1
EXHIBIT 10.33
CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
AMENDED AND RESTATED
LICENSE AGREEMENT
between
TRANSKARYOTIC THERAPIES, INC.
and
XXXXXX XXXXXXX DOW INC.
dated as of March 1, 1995
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.................................................... 1
1.1. "Affiliate".................................................. 1
1.2. "Customer"................................................... 2
1.3. "Development Committee"...................................... 2
1.4. "Development Phase" ......................................... 2
1.5. "Effective Date"............................................. 2
1.6. "ELA"........................................................ 2
1.7. "GA-EPO"..................................................... 2
1.8. "First Commercial Sale"...................................... 2
1.9. "FDA"........................................................ 2
1.10. "Fully Absorbed Costs"....................................... 2
1.11. "Gross Margin"............................................... 3
1.12. "IND"........................................................ 3
1.13. "MMD Territory".............................................. 3
1.14. "Manufacturing Know-How"..................................... 3
1.15. "Net Revenues"............................................... 3
1.16. "Net Sales".................................................. 3
1.17. "PLA"........................................................ 4
1.18. "Program".................................................... 5
1.19. "R&D Oversight Committee".................................... 5
1.20. "Research Phase"............................................. 5
1.21. "Research Program"........................................... 5
1.22. "Third Party"................................................ 5
1.23. "TKT Patent Rights".......................................... 5
1.24. "TKT Technology"............................................. 5
ARTICLE 2. SCOPE AND STRUCTURE............................................ 6
2.1. General...................................................... 6
2.2. Relationship of TKT and MMD.................................. 6
2.3. Commercialization of *******************..................... 6
2.3.1. Exclusive Rights to ******
Collaborations Prior to the ******
Anniversary of this Agreement...................... 6
2.3.2. ****** Collaborations After the ******
Anniversary and Prior to the *****
Anniversary of this Agreement...................... 6
2.3.3. ****** Collaborations Following the
***** Anniversary of this Agreement................ 7
2.3.4. Payments........................................... 7
2.3.5. Termination of Rights.............................. 7
2.3.6. Refund of Payments................................. 8
ARTICLE 3. LICENSE GRANTS; MANUFACTURING AND MARKETING
RIGHTS............................................................... 8
3.1. Grant of License Rights by TKT to MMD........................ 8
3.1.1. Exclusive GA-EPO License........................... 8
3.1.2. Sublicenses of GA-EPO.............................. 8
3.1.3. Exclusive Manufacturing Know-How
License............................................ 8
(i)
3
3.1.4. Sublicenses of Manufacturing Know-How.............. 9
3.2. Grant of License Rights by MMD to TKT........................ 9
3.3. Reservation of Rights........................................ 9
3.3.1. TKT Reservation.................................... 9
3.3.2. MMD Reservation.................................... 9
3.3.3. Manufacture of GA-EPO.............................. 10
ARTICLE 4. THE RESEARCH PHASE............................................. 10
4.1. Conduct of the Research Program.............................. 10
4.1.1. General............................................ 10
4.1.2. Research Plan...................................... 10
4.1.3. Subcontracts....................................... 10
4.1.4. Data............................................... 10
4.1.5. Quarterly Reports by TKT........................... 11
4.1.6. Assistance by MMD.................................. 11
4.2. Funding of the Research Program.............................. 11
4.3. Term of the Research Phase................................... 11
4.3.1. Completion of the Research Phase................... 11
4.3.2. Term of the Research Phase......................... 12
ARTICLE 5. THE DEVELOPMENT PHASE.......................................... 12
5.1. Conduct of the Development Phase............................. 12
5.1.1. Commencement of the Development Phase.............. 12
5.1.2. Development Phase.................................. 12
5.1.3. Annual Development Plan............................ 13
5.1.4. Adjustment of Development Phase
Milestones......................................... 13
5.1.5. Attendance at Regulatory Meetings.................. 13
5.2. Funding of the Development Phase............................. 13
5.3. Development Information...................................... 13
5.3.1. Information for Regulatory Submissions............. 13
5.3.2. Reports to Development Committee................... 14
5.3.3. Regulatory Submissions. .......................... 14
5.3.4. Adverse Event Information.......................... 14
5.4. Certain Prohibited Actions................................... 14
5.5. Development Phase Manufacturing.............................. 14
5.6. Manufacturing Costs.......................................... 14
5.7. Assistance by TKT............................................ 15
5.8. Regulatory Matters and Commercialization..................... 15
5.8.1. Commercialization.................................. 15
5.8.2. Marketing Plans.................................... 15
5.8.3. Co-Development, Co-Promotion and Co-
Marketing.......................................... 15
ARTICLE 6. RESEARCH, DEVELOPMENT AND REGULATORY
COORDINATION......................................................... 16
6.1. R&D Oversight Committee...................................... 16
6.1.1. General............................................ 16
6.1.2. Minutes............................................ 17
6.2. Development Committee........................................ 17
6.2.1. General............................................ 17
6.2.2. Minutes............................................ 17
(ii)
4
6.3. General Disagreements........................................ 17
6.4. Visit of Facilities.......................................... 18
6.5. Annual Review and Planning Meeting........................... 18
ARTICLE 7. MILESTONES AND ROYALTIES....................................... 18
7.1. Milestone Payments........................................... 18
7.2. Royalties.................................................... 19
7.2.1. Royalties Based on Net Sales of GA-EPO............. 20
7.2.2. Alternative Royalty Based on Gross
Margin............................................. 20
7.2.3. Sharing of Revenues From Sublicensees.............. 20
7.2.4. Adjustment of Royalty Rates........................ 20
7.3. Royalty Reports, Exchange Rates.............................. 21
7.4. Audits....................................................... 22
7.4.1. Procedure.......................................... 22
7.4.2. Expenses........................................... 22
7.4.3. Sublicenses........................................ 22
7.4.4. Confidential Treatment............................. 22
7.5. Royalty Payment Terms........................................ 22
7.6. Form of Payment.............................................. 23
7.7. Withholding Taxes............................................ 23
7.8. Interest on Late Payments.................................... 23
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS................................... 23
8.1. Ownership.................................................... 23
8.1.1. Ownership of Discoveries and
Improvements....................................... 23
8.1.2. Cooperation of Employees........................... 24
8.2. Filing, Prosecution and Maintenance of TKT Patent
Rights and TKT Technology.................................... 24
8.2.1. Filing, Prosecution and Maintenance................ 24
8.2.2. Patent Filing Costs................................ 25
8.3. Cooperation.................................................. 25
8.4. Notification of Patent Term Restoration...................... 25
8.5. No Other Technology Rights................................... 26
8.6. Enforcement of TKT Patent Rights and TKT
Technology; Defense of Infringement Actions.................. 26
8.6.1. MMD's First Right to Respond....................... 26
8.6.2. No Adverse Settlement Without TKT
Consent............................................ 26
8.6.3. Sharing of Litigation and Settlement
Expenses........................................... 26
8.6.4. TKT's Second Right to Respond. ................... 27
8.6.5. TKT's Second Right to Defend
Infringement Actions; Payment of
Royalties by TKT................................... 27
8.7. Costs of Acquiring Additional Technology other
than Manufacturing Know-How.................................. 28
ARTICLE 9. CONFIDENTIALITY................................................ 28
9.1. Nondisclosure Obligations.................................... 28
9.1.1. General............................................ 28
(iii)
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
9.1.2. Limitations........................................ 28
9.2. Materials.................................................... 29
9.2.1. ******************************..................... 29
9.2.2. Samples............................................ 29
9.3. Terms of this Agreement...................................... 29
9.4. Publications................................................. 30
9.4.1. Procedure.......................................... 30
9.4.2. Delay.............................................. 30
9.4.3. Resolution......................................... 30
9.5. Injunctive Relief............................................ 30
ARTICLE 10. REPRESENTATIONS AND WARRANTIES................................ 30
10.1. General...................................................... 30
10.1.1. Authorization....................................... 30
10.1.2. No Inconsistent TKT Arrangements.................... 30
10.1.3. Exclusivity......................................... 31
10.1.4. Licensed Technology................................. 31
10.2. Patent Validity.............................................. 31
10.2.1. Title............................................... 31
10.2.2. No Encumbrances..................................... 31
10.2.3. Non-Infringement.................................... 31
10.3. Financial Statements......................................... 31
ARTICLE 11. INDEMNITY..................................................... 32
11.1. MMD Indemnity Obligations.................................... 32
11.2. TKT Indemnity Obligations.................................... 32
11.3. Procedure.................................................... 32
11.4. Insurance.................................................... 33
ARTICLE 12. TERM AND TERMINATION.......................................... 33
12.1. Expiration................................................... 33
12.2. Termination.................................................. 33
12.3. Effect of Termination........................................ 34
ARTICLE 13. MISCELLANEOUS................................................. 35
13.1. Force Majeure................................................ 35
13.2. Assignment................................................... 35
13.3. Severability................................................. 35
13.4. Notices...................................................... 36
13.5. Applicable Law............................................... 37
13.6. Dispute Resolution........................................... 37
13.7. Entire Agreement............................................. 37
13.8. Headings..................................................... 38
13.9. Independent Contractors...................................... 38
13.10. Agreement Not to Solicit Employees............................ 38
13.11. Exports....................................................... 38
13.12. Waiver........................................................ 38
13.13. Counterparts.................................................. 38
(iv)
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
AMENDED AND RESTATED LICENSE AGREEMENT
THIS AMENDED AND RESTATED LICENSE AGREEMENT dated as of March 1, 1995 (the
"Agreement") is made between TRANSKARYOTIC THERAPIES, INC., a Delaware
corporation having its principal place of business at 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("TKT"), and XXXXXX XXXXXXX DOW INC., a Delaware
corporation having its principal place of business at 0000 Xxxx Xxxxxxx, Xxxxxx
Xxxx, Xxxxxxxx 00000-0000 ("MMD").
R E C I T A L S
WHEREAS, TKT has filed patent applications necessary to exploit
discoveries relating to the expression of gene-activated erythropoietin protein
in eukaryotic cells and possesses certain related know-how and expertise.
WHEREAS, MMD desires to license TKT's patent rights and certain related
know-how and expertise relating to gene-activated erythropoietin protein and
obtain TKT's assistance for development of such discoveries.
WHEREAS, TKT and MMD previously entered into that certain License
Agreement dated as of May 18, 1994 (the "Original License Agreement") regarding
gene-activated erythropoietin protein and now desire to amend and restate the
Original License Agreement in its entirety as follows.
NOW THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto mutually agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below:
1.1. "Affiliate" shall mean any corporation or other entity which
controls, is controlled by, or is under common control with a party to this
Agreement. A corporation or other entity shall be regarded as in control of
another corporation or entity if it owns or directly or indirectly controls more
than fifty percent (50%) of the voting stock or other ownership interest of the
other corporation or entity, or if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint fifty percent (50%)
or more of the members of the governing body of the corporation or other entity.
Notwithstanding the foregoing, the Dow Chemical Company shall not be considered
an Affiliate of MMD for purposes of this Agreement.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
1.2. "Customer" shall have the meaning set forth in Section 1.15.
1.3. "Development Committee" shall mean the joint committee composed of
representatives of TKT and MMD described in Section 6.2 of this Agreement.
1.4. "Development Phase" shall mean the second phase of the Program, which
shall commence **********************************
***********************************************************
*********************************************************
****************************** covered by the TKT Patent Rights or which uses
the TKT Technology and the preparation and filing of supporting regulatory
submissions until, with respect to each country in the MMD Territory, final
marketing approval for GA-EPO covered by the TKT Patent Rights or which uses the
TKT Technology is obtained in such country.
1.5. "Effective Date" shall mean May 18, 1994.
1.6. "ELA" shall mean the Establishment License Application filed with the
FDA to obtain approval of the facility to be used to manufacture GA-EPO covered
by the TKT Patent Rights or which uses the TKT Technology for sale in the United
States or any comparable application filed with the regulatory authorities of a
country other than the United States to obtain approval of production facilities
to be used to manufacture GA-EPO covered by the TKT Patent Rights or which uses
the TKT Technology for sale in such country.
1.7. "GA-EPO" shall mean all pharmaceutical and other formulations of
gene-activated erythropoietin protein, including all injectable and orally
available formulations, line extensions, combination products, delivery systems,
and dosage forms related thereto, but excluding **************************
************
1.8. "First Commercial Sale" of GA-EPO covered by the TKT Patent Rights or
which uses the TKT Technology shall mean the first sale for use or consumption
by the general public of GA-EPO covered by the TKT Patent Rights or which uses
the TKT Technology in a country in the MMD Territory after required marketing
and pricing approval has been granted by the governing health authority of such
country.
