EXHIBIT 10.5
RESEARCH, DEVELOPMENT AND
COLLABORATION AGREEMENT
XXXXXX-XXXXXXX COMPANY
AND
GENVEC, INC.
JULY 21, 1997
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS.............................................................. 2
1.1 "Affiliate"......................................................... 2
1.2 "Agency"............................................................ 2
1.3 "Background Technology"............................................. 2
1.4 "Bulk Product"...................................................... 2
1.5 "Collaboration Product"............................................. 2
1.6 "Collaboration Technology".......................................... 2
1.7 "Control"........................................................... 2
1.8 "Co-Promotion Country".............................................. 2
1.9 "Core U.S. Dossier"................................................. 3
1.10 [*]................................................................. 3
1.11 [*]................................................................. 3
1.12 [*]................................................................. 3
1.13 "Development"....................................................... 3
1.14 "Development Candidate"............................................. 3
1.15 [*]................................................................. 3
1.16 "Development Plan".................................................. 4
1.17 "Drug Development Committee"........................................ 4
1.18 "Effective Date".................................................... 4
1.19 "Executive Committee"............................................... 4
1.20 "Field"............................................................. 4
1.21 "Finished Product".................................................. 4
1.22 "GAAP".............................................................. 4
1.23 "Gene Therapy"...................................................... 4
1.24 "IND"............................................................... 4
1.25 "Invention(s)"...................................................... 4
1.26 "Know-How".......................................................... 4
1.27 [*]................................................................. 4
1.28 "Party"............................................................. 5
1.29 "Patent Rights"..................................................... 5
1.30 "Phase I", "Phase II", and "Phase III".............................. 5
1.31 "Pivotal"........................................................... 6
1.32 "Pre-Clinical Activities"........................................... 6
1.33 "Pre-Clinical Development Criteria"................................. 6
1.34 [*]................................................................. 6
1.35 "Product License Application" or "PLA".............................. 6
1.36 "Project Team Leader"............................................... 6
1.37 "Regulatory Approval"............................................... 6
1.38 "Research Management Committee"..................................... 6
1.39 "Research Plan"..................................................... 6
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1.40 "Research Program"............................................... 6
1.41 "Scientific FTE"................................................. 6
1.42 "Scios Agreement"................................................ 6
1.43 "Second Source".................................................. 7
1.44 "Stock Purchase Agreement"....................................... 7
1.45 "Sublicensee".................................................... 7
1.46 "Term of the Agreement".......................................... 7
1.47 "Term of the Research Program"................................... 7
1.48 "Territory"...................................................... 7
1.49 "Third Party".................................................... 7
1.50 "VEGF"........................................................... 7
1.51 "Valid Claim".................................................... 7
2. RESEARCH PROGRAM....................................................... 7
2.1 Collaborative Research............................................ 7
2.2 Research Program Expenses......................................... 8
2.3 Records; Reports.................................................. 10
2.4 Term and Termination of Research Program.......................... 11
2.5 Field Restriction................................................. 12
2.6 Gene Therapy Products Outside the Field........................... 14
3. COMMITTEES............................................................. 14
3.1 Executive Committee............................................... 14
3.2 Research Management Committee..................................... 15
3.3 Drug Development Committee........................................ 16
3.4 Meetings.......................................................... 17
3.5 Dispute Resolution................................................ 17
4. DEVELOPMENT............................................................ 17
4.1 Selection of Development Candidates and Collaboration Products.... 17
4.2 Collaborative Development......................................... 18
4.3 Pre-Clinical Activities........................................... 18
4.4 Development Plan.................................................. 18
4.5 [*]............................................................... 19
4.6 [*]............................................................... 19
4.7 [*]............................................................... 19
4.8 Suspension or Termination of Collaborative Development............ 20
5. LICENSE GRANTS......................................................... 21
5.1 Grant by GenVec................................................... 21
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
5.2 Grant by Warner...................................................... 22
5.3 Licenses to Affiliates............................................... 22
5.4 Sublicenses.......................................................... 22
5.5 Cross-Licenses....................................................... 22
5.6 Retained Rights...................................................... 22
5.7 Covenant Not to Xxx.................................................. 23
5.8 No Unauthorized Use.................................................. 23
5.9 No Implied Licenses.................................................. 23
6. CONSIDERATION 23
[*]
6.2 Purchase of GenVec Stock............................................. 23
6.3 Research Program and Development Funding............................. 23
6.4 Milestone Payments................................................... 24
6.5 Royalties............................................................ 25
6.6 Third Party Royalties................................................ 26
6.7 Withholding Taxes.................................................... 27
6.8 Guaranty............................................................. 27
7. BOOKS AND RECORDS......................................................... 27
7.1 [*].................................................................. 27
7.2 Payment Method; Late Payments........................................ 28
7.3 Currency Conversion.................................................. 28
7.4 Restrictions on Payments............................................. 28
7.5 Records; Inspection.................................................. 28
8. COMMERCIALIZATION IN THE TERRITORY........................................ 29
8.1 Collaboration Product Development.................................... 29
8.2 Due Diligence........................................................ 29
8.3 Commercialization Outside the Territory and Co-Promotion Countries... 31
9. CO-PROMOTION OPTION....................................................... 31
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THE OMITTED PORTIONS.
10. TRADEMARKS..................................................................... 32
10.1 Warner Trademarks........................................................ 32
10.2 GenVec Trademarks........................................................ 32
10.3 Use of Trademarks........................................................ 32
11. SUPPLY OF COLLABORATION PRODUCTS............................................... 33
11.1 Manufacture of Bulk Product by GenVec.................................... 33
11.2 Manufacture of Finished Product by Warner................................ 33
11.3 Warner's Right to Identify and Qualify Second Source for Bulk Product.... 34
11.4 Use of Second Source for Bulk Product.................................... 34
11.5 Terms of Manufacture and Supply.......................................... 34
11.6 [*]...................................................................... 35
12. REGULATORY AFFAIRS............................................................. 35
12.1 Side Effects............................................................. 35
12.2 Regulatory and Other Inquiries........................................... 36
12.3 [*]...................................................................... 36
12.4 Access to Regulatory Filings............................................. 36
12.5 [*]...................................................................... 36
13. DEVICE DELIVERY................................................................ 37
13.1 Device Plan.............................................................. 37
13.2 Device Agreement......................................................... 37
14. INTELLECTUAL PROPERTY.......................................................... 37
14.1 Ownership of Technology.................................................. 37
14.2 Solely-Owned Patent Rights............................................... 38
14.3 Jointly Owned Inventions................................................. 38
14.4 Enforcement.............................................................. 39
14.5 [*]...................................................................... 40
14.6 Independent Inventions................................................... 41
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15. OTHER ACTIVITIES................................................. 41
15.1 Product Configurations..................................... 41
15.2 [*]........................................................ 41
15.3 [*]........................................................ 42
16. REPRESENTATIONS AND WARRANTIES................................... 42
16.1 Legal Authority............................................ 42
16.2 No Conflicts............................................... 42
16.3 Others Bound............................................... 42
16.4 Disclaimer................................................. 42
16.5 Disclaimer of Warranties................................... 42
17. CONFIDENTIALITY.................................................. 43
17.1 Confidential Information................................... 43
17.2 Permitted Disclosures...................................... 43
17.3 Publicity.................................................. 44
17.4 Publication................................................ 44
18. INDEMNIFICATION.................................................. 45
18.1 Warner..................................................... 45
18.2 GenVec..................................................... 45
18.3 Procedure.................................................. 45
18.4 Insurance.................................................. 46
19. TERM AND TERMINATION............................................. 46
19.1 Term....................................................... 46
19.2 Termination for Cause...................................... 46
19.3 Effect of Bankruptcy....................................... 46
19.4 Termination Relating to Competing Products................. 46
19.5 Termination of Research Program............................ 47
19.6 Effect of Termination...................................... 47
19.7 Survival................................................... 48
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THE OMITTED PORTIONS.
20. DISPUTE RESOLUTION.................................................... 48
20.1 Mediation...................................................... 48
20.2 Venue.......................................................... 48
21. MISCELLANEOUS......................................................... 49
21.1 Governing Law.................................................. 49
21.2 Waiver......................................................... 49
21.3 [*]............................................................ 49
21.4 Notices........................................................ 49
21.5 Performance Warranty........................................... 50
21.6 Force Majeure.................................................. 50
21.7 Independent Contractors........................................ 50
21.8 Advice of Counsel.............................................. 50
21.9 Severability................................................... 50
21.10 Patent Marking................................................. 50
21.11 Further Assurances............................................. 51
21.12 Compliance with Laws........................................... 51
21.13 No Implied Licenses or Warranties.............................. 51
21.14 Entire Agreement............................................... 51
21.15 Headings....................................................... 51
21.16 Counterparts................................................... 51
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
RESEARCH, DEVELOPMENT AND COLLABORATION AGREEMENT
This RESEARCH, DEVELOPMENT AND COLLABORATION AGREEMENT (the "Agreement"),
effective as of July 21, 1997, is made by and between Xxxxxx-Xxxxxxx Company, a
Delaware corporation, with a principal place of business at 000 Xxxxx Xxxx,
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000 ("Warner"), and GenVec, Inc., a Delaware
corporation, with a principal place of business at 00000 Xxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000 ("GenVec").
BACKGROUND
A. GenVec has expertise in the field of gene therapy and is developing
novel, proprietary materials and methods for use in the Field.
X. Xxxxxx is in the business of and has expertise in developing,
manufacturing and commercializing pharmaceuticals.
X. Xxxxxx and GenVec wish to enter into a collaborative effort to share
such expertise, to conduct research and development with respect to potential
Collaboration Products for use in the Field and, if successful, Warner shall
market certain Collaboration Products for use in the Field in the Territory, and
the Parties may co-promote certain of such Collaboration Products for use in the
Field in the Co-Promotion Countries (the "Collaboration").
X. Xxxxxx and GenVec wish to establish a framework for such Collaboration
consisting of (i) the Research Program, (ii) the Pre-Clinical Activities, (iii)
the Development and (iv) the commercialization, and possible co-promotion of
Collaboration Products, each as defined and described further below.
E. Of even date herewith, GenVec and Warner have entered into a Stock
Purchase Agreement, pursuant to which GenVec may offer to Warner, and in such
event Warner shall purchase shares of GenVec preferred and/or common stock.
X. Xxxxxx will enter into a Guaranty pursuant to which Warner will
guarantee a line of credit on behalf of GenVec, and in connection therewith
GenVec and Warner will enter into a Security Agreement and any other agreements
as provided for therein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, contained herein, GenVec and Warner agree as follows:
1. DEFINITIONS
The following capitalized terms shall have the meanings indicated for
purposes of this Agreement:
1.1 "Affiliate" shall mean any corporation, association or other entity
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which directly or indirectly controls, is controlled by or is under common
control with the party in question. As used in this definition of "Affiliate,"
the term "control" shall mean direct or indirect beneficial ownership of more
than fifty percent (50%) of the voting or income interest in such corporation or
other business entity.
1.2 "Agency" shall mean the Food and Drug Administration of the United
------
States or any successor entity (the "FDA"), and agencies of other governments of
other countries having similar jurisdiction over the development, manufacturing,
and marketing of pharmaceuticals.
1.3 "Background Technology" shall mean all technology that a Party owns or
---------------------
Controls on the Effective Date and has the right to contribute to the
Collaboration which is necessary for the design, development, testing, use,
manufacture or sale of Product Configurations, Development Candidates and
Collaboration Products for use in the Field, including all such United States
and foreign patents and patent applications (including, without limitation, all
reissues, extensions, substitutions, confirmations, registrations,
revalidations, additions, continuations, continuations-in-part, and divisions
thereof) and other proprietary information, data and know-how existing on the
Effective Date.
1.4 "Bulk Product" shall mean the purified active ingredient of any
------------
Collaboration Product, in bulk form.
1.5 "Collaboration Product" shall mean a Product Configuration in
---------------------
Development pursuant to this Agreement through and including commercial sales.
1.6 "Collaboration Technology" shall mean all Know-How and Patent Rights
------------------------
that a Party owns or Controls, which is conceived, reduced to practice or
otherwise developed by GenVec (or its agents) or Warner (or its agents) or
jointly by GenVec and Warner (or their respective agents) during the Term of the
Research Program and in connection with the Collaboration, including, without
limitation, improvements on the Background Technology.
1.7 "Control" shall mean possession of the ability to grant the licenses
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or sublicenses as provided for herein without violating the terms of any
agreement or other arrangement with any Third Party.
1.8 "Co-Promotion Country" shall mean each of the United States of America
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(including its fifty (50) states, and its territories and possessions, including
the District of Columbia, the Commonwealth of Puerto Rico) and Canada.
1.9 "Core U.S. Dossier" shall have the meaning set forth in Section 4.4.
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[*]
1.13 "Development" shall mean the development of any Product Configuration
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from and after the filing of an IND, through and including product registration
as described in Article 4.
1.14 "Development Candidate" shall mean a Product Configuration which meets
---------------------
the Pre-Clinical Development Criteria, and which the Executive Committee agrees
should undergo further development pursuant to Section 4.1.2.
[*]
1.16 "Development Plan" shall have the meaning set forth in Section 4.4.
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1.17 "Drug Development Committee" shall have the meaning set forth in
--------------------------
Section 3.3.
1.18 "Effective Date" shall mean the date of this Agreement first written
--------------
above.
1.19 "Executive Committee" shall have the meaning set forth in Section 3.1.
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1.20 "Field" shall mean the research, drug discovery and development
-----
collaboration aimed at therapeutic agents useful for Gene Therapy-based
induction of angiogenesis and for the first two years of the Research Program
shall include all clinical indications; provided, thereafter the Field shall be
limited to the treatment of coronary artery disease ("CAD") and/or peripheral
vascular disease ("PVD") and/or those other specific clinical indications
selected by Warner pursuant to Section 2.5 below.
