LICENSE AND COLLABORATION AGREEMENT
BETWEEN
SCHERING CORPORATION
AND
CORVAS INTERNATIONAL, INC.
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS................................................................. 1.
1.1 "ACCEPTANCE CRITERIA".............................................. 1.
1.2 "ADDITIONAL ACTIVITY COMPOUNDS".................................... 1.
1.3 "AFFILIATE"........................................................ 1.
1.4 "BACK-UP COMPOUNDS"................................................ 2.
1.5 "CANDIDATE COMPOUNDS............................................... 2.
1.6 "CEO".............................................................. 2.
1.7 "CORVAS INDEMNIFIED PARTY"......................................... 2.
1.8 "CORVAS INVENTIONS"................................................ 2.
1.9 "CORVAS KNOW-HOW".................................................. 2.
1.10 "CORVAS PATENT RIGHTS"............................................. 2.
1.11 "DESCRIPTION OF DISPUTE"........................................... 2.
1.12 "DISPUTE".......................................................... 2.
1.13 "EARNED ROYALTY"................................................... 2.
1.14 "EPO".............................................................. 3.
1.15 "FDA".............................................................. 3.
1.16 "FIELD"............................................................ 3.
1.17 "FTE".............................................................. 3.
1.18 "GLP".............................................................. 3.
1.19 "HCV ACTIVITY COMPOUNDS"........................................... 3.
1.20 "HRD".............................................................. 3.
1.21 "IND".............................................................. 3.
1.22 "INDEPENDENT INVENTIONS"........................................... 3.
1.23 "INITIAL LEAD CRITERIA"............................................ 3.
1.24 "JOINT INVENTIONS"................................................. 3.
1.25 "KNOW-HOW"......................................................... 3.
1.26 "LICENSED PRODUCT"................................................. 3.
1.27 "NDA".............................................................. 4.
1.28 "NET SALES"........................................................ 4.
1.29 "NON-COLLABORATION COMPOUNDS"...................................... 4.
1.30 "PRODUCT PLAN"..................................................... 4.
1.31 "PUBLICATION NOTICE"............................................... 4.
1.32 "REPRESENTATIVES".................................................. 4.
1.33 "RESEARCH COMMITTEE"............................................... 4.
1.34 "RESEARCH PROGRAM"................................................. 4.
1.35 "RESEARCH PROGRAM TERM"............................................ 4.
1.36 "SCHERING INDEMNIFIED PARTY"....................................... 4.
1.37 "SCHERING INDEPENDENT RESEARCH".................................... 4.
1.38 "SCHERING INVENTIONS".............................................. 5.
1.39 "SCHERING KNOW-HOW"................................................ 5.
i.
TABLE OF CONTENTS
(CONTINUED)
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1.40 "SCHERING PATENT RIGHTS"........................................... 5.
1.41 "SCHERING-PLOUGH AGREEMENT"........................................ 5.
1.42 "SCHERING TECHNOLOGY".............................................. 5.
1.43 "TERRITORY"........................................................ 5.
1.44 "TITLE 11"......................................................... 5.
1.45 "TRADEMARK"........................................................ 5.
1.46 "VALID CLAIM"...................................................... 5.
1.47 "WORLDWIDE NET SALES".............................................. 5.
ARTICLE 2
RESEARCH PROGRAM............................................................ 6.
2.1 Corvas Work........................................................ 6.
2.2 Schering Work...................................................... 6.
2.3 Research Program Funding........................................... 6.
2.4 Research Committee................................................. 6.
2.5 Candidate Compound Acceptance; Back-up Compounds................... 7.
2.6 Research Program Reports........................................... 8.
2.7 Research Program Term.............................................. 8.
2.8 Research Program Term Extension.................................... 8.
ARTICLE 3
LICENSE GRANTS; SUBLICENSES................................................. 8.
3.1 Exclusive License Grant............................................ 8.
3.2 Sublicenses........................................................ 9.
3.3 Non-exclusive License Grant........................................ 9.
3.4 Research License Grant.............................................10.
3.5 First Negotiation..................................................10.
3.6 No Corvas Obligation with Respect to Non-Collaboration HCV Activity
Compound...........................................................10.
3.7 Additional Activity Compound.......................................11.
ARTICLE 4
PAYMENTS.....................................................................11.
ii.
TABLE OF CONTENTS
(CONTINUED)
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4.1 License Fee........................................................11.
4.2 Initial Lead Identification Payment................................11.
4.3 First Candidate Compound Acceptance Payment........................12.
4.4 Milestone Payments.................................................12.
4.5 Royalty Payment Dates..............................................12.
4.6 Direct Affiliate Licenses..........................................13.
4.7 Place of Royalty Payment and Currency Conversions..................13.
4.8 Royalties on Resales...............................................13.
4.9 Duration of Royalty Payments.......................................14.
4.10 Maintenance of Royalty Records.....................................14.
4.11 Compulsory Royalties...............................................14.
ARTICLE 5
DILIGENCE...................................................................14.
5.1 Schering Reports...................................................14.
5.2 Schering Diligence.................................................15.
ARTICLE 6
OWNERSHIP OF INTELLECTUAL PROPERTY..........................................15.
6.1 Corvas Intellectual Property.......................................15.
6.2 Schering Intellectual Property.....................................16.
6.3 Joint Intellectual Property........................................16.
6.4 Independent Inventions.............................................16.
ARTICLE 7
CONFIDENTIALITY OBLIGATIONS.................................................16.
ARTICLE 8
INTELLECTUAL PROPERTY.......................................................17.
8.1 Trademarks.........................................................17.
8.2 Patents............................................................17.
8.3 Prosecution and Maintenance........................................18.
8.4 Patent Extensions..................................................18.
8.5 Third Party Infringements..........................................19.
iii.
TABLE OF CONTENTS
(CONTINUED)
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ARTICLE 9
TERM AND TERMINATION........................................................19.
9.1 Term...............................................................19.
9.2 Termination for Breach.............................................19.
9.3 Voluntary Schering Termination.....................................20.
9.4 Automatic Termination..............................................20.
9.5 Post Termination Royalties.........................................20.
9.6 Post Termination Product Sales.....................................20.
9.7 Insolvency and Bankruptcy..........................................21.
9.8 Rights Upon Termination............................................22.
ARTICLE 10
WARRANTIES AND COVENANTS....................................................23.
10.1 Authority..........................................................23.
10.2 No Conflicting Undertakings........................................23.
10.3 No Conflicting Future Actions......................................23.
10.4 No Guarantee of Research Program Success...........................23.
10.5 Corvas Ownership of Patents........................................23.
10.6 Compliance with Agreement and Laws.................................23.
10.7 No Government Rights to Licensed Property..........................24.
10.8 No Third Party Rights to Compounds.................................24.
10.9 Negative Covenants. ...............................................24.
ARTICLE 11
INDEMNITY...................................................................24.
11.1 Schering Indemnity.................................................24.
11.2 Corvas Indemnity...................................................24.
11.3 Indemnity Obligations..............................................25.
11.4 Liability Insurance................................................25.
ARTICLE 12
MISCELLANEOUS...............................................................25.
12.1 Waiver.............................................................25.
12.2 Notices............................................................25.
12.3 Applicable Law.....................................................26.
iv.
TABLE OF CONTENTS
(CONTINUED)
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12.4 Dispute Resolution................................................26.
12.5 Captions..........................................................27.
12.6 Entire Agreement and Amendment....................................27.
12.7 Assignment........................................................27.
12.8 Survival of Terms.................................................27.
12.9 No Agency.........................................................27.
12.10 Severability......................................................27.
12.11 Express and Implied Licenses......................................28.
12.12 Force Majeure.....................................................28.
12.13 Publicity.........................................................28.
12.14 Counterparts......................................................28.
12.15 Cooperation.......................................................28.
12.16 Publication.......................................................28.
EXHIBITS:
A - Research Program
B - Initial Lead Criteria
C - Acceptance Criteria
D - Licensed Products
E - Corvas Schedule of Exceptions
F - Arbitration
G - Press Release
H - HCV Activity Criteria
I - Back-up Compound Criteria
J - Additional Activity Criteria
v.
INDEX OF OCCURRENCE OF DEFINED TERMS
TERM PAGE NO.
Acceptance Criteria 1., 7., 8., 20.
Additional Activity Compounds 1., 11.
Affiliate 1., 4., 13., 24., 27.
Back-up Compounds 2., 8., 16.
Candidate Compounds 2., 7., 16., 20., 22., 24.
CEO 2., 26.
Corvas Indemnified Party 2., 24.
Corvas Inventions 2., 16.
Corvas Know-How 2., 9., 16.
Corvas Patent Rights 2., 5., 9., 17., 18., 19., 23.
Description of Dispute 2., 26.
Dispute 2., 26.
Earned Royalty 2., 13., 14.
EPO 3., 18.
FDA 3., 12., 28.
Field 3., 16.
FTE 3., 6.
GLP 3., 11.
HCV Activity Compounds 3., 9.
HRD 3., 15.
IND 3., 12.
Independent Inventions 3., 16.
Initial Lead Criteria 3., 7., 11., 12., X-0, X-0
Joint Inventions 2., 3., 5., 16., 18.
Know-How 3., 5., 16.
Licensed Product 2., 3., 4., 5., 7., 12., 13., 14., 15.,
16., 17., 18.,20., 21., 22., 24.,...
NDA 4., 12., 14., 15.
Net Sales 4., 12., 13., 14., 19., 20.
Non-Collaboration Compounds 4.
Product Plan 4., 14.
Publication Notice 4., 28., 29.
Representatives 4., 26.
Research Committee 4., 6., 7., 11., 20.
Research Program 2., 3., 4., 5., 6., 7., 8., 16., 23.
Research Program Term 2., 4., 5., 6., 7., 8., 20.
Schering Indemnified Party 4., 25.
Schering Independent Research 4., 16.
Schering Inventions 5., 16.
vi.
Schering Know-How 5.
Schering Patent Rights 5.
Schering-Plough Agreement 5.
Schering Technology 5., 20., 22.
Territory 2., 4., 5., 9., 14., 20., 22., 23., 24.
Title 11 5., 21.
Trademark 5., 17.
Valid Claim 5., 9., 14.
Worldwide Net Sales 2., 5.
vii.
LICENSE AND COLLABORATION AGREEMENT
THIS LICENSE AND COLLABORATION AGREEMENT ("AGREEMENT"), effective as of the
11th day of June, 1997 (the "EFFECTIVE DATE"), is made by and between CORVAS
INTERNATIONAL, INC., a corporation of the State of Delaware ("CORVAS"), and
SCHERING CORPORATION, a corporation of the State of New Jersey ("SCHERING").
W I T N E S S E T H:
WHEREAS, Corvas owns certain technology relating to design and development
of transition state-based chemical entities that may be inhibitors of proteases
of the Hepatitis C virus;
WHEREAS, Schering has experience and a unique commercial position in the
field of treatment of Hepatitis C;
WHEREAS, Schering desires an exclusive license to chemical entities that
are transition state-based inhibitors of proteases of the Hepatitis C virus that
are suitable for treatment of Hepatitis C and Corvas desires to grant such an
exclusive license, pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions hereinafter set forth, the parties agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms have the following meanings,
and the singular shall include the plural and vice versa as the context
requires:
1.1 "ACCEPTANCE CRITERIA" shall mean those standards described on Exhibit
C hereto, as such Exhibit may be amended from time to time by mutual written
agreement of the parties.
1.2 "ADDITIONAL ACTIVITY COMPOUNDS" means HCV Activity Compounds meeting
the "Additional Activity Criteria" set forth in Exhibit J.
1.3 "AFFILIATE" means any company or organization controlling, controlled
by, or under common control with Schering or Corvas, as the case may be. For
this purpose, the terms control, controlled and controlling mean the possession
of the power to direct or cause the direction of the management and the policies
of an entity, whether through ownership directly or indirectly of over fifty
percent (50%) of the stock entitled to vote, and for non-stock
1.
organizations, the right to receive over fifty percent (50%) of the profits by
contract or otherwise.
