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EXHIBIT 10.28
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AMENDED AND RESTATED RESEARCH AND LICENSE AGREEMENT
(Incorporating amendments to the Research and License Agreement made through
December 28, 1998 (the "Restatement Effective Date"))
This Amended and Restated Research and License Agreement (the "Agreement")
is effective as of March 31, 1996 (the "Effective Date"), by and between
Millennium Pharmaceuticals, Inc., a corporation organized and existing under the
laws of the State of Delaware and having its principal office at 000 Xxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Millennium") and Xxx Xxxxx and Company,
a corporation organized and existing under the laws of the State of Indiana and
having its principal place of business at Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxx 00000 (together with its Affiliates, "Lilly").
WHEREAS, Millennium is in the business of conducting research in the field
of human genomics, an objective of which is to discover potential biological
targets and assays for use in drug discovery, diagnostics and gene therapy.
WHEREAS, Lilly is in the business of discovering, developing and marketing
pharmaceuticals, diagnostics and animal health products.
WHEREAS, Lilly has substantial experience and expertise in assaying for and
developing drugs which are useful in various human disorders, and in developing
and commercializing protein therapeutics.
WHEREAS, Lilly is interested in funding and collaborating with Millennium
in discovering and developing assays to develop therapeutics in the area of
Oncology (defined hereinafter), in discovering and developing proteins to use as
therapeutics, and in obtaining rights to such technology for diagnostics and
gene therapy under specified circumstances.
WHEREAS, Lilly and Millennium entered into the Research and License
Agreement (the "Original Agreement") effective as of the Effective Date, as
amended by a certain Addendum to Research and License Agreement executed in May
1997.
WHEREAS, Lilly and Millennium are desirous of amending and restating the
terms of the Original Agreement, as amended.
NOW, THEREFORE, Millennium and Lilly agree as follows:
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Article I
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Definitions
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SECTION 1.1. GENERAL. When used in this Agreement, each of the following
terms shall have the meanings set forth in this Article.
SECTION 1.2. "Affiliate" means a) any corporation or business entity, of
which Lilly or Millennium, at the time in question, directly or indirectly owns
or controls fifty percent (50%) or more of the stock having the right to vote
for directors thereof or otherwise controls the management of the corporation or
business entity, or b) any corporation, individual or business entity which now
or hereafter directly or indirectly owns or controls fifty percent (50%) or more
of the stock of Lilly or Millennium having the right to vote for directors
thereof.
SECTION 1.3. "Analog Protein Drug" means a protein or polypeptide which
has been modified through a change in its primary structure resulting in a
functionally significant change (such as a change in its pharmacokinetic or
pharmacodynamic properties) to allow it to become a therapeutic Product
demonstrating relevant IN VITRO and IN VIVO activity. For purposes of this
definition, a polypeptide constituting the pharmacologically active fragment of
a protein, that has not been modified through a change in its primary structure
resulting in a functionally significant change, shall not be considered an
Analog Protein Drug.
SECTION 1.4. "Antisense Drug" means any drug or drug candidate which
consists of nucleic acid or a functional analog, derivative or homologue thereof
and which is complementary to a segment of DNA of a target gene or such target
gene's cognate RNA and which, upon delivery by any means, alters the
transcription, processing, elaboration, RNA expression, or protein production of
or by such target gene.
SECTION 1.5. "Candidate Gene" means (a) [**] which has been implicated in
a disease or condition in the Field, or (b) [**] in a disease or condition in
the Field. The gene must be implicated in the disease or condition in the Field
(i) by Millennium prior to the Effective Date or by Millennium, by Lilly or
jointly by the parties in the course of the Program and (ii) [**] the Candidate
Gene shall mean [**]; or (C) by any other method, including but not limited to
expression profiling or other cDNA technique (in which case it shall be
appropriately [**] ; all as determined in good faith by the Joint Management
Team. Notwithstanding the foregoing, a gene may be designated a Candidate Gene
pursuant to Section 5.6.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SECTION 1.6. "Candidate Protein Drug" means a Protein encoded by a
Candidate Gene or other Protein, the identification of which other Protein was
based upon the identification of a Candidate Gene, and which, in either case, is
potentially suitable for development into a therapeutic product.
SECTION 1.7. "Confidential Information" means all materials, Know-How or
other information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a party's technology, products,
business information or objectives, which is designated as confidential in
writing by the disclosing party, whether by letter or by the use of an
appropriate stamp or legend, prior to or at the time any such material, trade
secret or other information is disclosed by the disclosing party to the other
party. Notwithstanding the foregoing to the contrary, materials, Know-How or
other information which is orally, electronically or visually disclosed by a
party, or is disclosed in writing without an appropriate letter, stamp or
legend, shall constitute Confidential Information if the disclosing party,
within thirty (30) days after such disclosure, delivers to the other party a
written document or documents describing the materials, Know-How or other
information and referencing the place and date of such oral, visual, electronic
or written disclosure and the names of the persons to whom such disclosure was
made, provided, however, that any technical information disclosed at a meeting
of the Joint Management Team shall constitute Confidential Information unless
otherwise specified.
SECTION 1.8. "Contract Year" means the twelve (12) month period beginning
on the Effective Date, and each succeeding twelve (12) month period thereafter.
SECTION 1.9. "Diagnostic Product" means any diagnostic product in the
Field, in the form of a device, compound, kit or service discovered, or the
utility of which is discovered, or the development of which is undertaken, in
the course of the Program or the Lilly Development Program, using or
incorporating Millennium Field Know-How and/or Millennium Field Patent Rights.
SECTION 1.10. "Field" means the application in Oncology of:
(a) All genes located at chromosome [**] , including but not limited to
loss of [**] cancer [**], and [**] cancer [**];
(b) Mechanisms of [**] including but not limited to the association with
[**] such as [**] and the mechanism of action of factors that mediate
[**], including but not limited to [**];
(c) Mechanisms of [**] proliferative conditions including but not limited
to the discovery of novel genes implicated in the susceptibility,
progression
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
and metastasis of [**] cancer, analysis of [**] cells and variants of
these cells, and malignant tissues;
(d) All [**] mechanisms including but not limited to inhibition of [**]
activity; and
(e) All [**] mechanisms including but not limited to the inhibition of the
[**].
SECTION 1.11. "FTE" means a full time equivalent scientific person year
(consisting of a total of forty-seven (47) weeks or one thousand eight hundred
eighty (1,880) hours per year of scientific work on or directly related to the
Millennium Research Program), carried out by a Millennium employee, having at
least a Bachelor Degree in a science. Scientific work on or directly related to
the Millennium Research Program to be performed by Millennium employees can
include, but is not limited to, experimental laboratory work, recording and
writing of results, reviewing literature and references, holding scientific
discussions, managing and leading scientific staff, development and application
of bioinformatic tools related to the Millennium Research Program, and carrying
out project management duties.
SECTION 1.12. "Gene Therapy Drug" means any drug or drug candidate,
excluding an Antisense Drug, which consists of nucleic acid or a functional
analog, derivative or homologue thereof and which, upon delivery by any means,
provides a gene product encoded therein which is expressed.
SECTION 1.13. "Know-How" means any information, data and materials,
including organic compounds and biological materials such as cell lines, RNA,
DNA, DNA fragments, organisms, proteins, polypeptides, plasmids and vectors and
software, user's manuals and guides.
SECTION 1.14. "Lilly Development Program" means the development program to
be undertaken by Lilly during the term of the Millennium Research Program and
for [**] thereafter to discover and develop Products in the Field based on the
results arising from the Millennium Research Program and the Lilly Research
Program.
SECTION 1.15. "Lilly Field Know-How" means Know-How in the Field which is
necessary or useful in order to discover, develop, make, use, sell or seek
approval to market Products and, in particular, any such information, data or
materials that are necessary or useful to the discovery, development,
manufacture or use of and relating to the pharmacological, biological or
clinical properties of Products, and which is either (a) in Lilly's possession
on the Effective Date and to which Lilly has the right to grant licenses without
violating the terms of any agreement with a third
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
party, or (b) Know-How which Lilly develops or acquires in the course of the
Lilly Research Program or the Lilly Development Program.
SECTION 1.16. "Lilly Field Patent Right(s)" means a Patent Right within
the Field that is owned or controlled by Lilly and a Patent Right within the
Field as to which Lilly has the right to grant licenses or sublicenses without
violating the terms of any agreement or other arrangement with a third party, at
least one claim of which covers the making, using or selling of a Product or any
methods and substances that were at any time included in Lilly Field Know-How
that are useful in discovering Products, and which is developed or acquired in
the course of the Lilly Research Program or the Lilly Development Program. Lilly
Field Patent Rights are specifically excluded from the definition of Lilly Field
Know-How under this Agreement.
SECTION 1.17. "Lilly Research Program" means the research program, the
term of which is during the time that research at Millennium is funded by Lilly
pursuant to this Agreement, and which is to be undertaken by Lilly to discover
Products in the Field based on Millennium Field Know-How and Millennium Field
Patent Rights. For any specific compound, the Lilly Research Program shall not
extend beyond the time that such compound is [**] .
SECTION 1.18. "Major Market Countries" means the United States, Canada,
Japan, the United Kingdom, Germany, France, Spain and Italy.
SECTION 1.19. "Millennium Field Know-How" means Know-How in the Field
which is necessary or useful in order to discover, develop, make, use, sell or
seek approval to market Products and, in particular, any such information, data
or materials that are necessary or useful to the discovery, development,
manufacture or use of and relating to the pharmacological, biological, or
clinical properties of Products, other than information and biological samples
relating to human materials acquired or otherwise accessed by Millennium and
used in genetic analysis in the Program, and which is either (a) in Millennium's
possession on the Effective Date and to which Millennium has the right to grant
licenses without violating the terms of any agreement with a third party, or (b)
Know-How which Millennium develops or acquires in the course of the Millennium
Research Program, excluding generalized methods for conducting genomic research
and characterizing the function of genes.
SECTION 1.20. "Millennium Field Patent Right(s)" means a Patent Right
within the Field that is owned or controlled by Millennium and a Patent Right
within the Field as to which Millennium has the right to grant licenses without
violating the terms of any agreement or other arrangement with a third party, at
least one claim of
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
which covers the making, using or selling of a Product or any methods and
substances that were at any time included in Millennium Field Know-How that are
useful in discovering Products, and which is either (a) owned or controlled by,
or under license to, Millennium on the Effective Date, or (b) developed or
acquired in the course of the Millennium Research Program. Millennium Field
Patent Rights are specifically excluded from the definition of Millennium Field
Know-How under this Agreement.
SECTION 1.21. "Millennium Research Program" means the research program,
the term of which extends during the time that research is funded by Lilly
pursuant to this Agreement, and which is to be undertaken by Millennium using
genomic technology to discover and characterize Candidate Genes, Validated
Targets and Candidate Protein Drugs with potential utility for the development
of Products in the Field, as described in greater detail on APPENDIX A to be
attached to this Agreement within ninety (90) days after the Effective Date
(which APPENDIX A is subject to review and modification by the Joint Management
Team).
