1
Portions of this Exhibit 10.2 have been redacted and are the subject of
a confidential treatment request filed with the Secretary of the Securities and
Exchange Commission.
2
COLLABORATIVE RESEARCH, DEVELOPMENT, AND LICENSE AGREEMENT
This COLLABORATIVE RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT
("Agreement"), made as of February 12th, 1997, by and among SANKYO COMPANY,
LIMITED, a Japanese Corporation whose principal place of business is situated at
5-1, Xxxxxxxxxx-Xxxxxx, 0-xxxxx, Xxxx-xx, Xxxxx 000, Xxxxx ("SANKYO"), MRC
COLLABORATIVE CENTRE whose principal place of business is situated at 0-0
Xxxxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxx XX0 0XX, Xxxxxxx ("MRC CC"), and ONCOGENE
SCIENCE, INC., a Delaware corporation whose principal place of business is
situated at 000 Xxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, X.X.X.
("OSI").
WITNESSETH:
WHEREAS, OSI has certain proprietary technology for identifying the
effect of compounds on genes and gene products which is useful in the process of
developing products for the treatment of human diseases;
WHEREAS, MRC CC has expertise in the area of antiviral drug discovery
and, in particular, has developed the technology and skills (including animal
models), and has facilities to work with live viruses at containment levels 2
and 3, in order to discover and profile lead compounds; and
WHEREAS, SANKYO is a fully-integrated Japanese pharmaceutical company
which discovers, develops, manufactures, markets and sells pharmaceutical
products.
WHEREAS, SANKYO, MRC CC and OSI wish to collaborate in research to
identify and develop anti-influenza drugs.
3
NOW, THEREFORE, in view of the forgoing premises which are hereby
incorporated as part of this Agreement and in consideration of the mutual
covenants herein contained, the parties agree as follows:
1. Definitions
The following terms as used in this Agreement shall have the meanings
set forth in this Article:
1.1 "Affiliate" means, in respect of a party hereto, any corporation or
other legal entity owning, directly or indirectly, fifty percent or
more of the voting capital shares or similar voting securities of said
party; any corporation or other legal entity fifty percent or more of
the voting capital shares or similar voting rights of which is owned,
directly or indirectly, by said party; or any corporation or other
legal entity fifty percent or more of the voting capital shares or
similar voting rights of which is owned, directly or indirectly, by a
corporation or other legal entity which owns, directly or indirectly,
fifty percent or more of the voting capital shares or similar voting
securities of said party.
1.2 "Allocated Overhead" means the amount of overhead, including general
and administrative costs, determined in accordance with generally
accepted accounting principles, incurred by OSI or MRC CC, as the case
may be, and allocated to the Research Program in the same proportion
that the total man-hours of work performed in the Research Program
bears to the total man-hours of work performed in all OSI or MRC CC, as
the case may be, research programs, or
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such other customary allocation basis or overhead recovery basis that
may be agreed in writing between the parties.
1.3 "Approved Compound" means a Candidate Compound which satisfies the
Approved Compound Criteria and is designated as an Approved Compound by
the Research Committee pursuant to section 3.2.
1.4 "Approved Compound Criteria" means the detailed scientific and economic
criteria agreed upon by the Research Committee for determining whether
Compound is suitable for initiation of Phase I human clinical trials.
1.5 "Candidate Compound" means each Compound which the Research Committee
has determined satisfies the Candidate Compound Criteria and thus is
suitable for presentation to SANKYO for further preclinical studies.
1.6 "Candidate Compound Criteria" means the detailed scientific criteria
agreed upon by the Research Committee for determining whether a
Compound is suitable for initiation of further preclinical studies.
1.7 "Compound" means any compound or derivative thereof, the use of which
in connection with an Identified Target has been identified or
discovered in the course of conducting the Research Program.
1.8 "Confidential Information" means all information about any aspect of
MRC CC, OSI and SANKYO, as the case may be, which is disclosed by such
party (the "disclosing party") to another party (the "receiving party")
pursuant to this Agreement and designated "Confidential" in writing by
the disclosing party at the time of disclosure (or, if disclosed
orally, within ten (10) days thereafter) to the
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extent that such information as of the date of disclosure is not (i)
known to the other parties to this Agreement other than by virtue of a
prior or contemporaneous confidential disclosure by the disclosing
party or (ii) disclosed in the published literature, or otherwise
generally known to the public, or (iii) obtained from a third party
that has no obligation of confidentiality to the disclosing party in
respect of such information. Each party's Confidential Information
shall also include all Technology Improvements of such party.
1.9 "Contract Period" means the period for conducting the Research Program
defined in Article 2.6, unless earlier terminated as hereinafter set
forth in this Agreement, provided, however, such period shall not apply
to nor limit the term of the licenses granted SANKYO hereunder.
1.10 "Effective Date" means the date as of which this Agreement is made as
stated on page 1 hereof.
1.11 "Event of Termination" has the meaning set forth in Section 8.2.
1.12 "Field" means prevention and treatment of influenza and such other
disease targets in human patients as may be mutually agreed to by the
parties.
1.13 "Funding Payments" has the meaning set forth in Section 2.7.1.
1.14 "Identified Target" means a Target which has been the subject of
research carried out under the Research Program. The initial Identified
Targets are set forth in Schedule "A" and "B", as it may be modified
from time to time.
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1.15 "Internal Project Costing" shall mean OSI's or MRC CC's total actual
research costs, in carrying out the Research Program, plus Allocated
Overhead, plus Unallocated Overhead.
1.16 "Joint Technology Improvements" means Joint Technology Improvements as
defined in Section 1.33.
1.17 "License Agreement" means a license agreement as described in Section
3.4.1 with respect to an Approved Compound to be developed as a
Product.
1.18 "Materials" means the biochemical, biological or synthetic chemical
materials as described in section 2.10.4.
1.19 "MRC CC Technology" means Technology that is or was;
(a) developed by employees of or consultants to, MRC CC alone or
jointly with third parties, other than OSI or SANKYO, prior to the
Effective Date of this Agreement or in the course of activities not
related to the Research Program; or
(b) acquired by purchase, license, assignment or other means from third
parties by MRC CC prior to the Effective Date of this Agreement or
since that date that would not otherwise be part of Joint Technology
Improvements, but only to the extent that MRC CC is legally entitled to
disclose such acquired Technology and use it in the Research Program.
1.20 "Net Sales" means the actual gross sales amount of the Products sold by
SANKYO or any Affiliates or sublicensees of SANKYO to customers less
the following items;
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(a) Trade, cash and quantity discounts (including prime vendor rebates
actually allowed);
(b) Broker's or agent's commissions, if any, actually allowed or paid;
(c) Returns, allowances, free replacements and adjustments actually
granted customers;
(d) Freight insurance and other transportation costs;
(e) Taxes paid by SANKYO or any Affiliates or sublicensees of SANKYO in
association with the sale of the Products, tariffs, duties and other
similar governmental charge.
1.21 "OSI Technology" means Technology that is or was;
(a) developed by employees of or consultants to, OSI alone or jointly
with third parties, other than SANKYO or MRC CC, prior to the Effective
Date of this Agreement or in the course of activities not related to
the Research Program; or
(b) acquired by purchase, license, assignment or other means from third
parties by OSI prior to the Effective Date of this Agreement or since
that date that would not otherwise be part of Joint Technology
Improvements, but only to the extent that OSI is legally entitled to
disclose such acquired Technology and use it in the Research Program.
1.22 "Patent Rights" means the patent and patent applications owned or filed
by MRC CC, OSI and SANKYO, as the case may be ("MRC CC Patent Rights",
"OSI Patent Rights", and "SANKYO Patent Rights"), or jointly owned or
filed by MRC CC, OSI and/or SANKYO ("Joint Patent Rights"), both
foreign and domestic,
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now existing (except in the case of SANKYO) or hereafter arising (i) in
the course of conducting the Research Program or (ii) from the use of
or derived from drug discovery Technology developed in the course of
conducting the Research Program, which relate to the research,
development, manufacture, or composition, of Compounds and derivatives
thereof, or the use or sale of Compounds or Products, including,
without limitation, all substitutions, extensions, Supplementary
Protection Certificates, reissues, renewals, divisions, continuations,
continuations in part, utility models and certificates of invention
thereof.
1.23 "Person" means any individual, estate, trust, partnership, joint
venture, association, firm, corporation, company, or other legal
entity.
1.24 "Product" means (i) any pharmaceutical finished dosage forms which
contains a Compound or Compounds and/or (ii) any compound or compounds
sold for the treatment or prevention of any Influenza disease state and
such other disease state and such other disease targets in human
patients as may be mutually agreed to by the parties that employs
Patent Rights, OSI Technology, MRC CC Technology, SANKYO Technology and
OSI Technology Improvements, MRC Technology Improvements, SANKYO
Technology Improvements or Joint Technology Improvements.