1.21 "Finished Product" shall mean the finished pharmaceutical form, in any
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formulation, of a Collaboration Product packaged for sale to a Third Party.
1.22 "GAAP" shall mean generally accepted accounting principles applied in
----
the United States.
1.23 "Gene Therapy" shall mean the introduction of a gene into a person for
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therapeutic purposes by (i) in vivo introduction for incorporation into cells of
-- ----
such person, or (ii) by ex vivo introduction into cells for transfer into a
-- ----
person.
1.24 "IND" shall mean an Investigational New Drug application, as defined
---
in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated
thereunder, or any corresponding foreign application, registration or
certification.
1.25 "Invention(s)" shall have the meaning set forth in Section 14.2.1.
------------
1.26 "Know-How" shall mean all ideas, inventions, data, instructions,
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processes, formulas, expert opinions and information, including, without
limitation, biological, chemical, pharmacological, toxicological,
pharmaceutical, physical and analytical, clinical, safety, manufacturing and
quality control data and information, in each case, which are developed as a
result of the Collaboration and are necessary or useful for the development,
testing, use, manufacture or sale of Collaboration Products. Know-How does not
include any inventions included in the Patent Rights.
[*]
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[*]
1.28 "Party" shall mean Warner or GenVec, and the "Parties" shall mean
----- -------
Warner and GenVec.
1.29 "Patent Rights" shall mean all United States and foreign patents
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(including all reissues, extensions, substitutions, confirmations, re-
registrations, re-examinations, revalidations and patents of addition) and
patent applications (including, without limitation, all continuations,
continuations-in-part and divisions thereof) in each case, claiming an invention
which is necessary or useful for the design, development, testing, use,
manufacture or sale of Collaboration Products.
1.30 "Phase I", "Phase II", and "Phase III" shall mean Phase I (or Phase
------- -------- ---------
I/II), Phase II, and Phase III (or Pivotal) clinical trials, respectively, in
each case as prescribed by the applicable Agency's regulations.
1.31 "Pivotal" shall mean a clinical trial that is designed to provide data
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establishing the safety and efficacy of a Collaboration Product in support of
obtaining Regulatory Approval from an Agency.
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1.32 "Pre-Clinical Activities" shall mean all activities (including, but
-----------------------
not limited to, development/scale-up, assay development, toxicology,
pharmacokinetics, metabolism and safety pharmacology), undertaken to develop a
Product Configuration (or a corresponding Development Candidate) which are
determined by the Research Management Committee to be necessary or desirable to
file an IND on such Product Configuration (or a corresponding Development
Candidate), including the preparation and filing of an IND.
1.33 "Pre-Clinical Development Criteria" shall have the meaning set forth
---------------------------------
in Section 4.1.1.
[*]
1.35 "Product License Application" or "PLA" shall mean a Product License
--------------------------- ---
Application, as defined in the U.S. Food, Drug and Cosmetic Act and the
regulations promulgated thereunder, and any corresponding foreign application,
registration or certification.
1.36 "Project Team Leader" shall have the meaning set forth in Section
-------------------
3.3.4.
1.37 "Regulatory Approval" shall mean all approvals (including pricing and
-------------------
reimbursement approvals), licenses, registrations and authorizations of all
Agencies necessary for the manufacture, distribution, use or sale of a
Collaboration Product in the applicable country.
1.38 "Research Management Committee" shall have the meaning set forth in
-----------------------------
Section 3.2.
1.39 "Research Plan" shall have the meaning set forth in Section 2.1.1.
-------------
1.40 "Research Program" shall mean that program of research performed by
----------------
the Parties pursuant to Section 2.1.
1.41 "Scientific FTE" shall mean a full time scientist (or in the case of
--------------
less than a full-time dedicated scientist, a full-time, equivalent scientist
year), dedicated to research under the Research Program or in connection with
the Development consisting of no less than 1800 person-hours per year.
1.42 "Scios Agreement" shall mean that certain License Agreement entered by
---------------
GenVec and Scios, Inc. effective May 31, 1996.
1.43 "Second Source" shall have the meaning set forth in Section 11.3.
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1.44 "Stock Purchase Agreement" shall mean that certain Stock Purchase
------------------------
Agreement entered by Warner and GenVec of even date herewith.
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1.45 "Sublicensee" shall mean a Third Party to whom Warner has granted a
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license or sublicense under the Background Technology or Collaboration
Technology to make, have made, import, use, sell, offer for sale, or otherwise
exploit a Collaboration Product in the Territory. As used in this Agreement,
"Sublicensee" shall also include a Third Party to whom Warner has granted the
right to distribute the Collaboration Product in the Territory, provided that
such Third Party has the responsibility for marketing and/or promotion of the
Collaboration Product within the territory for which such distribution rights
are granted.
1.46 "Term of the Agreement" shall mean the period from the Effective Date
---------------------
until, with respect to each Collaboration Product, the expiration of the last
royalty obligation owed by Warner to GenVec with respect to such Collaboration
Product, or until this Agreement is otherwise terminated earlier pursuant to its
terms.
1.47 "Term of the Research Program" shall have the meaning set forth in
----------------------------
Section 2.4.1.
1.48 "Territory" shall mean the entire world, excluding the countries
---------
listed on Exhibit A hereto, provided, if GenVec exercises its option to co-
promote a specific Collaboration Product for a particular indication in a Co-
Promotion Country, such country shall cease to be included in the Territory with
respect to such Collaboration Product for such indication for all purposes of
this Agreement.
1.49 "Third Party" shall mean any party other than Warner or GenVec or an
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Affiliate of either of them.
[*]
1.51 "Valid Claim" means a claim of an issued and unexpired patent included
-----------
within the Patent Rights which has not been held unenforceable or invalid by a
court or other governmental agency of competent jurisdiction, and which has not
been disclaimed or admitted to be invalid or unenforceable through reissue or
otherwise.
2. RESEARCH PROGRAM
2.1 Collaborative Research. Subject to the terms and conditions set forth
----------------------
herein, Warner and GenVec will diligently conduct mutually agreed collaborative
research in the Field pursuant to a Research Plan with the primary objective of
developing Collaboration Products (the "Research Program"). The Research
Program shall have the goals of (i) developing at least one Collaboration
Product for the treatment of each of CAD and PVD, and (ii) identifying other
clinical indications in the Field for which Product Configurations may be useful
as therapeutic agents. Warner and GenVec shall each use reasonable efforts to
conduct the Research Program in a professional manner in accordance with the
applicable Research Plan within the time schedules contemplated therein. The
activities conducted in connection with the Research Program will be overseen
and administered by the Research Management Committee pursuant to Section 2.1.1
below.
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2.1.1 Research Plan. At least annually, the Research Management
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Committee will prepare and agree upon a written plan (the "Research Plan") that
will (i) include a general overview and timetable for each Party's research
activities and appropriate resources and budgets for such research during the
next year, (ii) set specific objectives for such year, which objectives will be
updated or amended, as appropriate, by the Research Management Committee as
research progresses, and (iii) prepare a preliminary and non-binding plan for
research activities to be conducted by the Parties in the subsequent year. A
preliminary Research Plan has been agreed by the Parties as of the Effective
Date and a formal Research Plan will be agreed by the Research Management
Committee within sixty (60) days of the Effective Date. The Research Management
Committee shall review the Research Plan on an ongoing basis but in no event
less than quarterly and may make changes to the Research Plan then in effect.
2.1.2 Resources. Each Party agrees to commit the personnel,
---------
facilities, expertise and other resources necessary to perform its obligations
under the Research Plan; provided, however, that neither Party warrants that the
Research Program shall achieve any of the research objectives contemplated by
them.
[*]
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[*]
2.2.4 Research Program Subcontracts. With the prior approval of the
-----------------------------
Executive Committee, GenVec or Warner may enter into or modify existing
agreements with Third Parties for the performance of activities in furtherance
of the Research Program for which Warner will be responsible for paying in
connection with the Research Program. Warner shall be responsible for directly
paying to the Third Party all compensation required to be paid pursuant to such
Agreement and/or for reimbursing GenVec for all expenses incurred by GenVec in
connection with such agreements, including, without limitation, the out-of-
pocket costs of negotiating and preparing such agreements. It is understood and
agreed that Warner shall have the principal responsibility for negotiating such
agreements, unless otherwise agreed by the Parties. The Party with principal
responsibility for negotiating such agreements shall keep the other Party fully
informed with respect to such negotiations, and such other Party shall have the
right to review and comment on such agreements prior to execution, provided such
review shall be conducted at such other Party's expense. Notwithstanding the
above, it is understood and agreed that the prior approval of the Executive
Committee shall not be required pursuant to this Section 2.2.4 with respect to
GenVec's support of research at [*] as it relates to the Research Program, or
any modification thereof (provided, it is understood that Warner's payment
obligations with respect to the Research Program shall not increase as a result
of any such modifications to GenVec's existing agreements with [*], and Warner
acknowledges that GenVec has notified Warner that GenVec is currently
negotiating modifications to its existing research support agreements with [*].
It is understood and agreed that GenVec shall be responsible for negotiating and
preparing such agreements and for paying all out-of-pocket costs incurred in
connection with such activities.
2.3 Records; Reports.
----------------
2.3 Records. The Parties shall maintain records that will properly
-------
reflect all work done and results achieved in the performance of the Research
Program (including all data in the form required under any applicable
governmental regulations and as directed by the Research Management Committee),
including laboratory records sufficient to establish the dates of first
conception and reduction to practice of any Inventions. Upon request, the
Parties shall provide each other access to such records relating to any Product
Configuration, Development Candidate and/or Collaboration Product during
ordinary business hours during the period the requesting Party retains rights
thereto pursuant to this Agreement.
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2.3.2 Reports. The Research Management Committee shall periodically
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and not less often than semiannually during the Term of the Research Program,
request and the Parties shall have the obligation to prepare and provide to the
Research Management Committee, written reports summarizing the progress of the
research performed by or sponsored by the Parties pursuant to the Research Plan
during the preceding half-year. In addition, the Parties will exchange at least
quarterly verbal or written reports presenting a meaningful summary of their
activities performed in connection with the Research Program. All Collaboration
Technology made by either Party will be promptly disclosed to the other, with
significant discoveries or advances being communicated as soon as practical
after such information is obtained or its significance is appreciated.
2.3.3 Research Program Expenditures. During the Term of the Research
-----------------------------
Program, GenVec shall provide Warner with a quarterly accounting report
regarding Research Program expenditures by GenVec in the preceding quarter.
GenVec shall keep records of all expenses incurred in connection with the
Research Program, and annually during the Research Program within sixty (60)
days following the end of each calendar year shall provide Warner with a report
describing GenVec's actual average Scientific FTE cost during the preceding
year, and the number of Scientific FTEs utilized in the Research Program during
the preceding year. During the term of the Research Program and for one year
thereafter, Warner shall have the right to audit such records no more than twice
per year during ordinary business hours, at mutually agreed times, to verify
GenVec's expenditures in connection with the Research Program
2.4 Term and Termination of Research Program.
----------------------------------------
2.4.1 Term of the Research Program. The term of the Research Program
----------------------------
shall commence on the Effective Date and, unless terminated earlier pursuant to
Section 2.4.2 or Article 19 or extended by mutual agreement of the Parties,
shall terminate on the fifth anniversary of the Effective Date; provided, if an
IND has been filed in the Territory with respect to a Collaboration Product for
treatment of each of CAD and PVD prior to the fifth anniversary of the Effective
Date, the Research Program may be terminated earlier with the written agreement
of the Parties (the "Term of the Research Program").
2.4.2 Termination of Research Program. After the third anniversary of
-------------------------------
the Effective Date, the Term of the Research Program may be terminated by Warner
upon six (6) months prior written notice, subject to the following conditions:
(a) Warner shall be obligated to continue to fund all Research
Program activities ongoing at the time of such written notice and make all
Research Program payments due to GenVec until the effective date of such
termination; provided, GenVec continues to perform under and such funds are used
to forward the Research Program; and
(b) Each Party shall retain such ownership interest in the
Collaboration Technology as it shall hold on the effective date of such
termination; and
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(c) Subject to the terms and conditions of this Agreement,
Warner shall retain its [*] prior to the date of Warner's notice of its intent
to terminate, but shall have no rights under this Agreement with regard to [*]
prior to the date of Warner's notice of its intent to terminate the Research
Program; and
[*]
2.5 Field Restriction.
-----------------
2.5.1 Initial Two Years. During the first two (2) years of the
-----------------
Research Program the Parties shall conduct research pursuant to the Research
Plan with the goal of evaluating whether any Product Configuration may be useful
for the treatment of any clinical indication(s) selected by the Executive
Committee. It is understood and agreed that during the first two (2) years of
the Research Program at a minimum the Parties shall seek to develop
Collaboration Products for the treatment of coronary artery disease ("CAD") and
peripheral vascular disease ("PVD") in humans.
