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EXHIBIT 10.22
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
BETWEEN
COMBICHEM, INC.
AND
IMCLONE SYSTEMS INCORPORATED
OCTOBER 10, 1997
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COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
THIS COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the "Agreement")
is entered into and made effective as of October 10, 1997 (the "Effective
Date"), by and between COMBICHEM, INC., a Delaware corporation having its
principal offices at 0000 Xxxxxx Xxxxx Xx, Xxx Xxxxx, Xxxxxxxxxx ("CombiChem"),
and IMCLONE SYSTEMS INCORPORATED, a Delaware corporation having its principal
offices located at 000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx ("ImClone").
WHEREAS, CombiChem has developed and owns certain drug discovery
technology and intellectual property rights, including but not necessarily
limited to chemical library design software, multi-parallel synthesis and
purification methods, chemical libraries suitable for biological screening
assays and medicinal chemistry (collectively, "CombiChem Technology");
WHEREAS, ImClone desires to utilize CombiChem Technology for its drug
discovery activities under ImClone know-how concerning the identification and
characterization of novel small molecule inhibitors for development as
therapeutics for treatment of human disease in the area of oncology;
WHEREAS, the parties wish to collaborate in a Research Program
against Collaboration Target(s) ("Collaboration");
WHEREAS, for purposes of the Collaboration, the Parties intend to
focus on up to *** Collaboration Targets per *** related to ImClone's Areas of
Interest;
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS
1.1 "Abandoned Compound" shall have the meaning set forth in Section
3.1.
1.2 "Abandoned Target" shall have the meaning set forth in Section
3.1.
1.3 "Active Compound(s)" means a compound (or compounds) which
(a) (i) is selected by either Party under the Research Program
from Collaboration Compounds, or
(ii) is derived from a Collaboration Compound; and
(b) shows In Vitro Activity.
1.4 "Additional Target(s)" means a Target that is added to the
Collaboration in accordance with Section 4.2.
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Confidential Treatment and filed separately with the Commission.
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1.5 "Affiliate" of a Party means any corporation or other business
entity controlled by, controlling or under common control with, such Party. For
this purpose "control" shall mean direct or indirect beneficial ownership of
more than fifty percent (50%) of the voting securities or income interest in
such corporation or other business, or if not meeting the preceding
requirements, any company owned or controlled by or owning or controlling such
Party at the maximum control or ownership right permitted in the country where
such company exists.
1.6 "Areas of Interest" shall include *** ***.
1.7 "Collaboration" has the meaning set forth in the preamble.
1.8 "Collaboration Compound(s)" means a compound (or compounds) which
(a) is synthesized following the Effective Date for screening against a
Collaboration Target under the Research Program, (b) is a pre-existing CombiChem
Compound which CombiChem desires to designate as a Collaboration Compound, or
(iii) is a pre-existing ImClone Compound which ImClone desires to designate as a
Collaboration Compound.
1.9 "Collaboration Target(s)" means either an Initial Target or an
Additional Target.
1.10 "CombiChem Compound" means a chemical compound that is
proprietary to CombiChem, or whose use or manufacture is proprietary to
CombiChem.
1.11 "CombiChem Technology" has the meaning set forth in the
preamble.
1.12 "Confidential Information" includes, but is not limited to,
(a) all information and materials received by either Party from
the other Party pursuant to this Agreement;
(b) all information and materials developed in the course of
the Collaboration; and
(c) the material financial terms of this Agreement.
1.13 "Development Compound(s)" means a compound (or compounds) which
(a) (i) is a Lead Compound or (ii) is derived from a Lead
Compound; and
(b) are determined by ImClone to be appropriate for preclinical
studies for the purpose of IND filing by ImClone.
1.14 "Due Diligence" means the use of the resources of ImClone or its
licensees or CombiChem in a manner which is consistent with the exercise of
prudent scientific and
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business judgment as applied to other programs of ImClone or CombiChem, as the
case may be, targeting products aimed at markets or patient groups of similar
sizes and of similar scientific and commercial potential. With respect to any
Development Compound, "Due Diligence" shall also require ImClone or its
licensees to conduct all necessary preclinical studies and to file an IND for
such Development Compound within *** from the date upon which ImClone has
designated such Development Compound from any Lead Compound or its derivatives.
1.15 "Exclusivity Period" means the Research Period plus twelve (12)
months.
1.16 "Field" means all therapeutic indications of human disease for
the Collaboration Target.
1.17 "First Commercial Sale" of a Product shall mean the first sale
for use or consumption of such Product in a country after required marketing and
pricing approval has been granted by the governing health regulatory authority
of such country. Sale to an Affiliate or licensee shall not constitute a First
Commercial Sale unless the Affiliate or licensee is the end user of the Product.
1.18 "FTE" means full time equivalent with respect to employees of
CombiChem.
1.19 "ImClone Compound" means a chemical compound that is proprietary
to ImClone, or whose use or manufacture is proprietary to ImClone.
1.20 "Inactive Compound(s)" means a Collaboration Compound(s) which
does not have the In Vitro Activity required for an Active Compound.
1.21 "In Vitro Activity" shall mean the observation of *** *** .
1.22 "Initial Target" shall have the meaning set forth in Section 4.1
hereof.
1.23 "Lead Compound(s)" means a compound (or compounds) which
(a) is selected from an Active Compound(s) by the RMC under the
Research Program, or
(b) is derived from Active Compound(s) and is selected by the
RMC.
1.24 "Net Sales" means the gross sales invoiced by ImClone or its
Affiliates or licensees for Products to non-Affiliated Third Parties less actual
deductions of returns (including withdrawals and recalls), rebates (price
reductions, including Medicaid and similar types of rebates e.g. chargebacks),
volume (quantity) discounts, discounts granted at the time of invoicing, the
cost of transport, insurance, delivery, sales taxes and other taxes (other than
income taxes) directly linked to and included in the gross sales amount, as
computed on a product-by-product basis for the countries concerned, whereby the
amount of such sales in foreign currencies is
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converted into United States dollars at the exchange rate of the last business
day for each calendar month as reported by Citibank, N.A. (New York).
