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EXHIBIT 10.2
Letter Agreement dated as of April 1, 1998 between Alteon Inc. and
Xxxxxxx X. Xxxxxx Laboratories, Inc.
[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO
INDICATE THAT CONFIDENTIALITY HAS BEEN REQUESTED FOR THIS
CONFIDENTIAL INFORMATION. THE CONFIDENTIAL PORTIONS HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
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ALTEON INC.
000 XXXXXXXX XXXXX
XXXXXX, XXX XXXXXX 00000
April 1, 1998
Xxxxxxx Xxxxxx, Ph.D.
Xxxxxxx X. Xxxxxx Laboratories, Inc.
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Dear Xxxx:
Alteon Inc. ("Alteon") wishes to retain the services of the Xxxxxxx X.
Xxxxxx Laboratories, Inc. ("Xxxxxx"), and Xxxxxx is willing to provide its
services to Alteon, in connection with the conduct of the Research Program (as
such term is defined herein), upon the terms and conditions set forth in this
letter agreement (this "Agreement"). This Agreement sets forth the terms of the
agreement between Alteon and Xxxxxx regarding research services that Xxxxxx will
provide to Alteon in connection with the Research Program.
1. RESEARCH PROGRAM.
1.1 Scope. During the term of this Agreement, Xxxxxx shall conduct such
a research program with respect to (i) advanced glycosylation endproducts, and
(ii) glucose lowering agents (predominantly the ALT-4000 series), exclusive of
those the primary focus of which is the glucose lowering activity of cytokines
(collectively, the "Field"), as the parties may agree upon in writing, from time
to time (the "Research Program").
1.2 Research Plans. As of the date of this Agreement, and as of each
January 1 thereafter during the term of the Research Program, the parties shall
prepare, in form and substance mutually acceptable to each party, a written
detailed description of the specific activities to be undertaken during the
upcoming year in connection with the Research Program (each such description, an
"Annual Research Plan"), which shall include a reasonably detailed description
of the goals and scope of such research. The Annual Research Plan through
December 31, 1998 shall be prepared within 90 days after the date of this
Agreement. After Alteon has [confidential treatment requested]
the parties shall discuss expansion of the scope of the Research
Program and of the then current Annual Research Plan. In addition, the parties
may revise any Annual Research Plan, from time to time, by mutual agreement. If
the parties fail to agree on an Annual Research Plan, (i) Alteon shall
nevertheless continue to fund the Research Program in accordance with Section
2.1, and (ii) Xxxxxx shall nevertheless continue to conduct the Research Program
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Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 2
in accordance with the goals and scope of such research as determined by Alteon,
provided that such goals and scope shall be within the scope of the level of
funding to be provided by Alteon and within the scope of the Research Program
conducted to date (or, with respect to the first year of the Research Program,
within the scope of the Research Program agreed upon in writing by the parties
prior to the execution of this Agreement).
1.3 Conduct of Research Program. During the term of the Research
Program, so long as Alteon is providing funding pursuant to Section 2.1, Xxxxxx
shall:
(a) Undertake the Research Program, as set forth in the
applicable Annual Research Plan, and such other activities which, from time to
time, the parties agree are necessary for the commercial success of the Research
Program;
(b) Use all reasonable efforts to perform the work set out for
Xxxxxx to perform in the applicable Annual Research Plan, using personnel with
sufficient skills and experience, together with sufficient equipment and
facilities, to carry out its obligations under the Research Program and to
accomplish the objectives of the Research Program;
(c) Conduct the Research Program in good scientific manner,
and in compliance in all material respects with all requirements of applicable
laws, rules and regulations, and all other requirements of applicable current
good laboratory practices to attempt to achieve the objectives of the Research
Program efficiently and expeditiously;
(d) Maintain all government and third party licenses, permits
and approvals necessary for Xxxxxx'x achievement of the objectives of the
Research Program;
(e) Furnish Alteon with fully-detailed, written reports on all
activities under the Research Program during each six-month period during the
term of the Research Program or the term of the Research Program, as the case
may be, including all relevant information related to the Results and Inventions
(as such terms are defined herein) thereunder. Xxxxxx shall furnish such reports
within 30 days after the end of each six-month period during the term of the
Research Program and within 30 days after the expiration or termination of the
Research Program;
(f) Promptly provide an invention disclosure report to Alteon
with respect to any Invention (as such term is defined herein); and
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Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 3
(g) Allow representatives of Alteon, upon reasonable notice,
during normal business hours and for periods of reasonable duration, to (i)
visit the facilities where the Research Program is being conducted by Xxxxxx,
and (ii) consult informally, during such visits and by telephone, with Xxxxxx
personnel performing work on the Research Program.