2.5.2 Selection of Indications. On or before the second anniversary
of the Effective Date, Warner shall notify GenVec of any specific indications
(other than CAD and PVD) which Warner wishes to retain in the Field. The first
indication so selected by Warner shall automatically be included in the Field
and Warner's obligation to provide funding for the Research Program and
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Development shall be increased as set forth in Section 6.3.2(b). Each additional
specific indication so selected by Warner shall automatically be included in the
Field and Warner's obligation to provide funding under Section 6.3 shall
increase by [*] per year per indication. Concurrently with its notice to GenVec
of any indication that Warner wishes to retain in the Field, Warner shall
provide to GenVec a proposed research plan for the conduct of research with
respect thereto through the identification of a Development Candidate for each
such indication in connection with the Research Program, and the Parties shall
negotiate in good faith regarding the specific activities to be conducted in the
Research Program with respect thereto. [*]
2.5.4 Collaboration Technology. In the event that any specific
------------------------
clinical indication(s) cease(s) to be within the Field as provided in Section
2.5.3 above, then, at GenVec's request, Warner shall grant to GenVec licenses as
set forth below for practice outside the Field:
(a) Warner will grant GenVec an exclusive (even as to Warner),
worldwide, fully-paid, perpetual license (with the right to sublicense) under
Warner's interest in any Collaboration Technology jointly owned by Warner and
GenVec necessary or useful to make, have made, import, use, offer for sale and
sell Collaboration Products, subject to Article 15, for indications other than
those which Warner retains rights hereunder, and products other than
Collaboration Products; and
(b) At GenVec's request, Warner will negotiate in good faith
the terms of an exclusive, worldwide license to GenVec (with the right to
sublicense) under Warner's interest in any Collaboration Technology owned solely
by Warner, to make, have made, use, import, offer for sale and sell Product
Configurations, subject to Article 15, which terms shall include the payment of
a royalty to Warner on net sales of such products up to [*] of such net sales
(such net sales to be calculated in accordance with Section 1.27 (with
appropriate contextual adjustments) and GAAP), and other customary and
reasonable terms to be agreed by the Parties.
(c) At GenVec's request, Warner will negotiate in good faith
the terms of [*] to GenVec (with the right to sublicense) under Warner's
interest
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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in any Collaboration Technology owned solely by Warner, to make, have made, use,
import, offer for sale and sell products other than Product Configurations,
subject to Article 15, which terms shall include the payment of a royalty to
Warner on net sales (such net sales to be calculated in accordance with Section
1.27 (with appropriate contextual adjustments) and GAAP) of such products up to
[*] [*] of such net sales, and other customary and reasonable terms to be agreed
by the Parties.
2.6 Gene Therapy Products Outside the Field. In the period from the
---------------------------------------
[*] of the Effective Date until the [*] of the Effective Date, if GenVec wishes
to develop, itself or with a Third Party, [*] containing [*] before commencing
negotiations with any Third Party with respect to such a [*] for such
indication(s), GenVec shall notify Warner and identify the proposed
indication(s). Within [*] of receipt of such notice, Warner shall notify GenVec
if it wishes to negotiate the terms of a further research and development
collaboration between the Parties with respect to such indication(s). If Warner
provides GenVec notice of its interest during such period, the Parties shall
negotiate in good faith the terms of such a further collaboration agreement,
including without limitation, the activities to be conducted, the
responsibilities of the Parties and budgets therefore. Such further [*] with
respect to Collaboration Products for such indication(s) which shall be equal to
those set forth in Sections 6.4, 6.5 and 11.1, respectively, unless otherwise
agreed by the Parties. At the request of Warner, GenVec shall provide all
relevant data in its possession requested by the Research Management Committee,
to the extent GenVec's obligations to Third Parties permit. In the event that
the Parties have not entered into such a further agreement on or before [*] of
the date Warner provided notice of its interest to GenVec, or such later date as
may be agreed by the Parties, subject to Article 15, GenVec shall be free to
develop and commercialize such [*] for such indication(s), itself or with a
Third Party, and [*]
3. COMMITTEES
3.1 Executive Committee.
-------------------
3.1.1 Membership. Promptly after the Effective Date, Warner and
----------
GenVec will each appoint three (3) representatives to a management committee
(the "Executive Committee"). A Warner representative will serve as chairperson
of the Executive Committee for the initial twelve (12) months. Thereafter, the
chair of the Executive Committee will rotate between a GenVec member and a
Warner member every twelve (12) months. A Party may change any of its
appointments to the Executive Committee at any time with written notice to the
other Party.
3.1.2 Responsibilities. The Executive Committee will be charged with
----------------
overseeing and managing the entire Collaboration, including the Research
Management Committee and the Drug Development Committee. In addition, the role
of the Executive Committee will be, subject to
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the terms of this Agreement, to: (i) coordinate the Parties' activities
hereunder; (ii) resolve problems or settle disagreements that are unresolved by
the Research Management Committee and/or the Drug Development Committee, unless
otherwise indicated in this Agreement; (iii) approve allocations of tasks and
resources required to carry out the goals of the Collaboration; (iv) approve all
plans and annual budgets for the various projects and programs within the
Collaboration; (v) designate Product Configurations as Development Candidates,
and authorize the filing of INDs with respect thereto; (vi) encourage and
facilitate ongoing cooperation between the Parties; (vii) coordinate and monitor
the payments and reimbursements to be made by and between the Parties; and
(viii) perform such other functions as appropriate to further the purposes of
this Agreement, as determined by the Parties.
3.1.3 Meetings. The Executive Committee will meet every six (6)
--------
months and at such other mutually agreeable times as a Party may request,
alternating between the corporate offices of GenVec and Warner, and will
otherwise communicate regularly by telephone, facsimile and/or video conference.
Each Party recognizes the importance of the Executive Committee in the success
of the Collaboration and will use diligent efforts to cause all of its
representatives of such committee to attend all meetings of such committee.
3.1.4 Decision Making; Disputes. All decisions of the Executive
-------------------------
Committee will be made by unanimous approval. Any disputes or disagreements
within the Executive Committee shall be resolved pursuant to Section 3.5.
3.2 Research Management Committee. Promptly after the Effective Date,
-----------------------------
Warner and GenVec will each appoint three (3) representatives to a research
management committee (the "Research Management Committee").
3.2.1 Membership. A GenVec representative will serve as chairperson
----------
of the Research Management Committee for the initial twelve (12) months.
Thereafter, the chair will rotate between a Warner member and a GenVec member
every twelve (12) months. A Party may change any of its appointments to the
Research Management Committee at any time with written notice to the other
Party.
3.2.2 Responsibilities. The Research Management Committee will agree
----------------
on and may, at its discretion, and with the approval of the Executive Committee,
modify the general direction of the pre-clinical research to be performed under
this Agreement. The Research Management Committee will oversee, review, direct
and supervise all operational and scientific aspects of the Research Program.
The Research Management Committee shall be responsible for (i) establishing the
Research Plan; (ii) monitoring and reporting research progress and ensuring open
and frequent exchange between the Parties with respect to Research Program
activities; (iii) determining whether to acquire licenses from Third Parties
with respect to intellectual property necessary or useful for the conduct of the
Research Program; (iv) discussing patent matters relating to Collaboration
Products; and (v) proposing Development Candidates to the Executive Committee.
-15-
3.2.3 Meetings. The Research Management Committee will meet on a
--------
quarterly basis alternating between the corporate offices of GenVec and Warner,
and will otherwise communicate regularly by telephone, facsimile and/or video
conference. Each Party recognizes the importance of the Research Management
Committee in the success of the Collaboration and will use diligent efforts to
cause all of its representatives of such committee to attend all meetings of
such committee.
3.2.4 Decision Making; Disputes. All decisions of the Research
-------------------------
Management Committee will be made by unanimous approval. Any disputes or
disagreements within the Research Management Committee shall be resolved
pursuant to Section 3.5.
3.3 Drug Development Committee. Within thirty (30) days of the date a
--------------------------
Development Candidate is designated by the Executive Committee, Warner shall
form a development committee for such Development Candidate (the "Drug
Development Committee").
3.3.1 Membership. The Drug Development Committee will include
----------
individuals with expertise and responsibilities in the areas of pre-clinical
development, clinical development or regulatory affairs and shall include two
(2) or more representatives from GenVec as appropriate. A Party may change any
of its appointments to the Drug Development Committee at any time upon giving
written notice to the other Party. [*]
3.3.2 Responsibilities. The Drug Development Committee will oversee
----------------
all aspects of the Pre-Clinical Activities and Development of each Product
Configuration through the filing of a PLA on a Collaboration Product arising
from such Product Configuration.
3.3.3 Meetings. The Drug Development Committee will meet on a monthly
--------
basis, and will otherwise communicate regularly by telephone, facsimile and
video conference. Each Party recognizes the importance of the Drug Development
Committee in the success of the Collaboration and will use diligent efforts to
cause all of its representatives of such committee to attend all meetings of
such committee.
3.3.4 Project Team Leader. With respect to each Development Candidate
-------------------
and corresponding Collaboration Product in Development, the Executive Committee
will, upon nomination from each Party, select one Drug Development Committee
representative who is a Warner Drug Development Vice President (or designated
equivalent) as a "Project Team Leader" with respect to such Development
Candidate or Collaboration Product. The Project Team Leader will be responsible
for overseeing the operational aspects of the Pre-Clinical Activities and the
Development of the applicable Development Candidate (or corresponding
Collaboration Product), as directed by the Drug Development Committee, and will
prepare and submit to the Drug Development Committee issues and problems to be
decided by the Drug Development Committee.
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3.3 Decision Making. Decisions of the Drug Development Committee
---------------
shall be made by majority approval after reasonable consultation with GenVec's
representatives on such committee.
3.4 Meetings. All committees created hereunder may meet by telephone or
--------
video conference or in person at such times as are agreeable to the members of
each such committee, but no less frequently than as specified above. Attendance
at meetings shall be at the respective expense of the participating Parties.
Each committee created hereunder shall assure that agendas and minutes are
prepared for each of its meetings and distributed to the Parties. All actions
taken and decisions made by each committee created hereunder shall be by
unanimous agreement and recorded in writing. If personal attendance is not
possible for valid reasons, voting by proxy is permissible.
3.5 Dispute Resolution. Any disputes or disagreements arising in the
------------------
Research Management Committee or Drug Development Committee will be referred to
the Executive Committee if the Research Management Committee or Drug Development
Committee, as the case may be, is unable to resolve such dispute or disagreement
within thirty days. In addition, any other disputes or disagreements between
the Parties arising hereunder will be referred to the Executive Committee. If
the Executive Committee is unable to resolve after thirty (30) days, a dispute
regarding any issue presented to it or arising in it, such dispute will be
referred to the Chief Executive Officer of GenVec and Warner's Chairman of the
Pharmaceutical Research Division for good faith resolution, for a period of
ninety (90) days. In the event such individuals are unable to resolve such
dispute, subject to Section 20.1, either Party may pursue any remedies it may
have at law or in equity.
4. DEVELOPMENT
4.1 Selection of Development Candidates and Collaboration Products.
--------------------------------------------------------------
4.1 Proposed Development Candidates. From time to time the Research
-------------------------------
Management Committee will propose, or either Party may propose, to the Executive
Committee that further Pre-Clinical Activities be undertaken for one or more
Product Configurations. Such proposal will be in writing, accompanied by a
nonbinding plan and budget forecast that outlines studies and activities to be
conducted through completion of Phase III for each Product Configuration
recommended. The Executive Committee will promptly determine whether such
Product Configuration meets criteria established by the Executive Committee for
determining, on an indication-by-indication basis, which Product Configurations
are suitable for consideration as Development Candidates, which criteria may be
amended from time to time upon the written consent of the Parties hereto (the
"Pre-Clinical Development Criteria").
4.1 Development Candidates. If the Executive Committee determines
----------------------
that any Product Configuration meets the Pre-Clinical Development Criteria, and
agrees to commence Pre-Clinical Activities with respect to such Product
Configuration, then such Product Configuration shall be deemed to be a
"Development Candidate". Product Configurations which are not designated as
-17-
Development Candidates as set forth above may not become Collaboration Products;
provided, any Product Configuration which was not previously selected as a
Development Candidate may become a Development Candidate with the agreement of
the Executive Committee.
4.1 Collaboration Products. The Executive Committee shall determine
----------------------
which Development Candidates are suitable for clinical development as
Collaboration Products. Any Development Candidate for which an IND is filed
shall be deemed a "Collaboration Product."
4.1 Loss of Status. In the event that the Drug Development Committee
--------------
or the Executive Committee determines that Development should be discontinued
with respect to a particular Development Candidate or Collaboration Product,
such Product Configuration shall cease to be a Development Candidate or
Collaboration Product, as the case may be, for purposes of this Agreement.
4.2 Collaborative Development. The Parties will each diligently
-------------------------
collaborate in the development of Development Candidates for the purpose of
selecting Collaboration Products and use diligent efforts to develop and bring
such Collaboration Products to the market as soon as reasonably practicable. In
connection therewith, each Party shall use efforts not less than those efforts
it makes with respect to its own pharmaceutical products of comparable
commercial potential, stage of development and patent protection. The role of
each Party in the research and development process will be proposed by the
Project Team Leader and approved by the Drug Development Committee, with each
Party providing advisory and supporting services with respect to each phase of
the process in which such Party may be actively or primarily involved. No
clinical trials involving any Collaboration Product shall be commenced by or on
behalf of either Party without the prior approval of the Drug Development
Committee; provided, GenVec may conduct any such studies with or for an Asian
Partner. Each Party shall ensure that its Development tasks are carried out
adhering to ethical and safety standards customary in the industry.
4.3 Pre-Clinical Activities. The Parties, under the direction of the Drug
-----------------------
Development Committee, shall conduct the Pre-Clinical Activities with respect to
each Development Candidate. The payment of the costs of conducting such Pre-
Clinical Activities shall be as set forth in Section 4.5. During the period
that a particular Development Candidate (or the corresponding Collaboration
Product) is in Development hereunder, under no circumstances shall either Party
conduct studies of such Development Candidate (or the corresponding
Collaboration Product) except as approved and directed by the Drug Development
Committee; provided, GenVec may conduct any such studies with or for an Asian
Partner and support preclinical research at Cornell University Medical Center
without such approval, at its own expense.
4.4 Development Plan. The development of each Development Candidate (and
----------------
the corresponding Collaboration Product) shall be governed by a comprehensive
development plan (the "Development Plan"). The Drug Development Committee shall
prepare for consideration and approval by the Executive Committee a Development
Plan for such Development Candidate (and corresponding Collaboration Product).
