EXHIBIT 4.9
ANTIBODY LICENSE AGREEMENT
BETWEEN
HUMAN GENOME SCIENCES, INC.
AND
CAMBRIDGE ANTIBODY TECHNOLOGY LTD./1/
-
FEBRUARY 29,2000
-----------------------------
/1/ [***] indicates that text has been deleted, which is subject to a
-
confidential treatment request. This text has been filed with the SEC on a
supplemental basis.
ANTIBODY COLLABORATION,
OPTION AND LICENSE AGREEMENT
This Agreement ("Agreement") dated as of the 29th of February 2000 (the
"Effective Date"), is entered into by Human Genome Sciences, Inc. ("HGS"), a
Delaware corporation, having its principal offices at 0000 Xxx Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, Xxxxxx Xxxxxx of America and Cambridge Antibody
Technology, Ltd., ("CAT"), an English corporation having its registered office
at Xxx Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxxxxxxxxx XX0 0XX, Xxxxxx Xxxxxxx.
The parties hereby agree as follows:
1. DEFINITIONS
1.1 "AFFILIATE" shall mean any individual or entity directly or indirectly
controlling, controlled by or under common control with, the specified
individual or entity. For purposes of this Agreement, the direct or indirect
ownership of fifty percent (50%) or more of the outstanding voting securities of
an entity, or the right to receive fifty percent (50%) or more of the profits or
earnings of an entity shall be deemed to constitute control.
1.2 "ANTIBODY" shall mean a molecule or a gene encoding such a molecule
comprising or containing one or more immunoglobulin variable domains or parts of
such domains or any existing or future fragments, variants, modifications or
derivatives thereof.
1.3 "CAT ANTIBODY LIBRARY" shall mean CAT's complete scFv phage antibody
library in existence on the Effective Date, and all updates, additions and
improvements to such library made by CAT during the five-year period commencing
on the Effective Date. This library shall not include an
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antibody library made by ribosome display, and such a ribosome display library
shall not be considered an update, addition or improvement to CAT ANTIBODY
LIBRARY.
1.4 "CAT ANTIBODY PATENTS" shall mean (1) the Winter II Patent Rights
(European Patent Number, EPO36884/PCT/GB89/01334, and its US equivalents namely
the Winter/Xxxxxx Applications, US Numbers 07/933,958, 07/933,959,
07/941/761,07/941,762, and their European equivalents), (2) the XxXxxxxxxx
Patent Rights (European Patent Number EPO584877BI/PCTGB91/01134, and U.S.
equivalents) and (3) the Xxxxxxxxx Patents Rights (US Number 5,885,793, and its
European equivalents) all licensed to CAT pursuant to the license agreement
dated January 7, 1997 between CAT and the Medical Research Council ("MRC").
1.5 "CAT BACKGROUND IP" means all PATENT RIGHTS, KNOW-HOW and MATERIAL
(including the CAT ANTIBODY LIBRARY) which CAT owns or which CAT is licensed to
use which directly relate to ANTIBODIES at the Effective Date or during the
RESEARCH TERM or IMPROVEMENTS which CAT owns before or after the Effective Date
which directly relate to the ANTIBODIES, including, but not limited to, (1) the
Winter II Patent Rights (European Patent Number, EPO36884/PCT/GB89/01334, and
its US equivalents namely the Winter/Xxxxxx Applications, US Numbers 07/933,958,
07/933,959, 07/941,761, 07/941,762, and their European equivalents), (2) the
XxXxxxxxxx Patent Rights (European Patent Number EPO584877BI/PCTGB91/01134, and
U.S. equivalents) and (3) the Xxxxxxxxx Patent Rights (US Number 5,885,793, and
its European equivalents) all licensed to CAT pursuant to the license agreement
dated January 7, 1997 between CAT and the Medical Research Council ("MRC"). In
addition, for the sake of clarity, CAT BACKGROUND IP shall include PATENT
RIGHTS, KNOW-HOW, and MATERIAL related to CAT's ProAb and ProxiMol technologies.
1.6 "CAT RESEARCH ANTIGEN"shall mean an HGS ANTIGEN that is identified by
CAT after June 30, 2001 pursuant to Paragraph 5.1.
1.7 "CAT THIRD PARTY ROYALTY OBLIGATIONS" means all Royalties payable by
CAT under license agreements with third parties subject to the mutual offset
provisions provided for in such
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agreements as of the Effective Date and which cover activities conducted by CAT
for itself or on behalf of HGS pursuant to Article 7 or by HGS pursuant to the
licenses granted to HGS by CAT pursuant to this Agreement including but not
limited to the agreements set out in Exhibit A.
1.8 "CONFIDENTIAL INFORMATION" means any scientific, technical, trade or
business information disclosed by one Party to the other Party which is (a)
disclosed in writing or other tangible form and labeled "CONFIDENTIAL" at the
time of disclosure or (b) disclosed verbally and identified as confidential at
the time of disclosure and subsequently summarized and confirmed in writing as
confidential within twenty (20) days of such oral disclosure. "Confidential
Information" does not include information which (a) was known to the Receiving
Party at the time it was disclosed, other than by previous disclosure by the
Disclosing Party, as evidenced by written records at the time of disclosure: (b)
at the time of disclosure or later becomes publicly known under circumstances
involving no breach of this Agreement; (c) is lawfully and in good faith made
available to the Receiving Party by a third party who did not derive it from the
Disclosing Party and who imposes no obligation of confidence on the Receiving
Party; (d) is developed by the Receiving Party independent of any disclosure by
the Disclosing Party, as evidenced by the Receiving Party's written records; or
(e) is required by law or regulation to be disclosed.
1.9 "COST OF GOODS" shall mean, with respect to a product, the sum of the
actual direct and indirect costs for active and other ingredients, materials,
packaging, labeling, salary and benefits for direct labor and an allocated
portion of direct overhead, incurred in manufacturing such product, consistently
applied among all products manufactured, as determined in accordance with
generally accepted accounting principles in the United States consistently
applied ("GAAP").
1.10 "DIAGNOSTIC PRODUCT" shall mean a PRODUCT for use to predict, detect
or identify a disease in a human or to determine the presence of a pathologic
condition in a human.
1.11 "DOSSIER" shall mean, with respect to an antigen, a written document,
together with copies of the data underlying the information contained therein,
satisfying the requirements of Paragraph
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8.2 and containing research information reasonably sufficient to demonstrate
that one or more ANTIBODIES to such antigen satisfies the requirements of
Exhibit B.
1.12 "EXCLUSIVE CAT PRODUCT" shall mean a product for use in the FIELD
comprising an ANTIBODY which binds to an CAT RESEARCH ANTIGEN for which CAT has
exercised an option under Paragraph 2.10 and HGS is obligated to grant a license
pursuant to Paragraph 5.3.
1.13 "EXCLUSIVE HGS PRODUCT" shall mean a product for use in the FIELD
comprising an ANTIBODY which binds to an HGS ANTIGEN for which HGS has exercised
an option under Paragraph 2.2 and CAT is obligated to grant a license pursuant
to Paragraph 3.1.
1.14 "FIELD" shall mean any human therapeutic or diagnostic use.
1.15 "FTE" shall mean a full time equivalent employee assigned to the HGS
pursuant to Paragraph 7.3.
1.16 "HGS ANTIGEN" shall mean an antigen for which HGS has HGS BACKGROUND
IP.
1.17 "HGS BACKGROUND IP" shall mean Patent Rights, Know-How and Material
which HGS owns or which HGS is licensed to use which directly relate to an
antigen at the Effective Date or during the RESEARCH TERM or IMPROVEMENTS which
HGS owns before or after the Effective Date which directly relate to an antigen.
1.18 "HGS RESEARCH ANTIGEN" shall mean a HGS ANTIGEN for which HGS has a
PATENT RIGHT.
1.19 "HGS RESEARCH PRODUCT" shall mean a product consisting of multiple
antibody-antigen combinations and/or multiple antibodies (whether on microarray
chips or in other format) sold by HGS to a THIRD PARTY for research purposes
only, provided that at least [***] of the antibodies contained in such product
are directed to HGS RESEARCH ANTIGENS and further provided that such
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product contains at least [***], such HGS RESEARCH ANTIGENS. An EXCLUSIVE HGS
PRODUCT cannot be a HGS RESEARCH PRODUCT.
1.20 "IMPROVEMENT" shall mean any improvements, modifications, and
adaptations (whether patentable or otherwise) to any part of either CAT
BACKGROUND IP or HGS BACKGROUND IP which may arise under research conducted by
CAT and/or HGS pursuant to this Agreement. It is recognized and agreed that an
ANTIBODY to an HGS ANTIGEN and any improvements, modifications or adaptations to
such ANTIBODY will not be considered IMPROVEMENTS for the purposes of this
Agreement.
1.21 "IND" shall mean an Investigational New Drug application filed with
the Food and Drug Administration in the United States of America, or the
successor agency thereto (the "FDA"), or any equivalent filing with the
applicable foreign regulatory authority to commence human clinical testing of a
PRODUCT in any other country.
1.22 "SUBSCRIPTION AGREEMENT" shall mean the Subscription Agreement between
the parties executed simultaneously with this Agreement.
1.23 "KNOW-HOW" shall mean all unpatented information, whether or not
patentable, relating to materials, methods, processes, techniques and data for
the development, manufacture, use or sale of an antigen, ANTIBODY or PRODUCT
which is known to a Party and which a Party is free to transfer or disclose
without violating contractual obligations to any third party.
1.24 "MATERIAL" shall mean any chemical or biological substances, including
but not limited to any: (a) organic or inorganic chemical element or compound;
(b) nucleotide or nucleic acid sequences, including DNA and RNA sequences,
derived by natural or synthetic means; (c) gene; (d) vector or construct,
including but not limited to plasmids phagemids, phages or viruses; (e) host
organism, including bacteria, fungi, algae, protozoa and yeast; (f) other
genetic material or micro-organism; (g) gene product, including but not limited
to any peptide or amino acid sequence, protein, enzyme or ANTIBODY, and any
fragment thereof conferring targeting properties in vitro and/or in vivo; (h)
eukaryotic or prokaryotic cell line
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or expression system or any development strain or produce of that cell line or
expression system; (i) ANTIBODY or ANTIBODY producing cell line, including
hybridomas; (j) drug or pro-drug; or (k) assay or reagent.
1.25 "NET SALES" shall mean the amounts invoiced on the sales of a product
by a Party, its sublicensees and AFFILIATES to independent, unrelated third
parties in bona fide arms' length transactions, less the following deductions
properly documented actually allowed and taken by such third parties and not
otherwise recovered by or reimbursed by the Party, its AFFILIATES or
sublicensees: (a) trade, cash and quantity discounts, including charge backs;
(b) taxes on sales (such as sales or use taxes) to the extent added to the sales
price and set forth separately as such in the total amount invoiced; (c)
freight, insurance and other transportation charges to the extent added to the
sales prices and set forth separately as such in the total amount invoiced; (d)
amounts repaid or credited by reason of rejections, defects or returns, or
because of retroactive price reductions, or due to governmental laws or
regulations requiring rebates; (e) import duties; and means further the amount
of fair market value of all other consideration received by the Party, or its
sublicensees or AFFILIATES in respect of the product, whether such consideration
is in cash, payments in kind, exchange or other forms; but does not mean sales
of the product between or among a Party and its sublicensees and/or AFFILIATES.
In the event a product is sold in combination with other active components
("Combination Product"), NET SALES for purposes of royalty payments on the
Combination Products shall be calculated by multiplying the NET SALES of the
Combination Product by the fraction A/(A/B), where A is the gross selling price
of the product sold separately (i.e., without the other active components) and B
is the gross selling price of the other active components. In the event that no
such separate sales are made NET SALES of the Combination Product by C/(C+D)
where C is the fully allocated cost of the product (not including the other
active components) and D is the fully allocated cost of such other active
components such costs being determined using generally accepted accounting
procedures consistently applied.