1.4 "BACK-UP COMPOUNDS" means Candidate Compounds meeting the criteria set
forth in Exhibit I.
1.5 "CANDIDATE COMPOUNDS" means chemical entities designed or identified
by Corvas as of the Effective Date or pursuant to the Research Program that are
inhibitors of at least [ *** ] of the Hepatitis C virus.
1.6 "CEO" shall have the meaning assigned to it in Paragraph 12.4.
1.7 "CORVAS INDEMNIFIED PARTY" shall have the meaning assigned to it in
Paragraph 11.1.
1.8 "CORVAS INVENTIONS" shall have the meaning assigned to it in Paragraph
6.1.
1.9 "CORVAS KNOW-HOW" means any Know-How which is necessary for making,
using or selling any Licensed Product and which is owned or controlled by Corvas
or a Corvas Affiliate, as of the Effective Date or during the Research Program
Term, and which Corvas or such Affiliate has a right to disclose and license to
Schering, including Corvas' rights in Joint Inventions to the extent not
included in Corvas Patent Rights. Expressly excluded from Corvas Know-How is
Know-How directly related to (i) technology generally useful to impart oral
activity to a molecule or (ii) technology generally useful for the design,
preparation or screening of transition state chemical libraries.
1.10 "CORVAS PATENT RIGHTS" means Corvas' rights in all patents (including
inventors' certificates, reissues, reexaminations, extensions or other
governmental actions which extend any of the subject matter of a patent, and any
substitutions, confirmations, registrations or additions of or to any of the
foregoing) issuing from any application (including any provisionals,
divisionals, continuations and continuations-in-part) filed to protect Corvas
Inventions or Corvas' interest in Joint Inventions, or otherwise filed to
protect either (i) a transition state-based inhibitor of the [ *** ] of the
Hepatitis C virus existing within Corvas Know-How as of the Effective Date or
(ii) an inhibitor of the Hepatitis C viral proteases within Corvas Know-How
arising from the Research Program. Expressly excluded from Corvas Patent Rights
are Corvas' rights in any patent, directly related to (i) technology generally
useful to impart oral activity to a molecule or (ii) technology generally useful
for the design, preparation or screening of transition state chemical libraries.
1.11 "DESCRIPTION OF DISPUTE" shall have the meaning assigned to it in
Paragraph 12.4.
1.12 "DISPUTE" shall have the meaning assigned to it in Paragraph 12.4.
1.13 "EARNED ROYALTY" means [ *** ] of annual Net Sales of each Licensed
Product in the Territory during any calendar year based upon Worldwide Net Sales
of each
* CONFIDENTIAL TREATMENT REQUESTED
2.
Licensed Product during each such calendar year of up to [ *** ] and [ *** ] of
each such Net Sales based upon Worldwide Net Sales in excess of [ *** ] during
any calendar year.
1.14 "EPO" shall have the meaning assigned to it in Paragraph 8.3.
1.15 "FDA" means the United States Food and Drug Administration or any
corresponding foreign drug registration governmental authority.
1.16 "FIELD" means the treatment or prevention of Hepatitis C infections in
humans and/or animals.
1.17 "FTE" means a full-time equivalent of one scientific or technical
person performing work as part of the Research Program.
1.18 "GLP" means the standard for good laboratory practices as promulgated
by the FDA in effect at a particular time.
1.19 "HCV ACTIVITY COMPOUNDS" means Candidate Compounds (other than
Licensed Products or Back-Up Compounds) or Non-Collaboration Compounds meeting
the "HCV Activity Criteria" set forth in Exhibit H.
1.20 "HRD" means a health registration dossier or its equivalent filed in
any country outside the United States and which is analogous to an NDA
including, where applicable, applications for pricing, pricing reimbursement
approval, labeling and regulatory approval.
1.21 "IND" means an Investigational New Drug Application or its equivalent
for initiating clinical trials in the United States or any corresponding foreign
application, registration or certification.
1.22 "INDEPENDENT INVENTIONS" shall have the meaning assigned to it in
Paragraph 6.4.
1.23 "INITIAL LEAD CRITERIA" means the criteria set forth in Exhibit B.
1.24 "JOINT INVENTIONS" shall have the meaning assigned to it in Paragraph
6.3.
1.25 "KNOW-HOW" means all ideas, inventions, data, results, instructions,
processes, formulas, expert opinion and information, including, without
limitation, biological, chemical, pharmacological, toxicological,
pharmaceutical, physical and analytical, clinical, safety, manufacturing and
quality control data and information.
1.26 "LICENSED PRODUCT" means anything containing or derived from a
Candidate Compound accepted by Schering for development pursuant to Paragraph
2.5.
* CONFIDENTIAL TREATMENT REQUESTED
3.
1.27 "NDA" means a New Drug Application, Product License Application or its
equivalent in the United States.
1.28 "NET SALES" means the gross amounts received from sales in the
Territory of Licensed Products by Schering, its Affiliates and sublicensees to
third party customers after deduction of (i) normal and customary trade, cash
and quantity discounts, allowances and credits actually allowed; (ii) credits or
allowances actually granted for damaged goods, returns or rejections of Licensed
Product and retroactive price reductions; (iii) sales or similar taxes
(including duties or other governmental charges levied on, absorbed or otherwise
imposed on the sale of Licensed Product including, without limitation, value
added taxes or other governmental charges otherwise measured by the billing
amount), when included in billing; (iv) freight, postage, shipping, customs
(i.e. import or export) duties and insurance charges paid for and separately
identified on the invoice or other documentation maintained in the ordinary
course of business; (v) charge back payments and rebates granted to managed
health care organizations or to federal, state and local governments, their
agencies, and purchasers and reimbursers or to trade customers, including but
not limited to, wholesalers and chain and pharmacy buying groups. A "sale" of a
Licensed Product is deemed to occur upon the earliest of invoicing, shipment or
transfer of title in the Licensed Product to a person or entity other than
Schering or its Affiliate or sublicensee.
1.29 "NON-COLLABORATION COMPOUNDS" means chemical entities (i) designed or
identified by Corvas after the Effective Date and outside of the Research
Program but (ii) covered by a Valid Claim that also covers a composition of
matter of a Licensed Product or a Back-up Compound.
1.30 "PRODUCT PLAN" shall have the meaning assigned to it in Paragraph 5.1.
1.31 "PUBLICATION NOTICE" shall have the meaning assigned to it in
Paragraph 12.16.
1.32 "REPRESENTATIVES" shall have the meaning assigned to it in
Paragraph 12.4.
1.33 "RESEARCH COMMITTEE" shall have the meaning assigned to it in
Paragraph 2.4(a).
1.34 "RESEARCH PROGRAM" means the program of research conducted pursuant to
Article 2.
1.35 "RESEARCH PROGRAM TERM" shall have the meaning assigned to it in
Paragraph 2.7.
1.36 "SCHERING INDEMNIFIED PARTY" shall have the meaning assigned to it in
Paragraph 11.2.
1.37 "SCHERING INDEPENDENT RESEARCH" shall have the meaning assigned to it
in Paragraph 6.4.
4.
1.38 "SCHERING INVENTIONS" shall have the meaning assigned to it in
Paragraph 6.2.
1.39 "SCHERING KNOW-HOW" means any Know-How which is necessary for making,
using or selling any Candidate Compound, Licensed Product or Back-up Compound
and which is owned or controlled by Schering or a Schering Affiliate, as of the
Effective Date or during the Research Program Term, and which Schering has a
right to disclose and license to Corvas.
1.40 "SCHERING PATENT RIGHTS" means Schering's rights in all patents
(including inventors' certificates, reissues, reexaminations, extensions or
other governmental actions which extend any of the subject matter of a patent,
and any substitutions, confirmations, registrations or additions of or to any of
the foregoing) issuing from any application (including any provisionals,
divisionals, continuations and continuations-in-part) filed to protect Schering
Inventions or Schering's interest in Joint Inventions.
1.41 "SCHERING-PLOUGH AGREEMENT" means the License and Collaboration
Agreement between Schering-Plough Ltd. and Corvas International, Inc. dated June
11, 1997.
1.42 "SCHERING TECHNOLOGY" means all Schering Inventions (to the extent not
included within Schering Patent Rights), Schering Patent Rights, Schering
Know-How and other intellectual property acquired by Schering whether by an
assignment or a license (with the right to sublicense) in connection with the
Research Program, or in connection with the discovery, evaluation, development
or testing of any Licensed Product.
1.43 "TERRITORY" means the United States, its territories, commonwealths
and possessions.
1.44 "TITLE 11" shall mean Title 11 of the United States Code, as amended
from time to time.
1.45 "TRADEMARK" means any trademark selected and registered by Schering,
its Affiliates or sublicensees worldwide for the marketing of a Licensed
Product.
1.46 "VALID CLAIM" means any claim contained in any issued patent included
within the Corvas Patent Rights or Schering Patent Rights which has not been
abandoned or declared invalid in a non-appealable order, as the case may be, and
which would be infringed by the manufacture, use, sale, offer for sale or import
of a Licensed Product in the absence of the license granted in this Agreement.
1.47 "WORLDWIDE NET SALES" means the sum of (i) Net Sales as defined in
this Agreement and (ii) Net Sales as defined in the Schering-Plough Agreement.
5.
ARTICLE 2
RESEARCH PROGRAM
2.1 CORVAS WORK. During the Research Program Term, Corvas shall use
commercially reasonable efforts to conduct the activities assigned to it under
the Research Program as described in Exhibit A. From time to time during the
Research Program Term Schering shall provide Corvas materials and information as
described in, and to the extent necessary for Corvas to perform its obligations
under, the Research Program as described in Exhibit A.
2.2 SCHERING WORK. During the Research Program Term, Schering shall use
commercially reasonable efforts to conduct the activities assigned to it under
the Research Program as described in Exhibit A.
2.3 RESEARCH PROGRAM FUNDING. Schering shall fund the first year of the
Research Program by paying to Corvas [ *** ] to support [ *** ] FTEs for
[ *** ], due within ten (10) days of the execution of this Agreement. In the
event that Schering extends the Research Program pursuant to Paragraph 2.8
below, Schering shall continue to support the Research Program at Corvas by
paying to Corvas research funding for each additional [ *** ] extension year at
the rate of [ *** ] per FTE for a minimum of [ *** ] and a maximum of [ *** ]
FTEs per year, with the actual number of FTEs in each extension year to be
determined by the Research Committee, to be paid on or within ten (10) days of
the commencement of each extension of the Research Program Term.
2.4 RESEARCH COMMITTEE.
(a) MEMBERS. Promptly after the Effective Date of this Agreement,
the parties will establish a research committee ("RESEARCH COMMITTEE")
consisting of six (6) members, three (3) from and selected by each of the
parties hereto, with [ *** ] Ph.D., to serve as the initial chairman. The
initial Corvas members shall be [ *** ] The initial Schering members shall be
[ *** ] From time to time each party may make substitutions for one or more of
its representatives, in its sole discretion, effective upon notice to the other
party of such change.
(b) MEETINGS. The Research Committee will hold its initial meeting
at Corvas' facilities within thirty (30) days following the Effective Date and
will meet thereafter regularly at the call of the Chairman at least quarterly
while the Research Program is being undertaken. The location of such meetings
shall alternate between Corvas' and Schering's United States facilities.
Alternatively, the Research Committee may meet by means of conference call,
video conference or other similar communications equipment. The Research
Committee shall appoint a secretary from among its members for each meeting.
