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EXHIBIT 10.27
Application for an order granting
confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange
Act of 1934 has been made. Confidential
portions of this document have been
redacted and marked with an [*] and have
been filed with the Securities and
Exchange Commission separately with such
application.
GENOTYPES - COLLAGEN
INTELLECTUAL PROPERTY AND PRODUCTION AGREEMENT
FOR THE PRODUCTION OF COLLAGENS
USING A YEAST EXPRESSION SYSTEM
THIS PRODUCTION AGREEMENT is effective August 15, 1996 between COLLAGEN
CORPORATION, with its principal place of business at 0000 Xxxxx Xxxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000, (hereinafter "COLLAGEN") and GENOTYPES, INC., with its
principal place of business at 00 Xxxxxxx Xxxxxxxxx, Xxxxx X, Xxxxx Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000 (hereinafter "GENOTYPES").
For purposes of this Production Agreement, the term "COLLAGEN" shall
include Collagen Corporation and any corporation or other business entity
controlled by, controlling or under common control with Collagen Corporation.
For purposes of this paragraph, "control" shall mean (i) direct or indirect
beneficial ownership of greater than fifty percent (50%) of the voting stock or
equity, or greater than fifty percent (50%) interest in the income of such
corporation or other business entity, or (ii) direct control of greater than
fifty percent (50%) of the total number of seats on the Board of Directors of
such corporation or other business entity, or (iii) direct management of the
operations of such corporation or other business entity.
For purposes of this Production Agreement, the term "GENOTYPES" shall
include Genotypes, Inc. and any corporation or other business entity controlled
by, controlling or under common control with Genotypes, Inc. For purposes of
this paragraph, "control" shall mean (i) direct or indirect beneficial ownership
of greater than fifty percent (50%) of the voting stock or equity, or greater
than fifty percent (50%) interest in the income of such corporation or other
business entity, or (ii) direct control of greater than fifty percent (50%) of
the total number of seats on the Board of Directors of such corporation or other
business entity, or (iii) direct management of the operations of such
corporation or other business entity.
WITNESSETH THAT:
WHEREAS, COLLAGEN is in the business of developing, manufacturing, and
marketing biocompatible products for the treatment of defective, diseased,
traumatized, and aging tissues, and in particular is developing recombinantly
produced collagen-based materials which can be used to manufacture such
biocompatible products; and
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WHEREAS, GENOTYPES is in the business of developing yeast expression
systems for the production of various biological materials; and
WHEREAS, COLLAGEN and GENOTYPES are parties to (i) an agreement dated
April 12, 1995 entitled "Genotypes-Collagen Intellectual Property Agreement /
Development Program for Production of Type I(alpha)1 Polypeptide Chains in a
Yeast Expression System" (the "First Agreement"); and (ii) an agreement dated
August 15, 1995 entitled "Genotypes-Collagen Intellectual Property and
Development Agreement for the Production of Human Type I Procollagen In a Yeast
Expression System" (the "Second Agreement"); and
WHEREAS, COLLAGEN and GENOTYPES want to co-develop a commercial scale
method of producing [*], partially [*] and fully [*] human [*], [*], partially
[*] and fully [*] human type [*], [*], partially [*] and fully [*] human type
[*], [*], partially [*] and fully [*] human type [*] and other [*], partially
[*] and fully [*] [*] and [*], and mutants thereof, from a [*] system, which
development will require the exchange of Confidential Information (including
materials) between the parties and may result in the generation of proprietary
Know-How, Trade Secrets, and patentable technology; and
WHEREAS, the parties need to protect their individual Confidential
Information, as well as the propriety Know-How, Trade Secrets, and patentable
technology which may be generated during the course of this Production
Agreement; and
WHEREAS, COLLAGEN and GENOTYPES intend that the terms and conditions set
forth in this Production Agreement shall govern the rights and obligations of
the parties and that, upon execution of this Production Agreement, the First
Agreement and the Second Agreement shall each terminate and no provision or term
in either the First Agreement or the Second Agreement shall govern any right or
obligation of either COLLAGEN or GENOTYPES with respect to any aspect of the
relationship between COLLAGEN and GENOTYPES, including without limitation any
provision or term indicated in either such agreement to survive or to continue
or to remain in full force and effect after termination.
NOW, THEREFORE, the parties agree to the premises set forth above and to
the terms and conditions set forth below as follows:
1. Nondisclosure and Nonuse of Confidential Information
(a) "Confidential Information" of either party shall mean any and
all information concerning any aspect of that party's technology or business or
proposed business not generally known to persons not associated with that party.
"Confidential Information" shall include any and all information relating to the
production of any and all non-hydroxylated, partially hydroxylated and fully
hydroxylated procollagens and/or collagens, and consultants thereof, using a
yeast expression system which is generated under this Production Agreement, or
which was generated under either the First or Second Agreements, which is not
generally known
[*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.