1.26 "OPERATING PROFIT" shall mean with respect to a product sold by either
party or AFFILIATES, NET SALES less (i) COST OF GOODS; (ii) costs and expenses
of Phase IV studies (i.e.,
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post-marketing clinical studies); and (iii) marketing, promotion, distribution
and selling expenses of HGS or CAT or their AFFILIATES as the case may be, all
as determined in accordance with GAAP.
1.27 "PATENT RIGHTS" shall mean patent applications or patents, author
certificates, inventor certificates, utility certificates, improvement patents,
and models and certificates of addition, and all foreign counterparts of them
and includes divisions, renewals, continuations, continuations-in-part,
extensions, reissues, substitutions, confirmations, registrations,
revalidations, or additions of or to them as well as any supplementary
protection certificate or any other post patent expiration extension of patent
protection in respect to them.
1.28 "PRODUCT" shall mean an EXCLUSIVE CAT PRODUCT and/or an EXCLUSIVE HGS
PRODUCT.
1.29 "RESEARCH PROGRAM IP" shall mean all PATENT RIGHTS and KNOW-HOW that
arises under research conducted by CAT and/or HGS pursuant to this Agreement.
1.30 "RESEARCH TERM" shall mean the period beginning on the Effective Date
and ending on December 31, 2009.
1.31 "SPC" shall mean a right based upon an underlying patent such as a
Supplementary Protection Certificate.
1.32 "THERAPEUTIC PRODUCT" shall mean a PRODUCT for use in the treatment or
prevention of a disease or disorder in humans.
1.33 "THIRD PARTY" shall mean any party, other than HGS or CAT or an
AFFILIATE of CAT or HGS.
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2. LICENSE GRANTS AND COVENANTS
HGS Antibody Products
---------------------
2.1 CAT grants to HGS a royalty-free non-exclusive, worldwide
license (without the right to grant sublicenses) under CAT BACKGROUND IP to
perform research and development with respect to HGS ANTIGENS during the
RESEARCH TERM.
2.2 CAT hereby grants to HGS non-exclusive, non-transferable options
to obtain a license under Paragraph 2.3 for EXCLUSIVE HGS PRODUCTS directed to
HGS ANTIGENS, with each such option being exercisable in accordance with the
provisions of Paragraph 3.1 until the end of the RESEARCH TERM.
2.3 With respect to EXCLUSIVE HGS PRODUCTS directed to each HGS
ANTIGEN for which HGS has exercised an option under Paragraph 2.2 and CAT has
the right and is obligated to grant a license pursuant to Paragraph 3.1, CAT
hereby grants to HGS an exclusive worldwide license (with the right to grant
sublicenses) under CAT BACKGROUND IP to research, develop, make, have made, use,
import, offer to sell and sell such EXCLUSIVE HGS PRODUCTS in the FIELD.
HGS Research Products
---------------------
2.4 Subject to the rights and obligations set out in the agreements
listed in Exhibit C, CAT hereby grants to HGS non-exclusive, non-transferable
options to obtain a license under Paragraph 2.5 for HGS RESEARCH PRODUCTS, with
each such option being exercisable in accordance with the provisions of
Paragraph 4.1 until the end of the RESEARCH TERM.
2.5 With respect to HGS RESEARCH PRODUCTS for which HGS has exercised
an option under Paragraph 2.4 and CAT has the right and is obligated to grant a
license pursuant to Paragraph 4.1, CAT hereby grants to HGS a nonexclusive
worldwide license (with the right to grant sublicenses) under CAT BACKGROUND IP
to research, develop, make, have made, use, import, offer to sell and sell such
HGS RESEARCH PRODUCTS.
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2.6 CAT hereby grants to HGS nonexclusive, non-transferable options
to obtain a license for a THIRD PARTY under Paragraph 2.7 for an antibody
directed to an HGS RESEARCH ANTIGEN contained in an HGS RESEARCH PRODUCT, with
each such option being exercisable in accordance with the provisions of
Paragraph 4.2 until the end of the RESEARCH TERM, provided that (i) HGS shall
pay to CAT a payment of [***] when a THIRD PARTY obtains a license under
Paragraph 2.7 and (ii) if the THIRD PARTY does not file an IND in respect of
such HGS RESEARCH ANTIGEN within [***] of the grant of the license, such license
shall become non-exclusive.
2.7 With respect to an antibody directed to an HGS ANTIGEN contained
in an HGS RESEARCH PRODUCT for which HGS has exercised an option under Paragraph
2.6 and CAT has the right and is obligated to grant a license pursuant to
Paragraph 4.2, CAT hereby grants to HGS an exclusive worldwide license, with the
right to grant a sublicense to a THIRD PARTY, and for the sole purpose of
granting such a sublicense, under CAT BACKGROUND IP to research, develop, make,
have made, use, import, offer to sell and sell such antibody.
2.8 It is expressly understood by both parties that the license
granted pursuant to Paragraph 2.7 is solely for the benefit of a THIRD PARTY who
has purchased an HGS RESEARCH PRODUCT and who has used such product to identify
an antibody for which such THIRD PARTY desires to obtain a license to CAT
BACKGROUND IP. HGS' ability to grant such a license is not intended to be a
blanket right to grant licenses to CAT BACKGROUND IP and is not to be used by
HGS or a THIRD PARTY to avoid milestone and royalty payments that would
otherwise be owed pursuant to a license granted pursuant to Paragraph 2.3. HGS
shall only grant such licenses in good faith. If at any time, CAT reasonably
determines that HGS is in breach of its obligations under this paragraph, CAT
may initiate the dispute resolution procedure set out in Exhibit D. During the
pendency of the dispute, HGS shall not be entitled to grant any licenses for the
benefit of a THIRD PARTY.
CAT Antibody Products
---------------------
2.9 Effective 12:01 am EST, July 1, 2001, HGS grants to CAT a non-
exclusive, non-transferable, worldwide license (without the right to grant
sublicenses) under HGS BACKGROUND IP to
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perform research and development with respect to CAT RESEARCH ANTIGENS during
the RESEARCH TERM.
2.10 Subject to the terms and conditions of this Agreement, including
but not limited to Paragraphs 5.3.4 and 5.7, HGS hereby grants to CAT non-
exclusive, non-transferable options to obtain a license under Paragraph 2.11 for
EXCLUSIVE CAT PRODUCTS for each of up to six (6) CAT RESEARCH ANTIGENS, with
each such option being exercisable in accordance with the provisions of
Paragraph 5.3 until the end of the RESEARCH TERM.
2.11 With respect to EXCLUSIVE CAT PRODUCTS directed to each CAT
RESEARCH ANTIGEN for which CAT has exercised an option under Paragraph 2.10 and
HGS has the right and is obligated to grant a license pursuant to Paragraph 5.3,
HGS hereby grants to CAT an exclusive worldwide license (with the right to grant
sublicenses) under HGS BACKGROUND IP to research, develop, make, have made, use,
import, offer to sell and sell such EXCLUSIVE CAT PRODUCTS in the FIELD. Any
such exclusive license shall be subject to HGS' right to develop, make and use
antibodies (other than such EXCLUSIVE CAT PRODUCTS) to such CAT RESEARCH ANTIGEN
(and to grant an AFFILIATE or a THIRD PARTY such right) solely for the internal
research and development of products that do not comprise an ANTIBODY.
Miscellaneous
-------------
2.12 CAT shall use HGS BACKGROUND IP only as (sub)licensed and
permitted hereunder HGS shall use CAT BACKGROUND IP only as (sub)licensed and
permitted hereunder.
2.13 The rights and (sub)licenses granted to HGS by CAT are
(sub)licensable and/or transferable by HGS only with respect to an EXCLUSIVE HGS
PRODUCT or an HGS RESEARCH PRODUCT and in accordance with the provisions of this
Agreement. The rights and (sub)licenses granted to CAT by HGS are
(sub)licensable and/or transferable by CAT only with respect to an EXCLUSIVE CAT
PRODUCT and in accordance with the provisions of this Agreement.
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2.14 No rights, other than those expressly set forth in this Agreement,
are granted to CAT or HGS hereunder, and no additional rights shall be granted
to CAT or HGS by implication, estoppel or otherwise.
2.15 For the purposes of this Agreement, but without limitation, CAT shall
not have the right or the obligation to grant HGS a license under CAT BACKGROUND
IP to use an antigen to research, develop, make, have made, use, offer to sell
and import related EXCLUSIVE HGS PRODUCTS OR HGS RESEARCH PRODUCTS in the FIELD,
[***].
2.16 For the purposes of this Agreement, but without limitation, HGS shall
not have the right or the obligation to grant CAT a license under HGS BACKGROUND
IP to use an antigen to research, develop, make, have made, use, offer to sell,
sell and import related EXCLUSIVE CAT PRODUCTS in the FIELD, [***].
3. HGS ANTIBODY PRODUCTS
3.1 HGS' option under Paragraph 2.2 shall be exercisable as follows:
3.1.1 If HGS desires to exercise its option for an HGS ANTIGEN,
HGS shall so notify CAT in writing and deliver to CAT a DOSSIER in accordance
with Article 8. HGS may not exercise its option for any HGS ANTIGEN unless one
or more ANTIBODIES developed by HGS to such HGS ANTIGEN satisfies the
requirements of Exhibit B.
3.1.2 Within [***] after receipt of such notice and DOSSIER, CAT
shall notify HGS in writing if CAT does not have the right or obligation as
defined in Paragraph 2.15) to grant HGS the license under Paragraph 2.3 for such
HGS ANTIGEN. If CAT does not have such right, CAT shall have no obligation to
grant HGS the license under Paragraph 2.3 for such HGS ANTIGEN. Unless CAT
timely notifies HGS in writing that it does not have such a right or obligation,
the exclusive license grant under Paragraph 2.3 for EXCLUSIVE HGS PRODUCTS
directed to such HGS ANTIGEN shall be effective upon the expiration of such
[***] period.
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3.2 HGS or its AFFILIATES or sublicensees shall not (and shall not attempt
or purport to) administer to humans any ANTIBODY or HGS RESEARCH PRODUCT or
submit any regulatory application or other submission to obtain approval
therefor, unless and until HGS has obtained a license under Paragraph 2.3 for
EXCLUSIVE HGS PRODUCTS directed to such HGS ANTIGEN or a THIRD PARTY has
obtained a license for an antibody directed to such HGS RESEARCH ANTIGEN
pursuant to Paragraph 2.7.
4. HGS RESEARCH PRODUCTS
4.1 HGS' option under Paragraph 2.4 shall be exercisable as follows:
4.1.1 If HGS desires to exercise its option for an HGS RESEARCH
PRODUCT, HGS shall so notify CAT in writing and deliver to CAT a list of all
antibodies contained in the product which are directed to HGS RESEARCH ANTIGENS
or other antigens.
4.1.2 Within [***] after receipt of such notice and list, CAT
shall notify HGS in writing if CAT does not have the right or obligation as
defined in Paragraph 2.15 to grant HGS the nonexclusive license under Paragraph
2.5 for each antibody contained in such product. If CAT does not have such a
right, CAT shall have no obligation to grant HGS the license under Paragraph 2.5
for such HGS RESEARCH PRODUCT. Unless CAT timely notifies HGS in writing that
it does not have such right or obligation, the exclusive license grant under
Paragraph 2.5 for such HGS RESEARCH PRODUCT shall be effective upon the
expiration of such [***] period.
4.2 HGS' option under Paragraph 2.6 shall be exercisable as follows:
4.2.1 If HGS desires to exercise its option to obtain a license
for a THIRD PARTY under Paragraph 2.7 for an antibody directed to an HGS ANTIGEN
contained in an HGS RESEARCH PRODUCT, HGS shall so notify CAT in writing.