Alteon acknowledges that during the term of this Agreement, Xxxxxx will continue
to undertake research activities for the benefit of third parties; provided,
however, that during the term of this Agreement, Xxxxxx shall not undertake any
activities in the Field in cooperation with, or for the benefit of, any third
party. Subject to the foregoing, Xxxxxx will use its reasonable efforts to
allocate its personnel and other resources among Alteon and such third parties
in a fair and equitable manner, consistent with the relative size, scope and
importance of such respective activities to Alteon and each of such third
parties, as determined by Xxxxxx in its reasonable discretion.
1.4 Availability of Xx. Xxxxxx and Xx. Xxxxxx. During the term of this
Agreement, Xxxxxx will make each of Xx. Xxxxxxx Xxxxxx and Xx. Xxxxx Xxxxxx
available, for such periods of time as are reasonably necessary, to perform
and/or supervise the performance of Xxxxxx'x obligations under this Agreement.
By executing this Agreement where indicated below, each of Xx. Xxxxxx and Xx.
Xxxxxx confirms that his provision of such services will not conflict with any
agreements he now has, or may have during the term of this Agreement, with any
third party.
1.5 Records. Xxxxxx shall maintain records, in sufficient detail and in
good scientific manner, which shall be complete and accurate and shall fully and
properly reflect all work done under this Agreement and the Results (as such
term is defined herein), including all data in the form required under all
applicable laws and regulations. Alteon shall have the right, during normal
business hours and upon reasonable notice, to inspect and copy all such records
of Xxxxxx. All such records shall constitute Confidential Information (as such
term is defined herein) of Alteon.
1.6 Term of Research Program. The initial term (the "Initial Term") of
the Research Program shall commence as of the date of this Agreement and shall
continue for a period of three years, unless sooner terminated pursuant to the
terms of this Agreement. Following the expiration of the Initial Term and of
each extension period referred to in this sentence, the term of this Agreement
automatically shall be extended for a period of one year thereafter, subject to
termination pursuant to the terms of this Agreement.
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Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 4
2. FUNDING; ADDITIONAL CONSIDERATION.
2.1 Budget; Payment. Alteon shall provide funding to Xxxxxx for the
conduct of the Research Program in an amount determined each calendar year or,
in connection with the commencement or expiration of the term of the Research
Program, the relevant portion of each calendar year (each such amount, an
"Annual Budget") in conjunction with the formulation of the Annual Research Plan
for such year or portion of a year, up to a maximum amount of $400,000 per
calendar year (pro rated for any portion of a year during the term of this
Agreement). After Alteon has [confidential treatment requested]
such maximum amount will be $750,000 (pro rated for any portion of a
year during the term of this Agreement). An Annual Budget may be modified from
time to time, upon the parties' agreement, and shall be modified, as
appropriate, in connection with any modification of an Annual Research Plan.
Alteon shall reimburse Xxxxxx, in an amount not to exceed the applicable Annual
Budget, for all costs and expenses actually incurred by Xxxxxx in connection
with performance of its obligations under this Agreement in the following
manner:
(a) Not later than the first day of each calendar quarter
during the period covered by an Annual Budget, Alteon shall pay Xxxxxx, in
advance, one-quarter of the total amount of such Annual Budget.
(b) Within 90 days after the end of the period covered by each
Annual Budget, Xxxxxx shall provide Alteon with an accounting (an "Annual
Accounting") of costs and expenses incurred by it Xxxxxx connection with the
performance of its obligations under this Agreement during such period.
(c) In the event an Annual Accounting indicates that the costs
and expenses incurred by Xxxxxx were less than the total amount of the
applicable Annual Budget paid by Alteon, then (i) if the Research Program has
not then terminated, Alteon shall be entitled to a credit against payments due
under Section 2.1(a) during the year in which such Annual Accounting is
delivered (and during succeeding years, if necessary) in the amount of such
difference; or (ii) if the Research Program has then terminated, Xxxxxx shall
pay Alteon the amount of such difference at the time the Annual Accounting is
delivered.
