Exhibit 10.81
[CONFIDENTIAL TREATMENT REQUESTED]
[Certain information has been omitted herein pursuant to a request for
confidential treatment pursuant to Rule 24b-2.]
THIS AGREEMENT is made this 15th day of November, 1995
between
CIBA-GEIGY LIMITED
of Xxxxxxxxxxxxxx 000, 0000 Xxxxx, Xxxxxxxxxxx,
(hereinafter referred to as "Ciba")
and
CHIRON CORPORATION
of 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000, XXX,
(hereinafter referred to as "Chiron")
INTRODUCTION
A. Chiron and its affiliates have accumulated considerable experience and
technology in the Technology Transfer Field, as defined below.
B. Ciba wishes to gain access to Chiron's technology within the Technology
Transfer Field and to use it for the purpose of identifying or discovering
drugs, as well as identifying or discovering compounds suitable for use in
areas other than pharmaceuticals in which Ciba is or becomes active.
C. Chiron is willing to provide Ciba with access to technology within the
Technology Transfer Field, and any improvements it makes thereto during a
specified period following the date of this Agreement. Both Ciba and
Chiron are willing to collaborate in a research and development program
aimed at the enhancement of such technology, it being the intention of the
parties that Ciba will be free to use such transferred technology and such
improvements during and after the term of this Agreement, subject to the
terms set forth herein.
D. In addition, Chiron has considerable experience and expertise in utilizing
the technology within the Technology Transfer Field to design and
synthesize combinatorial libraries and in applying these technologies to
the discovery and development of pharmaceutical products. The parties
intend to collaborate with a view to the ultimate discovery and
development of new drugs for the targets which are selected as provided
below.
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E. This Agreement represents the technology transfer and research and
development collaboration between the parties which is contemplated in
Section 2.05 of that certain Cooperation and Collaboration Agreement dated
as of November 20, 1994 (the "Cooperation Agreement").
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS
1.1 "AFFILIATE" means in the case of each party any entity that directly or
indirectly controls, is controlled by, or is under common control with that
party. For such purpose the term "control" means ownership or control of at
least 50% of the voting interest in the entity in question. Chiron, Ciba and
their respective Affiliates shall not be considered Affiliates of each other for
the purposes of this Agreement, regardless of the percentage ownership interest
which Ciba may hold in Chiron.
1.2 "CHIRON LICENSED TECHNOLOGY" means all inventions, know-how, trade secrets,
and other proprietary information (whether patented or not), which are owned by
Chiron or its current Affiliates, or their respective employees or assignors, as
of the date of execution of this Agreement: (i) which are within the Technology
Transfer Field as the same is defined as at the date of execution of this
Agreement, or as the same may be redefined during the five years following such
date pursuant to Section 1.30; (ii) as to which Chiron has the right to grant to
Ciba a license hereunder, subject to Section 3.2.2; and (iii) which Ciba elects
to license pursuant to Section 3.1.2.
1.3 "CHIRON LICENSED TECHNOLOGY IMPROVEMENTS" means inventions, know-how,
trade secrets and proprietary information (whether patented or not) within the
Technology Transfer Field, which are invented or developed by Chiron or its
Affiliates, or their respective employees or assignors, subject to Section 1.30,
within five (5) years after the date of this Agreement, with the right to
license to Ciba hereunder, all subject to Section 3.2.2.
1.4 "CHIRON LICENSED TECHNOLOGY PATENTS" means all patents and patent
applications (including provisionals, divisionals, continuations, continuations
in part, reissues, re-examinations, substitutions, additions and any extensions
to such patents) claiming Chiron Licensed Technology or Chiron Licensed
Technology Improvements made within the period referenced in Section 1.3.
1.5 "CHIRON PRODUCT" means a product developed and commercialized by Chiron
pursuant to Section 4.3.
1.6 "CIBA LICENSED TECHNOLOGY" means all inventions, know-how, trade secrets,
and other proprietary information (whether patented or not), which are owned by
Ciba or its current Affiliates, or their respective employees or assignors, as
of the date of execution of this Agreement: (i) which are within the Technology
Transfer Field as the same is defined as at the date of execution
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of this Agreement, or as the same may be redefined during the five years
following such date pursuant to Section 1.30; and (ii) as to which Ciba has the
right to grant to Chiron a license hereunder, subject to Section 3.2.2.
1.7 "CIBA LICENSED TECHNOLOGY IMPROVEMENTS" means inventions, know-how, trade
secrets and proprietary information (whether patented or not) within the
Technology Transfer Field, which are invented or developed by Ciba or its
Affiliates, or their respective employees or assignors, subject to Section 1.30,
within five (5) years after the date of this Agreement, with the right to
license to Chiron hereunder, all subject to Section 3.2.2.
1.8 "CIBA LICENSED TECHNOLOGY PATENTS" means all patents and patent
applications (including provisionals, divisionals, continuations, continuations
in part, reissues, re-examinations, substitutions, additions and any extensions
to such patents) claiming Ciba Licensed Technology or Ciba Licensed Technology
Improvements made within the period referenced in Section 1.7.
1.9 "CIBA PRODUCT" means a product developed and commercialized by Ciba
pursuant to Section 4.3.
1.10 "COMBINATORIAL LIBRARY" means a library or mixture of compounds, including
the compounds contained or proposed to be contained therein, produced using
Combinatorial Technology.
"CHIRON COMBINATORIAL LIBRARY" means a Combinatorial Library designed
and/or synthesized or acquired by Chiron (alone or with third parties and
available for sublicense to Ciba under the terms and conditions of this
Agreement) prior to the execution date hereof or during the term of the
Target Collaboration.
"CIBA COMBINATORIAL LIBRARY" means a Combinatorial Library designed and/or
synthesized or acquired by Ciba (alone or with third parties) without
the assistance of or involvement of Chiron in the design or synthesis
of such library; provided that the mere use by Ciba of Chiron Licensed
Technology shall not be considered assistance or involvement of Chiron
for the purpose of this definition.
"JOINT COMBINATORIAL LIBRARY" means a Combinatorial Library, as to which
Ciba and Chiron each perform inventive or creative acts in designing the
library, and/or contribute proprietary components or compositions to the
library.
1.11 "COMBINATORIAL TECHNOLOGY" means methods and materials for the production,
design, synthesis, characterization and/or use of synthetic, non-peptide
chemical libraries, either as individual compounds or mixtures thereof, using
combination and/or permutation strategies with respect to the structural
components, e.g. organic scaffold or polymeric or oligomeric backbone structures
and chemistries, together with sidechain or substituent chemistries; such
libraries generated using
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chemical strategies based on (i) solid-phase or solid supported systems, e.g.
resins and/or supported spatial arrays (e.g. pins), or (ii) solution chemistry.
1.12 "COMPOUND HIT" means a singular molecular entity identified as having
biological activity at a level to be agreed upon by the parties, which would
typically be a 50% effect (estimated ED(50)) at less than or equal to 100
nanomolar, which identification results from the screening of Combinatorial
Libraries pursuant to the Target Collaboration.
1.13 "COMPOUND PATENT" means a patent or patent application claiming an
invention or discovery made pursuant to the Target Collaboration, which is
specific to a lead compound and a genus of compounds reasonably expected to have
the same or similar activity. Patentability of a Compound Patent is premised on
the activity of the lead compound(s). A Compound Patent may include claims to
the compounds per se, methods of making the compounds, methods of using the
compounds, formulations and the like, as appropriate.
1.14 "EDC" means a compound directed against a Selected Target which has
undergone extensive preclinical animal studies, formulation and production work,
and is identified as suitable to be prepared for tolerability studies in human
volunteers by the appropriate TARB of Ciba or the equivalent body of Chiron.
1.15 "FTE" means the full time equivalent effort, for one year, of one person
who participates directly in the technology transfer or the research and
development activities contemplated under this Agreement, on behalf of one of
the parties hereto. Chiron will use its standard cost accounting procedure in
determining FTE support and will fairly allocate costs among its various
programs. Such participation includes, without limitation, production of
chemical, biological and/or other materials or reagents provided for use under
this Agreement (and the resupply thereof if shelf stock is provided, as
reasonably determined by Chiron).
1.16 "JOINT PRODUCT" means a product developed and commercialized by Ciba and
Chiron under a co-development arrangement pursuant to Section 4.3.
1.17 "LIBRARY PATENT" means a patent or patent application claiming an invention
or discovery which is specific to a group of compounds related by structure but
not necessarily activity (i.e., a library). A Library Patent will include
claims to the library as a composition, and or methods for making and using a
library as appropriate. Patentability of a Library Patent is premised on the
use of the library to find active compounds for one or more targets. A Library
Patent may disclose and claim one or more compounds identified from the library
(including compositions and methods of making and using) without being
considered a Compound Patent.
1.18 "NET SALES" means the total revenue from commercial sales received by a
party hereto, its Affiliates and/or licensees from the sale of a product subject
to royalties hereunder ("Royalty Bearing Product") to independent third parties
less the following amounts : (i) discounts, including
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cash discounts, trade allowances or rebates actually allowed or granted, (ii)
credits or allowances actually granted upon claims or returns, regardless of the
party requesting the return, (iii) separately itemized freight charges paid for
delivery and (iv) taxes or other governmental charges levied on or measured by
the invoiced amount, whether absorbed by the billing party or the billed party.
In the event that the Royalty Bearing Product is sold in the form of a
combination product or kit containing one or more active ingredient components
or a delivery system ("Combination Product") then the Net Sales for such
Combination Product will be calculated by multiplying actual Net Sales of such
Combination by the fraction A/(A+B) where A is the fair market price of the
Royalty Bearing Product if such were sold separately as the only active
ingredient therein and B is the fair market price of additional active
ingredient components. If the Royalty Bearing Product and other active
components are not sold separately, or if a delivery system is an integral part
of the Combination Product and adds significant value, the parties will in good
faith negotiate a formula to determine the amount of Net Sales to which the
royalty will be applicable, which formula will reflect the Royalty Bearing
Product's and/or delivery system's contribution to the Combination Product.
1.19 "RESEARCH COMPOUND" means a compound directed at a Selected Target and
identified as a potential candidate for Early Compound Evaluation by Ciba's
Therapeutic/Indication Area Management, or by the equivalent body at Chiron,
based on such criteria as completion of screening in primary, selectivity and
cellular assays, and preliminary IN VIVO pharmacology studies.
1.20 "RESTRICTED TARGET" means a Target in relation to which, because of
pre-existing commitments of Chiron to third parties, Chiron is not permitted to
grant Ciba a license to use the Chiron Licensed Technology or the Chiron
Licensed Technology Improvements transferred to Ciba hereunder for the purpose
of research and development with respect to pharmaceuticals for human use. A
list of Restricted Targets is attached hereto as Exhibit D, which shall be
amended from time to time by eliminating one or more Restricted Targets, in the
event that such pre-existing commitments by Chiron to third parties are
terminated as to any such Targets.
1.21 "SCIENCE COMMITTEE" means the Science Committee created pursuant to
the Cooperation Agreement.
1.22 "SELECTED TARGET" means a Target selected pursuant to Section 4.1.1 to be
the subject of the Target Collaboration, or a Target selected for addition to
the Target Collaboration pursuant to Section 4.2.5 or 4.2.6.
1.23 "STEERING COMMITTEE" means the committee to be established pursuant to
Article 2 hereof.
1.24 "TARB" means a Therapeutic Area Review Board of Ciba.
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1.25 "TARGET" means one molecular entity, such as, but not limited to, a
receptor or an enzyme, together with its subtypes or isozymes, based on
scientific knowledge as it exists at the time of target selection. The parties
will mutually agree on the precise definition of any Target at the time it is
selected as a Selected Target hereunder.
For clarity of understanding, and by way of example rather than limitation:
[CONFIDENTIAL TREATMENT REQUESTED]
1.26 "TARGET COLLABORATION" means the research and development program conducted
by the parties pursuant to Article 4 of this Agreement.