The Development Plan shall outline the proposed program of development for such
Development Candidate (and corresponding Collaboration Product), including
-18-
formulation, process development, clinical studies and regulatory plans and
other key elements of obtaining Regulatory Approval in each country in the
Territory, including specific activities and estimated timelines for such
activities. Without limiting the foregoing, the Development Plan shall, to the
extent practicable, set forth those pre-clinical and clinical studies necessary
or desirable for the filing of a PLA in the United States for any Development
Candidate (and corresponding Collaboration Product), as determined by the Drug
Development Committee (the "Core U.S. Dossier"). In addition, the Development
Plan shall provide a general overview of relevant plans and timelines for
development of such Collaboration Product within the Territory outside of the
United States. Each such Development Plan shall be updated semi-annually by the
Drug Development Committee and submitted to the Executive Committee for review
and approval not later than ninety (90) days prior to each January 1 and July 1
of each applicable year.
[*]
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[*]
4.8 Suspension or Termination of Collaborative Development.
------------------------------------------------------
4.8.1 Permissive Termination. Warner may elect upon six (6) months
----------------------
prior written notice to (i) terminate its participation in or not to participate
in the Pre-Clinical Activities or Development of any Development Candidate (or
corresponding Collaboration Product), or (ii) terminate such activities with
respect to all Development Candidates (and corresponding Collaboration Products)
for a particular clinical indication.
4.8.2 Suspension for Safety or Efficacy Concerns. Warner may suspend
------------------------------------------
the Development activities with respect to any Collaboration Product for
reasonable safety and/or efficacy concerns, and in such event shall promptly,
but in any event within [*] notify GenVec and the Executive Committee, providing
a detailed explanation of its concerns and the basis thereof. Any such
suspension shall not remain in effect for more than [*] without the approval of
the Executive Committee. In the event that Warner believes that such concerns
warrant termination of further Development with respect to such Collaboration
Product, it shall notify the Executive Committee, and in such event Warner may
immediately terminate any on-going clinical trial with respect to such
Collaboration Product and, at GenVec's request, cooperate with GenVec to ensure
a prompt transition of such Development activities to GenVec. Warner shall
further continue to be responsible for all costs associated with such
Development for a period of [*] from the date of Warner's notice to the
Executive Committee that it intends to terminate further Development with
respect thereto.
[*]
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[*]
(b) At GenVec's request, Warner will negotiate in good faith the
terms of an exclusive, worldwide license to GenVec (with the right to
sublicense) under Warner's interest in any Collaboration Technology owned solely
by Warner, to make, have made, use, import, offer for sale and sell Product
Configurations, subject to Article 15, which terms shall include the payment of
a royalty to Warner on net sales (such net sales to be calculated in accordance
with Section 1.27 (with appropriate contextual adjustments) and GAAP) of such
products up to three percent (3%) of such net sales, and other customary and
reasonable terms to be agreed by the Parties.
(c) At GenVec's request, Warner will negotiate in good faith the
terms of a nonexclusive, worldwide license to GenVec (with the right to
sublicense) under Warner's interest in any Collaboration Technology owned solely
by Warner, to make, have made, use, import, offer for sale and sell products
other than Product Configurations, subject to Article 15, which terms shall
include the payment of a royalty to Warner on net sales (such net sales to be
calculated in accordance with Section 1.27 (with appropriate contextual
adjustments) and GAAP) of such products up to [*] of such net sales, and other
customary and reasonable terms to be agreed by the Parties.
4.8.4 Acknowledgment. The Parties each recognize and agree that any
--------------
termination by Warner of its participation in Development with respect to a
particular Development Candidate or Collaboration Product or a particular
indication in accordance with this Section 4.8 will not be considered a breach
of its obligations under this Agreement. It is further understood that in the
event that Warner elects to terminate its activities with respect to a
particular indication pursuant to this Section 4.8, such indication shall
thereafter be excluded from the Field.
5. LICENSE GRANTS
5.1 Grant by GenVec. Subject to the terms and conditions of this
---------------
Agreement, GenVec hereby grants and agrees to grant to Warner an exclusive,
worldwide license under the Background Technology and Collaboration Technology
owned or Controlled by GenVec, with the right to sublicense pursuant to Section
5.4, to the extent necessary for Warner to make, have made, use, import, offer
for sale and sell Collaboration Products for use in the Field, in the Territory
and in the Co-Promotion Countries. Such licenses with respect to a
Collaboration Product are exclusive (even as to GenVec), except that GenVec
shall retain the rights set forth in Section 5.6, the right to conduct Pre-
Clinical Activities and Development as set forth in Article 4, and the right to
manufacture and have manufactured Bulk Products pursuant to the terms of Article
11, and, if the Parties enter into a Co-Promotion arrangement pursuant to
Article 9, to use, offer for sale and promote any Collaboration Product in the
Co-Promotion Countries pursuant to the applicable Co-Promotion Agreement.
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5.2 Grant by Warner. Subject to the terms and conditions of this
---------------
Agreement, Warner hereby grants and agrees to grant to GenVec an exclusive
(except as to Warner) license under the Background Technology and Collaboration
Technology owned or Controlled by Warner to the extent necessary for GenVec to
(a) use, offer for sale and promote any Collaboration Product in the Co-
Promotion Countries, if the Parties enter into a Co-Promotion Agreement pursuant
to Article 9, and (b) manufacture or have manufactured Bulk Products, pursuant
to the terms of Article 11. GenVec may not sublicense any of its rights granted
under this Section 5.2 without the prior written consent of Warner.
5.3 Licenses to Affiliates. Each Party shall, at the other Party's
----------------------
reasonable request, enter into license agreements directly with the other
Party's Affiliates, in lieu of the license grant to the requesting Party;
provided such agreements would not decrease the amount which would be owed
hereunder. Such agreements shall contain the same language as contained herein
with appropriate changes in parties and territory, and this Agreement shall be
amended as appropriate. No such license agreement will relieve Warner or
GenVec, as the case may be, of its obligations hereunder, and such Party will
guarantee the obligations of its Affiliate in any such agreement.
5.4 Sublicenses. Warner may sublicense the rights granted in Section 5.1
-----------
to its Affiliates or Third Parties, with the prior written consent of GenVec,
which consent shall not be unreasonably withheld. Each sublicense granted by
Warner shall be consistent with all the terms and conditions of this Agreement.
Warner shall remain responsible to GenVec for all of each such Sublicensee's
applicable financial and other obligations under this Agreement.
5.5 Cross-Licenses. Each Party hereby grants and agrees to grant to the
--------------
other, a non-exclusive, non-transferable, royalty-free license to use and
practice such Party's Background Technology and Collaboration Technology solely
for research purposes in the Field in connection with the Research Program. In
addition, for each Development Candidate (and corresponding Collaborative
Product) which enters Pre-Clinical Activities or Development, each Party hereby
grants and agrees to grant to the other a non-exclusive, non-transferable,
royalty-free license to use and practice such Party's Background Technology and
Collaboration Technology for the Pre-Clinical Activities and Development of such
Development Candidate (and the corresponding Collaboration Product) in the Field
until termination of Pre-Clinical Activities or Development with respect to such
Development Candidate (or corresponding Collaboration Product).
5.6 Retained Rights. It is understood and agreed that, subject to Section
---------------
2.6 and Article 15, GenVec shall retain the exclusive right to develop
(including pre-clinical and clinical development), make, have made, use, sell
and otherwise commercialize the Collaboration Products for all uses outside the
Field, and all products other than Collaboration Products in and outside the
Territory and the Co-Promotion Countries. It is understood and agreed that
GenVec may practice and use its Background Technology and Collaboration
Technology in the Territory and the Co-Promotion Countries to facilitate the
exercise of its rights outside the Territory and outside the Co-Promotion
Countries.
-22-
5.7 Covenant Not to Xxx. In partial consideration for the grant of rights
-------------------
hereunder, Warner agrees not to enforce against GenVec or its Affiliates any
Collaboration Technology owned or controlled by Warner or its Affiliates during
the term of this Agreement that GenVec or its Affiliates may infringe in
practicing the inventions claimed in Background Technology owned or Controlled
by GenVec, unless such practice would constitute a material breach of the
licenses granted Warner hereunder.
5.8 No Unauthorized Use. Each Party hereby covenants to the other that it
-------------------
will not practice the Background Technology or Collaboration Technology of the
other Party, except as expressly permitted in this Agreement.
5.9 No Implied Licenses. No rights or licenses with respect to any
-------------------
intellectual property owned by GenVec or Warner are granted or shall be deemed
granted hereunder or in connection herewith, other than those rights expressly
granted in this Agreement.
6. CONSIDERATION
6.1 [*] In partial consideration for the license and rights granted Warner
---
herein, Warner shall pay to GenVec within [*] of the Effective Date a [*] Such
amount shall not be refundable nor creditable against other amounts due GenVec
under this Agreement.
6.2 Purchase of GenVec Stock. Warner shall purchase shares of GenVec
------------------------
preferred and/or common stock from GenVec, pursuant to the terms and conditions
of the Stock Purchase Agreement.
6.3 Research Program and Development Funding.
----------------------------------------
6.3.1 [*] Warner agrees to pay to GenVec research funding
---
with respect to the Research Program and Development in at least the following
amounts for [*]:
Period Amount
------ ----------
[*]
6.3.2 [*].
---
(a) In [*] then Warner shall pay to GenVec research funding
with respect to the Research Program and Development in at least the following
amounts:
Period Amount
------ ----------
[*]
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[*]
(b) If the Parties agree pursuant to Section 2.5 to include
[*] then Warner shall pay to GenVec funding for the Research Program and
Development of at least [*] for each of [*]
(c) If the parties agree pursuant to Section 2.5 to include
more than one indication in addition [*] then Warner shall pay to GenVec
additional funding for the Research Program and Development for each such
indication of [*] per year as provided in Section 2.5.2 unless GenVec otherwise
agrees, in its reasonable discretion, that a lesser amount of funding will
provide appropriate support for the activities to be conducted in the Research
Program with respect to such indication.
6.3.3 Research Program Extension. If the Research Program is
--------------------------
extended beyond [*] pursuant to Section 2.4.1, Warner shall pay to GenVec
additional Research Program funding to be agreed by the Parties for such
additional period.
6.3.4 Schedule of Payments. [*] of the Research Program shall
--------------------
commence on [*] and each subsequent [*] of the Research Program (each a "[*]")
shall commence on [*]. The amounts to be paid to GenVec in connection with the
Research Program shall be paid [*] The initial payment for the [*] of the
Research Program shall be made [*] after the Effective Date, and subsequent
payments shall be made on or before the applicable [*] of the Effective Date.
Unless required by applicable law, such payments shall be made without
withholding for taxes or any other charge and, subject to Section 2.2.1, shall
be non-refundable and non-creditable against other payments due GenVec under
this Agreement. [*]
6.4 Milestone Payments.
------------------
6.4.1 Collaboration Products. Within [*] days following the
----------------------
occurrence of the relevant events specified below with respect to the first
Collaboration Product intended for use for the treatment of [*] Warner shall pay
to GenVec the following amounts:
______________
[*]
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______________
[*]
In addition, [*] days following the second occurrence and each subsequent
occurrence of each of the above milestones for each additional Collaboration
Product for the treatment of either [*] Warner will pay to GenVec additional
milestone payments equal to one-third of the amounts indicated above for the
applicable event.
6.4.2 Backup Collaboration Products. The payments due under Section
-----------------------------
6.4.1 above shall be made with respect to each Collaboration Product; provided,
however, if Warner ceases all development of a particular Collaboration Product
after having made payments with respect to such Collaboration Product under
Sections 6.4.1 above following the accomplishment of any milestone specified
above, there shall be no payment due upon the accomplishment of that same
milestone with respect to the next Collaboration Product for the same
indication. When milestones are achieved with respect to such subsequent
Collaboration Product which were not previously paid with respect to a
corresponding earlier discontinued Collaboration Product, such milestone
payments shall be paid pursuant to Section 6.4.1.
6.4.3 Milestones for Indications other than [*] Within [*]
-----------------------------------------
following the demonstration of preclinical efficacy (as demonstrated
by meeting criteria established in [*] for each indication in the Field [*]
and, in each case, Warner shall pay to GenVec with respect to each such
indication a one-time milestone payment of [*]
6.5 Royalties.
---------
6.5.1 Collaboration Product Royalties. In consideration of the rights
-------------------------------
granted hereunder, subject to Section 6.6.2, Warner shall pay the following
royalties to GenVec with respect to aggregate Net Sales of Collaboration
Products in the Territory, on a Collaboration Product-by-Collaboration Product
basis:
[*]
[*]
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OMITTED PORTIONS.
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[*]
6.5.2 Computation of Royalties. All sales of Collaboration Products
------------------------
between Warner and any of its Affiliates and sublicensees shall be disregarded
for purposes of computing Net Sales and royalties under this Section 6.5, and in
such instances royalties shall be payable only upon sales to unlicensed Third
Parties. Nothing herein contained shall obligate either Party to pay the other
Party more than one royalty on any unit of a Collaboration Product.
6.5.3 Royalty Term. The obligation of Warner to pay royalties under
------------
this Article 6 shall continue for each Collaboration Product on a Collaboration
Product-by-Collaboration Product and country-by-country basis, until the later
of (i) such time as there are no Valid Claims which but for the licenses granted
herein would be infringed by the manufacture, sale or use of such Collaboration
Product in such country, or (ii) [*] from the first commercial sale of such
Collaboration Product in such country.
6.5.4 Minimum Royalty. It is understood and agreed that regardless of
---------------
any credits or offsets to which Warner is entitled under the terms of this
Agreement, the royalty payments due GenVec under Article 6 shall not be [*] of
any Collaboration Product in the applicable quarter.
