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[CERTAIN INFORMATION HAS BEEN OMITTED HEREIN PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2. THE REDACTED MATERIAL
HAS BEEN SEPARATELY FILED WITH THE COMMISSION.]
EXHIBIT 10.1
COLLABORATION AGREEMENT
BETWEEN
BAYER CORPORATION
AND
THE IMMUNE RESPONSE CORPORATION
2
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS.................................................. 2
1.1 "Additional Field"........................................... 2
1.2 "Additional Gene"............................................ 2
1.3 "Affiliate".................................................. 2
1.4 [CONFIDENTIAL TREATMENT REQUESTED]........................... 2
1.4.1 [CONFIDENTIAL TREATMENT REQUESTED]..................... 2
1.5 "Collaborative Program"...................................... 2
1.6 "Commencement Date".......................................... 2
1.7 [CONFIDENTIAL TREATMENT REQUESTED]........................... 2
1.8 "Development Program"........................................ 2
1.9 [CONFIDENTIAL TREATMENT REQUESTED]........................... 2
1.10 "FDA"........................................................ 2
1.11 [CONFIDENTIAL TREATMENT REQUESTED]........................... 3
1.12 "Field"...................................................... 3
1.12.1 "FIELDS"......................................... 3
1.13 "First Commercial Sale"..................................... 3
1.13.1 [CONFIDENTIAL TREATMENT REQUESTED].................... 3
1.14 "Gene"....................................................... 3
1.15 [CONFIDENTIAL TREATMENT REQUESTED]........................... 3
1.16 "Hemophilia A Field"......................................... 3
1.17 "Improvements"............................................... 3
1.18 "Know-How"................................................... 3
1.19 [CONFIDENTIAL TREATMENT REQUESTED]........................... 4
1.20 "Net Sales".................................................. 4
1.21 "Patent Party"............................................... 4
1.22 "Patent Rights".............................................. 4
1.23 "Person"..................................................... 4
1.24 "Phases of Clinical Development"............................. 5
"Phase I" ................................................. 5
"Phase II" ................................................. 5
"Phase III" ................................................. 5
1.25 "PLA"........................................................ 5
1.26 "Product".................................................... 5
1.27 "Research Program"........................................... 5
1.28 "Research Term".............................................. 5
1.29 "Royalty Term"............................................... 6
1.30 "Steering Committee"......................................... 6
1.31 "Territory".................................................. 6
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1.32 "Third Party"............................................. 6
1.33 "Valid Patent Claim"...................................... 6
ARTICLE 2 RESEARCH PROGRAM.......................................... 6
2.1 Research Procedures....................................... 6
2.1.1 Immune Response Manufacture...................... 7
2.1.2 Conduct of Research.............................. 7
2.1.3 Technical Assistance............................. 7
2.1.4 Subcontracts..................................... 7
2.2 Funding of the Research Program........................... 8
2.2.1 Initial Funding.................................. 8
2.2.2.1 Product Substitution............. 8
2.2.2 Additional Funding............................... 9
2.2.3 Revised Budgets.................................. 9
2.2.4 Use of Funding................................... 9
2.3 Research Records and Reports.............................. 9
2.3.1 Records.......................................... 9
2.3.2 Inspection of Records............................ 9
2.3.3 Research Reports and Information................. 9
2.4 Term of Research Program.................................. 10
2.4.1 Initial Term..................................... 10
2.4.2 Extended Term.................................... 10
ARTICLE 3 DEVELOPMENT PROGRAM....................................... 10
3.1 Clinical Development...................................... 10
3.1.1 Conduct of Human Clinical Trials................. 10
3.1.2 Compliance....................................... 10
3.1.3 Regulatory Filings and Applications.............. 10
3.1.4 Subcontracts..................................... 11
3.1.5 Supply of Clinical Product....................... 11
3.2 Funding Responsibilities.................................. 11
3.3 Development Reports and Information....................... 12
3.4 Term of Development Program............................... 12
3.5 Excused Performance....................................... 12
ARTICLE 4 MANAGEMENT OF THE COLLABORATIVE PROGRAM................... 13
4.1 Steering Committee........................................ 13
4.1.1 Composition of the Steering Committee............ 13
4.1.2 Meetings......................................... 13
4.1.3 Powers........................................... 13
4.1.4 Committee Actions................................ 13
4.2 Disagreements............................................. 14
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4.3 Steering Committee Reports......................................... 14
4.4 Project Leaders.................................................... 14
4.5 Availability of Employees.......................................... 15
4.6 Visit to Facilities................................................ 15
4.7 Conflict between Exhibits and Agreement............................ 15
ARTICLE 5 LICENSE GRANTS..................................................... 15
5.1 License Grant to Bayer............................................. 15
5.1.1 License Grant............................................. 15
5.1.2 Sublicense Rights......................................... 16
5.1.3 Reservation of Rights..................................... 16
5.1.4 License Grant to Bayer Outside the Field(s)............... 16
5.1.5 Bankruptcy or Insolvency.................................. 16
5.2 License Grant to Immune Response................................... 16
5.2.1 License Grant............................................. 16
5.2.2 Sublicense Rights......................................... 17
5.2.3 License Grant to Immune Response Outside the Field(s)..... 17
5.3 Additional Genes and Fields........................................ 17
5.4 License to Third Party Patent Rights............................... 18
5.4.1 Immune Response Right to Negotiate........................ 18
5.4.2 Bayer Right to Negotiate.................................. 18
ARTICLE 6 LICENSE FEE, MILESTONES AND ROYALTIES.............................. 18
6.1 License Fee........................................................ 18
6.2 Milestone Payments................................................. 18
6.3 Royalties.......................................................... 19
6.4 Third Party Royalties.............................................. 19
6.5 Favored Financial Terms............................................ 19
ARTICLE 7 ROYALTY REPORTS AND ACCOUNTING..................................... 20
7.1 Reports, Exchange Rates............................................ 20
7.2 Audits............................................................. 21
7.3 Confidential Financial Information................................. 21
ARTICLE 8 PAYMENTS........................................................... 21
8.1 Payment Terms...................................................... 22
8.2 Payment Method..................................................... 22
8.3 Exchange Control................................................... 22
8.4 Withholding Taxes.................................................. 22
8.5 Late Payments...................................................... 22
ARTICLE 9 INFRINGEMENT ACTIONS BY THIRD PARTIES.............................. 22
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ARTICLE 10 CONFIDENTIALITY................................................ 23
10.1 Nondisclosure Obligations...................................... 23
10.1.1 Permitted Disclosures................................. 23
10.1.2 Exclusions............................................ 24
10.1.3 Terms of the Agreement................................ 24
ARTICLE 11 PUBLICATION.................................................... 24
11.1 Notice of Publication.......................................... 24
11.2 Timing of Publication.......................................... 25
ARTICLE 12 INVENTIONS AND PATENTS......................................... 25
12.1 Ownership of Inventions........................................ 25
12.2 Patent Prosecution and Maintenance............................. 25
12.3 Patent Costs................................................... 26
12.4 Enforcement of Patent Rights................................... 26
12.5 No Other Technology Rights..................................... 27
ARTICLE 13 TERM AND TERMINATION........................................... 27
13.1 Term and Expiration............................................ 27
13.2 Termination for Cause.......................................... 27
13.3 Material Breach................................................ 28
13.4 Termination for Technical Failure.............................. 28
13.5 Termination for Commercial Infeasibility....................... 28
13.6 Effect of Expiration and Termination........................... 29
13.7 Licenses under Sections 5.1.4 and 5.2.3 After Expiration and
Termination.................................................... 29
13.8 Acquisition of Immune Response................................. 29
13.9 Failure of Bayer to Purchase Immune Response Common Stock...... 30
ARTICLE 14 INDEMNITY...................................................... 30
14.1 Direct Indemnity............................................... 30
14.2 Other Indemnity................................................ 30
14.3 Procedure...................................................... 31
14.4 Insurance...................................................... 31
ARTICLE 15 REPRESENTATIONS AND WARRANTIES................................. 32
15.1 Corporate Existence and Power.................................. 32
15.2 Authorization and Enforcement of Obligations................... 32
15.3 Consents....................................................... 32
15.4 No Conflict.................................................... 32
15.5 DISCLAIMER OF WARRANTIES....................................... 32
15.6 Technical Disclosures.......................................... 33
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ARTICLE 16 FORCE MAJEURE.................................................. 33
ARTICLE 17 ASSIGNMENT..................................................... 33
ARTICLE 18 SEVERABILITY................................................... 34
ARTICLE 19 MISCELLANEOUS.................................................. 34
19.1 Notices........................................................ 34
19.2 Applicable Law................................................. 35
19.3 Entire Agreement............................................... 35
19.4 Headings....................................................... 35
19.5 Independent Contractors........................................ 35
19.6 Waiver......................................................... 35
19.7 Counterparts................................................... 36
EXHIBIT A DEVELOPMENT WORK PLAN.......................................... 37
FVIII Gene Therapy Development Plan
IRC/Bayer Collaboration................................................... 37
EXHIBIT B RESEARCH WORK PLAN............................................. 41
FVIII Gene Therapy Research Plan
IRC/Bayer Collaboration................................................... 41
EXHIBIT C IMMUNE RESPONSE PATENTS AND PATENT
APPLICATIONS................................................... 43
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COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT dated as of July 8, 1996 (the
"Agreement"), is entered into between THE IMMUNE RESPONSE CORPORATION, a
Delaware corporation ("Immune Response"), having a place of business at 0000
Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, and BAYER CORPORATION, an Indiana
corporation ("Bayer"), with offices at 000 Xxxxxx Xxx, Xxxxxxxx, Xxxxxxxxxx
00000-0000.
WITNESSETH:
WHEREAS, Immune Response owns or has acquired, including without
limitation acquisition from University of Connecticut through Immune Response's
acquisition of TargeTech, Inc. (the original exclusive University of Connecticut
licensee), certain rights in certain technology regarding the delivery of human
genes for use in the prevention and treatment of diseases, states and conditions
in humans.
WHEREAS, Bayer owns or has rights in [CONFIDENTIAL TREATMENT REQUESTED]
of human factor VIII.
WHEREAS, Immune Response and Bayer desire to collaborate to conduct
certain research and develop a product using Immune Response's gene delivery
technology to deliver, initially, Bayer's human factor VIII gene to a mammalian
cell for use in the treatment of hemophilia A in humans.
WHEREAS, Bayer desires to fund research conducted primarily by Immune
Response, and desires to be primarily responsible for development and
commercialization of certain product(s) resulting from such research and
development that combine Immune Response delivery technology with Xxxxx xxxx
technology.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants set forth below, the parties hereby agree as follows:
8
ARTICLE 1
DEFINITIONS
For purposes of the Agreement, the terms defined in this Article 1
shall have the respective meanings set forth below:
1.1 "Additional Field" shall mean, the treatment of any blood
coagulation disorder in humans using Gene Delivery technology for targeting one
or more Additional Gene into a mammalian cell of a patient.
1.2 "Additional Gene" shall mean full length or truncated cDNA for a
specific human blood coagulation factor, other than factor VIII, which the
parties mutually agree to add to the Collaborative Program and the Agreement
pursuant to Section 5.3 (Additional Gene and Fields) below.
1.3 "Affiliate" shall mean, with respect to either Party, any entity
which directly or indirectly controls, is controlled by, or is under common
control with, such Party. An entity shall be regarded as in control of a Party
if it owns, or directly or indirectly controls, fifty percent (50%) or more of
the voting stock or other ownership interest of the other Party, or if it
directly or indirectly possesses the power to direct or cause the direction of
the management and policies of the other Party by any means whatsoever.