4.2.2 Within [***] days after receipt of such notice, CAT shall
notify HGS in writing if CAT does not have the right or obligation as defined in
Paragraph 2.15 to grant HGS the license under
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Paragraph 2.7 for such antibody. If CAT does not have such a right, CAT shall
have no obligation to grant HGS the license under Paragraph 2.7 for such
antibody. Unless CAT timely notifies HGS in writing that it does not have such a
right or obligation, the exclusive license grant under Paragraph 2.7 for such
antibody shall be effective upon the expiration of such [***] period.
5. CAT ANTIBODY PRODUCTS
5.1 Beginning July 1, 2001 and continuing throughout the RESEARCH TERM,
CAT shall notify HGS in writing of each CAT RESEARCH ANTIGEN, with which CAT
desires to conduct research and development pursuant to Paragraph 2.10 and in
accordance with the provisions of this Agreement. Within [***] after receipt of
such notice, HGS shall notify CAT in writing if HGS does not have the right or
the obligation as defined in Paragraph 2.15 to grant CAT an exclusive license
under Paragraph 2.11 for such antigen. Notwithstanding anything to the contrary
in this Agreement, not more than [***] antigens, for which CAT has not exercised
its option under Paragraph 2.9 and has not been granted a license under
Paragraph 2.11, may be designated as CAT RESEARCH ANTIGENS at any one time.
5.2 For each CAT RESEARCH ANTIGEN, during the RESEARCH TERM, HGS shall
provide CAT with (a) such reasonable quantities of such purified protein, cell
lines or other biological material for the production, screening or assaying of
ANTIBODIES, as HGS has reasonably available and CAT requests, and (b) such
reasonable quantities of available isolated clones as CAT requests.
5.3 CAT's option under Paragraph 2.10 shall be exercisable as follows:
5.3.1 If CAT desires to exercise its option for a CAT RESEARCH
ANTIGEN, CAT shall so notify HGS in writing and deliver to HGS a DOSSIER in
accordance with Article 8. CAT may exercise its option for any CAT RESEARCH
ANTIGEN unless one or more ANTIBODIES developed by CAT to such CAT RESEARCH
ANTIGEN satisfies the requirements of Exhibit B.
5.3.2 Within [***] after receipt of such notice and DOSSIER, HGS
shall notify CAT in writing if HGS does not have the right (or the obligation as
defined in Paragraph 2.15) to grant CAT the
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license under Paragraph 2.11 for such CAT RESEARCH ANTIGEN. If HGS does not have
such right or obligation, HGS shall not be obligated to grant to CAT the
exclusive license under Paragraph 2.11 for such CAT RESEARCH ANTIGEN. Unless HGS
timely notifies CAT in writing that it does not have such a right or obligation,
the exclusive license grant under Paragraph 2.11 for EXCLUSIVE CAT PRODUCTS
directed to such CAT RESEARCH ANTIGEN shall be effective upon the expiration of
such [***] period.
5.3.3 CAT may not exercise the options under Paragraph 2.10 to
obtain exclusive licenses under Paragraph 2.11 for EXCLUSIVE CAT PRODUCTS
directed to more than six (6) CAT RESEARCH ANTIGENS during the term of this
Agreement, except as provided in Paragraphs 5.3.4 and 5.7.
5.3.4 If, after exercising its option to an EXCLUSIVE CAT PRODUCT,
CAT determines that development and commercialization of such product is
commercially unfeasible, CAT shall have the option to claim pursuant to this
Paragraph 5.3 a different CAT RESEARCH ANTIGEN as a replacement for the CAT
RESEARCH ANTIGEN originally claimed. This option may only be exercised within
one year of HGS' grant of the original license pursuant to Paragraph 5.3.2 or
prior to filing of an IND for the original EXCLUSIVE CAT PRODUCT, whichever is
earlier. In no event, may CAT exercise its option pursuant to this paragraph
more than six (6) times in total for all EXCLUSIVE CAT PRODUCTS, except that in
the event that HGS exercises its option pursuant to Paragraph 5.5 to co-
develop/co-market an EXCLUSIVE CAT PRODUCT for which CAT had exercised one of
its six replacement options, such replacement shall not count against CAT's six
replacement options.
5.4 CAT or its AFFILIATES or sublicensees shall not (and shall not attempt
or purport to) administer to humans any ANTIBODY directed to an CAT RESEARCH
ANTIGEN, or file or submit any regulatory application or other submission to
obtain approval therefor, unless and until CAT has exercised an option under
Paragraph 2.10 and obtained a license under Paragraph 2.11 for an EXCLUSIVE CAT
PRODUCT directed to such CAT RESEARCH ANTIGEN.
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5.5 Upon the filing of an IND by CAT for an EXCLUSIVE CAT PRODUCT, CAT
shall offer to HGS by written notice the option to co-develop/co-market such
EXCLUSIVE CAT PRODUCT. Such written notice shall contain a complete description
of the product and all preclinical data on the product and shall include a copy
of the IND filing. Such notice shall also include a detailed accounting of the
out-of-pocket expenses expended by CAT with respect to manufacturing and pre-
clinical studies of such product. Within [***] receipt of such notice by HGS,
HGS shall notify CAT whether it wishes to exercise its option to co-develop/co-
market such product. If HGS notifies CAT that it wishes to exercise its option,
the parties shall promptly form a JOINT MANAGEMENT COMMITTEE ("JMC"") which
shall be responsible for the management of all future preclinical, clinical and
commercial activities.
5.6 The JMC shall consist of three (3) representatives of each party, but
each party shall have only one vote. All decisions of the JMC shall be by
unanimous vote.
5.6.1 Each party shall notify the other party in writing of its
initial representatives to the JMC within thirty (30) days after exercise by HGS
of its option. Each party may substitute one or more representatives from time
to time effective upon written notice to the other party.
5.6.2 The JMC shall meet not less than once each quarter so long
as development and commercialization of a product is being diligently pursued by
the parties hereunder, at such times and places as mutually agreed by the
parties, alternating between Cambridge, England and Rockville, Maryland or such
other places as the parties mutually agree. If the parties mutually agree, any
meeting of the JMC may be held by telephone or video conference. At each such
meeting, the JMC representatives shall discuss and make decisions with respect
to the development of the products.
5.6.3 The JMC shall direct and coordinate all activities related
to the planning and implementation of clinical trials with respect to a product.
As soon as reasonably practicable, the JMC will prepare and approve a
development plan for the product, which shall describe in detail the development
work with respect to such product, which party shall perform which tasks, the
budget for such work for the ensuing year and including, in the case of the
first such annual budget, the remaining months of the then
15
current year, as well as milestones, time frames and operating plans (as amended
from time to time by the JMC, the "DEVELOPMENT PLAN"). The DEVELOPMENT PLAN
shall be reviewed annually by the JMC and the annual budget for the ensuing year
shall be approved by the JMC no later than December 15/th/ of the then current
year. The DEVELOPMENT PLAN shall allocate responsibilities to the respective
parties consistent with their respective capabilities and, to the extent
possible, so as to maximize the expeditious and cost-effective development of
the product.
5.7 Notwithstanding Section 5.5, HGS shall not have the option to co-
develop/co-market more than eighteen (18) EXCLUSIVE CAT PRODUCTS, unless the
parties otherwise mutually agree. In addition, HGS shall only have the right to
exercise its option rights under this paragraph [***] without the prior
agreement of CAT. Each EXCLUSIVE CAT PRODUCT for which HGS exercises its option
shall not count against the total number of CAT EXCLUSIVE PRODUCTS that CAT may
develop and commercialize.
5.8 Upon exercise of its option, HGS shall reimburse CAT the [***]
exclusivity fee paid pursuant to Paragraph 6.12(a) and fifty percent (50%) of
the out-of-pocket expenses expended by CAT with respect to manufacturing and
pre-clinical studies of such product. Each party shall fund or contribute fifty
percent (50%) of the future effort involved in all development, marketing, sales
and other costs associated with the development and commercialization of such
EXCLUSIVE CAT PRODUCT and shall share equally in such activities as mutually
agreed to by the parties, in return for fifty percent (50%) of the OPERATING
PROFIT therefrom, in lieu of the royalties and milestones set forth in Article
6. At any time after completion of a clinical trial, either HGS or CAT may opt
out of further co-development/co-marketing of such EXCLUSIVE CAT PRODUCT, in
which event the remaining party shall pay to the other the royalties and future
milestones set out in Article 6 as if such product had not been jointly
developed, provided that if HGS is the party who opts out, then the remaining
EXCLUSIVE CAT PRODUCT shall not count against the total number of CAT EXCLUSIVE
PRODUCTS that CAT may develop and commercialize.
6. PAYMENTS AND ROYALTIES
16
6.1 In consideration of the licenses granted and to be granted hereunder,
HGS will pay to CAT on the Effective Date twelve million U.S. dollars
($12,000,000).
Exclusive HGS Products
----------------------
6.2 Subject to Paragraphs 6.4, 6.5, and 6.6, for each EXCLUSIVE HGS
PRODUCT which is a THERAPEUTIC PRODUCT, HGS shall pay to CAT the following
royalties and milestone payments (which milestone payments under this Paragraph
6.2 shall be due and payable within thirty (30) days after the applicable
milestone event is achieved by or on behalf of HGS, its AFFILIATE or
(sub)licensee):
(1) [***] upon the effective date of the license granted pursuant to
Paragraphs 2.3 and 3.1.2 for such EXCLUSIVE HGS PRODUCT
(2) [***] upon the start of a Phase I clinical trial for such
EXCLUSIVE HGS PRODUCT;
(3) [***] upon start of a Phase III clinical trial for such EXCLUSIVE
HGS PRODUCT;
(4) [***] upon first submission of a BLA for such EXCLUSIVE HGS
PRODUCT;
(5) [***] upon the first regulatory approval of such EXCLUSIVE HGS
PRODUCT for commercial sale; and
(6) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT
sold by HGS, its AFFILIATES and (sub)licensees.
HGS shall have no obligation to pay each milestone payment to CAT under this
Paragraph 6.2 more than once for each different EXCLUSIVE HGS PRODUCT. For
purposes of determining the milestone payments owing under this Paragraph 6.2,
an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any
other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the
same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the
formulation or means of administration thereof.
17
6.3 Subject to Paragraph 6.4, for each EXCLUSIVE HGS PRODUCT which is a
DIAGNOSTIC PRODUCT, HGS shall pay to CAT the following royalties and milestone
payments (which milestone payments under this Paragraph 6.3 shall be due and
payable within thirty (30) days after the applicable milestone event is achieved
by or on behalf of HGS, its AFFILIATES or (sub)licensees):
(1) [***] upon first submission of a BLA for such EXCLUSIVE HGS
PRODUCT;
(2) [***] upon the first regulatory approval of such EXCLUSIVE HGS
PRODUCT for commercial sale; and
(3) a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT
sold by HGS, its AFFILIATES and (sub)licensees.
HGS shall have no obligation to pay each milestone payment to CAT under this
Paragraph 6.3 more than once for each different EXCLUSIVE HGS PRODUCT. For
purposes of determining the milestone payments owing under this Paragraph 6.3,
an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any
other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the
same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the
formulation or means of administration thereof.
6.4 Royalty obligations under Paragraphs 6.2 and 6.3, with respect to an
EXCLUSIVE HGS PRODUCT, shall terminate on a country-by-country basis and on an
EXCLUSIVE HGS PRODUCT by EXCLUSIVE HGS PRODUCT basis on the later of (i) [***]
after first country-wide launch of such EXCLUSIVE HGS PRODUCT in such country or
(ii) expiration of the last to expire patent on CAT BACKGROUND IP Licensed to
HGS under this Agreement which covers the process, method of making, making,
having made, importing, offering to sell or using or selling of such EXCLUSIVE
HGS PRODUCT in the country in which such EXCLUSIVE HGS PRODUCT was developed,
made, sold or used.