The Chairman for each meeting shall be responsible for preparing and issuing
minutes of each meeting within fifteen (15) days
* CONFIDENTIAL TREATMENT REQUESTED
6.
thereafter. Meeting minutes will be approved and countersigned by a Research
Committee representative from each of Schering and Corvas before they are
issued. Additional non-voting representatives or consultants may from time to
time be invited by Schering or Corvas to attend and participate in Research
Committee meetings (e.g., to evaluate and advise on business or scientific
issues). All decisions of the Research Committee shall be based upon unanimous
vote of at least a quorum of the members, with each of Schering and Corvas
having one (1) vote. Two (2) representatives of each party shall constitute a
quorum of the Research Committee. Each party shall bear its own meeting and
travel expenses, and each party may designate successor Research Committee
members on notice to the other party.
(c) RESPONSIBILITIES. The purpose of the Research Committee shall be
to act as an advisory committee with respect to all scientific, technical,
regulatory and other matters falling within the scope of the Research Program.
The Research Committee also shall be responsible for identification of the first
Candidate Compound meeting the Initial Lead Criteria pursuant to Paragraph 4.2
and for submitting each Candidate Compound to Schering for acceptance for
development as a Licensed Product pursuant to Paragraph 2.5. The Research
Committee will review the progress of activities performed under the Research
Program to date, evaluate the work performed in relation to the objectives of
the Research Program, exchange such other information as may be required by the
Research Program or as reasonably requested by Schering and/or Corvas relating
to the Research Program objectives or performance of the Research Program. The
Research Committee will also discuss and approve any proposed amendments to the
Research Program and Exhibit A. Schering and Corvas shall each appoint a person
("PROJECT LEADER") from among its representatives on the Research Committee to
coordinate its performance of the Research Program. The Project Leaders shall
be the primary contact between the parties with respect to the Research Program.
Each party shall notify the other within thirty (30) days of the date of this
Agreement of the appointment of its Project Leader and shall notify the other
party as soon as practicable upon changing this appointment.
2.5 CANDIDATE COMPOUND ACCEPTANCE; BACK-UP COMPOUNDS.
(a) CANDIDATE COMPOUNDS. During the Research Program Term, all
information concerning Candidate Compounds shall be submitted, from time to
time, to the Research Committee. The Research Committee shall (i) determine
which Candidate Compounds meet the Acceptance Criteria; (ii) notify Schering and
Corvas thereof; and (iii) submit such supporting data to Schering as is
reasonably necessary to permit independent confirmation by Schering that the
Acceptance Criteria have been met. Schering shall review such supporting data
for each such Candidate Compound and notify Corvas whether it shall accept such
Candidate Compound for development within ninety (90) days of the Research
Committee's notice. Schering shall also have the right to accept a Candidate
Compound for development even if such Candidate Compound does not meet the
Acceptance Criteria and even if it is not submitted to Schering by the Research
Committee. Each accepted Candidate Compound shall thereupon become a Licensed
Product. Each Licensed Product shall be listed in Exhibit D hereto. In the
event that on the ninetieth (90th) day following the expiration or termination
of the Research Program Term, Schering has not accepted for development at least
[ *** ] Candidate [ *** ] this Agreement shall terminate pursuant to Paragraph
9.4. In the event a dispute
* CONFIDENTIAL TREATMENT REQUESTED
7.
shall arise as to whether or not a Candidate Compound meets the Acceptance
Criteria, such matter shall be resolved in accordance with the provisions of
Paragraph 12.4. The time periods specified in this Paragraph 2.5(a) shall be
suspended during the pendency of the proceedings contemplated by Paragraph 12.4.
(b) BACK-UP COMPOUNDS. At any time after acceptance of the first
Candidate Compound pursuant to Section 2.5(a) and prior to final approval of an
NDA or HRD for the first Licensed Product, Schering shall have the right to
designate any Back-up Compound as a Licensed Product and Schering shall notify
Corvas promptly thereof. Upon receipt by Corvas of such notice, such Back-up
Compound shall become a Licensed Product and Exhibit D hereto shall be modified
accordingly.
2.6 RESEARCH PROGRAM REPORTS. During the Research Program Term, Corvas
shall provide to Schering semi-annual written reports of its research and
development activities, Research Program progress and results, and any pertinent
information related to Hepatitis C that becomes available to it and that it has
a right to disclose, in a form mutually agreed on by both parties. During the
Research Program Term, Schering shall provide semi-annual written reports of its
research and development activities under the Research Program, including,
without limitation, progress and results of the Research Program. Corvas will
also permit Schering to establish an electronic computer link with Corvas, at
the option and at the expense of Schering, which will permit Schering to
electronically access scientific data generated and stored by Corvas and arising
out of the Research Programs, provided that Schering shall take such measures to
insure the security of such link as Corvas shall reasonably request including,
without limitation, restricting access thereto and regulating the information
communicated pursuant thereto for purposes of maintaining confidentiality.
2.7 RESEARCH PROGRAM TERM. The Research Program term shall commence on
the Effective Date of this Agreement and shall expire [ *** ] from such
Effective Date, unless extended by the parties in accordance with Paragraph 2.8
or earlier terminated in accordance with Paragraph 9.3 ("RESEARCH PROGRAM
TERM").
2.8 RESEARCH PROGRAM TERM EXTENSION. Schering may extend the Research
Program Term beyond the [ *** ] period for up to [ *** ] periods by giving
Corvas a sixty (60) days written notice of such extension prior to the
expiration of the Research Program Term and paying research and development
funding as set forth in Paragraph 2.3.
ARTICLE 3
LICENSE GRANTS; SUBLICENSES
3.1 EXCLUSIVE LICENSE GRANT.
(a) LICENSED PRODUCTS. Subject to the terms and conditions of this
Agreement, Corvas hereby grants to Schering an exclusive, even as to Corvas,
license under the
* CONFIDENTIAL TREATMENT REQUESTED
8.
Corvas Patent Rights and Corvas Know-How, with the right to grant sublicenses,
to make, use, sell, offer for sale, import and export Licensed Products for all
uses in the Territory.
(b) BACK-UP COMPOUNDS. Subject to the terms and conditions of this
Agreement, Corvas hereby grants to Schering an exclusive, even as to Corvas,
license under the Corvas Patent Rights and Corvas Know-How, with the right to
grant sublicenses, to make, use, offer for sale, import and export Back-up
Compounds for all uses in the Territory. The license granted in this
Section 3.1(b) shall expire when Back-up Compounds become Licensed Products in
accordance with Section 2.5(b).
(c) HCV ACTIVITY COMPOUNDS. Subject to the terms and conditions of
this Agreement, Corvas hereby grants to Schering an exclusive, even as to
Corvas, license under the Corvas Patent Rights to make, use, offer for sale,
import and export any HCV Activity Compounds solely within the Field in the
Territory. For the purposes of Paragraphs 4.4, 4.5, 4.7, 4.9, 4.10, 4.11, 5.1,
9.5, 9.6, 10.4 and Article 8, such HCV Activity Compounds shall be deemed
Licensed Products.
3.2 SUBLICENSES. The right of Schering to grant sublicenses under
Paragraph 3.1(a) of this Agreement is subject to the conditions that:
(i) each sublicense shall be consistent with all relevant and
applicable terms and conditions of this Agreement;
(ii) Schering shall remain responsible to Corvas for all of each
sublicensee's obligations under the sublicense;
(iii) each sublicense shall provide for its continuation following
early termination of Schering's license rights from Corvas and its assignment to
Corvas, or at Corvas' election, its termination; and
(iv) Schering shall provide Corvas a copy of each sublicense agreement
granting rights to the manufacturing, selling, promotion, marketing or
distribution of Licensed Products within thirty (30) days of its execution other
than sublicense agreements which are limited licenses incidental to development
and commercialization activities on behalf of Schering.
3.3 NON-EXCLUSIVE LICENSE GRANT. In the event that the development,
making, having made, importing, exporting, use, offering for sale or sale of
Licensed Products by Schering, its Affiliates or sublicensees would infringe
during the term of this Agreement a claim contained in any issued patent owned
or controlled by Corvas which has not been abandoned or declared invalid in a
non-appealable order, as the case may be, and which patent is not included
within the grants to Schering under Paragraph 3.1 hereof, to the extent it is
free to do so under other agreements that may be in place with third parties,
Corvas hereby grants to Schering a non-exclusive license under any such patents
to develop, make, have made, import, export, use, offer for sale and sell
Licensed Products for all uses in the Territory.
9.
3.4 RESEARCH LICENSE GRANT.
(a) XXXXXX XXXXX. Subject to the terms and conditions of this
Agreement, and to the extent it is free to do so under other agreements that may
be in place with third parties, Corvas hereby grants to Schering a non-exclusive
license under its patents, trademarks and other intellectual property only to
the extent necessary to carry out Schering's obligations and responsibilities
under the Research Program and to develop and commercialize a Licensed Product.
Such research license shall remain in full force and effect until, and shall
terminate upon, the expiration or termination of this Agreement.
(b) SCHERING GRANT. Subject to the terms and conditions of this
Agreement, and to the extent it is free to do so under other agreements that may
be in place with third parties, Schering hereby grants to Corvas a non-exclusive
license under its patents, trademarks and other intellectual property only to
the extent necessary to carry out Corvas' obligations and responsibilities under
the Research Program. Such research license shall remain in full force and
effect until, and shall terminate upon, the expiration or termination of the
Research Program Term.
3.5 FIRST NEGOTIATION.
(a) FIRST NEGOTIATION RIGHT. In the event Corvas decides to initiate
negotiations with any third party to license it compounds, other than Candidate
Compounds, developed by or on behalf of Corvas for inhibition of a viral
protease other than a Hepatitis C virus protease, Corvas shall notify Schering
in writing prior to initiating or soliciting such negotiations. For a period of
thirty (30) days following receipt of such notice from Corvas, during which
period Corvas shall not discuss such compounds with any third party, Schering
may notify Corvas of its desire to initiate good faith negotiations, on a
non-exclusive basis, with regard to such compounds. If Corvas and Schering
shall not have entered into a binding agreement within ninety (90) days of
Schering's notice, during which period Corvas shall have conducted such
negotiations in good faith, Corvas shall be free to enter into an agreement with
respect to such compounds with any third party and shall have no further
obligation or liability to Schering with respect thereto or obligation to offer
or disclose to Schering the terms offered to such third party.
(b) TERM OF FIRST NEGOTIATION RIGHT. The rights granted under this
Paragraph 3.5 shall remain in full force and effect for a period of five (5)
years from the Effective Date.
3.6 NO CORVAS OBLIGATION WITH RESPECT TO NON-COLLABORATION HCV ACTIVITY
COMPOUND. With respect to the license granted in Section 3.1(c), Corvas shall
have no obligation to synthesize or test any Non-Collaboration Compound which is
also an HCV Activity Compound and shall have no obligation to routinely perform,
or permit the performance of, assays or otherwise identify any such HCV Activity
Compound. Notwithstanding the foregoing, in the event Corvas identifies such
HCV Activity Compound, it shall promptly notify Schering of the structure and
activity of such compound.
10.
3.7 ADDITIONAL ACTIVITY COMPOUNDS.
(a) NON-COLLABORATION ADDITIONAL ACTIVITY COMPOUNDS IDENTIFIED BY
SCHERING. In the event that (i) Schering identifies a Non-Collaboration
Compound which is also an Additional Activity Compound, and (ii) such compound
does not meet the criteria set forth in Exhibit I, and (iii) Schering has not
already commenced clinical development in the Field of such compound, the rights
to such Additional Activity Compound granted to Schering under Section 3.1(c)
shall revert to Corvas.