Xxxxxx shall not incur expenses in excess of the applicable Annual Budget,
except to the extent that Alteon has approved such excess expenses. Alteon shall
reimburse Xxxxxx for all such expenses incurred by Xxxxxx that have been so
approved. Except as provided
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Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 5
in the two preceding sentences, in no event shall Xxxxxx be required to incur
expenses in excess of the applicable Annual Budget.
2.2 Recordkeeping; Audit. During the term of this Agreement and for a
period of three years thereafter, Xxxxxx shall keep complete and accurate
records pertaining to all costs and expenses incurred by it in connection with
the performance of its obligations under this Agreement. At the request and
expense of Alteon, Xxxxxx shall permit Alteon or an independent certified public
accountant appointed by Alteon, at reasonable times and upon reasonable notice,
to examine such records in order to determine the correctness of all amounts
paid by Alteon pursuant to Section 2.1(a). If, as a result of any such
inspection of records, it is shown that the amounts paid by Alteon were greater
than the amounts that should have been paid, then Xxxxxx shall pay to Alteon the
amount necessary to eliminate any such discrepancy within 30 days after Alteon's
demand therefor. If, as a result of any such inspection of records, it is shown
that the amounts paid by Alteon were less than the amounts that should have been
paid, then Alteon shall pay to Xxxxxx the amount necessary to eliminate any such
discrepancy within 30 days after Xxxxxx'x demand therefor.
2.3 Grant of Options.
(a) In partial consideration of the services that Xxxxxx
renders pursuant to this Agreement, Alteon will xxxxx Xxxxxx options to purchase
up to 500,000 shares of Common Stock of Alteon ("Common Stock") as provided in
this Section 2.3.
(b) Subject to Section 2.3(c), Alteon will xxxxx Xxxxxx an
option to purchase [confidential treatment requested] shares of Common Stock, at
an exercise price of $8.75 per share, upon
[confidential treatment requested]
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April 1, 1998
Page 6
(c) Upon a change in control of Alteon, as set forth on
Exhibit A attached, Alteon will xxxxx Xxxxxx an option to purchase, at an
exercise price of $8.75 per share, that number of shares of Common Stock equal
to the difference obtained by subtracting from 500,000 the aggregate number of
shares of Common Stock underlying options previously granted by Alteon pursuant
to Section 2.3(b). The options granted pursuant to this Section 2.3(c) shall be
fully vested and exercisable upon the issuance thereof. Following any grant of
options pursuant to this Section 2.3(c), no additional options shall be granted
pursuant to Section 2.3(b).
(d) The granting of options pursuant to this Section 2.3 and
Section 4.3 will be evidenced by Alteon's issuance of stock option agreements
with substantially similar provisions to those contained in stock option
agreements issued by Alteon to evidence options issued pursuant to Alteon's 1995
Stock Option Plan, except that the options issued under this Agreement shall not
be issued under such Plan. The granting of such options shall survive the
expiration or earlier termination of this Agreement.
3. MATERIAL TRANSFER.
3.1 Material Transfer. In order to facilitate the Research Program,
each party (the "transferring party") may provide to the other party (the
"receiving party") certain biological materials or chemical compounds
(collectively, "Substances") owned by or licensed to the transferring party for
use by the receiving party in furtherance of the Research Program. All
Substances delivered to the receiving party (i) shall remain the sole property
of the transferring party, (ii) shall be used only in furtherance of the
Research Program and solely under the control of the receiving party, (iii)
shall not be used by or for the benefit of, or delivered to, any third party
without the prior written consent of the transferring party, and (iv) shall not
be used in research or testing involving human subjects. The Substances supplied
under this Section 3 must be used with prudence and appropriate caution in any
experimental work. THE SUBSTANCES PROVIDED, IF ANY, ARE PROVIDED "AS IS" AND
WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE. Each party acknowledge that the receiving party will be using the
Substances only for research and development purposes as contemplated by this
Agreement and not for any commercial purposes.
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April 1, 1998
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4. RESULTS AND INVENTIONS.
