EXHIBIT 10.36
RESEARCH COLLABORATION AND LICENSE AGREEMENT
among
SCHERING CORPORATION,
SCHERING-PLOUGH, LTD.,
and
MYRIAD GENETICS, INC.
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS............................................................... 2
ARTICLE II
RESEARCH PROGRAM.......................................................... 9
2.1 General............................................................... 9
2.2 Conduct of Research; Staffing and Research9
2.2.1 Standards........................................................ 9
2.2.2 Staffing......................................................... 9
2.2.3 Use of Research Funding.......................................... 9
2.2.4 Principal Scientists............................................. 10
2.2.5 Annual Research Plans............................................ 10
2.2.6 Exclusivity...................................................... 10
2.2.7 Collaborative Efforts............................................ 11
2.3 Committee............................................................. 11
2.3.1 Committee Activities............................................. 11
2.3.2 Composition of the Committee..................................... 11
2.3.3 Membership....................................................... 12
2.3.4 Meetings......................................................... 12
2.3.5 Chairs and Issue Resolution...................................... 12
2.3.6 Minutes.......................................................... 13
2.3.7 Expenses......................................................... 13
2.4 Exchange of Information............................................... 13
2.5 Records and Reports................................................... 13
2.5.1 Records.......................................................... 13
2.5.2 Copies and Inspection of Records................................. 14
2.5.3 Quarterly Reports................................................ 14
2.6 Research Information and Inventions................................... 14
2.7 License of Research Inventions........................................ 15
2.8 Research Program Term................................................. 15
ARTICLE III
LICENSE; EXCHANGE OF INFORMATION; DEVELOPMENT AND
COMMERCIALIZATION......................................................... 16
3.1 License Grants........................................................ 16
3.2 Option to Acquire Rights for Certain Other Cancer Genes............... 17
3.3 Non-Exclusive License Grant........................................... 17
3.4 Exchange of Information............................................... 18
3.5 Development and Commercialization..................................... 18
3.6 Excused Performance................................................... 19
3.7 Governmental Inspections.............................................. 20
3.8 Notice of Adverse Reactions........................................... 20
3.9 Debarment............................................................. 20
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ARTICLE IV
PAYMENTS; ROYALTIES AND REPORTS....................................................... 21
4.1 Research Program Funding.......................................................... 21
4.2 EQUITY INVESTMENT................................................................. 21
4.3 GENE DISCOVERY TECHNOLOGY FEE..................................................... 21
4.4 Milestone Payments................................................................ 21
4.5 Royalties......................................................................... 22
4.5.1 Royalties Payable By Schering................................................ 22
4.5.2 Term of Royalty Obligation; Certain Conditions............................... 24
4.5.3 Compulsory Licenses.......................................................... 25
4.5.4 Third Party Licenses......................................................... 25
4.6 Reports; Method of Payment; Payment Exchange Rate and Currency Conversions........ 25
4.7 Maintenance of Records; Audits.................................................... 26
4.8 Income Tax Withholding............................................................ 27
4.9 Direct Affiliate Licenses......................................................... 28
ARTICLE V
PATENTS............................................................................... 28
5.1 Filing, Prosecution and Maintenance of Patents.................................... 28
5.2 Option of Myriad to Prosecute and Maintain Patents................................ 29
5.3 Enforcement....................................................................... 29
5.4 Third Party Infringement Suit..................................................... 31
5.5 Certification under Drug Price Competition and Patent Term Restoration Act........ 31
5.6 Abandonment....................................................................... 32
5.7 Patent Term Restoration........................................................... 32
5.8 Notices........................................................................... 32
ARTICLE VI
CONFIDENTIALITY AND PUBLICATION....................................................... 32
6.1 Nondisclosure Obligation.......................................................... 32
6.2 No Publicity...................................................................... 34
6.3 Publication....................................................................... 34
ARTICLE VII
REPRESENTATIONS AND WARRANTIES........................................................ 35
7.1 Representations and Warranties of Each Party...................................... 35
7.2 Myriad's Representations.......................................................... 36
7.3 Continuing Representations........................................................ 37
7.4 No Inconsistent Agreements........................................................ 38
ARTICLE VIII
INDEMNIFICATION AND LIMITATION ON LIABILITY........................................... 38
8.1 Indemnification by Schering....................................................... 38
8.2 Indemnification by Myriad......................................................... 38
8.3 Conditions to Indemnification..................................................... 38
8.4 Settlements....................................................................... 39
8.5 Limitation of Liability........................................................... 39
8.6 Insurance......................................................................... 39
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ARTICLE IX
TERM AND TERMINATION................................................................... 40
9.1 Term and Expiration................................................................ 40
9.2 Termination by Schering............................................................ 40
9.3 Termination for Cause.............................................................. 40
9.4 Effect of Termination on License................................................... 41
9.5 Effect of Termination.............................................................. 42
ARTICLE X
MISCELLANEOUS.......................................................................... 42
10.1 Assignment........................................................................ 42
10.2 Governing Law..................................................................... 43
10.3 Arbitration....................................................................... 43
10.4 Prohibition on Hiring............................................................. 47
10.5 Waiver............................................................................ 47
10.6 Independent Relationship.......................................................... 47
10.7 Export Control.................................................................... 47
10.8 Entire Agreement; Amendment....................................................... 47
10.9 Notices........................................................................... 48
10.10 Force Majeure.................................................................... 49
10.11 Severability..................................................................... 49
10.12 Recording........................................................................ 50
10.13 Further Actions.................................................................. 50
10.14 Counterparts..................................................................... 50
EXHIBIT 2.1
RESEARCH PROGRAM....................................................................... 51
EXHIBIT 3.8
ADVERSE EVENT REPORTING PROCEDURES..................................................... 52
EXHIBIT 4.2
STOCK PURCHASE AGREEMENT............................................................... 57
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RESEARCH COLLABORATION AND LICENSE AGREEMENT
THIS AGREEMENT ("Agreement") effective as of the Effective Date (as
hereinafter defined), among Schering Corporation, a corporation organized and
existing under the laws of the State of New Jersey having a place of business at
0000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx ("Schering Corp."), Schering-
Plough Ltd., a corporation organized and existing under the laws of Switzerland
and having a place of business at Xxxxxxxxxxxxx 0, 0000 Xxxxxxx, Xxxxxxxxxxx
("SP Ltd.") and Myriad Genetics, Inc., a corporation organized and existing
under the laws of Delaware having a place of business at 000 Xxxxxx Xxx, Xxxx
Xxxx Xxxx, Xxxx 00000 ("Myriad"). Schering Corp. and SP Ltd. are herein
collectively referred to as "Schering". References to Schering Corp. and SP Ltd.
shall, as the context requires, include their respective Affiliates (as
hereinafter defined).
WITNESSETH:
WHEREAS, Myriad has developed Myriad Know-How (as hereinafter defined) and
has rights to Patent Rights (as hereinafter defined);
WHEREAS, Myriad has expertise in the Discovery (as hereinafter defined) and
Characterization (as hereinafter defined) of genes and their biochemical
pathways related to major common diseases, including prostate cancer and brain
cancer, and in the development of human diagnostic products and services derived
from disease genes; and
WHEREAS, Schering has expertise in discovering, developing and marketing
human therapeutic products derived from disease genes for the treatment of
clinical indications; and
WHEREAS, Myriad and Schering are interested in entering into an agreement
whereby Myriad will perform research to Discover (as hereinafter defined) genes
and their biochemical pathways associated with certain aspects of prostate
cancer and brain cancer in humans (and potentially other cancers) and license
the results of such research to Schering for the development, manufacture and
sale of human therapeutic products derived from such genes for the prevention or
treatment of clinical indications;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows:
ARTICLE I
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DEFINITIONS
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As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the respective meanings set forth below:
1.1 "Affiliate" shall mean any individual or entity directly or
indirectly controlling, controlled by or under common control with, a party to
this Agreement. For purposes of this Agreement, the direct or indirect ownership
of over fifty percent (50%) of the outstanding voting securities of an entity,
or the right to receive over fifty percent (50%) of the profits or earnings of
an entity shall be deemed to constitute control. Such other relationship as in
fact gives such individual or entity the power or ability to control the
management, business and affairs of an entity shall also be deemed to constitute
control.
1.2 "Annual Research Plan" shall mean the written plan describing the
research in the Field to be carried out during each year of the Research Program
by Myriad and Schering pursuant to this Agreement. Each Annual Research Plan
will be set forth in a written document adopted by the Committee.
1.3 "Calendar Quarter" shall mean the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 and
December 31.
1.4 "Calendar Year" shall mean each successive period of twelve (12)
months commencing on January 1 and ending on December 31.
1.5 "Characterize" shall mean, with respect to any gene, understanding a
function or activity of the protein produced by that gene through data derived
from well designed experiments.
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1.6 "Collaboration Exclusivity Field" shall mean the treatment or
prevention of cancer in humans and/or genes involved in or associated with the
pathogenesis of cancer in humans, including, without limitation, the Field,
Target Genes and Pathway Genes. The Collaboration Exclusivity Field does not
include: (i) Previously Discovered Myriad Genes as defined in Section 2.2.6;
(ii) pathway genes associated with Previously Discovered Myriad Genes; (iii)
pathway genes which interact with tumor suppressor genes and oncogenes in the
public domain using Myriad's protein interaction network technologies; and (iv)
Other Cancer Genes for which Schering has decided not to exercise its option
pursuant to Section 3.2 of this Agreement.
1.7 "Diagnostic(s)" shall mean any device, product or service intended to
predict, detect, or identify a disease or determine the presence of a pathologic
condition or a predisposition to a disease in a human or animal, including, but
not limited to, any device, product or service intended to monitor disease
progression, to determine the prognosis of a patient with a pathologic condition
or to be used to guide selection of therapy for the treatment or prevention
of disease; provided, however, Diagnostics shall not include any device,
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product or service which is primarily intended to have a prophylactic or
therapeutic effect.
1.8 "Discover" (and any derivation such as Discovered or Discovery with
appropriate adjustments in tense as the context shall require) shall mean, with
respect to any gene, to isolate, clone, identify and sequence that gene.
1.9 "Effective Date" shall mean the date on which this Agreement has been
approved by the Board of Directors of Schering-Plough Corporation. The parties
shall sign a letter acknowledging the Effective Date which letter shall be
appended to this Agreement.
1.10 "Fair Market Value" shall mean the average closing sale price of
Myriad's Common Stock, $.01 par value, for the period beginning forty-five (45)
days before the Effective Date and ending on the Effective Date, on the
principal market on which such stock is traded.
1.11 "Field" shall mean the treatment or prevention of prostate cancer or
brain cancer in humans, including, without limitation, through the use of gene
therapy (i.e. the treatment or prevention of a disease, or remedying a gene
deficiency of human somatic cells or germ cells (in vivo, in vitro or ex vivo)
with
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DNA (or RNA) for the purpose of expressing a protein or oligo(poly) nucleotide
encoded by said DNA (RNA) in a human), gene therapy vaccines (i.e., a substance
which achieves a prophylactic or therapeutic effect by inducing an antigen-
specific humoral and/or cellular immune system response by gene therapy),
therapeutic proteins, or other drug substances, excluding Diagnostics.
1.12 "First Commercial Sale" shall mean, with respect to any Licensed
Product, the first sale (including to wholesalers) for end use or consumption of
such Licensed Product in a country after all required approvals, including
marketing and pricing approvals, have been granted by the governing health
authority of such country.
1.13 "Gene Criteria" shall mean any of the following: (i) a mutation
profile in primary tumors and in Myriad's panel of at least one hundred fifty
(150) tumor cell lines; (ii) greater than ninety-five percent (95%) probability
of association between germline mutations in the gene and expression of the
cancer phenotype; or (iii) satisfactory results from research studies performed
under a workplan approved by the Committee which satisfactorily demonstrates the
role of the target gene in the initiation and/or progression of cancer.
1.14 "Licensed Product(s)" shall mean any preparation or product for
prophylactic or therapeutic use in the prevention or treatment of any clinical
indications in humans, whether or not for the prevention or treatment of
prostate cancer or brain cancer, which is, or comprises:
(a) any brain cancer gene or prostate cancer gene or its Pathway Genes
Discovered under the Research Program or any fragment or mutation thereof;
(b) the normal gene counterpart of (a);
(c) an RNA or a DNA sequence corresponding, complementary to, or an
antisense sequence to a gene in (a) or (b);
(d) a protein encoded by any of (a), (b) or (c), or any fragment of such
protein;
(e) an antibody to a protein described in (d);
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(f) a gene therapy, cell therapy or antisense or ribozyme therapy product
incorporating any of (a) through (e) above; or
(g) a molecule or compound, regardless of its function or utility, which
is conceived, discovered, invented or the utility of which is conceived,
discovered, reduced to practice or invented, whether or not under the Research
Program, substantially and materially utilizing information relating to any of
(a) through (f) above and utilizing (i) Myriad Know-How which is proprietary and
confidential and not within the exceptions set forth in Subsection 6.1(a)
through 6.1(d) or (ii) any claims covered by the Patent Rights.