(b) COLLABORATION ADDITIONAL ACTIVITY COMPOUNDS IDENTIFIED BY
SCHERING. In the event that Schering identifies a Candidate Compound which is
also an Additional Activity Compound, Schering shall retain rights to such
Additional Activity Compound granted to it under Section 3.1(c)
(c) RIGHT TO NEGOTIATE FOR ADDITIONAL ACTIVITY COMPOUNDS IDENTIFIED
BY SCHERING. Schering shall immediately notify Corvas of Schering's
identification of any Additional Activity Compound and for a period of one
hundred twenty (120) days following the receipt of such notice by Corvas,
Schering shall have the right to conduct good faith negotiations, on an
exclusive basis, with regard to such field or fields of use for such Additional
Activity Compound as the parties may agree. If Corvas and Schering shall not
have entered into such binding agreement within such 120-day period, Corvas
shall be free to enter into an agreement with respect to Additional Activity
Compound with any third party and shall have no further obligation or liability
to Schering with respect thereto.
(d) ADDITIONAL ACTIVITY COMPOUNDS DISCOVERED BY CORVAS OR ITS
PARTNERS. In the event that (i) Corvas or its partner identifies an Additional
Activity Compound (which specifically excludes Licensed Products and Back-up
Compounds) and (ii) Schering has not already commenced a six (6) month GLP
toxicology testing program of such compound in the Field, Corvas shall
immediately notify Schering of such identification and all rights to such
compound granted to Schering under Section 3.1(c) shall revert to Corvas.
ARTICLE 4
PAYMENTS
4.1 LICENSE FEE. Within ten (10) days of the Effective Date, Schering
shall pay a license fee of [ *** ] to Corvas by wire transfer of immediately
available funds to an account designated by Corvas.
4.2 INITIAL LEAD IDENTIFICATION PAYMENT. Upon recommendation by the
Research Committee that a Candidate Compound meets the Initial Lead Criteria,
the Research Committee shall, if Schering shall have not previously accepted a
Candidate Compound as meeting the Initial Lead Criteria as hereinafter in this
Paragraph 4.2 provided, provide notice thereof to Schering and Corvas and submit
to Schering such supporting data as is reasonably necessary to
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11.
permit independent confirmation that the Initial Lead Criteria set forth in
Schedule B have been met. Schering shall have forty-five (45) days to review
such supporting data and to determine whether it shall accept such Candidate
Compound as meeting the Initial Lead Criteria. [ *** ]
4.3 FIRST CANDIDATE COMPOUND ACCEPTANCE PAYMENT. [ *** ]
4.4 MILESTONE PAYMENTS. Milestone payments shall be payable with respect
to any Licensed Product on the first achievement of the milestones listed below
in this Paragraph 4.4. Such payments shall be payable one time only regardless
of how many Licensed Products are developed hereunder.
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MILESTONE AMOUNT
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1. [ *** ] [ *** ]
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2. [ *** ] [ *** ]
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3. [ *** ] [ *** ]
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4. [ *** ] [ *** ]
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5. [ *** ] [ *** ]
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* [ *** ] means the earlier of (i) [ *** ] (ii) [ *** ] or (iii) [ *** ]
** [ *** ] means the earlier of (i) [ *** ] (ii) [ *** ] or (iii) [ *** ]
Schering will advise Corvas of the accomplishment of each of the milestones
described in this Paragraph 4.4 within thirty (30) days thereof, and will at the
time of such notification remit any payments due.
4.5 ROYALTY PAYMENT DATES. On the last business day of June, September,
December and March in each and every calendar year during the term of this
Agreement, following the commencement of marketing of applicable Licensed
Products hereunder, Schering shall furnish and deliver to Corvas a full and true
accounting of its Worldwide Net Sales of Licensed Products hereunder during the
three (3) month period ending with the previous March 31st, June 30th,
September 30th and December 31st and shall simultaneously pay to Corvas, for
Schering's account or for the account of the applicable Schering Affiliate or
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12.
sublicensee, as the case may be, a sum equal to the aggregate of the Earned
Royalty due thereon. Accountings shall be made separately for each Licensed
Product. Schering's accounting of Earned Royalties shall identify Net Sales of
each Licensed Product by country, the price at which the Licensed Products were
sold, and the amount and nature of any deductions made by Schering when
calculating Net Sales. Any Earned Royalties that are not paid when due shall
bear interest from the due date to the date of payment at an annual rate equal
to the then prevailing prime interest rate in the United States as publicly
announced by Chase Manhattan Bank. It is understood and agreed that only one
Earned Royalty shall be due with respect to a Licensed Product regardless of the
number of Patent Rights which cover it.
4.6 DIRECT AFFILIATE LICENSES. Whenever Schering shall reasonably
demonstrate to Corvas that, in order to facilitate direct royalty payments by an
Affiliate, it is desirable that a separate license agreement be entered into
between Corvas and such Affiliate, Corvas will grant such licenses directly to
such Affiliate by means of an agreement which shall be consistent with all of
the provisions hereof, provided that Schering shall reimburse Corvas for its
reasonable attorneys' fees and costs incurred in connection with any such
separate license agreement, and Schering guarantees the Affiliate's obligations
thereunder or otherwise provides to Corvas assurances of performance
satisfactory to Corvas in its sole discretion.
4.7 PLACE OF ROYALTY PAYMENT AND CURRENCY CONVERSIONS. Earned Royalty
shall be deemed payable by the entity making the Net Sales from the country in
which earned in local currency and subject to foreign exchange regulations then
prevailing. Earned Royalty payments shall be made in United States dollars to
the extent that unrestricted conversion to United States dollars is permitted.
The rate of exchange to be used in any such conversion from the currency in the
country where such Net Sales are made shall be the commercial rate of exchange
prevailing in the United States on the last day of the calendar quarter for
which such payments are made as customarily quoted for use for currency
conversions between Schering and its Affiliates. If, due to restrictions or
prohibitions imposed by national or international authority, payments cannot be
made as aforesaid, the parties shall consult with a view to finding a prompt and
acceptable solution, and Schering will, from time to time, deal with such monies
as Corvas may lawfully direct at no additional out-of-pocket expense to
Schering. Notwithstanding the foregoing, if Earned Royalties in any country
cannot be remitted to Corvas for any reason within six (6) months after the end
of the calendar quarter during which they are earned, then Schering shall be
obligated to deposit the Earned Royalties in a bank account in such country in
the name of Corvas. Earned Royalty payable by Schering shall be net of any
foreign withholding taxes due and paid by Schering, it being understood that
such withholding taxes are the obligation of Corvas. Schering shall forward to
Corvas in a timely manner all tax receipts relating to such withholding taxes
and shall reasonably cooperate with Corvas in assessing its obligations with
respect thereto. Schering will provide written notice to Corvas of any foreign
tax withholding applicable to Earned Royalty sufficiently in advance of the date
such taxes are payable to provide Corvas an opportunity to review or contest the
applicability of such tax.
4.8 ROYALTIES ON RESALES. No Earned Royalty shall be payable in respect
of sales between and among Schering, its Affiliates and sublicensees, it being
understood that royalties are to be paid on resale of Licensed Products to
independent third parties.
13.
4.9 DURATION OF ROYALTY PAYMENTS. With respect to Net Sales of any
Licensed Product in any country in the Territory for which Earned Royalties are
due hereunder, Earned Royalty shall be paid hereunder with respect to Net Sales
of such Licensed Product for the longer period of (i) ten (10) years from the
date of first commercial sale of such Licensed Product hereunder in such country
or (ii) for so long as the manufacture, use, sale, offer for sale or import in
such country of such Licensed Product is subject to a Valid Claim in such
country. Upon expiration of the obligation to pay Earned Royalty on Net Sales
hereunder with respect to a Licensed Product in any country in the Territory,
the license granted to Schering in Article 3 shall become fully paid and
irrevocable with respect to such country and Schering, its Affiliates and
sublicensees shall thereafter be free at no cost to use any remaining
proprietary rights of Corvas granted pursuant to Article 3 herein to
commercialize the applicable Licensed Product in such country.
4.10 MAINTENANCE OF ROYALTY RECORDS. Schering shall maintain and cause its
Affiliates to maintain books of account and adequate records of all Net Sales of
Licensed Products, including those made by sublicensees. Corvas shall have the
right, by an independent public accounting firm reasonably acceptable to
Schering, employed by it and at its own expense, to examine pertinent books and
records of Schering at all reasonable times (but not more often than once each
calendar year) for the purpose of determining and reporting to Corvas the
correctness of royalty payments made hereunder; it being understood that such
examination with respect to any quarterly accounting period hereunder shall take
place not later than three (3) years following the expiration of said period.
The costs and expenses of such accounting firm shall be paid by Schering with
respect to any audit disclosing an underpayment by Schering of more than five
percent (5%). Any overpayments shall be promptly refunded to Schering. The
accounting firm representatives shall execute customary confidential agreements
prior to any examination.
4.11 COMPULSORY ROYALTIES. If the Earned Royalty set forth herein is
higher than the maximum royalty permitted by the law or regulations in any
country, the royalty payable for Net Sales of Licensed Products in such country
shall be equal to the maximum permitted royalty under such law or regulations.
ARTICLE 5
DILIGENCE
5.1 SCHERING REPORTS. During the term of this Agreement, beginning upon
the existence of a Licensed Product and continuing until Schering commences
paying royalties to Corvas with respect to such Licensed Product in accordance
with Paragraph 4.5, Schering will provide semi-annual reports to Corvas
regarding the applicable Licensed Products (i) describing the results of its
evaluation of Licensed Products; and (ii) showing in reasonable detail,
sufficient to allow Corvas to make an independent assessment of the program's
progress, the efforts to develop and commercialize Licensed Products hereunder
through the first NDA filing ("PRODUCT PLAN"). Corvas shall have the right,
upon notice to Schering, to meet with Schering twice each
14.
year within thirty (30) days of its receipt of semi-annual report, for the
purpose of reviewing and discussing Schering's progress thereunder. In the
event Corvas is acquired, whether by merger, sale of stock, sale of assets or
other transaction, by an entity that is a "Major Pharmaceutical Company," as
defined below, Schering's reporting obligations under this Paragraph 5.1 shall
thereafter be limited to providing a brief annual status report of progress in
the development and commercialization of Licensed Products sufficient to allow
such Major Pharmaceutical Company to monitor Schering's diligence under this
Agreement. In the event of such an acquisition, the contents of all such annual
status reports, as well as any annual reports received from Schering prior to
such acquisition, shall be treated as confidential, shall be used solely for
purposes of monitoring Schering's diligence in the commercialization of Licensed
Products, and shall only be made available to those individuals within the Major
Pharmaceutical Company who are responsible for such monitoring activities. For
purposes of this Paragraph 5.1, the term "Major Pharmaceutical Company" shall
mean any entity (including any corporation, joint venture, partnership or
unincorporated entity), as well as any Affiliates or division(s) of such entity,
that is engaged in the research, development, manufacturing, registration and
marketing of drug products that are approved under NDAs, HRDs, ANDAs or Product
License Applications (including, without limitation, any entity that is a member
of PhRMA).
5.2 SCHERING DILIGENCE. Schering shall be obligated to make continuing
diligent efforts to develop and commercialize itself or through Affiliate(s) or
sublicensee(s) at least [ *** ] commercially viable Licensed Product. Diligent
efforts shall be comparable to those efforts Schering makes with respect to its
own pharmaceutical products of comparable market potential at a comparable stage
of development. If Schering fails to exercise such diligent efforts, then
Corvas shall have the right to give Schering written notice thereof stating in
reasonable detail the particular failure. If Schering shall not correct the
failure within [ *** ] of such notice or, with respect to any failure which
cannot reasonably be cured within [ *** ], shall not initiate within [ *** ] of
such notice and thereafter diligently pursue action reasonably expected to cure
such failure (even if requiring longer to cure than the [ *** ] specified in
Paragraph 9.2), then such failure shall constitute a material breach of this
Agreement, and Corvas shall have the right to terminate this Agreement pursuant
to Paragraph 9.2 herein, but without any further right to cure such breach
notwithstanding anything to the contrary in Paragraph 9.2. In the event a
dispute shall arise as to whether a failure to exercise due diligence has
occurred or whether Schering is diligently pursuing action reasonably expected
to cure such failure, such matter shall be resolved in accordance with the
provisions of Paragraph 12.4. The periods specified in this Paragraph 5.2 shall
be suspended during the pendency of the proceedings contemplated by Paragraph
12.4.
