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EXHIBIT 10.2
Portions of this Exhibit have been redacted and are the subject of a
confidential treatment request filed with the Secretary of the Securities and
Exchange Commission.
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DEVELOPMENT COLLABORATION AND LICENSING AGREEMENT
BETWEEN
OSI PHARMACEUTICALS, INC.
AND
X.XXXXXXXX-XX XXXXX LTD
JANUARY 8, 2001
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DEVELOPMENT COLLABORATION AND LICENSING AGREEMENT
This Development Collaboration And Licensing Agreement ("Agreement")
dated as of January 8, 2001 by and between OSI Pharmaceuticals, Inc., a Delaware
corporation, with its principal office at 000 Xxxxxxx Xxxxxxxxx Xxxx.,
Xxxxxxxxx, Xxx Xxxx 00000-0000 (together with its Affiliates (as hereinafter
defined) unless the context otherwise requires, "OSI") and X.Xxxxxxxx-Xx Xxxxx
Ltd, a Swiss corporation, with its principal office at Xxxxxxxxxx xxxxxxx 000,
XX-0000-Xxxxx Xxxxxxxxxxx (together with its Affiliates (as hereafter defined)
unless the context otherwise requires, "Roche"). OSI and Roche are sometimes
referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
1. OSI has participated in the development of a certain molecule known
as OSI-774 (defined below) and has certain intellectual property rights related
thereto.
2. Roche and OSI each wish to conduct development of OSI-774 in a
collaborative fashion so that the resources and expertise of each is put to good
use, and under such collaborative efforts each Party is willing to expend up to
$100 million as may be agreed upon by the Parties.
3. By combining the development experience and expertise of both Roche
and OSI, the Parties wish to expedite the regulatory approval of OSI-774 as a
significant new therapeutic.
4. OSI wishes to grant to Roche, and Roche wishes to obtain, a license
under OSI's intellectual property rights with respect to OSI-774 to permit Roche
to participate in collaborative OSI-774 product development, and to be able to
market in all of the world outside of the United States and its territories
under the terms and conditions set forth below.
5. Simultaneous with the Effective Date hereof, Roche will purchase
shares of common stock of OSI for a purchase price of $35 million according to
the terms and conditions of a Stock Purchase Agreement (the "Stock Purchase
Agreement") of even date herewith.
6. Pursuant to a Tripartite Agreement of even date herewith (the
"Tripartite Agreement"), the Parties have made certain agreements with
Genentech, Inc., a Delaware corporation with its principal office at 0 XXX Xxx,
Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 ("Genentech") regarding, among other
things, development of OSI-774.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties, intending to be legally bound hereby, do hereby agree as follows:
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ARTICLE 1.
DEFINITIONS
The following capitalized terms, whether used in the singular or the
plural, shall have the following meanings as used in this Agreement unless
otherwise specifically indicated:
1.1 "ADJUVANT ONCOLOGY INDICATION" shall mean use of Licensed Product
as a systemic therapy administered after local therapy or treatment of a primary
tumor (e.g. by surgery, or surgery and radiotherapy) to reduce the risk of
recurrence or progression.
1.2 "AFFILIATE" shall mean any corporation, firm, limited liability
company, partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement. For the
purposes of this Section 1.2, "control" means ownership, directly or through one
or more Affiliates, of fifty percent (50%) or more or the shares of stock
entitled to vote for the election of directors, in the case of a corporation, or
fifty percent (50%) or more of the equity interests in the case of any other
type of legal entity, status as a general partner in any partnership, or any
other arrangement whereby a party controls or has the right to control the Board
of Directors or equivalent governing body of a corporation or entity. For the
purposes of this Agreement, Genentech shall be deemed to not be an Affiliate of
Roche.
1.3 "cGMP" shall mean the regulatory requirements for current good
manufacturing practices promulgated (1) under the Common Technical Document for
the Registration of Pharmaceuticals for Human Use (ICH CTD) Guidelines and the
ICH Good Manufacturing Practice Guide (ICH-GMP.doc), as the same may be amended
from time to time, and (2) by the United States Food and Drug Administration
("FDA") under the U.S. Food, Drug and Cosmetic Act ("FD&C Act") and the
regulations promulgated thereunder, particularly 21 C.F.R. Section 210 et seq.
and 21 C.F.R. Sections 600-610, respectively, as the same may be amended
from time to time.
1.4 "CLINICAL SUPPLIES" shall mean supplies of Licensed Product,
manufactured, packaged and labeled in compliance with cGMP, in such form and
strength as agreed by the Parties, and ready to be used for the conduct of
pre-clinical and/or human clinical trials of the Licensed Product in the Field
by the Parties pursuant to the Global Development Plan.
1.5 "CLOSING" shall mean, subject to the satisfaction or waiver of the
conditions set forth in Section 6.2, the closing of the transactions
contemplated by this Agreement.
1.6 "CLOSING DATE" shall mean the earlier of: (i) the fifth (5th) day,
unless the fifth (5th) day falls on a weekend or holiday, in which case it shall
be the next business day, after the earlier of (a) receipt of written notice (a
copy of which has been furnished to Genentech) of the U.S. Federal Trade
Commission's (the "FTC") approval of the transaction contemplated by this
Agreement under the Xxxx-Xxxxx-Xxxxxx filings to be made by OSI and Genentech
(or the parent company of each Party) and (b) the expiration or termination of
all applicable waiting periods, requests for information (and any extensions
thereof) under the Xxxx-Xxxxx Xxxxxx Antitrust Improvements Act of 1976 for such
Xxxx-Xxxxx Xxxxxx filings and (ii) the fifth (5th) day, unless the fifth (5th)
day falls on a weekend or holiday, in which case it shall be the next business
day, after the joint determination (by certification from each Party to the
other) that such Xxxx Xxxxx
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Xxxxxx filing is not required. In the case of Genentech, such certification, if
made, shall be made by its parent company, Roche, which is responsible for such
filing with respect to Genentech.
1.7 "COMMERCIALLY REASONABLE AND DILIGENT EFFORTS" shall mean with
respect to development and commercialization, a Party's use of best efforts and
resources consistent with the exercise of prudent scientific and business
judgment, as applied to other pharmaceutical products of similar potential and
market size by the Party in question, and reflecting the competitive environment
for the development and marketing of OSI-774.
1.8 "CONTROLLED" with respect to Licensed Product Patents or Know-how
shall mean the ability of a Party to grant a license or sublicense to such
Licensed Product Patents or Know-how as provided for herein without violating
the terms of any agreement or other arrangement with any Third Party existing
and in effect at the time such Party would be required hereunder to grant the
other Party such license or sublicense.
1.9 "COVER" (including variations such as "Covered", "Covering" and the
like) shall mean that the manufacture, use, sale, offer for sale, or importation
of a particular product would infringe a claim of a patent or patent application
(if that claim were to issue in a patent) in the absence of rights under such
patent, as determined on a country-by-country basis.
1.10 "DIVESTITURE AGREEMENT" shall mean that agreement, related to the
Base Patents and dated May 23, 2000 between OSI and Pfizer Inc., a Delaware
Corporation having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
1.11 "DRUG APPROVAL APPLICATION" shall mean an application for
Regulatory Approval required for commercial sale or use of a Licensed Product as
a drug in the Field in the Territory.
1.12 "EFFECTIVE DATE" shall mean the Closing Date.
1.13 "FIELD" shall mean the treatment or prophylaxis of any human
disease or condition.
1.14 "FIRST COMMERCIAL SALE" shall mean the first sale, in any
particular country, by Roche or its Affiliates or sublicensees of Licensed
Product for use by the general public after all required marketing and pricing
approval has been granted by the governing authorities of that country or, if no
such approval is required, the date of first commercial sale of Licensed Product
in such country.
1.15 "GLOBAL DEVELOPMENT COSTS" shall have the meaning set forth in
Exhibit A to the Tripartite Agreement.
1.16 "GLOBAL DEVELOPMENT PLAN" shall mean the plan for development of
OSI-774 which is attached as Exhibit A to the Tripartite Agreement as such plan
may be amended from time to time.
1.17 "IND" shall mean an effective Notice of a Claimed Investigational
New Drug Exemption, as defined in Title 21 of the U.S. Code of Federal
Regulations, on file with the FDA before the commencement of clinical trials of
Licensed Products in humans, or any comparable
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filing with any relevant regulatory agencies or other governmental entities in
any country in the Territory.
1.18 "INVENTION" shall mean any invention (whether or not patentable)
or Know-how made after the Effective Date during the course of, in furtherance
of, and as a direct result of the activities of the Parties hereunder and under
the Tripartite Agreement, and which relates to any Licensed Product, its
manufacture or its use in the Field in the Territory. An "Invention" may be made
by employees of OSI solely or jointly with a Third Party, including Genentech
(an "OSI Invention"), by employees of Roche solely or jointly with a Third
Party, including Genentech (a "Roche Invention"), or jointly by employees of OSI
and Roche with or without a Third Party (a "Joint Invention").
1.19 "JOINT PATENTS" shall mean any and all Licensed Product Patents
claiming a Joint Invention.
1.20 "KNOW-HOW" shall mean all proprietary information, trade secrets,
techniques and data of a Party (including Confidential Information as defined in
Article 10 below), directly relating to the Licensed Products that are
Controlled by such Party as of the Effective Date or hereafter during the Term
of this Agreement, including, but not limited to, discoveries, formulae,
materials, practices, methods, knowledge, know-how, processes, experience, test
data (including pharmacological, toxicological and clinical information and test
data), analytical and quality control data, marketing, pricing, distribution,
cost and sales data or descriptions. "Know-how" may be made, prior to the
Effective Date or may be an Invention.
1.21 "LICENSED PRODUCT" shall mean pharmaceutical formulations of
OSI-774 (including, without limitation, prodrugs, salts, solvates and polymorphs
of all the above in any form or formulation).
1.22 "LICENSED PRODUCT PATENTS" shall mean any and all patents, patent
applications and any patents issuing therefrom, together with any extensions
(including supplementary protection certificates), registrations, reissues,
continuations, divisions, continuations-in-part, re-examinations, substitutions
or renewals thereof, that contain one or more claims Covering a Licensed Product
in the Field in the Territory.
1.23 "METASTATIC ONCOLOGY INDICATION" shall mean the use of Licensed
Product as a therapy for the spread of a malignancy from its site of origin to
non-contiguous sites, most commonly to other organs; treatment will also involve
the primary tumor, if present.
1.24 "NET SALES" and the related term "ADJUSTED GROSS SALES" mean:
(a) "Adjusted Gross Sales"means the amount of gross invoiced sales of
any Licensed Product (only in finished product form) charged by Roche, its
Affiliates and sublicensees, at arm's length to independent Third Parties, less
deductions of returns (including allowances actually given for spoiled, damaged,
out-dated, rejected, returned Product sold, withdrawals and recalls), rebates
(price reductions, rebates to social and welfare systems, chargebacks,
government mandated rebates and similar types of rebates e.g., P.P.R.S.,
Medicaid), volume (quantity) discounts, taxes (value added or sales taxes,
government mandated exceptional taxes and other taxes directly linked to the
gross sales amount), as computed on a product by product basis in the Roche's
Swiss Francs Sales Statistics for the countries concerned, using for internal
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foreign currency translation the Roche's then current standard practices
actually used on a consistent basis in preparing its audited financial
statements.
(b) "Net Sales" means the amount calculated by subtracting from the
amount of Adjusted Gross Sales a lump sum deduction of ** of Adjusted Gross
Sales in lieu of those sales related deductions which are not accounted for on a
product by product basis (e.g. outward freights, postage charges, transportation
insurance, packaging materials for dispatch of goods, custom duties, bad debt,
discounts granted later than at the time of invoicing, cash discounts and other
direct sales expenses).
