Invention arising during the prior quarter during the
Research Term in the course of the Collaboration which it believes may be
patentable and to which the other Party is granted an exclusive or non-exclusive
license under this Agreement. The JMT shall decide whether to file a patent
application for a Joint Invention as discussed in Section 9.3(b).
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
49.
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9.3 Patent Prosecution and Maintenance; Abandonment.
(a) Pre-existing, Sole and Improvement Inventions. Except as
otherwise provided below in this Section 9.3, each Party shall retain control
over and [ * ] associated with the filing, prosecution (including any
interferences, reissue proceedings and reexaminations) and maintenance of all
Patents claiming its Pre-existing Inventions, its Sole Inventions and those
Improvement Inventions that it solely owns and shall have the sole right and
absolute discretion to abandon same and to take all decisions with respect to
filing, prosecution, maintenance and abandonment of same.
(b) Joint Inventions. The JMT shall establish the patent strategy for
all Joint Inventions and supervise and direct the filing, prosecution (including
any interferences, reissue proceedings and reexaminations) and maintenance of
all Patents covering Joint Inventions. The JMT shall provide each Party with (i)
drafts of any new patent application that covers a Joint Invention prior to
filing that application, allowing adequate time for review and comment by the
Party if possible; provided, however, the JMT shall not be obligated to delay
the filing of any patent application; and (ii) copies of all correspondence from
any and all patent offices concerning patent applications covering Joint
Inventions and an opportunity to comment on any proposed responses, voluntary
amendments and submissions of any kind to be made to any and all such patent
offices. BMS shall have the first right, but not the obligation, to file,
prosecute and maintain Joint Patents claiming particular Joint Inventions that
constitute Improvement Inventions to the BMS Core Technology or that are
licensed to BMS under Section 6.1 hereof in such countries as selected by BMS.
BMS shall reasonably consider any recommendations provided by Exelixis regarding
patent filing, prosecution, and/or maintenance of any such patents pertaining
thereto, but the final decision as to filing, prosecution, maintenance and
abandonment matters shall rest with BMS. In the event that Exelixis desires that
BMS file and prosecute a patent application claiming such a Joint Invention, and
BMS does not file such a patent application within [ * ] of such request, or
decides to abandon prosecution of such a filed application or maintenance of an
issued Joint Patent, then Exelixis may thereafter file, prosecute (including any
interferences, reissue proceedings and reexaminations) and/or maintain [ * ] and
in the name of Exelixis and BMS the patent(s) claiming such particular Joint
Inventions, and BMS agrees to cooperate reasonably with Exelixis in such
efforts. Exelixis shall have the first right, but not the obligation, to file,
prosecute and maintain Joint Patents claiming particular Joint Inventions that
constitute Improvement Inventions to the Exelixis Core Technology in such
countries as selected by Exelixis. Exelixis shall reasonably consider any
recommendations provided by BMS regarding patent filing, prosecution, and/or
maintenance of any such patents pertaining thereto, but the final decision as to
filing, prosecution (including any interferences, reissue proceedings and
reexaminations) maintenance and abandonment matters shall rest with Exelixis. In
the event that BMS desires that Exelixis file and prosecute a patent application
claiming such a Joint Invention, and Exelixis does not file such a patent
application within [ * ] of such request, or decides to abandon prosecution of
such a filed application or maintenance of an issued Joint Patent, then BMS may
thereafter file, prosecute (including any interferences, reissue proceedings and
reexaminations) and/or maintain [ * ] and in the name of Exelixis and BMS the
patent(s) claiming such particular Joint Inventions, and Exelixis agrees to
cooperate reasonably with BMS in such efforts.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
50.
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(c) Selected and Product Target Exelixis Sole Inventions. For Sole
Inventions made by Exelixis relating to the composition or use of any Selected
Targets or Product Targets that, although non-exclusively licensed to BMS under
Article 6, have not yet become Pursued Disclosed Targets or upon which Exelixis
has commenced Independent Research within the Field as permitted under the
Agreement, the following shall apply:
(i) Exelixis shall have the first right, but not the obligation, to
file, prosecute and maintain the Patents claiming such Inventions. Exelixis
shall reasonably consider any recommendations provided by BMS regarding patent
filing, prosecution (including any interferences, reissue proceedings and
reexaminations), and/or maintenance of such Patents for uses within the Field,
but the final decision as to filing, prosecution, maintenance, and abandonment
matters shall rest with Exelixis; provided, however, that if Exelixis declines
to file, prosecute or maintain a Patent in a given country, BMS may elect to
become the controlling Party by taking over, in the name of Exelixis and,
subject to Section 9.3(b), at BMS' sole expense thereafter, the filing,
prosecution (including any interferences, reissue proceedings and
reexaminations), and maintenance of any such patent application or patent
covering such Invention in any country, in which event the final decision as to
filing and/or prosecution matters shall rest with BMS.
(ii) With respect to such Patents for which Exelixis remains the
controlling Party under this Section 9.3(c), Exelixis shall be responsible for
[ * ] by it, and BMS [ * ] after presentation of an invoice and appropriate
substantiation of the costs incurred, for all [ * ] of such [ * ] by Exelixis to
Third Parties after the Effective Date with respect to the filing, prosecution
and maintenance of such Patents [ * ] until such time as BMS no longer has any
de facto exclusive license rights under this Agreement to a given Selected
Target as a result of such Target becoming a Pursued Disclosed Target or
Exelixis having commenced Independent Research on such Target within the Field
as permitted in the Agreement or as a result of a conversion of such rights to
semi-exclusive or non-exclusive in accordance with the terms of Sections 4.11,
4.12, 6.3(b), and/or 6.3(c) as the case may be, at which time, [ * ] after such
date with respect to any Patents in any country covering the composition or use
of such Pursued Disclosed Target. With respect to those Patents where BMS is the
controlling Party under this Section 9.3(c), [ * ] after presentation of an
invoice and appropriate substantiation of the costs incurred, for [ * ] of such
out-of-pocket costs [ * ] to Third Parties after the Effective Date with respect
to the filing, prosecution and maintenance of such Patents ("Costs") until such
time BMS no longer has any de facto exclusive license rights within the Field
under this Agreement to a given Selected Target as a result of such Target
becoming a Pursued Disclosed Target or Exelixis having commenced Independent
Research on such Target within the Field as permitted in the Agreement or as a
result of a conversion of such rights to semi-exclusive or non-exclusive in
accordance with the terms of Sections 4.11, 4.12, 6.3(b), and/or 6.3(c) as the
case may be, at which time, BMS shall no longer be the controlling Party and
shall transfer responsibility for the filing, prosecution, and maintenance of
such Patents to Exelixis, and after such transfer [ * ] thereafter with respect
to any Patents in any country covering the composition or use of such Pursued
Disclosed Target.
(iii) Notwithstanding the foregoing, BMS may [ * ], as provided
above, with respect to any particular patent application or issued patent within
the Exelixis Patents that claims a given Invention, on a country-by-country
basis, in which case such patent application or
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
51.
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patent in such country(ies) shall thereafter be excluded from the Exelixis
Patents licensed to BMS hereunder for all purposes under this Agreement.
(d) Pursued Disclosed Target Exelixis Sole Inventions. For Sole
Inventions made by Exelixis relating to the composition or use of any Pursued
Disclosed Targets, the following shall apply:
(i) Exelixis shall have the first right, but not the obligation,
to file, prosecute and maintain the Patents claiming such Inventions. Exelixis
shall reasonably consider any recommendations provided by BMS regarding patent
filing, prosecution (including any interferences, reissue proceedings and
reexaminations), and/or maintenance of such Patents for uses within the Field,
but the final decision as to filing, prosecution, maintenance, and abandonment
matters shall rest with Exelixis; provided, however, that if Exelixis declines
to file, prosecute or maintain a Patent in a given country, BMS may elect to
become the controlling Party by taking over, in the name of Exelixis and [ * ]
thereafter, the filing, prosecution (including any interferences, reissue
proceedings and reexaminations), and maintenance of any such patent application
or patent covering such Invention in any country, in which event the final
decision as to filing and/or prosecution matters shall rest with BMS.
(ii) Where Exelixis is the controlling Party, [ * ] after
presentation of an invoice and appropriate substantiation of the costs incurred,
for [ * ] of such out-of-pocket costs [ * ] after the Effective Date with
respect to the filing, prosecution and maintenance of such Patents ("Costs").