1.25 "Patent" means, (a) valid and enforceable Letters Patent,
including any extension (including Supplemental Protection Certificate),
registration, confirmation, reissue, continuation, divisionals,
continuation-in-part, reexamination or renewal thereof, or (b) pending
applications for any of the foregoing.
1.26 "Payments" shall have the meaning set forth in Section 9.3
1.27 "Party" means CombiChem or ImClone, as the case may be,
including their respective Affiliates, permitted successors and assigns.
1.28 "Product(s)" means any product containing a Development Compound
with such compound as the active ingredient and which is granted regulatory
approval by the governing health regulatory authority of the applicable country
for marketing in the Field.
1.29 "Project Team" shall have the meaning set forth in Section
2.1(c).
1.30 "Research Management Committee" or" RMC" has the meaning set
forth in Article 6 below.
1.31 "Research Period" means the initial twenty-four (24) month term
of the Collaboration, which can be extended in accordance with Section 7.1
below.
1.32 "Research Plan" means the mutually-agreed research plan for the
Collaboration attached hereto as Appendix A.
1.33 "Research Program" means the research to be conducted as part of
the Collaboration under the Research Plan, and shall include, without
limitation, the activities and items set forth in Sections 2.1 and 2.2 of this
Agreement.
1.34 "Returned Compound" shall have the meaning set forth in Section
9.2.
1.35 "Royalty Term" means, in the case of any Product, in any
country, the period of time commencing on the First Commercial Sale and ending
upon the later of (a) fifteen (15) years from the date of First Commercial Sale
in such country; or (b) the expiration of the last-to-expire Patent resulting
from the Research Program filed in the Field with claims covering that Product
in the relevant country.
1.36 "Target" means a biomolecular entity that a small molecule is
screened against in order to determine whether the small molecule demonstrates
relevant activity.
1.37 "Territory" means the entire world.
1.38 "Third Party" means an entity other than CombiChem or ImClone or
their respective Affiliates.
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1.39 "Universal Informer Library" shall mean CombiChem's proprietary
Universal Informer Library of compounds.
2. RESEARCH COLLABORATION
2.1 CombiChem Responsibilities. CombiChem shall with Due Diligence
conduct the following activities under the Research Program in accordance with
the terms of this Agreement and as more fully described in the Research Plan:
(a) During the Research Period, CombiChem shall (i) review data
and information regarding the Collaboration Targets
provided by ImClone; (ii) based on such data and
information and using the CombiChem Technology, design
informative compound libraries; and (iii) supply all lead
chemistries and synthesize compounds as provided in Section
5.3 below.
(b) During the Research Period, CombiChem shall keep ImClone
informed of its activities performed in connection with the
Collaboration, including, without limitation, providing
ImClone with data and information regarding Collaboration
Compounds prior to the meetings of the Research Management
Committee.
(c) Subject to Article 4 and at all times during the Research
Period, CombiChem shall dedicate a project team of five (5)
FTEs comprised of synthetic and analytical chemists,
compound control scientists, and a computational scientist
(the "Project Team") to conduct all of its activities in
connection with the Collaboration; provided, however, that
the RMC may at any time during the Research Period
substitute employees for the FTEs described above;
provided, further, that ImClone may request that CombiChem
expand its Project Team by adding additional FTEs to work
on the Collaboration at the rate and in the manner
specified in Section 8.2(b).
2.2 ImClone Responsibilities. ImClone shall with Due Diligence
provide CombiChem with the following resources under the Research Program as
more fully described in the Research Plan:
(a) ImClone shall provide CombiChem with support and assistance
useful or necessary for the conduct of the Research
Program, including providing data and information
(including leads and/or screening hits to the extent
available) relating to Collaboration Targets, certain
chemistries useful in compound synthesis, information
concerning assay methods and screening data.
(b) During the Research Period, ImClone shall provide CombiChem
with data and information regarding Collaboration Compounds
and
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the Collaboration Target assays developed by ImClone under
the Research Program prior to the meetings of the Research
Management Committee.
(c) During the Exclusivity Period and with Due Diligence,
ImClone shall screen Collaboration Compounds for In Vitro
and, where appropriate, in vivo activity against the
Collaboration Target.
(d) During the Exclusivity Period and with Due Diligence,
ImClone shall (i) screen Lead Compounds, (ii) endeavor to
determine Development Compounds, and (iii) develop
Products.
2.3 Research Plan. The Parties hereby agree that the Research Program
shall be carried out in accordance with the Research Plan which is attached
hereto as Appendix A. At the direction of the RMC, the Research Program shall
involve the use of CombiChem's Universal Informer Library in order to initiate
CombiChem's discovery process with the objective of identifying Lead Compounds
with respect to a specific Collaboration Target. The Research Management
Committee shall review the Research Plan on an ongoing basis and may make
changes to the Research Plan so long as such changes are mutually agreed to by
CombiChem and ImClone.
2.4 Annual Reports. Following the first IND filing through First
Commercial Sale, ImClone shall provide CombiChem with an annual report
summarizing ImClone's activities in developing Development Compounds.
2.5 Third Party Licenses. Each Party shall be solely responsible for
any Third Party license fees required to perform its obligations under this
Agreement subject to Section 8.4. Any agreements between a Party and a Third
Party shall in all material respects permit performance under this Agreement.
3. EXCLUSIVITY
3.1 Collaboration Target Exclusivity. So long as ImClone or its
licensee is proceeding with Due Diligence, CombiChem shall not work on a
Collaboration Target with any Third Parties. In the event that ImClone or its
licensee fails to exercise Due Diligence with respect to, or notifies CombiChem
that it has abandoned work on, any Collaboration Target (an "Abandoned Target")
and any Collaboration Compound, other than an ImClone Compound which is subject
to the rights of a Third Party licesor, associated with such Collaboration
Target (together with all derivatives of such Collaboration Compound, an
"Abandoned Compound"), then, (a) such Abandoned Target shall not be subject to
any provision hereunder, and (b) such Abandoned Compound shall be available to
CombiChem for any purpose thereafter.