6.6 Third Party Royalties.
---------------------
[*]
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OMITTED PORTIONS.
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[*]
6.7 Withholding Taxes. Any income or other tax that a Party hereunder,
-----------------
its Affiliates or sublicensees is required to withhold (the "Withholding Party")
and pay on behalf of the other Party hereunder (the "Withheld Party") with
respect to the royalties payable under this Agreement shall be deducted from and
offset against said royalties prior to remittance to the Withheld Party;
provided, however, that in regard to any tax so deducted, the Withholding Party
shall give or cause to be given to the Withheld Party such assistance as may
reasonably be necessary to enable the Withheld Party to claim exemption
therefrom or credit therefor, and in each case shall furnish the Withheld Party
proper evidence of the taxes paid on its behalf.
6.8 Guaranty. Warner agrees that as additional consideration for GenVec's
--------
performance hereunder, it will guaranty a loan to GenVec by a bank or other
financial institution in a principal amount of [*] which guaranty shall be in
a reasonable form agreed by the Parties. As a condition to Warner's obligation
to execute the Guaranty and to secure the obligation of GenVec to reimburse
Warner if Warner is required to make a payment under the Guaranty, GenVec shall
execute and deliver to Warner a Security Agreement in a reasonable form agreed
by the Parties.
7. BOOKS AND RECORDS
7.1 [*]
---
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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7.2 Payment Method; Late Payments. All amounts due GenVec hereunder shall
-----------------------------
be paid in U.S. dollars by wire transfer in immediately available funds to a
bank account designated by GenVec. Any payments or portions thereof due
hereunder which are not paid on the date such payments are due under this
Agreement shall bear interest at a rate equal to the lesser of prime rate as
reported by the Citibank (or its successor in interest), New York, New York,
[*] or the maximum rate permitted by law, calculated on the number of days such
payment is delinquent, compounded monthly. This Section 7.2 shall in no way
limit any other remedies available to GenVec.
7.3 Currency Conversion. Royalties earned shall first be determined in
-------------------
the currency of the country in which they are earned and then converted to its
equivalent in United States currency. The buying rates of exchange for
converting the currencies involved into the currency of the United States quoted
by Citibank (or its successor in interest) New York, New York at the close of
business on the last business day of the quarterly period in which the royalties
were earned shall be used to determine any such conversion.
7.4 Restrictions on Payments. The obligation to pay royalties under this
------------------------
Agreement shall be waived and excused to the extent that statutes, laws, codes
or government regulations in a parti cular country prevent such royalty
payments; provided, however, in such event, if legally permissible, Warner shall
pay the royalties owed to GenVec by depositing such amounts in a bank account in
such country that has been designated by GenVec and promptly report such payment
to GenVec.
7.5 Records; Inspection. Warner and its Affiliates shall keep (and cause
-------------------
its Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable under Article
6. Such books and records shall be kept reasonably accessible for at least
[*] following the end of the calendar quarter to which they pertain.
Such records will be open for inspection during such [*] period by a
representative or agent of GenVec reasonably acceptable to Warner, which
approval shall not be unreasonably withheld for the purpose of verifying the
royalty statements. Such inspections may be made no more than once each
calendar year, at reasonable times mutually agreed by Warner and GenVec.
GenVec's representative or agent will be obliged to execute a reasonable
confidentiality agreement prior to commencing any such inspection and may only
disclose to GenVec the amount of any variance or error. GenVec shall bear the
costs and expenses of inspections conducted under this Section 7.5, unless a
variation or error producing an underpayment in royalties payable [*]
of the amount payable for any inspection period is established in the course of
any such inspection, whereupon all costs relating to the inspection and any
unpaid amounts that are discovered will be paid by Warner, together with
interest on such unpaid amounts at the rate specified in Section 7.2 above.
8. COMMERCIALIZATION IN THE TERRITORY
8.1 Collaboration Product Development. Subject to Article 9 if the
---------------------------------
Parties Co-Promote, Warner shall be responsible for all costs of conducting
Development of Collaboration Product(s) in
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the Territory, including, without limitation, expenses incurred in conducting
clinical trials for Collaboration Products for which it retains
commercialization rights thereto. In addition, Warner shall be responsible, at
its sole expense, for all commercialization of such Collaboration Product(s) in
the Territory so long as Warner retains rights thereto under this Agreement.
During the term of this Agreement, Warner shall keep GenVec fully informed of
its activities subject to this Agreement, including without limitation, the
achievement of the milestones set forth in Sections 6.4 and 8.2.2 and the
commercialization of the Collaboration Product(s). On or before January 31 of
each year, at GenVec's request, Warner shall provide GenVec with a written
report summarizing such events and activities and detailing those which have not
been previously reported. When a registration package requesting approval for
commercial sale of any Collaboration Product is first filed in any country
within the Territory, and when approval is received therefor, Warner will
immediately notify GenVec in writing.
8.2 Due Diligence.
-------------
8.2.1 Reasonable Efforts. Warner shall use all reasonable efforts to:
------------------
(i) promptly develop the Collaboration Products following designation of such
Collaboration Product, (ii) achieve the milestones set forth in this Section
8.2, (iii) obtain regulatory approvals to market such Collaboration Products in
the Territory, and (iv) after obtaining regulatory approvals for any such
Collaboration Product, launch such Collaboration Product and promote and meet
the market demand therefor throughout the Territory. In connection therewith,
Warner shall only be required to use efforts comparable to those efforts Warner
makes with respect to its own pharmaceutical products of comparable commercial
potential, stage of development and patent protection.
8.2.2 Milestones.
----------
(a) [*] Warner (or its Affiliates or
---
Sublicensees) shall achieve each of the milestones set forth below with respect
to the first Collaboration Product for [*] the applicable date set forth
below, unless other dates are agreed by the Executive Committee:
________
MILESTONE MILESTONE DATE
[*]
It is understood and agreed that Warner shall have no obligation to achieve
[*] milestone under this Section 8.2.2(a) if the Executive Committee
has determined that GenVec is responsible for the [*]
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(b) [*]. Upon designation of a Development Candidate pursuant
---
to Section 4.1.2 for each indication within the Field [*], the Executive
Committee shall establish a Development Plan for the corresponding Collaboration
Product pursuant to Section 4.4, and [*], initiation of [*], and the [*] with
respect to such Collaboration Product; provided, the dates for achievement of
the foregoing milestones with respect to the first Collaboration Product [*]
shall be established by the Executive Committee no later than [*] Such dates may
be modified by the Executive Committee.
8.2.3 Payments. In the event that Warner fails to achieve any
--------
milestone with respect to any Collaboration Product within [*] after the
applicable milestone date established under Section 8.2.2 above, Warner shall
pay to GenVec an amount equal to [*] corresponding milestone payment described
in Section 6.4. Such payment shall be due within [*] of the applicable milestone
date and shall be creditable against the milestone payment due upon actual
achievement of the applicable milestone. The balance of any milestone payment
which has been partially paid pursuant to this Section 8.2.3 shall be due and
payable [*] after actual achievement of the applicable milestone.
8.2.4 Lack of Diligence. In the event that Warner (i) fails to use or
-----------------
continue to use diligent efforts to actively develop and commercialize at least
one Product Configuration (or corresponding Collaboration Product) for a
particular clinical indication in the Field as set forth in Section 8.2.1 above
(which diligence shall include but not be limited to the payment of the amounts
set forth in Section 8.2.3), or (ii) notifies GenVec that it will not conduct
further commercialization with respect to a particular clinical indication in
the Field, then GenVec may terminate Warner's rights under this Agreement with
respect to such clinical indication and all Product Configurations (or
corresponding Collaboration Products) therefor in the Territory. In such event,
such indication shall thereafter be excluded from the Field, and, subject to
Article 15, GenVec shall thereafter have the exclusive rights to commercialize
any Product Configuration (or corresponding Collaboration Product) for such
indication in the Territory, alone or with Third Parties, without obligation to
Warner.
8.2.5 Licenses. In the event that any of Warner's rights terminate
--------
pursuant to Section 8.2.4 above, at GenVec's request, Warner shall grant to
GenVec the following licenses for Product Configurations (and corresponding
Collaboration Products) for the applicable clinical indication:
(a) Warner will grant GenVec an exclusive (even as to Warner),
worldwide, fully-paid, perpetual license (with the right to sublicense) under
Warner's interest in any Collaboration Technology jointly owned by Warner and
GenVec necessary or useful to make, have made, import, use, offer for sale and
sell Product Configurations (and corresponding Collaboration Products), subject
to Article 15, for indications other than those which Warner retains rights
hereunder, and products other than Collaboration Products; and
(b) At GenVec's request, Warner will negotiate in good faith
the terms of an exclusive, worldwide license to GenVec (with the right to
sublicense) under Warner's interest in
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any Collaboration Technology owned solely by Warner, to make, have made, use,
import, offer for sale and sell Product Configurations, subject to Article 15,
which terms shall include the payment of a royalty to Warner on net sales (such
net sales to be calculated in accordance with Section 1.27 (with appropriate
contextual adjustments) and GAAP) of such products up to [*] and other customary
and reasonable terms to be agreed by the Parties.
(c) At GenVec's request, Warner will negotiate in good faith the terms
of a nonexclusive, worldwide license to GenVec (with the right to sublicense)
under Warner's interest in any Collaboration Technology owned solely by Warner,
to make, have made, use, import, offer for sale and sell products other than
Product Configurations, subject to Article 15, which terms shall include the
payment of a royalty to Warner on net sales (such net sales to be calculated in
accordance with Section 1.27 (with appropriate contextual adjustments) and GAAP)
of such products up to [*] and other customary and reasonable terms to be agreed
by the Parties.
8.3 Commercialization Outside the Territory and Co-Promotion Countries.
------------------------------------------------------------------
It is understood and agreed that, subject to Section 2.2.3, GenVec and/or the
Asian Partner shall be responsible, at their sole expense, for conducting all
research and development (including, without limitation, clinical trials) and
commercialization of Collaboration Products outside the Territory and Co-
Promotion Countries.
9. CO-PROMOTION OPTION
GenVec shall have the option, exercisable on or before [*] (as established
by the Executive Committee) with respect to each [*] with written notice to
Warner, to co-develop and co-promote such Collaboration Product for any such
indication in any one or more of the Co-Promotion Countries (the "Co-Promotion
Option"). If GenVec exercises the Co-Promotion Option with respect to a
particular Collaboration Product [*], GenVec shall have the right to co-promote
such Collaboration Product for [*] in the Co-Promotion Country(ies), and the
Parties shall promptly negotiate and enter into a further Co-Promotion Agreement
consistent with this Agreement and which shall include the provisions set forth
on Exhibit B hereto, unless otherwise agreed by the Parties. If the Parties fail
to enter into a written Co-Promotion Agreement within nine (9) months from the
exercise of the Co-Promotion Option by GenVec, subject to Article 15, neither
Party shall have any right to commercialize the pertinent Collaboration Product
in the Co-Promotion Countries.
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10. TRADEMARKS
10.1 Warner Trademarks. Warner may select and own one or more trademarks
-----------------
for marketing a Collaboration Product in countries in the Territory (the "Warner
Trademarks"), taking into consideration the Trademark(s) selected by the Parties
for any countries in which the Parties are conducting co-promotion, if any. All
expenses for (i) registration of such Warner Trademark and (ii) bringing,
maintaining and prosecuting any action to protect or defend such Warner
Trademark in such countries shall be borne by Warner. If Warner and its
Affiliates and Sublicensees terminate the sale of any Collaboration Product
during the term of this Agreement, at GenVec's request, Warner shall assign
during the term of this Agreement to GenVec any Warner Trademark which
specifically identifies such Collaboration Product, and GenVec shall be
responsible for any enforcement and/or maintenance thereof thereafter.
[*]
10.3 Use of Trademarks. Except as set forth in this Article 10, nothing
-----------------
contained in this Agreement shall grant to either Party any right, title, or
interest in or to any trademarks of the other Party, whether or not specifically
recognized or perfected under applicable laws. At no time during or after the
term of this Agreement shall either Party challenge or assist others to
challenge trademarks used in connection with the Collaboration Products or the
registration thereof or attempt to register any trademarks, marks, or trade
names confusingly similar to such trademarks.
11. SUPPLY OF COLLABORATION PRODUCTS
11.1 Manufacture of Bulk Product by GenVec.
-------------------------------------
11.1.1 GenVec will have the right to manufacture or have
manufactured the Parties' requirements in the Territory and the Co-Promotion
Countries of each Collaboration Product for clinical studies and requirements of
Bulk Product for commercial use at a GMP facility, provided Bulk Product for
commercial use shall be manufactured at a GMP facility which is licensed and
qualified by the FDA to manufacture such Bulk Product. All costs associated with
the qualification or validation of GenVec or a Third Party manufacturer for the
production of such Bulk Product pursuant to this Section 11.1 shall be borne by
GenVec.
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11.1.2 All Product supplied under this Section 11.1.2 shall be
supplied by GenVec at a price equal to the greater of (i) [*] the Cost of
Manufacture of such Collaboration Product, or (ii) [*] of Net Sales [*] Prior to
such time that GenVec commences supply of the first Collaboration Product for
commercial sale, the Executive Committee shall establish a mechanism for
determining the specific payments due to GenVec pursuant to this Section 11.1.2,
and the timing of such payments to GenVec. Notwithstanding the above, if the
price of the Bulk Product form of any particular Collaboration Product purchased
from GenVec exceeds [*] and Warner has a written binding commitment from a
Second Source that such Second Source will provide such Bulk Product to Warner
for at least three (3) years at a price less than [*] of [*] Manufacture for
such [*] Warner may notify GenVec, and in such event Warner may purchase such
[*] of such Collaboration Product from such Second Source unless GenVec agrees
to match the price offered Warner by the Second Source.