1.25 "Quarterly Expense Report" has the meaning set forth in Section 2.7.2
hereof.
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1.26 "Research Collaboration" means the research collaboration among OSI,
MRC CC and SANKYO to discover and evaluate the Compounds and to develop
Products to be commercialized in the Territory pursuant to this
Agreement.
1.27 "Research Committee" has the meaning set forth in Section 2.9.
1.28 "Research Program" means the collaborative research program conducted
by SANKYO, MRC CC and OSI under this Agreement.
1.29 "SANKYO Technology" means Technology that is or was:
(a) developed by employees of or consultants to SANKYO alone or
jointly with third parties, other than OSI or MRC CC, prior to the
Effective Date of this Agreement or in the course of activities not
related to the Research Program; or
(b) acquired by purchase, license, assignment or other means from
third parties by SANKYO prior to the Effective Date of this Agreement
or since that date that would not otherwise be part of Joint
Technology Improvements, but only to the extent that SANKYO is legally
entitled to disclose such acquired Technology and use it in the
Research Program.
1.30 "Semi-Annual Expense Report" has the meaning set forth in Section 2.7.2
hereof.
1.31 "Target" means the biochemical processes in humans related to human
disease associated with the genes, gene products, receptors, peptides
and proteins.
1.32 "Technology" means and includes all tangible or intangible know-how,
trade secrets, inventions (whether or not patentable), data, clinical
and preclinical. results and any physical, chemical or biological
materials that pertain to Identified Targets, including all laboratory
notebooks, research plans, cultures, strains,
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vectors, genes and gene fragments and their sequences, cell lines,
hybridoma cell lines, monoclonal and polygonal antibodies, proteins and
protein fragments, non- protein chemical structures and methods for
synthesis, structure-activity relationships, computer models of
chemical structures, computer software, assay methodology, processes,
materials and methods for production, recovery and purification of
nature products, formulas, plans, specifications, characteristics,
equipment and equipment designs, marketing surveys and plans, business
plans, know-how, experience and trade secrets.
1.33 "Technology Improvements" mean any and all inventions, discoveries,
methods, ideas, works of authorship, know-how, show-how, data, clinical
and preclinical results, information, and any physical, chemical or
biological material, including any replication or any part of such
material, techniques and Technology, whether or not patentable or
subject to other forms of protection, which (i) are made, created,
developed, written, conceived, or reduced to practice, or which are
licensed or otherwise acquired from third parties (to the extent the
agreeing party is legally enabled to disclose and use the same in the
Research Program), in the course of, arising out of, derived from or as
a result of any party's research (a) in the course of conducting the
Research Program or (b) using drug discovery Technology developed in
the course of conducting the Research Program, and (ii) pertaining to
Identified Targets. Improvements includes all rights relating to the
protection of trade secrets and confidential information, and any right
analogues
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to those set forth herein, which relate to, are embodied in or are
appurtenant to such discoveries, methods, ideas, etc.
OSI, SANKYO and MRC CC shall each own the entire right, title, and
interest in and to any Technology Improvements made or discovered
solely by their respective employees (the "OSI Technology
Improvements," "SANKYO Technology Improvements" and "MRC CC Technology
Improvements") and shall own jointly all Technology Improvements made
or discovered jointly by employees of two or three of such parties (the
"Joint Technology Improvements"). Each party represents and agrees that
all employees and other persons acting on its behalf in performing its
obligations under this Agreement shall be obligated under a binding
written agreement to assign to such party or as such party shall
direct, all Technology Improvements made or developed by such employee
or other person. In the case of Joint Technology Improvements, OSI,
SANKYO and MRC CC agree to undertake to enforce such agreements
(including, where appropriate, by legal action) considering, among
other things, the commercial value of such Technology Improvements.
1.34 "Territory" means all countries throughout the world.
1.35 "Unallocated Overhead" those portions of overhead costs not allocated
to specific projects to be calculated at ten percent of the sum of the
actual research costs and the allocated overhead.
1.36 "Valid Claim" means a claim of an issued patent so long as such claim
shall not have been disclaimed by SANKYO, OSI and MRC CC, as the case
may be, or
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shall not have been held invalid in a final decision rendered by a
tribunal of competent jurisdiction from which no appeal has been or
can be taken.
2. Research Collaboration
2.1 Research Collaboration. The parties agree to undertake the Research
Collaboration pursuant to the terms of this Agreement.
2.2 OSI's Obligations. For purposes of the Research Collaboration, OSI
shall, in consultation with SANKYO, MRC CC and the Research Committee,
and in accordance with the research work plan and budget set forth on
Schedule "A" attached hereto, as updated and amended from time to time,
conduct the Research Program during the Contract Period. Upon SANKYO's
request, OSI shall transfer to SANKYO, free of charge, any and all
assay systems of screening elaborated by OSI under the Research Program
to have SANKYO perform its own screening tests for the Compounds
arising from SANKYO's library. OSI shall provide SANKYO with any
technical assistance, if necessary, to enable SANKYO to do such
screening tests effectively. OSI shall only be obligated to provide the
initial Materials, including necessary reagents, cell lines, clones and
antibodies as described in Schedule "C" (subject to amendment as
mutually agreed upon by the parties hereto), so as to enable SANKYO to
commence screening. Thereafter, SANKYO shall furnish such Materials at
its own expense. The rights granted hereunder shall not include any
rights to the robotics technology used herein.
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2.3 MRC CC's Obligations. For purposes of the Research
Collaboration, MRC CC shall, in consultation with SANKYO, OSI
and the Research Committee, and in accordance with the
research work plan and budget set forth on Schedule "B"
attached hereto, as updated and amended from time to time,
conduct the Research Program during the Contract Period. This
will include the evaluation of Compounds in cell cultures and
in animal models of infection.
2.4 Exploitation of Compounds.
2.4.1 SANKYO's Obligations. SANKYO shall contribute to the Research
Collaboration, among other things, (i) by participating in
screening Compounds arising from its own library, (ii) by
conducting extended medicinal chemistry of the Compounds
derived from OSI and SANKYO libraries, (iii) by evaluating
Compounds in useful and conventional animal models to select
possible Candidate Compounds and Approved Compounds, (iv) by
conducting such testing as may be required for initiation of
Phase I clinical trials of Approved Compounds, including but
not limited to physico-chemistry, pharmacology, toxicology,
ADME and other studies as required, and (v) by applying its
scientific and technical expertise to problems and issues
identified by the Research Committee relevant to the Research
Collaboration.
SANKYO shall use reasonably diligent efforts to exploit any
Approved Compound in respect of which it exercises its option
pursuant to Article 3.3. This requirement shall be deemed
satisfied if SANKYO uses the same degree of diligence it uses
with respect to products developed by SANKYO outside of this
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Agreement. If SANKYO elects to discontinue development of a
Compound pursuant to the Research Program, it shall so notify
OSI immediately. The parties shall discuss the possibility of
SANKYO licensing the Compound to OSI. SANKYO shall not license
such Compound to any other party on terms more favorable than
those offered to OSI.
2.4.2 Discontinuation of Development. If SANKYO discontinues
development of all Compounds pursuant to the Research Program
then SANKYO shall immediately notify OSI thereof and OSI shall
have the sole and exclusive right, subject to the payment of
royalties as set forth in this Article 2.4.2, to pursue
development of any and all Compounds, and to develop, make,
have made, use, and sell Products containing any Compound,
provided, however, this clause shall not apply to any Compound
which SANKYO has included in a sub-license to a third party
prior to its decision to discontinue development of all
Compounds.
No royalties, milestone payments or any other payments shall
be payable by OSI to the other parties hereto with respect to
such Compounds; provided, however, that (i) OSI shall pay to
SANKYO a royalty at the rate of ** of the Net Sales of OSI for
each Product derived from such Compound, the manufacture, use
or sale of which is covered by a Valid Claim of the Patent
Rights, which royalty OSI shall continue to pay in each
applicable country until the expiration of the last Valid
Claim under the Patent Rights applicable to such Product
expires in such
-----------------------
** This portion redacted pursuant to a request for confidential treatment.
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country or (ii) OSI shall pay to SANKYO a royalty at the rate
of ** of the Net Sales of OSI for each Product derived from
such Compound which not covered by a Valid Claim under the
Patent Rights, which royalty OSI shall continue to pay in each
applicable country for ten (10) years from the date of first
commercial sale of such Product in each such country.
This Article 2.4.2 shall survive the expiration or prior
termination of this Agreement.
2.5 Mutual Obligations.
2.5.1 Evaluation and Information Exchange. OSI, MRC CC and SANKYO
shall cooperate in good faith in the evaluation of Compounds.