SECTION 1.22. "Modified Drug" means a compound in the Field which, (a)
[**], prior to or outside of the Program, was identified by [**] to its
development as a therapeutic product in the Field, and (b) was modified through
the use of [**] at any time during the term of the Program or the Lilly
Development Program. Modified Drug does not include any Candidate Protein Drug,
Peptido Mimetic, Analog Protein Drug, Small Molecule Drug, Gene Therapy Drug or
Antisense Drug.
SECTION 1.23. "Net Sales" means with respect to the Product, the gross
amount invoiced by Lilly, its Affiliates or sublicensees to unrelated third
parties for the Product, in the Territory, less:
(a) Trade, quantity and cash discounts actually allowed;
(b) Discounts, refunds, rebates, chargebacks, retroactive price
adjustments, and any other allowances which effectively reduce the net
selling price;
(c) Actual product returns and allowances;
(d) That portion of the net selling price associated with the cost of drug
delivery systems;
(e) Any tax imposed on the production, sale, delivery or use of the
product (excluding federal, state or local taxes based on income);
(f) Distribution expenses reasonably documented by Lilly; and
(g) Any other similar and customary deductions (as defined and accepted by
generally accepted accounting principles ("GAAP")), actually incurred.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Such amounts shall be determined from the books and records of the parties
maintained in accordance with GAAP, consistently applied.
In the event the Product is sold as part of a Combination Product, the Net
Sales from the Combination Product, for the purposes of determining royalty
payments, shall be determined by multiplying the Net Sales of the Combination
Product (as defined in the standard Net Sales definition) by the fraction, A/A+B
where A is the average sale price of the Product when sold separately in
finished form and B is the average sale price of the other product(s) sold
separately in finished form.
In the event that the average sale price of the Product can be determined
but the average sale price of the other product(s) cannot be determined, Net
Sales for purposes of determining royalty payments shall be calculated by
multiplying the Net Sales of the Combination Products by the fraction C/C+D
where C is the selling party's average sales price of the Product and D is the
difference between the average selling price of the Combination Product and the
average selling price of the Product. If the average sale price of the other
product(s) can be determined but the average price of the Product cannot be
determined, Net Sales for purposes of determining royalty payments shall be
calculated by multiplying the Net Sales of the Combination Products by the
following formula: one (1) minus C/C+D where C is the average selling price of
the other product(s) and D is the difference between the average selling price
of the Combination Products and the average selling price of the other
product(s). In no event, however, shall the Net Sales of Products be less than
fifty percent (50%) of the Net Sales of the Combination Products.
In the event that the average sale price of both the Product and the other
product(s) in the Combination Product cannot be determined, the Net Sales of the
Product shall be deemed to be equal to fifty percent (50%) of the Net Sales of
the Combination Product.
The Net Sales price for a Combination Product shall be calculated once each
calendar year and such price shall be used during all applicable royalty
reporting periods for the entire calendar year. When determining the average
sale price of a Product or product(s), the average sale price shall be
calculated using data arising from the twelve (12) months preceding the
calculation of the Net Sales price for the Combination Product. As used above,
the term "Combination Product" means any pharmaceutical product which comprises
the Product and other active compounds and/or ingredients.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SECTION 1.24. "Oncology" means preventative or therapeutic interventions
for malignant processes, including, without limitation, initiation, progression,
proliferation and metastasis and the development of benign processes that are
known, or become known, to become malignant processes, such as adenomas.
Oncology shall not mean the discovery of interventions for benign processes that
do not become malignant processes, including without limitation, fibroids. The
Joint Management Team shall make a good faith determination based on available
scientific data whether a benign process becomes known to become a malignant
process. Such determination shall be made by a majority vote of the Joint
Management Team. In the event that the Joint Management Team is equally divided
on the question of whether a benign process becomes known to become a malignant
process, such question shall be decided by a majority vote of a panel of three
(3) experts in the field of oncology, one expert selected by Millennium, another
expert selected by Lilly and the third expert selected by the two experts
selected by the parties. Notwithstanding the foregoing, a benign process that
(i) becomes known to become a malignant process after the Effective Date, and
(ii) is the subject of an agreement between Millennium and a third party that
was entered into prior to the time that such benign process became known to
become a malignant process and that precludes a collaboration between Millennium
and Lilly with respect to such benign process, shall not be included in
Oncology.
SECTION 1.25. "Patent Right(s)" means a patent or patent application and
all divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions, Supplementary Protection Certificates and foreign counterparts
thereof that is owned or controlled by Millennium or by Lilly, or a license to
the same to which either Millennium or Lilly has the right to grant a
sublicense.
SECTION 1.26. "Peptido Mimetic Drug" means a synthetic organic molecule
which is a mimetic of, or is designed or developed using medicinal, SAR or
combinatorial chemistry techniques to incorporate, key structural features of a
Candidate Protein Drug and which is a therapeutic product.
SECTION 1.27. "Product" means (a) any Candidate Protein Drug, Analog
Protein Drug, Small Molecule Drug, or Peptido Mimetic Drug discovered or the
development of which is undertaken (i) in the course of the Program, or (ii)
using Program Know-How and/or Program Patent Rights at any time during the term
of the Lilly Development Program, and which is sold for use as a human
pharmaceutical or animal health product, and (b) any Modified Drug, provided
that Products shall not include (a) Gene Therapy Drugs, subject to the option
set forth in Section 5.3, (b) Antisense Drugs, or (c) Diagnostic Products,
subject to the option set forth in Section 5.4.
SECTION 1.28. "Program" means, collectively, the Millennium Research
Program and the Lilly Research Program.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SECTION 1.29. "Program Know-How" means Millennium Field Know-How and Lilly
Field Know-How, collectively, whether or not it was developed or acquired solely
or jointly by Millennium and/or Lilly. Program Know-How includes but is not
limited to Candidate Genes, Validated Targets and Candidate Protein Drugs.
SECTION 1.30. "Program Patent Rights" means Millennium Field Patent Rights
and Lilly Field Patent Rights, collectively, whether or not it was developed or
acquired solely or jointly by Millennium and/or Lilly.
SECTION 1.31. "Project Team Status" means the point in the Lilly
Development Program when a potential Product has been [**].
SECTION 1.32. "Protein" means any of a class of high molecular weight
(i.e., weighing greater than [**]) polymer compounds composed of a variety of
amino acids joined by peptide linkages, including aggregates, hybrids and
fragments thereof, as well as naturally post-translationally modified variants
thereof (i.e., glycosylated proteins) and chemically modified versions thereof
(e.g., pegylated or liposomally encapsulated proteins).
SECTION 1.33. "Small Molecule Drug" means a small molecule therapeutic
product within the Field originating from a screen using a Validated Target,
other than a Candidate Protein Drug, an Analog Protein Drug, a Peptido Mimetic
Drug, a Modified Drug, a Gene Therapy Drug or an Antisense Drug.
SECTION 1.34. "Territory" means all countries of the world.
SECTION 1.35. "Validated Target" means a biological target which, based on
demonstrating relevant IN VITRO and IN VIVO activity, is appropriate for [**] ,
and which has been [**]. A Validated Target may be a Candidate Gene, a Protein
encoded by a Candidate Gene or other qualifying biological molecule in a
relevant biochemical pathway, the identification of which or the linkage with a
disease is based upon the identification of a Candidate Gene.
SECTION 1.36. "Valid Claims" means any claim(s) pending in a patent
application or in an unexpired patent which has not been held unenforceable,
unpatentable or invalid by a decision of a court or other governmental agency of
competent jurisdiction, unappealable or unappealed within the time allowed for
appeal, and which has not been admitted to be invalid or unenforceable through
reissue or disclaimer. If in any country there should be two or more such
decisions
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
conflicting with respect to the validity of the same claim, the decision of the
higher or highest tribunal shall thereafter control; however, should the
tribunals be of equal rank, then the decision or decisions upholding the claim
shall prevail when the decisions are equal in number, and the majority of
decisions shall prevail when the conflicting decisions are unequal in number.
SECTION 1.37. "Program Gene" means an isolated gene that (a) was
identified or discovered in the course of the Program, (b) is not designated as
a Candidate Gene, and (c) is permanently dropped from investigation for use in
the Field as part of the Program or the Lilly Development Program. Without
limiting the generality of the foregoing, a Program Gene does not include any
gene that is temporarily dropped from investigation for use in the Field as part
of the Program or the Lilly Development Program.
SECTION 1.38. "Outside of the Field" means (a) all human medical
indications other than those in the Field and (b) all animal medical
indications.
Article II
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Research and Collaboration Program
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SECTION 2.1. EXCLUSIVE ARRANGEMENT. During the term of the Millennium
Research Program, Millennium agrees that it shall not participate, either
directly or in collaboration with others in any genomics research relating to
the Field except pursuant to the terms of this Agreement, including the
provisions of Section 5.2 hereof, provided that the foregoing shall not apply to
activities in the Field by Millennium relating to the research, development and
commercialization of Diagnostic Products (subject to the provisions of Section
5.4), Gene Therapy Drugs (subject to the provisions of Section 5.3) and
Antisense Drugs. Wherever used in the immediately preceding sentence, the term
"Field" shall be limited in its scope to the areas set forth in subsections (a),
(b) and (c) of Section 1.10. Millennium acknowledges that Lilly has independent
research efforts directed to the Field but not relating to the Millennium
Research Program. To the extent that such activities do not fall within the
scope of the Lilly Research Program, Millennium acknowledges that it is not
granted any right to such research.
SECTION 2.2. JOINT MANAGEMENT TEAM. As soon as practicable after
execution of the Original Agreement, the parties shall establish a Joint
Management Team, consisting of four (4) representatives designated by Lilly and
four (4) representatives designated by Millennium. Each party shall make its
initial designation of its representation not later than thirty (30) days after
execution of the Original Agreement. Each party shall cause its representatives
to attend the meetings of the Joint Management Team. If a representative of a
party is unable to attend a meeting, such party may designate an alternate to
attend such meeting in place of the missing representative. In addition, each
party may at its discretion invite non-voting
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
employees, consultants or scientific advisors to attend the meetings of the
Joint Management Team. The Joint Management Team shall meet no less frequently
than once each calendar quarter, and shall meet at such other times as deemed
appropriate by the Joint Management Team. Each party may change any one or more
of its representatives to the Joint Management Team at any time upon notice to
the other party. The location of the Joint Management Team meetings shall
alternate between Massachusetts and Indiana, or as otherwise mutually agreed.
SECTION 2.3. JOINT MANAGEMENT TEAM RESPONSIBILITIES. The Joint Management
Team shall be responsible for coordinating and reviewing the activities of the
parties under this Agreement, including without limitation the Program. Without
intending to limit the generality of the foregoing, the Joint Management Team
shall oversee the disclosure and transfer of relevant Know-How to facilitate the
research and development of Candidate Genes, Validated Targets, Candidate
Protein Drugs and Products pursuant to Article III. Subject to the minimum
funding levels established in Section 8.1, the Joint Management Team shall
determine the level and extent of research work to be conducted by Millennium
and funded by Lilly under this Agreement. The Joint Management Team shall be
informed of the specific individuals who will work on the Millennium Research
Program. The Joint Management Team shall also attempt to settle any disputes
that may arise between the parties.