The Licensed Products listed in (b) through (g) above are sometimes
referred to herein as being "derived from" the gene or genes in (a) above.
1.15 "Major Market" means the countries of France, Italy, the United
Kingdom, Spain or Germany.
1.16 "Myriad Know-How" shall mean all information and materials,
including but not limited to, discoveries, improvements, processes, formulas,
data, inventions, know-how and trade secrets, instructions, technology,
biological substances (including, but not limited to, genes, DNA fragments,
primers and gene products), nucleic acid constructs, and other intellectual
property, patentable or otherwise, in each case which during the term of this
Agreement (i) are in Myriad's possession or control, (ii) are not generally
known and (iii) are in the Field or necessary or useful to Schering in
connection with the Research Program or the discovery, research, development,
manufacture, marketing, use or sale of Licensed Products in the Territory.
Know-How shall include, without limitation, all biological, chemical,
pharmacological, toxicological, pharmaceutical, physical and analytical,
clinical, safety, manufacturing and quality control data and information related
thereto, and all applications, registrations, licenses, authorizations,
approvals and correspondence related to a Licensed Product, including, without
limitation, correspondence submitted to regulatory authorities with jurisdiction
over the Licensed Product.
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1.17 "Myriad Non-Shared Technology" means:
(a) patentable technology developed by employees of or consultants to
Myriad alone or jointly with third parties prior to the Effective Date or after
that date in the course of activities outside the Field; or
(b) any Myriad, University of Utah or other Myriad collaborator
databases of information concerning family pedigrees and clinical data on such
families; or
(c) any other Myriad technology subject to restrictions on disclosure
or which would not be necessary or useful in the Research Program as reasonably
determined by Schering and Myriad.
1.18 "Net Sales" shall mean, with respect to each country in the
Territory, the proceeds actually received by Schering, its Affiliates or
sublicensees on all sales of Licensed Product to an unaffiliated third party
(whether an end-user, a distributor or otherwise), and exclusive of intracompany
transfers or sales in the Territory, less the reasonable and customary
----
deductions from such gross amounts including:
(a) normal and customary trade, cash and quantity discounts, allowances
and credits actually allowed and taken;
(b) credits or allowances actually granted for damaged goods, recalls,
returns or rejections of Licensed Product and retroactive price reductions;
(c) sales or similar taxes (including duties or other governmental
charges levied on, absorbed or otherwise imposed on the sale of Licensed Product
including, without limitation, value added taxes or other governmental charges
otherwise measured by the billing amount) when included in billing;
(d) freight, postage, shipping, customs duties and
insurance charges;
(e) charge back payments, discounts and rebates (whether mandated or
otherwise) actually granted to managed health care organizations or to federal,
state and local governments, their agencies, and purchasers and reimbursers or
to trade customers, including but not limited to, wholesalers and chain and
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pharmacy buying groups and charge back payments, discounts and rebates (whether
mandated or otherwise) charged by national or local government authorities in
countries other than the United States and paid or credited by Schering; and
(f) commissions paid to third parties other than sales personnel and
sale representatives or sales agents directly related to such sales.
1.19 "Other Cancer Genes" shall mean any cancer genes and
intellectual property rights related thereto outside of the Field which, during
the term of the Research Program (including any extension, if any), Myriad
Discovers or otherwise acquires rights (through license or otherwise), excluding
Previously Discovered Myriad Genes (as defined in Section 2.2.6), pathway genes
associated with Previously Discovered Myriad Genes or pathway genes which
interact with tumor suppressor genes and oncogenes in the public domain using
Myriad's protein interaction network technologies.
1.20 "Patent Rights" shall mean any and all patents and patent
applications (which for the purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention) which during the term of this Agreement are owned by Myriad or to
which Myriad through license or otherwise acquires rights (with the right to
sublicense) and which: (i) have claims covering the MMAC1 brain cancer gene;
(ii) have claims covering Licensed Product(s) or the manufacture and/or use
thereof; (iii) are in the Field; (iv) are or relate to Research Inventions (as
defined in Section 2.6); or (v) are divisions, continuations, continuations-in-
part, patents of addition, reissues, renewals, extensions, registrations,
confirmations, re-examinations, any provisional applications, supplementary
protection certificates or the like of any such patents and patent applications
and foreign equivalents thereof.
1.21 "Pathway Gene" shall mean a gene the protein product of which binds
directly with the protein product of the MMAC1 brain cancer gene or of a
prostate cancer gene or brain cancer gene Discovered under the Research Program.
1.22 "Proprietary Information" shall mean all Schering Know-How,
Myriad Know-How, and all other scientific, clinical, regulatory, marketing,
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financial and commercial information or data, whether communicated in writing or
orally or by sensory detection, which is provided by one party to the other
party in connection with this Agreement.
1.23 "Research Inventions" shall have the meaning as set forth in
Section2.6.
1.24 "Research Program" shall mean the collaborative research program to
be conducted by Myriad and Schering pursuant to Article II of this Agreement to
Discover and/or Characterize Target Genes and their Pathway Genes and reflected
in the Annual Research Plans in effect during the Research Term.
1.25 "Research Term" shall have the meaning set
forth in Section 2.8.
1.26 "Schering Know-How" shall mean information and materials,
including but not limited to, discoveries, improvements, processes, formulas,
data, inventions, know-how and trade secrets, patentable or otherwise, in each
case which during the term of the Research Program (i) are in Schering's
possession and control, (ii) are not generally known and (iii) which arise out
of the Research Program or are necessary or useful to Myriad in the performance
of its obligations under the Research Program.
1.27 "Target Gene" shall mean (i) a gene which has been linked to a
particular area of a chromosome and which is believed to be involved in or
associated with the pathogenesis of brain cancer or prostate cancer and which
has been selected by the research steering Committee (as defined in Section 2.3)
as a target for Discovery in the Research Program and (ii) the MMAC1 brain
cancer gene.
1.28 "Territory" shall mean all of the countries in the world.
1.29 "Valid Patent Claim" shall mean a claim of a an issued and
unexpired patent included within the Patent Rights, which has not been revoked
or held unenforceable or invalid by a decision of a court or other governmental
agency of competent jurisdiction, unappealable or unappealed with the time
allowed for appeal, and which has not been disclaimed, denied or admitted to be
invalid or unenforceable through reissue or disclaimer or otherwise.
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ARTICLE II
RESEARCH PROGRAM
----------------
2.1 General. Myriad and Schering shall engage in the Research
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Program upon the terms and conditions set forth in this Agreement. The
objectives of the Research Program are set forth on Exhibit 2.1 (which
objectives may be undated in writing from time to time by the Committee) and
include the Discovery and/or Characterization of Target Genes and their Pathway
Genes according to the priorities established by the Committee.
2.2 Conduct of Research; Staffing and Research.
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2.2.1 Standards. Myriad and Schering each shall conduct its
---------
respective activities for the Research Program in good scientific manner, and in
compliance in all material respects with all requirements of applicable laws,
rules and regulations and all applicable good laboratory practices to attempt to
achieve their objectives efficiently and expeditiously. In carrying out the
Research Program, Myriad and Schering, respectively, shall use commercially
reasonable efforts to perform such tasks as are set forth in and as are in
accordance with the time schedules in the Annual Research Plans.
2.2.2 Staffing. Myriad will provide for use in the Research Program
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an average of "*" full-time equivalent employees of Myriad (which may include
employees of the University of Utah hired by Myriad to work on the Research
Program) per Calendar Year during the term of the Research Program; provided,
--------
however, Myriad shall provide for use in the Research Program a minimum of "*"
-------
full time equivalent employees in each Calendar Year of the Research Program;
and provided, further, that such employees of University of Utah shall not be
--- -------- -------
more than "*" full-time equivalent employees.
2.2.3 Use of Research Funding. Myriad shall apply the research
-----------------------
funding it receives from Schering under this Agreement solely for the
performance of the Research Program (including overhead directly related to the
Research Program) and in accordance with any research budget determined by the
Committee.
_______________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
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2.2.4 Principal Scientists. The principal scientists and primary contacts
--------------------
for the Research Program are "*" for Myriad and "*" for Schering. The Research
Program and all work assignments to be performed by the Myriad and Schering
shall be carried out under the direction and supervision of the principal
scientists noted above. Each party shall notify the other party as soon as
practicable upon the changing of a principal scientist; provided, however, in no
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event may Myriad assign a principal scientist other than the individuals
identified above without the prior written consent of Schering; and provided,
------------
further, that in the event that any of the Myriad principal scientists
-------
identified above will not direct and supervise the Research Program, then Myriad
shall within a reasonable period of time assign replacement principal
scientist(s) with comparable skill and experience as the principal scientist
being replaced, subject to approval by Schering, which approval shall not be
unreasonably withheld.
2.2.5 Annual Research Plans. For each year of the Research Program
---------------------
commencing with the second year, the Annual Research Plan shall be prepared and
approved by the Committee no later than thirty (30) days before the end of the
prior year. The Annual Research Plan for the first year shall be determined by
the Committee no later than (30) days after the Effective Date. Each Annual
Research Plan shall be in writing countersigned by Schering Corp., SP Ltd. and
Myriad and shall set forth with reasonable specificity research objectives,
milestones, budgets and personnel requirements for the period covered by the
Annual Research Plan. The Committee may make adjustments in the Annual Research
Plan at its quarterly meetings or otherwise as it may determine, but only by
mutual written consent by Schering Corp. and SP Ltd.
2.2.6 Exclusivity. Myriad agrees that during the Research Term, Myriad and
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its Affiliates will not collaborate with or grant license rights to any other
party with respect to the Collaboration Exclusivity Field, except as otherwise
permitted hereby. The parties acknowledge that Myriad may enter into a research
and development collaboration with another party or parties concerning (i) the
licensing of breast and ovarian cancer genes (BRCA1 and BRCA2) and cell cycle
xxxxx (XXX0, XXX0 and MTS3) already Discovered by Myriad (collectively,
"Previously Discovered Myriad Genes") and (ii) the Discovery and licensing of
pathway genes the protein products of which interact with the Previously
___________________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
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Xxxxxxxxxx Xxxxxx Xxxxx or pathway genes which interact with tumor suppressor
genes and oncogenes in the public domain using Myriad's protein interaction
network technologies; provided, however, that Myriad agrees that it will not in
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connection with any such collaboration grant any rights to discover, develop,
manufacture, use, sell or import a Licensed Product which (i) comprises, is
derived from, is the product of, or is related to, any gene which is a Target
Gene or a Pathway Gene Discovered during the Research Term or (ii) which could
reasonably diminish or compromise Schering's rights under this Agreement or in
the Collaboration Exclusivity Field, including, without limitation, in
connection with the option rights granted and not declined under Section 3.2
herein.
2.2.7 Collaborative Efforts. The parties agree that the successful
---------------------
execution of the Research Program will require the collaborative use of both
parties' areas of expertise. The parties shall keep the Committee and each
other fully informed about the status of the Research Program.
2.3 Committee. The parties hereby establish a joint research committee
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("Committee") to facilitate the Research Program as follows:
2.3.1 Committee Activities. The Committee shall plan, administer and
---------------------
monitor the Research Program. In particular, the Committee shall prepare each
Annual Research Plan, review progress in the Research Program and recommend
necessary adjustments to the Research Program as the research takes place. In
addition, the Committee shall review relevant data, consider and advise on any
technical issues that arise, consider issues of priority, and review and advise
on any budgetary and economic matter relating to the Research Program which is
referred to the Committee.
2.3.2 Composition of the Committee. The Research Program shall be
----------------------------
conducted under the direction of the Committee comprised of three (3) named
representatives of Schering and three (3) named representatives of Myriad. Each
party shall appoint its respective representatives to the Committee from time to
time, and may substitute one or more of its representatives, in its sole
discretion, effective upon notice to the other party of such change. It is
anticipated that these representatives shall have appropriate technical
credentials and knowledge, and ongoing familiarity with the Research Program.
Additional representatives
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or consultants may from time to time, by mutual consent of the parties, be
invited to attend Committee meetings, subject to these representatives and
consultants agreeing in writing to comply with the confidentiality obligations
in Section 6.1.
2.3.3 Membership.
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The members initially shall be:
Myriad Appointees:
"*"
"*"
"*"
Schering Appointees:
"*"
"*"
"*"
2.3.4 Meetings. The Committee shall meet at least once each Calendar
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Quarter with the location for such meetings alternating between Myriad and
Schering facilities (or such other locations as is determined by the Committee).
With respect to meetings located at the Schering facilities, such meeting shall
be at the Kenilworth, New Jersey facility or the facility of the Affiliate of
Schering, Canji, Inc., located in San Diego, California. Alternatively, the
Committee may meet by means of conference call or other similar communications
equipment. An agenda for each meeting shall be issued by the Committee two (2)
weeks prior to the meeting.