In the furtherance of such cooperation, OSI, MRC CC and SANKYO
shall, free of charge, exchange research, development,
pre-clinical, clinical, regulatory and other technical
information relating to the Research Collaboration and the
development of Products during the Contract Period. Written
quarterly scientific reports shall be prepared by all parties
within thirty (30) days after the end of each three (3) month
period during the term of the Research Collaboration. In
addition, joint technical meetings shall be held in accordance
with Section 2.9.2 hereof.
2.5.2 Exclusive Collaboration. During the Contract Period, OSI, MRC
CC and SANKYO agree that the Research Program shall be the
exclusive mechanism for research and development of Compounds
and Products in the anti-influenza area for commercialization
in the Territory.
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** This portion redacted pursuant to a request for confidential treatment.
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2.6 Contract Period. The Contract Period shall commence on the
Effective Date, and shall expire on the third anniversary of
this date, except as such term may be extended pursuant to
Section 2.8 hereof or terminated pursuant to Article 8.
2.7 Research Funding and Expense Reports.
2.7.1 Funding Payments by SANKYO. Subject to the terms and
conditions set forth herein, in pursuit of the Research
Collaboration, SANKYO agrees to bear the actual costs and
expenses (including applicable overhead costs) incurred by OSI
and MRC CC in order to conduct the anti-influenza research and
development work under the Research Collaboration up to an
aggregate of ** U.S. Dollars to OSI and ** U.K. pounds to MRC
CC over a three (3) year period, payable in quarterly
installments in accordance with the research work plan and
budget set forth on Schedule "A" and "B" attached hereto,
commencing with the first quarterly payment within (30) days
of the Effective Date. Each subsequent quarterly payment shall
be made by SANKYO not less than thirty (30) days prior to the
commencement of each calendar quarter during such three (3)
year period in accordance with the research work plan and
budget set forth on Schedule "A and B" attached hereto. All
quarterly payments to be made by SANKYO under this Section
shall be made by bank wire transfer in immediately available
funds to the receiving party's account as notified pursuant to
Article 10, unless the receiving party otherwise notifies
SANKYO in writing at least fourteen (14) days before such
payment is due.
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** This portion redacted pursuant to a request for confidential treatment.
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All payments due OSI shall be paid in United States Dollars,
all payments due MRC CC shall be paid in Pounds Sterling. If
any payment due hereunder is denominated or calculated in or
relation to any currency other than United States Dollars or
Pound Sterling, the exchange rate quoted by a major bank in
Tokyo from which SANKYO remits such payment to OSI and MRC CC
on the day of such remittance shall apply.
Notwithstanding any provision herein to the contrary, SANKYO
shall have no obligation to make any payment hereunder in the
event any of the other par-ties hereto are in material breach
of their obligations hereunder or have otherwise failed to
perform the Research Program.
2.7.2 Reports by OSI and MRC CC. Within forty-five (45) days after
the end of each calendar quarter during the Contract Period,
OSI and MRC CC shall each forward to SANKYO a written progress
report of estimated expenses (a "Quarterly Expense Report")
for the Research Collaboration. Each Quarterly Expense Report
shall include personnel time expended on the project sorted by
functional area and actual costs and Allocated Overhead and
Unallocated Overhead for that quarterly period. Within sixty
(60) days of the end of each six (6) month period within a
project year (ending on September 30 and March 31,
respectively, of each project year), OSI and MRC CC shall each
provide a more detailed report of project expenses (a
"Semi-Annual Expense Report") using OSI's and MRC CC's
Internal Project Costing system. Each Semi-Annual Expense
Report shall set forth OSI's and MRC CC's standard project
expense categories which
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currently include salaries and related employee benefits, cost
center expenses for direct project personnel, direct project
expenses (collected in a dedicated cost center), indirect
research expenses, allocations of support services (which
include facilities, information systems and other central
services), and allocations of corporate general and
administrative overhead. The Semi-Annual Expense Report shall
replace the Quarterly Expense Reports for the calendar
quarters ending on September 30 and March 31, respectively, of
each project year, and no Quarterly Expense Report shall be
required for such quarters. Upon the giving of fourteen (14)
days' prior written notice, a SANKYO designated independent
certified public accountant, at the expense of SANKYO, may
inspect the supporting documentation for any Quarterly Expense
Report and/or Semi-Annual Expense Report. Such inspection
shall take place at OSI's and MRC CC's corporate offices. One
(1) inspection may be requested per each six (6) month period
within a project year. The inspection for any semi-annual
period may be requested at any time within a period of one (1)
year following receipt of the Semi-Annual Expense Report by
SANKYO. However, if such inspection uncovers an understatement
or overstatement of five percent (5%) or greater due to an
error in the application of the OSI's and MRC CC's project
costing system or a material deficiency in other supporting
documentation, then SANKYO may request up to two (2)
additional inspections for review, and OSI or MRC CC, as the
case may be, shall reimburse SANKYO for the cost of said audit
and make good any understatement. In addition, OSI or MRC CC,
as the case may be,
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shall undertake appropriate steps to remedy the reoccurrence
of any such error or deficiency. The principles and procedures
established for OSI's and MRC CC's project cost system shall
be used to determine and calculate project expenses.
2.7.3 Additional Option. On SANKYO's request, OSI will use
commercially reasonable efforts to conduct mechanism of action
studies in the laboratory of Dr. ** and Drs. ** and ** at an
estimated cost of ** US Dollars ** .
On SANKYO's request, OSI will conduct high speed combinatorial
chemistry analoging on up to four (4) lead series emerging
from the screens at an estimated cost of ** US Dollars ** .
Three months notice will be required for the initiation of
chemistry resources.
2.8 Extension of the Contract Period. In the event that OSI, MRC
CC and SANKYO agree at any time prior to three (3) months
before the expiration of the initial Contract Period, the
Contract Period shall be extended for an additional one (1) or
two (2) years upon terms and conditions mutually acceptable to
OSI, MRC CC and SANKYO. Research funding to be borne by SANKYO
for this extended period shall not exceed an aggregate of **
US Dollars ** a year for the activities of OSI and MRC CC.
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** This portion redacted pursuant to a request for confidential treatment.
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2.9 Joint Collaborative Research Committee ("Research Committee").
2.9.1 Establishment of the Research Committee. A Joint Collaborative
Research Committee ("Research Committee") shall be established
to supervise and manage the Research Collaboration. The
Research Committee shall consist of six (6) members, with
three (3) designees from SANKYO, two (2) designees from OSI
and one (1) designee from MRC CC. In the event any member of
the Research Committee shall resign or be replaced, OSI or MRC
CC or SANKYO, as the case may be, may designate a replacement
and shall provide the other party with advance notice thereof.
The designated members may, where appropriate, be accompanied
by company scientists for the purpose of presenting the
results of the Research Program. OSI or MRC CC or SANKYO
reserve the right to designate one alternate member who may
attend any Research Committee meeting that the original
designate is unable to attend.
2.9.2 Research Committee Meetings/Tasks. The Research Committee
shall meet at least three (3) times per year during the
Contract Period and at least once during the year following
the completion or termination of the Contract Period. The
location of such meetings shall alternate among OSI's office
in Uniondale, MRC CC's office in London and SANKYO's offices
in Tokyo. Any additional meetings shall be at times and places
agreed to by OSI, MRC CC and SANKYO and may be conducted by
telephone, or in any other manner as the parties shall agree.
At its meetings, the Research Committee will discuss the
annual Research Program objectives, review and discuss patent
status, monitor progress of the
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Research Program, and discuss and direct objectives, tasks and
required activities of the Research Collaboration. The
Research Committee meetings shall also act as the initial
forum for any disputes which might arise under the Research
Collaboration. The Research Committee shall establish
Candidate Compound Criteria as well as Approved Compound
Criteria. The detailed minutes of all joint technical meetings
shall be distributed within thirty (30) days after such
meetings.
2.9.3 Chair. The Research Committee shall be chaired by one of the
members appointed by SANKYO. The co-chair shall be appointed
by OSI. The chair and co-chair shall work together to
establish the agenda for meetings and to coordinate the
Research Program and follow-up actions.
2.9.4 Voting. All decisions of the Research Committee shall be made
by majority vote of the members comprising OSI, MRC CC and
SANKYO. In the event of a tie vote the Chair shall have a
casting vote.
2.10 Records and Reports.
2.10.1 Record Keeping. OSI, MRC CC and SANKYO shall each maintain
records in sufficient detail and in good scientific manner
appropriate for patent purposes and as will properly reflect
all work done and results achieved in the performance of the
Research Program (including all data in the form required
under any applicable governmental regulations). OSI, MRC CC
and SANKYO shall each provide the other with the right to
inspect and copy such records to the extent reasonably
required for the performance of its obligations under this
Agreement;
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provided that each party shall maintain such records and the
information of the other contained therein in confidence in
accordance with Article 4 below and shall not use such records
or information except to the extent otherwise permitted by
this Agreement.