1.4 [CONFIDENTIAL TREATMENT REQUESTED]
1.4.1 [CONFIDENTIAL TREATMENT REQUESTED]
1.5 "Collaborative Program" shall mean, collectively, the Research
Program and the Development Program.
1.6 "Commencement Date" shall mean the date of the last Party's
signature hereto.
1.7 [CONFIDENTIAL TREATMENT REQUESTED]
1.8 "Development Program" shall mean the program of clinical
development, application for regulatory approval and related activities
described generally in the work plan set forth in Exhibit A, as revised from
time to time as provided in the Agreement.
1.9 [CONFIDENTIAL TREATMENT REQUESTED]
1.10 "FDA" shall mean the United States Food and Drug Administration,
or the successor thereto.
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1.11 [CONFIDENTIAL TREATMENT REQUESTED]
1.12 "Field" shall mean any one of the Hemophilia A Field or the
Additional Field(s), if any; or
1.12.1 "FIELDS" shall mean, collectively, the Hemophilia A Field
and the Additional Field(s).
1.13 "First Commercial Sale" shall mean, with respect to any Product,
the first sale for use or consumption by the general public of such Product in
any country in the Territory after required marketing approval and pricing
approval, if any, has been granted by the governing health authority of such
country.
1.13.1 [CONFIDENTIAL TREATMENT REQUESTED]
1.14 "Gene" shall mean any one of the Factor VIII Gene or the
Additional Gene(s), if any.
1.15 [CONFIDENTIAL TREATMENT REQUESTED]
1.16 "Hemophilia A Field" shall mean, with respect to the Factor VIII
Gene, the treatment of hemophilia A in humans by the administration, targeting
and expression of the Factor VIII Gene into a mammalian cell of a patient.
1.17 "Improvements" shall mean all patentable or unpatentable
inventions, know-how, discoveries, technology and information of any type
whatsoever, including, without limitation, compositions, methods, processes,
techniques and the uses thereof, which are conceived, developed or reduced to
practice, as a result of and during the term of the Research Program, solely or
jointly by employees or others acting on behalf of Immune Response or Bayer,
which (a) incorporate, use, derive from, are based on, or could not be
conceived, developed or reduced to practice but for the use of the Gene Delivery
Technology or Factor VIII Gene and/or Additional Genes, or (b) cannot be
practiced without infringing a Patent Right of the Gene Delivery Technology.
1.18 "Know-How" shall mean all information and data which is not
generally known to the public including, but not limited to, formulae,
procedures, protocols, techniques and results of experimentation and testing,
which are necessary or useful to make, use, develop, sell or seek regulatory
approval in any country in the Territory to market a Product for use in the
applicable Field, which is owned by or licensed to Immune Response or Bayer
(other than licensed from the other party pursuant to the Agreement) on the date
of the Agreement or during the term of the Collaborative Program; all to the
extent and only to the extent that Immune Response or
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Bayer now has or hereafter will have the right to grant licenses, immunities or
other rights thereunder.
1.19 [CONFIDENTIAL TREATMENT REQUESTED]
1.20 "Net Sales" shall mean, with respect to any Product, the invoiced
sales price billed to Third Party customers by Bayer, its Affiliates and
sublicensees of such Product, less, to the extent actually incurred by Bayer,
its Affiliates or sublicensees (a) credits, allowances, discounts and rebates
to, and charge backs from the account of such Third Party customers for spoiled,
damaged, out-dated and returned Product; (b) freight and insurance costs in
transporting such Product in final form to such customers; (c) trade discounts,
cash discounts, quantity discounts, rebates and other price reduction programs;
(d) sales, value-added and other direct taxes incurred; and (e) customs duties,
surcharges and other governmental charges incurred in connection with the
exportation or importation of such Product in final form.
1.21 "Patent Party" shall mean, with respect to any Patent Right, (a)
the party which solely owns or has in-licensed such Patent Right (other than
from the other party pursuant to the Agreement), or (b) in the case of Patent
Rights which claim Joint Inventions (as defined in Section 12.1 below), the
party that the Steering Committee agrees has made the greater technological
contribution to the Joint Invention.
1.22 "Patent Rights" shall mean (a) all patent applications heretofore
or hereafter filed or having legal force in any country within the Territory
which are owned by or licensed to Immune Response or Bayer (other than licensed
from the other party pursuant to the Agreement) on the date of the Agreement or
during the term of the Agreement, and which claim a Product, an Improvement or
the process of manufacture or use of a Product in the applicable Field or
otherwise are necessary or useful to make, use, develop, sell or seek regulatory
approval in any country in the Territory to market a Product for use in the
applicable Field; (b) all patents that have issued or in the future issue
therefrom, including utility, model and design patents and certificates of
invention; and (c) all divisionals, continuations, continuations-in-part,
reissues, renewals, extensions or additions to any such patents and patent
applications; all to the extent and only to the extent that Immune Response or
Bayer now has or hereafter will have the right to grant licenses, immunities or
other rights thereunder. Immune Response Patent Rights as they exist on the
dates of Exhibit C, including updates thereto, are identified in Exhibit C which
is attached hereto and incorporated herein. The parties intend that the first
Exhibit C attached hereto include all Immune Response's Patent Rights that exist
at the time the parties enter into this agreement that are or may be required
for Bayer's practice of Product(s) hereunder. Therefore, if at any time it is
discovered that such Patent Rights were not but should have been included in
Exhibit C, the parties agree to amend Exhibit C accordingly.
1.23 "Person" shall mean an individual, corporation, partnership,
trust, business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship,
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unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.
1.24 "Phases of Clinical Development" shall mean as follows:
"Phase I" shall mean that portion of the clinical development
program which generally provides for the first introduction into humans of a
product with the primary purpose of determining safety, metabolism and
pharmacokinetic properties and clinical pharmacology of the product, as more
closely defined by the rules and regulations of the Food and Drug Administration
(FDA) and corresponding rules and regulations in other countries;
"Phase II" shall mean that portion of the clinical
development program which provides for the initial trials of a product on a
limited number of patients for the primary purpose of evaluating safety, dose
ranging and efficacy in the proposed therapeutic indication, as more closely
defined by the rules and regulations of the FDA and corresponding rules and
regulations in other countries;
"Phase III" shall mean that portion of the clinical
development program which provides for the continued trials of a product, in
coordination with regulatory authorities, on a statistically significant number
of patients for proof of the safety and efficacy of a product for the desired
claims and indications and is conducted for the purposes of obtaining an
approvable PLA, as more closely defined by the rules and regulations of the FDA
and corresponding rules and regulations in other countries.
1.25 "PLA" shall mean (1) a Product License Application and all
supplements filed pursuant to the requirements of the FDA, including all
documents, data and other information concerning a Product which is necessary
for or included in FDA approval to market a Product including an approved
Establishment License Application (ELA), as more closely defined in the rules
and regulations of the FDA, and (2) the equivalent application in any Major
Country.
1.26 "Product" shall mean, with respect to each Gene, the final dosage
form of a commercial product intended for sale to any Third Party for use in the
applicable Field which, [CONFIDENTIAL TREATMENT REQUESTED].
1.27 "Research Program" shall mean the program of research, preclinical
development and related activities described generally in the work plan set
forth in Exhibit B, as revised from time to time as provided in the Agreement,
which is attached hereto and incorporated herein.
1.28 "Research Term" shall mean the three year period from the
Commencement Date and any extensions thereto.
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1.29 "Royalty Term" shall mean, with respect to each Product in each
country in the Territory, the period of time equal to (a) in countries in which
Immune Response holds Valid Patent Claims, the term for such Valid Patent Claim
in such country, if such Valid Patent Claim would be infringed by Product made,
used, sold, or offered for sale by or on behalf of Bayer hereunder but for the
license granted by the Agreement, or (b) in countries in which Immune Response
holds no Valid Patent Claims that would be infringed by Product made or sold by
or on behalf of Bayer hereunder, seven (7) years from the date of the First
Commercial Sale of such Product in such country.
1.30 "Steering Committee" shall mean the joint research committee
comprising representatives of Immune Response and Bayer described in Section 4.1
below.
1.31 "Territory" shall mean the entire world.
1.32 "Third Party" shall mean any Person other than Immune Response,
Bayer and their respective Affiliates.
1.33 "Valid Patent Claim" shall mean either (a) a claim of an issued
and unexpired patent included within the Patent Rights, which has not been held
permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise, or (b) a claim of a
pending patent application included within the Patent Rights, which claim was
filed in good faith and has not been abandoned or finally disallowed without the
possibility of appeal or refiling of such application.
ARTICLE 2
RESEARCH PROGRAM
2.1 Research Procedures. The Research Program is described more
specifically in Exhibit B, which, along with any amendments thereto approved by
the Steering Committee, is incorporated herein by reference. Generally, Immune
Response shall optimize its [CONFIDENTIAL TREATMENT REQUESTED] by construction
and improvement of plasmid vectors to obtain the required level and duration of
Factor VIII expression from the recombinant Factor VIII constructs provided by
Bayer. The optimization may be multi staged, for example, an initial
optimization to reach the requisite level and duration of expression for the
purposes of reaching Milestone 6.2.1 and further optimization to reach the
requisite product profile for the purposes of reaching Milestone 6.2.3.
[CONFIDENTIAL TREATMENT REQUESTED] Bayer will assist Immune Response in the
construction and improvement of plasmid vectors and will
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develop and optimize an expression system for the production of [CONFIDENTIAL
TREATMENT REQUESTED], as described in Exhibit B.
2.1.1 Immune Response Manufacture. Immune Response will also
manufacture and supply, sufficient quantities of the [CONFIDENTIAL TREATMENT
REQUESTED] which contain the Factor VIII Gene and that meet or exceed the
necessary Product profile for the preclinical, Phase I and Phase II Clinical
Studies to be conducted by Bayer, as determined by the Steering Committee and
set forth in the Research Program. Immune Response will manufacture all such
materials at cost and, during the Research Program, the costs for such materials
are included in the budget (or budget as amended under 2.2.3 (Revised Budgets)
provided in Article 2.2.1 (Initial Funding).
2.1.2 Conduct of Research. Immune Response and Bayer each shall
conduct the Research Program in good scientific manner, and in compliance in all
material respects with all requirements of applicable laws and regulations and
all applicable good laboratory practices to attempt to achieve its objectives
efficiently and expeditiously. Immune Response and Bayer each shall proceed
diligently with the work set out in the Research Program by using their
respective good faith efforts to provide, among others, the following resources:
(a) allocation of sufficient time, effort, equipment and
facilities to the Research Program (considering, in the case of Immune Response,
the funding received from Bayer hereunder and, in the case of Bayer, what Bayer
reasonably believes is necessary) to carry out their obligations under the
Research Program and to accomplish the objectives thereof; and
(b) use of personnel with sufficient skills and experience as
are required to carry out their obligations under the Research Program and to
accomplish the objectives thereof. For year one of the Research Program, Immune
Response shall allocate [CONFIDENTIAL TREATMENT REQUESTED] equivalent employees
to conducting its activities under the Agreement.
2.1.3 Technical Assistance. If necessary or desired by Bayer,
Immune Response shall provide Bayer with timely technical assistance sufficient
to enable Bayer to produce Product for Phase III studies and any other
manufacture of Product by Bayer contemplated herein as further described in
Exhibit B including any amendment thereto. Bayer shall reimburse Immune Response
for its reasonable costs based on the number of personnel charged at the Fully-
Burdened Cost plus the reasonable out of pocket expenses to Immune Response. All
such expenditures shall be approved by Bayer prior to their being incurred.