2.3.5 Chairs and Issue Resolution. The Committee shall be chaired by
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two co-chair persons (the "Co-Chairs"), one appointed by Myriad and the other
appointed by Schering. Notwithstanding anything contained herein to the
contrary, in the event that the Co-Chairs and Committee cannot or do not, after
good faith efforts, reach agreement on an issue related to the conduct of the
Research Program, the issue shall be referred to the Executive Vice President of
Schering-Plough Research Institute, an Affiliate of Schering and the President
of Myriad for
______________________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
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resolution. In the event that such individuals cannot agree, the resolution
and/or course of conduct shall be determined by Schering, in its sole
discretion.
2.3.6 Minutes. The Committee shall keep accurate minutes of its
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deliberations which record all proposed decisions and all actions recommended or
taken. Drafts of the minutes shall be delivered to all Committee members within
thirty (30) days after the relevant meeting. The party hosting the meeting
shall be responsible for the preparation and circulation of the draft minutes.
Draft minutes shall be edited by the Co-Chairs and shall be issued in final form
only with their approval and agreement as evidenced by their signatures on the
minutes.
2.3.7 Expenses. Myriad and Schering shall each bear all expenses of
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their respective Committee members related to their participation on the
Committee and attendance at Committee meetings.
2.4 Exchange of Information. Upon execution of this Agreement
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Myriad shall disclose to Schering orally all Myriad Know-How not previously
disclosed. If and as reasonably requested by Schering, such Myriad Know-How
shall be reduced to writing and provided to Schering in a reasonable period of
time. During the term of the Research Program, Myriad shall also promptly
disclose to Schering orally and, if reasonably requested by Schering, then also
in writing on an ongoing basis all Myriad Know-How and other useful information
developed in connection with the Research Program, including, if requested in
accordance with Section 2.5.2 or 2.5.3, copies of the records described in
Section 2.5.1 below. Schering shall promptly disclose to Myriad during the term
of this Agreement all Schering Know-How which Schering determines, in its
discretion, may be necessary or useful to Myriad in the performance of the
Research Program. Nothing contained herein shall obligate Myriad to disclose to
Schering the Myriad Non-Shared Technology except where such disclosure is
required by Schering to prepare, file or prosecute Patent Rights pursuant to
Section 5.1.
2.5 Records and Reports.
-------------------
2.5.1 Records. Myriad shall maintain records, in sufficient detail
-------
and in good scientific manner appropriate for patent and regulatory purposes,
which shall be complete and accurate and shall reflect all work done and results
achieved in the performance of the Research Program as well as all work done in
the Field prior to the inception of the Research Program (including all data in
the form
-13-
________________________________________________________________________________
required under all applicable laws, rules and regulations). Such
records shall include books, records, reports, research notes, charts, graphs,
comments, computations, analyses, recordings, photographs, computer programs and
documentation thereof, computer information storage means, samples of materials
and other graphic or written data generated in connection with the Research
Program, including any data required to be maintained pursuant to all
requirements of applicable laws, rules and regulations.
2.5.2 Copies and Inspection of Records. Schering shall have the
--------------------------------
right, during normal business hours and upon reasonable notice, to inspect and
copy all such records of Myriad referred to in Section 2.5.1. Schering shall
maintain such records and the information disclosed therein in confidence in
accordance with Section 6.1. Schering shall have the right to arrange for its
employees and outside consultants involved in the Research Program to visit
Myriad at its offices and laboratories during normal business hours and upon
reasonable notice, and to discuss the Research Program work and its results in
detail with the technical personnel and consultants of Myriad.
2.5.3 Quarterly Reports. Within thirty (30) days following the end
-----------------
of each Calendar Quarter during the term of the Research Program, Myriad shall
provide to the Committee and Schering a written progress report which shall
describe the work performed to date on the Research Program, evaluate the work
performed in relation to the goals of the Research Program and provide such
other information required by the Research Program or reasonably requested by
Schering relating to the progress of the goals or performance of the Research
Program. Upon request, Myriad shall provide copies of the records described in
Section 2.5.1 above.
2.6 Research Information and Inventions. The entire right, title
-----------------------------------
and interest in all discoveries, improvements, processes, formulas, data,
inventions, know-how and trade secrets, whether or not patentable, and any
patent applications or patents based thereon, arising from the Research Program,
made, conceived or reduced to practice:
(a) solely by employees of Myriad shall be owned solely by Myriad
("Myriad Inventions");
-14-
(b) solely by employees of Schering shall be owned solely by Schering
("Schering Inventions"); and
(c) jointly by employees of Myriad and Schering shall be owned jointly by
Myriad and Schering ("Joint Inventions") (Myriad Inventions and Joint Inventions
shall hereinafter be referred to collectively as "Research Inventions") .
Inventorship of Research Inventions (including the meanings of "solely" and
"jointly") shall be determined in accordance with United States patent law.
2.7 License of Research Inventions. Each of Schering and Myriad
------------------------------
shall promptly disclose to the other the making, conception or reduction to
practice of Research Inventions. When a Research Invention has been made which
may reasonably be considered to be patentable, a patent application shall be
filed as soon as reasonably possible in accordance with Section 5.1. Such
Research Inventions shall be deemed to be "Patent Rights" and shall be licensed
in accordance with the terms and conditions contained in Section 3.1 herein.
With respect to Research Inventions which are not patentable, such research
information shall be deemed to be "Myriad Know-How" and/or "Schering Know-How"
and shall be licensed in accordance with the terms and conditions contained in
Section 3.1 herein.
2.8 Research Program Term. Expect as otherwise provided herein, the
---------------------
term of the Research Program shall commence on the Effective Date and continue
for a period of three (3) years (the "Initial Research Term"). Schering shall
have the exclusive option, in its discretion, to extend the Initial Research
Program on a year-by-year basis, for a total of two additional years, initially
at least ninety (90) days prior to the third (3rd) anniversary of the
commencement of the Research Program and, thereafter, at least ninety (90) days
prior to the end of forth (4th) anniversary; provided that Schering funds the
--------
Research Program for such extension at a funding level equal to at least Four
Million Dollars ($4,000,000.00) per year. Schering may exercise such option by
written notice to Myriad received by Myriad within the notice period set forth
above. Alternatively, the Research Program may be extended on a year-by-year
basis for a total of two additional years upon mutual written agreement if
Schering funds the Research Program for such extension at a funding level less
than four million dollars ($4,000,000.00) per year. The Initial Research Term
of the Research Program, together with any extensions hereunder, shall be
referred to as the "Research Term."
-15-
ARTICLE III
LICENSE; EXCHANGE OF INFORMATION; DEVELOPMENT AND
-------------------------------------------------
COMMERCIALIZATION
------------------
3.1 License Grants.
--------------
(a) Upon the terms and conditions set forth herein, Myriad hereby grants
to Schering an exclusive license (even as to Myriad) in the Territory under the
Patent Rights and Myriad Know-How to discover, develop, make, use, offer to
sell, sell, import and export, and have developed, made, used, offered for sale,
sold, imported and exported, Licensed Product(s). For the avoidance of any
doubt, such license shall exclude Diagnostics and veterinary products. As
between Schering Corp. and SP Ltd., Schering Corp. shall control all such rights
in the United States and SP Ltd. shall control such rights in the remaining
countries and territories in the Territory. The parties acknowledge and agree
that Schering and Myriad shall have a co-exclusive, perpetual, worldwide license
to use the Patent Rights and Myriad Know-How arising from the Research Program
for internal research and development purposes, with Schering's license being
subject to the exclusions herein for Diagnostic and veterinary products or uses.
Upon the terms and conditions set forth herein, Myriad hereby grants to Schering
a non-exclusive license under the Patent Rights and Myriad Know-How relating to
Diagnostics in the Territory solely for use for any Diagnostic test and/or new
Diagnostic technologies in research and development, including, without
limitation, clinical research for the development of Licensed Products, but in
no event for any commercial purpose (i.e., for sale to a third party)
whatsoever. Schering shall retain the non-exclusive right to use the Patent
Rights and Schering Know-How relating to Diagnostics for research and
development purposes.
(b) Upon the terms and conditions set forth herein and subject to the
limited non-exclusive license to Schering for Diagnostic purposes set forth in
Section 3.1(a) above, Schering hereby grants to Myriad an exclusive license
(even as to Schering) in the Territory under the Schering Inventions and
Schering Know-How to discover, develop, make, use, offer to sell, sell, import
and export, and have developed, made, used, offered for sale, sold, imported and
exported, Diagnostic devices, products or services and any device, product or
service for veterinary uses. Myriad shall retain the right to use the Patent
Rights and Myriad Know-How for research purposes.
-16-
(c) The licenses set forth in 3.1(a) and (b) above shall include the
right to grant sublicenses to Affiliates and any other third party upon the same
terms and conditions in this Agreement.
3.2 Option to Acquire Rights for Certain Other Cancer Genes. Upon
-------------------------------------------------------
the terms and conditions set forth herein, Myriad hereby grants to Schering and
its Affiliates an exclusive option during the term of the Research Program
(including any extensions, if any) to receive an exclusive license to Other
Cancer Genes (as hereinafter defined) on substantially similar terms and
conditions of the license set forth herein. It is understood by the parties
hereto that the Gene Criteria shall be satisfied in order for the commencement
of the time period for the exercise of the option for an Other Cancer Gene. In
order to trigger the option hereunder, Myriad shall deliver in writing to
Schering satisfactory information of the Gene Criteria for the Other Cancer Gene
with a written notice that such Other Cancer Gene is subject to the option.
Such notice shall also include relevant information concerning the specific
cancer or cancer indication, the current status of its research and development
of the Other Cancer Gene and Myriad's estimate of the time and cost to be
expended or the research and development program for the Other Cancer Gene.
Schering shall have ninety (90) days from the delivery of such notice to notify
Myriad in writing whether or not it is interested in exercising the option to
the Other Cancer Gene. In the event that Schering delivers written notice to
Myriad within such ninety (90) day period that it is exercising the option to an
Other Cancer Gene, then the parties shall negotiate and enter into a license
agreement within a reasonable period of time for such Other Cancer Gene on terms
and conditions substantially similar as the terms and conditions of this
Agreement. In the event that Schering delivers written notice to Myriad that
Schering is not exercising its option to an Other Cancer Gene, Myriad shall
thereafter have the right, alone or in collaboration with one or more third
parties, to pursue the licensing, development and commercialization of such
Other Cancer Gene, free of any restriction or limitation hereunder or duty to
Schering whatsoever.
3.3 Non-Exclusive License Grant. In the event the development, making,
---------------------------
having made, use or sale by Schering, its Affiliates and/or sublicensees of
Licensed Product(s) would infringe during the term of this Agreement a claim of
issued letters patent which Myriad owns or has the rights to license and which
patents are not covered by the grant in Section 3.1, Myriad hereby grants to
Schering, to the extent Myriad is legally able to do so, a non-exclusive,
royalty-free license in the Territory under such issued letters patent solely
for Schering to develop, make, have made, use and sell Licensed Product(s) in
Territory.
-17-
3.4 Exchange of Information. In addition to the obligations set forth in
-----------------------
Section 2.4, during the term of this Agreement, Myriad shall promptly disclose
to Schering orally on an ongoing basis all Myriad Know-How and other useful
information not previously disclosed. If and as reasonably requested by
Schering, Myriad Know-How shall be reduced to writing and provided to Schering
within a reasonable period of time. Schering shall disclose to Myriad during the
term of this Agreement all Schering Know-How and/or Proprietary Information
which Schering determines may be necessary or useful to Myriad in connection
with its obligations under this Agreement. Such Myriad Know-How and other
information shall be automatically deemed to be within the scope of the licenses
granted herein without payment of any additional compensation. Myriad shall
provide reasonable technical assistance at no additional cost to enable Schering
to utilize such additional Myriad Know-How if Schering elects to do so; provided
--------
that, after the expiration of the Research Program, Schering shall promptly
reimburse Myriad for any out-of-pocket expenses incurred by Myriad in providing
such assistance. Nothing contained herein shall obligate Myriad to disclose to
Schering the Myriad Non-Shared Technology.
3.5 Development and Commercialization.
---------------------------------
(a) Schering shall use its diligent good faith efforts, consistent with
the usual practice followed by Schering in pursuing the commercialization and
marketing of its other pharmaceutical products of similar potential, value and
status, at its own expense, to develop and commercialize a Licensed Product on a
commercially reasonable basis in such countries in the Territory where in
Schering's opinion it is commercially viable to do so; provided, however, that
-------- -------
Schering shall have no obligation to develop and/or commercialize a Licensed
Product in any country in which such development and/or commercialization is not
commercially viable, in Schering's opinion.
(b) In the event Schering discontinues commercialization of a Licensed
Product (a "Discontinued Product"; it being understood that a Licensed Product
not being commercially pursued by Schering which is similar in function to a
Licensed Product being commercially pursued by Schering shall not be considered
a "Discontinued Product") and is not seeking a sublicensee therefor Myriad shall
have the
-18-
right and license hereunder to either (i) pursue the commercialization
of such Discontinued Product alone or through licenses with one or more third
parties or (ii) not pursue any further commercialization of such Discontinued
Product. Myriad shall notify Schering in writing of its decision. Myriad shall
exercise its rights in accordance with the following:
(i) If Myriad decides to pursue the commercialization of such
Discontinued Product, Myriad and Schering agree to meet, in good faith, to
discuss and agree upon what Proprietary Information of Schering related to the
Discontinued Product may be utilized by Myriad and any third party licensee(s)
in connection with their commercialization efforts with respect to such
Discontinued Product. If Schering, in its sole discretion, agrees to permit
Proprietary Information of Schering related to the Discontinued Product to be
used in such commercialization efforts, Myriad and Schering shall agree upon an
equitable division of royalties and milestone payments paid to Myriad by such
licensee, based on the relative contributions of Schering, Myriad and the third
party licensee to the development and commercialization of the Discontinued
Product. Schering and Myriad agree that the terms under which Myriad may seek a
third party licensee pursuant to this Section 3.5(b) will include provisions to
protect the confidentiality of all Proprietary Information of Schering.
