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EXHIBIT 10.19
COLLABORATION AGREEMENT
BETWEEN
COMBICHEM, INC.
AND
TEIJIN LIMITED
March 29, 1996
2
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS................................................................. 1
ARTICLE 2 COLLABORATION RESEARCH AND SCREENING........................................ 7
2.1 Collaboration Research Activities........................................... 7
2.2 Research Plan............................................................... 9
2.3 Option to Expand the Research Program or to Extend the Research
Program Term................................................................ 9
2.4 Records..................................................................... 9
2.5 Permitted Activities......................................................... 9
2.6 Post-Research Program Activities............................................. 9
2.7 Reports...................................................................... 9
2.8 Excluded Products........................................................... 10
2.9 Retained Rights............................................................. 10
2.10 Restricted Activities; Rights Following Termination of0Exclusivity.......... 10
ARTICLE 3 MANAGEMENT.................................................................. 11
3.1 Research Committee.......................................................... 11
3.2 Membership of RC............................................................ 11
3.3 RC Meetings................................................................. 12
3.4 Decision Making............................................................. 12
ARTICLE 4 OPTIONS..................................................................... 12
4.1 Right of First Negotiation to Acquire Commercialization Rights in the
CombiChem Territory......................................................... 12
4.2 Right of First Refusal to Acquire Commercialization Rights in the
CombiChem Territory......................................................... 13
4.3 Access to Data.............................................................. 13
ARTICLE 5 LICENSES.................................................................... 14
5.1 Licenses to Teijin.......................................................... 14
5.2 Licenses to CombiChem....................................................... 14
5.3 Sublicenses................................................................. 15
5.4 Direct Affiliate Licenses................................................... 15
5.5 No Liability Regarding Third Party Rights................................... 15
5.6 Research License............................................................ 16
5.7 No Other Products........................................................... 16
ARTICLE 6 PAYMENTS.................................................................... 16
6.1 Up-front Payment............................................................ 16
6.2 Collaboration Funding....................................................... 16
6.3 Milestone Payments.......................................................... 17
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6.4 Royalties to CombiChem...................................................... 18
6.5 Royalties to Teijin......................................................... 18
6.6 Third Party Royalties....................................................... 19
ARTICLE 7 PAYMENTS; BOOKS AND RECORDS................................................. 19
7.1 Royalty Reports and Payments................................................ 19
7.2 Method for Payments......................................................... 19
7.3 Place of Royalty Payment and Currency Conversions........................... 20
7.4 Records; Inspection......................................................... 20
7.5 Tax Matters................................................................. 20
ARTICLE 8 DUE DILIGENCE............................................................... 21
8.1 Due Diligence............................................................... 21
8.2 License Back................................................................ 21
8.3 Regulatory Filings.......................................................... 22
ARTICLE 9 INTELLECTUAL PROPERTY....................................................... 22
9.1 Ownership of Inventions..................................................... 22
9.2 Patent Prosecution.......................................................... 23
9.3 Enforcement and Defense..................................................... 24
ARTICLE 10 CONFIDENTIALITY............................................................. 25
10.1 Confidential Information.................................................... 25
10.2 Permitted Use and Disclosures............................................... 26
10.3 Nondisclosure of Terms...................................................... 26
10.4 Publication................................................................. 26
ARTICLE 11 REPRESENTATIONS AND WARRANTIES.............................................. 27
11.1 Teijin...................................................................... 27
11.2 CombiChem................................................................... 27
11.3 Disclaimer.................................................................. 27
11.4 No Consequential Damages.................................................... 28
ARTICLE 12 INDEMNIFICATION............................................................. 28
12.1 Teijin...................................................................... 28
12.2 CombiChem................................................................... 28
12.3 Procedure................................................................... 29
ARTICLE 13 DISPUTE RESOLUTION.......................................................... 29
13.1 General Arbitration......................................................... 29
13.2 Arbitration Procedures...................................................... 29
13.3 Disqualification............................................................ 30
13.4 Confidentiality............................................................. 30
13.5 Equity...................................................................... 30
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ARTICLE 14 TERM AND TERMINATION........................................................ 30
14.1 Term........................................................................ 30
14.2 Termination for Cause....................................................... 31
14.3 Termination for Insolvency.................................................. 31
14.4 Effect of Breach or Termination............................................. 31
14.5 Survival.................................................................... 32
ARTICLE 15 MISCELLANEOUS............................................................... 32
15.1 Governing Laws.............................................................. 32
15.2 No Implied Licenses......................................................... 32
15.3 Waiver...................................................................... 32
15.4 Assignment.................................................................. 32
15.5 Independent Contractors..................................................... 32
15.6 Compliance with Laws........................................................ 32
15.7 Patent Marking.............................................................. 33
15.8 Notices..................................................................... 33
15.9 Severability................................................................ 33
15.10 Force Majeure............................................................... 33
15.11 Complete Agreement; Amendment............................................... 33
15.12 Headings.................................................................... 34
15.13 Counterparts................................................................ 34
Exhibits
Exhibit A -- Research Plan
Exhibit B -- Libraries
Exhibit C -- Initial Representatives on the Research Committee
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COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (the "Agreement"), effective as of March
29, 1996 (the "Effective Date"), is made by and between CombiChem, Inc., a
California corporation, having a principal place of business at 0000 Xxxxxx
Xxxxx Xx, Xxx Xxxxx, Xxxxxxxxxx 00000, X.X.X. ("CombiChem"), and Teijin Limited,
an entity organized and existing under the laws of Japan, having a principal
place of business at 0-0 Xxxxxx-xxxxxxxx 0-xxxxx, Xxxx-xx, Xxxxx 000, Xxxxx
("Teijin").
BACKGROUND
A. Teijin has discovered lead compounds that are *** ***.
B. CombiChem has developed novel proprietary methods for the generation
of compound libraries. CombiChem believes that its technology, by rapidly
producing diverse and targeted compound libraries, will accelerate the drug
discovery process and increase productivity of drug discovery programs.
C. Teijin and CombiChem desire to collaborate to design, synthesize and
screen compound libraries to identify Collaboration Compounds (as defined
herein).
D. CombiChem desires to grant to Teijin rights of first negotiation and
first refusal to acquire exclusive commercialization rights in North America,
Middle America and South America to compounds identified pursuant to this
Agreement, and Teijin desires to accept such rights.
NOW, THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the Parties
(as defined below) as follows:
ARTICLE 1
DEFINITIONS
The following capitalized terms used herein shall have the respective
meanings set forth below. Certain other capitalized terms are defined elsewhere
in this Agreement.
1.1 "Affiliate" shall mean any corporation or other business entity
which during the term of this Agreement controls, is controlled by or is under
common control with CombiChem or Teijin, but only for so long as such entity
controls, is controlled by or is under common control with CombiChem or Teijin.
For this purpose, control means the possession of the power to direct or cause
the direction of the management and the policies of an entity whether through
ownership directly or indirectly of over fifty percent (50%) of the
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Confidential Treatment and filed separately with the Commission.
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stock entitled to vote, and for non-stock organizations, the right to receive
over fifty percent (50%) of the profits by contract or otherwise, or if not
meeting the preceding requirement, any company owned or controlled by or owning
or controlling CombiChem or Teijin at the maximum control or ownership right
permitted in the country where such company exists.
1.2 "Aggregate Annual Research Fee" shall mean the aggregate Annual
Research Fee for a contract year as set in Sections 1.3 and 6.2, unless modified
by mutual agreement of the Parties.
1.3 "Annual Research Fee" shall mean on a per scientist full-time basis
(a) for the first year of the Research Program, *** per CombiChem scientist, (b)
for the first year of the Research Program, *** per Teijin scientist sited at
CombiChem's facility and (c) for any subsequent year of the Research Program,
the Annual Research Fee per scientist for the previous year increased by *** of
the percentage increase during the previous year in the CPI. If such index
ceases to be published, then such index shall be replaced with the index which
most closely resembles the performance of such index, as determined by the
mutual agreement of the Parties.
1.4 " *** Active Compound" shall mean a Library Compound screened during
the *** Exclusivity Period which has *** Receptor Activity.
1.5 " *** Compound" shall mean any (a) *** Active Compound or (b)
Derivative Compound which demonstrates *** Receptor Activity as well as any
compositions-of-matter claimed in patent applications filed or patents issued
under Article 9 of this Agreement with respect to compounds described in (a) or
(b) above.
1.6 " *** Exclusivity Period" shall mean the period of time constituting
the Research Program Term and a period of *** thereafter.
1.7 "*** Receptor Activity" shall mean *** and *** as an *** with
respect to *** for *** of the ***.
1.8 "Collaboration" shall comprise the activities described in Article 2
below.
1.9 "Collaboration Compounds" shall mean *** and *** Compounds.
1.10 "CombiChem Territory" shall mean North America, Middle America and
South America.
1.11 "CPI" means the Consumer Price Index, All Urban Consumers, as
published by the U.S. Bureau of Labor Statistics.
1.12 "Derivative Compound" shall mean any compound that demonstrates
activity against a particular molecular target, which compound is derived from a
Library Compound
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active against that molecular target by CombiChem, or Teijin or its Affiliates,
or by a third party under authority from Teijin. A compound shall be deemed to
have been "derived from" a Library Compound if it: (i)(A) results from a
chemical synthesis program based on a Library Compound or (B) is based on
structure-activity data relating to a Library Compound (with or without ***
Activity or *** Receptor Activity, and (ii) is a compound synthesized during the
*** Exclusivity Period (with respect to a Library Compound with *** Activity or
the *** Exclusivity Period (with respect to a Library Compound with *** Receptor
Activity). It is understood that "Derivative Compound" shall include compounds
derived from a Library Compound or from another Derivative Compound.
1.13 "Due Diligence" shall have the meaning set forth in Section 8.1 of
this Agreement.
1.14 "Europe" shall mean the geographic territory encompassed on the
date of this Agreement by all of those countries which are the members of the
European Free Trade Association or the European Union (formerly the European
Community), all countries that were formerly members of COMECON, the independent
republics of the former Republic of Yugoslavia, and all of the former republics
of the Union of Soviet Socialist Republics, together with any additional nations
or states that may be created in such geographical territory after the date of
the Agreement.
1.15 "Excluded Product" shall mean any product in the Field with ***
Activity or *** Receptor Activity, as the case may be, which, prior to the
Effective Date, Teijin has synthesized and either tested or has expressed an
intention to test for *** Activity or *** Receptor Activity as the case may be,
in each case, as shown by contemporaneous documentation, subject to reasonable
verification.
1.16 "Existing Patent Rights" shall mean (i) all patents and patent
applications existing as of the Effective Date that claim a Collaboration
Compound or method of use or process thereof or composition-of-matter thereof,
(ii) any divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions or other governmental actions which extend any of the
subject matter of a patent in subsection (i) above, (iii) all patents and patent
applications listed in subsections (i) or (ii) above that are subsequently
withdrawn and re-filed, and (iv) any substitutions, confirmations,
registrations, revalidations, or additions of any of the foregoing, in each
case, which is owned or controlled, in whole or part, by license, assignment or
otherwise by CombiChem during the term of this Agreement.
