This Exhibit contains material that has been omitted and confidential treatment
has been requested therefor. All such omitted material has been filed separately
pursuant to Rule 406. The omitted material throughout this Exhibit is indicated
by an "*".
AGREEMENT
This Agreement is made as of the 31 day of August 1988 by and between XOMA
CORPORATION ("XOMA") a Delaware Corporation with its principal place of business
located at 0000 Xxxxxxx xxxxxx, Xxxxxxxx, Xxxxxxxxxx, 00000, XXX and SANOFI, a
French Corporation, with its principal place of business located 00, Xxxxxx
Xxxxxx X, 00000 - Xxxxx, Xxxxxx.
WITNESSETH:
WHEREAS, Sanofi is a pharmaceutical company which has great experience in the
immunology field and which is a pioneer in the immunotoxins field, and is the
owner of various patents for Immunotoxins, and
WHEREAS, Xoma is a corporation which has performed innovative work in that field
and has already developed, among other things, H65 RTA a product currently used
in vivo bone marrow treatment, and
WHEREAS, Xoma is desirous of obtaining a license under Sanofi's patents referred
to above, and
WHEREAS, Sanofi has accepted to license said patents to Xoma under the terms and
conditions contained herein, and
WHEREAS, the purpose of this Agreement is to define Xoma's and Sanofi's rights
and obligations with respect to the granted rights.
NOW, THEREFORE, in consideration of the above stated premises and the promises
contained herein, it has been agreed as follows between Xoma and Sanofi.
-2-
ARTICLE 1 - DEFINITIONS
The following terms as used in this Agreement shall have the following meanings
unless otherwise indicated:
1. Party or Parties shall mean respectively either Xoma or Sanofi as the
context requires, or both Xoma and Sanofi.
2. Affiliate(s) shall mean either a corporation or other business entity
which, directly or indirectly, controls or is controlled by one of the
Parties, or a company in which majority of the capital is owned by one
of the Parties.
3. Immunotoxin shall mean any preparation containing an antibody or
fragment to which ricin A chain or any derivative is conjugated.
4. Product shall mean any pharmaceutical preparation or formulation that
includes an Immunotoxin.
5. Selected Indications shall mean any preventive or curative therapeutic
human treatment in any field except ophthalmology.
6. Date of Commercialization shall mean the date after government general
marketing approval has been given in a Country when any Product is first
offered for sale by Xoma or one of its Affiliates in that Country.
7. Net Sales shall mean the invoiced sales to a non Affiliate Party after
the Date of Commercialization and after deducting:
(a) customary trade discounts; reasonable quantity and cash
discounts;
(b) freight, delivery and insurance if included in the price;
(c) value added, sales, use or turnover taxes, and exercise taxes or
customs duties included in the invoiced amount;
(d) rebates allowed to the purchaser of the Product pursuant to
government regulations under any national health insurance
program.
(e) returns
8. Territory shall mean the whole world
-3-
9. Patents shall mean all pending and issued patents filed by Sanofi or its
Affiliates as of the date hereof relating to Immunotoxins. Exhibits 1
and 2 sets forth, to the best of Sanofi's knowledge, a complete list
thereof. The term Patents shall include any extensions, amendments,
continuations, continuations in-part, foreign equivalents, divisional
and reissue applications and reissue patents thereof, having claims
directed to an Immunotoxin or directed to a method of making or using
it.
10. Patents rights shall mean all rights derived from a Patent.
ARTICLE 2 - SUBJECT MATTER OF THE AGREEMENT:
Sanofi hereby grants to Xoma for the term of this Agreement a semi-exclusive
license under the Patents to use, develop, manufacture, sell and otherwise to
commercialize Products in the Territory for the Selected Indications.
Semi-exclusive means that Sanofi retains its rights under the Patents to develop
its own Products in its discretion and using the means it will elect to apply to
that development, to market its own Products through its subsidiaries, but
Sanofi will not give a license to a third party under any of the Patents for the
Selected Indications in the Territory except in one case: Sanofi may market its
own Products through a third party but in that case Xoma will be granted a right
of first refusal to the commercialization of such Products with respect to any
third parties.