2.10.2 Quarterly Summary Reports. During the Research Program, each
party shall furnish to the Research Committee and the other
party summary reports within fifteen (15) days after the end
of each three (3) month period, commencing on the Effective
Date, describing its progress under the Research Program.
2.10.3 Annual Reports. At least thirty (30) days prior to each annual
Research Committee administrative meeting, each party shall
separately prepare and submit to the Research Committee and
the other party a concise written report which shall (i)
summarize the work on the Research Program performed in the
course of the past year; (ii) list the Compounds conceived,
synthesized or identified during the past year; (iii) identify
any Compounds that are being, or may be considered by the
Research Committee as Candidate Compounds and/or Approved
Compounds; (iv) briefly outline the work plan and budget for
the Research Program during the ongoing year; and (v) list the
Compounds to be synthesized and tested during the ongoing
year. The first Research Committee meeting of each contract
year will be the annual Research Committee administrative
meeting.
2.11 Materials. MRC CC, OSI and SANKYO shall, during the Contract
Period as a matter of course as directed by the Research
Committee or upon each other's oral or written request,
furnish to each other samples of biochemical, biological or
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synthetic chemical materials ("Materials") which are part of SANKYO
Technology, OSI Technology, MRC CC Technology, SANKYO Technology
Improvements, OSI Technology Improvements, MRC CC Technology
Improvements or Joint Technology Improvements and which are necessary
for each party to carry out its responsibilities under the Research
Program. To the extent that the quantities of Materials requested by
either party exceed the quantities set forth in Schedule "C", the
requesting party shall reimburse the other party for the reasonable
costs of such Materials if they are furnished and if reimbursement is
requested.
3. Technology Disclosure Fee, Identification and Development of Compounds
and Option to Develop
3.1 Technology Disclosure Fee. SANKYO shall pay to OSI a technology
disclosure fee of ** U.S. Dollars ** within thirty (30) days of the
Effective Date, which will be distributed between OSI and MRC CC as
they have agreed.
3.2 Identification of Compound(s) and Presentation to SANKYO of Candidate
Compounds. During the Contract Period, each party shall promptly inform
the Research Committee and other parties of each Compound arising from
the Research Program which it believes to be suitable for further
development as a Candidate Compound. In accordance with its
responsibilities under Section 2.9 hereof, the Research Committee shall
meet promptly after being so informed by OSI, MRC CC and/or SANKYO in
order to determine whether to designate such
-----------------------
** This portion redacted pursuant to a request for confidential treatment.
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compound as a Candidate Compound. If the Research Committee votes to
designate such Compound as a Candidate Compound, then SANKYO shall
conduct, under the directions of the Research Committee, necessary
testing for this Candidate Compound in conformity with the Approved
Compound Criteria and report the results to the Research Committee and
other parties as to whether SANKYO believes such Candidate Compound is
suitable for consideration as an Approved Compound. In accordance with
its responsibilities under Section 2.9 hereof, the Research Committee
shall meet promptly after being so informed by SANKYO in order to
determine whether to designate such a Candidate Compound as an Approved
Compound. If SANKYO, OSI or MRC CC votes not to designate such a
Candidate Compound as an Approved Compound due to lack of experimental
data and the like then whichever party so votes shall provide a list of
reasonable experiments to be carried out by OSI, MRC CC and/or SANKYO
that can be completed within one (1) year of the date that the Research
Committee voted not to designate this Candidate Compound as an Approved
Compound. At the end of this one (1) year period or at such earlier
time as the designated experiments have been completed, the Research
Committee shall again consider whether to designate such a Candidate
Compound as an Approved Compound.
3.3 SANKYO Option to Develop Approved Compounds. SANKYO shall have the
exclusive option, exercisable within one hundred eighty (180) days
after the Research Committee designates a Compound as an Approved
Compound, to pursue development of such Approved Compound. SANKYO shall
exercise its
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option under this Section 3.3 by delivering to OSI and MRC CC
a written notice in accordance with Article 10 hereof stating
its election to develop the Approved Compound identified in
such notice. Sankyo's right to pursue development hereunder
shall not be limited to one Approved Compound but shall apply
to any and all Compounds qualifying or designated as an
Approved Compound.
3.4 License Agreement and Milestone Payments.
3.4.1 License Agreement. If SANKYO exercises its option in
accordance with Section 3.3 hereof, OSI, MRC CC and SANKYO may
enter into a more definitive License Agreement concerning
SANKYO's development of such Approved Compound and any
anti-influenza agents derived from the Research Collaboration.
The failure of the parties to execute a License Agreement
shall in no way limit or terminate the rights granted SANKYO
pursuant to Articles 3 and 5.
3.4.2 Contents of License Agreement. Any such License Agreement
entered into shall grant to SANKYO an exclusive license under
the Technology (excluding SANKYO Technology), Patent Rights
(excluding SANKYO Patent Rights) and/or Technology
Improvements (excluding SANKYO Technology Improvements), with
the right to sublicense, to develop, use and sell applicable
Products in the Territory. In the event of the granting of
such a sublicense, SANKYO guarantees the performance of the
sublicensees as the same obligations as SANKYO hereunder.
SANKYO's right and license to develop, use and sell any
Product shall be conditioned upon SANKYO fulfilling its
obligation to pay the milestone payments and royalties as set
forth herein.
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3.5 Milestone Payment.
SANKYO shall make each milestone payments (2/3 of which shall be for
the account of OSI and 1/3 for the account of MRC CC) as listed below
with respect to the first Approved Compound. So long as each such
payment is timely made by SANKYO to OSI and MRC CC, then SANKYO shall
maintain its exclusive rights to continue development of the Approved
Compound to the next stage, at which time SANKYO shall determine
whether to make the next payment to OSI and MRC CC and proceed to the
next stage of development. The parties agree that the below milestone
payments shall not be made by SANKYO to OSI and MRC CC for each
Approved Compound but be made only once for any one Approved Compound
which payment shall be deemed to satisfy such obligation for the entire
project, the aim of which is to develop and sell any anti-influenza
Products derived from the Research Collaboration herein.
(a) ** US Dollars ** within thirty (30) days after the date of
filing an IND or equivalent for the Approved Compound in any country.
(b) ** US Dollars ** within Ninety (90) days after the Phase II
clinical investigators' meeting provided SANKYO decides to initiate
Phase III clinical trials of the Approved Compound in any country. Such
decision by SANKYO to initiate Phase III clinical trials shall be made
within ninety (90) days after the end of Phase II clinical
investigator's meeting.
--------------------
** This portion redacted pursuant to a request for confidential treatment.
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(c) ** U.S. Dollars ** within thirty (30) days from the date of
the filing of an NDA or equivalent for the Approved Compound in any
country.
(d) ** U.S. Dollars ** within thirty (30) days after the date of
approval of an NDA or equivalent for the Approved Compound in any
country.
3.6 Substituted Compound in Lieu of Approved Compound. If at any time
during the development of an Approved Compound (pursuant to the terms
of the License Agreement) the parties must discontinue the development
of such Approved Compound due to (i) clinical trial results concerning
the safety or efficacy of such Approved Compound which are unacceptable
to the regulatory agency governing approval of such Compound for
commercial sale, or (ii) a determination is made that such Approved
Compound would or does infringe the patents rights of a third party,
then Sankyo shall have the rights to pursue development pursuant to
Section 3.3 with respect to one (1) or more substituted Compounds (the
"Substituted Compound") in lieu of the Approved Compound so abandoned
(the "Abandoned Compound"). The Substituted Compound must be a Compound
which is designated and presented by the Research Committee and
approved by SANKYO as an Approved Compound in accordance with Section
3.2 and 3.3 hereof. The milestone payments paid pursuant to Section 3.5
hereof with respect to the Abandoned Compound shall constitute
consideration for the rights granted
-----------------------
** This portion redacted pursuant to a request for confidential treatment.
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by OSI, and MRC CC to SANKYO with respect to the Substituted Compound
substituted in lieu thereof, and no additional milestone payment by
SANKYO to OSI and MRC CC other than milestone payments which have not
been paid with respect to the Abandoned Compound shall be required in
consideration of such rights to the Substituted Compound granted by OSI
and MRC CC. In such event, the parties shall execute a new License
Agreement with respect to the Substituted Compound comprising
substantially the same terms and condition.
4. Treatment of Confidential Information.
4.1 Confidentiality.
4.1.1 MRC CC, SANKYO and OSI recognize that the other's Confidential
Information constitute highly valuable proprietary,
confidential information. Subject to the disclosure
obligations and publication rights set forth below, MRC CC,
SANKYO and OSI agree that they will keep confidential, and
will cause their Affiliates to keep confidential, all
Confidential Information of the other parties hereto. Nor
shall any of the parties hereto use any Confidential
Information of the other parties except as expressly permitted
in this Agreement.