2.1.4 Subcontracts. The Steering Committee shall determine which
portions of the Research Program are to be performed by subcontracting it in the
normal course of either parties business; provided, however, that (a) such
subcontracting shall not involve the transfer of Know-How of the other party to
Third Parties without the prior written consent of the other
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party; (b) the subcontracted party shall enter into a confidentiality agreement
with the subcontracting party in accordance with Article 11 below; (c) the
subcontracting party shall supervise such subcontract work; and (d) the
subcontracted party shall be in compliance in all material respects with all
requirements of applicable laws and regulations, together with all applicable
good laboratory practices.
2.2 Funding of the Research Program.
2.2.1 Initial Funding. The Steering Committee shall set forth an
annual budget necessary for funding the Research Program. The budget for each
year shall be based upon Immune Response's Fully-Burdened Costs, plus the
reasonable out of pocket expenses to Immune Response, for conducting its
activities set forth in the research workplan for such year. In consideration of
Immune Response's participation in the Research Program, and subject to the
continuation of the Research Program as provided herein and approval of the
budget for year two and years thereafter on a year-to-year basis, Bayer shall
pay Immune Response its fully-allocated research costs set forth in the
applicable budget in an amount not less than the guaranteed minimum amount set
forth below (without the prior express written consent of Immune Response), and
not more than the stated maximum amount set forth below (without the prior
express written consent of the President of Bayer-Biotechnology).
Year Minimum Amount Maximum Amount
---- -------------- --------------
[CONFIDENTIAL TREATMENT REQUESTED]
Immune Response's fully-allocated research costs include the funding of an
appropriate number of Immune Response personnel at the Fully-Burdened Cost (see
Article 1.13.1), plus the reasonable out of pocket expenses to Immune Response,
and the cost of manufacture of preclinical and clinical materials as agreed for
the Research Program to make up the balance of the budget. The guaranteed
minimum amounts set forth above constitute eighty percent (80%) of the maximum
amount set forth above for years one and two and sixty percent (60%) of the
maximum amount set forth above for year three. Such payments for each year of
the Research Program shall be made in two (2) equal semi-annual installments due
within ten (10) days of full execution of the Agreement and on each six (6)
month anniversary thereof during the term of the Research Program or any
extension thereof.
2.2.2.1 Product Substitution. If during the course of the research
it becomes clear to Bayer that development of a Factor VIII Product is not
technically or commercially feasible, then Bayer can at its option switch to
development of a Product from one of the Additional Genes under the same terms
as this Agreement and with no payment of an option fee. The budget will be
revised as appropriate to account for the change in the Research Program,
however the minimum amounts stated above shall not change.
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2.2.2 Additional Funding. If the parties amend the Agreement
pursuant to Section 5.3 (Additional Genes and Fields) below to add one or more
Additional Genes, Bayer shall pay to Immune Response additional research fees in
such annual amount as the parties mutually agree in two (2) equal semi-annual
installments due on the date of the applicable amendment to the Agreement and on
each six (6) month anniversary of the date of the Agreement thereafter during
the term of the Research Program; provided, however, that the first and the last
installment thereof shall be pro-rated as appropriate.
2.2.3 Revised Budgets. The research fees for each year after the
first year of the Research Program shall be adjusted to reflect modifications to
the budget for the Research Program, if any, that are made by mutual agreement
of the parties.
2.2.4 Use of Funding. Immune Response shall apply the research
fees it receives from Bayer under the Agreement for the sole purpose of carrying
out its obligations under the Research Program and accomplishing the objectives
thereof, in accordance with Exhibit B, including amendments thereto.
2.3 Research Records and Reports.
2.3.1 Records. Immune Response and Bayer each shall maintain
records, in sufficient detail and in good scientific manner appropriate for
patent purposes, which shall be complete and accurate and shall fully and
properly reflect all work done and results achieved in the performance of the
Research Program (including all data in the form required under all applicable
laws and regulations). Such records shall include books, records, reports,
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 including any data required to be
maintained pursuant to all requirements of applicable laws and regulations.
2.3.2 Inspection of Records. Immune Response and Bayer each shall
have the right, during normal business hours and upon reasonable notice, to
inspect and copy all such records defined in Section 2.3.1 "Records" of the
other party to the extent reasonably required for the performance of its
obligations under the Agreement (with the party owning the records determining
what is reasonably required). Each party shall maintain such records and the
information of the other party contained therein in confidence in accordance
with Article 10 below and shall not use such records or information except to
the extent otherwise permitted by the Agreement.
2.3.3 Research Reports and Information. Immune Response and Bayer
each shall keep the other informed of the progress of its own activities under
the Research Program. At a minimum, within thirty (30) days following the last
day of each December, March, June and September during the term of the Research
Program and within thirty (30) days following the
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expiration or termination of the Research Program, Immune Response and Bayer
each shall prepare, and provide to each member of the Steering Committee and the
other party, a reasonably detailed written summary report which shall describe
the work performed by such party to date under the Research Program. The parties
also agree to meet and discuss the work performed and/or contemplated hereunder,
including updates on activity in the applicable Field, on an as requested and
mutually agreeable basis.
2.4 Term of Research Program.
2.4.1 Initial Term. Except as otherwise provided herein, the term
of the Research Program shall commence on the Commencement Date and continue for
a period of three (3) years thereafter; provided, however, that the parties
shall have the right upon mutual written agreement (including agreement upon
funding) to extend Research Term.
2.4.2 Extended Term. If the parties expand the Collaborative
Program pursuant to Section 5.3 (Additional Genes and Fields) below to add one
or more Additional Genes, then the Research Program shall be extended for such
additional period as the parties mutually agree. Such expansion and extension
shall be documented in an amendment to Exhibit B at the time or after both
parties sign an amendment to this Agreement as set forth in 5.3 (Additional
Genes and Fields) below.
ARTICLE 3
DEVELOPMENT PROGRAM
3.1 Clinical Development.
3.1.1 Conduct of Human Clinical Trials. Bayer shall be primarily
responsible for conducting any Phase of Clinical Development. Bayer shall use
commercially reasonable efforts to develop Product in the Major Countries, as
further described in Exhibit A and any amendments thereto.
3.1.2 Compliance. Bayer and Immune Response shall conduct their
respective obligations under the Development Program in good scientific manner,
and in compliance in all material respects with all requirements of applicable
laws and regulations and all applicable good laboratory, clinical and
manufacturing practices.
3.1.3 Regulatory Filings and Applications. Bayer shall be
responsible for the preparation, filing and prosecution of all filings and
applications required to obtain all necessary marketing and pricing approvals to
commercially sell and use each Product in the Territory in the applicable Field.
Bayer shall be the owner and party of record for all such filings and
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applications. Immune Response agrees to provide timely assistance as requested
by Bayer and as reasonably necessary in preparation and prosecution of such
filings and applications. Bayer shall reimburse Immune Response for its
reasonable Fully-Burdened-Cost and Immune Response's reasonable out-of-pocket
expenses of any such assistance provided after the Research Term. Bayer shall
keep Immune Response informed of its activities regarding regulatory filings and
applications as described in Paragraph 3.3 (Development Reports and
Information). Immune Response representatives reasonably acceptable to Bayer
shall, upon Bayer's request, accompany Bayer to those meetings with the FDA
regarding regulatory approval that Bayer chooses and Immune Response agrees to
participate to the extent that Bayer requests their participation. Immune
Response shall have the right, at its sole expense, to have a representative
reasonably acceptable to Bayer accompany Bayer to material substantive meetings
with the FDA regarding regulatory approval of Product(s), provided however, that
such representative shall not directly participate in such meetings unless
Bayer, at its sole discretion, requests their direct participation.
3.1.4 Subcontracts. Bayer may subcontract portions of the
Development Program to be performed by it in the normal course of its business
without the prior consent of Immune Response; provided, however, that (a) such
subcontracting shall not involve the transfer of Know-How of Immune Response to
Third Parties without first obtaining Immune Response's consent; (b) the
subcontracted party shall enter into a confidentiality agreement with Bayer in
accordance with Section 13.2 below; (c) Bayer shall supervise such subcontract
work; and (d) the subcontracted party shall be in compliance in all material
respects with all requirements of applicable laws and regulations, together with
all applicable good laboratory, clinical and manufacturing practices.
3.1.5 Supply of Clinical Product. Immune Response shall be
responsible for the manufacture and supply of the Product containing the Factor
VIII Gene to conduct Phase I and Phase II clinical trials, as stated in 2.1.1
(Immune Response Manufacture) above. Bayer shall pay to Immune Response the
Fully-Burdened Cost, plus the reasonable out of pocket expenses to Immune
Response, of all such Product supplied after the Research Term to the extent
that such costs have not previously been included in the research budgets which
were actually approved by the Steering Committee and funded by Bayer. Bayer
shall be responsible for manufacturing and supplying (a) the Product containing
the Factor VIII Gene for Phase III clinical trials in the United States and its
equivalent in all other countries, and (b) Product containing any Additional
Gene for use under the Development Program.
3.2 Funding Responsibilities. Bayer shall be responsible for funding
the costs of conducting the Development Program and of applying for and
obtaining all necessary regulatory approvals to commercialize the Products in
the Territory for use in the applicable Field, and of supplying Product for
Phase III clinical development in the U.S. and its equivalent in all other
countries.
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3.3 Development Reports and Information. Following the expiration of
the Research Program and during the Development Program, Bayer shall keep Immune
Response informed as to the progress of the clinical development of each Product
and the progress in preparing, filing and obtaining of the necessary marketing
and pricing approvals to commercially sell and use the Product. Within thirty
(30) days following the end of each June and December during the term of the
Development Program, Bayer shall prepare, and provide to Immune Response, a
summary written report which shall describe the progress of the clinical
development and testing of Products in such clinical trials, the status of
manufacturing such Product and the preparations to manufacture and supply such
Product for any future clinical development and commercial sale, all regulatory
filings and submissions made and all approvals obtained.
3.4 Term of Development Program. The term of the Development Program
shall commence on the date of the commencement of the preparation of the
Investigational New Drug application with the FDA in the United States (or its
equivalent in any other country) for the Product containing the Factor VIII
Gene, and shall continue until the receipt of the required marketing approval,
[CONFIDENTIAL TREATMENT REQUESTED] for the last Product developed under the
Collaborative Program.
3.5 Excused Performance. In addition to the provisions of Article 16
(Force Majeure) below, the obligations of Bayer under the Development Program,
with respect to any Product, are expressly conditioned upon the continuing
absence of any adverse condition relating to the safety or efficacy of such
Product which, in Bayer's reasonable opinion, materially limits, reverses or
restricts the development or marketing of such Product. The obligations of Bayer
to develop any Product that demonstrates such an adverse condition shall be
delayed or suspended so long as any such condition exists. If Bayer delays or
suspends development of a Product under the Development Program for a period
which exceeds twelve (12) months in duration (except for delays or suspensions
due solely to regulatory delays beyond Bayer's reasonable control), then the
parties shall meet to discuss in good faith reasonable means by which any such
adverse condition(s) may be removed, and which party shall conduct which
portion(s) of proposed activities designed to remove any such adverse
condition(s) and for what cost. If after such discussion, in Bayer's
determination it is not advisable to proceed with development or
commercialization of the Product [CONFIDENTIAL TREATMENT REQUESTED], then Immune
Response shall have the right to terminate the Agreement in its entirety,
effective upon written notice to Bayer.