The license to Xoma includes the right to sublicense to both affiliates and non
affiliates in whole or in part any of the rights licensed to it under this
Agreement provided that any sublicense granted by Xoma shall substantially
conform to the provisions of this Agreement. Xoma shall inform Sanofi before
negotiating any sublicense with a non affiliate for the sole purpose of
providing Sanofi with this information. Xoma shall also promptly inform Sanofi
when Xoma concludes an agreement with another.
ARTICLE 3 - TERM:
This Agreement shall enter into effect as of the date of its execution. For each
Product, in each country of commercialization, Xoma retains a royalty free right
to commercialize the Product after the end of the period of commercialization
which is subject to royalties according to article 4 of this Agreement.
-4-
ARTICLE 4 - ROYALTIES:
a) So long as an issued Patent is in force in a country and covers a
Product, whenever Xoma manufactures or sells the Product for a Selected
Indication by itself or through an Affiliate to a non-affiliated third
party it shall pay Sanofi a [*] royalty of Xoma's Net Sales for that
country. If instead Xoma merely licenses a non-affiliated third party to
commercialize the Product for a Selected Indication in such country , it
shall pay Sanofi [*] of the net royalties it receives.
b) Royalties payable by Xoma shall be reduced by any amounts reasonably
paid (including license and legal fees) to third parties in connection
with any claim that Xoma's sale of Products covered by the Patents
infringes the rights of another in a manner within the scope of the
Patents.
c) If Sanofi licenses a third party to market Sanofi's own Products in a
country in the Territory and Xoma does not exercise its right of first
refusal and if the Sanofi Products are competitive with Xoma Products
then being marketed or then under research and development by Xoma, then
the royalty rate hereunder in those countries in which the Sanofi
Products are introduced shall be reduced [*].
d) Xoma agrees to pay Sanofi the total minimum annual royalties set forth
below, which royalties shall be a credit against the royalty obligations
incurred for any Products during the applicable year. The minimum
royalties shall begin in the first fiscal year which is at least 12
months after the Date of Commercialization of the first Product:
Year 1 25,000 $
Years 2-3 40,000 $
Years 4-7 50,000 $
ARTICLE 5 - PAYMENT OF ROYALTIES:
(i) Royalty payments made by Xoma to Sanofi shall be made at Sanofi's office
referred to above or such other place as Sanofi may designate in writing, within
ninety (90) days after the close of each sixmonth period.
Payment will continue on a semi-annual basis.
Each payment shall be accompanied by a true and complete statement of Product
sold by country, during the relevant period, showing the manner the royalties
were computed. Xoma shall maintain a special accounting procedure incorporating
all entries required for the accurate assessment of trading transactions made by
itself, its subsidiaries and licensees. This special account shall be made
available to Sanofi annually and in confidence until four years from the year of
compilation.
-6-
(ii) All royalties made in countries other than the United States shall accrue
in the currency of the country in which the sales are made. Xoma shall convert
payments hereunder into U.S. dollars as long as permissible under local law, at
the exchange rate used by Xoma, in accordance with generally accepted accounting
principles for purposes of its certified financial statements.
Xoma will use its best efforts to secure U.S. dollar transfers in respect of
such royalty payments. In the event U.S. dollars are for any reason legally not
available for transfer, Xoma may discharge its royalty payment obligations by
depositing said royalty payments to the credit of Sanofi, or its nominee, in any
recognized banking institution to be designated by Sanofi in the country in
which the sales are made and in the currency of that country.
ARTICLE 6 - COMMERCIALIZATION - MAINTENANCE OF PATENTS:
a) Xoma will use its commercially reasonable best efforts to develop and
to commercialize as promptly and as efficiently as possible after the
necessary governmental approvals have been obtained.
b) Sanofi agrees to maintain the Patents in each country in which they are
filed and to pursue diligently the issuance of any Patents filed but
not yet issued. Sanofi will consult with Xoma on Patents not yet
issued, or the extension, reissuance or amendment of the Patents and
will give Xoma the opportunity, at its expense to advise in the scope
and pursuit thereof.