4.1.2 Each of the parties hereto acknowledges that the Confidential
Information of the other parties is highly valuable,
proprietary, confidential information, and each party agrees
that disclosure of the other party's Confidential Information
to any officer, employee, agent or of any of its Affiliates
shall be made only if and to the extent necessary to carry out
its responsibilities under this Agreement and shall be limited
to the maximum extent possible consistent with such
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responsibilities. Each party agrees not to disclose the
other's Confidential Information to any third party (other
than consultants) under any circumstance without written
permission. Each party shall take such action, and shall cause
its Affiliates to take such action, to preserve the
confidentiality of each other party's Confidential Information
as they would customarily take to preserve the confidentiality
of their own confidential information.
4.1.3 Each party represents that all of its employees participating
in the Research Program who shall have access to the other
party's Confidential Information are bound, by agreement to
maintain such information in confidence. Consultants shall be
similarly bound.
4.2 Publication. Section 4.1 to the contrary notwithstanding, the results
obtained in the course of the Research Program may be submitted for
publication following scientific review by the Research Committee and
subsequent approval by OSI's, MRC CC's and SANKYO's managements. After
receipt of the proposed publication by both OSI's, MRC CC's and
SANKYO's managements, written approval or disapproval shall be provided
within thirty (30) days for a manuscript, within fourteen (14) days for
an abstract for presentation at, or inclusion in the proceedings of, a
scientific meeting, and within fourteen (14) days for a transcript of
an oral presentation to be given at a scientific meeting.
4.3 Publicity. Except as required by law, no party may disclose the
existence of this Agreement nor the research described in it except
with the written consent of the other party, which consent shall not be
unreasonably withheld.
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4.4 Disclosure of Technology Improvements. Each party shall promptly inform
the other parties about all Technology Improvements that are conceived,
made or developed in the course of carrying out the Research Program by
employees of, or consultants to, either of them solely, or jointly with
employees of, or consultants to the other. This Agreement shall not be
construed to obligate either party to disclose to the other any
Technology Improvement which does not arise under the Research Program.
4.5 Restrictions on Transferring Materials. MRC CC, SANKYO and OSI
recognize that the Materials which are part of SANKYO Technology, OSI
Technology, MRC CC Technology, SANKYO Technology Improvements, OSI
Technology Improvements, MRC CC Technology Improvements or Joint
Technology Improvements, represent valuable proprietary commercial
assets. Therefore, each party agrees not to transfer to any third party
any such Materials which constitute Technology or Confidential
Information owned in whole or in part by another party without the
prior written consent of such party.
4.6 Permitted Use of Confidential Information. Nothing contained herein
will in any way restrict or impair any party's right to use, disclose
or otherwise deal with any Confidential Information which:
(a) at the time of disclosure is properly in the public domain or
thereafter becomes part of the public domain by publication or
otherwise through no breach of this Agreement by the party receiving
such information;
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(b) the party receiving such information can establish by competent
evidence that such information was properly in its possession prior to
the time of the disclosure;
(c) is independently and properly made available as a matter of right
to the party receiving such information by a third party who is not
thereby in violation of a confidential relationship with a party, or an
Affiliate thereof, to this Agreement;
(d) is information which is required to be included in patent
applications filed under Article 6 or required to be provided to a
government agency in order for SANKYO to obtain approvals to market a
hereunder; provided, however, that no SANKYO, OSI or MRC CC
Confidential Information shall be disclosed in any such patent
application or otherwise without the prior written consent of the other
party which consent shall not be unreasonably withheld;
(e) is information which is required to be disclosed to customers,
users and prescribers of a Product or which is reasonably necessary to
disclose in connection with the ethical marketing of a Product;
provided, however, that no OSI Confidential Information will be so
disclosed without the prior written consent of OSI, which consent will
not be unreasonably withheld and no MRC CC Confidential Information
will be so disclosed without the written consent of MRC CC, which
consent will not be unreasonably withheld; or
(f) is information required to be disclosed by law or by a court order
in each of which cases the disclosing party shall timely inform the
other and use its best
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efforts to limit the disclosure and maintain confidentiality to the
extent possible and will permit the other party to limit such
disclosure.
5. License and Royalty.
5.1 Grant of Licenses. The parties hereby agree that subject to the terms
and conditions set forth herein SANKYO shall have the sole and
exclusive right to pursue development of any and all Compounds, and to
develop, make, have made, use, and sell Products containing any
Compound. In addition, OSI and MRC CC each respectively grant the
following rights:
(a) OSI hereby grants to SANKYO an irrevocable worldwide license,
including the right to sublicense, under the OSI Technology, the OSI
Patent Rights, the OSI Technology Improvements, and OSI rights in the
Joint Technology Improvements to pursue development of any and all
Approved Compounds and to develop, make, have made, use, and sell
Products, which license shall be exclusive for so long as SANKYO is
obligated to pay a royalty under Sections 5.7.1 or 5.7.2. SANKYO agrees
that OSI shall be identified on the packaging of all Products on which
SANKYO is obligated to pay royalties. This paragraph 5.1 shall not be
construed to grant SANKYO a license to use the OSI Patent Rights, OSI
Technology or OSI Technology Improvements except as they relate to the
Research Program and the Products.
(b) MRC CC hereby grants to SANKYO an irrevocable worldwide license,
including the right to sublicense, under the MRC CC Technology, the MRC
CC Patent Rights, the MRC CC Technology Improvements, and MRC CC's
rights in
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the Joint Technology Improvements to pursue development of all Approved
Compounds and to develop, make, have made, use, and sell Products,
which license shall be exclusive for so long as SANKYO is obligated to
pay a royalty under Sections 5.7.1 or 5.7.2. This paragraph 5.1 shall
not be construed to grant SANKYO a license to use the MRC CC Patent
Rights, MRC CC Technology or MRC CC Technology Improvements except as
they relate to the Research Program and the Products.
5.2 Grants of Research Licenses. OSI, MRC CC and SANKYO each grants to the
other a nonexclusive, irrevocable, worldwide, royalty-free, perpetual
license, including the right to grant sublicenses to Affiliates, to
make and use its Technology Improvements for all research purposes
other than the sale or manufacture for sale of products or processes.
5.3 Paid-Up License. With respect to each country, provided that SANKYO has
satisfied all of its then current obligations to pay royalties
hereunder, SANKYO shall have a paid-up license permitting the
royalty-free manufacture, use, and sale of each Product in such country
after the expiration of SANKYO's last obligation to pay royalties on
the NET SALES of such Product in such country.
5.4 Sublicenses. If SANKYO grants a sublicense pursuant to Section 5.1,
SANKYO shall guarantee that any such sublicensee shall fulfill all of
SANKYO's obligations under this Agreement. In the event SANKYO grants
sublicenses under Article 5 to another party to make, use, or sell
Products, such sublicenses shall include an obligation of the
sublicensees to account for and report all NET SALES of
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such Products on the same basis as if such sales were NET SALES of
Products by SANKYO, and SANKYO shall pay royalties to OSI and MRC CC
under this Agreement as if the NET SALES of the sublicensee were NET
SALES of the sublicensor.
5.5 Right to Product Improvements. SANKYO shall acquire an exclusive
(nonexclusive in the countries of the world in which this Section might
otherwise be deemed to violate restrictive trade practices laws),
worldwide, royalty-free license to any product improvements made by OSI
or MRC CC in respect of any Products. OSI and MRC CC shall promptly and
fully notify SANKYO of any such product improvements made by OSI and
MRC CC, including costs. All such improvements shall be included within
the scope of this Agreement.
5.6 Technical Assistance. MRC CC and OSI shall provide SANKYO or any
Affiliate or sublicensee of SANKYO, at SANKYO's request and expense,
with any assistance reasonably necessary to enable SANKYO or such
Affiliate or sublicensee to manufacture, use, or sell any Product and
to enjoy fully all the rights granted to SANKYO pursuant to this
Agreement.
5.7 Royalties, Payment of Royalties, Accounting for Royalties, Records.
5.7.1 Patented Products. SANKYO shall pay a royalty at the rate of
** of the NET SALES of each Product (2/3 of which shall be for
the account of OSI and 1/3 of which shall be for the account
of MRC CC), the manufacture, use, or sale of
-----------------------
** This portion redacted pursuant to a request for confidential treatment.
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which is covered by a Valid Claim of the Patent Rights. In the
event that OSI's contribution is limited to preparation of
assay systems for screening, the royalty rate payable from
SANKYO shall be ** of the NET SALES of each Product (2/3 of
which shall be for the account of OSI and 1/3 of which shall
be for the account of MRC CC). With respect to each Product,
SANKYO shall continue to pay such royalty on the sales of such
Product in each country until the expiration of the last Valid
Claim under the Patent Rights applicable to such Product
expires in such country.