3.2 Active Compounds.
(a) Following the designation of any Collaboration Compound as
an Active Compound, such Active Compound shall be exclusively available to
ImClone during the
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Research Period. Following the expiration of the Research Period, Active
Compounds with respect to which ImClone fails to proceed with Due Diligence
shall be deemed to be Inactive Compounds for all purposes hereunder; provided,
that any Active Compound which is the subject of claim(s) under a pending Patent
shall continue to be treated as an Active Compound during the Exclusivity Period
so long as ImClone exercises Due Diligence with respect to any Collaboration
Compound.
(b) Prior to the existence of Patent(s) in accordance with
Section 5.2, ImClone shall have exclusive rights in all intellectual property
relating to Active Compounds, their use, and method of manufacture so long as
ImClone continues to show Due Diligence under this Agreement; provided, however,
that ImClone acknowledges and agrees that CombiChem reserves the right to assign
or grant exclusive rights, including rights to Active Compounds, to a third
party collaborator who first identifies a novel compound, a novel use of a
compound, or a novel method of manufacturing a compound, to the extent CombiChem
is obligated to do so under its existing contractual obligations. Upon notice by
ImClone that it intends to file a Patent application with respect to any Active
Compound, Lead Compound, Development Compound or Product, CombiChem shall
promptly inform ImClone whether CombiChem has the power to grant the exclusive
rights in accordance with this Section 3.2 and the assignments in accordance
with Section 5.2; provided, however, that under no circumstances CombiChem will
grant assurances to ImClone to the effect that any Active Compound, Lead
Compound, Development Compound or Product is not covered under the patent claims
of Third Parties wherein such claims are not the direct result of a
collaboration between the Third Party and CombiChem.
3.3 Inactive Compounds/Returned Compounds. Subject to Section 9.4,
Inactive Compounds and Returned Compounds shall be available to both Parties for
any purpose.
4. TARGETS
4.1 Initial Targets. During the Research Period, ImClone may
designate up to *** Collaboration Targets per *** under the Research Program.
During the initial *** *** of the Research Program, subject to the Research Plan
it is anticipated that the Collaboration shall initially focus on up to ***
Targets as follows: **** *** (collectively, the "Initial Targets"). With respect
to Colloboration Targets, the RMC will determine whether to continue to pursue
work against designated Collaboration Targets and will prioritize the activities
of teh Project Team against such Collaboration Targets. In the event that the
results of the initial screeening activities of ImClone with respect to the
Initial Targets specified in Section 4.1 *** *** which shall determine whether
such Targets are suitable for designation as Additional Targets. Subject to the
dispute resolution mechanism provided for in Article 6, ImClone shall have the
right to make a final determination as to whether to continue or pursue work
against any Collaboration Target if the respective Chief Executive Officers of
CombiChem and ImClone are unable to resolve any dispute concerning the same. In
addition, ImClone's right to designate or substitute a Target (including those
Additional Targets set forth in Section 4.2) relating to ImClone's Areas of
Interest shall be subject to the written notice and approval requirements
specified in Section 4.2(b).
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4.2 Additional Targets.
(a) Within ninety (90) days prior to the commencement of the
second 12-month period of the Research Program, ImClone may add up to ***
relating to ImClone's Areas of Interest to the Collaboration by notifying
CombiChem in writing that it wishes to designate such Target(s) as Additional
Target(s); it being understood that the Project Team shall be obligated to
simultaneously work on no more than *** Collaboration Targets as directed by the
RMC.
(b) If CombiChem has already committed to wkring on a proposed
Additional Target or has delivered a term sheet to any Third Party and remains
in discussions to enter into a binding agreement with such Third Party with
respect to the proposed Target at the time of notification, CombiChem shall
inform ImClone that such proposed Additional Target is not available. Otherwise,
the RMC shall establish the specific scientific achievements (to be mutually
agreed between CombiChem and ImClone) for such Target and the same shall be
designated as an Additional Target for the Collaboration and subject to the
terms (including the commercial terms) of this Agreement.
4.3 Expansion of Project Team. Notwithstanding the provisions of
Sections 4.1 and 4.2, ImClone may request that CombiChem expand its Project Team
during the Research Period in order to accelerate work on Collaboration Targets
and/or to add additional Target(s). In such event, the RMC shall promptly confer
as to the appropriate number of FTEs to be added to Project Team to work on the
Collaboration at a cost to ImClone as specified in Section 2.1(c).
5. COLLABORATION COMPOUNDS
5.1 Pre-Existing Compounds. ImClone shall have no rights to any
pre-existing CombiChem Compound unless and until such compound is designated as
a Collaboration Compound by CombiChem. Additionally, CombiChem may decline to
synthesize a particular compound or library of compounds by reason of existing
Patents or contractual obligations. CombiChem shall have no rights to any
pre-existing ImClone Compound which is not utilized in the Research Program.
5.2 Intellectual Property Rights; Assignment to ImClone. Subject to
Section 3.2(b) above, ImClone shall have the right and responsibility at
ImClone's expense to file, maintain and prosecute Patents relating to Active
Compounds, Lead Compounds, Development Compounds and Products, their use, and
their methods of manufacture. At ImClone's request, CombiChem shall assign all
its right, title and interest in such Patents to ImClone. If ImClone fails to so
file, maintain or prosecute such Patent, CombiChem shall have the right to
request ImClone to do so. If ImClone elects not to file, maintain or prosecute
such Patent, CombiChem shall have the right to take over such filing,
maintenance or prosecution of such Patent, at its sole expense, and ImClone
shall assign all intellectual property rights it may have in the Active
Compound, Lead Compound, Development Compound or Product to CombiChem.
5.3 Supply of Collaboration Compounds. Aliquots of *** of any
Collaboration Compound that has been synthesized will be prepared and given to
ImClone.
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CombiChem shall replenish that amount upon ImClone's reasonable request.
CombiChem shall maintain aliquots of any Collaboration Compound that has been
synthesized by CombiChem. CombiChem shall also provide ImClone with additional
requirements of samples at CombiChem's cost.