4.1 Ownership; Patents.
(a) "Results" shall mean all data, information and other
results arising from the Research Program. "Inventions" shall mean all
inventions, discoveries, improvements or other technology that relate to the
Field, whether or not patentable, and any patent applications or patents based
thereon, conceived or reduced to practice by employees or third parties acting
on behalf of Xxxxxx, arising from the Research Program. Notwithstanding any
other provision of this Agreement, all Results and Inventions shall be owned
solely by Alteon.
(b) Alteon shall be responsible for the filing, prosecution
and maintenance of all patent applications and patents that relate to
Inventions, through patent counsel chosen at its sole discretion and at Alteon's
sole cost and expense, in accordance with any applicable determinations made
under Section 4.2.
4.2 Patent Committee.
(a) Within 90 days after the date of this Agreement, each of
the parties shall appoint three individuals who will serve on a committee (the
"Patent Committee") that will be responsible for determining whether Alteon will
seek and maintain patent protection with respect to any Invention (any Invention
as to which the Patent Committee determines protection is to be sought, a
"Selected Invention"), and if so, whether such protection should be sought by
means of an application for Original Letters Patent or as a substitution,
extension, renewal, continuation, continuation-in-part, division,
patent-of-addition and/or reissue of any previously issued letters patent or any
previously filed patent application, as the case may be (and, in connection with
any such determination, whether stock options should be issued pursuant to
Section 2.3(b)). The criterion on which the Patent Committee will base
determinations as to whether to seek patent protection with respect to an
Invention will be the material commercial benefit to Alteon of any such
Invention. Any determination of the Patent Committee as to whether to seek such
protection by means of an application for Original Letters Patent or otherwise
shall be consistent with, and subject to, the overall patent strategy formulated
for Alteon by its patent counsel, as may be amended from time to time. All of
the Patent Committee representatives appointed by one party shall have one vote,
collectively. Each party may replace its representatives on the Patent Committee
from time to time upon notice to the other party. A quorum for purposes of
meetings of the Patent Committee shall require the presence of at least two
Alteon members and two Xxxxxx members.
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April 1, 1998
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(b) In the event the Patent Committee cannot resolve any issue
as result of deadlock, the members of the Patent Committee shall refer such
issue to an umpire, selected by the Patent Committee, who has an adequate
background in science and business to permit such umpire to resolve such issue.
In the event the Patent Committee becomes deadlocked when selecting an umpire,
each party shall designate one selector, and the two selectors shall select the
umpire. The decision of any such umpire shall be final and binding upon, and
unappealable by, the parties. The parties shall share equally all costs and
expenses of any such umpire. For the purpose of this Section 4.2(b), "deadlock"
will mean (i) with respect to any matter considered and voted upon by the Patent
Committee, that one Party votes in favor of such matter and the other Party does
not vote in favor of such matter, or (ii) a quorum cannot be established for the
Patent Committee to vote on a matter.
4.3 Abandonment by Alteon.
(a) If Alteon fails to commence (within 180 days after an
affirmative determination under Section 4.2), or abandons, prosecution of a
patent application(s) or maintenance of a patent(s) with respect to a Selected
Invention (an "Abandonment"), Alteon shall notify Xxxxxx of same. Thereafter,
Xxxxxx shall be entitled to give Alteon a notice demanding that Alteon commence
or re-commence, as the case may be, such prosecution (a "Demand Notice").
Following receipt of a Demand Notice, Alteon shall either:
(i) Refer the Abandonment to the Patent Committee, by
written notice given within 90 days after delivery of such Demand Notice.
Promptly after any such referral, the Patent Committee shall make a further
determination, in accordance with Section 4.2, as to whether Alteon should
continue to seek and maintain patent protection with respect to such Selected
Invention. If the Patent Committee or the umpire, as the case may be, determines
that Alteon should not continue to seek and maintain such patent protection,
then Alteon shall have no further obligation to do so. If the Patent Committee
or the umpire, as the case may be, determines that Alteon should continue to
seek and maintain such patent protection, Alteon shall commence or recommence,
and shall diligently continue, seeking and maintaining such protection within 90
days after the date of such determination;
(ii) Commence or re-commence, and diligently
continue, seeking and maintaining such protection within 90 days after delivery
of such Demand Notice; or
(iii) Issue to Xxxxxx, within 90 days after delivery
of such Demand Notice, an option to purchase [confidential
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Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 9
treatment requested] shares of Common Stock, at an exercise price of $8.75 per
share. Following the issuance of such an option, Alteon shall have no further
obligation to seek and maintain such patent protection.