Notwithstanding the foregoing, amounts received by Roche, its Affiliates and
sublicensees for the sale of any Licensed Product among Roche, its Affiliates
and sublicensees for resale shall not be included in the computation of Adjusted
Gross Sales and Net Sales.
1.25 "OSI KNOW-HOW" shall mean Know-how which: (a) is Controlled by OSI
as of the Effective Date or hereafter during the Term of this Agreement, and (b)
is necessary or useful for Roche to use, sell, offer for sale and/or import
Licensed Products.
1.26 "OSI-774"shall mean the selective inhibitor of epidermal growth
factor receptor having the IUPAC name
[6,7-bis(2-methoxyethoxy)quinazolin-4-yl]-(3-ethynylphenyl)-amine and having the
U.S. Approved Name erlotinib.
1.27 "OSI PATENTS" shall mean any and all Licensed Product Patents to
the extent Controlled by OSI as of the Effective Date or hereafter during the
Term of this Agreement, including, without limitation, OSI's interest in any
Joint Patent. The OSI Patents as of the Effective Date are set forth on Exhibit
A attached hereto and incorporated herein ("Base Patents").
1.28 "OSI/ROCHE DEVELOPMENT COSTS" shall have the meaning defined in
Exhibit C.
1.29 "PARTY" shall mean Roche or OSI, and, when used in the plural,
shall mean both of them.
1.30 "PHASE II CLINICAL TRIAL" shall mean studies in humans of the
safety, dose ranging and efficacy of a Licensed Product which are conducted
after Phase I clinical studies of such Licensed Product.
1.31 "PHASE III ENABLING CLINICAL TRIAL" shall mean a Phase I or Phase
II Clinical Trial which has generated sufficient data to commence Phase III
Clinical Trials.
1.32 "REFRACTORY ONCOLOGY INDICATION" shall mean the use of Licensed
Product as a therapy for the progression of a malignancy after therapy or
treatment that is accepted, under generally accepted good medical practices, to
have some degree of effectiveness has failed; or as a therapy for a malignancy
for which there is no generally accepted effective medical therapy.
1.33 "REGULATORY APPROVAL" shall mean any approvals (including pricing
and reimbursement approvals), licenses, registrations or authorizations of any
national or international or local regulatory agency, department, bureau or
other governmental entity,
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** This portion has been redacted pursuant to a confidential treatment request.
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necessary for the manufacture and sale of a Licensed Product in a regulatory
jurisdiction in the Territory.
1.34 "ROCHE KNOW-HOW" shall mean Know-how which: (a) is Controlled by
Roche as of the Effective Date or hereafter during the Term of this Agreement,
and (b) is necessary or useful for OSI to (i) use, make, have made, sell, offer
for sale and/or import Licensed Products, or (ii) use Licensed Products in the
Field in the Territory in accordance with Section 8.3.
1.35 "ROCHE PATENTS" shall mean any and all Licensed Product Patents to
the extent Controlled by Roche as of the Effective Date or hereafter during the
Term of this Agreement, including, without limitation, Roche's interest in any
Joint Patents.
1.36 "ROCHE PROJECT TEAM" shall mean that body established pursuant to
Section 3.1 below.
1.37 "TERRITORY" shall mean the World other than the United States of
America, its territories and possessions, and the Commonwealth of Puerto Rico.
1.38 "THIRD PARTY" shall mean any entity other than OSI or Roche or
their permitted sublicensees, and shall include Genentech.
1.39 "TRIPARTITE AGREEMENT" shall have the meaning provided in the
recitals.
1.40 "VALID CLAIM" shall mean a claim of the OSI Patents which has not
been withdrawn, cancelled, disclaimed, abandoned, or held invalid, unpatentable
or unenforceable by a tribunal of competent jurisdiction in a final decision (i)
which is unappealable or (ii) from which all appeals have been exhausted. If a
Valid Claim is the subject of a final decision holding it not invalid,
unpatentable or unenforceable, the scope of the Valid Claim shall be interpreted
so as to reflect the construction placed upon it in the final decision.
ARTICLE 2.
SCOPE OF THE COLLABORATION
2.1 GLOBAL GOALS. The Parties agree, pursuant and subject to the terms
of this Agreement and the Tripartite Agreement, to further develop Licensed
Products, with the goal of obtaining Regulatory Approval of Licensed Products in
commercially significant indications as soon as reasonably practicable for
commercial marketing and sale in the Field in the Territory, Roche shall use
Commercially Reasonable and Diligent Efforts (as defined in Section 4.1 below)
to perform its tasks and obligations in conducting all development work pursuant
to the Global Development Plan, and each Party shall cooperate with and provide
reasonable support to the other Party in such other Party's conduct of such
development as provided in the Global Development Plan.
2.2 PARTICIPATION IN GLOBAL DEVELOPMENT. Each Party acknowledges that
simultaneously with this Agreement, OSI will be entering into an agreement with
Genentech regarding, among other things, development of OSI-774 outside the
Territory. The Parties hereto, simultaneously with this Agreement, will enter
into the Tripartite Agreement with Genentech governing development activities
and cost sharing.
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2.3 GLOBAL DEVELOPMENT PLAN. The Parties have attached as Exhibit B
hereto the Global Development Plan.
ARTICLE 3.
MANAGEMENT OF THE COLLABORATION
3.1 ESTABLISHMENT OF ROCHE PROJECT TEAM. No later than thirty (30) days
after the Effective Date, Roche will establish a Roche Project Team to
coordinate all activities for the development of Licensed Products in the Field
in the Territory, including pre-clinical research, clinical research,
manufacturing, regulatory filings, and post-approval development studies. OSI
will have the right to appoint an observer (the "OSI Observer") to the Roche
Project Team. The Roche Project Team will meet at least once each calendar
quarter, or more frequently, as agreed by the Roche Project Team. Notice of any
such meeting shall be given to the OSI Observer no later than ten (10) days
before any such meeting.
3.2 CEASING OF ROCHE PROJECT TEAM OPERATIONS. The Roche Project Team
will cease operations and have no further function hereunder on the date on
which Roche is no longer developing any Licensed Product in the Territory.
3.3 GLOBAL DEVELOPMENT COMMITTEE. Pursuant to the terms of the
Tripartite Agreement, the Parties have established with Genentech a Global
Development Committee to, among other things, direct development of OSI-774. In
addition, the Parties and Genentech have established an OSI-774 Liaison Team to
coordinate the development activities of the OSI-Genentech Project Team and the
Roche Project Team as more fully described in the Tripartite Agreement.
ARTICLE 4.
DEVELOPMENT
4.1 DEVELOPMENT AND MARKETING AND EFFORTS. OSI and Roche each agree to
(1) collaborate diligently in the development of Licensed Products for use in
the Field, (2) cooperate with each other in carrying out the Tripartite
Agreement, (3) use Commercially Reasonable and Diligent Efforts to develop and
bring Licensed Products to market in the Field as soon as practicable.
Furthermore, Roche agrees to use Commercially Reasonable and Diligent Efforts to
market Licensed Products in the Territory. Each Party further agrees to execute
and substantially perform its activities under the Global Development Plan.
4.2 TRANSFER OF MATERIALS. During the development of OSI-774, each
Party may transfer certain of its proprietary materials to the other Party. Each
Party agrees that it will use such materials of the other Party only for the
purposes of this Agreement, the Tripartite Agreement or the OSI-Genentech
Agreement, and will not transfer such materials to any Third Party other than
Genentech without the prior written consent of the other Party hereunder. Except
as expressly provided in this Agreement, the Tripartite Agreement or the
OSI-Genentech Agreement, the transfer of any such proprietary materials by one
Party to another shall not be deemed to be a grant of any rights in the
proprietary material. All right, title and interest in and to all such
proprietary materials (and any patent rights relating thereto) shall remain in
the Party transferring such materials.
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4.3 DEVELOPMENT COSTS FOR OSI AND ROCHE. All OSI/Roche Development
Costs, shall be shared between Roche and OSI so that Roche bears ** of such
costs and OSI bears ** of such costs. There shall be a reconciliation of such
OSI/Roche Development Costs which are to be shared hereunder and which are
incurred by a Party, with a prompt payment by one Party to the other to the
extent necessary so that each Party bears its appropriate percentage of such
shared OSI/Roche Development Costs, all as more fully set forth in Exhibit C.
ARTICLE 5.
TRADEMARK AND PACKAGING IN THE TERRITORY
5.1 TRADEMARKS. It is the intent of the Parties that a single product
trademark shall be developed for use on and in connection with Licensed Products
worldwide (the "Product Trademark"). The Parties have agreed to use the
trademark ** as such Product Trademark. If it is determined that it is not
possible to register or otherwise use the Product Trademark in any country
within the Territory, then the Parties shall agree on an appropriate trademark
to use in each such country, provided that the trademark used in the Major
European Countries (as defined hereafter) and Japan is intended to be the same
as whatever trademark is used in the U.S. In addition, registration use problems
with respect to the Product Trademark in the Global Development Countries (as
defined in the Tripartite Agreement) will be discussed by the OSI/Genentech
project team and the Roche Project Team. Any decisions or disagreements
concerning the desire for a global trademark will be approved or resolved by the
Parties and Genentech. OSI shall own the Product Trademark, and shall be
responsible for procurement and maintenance of a trademark registration for such
trademark in connection with Licensed Products in the Territory. If OSI elects
not to procure or maintain a trademark registration for such trademark in
connection with Licensed Product in a country of the Territory, it shall so
inform Roche in writing in a reasonable time before any action is due thereon.
Roche shall then have the right but not the obligation to procure and maintain
such trademark in such country. The cost of prosecution for trademarks in the
Territory shall be shared equally between the Parties.
5.2 PACKAGING. Roche agrees that OSI shall be identified as licensor on
the packaging of all Licensed Products sold by Roche or its sublicensees,
subject to legal and commercial requirements on a country-by-country basis and
in a manner in accordance with such legal and commercial requirements. Such
marking shall further conform to the laws and practices of the jurisdiction, in
which the Products are manufactured, sold and/or delivered. **
ARTICLE 6.
CLOSING/ROCHE PAYMENTS
6.1 COVENANTS PENDING CLOSING.
(a) REASONABLE EFFORTS. Subject to the terms and conditions of this
Agreement, each of the Parties agrees to use all reasonable efforts to take, or
cause to be taken, all reasonable actions and to do, or cause to be done, all
things necessary and appropriate to satisfy all
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conditions of and to consummate the transactions contemplated by this Agreement
in accordance with the terms hereof.
(b) FILINGS. The Parties shall cooperate with one another in the
preparation, execution and filing of all documents that are required or
permitted to be filed on or before the Closing, including, without limitation,
filings pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000
(xxx "XXX Xxx").
6.2 CONDITIONS TO CLOSING.
(a) The obligation of OSI to close shall be subject to the satisfaction
on or before the Closing of the following conditions, any or all of which may be
waived in whole or in part by OSI:
(i) the approval of the transaction by the FTC under the HSR Act
or the expiration or termination of all applicable waiting periods, requests for
information (and any extensions thereof) under the HSR Act, unless a joint
determination is made by the Parties (by certification from each Party to the
other) that such approval is not required;
(ii) the representations and warranties made by Roche in Article
12 shall be true and correct in all material respects as of the Closing Date
with the same force and effect as if they had been made as of the Closing Date,
and Roche shall have performed all obligations and conditions herein required to
be performed or observed by it on or prior to Closing;
(iii) payments of $25 million in the aggregate, to OSI under this
Agreement and the Development and Marketing Collaboration Agreement between OSI
and Genentech (the "OSI-Genentech Agreement") by Roche and Genentech,
respectively;
(iv) payments of $70 million, in the aggregate, to OSI under the
Stock Purchase Agreement and the Stock Purchase Agreement between OSI and
Genentech by Roche and Genentech, respectively;
(v) the execution and delivery of the Tripartite Agreement and the
OSI-Genentech Agreement; and
(vi) closing shall have occurred (or shall occur simultaneously
with the Closing hereunder) under the OSI-Genentech Agreement.