c) If either party learns of an infringement of, or other challenge to, the
Patents by a third party, they shall consult on the proper course of
action. If Sanofi elects not to defend, Xoma may do so and off-set
royalties owed by any reasonable costs incurred. Benefits from any
defense conducted by Xoma shall be split equally after costs are
reimbursed. If Sanofi and Xoma agree to settle the matter or if for any
other reason Sanofi is properly compelled to license others under the
Patents, Xoma's royalty shall be reduced to 1% below the rate paid by
the third party on competitive Products. If the infringement is not
pursued by Sanofi or Xoma, Xoma's royalty on competitive Products in
Japan, the United States and any European country shall be terminated
when sales of the infringing entity equal 20% of Xoma's or its licensees
sales in such country and shall be reduced by half in any other country
in which that situation arises.
ARTICLE 7 - CONFIDENTIALITY:
Subject as herein provided, it is expressly agreed that any confidential
information, where applicable, received by either party under this Agreement is
submitted for use only in strict confidence and that during the term of this
Agreement and for a period of 5 years thereafter, the receiving party shall not
disclose any such confidential information to any third party without the
other's prior written consent; disclosure shall be exempt from this article to
extent that either party is able to prove that:
(a) at the time of the communication the receiving Party previously had the
information as evidenced by written documents;
-7-
(b) the information is publicly divulged through no fault of the receiving
party;
(c) the information is supplied to receiving party by a third party who is
under no obligation to the disclosing party to maintain such information
in confidence; or
(d) the information is developed by or for the receiving party independently
of the disclosure made under this Agreement.
All such information shall be disclosed in writing and designated confidential
or, if disclosed orally, shall be confirmed in writing and designated
confidential within thirty (30) days of disclosure.
Each party shall make all necessary arrangements to cause its Affiliates and
their employees to comply with this obligation of secrecy.
ARTICLE 8 - RIGHT OF FIRST REFUSAL:
The right of first refusal given to Xoma for the commercialization of Sanofi's
Product will be exercized by Xoma on the following conditions:
Upon approval to commence Phase III efficacy human clinical trials or after
receipt of approval for general commercialization, Sanofi shall inform Xoma by
registered mail of Sanofi's intention to license a third party to market one of
Sanofi's own Products, in some portion of the Territory, the terms of the
proposed license and the identity of the licensee. Within 60 days of receipt of
this letter, Xoma shall respond whether it agrees to act as Sanofi's licensee
for that Product on terms which in material respects are equivalent to the
financial terms described by Sanofi. In its response, Xoma must set forth its
reasonable basis for believing it can effectively serve as Sanofi's licensee for
this Product. Sanofi and Xoma wish to cooperate in this regard and agree to use
their good faith, commercially reasonable best efforts to establish Xoma as the
licensee. If Sanofi nonetheless concludes in good faith that Xoma cannot
effectively perform the licensee responsibility or if Xoma does not exercise its
first refusal right, Sanofi may elect to conclude within 180 days of Xoma's
response an agreement with the original party on the specified terms. Sanofi
cannot materially change any of these terms in a manner adverse to it without
first so notifying Xoma and giving it the opportunity, for 30 days after receipt
of such information, to reconsider its decision. If Sanofi does not conclude its
agreement within such 180 days period (or 90 days after any Xoma opportunity for
reconsideration) Xoma's right of first refusal shall be reviewed on the same
terms as provided above.
If Xoma exercises its right of first refusal and becomes licensee of that Sanofi
Product, Sanofi agrees it will not market, directly or through another in that
part of the Territory a Product which addresses the same disease unless such
other Product demonstrates substantially improved performance from the Product
then marketed by Xoma.
-8-
Notwithstanding the foregoing, the Parties may mutually agree that it is
desirable for Sanofi to discuss possible licensing arrangements with Xoma prior
to entering discussions with others. The Parties will review this when the case
arises.
ARTICLE 9:
This Agreement does not preclude Xoma and Sanofi to conclude case by case
specified agreements related to, for example, research services or production of
Sanofi's own Products.
ARTICLE 10:
If, in the future, Sanofi for the commercialization of one of its Products needs
to have the license of one or several of Xoma's patents, Xoma will use its best
efforts to negotiate with Sanofi at that time in good faith.
ARTICLE 11:
Upon execution of the present Agreement, the legal proceedings between Sanofi
and Xoma will be terminated without prejudice.