(e) Novel Target Exelixis Sole Inventions. For Sole Inventions made
by Exelixis relating to the composition or use of any Novel Targets that are
exclusively licensed to BMS under Section 6.1(c), the following shall apply: BMS
shall have the first right, but not the obligation, to file, prosecute
(including any interferences, reissue proceedings and reexaminations) and
maintain Patents claiming such Inventions, [ * ] and in the name of Exelixis, in
such countries as selected by BMS. BMS shall reasonably consider any
recommendations provided by Exelixis regarding patent filing, prosecution,
and/or maintenance of any such patents pertaining thereto, but the final
decision as to filing, prosecution, maintenance and abandonment matters shall
rest with BMS. In the event that Exelixis desires that BMS file and prosecute a
patent application claiming a particular Invention in a given country, and BMS
does not file such a patent application within one hundred twenty (120) days of
such request, or decides to abandon prosecution of such a filed application or
maintenance of an issued Patent in a given country, then Exelixis may thereafter
file, prosecute (including any interferences, reissue proceedings and
reexaminations) and/or maintain, [ * ] and in the name of Exelixis, the
patent(s) claiming such particular Inventions in such country, in which case
such patent application or patent in such country(ies) shall thereafter be
excluded from the Exelixis Patents licensed to BMS hereunder for all purposes
under this Agreement.
The foregoing provisions of subsection (e) are subject to the following: If
BMS' rights under Section 6.1(c) have been terminated or converted to semi-
exclusive or non-exclusive in accordance with the terms of this Agreement, then,
regardless of which Party was previously the controlling Party, Exelixis shall
thereafter have the right, but not the obligation, to file, prosecute (including
any interferences, reissue proceedings and reexaminations), and/or maintain,
[ * ] and
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
52.
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in its name, such patent applications and patents relating to such converted
rights, without contribution or reimbursement from BMS.
(f) BMS Patents Licensed to Exelixis. For BMS Patents that are licensed to
Exelixis under Sections 6.3(a), 6.3(b) and/or 6.3(c) based on BMS' Sole
Inventions, the following shall apply:
(i) BMS shall retain the first right, but not the obligation, to
file, prosecute and maintain the Patents claiming such Inventions. BMS shall
reasonably consider any recommendations provided by Exelixis regarding patent
filing, prosecution (including any interferences, reissue proceedings and
reexaminations), and/or maintenance of such Patents for uses within the Field,
but the final decision as to filing, prosecution, maintenance, and abandonment
matters shall rest with BMS; provided, however, that if BMS declines, or fails
by any date that is sixty (60) days before an applicable due date or date where
rights would be lost, to file, prosecute or maintain a Patent in a given
country, Exelixis may elect to become the controlling Party by taking over, in
the name of BMS and [ * ] thereafter, the filing, prosecution (including any
interferences, reissue proceedings and reexaminations), and maintenance of any
such patent application or patent covering such Invention in any country, in
which event the final decision as to filing and/or prosecution matters shall
rest with Exelixis.
(ii) With respect to such Patents licensed to Exelixis under Sections
6.3(b) or 6.3(c) for which BMS remains the controlling Party, [ * ] prior to and
after the Effective Date that such Patent was licensed to Exelixis, until such
time, if any, as BMS may elect pursuant to Section 4.11 to continue to pursue or
recommences pursuit of an Abandoned Target or may elect to continue to pursue a
Novel Target (with respect to a Biotherapeutic Product only), at which time
[ *] by BMS thereafter). Where Exelixis is the controlling Party, Exelixis shall
[ * ], until such time, if any, as [ * ] pursuant to Section 4.11 to continue to
pursue, or recommences pursuit of an Abandoned Target or as [ * ] to continue to
pursue a Novel Target (with respect to a Biotherapeutic Product only), at which
time [ * ] before and thereafter (unless BMS elects to reassume control of such
prosecution, in which case [ * ].
(iii) With respect to such Patents licensed to Exelixis under Section
6.3(a) for which BMS remains the controlling Party, [ * ] to Third Parties prior
to and after the Effective Date that such Patent was licensed to Exelixis. Where
Exelixis is the controlling Party, [ * ], but, within [ * ].
(iv) Notwithstanding the foregoing provisions of this Section 9.3(f),
[ * ], as provided above, with respect to any particular patent application or
issued patent within the BMS Patents that claims a given Sole Invention of BMS,
on a country-by-country basis, in which case such patent application or patent
in such country(ies) shall thereafter be excluded from [ * ] hereunder for all
purposes under this Agreement.
(g) Cooperation. The controlling Party under Sections 9.3(b), (c), (d) (e)
and (f) as the case may be, shall provide the non-controlling Party with copies
of all documents, correspondence and referenced materials filed or received by
the controlling Party in prosecuting and maintaining the applicable patents and
Joint Patents controlled by it where (i) the controlling Party is obligated to
consult with or to consider recommendations by the non-controlling Party
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
53.
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regarding such prosecution, (ii) rights under the applicable Patent are granted
to the non-controlling Party hereunder, or (iii) the non-controlling Party
potentially has the right to assume control of the filing or prosecution of such
Patent under the conditions set forth in such Section. Such copies shall be
provided promptly after receipt, with respect to communications to or from
applicable patent authorities, and sufficiently in advance of the controlling
Party's filing or otherwise communicating any such documents to allow the non-
controlling Party reasonable time to review such materials and comment thereon
prior to filing. The non-controlling Party will provide the controlling Party
all reasonable assistance, at the controlling Party's expense, in prosecuting
and maintaining such patents. All counsel used by the controlling Party for
filing, prosecuting and maintaining such applications shall be subject to the
approval of the non-controlling Party (not to be unreasonably withheld), and the
Parties will endeavor to select competent, cost-effective counsel for same.
9.4 Enforcement of Patent Rights.
(a) Each Party shall have the sole right, but not the obligation, to
institute, prosecute or control any action or proceeding with respect to
infringement by a Third Party of one or more issued Patents covering such
Party's Pre-existing Inventions or those Improvement Inventions solely owned by
such Party pursuant to Section 9.1(c). Each Party shall have the sole right, but
not the obligation, to institute, prosecute or control any action or proceeding
with respect to infringement by a Third Party of one or more issued Patents
covering such Party's Pre-existing Inventions or those Improvement Inventions
solely owned by such Party pursuant to Section 9.1(c).
(b) Except as provided in Section 9.4(d), if any issued Patent
covering a Sole Invention of Exelixis is infringed by Third Party activity, and
if (1) such infringement will, or can reasonably be expected to, result in loss
of sales of an existing Licensed Product, or (2) is a Patent as to which BMS is
controlling the maintenance thereof under Section 9.3, then BMS shall have the
first right, but not the obligation, to institute, prosecute or control any
action or proceeding with respect to such infringement by counsel of its own
choice, and Exelixis shall have the right to participate in such action and to
be represented by counsel of its own choice. If BMS fails to bring an action or
proceeding within ninety (90) days after having received written notice of such
infringement from Exelixis, then Exelixis shall have the right, but not the
obligation, to bring and control any such action by counsel of its own choice,
and BMS shall have the right to participate in such action and to be represented
by counsel of its own choice.
(c) Except as provided in Section 9.4(d), if either Party becomes
aware of any Third Party activity that infringes an issued Patent covering a
Joint Invention, then that Party shall give prompt written notice to the other
Party within thirty (30) days after knowledge of such infringement comes to the
attention of, in the case of BMS, its in-house patent counsel and, in the case
of Exelixis, its senior management. If BMS is then controlling the maintenance
of such Patent, BMS shall have the first right, but not the obligation, to
institute, prosecute or control any action or proceeding with respect to such
infringement by counsel of its own choice, and Exelixis shall have the right to
participate in such action and to be represented by counsel of its own choice.
If BMS fails to bring an action or proceeding within a period of ninety (90)
days after receipt of such notice, then Exelixis shall have the right, but not
the obligation, to bring and control any such action by counsel of its own
choice, and BMS shall have the right to participate
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
54.
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in such action and to be represented by counsel of its own choice. If Exelixis
is then controlling the maintenance of such Patent, then the parties rights and
obligations under the preceding two sentences shall be switched, mutatis
mutandis.
(d) BMS shall have the sole right, but not the obligation, to institute,
prosecute or control any action or proceeding with respect to infringement by a
Third Party of one or more issued patents owned or Controlled solely by BMS or
its Affiliates covering the manufacture, use, or sale of any BMS Product or
Licensed Product, and shall be entitled to prosecute and manage all proceedings
relating to same (including all decisions relative to litigation, appeal or
settlement) in its sole and absolute discretion [ * ].
(e) If either Party brings any such action or proceeding under Section
9.4(b) or 9.4(c), the other Party agrees (but only where, in the case of a
Patent covering an Exelixis Sole Invention, such Party, if not the controlling
Party, is the licensor of such Patent) to be joined as a party plaintiff and to
give the first Party reasonable assistance and authority to control, file and
prosecute the suit as necessary. Each Party shall bear its own costs and
expenses for any action or proceeding brought under this Section 9.4. Any
damages or other monetary awards recovered shall be applied first to reimburse
the reasonable costs and expenses of the Parties in connection with such
litigation, and the balance shall be [ * ], and (2) where Exelixis is the
controlling party, but BMS has reimbursed Exelixis for some portion of the Costs
of prosecution, filing or maintaining such Patent in a given country of
infringement, [ * ]. No settlement or consent judgment or other voluntary final
disposition of a suit under Section 9.4(b) or 9.4(c) may be entered into by a
Party that is controlling the action in a manner that materially adversely
affects the rights of the other Party or would require payment of any amounts by
such other Party to a Third Party, without the consent of such other Party.