ARTICLE 6
OWNERSHIP OF INTELLECTUAL PROPERTY
6.1 CORVAS INTELLECTUAL PROPERTY. All rights to inventions, developments,
discoveries or improvements (whether or not patentable), which are made by
Corvas employees, agents or contractors, without inventive contribution of a
Schering employee, agent or contractor and in
* CONFIDENTIAL TREATMENT REQUESTED
15.
direct connection with or arising from Corvas' work pursuant to the Research
Program ("CORVAS INVENTIONS") shall be owned by Corvas. Expressly excluded from
Corvas Inventions are all inventions, developments, discoveries or improvements
(whether or not patentable) which are directly related to (i) technology
generally useful to impart oral activity to a molecule and (ii) technology
generally useful for the design, preparation or screening of transition state
chemical libraries.
6.2 SCHERING INTELLECTUAL PROPERTY. All rights to inventions,
developments, discoveries or improvements (whether or not patentable), which are
made by Schering employees, agents or contractors, without inventive
contribution of a Corvas employee, agent or contractor, and in direct connection
with or arising from Schering's work pursuant to the Research Program ("SCHERING
INVENTIONS") shall be owned by Schering.
6.3 JOINT INTELLECTUAL PROPERTY. All rights to inventions, developments,
discoveries or improvements (whether or not patentable), which are made by at
least one employee, agent or contractor of Schering and at least one employee,
agent or contractor of Corvas in direct connection with or arising from work
pursuant to the Research Program ("JOINT INVENTIONS") shall be jointly owned by
Schering and Corvas.
6.4 INDEPENDENT INVENTIONS. Schering has informed Corvas, and Corvas
acknowledges, that Schering has an ongoing internal research program in the
Field and that such research may be performed by Schering or in collaboration
with one or more third parties (collectively and individually, "SCHERING
INDEPENDENT RESEARCH"). Schering shall not provide to its third party
collaborators in the Field any Corvas Know-How, Corvas Inventions and Candidate
Compounds, including but not limited to Back-up Compounds and Licensed Products.
All inventions, developments, discoveries, Know-How, and materials which arise
solely from the performance of the Schering Independent Research (individually
and collectively, "INDEPENDENT INVENTIONS") are and shall remain the sole
property of Schering or its third party collaborator(s). Any compounds arising
solely from the Schering Independent Research and not from the Research Program
which are inhibitors of a protease specific to the Hepatitis C virus (including,
without limitation, the [ *** ]) shall not be Candidate Compounds or Licensed
Products. Nothing herein shall be construed as granting to Corvas any license
or other rights to such Independent Inventions or to any patent applications or
patents relating thereto.
ARTICLE 7
CONFIDENTIALITY OBLIGATIONS
Except as necessary for the proper exercise of its rights and obligations
under this Agreement, each party agrees that it and its Affiliates, employees,
directors, agents, consultants and outside contractors (and sublicensees in the
case of Schering) will not publish or otherwise divulge, or use for its or their
own benefit apart from this Agreement, confidential information furnished to it
by the other party without the prior written approval of such other party in
each instance. The foregoing obligation shall not be imposed on a party with
respect to any
* CONFIDENTIAL TREATMENT REQUESTED
16.
information which it can demonstrate by competent written evidence (i) was at
the time of disclosure to it (or shall thereafter, but prior to its publication,
divulgence or use for the benefit of a party or any of its Affiliates, become,
through no fault of such party or its Affiliates) a part of the public domain by
publication or otherwise; or (ii) was already properly and lawfully in its
possession at the time it was received from the other party; or (iii) was
lawfully received from a third party who was under no obligation of
confidentiality to the disclosing party with respect thereto; (iv) is
independently invented, discovered or developed by the receiving party without
use or reference to such information, (v) is required by law to be disclosed
(but only to the extent of such required disclosure and only after the
disclosing party provides a reasonable opportunity under the circumstances for
the other party to review the planned disclosure and discuss the need for same);
or (vi) is published with the mutual agreement of the parties. This obligation
shall extend until the later to occur of (i) the expiration of this Agreement,
or (ii) ten (10) years following any termination of this Agreement prior to
expiration thereof. The parties acknowledge that breach of the confidentiality
restrictions contained in this Paragraph will cause immediate and irreparable
harm for which money damages are an inadequate remedy and agree that an
aggrieved party shall be entitled to seek injunctive relief in a court of
competent jurisdiction, in addition to any other rights to remedies provided
under this Agreement or by law.
ARTICLE 8
INTELLECTUAL PROPERTY
8.1 TRADEMARKS. Schering, its Affiliates and sublicensees shall be free
to use and to register in any trademark office worldwide any Trademark for use
with Licensed Products they desire in their sole discretion. Schering shall own
all right, title and interest in and to the Trademark in its own name or that of
its Affiliates or sublicensees during and after the term of this Agreement.
8.2 PATENTS. As long as Schering has rights to Licensed Products
hereunder, Corvas shall, as hereinafter provided, prepare, file and prosecute,
to the extent feasible, and maintain patent applications and issued patents
within applicable Corvas Patent Rights in accordance with the terms of this
Article. In the case of patents to Joint Inventions which include generic or
specific compound claims covering one or more Licensed Products or Back-up
Compounds, Schering shall have the responsibility, at Schering's expense, for
preparing, filing, prosecuting and maintaining any patent applications and
patents issuing thereon. Schering will use diligent efforts to seek patents of
comparable quality and scope as customarily obtained by pharmaceutical companies
for comparable inventions. Corvas shall provide Schering reasonable assistance,
upon Schering's request and at Schering's expense, to prepare, file, prosecute
and maintain any patent applications or patents covering Joint Inventions for
which Schering has responsibility, including causing the execution of any
reasonably necessary documents. Schering shall provide timely disclosures and
notices to Corvas regarding the preparation and prosecution of patent
applications, and Schering shall provide Corvas with a reasonable opportunity to
review and comment upon such applications and prosecution in the various
countries and shall give good
17.
faith consideration to Corvas' comments. In the case of all other Joint
Inventions, the parties shall mutually determine which party shall file,
prosecute, maintain and bear the expenses of patent applications and patents
issuing therefrom.
8.3 PROSECUTION AND MAINTENANCE. Subject to Paragraph 8.2, Corvas shall
prepare, file, prosecute and maintain, at its expense, patent applications and
issued patents relating to the applicable subject matter described in Paragraph
8.2 of this Article in the United States of America. Corvas will use diligent
efforts to seek patents of comparable quality and scope as customarily obtained
by pharmaceutical companies for comparable inventions. Notwithstanding the
foregoing, Corvas shall have the right, consistent with its reasonable business
judgment, to abandon any patent application or issued patent in the United
States of America as part of its overall patent strategy, in a manner and based
on considerations consistent with Schering's development and commercialization
efforts for Licensed Products and a well conceived patent strategy of an
established biopharmaceutical company for projects of similar value and status.
In the event of such abandonment, Corvas shall give Schering reasonable advance
written notice thereof and an opportunity to continue the preparation or
prosecution of any such patent application or maintenance of any such issued
patent, at Schering's expense, and Corvas shall have no further obligation
thereafter with respect to such patent application or issued patent; PROVIDED,
HOWEVER, such an act of abandonment shall not affect ownership of patent rights.
If Schering desires patent protection in Europe (e.g., through the European
Patent Office ("EPO")), Japan or Canada, it shall so direct and Corvas shall
prepare, file, prosecute and maintain such patent applications and issued
patents, and Schering shall, at Corvas' election, either advance costs or
reimburse Corvas for [ *** ] of its reasonable out-of-pocket expenses incurred
after the Effective Date and properly documented. If Schering desires patent
protection in any additional jurisdictions, it shall so direct and Corvas shall
prepare, file, prosecute and maintain such patent applications and issued
patents, and Schering shall, at Corvas' election, either advance costs or
reimburse Corvas for its reasonable out-of-pocket expenses incurred after the
Effective Date and properly documented. In the event Schering no longer desires
to continue prosecution in any such jurisdiction, or never directs that a patent
application be filed in any certain jurisdiction, then Schering shall so notify
Corvas and Corvas may discontinue such prosecution, or continue or begin such
prosecution, as the case may be, at its own expense. In the event Schering
discontinues prosecution or never directs prosecution in any certain
jurisdiction, and Corvas continues or begins prosecution in that jurisdiction,
then Corvas shall recover its costs of filing, prosecution and maintenance in
such jurisdiction from any sales by Schering or its sublicensees of Licensed
Products in such jurisdiction in addition to royalties or other payments in
respect of Net Sales in such jurisdiction. Corvas shall provide timely
disclosures and notices to Schering regarding the preparation and prosecution of
patent applications, and Corvas shall provide Schering with a reasonable
opportunity to review and comment upon such applications and prosecution in the
various countries.
8.4 PATENT EXTENSIONS. With respect to any issued patent included within
Corvas Patent Rights licensed to Schering hereunder, Corvas will designate
Schering as its agent for obtaining an extension of such patent or governmental
equivalent which extends the exclusivity of any of the patent subject matter
where available in any country worldwide or, if not feasible, at Schering's
option, permit Schering to file in Corvas's name or diligently obtain such
extension
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18.
for Schering, its Affiliate(s) or sublicensee(s) at Schering expense.
Furthermore, Corvas agrees to provide reasonable assistance, at no out-of-pocket
expense, to facilitate Schering's efforts to obtain any extension.
8.5 THIRD PARTY INFRINGEMENTS. Each party shall promptly notify the other
of its knowledge of any potential infringement of the Corvas Patent Rights.
Corvas shall have the right, but not the obligation, to take all reasonable
legal action necessary to (i) protect the licensed Corvas Patent Rights against
infringements by third parties and (ii) enforce the Corvas Patent Rights against
infringement by third parties by the sale of products competing with Licensed
Products in the Field. If, within three (3) months following receipt by the
receiving party of the notice referred to in the first sentence of this
Paragraph, Corvas fails to take such action to halt the alleged infringement,
Schering shall, in its sole discretion, have the right to take such action as it
deems warranted in its own name or in the name of Corvas or jointly. The
foregoing notwithstanding, in the event that an alleged third party infringer
certifies pursuant to 21 U.S.C. Section 355(b)(2)(A)(iv) against a granted
patent within the scope of the Corvas Patent Rights and covering a Licensed
Product, the party receiving notice of such certification shall immediately
notify the other party of such certification, and if fourteen (14) days prior to
expiration of the forty-five (45) day period set forth in 21 U.S.C. Section
355(c)(3)(C), Corvas fails to commence an infringement action, Schering, in its
sole discretion, shall be entitled to bring such infringement action. Each
party agrees to render such reasonable assistance as the prosecuting party may
request. Costs of maintaining any such action and damages recovered therefrom
shall be paid by and belong to the party bringing the action. In each case the
party not initiating the action shall have the right, at its own expense, to
join into the prosecution of such action, including becoming a party to such
action and being represented by separate counsel of its choice. However, if
Schering, in its sole discretion, consents to grant a sublicense under Corvas
patent Rights to any third party, who, but for such license, would infringe
claims of issued patents included in the Corvas Patent Rights, then, after
deduction by Schering of any costs and expenses incurred by Schering in the
prosecution of such action prior to granting the license to such party, Corvas
and Schering shall divide the running royalty payments received from any such
third party, in the proportion of [ *** ] to Schering and [ *** ] to Corvas; in
such case, sales of such products by such third party shall not be included as a
part of Net Sales.
ARTICLE 9
TERM AND TERMINATION
9.1 TERM. Unless sooner canceled or terminated under the provisions
hereof, this Agreement shall expire upon the expiration of all royalty
obligations hereunder.