1.17 "Existing Know-How" shall mean all ideas, inventions, data,
know-how, instructions, processes, formulas, expert opinion and information,
existing as of the Effective Date owned or controlled in whole or part by
CombiChem, by license, assignment or otherwise, in each case, which are
necessary for the development, manufacture, use, sale or commercialization of a
Collaboration Compound or Product, in each case, to the extent CombiChem has the
right to license or sublicense the same, and subject to any limitations or
prohibitions of any license or sublicense. Excluded from Existing Know-How are
any inventions otherwise included in the definition of any Existing Patent
Rights in this Agreement.
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1.18 "Field" shall mean the therapeutic or prophylactic treatment or
prevention of diseases and conditions in humans and animals.
1.19 "FDA" shall mean the U.S. Food and Drug Administration or any
corresponding foreign registration or regulatory authority.
1.20 "Future Patent Rights" shall mean (i) all patents and patent
applications that claim a Collaboration Compound or method of use or process
thereof conceived and reduced to practice by CombiChem in the period from the
Effective Date until the expiration of the Exclusivity Period and (ii) any
divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions or other governmental actions which extend any of the subject matter
of the patent applications or patents in (i) above, and any substitutions,
confirmations, registrations, revalidations or additions of any of the
foregoing, in each case, which is owned or controlled, in whole or part, by
license, assignment or otherwise by CombiChem or its Affiliates during the term
of this Agreement. Excluded from Future Patent Rights are patents and patent
applications otherwise included in Existing Patent Rights in this Agreement.
1.21 "Future Know-How" shall mean all ideas, inventions, data, know-how,
instructions, processes, formulas, expert opinion and information owned or
controlled by CombiChem in whole or part by license, assignment or otherwise in
the period from the Effective Date until the expiration of the *** Exclusivity
Period (with respect to *** ) or the *** Exclusivity Period (with respect to ***
which are necessary for the development, manufacture, use or sale or
commercialization of a Collaboration Compound or Product, in each case, to the
extent CombiChem or its Affiliates has the right to license or sublicense the
same, and subject to any limitations or prohibitions of any license or
sublicense. Excluded from Future Know-How are any inventions otherwise included
in the definition of any Future Patent Rights in this Agreement.
1.22 "IND" shall mean an Investigational New Drug application, as
defined in the U.S. Food, Drug, and Cosmetic Act and the regulations promulgated
thereunder for initiating human clinical trials in the United States, or any
corresponding foreign application, registration or certification.
1.23 "In Vitro Activity" shall mean: (a) with respect to an *** (i) ***
and (ii) *** ; and (b) with respect to *** , (i) *** and (ii) *** .
1.24 "In Vivo Activity" shall mean *** *** as set forth in the Research
Plan.
1.25 "Library" shall mean a chemical compound library whose design has
been approved by the Research Committee (as defined below) containing
approximately *** *** molecules prepared by CombiChem specifically for screening
in the Collaboration based on proprietary structures (a) with activity disclosed
by Teijin to CombiChem or (b) generated by CombiChem on behalf of Teijin, in
each case, in connection with the Collaboration.
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1.26 "Library Compound" shall mean any compound which is contained in a
Library provided by CombiChem to Teijin in connection with the Collaboration.
1.27 "Licensed Technology" shall mean Existing Patent Rights, Future
Patent Rights, Existing Know-How and Future Know-How.
1.28 " *** Active Compound" shall mean a Library Compound screened
during the *** Exclusivity Period which has *** Activity.
1.29 " *** Activity" shall mean *** and *** as an *** .
1.30 " *** Compound" shall mean any (a) *** Active Compound or (b)
Derivative Compound which demonstrates *** Activity as well as any
compositions-of-matter claimed in patent applications filed or patents issued
under Article 9 of this Agreement with respect to compounds described in (a) or
(b) above.
1.31 " *** Exclusivity Period" shall mean the period of time
constituting the Research Program Term and a period of *** thereafter.
1.32 "NDA" shall mean a 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.
1.33 "Net Sales" shall mean the invoice price billed by a Party, its
Affiliates or Sublicensees to third parties for the sale of Products, after
deduction of (i) cash, trade and/or quantity discounts actually allowed; (ii)
amounts repaid or credited- by reason of rejections or returns of goods,
recalls, chargebacks, defects, or rebates; (iii) freight, postage, and duties
paid for and separately identified on the invoice or other documentation
maintained in the ordinary course of business; and (iv) excises, sales taxes,
value added taxes, and duties paid for and separately identified on the invoice
or other documentation maintained in the ordinary course of business. Net Sales
shall also include the amount or fair market value of all other consideration
received by a Party, its Affiliates or Sublicensees in respect of Products,
whether such consideration is in cash, payment in kind, exchange or another
form; provided, however, Net Sales shall not include up-front payments,
reimbursements or payments in connection with research and development
activities or payments for equity or other securities of a Party. A "sale" of an
Product is deemed to occur upon the earliest of invoicing, shipment or transfer
of title in the Product by a Party to a person other than such Party or its
Affiliate or Sublicensee, unless such Affiliate or Sublicensee is an end user of
the Product. In the event that an Product is sold bundled with one or more other
products (Products or otherwise) or provided in conjunction with any services,
in either case, in connection with a capitation pricing arrangement or any other
aggregated payment agreement or program, Net Sales from such bundled sales
and/or services for purposes of calculating Net Sales allocated to the Product
shall be equal to the bona fide list price of the Product when sold separately
in comparable quantities.
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1.34 "Other Library Compounds" shall mean Library Compounds other than
Collaboration Compounds.
1.35 "Party" shall mean CombiChem or Teijin, and their permitted
successors and assigns, as the case may be.
1.36 "Phase I", "Phase II", and "Phase III" shall mean Phase I (or Phase
I/II), Phase II (or Phase II/III), and Phase III clinical trials, respectively,
in each case as prescribed by applicable FDA IND Regulations, or any
corresponding foreign statutes, rules or regulations.
1.37 "Product(s)" shall mean any product containing a Collaboration
Compound. Products shall not include Excluded Products or products containing an
Other Library Compound.
1.38 "Product Development Candidate" shall mean any *** or *** *** which
(a) merits initiation of expanded animal toxicology studies, data of which are
required to be submitted to FDA for an IND, including, without limitation: (i)
formulation/stability studies; (ii) pharmacokinetic studies; (iii) drug
metabolism studies; (iv) dose ranging (prior to toxicology) studies; and (v)
one-month toxicology studies in two species; and (b) has satisfied, in Teijin's
reasonable judgment, the following criteria (and any other criteria which may
seem relevant to Teijin in its reasonable judgment, excluding criteria set forth
in (a) above): (i) demonstrated In Vitro Activity; (ii) demonstrated In Vivo
Activity; (iii) demonstrated safety pharmacology in two species (e.g., rat and
dog) showing satisfactory therapeutic index and efficacy as compared to a
central nervous system and cardiovascular profile; (iv) demonstrated an
appropriate cellular toxicity profile; (v) demonstrated appropriate mutagenicity
results; and (vi) demonstrated appropriate single dose and two-week non-GLP
toxicology results in two species (e.g., rat and dog).
1.39 "Research Committee" or "RC" shall mean the oversight committee
described in Article 3.
1.40 "Research Plan" shall mean the written overall plan (a copy of
which is attached hereto as Exhibit A) for the Research Program the Parties will
conduct to optimize Library Compounds with *** Activity and/or *** Receptor
Activity during the Research Program Term. The Research Plan may be revised as
necessary by agreement of the RC.
1.41 "Research Program" shall mean the research to be conducted in
accordance with the Research Plan as part of the Collaboration, and shall
include the activities and items set forth in Section 2.1 of this Agreement.
1.42 "Research Program Term" shall mean the period commencing on March
29, 1996 and terminating on the first anniversary thereof, unless extended
pursuant to Section 2.3.
1.43 "Sublicensee" shall mean, with respect to a particular Product, a
third party to whom a Party has granted a license or sublicense under the
Licensed Technology or the Teijin Technology and/or the Teijin Know-How, as the
case may be, to make, use and/or sell such
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Product, including, without limitation, a collaborative partner of Teijin or
CombiChem. As used in this Agreement, it is understood that "Sublicensee" shall
also include a third party to whom a Party has granted the right to distribute
such Product, provided that such third party has the primary responsibility for
marketing and promotion at its expense of such Product within the field or
territory for which such distribution rights are granted, which marketing and
promotional activities are not subsidized directly or indirectly by a Party or
its Affiliates.
1.44 "Teijin Technology" shall mean any patent application or patent (a)
arising in connection with or out of the Research Program or (b) necessary to
make, use or sell a Collaboration Compound or Product, and is owned or
controlled, in whole or in part, by Teijin or its Affiliates at any time during
the term of this Agreement that claims the synthesis, composition-of-matter or
method of use of a Library Compound, a Collaboration Compound or a Product.
1.45 "Teijin Know-How" shall mean all ideas, inventions, data, know-how,
instructions, processes, formulas, expert opinion and information owned or
controlled in whole or in part by Teijin, by license, assignment or otherwise
during the term of this Agreement, which are necessary for the development,
manufacture, use or sale or commercialization of a Collaboration Compound or
Product, to the extent Teijin has the right to license or sublicense the same,
and subject to any limitation and prohibitions of any license or sublicense.
Excluded from Teijin Know-How are any inventions otherwise included in the
definition of Teijin Technology in this Agreement.
1.46 "Territory" shall mean Japan, China, North Korea, South Korea,
Taiwan, Thailand, Cambodia, Laos, Vietnam, Indonesia, the Philippines,
Singapore, Malaysia, Hong Kong, Burma, Australia, New Zealand and Europe;
provided that in the event either of the rights set forth in Article 4 are
exercised and definitive agreements executed in connection therewith, the
"Territory" shall also include the CombiChem Territory with respect to the
specified Product Development Candidate and the Products therefrom.
ARTICLE 2
COLLABORATION RESEARCH AND SCREENING
2.1 Collaboration Research Activities. Subject to the terms and
conditions set forth herein, the Parties shall conduct research under the
Research Plan with respect to Collaboration Compounds on a collaborative basis
with the goal of developing Products.
2.1.1 CombiChem Responsibilities.
(a) During the Research Program Term, CombiChem shall
synthesize *** Libraries. Such Libraries shall be
provided to Teijin according to the schedule set
forth in the Research Plan. The Libraries shall be
provided in 96-well plates or Eppendorf tubes, and
shall contain the quantities of Library Compounds
set forth on Exhibit B;
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(b) During the Research Program Term, CombiChem shall
keep the RC fully informed of its activities
performed in connection with the Collaboration,
including, without limitation, by providing the RC
with data and information regarding Libraries,
Collaboration Compounds and structures thereof;
(c) During the Research Program Term, CombiChem shall
provide an average of *** *** to conduct
CombiChem's activities under the Research Program;
and
(d) During the Research Program Term, CombiChem shall
provide space and resources to accommodate the FTE
Teijin chemist (described in Section 2.1.2(c)
below).