ARTICLE 12 - TERMINATION:
12.1 In addition to pursuing all other remedies, either Party may terminate
this Agreement on notice to the other Party if the other Party
materially breaches any material obligation or representation under this
Agreement and does not cure such breach and provide notice thereof to
the other Party (i) within ninety days after written notice to the
breaching Party setting forth, in reasonable detail, the nature of the
alleged breach or (ii) if the alleged breach is contested in good faith,
within 30 days of the resolution of such dispute in accordance with this
Agreement.
12.2 This Agreement shall be terminated by operation of law in the event of
suspension of activities because of the bankruptcy of Sanofi and/or
Xoma.
12.3 Upon termination of this Agreement, its Articles 4 and 5 with respect to
prior sales and 7 shall survive.
ARTICLE 13 - MISCELLANEOUS:
13.1 No agency
The status of the Parties under this Agreement shall be that of
independent contractors and neither Party shall be deemed or construed
to be an employee, agent, partner or legal representative of the other
Party for any purpose whatsoever. Neither Party shall have the right or
authority to assume or otherwise create any obligation or
responsibility, express or implied, on behalf or in the name of the
other Party or to bind the other Party in any manner or thing
whatsoever.
-9-
13.2 Entire Agreement
This Agreement embodies the entire understanding of the Parties as it
relates to the subject matter hereof, and this Agreement supersedes any
prior agreements or understandings between the Parties with respect to
such subject matter. No amendment or modification of this Agreement
shall be valid and binding upon the Parties unless in writing and signed
on behalf of each Party by its duly authorized officers.
13.3 Waiver
Should either Party fail to enforce any provision of this Agreement, or
fail to exercise, or waive, any right in respect thereto, such failure
or waiver shall not be construed as constituting a waiver or continuing
waiver of its rights to enforce such provision or right or any other
provision or right.
13.4 Assignment
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective heirs, successors and assigns;
provided, however, that except as provided herein neither Party shall
assign any of its rights or privileges hereunder without the prior
written consent of the other Party, except to an Affiliate or to a
successor in interest (or its equivalent) or in case of acquisition or
merger of Xoma.
13.5 Notices
Any notice, payment or report required or permitted under this Agreement
shall be delivered by hand or by registered or certified mail to the
following addresses:
(a) if to Xoma:
Xoma Corporation
att. Xxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
0000 Xxxxxxx Xxxxxx
Xxxxxxxx - XX 00000 - X.X.X.
(b) if to Sanofi:
Sanofi
Att. Xxxxxx xx Xxxx
Vice-President and General Counsel
00, Xxxxxx Xxxxxx X
00000 - Xxxxx - XXXXXX
-10-
or to such other person or address as shall hereafter furnished by written
notice to the other Party.
13.6 Force majeure
Each party shall be excused for failures and delays in performance
caused by war, governmental proclamations, ordinances or regulations,
or strikes, lockouts, floods, fires, explosions or other catastrophes
beyond the reasonable control and without the fault of such Party. This
provision shall not, however, release such Party from using its
reasonable best efforts to avoid or remove all such causes, and such
Party shall continue performance hereunder with the utmost dispatch
whenever such causes are removed. Any Party claiming such excuse for
failure or delay in performance shall give prompt notice thereof to the
other Party, and neither Party shall be required to perform hereunder
during the period of such excused failure or delay in performance
except as otherwise provided herein.
13.7 Invalidity
If any provision of this Agreement, or the application thereof to any
situation or circumstance, shall be invalid or unenforceable, the
remainder of this Agreement or the application of such provision to
situations or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected; and each remaining provision
of this Agreement shall be valid and enforceable to the fullest extent
permitted by applicable laws. In the event of such partial invalidity,
the Parties shall seek in good faith to agree on replacing any such
legally invalid provisions by provisions which, in effect, will, from
an economic viewpoint, most nearly and fairly approach the effect of
the invalid provision.