(f) If either Party becomes aware of any Third Party activity that
infringes a BMS Patent licensed to Exelixis under Section 6.3, then that Party
shall give prompt written notice to the other Party within thirty (30) days
after knowledge of such infringement comes to the attention of, in the case of
BMS, its in-house patent counsel and, in the case of Exelixis, its senior
management. If Exelixis is then controlling the maintenance of such Patent,
Exelixis shall have the first right, but not the obligation, to institute,
prosecute or control any action or proceeding with respect to such infringement
by counsel of its own choice, and BMS shall have the right to participate in
such action and to be represented by counsel of its own choice. If Exelixis
fails to bring an action or proceeding within a period of ninety (90) days after
receipt of such notice, then BMS shall have the right, but not the obligation,
to bring and control any such action by counsel of its own choice, and Exelixis
shall have the right to participate in such action and to be represented by
counsel of its own choice. If BMS is then controlling the maintenance of such
Patent, then the parties rights and obligations under the preceding two
sentences shall be switched, mutatis mutandis. If either Party brings any such
action or proceeding, the other Party agrees to be joined as a party plaintiff
and to give the first Party reasonable assistance and authority to control, file
and prosecute the suit as necessary. Each Party shall bear its own costs and
expenses for any action or proceeding brought under this Section 9.4(f). Any
damages or other monetary awards recovered shall be applied first to reimburse
the reasonable costs and expenses of the Parties in connection with such
litigation, and the balance [ * ].
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
55.
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9.5 Copyright Registrations. Copyrights and copyright registrations on
copyrightable subject matter shall be filed, prosecuted, defended, and
maintained, and the Parties shall have the right to pursue infringers of any
copyrights owned or Controlled by it, in substantially the same manner as the
Parties have allocated such responsibilities, and the expenses therefor, for
patent rights under this Article 9.
10. Confidentiality
10.1 Nondisclosure of Confidential Information. All Information disclosed
by one Party to the other Party pursuant to this Agreement shall be
"Confidential Information" for all purposes hereunder. The Parties agree that
during the term of this Agreement, and for a period of [ * ] after this
Agreement expires or terminates, a Party receiving Confidential Information of
the other Party will (i) use commercially reasonable efforts to maintain in
confidence such Confidential Information (but not less than those efforts as
such Party uses to maintain in confidence its own proprietary industrial
information of similar kind and value) and not to disclose such Confidential
Information to any Third Party without prior written consent of the other Party,
except for disclosures made in confidence to any Third Party under terms
consistent with this Agreement and made in furtherance of this Agreement or of
rights granted to a Party hereunder, and (ii) not use such other Party's
Confidential Information for any purpose except those permitted by this
Agreement.
10.2 Exceptions. The obligations in Section 10.1 shall not apply with
respect to any portion of the Confidential Information that the receiving Party
can show by competent proof:
(a) Is publicly disclosed by the disclosing Party, either before or
after it is disclosed to the receiving Party hereunder; or
(b) Was known to the receiving Party or any of its Affiliates,
without obligation to keep it confidential, prior to disclosure by the
disclosing Party; or
(c) Is subsequently disclosed to the receiving Party or any of its
Affiliates by a Third Party lawfully in possession thereof and without
obligation to keep it confidential; or
(d) Is published by a Third Party or otherwise becomes publicly
available or enters the public domain, either before or after it is disclosed to
the receiving Party; or
(e) Has been independently developed by employees or contractors of
the receiving Party or any of its Affiliates without the aid, application or use
of Confidential Information.
10.3 Authorized Disclosure. A Party may disclose the Confidential
Information belonging to the other Party to the extent such disclosure is
reasonably necessary in the following instances:
(a) Filing or prosecuting Patents relating to Sole Inventions, Joint
Inventions or Licensed Products;
(b) Regulatory filings;
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
56.
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(c) Prosecuting or defending litigation;
(d) Complying with applicable governmental regulations; and
(e) Disclosure, in connection with the performance of this Agreement
(including conducting preclinical or clinical trials of Licensed Products) and
where not prohibited by this Agreement, to Affiliates, sublicensees, research
collaborators, employees, contractors, consultants, or agents, each of whom
prior to disclosure must be bound by similar obligations of confidentiality and
non-use at least equivalent in scope to those set forth in this Article 10 (but
with the duration to be limited to not less than [ * ] from date of disclosure).
The Parties acknowledge that the terms of this Agreement shall be treated
as Confidential Information of both Parties. Such terms may be disclosed by a
Party to investment bankers, investors, and potential investors, each of whom
prior to disclosure must be bound by similar obligations of confidentiality and
non-use at least equivalent in scope to those set forth in this Article 10. In
addition, a copy of this Agreement may be filed by Exelixis with the Securities
and Exchange Commission in connection with any public offering of Exelixis
securities. In connection with any such filing, Exelixis shall endeavor to
obtain confidential treatment of economic and trade secret information to the
maximum practical extent. Further, Exelixis agrees to consult with BMS on the
provisions of this Agreement to be redacted in any filings made by Exelixis with
the United States Securities and Exchange Commission or as otherwise required by
law.
In any event, the Parties agree to take all reasonable action to avoid
disclosure of Confidential Information except as permitted hereunder.
10.4 Termination of Prior Agreements. This Agreement supersedes the Mutual
Confidential Disclosure Agreement between Exelixis and BMS dated November 24,
1998. All Information exchanged between the Parties under those earlier
Agreements shall be deemed Confidential Information and shall be subject to the
terms of this Article 10 and shall, if patentable, be treated as a Pre-existing
Invention of the disclosing Party.
10.5 Publicity. The Parties agree to make a public announcement of the
execution of this Agreement promptly after its execution by both parties through
a release in the form attached as Exhibit D. Any other publication, news
release or other public announcement relating to this Agreement or to the
performance hereunder, shall first be reviewed and approved by both Parties;
provided, however, that any disclosure which is required by law as advised by
the disclosing Party's counsel may be made without the prior consent of the
other Party, although the other Party shall be given prompt notice of any such
legally required disclosure and to the extent practicable shall provide the
other Party an opportunity to comment on the proposed disclosure.
10.6 Publications. Neither Party shall publish or present the results of
studies carried out under this Agreement without the opportunity for prior
review by the other Party. Subject to Section 10.3, each Party agrees to provide
the other Party the opportunity to review any proposed abstracts, manuscripts or
presentations (including verbal presentations) which relate to any Selected
Target, Pursued Disclosed Target, Product Target and/or any Mammalian Target
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
57.
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directly relating thereto, or, until such Product is in Phase II development, a
Product at least thirty (30) days prior to its intended submission for
publication and agrees, upon request, not to submit any such abstract or
manuscript for publication until the other Party is given a reasonable period of
time (not to exceed sixty (60) days) to secure patent protection for any
material in such publication which it believes to be patentable; provided,
however, that Exelixis shall not have any right to review and approve any such
publications made by BMS and its academic collaborators/investigators to the
extent directly concerning post-clinical, clinical, or pre-clinical results
pertaining to a Collaboration Compound or Licensed Product, or to the extent
relating solely to any Unlinked Related Target. Both Parties understand that a
reasonable commercial strategy may require delay of publication of information
or filing of patent applications. The Parties agree to review and consider delay
of publication and filing of patent applications under certain circumstances.
The JMT will review such requests and recommend subsequent action. Neither Party
shall have the right to publish or present Confidential Information of the other
Party which is subject to Section 10.1. Nothing contained in this Section 10.6
shall prohibit the inclusion of Confidential Information of the other Party
generated by either Party during the Research Term as part of the Collaboration
that is necessary for a patent application to be filed by a Party, so long as
the nonfiling Party is given a reasonable opportunity to review the information
to be included prior to submission of such patent application; provided, that
neither party may use in such filings any Confidential Information of the other
Party generated prior to the Effective Date or, in the case of Exelixis, any BMS
Confidential Information disclosed to it that was not obtained through the
material use of Exelixis-generated Confidential Information (and that remained
confidential to Exelixis at the time of use by BMS). Any disputes between the
Parties regarding delaying a publication or presentation to permit the filing of
a patent application shall be referred to the JMT.
11. Term and Termination
11.1 Term. This Agreement shall become effective on the Effective Date and
shall remain in effect until terminated in accordance with the terms hereof or
by mutual written agreement. Termination of the Research Term shall not
constitute termination of this Agreement.
11.2 Termination for Material Breach.
(a) If either Party believes that the other is in material breach of
this Agreement (including without limitation any material breach of a
representation or warranty made in this Agreement), then the non-breaching Party
may deliver notice of such breach to the other Party. In any such notice, the
non-breaching Party shall identify in detail the basis for breach and identify
the actions or conduct that such Party would consider to be an acceptable cure
of such breach. The allegedly breaching Party shall have ninety (90) days to
either cure such breach or, if cure cannot be reasonably effected within such
ninety (90) day period, to deliver to the other Party a plan for curing such
breach which is reasonably sufficient to effect a cure. Such a plan shall set
forth a program for achieving cure as rapidly as practicable. Following delivery
of such plan, the breaching Party shall use Diligent Efforts to carry out the
plan and cure the breach.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
58.