2.1.2 Teijin Responsibilities.
(a) Teijin shall use reasonable efforts to provide
CombiChem with support and assistance useful or
necessary for the conduct of the Research Plan,
including, but not limited to, providing chemical
intermediates, if available, information concerning
assay methods and screening data;
(b) During the Research Program Term Teijin shall keep
the RC fully informed of its activities performed
in connection with the Collaboration, including,
without limitation, by providing the RC with data
and information regarding Collaboration Compounds,
and structures thereof, and *** assays developed
and used by Teijin to test Library Compounds;
(c) During the Research Program Term, Teijin shall
provide an average of one (1) FTE research position
to conduct Teijin's activities at CombiChem's
facility under the Research Program;
(d) During the Research Program Term and during the ***
Exclusivity Period and the *** Exclusivity Period,
Teijin shall screen the Libraries for *** Activity
and for *** Receptor Activity. Any compound
identified as having *** Activity as a result of
such screening shall be considered *** Compound for
all purposes of this Agreement, and any compound
identified as having *** Receptor Activity as a
result of such screening shall be considered a ***
Compound for all purposes of this Agreement; and
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(e) During and following the Research Program Term,
Teijin shall use Due Diligence to optimize
Collaboration Compounds into Products, as set forth
in Section 8.1 below.
2.2 Research Plan. The Parties hereby agree that the Research Program
shall be carried out in accordance with the Research Plan, a copy of which is
attached hereto as Exhibit A. The RC shall review the Research Plan on an
ongoing basis and may make changes to the Research Plan; provided, however, the
Research Plan shall not be modified except as mutually agreed by CombiChem and
Teijin.
2.3 Option to Expand the Research Program or to Extend the Research
Program Term. Teijin shall have the right to expand or extend the term of the
Research Program for up to two successive one (1) year terms. To expand the
Research Program, Teijin shall promptly notify CombiChem of its desire. To
extend the Research Program Term, Teijin must notify CombiChem no later than
three (3) months prior to the then current expiration date for the Research
Program Term. Following such notification, the Parties shall negotiate the terms
of any such expansion or extension in good faith.
2.4 Records. CombiChem and Teijin and their respective Affiliates shall
maintain records of the Research Program (or cause such records to be
maintained) in sufficient detail and in good scientific manner as 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 RC). Each Party shall allow the
other to have reasonable access to all pertinent materials and data generated by
or on behalf of such Party with respect to each Collaboration Compound in
connection with the Research Program, as set forth in the Research Plan.
2.5 Permitted Activities. Subject in all cases to Section 2.10, each of
Teijin and CombiChem may screen the Libraries, both during the Research Program
Term and thereafter, for activity other than *** Activity or *** Receptor
Activity. CombiChem and Teijin may further collaborate with respect to any Other
Library Compounds discovered pursuant to this Section 2.5 and the terms and
conditions of any such further collaboration shall be subject to good-faith
negotiations.
2.6 Post-Research Program Activities. Except as expressly provided
elsewhere under the terms of this Agreement, Teijin shall, at Teijin's or its
Affiliates or Sublicensees' expense, be responsible for conducting all
development and commercialization of Collaboration Compounds and Products to
which Teijin retains rights under this Agreement following the Research Program
Term.
2.7 Reports.
2.7.1 Collaboration Compounds. Following the Research Program
Term, Teijin shall keep CombiChem fully informed of its activities with respect
to Collaboration Compounds. Teijin shall provide CombiChem with written ***
reports within ***
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*** of the end of each *** period providing at least the following information
regarding the status of all Collaboration Compounds: (i) description of the
status of the research and development activities conducted with respect to each
Collaboration Compound, including decisions made to discontinue development of
any Collaboration Compound; and (ii) the status of all patent applications
claiming such Collaboration Compounds. Such reports shall contain sufficient
information to allow CombiChem to monitor Teijin's obligations under this
Agreement, including, without limitation, Teijin's obligations with respect to
Due Diligence set forth in Section 8.1 below and the accomplishment of the
milestones set forth in Section 6.2 below. Until first commercial introduction
of each royalty-bearing Product by or on behalf of Teijin hereunder, Teijin
shall keep CombiChem apprised of the status of the pre-clinical, clinical and
commercial development of that Product by semi-annually providing CombiChem with
a written report detailing such activities with respect to each applicable
Product during the term of this Agreement.
2.7.2 Library Compounds. During the Research Program Term,
Teijin shall keep CombiChem fully informed of its activities with respect to
Library Compounds, including, without limitation, notification by Teijin to
CombiChem of its intent to screen such Library Compound against an assay other
than an assay designed to determine *** Activity or *** Receptor Activity prior
to performing any such screening. Teijin shall provide CombiChem with written
*** reports within *** of the end of each *** period providing such information.
2.7.3 Confidentiality. All reports and information provided under
this Section 2.7 shall be deemed Confidential Information of Teijin.
2.8 Excluded Products. Within thirty (30) days of the filing of an IND
with respect to each Excluded Product, Teijin shall notify CombiChem of such
filing, and provide a detailed description of why such Excluded Product is not
an Product hereunder. If a dispute arises between the Parties which the Parties
are unable to resolve regarding whether or not a product is an Excluded Product,
the dispute shall be settled by binding arbitration pursuant to Article 13
herein.
2.9 Retained Rights. CombiChem shall retain ownership of the tangible
property embodied in the physical Libraries and in the Library Compounds
provided to Teijin hereunder.
2.10 Restricted Activities; Rights Following Termination of Exclusivity.
2.10.1 *** Exclusivity. During the *** Exclusivity Period,
CombiChem will not (i) knowingly make compounds or combinatorial libraries for
or with any third person or entity specifically for screening for *** Activity,
(ii) enter into contract screening for or with any third person or entity with
respect to *** Activity or (iii) perform for its own account any screening with
respect to *** Activity; provided, that, after the right of first negotiation
set forth in Section 4.1 of this Agreement has been exercised and lapsed,
CombiChem may confidentially provide information and data concerning ***
Compounds designated to be Product Development Candidates to a potential or
actual collaborator of
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CombiChem in the CombiChem Territory during the *** Exclusivity Period solely
with respect to the specified Product Development Candidate with prior notice of
the name of such potential or actual collaborator to Teijin.
2.10.2 *** Exclusivity. During the *** Exclusivity Period,
CombiChem (a) will not enter into contract screening for or with any third
person or entity of the Libraries, any Library Compound or any Derivative
Compound with respect to *** Receptor Activity and (b) will not perform for its
own account any screening of the Libraries, any Library Compound or any
Derivative Compound with respect to *** Receptor Activity; provided, that, after
the right of first negotiation set forth in Section 4.1 of this Agreement has
been exercised and lapsed, CombiChem may confidentially provide information and
data concerning *** Compounds designated to be Product Development Candidates to
a potential or actual collaborator of CombiChem in the CombiChem Territory
during the *** Exclusivity Period solely with respect to the specified Product
Development Candidate with prior notice of the name of such potential or actual
collaborator to Teijin.
2.10.3 All Other Molecular Targets. During the Research Program
Term, CombiChem will not enter into contract screening of the Libraries, any
Library Compound or any Derivative Compound for or with any third person or
entity, with respect to any activity and will not perform for its own account
any screening of the Libraries or any Library Compound with respect to any
activity.
2.10.4 Commercialization Rights. Teijin's rights to develop and
commercialize each Collaboration Compound as set forth in and subject to the
terms and conditions of this Agreement, shall be exclusive in the Territory
exclusive even as to CombiChem and its Affiliates) for as long as Teijin
continues to develop and commercialize such Collaboration Compound with Due
Diligence.
2.10.5 Rights Following Termination of Exclusivity. After the
expiration of the *** Exclusivity Period, the *** Exclusivity Period or the
Research Program Term, as the case may be, CombiChem and Teijin shall have
co-exclusive rights to the Libraries and the Library Compounds and each may use
any Library itself or provide such Library to others on either an exclusive or
non-exclusive basis, subject to the terms and conditions regarding Collaboration
Compounds from such Library expressly set forth in this Agreement.
ARTICLE 3
MANAGEMENT
3.1 Research Committee. Teijin and CombiChem will establish a RC to
oversee, review and coordinate the conduct of the Research Program, including,
without limitation, the design of the Libraries, and provide advice regarding
prosecution of patent applications.
3.2 Membership of RC. The RC shall be comprised of representatives from
each of Teijin and CombiChem, each Party's members selected by that Party. The
initial representatives of each Party are listed on Exhibit C attached hereto.
Each Party shall
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designate the chief representative for its members ("Chief Representative").
CombiChem and Teijin may change its RC representatives at any time, upon written
notice to the other Party. The RC shall be chaired as agreed by the Parties.
From time to time, the RC may establish subcommittees to oversee particular
projects or activities, and such subcommittees will be constituted as the RC
agrees.
3.3 RC Meetings.
3.3.1 Research Program Term. During the Research Program Term,
the RC shall meet up to four (4) times per year at regular intervals, or more
often as agreed by the Parties, at such locations as the Parties agree. At such
meetings, the RC will formulate and review the Research Program objectives,
monitor the progress of the Research Program toward those objectives, and take
such other actions as may be specified under this Agreement or as the Parties
deem appropriate. With the consent of the Parties, other representatives of
CombiChem or Teijin or their Affiliates or Sublicensees may attend such RC
meetings as observers. Each Party shall be responsible for all of its own
expenses. The first meeting of the RC shall occur as soon as practicable after
the Effective Date, but in no event later than forty-five (45) days after the
Effective Date.
3.3.2 After Research Program Term. After the Research Program
Term and during the term of this Agreement, the RC shall meet as mutually agreed
by the Parties. At such meetings, the RC will take such other actions as may be
specified under this Agreement or as the Parties deem appropriate. Each Party
shall be responsible for all of its own expenses.
3.4 Decision Making. Decisions of the RC shall be made by agreement
between the Teijin Chief Representative and the CombiChem Chief Representative.
Certain decisions must be approved by CombiChem's Chief Executive Officer and
Teijin's General Manager of the Planning and Research Division, Medical and
Pharmaceutical Group. In the event that agreement is not achieved, the dispute
will be referred to CombiChem's Chief Executive Officer (or designee of similar
rank) and Teijin's General Manager of the Planning and Research Division,
Medical and Pharmaceutical Group (or designee of similar rank), who shall
promptly meet and endeavor to resolve the dispute in a timely manner.
ARTICLE 4
OPTIONS
CombiChem hereby grants to Teijin the exclusive rights set forth in
Section 4.1 and 4.2 below exercisable to acquire exclusive rights to
commercialize Collaboration Compounds or Products in the CombiChem Territory.
4.1 Right of First Negotiation to Acquire Commercialization Rights in
the CombiChem Territory. Following the time an *** Compound or a *** Compound
has been designated a Product Development Candidate, either Party may notify the
other Party in writing (the "Rights Notice") of its desire to negotiate to
provide Teijin with exclusive rights to commercialize such Product Development
Candidate in the CombiChem Territory
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("Commercialization Rights"). Such notice shall be deemed an offer to Teijin to
enter into definitive agreements with respect to such Commercialization Rights.
CombiChem and Teijin shall have a period of *** from receipt of the Rights
Notice in which to negotiate the terms and conditions of the definitive
agreements. In the event that definitive agreements are not entered into within
such *** period, CombiChem may immediately thereafter enter into discussions
with third parties regarding the Commercialization Rights with prior notice of
the names of such third parties to Teijin and the right of first negotiation set
forth in this Section 4.1 shall lapse with respect to the specified Product
Development Candidate and the right of first refusal set forth in Section 4.2
below shall be operative thereafter.