6.5 In the event that HGS is required to pay a royalty to a THIRD PARTY in
order to practice or have practiced the technology claimed in CAT's ANTIBODY
PATENTS with respect to an EXCLUSIVE
18
HGS PRODUCT, HGS shall be able to offset [***] of such third party royalties
against the royalties owed to CAT pursuant to Paragraph 6.2, provided that the
royalty owed to CAT on any such EXCLUSIVE HGS PRODUCT shall not be less than
[***] of Net Sales in any year in which such royalty is owed.
6.6 In the event that CAT THIRD PARTY ROYALTY OBLIGATIONS are reduced from
the amounts that CAT owes or would owe as of the Effective Date taking into
account all applicable offsets, CAT shall promptly notify HGS in writing of such
reduction, and HGS' royalty obligation under Paragraph 6.2 shall be reduced by
an amount equal to [***] of such reduction.
Nonexclusive HGS RESEARCH PRODUCTS
----------------------------------
6.7 Subject to Paragraph 6.11, HGS shall pay to CAT [***]of all revenue
received by HGS from the sale of a HGS RESEARCH PRODUCT, [***] of the antibodies
contained in such HGS RESEARCH PRODUCT are directed to an HGS ANTIGEN, or [***]
of all revenue received by HGS from the sale of a HGS RESEARCH PRODUCT, [***] of
the antibodies contained in such HGS RESEARCH PRODUCT are directed to an HGS
ANTIGEN.
6.8 Notwithstanding Paragraph 6.7 but subject to Paragraph 6.11, in no
event shall HGS pay to CAT an amount less than the amount equivalent to [***] of
the NET SALES of such HGS RESEARCH PRODUCT in any year in which such royalty is
owed.
6.9 Subject to Paragraph 6.11, in the event that HGS grants a license to a
THIRD PARTY for an antibody pursuant to its license grant under Paragraph 2.7,
HGS shall pay to CAT a royalty of [***] of NET SALES of such antibody sold by
such THIRD PARTY and its (sub)licensees
6.10 Subject to Paragraph 6.11, in the event that HGS grants a license to a
THIRD PARTY for the sale of a product (e.g., a small molecule or a non-antibody
protein product) derived from the use of a HGS RESEARCH PRODUCT, other than a
license granted to a THIRD PARTY for an antibody pursuant to a license grant
under Paragraph 2.7, HGS shall pay to CAT [***] of all revenue received by HGS
from such THIRD PARTY.
19
6.11 Royalty obligations under Paragraphs 6.7, 6.8, 6.9, and 6.10, with
respect to an HGS RESEARCH PRODUCT or other product shall terminate on a
country-by-country basis and on a product by product basis on the later of (i)
ten (10) years after first country-wide launch of such product in such country
or (ii) expiration of the last to expire patent on CAT BACKGROUND IP licensed to
HGS under this Agreement which covers the process, method of making, making,
having made, importing, offering to sell or using or selling of such product in
the country in which such product was developed, made, sold or used.
Exclusive CAT Products
----------------------
6.12 Subject to Paragraph 6.14, for each EXCLUSIVE CAT PRODUCT which is a
THERAPEUTIC PRODUCT, CAT shall pay to HGS the following royalties and milestone
payments (which milestone payments under this Paragraph 6.12 shall be due and
payable within thirty (30) days after the applicable milestone event is achieved
by or on behalf of CAT, its AFFILIATE or (sub)licensee):
(1) [***] upon the effective date of the license granted pursuant to
Paragraph 2.11 and 5.3.2 for such EXCLUSIVE CAT PRODUCT;
(2) [***] upon the start of a Phase I clinical trial for such
EXCLUSIVE CAT PRODUCT;
(3) [***] upon the start of a Phase III clinical trial for such
EXCLUSIVE CAT PRODUCT;
(4) [***] upon first submission of a BLA for such EXCLUSIVE CAT
PRODUCT;
(5) [***] upon the first regulatory approval of such EXCLUSIVE CAT
PRODUCT for commercial sale; and
(6) a royalty of [***] of NET SALES of such EXCLUSIVE CAT PRODUCT
sold by CAT, its AFFILIATES and (sub)licensees.
20
CAT shall have no obligation to pay each milestone payment to HGS under this
Paragraph 6.12 more than once for each different EXCLUSIVE CAT PRODUCT. For
purposes of determining the milestone payments owing under this Paragraph 6.12,
an EXCLUSIVE CAT PRODUCT shall constitute the same EXCLUSIVE CAT PRODUCT as any
other EXCLUSIVE CAT PRODUCT, if such EXCLUSIVE CAT PRODUCT is directed to the
same CAT RESEARCH ANTIGEN as the other EXCLUSIVE CAT PRODUCT, without regard to
the formulation or means of administration thereof.
6.13 Subject to Paragraph 6.14, for each EXCLUSIVE CAT PRODUCT which is a
DIAGNOSTIC PRODUCT, CAT shall pay to HGS the following royalties and milestone
payments (which milestone payments under this Paragraph 6.13 shall be due and
payable within thirty (30) days after the applicable milestone event is achieved
by or on behalf of CAT, its AFFILIATE or (sub)licensee):
(1) [***] upon first submission of a BLA for such EXCLUSIVE CAT
PRODUCT;
(2) [***] upon the first regulatory approval of such EXCLUSIVE CAT
PRODUCT for commercial sale; and
(3) a royalty of [***] of NET SALES of such EXCLUSIVE CAT PRODUCT by
CAT, its AFFILIATES and (sub)licensees.
CAT shall have no obligation to pay each milestone payment to HGS under this
Paragraph 6.13 more than once for each different EXCLUSIVE CAT PRODUCT. For
purposes of determining the milestone payments owing under this Paragraph 6.13,
an EXCLUSIVE CAT PRODUCT shall constitute the same EXCLUSIVE CAT PRODUCT as any
other EXCLUSIVE CAT PRODUCT, if such EXCLUSIVE CAT PRODUCT is directed to the
same CAT RESEARCH ANTIGEN as the other EXCLUSIVE CAT PRODUCT, without regard to
the formulation or the means of administration thereof.
6.14 Royalty obligations under Paragraph 6.12 and 6.13, with respect to an
EXCLUSIVE CAT PRODUCT, shall terminate on a country-by-country basis and on an
EXCLUSIVE CAT PRODUCT by EXCLUSIVE CAT PRODUCT basis on the later of (i) ten
(10) years after first country-wide launch of such
21
EXCLUSIVE CAT PRODUCT in such country or (ii) expiration of the last to expire
patent in HGS BACKGROUND IP licensed to CAT under this Agreement which covers
the making, having made, importing, offering to sell or using or selling of such
EXCLUSIVE CAT PRODUCT in the country in which such EXCLUSIVE CAT PRODUCT was
developed, made, sold or used.
6.15 In the event that CAT is required to pay a royalty to a THIRD PARTY
in order to practice or have practiced the technology claimed in HGS' BACKGROUND
IP with respect to an EXCLUSIVE CAT PRODUCT, CAT shall be able to offset [***]
of such THIRD PARTY royalties against the royalties owed to HGS pursuant to
Paragraph 6.12, provided that the royalty owed to HGS on any such EXCLUSIVE CAT
PRODUCT shall not be less than [***] of Net Sales in any year in which such
royalty is owed.
Miscellaneous
-------------
6.16 For purposes of this Article 6, (a) "Phase I clinical trial" shall
mean a human clinical trial in any country that is intended to initially
evaluate the safety of a PRODUCT in subjects, or that would otherwise satisfy
the requirements of 21 CFR 312.21(a); (b) "Phase III clinical trial" shall mean
a human clinical trial in any country the results of which could be used as
pivotal to establish safety and efficacy of a PRODUCT as a basis for a marketing
approval application submitted to the FDA or the appropriate regulatory
authority of such other country, or that would otherwise satisfy the
requirements of 21 CFR 312.21(c); (c) a trial shall be "started" upon the
enrollment of the first patient for such trial; and (d) a "BLA" shall mean a
Biologics License Application, Product License Application, New Drug Application
or other application for marketing approval of a product submitted to the FDA
for its foreign equivalent submitted to the appropriate regulatory authority of
any other country.
6.17 If, at the time when any milestone payment listed in the applicable
Paragraph under this Article 6 with respect to a PRODUCT is due from a party,
such party has not paid all other milestone payments (if any) previously listed
in such Paragraph with respect to such PRODUCT, then at such time such party
shall pay all such unpaid milestone payments (if any) previously listed in such
Paragraph with respect to such PRODUCT. If, at the time of the first commercial
sale of a PRODUCT by a party, its AFFILIATE or permitted (sub)licensee, such
party has not paid all milestone payments (if any) listed in the
22
applicable Paragraph under this Article 6 with respect to such PRODUCT, then at
such time such party shall pay all such unpaid milestone payments (if any)
listed in such Paragraph with respect to such PRODUCT.
6.18 The manner in which statements and remittances of royalty and other
payments are handled is as set forth in Article 13 hereof.
6.19 CAT shall have the sole responsibility for payment, and shall pay
all of CAT's THIRD PARTY ROYALTY OBLIGATIONS owed on PRODUCTS under this
Agreement.
7. TECHNOLOGY TRANSFER, TRAINING AND SUPPORT
7.1 Within thirty (30) days of the Effective Date, CAT shall provide to
HGS phage aliquots corresponding to the CAT ANTIBODY LIBRARY. Thereafter on a
monthly basis, CAT shall provide to HGS sufficient phage aliquots to support
HGS's research efforts. CAT shall provide updates, additions and improvements to
the CAT ANTIBODY LIBRARY on annual basis during the [***] period commencing on
the Effective Date, provided that if CAT makes any substantial update, addition
or improvement to the CAT ANTIBODY LIBRARY, CAT shall provide such substantial
update, addition or improvements to HGS within thirty (30) days.
7.2 Within forty-five (45) days of the Effective Date, CAT will send to
HGS facilities for a period of [***] an employee of appropriate experience and
technical proficiency who will use reasonable efforts to train HGS employees in
the use of the CAT ANTIBODY LIBRARY, including training in methods of phage
antibody selection, phage amplification in E. Coli, and ELISA analysis of phage
antibody specificity, high throughput analysis of protein tissue expression
patterns using CAT's ProAb technology, and epitope function analysis and
agonist/antagonist lead generation using CAT's ProxiMol technology, as far as
such items may be capable of training.
7.3 CAT shall provide to HGS at CAT's facilities [***] FTEs per year
(including space and material supplies for such FTEs) for three years commencing
on the Effective Date. Such FTEs, at HGS'
23
direction, shall be available to perform phage antibody selection, phage
amplification, ELISA analysis, antibody optimization, high throughput analysis
of protein tissue expression patterns using CAT's ProAb technology, and epitope
function analysis and agonist/antagonist lead generation using CAT's ProxiMol
technology and other related activities. Subject to CAT's agreement which shall
not be unreasonably withheld, HGS shall have the option to purchase additional
CAT assistance at a rate of [***] per FTE during the three years commencing on
the Effective Date, and thereafter at a mutually agreed upon rate.
7.3.1 CAT shall appoint a project manager ("CAT PROJECT MANAGER")
to supervise the work of the [***] FTEs and such CAT Project Manager shall
coordinate with an HGS designated project leader ("HGS PROJECT LEADER") all work
to be done pursuant to this Paragraph.
7.3.2 Within thirty (30) days of the Effective Date, the HGS
PROJECT LEADER, in consultation with the CAT Project Manager, shall prepare a
six-month work plan for the [***] FTEs.
7.3.3 The CAT PROJECT MANAGER shall be responsible for supervising
the [***] FTEs and insuring that all diligent efforts are made to complete the
objectives of the work plan in a timely and efficient manner.
7.3.4 At least once a quarter, the HGS PROJECT LEADER and the CAT
PROJECT MANAGER shall meet to discuss the progress made with respect to the work
plan, and based on that progress, the HGS PROJECT LEADER shall prepare a work
plan for the following six months.