(b) The obligation of Roche to close shall be subject to the
satisfaction on or before the Closing of the following conditions any or all of
which may be waived in whole or in part by Roche:
(i) the approval of the transaction by the FTC under the HSR Act
or the expiration or termination of all applicable waiting periods, requests for
information (and any extensions thereof) under the HSR Act, unless a joint
determination is made by the Parties (by certification from each Party to the
other) that such approval is not required;
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(ii) the representations and warranties made by OSI in Article 12
shall be true and correct in all material respects as of the Closing Date with
the same force and effect as if they had been made as of the Closing Date, and
OSI shall have performed all obligations and conditions herein required to be
performed or observed by them on or prior to Closing;
(iii) delivery to Roche of the OSI common stock under the Stock
Purchase Agreement; and
(iv) the execution and delivery of the Tripartite Agreement.
6.3 PAYMENTS UPON THE EFFECTIVE DATE. Simultaneous with the Closing,
Roche shall make the following non-refundable and non-creditable payments to
OSI, except as otherwise set forth in this Agreement:
(a) ** and
(b) Thirty-five million dollars ($35,000,000) to purchase shares of OSI
common stock as set forth in the Stock Purchase Agreement.
6.4 ROYALTIES.
(a) ROYALTY.
(i) As consideration for the license rights granted to Roche and
its sublicensees by OSI under this Agreement, Roche shall pay to OSI a royalty
at the rate of ** of Net Sales of Licensed Product sold by Roche, its Affiliates
and sublicensees. Roche shall pay royalties with respect to each Licensed
Product on a country by country basis until the date of expiration or revocation
or complete rejection of the last to expire or to be revoked or to be completely
rejected of any Valid Claim of an OSI Patent covering such Licensed Product in
such country. In a country where there is no Valid Claim of an OSI Patent
covering Licensed Product either issued or pending, Roche shall pay royalties
with respect to such country for ten (10) years from the First Commercial Sale
of Licensed Product in such country.
(ii) Notwithstanding the above, if commencing on the date that is
ten (10) years from the First Commercial Sale of a given Licensed Product in a
country, the only remaining Valid Claim(s) of an OSI Patent in the country is of
a Joint Patent, the royalty rate for the country set forth above shall be
reduced by **
(iii) If a Third Party not under license from Roche sells a
product containing as an active ingredient an epidermal growth factor receptor
inhibitor that is Covered by an issued OSI Patent in a country or countries in
which Roche, its Affiliates or sublicensee is selling a Licensed Product, then
the royalty payable by Roche to OSI in such country shall be reduced by **.
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The royalty reduction shall be inapplicable during any period of time
that OSI diligently investigates, institutes, prosecutes and/or controls
litigation to enforce the OSI Patents to stop the sale of the products by the
Third Party in the country. The royalty reduction shall be applicable if within
sixty (60) days from the time Roche notifies OSI in writing of OSI's failure to
diligently prosecute, OSI does not promptly investigate, institute, prosecute
and/or control litigation to enforce the OSI Patents to stop the sale of the
products by the Third Party in the country.
(b) THIRD PARTY PAYMENTS. If Roche, in good faith and after the
approval of OSI, pays consideration under patent rights or know-how owned or
controlled by a Third Party, which, after receiving an opinion of competent
counsel, could reasonably be considered to be required to allow Roche to use,
sell, offer for sale, have sold, manufacture and import a Licensed Product in a
given country, Roche may deduct ** of such consideration from the royalty
payments payable by Roche to OSI under this Agreement, provided that such
royalty shall not be reduced by more than ** from the royalty rate under Section
6.4(a)(i).
(c) ROYALTY PAYMENT DATES. Royalties paid by Roche pursuant to Section
6.4(a) shall be paid by Roche within ** after the end of each calendar quarter
in which Net Sales are made. All such payments shall be accompanied by a
statement showing the source of such revenues, including the Net Sales of each
Licensed Product in each country and a calculation of the amount of payment due
for each such jurisdiction. In the event royalties are not paid within the time
period set forth in this Section 6.4(c), such royalties shall bear interest, to
the extent permitted by applicable law, at the average one-month European
Interbank Offered Rate (=EURIBOR) as reported by Datastream (or a successor or
similar organization) from time to time, calculated on the number of days such a
payment is overdue.
(d) ACCOUNTING. All payments due to OSI by Roche and royalties owed to
OSI shall be paid in U.S. Dollars. Whenever for the purpose of calculating
royalties conversion from any foreign currency shall be required, such
conversion shall be made as follows:
(i) when calculating the Adjusted Gross Sales, the amount of such
sales in foreign currencies shall be converted into Swiss Francs as computed in
the central Roche's Swiss Francs Sales Statistics for the countries concerned,
using for internal foreign currency translation the Roche's then current
standard practices actually used on a consistent basis in preparing its audited
financial statements.
(ii) when calculating the royalties on Net Sales, such conversion
shall be at the average rate of the Swiss Franc to the U.S. Dollars as retrieved
from the Reuters System (or any other source agreed upon in writing by the
parties) for the applicable calendar quarter.
(e) TAXES. All amounts owing to OSI specified in this Agreement shall
be paid net of all applicable taxes, fees, and other charges excluding only
taxes on Roche's income. In particular, any tax required to be withheld by Roche
under the laws of any country for the account of OSI (withholding taxes), shall
be promptly paid by Roche for and on behalf of OSI to the appropriate
governmental authority, and Roche shall furnish OSI with proof of payment of
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such tax. Any such tax actually paid on OSI's behalf shall be deducted from
royalty payments due to OSI or promptly reimbursed to Roche if no further
payments are due to OSI. Roche will assist OSI in minimizing the withholding
taxes applicable to any payment made by Roche and in claiming tax refund at
OSI's request.
6.5 MILESTONE PAYMENTS. Subject to the other terms and conditions of
this Agreement, and as consideration for the license rights granted to Roche by
OSI under this Agreement, Roche shall pay to OSI the following ** and ** amounts
only once, upon the first occurrence of such event, with respect to the first
Licensed Product Covered by an OSI Patent to reach such event:
EVENT PAYMENT
----- -------
Europe Japan
------ -----
** ** **
Milestone Payments shall be paid by Roche to OSI within thirty (30)
days after any filing or approval date.
6.6 PAID-UP LICENSE. Provided that Roche has satisfied all of its
obligations to make payments hereunder with respect to a particular Licensed
Product, Roche shall have a paid-up, exclusive, perpetual royalty-free license
to use, import, offer for sale, and sell such Licensed Product in each country
after the expiration of Roche's last obligation to make payments (including
royalties) with respect to Net Sales of such Licensed Product in such country.
6.7 VALUE OF RIGHTS. OSI and Roche understand and acknowledge that the
value of each of the rights granted by this Agreement might fluctuate while this
Agreement is in effect. Notwithstanding any such fluctuation, OSI and Roche have
agreed to allocate the value of these rights in the manner represented by the
royalties and other payments contemplated hereunder and intend such allocation
to be binding and unchanging.
ARTICLE 7.
MANUFACTURE AND SUPPLY
7.1 MANUFACTURE OF LICENSED PRODUCTS.
(a) CLINICAL SUPPLIES. Unless otherwise agreed, OSI shall provide or
cause to be provided all pre-clinical and Clinical Supplies of Licensed Product
for the completion of pre-clinical work and human clinical trials for the
indications for the Licensed Product in the Territory unless and until Roche
decides and is able to supply such Licensed Product. OSI will enter into one or
more "manufacturing and supply agreement(s)," with Third Party contract
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manufacturer(s) and/or Roche for Clinical Supplies as soon as practicable after
execution of this Agreement by the Parties. The cost of such manufacture of
Clinical Supplies will be shared by the Parties in accordance with the
Tripartite Agreement for Clinical Supplies which are part of Global Development
Costs, and in accordance with this Agreement and Exhibit C hereto for Clinical
Supplies which are part of OSI/Roche Development Costs.
(b) COMMERCIAL SUPPLIES. Roche shall be entitled to supply Commercial
Supplies of Licensed Product in the Territory, at the scale and in the amounts
required to meet demand for Licensed Product in the Territory, if (i) within two
(2) months after the Effective Date, Roche notifies OSI in writing that it is
committed to do so and (ii) within six (6) months after such notification, OSI
and Roche enter, after good faith negotiations, into an "OSI-Roche Manufacturing
and Supply Agreement" for no additional consideration. Notwithstanding the
foregoing, nothing is intended to preclude the Parties from negotiating an
agreement with respect to the supply of Commercial Supplies of Licensed Product
outside the Territory at a cost to be defined in such agreement (with OSI having
audit rights with respect to the calculation of such costs). If OSI and Roche do
not enter into the OSI-Roche Manufacturing and Supply Agreement in accordance
with this Section 7.1(b), then Roche shall no longer be entitled to supply
Commercial Supplies of Licensed Product in the Territory. In addition, OSI shall
then be responsible for establishing a commercial manufacturing process and for
supply of the Commercial Supplies of Licensed Products in the Territory, at the
scale and in the amounts required to meet demand for Licensed Product in the
Territory. In such case, as soon as practicable after the completion of the
first Phase III Enabling Clinical Trial, OSI will enter into a supply agreement
with a Third Party contract manufacturer(s) for Commercial Supplies wherein the
costs of manufacture and supply of Commercial Supplies of Licensed Products for
the Territory shall be no greater than the costs of manufacture and supply of
Commercial Supply of Licensed Products outside the Territory. The cost of such
manufacture and supply of Commercial Supplies for the Territory will be borne by
Roche(with Roche having audit rights with respect to the calculation of such
costs for the Territory). The detailed terms of the supply of Commercial
Supplies by OSI will be governed by a "Manufacturing and Supply Agreement"
entered into between the Parties as soon as practicable.
ARTICLE 8.
LICENSES
8.1 LICENSE TO ROCHE. Subject to the terms hereof and upon the Closing
Date, OSI hereby grants to Roche a royalty-bearing, non-transferable (except
pursuant to Section 17.1), non-sublicensable (except pursuant to Section 8.4),
sole and exclusive license under the OSI Patents and OSI Know-how, to use, sell,
offer for sale, and import Licensed Products in the Field in the Territory.
8.2 LICENSE TO OSI AND GENENTECH. Subject to the terms hereof and upon
the Closing Date, Roche hereby grants to OSI and Genentech, ** non-transferable
(except pursuant to
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Section 17.1), non-sublicensable (except pursuant to Section 8.4), co-exclusive
license (co-exclusive between OSI and Genentech) outside the Territory under the
Roche Patents and Roche Know-how to make, have made, use, sell, offer for sale
and import Licensed Products (as defined in the OSI-Genentech Agreement) in
accordance with the OSI-Genentech Agreement and this Agreement. Genentech shall
be a third party beneficiary with respect to the rights granted in the previous
sentence.
8.3 RETENTION OF RIGHTS. Notwithstanding the license granted to Roche
in Section 8.1, OSI shall retain the right within the Territory (i) to carry out
any and all activities contemplated under the OSI-Genentech Agreement and the
Tripartite Agreement, (ii) to conduct research and development relating to the
Licensed Products, or (iii) to use the OSI Know-how for its own internal use and
for non-commercial purposes.
8.4 SUBLICENSES. For the first ** after the Effective Date, neither
Party may sublicense any of its rights hereunder to a Third Party without the
prior written consent of the other Party. Beginning ** after the Effective Date,
such prior written consent of the other Party shall not be unreasonably
withheld. The Party requesting consent shall fully disclose to the other Party
all material terms of the proposed sublicense in connection with such request.