SECTION 2.4. GOALS AND OBJECTIVES. As soon as practical after the
execution of the Original Agreement, the Joint Management Team shall agree on
the initial goals and objectives and research and development activities of the
Program, including the specific targets to be initially pursued under the
Program. At each meeting of the Joint Management Team, the progress of the
Program will be reviewed and if necessary the goals and/or resource allocation
for the Millennium Research Program will be modified. No later than October 1 of
each year during the Millennium Research Program, the Joint Management Team
shall meet to discuss in detail the progress of the Program and agree upon the
short- and long-term goals and prospective budget for the Millennium Research
Program. In the event a significant development occurs which may affect the
short- or long-term goals or resource allocations of the Program or methods of
achieving said goals, the Joint Management Team shall reconvene, reassess and
change such methods, resource allocations and/or goals of the Millennium
Research Program.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SECTION 2.5. JOINT MANAGEMENT TEAM DECISIONS. The affirmative vote of
[**] of the members of the Joint Management Team shall be required to take any
action. Any member of the Joint Management Team who is not present at any
meeting either in person or by a designated alternate may appoint another
representative or alternate as his proxy to act on his behalf on all matters
coming to a vote. The Joint Management Team may conduct meetings by telephone or
videoconference. Except as otherwise provided in this Agreement, if the Joint
Management Team is unable to reach a [**] or greater vote on any issue, it shall
refer that issue to the President of Lilly Research Laboratories (a division of
Lilly) and the Chief Executive Officer of Millennium for resolution. If the
President of Lilly Research Laboratories and the Chief Executive Officer of
Millennium are unable to reach agreement on any issues relating to the Program,
[**]; provided, however, that in the event of a disagreement pertaining to [**]
comprising the Millennium Research Program (or any current or future
collaborative programs) with regards to any current or future Programs agreed
upon between the parties, then [**]. For purposes of this Section 2.5,[**] shall
be deemed to be significant if more than [**].
SECTION 2.6. PROGRAM PLAN. The parties shall engage in the Program to
expedite the discovery and development of Candidate Genes, Validated Targets,
Candidate Protein Drugs and Products in substantial accordance with the research
schedule and goals set forth in APPENDIX A.
SECTION 2.7. MILLENNIUM'S COMMITMENT TO MILLENNIUM RESEARCH PROGRAM.
Millennium shall conduct the Millennium Research Program for the first five (5)
Contract Years. Prior to the close of the fifth Contract Year, Lilly shall have
the option to extend the Millennium Research Program at Millennium for three (3)
consecutive one Contract Year periods provided that Lilly gives notice to
Millennium at least six (6) months prior to the expiration of the fifth Contract
Year and any succeeding Contract Year. However, Lilly and Millennium shall begin
discussions concerning the expiration or extension of the Millennium Research
Program at least twelve (12) months prior to the end of the fifth Contract Year
and each Contract Year thereafter. If Lilly so exercises such option, Millennium
and Lilly will diligently attempt to mutually agree on the level and extent of
research to be conducted at Millennium during such additional period. If the
parties are unable to agree on the level of research for such additional period,
then at Lilly's request Millennium shall conduct, and Lilly shall fund, research
at a level that is the lesser of (i) the level that was funded during the
immediately preceding Contract Year, or (ii) the number of FTEs agreed upon in
Section 8.1 for the fifth Contract Year. In the absence of such agreement or
request, the Millennium Research Program shall not be extended. Nothing herein
shall be interpreted to eliminate any required adjustments to the FTE
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
rate pursuant to Section 8.1(a). During the term of the Millennium Research
Program, Millennium shall submit to Lilly a quarterly report stating the name of
each Millennium employee working on the Millennium Research Program and the
number of hours that employee spent on the Millennium Research Program.
SECTION 2.8. DILIGENCE. Millennium shall use reasonable efforts in
pursuing and conducting research and development of all Candidate Genes,
Validated Targets, Candidate Protein Drugs and related assays developed under
the Millennium Research Program. Millennium shall use reasonable efforts to
carry out all work done in connection with the Millennium Research Program in
compliance with any federal, state or local laws, regulations and guidelines
governing the conduct of such work. In addition, all animals involved in the
Millennium Research Program shall be provided humane care and treatment in
accordance with generally acceptable current veterinary practices.
Article III
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Disclosure of Know-how
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SECTION 3.1. MILLENNIUM KNOW-HOW. Commencing with the execution of the
Original Agreement, Millennium shall disclose to Lilly all existing Millennium
Field Know-How which Millennium reasonably believes to be pertinent to the
Program. Millennium shall disclose to Lilly on an ongoing basis all additional
Millennium Field Know-How which Millennium reasonably believes to be pertinent
to the successful execution of the Program for the duration of the Program.
Notwithstanding the foregoing, Millennium need not disclose to Lilly any
Know-How which Millennium is precluded from disclosing under any agreement
binding upon it.
SECTION 3.2. BIOLOGICAL MATERIALS. Millennium shall also provide Lilly
with genes, gene fragments, vectors, cell lines, strains, transgenic organisms,
model organisms, DNA and DNA fragments and other biological materials, as well
as information relating to such materials, which Millennium reasonably believes
to be pertinent to Lilly's activities in the Program. Notwithstanding the
foregoing, Millennium need not provide Lilly with any such biological materials
or related information which Millennium is precluded from providing under any
agreement binding upon it.
SECTION 3.3. LILLY KNOW-HOW. Lilly shall disclose to Millennium such
Lilly Field Know-How which Lilly reasonably believes is needed by Millennium to
carry out its obligations within the Millennium Research Program hereunder;
provided, however, that Lilly need not disclose to Millennium any Know-How which
Lilly is precluded from disclosing under any agreement binding upon it or which
Xxxxx xxxxx to be inappropriate for disclosure.
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Article IV
----------
Confidentiality
---------------
SECTION 4.1. CONFIDENTIAL INFORMATION AND KNOW-HOW. All Know-How or other
Confidential Information disclosed by one party to the other during the term of
this Agreement shall not be used by the receiving party except in connection
with the Program or the identification, selection, preparation, development,
manufacture or sale of Products, shall be maintained in confidence by the
receiving party, and shall not be disclosed by the receiving party to any other
person, firm, or agency, governmental or private, without the prior written
consent of the disclosing party, except to the extent that the Know-How or other
Confidential Information:
(a) is known by or in possession of the receiving party at the time of its
receipt as documented in contemporaneous written records; or
(b) is properly in the public domain; or
(c) is subsequently disclosed to the receiving party without obligation of
confidentiality by a third party who may lawfully do so; or
(d) is required to be disclosed to governmental agencies in order to gain
approval to sell Products; or (e) is necessary to be disclosed to
agents, consultants, Affiliates and/or other third parties for the
research and development and/or marketing of Products, under this
Agreement, which entities first agree to be bound by the
confidentiality obligations contained in this Agreement.
SECTION 4.2. EMPLOYEE OBLIGATIONS. Millennium and Lilly each agree that
it shall provide Know-How and other Confidential Information received from the
other party only to its employees, consultants and advisors who have a need to
know and have an obligation to treat such information and materials as
confidential. On a regular basis, Millennium agrees to explicitly counsel its
consultants and advisors of the implications arising from such obligations.
SECTION 4.3. TERM. All obligations of confidentiality and non-use imposed
under this Article IV shall expire ten (10) years following termination of the
Millennium Research Program. Notwithstanding the foregoing, with respect to
Know-How necessary to manufacture Products, such obligations shall not expire
until the first to occur of an event specified in clause (a), (b) or (c) of
Section 4.1.
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Securities and Exchange Commission. Asterisks denote omissions.
Article V
---------
Grant of Rights
---------------
SECTION 5.1. LICENSE TO LILLY. Subject to the terms and conditions of
this Agreement, Millennium hereby grants to Lilly:
(a) an exclusive, worldwide, non-royalty bearing license (subject to
Millennium's retained rights), under Millennium Field Patent Rights
and Millennium Field Know-How, to make, have made, use, and have used
Candidate Genes and Validated Targets within Oncology; such license
[**] on prior notice to Millennium, provided however, that Lilly [**];
(b) an exclusive, worldwide, royalty bearing license, under Millennium
Field Patent Rights and Millennium Field Know-How to make, have made,
import, use, have used, offer to sell and sell Products; such license
[**] on prior notice to Millennium, provided however, that [**];
(c) an option to obtain exclusive licenses to [**] (as defined in Section
5.2), pursuant to the provisions of Section 5.2;
(d) a right to either i) negotiate for rights to collaborate on Gene
Therapy Drugs, which embody or are discovered or developed using
Millennium Field Patent Rights or Millennium Field Know-How, or ii) a
co-exclusive right to make, have made, import, use, have used, offer
to sell and sell Gene Therapy Drugs, which embody or are discovered or
developed using Millennium Field Patent Rights or Millennium Field
Know-How, pursuant to the provisions of Section 5.3;
(e) an option to co-develop and/or co-promote certain Diagnostic Products,
for use in the Field and the area of Oncology, which embody or are
discovered or developed using Millennium Field Patent Rights or
Millennium Field Know-How, pursuant to the provisions of Section 5.4;
and
(f) a co-exclusive (with Millennium), worldwide, non-royalty bearing
license, under Millennium Field Patent Rights and Millennium Field
Know-How, to make, have made, use, and have used Program Genes [**]
and to make, have made, use, and have used Candidate Genes and
Validated Targets [**]; such license shall include the right to grant
sublicenses on prior written notice to Millennium, provided however,
[**].
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SECTION 5.2. [**].
(a) The parties understand and agree that during the term, [**], Millennium
may undertake genomics research activities designed primarily to yield
biological molecules likely to be useful as targets or as pharmaceutical
products in the Field (such as the use of [**] . For the purposes of the
foregoing definition of [**], which definition shall apply wherever such term is
used in this Agreement, the term "Field" shall be limited in its scope to the
areas set forth in subsections (a), (b) and (c) of Section 1.10, PROVIDED THAT
the limitation set forth in this sentence shall only apply prospectively from
the Restatement Effective Date and PROVIDED FURTHER THAT [**] by Millennium to
Lilly pursuant to the provisions of this Section 5.2(a) set forth below shall
not be affected by such limitation. The parties agree that [**] shall have the
[**]. In order to achieve this goal, for the term of the Millennium Research
Program, [**] at its regularly scheduled quarterly meetings of any [**] it
intends to commence in the upcoming quarter as well as a progress report on any
ongoing Non-Program Field Project (the first such notice of a Non-Program Field
Project hereinafter referred to as the "Notice Date"). If the Joint Management
Team reasonably determines that such [**] shall either [**] or shall [**],
provided however, that [**] shall not be required to [**] on a process that, at
the time of such initiation, was not known to be a [**] and was only
subsequently included in [**] by the Joint Management Team pursuant to Section
[**]. If a [**] is approved by the Joint Management Team,[**] during the term of
the Millennium Research Program [**] and, in so doing, obtain all rights and
incur all obligations associated therewith as if such [**] , except as otherwise
provided in this Section 5.2 and Section 8.3. [**] . If such [**] is used in a
[**], then the parties shall [**] to the terms by which such [**] shall be used
in said [**] before the [**] is used in said [**].