6. RESEARCH MANAGEMENT COMMITTEE
The design, review and conduct of the Research Program will be
coordinated by the Research Management Committee, which will meet regularly on a
mutually-agreeable schedule. The Research Management Committee may establish and
amend or revise the Research Plan as necessary to reflect the scientific
progress and work performed under the Research Program, such amendments to be
mutually agreed to by ImClone and CombiChem. The Research Management Committee
will consist of an equal number of members from ImClone and CombiChem and will
include appropriate representatives from ImClone and CombiChem as mutually
agreed. The co-chairs of the Research Management Committee will initially be the
Vice President, Chemistry of CombiChem and the Vice President for Research of
ImClone and subsequently may change as mutually-agreed upon by the Parties.
Decisions of the Research Management Committee shall be by consensus. If a
decision is not reached by the RMC with respect to management of the Research
Program, the dispute will be referred to the co-chairs of the RMC. If the
co-chairs of the RMC are unable to resolve the dispute, the dispute will be
referred to the respective Chief Executive Officers of CombiChem and ImClone.
7. RESEARCH PERIOD; TERMINATION OF RESEARCH PROGRAM
7.1 Research Period: Option to Extend the Research Period. The
initial term of the Collaboration shall be the Research Period, subject to
extension upon mutual agreement. To extend the Research Period, ImClone must
notify CombiChem no later than ninety (90) days prior to the then-current
expiration date and the Parties shall negotiate in good faith the terms and
conditions of any such extension.
7.2 Termination of Research Program.
(a) The Research Program may be terminated by a Party for the
material breach by the other Party of obligations under the Research Program by
giving the breaching party notice of the breach and of the intent of the
non-breaching Party to terminate the Research Program unless the breach is cured
within ninety (90) days of notification. The non-breaching Party may terminate
the Research Program following such ninety (90) day period by providing the
breaching party with ninety (90) days' prior written notice that the Research
Program is terminated, and the Research Program shall be terminated on the 90th
day following such date.
(b) Within thirty (30) days prior to the one (1) year
anniversary of this Agreement, ImClone and CombiChem senior and scientific
management personnel shall meet to review the status of the Collaboration. If,
based upon such review, the status of the Collaboration is satisfactory to
ImClone, ImClone shall make the Second Research Payment described in Section 8.2
to CombiChem on or before the one (1) year anniversary of this Agreement;
provided, however, that ImClone may, in its discretion, make such Second
Research Payment at any time
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prior to the date which is the one (1) year anniversary of this Agreement.
If however, based upon such review, the status of the Collaboration is
unsatisfactory to ImClone, ImClone may terminate the Research Program by
providing 90-days' prior written notice to CombiChem that the Research Program
shall be terminated. Upon receipt of such notice by CombiChem, ImClone shall
have no further obligation to make the Second Research Payment to CombiChem (if
such payment has not already been made to CombiChem), and the Research Program
shall be terminated on the 90th day following such date.
(c) CombiChem shall, within thirty (30) days following the
effective date of termination under Section 7.2(a) or 7.2(b), pay to ImClone
such amount as is calculated by taking *** *** *** shall be based upon ***. Any
amount due by CombiChem under this Section 7.2(c) may be in the form, at
CombiChem's discretion, of *** *** ***.
8. CONSIDERATION
8.1 Equity Purchase. Upon execution of this Agreement, ImClone shall
purchase 1,000,000 shares (on a pre-split basis and subject to adjustment) of
Common Stock of CombiChem at a per share purchase price equal to $2.00 per share
for an aggregate purchase price of U.S. $2 million, pursuant to the terms of
that certain Common Stock Purchase Agreement, dated as of the Effective Date, by
and between CombiChem and ImClone (together with all ancillary agreements
thereto, the "Stock Purchase Agreement"). In the event that CombiChem closes an
initial public offering of its common stock at a sales price per share to the
public (the "IPO Price") which is less than $2.50 per share (on a pre-split
basis), then, upon the closing of such initial public offering, CombiChem shall
issue to ImClone, without further consideration other than the purchase price
paid by ImClone pursuant to the Stock Purchase Agreement, such additional
number of shares of CombiChem common stock equal to:
2,000,000
-------------- = 1,000,000
Adjusted Price
wherein the "Adjusted Price" = the IPO Price X .80 if the IPO Price is less than
$2.50 per share. All shares of CombiChem common stock issued pursuant to this
Section 8.1 shall be deemed to be "Shares" within the meaning of the Stock
Purchase Agreement.
8.2 Program Funding.
(a) ImClone shall support CombiChem's efforts in conducting the
Research Program by making a payment upon the execution of this Agreement in the
sum of U.S. *** . In addition, subject to Section 7.2(b), ImClone shall make a
payment (the "Second Research Payment") to CombiChem prior to October 10, 1998
in the amount of ***
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in the form either, at ImClone's discretion, of (i) cash, or (ii) ImClone common
stock by delivering to CombiChem that number of shares of ImClone common stock
equal to the quotient obtained by dividing (i) *** by (ii) the average of the
last reported sales price of the ImClone common stock as quoted on the National
Market System of the National Association of Securities Dealer's Automated
Quotation System during the thirty (30) consecutive trading days ending on the
day prior to delivery of such shares (the "ImClone Price Per Share").
(b) In the event that the Project Team is expanded in accordance
with Section 4.3, ImClone shall make payments, in cash, to CombiChem, at a per
annum rate of U.S. *** payable quarterly in advance of the work to be performed
by such additional FTE(s).
(c) Any shares of the ImClone common stock issued to CombiChem
under this Section 8.2 shall be restricted securities under the Securities Act
of 1933, as amended and shall be issued pursuant to a stock issuance agreement
between ImClone and CombiChem which shall contain provisions for representations
and warranties equivalent to, and registration rights and indemnification (and
such other relevant provisions) with respect to the shares of ImClone common
stock issued thereunder no less favorable than, those contained in the Stock
Purchase Agreement.
8.3 Milestone Payments. Within thirty (30) days of the occurrence of
a development milestone triggered by the activities of ImClone as shown on
Appendix B, ImClone shall pay CombiChem the related milestone payment in U.S.
dollars as set forth on Appendix B. Alternatively, in the event that ImClone
shall outlicense the Patents covering any Product, CombiChem shall be entitled
to the payments set forth in Section 9.3 in lieu of any payments pursuant to
this Section 8.3.