If any Party grants a sublicense permitted by this Agreement, all of the terms
and conditions of this Agreement shall apply to the sublicensee to the same
extent as they apply to such Party for all purposes. The sublicensing Party
assumes full responsibility for the performance of all obligations so imposed on
such sublicensee and will itself pay and account to the other Party for all
payments due under this Agreement by reason of the operation of any such
sublicense.
ARTICLE 9.
TRADEMARKS
9.1 PRODUCT TRADEMARK. All Licensed Products shall be sold in the
Territory under the Product Trademark or described in Section 5.1.
9.2 GRANT OF LICENSE. OSI grants to Roche, subject to compliance with
the other terms and conditions of this Agreement including, without limitation,
Section 8.4, a sole and exclusive, royalty-free license, with the right to
sublicense, to use the Product Trademark solely within the Territory and solely
in connection with the Licensed Products.
9.3 QUALITY CONTROL. Roche shall apply the Product Trademark only to
the Licensed Products in accordance with the terms of this Agreement. OSI shall
have the right, at any time during regular business hours but no more than one
time per calendar year, to conduct an examination of the Licensed Products to
determine the quality of such Products. If at any time, such Licensed Products
shall, in the reasonable opinion of OSI, fail to conform with the appropriate
standards of quality as required under this Agreement, OSI or its authorized
representatives shall notify Roche. Upon such notification, the Parties shall
discuss and implement actions to meet standards of quality to the complete
satisfaction of OSI.
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9.4 ACKNOWLEDGMENT OF OWNERSHIP RIGHTS. Roche acknowledges and agrees
that OSI is the exclusive owner of all right, title, and interest in and to the
Product Trademark and that all use of the Product Trademark by Roche will inure
to the exclusive benefit of OSI. Roche undertakes to make use of the Product
Trademark only in such a way that the rights of OSI in said xxxx will not be
diminished in any way. Roche shall not use the Product Trademark as all or part
of any corporate name, trade name, trademark, service xxxx, certification xxxx,
collective membership xxxx, domain name, or any other designation confusingly
similar to the Product Trademark. If any application for registration is or has
been filed on behalf of Roche in any country and relates to any xxxx which, in
the reasonable opinion of OSI, is confusingly similar, deceptive, or misleading
with respect to, or dilutes or in any other way damages the Product Trademark,
Roche shall, at OSI's request, abandon all use of such xxxx and any registration
or application for registration and shall reimburse OSI for all costs and
expenses, including attorneys' fees, associated with any successful opposition
or related proceeding instigated by OSI or its authorized representative in
response to such filings. Use of Trademark Designations. Roche, at its option,
will use the (TM) designation in conjunction with any use of the Product
Trademark within the Territory until such time as the foreign registrations
issue, unless required by local trademark law. Once the foreign registrations
issue, Roche, at its option, will use the (R) designation with all uses of the
Product Trademark and any other similar designation, unless required by local
trademark law.
9.5 ACTIONS FOR INFRINGEMENT. Each Party shall notify the other
promptly upon learning of any actual, alleged, or threatened infringement of the
Product Trademark applicable to a Licensed Product in the Territory or of any
unfair trade practices, trade dress imitation, passing off of counterfeit goods,
or like offenses in the Territory. Upon learning of such offense from a Party,
the Parties shall confer regarding the defense of the Product Trademark. OSI
shall have the first right to respond to and defend any such infringement or
offense. In the event OSI elects to do so, Roche will cooperate with and provide
assistance to OSI. OSI will keep Roche reasonably informed at all times as to
the status of the infringement or offense. In the event that OSI elects, within
ninety (90) days, not to respond to or defend any such infringement or offense
or abandons such defense, then, in such event, Roche shall have the option to do
so, provided that OSI will cooperate with and provide assistance to Roche.
9.6 COSTS OF DEFENSE OF TRADEMARKS. The Party not bringing the action
may elect to contribute ** of the costs and expenses of such action by providing
written notice to the Party bringing the action within ninety (90) days of the
date such action is first brought. Otherwise, the Party bringing the action
shall bring such action or proceeding at its own cost and expense. The Party not
bringing such action agrees to be joined as a party plaintiff if necessary to
prosecute the action and to give reasonable assistance and authority to file and
prosecute the action. Any damages or other monetary awards recovered from
settlement or judgment from such an action shall be allocated first to reimburse
the costs and expenses of the Party bringing the action, then to reimburse the
costs and expenses, if any, of the other Party (except for costs associated with
the other Party being represented by counsel of its own choice). If a single
Party
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has paid the costs and expense of such action, any amounts remaining shall
be paid to such Party. **
ARTICLE 10.
CONFIDENTIALITY
10.1 CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement, the Tripartite Agreement, or otherwise agreed in writing, the Parties
agree that, for the Term of this Agreement and for five (5) years thereafter,
the receiving Party shall keep confidential and shall not publish or otherwise
disclose or use for any purpose other than as permitted under this Agreement any
Know-how and other proprietary information and materials furnished to it by the
other Party pursuant to this Agreement (collectively, "Confidential
Information"), except to the extent that it can be established by the receiving
Party that such Confidential Information:
(a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party as
demonstrated by competent written records;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;
(c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement;
(d) was disclosed to the receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
disclosing Party not to disclose such information to others; or
(e) was subsequently developed by the receiving Party without use of
the Confidential Information as demonstrated by competent written records.
The Parties may disclose Confidential Information to Genentech in
furtherance of and under the terms of the Tripartite Agreement.
10.2 AUTHORIZED DISCLOSURE.
(a) Each Party may disclose Confidential Information hereunder to the
extent such disclosure is required to comply with applicable governmental
regulations or conduct pre-clinical or clinical trials or to the extent ordered
by a court of competent jurisdiction (subject to entry of an appropriate
protective order), provided that if a Party is required by law or regulation to
make any such disclosure of the other Party's Confidential Information it will
give reasonable advance notice to the other Party of such disclosure requirement
and will use its reasonable best efforts to secure confidential treatment of
such Confidential Information required to be disclosed. In addition, each Party
shall be entitled to disclose, under a binder of confidentiality containing
provisions substantially as protective as those of this Article 10, Confidential
Information to its consultants, clinical investigators and contract
manufacturer, if any, but only for any purposes provided for in this Agreement.
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(b) The restrictions set forth in this Article 10 shall not prevent
Roche from disclosing any technical information to the extent reasonably
necessary to promote the use and sale of Licensed Product in a country upon
actual Regulatory Approval of Licensed Product in the country.
10.3 SURVIVAL. This Article 10 shall survive the termination or
expiration of this Agreement for a period of five (5) years; except Section
10.2(b) shall perpetually survive termination of this Agreement by Roche under
Section 14.2 or 14.7, or expiration of this Agreement.
10.4 TERMINATION OF PRIOR AGREEMENT. As of the Effective Date hereof,
this Agreement supersedes the Confidentiality Agreement between the Parties
dated September 25, 2000 but only insofar as such Confidentiality Agreement
relates to the subject matter of this Agreement. All Confidential Information
(as defined in such Confidentiality Agreement) exchanged between the Parties
under such Confidentiality Agreement relating to the subject matter of this
Agreement shall be deemed Confidential Information hereunder and also shall be
subject to the terms of this Article 10.
10.5 PUBLICATIONS. Except as required by law, and except as set forth
in the Tripartite Agreement, each Party agrees that it shall not publish or
present the results of studies or clinical trials carried out by such Party as
part of the collaboration without the opportunity for prior review by the other
Party. Each Party shall provide to the other Party the opportunity to review any
of the submitting Party's proposed abstracts, manuscripts or presentations
(including information to be presented verbally) which relate to the Field at
least thirty (30) days prior to their intended submission for publication, and
such submitting Party agrees, upon written request from the other Party, not to
submit such abstract or manuscript for publication or to make such presentation
until the other Party is given up to forty-five (45) days from the date of such
written request to seek appropriate patent protection for any material in such
publication or presentation which it reasonably believes is patentable. Once
such abstracts, manuscripts or presentations have been reviewed by each Party
and have been approved for publication, the same abstracts, manuscripts or
presentations do not have to be provided again to the other Party for review for
a later submission for publication. Expedited reviews for abstract and poster
presentations within ten (10) days of receipt by the other Party may be arranged
by sending a prior written notice to such other Party requesting such expedited
review, unless another arrangement is mutually agreed upon by the Parties. Each
Party also shall have the right to require that its Confidential Information
that may be disclosed in any such proposed publication be deleted prior to such
publication. In the event that either Party submits any manuscript or other
publication relating to any Licensed Product, it will consider and acknowledge
the contributions of the other Party, including, as appropriate, co-authorship.
ARTICLE 11.
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
11.1 OWNERSHIP OF INTELLECTUAL PROPERTY.
(a) INVENTIONS. Each Party will promptly disclose to the other all
Inventions made by it during the Term of this Agreement. As between the Parties,
OSI shall own all OSI Inventions,
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Roche shall own all Roche Inventions, and all Joint Inventions shall be owned
jointly by OSI and Roche. OSI and Roche each shall require all of its employees
to assign all inventions related to Licensed Products made by them to Roche and
OSI, as the case may be.
(b) OTHER INVENTIONS. During the Term of this Agreement, inventions may
be made by employees of either Party, solely or jointly, which are not
Inventions. As between the Parties, OSI shall own all such inventions made by
its employees solely or jointly with Third Parties, Roche shall own all such
inventions made by its employees solely or jointly with Third Parties and all
such inventions made jointly by employees of OSI and Roche shall be jointly
owned by OSI and Roche. Each Party, at its sole discretion and responsibility,
may file, prosecute and maintain patent applications and patents covering such
solely owned inventions. For inventions that are jointly owned by the Parties,
the Parties shall jointly decide on a patent application filing and prosecution
strategy.
(c) INVENTORSHIP PROCEDURE. The determination of inventorship for
Inventions shall be made in accordance with applicable laws in the Territory
relating to inventorship on a country-by-country basis. If the Parties cannot
agree as to inventorship, the Parties' patent counsel shall attempt to resolve
the issue of inventorship, and failing that, refer the same to outside counsel.
11.2 DISCLOSURE OF PATENT APPLICATIONS. In addition to the disclosures
required under Article 13 below, each Party shall provide to the other Party a
copy of any patent applications filed by the Party for Inventions.
11.3 THIRD PARTY PATENTS. Each Party agrees to bring to the attention
of the other Party in a timely manner any Third Party patent or patent
application that has been brought to its attention by such Third Party that it
believes would have a material affect on the operations to be conducted by or on
behalf of the Parties under this Agreement. In addition, as of the Effective
Date, neither Party has knowledge, without investigation, of any Third Party
patent or patent application that would be reasonably expected to have a
materially adverse effect on the business and operations to be conducted in the
Territory as contemplated by this Agreement by the Parties under this Agreement.
Additionally, as of the Effective Date, to its knowledge (without
investigation), neither Party (i) has received notice from any Third Party that
OSI-774 infringes on any patent or patent application owed by such Third Party
that would have a material effect on the operations to be conducted by or on
behalf of the Parties under this Agreement, or (ii) has received an adverse
written legal opinion from competent outside patent counsel that has not been
disclosed to the other Party. For purposes of this Section 11.3, the knowledge
of OSI shall mean the knowledge of the Chief Executive Officer, Vice President
Business Development and Director of Intellectual Property of OSI.