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If the Party receiving notice of breach fails to cure such breach
within the [ * ], or the Party providing the notice reasonably determines that
the proposed corrective plan or the actions being taken to carry it out is not
commercially practicable, the Party originally delivering the notice may declare
a breach hereunder upon [ * ] advance written notice; provided, that:
(1) Exelixis may not exercise termination under this Section 11.2,
with respect to matters covered by Sections 4.9 or 4.10 hereof;
(2) If such breach is specific as to a given Collaboration Compound
or Licensed Product, such termination shall not be as to the whole agreement,
but only as to such license rights as granted hereunder to BMS with respect to
such Collaboration Compound or Licensed Product;
(3) If such breach is specific to given Patent rights licensed by a
Party to the breaching Party under Article 6 hereof, then such termination shall
not be as to the whole agreement but only as to such licensed rights as pertain
to such Patent; and
(4) If such breach is specific to a right licensed to, or an
obligation assumed by, the breaching Party with respect to the licensing Party's
Core Technology under Article 5 hereof, then the licensing Party shall not have
the right to terminate, unless either (A) such breach is a willful and
intentional breach or grossly negligent breach of the non-disclosure obligations
or limitations on the scope of the licensee's license rights, or (B) in the case
of any other curable, material breach of a right licensed to, or an obligation
assumed by, the breaching Party with respect to the licensing Party's Core
Technology under Article 5 hereof, such breaching Party fails to take diligent
steps to cure such breach after notice thereof, in which case such termination
shall not be as to the whole agreement but only as to the rights licensed to the
other Party with respect to the licensing Party's Core Technology as to which
the licensee Party committed and (if applicable) failed to cure the breach; and
(5) If such breach involves an alleged failure to pay a milestone
payment or royalty amount believed by Exelixis to be owed by BMS, but BMS in
good faith disputes such payment obligations, and an arbitration was held to
resolve the dispute which arbitration ruled that such amount (or some other
amount) is owed by BMS, then this Agreement may not be terminated by Exelixis
unless BMS fails to pay such amount as determined to be owed under such
arbitration within thirty (30) days after the date of such arbitration ruling.
(b) If a Party gives notice of termination under this Section 11.2 and the
other Party disputes whether such notice was proper, then the issue of whether
this Agreement has been terminated shall be resolved in accordance with Section
14.1. If as a result of such dispute resolution process it is determined that
the notice of termination was proper, then such termination shall be deemed to
have been effective thirty (30) days following the date of the notice of
termination. If as a result of such dispute resolution process it is determined
that the notice of termination was improper, then no termination shall have
occurred and this Agreement shall have remained in effect.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
59.
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11.3 Change in Control. If, during the Research Term, Exelixis or any
Exelixis Affiliate controlling Exelixis, experiences a "pharmaceutical change in
control" (as defined below), then BMS shall have the right to terminate the
Research Program at anytime thereafter, effective upon not less than [ * ].
Exelixis shall continue to perform its duties under the Mode of Action Program
and this Agreement during such notice period. Other than such payments, [ * ]
with respect to the termination of the Research Term, except for such milestone
and royalty obligations as BMS may otherwise have thereafter under this
Agreement with respect to the development and commercialization of Collaboration
Compounds and Licensed Products and New Indications.
For purposes of this Agreement, the term [ * ] shall mean any
[ * ].
11.4 Effect of Termination; Survival.
(a) Upon any termination by Exelixis of this Agreement (or the
applicable aspect or portion thereof) pursuant to Section 11.2:
(i) all rights and licenses granted by Exelixis to BMS
under Article 5 and 6 will terminate, except where termination of such licenses
and covenants is qualified and limited by sections 11.2(a)(1)-(5) hereof, in
which event BMS shall retain the rights and licenses not terminated; and
(ii) BMS shall, within sixty (60) days of such
termination, return all Confidential Information of Exelixis pertaining to the
terminated rights and licenses, and Exelixis shall return all BMS Compounds
provided to it that relate to such terminated rights; and
(iii) BMS shall cease to use any Research Results, Exelixis
Patents or other Confidential Information of Exelixis that comprise or relate to
such terminated rights, except to the extent reasonably required by BMS in order
to continue to develop and commercialize any Collaboration Compounds and
Licensed Products then in development subject to the payment by BMS of any
milestones and royalties that would otherwise be due on same; provided that,
notwithstanding the foregoing, in the event BMS has twice materially breached
its payment obligations with respect to milestones and/or royalties due on a
particular Collaboration Compound or Licensed Product and has failed to cure
same within the notice period set forth in Section 11.2, then effective
immediately upon the third such material breach not cured within such cure
period, all of BMS' rights to such Collaboration Compound or Licensed Product
shall terminate, and BMS shall immediately cease commercializing such
Collaboration Compound or Licensed Product and cease using the related Research
Results, Exelixis Patents and other Confidential Information of Exelixis with
respect to commercializing such Collaboration Compound or Licensed Product;
(iv) Exelixis may continue to use the rights licensed to
it under Articles 5 and 6 hereof in accordance with, and subject to the terms
and conditions of, this Agreement; and
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
60.
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(v) Exelixis shall not be obligated to disclose or license to BMS
any Improvement Inventions made thereafter by it to the Exelixis Core Technology
or BMS Core Technology after such termination date.
(b) Upon any termination of this Agreement by BMS pursuant to Section
11.2:
(i) all licenses granted by BMS to Exelixis under Articles 5 and 6
will terminate, except where termination of such licenses and covenants is
qualified and limited by sections 11.2(a)(1)-(5) hereof, in which event Exelixis
shall retain the rights and licenses not terminated;
(ii) Exelixis shall, within sixty (60) days of such termination,
return all Confidential Information of BMS pertaining to the terminated rights
and licenses, and Exelixis shall return all BMS Compounds provided to it that
relate to such terminated rights;
(iii) Exelixis and its (sub)licensees may continue to use outside the
Field any data and research results obtained by it from the use prior to
termination of the licensed rights that are terminated hereunder and may
continue to develop and commercialize any compounds (and products incorporating
same) thereafter outside the Field based on the exercise of such rights outside
the Field prior to termination, provided that Exelixis and its (sub)licensees do
not infringe any Valid Claims of any BMS Patents or use, except to the extent
relating to any unterminated rights and licenses and except as otherwise
permitted under this Agreement, any Confidential Information of BMS or Exelixis-
generated Research Results in doing so; and
(iv) BMS' rights under Articles 5 and 6 shall survive, and BMS may
continue to use such rights licensed to it in accordance with, and subject to
the terms and conditions of, this Agreement, and provided further that, with
respect to exercise of the rights granted under Article 6, BMS complies with the
payment terms and conditions of Article 8 of this Agreement; and
(v) BMS shall not be obligated to disclose or license to Exelixis
any Improvement Inventions made thereafter by it to the Exelixis Core Technology
or BMS Core Technology after such termination date.
(c) Upon termination of the Research Term as provided in Section 11.3:
(i) Exelixis shall return all BMS Compounds provided to it;
(ii) BMS' and Exelixis' rights under Articles 5 and 6 shall survive,
and BMS and Exelixis each may continue to use such rights licensed to it in
accordance with, and subject to the terms and conditions of, this Agreement; and
(iii) Neither Party shall be obligated to disclose or license to the
other Party any Improvement Inventions made thereafter by it to its Core
Technology or the other Party's Core Technology after such termination date.
(d) Upon any termination of this Agreement by BMS pursuant to Section 3.2:
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
61.
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(i) all licenses granted by each Party to the other Party under
Article 6 will terminate;
(ii) Each Party shall, within sixty (60) days of such termination,
return all Confidential Information of the other Party pertaining to the
terminated rights and licenses, and Exelixis shall return all BMS Compounds
provided to it;
(iii) BMS shall cease all use of any Targets and other Research
Results disclosed by Exelixis and any mammalian orthologues of such Targets
identified by use of such Collaboration information, unless and until such
mammalian orthologues, and their relevance to the applicable BMS Compounds, are
disclosed publicly or to BMS by a Third Party or are independently discovered by
BMS employees without use of such Research Results; and
(iv) Neither Party shall be obligated to disclose or license to the
other Party any Improvement Inventions made thereafter by it to its Core
Technology or the other Party's Core Technology after such termination date.
(e) In the event of termination of this Agreement pursuant to Section
11.2, 11.3 or 3.2, the following provisions of this Agreement shall survive:
Articles 1, 9, 10, 13 and 14 and Sections 3.6, 3.7 (last sentence), 3.8, 4.15,
4.17 (last sentence), 5.7(c), 5.8, 11.4(f), 12.1, 12.3, 12.4 and 12.5, as well
as those other provisions of this Agreement as are necessary to give effect to
any surviving rights and licenses described in Section 11.4 hereof.