4.2 Right of First Refusal to Acquire Commercialization Rights in the
CombiChem Territory. For a period of *** following the lapse of the right of
first negotiation set forth in Section 4.1 with respect to a specified Product
Development Candidate, prior to entering into any agreement with a third party
to grant the Commercialization Rights with respect to a Product Development
Candidate, CombiChem shall notify Teijin in writing of the material terms and
conditions of any such proposed agreements. Such notice shall be deemed an offer
to Teijin to enter into definitive agreements on the same proposed terms and
conditions. Teijin shall have *** to accept the offer contained in such notice.
Upon acceptance by Teijin, the Parties will negotiate in good faith to draft and
execute definitive agreements within *** of acceptance. If no definitive
agreements have been executed in such *** period, the right of first refusal set
forth in this Section 4.2 shall lapse with respect to the specified Product
Development Candidate.
4.3 Access to Data. In order to make it possible for CombiChem to search
for a Sublicensee to the rights to commercialize a Product Development Candidate
in the CombiChem Territory, Teijin agrees that it will give access, following
the lapse of the right of first negotiation set forth in Section 4.1, solely to
data regarding activity of the specified Product Development Candidate free of
charge to such potential Sublicensee solely for the purpose of the evaluation of
the Product Development Candidate by such third party; any other data which
Teijin has generated in connection with the Collaboration may be provided to the
third party only upon agreement with Teijin on terms applicable to providing
such data. No non-clinical or clinical data to which Teijin provides access
under this Section 4.3 may be submitted to the regulatory authorities for IND or
NDA applications by CombiChem, its Affiliates or its Sublicensees without
agreement with Teijin on terms applicable to such submission including sharing
of the cost of the generation of the data; provided that CombiChem and/or Teijin
and/or a Sublicensee of either party will provide free of charge to the other
Party and/or its Sublicensees any information or data required by law to be
reported to the relevant regulatory authorities outside of any drug approval
process.
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ARTICLE 5
LICENSES
5.1 Licenses to Teijin.
5.1.1 Exclusive License to Licensed Technology in the Territory.
Subject to the terms and conditions of this Agreement, CombiChem agrees to
grant, and hereby grants, to Teijin an exclusive license (exclusive even as to
CombiChem and its Affiliates) under the applicable Licensed Technology to make,
have made and use Collaboration Compounds, and to make, have made, use, have
used, sell and have sold Products in the Field within the Territory. It is
understood that such licenses shall include the right to discover and develop
Collaboration Compounds and Products after the Research Program Term if still
during the term of this Agreement.
5.1.2 Exclusive License to Joint Inventions Relating to
Collaboration Compounds and Products in the Territory. Subject to the terms and
conditions of this Agreement, CombiChem agrees to grant, and hereby grants, to
Teijin an exclusive license under CombiChem's interest in any Joint Inventions
to make, have made and use Collaboration Compounds, and to make, have made, use,
have used, sell and have sold Products in the Field within the Territory.
5.1.3 Exclusivity and Term for Collaboration Compounds. Such
licenses shall be exclusive in relation to each Collaboration Compound and
Product so long as Teijin continues to develop and commercialize such
Collaboration Compound and/or Product with Due Diligence.
5.1.4 Co-Exclusive License to Joint Inventions Relating to
Library Compounds. Subject to the terms and conditions of this Agreement,
CombiChem agrees to grant and hereby grants to Teijin, effective upon the
expiration of the *** Exclusivity Period, *** Exclusivity Period or the Research
Program Term, as the case may be, a co-exclusive, worldwide, royalty-free
license under CombiChem's interest in any Joint Inventions relating to Library
Compounds from such Library (excluding Collaboration Compounds) to make, have
made, use, import, sell and have sold products.
5.2 Licenses to CombiChem.
5.2.1 Exclusive License to Teijin Technology and Teijin Know-How
in the CombiChem Territory. Subject to the terms and conditions of this
Agreement, Teijin agrees to grant, and hereby grants, to CombiChem an exclusive
license (exclusive even as to Teijin and its Affiliates) under the applicable
Teijin Technology and Teijin Know-How to make, have made and use Collaboration
Compounds, and to make, have made, use, have used, sell and have sold Products
in the Field within the CombiChem Territory. It is understood that such licenses
shall include the right to discover and develop Collaboration Compounds and
Products after the Research Program Term if still during the term of this
Agreement.
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5.2.2 Exclusive License to Joint Invention Relating to
Collaboration Compounds and Products in the CombiChem Territory. Subject to the
terms and conditions of this Agreement, Teijin agrees to grant, and hereby
grants, to CombiChem an exclusive license under Teijin's interest in any Joint
Inventions to make, have made and use Collaboration Compounds, and to make, have
made, use, have used, sell and have sold Products in the Field within the
CombiChem Territory (subject to Article 4).
5.2.3 Co-Exclusive License to Joint Inventions Relating to
Library Compounds. Subject to the terms and conditions of this Agreement, Teijin
agrees to grant, and hereby grants, to CombiChem, effective upon the expiration
of the *** Exclusivity Period, the *** Exclusivity Period or the Research
Program Term, as the case may be, a co-exclusive, worldwide, royalty-free
license under Teijin's interest in any Joint Inventions relating to Library
Compounds from such Library (excluding Collaboration Compounds) to make, have
made, use, import, sell and have sold products.
5.2.4 Physical Transfer. In the event that elements or components
of Teijin Technology and/or Teijin Know-How are to be physically transferred to
CombiChem, its Affiliates or Sublicensees in connection with the license grants
contained herein, CombiChem and Teijin shall negotiate in good faith the terms
and conditions for such physical transfer.
5.3 Sublicenses. Subject to the terms and conditions of this Agreement,
each Party shall have the right to sublicense the rights granted in this Article
5. Each such sublicense shall be consistent with all the terms and conditions of
this Agreement, and shall be subject to the prior consent of the other Party,
which consent shall not be unreasonably withheld. The Party sublicensing its
rights hereunder shall remain responsible to the other Party for all of each
such Sublicensee's applicable financial and other obligations under the
sublicense. Each sublicense shall provide for its continuation following early
termination of the license rights of the Party sublicensing its rights
hereunder, and, except in the case of Excluded Products, its assignment to the
other Party.
5.4 Direct Affiliate Licenses. Whenever Teijin shall reasonably
demonstrate to CombiChem that, in order to facilitate direct royalty payments by
an Affiliate, it is desirable that a separate license agreement be entered into
between CombiChem and such Affiliate, CombiChem will grant such licenses
directly to such Affiliate by means of an agreement which shall be consistent
with all of the provisions hereof, and Teijin shall guarantee the Affiliate's
obligations thereunder and otherwise provide to CombiChem assurances of
performance satisfactory to CombiChem. Teijin shall reimburse CombiChem for its
reasonable attorneys' fees and costs incurred in connection with any such
separate license agreement.
5.5 No Liability Regarding Third Party Rights. It is understood and
agreed that even if CombiChem complies with its obligations under this
Agreement, that compounds provided to third parties in the course of CombiChem's
other business activities may result in third party patent applications and
patents, including patent applications and patents owned by such third parties,
or owned jointly by CombiChem and such third parties, which could conflict with
patent applications and patents owned by Teijin, or jointly owned by Teijin and
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CombiChem hereunder. CombiChem will use its reasonable efforts to avoid such
conflict; provided, that unless Teijin is damaged as a proximate result of a
material breach by CombiChem of the terms of Article 2 or any of the
representations and warranties in Article 11, then CombiChem shall have no
liability under this Agreement with respect to any such conflict.
5.6 Research License. Notwithstanding Section 5.1 above and subject to
Section 2.10, CombiChem shall retain the right under the Licensed Technology to
make, have made and use Library Compounds for its own research purposes.
5.7 No Other Products. Except as otherwise agreed or specifically
provided in the terms of this Agreement, neither Teijin nor its Affiliates nor
Sublicensees shall commercialize any Library Compound or Collaboration Compound,
other than as a Product in accordance with this Agreement.
ARTICLE 6
PAYMENTS
6.1 Up-front Payment. In consideration of the licenses contained in this
Agreement, Teijin agrees to pay to CombiChem an up-front payment of *** , such
amount to be paid within thirty (30) days of the Effective Date. Except as
otherwise specifically set forth in this Agreement, this up-front payment shall
not be refundable nor shall it be creditable against any other amounts due under
this Agreement.
6.2 Collaboration Funding. In consideration for CombiChem's performance
of its obligations under the Research Program, within *** of the Effective Date
and within *** of the first *** of each subsequent *** interval of the Research
Program Term, Teijin shall pay CombiChem an amount equal to *** of the Aggregate
Annual Research Fee set forth below:
Aggregate
Contract Year Annual Research Fee
1 ***
The Aggregate Annual Research Fee shall be the maximum amount Teijin shall be
obligated to pay CombiChem for its services as part of the Research Program
(even if the product of the Annual Research Fee multiplied by the number of
CombiChem scientists and Teijin scientists sited at CombiChem's facility and
used in the Research Program on a FTE basis would exceed such amount) and
CombiChem shall be responsible for any additional costs incurred by CombiChem,
unless Teijin has agreed in writing in advance to pay any amount beyond the
Aggregate Annual Research Fee. The amounts to be paid hereunder shall not be
refundable nor shall they be creditable against any other amounts due under this
Agreement.
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6.3 Milestone Payments.
6.3.1 Collaboration Compound Milestones. Teijin agrees to pay to
CombiChem the amounts set forth in Table 6.3.1 below upon completion by Teijin,
its Affiliates, Sublicensees or other designees of each of the milestones set
forth in Table 6.3.1 with respect to the first *** Compound to reach such
milestone and the first *** Compound to reach such milestone. Teijin shall have
no obligation to pay any of the following milestone payments more than *** ***
with respect to *** Compounds or *** Compounds directed at the same molecular
target, regardless of how many applicable Products are commercialized. No
milestone payments shall be due to CombiChem in respect of (a) Excluded Products
in any event or (b) a *** Compound unless and until Teijin has notified
CombiChem in writing of its intention to designate such *** Compound as a
Product Development Candidate. Following the notification by Teijin discussed in
subsection (b) of the immediately preceding sentence, Teijin shall pay to
Combichem all milestone payments which would have otherwise have been due with
respect to such *** Compound. For example, Teijin shall have no obligation to
make a milestone payment for the first *** Compound which demonstrates *** or
*** until it has designated a *** Compound directed at a particular molecular
target as a Product Development Candidate. Following such designation and
assuming that such *** Compound has demonstrated *** Teijin would be required to
pay to CombiChem an aggregate of *** representing the milestones achieved
through the time of such designation.
Table 6.3.1
-------------------------------------------------------------------------------------------------
First *** Compound and
MILESTONES *** Compound (against a specific
molecular target) Identified
-------------------------------------------------------------------------------------------------
*** U.S. ***
*** U.S. ***
*** U.S. ***
*** U.S. ***
*** U.S. ***
Total Payments U.S. ***
-------------------------------------------------------------------------------------------------
6.3.2 Payments. Except as set forth in Section 6.3.1 solely with
respect to *** Compounds, all payments made to CombiChem by Teijin pursuant to
this Section 6.3 shall be due within thirty (30) days after the occurrence of
the corresponding milestone. Except as otherwise specifically set forth in this
Agreement, milestone payments made pursuant to this Section 6.3 shall not be ***
nor shall they be *** against any other amounts due under this Agreement. It is
understood that the milestone payments set forth above shall be made with
respect to the first *** Compound and the first *** Compound to attain such
milestone; provided, however, that if Teijin ceases all development of a
particular ***
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Compound or *** Compound (or corresponding Product) after having made payments
with respect to such *** Compound or *** Compound (or corresponding Product)
under this Section 6.3 on the accomplishment of milestones specified herein,
there shall be no payment due upon the accomplishment of those same milestones
with respect to the *** Compound or *** Compound (or corresponding Product)
hereunder that is directed at the same molecular target. Amounts due with
respect to milestones achieved with respect to *** Compound or *** Compound (or
corresponding Product) which were not previously paid with respect to an ***
Compound or *** Compound (or corresponding Product) shall be paid pursuant to
this Section 6.3.