11.4 PATENT FILINGS.
(a) The Parties acknowledge that the Divestiture Agreement governs
responsibility for filing, prosecuting and maintaining the Base Patents, and
responsibility for all material actions relating to the prosecution or
maintenance of the Base Patents in the Territory, including patent oppositions
and revocation proceedings. OSI shall not amend the Divestiture Agreement as it
relates to the prosecution, maintenance or enforcement of the Base Patents
without the prior written consent of Roche, which consent shall not be
unreasonably withheld. To the extent and
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only to the extent permitted by the Divestiture Agreement, OSI shall (i) keep
Roche apprised of the status of each such patent and patent application in Major
European Countries and Japan, (ii) share with Roche all material information
(including correspondence with the various patent offices) relating thereto
promptly after receipt of such information and (iii) at Roche's timely request
intervene in such matters as may be reasonably requested by Roche.
(b) At its discretion and sole expense, each party shall file,
prosecute, and maintain its patents for its solely owned Inventions in such
countries worldwide as it may determine. OSI and Roche shall agree on which
Party shall file, prosecute and maintain patents in the Territory for any
jointly-owned Inventions on a case-by-case basis. If either Party as described
above elects not to file, prosecute or maintain any such patent in any country
worldwide, it shall so inform the other Party no later than nine (9) months
after the priority filing. If any Party at any time elects not to further
prosecute or maintain any such patent in any country in the Territory, it shall
so inform the other Party immediately. The other Party may then file, prosecute
and maintain any such patents in such countries as it may determine at its own
expense and discretion. The Party which is responsible for filing a patent
application for such an Invention will be termed the "filing Party." For the
U.S., the Major European Countries and Japan and as otherwise requested by the
other Party, the filing Party shall keep the other Party apprised of the status
of each such patent application and patent and shall seek the advice of the
other Party with respect to patent strategy and draft patent applications and
shall give reasonable consideration to any suggestions or recommendations
promptly provided by the other Party concerning the preparation, filing,
prosecution, and maintenance thereof. The Parties shall cooperate reasonably in
the prosecution of all such patent applications and patents and shall share all
material information relating thereto promptly after receipt of such
information. If, during the Term of this Agreement, the filing Party intends to
allow any patent or patent application for an Invention in any country of the
World to lapse or become abandoned without having first filed a substitute, the
filing Party shall make reasonable efforts to notify the other Party of such
intention at least sixty (60) days prior to the date upon which such patent
application or patent shall lapse or become abandoned, and the other Party shall
thereupon have the right, but not the obligation, to assume responsibility for
the prosecution and maintenance thereof at its own expense.
11.5 INITIAL FILINGS IF MADE OUTSIDE OF THE U.S. The Parties agree to
use reasonable efforts to ensure that any patent filed outside of the U.S. prior
to a U.S. filing will be in a form sufficient to establish the date of original
filing as a priority date for the purposes of a subsequent U.S. filing.
11.6 ENFORCEMENT RIGHTS.
(a) NOTIFICATION OF INFRINGEMENT. If either Party learns of any
infringement or threatened infringement by a Third Party of a Licensed Product
Patent in any country of the Territory, such Party shall promptly notify the
other Party in writing and shall provide such other Party with available
evidence of such infringement.
(b) ENFORCEMENT.
(i) ROCHE PATENTS. Roche shall have the right, but not the
obligation, to institute, prosecute and control (collectively, "bring") any
action of any Roche Patent that is not a Joint Patent, by counsel of its own
choice, and OSI shall have the right, at its own expense, to be
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represented in any such action by counsel of its own choice. If Roche chooses
not to bring an action or proceeding with respect to such a Roche Patent within
sixty (60) days of being notified of such infringement, then OSI shall have the
right (but not the obligation) to bring such action. The Party not in control
may elect to contribute ** of the costs and expenses of such action or
proceeding by providing written notice to the controlling Party within
forty-five (45) days of the date such action or proceeding is first brought.
Otherwise, the controlling Party shall bring such action or proceeding at its
own cost and expense. The Party not bringing such action or proceeding agrees to
be joined as a party plaintiff if necessary to prosecute the action or
proceeding and to give reasonable assistance and authority to file and prosecute
the action or proceeding. Any damages or other monetary awards recovered from
settlement or judgment from such an action or proceeding shall be allocated
first to reimburse the costs and expenses of the controlling Party, then to
reimburse the costs and expenses, if any, of the other Party (except for costs
associated with the other Party being represented by counsel of its own choice).
If a single Party has paid the cost and expense of such action or proceeding,
any amounts remaining shall be paid to such Party.**.
(ii) OSI PATENTS FOR INVENTIONS. OSI shall have the right, but not
the obligation, to bring any action or proceeding with respect to infringement
in the Territory of any OSI Patent for OSI Inventions, by counsel of its own
choice, and Roche shall have the right, at its own expense, to be represented in
any such action by counsel of its own choice. If OSI chooses not to bring an
action or proceeding with respect to such OSI Patents for OSI Inventions within
sixty (60) days of being notified of such infringement, then Roche shall have
the right (but not the obligation) to bring such action. The Party not in
control may elect to contribute ** of the costs and expense of such action or
proceeding by providing written notice to the controlling Party within
forty-five (45) days of the date such action or proceeding is first brought.
Otherwise, the controlling Party shall bring such action or proceeding at its
own cost and expense. The Party not bringing such action or proceeding agrees to
be joined as a party plaintiff if necessary to prosecute the action or
proceeding and to give reasonable assistance and authority to file and prosecute
the action or proceeding. Any damages or other monetary awards recovered from
settlement or judgment from such an action or proceeding shall be allocated
first to reimburse the costs and expenses of the controlling Party, then to
reimburse the costs and expenses, if any, of the other Party (except for costs
associated with the other Party being represented by counsel of its own choice).
If a single Party has paid the costs and expense of such action or proceeding,
any amounts remaining shall be paid to such Party.**.
(iii) JOINTLY-OWNED PATENTS FOR INVENTIONS. In the event of an
infringement of a Joint Patent, the Parties shall promptly decide the best way
for the Parties to proceed, including handling costs of enforcement, and
entitlement to recovery from any settlement or judgment from any action or
proceeding to enforce any such jointly-owned patent. In any event, if the
Parties decide to bring an action or proceeding, the Party not bringing such
action or proceeding agrees to be joined as a party plaintiff if necessary to
prosecute the action or proceeding and to give reasonable assistance and
authority to file and prosecute the action or proceeding.
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(iv) BASE PATENTS. The Parties acknowledge that the Divestiture
Agreement governs responsibility for enforcing the Base Patents. To the extent
and only to the extent permitted by the Divestiture Agreement, the Parties agree
that as between OSI and Roche, the following provision shall apply. OSI shall
have the right, but not the obligation, to bring any action or proceeding with
respect to infringement of any such of the Base Patents in the Territory, by
counsel of its own choice. If OSI chooses not to bring an action or proceeding
in the Territory with respect to such a Base Patent within sixty (60) days of
being notified of such infringement, then, to the extent permitted by the
Divestiture Agreement, Roche shall have the right (but not the obligation) to
bring such action in the Territory. The Party not in control may elect to
contribute ** of the costs and expenses of such action or proceeding by
providing written notice to the controlling Party within forty-five (45) days of
the date such action or proceeding is first brought. Otherwise, the controlling
party shall bring such action or proceeding at its own cost and expense. The
Party not bringing such action or proceeding agrees to be joined as a party
plaintiff if necessary to prosecute the action or proceeding and to give
reasonable assistance and authority to file and prosecute the action or
proceeding. Any damages or other monetary awards recovered from settlement or
judgment from such an action or proceeding shall be allocated first to reimburse
the costs and expenses of the controlling Party, then to reimburse the costs and
expenses, if any, of the other Party (except for costs associated with the other
Party being represented by counsel of its own choice). If a single Party has
paid the costs and expense of such action or proceeding, any amounts remaining
shall be paid to such Party. **.
(c) SETTLEMENT WITH A THIRD PARTY. The Party that brings suit to
enforce a given Licensed Product Patent shall also have the right to control
settlement of such claim; provided, however, that if one Party controls, no
settlement shall be entered into without the written consent of the other Party
if such settlement would materially and adversely affect the interests of such
other Party. If there is no agreement between the Parties regarding such
settlement, then the dispute will be resolved pursuant to Article 16 below. If
the dispute is not resolved pursuant to Article 16, then the case may not be
settled.
ARTICLE 12.
REPRESENTATIONS AND WARRANTIES
12.1 REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby
represents and warrants as follows:
(a) This Agreement is a legal and valid obligation binding upon such
Party and enforceable in accordance with its terms. The execution, delivery and
performance of the Agreement by such Party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a Party or by which
it is bound, nor violate any law or regulation of any court, governmental body
or administrative or other agency having jurisdiction over it.
(b) Such Party has not, and during the Term of the Agreement will not,
grant any rights related to Licensed Products to any Third Party which would
conflict with the rights
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granted to the other Party hereunder or under the OSI-Genentech Agreement or
Tripartite Agreement.
(c) That such Party has the right to grant the licenses granted herein.
12.2 ROCHE REPRESENTATION. Roche represents that during the course of
this transaction and prior to the Closing Roche has had an opportunity to ask
questions of, and to receive answers from, OSI and its representatives, with
respect to OSI, OSI-774 and the terms and conditions of this transaction.
12.3 OSI REPRESENTATION. OSI represents that during the course of this
transaction and prior to the Closing, Roche, or representatives of Roche have
had the opportunity to ask questions of and receive answers from representatives
of OSI concerning the terms and conditions of the transaction, and to obtain
information, documents, records and books relative to OSI, its business, OSI-774
and the transaction, and OSI represents and warrants that it did not knowingly
withhold any material information from Roche in response to Roche's inquiries or
otherwise in connection with the subject matter of this Agreement. **
12.4 THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS
AGREEMENT ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE EXCEPT THAT THIS SHALL NOT AFFECT ANY
REPRESENTATION MADE ABOUT MATERIAL FURNISHED UNDER ANY SUPPLY OR MANUFACTURING
AGREEMENT.
12.5 DISCLAIMER. IN NO EVENT SHALL EITHER OSI OR ROCHE BE LIABLE FOR
SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT BASED ON CONTRACT, TORT OR ANY LEGAL THEORY EXCEPT AS SPECIFICALLY
PROVIDED IN THIS AGREEMENT.
ARTICLE 13.
INFORMATION AND REPORTS
13.1 INFORMATION. Roche and OSI will disclose and make available to
each other in a timely manner all pre-clinical, clinical, regulatory and other
information concerning Licensed Products known by Roche or OSI at any time
during the Term of this Agreement in accordance with the Tripartite Agreement.
Each Party will use Commercially Reasonable and Diligent Efforts to disclose to
the other Party all significant information directly related to Licensed
Products promptly after it is learned or its significance is appreciated. The
ownership and maintenance of a database of adverse drug experience information
for all commercial Licensed Products will be determined in accordance with the
Tripartite Agreement. As soon as reasonably possible after the execution of this
Agreement, the Parties will enter into one or more separate safety and adverse
event reporting agreements which will govern the reporting and other procedures
related to adverse drug experiences under this collaboration between OSI and
Roche, and under the activities in the Tripartite Agreement between the Parties
and Genentech.
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** This portion has been redacted pursuant to a confidential treatment request.
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13.2 PRODUCT COMPLAINTS. Roche will maintain a record of all
non-medical and medical Licensed Product related complaints and will notify OSI
of any complaint in a sufficient time to allow OSI to comply with any regulatory
requirements it may have with respect to such complaint.
13.3 ADVERSE DRUG EVENTS. The Parties recognize that the Party that is
the holder of an IND and a Drug Approval Application will be required to submit
information and file reports to various governmental agencies on compounds under
clinical investigation, compounds proposed for marketing, or marketed drugs.
Information must be submitted at the time of initial filing for investigational
use in humans and at the time of a request for market approval of a new drug. In
addition, supplemental information must be provided on compounds at periodic
intervals and adverse drug experiences must be reported at more frequent
intervals depending on the severity of the experience. The specific obligations
of each Party with respect to adverse drug experiences will be governed by the
safety and adverse event reporting agreement(s) described in Section 13.1 above.