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to persons not associated with either of the parties to this Production
Agreement. Confidential Information may be disclosed by one party hereto to the
other party hereto in writing or orally. However, when disclosed in writing, the
Confidential Information must be labeled as such and, when disclosed orally, the
Confidential Information must be confirmed as "Confidential" in writing within
thirty (30) days following such oral disclosure. Confidential Information shall
also include material samples, which need not be labeled as Confidential
Information to qualify as such. Information (other than material samples) which
is not specifically identified as Confidential Information will be presumed to
fall within the public domain. Confidential Information shall include any and
all information or material samples that were designated or were considered
Confidential Information pursuant to the First or Second Agreement.
(b) Each party agrees not to disclose or make use of, or allow
others to use, the Confidential Information of the other party, or the
Confidential Information generated during the term of this Production Agreement,
except as necessary to facilitate the purpose of this Production Agreement and,
in such case, the Confidential Information shall be used only by employees of
the parties, or in the case of COLLAGEN a contract organization designated by
COLLAGEN, who have a "need to know" in order to conduct activities which are the
purpose of this Production Agreement and have signed a nondisclosure agreement
with the party which employs them. Each party shall inform its employees who
have a "need to know" of their obligations of confidentiality under this
Production Agreement.
(c) A receiving party shall use at least the same standard of
care in preventing the unauthorized disclosure or use of a disclosing party's
Confidential Information and the Confidential Information generated during this
Production Agreement as such party uses to safeguard its own Confidential
Information and under no circumstances less than a reasonable standard of care.
The receiving party shall promptly return any materials and all copies thereof
of Confidential Information provided by a disclosing party upon request, except
that one copy may be retained by the receiving party for its legal records.
(d) Exceptions to and termination of confidentiality and non-use
obligations shall be the following:
With respect to any particular item of a disclosing party's Confidential
Information, the receiving party shall be under no obligation to maintain such
particular item in confidence, and may freely use such particular item at any
time for any purpose (subject only to any rights the disclosing party may have
under the patent laws) if the receiving party can document that such particular
item:
(i) Is publicly known and available not due to receiving
party's act or omission of acts; or
(ii) Was in the receiving party's possession prior to
disclosure by the disclosing party as evidenced by a written instrument; or
(iii) Comes into the receiving party's possession through
a third party free of any obligation of confidence to the disclosing party; or
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(iv) Is independently developed by an employee or
representative of the receiving party who did so without any knowledge of, or
access to, the disclosing party's Confidential Information.
Exceptions (i) and (iii) above shall apply only from and after the date such
information shall become known or generally available to the public or shall be
received from said third party, respectively.
Confidential Information shall NOT be deemed within the foregoing exceptions if:
(i) The Confidential Information is merely embraced by
more general information in the public domain or in the receiving party's
possession; or
(ii) The Confidential Information constitutes a
combination which can be reconstructed from multiple sources in the public
domain or in the receiving party's possession, but none of the individual
sources shows the entire combination of the Confidential Information.
(e) COLLAGEN and GENOTYPES acknowledge and agree that GENOTYPES
is in the business of, among other things, consulting and conducting experiments
in the use of microorganisms, including yeast, for expression and replication of
host and non-host genetic material. COLLAGEN and GENOTYPES agree that this
Production Agreement is a nonexclusive agreement for the services of GENOTYPES;
however, GENOTYPES hereby agrees not to provide consulting services to or for
any third party related to the expression of any or all nonhydroxylated,
partially hydroxylated and fully hydroxylated procollagens and/or collagens, and
mutants thereof, in yeast expression systems without first obtaining written
agreement from COLLAGEN, except as expressly set forth in paragraph 1(f).
COLLAGEN and GENOTYPES agree that nothing contained in this Production Agreement
shall be deemed to restrict in any way the freedom of COLLAGEN or GENOTYPES to
conduct any other business or activity that does not contravene or violate the
provisions of this Production Agreement. Specifically, GENOTYPES shall have a
right to use any technology developed by GENOTYPES pursuant to this Production
Agreement for replication and expression of host and non-host genetic material
other than any genetic material coding for any nonhydroxylated, partially
hydroxylated or fully hydroxylated procollagens and/or collagens, or mutants
thereof, or any genetic material transferred to GENOTYPES by COLLAGEN.
GENOTYPES' rights under this paragraph 1(e) shall not include any right to use
or otherwise exploit any intellectual property owned by COLLAGEN solely.
(f) After the year 2015, if COLLAGEN is not paying GENOTYPES
royalties pursuant either to paragraph 4(a) or paragraph 4(b) of this Production
Agreement, and COLLAGEN is not then supporting research at GENOTYPES, GENOTYPES
may provide consulting services to or for a third party, and conduct research
activities for such a third party, relating to any [*], partially [*] and fully
[*] or [*], or mutants thereof, not covered by at least one U.S. patent or
patent application co-assigned to COLLAGEN and GENOTYPES.
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(g) Any breach of the restrictions contained in this section is a
breach of this Production Agreement which will cause irreparable harm to the
non-breaching party entitling such non-breaching party to injunctive relief in
addition to all legal remedies.