1.27 "TARGET COLLABORATION FIELD" means the discovery, optimization and
development of small molecule compounds directed against a Selected Target for
human therapeutic use. The Target Collaboration Field specifically excludes
vaccines; diagnostics and therapeutic monitoring tests; antisense, aptamers and
related anti-gene therapies; and gene transfer technology.
1.28 "TARGET PROJECT TEAM" means a team to be established for the purposes of
the Target Collaboration pursuant to Section 4.2.2 hereof.
1.29 "TECHNOLOGY IMPROVEMENT COLLABORATION" means the research and development
program conducted by the parties for the purpose of developing improvements
within the Technology Transfer Field pursuant to Section 3.3.
1.30 "TECHNOLOGY TRANSFER FIELD" means solid-phase or solid supported organic
chemistry and related Combinatorial Technology based techniques for drug
discovery and optimization in preclinical research and development, for use in
the research and development of pharmaceuticals for human use or research and
development of other products (e.g. agricultural products), and including but
not limited to the following, all as applied to Combinatorial Technology: (i)
pins and/or resins, particularly the optimization of solid phases, grafted
surfaces and linkers, i.e., extending from the inert substrate to and including
the reactive moiety of the linker(s); (ii) methods and procedures for use
thereof, i.e., for performing solid-phase organic chemistry thereon, including
conditions for performing organic reactions generally and/or certain types or
classes of organic reactions specifically (e.g., solvent(s), temperature,
catalyst(s) and the like); (iii) formats, e.g., multipin systems or other
spatially addressable arrays, including automation software therefor, and
robotics technology for compound synthesis, including automation software
therefor; (iv) analytics to monitor the preceding; (v) computational chemistry,
including molecular modeling, diversity modeling and data handling techniques
for creating and maintaining data bases, and informatics; (vi) assay methods,
including robotics technology (with automation software therefor) and affinity
selection-mass spectrometry; and (vii) in vitro and in vivo test systems for
assessment of safety,
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efficacy and pharmacokinetics (including ADME characteristics). Notwithstanding
the foregoing, the Technology Transfer Field specifically excludes (a) peptides
and biological molecules; (b) all existing and future Chiron Combinatorial
Libraries and compounds contained therein; (c) Chiron information relating to,
or Chiron participation in, the application of any of the foregoing techniques
to the design, synthesis and/or characterization of specific compound sets or
libraries or individual compounds or materials, or the use or application
thereof; (d) medicinal chemistry; (e) specific assays and/or targets; and (f)
all biological and chemical results and data, including existing and future
Chiron databases.
The parties recognize that the definition of the Technology Transfer Field may
evolve over the five years following the date of this Agreement. The precise
extent of the definition of the Technology Transfer Field in the future, and the
decision of whether any particular invention or technology of either party is
Chiron Licensed Technology or a Chiron Licensed Technology Improvement, on the
one hand, or Ciba Licensed Technology or a Ciba Licensed Technology Improvement,
on the other hand, will be based on the following principles:
1. The Chiron technology which is within the Technology Transfer Field as
of the date of this Agreement is described in Exhibit B.
2. In the absence of agreement to the contrary, neither the Technology
Transfer Field nor the licenses granted under Sections 3.5.1 or
3.5.2 shall be deemed to cover, or allow either party access to
the other party's technology other than Combinatorial Technology
based research and development techniques.
3. On the other hand, both parties intend that the licenses granted under
Sections 3.5.1 and 3.5.2 will provide each party with access to
technologies of the other party (the "licensor") which both (i)
become a routine part of the licensor's Combinatorial Technology
based research and development techniques, such routine use not
to be artificially delayed, and (ii) the Steering Committee
determines are necessary or important to maintain the
Combinatorial Technology program of the licensor at the state of
the art.
1.31 "THIRD PARTY EXCLUDED TARGETS" means, for the purposes of Article 4 only,
all Targets for which, as of the time of any relevant decision hereunder
relating to Third Party Excluded Targets, Chiron has an obligation to a third
party, as further described below. Initially, the Third Party Excluded Targets
shall be those Targets identified in Exhibit A. Chiron shall have the right, at
any time, immediately on written notice to Ciba, to amend Exhibit A by adding as
additional Third Party Excluded Targets those Targets as to which Chiron (i) has
granted rights to any third party; or (ii) is engaged in active negotiations
with a third party which have resulted in an agreed upon term sheet. Targets to
which the foregoing criteria no longer apply shall be deleted.
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1.32 "TRANSFER PROJECT TEAM" means a project team to be established pursuant to
Section 3.1.4 hereof.
2 STEERING COMMITTEE
2.1 The parties will establish a Steering Committee for the purposes of
supervising the Technology Transfer, implementation of the technology
development plans and resolving any conflicts arising in the course of
the development and the Target Collaboration. The Steering Committee
shall have such even number of members as the parties shall agree, half
of the members being appointed by each party, with each of Chiron and
Ciba having one vote. In the event of deadlock on any issue, such issue
shall be referred for decision to the Science Committee.
2.2 The Steering Committee shall monitor the progress of the Technology
Transfer, technology development plans and the Target Collaboration on a
regular basis and shall have the power to alter the Technology Transfer
timetable, technology development plans and the Target Collaboration as
necessary from time to time. The Steering Committee shall meet not less
than twice per year, and the location of such meetings shall alternate
between Emeryville and Basel, all unless otherwise agreed by the parties.
3 TECHNOLOGY TRANSFER ARRANGEMENTS
3.1 TRANSFER OF TECHNOLOGY
3.1.1 Attached hereto as Exhibit B is a summary description of the
technology owned by Chiron within the Technology Transfer Field as of the
date of this Agreement.
3.1.2 Ciba will notify Chiron as soon as practicable which of such
technology it wishes to license. It is acknowledged and agreed that each
such notification need not be comprehensive, and that Ciba may call for
additional technology it wishes to license from Chiron by serving notice
on Chiron specifying the additional technology required at any time
during the five years following execution of this Agreement. (The
information specified in such notices shall determine which technology
within the Technology Transfer Field will be Chiron Licensed Technology
hereunder). As soon as practicable after the first notification the
parties will agree to a timetable for the transfer of sufficient
information and instruction to Ciba to enable it to practice the Chiron
Licensed Technology and the manner in which such information is to be
transferred (i.e., visits by Chiron personnel to Ciba's premises or vice
versa).
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The goal of the parties is to cause Ciba to be fully informed and able to
practice the Chiron Licensed Technology not later than [CONFIDENTIAL
TREATMENT REQUESTED] from the date on which the relevant Chiron
Licensed Technology was first identified by Ciba and notified to Chiron.
Chiron agrees to devote the FTE effort required pursuant to Section 3.1.5
to the accomplishment of such goal and the goal regarding installation of
equipment during such period, as set forth in Section 3.1.3.
3.1.3 Chiron will supply Ciba with a list of the equipment which in Chiron's
view will be required by Ciba to enable Ciba to practice the Chiron
Licensed Technology and to conduct Ciba's activities pursuant to the
Technology Improvement Collaboration and the Target Collaboration. Ciba
will be responsible for obtaining all equipment, and for the assembly and
installation of such equipment as is purchased. To the extent that any
such equipment has to be specially manufactured, Chiron will at Ciba's
expense either manufacture the same and sell it to Ciba at [CONFIDENTIAL
TREATMENT REQUESTED], or will procure its manufacture for Ciba by a third
party on terms to be agreed in advance with Ciba.
Within the limitations of the FTE commitment pursuant to Section 3.1.5,
Chiron will send suitably qualified and experienced employees to
Ciba's premises to assist Ciba in the installation of the equipment.
Chiron will also provide training for an agreed number of Ciba employees
in the use of the equipment.
Subject, in the case of Chiron, to the limitations of the FTE commitment
pursuant to Section 3.1.5, Chiron and Ciba both agree to use reasonable
commercial efforts to have the equipment installed and operational at
Ciba's premises not later than [CONFIDENTIAL TREATMENT REQUESTED] from
the date on which Chiron Licensed Technology is first identified pursuant
to Section 3.1.2, with a target of [CONFIDENTIAL TREATMENT REQUESTED]
following such date.
3.1.4 To facilitate the transfer of information regarding the Chiron
Licensed Technology pursuant to this Section 3.1, a project team ("the
Transfer Project Team") will be formed if either party so requests. The
members of the Transfer Project Team shall be selected on the basis of
their experience and suitability having regard to the nature of the
information to be transferred.
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3.1.5 To assist in the transfer of information regarding the Chiron Licensed
Technology pursuant to this Section 3.1, unless otherwise agreed in
writing, Chiron shall make available the services of [CONFIDENTIAL
TREATMENT REQUESTED] FTEs (being suitably qualified and experienced) in
each of the first and second years after execution of this Agreement and
[CONFIDENTIAL TREATMENT REQUESTED] FTEs in each of the third, fourth and
fifth years after execution of this Agreement, the cumulative number of
FTEs being not less than [CONFIDENTIAL TREATMENT REQUESTED] nor more than
[CONFIDENTIAL TREATMENT REQUESTED] over the 5 years. The actual FTE
commitment, within such ranges, shall be mutually determined by the
parties from time to time. Any balance of such FTE's not used in
connection with technology transfer may be used in the Target
Collaboration (without affecting the FTE commitments set forth in
Section 4.2.4) or in the Technology Improvement Collaboration, at Ciba's
election.
Ciba shall pay Chiron's fully-burdened cost of the provision of the FTEs
provided pursuant to this Section 3.1.5. The initial rate shall be U.S.
[CONFIDENTIAL TREATMENT REQUESTED] per FTE per year, this amount to be
increased annually, effective January 1 of each calendar year, based on
increases in the [CONFIDENTIAL TREATMENT REQUESTED] for the previous
calendar year. This payment compensates Chiron for all ordinary travel
and subsistence expenses incurred by such FTE's, but excludes expenses of
extraordinary travel or exceptionally long stays, which shall be
separately reimbursed in amounts to be mutually agreed upon by the
parties. For the purposes of this Section 3.1.5, travel which exceeds (i)
travel necessary to attend meetings of the Transfer Project Team and/or
Steering Committee, plus (ii) [CONFIDENTIAL TREATMENT REQUESTED] days per
year per FTE, shall be considered extraordinary travel or exceptionally
long stays.
The annual cost of such FTEs shall be due and payable in equal semi-annual
installments in advance, according to the following schedule. The first
such payment shall be based on [CONFIDENTIAL TREATMENT REQUESTED]
FTE's, and shall be due and payable upon execution of this Agreement, to
cover the FTE cost through December 31, 1995, on a prorated basis.
Thereafter, FTE payments for each semi-annual period shall be due and
payable on each January 15 and July 15 until the end of the fifth year
following execution of this Agreement, the final payment also being
prorated.
If the level of effort by Chiron is less than an average, on an annual
basis, of the number of FTE's required and funded pursuant to this
Section 3.1.5, Ciba will be entitled to additional FTE effort in
subsequent semi-annual periods, such that the required annual average is
restored. Conversely, if the average annual level of effort by Chiron
exceeds the number of FTE's required and funded pursuant to this Section
3.1.5, Chiron will be entitled to reduce the FTE effort in subsequent
semi-annual periods, such that the required annual average is restored.
From time to time during the five years following the execution of this
Agreement, each party shall be entitled, at its own expense, to locate an
agreed number of its employees at the premises of the other party, for
such periods as may be agreed, for the purposes of the transfer of
information regarding the Chiron Licensed Technology and Chiron Licensed
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Technology Improvements, on the one hand, and the Ciba Licensed
Technology and Ciba Licensed Technology Improvements on the other hand.
All such visits shall be subject to the confidentiality obligations set
forth in Article 9.
3.1.6 Attached hereto as Exhibit C is a complete list of the Chiron patents
which are available for license hereunder, whether as part of the
Technology Transfer Field or pursuant to Section 3.2.3, as of the date of
execution of this Agreement. Chiron will update this list once every
year during the term of this Agreement.