9.2 TERMINATION FOR BREACH. Either party may, at its option, terminate
this Agreement by giving to the other party prior notice in writing to that
effect of not less than [ *** ] in the event that the other party shall commit a
material breach of this Agreement and shall fail to cure such breach during the
[ *** ] period following receipt
* CONFIDENTIAL TREATMENT REQUESTED
19.
of said notice from the non-breaching party, or such longer period (not to
exceed [ *** ] as may be necessary, provided the breaching party has commenced
and continues its diligent efforts to cure. Notwithstanding the foregoing, if
the breach specifically relates solely to a specific Licensed Product, this
Agreement shall be terminable by Corvas only with respect to the Licensed
Product to which such breach specifically relates. Such cancellation and
termination shall not release the breaching party from any obligations hereunder
incurred prior thereto nor prejudice any other rights or remedies of the
non-breaching party. In the event of termination of this Agreement by Corvas
pursuant to this Paragraph 9.2, Corvas and Schering shall have the rights and
obligations set forth in the applicable provisions of Paragraphs 9.5 and 9.6
hereof, and Corvas shall also have, at its option, (i) as its sole legal right
and remedy arising out of the termination the rights set forth in Paragraph 9.8
or (ii) such rights and remedies as may be available at law and in equity
including, without limitation, damages but not indirect or consequential damages
or lost profits. Election by Corvas of its option rights shall be made within
[ *** ] of termination.
9.3 VOLUNTARY SCHERING TERMINATION. Schering may terminate this Agreement
at any time upon [ *** ] prior written notice to Corvas, and in such event the
parties shall have the rights and obligations set forth in the applicable
provisions of Paragraphs 9.5, 9.6 and 9.8 hereof.
9.4 AUTOMATIC TERMINATION. In the event that on the [ *** ] following
expiration or termination of the Research Program Term Schering has not accepted
for development at least [ *** ] Candidate [ *** ] pursuant to Paragraph
2.5(a), this Agreement shall terminate and all rights granted to Schering
hereunder, including all applicable rights to Licensed Products, Candidate
Compounds and Non-Collaboration Compounds and all intellectual property
rights therein, shall revert to Corvas. In such event Schering shall grant
Corvas an exclusive license, with the right to sublicense, under Schering
Technology in the Territory as it relates to each Candidate Compound
submitted to Schering by the Research Committee.
9.5 POST TERMINATION ROYALTIES. Upon any Agreement cancellation,
expiration or termination, all Earned Royalties due for Net Sales of Licensed
Products to the effective date of said cancellation or termination shall accrue
and become due and payable on the sixtieth (60th) day thereafter.
9.6 POST TERMINATION PRODUCT SALES. In the event of the cancellation or
termination of any license rights in a jurisdiction with respect to a Licensed
Product, other than for reason of material breach of this Agreement by Schering,
prior to the expiration thereof or termination of this Agreement, inventory of
Licensed Product may be sold in such jurisdiction for up to six (6) months
after date of termination, provided Earned Royalties are paid thereon, and (i)
the obligations of confidentiality under Article 7 herein shall survive for the
period specified therein, and (ii) all obligations of either party accruing
prior to such termination shall survive.
* CONFIDENTIAL TREATMENT REQUESTED
20.
9.7 INSOLVENCY AND BANKRUPTCY.
(a) TERMINATION UPON CORVAS INSOLVENCY. In the event that (i) Corvas
shall make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of custodian, receiver or any trustee for it or a
substantial part of its assets, or shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect other than Title 11; or (ii) if there shall have been filed any such bona
fide petition or application, or any such proceeding shall have been commenced
against Corvas, in which an order for relief is entered or which remains
undismissed for a period of ninety (90) days or more; or (iii) Corvas by any act
or omission of act shall indicate its consent to, approval of or acquiescence in
any such petition, application, or proceeding or order for relief or the
appointment of a custodian, receiver or trustee for it or any substantial part
of its property, or shall suffer any such custodianship, receivership or
trusteeship to continue undischarged for a period of ninety (90) days or more;
and Corvas has not complied with or is unable to comply with its material
obligations under this Agreement, then Schering shall have the following rights.
Schering will have the right (including, without limitation, the right and
ability to cure any and all defaults) to complete any work which is designated
as the responsibility of Corvas under the Agreement and to contract directly
with third parties, if any, involved in contracted arrangements with Corvas with
respect to such work. The parties hereby acknowledge and agree that Schering
will have complete right of access to all information and data of Corvas or any
third party necessary to complete the development and registration of and to
manufacture the Licensed Products.
(b) SCHERING RIGHTS UPON CORVAS BANKRUPTCY.
(i) All rights and licenses granted under or pursuant to this
Agreement by Corvas to Schering are, for all purposes of Section 365(n) of Title
11, licenses of rights to intellectual property as defined in Title 11. If a
case is commenced by or against Corvas under Title 11, then, unless and until
this Agreement is rejected as provided in Title 11, Corvas (in any capacity,
including debtor-in-possession) and its successors and assigns (including,
without limitation, a Title 11 Trustee) shall, as Schering may elect in a
written request, immediately upon such request (i) perform all of the
obligations provided in this Agreement to be performed by Corvas or (ii) provide
to Schering all such intellectual property (including all embodiments thereof)
held by Corvas and such successors and assigns or otherwise available to them.
(ii) If a Title 11 case is commenced by or against Corvas, this
Agreement is rejected as provided in Title 11 and Schering elects to retain its
rights hereunder as provided in Title 11, then Corvas (in any capacity,
including debtor-in-possession) and its successors and assigns (including,
without limitation, a Title 11 Trustee) shall provide to Schering all such
intellectual property (including all embodiments thereof) held by Corvas and
such successors and assigns or otherwise available to them immediately upon
Schering's written request therefor. Whenever Corvas or any of its successors
or assigns provides to Schering any of the intellectual property licensed
hereunder (or any embodiment thereof) pursuant to this Paragraph 9.7, Schering
shall have the right to perform the obligations of Corvas hereunder with
21.
respect to such intellectual property, but neither such provision nor such
performance by Schering shall release Corvas from any such obligation or
liability for failing to perform it.
(iii) All rights, powers and remedies of Schering provided herein
are in addition to and not in substitution for any and all other rights, powers
and remedies 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 Corvas. Schering, 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, Title 11) in such event.
The parties agree that in the event of a rejection of this Agreement as provided
in Title 11 and Schering election to retain its rights hereunder as provided in
Title 11, they intend the foregoing Schering rights to extend to the maximum
extent permitted by law, including without limitation for purposes of Title 11,
(i) the right of access to such intellectual property (including all embodiments
thereof) of Corvas, or any third party with whom Corvas contracts to perform an
obligation of Corvas under this Agreement, and, in the case of the third party,
which is necessary for the development, registration and manufacture of Licensed
Products and (ii) the right to contract directly with any third party described
in clause (i) in this sentence to complete the contracted work.
9.8 RIGHTS UPON TERMINATION. In the event of termination of this
Agreement pursuant to Paragraph 9.2 or Paragraph 9.3, the licenses set forth in
Paragraphs 3.1, 3.3 and 3.4 hereof applicable to the portions terminated (which
may be the entire portion or a part thereof) shall immediately terminate and all
applicable rights to any HCV Activity Compound, Back-up Compound and Licensed
Product and all intellectual property rights therein, shall revert to Corvas
and, except in the instance of termination under Paragraph 9.2 due to breach by
Corvas, Schering shall grant to Corvas, upon Corvas' request, an exclusive
license in the Territory, with the right to sublicense, under Schering
Technology solely as it relates to any and all Candidate Compounds, including
but not limited to Back-up Compounds and Licensed Products. Such license shall
be for use within the Field; PROVIDED, HOWEVER, that in the case of Candidate
Compounds included within Joint Inventions, such license shall be for all uses.
Corvas shall pay to Schering (A) royalties on its net sales of products based on
any such Candidate Compound or Licensed Product ("Corvas Product") so licensed
to Corvas of (i) [ *** ] for Corvas Products for which [ *** ] as evidenced by
[ *** ] on the effective date of termination and (ii) [ *** ] for Corvas
Products for which [ *** ] as evidenced by [ *** ] on the effective date of
termination plus (B) an [ *** ] received by Corvas and its Affiliates from any
third party with respect to a grant of rights under Schering Technology; such
royalties and amounts shall be payable in a manner consistent with the terms of
Article 4 hereof. Corvas shall, and shall endeavor to cause its sublicensees
to, indemnify and hold harmless Schering and its Affiliates, employees,
officers, directors, shareholders and agents from and against all liabilities,
losses, damages, costs or expenses, including reasonable attorney's fees which
such party may incur, suffer or be required to pay resulting from or arising in
connection with any product liability or other claims arising from the sale or
use by any person of any Corvas Product manufactured, marketed, sold or
distributed by Corvas or any Corvas
* CONFIDENTIAL TREATMENT REQUESTED
22.
Affiliate or sublicensee pursuant to this Paragraph 9.8, which obligation of
indemnification shall be consistent with the procedures set forth in Paragraph
11.3 hereof. In addition, Schering shall grant to Corvas, to the extent
consistent with Schering's other marketing efforts, an exclusive license in the
Territory to utilize Schering Trademarks which were used with Corvas Products;
such license shall continue for a reasonable period, not to exceed [ *** ]
necessary to permit Corvas to phase in its trademarks. Promptly after the
termination Schering shall return to Corvas or dispose of any Corvas Know-How
described in Paragraph 1.9 herein which is covered by the portion of the
Agreement terminated, to the extent feasible, as requested by Corvas.
ARTICLE 10
WARRANTIES AND COVENANTS
Each party makes the warranties, covenants and representations set forth in
this Article 10 as follows:
10.1 AUTHORITY. Each party represents and warrants to the other party that
it has the legal power, authority and right to enter into this Agreement and to
perform all of its respective obligations set forth herein, including the
Exhibits hereto.
10.2 NO CONFLICTING UNDERTAKINGS. Each party represents and warrants that
as of the Effective Date of this Agreement it is not a party to any agreement,
arrangement or understanding with any third party which in any material way
conflicts with such party's ability to fulfill any of its obligations under the
terms of this Agreement, including the Exhibits hereto.
10.3 NO CONFLICTING FUTURE ACTIONS. Each party covenants (and Corvas also
represents and warrants with respect to the grant of rights to Schering under
Article 3) that it will not commit any material acts or fail to take any act
which it knows or should know would cause a material omission or permit any acts
or omissions to occur which it knows or should know would be in conflict with
its obligations under this Agreement and the Exhibits hereto or diminish the
potential scope of the grant of rights to Schering hereunder in any material
respect.
10.4 NO GUARANTEE OF RESEARCH PROGRAM SUCCESS. Corvas makes no express or
implied warranties, statutory or otherwise, concerning the quality, commercial
utility, freedom from infringement or any other characteristics of any Licensed
Products, and makes no warranty that a Licensed Product will arise or result
from the Research Program.
10.5 CORVAS OWNERSHIP OF PATENTS. Corvas represents and warrants that,
except for the rights herein granted to Schering and as otherwise permitted
under this Agreement, it has the right, title and interest in and to the Corvas
Patent Rights which it purports to have.
10.6 COMPLIANCE WITH AGREEMENT AND LAWS. Each party shall comply in all
material respects with the terms of this Agreement and with all laws, rules and
regulations applicable to
* CONFIDENTIAL TREATMENT REQUESTED
23.
the discovery, development, manufacture, distribution, import and export and
sale of pharmaceutical products pursuant to this Agreement.
10.7 NO GOVERNMENT RIGHTS TO LICENSED PROPERTY. Corvas represents and
warrants that the license rights granted by it to Schering with respect to
Licensed Products shall not be subject to any retained rights of any state,
federal or foreign government or governmental entity, including without
limitation rights of the United States government under the Xxxx-Xxxx Act,
except as set forth on the Corvas Schedule of Exceptions attached hereto as
Exhibit E.