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ARTICLE 4
MANAGEMENT OF THE COLLABORATIVE PROGRAM
4.1 Steering Committee.
4.1.1 Composition of the Steering Committee. The Steering
Committee shall direct the Research Program and shall be comprised of three (3)
named representatives of Immune Response and three (3) named representatives of
Bayer. Each party shall designate a co-chairperson included as one of the
representatives to the Steering Committee. Each party shall appoint its
respective representatives to the Steering Committee from time to time, and may
substitute one or more of its representatives, in its sole discretion, effective
upon notice to the other party of such change. From time to time, the Steering
Committee may establish subcommittees to oversee particular projects or
activities, and such subcommittees will be constituted as the Steering Committee
agrees. The initial members of the Steering Committee shall be:
Immune Response Appointees: [CONFIDENTIAL TREATMENT REQUESTED]
Bayer Appointees: [CONFIDENTIAL TREATMENT REQUESTED]
4.1.2 Meetings. The Steering Committee shall meet not less than
once each calendar quarter during the term of the Research Program, on such
dates and at such times and places as agreed to by Immune Response and Bayer,
alternating between Carlsbad and Berkeley, or such other locations as the
parties shall agree. Each party shall be responsible for all its own expenses.
The first meeting of the Steering Committee shall occur as soon as practicable
after the Commencement date, but in no event later than forty-five (45) days
after the Commencement Date.
4.1.3 Powers. The Research Program shall be conducted under the
direction of the Steering Committee. At such meetings, the Steering Committee
shall formulate and review the Research Program objectives, monitor the progress
of the Research Program toward these objectives, and set priorities therefor. To
the extent that the Development Program coincides with the duration of the
Research Program, the Steering Committee shall discuss any actual regulatory
filings regarding Products together with any anticipated regulatory filings with
respect to possible Products and may make recommendations to Bayer consistent
with Paragraph 3.1.1 (Clinical Development) above. Not less than annually, the
Steering Committee shall discuss and make any appropriate amendments to the
Research Program which shall be attached to Exhibit B and such Amendments
incorporated herein by reference.
4.1.4 Committee Actions. Bayer and Immune Response shall each be
entitled to cast one vote on matters before the Steering Committee. Decisions of
the Steering Committee
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shall be made by unanimous approval. Any approval, determination or other action
agreed to by all of the members of the Steering Committee present at the
relevant Steering Committee meeting shall be the approval, determination or
other action of the Steering Committee; provided, however, that at least two (2)
representatives of each party are present at such meeting.
4.2 Disagreements. All disagreements within the Steering Committee
shall be resolved in the following manner:
4.2.1 The representatives of the Steering Committee promptly shall
present the disagreement to the President of Immune Response and the President
of Bayer Biotechnology who has the principal responsibility for such party's
work under the Agreement.
4.2.2 Such executives shall meet to discuss each party's view and
to explain the basis for their respective positions of such disagreement, and in
good faith shall attempt to resolve such disagreement among themselves;
provided, however, that the parties do not waive any rights which they may have
under the Agreement or otherwise as a result of the resolution of a disagreement
under this Section 4.2.2.
4.2.3 If such executives cannot promptly resolve such
disagreement, then any disagreement concerning the Research Program or the
Development Program shall be settled by Bayer; provided, however, that the
parties do not waive any rights which they may have under the Agreement or
otherwise as a result of the resolution of a disagreement under this Section
4.2.3.
4.3 Steering Committee Reports. The Steering Committee shall keep
accurate minutes of its deliberations which record all proposed decisions and
all actions recommended or taken. Drafts of the minutes shall be delivered to
all Steering Committee members within thirty (30) days following each Steering
Committee meeting during the term of the Agreement. The party hosting the
meeting shall be responsible for the preparation and circulation of all draft
minutes. Draft minutes shall be edited by the co-chairpersons and shall be
issued in final form only after their approval and agreement has been evidenced
by their signatures on the minutes. The scope of the minutes shall address such
issues as (a) a description of the work performed to date under the
Collaborative Program, (b) an evaluation of the work performed in relation to
the goals of the Collaborative Program, (c) a description of any actual and
anticipated regulatory submissions regarding Products and the status of any
regulatory action or communication in connection therewith, and (d) a statement
of any determination of the Steering Committee regarding, and attachment of
reasonably detailed copies of, any appropriate amendments to the research and
development work plan and the budgets therefor.
4.4 Project Leaders. Immune Response and Bayer each shall appoint a
person (a "Project Leader") to coordinate its part of the Research Program. The
Project Leaders shall be the primary contacts between the parties with respect
to the Research Program and shall be non-
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voting ex officio members of the Steering Committee. Each party shall notify the
other within thirty (30) days after the date of the Agreement of the appointment
of its Project Leader and shall notify the other party as soon as practicable
upon changing this appointment.
4.5 Availability of Employees. Each party shall make its employees and
relevant reports of non-employee consultants available, upon reasonable notice
during normal business hours, at their respective places of employment to
consult with the other party on issues arising during the Research Program and
in connection with any request from any regulatory agency, including regulatory,
scientific, technical and clinical testing issues.
4.6 Visit to Facilities. Representatives of Immune Response and Bayer
may, upon reasonable notice during normal business hours, (a) visit the
facilities where the Research Program is being conducted, (b) consult
informally, during such visits and by telephone, with personnel of the other
party performing work on the Research Program, and (c) with the other party's
prior approval, which approval shall not be withheld unreasonably, visit the
sites of any tests or experiments being conducted by such other party in
connection with the Research Program, but only to the extent in each case as
such tests or other experiments relate to the Research Program. On such visits
an employee of the party conducting the research or development shall accompany
the employee(s) of the visiting party. If requested by the other party, Immune
Response and Bayer shall cause appropriate individuals working on the Research
Program 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.
4.7 Conflict between Exhibits and Agreement. In the event there is any
material conflict between the terms in either Exhibit A or Exhibit B, including
any amendments thereto, and the terms of the Agreement, it is agreed that the
terms of the Agreement shall control.
ARTICLE 5
LICENSE GRANTS
5.1 License Grant to Bayer.
5.1.1 License Grant. On the terms and subject to the conditions of
the Agreement, Immune Response hereby grants to Bayer and its Affiliates hereto
an exclusive license (or in the case of licensed Third Party Patent Rights or
Know-How, when permissible, an exclusive sublicense) in the Territory under
Immune Response's Patent Rights, including Immune Response's rights in any
jointly-owned Patent Rights, and Immune Response's Know- How, to conduct the
Collaborative Program and to make, use, sell, offer for sale, import, and have
made, used, sold, and imported Products for use in the Hemophilia A Field and to
each Additional Field(s) upon Bayer's exercise of its option(s) in accordance
with the provisions of
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Section 5.3 below. The grant of the license under Section 5.1.1. does not extend
to a later acquired Bayer Affiliate wherein [CONFIDENTIAL TREATMENT REQUESTED].
So long as Immune Response is in compliance with its obligations under the
Research Program, then Bayer shall subcontract to Immune Response the duties and
obligations designated to Immune Response under the Research Program. Immune
Response shall provide to Bayer on an as requested and as available basis the
information and materials embodying the intellectual property licensed hereunder
to the extent not otherwise provided under sections 2.3.2 and 2.3.3.
5.1.2 Sublicense Rights. Bayer may not grant sublicenses under
such licenses to any Third Party without the prior written consent of Immune
Response, except for sublicenses solely for the purpose of developing,
manufacturing, marketing, promoting and selling a Product. Any purported
sublicense in violation of this Section 5.1.2 shall be void. Any permitted
sublicense shall be subject to the provisions of the Agreement.
5.1.3 Reservation of Rights. Immune Response expressly reserves
the right under Immune Response's Patent Rights, including Immune Response's
rights in any jointly-owned Patent Rights, and Immune Response's Know-How, to
conduct research, to practice methods and processes and to make, use and sell
compositions for its own benefit or for the benefit of its Affiliates or Third
Parties for use outside the FIELDS.
5.1.4 License Grant to Bayer Outside the Field(s). For sole
inventions and know-how made by Immune Response during the term of and under the
Research Program, which are Improvements in the coding and/or non-coding
elements for optimizing and/or regulation of gene expression, Immune Response
grants to Bayer a world-wide, non-exclusive, paid-up license (including the
right to grant sublicenses) to practice, make, use, sell, import and have
practiced, made, used, sold and imported such Improvements for use outside the
Field(s).
5.1.5 Bankruptcy or Insolvency. All rights and licenses granted
under or pursuant to Section 5.1 of this Agreement by Immune Response to Bayer
are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "Intellectual Property" as defined under
Section 101(35A) of the Bankruptcy Code. The parties agree that Bayer, as a
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the Bankruptcy Code, including
but not limited to Bayer's rights to continue to exercise the rights licensed
hereunder.
5.2 License Grant to Immune Response.
5.2.1 License Grant. On the terms and subject to the conditions of
the Agreement, Bayer hereby grants to Immune Response a non-exclusive license
(or in the case of licensed Third Party Patent Rights or Know-How, when
permissible, a non-exclusive sublicense) in the Territory under Bayer's Patent
Rights, and Bayer's Know-How, solely to conduct its obligations under the
Collaborative Program.
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5.2.2 Sublicense Rights. Immune Response may not grant sublicenses
under such licenses to any Third Party without the prior written consent of
Bayer. Any purported sublicense in violation of this Section 5.2.2 shall be
void. Immune Response shall provide to Bayer a copy of any permitted sublicense
promptly upon execution of the same. Any permitted sublicense shall be subject
to the provisions of the Agreement.
5.2.3 License Grant to Immune Response Outside the Field(s). For
sole inventions and know-how made by Bayer during the term of and under the
Research Program, which are Improvements in Immune Response's Gene Delivery
Technology, Bayer grants to Immune Response a world-wide, non-exclusive, paid-up
license (including the right to grant sublicenses) to practice, make, use, sell,
import and have practiced, made, used, sold and imported such Improvements for
use outside the Field(s).
5.3 Additional Genes and Fields. If the parties mutually desire to
expand the Collaborative Program hereunder to include one or more Additional
Genes, Bayer shall have the option to enter into negotiations with Immune
Response regarding such expansion. [CONFIDENTIAL TREATMENT REQUESTED] Bayer
shall give timely written notice of its desire to so negotiate, and pay to
Immune Response an exercise fee [CONFIDENTIAL TREATMENT REQUESTED]. The exercise
fee shall promptly be deposited in an interest bearing escrow account until
agreement has been reached regarding the Collaborative Program directed to the
Additional Gene. If no agreement is reached, then the exercise fee shall be
promptly returned to Bayer with interest. The parties shall negotiate in good
faith the terms and conditions of an amendment to the Agreement pursuant to
which the parties would be mutually willing to so expand the Collaborative
Program. Any such amendment shall (a) specifically identify such Additional
Gene; (b) specify the term of the extension of the Research Program to which the
parties mutually agree; (c) amend the Research and Development Programs and
corresponding Exhibits B and A, and the budget for the expanded Collaborative
Program to include the necessary and appropriate research and development
regarding the Product containing such Additional Gene; (d) increase Bayer's
research funding obligation under Section 2.2 (Funding the Research Program)
above to fund Immune Response's research efforts regarding the Product
containing such Additional Gene by such annual amount as the parties mutually
agree; (e) specify the license fee and milestone payments owing to Immune
Response with respect to the Product containing such Additional Gene in such
amounts as the parties mutually agree but not to exceed the license fee and
milestone payments set forth in 6.1 and 6.2 below; (f) specify the royalty rate
for the Product containing such Additional Gene upon which the parties mutually
agree and which shall not exceed the royalty rate set forth in Section 6.3
(Royalties) below with respect to the Product containing the Factor VIII Gene;
and (g) provide that Bayer shall have the right to credit the exercise fee paid
to Immune Response with respect to such Additional Gene, in its entirety, plus
interest, against the license fee for the license granted for such Additional
Gene; and (h) provide that Bayer shall have the right to credit any amount of
the exercise fee remaining after (g) of this Article 5.3 against the next
payments due thereunder.