1.9. "FDA" shall mean the United States Food and Drug Administration.
1.10. "Fully Absorbed Costs" shall mean the direct variable and direct
fixed costs associated with the conduct of the Research Phase or the Development
Phase. Direct variable costs shall be deemed to be the cost of labor, raw
materials, supplies and other resources directly consumed in the conduct of the
Research Phase or the Development Phase. Direct fixed costs shall be deemed to
be the cost of utilities, insurance, equipment
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
depreciation and other fixed costs directly related to the conduct of the
Research Phase or the Development Phase. Fixed costs shall be allocated based
upon the proportion of such costs directly attributable to support of the
Research Phase or the Development Phase. All cost determinations made hereunder
shall be made in accordance with generally accepted accounting principles
consistently applied.
1.11. "Gross Margin" with respect to GA-EPO covered by the TKT Patent
Rights or which uses the TKT Technology shall mean Net Revenues from sales of
such GA-EPO less the cost of goods sold of MMD or its Affiliates for such
GA-EPO, determined in accordance with generally accepted accounting principles
consistently applied for all products manufactured by MMD.
1.12. "IND" shall mean an investigational new drug application filed with
the FDA prior to beginning clinical trials in humans or any comparable
application filed with the regulatory authorities of a country other than the
United States prior to beginning clinical trials in humans in that country, with
respect to GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology.
1.13. "MMD Territory" shall mean all of the countries in the world, which
shall be divided into the following groupings of countries:
**************************************************
*******************************************************
**************************************************************
************************************************************
***************************************************************
*********************************************************
*****************************************************************
**************************************************************
****************************************************************
*********************************************************** *****. Each of the
foregoing groupings of countries is referred to as a "Territory Block."
1.14. "Manufacturing Know-How" shall mean all inventions, discoveries,
improvements and other technology, whether or not patentable or copyrightable,
and any patent applications, patents or copyrights based thereon, relating to or
necessary or useful for the production and packaging of GA-EPO covered by the
TKT Patent Rights or which uses the TKT Technology.
1.15. "Net Revenues" with respect to GA-EPO covered by the TKT Patent
Rights or which uses the TKT Technology shall mean the invoiced amount billed by
MMD or its Affiliates for GA-EPO finished product in final packing form (whether
or not with final labels) to any MMD distributors or sublicensees which are not
Affiliates, including any royalties due to MMD or its Affiliates with respect to
such sales, less, whether or not such costs are invoiced separately to such
person or entity, the costs
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
identified in clauses (a) through (d) of subsection 1.16. The definitions of
Bundled Product and Combination Product set forth in subsection 1.16. shall also
apply to such sales mutatis mutandis.
1.16. "Net Sales" with respect to GA-EPO covered by the TKT Patent Rights
or which uses the TKT Technology shall mean the invoiced amount billed for
GA-EPO finished product in final packing form to the first Third Party trade
purchaser (a "Trade Customer") by MMD or its Affiliates or any MMD distributors
which are not Affiliates, or, to the extent permitted in subsection 3.1.2, by
permitted sublicensees of MMD (it being understood that wholesalers which are
not Affiliates of MMD shall be considered Third Party trade purchasers), less,
whether or not such costs are invoiced separately to such Trade Customer, (a)
amounts refunded or credited for GA-EPO which was rejected, spoiled, damaged,
out-dated or returned, (b) freight, shipment and insurance costs incurred in
transporting GA-EPO to such customers, (c) quantity, trade, cash, and other
discounts, rebates (including, without limitation, pursuant to governmental
regulation), chargebacks, retroactive price reductions, credits or allowances
allowed or taken (subject to post-period adjustment if allowed but not taken
within three months of the end of the calendar year in which such credit or
allowance is allowed), and (d) taxes, tariffs, customs duties and surcharges and
other governmental charges incurred in connection with the sale, exportation or
importation of GA-EPO. The transfer of GA-EPO by MMD or one of its Affiliates to
another Affiliate of MMD shall not be considered a sale; in such cases, Net
Sales shall be determined based on the invoiced sales price by the Affiliate to
the Trade Customer, less the deductions allowed under this Section . MMD shall
be deemed to have sold a "Bundled Product" if GA-EPO finished product is sold by
MMD pursuant to an agreement with a Trade Customer specifying, for a combination
of products or services, (i) a single price, (ii) other terms of purchase not
separately identifying either a price per product or the effective deductions
referred to above per product or (iii) a price for units of GA-EPO which is
discounted below MMD's standard invoice price per unit of GA-EPO by at least
five percentage points more than the amount that any other product or service in
the Bundled Product is discounted below such other product's or service's
standard invoice price. In order to calculate the Net Sales of GA-EPO included
in a Bundled Product (a) in the case of the foregoing clauses (i) and (ii), the
total Net Sales of the Bundled Product shall be multiplied by a fraction, the
numerator of which shall be ******************
*****************************************************************
************************* and the denominator of which shall be
***************************************************************
***********************************************************
***********************************************************
**************************************************************** and (b) in the
case of the foregoing clause (iii), the parties will determine whether an
adjustment to Net Sales is appropriate and, if so, a mutually agreeable method
of calculation. If GA-
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
EPO is formulated by MMD with one or more different active biological or
chemical ingredients and such formulation is sold in finished product form, then
MMD shall be deemed to have sold a "Combination Product." In order to calculate
the Net Sales of GA-EPO included in a Combination Product, the total invoice
price for the Combination Product shall be multiplied by a fraction, the
numerator of which shall be ********************************
*********************************************************
***********************************************, and the denominator of which
shall be **********************************
***************************************************************
**********************************************************
***************************************************************
********************. If it is not possible to determine the standard invoice
price for an active ingredient of the Combination Product, then the standard
invoice price for such individual active ingredient shall be the fully allocated
cost of manufacture therefor determined in accordance with standard cost
accounting principles, as adjusted to reflect MMD's standard profit margin for
like products. The amount of Net Sales for any period shall be determined on the
basis of sales recorded in the ordinary course on the books and records of MMD
(or any Affiliate of MMD) during such period in accordance with Generally
Accepted Accounting Principles and with past practice, without reference to the
effects of any subsequent audit adjustments which result in any of such sales
being recognized by MMD in another period.
1.17. "PLA" shall mean a product license application filed with the FDA
after completion of human clinical trials to obtain marketing approval for
GA-EPO covered by the TKT Patent Rights or which uses the TKT Technology in the
United States or any comparable application filed with the regulatory
authorities of a country other than the United States to obtain marketing
approval for GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology in that country.
1.18. "Program" shall mean the collaboration by TKT and MMD described in
this Agreement.
1.19. "R&D Oversight Committee" shall mean the joint committee composed of
representatives of TKT and MMD described in Section 6.1 of this Agreement.
1.20. "Research Phase" shall mean the first stage of the Program
commencing on the Effective Date, *******************
***********************************************************
***************************************************************
********************* The Research Phase is more fully described in Article 4.
1.21. "Research Program" shall mean the GA-EPO research program described
in Section 4.1 of this Agreement.
1.22. "Third Party" shall mean any entity other than TKT or MMD and their
respective Affiliates.
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1.23. "TKT Patent Rights" shall mean all present and, at MMD's election,
future patents, patent applications, patent extensions, certificates of
invention, or applications for certificates of invention, together with any
divisions, continuations or continuations-in-part thereof, which are owned or
controlled by TKT relating to or necessary or useful for the manufacture, use,
distribution or sale of GA-EPO, including without limitation those specified on
Schedule 1.23 hereto.
1.24. "TKT Technology" shall mean all present and future inventions, trade
secrets, copyrights, know-how, data, regulatory submissions and other
intellectual property of any kind (including any proprietary biological
materials, compounds or reagents but not including TKT Patent Rights) which are
owned or controlled by, or licensed ( with the right to sublicense) to, TKT
relating to or necessary or useful for the manufacture, use, distribution or
sale of GA-EPO, including but not limited to any patents or patent applications
licensed from Third Parties. With respect to TKT Technology which has been
licensed to TKT by a Third Party, (i) MMD agrees to assume and pay for its
portion of any costs, expenses, fees or royalties associated with its use of
sublicense rights relating to such licensed TKT Technology to the extent
described in Section 8.7, and (ii) if TKT does not currently have the right to
sublicense such intellectual property to MMD hereunder, such license is listed
on Schedule 1.24 hereto and TKT shall use commercially reasonable efforts to
obtain the right to sublicense such intellectual property (as well as any
intellectual property licensed to TKT hereafter which is included in the TKT
Technology), to MMD hereunder.
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ARTICLE 2. SCOPE AND STRUCTURE
2.1. General. TKT and MMD wish to establish an agreement with respect to
GA-EPO. During the course of the Program, TKT and MMD shall communicate
regularly and shall assume different rights and responsibilities, all as more
specifically described herein.
2.2. Relationship of TKT and MMD. During the term of this Agreement,
neither TKT or MMD, nor any of their Affiliates shall independently, or with a
Third Party, conduct research regarding, or engage in the development,
manufacture, marketing or sale of, pharmaceutical formulations of erythropoietin
protein, other than as part of the Program, except that either TKT or MMD may
develop, manufacture, market, distribute or sell "generic" or "non-branded"
pharmaceutical formulations of erythropoietin protein in any country if (i)
there are imminent Third Party sales of "generic" erythropoietin protein in such
country and (ii) GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology may not lawfully be substituted in such country as a "generic"
equivalent product for any prescription for a branded or "generic" form of
erythropoietin protein with respect to which sales by such Third Party are
imminent.
2.3. Commercialization of *******************.
TKT agrees that it shall not develop, manufacture, promote or
market ********************************** using ********************** with any
Third Party (a "****** Collaboration") except pursuant to this Section 2.3;
provided, however, that nothing in this Section 2.3. shall prohibit TKT from
retaining subcontractors to assist it in its own **** ******* development and
manufacturing efforts.
2.3.1. Exclusive Rights to ****** Collaborations Prior to the
****** Anniversary of this Agreement. Prior to the ****** anniversary of the
date hereof, TKT shall not enter into any agreement regarding a ******
Collaboration.
2.3.2. ****** Collaborations After the ****** Anniversary and
Prior to the ***** Anniversary of this Agreement. Except as provided for in
subsection 2.3.5 below, during the period from the ****** to the *****
anniversary of the date hereof, TKT shall not enter into any agreement regarding
a ****** Collaboration without complying with the provisions of this subsection
2.3.2.
2.3.2.1. Notice of Negotiations. Prior to the *****
anniversary of this Agreement, TKT shall promptly notify MMD if it enters into
any negotiations regarding a ****** Collaboration.
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
2.3.2.2. ****** Collaboration Notice. Prior to entering into
any agreement regarding a ****** Collaboration, TKT shall deliver a written
notice (the "Collaboration Notice") to MMD disclosing in reasonable detail the
terms and conditions of the proposed ****** Collaboration.
2.3.2.3. Right of First Refusal. MMD shall have the right (the
"First Refusal Right") at any time within ****** **** days after receipt of the
Collaboration Notice to accept the terms thereof, in which event the parties
shall use their best efforts to enter into an agreement, within ** days after
such acceptance, regarding a ****** Collaboration upon the terms specified in
the Collaboration Notice. If MMD does not exercise the First Refusal Right then
TKT shall be free, for a period of *** days from the expiration of such ** days,
to enter into an agreement regarding a ****** Collaboration upon the terms and
with the Third Party specified in the Collaboration Notice. Following the ***
day period specified in the preceding sentence, TKT shall not enter into an
agreement regarding a ****** Collaboration without complying with the terms of
this subsection 2.3.2.
2.3.3. ****** Collaborations Following the ***** Anniversary of this
Agreement. Following the ***** anniversary of the date of this Agreement, or any
earlier termination of MMD's rights under this Section pursuant to subsection
2.3.5, TKT shall be under no obligation to enter into a ****** Collaboration
with MMD but shall promptly notify MMD if it enters into negotiations for a
****** Collaboration.
2.3.4. Payments. In consideration of the obligations of TKT pursuant
to this Section 2.3.1, MMD shall pay to TKT the following amounts every
********** following the date of this Agreement (with the first payment due on
the date hereof):
Anniversary Amount
----------- ------
*********** $************
********** $************
************* $************
*************** $************
****************** $************
************* $************
***************** $************
**************** $************
****************** $************
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***************** $************
2.3.5. Termination of Rights. MMD's rights under subsection 2.3.2
shall expire on the ***** anniversary of this Agreement. MMD may voluntarily
terminate its rights under subsection 2.3.2 at any time prior to the
************** anniversary of the date hereof by delivery of written notice to
TKT accompanied by $******* less any payments previously made to TKT under
subsection 2.3.4. MMD may voluntarily terminate its rights under subsection
2.3.2 at any time on or after the ************** anniversary of the date hereof
by delivery of written notice to TKT accompanied by all payments under
subsection 2.3.4. which would become due within the ********** following the
delivery of such written notice. In either event, such termination shall become
effective at the end of the period with respect to which payments have been made
under subsection 2.3.4. Except as provided in subsection 2.3.6, no payments made
by MMD pursuant to subsection 2.3.4 shall be refunded.