2. Trade Secrets and Know-How Developed during the Production Agreement
(a) Any and all Trade Secrets and Know-How developed during the
First or Second Agreement shall be Trade Secrets and Know-How subject to this
Production Agreement, as if such Trade Secrets or Know-How were generated under
this Production Agreement.
(b) Trade Secrets and Know-How developed during the Production
Agreement shall be considered intellectual property of the Production Agreement
and shall fall under the Licensing Provisions of this Production Agreement as if
they were patented technology.
(c) The confidentiality and non-use provisions of this Production
Agreement shall apply to such Trade Secrets and Know-How, and the exceptions
under paragraph 1(d) shall not apply under circumstances such that intellectual
property rights of value would be lost to the Production Agreement or to any
business developed based on products generated as a result of that Production
Agreement.
(d) A Trade Secret, as defined under the Uniform Trade Secrets
Act, may consist of any formula, pattern, device, or compilation of information
relating to the production of any and all non-hydroxylated, partially
hydroxylated and fully hydroxylated procollagens and/or collagens, and mutants
thereof, using a yeast expression system and which gives the parties an
opportunity to obtain an advantage over competitors who do not know or use it.
Know-How may consist of any technical data or technical skill particularly
related to production of any and all [*], partially [*] and fully [*] and/or
[*], and mutants thereof, using a yeast expression system and which can be used
to provide an advantage over competitors who do not know or use it. For purposes
of this Production Agreement, a Trade Secret and Know-How shall not under any
circumstance be considered or interpreted to include any formula, pattern,
device, or compilation of information, or any technical data or technical skill,
or any plasmid, expression construct, yeast strain, and procedures and methods
for construction, utilization or growth of same, generated by GENOTYPES on its
own behalf or on behalf of third parties and not relating to production of [*],
partially [*] and fully [*] or [*], or mutants thereof, using a yeast expression
system. In addition, for purposes of this Production Agreement, a Trade Secret
and Know-How shall not under any circumstance be considered or interpreted to
include any formula, pattern, device, or compilation of information, or any
technical data or technical skill, generated by COLLAGEN on its own behalf or on
behalf of third parties.
(e) Any breach of the restrictions contained in this section is a
breach of this Agreement which will cause irreparable harm to the non-breaching
party entitling such non-breaching party to injunctive relief in addition to all
legal remedies.
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3. Intellectual Property Rights
(a) An Invention shall mean any discovery, concept or idea,
whether patentable or not patentable, including without limitation all Trade
Secrets and Know-How, conceived and/or reduced to practice jointly by COLLAGEN
and GENOTYPES during the term of this Production Agreement, or during the term
of the Second Agreement, or during the term of the First Agreement, relating to
the production of any and all [*], partially [*] and fully [*] and/or [*], and
mutants thereof, using a [*] or the purification of any and all [*], partially
[*] and fully [*] and/or [*], and mutants thereof, produced using a [*]. Any
and all Inventions conceived and/or reduced to practice either under the First
Agreement or the Second Agreement shall be considered Inventions subject to
this Production Agreement, as if those Inventions were conceived and/or reduced
to practice under this Production Agreement. For purposes of this Production
Agreement, an Invention shall not under any circumstance be considered or
interpreted to include any discovery, concept or idea conceived and/or reduced
to practice by GENOTYPES on its own behalf or on behalf of third parties and
not relating either to the production of [*], partially [*] and fully [*]
and/or [*], and mutants thereof, using a [*], or the purification of any and
all [*], partially [*] and fully [*] and/or [*], and mutants thereof, produced
using a [*] system. In addition, for purposes of this Production Agreement, an
Invention shall not under any circumstance be considered or interpreted to
include any discovery, concept or idea conceived and/or reduced to practice by
COLLAGEN on its own behalf or on behalf of third parties.
(b) Any and all Inventions conceived and/or reduced to practice
under the terms and conditions of this Production Agreement shall be considered
to be co-owned by and co-assigned to COLLAGEN and GENOTYPES hereunder. Each of
the parties shall take all steps required in order to effectuate co-ownership by
and co-assignment to COLLAGEN and GENOTYPES of any and all Inventions. Licensing
of third parties by GENOTYPES of an Invention made under the terms and
conditions of this Production Agreement shall be limited to applications which
are not competitive with any product line either on the market or under
development by COLLAGEN at the time of such third party licensing. Further,
COLLAGEN shall be given a right of first refusal for an exclusive license to an
Invention made under the terms of this Production Agreement, which Invention is
not competitive with an existing COLLAGEN product line, prior to such licensing
to third parties, with COLLAGEN to respond within 60 days of receipt of notice
from GENOTYPES that GENOTYPES intends to license such third party. Licensing of
an Invention to third parties by either COLLAGEN or GENOTYPES shall require the
party licensing the third party to pay to the other party to this Production
Agreement (the co-owner of the Invention) a running royalty equal in amount to
that specified for payment by COLLAGEN to GENOTYPES under the licensing
provisions which follow in paragraph 4 of this Production Agreement.