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5.4 License to Third Party Patent Rights. If either party determines
that it is necessary or desirable to obtain a license under any Third Party's
issued patents or pending patent applications in order to enhance or improve a
Factor VIII Gene and/or Additional Genes Product, the parties shall determine in
good faith their respective interests in obtaining a license under such Third
Party's issued patents or pending patent applications.
5.4.1 Immune Response Right to Negotiate. If Immune Response
determines under 5.4 above that it is in its best interest to obtain a license
under such Third Party's issued patents or pending patent applications the
scope of which includes more than the FIELDS defined herein, then Immune
Response shall either [CONFIDENTIAL TREATMENT REQUESTED] In the event Immune
Response negotiates a Third Party license under this clause, then: (a) Immune
Response shall keep Bayer informed of the status and material developments
regarding the negotiation and of the terms and conditions, and the execution,
of such license; (b) Immune Response shall consider in good faith the interests
and reasonable comments of Bayer regarding such license as it applies to the
Products; and, (c) Immune Response shall be responsible for payment of all fees,
other than royalty payments, for its license with a Third Party, with no
charge-back of any amount to Bayer. Immune Response shall sublicense any rights
it receives to the Third Party invention(s) in the applicable Fields
exclusively to Bayer. [CONFIDENTIAL TREATMENT REQUESTED]
5.4.2 Bayer Right to Negotiate. [CONFIDENTIAL TREATMENT REQUESTED]
ARTICLE 6
LICENSE FEE, MILESTONES AND ROYALTIES
6.1 License Fee. Upon execution of the Agreement, Bayer shall pay to
Immune Response a non-refundable, non-creditable license fee of Six Million
Dollars ($6,000,000).
6.2 Milestone Payments. Bayer shall pay to Immune Response the
following non-refundable, non-creditable one time milestone payments upon the
occurrence of each event set forth below in consideration for its research
toward such milestone event with respect to the Product containing the Factor
VIII Gene:
6.2.1 [CONFIDENTIAL TREATMENT REQUESTED]
6.2.2 [CONFIDENTIAL TREATMENT REQUESTED]
6.2.3 [CONFIDENTIAL TREATMENT REQUESTED]
6.2.4 [CONFIDENTIAL TREATMENT REQUESTED]
6.2.5 [CONFIDENTIAL TREATMENT REQUESTED]
6.2.6 [CONFIDENTIAL TREATMENT REQUESTED]
6.2.7 [CONFIDENTIAL TREATMENT REQUESTED]
6.2.8 [CONFIDENTIAL TREATMENT REQUESTED]
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6.3 Royalties.
6.3.1 In countries in which no Competitive Product is in the
market, Bayer shall pay Immune Response [CONFIDENTIAL TREATMENT REQUESTED]
invoiced in any country in the Territory in which Immune Response holds Valid
Patent Claims that would, but for license from Immune Response, be infringed by
sale of such Product. Such royalties shall be paid on a country by country basis
for Net Sales invoiced during the term of such Valid Patent Claims in any such
country.
6.3.2 In countries in which Competitive Product is in the market,
Bayer shall pay to Immune Response royalties of [CONFIDENTIAL TREATMENT
REQUESTED] invoiced in any country in the Territory in which Immune Response
holds Valid Patent Claims that would, but for license from Immune Response, be
infringed by sale of such Product. Such royalties shall be paid on a country by
country basis for Net Sales invoiced during the term of such Valid Patent Claims
in any such country.
6.3.3 In countries in which Immune Response holds no Valid Patent
Claims, and where no Competitive Product is in the market, [CONFIDENTIAL
TREATMENT REQUESTED] invoiced in any country in the Territory for use of Immune
Response Know-How. Such royalties shall be paid on a country by country basis
for Net Sales invoiced for a period of [CONFIDENTIAL TREATMENT REQUESTED] from
First Commercial Sale of such Product. Such royalties for Know-How shall be
reduced to [CONFIDENTIAL TREATMENT REQUESTED] for any period in which
Competitive Product is in the market in that country.
6.4 Third Party Royalties. If Bayer is required, with respect to any
Product in any country, to pay royalties to any Third Party in consideration for
the grant of a license under such Third Party's issued patent in such country,
in order to exercise its rights hereunder to practice any process or method, or
to make, use or sell any Product, then Bayer shall have the right to credit
[CONFIDENTIAL TREATMENT REQUESTED] of the amount of such royalty payments in
such country against the royalties owing to Immune Response under Sections 6.3.1
and 6.3.2 above with respect to sales of such Product in such country; provided,
however, that Bayer shall not reduce the amount of the royalties paid to Immune
Response under Sections 6.3.1 and 6.3.2 above by more than [CONFIDENTIAL
TREATMENT REQUESTED].
6.5 Favored Financial Terms. If Immune Response grants a license to a
Third Party to Immune Response Patent Rights and Know-How that is outside the
FIELDS, Immune Response shall use its commercially reasonable efforts to grant
such license on financial terms and conditions, taken as a whole, which are not
materially less favorable to Immune Response than those set forth in the
Agreement with respect to the Product containing the Factor VIII Gene, taken as
a whole. Whether the financial terms and conditions of a license, taken as a
whole, are not materially less favorable to Immune Response shall be determined
using such valuation practices as are customary and reasonable in the industry
and under the circumstances,
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taking into consideration such factors including but not limited to the
following: (a) the commercial and technical potential of the products which are
the subject of the licenses to Bayer and such Third Party; (b) the resources and
efforts contributed and to be contributed by Immune Response on the one hand and
by Bayer or such Third Party on the other hand to the research, development,
manufacturing and commercialization of the products which are the subject of the
licenses to Bayer and such Third Party; (c) the nature and scope of any other
patent rights and know-how licensed by Immune Response to such Third Party; (d)
the nature and scope of any patent rights or know-how not licensed by Immune
Response to such Third Party which may be necessary or useful to develop or
commercialize the product which is the subject of the license to such Third
Party; (e) the nature and scope of any licenses or other non-monetary
consideration granted by such Third Party to Immune Response, and (f) the net
present value of financial obligations in each license.
ARTICLE 7
ROYALTY REPORTS AND ACCOUNTING
7.1 Reports, Exchange Rates. During the term of the Agreement following
the first to occur of the First Commercial Sale of a Product, Bayer shall
furnish to Immune Response a quarterly written report showing in reasonably
specific detail, on a country by country basis, (a) the gross sales of all
Products sold by Bayer, its Affiliates and its sublicensees in the Territory
during the reporting period and the calculation of Net Sales from such gross
sales; - (b) the royalties payable in United States dollars, if any, which shall
have accrued hereunder based upon Net Sales of Products; (c) the withholding
taxes, if any, required by law to be deducted with respect to such sales; (d)
the date of the First Commercial Sales of each Product in each country in the
Territory during the reporting period; and (e) the exchange rates used in
determining the amount of United States dollars. With respect to sales of
Products invoiced in United States dollars, the gross sales, Net Sales and
royalties payable shall be expressed in United States dollars. With respect to
sales of Products invoiced in a currency other than United States dollars, the
gross sales, Net Sales and royalties payable shall be expressed in the domestic
currency of the party making the sale together with the United States dollar
equivalent of the royalty payable, calculated using the average closing buying
rate for such currency quoted in the continental terms method of quoting
exchange rates (local currency per US$1) by Citibank NA in Pittsburgh,
Pennsylvania on each of the last business day of each month in the quarter prior
to the date of payment. Reports shall be due on the sixty (60th) day following
the close of each quarter. Bayer shall keep complete and accurate records in
sufficient detail to properly reflect all gross sales and Net Sales and to
enable the royalties payable hereunder to be determined.
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7.2 Audits.
7.2.1 Upon the written request of Immune Response and not more
than once in each calendar year, Bayer shall permit an independent certified
public accounting firm of nationally recognized standing, selected by Immune
Response and reasonably acceptable to Bayer, at Immune Response's expense, to
have access during normal business hours to such of the records of Bayer as may
be reasonably necessary to verify the accuracy of the royalty reports hereunder
for any year ending not more than thirty-six (36) months prior to the date of
such request. The accounting firm shall disclose to Immune Response only whether
the records are correct or not and the specific details concerning any
discrepancies. No other information shall be shared.
7.2.2 If such accounting firm concludes that additional
royalties were owed or that royalties were overpaid during such period, Bayer
shall pay the additional royalties or Immune Response will credit or pay Bayer
the overage within thirty (30) days of the date Immune Response delivers to
Bayer such accounting firm's written report so concluding. The fees charged by
such accounting firm shall be paid by Immune Response; provided, however, if the
audit discloses that the royalties payable by Bayer for the audited period are
more than one hundred five percent (105%) of the royalties actually paid for
such period, then Bayer shall pay the reasonable fees and expenses charged by
such accounting firm.
7.2.3 Bayer shall include in each permitted sublicense granted by
it pursuant to the Agreement a provision requiring the sublicensee to make
reports to Bayer, to keep and maintain records of sales made pursuant to such
sublicense and to grant access to such records by Immune Response's independent
accountant to the same extent required of Bayer under the Agreement. Upon the
expiration of thirty-six (36) months following the end of any year, the
calculation of royalties payable with respect to such year shall be binding and
conclusive upon Immune Response and Bayer shall be released from any liability
or accountability with respect to royalties for such year.
7.3 Confidential Financial Information. Immune Response shall treat
all financial information subject to review under this Article or under any
sublicense agreement as confidential, and shall cause its accounting firm to
retain all such financial information in confidence.
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ARTICLE 8
PAYMENTS
8.1 Payment Terms. Royalties shown to have accrued by each royalty
report provided for under Article 7 of the 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.
8.2 Payment Method. All payments by Bayer to Immune Response under the
Agreement shall be paid in United States dollars, and all such payments shall be
originated from a United States bank located in the United States and made by
bank wire transfer in immediately available funds to such account as Immune
Response shall designate before such payment is due.
8.3 Exchange Control. If at any time legal restrictions prevent the
prompt remittance of part or all royalties with respect to any country in the
Territory where the Product is sold, payment shall be made through such lawful
means or methods as Bayer reasonably shall determine.
8.4 Withholding Taxes. Bayer shall be entitled to deduct the amount of
any withholding taxes, value-added taxes or other taxes, levies or charges with
respect to such amounts, other than United States taxes, payable by Bayer, its
Affiliates or sublicensees, or any taxes required to be withheld by Bayer, its
Affiliates or permitted sublicensees, to the extent Bayer, its Affiliates or
permitted sublicensees pay to the appropriate governmental authority on behalf
of Immune Response such taxes, levies or charges. Bayer shall use reasonable
efforts to minimize any such taxes, levies or charges required to be withheld on
behalf of Immune Response by Bayer, its Affiliates or permitted sublicensees.
Bayer promptly shall deliver to Immune Response proof of payment of all such
taxes, levies and other charges, together with copies of all communications from
or with such governmental authority with respect thereto.
8.5 Late Payments. Unless otherwise provided in the Agreement, Bayer
shall pay interest to Immune Response on the aggregate amount of any payments by
Bayer that are not paid on or before the date such payments are due under the
Agreement at a rate per annum equal to the prime rate of interest as reported by
Citibank NA, from time to time, plus two percent (2%).