2.3.6. Refund of Payments. If (i) TKT enters into any agreement
regarding a ****** Collaboration with a Third Party at any time within the
******** period following the second anniversary of this Agreement or (ii) MMD
expresses its interest in entering into a ****** Collaboration with TKT at any
time prior to the ***** anniversary of this Agreement, MMD and TKT enter into
good faith negotiations regarding such a ****** Collaboration and fail to agree
upon mutually satisfactory terms and thereafter TKT successfully develops a
******************** ********** using **********************, then TKT shall
refund to MMD all payments made by MMD pursuant to subsection 2.3.4. upon the
consummation of such a ****** Collaboration or the market introduction of TKT's
own ***********************************
******************.
ARTICLE 3. LICENSE GRANTS; MANUFACTURING AND MARKETING RIGHTS
3.1. Grant of License Rights by TKT to MMD.
3.1.1. Exclusive GA-EPO License. TKT hereby grants to MMD the
worldwide, perpetual, and exclusive right and license under the TKT Patent
Rights and the TKT Technology to develop, make, have made, use, distribute for
sale and sell GA-EPO.
3.1.2. Sublicenses of GA-EPO. MMD shall have the right to grant
sublicenses under the TKT Patent Rights and the TKT Technology license granted
by TKT to MMD under subsection 3.1.1 to Affiliates of MMD and, with the written
consent of TKT, which shall not be unreasonably withheld, to entities which are
not Affiliates of MMD. In connection with such sublicense, MMD may provide that
the sublicensee shall pay directly to TKT any amounts which may become due in
accordance with Section 7.2, provided, however, that MMD shall in any event
remain liable for the payment of all such amounts notwithstanding any such
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15
provision between MMD and its sublicensee. Upon TKT's request, and to the extent
that MMD is not contractually prohibited from doing so, MMD will provide a copy
of such sublicenses to TKT.
3.1.3. Exclusive Manufacturing Know-How License. TKT hereby grants
to MMD a worldwide, perpetual, and exclusive and, except as provided below,
fully paid-up and royalty-free right and license under Manufacturing Know-How
owned or controlled by, or licensed (subject to the provisions of this
subsection 3.1.3, with the right to sublicense) to, TKT to make or have made
GA-EPO covered by the TKT Patent Rights or which uses the TKT Technology. With
respect to Manufacturing Know-How which has been licensed to TKT by a Third
Party, (i) MMD agrees to assume and pay for any costs, expenses, fees or
royalties associated with its sublicense of such Manufacturing Know-How, and
(ii) if TKT does not currently have the right to sublicense such intellectual
property to MMD hereunder, such license is listed on Schedule 3.1.3 hereto and
TKT shall use commercially reasonable efforts to obtain the right to sublicense
such intellectual property (as well as any intellectual property licensed to TKT
hereafter which is included in the Manufacturing Know-How) to MMD hereunder for
such limited purposes.
3.1.4. Sublicenses of Manufacturing Know-How. MMD shall have the
right to grant sublicenses under the Manufacturing Know-How license granted by
TKT to MMD under subsection 3.1.3 to Affiliates of MMD and, with the written
consent of TKT, which shall not be unreasonably withheld, to entities which are
not Affiliates of MMD. MMD will provide a copy of such sublicenses to TKT.
3.2. Grant of License Rights by MMD to TKT. Subject to the last sentence
of this Section 3.2, upon the request of TKT, (i) MMD shall grant to TKT a
worldwide, perpetual, non-exclusive and fully paid-up and royalty-free right and
license, with the right to sublicense, under Manufacturing Know-How owned or
controlled by, or licensed (subject to the provisions of this Section 3.2, with
the right to sublicense) to MMD which is developed by a Third Party contract
manufacturer engaged by MMD and working with or receiving assistance from TKT,
to make or have made products (other than pharmaceutical formulations of
erythropoietin protein) worldwide which are not competitive with GA-EPO, and
(ii) MMD shall negotiate in good faith with TKT the terms of a license, with the
right to sublicense, which shall be on reasonable commercial terms, under
Manufacturing Know-How owned or controlled by, or licensed (subject to the
provisions of this Section 3.2, with the right to sublicense) to MMD to make or
have made products (other than pharmaceutical formulations of erythropoietin
protein) worldwide which are not competitive with GA-EPO. With respect to
Manufacturing Know-How described above which has been licensed to MMD by a Third
Party, (i) TKT agrees to assume and pay for any costs, expenses, fees or
royalties associated with its sublicense of such Manufacturing Know-How, and
(ii) if MMD does not have the right to sublicense such intellectual property to
TKT hereunder, MMD shall use
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commercially reasonable efforts, as determined in good faith by MMD, to obtain
the right to sublicense such intellectual property to TKT hereunder for such
limited purposes.
3.3. Reservation of Rights.
3.3.1. TKT Reservation. Notwithstanding the license grants set
forth above, and subject to the provisions of Section 5.4 hereof, TKT at all
times reserves the right under the TKT Patent Rights, TKT Technology, and
Manufacturing Know-How owned either exclusively by TKT or jointly with MMD (i)
to make, have made and use GA-EPO for research and development uses as part of
the Program and (ii) subject, with respect to Manufacturing Know- How owned
jointly by TKT and MMD, to the consent of MMD, which consent shall not be
unreasonably withheld, to make, have made, use, sublicense, distribute for sale
and sell products other than GA-EPO.
3.3.2. MMD Reservation. Notwithstanding the license grants set
forth above, MMD at all times reserves the right under Manufacturing Know-How
owned either exclusively by MMD or jointly with TKT (i) to make, have made and
use GA-EPO for research and development uses as part of the Program, (ii) to
make, have made, use, sublicense, distribute for sale and sell GA-EPO and (iii)
subject, with respect to Manufacturing Know-How owned jointly by TKT and MMD, to
the consent of TKT, which consent shall not be unreasonably withheld, to make,
have made, use, sublicense, distribute for sale and sell products other than
GA-EPO.
3.3.3. Manufacture of GA-EPO. Notwithstanding anything else
contained in this Agreement, MMD shall have the right to make or have made
GA-EPO in any country in the world for use, distribution for sale or sale by
itself, its Affiliates or its permitted licensees or sublicensees in the
territories allocated to it under this Agreement.
ARTICLE 4. THE RESEARCH PHASE
4.1. Conduct of the Research Program.
4.1.1. General. The conduct of the Research Program shall be the
primary responsibility of TKT and shall take place primarily at TKT's facilities
in Cambridge, Massachusetts. The Research Program shall be conducted in good
scientific manner, and in compliance with all applicable good laboratory
practices and applicable legal requirements to achieve efficiently and
expeditiously its objectives. TKT shall proceed diligently with the work set out
in the Research Program using its best efforts using commercially reasonable
means consistent with those used by TKT for other projects with a similar
commercial potential.
4.1.2. Research Plan. The Research Program shall be conducted under
a research plan which describes the work to be pursued by TKT during the
Research Phase and which has been
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approved by the R&D Oversight Committee prior to the date hereof. If at any time
during the Research Phase, TKT or MMD determine that a significant change to the
research plan is necessary or desirable, it shall prepare a written description
detailing the change to the research plan and shall submit such description to
the R&D Oversight Committee for its approval. An outline of the research plan is
attached to the Original License Agreement and describes the work to be pursued
during the Research Phase, including: (i) identifying the technical problems
involved and the general projects to be carried out regarding GA-EPO, (ii)
estimating the personnel to be committed for each project, and (iii) setting
forth a projected timetable for the work to be performed.
4.1.3. Subcontracts. Subject to the approval of the R&D Oversight
Committee and the provisions of Article 9, TKT may subcontract portions of the
Research Program to be performed by it in the normal course of its business to a
Third Party.
4.1.4. Data. TKT shall maintain records in sufficient detail and in
good scientific manner appropriate for regulatory filings and patent purposes
and as will properly reflect all work done and results achieved in the
performance of the Research Program (including all data in the form required to
be maintained under any applicable governmental regulations). Such records shall
include books, records, reports, research notes, charts, graphs, comments,
computations, analyses, recordings, photographs, computer programs and
documentation thereof, computer information storage means, samples of materials
and other graphic or written data generated in connection with the Research
Program. TKT shall provide MMD the right to inspect such records, and shall
provide copies of all requested records, to the extent reasonably required for
the performance of MMD's obligations under this Agreement; provided, however,
that MMD shall maintain such records and the information of TKT contained
therein in confidence in accordance with Article 9 hereof and shall not use such
records or information except to the extent otherwise permitted by this
Agreement.
4.1.5. Quarterly Reports by TKT. Within fourteen (14) days following
the end of each calendar quarter, or at the reasonable request (with mutually
agreed advance notice) of the R&D Oversight Committee, TKT shall provide to the
members of the R&D Oversight Committee a written report which shall summarize in
reasonable detail the work TKT has performed under the Research Program during
the preceding calendar quarter.
4.1.6. Assistance by MMD. MMD shall provide such assistance to TKT
in conducting the Research Program as TKT may reasonably request, and TKT will
reimburse MMD for its documented Fully Absorbed Costs incurred in providing such
assistance; provided, however, that prior to providing such assistance MMD shall
have provided to TKT an estimate of such Fully Absorbed Costs and TKT shall have
approved such estimate; provided, further, that no failure of MMD to undertake
or successfully
-12-
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
complete such assistance shall relieve TKT from its obligations hereunder or
affect MMD's right to terminate this Agreement pursuant to Section 12.2.
4.2. Funding of the Research Program. TKT shall bear all costs and
expenses in connection with the Research Program.
4.3. Term of the Research Phase.
4.3.1. Completion of the Research Phase. The term of the Research
Phase shall commence as of the first day of the month following the Effective
Date. ************************************************************
*****************************************************************
****************************************************************
**************************************************************
****************************************************************
***********************************************************
************************************************************
************************************************************
************************************************************** ******* The R&D
Oversight Committee shall promptly evaluate the data submitted by TKT and
determine, in its reasonable discretion, ************************************
****************************************************************
**********************************. The R&D Oversight Committee shall provide
TKT and MMD with prompt written notice of its decision. Upon notification of
*****************************************************************
****************************************************************
*************************************************************
********************************.
4.3.2. Term of the Research Phase. The term of the Research Phase
************************************************
**************************************************************
***************************************************************
***************************************************************
************************************* shall jointly determine on what terms the
Research Phase shall be extended and what additional terms, if any, in this
Agreement shall be modified as a result of such extension. If such a
determination cannot be reached within ******************** after the expiration
of the initial term of the Research Phase, then such determination shall be made
by arbitration in accordance with the procedures for arbitration described in
Section 13.6, unless the parties mutually agree to terminate this Agreement.
ARTICLE 5. THE DEVELOPMENT PHASE
5.1. Conduct of the Development Phase.
5.1.1. Commencement of the Development Phase. The Development Phase
will commence ******************************
***************************************************************
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
****************************************************************
***************************************************************
***********.
5.1.2. Development Phase. The conduct of the Development Phase
shall be the primary responsibility of MMD. MMD may subcontract with Third
Parties for portions of the Development Phase and for all or a portion of the
manufacture of GA-EPO. The Development Phase shall consist of the preparation
and filing of regulatory submissions and the preclinical and clinical
development of GA-EPO until, with respect to each country in the MMD Territory,
final marketing approval for GA-EPO is obtained in such country. MMD and TKT
will cooperate to achieve the milestones described in Appendix A using their
respective best efforts using commercially reasonable means consistent with
those used by them for other projects with a similar commercial potential. If
MMD has been unable to achieve any of the milestones described in Appendix A
within the time period indicated in Appendix A for reasons other than those
described in subsection 5.1.4, then the Chief Executive Officer of each of TKT
and MMD or their respective designees shall jointly determine on what terms the
time period for achieving such milestones should be extended and what additional
terms, if any, in this Agreement shall be modified as a result of such
extension. If such a determination cannot be reached within ********************
after the time period for any such milestone has expired, then such
determination shall be made by arbitration in accordance with the procedures for
arbitration described in Section 13.6, unless the parties mutually agree to
terminate this Agreement. MMD shall have primary responsibility for supervision
of the scale-up and the further characterization of the master cell bank, the
characterization of clinical trial material, and the supervision of the assembly
of all characterization data and other information required for regulatory
submissions. At MMD's request, TKT will perform, or assist MMD in performing,
the work described in the preceding sentence and provide such other assistance
to MMD as may be reasonably necessary to enable MMD to achieve the milestones
described in Appendix A, and TKT shall be compensated for such assistance in
accordance with Section 5.9. MMD will determine, in its sole discretion after
consultation with TKT, the appropriate entity to file and hold the PLA and the
ELA. MMD will coordinate preclinical and clinical testing of GA-EPO and work
with designated individuals at MMD and TKT in the preparation of regulatory
filings for GA-EPO within the MMD Territory.