11.1.3 The Executive Committee shall be responsible for
establishing the specifications, including any necessary documentation,
certificates of analysis and test results, for the relevant Collaboration
Product to be manufactured under this Section 11.1. The Executive Committee will
promptly provide each Party with copies of all such specifications and other
information and documentation. In addition, GenVec will provide Warner with
notice of, and results and data from, all FDA audits relating to GenVec's supply
of Bulk Product.
11.2 Manufacture of Finished Product by Warner.
-----------------------------------------
11.2.1 Warner will have the right, using Bulk Product supplied
pursuant to Section 11.1 or 11.4, to manufacture or have manufactured the
Parties' requirements of each Finished Product at a GMP facility which is
licensed and qualified by the FDA to manufacture such Finished Product. All
costs associated with the qualification or validation of Warner or a Third Party
manufacturer for the production of such Finished Product for sale in the
Territory pursuant to this Section 11.2 shall be borne by Warner.
11.2.2 The Executive Committee shall be responsible for
establishing the specifications, including any necessary documentation,
certificates of analysis and test results, for the relevant Collaboration
Product to be manufactured under this Section 11.2. The Executive Committee will
promptly provide each Party with copies of all such specifications and other
information and documentation. In addition, Warner will provide GenVec with
notice of, and results and data from, all FDA audits relating to Warner's supply
of Finished Product.
11.2.3 At GenVec's request, Warner will supply Finished Products to
GenVec for sale outside the Territory and Co-Promotion Countries, on terms to be
agreed in good faith by the Parties.
11.3 Warner's Right to Identify and Qualify Second Source for Bulk
-------------------------------------------------------------
Product. In its sole discretion and at its expense, Warner may, at any time,
-------
either (i) enter into an agreement for the
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qualification and validation of a Third Party manufacturer of Bulk Product, or
(ii) qualify and validate itself to manufacture Bulk Product (the "Second
Source") and GenVec shall provide reasonable cooperation and assistance at
Warner' expense to the Second Source with respect to such qualification and
validation. In the event such Second Source supplies Bulk Product pursuant to
Section 11.4, [*]
11.4 Use of Second Source for Bulk Product. In addition to Warner's right
-------------------------------------
to use the Second Source pursuant to Section 11.1.2, if GenVec is unable to
supply all of the reasonably anticipated requirements (as forecasted pursuant to
Section 11.5.1) of Bulk Products to be manufactured by GenVec pursuant to
Section 11.1 for any reason, including force majeure causes (as defined under
Section 21.6), it shall immediately notify Warner and the Executive Committee
shall discuss the manufacturing issues within ten (10) days of a request by
either Party. If, following such discussions the Parties mutually agree, the
Parties shall utilize the Second Source to manufacture such portion of the Bulk
Products which GenVec is not able to supply. If such Second Source is not yet
established, the Parties may agree on a mutually acceptable Third Party
manufacturer to replace or supplement GenVec as a manufacturer of Bulk Products.
All Bulk Products manufactured by the Second Source shall be manufactured in
accordance with the specifications approved by the Executive Committee. If a
Second Source manufactures any Bulk Products pursuant to this Section 11.4,
Warner and GenVec shall cooperate and assist each other to obtain, transfer or
use any licenses, registrations or information reasonably required to permit
such Second Source to manufacture such Bulk Product.
11.5 Terms of Manufacture and Supply.
-------------------------------
11.5.1 The Executive Committee shall establish procedures
acceptable to both Parties regarding forecasts of requirements of the
Collaboration Products.
11.5.2 Each party shall, at the request and expense of the other
Party, permit an independent accountant to whom the other Party has no
reasonable objection, to have access to and to examine the written records of
the Party which is manufacturing a particular Collaboration Product concerning
its Cost of Manufacturing, during normal business hours, but not more than once
in any twelve (12) month period, to verify the Cost of Manufacturing. The
reviewing Party shall keep in strict confidence all information learned in the
course of such audit.
11.5.3 Each Party shall keep adequate records with respect to all
Collaboration Products manufactured by it or for it (i.e., Bulk Product or
Finished Product, as the case may be) and in any case in compliance with
applicable law. From time to time, the other Party shall have the right to
review and audit, at the requesting Party's expense, such records and
manufacturing facility (or the facility of a Third Party manufacturer used by
the manufacturing Party) to the extent necessary to verify compliance with the
manufacturing party's obligations hereunder, using an independent auditor
acceptable to the manufacturing Party.
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11.5.4 Each Party shall be responsible for manufacturing at a GMP
facility, maintaining the quality control in connection with its own manufacture
of Bulk Products and Finished Products in accordance with cGMP and the
Collaboration Product specifications and shall maintain such further quality
control standards as are established by the Executive Committee. To the extent
Finished Products or Bulk Products are manufactured by a Third Party, the Party
or Parties contracting with such Third Party shall provide in such contract that
such Third Party will be held to the quality control standards established by
the Executive Committee.
11.5.5 Each Party shall use diligent efforts to obtain and maintain
any Regulatory Approvals in the Territory and the Co-Promotion Countries
necessary to manufacture and supply under this Article 11 during the Development
and commercialization of each Collaboration Product.
11.5.6 At the request of either Party, the Parties shall promptly
negotiate and enter into a detailed supply agreement for any Collaboration
Product which shall contain reasonable terms, agreed by the parties, which are
customary in agreements of such type and consistent with the terms herein.
[*]
12. REGULATORY AFFAIRS
12.1 Side Effects. Each Party shall advise the other within the time
------------
limit required by applicable Agency laws and regulations (or similar foreign
laws and regulations) by telefax or overnight delivery service addressed to the
attention of its Vice President, Medical Affairs (or, in GenVec's case, the
employee with similar responsibilities), of any unexpected side effect, adverse
reaction or injury which has been brought to that Party's attention at any place
and which is alleged to have been caused by a Collaboration Product. Warner
shall have all rights and responsibility to report such side effects, adverse
reaction or injury in the Territory to regulatory authorities and others as
appropriate.
12.2 Regulatory and Other Inquiries. Upon being contacted by the FDA or
------------------------------
any drug regulatory Agency for any regulatory purpose pertaining to this
Agreement or to a Collaboration Product, GenVec and Warner shall promptly
(within two (2) business days) notify and consult with one another and Warner
shall provide a response as it deems appropriate. Warner shall have sole
responsibility for responding to all inquiries in the Territory to Warner or
GenVec regarding the benefits, side effects and other characteristics of
Collaboration Products. The Party which is responsible for manufacturing the
Bulk Product form of the pertinent Collaboration Product shall have the sole
responsibility for responding to all inquiries in the Territory regarding the
manufacture of such Bulk Product form after consultation with the other Party.
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[*]
12.4 Access to Regulatory Filings. Each Party and its Affiliates, and,
----------------------------
subject to such Party's obligations to Third Parties, its Sublicensees, shall
have the right to refer to, access, cross reference, and use documents relating
to each Collaboration Product filed by a Party or its Affiliates or Sublicensees
with regulatory entities with respect to activities conducted in connection with
the Research Program or the Development, including clinical studies and other
supporting information, and any written communications to and with the FDA and
other comparable Agencies. GenVec (and its designees) shall have access to and
the right to the Data Package for use in connection with regulatory filings for
(i) Collaboration Products, outside the Co-Promotion Countries and the
Territory, and (ii) with respect to Product Configurations (and corresponding
Collaboration Products) for which Warner does not retain rights under this
Agreement, and other products, outside and within the Territory and Co-Promotion
Countries. It is understood and agreed that GenVec shall not provide access to
the Data Package or other data generated in connection with the Research Program
or with respect to the Development of a Development Candidate (or corresponding
Collaboration Product) to the Asian Partner unless the Asian Partner agrees to
pay the amounts described in Section 2.2.3.
[*]
13. DEVICE DELIVERY
13.1 Device Plan. Within ninety (90) days of the Effective Date, the
-----------
Research Management Committee agrees to meet to discuss the potential role of
device delivery technology (e.g., [*]) with respect to the research, development
and commercialization of potential Collaboration Products. At such meeting, the
Research Management Committee shall agree to a timeline, [*], for the
establishment of initial recommendations on how to appropriately integrate the
use of device delivery technology in the research and development of
Collaboration Products, with the objective of optimizing the commercial adoption
of Collaboration Products.
13.2 Device Agreement. If the Executive Committee determines that a
----------------
relationship or relationships with one or more device companies is appropriate
for commercialization of one or
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more of the Collaboration Products, GenVec and Warner will jointly select such
company or companies with expertise in the development and commercialization of
devices for the delivery of therapeutic agents (each a "Device Company") and
shall jointly negotiate with any such Device Company the terms of an agreement
for use of the applicable Collaboration Products in the Field with a device or
devices. During the term that Warner has rights hereunder with respect to a
particular Collaboration Product, except in connection with an Asian Partner,
neither Party may license any of its Patents or Know-How to, or otherwise
collaborate in the Field in the Territory or Co-Promotion Countries with, any
Third Party (other than a Sublicensee) for use of a Collaboration Product with a
delivery device, except pursuant to an agreement mutually acceptable to GenVec
and Warner (a "Device Company Agreement").
14. INTELLECTUAL PROPERTY
14.1 Ownership of Technology.
-----------------------
14.1.1 Background Technology. Except as otherwise set forth herein,
---------------------
each Party shall retain ownership or Control, as the case may be, over its
Background Technology. The owner of any patentable Background Technology shall
have the right, at its option and expense, to prepare, file and prosecute in its
own name any patent applications with respect to such Background Technology and
to maintain any patents issued thereon.
14.1.2 Collaboration Technology. Inventorship and rights of
------------------------
ownership of Collaboration Technology (whether or not patentable) shall be
determined in accordance with United States laws of inventorship or the law of
Maryland, as applicable.
14.2 Solely-Owned Patent Rights.
--------------------------
14.2.1 The sole owner (the "Owner") of any patentable Collaboration
Technology (an "Invention") shall have the right, at its option and expense, to
prepare, file and prosecute patent applications in its own name, in such
countries as it deems appropriate, and conduct any interferences, re-
examinations, reissues, oppositions or requests for patent term extensions
relating thereto, using counsel of its choice, and to maintain any patents
issued. In connection therewith, the non-Owner Party agrees to cooperate with
the Owner, at the Owner's expense, in the preparation and prosecution of all
such patent applications and in the maintenance of any patents issued. The
Owner shall keep the other Party currently informed of all steps to be taken in
such preparation, prosecution and maintenance of all of its Patent Rights which
claim an Invention and shall upon request furnish the other Party with copies of
such Patent Rights and other related correspondence relating to such Invention
to and from patent offices and where feasible, permit the other Party a period
of at least [*] to offer its comments thereon before the Owner makes a
submission to a patent office which could materially affect the scope or
validity of the patent coverage that may result, and promptly provide the other
Party copies of any documents relating to Invention which the Party conducting
such activities receives from such patent offices, including notice of all
interferences, reissues, reexaminations, oppositions or requests for patent term
extensions.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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[*]
14.3 Jointly Owned Inventions.
------------------------
14.3.1 Responsibilities. Collaboration Technology jointly invented
----------------
by GenVec and Warner will be jointly owned by GenVec and Warner (each a "Joint
Invention"). In each case, the Parties shall agree which Party will have the
rights and responsibilities of the "Inventor" (as described in this Article 14)
in respect of any such patentable, jointly owned Collaboration Technology, and
which Party shall have the rights and responsibilities of a non-Inventor
therefor. The Inventor shall use patent counsel reasonably acceptable to the
Non-Inventor, and shall keep the non-Inventor fully informed as to the status of
such patent matters, including, without limitation, by providing the non-
Inventor and its patent counsel the opportunity, at the non-Inventor's expense,
to review and comment on any documents relating to the Joint Invention which
will be filed in any patent office at least [*] before such filing, and promptly
providing the non-Inventor copies of any documents relating to Joint Invention
which the Inventor receives from such patent offices, including notice of all
interferences, reissues, reexaminations, oppositions or requests for patent term
extensions.
14.3.2 Cooperation.
-----------
(a) The Parties will cooperate to file, prosecute and
maintain patent applications covering the Joint Invention(s) within the
Collaboration Technology in the United States and the European Union (in Europe
through a European Patent Convention application) (collectively, the "Core
Countries") and other countries agreed by the Parties. The Parties will share
equally all expenses and fees associated with the filing, prosecution, issuance
and maintenance of any patent application and resulting patent for a Joint
Invention in the Core Countries and other agreed countries and if such Joint
Invention is relevant to the Collaboration such amounts shall be included within
the Research Program expenses described in Section 2.2. Subject to Section
14.3.2(b) below, it is understood that, after the termination of the Research
Program, the parties shall share equally the expenses and fees associated with
the filing, prosecution, issuance and maintenance of any patent application and
resulting patent for a Joint Invention in the Core Countries and other agreed
countries.
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OMITTED PORTIONS.
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(b) In the event that either Party wishes to seek patent
protection with respect to any Joint Invention outside the Core Countries, it
shall notify the other Party hereto. If both Parties wish to seek patent
protection with respect to such Joint Invention in such country or countries,
activities shall be subject to Section 14.3.2(a) above. If only one Party wishes
to seek patent protection with respect to such Joint Invention in such country
or countries (including, without limitation, Japan), it may file, prosecute and
maintain patent applications and patents with respect thereto, at its own
expense. Whenever possible, the Parties shall cooperate to obtain the benefit of
international treaties, conventions and/or agreements (e.g., the Patent
Cooperation Treaty) in order to obtain the benefits afforded thereby. [*]
14.4 Enforcement.
-----------
14.4.1 Notice. GenVec and Warner shall each promptly notify the
------
other of any infringement or unauthorized use of an Invention which comes to its
attention, describing the facts relating thereto in reasonable detail.