5.7.2 Technology. SANKYO shall pay a royalty at the rate of ** of
the NET SALES of each Product (2/3 of which shall be for the
account of OSI and 1/3 of which shall be for the account of
MRC CC) which is not covered by a Valid Claim of the Patent
Rights. In the event that OSI's contribution is limited to
preparation of assay system for screening, the royalty rate
payable from SANKYO shall be ** of the Net Sales of each
Product (2/3 of which shall be for the account of OSI and 1/3
of which shall be for the account of MRC CC). Such royalty
shall be paid on the sales of each Product in each country of
the world for ten (10) years from the date of first commercial
sale of such Product in each such country, said obligation to
pay royalties shall terminate on the earlier of the
termination of said ten year period or the date on which such
Technology enters the public domain.
-----------------------
** This portion redacted pursuant to a request for confidential treatment.
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5.7.3 Third Party Royalty.
(a) Any royalty payable to any third party including but
not limited to royalties paid for licensed compounds (other
than royalties arising out of OSI Technology, MRC CC
Technology or SANKYO Technology), shall be borne first by
SANKYO, provided that an amount up to Fifty Percent (50%) of
any such third party royalty may be offset against any
royalties due OSI and MRC CC in any year under Section 5.7.1
or 5.7.2 but only to the extent that the amount paid to OSI or
MRC CC in any year is not less than Seventy-five Percent (75%)
of the total royalty that would otherwise be due to OSI or MRC
CC under Section 5.7.1 or 5.7.2 for the relevant period.
(b) Any royalty payable to any third party arising out of
OSI Technology, SANKYO Technology, or MRC CC Technology shall
be payable solely by OSI, SANKYO, or MRC CC, as the case may
be, respectively.
5.7.4 Payment Dates. Royalties shall be paid by SANKYO on NET SALES
within ninety (90) days after the end of each calendar quarter
in which such NET SALES are made. Such payments shall be
accompanied by a statement showing the NET SALES of each
Product by SANKYO in each country, the applicable royalty rate
for such Product, and a calculation of the amount of royalty
due.
5.7.5 Accounting. The royalties payable to OSI and MRC CC shall be
computed and paid in U.S. Dollars. For purposes of determining
the amount of royalties due with respect to NET SALES in any
foreign currency, the amount shall be computed generally by
converting the foreign currency amount into U.S. Dollars
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using for each month's calculation the foreign currency
exchange rate as published in the Wall Street Journal on the
date such royalty is paid or due, whichever is earlier.
5.7.6 Records. SANKYO shall keep for three (3) years from the date
of each payment of royalties complete and accurate records of
sales by SANKYO of each Product in sufficient detail to allow
the accruing royalties to be determined accurately. OSI (on
behalf of itself and MRC CC) shall have the right for a period
of three (3) years after receiving any report or statement
with respect to royalties due and payable to obtain at its
expense from the independent certified public accountant used
by SANKYO for public reporting an audit of the relevant
records of SANKYO to verify such report or statement. SANKYO
shall make its records available for inspection by such
independent certified public accountant during regular
business hours at such place or places where such records are
customarily kept, upon reasonable notice from OSI, to the
extent reasonably necessary to verify the accuracy of the
reports and payments. Such inspection right shall not be
exercised more than once in any calendar year nor more than
once with respect to sales in any given period. OSI agrees to
hold in strict confidence all information concerning royalty
payments and reports, and all information learned in the
course of any audit or inspection, except to the extent
necessary for OSI to reveal such information in order to
enforce its rights under this Agreement or when disclosure is
required by law. The failure of OSI to request verification of
any report or statement during said three (3) year period
shall be considered
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acceptance of the accuracy of such report, and SANKYO shall
have no obligation to maintain records pertaining to such
report or statement beyond said three (3) year period. The
results of the inspection shall be binding on both parties.
5.7.7 Withholding:
(a) Payments. All amounts payable under Section 2.7.1, 3.1
and 3.5 shall represent the actual proceeds to be received by
OSI and MRC CC after any applicable deductions have been made,
including without limitation any withholding taxes. OSI and
MRC CC agree to reasonably cooperate with SANKYO in obtaining
a refund of any withholding taxes paid by SANKYO with respect
to any payments to OSI and MRC CC hereunder. In the event that
OSI and MRC CC are successful in obtaining any refund of tax
withholding amounts paid by SANKYO under Sections 2.7.1, 3.1
and 3.5 of this Agreement, OSI and MRC CC agree to promptly
remit such refund amount to SANKYO.
(b) Royalty Payments. SANKYO may withhold from royalties
due to OSI and MRC CC under Sections 5.7.1 and 5.7.2 amounts
for payment of any withholding tax that is required by law to
be paid to any taxing authority with respect to such royalty
amounts due to OSI and MRC CC; provided, however, that in
regard to any such tax withholding SANKYO shall give OSI and
MRC CC such documents, and provide any other cooperation or
assistance on a reasonable basis, as may be necessary to
enable OSI and MRC CC to claim exemption therefrom to receive
a full refund of such withholding tax or claim a foreign tax
credit and shall upon
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OSI's and MRC CC's request give proper evidence from time to
time as to the payment of such tax.
5.8 Manufacturing Rights. SANKYO shall maintain all manufacturing rights to
Compounds and Products in the Territory. SANKYO shall also have the
right to transfer its right to manufacture, at its discretion, to its
Affiliates or any sublicensees of SANKYO.
6. Provisions Concerning the Filing, Prosecution and Maintenance of Patent
Rights. The following provisions relate to the filing, prosecution and
maintenance of MRC CC Patent Rights, OSI Patent Rights, Joint Patent
Rights, and SANKYO Patent Rights:
6.1 OSI Filing: Prosecution and Maintenance. OSI shall have the exclusive
right and obligation:
(a) to file applications, at its expense (subject to reimbursement as
herein after provided), for letters patent on any patentable invention
included in OSI Technology Improvements or in Joint Technology
Improvements which relate to cell lines, cloning of cell lines and
methodologies for determining the effect of compounds on biochemical
processes; provided, however, that OSI shall provide to MRC CC and
SANKYO copies of all patent applications prior to filing for the
purpose of obtaining the substantive comments of MRC CC and SANKYO
patent counsel and shall consult with MRC CC and SANKYO regarding
countries in which such patent applications should be filed and shall
file patent applications in those countries where MRC CC and SANKYO
requests that OSI file; and further
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provided, that OSI, at its option and expense, may file in countries
where MRC CC and SANKYO do not request that OSI file;
(b) to prosecute, at its expense (subject to reimbursement as
hereinafter provided), all pending and new patent applications included
within OSI Technology Improvements or Joint Technology Improvements
which relate to cell lines, cloning of cell lines and methodologies for
determining effect of compounds on biochemical processes and to respond
to oppositions filed by third parties against the grant of letters
patent for such applications, provided that OSI shall also provide to
MRC CC and SANKYO copies of all documents relating to the prosecution
of all patent applications in a timely manner for the purpose of
obtaining the substantive comments of MRC CC and SANKYO patent counsel;
(c) to maintain in force, at its expense (subject to reimbursement as
hereinafter provided), any letters patent included in OSI Patent Rights
by duly filing all necessary papers and paying any fees required by the
patent laws of the particular country in which such letters patent were
granted;
(d) to notify MRC CC and SANKYO in a timely manner of any decision to
abandon a pending patent application or an issued patent included in
OSI Patent Rights. Thereafter, MRC CC and SANKYO shall have the option,
at their expense, of continuing to prosecute any such pending patent
application or of keeping the issued patent in force; and
(e) to provide to MRC CC and SANKYO every six (6) months a report
detailing the status of all patent applications that are part of OSI
Patent Rights.
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6.2 SANKYO Filing: Prosecution and Maintenance. SANKYO shall have the
exclusive right and obligation:
(a) to file applications, at its expense, subject to reimbursement as
hereinafter provided, for letters patent on any patentable invention
included in SANKYO Technology Improvements or in Joint Technology
Improvements which relate to new compounds and therapeutic uses or
manufacturing processes of known compounds; provided, however, that
SANKYO shall provide to MRC CC and OSI copies of all patent
applications prior to filing for the purpose of obtaining the
substantive comments of MRC CC and OSI patent counsel and shall consult
with MRC CC and OSI regarding countries in which such patent
applications should be filed and shall file patent applications in
those countries where MRC CC and OSI requests that SANKYO file; and
further provided, that SANKYO, at its option and expense, may file in
countries where OSI does not request that SANKYO file;
(b) to prosecute, at its expense, subject to reimbursement as
hereinafter provided, all pending and new patent applications included
within SANKYO Technology Improvements or Joint Technology Improvements
which relate to new compounds and therapeutic uses of known compounds
and to respond to oppositions fled by third parties against the grant
of letters patent for such applications; provided that SANKYO shall
also provide to MRC CC and OSI copies of all documents relating to the
prosecution of all patent applications in a
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timely manner for the purpose of obtaining the substantive comments of
MRC CC and OSI patent counsel;
(c) to maintain in force, at its expense, subject to reimbursement as
hereinafter provided, any letters patent included in SANKYO Patent
Rights by duly filing all necessary papers and paying any fees required
by the patent laws of the particular country in which such letters
patent were granted;
(d) to notify MRC CC and OSI in a timely manner of any decision to
abandon pending patent application or an issued patent included in
SANKYO Patent Rights. Thereafter, MRC CC and OSI shall have the option,
at their expense, of continuing to prosecute any such pending patent
application or of keeping the issued patent in force; and
(e) to provide to MRC CC and OSI every six (6) months a report
detailing the status of all patent applications that are part of SANKYO
Patent Rights.