8.4 Royalties.
(a) Direct Sales by ImClone
(i) Subject to Section 8.4(c), during the Royalty Term,
ImClone will pay CombiChem a running royalty of *** of Net Sales of Products
sold by ImClone or its Affiliates in all countries in the Territory. Each
payment of royalties shall be accompanied by a report of Net Sales of Products
in sufficient detail to permit confirmation of the accuracy of the royalty
payment made.
(ii) The royalties owed under Section 8.4(a)(i) shall not
be reduced in accordance with Sections 8.4(c)(i) through 8.4(c)(iii) in an
amount which results in a royalty payable to CombiChem of less than *** of Net
Sales for Products sold directly by ImClone or its Affiliate.
(b) Sales by ImClone's Licensees
In the event that ImClone outlicenses Active Compounds,
Lead Compounds, Development Compounds and resulting Products are sold by
ImClone's licensees
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in any country in the Territory, ImClone's royalty payable to CombiChem shall be
as follows:
ImClone Royalty
from Outlicensing CombiChem Royalty due to Outlicensing
----------------- -------------------------------------
Greater than *** (1) *** of ImClone royalty, but no greater
than ***
(2) Subject to reduction as outlined in
Sections 8(c)(i) through 8(c)(iii), but
such reductions shall not reduce CombiChems
royalty below *** except as otherwise
provided in Section 8.4(c)(iii).
Less than or equal to *** (1) *** of ImClone royalty and not subject to
reduction as outlined in Sections 8(c)(i)
and and 8(c)(ii).
(c) Royalty Reductions
(i) In any country in which Patents do not include a valid
issued patent covering a Product sold by ImClone or its licensee, and/or where a
generic equivalent has been approved for sale and is being sold in such country,
the royalty provided for in Section 8.4(a)(i) and in Section 8.4(b), as
indicated therein, shall be reduced by *** .
(ii) In any country in which ImClone pays a Third Party
royalty for patents and related technology in order to sell a Product, *** of
such Third Party royalty shall be *** the royalty payment owed by ImClone to
CombiChem in accordance with Section 8.4(a)(i) and Section 8.4(b), as indicated
therein. During the Research Period, the RMC will make the determination whether
to include any Third Party royalty-bearing patents and related technology in the
Collaboration. After the Research Period, ImClone shall, in its discretion, make
the determination whether to enter into any agreements with respect to Third
Party royalty-bearing patents and related technology for purposes of this
Agreement.
(iii) In any country in which CombiChem receives any
Additional Payments in respect of payments received by ImClone which are treated
as an advance against royalties due ImClone from its licensee, such Additional
Payments shall be *** the royalties provided for in Section 8.4(b) that are
derived from such licensee.
8.5 Manner and Place of Payment. Royalty payments and reports for Net
Sales of Products shall be calculated in local currencies and reported for each
calendar quarter. All royalty payments owed under this Agreement shall be made
by wire transfer to the bank account to be designated by CombiChem within thirty
(30) days following the end of each such calendar quarter.
8.6 Records and Audit. During the term of this Agreement and for a
period of five (5) years thereafter, ImClone shall keep complete and accurate
records pertaining to the sale or other disposition of Products in sufficient
detail to permit CombiChem to confirm the accuracy of all payments due
hereunder. CombiChem shall have the right to cause an independent certified
public accounting firm reasonably acceptable to ImClone to audit such
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records to confirm ImClone's Net Sales for the preceding year. Any information
obtained during such audit shall be treated as Confidential Information. Such
audits may be exercised during normal business hours of ImClone no more than
once each year. CombiChem shall bear the full cost of such audit unless such
audit discloses a variance of more than five percent (5%) in ImClone's favor
from the amount of the Net Sales reported by ImClone for such audited period. In
such case, ImClone shall bear the fill cost of such audit.
8.7 Taxes. All income and other taxes levied on account of the
royalties and other payments accruing to CombiChem under this Agreement shall be
paid by CombiChem, including taxes levied thereon as income to CombiChem. If
provision is made in law or regulation for withholding, such tax shall be
deducted from the royalty or other payment made by ImClone to the proper taxing
authority and a receipt of payment of the tax secured and promptly delivered to
CombiChem. Each Party agrees to assist the other Party in claiming exemption
from such deductions or withholdings under any double taxation or similar
agreement or treaty from time to tune in force.
9. LICENSE GRANTS; OUTLICENSE
9.1 CombiChem License Grant to ImClone. Subject to the terms and
conditions of this Agreement, CombiChem hereby grants to ImClone an exclusive
worldwide license, with the right to sublicense, to use such CombiChem
Technology as is necessary to make, have made, use, have used, sell, have sold
and import Collaboration Compounds or Products in the Territory. Such license
shall remain exclusive in relation to each Collaboration Compound and/or Product
so long as ImClone or its licensee continues to develop and commercialize such
Collaboration Compound and/or Product containing such Collaboration Compound
against a Collaboration Target with Due Diligence.
9.2 ImClone License Grant to CombiChem. Subject to the terms and
conditions of this Agreement and following the failure of ImClone or its
licensee to develop and commercialize with Due Diligence a Lead Compound, a
Development Compound or Product, as the case may be, (collectively, and together
with all Abandoned Compounds, "Returned Compound"), ImClone shall grant to
CombiChem an exclusive license (exclusive even as to ImClone and its
Affiliates), with the right to sublicense, under those ImClone Patents and
know-how which are resulting from the Research Program and related exclusively
to the Returned Compound to make, have made, use, have used, sell, have sold and
import such Returned Compound in the Territory.
9.3 ImClone Outlicense. ImClone shall have a right to outlicense the
Patents covering the Product to a Third Party subject to CombiChem's right to
receive (a) royalties as provided in Section 8.4(b), and (b) additional payments
("Additional Payments") such that CombiChem has received, as of each Payment
Date, the greater of (i) the cumulative amount due CombiChem by ImClone upon the
attainment of the milestones set forth in Appendix B by ImClone' s licensee, or
(ii) the cumulative amount equal to *** of the *** *** ***
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*** *** but excluding, to the extent reasonable and customary, all *** ***
(collectively, the royalties described in clause (a) and the payments described
in clause (b) of this sentence, the "Payments") received by ImClone from such
Third Party in connection with such license. The royalty Payments described in
clause (a) of the preceding sentence shall be remitted to CombiChem within
thirty (30) days after receipt by ImClone of such Payments from its licensee.