7.4 To assist CAT with the selection of CAT RESEARCH ANTIGENS, beginning
July 1, 2001 and continuing throughout the RESEARCH TERM, HGS shall conduct
searches of its functional genomic database and shall provide CAT with the
results of such searches as set forth below:
7.4.1 CAT shall provide to HGS specific therapeutic opportunities
for which CAT wishes to identify proteins as potential CAT RESEARCH ANTIGENS and
the criteria by which HGS should search its database. To assist CAT in
formulating such searches. HGS shall make available to CAT an HGS
bioinformatics specialist and an HGS scientist to work with CAT to identify
search criteria for
24
selecting HGS genes and proteins most likely to meet the specific therapeutic
opportunities identified by CAT.
7.4.2 HGS shall permit [***] CAT employees access to HGS personnel
at HGS' facilities during normal business hours during the RESEARCH TERM for
[***] per employee per year to design such searches of HGS' database for the
sole purpose of identifying CAT RESEARCH ANTIGENS.
7.4.3 HGS will screen its database using the mutually agreed upon
search criteria to identify candidate genes, and will provide to CAT a list of
[***] based on the search criteria. For each such gene, HGS will provide to CAT
all data and information related to the gene and the protein encoded by the
gene, which is owned by HGS with the right to grant access or to which HGS
otherwise has the right to grant access, regarding (i) xxxxxxxx xxxx with
respect to such gene and protein; (ii) the tissue or cellular distribution
relating to such gene and protein; (iii) references to any literature
publications; (iv) patent status (i.e., information related to HGS filing dates,
priority claim(s) and any related patents and patents applications, and any non-
confidential information known by HGS regarding THIRD PARTY patents and patent
applications) related to such gene and protein; and (v) the biological function
of such gene and protein that is derived from HGS' high throughput biological or
functional assays or screens and DNA array analyses. HGS will not provide to
CAT data and information resulting from HGS' research programs specifically
directed toward individual genes or proteins.
8. DOSSIER
8.1 Subject to the terms and conditions of this Agreement, HGS and CAT
shall obtain license rights under Paragraph 2.3 and 2.11 by being the first to
exercise the applicable option in accordance with Paragraphs 3.1 and 5.3.
8.2 A DOSSIER regarding ANTIBODIES to an antigen (whether an HGS ANTIGEN
or a CAT RESEARCH ANTIGEN), at a minimum, shall contain the following
information: (a) summaries of all research and pre-clinical development results
available to the submitting party regarding the applicable
25
antigen and ANTIBODIES directed thereto and (b) such information as is
reasonably sufficient to demonstrate that one or more ANTIBODIES to such antigen
satisfies the requirements of Exhibit B.
8.3 Within [***] after HGS or CAT delivers to the other party the
applicable notice of exercise and DOSSIER regarding ANTIBODIES to an antigen
pursuant to Paragraph 3.1 or 5.3 (as applicable), the other party shall notify
the submitting party if at least one (1) ANTIBODY to such antigen described in
such DOSSIER meets the requirements of Exhibit B. The failure of the other party
to respond within such period shall be deemed to be notification that at least
one (1) such ANTIBODY to such antigen meets the requirements of Exhibit B.
8.4 Within [***] after the receipt of any written notification pursuant
to Paragraph 8.3 that a DOSSIER does not meet the requirements of this
Agreement, the parties shall meet to discuss such notification. If the parties
are unable to agree, within [***] after the receipt of any written notification
pursuant to Paragraph 8.3, whether or not at least one (1) ANTIBODY to such
antigen described in such DOSSIER meets the requirements of Exhibit B, the
parties shall immediately submit such DOSSIER , and any supporting data that
either party reasonably desires, to a neutral expert qualified to determine
whether or not at least one (1) ANTIBODY to such antigen described in such
DOSSIER meets the requirements of Exhibit B. If the parties remain unable to
agree, [***] after the receipt of any written notification pursuant to Paragraph
8.3, whether or not at least one (1) ANTIBODY to such antigen described in such
DOSSIER meets the requirements of Exhibit B, then either party shall have the
right to submit such dispute to binding arbitration under Article 17.
8.5 While a dispute is pending as to whether HGS or CAT is entitled to
exclusive rights to an antigen and ANTIBODIES to such antigen, all notices and
DOSSIERS submitted to HGS and CAT under this Agreement regarding ANTIBODIES to
such antigen shall be dated and held and no rights shall be granted by either
party hereunder to such antigen and ANTIBODIES to such antigen pending
resolution of the dispute to such antigen and ANTIBODIES to such antigen.
26
8.6 It is understood that any sequence ID number used under this
Agreement is for identification purposes, and a claim to exclusivity to a given
antigen shall include ANTIBODIES directed to all clones, sequences and
polypeptides associated with each such antigen as to which rights are obtained
under this Agreement and shall further include ANTIBODIES directed to muteins
and fragments of such antigen.
9. PRODUCT DILIGENCE
9.1 HGS shall use reasonable efforts to actively research, develop and
obtain regulatory approvals as expeditiously as reasonably practicable to market
in major markets throughout the world at least one EXCLUSIVE HGS PRODUCT for
each HGS ANTIGEN for which it has exercised its option under Paragraph 2.2 and
has obtained a license under Paragraph 2.3, and following such approval to
market such PRODUCT.
9.1.1 During the term of this Agreement and for a period of five
(5) years thereafter, HGS shall keep complete and accurate records of its
activities conducted under this Agreement regarding the commercialization of
EXCLUSIVE HGS PRODUCTS and the results thereof. Within thirty (30) days after
the end of each calendar year during the term of this Agreement, HGS shall
prepare and provide CAT with a reasonably detailed written report of such
activities and results, through such date.
9.1.2 If the diligence requirements set forth in this Paragraph
9.1 are not met with respect to any EXCLUSIVE HGS PRODUCT, CAT shall have the
right to terminate this Agreement pursuant to Paragraph 14.3 with respect to
such EXCLUSIVE HGS PRODUCT.
9.2 CAT shall use reasonable efforts to actively research, develop and
obtain regulatory approvals as expeditiously as reasonably practicable to market
in major markets throughout the world at least one EXCLUSIVE CAT PRODUCT for
each CAT RESEARCH ANTIGEN for which it has exercised its option under Paragraph
2.10 and has obtained a license under Paragraph 2.11, and following such
approval to market such PRODUCT.
27
9.2.1 During the term of this Agreement and for a period of five
(5) years thereafter, CAT shall keep complete and accurate records of its
activities conducted under this Agreement regarding the commercialization of
EXCLUSIVE CAT PRODUCTS and the results thereof. Within thirty (30) days after
the end of each calendar year during the term of this Agreement, CAT shall
prepare and provide HGS with a reasonably detailed written report of such
activities and results, through such date.
9.2.2 If the diligence requirements set forth in this Paragraph
9.2 are not met with respect to any EXCLUSIVE CAT PRODUCT, HGS shall have the
right to terminate this Agreement pursuant to Paragraph 14.3 with respect to
such EXCLUSIVE CAT PRODUCT.
9.3 In the event that a party or its AFFILIATE sells PRODUCT to a THIRD
PARTY that also purchases other products or services from such party or its
AFFILIATE, and such party or its AFFILIATE discounts the purchase price of such
PRODUCT to a greater degree than it generally discounts the price of its other
products to such customer, then in such case the NET SALES for the sale of such
PRODUCT to such THIRD PARTY shall be deemed to equal the arm's length price that
third parties would generally pay for such PRODUCT alone when not purchasing any
other product or service from such party or its AFFILIATE. For purposes of this
provision "discounting"" includes establishing the list price at a lower-than-
normal level.
10. CONFIDENTIALITY
10.1 During the term of this Agreement and for a period of five (5) years
following the expiration or earlier termination hereof, each party shall
maintain in confidence the CONFIDENTIAL INFORMATION of the other party, and
shall not disclose, use or grant the use of the CONFIDENTIAL INFORMATION of the
other party except on a need-to-know basis to such party's AFFILIATES,
directors, officers and employees, such party's THIRD PARTY licensors of
intellectual property rights (sub)licensed hereunder, and such party's
consultants and collaborators, to the extent such disclosure is reasonably
necessary in connection with such party's activities as expressly authorized by
this Agreement. To the extent that disclosure to any person is authorized by
this Agreement, prior to disclosure, a party shall
28
obtain written agreement of such person to hold in confidence and not disclose,
use or grant the use of the CONFIDENTIAL INFORMATION of the other party except
as expressly permitted under this Agreement. Each party shall notify the other
party promptly upon discovery of any unauthorized use or disclosure of the other
party's CONFIDENTIAL INFORMATION. Upon the expiration or earlier termination of
this Agreement, each party shall return to the other party all tangible items
regarding the CONFIDENTIAL INFORMATION of the other party and all copies
thereof, provided, however, that each party shall have the right to retain one
-------- -------
(1) copy for its legal files for the sole purpose of determining its obligations
hereunder.
10.2 No public announcement concerning (i) the existence or terms of this
Agreement, (ii) research and/or discoveries made by one party, (iii) milestones
achieved by one party, or (iv) exercise by one party of rights and options
granted under this Agreement, shall be made, either directly or indirectly, by
any other party to this Agreement without prior written notice and, except as
may be legally required, or as may be legally required for a public offering of
securities, or as may be required for recording purposes, without first
obtaining the approval of the other party and agreement upon the nature and text
of such announcement, such agreement and/or approval not to be unreasonably
withheld. The party desiring to make any such public announcement shall inform
the other party of the proposed announcement of disclosure at least five (5)
business days prior to public release and shall provide the other party with a
written copy thereof, in order to allow such other party to comment upon such
announcement or disclosure. This Paragraph shall not apply to any information in
a public announcement that is information essentially identical to that
contained in a previous public announcement agreed to pursuant to this
paragraph.
10.3 The confidentiality obligations under Paragraphs 10.1 and 10.2 shall
not apply to the extent that a party is required to disclose information by
applicable law, regulation or order of a governmental agency or a court of
competent jurisdiction; provided, however, that to the extent practicable, such
-------- -------
party (a) shall provide advance written notice thereof to the other party and
consult with the other party prior to such disclosure with respect thereto, and
(b) shall provide the other party with
29
reasonable assistance, as requested by the other party, to object to any such
disclosure or to request confidential treatment thereof, and (c) shall take
reasonable action to avoid and/or minimize the extent of such disclosure.
11. INTELLECTUAL PROPERTY OWNERSHIP
11.1 Nothing in this Agreement transfers or licenses any right, title or
interest to CAT BACKGROUND IP or HGS BACKGROUND IP except as expressly set out
herein.
11.2 Any and all RESEARCH PROGRAM IP shall be owned by HGS from the
moment of its development or other origination, and CAT hereby assigns and will
assign any and all rights, title and interest in RESEARCH PROGRAM IP to HGS.
11.3 Notwithstanding Paragraph 11.2, any and all IMPROVEMENTS shall be
owned by the Party who owns the underlying technology to which the IMPROVEMENTS
are made regardless of which Party makes the IMPROVEMENT.
12. PATENT PROSECUTION AND LITIGATION
12.1 In connection with the preparation, filing, prosecution (including
oppositions) and maintenance of patents on RESEARCH PROGRAM IP related to
EXCLUSIVE CAT PRODUCTS, HGS shall endeavor to obtain commercially reasonable
patent protection (under the circumstances) in the RESEARCH PROGRAM IP and shall
consider in good faith the interests of CAT in so doing. HGS (a) shall consult
with CAT regarding the preparation of such patents, and shall implement all
reasonable requests of CAT; (b) shall supply CAT with a copy of each such patent
application as filed, together with notice of its filing date and serial number;
(c) shall consult with CAT regarding the prosecution and maintenance of such
patents, and shall implement all reasonable requests of CAT; and (d) shall
inform CAT promptly of the allowance and issuance of each such patent, together
with the date and patent number thereof, and shall provide CAT with a copy of
such patent as allowed and then as issued; and (e) shall prosecute all
reexaminations and reissues as reasonably requested by CAT.