6.3 MRC CC Filing: Prosecution and Maintenance. MRC CC shall have the
exclusive right and obligation:
(a) to file applications, at its expense, subject to reimbursement as
hereinafter provided, for letters patent on any patentable invention
included in MRC CC Technology Improvements or Joint Technology
Improvements which relate to cell culture models or animal models of
infection and methodologies for determining the effects or mechanism of
action of compounds on viral infection in living cells and animals;
provided, however, that MRC CC shall provide SANKYO and OSI with copies
of all patent applications prior to filing for the purpose of obtaining
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the substantive comments of SANKYO and OSI patent counsel and consult
with SANKYO and OSI regarding countries in which such patent
applications should be filed and shall file patent applications in
those countries where SANKYO and OSI requests that MRC CC file; and
further provided, that MRC CC, at its option and expense, may file in
countries where SANKYO and OSI do not request that MRC CC file;
(b) to prosecute, at its expense, subject to reimbursement as
hereinafter provided, all pending and new patent applications included
within MRC CC Technology Improvements or Joint Technology Improvements
which relate to cell culture models or animal models of infection and
methodologies for determining the effects or mechanism of action of
compounds on viral infection in living cells and animals; and to
respond to oppositions filed by third parties against the grant of
letters patent for such applications; provided that MRC CC shall also
provide to SANKYO and OSI copies of all documents relating to the
prosecution of all patent applications in a timely manner for the
purpose of obtaining the substantive comments of SANKYO and OSI patent
counsel;
(c) to maintain in force, at its expense, subject to reimbursement as
hereinafter provided, any letters patent included in MRC CC Patent
Rights by duly filing all necessary papers and paying any fees required
by the patent laws of the particular country in which such letters
patent were granted;
(d) to notify OSI and SANKYO in a timely manner of any decision to
abandon a pending patent application or an issued patent included in
MRC CC Patent
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Rights. Thereafter, OSI and SANKYO shall have the option, at their
expense, of continuing to prosecute any such pending patent application
or of keeping the issued patent in force; and
(e) to provide to OSI and SANKYO every six (6) months a report
detailing the status of all patent applications that are part of MRC CC
Patent Rights.
6.4 Reimbursement of Expenses. SANKYO will reimburse OSI and MRC CC for
their reasonable out-of-pocket costs incurred after the Effective Date
to file, prosecute, issue, maintain and extend patent applications and
Patent Rights within OSI Patent Rights and MRC CC Patent Rights in
countries in which SANKYO has requested OSI or MRC CC to file that OSI
or MRC CC would have not otherwise filed. OSI and MRC CC will reimburse
SANKYO for its reasonable out-of-pocket costs incurred after the
Effective Date to file, prosecute, issue, maintain and extend patent
applications and Patent Rights within the SANKYO Patent Rights in
countries which OSI and MRC CC has requested SANKYO to file that SANKYO
would not have otherwise filed.
6.5 Patent Extensions. In the event any patent in OSI Patent Rights, MRC CC
Patent Rights, SANKYO Patent Rights or Joint Patent Rights is eligible
for extension or Supplementary Protection Certificate, the Research
Committee shall determine for which Patent Rights, applications for
extension shall be filed.
6.6 Legal Action.
6.6.1 Actual or Threatened Disclosure or Infringement. When
information comes to the attention of SANKYO to the effect
that any Patent Rights or Joint Technology
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Improvements relating to a Product have been or are threatened
to be unlawfully disclosed or that any of the rights granted
by or created pursuant to this Agreement have been or are
threatened to be unlawfully infringed, SANKYO shall have the
right, at its expense, to take such action as it may deem
necessary to prosecute or prevent such unlawful disclosure or
infringement, including the right to bring or defend any suit,
action or proceeding involving any such disclosure or
infringement. SANKYO shall notify OSI and MRC CC promptly of
the receipt of any such information and of the commencement of
any such suit, action or proceeding. If SANKYO determines that
it is necessary or desirable for OSI or MRC CC to join any
such suit, action, or proceeding, OSI or MRC CC, as the case
may be, shall execute all papers and perform such other acts
as may be reasonably required to permit SANKYO to act in OSI's
or MRC CC's name. In the event that SANKYO brings a suit, it
shall have the right to reimburse itself out of any sums
recovered in such suit or in its settlement for all reasonable
costs and expenses of every kind and character, including
reasonable attorney's fees, involved in the prosecution of any
suit. If Sankyo does not, within one hundred twenty (120) days
after giving notice to OSI and MRC CC of the above-described
information, notify OSI or MRC CC, as the case may be, of
SANKYO's intent to bring suit against any infringer, OSI or
MRC CC shall have the right to bring suit for such alleged
infringement, but it shall not be obligated to do so, and may
cause SANKYO to be joined as a party plaintiff, if
appropriate, in which event OSI or MRC CC, as the case may be,
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shall hold SANKYO free, clear, and harmless from any and all
costs and expenses of such litigation, including attorney's
fees, and any sums recovered in any such suit or in its
settlement shall belong to OSI or MRC CC, as the case may be.
Each party shall always have the right to be represented by
counsel of its own selection and at its own expense in any
suit instituted by the other for infringement, under the terms
of this Section. If SANKYO lacks standing to bring any such
suit, action, or proceeding, then OSI or MRC CC, as the case
may be, shall do so at the request of SANKYO and at SANKYO's
expense.
6.6.2 Defense of Infringement Claims. If OSI or MRC CC, as the case
may be, or SANKYO, any of their respective licensees or their
customers shall be sued by a third party for infringement of a
patent because of the research, development, manufacture, use
or sale of Products, the party which has been sued shall
promptly notify the other parties to this Agreement in writing
of the institution of such suit. OSI or MRC CC, as the case
may be, shall give to SANKYO all authority (including the
right to exclusive control of the defense of any such suit,
action, or proceeding and the exclusive right to compromise,
litigate, settle, or otherwise dispose of any such suit,
action, or proceeding), information and assistance necessary
to defend or settle any such suit, action, or proceedings. The
parties shall share the expenses of implementing the agreed
defense on the following basis;
(a) If the alleged infringement is due to the use of OSI
Technology and/or OSI Technology Improvement, then the
expenses shall be borne by OSI.
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(b) If the alleged infringement is due to the use of
SANKYO Technology and/or SANKYO Technology Improvements, then
the expenses shall be borne by SANKYO.
(c) If the alleged infringement is due to the use of MRC
CC Technology and/or MRC CC Technology Improvements, then the
expenses shall be borne by MRC CC.
(d) If the alleged infringement is due to the use of Joint
Technology Improvements, then the expenses shall be borne by
equally among SANKYO, OSI and MRC CC.
6.6.3 Hold Harmless. OSI or MRC CC agree to defend, protect,
indemnify, and hold SANKYO and any sublicensee of SANKYO
harmless, from and against any liability, claim, loss, cost or
expense arising from any claim or suit by a third party to the
extent that such claim or suit is due to the exercise by
SANKYO of any rights granted hereunder by OSI or MRC CC
pursuant to OSI Patent Rights, OSI Technology, or OSI
Technology Improvements, or MRC CC Patent Rights, MRC CC
Technology, or MRC CC Technology Improvements, as the case may
be, infringing upon the patent or other intellectual property
rights of said third party. SANKYO agrees to defend, protect,
indemnify, and hold harmless OSI and MRC CC from and against
any liability, claim, loss, cost, or expense arising from any
claim or suit for product liability based upon SANKYO's
manufacture, use, or sale of any Product.
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6.6.4 Third Party Licenses. If SANKYO and OSI and MRC CC agree the
manufacture, use, or sale by SANKYO of a Product in any
country would infringe a patent owned by a third party, SANKYO
and OSI and MRC CC shall attempt to obtain a license under
such patent. If SANKYO obtains a license under such patent,
any payments made by SANKYO to such third party shall be
deductible from royalty payments due from SANKYO to OSI and
MRC CC pursuant to Section 5.7.3 of this Agreement. All such
payments shall be on a country by country and patent by patent
basis. If either SANKYO, OSI or MRC CC is of the opinion that
such manufacture, use, or sale would not infringe such patent
owned by a third party, SANKYO may, at its election, bring
suit against such third party seeking a declaration that such
patent is invalid or not infringed by SANKYO's manufacture,
use or sale of the Product involved, or may bring opposition,
nullification, or other proceedings against such patent, as
appropriate. If SANKYO is successful in such suit, SANKYO
shall continue to pay royalties in such country as provided in
Article 5. If SANKYO does not bring such suit or is
unsuccessful in such suit, it shall join OSI or MRC CC, as the
case may be, in an attempt to obtain a license under such
patent, and royalty payments made by SANKYO to such third
party for such license shall be as hereinabove provided.