13.4 RECORDS OF NET SALES. Roche and its Affiliates shall keep, and
shall require its sublicensees to keep, full, true and accurate books of account
containing all particulars that may be necessary for the purpose of calculating
all royalties payable to OSI. Such books of accounts shall be kept at their
principal place of business. At the reasonable expense of OSI, OSI or its
authorized independent public accountant has the right to engage Roche's
officially appointed worldwide independent public accountant to perform, on
behalf of OSI or its independent public accountant, an audit, conducted in
accordance with international accounting standards (IAS), of such books and
records of Roche, its Affiliates and sublicensees, that are deemed necessary by
Roche's independent public accountant to report on Net Sales of Licensed Product
for the period or periods requested by OSI and the correctness of any report or
payments made under this Agreement. Roche shall have the right to participate in
the determination of the scope of such audit procedures.
Upon timely request and at least thirty (30) working days' prior
written notice from OSI, such audit shall be conducted as an additional audit
work during Roche's annual audit of the countries specifically requested by OSI,
during regular business hours in such a manner as to not unnecessarily interfere
with Roche's normal business activities, and shall be limited to results in the
two (2) calendar years prior to audit notification. Such audit shall not be
performed more frequently than once per calendar year nor more frequently than
once with respect to records covering any specific period of time. **. All
information, data documents and abstracts herein referred to shall be used only
for the purpose of verifying royalty statements or compliance with this
Agreement, shall be treated as Roche Confidential Information subject to the
obligations of this Agreement and need neither be retained more than one (1)
year after completion of an audit hereof, if an audit has been requested; nor
more than three (3) years from the end of the calendar year to which each shall
pertain; nor more than one (1) year after the date of termination of this
Agreement. Audit results shall be shared by Roche and OSI. If the audit reveals
an underpayment, Roche shall promptly make up such underpayment. If the audit
reveals that the
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** This portion has been redacted pursuant to a confidential treatment request.
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royalties owed by Roche to OSI for the countries specifically requested and for
any calendar year in total have been understated by more than **. The failure
of OSI to request verification of any royalty calculation within the period
during which corresponding records must be maintained will be deemed to be
acceptance of the royalty reporting. In the case Roche has overpaid royalties to
OSI, Roche shall be entitled to claim reimbursement of any such amount overpaid
and OSI shall promptly reimburse Roche for any such amount.
13.5 CONTRIBUTION OF INFORMATION. It is the intention of the Parties
that each will disclose to the other Party such information in its possession
that is useful to the development and commercialization of Licensed Products,
subject to contractual obligations of the Parties entered into prior to the
execution of this Agreement by the Parties.
13.6 PUBLICITY REVIEW. The Parties agree that the public announcement
of the execution of this Agreement shall be in the form of a press release to be
agreed upon on or before the Effective Date and thereafter each Party shall be
entitled to make or publish any public statement consistent with the contents
thereof. Thereafter, except as set forth in the Tripartite Agreement, OSI and
Roche will jointly discuss and agree, based on the principles of this Section
13.6, on any statement to the public regarding this Agreement or any aspect of
this Agreement and the results of clinical studies conducted hereunder, subject
in each case to disclosure otherwise required by law or regulation as determined
in good faith by each Party. When a Party elects to make any such statement it
will give the other Party at least five (5) day's notice, unless disclosure is
required by law in a shorter period of time, to the other Party to review and
comment on such statement. The Parties acknowledge the importance of supporting
each other's efforts to publicly disclose results and significant developments
regarding Licensed Products. The principles to be observed by OSI and Roche in
such public disclosures will be: accuracy, the requirements for confidentiality
under Article 10, the advantage a competitor of OSI or Roche may gain from any
public statements under this Section 13.6, and the standards and customs in the
biotechnology and pharmaceutical industries for such disclosures by companies
comparable to OSI and Roche. The terms of this Agreement may also be disclosed
to (a) government agencies where required by law, including filings required to
be made by law with the Securities and Exchange Commission, the New York Stock
Exchange, or any national exchange, or (b) Third Parties with the prior written
consent of the other Party, which consent shall not be unreasonably withheld, so
long as such disclosure is made under a binder of confidentiality at least as
restrictive as the confidentiality provisions in Section 10.1 above (in the case
of Third Parties), so long as highly sensitive terms and conditions such as
financial terms are extracted from the Agreement or not disclosed upon the
request of the other Party and the disclosing Party gives reasonable advance
notice of the disclosure under the circumstances requiring the disclosure.
ARTICLE 14.
TERM AND TERMINATION
14.1 TERM. This Agreement shall commence as of the Effective Date. The
Parties have specifically provided elsewhere in this Agreement the term during
which certain rights and obligations hereunder shall apply. Subject to Section
6.4, unless sooner terminated as provided in this Article 14, the remaining
provisions of this Agreement relating to activities in the
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** This portion has been redacted pursuant to a confidential treatment request.
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Territory shall continue in effect until the date on which OSI is no longer
entitled to receive a royalty on any Licensed Product (the "Term"). Unless
sooner terminated as provided in this Article 14, the license granted to Roche
in Section 9.2 shall survive the Term.
14.2 TERMINATION.
(a) TERMINATION FOR BREACH. If either Party materially breaches this
Agreement at any time, which breach is not cured within ninety (90) days after
written notice thereof from the non-breaching Party specifying the nature of
such breach, the non-breaching Party shall have the right to terminate this
Agreement immediately upon written notice to the breaching Party. Upon such
termination, the Parties shall have no further rights or obligations under this
Agreement except as set forth in this Article 14 or as otherwise specifically
provided in this Agreement. The Parties acknowledge and agree that failure to
exercise any right or option with respect to any Licensed Product or to take any
action expressly within the discretion of a Party shall not be deemed to be
material breach hereunder.
(b) FAILURE OF ROCHE TO MAKE PAYMENT. Notwithstanding Section 14.2(a),
if Roche materially breaches this Agreement by failure to make any of the
payments required under Section 6.3 or 6.5 within thirty (30) days after such
payment becomes payable, and such failure is not remedied within thirty (30)
days after Roche's receipt of written notice from OSI of such breach, then OSI
shall have the right to terminate this Agreement, provided however, that if the
Parties disagree as to the achievement of any milestone event applicable to such
payment, then Roche will not be obligated to make such payment pending
resolution of such disagreement, and the Parties will resolve such disagreement
pursuant to the dispute resolution procedures in Sections 16.1, 16.2 and 16.3.
(c) BREACHING PARTY OBLIGATIONS. In the event of termination by a Party
due to material breach by the other Party, the breaching Party shall: (i) remain
responsible to supply the amounts of Licensed Product it was obligated to supply
at the time of such termination for a reasonable period of time to allow the
other Party to find an alternate source of supply, or as otherwise required
under a Manufacturing and Supply Agreement between the Parties; (ii) make its
personnel and other resources reasonably available to the other Party as
necessary to effect an orderly transition of responsibilities, with the
reasonable cost of such personnel and resources to be borne by the breaching
Party after the effective date of termination and (iii) if such material breach
occurred prior to the second anniversary of the Closing Date, pay to the
non-breaching Party, in addition to any amounts due and owing by the breaching
Party under this Agreement (other than amounts, if any, that cause the breach)
**. If such material breach occurs on or after the second anniversary of the
Closing Date, the non-breaching Party shall have all remedies provided by law or
equity with respect to such breach, that may be awarded pursuant to Article 16
below, in addition to any amounts due and owing by the breaching Party to the
non-breaching Party under this Agreement.
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** This portion has been redacted pursuant to a confidential treatment request.
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14.3 ADDITIONAL EFFECTS OF TERMINATION FOR MATERIAL BREACH.
(a) In the event that OSI terminates this Agreement pursuant to Section
14.2 above, (i) all rights and licenses granted to Roche hereunder shall revert
to OSI, (ii) title to all jointly owned Inventions shall be transferred to OSI
(except that Roche shall retain ** non-exclusive worldwide license to practice
such Inventions to the extent applicable to products other than Licensed
Products), (iii) Roche shall grant to OSI a sole and exclusive worldwide,
perpetual, ** license under Roche Patents and Roche Know-how to make, have made,
use, sell, offer for sale or import Licensed Products throughout the world, and
(iv) Roche shall provide and assign to OSI, at Roche's expense, for no
additional consideration to be paid by OSI, all clinical data, Drug Approval
Applications, Regulatory Approvals and all other regulatory documentation
specifically covering Licensed Product (but only to the extent they specifically
relate only to Licensed Product and not other products or matters) that Roche
may have developed in its activities under this Agreement.
(b) In the event that Roche terminates this Agreement pursuant to
Section 14.2 above, at Roche's sole option, all licenses granted to Roche
hereunder shall survive, provided that Roche shall **.
14.4 PARTIAL TERMINATION.
(a) PARTIAL TERMINATION BY ROCHE. Beginning two (2) years after the
Effective Date, Roche shall have the right to provide six (6) months written
notice to OSI to terminate this Agreement on a country-by-country basis. Such
country-by-country termination shall be effective at the end of the applicable
notice period.
(b) PARTIAL TERMINATION BY OSI. OSI shall have the right to terminate
this Agreement on a country-by-country basis if Roche has not launched and
marketed a Licensed Product in any such country within six (6) months after
regulatory approval in such country without an objectively justifiable business
or scientific reason adequately evidenced by competent written records.
14.5 EFFECT OF PARTIAL TERMINATION.
(a) Termination pursuant to Section 14.4 shall not relieve either party
of the performance of any obligations incurred or payments (i) due prior to the
effective date of termination, (ii) which are uncancellable, and (iii) in
accordance with the Global Development Plan.
(b) Notwithstanding the foregoing, if Roche terminates the Agreement
with regard to a Licensed Product in a country in accordance with Section
14.4(a) the following shall apply for the country:
(i) Roche shall use its reasonable efforts to effect a smooth and
orderly transition of any already on-going clinical studies, Regulatory Approval
or pre-marketing efforts to OSI (including all data and reports in the
possession of Roche);
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** This portion has been redacted pursuant to a confidential treatment request.
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(ii) Roche shall make its personnel and other resources reasonably
available to the other Party as necessary to effect an orderly transition of
development responsibilities, with the reasonable cost of such personnel and
resources to be borne by Roche after the effective date of termination;
(iii) **;
(iv) all rights and licenses granted herein to Roche shall revert
to OSI, for no additional consideration, and immediately terminate. Thereafter,
OSI shall have the sole and exclusive license to make, have made, use, offer for
sale, sell and import Licensed Product in the Territory under Roche Patents and
Roche Know-how; and
(v) Roche shall provide and assign to OSI, at Roche's expense, all
clinical data, INDs, NDAs, Regulatory Approvals and all other regulatory
documentation specifically relating to Licensed Product (but only to the extent
they specifically relate only to Licensed Product and not other products or
matters) that Roche may have developed in its activities under this Agreement.
(c) In the event of termination pursuant to Section 14.4(b), with
regard to such country (i) all licenses granted by OSI to Roche in such country
shall terminate, (ii) all licenses granted by Roche to OSI shall continue and
(iii) at the request of OSI, Roche shall assign to OSI all regulatory filings,
regulatory approvals and clinical data owned and controlled by Roche relating to
Licensed Products, or, if such assignment is not legally permissible, grant OSI
the right to access, use and cross reference such filings, approval and data.