3.1.7 Although divisions of Ciba other than the Pharma Division as well as
corporate units of Ciba may be involved in the transfer of information
regarding the Chiron Licensed Technology, the prime point of contact
within Ciba shall be the Pharma Division. Ciba will be solely
responsible for transferring such information and technology to, and
acquiring and installing equipment for, its other divisions and corporate
units.
3.1.8 In consideration of the licenses granted pursuant to Section 3.5,
Ciba will pay Chiron the sum of Twenty-six Million Dollars ($26,000,000),
payable as follows:
$5,500,000 upon execution of this Agreement;
[CONFIDENTIAL TREATMENT REQUESTED] upon the first anniversary of the
execution of this Agreement;
[CONFIDENTIAL TREATMENT REQUESTED] upon the second anniversary of the
execution of this Agreement;
[CONFIDENTIAL TREATMENT REQUESTED] upon the third anniversary of the
execution of this Agreement;
[CONFIDENTIAL TREATMENT REQUESTED] upon the fourth anniversary of the
execution of this Agreement;
and
[CONFIDENTIAL TREATMENT REQUESTED] upon the fifth anniversary of the
execution of this Agreement.
3.1.9 Chiron will keep records of the time spent by its FTEs pursuant to
this Section 3.1, as well as pursuant to Sections 3.2 and 3.3, including
the transfer of information relating to Chiron Licensed Technology
Improvements. Ciba shall have the right to have these records audited in
the same manner as is set forth in Section 7.4. Chiron will report the
level of FTE effort to Ciba on a semi-annual basis.
3.1.10 As soon as practicable following execution of this Agreement, Ciba
will inform Chiron of the Ciba Licensed Technology available for
license to Chiron hereunder. The parties will mutually arrange for
transfer of the Ciba Licensed Technology to Chiron as part of the
technology transfer process pursuant to this Section 3.1.
3.2 IMPROVEMENTS AND ACQUIRED TECHNOLOGY
3.2.1 In connection with the licenses granted pursuant to Section 3.5, each
party will keep the other informed during the five years following the
execution of this Agreement of all Chiron Licensed Technology
Improvements and all Ciba Licensed Technology Improvements, respectively.
Pursuant to Section 1.30, each party will keep the other
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informed of developments which may cause the definition of the Technology
Transfer Field to expand, and of technology of the informing party which
may become Chiron Licensed Technology or Ciba Licensed Technology,
respectively, in the event of such an expansion of such definition. The
parties will develop methods for effectively exchanging information about
improvements, which will include consideration of such matters at the
regular meetings of the Transfer Project Team and Steering Committee.
Through the Steering Committee, the parties will keep appropriate records
to identify the Chiron Licensed Technology Improvements and the Ciba
Licensed Technology Improvements. Methods of exchanging information may
also include visits pursuant to Section 3.1.5 (last paragraph), seminars
or other scientific exchanges.
3.2.2 In the event that (i) either party currently holds technology which is
within the Technology Transfer Field but which is subject to obligations
to third parties; or (ii) either party acquires in the future, by
purchase, license or otherwise, Subject Technology, as defined below; or
(iii) either party acquires an Affiliate which holds Subject Technology;
in the case of (ii) or (iii), within the five years following the
execution of this Agreement; such party agrees, if so requested by the
other party, to include such technology within licenses granted pursuant
to Section 3.5.1 or 3.5.2, as the case may be, subject to the conditions
set forth in this Section 3.2.2. For the purposes hereof, Subject
Technology means technology within the Technology Transfer Field which,
in the case of Chiron, would have been Chiron Licensed Technology or
Chiron Licensed Technology Improvements had it been invented solely by
Chiron, and in the case of Ciba, would have been Ciba Licensed Technology
or Ciba Licensed Technology Improvements, had it been invented solely by
Ciba.
Such licenses shall be subject to the following conditions:
(i) Such acquiring party has the right to obtain such technology and to
license it to the other party hereunder; and
(ii) If the technology in question is acquired or licensed from a third
party, the license of such technology to the other party
hereunder shall be subject to all terms and conditions which are
imposed by such third party with respect thereto, including without
limitation payment of all royalties which are due and payable to
the third party with respect to the use of such technology by the
other party pursuant to this Agreement; and
(iii) In the case of acquisitions after the execution date hereof, if the
acquiring party has paid consideration to acquire the Affiliate or
the technology in question, prior to license of such technology
hereunder, the parties shall reasonably negotiate in good faith
compensation to the acquiring party which will result in a fair
sharing by the parties of the acquisition cost of the technology,
considering their respective interests therein.
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3.2.3 In the event that Ciba wishes to obtain sublicenses to [CONFIDENTIAL
TREATMENT REQUESTED] currently licensed or assigned to Chiron and subject
to obligations to third parties, the provisions of Section 3.2.2 shall
apply to such sublicenses.
3.3 JOINT IMPROVEMENT OF TECHNOLOGY
3.3.1 During the five (5) years following the execution of this Agreement,
Ciba and Chiron may cooperate with a view to the development of
improvements within the Technology Transfer Field, in accordance with
technology development plans to be agreed by the parties. Any such
projects which are mutually agreed upon shall, unless otherwise agreed,
be equally funded by the parties. Except as expressly set forth in this
Agreement, each party shall be free to use and to grant sublicenses under
any joint inventions resulting from such cooperation.
3.3.2 The Steering Committee may nominate one or more Development Project
Teams to implement the development plans.
3.3.3 For joint improvements of technology which are claimed in patent
applications or patents, the Steering Committee shall determine what
compensation, if any, shall be received by one party in the event that
the other party licenses any such joint improvement to a third party,
using the criteria set forth in Section 3.5.2(b) with respect to
compensation. Any dispute concerning such compensation shall be referred
to the Science Committee.
3.4 TITLE TO NEW INVENTIONS AND PATENT RIGHTS
3.4.1 Subject to the licenses granted pursuant to Section 3.5, as between
the parties hereto, ownership of new inventions within the Technology
Transfer Field, whether made individually or as part of the Technology
Improvement Collaboration pursuant to Section 3.3, shall be based on the
principles set forth below. For clarity of understanding, the parties
agree that new inventions pursuant to the Target Collaboration leading to
Compound Patents or Library Patents shall not be deemed within the
Technology Transfer Field, and shall be governed by Section 4.6, rather
than by this Section.
(a) If the new invention is a patentable improvement to the Chiron
Licensed Technology, such invention shall be assigned
to Chiron. The ultimate assignee of the invention shall be
determined by the parties, prior to filing a patent application if
reasonably possible, according to the following considerations:
(i) If the new invention was made solely by Chiron employees
or assignors, the assignment shall remain with Chiron.
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(ii) If the new invention was made solely by Ciba employees or
assignors, or jointly by Ciba employees and Chiron
employees and/or their respective assignors, the
ultimate assignee shall be determined according to
inventorship under U.S. patent law, unless the parties
agree that a different disposition should occur.
Ownership of patent applications filed outside the
U.S. shall be determined according to inventorship.
Inventorship shall be determined under U.S. patent
law.
(b) If the new invention is a patentable improvement to the Ciba
Licensed Technology, such invention shall be assigned to Ciba.
The ultimate assignee of the invention shall be determined by the
parties, prior to filing a patent application if reasonably
possible, according to the following considerations:
(i) If the new invention was made solely by Ciba employees or
assignors, the assignment shall remain with Ciba.
(ii) If the new invention was made solely by Chiron employees or
assignors, or jointly by Ciba employees and Chiron
employees and/or their respective assignors, the ultimate
assignee shall be determined according to inventorship
under U.S. patent law, unless the parties agree that a
different disposition should occur. Ownership of patent
applications filed outside the U.S. shall be determined
according to inventorship. Inventorship shall be
determined under U.S. patent law.
(c) If the new invention represents new technology, rather than an
improvement to the Chiron Licensed Technology or the Ciba
Licensed Technology as the case may be:
(i) If the invention is made by employees or assignors of one
party hereto (or its Affiliates), whether solely or
jointly with employees or assignors of a third party,
such invention shall be assigned to the party which is
the employer or assignee of the inventor (subject to such
ownership interests as may vest in any such third party).
(ii) If such invention is made jointly by employees or assignors
of Chiron or its Affiliates, on the one hand, and by
employees or assignors of Ciba or its Affiliates, on the
other hand, such invention shall be assigned to the
parties jointly.
(iii) Inventorship shall be determined in accordance with United
States Patent Law.
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(d) For the purposes of this Section 3.4.1, an "assignor" of a party is an
individual under an obligation to assign patent rights to that
party, e.g., a consultant retained by that party.
3.4.2 Chiron shall have the sole right to file, maintain and prosecute
patents with respect to the Chiron Licensed Technology and with respect to
inventions or discoveries finally assigned to Chiron. Chiron agrees to
keep Ciba reasonably informed as to the status of the Chiron Licensed
Technology Patents.
3.4.3 Ciba shall have the sole right to file, maintain and prosecute patents
with respect to Ciba Licensed Technology and with respect to inventions or
discoveries finally assigned to Ciba. Ciba agrees to keep Chiron
reasonably informed as to the status of the Ciba Licensed Technology
Patents.
3.4.4 In the case of an invention or discovery owned jointly by the parties,
the Steering Committee shall decide which party shall be responsible for
filing the patent application(s), if any, in respect thereof. Joint
patents shall be the joint property of both parties, who shall share the
costs of filing applications and of maintenance.
3.5 TECHNOLOGY LICENSES AND OPTIONS
3.5.1 Subject to the terms, conditions and limitations of this Agreement,
Chiron hereby grants to Ciba a perpetual, worldwide, non-exclusive,
royalty-free license to use internally, including use by Ciba in third
party collaborations, the Chiron Licensed Technology and the Chiron
Licensed Technology Improvements, including without limitation the Chiron
Licensed Technology Patents, for the purpose of research and development,
and to make, have made, use and sell products arising as a result of such
research and development, except that (i) such license shall be limited as
provided in this Section 3.5.1; and (ii) Ciba's rights with respect to
products arising from the Target Collaboration shall be governed by Article
4 hereof. Such license expressly excludes any right to make, have made, or
sell the Chiron Licensed Technology or the Chiron Licensed Technology
Improvements themselves as products for research use.
(a) For Chiron Licensed Technology Improvements which are not claimed in
Chiron Licensed Technology Patents, and are not otherwise
determined by the Steering Committee to merit restrictions
on sublicensing under the criteria set forth in Section 3.5.2(b),
and represent improvements to Ciba Licensed Technology only,
rather than to the Chiron Licensed Technology, Ciba shall have the
right to grant sub-licenses to such Chiron Licensed Technology
Improvements hereunder to third parties [CONFIDENTIAL TREATMENT
REQUESTED].
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(b) Save as mentioned at (a) in this Section 3.5.1, Ciba shall not have
the right to grant sublicenses under Chiron Licensed Technology and
Chiron Licensed Technology Improvements except to Affiliates of
Ciba, without the prior written consent of Chiron.
(c) Ciba shall not use the Chiron Licensed Technology or Chiron Licensed
Technology Improvements for research or development with respect to
the Restricted Targets, without Chiron's prior written consent,
subject to the following:
(i) [CONFIDENTIAL TREATMENT REQUESTED]
(ii) Nothing herein shall preclude Ciba from utilizing Ciba Licensed
Technology, or improvements invented by Ciba to the Ciba
Licensed Technology, or technology acquired by Ciba from third
parties, against the Restricted Targets.
(iii) Nothing herein shall preclude Ciba from utilizing, against the
Restricted Targets, technology which is within the public
domain, unless and until patents are issued covering such
technology.
(iv) As of the first anniversary of the execution of this Agreement,
the parties will mutually determine the impact of these
restrictions. If, as of such date, no Restricted Targets
remain, these restrictions shall be deemed to have no impact.