6.4 Royalties to CombiChem.
6.4.1 Base Royalty on Products. Teijin shall pay to CombiChem in
respect of Net Sales of Products by Teijin, its Affiliates and Sublicensees,
royalties of *** of Net Sales of each Product within the Territory.
6.4.2 Trade Secret Royalties. The Parties acknowledge and agree
that the principal value contributed by CombiChem is a potential acceleration in
time to market, enhanced probability of success and the potential for multiple
target leads and that CombiChem may not own or control patents that cover the
manufacture, sale or use of a particular Product. Teijin acknowledges and agrees
that Teijin receives value hereunder in obtaining the access to the
Collaboration Compounds and, accordingly, Teijin shall pay the royalties at the
rate specified in this Section 6.4, regardless of whether a Product is covered
by a patent application or patent within the Licensed Technology.
6.4.3 Single Royalty: Nonroyalty Sales. No royalty shall be
payable under this Section 6.4 with respect to sales of Products among Teijin,
its Affiliates and Sublicensees for resale; and in no event shall more than one
royalty be due hereunder with respect to any Product unit even if covered by
more than one patent included in the Licensed Technology.
6.4.4 Royalty Term. Teijin's obligation to pay royalties to
CombiChem under this Section 6.4 shall continue for each Product, on a
country-by-country basis, until the date which is the later of (i) ten (10)
years after the first commercial sale of such Product in such country by Teijin,
its Affiliates or Sublicensees, (ii) the expiration of the last-to-expire issued
patent within the Licensed Technology containing any claim which would be
infringed by making, using or selling the applicable Product in the applicable
country in the absence of the license grants in this Agreement.
6.4.5 Currency of Payments. All payments made pursuant to this
Section 6.4 shall be made in U.S. dollars.
6.5 Royalties to Teijin.
6.5.1 Base Royalty on Products. CombiChem shall pay to Teijin in
respect of Net Sales of Products by CombiChem, its Affiliates and Sublicensees,
royalties of ***
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*** of Net Sales of each Product within the CombiChem Territory.
6.5.2 Trade Secret Royalties. CombiChem acknowledges and agrees
that CombiChem receives value hereunder in obtaining the access to the Product
Development Candidates and accordingly, CombiChem shall pay the royalties at the
rate specified in this Section 6.5, regardless of whether a Product is covered
by a patent application or patent within the Teijin Technology, or by the Teijin
Know-How.
6.5.3 Single Royalty: Nonroyalty Sales. No royalty shall be
payable under this Section 6.5 with respect to sales of Products among
CombiChem, its Affiliates and Sublicensees for resale; and in no event shall
more than one royalty be due hereunder with respect to any Product unit even if
covered by more than one patent included in the Teijin Technology, or by the
Teijin Know-How.
6.5.4 Royalty Term. CombiChem's obligation to pay royalties to
Teijin under this Section 6.5 shall continue for each Product, on a
country-by-country basis, until the date which is the later of (i) ten (10)
years after the first commercial sale of such Product in such country by
CombiChem, its Affiliates or Sublicensees, (ii) the expiration of the
last-to-expire issued patent within the Teijin Technology containing any claim
which would be infringed by making, using or selling the applicable Product in
the applicable country in the absence of the license grants in this Agreement.
6.5.5 Currency of Payments. All payments made pursuant to this
Section 6.5 shall be made in Japanese yen.
6.6 Third Party Royalties. Except as otherwise specifically set forth in
this Agreement, each Party shall be responsible for the payment of any royalties
due to third parties upon the manufacture, use, marketing, sale or distribution
of Products by such Party, its Affiliates or Sublicensees under the Licensed
Technology, the Teijin Technology and/or the Teijin Know-How.
ARTICLE 7
PAYMENTS; BOOKS AND RECORDS
7.1 Royalty Reports and Payments. After the first commercial sale of a
Product on which royalties are payable by a Party, its Affiliates or
Sublicensees hereunder, such Party shall make quarterly written reports to the
other Party within ninety (90) days after the end of each calendar quarter,
stating in each such report the number, description, and aggregate Net Sales of
each Product sold during the calendar quarter upon which a royalty is payable
under Section 6.4 or 6.5, as the case may be. Concurrently with the making of
such reports, the selling Party shall pay to the other Party royalties due at
the rates specified in Section 6.4 or 6.5, as the case may be.
7.2 Method for Payments. All payments due under this Agreement shall be
made by bank wire transfer in immediately available funds to an account
designated by the
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receiving Party. Any payments that are not paid on the date such payments are
due under this Agreement shall bear interest to the extent permitted by
applicable law at the prime rate as reported by the Chase Manhattan Bank, New
York, New York, on the date such payment is due, plus an additional ***
calculated on the number of days such payment is delinquent.
7.3 Place of Royalty Payment and Currency Conversions. If any currency
conversion shall be required in connection with the calculation of royalties
hereunder, such conversion shall be made using the selling exchange rate for
conversion quoted for current transactions reported in the Western edition of
The Wall Street Journal for the last business day of the calendar quarter to
which such payment pertains. If at any time legal restrictions prevent the
prompt remittance of any royalties owed on Net Sales in any jurisdiction, the
payor may make such payments by depositing the amount thereof in local currency
in a bank account or other depository in such country in the name of the payee.
The payor shall promptly notify the payee of the circumstances leading to such
deposit and, at the payee's request, cooperate with the payee to repatriate such
amounts.
7.4 Records; Inspection. The selling Party and its Affiliates and
Sublicensees shall keep complete, true and accurate books of account and records
for the purpose of determining the royalty amounts payable under this Agreement.
Such books and records shall be kept at the principal place of business of
CombiChem if CombiChem is the selling party or at the Tokyo Head office of
Teijin at 0-0 Xxxxxxxxxx-xxx 0-xxxxx, Xxxxxxx-xx, Xxxxx, Xxxxx if Teijin is the
selling party for at least three (3) years following the end of the calendar
quarter to which they pertain. Such records will be open for inspection during
such three (3) year period by a public accounting firm mutually acceptable to
Teijin and CombiChem, solely for the purpose of verifying royalty statements
hereunder. Such inspections may be made no more than once each calendar year, at
reasonable times and on reasonable notice. Inspections conducted under this
Section 7.4 shall be at the expense of the inspecting Party, unless a variation
or error producing an increase exceeding *** of the amount stated for any period
covered by the inspection is established in the course of any such inspection,
whereupon all reasonable costs relating to the inspection for such period and
any unpaid amounts that are discovered will be paid promptly by the other Party
together with interest thereon from the date such payments were due at the prime
rate as reported by the Chase Manhattan Bank, New York, New York, plus an
additional *** . The public accounting firm employees shall sign a customary
confidentiality agreement as a condition precedent to their inspection, and
shall report to the inspecting Party only that information which would be
contained in a properly prepared royalty report by the other Party.
7.5 Tax Matters.
7.5.1 Withholding Taxes Paid by Teijin. All amounts required to
be paid by Teijin pursuant to this Agreement shall be paid with deduction for
withholding for or on account of any taxes (other than taxes imposed on or
measured by net income) or similar governmental charge imposed by a jurisdiction
other than the United States (collectively, "Teijin Withholding Taxes") to the
extent CombiChem and/or its Affiliates or their successors has the lawful rights
to utilize the Teijin Withholding Taxes paid by Teijin as a credit against
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CombiChem and/or its Affiliates regular U.S. tax liability. Teijin shall provide
CombiChem a certificate evidencing payment of any Teijin Withholding Taxes
hereunder.
7.5.2 Withholding Taxes Paid by CombiChem. All amounts required
to be paid by CombiChem pursuant to this Agreement shall be paid with deduction
for withholding for or on account of any taxes (other than taxes imposed on or
measured by net income) or similar governmental charge imposed by a jurisdiction
other than Japan ("CombiChem Withholding Taxes") to the extent Teijin and/or its
Affiliates or their successors has the lawful rights to utilize the CombiChem
Withholding Taxes paid by CombiChem as a credit against Teijin's and/or its
Affiliates regular Japanese tax liability. CombiChem shall provide Teijin a
certificate evidencing payment of any CombiChem Withholding Taxes hereunder.
7.5.3 Sales Taxes. Any sales taxes, use taxes, transfer taxes or
similar governmental charges required to be paid in connection with the transfer
of the Libraries by CombiChem to Teijin shall be the sole responsibility of
Teijin. In the event that CombiChem is required to pay any such amounts, and
reasonably documents payment, Teijin shall promptly remit payment to CombiChem
of such amounts.
ARTICLE 8
DUE DILIGENCE
8.1 Due Diligence. The selection of Collaboration Compounds and Products
for development and commercialization in the Territory shall be in the sole
discretion of Teijin. Teijin shall, at Teijin's expense, be responsible for
conducting all development of Collaboration Compounds and Products in the
Territory, and all commercialization of Products in the Territory. Teijin shall
use its reasonable efforts, comparable to other internal development candidates
of comparable value, to develop and commercialize Products as expeditiously as
practicable and take such other actions as are necessary to obtain government
approvals to market each Product in the Territory (which shall include, without
limitation, the filing of an IND with respect to a Product Development Candidate
within *** of designation of such Library Compound as a Product Development
Candidate as long as Teijin does not suspend the development of such Product
Development Candidate due to a biological profile problem and thereafter to
promote each Product and meet the market demand therefor in such markets) ("Due
Diligence"). The Parties acknowledge and agree that any requirements necessary
to meet Due Diligence may be modified with the mutual written consent of the
Parties.
8.2 License Back. If (a) Teijin does not use Due Diligence pursuant to
Section 8.1 of this Agreement to actively develop and commercialize a
Collaboration Compound or Product or (b) determines that it will not
commercialize a Collaboration Compound or Product associated with a specific
molecular target and in each case so notifies CombiChem, and in each case Teijin
has not sublicensed such, then the exclusivity of Teijin's rights in the
Territory to such particular Collaboration Compound or Product associated with
such molecular target shall terminate and CombiChem shall have co-exclusive
rights in the Territory to such Collaboration Compound or Product associated
with such molecular target.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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CombiChem shall have the right to first negotiate to obtain an exclusive license
under the Teijin Technology and the Teijin Know-How, to make, use and sell such
particular Collaboration Compound or Product in the Territory.