7. Other Rights of the Parties.
7.1 Other Rights of the Parties. Except as hereinabove provided, OSI and
MRC CC shall have the right to apply for, and receive grants or
contracts from, public and private sources, including without
limitation, the National-Institutes of Health, the
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American Cancer Society, and the National Science Foundation. Except as
hereinabove provided, OSI and MRC CC shall also have the right to enter
into coverture arrangements, whether written or oral, with third
parties to develop any product.
7.2 Acquisition of Rights from Third Parties. During the Contract Period,
OSI, MRC CC and SANKYO shall promptly notify each other in writing of
any and all opportunities to acquire in any manner from third parties,
technology or patents which may be useful in, or may relate to the
Research Program. The Research Committee shall decide if such rights
should be acquired and, if so, whether by OSI, SANKYO or MRC CC. If
acquired, such rights shall become part of Joint Technology
Improvements or Joint Patent Rights.
8. Term, Extension, Termination and Disengagement.
8.1 Term. Subject to the continuing rights and obligations set forth in
Articles 2.4, 2.8, 3, 4, 5 and 6, this Agreement and the parties
obligations pursuant to the Research Program shall expire at the end of
the Contract Period. It is further contemplated by the parties however
that a more definitive License Agreement superseding the license
granted herein will be executed by the parties prior to commencement of
clinical trials and/or the sale of any Product, such License Agreement
to be based on the license terms and conditions set forth herein.
Notwithstanding such intention, the parties further acknowledge that in
the event they fail to execute such additional License Agreement, the
license granted
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SANKYO hereunder in respect of the Compounds and Products shall remain
in full force and effect according to its terms and conditions.
8.2 Events of Termination. The following events shall constitute events of
termination ("Events of Termination").
(a) Any material representation or warranty by OSI, MRC CC
or SANKYO, or any of its officers, under or in connection with
this Agreement shall prove to have been incorrect in any
material respect when made.
(b) OSI, MRC CC or SANKYO shall fail in any material
respect to perform or observe any term, covenant or
understanding contained in this Agreement or in any of the
other documents or instruments delivered pursuant to, or
concurrently with, this Agreement, and any such failure shall
remain unremedied for thirty (30) days after written notice to
the failing party. In the event that a material failure on the
part of MRC CC shall have remained unremedied for thirty (30)
days of written notice by SANKYO to MRC CC as provided above
in this Article 8.2 (b) said event being deemed by SANKYO to
be a material breach of this Agreement, then SANKYO may, at
its sole discretion, permit OSI to cure said material breach
and in such event OSI shall be able to substitute itself for
MRC CC hereunder.
(c) The occurrence of a change of control of one of the
parties. A change of control shall be deemed to have occurred
if, after the Effective Date of this Agreement, (i) any Person
acquires a majority of the shares of a party or acquires a
right to control the voting of a majority of shares of a
party, (ii) any Person
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acquires sufficient shares or the right to control the votes
of sufficient shares to enable such Person to elect a majority
of the board of directors of a party, or (iii) any Person
acquires the power through share ownership or otherwise to
designate a majority of the board of directors of a party.
8.3 Termination. Upon the occurrence of any Event of Termination, the party
not responsible may, by notice to the other party, terminate this
Agreement, but such termination shall not affect the obligation to pay
royalties hereunder or under the License Agreement contemplated hereby;
provided, however, that Article 2.4.2 shall survive any termination of
this Agreement hereunder.
9. Representations and Warranties.
OSI, SANKYO, MRC C and MRC CC each represents and warrants as follows:
9.1 It is a corporation duly organized, validly existing and is in good
standing under the laws of its place of incorporation, is qualified to
do business and is in good standing as a foreign cooperation in each
jurisdiction in which the conduct of its business or the ownership of
its properties requires such qualification and has all requisite power
and authority, corporate or otherwise, to conduct its business as it is
now being conducted, to own, lease and operate its properties and to
execute, deliver and perform this Agreement.
9.2 The execution, delivery and performance by it of this Agreement have
been duly authorized by all necessary corporate action and do not and
will not (a) require any consent or approval of its stockholders, (b)
violate any provision of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award
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presently in effect having applicability to it or any provision of its
charter or by-laws or (c) result in a breach of or constitute a default
under any material agreement, mortgage, lease, license, permit or other
instrument or obligation to which it is a party or by which it or its
properties may be bound or affected.
9.3 This Agreement is a legal, valid and binding obligation of it
enforceable against it in accordance with its terms and conditions,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws, from time to
time in effect, affecting creditor's rights generally.
9.4 It is not under any obligation to any Person, contractual or otherwise,
that is conflicting or inconsistent in any respect with the terms of
this Agreement or that would impede the diligent and complete
fulfillment of its obligations.
9.5 It has good and marketable title to or valid leases or licenses for,
all of its properties, rights and assets necessary for the fulfillment
of its responsibilities and the Research Program, subject to no claim
of any third party other than the relevant lessors or licensors.
9.6 OSI, MRC CC, and SANKYO each have the right to grant to each other the
licenses granted by them pursuant to this Agreement, and that the
licenses so granted do not conflict with or violate the terms of any
agreement between them and any third party.
9.7 OSI and MRC CC hereby covenant and agree to cooperate and take all
steps reasonable requested by SANKYO to register or otherwise perfect
in any country of the Territory any and all of the rights granted
SANKYO hereunder.
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10. Notices.
All notices shall be mailed via certified mail, return receipt
requested, or courier addressed as follows, or to such other address as
may be designated from time to time:
If to SANKYO: To SANKYO at 0-00, Xxxxxxxxx, 0-xxxxx,
Xxxxxxxxxxx, Xxxxx 000, Xxxxx
Attention: Director, Biological Research
Laboratories
If to OSI: To OSI at its address as set forth at the beginning
of this Agreement
Attention: President
If to MRC CC: To MRC CC at its address as set forth at the
beginning of this Agreement
Attention: Commercial Director
Notices shall be deemed given as of the date of receipt.
11. Governing Law and Disputes.
This Agreement shall be construed in accordance with the laws of the
State of New York. Any disputes, controversies or difficulties which
may arise out of or in relation to this Agreement shall be settled
amicably between the parties. In the event the parties fail to do so,
such dispute, controversy, etc. shall be finally settled by arbitration
at the place of the defendant's domicile by the International Chamber
of Commerce ("ICC") pursuant to the arbitration rules of the ICC and by
arbitrators to be appointed according to said rules. The award in the
said arbitration shall be final and binding upon the parties.
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12. Miscellaneous.
12.1 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted
assigns.
12.2 Headings. Paragraph headings are inserted for convenience of reference
only and do not form a part of this Agreement.
12.3 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original.
12.4 Amendment: Waiver etc. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a
written instrument executed by each party or, in the cause of waiver,
by the party or parties waiving compliance. The delay or failure of any
party at any time or times to require performance of any provision
shall in no manner affect their rights at a later time to enforce the
same.
12.5 No Third Party Beneficiaries. No person not a party to this Agreement,
including any employee of any party to this Agreement, shall have or
acquire any rights by reason of this Agreement. Nothing contained in
this Agreement shall be deemed to constitute a partnership between the
parties or with any other Person.
12.6 Assignment and Successors. This Agreement may not be assigned by either
party, except that the parties may assign this Agreement and their
rights and interests, in whole or in part, to any of their Affiliates,
any purchaser of all or substantially all of its assets or to any
successor corporation resulting from any merger or consolidation with
or into such corporation, provided, however, in the
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event an Affiliate to which this Agreement is assigned no longer is as
Affiliate as such term is defined herein, such assignment shall, at the
option of the other parties hereto, become null and void and revert
back to the assignor.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized representatives.
SANKYO COMPANY, LIMITED
By:_____________________________________
Xxxxxxxxx Xxxx
Title: MANAGING DIRECTOR
ONCOGENE SCIENCE, INC.
By:_____________________________________
Title: Sr. Vice President, Drug
Discovery
MRC COLLABORATIVE CENTRE
By:_____________________________________
Title: COMMERCIAL DIRECTOR
WITNESS:
SUMMIT PHARMACEUTICALS
INTERNATIONAL CORP.
By:_____________________________
AKIKAZU TAMAI
Title: PRESIDENT & CEO
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