(ii) If Myriad initially decides not to pursue commercialization of
such Discontinued Product, but later decides to begin commercialization, it will
notify Schering in writing of this decision. Myriad shall provide Schering with
the opportunity to re-initiate commercialization of such Discontinued Product
and if Schering so re-initiates commercialization, such product shall no longer
be considered a Discontinued Product and shall be considered a Licensed Product.
3.6 Excused Performance. In addition to the provisions of Article
-------------------
IX hereof, the obligations of Schering with respect to a Licensed Product under
Section 3.5 are expressly conditioned upon the continuing absence of any adverse
condition or event which warrants a delay in commercialization of the Licensed
Product including, but not limited to, an adverse condition or event relating to
the safety or efficacy of a Licensed Product or unfavorable pricing, pricing
reimbursement or labeling, and the obligation of Schering to develop or market
any such Licensed Product shall be delayed or suspended so long as in Schering's
reasonable opinion any such condition or event exists.
-19-
3.7 Governmental Inspections. Myriad shall advise and provide a
------------------------
reasonable description to Schering of any governmental visits to, or written or
oral inquiries about, any facilities or procedures related to the Research
Program or Licensed Product promptly (but in no event later than five (5)
calendar days) after the beginning of such visit or inquiry. Schering shall have
the right to participate in any communications, inspections or meetings with
regulatory authorities if such communications, inspections or inquiries may
impact the Research Program or Licensed Product in the Territory as determined
by Schering in its sole discretion. Myriad shall furnish to Schering, (a) within
two (2) days after receipt, any report or correspondence issued by the
governmental authority in connection with such visit or inquiry, including but
not limited to any FDA Form 483, Establishment Inspection Reports, and warning
letters, and (b) five (5) days prior to delivery to a governmental authority,
copies of any and all responses or explanations relating to items set forth
above, in each case purged only of trade secrets unrelated to the Research
Program or Licensed Product.
3.8 Notice of Adverse Reactions. Myriad shall promptly report to
---------------------------
Schering any information regarding adverse events related to the use of the
Licensed Product in accordance with the Adverse Event Reporting Procedures
attached hereto as Exhibit 3.8 (as may be amended from time to time upon mutual
agreement) which Adverse Event Reporting Procedures shall be incorporated herein
by reference.
3.9 Debarment. Myriad represents and warrants that it has not been
---------
debarred and is not subject to debarment and that it will not use in any
capacity, in connection with the services to be performed under this Agreement,
any person who has been debarred pursuant to Section 306 of the Federal Food,
Drug, and Cosmetic Act, 21 U.S.C. (S)335a, or who is the subject of a conviction
described in such section. Myriad agrees to inform Schering immediately in
writing if it or any person who is performing services hereunder is debarred or
is the subject of a conviction described in Section 306, or if any action, suit,
claim, investigation, or legal or administrative proceeding is pending or, to
the best of Myriad's knowledge, is threatened, relating to the debarment or
conviction of Myriad or any person performing services hereunder.
-20-
ARTICLE IV
PAYMENTS; ROYALTIES AND REPORTS
-------------------------------
4.1 Research Program Funding. In consideration for Myriad's performance of
------------------------
its obligations under the Research Program, upon the terms and conditions
contained herein, Schering shall pay Myriad an amount equal to three million
dollars ($3,000,000.00) per year during the Initial Research Term payable in
four (4) quarterly installments of seven hundred and fifty thousand dollars
($750,000.00). Such installments shall be due on the first day of the month of
each three-month period during each twelve-month period of the Research Term,
with the first installment being due within seven (7) days after Effective Date
of this Agreement. The obligation for such payment shall be apportioned equally
between Schering Corp. and SP Ltd.
4.2 Equity Investment. Schering Corp. shall make a four million dollar
-----------------
($4,000,000.00) investment in Myriad Common Stock at a purchase price per share
equal to the Fair Market Value of the Common Stock on the Effective Date,
pursuant to a stock purchase agreement substantially in form and substance
attached hereto as Attachment 4.2.
4.3 Gene Discovery Technology Fee. In consideration for access to Myriad's
-----------------------------
gene discovery technology and expertise already developed through Myriad's
research and development activities, Schering shall pay to Myriad four million
dollars ($4,000,000.00) within five (5) days after the execution and delivery of
this Agreement. The obligation for such payment shall be apportioned equally
between Schering Corp. and SP Ltd.
4.4 Milestone Payments. Subject to the terms and conditions contained of
------------------
this Agreement, Schering shall pay to Myriad the following milestone payments:
(a) "*";
(b) ""*";
(c) "*";
___________________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
-21-
(d) "*" upon the "*";
(e) "*" upon the "*"; and
(f) "*" upon the "*".
Schering shall notify Myriad in writing within thirty (30) calendar days upon
the achievement of each milestone. The obligation for such payment shall be
apportioned between Schering Corp. and SP Ltd. Within five (5) business days of
such notice, Schering shall make payment of the appropriate milestone amount in
accordance with Section 4.6(b). The milestone payment shall be payable only
upon the initial achievement of such milestone for each Licensed Product or gene
Discovered and Characterized under the standards set forth in subsection (a) and
(b) above and no amounts shall be due hereunder for subsequent or repeated
achievement of such milestone; provided, however, for each of the milestones set
-------- -------
forth in subsections (c) through (f) above, such milestones will be paid for
each distinct Licensed Product (which constitute unrelated chemical entities
having therapeutic activity based upon different mechanisms of actions) to
achieve such milestones; provided, further, however, no milestones shall be due
-------- ------- -------
and owing for a back-up or replacement to a distinct Licensed Product.
4.5 Royalties.
---------
4.5.1 Royalties Payable By Schering. Subject to the terms and
-----------------------------
conditions of this Agreement, Schering Corp. shall pay to Myriad royalties on
sales in the United States, including its territories and possessions, in an
amount equal to:
(a) with respect to annual cumulative Net Sales of a Licensed Product in
the United States, including its territories and possessions, of up to "*" by
Schering, its Affiliates or sublicensee, "*" of such annual Net Sales of such
Licensed Product, provided, (i) the sale of the Licensed Product would, but for
--------
the license hereunder, infringe a Valid Patent Claim in such country of sale or
(ii) a claim of a pending patent covers the Licensed Product in such country of
sale; or
__________________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
-22-
(b) with respect to annual cumulative Net Sales of a Licensed Product in
the United States, its territories and possessions, of more than "*" but less
than "*" by Schering, its Affiliates and the sublicensees, "*" of such
incremental annual Net Sales of such Licensed Product, provided, (i) the sale of
--------
the Licensed Product would, but for the license hereunder, infringe a Valid
Patent Claim in such country of sale or (ii) a claim of a pending patent covers
the Licensed Product in such country of sale; or
(c) with respect to annual cumulative Net Sales of a Licensed Product in
the United States, its territories and possessions, of more than "*" by
Schering, its Affiliates or sublicensees, "*" of such incremental annual Net
Sales of such Licensed Product, provided, (i) the sale of such Licensed Product
--------
would, but for the license hereunder, infringe a Valid Patent Claim in such
country of sale or (ii) a claim of a pending patent covers the License Product
in such country of sale.
Subject to the terms and conditions of this Agreement, SP Ltd. shall pay to
Myriad royalties on sales in the rest of the world other than the United States
on a country-by-country basis in an amount equal to:
(a) with respect to annual cumulative, worldwide (other than the United
States, its territories and possessions) Net Sales of a Licensed Product of up
to "*" by Schering, its Affiliates or sublicensees, "*" of such annual Net Sales
of such Licensed Product, provided, the sale of the Licensed Product (i) would,
--------
but for the license hereunder, infringe a Valid Patent Claim in such country of
sale or (ii) would be covered by a claim of a pending patent in such country of
sale; or
(b) with respect to annual cumulative, worldwide (other than the United
States, its territories and possessions) Net Sales of a Licensed Product of more
than "*" but less than "*" by Schering, its Affiliates and the sublicensees, "*"
of such incremental annual Net Sales of such Licensed Product, provided, the
--------
sale of the Licensed Product (i) would, but for the license hereunder, infringe
a Valid Patent Claim in such country of sale or (ii) would be covered by a claim
of a pending patent in such country of sale; or
___________________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
-23-
(c) with respect to annual cumulative, worldwide (other than the United
States, its territories and possessions) Net Sales of a Licensed Product of more
than "*" by Schering, its Affiliates or sublicensees, "*" of such incremental
annual Net Sales of such Licensed Product, provided, the sale of such Licensed
--------
Product (i) would, but for the license hereunder, infringe a Valid Patent Claim
in such country of sale or (ii) would be covered by a claim of a pending patent
in such country of sale.
By way of example and for avoidance of doubt, if there were, for example,
worldwide (other than the United States) annual Net Sales of "*" SP Ltd. would
pay royalties of "*" on the first "*" and "*" on the remaining "*". In the next
year, the "*" royalty would then be in effect on the first "*" of cumulative,
worldwide (other than the United States) annual Net Sales. The parties
acknowledge and agree that the above figures do not represent an estimate or
projection of anticipated sales of the actual value of Licensed Products and are
merely intended to illustrate Schering's royalty obligations to Myriad in the
event that such sales performance is achieved.
For sales of Licensed Product that are not covered by a pending patent or
Valid Patent Claim and a "generic" version of a Licensed Product or a product
equivalent or materially similar to Licensed Product is sold in such country,
the royalty rate for sales with such country shall be reduced by "*". By way of
example and for avoidance of doubt, if a Licensed Product is not covered by a
Valid Patent Claim but there is no generic or substantially similar product to
Licensed Product in such country, the royalty rate is not reduced hereunder.
4.5.2 Term of Royalty Obligation; Certain Conditions. Royalties on
----------------------------------------------
each Licensed Product at the rate set forth above shall be effective as of the
date of First Commercial Sale of Licensed Product in a country and shall be
payable under the longer of Subsection (a) or (b): (a) until the expiration of
the last applicable patent in such country in the case of sales where there is a
Valid Patent Claim in such country; or (b) until the tenth (10th) anniversary
after the First Commercial Sale. Payment of the royalty is subject to the
following conditions:
___________________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
-24-
(i) that only one royalty shall be due with respect to the same
unit of Licensed Product;
(ii) that no royalties shall be due upon the sale or other transfer
among Schering, its Affiliates or sublicensees, but in such cases the royalty
shall be due and calculated upon Schering's or its Affiliate's or its
sublicensee's Net Sales to the first independent third party; and
(iii) no royalties shall accrue on the disposition of Licensed
Product in reasonable quantities by Schering, Affiliates or its sublicenses as
samples (promotion or otherwise) or as donations (for example, to non-profit
institutions or government agencies for a non-commercial purpose) or for
clinical studies.
4.5.3 Compulsory Licenses. If a compulsory license is granted to a
-------------------
third party with respect to Licensed Product in any country in the Territory
with a royalty rate lower than the royalty rate provided by Section 4.5.1, then
the royalty rate to be paid by Schering on Net Sales in that country under
Section 4.5.1 shall be reduced to the rate paid by the compulsory licensee.
4.5.4 Third Party Licenses. In the event that patent licenses from
--------------------
other third parties are required by Schering, its Affiliates and sublicensees in
order to develop, make, have made, use or sell Licensed Product (hereinafter
"Third Party Patent Licenses"), an amount equal to "*" of any royalties and/or
payments actually paid under such Third Party Patent Licenses by Schering for
sale of such Licensed Product in a country for such Calendar Quarter shall be
creditable and offset against the royalty payments due Myriad with respect to
the sale of such Licensed Products in such country; provided, however, that in
-------- -------
no event shall the reduction of royalties due to Myriad exceed "*" in any
Calendar Quarter. Unused amounts may be carried over into subsequent quarterly
periods.
4.6 Reports; Method of Payment; Payment Exchange Rate and Currency
-------------------------------------------------------------
Conversions.
-----------
___________________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
-25-
(a) Within ninety (90) days following the close of each Calendar
Quarter, following the First Commercial Sale of a Licensed Product, Schering
shall furnish to Myriad a written report for the Calendar Quarter showing the
Net Sales of Licensed Product sold by Schering, its Affiliates and its
sublicensees in the Territory during such Calendar Quarter and the royalties
payable under this Agreement for such Calendar Quarter. Simultaneously with the
submission of the written report, Schering shall pay to Myriad, for the account
of Schering or the applicable Affiliate or sublicensee, as the case may be, a
sum equal to the aggregate royalty due for such Calendar Quarter calculated in
accordance with this Agreement (reconciled for any previous overpayments or
underpayments).