8.3 Regulatory Filings. If the exclusivity of Teijin's rights with
respect to a Collaboration Compound or Product shall terminate under Section
8.2, Teijin shall (i) promptly provide to CombiChem a complete listing and
description of all governmental permits and health registrations and other
rights pertaining to the Product, (ii) without undue delay provide CombiChem
with access to all regulatory filings made by Teijin or its Affiliates or
Sublicensees to the extent possible with respect to such Product, together with
the underlying pre-clinical and clinical data with respect to such Product, and
(iii) (A) agree and assist CombiChem, its Affiliates or Sublicensees in
obtaining government permits and health registrations pertaining to the Product
and necessary to practice the co-exclusive or exclusive rights granted to
CombiChem by Teijin under Section 8.2 or (B) if CombiChem acquires exclusive
rights under Section 8.2 and if possible, without undue delay assign or cause to
be assigned or otherwise transferred to CombiChem or CombiChem's designee, at
CombiChem's expense, all of such government permits and health registrations and
all other rights pertaining to the Product and requested in writing by
CombiChem. The Parties shall negotiate in good faith to reach agreement
regarding sharing of costs. No non-clinical or clinical data including those for
such Collaboration Compound or Product may be submitted to the regulatory
authorities for IND or NDA applications by CombiChem, its Affiliates or
Sublicensees without agreement with Teijin on terms applicable to such
submission, including sharing of the cost of the generation of the data;
provided, that Teijin, its Affiliates or Sublicensees will provide free of
charge to CombiChem, its Affiliates and Sublicensees any information or data
required by law to be reported to the relevant regulatory authorities outside of
any drug approval process. In such event, CombiChem, its Affiliates and
Sublicensees may use and incorporate such filings and data in support of
applications for approval of such Product in the Territory, provided that such
filings and data are not those of the pivotal studies which CombiChem, its
Affiliates or Sublicensees are required to conduct if such filings and data are
not available.
ARTICLE 9
INTELLECTUAL PROPERTY
9.1 Ownership of Inventions. Title to all inventions and other
intellectual property made solely by employees of Teijin or its Affiliates, but
not CombiChem or its Affiliates, in connection with and arising out of the
Research Program ("Teijin Inventions") shall be deemed owned by Teijin. Title to
all inventions and other intellectual property made solely by employees of
CombiChem or its Affiliates, but not Teijin or its Affiliates, in connection
with and arising out of with the Research Program ("CombiChem Inventions") shall
be deemed owned by CombiChem. Subject to Section 9.2.1(c), title to all
inventions and other intellectual property made jointly by employees of Teijin
or its Affiliates and employees of CombiChem or its Affiliates in connection
with and arising out of the Research Program ("Joint Inventions") shall be
deemed jointly owned by CombiChem and Teijin.
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9.2 Patent Prosecution.
9.2.1 Responsibilities.
(a) CombiChem Inventions. Subject to Sections 9.2.2 and
9.2.3, CombiChem shall be responsible for (i) preparing, filing, prosecuting and
maintaining in such countries designated by the RC patent applications and
patents relating to all CombiChem Inventions included within the Licensed
Technology and (ii) conducting any interferences, re-examinations, reissues,
oppositions or requests for patent term extension or governmental equivalents
thereto relating to such Inventions.
(b) Teijin Inventions. Subject to Sections 9.2.2 and
9.2.3, Teijin shall be responsible for (i) preparing, filing, prosecuting and
maintaining in such countries designated by the RC patent applications and
patents relating to all Teijin Inventions included within the Teijin Technology
and (ii) conducting any interferences, re-examinations, reissues, oppositions or
requests for patent term extension or governmental equivalents thereto relating
to such Inventions.
(c) Joint Inventions. Subject to Sections 9.2.2 and 9.2.3,
each Party shall be responsible for (i) preparing, filing, prosecuting and
maintaining in their respective territories (Territory or CombiChem Territory,
as the case may be) patent applications and patents relating to all Joint
Inventions and (ii) conducting any interferences, re-examinations, reissues,
oppositions or requests for patent term extension or governmental equivalents
thereto relating to such Inventions in their respective territories (Territory
or CombiChem Territory, as the case may be). On agreement between CombiChem and
Teijin, either Party may, on behalf of the other Party, prepare, file, prosecute
and maintain patent applications and patents relating to Joint Inventions in
countries in the other Party's territory. In the event of such an agreement,
Joint Inventions for which a Party makes filings in the other Party's territory
(in the CombiChem Territory with respect to Teijin and in the Territory with
respect to CombiChem) shall continue to be jointly owned by CombiChem and Teijin
only if the non-filing Party reimburses the filing Party for all of any
reasonable costs incurred with respect to such activities, such reimbursement to
occur within a reasonable time following receipt of an invoice and verification
thereof. CombiChem and Teijin shall keep the RC informed concerning such
activities with respect to Joint Inventions in their respective territories.
9.2.2 Failure to Prosecute.
(a) CombiChem Failure. CombiChem may elect upon ninety
(90) days prior notice to discontinue prosecution of any patent applications
filed pursuant to Sections 9.2.1(a) or (c) above and/or not to file or conduct
any further activities with respect to the patent applications or patents
subject to such Sections. In the event CombiChem declines to file or having
filed fails to further prosecute or maintain any patent applications or patents
subject to Sections 9.2.1(a) or (c) above, or conduct any interferences,
re-examinations, reissues, oppositions, then, subject to CombiChem's agreements
with third parties, Teijin shall have the right to prepare, file, prosecute and
maintain such patent applications and patents in such countries worldwide (with
respect to elections under Section 9.2.1(a)) or in the CombiChem Territory (with
respect to elections under Section 9.2.1(c)) it
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deems appropriate, and conduct any interferences, re-examinations, reissues or
oppositions at its sole expense; provided, costs incurred under this Section
9.2.2(a) shall be deducted from royalties owed by Teijin to CombiChem.
(b) Teijin Failure. Teijin may elect upon ninety (90) days
prior notice to discontinue prosecution of any patent applications filed
pursuant to Sections 9.2.1(b) or (c) above and/or not to file or conduct any
further activities with respect to the patent applications or patents subject to
such Sections. In the event Teijin declines to file or having filed fails to
further prosecute or maintain any patent applications or patents subject to
Sections 9.2.1(b) or (c) above, or conduct any interferences, re-examinations,
reissues, oppositions, then, subject to Teijin's agreements with third parties,
CombiChem shall have the right to prepare, file, prosecute and maintain such
patent applications and patents in such countries worldwide (with respect to
elections under Section 9.2.1(b)) or in the Territory (with respect to elections
under Section 9.2.1(c)) it deems appropriate, and conduct any interferences,
re-examinations, reissues or oppositions at its sole expense; provided, costs
incurred under this Section 9.2.2(b) shall be deducted from royalties owed by
CombiChem to Teijin.
9.2.3 Cooperation. Each of Teijin and CombiChem shall keep the
other fully informed as to the status of patent matters described in this
Article 9, including, without limitation, by providing the other the opportunity
to fully review and comment on any documents as far in advance of filing dates
as practicable which will be filed in any patent office, and providing the other
copies of any substantive documents that such Party receives from such patent
offices promptly after receipt, including notice of all interferences, reissues,
re-examinations, oppositions or requests for patent term extensions. Teijin and
CombiChem shall each reasonably cooperate with and assist the other at its own
expense in connection with such activities, at the other Party's request.
9.2.4 Costs. Subject to Section 9.2.2, CombiChem shall pay all
costs incurred pursuant to Section 9.2.1(a) and Teijin shall pay all costs
incurred pursuant to Section 9.2.1(b).
9.2.5 Copies. Teijin shall promptly provide to CombiChem a copy
of any patent applications filed by Teijin and its Affiliates during the term of
this Agreement with respect to any Library Compound, Collaboration Compound
and/or Product, except with respect to Excluded Products. CombiChem, shall
promptly provide to Teijin a copy of any patent applications filed by CombiChem
and its Affiliates during the term of this Agreement with respect to any
Collaboration Compounds and/or Products.
9.3 Enforcement and Defense.
9.3.1 Enforcement. Each Party shall promptly notify the other of
its knowledge of any potential infringement of the Licensed Technology or the
Teijin Technology by a third party. Each Party agrees to render such reasonable
assistance as the prosecuting Party may request. Costs of maintaining any such
action and damages recovered therefrom shall be paid by and belong to the Party
bringing the action.
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(a) Teijin has the right, but not the obligation, to take
reasonable legal action necessary to protect the Licensed Technology against
infringements by third parties within the Territory. If within six (6) months
following receipt of notice of infringement, Teijin fails to take such action to
halt a commercially significant infringement within the Territory, CombiChem
shall, in its sole discretion, have the right, at its expense, to take such
action as it deems warranted in its own name or in the name of Teijin or jointly
to cease any infringement with respect to the Licensed Technology.
(b) CombiChem has the right, but not the obligation, to
take reasonable legal action necessary to protect the Teijin Technology against
infringements by third parties within the CombiChem Territory. If within six (6)
months following receipt of notice of infringement, CombiChem fails to take such
action to halt a commercially significant infringement within the CombiChem
Territory, Teijin shall, in its sole discretion, have the right, at its expense,
to take such action as it deems warranted in its own name or in the name of
CombiChem or jointly to cease any infringement with respect to the Teijin
Technology.
9.3.2 Defense. Each Party shall be solely responsible for
defending at its own expense any infringement suit brought against itself for
infringement of third party intellectual property rights (whether or not covered
by patent or other protection) by manufacturing, selling or using any Product.
ARTICLE 10
CONFIDENTIALITY
10.1 Confidential Information. Except as otherwise expressly provided
herein, the Parties agree that, for the term of this Agreement and for ten (10)
years thereafter, the receiving Party shall not, except as expressly provided in
this Article 10, disclose to any third party or use for any purpose any
confidential information furnished to it by the disclosing Party hereto pursuant
to this Agreement ("Confidential Information"), except to the extent that it can
be established by the receiving Party by competent proof that such information:
(a) was already known to the receiving Party, other than under
an obligation of confidentiality, at the time of
disclosure;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the
receiving Party;
(c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than
through any act or omission of the receiving Party in
breach of this Agreement;
(d) was independently developed by the receiving Party as
demonstrated by documented evidence prepared
contemporaneously with such independent development; or
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(e) was subsequently lawfully disclosed to the receiving Party
by a person other than a Party.
10.2 Permitted Use and Disclosures. Each Party hereto may use or
disclose information disclosed to it by the other Party to the extent such
information is included in the Licensed Technology, the Teijin Technology or the
Teijin Know-How, as the case may be, and to the extent such use or disclosure is
reasonably necessary and permitted in the exercise of such rights granted
hereunder in filing or prosecuting patent applications, prosecuting or defending
litigation, complying with applicable governmental regulations or court order or
otherwise submitting information to tax or other governmental authorities,
conducting clinical trials, or making a permitted sublicense or otherwise
exercising license rights expressly granted by the other Party to it pursuant to
the terms of this Agreement, provided that if a Party is required to make any
such disclosure of another Party's Confidential Information, other than pursuant
to a confidentiality agreement, it will give reasonable advance notice to the
other Party of such disclosure and, save to the extent inappropriate in the case
of patent applications, will use its reasonable best efforts to secure
confidential treatment of such information in consultation with the other Party
prior to its disclosure (whether through protective orders or otherwise) and
disclose only the minimum necessary to comply with such requirements.