In the event that [**] with respect to a [**], all prior Patent Rights and
prior Know-How developed or acquired in the course of such [**] under this
Section 5.2) shall be deemed to be [**], respectively. [**] at any time during
the term of the Millennium Research Programs as follows: (i) during the first
year after a Notice Date,[**] (as determined by Millennium's certified public
accountants) to the relevant [**] that Millennium has incurred from the Notice
Date to the date [**], including but not limited to [**] which are directly
attributable to such [**] (the "External Reimbursement Cost"),[**] (a "Milestone
Payment"); (ii) during the second year after a Notice Date, [**] External
Reimbursement Cost [**] of any Milestone Payment; (iii) during the third year
after a Notice Date,[**] of the Internal Reimbursement Cost [**] of the External
Reimbursement Cost [**] of any Milestone Payment; or (iv) anytime during or
after the fourth year after a Notice Date until the end of the term of the
Millennium Research Program,[**] of the Internal Reimbursement Cost [**] of the
External Reimbursement Cost [**] of any Milestone Payment. In the event that
[**]
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with respect to a [**] in order to recompense Millennium for relevant pre-Notice
Date expenditures, Lilly shall pay to Millennium, in addition to the other
relevant payments set forth above in this Section 5.2(a),[**], reasonably
allocable (as determined by Millennium's certified public accountants) to all
prior research included in the [**] that Millennium has incurred in the conduct
of such research from the date of its inception (as shown by documentation
reasonably acceptable to Lilly) to the Notice Date.
(b) The parties further understand and agree that during the term [**],
Millennium, alone or in collaboration with a third party, may undertake (i)
genomic research activities primarily designed to identify genetic and other
biological markers of disease initiation and progression as well as drug and
treatment responsiveness useful for diagnostic, prognostic and pharmacogenetic
purposes but which may also yield biological molecules of possible utility as
targets or as pharmaceutical products in the Field (a "Millennium Diagnostic
Project"), and/or (ii) genomic research activities not designed primarily to
yield biological molecules likely to be useful as targets or as pharmaceutical
products in the Field but which may yield such biological molecules (the [**]).
In the event that (x) a biological molecule with utility as a target or a
pharmaceutical product in the Field is identified in the course of a Millennium
Diagnostic Project or a [**] during the term of the Millennium Research Program;
(y) Millennium elects to exploit the potential of such biological molecule for
therapeutic use in the Field on its own or in collaboration with a third party
and (z) Millennium has no prior commitment to a third party concerning the
research, development and/or commercialization of such biological molecule, then
Millennium shall (1) [**] in the Field of such [**] and (2)[**] regarding the
possibility of a [**] concerning the research, development and/or
commercialization of such [**] for therapeutic purposes within the Field.
Wherever used in this Section 5.2(b), the term "Field" shall be limited in its
scope to the areas set forth in subsections (a), (b) and (c) of Section 1.10.
SECTION 5.3. GENE THERAPY. During the term of the Program, Millennium and
Lilly agree to discuss collaborations within the Field and the area of Oncology
concerning candidates for gene therapy arising from the Program. The initial
opportunity to begin such discussions concerning gene therapy shall arise when a
gene that is appropriate for use in gene therapy is discovered in the course of
the Millennium Research Program or a [**] and is brought to the attention of the
Joint Management Team. When this occurs, the parties shall have a period of [**]
in which to decide whether to begin good faith negotiations with each other
concerning a potential gene therapy collaboration on such a gene. If the parties
decide to
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collaborate on a gene therapy project, the terms of such collaboration shall be
governed by the terms and conditions of a separate agreement.
If, either (a) a gene described in the preceding paragraph has a potential
application only outside of Oncology, (b) the parties choose not to negotiate
with each other concerning a collaboration within Oncology, or (c) the parties
cannot agree to the terms of a collaboration within Oncology, then each party
shall have a co-exclusive right to make, use and sell a Gene Therapy Drug
embodying such a gene for all gene therapy applications, both within the Field
and outside the Field, within the Territory. Each party shall be entitled to
sublicense the co-exclusive rights to make, use and sell each Gene Therapy Drug
embodying such gene to one (1) sublicensee per country. Any further licensing of
the Gene Therapy Drug embodying such gene shall require the [**]. Each party
shall pay the other party a [**] on its Net Sales of the Gene Therapy Product
within the Territory. All royalty payments shall be made subject to the
provisions of Article VIII of this Agreement. In the event that the total
royalty burden of any Gene Therapy Product sold by a party is greater than [**]
of the Net Sales of the Gene Therapy Product in the Territory (inclusive of the
[**] paid under the terms of this Section 5.3), then that party's royalty
payable to the other party shall [**] of the excess over [**] paid by that
party; provided, however, the royalty payment to the other party shall not fall
below [**] of Net Sales of the Gene Therapy Product in the Territory. Nothing
within this Section 5.3 grants Millennium any rights to Candidate Genes,
Candidate Protein Drugs or Validated Targets within the Field, except as
necessary for Millennium fully to exercise its rights to Gene Therapy Products
as granted herein.
SECTION 5.4. [**]. During the term of the Program and the Lilly
Development Program,[**] Products arising from the Millennium Research Program
and related to the Field and the area of Oncology under the following
circumstances:
(a) [**] or its development partner [**] (provided that Millennium is made
aware of the Lilly [**] product at least three (3) years in advance of
the date on which this [**] as specified in this paragraph) which are
not being developed by Millennium, a Millennium Affiliate or a
commercial partner of Millennium. With respect to each [**] shall
become [**] in a Major Market Country for a [**] in the event that
Millennium, a Millennium Affiliate or its commercial partner has not
earlier submitted the pertinent regulatory approval package for said
[**] to the FDA (or its equivalent in any Major Market Country) for
marketing approval or, if relevant, is not capable of providing, or is
unwilling to provide, [**] of its interest, and the parties shall
negotiate the specific terms of such an
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Securities and Exchange Commission. Asterisks denote omissions.
agreement in good faith. [**] set forth in this Section 5.4(a), [**]
Millennium's Net Sales of the [**] in the Territory.
(b) The parties acknowledge and agree that promotion by [**] of a [**]
associated with a product marketed by [**] or a [**] in development by
[**] may advantageously affect the sales of [**] and the associated
product or Product. Therefore,[**] related to the Field and the area
of [**] on the market related to such [**] or a product or Product in
development which is also related to such [**]. The [**] shall not be
[**] but shall be [**]. Millennium shall review the position of Lilly
and the parties shall negotiate in good faith a [**] with respect to
such [**] . Millennium shall [**] on the Net Sales of the [**] in
those countries where Lilly co-promotes the [**] , whichever is lower;
provided, however, that [**] if Lilly is receiving royalty payments
pursuant to Section 5.4(a). Millennium shall also [**] , at
Millennium's, its Affiliate's or its partner's [**].
SECTION 5.5. USE OF PROGRAM GENES, CANDIDATE GENES, AND VALIDATED
TARGETS. Pursuant to the grant set forth in Section 5.1(f), Lilly shall have a
co- exclusive right (with Millennium) to use Program Genes [**]. In the event
that any such use results in the identification of a compound (i) derived from
the use of a [**] or (ii) derived from the use of a [**] the clinical
development and commercialization of such [**] (where such compound was derived
from the use of a Program Gene) or [**] (where such compound was derived from
the use of a Candidate Gene or a Validated Target), [**] (Net Sales as redefined
for purposes of this Section 5.5 to include amounts invoiced by Lilly [**]);
provided however, that (i) in the case of a [**] that is identified through the
use of a Program Gene, [**] pursuant to Section 8.3, as if such [**], and (ii)
in the case of a [**] that is identified through the use of a Candidate Gene or
Validated Target,[**] pursuant to Section 8.3, as if such [**].
Millennium shall retain a co-exclusive right to use Program Genes [**] and
to use Candidate Genes and Validated Targets [**] (including but not limited to
any [**]) any work in the Field arising from any resulting compound discovered
using a Program Gene or any work [**] arising from any resulting compound
discovered using a Candidate Gene or Validated Target.
SECTION 5.6. THIRD PARTY GENE. The parties agree that during the term of
the Program, an isolated gene that has been implicated in a disease or condition
in the Field by a third party before or during the term of the Program (a "Third
Party Gene") may be designated a Candidate Gene if it is determined by the Joint
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Management Team that the study of such Third Party Gene may lead to further
development of such Third Party Gene as a Candidate Gene and Validated Target.
Article VI
----------
Patent Ownership, Protection,
Validity and Related Matters
----------------------------
SECTION 6.1. PATENTABLE INVENTIONS. If a patentable invention related to
the Field is conceived in the course of and within the scope of the Program and
is reduced to practice within the course of the Program or within twelve (12)
months after its expiration or termination, Lilly and Millennium shall discuss
that invention and the desirability of filing a United States patent application
covering the invention, as well as any foreign counterparts. The party owning
the invention shall make the final decision with respect to any such filings. If
an invention is made jointly pursuant to 35 U.S.C. ss.116, the Joint Management
Team shall determine which party shall file and prosecute the application. If no
decision is made regarding which party shall file and prosecute the application
covering such jointly owned invention, Lilly shall make the decision.
SECTION 6.2. OWNERSHIP. Lilly shall own all inventions within the scope
of the Program made solely by its employees, and Millennium shall own all
inventions within the scope of the Program made solely by its employees. All
inventions made jointly by employees of Lilly and employees of Millennium shall
be owned jointly by Millennium and Lilly. All patent applications and patents
covering any invention made within the scope of the Program shall be owned by
the parties or party, as the case may be, that own(s) said invention.
SECTION 6.3. REVIEW AND COMMENT. Each party shall provide the Joint
Management Team with a copy of any patent application which first discloses any
specific Program Know-How, including without limitation any DNA fragment, gene,
Candidate Gene, Candidate Protein Drug, Validated Target or assay within the
Field and/or any IN VITRO or IN VIVO data from such Candidate Genes, Candidate
Protein Drug, Validated Targets or assays within the Field prior to filing the
first of such applications in any jurisdiction, if possible, for review and
comment by the Joint Management Team or its designees. The Joint Management Team
and/or its designees shall maintain any such patent application in confidence,
pursuant to Article IV.
SECTION 6.4. NOTICE OF DECISION. If a party decides not to file or
maintain an application or patent on its invention, or on a joint invention, in
any country, it shall give the other party reasonable notice to this effect.