30
12.2 If HGS elects to abandon any patent application (for which it does not
file a continuation application), not to pursue the filing of any foreign patent
application or not to maintain any patent directed to an EXCLUSIVE CAT PRODUCT,
HGS shall give CAT written notice thereof not less than (90) days prior to the
last day permitted to timely continue such patent application or to maintain
such patent and protect its rights under this Paragraph 12.2. CAT shall have
the right, at its sole cost and in its sole cost and in its sole discretion, to
assume control of the preparation, filing, prosecution (including oppositions)
and maintenance of such patent application or patent.
12.3 Each party shall cooperate with the other, execute all lawful papers
and instruments and make all rightful oaths and declarations as may be
reasonably necessary in the preparation, filing, prosecution and maintenance of
the patents or any other rights related to RESEARCH PROGRAM IP.
12.4 Both parties will provide the other reasonable assistance to enable
the other to prepare, file, prosecute and maintain patents pursuant to this
Article 11.
12.5 In the event of the institution of any suit by a THIRD PARTY,
12.5.1 against CAT, its AFFILIATES or (sub)licensees (other than
HGS) to the extent it is for patent infringement involving the manufacture, use,
import, offer for sale, sale, distribution or marketing of EXCLUSIVE CAT
PRODUCT, CAT shall promptly notify HGS in writing. As between HGS and CAT, CAT
shall be solely responsible for the cost and expense of such action and any
liability that results therefrom.
12.5.2 against HGS, its AFFILIATES or (sub)licensees (other than
CAT) to the extent it is for patent infringement involving the manufacture, use,
import, offer for sale, sale, distribution or marketing of EXCLUSIVE HGS
PRODUCT, HGS shall promptly notify CAT in writing. As between HGS and CAT, HGS
shall be solely responsible for the cost and expense of such action and any
liability that results therefrom.
31
The party defending an action under this Paragraph 12.5 shall have full control
over the conduct of the action, including settlement thereof provided such
settlement shall not be made without the prior written consent of the other
party if it would adversely affect the rights of such other party.
12.6 In the event that HGS or CAT becomes aware of actual or threatened
infringement of a patent related to CAT BACKGROUND IP, HGS BACKGROUND IP or
RESEARCH PROGRAM IP that claims an EXCLUSIVE CAT PRODUCT or EXCLUSIVE HGS
PRODUCT, or the use thereof, that party shall promptly notify the other in
writing. The owner of such patent shall have the first right but not the
obligation to bring, at its own expense, an infringement action against any
THIRD PARTY and to use the other party's name in connection therewith. If the
owner of the patent does not commence a particular infringement action within
ninety (90) days, the other party, after notifying the owner in writing, shall
be entitled to bring such infringement action, in its own name and/or in the
name of the patent owner, at its own expense to the extent that such party is
licensed thereunder. The foregoing notwithstanding, in the event that an alleged
infringer certifies pursuant to 21 U.S.C. (S) 355(b)(2)(A)(iv) against an issued
patent related to CAT BACKGROUND IP, HGS BACKGROUND IP or RESEARCH PROGRAM IP
that claims an EXCLUSIVE CAT PRODUCT or EXCLUSIVE HGS PRODUCT, or the use
thereof, as between the patent owner and the owner of the product, the party
receiving notice of such certification shall immediately notify the other party
of such certification, and if fourteen (14) days prior to expiration of the
forty five (45) day period set forth in 21 U.S.C. (S) 355(c)(3)(C), the owner of
the patent fails to commence an infringement action, the party receiving notice,
in its sole discretion, at its own expense and to the extent that it is licensed
under the patent, shall be entitled to bring such infringement action in its own
name and/or in the name of the patent owner. The party conducting an action
under this Paragraph 12.6 shall have full control over its conduct, including
settlement thereof provided such settlement shall not be made without the prior
written consent of the other licensing party or licensed party if it would
adversely affect the rights of such other party. The licensing party (i.e., the
patent owner) and the licensed party (i.e., the owner of the product) shall
reasonably assist one another and cooperate in any such litigation at the
other's request, each such party paying its own costs and expenses. The party
conducting the litigation shall reimburse the other party for its reasonable and
actual out-of-pocket expenses incurred at the request of
32
the party conducting the litigation for assisting in the litigation, which
reimbursement shall be made within thirty (30) days of receipt by the party
conducting the litigation of itemized invoices from the assisting party
documenting such expenses.
12.7 Any recovery made by a party as the result of an action for patent
infringement it has conducted under Paragraph 12.6 shall be distributed as
follows:
(1) The party conducting the action shall recover its [***], and
then shall reimburse the other party for any [***].
(2) To the extent that the recovery from such action exceeds the
total of item (a), [***]; provided, however, that to the extent
-------- -------
that (i) the recovery is based on an [***], and (ii) the party
conducting the action would have incurred [***], the party to
whom such [***] shall receive a proportion of the excess
recovery corresponding to [***].
12.8 The parties shall periodically keep one another reasonably informed of
the status of their respective activities regarding any such litigation of
settlement thereof.
12.9 To the extent that the owner of a patent related to CAT BACKGROUND IP,
or HGS BACKGROUND IP or RESEARCH PROGRAM IP also owns a product (for which human
clinical trials or commercial sales have commenced) which is covered by a
granted claim of said patent, the owner of said patent shall have the first
right to seek extensions of the terms of the patent and to seek to obtain SPCs.
If the owner of a patent does not own a product covered by a grant claim of said
patent, then the owner of a PRODUCT (for which human clinical trials or
commercial sales have commenced) which is licensed under and is covered by a
granted claim of said patent shall have the right to seek extensions of the
terms of the patent and to seek to obtain SPCs. Where more than one (1) product
is covered by a granted claim of a patent, as between CAT and HGS, the patent
owner shall have the right to seek extensions of the terms of the patent and to
obtain SPCs, provided that the other party may submit to the patent owner, in
33
writing, a request to obtain such extensions or SPCs. Each party shall
reasonably assist the other in the obtaining of such extensions or SPCs.
13. STATEMENTS AND REMITTANCES
13.1 CAT and HGS, as the case may be, shall keep and require its AFFILIATES
and (sub)licensees to keep complete and accurate records of all sales and
calculations of all amounts owing hereunder. Each party shall have the right,
at its expense, through an independent certified public accounting firm of
nationally recognized standing reasonably acceptable to the other party, to
examine pertinent financial records during regular business hours upon advance
written notice during the life of this Agreement and for twelve (12) months
after its termination for the purpose of verifying and reporting to HGS or CAT
as to the computation of the payments made hereunder not more than twenty four
(24) months prior to the date of such notice; provided, however, that such
-------- -------
examination shall not take place more often than once a year; provided further
that such accountant shall report only as to the accuracy of the statements and
payments hereunder, including the magnitude and source of any discrepancy. CAT,
HGS, and their respective AFFILIATES and (sub)licensees shall be required to
maintain such records for twenty four (24) months. The accountant shall execute
customary confidentiality agreements prior to any examination, reasonably
satisfactory in form and substance to both parties, to maintain in confidence
all information obtained during the course of any such examination, except for
disclosure to the parties, as necessary for the above purpose. Each such
examination conducted under this Paragraph 13.1 shall be at the expense of the
party conducting such examination, unless a variation or error producing an
increase exceeding [***] of the amount stated for any period is established in
the course of any such examination, whereupon the reasonable out-of-pocket
expenses of conducting such examination for such period will be paid by the
other party.
13.2 Within sixty (60) days after the close of each calendar quarter, CAT
and HGS, as the case may be, shall deliver to the other party a true accounting
of all amounts owing hereunder during such calendar quarter and shall at the
same time pay all amounts due.
34
13.3 All royalties and other payments due under this Agreement shall be
payable in U.S. dollars.
13.4 Royalties payable on sales in countries other than the United States
shall be calculated by multiplying the appropriate royalty rate times the sales
in each currency in which they are made and converting the resulting amount into
United States dollars, at the rates of exchange as reported in The Wall Street
---------------
Journal under the caption "Currency Trading" on the last business day in New
-------
York, New York of each royalty period. If The Wall Street Journal ceases to be
-----------------------
published, then the rate of exchange to be used shall be that reported in such
other business publication of national circulation in the United States as the
parties reasonably agree. Such payments shall be without deduction of exchange,
collection, or other charges. If, due to restrictions or prohibitions imposed
by a national or international authority, payments cannot be made as aforesaid,
the parties shall consult with a view to finding a prompt and acceptable
solution, and the parties will deal with such monies as the other party may
lawfully direct at no additional out-of-pocket expense to the party owned the
royalty. Notwithstanding the foregoing, if royalties cannot be remitted for any
reason within six (6) months after the end of the calendar quarter during which
they are earned, then the party owning the royalty shall be obligated to deposit
the royalties in a bank account in Switzerland in the name of the other party.
Each party shall deduct any taxes which the party is obligated to pay and/or
withhold in a country based on royalties due to the other based on sales in such
country from royalty payments due for such country under this Agreement and pay
them to the proper authorities as required by applicable laws. Each party shall
maintain official receipts of payment of any such taxes and forward these
receipts to the other within sixty (60) days.
13.5 All payments to be made hereunder shall be by wire transfer of
immediately available funds to an account designated by CAT or HGS, whoever is
to be the recipient of such funds.
13.6 Any payment due from a party to the other party under this Agreement
that is not paid on the date such payment is due shall bear interest at a rate
per annum equal to the lesser of (a) the prime rate as reported in The Wall
--------
Street Journal as published under the caption "Money Rates" in New York, New
--------------
York, on the date such payment is due, plus an [***], or (b) the maximum rate
permitted by applicable
35
law, in each case calculated on the number of days such payment is delinquent.
If The Wall Street Journal ceases to be published, then the prime rate to be
-----------------------
used shall be that reported in such other business publication of national
circulation in the United States as the parties reasonably agree. This Section
13.6 shall in no way limit any other remedies available to a party.
14. TERM AND TERMINATION
14.1 This Agreement shall come into effect as of the Effective Date, and
unless earlier terminated as provided in this Article 14, shall remain in full
force and effect until the last to expire of the parties' respective royalty
obligations under this Agreement.
14.2 Upon written notice, HGS may terminate at any time the license granted
by CAT to HGS with respect to a specific EXCLUSIVE HGS PRODUCT, and HGS shall
not have any further obligation to CAT with respect to such product. Upon
written notice, CAT may terminate at any time the license granted by HGS with
respect to a specific EXCLUSIVE CAT PRODUCT and CAT shall not have any further
obligation to HGS with respect to such product.
14.3 A party shall have the right to terminate this Agreement with respect
to any PRODUCT (a) upon the breach by the other party of the other party's
obligations to pay any amounts owing hereunder with respect to such PRODUCT, if
such breach is not cured within thirty (30) days after receipt of written notice
from such party thereof, or (b) upon the material breach by the other party of
the other party's obligations under Article 9 with respect to such PRODUCT, if
such breach is not cured within sixty (60) day after receipt of written notice
from such party thereof. Notwithstanding the foregoing, a party may not
terminate this Agreement during the pendency of an arbitration proceeding under
this Agreement in which the other party reasonably contests whether a royalty or
other amount is due hereunder, or whether it has failed to meet its obligations
under Article 9.
14.4 A party shall have the right to terminate this Agreement in its
entirety (a) upon the breach by the other party of the other party's obligations
to pay any amounts owning hereunder, if such breach is not cured within thirty
(30) days after receipt of written notice from such party thereof, or (b) upon
the
36
material breach by the other party of the other party's obligations (other than
obligations under Article 9 or obligations to pay any amounts owing hereunder),
if such breach is not cured within sixty (60) days after receipt of written
notice from such party thereof. Notwithstanding the foregoing, a party may not
terminate this Agreement during the pendency of an arbitration proceeding under
this Agreement in which the other party reasonably contests whether a royalty or
other amount is due hereunder, or whether it has failed to satisfy its other
obligations hereunder.