10.3 Nondisclosure of Terms. Each of the Parties hereto agrees not to
disclose the terms of this Agreement to any third party without the prior
written consent of the other Party hereto, which consent shall not be
unreasonably withheld, except to such Party's attorneys, advisors, investors and
others on a need to know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Notwithstanding the
foregoing, the Parties shall agree upon a press release to announce the
execution of this Agreement, together with a corresponding Q&A outline for use
in responding to inquiries about the Agreement; thereafter, CombiChem and Teijin
may each disclose to third parties the information contained in such press
release and Q&A without the need for further approval by the other. In addition,
Teijin and CombiChem may make public statements regarding the progress of the
Research Program and the achievement of milestones and fees with respect
thereto, following consultation and mutual agreement, the consent of neither
Party to be unreasonably withheld.
10.4 Publication. Any manuscript by CombiChem or Teijin or its
Affiliates describing the scientific results of the Research Program to be
published at any time or within *** after the end of the Research Program Term
shall be subject to the prior review of the Parties *** prior to submission.
Further, to avoid loss of patent rights as a result of premature public
disclosure of patentable information, the receiving Party shall notify the
disclosing Party in writing within *** after receipt of any disclosure whether
the receiving Party desires to file a patent application on any invention
disclosed in such scientific results. In the event that the receiving Party
desires to file such a patent application, the disclosing Party shall withhold
publication or disclosure of such scientific results until the earlier of (i) a
patent application is filed thereon, or (ii) the Parties determine after
consultation that no patentable invention exists, or (iii) ***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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after receipt by the disclosing Party of the receiving Party's written notice of
the receiving Party's desire to file such patent application, or such other
period as is reasonable for seeking patent protection. Further, if such
scientific results contain the information of the receiving Party that is
subject to use and nondisclosure restrictions under this Article 10, the
disclosing Party agrees to remove such information from the proposed publication
or disclosure. Following the filing of any patent application with respect to
the Licensed Technology or the Teijin Technology, in the eighteen (18) month
period prior to the publication of such a patent application neither Party shall
make any public disclosure regarding any invention claimed in such patent
application without the prior consent of the other Party.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Teijin. Teijin represents and warrants on its own behalf and on
behalf of its Affiliates that: (i) it has the legal right and power to extend
the rights granted in this Agreement; (ii) it has the legal power, authority and
right to enter into this Agreement and to fully perform its obligations
hereunder; (iii) it has not previously granted, and during the term of this
Agreement will not knowingly make any commitment or grant any rights, which in
any material way conflict with the rights and licenses granted herein; (iv) to
the best of its knowledge as of the Effective Date, there are no existing or
threatened actions, suits or claims pending against it with respect to the
Teijin Technology or the Teijin Know-How; and (v) to the best of its knowledge
as of the Effective Date, neither the Teijin Technology nor the Teijin Know-How
includes intellectual property licensed from third parties that would require
CombiChem to pay to such third parties a royalty to make, have made, use and
sell Products.
11.2 CombiChem. CombiChem represents and warrants on its own behalf and
on behalf of its Affiliates that: (i) it has the legal right and power to extend
the rights granted in this Agreement; (ii) it has the legal power, authority and
right to enter into this Agreement, and to fully perform its obligations
hereunder; (iii) it has not previously granted, and during the term of this
Agreement will not knowingly make any commitment or grant any rights, which in
any material way conflict with the rights and licenses granted herein; (iv) to
the best of its knowledge as of the Effective Date, there are no existing or
threatened actions, suits or claims pending against it with respect to the
Licensed Technology; and (v) to the best of its knowledge as of the Effective
Date, the Licensed Technology does not include intellectual property licensed
from third parties that would require Teijin to pay to such third parties a
royalty to make, have made, use and sell Products.
11.3 Disclaimer. Teijin and CombiChem specifically disclaim any
guarantee that the Research Program will be successful, in whole or in part. The
failure of the Parties to successfully develop Collaboration Compounds or
Products will not constitute a breach of any representation or warranty or other
obligation under this Agreement. Neither Teijin nor CombiChem makes any
representation or warranty or guaranty that the Research Program will be
successful. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, COMBICHEM
AND TEIJIN AND THEIR RESPECTIVE AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO
THE LICENSED
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XXXXXXXXXX, XXXXXX XXXXXXXXXX, XXXXXX KNOW-HOW, LIBRARIES, *** COMPOUNDS, ***
COMPOUNDS, INFORMATION DISCLOSED PURSUANT TO ARTICLE 10 OR PRODUCTS INCLUDING,
BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, VALIDITY OF ANY LICENSED TECHNOLOGY, TEIJIN TECHNOLOGY OR TEIJIN
KNOW-HOW, PATENTED OR UNPATENTED, OR NONINFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES.
11.4 No Consequential Damages. In no event shall either Party to this
Agreement have any liability to the other for any special, consequential or
incidental damages arising under this Agreement under any theory of liability.
ARTICLE 12
INDEMNIFICATION
12.1 Teijin. Teijin agrees to indemnify, defend and hold CombiChem and
its Affiliates and their directors, officers, employees and agents (the
"CombiChem Indemnitees") harmless from and against any losses, costs, claims,
damages, liabilities or expense (including without limitation, fees and
disbursements of counsel incurred by the CombiChem Indemnitee in any action or
proceeding between Teijin and the CombiChem Indemnitee and the CombiChem
Indemnitee and any third party or otherwise) (collectively, "Liabilities")
arising out of or in connection with third party claims relating to (i) any
Products developed, manufactured, used, sold or otherwise distributed by or on
behalf of Teijin, its Affiliates, Sublicensees or other designees (including,
without limitation, product liability claims), (ii) Teijin and its Affiliates
performance of the Research Program (including, without limitation, the Teijin
chemist located at CombiChem's facility during the Research Program Term), or
(iii) any breach by Teijin of the representations and warranties made in this
Agreement, except, in each case, to the extent such Liabilities result from the
gross negligence or intentional misconduct of CombiChem.
12.2 CombiChem. CombiChem agrees to indemnify, defend and hold Teijin,
its Affiliates and Sublicensees and their respective directors, officers,
employees and agents (the "Teijin Indemnitees") harmless from and against any
losses, costs, claims, damages, liabilities or expense (including without
limitation, fees and disbursements of counsel incurred by the Teijin Indemnitee
in any action or proceeding between CombiChem and the Teijin Indemnitee and the
Teijin Indemnitee and any third party or otherwise) (collectively,
"Liabilities") arising out of or in connection with third party claims relating
to (i) any Products developed, manufactured, used, sold or otherwise distributed
by or on behalf of CombiChem, its Affiliates, Sublicensees or other designees
(including, without limitation, product liability claims), (ii) the performance
of the Research Program by CombiChem, or (iii) any breach by CombiChem of its
representations and warranties made in this Agreement, except, in each case, to
the extent such Liabilities resulted from the gross negligence or intentional
misconduct of Teijin.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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12.3 Procedure. In the event that any Indemnitee intends to claim
indemnification under this Article 12 it shall promptly notify the other Party
in writing of the alleged Liability. The indemnifying Party shall have the right
to control the defense thereof with counsel of its choice; provided, however,
that any Indemnitee shall have the right to retain its own counsel at its own
expense, for any reason, including if representation of any Indemnitee by the
counsel retained by the indemnifying Party would be inappropriate due to actual
or potential differing interests between such Indemnitee and any other Party
reasonably represented by such counsel in such proceeding. The affected
Indemnitees shall cooperate with the indemnifying Party and its legal
representatives in the investigation of any action, claim or liability covered
by this Article 12. The indemnified Party shall not, except at its own cost,
voluntarily make any payment or incur any expense with respect to any claim or
suit without the prior written consent of the indemnifying Party, which such
Party shall not be required to give.
ARTICLE 13
DISPUTE RESOLUTION
13.1 General Arbitration. Any and all disputes between the Parties
arising in connection with or relating in any way to the validity, construction,
meaning, enforceability or performance of this Agreement or any of its
provisions, or the intent of the Parties in entering into this Agreement, or (to
the extent permitted by applicable law) any dispute relating to patent validity
or infringement arising under or in connection with this Agreement, shall be
settled by final and binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA").
13.2 Arbitration Procedures.
13.2.1 Any Party electing to refer a matter to arbitration
pursuant to this Article (the "Petitioner") shall promptly notify the other
Party in writing that it wishes to commence an arbitration proceeding under this
Article 13 (the "Arbitration Notice"). The Arbitration Notice shall set forth:
(i) the matter being referred to arbitration, (ii) the applicable Section of
this Article 13 and (iii) the name of the individual selected by the Petitioner
as one of the arbitrators.
13.2.2 Except as otherwise provided in this Article 13, there
shall be three (3) arbitrators. Each Party shall select one (1) arbitrator. The
Petitioner having appointed the first arbitrator in the Arbitration Notice, the
other Party shall appoint the second arbitrator within twenty (20) days of
receipt of the Arbitration Notice and shall notify the Petitioner of such
appointment and submit its counter statement, if any, of the matter being
referred to arbitration; provided, however, that if the other Party fails to
make such appointment within such period, the Petitioner may request the AAA
President to appoint a second arbitrator. Within twenty (20) days dafter the
appointment of the second arbitrator, the two arbitrators shall appoint the
third arbitrator; provided, however, that if the two arbitrators are unable to
agree upon the third arbitrator within such period, either Party may request the
AAA President to appoint the third arbitrator, who shall have appropriate
qualifications in relation to the matter(s) in dispute.
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13.2.3 The arbitration proceedings shall be conducted in English
in Los Angeles, California, unless otherwise agreed by the Parties, in
accordance with the AAA Rules then in effect. Written evidence originally in a
language other than English shall be submitted in English translation
accompanied by the original or a true copy thereof. In any arbitration, the
award of the arbitrators shall be final and binding upon the Parties and
judgement upon the award may be entered in and enforced by any court of
competent jurisdiction in accordance with the New York Convention on the
Recognition and Enforcement of Arbitral Awards. The successful Party in such
arbitration, in addition to all other relief provided, shall be entitled to an
award of all its reasonable costs and expenses including attorney fees and
deposits and payments to the AAA. Neither Party shall be required to provide
security or post bond in respect of such costs, expenses and fees prior to
rendering of an award.
13.3 Disqualification. Notwithstanding anything to the contrary herein,
no person may serve as an arbitrator pursuant to this Article 13 if such person
has a material interest or relationship (through employment, stock ownership,
business dealings or otherwise) in or with a Party involved in the arbitration
or any of its Affiliates, directors, officers or employees; provided, however,
that serving as an arbitrator hereunder shall not constitute such a material
interest or relationship for purposes of future arbitrations.
13.4 Confidentiality. All arbitration proceedings under this Article 13
shall be confidential and the arbitrators may issue appropriate protective
orders to safeguard the Parties' Confidential Information (as such capitalized
term is defined in Section 10.1 hereof). Except as required by law, neither
Party shall make (or instruct any arbitrator to make) any public announcement
with respect to the proceedings or decisions of any arbitration without the
prior written consent of the other. The existence of any dispute submitted to
arbitration pursuant to this Article 13, and the award of the arbitrators, shall
be kept in confidence by the Parties and the arbitrators, except as required in
connection with the enforcement of such award of implementation of such
decisions, as mutually agreed by the Parties or as required by law.
13.5 Equity. This Article 13 shall not limit the rights of any Party to
seek in any court of competent jurisdiction equitable relief in the
circumstances referred to herein and/or such interim relief, and only such
interim relief, as may be needed to maintain the status quo or otherwise protect
the subject matter of the arbitration until the arbitrators shall have been
appointed and shall have had an opportunity to act.