5.1.3. Annual Development Plan. The Development Phase shall be
conducted under an annual development plan which shall describe the work to be
pursued by MMD and TKT under the supervision of the Development Committee with
respect to the development of GA-EPO. The first Development Plan will be
prepared by MMD for submission to the Development Committee within
**********************************************************
****************************************************************. Thereafter,
the annual development plan will be prepared by MMD
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
for submission to the Development Committee no later than ****** ********* prior
to the beginning of each calendar year.
5.1.4. Adjustment of Development Phase Milestones. If at any time
during the Development Phase MMD determines and is able to demonstrate to TKT's
reasonable satisfaction that *****
***************************************************************
*****************************************************************
*************************************************************
***********************************************************
******************************************************
****************************************************************
****************************************************************
***************************************************************** then the Chief
Executive Officer of each of MMD and TKT, or their respective designees, shall
determine on what terms the Research Phase shall be reinitiated and how the
milestones described in Appendix A are to be adjusted.
5.1.5. Attendance at Regulatory Meetings. MMD will provide TKT with
prior notice of all meetings between its representatives and drug regulatory
authorities regarding marketing approval of GA-EPO. TKT shall have the right to
have a representative present at all important meetings in the United States,
and upon request at all important meetings in other countries; provided,
however, that MMD may revoke this right with respect to any particular meeting
if, in its good faith reasonable judgment, the presence of any other party will
be a detriment to the success of the meeting. TKT will furnish, at MMD's
request, a representative to attend drug regulatory meetings regarding marketing
approval of GA-EPO.
5.2. Funding of the Development Phase. MMD shall bear all costs and
expenses in connection with the Development Phase. The assistance by TKT to MMD
and reimbursement to be provided by MMD to TKT during the Development Phase is
set forth in Section 5.7 hereof.
5.3. Development Information.
5.3.1. Information for Regulatory Submissions. TKT will provide MMD
with all documentation available to TKT reasonably required for regulatory
submissions by MMD, based on work performed during the Research Phase, including
********** ************************************************************
*************************************************************
*********************************************************
***************************************************************
*****************************************************************
*******************************************************
***************************.
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5.3.2. Reports to Development Committee. MMD shall keep the
Development Committee informed as to its progress in the Development Phase of
GA-EPO. Within thirty (30) days following the end of each six month period
during the Development Phase, MMD shall provide a reasonably detailed report to
the Development Committee which shall describe the progress of the Development
Phase of GA-EPO.
5.3.3. Regulatory Submissions. MMD shall provide TKT with copies
of all submissions to United States drug regulatory authorities. Upon the
reasonable request of TKT, MMD shall also provide TKT with copies of all
submissions to drug regulatory authorities of other countries and the results of
all clinical trials conducted by, or under the supervision of, MMD with respect
to GA-EPO; provided, however, that MMD reserves the right to assess reasonable
copying charges for any such materials requested by TKT which exceed
approximately two cartons of material.
5.3.4. Adverse Event Information. Within six months after the
commencement of the Development Phase, MMD will establish a protocol for the
timely handling and transmission of adverse event information. MMD and TKT shall
promptly notify each other of any adverse event information relating to GA-EPO
in accordance with such protocol.
5.4. Certain Prohibited Actions. Notwithstanding the provisions of Section
2.2, TKT and its Affiliates shall not, directly or indirectly, market,
distribute or sell GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology in the MMD Territory.
5.5. Development Phase Manufacturing. Provided that TKT has successfully
met its obligations under the Research Program in the Research Phase, MMD shall
be primarily responsible for the production of GA-EPO during the Development
Phase. MMD will consult with TKT to determine the appropriate manufacturing
process for GA-EPO necessary for the Development Phase and for commercial
production, including selecting a suitable production process.
5.6. Manufacturing Costs. MMD shall bear all costs associated with the
manufacture of GA-EPO during the Development Phase, in accordance with the
provisions of this Article 5, and for commercial production for sale by MMD or
its sublicensees in the MMD Territory.
5.7. Assistance by TKT. At MMD's request, TKT will cooperate with MMD to
provide such technical assistance and characterization work as may be necessary
in connection with the manufacture and production of GA-EPO during the
Development Phase and subsequently in commercial production, and MMD will
reimburse TKT for its documented Fully Absorbed Costs incurred in connection
with providing such assistance; provided, however, that prior to providing such
assistance, TKT shall have provided
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
to MMD an estimate of such Fully Absorbed Costs and MMD shall have approved such
estimate and, provided further, that no failure of TKT to undertake or
successfully complete such assistance shall relieve MMD from its obligation to
achieve the milestones described in Appendix A or affect TKT's right to
terminate this Agreement pursuant to subsection 12.2.5. TKT will provide such
assistance to MMD as is consistent with the capacity and capabilities of TKT.
5.8. Regulatory Matters and Commercialization.
5.8.1. Commercialization. Upon the successful completion of the
Research Phase and Development Phase, MMD agrees to use its best efforts to
commercialize GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology throughout the MMD Territory using commercially reasonable means
consistent with those used for MMD products with similar commercial potential.
5.8.2. Marketing Plans. MMD shall promptly provide TKT with copies
of its United States marketing plans for GA-EPO covered by the TKT Patent Rights
or which uses the TKT Technology, and shall provide TKT with copies of its
marketing plans for other countries upon the reasonable request of TKT. Such
marketing plans shall not be disclosed to any Third Party without the prior
written consent of MMD.
5.8.3. Co-Development, Co-Promotion and Co- Marketing. In the
event that MMD determines, in its sole discretion, that co-development,
co-promotion or co-marketing of GA-EPO covered by the TKT Patent Rights or which
uses the TKT Technology is appropriate in any of the countries in the *****
*********************************************************** ******, then TKT
shall have the right of first negotiation (the "First Negotiation Right") to
become MMD's co-development, co- promotion or co-marketing partner, as the case
may be, in any such country on terms no less favorable to TKT than those which
MMD proposes to offer to any other co-development, co-promotion or co-marketing
partner for such country. MMD shall notify TKT in writing of its determination
to pursue co-development, co- promotion or co-marketing of GA-EPO covered by the
TKT Patent Rights or which uses the TKT Technology in a country in the *****
***************************************************************** (the
"Negotiation Notice"); provided, however, that, in the case of co-promotion or
co-marketing only and in the absence of co- development, MMD shall not be
entitled without TKT's consent, which shall not be unreasonably withheld, to
give TKT a Negotiation Notice with respect to any country in the MMD Territory
until all clinical trials necessary for the submission for regulatory approval
to market GA-EPO in that country are substantially complete. Unless TKT shall
have waived the First Negotiation Right in writing within 30 days following
receipt by TKT of the Negotiation Notice, MMD and TKT shall negotiate in
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good faith a termsheet for such co-development, co-promotion or co-marketing
arrangement for a period of up to 60 days commencing on the date of the
Negotiation Notice and a definitive agreement for such co-development,
co-promotion or co-marketing for an additional period of up to 60 days
commencing on the date of such termsheet. If, at the end of either of such
periods, MMD and TKT are unable to agree on terms for the co-development,
co-promotion or co-marketing of GA-EPO in such country, then, unless the parties
agree to extend the negotiation period, MMD shall promptly deliver to TKT a
final proposal detailing the terms on which it would enter into such a
co-development, co-promotion or co-marketing arrangement (the "Final Proposal").
TKT shall have thirty (30) days from receipt of the Final Proposal to notify MMD
of its desire to enter into an arrangement on such terms. If TKT does not so
notify MMD, then MMD shall be free, for a period of one year (which shall be
extended for an additional four-month period if MMD has certified to TKT that it
is then in active negotiations with a single Third Party with respect thereto)
from the expiration of such 30 days, to enter into a co-development,
co-promotion or co-marketing arrangement for GA-EPO in the country identified in
the Negotiation Notice with a Third Party on terms no more favorable to the
Third Party than the terms contained in the Final Proposal. Following such
negotiation period, MMD shall not enter into a co-development, co-promotion or
co-marketing arrangement for GA-EPO in any country in the MMD Territory with a
Third Party without first complying with the provisions of this subsection.
Except as otherwise provided in this subsection 5.8.2, it is understood and
agreed to by the parties hereto that MMD shall have no obligation to enter into
a co-development, co-promotion, or co-marketing arrangement with respect to any
country in the MMD Territory with TKT. In the event that MMD enters into a
co-development arrangement for GA-EPO in a country with a Third Party after
complying with the provisions of this subsection, then TKT shall cooperate with
such Third Party in such country during the Development Phase to the same extent
that TKT would cooperate with MMD.
ARTICLE 6. RESEARCH, DEVELOPMENT AND REGULATORY COORDINATION
6.1. R&D Oversight Committee.
6.1.1. General. Promptly after the Effective Date, a joint
committee comprised of up to three named representatives of MMD and up to three
named representatives of TKT (the "R&D Oversight Committee") shall be appointed.
One of the representatives of TKT shall act as Chairman of the R&D Oversight
Committee. The R&D Oversight Committee shall be responsible for the supervision
of the Research Program. Such meetings shall be held at TKT's facilities located
in Cambridge, Massachusetts, and at such times as are agreed to by TKT and MMD,
or at such other locations or in such other form (e.g., telephone or video
conference) as the members of the R&D Oversight Committee shall agree, but no
less frequently than three times per year. At such meetings, the principal
function of the R&D Oversight Committee
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
will be to discuss the Research Program *************************
*************************************************************
************************************************** A party may change one or
more of its representatives to the R&D Oversight Committee at any time. Members
of the R&D Oversight Committee may be represented at any meeting by another
member of the R&D Oversight Committee so designated by the absent member, or by
a deputy. Any approval, determination or other action shall require the
affirmative vote of both TKT and MMD ********************************** as
determined by each party's representatives who are members of the R&D
Oversight Committee. Employees, subcontractors or consultants of either TKT
and MMD who are involved with the Program and who are not members of the R&D
Oversight Committee may attend meetings of the Committee as guests of either
party.
6.1.2. Minutes. The R&D Oversight Committee shall keep accurate
minutes of its deliberations. The Chairman shall be responsible for the
preparation of draft minutes. Draft minutes shall be sent to all members of the
R&D Oversight Committee within ten (10) business days after each meeting. All
records of the R&D Oversight Committee shall be available to both parties.
6.2. Development Committee.
6.2.1. General. Promptly after the Effective Date, a joint
committee comprised of up to four named representatives of MMD and up to four
named representatives of TKT (the "Development Committee") shall be appointed.
One of the representatives of MMD shall act as Chairman of the Development
Committee. Such meetings shall be held at TKT's facilities in Cambridge,
Massachusetts during the Research Phase, and thereafter in Kansas City,
Missouri, and, in any event, at times and places or in such form (e.g.,
telephone or video conference) as the members of the Development Committee shall
agree but no less frequently than three times per year. At such meetings, the
Development Committee will discuss the Development Phase of GA-EPO, including
but not limited to, preclinical and clinical testing and the preparation of
regulatory submissions for approval of GA-EPO in the MMD Territory. To the
extent reasonable or appropriate, meetings of the Development Committee will be
coordinated and held jointly with the R&D Oversight Committee. A party may
change one or more of its representatives to the Development Committee at any
time. Members of the Development Committee may be represented at any meeting by
another member of the Development Committee so designated by the absent member,
or by a deputy. Any approval, determination or other action shall require the
affirmative vote of a majority of the votes entitled to be cast,
********************************* ***************, and with such votes being
cast as determined by each party's representatives who are members of the
Development Committee. Employees, subcontractors or consultants of either TKT
and MMD who are involved with the Program and who are not
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
members of the Development Committee may attend meetings of the Committee as
guests of either party.