14.5 Notwithstanding expiration or termination of this Agreement, the
rights and obligations of the parties under Articles 10, 11, 12, 13, 14, 16, and
18, shall survive such expiration or termination, as well as any provision not
specified in this Paragraph 14.5 which is expressly stated to survive
termination of this Agreement. Upon expiration of a party's royalty obligations
under this Agreement with respect to a product, the licenses granted with
respect to such PRODUCT under CAT BACKGROUND IP, HGS BACKGROUND IP and RESEARCH
PROGRAM IP (as applicable) shall survive on a non-exclusive basis. Upon
termination of this Agreement (other than termination as to a PRODUCT as a
result of a breach of Article 9), whether as to any PRODUCT or in its entirety,
if the (sub)licensee of a party with respect to a Product hereunder requests by
written notice to the other party hereunder within thirty (30) days after the
effective date of such termination, the other party shall grant to such
(sub)licensee a direct license with respect to such PRODUCT on the applicable
terms and conditions of this Agreement, provided that such (sub)licensee agrees
in writing to be bound by such terms and conditions.
14.6 The provisions of Paragraphs 14.3 and 14.4 shall not limit the rights
and remedies that may be otherwise available to a party under this Agreement, at
law or in equity.
15. WARRANTIES AND REPRESENTATIONS
15.1 Each of HGS and CAT hereby represents, warrants and covenants to the
other, as of the date of this Agreement, as follows:
15.1.1 it is a corporation duly organized and validity existing
under the laws of the state of its incorporation;
37
15.1.2 the execution, delivery and performance of this Agreement by
such party has been duly authorized by all requisite corporate action;
15.1.3 it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, including, without
limitation, the right, power and authority to grant the licenses under Article
2;
15.1.4 the execution, delivery and performance by such party of
this Agreement and its compliance with the terms and provisions hereof to such
party's best knowledge does not conflict with or result in a breach of any of
the terms and provisions of or constitute a default under (i) a loan agreement,
guaranty, financing agreement, agreement affecting a product or other agreement
or instrument binding or affecting it or its property; (ii) the provisions of
its charter documents or bylaws; or (iii) any order, writ, injunction or decree
of any court or governmental authority entered against it or by which any of its
property is bound;
15.1.5 this Agreement constitutes such party's legal, valid and
binding obligation enforceable against it in accordance with its terms subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditor's rights and to the
availability of particular remedies under general equity principles.
15.2 After the Effective Date, (a) HGS shall not enter into any agreement,
or amend, modify, restate or waive any provisions of any other agreement to
which it is or becomes a party, that would materially and adversely affect the
rights and licenses granted to CAT, and (b) CAT shall not enter into any
agreement, or amend, modify, restate or waive any provisions of any agreement to
which it is or becomes a party, that would materially and adversely affect the
rights and licenses granted to HGS.
15.3 NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY THAT ANY
PATENT INCLUDED WITHIN CAT BACKGROUND IP, HGS BACKGROUND IP OR RESEARCH PROGRAM
IP ARE VALID OR ENFORCEABLE OR THAT THEIR EXERCISE OR THE EXERCISE OF HGS
BACKGROUND IP, CAT BACKGROUND IP or RESEARCH PROGRAM IP PROPERTY DOES
38
NOT INFRINGE ANY PATENT RIGHTS OF THIRD PARTIES. A HOLDING OF INVALIDITY OR
UNENFORCEABILITY OF ANY SUCH PATENT, FROM WHICH NO FURTHER APPEAL IS OR CAN BE
TAKEN, SHALL NOT AFFECT ANY OBLIGATION HEREUNDER, BUT SHALL ONLY ELIMINATE
ROYALTIES OTHERWISE DUE UNDER SUCH PATENT FROM THE DATE SUCH HOLDING BECOMES
FINAL.
15.4 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN HGS AND CAT MAKE NO
REPRESENTATIONS OR EXTEND ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NONINFRINGEMENT.
15.5 Each party shall use any materials provided by the other party under
this Agreement in compliance with all applicable laws and regulations.
16. INDEMNIFICATION
16.1 CAT shall defend, indemnify and hold harmless HGS, its AFFILIATES,
licensors of HGS and each of their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages and
expenses (including reasonable attorneys' fees) as the result of claims,
demands, actions or proceedings by any THIRD PARTY which are made or instituted
against any of them arising out of the development, manufacture, possession,
distribution, use, testing, sale or other disposition of any EXCLUSIVE CAT
PRODUCT by or through CAT, its AFFILIATES or any THIRD PARTY granted rights by
CAT under this Agreement. CAT's obligation to defend, indemnify and hold
harmless shall include claims, demands, actions or proceedings, whether for
money damages or equitable relief by reason of alleged personal injury
(including death) to any person or alleged property damage, provided, however,
the indemnity shall not extend to any claims against an indemnified party which
result from the gross negligence or willful misconduct of an indemnified party.
CAT shall have the exclusive right to control the defense of any action which is
to be indemnified in whole by CAT hereunder, including the right to select
counsel reasonably acceptable to HGS to defend HGS and the indemnified parties
hereunder,
39
and to settle any claim, demand, action or proceeding, provided that, without
the prior written consent of HGS (which shall not be unreasonably withheld or
delayed), CAT shall not agree to settle any claim, demand, action or proceeding,
to the extent such settlement would have a material adverse effect on HGS. The
provisions of this paragraph shall survive and remain in full force and effect
after any termination, expiration or cancellation of this Agreement and CAT's
obligations hereunder shall apply whether or not such claims are rightfully
brought. CAT shall require each (sub)licensee hereunder to agree to indemnify
HGS, in a manner consistent with this Paragraph 16.1.
16.2 HGS shall defend, indemnify and hold harmless CAT, its AFFILIATES,
licensors of CAT and each of their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages and
expenses (including reasonable attorneys' fees) as the result of claims,
demands, actions or proceedings by any THIRD PARTY which are made or instituted
against any of them arising out of the development, manufacture, possession,
distribution, use, testing, sale or other disposition of any EXCLUSIVE HGS
PRODUCT or HGS RESEARCH PRODUCT by or through HGS, its AFFILIATES or any THIRD
PARTY granted rights by HGS under this Agreement. HGS' obligation to defend,
indemnify and hold harmless shall include claims, demands, actions or
proceedings, whether for money damages or equitable relief by reason of alleged
personal injury (including death) to any person or alleged property damage,
provided, however, the indemnity shall not extend to any claims against an
indemnified party which result from the gross negligence or willful misconduct
of an indemnified party. HGS shall have the exclusive right to control the
defense of any action which is to be indemnified in whole by HGS hereunder,
including the right to select counsel reasonably acceptable to CAT to defend CAT
and the indemnified parties hereunder and to settle any claim, demand, action or
proceeding, provided that, without the prior written consent of CAT (which shall
not be unreasonably withheld or delayed), HGS shall not agree to settle any
claim, demand, action or proceeding to the extent such claim, demand, action or
proceeding has a material adverse effect on CAT. The provisions of this
paragraph shall survive and remain in full force and effect after any
termination, expiration or cancellation of this Agreement and HGS' obligation
hereunder shall apply whether or not such claims are rightfully brought. HGS
shall require each (sub)licensee hereunder to agree to indemnify CAT in a manner
consistent with this Paragraph 16.2.
40
16.3 A person or entity that intends to claim indemnification under this
Article 15 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any claim, demand, action or proceeding for which the
Indemnitee intends to claim such indemnification, and the Indemnitor, after it
determines that indemnification is required of it, shall assume the defense
thereof with counsel selected by the Indemnitor and reasonably acceptable to the
other party; provided, however, that an Indemnitee shall have the right to
retain its own counsel, with the fees and expenses to be paid by the Indemnitor
if the Indemnitor does not assume the defense or if representation of such
Indemnitee by the counsel retained by the Indemnitor would be inappropriate due
to actual or potential conflicts of interest between such Indemnitee and any
other party represented by such counsel in such proceedings. The indemnity
agreement in this Article 15 shall not apply to amounts paid in settlement of
any claim, demand, action or proceeding if such settlement is effected without
the consent of the Indemnitor, which consent shall not be unreasonably withheld
or delayed. The failure to deliver notice to the Indemnitor within a reasonable
time after the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 15, but failure to deliver notice to the
Indemnitor will not relieve it of any liability that it may have to any
Indemnitee otherwise than under this Article 15. The Indemnitee under this
Article 15, its employees and agents, shall reasonably cooperate with the
Indemnitor and its legal representatives in the investigations of any claim,
demand, action or proceeding covered by this indemnification. In the event that
each party claims indemnity from the other and one party is finally held liable
to indemnify the other, the Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
17. FORCE MAJEURE
17.1 If the performance by a party of any obligation under this Agreement
(other than an obligation for the payment of money) is prevented, restricted,
interfered with or delayed by reason of any reasonably unforeseeable cause
beyond the reasonable control of the party liable to perform, the party so
affected shall, upon giving written notice to the other party, be excused from
such performance to the
41
extent of such prevention, restriction, interference or delay by such reasonably
unforeseeable cause beyond its reasonable control, provided that the affected
party shall use commercially reasonable efforts to avoid or remove such causes
of non-performance and shall continue performance with the utmost dispatch
whenever such causes are removed. When such circumstances arise, the parties
shall discuss what, if any, modification of the terms of this Agreement may be
required in order to arrive at an equitable solution.
18. DISPUTE RESOLUTION
18.1 All other disputes between the Parties arising out of the
circumstances and relationships contemplated by this Agreement including
disputes relating to the validity, construction or interpretation of this
Agreement and including disputes relating to pre-contractual representations
shall be in the first instance referred to the respective Chief Executive
Officers of the Parties. If they fail to agree then any dispute shall be settled
by arbitration as follows:
18.2 The arbitration shall be conducted in the English language in
accordance with the Commercial Arbitration Rules of the International Chamber of
Commerce (ICC). The arbitration shall be conducted by one arbitrator chosen by
mutual agreement of the parties. If the parties are unable to agree on an
arbitrator, they shall each pick one arbitrator and the two arbitrators shall
choose a third arbitrator. The parties will cooperate with each other in causing
the arbitration to be held in as efficient and expeditious a manner as
practicable. Any arbitration proceeding instituted under this Agreement shall be
brought in London, England if instituted by HGS and in Washington D.C. if
instituted by CAT.
18.3 Any award rendered by the arbitrator(s) shall be final and binding
upon the parties hereto. Judgement upon the award may be entered in any court of
record of competent jurisdiction. Each party shall pay its own expenses of
arbitration and the expenses of the arbitrator(s) shall be equally shared unless
the arbitrator(s) assesses as part of his, her or their award all or any part of
the arbitration expenses of one party (including reasonable attorneys' fees)
against the other party.
42
18.4 The award of the Arbitration Tribunal shall be final and judgment upon
such an award may be entered in any competent court or application may be made
to any competent court for judicial acceptance of such an award and order of
enforcement.
18.5 This Agreement shall be construed and enforced in accordance with the
laws of the State of New York (with reference to the conflicts of law principles
thereof).
19. ENTIRE AGREEMENT
19.1 This Agreement (including Exhibits A, B, C and D) and together with
the SUBSCRIPTION AGREEMENT, constitutes the entire agreement between the parties
regarding the subject matter hereof and supersedes all previous writings,
understandings, representations and agreements, except for the Collaboration
Agreement dated August 9, 1999 between the parties. No terms or provisions of
this Agreement shall be varied or modified by any prior or subsequent statement,
conduct or act of either of the parties, except that the parties may amend this
Agreement by written instruments specifically referring to and executed in the
same manner as this Agreement.