14.4.2 Solely Owned Inventions. Subject to 14.4.3 below, in the
-----------------------
event that any Background Technology or Collaboration Technology solely owned by
a Party (collectively "Technology") necessary for manufacture, use and sale of a
Collaboration Product is infringed or misappropriated by a third Party in any
country in the Territory, or is subject to a declaratory judgment action arising
from such infringement in such country, Warner or GenVec, as the case may be,
shall promptly notify the other Party hereto. The Party which owns or Controls
such Technology (the "Technology Owner") shall have the initial right (but not
the obligation) to enforce such Technology, or defend any declaratory judgment
action with respect thereto, at its expense. In the event that the Technology
Owner fails to initiate a suit to enforce such Technology against a commercially
significant infringement in the Field by a Third Party in any jurisdiction in
the Territory within [*] of a request by the other Party (the "Licensee") to do
so, the Licensee may, subject to the Technology Owner's agreements with Third
Parties, initiate such suit in the name of the Technology Owner of such
Technology against such infringement, at the expense of such Licensee. In the
event that the Technology Owner's agreements with a Third Party do not allow the
other Party hereto to initiate a suit as described above to enforce the
Technology against a Third Party infringer, then the Technology Owner shall be
obligated to commence such a suit and use diligent efforts in connection
therewith or obtain for the Licensee the right to commence suit against the
infringer. The Party involved in any such claim, suit or proceeding, shall keep
the other Party hereto reasonably informed of the progress of any such claim,
suit or proceeding. Any recovery by such Party received as a result of any such
claim, suit or proceeding shall be used first to reimburse such Party for all
expenses (including attorneys and professional fees) incurred in connection with
such claim, suit or proceeding and if the Party initiating the suit is the
Technology Owner of the subject Technology, all of the remainder shall be
retained by such Technology Owner, and if the Party initiating the suit is the
Licensee, [*] of the remainder shall be paid to the Technology Owner of the
subject Technology and [*] retained by the Licensee.
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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14.4.3 Joint Inventions. In the event GenVec or Warner becomes
----------------
aware of any actual or threatened infringement in the Territory of any Patent
Right which claims a Joint Invention, that Party shall promptly notify the other
and the Executive Committee shall promptly discuss how to proceed in connection
with such actual or threatened infringement. In the event such infringement
relates to a jointly owned Collaboration Product only one Party wishes to
participate in such proceeding, it shall have the right to proceed alone, at its
expense, and may retain any recovery; provided, at the request and expense of
the participating Party, the other Party agrees to cooperate and join in any
proceedings in the event that a third Party asserts that the co-owner of such
Joint Invention is necessary or indispensable to such proceedings.
[*]
14.6 Independent Inventions. Ownership rights to inventions that do not
----------------------
rely in material part on technology, data or knowledge contributed by the other
Party or derived under the Collaboration and that are made by the employees of
GenVec (but not of Warner) or by the employees of Warner (but not of GenVec), as
the case may be, whether or not made during the Term of this Agreement, shall
reside solely in GenVec or Warner, respectively, as the case may be. Neither
Party will claim or assert ownership rights, licenses or royalties or other
compensation with respect to such patents and other intellectual property owned
by the other Party. The applicable Party
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shall have the right, at its option and expense, to prepare in its own name,
file and prosecute any patent applications and to maintain any patents issued
with respect to such inventions. In connection therewith, the other Party agrees
to cooperate with the filing Party at the filing Party's expense in the
preparation and prosecution of all such patent applications covering such
independent inventions to the extent that such Party's cooperation is reasonably
necessary therefor. This obligation shall survive the expiration or termination
of this Agreement.
15. OTHER ACTIVITIES
15.1 Product Configurations. Except as specifically provided in this
----------------------
Agreement or otherwise agreed in writing, neither Warner nor its Affiliates or
Sublicensees shall commercialize any Product Configuration studied in the
Research Program or the Development except as a Collaboration Product in
accordance with this Agreement.
[*]
[*]
16. REPRESENTATIONS AND WARRANTIES
16.1 Legal Authority. Each Party represents and warrants to the other
---------------
that it has the legal power, authority and right to enter into this Agreement
and to perform its respective obligations set forth herein.
16.2 No Conflicts. Each Party represents and warrants that as of the date
------------
of this Agreement it is not a Party to any agreement or arrangement with any
Third Party or under any obligation or restriction, including pursuant to its
Certificate of Incorporation or Bylaws, which in any way limits or conflicts
with its ability to fulfill any of its obligations under this Agreement, and
shall not enter into any such agreement during the term of this Agreement.
GenVec further represents and warrants to Warner that it has delivered to Warner
a copy of the Scios Agreement and no oral agreements or other arrangements exist
between Scios and GenVec which supersede any of
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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the terms of any such written agreement, and that as of the Effective Date such
Scios Agreement is in full force and effect and neither party to such agreement
is in default thereunder.
16.3 Others Bound. Each Party covenants that any contract it enters into
------------
with a Third Party performing services under this Agreement on behalf of such
Party will bind such Third Party to all of the relevant terms and conditions of
this Agreement, unless otherwise agreed by the parties.
16.4 Disclaimer. Except as otherwise expressly stated herein, Warner
----------
hereby disclaims any warranty expressed or implied as to any Collaboration
Product sold or placed in commerce by or on behalf of GenVec. Except as
otherwise expressly stated herein, GenVec hereby disclaims any warranty
expressed or implied as to any Collaboration Product sold or placed in commerce
by or on behalf of Warner.
16.5 Disclaimer of Warranties. GenVec and Warner each specifically
------------------------
disclaim that the Research Program or the Development will be successful, in
whole or part or that any clinical or other studies undertaken by it will be
successful. GENVEC AND WARNER EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE CONFIDENTIAL
INFORMATION, BACKGROUND TECHNOLOGY, WARNER PATENTS OR KNOW-HOW, OR GENVEC
PATENTS OR KNOW-HOW, COLLABORATION TECHNOLOGY OR PRODUCT CONFIGURATIONS,
DEVELOPMENT CANDIDATES, OR COLLABORATION PRODUCTS, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE, VALIDITY OF ANY BACKGROUND TECHNOLOGY OR COLLABORATION TECHNOLOGY,
PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS
OF THIRD PARTIES.
17. CONFIDENTIALITY
17.1 Confidential Information. Except as expressly provided herein, the
------------------------
Parties agree that, for the term of this Agreement and for [*] thereafter, the
receiving Party shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose except for the purposes
contemplated by this Agreement or the Stock Purchase Agreement any Confidential
Information of the other Party, or any other data, samples, technical and
economic information (including the economic terms hereof), commercialization,
clinical and research strategies and know-how and other information provided by
the other Party (the "Disclosing Party") during the Term of this Agreement or
during the negotiation of this Agreement, or the Stock Purchase Agreement, or in
connection with the transactions contemplated thereby, or any Collaboration
Technology and all other data, results and information developed pursuant to the
Collaboration and solely owned by the Disclosing Party (collectively the
"Confidential Information") furnished to it by the disclosing Party hereto
pursuant to this Agreement, the Stock Purchase Agreement, or the transactions
contemplated thereby, except that "Confidential Information" shall not include:
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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(a) information that is or becomes part of the public domain through
no fault of the non-Disclosing Party or its Affiliates; and
(b) information that is obtained after the date hereof by the non-
Disclosing Party or one of its Affiliates from any Third Party which is lawfully
in possession of such Confidential Information and not in violation of any
contractual or legal obligation to the Disclosing Party with respect to such
Confidential Information;
(c) information that is known to the non-Disclosing Party or one or
more of its Affiliates prior to disclosure by the Disclosing Party, as evidenced
by the non-Disclosing Party's written records; and
(d) information that is necessary to be disclosed to any
governmental authorities or pursuant to any regulatory filings, but only to the
limited extent of such legally required disclosure; or
(e) information which has been independently developed by the non-
Disclosing Party without the aid or use of any Confidential Information.
17.2 Permitted Disclosures. Confidential Information may be disclosed to
---------------------
employees, agents, consultants, sublicensees or suppliers of the non-Disclosing
Party or its Affiliates, but only to the extent reasonably required to
accomplish the purposes of this Agreement and only if the non-Disclosing Party
obtains prior agreement from its employees, agents, consultants, sublicensees or
suppliers to whom disclosure is to be made to hold in confidence and not make
use of such information for any purpose other than those permitted by this
Agreement. Each Party will use at least the same standard of care as it uses to
protect proprietary or confidential information of its own to ensure that such
employees, agents, consultants, sublicensees or suppliers do not disclose or
make any unauthorized use of the Confidential Information. Notwithstanding any
other provision of this Agreement, each Party may disclose the terms of this
Agreement and the Stock Purchase Agreement to prospective lenders, investment
bankers and other financial institutions of its choice solely for purposes of
financing the business operations of such Party either (i) upon the written
consent of the other Party or (ii) if the disclosing Party obtains a signed
confidentiality agreement with such entity or financial institution with respect
to such information, upon terms substantially similar to those contained in this
Article 17.
17.3 Publicity. All publicity, press releases and other announcements
---------
relating to this Agreement or the transaction contemplated hereby shall be
reviewed in advance by, and shall be subject to the approval of, both Parties;
provided, however, that either Party may (i) publicize the existence and general
subject matter of this Agreement without the other Party's approval, and (ii)
disclose the terms of this Agreement only to the extent required to comply with
applicable securities laws and in the case of (ii), the non-disclosing Party
shall have the right to review and comment on such disclosure prior to its
submission, where practicable. Once a particular disclosure has been approved
for disclosure, either Party may make disclosures which do not differ materially
therefrom without any need for further consents. Notwithstanding the foregoing
provisions of this Section 17.3, the parties agree that all publicity, press
releases and other announcements relating to
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the occurrence of a Tranche Event (as that term is defined in the Stock Purchase
Agreement) shall be governed by Section 13 (e) of the Stock Purchase Agreement.
17.4 Publication. The Parties shall cooperate in appropriate publication
-----------
of the results of research and development work performed pursuant to this
Agreement, but subject to the predominating interest to obtain patent protection
for any patentable subject matter. To this end, it is agreed that prior to any
public disclosure of such results, the Party proposing disclosure shall send the
other Party a copy of the information to be disclosed, and shall allow the other
Party [*] from the date of receipt in which to determine whether the information
to be disclosed contains subject matter for which patent protection should be
sought prior to disclosure, or otherwise contains Confidential Information of
the reviewing Party which such Party desires to maintain as a trade secret. If
notification is not received during the [*] day period, the Party proposing
disclosure shall be free to proceed with the disclosure. If due to a valid
business reason or a reasonable belief by the non-disclosing Party that the
disclosure contains subject matter for which a patentable invention should be
sought, then prior to the expiration of the [*] day period, the non-disclosing
Party shall so notify the disclosing Party, who shall then delay public
disclosure of the information for an additional period of up to [*] permit the
preparation and filing of a patent application on the subject matter to be
disclosed or other action to be taken. The Party proposing disclosure shall
thereafter be free to publish or disclose the information. The determination of
authorship for any paper shall be in accordance with accepted scientific
practice. If GenVec enters into an agreement with an Asian Partner it shall use
reasonable efforts to include in such agreement provisions relating to
publication at least as restrictive as those in this Section 17.4.
18. INDEMNIFICATION
18.1 Warner. Warner agrees to indemnify and hold harmless GenVec and its
------
Affiliates and Sublicensees and their respective employees, agents, officers,
directors and permitted assigns (each a "GenVec Indemnitee") from and against
any claims by a Third Party resulting in any liabilities, damages, settlements,
claims, actions, suits, penalties, fines, costs or expenses incurred (including,
without limitation, reasonable attorneys' fees and other expenses of litigation)
(any of the foregoing, a "Claim") arising out of or resulting from (i)
negligence or willful misconduct by Warner, (ii) a breach of any of the
representations or warranties of Warner hereunder, or (iii) the research and
development or manufacture, use, promotion, marketing, sale or other
distribution of any Product Configuration, Development Candidate and/or
Collaboration Product by Warner or its Affiliates or Sublicensees, except, in
each case, to the extent that such Claim arises out of or results from the
negligence or misconduct of a GenVec Indemnitee.
18.2 GenVec. GenVec agrees to indemnify and hold harmless Warner and its
------
Affiliates and Sublicensees and their respective employees, agents, officers,
directors and permitted assigns (each a "Warner Indemnitee") from and against
any claims by a Third Party resulting in any liabilities, damages, settlements,
claims, actions, suits, penalties, fines, costs or expenses incurred (including,
without limitation, reasonable attorneys' fees and other expenses of litigation)
(any of the foregoing, a "Claim") arising out of or resulting from (i) the
negligence or willful misconduct of GenVec, (ii) a breach of any of the
representations or warranties by GenVec hereunder, or (iii) the
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
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research and development or manufacture by GenVec of any Product Configuration,
Development Candidate and/or Collaboration Product by GenVec or its Affiliates,
except, in each case, to the extent that such Claim arises out of or results
from the negligence or misconduct of a Warner Indemnitee.
18.3 Procedure. A Party or person (the "Indemnitee") that intends to claim
---------
indemnification under this Article 18 shall promptly notify the other Party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its Affiliates, Sublicensees or their
directors, officers, employees, agents or counsel intend to claim such
indemnification, and the Indemnitor shall have the right to participate in, and,
to the extent the Indemnitor so desires, to assume the defense thereof with
counsel chosen by Indemnitor, with consent of Indemnitee, which consent shall
not be unreasonably withheld. The Indemnitee shall not enter into negotiations
or enter into any agreement with respect to the settlement of any Claim without
the prior written approval of the Indemnitor, and the indemnity agreement in
this Article 18 shall not apply to amounts paid in settlement of any loss,
claim, damage, liability or action if such settlement is made without the
consent of the Indemnitor, which consent shall not be withheld unreasonably. The
failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 18. At the Indemnitor's request, the Indemnitee
under this Article 18, and its employees and agents, shall cooperate fully with
the Indemnitor and its legal representatives in the investigation and defense of
any action, claim or liability covered by this indemnification and provide full
information with respect thereto.