6.2.2. Minutes. The Development Committee shall keep accurate
minutes of its deliberations. The Chairman shall be responsible for the
preparation of draft minutes. Draft minutes shall be sent to all members of the
Development Committee within ten (10) business days after each meeting. All
records of the Development Committee shall at all times be available to both
parties.
6.3. General Disagreements. All disagreements within the R&D Oversight
Committee and the Development Committee shall be resolved in accordance with the
provisions of Section 13.6.
6.4. Visit of Facilities. Representatives of MMD may, upon reasonable
notice and at times reasonably acceptable to TKT, visit TKT's facilities where
the Research Program is being conducted and consult with personnel of TKT
performing work on the Research Program, and those of any permitted
subcontractors of TKT. Representatives of TKT and MMD may, with the other
party's prior approval, which approval shall not be unreasonably withheld, visit
manufacturing sites and the sites of any clinical trials or other experiments
being conducted by such other party in connection with the Development Phase. If
requested by the other party, TKT and MMD shall cause appropriate individuals
working on the Development Phase to be available for meetings at the location of
the facilities where such individuals are employed at times reasonably
convenient to the party responding to such request.
6.5. Annual Review and Planning Meeting. No less frequently than annually,
representatives of TKT and MMD shall meet at a place mutually agreed to by the
parties (which, prior to the First Commercial Sale, will be one of the R&D
Oversight Committee or Development Committee meetings)(the "Annual Meeting"), at
which meeting MMD shall review the clinical, regulatory and marketing activities
undertaken by MMD or its Affiliates since the previous Annual Meeting and shall
present its clinical, regulatory and marketing plans for GA-EPO for the ensuing
year. Within 30 days following each Annual Meeting, MMD shall submit to TKT a
written report detailing the information reviewed and presented at such Annual
Meeting.
ARTICLE 7. MILESTONES AND ROYALTIES
7.1. Milestone Payments. MMD and TKT acknowledge payment by MMD to TKT of
$1,000,000 *************************************
***********************************************************. In consideration of
TKT's work on the Research Program and the licenses granted to MMD hereunder,
MMD has paid or shall pay the following additional amounts to TKT upon the
achievement of each of the following milestones (except as noted below), prior
to any expiration or termination of this Agreement under Article 12 with respect
to the country to which such milestone relates, it being
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
understood and agreed to that TKT shall use a portion of such payments as
necessary to fund the performance of its obligations under the Program:
--------------------------------------------------------------------------------
Milestone Payment
--------------------------------------------------------------------------------
Execution of the Original License $9,000,000 (Paid)
Agreement
$5,000,000 Preferred
Stock Investment(1)
(Paid)
--------------------------------------------------------------------------------
Initial Public Offering (as defined $5,000,000 Common Stock
in the Class D Stock Purchase Investment(2)
Agreement) ("IPO") by TKT
Additional $5,000,000
Common Stock Investment
(2)
--------------------------------------------------------------------------------
***************** Cell Line ****** $2,000,000
*******************
--------------------------------------------------------------------------------
******************************** $**************
--------------------------------------------------------------------------------
********************************** $**************
--------------------------------------------------------------------------------
******************************** $**************
--------------------------------------------------------------------------------
******************* $**************
--------------------------------------------------------------------------------
************************************ $**************
************************************
***************
--------------------------------------------------------------------------------
****************************** $**************
--------------------------------------------------------------------------------
(1) On the terms and subject to the conditions of the Class D Preferred Stock
Purchase Agreement dated as of May 18, 1994, by and between MMD and TKT
(the "Class D Stock Purchase Agreement").
(2) MMD shall purchase shares Common Stock of TKT in the IPO upon the terms
and subject to the conditions of the Class D Stock Purchase Agreement.
Either TKT or MMD shall notify the other in writing within ten (10)
business days following the occurrence of each of the milestones set forth
above. Within ten (10) business days after receipt of such notice, MMD shall pay
to TKT in United States dollars by check or other means acceptable to TKT, the
milestone payments set forth above. Milestone payments made to TKT pursuant to
this Section 7.1 are not refundable under any circumstances and will not be
credited against royalty payments due TKT under Section 7.2.
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7.2. Royalties. In consideration of the licenses granted to MMD hereunder,
MMD shall pay to TKT royalties as follows:
7.2.1. Royalties Based on Net Sales of GA-EPO. Except as otherwise
provided in this Section 7.2., MMD shall pay to TKT a royalty based on the Net
Sales of GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology in each Territory Block, from the launch of such sales in such
Territory Block until, with respect to any country, the expiration or
termination of this Agreement, at the rates set forth below:
********************************* ***************
******************************************* **************
------------------------------------------- ---------------
************************** *****
********* *****
***********************************************************
************************.
For the purpose of calculating ******************** in a Territory Block: (i)
Net Sales for the ************* and ***** ******* Territory Blocks
*****************, and such ************ ***** shall be deemed to be the
******************** for each of the ******************************* Territory
Blocks; (ii) *** ******************************* Territory Blocks ********
************************************* shall be deemed to be the
******************** for each of the ***************** Territory Blocks; and
(iii) with respect to sales in the *************, **********************
Territory Blocks by a Third Party sublicensee or a distributor which is not an
Affiliate of MMD, the Net Revenues shall be used in lieu of the Net Sales in the
foregoing calculation of ********************.
7.2.2. Alternative Royalty Based on Gross Margin. Notwithstanding
the provisions of subsection 7.2.1., in **************************************
Territory Blocks, the royalty payable by MMD to TKT shall be as follows: (i) if
MMD sells GA-EPO finished product in final packing form (whether or not with
final labels) covered by the TKT Patent Rights or which uses the TKT Technology
to a Third Party sublicensee or distributor which is not an Affiliate of MMD,
MMD shall pay to TKT a royalty equal to *************************************
**** *************; or (ii) if MMD does not sell such GA-EPO finished product
in final packing form (whether or not with final labels) to such Third Party
sublicensee or distributor, then TKT and MMD shall negotiate in good faith to
share ********************* all other monetary consideration received by MMD
from such Third Party sublicensee or distributor.
7.2.3. Sharing of Revenues From Sublicensees. If MMD grants a
sublicense hereunder to any Third Party to make,
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have made, use, distribute for sale or sell GA-EPO covered by the TKT Patent
Rights or which uses the TKT Technology in any country in the MMD Territory, MMD
shall share with TKT, *************** *****, all up front monetary consideration
received by MMD from such Third Party in connection therewith which are not
based upon Net Sales or Net Revenues, as applicable, of GA-EPO sold by such
Third Party sublicensee in such country.
7.2.4. Adjustment of Royalty Rates. At the request of MMD, the
royalty rates set forth in subsection 7.2.1. shall be appropriately adjusted by
TKT and MMD (i) with respect to sales of "generic" or "non-branded" GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology by MMD in any
country within a Territory Block in which MMD elects to make such sales to
compete with sales by any Third Party of a "generic" or "non-branded"
pharmaceutical formulation of erythropoietin protein or (ii) with respect to
sales of "branded" GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology by MMD in any country within the MMD Territory in which MMD
experiences competition in the market for GA-EPO which was not in existence on
the Effective Date and the TKT Patent Rights have been judged to be invalid or
unenforceable. In addition, TKT agrees to meet with MMD at its request and
negotiate in good faith concerning whether other adjustments to the royalty
rates set forth in subsection 7.2.1. should be made in the event that MMD
demonstrates to TKT's reasonable satisfaction that there have been structural
changes in the market for GA-EPO in any country which have rendered the royalty
rates set forth in subsection 7.2.1. commercially unreasonable.
At the request of MMD, the royalty rates set forth in subsection 7.2.2.
shall be appropriately adjusted by TKT and MMD (i) with respect to sales of
"branded", "non-branded" or "generic" GA-EPO covered by the TKT Patent Rights or
which uses the TKT Technology in any country within a Territory Block in which
competitive conditions make it not feasible for MMD to maintain the level of its
Gross Margin or (ii) as may otherwise be necessary to maintain the commercial
viability of the product as contemplated by this Agreement.
7.3. Royalty Reports, Exchange Rates. During the term of this Agreement,
following the First Commercial Sale of GA-EPO covered by the TKT Patent Rights
or which uses the TKT Technology in any country in the MMD Territory, MMD shall
furnish to TKT a written quarterly report showing with respect to GA-EPO, on a
country by country basis (except as provided below): (i) the gross sales (except
for sales to which subsection 7.2.2 applies) of all GA-EPO covered by the TKT
Patent Rights or which uses the TKT Technology sold by MMD and its Affiliates,
its distributors and its permitted sublicensees in the MMD Territory during the
reporting period; (ii) the calculation of Net Sales (except for sales to which
subsection 7.2.2 applies) from such gross sales; (iii) the Gross Margin related
to sales to which subsection 7.2.2 applies and the calculation of such Gross
Margin; (iv) any revenues from sublicensees received by MMD during the reporting
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period; (v) the royalties and other payments payable in United States dollars
which shall have accrued hereunder in respect of such Net Sales, Gross Margin
and sublicensee payments; (vi) withholding taxes, if any, required by law to be
deducted as a payment by TKT in respect of such Net Sales, Gross Margin and
sublicensee payments; (vii) the dates of the First Commercial Sales of GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology in any country
in the MMD Territory during the reporting period; and (viii) the exchange rates
used in determining the amount of United States dollars. All amounts payable
will first be calculated in the currency of sale and then converted into United
States dollars on a quarterly basis using as a rate of exchange the actual
foreign currency exchange rate on the last day of the month preceding the end of
the quarter or such other method as is consistent with MMD's internal foreign
currency translation procedures. MMD shall use its best efforts to provide such
reports on the sixtieth (60th) day following the close of each quarter. If no
royalty is due for any royalty period hereunder, MMD shall so report. MMD shall
keep complete and accurate records in sufficient detail to properly reflect all
gross sales, Net Sales and Gross Margin and to enable the royalties payable
hereunder to be determined.
7.4. Audits.
7.4.1. Procedure. Upon the written request of TKT or MMD, the
other party shall permit an internal auditor or independent public accountant
selected by TKT or MMD, as the case may be, and acceptable to the other party,
which acceptance shall not be unreasonably withheld, to have access during
normal business hours to such of the records of MMD or TKT, as the case may be,
as may be reasonably necessary to verify the accuracy of the royalty reports,
cost computations and final cost amounts described hereunder, in respect of any
fiscal year ending not more than *********************** prior to the date of
such request. All such verifications shall be conducted at TKT's or MMD's, as
the case may be, expense and not more than ******** in each calendar year.
7.4.2. Expenses. In the event such accountant concludes that
additional royalties or lower expense reimbursement were required during such
period, and the party receiving such audit request agrees with such conclusion,
the additional royalty shall be paid in accordance with Section 7.5 or the
excess expense reimbursement shall be promptly repaid. The fees charged by such
accountant shall be paid by the party requesting such audit, unless the audit
discloses and the party receiving such audit request agrees (i) in the case of
an audit by TKT, that the royalties payable by MMD, or, (ii) in the case of an
audit by MMD, that the cost computation estimates and final amounts hereunder,
for the audited period are incorrect by more than *****************, in which
case the audited party shall pay the reasonable fees and expenses charged by the
accountant.
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
7.4.3. Sublicenses. MMD shall use reasonable efforts to include in
each Third Party sublicense granted by it pursuant to this Agreement a provision
requiring the sublicensee to make reports to MMD, to keep and maintain records
of sales made pursuant to such sublicense and to grant access to such records by
TKT's independent accountant to the same extent required of MMD under this
Agreement. Upon the expiration of *********************** following the end of
any fiscal year, the calculation of royalties payable with respect to such year
shall be binding and conclusive upon TKT; and MMD and its sublicensees shall be
released from any liability or accountability with respect to royalties for such
year.
7.4.4. Confidential Treatment. Each party agrees that all
information subject to review under this Section 7.4 or under any sublicense
agreement is confidential and that such party shall cause its accountant to
retain all such information in confidence.
7.5. Royalty Payment Terms. Royalties shown to have accrued by each
royalty report provided for under this Agreement shall be due and payable on the
date such royalty report is due. Payment of royalties in whole or in part may be
made in advance of such due date. Royalties determined to be owing, and any
overpayments to be credited, with respect to any prior quarter shall be added or
credited, as the case may be, to the next quarterly payment hereunder.
7.6. Form of Payment. All research payments, milestone payments, royalties
and other payments due hereunder shall be paid in United States dollars. If at
any time legal restrictions prevent the prompt remittance of part or all
royalties with respect to any country of the MMD Territory where GA-EPO covered
by the TKT Patent Rights or which uses the TKT Technology is sold, payment shall
be made through such lawful means or methods as MMD may determine.