10.8 NO THIRD PARTY RIGHTS TO COMPOUNDS. Corvas represents and warrants
that as of the Effective Date it has no agreements, understandings or
undertakings with any third parties or entities which would substantially impair
its ability to perform its obligations hereunder or to grant the rights which it
purports to grant hereunder or with respect to Candidate Compounds and Licensed
Products.
10.9 NEGATIVE COVENANTS.
(a) DEVELOPMENT FOR HCV USE. Schering shall not seek approval for
marketing of any Candidate Compound outside of the Field unless it first obtains
approval for marketing in the United States of such Candidate Compound in the
Field.
(b) OFF-LABEL USE. Except as provided in this Agreement, Corvas
shall not, during the term of this Agreement, grant any license or sublicense to
any third party to make, use, sell, offer for sale or import an HCV Activity
Compound in the Territory under Corvas Patent Rights or Corvas Know-How if at
the time of such grant Corvas has information from which it could reasonably be
concluded that any products to be based on such HCV Activity Compound will be
used for the treatment of Hepatitis C.
ARTICLE 11
INDEMNITY
11.1 SCHERING INDEMNITY. Schering will indemnify and hold harmless Corvas
and its Affiliates, employees, officers, directors, shareholders and agents
("CORVAS INDEMNIFIED PARTY") from and against any and all liabilities, losses,
damages, costs, or expenses (including reasonable attorneys' fees) which the
Corvas Indemnified Party may incur, suffer or be required to pay resulting from
or arising in connection with (i) the breach by Schering of any covenant,
representation or warranty contained in this Agreement, (ii) any product
liability or other claims arising from the use by any person of any Licensed
Product that was manufactured, marketed, sold or distributed by Schering or any
Affiliate or sublicensee, or (iii) the successful enforcement by a Corvas
Indemnified Party of any of the foregoing.
11.2 CORVAS INDEMNITY. Corvas will indemnify and hold harmless Schering
and its Affiliates, employees, officers, directors, shareholders and agents
("SCHERING INDEMNIFIED
24.
PARTY") from and against any and all liabilities, losses, damages, costs or
expenses (including reasonable attorneys' fees) which the Schering Indemnified
Party may incur, suffer or be required to pay resulting from or arising in
connection with (i) the breach by Corvas of any covenant, representation or
warranty contained in this Agreement, (ii) any product liability or other claims
arising from the use by any person of any Licensed Product that was manufactured
by Corvas or a Corvas Affiliate to the extent caused by or arising from any act,
omission or negligence of Corvas or a Corvas Affiliate, or (iii) the successful
enforcement by a Schering Indemnified Party of any of the foregoing.
11.3 INDEMNITY OBLIGATIONS. The aforesaid obligations of the indemnifying
party shall be subject to the indemnified party fulfilling the following
obligations:
(i) The indemnified party shall fully cooperate with the indemnifying
party in the defense of any claims, actions, etc., which defense shall be
controlled by the indemnifying party, and
(ii) The indemnified party, shall not, except at its own cost,
voluntarily make any payment or incur any expense with respect to any claim or
suit without the prior written consent of the indemnifying party, which such
party shall not be required to give.
11.4 LIABILITY INSURANCE. Schering shall procure and maintain, at its sole
expense, broad form comprehensive general liability insurance, including
products and completed operations coverage, in amounts which are commercially
reasonable in light of the business being conducted by Schering pursuant to this
Agreement, providing insurance coverage for claims and suits arising from the
development, manufacture, use, distribution or sale of any Licensed Product in
any country worldwide. Corvas shall be named an additional insured on the
policy of insurance, and a certificate of insurance will be provided to Corvas.
Notwithstanding anything to the contrary in the foregoing provisions of this
Paragraph 11.4, upon prior to notice to Corvas Schering may self-insure for such
claims and suits to the extent, and in such manner and with such procedures and
safeguards, as shall be reasonable and shall be consistent with customary
practices in the pharmaceutical industry in comparable circumstances.
ARTICLE 12
MISCELLANEOUS
12.1 WAIVER. The failure on the part of Schering or Corvas to exercise or
enforce any right conferred upon it hereunder shall not be deemed to be a waiver
of any such right, nor operate to bar the exercise or enforcement thereof at any
time or times thereafter.
12.2 NOTICES. Any notice required or permitted to be given by the terms of
this Agreement by a party shall be given by prepaid, registered air mail or by
express delivery service, such as Federal Express or DHL properly addressed to
the address of the other party
25.
set forth below, or to such other address as may, from time to time, be
designated in writing by such other party, and shall be deemed to have been
given upon receipt:
As to Schering: Schering Corporation
0000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Vice President, Business Development
With copy to: Legal Director Licensing
Schering-Plough Corporation
0000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
As to Corvas: Corvas International, Inc.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Corporate Secretary
With copy to: Xxxxxx Godward LLP
5 Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxxx
12.3 APPLICABLE LAW. This Agreement shall be construed and interpreted
according to the law of the State of Delaware without giving effect to its
conflict of law provisions.
12.4 DISPUTE RESOLUTION. The parties shall follow the procedures set forth
below to resolve any dispute or issue which, by the express terms of this
Agreement, is to be resolved pursuant to this Paragraph 12.4 ("DISPUTE").
Within thirty (30) days after notice from either party to the other of such
Dispute, the parties shall hold a meeting, attended by Corvas' and Schering's
respective Directors of Research and Development (or the equivalent position)
("REPRESENTATIVES") to attempt in good faith to negotiate a resolution of the
Dispute, which resolution shall be subject to approval by the parties'
respective Chief Executive Officers or their designated representatives
("CEOS"). If, within thirty (30) days after such meeting, the parties have not
succeeded in negotiating a resolution of the Dispute, the Representatives shall
promptly give notice to the CEOs describing the specific nature of the Dispute,
including references to the relevant portions of this Agreement and possible
conditions for the resolution of the Dispute ("DESCRIPTION OF DISPUTE"). The
CEOs shall attempt in good faith to resolve the Dispute but if no successful
resolution of the Dispute has been mutually agreed to within thirty (30) days
after the CEOs' receipt of the Description of Dispute, either party may initiate
arbitration of the dispute in accordance with the procedures set forth in
Exhibit F hereto.
26.
12.5 CAPTIONS. The captions to the Articles and Paragraphs of this
Agreement are for convenience only, and shall not be deemed of any force or
effect whatsoever in construing this Agreement.
12.6 ENTIRE AGREEMENT AND AMENDMENT. The terms and provisions contained
herein, including the Exhibits hereto, constitute the entire agreement between
the parties and shall supersede all previous communications, representations,
agreements or understandings, either oral or written, between the parties hereto
with respect to the subject matter hereof. No amendment to this Agreement
varying or extending the terms hereof will be binding upon either party hereto
unless in writing, signed by duly authorized officers of the respective parties,
and referencing this Agreement. Each party hereto represents that it has been
represented by counsel in connection with this Agreement and acknowledges that
it has participated in the drafting hereof. In interpreting and applying the
terms and provisions of this Agreement, the parties agree that no presumption
shall exist or be implied against the party which drafted such terms and
provisions.
12.7 ASSIGNMENT. This Agreement shall not be assignable by either party,
except (i) to an Affiliate of such party, provided the assigning party
guarantees the performance of the Affiliate, (ii) as mutually agreed to in
writing in advance or (iii) to a successor to the entire pharmaceutical business
of such party, whether in a merger, sale of stock, sale of assets or other
transaction. 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 Paragraph 12.7, shall be null and void and of no
legal effect.
12.8 SURVIVAL OF TERMS. The terms of this Agreement which by their intent
or meaning have validity beyond the term of this Agreement shall survive the
early termination or expiration of this Agreement.
12.9 NO AGENCY. Nothing herein shall be deemed to constitute either party
as the agent or representative of the other party or both parties as joint
venturers or partners for any purpose. Corvas shall be an independent
contractor, not an employee or partner of Schering. Neither party shall be
responsible for the acts or omissions of the other party, and neither party will
have authority to speak for, represent or obligate the other party in any way
without prior written authority from the other party.
12.10 SEVERABILITY. In the event that any provisions of this Agreement is
held by a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, (i) the
validity of the remaining provisions shall not be affected, (ii) the particular
provision shall to the extent permitted by law be reasonably construed and
equitably reformed to be valid and enforceable, and (iii) the rights and
obligations of the parties hereto shall be construed and enforced as if the
Agreement did not contain the unreformed, particular provisions held to be
unenforceable.
27.
12.11 EXPRESS AND IMPLIED LICENSES. Only the licenses granted pursuant to
the express terms of this Agreement shall be of any legal force and effect. No
other license rights shall be created by implication or estoppel.
12.12 FORCE MAJEURE. In the event that either party is prevented from
performing or is unable to perform any of its obligations under this Agreement,
including without limitation payment obligations, due to any act of God; fire;
casualty; flood; any act, exercise, assertion or requirement of governmental
authority; epidemic; destruction of production facilities; riots; insurrection;
inability to procure or use materials, labor, equipment, transportation or
energy; or any the cause beyond the reasonable control of the party invoking
this Paragraph 12.12 if such party shall have used diligent efforts to avoid
such occurrence, such party shall give notice to the other party in writing
promptly, and thereupon the affected party's performance shall be excused and
the time for performance shall be extended for the period of delay or inability
to perform due to such occurrence.
12.13 PUBLICITY. Each party agrees not to issue a press release or
otherwise publicize this Agreement or the contents of this Agreement except (i)
on the advice of its counsel, as required by law (e.g., any Securities and
Exchange Commission filings and disclosures) and provided the party who will be
disclosing has consulted with the other party to the extent feasible prior to
disclosure with respect to the substance of the disclosure, or (ii) as consented
to in advance by the other party in writing. Notwithstanding the foregoing,
each party shall have the right to issue an initial press release, in the form
attached hereto as Exhibit G. Any matter disclosed as permitted pursuant to
this Paragraph 12.13 may be thereafter disclosed by either party as it shall see
fit, provided that any such further disclosure shall not be more extensive than
the original disclosure.
12.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
12.15 COOPERATION. Corvas agrees to cooperate with Schering to furnish
such information as shall be reasonably requested by the FDA or other
governmental authorities with respect to Licensed Products.
12.16 PUBLICATION. Any manuscript by Schering or Corvas and their
Affiliates describing the scientific results of the Research Program shall be
subject to the prior review of the non-publishing party at least thirty (30)
days prior to submission. Further, to avoid loss of patent rights as a result
of premature public disclosure of patentable information, the receiving party
shall notify the disclosing party in writing within thirty (30) day after
receipt of a disclosure whether the receiving party desires to file a patent
application on any invention disclosed in such scientific results in accordance
with Article 8 ("PUBLICATION NOTICE"). In the event that the receiving party
desires to file such a patent application, the disclosing party shall withhold
publication or disclosure of such scientific results until the earlier of (i) a
patent application is filed thereon, (ii) the parties determine after
consultation that no patentable invention exists or (iii) ninety (90) days after
receipt by the disclosing party of the Publication Notice of the receiving
party's desire to file such patent application; PROVIDED, HOWEVER, that in
28.
the event the receiving party reasonably designates in good faith such results
or a portion thereof as commercially very important within thirty (30) days
after receipt of the Publication Notice, then such results shall not be
published until after earlier of (i) publication anywhere of a patent
application containing or based on such results or (ii) eighteen (18) months
after such receipt of the Publication Notice. Further, if such scientific
results contain the information of the receiving party that is subject to use
and nondisclosure restrictions under Article 7, the disclosing party agrees to
remove such information from the proposed publication or disclosure.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their duly authorized officers as of the date first
above written.
SCHERING CORPORATION CORVAS INTERNATIONAL, INC.