(c) Each party shall maintain ownership of intellectual property
developed prior to this Production Agreement and prior to the First and Second
Agreements. Further, each
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party shall have ownership of any independently developed technology during the
terms of this Production Agreement or during the term of either the First
Agreement or the Second Agreement. If independently developed technology is
sufficiently closely related to the production of any and all non-hydroxylated,
partially hydroxylated and fully hydroxylated procollagens and/or collagens, and
mutants thereof, using a yeast expression system, or the purification of any and
all non-hydroxylated, partially hydroxylated and fully hydroxylated procollagens
and/or collagens, and mutants thereof, produced using a yeast expression system
which is the subject matter of this Production Agreement that one skilled in the
art would conclude that such technology was the product of the Production
Agreement, then the party claiming independent development shall have the burden
of proof, by written documentation, that the technology was independently
developed and that no concepts involved in such technology originated from
Confidential Information provided by the other party to this Production
Agreement.
(d) Expenses for preparation, prosecution, and maintenance of
patents for Inventions developed under the terms of this Production Agreement
shall be handled as follows:
(i) Where an Invention made under the terms of this
Production Agreement is deemed patentable by COLLAGEN, COLLAGEN shall, at its
own expense, prepare, file, and prosecute all patent applications related to
said Invention. GENOTYPES shall fully cooperate with COLLAGEN, on a worldwide
basis, in the development, preparation, execution, assignment, prosecution,
issuance and maintenance of all patent applications related to said Invention.
In the event that COLLAGEN elects not to file an application for patent
protection on an Invention, GENOTYPES may proceed to file and prosecute a patent
application related to said Invention, in which event, COLLAGEN shall fully
cooperate with GENOTYPES on a worldwide basis in the development, preparation,
execution, assignment, prosecution, issuance and maintenance of all patent
applications related to said Invention; and GENOTYPES shall bear the costs and
fees relating to all phases of such patenting activities. In the event that
after filing an application for patent protection on an Invention, the party
that filed such application elects not to continue prosecution of such
application, the other party hereto may proceed to prosecute such patent
application related to said Invention, in which event, the party that filed such
application shall fully cooperate with the party prosecuting such application on
a worldwide basis in the development, preparation, execution, assignment,
prosecution, issuance and maintenance of all patent applications related to said
Invention; and the party prosecuting such application shall bear the costs and
fees relating to all phases of such patenting activities. COLLAGEN and GENOTYPES
agree to maintain the existence of any patent application filed pursuant to this
Production Agreement in confidence until such patent application is published,
except as required for financial or legal disclosures. Each party shall bear its
own costs for assisting the other party in the preparation and prosecution of
any patent application, unless the number of hours involved in assisting the
other party exceeds 25 hours. In the event that more than 25 hours of assistance
are required, the assisting party shall be entitled to compensation, with the
amount of compensation to be negotiated by the parties in good faith at the time
it becomes apparent that more than 25 hours of assistance will be required. All
patents for Inventions made during the term of this Production Agreement shall
reflect equal ownership of the parties and shall be considered co-owned by and
co-assigned to the parties, without
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consideration of inventorship and without consideration of which party has paid
the costs and fees relating to all phases of such patenting activities. Patents
falling under the terms of this Production Agreement are intended to include all
original applications, continuations, divisional applications, reissues, and
continuation-in-part applications which claim legal priority from an application
for an Invention made under the terms of this Production Agreement and any and
all patents issuing thereon.
(ii) Maintenance fees and all service fees associated
therewith during the prosecution of a patent application shall be paid by the
party responsible for prosecution of the patent application. Maintenance fees
due for the issued patent shall be paid by the party responsible for prosecution
of the patent application, with that party having the right to discontinue
payment of such maintenance fees within sixty (60) days of having given notice
to the other party who may elect to continue payment of such maintenance fees.
(iii) COLLAGEN shall have the right to enforce any patent
which issues for an Invention made under the terms of this Production Agreement,
and shall at all times keep GENOTYPES informed as to the status thereof.
COLLAGEN may, at its sole judgment and its own expense, institute suit against
any such infringer or alleged infringer and control, settle, and defend such
suit in a manner consistent with the terms and provisions hereof and recover for
its accounts any damage, awards, or settlements resulting therefrom, subject to
paragraph 3(d)(v) below. This right to xxx for infringement shall not be used in
an arbitrary or capricious manner. GENOTYPES shall reasonably cooperate in any
such litigation at COLLAGEN's expense.
(iv) If COLLAGEN becomes aware of any patent infringement
and elects not to enforce any patent which issues for an Invention made under
the terms of this Production Agreement, then COLLAGEN shall so notify GENOTYPES
in writing, and GENOTYPES may, in its sole judgment and its own expense, do so
and control, settle, and defend such suit in a manner consistent with the terms
and provisions hereof and recover, for its own account, any damages, awards, or
settlements resulting therefrom. GENOTYPES shall at all times keep COLLAGEN
informed as to the status of any such suit. COLLAGEN shall reasonably cooperate
in such litigation at GENOTYPES' expense.