If, as of such date, any Restricted Targets remain, the parties
shall determine whether, as of such date, the restrictions
imposed under this Section 3.5.1(c) actually preclude the use
of Chiron Licensed Technology in an active research project of
Ciba against a Restricted Target as to which Ciba would, absent
such restrictions, utilize the Chiron Licensed Technology. If
not, the restrictions shall be deemed to have no impact. If
so, Chiron agrees that Ciba shall be entitled to a credit of
[CONFIDENTIAL TREATMENT REQUESTED] for each Restricted Target
as to which use of the Chiron Licensed Technology in an active
Ciba program is actually precluded, up to a maximum of
[CONFIDENTIAL TREATMENT REQUESTED].
Such credit shall be applied against the consideration payable by
Ciba pursuant to Section 3.1.8. If there is one Restricted
Target resulting in such preclusion, such credit shall be
implemented by reducing the payment due upon [CONFIDENTIAL
TREATMENT REQUESTED] of this Agreement to [CONFIDENTIAL
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TREATMENT REQUESTED]. If there are two or more Restricted
Targets resulting in such preclusion, the payment due upon
[CONFIDENTIAL TREATMENT REQUESTED] of this Agreement shall be
reduced to [CONFIDENTIAL TREATMENT REQUESTED] and, the payment
due upon [CONFIDENTIAL TREATMENT REQUESTED] of this
Agreement shall be reduced to [CONFIDENTIAL TREATMENT
REQUESTED]. Except as provided herein, all consideration for
the licenses granted in this Section 3.5 shall remain payable
as provided in Section 3.1.8.
3.5.2 Subject to the terms, conditions and limitations of this Agreement,
Ciba hereby grants to Chiron a perpetual, worldwide, non-exclusive license
to use internally, including use by Chiron in third party collaborations,
the Ciba Licensed Technology and the Ciba Licensed Technology Improvements,
including without limitation the Ciba Licensed Technology Patents, for the
purpose of research and development, and to make, have made, use and sell
products arising as a result of such research and development, except that
Chiron's rights with respect to products arising from the Target
Collaboration shall be governed by Article 4 hereof. Such license
expressly excludes any right to make, have made, or sell the Ciba Licensed
Technology or the Ciba Licensed Technology Improvements themselves as
products for research use.
(a) For Ciba Licensed Technology or Ciba Licensed Technology Improvements
which are not claimed in Ciba Licensed Technology Patents
and are not otherwise determined by the Steering Committee to
merit compensation or restrictions on sublicensing under the
criteria set forth in Section 3.5.2(b), Chiron shall have the
right to grant sublicenses to such Ciba Licensed Technology or
Ciba Licensed Technology Improvements hereunder to third parties,
[CONFIDENTIAL TREATMENT REQUESTED].
(b) For Ciba Licensed Technology or Ciba Licensed Technology Improvements
which are claimed in Ciba Licensed Technology Patents, the
Steering Committee will determine whether the invention
merits restrictions on sublicensing and/or compensation to
Ciba, based on such factors as uniqueness, competitive
advantage, and commercial value. It is understood that the
fact that an invention is claimed in a patent application or
patent is not itself sufficient to justify either
restrictions on sublicensing or compensation. On an
exceptional basis, a series of non-patented inventions, when
taken and used together, may also be deemed by the Steering
Committee to merit restrictions on sublicensing and/or
compensation.
(c) Based on the criteria set forth in Section 3.5.2(b), the Steering
Committee may determine (i) that Chiron will not have the
right to grant sublicenses under the invention in question to
third parties, other than its Affiliates, without the prior
written consent of Ciba; or (ii) that Ciba is entitled to
reasonable compensation for Chiron's internal use and/or
sublicense of the invention in question, in which event,
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the amount of such compensation will be negotiated in good faith;
provided always that the [CONFIDENTIAL TREATMENT REQUESTED]
payable to Ciba for Chiron's internal use of Ciba Licensed
Technology or Ciba Licensed Technology Improvements hereunder
during the five years following the date of this Agreement shall
not exceed [CONFIDENTIAL TREATMENT REQUESTED]. Any dispute with
respect to any such determinations shall be referred to the
Science Committee for resolution.
3.5.3 The parties acknowledge that Ciba wishes to use the Chiron Licensed
Technology to independently design, synthesize and/or analyze new
Combinatorial Libraries, and to use such libraries and the compounds
contained therein without restriction. The parties further acknowledge
that, due to current commitments, and to potential future commitments which
Chiron is free to make, both internally and with third parties, as
reflected in Section 1.30, Chiron will not provide to Ciba any
Combinatorial Libraries or any assistance or collaborative effort in the
design or synthesis of libraries, except subject to restrictions as to
their use. As a result, and for clarity of understanding, the parties
agree as follows:
(a) The Chiron Licensed Technology and the Chiron Licensed Technology
Improvements will not include any Combinatorial Libraries
and Chiron will not provide Ciba with any assistance in designing
or synthesizing specific Combinatorial Libraries, except as part
of the Target Collaboration, and subject to all of the terms and
conditions thereof.
(b) Pursuant to the Target Collaboration, Chiron will provide
Combinatorial Libraries to Ciba, will assist Ciba in designing
Combinatorial Libraries, and will work cooperatively to design
and synthesize Combinatorial Libraries, all for use in the Target
Collaboration only.
(c) Each party agrees that it will not design or synthesize any
Combinatorial Libraries which it knows or has reason to know
duplicate Combinatorial Libraries provided or disclosed by the
other party for use in the Target Collaboration, except with the
prior written consent of the other party. In the event such
consent is granted, the grantee agrees to use such Combinatorial
Libraries only for the purposes of the Target Collaboration
pursuant to Article 4, except with the other party's prior
written consent and on terms to be negotiated in good faith.
Ciba further agrees not to utilize any Chiron or Joint
Combinatorial Libraries, or compounds included therein or
developed through the Target Collaboration, against Third Party
Excluded Targets. Use of Joint Libraries is further governed by
Section 4.8.3.
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4 TARGET COLLABORATION
The Target Collaboration shall commence upon Ciba's selection of the
initial Selected Targets ("the Commencement Date"), which shall not be later
than [CONFIDENTIAL TREATMENT REQUESTED] after the date of execution of this
Agreement. The Target Collaboration shall continue for three years
following the Commencement Date, extendable for up to two additional years
under the same FTE funding terms as are set forth in Section 4.2.4,
[CONFIDENTIAL TREATMENT REQUESTED].
4.1 TARGET SELECTION
4.1.1 As soon as practicable after execution of this Agreement, Ciba shall
provide to Chiron a list of Targets in which Ciba is interested, other
than Third Party Excluded Targets. The parties shall meet and discuss the
Targets on such list and the respective capabilities of the parties in
these areas, and shall together determine a group of potential Targets,
from which Ciba shall select two (2) initial Selected Targets. It is
acknowledged that as to Targets on which Chiron has done prior work which
the parties then agree will be used within the Target Collaboration, or as
to which the parties then agree that Chiron will provide proprietary
biology not generally available to researchers in the area, either of which
constitute additional value to the Target Collaboration beyond the value of
Chiron's Combinatorial Technology capabilities and Combinatorial Libraries,
Chiron will be entitled to reasonable compensation for the additional value
added. As part of the foregoing discussions, the parties will mutually
agree upon applicable compensation, if any, with respect to a Target prior
to Ciba's selection of that Target as a Selected Target.
4.1.2 Upon request by Ciba and receipt of the payments required pursuant to
Section 4.2.3 Chiron will provide Ciba with sufficient quantities of
existing Chiron Combinatorial Libraries for the purpose of screening
against the Selected Targets.
4.1.3 Chiron shall have no obligation to provide Ciba, for use in the Target
Collaboration, any Chiron Combinatorial Library developed by Chiron
jointly with a third party, or developed solely by Chiron but pursuant to
the terms of an agreement with a third party, or developed for Chiron's use
outside the Target Collaboration. Chiron Combinatorial Libraries
developed jointly with or under agreement with third parties will not be
available for use in the Target Collaboration unless such third party
consents, and shall then be subject to such additional terms and conditions
as may be imposed by the third party. Chiron will inform Ciba of any such
additional terms and conditions prior to the use of any such Chiron
Combinatorial Library hereunder.
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4.2 RESEARCH PROGRAM
4.2.1 The parties agree to enter into a research program to utilize
Combinatorial Libraries, including libraries designed pursuant to such
research program, to screen against the Selected Targets, to optimize hits
and to produce sets of compounds achieving Research Compound or above
status in the Target Collaboration Field. Once the Selected Targets have
been determined pursuant to Section 4.1, the parties agree that during the
term of the Target Collaboration they will collaborate exclusively with
each other in the Target Collaboration Field with respect to the Selected
Targets, subject to the following:
(a) The parties recognize that this Agreement is intended to focus on
compound discovery, optimization and development within the
Target Collaboration Field. The parties agree to include within the
Target Collaboration any internal programs or collaborations which
would otherwise constitute competing discovery and optimization
programs with respect to the Selected Targets within the Target
Collaboration Field. However, Ciba will not be precluded from
acquiring rights to and pursuing, independently of the Target
Collaboration, individual third party compounds against the Selected
Target which have already reached at least the Research Compound
Stage, provided that no data or information arising from the Target
Collaboration is used in connection with such development. In such
event, the Target Collaboration as to such Selected Target will
continue to be governed by all terms of this Agreement, including
without limitation the diligence obligations set forth in Section
4.3.10.
(b) Either party may from time to time wish to acquire technology or
collaborate with third parties within the Target Collaboration
Field to enhance the prospect of success and be included within
the Target Collaboration (e.g. with a university in the
development of an assay). Since such transactions may have
financial impact on, or affect intellectual property, confidential
information or product rights of, the other party hereunder, neither
party will enter into such a transaction without the approval of the
other party, which approval shall not be unreasonably withheld. If
one party bears the financial burden of such a third party
collaboration, the parties will reasonably discuss whether an
adjustment should be made to the compensation payable to such party
pursuant to Section 4.3.
(c) Nothing herein shall restrict either party from establishing programs
outside the Target Collaboration Field with respect to the same
Selected Targets, including for example and without limitation,
biological or gene therapy approaches to such Selected Targets.
(d) Both parties acknowledge that Chiron is currently party to, and may in
the future enter into additional, target collaborations with
third parties. Chiron may also enter into
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future transactions with third parties which involve technology
transfer independent of collaborations on specific targets. With
respect to any such arrangements, the parties understand as follows:
(i) Chiron will not provide third parties with Chiron Combinatorial
Libraries or licenses under Chiron Library Patents, or
actively participate with third parties in the design
of new Combinatorial Libraries or compounds, for use
with the Selected Targets during the term of the Target
Collaboration, or otherwise in violation of the licenses
granted pursuant to Section 4.7.1 hereunder. With respect to
target specific collaborations which Chiron enters into after
the execution date of this Agreement, Chiron will impose
restrictions on third party use of selectivity assays directed
toward Ciba's Selected Targets which are similar to the
restrictions set forth in Section 4.2.11(a).
(ii) However, Chiron will not be required to restrict future third
party recipients of technology transfer from utilizing
the transferred technology to design or synthesize
Combinatorial Libraries for use against any target, including
Selected Targets, provided that Chiron does not participate in
such design or grant licenses in violation of Section
4.2.1(d)(i).
(iii) In the course of target collaborations with third parties,
compounds may be identified against targets other than
Selected Targets, which compounds prove useful against the
Ciba Indications, as identified under Section 4.3. Chiron
shall not be required to restrict the ability of any third
party to pursue all indications of such compounds, despite the
fact that some overlap with the Ciba Indications may exist;
except in the event that the compound itself is licensed
exclusively to Ciba pursuant to Section 4.7.1(b).