(d) Roche shall have the unilateral right to terminate this Agreement
at any time upon thirty (30) days' writtten notice to OSI if the Global
Development Committee imposes a clinical hold for at least six (6) months, or
there has been a clinical hold by a regulatory authority in a Major European
Country or Japan for at least six (6) months, provided, however:
(i) Roche shall use its reasonable efforts to effect a smooth and
orderly transition of any already on-going clinical studies, Regulatory Approval
or pre-marketing efforts to OSI (including all data and reports in the
possession of Roche);
(ii) Roche shall make its personnel and other resources reasonably
available to the other Party as necessary to effect an orderly transition of
development responsibilities, with the reasonable cost of such personnel and
resources to be borne by Roche after the effective date of termination;
(iii) **;
(iv) all rights and licenses granted herein to Roche shall revert
to OSI, for no additional consideration, and immediately terminate. Thereafter,
OSI shall have the sole and exclusive license to make, have made, use, offer for
sale, sell and import Licensed Product in the Territory under Roche Patents and
Roche Know-how; and
(v) Roche shall provide and assign to OSI, at Roche's expense, all
clinical data, INDs, NDAs, Regulatory Approvals and all other regulatory
documentation specifically
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** This portion has been redacted pursuant to a confidential treatment request.
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relating to Licensed Product (but only to the extent they specifically relate
only to Licensed Product and not other products or matters) that Roche may have
developed in its activities under this Agreement.
14.6 TERMINATION WITHOUT CAUSE.
(a) Subject to Section 6.1, either Party may terminate this Agreement,
upon ten (10) days' prior written notice to the other Party if the FTC does not
approve the transaction under the HSR Act or if all applicable waiting periods,
requests for information (and any extensions thereof) under the HSR Act have not
expired or otherwise been terminated by June 1, 2001, in which case this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of OSI or Roche or their respective affiliates, officers,
directors or shareholders except (i) with respect to Article 10 and (ii) that no
such termination shall relieve any Party from liability for a material breach
hereof.
(b) OSI may terminate this Agreement, upon ten (10) days' prior written
notice to Roche, if the conditions under Section 6.2(a)(iii)-(vi) are not
satisfied (but only with respect to 6.2(a)(v) if OSI complied) and the
conditions under Section 6.2(a)(i) and 6.2(b)(i) have been satisfied or waived.
Nothing in this Section shall prevent OSI from seeking any remedy that it may
have in addition to those rights it has under this Agreement. Roche may
terminate this Agreement, upon ten (10) days' prior written notice to OSI, if
the conditions under Section 6.2(b)(iii) or 6.2(b)(iv) are not satisfied (but
only if Roche has complied with respect to Section 6.2(b)(iv) and has complied
with Section 6.2(a)(iv)) and the conditions under Section 6.2(a)(i) and
6.2(b)(i) have been satisfied or waived. Nothing in this Section shall prevent
Roche from seeking any remedy that it may have in addition to those rights it
has under this Agreement. If either OSI or Roche terminates this Agreement in
accordance with this Section 14.6(b) but Roche has made payments under Sections
6.2(a)(iii) and (iv), then Roche shall be entitled to a prompt refund to such
payments.
14.7 BANKRUPTCY. Either Party may, in addition to any other remedies
available to it by law or in equity, terminate this Agreement, in whole or in
part as the terminating Party may determine, by written notice to the other
Party in the event the other Party shall have become bankrupt, or shall have
made an assignment for the benefit of its creditors or there shall have been
appointed a trustee or receiver of the other Party or for all or a substantial
part of its property or any case or proceeding shall have been commenced or
other action taken by or against the other Party in bankruptcy or seeking
reorganization, liquidation, dissolution, winding-up, arrangement, composition
or readjustment of its debts or any other relief under any bankruptcy,
insolvency, reorganization or other similar act or law of any jurisdiction now
or hereafter in effect and any such event shall have continued for ninety (90)
days undismissed, unbonded and undischarged. All rights and licenses granted
under to this Agreement by one Party to the other Party 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 (56) of the
Bankruptcy Code. The Parties agree that the licensing Party under this Agreement
shall retain and may fully exercise all of its rights and elections under the
Bankruptcy Code in the event of a bankruptcy by the other Party. The Parties
further agree that in the event of the commencement of a bankruptcy proceeding
by or against one Party under the Bankruptcy Code, the licensee shall be
entitled to complete access to any such intellectual property pertaining to the
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rights granted in the licenses hereunder of the Party by or against whom a
bankruptcy proceeding has been commenced and all embodiments of such
intellectual property.
14.8 SURVIVING RIGHTS. Except as modified in this Article 14, the
obligations and rights of the Parties under Articles 10, 14 and 15 and Sections
4.2, 8.2 (only with respect to Genentech), 11.1(a) and (c), 11.2, 11.6, 13.4,
13.6 (but only regarding disclosures required by law), 16.2, 17.5, 17.6,
17.8(a), 17.9, 17.10 and 17.4 of this Agreement will survive any termination or
expiration of this Agreement. In addition, the obligations and rights of any
other provision of this Agreement, which by the nature of the provision and the
nature of the termination or expiration, are intended to survive, shall survive
and continue to be enforceable.
14.9 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Except as specifically
provided in this Agreement, termination, relinquishment or expiration of the
Agreement for any reason shall be without prejudice to any rights which shall
have accrued to the benefit of either Party prior to such termination,
relinquishment or expiration, including damages arising from any breach
hereunder. Except as specifically provided, such termination, relinquishment or
expiration shall not relieve either Party from obligations which are expressly
indicated to survive termination or expiration of the Agreement.
ARTICLE 15.
INDEMNIFICATION
15.1 INDEMNIFICATION BY ROCHE. Roche hereby agrees to save, defend and
hold OSI and its agents and employees harmless from and against any and all
losses, damages, liabilities, settlements, penalties, fines, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
(collectively, "Losses") resulting or alleged to result from any actual or
asserted violation of applicable law or regulation by Roche, its Affiliates or
sublicensees by virtue of which Licensed Products manufactured (if Roche becomes
a manufacturer under an agreement with OSI with respect thereto), advertised,
marketed, handled, stored, distributed or sold by Roche, its Affiliates and
sublicensees shall be alleged or determined to be adulterated, mislabeled or
otherwise not in compliance, relating to the foregoing, except to the extent
such Losses result from the negligence or willful misconduct of OSI or its
employees or agents. This indemnification provision shall include any reasonable
attorney's fees incurred by OSI in connection with enforcing this
indemnification.
15.2 INDEMNIFICATION BY OSI. OSI hereby agrees to save, defend and hold
Roche and its agents and employees harmless from and against any and all Losses
resulting or alleged to result from any actual or asserted violation of
applicable law or regulation by OSI, its Affiliates or sublicensees by virtue of
which Licensed Products manufactured, handled, stored, distributed or sold by
OSI, its Affiliates and sublicensees shall be alleged or determined to be
adulterated, mislabeled or otherwise not in compliance, relating to the
foregoing except to the extent such Losses result from the negligence or willful
misconduct of Roche or its employees or agents. This indemnification provision
shall include any reasonable attorney's fees incurred by Roche in connection
with enforcing this indemnification.
15.3 INDEMNIFICATION CONDITIONS. In the event that a Party is seeking
indemnification under Section 15.1 or 15.2 above, it shall inform the
indemnifying Party of a claim as soon as
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reasonably practicable after it receives notice of the claim, shall permit the
indemnifying Party to assume direction and control of the defense of the claim
(including the right to settle the claim solely for monetary consideration),
shall cooperate as requested (at the expense of the indemnifying Party) in the
defense of the claim, and shall not settle or compromise the claim without the
express written consent of the indemnifying Party.
ARTICLE 16.
DISPUTE RESOLUTION
16.1 DISPUTES. The Parties recognize that disputes as to certain
matters may from time to time arise during the Term of this Agreement which
relate to either Party's rights and/or obligations hereunder. It is the
objective of the Parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. To accomplish this objective, the
Parties agree to follow the procedures set forth in this Article 16 if and when
a dispute arises under this Agreement.
Unless otherwise specifically recited in this Agreement, disputes among
the Parties shall be presented to the chief executive officer of Roche and of
OSI, or their respective designee, for resolution. In the event that the chief
executive officer of Roche and OSI, or their respective designees, cannot
resolve the dispute within thirty (30) days of being requested by a Party to
resolve a dispute, either Party may, by written notice to the other, invoke the
provisions of Section 16.2 hereinafter.
16.2 ARBITRATION. The Parties agree that any dispute, controversy or
claim arising out of or relating to this Agreement, or the breach, termination,
performance or invalidity thereof, shall be resolved through binding
arbitration. If the dispute arises between the Parties, and if such dispute
cannot be resolved pursuant to Section 16.1 above, each Party shall have the
right to have any such unresolved dispute, controversy or claim resolved by
binding arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, except as modified herein. Each such
arbitration shall be conducted by a panel of three arbitrators; provided that
each such arbitrator shall have had, by the time of the actual arbitration, at
least ten (10) years of experience as an attorney and experience in the
pharmaceuticals industry so as to better understand the legal, business and
scientific issues addressed in the arbitral proceeding. A reasoned arbitration
decision shall be rendered in writing within thirty (30) days of the conclusion
of the arbitration hearing and shall be binding and not be appealable to any
court in any jurisdiction. The prevailing Party may enter such decision in any
court having competent jurisdiction. Each Party must bear its own attorney's
fees and associated costs and expenses. The arbitrators shall have the authority
to grant specific performance and shall allocate costs between the Parties
(excluding attorney's fees). If brought by Roche, such arbitration shall be held
in New York, New York and in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. If brought by OSI, such arbitration shall
be held in Zurich, Switzerland under the rules of the Zurich Chamber of
Commerce.
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ARTICLE 17.
MISCELLANEOUS
17.1 ASSIGNMENT.
(a) This Agreement may not be assigned by either Party without the
consent of the other, except that each Party may, without such consent, assign
this Agreement and the rights, obligations and interests of such Party, in whole
or in part, to any of its Affiliates, wholly-owned subsidiaries, to any
purchaser of all or substantially all of its assets in the line of business to
which this Agreement pertains, or of all of its capital stock, or to any
successor corporation resulting from any merger or consolidation of such Party
with or into such corporation.
(b) This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of the Parties. Any attempt to assign any
portion of this Agreement in violation of this Section 17.1 shall be void.
Subject to the foregoing, any references to OSI and Roche hereunder shall be
deemed to include the successors and permitted assigns thereof.
17.2 LEGAL COMPLIANCE. Each Party shall comply in all material respects
with all laws, rules and regulations applicable to the conduct of its business
pursuant to this Agreement.
17.3 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other cause beyond the control and without the fault or negligence of the
defaulting Party, provided that the Party claiming force majeure has exerted all
reasonable efforts to avoid or remedy such force majeure; provided, however,
that in no event shall a Party be required to settle any labor dispute or
disturbance. Such excuse shall continue as long as the condition preventing the
performance continues. Upon cessation of such condition, the affected Party
shall promptly resume performance hereunder. Each Party agrees to give the other
Party prompt written notice of the occurrence of any such condition, the nature
thereof, and the extent to which the affected Party will be unable to perform
its obligations hereunder. Each Party further agrees to use all reasonable
efforts to correct the condition as quickly as possible and to give the other
Party prompt written notice when it is again fully able to perform its
obligations.
17.4 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.
17.5 NO RIGHT TO USE NAMES. Except as otherwise provided herein, no
right, express or implied, is granted by the Agreement to use in any manner the
name "OSI," "Roche" or any other trade name or trademark of the other Party or
it's Affiliates in connection with the performance of the Agreement.
17.6 NOTICES. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof).
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IF TO OSI TO: OSI PHARMACEUTICALS, INC.
000 Xxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxxx
Chief Executive Officer
Telecopy: 000-000-0000
WITH A COPY TO: XXXXX XXXXX XXXX XXXXXX XXXXXXX AND XXXXX, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopy: 212-983-3115
IF TO ROCHE TO: X.XXXXXXXX-XX XXXXX LTD
Xxxxxxxxxx Xxxxxxx 000
XX-0000-Xxxxx
Xxxxxxxxxxx
Attention: Corporate Law
Telecopy: 00-00-000-00-00
17.7 WAIVER. Except as specifically provided for herein, the waiver
from time to time by either of the Parties of any of their rights or their
failure to exercise any remedy shall not operate or be construed as a continuing
waiver of same or of any other of such Party's rights or remedies provided in
this Agreement.