(b) Payments to be made by Schering to Myriad under this Agreement
shall be paid by check made to the order of Myriad or by bank wire transfer in
immediately available funds to such bank account in the United States designated
in writing by Myriad from time to time. Royalties shall be deemed paid by the
entity making the Net Sales from the country in which earned in local currency
and subject to foreign exchange regulations then prevailing. Royalty payments
shall be made in United States dollars to the extent that free conversions to
United States dollars is permitted. The rate of exchange to be used in any such
conversion from the currency in the country where such Net Sales are made shall
be the commercial rate of exchange prevailing in the United States on the last
day of the calendar quarter for which such payments are made as customarily
quoted for use for currency conversions between Schering and its Affiliates.
If, due to restrictions or prohibitions imposed by national or international
authority, payments cannot be made as aforesaid, the parties shall consult with
a view to finding a prompt and acceptable solution, and Schering shall, from
time to time, deal with such monies as Myriad may lawfully direct at no
additional out-of-pocket expense to Schering. Notwithstanding the foregoing, if
royalties in any country cannot be remitted to Myriad for any reason within six
(6) months after the end of the Calendar Quarter during which they are earned,
then Schering shall be obligated to deposit the royalties in a bank account in
such country in the name of Myriad.
4.7 Maintenance of Records; Audits.
------------------------------
(a) Schering shall keep complete and accurate records in sufficient
detail to enable the royalties payable hereunder to be determined. Upon the
written request of Myriad and not more than once in each Calendar Year, Schering
shall permit an independent certified public accounting firm of nationally
recognized
-26-
standing selected by Myriad and reasonably acceptable to Schering, at
Myriad's expense, to have access during normal business hours to such of the
records of Schering as may be reasonably necessary to verify the accuracy of the
royalty reports hereunder for any year ending not more than twenty-four (24)
months prior to the date of such request and no later than forty-five (45) days
after written request is made. The accounting firm shall disclose to Myriad
only whether the royalty reports are correct or incorrect and the specific
details concerning any discrepancies. No other information shall be provided to
Myriad.
(b) If such accounting firm correctly concludes that additional royalties
were owed during such period, Schering shall pay the additional royalties within
thirty (30) days of the date Myriad delivers to Schering such accounting firm's
written report so correctly concluding. Schering shall receive a credit for any
overpayment of royalties. The fees charged by such accounting firm shall be paid
by Myriad except Schering shall pay such fees in the event that the additional
royalties owed by Schering vary from royalties paid by five percent (5%) or
greater.
(c) Schering shall include in each sublicense granted by it pursuant to
this Agreement a provision requiring the sublicensee to make reports to
Schering, to keep and maintain records of sales made pursuant to such sublicense
and to grant access to such records by Myriad's independent accountant to the
same extent required of Schering under this Agreement. Upon the expiration of
twenty-four (24) months following the end of any year, the calculation of
royalties payable with respect to such year shall be binding and conclusive upon
Myriad, and Schering and its sublicensees shall be released from any liability
or accountability with respect to royalties for such year.
(d) Myriad shall treat all financial information subject to review under
this Section 4.7 or under any sublicense agreement in accordance with the
confidentiality provisions of this Agreement, and shall cause its accounting
firm to enter into an acceptable confidentiality agreement with Schering
obligating it to retain all such financial information in confidence pursuant to
such confidentiality agreement.
4.8 Income Tax Withholding. If at any time, any jurisdiction within the
----------------------
Territory requires the withholding of income taxes or other taxes imposed upon
payments set forth in this Article IV, Schering shall make such withholding
payments as required and subtract such withholding payments from the payments
set
-27-
forth in this Article IV, or if applicable, Myriad will promptly reimburse
Schering or its designee(s) for the amount of such payments. Schering shall
provide Myriad with documentation of such withholding and payment in a manner
that is satisfactory for purposes of such taxing authority. Any withholdings
paid when due hereunder shall be for the account of Myriad and shall not be
included in the calculation of Net Sales. Myriad shall be liable for any
deficiency, and any fine, assessment or penalty imposed by any taxing authority
in the Territory for any deficiency in the amount of any such withholding or the
failure to make such withholding payment, which obligation shall survive the
termination of the Agreement for a time period no less than the applicable
statute of limitations. If Schering is required to pay any such deficiency, or
any fine, assessment or penalty for any such deficiency, Myriad shall promptly
reimburse Schering for such payments, which shall not be included in the
calculation of Net Sales.
4.9 Direct Affiliate Licenses. Whenever Schering shall reasonably
-------------------------
demonstrate to Myriad that, in order to facilitate direct royalty payments by an
Affiliate, it is desirable that a separate license agreement be entered into
between Myriad and such Affiliate, Myriad shall grant such licenses directly to
such Affiliate by means of an agreement which shall be consistent with all of
the provisions hereof, provided that Schering guarantees the Affiliate's
obligations thereunder.
ARTICLE V
PATENTS
-------
5.1 Filing, Prosecution and Maintenance of Patents. Each of Schering
----------------------------------------------
and Myriad agrees to file, prosecute and maintain in the Territory, upon
appropriate consultation with the other, the Patent Rights owned by it and
licensed under this Agreement. With respect to Joint Inventions, the Committee
shall decide which party shall file, prosecute and maintain in the Territory the
Patent Rights jointly owned by Schering and Myriad. Schering shall be
responsible for the costs and expenses for the filing, prosecution and
maintenance of the Patent Rights owned by it. With respect to Patent Rights
owned by Myriad, Myriad shall be responsible for the costs and expenses for the
filing, prosecution and maintenance of the Patent Rights owned by it in the
United States and with respect to such costs and expenses for the filing,
prosecution and maintenance of the Patent Rights outside of the United States,
Schering shall reimburse Myriad for such costs and expenses so long as, and only
if, Schering has agreed in writing with the filing, prosecution and maintenance
of such Patent Rights. With respect to Joint Inventions, the costs and
-28-
expenses therefore shall be apportioned by the Committee during the Research
Term and thereafter by the parties, in accordance with and consistent with the
principals set forth above. Notwithstanding anything contained herein to the
contrary, Myriad shall be responsible for the filing, prosecution and
maintenance in the Territory and the costs and expenses therefore for Patent
Rights relating to Diagnostics and veterinary products. Each of Schering and
Myriad shall provide to the other reasonable assistance to file and prosecute
the Patent Rights, which shall include, without limitation, providing any data
and information relating to the invention and access to the inventors of said
inventions, as well as causing the execution of any patent documents. Each of
Schering and Myriad shall have the right to use outside counsel to file and
prosecute the Patent Rights, to be selected in the case of jointly owned or
Schering owned Patent Rights, by Schering and reasonably acceptable to Myriad
and, in the case of Myriad owned Patent Rights, to be selected by Myriad and
reasonably acceptable to Schering. In each case, the filing party shall give the
non-filing party an opportunity to review the text of the applications before
filing, shall consult with the non-filing party with respect thereto, and shall
supply the non-filing party with a copy of the applications as filed, together
with notice of its filing date and serial number. Each of Schering and Myriad
shall keep the other advised of the status of the actual and prospective patent
filings (including, without limitation, the grant of any Patent Rights) and upon
the request of a party, provide advance copies of any papers related to the
filing, prosecution and maintenance of such patent filings.
5.2 Option to Prosecute and Maintain Patents. A filing party shall
----------------------------------------
give notice to the other of any desire to cease prosecution and/or maintenance
of Patent Rights and, in such case, shall permit the original non-filing party,
at its sole discretion, to continue prosecution or maintenance at its own
expense. If an original non-filing party elects to continue prosecution or
maintenance, the original party responsible for filing and maintenance of the
Patent Rights shall execute such documents and perform such acts as may be
reasonably necessary to effect an assignment of such Patent Rights to the
original non-filing party in a timely manner to allow such party to continue
such prosecution or maintenance. Any patents or patent applications so assigned
shall no longer be considered Patent Rights.
5.3 Enforcement.
-----------
(a) In the event that a party becomes aware of threatened or actual
infringement in a country in the Territory of any issued patent within the
Patent
-29-
Rights, such party will notify the other in writing to that effect, including
with said written notice evidence to support an allegation of infringement by
such third party.
(b) Myriad shall be responsible for, in its sole discretion, obtaining a
discontinuance of such infringement or bringing suit against the third party
infringer with respect to Patent Rights owned by Myriad that are specifically
directed to Diagnostic or veterinary rights or products. Notwithstanding
anything contained herein to the contrary, Myriad shall have the right, but not
the obligation, to bring such a suit. Myriad shall bear all the expenses of any
such suit brought by it and shall retain any and all recovery and damages
therefrom. Schering shall cooperate with Myriad (with any reasonable, receipted
out-of-pocket expenses being reimbursed to Schering by Myriad) in any such suit
for infringement of a Patent Right with respect to Diagnostic and veterinary
rights or products brought by Myriad against a third party (which shall include
providing any necessary assistance and executing any necessary documents), and
shall have the right to consult with Myriad and to participate in and be
represented by independent counsel in such litigation at its own expense. Myriad
shall incur no liability to Schering as a consequence of such litigation with
respect to Diagnostic and veterinary rights or products or any unfavorable
decision resulting therefrom.
(c) Schering shall be responsible for, in its sole discretion,
obtaining a discontinuance of any infringement or bring suit against a third
party infringer with respect to a Licensed Product in the Field.
Notwithstanding anything contained herein to the contrary, Schering shall have
the right, but not the obligation, to bring such a suit. Schering shall hear
all the expenses of any such suit brought by it and shall retain any and all
recovery and damages therefrom; provided, however, after all costs and expenses
-------- -------
have been deducted from the recovery and damages, then from the remaining amount
Myriad will receive royalties equal to those due under the terms of this
Agreement either (i) for the sale of any products which are found to be
infringing Patent Rights in the final decision of a court or arbitrator or (ii)
for patent infringement claims which are settled for the sale of any products
which were alleged to have infringed Patent Rights. Myriad agrees to be named
as a co-plaintiff if Schering brings suit and shall cooperate with Schering
(with any reasonable, receipted out-of-pocket expenses being reimbursed to
Myriad by Schering) in any such suit for infringement of a Patent Right brought
by Schering against a third party (which shall include providing any necessary
assistance and executing any necessary documents), and shall have the right to
consult with Schering and to participate in and be represented by independent
counsel in such litigation at its own
-30-
expense. Schering shall incur no liability to Myriad as a consequence of such
litigation or any unfavorable decision resulting therefrom. In the event,
Schering chooses not to prosecute an infringement, Myriad shall have the right
to do so. In such event, Schering shall cooperate with Myriad (which shall
include providing any necessary assistance and executing any necessary
documents) and Myriad shall retain any and all recovery and damages from such
suit. No settlement, consent judgment or other voluntary final disposition of
the suit may be entered into without the consent of Schering.
5.4 Third Party Infringement Suit. In the event that a third party sues
------------------------------
Schering alleging that Schering's, its Affiliates' or its sublicensees' making,
using, importing, exporting, offering to sell or selling Licensed Products
infringes or will infringe said third party's patent, then Schering may elect to
defend such suit and, during the period in which such suit is pending, Schering
shall have the right to withhold during the litigation up to fifty percent (50%)
of the royalties due Myriad on sales of the allegedly infringing Licensed
Product against its litigation expenses. If, as a result of a judgment in the
litigation or settlement with the third party, Schering is required to pay
royalties or other monies to such third parties, one-half (1/2) of such payments
shall be offset against any royalties due Myriad hereunder, but only to the
extent of reducing the royalties due Myriad by thirty three and one third
percent (33 1/3%) in any Calendar Quarter. Unused amounts may be carried over to
subsequent quarters.
5.5 Certification under Drug Price Competition and Patent Term
----------------------------------------------------------
Restoration Act. Myriad and Schering each shall immediately give notice to the
---------------
other of any certification of which they become aware filed under the United
States "Drug Price Competition and Patent Term Restoration Act of 1984" claiming
that Patent Rights covering Compound(s) or Licensed Product(s) are invalid or
that infringement will not arise from the manufacture, use, import, export,
offer to sell or sale of Compound(s) or Licensed Product(s) by a third party.
If Myriad or Schering (depending on which party is defending the Patent Rights)
decides not to bring infringement proceedings against the entity making such a
certification, such party shall give notice to the other party of its decision
not to bring suit within twenty-one (21) days after receipt of notice of such
certification. The party receiving such notice may then, but is not required
to, bring suit against the party that filed the certification. For this
purpose, the party not bringing suit shall execute such legal papers necessary
for the prosecution of such suit as may be reasonably requested by the party
bringing suit.
-31-
5.6 Abandonment. Each of Schering and Myriad shall promptly give notice to
-----------
the other, and in no case later than ninety (90) days prior to, the lapse,
revocation, surrender, invalidation of abandonment of any Patent Rights for
which it is responsible for the filing, prosecution and maintenance.