(v) Any compensatory damages received by COLLAGEN under
paragraph 3(d)(iii), above, shall be deemed to reflect loss of commercial sales,
and COLLAGEN shall pay GENOTYPES a royalty in accordance with this Production
Agreement on said lost sales net of all reasonable litigation costs and expenses
(including all reasonable attorneys' fees and disbursement, experts' fees and
disbursements, court costs, stenographers' fees and disbursements, and any other
reasonable fees and disbursements associated with the suit and litigation
activities and legal opinions obtained in connection therewith); provided
however, if damages are awarded in excess of compensatory damages, then said
litigation costs and expenses shall be deducted therefrom first, with any
remaining expenses then deducted from the compensatory damages.
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(e) GENOTYPES shall provide to COLLAGEN all yeast, yeast strains,
yeast constructs, plasmids and other products and materials developed during the
course of this Production Agreement upon COLLAGEN's request, [*] by COLLAGEN to
GENOTYPES of [*].
All yeast, yeast strains, yeast constructs, plasmids and other
products and materials developed during the course of and pursuant to this
Production Agreement shall be co-owned by COLLAGEN and GENOTYPES. COLLAGEN may
use such materials solely for the development of products containing
non-hydroxylated, partially hydroxylated and fully hydroxylated procollagens
and/or collagens, and mutants thereof, expressed from yeast. However, COLLAGEN
may not transfer or sell any yeast strains, yeast constructs or plasmids
developed during the course of this Production Agreement to any affiliates,
subsidiaries, licensees or any other third parties without the permission of
GENOTYPES, such permission not to be unreasonably withheld. GENOTYPES may not
transfer or sell to any affiliates, subsidiaries, licensees or any other third
parties any yeast strains, yeast constructs or plasmids developed during the
course of this Production Agreement which contain any genetic material coding
for any non-hydroxylated, partially hydroxylated and fully hydroxylated
procollagens and/or collagens, and mutants thereof, or any genetic material
transferred to GENOTYPES by COLLAGEN.
(f) COLLAGEN agrees to purchase, at its sole discretion, a
fermenter to be utilized by GENOTYPES at GENOTYPES' facility. COLLAGEN agrees to
allow GENOTYPES to use such fermenter for other projects not related to this
Production Agreement, so long as the work conducted pursuant to this Production
Agreement receives priority. If GENOTYPES achieves the requirements of each
milestone described in paragraph 5(a) below at least 30 days before the date
corresponding to each such milestone, then COLLAGEN shall [*]. However, if
GENOTYPES fails to satisfy the requirements of each such milestone at least 30
days before the date corresponding to each such milestone, [*].
4. Licensing
(a) COLLAGEN hereby agrees to pay GENOTYPES a running royalty in
the amount of [*]% of Net Sales Price (as defined in paragraph 4(e) below) from
any product containing any [*] developed in whole or in part as a result of
research performed in accordance with this Production Agreement or in accordance
with the First Agreement or the Second Agreement (collectively, "Products"),
provided that such Products, or the method of producing such Products, are
covered by at least one issued and non-expired patent co-assigned to
[*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.
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COLLAGEN and GENOTYPES in the country in which such Products are
sold. However, if an issued patent which covers such a Product and which is
co-assigned to COLLAGEN and GENOTYPES is determined to be unenforceable by a
court or, where applicable, an agency or other government body of competent and
final jurisdiction over patent matters in the country where such patent has
issued, such an unenforceable patent, thereafter, shall not be considered a
"patent" for purposes of this paragraph 4(a).
(b) COLLAGEN hereby agrees to pay GENOTYPES a running royalty in
the amount of [*]% of Net Sales Price from Products, provided that such Products
are produced by any person and/or entity using any yeast expression system
developed in whole or in part as a result of research performed in accordance
with this Production Agreement or in accordance with the First Agreement or the
Second Agreement. No royalty shall be due if such Products are produced using a
yeast expression system that was not developed in whole or in part as a result
of research performed in accordance with this Production Agreement, or in
accordance with the First Agreement or the Second Agreement. COLLAGEN's
obligation to pay GENOTYPES a running royalty under this paragraph 4(b) shall
apply to each country in which Products are sold and shall extend to, and shall
not extend beyond, [*] and payment shall be made only in the event that [*] is
[*] by [*] to [*] paragraph [*]. After [*] may [*] any Products with [*] to [*]
pursuant to this paragraph 4(b).
(c) [*] shall be payable to GENOTYPES by COLLAGEN on any Product
sold in accordance with this Production Agreement because the manufacture, use,
or sale of said product are or shall be covered by: (i) more than one patent
application or patent co-assigned to COLLAGEN and GENOTYPES under this
Production Agreement or the First or Second Agreements; or (ii) both a patent
co-assigned to COLLAGEN and GENOTYPES and Know-How or Trade Secrets owned by
COLLAGEN and GENOTYPES or by GENOTYPES individually; or (iii) a patent to
GENOTYPES for an invention, the use of which is necessary to accomplish a
patented Invention made during this Production Agreement.