(f) In any event, termination of this Agreement shall not relieve the
Parties of any liability which accrued hereunder prior to the effective date of
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
Agreement nor prejudice either Party's right to obtain performance of any
obligation.
12. Representations and Covenants
12.1 Mutual Authority. Exelixis and BMS each represents and warrants to
the other that (i) it has the authority and right to enter into and perform this
Agreement, (ii) this Agreement is a legal and valid obligation binding upon it
and is enforceable in accordance with its terms, subject to applicable
limitations on such enforcement based on bankruptcy laws and other debtors'
rights, and (iii) its execution, delivery and performance of this Agreement will
not conflict in any material fashion with the terms of any other agreement or
instrument to which it is or becomes a party or by which it is or becomes bound,
nor violate any law or regulation of any court, governmental body or
administrative or other agency having authority over it.
12.2 Rights in Technology. During the term of this Agreement, each Party
will use commercially reasonable efforts not to diminish the rights under its
Pre-existing Inventions, Sole Inventions or Joint Inventions granted to each
other herein, including without limitation by not committing or permitting any
acts or omissions which would cause the breach of any agreements between itself
and Third Parties which provide for intellectual property rights applicable to
the development, manufacture, use or sale of Licensed Products. Each Party
agrees to provide promptly the other Party with notice of any such alleged
breach. As of the Effective Date, each
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
62.
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Party is in compliance in all material respects with any aforementioned
agreements with Third Parties.
12.3 Performance by Affiliates. The Parties recognize that each may
perform some or all of its obligations under this Agreement through Affiliates,
provided, however, that each Party shall remain responsible and be guarantor of
the performance by its Affiliates and shall cause its Affiliates to comply with
the provisions of this Agreement in connection with such performance. In
particular, if any Affiliate of a Party participates in research under this
Agreement or with respect to Collaboration Compounds, (i) the restrictions of
this Agreement which apply to the activities of a Party with respect to Selected
Targets and Collaboration Compounds shall apply equally to the activities of
such Affiliate, and (ii) the Party affiliated with such Affiliate shall assure,
and hereby guarantees, that any intellectual property developed by such
Affiliate shall be governed by the provisions of this Agreement (and subject to
the licenses set forth in Article 6) as if such intellectual property had been
developed by the Party.
12.4 Exelixis Representations and Warranties. Exelixis represents and
warrants to BMS that as of the Effective Date:
(a) Exelixis is the owner and/or licensee of the Exelixis Core
Technology and of those patents listed on Exhibit C, and that, to the knowledge
of the officers of Exelixis, Exelixis has not entered into any agreement that
prohibits Exelixis from using or licensing same as contemplated in this
Agreement.
(b) To the knowledge of the officers of Exelixis, (1) the performance
by Exelixis of the activities contemplated for it under this Agreement,
including without limitation the use of any of its technologies, software
developed by it, any compounds or biomaterials (other than the BMS Compounds),
any patents Controlled by it (including without limitation the patents listed on
Exhibit C), and any know-how in the conduct of the Mode of Action Program and
(2) the rights and licenses to be granted by it hereunder, will not infringe any
patents, and with respect to the FlyTag Database, any copyrights, owned by Third
Parties.
(c) There is no action, suit or proceeding pending or, to the
knowledge of the officers of Exelixis, that has been threatened in writing by
any Third Party against Exelixis which, if adversely determined, would have a
material adverse effect upon the ability of Exelixis to use, or license to BMS
as contemplated hereunder, any technologies, any software developed by it, any
compounds or biomaterials (other than the BMS Compounds), and any know-how,
including the without limitation the FlyTag Database and the patents listed on
Exhibit C, to perform its obligations under this Agreement.
(d) The Exelixis Core Technology has not been developed or obtained
by Exelixis in violation of any contractual or fiduciary obligation to which
Exelixis, any predecessor-in-interest or, to its knowledge, any of its or their
employees is or was a party or by misappropriation of the trade secrets of any
Third Party.
(e) To the knowledge of the officers of Exelixis, the issued claims
under the Patents listed on Exhibit C are not dominated, as of the Effective
Date, by any issued patents of any Third Party in the United States.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
63.
<PAGE>
(f) To the knowledge of the officers of Exelixis, with respect to any
Patent, copyright or know-how rights relating to C. elegans or Drosophila that
are contained within the Exelixis Core Technology listed on Exhibit C (including
without limitation any aspect of the FlyTag Database) that are licensed to
Exelixis, Exelixis is not restricted or prevented from licensing such rights to
BMS as contemplated in Article 5, except for the restrictions set forth
expressly in Section 5.3.
12.5 BMS Representations and Warranties. BMS represents and warrants to
Exelixis that as of the Effective Date:
(a) BMS is the owner and/or licensee of the BMS Core Technology and
of those patents listed on Exhibit B-1, and that, to the knowledge of the
officers of BMS, BMS has not entered into any agreement that prohibits BMS from
using or licensing same as contemplated in this Agreement.
(b) Except as otherwise provided on Exhibit E, to the knowledge of
the officers of BMS: (1) the performance by BMS of the activities contemplated
for it under this Agreement, including without limitation the use of any of its
technologies, software developed by it, any compounds or biomaterials, any
patents Controlled by it (including without limitation the patents listed on
Exhibit B-1), and any know-how in the conduct of the Mode of Action Program and
(2) the rights and licenses to be granted by it hereunder, will not infringe any
patents, and with respect to the BMS Software, any copyrights, owned by Third
Parties.
(c) There is no action, suit or proceeding pending or, to the
knowledge of the officers of BMS, that has been threatened in writing by any
Third Party against BMS which, if adversely determined, would have a material
adverse effect upon the ability of BMS to use, or license to Exelixis as
contemplated hereunder, any technologies, any software developed by it, any
compounds or biomaterials, and any know-how, including the without limitation
the BMS Software and the patents listed on Exhibit B-1 to perform its
obligations under this Agreement.
(d) The BMS Core Technology has not been developed or obtained by BMS
in violation of any contractual or fiduciary obligation to which BMS, any
predecessor-in-interest or, to its knowledge, any of its or their employees is
or was a party or by misappropriation of the trade secrets of any Third Party.
(e) Except as otherwise provided on Exhibit E, to the knowledge of
the officers of BMS, the issued claims under the Patents listed on Exhibit B-1
are not dominated, as of the Effective Date, by any issued patents of any Third
Party in the United States.
13. Indemnification and Limitation of Liability
13.1 Mutual Indemnification. Subject to Sections 13.2, 13.3 and 13.4, each
Party hereby agrees to indemnify, defend and hold the other Party, its
Affiliates, its licensees, and its and their officers, directors, employees,
consultants, contractors, sublicensees and agents (collectively, the
"Indemnitees") harmless from and against any and all damages or other amounts
payable to a Third Party claimant, as well as any reasonable attorneys' fees and
costs of litigation incurred by such Indemnitee as to any such Claim (as defined
in this Section 13.1) until
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
64.
<PAGE>
the indemnifying Party has acknowledged that it will provide indemnification
hereunder with respect to such Claim as provided below, (collectively,
"Damages") resulting from claims, suits, proceedings or causes of action
("Claims") brought by such Third Party against such Indemnitee based on: (a) a
breach of warranty by the indemnifying Party contained in this Agreement; (b)
breach of this Agreement or applicable law by such indemnifying Party; (c)
negligence or willful misconduct of a Party, its Affiliates or (sub)licensees,
or their respective employees, contractors or agents in the performance of this
Agreement; and/or (d) breach of a contractual or fiduciary obligation owed by it
to a Third Party (including without limitation misappropriation of trade
secrets).
13.2 Indemnification by BMS. BMS agrees to indemnify, defend and hold
Exelixis, its Affiliates, and its and their officers, directors, employees,
consultants, contractors, and agents (collectively, the "Exelixis Indemnitees")
harmless from and against any and all damages, losses, liabilities or other
amounts payable by any of them to a Third Party claimant, as well as any
reasonable attorneys' fees and costs of litigation incurred by such Exelixis
Indemnitee as to any such Claim (as defined in this Section 13.2) until BMS has
acknowledged that it will provide indemnification hereunder with respect to such
Claim as provided below, (collectively, "Damages") resulting from claims, suits,
proceedings or causes of action ("Claims") brought by such Third Party based on:
(i) [ * ] in connection therewith, but excluding any claim relating to [ * ]
(except as provided in (iv) below); (ii) [ * ]; (iii) personal injury or death
relating to or arising out of the [ * ] by or on behalf of BMS or its
Affiliates, agents or sublicensees; (iv) [ * ]; (v) [ * ]; and (vi) [ * ].