ARTICLE 9
INFRINGEMENT ACTIONS BY THIRD PARTIES
9.1 If Immune Response, Bayer or any of their respective licensees or
their customers shall be sued by a Third Party for infringement of a Third Party
patent because of the
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manufacture, use, sale or import of a Product, the party which has been sued
shall promptly notify the other party in writing of the institution of such
suit. If the alleged infringing process, method or composition is claimed under
the Patent Rights, then the Patent Party shall have the right, in its sole
discretion, to control the defense of such suit at its own expense, in which
event the other party shall have the right to be represented by advisory counsel
of its own selection, at its own expense, and shall cooperate fully in the
defense of such suit and furnish to the Patent Party controlling such legal
proceedings all evidence and assistance in its control. If the Patent Party does
not elect within thirty (30) days after receipt of such notice to so control the
defense of such suit, the other party may undertake such control at its own
expense, and the Patent Party shall then have the right to be represented by
advisory counsel of its own selection and at its own expense, and the Patent
Party shall cooperate fully in the defense of such suit and furnish to the other
party all evidence and assistance in the Patent Party's control. The party
controlling the suit may not settle the suit or otherwise consent to an adverse
judgment in such suit that diminishes the rights or interests of the
non-controlling party without the express written consent of the non-controlling
party. If the alleged infringing process, method or composition falls outside
the claims of any Patent Rights, then the Parties shall discuss and determine in
good faith their respective rights and obligations necessary to acquire relief
from such suit.
ARTICLE 10
CONFIDENTIALITY
10.1 Nondisclosure Obligations. Except as otherwise provided in this
Article 10, and subject to Article 11 below, (a) during the term of the
Agreement and for a period of ten (10) years thereafter, each party shall
maintain in confidence and use only for purposes of the Agreement information
and data relating to and resulting from and specifically regarding the research
and/or development of Products; and (b) during the term of the Agreement and for
a period of ten (10) years thereafter, each party shall maintain in confidence
and use only for purposes of the Agreement all information and data not
described in clause (a) above but supplied by the other party under the
Agreement which is marked or otherwise identified as "Confidential." For
purposes of this Article 10, information and data described in clauses (a) and
(b) above shall be referred to as "Information."
10.1.1 Permitted Disclosures. To the extent it is reasonably
necessary or appropriate to fulfill its obligations or exercise its rights under
the Agreement, a party may (a) disclose Information to its Affiliates,
sublicensees, consultants, outside contractors and clinical investigators, on a
need-to-know basis on condition that such 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 (b) disclose such Information
to government or other regulatory authorities to the extent that such disclosure
is required by applicable law, regulation or court order, or is reasonably
necessary to obtain patents or authorizations to conduct
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clinical trials with, and to commercially market, Products; provided, however,
that in each such case, the disclosing party shall provide prior written notice
to the other party and sufficient opportunity to object to such disclosure or to
request confidential treatment thereof. Notwithstanding the foregoing, each
Party shall have the right to disclose necessary Information described in
Section 10.1(a) above in reports to existing Third Party licensors to the extent
required by contract with such Third Party licensors.
10.1.2 Exclusions. The obligation not to disclose or use
Information shall not apply to any part of such Information that (i) is or
becomes published or otherwise part of the public domain other than by acts of
the party obligated not to disclose such Information in contravention of the
Agreement; (ii) is disclosed to the receiving party by a Third Party, provided
such Information was not obtained by such Third Party directly or indirectly
from the other party under the Agreement on a confidential basis; (iii) prior to
disclosure under the Agreement, was already in the possession of the receiving
party, provided such Information was not obtained directly or indirectly from
the other party under the Agreement; or (iv) is disclosed in a press release
agreed to by both parties, which agreement shall not be unreasonably withheld.
10.1.3 Terms of the Agreement. Except as required by applicable
law, Immune Response and Bayer shall not disclose any terms or conditions of the
Agreement to any Third Party without the prior consent of the other party.
Notwithstanding the foregoing, the parties shall agree upon a press release to
announce the execution of the Agreement, together with a corresponding Q&A
outline for use in responding to inquiries about the Agreement; thereafter,
Immune Response and Bayer may each disclose to Third Parties the information
contained in such press release and Q&A outline without the need for further
approval by the other party. Prior to submission to the U.S. Securities and
Exchange Commission (or equivalent or successor entity) ("SEC"), Immune Response
shall provide Bayer with an opportunity to review and comment upon any copy of
the Agreement (including, without limitation, identification of any portions of
the Agreement which Immune Response intends to redact or intends to request the
SEC to redact) which Immune Response intends to file with the SEC.
ARTICLE 11
PUBLICATION
11.1 Notice of Publication. During the term of the Agreement, Immune
Response and Bayer each acknowledge the other party's interest in publishing
certain of its results to obtain recognition within the scientific community and
to advance the state of scientific knowledge. Each party also recognizes the
mutual interest in obtaining valid patent protection and protecting business
interests. Consequently, either party, its employees or consultants 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
Collaborative Program (the "Publishing Party") shall
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transmit to the other party (the "Reviewing Party") a copy of the proposed
written publication or detailed outline of such oral disclosure at least
forty-five (45) days prior to submission for publication or presentation. The
Reviewing Party shall have the right (a) to propose modifications to the
publication and (b) to request a reasonable delay in publication in order to
protect patentable information.
11.2 Timing of Publication. If the Reviewing Party requests such a
delay, the Publishing Party shall delay submission or presentation of the
publication for a period of ninety (90) days to enable patent applications
protecting each party's rights in such information to be filed in accordance
with Article 13 below. Upon the expiry of forty-five (45) days from transmission
to the Reviewing Party, the Publishing Party shall be free to proceed with the
written publication or the presentation, respectively, unless the Reviewing
Party has requested the delay described above. The parties may mutually agree to
delay publication beyond a period of ninety (90) days for purposes of protecting
trade secrets or competitive advantage.
ARTICLE 12
INVENTIONS AND PATENTS
12.1 Ownership of Inventions. The entire right, title and interest in
and to all inventions, discoveries, improvements or other technology, whether or
not patentable, and any patent applications or patents based thereon, made or
conceived as a result of the Collaborative Program hereunder (collectively, the
"Inventions") (a) by employees or others acting solely on behalf of Immune
Response or its Affiliates shall be owned solely by Immune Response (the "Immune
Response Inventions"), (b) by employees or others acting solely on behalf of
Bayer or its Affiliates shall be owned solely by Bayer (the "Bayer Inventions"),
and (c) jointly by employees or others acting on behalf of Immune Response or
its Affiliates and by employees or others acting on behalf of Bayer or its
Affiliates shall be owned jointly by Immune Response and Bayer (the "Joint
Inventions"). Each party shall have the right, subject to the provisions of the
Agreement, to freely exploit, transfer, license or encumber its rights in any
Joint Invention without the consent of, or accounting to, the other party. Each
party promptly shall disclose to the other party the making, conception or
reduction to practice of Inventions by employees or others acting on behalf of
such party. Immune Response and Bayer each hereby represents that all employees
and other Persons acting on its behalf in performing its obligations under the
Agreement shall be obligated under a binding written agreement to assign to it,
or as it shall direct, all Inventions conceived or reduced to practice by such
employees or other Persons.
12.2 Patent Prosecution and Maintenance. The Patent Party shall be
responsible for and shall control the preparation, filing, prosecution, grant
and maintenance of the Patent Rights. The Patent Party shall prepare, file,
prosecute and maintain such Patent Rights in good faith consistent with its
customary patent policy and its reasonable business judgment, and shall consider
in good
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faith the interests of the other party in so doing. Each party shall make
available to the other party or its authorized attorneys, agents or
representatives, its employees, agents or consultants necessary or appropriate
to enable the appropriate party to file, prosecute and maintain patent
applications and resulting patents with respect to Inventions, as set forth in
Section 12.1 above, for a period of time 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 such patent applications
or patents at no charge to the other. In the case of Joint Inventions, the
Patent Party shall make available to the other party all relevant documents
relating to drafting, filing, prosecuting, and maintaining any Joint Patent
Rights in sufficient advance of filing such documents for the other party to
review and comment on such documents. No right or obligation of either party in
relation to any Joint Invention is waived or forfeited hereunder except as
expressly stated in this Agreement.
12.3 Patent Costs. Each party shall bear its own costs in regard to its
sole inventions hereunder. In the case of Joint Inventions, unless the parties
otherwise mutually agree, costs for preparation, filing, prosecution, grant and
maintenance shall be shared equally between Immune Response and Bayer.
12.4 Enforcement of Patent Rights.
12.4.1 The Patent Party shall use good faith efforts to enforce
the Patent Rights against infringers, and to consult with the other party both
prior to and during said enforcement. Upon learning of significant and
continuing infringement of Patent Rights by a Third Party in the Territory,
Immune Response or Bayer, as the case may be, promptly shall provide notice to
the other party in writing of the fact and shall supply the other party with all
evidence possessed by the notifying party pertaining to and establishing said
infringement(s).
12.4.2 The Patent Party shall have six (6) months from the date of
receipt of notice under this Section 12.4.1 to xxxxx the infringement, or to
file suit against at least one of the infringers, at its sole expense, following
consultation with the other party; provided, however, that, within thirty (30)
days after receipt of notice from the Patent Party of its intent to file such
suit, the other party shall have the right to fund up to fifty percent (50%) of
the costs of such suit. The Patent Party shall not be obligated to bring or
maintain more than one such suit at any time with respect to claims directed to
any one method of manufacture or composition of matter.
12.4.3 If the Patent Party does not, within six (6) months of
receipt of such notice, xxxxx the infringement or file suit to enforce the
Patent Rights against at least one infringing party in a country in the
Territory, the other party shall have the right to take whatever action it deems
appropriate in its own name or, if required by law, in the name of the Patent
Party, to enforce the Patent Rights; provided, however, that, within thirty (30)
days after receipt of notice of the other party's intent to file such suit, the
Patent Party shall have the right to jointly prosecute such suit and to fund up
to fifty percent (50%) of the costs of such suit.
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12.4.4 The party controlling the action may not settle the action
or otherwise consent to an adverse judgment in such action that diminishes the
rights or interests of the non-controlling party without the express written
consent of the non-controlling party. All monies recovered upon the final
judgment or settlement of any such suit shall be shared, after reimbursement of
expenses, by Immune Response and Bayer pro rata according to the respective
percentages of costs borne by each party in such suit pursuant to this Section
12.3. Notwithstanding the foregoing, Immune Response and Bayer shall fully
cooperate with each other in the planning and execution of any action to enforce
the Patent Rights.
12.5 No Other Technology Rights. Except as otherwise provided in the
Agreement, under no circumstances shall a party, as a result of the Agreement,
obtain any ownership interest or other right in any technology, know-how,
patents, pending patent applications, products, vaccines, antibodies, cell lines
or cultures, or animals of the other party, including items owned, controlled or
developed by the other, or transferred by the other to such party at any time
pursuant to the Agreement. It is understood and agreed by the parties that the
Agreement does not grant to either party any license or other right in basic
technology of the other party except to the extent necessary to enable the
parties to carry out their part of the Collaborative Program or the development
and marketing of Products.
ARTICLE 13
TERM AND TERMINATION
13.1 Term and Expiration. This Agreement shall be in effect on the date
of its full execution and, unless terminated earlier pursuant to this Article,
the Agreement shall expire on a country by country basis on the expiration of
Bayer's obligations to pay royalties under the Agreement, at which time, as long
as Bayer is not in material default hereunder, Bayer shall have a paid-up,
irrevocable, non-exclusive license to practice Immune Response Know-How in any
applicable Field.