After such notice, the other party may file or maintain the application or
patent.
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SECTION 6.5. RETENTION OF RIGHTS. Each party shall continue to own and
retain proprietary rights to its Know-How and Patent Rights which are licensed
or disclosed under this Agreement except as specifically provided herein.
SECTION 6.6. PROSECTION AND MAINTENANCE. Each party agrees to prosecute
and maintain the Patent Rights owned by it, and to prosecute any interference
proceedings with respect to such Patent Rights. Patent Rights jointly owned by
the parties shall be prosecuted and maintained, including the prosecution of any
interference proceedings with respect thereto, by the party who has
decision-making authority with respect thereto under Section 6.1. The party
initially responsible for such prosecution and maintenance (the "Initial
Responsible Party") shall give notice to the other party of any decision to
cease such prosecution and maintenance and, in such case, shall permit the other
party at its sole discretion to continue prosecution or maintenance. If the
other party elects to continue prosecution or maintenance, the Initial
Responsible Party shall execute such documents and perform such acts as may be
reasonably necessary for the other party to continue prosecution or maintenance.
SECTION 6.7. THIRD PARTY INFRINGEMENT. Millennium and Lilly each agrees
to take reasonable actions to protect the Program Patent Rights from
infringement in the Field and the area of Oncology and to protect the Program
Know-How from unauthorized use in or Outside of the Field and the area of
Oncology, when, from its own knowledge or upon notice by the other party, the
party with knowledge or receiving notice becomes aware of the reasonable
probability that such infringement or unauthorized use exists in or Outside of
the Field and the area of Oncology.
SECTION 6.8. COOPERATION. If within sixty (60) days of becoming aware of
the reasonable probability of an interference or infringement of the Program
Patent Rights in the Field and the area of Oncology or unauthorized use of the
Program Know-How in the Field and the area of Oncology, the Initial Responsible
Party refuses to institute an infringement suit or take other appropriate action
that the other party feels is reasonably required to protect the Program Patent
Rights and Program Know-How in the Field and the area of Oncology, the other
party shall have the right at its sole discretion to institute such suit or
other appropriate action in the name of either or both parties. In such event,
the Initial Responsible Party shall cooperate with the other party to the extent
reasonably possible.
SECTION 6.9. NOTICE OF CERTIFICATION. Millennium and Lilly each shall
immediately give notice to the other of any certification filed under the U.S.
"Drug Price Competition and Patent Term Restoration Act of 1984" claiming that a
Program Patent Right is invalid or that any infringement will not arise from the
manufacture, use or sale of any product in the Field and the area of Oncology by
a third party. If Millennium decides not to bring infringement proceedings
against the entity making such a certification, Millennium shall give notice to
Lilly of its decision not to bring suit within twenty-one (21) days after
receipt of notice of such certification. Lilly
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may then, but is not required to, bring suit against the party that filed the
certification. Any suit by Lilly or Millennium shall either be in the name of
Lilly or in the name of Millennium, or jointly by Lilly and Millennium, as may
be required by law. For this purpose, the party not bringing suit shall execute
such legal papers necessary for the prosecution of such suit as may be
reasonably requested by the party bringing suit.
SECTION 6.10. COSTS AND EXPENSES. Lilly shall bear its own costs and
expenses in filing, prosecuting, maintaining and extending Lilly Field Patent
Rights under this Article VI and shall reimburse Millennium for [**] of
Millennium's external costs of filing, prosecuting, maintaining and extending
any Millennium Field Patent Rights to which Lilly is licensed under the terms of
this Agreement and for which costs are incurred after the Effective Date. The
Joint Management Team shall review and have oversight responsibility for all
patent matters pertaining to Millennium Field Patent Rights concerning
technology relating to the Program.
SECTION 6.11. NOTICE OF INFRINGEMENT. If the activities of either party in
connection with the Program or as the result of making, using or selling a
Product in the Field and the area of Oncology result in a claim of patent
infringement or other violation of the intellectual property rights of any third
party, the party to this Agreement first having notice of that claim shall
promptly notify the other party in writing. The notice shall set forth the facts
of the claim in reasonable detail. Except as otherwise provided herein, Lilly
shall have the primary obligation to defend against said claim (whether or not
it arises as a counterclaim in any infringement action commenced by Millennium
hereunder) and to prosecute any counterclaims, or any other claims that may
arise in connection with such litigation. Millennium shall cooperate with Lilly
in such defense and prosecution and shall have the right to be represented by
counsel of its own choice. If Lilly shall fail to diligently commence and
continue defense against such claim (or prosecution of any claim or
counterclaim), Millennium may assume the primary obligation for such defense or
prosecution, and Lilly shall cooperate with Millennium and shall have the right
to be represented by counsel of its own choice. Notwithstanding the foregoing,
if the claim involves an allegation of a violation of the trade secret rights of
a third party, the party accused of such violation shall have the obligation to
defend against such claim and shall indemnify the other party against all costs
associated with such claim.
SECTION 6.12. LITIGATION EXPENSES. Each party shall assume and pay all of
its own out-of-pocket costs incurred in connection with all litigation described
in this Article VI, including without limitation, the fees and expenses of that
party's counsel.
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SECTION 6.13. SETTLEMENT APPROVAL. Neither party shall settle any such
proceeding without the approval of the other party, which approval shall not be
unreasonably withheld.
SECTION 6.14. RECOVERY. Any recovery obtained by any party as a result of
any proceeding described in this Article VI, by settlement or otherwise, shall
be applied in the following order of priority:
(a) first, to reimburse each party for all litigation costs in connection
with such proceeding paid by that party under Section 6.12 and not
otherwise recovered; and
(b) second,[**].
SECTION 6.15. PATENT TERM EXTENSIONS. The parties shall cooperate with
each other in gaining patent term extension wherever applicable to Program
Patent Rights covering Products. The party selling the product shall determine
which patents shall be extended. All filings for such extension shall be made by
the party to whom the patent is assigned after consultation with the other
party, provided, however, that in the event that the party to whom the patent is
assigned elects not to file for an extension, such party shall (i) inform the
other party of its intention not to file and (ii) grant the other party the
right to file for such extension.
Article VII
-----------
Commercial Diligence
--------------------
SECTION 7.1. CANDIDATE GENES. After the term of the Program and during
the term of the Lilly Development Program, Lilly shall commit resources to
continue research on Candidate Genes sufficient to move each Candidate Gene into
Validated Target or Candidate Protein Drug status within three (3) years from
the date of the termination or expiration of the Program. If a Candidate Gene
does not attain Validated Target or Candidate Protein Drug status within said
three (3) year period, then Lilly's exclusive right to use said Candidate Gene
in the Field and the area of Oncology shall be converted into a co-exclusive
right to use said Candidate Gene in the Field and the area of Oncology, subject
to the other terms of this Section 7.1. Millennium may thereafter pursue the
creation of a Validated Target or the development of a Candidate Protein Drug
from said Candidate Gene the Field and the area of Oncology, and retain rights
to therapeutic leads found by Millennium using such a Validated Target or to
protein therapeutics based on such Candidate Protein Drug, and proceed with the
development of such therapeutic products on its own or sublicense the rights to
such therapeutic products and [**].
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Notwithstanding the provisions of the prior paragraph, after the term of
the Program and during the term of the Lilly Development Program, [**] of a
Validated Target or a Candidate Protein Drug based upon any Candidate Gene if
Lilly is [**] which demonstrates [**] if the project succeeds in bringing a
Product to the market.
SECTION 7.2. VALIDATED TARGETS. During the term of the Program and the
Lilly Development Program, Lilly shall diligently screen the Validated Targets
to discover and develop Products. Lilly shall screen all Validated Targets
within [**] of the date upon which the Validated Target milestone is paid to
Millennium pursuant to Section 8.2. If a Validated Target is not screened within
[**] of the payment of the milestone, then Lilly's exclusive right to use said
Validated Target in the Field and the area of Oncology shall be converted into a
co-exclusive right to use said Validated Target in the Field and the area of
Oncology, subject to the other terms of this Section 7.2. Millennium may
thereafter screen such a Validated Target in the Field and the area of Oncology,
and retain rights to therapeutic leads found by Millennium using such a
Validated Target, and proceed with the development of such compound on its own
or sublicense the rights to such a compound and [**]. After a Validated Target
is first screened, Lilly shall screen said Validated Target at least once every
[**]. For each Validated Target, Lilly will be deemed to be diligent under this
Section 7.2 so long as Lilly presents a compound arising from a screen against
such Validated Target to [**] from the use of the Validated Target in a screen.
In the event Lilly does not screen against a specific Validated Target within
the time period set forth above, or does not present a compound arising from
said screen to [**] within the time specified, Lilly's exclusive right to use
said Validated Target in the Field and the area of Oncology shall be converted
into a co-exclusive right to use said Validated Target in the Field and the area
of Oncology, subject to the other terms of this Section 7.2. Millennium may
thereafter screen such a Validated Target in the Field and the area of Oncology,
provided, however, that such screening efforts shall be deemed to be a
Non-Program Field Project subject to Lilly's rights under Section 5.2, except
Lilly's rights thereto shall extend for [**] , Millennium may proceed with the
development of such compound on its own or sublicense the rights to such a
compound and [**].
Lilly shall not be required to continue to screen a Validated Target [**]
from the Program in its development program (defined as a program that has been
[**], or its successor) which (i) reacts with said Validated Target or which
demonstrates the same clinical utility (and no significant clinical advantages)
as a compound which reacts with said Validated Target, and (ii) for which [**]
from the Program in its development program or its product portfolio which (i)
reacts with the Validated Target or which demonstrates the same clinical utility
(and no significant clinical
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advantages) as a compound which reacts with said Validated Target, and (ii) for
which [**]. Furthermore, if Lilly, or its sublicensee, is diligently screening a
Validated Target which would lead to compounds with the same clinical utility
(and no significant clinical advantages) as a drug identified using other
Validated Target, then Lilly's diligent use of the first Validated Target will
be deemed to demonstrate diligence for all Validated Targets which would lead to
compounds with the same clinical utility (and no significant clinical
advantage).
SECTION 7.3. PROTEIN PRODUCTS. During the term of the Program and the
Lilly Development Program, Lilly shall diligently pursue the development of
Candidate Protein Drugs by either continuing the development of the Candidate
Protein Drug within the Lilly product development program (defined as a program
that has been accepted by Lilly's Project Team Approval Committee, or its
successor) or by pursuing [**] said Candidate Protein Drug, provided [**] to the
diligence requirements of this Section 7.3. Lilly shall review the feasibility
of continuing the development of those Candidate Protein Drugs in the
development program on a yearly basis. In the event Lilly abandons the
development of a Candidate Protein Drug for reasons other than a [**] ,
Millennium shall have the right to obtain exclusive rights to such a Candidate
Protein Drug so long as (i) there are [**] which demonstrate the same clinical
utility (and no significant clinical advantages), and (ii) [**].