17.8 SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (a) the remainder of this Agreement,
or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.
17.9 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with, the laws of the State of New York.
17.10 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authorized the ambiguous provision.
17.11 HEADINGS. All headings are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement.
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17.12 COUNTERPARTS. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17.13 ENTIRE AGREEMENT. Except for the Tripartite Agreement, this
Agreement, including all Exhibits attached hereto which are hereby incorporated
herein by reference, sets forth all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto with respect to the subject matter hereof and supersedes and terminates
all prior agreements and understandings between the Parties, subject to Section
10.4 above with respect to prior Confidentiality Agreements. Except for the
Tripartite Agreement, there are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties with respect to the subject matter hereof other than as set forth
herein and therein. No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the Parties hereto unless reduced to
writing and signed by the respective authorized officers of the Parties. If any
provision of this Agreement conflicts with the provisions of the Tripartite
Agreement, the provisions of the Tripartite Agreement shall govern such
conflict.
17.14 NO THIRD PARTY BENEFICIARY. Except as expressly provided herein,
this Agreement shall not confer any rights or remedies upon any Third Party
other than the Parties and their respective successors and permitted assigns.
[This space is intentionally left blank.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first above
written.
OSI PHARMACEUTICALS, INC. X.XXXXXXXX-XX XXXXX LTD
By: /s/ XXXXX XXXXXXX By: /s/ XXXXXX XXXXXXX
--------------------------- --------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxxx Xxxxxxx
----------------------------------- --------------------------
Title: Chairman & Chief Executive Officer Title: Senior Vice President
----------------------------------- --------------------------
By: /s/ XXXXXX XXXXXXXXX
--------------------------
Name: Xxxxxx Xxxxxxxxx
--------------------------
Title: Vice President
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EXHIBIT A
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EXHIBIT B
GLOBAL DEVELOPMENT PLAN
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EXHIBIT C
OSI/ROCHE DEVELOPMENT COSTS AND BUDGET
C.1 OSI/ROCHE DEVELOPMENT COSTS.
OSI/Roche Development Costs shall mean the costs specifically
attributable to the development of a Licensed Product and actually incurred in
the Territory after the Effective Date of the Agreement through the date of
termination as defined under the Tripartite Agreement to the extent they are not
already considered and accounted as Global Development Costs as defined under
Exhibit A of the Tripartite Agreement.
Such costs shall comprise those costs, both direct and indirect
including Development Allocable Overhead (i.e. fully burdened development
costs), required to obtain, expand and/or maintain the authorization and/or
ability to manufacture, formulate, fill, ship and/or sell a Licensed Product in
commercial quantities in the Territory.
OSI/Roche Development Costs shall include but are not limited to costs
of development including cost of studies on the toxicological, pharmacokinetic,
metabolic or clinical aspects of a Licensed Product conducted internally or by
individual investigators, or consultants, process development, process
improvement, qualification lots, costs for preparing, submitting, reviewing or
developing data or information necessary for the purpose of submission to a
governmental authority in order to obtain, expand and/or maintain approval of a
Licensed Product in the Territory.
OSI/Roche Development Costs shall include expenses for data management,
statistical designs and studies, document preparation, and other administration
expenses associated with the clinical testing program or post registration
clinical studies required to obtain, expand and/or maintain approvals in the
Territory.
OSI/Roche Development Costs shall not include patent costs,
pre-registration marketing costs (e.g. trademark costs, advertising agency
selection costs, pre-marketing studies), post-registration clinical and
marketing studies which are not conducted in order to obtain, expand and/or
maintain approval of a Licensed Product in the Territory.
OSI/Roche Development Costs shall include a lump sum equivalent to **
of the sum of the development costs of Roche and of OSI as defined above, in
lieu of General and Administrative Costs.
In determining OSI/Roche Development Costs, each Party will use its
respective project accounting systems with the purpose of tracking costs as much
as possible on a indication-by-indication basis, and will review and approve its
respective project accounting systems and methodologies with the other Parties.
In general, these project accounting systems report actual time spent on
specific projects, applying the actual labor costs, capture actual costs of
specific projects and allocate other expenses to projects.
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C.2 DEVELOPMENT ALLOCABLE OVERHEAD.
Shall mean costs incurred by a Party or for its account which are
attributable to a Party's supervisory services, occupancy costs, payroll,
information systems, human resources or purchasing functions and which are
allocated to the development activities based on a space occupied or headcount
or other activity-based method. Development Allocable Overhead shall not include
any costs attributable to general corporate activities including, by way of
example, executive management, investor relations, business development, legal
affairs and finance.
C.3 OSI/ROCHE DEVELOPMENT PROGRAM.
In addition to the Global Development Plan as defined in the Tripartite
Agreement, the Parties shall agree on a OSI/Roche Development Program
encompassing activities for mutually approved indications of a Licensed Product
in the Territory which are not included in the Global Development Plan. The
parties shall conduct the OSI/Roche Development Program in accordance with
annual budgets in U.S. Dollars and shall share OSI/Roche Development Costs
provided that they relate to activities derived from the OSI/Roche Development
Program.
C.4 BUDGETING OSI/ROCHE DEVELOPMENT COSTS.
The development plans and budgets for a given Licensed Product shall be
prepared on an indication-by-indication basis, for at least ** calendar quarters
in advance and shall be updated as a rolling development budget whenever needed
quarterly if changes in the Development Program so require it, but at least on
an annual basis before September 15th of each year.
The rolling development budget shall identify activities in sufficient
detail as agreed upon between the Parties to allow an appropriate monitoring of
expenses versus budget.
C.5 CHARGING OSI/ROCHE DEVELOPMENT COSTS.
The OSI/Roche Development Program and rolling development budget as
agreed by the Parties for the Licensed Product shall be the reference for
charging and sharing OSI/Roche Development Costs.
The responsibility for the consolidated reporting of the OSI/Roche
Development Costs shall be with Roche, in close cooperation with OSI. The
Parties shall determine the structure and the level of details which shall apply
to report their incurred OSI/Roche Development Costs for consolidation by Roche,
taking into consideration the level of details which shall apply to report the
Global Development Costs as per the Tripartite Agreement. This will be the basis
for OSI/Roche Development Program accounting and determining of payments between
the Parties.
The Clinical Supplies for clinical studies of the OSI/Roche Development
Program shall be charged as material costs, at Fully Burdened Manufacturing Cost
(excluding General and Administrative Costs), whether supplied by a Party or by
a Third Party. Fully Burdened Manufacturing Cost means one hundred percent
(100%) of a Party's manufacturing cost (in accordance with the Party's
accounting policies consistently applied), which shall comprise the cost of
goods produced as determined by the Party manufacturing or contracting with a
Third
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Party for each stage of the manufacturing process in accordance with IAS
consistently applied by such Party, including product quality assurance/control
costs, applicable Allocable Overhead, and other costs borne by the Party for
transport, customs clearance and storage of product at the request of the other
Party prior to the time of sale (i.e., freight, customs, duty and insurance).
C.6 REPORTING AND CONSOLIDATING OSI/ROCHE DEVELOPMENT COSTS.
OSI/Roche Development Costs shall be reported as early as possible, but
no later than ** days after the last day of the calendar quarter in question,
and shall separately identify the quarterly and year-to-date cumulative figures.
Each Party shall report OSI/Roche Development Costs in a manner consistent with
its project accounting system.
As early as possible, but no later than ** days after the last day of
the calendar quarter OSI will provide Roche with financial statements for its
activities, prepared in accordance with the terms contained in this Exhibit C in
order for Roche to prepare the consolidated reports. No later than ** days after
the last day of the calendar quarter Roche shall provide OSI with a copy of a
reconciliation statement identifying on an indication-by-indication basis the
OSI/Roche Development Costs and the calculation serving as the basis of
determining payments between the Parties. Each quarterly report will be
accompanied by and include reasonable documentation which itemizes and explains
the costs incurred as to allow comparison to the annual budget and provide
details as agreed upon by the Parties, in U.S. Dollars in a manner consistent
with the amounts budgeted for such activities.
C.7 SHARING OF OSI/ROCHE DEVELOPMENT COSTS - PAYMENTS BETWEEN THE
PARTIES.
OSI/Roche Development Costs will be shared pursuant to Section 4.3 of
this Agreement.
A settlement balancing payment will be invoiced quarterly to one of the
Parties, no later than ** days after the last day of the quarter, such that each
Party bears its proportionate share of the OSI/Roche Development Costs. The
Parties shall meet on an annual basis no later than ** days after the last day
of the year in question and a "true-up" of the calendar year actual OSI/Roche
Development Costs and its sharing between the Parties shall be presented for
approval. A corrective settlement payment may be issued as a consequence of the
final decision taken by the Parties. Such yearly corrective settlement payment
will be approved and invoiced as early as possible, but no later than ** days
after the last day of the year in question.
Any payment which is not paid before ** days from receipt of an invoice
will bear interest, to the extent permitted by applicable law, at the average
one-month European Interbank Offered Rate (=EURIBOR) as reported by Datastream
(or a successor or similar organization) from time to time, calculated on the
number of days such a payment is overdue.
C.8 AUDITS AND INTERIM REVIEWS.
The parties shall maintain and cause the third parties acting for their
account to maintain books of account and complete and accurate records
pertaining to the OSI/Roche Development
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Costs in sufficient detail to permit to confirm the correct calculation of the
OSI/Roche Development Costs.
At a party's ("Auditing Party") request, the other party ("Audited
Party") will cause its independent certified public accountants to prepare
abstracts of its relevant business records for review by the Auditing Party. **
Such auditing shall not be requested to be performed more frequently
than once per calendar year nor more frequently than once with respect to
records covering any specific period of time, shall be performed upon no less
than thirty (30) days prior written notice to the Audited Party, during the
Audited Party's normal business hours and shall not commence later than two (2)
years following the end of the period requested to be audited. All information,
data, documents and abstracts herein referred to shall be used for the sole
purpose of verifying compliance with this Agreement, shall be treated as
Confidential Information subject to the obligations of this Agreement and need
neither be retained more than one (1) year after completion of an audit hereof,
if an audit has been requested; nor more than three (3) years from the end of
the calendar year to which each shall pertain; nor more than one (1) year after
the date of termination of this Agreement. Audit results shall be shared by
Roche and OSI.
The Auditing Party will bear the full cost of the preparation of
abstracts and any such audit unless such abstracts or audit discloses an
underpayment to the Auditing Party of more than ** from the amounts paid for the
entire audited period. The Audited Party shall (1) promptly pay any underpayment
due the Auditing Party and, (2) if the underpayment due to the Auditing Party is
more than ** of the amount paid, bear the full reasonable cost of such audit.
Any overpayment by the Audited Party shall be deducted from the next payment due
the Auditing Party under Section 4 of this Agreement or, if no such further
payments are due promptly reimbursed by the Auditing Party.
The failure of a Party to request verification of any calculation of
OSI/Roche Development Costs during the period when records have to be retained
shall be considered acceptance of the accuracy of such reporting by such Party.
C.9 START OF OPERATIONS AND EFFECTIVE ACCOUNTING DATE TERMINATION.
Operation of the OSI/Roche Development Program will be deemed to have
commenced as of the Effective Date of the Agreement. Costs and expenses incurred
prior to such date are not chargeable to the OSI/Roche Development Costs.
For reporting and accounting purposes with respect to the OSI/Roche
Development Costs, the effective termination date of the Agreement will be the
nearest month end to which such termination takes place.
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