(b) In the event that Alteon breaches any obligation under
this Section 4.3, it shall issue to Xxxxxx, as Xxxxxx'x sole and exclusive
remedy for such breach, an option to purchase [confidential treatment requested]
shares of Common Stock, at an exercise price of $8.75 per share; provided,
however, that Alteon shall not issue pursuant to this Section 4.3 options to
purchase more than [confidential treatment requested] shares of Common Stock
with respect to any one Selected Invention; and provided, further, that
following the issuance of such an option with respect to a Selected Invention,
Alteon shall have no further obligation to seek and maintain patent protection
with respect to such Selected Invention.
5. CONFIDENTIALITY; PUBLICATION.
5.1 Definition. For purposes of this Agreement, "Confidential
Information" of one party shall mean any information furnished to the other
party or its affiliates by the disclosing party or its affiliates in connection
with this Agreement; provided, however, that the Results and Inventions shall
constitute Confidential Information of Alteon and shall not constitute
Confidential Information of Xxxxxx.
5.2 Confidentiality Obligations. Except to the extent necessary for the
performance of obligations hereunder or otherwise agreed in writing, the parties
agree that, during the conduct of the Research Program and completion of all
reports relating thereto, and for three years thereafter, the receiving party
and its affiliates shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose the Confidential
Information of the other party, except to the extent that it can be established
by the receiving party by competent proof that such information: (a) is or
hereafter becomes generally available to the public other than by reason of any
default with respect to a confidentiality obligation; (b) was already known to
the recipient as evidenced by prior written documents in its possession; or (c)
is disclosed to the recipient by a third party who is not in default of any
confidentiality obligation to the disclosing party. If any party is required to
make any disclosure of the other party's Confidential Information in compliance
with applicable laws or regulations or order by a court or other regulatory body
having competent jurisdiction, it shall, except where impracticable for
necessary disclosures, for example to physicians conducting studies or to health
authorities, give reasonable advance notice to the other party of such
disclosure
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April 1, 1998
Page 10
requirement and, except to the extent inappropriate in the case of patent
applications, shall use its best efforts to secure confidential treatment of
such Confidential Information required to be disclosed.
5.3 Xxxxxx Employees. Xxxxxx shall cause each of its and its
affiliates' employees and agents who perform services pursuant to this Agreement
to execute and deliver an Invention Assignment and Confidentiality Agreement
with respect to Inventions. Such agreement shall be in used by Xxxxxx generally,
provided that such form contains substantially the same provisions as those set
forth in Section 5.2.
5.4 Publication. During the term of this Agreement and for a period of
one year thereafter, in the event that Xxxxxx or any of its affiliates wishes to
make any publication or otherwise disseminate any of the Results or Inventions,
it shall provide copies of any abstracts, papers or manuscripts to Alteon for
review and comment at least 30 days prior to the date of submission for
publication or presentation. If Alteon determines that such proposed publication
or presentation contains patentable subject matter that requires protection,
then Alteon may require the delay of publication or presentation for a period
not to exceed 45 days for the purpose of filing patent applications. If Alteon
identifies Confidential Information of Alteon in such proposed publication or
presentation, Xxxxxx shall delete such Confidential Information from same.
6. INDEMNIFICATION; INSURANCE.
6.1 Indemnification by Alteon. Alteon will indemnify, defend and hold
harmless Xxxxxx and its directors, officers, agents and employees, from and
against any third party demands, suits, claims, actions or proceedings that may
be brought or instituted, and all judgments, damages, liabilities, costs and
expenses (including the fees of attorneys and other professionals) resulting
therefrom (any of the foregoing, a "Claim"), arising out of:
(a) Alteon's use of the Results, Inventions or any other data
or information arising under the Research Program; or
(b) property damage, personal injury or death arising out of
or in connection with Xxxxxx'x use of any Substance as contemplated by this
Agreement in accordance with Alteon's instructions.