In the event [**] with the Candidate Protein Drug, [**] the right to
develop and commercialize the Candidate Protein Drug according to the terms set
forth in the previous paragraph, or (ii) maintain the exclusive rights to the
Candidate Protein Drug and [**].
SECTION 7.4. COMMERCIALIZATION. Lilly agrees to use commercially
reasonable efforts to seek regulatory approval in all Major Market Countries for
all Products and, upon receipt of such approval, to market and sell such Product
in all Major Market Countries. In the event Lilly enters into an arrangement
with a third party concerning research, development, registration, marketing and
selling of any Product in a Major Market Country, Lilly shall guarantee the
diligence of such third party.
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Securities and Exchange Commission. Asterisks denote omissions.
SECTION 7.5. MILLENNIUM'S RECIPROCAL OBLIGATIONS. In the event Millennium
obtains any rights to Candidate Genes, Validated Targets or Candidate Protein
Drugs under this Article VII, and thereafter does not demonstrate the same
degree of diligence as is required by Lilly in this Article VII, then
Millennium's rights to such Candidate Genes, Validated Targets or Candidate
Protein Drugs shall revert back to Lilly.
Article VIII
------------
Payments
--------
SECTION 8.1. RESEARCH FUNDS. In support of research and development to be
conducted by Millennium pursuant to this Agreement, Lilly will make the
following payments to Millennium:
(a) From the Restatement Effective Date through the end of the fifth
Contract Year or, if the Millennium Research Program is extended
pursuant to Section 2.7, through the end of such extension, Lilly
shall pay to Millennium [**] per FTE to fund the Millennium Research
Program, as adjusted in the immediately following sentence for periods
subsequent to December 31, 1999 (the "FTE Rate"). On each January 1
thereafter, the FTE Rate shall be increased by an amount equal to the
percentage increase, if any, in the United States Consumer Price Index
(or any comparable successor index thereto) from the immediately
preceding January 1. The FTE Rate for all periods prior to the
Restatement Effective Date shall remain as stated in the Original
Agreement.
(b) From the Effective Date to March 31, 1997, Millennium shall provide
(subject to reasonable ramp-up considerations) and Lilly shall fund up
to (but not more than the number of FTEs actually provided by
Millennium) [**] FTEs for research. From April 1, 1997 to the
Restatement Effective Date, Millennium shall provide (subject to
reasonable ramp-up considerations) and Lilly shall fund up to (but not
more than the number of FTEs actually provided by Millennium) [**]
FTEs for research, provided however, that if, in the reasonable
judgment of the majority of the Joint Management Team, there is not
research and development of sufficient scientific and commercial merit
within the Field to justify all [**] FTEs, this number may be reduced
but not below [**] FTEs. From the Restatement Effective Date through
the end of the fifth Contract Year, Millennium shall provide and Lilly
shall fund up to (but not more than the number of FTEs actually
provided by
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Securities and Exchange Commission. Asterisks denote omissions.
Millennium) [**] FTEs for research. Millennium shall keep Lilly
reasonably informed of its plans for research staffing and shall
afford Lilly a reasonable opportunity to review such plans and provide
input to Millennium. After the Restatement Effective Date through the
end of the fifth Contract Year, Millennium shall ensure, for so long
as he remains employed by Millennium, that Xxxx Xxxxxx (i) remains
assigned as Millennium's leader with respect to Millennium Research
Program activities, (ii) devotes at least eighty percent (80%) of his
employment efforts to Millennium Research Program activities for the
six months immediately following the Restatement Effective Date and
(iii) devotes one hundred percent (100%) of his employment efforts to
Millennium Research Program activities after the date six months
subsequent to the Restatement Effective Date, unless the members of
the Joint Management Team mutually agree otherwise. After January 1,
1999 through the end of the fifth Contract Year, Millennium shall also
ensure that no Millennium employee assigned on a full-time basis to
Millennium Research Program activities is reassigned to other
activities by Millennium unless (i) Millennium has identified a
replacement for such employee prior to such reassignment, (ii) the
Joint Management Team has determined that the replacement for such
employee has credentials that are acceptably similar to those of the
employee to be reassigned and (iii) the Joint Management Team has
approved such reassignment, which approval shall not be unreasonably
withheld. Millennium shall further ensure that none of the scientists
assigned on a full-time basis to the discovery and validation of
Candidate Genes and Validated Targets within the Millennium Research
Program are at the time completing their post-doctoral fellowships at
Millennium. All FTEs shall be deployed by the Joint Management Team in
accordance with the provisions of Section 2.3. The numbers set forth
above for FTE employees to be provided by Millennium, and funded by
Lilly, for research and development from the Effective Date through
the end of the Millennium Research Program may be adjusted from time
to time by decision of the Joint Management Team, provided, however,
that the number of FTEs funded by Lilly shall not be below the
minimums set forth above, except by mutual agreement of the parties or
as provided by Section 8.1(d), below.
(c) Within fifty (15) working days of the execution date of the Original
Agreement, Lilly shall pay to Millennium the full amount of the level
of FTE funding for the first contract quarter (execution date through
June 30, 1996). Within five (5) working days of the first day of each
contract
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Securities and Exchange Commission. Asterisks denote omissions.
quarter, Lilly shall pay to Millennium the total amount due for the
upcoming quarter. Within thirty (30) days of the completion of each
contract quarter, Millennium shall provide Lilly with a written
statement setting forth the actual numbers of FTEs provided and the
funds expended during such contract quarter, and shall provide Lilly
with a credit for any amounts overpaid by Lilly or xxxx Xxxxx for any
amounts underpaid during such contract quarter.
(d) If third party collaborative research expenses incurred by Millennium
in support of the Program in any Contract Year exceeds an amount equal
to the product of [**] multiplied by the number of FTEs for such
Contract Year, then Millennium can request, through and with the
approval of the Joint Management Team, that Lilly provide additional
funding to reimburse Millennium for such excess collaborative research
expenses. Nothing in this Section 8.1 relieves Millennium of its
obligations to be responsible for all past and future payments of
funding, milestones and royalties arising from Millennium's prior
third party research agreements.
SECTION 8.2. MILESTONES. Upon the achievement of the following
milestones, Lilly shall also pay to Millennium the specified milestone
payments,[**] in connection with the Net Sales of the Product with respect to
which [**]; provided, however, that the [**]:
(a) The sum of [**] provided that no more than [**] may qualify for this
milestone payment [**] under subsection (b) or [**] under subsection
(c). Upon each and every approval of a [**] , the number of [**] .
(b) The sum of [**] for the successful [**] .
(c) The sum of [**] for each [**] which has been placed into [**].
(d) Upon the [**] or the sum of [**].
(e) Upon the [**] or its equivalent in the first Major Market Country, the
sum of [**] or the sum of [**].
(f) Upon [**] or its equivalent in the first Major Market Country, the sum
of [**] or the sum of [**] .
If Lilly begins the development of a Product and later ceases development
of said Product due to lack of efficacy, potency or adverse reactions found in
the course of human clinical trials or the Product is not registered after the
filing of an NDA, then [**] which reacts with the same [**] and which [**].
SECTION 8.3. ROYALTY PAYMENTS TO MILLENNIUM ON PRODUCTS. In addition to
the foregoing, with respect to each calendar quarter, Lilly shall pay to
Millennium royalties equal to [**] of Net Sales of Products which are [**] of
Net Sales of Products
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Securities and Exchange Commission. Asterisks denote omissions.
which are [**] of Net Sales of Products which are either [**]; and [**] of Net
Sales of Products which are [**] .
Notwithstanding the terms of the prior paragraph, for any Products that are
the result, to any extent, of research conducted by Millennium in a [**] with
respect to which [**], conducted in accordance with [**] standards, then [**] of
Net Sales of such products which are [**] , except as provided in the following
paragraph;[**] of Net Sales of such products which are [**] of Net Sales of such
products which are [**] of Net Sales of such products which are [**] . If the
compound which is the basis of the [**] of Net Sales of such product.
In addition, for any [**] that are the result, to any extent, of research
conducted by Millennium in a [**] with respect to which [**] conducted in
accordance with [**] standards capable of fulfilling such requirements for an
[**] (or its equivalent) in any Major Market Country, then [**] of Net Sales of
such products which are [**].
If the Joint Management Team decides that it is desirable to have a third
party provide support on the Program (a "Third Party Collaborator"), and in an
agreement between Lilly or Millennium and such Third Party Collaborator payment
by either Millennium or Lilly of a royalty on the sale of Products is required,
then Millennium and Lilly, at that time shall discuss in good faith whether an
increase or decrease in the royalty on Net Sales of Products payable to
Millennium under this Agreement is appropriate, and if agreed shall negotiate
and agree to such an increase or decrease in royalty.
SECTION 8.4. LENGTH OF ROYALTY PAYMENTS. The royalties payable under
Sections 8.3 shall be paid on a country-by-country basis from the date of first
commercial sale of each Product in a particular country until the expiration of
the last to expire Lilly Field Patent Right or Millennium Field Patent Right
owned by Millennium or Lilly or any of their respective Affiliates in such
country with respect to which a Valid Claim covers the manufacture, use or sale
of such Product, or until ten (10) years after such first commercial sale in
such country, whichever is longer.
SECTION 8.5. ROYALTY ADJUSTMENT. If (i) Xxxxx xxxxx a Product in any
country for which there is no Valid Claim which, if legally enforced, would
prevent the making, using or selling of a competing product in that country,
(ii) such competing product is generically equivalent to the Product, and (iii)
[**] in any given two (2) year period, as measured against the year prior to the
year in which the competing product was introduced, then the royalty payable by
Lilly in any such country shall
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Securities and Exchange Commission. Asterisks denote omissions.
[**] under Section 8.3 of this Agreement. [**] shall be retroactive to the first
year used to calculate the two (2) year period and Lilly's future royalty
payments shall be [**] made within the two (2) year period.
If (i) Xxxxx xxxxx a Product in any country for which there is no Valid
Claim which, if legally enforced, would prevent the making, using or selling of
a competing product in that country, (ii) such competing product [**] as the
Product, and (iii) [**] in any given two (2) year period, as measured against
the year prior to the year in which the competing product was introduced, then
the royalty payable by Lilly in any such country shall [**] under Section 8.3 of
this Agreement. This [**] shall be retroactive to the first year used to
calculate the two (2) year period and Lilly's future royalty payments shall be
[**] made within the two (2) year period.
SECTION 8.6. SALES TO AFFILIATE. Sales of Products between Lilly and its
permitted sublicensees or Affiliates, or among such Affiliates and permitted
sublicensees, shall not be subject to the royalty, but in such cases the royalty
shall be calculated upon Lilly's or its sublicensee's or Affiliate's Net Sales
to an independent third party.
SECTION 8.7. ROYALTIES PAYABLE ONLY ONCE. The obligation to pay royalties
is imposed only once with respect to the same unit of Product. Except as
specifically provided in this Agreement, it is understood and agreed that there
shall be no deductions from the royalties payable hereunder.