13.8 Xoma indemnifies and holds harmless Sanofi and its agents, servants,
and employees from and against any and all claims, demands, suits, or
actions of any character presented or brought by third parties for
injuries or death to persons and damages to property caused by or
arising out of the testing, manufacture, sale or use by products by
Xoma covered by the Patents, including any defects in such subject
matter. This indemnity shall include, but not be limited to, court
costs, attorneys' fees, costs of investigations and cost of defense
associated with such demands, claims suits or actions. Sanofi shall
promptly notify Xoma of any such claim which comes to its attention.
-11-
ARTICLE 14 - APPLICABLE LAW - ARBITRATION
This Agreement and matters in connection with the performance hereof shall be
construed, interpreted, applied and governed in all respects in accordance with
the laws of New York. Any disputes arising in connection with this Agreement
shall be finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce in New York by one arbitrator mutually
agreeable to Xoma and Sanofi or by three arbitrators, one selected by each Party
and the third selected by these two. The prevailing party, as designated by the
arbitrator shall bear the other party's legal fees and costs of arbitration.
ARTICLE 15 - DISCLOSURE
The Parties agree to keep the terms hereof confidential. This Agreement will not
be filed with any governmental entity by any Party unless legally required and
then only after it has provided the other Party with a 10 days opportunity to
review the need for filing. Any filing will be made with requests for
confidentiality to the extent permitted by law.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
in three originals by their duly authorized representatives on the date first
written above.
XOMA CORPORATION SANOFI
/s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxxxx xx Xxxx
------------------------------ --------------------------
By: Xxxxxxx X. XXXXXXXX By: Xxxxxx xx XXXX
Attorney in fact Vice-President
For: Xxxxxx X. XXXXXXX and General Counsel
Chairman and
Chief Executive Officer
EXHIBIT 1 : LICENSED PATENTS
Ref. FILING NUMBER PUBLICATION NUMBER
30 167 C 78 27838 27557 C
+ 79 24655 44529 D
30 208 C 81 07596 95455 E
30 229 C 81 21836 54424 L
339 C 83 13604 85 082852
EXHIBIT - 2
EXTENSIONS OF THE LICENSED PATENTS INDICATED
IN
EXHIBIT - 1
REFERENCE: 30167C
ASSIGNEE(S): SANOFI
INVENTOR(S): VOISIN GA XXXXXX XX XXXX P
FILING APPLICATION GRANTING GRANTING
COUNTRY DATE NUMBER DATE NUMBER
CANADA 790926 336,385 850611 1188681
FRANCE 791003 79 24655 830801 79 00000
XXXXXX 780928 78 27838 830426 78 27838
GERMAN XXXXXXX XXXXXXXX 000000 29 39 165.9 0
ITALY 790928 26118 X/00 0
XXXXX 000000 54-125257 0
NETHERLANDS 790928 7907251 0
SPAIN 790928 484591 801216 484591
SWEDEN 790926 7907994-3 861211 0000000-0
XXXXXXXXXXX 790926 8644/79-7 850131 647411
UNITED KINGDOM 790928 7933670 840104 2 034 324
UNITED STATES 790927 79,441 820720 4,340,535
EUROPEAN PATENT DESIGNATED COUNTRY
PATENT COOPERATION TREATY (PCT) DESIGNATED COUNTRY