Notwithstanding the foregoing, Alteon will not be required to provide
indemnification under this Section 6.1 to the extent that
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April 1, 1998
Page 11
any Claim is covered by an obligation of Xxxxxx to provide indemnification under
Section 6.2.
6.2 Indemnification by Xxxxxx. Xxxxxx will indemnify, defend and hold
harmless Alteon and its directors, officers, agents and employees, from and
against any Claim, arising out of:
(a) the failure by Xxxxxx or any Xxxxxx personnel (including
employees, agents or independent contractors) involved in the Research Program
to adhere materially to the terms of the applicable Annual Research Plan(s) or
Alteon's instructions;
(b) any grossly negligent or wrongful act or omission, or
willful malfeasance, of Xxxxxx or any Xxxxxx personnel (including employees,
agents or independent contractors) involved in the Research Program; or
(c) property damage, personal injury or death arising out of
or in connection with Alteon's use of any Substance as contemplated by this
Agreement in accordance with Xxxxxx'x instructions.
6.3 Conditions Upon Obligations to Indemnify.
(a) Indemnification pursuant to Section 6.1 or 6.2 is subject
to the following conditions, to the extent that failure to satisfy such
conditions would have a material adverse effect upon the indemnifying party (the
"Indemnitor"):
(i) The party entitled to indemnification under
such Section (the "Indemnitee") shall have adhered to the terms and conditions
of the Research Program and any agreed upon amendments thereto;
(ii) The Indemnitee shall have complied with any U.S.
Food and Drug Administration or other governmental requirements, laws, rules or
regulations applicable to the Research Program; and
(iii) The Indemnitee shall not have committed any
negligent act or omission or willful misconduct related to the performance of
the Research Program.
(b) In addition, indemnification pursuant to Section 6.1 or
6.2 is subject to the following conditions:
(i) The Indemnitee shall immediately notify the
Indemnitor of any Claim made against the Indemnitee, and shall provide all
pertinent data surrounding such Claim;
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April 1, 1998
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(ii) The Indemnitee shall assist the Indemnitor and
fully cooperate in the gathering of information with respect to the time, place
and circumstances related to the Claim, and in obtaining the names and addresses
of the injured parties and available witnesses; and
(iii) The Indemnitee shall fully cooperate with the
Indemnitor and authorize the Indemnitor to carry out sole management and defense
of any Claim or action covered by this Agreement (including, without limitation,
the right to settle such Claim at the Indemnitor's sole discretion, except to
the extent that such settlement would have an adverse effect upon the rights or
property of the Indemnitee), and the Indemnitee shall not compromise or settle
any such Claim or action without the Indemnitor's prior written approval.
6.4 Insurance. Xxxxxx shall maintain in full force and effect through
the term of the Research Program (and following any termination of the Research
Program, to cover any Claims arising therefrom) insurance coverage for: (i)
general liability; and (ii) worker's compensation, each such coverage in amounts
as required by applicable law(s) and appropriate to the conduct of Xxxxxx'x
business activities, the services contemplated by the Research Program and
Xxxxxx'x indemnification obligations under this Section 6. Xxxxxx shall cause
Alteon to be added as an additional insured on any policy obtained pursuant to
this Section 6.4. Upon the request of Alteon, copies of certificates of
insurance will be made available to Alteon and shall provide for 30 days' prior
written notice to Alteon in the event of cancellation or any material change in
such coverage.
7. TERMINATION.
7.1 By Either Party. Either party may terminate this Agreement at any
time upon six months' prior notice to the other party.
7.2 By Alteon. Alteon may terminate this Agreement due to the
unavailability of either of Xx. Xxxxxx or Xx. Xxxxxx due to his departure from
Xxxxxx, death or permanent disability upon 60 days' prior notice to Xxxxxx.