Article IX
----------
Accounting
----------
SECTION 9.1. ROYALTY REPORTS. Lilly shall deliver to Millennium within
sixty (60) days after the end of each calendar quarter a written accounting, of
Lilly's and its Affiliates and sublicensees' sales and other consideration
received subject to royalty payment due to Millennium for such quarter. Such
quarterly reports shall indicate the Net Sales of Products on a
country-by-country basis.
SECTION 9.2. DELIVERY OF ROYALTY. When Lilly delivers the accounting to
Millennium, Lilly shall also deliver all royalty payments due to Millennium for
the calendar quarter.
SECTION 9.3. AUDITS. Lilly shall keep accurate records in sufficient
detail to enable the amounts due to Millennium to be determined. Within the term
of this Agreement and within one year after its termination, Millennium shall
not more than
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Securities and Exchange Commission. Asterisks denote omissions.
once each year have the right at its expense to have Lilly's independent
certified public accountants inspect Lilly's records for any of the two
preceding years for the purpose of determining the accuracy of royalty payments.
The independent certified accountants shall keep confidential any information
obtained during such inspection and shall report to Millennium only the amounts
of royalties due and payable. If Lilly has underpaid a royalty amount due under
this Agreement by more than five percent (5%), Lilly shall promptly pay the
appropriate amount to Millennium and shall also reimburse Millennium for the
cost of such audit.
SECTION 9.4. EXCHANGE RATES. All payments to be made by Lilly to
Millennium under this Agreement shall be made in United States dollars. In the
case of sales outside the United States, the rate of exchange to be used in
computing the amount of currency equivalent in United States dollars due
Millennium shall be made using Lilly's then current standard exchange rate
methodology, which methodology shall be in conformity with generally accepted
accounting principles.
SECTION 9.5. MILLENNIUM'S OBLIGATIONS. The accounting and payment
obligations set forth in this Article IX shall also apply to Millennium in the
case of Gene Therapy Products and Diagnostic Products sold by Millennium, its
Affiliates or sublicensees, upon which a royalty is due Lilly hereunder, and in
which case all references to Lilly shall mean Millennium and all references to
Millennium shall mean Lilly.
SECTION 9.6. WITHHOLDING TAXES. The party who pays a royalty hereunder to
the other party shall have no liability for any income taxes levied against such
other party on account of such royalties. If laws or regulations require that
any such taxes be withheld by the party paying the royalty, such party shall
deduct such taxes from the payment due the other party, pay the taxes so
withheld to the proper taxing authority, and send proof of payment to the other
party within thirty (30) days following such payment. If the other party desires
to obtain a refund of any taxes so withheld and paid to a taxing authority, upon
request the party who withheld and paid such taxes shall cooperate in the
pursuit of such refund.
Article X
---------
Corporate Control
-----------------
In the event that a third party makes an unsolicited offer to purchase all
or substantially all of the assets or securities of Millennium or proposes a
merger or similar transaction, or in the event that Millennium's Board of
Directors determines to seek proposals for or the sale of all or substantially
all of the assets of Millennium or the merger or consolidation with a third
party, then Millennium, to the extent consistent with applicable law and the
fiduciary duties of the Board of Directors of Millennium, as reasonably
determined by the Board of Directors of Millennium, shall
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Securities and Exchange Commission. Asterisks denote omissions.
notify Lilly thereof and shall provide Lilly with the opportunity to engage in
discussions with Millennium regarding such a transaction.
Article XI
----------
Duration
--------
This Agreement becomes effective as of the Effective Date, may be
terminated as set forth in Article XII hereof, and otherwise remains in effect
until the expiration of the term of Lilly's or Millennium's obligation to pay
royalties. Notwithstanding the foregoing, Article IV and Article V shall remain
in effect for the respective periods stated therein.
Article XII
-----------
Termination
-----------
SECTION 12.1. TERMINATION FOR MATERIAL BREACH. Upon any material breach by
either party under this Agreement, the other party may terminate this Agreement
by ninety (90) days' written notice to the breaching party, specifying the
material breach, default or other defect. The termination becomes effective at
the end of the ninety (90) day period unless the breaching party cures the
breach during the ninety (90) day period. The parties will use best efforts to
work together to cure any breach.
SECTION 12.2. RIGHTS UPON TERMINATION FOR BREACH. If a party (the "Non-
Breaching Party") terminates this Agreement under Section 12.1 following
material breach by the other party (the "Breaching Party"), (a) the Breaching
Party shall return to the Non-Breaching Party all Confidential Information and
materials received from the Non-Breaching Party after the Effective Date, (b)
the Breaching Party shall cease all use of the Confidential Information and
materials received from the Non- Breaching Party for any purpose, except that
the Breaching Party may keep a copy of all documents for record keeping purposes
only, (c) the Breaching Party shall deliver to the Non-Breaching Party all data
and information developed by the Breaching Party prior to such termination as a
result of the Program which can reasonably be viewed as necessary or useful to
obtain governmental regulatory approvals, (d) subject to any agreements with
third parties, the [**] and shall have [**], and (e) the licenses granted under
Article V to the Breaching Party shall terminate and the licenses granted under
Article V to the Non-Breaching Party shall continue.
SECTION 12.3. VOLUNTARY TERMINATION BY AGREEMENT. The parties may agree to
terminate the Millennium Research Program at any time after the first
twenty-four (24) months of the Program. If the Millennium Research Program is
voluntarily
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Securities and Exchange Commission. Asterisks denote omissions.
terminated under this Section 12.3, all rights and obligations under this
Agreement concerning the making, using or selling of all Candidate Genes,
Candidate Protein Drugs and Validated Targets already produced by the Program,
and any future Products arising therefrom, shall not be affected by the
termination of the Program. Following any termination of the Millennium Research
Program under this Section 12.3, Millennium shall have the right to undertake,
either alone or in collaboration with a third party, research, development and
commercialization in the Field, including research, development and
commercialization that utilizes Millennium Field Know-How and/or is covered by
Millennium Field Patent Rights, other than research, development and
commercialization in the Field exclusively related to Candidate Genes, Candidate
Protein Drugs and Validated Targets already produced by the Program and any
future Products arising therefrom.
SECTION 12.4. KEY PERSONNEL. During the term of the Millennium Research
Program,[**] , for any reason, Lilly may voluntarily terminate the Millennium
Research Program upon thirty (30) days written notice to Millennium if within
one hundred twenty (120) days following the departure of the last to leave of
said individuals Millennium is unable to select replacements for such
individuals that are reasonably acceptable to Lilly. If the Millennium Research
Program is voluntarily terminated under this Section 12.4, all rights and
obligations under this Agreement concerning the making, using or selling of all
Candidate Genes, Candidate Protein Drugs and Validated Targets already produced
by the Program, and any future Products arising therefrom, shall not be affected
by the termination of the Program. Following any termination of the Millennium
Research Program under this Section 12.4, Millennium shall have the right to
undertake, either alone or in collaboration with a third party, research,
development and commercialization in the Field, including research, development
and commercialization that utilizes Millennium Field Know-How and/or is covered
by Millennium Field Patent Rights, other than research, development and
commercialization in the Field exclusively related to Candidate Genes, Candidate
Protein Drugs and Validated Targets already produced by the Program and any
future Products arising therefrom.
SECTION 12.5. CHANGE OF CONTROL. Lilly may terminate the Millennium
Research Program upon thirty (30) days written notice if at any time majority
control of Millennium is acquired by any health care company or any other party
reasonably deemed to be a competitor of Lilly. If the Millennium Research
Program is voluntarily terminated under this Section 12.5, all rights and
obligations under this Agreement concerning the making, using or selling of all
Candidate Genes, Candidate Protein Drugs and Validated Targets already produced
by the Program, and any future Products arising therefrom, shall not be affected
by the termination of the
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Securities and Exchange Commission. Asterisks denote omissions.
Program. Following any termination of the Millennium Research Program under this
Section 12.5, Millennium shall have the right to undertake, either alone or in
collaboration with a third party, research, development and commercialization in
the Field, including research, development and commercialization that utilizes
Millennium Field Know-How and/or is covered by Millennium Field Patent Rights,
other than research, development and commercialization in the Field exclusively
related to Candidate Genes, Candidate Protein Drugs and Validated Targets
already produced by the Program and any future Products arising therefrom.
SECTION 12.6. VOLUNTARY TERMINATION BY LILLY. If at any time after the
first thirty-six (36) months of the Millennium Research Program, Lilly decides
to voluntarily terminate the Millennium Research Program, Lilly may do so by
providing to Millennium ninety (90) days notice of such termination, and by
paying to Millennium the value of the FTE payments which otherwise would have
been due between the date of such notice and the twelve (12) month period
following such notice. If the Millennium Research Program is voluntarily
terminated under this Section 12.6, all rights and obligations under this
Agreement concerning the making, using or selling of all Candidate Genes,
Candidate Protein Drugs and Validated Targets already produced by the Program,
and any future Products arising therefrom, shall not be affected by the
termination of the Program. Following any termination of the Millennium Research
Program under this Section 12.6, Millennium shall have the right to undertake,
either alone or in collaboration with a third party, research, development and
commercialization in the Field, including research, development and
commercialization that utilizes Millennium Field Know-How and/or is covered by
Millennium Field Patent Rights, other than research, development and
commercialization in the Field exclusively related to Candidate Genes, Candidate
Protein Drugs and Validated Targets already produced by the Program and any
future Products arising therefrom.
SECTION 12.7. RESIDUAL RIGHTS. Upon expiration or early termination of
this Agreement, except as provided herein to the contrary, all rights and
obligations of the parties shall cease, except as follows:
(a) Obligations to pay royalties and other sums accruing hereunder up to
the date of termination;
(b) The right to complete the manufacture and sale of Products, which
qualify as "work in process" under generally accepted cost accounting
standards or which are in stock at the date of termination, and the
obligation to pay royalties on Net Sales of such products;
(c) The obligation to pay milestones as achieved and royalties with
respect to Products;
(d) All provisions regarding confidentiality shall continue in full force
and effect;
(e) Obligations for record keeping and accounting reports for so long as
Products are sold. At such time after termination of this Agreement
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Securities and Exchange Commission. Asterisks denote omissions.
when sales or other dispositions of products have ceased, Lilly shall
render a final report along with any royalty payment due;
(f) Millennium's (and/or Lilly's) rights to inspect books and records as
described in Article IX;
(g) Obligations of defense and indemnity;
(h) Obligations set forth in Sections 6.10-6.14 but only with respect to
those causes of action which accrued prior to such termination;
(i) Any cause of action or claim of Millennium or Lilly accrued or to
accrue because of any breach or default by the other party hereunder;
(j) All other terms, provisions, representations, rights and obligations
contained in this Agreement that by their sense and context are
intended to survive until performance thereof by either or both
parties.