(d) With regard to the technology owned by GENOTYPES prior to
this Production Agreement, or developed independently of the Production
Agreement by GENOTYPES during the term of this Production Agreement and owned by
GENOTYPES, no royalty (except as otherwise set forth in paragraph 4(a) and/or
paragraph 4(b) above) shall be owed to GENOTYPES by COLLAGEN for use of such
technology when such use is necessary to produce Products in accordance with the
milestones set forth in paragraph 5 of this Production Agreement, or to permit
use of Inventions, Know-How or Trade Secrets which are co-assigned to the
parties. In connection with the use described in this paragraph, GENOTYPES
grants COLLAGEN a nonexclusive worldwide right and license to use such
technology to make, use, sell, offer to sell, import and distribute Products.
[*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.
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(e) "Net Sales Price" shall mean the [*] on the [*] by COLLAGEN
for sale of Products, [*] and [*],[*],[*] or [*],[*] and [*], and [*], all as
[*] by [*]. If, prior to sale of any Product to a third party, COLLAGEN adds
biologically active agents to such Product, the Net Sales Price of such Product
shall be [*] to COLLAGEN for the biologically active agents added. As used
herein, the term biologically active agents does not include [*].
COLLAGEN and GENOTYPES agree that any [*] of the cost of biologically active
agents is the actual cost (as evidenced by invoice) [*] to a [*] for COLLAGEN's
actual purchase and acquisition cost of said biologically active agents. Such
purchase and acquisition cost [*].
In the event that any Product is [*] for [*], Net Sales Price shall [*] the [*]
of such [*] at the time of COLLAGEN's receipt thereof.
(f) [*] royalties shall be due for samples of Products provided
by COLLAGEN to third parties for the purpose of obtaining marketing approvals
for Products, and for market introduction and acceptance of such Products.
(g) Until COLLAGEN has the capability of producing [*], GENOTYPES
agrees to [*] relating to [*] produced in the [*] due to Stanford University for
licensing of the [*] during the term of this agreement. In no case shall
GENOTYPES pay more than $[*] in any year under this paragraph 4(g). After
COLLAGEN has the capability of producing [*] in the [*] shall have
responsibility for [*] any and all payments due to Stanford University for
licensing of the [*] for activities of [*].
(h) COLLAGEN and GENOTYPES each agree to conduct any and all
negotiations with third parties relating to the granting of any right and
license under Inventions, Trade Secrets and/or Know-How in good faith and in
accordance with, and as permitted under, the terms and conditions of this
Production Agreement subject to an appropriate confidentiality and non-use
restrictions so as to maintain such Inventions, Trade Secrets and/or Know-How
and the potential uses of same by third parties in confidence.
(i) COLLAGEN shall keep accurate books and records in sufficient
detail to enable the royalties due GENOTYPES pursuant to this Production
Agreement to be determined. Such books and records shall be kept at COLLAGEN's
principal place of business and shall be retained by COLLAGEN for three (3)
years following the end of the calendar year to which they pertain.
[*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.
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(j) During the period that COLLAGEN has an obligation to pay to
GENOTYPES royalties pursuant to 4(a) and (b) above and for an additional period
of one year thereafter, upon the written request of GENOTYPES, at GENOTYPES'
expense and not more than once during each calendar year, COLLAGEN shall permit
an independent public accountant selected by GENOTYPES and reasonably acceptable
to COLLAGEN to have access during normal business hours to COLLAGEN's books and
records as may be reasonably necessary for the purpose of verifying (i) the
accuracy of reports provided to GENOTYPES pursuant to this Production Agreement,
and (ii) the status of entities purchasing or otherwise receiving Products (as
defined in paragraph 4(a) above) from COLLAGEN. In the event that an independent
public accountant selected by GENOTYPES pursuant to this paragraph 4(j)
concludes that additional royalties were owed to GENOTYPES, COLLAGEN shall pay
such additional royalties promptly.
(k) All royalty payments due and payable to GENOTYPES under this
Production Agreement shall be paid on a calendar quarterly basis in United
States of America dollars. Such payments shall be provided to GENOTYPES via the
United States Postal Service by letter posted first class and addressed to
GENOTYPES, INC., Attention: Xx. Xxx Xxxxxxxx, or other GENOTYPES appointed
designee, to the address set forth above. Such letter shall be posted by
COLLAGEN not later than the close of business on the 30th business day after the
close of each calendar quarter for which such royalty payment is due and
payable.
5. Deliverables and Payments Under The Production Agreement
(a) GENOTYPES, unless otherwise agreed in writing between
COLLAGEN and GENOTYPES, will use its best efforts to achieve expression of human
collagens (as further described below) in a five or ten liter bioreactor that is
at least 1% by weight of soluble yeast protein as periplasmic or media localized
trimer meeting the specifications set forth below on or before the date of
delivery by GENOTYPES to COLLAGEN of yeast which, after analysis by COLLAGEN,
fulfills the requirements as set forth below:
Milestone Date of Delivery
--------- ----------------
1. Human Type I collagen having a [*] at [*] [*]
degrees [*] that is capable of [*].