(iv) Ciba acknowledges that Chiron and/or its Affiliate, Chiron
Mimotopes Pty Ltd, currently engage in the design and
sale of pins for use in organic chemistry, and will
continue to engage in such business, including
progressively newer generations of pins. Chiron
Mimotopes currently does, and will continue to, engage
in synthesis of peptides and other compounds based on
specifications provided by third parties. Chiron and
Chiron Mimotopes will not be required to impose any
target restrictions with respect to any such sales or
services.
4.2.2 The Target Collaboration shall be implemented by project teams
("Target Project Teams"), membership of which will be according to the
needs of the particular project. The leaders of the Target Project Teams
shall be nominated by the Steering Committee. In the
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event of deadlock on any matter the Target Project Teams shall refer such
matter to the Steering Committee.
With respect to the Target Collaboration, the Steering Committee shall function
as defined in Article 2, except that Ciba's views shall prevail, subject to
all other terms of this Article 4, in the selection of, replacement of, or
abandonment of, Selected Targets.
4.2.3 In consideration of the exclusive rights given to it with respect to
the Selected Targets Ciba shall make a once and for all payment to Chiron
of [CONFIDENTIAL TREATMENT REQUESTED] for each of the two initial
Selected Targets, ([CONFIDENTIAL TREATMENT REQUESTED] in total). This
amount shall be payable upon the Commencement Date.
4.2.4 In addition, Ciba shall pay Chiron's fully-burdened costs per year per
FTE actively engaged in the Target Collaboration. The initial rate shall
be [CONFIDENTIAL TREATMENT REQUESTED] per FTE per year, this amount to be
increased annually, effective January 1 of each calendar year, based on
increases in the [CONFIDENTIAL TREATMENT REQUESTED] for the previous
calendar year. Such indexing shall occur initially as of January 1, 1996,
regardless of whether payments pursuant to this Section 4.2.4 have then
occurred. This payment compensates Chiron for all ordinary travel and
subsistence expenses incurred by such FTE's, but excludes expenses of
extraordinary travel or exceptionally long stays, which shall be separately
reimbursed in amounts to be mutually agreed upon by the parties. For the
purposes of this Section 4.2.4, travel which exceeds (i) travel necessary
to attend meetings of the Target Project Team and/or Steering Committee,
plus (ii) [CONFIDENTIAL TREATMENT REQUESTED] days per year per FTE, shall
be considered extraordinary travel or exceptionally long stays.
Unless otherwise agreed in writing, Chiron shall make available an average of
[CONFIDENTIAL TREATMENT REQUESTED] FTEs per year for each of the two
Selected Targets. Such FTEs shall include a balanced group of Ph.D. or
equivalent and other scientists. For the avoidance of doubt, if research
effort on one of the Selected Targets is reduced or terminated before the
end of the Target Collaboration, the FTE's employed on that Target shall
be deployed on the remaining Selected Target or Targets for the remainder
of the Target Collaboration.
The annual cost of such FTEs shall be due and payable in equal semi-annual
installments in advance, on the following schedule. The first such payment
shall be due and payable upon the Commencement Date, and shall cover the
FTE cost from such date through the end of the then current semi-annual
period, on a prorated basis. Thereafter, FTE payments for each semi-annual
period shall be due and payable on each January 15 and July 15 for the
remainder of the term of the Target Collaboration the last payment also
being prorated.
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4.2.5 Ciba may elect to add up to two Selected Targets, increasing the total
number of Selected Targets to a maximum of four at any time. Collaboration
on any such additional Selected Targets shall continue for a minimum of two
years, and Ciba agrees to extend the Target Collaboration as necessary to
accommodate such requirement. The proposed additional Targets shall be
selected by Ciba in the same manner as is provided in Section 4.1.1 and
shall not be Third Party Excluded Targets. Ciba agrees to pay a one time
fee of [CONFIDENTIAL TREATMENT REQUESTED] per Target added. At the time
a Target is added, the parties shall mutually agree upon the number of
additional FTE's needed in connection with each such Target and the cost
thereof. Ciba agrees to pay for the FTE cost of, and Chiron agrees to
make available, such additional FTE's, all in the same manner as is set
forth in Section 4.2.4.
4.2.6 The parties agree to work on each Selected Target for a reasonable
period of time. Ciba may elect to abandon any of the Selected Targets at
any time during the term of the Target Collaboration for scientific,
technical or commercial reasons, on written notice to Chiron. Ciba shall
select a replacement Selected Target for each abandoned Target, to the
extent necessary to maintain at least two Selected Targets within the
Target Collaboration; provided that if a Selected Target is abandoned
within the last six months of the Target Collaboration, Ciba need not
select a replacement, so long as Ciba continues to pay for the full
[CONFIDENTIAL TREATMENT REQUESTED] FTE commitment pursuant to Section
4.2.4. Replacement Selected Targets will be selected in the same manner
as is provided in Section 4.1.1 and shall not be Third Party Excluded
Targets. Collaboration on any such replacement Selected Target shall
continue for a minimum of two years, and the collaboration shall be
extended as necessary to allow for such two year period. No further
payment shall be made by Ciba pursuant to Section 4.2.3 for a Target
selected to replace any Selected Target.
4.2.7 Ciba and Chiron shall cooperate in the use of assays developed prior
to or during the Target Collaboration by Ciba and/or Chiron for the
identification or further characterization of a compound or compounds for
the two Selected Targets.
Each party agrees not to use outside the Target Collaboration any assays
which have been independently developed by the other party outside the
Target Collaboration and provided for use in the Target Collaboration,
except with the prior written consent of the providing party and on terms
to be negotiated in good faith.
From time to time, Ciba may request Chiron to utilize the FTE's provided
pursuant to Section 4.2.4 to develop new assays with respect to the
Selected Targets. Chiron agrees to undertake such assay development
subject to availability of resources for such work. If such development
involves then existing proprietary biology of Chiron which adds value,
Chiron will be entitled to mutually agreed compensation for the value
added in the same manner as is provided in Section 4.1.1. New assays
developed as part of the Target Collaboration will
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be available to both parties for use outside the Target Collaboration,
without compensation to the other party except pursuant to the preceding
sentence.
4.2.8 The Target Project Teams shall meet as often as may be required for
the purposes of the collaboration but in any event not less than four times
per year, again unless otherwise agreed by the parties. Written reports of
such meetings and of the status of the individual projects shall be
submitted to the Steering Committee. Unless otherwise agreed, meetings
shall alternate between the relevant sites of Chiron and Ciba.
4.2.9 Chiron will keep records of the time spent by its FTEs on the Target
Collaboration. Ciba shall have the right to have these records audited, in
the same manner as is set forth in Section 7.4. Chiron will report the
level of FTE effort to Ciba on a semi-annual basis. During the course of
the Target Collaboration, Chiron will notify Ciba if it becomes apparent
that the level of effort at Chiron is expected to exceed the level required
under Section 4.2.4.
If the level of effort is less than an average, on an annual basis, of the
number of FTE's required pursuant to Section 4.2.4, Ciba will be
entitled to additional FTE effort in subsequent semi-annual periods,
such that the required annual average is restored. Conversely, if the
average annual level of effort by Chiron exceeds the number of FTE's
required and funded pursuant to Section 4.2.4, Chiron will be entitled to
reduce the FTE effort in subsequent semi-annual periods, such that the
required annual average is restored. At the end of the Target
Collaboration, the parties will restore any such imbalance between actual
and funded FTE's either through appropriate payments or refunds, or
through an extension of the Target Collaboration until the balance is
restored.
4.2.10 If a Selected Target is abandoned pursuant to Section 4.2.6, ownership
and all rights to all data and information resulting from the Target
Collaboration with respect to such abandoned Target shall be
determined as follows, subject to the provisions of Section 4.2.11:
(a) Either party shall be free to use, without further compensation
to the other, information generally applicable to
the abandoned Target or to multiple targets, such as assay
technology, animal models, etc. Either party shall also be
free to use information otherwise in the public domain.
(b) Chiron shall have the exclusive right to use all unpublished
compound specific information, including without limitation
bioactivity and profile information (collectively, the
"Compound Data") with respect to the abandoned Target,
subject to payment of a royalty to Ciba on any products
resulting from the use of such Compound Data, at a rate
between [CONFIDENTIAL TREATMENT REQUESTED], to be mutually
determined. Such rights shall include the patent licenses
granted pursuant to
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Section 4.7.2(c). Chiron shall have the right to use the
Compound Data to conduct research and development of such
products alone or with a third party. For the purposes of
Article 9 hereof, the Compound Data will be deemed
Proprietary Information of Chiron following the abandonment
of the Selected Target.
(i) From such time as Chiron elects to proceed with a third
party, Ciba shall have no right to resume research and
development using the Compound Data with respect to
the abandoned Target.
(ii) If Chiron is not proceeding with a third party and Ciba
wishes to resume research and development with respect
to the abandoned Target using Compound Data, Ciba will
have the following rights:
(aa) If Ciba wishes to resume within five (5) years after
the Commencement Date and Chiron has not
commenced its own research and development program
with respect to the abandoned Target, Ciba may add
the abandoned Target to the collaboration as a
Selected Target pursuant to Section 4.2.5, or may
replace another Selected Target with the abandoned
Target pursuant to Section 4.2.6.
(bb) If Ciba wishes to resume within five (5) years after
the Commencement Date and Chiron has commenced its
own research and development program with respect
to the abandoned Target, Ciba may buy in to a co-
development program with Chiron in the same manner
as is set forth in Section 4.3.6.
(cc) If Ciba wishes to resume more than five (5) years after
the Commencement Date, which period may be
extended as provided below, Ciba shall be free to
pursue the abandoned Target using the Compound
Data, subject to payment of a royalty to Chiron on
any products resulting from such information at a
rate between [CONFIDENTIAL TREATMENT REQUESTED],
to be mutually determined. If Chiron is then
pursuing the abandoned target, alone or with
third parties, Ciba will not be entitled to any
licenses under any patents covering the Compound
Data which have been assigned or exclusively
licensed to Chiron. If Chiron has also abandoned
the target at that point, Ciba will be entitled to
such licenses under such patents as will enable
Ciba to proceed, and Chiron will retain such
rights as
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will enable Chiron to resume its activity with
respect to such target in the future, unless
otherwise agreed by the parties at the time. The
five (5) year period referenced in this
subsection (cc) shall be reasonably extended if
the Selected Target is abandoned late in the
Target Collaboration, to allow Chiron reasonable
time to either commence its own activities with
respect to such target, or to seek a third party
collaborator.
4.2.11 The parties recognize that in the course of the collaboration, the
parties will test Compound Hits and potential Research Compounds in
assays directed toward Targets other than Selected Targets for
selectivity purposes.
(a) If the selectivity assay is directed toward a Third Party
Excluded Target, Ciba shall have the right to use
the results only for the purpose of determining selectivity
of its compounds against the Selected Target. If the assay
identifies activity against the Third Party Excluded Target,
the parties shall reasonably discuss whether Chiron will
have the right to use such results with its third party
collaborator in a research and development program against
the Third Party Excluded Target, subject to a reasonable
royalty to Ciba at a rate between [CONFIDENTIAL TREATMENT
REQUESTED]. In the absence of such an arrangement, neither
party shall have any rights to use the data in any program
directed against the Third Party Excluded Target.
(b) If the selectivity assay identifies activity against any Target
other than a Third Party Excluded Target, the
parties will consider whether such other Target
should be included within the Target Collaboration
as an added or replacement Target. If not, the
parties will mutually determine the respective
rights of either or both of them to use such
results in independent programs directed toward
such Target and the appropriate compensation
therefor, which shall consist of a reasonable
royalty at a rate between [CONFIDENTIAL
TREATMENT REQUESTED].
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4.3 RESEARCH COMPOUNDS AND DEVELOPMENT CANDIDATES
The provisions of this Section 4.3 shall apply only to compounds that
achieve Research Compound status or above within [CONFIDENTIAL
TREATMENT REQUESTED]years after the end of the Target Collaboration.