7.7. Withholding Taxes. All royalties payable to TKT hereunder shall be
paid without deductions of any withholding taxes, value-added taxes or other
taxes, levies or charges applicable to such payments, other than (i) United
States taxes payable by TKT and (ii) foreign taxes payable by TKT to the extent
that such taxes are imposed by reason of TKT's having a permanent establishment
in any country within the MMD Territory or otherwise being subject to taxation
by such country (except foreign taxes imposed solely by reason of the license
granted to MMD hereunder). MMD shall be credited for the net benefit realized by
TKT for any foreign tax deductions or credits taken by TKT with respect to such
amounts paid by MMD. In addition, any reorganization of TKT or an Affiliate of
TKT with or into an entity organized outside the United States shall not result
in any increased costs to MMD under this Agreement. Each party will assist the
other party in claiming tax refunds, deductions or credits at the other party's
request and will cooperate to
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
minimize the withholding tax, if available, under various treaties applicable to
any payment made hereunder.
7.8. Interest on Late Payments. Any payments by either party that are not
paid on or before the date such payments are due under this Agreement shall bear
interest, to the extent permitted by law, at the London Interbank Offering Rate
as set by Citibank, N.A. from time to time, plus 50 basis points, calculated on
the number of days payment is delinquent.
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS
8.1. Ownership.
8.1.1. Ownership of Discoveries and Improvements. All right, title
and interest in all writings, inventions, discoveries, improvements and other
technology, whether or not patentable or copyrightable, and any patent
applications, patents or copyrights based thereon (collectively, the
"Inventions") that are discovered, made or conceived during and as a result of
the Research Phase or the Development Phase solely by employees of TKT or others
acting on behalf of TKT ("TKT Inventions") shall be owned by TKT.
***********************************************
*************************************************************
********************************************************
**************************************************************
*****************************************************************
*************************************************************
**************************************************************** ********. All
right, title and interest in all Inventions that are discovered, made or
conceived during and as a result of the Research Phase or the Development Phase
or thereafter solely by employees of MMD or others acting on behalf of MMD ("MMD
Inventions") shall be owned by MMD. All right, title and interest in all
Inventions that are discovered, made or conceived during and as a result of the
Research Phase or the Development Phase or thereafter jointly by employees of
TKT and MMD or others acting on their behalf (the "Joint Inventions") shall be
jointly owned by MMD and TKT. Each party shall promptly disclose to the other
party the making, conception or reduction to practice of Inventions by employees
or others acting on behalf of such party. The parties acknowledge that the
ownership rights set forth above are subject to the license grants set forth in
Article 3.
8.1.2. Cooperation of Employees. Each party represents and agrees
that its employees and consultants shall be obligated under a binding written
agreement to assign to such party, or as such party shall direct, all Inventions
made or conceived during and as a result of the Research Phase or the
Development Phase by such employee or consultant. In the case of non-employees
working for other companies or institutions on behalf of TKT or MMD, TKT or MMD,
as applicable, shall use reasonable efforts to obtain the right to license all
Inventions made by such non-employees on behalf of TKT or MMD, as
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
applicable, in accordance with the policies of the company or institution
employing such non-employee. TKT and MMD agree to undertake to enforce such
agreements with employees or others or such rights pertaining to non-employees
(including, where appropriate, by legal action) considering, among other things,
the commercial value of such Inventions.
8.2. Filing, Prosecution and Maintenance of TKT Patent Rights and TKT
Technology.
8.2.1. Filing, Prosecution and Maintenance. TKT shall be
responsible for the filing, prosecution (including oppositions) and maintenance
of all patent applications and patents which make up the TKT Patent Rights and
such other registrations related to the TKT Technology. For so long as any of
the license grants set forth in Article 3 remain in effect, TKT agrees to file
and prosecute patent applications and maintain the patents covering the TKT
Patent Rights and, to the extent applicable, for the registration or other
protection of the TKT Technology, in all countries in the MMD Territory in which
MMD customarily files for products of similar interest. TKT shall consult with
MMD and keep MMD fully informed of important issues relating to the preparation,
filing, prosecution and maintenance of such patent applications and patents,
including patent strategy with respect to both existing and future patent
applications, patents and patent extensions, and shall furnish to MMD copies of
documents relevant to such preparation, filing, prosecution or maintenance
sufficiently prior to filing such document or making any payment due thereunder
to allow for review and comment by MMD, and TKT shall seriously consider all
such comments. TKT and MMD shall mutually determine procedures for carrying out
the filing, prosecution (including oppositions) and maintenance, as applicable,
of patent applications and patents for all Joint Inventions and
******************************** *******, and both parties shall be kept fully
informed of and consult and cooperate with respect to all actions taken with
respect thereto; provided that, if either party elects to not ******************
of such activity with respect to a particular Joint Invention in a particular
country, then the other party may, ******************* and discretion, undertake
the filing, prosecution (including oppositions) and maintenance of such patent
or patent application in such country, and the party not participating in such
expenses shall assign its interest in such patent or patent application in such
country to the other party, including the rights to receive and collect from
third parties any royalties and damages from future or past infringement, but
reserving a perpetual royalty-free non-exclusive license in such country
(without the right to sublicense and subject to any limitations imposed by this
Agreement, including Section 2.2 hereof) to use such Joint Invention to make,
have made, use, distribute for sale and sell any products covered by such patent
covering such Joint Invention. The non-participating party will cooperate with
the other party, at the other party's expense, as necessary to enable the other
party to establish and protect its rights under this subsection 8.2.1.
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If TKT elects not to continue to seek or maintain patent protection on any
patent or patent application which makes up the TKT Patent Rights or relates to
the TKT Technology in any country in the MMD Territory, MMD shall have the
right, at its option, but in the name of TKT ********************, to file,
prosecute (including oppositions) and maintain such patent applications and
patents as TKT shall have previously filed in at least one country, provided,
however, that the rights of the parties with respect to any such TKT Patent
Rights and TKT Technology shall in all other respects be as described in this
Agreement. TKT will advise MMD of all decisions taken with respect to any such
election in a timely manner in order to allow MMD to protect its rights under
this subsection 8.2.1.
8.2.2. Patent Filing Costs. *** shall bear all costs associated
with filing, prosecuting and maintaining patent applications and patents
covering the TKT Patent Rights in all countries in the MMD Territory.
8.3. Cooperation. Each party shall make available to the other party (or
to the other party's authorized attorneys, agents or representatives), its
employees, agents, subcontractors or consultants to the extent reasonably
necessary or appropriate to enable the appropriate party to file, prosecute and
maintain patent applications and resulting patents with respect to Inventions
owned by a party and for periods of time reasonably sufficient for such party to
obtain the assistance it needs from such personnel. Where appropriate, each
party shall sign or cause to have signed all documents relating to said patent
applications or patents at no charge to the other party. Notwithstanding the
foregoing, MMD shall not be precluded from contesting the validity or
enforceability of the TKT Patent Rights or TKT Technology.
8.4. Notification of Patent Term Restoration. *** shall notify *** of (i)
the issuance of each patent included within the TKT Patent Rights, giving the
date of issue and patent number for each such patent, and (ii) each notice
pertaining to any patent included within the TKT Patent Rights which it receives
as patent owner pursuant to the Drug Price Competition and Patent Term
Restoration Act of 1984 (hereinafter called the "Act"), or other similar laws
now or hereafter in effect, or pursuant to comparable laws or regulations in
other countries in the MMD Territory. The parties shall cooperate with each
other in applying for patent term extensions (including Supplementary Protection
Certificates in European Community Countries) where applicable in any country of
the MMD territory. *** shall also notify *** of each application filed for
patent term extension, any allegations of failure to show due diligence and all
awards of patent term extensions with respect to the TKT Patent Rights. Such
notices shall be given promptly, but in any event within ten (10) business days
after receipt of each such notice pursuant to the Act (or comparable laws or
regulations in other countries in the MMD Territory). *** shall notify *** of
each filing for patent term restoration under the Act (or comparable laws or
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regulations in other countries in the MMD Territory), any allegations of failure
to show due diligence and all awards of patent term restoration (extensions)
with respect to the TKT Patent Rights.
8.5. No Other Technology Rights. Except as otherwise expressly provided in
this Agreement, under no circumstances shall a party hereto, as a result of this
Agreement, obtain any ownership interest in or other right to any technology,
know-how, patents, pending patent applications, products, or biological
materials of the other party, including items owned, controlled or developed by
the other party, or transferred by the other party to said party, at any time
pursuant to this Agreement. It is understood and agreed that this Agreement does
not grant MMD any license or other right in the TKT Patent Rights for uses other
than the production, manufacture, use, distribution for sale and sale of GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology.
8.6. Enforcement of TKT Patent Rights and TKT Technology; Defense of
Infringement Actions. TKT and MMD shall each promptly, but in any event no later
than ten (10) business days after receipt of notice of such action, notify the
other in writing of any patent nullity actions, any declaratory judgment actions
or any alleged or threatened infringement of patents or patent applications or
misappropriation of intellectual property comprising the TKT Patent Rights or
the TKT Technology or if either party, or any of their respective Affiliates,
shall be individually named as a defendant in a legal proceeding by a Third
Party alleging infringement of a patent or other intellectual property right as
a result of the manufacture, production, use, distribution for sale or sale of
GA-EPO, or of any other information or notification regarding the TKT Patent
Rights or TKT Technology.
8.6.1. MMD's First Right to Respond. MMD shall have the first
right to respond to, defend or prosecute any actions, challenges, infringements,
misappropriations or proceeding by a Third Party alleging infringement described
in Section 8.6. In the event MMD elects to do so, TKT will cooperate with MMD
and its legal counsel, join in such suits as may be brought by MMD, and be
available at MMD's reasonable request to be an expert witness or otherwise to
assist in such proceedings. MMD will cooperate with TKT and its legal counsel
and keep TKT and its counsel reasonably informed at all times as to the status
of MMD's response or defense.
8.6.2. No Adverse Settlement Without TKT Consent. MMD will not
settle any suit involving the TKT Patent Rights or TKT Technology in a manner
that would compromise any rights of TKT without obtaining the prior written
consent of TKT.
8.6.3. Sharing of Litigation and Settlement Expenses. In the event
that MMD elects to respond to, defend or prosecute any actions, challenges,
infringements,
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misappropriations or proceeding by a Third Party alleging infringement described
in Section 8.6., then: (i) legal fees and other costs and expenses associated
with such response or defense, including those incurred by TKT at MMD's request,
shall be shared **% by MMD and **% by TKT; (ii) costs of acquiring Third Party
patents or licenses and any settlement, court award, judgment or other damages
will be shared **% by MMD and **% by TKT; and (iii) amounts recovered from Third
Parties in connection with such response or defense shall first be applied, **%
to MMD and **% to TKT, to reimburse MMD and TKT for their respective costs and
expenses incurred pursuant to clause (i) above, and thereafter shall be divided
**% to MMD and **% to TKT. MMD shall advance all costs required to be paid by
TKT pursuant to clauses (i) and (ii) of this subsection 8.6.3. and shall recover
such advanced costs through credits against up to **% of the royalties otherwise
payable by MMD to TKT hereunder, until the amount so advanced by MMD is fully
recovered. TKT shall have no obligation to repay to MMD any amounts previously
paid by MMD to TKT hereunder to cover such costs; provided, that if this
Agreement is terminated or the sale of GA-EPO covered by the TKT Patent Rights
or which uses the TKT Technology is permanently enjoined in any country or
countries in the MMD Territory accounting for substantially all of the Net Sales
of GA-EPO covered by the TKT Patent Rights or which uses the TKT Technology by
MMD at a time when MMD has not recovered all of the costs advanced by MMD, then
TKT shall pay to MMD ****************************************** by MMD within a
reasonable period of time.
8.6.4. TKT's Second Right to Respond. In the event that MMD elects
not to respond to, defend or prosecute any actions, challenges, infringements,
misappropriations or proceeding by a Third Party alleging infringement described
in Section 8.6. within sixty (60) days of becoming aware of or being notified of
such actions, challenges, infringements, misappropriations or proceedings, then
TKT shall have the option to do so at TKT's sole cost, provided that in such
case all amounts so recovered from any Third Party shall be retained by TKT and
TKT shall have no further obligations to MMD with respect to the response or
defense thereof.