2. Human Type I collagen containing [*] and having [*]
a [*] at [*] degrees [*] that is capable of [*].
3. Human type II collagen having a [*] at [*] [*]
degree [*] that is capable of fiber [*].
[*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.
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COLLAGEN will provide to GENOTYPES the cDNA for the protein to be expressed
under this Production Agreement. COLLAGEN will verify the sequence of any cDNAs
provided to GENOTYPES for expression in yeast and will also test for
functionality of gene in its homologous environment during GENOTYPE's work on
the system.
(b) Upon expression of each [*], as set forth above, GENOTYPES
will provide [*], and [*] materials to COLLAGEN for analysis for the detection
and quantification of [*] in the [*]. Such analysis shall determine whether
GENOTYPES has satisfied the requirements for the milestones set forth in
paragraph 5(a). COLLAGEN will promptly perform [*].
(c) GENOTYPES will prepare and submit to COLLAGEN quarterly
written reports summarizing progress on the activities conducted by GENOTYPES
pursuant to this Production Agreement. GENOTYPES will prepare and submit to
COLLAGEN a final written report within thirty (30) days following expiration or
termination of this Production Agreement.
(d) Upon execution of this Production Agreement, COLLAGEN will
pay to GENOTYPES $[*] for performance of [*] month's work for the period [*] to
[*]. Thereafter, COLLAGEN shall pay to GENOTYPES $[*] on the first day of each
month thereafter until the total of all payments by COLLAGEN to GENOTYPES under
this Production Agreement shall equal $[*]. COLLAGEN shall have no obligation to
pay to GENOTYPES any amount in excess of $[*] unless otherwise agreed to in
writing by COLLAGEN and GENOTYPES.
(e) [*] payments made by COLLAGEN to GENOTYPES under paragraph
5(d) of this Production Agreement, and [*] payments made by COLLAGEN to
GENOTYPES under either the First Agreement or the Second Agreement, shall be
[*]. If this Production Agreement is terminated by COLLAGEN in accordance with
paragraph 6(a), COLLAGEN shall have no obligation to make any payments to
GENOTYPES pursuant to paragraph 5(d) of this Production Agreement after the
effective date of such termination.
(f) COLLAGEN and GENOTYPES agree that GENOTYPES and COLLAGEN will
use their [*] to achieve the milestones set forth in paragraph 5(a) above. In
addition, COLLAGEN agrees that COLLAGEN's obligation to make payments to
GENOTYPES, as set forth in paragraph 5(d), is [*] set forth in paragraph 5(a).
6. Term and Termination
(a) This Production Agreement shall terminate on the last day of
the month during which COLLAGEN makes the final payment to GENOTYPES pursuant to
paragraph 5(d) above, unless terminated prior to such date in accordance with
the terms of this Production
[*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.
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Agreement set forth below. After October 1, 1997, COLLAGEN may
provide written notice to GENOTYPES that COLLAGEN desires to terminate this
Production Agreement. Such termination may be for any reason or for no reason.
The effective date of such a termination shall be the date one hundred eighty
days (180) after the date of such written notice to GENOTYPES. In the event that
GENOTYPES is unable to provide the equivalent of three (3) full time trained
employees to work on the Production Agreement, or in the event that GENOTYPES
breaches, or is unwilling or unable to perform under, any provision of this
Production Agreement for any reason (including unforeseeable causes that are
beyond GENOTYPES' control, including without limitation, acts of God or of a
public enemy, acts of government (other than those relating to prices), fires,
floods, epidemics, quarantine restrictions, strikes, freight embargoes, and
unusually severe weather), COLLAGEN reserves the right to terminate this
Production Agreement by giving GENOTYPES thirty (30) days advanced written
notice of such termination. The effective date of such a termination by COLLAGEN
for breach or other actions by GENOTYPES shall be the date thirty (30) after the
date of such written notice to GENOTYPES.
(b) GENOTYPES agrees, upon COLLAGEN's written request, to
cooperate with and provide Know-How to transfer technology developed during the
course of this Production Agreement to COLLAGEN, or to a contract organization
designated by COLLAGEN, for the manufacture of human recombinant collagen using
a yeast expression system. During the term of this Production Agreement,
services rendered in connection with transfer of said technology to COLLAGEN or
to a contract organization designated by COLLAGEN shall be provided by GENOTYPES
at no additional cost or expense. After the term of this Production Agreement,
COLLAGEN will compensate GENOTYPES at a rate of $[*] per hour plus [*] for
services rendered in connection with the transfer of said technology to COLLAGEN
or to a contract organization designated by COLLAGEN. Compensation for such [*].
Payments by COLLAGEN to GENOTYPES for GENOTYPES' expenses in connection with
said technology transfer (including related travel expenses) shall not exceed a
total of $[*] corresponding to a total of [*] hours of services by GENOTYPES.
Thereafter, if COLLAGEN desires additional assistance in connection with
technology transfer under this paragraph 6(b), such assistance shall be provided
by GENOTYPES only in accordance with the terms and conditions expressly agreed
upon by both COLLAGEN and GENOTYPES.