As to such compounds, the parties agree that product development and
commercialization rights will be allocated as follows:
4.3.1 For each of the Selected Targets, once Compound Hits have been
identified through the primary Target assay, Ciba will prepare a
preclinical research and development plan, including protocols and
timetables for profiling and other steps necessary to move Compound Hits
to the Research Compound stage in the indication(s) of primary interest
to Ciba (the "Ciba Indications"). The plan will be submitted to the
Steering Committee for information purposes. Based on the plan, the
Steering Committee will agree on the criteria for success, for the
purpose of determining which compounds will become available for Chiron
development pursuant to Section 4.3.3.
4.3.2 Compounds meeting the criteria for success determined under Section
4.3.1 will be available for development by Ciba. While the parties
anticipate that Ciba's development program will focus on the Ciba
Indications, Ciba shall have the right to fully develop any compound it
selects as an EDC for any indications except that Ciba agrees not to
pursue any compound arising from the Target Collaboration against the
indications set forth in Exhibit E without Chiron's prior written
consent.
4.3.3 Compounds which are not tested or do not meet the criteria for success
determined under Section 4.3.1 will become available for development by
Chiron in indication(s) (the "Chiron Indications") other than the Ciba
Indications, subject to the provisions of this Section 4.3. At its
meetings, the Steering Committee will review which compounds become
available for Chiron development pursuant to this Section 4.3.3. If
Chiron wishes to proceed with development of such compounds in the Chiron
Indications, Chiron will prepare a preclinical research and development
plan, including protocols and timetables for profiling and other steps
necessary to move Compound Hits to the Research Compound stage in the
Chiron Indications. Such plan will be submitted for information purposes
to the Steering Committee. Based on the plan, the Steering Committee
will agree on the criteria for success. Development rights to compounds
which do not meet the criteria for success under the Chiron plan shall be
subject to mutual agreement.
Ciba retains the right to continue to screen, in the Ciba Indications,
compounds which are available for Chiron development pursuant to this
Section 4.3.3.
4.3.4 Chiron agrees not to pursue regulatory approval of any compounds for
the same or overlapping indications to the Ciba Indications, as the Ciba
Indications are identified as of
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the earlier of [CONFIDENTIAL TREATMENT REQUESTED]. If the Ciba Indications
change after that point, the provisions of Section 4.3.6 shall govern.
Chiron shall have the right to fully develop any compound it selects as an
EDC for any indications other than the Ciba Indications identified as
provided in this Section 4.3.4.
The determination of whether Chiron Indications are the same or overlapping
with the Ciba Indications shall be made jointly by Ciba and Chiron, and
shall be based on all relevant information available at that time. Relevant
considerations include differences in Target subtype or isozyme, chemical
structure, pharmacology, mode of administration, therapeutic or toxicity
profile, or expected disease indications. Examples of anticipated
overlapping indications include the following, without limitation:
serotonin re-uptake inhibitors for anxiety and depression; estrogen
receptor antagonists for breast and ovarian cancer; estrogen replacement
for menopause and osteoporosis; ACE inhibitors for hypertension, congestive
heart failure and renal insufficiency.
4.3.5 The parties will communicate with each other as to the progress of
their respective development programs, and will share with each other the
results of such programs. To the extent that such programs continue during
the [CONFIDENTIAL TREATMENT REQUESTED] following the end of the Target
Collaboration, such communication shall also continue during that period;
and the Steering Committee will continue to meet during that period as
necessary to carry out the provisions of this Section 4.3.
4.3.6 If Chiron is developing a compound for Chiron Indications pursuant to
Section 4.3.3, and Ciba, as a result of its continued testing in the Ciba
Indications, determines that it is also interested in developing such
Chiron compound for Ciba Indications, or if it becomes apparent through
other available data that the Chiron compound also has utility in the Ciba
Indications, Ciba has the right to buy in to a co-development program with
Chiron with respect to such compound. Unless otherwise agreed, the parties
will then proceed with a joint development program with further costs
shared equally, 50/50 profit sharing, and shared marketing rights, all on
commercially reasonable terms to be negotiated by the parties.
Ciba may exercise this buy in right at any time prior to [CONFIDENTIAL
TREATMENT REQUESTED] at a mutually agreed upon buy in price, to be
determined based upon each party's investment in the research and
development of such compound to the date of buy in, investment by
either party in generating preclinical and clinical data with respect
to other compounds that is useful in the development of such compound,
the risk assumed by each party to such date, and the market potential
likely to result from each party's indication rights.
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4.3.7 If Chiron wishes to engage a partner to develop any compound under
this Section 4.3, Chiron agrees to offer Ciba the right of first
negotiation to co-develop such compound.
4.3.8 (a) Ciba shall make a milestone payment of [CONFIDENTIAL TREATMENT
REQUESTED] on [CONFIDENTIAL TREATMENT REQUESTED].
(b) For Ciba EDCs, which are developed exclusively by Ciba, the following
milestone payments shall be made by Ciba to Chiron:
- [CONFIDENTIAL TREATMENT REQUESTED]
and
- [CONFIDENTIAL TREATMENT REQUESTED]
For clarity of understanding, the milestones referred to in Section
4.3.8(a) and (b) shall each be payable only once for each
compound; such that the maximum aggregate milestone payments for a
single compound will be [CONFIDENTIAL TREATMENT REQUESTED].
(c) Chiron will not be required to pay milestones with respect to its
EDCs or Chiron Products.
(d) For each Ciba Product, Ciba shall pay to Chiron royalties on Net
Sales made by Ciba, its Affiliates or licensees, at the rate
of [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales if aggregate
annualized worldwide Net Sales for that Ciba Product do not
exceed [CONFIDENTIAL TREATMENT REQUESTED], and [CONFIDENTIAL
TREATMENT REQUESTED] of Net Sales if aggregate annualized
worldwide Net Sales for that Ciba Product exceed
[CONFIDENTIAL TREATMENT REQUESTED].
For Chiron Products, Chiron shall pay to Ciba royalties at the rate
of [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales made by
Chiron, its Affiliates or licensees.
In the event that, on a country by country basis, a Ciba Product or
a Chiron Product is not covered by a patent which prevents the
lawful manufacture, use or sale of such product by a third party,
or the relevant patent has expired, the royalties otherwise
payable hereunder with respect to the sale of such Ciba Product
or Chiron Product in such country shall be reduced by
[CONFIDENTIAL TREATMENT REQUESTED].
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Should either party have to pay royalties to a third party under an
issued valid claim of a third party patent which is infringed
by the manufacture or sale of a Ciba Product or a Chiron
Product, including royalties payable to third parties pursuant
to Sections 3.2.2, 3.2.3 or 4.1.3, [CONFIDENTIAL TREATMENT
REQUESTED] of the royalties payable to such third party shall be
deducted from royalties due to Ciba or Chiron hereunder,
provided, however, that in no event shall the aggregate
reductions in royalties arising from this paragraph and/or the
preceding paragraph result in royalties on a Ciba Product of
less than [CONFIDENTIAL TREATMENT REQUESTED] of Net Sales if
aggregate annualized worldwide Net Sales of that Ciba Product
do not exceed [CONFIDENTIAL TREATMENT REQUESTED] or less than
[CONFIDENTIAL TREATMENT REQUESTED] of Net Sales if aggregate
annualized worldwide Net Sales exceed [CONFIDENTIAL TREATMENT
REQUESTED], or in royalties on Chiron Products of less than
[CONFIDENTIAL TREATMENT REQUESTED] of Net Sales.
Royalties shall be paid until expiry of the patents on a country by
country basis or for [CONFIDENTIAL TREATMENT REQUESTED] from the
first commercial launch in each country, whichever is longer.
If "off-label" prescribing or administration of a Chiron Product or
a Ciba Product should result in a significant loss of revenue to
the other party with respect to its products developed hereunder,
the parties agree to meet and discuss whether adjustments to
royalties on either product are appropriate.
4.3.9 For the purposes of this Section 4.3, a Ciba Product or a Chiron
Product includes all products containing the same active compound, or a
compound which is a derived from the active compound (such as a different
salt, ester, crystal form or the like), regardless of other differences,
such as dose, dosage form, indication and the like.
4.3.10 Unless the parties are engaged in co-development of a compound, each
party agrees to use commercially reasonable diligence to develop and
commercialize at [CONFIDENTIAL TREATMENT REQUESTED] per Selected
Target, in the case of Ciba, and [CONFIDENTIAL TREATMENT REQUESTED]
in the case of Chiron. Each party will keep the other informed of
its development of products under this Section 4.3, not less
frequently once per year. In the event that Ciba fails to
diligently pursue development and commercialization of
[CONFIDENTIAL TREATMENT REQUESTED] per Selected Target, Ciba
shall either abandon such Selected Target pursuant to Section 4.2.6,
or invite Chiron to participate in the co-development of compound(s)
for such Selected Target. In the event that Chiron fails to pursue
diligently the development and commercialization of [CONFIDENTIAL
TREATMENT REQUESTED] Chiron shall either abandon such product or
invite Ciba to participate in co-development of compound(s) for such
Selected Target.
4.4 COMPOUNDS NOT ACHIEVING RESEARCH COMPOUND STATUS
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The arrangements set out in Section 4.3 shall not apply to any compounds
that do not achieve Research Compound status or above by the end
of the [CONFIDENTIAL TREATMENT REQUESTED] period following the end of
the Target Collaboration. At the end of such [CONFIDENTIAL TREATMENT
REQUESTED] period, the parties will meet and inventory all compounds
at or near Research Compound stage or above, and the indications
thereof, being pursued by either party under this Agreement at that
time. Either party will be free to develop and commercialize any
compounds arising from this Collaboration which are not at least at
or near Research Compound stage at the end of such [CONFIDENTIAL
TREATMENT REQUESTED] period, without royalty or milestone obligations
to the other party; provided that (i) Ciba agrees not to pursue such
compounds for Third Party Excluded Targets identified at the time of
such inventory; and (ii) for an additional [CONFIDENTIAL TREATMENT
REQUESTED], neither party will pursue any such compounds for any
indications of compounds being pursued by the other party under this
Agreement, as identified in such inventory.
4.5 PRODUCTS DEVELOPED INDEPENDENTLY OF THE TARGET COLLABORATION
The provisions of this Article 4 shall not apply to any compounds developed
independently by Ciba, by Chiron or by a third party, prior to or
after the term of the Target Collaboration, or during such term to the
extent permitted under Section 4.2.1, so long as such independent
development is without the use of data or information arising from the
Target Collaboration.
4.6 TITLE TO NEW INVENTIONS AND PATENT RIGHTS
4.6.1 New inventions and discoveries shall be owned as follows:
(a) All Compound Patents based on inventions or discoveries made pursuant
to the Target Collaboration shall be owned [CONFIDENTIAL TREATMENT
REQUESTED]. Each party shall require its employees, agents, and
consultants to assign any such inventions [CONFIDENTIAL TREATMENT
REQUESTED], as of the date the invention was made.
(b) Library Patents with respect to Chiron Combinatorial Libraries shall
be owned by Chiron; Library Patents with respect to Ciba
Combinatorial Libraries shall be owned by Ciba; and Library Patents
with respect to Joint Combinatorial Libraries shall be owned by the
parties jointly.
(c) All inventions or discoveries made pursuant to the Target
Collaboration which do not result in Compound Patents or Library
Patents, but are inventions within the Technology Transfer Field
shall be governed by Section 3.4.1.
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(d) All inventions or discoveries which are not governed by Section 3.4.1
or by the remaining provisions of this Section 4.6.1 shall be
owned based on inventorship, as determined in accordance with
United States patent law.
4.6.2 Patents and patent applications shall be drafted, filed, prosecuted
and maintained by the party owning the patent rights. The parties shall
agree which party is to draft, file, prosecute and maintain joint patents
on a case-by-case basis. In all cases, each party shall keep the other
party informed as to the status and progress of all relevant patents and
patent applications; and shall draft, file, prosecute and maintain joint
patents and patent applications in consultation with the other party.