13.3 Indemnification by Exelixis. Exelixis agrees to indemnify, defend and
hold BMS, its Affiliates, and its and their officers, directors, employees,
consultants, contractors, and agents (collectively, the "BMS Indemnitees")
harmless from and against any and all damages, losses, liabilities or other
amounts payable by any of them to a Third Party claimant, as well as any
reasonable attorneys' fees and costs of litigation incurred by such BMS
Indemnitee as to any such Claim (as defined in this Section 13.3) until Exelixis
has acknowledged that it will provide indemnification hereunder with respect to
such Claim as provided below, (collectively, "Damages") resulting from claims,
suits, proceedings or causes of action ("Claims") brought by any such Third
Party based on (i) [ * ], including without limitation, for both subparagraphs
(A) and (B), [ * ]; (ii) [ * ]; (iii) personal injury or death relating to or
arising out of the [ * ]; (iv) [ * ]; and (v) [ * ].
13.4 Conditions to Indemnification. As used herein, "Indemnitee" shall mean
a party entitled to indemnification under the terms of Sections 13.1, 13.2 or
13.3, as applicable. It shall be a condition precedent to an Indemnitee's right
to seek indemnification under such Sections 13.1, 13.2 or 13.3:
(i) shall inform the indemnifying Party under such applicable Section
of a Claim as soon as reasonably practicable after it receives notice of the
Claim;
(ii) shall, if the indemnifying Party acknowledges that such Claim
falls within the scope of its indemnification obligations hereunder, permit the
indemnifying Party to
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
65.
<PAGE>
assume direction and control of the defense, litigation, settlement, appeal or
other disposition of the Claim (including the right to settle the claim solely
for monetary consideration); provided, that the indemnifying Party shall seek
the prior written consent (not to be unreasonably withheld or delayed) of any
such Indemnitee as to any settlement which would materially diminish or
materially adversely affect the scope, exclusivity or duration of any Exelixis
Patents licensed to BMS under this Agreement (except that BMS may sublicense
such rights if in accordance with this Agreement without the consent of
Exelixis), would require any payment by such Indemnitee, would require an
admission of legal wrongdoing in any way on the part of an Indemnitee, or would
effect an amendment of this Agreement; and
(iii) shall fully cooperate (including providing access to and
copies of pertinent records and making available for testimony relevant
individuals subject to its control) as reasonably requested by, and at the
expense of, the indemnifying Party in the defense of the Claim.
Provided that an Indemnitee has complied with the foregoing, the
indemnifying Party shall provide attorneys reasonably acceptable to the
Indemnitee to defend against any such Claim. Subject to the foregoing, an
Indemnitee may participate in any proceedings involving such Claim using
attorneys of its/his/her choice and at its/his/her expense. In no event may an
Indemnitee settle or compromise any Claim for which it/he/she intends to seek
indemnification from the indemnifying Party hereunder without the prior written
consent of the indemnifying Party, or the indemnification provided under such
Sections 13.1, 13.2 or 13.3, as the case may be, as to such Claim shall be null
and void.
13.5 Limitation of Liability. EXCEPT AS SPECIFICALLY PROVIDED IN SECTION
13.1, EXCEPT FOR BREACHES OF SECTIONS 3.8, 4.11 (AS TO THE USE OF LICENSES
GRANTED THEREIN TO EXELIXIS), 4.12, 6.1, 6.2, 6.3, 7.2, 12.1, AND 12.2, AND
ARTICLES 5, 9 AND 10 HEREOF, AND EXCEPT FOR ACTS OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, IN NO EVENT SHALL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR
ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR
OTHERWISE, ARISING OUT THE PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT. For
clarification, the foregoing sentence shall not be interpreted to limit or to
expand the express rights specifically granted in the sections of this
Agreement.
13.6 Core Technology Disclaimer. EXCEPT AS PROVIDED IN ARTICLE 12 ABOVE,
THE BMS CORE TECHNOLOGY PROVIDED HEREUNDER IS PROVIDED "AS IS", AND BMS
EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES WITH RESPECT TO ITS CORE TECHNOLOGY. EXCEPT AS
PROVIDED IN ARTICLE 12 ABOVE, THE EXELIXIS CORE TECHNOLOGY PROVIDED HEREUNDER IS
PROVIDED "AS IS", AND EXELIXIS EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES
OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
66.
<PAGE>
WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF
THIRD PARTIES WITH RESPECT TO ITS CORE TECHNOLOGY.
13.7 Collaboration Disclaimer. EXCEPT AS PROVIDED IN ARTICLE 12 ABOVE,
BMS EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES WITH RESPECT TO ANY RESEARCH RESULTS, TARGETS,
DATA, OR INVENTIONS (AND ANY PATENT RIGHTS OBTAINED THEREON) IDENTIFIED, MADE OR
GENERATED BY BMS AS PART OF THE COLLABORATION OR OTHERWISE MADE AVAILABLE TO
EXELIXIS PURSUANT TO THE TERMS OF THIS AGREEMENT. EXCEPT AS PROVIDED IN ARTICLE
12 ABOVE, EXELIXIS EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES WITH RESPECT TO ANY RESEARCH
RESULTS, TARGETS, DATA, OR INVENTIONS (AND ANY PATENT RIGHTS OBTAINED THEREON)
IDENTIFIED, MADE OR GENERATED BY EXELIXIS AS PART OF THE COLLABORATION OR
OTHERWISE MADE AVAILABLE TO BMS PURSUANT TO THE TERMS OF THIS AGREEMENT.
14. Miscellaneous
14.1 Dispute Resolution.
(a) In the event of any controversy or claim arising out of,
relating to or in connection with any provision of this Agreement, other than a
dispute addressed in Section 14.3, the Parties shall try to settle their
differences amicably between themselves first, by referring the disputed matter
to the Joint Management Team, and, if not resolved by the JMT, by referring the
disputed matter to the respective Chief Executive Officer of Exelixis and the
Senior Vice President - Drug Discovery Research of BMS. Either Party may
initiate such informal dispute resolution by sending written notice of the
dispute to the other Party, and, within 20 days after such notice, such
representatives of the Parties shall meet for attempted resolution by good faith
negotiations. If such personnel are unable to resolve such dispute within thirty
(30) days of initiating such negotiations, such dispute shall be finally
resolved by binding arbitration under Section 14.1(b).
(b) Any such arbitration shall be held in San Francisco,
California, according to the Commercial Arbitration Rules (the "Rules") of the
American Arbitration Association. Any arbitration herewith shall be conducted in
the English language. The arbitration shall be conducted by one arbitrator who
is knowledgeable in the subject matter which is at issue in the dispute and who
is selected by mutual agreement of the Parties or, failing such agreement, shall
be selected according to the AAA rules. The Parties shall have such discovery
rights as the
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
67.
<PAGE>
arbitrator may allow, consistent with the goal of limiting the cost and time
which the Parties must expend for discovery (and provided that the arbitrator
shall permit such discovery he/she deems necessary to permit an equitable
resolution of the dispute), but in no event broader than that discovery
permitted under the Federal Rules of Civil Procedure. In conducting the
arbitration, the arbitrator shall apply the California Rules of Evidence, and
shall be able to decree any and all relief of an equitable nature, including but
not limited to such relief as a temporary restraining order, a preliminary
injunction, a permanent injunction, or replevin of property, as well as specific
performance. The arbitrator shall also be able to award direct, indirect and,
where permitted by this Agreement, consequential damages, but shall not award
any other form of damage (e.g., punitive or exemplary damages). The reasonable
fees and expenses, of the arbitrators, along with the reasonable legal fees and
expenses of the prevailing Party (including all expert witness fees and
expenses), the fees and expenses of a court reporter, and any expenses for a
hearing room, shall be paid as follows: If the arbitrators rule in favor of one
Party on all disputed issues in the arbitration, the losing Party shall pay one
hundred percent (100%) of such fees and expenses; if the arbitrators rule in
favor of one Party on some issues and the other Party on other issues, the
arbitrators shall issue with the rulings a written determination as to how such
fees and expenses shall be allocated between the Parties. The arbitrators shall
allocate fees and expenses in a way that bears a reasonable relationship to the
outcome of the arbitration, with the Party prevailing on more issues, or on
issues of greater value or gravity, recovering a relatively larger share of its
legal fees and expenses. The decision of the arbitrators shall be final and may
be entered, sued on or enforced by the Party in whose favor it runs in any court
of competent jurisdiction at the option of such Party. Whether a claim, dispute
or other matter in question would be barred by the applicable statute of
limitations, which statute of limitations also shall apply to any claim or
disputes subject to arbitration under this Section, shall be determined by
binding arbitration pursuant to this Section.
14.2 Governing Law. Resolution of all disputes arising out of or related
to this Agreement or the performance, enforcement, breach or termination of this
Agreement and any remedies relating thereto, shall be governed by and construed
under the substantive laws of the State of California, without regard to
conflicts of law rules.