By: /s/ XXXXX XXXXXXX By: /s/ XXXX X. XXXXXXXX
-------------------------------- -------------------------------------
Title: Vice President Title: Executive Vice President
----------------------------- ----------------------------------
and Chief Financial Officer
-------------------------------
29.
EXHIBIT A
RESEARCH PROGRAM
HEPATITIS C VIRUS (HCV) PROTEASE INHIBITOR PROGRAM
[ *** ]
* CONFIDENTIAL TREATMENT REQUESTED
A-1
[ *** ]
* CONFIDENTIAL TREATMENT REQUESTED
A-2
EXHIBIT B
INITIAL LEAD CRITERIA
HEPATITIS C PROTEASE INHIBITOR PROGRAM
[ *** ]
* CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
ACCEPTANCE CRITERIA
Any compound submitted to Schering pursuant to Paragraph 2.5 shall satisfy each
of the following criteria, to the extent applicable, unless waived by Schering:
A. Novel, patentable structure;
B. Appropriate physical form, i.e., a soluble solid or salt;
C. Workable chemical synthesis;
D. IN VITRO inhibition of an HCV protease with [ *** ]
E. Oral anti-viral activity in [ *** ] models at appropriate doses, to be
determined by the Research Committee;
F. Suitable pharmacokinetics for [ *** ]
G. Consistent absorption (as determined by blood level) in [ *** ] as defined
by [ *** ] excluding outliers due to documented technical reasons;
H. No other clinically significant toxicities as determined in general
pharmacological screens, including activities against [ *** ] at an acceptable
multiple of the anti-viral dose. These will include an assessment of the
effects of the test compound on [ *** ] assessment of the effects of the
compound on [ *** ] assessment of the effect of the compound on [ *** ] and
assessment of the effects of the compound on [ *** ] and
I. Absence of significant potential for [ *** ]
* CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
LICENSED PRODUCTS
EXHIBIT E
CORVAS SCHEDULE OF EXCEPTIONS
Collaborative Research and Materials Transfer Agreement between Corvas
International, Inc. and University of Florida and its employee, Xxx X. Xxxx;
effective August 26, 1996, for a twelve (12) month period. See Section 10.7.
EXHIBIT F
ARBITRATION
(a) INITIATION OF ARBITRATION. A party ("COMPLAINING PARTY") which
intends to begin an arbitration to resolve a Dispute as contemplated by
Paragraph 12.4 of the Agreement ("ARBITRATION") shall initiate the Arbitration
by providing written notice ("ARBITRATION REQUEST") of such intent by certified
or registered mail or properly documented overnight delivery to the other party
("RESPONDING PARTY"). The Arbitration Request shall include a copy of the
Description of Dispute, set forth a proposed solution to the Dispute, and
include a suggested time frame within which the parties must act to effect such
solution. Contemporaneously with sending the Arbitration Request, the
Complaining Party shall submit a copy of the Arbitration Request to the American
Arbitration Association in the city in which the Arbitration is to be conducted
as provided in Paragraph (d) below.
(b) SELECTION OF ARBITRATION. Any and all Disputes to be resolved
pursuant to Arbitration shall be submitted to a neutral arbitrator
("ARBITRATOR"). The parties shall select the Arbitrator by mutual agreement but
if the parties are unable to agree, then the Arbitrator shall be selected in
accordance with the procedures of the American Arbitration Association. The
Arbitrator shall be a former judge of a state or federal court who shall not be
a current or former employee, director or shareholder of, or otherwise have any
current or previous relationship with, either party or its respective
affiliates.
(c) AMERICAN ARBITRATION ASSOCIATION RULES. The Arbitration shall be
conducted in accordance with the rules of the American Arbitration Association
then in effect, subject to the time periods and other provisions of this Exhibit
or as otherwise set forth in the Agreement.
(d) HEARING. Consistent with the time schedule established pursuant to
this paragraph (d) and Paragraph (e) below, the Arbitrator shall hold a hearing
("HEARING") to resolve each of the issues identified in the Description of
Dispute. To the extent practicable taking into account the nature of the
Dispute and the availability of the Arbitrator, the Hearing shall be conducted
over a period not to exceed two (2) consecutive business days, with each party
entitled to approximately half of the allotted time unless otherwise ordered by
the Arbitrator. In the event that Corvas initiates the Arbitration, the Hearing
shall be conducted in Newark, New Jersey. In the event that Schering initiates
the Arbitration, the Hearing shall be conducted in San Diego, California.
(e) DISCOVERY. Within ten (10) days of receipt by the Responding Party of
the Arbitration Request the parties shall negotiate in good faith the scope and
schedule of discovery, including depositions, document production and other
discovery devices, taking into account the nature of the Dispute submitted for
resolution. If the parties are unable to reach agreement as to the scope and
schedule of discovery, the Arbitrator may order such discovery as he or she
deems necessary. In either case, such discovery shall be completed within sixty
(60) days from the date of the selection of the Arbitrator. At the hearing,
which shall commence within twenty (20) days after the completion of discovery
unless the Arbitrator otherwise orders, the parties
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may present testimony (either live witness or deposition), subject to
cross-examination, and documentary evidence.
(f) HEARING SUBMISSION. At least twenty (20) business days prior to the
date set for the Hearing, each party shall submit to each other and the
Arbitrator a list of all documents on which such party intends to rely in any
oral or written presentation at the Hearing, a list of all witnesses, if any,
such party intends to call at the Hearing and a brief summary of each witness'
testimony. At least five (5) business days prior to the Hearing, each party
must submit to the Arbitrator and serve on each other party proposed findings of
fact and conclusions of law on each issue to be resolved. Within five (5) days
following the close of the Hearing, each party shall each submit such
post-Hearing briefs to the Arbitrator addressing the evidence and issues to be
resolved as may be required or permitted by the Arbitrator.
(g) ARBITRATOR'S DUTIES AND AUTHORITY. The Arbitrator shall preside over
and resolve any disputes between the parties in connection with the Arbitration.
The Arbitrator shall have sole discretion with regard to the admissibility of
any evidence and all other matters relating to the conduct of the Hearing. The
Arbitrator shall, in rendering its decision, apply the substantive law of
Delaware. The decision of the Arbitrator shall be final and not appealable,
except in the case of fraud or bad faith on the part of the Arbitrator in
connection with the conduct of such proceedings.
(h) DECISION AND AWARD. The Arbitrator shall render a decision and award
as expeditiously as possible but in no event more than thirty (30) days after
the close of the hearing. In making the award the Arbitrator shall rule on each
disputed issue. Nothing contained herein shall be construed to permit the
Arbitrator or any court or any other forum to award punitive, exemplary or any
similar damages. By entering into the Agreement and exercising their rights to
arbitrate, the parties expressly waive any claim for punitive, exemplary or any
similar damages. The only damages recoverable under this Agreement are
compensatory damages.
(i) COSTS AND EXPENSES. Each party shall pay its own costs (including,
without limitation, reasonable attorneys' fees) and expenses in connection with
the Arbitration; PROVIDED, HOWEVER, that if the Arbitrator determines that the
action of any party was arbitrary, frivolous or in bad faith, the Arbitrator may
award such costs and expenses to the prevailing party.
(j) CONFIDENTIALITY. The Arbitration shall be confidential and, except as
required by law, neither party shall make (or instruct the Arbitrator to make)
any public announcement with respect to the proceedings or decision of the
Arbitrator without the prior written consent of the other party. The existence
of any Dispute, and the award of the Arbitrator, shall be kept in confidence by
the parties and the Arbitrator, except as required in connection with the
enforcement of such award or as otherwise required by applicable law.
(k) JURISDICTION TO ENFORCE AWARD. For the purposes of these arbitration
provisions, the parties acknowledge their diversity of citizenship and agree to
accept the jurisdiction of the
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Xxxxxxx Xxxxxxxx Xxxxx in Newark, New Jersey or San Diego, California (as
selected by the party seeking to enforce) for the purposes of enforcing awards
entered pursuant to these arbitration provisions and for enforcing the
agreements reflected in this Paragraph (k).
(l) EXCLUSIVE PROCEDURES. The procedures specified herein shall be the
sole and exclusive procedures for the resolution of Disputes between the parties
which are expressly identified for resolution in accordance with these
arbitration provisions.
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EXHIBIT G
PRESS RELEASE
Contact: Xxxxxx Xxxxxxx
Schering-Plough
(000) 000-0000
Xxxxxx X. Xxxxxxx
Director, Investor Relations
(619) 455-9800 ext. 104
SCHERING-PLOUGH AND CORVAS ANNOUNCE
COLLABORATION ON HEPATITIS RESEARCH
MADISON, N.J., and SAN DIEGO, June XX, 1997 -- Schering-Plough Corporation
(NYSE: SGP) and Corvas International, Inc. (Nasdaq: CVAS) today announced an
agreement to seek orally bioavailable inhibitors of a key protease necessary for
hepatitis C virus (HCV) replication.
The agreement represents the third collaborative effort between the two
companies focusing on the discovery and development of protease inhibitors and
the first that will utilize Corvas' proprietary combinatorial chemistry program
to identify and optimize lead protease inhibitors.
Under terms of the agreement, Schering-Plough will receive an exclusive
worldwide license for products developed from Corvas compounds under the
research agreement. Schering-Plough will be responsible for all development,
manufacturing and marketing of the products. Corvas will receive licensing
fees, research and development funding, and payments upon reaching certain
milestones, in addition to royalties on sales. Further details of the agreement
are not being disclosed.
"Hepatitis is an increasingly widespread and potentially fatal disease," said
Xxxxxxxx X. Xxxxxxxxxxxx, M.D., president of Schering-Plough Research Institute.
"This collaboration complements and enhances our internal antiviral research
program and may offer a potential new pathway to discover innovative therapies
for this medical area," Spicehandler said.
"We have proven our ability to use our combinatorial approach to protease
inhibitor discovery in our core cardiovascular research area," said Xxxxxx X.
Xxxxxx, Ph.D., Corvas' executive vice president, research and development.
"This agreement provides a model opportunity to apply this capability to other
research areas, such as hepatitis C, while our internal resource remain focused
on the targets we know best. Schering-Plough's leadership in the area of
antiviral therapeutics makes them an excellent partner to capitalize on the
specific protease inhibitor candidates for hepatitis C that may be generated
from this alliance," Vlasuk said.
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Discovery of oral serine protease inhibitors using proprietary drug design and
combinatorial chemistry approaches is a key strength at Corvas. Schering-Plough
and Corvas have previously teamed to develop an oral inhibitor of thrombin, and
are working together to discover inhibitors of Factor Xa, both of which are key
protease enzymes in the blood coagulation cascade. The hepatitis C virus
contains a vital enzyme that belongs to the family of serine proteases. Through
use of its proprietary combinatorial chemistry program, Corvas hopes to rapidly
identify and optimize promising lead inhibitors to be evaluated for possible
clinical development under the agreement with Schering-Plough.
Corvas International, Inc. is a biopharmaceutical company engaged in the design
and development of a new generation of therapeutic agents for the prevention and
treatment of major cardiovascular and inflammatory diseases.
Schering-Plough is a research-based company engaged in the discovery,
development, manufacturing and marketing of pharmaceutical and health care
products worldwide.
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EXHIBIT H
HCV ACTIVITY CRITERIA
Inhibition of at least [ *** ] at a concentration of [ *** ] Assays used for
determination of such activity shall be assays that were routinely in use during
the Research Program or such assays as the Parties may otherwise agree upon.
* CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT I
BACK-UP COMPOUND CRITERIA
Inhibition of at least [ *** ] at a concentration of [ *** ] Assays used for
determination of such activity shall be assays that were routinely in use during
the Research Program or such assays as the Parties may otherwise agree upon.
* CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT J
ADDITIONAL ACTIVITY CRITERIA
Inhibition of at least [ *** ] at a concentration of [ *** ] Assays used for
determination of such activity shall be as agreed upon by the Parties.
* CONFIDENTIAL TREATMENT REQUESTED