7.3 With Cause. In the event that either party (the "breaching party")
fails to comply with any material obligation under this Agreement (including,
without limitation, Xxxxxx'x failure to use reasonable efforts to proceed with
the Research Program, and Xxxxxx'x failure to assure the availability of each of
Xx. Xxxxxx or Xx. Xxxxxx to perform and/or supervise the performance of Xxxxxx'x
obligations under this Agreement, except
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Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 13
when his unavailability is due to his departure from Xxxxxx, death or permanent
disability), such failure shall be deemed a breach of a material obligation of
the breaching party and shall entitle the other party (the "non-breaching
party") to give notice to the breaching party specifying the nature of the
default and requiring the breaching party to cure such default. If such default
is not cured within 60 days after the receipt of such notice (or, if such
default cannot be cured within such 60-day period, if the breaching party does
not commence and diligently continue actions to cure such default), the
non-breaching party shall be entitled, without prejudice to any of its other
rights under this Agreement and in addition to any other remedies available to
it at law or in equity, to terminate this Agreement by giving written notice to
the breaching party to take effect immediately upon delivery of such notice. The
non-breaching party's right to terminate this Agreement as provided in this
Section 7.3 shall not be affected in any way by its waiver or failure to take
action with respect to any previous default.
7.4 Effect of Termination.
(a) Upon any termination of this Agreement pursuant to Section
1.6 or this Section 7, Xxxxxx shall (i) promptly deliver to Alteon (A) for
copying, at Alteon's sole cost and expense, all data, reports, records and
materials in Xxxxxx'x possession or control which relate to the Research
Program, and (B) the Results and the Inventions; and (ii) furnish to Alteon all
unused Substances delivered pursuant to Section 3.
(b) In the event of termination by Alteon other than pursuant
to Section 7.3, Alteon shall be obligated to pay for all work performed by
Xxxxxx, as contemplated by Sections 2.1(a) and 2.1(b), up to the effective date
of termination and for reasonable costs associated with termination of the
Research Program, such as non-cancelable third party costs associated with the
Research Program that are the responsibility of Xxxxxx under the Annual Budgets.
Xxxxxx shall use its best efforts to terminate all obligations relating to the
Research Program, as soon as possible, to avoid incurring additional expenses.
In the event of termination by Alteon pursuant to Section 7.3, Alteon shall be
obligated to pay only for all work performed by Xxxxxx, as contemplated by
Sections 2.1(a) and 2.1(b), up to the effective date of termination.
(c) Sections 1.3(e), 1.3(f) (with respect to disclosures that
should have been made at the time of termination of this Agreement), 1.5, 2.2,
2.3(b), 3.1, 4, 5, 6, 8.6, 8.7 and 8.8 shall survive the termination of this
Agreement.
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8. MISCELLANEOUS.
8.1 Relationship of Parties. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, employer-employee or joint
venture relationship between the parties. No party shall incur any debts or make
any commitments for the other, except to the extent, if at all, specifically
provided herein.
8.2 Assignment. This Agreement may not be assigned, and the obligations
hereunder cannot be delegated, in whole or in part, by Xxxxxx without the prior
written consent of Alteon. This Agreement shall be binding upon the successors
and permitted assigns of the parties. Any assignment not in accordance with this
Section 8.2 shall be void.
8.3 Notices. All legal 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 address at the head of this letter (in the case of Alteon) or set forth
below (in the case of Xxxxxx) (or at such other address for a party as shall be
specified by like notice; provided, that notices of a change or address shall be
effective only upon receipt thereof).
8.4 Amendment. No amendment, modification or supplement of any
provision of this Agreement shall be valid or effective unless made in writing
and signed by a duly authorized officer of each party.
8.5 Waiver. No provision of this Agreement shall be waived by any act,
omission or knowledge of a party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by the waiving
party.
8.6 No Warranty; Maximum Liability.
(a) XXXXXX MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO
THE WORK PERFORMED HEREUNDER, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. ALL DELIVERABLES PROVIDED HEREUNDER ARE
PROVIDED "AS IS."
(b) In no event shall the out-of-pocket liability of Xxxxxx
under this Agreement exceed the aggregate amount of fees paid by Alteon to
Xxxxxx during the term of this Agreement.
8.7 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New Jersey without regard to
principles of conflicts of law.