(c) Upon termination of this Production Agreement, the following
paragraphs will remain in full force and effect: 1(a), 1(b), 1(c), 1(d), 1(e), 1
(f), 1(g), 2(a), 2(b), 2(c), 2(d), 2(e), 3(a), 3(b), 3(c), 3(d), 3(e), 3(f),
4(a), 4(b) 4(c), 4(d), 4(e), 4(f), 4(g), 4(h), 4(i), 4(j), 4(k), 5(c), 5(e),
6(a), 6(b), 6(c), 7, 8(a), 8(b), 8(c), 8(d), 8(e), 8(f), 8(g) and 8(h).
[*] Application for an order granting confidential treatment pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934 has been made. Confidential
portions of this document have been redacted and marked with an [*] and have
been filed with the Securities and Exchange Commission separately with such
application.
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15
7. Independent Contractor
The relationship between GENOTYPES and COLLAGEN established by
this Production Agreement shall be that of independent contractors. GENOTYPES'
employees will not be eligible for any COLLAGEN employee benefits. COLLAGEN's
employees will not be eligible for any GENOTYPES employee benefits. GENOTYPES
shall have no authority to enter into contracts which bind COLLAGEN or to create
obligations on the part of COLLAGEN without prior written authorization of
COLLAGEN. COLLAGEN shall have no authority to enter into contracts which bind
GENOTYPES or to create obligations on the part of GENOTYPES without prior
written authorization of GENOTYPES.
8. General Provisions
(a) The laws of the State of California of the United States of
America shall govern this Production Agreement.
(b) COLLAGEN and GENOTYPES acknowledge that GENOTYPES makes no
express or implied warranties about the results or lack thereof of research
conducted pursuant to this Production Agreement. Further, COLLAGEN and GENOTYPES
acknowledge that any strain and/or plasmid and/or other material that is part of
an Invention made under the terms of this Production Agreement may, in order for
said Invention to be used to produce a product to be sold require the payment of
moneys to third parties (parties other than GENOTYPES) by COLLAGEN, in the form
of license fees and/or royalties.
(c) COLLAGEN and GENOTYPES each agree to provide the other with
copies of all press releases in advance of their release for review. No
authorization is given by either party to use individual employee names of
either party without express written authorization.
(d) Authorship of any and all publications arising out of or in
connection with the research conducted under this Production Agreement relating
to production of non-hydroxylated, partially hydroxylated and/or fully
hydroxylated procollagens and/or collagens, or mutants thereof, using a yeast
expression system shall be determined in accordance with generally accepted
standards, including without limitation the degree of individual participation
of individual scientists at COLLAGEN and of individual scientists at GENOTYPES.
Any publication by GENOTYPES arising out of or in connection with the research
conducted under this Production Agreement relating to production of
non-hydroxylated, partially hydroxylated and/or fully hydroxylated procollagens
and/or collagens, or mutants thereof, using a yeast expression system shall
acknowledge the support of such research by COLLAGEN. GENOTYPES and COLLAGEN
each shall use reasonable efforts to provide notice to the other party hereto of
any publication and any presentation, whether written or orally relating to
production of non-hydroxylated, partially hydroxylated and/or fully hydroxylated
procollagens and/or collagens, or mutants thereof, using a yeast expression
system at scientific meetings.
(e) This Production Agreement represents the entire agreement
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments, or
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communications, with respect to such subject matter, including without
limitation the First and Second Agreements.
(f) This Production Agreement may only be amended in writing by
both of the parties. All notices, requests, and other communications called for
by this Production Agreement shall be deemed to have been given if made in
writing and mailed, postage paid, to the parties at the addresses set forth
above.
(g) The rights and liabilities of the parties hereto will bind
and inure to the benefit of their successors, executors or administrators;
provided that as COLLAGEN has specifically contracted for GENOTYPES' services,
GENOTYPES may not assign or delegate its obligations under this Production
Agreement either in whole or in part, without prior written consent of COLLAGEN.
COLLAGEN shall be entitled to assign this Production Agreement to a successor to
all or substantially all of its assets relating to the subject matter of this
Production Agreement, whether by sale, merger or otherwise. Any permitted
assignee or transferee shall agree in writing to GENOTYPES to comply with and be
bound by all terms and restrictions contained in this Production Agreement. Any
attempted assignment in violation of the provisions of this paragraph 8(g) will
be void.
(h) The invalidity of any portions hereof shall not affect the
validity, force, or effect of the remaining portions hereof.
The parties hereto have executed this Production Agreement in
duplicate originals by duly authorized representatives.
COLLAGEN CORPORATION GENOTYPES, INC.
("COLLAGEN") ("GENOTYPES")
/s/ Xxxxx Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
------------------------------- -------------------------------
Xxxxx Xxxxxx Xxxxxx X. Xxxxxxxx, Ph.D.
Vice President President and Research Director
Date: September 26, 1996 Date: September 26, 1996
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