5.7 Patent Term Restoration. The parties hereto shall cooperate with each
-----------------------
other in obtaining patent term restoration or supplemental protection
certificates or their equivalents in any country in the Territory where
applicable to Patent Rights. In the event that elections with respect to
obtaining such patent term restoration are to be made, each of Schering and
Myriad shall have the right to make the election and non-selecting party agrees
to abide by such election.
5.8 Notices. All notices, inquiries and communications in connection with
-------
this Article V shall be sent to:
If to Myriad:
Venable, Baetjer, Xxxxxx & Xxxxxxxxx
Suite 1000
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
If to Schering:
Schering Corporation
0000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Staff Vice President and Associate General
Counsel, Patents and Trademarks
ARTICLE VI
CONFIDENTIALITY AND PUBLICATION
-------------------------------
6.1 Nondisclosure Obligation. Myriad and Schering shall use Proprietary
------------------------
Information only in accordance with this Agreement and shall not disclose to any
third party any Proprietary Information disclosed by one party to the other,
without the prior written consent of the other party. The foregoing obligations
shall survive
-32-
the expiration or termination of this Agreement for a period of ten (10) years.
These obligations shall not apply to Proprietary Information that:
(a) is known by the receiving party at the time of its receipt, and not
through a prior disclosure by the disclosing party, as documented by business
records;
(b) is at the time of disclosure or thereafter becomes published or
otherwise part of the public domain without breach of this Agreement by the
receiving party;
(c) is subsequently disclosed to the receiving party by a third party who
has the right to make such disclosure;
(d) is developed by the receiving party independently of Proprietary
Information or other information received from the disclosing party and such
independent development can be properly demonstrated by the receiving party;
(e) is disclosed to governmental or other regulatory agencies in order to
obtain patents or to gain approval to conduct clinical trials or to market
Licensed Product, but such disclosure may be only to the extent reasonably
necessary to obtain such patents or authorizations;
(f) is necessary to be disclosed to sublicensees, agents, consultants,
Affiliates and/or other third parties for the research and development,
manufacturing and/or marketing of Licensed Product (or for such parties to
determine their interest in performing such activities) in accordance with this
Agreement on the condition that such third parties agree to be bound by the
confidentiality obligations contained in this Agreement, provided that the term
--------
of confidentiality for such third parties shall be no less than ten (10) years;
or
(g) is required to be disclosed by law or court order, provided that
notice is promptly delivered to the other party in order to provide an
opportunity to seek a protective order or other similar order with respect to
such Proprietary Information and thereafter discloses only the minimum
information required to be disclosed in order to comply with the request,
whether or not a protective order or other similar order is obtained by the
other party.
-33-
Nothing herein shall be interpreted to prohibit either party from publishing the
results of its studies in accordance with industry practices and as more further
set forth in Section 6.3.
6.2 No Publicity. A party may not use the name of the other party in any
------------
publicity or advertising and, except as provided in Section 6.1, may not issue a
press release or otherwise publicize or disclose any information related to this
Agreement or the terms or conditions hereof, without the prior written consent
of the other party. The parties shall agree on a form of initial press release
that may be used by either party to describe this Agreement. Nothing in the
foregoing, however, shall prohibit a party from making such disclosures to the
extent deemed necessary under applicable federal or state securities laws or any
rule or regulation of any nationally recognized securities exchange; in such
event, however, the disclosing party shall use good faith efforts to consult
with the other party prior to such disclosure and, where applicable, shall
request confidential treatment to the extent available.
6.3 Publication. During the term of the Research Program, Schering
-----------
and Myriad each acknowledge the other party's interest in publishing its results
to obtain recognition within the scientific community and to advance the state
of scientific knowledge. Each party also recognizes the mutual interest in
obtaining valid patent protection and in protecting business interests and trade
secret information. Consequently, either party, its employees or consultants
wishing to make a publication covering information arising from the Research
Program or in the Field shall deliver to the other party a copy of the proposed
written publication or an outline of an oral disclosure at least sixty (60) days
prior to submission for publication or presentation (the "Review Period"). If
either party reasonably determines that the proposed disclosure would reveal a
Research Invention or Proprietary Information, then such party shall notify the
other of such determination and its basis prior to the expiration of the Review
Period. With respect to disclosure of a Research Invention, both parties agree
not to submit the written publication or presentation of the oral public
disclosure, or otherwise disclose the results of the Research Program in any
manner that would compromise Myriad's or Schering's ability to obtain valid
Patent Rights covering such Invention. Neither party shall disclose results of
the Research Program and/or any Research Invention until one of the following
events occurs: (i) Schering and Myriad agree that no patentable Research
Invention exists; (ii) Schering or Myriad files a patent application claiming
the relevant Invention pursuant to Section 5.1; or (iii) Schering and Myriad
jointly agree upon revisions that prevent disclosure of any Invention. The
foregoing
-34-
notwithstanding, in the event that either of Schering or Myriad
(hereinafter referred to as a "notifying party") notifies the other that a
proposed publication of results of the Research Program contains information
which is of substantial commercial importance to the notifying party, the
proposed publication shall be delayed by the publishing party (including any
other form of public disclosure of such information) for a period not to exceed
eighteen (18) months from the filing date of the first patent application
covering the information contained in the proposed publication. In the event
that the notifying party notifies the other of evidence that an independent
third party is preparing to publish, or otherwise publicly disclose, essentially
the same information as that contained in the proposed publication which has
been delayed, the notifying party will seriously consider a request by the
publishing party to allow such delayed publication to occur on an expedited
bases, provided that absent written approval from the notifying party no such
expedited publication shall occur.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
------------------------------
7.1 Representations and Warranties of Each Party. Each of Myriad and
--------------------------------------------
Schering hereby represents, warrants and covenants to the other party hereto as
follows:
(a) it is a corporation duly organized and validly existing under the
laws of the state or other jurisdiction of incorporation or formation;
(b) the execution, delivery and performance of this Agreement by such
party has been duly authorized by all requisite corporate action, subject only
to receipt of requisite boards of directors' approvals;
(c) 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 III;
(d) the execution, delivery and performance by such party of this
Agreement and its compliance with the terms and provisions hereof does not and
will 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
-35-
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;
(e) except for the governmental and regulatory approvals required to
market the Licensed Product in the Territory, the execution, delivery and
performance of this Agreement by such party does not require the consent,
approval or authorization of, or notice, declaration, filing or registration
with, any governmental or regulatory authority and the execution, delivery or
performance of this Agreement will not violate any law, rule or regulation
applicable to such party;
(f) this Agreement has been duly authorized, executed and delivered
and 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 creditors' rights and to the availability of particular
remedies under general equity principles; and
(g) it shall comply with all applicable material laws and regulations
relating to its activities under this Agreement.
7.2 Myriad's Representations. Myriad hereby represents, warrants and
------------------------
covenants to Schering as follows:
(a) to the best of Myriad's knowledge, Patent Rights and Myriad Know-
How are subsisting and are not invalid or unenforceable, in whole or in part;
(b) it has the full right, power and authority to grant all of the right,
title and interest in the licenses granted under Article III hereof;
(c) it has not previously assigned, transferred, conveyed or otherwise
encumbered its right, title and interest in Patent Rights or Myriad Know-How;
(d) to the best of Myriad's knowledge, it is the sole and exclusive
owner of the existing Patent Rights and Myriad Know-How, all of which are free
and clear of any liens, charges and encumbrances, and no other person, corporate
or other private entity, or governmental entity or subdivision thereof, has or
shall have any
-36-
claim of ownership with respect to the Patent Rights and Myriad Know-How,
whatsoever;
(e) to the best of Myriad's knowledge, the licensed Patent Rights and
Myriad Know-How and the development, manufacture, import, export, offer to sell,
use and sale of Licensed Products will not interfere or infringe on any
intellectual property rights owned or possessed by any third party;
(f) to the best of Myriad's knowledge, there are no third party pending
patent applications which, if issued, may cover the Patent Rights or
manufacture, use or sale of Licensed Product;
(g) there are no claims, judgments or settlements against or owed by the
Myriad or pending or threatened claims or litigation relating to Patent Rights
and Myriad Know-How;
(h) it has disclosed and will disclose, consistent with the terms of
this Agreement, to Schering all Myriad Know-How and other relevant information,
including, without limitation, all Myriad Know-How and other information
relating to the Patent Rights, the Licensed Product and the Research Program;
(i) Myriad will use diligent efforts not to diminish the right under
Myriad Know-How granted to Schering hereunder, including, without limitation, by
not committing or permitting any acts or omissions which would cause the breach
of any agreements between itself and third parties which provide for
intellectual property rights applicable to the development, manufacture, use or
sale of Licensed Product and in connection therewith, Myriad agrees to provide
Schering promptly with notice of any such alleged breach and Myriad is in
compliance in all material respects with any such agreements with third parties;
(j) there are no collaborative, licensing, material transfer, supply,
distributorship or marketing agreements or arrangements or other similar
agreements to which Myriad or any of its Affiliates are party relating to the
Patent Rights or Myriad Know-How, nor has Myriad granted any rights to any third
party with respect to the Patent Rights or Myriad Know-How.
7.3 Continuing Representations. The representations and warranties
---------------------------
of each Party contained in Sections 7.1 and 7.2 shall survive the execution of
this
-37-
Agreement and shall remain true and correct after the date hereof with the same
effect as if made as of the date hereof.
7.4 No Inconsistent Agreements. Neither Party has in effect and
---------------------------
after the Effective Date neither Party shall enter into any oral or written
agreement or arrangement that would be inconsistent with its obligations under
this Agreement.
ARTICLE VIII
INDEMNIFICATION AND LIMITATION ON LIABILITY
-------------------------------------------
8.1 Indemnification by Schering. Schering shall indemnify, defend and hold
---------------------------
harmless Myriad and its Affiliates, and each of its and their respective
employees, officers, directors and agents (each, a "Myriad Indemnified Party")
from and against any and all liability, loss, damage, cost, and expense
(including reasonable attorneys' fees), subject to the limitations in Sections
8.5 and 8.6 (collectively, a "Liability") which the Myriad Indemnified Party may
incur, suffer or be required to pay resulting from or arising in connection with
(i) the breach by Schering of any covenant, representation or warranty contained
in this Agreement, (ii) any negligent act or omission or willful misconduct of
Schering (or any Affiliate thereof) in (or any strict liability claim based on)
the promotion, marketing and sale of the Licensed Product or any other activity
conducted by Schering under this Agreement which is the proximate cause of
injury, death or property damage to a third party, (iii) the successful
enforcement by a Myriad Indemnified Party of its rights under this Section 8.1.
8.2 Indemnification by Myriad. Myriad shall indemnify, defend and hold
-------------------------
harmless Schering and its Affiliates, and each of its and their respective
employees, officers, directors and agents (each, a "Schering Indemnified Party")
from and against any Liability which the Schering Indemnified Party may incur,
suffer or be required to pay resulting from or arising in connection with (i)
the breach by Myriad of any covenant, representation or warranty contained in
this Agreement; or (ii) the successful enforcement by a Schering Indemnified
Party of its rights under this Section 8.2.
8.3 Conditions to Indemnification. The obligations of the
-----------------------------
indemnifying party under Sections 8.1 and 8.2 are conditioned upon the delivery
of written notice to the indemnifying party of any potential Liability promptly
after the indemnified party becomes aware of such potential Liability. The
indemnifying party shall have
-38-
the right to assume the defense of any suit or claim related to the Liability if
it has assumed responsibility for the suit or claim in writing; however, if in
the reasonable judgment of the indemnified party, such suit or claim involves an
issue or matter which could have a materially adverse effect on the business
operations or assets of the indemnified party, the indemnified party may waive
its rights to indemnity under this Agreement and control the defense or
settlement thereof, but in no event shall any such waiver be construed as a
waiver of any indemnification rights such party may have at law or in equity. If
the indemnifying party defends the suit or claim, the indemnified party may
participate in (but not control) the defense thereof at its sole cost and
expense.
8.4 Settlements. Neither party may settle a claim or action related to a
-----------
Liability without the consent of the other party, if such settlement would
impose any monetary obligation on the other party or require the other party to
submit to an injunction or otherwise limit the other party's rights under this
Agreement. Any payment made by a party to settle any such claim or action shall
be at its own cost and expense.
8.5 Limitation of Liability. WITH RESPECT TO ANY CLAIM BY ONE PARTY
-----------------------
AGAINST THE OTHER ARISING OUT OF THE PERFORMANCE OR FAILURE OF PERFORMANCE OF
THE OTHER PARTY UNDER THIS AGREEMENT, THE PARTIES EXPRESSLY AGREE THAT THE
LIABILITY OF SUCH PARTY TO THE OTHER PARTY FOR SUCH BREACH SHALL BE LIMITED
UNDER THIS AGREEMENT OR OTHERWISE AT LAW OR EQUITY TO DIRECT DAMAGES ONLY AND IN
NO EVENT SHALL A PARTY BE LIABLE FOR LOST PROFITS, COVER DAMAGES, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES.