14.3 Certain Disputes. Notwithstanding anything to the contrary in
Section 14.1, either Party may seek immediate injunctive or other interim
relief, without resort to the procedures set forth in Section 14.1(a) or (b),
from any court of competent jurisdiction with respect any dispute, controversy
or claim relating to the scope, validity, enforceability or infringement of any
Patent rights, copyrights, trade secrets, or trademark rights owned or
Controlled by a party or its Affiliates or relating to any breach of Sections
hereof.
14.4 Entire Agreement; Amendment. This Agreement sets forth the
complete, final and exclusive agreement and all the covenants, promises,
agreements, warranties, representations, conditions and understandings between
the Parties hereto and supersedes and terminates all prior agreements and
understandings between the Parties. There are no covenants, promises,
agreements, warranties, representations, conditions or understandings, either
oral or written, between the Parties other than as are set forth herein and
therein. No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon the Parties unless reduced to writing and signed
by an authorized officer of each Party.
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
68.
<PAGE>
14.5 Export Control. This Agreement is made subject to any restrictions
concerning the export of Products or technical information from the United
States of America or other countries which may be imposed upon or related to
Exelixis or BMS from time to time. Each Party agrees that it will not export,
directly or indirectly, any technical information acquired from the other Party
under this Agreement or any Products using such technical information to a
location or in a manner that at the time of export requires an export license or
other governmental approval, without first obtaining the written consent to do
so from the appropriate agency or other governmental entity.
14.6 Bankruptcy.
(a) All rights and licenses granted under or pursuant to this
Agreement, including amendments hereto, by each Party to the other Party are,
for all purposes of Section 365(n) of Title 11 of the U.S. Code ("Title 11"),
licenses of rights to intellectual property as defined in Title 11. Each Party
agrees during the term of this Agreement to create and maintain current copies
or, if not amenable to copying, detailed descriptions or other appropriate
embodiments, to the extent feasible, of all such intellectual property. If a
case is commenced by or against either Party (the "Bankrupt Party") under Title
11, then, unless and until this Agreement is rejected as provided in Title 11,
the Bankrupt Party (in any capacity, including debtor-in-possession) and its
successors and assigns (including, without limitation, a Title 11 Trustee)
shall, at the election of the Bankrupt Party made within sixty (60) days after
the commencement of the case (or, if no such election is made, immediately upon
the request of the non-Bankrupt Party) either (i) perform all of the obligations
provided in this Agreement to be performed by the Bankrupt Party including,
where applicable and without limitation, providing to the non-Bankrupt Party
portions of such intellectual property (including embodiments thereof) held by
the Bankrupt Party and such successors and assigns or otherwise available to
them as to which the non-Bankrupt Party has rights or (ii) provide to the non-
Bankrupt Party all such intellectual property (including all embodiments
thereof) held by the Bankrupt Party and such successors and assigns or otherwise
available to them as to which the non-Bankrupt Party has rights.
(b) If a Title 11 case is commenced by or against the Bankrupt
Party and this Agreement is rejected as provided in Title 11 and the non-
Bankrupt Party elects to retain its rights hereunder as provided in Title 11,
then the Bankrupt Party (in any capacity, including debtor-in-possession) and
its successors and assigns (including, without limitations, a Title 11 Trustee)
shall provide to the non-Bankrupt Party all such intellectual property
(including all embodiments thereof) held by the Bankrupt Party and such
successors and assigns or otherwise available to them as to which the non-
Bankrupt Party has rights immediately upon the non-Bankrupt Party's written
request therefor. Whenever the Bankrupt Party or any of its successors or
assigns provides to the non-Bankrupt Party any of the intellectual property
licensed hereunder (or any embodiment thereof) pursuant to this Section 14.6,
the non-Bankrupt Party shall have the right to perform the obligations of the
Bankrupt Party hereunder with respect to such intellectual property, but neither
such provision nor such performance by the non-Bankrupt Party shall release the
Bankrupt Party from any such obligation or liability for failing to perform it.
(c) All rights, powers and remedies of the non-Bankrupt Party
provided herein are in addition to and not in substitution for any and all other
rights, powers and remedies
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
69.
<PAGE>
now or hereafter existing at law or in equity (including, without limitation,
Title 11) in the event of the commencement of a Title 11 case by or against the
Bankrupt Party. The non-Bankrupt Party, in addition to the rights, power and
remedies expressly provided herein, shall be entitled to exercise all other such
rights and powers and resort to all other such remedies as may now or hereafter
exist at law or in equity (including, without limitation, under Title 11) in
such event. The Parties agree that they intend the foregoing non-Bankrupt Party
rights to extend to the maximum extent permitted by law and any provisions of
applicable contracts with Third Parties. Any intellectual property provided
pursuant to the provisions of this Section 14.6 shall be subject to the licenses
set forth elsewhere in this Agreement and the payment obligations of this
Agreement, which shall be deemed to be royalties for purposes of Title 11.
14.7 Force Majeure. Both Parties shall be excused from the performance
of their obligations under this Agreement to the extent that such performance is
prevented by force majeure and the nonperforming Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued so long as
the condition constituting force majeure continues and the nonperforming Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall include conditions beyond the control of the
Parties, including without limitation, an act of God, voluntary or involuntary
compliance with any regulation, law or order of any government, war, civil
commotion, labor strike or lock-out, epidemic, failure or default of public
utilities or common carriers, destruction of production facilities or materials
by fire, earthquake, storm or like catastrophe; provided, however, the payment
of invoices due and owing hereunder shall not be delayed by the payer because of
a force majeure affecting the payer.
14.8 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this Agreement and
shall be deemed to have been sufficiently given for all purposes if mailed by
first class certified or registered mail, postage prepaid, express delivery
service or personally delivered. Unless otherwise specified in writing, the
mailing addresses of the Parties shall be as described below.
For Exelixis: Exelixis Pharmaceuticals, Inc.
260 Littlefield Avenue
South San Francisco, CA 94080
Attention: Chief Executive Officer
With a copy to: Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Barclay James Kamb, Esq.
For BMS: Bristol-Myers Squibb Pharmaceutical Research Institute
Route 206 and Province Line Road
Princeton, NJ 08543-4000
Attention: Senior Vice President - Drug Discovery
[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
70.
<PAGE>
With a copy to: Bristol-Myers Squibb Pharmaceutical Research Institute
Route 206 and Province Line Road
Princeton, NJ 08543-4000
Attention: Vice President and Senior Counsel - BMSPRI
14.9 Consents Not Unreasonably Withheld or Delayed. Whenever provision is
made in this Agreement for either Party to secure the consent or approval of the
other, that consent or approval shall, except as otherwise expressly provided,
not unreasonably be withheld or delayed, and whenever in this Agreement
provisions are made for one Party to object to or disapprove a matter, such
objection or disapproval shall not unreasonably be exercised.
14.10 Maintenance of Records. Each Party shall keep and maintain all
records required by law or regulation with respect to Licensed Products or BMS
Products.
14.11 United States Dollars. References in this Agreement to "Dollars" or
"$" shall mean the legal tender of the United States of America.
14.12 No Strict Construction. This Agreement has been prepared jointly and
shall not be strictly construed against either Party.
14.13 Assignment. Neither Party may assign or transfer this Agreement or
any rights or obligations hereunder without the prior written consent of the
other, except that a Party may make such an assignment of the Agreement without
the other Party's consent to an Affiliate or to a successor to all or
substantially all of the business of such Party, whether in a merger, sale of
stock, sale of assets or other similar transaction, provided that any such
permitted successor or assignee of rights and/or obligations hereunder shall
have first, either by operation of law or in a writing to the other Party,
expressly assumed performance of such rights and/or obligations. Any permitted
assignment shall be binding on the successors of the assigning Party. Any
assignment or attempted assignment by either Party in violation of the terms of
this Section 14.13 shall be null and void and of no legal effect.
14.14 Electronic Data Interchange. If both Parties elect to facilitate
business activities hereunder by electronically sending and receiving data in
agreed formats (also referred to as Electronic Data Interchange or "EDI") in
substitution for conventional paper-based documents, the terms and conditions of
this Agreement shall apply to such EDI activities.
14.15 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14.16 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
14.17 Severability. If any one or more of the provisions of this Agreement
is held to be invalid or unenforceable by any court of competent jurisdiction
from which no appeal can be or is taken, the provision shall be considered
severed from this Agreement and shall not serve to
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
71.
<PAGE>
invalidate any remaining provisions hereof. The Parties shall make a good faith
effort to replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by the Parties when
entering this Agreement may be realized.
14.18 Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authored the ambiguous provision.
14.19 Headings. The headings for each article and section in this Agreement
have been inserted for convenience of reference only and are not intended to
limit or expand on the meaning of the language contained in the particular
article or section.
14.20 No Waiver. Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such Party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.
In Witness Whereof, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.
Bristol-Myers Squibb Company Exelixis Pharmaceuticals, Inc.
By: /s/ E. Sigal By: /s/ George Scangos
----------------------- ---------------------------
Elliot Sigal, M.D.