REFERENCE: 30208C
ASSIGNEE(S): SANOFI
INVENTOR(S): XXXXXX XX GROS P
FILING APPLICATION GRANTING GRANTING
COUNTRY DATE NUMBER DATE NUMBER
AFRICAN UNION 820413 57657 830331 0000
XXXXXXXXX 820412 289.058 830228 228.394
AUSTRALIA 820408 82510/82 870319 556,641
AUSTRIA 0 0
BELGIUM 0 0
CANADA 820407 400,606 851015 1195248
CZECHOSLOVAKIA 820409 2564-82 0
DENMARK 820414 82.1674 0
EGYPT 820414 205/82 0
EUROPEAN PATENT 820409 82400651.4 860129 0063988
FINLAND 820414 821304 0
XXXXXX 0 0
XXXXXX 000000 81 07596 851014 81 00000
XXXXXX XXXXXXXXXX
XXXXXXXX 820414 60694 831214 204849
GERMAN XXXXXXX XXXXXXXX 0 0
XXXXXX 000000 67862 820506 00000
XXXXXXX 820414 1135/82 850826 188314
INDONESIA 820415 8624 0
IRELAND 820406 815/82 0
ISRAEL 820406 65441 851231 00000
XXXXX 850522 67710/BE/85 0
JAPAN 820415 57-061857 0
XXXXXXXXXXXXX 0 0
XXXXXXXXXX 0 0
XXXXXXX 820401 19633 821231 00000
XXXXXXXXXXX 0 0
NEW ZEALAND 820414 200302 850909 200302
NORWAY 820413 82/1198 870114 154905
XXXXXX 000000 0
PHILIPPINES 820415 27142 870508 00000
XXXXXX 820415 P 235981 0
PORTUGAL 820413 74741 831109 74741
REP. OF CHINA (TAIWAN) 820426 7111360 830516 00000
XXXXX XXXXXX 820414 82/2528 830223 82/2528
XXXXX XXXXX 000000 1664/1982 0
SPAIN 820414 511433 821204 511433
XXXXXX 0 0
XXXXXXXXXXX 0 0
XXXXXXX 820413 14828 830130 14828
EUROPEAN PATENT DESIGNATED COUNTRY
PATENT COOPERATION TREATY (PCT) DESIGNATED COUNTRY
REFERENCE: 30208C
ASSIGNEE(S): SANOFI
INVENTOR(S): XXXXXX XX XXXX P
FILING APPLICATION GRANTING GRANTING
COUNTRY DATE NUMBER DATE NUMBER
UNITED KINGDOM 0 0
XXXXXX XXXXXX 000000 368,434 831108 4,414,148
USSR 820414 3427002/13 0
VENEZUELA 820414 660 0
YUGOSLAVIA 820414 P-830/82 0
EUROPEAN PATENT DESIGNATED COUNTRY
PATENT COOPERATION TREATY (PCT) DESIGNATED COUNTRY
REFERENCE: 30229C
ASSIGNEE(S): SANOFI
INVENTOR(S): CASELLAS P GROS P XXXXXX F
FILING APPLICATION GRANTING GRANTING
COUNTRY DATE NUMBER DATE NUMBER
AUSTRALIA 821110 90334/82 0
AUSTRIA 0 0
BELGIUM 0 0
CANADA 821103 414,789 860812 1209472
EUROPEAN PATENT 821115 82402078.8 0
XXXXXX 0 0
XXXXXX 000000 81 21836 851014 81 21836
GERMAN XXXXXXX XXXXXXXX 0 0
XXXXX 0 0
XXXXX 000000 57-202905 0
XXXXXXXXXXXXX 0 0
XXXXXXXXXX 0 0
XXXXXXXXXXX 0 0
NEW ZEALAND 821119 202563 860924 202563
SOUTH AFRICA 821103 82/8048 830831 82/8048
SWEDEN 0 0
XXXXXXXXXXX 0 0
XXXXXX XXXXXXX 0 0
XXXXXX XXXXXX 000000 438,037 870217 4,643,895
XXXXXX XXXXXX 000000 928,863 0
EUROPEAN PATENT DESIGNATED COUNTRY
PATENT COOPERATION TREATY (PCT) DESIGNATED COUNTRY
REFERENCE: 339O
ASSIGNEE(S): SANOFI
INVENTOR(S): XXXXXX F XXXX P
FILING APPLICATION GRANTING GRANTING
COUNTRY DATE NUMBER DATE NUMBER
BELGIUM 0 0
EUROPEAN PATENT 840821 84401694.9 880107 0140728
XXXXXX 0 0
XXXXXX 000000 83 13604 851125 83 13604
GERMAN XXXXXXX XXXXXXXX 0 0
XXXXX 0 00000/XX/00 0
XXXXX 840823 59-175800 0
XXXXXXXXXXXXX 0 0
XXXXXXXXXX 0 0
XXXXXXXXXXX 0 0
XXXXXX 0 0
SWITZERLAND 0 0
UNITED KINGDOM 0 0
XXXXXX XXXXXX 000000 641,582 0
XXXXXX XXXXXX 000000 144,126 0
EUROPEAN PATENT DESIGNATED COUNTRY
PATENT COOPERATION TREATY (PCT) DESIGNATED COUNTRY