8.6 Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
------------------------
IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY EXPRESS OR IMPLIED WITH
RESPECT TO ANY TECHNOLOGY, PRODUCTS, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT
MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS ALL WARRANTIES INCLUDING, WITHOUT
LIMITATION, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
8.7 Insurance. Each party acknowledges that they each maintain and shall,
---------
during the term of this Agreement, maintain
-39-
adequate insurance and/or a self-insurance program for liability insurance
adequately covering such party's obligations under this Agreement and
specifically, Myriad shall maintain a minimum of product liability insurance of
$10,000,000 per occurrence. Each party shall provide the other party with
evidence of such insurance, upon request.
ARTICLE IX
TERM AND TERMINATION
--------------------
9.1 Term and Expiration. This Agreement shall be effective as of the day
-------------------
first written above and unless terminated earlier pursuant to Sections 9.2
or 9.3 below, the term of this Agreement shall continue in effect until
expiration of the last to expire Patent Right or, if later, ten (10) years after
the first Commercial Sale of a Licensed Product. Upon expiration of this
Agreement due to expiration of the last to expire Patent Right or, if later, ten
(10) years after the First Commercial Sale of a Licensed Product, the licenses
pursuant to Sections 3.1 and 3.3 shall become fully paid-up, irrevocable,
worldwide, perpetual licenses.
9.2 Termination by Schering. Notwithstanding anything contained
-----------------------
herein to the contrary, Schering shall have the right to unilaterally terminate
this Agreement after the third (3rd) anniversary thereof, with or without cause,
at any time by giving ninety (90) days advance written notice to Myriad.
9.3 Termination for Cause. This Agreement may be terminated by notice by
---------------------
either party at any time during the term of this Agreement:
(a) with respect to obligations other than payment obligations, if the
other party is in breach of its material obligations hereunder and has not cured
or taken steps to substantially cure such breach within ninety (90) days after
notice of the breach with reasonable detail of the particulars of the alleged
breach and with respect to payment obligations due and owing, if Schering has
not cured or taken steps to substantially cure such breach (such as the mailing
of the check therefore) within fifteen (15) days after notice of the particulars
of the alleged breach; or
(b) upon the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an assignment of a substantial
portion of the assets for the benefit of creditors by the other party, or in the
event a receiver or custodian is appointed for such party's business or in a
substantial portion of such
-40-
party's business is subject to attachment or similar
process; provided, however, in the case of any involuntary bankruptcy proceeding
-------- -------
such right to terminate shall only become effective if the party consents to the
involuntary bankruptcy or such proceeding is not dismissed within sixty (60)
days after the filing thereof.
9.4 Effect of Termination on License.
--------------------------------
(a) In the event Schering unilaterally terminates this Agreement under
Section 9.2 or in the event Myriad terminates this Agreement because of material
breach by Schering, the licenses for commercial purposes granted to Schering
under Sections 3.1 and 3.3 shall terminate (and, in effect, automatically revert
back to Myriad) and Schering shall have a non-exclusive fully paid-up,
perpetual, irrevocable, worldwide license to use the Research Inventions, Myriad
Know-How arising from the Research Program and Patent Rights for research and
development purposes only; provided, however, Schering shall have no license to
-------- -------
use any Myriad patents or patent applications that were filed prior to the
commencement of the Research Program. Notwithstanding anything contained herein
to the contrary, in the event a Licensed Product arises therefrom, the milestone
and royalty obligations continue and remain in full force and effect.
(b) In the event Schering terminates this Agreement because of
material breach by Myriad (whether before or after the Research Terms), Schering
shall have the option to either (i) continue the exclusive license and in such
case the milestone and royalty obligations shall continue in full force and
effect; or (ii) convert its exclusive license to a non-exclusive license and in
such case shall have a paid-up license for research and development purposes as
set forth in (a) above, and for commercial purposes, such license shall be
royalty-bearing but at a royalty rate reduced by fifty (50%) of the applicable
royalty rate for a Licensed Product.
(c) In the event Schering terminates this Agreement because of
material breach by Myriad, the commercial license granted to Myriad under
Section 3.1(b) shall terminate and Myriad shall have a non-exclusive, fully
paid-up, perpetual, irrevocable, worldwide license to the Research Inventions
and Patent Rights for research and development purposes for veterinary and
Diagnostic products only; provided, however, Schering shall have no license to
-------- -------
use any Myriad patents or patent applications that were filed prior to the
commencement of the Research Program.
-41-
(d) In the event Schering terminates this Agreement under Section
9.3(b) or this Agreement is otherwise terminated under Section 9.3(b), all
rights and licenses granted under or pursuant to this Agreement by Myriad to
Schering are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as
defined under Section 101(52) of the Bankruptcy Code. The parties agree that
Schering, as a licensee of such rights under this Agreement, shall retain and
may fully exercise all of its rights and elections under the Bankruptcy Code.
The parties further agree that, in the event of the commencement of a bankruptcy
proceeding by or against Myriad under the Bankruptcy Code, Schering shall be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property and all embodiments of such intellectual property
upon written request therefor by Schering. Such intellectual property and all
embodiments thereof shall be promptly delivered to Schering (i) upon any such
commencement of a bankruptcy proceeding upon written request therefore by
Schering, unless Myriad elects to continue to perform all of its obligations
under this Agreement or (ii) if not delivered under (i) above, upon the
rejection of this Agreement by or on behalf of Myriad upon written request
therefor by Schering. Myriad shall not interfere with the rights of Schering as
provided in this Agreement, or any agreement supplementary hereto, to such
intellectual property (including all such embodiments thereof), including any
right of Schering to obtain such intellectual property (or such embodiment) from
any other entity.
9.5 Effect of Termination. Except as otherwise set forth above in
---------------------
Section 9.4 above and as set forth below, in the event of termination, the
rights and obligations of both parties, including any payment obligations not
due and owing as of the termination date, shall terminate. Expiration or
termination of the Agreement shall not relieve the parties of any obligation
accruing prior to such expiration or termination, and the provisions of Article
VI and VIII shall survive the expiration of the Agreement. Any expiration or
early termination of this Agreement shall be without prejudice to the rights of
either party against the other accrued or accruing under this Agreement prior to
termination, including the obligation to pay royalties for Licensed Product(s)
sold prior to such termination.
ARTICLE X
MISCELLANEOUS
-------------
10.1 Assignment. Neither this Agreement nor any or all of the rights
----------
and obligations of a party hereunder shall be assigned, delegated, sold,
transferred,
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sublicensed (except as otherwise provided herein) or otherwise disposed of, by
operation of law or otherwise, to any third party other than an Affiliate of
such party, without the prior written consent of the other party, and any
attempted assignment, delegation, sale, transfer, sublicense or other
disposition, by operation of law or otherwise, of this Agreement or of any
rights or obligations hereunder contrary to this Section 10.1 shall be a
material breach of this Agreement by the attempting party, and shall be void and
without force or effect; provided, however, Schering or Myriad may, without such
-------- -------
consent, assign the Agreement and its rights and obligations hereunder to an
Affiliate or in connection with the transfer or sale of all or substantially all
of its assets related to the division or the subject business, or in the event
of its merger or consolidation or change in control or similar transaction;
provided, however, Myriad may only make such assignment without Schering's
-------- -------
written consent in connection with any of the above referenced sale of assets,
merger or similar transaction if such transaction is with a company or
organization primarily engaged in research and development of products and
services utilizing recombinant, genomic, genetic engineering or other similar
technologies used in the biotechnology industry. This Agreement shall be
binding upon and inure to the benefit of each party, its Affiliates, and its
permitted successors and assigns. Each party shall be responsible for the
compliance by its Affiliates with the terms and conditions of this Agreement.
10.2 Governing Law. Except for disputes between the parties hereto
-------------
under Article V which will be governed by Federal law and brought in the Federal
District Court of New Jersey, this Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to the
conflict of laws provisions thereof.
10.3 Arbitration.
-----------
(a) The parties recognize that a bona fide dispute as to certain
matters may from time to time arise during the term of the Agreement. In the
event of the occurrence of any dispute, controversy or claim arising out of or
relating to the validity, construction, enforceability or performance of the
Agreement including disputes relating to an alleged breach or termination of the
Agreement it shall be settled by binding Alternative Dispute Resolution ("ADR")
in the manner set forth below; provided, however, that the neutral referred to
-------- -------
below shall give effect to the provisions of the Agreement and shall not adjust,
modify or change the effects of termination as set forth in the Agreement.
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(b) If a party intends to begin an ADR to resolve a dispute, such
party shall provide written notice (the "ADR Request") by certified or
registered mail or properly documented overnight delivery to the other party
informing such other party of such intention and the issues to be resolved. The
notice shall explain the nature of the complaint and refer to the relevant
sections of the Agreement upon which the complaint is based. The complaining
party shall also set forth a proposed solution to the problem, including a
suggested time frame within which the parties must act.
(c) The non-complaining party must respond in writing within forty-
five (45) days of receiving notice with an explanation, including references to
the relevant provisions of the Agreement and a response to the proposed solution
and suggested time frame for action. The non-complaining party may add
additional issues to be resolved.
(d) Within fifteen (15) days of receipt of the response from the non-
complaining party, the parties shall meet and discuss options for resolving the
dispute. The complaining party must initiate the scheduling of this resolution
meeting. Each party shall make available appropriate personnel to meet and
confer with the other party within the fifteen (15) day period following the
complaining party's receipt of the response by the non-complaining party.
(e) Any and all disputes that cannot be resolved pursuant to
Paragraphs (b), (c) and (d) shall be submitted to a neutral who shall be
selected by mutual agreement of the parties. If the parties are unable to agree
upon a neutral, then the neutral shall be selected in accordance with the
procedures of the American Arbitration Association. The neutral shall be an
individual who shall preside over and resolve any disputes between the parties.
The neutral selected shall be a former judge of a state or federal court and
shall not be a current or former employee, director or shareholder of, or
otherwise have any current or previous relationship with, either party or its
respective affiliates. The ADR shall be conducted in accordance with the rules
of the American Arbitration Association then in effect, subject to the time
periods and other provisions of this Exhibit or as otherwise set forth in the
Agreement.
(f) Consistent with the time schedule established pursuant to
Paragraphs (g) and (h) the neutral shall hold a hearing to resolve each of the
issues identified by the parties and shall render the award as expeditiously as
possible but in no event
-44-
more than thirty (30) days after the close of hearings. In making the award the
neutral shall rule on each disputed issue and shall be based on in whole or in
part the proposed ruling of one of the parties on each disputed issue.
(g) During the meeting referred to in Paragraph (d), the parties shall
negotiate in good faith the scope and schedule of discovery, relating to
depositions, document production and other discovery devices, taking into
account the nature of the dispute submitted for resolution. If the parties are
unable to reach agreement as to the scope and schedule of discovery, the neutral
may order such discovery as he deems necessary. To the extent practicable
taking into account the nature of the dispute submitted for resolution, such
discovery shall be completed within sixty (60) days from the date of the
selection of the neutral. At the hearing, which shall commence within twenty
(20) days after completion of discovery unless the neutral otherwise orders, the
parties may present testimony (either live witness or deposition), subject to
cross-examination, and documentary evidence. To the extent practicable taking
into account the nature of the dispute submitted for resolution and the
availability of the neutral, the hearing shall be conducted over a period not to
exceed thirty (30) consecutive business days, with each party entitled to
approximately half of the allotted time unless otherwise ordered by the neutral.
In the event that Schering files the ADR Request pursuant to Paragraph (a)
hereof, then the hearing shall be conducted in Salt Lake City, Utah. In the
event that Myriad files the ADR Request pursuant to Paragraph (a) hereof, then
the hearing shall be conducted in Newark, New Jersey. Each party shall have
sole discretion with regard to the admissibility of any evidence and all other
matters relating to the conduct of the hearing. The neutral shall, in rendering
its decision, apply the substantive law of New York. The decision of the
neutral shall be final and not appealable, except in the case of fraud or bad
faith on the part of the neutral or any party to the ADR proceeding in
connection with the conduct of such proceedings.
(h) At least twenty (20) business days prior to the date set for the
hearing, each party shall submit to each other party and the neutral a list of
all documents on which such party intends to rely in any oral or written
presentation to the neutral and a list of all witnesses, if any, such party
intends to call at such hearing and a brief summary of each witness' testimony.
At least five (5) business days prior to the hearing, each party must submit to
the neutral and serve on each other party a proposed findings of fact and
conclusions of law on each issue to be resolved. Following the close of
hearings, the parties shall each submit such post-hearing
-45-
briefs to the neutral addressing the evidence and issues to be resolved as may
be required or permitted by the neutral.
(i) Except as otherwise set forth herein, the neutral shall determine
the proportion in which the parties shall pay the costs and fees of the ADR,
except that each party shall pay its own costs (including, without limitation,
reasonable attorneys fees) and expenses in connection with such ADR; provided,
--------
however, that if the neutral determines that the action of any party was
-------
arbitrary, frivolous or in bad faith, the neutral may award such costs and
expenses to the prevailing party.