13.2 Termination for Cause. Either party may terminate only the
Research Program hereunder or the entire Agreement upon the occurrence of any of
the following:
13.2.1 The other party (a) seeks the liquidation, reorganization,
dissolution or winding up of itself (other than dissolution or winding up for
the purposes of reconstruction or amalgamation) or the composition or
readjustment of all or substantially all of its debts, (b) applies for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or substantially all of its
assets, (c) makes a general assignment for the benefit of its creditors, (d)
commences a voluntary case under the Bankruptcy Code, (e) files a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or readjustment of debts,
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(f) adopts any resolution of its Board of Directors or stockholders for the
purpose of effecting any of the foregoing; (g) the other party generally is not
paying its debts as they come due; or (h) the other party becomes insolvent
consistent with the principles of generally accepted accounting practices; or
13.2.2 A proceeding or case shall be commenced against one of the
parties hereto without the application or consent of the other party and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the following shall be entered and continue
unstayed in effect, for a period of ninety (90) days from and after the date
service of process is effected upon the other party, seeking (a) its
liquidation, reorganization, dissolution or winding up, or the composition or
readjustment of all or substantially all of its debts, (b) the appointment of a
trustee, receiver, custodian, liquidator or the like of itself or of all or
substantially all of its assets, or (c) similar relief under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
readjustment of debts;
13.2.2.1 Upon the occurrence of any of the events in 13.2.1
or 13.2.2 above, or 13.8 below, or upon breach by Immune Response of its
material duties and obligations under the Research Program, if Immune Response
has not cured such breach within ninety (90) days after written notice thereof
from Bayer, Bayer maintains, at its option the right to terminate the entire
Agreement or only the Research Program, as well as the right to perform the
Research Program at its own or at its Affiliates' facilities. If Bayer chooses
to terminate only the Research Program, Immune Response agrees to the timely
transfer of technology along with technical assistance (provided that Bayer
reimburses Immune Response for its reasonable Fully-Burdened- Cost and Immune
Response reasonable out-of-pocket expenses of such technical assistance) and
appropriate Immune Response Patent Rights and Know-How licenses sufficient for
Bayer or its Affiliates to complete the Research Program contemplated hereunder
in a timely manner. If Bayer chooses to not terminate the entire Agreement, then
all terms and conditions of the Agreement (other than those regarding the
Research Program), including those regarding the Development Program and
commercialization of Product, shall remain in full force and effect according to
the terms of this Agreement.
13.3 Material Breach. Upon or after the breach of any material
provision of the Agreement, if the breaching party has not cured such breach
within ninety (90) days after written notice thereof from the other party, the
Agreement shall terminate, at the option of the other party, ninety (90) days
after the expiration of such ninety (90) day cure period.
13.4 Termination for Technical Failure. Bayer may terminate this
Agreement upon three month's notice to Immune Response in the event that
[CONFIDENTIAL TREATMENT REQUESTED].
13.5 Termination for Commercial Infeasibility. Bayer may terminate
this Agreement with respect to any country or all countries in the Territory,
provided that if Bayer at its
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discretion and not as a result of any regulatory action in any country
terminates the Agreement with respect to [CONFIDENTIAL TREATMENT REQUESTED] by
giving three (3) months prior written notice to Immune Response:
(i) if Bayer determines that the Product cannot reasonably be
developed or marketed for technical, safety or efficacy reasons; or
(ii) if the Product by final written official governmental order,
including appeals if taken, cannot be commercially marketed in any such country;
or
(iii) if the Product would materially infringe patents or rights
held by Third Parties with the result that the manufacture, or sale and
distribution of the Product by Bayer in such country, is or would be likely to
be enjoined or otherwise prohibited; or
(iv) if at any time during the term of this Agreement Bayer
decides not to exploit or not to continue the rights granted hereunder in any
part of the Territory or the Territory as a whole, due to economic reasons.
13.6 Effect of Expiration and Termination. Expiration or termination of
the Agreement shall not relieve the parties of any obligation accruing prior to
such expiration or termination. The provisions of Articles 10 (Confidentiality),
11 (Publication), 12 (Inventions) and 14 (Indemnification), shall survive the
expiration or termination of the Agreement.
13.7 Licenses under Sections 5.1.4 and 5.2.3 After Expiration and
Termination. The provisions of Sections 5.1.4 and 5.2.3 shall survive the
expiration or termination of the Agreement; provided, however, in the event of
termination for breach by either party, the license granted under Sections 5.1.4
and 5.2.3 shall be revoked only as to the party in breach and the party in
breach shall have no further rights thereunder.
13.8 Acquisition of Immune Response. In the event Immune Response shall
sell or transfer all or substantially all of its assets to a party which is not
an Affiliate or shall be a party to a merger or consolidation in which
shareholders of Immune Response prior to the merger or consolidation do not hold
a majority of the shares of the surviving corporation immediately thereafter (an
"Acquisition of Immune Response"), then Article 17 shall apply and all of Immune
Response's and Bayer's respective obligations and rights hereunder shall
continue and the acquiror of Immune Response's assets, or the surviving entity
in such merger or consolidation, shall confirm the same to Bayer in writing. In
addition, in the event of an Acquisition of Immune Response by a pharmaceutical
company which Bayer, in its sole discretion, believes will adversely affect the
Research Program, Bayer shall have the right, during the sixty (60) day period
following the consummation of the Acquisition of Immune Response, to terminate
the Research Program by written notice to Immune Response, in which event the
provisions of Section 13.2.2.1 shall apply.
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13.9 Failure of Bayer to Purchase Immune Response Common Stock. Immune
Response anticipates making an underwritten public offering of its common stock
(the "Common Stock") on a firm commitment basis pursuant to a registration
statement filed with the U.S. Securities and Exchange Commission (the
"Offering"). In the event that: (i) the Offering is made within the Research
Term; (ii) the aggregate gross proceeds of the Offering are not less than
$15,000,000 (not including any purchase to be made by Bayer); (iii) Immune
Response is not in default under any material provision of the Agreement; (iv)
Bayer is given an opportunity, in its sole discretion, to purchase Common Stock
registered in the Offering, having an aggregate purchase price of $4,000,000, at
a purchase price per share equal to the offering price in the Offering; and (v)
Bayer fails to purchase Common Stock registered in the Offering having an
aggregate purchase price of at least $4,000,000, at a purchase price per share
equal to the offering price in the Offering, Immune Response will have the right
to terminate the Agreement. Immune Response must exercise such right by
providing written notice to Bayer within 30 days after consummation of the
Offering, time being of the essence. If Immune Response does not duly exercise
its right to terminate the Agreement within such time period, it shall have
irrevocably waived such right. A termination of the Agreement pursuant to this
Section 13.9 shall be treated as an expiration of the Agreement, and all
licenses granted hereunder and all other obligations of the parties (except as
set forth in Section 13.6) shall terminate.
ARTICLE 14
INDEMNITY
14.1 Direct Indemnity. Each party shall indemnify and hold harmless,
and hereby forever releases and discharges, the other party from and against all
losses, liabilities, damages and expenses (including reasonable attorneys' fees
and costs) that the other party incurs as a result of any claim, demand, action
or other proceeding by any Third Party (collectively, all "Liabilities") arising
from conduct that constitutes (a) the breach of any material provision of the
Agreement by the indemnifying party, or (b) recklessness or willful misconduct
of the indemnifying party in the performance of its obligations under the
Collaborative Program; except in each case to the extent such Liabilities
resulted from the recklessness or willful misconduct of the other party.
14.2 Other Indemnity. Bayer shall indemnify and hold harmless, and
hereby forever releases and discharges, Immune Response from and against all
Liabilities for personal injury, death or disability or any product recall to
the extent caused by (a) any failure to test for or provide adequate warnings of
adverse side effects to the extent such failure arises out of acts or omissions
in connection with the clinical testing of any Product, (b) any manufacturing
defect in any Product (other than any Product manufactured and supplied by
Immune Response, or (c) any other act or omission (without regard to culpable
conduct) of Bayer, its Affiliates and sublicensees in connection with its
activities regarding Products contemplated by the Agreement;
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except in each case to the extent such Liabilities resulted from the
recklessness or willful misconduct of Immune Response.
14.3 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 14 shall promptly notify the other party (the
"Indemnitor") of any Liability or action for which the Indemnitee intends to
claim such indemnification, and the Indemnitor shall have the right to
participate in, and, to the extent the Indemnitor so desires, jointly with any
other Indemnitor similarly noticed, to assume the defense thereof with counsel
selected by the Indemnitor; 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, unless 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 obligations under this Article 14
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Indemnitor, which consent shall not be withheld unreasonably. The failure to
deliver notice to the Indemnitor within a reasonable time after the commencement
of any such action, if prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this Article
14, but the omission so to deliver notice to the Indemnitor will not relieve it
of any liability that it may have to any Indemnitee otherwise than under this
Article 14. The Indemnitor may not settle the action or otherwise consent to an
adverse judgment in such action that diminishes the rights or interests of the
Indemnitee without the express written consent of the Indemnitee. The
Indemnitee, its employees and agents, shall cooperate fully with the Indemnitor
and its legal representatives in the investigation of any action, claim or
liability covered by this indemnification.
14.4 Insurance. Immune Response shall maintain product liability
insurance with respect to the research, development and manufacture of Products
conducted by Immune Response, in such amount as Immune Response customarily
maintains with respect to the research, development and manufacture of its other
products. Bayer shall maintain, through self insurance or otherwise, product
liability insurance with respect to the development, manufacture and sales of
Products conducted by or on behalf of Bayer (other than by Immune Response), in
such amount as Bayer customarily maintains with respect to the development,
manufacture and sales of its other products. Bayer and Immune Response, as
applicable, shall maintain such insurance for so long as each continues to
research, develop, manufacture or sell any Products, and thereafter for so long
as Bayer and Immune Response, as applicable, each maintain insurance for itself
covering such research, development, manufacture or sales.
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ARTICLE 15
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants to the other party as
follows:
15.1 Corporate Existence and Power. Such party (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
state in which it is incorporated; (b) has the corporate power and authority and
the legal right to own and operate its property and assets, to lease the
property and assets it operates under lease, and to carry on its business as it
is now being conducted; and (c) is in compliance with all requirements of
applicable law, except to the extent that any noncompliance would not have a
material adverse effect on the properties, business, financial or other
condition of such party and would not materially adversely affect such party's
ability to perform its obligations under the Agreement.
15.2 Authorization and Enforcement of Obligations. Such party (a) has
the corporate power and authority and the legal right to enter into the
Agreement and to perform its obligations hereunder; and (b) has taken all
necessary corporate action on its part to authorize the execution and delivery
of the Agreement and the performance of its obligations hereunder. The Agreement
has been duly executed and delivered on behalf of such party, and constitutes a
legal, valid, binding obligation, enforceable against such party in accordance
with its terms.
15.3 Consents. All necessary consents, approvals and authorizations of
all governmental authorities and other Persons required to be obtained by such
party in connection with the Agreement have been obtained.
15.4 No Conflict. The execution and delivery of the Agreement and the
performance of such party's obligations hereunder (a) do not conflict with or
violate any requirement of applicable laws or regulations, and (b) do not
conflict with, or constitute a default under, any contractual obligation of such
party.
15.5 DISCLAIMER OF WARRANTIES. NOTHING IN THE AGREEMENT SHALL BE
CONSTRUED AS A REPRESENTATION MADE, OR WARRANTY GIVEN, BY EITHER PARTY THAT ANY
PATENT WILL ISSUE BASED UPON ANY PENDING PATENT APPLICATION WITHIN THE PATENT
RIGHTS, THAT ANY PATENT WITHIN THE PATENT RIGHTS WHICH ISSUES WILL BE VALID, OR
THAT THE USE OF ANY LICENSE GRANTED HEREUNDER OR THAT THE USE OF ANY PATENT
RIGHTS OR KNOW-HOW WILL NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF ANY
OTHER PERSON. FURTHERMORE, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PATENT RIGHTS, KNOW-HOW OR PRODUCTS,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
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15.6 Technical Disclosures. Immune Response warrants that, to the best
knowledge and belief of the officers of Immune Response, but subject to
limitation imposed by its obligations of confidentiality to Third Parties,
Immune Response has disclosed to Bayer such pertinent technical information
owned or controlled by Immune Response or its Affiliates as of the date of the
Agreement, regarding [CONFIDENTIAL TREATMENT REQUESTED], their manufacture and
use, as is reasonably necessary to enable Bayer to evaluate its interest to
enter into the Agreement.