8.6.5. TKT's Second Right to Defend Infringement Actions; Payment
of Royalties by TKT. If MMD does not exercise its right to respond to or defend
against a legal proceeding by a Third Party alleging infringement of a patent or
other intellectual property right as a result of the manufacture, production,
use, distribution for sale or sale of GA-EPO within sixty (60) days of becoming
aware of or being notified of such action, or if MMD initially exercises such
right but subsequently abandons such response or defense, and in either event
such decision by MMD can reasonably be expected to have a material adverse
impact on the sale of GA-EPO in any country, then TKT shall have the option to
do so. If TKT elects to respond to or defend against such action, then the costs
of such response or defense, and any amounts recovered from Third Parties in
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connection with such response or defense, shall be dealt with as provided in
subsection 8.6.3 except that the provisions in such subsection referring to MMD
shall be deemed to refer to TKT and vice versa; provided, however, in no event
shall MMD be required to pay to TKT any portion of such costs except through
credits against royalties otherwise payable to MMD by TKT. If TKT elects to
respond to or defend against such action, is successful in such response or
defense, and has exercised its right under subsection 12.2.4 to terminate this
Agreement with respect to the relevant portion of the MMD Territory and market
GA-EPO in such relevant portion directly or through sublicensees, then TKT shall
pay royalties to MMD based on cumulative Net Sales of GA-EPO covered by the TKT
Patent Rights or which uses the TKT Technology sold by TKT or its Affiliates or
by any sublicensee or distributor of TKT in the country in which TKT has assumed
such right at the rates set forth in Section 7.2 which would apply to sales of
GA-EPO by MMD or its Affiliates. In such event, the provisions of Sections 7.2
through 7.8 shall apply to TKT with respect to the royalties payable by TKT
hereunder and the obligations of MMD with respect to MMD Territory shall apply
mutatis mutandis to TKT with respect to such countries.
8.7. Costs of Acquiring Additional Technology other than Manufacturing
Know-How. In the event that either the R&D Oversight Committee or the
Development Committee determines that it is necessary or desirable for MMD to
acquire any Third Party patent or license in connection with the development or
manufacture of GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology in the MMD Territory, other than patents or licenses which are
included in Manufacturing Know-How, then the costs of acquiring such Third Party
patent or license shall be shared **% by MMD and **% by TKT. The cost sharing
provisions described in this Section 8.7 shall only apply to Third Party patent
or license acquisitions approved unanimously by the R&D Oversight Committee or
the Development Committee.
ARTICLE 9. CONFIDENTIALITY
9.1. Nondisclosure Obligations.
9.1.1. General. Except as otherwise provided in this Article 9,
during the term of this Agreement and for a period of ten (10) years thereafter,
both parties shall maintain in confidence and use only for purposes specifically
authorized under this Agreement (i) confidential information and data received
from the other party resulting from or related to the development of GA-EPO and
(ii) all information and data not described in clause (a) but supplied by the
other party under this Agreement marked "Confidential."
9.1.2. Limitations. For purposes of this Article 9, information
and data described in paragraph (a) or (b) shall be referred to as
"Information." To the extent it is reasonably necessary or appropriate to fulfil
its obligations or exercise
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
its rights under this Agreement, a party may disclose Information it is
otherwise obligated under this Section not to disclose to its Affiliates,
sublicensees, consultants, outside contractors and clinical investigators, on a
need-to-know basis on condition that such entities or persons agree to keep the
Information confidential for the same time periods and to the same extent as
such party is required to keep the Information confidential; and a party or its
sublicensees may disclose such Information to government or other regulatory
authorities to the extent that such disclosure is reasonably necessary to obtain
patents or authorizations to conduct clinical trials of, and to commercially
market, GA-EPO. The obligation not to disclose Information shall not apply to
any part of such Information that (i) is or becomes part of the public domain
other than by unauthorized acts of the party obligated not to disclose such
Information or its Affiliates or sublicensees; (ii) can be shown by written
documents to have been disclosed to the receiving party or its Affiliates or
sublicensees by a Third Party, provided such Information was not obtained by
such Third Party directly or indirectly from the other party under this
Agreement pursuant to a confidentiality agreement; (iii) prior to disclosure
under this Agreement, was already in the possession of the receiving party or
its Affiliates or sublicensees, provided such Information was not obtained
directly or indirectly from the other party under this Agreement pursuant to a
confidentiality agreement; (iv) can be shown by written documents to have been
independently developed by the receiving party or its Affiliates without breach
of any of the provisions of this Agreement; or (v) is disclosed by the receiving
party pursuant to oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand issued by a court or
governmental agency; provided that the receiving party notifies the other party
immediately upon receipt thereof (and provided that the disclosing party
furnishes only that portion of the Information which it is advised by counsel is
legally required).
9.2. Materials.
9.2.1. ******************************. ***********
*****************************************************************
****************************************************************
*******************************************************
***************************************************************
**********************************************************
***********************************************************
**************************************************************
****************************************************************
*****************************************************************
****************************************************************
*********************************************************
*******************************************.
9.2.2. Samples. Samples of compounds synthesized, purified or
developed in the course of the Research and
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Development Program shall not be supplied or sent by either party to any Third
Party, other than to regulatory agencies or for use in clinical trials, unless
protected by an appropriate materials transfer agreement. Samples of compounds
other than those described above provided by one party (the "supplying party")
to the other party (the "receiving party") in the course of the Research Program
shall not be supplied or sent by the receiving party to any Third Party, other
than to regulatory agencies or for use in clinical trials, without the written
consent of the supplying party.
9.3. Terms of this Agreement. TKT and MMD each agree not to disclose any
terms or conditions of this Agreement to any Third Party without the prior
consent of the other party, except as required by applicable law. If TKT
determines that it is required to file with the Securities and Exchange
Commission or other governmental agency this Agreement as an exhibit to the
registration statement relating to the IPO or otherwise, TKT shall request
confidential treatment of such portions of this Agreement as it and MMD shall
together determine. Notwithstanding the foregoing, within 15 days after the
execution of this Agreement, MMD and TKT shall agree upon the substance of
information that can be used as a routine reference in the usual course of
business to describe the terms of this transaction, and MMD and TKT may disclose
such information, as modified by mutual agreement from time to time, without the
other party's consent; provided, however, that if either party determines that
excessive use of such statement is made by the other party, then the party
determined to be using such statement excessively shall, upon notice by the
other party, cease making such statement.
9.4. Publications.
9.4.1. Procedure. Each party recognizes the mutual interest in
obtaining valid patent protection. Consequently, either party and its employees
or consultants or any other Third Party wishing to make a publication (including
any oral disclosure made without obligation of confidentiality) relating to work
performed by such party as part of the Program (the "Publishing Party") shall
transmit to the other party (the "Reviewing Party") a copy of the proposed
written publication at least ******************** prior to submission for
publication, or an abstract of such oral disclosure at least *****************
prior to submission of the abstract or the oral disclosure, whichever is
earlier. The Reviewing Party shall have the right (a) to propose modifications
to the publication for patent reasons, (b) to request a delay in publication or
presentation in order to protect patentable information, or (c) to request that
the information be maintained as a trade secret and, in such case, the
Publishing Party shall not make such publication.
9.4.2. Delay. If the Reviewing Party requests a delay as described
in subsection 9.4.1. (b) the Publishing Party shall delay submission or
presentation of the publication for a
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
period of **************** to enable patent applications protecting each party's
rights in such information to be filed.
9.4.3. Resolution. Upon the receipt of written
approval of the Reviewing Party, the Publishing Party may proceed
with the written publication or the oral presentation.
9.5. Injunctive Relief. The parties hereto understand and agree that
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Article 9 by either party or their employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf. Accordingly, each party shall be entitled to the granting of injunctive
relief by a court of competent jurisdiction against any action that constitutes
any such breach of this Article 9. It is understood that such injunctive relief
is intended solely as provisional relief pending the dispute resolution
procedures described in Section 13.6 hereof.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
10.1. General.
10.1.1. Authorization. Each party represents and warrants to the
other that it has the legal right and power to enter into this Agreement, to
extend the rights and licenses granted to the other in this Agreement, and to
fully perform its obligations hereunder, and that the performance of such
obligations will not conflict with its charter documents or any agreements,
contracts or other arrangements to which it is a party.
10.1.2. No Inconsistent TKT Arrangements. TKT represents and
warrants that it has full power and authority to grant the license set forth in
Article 3 hereof and that there are no agreements, assignments, encumbrances or
other arrangements inconsistent with this Agreement including, without
limitation, any obligations to governmental agencies, private foundations or
corporate entities resulting from acceptance of research grant monies, equity
investments, corporate sponsorships or otherwise.
10.1.3. Exclusivity. TKT represents and warrants that MMD is the
exclusive licensee of the TKT Technology owned by TKT and the TKT Patent Rights
with respect to the manufacture, use or sale of GA-EPO in the MMD Territory.
10.1.4. Licensed Technology. TKT represents and warrants that, as
of the Effective Date, the TKT Patent Rights and TKT Technology do not include
any intellectual property licensed to TKT from a Third Party other than those
included in a License Agreement *********************************************
**************************************************************.
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10.2. Patent Validity.
10.2.1. Title. TKT represents and warrants that as of the
Effective Date, it possesses the exclusive right, title and interest in and to
the TKT Technology owned by TKT and the TKT Patent Rights and that it has the
full legal right and power to: (i) enter into the obligations set forth in this
Agreement; and (ii) grant the rights and licenses set forth in Article 3.
10.2.2. No Encumbrances. TKT represents and warrants as of the
Effective Date, to the best of its actual knowledge and based upon the advice of
its counsel, to the best of such counsel's actual knowledge without undertaking
any independent investigation, (i) that there were no encumbrances, liens or
other claims affecting the TKT Technology owned by TKT or the TKT Patent Rights
and (ii) that such TKT Technology and TKT Patent Rights were valid, enforceable
and free from infringement, and that there were no pending or threatened
actions, suits or proceedings relating thereto or to GA-EPO.
10.2.3. Non-Infringement. TKT represents and warrants that as of
the Effective Date, to the best of its actual knowledge and based upon the
advice of its counsel, to the best of such counsel's actual knowledge without
undertaking any independent investigation, there were no legal obstacles,
including no patent rights or other proprietary rights of others, which will
prevent it from carrying out its obligations under this Agreement or prevent MMD
from carrying out its obligations under this Agreement or which will be
infringed by the performance of either party's obligations under this Agreement.
10.3. Financial Statements. TKT represents and warrants that Schedule 10.3
hereto sets forth TKT's most recent regularly prepared balance sheet, that such
balance sheet is true and correct and fairly presents the financial condition of
TKT as of its date, and that the total assets set forth thereon are less than
$10,000,000.
ARTICLE 11. INDEMNITY
11.1. MMD Indemnity Obligations. In the absence of TKT's negligence or a
breach of representation, warranty, covenant or agreement by TKT, MMD agrees to
defend, indemnify and hold TKT, its Affiliates and their respective employees
and agents harmless from all claims, losses, damages or expenses arising as a
result of (a) actual or asserted violations of any applicable law or regulation
by MMD or its Affiliates or sublicensees by virtue of which GA-EPO covered by
the TKT Patent Rights or which uses the TKT Technology manufactured, distributed
or sold shall be alleged or determined to be adulterated, misbranded, mislabeled
or otherwise not in compliance with any applicable law or regulation or (b)
claims for bodily injury, death or property damage attributable to MMD's
performance of its obligations under this Agreement or the manufacture,
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distribution, sale or use of GA-EPO covered by the TKT Patent Rights or which
uses the TKT Technology by MMD or its Affiliates or sublicensees.
11.2. TKT Indemnity Obligations. In the absence of MMD's negligence or a
breach of representation, warranty, covenant or agreement by MMD, TKT agrees to
defend, indemnify and hold MMD, its Affiliates and sublicensees and their
respective employees and agents harmless from all claims, losses, damages and
expenses arising as a result of (a) actual or asserted violations of any
applicable law or regulation by TKT or its Affiliates or licensees by virtue of
which GA-EPO covered by the TKT Patent Rights or which uses the TKT Technology
manufactured, distributed or sold shall be alleged or determined to be
adulterated, misbranded, mislabeled or otherwise not in compliance with any
applicable law or regulation or (b) claims for bodily injury, death or property
damage attributable to TKT's performance of its obligations under this
Agreement.