The Additional Payments described in clause (b) of the preceding sentence shall
be paid to CombiChem within thirty (30) days following each date (a "Payment
Date") upon which any milestone designated in Appendix B is achieved and/or
ImClone receives a payment (as described above) from its licensee. As an express
condition of any such outlicense, any such licensee shall be required to agree
in writing to be bound by royalty reporting and recordkeeping and inspection
provisions consistent with those contained in this Agreement. In addition,
CombiChem shall have the right to receive all audit reports relating to sales of
Products of ImClone's licensees, and to cause ImClone or its successor to have
an independent certified public accounting firm audit such licensees records on
the same terms as those specified in Section 8.6. All payments shall be made by
wire transfer to such bank account designated by CombiChem. Failure of such
licensee to make any milestone or royalty payment in respect of such Product
shall not relieve ImClone of its obligations to make royalty and milestone
payments to CombiChem hereunder.
9.4 Rights to Inactive Compounds/Returned Compounds. No provision of
this Agreement shall prevent either Party from making, having made, using,
having used, selling, having sold, or importing Inactive Compounds, products
containing Inactive Compounds, Returned Compounds or products containing
Returned Compounds or screening Inactive Compounds and Returned Compounds
against any target other than the Collaboration Targets. In the event that
either ImClone or CombiChem (the "Contracting Party") shall enter into a binding
agreement with a Third Party to develop, market and/or sell any product
containing any Inactive Compound or Returned Compound as an active ingredient (a
"Third Party Transaction"), then the other Party hereto (the "Other Party")
shall be entitled to *** of *** by the Contracting Party from such Third Party
in respect of such Third Party Transactions. All such payments shall be sent by
wire transfer to such bank account designated by the Other Party within thirty
(30) days after the Contracting Party's receipt of such payments and shall be
subject to the recording and auditing provisions of Section 8.6.
9.5 Miscellaneous License. In addition to any other rights granted by
either Party in accordance with this Article 9, each Party grants to the other
party a non-exclusive license without the right to grant sublicenses, under any
intellectual property rights the granting Party has the power to grant in order
for the other Party to carry out its rights and obligations under this Agreement
including, but not necessarily limited to, conducting the Research Program and
manufacturing, developing, selling and importing Products.
10. TERM AND TERMINATION
10.1 Term. The term of this Agreement shall commence upon the
Effective Date of this Agreement, and shall expire on the expiration of the last
royalty obligation under this
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Agreement, except as provided hereunder.
10.2 Termination by ImClone or CombiChem. Subject to Section 7.2, if
either Party materially breaches this Agreement and fails to remedy that breach
within ninety (90) days of receiving written notice thereof from the other
Party, or enters into any arrangement of composition with its creditors or goes
into liquidation, insolvency, bankruptcy, receivership or reorganization
proceedings, whether voluntarily or compulsorily which is not dismissed within
ninety (90) days, then the other Party may at any time, by notice in writing or
by telefax, terminate this Agreement.
10.3 After Termination.
(a) Upon any termination of the Research Program under Section
7.2(a) due to a material breach of this Agreement by ImClone, ImClone's rights
pursuant to Sections 3.1, 3.2, 5.3, 9.1, 9.3 and 9.5 shall immediately cease,
and all rights granted hereunder with respect to Targets and Collaboration
Compounds, Active Compounds, Lead Compounds, Development Compounds, or Products
shall immediately revert to CombiChem without further obligation to ImClone.
ImClone's rights pursuant to Section 5.2 and 9.3 above that accrue prior to such
termination shall be retained by ImClone. ImClone may make, use, sell and import
Active Compounds, Lead Compounds, Development Compounds or Products under rights
retained by ImClone pursuant to this Section 10.3(a) so long as ImClone
continues to satisfy all of its royalty, milestone, and Payment obligations in
accordance with Sections 8.3, 8.4, 9.3 and 9.4.
(b) Upon any termination of the Research Program under Section
7.2(a) due to a material breach of this Agreement by CombiChem with respect to a
Collaboration Compound, Active Compound, Lead Compound, Development Compound or
Product, all of ImClone's rights pursuant to Sections 3.1, 3.2, 5.2, 5.3, 9.1,
9.3 and 9.5 shall be retained by ImClone. ImClone may make, use, sell or import
Active Compounds, Lead Compounds, Development Compounds and Products with
respect to which ImClone is not in material breach under rights retained by
ImClone pursuant to this Section 10.3(b) so long as ImClone continues to satisfy
all of its royalty, milestone, and Payment obligations in accordance with
Sections 8.3, 8.4, 9.3 and 9.4, except that ImClone shall not be required to
satisfy such obligations with respect to any Collaboration Compound, Active
Compound, Lead Compound, Development Compound or Product with respect to which
CombiChem is in material breach.
(c) If ImClone materially breaches this Agreement following the
Research Period with respect to an Active Compound, Lead Compound, Development
Compound or Product for any reason including, but not limited to, failing to
satisfy its royalty, milestone and Payment obligations pursuant to Sections 8.3,
8.4, 9.3 and 9.4, ImClone shall not make, use, sell or import Active Compounds,
Lead Compounds, Development Compounds or Products with respect to which ImClone
is in material breach. ImClone shall retain the right to make, use, sell and
import Active Compounds, Lead Compounds, Development Compounds or Products with
respect to which ImClone is not in material breach so long as ImClone continues
to satisfy all of its royalty, milestone, and Payment obligations in accordance
with Sections 8.3, 8.4, 9.3 and 9.4.
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(d) If CombiChem materially breaches this Agreement following
the Research Period for any reason including, but not limited to, failing to
satisfy its confidentiality and warranty obligations under Articles 11 and 19,
ImClone shall have the right to make, use, sell or import Active Compounds, Lead
Compounds, Development Compounds and Products with respect to which ImClone is
not in material breach so long as ImClone continues to satisfy all of its
royalty, milestone, and Payment obligations in accordance with Sections 8.3,
8.4, 9.3 and 9.4.
(e) Upon any expiration or earlier termination of this Agreement
for any reason, ImClone shall not be entitled to any refund of any payments made
to CombiChem hereunder except as provided in Section 7.2(c).