ARTICLE 14
TERM AND TERMINATION
14.1 Term. Except as set forth below, the term of this Agreement shall
begin as of the Effective Date, and shall continue in full force and effect on a
country-by-country and Product-by-Product basis unless terminated as provided in
this Article 14 until Teijin or CombiChem, or their respective Affiliates and
Sublicensees, have no remaining royalty payment obligations in a country, at
which time the Agreement shall expire in its entirety in such country.
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14.2 Termination for Cause. Either Party to this Agreement may terminate
this Agreement in the event the other Party shall have materially breached or
defaulted in the performance of any of its material obligations hereunder, and
such default shall have continued for sixty (60) days after written notice
thereof was provided to the breaching Party by the nonbreaching Party. Any
termination shall become effective at the end of such sixty (60) day period
unless the breaching Party (or any other party on its behalf) has cured any such
breach or default prior to the expiration of the sixty (60) day; provided in the
case of a failure to pay any amount due hereunder, such default may be the basis
of termination fifteen (15) business days following the date that notice of such
default was provided to the breaching Party.
14.3 Termination for Insolvency. If voluntary or involuntary proceedings
by or against a Party are instituted in bankruptcy under any insolvency law, or
a receiver or custodian is appointed for such Party, or proceedings are
instituted by or against such Party for corporate reorganization or the
dissolution of such Party, which proceedings, if involuntary, shall not have
been dismissed within sixty (60) days after the date of filing, or if such Party
makes an assignment for the benefit of creditors, or substantially all of the
assets of such Party are seized or attached and not released within sixty (60)
days thereafter, the other Party may immediately terminate this Agreement
effective upon notice of such termination.
14.4 Effect of Breach or Termination.
14.4.1 Accrued Obligations. Termination of this Agreement for any
reason shall not release either 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 all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.
14.4.2 Return of Materials. Subject to the terms and conditions
of this Agreement, upon any termination of this Agreement, Teijin and CombiChem
shall promptly return to the other all Confidential Information (including,
without limitation, all Licensed Technology (in the case of Teijin) and all
Teijin Technology and Teijin Know-How (in the case of CombiChem)), received from
the other Party (except one copy of which may be retained for archival
purposes); provided, however, in the event licenses remain in effect pursuant to
Section 14.4.4 hereunder, the licensee under such license may retain all
Confidential Information required to practice under such license.
14.4.3 Post-Termination Product Sales. In the event of the
cancellation or termination of any license rights with respect to an Product
prior to the expiration of this Agreement, inventory of the Product may be sold
for up to six (6) months after date of termination, provided earned royalties
are paid thereon.
14.4.4 Licenses. The licenses granted to Teijin herein shall
terminate in the event of a termination by CombiChem pursuant to Section 14.2 or
14.3. The licenses granted to CombiChem shall terminate in the event of a
termination by Teijin pursuant to Section 14.2 or 14.3; provided in the event of
a termination by either Party, the licenses granted by
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the other Party shall remain in effect with respect to Licensed Technology (in
the case of termination by Teijin) and Teijin Technology and Teijin Know-How (in
the case of termination by CombiChem) existing as of the effective date of such
termination, subject to the terms and conditions of this Agreement. If more than
one Product is being commercially developed or exploited by a Party, its
Affiliates or Sublicensees hereunder and a breach entitling the other Party to
terminate this Agreement relates solely to a single Product, then the
terminating Party shall be entitled to terminate this Agreement only with
respect to the applicable Product.
14.5 Survival. Articles 6, 7, 8, 9, 10, 11, 12, 13 and 15 of this
Agreement, as well as Sections 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 5.3, 14.4 and
this Section 14.5 shall survive the expiration or termination of this Agreement
for any reason.
ARTICLE 15
MISCELLANEOUS
15.1 Governing Laws. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with, the laws of the state of California, without reference to
conflicts of laws principles.
15.2 No Implied Licenses. Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force or effect. No other
license rights shall be created by implication, estoppel or otherwise.
15.3 Waiver. It is agreed that no waiver by either Party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
15.4 Assignment. This Agreement shall not be assignable by either Party
to any third party hereto without the written consent of the other Party hereto,
except in the case of a Party to its designated Affiliate(s), provided such
Party guarantees the performance of such Affiliate(s) in a customary manner;
except either Party may assign this Agreement, without such consent, to an
entity that acquires all or substantially all of the business or assets of such
Party to which this Agreement pertains, whether by merger, reorganization,
acquisition, sale, or otherwise. This Agreement shall be binding upon and accrue
to the benefit any permitted assignee, and any such assignee shall agree to
perform the obligations of the assignor.
15.5 Independent Contractors. The relationship of the Parties hereto is
that of independent contractors. The Parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated hereby.
15.6 Compliance with Laws. In exercising their rights under this
Agreement, the Parties shall fully comply in all material respects with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights under this
Agreement including, without limitation, those
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applicable to the discovery, development, manufacture, distribution, import and
export and sale of pharmaceutical products pursuant to this Agreement.
15.7 Patent Marking. Each Party agrees to xxxx and have its Affiliates
and Sublicensees xxxx all Products sold pursuant to this Agreement in accordance
with the applicable statute or regulations relating to patent marking in the
country or countries of manufacture and sale thereof.
15.8 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or by registered or
certified mail, return receipt requested, postage prepaid, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other Parties hereto and shall be deemed to have been given upon
receipt:
CombiChem: CombiChem, Inc.
0000 Xxxxxx Xxxxx Xx
Xxx Xxxxx, Xxxxxxxxxx 00000
U.S.A.
Attn: Chief Executive Officer
Teijin: Teijin Limited
0-0, Xxxxxxxxxx-xxx 0-xxxxx
Xxxxxxx-xx, Xxxxx
Xxxxx
Attn: General Manager of the Planning Department,
Medical and Pharmaceutical Group
15.9 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision, and the Parties shall amend the Agreement to the extent
feasible to lawfully include the substance of the excluded term to as fully as
possible realize the intent of the Parties and their commercial bargain.
15.10 Force Majeure. Nonperformance of either Party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to perform
is beyond the reasonable control and not caused by the negligence, intentional
conduct or misconduct of the nonperforming Party, provided such Party uses
diligent efforts to resume performance as promptly as possible.
15.11 Complete Agreement; Amendment. This Agreement with its Exhibits
constitutes the entire agreement between the Parties with respect to the subject
matter hereof. No amendment or change hereof or addition hereto shall be
effective or binding on either of the Parties hereto unless reduced to writing
and executed by the respective duty authorized representatives of CombiChem and
Teijin.
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15.12 Headings. The captions to the several Sections 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.
15.13 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one and the same agreement.
[Remainder of This Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.
TEIJIN LIMITED COMBICHEM, INC.
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxxx Xxxxx, Xx.
----------------- ----------------------
Name: Xxxxxxx Xxxx Name: Xxxxxxx Xxxxx, Xx.
----------------- --------------------
Title: Director, Member of the Board Title: President & CEO
------------------------------ --------------------
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EXHIBIT A
Research Plan
(Outline)
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
A-1
41
EXHIBIT B
Library Compounds
Each tube will contain a minimum of *** of a Library Compound
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
B-1
42
EXHIBIT C
Initial Representatives on the Research Committee
CombiChem: Xxxx Xxxxxxxx (Chief Representative)
Xxxxxxxxx Xxxxx
Xxxxxx Xxx
Teijin: Xxxxxxxxx Xxxx (Chief Representative)
Xxxxxxx Xxxx
Atsuo Hazato
C-1
43
AMENDMENT TO THE COLLABORATION AGREEMENT
This Amendment (the "Amendment"), effective as of the date March 29,
1997 (the "Effective Date"), is made by and between CombiChem, Inc., a
California corporation, having a principal place of business at 0000 Xxxxxx
Xxxxx Xx, Xxx Xxxxx, Xxxxxxxxxx 00000, X.X.X. ("CombiChem") and Teijin Limited,
an entity organized and existing under the laws of Japan, having a principal
place of business at 0-0 Xxxxxx-xxxxxxxx 0-xxxxx, Xxxx-xx, Xxxxx 000, Xxxxx
("Teijin").
BACKGROUND
A. CombiChem and Teijin entered into the COLLABORATION AGREEMENT dated
March 29, 1996 relating to *** and the *** (hereinafter referred to as Original
Agreement); and
B. CombiChem and Teijin desire to amend the Original Agreement in order
to modify the Research Program (as defined in the Original Agreement) and to
extend the Research Program Term (as defined in the Original Agreement);
NOW THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between CombiChem
and Teijin as follows:
ARTICLE 1
CombiChem and Teijin hereby agree that the Research Program Term shall be
extended for additional one (1) year term from March 29, 1997 in accordance with
Section 2.3 of the Original Agreement.
ARTICLE 2
CombiChem and Teijin agree to modify the Original Agreement as follows:
1.25 "Library" shall mean a chemical compound library whose design has been
approved by the Research Committee (as defined below) containing:
i) for the one year period beginning March 29, 1996 approximately
*** *** prepared by CombiChem
ii) for the one year period beginning March 29, 1997, approximately
*** *** prepared by CombiChem specifically for screening the
Collaboration based on proprietary structures (a) with activity
disclosed by Teijin to CombiChem or (b) generated by CombiChem
on behalf of Teijin, in each case, in connection with the
Collaboration.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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44
1.29 Section 1.29 will be amended so reflect the following:
"*** Activity" shall mean *** and *** as an *** *** that may contain ***
of the *** *** *** .
2.1.1 (a) During the Research Program Term, CombiChem shall synthesize
libraries as follows:
i) for the one year period beginning March 29, 1996, *** libraries
ii) for the one year period beginning March 29, 1997, *** libraries
6.2 Section 6.2 will be amended to reflect the following:
Contact Year Aggregate Annual Research Fee
2 ***
(for the one year period beginning March 29, 1997)
EXHIBIT A Exhibit A attached to the Original Agreement will be
supplemented with the attached Exhibit A-2 for one year period
beginning March 29, 1997.
EXHIBIT B Exhibit B attached to the Original Agreement will be
supplemented with the attached Exhibit B-2 for one year period
beginning March 29, 1997.
EXHIBIT C Exhibit C attached to the Original Agreement will be
supplemented with the attached Exhibit C-2 for one year period
beginning March 29, 1997.
ARTICLE 3
This Amendment shall be effective as of the Effective Date.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.
TEIJIN LIMITED COMBICHEM, INC.
By: /s/ Tatsuyuki Naruchi By:/s/ Xxxxxxx Xxxxx, Xx.
-------------------------- -----------------------
Name: Tatsuyuki Naruchi Name: Xxxxxxx Xxxxx, Xx.
Title: Managing Director, General Manager Title: President & C.E.O.
Planning & Research Division
Medical & Pharmaceutical Group
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EXHIBIT A-2
Research Plan (Outline)#
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
47
EXHIBIT B-2
LIBRARY COMPOUNDS
Each tube will contain a minimum of *** of a Library Compound.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
48
EXHIBIT C-2
Representatives on the Research Committee
Teijin: Xxxxxxxxx Xxxx (Chief Representative)
Xxxxxxx Xxxx
Atsuo Hazato
CombiChem: Xxxxxxxxx Xxxxx (Chief Representative)
Xxxx Xxxxxxxx