18.4 Insurance. During the term of this Agreement, GenVec agrees to
---------
maintain a comprehensive general liability insurance policy providing coverage
in amounts of not less than [*] annual aggregate, and to include Warner as an
additional insured on such insurance policy.
19. TERM AND TERMINATION
19.1 Term. This Agreement shall be effective as of the Effective Date and,
----
unless otherwise terminated earlier pursuant to the other provisions of this
Article 19, shall continue in full force and effect on a Collaboration Product-
by-Collaboration Product and country-by-country basis until the date that
neither Party nor its Affiliates and Sublicensees has any remaining royalty
obligations to the other Party in such country; provided, the provisions of
Section 15.2 shall terminate upon the date that Warner and its Affiliates and
Sublicensees have no further royalties obligations in any country under this
Agreement. Following the expiration of royalty obligations in any country within
the Territory with respect to a particular Collaboration Product or other
product subject to a license granted herein, the Party which has received a
royalty-bearing license therefor shall have a non-exclusive, non-transferable,
fully paid license under the other Party's interest (i) in the non-patented
Background Technology, and (ii) the Know-How within the Collaboration
Technology, solely to commercialize such Collaboration Product in the Field or
such other product in such country, as the case may be.
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19.2 Termination for Cause. Either Party may terminate this Agreement in
---------------------
the event the other Party has materially breached or defaulted in the
performance of any of its obligations hereunder, or under the Stock Purchase
Agreement and such default has continued for [*] after written notice thereof
was provided to the breaching Party by the nonbreaching Party, or if a cure of
such default cannot reasonably be effected within [*] the defaulting Party has
failed to deliver within such period a plan for curing such breach or default
which is reasonably sufficient to effect a cure. Any termination shall become
effective at the end of such [*] unless the breaching Party has cured any such
breach or default prior to the expiration of the [*] or has delivered to the
other Party a plan for curing such breach is reasonably acceptable to the other
Party. Notwithstanding the above, in the case of a failure to pay any amount due
hereunder the period for cure of any such default following notice thereof shall
be [*] and, unless payment is made within such period, the termination shall
become effective at the end of such period.
19.3 Effect of Bankruptcy. If, during the Term of the Research Program,
--------------------
either Party files a voluntary petition in bankruptcy, is adjudicated a
bankrupt, makes a general assignment for the benefit of creditors, admits in
writing that it is insolvent or fails to discharge [*] after an involuntary
petition in bankruptcy filed against it, then the Term of the Research Program
and this Agreement may be immediately terminated by the other Party, with
notice.
19.4 Termination Relating to Competing Products. GenVec may, at its sole
------------------------------------------
discretion, terminate this Agreement with [*] at any time if Warner or its
Affiliates or Sublicensees commercialize or directly or indirectly commence [*]
19.5 Termination of Research Program. If Warner terminates the Research
-------------------------------
Program pursuant to Section 2.4.2 and [*] the Agreement shall terminate
concurrently with the termination of the Research Program.
19.6 Effect of Termination.
---------------------
19.6.1 Accrued Rights and Obligations. Termination of this Agreement
------------------------------
for any reason shall not release any Party hereto from any liability which, at
the time of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination, nor preclude either Party
from pursuing any rights and remedies it may have hereunder or at law or in
equity which accrued or are based upon any event occurring prior to such
termination.
19.6.2 Return of Confidential Information. Upon any termination of
----------------------------------
this Agreement, Warner and GenVec shall promptly return to the other Party all
Confidential Information received from the other Party (except one copy of which
may be retained by legal counsel solely for purposes of monitoring compliance
with the provisions of Article 17 and archival purposes).
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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19.6.3 Stock on Hand. In the event this Agreement is terminated for
-------------
any reason, Warner and its Affiliates and Sublicensees shall have the right in
the Territory to sell the stock of any Collaboration Products then on hand,
subject to Articles 6 and 7 and the other applicable terms of this Agreement.
19.6.4 Licenses.
--------
(a) In the event of a termination of the Research Program
by Warner pursuant to Section 2.4.2, the licenses granted Warner shall remain in
effect, subject to the terms and conditions herein, with respect to all
Collaboration Products for which an IND has been filed by Warner prior to the
effective date of such termination, and Warner will grant GenVec an exclusive
(even as to Warner), worldwide, fully-paid, perpetual license (with the right to
sublicense) under Warner's interest in any Collaboration Technology jointly
owned by Warner and GenVec necessary or useful to make, have made, use, import,
offer for sale, and sell Collaboration Products, subject to Article 15, for
indications other than those which Warner retains rights hereunder, and products
other than Collaboration Products.
(b) Subject to Section 19.6.4(e) below, in the event of any
termination of this Agreement pursuant to Section 19.2 or 19.4, the licenses
granted in Article 5 shall terminate concurrently.
(c) In the event of any termination by Warner pursuant to
Section 19.3, the licenses granted to GenVec in Sections 2.4.2(d), 5.2 and 5.5
shall terminate concurrently.
(d) In the event of any termination of this Agreement
pursuant to Section 19.5 or in the event of any termination of this Agreement by
GenVec pursuant to Section 19.3, the licenses granted to Warner shall terminate
concurrently.
(e) If more than one Collaboration Product is being
commercially developed or exploited by Warner or its Affiliates and Sublicensees
hereunder, and GenVec terminates this Agreement pursuant to Section 19.2 due to
a breach relating only to a single Collaboration Product, or pursuant to Section
19.4 due to a particular competing product, then GenVec shall be entitled to
terminate this Agreement only with respect to the applicable Collaboration
Product.
(f) Except as expressly provided in this Section 19.6.4, in
the event of any termination of this Agreement the licenses granted pursuant to
Sections 2.4.2(d), 2.5.4(a), 4.8.3(a) and 8.2.5(a) shall remain in effect.
(g) In the event that GenVec breaches this Agreement by
commercializing, directly or indirectly, a product within the scope of Section
15.2, then GenVec's right to use the Data Package under Section 12.4 shall
terminate only with respect to such product, on a product-by-product basis. It
is understood and agreed that nothing contained in this Section shall prevent
GenVec from continued use of the Data Package for or with respect to products
not subject to the foregoing sentence of this Section 19.6.4(g).
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19.7 Survival. Sections 2.2.1, 2.3.1, 2.3.3, 2.5.4(b) and (c), 4.8.3(b)
--------
and (c), 4.8.4, 5.7 -5.9, 6.7, 7.5, 8.2.5(b) and (c), 10.3, 12.1 - 12.4, 14.1,
14.3, 14.4.3, 14.6, 15.1, 19.6 and 19.7, and Article 7 (until all royalty and
reporting obligations relating to the period prior to the date of expiration or
termination have been satisfied) and Articles 17, 18, 20 and 21 shall survive
the expiration or termination of this Agreement for any reason.
20. DISPUTE RESOLUTION
20.1 Mediation. If a dispute arises out of or relates to this
---------
Agreement, or the breach thereof, and if said dispute cannot be settled through
negotiation, the Parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association, before resorting to arbitration, litigation, or some other dispute
resolution procedure.
20.2 Venue. The exclusive venue of any dispute arising out of or in
-----
connection with the performance of or any breach of this Agreement, shall be the
state courts or U.S. district court located in or for GenVec's principal place
of business, and the Parties hereby irrevocably consent to the personal
jurisdiction of such courts.
21. MISCELLANEOUS
21.1 Governing Law. This Agreement and any dispute arising from the
-------------
performance or any breach hereof shall be governed by and construed in
accordance with the laws of the State of Maryland, without reference to
conflicts of laws principles.
21.2 Waiver. No failure on the part of GenVec or Warner to exercise and
------
no delay in exercising any right under this Agreement, or provided by statute or
at law or in equity or otherwise, shall impair, prejudice or constitute a waiver
of any such right, nor shall any partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right.
[*]
21.4 Notices. All notices, requests and other communications hereunder
-------
shall be in writing and shall be personally delivered or sent by nationally
recognized overnight express delivery service, registered or certified mail,
return receipt requested, postage prepaid, in each case to the respective
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OMITTED PORTIONS.
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address specified below, or such other address as may be specified in writing to
the other Parties hereto:
WARNER: Xxxxxx-Xxxxxxx Company
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attn: Vice President & Chairman
Xxxxx-Xxxxx Pharmaceutical Research
with a copy to:
Xxxxxx-Xxxxxxx Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attn: Vice President, General Counsel
GENVEC: GenVec, Inc.
00000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
with a copy to: Vice President, Corporate Development
21.5 Performance Warranty. Each Party hereby warrants and guarantees the
--------------------
performance of any and all rights and obligations of this Agreement by its
Affiliate(s) and Sublicensees.
21.6 Force Majeure. Neither Party shall be liable to the other for
-------------
failure or delay in the performance of any of its obligations under this
Agreement for the time and to the extent such failure or delay is caused by
earthquake, riot, civil commotion, war, hostilities between nations,
governmental law, order or regulation, embargo, action by the government or any
agency thereof, act of God, storm, fire, accident, labor dispute or strike,
sabotage, explosion or other similar or different contingencies, in each case,
beyond the reasonable control of the respective Party. The Party affected by
Force Majeure shall provide the other Party with full particulars thereof as
soon as it becomes aware of the same (including its best estimate of the likely
extent and duration of the interference with its activities), and will use its
best endeavors to overcome the difficulties created thereby and to resume
performance of its obligations as soon as practicable. If the performance of any
obligation under this Agreement is delayed owing to a force majeure for any
continuous period of more than six (6) months, the Parties hereto shall consult
with respect to an equitable solution, including the possible termination of
this Agreement.
21.7 Independent Contractors. It is understood that both Parties hereto
-----------------------
are independent contractors and are engaged in the operation of their own
respective businesses, and neither Party hereto is to be considered the agent or
partner of the other Party for any purpose whatsoever. Neither Party has any
authority to enter into any contracts or assume any obligations for the other
Party or make any warranties or representations on behalf of the other Party.
GenVec acknowledges that neither it nor any of its employees are employees of
Warner or members of any of its benefit plans and that neither it nor any of its
employees are eligible to participate in any such benefit plans even if
-49-
it is later determined that its or any of its employees' status during the
period of this Agreement was that of an employee of Warner. In addition, GenVec
waives any claim that it may have under the terms of any such benefit plans or
under any law for participation in or benefits under any of Warner's benefit
plans.
21.8 Advice of Counsel. GenVec and Warner have each consulted counsel of
-----------------
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one Party or another
and will be construed accordingly.
21.9 Severability. In the event that any provisions of this Agreement are
------------
determined to be invalid or unenforceable by a court of competent jurisdiction,
the remainder of the Agreement shall remain in full force and effect without
said provision. The Parties shall in good faith negotiate a substitute clause
for any provision declared invalid or unenforceable, which shall most nearly
approximate the intent of the Parties in entering this Agreement; provided, if
the Parties are unable to agree on such a substitute clause and the deletion of
the provision held invalid or unenforceable would produce material adverse
financial consequences for one Party, such Party shall have the right to
terminate the Agreement with [*] notice.
21.10 Patent Marking. Each Party agrees to xxxx and have its Affiliates
--------------
and Sublicensees xxxx all Collaboration Products they sell or distribute
pursuant to this Agreement in accordance with the applicable statute or
regulations in the country or countries of manufacture and sale thereof.
21.11 Further Assurances. At any time or from time to time on and after
------------------
the date of this Agreement, either Party shall at the request of the other Party
(i) deliver to the requesting Party such records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
assignment, transfer or license, and (iii) take or cause to be taken all such
actions, as the requesting Party may reasonably deem necessary or desirable in
order for the requesting Party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.
21.12 Compliance with Laws. Each party shall furnish to the other Party
--------------------
any information requested or required by that Party during the term of this
Agreement or any extensions hereof to enable that Party to comply with the
requirements of any U.S. or foreign federal, state and/or government agency.
Each Party shall comply with all applicable U.S., foreign, state, regional and
local laws, rules and regulations relating to its activities to be performed
pursuant to this Agreement, including without limitation, the United States
Foreign Corrupt Practices Act, United States export regulations and such other
United States and foreign laws and regulations as may be applicable, and to
obtaining all necessary approvals, consents and permits required by the
applicable agencies of the government of the United States and foreign
jurisdictions.
21.13 No Implied Licenses or Warranties. No right or license under any
---------------------------------
patent application, issued patent, know-how or other proprietary information is
granted or shall be granted by implication. All such rights or licenses are or
shall be granted only as expressly provided in the terms of this Agreement.
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
-50-
21.14 Entire Agreement. This Agreement together with the attached
----------------
Exhibits, and the Stock Purchase Agreement entered by the Parties of even date
herewith, constitute the entire agreement, both written or oral, with respect to
the subject matter hereof, and supersede all prior or contemporaneous
understandings or agreements, whether written or oral, between Warner and GenVec
with respect to such subject matter.
21.15 Headings. The captions to the several Sections and Articles hereof
--------
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.
21.16 Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed an original and which together shall constitute
one instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the Effective Date.
XXXXXX-XXXXXXX COMPANY GENVEC, INC.
By: ____________________________ By: ____________________________
Name: __________________________ Name: __________________________
Title: _________________________ Title: _________________________
Exhibits:
A: Excluded Countries (1.48)
B: Co-Promotion Guidelines (9)
-51-
EXHIBIT A
COUNTRIES EXCLUDED FROM THE TERRITORY
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
EXHIBIT B
CO-PROMOTION PRINCIPLES
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
[*]
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