10.4 Effect of Termination on Licensees. In the event of any
termination of this Agreement pursuant to this Article 10 where such termination
shall not have been caused by the action or inaction on the part of any
respective licensee of ImClone or CombiChem, or by any breach by such licensee
of its obligations under its licensee from ImClone or CombiChem, as appropriate,
such termination of this Agreement shall be without prejudice to the rights of
each non-breaching licensee and such licensee shall be deemed to be a direct
licensee hereunder.
11. CONFIDENTIAL INFORMATION
11.1 Nondisclosure. During the term of the Collaboration and for a
period of five (5) years after termination thereof, each Party will maintain all
Confidential Information in trust and confidence and will not disclose any
Confidential Information to any third party for any purpose except (i) as
expressly authorized by this Agreement, or (ii) as required by law or court
order, or (iii) to its consultants, subcontractors or agents who need to know to
accomplish the purposes of this Agreement. Each Party may use such Confidential
Information only to the extent required to accomplish the purposes of 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 its
Affiliates, employees, agents, consultants and other representatives do not
disclose or make any unauthorized use of the Confidential Information. Each
Party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information. Confidential Information is
understood to include, but not necessarily to be limited to, the structures of
chemical compounds and the identification of chemical compounds as Collaboration
Compounds, Active Compounds, Inactive Compounds, Lead Compounds, Development
Compounds, or Products.
11.2 Exceptions. Confidential Information shall not include any
information which the receiving Party can prove by competent evidence: (a) is
now, or hereafter becomes, through no act or failure to act on the part of the
receiving Party, generally known or available; (b) is known by the receiving
Party at the time of receiving such information, as evidenced by its records;
(c) is hereafter disclosed to the receiving Party by a Third Party, as a matter
of right and without restriction on disclosure; (d) is independently developed
by the receiving Party without the aid, application or use of Confidential
Information; (e) is the subject of a written permission to disclose provided by
the disclosing Party; or (f) is necessary to obtain regulatory approval for a
Product, or patent protection with respect to Active Compounds, Lead Compounds,
Development Compounds, or Products, and the uses and methods of manufacturing
thereof.
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12. PUBLICATIONS AND PUBLIC STATEMENTS
12.1 Publications. Each Party shall be permitted to publish any
information, except Confidential Information, relating to the Research Program
as long as the Party has the prior written permission of the other Party. Such
permission shall be approved or disapproved within twenty-one (21) days of
written request for permission. Such permission shall not be unreasonably
withheld.
12.2 Public Statements. Neither Party shall use the name of the other
Party in any public statement, prospectus, annual report or press release or
other public communication (collectively "Public Statements") without the prior
written approval of the other Party, which may not be unreasonably withheld or
delayed; provided, however, that both Parties shall endeavor in good faith to
give the other Party a minimum of two (2) business days to review such Public
Statements; provided, further, that, upon approval of any such Public Statement,
both Parties may disclose to third parties the information contained in such
Public Statement without the further approval of the other; and provided,
further, that if a Party does not approve such Public Statement, either Party
may still use the name of the other Party in any Public Statement without the
prior written approval of the other Party, if such Party is advised by counsel
that such disclosure is required to comply with applicable law.
13. INDEMNIFICATION
13.1 EACH PARTY HEREBY AGREES TO SAVE, DEFEND AND HOLD THE OTHER
PARTY AND ITS OFFICERS, DIRECTORS, EMPLOYEES, CONSULTANTS AND AGENTS HARMLESS
FROM AND AGAINST ANY AND ALL SUITS, CLAIMS, ACTIONS, DEMANDS, LIABILITIES,
EXPENSES AND LOSSES, INCLUDING REASONABLE LEGAL EXPENSES AND ATTORNEYS' FEES
("LOSSES") RESULTING DIRECTLY OR INDIRECTLY FROM ANY ACTIVITY PERFORMED BY THE
INDEMNIFYING PARTY PURSUANT TO THIS AGREEMENT, INCLUDING BUT NOT NECESSARILY
LIMITED TO THE MANUFACTURE, DEVELOPMENT, USE, HANDLING, STORAGE, SALE OR OTHER
DISPOSITION OF CHEMICAL AGENTS, COLLABORATION COMPOUNDS, ACTIVE COMPOUNDS, LEAD
COMPOUNDS, DEVELOPMENT COMPOUNDS OR PRODUCTS BY SUCH PARTY, ITS AFFILIATES OR
LICENSEES except to the extent such Losses result from the gross negligence or
willful misconduct of the Party claiming a right of indemnification under this
Article 13.
13.2 Indemnification.
(a) Subject to Section 13.2(c) below, ImClone shall hold
CombiChem and its officers, directors, employees, consultants, and agents
harmless from and against any and all losses resulting from the infringement of
any Patent of a Third Party due to the performance by ImClone of any activity
contemplated hereunder, including, but not necessarily limited to, ImClone's
responsibilities under Section 2.2 above, developing Products, and selling
Products.
(b) Subject to Section 13.2(c) below, CombiChem shall hold
ImClone and its officers, directors, employees, consultants, and agents harmless
from and against any and all losses resulting from the infringement of any
Patent of a Third Party due to the performance
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by CombiChem of any activity contemplated hereunder, including, but not
necessarily limited to, CombiChem's responsibilities under Section 2.1 above.
(c) The indemnity provided in Sections 13.2(a) and 13.2(b) above
shall not apply where the loss is due to the breach by the indemnified Party of
a warranty made in Article 19.
13.3 Procedures. If either Party seeks indemnification under this
Article 13, it shall inform the other Party of a claim as soon as reasonable
practicable after it receives notice of the claim, shall permit the other Party
to assume direction and control of the defense of the claim (including the right
to settle me claim solely of the other Party), and shall give reasonable
cooperation (at the expense of the other Party) in the defense of the claim.
14. ASSIGNABILITY
This Agreement may not be assigned by either Party without the prior
written consent of the other Party; provided, however, that either Party may
assign this Agreement, in whole or in part, to an Affiliate or to a successor of
a Party in connection with the merger, consolidation or sale of all or
substantially all of such Party's assets or that portion of its business
pertaining to the subject matter of this Agreement.