(j) The ADR proceeding shall be confidential and, except as required
by law, neither party shall make (or instruct the neutral to make) any public
announcement with respect to the proceedings or decision of the neutral without
the prior written consent of the other party. The existence of any dispute
submitted by ADR, and the award of the neutral, shall be kept in confidence by
the parties and the neutral, except as required in connection with the
enforcement of such award or as otherwise required by applicable law.
(k) For the purposes of these arbitration provisions, the parties
acknowledge their diversity and agree to accept the jurisdiction of the Federal
District Court in Newark, New Jersey or Salt Lake City, Utah (as selected by the
party seeking to enforce) for the purposes of enforcing awards entered pursuant
to these arbitration provisions and for enforcing the agreements reflected in
this Paragraph (k).
(l) Nothing contained herein shall be construed to permit the neutral
or any court or any other forum to award punitive, exemplary or any similar
damages. By entering into the Agreement and exercising their rights to
arbitrate, the parties expressly waive any claim for punitive, exemplary or any
similar damages. The only damages recoverable under this Agreement are
compensatory damages.
(m) The procedures specified herein shall be the sole and exclusive
procedures for the resolution of disputes between the parties which are
expressly identified for resolution in accordance with these arbitration
provisions.
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10.4 Prohibition on Hiring. Neither party nor its Affiliates shall,
---------------------
during the period commencing with the Effective Date and ending three (3) years
after the research term, hire any person employed by the other party or its
Affiliates during such period, whether such person is hired as an employee,
investigator, independent contractor or otherwise, without the express written
consent of the other party.
10.5 Waiver. 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.
10.6 Independent Relationship. Nothing herein contained shall be
------------------------
deemed to create an employment, agency, joint venture or partnership
relationship between the parties hereto or any of their agents or employees, or
any other legal arrangement that would impose liability upon one party for the
act or failure to act of the other party. Neither 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.
10.7 Export Control. This Agreement is made subject to any
--------------
restrictions concerning the export of products or technical information from the
United States of America which may be imposed upon or related to Myriad or
Schering from time to time by the government of the United States of America.
Furthermore, Schering agrees that it will not export, directly or indirectly,
any technical information acquired from Myriad under this Agreement or any
products using such technical information to any country for which the United
States government or any agency thereof at the time of export requires an export
license or other governmental approval, without first obtaining the written
consent to do so from the Department of Commerce or other agency of the United
States government when required by an applicable statute or regulation.
10.8 Entire Agreement; Amendment. This Agreement, including the
---------------------------
Exhibits and Schedules hereto, sets forth the complete, final and exclusive
agreement and all the covenants, promises, agreements, warranties,
representations, conditions and understandings between the parties hereto and
supersedes and terminates all prior agreements, writings and understandings
between the parties.
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There are no covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between the parties other
than as are set forth herein and therein. No terms or provisions of this
Agreement shall be varied or modified and no subsequent alteration, amendment,
change or addition to this Agreement shall be binding upon the parties unless
reduced to writing and signed by an authorized officer of each party.
10.9 Notices. Each notice required or permitted to be given or sent
-------
under this Agreement shall be given by facsimile transmission (with confirmation
copy by registered first-class mail) or by registered or overnight courier
(return receipt requested), to the parties at the addresses and facsimile
numbers indicated below.
If to Myriad, to:
Myriad Genetics, Inc.
000 Xxxxxx Xxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with copies to:
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
If to Schering, to:
Schering-Plough Corporation
0000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
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with copies to:
Schering Corporation
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx,
Executive Vice President and General Counsel
Facsimile No.: (000) 000-0000
Any such notice shall be deemed to have been received on the earlier of the date
actually received or the date five (5) days after the same was posted or sent.
Either party may change its address or its facsimile number by giving the other
party written notice, delivered in accordance with this Section.
10.10 Force Majeure. Failure of any party to perform its obligations
-------------
under this Agreement (except the obligation to make payments when properly due)
shall not subject such party to any liability or place them in breach of any
term or condition of this Agreement to the other party if such failure is caused
by any cause beyond the reasonable control of such non-performing party,
including without limitation acts of God, fire, explosion, flood, drought, war,
riot, sabotage, embargo, strikes or other labor trouble, failure in whole or in
part of suppliers to deliver on schedule materials, equipment or machinery,
interruption of or delay in transportation, a national health emergency or
compliance with any order or regulation of any government entity acting with
color of right; provided however, that the party affected shall promptly notify
-------- -------
the other party for the condition constituting force majeure as defined herein
and shall exert reasonable efforts to eliminate, cure and overcome any such
causes and to resume performance of its obligations with all possible speed. If
a condition constituting force majeure as defined herein exists for more than
ninety (90) consecutive days, the parties shall meet to negotiate a mutually
satisfactory solution to the problem, if practicable.
10.11 Severability. If any provision of this Agreement is declared
------------
invalid or unenforceable by a court having competent jurisdiction, it is
mutually agreed that this Agreement shall endure except for the part declared
invalid or unenforceable by order of such court; provided, however, that in the
-------- -------
event that the terms and conditions of this Agreement are materially altered the
parties will, in good faith, renegotiate the terms and conditions of this
Agreement to reasonably substitute such invalid or unenforceable provision in
light of the intent of this Agreement.
-49-
10.12 Recording. Each party shall have the right, at any time, to
---------
record, register, or otherwise notify this Agreement in appropriate governmental
or regulatory offices anywhere in the Territory, and Myriad or Schering, as the
case may be, shall provide reasonable assistance to the other in effecting such
recording, registering or notifying.
10.13 Further Actions. 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.
10.14 Counterparts. This Agreement shall become binding when any one
------------
or more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties hereto. This Agreement may be executed in any
number of counterparts, each of which shall be an original as against either
party whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
MYRIAD GENETICS, INC. SCHERING CORPORATION
By: /s/Xxxxx X. Xxxxxxx By: /s/Xxxxx Xxxxxxx
--------------------- ---------------------
Title: President and CEO Title: Vice President
----------------- -------------------
SCHERING-PLOUGH, LTD.
By: /s/Xxxxx Xxxxxxx
---------------------
Title: Vice President
-------------------
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Exhibit 2.1
-----------
Research Plan: Prostate susceptibility genes
The research agreement will begin with Myriad Genetics continuing its
ongoing aggressive program to identify prostate cancer susceptibility genes by
"*". This is Myriad's area of unique resources and expertise. "*". We anticipate
that "*" will be identified in "*" and "*" in "*", but of course the precise
timing of these events is unknown. Other aspects of the research work will begin
"*". These include: "*".
Specific goals:
"*".
Research Plan: Other cancer genes
"*".
_________________
*Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
-1-
Confidential treatment has also been requested for Pages 2 through 4 of this
Exhibit 2.1 and are omitted and filed separately with the Commission.
Exhibit 3.8
-----------
ADVERSE EVENT REPORTING PROCEDURES FOR LICENSED PRODUCTS
1. An Adverse Event ("AE") is defined as:
a) any experience which is adverse, including what are commonly described
as adverse or undesirable experiences, adverse events, adverse
reactions, side effects, or death due to any cause associated with, or
observed in conjunction with the use of a drug, biological product, or
device in humans, whether or not considered related to the use of that
product:
. occurring in the course of the use of a drug, biological product
or device,
. associated with, or observed in conjunction with product
overdose, whether accidental or intentional,
. associated with, or observed in conjunction with product abuse,
and/or
. associated with, or observed in conjunction with product
withdrawal
b) Any significant failure of expected pharmacological or biologic
therapeutical action (with the exception of in clinical trials).
2. Serious or Non-Serious is defined as:
a) A serious AE is one that is life threatening or fatal, permanently
disabling, requires or prolongs in-patient hospitalization or
prolonged hospitalization, or is a congenital anomaly, cancer or
overdose. In addition, end organ toxicity, including hematological,
renal, hepatic, and central nervous system AEs, may be considered
serious. In laboratory tests in animals, a serious AE includes any
experience suggesting significant risk for human subjects.
b) A Non-serious AE is any AE which does not meet the criteria for a
serious AE.
3. Life-threatening is defined as: the patient is at immediate risk of death
from the AE as it occurs.
4. End-Organ Toxicity is defined as: A medically significant event or lab
value change in which a patient may not necessarily be hospitalized or
disabled, but is clinically significant enough to warrant monitoring (e.g.
seizures, blood dyscrasias).
5. Expected or unexpected is defined as:
a) Expected AE - An AE which is listed in the Investigator's Brochure for
clinical trials, included in local labelling (e.g., Summary of Product
Characteristics) for Marketed Drugs, or in countries with no local
labelling, in the Corporate Standard Prescribing Document.
b) Unexpected AE - An AE that does not meet the criteria for an expected
AE or an AE which is listed but differs from that event in terms of
severity or specificity.
6. Associated with or related to the use of the drug is defined as: A
reasonable possibility exists that the AE was caused by the drug.
7. Un-associated or unrelated to the use of the drug is defined as: A
reasonable possibility exists that the AE may not have been caused by the
drug.
8. NDA Holder is defined as: An "Applicant" as defined in 21 CFR Part
314.3(b), for regulatory approval of a Product in any regulatory
jurisdiction, including a holder of a foreign equivalent thereto.
9. IND Holder is defined as: A "Sponsor" as defined in 21 CFR Part 312.3(b) of
an investigational new drug in any regulatory jurisdiction, including a
holder of a foreign equivalent thereto.
10. Capitalized terms not defined in this Appendix shall have the meaning
assigned thereto in the Agreement.
11. With respect to all Licensed Products, the parties agree as follows:
All initial reports (oral or written) for any and all Serious AEs as
defined above which become known to either Party (other than from
disclosure by or on behalf of the other Party) must be communicated by
telephone, telefax or electronically directly to the other Party and/or the
NDA Holder, IND Holder (individually and collectively referred to as
"Holders") within two days of receipt of the information.
Written confirmation of the Serious AE received by the Party should be sent
to the other Party and/or the Holders as soon as it becomes available, but
in any event within two working days of initial report of the Serious AE by
such Party.
All Parties and Holders should exchange Medwatch and/or CIOMS forms and
other health authority reports within two working days of submission to any
regulatory agency.
All initial reports and follow-up information received for all non-serious
AEs for marketed Products which become known to a Party (other than from
disclosure by or on behalf of the other Party) must be communicated in
writing, by telefax or electronically to the other Party and/or all
Holders on a monthly basis, on Medwatch or CIOMs forms (where possible).
Each Party shall coordinate and cooperate with the other whenever
practicable to prepare a single written report regarding all Serious AEs,
provided, however, that neither Party shall be obligated to delay reporting
of any AE in violation of applicable law or regulations regarding the
reporting of adverse events.
12. The parties further agree that:
a) a written report be forwarded to the other Party within two working
days of receipt by the Party making the report, for Aes for animal
studies which suggest a potential significant risk for humans;
b) each Party will give the other Party a print-out or computer disk of
all Aes reported to it and its Affiliates relating to Products within
the last year, within 30 days of receipt of a request from the other
Party;
c) upon request of a Party, the other Party shall make available its AE
records relating to Products (including computer disks) for viewing
and copying by the other Party.
d) disclosure of information hereunder by a Party to the other Party
shall continue as long as either Party and/or its Affiliates continue
to clinically test or market product(s) containing Products.
e) all written regulatory reports, including periodic NDA, annual IND,
safety updates, or foreign equivalents thereto, etc. should be sent by
a Party to the other Party within 2 working days of submission to the
appropriate regulatory agency. The Parties shall agree on a procedure
for preparing these reports.
13. Each Party shall diligently undertake the following further obligations
where both parties are or will be commercializing products hereunder and/or
performing clinical trials with respect to product:
a) to immediately consult with the other Party, with respect to the
investigation and handling of any Serious AE disclosed to it by the
other Party or by a third Party and to allow the other Party to review
the Serious AE and to participate in the follow-up investigation;
b) to immediately advise the other Party of any Product safety
communication received from a health authority and consult with the
other Party with respect to any product warning, labelling change or
change to an investigators' brochure involving safety issues proposed
by the other Party, including, but not limited to the safety issues
agreed to by the Parties;
c) to diligently handle in a timely manner the follow-up investigation
and resolution of each AE reported to it;
d) to provide the other Party mutually agreed upon audit rights of its AE
reporting system and documentation, upon prior notice, during normal
business hours, at the expense of the auditing Party and under
customary confidentiality obligations;
e) to meet in a timely fashion from time to time as may be reasonably
required to implement the adverse event reporting and consultation
procedures described in this Appendix, including identification of
those individuals in each Party's Drug Safety group who will be
responsible for reporting to and receiving AE information from the
other Party, and the development of a written standard operating
procedure with respect to adverse event reporting responsibilities,
including reporting responsibilities to investigators;
f) where possible, to transmit all data electronically;
g) to report to each other any addenda, revisions or changes to this
Agreement (e.g., change in territories, local regulations, addition of
new licensors/licensees to the agreement, etc.) which might alter the
adverse event reporting responsibilities hereunder;
h) to utilize English as the language of communication and data
exchange between the Parties;
i) to develop a system of exchange of documents and information in the
event that the Agreement involves more than two Parties.
EXHIBIT 4.2
Stock Purchase Agreement
[SEE EXHIBIT 10.38 FILED HEREWITH]