ARTICLE 16
FORCE MAJEURE
Neither party shall be held liable or responsible to the other party
nor be deemed to have defaulted under or breached the Agreement for failure or
delay in fulfilling or performing any term of the Agreement to the extent, and
for so long as, 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 be 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.
ARTICLE 17
ASSIGNMENT
This agreement was entered into by Bayer with Immune Response because
of Immune Response's special skills including those skills of its personnel and
because of the complementary nature of Immune Response's and Bayer's business.
Accordingly, the Parties agree that this Agreement is personal in nature and
except for transfer to Xxxxx XX, the Agreement may not be assigned or otherwise
transferred, nor may any right or obligations hereunder be assigned or
transferred directly or indirectly by either party, whether voluntarily, by
operation of law or otherwise, without the written consent of the other party.
Any purported assignment in violation of this Article 17 shall be void.
Notwithstanding the foregoing, either party may, without such consent, assign
the Agreement and its rights and obligations hereunder in connection with the
transfer or sale of all or substantially all of its business, or in the event of
its merger, consolidation or change in control or similar transaction after
first giving the other party written notice of such event consistent with
Article 13.8. Any permitted assignee shall assume all obligations of its
assignor under the Agreement.
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ARTICLE 18
SEVERABILITY
Each party hereby acknowledges 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 the Agreement be
or become invalid, the parties 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 the Agreement with
such provisions. In case such provisions cannot be agreed upon, the invalidity
of one or several provisions of the Agreement shall not affect the validity of
the Agreement as a whole, unless the invalid provisions are of such essential
importance to the Agreement that it is to be reasonably assumed that the parties
would not have entered into the Agreement without the invalid provisions.
ARTICLE 19
MISCELLANEOUS
19.1 Notices. Any consent, notice or report required or permitted to be
given or made under the Agreement by one of the parties to the other shall be in
writing, delivered personally or by facsimile (and promptly confirmed by
personal delivery, U.S. first class mail or courier), U.S. first class mail 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 (except as otherwise
provided in the Agreement) shall be effective upon receipt by the addressee.
If to Immune Response: The Immune Response Corporation
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Ph.D.
with a copy to: Pillsbury Madison & Sutro LLP
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
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If to Bayer: Bayer Corporation
0000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Ph.D.
with a copy to: Bayer Corporation
000 Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxxxxx 00000
Attention: Legal Department
19.2 Applicable Law. The Agreement shall be governed by and construed
in accordance with the laws of the State of California, without regard to the
conflicts of law principles thereof.
19.3 Entire Agreement. This Agreement between Immune Response and
Bayer, together with its respective exhibits, including authorized amendments
thereto, contains the entire understanding of the parties with respect to the
subject matter hereof. All express or implied agreements and understandings,
either oral or written, heretofore made are expressly superseded by the
Agreement. The Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by both parties.
19.4 Headings. The captions to the several Articles and Sections hereof
are not a part of the Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
19.5 Independent Contractors. It is expressly agreed that Immune
Response and Bayer shall be independent contractors and that the relationship
between the two parties shall not constitute a partnership, joint venture or
agency. Neither Immune Response nor Bayer 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 party to
do so.
19.6 Waiver. The waiver by either party of any right hereunder, or the
failure to perform, or the waiver 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.
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19.7 Counterparts. The 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
IN WITNESS WHEREOF, the parties have executed the Agreement as of the
date first set forth above.
THE IMMUNE RESPONSE CORPORATION
By /s/ XXXXXX X. XXXXXXXX
---------------------------------------
Title Senior Vice President, Operations
------------------------------------
Date July 5, 1996
-------------------------------------
BAYER CORPORATION
By /s/ XXXXX XXXXXXXX
---------------------------------------
Title Executive Vice President
------------------------------------
Date July 8, 1996
-------------------------------------
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EXHIBIT A
DEVELOPMENT WORK PLAN
FVIII Gene Therapy Development Plan
IRC/Bayer Collaboration
The development program for collaboration between the Immune Response
Corporation (IRC) and Bayer anticipates the following:
- [CONFIDENTIAL TREATMENT REQUESTED]
- IRC will be responsible for the production of all preclinical and
clinical Phase I/II material, Bayer will be responsible for Phase III
clinical material and commercial manufacture.
- Bayer will be primarily responsible for all clinical development and
regulatory activities, both US and world-wide.
The minimal activities to be undertaken in support of this program up to
clinical development are listed in section A; the clinical development plan and
manufacturing program are summarized in sections B and C, respectively.
A. NON-CLINICAL DEVELOPMENT PLANS.
Achievement of a development decision will minimally trigger the following
activities, some of which may begin prior to this timepoint :
1. Preclinical development, which minimally includes all relevant
safety/toxicology studies, pharmacokinetic and pharmacologic safety
assessments, clinical assay development, etc, sufficient to permit
successful IND application and initiation of the clinical trial.
2. Process development, [CONFIDENTIAL TREATMENT REQUESTED].
3. Regulatory Activities, [CONFIDENTIAL TREATMENT REQUESTED].
Each of these elements is described conceptually below:
44
1. PRECLINICAL DEVELOPMENT.
Bayer and IRC will collaborate in the performance of all studies deemed
essential to the preclinical assessment of safety and efficacy of the clinical
candidate FVIII GeneDrug selected as a result of the development decision. At
present, these studies will minimally include the following:
i. [CONFIDENTIAL TREATMENT REQUESTED]
ii. [CONFIDENTIAL TREATMENT REQUESTED]
iii. [CONFIDENTIAL TREATMENT REQUESTED]
iv. [CONFIDENTIAL TREATMENT REQUESTED]
v. [CONFIDENTIAL TREATMENT REQUESTED]
vi. [CONFIDENTIAL TREATMENT REQUESTED]
Wherever required, these studies will be performed according to prevailing
standards of quality, including but not limited to Good Laboratory Practice
standards, and in facilities meeting current accreditation standards for both
USDA and AAALAC or equivalent.
[CONFIDENTIAL TREATMENT REQUESTED]
2. PROCESS DEVELOPMENT.
IRC will be responsible for the development of all processes and associated
infrastructure (facility, equipment) for the preparation of preclinical and
Phase I and II clinical supplies of FVIII GeneDrug, meeting specifications
agreed to jointly with Bayer. Minimally, these efforts should include the
following:
i. [CONFIDENTIAL TREATMENT REQUESTED]
ii. [CONFIDENTIAL TREATMENT REQUESTED]
iii. [CONFIDENTIAL TREATMENT REQUESTED]
iv. Preparation of all necessary documents and record systems
sufficient to enable the successful filing of an IND and
initiation of clinical studies, in accordance with prevailing
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standards for Good Manufacturing Procedures and Bayer Quality
Assurance standards. [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
In the case of [CONFIDENTIAL TREATMENT REQUESTED], Bayer will
assume responsibility for provision of this component to IRC
according to the specifications established by IRC for the current
[CONFIDENTIAL TREATMENT REQUESTED] component unless a given
specification is irrelevant [CONFIDENTIAL TREATMENT REQUESTED] or
additional specifications are required as appropriate to the
recombinant source of this ligand [CONFIDENTIAL TREATMENT
REQUESTED].
In the case of [CONFIDENTIAL TREATMENT REQUESTED]emerging from the
IRC- directed research program, IRC will be responsible for the
manufacture and quality assurance of the component as well as any
modifications required in the production of the [CONFIDENTIAL
TREATMENT REQUESTED], sufficient to meet the safety, efficacy and
quality criteria established above for the [CONFIDENTIAL TREATMENT
REQUESTED].
Bayer will assume full responsibility, including infrastructure and capacity
demands, for clinical supplies for all Phase III studies and commercial
manufacturing of the FVIII GeneDrug. Bayer and IRC will collaborate in the
efficient transfer and upscaling of all processes as necessary, in order to
minimize any delays in the clinical development program.
3. REGULATORY ACTIVITIES.
Bayer will be responsible for filing of the IND and all related registration
documents required for the clinical and commercial development of the FVIII
GeneDrug. IRC and Bayer will collaborate in the strategies and execution of all
activities necessary to efficiently advance the development program, including
but not limited to:
Identification of critical regulatory requirements which the
development program must address in anticipation of registration efforts,
including facility validation.
Design, specification and compilation of all reports, documents and
related technical materials to support registration requirements, both US and in
other geographies.
Planning, scheduling and execution of interactions, meetings and all
communications between the parties and the FDA and other registration
authorities, as appropriate but including pre-IND and clinical update meetings.
[CONFIDENTIAL TREATMENT REQUESTED]
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It is expected the result of communications between Bayer and the registration
authorities may influence the specifications and plans for the development
programs as outlined above.
B. CLINICAL DEVELOPMENT.
[CONFIDENTIAL TREATMENT REQUESTED] Bayer may, at its discretion, use contract
clinical groups to complement internal efforts but will inform IRC of such
intentions prior to commitment.
The precise design of the different trials to be undertaken and the timing
required will be established as the research plan progresses towards development
decisions.
C. MANUFACTURING DEVELOPMENT.
IRC will be responsible for process development, qualification and provision of
all preclinical and Phase I and II clinical material in a manner consistent with
the objectives outlined above (section A. 2.). Bayer will be responsible for
provision of all Phase III materials and commercial scale production of the
candidate FVIII GeneDrug. IRC will endeavor to develop its processes and
specifications in a manner which is commercially scalable, manufacturing
friendly and transferable to Bayer or its sublicensee (i.e. contract
manufacturer). IRC will consult with Bayer during the development of the
processes and will provide support during the process transfer so that minimal
impact upon initiation of the Phase III trials occurs.
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EXHIBIT B
RESEARCH WORK PLAN
FVIII Gene Therapy Research Plan
IRC/Bayer Collaboration
The research program for collaboration between the Immune Response Corporation
(IRC) and Bayer envisions the following elements as distinct from the
development program (described separately):
1. [CONFIDENTIAL TREATMENT REQUESTED]
2. [CONFIDENTIAL TREATMENT REQUESTED]
3. [CONFIDENTIAL TREATMENT REQUESTED]
Each of these elements is described conceptually below:
1. [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
i. [CONFIDENTIAL TREATMENT REQUESTED]
ii. [CONFIDENTIAL TREATMENT REQUESTED]
iii. [CONFIDENTIAL TREATMENT REQUESTED]
iv. [CONFIDENTIAL TREATMENT REQUESTED]
2. DEVELOPMENT DECISION CRITERIA.
IRC and Bayer will work collaboratively to advance the selected plasmid towards
a development decision by minimally satisfying the following performance
criteria:
i. [CONFIDENTIAL TREATMENT REQUESTED]
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ii. [CONFIDENTIAL TREATMENT REQUESTED]
iii. [CONFIDENTIAL TREATMENT REQUESTED]
iv. [CONFIDENTIAL TREATMENT REQUESTED]
v. [CONFIDENTIAL TREATMENT REQUESTED]
3. [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
i. [CONFIDENTIAL TREATMENT REQUESTED]
ii. [CONFIDENTIAL TREATMENT REQUESTED]
iii. [CONFIDENTIAL TREATMENT REQUESTED]
iv. [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
It is anticipated the joint Steering Committee will review, prioritize and
conclude successful completion of all of the above objectives.
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EXHIBIT C
IMMUNE RESPONSE PATENTS AND PATENT APPLICATIONS
[CONFIDENTIAL TREATMENT REQUESTED]
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