16
Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 15
8.8 Alternative Dispute Resolution. Except with respect to breaches for
which a party is seeking injunctive relief and with respect to issues on which
the Patent Committee is deadlocked (which shall be resolved as provided in
Section 4.2(b)), all disputes between the parties relating to this Agreement or
the subject matter hereof which cannot be resolved by the parties, shall, upon
written notice by one party to the other, be submitted for settlement by means
of alternative dispute resolution, which can include moderated settlement,
minitrial, use of expert advisor mediation or non-binding arbitration, as
provided in the New Jersey Alternative Procedure for Dispute Resolution Act,
N.J.S.A. 2A:23A-1 et seq. (the "Act"). All proceedings for the alternative
resolution of a dispute (an "ADR Proceeding") shall be designed to conclude
within four months of the original notice and shall be held at a mutually
agreeable location or in New York City. If the parties cannot agree on the form
of ADR Proceeding to be used, then binding arbitration, with an independent
arbitrator acceptable to both parties, shall be used. The parties shall have 10
days after notice is received by the other party to mutually agree on an umpire
for the ADR Proceeding, who shall be selected from among the members of J-A-M-S
Endispute, located in Morristown, New Jersey. If the Parties cannot agree on the
umpire to be used within such period, J-A-M-S Endispute shall appoint one of its
members to serve as umpire for the ADR Proceeding. All fees and expenses
associated with the ADR Proceeding shall be divided equally between the parties;
provided that each party shall be responsible for such party's own attorneys'
fees and disbursements. The Act shall govern the procedures and methods for any
ADR Proceeding demanded or undertaken pursuant to this Agreement. The Parties
will cooperate with each other in causing the ADR Proceeding to be held in as
efficient and expeditious a manner as practicable.
8.9 Entire Agreement of the Parties. This Agreement, together with all
of the Exhibits attached, constitutes and contains the entire understanding and
agreement of the parties and cancels and supersedes any and all prior
negotiations, correspondence, understandings and agreements, whether oral or
written, between the parties with respect to the subject matter hereof.
8.10 Counterparts. This Agreement may be executed simultaneously in two
counterparts, either one of which need not contain the signature of more than
one party, but both such counterparts taken together shall constitute one and
the same agreement.
17
Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 16
8.11 Descriptive Headings. The descriptive headings of this Agreement
are for convenience only and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.
* * *
18
Xxxxxxx Xxxxxx, Ph.D.
April 1, 1998
Page 17
Please sign the enclosed copy of this letter to confirm our agreement,
which shall be effective as of the date hereof.
Sincerely,
ALTEON INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
------------------------
Title: Chief Executive Officer
-----------------------
Accepted and agreed to:
XXXXXXX X. XXXXXX LABORATORIES,
INC.
By: /s/ Xxxxxxx Xxxxxx, Ph.D.
--------------------------
Name: Xxxxxxx Xxxxxx, Ph.D.
Title: Director
Address:
000 Xxx Xxx Xxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Ph.D.
Fax No.: (___) ___-____
Consented and agreed to with respect to the rights and obligations of
Xx. Xxxxxxx Xxxxxx hereunder as of the date first set forth above.
/s/ Xxxxxxx Xxxxxx, Ph.D.
-------------------------
Xxxxxxx Xxxxxx, Ph.D.
Consented and agreed to with respect to the rights and obligations of
Xx. Xxxxx Xxxxxx hereunder as of the date first set forth above.
/s/ Xxxxx Xxxxxx
-------------------------
Xxxxx Xxxxxx, Ph.D.
19
EXHIBIT A
DEFINITION OF CHANGE IN CONTROL
For purposes of Section 2.3(c), a change in control of Alteon shall be
deemed to occur if:
(1) Alteon is merged with or into or consolidated with another
corporation or other entity under circumstances where the stockholders of Alteon
immediately prior to such merger or consolidation do not own after such merger
or consolidation shares representing at least 50% of the voting power of Alteon
or the surviving or resulting corporation or other entity, as the case may be;
(2) Alteon is liquidated or sells or otherwise disposes of
substantially all of its assets to another corporation or entity;
(3) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended) shall become the
beneficial owner (within the meaning of Rule 13d-3 under such Act) of 40% or
more of the Common Stock other than pursuant to a plan or arrangement entered
into by such person and Alteon or otherwise approved by the Board of Directors
of Alteon;
(4) during any period of two consecutive years, individuals
who at the beginning of such period constitute the entire Board of Directors of
Alteon shall cease for any reason to constitute a majority of the Board unless
the election or nomination for election by Alteon's stockholders of each new
director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period.