4.6.3 The parties shall be jointly responsible for all expenses associated with
the filing, prosecution and maintenance of joint patents, including
Compound Patents.
4.7 LICENSES
4.7.1 Subject to the terms and conditions of this Agreement, Chiron hereby
grants the following licenses to Ciba:
(a) A worldwide exclusive license, without right to sublicense, during
the term of the Target Collaboration, under Chiron
Library Patents and Chiron know-how and trade secrets relating to
Chiron Combinatorial Libraries, to screen Chiron Combinatorial
Libraries against the Selected Targets. Such license shall
automatically terminate as to Selected Targets which are
abandoned by Ciba.
(b) A worldwide exclusive license under Chiron's interest in Compound
Patents to develop, make, have made, use and sell Ciba
Products. Ciba shall have the right to grant sublicenses under
such license to Affiliates of Ciba, and to third parties;
provided that Ciba's rights to sublicense the manufacture or sale
of Ciba Products to third parties shall be subject to the terms
and conditions of the Cooperation Agreement.
4.7.2 Subject to the terms and conditions of this Agreement, Ciba hereby
grants the following licenses to Chiron:
(a) A worldwide, non-exclusive license, without right to sublicense,
during the term of the Target Collaboration, under Ciba Library
Patents and Ciba know-how and trade secrets related to Ciba
Combinatorial Libraries, to screen Ciba Combinatorial Libraries
against Selected Targets pursuant to the Target Collaboration.
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(b) A worldwide exclusive license under Ciba's interest in Compound
Patents to develop, make, have made, use and sell
Chiron Products. Chiron shall have the right to grant
sublicenses under such licenses to Affiliates of Chiron, and to
third parties; provided that Chiron's rights to sublicense the
manufacture or sale of Chiron Products to third parties shall be
subject to the terms and conditions of the Cooperation
Agreement.
(c) With respect to Selected Targets abandoned by Ciba, Ciba shall
assign to Chiron its interest in any Compound Patents, use
patents or any other patents arising from the Compound Data to
Chiron. Chiron shall retain the exclusive right, under all such
patents, to make, have made, use and sell products directed
against the abandoned Target, with right to sublicense to Chiron
Affiliates or third parties, all in accordance with Section
4.2.10. In the event that compounds identified pursuant to the
Target Collaboration as active against the abandoned Target were
made by Ciba prior to the execution of this Agreement, Ciba shall
grant to Chiron a worldwide exclusive license to make, have made,
use and sell such compounds in Chiron Products against the
abandoned Target. Ciba shall retain rights to such compounds for
use other than against the abandoned Target.
4.8 USE OF COMBINATORIAL LIBRARIES
4.8.1 The parties acknowledge that the Chiron Combinatorial Libraries
screened pursuant to the Target Collaboration will also be screened by
Chiron, its Affiliates and contractors, and by third parties outside this
collaboration. The rights of the parties with respect to compounds
identified through this collaboration will be subject to rights arising as
a result of such use of the libraries outside this collaboration. The
parties agree that the determination of ownership, patent and license
rights to compounds contained in Chiron Combinatorial Libraries shall be
based on the first to invent the subject matter in question, as determined
under U.S. Patent Law. Except as expressly stated in Section 3.5 or
Section 4.7, no implied rights or licenses are granted hereunder to any
inventions or patent rights arising outside this Agreement, including
without limitation rights under dominating patent claims. The following
principles shall apply.
(a) Ciba agrees to notify Chiron in writing as soon as possible following
identification of any Compound Hit. Chiron shall be entitled to
rely on the content and timing of receipt of notices of
identification of compounds received from all users of Chiron
Combinatorial Libraries as evidence of which party is first to
invent and in determining whether conflicts exist.
(b) If, at any time, Chiron believes in good faith that a conflict exists
among parties who are each entitled to exclusive rights to
compounds contained in Chiron Combinatorial Libraries, with respect
to patent applications filed or to be filed by
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Xxxxxx, Xxxxxx shall notify each party involved of the existence of
the conflict, the claims of such party which are involved, and the
identity of (but not the specific compounds or claims of) the other
party. Ciba hereby consents to such notification under Article 9
hereof. Chiron shall not be required to take any action in filing
new patent applications or amending existing applications with
respect to the conflicting subject matter, except on instructions
approved by both parties to the conflict. However, Chiron shall
have the right, but not the obligation, to take such actions as
Chiron believes in good faith will protect the rights of both
parties to the conflict, pending receipt of such jointly approved
instructions (e.g. filing potentially conflicting applications,
combining conflicting subject matter into a CIP application, filing
continuations of applications to prevent double patenting rejections
of another application, etc.)
4.8.2 Ciba retains the right to use Ciba Combinatorial Libraries (and any
other libraries owned by Ciba) outside the Target Collaboration; and
Chiron retains the right to use Chiron Combinatorial Libraries (and any
other libraries owned by Chiron) outside the Target Collaboration, in
each case without restriction, except as expressly provided herein.
4.8.3 Each party shall have the right to use Joint Combinatorial Libraries
outside the Target Collaboration, subject to the following conditions:
(a) Ciba shall not use any Joint Combinatorial Library in connection
with Third Party Excluded Targets, determined as of the time of
creation of the Joint Library.
(b) In the event that either party (the "providing party") reasonably
believes that its strategic proprietary rights to components
which such party provided for a Joint Combinatorial Library would
be jeopardized by use of such library by a third party, the
providing party may preclude third party use of such Joint
Combinatorial Library, or the parts thereof containing such
proprietary component, without the prior consent of the providing
party. The providing party will notify the other party of any
such intended restrictions at the time of the design or
development of the Joint Combinatorial Library, and in any event
at the request of the other party prior to the use of the Joint
Combinatorial Library outside the Target Collaboration.
(c) In the event of use of a Joint Combinatorial Library outside the
Target Collaboration by one party, the parties shall reasonably
and mutually determine if the other party should be entitled to a
royalty on products arising from such use. Such royalty, if any,
shall be at a rate between [CONFIDENTIAL TREATMENT REQUESTED] of
Net Sales, to be mutually determined, based on such factors as
the uniqueness of the library or the proprietary nature of its
components. At the time of determination of the royalty rate,
the parties will also determine the time period during which use
of the Joint Library will result in a
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royalty on products arising from such use, which time period will
be reassessed by the parties three years following the end of the
Target Collaboration.
5 PATENT ENFORCEMENT
5.1 In general, the owner of any patent shall have the right to enforce such
patent against third parties at the owner's expense, and the owner shall
be entitled to all recoveries. In the case of jointly owned patents, the
parties shall mutually determine how to proceed.
5.2 Each party shall notify the other party of any third party infringement
activity of which it becomes aware; and each party shall reasonably
cooperate with the other party in connection with the enforcement of
patent rights pursuant to this Article 5.
6 INDEMNITY; NO WARRANTIES
6.1 In the event that a Ciba Product or a Chiron Product is developed solely by
Ciba or solely by Chiron, under the terms of this Agreement, or in the
event that either party develops a product outside this collaboration
under licenses granted under this Agreement, the developing party agrees
to indemnify, defend and hold harmless the non-developing party and its
Affiliates, and their respective officers, directors, shareholders, and
employees, from and against all claims, losses, costs, damages and
liability of any kind, including without limitation attorneys fees,
(collectively "Liabilities") arising in connection with the development,
manufacture, use or sale of such product, except for Liabilities arising
as a result of breach by the non-developing party of its obligations
under this Agreement, or any manufacturing, marketing or other agreement
with respect to the product in question. The indemnified party shall not
make any admission of liability nor take any other action which could
prejudice the defence of such claim or lawsuit by the indemnifying party.
6.2 In the event that a product is co-developed by both parties pursuant to
this Agreement, each party (the "indemnifying party") agrees to
indemnify, defend and hold harmless the other party and its Affiliates,
and their respective officers, directors, shareholders, and employees,
(collectively, the "indemnified party"), from and against all Liabilities
arising from the wilful misconduct, failure to comply with applicable
law, regulation or government order, or breach of this Agreement, or any
related agreements, by the indemnifying party in connection with the
development, manufacture, use or sale of such product.
In the event that any Liability arises in connection with the development,
manufacture, use or sale of such a product which is not covered by
the previous paragraph, the party sued shall be responsible for its own
defense at its own expense. Such party shall be entitled to deduct the
cost of such defense, as well as all damages or other amounts paid in
settlement or
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disposition of such matter, from Net Sales of the product in question
prior to the allocation of the profits between the parties.
6.3 In all cases, the indemnified party shall promptly notify the indemnifying
party of receipt of any claim or lawsuit subject to Section 6.1 or 6.2,
and shall cooperate with the indemnifying party in connection with the
investigation and defense of such claim or lawsuit. The indemnifying
party shall have the right to control the defense, with counsel of its
choice, provided that the indemnified party shall have the right to be
represented by advisory counsel at its own expense. The indemnifying
party shall not settle or dispose of the matter in any manner which could
affect the rights or liability of the indemnified party without the
indemnified party's prior written consent, which shall not be
unreasonably withheld.
6.4 EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
WARRANTY, AND EACH PARTY EXPRESSLY DISCLAIMS ALL DISCLAIMS ALL IMPLIED
WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO ANY COMBINATORIAL LIBRARIES OR OTHER
BIOLOGICAL OR CHEMICAL MATERIALS OR INFORMATION PROVIDED TO THE OTHER
PARTY PURSUANT TO THIS AGREEMENT.
Each party acknowledges that all Combinatorial Libraries and other
biological or chemical materials provided by the other party pursuant to
this Agreement are experimental and agrees to take reasonable
precautions to prevent personal injury, illness and/or property damage
with respect to its handling and use thereof.
7 PAYMENTS AND ACCOUNTING
7.1 All payments hereunder shall be made in U.S. Dollars.
7.2 Each party shall keep true and correct accounts of sales of all products in
respect of which royalties are payable to the other party pursuant to
this Agreement, and the calculation of Net Sales and royalties with
respect thereto, and shall deliver to the other party written statements
thereof in such form as both shall agree upon within sixty (60) days
following the end of each calendar quarter and at the same time shall pay
to the other party the amount of such royalties shown to be due.
7.3 All royalties shall be earned in the local currency of the country where
the applicable Net Sales are made, but shall be converted for payment
into U.S. Dollars, in accordance with the standard procedures used by the
paying party in converting currencies of worldwide product sales for its
products generally.
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If royalties cannot be remitted from a country, the parties will work
together to arrive at an equitable solution for paying such royalties
to the other party.
Any withholding or other tax that the paying party is required by law to
withhold and pay on behalf of the other party with respect to the
royalties payable to the other party under this Agreement shall be
deducted from said royalties and paid contemporaneously with the
remittance to the other party; provided, however, that in regard to
any tax so deducted, the paying party shall furnish the other party
with proper evidence of the taxes paid on its behalf.
7.4 Each party shall have the right to have an independent certified public
accountant of its own selection and at its own expense,
except one to whom the other party may have reasonable objection,
examine the relevant books and records of account of the other party
during reasonable business hours, to determine whether appropriate
accounting and payment have been made hereunder. Said independent
certified public accountant shall treat as confidential, and shall not
disclose to party requesting the audit, any other information not
pertaining to the royalty amounts payable under this Agreement. Such
examination can be undertaken at any time within two years after the
date on which such royalty amounts were due and payable.
8 PUBLIC ANNOUNCEMENTS
The parties will mutually agree on a press release to be issued upon
execution of this Agreement. Neither party shall make any subsequent
public announcement concerning the terms of this Agreement not
previously made public without the prior written approval of the other
party with regard to the form, content and precise timing of such
announcement, except such as may be required to be made by either party
in order to comply with applicable law, regulations or court orders.