15. DISPUTE RESOLUTION PROCEDURES
15.1 Senior Executives Discussions. If a decision is not reached by
the RMC, the dispute will be resolved as set forth in Article 6 above. If a
dispute arises between CombiChem and ImClone with respect to matters other than
the management of the Research Program, either during or after the Research
Period, such dispute will be referred to the appropriate senior management in
the area of the dispute. If such senior management are unable to resolve such
dispute, such dispute will be referred to the Chief Executive Officers of
CombiChem and ImClone. If such officers are unable to reach an agreement within
thirty (30) days following the initiation of discussions between them, such
dispute shall be settled by arbitration as described in Section 15.2 below.
15.2 Binding Arbitration. If the parties have not been able to
resolve the dispute as provided in Section 15.1 above, the dispute shall be
finally settled by binding arbitration. Any arbitration hereunder shall be
conducted under rules of the American Arbitration Association. The arbitration
shall be conducted before one (1) arbitrator chosen by mutual agreement of the
Parties. If the Parties cannot agree on the choice of the arbitrator within a
period of thirty (30) days after submission, then the arbitrator shall be
appointed by the Court of Arbitration of the American Arbitration Association.
Any such arbitration shall be held in a mutually agreeable location; provided,
however that if the parties cannot so agree, the location(s) for such
arbitration(s) shall alternate between San Diego, California and New York, New
York, with the first such arbitration to be located in San Diego, California.
The arbitrators shall have the authority to grant specific performance, and to
allocate between the parties the costs of arbitration in such equitable manner
as he or she may determine. The arbitral award (i) shall be final and binding
upon the parties; and (ii) may be entered in any court of competent
jurisdiction.
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15.3 Injunctive Relief. Nothing contained in this Article 15 or any
other provisions of this Agreement shall be construed to limit or preclude a
Party from bringing any action in any court of competent jurisdiction for
injunctive or other provisional relief to compel the other Party to comply with
its obligations hereunder before or during the pendency of arbitration
proceedings.
16. NOTICES
Any notice required or permitted to be given hereunder shall be
deemed sufficient if sent by facsimile letter or overnight courier, or delivered
by hand to ImClone or CombiChem at the respective addresses and facsimile
numbers as set forth below or at such other address and facsimile number as
either Party hereto may designate. If sent by facsimile letter, notice shall be
deemed given when the transmission is completed if the sender has a confirmed
transmission report. If a confirmed transmission report does not exist, then the
notice will be deemed given when the notice is actually received by the person
to whom it is sent. If delivered by overnight courier, notice shall be deemed
given when it has been signed for. If delivered by hand, notice shall be deemed
given when received.
if to CombiChem, to: CombiChem, Inc.
0000 Xxxxxx Xxxxx Xx Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Fax number: (000) 000-0000
with a copy to: Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Fax number: (000) 000-0000
if to ImClone, to: ImClone Systems Incorporated
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Vice President, Business Development
Fax number: (000) 000-0000
with a copy to: Xxxxxxxx and Xxxxx
000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxx, Esq.
Fax number: (000) 000-0000
17. SURVIVAL
The provisions of Sections 2.5, 5.1, 5.2, 7.2(c),10.3, 10.4, and
Articles 1, 3, 8, 9, 11, 12, 13, 14, 15, 16, 18 and this Article 17 shall
survive termination of this Agreement in addition to those provisions which by
their terms survive.
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18. ADDITIONAL TERMS
18.1 Entire Agreement. This Agreement and the Common Stock Purchase
Agreement constitute the entire understanding between the Parties with respect
to the subject matter hereto and supersedes and replaces all previous
negotiations, understandings, representations, writings and contract provisions
and rights relating hereof. The Parties agree that all services provided
hereunder shall be subject to and governed by the terms and provisions set forth
herein, and none of the terms and conditions contained on any proposal, purchase
order, invoice or other writing shall have any effect or change the provisions
of this Agreement.
18.2 Amendment; No Waiver. No provision of this Agreement may be
amended, revoked or waived except by a writing signed and delivered by an
authorized officer of each Party. Any waiver on the part of either Party of any
breach or any fight or interest hereunder shall not imply the waiver of any
subsequent breach or waiver of any other right or interest.
18.3 Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect. In addition, should the invalidity or unenforceability of any provision
of this Agreement cause an unintended result or result in any unfairness to
either Party, then ImClone and CombiChem shall promptly meet and negotiate in
good faith to modify or amend this Agreement to change such result or to
eliminate such unfairness.
18.4 Headings. The descriptive headings are inserted for convenience
of reference only and are not intended to be part of or to affect the meaning of
or interpretation of this Agreement.
18.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
18.6 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California, without
regard to conflicts of laws principles.
19. WARRANTY
Each Party warrants that it has the power to grant all of the rights
granted and make such required assignments, and to assume all of the obligations
required, under this Agreement. If, at the time a Patent application is to be
filed by ImClone with respect to any Active Compound, Lead Compound, Development
Compound or Products, CombiChem informs ImClone that CombiChem has the power to
grant the exclusive rights to such Active Compound, Lead Compound, Development
Compound or Products, and to assign such Patents related thereto, to ImClone in
accordance with Sections 3.2 and 5.2 above, CombiChem further warrants that, in
fact, as of such date, it has such power subject to the proviso that under no
circumstances does CombiChem warrant to ImClone that its rights in any Active
Compound, Lead Compound, Development Compound or Products are exclusive to the
extent such Active Compound, Lead
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Compound, Development Compound or Products may be covered under the patent
claims of Third Parties wherein such claims are not the direct result of a
collaboration between the Third Party and CombiChem.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date.
COMBICHEM, INC. IMCLONE SYSTEMS INCORPORATED
By: /s/ Xxxxxxx Xxxxx By: /s/ illegible
-------------------- --------------------------------------------
Its: President and CEO Its: CFO
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Appendix A
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Appendix B
Milestone Payments
(Triggered by Activities of ImClone or Its Licensees)
Development Milestone Milestone Payment
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*** U.S. ***
*** U.S. ***
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*** U.S. ***
***
*** U.S. ***
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Total U.S. ***
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