20. NOTICES
20.1 Any notice required or permitted under this Agreement shall be in
writing, and shall be delivered to the following addresses of the parties:
HUMAN GENOME SCIENCES, INC.
0000 Xxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Business Development
Fax: 000-000-0000
copy to:
HUMAN GENOME SCIENCES, INC.
0000 Xxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Fax: 000-000-0000
CAMBRIDGE ANTIBODY TECHNOLOGY LTD.
Xxx Xxxxxxx Xxxx
00
Xxxxxxxx, Xxxxxxxxxxxxxx XX0 0XX
Attn: Company Secretary
Fax: (00) 0000 000000
20.2 Any notice required or permitted to be given concerning this Agreement
shall be effective upon receipt by the party to whom it is addressed.
21. ASSIGNMENT AND CHANGE OF CONTROL
21.1 This Agreement and the licenses herein granted shall be binding upon
and inure to the benefit of the parties and their respective permitted assignees
and successors in interest. Neither this Agreement nor any interest hereunder
shall be assignable by a party without the prior written consent of the other
party and any attempted assignment contrary to this Paragraph 21.1 shall be void
and without force and effect. Notwithstanding the foregoing, a party may assign
this Agreement and all of its rights and obligations hereunder to any AFFILIATE
or to any THIRD PARTY in connection with the transfer or sale of all or
substantially all of its business, or to which it may transfer all or
substantially all of its assets to which this Agreement relates, or in the event
of its merger, consolidation, change in control or similar transaction, without
obtaining the consent of the other party, provided that the assigning party
remains liable under this Agreement and that the THIRD PARTY assignee or
surviving entity assumes in writing all of its obligations under this Agreement.
21.2 Notwithstanding Paragraph 21.1, (a) if CAT is acquired by a
Pharmaceutical Company (as defined below), transfers or sells all or
substantially all of its business or its assets to which this Agreement relates
to such a company, or in the event of its merger, consolidation, change in
control or similar transaction with such a company, then CAT shall have no
further ability to require HGS to search its database as provided in Paragraph
7.4, but CAT shall still have the right to designate CAT RESEARCH ANTIGENS based
on information available in public databases or other databases to which CAT may
have lawful access; and (b) if HGS is acquired by a Pharmaceutical Company,
transfers or sells all or substantially all of its business or its assets to
which this Agreement relates to such a company, or in the event of its merger,
consolidation, change in control or similar transaction with such a company, HGS
shall
44
no longer have the right to grant a license to a THIRD PARTY for an antibody
pursuant to Paragraph 2.7, although HGS shall have the right to grant such a
license if HGS exercises its option under Article 3 and such license is subject
to the terms and conditions of such option. For the purposes of this paragraph,
a Pharmaceutical Company shall mean a pharmaceutical or biotechnology company
whose business includes any material segment involved in the discovery,
development and/or enhancement of pharmaceutical products and their subsequent
licensing, production, distribution and/or sale and/or the carrying out of
biological, chemical, biochemical, pharmaceutical, medical and/or scientific
research.
22. COUNTERPARTS
22.1 This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.
23. WAIVER
23.1 Any delay or failure in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, nor operate to bar the exercise or enforcement
thereof at any time or times thereafter, excepting only as to an express written
and signed waiver as to a particular matter for a particular period of time.
23.2 Notwithstanding the foregoing, in the event CAT or HGS challenges
whether any payments contemplated hereunder (including, without limitation
royalties or milestones) are due, it shall have the right, but not the
obligation, to make such payments under protest (reserving all rights hereunder)
pending resolution of such dispute.
24. INDEPENDENT RELATIONSHIP
24.1 Nothing herein contained shall create an employment, agency, joint
venture or partnership relationship between the parties hereto or any of their
agents or employees, or any other legal
45
arrangement that would impose liability upon one party for the act or failure to
act of the other party. No party shall have any power to enter into any
contracts or commitments or to incur any liabilities in the name of, or on
behalf of, the other party, or to bind the other party in any respect
whatsoever.
25. FURTHER ACTIONS
25.1 Each party agrees to execute, acknowledge and deliver such further
instruments and to do all such other acts, as may be necessary or appropriate in
order to carry out the purposes and intent of this Agreement.
46
IN WITNESS WHEREOF, the parties, through their authorized officers, have
executed this Agreement as of the Effective Date.
CAMBRIDGE ANTIBODY TECHNOLOGY LTD.
BY: /s/ Xxxxx X. Xxxxxxxx
----------------------
Xxxxx X. Xxxxxxxx, Ph.D.
Chief Executive Officer
HUMAN GENOME SCIENCES, INC.
BY: /s/ Xxxxxx X. Xxxxxxx
----------------------
Xxxxxx X. Xxxxxxx
Senior Vice President, Corporate and
Business Development
47
EXHIBIT A
EXISTING CAT THIRD PARTY ROYALTY OBLIGATIONS
1. License Agreement, dated January 7, 1997, between CAT and MRC, with certain
royalty rates, as may be amended from time to time which shall include all
royalty payments due to The Scripps Research Institute and Stratagene
pursuant to an agreement dated 25 June 1999 (the AMRC License").
2. Therapeutic Antibodies Agreement, dated December 31, 1997, between CAT and
Dyax Corp., with a royalty rate of [***], as may be amended from time to
time (the "Dyax License").
3. Diagnostic Antibodies Agreement, dated December 31, 1997, between CAT and
Dyax Corp., with a royalty rate of [***], as may be amended from time to
time (the "Dyax License").
48
EXHIBIT B
Requirements for Claiming Exclusivity to an Antigen
Pursuant to Paragraph 8.2, a DOSSIER must demonstrate that one or ANTIBODIES to
an antigen meets the following criteria:
[***]
49
EXHIBIT C
[***]
50
EXHIBIT D
THIRD PARTY LICENSE RELATED
DISPUTE RESOLUTION
In the event of any dispute under Paragraph 2.8, the parties shall submit the
dispute to binding arbitration.
Arbitration shall be initiated by CAT notifying HGS of its claimed dispute and
proposing its proposed resolution and the basis in facts between the parties and
law for the proposed resolution. The other shall respond to the claimed dispute
and shall either agree with other parties proposed solution or shall make a
counter proposal based upon its assertion of facts and law as to the resolution
of the dispute. If the initiating party is dissatisfied with the response of the
receiving party, or the receiving party makes no response within five (5)
working days, the initiating party may convene a one day arbitration panel by
demand to the receiving party. Within three (3) working days of dispatch and
receipt of the demand for arbitration each party shall submit to the other three
(3) names of qualified arbitrators, not in conflict of interest in the matter
and willing to serve on an arbitration panel. In the event either party fails to
nominate an appropriate list of potential arbitrators, one of any three (3)
approximately nominated arbitrators may be selected to nominate three additional
arbitrators on behalf of the non-responding party, who shall thereby become the
nominees of such party.
The arbitration shall proceed in twenty give (25) business days by CAT selecting
from the six (6) nominated arbitrators one (1) arbitrator. The receiving party
shall nominate one (1) arbitrator from the list of arbitrators. The appointed
arbitrators shall jointly nominate the third arbitrator. In the event of failure
of a party to nominate an arbitrator, the already nominated arbitrator(s) shall
make the selection not made.
The arbitration shall be held in not more than 3 working days with briefs of not
more than ten (10) pages and not more than one hour's oral argument of each of
the parties in support of each party's proposed resolution. The resolution of
dispute shall be made by the three (3) arbitrator panel selecting one (1) of the
two (2) proposed resolutions on behalf of the prevailing party. Such proposed
resolution shall be the judgment of the arbitration panel. There shall be no
judicial appear or reconsideration of the ruling of the arbitrators panel, which
shall be immediately and specifically enforceable against both parties. The
losing party shall pay all of the costs of the arbitration including reasonable-
attorney's fees.
51
DISCLOSURE LETTER PURSUANT TO CLAUSE 5.2 OF THE
SUBSCRIPTION AGREEMENT DATED 29 FEBRUARY 2000
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Cambridge Antibody Technology
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Share Capital disclosure as at 29 Feb 2000
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Issued share capital - ordinary shares of 10p
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Issued share capital - ordinary shares of 10p (per 1999 accounts)
---------------------------------------------------------------------------------------------------
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Shares under option:
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As at 30 September 1999 (see attached extract from 1999 annual report):
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Options to Directors, consultants and employees
---------------------------------------------------------------------------------------------------
Contractual options
---------------------------------------------------------------------------------------------------
Options lapsed post 30 September 1999 (leavers)
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Options granted to directors and staff December 1999 (note)
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Options exercised - Dec 29 (209,620)
-----------
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Shares issued to Monsanto Europe
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In addition to a further 74,743 shares are issuable to The Scripps Research
Institute pursuant to a corporate agreement
Note:
These options were granted at a price of 287p per share and are exercisable
between 3 Dec 2002 and Dec 2006
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29 February 2000
Called-up share capital and share premium contract
Certain options were granted in one scheme in parallel with options in a
different scheme under arrangements whereby the exercise of options in one
scheme would cause a corresponding number of options to lease in the other
scheme.
Where relevant pairs of linked options are counted as a single option.
There also existed warrants which were issued to a shareholder giving the holder
an entitlement to subscribe for shares and certain contractual rights to
subscribe for shares
Up to a further 149,486 shares are issuable to The Scripps Research Institute
and Stratagene pursuant to a corporate agreement. These shares are not included
in the figures given below.
At 30 September 1999 the various share options, warrants and rights were as
follows:
Minimum number
------------------------------------------------------------------------------------------------------------------------------------
Options to Directors, consultants and employees 2,148,006
Warrants to a shareholder 50,000
Contractual options 25,500
------------------------------------------------------------------------------------------------------------------------------------
Total 2,223,506
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Earliest price Earliest date exercisable Latest date exercisable Number Number
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Old schemes (Pounds)1.28 15 September 1996 14 September 2003 1 80,350
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)1.28 13 September 1997 12 September 2004 1 37,500
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)1.28 28 April 1998 27 April 2005 1 227,422
------------------------------------------------------------------------------------------------------------------------------------
US$5.05 28 April 1998 28 April 2005 27,025
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)2.97 12 March 1999 12 March 2003 87,500
------------------------------------------------------------------------------------------------------------------------------------
US$4.80 19 April 1999 19 April 2006 2 225,000
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)2.98 10 May 1999 9 May 2006 1 40,000
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)3.00 4 September 1999 3 September 2006 1.3 360,000
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)3.00 16 December 1999 15 December 2003 4 150,000
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
CSOP (Pounds)5.00 24 March 2000 23 March 2004 4 135,540
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)5.00 24 March 2000 23 March 2007 4 131,960
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)5.58 2 June 2000 1 June 2004 4 3,584
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)5.58 2 June 2000 1 June 2007 4 25,536
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)5.00 19 December 2000 18 December 2004 4 141,800
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)5.00 19 December 2000 18 December 2007 4 108,000
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)5.00 25 June 2001 24 June 2008 4 90,000
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)5.00 2 July 2001 1 July 2008 4 2,500
------------------------------------------------------------------------------------------------------------------------------------
CSOP - granted in year (Pounds)5.00 27 November 2001 26 November 2008 4 17,500
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)2.42 27 November 2001 26 November 2005 4 180,828
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)2.42 27 November 2001 26 November 2008 4 69,711
------------------------------------------------------------------------------------------------------------------------------------
(Pounds)2.10 28 May 2002 27 May 2009 4 6,750
------
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2,148,006
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1 Includes linked options.
2 Staged exercise.
3 87,500 subject to conditions.
4 Subject to conditions.
A shareholder held a warrant to subscribe for 50,000 shares at $4.80 which expired on 18 October 1999.
Certain consultancy agreements contain the right to subscribe, subject to conditions for up to 25,500 shares at ,3 per share
____________________________________ ____________________________
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