Such consent shall not be unreasonably withheld or delayed by the other
party. Prior to any such public announcement, the party wishing to make
the announcement will submit a draft of the proposed announcement to the
other party in sufficient time to enable the other party to consider and
comment thereon. Nothing in this section shall preclude disclosures by
either party to third parties under confidentiality restrictions in
order to carry out the purposes of this Agreement or to define the scope
of rights which may be granted to a third party without violating this
Agreement.
9 CONFIDENTIALITY
9.1 Except as specifically authorized under the terms of this Agreement each
party shall, for the term of this Agreement and for five (5) years after
its termination for any reason whatsoever, treat any proprietary
information disclosed to it by the other party as strictly confidential,
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and shall not disclose such proprietary information to third parties or
use it for purposes other than those authorized herein.
Except as set forth in the exceptions hereinafter any information, data or
material, including without limitation, software, technology, business
plans or information, communicated to the other which is identified as
confidential, or which the other party has reason to believe is
confidential, will be deemed and treated as Proprietary Information.
Proprietary Information also includes proprietary chemical, physical or
biological materials exchanged pursuant to this Agreement. Access to such
Proprietary Information will be limited to those employees or consultants
of the party receiving such information or of such party's Affiliates or
sublicensees, who reasonably require such information in order to carry
out activities authorized pursuant to this Agreement. Such employees or
consultants will be advised of the confidential nature of the Proprietary
Information and the related confidentiality undertaking.
Proprietary Information shall not include, and the above confidentiality
undertaking shall in no event restrict or impair each party's right to
use or disclose any information which:
(a) at the time of disclosure is in the public domain or thereafter
becomes part of the public through no fault of the party receiving
such information;
(b) the party receiving such information can conclusively establish that
it was in its possession prior to the time of disclosure;
(c) is independently made available to the party receiving such
information by a third party who is not thereby in violation of a
confidential relationship with the other party; or
(d) the receiving party can establish was independently developed without
use of the Proprietary Information of the other party.
The receiving party shall not be restricted from disclosing such
information as is required to be disclosed by law, regulation, or court
or governmental order, provided that the receiving party reasonably
notifies the disclosing party prior to such disclosure of such
requirement.
Upon termination of this Agreement, and provided the Proprietary
Information is still of a confidential nature, the party recipient of the
Proprietary Information will upon request from the disclosing party
either return any such information or destroy the same.
9.2 Information which is developed in the course of the Target Collaboration,
and which is not within any of the exceptions to Proprietary Information
set forth in Section 9.1, may be used by the parties outside the Target
Collaboration as set forth in Article 4. To the extent
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permitted by Article 4, such information may be disclosed to third
parties, subject to confidentiality obligations not less restrictive than
those set forth in Section 9.1.
Neither party will publish or publicly disclose results arising from the
Target Collaboration without the prior consent of the other party, which
consent shall not be unreasonably withheld. Each party agrees to provide
to the other a copy of any proposed publication or public disclosure of
such results for review and comment, at least forty-five (45) days prior
to release for publication or disclosure.
10 TERM AND TERMINATION
10.1 The Target Collaboration shall have the term set forth in Article 4.
10.2 Unless terminated earlier under Section 10.3, this Agreement shall continue
in full force and effect until the expiration of all annual payment,
milestone or royalty obligations of either party under Articles 3 and 4,
and the expiration of all obligations with respect to co-development or
profit sharing under Article 4. Upon expiration of this Agreement under
this Section 10.2, the parties shall each have fully paid-up licenses,
respectively, under Sections 3.5.1, 3.5.2, 4.7.1(b) and 4.7.2(b) and (c);
and the provisions identified in Section 10.3(e) shall survive expiration
hereof.
10.3 (a) In the event of material breach of this Agreement by either party,
which is not cured within sixty (60) days following receipt of
written notice of the alleged default from the non-breaching party,
the matter shall be submitted for resolution to the chief executive
officers of each party.
(b) The parties acknowledge that under this Agreement, each party holds a
complex series of ongoing technology rights and licenses,
development rights and obligations, and economic rights and
obligations, the breach of which may not be adequately compensated
in monetary damages alone. The parties therefore agree that each
may be entitled to remedies in the nature of specific performance of
the obligations of the other.
(c) Each party further waives the right to terminate this Agreement in its
entirety in the event of breach by the other party, except
in the event that termination (i) is mutually agreed upon by the
parties, or (ii) is ordered by a court of competent jurisdiction,
after consideration of all relevant rights and obligations of the
parties under the Agreement, and the rights and remedies of the non-
breaching party in law or equity, including, without limitation,
the extent to which the non-breaching party can be adequately
protected through remedies other than complete termination of the
Agreement.
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(d) In the event of termination of this Agreement pursuant to this Section
10.3, unless otherwise specifically agreed or ordered
pursuant thereto, the following provisions shall survive
termination, together with any and all rights and obligations
accrued prior to the date of termination:
(i) To the extent Ciba has paid in full all of its obligations under
Article 3: Section 3.5.1;
(ii) To the extent applicable to any development candidates or
products which remain under development
or commercialization by either party following such
termination: Sections 4.3, 4.7.1(b), 4.7.2(b) and (c), and
7; and
(iii) In addition to those set forth in Section 10.3(d)(i) or (ii),
the following Sections shall survive any early termination
of this Agreement: 3.5.2 and the provisions identified in
Section 10.3(e) below.
(e) The following provisions shall survive any expiration or early
termination of this Agreement, together with any other obligations
of either party which have accrued as of the effective date of
termination or expiration: Sections 3.4, 3.5.3, 4.2.7, 4.2.10,
4.2.11, 4.4, 4.5, 4.6, 4.8, and Articles 5, 6, 8, 9, 10 and 11.
10.4 All licenses granted under this Agreement are deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of right to
"intellectual property" as defined in Section 101 of such Code. The
parties agree that the licensee may fully exercise all of its rights
and elections under the Bankruptcy Code. The parties further agree
that, in the event a licensee elects to retain its rights as a
licensee under such Code, the licensee shall be entitled to complete
access to any technology licensed to it hereunder and all embodiments
of such technology. Such embodiments of the technology shall be
delivered to the licensee not later than (a) the commencement of
bankruptcy proceedings against the licensor, upon written request,
unless the licensor elects to perform its obligations under this
Agreement, or (b) if not delivered under (a) above, upon the
rejection of this Agreement by or on behalf of the licensor, upon
written request.
10.5 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR
ANY CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES TO THE OTHER PARTY,
HOWEVER CAUSED, IN CONNECTION WITH THIS AGREEMENT; PROVIDED THAT
NOTHING IN THIS SECTION 10.5 SHALL LIMIT THE INDEMNIFICATION
OBLIGATIONS OF EITHER PARTY PURSUANT TO ARTICLE 6 AS TO CONSEQUENTIAL,
INCIDENTAL OR INDIRECT DAMAGES TO THIRD PARTIES FOR WHICH THE
INDEMNITEE MAY BE LIABLE.
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11 MISCELLANEOUS
11.1 Neither party shall have the right to assign its rights or obligations
under this Agreement to any third party other than an Affiliate of such
party without the prior written consent of the other party, which consent
shall not be unreasonably withheld. This Agreement shall be binding on,
and inure to the benefit of, the permitted successors and assigns of the
parties.
11.2 Pursuant to this Agreement, each party has certain rights to grant
sublicenses hereunder to Affiliates and, in some cases, to third
parties. In addition, it is contemplated that each party may wish to
involve one or more of its Affiliates in research and development
activities conducted by such party pursuant to this Agreement.
(i) Neither party shall transfer or disclose to any of its Affiliates (a)
any Proprietary Information of the other party, including,
without limitation, technology, improvements, Combinatorial
Libraries, or other chemical or biological materials, or (b) any
Joint Combinatorial Libraries, or (c) any data or information with
respect to, or arising from, any of the foregoing; unless such
Affiliate has agreed in writing to be bound by all of the terms and
conditions of this Agreement as though the Affiliate were a party
hereto.
(ii) All permitted sublicenses and/or assignments by either party of any of
its rights under this Agreement shall be subject to all of the
terms and conditions of this Agreement, which shall be binding on
the sublicensees and/or assignees.
11.3 The parties hereto are independent contractors. Nothing contained herein
shall constitute either party the agent of the other party for any
purpose whatsoever, or constitute the parties as partners or joint
venturers. Employees of each party remain employees of said party and
shall be considered at no time agents of or render a fiduciary duty to
the other party. Neither party hereto shall have any implied right or
authority to assume or create any obligations on behalf of or in the name
of the other party or to bind the other party to any other contract,
agreement or undertaking with any third party.
11.4 No amendment, waiver or modification of this Agreement shall be valid or
binding on either party unless made in writing signed by both parties.
The failure of either party to enforce any provision of this Agreement at
any time shall not be construed as a present or future waiver of such or
any other provision of this Agreement. The express waiver by either
party of any provision or requirement hereunder shall not operate as a
future waiver of such or any other provision or requirement.
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11.5 In the event that any provision in this Agreement shall be held to be
unlawful or invalid in any jurisdiction, the meaning of such provision
shall be construed to the greatest extent possible so as to render it
enforceable. If no such construction can render such provision
enforceable, it shall be severed, and the remainder of the Agreement
shall remain in full force and effect, only to the extent that such
remainder is consistent with the intentions of the parties as evidenced
by this Agreement as a whole. The parties shall use best efforts to
negotiate in good faith a reasonable substitute, valid and enforceable
provision effective in such jurisdiction.
11.6 Any notice required or permitted to be given by either party under this
Agreement shall be in writing, addressed, in the case of Chiron, to its
Chief Executive Officer, with copy to its General Counsel, and in the
case of Ciba, to its head of the Pharma Division, with copy to its
General Counsel, at the respective addresses of the parties shown in
the first paragraph of this Agreement, or such other address as may
from time to time by indicated in a notice given under this Section
11.5. All notices shall be sent by certified or registered first class
mail, telefax confirmed by certified or registered first class mail, or
personal delivery, and shall be effective on receipt at the address
referenced above.
11.7 Neither party will be deemed in breach of this Agreement as a result of
default, delay or failure to perform by such party which is due to
causes beyond the reasonable control of such party, including without
limitation, fire, earthquake, acts of God, severe weather, acts of war,
strikes, lockouts or other labor disputes, riots, civil disturbances,
actions or inactions of governmental authorities (except in response to
a breach by such party), or epidemics. In the event of any such force
majeure, the party affected shall promptly notify the other party, shall
use all reasonable efforts to overcome such force majeure, and shall
keep the other party informed with respect thereto.
11.8 All headings and captions used in this Agreement are for convenience
only, and are not intended to have substantive effect.
11.9 This Agreement may be executed by the parties in one or more identical
counterparts, all of which together shall constitute this Agreement.
11.10 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
11.11 This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof, and supersedes all previous
agreements, understandings and negotiations, whether oral or
written, with respect to such subject matter.
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Executed and effective as of the date first set forth above.
CIBA-GEIGY Limited
By: X. Xxxxxx By: R.E. Xxxxxx
------------------------- ---------------------------
Title: Head of Pharma Licensing Title: Division Counsel
------------------------- -------------------------
CHIRON CORPORATION
By: Xxxxxx Xxxx
---------------------------
Title: Vice President
-------------------------
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EXHIBIT A
THIRD PARTY EXCLUDED TARGETS
1 page
[CONFIDENTIAL TREATMENT REQUESTED]
EXHIBIT B
CHIRON TECHNOLOGY
17 pages
[CONFIDENTIAL TREATMENT REQUESTED]
EXHIBIT C
CHIRON COMBINATORIAL CHEMISTRY PATENTS
2 pages
[CONFIDENTIAL TREATMENT REQUESTED]
EXHIBIT D
RESTRICTED TARGETS
1 page
[CONFIDENTIAL TREATMENT REQUESTED]
EXHIBIT E
PROHIBITED INDICATIONS
1 page
[CONFIDENTIAL TREATMENT REQUESTED]