11.3. Procedure. A party or any of its Affiliates or their respective
employees or agents (the "Indemnitee") that intends to claim indemnification
under this Article 11 shall promptly notify the other party (the "Indemnitor")
of any claim, loss, damage, or expenses in respect of which the Indemnitee
intends to claim such indemnification reasonably promptly after the Indemnitee
is aware thereof, and the Indemnitor shall assume the defense of any related
third party action, suit or proceeding with counsel mutually satisfactory to the
parties; provided, however, that an Indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the Indemnitor, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Article 11 shall not apply to
amounts paid in settlement of any claim, loss, damage or expense if such
settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure of an Indemnitee to deliver
notice to the Indemnitor within a reasonable time after becoming aware of any
such matter, if prejudicial to the Indemnitor's ability to defend such action,
shall relieve the Indemnitor of any liability to the Indemnitee under this
Article 11. The Indemnitor shall not have any liability to any Indemnitee
otherwise than under this Article 11. The Indemnitee under this Article 11 and
its employees and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any matter covered by this
indemnification. The Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing a successful claim for indemnity hereunder.
11.4. Insurance. For the period starting with the First
Commercial Sale of GA-EPO MMD and TKT shall each maintain product
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
liability insurance with respect to development, manufacture and sale of GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology in reasonable
amounts determined after consultation with each other, for the term of this
Agreement (if such insurance is an occurrence-basis policy) or for an additional
********* after the expiration or termination of this Agreement (if such
insurance is a claims-made basis policy).
ARTICLE 12. TERM AND TERMINATION
12.1. Expiration. Unless terminated earlier pursuant to Section 12.2, this
Agreement shall expire and the licenses granted by TKT to MMD hereunder shall
become fully paid, with respect to each country in the MMD Territory, upon the
later of (i) ten years after the First Commercial Sale of GA-EPO covered by the
TKT Patent Rights or which uses the TKT Technology by MMD or its Affiliates or
sublicensees in such country and (ii) the last to expire of any of the then
existing patents included in the TKT Patent Rights in such country.
12.2. Termination. This Agreement may be terminated in the following
circumstances:
12.2.1. By either party by reason of a material breach not
described in subsection 12.2.5 that the breaching party fails to remedy within
90 days after written notice thereof by the non-breaching party;
12.2.2. By MMD upon 180 days prior written notice with respect to
all or a portion of the MMD Territory, if, in its reasonable judgment, MMD
determines that toxicities or side effects directly attributable to GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology have rendered
it such a safety risk to the patient population that GA-EPO covered by the TKT
Patent Rights or which uses the TKT Technology is commercially nonviable;
12.2.3. By MMD, upon 180 days prior written notice, with respect
to any portion of the MMD Territory if, after consultation with TKT, MMD
determines that GA-EPO covered by the TKT Patent Rights or which uses the TKT
Technology is commercially nonviable;
12.2.4. By TKT, with respect to the country or relevant portion of
the MMD Territory, in the event that TKT elects to respond to or defend against
a legal proceeding by a Third Party alleging infringement of a patent or other
intellectual property right as a result of the manufacture, production, use,
distribution for sale or sale of GA-EPO in any country in the MMD Territory
pursuant to subsection 8.6.5 provided that the failure to so respond or defend
against such action would have had a material adverse impact on MMD's ability to
market GA-EPO, either directly or indirectly through sublicensees, in such
country or relevant portion of the MMD Territory;
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
12.2.5. By TKT, with respect to the relevant portion of the MMD
Territory, in the event that either (i) MMD fails to use its best efforts to
meet the milestones described in Appendix A applicable to such portion of the
MMD Territory or (ii) MMD fails to use its best efforts to commercialize GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology in such
portion of the MMD Territory using commercially reasonable means consistent with
those used for MMD products with similar commercial potential, and, in either or
both events, MMD fails to remedy or take reasonable action to initiate a remedy
of such default within 90 days after notice thereof by TKT; provided that
termination by TKT pursuant to this subsection 12.2.5 shall be TKT's sole remedy
for any such failure by MMD to meet such milestones or commercialize GA-EPO
covered by the TKT Patent Rights or which uses the TKT Technology;
12.2.6. If a competing GA-EPO product is introduced into any
country in the MMD Territory, and TKT does not have issued patents or pending
claims under the patents included in the TKT Patent Rights which (if issued, in
the case of pending claims) will enable a patent infringement action to be
initiated, then MMD has the right to terminate as to any such country or the
Territory Block in which it is included on 180 days notice; or
12.2.7. By either party upon bankruptcy, insolvency, dissolution
or winding up of the other.
12.3. Effect of Termination. Expiration or termination of this Agreement
shall not relieve the parties of any obligation accruing prior to such
expiration or termination. The provisions of Section 3.2 (with respect only to
licenses granted prior to the time of expiration or termination and subject to
the terms described below) and Article 7 (with respect only to milestone
payments and royalties accrued at the time of expiration or termination but not
yet paid), Article 8, Article 9 and Article 11 shall survive the expiration or
termination of this Agreement. In the event of a termination of this Agreement
pursuant to subsections 12.2.1 to 12.2.7, then all TKT Patent Rights licensed
hereunder with respect to the portion of the MMD Territory terminated will be
returned to TKT and, except in the event that this Agreement is terminated by
TKT pursuant to subsection 12.2.1, copies of all regulatory filings and related
supporting and other materials prepared in connection with such terminated
portion of the MMD Territory shall also be delivered to and available for use by
TKT, and in any event MMD will immediately cease to sell GA-EPO covered by the
TKT Patent Rights or which uses the TKT Technology in the relevant portion of
the MMD Territory with respect to which this Agreement is terminated. In the
event of termination of this Agreement in all countries within the MMD
Territory, MMD will ***************************
*****************************************************************
*****************************************************************
*************************************************************
*************************************************************** ***********.
Except in the event that this Agreement is
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terminated by TKT pursuant to subsection 12.2.1, MMD shall, to the extent
legally permissible, take all additional action reasonably necessary to assign
all of its right, title and interest in and transfer possession and control to
TKT of the regulatory filings prepared by MMD to the extent that such filings
relate to GA-EPO covered by the TKT Patent Rights or which use the TKT
Technology and any regulatory approvals received by MMD to the extent that such
approvals relate to GA-EPO covered by the TKT Patent Rights or which use the
TKT Technology; provided, however, that MMD may retain a joint ownership
interest in such filings and approvals to the extent that such filings or
approvals are necessary under this Agreement for portions of the MMD Territory
with respect to which this Agreement has not been terminated or for the
development or commercialization by MMD of products other than GA-EPO covered by
the TKT Patent Rights or which use the TKT Technology. In the event of a
termination of this Agreement other than by TKT pursuant to subsections 12.2.1
or 12.2.5, TKT shall be obligated to pay to MMD compensation on such
commercially reasonable terms as shall be determined by mutual agreement of TKT
and MMD for the use of all licenses granted by MMD under Section 3.2.
ARTICLE 13. MISCELLANEOUS
13.1. Force Majeure. Neither party shall be held liable or responsible to
the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party, including but not limited to fire, floods,
embargoes, war, acts of war (whether war is declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labor disturbances, acts of
God or acts, omissions or delays in acting by any governmental authority or the
other party.
13.2. Assignment. This Agreement may not be assigned or otherwise
transferred by either party without the consent of the other party; provided,
however, that either TKT or MMD may, without such consent, assign its rights and
obligations under this Agreement (i) in connection with a corporate
reorganization, to any Affiliate, all or substantially all of the equity
interest of which is owned and controlled by such party or its direct or
indirect parent corporation, or (ii) in connection with a merger, consolidation
or sale of substantially all of such party's assets to an unrelated third party;
provided, however, that such party's rights and obligations under this Agreement
shall be assumed by its successor in interest in any such transaction and shall
not be transferred separate from all or substantially all of its other business
assets, including those business assets that are the subject of this Agreement.
Any purported assignment in violation of the preceding sentence shall be void.
Any permitted assignee shall assume all obligations of its assignor under this
Agreement.
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13.3. Severability. Each party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the parties would not have entered into this Agreement
without the invalid provisions.
13.4. Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone, personal delivery or courier) or courier, postage
prepaid (where applicable), addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor and shall be effective upon receipt by the
addressee.
If to
TKT: Transkaryotic Therapies, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to: Xxxxxx & Dodge
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to MMD: Xxxxxx Xxxxxxx Dow Inc.
0000 Xxxx Xxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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46
with copies to: Xxxxxx Xxxxxxx Dow Inc.
0000 X. Xxxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
Attention: General Patent Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Shook, Hardy & Bacon, P.C.
One Kansas City Place
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
13.5. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
choice of law provisions thereof.
13.6. Dispute Resolution. Any disputes arising between the parties
relating to, arising out of or in any way connected with this Agreement or any
term or condition hereof, or the performance by either party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
promptly presented to the Chief Executive Officers of TKT and MMD for resolution
and if the Chief Executive Officers or their designees cannot promptly resolve
such disputes, then such dispute shall be finally resolved by binding
arbitration, except that disputes arising within the Development Committee shall
be ultimately resolved, without the use of arbitration, by the Chief Executive
Officer of MMD. Whenever a party shall decide to institute arbitration
proceedings, it shall give written notice to that effect to the other party. The
party giving such notice shall refrain from instituting the arbitration
proceedings for a period of sixty (60) days following such notice. Any
arbitration hereunder shall be conducted under the commercial rules of the
American Arbitration Association. Each such arbitration shall be conducted in
the English language by a panel of three arbitrators appointed in accordance
with such rules; provided, however, that both parties hereto shall be entitled
to representation by counsel, to appear and present written and oral evidence
and argument and to cross-examine witnesses presented by the other party. The
arbitral panel (i) shall have the authority to grant specific performance, (ii)
may allocate between the parties the costs of arbitration in such equitable
manner as they may determine, but (iii) shall not render an arbitral award
contrary to the provisions of this Agreement. The arbitral award shall be in
writing and the arbitral panel shall provide written reasons for its award. The
award of the arbitral panel shall be final and binding upon the parties hereto.
Any such arbitration shall be held in Chicago, Illinois, or any other mutually
agreed
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47
location. Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be. Notwithstanding the
provisions of this Section 13.7, in the event of a material breach of this
Agreement by TKT that TKT fails to remedy within 90 days after written notice
thereof by MMD, MMD shall have the right to bring an action for specific
performance by TKT or its Affiliates of TKT's obligations hereunder, to seek an
injunction with respect to any action by TKT or its Affiliates inconsistent with
any of TKT's obligations hereunder or to bring an action against TKT or its
Affiliates at law or in equity in any court or other tribunal in which such
action may properly be brought.
13.7. Entire Agreement. This Agreement, together with the Class D Stock
Purchase Agreement, contains the entire understanding of the parties with
respect to the subject matter hereof and supersedes the Letter Agreement dated
March 18, 1994 between TKT and MMD and the Original License Agreement. All
express or implied agreements and understandings, either oral or written,
heretofore made are expressly merged in and made a part of this Agreement. This
Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by both parties hereto.
13.8. Headings. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
13.9. Independent Contractors. It is expressly agreed that TKT and MMD
shall be independent contractors and that the relationship between the two
parties shall not constitute a partnership, joint venture or agency. Neither TKT
nor MMD shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior consent of the other party to do so.
13.10. Agreement Not to Solicit Employees. During the term of this
Agreement and for a period of two (2) years following the termination of this
Agreement, TKT and MMD agree not to seek to persuade or induce any employee of
the other company to discontinue his or her employment with that company in
order to become employed by or associated with any business, enterprise or
effort that is associated with its own business.
13.11. Exports. The parties acknowledge that the export of technical data,
materials or products is subject to the exporting party receiving any necessary
export licenses and that the parties cannot be responsible for any delays
attributable to export controls which are beyond the reasonable control of
either party. TKT and MMD agree not to export or re-export, directly or
indirectly, any information, technical data, the direct product of such data,
samples or equipment received or generated under
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48
this Agreement in violation of any governmental regulations which may be
applicable, including, but not limited to, the Export Administration Act of
1979, as amended, its rules and regulations, including, but not limited to, Part
779 of the United States Export Control Regulations, published by the United
States Department of Commerce, and other applicable export control laws. TKT and
MMD agree to obtain similar covenants from their licensees, sublicensees and
contractors with respect to the subject matter of this Section 13.12.
13.12. Waiver. The waiver by either party hereto of any right hereunder or
the failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
13.13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
TRANSKARYOTIC THERAPIES, INC.
By:/s/ Xxxxxxx X. Xxxxxx
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Title: President and
Chief Executive Officer
XXXXXX XXXXXXX DOW INC.
By: /s/ Xxxxx X. Xxxxxxx
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Title: V.P., Licensing and Business
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Development
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
APPENDIX A
Milestones
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
SCHEDULE 1.23
TKT PATENT RIGHTS
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 1.24
TKT TECHNOLOGY WITHOUT SUBLICENSE RIGHTS
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Schedule 7.1
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