Title: Sr. Vice President Title: Chief Executive Officer
--------------------- ------------------------
Early Discovery & Applied Technology
Date: September 14, 1999 Date: September 14, 1999
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
72.
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EXHIBIT A
EXAMPLES OF CONCEPTUAL AND PREASSOCIATED TARGETS
The following is intended to illustrate how a Conceptual or Preassociated
Target might arise:
Conceptual Targets
[ * ]
Preassociated Targets
[ * ]
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
A-1.
<PAGE>
Exhibit B
BRISTOL-MYERS SQUIBB
COMBINATORIAL LEAD OPTIMIZATION TECHNOLOGY
TECHNOLOGY TRANSFER TO EXELIXIS
I. OVERVIEW.
BMS CDD shall transfer to Exelixis [ * ].
II. SCOPE OF ENABLEMENT.
[ * ]
. [ * ]
An outline of the BMS/HTC software capabilities is appended below: In
addition, BMS will provide Exelixis with generic descriptions of all [ * ]
and use of same that are of interest to BMS (whether or not disclosed in
BMS patents or publications).
III. MILESTONES
The parties will use reasonable efforts to effect (in the case of Exelixis,
this will include obtaining and installing in advance necessary equipment
and licenses from Third Parties) following timetable for transfer of
BMS/HTC (it being understood that, if Exelixis is ready to receive the
items below more quickly, BMS will use reasonable efforts to accommodate
such advances in the schedule):
3 Months after signing: [ * ]
6 Months after signing: [ * ]
2 Months after signing: [ * ]
IV. BMS/HTC SOFTWARE CAPABILITIES
a. [ * ]
2. [ * ]
[ * ]
V. PATENTS
Patents filed with respect to the BMS Core Technology are described in
Exhibit B-1 attached hereto.
VI. OTHER MATTERS
[ * ]
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
B-1.
<PAGE>
Exhibit B-1
PATENTS ON BMS CORE TECHNOLOGY
Patent Status of BMS First Generation Combinatorial Reactor
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Patent Status of BMS Second Generation Combinatorial Reactor
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[ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
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[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
B-1-1.
<PAGE>
Exhibit C
EXELIXIS CORE TECHNOLOGY
(Hard copy of US Patent No. 4,670,388 and four Flytag Release slides also
attached)
Technology transfer to BMS
[ * ]
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
C-1.
<PAGE>
Exhibit C
EPI Model System Genetic Technology Proposed Technology Transfer to BMS
I. OVERVIEW.
[ * ].
II. SCOPE OF ENABLEMENT.
[ * ].
Subject to the terms of any Agreements EPI may have with Third Parties
(including without limitation confidentiality restrictions), which EPI will
identify for BMS, EPI will provide to BMS the following components of the
EPI genetics, genomics and computational biology platform:
. [ * ]
III. MILESTONES.
The parties will use reasonable efforts to effect (in the case of BMS, this
will include obtaining and installing in advance necessary equipment and
licenses from Third Parties) the following timetable for transfer of
developed technology (it being understood that, if BMS is ready to receive
the items below more quickly, Exelixis will use reasonable efforts to
accommodate such advances in the schedule):
Upon Signing: [ * ].
6 Months after Signing: [ * ].
9 Months after Signing: [ * ].
12 Months after Signing: [ * ].
IV. DEFINITION OF FLYTAG(TM) DATABASE
[ * ].
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
C-1.
<PAGE>
Exelixis Pharmaceuticals, Inc.
FlyTag Release 5.0
Assembly Summary 26405-27073
[ * ]
Assembly: 27045
Tiling pattern
[ * ]
BLAST hits
[ * ]
Text search
[ * ]
U.S. Patent number 4,670,388, granted June 2, 1987, to Carnegie Institution of
Washington, Washington, D.C., inventors Gerald M. Rubin and Allan C. Spradling,
"Method of Incorporating DNA into Genome of Drosophila", is herein incorporated
by reference to the Internet full-text patent database at the United States
Patent and Trademark Office Internet website, www.uspto.gov.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
D-2.
<PAGE>
Exhibit D
FORM OF PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: Sylvia D. Sharockman
Bristol-Myers Squibb Company
609-252-3390
George Scangos, Ph.D.
Chief Executive Officer
Exelixis Pharmaceuticals, Inc.
650-825-2201
Tony Russo, Ph.D.
Noonan/Russo Communications, Inc.
212-696-4455
BRISTOL MYERS SQUIBB COMPANY AND EXELIXIS PHARMACEUTICALS ANNOUNCE GENOMICS
RESEARCH ALLIANCE
Collaboration to Focus on the Identification of Novel Targets for New
Medicines
(PRINCETON, N.J. and SOUTH SAN FRANCISCO, C.A., September 15, 1999) -
Bristol-Myers Squibb Company (NYSE:BMY) and Exelixis Pharmaceuticals, Inc. today
announced they have entered into a three-year research collaboration to identify
novel targets for new medicines using model system genetics. Exelixis will
utilize its proprietary technology to determine the molecular targets of
compounds provided by Bristol-Myers Squibb. As part of the collaboration,
Bristol-Myers Squibb and Exelixis will share certain core technologies in
genomics and lead optimization.
Under the terms of the agreement, Bristol-Myers Squibb will provide
Exelixis with research funding and additional payments subject to the
achievement of research and commercialization milestones. Exelixis, a leading
model systems genetics, genomics and informatics company, will contribute to the
work of Bristol-Myers Squibb's internal Department of Applied Genomics. Both
companies have programs in model system genetics, the study of organisms such as
yeast, worms (C.
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
D-2.
<PAGE>
elegans) and fruit flies (Drosophila), to better understand disease genetics in
humans. Many genes and gene functions present in these model systems are
conserved in humans, but are much easier to study in these simpler genetic
systems.
"Our strategy is to externally align and internally integrate, meaning that
we partner with companies, like Exelixis, that offer the most promising
technology and approaches in specialized areas, " said Elliott Sigal, M.D.,
Ph.D., senior vice president, Early Discovery and Applied Technology, Bristol-
Myers Squibb. "Then, our scientists can apply this knowledge across our pipeline
of new compounds so we can bring the most innovative medicines forward."
Commenting on the partnership, Geoffrey Duyk, M.D., Ph.D., chief scientific
officer, Exelixis, said, "This collaboration with Bristol-Myers Squibb leverages
our ability to use our target-based model genetic systems to rapidly identify
pharmaceutical targets. The Mechanism of Action (MOA) Program, the foundation
of which is based on employing our core expertise in genetics, was built upon
our successful work in agriculture. However, we soon realized that the
pharmaceutical industry could also benefit from an efficient, rapid approach to
determine the mechanism of action of compounds. We anticipate that this will be
the first in a series of collaborations focused on the research derived from our
MOA Program."
As part of the collaboration, Bristol-Myers Squibb and Exelixis will
exchange certain core technologies in genomics and lead optimization. Bristol-
Myers Squibb will acquire Exelixis technology including a sublicense to the
patented P-element technology, tools to manipulate genes in Drosophila and C.
elegans, and access to the company's Drosophila proprietary EST database,
FlyTag. Exelixis will acquire proprietary BMS lead optimization technology.
Exelixis will utilize this technology together with other assets to further
develop their own internal discovery efforts.
"The lead optimization technology obtained from BMS is a powerful
complement to the technology recently acquired from MetaXen. The acquisition of
this technology is an important step towards building a world-class drug
discovery capability at Exelixis. The technology exchange with
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
D-2.
<PAGE>
BMS is a very interesting aspect to our relationship that will have significant
benefits for both companies." stated George Scangos, Ph.D., president and chief
executive officer, Exelixis.
Exelixis Pharmaceuticals, Inc., together through its alliance with Artemis
Pharmaceuticals, represent the premiere model system genetics organization
focused on the identification and validation of novel screening targets and
proteins for the pharmaceutical, diagnostic, agricultural, and animal health
industries. Their PathFinder Technology utilizes a systematic genetics approach
in model organisms including Drosophila, C. elegans, zebrafish and mice to
identify critical genes in disease and physiological pathways, determine
functional relationships and select optimal targets for intervention. Exelixis
research programs include the areas of CNS, inflammation, metabolic disease,
oncology, and agricultural biotechnology.
Bristol-Myers Squibb is a diversified worldwide health and personal care
company whose principal businesses are pharmaceuticals, consumer medicines,
beauty care, nutritionals, and medical devices. It is a leading maker of
innovative therapies for cardiovascular, metabolic and infectious diseases,
central nervous system and dermatological disorders, and cancer. The company is
a leader in consumer medicines, orthopaedic devices, ostomy care, wound
management, nutritional supplements, infant formulas, and hair and skin care
products.
# # #
Visit Bristol-Myers Squibb on the World Wide Web at http://www.bms.com
------------------
Information about Exelixis including news releases is available on the
Company's website at http://www.exelixis.com
-----------------------
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
D-3.
<PAGE>
Exhibit E
BMS Disclosed Patents
[ * ].
[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
E-1.