SECTION 12.8. RIGHTS TO WORK IN PROCESS. Within three (3) months following
the expiration of the Millennium Research Program, Lilly may designate any
potential Candidate Gene as a Candidate Gene, any potential Candidate Protein
Drug as a Candidate Protein Drug and/or any potential Validated Target as a
Validated Target, provided, however, that at the time of such designation(s)
Lilly shall pay to Millennium the appropriate milestone payment(s) set forth in
Article XVII. Upon any such designation(s), each designated Candidate Gene,
Candidate Protein Drug and/or Validated Target shall be subject to all terms and
conditions of this Agreement that relate to any Candidate Gene, Candidate
Protein Drug and/or Validated Target.
Article XIII
------------
Product Liability Indemnification
---------------------------------
Lilly agrees to defend Millennium at Lilly's cost and expense, and will
indemnify and hold Millennium and its directors, officers, employees and agents
(the "Millennium Indemnified Parties") harmless from and against any losses,
costs, damages, fees or expenses arising out of any claim relating to personal
injury from the development, manufacture, use, sale or other disposition of any
Product. In the event of any such claim against the Millennium Indemnified
Parties by any party, Millennium shall promptly notify Lilly in writing of the
claim and Lilly shall manage and control, at its sole expense, the defense of
the claim and its settlement. The Millennium Indemnified Parties shall cooperate
with Lilly and may, at their option and expense, be represented in any such
action or proceeding. Lilly shall not be liable for any litigation costs or
expenses incurred by the Millennium Indemnified parties without Lilly's prior
written authorization. In addition, Lilly shall not be responsible for the
indemnification of any Millennium Indemnified Party arising from any negligent
or intentional acts by such party.
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Securities and Exchange Commission. Asterisks denote omissions.
Article XIV
-----------
Good Faith Negotiation/Dispute Resolution
-----------------------------------------
Any controversy, claim, or dispute arising out of or relating to this
Agreement shall be settled if possible through good faith negotiations between
the parties. Only if such efforts are not successful shall such dispute be
resolved by arbitration (if agreed by the parties) or litigation.
Article XV
----------
Governing Law
-------------
This Agreement shall be construed and the respective rights of the parties
hereto determined according to the substantive laws of the State of Delaware
notwithstanding the provisions governing conflict of laws under such Delaware
law to the contrary.
Article XVI
-----------
Assignment
-----------
Neither party may assign this Agreement in whole or in part without the
consent of the other, except if such assignment occurs in connection with the
sale or transfer of all or substantially all of the business and assets of
Millennium or Lilly.
Article XVII
------------
Insolvency
----------
The parties hereto intend that the Agreement shall not be deemed an
executory contract under the Bankruptcy or Insolvency laws of the United States.
Article XVIII
-------------
Amendments
----------
This Agreement constitutes the entire agreement between the parties and
supersedes all previous arrangements whether written or oral, including the
Original Agreement, as amended. Any amendment or modification to this Agreement
shall be made in writing signed by both parties.
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Securities and Exchange Commission. Asterisks denote omissions.
Article XIX
-----------
Notices
-------
Notices to Millennium shall be addressed to:
Millennium Pharmaceuticals, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: [(000) 000-0000]
with a copy to:
Attention: Legal Department
Notices to Lilly shall be addressed to:
Xxx Xxxxx and Company, Inc.
Lilly Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Vice-President, Oncology Discovery
and Clinical Development Research
Facsimile No.: (000) 000-0000
with a copy to:
Attention: General Counsel
Either party may change its address by giving notice to the other party in
the manner herein provided. Any notice required or provided for by the terms of
this Agreement shall be in writing and sent by registered or certified mail,
return receipt requested, postage prepaid and properly addressed in accordance
with the paragraph above. The effective date of notice shall be the actual date
of receipt by the party receiving the same.
Article XX
----------
Force Majeure
-------------
No failure or omission by the parties hereto in the performance of any
obligation of this Agreement shall be deemed a breach of this Agreement or
create
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Securities and Exchange Commission. Asterisks denote omissions.
any liability if the same shall arise from any cause or causes beyond the
control of the parties, including, but not limited to, the following: acts of
God; acts or omissions of any government; any rules, regulations or orders
issued by any governmental authority or by any officer, department, agency or
instrumentality thereof; fire; storm; flood; earthquake; accident; war;
rebellion; insurrection; riot; and invasion and provided that such failure or
omission resulting from one of the above causes is cured as soon as is
practicable after the occurrence of one or more of the above-mentioned causes.
Article XXI
-----------
Representations and Warranties
------------------------------
SECTION 21.1. REPRESENTATION OF AUTHORITY. Millennium and Lilly each
represents and warrants to the other that as of the date of execution hereof it
has full right, power and authority to enter into this Agreement, including the
right to grant the licenses and sublicenses granted under Articles V hereof and
provide the Know- How under Articles III hereof, including the biological
materials, subject to the limitations set forth in this Section 21.1. Millennium
has furnished Lilly with a copy of all license agreements and options pertaining
to the Millennium Field Patent Rights and Millennium Field Know-How existing as
of the Effective Date, and by its execution and delivery of the Original
Agreement, Lilly agreed to be bound by the terms of such agreements to the
extent required thereby.
SECTION 21.2. OUTSTANDING AGREEMENTS. Appendix B lists all material
outstanding options, licenses or agreements of any kind between Millennium and
any third party relating to Millennium Field Patent Rights and Millennium Field
Know- How as of the Effective Date.
SECTION 21.3. KNOWLEDGE OF PENDING OR THREATENED LITIGATION. Each party
represents and warrants to the other that it is not aware of any pending or
threatened litigation (and has not received any communication) which alleges
that such party's activities in the Field to date have violated, or by
conducting its business as currently proposed under the Program contemplated
herein would violate, any of the intellectual property rights of any other
person. To the best of each party's knowledge, there is no material unauthorized
use, infringement or misappropriation of any of its intellectual property rights
licensed hereunder to the other party.
SECTION 21.4. EMPLOYEE OBLIGATIONS. Each party represents and warrants
that all of its employees, officers, and consultants have executed agreements or
have existing obligations under law requiring, in the case of employees and
officers, assignment to such party of all inventions made during the course of
and as the result of their association with such party and obligating the
individual to maintain as confidential such party's Confidential Information as
well as confidential
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39
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
information of a third party which such party may receive, to the extent
required to support such party's obligations under this Agreement.
Article XXII
------------
Public Announcements
--------------------
SECTION 22.1. PRESS RELEASES AND ANNOUNCEMENTS. Any announcements or
similar publicity with respect to the execution of this Agreement shall be
agreed between the parties in advance of such announcement. Lilly understands
that this Agreement and Millennium's efforts hereunder are likely to be of
significant interest to investors, analysts and others, and Millennium therefore
intends to make such public announcements with respect thereto. Millennium
agrees that any such announcement will not contain confidential business or
technical information and, if disclosure of confidential business or technical
information is required by law or regulation, will make reasonable efforts to
minimize such disclosure and obtain confidential treatment for any such
information which is disclosed to a governmental agency or group. Each party
agrees to provide to the other party a copy of any public announcement as soon
as reasonably practicable under the circumstances prior to its scheduled
release. Except under extraordinary circumstances, each party shall provide the
other with an advance copy of any press release at least five (5) working days
prior to the scheduled disclosure. Each party shall have the right to
expeditiously review and recommend changes to any announcement regarding this
Agreement or any studies carried out under this Agreement. Except as otherwise
required by law, the party whose press release has been reviewed shall remove
any information the reviewing party reasonably deems to be inappropriate for
disclosure.
SECTION 22.2. PUBLICATIONS. The parties acknowledge that scientific lead
time is a key element of the value of the research to be performed under this
Agreement and further agree that scientific publications must be strictly
monitored to prevent any adverse effect of premature publication. The Joint
Management Team will establish a procedure for publication review and approval
and each party shall first submit to the Joint Management Team an early draft of
all such publications, whether they are to be presented orally or in written
form, at least sixty (60) days prior to submission for publication. The Joint
Management Team shall review each such proposed publication in order to avoid
the unauthorized disclosure of a party's Confidential Information and to
preserve the patentability of inventions arising from the research performed in
the course of the Program. If, within thirty (30) days of receipt of an advance
copy of a party's proposed publication, the Joint Management Team informs such
party that its proposed publication contains Confidential Information of the
other party, then such party shall delete such Confidential Information from its
proposed publication. If, within thirty (30) days of receipt of an advance copy
of a party's proposed publication, the Joint Management Team informs such party
that its proposed publication could be expected to have a material adverse
effect on any Program Patent Rights or Program Know-How, then such party shall
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40
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
delay such proposed publication, sufficiently long to permit the timely
preparation and filing of a patent application(s) on the information involved.
If, within forty five (45) days of receipt of an advance copy of a party's
proposed publication, the Joint Management Team fails to approve of such party's
proposed publication, then such proposed publication shall be regarded as denied
by the Joint Management Team and shall not be published.
Article XXIII
-------------
Additional Agreements
---------------------
SECTION 23.1. INDEPENDENT CONTRACTORS. It is understood and agreed that
the relationship between the parties hereunder is that of independent
contractors and that nothing in this Agreement shall be construed as
authorization for either Lilly or Millennium to act as agent for the other.
Members of the Joint Management Team shall be, and shall remain, employees of
Millennium or Lilly, as the case may be. Neither party shall incur any liability
for any act or failure to act by members of the Joint Management Team who are
employees of the other party.
SECTION 23.2. CONSENTS NOT UNREASONABLY WITHHELD. Whenever provision is
made in this Agreement for either party to secure the consent or approval of the
other, that consent or approval shall not unreasonably be withheld, and whenever
in this Agreement provisions are made for one party to object to or disapprove a
matter, such objection or disapproval shall not unreasonably be exercised.
SECTION 23.3. NO STRICT CONSTRUCTION. This Agreement has been prepared
jointly and shall not be strictly construed against either party.
SECTION 23.4. HEADINGS. The captions or headings of the Sections or other
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
SECTION 23.5. SEVERANCE OF CLAUSES. Each party agrees that, should any
provision of this Agreement be determined by a court of competent jurisdiction
to violate or contravene any applicable law or policy, such provision will be
severed or modified by the court to the extent necessary to comply with the
applicable law or policy, and such modified provision and the remainder of the
provisions hereof will continue in full force and effect.
SECTION 23.6. NO WAIVER. The waiver of a breach hereunder may be effected
only by a writing signed by the waiving party and shall not constitute a waiver
of any other breach.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
IN WITNESS WHEREOF, this Agreement is executed this 28 day of December,
1998 to be effective as of the Effective Date.
XXX XXXXX AND COMPANY, INC. MILLENNIUM PHARMACEUTICALS, INC.
By: /S/AUGUST X. XXXXXXXX, M.D. By: /S/XXXXXX X. XXXXXXXX
----------------------------- ----------------------
August X. Xxxxxxxx, M.D. Xxxxxx X. Xxxxxxxx
Vice President and President, Chief Business Officer
Lilly Research Laboratories
December 28, 1998 December 28, 1998
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42
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
APPENDIX A
Millennium Research Program
To be provided.
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